COURT OF APPEAL FOR ONTARIO

CITATION: Montor Business Corporation v. Goldfinger, 2016
    ONCA 407

DATE: 20160530

DOCKET: C57898

Cronk, Pepall and Lauwers JJ.A.

In the Matter of the Bankruptcy
    of Summit Glen Waterloo/2000 Developments Inc., of the City of Toronto, in the
    Province of Ontario

BETWEEN

A.

Farber & Partners
    Inc., the Trustee of the Bankruptcy Estate of

Montor Business
    Corporation, Annopol Holdings Limited and

Summit Glen Brantford
    Holdings Inc.

Applicant (Appellant/

Respondent by way of
    cross-appeal)

and

Morris
    Goldfinger, Goldfinger Jazrawy Diagnostic Services Ltd.,

Summit
    Glen Bridge Street Inc., Mahvash Lechcier-Kimel,

Annopol
    Holdings Limited and Summit Glen Brantford Inc.

Respondents

Patrick Shea and Brent Arnold, for the appellant/respondent
    by way of cross-appeal

Maurice J. Neirinck and Michael McQuade, for the
    respondent/appellant by way of cross-appeal 1830994 Ontario Ltd.

Heard: October 14 and 15, 2015

On appeal from the judgment of Justice David M. Brown of
    the Superior Court of Justice, dated October 28, 2013, with reasons reported at
    2013 ONSC 6635, 8 C.B.R. (6th) 200.

Pepall J.A.:

Introduction

[1]

This is the second of three companion appeals, the other appeals bearing
    file numbers C57879 and C58356. This courts decisions in the three appeals are
    being released contemporaneously. The background to the three appeals is
    described in detail in this courts reasons in C57879.

[2]

On December 1, 2008, Summit Glen Waterloo/2000 Developments Inc. (SG Waterloo)
    was placed in receivership and on June 28, 2010, it was adjudged bankrupt. A.
    Farber & Partners Inc. (Farber) was appointed as Trustee in bankruptcy of
    SG Waterloo. The principal of SG Waterloo was Jack Lechcier-Kimel.

[3]

SG Waterloo owned property located at 105 University Avenue, Waterloo.
    It was sold by Farber on November 22, 2010, and the proceeds were paid into
    court pending the disposition of this litigation.

[4]

1830994 Ontario Ltd. (183), a company incorporated, owned, and
    controlled by Dr. Morris Goldfinger, asserted claims in SG Waterloos
    bankruptcy proceedings. The Trustee objected. 183 and Goldfinger then brought a
    motion seeking to have 183s claims against SG Waterloo valued under s. 135 of
    the
Bankruptcy and Insolvency Act
, R.S.C. 1985, c. B.3, and to require
    that SG Waterloos estate satisfy those claims. The trial judge decided that
    the claims should be addressed in a hybrid trial together with the subject
    matter of Court File Nos. C58356 and C57879.

[5]

In this appeal, Farber appeals from the trial judges allowance of the claims
    made by 183. It appeals in its capacity as Trustee in bankruptcy of Annopol
    Holdings Limited, Montor Business Corporation and Summit Glen Group of
    Companies Inc. Its primary submission is that 183s claims were caught by the
    terms of a full and final release Goldfinger and Kimel signed in 2009.

[6]

For the reasons that follow, I would allow the appeal.

Background

[7]

In 2001, SG Waterloo granted two charges over 105 University Avenue to
    the Community Trust Company (CTC). The first charge secured $50,000 that SG
    Waterloo borrowed from CTC. The second charge, in the amount of $500,000,
    secured guarantees provided by SG Waterloo in support of two promissory notes
    in favour of CTC. Each of these promissory notes was in the amount of $250,000
     one from Goldfinger and one from Kimel. Goldfinger and Kimel also each
    guaranteed the others borrowing from CTC. Most of the money from the CTC
    financing went to SG Waterloo.

[8]

On December 1, 2008, at Goldfingers request, Zeifman & Partners
    Inc. was appointed interim receiver over SG Waterloo and other Kimel companies.
    The appointment order was followed by defaults in payment on the CTC loans by SG
    Waterloo, Goldfinger and Kimel.

[9]

CTC then commenced an action against Goldfinger and Kimel on the
    $250,000 personal loans and a separate action against SG Waterloo. It obtained
    default judgment against SG Waterloo on May 22, 2009 in the amount of $573,506.
    It also obtained default judgment against Kimel, but not against Goldfinger,
    who defended and asserted a counterclaim against CTC. Goldfinger and Kimel also
    cross-claimed against each other.

[10]

CTC commenced its action against SG Waterloo and obtained judgment notwithstanding
    the stay of proceedings imposed by the receivership order and without having
    obtained leave of the court.

[11]

On December 16, 2009, Goldfinger, Kimel, Mahvash (Kimels then-wife) and
    a number of Kimels companies, including SG Waterloo, entered into a settlement
    agreement to settle an action Goldfinger brought after he determined that Kimel
    had breached their First Settlement (discussed in detail in C57879) (the 2009
    Settlement). In the 2009 Settlement, Goldfinger was referred to as the Plaintiff
    and Kimel and his companies, including SG Waterloo, were the Defendants.

[12]

As part of the 2009 Settlement, the parties agreed to enter into a mutual
    release (the Release). Paragraph 14 of the 2009 Settlement stated that:

The parties agree that the aforementioned releases are intended
    to release the Plaintiff and the Defendants from any claims they may have
    between each other arising from Community Trust Companys action against [Kimel]
    and [Goldfinger] (Hamilton Court file #09-8872) and also from any claims
    relating to any possible flow of funds out of the defendant companies.

[13]

Paragraph 20 of the 2009 Settlement provided, in part, that:

Nothing in this agreement or in the release shall restrict the
    Plaintiffs ability to attempt to recover proceeds from sale of properties that
    were the subject of the receivership, to the extent that these proceeds are
    presently held by the Receiver and relate to properties sold prior to the
    execution of these Minutes of Settlement.

[14]

The Release was entitled Full and Final Mutual Release and stated:

IN CONSIDERATION
of the payment to Morris Goldfinger,
    of the sum of $2.00 of lawful money of Canada and for other good and valuable
    consideration, the receipt and sufficiency of which is hereby acknowledged the
    undersigned,

MORRIS GOLDFINGER

On behalf of and including himself, his heirs, administrators,
    executors, assigns,
successors corporations under his control and on behalf
    of any party or parties who claim a right or interest through him
,

(hereinafter referred to as Goldfinger)

and

JACK LECHCIER-KIMEL SUMMIT GLEN TRAYVAN HOLDINGS INC.,
    SUMMIT GLEN WATERLOO/2000 DEVELOPMENTS INC., SUMMIT GLEN BRANTFORD HOLDINGS
    INC., RALEIGH STREET INVESTMENTS INC., SUMMIT GLEN BRIDGE STREET INC., SUMMIT
    GLEN FAIRWAY HOLDINGS INC., ANNOPOL HOLDINGS LTD. and MAHVASH LECHCIER KIMEL

on behalf of and including themselves, their heirs,
    administrators, executors, assigns,
successors, corporations under their
    control (including Summit Glen Group of Companies Inc., Summit Glen Cambridge
    Holdings Inc., Summit Glen (SH) Inc., Summit Glen Woolwich Holdings Inc.,
    Summit Glen Developments Inc. and Bridge Darling Brantford Holdings Inc.), and
    on behalf of any party or parties who claim a right or interest through them

(hereinafter collectively referred to as the Kimel Parties)

SAVE AND EXCEPT AS NOTED BELOW, HEREBY RELEASE, ACQUIT AND
    FOREVER DISCHARGE, EACH OTHER WITHOUT QUALIFICATION OR LIMITATION:

from all manner of actions, causes of action, suits, debts,
    dues, accounts, bonds, covenants, contract, complaints, claims and demands for
    damages, monies, losses, indemnity, costs, interest in loss, or injuries
    howsoever arising which hereto may have been or may hereafter be sustained by
    Goldfinger or the Kimel Parties directly, or indirectly, as a consequence of
    any agreement between the parties and from any and all actions, causes of
    action, claims or demands of whatsoever nature, whether in contract or in tort
    or arising as a result of a fiduciary duty or by virtue of any statute or upon
    or by reason of any damage, loss or injury arising out of the matters set forth
    above and, without limiting the generality of the foregoing, from any and all
    matters that were pleaded in, or could have been pleaded, in Ontario Superior
    Court of Ontario Action 00007823-00CL (herein referred to as the Action).

WITHOUT LIMITING THE GENERALITY OF THE FOREGOING
,
    the parties hereto declare that the intent of this Full and Final Mutual
    Release subject to the specific exclusions set out herein, is to conclude all
    issues arising from the matters set forth above and from the Action and it is
    understood and agreed that this Release is intended to cover, and does cover,
    not only all known injuries, losses and damages, but also injuries, losses and
    damages not now known or anticipated but which may later develop or be
    discovered, including all the effects and consequences thereof.

AND FOR THE SAID CONSIDERATION
it is agreed and understood that Goldfinger and the
    Kimel Parties will not make any claim or take any proceedings against any other
    person or corporation who might claim, in any manner or forum, contribution or
    indemnity in common law or in equity, or under the provisions of any statute or
    regulation  from each of Goldfinger and The Kimel Parties discharged by this
    Full and Final Mutual Release, in connection with the matters outlined above
    and in the Action.   IT IS AGREED AND UNDERSTOOD that if either Goldfinger and
    the Kimel Parties commences such an action, or takes such proceedings, and
    Goldfinger and the Kimel Parties (or any of them) are added to such proceeding
    in any manner whatsoever, whether justified in law or not, Goldfinger and the
    Kimel Parties will immediately discontinue the proceedings and/or claims, and
    Goldfinger and the Kimel Parties will be liable to each of them for the legal
    costs incurred in any such proceeding, on a solicitor and his own client scale.
    This Full and Final Release shall operate conclusively as an estoppel in the
    event of any claim, action, complaint or proceeding which might be brought in
    the future by Goldfinger or the Kimel Parties with respect to the matters
    covered by this Full and Final Mutual Release. This Full and Final Mutual
    Release may be pleaded in the event any such claim, action, complaint or
    proceeding is brought, as a complete defence and reply, and may be relied upon
    in any proceeding to dismiss the claim, action, complaint or proceeding on a
    summary basis and no objection will be raised by Goldfinger and the Kimel
    Parties in any subsequent action that the other parties in the subsequent
    action were not privy to formation of this Release.
[Underlining
    added; all caps and bold in original.]
[1]

[15]

After entering into the 2009 Settlement, Goldfinger negotiated a
    settlement of CTCs action against him. On July 27, 2010, Goldfinger
    incorporated 183. The invoice to Goldfinger from his lawyer refers to 183 as a
    nominee company.

[16]

On August 4, 2010, CTC assigned its two charges on SG Waterloos
    property and the default judgment to 183 for valuable consideration. While
    Farber disputes the precise amount Goldfinger claims to have paid CTC, nothing
    turns on the difference for the purposes of my analysis.

[17]

In summary, Goldfinger incorporated 183 and had 183 purchase the
    assignments from CTC. As a result, 183 became a creditor of Goldfinger, and of
    SG Waterloo and Kimel as well. As Farber put it, at para. 26 of its factum:

It is unusual to have a debtor who is financially able to pay
    his debts (Goldfinger): (a) incorporate a nominee company (183); (b) pay the
    amount owing to the creditor (CTC) to have that nominee company take an
    assignment of a guarantee rather than pay the debt; and (c) cause the nominee
    company to pursue a surety (SG [Waterloo]) to recover under a guarantee.

[18]

Subsequent to the assignment of the charges to 183, SG Waterloo was
    adjudged bankrupt. 183 filed a proof of claim in SG Waterloos bankruptcy. It
    was dated September 17, 2010 and claimed $765,792.38, which reflected the two
    charges.

Trial Judges Decision

[19]

The trial judge allowed 183s claim, as assignee, for the principal
    amount of CTCs $50,000 charge, together with interest until the date of
    payment, along with $450 representing NSF and charge renewal fees. He allowed
    183s claim in respect of CTCs $500,000 charge with interest until the date of
    payment.

[20]

In reaching his conclusion on the $50,000 and $500,000 principal claims,
    the trial judge rejected Farbers submission that the Release applied to bar
    183s claims as assignee. He gave four reasons. First, the trial judge held
    that, while the Release included in its definition of Goldfinger any
    successors [
sic
] corporations under his control, that term, when read
    in the context of the entire definition, referred to any successor corporation
    that claimed a right or interest
through him
 in respect of the matters
    released (trial judges emphasis). He held that 183 took assignments of the CTC
    charges in its own right and was not claiming a right or interest through
    Goldfinger. Second, the assignments were made well after Goldfinger and the
    Kimel Parties had entered into the Release. Third, they were made for valuable
    consideration given at the time of the assignments. Finally, the assignment of
    the charges was not captured by the matters released. The Release described
    these as matters:

[W]hich hereto may have been or may hereafter be sustained by
    Goldfinger or the Kimel Parties directly, or indirectly, as a consequence of
    any agreement between the parties and from any and all actions, causes of
    action, claims or demands of whatsoever nature, whether in contract or in tort
    or arising as a result of a fiduciary duty or by virtue of any statute.

Farbers Appeal

[21]

Farber appeals from this decision. It advances numerous grounds of
    appeal, the first of which is that the trial judge erred in concluding that the
    Release did not extinguish 183s claims. Farber acknowledges that if this court
    finds in its favour on this ground of appeal, there is no need to address the
    remaining grounds. I agree and given my conclusion, I will simply address the
    issue of the Release.

Parties Positions

(a)

Farber

[22]

Farber argues that the trial judge did not give effect to the purpose of
    the Release, which was to end all disputes relating to the sale proceeds from 105
    University Avenue and to CTCs action. The definition of Goldfinger in the Release
    should have been interpreted so as to bar claims by any corporations under
    Goldfingers control, including 183. It spoke of Goldfinger as including successors
    corporations under his control and on behalf of any party or parties who claim
    a right or interest through him. Farber submits that the trial judge should
    have read a comma into this definition between the words successors and
    corporations; instead, he read out the s in successor.

[23]

Farber goes on to argue that even if the Release did not apply to 183,
    the trial judge should have looked through 183 to Goldfinger. 183 was
    incorporated only to get around the Release, an improper purpose that justifies
    ignoring its separate identity.

[24]

In addition, Farber submits that the Release applies to subsequent
    claims and the trial judge improperly narrowed the scope of the Release. When
    properly interpreted, 183s claims fall squarely within the terms of the Release.
    The fact that 183 paid value for the assignment was irrelevant.

(b)

183

[25]

183 responds by submitting that it was not a party to the Release and
    was not even incorporated when the Release was entered into. The Release was
    restricted to certain matters that did not extend to 183 or to the secured
    claims of 183 based on the assignments from CTC.

Analysis

[26]

The first issue to consider is the applicable standard of review. The
    Supreme Court has held that contractual interpretation involves questions of
    mixed fact and law, and as such, should be reviewed for palpable and overriding
    error:
Sattva Capital Corp. v. Creston Moly Corp.
, 2014 SCC 53, [2014] 2
    S.C.R. 633, at para. 50;
Heritage Capital Corp. v. Equitable Trust Co.
,
    2016 SCC 19, 2016 S.C.J. No. 19, at para. 21.

[27]

However, the Supreme Court recognized that it may be possible to
    identify an extricable question of law, which would be reviewed on a
    correctness standard:
Sattva
, at para. 53.

The Court went on to
    state that appellate courts should be cautious about identifying extricable
    questions of law when engaged in a review of contractual interpretation.

[28]

Extricable questions of law include legal errors involving the
    application of an incorrect principle, the failure to consider a required
    element of a legal test, or the failure to consider a relevant factor:
Sattva
,
    at para. 53.

[29]

Here, the language and wording of the Release had to be reviewed,
    construed, and assigned meaning. The Release had to be considered as a whole:
Deslaurier
    Custom Cabinets Inc. v. 1728106 Ontario Inc.
, 2016 ONCA 246, [2016] O.J.
    No. 1705, at paras. 31, 54 and 59. Such an exercise or review is not evident from
    the reasons advanced by the trial judge for rejecting Farbers position. This was
    in error. When considered as a whole, the Release applies to companies
    controlled by Goldfinger, including 183, and to the subject matter of 183s
    claims.

[30]

The Release defined the releasor, Goldfinger, as: [O]n behalf of and
    including himself, his heirs, administrators, executors, assigns,
successors corporations under his control
and
on
    behalf of any party or parties who claim a right or interest through him (emphasis
    added).

[31]

The Release went on to define Kimel, his companies and wife. The
    definition of those parties stated: [O]n behalf of and including themselves,
    their heirs, administrators, executors, assigns,
successors,
    corporations under their control (including), and
on behalf of any party or parties who claim a
    right or interest through them
 (emphasis added). The only
    material differences between these definitions is that there is no comma
    separating the words successors and corporations in the Goldfinger
    definition and no comma preceding the words and on behalf of any party or
    parties who claim a right or interest; there are commas between these words in
    the Kimel definition. Arguably, this was no more than a drafting error.

[32]

The trial judge had to give effect to all of the words of the Release,
    which he did not do. If one considers all of the words of the Release, certain
    conclusions are manifest:

(i)    The definition of Goldfinger
    is ambiguous.

(ii)   The definition
    of Kimel Parties in the Release provides a guide to interpretation of the
    definition of Goldfinger, and makes both grammatical and commercial sense.

(iii)   Read
    as a whole, it is an error to read out the s in the word successors and to
    exclude commas after the words successors and control.

(iv)   The definition
    of Goldfinger is not limited to successor corporations who claim a right or
    interest through Goldfinger.

(v)   The
    construction of the definition, in the context of the Release read as a whole, should
    state: successors
,
corporations under his control
, and
on behalf
    of any party or parties who claim a right or interest through him (emphasis
    added).

[33]

183 concedes that it is a company under Goldfingers control. When
    properly construed, 183 was captured by the definition of the parties
    encompassed by the Release.

[34]

This result also makes practical and commercial sense. It would be bizarre
    if a person could circumvent the ambit of a release simply by establishing a
    nominee company in his or her stead. It is also consistent with the purpose
    underlying the 2009 Settlement, which was to bring an end to the underlying
    litigation and the relationship between Goldfinger and Kimel.

[35]

It is noteworthy, by way of comparison, that paragraph 21 of the 2009
    Settlement expressly states that nothing prevents Goldfinger from pursuing his
    dispute with another third party, HSBC. In contrast, the 2009 Settlement does
    not specifically exclude the CTC dispute.

[36]

Second, turning to the subject matter of the Release, the parties to the
    2009 Settlement (and such parties should be read to include 183) gave up their
    claims to proceeds generated by SG Waterloo.

[37]

Again, to repeat, paragraph 14 of the 2009 Settlement stated:

The parties agree that the aforementioned releases are intended
    to release the Plaintiff and the Defendants from any claims they may have
    between each other arising from Community Trust Companys action against Jack
    Lechcier-Kimel and Morris Goldfinger (Hamilton Court file #09-8872) and also
    from any claims relating to any possible flow of funds out of the defendant
    companies.

[38]

In addition, paragraph 17 provided:

The Plaintiff will refrain from providing cooperation to any
    creditor or potential creditor of the defendants, directly or indirectly with
    respect to any proceedings against the defendants, except to the extent
    required by law.

[39]

As mentioned, the Plaintiff is defined as Goldfinger and the Defendants
    include SG Waterloo.

[40]

Furthermore, paragraph 20, quoted above, expressly permitted Goldfinger
    to attempt to recover proceeds from the sale of properties sold prior to the
    execution of the 2009 Settlement. As I have said, 105 University was sold on
    November 22, 2010, eleven months after the date of the 2009 Settlement.

[41]

Goldfinger described the 2009 Settlement as being comprehensive and he
    entered it to minimize significant legal costs and losses. He stated he made a
    compromise as he was entitled to no further repayment of the debt that was owed
    to him. He also stated that he had lost his desire to litigate as a result of
    his family circumstances.

[42]

These surrounding circumstances lend support to the conclusion that the
    2009 Settlement, including the mutual Release, was designed to result in
    finality and to release any future claim Goldfinger, and by extension 183, had
    against SG Waterloo. In return, Goldfinger accepted $5 million that was secured
    against property located on Park Lane in Toronto and owned by Kimels wife.
[2]

[43]

The Release was drafted in the broadest of language and applies to:

[A]ll manner of actions, causes of action, suits, debts, dues,
    accounts, bonds, covenants, contract, complaints, claims and demands for
    damages, monies, losses, indemnity, costs, interest in loss or injuries
    howsoever arising which hereto may have been or may hereafter be sustained by
    Goldfinger or the Kimel Parties directly, or indirectly, as a consequence of
    any agreement between the parties and from any and all actions, causes of
    action, claims or demands of whatsoever nature, whether in contract or in tort
    or arising as a result of a fiduciary duty or by virtue of any statute or upon
    or by reason of any damage, loss or injury arising out of the matters set forth
    above and, without limiting the generality of the foregoing, from any and all
    matters that were pleaded in, or could have been pleaded, in Ontario Superior
    Court of Ontario Action 00007823-00CL (herein referred to as the Action).

[44]

The matters set forth above could only refer to the broad language
    which preceded that statement.

[45]

In addition, later the Release stated:

WITHOUT LIMITING THE GENERALITY OF THE FOREGOING
,
    the parties hereto declare that the intent of this Full and Final Mutual
    Release subject to the specific exclusions set out herein, is to conclude all
    issues arising from the matters set forth above and from the Action and it is
    understood and agreed that this Release is intended to cover, and does cover,
    not only all known injuries, losses and damages, but also injuries, losses and
    damages not now known or anticipated but which may later develop or be discovered,
    including all the effects and consequences thereof.

[46]

It also provided that Goldfinger and the Kimel Parties would not make
    any claim or take any proceedings against another person or corporation who
    might claim against either of them.

[47]

In summary, the Release included 183, and SG Waterloo was a beneficiary
    of the Release. Under the 2009 Settlement, Goldfinger had both released SG Waterloo
    and given up any claim to the proceeds from the sale of 105 University Avenue. It
    is not now open to him, through the guise of 183, to circumvent those
    commitments. The fact that he paid CTC in part to avoid personal liability
    should not now enable him to recoup that amount from a source he covenanted to
    release.

[48]

In my view, the trial judge erred in not considering the entire contract
    when interpreting its proper meaning and scope. Had he done so, he would have
    reached a different conclusion.

[49]

In light of this determination, there is no need to consider the
    remaining grounds of appeal.

Disposition

[50]

For these reasons, the appeal is allowed and the October 28, 2013 judgment
    is varied to delete paragraphs 8 and 9, and to substitute the following:

8. THIS COURT ORDERS
that the secured claim of 1830994
    Ontario Limited (183 Ontario) against SGW in respect of the Community Trust
    Company (CTC) $50,000.00 Charge is disallowed.

9. THIS COURT ORDERS
that the secured claim of 183
    Ontario against SGW in respect of the CTC $500,000.00 Charge is disallowed.

[51]

As agreed by the parties, I would order 183 to pay Farber $25,000 for
    the costs of this appeal, inclusive of disbursements and HST.

Released:

MAY 30 2016                                              S.E.
    Pepall J.A.

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

I
    agree P. Lauwers J.A.

[1]
The Release contained apparent typographical errors which have not been
    corrected in these reasons.

[2]
Kimel and his wife, Mahvash, separated in January 2009 and divorced in November
    2010. Mahvash married Goldfinger shortly thereafter, on November 18, 2010.


COURT OF APPEAL FOR ONTARIO

CITATION: National Refrigerator & Air Conditioning Canada
    Corp. v. Celadon Group Inc., 2016 ONCA 339

DATE: 20160505

DOCKET: C60833

Sharpe, LaForme and van Rensburg JJ.A.

BETWEEN

National Refrigeration & Air Conditioning
    Canada Corp.

Plaintiff (Respondent)

and

Celadon
    Group Inc., Celadon Canada Inc. and Celadon Trucking
    Services Inc.

Defendants (Appellants)

Rui Fernandes and David Huard, for the appellants

Philip Cho, for the respondent

Heard: April 20, 2016

On appeal from the judgment of Justice Sandra Chapnik of
    the Superior Court of Justice, dated July 20, 2015.

By the Court:

[1]

National Refrigeration & Air Conditioning Canada Corp. is a
    manufacturer of commercial refrigeration products. In October and November
    2011, National hired Celadon Group Inc., Celadon Canada Inc., and Celadon Trucking
    Services Inc. (collectively Celadon) to transport two shipments of copper
    tubing from Mexico to Ontario. Both shipments were hijacked in Mexico and never
    recovered. National submitted a claim for loss and damage for US$122,228.46 and
    US$98,700.52 respectively. Celadon denied both claims relying on exclusion of
    liability clauses contained in Celadons Rules and Regulations and posted on Celadons
    website. National commenced an action to recover damages.

[2]

After a three-day trial, the trial judge found that Celadon could not
    rely on the exclusionary terms, not having notified National of those terms,
    and, that in any event, the exclusionary terms were unconscionable.  She also
    found that the value of the goods had been declared on the commercial invoice
    contained in the shipping documents and that those documents formed part of the
    contract of carriage. Consequently, Celadon could not rely on the statutory
    limitation of liability to $4.41 per kilogram pursuant to
Carriage of Goods
,
    O. Reg. 643/05 under the
Highway Traffic Act
, R.S.O. 1990, c. H.8.

[3]

The trial judge also found that independent of the carriage agreement,
    Celadon was liable in negligence. This was because Celadon had specific
    knowledge about the enhanced risk of hijacking in Mexico that gave rise to a
    duty to warn National of the increased danger.

(1)

Exclusion of liability

[4]

The central issue on appeal is whether the exclusion of liability clauses
    contained in Celadons Rules and Regulations posted on Celadons website apply
    to the shipments in question.

[5]

Celadon argues that the trial judge erred by rejecting Celadons
    submission that liability was excluded by standard term 490: For shipments out
    of Mexico, Celadons liability begins when our trailer is delivered to the Celadon
    facility in the U.S. Mexican cargo insurance is available from customs broker.
    Celadon also relies on term 115, a provision stating [c]arrier is not liable
    for loss or damage occurring in Mexico and liability for Mexican carrier is
    limited.

[6]

The trial judge found that the exclusionary terms did not form part of
    the carriage agreement because they were not brought to Nationals attention
    and further found that term 490 was ambiguous and did not apply in this case.

[7]

The applicability of the exclusionary terms is a question of mixed fact
    and law that attracts deference on appeal. We do not agree with Celadons
    contention that the trial judge erred by failing to take into account the
    entire factual matrix concerning the applicability of any limitation of
    liability.

[8]

We need only deal with the issue whether the exclusionary clauses were
    brought to Nationals attention so as to form part of the parties agreement.

[9]

As the trial judge noted, the parties had previously contracted for the
    shipment of goods and, on those occasions, National was provided with a Rate
    Notification Agreement (RNA) containing the same exclusion of liability term.
    However, those shipments involved transportation from Canada to Mexico, not
    from Mexico to Canada, and by the time of the October and November 2011 shipments,
    the RNA had changed and no longer contained the exclusion of liability clause.

[10]

Contrary to Celadons submission, the trial judge did take into account
    the e-mail sent by Celadon to National confirming the contract of carriage and
    stating Please note that these rates do not include fuel and are subject to
    current rules and accessorials. Nationals employee responsible for taking the
    arrangements testified that he was not provided with copies of the terms relied
    on by Celadon and that there was no discussion, either in writing or orally,
    about limiting liability when transporting goods from Mexico.

[11]

Relying on the decision of this court in
Trigg v. MI Movers
    International Transport Services Ltd.
(1991), 4 O.R. (3d) 562 (C.A.), at
    p. 565, leave to appeal  refused, [1992] 1 S.C.R. ix (S.C.C.), the trial judge found
    the following, at para. 55 of her reasons:

[T]he clauses in question were not brought to [Nationals]
    attention at the time that the agreement for shipment was reached with respect
    to the October or November shipments. [National] cannot be said to have
    assented to the inclusion of the exclusion of liability clause in the parties
    contract.

[12]

In our view, that finding was not tainted by legal error and was
    clearly supported by the record. We see no basis for appellate intervention.

(2)

Notice following the first shipment

[13]

Celadon submits that National had sufficient notice of the exclusionary
    clause following the first shipment in October 2011 because of Celadons
    response to Nationals claim for the value of the goods lost on that shipment.

[14]

We disagree.

[15]

Celadons employees rejection of the claim was equivocal at best: I
    have not thoroughly reviewed the contract but would guess that Celadon has no
    liability if this was stolen in Mexico. I certainly will double check that and
    advise. National was not advised that its claim was rejected prior to the
    November 2011 shipment.

[16]

We see no reason to interfere with the trial judges conclusion that
    this response was insufficient to bring the exclusionary clause to the
    attention of National for the purpose of the second shipment. Moreover, the
    fact that Celadons representative himself was uncertain about the status of
    the claim supports the trial judges finding on the first issue, namely, that
    the documents relied on by Celadon failed to bring to National's attention the
    exclusion of liability clause.

(3)

Statutory limitation of liability

[17]

Celadon submits that, in the alternative, even if the exclusion of
    liability clause does not apply, liability is limited by s. 9 of Schedule 1 of
    Ontario Regulation 643/05 because the contract is governed by Ontario law.
    Section 9 provides that carrier liability is limited to $4.41 per kilogram
    unless s. 10 is satisfied. Section 10 provides the following:

If the consignor has declared a value of the goods on the face
    of the contract of carriage, the amount of any loss or damage for which the
    carrier is liable shall not exceed the declared value.

[18]

There was no declared value on the bill of lading. The trial judge found
    that as a copy of the commercial invoice issued by the Mexican consignor to
    National was provided to the carrier, s. 10 was satisfied.

[19]

In our view, the trial judge erred in law in so finding.

[20]

The terms of s. 10 are clear. The consignee must declare the value of
    the goods on the face of the contract of carriage. Section 4(1) of the
    regulation specifies what a contract of carriage must contain and that
    specification includes (i) a space to show the declared valuation of the
    shipment, if any.

[21]

The bill of lading used for these shipments met the specifications of s.
    4 and included a space to show the declared value of the shipment. That space
    was not completed for these shipments. The invoice issued to National by the
    consignor had nothing to do with the contract of carriage and providing a copy
    of the invoice to the carrier was not declaring the value of the goods on the
    face of the contract of carriage within the meaning of the regulation. Moreover,
    Nationals employee responsible for making the shipping arrangements testified
    that it was not Nationals practice to declare the value of the shipment.

[22]

We conclude, accordingly, that the trial judge erred by failing to limit
    Nationals claim to the value permitted by the regulation, namely, $110,830.

(4)

Unconscionability

[23]

As we have concluded that the trial judge did not err in holding that
    the exclusion of liability clause did not apply, it is not necessary for us to
    deal with her finding of unconscionability. Our silence, however, should not be
    taken as agreeing with that finding.

(5)

Tort

[24]

Given our conclusion with respect to the statutory limitation of
    liability for the contract of carriage, it is, however, necessary for us to
    consider the trial judges alternative theory of liability. Namely, that Celadon
    was liable in tort for failing to warn National of the increased risk of
    shipping goods from Mexico and for failing to ensure that instruction operated
    in a safe and effective manner.

[25]

We agree with Celadon that the trial judge erred in law by holding that Celadon
    could be liable in tort in the circumstances of this case.

[26]

Any failure or neglect on the part of Celadon with regard to the
    shipments arose directly out of the duties associated with performance of the
    contract of carriage and did not give rise to an independent duty in tort: see
M.A.N.
     B & W Diesel v. Kingsway Transports Ltd.
(1997), 33 O.R. (3d) 355
    (C.A.), at pp. 360-61;
Central Trust Co. v. Rafuse
, [1986] 2 S.C.R.
    147, at p. 205.

Disposition

[27]

Accordingly, we would allow the appeal in part and reduce the amount of
    the judgment in favour of National to $110,830. If the parties are unable to
    agree as to costs, they may make brief written submissions.

Released: May 5, 2016

Robert J. Sharpe
    J.A.

H.S.
    LaForme J.A.

K. van Rensburg J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Nizic v. Petrovic, 2016 ONCA 340

DATE: 20160504

DOCKET: C59449

Laskin, Pepall and Brown JJ.A.

BETWEEN

Blago Nizic

Plaintiff (Respondent)

and

Zdravko Petrovic and The Toronto-Dominion Bank

Defendants (Appellants)

Glenroy Bastien, for the appellants

James Smith, for the respondent

Heard: April 29, 2016

On appeal from the judgment of Justice Antonio Skarica of
    the Superior Court of Justice, dated September 12, 2014.

APPEAL BOOK ENDORSEMENT

[1]

The appellant Petrovic makes four submissions:

1.

He submits that
    the contract is unenforceable under section 4 of the
Statute of Fraud
s
    because it is not in writing. He contends that though the trial judge stated
    the test correctly, he did not apply it correctly. We disagree with this
    submission. The trial judge found part performance, which took the case out of
    section 4. We agree with his finding.

2.

The appellant
    submits that the contract was void for illegality because its purpose was to
    avoid capital gains tax. The trial judge found otherwise, and we agree with his
    finding. The contract was not illegal on its face. Capital gains may be payable
    on disposition, which has not yet occurred. This is not one of those cases in
    which the professed purpose of the contract could give rise to illegality.

3.

The appellant
    submits that there was an intention to avoid land transfer tax on the Bearwood
    property. Even if true, it is irrelevant to the dealings between the two
    parties to this appeal in respect of the condominium.

4.

Finally, the
    appellant submits that the trial judge erred in failing to apply the
Limitations
    Act
to reduce the amount owing in paragraph 5 of the judgment. We do not
    accept this submission. As the trial judge noted, the appellant did not raise
    the
Limitations Act
in his affidavit and we agree with the trial
    judges analysis of this issue.

[2]

Accordingly, the appeal is dismissed with costs to the respondent fixed
    at $9,500, all in.


COURT OF APPEAL FOR ONTARIO

CITATION: Northern Bruce Peninsula (Municipality) v. Kerry,
    2016 ONCA 392

DATE: 20160520

DOCKET: C61527

Rouleau, Brown and Huscroft JJ.A.

BETWEEN

The Corporation of the Municipality of Northern
    Bruce Peninsula

Applicant (Appellant)

and

Doris A. Kerry and Floyd J. Kerry

Respondent (Respondents in Appeal)

Michael M. Miller, for the appellant

No one appearing for the respondents

Heard: May 19, 2016

On appeal from the order of Justice David Price of the Superior
    Court of Justice, dated November 25, 2015.

APPEAL BOOK ENDORSEMENT

[1]

In our view, the motion judges November 25, 2015 order went beyond the
    requirements of the statute and ought to be set aside.

[2]

In the unusual circumstances of this case and given the assurance of
    counsel to the effect that the municipality, although it maintains that it was
    not required to do so, has in fact complied with the service requirements set
    out in that order and no claim has been advanced by the executors of the estate
    of the former owners within the time stipulated, we set aside the order of the
    motion judge and substitute an order for payment out to the municipality as per
    paragraph 1 of the notice of appeal.


COURT OF APPEAL FOR ONTARIO

CITATION: Obermuller v. Kenfinch Co-Operative Housing Inc.,
    2016 ONCA 330

DATE: 20160503

DOCKET: C61423

Hoy A.C.J.O., Blair and Roberts JJ.A.

BETWEEN

Cheryl Obermuller

Plaintiff (Appellant)

and

Kenfinch Co-Operative Housing Inc., Josephina
    Boto, Iler Campbell, Celia Chandler, Joseph Van Tassel, and Sylvia Watson

Defendants (Respondents)

Cheryl Obermuller, in person

Adam Pantel, for the respondents, Iler Campbell and
    Celia Chandler

Farzin Yousefian, for the respondent, Joseph Van Tassel

Luke Saites, for the respondents, Kenfinch Co-operative
    Housing Inc. and Josephina Boto

Margaret Leighton, for the respondent, Sylvia Watson

Heard and released orally: April 21, 2016

On appeal from the judgment of Justice F.L. Myers of the Superior
    Court of Justice, dated November 3, 2015.

ENDORSEMENT

[1]

The appellant appeals from the dismissal of her action against the
    respondents. In her action, the appellant claimed damages related to her
    eviction from her co-operative housing unit at the Kenfinch Co-Operative, based
    on her persistent and substantial rent arrears, and Kenfinchs refusal to grant
    her subsidized rent request. The appellants action was commenced following
    numerous proceedings, starting with the Landlord and Tenant Boards October 22,
    2014 eviction order, in which she was unsuccessful.

[2]

In response to requisitions received from some of the respondents, on
    September 30, 2015, the motion judge directed the registrar to send a notice to
    the appellant that the court was considering dismissing her action under r. 2.1.01
    of the
Rules of Civil Procedure
, for being frivolous, vexatious, or an
    abuse of process. The registrar sent a notice to the appellant in Form 2.1A.
    The appellant did not provide submissions. On November 3, 2015, the motion
    judge dismissed the appellants action under r. 2.1.01.

[3]

The appellant argues on appeal that the motion judge erred in dismissing
    her action when there was no motion for summary judgement before him and when
    no hearing was held. Further, she submits that the trial judge erred in
    dismissing the action against all respondents because no requisitions were
    filed by Kenfinch and Josephina Boto. She also argues that she did not receive
    the required notice under r. 2.1.01 and therefore was deprived of the
    opportunity to make submissions. Finally, she submits that her statement of
    claim sets out claims for damages that were not the subject of the eviction or
    her subsidized rent proceedings.

[4]

We do not accept the appellants submissions.

[5]

Rule 2.1.01 permits the summary disposition of an action without a
    public hearing, on the courts own initiative and without requisitions being
    submitted by the parties, although the plaintiff must be given the opportunity
    to provide written submissions, as was done in the present case.

[6]

The record establishes that the appropriate notice to the appellant
    under r. 2.1.01 was sent to all parties by mail as required under r. 2.1.01(4).
    The respondents acknowledge receipt of the notice. It was sent to the appellant
    at the address set out by the appellant on her statement of claim. The
    appellant has not provided any evidence that she did not receive it. The
    appellant failed to deliver submissions within the time provided by r. 2.1.01
    and did not seek an extension of time to provide submissions or offer evidence
    of any reasonable excuse as to why she should be relieved of compliance with
    the fifteen-day deadline under that rule.

[7]

Even if we were to accept that the appellant did not receive notice
    under r. 2.1.01 to make submissions, no prejudice or injustice would arise
    because it would not have affected the outcome of the motion given the nature
    of and bases pleaded for the appellants claims.

[8]

We agree with the motion judges conclusion that it is apparent on the
    face of the statement of claim that the appellants action is clearly an abuse
    of process, frivolous and vexatious, because it is an attempt by the appellant
    to re-litigate the outcome of the other proceedings related to the eviction and
    rent subsidy proceedings in which she was unsuccessful and which were finally
    determined against her. All of the issues that are raised in the appellants
    statement of claim were or could have been raised in the previous proceedings.
    The appellants claim for damages for the same complaints that were or could
    have been raised in previous proceedings does not change the fact that the same
    issues were already or could have been determined in those proceedings and
    cannot be re-litigated in her action.

[9]

Moreover, the appellant can have no reasonable cause of action against Josephina
    Boto for providing an affidavit of service, or against Celia Chandler and Iler
    Campbell, Kenfinchs lawyers, who owed no duty of care to the appellant in the circumstances
    of this case.

[10]

The appellant argues that Joseph Van Tassel and Sylvia Watson should not
    be above the law or that a different law should apply to them. However, the
    legislature has created a statutory immunity for them. As a result, the
    appellants claims against Joseph Van Tassel, an employee of the Superior Court
    of Justice, and Sylvia Watson, the Landlord and Tenant Board member who signed
    the eviction order, are also bound to fail because of those respondents
    statutory immunity from any lawsuit related to the performance of their duties.

[11]

We see no error in the motion judges decision. This was a clear case where
    a dismissal of the appellants action under r. 2.1.01 was warranted. There is
    no basis for us to interfere.

[12]

As a result, the appeal is dismissed.

[13]

The respondent law firm is entitled to costs in the all-inclusive amount
    of $1,000.00. Mr. Van Tassel is entitled to all-inclusive costs in the amount
    of $500.00.  Kenfinch and Ms. Botto are entitled to costs in the amount of
    $500. Those costs are payable forthwith.

[14]

In the circumstances, we dispense with the necessity of the respondent
    seeking approval from the appellant of the form of this order.

Alexandra Hoy A.C.J.O.

R.A. Blair J.A.

L.B. Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Ottawa (City) v. Coliseum Inc., 2016 ONCA 363

DATE: 20160513

DOCKET: C60016

MacPherson, van Rensburg and Miller JJ.A.

BETWEEN

The City of Ottawa

Applicant (Respondent)

and

The Coliseum Inc.

Respondent (Appellant)

W.A. Derry Millar, Keith A. MacLaren and Owen Bourns,
    for the appellant

Ronald F. Caza and Anne M. Tardif, for the respondent

Heard: February 25, 2016

On appeal from the judgment of Justice Jennifer Mackinnon
    of the Superior Court of Justice, dated September 9, 2014.

MacPherson
    J.A.:

A.

Introduction

[1]

The appellant, The Coliseum Inc. (Coliseum), entered into a long-term
    lease agreement (the Stadium Agreement) with the respondent, the City of
    Ottawa (the City). The Stadium Agreement was in relation to Frank Clair
    Stadium at Lansdowne Park in Ottawa.

[2]

A dispute arose between the parties, but it was resolved and the parties
    signed Minutes of Settlement. A further dispute arose and an arbitrator
    interpreted the two crucial provisions of the Minutes of Settlement in favour
    of Coliseum. The City appealed and the application judge granted leave to
    appeal, allowed the appeal and overturned the arbitrators award. Coliseum appeals
    to this court.

B.

Facts

(1)

The parties and events

[3]

In November 2000, Coliseum and the City signed a lease agreement that
    allowed Coliseum to use Frank Clair Stadium in Ottawa (a former Canadian
    Football League home stadium for the Ottawa Rough Riders football team) to
    operate an indoor sports and recreation facility under a dome. In 2004, there
    was a dispute between the parties about Coliseums right of possession. The
    dispute was resolved by Minutes of Settlement.

[4]

One term of the settlement was that the City could terminate the lease in
    the event it had
bona fide
plans to redevelop Frank Clair Stadium. In
    that case, Coliseum would be given an option to lease Ben Franklin Park, if it
    was available, or, if not, a similar City-owned property.

[5]

As required by the Minutes of Settlement, on November 1, 2010 the City
    delivered a Notice of Termination of the lease for Frank Clair Stadium to
    Coliseum in anticipation of its redevelopment of Lansdowne Park. This was
    delivered with a Notice of Option to lease Ledbury Park as an alternate site, given
    that Ben Franklin Park was no longer available.

[6]

As a result of the delays in the redevelopment of Lansdowne Park, the
    City revoked its Notice of Termination. Coliseum continued to operate at Frank
    Clair Stadium for the 2011-2012 season.

[7]

The Notice of Termination became effective in 2012. Coliseum objected to
    the Citys offer of Ledbury Park. Coliseum and the City explored other sites
    including, promisingly, one on the University of Ottawa campus. Unfortunately,
    this possible deal fell through before its proposed starting date.

[8]

Coliseum was aggrieved by this state of affairs. It felt that the City
    had breached the Minutes of Settlement. As a result, Coliseum invoked the
    arbitration clause in the Stadium Agreement:

26. Any dispute as to the meaning or interpretation of any
    provision of this Agreement hereof shall be submitted to arbitration pursuant
    to the provisions of the
Arbitrations Act

(2)

The arbitrators decision

[9]

The arbitration proceeded before arbitrator Stephen Cavanagh. The
    hearing took place over 11 days in September 2013. There were 11 witnesses who
    testified, including four expert witnesses. The parties tendered about 750 individual
    documents.

[10]

Essentially, the arbitration turned on the arbitrators interpretation
    of paragraphs 5 and 6 of the Minutes of Settlement:

5. Coliseum Inc. acknowledges and agrees that the extension and
    optional renewal of the Stadium Agreement and the duration of the Coliseum
    Agreement are all conditional upon and subject to any
bona fide
redevelopment plans that the City, acting in good faith, may have in relation
    to Frank Clair Stadium and/or the Coliseum Building, that would prevent
    Coliseum Inc.s use of these two facilities for its operations. In such
    circumstances, the parties will enter into good faith negotiations in an effort
    to find alternative site(s) appropriate for Coliseum Inc.s operations. The
    City shall give Coliseum Inc. twelve months notice of termination of the Stadium
    Agreement and/or Coliseum Agreement. In the case of the Coliseum Building, such
    notice of termination shall not be given prior to January 1, 2007 and in the
    case of Frank Clair Stadium, not before January 1, 2010.

6. In the event that the Coliseum Agreement and/or Stadium
    Agreement is terminated in accordance with paragraph 5 above, and provided that
    Coliseum Inc. performs the terms, covenants and conditions to be observed in
    those Agreements, then the City agrees at that time to grant Coliseum Inc. an option
    to lease (option to lease) a portion of Ben Franklin Park at 180 Knoxdale
    Road in the City of Ottawa. If Ben Franklin Park is, at the time of exercise of
    the option to lease, the subject of any
bona fide
redevelopment plan
    which precludes the installation of an inflatable dome structure of the kind
    currently operated by Coliseum Inc., then the City agrees to grant an option to
    lease to Coliseum Inc. for a similar City-owned property within a 10 kilometer
    radius of Frank Clair Stadium, as shown on Schedule A attached, or such other
    property as the parties may otherwise agree. The option to lease shall be
    delivered to Coliseum Inc. on or before delivery of the Notice of Termination
    referred to in paragraph 5 above. The period of the option to lease shall
    commence from the date of the delivery of the option to lease. The terms and
    conditions of the new lease shall be determined by the parties within six
    months of the exercise of the option by Coliseum Inc. with the parties using
    their best efforts to negotiate a new lease in accordance with the then current
    market rates and conditions applicable to the leasing and operation of similar
    types of recreational uses in the City of Ottawa. Failing an Agreement being
    reached by the parties within this six-month period, either party may apply to
    have the current market rates and conditions applicable to the leasing and
    operation of similar types of recreational uses in the City of Ottawa
    determined and fixed by arbitration in accordance with the provisions regarding
    arbitration set out in the Stadium Agreement. The parties agree to co-operate
    in order to have such arbitration completed as quickly as possible, and in any
    event no later than six months following delivery of a request for arbitration
    by either party.

[11]

On February 3, 2014, the arbitrator rendered a 392 paragraph decision.
    He allowed Coliseums claim and awarded damages of $2,240,000 against the City
    for breach of the Minutes of Settlement. On the question of liability, the
    arbitrator concluded, at para. 291:

In my view, Coliseum Inc. has established that the City of
    Ottawa breached the 2004 Minutes of Settlement. The breach was the Citys
    failure to provide Coliseum Inc. with an option to lease a property which
    complied with the requirements of both paragraphs 5 and 6 of the Minutes of
    Settlement. The Ledbury Park site did comply with the requirements of paragraph
    6 (in that it was City-owned, within 10 kilometres of Frank Clair Stadium and,
    as I have found, similar to Ben Franklin Park). But I have concluded, as
    discussed above, that the City of Ottawa did not take meaningful steps to
    determine that Ledbury Park was appropriate to the operations of [Coliseum
    Inc.], as required by [paragraph 5].

[12]

In the alternative, if the option to lease complied with the Minutes of
    Settlement, the arbitrator held that the City had waived its entitlement to
    rely on the option to lease Ledbury Park, or was estopped from relying on it.
    This was based on the Citys statements and actions in endeavouring to
    negotiate for other sites that it did not own but that were preferable to
    Coliseum. The arbitrator said (at para. 261):

[I]n my opinion, it was not open to the City of Ottawa (no
    matter how well-intentioned it might have been at the time) to explore
    alternative sites with such energy and zeal in 2010 to 2012, take no steps to
    advance the Ledbury Park option, but then rely on Ledbury Park as a basis for
    defeating Coliseum Inc.s claim.

[13]

In its closing submissions, the City asked the arbitrator to reduce any
    damages award in favour of Coliseum by 40 per cent, because 40 per cent of Coliseums
    revenue was actually that of a separate company called Soccer7s. Though the
    arbitrator had very significant reservations on this issue, he rejected the
    Citys argument. He relied heavily on the fact that the City had been aware of
    Soccer7s involvement for some time and took no prior issue with it and did not
    address the issue in its pleadings.

[14]

The City brought an application to appeal the arbitrators decision on
    the basis of s. 45(1) of the
Arbitration Act, 1991
, S.O. 1991, c. 17
    (the
Arbitration Act
):

45.(1) If the arbitration agreement does not deal
    with appeals on questions of law, a party may appeal an award to the court on a
    question of law with leave, which the court shall grant only if it is satisfied
    that,

(a)

the importance to the
    parties of the matters at stake in the arbitration justifies an appeal; and

(b)

determination of the
    question of law at issue will significantly affect the rights of the parties.

(3)

The application judges decision

[15]

The application judge granted leave to appeal. Applying
Sattva
    Capital Corp. v. Creston Moly Corp.
, 2014 SCC 53, [2014] 2 S.C.R. 633, she
    held that the Citys proposed grounds of appeal raised extricable legal errors.
    Thus, the appeal came within the opening words of s. 45(1) of the
Arbitration
    Act
which allows leave to appeal on
    questions of law only
.

[16]

In addition, both parties agreed, and the application judge accepted,
    that the criterion in s. 45(1)(a) was met. Finally, the application judge
    determined that the criterion in s. 45(1)(b) was also met and concluded that: [a]ll
    of the alleged errors  are potentially decisive of the outcome of the
    arbitration.

[17]

Again applying
Sattva
, the application judge stated: I find
    that the standard of review applicable to this appeal is reasonableness.

[18]

The application judge found that the arbitrators interpretation of paragraphs
    5 and 6 of the Minutes of Settlement was both an error of law and unreasonable.
    The key portions of her reasons are at paras. 47-51 and 53:

I have reached the conclusion that the Arbitrator erred in law
    by conflating paras. 5 and 6 of the Minutes of Settlement, and by imposing an
    overarching objective that an alternative site must be similar to Ben Franklin
    Park
and
appropriate to Coliseums operations. He
    overlooked the precise wording of para. 6 that required best effort
    negotiations of a new lease in accordance with market rates and conditions
    within 6 months
after
the exercise of the option
    by Coliseum. Coliseum did not exercise the option, yet the Arbitrator found
    that the City was nonetheless obliged to have identified to Coliseum what it
    was prepared to do to make the site an appropriate one for it. Even though he
    found that the parties had agreed in the Minutes that Ben Franklin Park was
    appropriate, he nonetheless held that giving an option to lease Ben Franklin
    Park would not have been enough to satisfy the requirements of the Minutes,
    because of the overarching requirement that the replacement site had to be
    appropriate to Coliseums operations.

In my view he erred in this way by overlooking the import of
    the requirement in para. 6 that Coliseum exercise the option before the site
    negotiations began, and by finding that the general language of para. 5
    overrode the specific language of para. 6. This led him to the error the City
    describes as enforcing an agreement to agree. Whereas in para. 5 the parties
    agree to good faith negotiations to try to find an appropriate alternative
    site, they did not agree in that paragraph or in paragraph 6 to actually find
    one or that the option to lease the City was required to provide would meet
    that criteria. The criteria required for the option to lease was that it would
    be for a portion of Ben Franklin Park or a site similar to it. Once the
    Arbitrator found that Ledbury Park was similar to Ben Franklin Park, Coliseum
    had to have exercised the option before the Minutes required the City to
    indicate through negotiations what it was prepared to do to improve the site
    for use by Coliseum.

The Arbitrator found as a fact that the City did act in good
    faith and that the parties were engaged in lengthy negotiations as to possible
    alternative sites. The Arbitrator also found that Ben Franklin Park was an
    agreed upon appropriate alternative site, and that Ledbury Park was similar to
    it within the meaning of para. 6 of the Minutes. He found that in 2004 Ben
    Franklin Park was undeveloped land as was Ledbury Park and that both would have
    required significant expenditure to be made ready for use by Coliseum. Whereas
    Ben Franklin Park was preapproved, Ledbury Park was not. But para. 6 applied to
    both in requiring Coliseum to exercise the option to lease before the best
    efforts to negotiate a new lease obligation arose.

Third, the Arbitrator speculated as to Coliseums intention in
    entering into the Minutes and used that as a basis for his interpretation of
    the contract. He says at para. 86: It is highly unlikely that Coliseum Inc.
    would have negotiated an arrangement for a replacement site that was little
    more than vacant land, without any provision that would see it receiving
    something approximating what it had lost by termination of the Stadium
    Agreement.

Yet that is exactly what Coliseum did in accepting Ben Franklin
    Park as an alternative site to Frank Clair Stadium. There was nothing in the
    Minutes that guaranteed them a new lease of approximately similar value, only
    the opportunity to exercise the option to Ben Franklin Park or a similar site,
    and having done so, to use best efforts to negotiate a lease, failing which
    either party could require arbitration of the terms of a new lease.

For these reasons I find the Arbitrator erred in law in his
    interpretation of the Minutes. I also find his interpretation was unreasonable
    having regard to the inconsistent conclusions the errors led him to. For
    example, he found that by the Minutes the parties had agreed in advance that
    Ben Franklin Park was an acceptable replacement for Frank Clair Stadium,
    meeting the appropriateness requirement of para. 5
and
he found that
    providing Coliseum an option to lease Ben Franklin Park would not have met the
    Citys obligations under the Minutes. He correctly identified that selection of
    the site was the first step, and that the remaining terms would be the subject
    of negotiation. In overlooking the requirement for Coliseum to exercise the
    option to lease, he went farther and found at para. 90(g) that the Minutes
    contemplated that the parties
would
agree on the lease of replacement
    site and then negotiate the terms of the lease. But the Minutes equally
    contemplated that the parties may not agree on a replacement site, because the
    obligation to negotiate and possibly to submit the terms of a new lease to
    arbitration did not arise unless an option to lease was exercised by Coliseum.
    [Emphasis in original.]

[19]

The application judge also concluded, at para. 70, that the arbitrator
    erred in his application of the doctrines of waiver and estoppel:

I find the Arbitrator erred in law in finding the City
    precluded from relying on its delivery of the Notice of Option to Lease. This
    conclusion was also unreasonable. He founded the preclusion in part on the
    Citys good faith efforts to comply with paragraph 5 of the Minutes. And his
    conclusion was also inconsistent with the facts as he set them out as to
    whether the City was unequivocal or had the intention to affect legal
    relations.

[20]

Finally, although it was, strictly speaking, not necessary for the
    application judge to consider the arbitrators damages award in light of her
    conclusion on the interpretation of the Minutes of Settlement, for the sake of
    completeness she did so at para. 72:

Although it is unnecessary to address the Citys appeal from
    the damages awarded I would have reduced the award by the 40 percent of revenue
    derived from the Stadium Lease by the Soccer7s. The onus was on Coliseum to
    establish its damages. The Arbitrator had a paucity of evidence as to the
    relationship between the corporate entities and the extent of Coliseums
    ability to control the flow of revenue to one or other entity. His conclusion
    in favour of Coliseum on this point was speculative.

[21]

Coliseum appeals from the application judges decision.

C.

Issues

[22]

The issues are:

(1)

Leave to appeal

(a)

Does this court have jurisdiction to review a decision of a Superior
    Court judge granting leave to appeal an arbitral decision under s. 45(1) of the
Arbitration Act
?

(b)

If the answer to 1(a) is in the affirmative, did the application judge
    err in granting leave to appeal?

(2)

Reasonableness
    of the arbitrators decision

(a)

Did the application judge err in finding the arbitrators interpretation
    of the Minutes of Settlement unreasonable?

(b)

If the answer to 2(a) is in the negative, did the application judge err
    in finding the arbitrators decision on waiver and estoppel unreasonable?

(c)

If the answer to 2(a) is in the affirmative, did the application judge
    err in finding the arbitrators decision not to reduce damages by 40 per cent
    unreasonable?

D.

Analysis

(1)

Leave to appeal

(a)

Jurisdiction of this court

[23]

Coliseum contends that the application judge erred in granting leave to
    appeal the arbitrators award. The Citys response is that this decision is not
    subject to review by this court. In my view, the City is correct.

[24]

With respect to commercial arbitrations, leave to appeal to the Superior
    Court of Justice is governed by s. 45 of the
Arbitration Act
:

45.(1) If the arbitration agreement does not deal
    with appeals on questions of law, a party may appeal an award to the court on a
    question of law with leave, which the court shall grant only if it is satisfied
    that,

(a)

the importance to the
    parties of the matters at stake in the arbitration justifies an appeal; and

(b)

determination of the
    question of law at issue will significantly affect the rights of the parties.

[25]

Further leave to appeal to the Court of Appeal is governed by s. 49 of
    the
Arbitration Act
:

49. An appeal from the courts decision in an appeal
    of an award, an application to set aside an award or an application for a
    declaration of invalidity may be made to the Court of Appeal, with leave of
    that court.

[26]

This court has twice considered the issue of whether a Superior Court judges
    decision granting or refusing leave to appeal from an arbitral award can be
    appealed to this court.

[27]

In
Hillmond Investments Ltd. v. Canadian Imperial Bank of Commerce
(1996), 29 O.R. (3d) 612 (C.A.), this court canvassed a series of cases and
    concluded that an order refusing leave to appeal is not appealable.

[28]

In
Denison Mines Ltd. v. Ontario Hydro
(2001), 56 O.R. (3d) 181
    (C.A.), this court spoke more broadly about orders granting and refusing leave
    to appeal. Morden J.A. stated, at paras. 6-8:

The non-appealability of decisions refusing or granting leave
    to appeal is the general rule and, subject to the exception to which I shall
    refer shortly, it should, as
Hillmond
held, be applicable to appeals
    from orders made under
s. 45(1)
of the
Arbitration Act
, 1991
. The rule flows
    from the strong implication that, notwithstanding the wording of
s. 6(1)
(b) of the
Courts of Justice Act
,
    a general statute, no appeal is intended from an order made refusing or
    granting leave to appeal. Any other conclusion would defeat the purpose of
s. 45(1)
, which is to
    limit appellate recourse to the courts in arbitration matters.

This strong negative implication is reinforced by
s. 49
of the
Arbitration Act
,
1991
, which
    provides for an appeal to the Court of Appeal from a superior court judge's
    decision in an appeal of an award, but only with leave of the Court of Appeal.
    It would be incongruous to attribute to the legislature an intention that there
    be appeals, as of right, from decisions on leave applications under
s. 45(1)
when no such
    appeal is provided for with respect to decisions on what may be called the main
    issue, the correctness of the arbitral decision.

As I have said, the non-appealability of orders refusing leave
    is the general rule. As
Hillmond
sets forth on pp. 624-25, the courts
    have engrafted onto this general rule an exception which is applicable where the
    judge mistakenly declines jurisdiction.

[29]

I agree with this analysis, and especially with the compelling logic in
    para. 7. In the present case, the application judge granted leave to appeal.
    The exception of a judge mistakenly declining jurisdiction is not in play.
    Accordingly, this court has no jurisdiction on this appeal to review the
    application judges decision to grant leave to appeal from the arbitral award.

(b)

Application judges interpretation
    of s. 45(1)(a) and (b) of the
Arbitration Act

[30]

In light of my conclusion in 1(a) above that this court does not have
    jurisdiction to review the application judges leave to appeal decision, this
    issue does not arise.

(2)

Reasonableness of the arbitrators decision

[31]

The standard of review on appeal from a commercial arbitration award
    will generally be reasonableness. The leading case is
Sattva
, wherein
    Rothstein J. said, at para. 106:

In the context of commercial arbitration, where appeals are
    restricted to questions of law, the standard of review will be reasonableness
    unless the question is one that would attract the correctness standard, such as
    constitutional questions or questions of law of central importance to the legal
    system as a whole and outside the adjudicators expertise.

[32]

The reason for this deferential standard, even in appeals that are
    restricted to questions of law, was explained by Rothstein J. in
Sattva
,
    at para. 104:

Appellate review of commercial arbitration awards takes place
    under a tightly defined regime specifically tailored to the objectives of commercial
    arbitrations and is different from judicial review of a decision of a statutory
    tribunal. For example, for the most part, parties engage in arbitration by
    mutual choice, not by way of a statutory process. Additionally, unlike
    statutory tribunals, the parties to the arbitration select the number and
    identity of the arbitrators.

[33]

In a similar vein, in
Popack v. Lipszyc
, 2016 ONCA 135, 262
    A.C.W.S. (3d) 841, Doherty J.A. linked the fact of a private consensual
    arbitration with the need for judicial deference to the result of that
    arbitration in this fashion, at para. 26:

In addition to the generally applicable principles that urge
    deference in the review of all discretionary decisions, the nature of the
    specific order under appeal can also enhance the deference rationale. The
    application judge exercised her discretion in the context of a review of an
    award rendered in a private arbitration before a panel chosen by the parties to
    determine the dispute between them.
The parties
    selection of their forum implies both a preference for the outcome arrived at
    in that forum and a limited role for judicial oversight of the award made in
    the arbitral forum
.
The application judges decision to not set aside the
    award is consistent with the well-established preference in favour of
    maintaining arbitral awards rendered in consensual private arbitrations. [Emphasis
    added, citations omitted.]

[34]

There is nothing in this appeal taking it outside the general rule that
    judicial review of a commercial arbitration award is conducted on a
    reasonableness standard. This appeal does not deal with constitutional
    questions or questions of law of central importance to the legal system as a
    whole and outside the adjudicators expertise.

[35]

In my view,
Dunsmuir v. New Brunswick
, 2008 SCC 9, [2008] 1
    S.C.R. 190, remains the leading case on the definition of reasonableness.
    Bastarache and LeBel JJ. stated, at para. 47:

Reasonableness is a deferential standard animated by the
    principle that underlies the development of the two previous standards of
    reasonableness: certain questions that come before administrative tribunals do
    not lend themselves to one specific, particular result. Instead, they may give
    rise to a number of possible, reasonable conclusions. Tribunals have a
    margin of appreciation within the range of acceptable and rational solutions. A
    court conducting a review for reasonableness inquires into the qualities that
    make a decision reasonable, referring both to the process of articulating the
    reasons and to outcomes. In judicial review, reasonableness is concerned
    mostly with the existence of justification, transparency and intelligibility
    within the decision-making process. But it is also concerned with whether
    the decision falls within a range of possible, acceptable outcomes which are
    defensible in respect of the facts and law.

[36]

Against this backdrop, I turn to the arbitral award and the application
    judges review of that award.

(a)

Paragraphs 5 and 6 of the Minutes of
    Settlement

[37]

Based on the above, the crucial question is: did the application judge
    err by concluding that the arbitrators interpretation of the Minutes of
    Settlement, especially paragraphs 5 and 6, was unreasonable?

[38]

The arbitrator found that paragraph 6 of the Minutes of Settlement must
    be read in light of the more general provisions of paragraph 5. In particular,
    he found that the City had to provide a site similar to Ben Franklin Park as it
    was in 2004, provided that the alternative site(s) [were] appropriate for
    Coliseum Inc.s operations . At that point, the parties would then negotiate
    the terms of the lease. The arbitrator observed that this interpretation
    matched Coliseums view of what was required by the Minutes of Settlement, but
    also that of Robin Souchen, the principal negotiator for the City. The
    arbitrator found that Coliseum reasonably relied on what it was being told by
    Mr. Souchen, which accorded with the arbitrators interpretation of the Minutes
    of Settlement.

[39]

Essentially, the arbitrator found that paragraph 6 of the Minutes of
    Settlement explained and modified the overarching requirement in paragraph 5
    that the parties will enter into good faith negotiations in an effort to find
    alternative site(s) appropriate for Coliseum Inc.s operations. Paragraph 6
    does not define what find alternative site(s) means  this is fleshed out in paragraph
    6. Accordingly, the words in paragraph 5 are complementary to paragraph 6
    they are a statement of the overarching principle that was intended to govern
    the parties actions in the event of termination and it extended to paragraph
    6.

[40]

The application judge disagreed with the arbitrators analysis. She
    interpreted paragraphs 5 and 6 of the Minutes of Settlement in a two-step
    fashion. Paragraph 5 mandated that Coliseum and the City work together in good
    faith negotiations to find an alternative site for Coliseums operations if
    Frank Clair Stadium became unavailable. If those negotiations failed to
    identify an alternative site, then paragraph 5 was exhausted and paragraph 6
    was triggered. At this juncture, the path for the parties narrowed and became
    more formal or legalistic. The City was required to identify a single
    alternative site and the parties could then try to negotiate a new lease
    acceptable to both of them (with arbitration available on its terms).

[41]

Without hesitation, I say that the application judges interpretation of
    paragraphs 5 and 6 of the Minutes of Settlement is a possible  even a
    reasonable  interpretation. However, that is not the relevant point. In my
    view, the same can be said about the arbitrators interpretation.

[42]

It is true that the arbitrators interpretation does not flow entirely
    from an analysis of only the words inside the four corners of the Minutes of
    Settlement. He explicitly relied on some of the evidence he heard during the
    11-day hearing to provide background and context to his legal analysis of the
    Minutes of Settlement.

[43]

There is nothing unreasonable about this approach. When assessing
    reasonableness, it is important to keep in mind some of the principles of
    contractual interpretation discussed in
Sattva
. Of particular
    relevance to this appeal is what Rothstein J. said, at para. 47:

[T]he interpretation of contracts has evolved towards a
    practical, common-sense approach not dominated by technical rules of
    construction. The overriding concern is to determine the intent of the parties
    and the scope of their understanding. To do so, a decision-maker must read the
    contract as a whole, giving the words used their ordinary and grammatical
    meaning, consistent with the surrounding circumstances known to the parties at
    the time of formation of the contract. Consideration of the surrounding
    circumstances recognizes that ascertaining contractual intention can be
    difficult when looking at words on their own, because words alone do not have
    an immutable or absolute meaning. [Citations omitted.]

[44]

In my view, the arbitrators reasoning was entirely faithful to this
    approach. His reasoning and result simply cannot attract the label
    unreasonable. Accordingly, the application judge erred by setting aside the
    arbitrators interpretation of the Minutes of Settlement and substituting her
    own. The fact that the application judges interpretation is also reasonable
    does not affect the result, as the arbitrator was owed deference on his
    reasonable interpretation.

(b)

Waiver and estoppel

[45]

In light of the conclusion in 2(a) above that the arbitrators
    interpretation of the Minutes of Settlement was reasonable, the issues of waiver
    and estoppel do not arise.

(c)

Damages

[46]

Because the application judge allowed the appeal on the contractual
    interpretation issue, she did not, strictly speaking, need to consider the
    damages issue. However, for the sake of completeness she did so at para. 72
    which, for convenience, I set out again:

Although it is unnecessary to address the Citys appeal from the
    damages awarded I would have reduced the award by the 40 percent of revenue
    derived from the Stadium Lease by the Soccer7s. The onus was on Coliseum to
    establish its damages. The Arbitrator had a paucity of evidence as to the
    relationship between the corporate entities and the extent of Coliseums
    ability to control the flow of revenue to one or other entity. His conclusion in
    favour of Coliseum on this point was speculative.

[47]

Again, I do not think that the arbitrators decision on the damages
    issue can attract the label unreasonable. There was a significant amount of
    evidence regarding damages before the arbitrator. Each party put forward an
    expert witness (both of whom were chartered accountants and business
    valuators). There was, according to the arbitrator, a large measure of
    agreement between the two experts. Coliseums expert provided a damages range
    of $2,240,000 to $5,524,200 and the Citys expert said $2,240,000 to
    $4,964,700. The Citys own expert witness did not discount his damages
    assessment to account for Soccer7s.

[48]

Only in its closing submissions did the City raise the issue of a
    potential 40 per cent reduction because of a relationship between Coliseum and
    Soccer7s. This issue was not pleaded by the City and it clearly took the
    arbitrator and Coliseum by surprise. Nevertheless, the arbitrator dealt with it
    and concluded that although I have very significant reservations on this
    issue, I have decided that Coliseum Inc.s damages should not be reduced on
    account of the privity of contract issue.

[49]

In light of the sparse record, the experts damages numbers, and the application
    judges lack of reasons (understandable in light of her conclusion on the main
    issue), I cannot say that the arbitrators award on the damages issue was
    unreasonable.

E.

Disposition

[50]

I would allow the appeal and reinstate the arbitrators award. The
    appellant is entitled to its costs of the appeal which, in accordance with the
    parties agreement, I would fix at $36,000, inclusive of disbursements and HST.

Released: May 13, 2016
    (J.C.M.)

J.C.
    MacPherson J.A.

I agree.
    K. van Rensburg J.A.

I agree.
    B.W. Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Philp v. Brunelle, 2016 ONCA 385

DATE: 20160519

DOCKET: C59689

Rouleau, Pardu and Benotto JJ.A.

BETWEEN

Laura Philp

Plaintiff (Appellant)

and

Lucille Brunelle

Defendant (Respondent)

Gregory Sidlofsky, for the appellant

Ewa Krajewska, for the respondent

Heard: May 5, 2016

On appeal from the judgment of Justice Todd L. Archibald
    of the Superior Court of Justice, dated October 31, 2014, with reasons reported
    at 2014 ONSC 6295.

ENDORSEMENT

[1]

The appellant submits that the trial judge erred in dismissing her
    claims for damages said to result from breaches of an agreement of purchase and
    sale for a home for special care and domiciliary hostel.

[2]

The agreement contained promises that there would be 21 paying residents
    in the home, and also that the septic system operated satisfactorily for a home
    for special care and domiciliary hostel, as of the date of closing. The
    agreement also advised that there was a written agreement with the neighbouring
    church for the shared use of its driveway, which agreement states that it must
    be maintained. The agreement of purchase and sale contained a further
    provision that the covenants, representations and warranties would remain in full
    force and effect, despite the closing, for a period of 30 days from the date of
    closing.

[3]

The trial judge dismissed all of the appellants claims based on alleged
    breaches of the above provisions. He found as a fact that the appellant had not
    proven that the septic system was not in good working order at the relevant
    time. He rejected the appellants argument that the contractual provision about
    the driveway agreement meant that there was a promise by the vendor that the appellant
    would have a right in perpetuity to use the churchs driveway, and rejected her
    evidence that the vendor had made an oral representation to that effect. He
    concluded that the reference to maintenance in the agreement meant only that
    the home had to physically maintain the driveway, so long as the church allowed
    its use.

[4]

Finally, the vendor had disclosed before closing that there were 18
    occupants in the home, although she also delivered a statutory declaration
    almost concurrently stating that there were 19 residents. The agreement
    specifically provided for a remedy in the event that there were fewer than 21
    paying residents in the home as of the date of closing:

If there are less than 21 paying residents as of the date of
    closing, then at the option of the Buyer, this Agreement shall be extended for
    not more than thirty (30) days to allow time to bring the census up to 21
    persons. If this is not accomplished within the said thirty (30) days, then
    this Agreement shall be null and void and the deposit returned to the Buyer
    without deduction

[5]

The appellant closed the transaction, knowing there were 18 residents,
    and accepted an abatement of the purchase price in the sum of $4,000 because of
    the shortfall. The trial judge found that the clause about the number of
    residents was a condition of closing, and that because the appellant chose to
    accept an abatement and close the transaction, rather than exercise her rights
    under the agreement, that clause merged in the deed on closing.

[6]

These findings were fatal to the appellants claims, and the appellant
    has not demonstrated any error which would justify appellate intervention. Given
    the particular provision dealing with any shortfall in the number of residents
    on the date of closing, it was not unreasonable for the trial judge to conclude,
    in effect, that the parties intended that this promise would merge in the deed
    on closing. As observed in
Fraser-Reid v. Droumtsekas
, [1980] 1 S.C.R.
    720 at p. 738, [t]here is no presumption of merger. Rather, the proper
    inquiry is whether the facts disclose a common intention to merge the warranty
    in the deed.

[7]

Absent palpable and overriding error, the trial judges findings are
    entitled to deference.

[8]

In light of the fact that the above findings were the primary basis upon
    which the trial judge dismissed the appellants claims, it is not necessary to consider
    the appellants other arguments, which challenge his alternative findings.

[9]

The appeal is accordingly dismissed, with costs to the respondent fixed at
    $20,000, inclusive of disbursements and HST.

Paul
    Rouleau J.A.

G.
    Pardu J.A.

M.L. Benotto J.A.