COURT OF APPEAL FOR ONTARIO

CITATION: Hunks v. Hunks, 2017 ONCA 247

DATE: 20170327

DOCKET: C61093

Gillese, MacFarland and Pepall JJ.A.

BETWEEN

Donna Jean Hunks

Applicant (Appellant)

and

Gary Eugene Hunks

Respondent (Respondent)

Christos Vitsentzatos and Trent Zimmerman, for the
    appellant

P. Alan R. Giles, for the respondent

Heard: December 16, 2016

On appeal from the order of Justice Johanne N. Morissette
    of the Superior Court of Justice, dated September 16, 2015.

Gillese J.A.:

[1]

This family law appeal turns on a single issue.

[2]

During the parties marriage, the wife was injured in an accident.  She
    reached a settlement of her claim.  Some of the proceeds of the personal injury
    settlement were used to create a structured settlement (the SS Annuity) for
    her.  The marriage has ended but the wife continues to receive payments from
    the SS Annuity.

[3]

The issue on appeal is this:  are the SS Annuity payments to be treated as
    property or income under the
Family
Law Act
,
R.S.O. 1990, c. F.3 (the Act)?

[4]

For the reasons that follow, in my view, for the purposes of the Act, the
    SS Annuity payments are to be treated as income.

BACKGROUND IN BRIEF

[5]

Donna Hunks (Ms. Hunks or the appellant) and Gary Hunks (Mr. Hunks
    or the respondent) were married on December 22, 1995.  It was a second
    marriage for both.  Each had children from their prior marriages.  They have no
    children together.  At the date of their marriage, Ms. Hunks worked as an
    office assistant and Mr. Hunks worked as a millwright.

[6]

On August 21, 1996, while Ms. Hunks was shopping in a supermarket, she
    was hit by either a palette or a loaded grocery cart and suffered significant physical
    injuries.  As a result of those injuries, she lost her job and has been unable to
    return to work.

[7]

Ms. Hunks sued the supermarket.  The action included a claim by Mr.
    Hunks, under the Act, for damages for loss of care, guidance, and companionship.
    The action was settled.  Under minutes of settlement dated October 29, 1999
    (the Minutes of Settlement), $571,383
[1]
was payable to the Hunks. The Minutes of Settlement also specified that the Hunks
    were at liberty to use some or all of the settlement monies to purchase a
    structured settlement, in which event the defendant supermarket would pay the
    assignment fee.

[8]

Ms. Hunks personal injury lawyer sent her a letter dated November 25,
    1999 (the Letter).  In the Letter, the lawyer confirmed that after payment of
    legal fees and disbursements, Ms. Hunks had received the sum of $199,694 from
    the proceeds of settlement.  Ms. Hunks used the almost $200,000 lump sum
    payment for the benefit of the family, including Mr. Hunks.

[9]

The Letter also set out that Ms. Hunks claim had been settled on the
    following terms:

General damages (pain and suffering)

$  60,000.00

Interest on pain and suffering

$  10,000.00

Future income loss

$302,100.00

Past wage loss

$  82,700.00

Interest on past wage loss

$    6,200.00

Special damages (expenses incurred to date)

$  16,500.00

Future care expenses

$  16,500.00

Garys claim

$    8,000.00

OHIPs subrogated interest

$    1,475.88

Costs

$  67,576.00

Total:

$571,051.88

[10]

An attachment to the Letter showed that Ms. Hunks lawyer had used $302,306
    of the settlement monies for a structured settlement (the SS Annuity) for Ms.
    Hunks.  The SS Annuity was non-commutable, non-assignable and non-transferable.
    The SS Annuity provided for monthly payments of $1287.15, increasing by 2% per
    annum, for the duration of Ms. Hunks life or a minimum guarantee period of 25
    years, with her estate as secondary beneficiary.  It also guaranteed four equal
    lump sum payments of $15,000, to be paid to Ms. Hunks once every five years
    from 2009 to 2024.

[11]

Ms. Hunks began receiving the irrevocable SS Annuity payments on December
    15, 1999.

[12]

Mr. Hunks retired in September of 2009.

[13]

The parties separated on October 1, 2011.  At that time, Ms. Hunks was 57
    years old and Mr. Hunks was 62 years old.
[2]
Both parties children are independent adults and were at the date of
    separation.

[14]

At the separation date, there were about 13 years of guaranteed monthly
    payments and three lump sum payments yet to be made from the SS Annuity.

[15]

Ms. Hunks now receives approximately $1,500 per month from the SS Annuity.
[3]
She also receives a CPP disability payment of approximately $800 per month.  The
    CPP payments will cease when she attains retirement age.

[16]

In the family law proceedings that followed the parties separation, a
    number of issues arose in respect of equalization.  One issue is whether the SS
    Annuity payments that Ms. Hunks receives are to be treated as income or
    property under the Act.  If income, the payments are to be taken into
    consideration when determining spousal support.  If the payments fall within
    the meaning of property in Part 1 of the Act, their treatment for NFP purposes depends
    upon whether they are excluded property under s. 4(2)3 of the Act.

[17]

Section 4(2)3 reads as follows:

(2)
The value of the following property that
    a spouse owns on the valuation date does not form part of the spouses net
    family property:

3. Damages or a right to damages for personal
    injuries, nervous shock, mental distress or loss of guidance, care and companionship,
    or the part of a settlement that represents those damages.

[18]

This case was in trial assignment court on September 8, 2015.  The
    presiding judge adjourned it to trial on September 14, 2015, and ordered that:

1.

the first order of business would be legal argument as to whether the SS
    Annuity is property or income;

2.

an agreed statement of facts would be filed; and

3.

it would then be in the discretion of the trial judge to continue with
    the balance of the trial at that time, or to adjourn it for completion
    following delivery of her decision on the legal issue.

[19]

I will refer to this order as the Trial Assignment Court Order.

THE DECISION BELOW

[20]

The parties, represented by counsel, appeared before the trial judge on
    September 14, 2015, as ordered.  They did not produce an agreed statement of
    facts.  Instead, each party produced its own statement of facts.  While the two
    statements of facts were similar, they differed on how the settlement monies had
    been used to buy the SS Annuity.  Ms. Hunks position was that no specified
    head of damages in the settlement monies had been earmarked to be used to buy
    the SS Annuity.  Mr. Hunks position was that the head of damages representing
    future income loss in the settlement had been used to purchase the SS Annuity.

[21]

No sworn testimony or evidence was adduced before the trial judge, although
    a book of unsworn documents was placed before her.

[22]

The parties made legal arguments on how the SS Annuity payments that Ms.
    Hunks receives should be treated.  Ms. Hunks argued that the payments are
    either income or, pursuant to s. 4(2)3 of the Act, excluded property.
    Alternatively, she sought an unequal division of NFP under s. 5(6) of the Act.
    Mr. Hunks argued that the whole amount of the settlement monies had been received
    during the marriage.  Thus, he submitted, the SS Annuity was property under
    Part 1 of the Act and, as it represented future income loss, it was not
    excluded property under s. 4(2)3.

[23]

The trial judge found that the SS Annuity was property and not excluded
    under s. 4(2)3 of the Act.  Consequently, it was not to be treated as income
    for the purposes of spousal support.  The trial judge made an order to that
    effect, dated September 16, 2015 (the Order).

[24]

The trial judge stated that most of the cases to which she had been
    referred dealt with Workers Compensation benefits or other types of disability
    benefits.  She observed that disability benefits are intended to replace income
    on an on-going basis and are not intended to be a form of savings regardless of
    what the future held.

[25]

The trial judge found that the SS Annuity was akin to a pension plan
    because there were no pre-conditions attached to it and the SS Annuity was payable
    for Ms. Hunks life.  Even if Ms. Hunks were able to get employment and receive
    income in the future, she would still be entitled to the SS Annuity.
    Accordingly, the trial judge said, the SS Annuity was a form of savings to
    replace loss of future earnings for Ms. Hunks.  The trial judge concluded that
    Ms. Hunks had received the SS Annuity payments before the parties separation,
    and that Ms. Hunks was obligated to share their value post-separation, just
    like a pension.

[26]

After finding that the SS Annuity was property, the trial judge considered
    whether it ought to be excluded as damages for personal injuries in accordance
    with s. 4(2)3 of the Act.  She noted that the onus of proving the exclusion was
    on the party claiming it.

[27]

After reviewing several cases, the trial judge concluded that the intent
    of s. 4(2)3 is to exclude only general damages for pain and suffering together
    with any special damages that can be attributed directly to the personal
    injury, as opposed to lost income or other loss to the family. She said that
    because the only evidence before the court was the breakdown of the heads of
    damages (set out above at para. 9), it appeared that the sum used to purchase
    the SS Annuity represented the sum for loss of future income.  She found that, on
    a balance of probabilities, the SS Annuity was for future loss of income.  Therefore,
    it was not excluded property under s. 4(2)3 of the Act.

THE ISSUES

[28]

On appeal, Ms. Hunks submits that the trial judge erred in:

1.  deciding whether the SS Annuity
    payments are property or income under the Act (the Legal Issue) in the
    absence of an agreed statement of facts and without an adequate evidentiary
    record; and

2.  finding that those
    payments are property that must be included in her NFP statement.

Issue #1      Did the trial judge err in deciding the legal
    issue?

The Parties Positions

[29]

Whether the SS Annuity payments are to be considered income for support
    purposes or property for NFP equalization purposes is an important legal
    issue.  The appellant says that important issues of law are normally decided
    based on a full factual record, which allows the trial judge to make findings
    that form the basis for his or her legal analysis and conclusions.  In this
    case, in the absence of an agreed statement of facts, the trial judge found
    that the SS Annuity had been purchased with that part of the settlement monies
    allocated for future income loss (the Finding).  The appellant says that the
    Finding was unreasonable and not supported by the evidence because: (1) there
    was no agreed statement of facts, as ordered by the trial assignment court judge;
    (2) there was no sworn testimony on the matter before the trial judge; and (3)
    the trial judge faced two varying and contradictory statements of fact on the
    source of funds for the purchase of the SS Annuity.

[30]

Accordingly, the appellant argues, unless this court determines that the
    SS Annuity payments are to be treated as income, the Order must be set aside
    and the matter remitted to be tried on a full factual record, including expert
    actuarial evidence on the nature of the amounts that comprised the $302,306 used
    to purchase the SS Annuity.

[31]

The respondent argues that the parties
    respective statements of facts were essentially the same. They agreed on the
    terms of the Minutes of Settlement and the amounts awarded for each head of
    damages within the settlement.  They also agreed that part of the settlement monies
    had been used to purchase the SS Annuity.  The trial judge considered the
    evidence and documents tendered by both parties and the appellant argued the Legal
    Issue in the absence of an agreed statement of facts and without objecting to
    the process.

[32]

In the circumstances, the respondent
    argues, there is no basis for the appellant to now complain about the process
    that the trial judge followed in finding that the SS Annuity was property within
    the meaning of the Act and was not excluded property under s. 4(2)3.

Analysis

[33]

As I explain below, in my view, the payments that Ms. Hunks receives
    from the SS Annuity ought properly to be treated as income.  In light of the
    appellants concession that she would not pursue this ground of appeal if the
    court so concluded, I would not give effect to this ground of appeal.

[34]

Having said that,
the force of the appellants
    submission on one aspect of this ground of appeal warrants comment.

[35]

I begin by stating that I do not accept
    the appellants complaint about the process followed by the trial judge in
    deciding the Legal Issue (
i.e.
whether the SS Annuity is to be treated
    as income or property under the Act).  The Legal Issue is a question of law and
    was fully argued by both parties.  There was no dispute between the parties on the
    facts relied on by the trial judge in deciding the Legal Issue.  It would have been
    preferable for the Legal Issue to have been decided in the context of an agreed
    statement of facts, as required by the Trial Assignment Court Order.  However,
    in the circumstances of this case, I see no procedural unfairness or prejudice
    to either party in the Legal Issue having been decided in its absence.

[36]

However, I do have concerns about the
    process followed in determining whether the SS Annuity, if treated as property,
    would then qualify as excluded property under s. 4(2)3.

[37]

After finding, as a matter of law, that
    the SS Annuity payments are property for the purposes of Part 1 of the Act, the
    trial judge went on to decide whether the SS Annuity payments were excluded
    property under s. 4(2)3.  The trial judge recognized that the s. 4(2)3 issue required
    a factual determination as to what part of the settlement monies had been used
    to purchase the SS Annuity.  The trial judge then proceeded to make the Finding
    that the SS Annuity had been purchased using the sum included in the settlement
    monies for future income loss.

[38]

In the circumstances, making that Finding raises questions of procedural
    fairness.

[39]

Rule 2(2) of the
Family Law Rules
, O. Reg. 114/99 (the Rules)
    provides that the primary objective of the Rules is to enable the court to
    deal with cases justly.  Rule 2(3)
[4]
empowers the court, when dealing with a case, to take into consideration saving
    expense and time.  However, rule 2(3) is clear that dealing with a case justly
    includes ensuring that the procedure is fair to all parties.  While it may have
    appeared expeditious to decide the s. 4(2)3 issue immediately after having
    decided the Legal Issue, the approach taken to deciding the s. 4(2)3 issue in
    this case raises procedural fairness concerns.  I make four points in this
    regard.

[40]

First, t
he Trial Assignment Court Order
    provides that the trial was to begin with legal argument on whether the SS Annuity
    is property or income.  That order does not go further and provide that if the
    trial judge found the SS Annuity to be property, she was to decide whether it
    was excluded property under s. 4(2)3.  Had it been intended that the s. 4(2)3
    issue was to be decided at the outset of the trial, that should have been made
    clear in the Trial Assignment Court Order so that everyone  the parties and
    the trial judge  could govern themselves accordingly.  As it was, it would not
    have been clear to the appellant that she faced the jeopardy of having the s.
    4(2)3 issue decided against her at the outset of trial before evidence had been
    adduced.

[41]

Second, the Finding required the trial
    judge to make a factual determination but there was no evidence before the
    court.  While the parties did make legal submissions on the s. 4(2)3 issue and
    there were some unsworn documents before the court in the form of a book of
    documents, there was no evidence before the court.  Nor was there an agreed
    statement of facts, as required by the Trial Assignment Court Order.

[42]

Third, there was a factual dispute
    between the parties on how the settlement monies had been used in respect of
    the purchase of the SS Annuity, a matter that went to the heart of the
    requisite factual determination on the s. 4(2)3 issue.  Indeed, that factual
    dispute was the reason that the parties had been unable to produce the agreed
    statement of facts.  Furthermore, the appellant wished to lead evidence on how
    the SS Annuity had been funded and advised the trial judge of that.

[43]

Fourth, the Finding was not made in the
    context of a contested motion.  Rather, it was made at the outset of the
    parties trial.

[44]

In these circumstances, given the serious
    financial implications of the Finding for the parties and bearing in mind its
    complexity and importance, procedural fairness dictates that the question of
    whether the SS Annuity was excluded property under s. 4(2)3 ought to have been left
    to the trial, so that it could be decided after evidence had been led and the
    necessary findings of fact had been made.

[45]

Having said that, I would simply
    reiterate that because I have concluded that the SS Annuity payments are
    properly treated as income, I would not give effect to this ground of appeal.

Issue #2      Did the trial judge
    err in finding that the SS Annuity payments                               are property?

The Parties
    Positions

[46]

The appellant submits that the reasoning
    of this court in
Lowe v. Lowe
(2006), 78 O.R. (3d) 760 (C.A.)
    leads to the conclusion that the SS Annuity payments should be treated as
    income and not property.  She argues that the SS Annuity arose as a result of her
    having suffered serious injury caused by a third party, an event that was wholly
    personal to her and independent of the marriage partnership.  She also notes
    that the SS Annuity was funded by the personal injury claim settlement monies
    and was not acquired through savings.  Therefore, she contends, the SS Annuity payments
    are comparable to a future income stream based on personal service and are not
    property within the meaning of Part 1 of the Act.

[47]

The respondent submits that the SS Annuity
    was property that the appellant owned on the valuation date.  He contends that
    the appellant received the whole of the settlement monies  which included a
    lump sum for future income loss  during the marriage and used a part of those
    monies to buy the SS Annuity.  Accordingly, he says, the remaining SS Annuity
    payments are property within the meaning of the Act. He also argues that the SS
    Annuity payments are akin to a pension and therefore property within the
    meaning of the Act.

[48]

The respondent further argues that, on a
    balance of probabilities, it is reasonable to infer that the head of damage of
    future income loss of $302,100 in the settlement was used to purchase the SS Annuity
    at a cost of $302,306.  Alternatively, he says that the settlement monies were
    commingled and lost their identity when the SS Annuity was purchased in 1999,
    at which point the parties were married.

Analysis

[49]

I agree with the appellant that the SS Annuity payments should be considered
    as income for the purposes of spousal support, and not property under Part 1 of
    the Act.  I reach this conclusion for two reasons: (1) the SS Annuity arises
    from a structured settlement; and (2) the SS Annuity is analogous to disability
    benefits and not to a pension.   As I have concluded that the SS Annuity is not
    property under Part 1 of the Act, the s. 4(2)3 issue does not arise.
    Consequently, I will say nothing further about that issue.

1.

The SS Annuity
    arises from a Structured Settlement

[50]

The respondent contends that the appellant received all of the
    settlement monies during the marriage and purchased the SS Annuity with a
    portion of those monies.  The fact that the SS Annuity arose from a structured
    settlement is a full answer to this contention.

[51]

A structured settlement is created when some or all of a personal injury
    settlement is deposited with a life insurance company in exchange for
    guaranteed tax-free payments for a specific number of years or for the
    recipients lifetime.  While it is usual to structure the payments so that the
    recipient receives them monthly, the structure can also include periodic lump
    sums (as in this case).  If so, the lump sums are also received tax-free.  The
    Canada Revenue Agency (CRA) does not view payments from a structured
    settlement as income.

[52]

In these reasons, I have referred to the payments received from the
    structured settlement as an annuity but it will be readily apparent that
    structured settlements are a very specialized type of annuity.  For example, unlike
    other annuities, an individual cannot purchase a structured settlement.

[53]

The requirements for a structured settlement can most easily be
    understood by reading para. 5 of the CRAs
Interpretation Bulletin

(IT-365R2),
    published May 8, 1987:

5. A "structured settlement" is a means of
    paying or settling a claim for damages, usually against a casualty insurer, in
    such a way that amounts paid to the claimant as a result of the settlement are
    free from tax in the claimant's hands. To create such a structured settlement
    the following conditions must be complied with:

(a) a claim for damages must have been made in
    respect of personal injury or death,

(b) the claimant and the casualty insurer must
    have reached an agreement under which the latter is committed to make at least
    periodic payments to the claimant for either a fixed term or the life of the
    claimant,

(c) the casualty insurer must

(i) purchase a single
    premium annuity contract which must be non-assignable, non-commutable,
    non-transferable and designed to produce payments equal to the amounts, and at
    the times, specified in the agreement referred to in (b),

(ii) make an
    irrevocable direction to the issuer of the annuity contract to make all
    payments thereunder directly to the claimant, and

(iii) remain liable to
    make the payments as required by the settlement agreement (i.e., the annuity contract
    payout).

As a consequence of compliance with the foregoing
    conditions,
the casualty insurer is the owner of, and annuitant
    (beneficiary) under, the annuity contract
and must report as income the
    interest element inherent in the annuity contract while the payments received
    by the claimant represent, in the Department's view, non-taxable payments for
    damages.  [Emphasis added.]

[54]

There is no dispute between the parties that the SS Annuity was the
    result of a structured settlement that complied with the conditions set out
    above.  The statement of facts that each party provided to the trial judge
    stated that the balance of the lump sum settlement in the amount of $302,100
    was placed into a single premium annuity with Sun Life Assurance that was
    assigned by CIGNA Insurance Company to Kingsway General Insurance Company, with
    Ms. Hunks to receive irrevocable payments commencing December 15, 1999, for a
    minimum guarantee period to December 15, 2024.

[55]

As the SS Annuity arose from the structured settlement, it is clear that
    Ms. Hunks never received that part of the settlement monies that was used to
    buy the SS Annuity.  The casualty insurer purchased the SS Annuity and made an
    irrevocable direction to the issuer of the annuity contract to make all
    payments directly to Ms. Hunks.  If, as the respondent contends, Ms. Hunks
    received the settlement monies and then bought the SS Annuity, it could not be
    a structured settlement because an individual cannot purchase a structured
    settlement.  But, as both parties acknowledge, Ms. Hunks is receiving tax-free
    payments from the SS Annuity because it arose from a structured settlement.  Accordingly,
    while Ms. Hunks receives payments from the SS Annuity, she does not own it nor
    did she have constructive receipt of the settlement monies used to create it.

[56]

Thus, once we understand the process by which a structured settlement is
    created, it becomes clear that Ms. Hunks did not receive the whole of the
    settlement monies during the marriage.  She did receive almost $200,000 during
    the marriage, by way of a lump sum payment from the settlement, and she used
    that money for the benefit of the family.

[5]
However, Ms. Hunks did not receive the balance of the settlement monies.
    Instead, those monies were used to create a structured settlement that entitles
    her to receive the SS Annuity payments.

2.

The SS Annuity is
    more analogous to Disability Benefits than to a Pension

[57]

The fact that the SS Annuity payments arise from a structured settlement
    does not, however, fully answer the question of whether the SS Annuity payments
    should be treated as property or income for the purposes of the Act.  In my
    view, payments received from a structured settlement annuity are analogous to
    disability benefits and, therefore, should be treated as income.

[58]

At para. 17 of
Lowe
, Sharpe J.A. said the following about
    disability benefits:

I agree with Aitken J. [at para. 113 of
Hamilton
] that
    the purpose of the disability payments is to replace in whole or in part the
    income that the person would have earned had he or she been able to work in the
    normal course. This makes disability benefits more comparable to a future
    income stream based on personal service than to either a retirement pension
    plan (explicitly included in family property by s. 4(1)), or to a future stream
    of payments from a trust (held to constitute property in
Brinkos
).  disability
    benefits replace income during the working life of the employee and therefore
    are appropriately treated as income for purposes of equalization and spousal
    support. As Aitken J. put it at para. 115, a disability pension is simply the
    flip side of employment or self-employment income.

[59]

Like the disability benefits in
Lowe
, the SS Annuity payments replace,
    in whole or in part, the employment income that Ms. Hunks would have earned had
    she been able to work. The SS Annuity payments give her financial support because
    she cannot work. They are, therefore, of the same nature as the income that she
    would have earned had she not been injured.  Just as disability benefits are more
    comparable to a future income stream based on personal service than a
    retirement pension, so too are the SS Annuity payments.  Annuities are usually
    purchased with savings.  Not so the structured settlement annuity.  As we have
    seen, an individual cannot purchase a structured settlement annuity.  Furthermore,
    structured settlements can only arise from a settlement for a damages claim
    based on personal injury or death.  Clearly, the SS Annuity was not purchased
    from personal savings nor is it a form of savings.  The SS Annuity, as a
    structured settlement, is designed to provide income to Ms. Hunks that she
    would have been able to earn, had she not been injured.

[60]

Equally clearly, the SS Annuity is not like an employment pension plan,
    where entitlement accrues with service.

[61]

While I have concluded that structured settlement payments received
    after separation to replace future wages are not shareable as property, I leave
    for another day whether this analysis would apply in a case where it is found
    that a significant portion of the funds used to create the structured
    settlement is attributable to damages for a third partys claim.  In the
    present case, that consideration does not arise.  The amount of the settlement
    attributable to Mr. Hunks claim was a very small percentage of the total
    settlement ($8,000 out of a total settlement of $571,383 or approximately 1.4%).
    Furthermore and in any event, Mr. Hunks has received the benefit of far more
    than the amount attributable to the damages awarded for his claim.  Ms. Hunks
    used the $200,000 lump sum she received from the settlement for the benefit of
    the family, including Mr. Hunks.  She also used the structured settlement
    payments that she received for approximately 12 years of the time that she was
    married to Mr. Hunks for the benefit of the family, including Mr. Hunks.

[62]

Finally, I reject the notion that the SS Annuity payments should be treated
    as property because Ms. Hunks has a fixed entitlement to them.  This idea was addressed
    and rejected at
para. 24 of
Lowe
.
Sharpe J.A. said the following:

It might be argued that the husbands permanent disability
    pension, payable for life, should be included as property as it is a fixed
    entitlement, apparently not contingent on the husband establishing disability
    on an ongoing basis. I would reject this argument. It seems to me preferable
    from the perspective of clarity and predictability to treat all disability
    benefits the same whether they are calculated strictly in terms of lost income or
    as compensation for impairment to earning capacity.

[63]

For all of these reasons, the SS Annuity payments should be treated as
    income and not property for the purposes of the Act.

DISPOSITION

[64]

Accordingly, I would allow the appeal, set aside the Order and make an
    order declaring that, for the purposes of the Act, the SS Annuity payments
    post-separation are to be treated as income to Ms. Hunks and not as property.

[65]

I would award the appellant costs of the appeal fixed at $10,000, all
    inclusive.  If the parties are unable to agree on the costs below, they may
    make written submissions on that matter, to a maximum of three pages, such
    submissions to be filed with the court within 10 days of the date of the
    release of these reasons.

Released: March 27, 2017
    (E.E.G.)

Eileen
    E. Gillese J.A.

I
    agree. J. MacFarland J.A.

I
    agree. S.E. Pepall J.A.

[1]

This is the figure shown on the Minutes of Settlement.  A
    slightly different figure appears elsewhere in the record, including the
    reporting letter from Ms. Hunks personal injury lawyer, which is discussed
    below.

[2]

Ms. Hunks was born on December 22, 1954, and is now 62 years
    of age.  Mr. Hunks was born on August 11, 1949, and is now 67 years of age.

[3]
Ms. Hunks asserts, and Mr. Hunks accepts for the purposes of this appeal,
that Ms. Hunks receives a monthly payment of $1500 from the
    Annuity.  However, elsewhere in the record, there is an indication that the
    monthly amount is approximately $1,800.

[4]

Rule 2(3) reads as follows:

Dealing with
    a case justly includes,

(a) ensuring
    that the procedure is fair to all parties;

(b) saving
    expense and time;

(c) dealing
    with the case in ways that are appropriate to its importance and complexity;
    and

(d) giving appropriate
    court resources to the case while taking account of the need to give resources
    to other cases.

[5]

She also received payments from the SS Annuity, from December
    of 1999 to October 2011 (the date of separation).  Those payments, too, were
    used for the benefit of the family.


COURT OF APPEAL FOR ONTARIO

CITATION: ICICI Bank Canada v. Thompson, 2017 ONCA 202

DATE: 20170307

DOCKET: C62071

Juriansz, Brown and Miller JJ.A.

BETWEEN

ICICI Bank Canada

Plaintiff (Respondent)

and

Dwight Thompson and Nicole Thompson

Defendants (Appellants)

No one appearing for the appellants

James M. Butson and Cristina Internicola, for the
    respondent

Heard: March 2, 2017

On appeal from the judgment of Justice Stanley J.
    Kershman of the Superior Court of Justice, dated April 15, 2016.

APPEAL BOOK ENDORSEMENT

[1]

This appeal was scheduled for
    10:00 a.m. The appellants did not appear though the case was held down until
    11:25 a.m. The appellants had earlier requested an adjournment, and the
    adjournment was refused.

[2]

As the appellants did not appear
    for the hearing of the appeal, the appeal is dismissed as abandoned.

[3]

The respondent's costs of the
    appeal are fixed in the amount of $5,000.00 all inclusive.


COURT OF APPEAL FOR ONTARIO

CITATION: Kent v. Chin and Orr Lawyers, 2017 ONCA 223

DATE: 20170320

DOCKET: M47417 (C62928)

Epstein, Benotto and Trotter JJ.A.

BETWEEN

Paul Kent

Appellant (Responding Party)

and

Chin and Orr Lawyers and Alousis Law
    Professional Corporation

Respondents (Moving Parties)

Paul Kent, acting in person

Sabrina Lucenti, for the respondents, Chin and Orr
    Lawyers

Alexander Melfi, for the respondent, Alousis Law Professional
    Corporation

Heard and released orally: March 16, 2017

On a motion to quash the appeal from the judgment of
    Justice Susan E. Healey of the Superior Court of Justice, dated October 18,
    2016.

ENDORSEMENT

[1]

The respondent's move to quash
    this appeal for want of jurisdiction.

[2]

In this action, the appellant
    claims damages in connection with his purchase of property. Originally, the
    appellant's claim was advanced in two actions  one against each respondent.
    The actions were then consolidated. The appellant brought a motion for default
    judgment against the respondents on the basis of their failure to deliver
    amended statements of defence in the consolidated action.

[3]

The motion judge dismissed the
    motion for default judgment for reasons including that the appellant had failed
    to require Registrar to note the respondents in default (r.19.01).

[4]

The respondents take the position
    that the order appealed from is interlocutory.

[5]

We agree. The order under the
    appeal does not finally determine any issue in this proceeding. It is therefore
    interlocutory. Jurisdiction lies with the Divisional Court.
Hendrickson
    v. Kallio
, [1932] O.J. No. 380 (C.A.).

[6]

The appeal is quashed without
    prejudice to the appellant's right to apply to the Divisional Court for leave
    to appeal.

[7]         We order costs in the amount of $1,500 to each of the two moving parties, all inclusive.

[8]
Approval of this order as to form
    and content is dispensed with.
"Gloria Epstein J.A."
"M.L. Benotto J.A."
"G.T. Trotter
    J.A."


COURT OF APPEAL FOR ONTARIO

CITATION: Lixo Investments Limited v. FCHT Holdings

(Ontario) Corporation, 2017 ONCA 239

DATE: 20170324

DOCKET: C62243

Rouleau, Pepall and Roberts JJ.A.

BETWEEN

Lixo Investments Limited

Appellant (Applicant)

and

FCHT Holdings (Ontario)
    Corporation
, Priestly Demolition Inc., Traugott Building Contractors
    Inc., City of Toronto and Ann Borooah, in her capacity as Chief Building
    Official

Respondent
(Respondents)

Peter-Paul E. Du Vernet, for the
    appellant

Molly Reynolds and Eliot Che, for the respondent

Heard: March 21, 2017

On appeal from the order of Justice James Diamond of the Superior
    Court of Justice, dated June 15, 2016.

ENDORSEMENT

[1]

The respondent acquired 86 Yorkville Avenue several months after a fire
    originating in the building caused extensive damage to the property and to the
    appellants adjoining property at 84 Yorkville Avenue. The properties are semi-detached
    and share a common dividing wall. The appellant brought an application seeking
    various relief, including recovery of losses suffered as a result of the fire
    and subsequent conduct of the respondent and its predecessor in title that
    impaired the appellants ability to use its property.

[2]

The appellant argues that the application judge erred in dismissing part
    of the relief sought. Specifically, it argues that the application judge erred
    in concluding that the respondent did not, as a result of it having purchased 86
    Yorkville Avenue, become liable for the damages allegedly caused to the
    appellant prior to the respondents purchase of 86 Yorkville Avenue.

[3]

We disagree with the appellants submission. In our view, the
    application judge committed no reversible error.

[4]

On the facts of this case, the respondent had no involvement in and
    cannot be responsible for the appellants damages accrued before the respondent
    acquired 86 Yorkville Avenue. As acknowledged by the respondent, the
    application judges decision does not prevent the appellant from proceeding
    with its claims against the respondent for any damages suffered by the appellant
    during the period of the respondents ownership of the property that are caused
    by the respondents tortious conduct.

[5]

We also see no basis to interfere with the application judges costs
    award. Deference is owed to judges determination of the appropriate award of
    costs. We see no basis to interfere with the application judges decision.

[6]

The respondent seeks $37,927.89 in partial indemnity costs for the
    appeal. In our view this amount is excessive in light of the nature of the
    appeal and taking into account the reasonable expectations of the parties. Of
    note is the fact that, had the appellant been successful, it sought only
    $10,261.13.

[7]

As a result, the appeal is dismissed. The respondent is entitled to its
    costs on a partial indemnity basis fixed in the amount of $10,000 inclusive of
    disbursements and applicable taxes.

Paul Rouleau J.A.

S.E. Pepall J.A.

L.B. Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Mihaylov v. 1165996 Ontario Inc., 2017 ONCA 218

DATE: 20170316

DOCKET: C61890

Gillese, Benotto and Roberts JJ.A.

BETWEEN

Emil Mihaylov and Sofia Mihaylov

Applicants (Appellants)

and

1165996 Ontario Inc. and Donald Abel

Respondents (Respondents)

Stephen R. Jackson, for the appellants

Ryan O'Neill, for the respondents

Heard: November 25, 2016

Reasons concerning costs, supplementary to the judgment
    in
Mihaylov v. 1165996 Ontario Inc.
, 2017 ONCA 116, released on February
    13, 2017.

Gillese
    J.A.:

[1]

By reasons dated February 13, 2017 (the Decision), this court allowed
    the appeal, in part, in this matter.  The Decision affirmed the validity of the
    easement granted in the 1979 Agreement that is registered against the parties
    respective properties.  However, in all other regards, the appellants were
    successful.  Costs of the appeal were ordered in favour of the appellants in
    the amount of $3,000, all inclusive.

[2]

At para. 131 of the Decision, the court indicated that if the parties
    were unable to resolve the matter of costs of the Application and
    Counter-Application below (the Proceedings Below), they could make written
    submissions on that matter.  The parties have been unable to resolve that
    matter and the court has now received and reviewed their costs submissions in
    relation to it.

The Parties Positions on
    Costs of the Proceedings Below

[3]

The appellants seek costs of the Proceedings Below on a substantial
    indemnity basis in the amount of $14,440.  They say that, bearing in mind the
    result on appeal, they were substantially successful in the Proceedings Below because
    their position on the scope of the easement and the rights that flow therefrom
    was upheld.  The appellants then point to the general principle this court
    follows when an appeal is allowed: the order for costs below is set aside and
    costs are awarded to the successful party:
Hunt v. TD Securities Inc.
(2003),
    43 C.P.C. (5th) 211 (Ont. C.A.), at para. 2.

[4]

The appellants acknowledge that the costs of the Proceedings Below would
    normally be on a partial indemnity basis which, in this case, would be just
    over $12,000. However, they ask this court to express its disapproval of the
    respondents actions by making the costs award on a substantial indemnity basis.
    In support of this argument, the appellants have attached to their costs
    submissions copies of correspondence between counsel since the Decision was
    released.  They say that this correspondence shows that there never was a leak
    in the pipeline so the respondents never had an immediate need to repair it and,
    in turn, that means that the Proceedings Below were unnecessary.

[5]

The respondents submit that the parties should bear their own costs of
    the Proceedings Below.  They dispute the suggestion that there was no leak in
    the pipeline. They say that success below was divided, noting that their contention
    that a valid easement had been created and continued to exist was upheld on
    appeal.  Consequently, their right to draw water from Sturgeon Lake by means of
    the pipeline that runs below the appellants land was affirmed.

[6]

The respondents acknowledge that the appeal resulted in them losing on
    the issue of the scope of the easement, including their right to enter on the
    appellants land to effect repairs without the appellants prior permission and
    to lay a new pipeline.  They also acknowledge that when an appeal is allowed,
    the general principle is that the order for costs below is set aside and costs
    are awarded to the successful party on a partial indemnity basis.  However,
    they point to the courts discretion to depart from this approach in unusual
    circumstances:
Kopij v. Metropolitan Toronto (Municipality)
(1999), 85
    A.C.W.S. (3d) 763 (Ont. C.A.), at para. 2.  They say that the facts of this
    case are unusual circumstances warranting a departure from the usual approach.

Analysis

[7]

I do not view this matter as amounting to unusual circumstances such
    that the court should exercise its discretion and depart from its usual
    approach when deciding on costs of the Proceedings Below.  This was a civil
    dispute which required the court to rule on legal questions so that the parties
    could clearly know what their respective rights and obligations were and, with
    that clarity, govern themselves accordingly.

[8]

However, it is important to note that the appeal in this matter was
    allowed only in part.  Accordingly, while the order for costs below must be set
    aside, it does not automatically follow that the appellants are entitled to
    their full costs of the Proceedings Below.  The quantum of costs must reflect
    the fact that there was divided success in those proceedings.  In my view, the
    appellants enjoyed greater success.  While the respondents succeeded on the
    question of whether a valid easement had been created and continued to attach
    to each of the parties lands, the appellants succeeded on the issues that drove
    the Proceedings Below  namely, whether the respondents could enter onto the
    appellants lands without their prior permission to repair the pipeline and
    whether the respondents had the right to replace the existing pipeline.

[9]

As for the scale of costs, I am not satisfied that the court should
    depart from the general principle that costs are to be awarded on a partial
    indemnity basis.  The finding of reprehensible behaviour warranting the
    sanction of costs on a substantial indemnity basis is not to be made lightly.
    The suggestion made about the respondents conduct is based on correspondence that
    arose after the conclusion of these proceedings and which has not been tested
    in the crucible of litigation.  The meaning to be taken from that
    correspondence is disputed.  To resolve that dispute would require the court to
    make credibility findings.  Those types of findings cannot be made on the basis
    of the record before the court.

DISPOSITION

[10]

For these reasons, I would order costs of the Proceedings Below in
    favour of the appellants fixed at $8,000, all inclusive.

Released: March 16, 2017 (E.E.G.)

Eileen E. Gillese J.A.

I agree. M.L. Benotto J.A.

I agree. L.B. Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Mikhail v. Cole, 2017 ONCA 262

DATE: 20170330

DOCKET: C62690

Feldman, Sharpe, and Roberts JJ.A.

BETWEEN

Michael Mikhail

Appellant
(Plaintiff)

and

Deidre Joyce Cole o/a Deidre Marinelli, Robert
    Cole,
Mary Lou Bousfield by her Litigation Guardian Robert Cole

Respondents
(Defendants)

Michael Mikhail, in person

Aleksandar Jovanovic, for the respondents

Heard: March 27, 2017

On appeal from the order of Justice Michael R. Gibson
of the Superior Court of Justice,
dated
    August 24, 2016
.

ENDORSEMENT

[1]

The appellant appeals the dismissal of his civil action to obtain
    damages against his former spouse and her parents for alleged fraudulent
    concealment of assets. The appellant submits that the motion judge erred in
    dismissing his action as an abuse of process. He argues that he should be
    permitted to continue with his action in the interests of justice because he
    will otherwise be without recourse.

[2]

We disagree.

[3]

As the motion judge correctly found, the appellants claim for damages
    is premised on his alleged entitlement to an equalization payment, which is
    governed by the
Family Law Act
, R.S.O. 1990, c. F-3, and which
    therefore can only be pursued in family law proceedings.

[4]

The appellants claim for equalization of net family property is
    proscribed by s. 7(3) of the
Family Law Act
, which prohibits him from
    bringing such a claim after the earliest of either two years from the date of the
    September 27, 2009 divorce order or six years from the date of separation in
    early 2006. However, the appellant is not necessarily without recourse.

[5]

If the appellant can satisfy the criteria for an extension of time under
    s. 2(8) of the
Family Law Act
to bring an application for equalization
    under s. 5 of the Act, he may add the respondents as parties to the proceedings
    under r. 7 of the
Family Law Rules
, O. Reg. 114/99.  See also, for
    example,
Stone v. Stone
(1999), 46 O.R. (3d) 31; affd, (2001), 55
    O.R. (3d) 491 (C.A.), where affected parties, other than spouses, were named as
    parties in family law proceedings, in relation to the adjudication of an
    alleged fraudulent conveyance.

[6]

As a result, we see no error in the motion judges dismissal of the appellants
    action. There is no basis to interfere.

[7]

Accordingly, the appeal is dismissed.

[8]

The respondents are entitled to their partial indemnity costs of the
    appeal in the amount of $4,500 inclusive of disbursements and HST.

K. Feldman J.A.

Robert J. Sharpe
    J.A.

L.B. Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Miracle v. Maracle III, 2017 ONCA 195

DATE: 20170306

DOCKET: C62656

Sharpe, Lauwers and Hourigan JJ.A.

BETWEEN

Andrew Clifford Miracle

Appellant

and

Andrew Clifford Maracle III, Jasmine Johnson and
    The Canadian Imperial Bank of Commerce (CIBC)

Respondents

Glenn Bogue, for the appellant

Alannah Fotheringham, for the respondent, CIBC and for
    the proposed parties, Sherry Walker and Victor Dodig

Roger Horst and Rafal Szymanski, for the proposed party,
    Chief R. Donald Maracle

Heard: March 1, 2017

On appeal from the order of Justice Wolfram Tausendfreund
    of the Superior Court of Justice, dated June 15, 2016.

By the Court:

A.       Objection to the panel assigned to hear this appeal

[1]

At the outset of oral argument, counsel for the appellant asked that
    this appeal be heard by a differently constituted panel. He objected to Sharpe
    J.A. sitting on the appeal because he was a member of the panel that decided
Tyendinaga
    Mohawk Council v. Brant
, 2014 ONCA 565, 121 O.R. (3d) 561, a case in which
    certain parties to the present appeal were involved. Counsel further objected
    to Hourigan J.A. sitting on the appeal because, prior to his appointment as a
    judge, he had been a senior member of the staff in the office of the Attorney
    General for Ontario. Counsel submitted that because of these prior
    associations, a reasonable apprehension of bias arises.

[2]

The test for reasonable apprehension of bias laid down and consistently
    endorsed by the Supreme Court of Canada is:

what would an informed person, viewing the matter realistically
    and practicallyand having thought the matter throughconclude. Would he think
    that it is more likely than not that [the decision-maker], whether consciously
    or unconsciously, would not decide fairly.  (
Yukon Francophone School
    Board, Education Area No. 23 v. Yukon Territory (Attorney General
), 2015
    SCC 25, [2015] 2 S.C.R. 282, at paras. 20-21

[3]

The reasonable observer is not a person with a very sensitive or
    scrupulous conscience:
R. v. S.
(
R.D.
), [1997] 3 S.C.R. 484,
    at para 31.  Rather, it is the sort of person who always reserves judgment on
    every point until she has seen and fully understood both sides of the argument
    and who takes the trouble to read the text of an article as well as the
    headlines:
Helow v. Secretary of State for the Home Department
,
    [2008] UKHL 62, [2008] 1 W.L.R. 2416 (U.K. H.L.), at para. 3.

[4]

In our view, that test is not met in the circumstances of this appeal.
    The issues arising in
Tyendinaga Mohawk Council v. Brant
were strictly
    legal in nature and quite distinct from the issues posed on this appeal. A reasonable
    observer would not conclude that, because a judge has ruled against a party on
    a legal issue in one case, that judge, whether consciously or unconsciously,
    would likely be biased when deciding a different legal issue with respect to that
    same party in another case.

[5]

Moreover, there is absolutely no connection between anything done in the
    course of Hourigan J.A.s prior employment in the office of the Attorney
    General of Ontario and the issues raised on this appeal. There is no merit to
    the appellants contention that Hourigan J.A.s prior employment gives rise to
    a reasonable apprehension of bias.

[6]

We further note that, when this appeal was listed for hearing last week,
    counsel for the appellant made similar allegations of bias against a
    differently constituted panel. That panel ruled that, while there was no
    substance to those allegations, the case would be adjourned to a different
    panel. The repetition of the same complaint today reveals a pattern of conduct
    on the part of counsel that cannot be condoned. Unfounded claims of bias and repeated
    requests for adjournments cause delay and impose added cost to other litigants
    and the court system. Judges have a duty to sit and hear cases to ensure proper
    and expeditious justice. They must not be dissuaded from fulfilling that duty
    by groundless allegations of bias.

[7]

We adopt, for the purposes of this appeal, the following statement made
    by Doherty J.A. in
Beard Winter LLP v. Shekhdar
, 2016 ONCA 493, [2016]
    O.J. No. 3257, at para. 10:

It is important that justice be administered impartially.  A
    judge must give careful consideration to any claim that he should disqualify
    himself on account of bias or a reasonable apprehension of bias.  In my view, a
    judge is best advised to remove himself if there is any air of reality to a
    bias claim. That said, judges do the administration of justice a disservice by
    simply yielding to entirely unreasonable and unsubstantiated recusal demands.
    Litigants are not entitled to pick their judge.  They are not entitled to
    effectively eliminate judges randomly assigned to their case by raising
    specious partiality claims against those judges.  To step aside in the face of
    a specious bias claim is to give credence to a most objectionable tactic.

B.      The appeal

[8]

The appellant appeals the dismissal of his motion seeking to:

·

add
    Chief R. Donald Maracle, Victor Dodig, Sherry Walker and Donald A Maracle as co-defendants,
    and seeking damages jointly and severally against those parties in the amount
    of $76 million;

·

claim
    an order striking down the
Indian Act
,
    R.S.C. 1985, c. I-5,

and declaring land north of the 49th parallel
    to be held communally;

·

claim
    punitive damages in the amount of $24 million; and

·

claim
    costs on a solicitor and client basis.

[9]

This action, as presently constituted, is brought by the appellant
    against his son, his sons wife, and the Canadian Imperial Bank of Commerce
    (CIBC). It arises out of a partnership between father and son involving a
    tobacco and convenience store business and a dispute concerning an account the
    business had at the CIBC. None of the proposed defendants are parties to that
    dispute and there are no allegations made against those proposed defendants in
    the pleadings.

[10]

The motion was brought without leave after the action had been set down
    for trial. Because the appellant failed to obtain leave to bring the motion,
    the motion judge dismissed it on the basis of rule 48.04(1). That rule provides
    that, subject to certain exceptions not relevant to this case, any party who has
    set an action down for trial  shall not initiate or continue any motion or
    form of discovery without leave of the court.

[11]

The appellant asks this court to reverse the decision of the motion
    judge and to proclaim a decree of default judgment against various parties.
    He raises a number of grounds of appeal, including the submission that the
    motion judge erred by failing to move [the court] into its exclusive equitable
    jurisdiction. He submits that this case should be referred to a court of
    equity as it existed prior to 1881 and that this court lacks jurisdiction
    because of the appellants alleged Métis status.

[12]

There is no merit to those arguments or to any of the other arguments
    raised by the appellant. They are entirely lacking in any legal foundation.

[13]

The appellant has brought his action in the Superior Court of Justice
    and he must abide by the
Rules of Civil Procedure
. His Aboriginal or Métis
    status does not exempt him from those rules. The appellants motion to add additional
    parties after the action had been set down for trial without first obtaining
    leave is a plain breach of rule 48.04(1). The appellant has failed to
    demonstrate any error made by the motion judge in dismissing the motion.

[14]

The appeal is dismissed, with costs to the respondents CIBC, Victor
    Dodig and Sherry Walker fixed at $7,500 and costs to the respondent Chief R.
    Donald Maracle fixed at $7,500. Both figures are inclusive of disbursements and
    applicable taxes.

[15]

We order that the appellant shall not be permitted to take any further
    actions against any of these parties without leave of a judge of this court if
    those costs have not first been paid. The costs we have ordered may be enforced
    in the same manner as provided in paras. 7, 8, 9 and 10 of the order of Tranmer
    J. dated August 14, 2013. Approval of the formal order is dispensed with.

Released: March 6, 2017

Robert J. Sharpe J.A.

P. Lauwers J.A.

C.W. Hourigan J.A.