COURT OF APPEAL FOR ONTARIO

CITATION:  Baywood Homes Partnership v. Haditaghi, 2014 ONCA
    450

DATE: 20140609

DOCKET: C57087

Rouleau, Lauwers and van Rensburg JJ.A.

BETWEEN

Baywood Homes
    Partnership, 2131059 Ontario Limited, 2206659 Ontario Limited,
    1367169 Ontario Limited and Ralph Canonaco

Plaintiffs (Appellants)

and

Alex
    Haditaghi, also known as Alex Vahid Haditaghi also known as Vahid Haditaghi,
    Majid Haditaghi, also known as Michael Haditaghi  also
    known as Mark Haditaghi, Moneylogix Group, Inc., Mortgagebrokers.com
    Inc., Moneylogix Group Inc., Mortgagebrokers.com
    Financial Group of Companies Inc., Gary
    Cilevitz, Michael Knarr, also known as Mike Knarr and Farideh, Ronhbakhsh, also
    known as Farideh Rouhbakhsh

Defendants (Respondents)

David W. Foulds and Jennifer A. Whincup, for the
    appellants

George J. Karayannides, for the respondents

Heard:  March 4, 2014

On appeal from the decision of Justice Edward P. Belobaba
    of the Superior Court of Justice, dated April 18, 2013, reported at 2013 ONSC
    2145.

Lauwers J.A.:

[1]

The motions judge granted summary judgment dismissing the appellants action,
    which alleged fraud and other impropriety, on the basis that it was precluded
    by the terms of a release that he accepted as valid. The motions judge did not,
    however, grant summary judgment on the respondents counterclaim on two
    promissory notes. Before refusing to grant summary judgment on the
    counterclaim, he conducted what he described as a half-day mini-trial in the
    exercise of his authority under rule 20.04(2.2) of the
Rules of Civil
    Procedure,
R.R.O. 1990, Reg. 194. After hearing the witnesses, he found
    that he was unable to conclude that the two promissory notes signed by the
    appellant in favour of the respondent were valid, and he referred the issue of
    their validity to trial.

[2]

For the reasons set out below, I would allow the appeal, set aside the
    judgment and require both the claim and counterclaim to proceed to trial.

A.

BACKGROUND

[3]

For convenience I will adopt the monikers used by the motions judge: Alex,
    for the defendant, Alex Haditaghi; Ralph for the plaintiff, Ralph Canonaco,
    and Frank for Ralphs brother, Frank Canonaco.

[4]

The litigation stems from a series of transactions related to a property
    in Barrie (the Mapleview Property). The contextual facts were summarized by
    the motions judge, at para. 5:

Ralph and his family are experienced home-builders; Alex is an
    expert mortgage broker.  The two of them, with their colleagues and through
    their respective companies, engaged in a series of transactions involving a
    property in Barrie over the course of the turbulent financial year that was
    2009. Disputes arose, giving rise to this litigation.  Initially, Alex sued
    Ralph on two promissory notes that Ralph had signed personally and Alex
    believed were due and owing, one for $750,000 and another for $500,000.  Ralph
    countered with a multi-million dollar lawsuit accusing Alex and certain of his
    companies and colleagues of fraud and other improprieties, and numerous breaches
    of agreement. The competing lawsuits were eventually consolidated into a single
    proceeding that now consists of Ralphs action and Alexs counterclaim on the
    two promissory notes (the Two PNs).

[5]

The resolution of this appeal requires a detailed exploration of the
    transaction history. The execution of a release, dated November 12, 2009, which
    the motions judge found to bar the appellants claims, as well as the execution
    of the two promissory notes around the same time, were bound up in the series
    of transactions that gave rise to what the motions judge characterized as
    admittedly false and fake documentation. The release at issue and the
    promissory notes were the product of the same business culture, which the
    motions judge described, at para. 17, as one in which the parties often
    ignored or worked around carefully drafted documentation or worse, fabricated
    such documentation when it was deemed necessary to do so.

[6]

The evidence shows that, over the course of 2009, Ralph and Alex engaged
    in a complex series of transactions, the results of which were beneficial to
    Alex but quite detrimental to Ralph. By December 2009, Alex had managed to
    leverage the Mapleview Property and the financial distress of the Mapleview Company,
    which was the registered owner of the Mapleview Property to great advantage,
    and, in particular, to satisfy an outstanding personal judgment against him; to
    acquire and dispose of valuable rights in the Mapleview Property; and to obtain
    promissory notes from Ralph, two of which remain outstanding in the total
    amount of $1,250,000. By contrast, Ralphs interest in the Mapleview Property was
    diminished in the series of transactions between the parties.

(1)

Alex Acquires the Mapleview Property

[7]

Around December 2008, Ralph was introduced to Alex and retained his
    services to secure mortgage financing for various projects of Baywood Homes
    Partnership (Baywood), a company beneficially owned by Ralph and his family
    members. On January 15, 2009, the parties signed a letter of interest. Alex was
    to secure $13 million in mortgage financing for Baywood and was to receive a
    $50,000 fee if he successfully obtained a mortgage commitment. The parties
    disagree on whether Alex actually discharged his obligations under their agreement:
    Ralph says Alex obtained a letter of understanding, not a firm mortgage
    commitment. Alex claims to have secured the mortgage commitment, but says the
    deal fell through because Ralph misrepresented the value and liabilities of
    Baywoods projects.

[8]

By the spring of 2009, Baywood faced financial pressure and refinancing
    was necessary. According to Ralph, Alex proposed to transfer the Mapleview
    Property to a public company controlled by Alex. Alex would then refinance the
    mortgages on the Mapleview Property. On May 11, 2009, the parties executed the
    first of two share purchase agreements (the First Share Purchase Agreement). Under
    this agreement, the public company controlled by Alex  Moneylogix U.S.
    acquired the Mapleview Company  shares and, through it, the Mapleview Property.
    In exchange, Ralph received about 10 percent of the issued and outstanding
    shares in Moneylogix U.S. On May 20, 2009, in connection with the First Share
    Purchase Agreement, Ralph executed a release in favour of the Mapleview Company
    and an entity referred to as Moneylogix Group Inc.

[9]

After the closing of the First Share Purchase Agreement, Moneylogix U.S.
    assigned the Mapleview Company shares to its wholly-owned Canadian subsidiary,
    Moneylogix Ontario.

[10]

The
    effect of the First Share Purchase Agreement was to transfer control of the
    Mapleview Company to Alex. Ralph retained an indirect interest in the Mapleview
    Property through the shares he received in Moneylogix U.S. Ralph claims that,
    after the First Share Purchase Agreement, he learned for the first time that
    Moneylogix U.S. did not have any substantial assets apart from the Mapleview
    Company shares it had just acquired.

(2)

Alex Registers the Trisan Mortgage and Quitclaim

[11]

After
    the closing of the First Share Purchase Agreement, Alex caused a $950,000
    mortgage to be registered on the Mapleview Property, and provided an escrow
    quitclaim as security for the mortgage. The mortgage and escrow quitclaim were
    provided in favour of the Trisan Equitable Mortgage Corporation (Trisan), in
    satisfaction of an outstanding October 2007 judgment against Alex and several
    of his companies. In consideration for the registration of the mortgage and the
    escrow quitclaim, Moneylogix U.S. was released from the issuance of 15 million
    shares held back by the company and due to Alex.

[12]

Ralph
    claims that he was unaware of the mortgage and escrow quitclaim when they were
    provided. Ralph also claims that Alex defaulted on the existing Mapleview
    Property mortgages, allowed permits for the property to lapse, and failed to
    obtain new financing for the property as promised.

(3)

Ralph Re-Acquires the Mapleview Property

[13]

In
    August 2009, Ralph re-acquired the Mapleview Company shares. The parties
    disagree on what motivated this transaction. Ralph says that he was concerned
    with Alexs management of the Mapleview Property, and particularly the
    registration of the mortgage and quitclaim in favour of Trisan. He wanted to
    re-acquire the Mapleview Property before his investment was lost. Alex says he
    introduced Ralph to a social housing entity called Options for Homes, and Ralph
    wanted to re-acquire Mapleview with a view to developing it with that entity.
    In any event, on August 21, 2009, the parties executed the second of the share
    purchase agreements (the Second Share Purchase Agreement), by which Ralph
    re-acquired the Mapleview Company shares.

[14]

Under
    the terms of the Second Share Purchase Agreement, Alex retained: (1) a $2.53
    million mortgage secured against the Mapleview Property and Baywoods Lisgar
    property; (2) the right to fee simple ownership of 100 residential units on the
    Mapleview Property; and (3) the right to acquire a further 150 residential
    units (the Ancillary Rights). Alex testified at the mini-trial that the value
    of the Ancillary Rights exceeded $4 million. Ralph also executed a second
    release on behalf of the Mapleview Company in favour of Moneylogix Group Inc.

[15]

Thus,
    after the close of the Second Share Purchase Agreement, Ralph once again owned
    the Mapleview Company shares, but the Mapleview Property was encumbered by an
    additional mortgage, and Alex retained the Ancillary Rights in the Mapleview
    Property.

(4)

The Parties Execute the Option to Purchase

[16]

Following
    the Second Share Purchase Agreement, Ralph obtained new financing from 2219657
    Ontario Inc. (221). The principal of 221, Albert Soberano, required that Alex
    grant an option, in favour of 221, to purchase his Ancillary Rights in the
    Mapleview Property. On October 6, 2009, Alex granted 221 a 30-day option to
    purchase the Ancillary Rights for $2 million (the Option to Purchase).

[17]

Also
    on October 6, 2009, Alex and Ralph signed an exclusive mortgage arrangement
    (the Settlement Agreement), which provided that Ralph owed $500,000 to
    Mortgagebrokers.com, another of Alexs companies. Ralph executed a $500,000 promissory
    note in favour of Mortgagebrokers.com dated October 6, 2009. Ralph also
    executed a second promissory note also dated October 6, 2009, in the amount of
    $750,000, in favour of Moneylogix Group Inc. He executed a third promissory
    note dated October 6, 2009, in the amount of $245,240, in favour of Moneylogix
    Group Inc., which has been paid. There was some evidence to suggest that,
    notwithstanding the dates on the notes, they were actually executed in
    November, around the time that the Option to Purchase was exercised.

(5)

Ralph Executes the Third Release

[18]

221
    exercised the Option to Purchase on November 3, 2009. An assignment agreement
    was executed on November 16, 2009, which transferred the Ancillary Rights to a
    company related to 221. On November 12, 2009, Ralph personally and on behalf of
    the Mapleview Company executed a third release (the Third Release). According
    to Alex, the Third Release was signed in connection with the assignment of the
    Ancillary Rights. Ralph agrees that the Third Release was signed as part of the
    same series of transactions that gave rise to the promissory notes.

[19]

According
    to Alex, Ralph executed the promissory notes in connection with the Option to
    Purchase, in order to compensate Alex to some degree for the discrepancy
    between the value of the Ancillary Rights  over $4 million according to Alex
    and the option price of $2 million.

[20]

Ralph
    took a different view of events, though he did not dispute that the promissory
    notes were related to the Option to Purchase. According to Ralph, he executed
    both notes as a favour to Alex, and Alex assured him that they would not be
    enforced. Ralph testified that the notes were a sham that enabled Alex to
    account to investors for the discrepancy between the value of the Ancillary Rights
    and the option price.

[21]

Regardless
    of which account is accurate, the parties agree that it was the Option to Purchase
    that motivated the promissory notes. The same Option to Purchase also gave rise
    to the Third Release: the option was exercised on November 3, 2009, the Third
    Release was executed on November 12, 2009, and the Ancillary Rights were
    assigned and transferred by way of an assignment agreement dated November 16,
    2009. In other words, the promissory notes and Third Release were part and
    parcel of the same series of transactions: the promissory notes were executed
    in connection with the grant of the Option to Purchase, and the Third Release
    was executed in connection with the exercise of that Option.

B.

The Decision under Appeal

[22]

After
    hearing the summary judgment motion, the motions judge ordered a mini-trial
    under rule 20.04(2.2) of the
Rules of Civil Procedure
. He explained
    his reason for doing so, at para. 14:

I wanted to hear more about the Two PNs from Ralph and Alex in person.
    I decided that a mini-trial would assist me in assessing their conflicting
    evidence and deciding whether the issue of enforceability could be adjudicated
    summarily.

At no time prior to the close of the mini-trial did
    the motions judge express a conclusion on any aspect of the summary judgment
    motion, though he directed the mini-trial relating only to the two promissory
    notes.

[23]

At
    the mini-trial, the motions judge heard from three witnesses who gave evidence
    about the promissory notes: Alex, Ralph, and Ralphs brother, Frank.  The
    motions judge rejected Franks evidence.  He then said, at para.14: for me,
    the contest came down to the PN documentation and to Alex and Ralphs
    explanations as to why the two PNs were signed.

[24]

The
    motions judge outlined the competing versions of the evidence, and then
    concluded, at paras. 17 -18:

As I have already noted, all of the documentary evidence before
    me supports Alexs version of events.  However, it became apparent as the
    mini-trial progressed, that in the business culture that had developed between
    them, Ralph and Alex often ignored or worked around carefully drafted
    documentation or worse, fabricated such documentation when it was deemed
    necessary to do so.

The best example, as already noted, is the $500,000 PN. The
    documentation shows that Ralph made the note payable to Alexs other public
    company, Mortgagebrokers.com. The documentation also explains that the money
    was being paid to Mortgagebrokers.com as a settlement for fees due and owing to
    this company.  However, none of this was true.  No fees were owing to
    Mortgagebrokers.com. The applicable settlement agreement that was signed by
    both Ralph and Alex was itself a fake document that had no connection with what
    was really happening.

[25]

As
    a result of the questions that he was left with after the mini-trial, the
    motions judge decided that a full trial on the enforceability of the promissory
    notes was necessary.  He explained, at paras. 21-23:

The problem for me is obviously the $500,000 PN and its related
    documentation.  I think its fair to say that but for the questions surrounding
    this particular promissory note, and given Ralphs uneven testimony at the
    mini-trial, I would likely have found in favour of the defendants and would
    have granted summary judgment on the Two PNs.  Should I now at least grant
    judgment on the $750,000 PN? In my view, this would neither be fair nor
    reasonable.  The Two PNs are interconnected, whosoever version is believed.  I
    cannot enforce one and send the other on to trial.

In sum, the mini-trial conducted under Rule 20.04(2.2)
    persuaded me that I am unable to achieve a full appreciation of the evidence
    that will be needed to make dispositive findings about the enforceability of
    the two PNs. This is a question that does not turn solely on the documentation,
    given that some of the documentation is admittedly false. A full and complete
    examination of why the parties did what they did is required in the interests
    of justice.  A trial judge will be in a better position to hear all of the
    evidence from all of the witnesses, including Ralphs lawyer and Alexs
    accountant, and make the appropriate findings.

I find that the enforceability of the Two PNs are genuine
    issues that require a trial.

[26]

The
    motions judge came to the conclusion, by contrast, that the Third Release was
    entirely authentic and valid.  He explained, at paras. 7-9:

During the course of the hearing of the motion for summary
    judgment, I was persuaded on the evidence before me that Ralph's action was
    completely precluded by the November 12, 2009 release agreement, referred to as
    the Third Release. The language is clear and comprehensive and can be
    objectively assessed. None of the arguments advanced by Ralph about the
    document's scope and content or its signatories are tenable. And, there is no
    credible evidence in the material before me that can seriously support the
    allegations of duress, unconscionability,
non est factum
or lack of
    consideration. On its face, the Third Release seems to be a complete bar to
    this action.

But the most telling and most persuasive indicator of its
    validity was Ralph's own testimony. During the cross-examination on his
    affidavit, Ralph admitted that "as of December 2009, there was a clean
    slate." He agreed that neither he nor any of his companies "had any
    claims against [Alex]."

Ralph's counsel points out that Ralph also added that
    "likewise [Alex] didn't have any claims against [me]." This
    additional qualifier deserves the following comment. If Ralph meant that the
    Third Release explicitly released any claims that Alex may have had as against
    him, that interpretation is demonstrably incorrect. If he meant, as is more
    likely, that he had a separate (perhaps earlier) understanding or agreement
    with Alex that Alex would not pursue him on the Two PNs, then this can be
    considered as a separate issue and will be, below.

[27]

The
    motions judge added, at paras. 11 -12:

I refer to the existence of fake documents while discussing
    the Third Release because Ralphs counsel tried to persuade me that the Third
    Release may also be tainted by these same concerns and thus  full review of the
    factual background was necessary, providing yet another reason why the entire
    matter should go to trial.  I acknowledge that, standing alone, the
    authenticity or intended purpose of the Third Release could well be doubted
    given the apparent use and prevalence of fake documentation. However, I am
    prepared to adjudicate the Release issue summarily, and in favour of Alex,
    mainly because of Ralphs clean state admissions on cross-examination as
    discussed above.

These admissions in my view, confirm both the authenticity and
    intended purpose of the Third Release.  By December 2009, as Ralph himself
    admitted, neither he nor his companies had any claims against Alex and his companies.
    And, given that all of the claims in the plaintiffs action relate to alleged
    breaches that predate the Release, and given that none of the legal defences
    advanced on the plaintiffs behalf (duress, unconscionability,
non est
    factum
and lack of consideration) can succeed on the record before me, I
    have no difficulty concluding that the plaintiffs action (except for the
    claims relating to the Two PNs, which I will explain shortly) is precluded and
    should be summarily dismissed.  [Footnote omitted.]

C.

THE POSITIONS OF THE PARTIES

[28]

The
    promissory notes and the Third Release were all signed at roughly the same time
    and in the context of the same series of transactions. The appellants argue
    that the motions judges misgivings about the reliability of the evidence on
    the promissory notes, which led him to order a trial on their enforceability,
    ought to have influenced his thinking on the validity of the release. The two
    promissory notes are interconnected, and so is the Third Release, which must
    also, the appellants assert, be infected with the same reliability worries.

[29]

The respondents submit that the process undertaken by the
    motions judge was consistent with the Supreme Court of Canadas decision in
Hryniak
    v. Mauldin
, 2014 SCC 7, even though it was released after this decision.
Hryniak
encourages motion judges to use the mini-trial referred to in
rule 20.04(2.2); the motions judge exercised his
    discretion to trigger the fact-finding mini-trial; and this court ought to
    defer to him. The respondents
point out that the motions judge
    focussed on the very issue of the validity of the Third Release, at paras.
    11-12 excerpted above, and assert that
he
    made no palpable and overriding error.

D.

ANALYSIS

(1)

The Standard of Review

[30]

In
Hryniak
, at para. 81, Karakatsanis J. ruled that
    the exercise of powers under the new summary judgment rule attracts appellate
    deference. The question as to whether there is a genuine issue for trial is a
    question of mixed fact and law; in the absence of an extricable error in
    principle, or palpable and overriding error, this determination should not be
    disturbed on appeal.

(2)

Summary Judgment under
Hryniak

[31]

In
Hryniak
the Supreme Court of
    Canada rejected this courts full appreciation test for summary judgment in
Combined
    Air Mechanical Services v. Flesch
, 2011 ONCA 764
,
ruling, at para. 4, that: in interpreting these
    provisions, the Ontario Court of Appeal placed too high a premium on the full
    appreciation of evidence that can be gained at a conventional trial. Karakatsanis
    J. stated, at para. 56, that:
[w]hile I agree that a motion judge must
    have an appreciation of the evidence necessary to make dispositive findings,
    such an appreciation is not only available at trial.

[32]

Rule
    20.04(2.2) empowers motion judges to order that oral evidence be presented by
    one or more parties, under the heading of Oral Evidence (Mini-Trial). The
    summary judgment rules, as interpreted in
Hryniak
, do permit the
    fact-finding process to be staged, but only where, as noted by Karakatsanis J.,
    at para. 66, that: will lead to a fair and just result and will serve the
    goals of timeliness, affordability and proportionality in light of the
    litigation as a whole. She stated
,
at para. 63, that the power to order a mini-trial should be employed when it
    allows the judge to reach a fair and just adjudication on the merits and it is
    the proportionate course of action.

(3)

The Application of Hryniak to the Decision

[33]

In
    my view, the motions judge made a material error in principle in his approach
    to this motion in light of the Supreme Court of Canadas decision in
Hryniak
.
    He erred in failing to assess the advisability of the summary judgment process
    in the context of the litigation as a whole.

i.

The Litigation as a Whole

[34]

Karakatsanis
    J. noted, at para. 60:

The "interest of justice" inquiry goes further, and
    also considers the consequences of the motion in the context of the litigation
    as a whole. For example, if some of the claims against some of the parties will
    proceed to trial in any event, it may not be in the interest of justice to use
    the new fact-finding powers to grant summary judgment against a single
    defendant. Such partial summary judgment may run the risk of duplicative
    proceedings or inconsistent findings of fact and therefore the use of the
    powers may not be in the interest of justice. On the other hand, the resolution
    of an important claim against a key party could significantly advance access to
    justice, and be the most proportionate, timely and cost effective approach.

[35]

The
    motions judge was obliged to assess the advisability of a staged summary
    judgment process in the context of the litigation as a whole. This he failed
    to do.

[36]

As
    noted, the promissory notes and Third Release were part and parcel of the same
    series of transactions: the promissory notes were executed in connection with the
    grant of the Option to Purchase, and the Third Release was executed in
    connection with the exercise of that Option. Given that, the motions judges attempt
    to detach the Third Release from the web of paper that was, quite rightly,
    cause for the motions judges concern, was not the appropriate approach. If, as
    he concluded, the promissory notes were questionable because the parties
    fabricated and executed documents that did not reflect the true state of
    affairs, and were therefore not amenable to enforcement on a motion for
    summary judgment, then the same could well be true of the Third Release.

[37]

In
    the complex situation in this case, it is therefore entirely possible that the
    trial judge who hears the trial of the issue on the validity of the promissory
    notes will develop a fuller appreciation of the relationships and the
    transactional context than the motions judge. That could force a trial decision
    on the promissory notes that would be implicitly inconsistent with the motions
    judges finding that the Third Release is fully valid and effective, even
    though the parties would be bound by that finding. The process, in this
    context, risks inconsistent findings and substantive injustice.

[38]

In
    light of the factual connection between the promissory notes and Third Release,
    and Ralphs testimony, it was an error in principle for the motions judge to
    refer the enforceability of the promissory notes to trial while summarily determining
    the enforceability of the Third Release.

ii.

Ralphs Admission

[39]

In
    this case the motions judge relied heavily on certain admissions that were made
    by Ralph during cross-examination on his affidavit, but which only came before
    him by way of a transcript. The statements, which the motions judge
    characterized as fatal admissions, were never put to Ralph during the
    mini-trial; he had no opportunity to explain how his evidence on the promissory
    notes might square with, if it could, the statements that he made in the
    transcripted cross-examination.

[40]

In
    my view, it was inappropriate for the motions judge to distinguish between the
    promissory notes and the Third Release on the basis of de-contextualized
    transcript evidence.

[41]

I
    reproduce the exchange relied on by the motions judge:

Q. Okay, good. So by December of 2009 you believed that you had
    resolved all your disputes with Alex, right?

A. Yeah.

Q. And you werent  whatever you had signed and all the
    agreements that you had done with him, as far as you understood by December of
    2009 it was a clean slate, everything had been released, right? Right?

A. Everything was done. His mother didnt lose his house, I
    didnt lose the land. It cost a few bucks back and forth. Business was
    finished.

Q. And so your claims against him were done, right?

A. And him with me.

Q. Perfect. Thats what your understanding was as of December
    2009, that there was a clean slate, you no longer had any claims against him,
    and when I say you, Im talking about the Baywood entities, right? Right?

A. Yeah.

Q. And likewise he didnt have any claims against you, right?

A. Right.

The motions judge was prepared to summarily adjudicate
    the issue of the Third Release, unlike the promissory notes, on the basis of
    these clean slate admissions.

[42]

The
    clean slate admissions were not, however, made in relation to the Third
    Release, or any release, for that matter. There is no mention of the Third
    Release anywhere in this portion of the evidence. Rather, Ralph was asked about
    an email he sent to Alex before Christmas in December 2009, in which he thanked
    Alex for his support during a difficult period. Alex responded to Ralph and
    thanked him for his friendship. In connection with this email exchange, Ralphs
    evidence was that he believed the parties dealings to be at an end. Read in
    context, this evidence does not amount to an admission that the Third Release
    was intended to be a genuine agreement despite the parties culture of document
    fabrication.

[43]

The
    motions judges treatment of the clean slate admissions is also undermined by
    other portions of the cross-examination on Ralphs affidavit. Elsewhere in that
    cross-examination, Ralph responded to specific questions about the Third
    Release. That line of questioning included the following exchanges:

Q. You understood this to be a full and final release? Do you
    see that?

A. I dont know what I understood here. This was never
    explained to me.

Q. My question is, sir, did you understand that when you signed
    this document you were releasing Alex and Moneylogix for all of the problems
    you had with them prior

A. No way.

Q. Prior to November

A. No.

Q.  19, 2009?

A. No.

[44]

What
    happened here illustrates one of the problems that can arise with a staged
    summary judgment process in an action where credibility is important. Evidence
    by affidavit, prepared by a partys legal counsel, which may include voluminous
    exhibits, can obscure the affiants authentic voice. This makes the motion
    judges task of assessing credibility and reliability especially difficult in a
    summary judgment and mini-trial context. Great care must be taken by the motion
    judge to ensure that decontextualized affidavit and transcript evidence does
    not become the means by which substantive unfairness enters, in a way that
    would not likely occur in a full trial where the trial judge sees and hears it
    all.

[45]

Judges
    are aware that the process of preparing summary judgment motion materials and cross-examinations,
    with or without a mini-trial, will not necessarily provide savings over an
    ordinary discovery and trial process, and might not serve the goals of
    timeliness, affordability and proportionality (
Hryniak
at para. 66). Lawyer
    time is expensive, whether it is spent in court or in lengthy and nuanced
    drafting sessions. I note that sometimes, as in this case, it will simply not be
    possible to salvage something dispositive from an expensive and time-consuming,
    but eventually abortive, summary judgment process. That is the risk, and is
    consequently the difficult nettle that motion judges must be prepared to grasp,
    if the summary judgment process is to operate fairly.

E.

Disposition

[46]

For
    these reasons, I would allow the appeal, set aside the summary judgment, and
    refer both the claim and the counterclaim to trial. In view of the appellants
    success, I would fix costs of the appeal in the amount of $27,000 all-inclusive
    payable to the appellants. The motions judge awarded no costs, in view of
    divided success. I would refer the costs of the motion to the trial judge.

Released:  June 9, 2014 PR

P.
    Lauwers J.A.

I
    agree Paul Rouleau J.A.

I
    agree K. van Rensburg J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Blundell v. Milmine, 2014 ONCA 480

DATE: 20140619

DOCKET: C58096

MacPherson, Simmons and Gillese JJ.A.

BETWEEN

Melvin Blundell

Plaintiff (Respondent)

and

Stephen Bruce Milmine, personally and as Estate Trustee
    for the Estate of Sylvia Milmine

Defendants (Appellants)

R. Stewart, for the appellants

L. Farrell, for the respondent

Heard: June 9, 2014

On appeal from the judgment of Justice Kelly A. Gorman of
    the Superior Court of Justice, dated November 15, 2013.

By the Court:

[1]

Sylvia Milmine had five sons, one of whom is Stephen Milmine.  She died
    in September 2001, leaving Stephen as her estate trustee.

[2]

Stephen Milmine appeals from a judgment dated November 15, 2013 (the
    Judgment) in his capacity as estate trustee and personally.

[3]

For the reasons that follow, the appeal is allowed.

BACKGROUND

IN BRIEF

[4]

Through her will (the Will), Ms. Milmine directed that the residue of
    her estate (the Estate) is to be distributed in equal shares to six people:
    her five sons and Melvin Blundell, Ms. Milmines common law spouse and the
    respondent in this appeal (the respondent).

[5]

Under the terms of the Will, the respondent was given the right to
    operate and manage Ms. Milmines three rental properties and to receive the
    profits therefrom.  The Will provided that the properties were to be sold no
    later than December 31, 2017.  It also gave Ms. Milmines sons the first right
    to purchase the properties.

[6]

Stephen Milmine understood that the Will empowered him, as the estate
    trustee, to sell the properties at any time but no later than December 31,
    2017.  In March 2004, he sold the properties to himself and his wife, Laurie
    Milmine.

[7]

The respondent objected to the sale of the properties because he thought
    that the Will directed that the properties were not to be sold before December 31,
    2017.

[8]

A trial on this matter ensued and the respondent prevailed.

[9]

However, the properties could not be reconveyed to the Estate because
    they had been mortgaged and the bank holding the mortgages would not consent.

[10]

The
    parties entered into an agreement to settle their differences.  This led to an order
    dated October 6, 2009 (the October 2009 Order), which dictated that:

1.  Stephen
    Milmine and Laurie Milmine were to hold the properties in trust for the Estate
    and the respondent;

2. The
    respondent had responsibility for managing the properties;

3.  Capital
    expenditures for the properties were to be paid by the Estate and all regular
    operating expenses were to be paid from the income from the properties; and

4. Stephen
    Milmine was personally liable to pay damages to the respondent of (i)
    $63,174.10 for lost income on the properties from March 1, 2004, to October 27,
    2009, plus (ii) $1,000 per month until the respondent began receiving the income
    from the properties.

[11]

The
    respondent began managing the properties on March 1, 2011.  He collected the
    rents from that point forward but did not make the mortgage payments.

[12]

The
    Estate paid the mortgages for March, April, May and June 2011 but discontinued
    that practice after the parties were unable to resolve their differences over
    management of the properties.

[13]

It
    appears that the parties agreed that the 2009 Order required the respondent to
    pay the mortgages from the rental income he received for the properties.  But
    the respondent felt that he should not have to pay the mortgages because
    Stephen Milmine owed him money pursuant to the terms of the October 2009
    Order.

[14]

In
    any event, no further mortgage payments were made after June 2011.

[15]

In
    May 2012, the respondent brought a motion to quantify his damages arising after
    March 1, 2011.  That motion was adjourned to give Stephen Milmine an
    opportunity to provide evidence.  The same order provided that if the mortgagee
    proceeded with a sale of the three properties, the net proceeds of sale should
    be paid into court.  The mortgagee eventually sold the three properties under
    power of sale and approximately $260,000 was paid into court.

[16]

In
    2013, the respondent brought a second motion to quantify the damages arising
    after March 1, 2011, and to have those damages paid out of the monies held in
    court.

[17]

In
    the Judgment, damages of $173,413.28 are ordered in favour of the respondent,
    payable from the monies held in court.

[18]

The
    entirety of the reasons of the motion judge reads as follows:

The Parties agree that damages of $55,453.35 are properly owed
    to the [respondent].  A further quantification is submitted by the
    [respondent], attached as Appendix A.  I am prepared to award an amount for
    (total) damages as follows:

$55,453.35

$5,000.00 (credit of $5450.00
[1]
to the [appellants])

$65,000.00

1/6 proceeds $47,959.93

This
    amount is to be paid from funds held in court; these funds are the property of
    the Estate and held in trust to the benefit of Estate and [respondent].  Costs
    in the amount of $2500.00 payable by the Estate forthwith.

THE ISSUES

[19]

The
    appellants submit that the motion judge erred in:

(i)

making orders not supported by the evidence adduced on the motion
    regarding who should pay damages;

(ii)

assessing damages for the period after the respondent began managing the
    rental properties; and

(iii)

providing insufficient reasons.

ANALYSIS

[20]

In
    our view, this appeal must be allowed.

[21]

The
    appellants first submission is that the order requiring the Estate to pay
    damages is not supported by the evidence.  This argument is based on the
    October 2009 Order in which Stephen Milmine personally was ordered to pay
    damages to the respondent.  We understand that this ground of appeal does not
    extend to encompass the $47,959.63 figure in the Judgment, which is said to be
    the amount of the respondents one-sixth interest in the residue of the
    Estate.  It appears that the first sum referred to in the Judgment of
    $55,453.35, is an amount still owing pursuant to the October 2009 Order, which
    required Stephen Milmine personally to pay damages to the respondent.  It is
    unclear on the record and from the reasons whether the two remaining items in
    the Judgment are also damages which Stephen Milmine has been ordered personally
    to pay as damages to the respondent.

[22]

The
    motion judge was correct when she stated that the parties agreed that damages
    of $55,453.35 were properly owed to the respondent.  However, the parties did
    not agree on who was to pay those damages.

[23]

The
    motion judge gave no reasons for why the Estate was to pay these damages.  In
    light of the fact that, at a minimum, one of the amounts ordered payable from
    the Estate was an amount for damages that are payable by Stephen Milmine
    personally, it is unclear why that would be the case.  It bears noting that
    payment of such damages from the Estate would reduce the amounts available to
    pay the other residuary beneficiaries their one-sixth shares.  It is puzzling,
    as well, why the respondents one-sixth share in the residue was calculated on
    the net proceeds of sale, as opposed to one-sixth of the net amount remaining
    after payment of Estate liabilities associated with the properties.  In this
    regard, we note that pursuant to various court orders, the Estate was to bear
    the cost of capital repairs and expenditures.

[24]

It
    may be that there are valid reasons to have ordered the sums in question to
    have been payable from the Estate but, on this record, and in the absence of
    reasons, this court cannot decide whether such an order is correct or not.

[25]

The
    appellants second ground of appeal relates to that part of the Judgment in
    which damages are ordered for lost income from the properties from the time of
    their sale by the bank to December 31, 2017.  As there are no reasons given for
    making this order, it is not clear why the respondent is entitled to such
    damages given that it was his default in making the mortgage payments that led
    to the sale of the properties.  We cannot say whether such an order is correct
    or not, because no reasons were given for it, the record is insufficient to
    determine that matter and none of the necessary findings of fact have been
    made.

[26]

It
    will be apparent from the foregoing that the absence of reasons makes it not possible
    for this court to determine why the orders were made, whether they were
    correctly made and whether justice has been done.  As previously mentioned, due
    to the insufficiency of the record and the absence of the necessary findings of
    fact, the court is unable to decide the issues that were raised on the motion.

DISPOSITION

[27]

Accordingly,
    the appeal is allowed, the Judgment set aside and the motion dismissed.  The
    appellants did not seek costs of the appeal and none are awarded.

Released: June 19, 2014 (E.E.G.)

J.C. MacPherson
    J.A.

Janet Simmons
    J.A.

E.E. Gillese
    J.A.

[1]
This figure is from the Judgment.  The handwritten endorsement of the motion
    judge has a figure of $5,460, rather than $5,450.


COURT OF APPEAL FOR ONTARIO

CITATION: Bui v. Alpert, 2014 ONCA 495

DATE:  20140626

DOCKET: C58131

Hoy A.C.J.O., Cronk and Pepall JJ.A.

BETWEEN

Tich Quang Bui

Applicant (Appellant)

and

Howard J. Alpert

Respondent (Respondent)

Nicholas Cartel and Singa Bui, for the appellant

Michael A. Katzman, for the respondent

Heard:  June 13, 2014

On appeal from the judgment of Justice Victoria R. Chiappetta
    of the Superior Court of Justice, dated December 5, 2013.

ENDORSEMENT

[1]

The appellant, Tich Quang Bui, appeals the December 5, 2013 judgment of
    the application judge, dismissing the appellants application for an assessment
    of the respondent solicitors bills pursuant to ss. 4(1) and 11 of the
Solicitors
    Act
, R.S.O. 1990, c. S. 15.  Before the application judge, the parties
    agreed that the issue before the court was whether special circumstances
    existed within the meaning of those two statutory provisions.

[2]

Briefly, the respondent rendered 12 bills to the appellant over the
    four-year period that he provided legal services to the appellant in relation
    to a tax matter. The appellant paid all 12 bills. The last bill was rendered on
    April 19, 2012. On May 8, 2012, the respondent gave notice of his intention to
    remove himself as the appellants counsel of record, citing the appellants
    failure to pay the April 19, 2012 account and to provide documents to the
    respondent. On May 11, 2012, the appellant appointed new counsel, who
    negotiated a 50% reduction to the April 19 account. On May 24, 2012, the
    appellant paid the April 19 account, as reduced, and the respondent
    subsequently transferred the file to the appellants new counsel. On December
    12, 2012, the appellant brought his application to assess all 12 of the
    respondents bills.

[3]

Section 4(1) of the
Solicitors Act
provides that no bill shall
    be referred for assessment, after twelve months from the time such bill was
    delivered, sent or left as aforesaid, except under special circumstances to be
    proved to the satisfaction of the court or judge to whom the application  is
    made.

[4]

And, as the application judge noted, there is a presumption that payment
    of an account indicates that the client accepted the account as reasonable and
    proper.

[5]

However, that presumption may be rebutted by the client. Section 11 of
    the
Solicitors Act
provides as follows:

The payment of a bill does not preclude the court from
    referring it for assessment if the special circumstances of the case, in the
    opinion of the court, appear to require the assessment.

[6]

The appellant argues that the application judge erred in concluding that
    the special circumstances of the case did not rebut the presumption that the
    appellant had accepted the bills as reasonable and proper. Alternatively, the appellant
    argues that, even if there were no special circumstances, the application judge
    erred in declining to exercise his inherent jurisdiction to order the
    assessment of the respondents bills.

[7]

Determining whether special circumstances exist is a fact-specific
    inquiry. Sections 4(1) and 11 give an application judge a broad discretion to
    be exercised on a case-by-case basis. This court will defer to the decision of
    the application judge regarding the existence of special circumstances, absent an
    error in principle or a clearly unreasonable result:
Echo Energy Canada
    Inc. v. Lenczner Slaght Royce Smith Griffin LLP
, 2010 ONCA 709, 104 O.R.
    (3d) 93, at paras. 29 and 32, leave to appeal to S.C.C. refused, [2010]
    S.C.C.A. No. 484.

[8]

We are not persuaded that the application judge erred in principle or
    that her conclusion that special circumstances were not made out is clearly
    unreasonable.

[9]

The application judge concluded that the evidence did not support the
    appellants allegation that he was billed for duplicative work. Nor was she
    persuaded on the evidence that the appellant was dissatisfied with the quality
    of the respondents work. The application judge concluded that the two communications
    from the respondent  on November 18, 2011 and February 17, 2012  advising
    that if outstanding accounts were not paid the respondent would have to cease
    working on the matter, were insufficient to constitute special circumstances
    warranting the assessment of all 12 accounts. Finally, she concluded that the
    explanation for the delay that she accepted (that the appellant was too busy
    working on his tax matter to focus earlier on seeking an assessment) did not
    amount to special circumstances.

[10]

We
    see no merit to the appellants complaints that the application judge failed to
    consider whether special circumstances were made out from the clients
    perspective and that she concluded that the appellants complaints regarding
    the respondents accounts had to be raised during the course of the
    respondents retainer.

[11]

Her
    reasons, properly read, do not support either of these claims. The application
    judge recognized her obligation to consider whether there were special
    circumstances from the perspective of the client. We see no basis to conclude
    that she did not, in fact, do so. Further, the application judge did not hold
    that a clients complaints about his/her solicitors accounts must be raised
    during the course of the solicitors retainer. She simply observed  after
    finding that there was no evidence of duplication of work  that the clients
    concerns were never expressed until after the solicitor/client relationship had
    been terminated. While not controlling, this was a relevant consideration.

[12]

The
    application judges factual findings were supported by the evidence, and her
    conclusion, based on those findings, that special circumstances were not made
    out, was reasonable. Respectfully, on this appeal the appellant seeks to
    re-argue his application.

[13]

The
    application judge also considered whether the court should in any event exercise
    its inherent jurisdiction to order an assessment of the accounts, separate and
    apart from the provisions of the
Solicitors Act
. She concluded that,
    in the circumstances of this case, the failure of the respondent to advise the
    appellant of his right to request an assessment was not in and of itself
    sufficient to entitle the appellant to an assessment: there was no evidence
    that he was unaware of his right to request an assessment, and no basis to
    infer this. Indeed, given that the appellants new lawyer immediately
    challenged and sought a reduction in the respondents last account, the
    reasonable inference is that the appellant became aware of his right to an
    assessment, at latest, shortly after he retained new counsel. We see no basis
    for appellate intervention with the application judges exercise of her
    discretion.

[14]

This
    appeal is accordingly dismissed. The respondent shall be entitled to costs in
    the amount of $5,000, inclusive of HST and disbursements.

Alexandra
    Hoy A.C.J.O.

E.A.
    Cronk J.A.

Sarah
    Pepall J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Burlington Airpark Inc. v. Burlington (City), 2014
    ONCA 468

DATE: 20140613

DOCKET: C57908

MacPherson, Simmons and Gillese JJ.A.

BETWEEN

Burlington Airpark Inc.

Applicant (Appellant)

and

The Corporation of the City of Burlington

Respondent (Respondent)

AND BETWEEN

The Corporation of the
    City of Burlington

Applicant (Respondent)

and

Burlington Airpark Inc.

Respondent (Appellant)

Peter E.J. Wells and Glenn Grenier, for the appellant

Ian Blue, for the respondent

Heard: June 11, 2014

On appeal from the order of Justice John C. Murray of the
    Superior Court of Justice, dated November 15, 2013.

ENDORSEMENT

[1]

The appellant Burlington Airpark Inc. (Airpark) appeals from the Order
    of Murray J. of the Superior Court of Justice dated November 15, 2013,
    providing:

THIS COURT ORDERS AND DECLARES that the City of Burlington
    Topsail Preservation and Site Alteration By-law (By-law 6-2003) is valid and
    binding upon Burlington Airpark Inc. in respect to its landfill activities at
    the Burlington Executive Airport.

[2]

Airpark operates an aerodrome in the City of Burlington.  The lands
    immediately abutting the aerodrome are described as agricultural and rural
    residential.

[3]

Airpark says that it has been undertaking a number of improvements to
    the aerodrome that involve the use of fill.  In Burlington, the use of fill is
    regulated by By-law 6-2003 (the by-law).  The by-law requires that a permit
    be obtained before fill is placed on land or the grade of any lands are
    altered.

[4]

Airpark refuses to comply with the by-law.  It says that because
    aerodromes fall under federal jurisdiction, and aspects of the construction of
    aerodromes fall within the core of federal jurisdiction over this matter, the
    by-law does not apply to it.

[5]

Airpark and the Corporation of the City of Burlington (the City)
    brought duelling applications to address this issue.  The application judge
    allowed the Citys application and dismissed Airparks application.

[6]

Airpark appeals on the basis that the application judge erred by not
    applying the doctrine of interjurisdictional immunity to remove its aerodrome
    from having to comply with the by-law.

[7]

In determining whether interjurisdictional immunity applies in a
    particular case, it is necessary (1) to identify the pith and substance of the
    impugned legislation (a municipal by-law is, for constitutional purposes, the
    same as a provincial law), and (2) determine whether there is existing jurisprudence
    that supports applying interjurisdictional immunity in the circumstances (i.e.,
    whether the matter the legislation impinges on has already been recognized as
    part of the core of a federal head of jurisdiction).  If such case law does
    not exist, the doctrine of interjurisdictional immunity should not be
    considered further: see
Marine Services International Ltd. v. Ryan Estate
,
    2013 SCC 44, at paras. 48-49.

[8]

If such case law exists, it becomes necessary (3) to determine whether
    the legislation trenches on the protected core of a federal competence, and (4)
    if so, whether the impugned legislations effect on the exercise of the
    protected federal power is sufficiently serious to invoke the doctrine: see
Quebec
    (Attorney General) v. Canadian Owners and Pilots Association
, [2010] 2
    S.C.R. 536, at para. 27; and
Ryan Estate
, at para. 54.

[9]

Finally, we observe that there is an important jurisprudential umbrella
    in this area of constitutional law.  As expressed by Binnie and Lebel JJ. In
Canadian
    Western Bank v. Alberta
, [2007] 2 S.C.R. 3, at para. 37 and 67:

[A] court should favour, where possible, the ordinary operation
    of statutes enacted by both levels of government.  In the absence of
    conflicting enactments of the other level of government, the Court should avoid
    blocking the application of measures which are taken to be enacted in
    furtherance of the public interest.

[N]ot only should the doctrine of interjurisdictional immunity
    be applied with restraint, but with rare exceptions it has been so applied.                                                                                [Emphasis
    in original.]

[10]

The
    application judge faithfully applied this analysis.

[11]

On
    the first step of the analysis  characterizing the by-law  the application
    judge carefully reviewed some of the key provisions of the by-law.  He
    concluded that the by-law is designed to regulate the quality of fill and to
    prevent the use of toxic or contaminated fill in the municipality.  Later, he
    said that the by-law was designed to regulate the use of landfill for the
    protection of the environment and for the safety, health and welfare of
    municipal residents.

[12]

With
    respect to the third step of the analysis  whether the by-law trenches on the
    protected core of the federal aeronautics power  the trial judge reviewed the
    leading case,
Construction Montcalm v. The Minimum Wage Commission
,
    [1979] 1 S.C.R. 754 and reasoned:

The general statements made by Justice Beetz in Construction
    Montcalm do not compel a conclusion that the Burlington by-law is an
    unacceptable intrusion on the core aeronautics power.  First, the by-law is
    designed to regulate the quality of fill and to prevent the use of toxic or
    contaminated fill in the municipality.  It is not targeted legislation as in
Lacombe
.
    There is little doubt that the runway construction must comply with federal
    specifications relating to slopes, surfaces of runways, runway shoulders and
    the slopes and strength of runway shoulders.  However, requiring Airpark to use
    clean fill regulated by the municipality for the benefit of other residents in
    the municipality will not be permanently reflected in the structure of the
    finished product in the sense meant by Justice Beetz.  The by-law is not an
    attempt by the municipality to regulate slopes or surfaces of runways, runway
    shoulders or the slopes and strength of runway shoulders.  While regulating the
    quality of fill may have an impact on the manner of carrying out a decision to
    build airport facilities in accordance with federal specifications, such
    regulation will not have any direct effect upon the operational qualities or suitability
    of the finished product which will be used for purposes of aeronautics.  As a
    result, the by-law does not impact or intrude on the core of the federal power
    which, as noted above, is the authority absolutely necessary to enable
    Parliament to achieve the purpose for which exclusive legislative jurisdiction
    was conferred.

[13]

The
    appellant challenges both components of the application judges reasoning.

[14]

The
    appellant contends that the application judge made a critical error in his
    characterization of the by-law.  According to the appellant, the subject matter
    of the by-law is not as narrow as stated by the application judge, namely, to
    regulate the quality of fill and to prevent the use of toxic or contaminated
    fill in the municipality.  Rather, the by-law, according to the appellant,
    concerns land use, planning and development, and further will lead to the
    regulation by the municipality of runway slopes, surfaces, shoulders, and other
    matters falling exclusively within federal jurisdiction.

[15]

We
    do not accept this argument.  The title of the by-law is to Protect and
    Conserve Topsoil, the main substantive section is titled PLACING/DUMPING FILL
     ALTERING GRADE  REMOVAL OF TOPSOIL, and the by-law is replete with
    provisions using the language of environmental protection (e.g. contaminants
    and testing).  Nothing in the by-law reveals an intention on the part of the
    municipality to regulate matters falling exclusively within federal
    jurisdiction.  In our view, the application judges characterization is
    supported by a careful reading of the by-law.

[16]

The
    real issue is not faulty characterization of the by-law but rather, as the
    appellant itself states in its factum, the issue is whether [the by-law]
    impermissibly trenches on the core of the federal aeronautic power (para.
    45).  On that issue, the appellant submits that the effect of the by-law is to
    improperly intrude into the development of the aerodrome
qua
an
    aeronautical enterprise.

[17]

We
    disagree.  We explicitly endorse the application judges reasoning in the
    passage set out in paragraph 12 above.

[18]

Finally,
    the appellant seeks to introduce fresh evidence designed to show that, after
    the application judge released his decision, certain contractors were not
    willing to deliver fill to the site for fear of negative reaction from the
    City.

[19]

We
    do not see the relevance of this evidence.  The courts order is carefully
    drafted to provide that the by-law is applicable in respect of [Airparks]
    landfill activities at the Burlington Executive Airport.  Moreover, we cannot
    see any link between a suppliers decision whether to supply fill and the
    determination of the constitutional question of whether a by-law applies to a
    particular entity and its activities.  This is apples and oranges.

[20]

The
    motion to admit fresh evidence is denied.  The appeal is dismissed.

[21]

The
    respondent is entitled to its costs of the appeal fixed at $22,000 inclusive of
    disbursements and HST.

J.C. MacPherson
    J.A.

Janet Simmons
    J.A.

E.E. Gillese
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Feinstein v. Freedman, 2014 ONCA 446

DATE: 20140605

DOCKET:  C56955 and C56958

Laskin, van Rensburg and Hourigan JJ.A.

BETWEEN

Abraham Feinstein

Applicant

(Respondent)

and

Jacob
    Freedman, Jonathan Freedman, Rose-Anne Freedman-

Prizant,
    Josh Freedman, Michael Freedman, Shira Leah Ben-

Choreen
    Schneck, Rachel Freedman, Joshua Freedman, Eli

Freedman,
    Tal-Or Ben-Choreen, Elishua Ben-Choreen, Joshua

Prizant,
    Sarah Idit Prizant, Samuel Prizant, Joshua Freedman,

Adam
    Freedman, Liat Ben-Choreen and Riva Freedman Rotenberg

Respondents

(Respondents)

Application under ss. 3, 5, 16 and 37 of the
Trustee Act
,
    R.S.O., 1990,

c. T-23 and Rules 10.01, 14.05(3)(a), (b), (c), (d) and (h) of the
Rules
    of Civil

Procedure, R.R.O. 1990, Reg. 194;

AND BETWEEN

The
    Childrens Lawyer, as litigation guardian for Joshua Freedman,

Adam
    Freedman, Samuel Prizant, Asher Freedman, Netta Grace Schneck,

Nili
    Sarit Schneck and Ora Tmemah Aviner

Applicant

(Appellant)

and

Jacob
    Freedman, Rose-Anne Freedman-Prizant, Josh Freedman,

Jonathan
    Freedman, Michael Freedman, Shira Leah Ben-Choreen Schneck,

Rachel
    Freedman Aviner, Joshua Freedman, Eli Freedman, Joshua Prizant, Sarah Idit
    Prizant, Liat Ben-Choreen, Tal-Or Ben-Choreen,

Elishua
    Ben-Choreen, Riva Freedman Rotenberg and Abraham Feinstein

Respondents

(Respondents)

Application under s. 5 of the
Trustee Act
, R.S.O., 1990, c. T-23
    and Rules 14.05, 16 and 17.02(c) of the
Rules of Civil Procedure, R.R.O.
    1990, Reg. 194.

Joseph Y. Obaji, for the appellants Liat Ben-Choreen,
    Tal-Or Ben-Choreen and Elishua Ben-Choreen

Claire E. Burns and Bianca V. La Neve, for the appellant
    the Office of the Childrens Lawyer as litigation guardian for Joshua Freedman,
    Adam Freedman, Samuel Prizant, Asher Freedman, Netta Grace Schneck, Nili Sarit
    Schneck and Ora Tmemah Aviner

Catherine Francis and Mark Freake, for the respondents
    Jacob Freedman, Rose-Anne Freedman-Prizant and Josh Freedman

Gregory M. Sidlofsky, for the respondents Michael
    Freedman, Shira Schneck, Rachel Freedman, Joshua Freedman, Eli Freedman, Joshua
    Prizant and Sarah Prizant

Peter G. Hagen, for the respondent Abraham Feinstein

Kenneth Radnoff, Q.C., for the respondent Riva Freedman
    Rotenberg

Jaye Hooper, for the respondent Jonathan Freedman

Heard:  January 14, 2014

Released:  March 12, 2014

On appeal from the orders of Justice Julianne A. Parfett
    of the Superior Court of Justice, dated March 18, 2013 and June 2, 2013, with
    reasons reported at 2013 ONSC 1616 and 2013 ONSC 4420, respectively.

COSTS ENDORSEMENT

A.      Introduction

[1]

This appeal arises in the context of litigation regarding the proper
    administration of the Riva Freedman Trust (RFT), an
inter vivos
spousal income trust established by Jarvis Freedman. The trustee of the RFT,
    Abraham Feinstein, brought an application for directions regarding the
    appointment of his successor upon his resignation.  The Office of the
    Childrens Lawyer (the OCL), supported by Jonathan Freedman and his adult
    children (being Tal-or Ben-Choreen, Elishua Ben-Choreen, and Liat Ben-Choreen
    collectively, the Ben-Choreen Appellants), brought a cross-application for
    the appointment of a sole independent trustee for the RFT.

[2]

Justice Parfett dismissed the OCLs cross-application and ruled that,
    upon Mr. Feinsteins resignation, the four children of Jarvis Freedman could
    appoint replacement trustees, including themselves. With respect to costs, the
    application judge found that Mr. Feinsteins application and the cross-application
    were necessary for the proper administration of the RFT and the Jarvis Freedman
    Insurance Trust (collectively the Estate). Consequently, she ruled that the
    costs of all parties should be paid out of the Estate.

[3]

The OCL and the Ben-Choreen Appellants appealed the order of the
    application judge. The successful parties on the application and the OCL sought
    leave to appeal the costs award made by the application judge.

[4]

In reasons dated March 12, 2014, the two appeals and the motions for
    leave to appeal the costs awards were dismissed. The parties were unable to
    agree on the issue of the costs of the appeals and the motions for leave to
    appeal, and have filed extensive written submissions.

B
.
POSITIONS OF THE PARTIES

[5]

Jacob Freedman, Rose-Anne Freedman-Prizant, and Josh Freedman (the
    Three Siblings) seek costs on a full or substantial indemnity basis against
    the appellants and Jonathan Freedman. These respondents submit that costs on a
    higher scale are warranted given the serious and unfounded allegations of
    wrongdoing made against them by the appellants and Jonathan Freedman. They have
    filed a bill of costs claiming total costs of $129,813 on a full indemnity
    basis and $77,129 on a partial indemnity basis.

[6]

Michael Freedman, Shira Schneck, Rachel Freedman, Joshua Freedman, Eli
    Freedman, Joshua Prizant and Sarah Prizant (the Freedman/Prizant
    Grandchildren) seek costs on a partial indemnity basis, fixed at $25,000,
    inclusive of disbursements and HST, and payable jointly and severally by the
    appellants. The amount requested has been reduced by $4,715 to reflect the lack
    of success of these parties on their cross-appeal.

[7]

Riva Freedman Rotenberg seeks costs on a substantial indemnity basis,
    payable jointly and severally by the appellants and Jonathan Freedman. She has
    filed a bill of costs claiming total costs of $49,112 on a substantial
    indemnity basis and $34,576 on a partial indemnity basis.

[8]

Mr. Feinstein seeks costs on a substantial indemnity basis payable jointly
    and severally by the appellants. He has filed a bill of costs claiming total
    costs of $31,148 on a full indemnity basis, $28,248 on a substantial indemnity
    basis, and $19,547 on a partial indemnity basis.

[9]

Jonathan Freedman submits that the court should order that the costs of
    Mr. Feinstein be paid by the Estate on a partial indemnity basis and that all
    other parties should bear their own costs. In the alternative, he submits that
    if the court awards costs among the parties, he should be awarded his costs of
    the motions for leave to appeal on a partial indemnity basis, payable by the
    Three Siblings jointly and severally. He has filed a bill of costs claiming
    total costs of $20,522 on a full indemnity basis and $12,957 on a partial
    indemnity basis.

[10]

The
    OCL submits that there was divided success on the appeals, that it was
    reasonable for it to appeal, and that the Three Siblings and the
    Freedman/Prizant Grandchildren made unfounded allegations against the OCL and
    its counsel and, consequently, they should not be awarded any costs. The OCL
    also submits that Mr. Feinstein and Ms. Freedman Rotenberg did not need to
    retain counsel because the Three Siblings defended their interests.

[11]

The
    Ben-Choreen Appellants submit that there was divided success and that all
    parties should bear their own costs, with the exception of Mr. Feinstein, whose
    costs should be paid by the Estate.

C.      Analysis

i.

Entitlement to Costs

[12]

The
    first issue is the entitlement to costs.  The first consideration as part of
    this analysis is whether the loser-pays regime should apply or whether costs
    should be paid out of the Estate.

[13]

The
    loser-pays regime generally applies to estate litigation, such that successful
    parties are entitled to have their reasonable costs paid by the unsuccessful
    parties and that costs are usually only payable from an estate where the
    litigation arose out of the actions of the testator or was reasonably necessary
    to ensure the proper administration of the estate:
McDougald Estate v.
    Gooderham
, [2005] O.J. No. 2432 (C.A.), at paras. 78, 80, 85, 91; and
Vance
    Estate v. Vance Estate
, 2010 ONSC 4944, at para. 4. We found no error in
    the application judges finding that the litigation enured to the benefit of
    the Estate and in her consequential ruling that costs should be paid from the
    Estate.

[14]

The
    circumstances extant at the time of the application and cross-application were
    much different from the circumstances at the time of the commencement of the
    appeals. At the time of the application and cross-application, there was genuine
    uncertainty about how a new trustee(s) would be appointed. At the time of the
    appeals, the uncertainty was gone. The application judge determined the issue
    and, in so doing, made findings regarding the interpretation of the relevant
    documentation and the conduct of the parties.

[15]

The
    application judge gave clear direction as to how the appointment process should
    work. The appellants were entitled to challenge the application judges
    findings and conclusions, but they did so at their own risk. This was no longer
    an exceptional circumstance where the proceeding was reasonably necessary to
    ensure the proper administration of the estate. The normal loser-pays regime
    applies to the appeals and the motions for leave to appeal.

[16]

We
    reject the argument advanced by the OCL that the Three Siblings and the
    Freedman/Prizant Grandchildren have no entitlement to costs by reason of the
    allegations made against the OCL and its counsel. We have carefully reviewed
    the submissions of the parties on the appeal. This was high stakes litigation.
    Allegations and counter-allegations were levelled. There is obvious distrust
    among the parties. In this context, the Three Siblings and the Freedman/Prizant
    Grandchildren in their submissions used unfortunate and somewhat intemperate language.
    However, those submissions do not cross the line to the point that they
    disentitle the Three Siblings and the Freedman/Prizant Grandchildren from being
    awarded their costs as successful litigants.

[17]

We
    also reject the submission of the OCL that Mr. Feinstein and Ms. Freedman
    Rotenberg did not need to retain counsel because the Three Siblings defended
    their interests. These parties had interests that were distinct from those of
    the Three Siblings. They were entitled to have counsel. Mr. Feinstein, in particular,
    is a well-respected member of the Ottawa legal community. At the very least his
    competence as trustee was challenged in the appeals. He had a right to defend
    himself. It should come as no surprise to the OCL that all of the parties
    affected by the appeals would incur significant legal fees.

[18]

The
    next consideration is whether there was divided success such that no party
    should be entitled to its costs. While we recognize that there was some measure
    of divided success, given that both the appeals and motions for leave to appeal
    were dismissed, the vast majority of the time and effort on the hearing and the
    written submissions was dedicated to the appeals brought by the OCL and the
    Freedman/Prizant Grandchildren. Thus, while we are prepared to reduce the
    amount of costs awarded to the successful parties on the appeals, we are not
    prepared to order that the parties should bear their own costs.

[19]

Jonathan
    Freedman is in a unique position. He did not appeal the decision of the
    application judge. He was a respondent on the appeal but supported the position
    taken by the appellants. His position was akin to that of an intervener. In
    these circumstances, we find that the appropriate order is for there to be no
    costs payable by or to Jonathan Freedman.

[20]

In
    summary, we find that the normal loser-pays regime should apply and that the
    successful parties, being the Three Siblings, the Freedman/Prizant
    Grandchildren, Mr. Feinstein and Ms. Freedman Rotenberg, are entitled to their
    costs.

ii.

Scale of Costs Payable

[21]

The
    next issue is the scale of costs payable. The presumptive rule is that costs
    are payable on a partial indemnity basis. That rule is, of course, subject to
    exceptions that may result in an award of costs on a higher scale.

[22]

We
    reject the argument made by the Three Siblings that costs on a higher scale are
    warranted because of the allegations of wrongdoing made against them by the
    appellants and Jonathan Freedman. Again, we do not find that the nature of the
    allegations crosses the line such that a costs award on a higher scale is
    warranted.

[23]

There
    is no basis for an award of costs on a substantial indemnity scale to Ms.
    Freedman Rotenberg.

[24]

Mr.
    Feinstein is in a different position. His involvement in this case results from
    the execution of his duties as trustee. No doubt he will have a claim against
    the RFT for any costs not recovered as a result of this costs award. However,
    it would be inequitable for all of the beneficiaries of the RFT to be forced to
    pay for a sizable portion of his costs. We conclude, therefore, that costs on a
    full indemnity basis are warranted for Mr. Feinstein.

[25]

The final issue is the quantum of costs to be awarded.
The overriding principle in assessing costs is that
    the award must be fair and reasonable:
Boucher v. Public Accountants Council
    for the Province of Ontario
(2004), 71 O.R. (3d) 291 (C.A.), at para. 24.

[26]

In
    exercising our discretion regarding costs, the general principles enumerated in
    rule 57.01 are instructive. The most relevant factors here are that the issues
    raised on the appeal were of tremendous importance to the parties and that the
    factual and legal issues were complex. None of the parties could have
    reasonably expected that, if unsuccessful on the appeals, they would not be
    required to pay significant costs. We note that the full indemnity costs of the
    OCL were $97,581.

[27]

We
    find that a reduction of the costs awarded to the successful parties should be
    made to reflect the fact that they were not successful in obtaining leave to
    appeal the costs award made by the application judge.

[28]

The
    Three Siblings were primarily responsible for responding to the appeals. It is
    not surprising, therefore, that their costs are the highest claimed. In our
    view, the costs sought are somewhat excessive in all of the circumstances. We fix
    their costs at $70,000.

[29]

The
    costs claimed by the Freedman/Prizant Grandchildren of $25,000 are entirely
    reasonable and shall be so ordered.

[30]

We
    also find the full indemnity costs claimed by Mr. Feinstein in the amount of
    $31,148 are reasonable and an order will go for their payment.

[31]

The
    costs claimed by Ms. Freedman Rotenberg are excessive. She played a relatively
    minor role on the appeals and should not be awarded more costs than the
    Freedman/Prizant Grandchildren. We fix her costs at $20,000.

[32]

All
    amounts awarded are inclusive of fees, disbursements and HST, and shall be
    payable jointly and severally by the OCL and the Ben-Choreen Appellants.

D.      DISPOSITION

[33]

We
    award costs, inclusive of fees, disbursements and HST, payable jointly and
    severally by the OCL and the Ben-Choreen Appellants, to:

(a)

the Three Siblings - $70,000;

(b) the Freedman/Prizant Grandchildren - $25,000;

(c) Riva Freedman Rotenberg - $20,000; and

(d) Abraham Feinstein - $31,148.

John Laskin J.A.

K. van Rensburg J.A.

C.W. Hourigan J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Frank v. Canada (Attorney General), 2014 ONCA 485

DATE: 20140623

DOCKET: M43860 (C58876)

Sharpe J.A. (In Chambers)

BETWEEN

Gillian Frank and Jamie Duong

Responding
    Party/Applicants

(Respondents in Appeal)

and

The Attorney General of Canada

Moving
    Party/Respondent

(Appellant in Appeal)

Peter Southey, Gail Sinclair, Peter Hajecek for the
    applicant, The Attorney General of Canada

Shaun OBrien and Amanda Darrach for the respondents,
    Gillian Frank and Jamie Duong

Heard: June 20, 2014

Motion for a stay of the judgment of Mr. Justice Michael A.
    Penny of the Superior Court of Justice dated May 2 and 15, 2014.

[1]

The Attorney General of Canada moves for a stay pending appeal of a
    judgment holding that provisions of the
Canada Elections Act,
S.C.
    2000, c. 9 (the
Act
), relating to the voting rights of non-resident
    Canadians are too restrictive and extending the vote to all Canadian citizens
    resident outside Canada.

The
Charter
challenge to limits on voting by
    non-residents

[2]

Voting by non-resident citizens has been a feature of Canadian
    elections, in one form or another, since the vote was extended to soldiers in
    World War I. The current regime dates from 1993. The
Act
, s. 11
    provides that the following classes of citizens are eligible to vote by mail
    pursuant to a special procedure found in Part 11 of the Act:

(
a
) a Canadian Forces
    elector;

(
b
) an elector who is an
    employee in the federal public administration or the public service of a
    province and who is posted outside Canada;

(
c
) a Canadian citizen who
    is employed by an international organization of which Canada is a member and to
    which Canada contributes and who is posted outside Canada;

(
d
) a person who has been
    absent from Canada for less than five consecutive years and who intends to
    return to Canada as a resident;

(
e
) an incarcerated elector
    within the meaning of that Part; and

(
f
) any other elector in
    Canada who wishes to vote in accordance with that Part.

[3]

The Part 11 procedure allows the non-resident citizen to register and
    vote by mail in a riding chosen by the voter based on contacts specified in the
    Act.

[4]

The applicants, both resident in the United States for more than five
    years, challenged the denial of the vote to non-resident citizens absent from
    Canada for more than five consecutive years.

The judgment under appeal

[5]

In a lengthy and carefully considered judgment, the application judge
    held that to the extent the
Act
disenfranchised citizens absent from
    Canada for more than five years, it violated their democratic right to vote
    right guaranteed by section 3 of the
Charter:

Every citizen of Canada has the right to vote in an
    election of members of the House of Commons or of a legislative assembly and to
    be qualified for membership therein

[6]

The application judge struck down s. 11(d) of the
Act
and
    related provisions and replaced the words of s. 11(d) with an elector who
    resides outside of Canada.

[7]

The Attorney General argued that Parliament had a pressing and
    substantial objective to limit non-resident voting pursuant to s. 1 of the
    Charter, namely:

1.

to extend the right to vote to non-resident citizens but not to the
    point of giving rise to unfairness for Canadas resident voters, and

2.

to maintain the proper functioning and integrity of Canadas electoral
    system and system of parliamentary representation.

[8]

The application judge characterized those objectives as being so
    abstract, broad and symbolic that they barely qualified, if at all, as pressing
    and substantial for purposes of s. 1 analysis. However, the application judge
    proceeded to consider whether the limitation on non-resident citizen voting
    satisfied the proportionality test. He concluded that it did not. First, he
    found there was no rational connection between the objectives of fairness and
    avoiding possible election abuses and denying the vote to certain
    non-residents.  Second, he found the five-year limitation overly drastic and that
    less restrictive means were available to achieve the same objectives. Finally,
    the application judge found that the substantial deleterious effect of losing
    the right to vote outweighed what he found to be the tenuous salutary impact of
    the law.

[9]

The application judge refused to stay or temporarily suspend the
    declaration of invalidity. He stated, at para. 159:  An immediate declaration
    of invalidity would create no danger to the public or to the rule of law. Nor
    is this a situation where Parliament will be unable to hold an election due to
    the courts decision. He added that there was no evidence that an election was
    anticipated in the next 12 months.

Events following the judgment

[10]

The
    judgment was handed down on May 2, 2014. On May 11, 2014, four federal
    by-elections were called for June 30, 2014  two in Ontario and two in Alberta.
    Elections Canada immediately announced that the judgment would be complied with
    for all four by-elections and implemented the steps necessary to enable all
    Canadian citizens resident abroad to register and vote. As of June 16, 2014,
    thirteen non-resident citizens registered to vote (although it is not known how
    many of those would have been eligible under the prior regime). One of those
    individuals is the wife of one of the applicants who has already cast her
    ballot.

The Attorney Generals stay motion

[11]

I
    note that Elections Canada was not served with this motion. In my view, it
    should have been served as it would be immediately and directly impacted by the
    effect of a stay. I allowed the motion to proceed as it is apparent from
    correspondence in the record that Elections Canada is fully aware of this
    motion and its legal counsel has outlined the steps Elections Canada could take
    in the event a stay is granted.

[12]

It
    is common ground that to obtain a stay the Attorney General must satisfy the
    familiar three-part test and show:

1.

that there is a
    serious question to be determined;

2.

that irreparable
    harm to the public interest will be suffered should the stay not be granted;
    and

3.

that the balance
    of convenience and public-interest considerations favor a stay.

Serious question to be tried

[13]

This
    appeal will almost certainly be decided on the basis of the s. 1 analysis. I
    share the application judges concern that the objectives identified by the
    Attorney General as being sufficient to justify limiting the right to vote are
    broad, symbolic and rhetorical. In oral argument, counsel insisted that
    Parliaments central concern was election fairness. It is not clear to me how
    denying a citizen the right to vote can be justified on the basis of electoral
    fairness. The objectives identified by the Attorney General obscure what
    appears to me to be the real issue, namely, whether the five year limit on
    non-resident voting can be justified on the basis that it is necessary to
    sustain our geographically determined, constituency-based system of
    representation. As the Supreme Court of Canada observed in
Sauvé v. Canada
    (Chief Electoral Officer),
[2002] 3 S.C.R. 519, the prisoner voting case,
    [v]ague and symbolic objectives render proportionality analysis hollow.
    However, I do not say that the Attorney General has failed to show that the
    appeal is arguable. While the application judge gave full and fair
    consideration of the s. 1 issue, there does appear to be an argument to be made
    on the other side.

Does the Attorney General have a presumptive or automatic
    right to a stay?

[14]

The
    Attorney General submits that as guardian of the public interest it has
    something approaching an automatic right to a stay due to a presumption of
    irreparable harm and that the balance of convenience favours maintaining the
    status quo. I am unable to accept that proposition. It is inconsistent with
    what occurred in the prisoner voting litigation where a stay was refused
    pending appeal:
Sauvé v. Canada (Chief Electoral Officer),
[1997] 3
    F.C. 628, affd. [1997] 3 F.C. 643 (C.A.), leave to appeal dismissed [1997]
    S.C.C.A. No. 264. It is also inconsistent with the general principle that the
    decision to grant or withhold a stay lies in the discretion of the court.

[15]

The
    Attorney General relies on the following passage from
Bedford v. Canada
    (Attorney General),
2010 ONCA 814, 330 D.L.R. (4th) 162, at para 13:

I must determine whether a stay should be granted in a context
    where (1) there is a
prima facie
right of the government to a full
    review of the first-level decision; (2) the government has a presumption of
    irreparable harm if the judgment is not stayed pending that review; and (3) the
    responding parties must demonstrate that suspension of the legislation would
    provide a public benefit to tip the public interest component of the balance of
    convenience in their favour.

[16]

In
    my view, that passage must be read in its proper context and when so read, it
    is apparent that a court will only grant a stay at the suit of the Attorney
    General where it is satisfied, after careful review of the facts and
    circumstances of the case, that the public interest and the interests of
    justice warrant a stay. In that case, the government filed a substantial volume
    of evidence to demonstrate the very real and tangible harm that would result if
    the matter of prostitution were left completely unregulated. It is clear from
    reading the reasons as a whole that Rosenberg J.A. only granted a stay in
    because, after reviewing and weighing that body of evidence, he was (at para.
    72) satisfied that the moving party ha[d] satisfied irreparable harm test.

[17]

It
    is the case that very often, the public interest in the orderly administration
    of the law will tilt the balance of convenience in favour of maintaining
    impugned legislation pending the final determination of its validity on appeal:
    See, for example
RJR-MacDonald Inc. v. Canada (A.G.),
[1994] 1 S.C.R.
    311 at p. 346

In the case of a public authority, the onus of demonstrating
    irreparable harm to the public interest is less than that of a private
    applicant.  This is partly a function of the nature of the public
    authority and partly a function of the action sought to be enjoined.  The
    test will nearly always be satisfied simply upon proof that the authority is
    charged with the duty of promoting or protecting the public interest and upon
    some indication that the impugned legislation, regulation, or activity was
    undertaken pursuant to that responsibility.  Once these minimal
    requirements have been met, the court should in most cases assume that
    irreparable harm to the public interest would result from the restraint of that
    action.

[18]

However,
    I cannot agree with the Attorney General that there is a
presumption
approaching
    an automatic right to a stay in every case where a court of first instance has
    ruled legislation to be unconstitutional. As Lamer J. also held in
RJR-MacDonald
,
    at p. 343, that the government does not have a monopoly on the public
    interest. See also
Bedford
, at para. 73: The Attorney General does
    not have a monopoly on the public interest, and it is open to both parties to
    rely upon the considerations of public interest, including the concerns of
    identifiable groups.

[19]

In
    my view, it is necessary to carefully review the particular facts and
    circumstances of this case in order to determine whether or not a stay is
    warranted.

Irreparable harm

[20]

Turning
    to the specifics of this case, the Attorney General argues that irreparable
    harm would ensue if a close election were decided by the single vote of a non-resident
    voter ultimately found on appeal not to have the right to vote. I agree that
    such a scenario would amount to irreparable harm.

[21]

However,
    elections decided by a very few votes are rare and in my view, the prospect of
    irreparable harm on that account is fairly remote.

[22]

More
    important, the class of non-resident voters affected by the judgment face
    precisely the same risk of irreparable harm. Once the election has passed, the
    constitutional right to vote in that election will be lost forever. If the
    election is decided by one or a very few votes and if the judgment is affirmed
    on appeal, the stay requested by the Attorney General will have improperly
    disenfranchised voters whose vote could have changed the result of the
    election. That would constitute irreparable harm to the non-resident voters and
    to the public.

[23]

I
    conclude that any risk if irreparable harm claimed by the Attorney General is
    matched by the same risk of irreparable harm to non-resident voters.

[24]

Nor
    do I see merit in the argument that Members of Parliament elected in an
    election governed by the judgment would somehow be different in any material
    way from those previously elected. All Members of Parliament are elected
    according to the law as it stands at the time of the election. There is no air
    of reality to the claim that Members of Parliament elected at by-election under
    a changed or amended law would be seen as different from their parliamentary
    colleagues elected under the earlier law.

[25]

In
    my view, the consideration of irreparable harm is neutral and does not favour
    granting a stay.

Balance of convenience

[26]

In
    my view, the balance of convenience in this case favours refusal of a stay. I
    reach that conclusion for the following reasons.

[27]

First,
    this is not the typical case where a complex statutory scheme or administrative
    apparatus has to be dismantled or constructed in order to give effect to the
    trial judgment. In such cases, the balance of convenience will typically favour
    a stay to avoid the cost and disruption that would flow from implementing a new
    regime based upon a trial judgment that may need to be undone in the event of a
    successful appeal.

[28]

In
    the present case, Elections Canada immediately took the minimal administrative
    steps required to permit non-resident citizens to vote in accordance with the
    decision of the application judge. If a stay is granted, Elections Canada will
    have to undo what it has already done. It is clear from the record that it may
    not be possible for Elections Canada to determine in time for the by-elections
    which non-resident voters who registered after the judgment would have been
    eligible before the judgment. The terms of the stay requested by the Attorney
    General recognize that difficulty and ask for a qualified stay that applies
    unless Elections Canada is unable to determine if those who registered meet
    the pre-judgment requirements. In addition, at least one non-resident has cast
    her ballot. To grant a stay in this case would require Elections Canada to
    rescind the registrations of  up to 13 non-resident electors and claw back the
    vote of a citizen who may well in the end have the right to cast her ballot.
    Granting a stay in this case would not avoid the cost and inconvenience of
    prematurely erecting or dismantling a scheme  it would do the opposite.

[29]

Second,
    this is not a case like
Bedford
where the trial judgment creates a
    legislative void in an area of activity that needs to be regulated in the
    public interest. Allowing the judgment to operate does not create a void or gap
    in Canadas election law. Nor does the judgment radically alter the class of
    those eligible to vote. The
Act
already grants many non-resident
    citizens the right to vote. The judgment under appeal merely extends the right
    to a broader class of non-resident citizens.

[30]

As
    counsel for the applicants pointed out, it is highly unlikely that the judgment
    will produce a floodgate of votes from disinterested and disengaged
    non-resident Canadians. We know that the number of newly qualified non-resident
    voters who had registered as of June 16 is 13 or fewer. The non-resident must
    be both determined and informed. He or she must first register and then obtain
    a ballot. The non-resident voter cannot vote by simply marking an X beside one
    of the listed candidates but must complete a special ballot that requires the
    voter to know and write in the name of an actual candidate.

[31]

I
    conclude that the balance of convenience does not favour granting a stay in
    this case.

Conclusion

[32]

For
    these reasons, I conclude that while there is an arguable appeal, both sides
    demonstrate a similar risk of irreparable harm and the balance of convenience
    weighs in favour of refusing a stay. Accordingly, I dismiss the Attorney
    Generals motion.

[33]

If
    the parties are not able agree as to the costs of this motion, I will receive
    brief written submissions from the respondents within ten days of the release
    of these reasons and from the Attorney General within five days thereafter.

Released: