COURT OF APPEAL FOR ONTARIO

CITATION: Silva v. John Doe, 2016 ONCA 700

DATE: 20160923

DOCKET: C61754

Cronk, Rouleau and Huscroft JJ.A.

BETWEEN

Jarley Silva

Appellant (Plaintiff)

and

John Doe and the Superintendent of Financial
    Services

Respondents (Defendants)

Rebecca Nelson, for the appellant

John Friendly, for the respondent, the Superintendent of
    Financial Services

Heard: September 20, 2016

On appeal from the orders of Justice James F. Diamond of
    the Superior Court of Justice, dated January 20, 2016 and February 8, 2016,
    with reasons reported at 2016 ONSC 307.

By the Court:

Background in Brief

[1]

In April 2011, the appellant was struck by an unidentified motorist
    while he was crossing a Toronto street.  He sustained multiple personal
    injuries as a result of the accident.

[2]

The appellant is a Brazilian citizen.  At the time of the accident, he
    had been living in Ontario, illegally, for approximately nine years.

[3]

The appellant first came to Canada in 1992 using false documents.  He
    worked in Ontario as a cleaner until 1995, when he was apprehended by
    immigration authorities and deported to Brazil.  Under the terms of his
    deportation order, which he did not appeal, he could not return to Canada
    legally unless he obtained authorization to do so under the
Immigration and
    Refugee Protection Act
, S.C. 2001, c. 27.  He did not seek such
    authorization at any time prior to the 2011 accident.

[4]

In 1997 or 1998, the appellant left Brazil and entered the United States
    on a six-month visitors visa.  He remained there for about five years, even
    after his visa expired.  In 2002, the appellant again entered Canada
    illegally.  He claims that, on his re-entry to Canada, he had no intention of
    returning to Brazil and instead intended to remain in Ontario indefinitely.

[5]

The appellant lived continuously in Ontario from 2002 until the date of
    the accident.  From 2002 until April 2011, he did not return to Brazil or
    otherwise leave Canada.  He obtained an Ontario drivers licence, which he
    renewed when required although he never owned a car, and supported himself by working
    at various jobs in the construction industry.  He also registered a drywall sole
    proprietorship in Ontario, applied for a tax number as a non-resident, joined a
    union, and carried out his normal daily activities while living in Toronto.  It
    appears that his only connection to Brazil throughout this period was the fact
    of his Brazilian citizenship and the residence of some family members in that
    country.

[6]

The appellant did not report his earned income to the Canada Revenue
    Agency.  Thus, he paid no taxes in Canada.  He did not possess a Canadian
    social insurance number or an Ontario health card.

[7]

After the accident, the appellant applied for refugee status in Canada.
    A new deportation order was issued on October 12, 2011.  His refugee
    application was denied in April 2013.  The deportation order took effect in
    June 2013 and the appellant returned to Brazil where he currently lives.

The Litigation

[8]

At the time of the accident, the appellant did not have motor vehicle or
    other insurance to respond to a claim for damages in respect of his injuries
    sustained in the accident.  He therefore sued the unidentified driver (John
    Doe) and the Superintendent of Financial Services (the Superintendent) under
    the
Motor Vehicle Accident Claims Act
, R.S.O. 1990, c. M.41 (the
    Act) for compensation from the Motor Vehicle Accident Claims Fund (the
    Fund).

[9]

The Superintendent defended the action on the basis that the appellants
    claim was statute barred by reason of s. 25(1) of the Act.  That section
    prohibits payments from the Fund to non-Ontario residents save in specified
    circumstances.  Section 25(1) reads:

The Minister shall not pay out of the Fund any amount in favour
    of a person
who ordinarily resides in a jurisdiction outside Ontario
unless that jurisdiction provides persons who ordinarily reside in Ontario with
    recourse of a substantially similar character to that provided by this Act.
    [Emphasis added.]

[10]

Both
    parties moved for summary judgment to determine the appellants entitlement to
    access the Fund.  The motion judge found that the appellant: i) entered Canada
    in 1992 using a fraudulent passport and his brothers visa; ii) worked
    illegally in Canada until deported in 1995; iii) chose to enter Canada
    unlawfully a second time, in 2002, where he remained and obtained employment
    illegally; and iv) knew he could not return to Canada without express authorization
    under the relevant immigration legislation and, therefore, knew or ought to
    have known that his second sojourn in Ontario was temporary.  In these
    circumstances, the motion judge held that the appellants physical presence in
    Ontario was the result of deception and illegality.

[11]

Weighing
    all these factors, including the appellants lengthy continuous presence in
    Ontario, the steps taken or not taken by him to regularize that presence and
    his illegal status in Ontario, the motion judge concluded that the appellant
    was not ordinarily resident in Ontario at the time of the accident within the
    meaning of s. 25(1) of the Act and that his claim against the Fund was
    therefore precluded.  Accordingly, the motion judge dismissed the appellants
    motion for summary judgment and, hence, his claim against the Fund, and granted
    the Superintendents companion motion for summary judgment.

[12]

The
    appellant appeals.  He does not challenge the motion judges findings of fact
    or his conclusion that there is no genuine issue requiring a trial in this
    case.  Rather, he challenges the motion judges holding that payment of his
    claim is barred by s. 25(1) of the Act.

Issues

[13]

During
    oral argument, the focus of the appellants appeal narrowed.  As argued, he
    submits that the motion judge erred: i) by applying the wrong test for
    determining ordinary residency under s. 25(1) of the Act; and ii) by relieving
    the Superintendent of his onus of proof and evidentiary burden under s. 25(1).

[14]

For
    the reasons that follow, we reject these arguments.

Discussion

[15]

There
    is no dispute that the appellant was living in Ontario without proper legal
    status on the date of the accident.  Indeed, he had been doing so for at least
    eight years despite knowing that his entry into Canada was prohibited without
    appropriate authorization.  The narrow, and controlling, issue on this appeal
    is whether, in light of all the circumstances, the appellant was ordinarily
    resident in a jurisdiction outside Ontario when he sustained his injuries,
    within the meaning of s. 25(1) of the Act.

[16]

During
    oral argument, the appellants counsel confirmed that the appellant does not
    challenge the motion judges finding that he was not ordinarily resident in
    Ontario on the date of the accident.  However, the appellant argues that the
    motion judge applied the wrong test under s. 25(1) of the Act because he
    focused on whether the appellant was ordinarily resident in Ontario, rather
    than on whether he was ordinarily resident in another jurisdiction on the date
    of the accident.  In so doing, the appellant says, the motion judge ignored the
    clear language of s. 25(1) and changed the test for ordinary residency
    envisaged by that section.

[17]

We
    disagree.  We see no error in the motion judges interpretive approach to s.
    25(1) of the Act.

[18]

The
    motion judge recognized, correctly, that for the purpose of s. 25 of the Act,
    residency must be determined as of the date of the relevant motor vehicle
    accident.  Further, to defend against the appellants claim based on s. 25(1),
    the Superintendent bore the onus of establishing that s. 25(1) precluded the
    appellants access to the Fund.

[19]

In
    this context, and contrary to the appellants submission, the motion judge held
    that the Superintendent was not required to establish that the appellant was
    ordinarily resident in Brazil or some other specific foreign jurisdiction.
    Rather, in the motion judges view, the Superintendent [bore] the onus of
    proving that the [appellant] was not ordinarily resident in Ontario (at para.
    35).

[20]

We
    agree.  On a plain reading, s. 25(1) distinguishes between Ontario and
    non-Ontario residents.  It contains no language requiring proof of the precise
    jurisdiction outside Ontario in which a Fund claimant was ordinarily resident
    at the time of the accident in question.

[21]

The
    key to the engagement of s. 25(1) is whether the claimant ordinarily resided in
    Ontario or in a jurisdiction outside Ontario at the time of the accident.
    Basic logic dictates that proof that a claimant did not ordinarily reside in
    Ontario at the time of the accident in question, as conceded in this case,
    necessarily means that the claimants ordinary residence was outside the
    jurisdiction of Ontario at the relevant time.

[22]

We
    therefore agree with the motion judge that to successfully invoke s. 25(1), the
    Superintendent was required to establish that the appellant did not ordinarily
    reside in Ontario on the date of the accident.  On the motion judges
    uncontested factual findings, the Superintendent met this onus.

[23]

This
    interpretation of the ordinary residency requirement under s. 25(1) accords
    with the purpose of s. 25(1).  The legislative history of s. 25(1), as
    considered by the motion judge, reflects a legislative intention to avoid
    unnecessary payments out of the Fund, which relies on public monies sourced
    through Ontarios Consolidated Revenue Fund.  Section 25(1) contemplates
    payments from the Fund to non-Ontario residents only in limited circumstances.
    Payments to those persons are permitted only where the claimant resides in a
    jurisdiction that provides ordinary residents of Ontario with reciprocal
    benefits, that is, with recourse of a substantially similar character to that
    provided by [the] Act.  There is no suggestion that this exception applies in
    this case.

[24]

To
    conclude on this issue, we are satisfied that the motion judge fully considered
    all the relevant factors bearing on the appellants ordinary residency.  In
    doing so, he recognized that
de facto
physical presence in Ontario,
    even if continuous, does not automatically establish ordinary residency in
    Ontario for the purpose of access to the Fund.  The appellant was present in
    Ontario illegally, was subject to deportation on discovery and had already been
    deported once.  His continuing and knowing unlawful presence in Ontario, his
    failure to challenge his initial deportation order and his failure to seek to regularize
    his status in Ontario at any point prior to the date of the accident, weighed
    heavily against the conclusion that he ordinarily resided in Ontario within the
    meaning of s. 25(1) at the time of the accident.

[25]

As
    the motion judge observed, at paras. 51 and 52:

I do not believe that it was the intention of the Ontario
    Legislature in enacting this statute to allow a person the opportunity to reap
    the benefits of ordinary residency in Ontario via a clandestine life through
    the passage of time.  Even though the Act, as remedial legislation, ought to be
    interpreted liberally, I do not find the plaintiff to be a member of the
    specific class of Ontarians sought to be protected by this Act.

While the plaintiff did enjoy a continuous physical presence in
    Ontario, that is but one factor to consider.  The plaintiffs presence was the
    result of deception, and he never sought to regularize his illegal status (a
    status of which he was well aware) until after he was made subject to a
    deportation order.

[26]

These
    were proper and necessary considerations in this case.

[27]

We
    also reject the appellants contention that the motion judge relieved the
    Superintendent of his onus of proof or improperly lowered his evidentiary
    burden under s. 25(1).  As we have already said, the motion judge clearly
    recognized the Superintendents burden under s. 25(1) and concluded that it had
    been properly discharged on the facts of this case.  This holding was open to
    the motion judge on the evidentiary record before him.

Disposition

[28]

For
    the reasons given, the appeal is dismissed.  The Superintendent is entitled to
    his costs of the appeal, fixed in the agreed amount of $5,000, inclusive of
    disbursements and all applicable taxes.

Released:

SEP 23 2016                                    E.A.
    Cronk J.A.

EAC                                                Paul
    Rouleau J.A.

Grant
    Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Thompson v. Ontario (Attorney General), 2016 ONCA
    676

DATE: 20160913

DOCKET: C57803

Sharpe, Lauwers and Miller JJ.A.

BETWEEN

Karlene Thompson and
Empowerment
    Council, Systemic Advocates in Addictions and Mental Health

Applicants (Appellants)

and

Attorney General of Ontario

Respondent (Respondent)

Marshall A. Swadron and Sarah M. Latimer, for the appellant
    Empowerment Council, Systemic Advocates in Addictions and Mental Health

Rochelle S. Fox and Savitri Gordian, for the respondent

Karen R. Spector and C. Tess Sheldon, for the intervener
    ARCH Disability Law Centre

David Morritt and Vanessa Cotric, for the intervener
    Canadian Civil Liberties Association

Heard: June 20, 2016

On appeal from the judgment of Justice Edward P. Belobaba
    of the Superior Court of Justice, dated September 12, 2013, with reasons
    reported at 2013 ONSC 5392

Sharpe J.A.:

[1]

Following the tragic murder of Brian Smith, a well-known Ottawa
    sportscaster, by an individual who suffered from untreated schizophrenia, the
    Ontario Legislature enacted
Brians Law (Mental Health Legislative
    Reform), 2000
, S.O. 2000, c. 9.

[2]

Brians Law
expanded the criteria
    for civil committal and introduced a regime of community treatment orders
    (CTOs) which provide for community-based treatment and supervision for persons
    with past psychiatric hospital admissions. The appellants argue that
Brians
    Law
violates several provisions of the
Charter
    of Rights and Freedoms,
with a particular focus on the s.
    7 right to liberty and security of the person.

[3]

The application judge gave detailed reasons for dismissing the
Charter
challenge. I am in substantial agreement with the reasons of the
    application judge and accordingly would dismiss this appeal.

The applicants

[4]

The applicant Karlene Thompson has a lengthy history of mental illness.
    She was detained in a hospital as an involuntary patient and was also the
    subject of a CTO. She resisted treatment and complained of the adverse side
    effects she suffered from neuroleptic drugs. Without treatment, her hygiene and
    ability to function were severely compromised. With treatment, her hygiene and
    ability to function improved. However, she suffered side effects including
    dramatic weight gain, excessive salivation and pain in her legs and at her
    injection sites. She left Canada in 2007 before this application was heard.

[5]

The application has been carried forward by the Empowerment Council,
    Systematic Advocates in Addictions and Mental Health, an advocacy group that
    represents the interests of individuals who are involved with mental health and
    addiction services. The Empowerment Council was given public interest standing
    in April, 2011:
Thompson v. Attorney General of Ontario
, 2011 ONSC 2023.

[6]

The appellants also led evidence of another patient, Amy Ness, who
    had been the subject of involuntary committal and a CTO. She strongly resisted
    treatment with neuroleptic drugs, complained of side effects and says that she
    only agreed to a CTO as a way to avoid involuntary committal. While her
    symptoms and ability to function improved significantly with treatment, she
    credited factors other than neuroleptic drugs for any improvement.

The legislation

[7]

Before the enactment of
Brians Law
in 2000, individuals could be involuntarily committed for treatment under the
Mental
    Health Act
, R.S.O. 1990, c. M.7 if they were apparently
    suffering from mental disorder that would likely result in serious bodily harm
    to another person or to themselves (the Box A criteria).
Charter
challenges to the Box A criteria were rejected:
C.B. v.
    Sawadsky
, [2005] O.J. No. 3682 (S.C.J.), affd on other grounds (2006), 82
    O.R. (3d) 661 (C.A.), leave to appeal to S.C.C. refused, [2006] S.C.C.A. no.
    479;
Robertson v. Canada (A.G.)
, 2000 CarswellOnt 318 (S.C.J.);
Starnaman
    v. Penetanguishene Mental Health Centre
, [1994] O.J. No. 1958 (Gen. Div.),
    affd (1995), 24 O.R. (3d) 701 (C.A.).

[8]

Brians
    Law
expanded the grounds for involuntary committal. It
    added s. 15(1.1), known as the Box B criteria. These allow for a 72 hour
    restraint and examination period in a psychiatric facility where the physician
    has reasonable cause to believe that the person is likely to suffer
    substantial mental or physical deterioration or serious physical impairment if
    the person:

(a) has previously received treatment for mental
    disorder of an ongoing or recurring nature that, when not treated, is of a
    nature or quality that likely will result in serious bodily harm to the person
    or to another person or substantial mental or physical deterioration of the
    person or serious physical impairment of the person; and

(b) has shown clinical improvement as a result of
    the treatment,

(c) is apparently suffering from the same mental
    disorder as the one for which he or she previously received treatment or from a
    mental disorder that is similar to the previous one.

[9]

The person must also be incapable of consenting to treatment and the
    consent of the persons Substitute Decision Maker (SDM) must be obtained.

[10]

Section
    16(1.1) allows a Justice of the Peace to order an assessment where criteria
    mirroring those set out in s. 15(1.1) are met.

[11]

Section
    20(1.1) expands the grounds for involuntary admission to a
psychiatric facility i
f the physician, having
    examined the person, is of the opinion that criteria mirroring those set out in
    s. 15(1.1) are met, provided the person is incapable of consenting to
    treatment, the consent of the persons SDM has been obtained, and the person is
    not suitable as an informal or involuntary patient. The Act provides that an
    involuntarily admitted person is entitled to be notified (i) of his or her right
    to ask the Consent and Capacity Board (CCB) to review the matter and (ii)
    that he or she has the right to counsel and advice from a rights adviser.

[12]

Prior to the enactment of
Brians Law
, there was no provision for any alternate and less restrictive form
    of compulsory treatment for individuals who met the criteria for involuntary
    committal. The second innovation in
Brians Law
was to introduce CTOs. The purpose of a CTO, as described in s.
    33.1(3), is to provide a person suffering from serious mental disorder with a comprehensive
    plan of treatment in the community and in a less restrictive setting than
    detention in a mental health facility. CTOs are intended to remedy the
    revolving door problem of individuals who are admitted for treatment, improve
    with treatment, but upon release stop treatment, care or supervision, relapse
    and are then re-admitted as involuntary patients.

[13]

Section 33.1(4) sets out the criteria for a CTO:

(a) during the previous three-year period, the
    person,

(i) has been a patient
    in a psychiatric facility on two or more separate occasions or for a cumulative
    period of 30 days or more during that three-year period, or

(ii) has been the
    subject of a previous community treatment order under this section;

(b) the person or his or her substitute
    decision-maker, the physician who is considering issuing or renewing the
    community treatment order and any other health practitioner or person involved
    in the persons treatment or care and supervision have developed a community
    treatment plan for the person;

(c) within the 72-hour period before entering
    into the community treatment plan, the physician has examined the person and is
    of the opinion, based on the examination and any other relevant facts
    communicated to the physician, that,

(i) the person is
    suffering from mental disorder such that he or she needs continuing treatment
    or care and continuing supervision while living in the community,

(ii) the person meets
    the criteria for the completion of an application for psychiatric assessment
    under subsection 15 (1) or (1.1) where the person is not currently a patient in
    a psychiatric facility,

(iii) if the person
    does not receive continuing treatment or care and continuing supervision while
    living in the community, he or she is likely, because of mental disorder, to
    cause serious bodily harm to himself or herself or to another person or to
    suffer substantial mental or physical deterioration of the person or serious
    physical impairment of the person,

(iv) the person is able
    to comply with the community treatment plan contained in the community
    treatment order, and

(v) the treatment or
    care and supervision required under the terms of the community treatment order
    are available in the community;

(d) the physician has consulted with the health
    practitioners or other persons proposed to be named in the community treatment
    plan;

(e) subject to subsection (5), the physician is
    satisfied that the person subject to the order and his or her substitute
    decision-maker, if any, have consulted with a rights adviser and have been
    advised of their legal rights; and

(f) the person or his or her substitute
    decision-maker consents to the community treatment plan in accordance with the
    rules for consent under the
Health Care Consent Act, 1996
.

[14]

The patient or his or her SDM must consent to the CTO and undertake
    to comply with the CTO. If the patient fails to comply, the physician may issue
    an order for the patient to be brought in by the police for examination. To do
    so, the physician must have reasonable cause to believe that the patient
    continues to meet the criteria for a CTO and that reasonable steps have been
    taken to find the patient and inform him or her of the possible consequences of
    non-compliance. A CTO lasts for six months and may be renewed on notice to the
    patient. The legislation provides for legal advice to be given to the subject
    of a CTO before the order is made or renewed.

The Position of the Appellants

[15]

The focus of the appellants constitutional challenge is on two central
    features of the legislation. First, the appellants challenge the added Box B
    criterion: likely to suffer substantial mental or physical deterioration or
    serious physical impairment for involuntary committal. Second, the appellants
    challenge the CTO regime as an unjustifiable form of compulsory treatment.

[16]

Before the application judge, the appellants argued that the purpose
    of the legislation was protection of the public. That purpose, they argued,
    could not survive scrutiny as it is based upon a false stereotype that persons
    suffering from mental illness are prone to violence and pose a higher risk to
    public safety. The application judge agreed that there was no evidence to
    support the proposition that those suffering from mental disorder pose a disproportionate
    threat to public safety. However, he rejected the contention that public safety
    was the sole purpose of the legislation. He found that a review of the
    legislative debates, the language of the Act and the criteria for involuntary
    admission and CTOs made it clear that that the governments purpose was also to
    provide an improved treatment regime for all seriously mentally ill persons.

[17]

On appeal, the focus of the appellants attack on the legislation is
    that it constitutes an unjustifiable extension of forced treatment with
    neuroleptic medication. In making that submission, they rely on the evidence
    from their expert witnesses, Prof. Geoffrey Reaume, an historian and professor
    of critical disability studies, and Prof. David Cohen, a professor of social
    work. They are of the opinion that anti-psychotic medication is not effective
    as a treatment for mental disorder and that its side effects are severe. The
    appellants experts also maintain that coerced treatment undermines the
    patients dignity and sense of self-worth and can undermine recovery.

[18]

The appellants also rely on studies doubting the effectiveness of
    CTOs, two examining similar schemes in the United States, and another, the
    Dreezer Report, done in Ontario pursuant to s. 33.9 of the Act (which requires
    periodic reviews of the effectiveness of CTOs). That study concluded that [i]t
    is clear that CTO clients have, overall, benefited greatly from the CTO
    program but cautioned that it was not clear that the benefits were
    attributable to the legal restrictions inherent in CTOs. The Report suggested
    that satisfactory services could be provided in other ways and that absent some
    evidence to demonstrate that legal compulsion was needed, there is no
    justification to continue the program in its current form in the long term.

[19]

The evidence led by the appellants was challenged and countered by
    evidence led by the Attorney General. Dr. Richard OReilly, an experienced
    clinical psychiatrist, researcher and author of scholarly papers on many
    psychiatric subjects  including the effectiveness of CTOs in treating patients
    with mental illness  agreed that neuroleptic medications only target symptoms
    and do not provide a cure and that some patients do not benefit from the
    treatment. However, Dr. OReilly maintained that for many people, antipsychotic
    medication reduces the intensity of their symptoms, reduces the risk of relapse
    and suicide, allows for other forms of intervention and makes it possible to
    treat successfully a large number of patients with schizophrenia and other
    psychotic illnesses. Dr. OReilly recognized that, as with most medications,
    there are risks and benefits associated with antipsychotic drugs. In his
    opinion, however, antipsychotic drugs are properly prescribed by physicians
    because the benefits outweigh the risks and without treatment individuals who
    suffer from mental illness would be distressed, dysfunctional, and have a high
    risk of adverse outcomes such as suicide.

[20]

The appellants contend that the application judge erred in law by
    failing to make findings to resolve significant differences between the expert
    witnesses. They focus on certain comments the application judge made as to the
    limits of what he was prepared to decide. The application judge concluded, at
    para. 89, that there is a significant disagreement in the mental health
    professional community as to the effectiveness of antipsychotic or neuroleptic
    treatment and as to the efficacy of community based treatment that is based
    upon coercion. He added, at paras. 90-91:

The only conclusions that can be fairly drawn from the
    conflicting empirical studies that are contained in the record before me are
    (1) the applicants have presented a compelling case that the impugned
    amendments enacted by
Brians Law
may not be working as intended and
    may be causing more harm than good; and (2) the Minister of Health and
    Long-Term Care would be well advised to consider a comprehensive review of the
    impact and effectiveness of both the Box B provisions and the CTO regime.

But neither of these conclusions can support a finding of
    overbreadth, arbitrariness or gross disproportionality. Indeed, the case law is
    clear that where the evidence is inconclusive and the efficaciousness of a
    legislative remedy is difficult to measure, it is for the legislature and
not the courts, to decide upon the appropriate course
    of action.

[21]

The application
    judge then cited
Cochrane v. Ontario (Attorney General)
, 2008 ONCA
    718, 92 O.R. (3d) 321, at paras. 26-29, leave to appeal to S.C.C. refused 33067
    (June 11, 2009), where this court stated:

[W]here the risk of harm or the efficaciousness of Parliament's
    remedy is difficult or impossible to measure scientifically it is for the
    legislature, not the courts, to decide upon the appropriate course of action,
    provided there is evidence of a reasoned apprehension of harm. It was not the
    role of the application judge to make detailed factual findings as that would
    lead to micromanagement of Parliament's agenda. Her task was rather to apply
    the relevant constitutional control; namely, the general principle that the
    parliamentary response must not be grossly disproportionate to the state
    interest sought to be protected: see
Malmo-Levine
, at para. 133.

[22]

The appellants say that the application judge erred by failing to
    make the critical findings on the disputed expert evidence and that had he done
    so, he would have found that forced treatment with neuroleptic medication is
    ineffective and that it causes more harm than good. Those findings, say the
    appellants, would be fatal to the constitutional validity of the legislation.

[23]

The appellants position is supported by two interveners, the
    Canadian Civil Liberties Association and the ARCH Disability Law Centre.

Issues

[24]

The appellants raise three issues which I will address in the
    following manner:

1.
Did the application judge err by failing to make adequate findings
    on the expert evidence and did he misapply the principles of fundamental
    justice?

2.
Did the application judge err in his s. 7 analysis by:

a.

Failing to properly consider the purpose of the legislation;

b.

Improperly importing s. 1 considerations into the s. 7 analysis;

3.
Did the application judge err by failing to find
Brians
    Law
violates ss. 9, 10, 12 and 15 of the
Charter
?

Analysis

(1)

Did the application judge err by failing to make
    adequate findings on the expert evidence and did he misapply the principles of
    fundamental justice?

(a)

What findings was the application judge required
    to make?

[25]

An application judge need not make conclusive findings on every
    factual issue raised by the parties or that arises from the evidence they
    adduce. A failure to make a factual finding warrants appellate intervention
    only where it gives rise to the reasoned belief that the trial judge must have
    forgotten, ignored or misconceived the evidence in a way that affected his
    conclusion:
Van de Perre v. Edwards
, 2001 SCC
    60, [2001] 2 S.C.R. 1014 at para. 15. The application judges refusal to make
    the findings of fact urged by the appellants does not meet this standard. In my
    view, the application judge considered all of the evidence and made sufficient
    findings to dispose of the legal issues before him. He properly refused to make
    definitive findings on conflicting evidence relating to matters that were not
    germane to the legal issues he was required to resolve.

[26]

As I have noted, the appellants led evidence indicating that
    antipsychotic or neuroleptic medication may not be effective, while the
    Attorney General led evidence that these medications are beneficial. The
    appellants say that the application judge erred in law by failing to make
    definitive findings to resolve that difference of opinion. The appellants place
    particular emphasis upon comments the application judge made in his reasons
    relating to the debate in the mental health professional community as to the
    effectiveness and use of antipsychotic or neuroleptic medication. The
    application judge noted, at para. 89, that there was considerable disagreement
    in the mental health professional community and the relevant scientific
    literature about the effectiveness of modern psychiatric practices in the
    treatment of serious mental illness. He also observed at para. 89 that there
    is significant disagreement about the efficacy of a community treatment regime
    that is based on coercion and at para. 90 that the CTO regime may not be
    working as intended and may be causing more harm than good and that the
    minister would be well advised to consider a comprehensive review of the
    impact and effectiveness of both the Box B provisions and the CTO regime.

[27]

To consider the relevance of these comments and the appellants
    arguments, it is necessary to put the issue of expert evidence and the findings
    the application judge was required to make into proper legal perspective. It is
    for that reason that I address the appellants ground of appeal relating to the
    misapplication of the principles of fundamental justice together with the issue
    of the adequacy of the findings relating to the expert evidence.

[28]

In
Canada (Attorney General) v. Bedford
, 2013 SCC 72, [2013] 3 S.C.R. 1101, the case most heavily relied
    upon by the appellants, the court stated, at para. 49, that the first instance
    judge is required to evaluate and weigh expert evidence as to social or
    legislative facts
in order to arrive at the conclusions of fact
    necessary to decide the case
 [emphasis added].

[29]

What conclusions of fact were necessary to decide this case?

[30]

Section 7 of the
Charter
provides:
    Everyone has the right to life, liberty and security of the person and the
    right not to be deprived thereof except in accordance with the principles of
    fundamental justice.

[31]

A person claiming that a law is inconsistent with s. 7 must show
    that: (1) the law limits the persons right to life, liberty or security of the
    person; and (2) the limits are not in accordance with the principles of
    fundamental justice.

[32]

The Attorney General conceded that the impugned provisions of
Brians
    Law

limited the liberty and security of the person of
    mental health patients who were subject to involuntary commitment or CTOs. The
    contentious and determinative issue was this: could the appellants demonstrate
    that the limit on liberty and security of the person was in not accordance with
    the principles of fundamental justice?

[33]

In my view, the application judge quite properly focused on and made
    the required factual findings to resolve the critical issues that arose on the
    appellants s. 7 challenge, namely, were the impugned provisions of
Brians
    Law
arbitrary, overly broad, or grossly disproportionate.

(b)

Arbitrariness

[34]

Bedford
, at para. 111, holds that a law will be arbitrary if there is no
    rational connection between the object of the measure that causes the s.7
    deprivation and the limits it imposes on life, liberty, or security of the
    personA law that imposes limits on these interests in a way that bears
no
    connection
to its objective arbitrarily impinges on those
    interests [emphasis in original]. In
Carter v. Canada (Attorney
    General)
, 2015 SCC 5, [2015] 1 S.C.R. 331, the Court
    explained, at para. 83, that an arbitrary law is one that is not capable of
    fulfilling its objectives. It exacts a constitutional price in terms of rights,
    without furthering the public good that is said to be the object of the law.

[35]

With respect to arbitrariness, the application judge found, at para.
    98, that [i]t cannot be reasonably said that the impugned provisions bear no
    relation to, or are inconsistent with the public health and public safety
    purposes of the legislation. He pointed out, at para. 99, that there is
    evidence showing that application of the Box B criteria facilitates faster
    treatment for persons incapable of consenting to treatment with recurrent or
    on-going mental illness. Box B can only be applied where past treatment has
    resulted in clinical improvement and where substantial mental or physical
    deterioration would likely arise without treatment. The application judge found
    that without the Box B criteria, physicians could not assess or hospitalize
    patients until they deteriorated to the point where they posed a risk of
    serious bodily harm to themselves or to others. The application judge also
    found that the Box B criteria increase prospects for a better long-term outcome
    by minimizing prolonged delays in receiving needed treatment.

[36]

Likewise, he found, at para. 100, the CTO scheme rests on similarly
    strict criteria, requires the consent of the individual or the SDM, and imposes
    procedural protections to ensure respect for the rights of the individual.

(c)

Overbreadth

[37]

Legislation that is drafted more broadly than is necessary to attain
    its objective and thereby impinges upon a protected right or freedom may be
    struck down under section 7 of the
Charter
on
    grounds of overbreadth. In
Bedford
, the
    Supreme Court stated, at para. 113, overbreadth allows courts to recognize
    that the law is rational in some cases, but that it overreaches in its effects
    in others.

[38]

At para. 94, the application judge found that there are individuals
    who suffer from mental illness who respond to treatment while in hospital but
    who repeatedly stop taking medication after discharge. These individuals
    relapse, experience substantial mental and physical deterioration, and are
    readmitted to hospital. The application judge was satisfied by the evidence
    that the Box B criteria can be applied to this specific group by trained
    medical professionals on an individualized basis in a way that avoids both stereotypical
    assumptions about those who suffer from mental illness and the problem of
    overbreadth.

[39]

At para. 95, the application judge found that the community
    treatment plan, which underlies the CTO, is individualized and tailored to the
    persons circumstances. He found that the CTO provisions set out strict
    criteria as to when a CTO may be issued, and include significant procedural and
    substantive protections. The CTO provisions ensure that persons subject to a
    CTO and their SDMs (where applicable) receive rights advice and a right to
    retain and instruct counsel before a CTO is issued. The purpose of this is to
    ensure that they have timely rights advice about legal options including, for
    example, seeking review of findings of incapacity to consent to treatment or
    involuntary admission.

[40]

The application judge observed at para. 97 that while there was some
    evidence to the contrary, CTOs do bring stability to the lives of many
    individuals. Without antipsychotic medication Ms. Thompsons mental state
    fluctuated and when she consistently failed to take medication, it
    substantially deteriorated. By contrast, with antipsychotic medication, Ms.
    Thompson had appropriate and organized thought content, she did not express
    hallucinations or delusions, and she was engaged with her CTO Team.

[41]

The application judge also found that since being placed on a CTO,
    Ms. Ness had not been hospitalized, she was volunteering in the community, she
    had a job, and she was involved in the arts. He pointed out, at para. 104, that
    the Consent and Capacity Board found it was likely that the CTO and medication
    were providing some benefit to her which allowed her to have a home and a job
    and to engage in activities which supported her wellness.

[42]

Contrary to the submission made by the intervener Canadian Civil
    Liberties Association (CCLA), the application judges finding that CTOs may
    not work for all individuals does not establish overbreadth. Overbreadth
    requires that some subset of liberty infringements authorized by the impugned
    law be unconnected to the laws purpose. The mere fact that the law fails to
    fully
achieve
its purpose (here, improved
    treatment) in some instances does not establish that, in those instances, the
    liberty infringement was
unconnected
to the
    laws purpose. In my view, the application judge had a proper foundation upon
    which he could conclude that even if antipsychotic or neuroleptic medication
    and forced treatment does not always work, the strict criteria of this
    legislation ensures to the extent possible that it will only be applied when,
    in the opinion of a physician, its effect will be beneficial in terms of health
    and public safety.

(d)

Gross disproportionality

[43]

In
Canada (Attorney General) v. PHS Community Services
    Society
, 2011 SCC 44, [2011] 3 S.C.R. 134 at para. 133,
    the Supreme Court of Canada stated: Gross disproportionality describes state
    actions or legislative responses to a problem that are so extreme as to be
    disproportionate to any legitimate government interest.  In
Bedford
, at para. 120, the Court pointed out that [t]he rule against gross
    disproportionality only applies in extreme cases where the seriousness of the
    deprivation is totally out of sync with the objective of the measure.

[44]

The application judge recognized, at paras. 97 and 105, that like any
    therapeutic intervention, CTOs may not work for all individuals. He found,
    however, that research demonstrated that persons placed on CTOs are
    significantly less likely to be the victims or perpetrators of violence, or to
    be arrested or to become homeless. They also experience better follow-up with
    clinical services and significantly increased contact with mental health
    services after the CTO expires. He found, at paras. 97 and 105, that while some
    patients can be treated in the community voluntarily without a CTO after
    discharge from hospital, many do not appreciate that they have a mental illness
    and refuse to take treatment or to follow-up with mental health services. CTOs
    ensure that people who do not recognize the need for treatment stay connected
    with mental health services.

[45]

While the application judge did comment on the considerable
    disagreement in the mental health professional community and the relevant
    scientific literature about the habitual use of antipsychotic/neuroleptic
    medications, he concluded, at para. 102, based on the evidence, that for many
    people, antipsychotic drugs: (i) reduce the intensity of symptoms (allowing
    other treatment interventions to be effective); (ii) shorten the exacerbations
    of illness allowing people to reach and sustain psychosocial milestones; (iii)
    reduce the risk of relapse; and (iv) reduce the risk of suicide. He concluded,
    at para. 102, that the evidence in the record shows that antipsychotic drugs
    have made it possible to successfully treat large numbers of patients with
    schizophrenia and other psychotic illnesses, which permits discharge from
    institutional care. Given the individually tailored nature of the legislative
    regime and the significance of the public health objectives, it cannot be said
    that the legislative response to the public health problem is extreme, let
    alone so extreme as to be grossly disproportionate.

(e)

Principles of Fundamental Justice: Conclusion

[46]

The application judges factual findings correspond with what I
    would describe as the most striking feature of the Box B criteria and the CTO
    scheme, namely, that these provisions can only be invoked following a highly
    individualized assessment and consideration of the patients specific condition
    and treatment needs. That assessment is directly and intimately connected with
    the public health and public safety goals of the legislation. The legislation
    specifically targets individuals whose condition is such that they will, in the
    opinion of a physician, benefit from the application of the law to their
    situation in order to avoid serious mental deterioration. The patient must be
    someone who has suffered from mental illness in the past, who has responded to
    treatment, who now suffers from the same mental illness and is to be given the
    same treatment. In the case of a CTO, the individual must also satisfy the
    revolving door criteria of previous hospital admissions and must consent to
    the order personally or through a SDM. These criteria and the expert
    individualized assessment they require focus on factors that minimize if not
    eliminate any risk of arbitrary, overly broad or grossly disproportionate
    application of this law.

[47]

The application judges observations regarding the uncertain state
    of knowledge regarding neuroleptic medication and forced treatment must be read
    in the light of his arbitrariness, overbreadth and gross disproportionality
    analysis. He correctly focused his consideration of the conflicting expert
    evidence on those issues. They were the issues he had to decide to resolve the
    case. There was, he found, a proper foundation in the evidence from which the
    legislature could act to deal with a perceived problem of public health
    provided it did not violate the relevant constitutional controls of
    arbitrariness, overbreadth and gross disproportionality. And, as explained in
Bedford
, at para. 90, it is when considering the principles of fundamental
    justice that the question of deference arises. The applicant bears the onus
    of establishing the limitation of a
Charter
right. The application judge found that the contradictory evidence in the
    record was insufficient to support a finding of arbitrariness, overbreadth or
    gross disproportionality. His comment that the appellants had made out a compelling
    case for a ministerial review of the impugned legislation merely expressed the
    limitations of his judicial function in the absence of sufficient evidence of a
Charter
breach.

[48]

The application judge quite properly refused to accept the
    appellants invitation to engage in a general inquiry into the wisdom of this
    legislation. There is a reasonable foundation in the evidence for the
    legislature to act to deal with an important issue of public health and safety
    and for the application judge to conclude that the legislature did not overstep
    the limits on personal liberty mandated by the
Charter
.

[49]

Accordingly, I would reject the submission that the trial judge
    erred by failing to make the factual findings necessary to decide the issues
    raised in this case or that he misapplied the principles of fundamental
    justice.

(2)

Did the application judge err in his s. 7
    analysis by:

(a)

Failing to properly consider the purpose of the
    legislation;

(b)

Improperly importing s. 1 considerations into
    the s. 7 analysis;

(a)

Purpose of the legislation

[50]

The appellants submit that the public safety purpose of
Brians
    Law
is fatal to its constitutional validity as there is
    no meaningful correlation between mental illness and violence. As I have noted,
    the application judge rejected this argument having found that the purpose of
    the Box B criteria and the CTO regime go well beyond public safety and
    explicitly concern themselves with treatment issues and aim to provide a
    community-based treatment plan for revolving door patients that fall within
    the prescribed criteria.

[51]

I agree with the Attorney General that to the extent the legislation
    does have a public safety purpose, that purpose cannot be viewed in isolation.
    It must be seen as part and parcel of an integrated scheme that promotes both
    improved treatment and public safety. The legislation does not rest upon unproven
    stereotypes or assumptions about mental health and violence. Its dual purpose
    of promoting health and public safety is achieved through a carefully balanced
    scheme that requires a highly specific and individualized assessment of the
    individuals mental health history, treatment needs and the risk that
    individual poses to him or herself and the public at large.

[52]

I do not agree with the appellants submission that the application
    judges reasons run afoul of the improper purpose rule articulated in
R.
    v. Big M Drug Mart Ltd.,
[1985] 1 S.C.R. 295, at paras.
    80-88. The application judge did not find, as the appellants suggest, that the
    impugned law had two purposes, one proper and the other improper, and conclude
    that the proper purpose of improved treatment remedied the improper purpose of
    ensuring public safety. Rather, he found that the impugned provisions rest on
    the balanced and appropriate integration of these two purposes together.

[53]

The CCLA argues that that improved treatment cannot be a valid
    legislative objective because it is coerced. Although a CTO can only be made on
    the consent of the individual or the individuals SDM, the CCLA argues that
    there is no real consent as the only alternative to a CTO is involuntary
    committal.

[54]

In my view, this argument must be rejected for three reasons. First,
    coerced treatment may be the effect of the law in certain circumstances but it
    is not its purpose which the application judge properly found to be improved
    treatment as well as public safety. When characterizing a law for the purpose
    of s. 7 analysis, the articulation of the objective should focus on the ends
    of the legislation rather than on its means [and] be at an appropriate level of
    generality:
R. v. Moriarity,
2015 SCC 55,
    [2015] 3 S.C.R. 485, at para. 26. I reject the CCLAs characterization of the
    laws purpose.

[55]

Second, there is no constitutional ban on coerced treatment for
    those who lack the capacity to make treatment decisions for themselves. It is
    well established that where treatment would benefit an individual and the
    individual is incapable of making a treatment decision because of mental
    illness, the state has an obligation to provide care and to exercise its
parens
    patriae
authority:
Fleming v. Reid
(1991), 4 O.R. (3d) 74 at p. 87.

[56]

Third, if the individual meets the criteria for involuntary
    committal, I fail to see how the legislature can be faulted for offering the
    consensual CTO as a less restrictive option. Accordingly, I reject the argument
    that consent to a CTO is effectively coerced.

(b)

Section 1

[57]

The appellants submit that the application judge erred by importing
    s. 1 considerations into his s. 7 analysis contrary to the Supreme Courts
    directions in
Bedford
and
Carter
. They argue that his arbitrariness, overbreadth and gross disproportionality
    analysis, which relied on the tailored and individualized application of the
    law by trained medical professionals, improperly required the appellants to
    disprove the efficacy of the law or disprove that any benefits might flow from
    the law.

[58]

I see no merit in this submission. The application judge was
    entirely justified in relying on the individualized nature of the regime to
    negate the claims of arbitrariness and overbreadth. Arbitrariness and
    overbreadth are, as the Supreme Court noted in
Bedford
(para. 108), directed against the absence of a connection between
    the purpose of the law and its effects on life, liberty, or security of the
    person. This requires an analysis of the
means
that the law uses to achieve its purpose:
Bedford
, para. 105. The individualized nature of the treatment is a
    relevant means that the application judge had to consider.

[59]

Unlike arbitrariness and overbreadth, gross disproportionality
    considers the relationship between the deprivation and the objective or purpose
    of the law, rather than its means. The rule against gross disproportionality
    applies in extreme cases where the seriousness of the deprivation is totally
    out of sync with the objective of the measure:
Bedford
, para. 120. The effect on the rights claimant, compared with the
    objective of the law, must be entirely outside of the norms accepted in our
    free and democratic society:
Bedford
, para.
    120. This analysis requires a judge to hold in view both the effect on the
    rights claimant and the objective of the law and, using the norms of our free
    and democratic society, evaluate whether the seriousness of the deprivation is
    out of all proportion to the laws objective.

[60]

In my view, the application judges assessment of s. 7 was entirely
    consistent with the approach mandated in
Bedford
. It did not, as the appellant submits, import s.1 considerations.
    As the application judge correctly found, the requirement for a tailored and
    individualized assessment by a trained medical professional was key to the
    arbitrariness and overbreadth analysis. When that feature of the law was
    considered, it was apparent that the appellants could not demonstrate that the
    limitations it imposed on their liberty and security of the person violated
    these principles of fundamental justice.

[61]

With respect to gross disproportionality, it could not be said that
    any deprivation of the right to liberty or security of the person was totally
    out of sync with the laws objectives. The application judge reached these
    conclusions without importing considerations that properly belong to the s. 1
    analysis.

(3)

Did the application judge err by failing to find
Brians Law
violates ss. 9, 10, 12 and 15 of the
Charter
?

[62]

The focus of the appellants attack on
Brians Law
rests on s. 7 and their arguments relating to ss. 9, 10 and 12 of
    the
Charter
largely replicate their s. 7
    arguments.

[63]

I agree with the application judge that given the highly
    individualized and structured assessment of the individual, neither involuntary
    admission nor a CTO amounts to arbitrary detention under s. 9.

[64]

I also agree with his conclusion that given the extensive rights
    notifications and procedural protections in the legislation, there is no infringement
    of the s. 10(a) right to be informed promptly of the reasons for arrest or
    detention or the s. 10(b) right to retain and instruct counsel.

[65]

I agree as well with his conclusion that as the law survives
    scrutiny under s. 7, it cannot amount to cruel and unusual treatment or
    punishment under s. 12.

[66]

Finally, I agree with the application judge that
Brians
    Law
does not violate s. 15(1) as discrimination on the
    grounds of mental disability. The individualized consideration of the
    individuals clinical history, past and current mental status and the
    likelihood of serious harm to him or herself or to others or substantial mental
    or physical deterioration is the antithesis of discrimination on the ground of
    presumed group or personal characteristics.

[67]

I do not accept ARCHs submission that that the law is
    discriminatory because it rests upon invalid stereotypical assumptions about
    the lack of capacity of mental health patients to make treatment decisions for
    themselves. Both the
Mental Health Act
and the
Heath Care Consent Act, 1996
, S.O. 1996, Ch. 2
    Sched. A, give priority to the patients views and require an individualized
    assessment of the patients capacity to make treatment decisions before the
    patients views can be overridden. Nor do I accept ARCHs contention that
    individualized assessment cannot be relied upon because clinical decision
    making may itself be infected by discrimination. That submission would require
    a firm factual foundation and the court below made no such findings.

Disposition

[68]

Accordingly, I would dismiss the appeal. The Attorney General does
    not seek costs of the appeal.

[69]

The application judge awarded costs of $100,000 to the appellants at
    first instance despite their lack of success because the appellants are public
    interest litigants, the issues are important and advance funding would have
    been granted: 2013 ONSC 6357. In my view, the situation is different on appeal.
    The applicants had a full hearing before the application judge who gave
    thorough reasons with which I substantially agree. I am not persuaded that
    there is any basis to award further costs to the appellants at this stage.

Released: September 13, 2016

Robert J. Sharpe
    J.A.

I agree P. Lauwers
    J.A.

I agree B.W. Miller
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Trillium Motor World Ltd. v. General Motors of
    Canada Limited, 2016 ONCA 702

DATE: 20160923

DOCKET: M46726 (C60838)

Huscroft J.A. (In Chambers)

BETWEEN

Trillium Motor World Ltd.

Plaintiff (Appellant/Respondent by Cross-Appeal/Responding
    Party)

and

General Motors of Canada Limited
and
    Cassels Brock & Blackwell LLP

Defendants (Respondents/
Appellant by Cross-Appeal/Moving
    Party
)

David S. Morritt and Evan Thomas, for the
    respondent/moving party

David Sterns and Andy Seretis for the
    appellant/responding party

Heard: September 9, 2016

ENDORSEMENT

[1]

General Motors of Canada Limited (GM) seeks an order requiring
    Trillium Motor World Ltd. (Trillium) to pay security for costs prior to
    continuing its appeal.

[2]

GM seeks $5,353,133.77, which includes $5,478,005.32 in costs awarded to
    GM following its successful defence at trial, less $500,000 (security for costs
    already paid by Trillium), plus $375,128.45, which GM estimates to be the costs
    of responding to Trilliums appeal on a partial indemnity basis.

[3]

During the course of the hearing, GM indicated that an order for $1.8
    million in respect of the appeal costs plus some percentage of the trial costs
    would not be unfair. Ultimately, GM encouraged the court to exercise its
    discretion to make an order for any quantum it considered just.

[4]

For the reasons that follow, I have concluded that it is too late in the
    day to order security for costs, both as to the trial costs and the appeal
    costs. I am not satisfied that it would be appropriate to award security for
    costs in any event.

[5]

Accordingly, the motion is dismissed.

Background

[6]

This case arises out of a number of wind down agreements (WDAs")
    GM entered with 202 GM dealers, including Trillium, when GMs business was
    restructured in 2009. Pursuant to the WDAs, GM dealerships were closed and
    payments were made to the dealers in exchange for a full and final release of
    all claims against GM. Trillium received a wind down payment of $642,000. Over
    $123 million was paid to the other dealers.

[7]

In 2010, Trillium brought a class action against GM seeking over $800
    million in damages on behalf of all dealers who had signed WDAs with GM,
    claiming that GM had breached its common law obligations as well as its statutory
    obligations under the
Arthur Wishart Act (Franchise Disclosure), 2000
,
S.O. 2000, c. 3, and similar franchise
    legislation in other provinces. Trillium also claimed that Cassels Brock &
    Blackwell LLP, which was retained by some of the dealers, breached contractual
    and fiduciary duties to the dealers and was negligent in its provision of legal
    services.

[8]

GM counterclaimed against the class members for breaching the WDAs by
    bringing a class action and sought costs of the action against all class
    members and their respective principals personally.

[9]

The claim was certified as a class proceeding on March 1, 2011 and the
    counterclaim was certified on January 18, 2012. Following opt-outs, there are
    181 members of the class certified in Trilliums action against GM.

[10]

GM
    brought a motion for security for costs in 2012. The motion was settled by a
    consent order pursuant to which Trillium posted $500,000 in security for costs.
    The settlement was made without prejudice to GMs right to bring another motion
    for security for costs following the first round of examination for discovery,
    but no additional motion was brought.

[11]

Trilliums
    action against GM was dismissed following a 41-day trial before McEwen J., in a
    decision dated July 8, 2015. GMs counterclaim was also dismissed.

[12]

Trilliums
    action against Cassels Brock & Blackwell was successful and Trillium was
    awarded $45,000,000 in damages plus costs. That judgment, which is under
    appeal, is not relevant for purposes of this motion.

Trillium and its principal

[13]

Trillium
    operated a car dealership in Scarborough, Ontario from 1991 until 2009, when
    the business was wound up pursuant to the WDA it signed with GM.

[14]

It
    is common ground that Trillium is insolvent. Trillium owes: (1) approximately $3.5
    million to the Business Development Bank of Canada (BDC), which is its
    first-ranking secured creditor; (2) approximately $200,000 to Canada Revenue
    Agency; and (3) $135,000 to the Government of Ontario. BDC has given notice to
    GM that it claims any monies payable to Trillium arising out of the litigation.

[15]

The
    sole director, officer, and shareholder of Trillium is Thomas Hurdman. Mr.
    Hurdman is resident in the United States and it is common ground that he is
    insolvent. He owes approximately $1 million to BDC and approximately $625,000
    to a friend.

The authority to order security for costs

[16]

The
    courts jurisdiction to order security for costs flows from r. 61.06 of the
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194, which provides:

(1) In an appeal where it appears that,

(a)     there is good reason to believe that the appeal is
    frivolous and vexatious and that the appellant has insufficient assets in
    Ontario to pay the costs of the appeal;

(b)     an order for security for costs could be made against
    the appellant under rule 56.01; or

(c)     for other good reason, security for costs should be
    ordered,

a judge of the appellate court, on motion by the respondent,
    may make such order for security for costs of the proceeding and of the appeal
    as is just.

Rule 56.01, which is incorporated into r. 61.06(b),
    provides:

(1) The court, on motion by the defendant or respondent in a
    proceeding, may make such order for security for costs as is just where it
    appears that,

(a) the plaintiff or applicant is ordinarily resident outside
    Ontario;

(b) the plaintiff or applicant has another proceeding for the
    same relief pending in Ontario or elsewhere;

(c) the defendant or respondent has an order against the
    plaintiff or applicant for costs in the same or another proceeding that remain
    unpaid in whole or in part;

(d) the plaintiff or applicant is a corporation or a nominal
    plaintiff or applicant, and there is good reason to believe that the plaintiff
    or applicant has insufficient assets in Ontario to pay the costs of the defendant
    or respondent;

(e) there is good reason to believe that the action or
    application is frivolous and vexatious and that the plaintiff or applicant has
    insufficient assets in Ontario to pay the costs of the defendant or respondent;
    or

(f) a statute entitles the defendant or respondent to security
    for costs.

[17]

In
    short, provided the relevant criteria are satisfied, this court has the
    discretion to award security for costs, for the trial as well as the pending
    appeal, as it considers just.

The positions of the parties

GM

[18]

GM
    submits that it is entitled to an order for security for costs under r.
    61.06(1)(b), which provides that an order for security for costs may be made if
    it appears that such an order could be made under r. 56.01. GM submits that r.
    56.01(d) is the relevant provision: there is good reason to believe that
    Trillium has insufficient assets in Ontario to pay its costs. But, says GM,
    Trillium is not impecunious and it would not be unjust to require it to post
    security for costs.

[19]

GM
    contends that Trillium has failed to establish that it cannot borrow or
    otherwise raise the funds required to post security for costs from creditors,
    class members, or Mr. Hurdmans spouse. GM says that Trilliums creditors and
    class members stand to reap the rewards of the class action litigation, which
    is fronted by an insolvent company, and that they should bear the burden of adverse
    cost consequences by contributing security for costs. There is no evidence that
    they lack assets to so contribute, and no evidence that they were asked to
    contribute.

[20]

According
    to GM, if Trillium is not impecunious it must demonstrate that its appeal has a
    good chance of success, but it has not done so. GM submits that an appeal with
    a low prospect of success, coupled with an appellant from whom it would be
    nearly impossible to collect costs, constitutes a good reason to order security
    for costs under r. 61.06(c):
Henderson v. Wright
,
2016 ONCA 89, [2016] O.J. No. 533.

Trillium

[21]

Trillium
    submits that this court should exercise its discretion to dismiss the motion
    because of GMs delay in bringing it and the resulting prejudice. Trillium
    argues, further, that GM does not meet the requirements to be granted security
    for costs in any event.

[22]

Trillium
    submits that a motion seeking security for costs should be brought promptly,
    once the defendant learns of the plaintiffs inability to satisfy a costs
    award, and that in the absence of a reasonable explanation for delay it is
    unfair to award security for costs.

[23]

Trillium
    submits, further, that GMs delay in bringing this motion results in prejudice:
    (1) it lost the option of applying to the Class Proceedings Fund in advance of
    the trial; (2) its potential fundraising efforts have been hampered now that it
    has a judgment against it; and (3) it has incurred substantial costs in
    advancing the action and the appeal.

[24]

As
    to the merits of the motion, Trillium submits that an order for security for
    costs would be unjust because: (1) it is impecunious and its shareholder is
    unable to post security; (2) its appeal has a good chance of success; (3) GM
    caused it to lose its business; and (4) GMs counterclaim is for the same costs
    for which it seeks security on the motion.

Analysis

[25]

I
    deal first with the timeliness of GMs motion, which is determinative of the
    outcome. It is convenient to address the trial and appeal costs separately.

Trial costs

[26]

I
    decline to award security for costs for the trial because of GMs delay and the
    prejudice it has caused Trillium.

[27]

From
    the outset, it was understood by all involved that this was complex litigation
    that would be both time consuming and expensive. Trilliums ability to pay
    costs was an issue early in the proceedings. On September 8, 2011, GM requested
    particulars as to Trilliums assets. It queried whether Trillium was a shell
    corporation and asserted that it was not a suitable representative plaintiff if
    it was. GM asked for: (1) confirmation that no insolvency proceedings had been
    commenced by or against Trillium; (2) particulars of its assets in Ontario;
    and/or (3) confirmation that Trillium would move to add new or additional
    representative plaintiffs that could satisfy an adverse costs award. GM stated
    that it if it did not receive satisfactory assurances it would bring an appropriate
    motion.

[28]

Trillium
    replied on September 19, 2011 that it was out of business, but that no
    insolvency proceedings had been commenced by or against it. Trillium noted that
    GM had not challenged Trilliums suitability as a class representative on this
    or any other basis, and asked for confirmation of GMs instructions concerning
    the bringing of a motion prior to a case conference scheduled for September 28,
    2011.

[29]

At
    the case conference, GM advised that it would be seeking security for costs
    from Trillium if the action proceeded.

[30]

Following
    dismissal of GMs appeal from the decision certifying the class proceedings
    against it on March 26, 2012, GM requested information from Trillium concerning
    any indemnification agreement it had concerning costs, and was informed that there
    was no such agreement.

[31]

Although
    GM brought a motion for security for costs in 2012, that motion resulted in a
    consent order dated July 19, 2012 requiring Trillium to pay only $500,000 in
    security for costs up to the conclusion of the first round of examinations for
    discovery. GM had the right to bring a further motion seeking security for
    costs following the first round of discovery, and contemplated doing so; it
    raised the matter in an email to Trillium dated June 13, 2014. However, on June
    16, 2014 Trillium refused to pay further security for costs voluntarily and
    said that it would oppose any motion for security for costs. GM did not bring a
    motion for security costs until now  over two years later, well after the
    trial was completed.

[32]

GM
    has known that it was defending a complicated class action against an insolvent
    representative plaintiff since at least 2012. This is clear from the notice of
    motion it brought for security for costs in 2012, in which GM made the
    following statements: (1) Trillium no longer carries on business in Ontario, or
    at all; (2) its controlling shareholder and directing mind, Mr. Hurdman resides
    in the United States; (3) no one has agreed to indemnify Trillium against any
    costs awards; (4) Trillium has not applied to the Class Proceedings Fund; (5) none
    of the members of the class were willing to be added or substituted as
    representative plaintiffs; and (6) Trillium has insufficient assets to pay GMs
    costs. GM stated specifically:

If security for costs is not granted, GMCL will be required to
    defend this very large commercial case with effectively no potential to recover
    costs awarded in its favour if it is successful.

[33]

Yet,
    GM took no action. It neither moved to have Trillium replaced as representative
    plaintiff nor to have Trillium post security for costs. Instead, it defended
    the action aggressively and ran up enormous costs in doing so, costs that are
    only partly offset by the approximately $5.5 million costs award the trial
    judge made in its favour.

[34]

GMs
    decision not to bring a motion for security for costs was made for tactical
    reasons. At the hearing of the motion, GM stated candidly that it did not bring
    a motion earlier because it was not willing to expose its people to
    cross-examination. That was GMs choice, and GM must bear the burden of that
    choice. It would be inappropriate for this court to relieve GM of the
    consequences of its tactical decisions.

[35]

GMs
    decision not to seek security for costs prior to the end of the trial results
    in prejudice to Trillium in at least two ways. First, it is too late for
    Trillium to seek funding from the Class Proceedings Fund, now that its claim
    has been dismissed. At the hearing of the motion, GM argued that Trillium had
    no intention of applying for funding, not least because it would have had to
    give up 10% of any damages it received in exchange for funding. But Trillium
    need not establish that it would have applied for funding in order to establish
    prejudice. It is enough that Trillium lost the option of applying for funding
    as a result of GMs decision. Second, Trilliums ability to fundraise from
    class members to contribute to its costs has been compromised; it is obviously
    more difficult to fundraise in light of the dismissal of the action than it
    would have been before the action was heard.

[36]

For
    these reasons, I decline to award security for costs for the trial.

Appeal costs

[37]

I
    decline to award security for costs for the appeal, again because of GMs delay
    and the prejudice it has caused.

[38]

Trilliums
    claim and GMs counterclaim were dismissed by the trial judge on July 8, 2015.
    Trillium filed a notice of appeal on
August 7,
    2015
and GM filed notice of its cross-appeal on
August 20, 2015.

[39]

At
    the parties request, this court has provided case management from the outset.
    Security for costs was discussed by the parties but nothing was agreed and, for
    whatever reason, GM chose not to bring a motion for security for costs.
    Trillium proceeded to perfect its appeal in accordance with the time limits set
    by the case management judge on consent of the parties  that is, some ten
    months following service of its notice of appeal.

[40]

It
    is important to note that nothing had changed during this period. GM knew that
    Trillium was insolvent prior to the trial. Once Trillium gave notice that it
    was appealing, GM knew that it would incur substantial additional costs that it
    would not be able to recoup if it were successful on the appeal.

[41]

GM
    says that it could not bring a motion for security for costs until it received
    the trial judges costs order on March 22, 2016. I do not accept this. It was
    open to GM to bring a motion before it received the costs order, just as it was
    open to GM to bring a motion after March 22, 2016 and prior to perfection of Trilliums
    appeal in June. GM offers no explanation for its delay in this period, other
    than suggesting that it was acting out of courtesy to counsel, and that it did
    not want to pile on.

[42]

GM
    has, by its actions, allowed Trillium to perfect its appeal at great expense.
    This is no small matter. The complicated nature of the appeal is evidenced by
    the length of the factum filed by Trillium, which runs over 90 pages, and the
    supporting materials that have been prepared and filed. It would not be just to
    make an order for security for costs at this late stage.

[43]

It
    is possible, of course, to order security for costs from perfection onward, as
    Trillium submitted, but GM has already served and filed its responding
    materials. In the circumstances, the only costs still to be incurred by GM
    would be for preparation of the argument and for the appearance of counsel on
    the appeal. This is such a small amount as to be insignificant in the context
    of this litigation. GM did not seek security for these costs and I do not order
    them.

Is security for costs appropriate in any event?

[44]

Given
    the way in which this motion was argued, it is appropriate to note that even if
    I concluded that GMs application had been made in a timely fashion, I am not
    satisfied that this would have been an appropriate case for security for costs
    in any event.

[45]

GM
    argued that Trillium is not impecunious because its creditors as well as the members
    of the class have significant assets, and there is no evidence that either have
    been asked to provide security.

[46]

Although
    there is authority to support the argument that creditors who stand to benefit
    from litigation may be required to fund it, there is no indication that any of
    Trilliums creditors motivated or directed the litigation such that their
    assets should be taken into account in determining whether Trillium is
    impecunious: see e.g.
Intellibox Concepts Inc. v. Intermec Technologies
    Canada Ltd.
[2002] O.J. No 3876(S.C.);
United General Contracting Ltd.
    v. Sioux Lookout (Municipality)
, 2012 ONSC 542.

[47]

As
    for the class members, GM provided no authority for the proposition that the
    ability of class members to contribute to security for costs is a relevant
    consideration in making such an order against a representative plaintiff. GM
    submitted that that this was an unusual case that would not set a precedent
    because the members of the class are well known and have financed the
    litigation from the outset. In these circumstances, GM says, they are active
    participants in the litigation and their assets can properly be taken into
    account in making an order for security for costs against Trillium.

[48]

It
    is enough to note my concern that such an order might undermine the concept of
    a class proceeding, one of the premises of which is that class members have no
    liability for costs, except with respect to the determination of their own
    individual claims: s. 31(2) of the
Class Proceedings Act
, 1992
,
    S.O. 1992, c. 6. Whether it is a corollary of this statutory protection that
    the assets of class members are not relevant in determining the ability of a
    representative plaintiff to provide security for costs can be left for another
    day.

Disposition

[49]

The
    motion is dismissed. By agreement of the parties there is no order as to costs.

Grant Huscroft J.A.