CITATION:
Beck v. Beckett, 2011
          ONCA 559

DATE: 20110822

DOCKET: C51887

COURT OF APPEAL FOR ONTARIO

Rosenberg, Moldaver and Feldman JJ.A.

BETWEEN

Brenda Yvette Beck

Appellant

and

Daniel Clifford Beckett

Respondent

Erin L. Reid, for the appellant

Charles S. Morison, for the respondent

Heard: March 15 and 16, 2011

On appeal from the judgment of Justice P. Z. Magda of the
          Superior Court of Justice, dated March 2, 2010 and from the Cost Endorsement
          of Justice Magda dated May 19, 2010.

Rosenberg J.A.:

[1]

Brenda Beck appeals the judgment of Magda J. relating
    to child and spousal support under the
Family
    Law Act,
R.S.O. 1990, c. F.3.  The
    claim for support arises out of the breakdown of a twenty-two year relationship
    between the appellant and the respondent, Daniel Beckett.  The principal issues raised by the appellant
    concern the amount of income imputed to the respondent and the trial judges
    decision to refuse to make an order for lump sum spousal support.  The appellant also seeks leave to appeal the
    costs order made by the trial judge.

[2]

For the following reasons, I would allow the appeal in
    part.

THE FACTS

[3]

The appellant and the respondent began living together
    in 1984.  At the time, she was working at
    Woolco and he was working at General Motors in Scarborough.  The appellant stopped working in 1990 with
    the birth of their first child.  A second
    child was born in 1992.  The appellant assumed
    primary responsibility for the care of the children and left full-time
    employment.  However, she did some
    part-time work at Costco to supplement the family income.

[4]

Although the parties were not married this was in all
    respects a traditional relationship.  The
    appellant took on primary responsibility for raising the children and keeping
    the household.  The familys principal
    source of income was the respondents full-time employment at General Motors,
    first in Scarborough and later at the plant in Oshawa.  He is also a skilled handyman, but did not
    apparently earn any income from this skill.

[5]

The parties separated in September 2006 and the
    respondent began a relationship with another woman.  He now has a young child from this new
    relationship.  When the parties separated,
    the respondent had an annual income from General Motors of almost $73,000.  He had also accrued a substantial
    pension.  The portion of the pension
    attributable to the period of the parties relationship is approximately
    $400,000.  At the time of the separation,
    the appellant was working part-time at Costco and caring for the children.  Her annual income was approximately
    $36,000.  However, due to the stress of
    the separation, she stopped working for a period of four months.

[6]

An important event for the purposes of this appeal is
    the respondents decision to take voluntary retirement from General Motors in
    April 2007 at the age of forty-nine.  The
    respondent received a $70,000 severance package.  He did not seek further employment but rather
    began to live off his pension benefits.  He stayed home to take care of his new child.  The respondents new spouse was laid off from
    General Motors in 2008 and trained as a real estate agent.  To the date of trial, she had only earned a
    nominal income.

[7]

On June 6, 2008, Gonsolus J. made an interim order
    requiring the respondent to pay the mortgage on the parties home and the
    minimum amount required on their line of credit.  He complied with this order.  He did not, however, otherwise pay child or
    spousal support.  In October 2008, the
    parties sold their house for $480,000.  After various deductions, the appellant was paid $125,000.  The respondents share of $126,000 plus
    interest was held in trust pending the outcome of the trial and is still being held
    in trust pending the resolution of this appeal.  After the house was sold, the respondent stopped paying the home
    expenses and continued not to pay child or spousal support.  The appellant and the children moved into a
    new home purchased with the funds from the sale of the parties home and money
    from her mother.  The appellant also
    began to work full time at Costco.

[8]

The trial of this matter was scheduled to proceed in
    May 2009, but was adjourned at the respondents request.  A term of the order of Roswell J. granting
    the adjournment was that the respondent pay child support in the amount of $666.00
    per month based on an imputed income of $73,000.  The trial proceeded in November 2009 in
    Oshawa.  At that time the children were
    19 and 17 years of age and resided with the appellant.  The older child was no longer in full-time
    attendance at school.  He worked at a
    low-paying job and was still supported by the appellant.  At one point after the separation the younger
    child lived with the respondent.  The
    length of time was a matter of dispute at the trial.

[9]

The appellants income in 2009 was $48,118.  She has had some health problems,
    particularly with her eyesight, which have had some impact on her ability to
    work.  The respondents income, from his
    pension, was $41,768.  He also has health
    problems.

THE REASONS OF THE TRIAL JUDGE

Imputed Income

[10]

The trial judge found that the respondent was
    justifiably concerned about the economic future of General Motors in Oshawa and
    was at risk of being laid off for a substantial period of time.  If he was laid off, his income would drop
    below what he would be entitled to from his pension if he took the retirement
    package that was being offered.  The
    trial judge accepted the respondents evidence about these risks and the advice
    he had received, and found that he retired to salvage as much as he could from
    his 30 years of employment with General Motors.  The trial judge rejected the allegation that
    the respondent retired to reduce or avoid his support obligations.

[11]

The trial judge went on to find that the respondent was
    intentionally unemployed in the sense that his unemployment was a voluntary
    act.  Since the respondent had made no
    effort to find any kind of employment to supplement his pension income, the
    trial judge held that some income must be imputed to him.  The trial judge accepted that there is no
    chance that the respondent could again be employed at General Motors or in a
    similar manufacturing job, since such jobs are simply not available.  It was therefore not realistic to impute to
    the respondent the $73,000 he was making at General Motors.  Bearing in mind that he was 53 years of age
    with a Grade 10 education, the most that could be imputed to him was $19,760
    per year for minimum wage work.  Together
    with his pension income, this would bring his income up to $61,528.

Child and Spousal Support

[12]

The appellant sought spousal support and an order for
    lump sum support.  The trial judge found
    that while she was entitled to spousal support, this was not a case for lump
    sum support.  In reaching this conclusion,
    the trial judge considered a number of factors previously identified as
    relevant in determining whether a lump sum support order is appropriate in the
    circumstances:

(1)       Difficulties
    in enforcing periodic paymentsthis was not a concern since the respondent had
    complied with orders to pay.

(2)       The
    possibility that the respondents livelihood will become precariousat least
    for the time being the pension is solid.

(3)       Sufficient
    assets from which to make the lump sumthe only sum available is the
    respondents share of proceeds of the sale of the house, which would not be
    sufficient to meet the award sought by the appellant.

(4)       Risk
    the respondent would leave the jurisdictionthere is no evidence he would leave
    Ontario and he has substantial ties in the area.

(5)       Termination
    of personal contact is desirablethe parties have two sons and so will always
    have some kind of contact and there have been no threats or violence or abuse
    between the parties.

(6)       Disparity
    in incomein fact, the appellants financial situation appears to be healthier
    than the respondents.

(7)       Compensation
    for the appellants lost pension benefitsto make an award on this basis would
    amount to a redistribution of property under the guise of spousal support
    contrary to the holding in
Mannarino v.
    Mannarino
(1992), 43 R.F.L. (3d) 309 (Ont. C.A.).

(8)       To
    provide for the appellants immediate needsthe evidence did not show any such
    need.

(9)       To
    compensate for lost career opportunitiesthe appellant did not lose career
    opportunities; she has worked part-time and now full-time at Costco and is
    probably fully up to her potential; the respondents career did not advance
    during his time at General Motors.

(10)     The
    relationship was of short durationthis was a lengthy common-law relationship
    of over 22 years.

(11)     The
    dependent spouse has established a new relationshiphere it was the payor who
    had established a new relationship.

(12)     To
    effect a retroactive award of spousal supportthe trial judge did not order
    retroactive support to the appellant.

(13)     To
    enable the dependent spouse to discharge a debtthere was no evidence that the
    appellant had any large debts due.

(14)     There
    is little chance of future variationa lump sum award might deprive the
    respondent of the opportunity to apply to vary support in the event of a
    material change in circumstances; there was a real potential for the pension
    income to change in 2015.

[13]

As to support, the trial judge found that the respondent
    should pay child support for the younger child in the amount of $570.00 per
    month.  As a result, the appellant would
    have 54.7 percent of the parties net disposable income.  Accordingly, an additional amount for spousal
    support would be inappropriate.  This
    issue could, however, be revisited once the younger child was no longer
    dependent.

Child Support Credit for the Youngest Child

[14]

As I have indicated, there was some evidence that the
    younger child had lived with the respondent for some of the time after
    separation.  The trial judge found that
    he lived with the respondent for 21 months from May 2007 to March 18,
    2009.  As a result, the respondent was
    entitled to be credited for child support he should have received from the
    appellant in the amount of $7,438.00.  The trial judge deducted $1,140 from that amount for child support for
    the months of April and May 2009, which the respondent did not pay.  This left a net amount of $6,208.

Unjust Enrichment

[15]

In her notice of application, the appellant sought a 50
    percent constructive trust in the respondents pension plan and related
    benefits accumulated during the course of the relationship, or a monetary award,
    on the basis of unjust enrichment.  However,
    she abandoned this claim during the trial.

Costs

[16]

The trial judge found that the respondent was
    successful on the two most contentious issues in the case:  the appellants claim for lump sum spousal
    support and his claim for retroactive child support for the younger child.  The trial judge was also of the view that the
    appellants claim for lump sum support bordered on the unreasonable and her
    claim to impute income to the respondent in the amount of $73,000 per year was
    patently unrealistic and inappropriate.  In his view, the respondent had acted more reasonably throughout.  There was no reason not to apply the
    presumption that costs should follow the event and he awarded the respondent
    costs in the amount of $15,000 inclusive of disbursements and GST.

ANALYSIS

Unjust Enrichment

[17]

As I have said, at the trial, the appellant abandoned
    her claim for a constructive trust over a share of the respondents pension on
    the basis of unjust enrichment.  She did
    not raise the issue in her original Notice of Appeal nor in the two Amended Notices
    of Appeal.  In her factum, dated October
    5, 2010, counsel for the appellant wrote as follows:

It should be noted that while, for reasons
    unexplained, the Appellants counsel did not pursue a constructive trust claim
    against the Respondent in Appeals pension at trial, the Appellant did plead in
    her Application for a monetary award arising from her contributions to the
    pension based upon the principles of a constructive trust.  The Appellant did not amend her Application
    and it was still open to Justice Magda to award this relief.  It is settled law that pension benefits
    accrued during periods of cohabitation may be awarded to common law partners
    either through money judgments or constructive trust remedies.

[18]

At the oral argument of the appeal, the appellant filed
    the decision of the Supreme Court of Canada in
Kerr v. Baranow,
2011 SCC 10 released February 18, 2011.  It was suggested that
Kerr
supports expanded entitlement for a common law spouse to share
    in the assets accumulated during the course of a joint family venture on the
    basis of unjust enrichment.  The
    appellant did not seek leave to amend her Notice of Appeal after the
Kerr
decision was released.  She also did not apply to adduce fresh
    evidence to explain why she had abandoned her unjust enrichment claim.  Aside from the reference in her factum, counsel
    for the appellant only addressed the question of constructive trust and the
    impact of the
Kerr
decision in
    response to questions from the court during the oral argument.

[19]

In my view, it would not be appropriate to consider the
    issue of unjust enrichment at this stage of the proceedings.  The appellant had ample opportunity to
    directly raise the issue at the hearing of the application and by seeking leave
    to amend her Notice of Appeal.  In
    addition, it would be difficult to deal with an unjust enrichment claim at this
    juncture.  Such a claim would have to
    take into account the package of relief granted to the parties, including the even
    division of the proceeds of the sale of their residence, award of child
    support, and the respondents circumstances.  Further, because the unjust enrichment claim was abandoned at trial, the
    trial judge did not make the factual findings necessary to support that claim.  Given that the claim was abandoned at trial, the
    absence of factual findings in relation to the question of unjust enrichment,
    and the fact that the issue was never raised in the Notice of Appeal, we must
    leave the issue of unjust enrichment to the side.

Lump Sum Support

[20]

I have summarized the trial judges reasons for
    refusing to make a lump sum support award.  In
Davis v. Crawford
, 2011
    ONCA 294, a five-person panel of this court revisited the question of lump sum
    spousal support and, in particular, reconsidered the courts earlier decision
    in
Mannarino
, upon which the trial
    judge relied in part.  In
Davis,
the court clarified that lump sum
    spousal support is not reserved only for cases where there is a real risk that
    periodic payments would not be made or other very unusual circumstances.  Rather, s. 34 of the
Family Law Act
confers a broad discretion on judges to make an
    award of periodic or lump sum spousal support as appropriate under the
    circumstances.  That said, at para. 60,
    the court reaffirmed that a lump sum award should not be made in the guise of
    support for the purpose of redistributing assets.  This is the issue for which the trial judge
    made reference to
Mannarino
.

[21]

The court discussed at paras. 60  76 of
Davis
a number of considerations as relevant
    to the question of the propriety of a lump sum spousal support award. One
    important consideration is whether the payor has the ability to make a lump sum
    payment without undermining the payors future self-sufficiency. The court
    explains that there is a need to weigh the perceived advantages of making a
    lump sum award in the particular case against any presenting disadvantages, and
    that the advantages and disadvantages of making such an award will be highly
    variable and case specific. The court identified a number of these advantages
    and disadvantages at paras. 67 and 68, most of which were referred to by the
    trial judge. The court noted that as a practical matter, most spousal support
    orders will be in the form of periodic payments. But, a lump sum award will not
    necessarily take the place of periodic support and can be made to supplement an
    award of periodic support.

[22]

The standard of review of a support order is set out in
Davis
at para. 77.   This
    court should not overturn a support order unless the reasons disclose an error
    in principle, a significant misapprehension of the evidence, or unless the
    award is clearly wrong.  In my view,
    there is no basis for interfering with the trial judges decision refusing to
    award lump sum support.  The trial judge
    did not approach the issue on the basis that such an award is reserved for
    exceptional cases.  He considered almost
    all of the factors identified by this court in paras. 67 and 68 of
Davis
and found that the overwhelming number
    of those factors told against a lump sum award.

[23]

The appellants principal submission on this issue was
    that there was a real risk that the respondent would not comply with an award
    of periodic support payment.  She points
    to two factors to support this submission.  First, the respondent did not pay a costs order made by Roswell J. and
    second, that he did not made the child support payments ordered by the trial
    judge.  I do not accept this
    submission.  The costs order was
    relatively small and pending trial, the respondent had otherwise complied with
    court orders.  The fresh evidence
    tendered by the appellant does show that the respondent was not making the
    child support payments ordered by the trial judge.  Counsel for the respondent explained that the
    respondent did not have sufficient funds to pay child support because his share
    of the proceeds from the sale of the house remain in trust, and his only income
    is from his pension.  Given the history
    prior to trial, once the respondent has access to the funds that have been
    sitting in trust since 2008, it is reasonable to believe it will not be
    difficult to enforce a periodic support order.

[24]

Admittedly, the trial judge might have weighed some of
    those factors differently.  I would not
    have attached much significance to the fact that the appellant was seeking an
    award that would exceed the amount available from the respondents share of the
    proceeds from the sale of the house.  As
    indicated, a lump sum award will not necessarily take the place of periodic
    support and can be made to supplement an award of periodic support. However, this
    was but one of the factors considered by the trial judge and on the evidence,
    it was open to the trial judge to refuse to make the lump sum award.

Spousal Support

[25]

While the trial judge held that the appellant was
    entitled to spousal support, he refused to make such an order having regard to
    the order for child support and the relative incomes of the parties.  Again, I cannot say that this decision was
    unreasonable or reflects an error in principle.  The factors the court is to take into account in deciding whether to
    award spousal support are set out in s. 33(9) of the
Family Law Act
.  A review of
    those factors supports the trial judges decision, including the parties
    current assets and means, the assets and means they will have in the future,
    the appellants capacity to contribute to her own support and the respondents
    capacity to provide support.

[26]

On his findings of fact, it was open to the trial judge
    to conclude that this was not a case for spousal support on the basis of the
    compensation principle.  As indicated,
    the trial judge found that the appellants earning capacity was not affected by
    the nature of the relationship and the parties decision that she would leave
    full-time employment.  This finding was
    open to the trial judge.  The only
    opportunity that the appellant may have lost as a result of her part-time
    rather than full-time employment was an employment pension.  The trial judge, however, made no findings in
    support of this conclusion.

[27]

The appellant submits that the order for spousal
    support should take into account the fact that she is not entitled to a share
    of the respondents General Motors pension.  However, this overlooks the context of this case.  As I will explain, I would make an order for
    spousal support retroactive to November 2010.  As a practical matter, this spousal support will likely be paid out of
    the respondents pension.

[28]

The trial judge expressly left open the possibility
    that the appellant could apply for spousal support once the respondent was no
    longer obligated to pay child support for the youngest child.  We were informed at the hearing of the appeal
    that the youngest child is no longer a dependant as of November 2010.  Rather than require the parties to return to
    the Superior Court to vary the judgment, I would vary the judgment to eliminate
    the order for child support and replace it with an order for spousal support as
    of December 2010 at the rate of $433 per month; this amount stands at the
    mid-range of the
Spousal Support Advisory
    Guidelines
(Ottawa, Department of Justice, 2008):
Fisher
    v. Fisher
(2008), 88 O.R. (3d) 241 (C.A.).

Imputed Income

[29]

The appellant submits that the trial judge erred in
    only imputing income to the respondent on the basis of minimum wage unskilled
    employment.  She submits that the trial
    judge should have imputed income to him in an amount comparable to what he was
    earning at General Motors as was done in the interim order of Roswell J. when
    the trial was adjourned.  The parties
    adduced no evidence, aside from their own testimony, about employment prospects
    in the Oshawa area.  In those
    circumstances, this court must defer to the trial judges view of what amount was
    reasonable to impute to the respondent.  In fact, the appellants own evidence tended to support the trial
    judges conclusion.  The only employment
    opportunities she was aware of that might suit the respondent were at stores
    like Canadian Tire and Home Depot, which, while hiring employees, were offering
    only the minimum wage or maybe a little bit more.

[30]

In
Drygala v.
    Pauli
(2002),
61 O.R. (3d) 711 (C.A.) at para. 45, Gillese
    J.A. reviewed the factors to be considered in imputing income to a parent who
    is intentionally under-employed or unemployed:

When imputing income based on intentional
    under-employment or unemployment, a court must consider what is reasonable in
    the circumstances. The factors to be considered have been stated in a number of
    cases as age, education, experience, skills and health of the parent. See, for example,
Hanson, supra
, and
Cholodniuk
    v. Sears
(2001), 14 R.F.L. (5th) 9, 204 Sask. R. 268 (Q.B.). I
    accept those factors as appropriate and relevant considerations and would add
    such matters as the availability of job opportunities, the number of hours that
    could be worked in light of the parent's overall obligations including
    educational demands and the hourly rate that the parent could reasonably be
    expected to obtain.

[31]

The trial judge considered most of these factors, in
    particular the respondents age, education, experience, skills and health and the
    little evidence there was on the availability of employment in the area.  I have not been persuaded that there is any
    basis for varying the order imputing income to the respondent.

Retroactive Child Support

[32]

The resolution of this issue at trial turned on where
    the younger son, was living following separation.  The appellant claimed that he was living with
    her throughout the relevant period and therefore she was entitled to
    retroactive child support.  There was
    conflicting evidence on the issue, which the trial judge resolved against the
    appellant.  Having found that younger son
    was living with the respondent for a period of 21 months, the trial judge
    ordered the appellant to pay retroactive child support to the respondent.  Unfortunately, the trial judge failed to take
    into account that the older son was living with the appellant for the entire
    time post-separation (when he was still a dependant) and that both children were
    living with the appellant for some periods of time.  In fairness to the trial judge, it is not at
    all clear that this particular issue was raised at the trial as clearly as it
    should have been.

[33]

Counsel for the respondent conceded that if these other
    issues were taken into account, the appellant would not owe the respondent any
    retroactive child support.

[34]

One final issue is that, as we have noted, the
    respondent has not made any child support payments in accordance with the trial
    judges order.  The child support
    payments that should have been made should therefore be paid out of the funds
    currently held in trust before the funds are released to the respondent.  The amount of spousal support retroactive to
    November 2010 will also be paid from the trust funds.

COSTS

[35]

The appellant also seeks leave to appeal the costs
    order made by the trial judge.  As
    indicated, the trial judge found no reason to interfere with the normal rule
    that costs should follow the event.  The
    principal issues at the trial were lump sum spousal support and imputing
    income.  The appellant was unsuccessful
    on the lump sum support issue but successful on the issue of whether the
    respondent was deliberately unemployed, although the amount of income imputed
    to him was less than was sought by the appellant.  She sought to impute income equivalent to the
    respondents income at the time he retired from General Motors.  The trial judge characterized the appellants
    position on this issue as patently unrealistic.  In my view, this was an error in principle.  Just a few months earlier, Roswell J. had
    made an order imputing $73,000 in income to the respondent.  The appellant, who had a similar background
    to the respondent, had been able to obtain employment with an income of almost
    $50,000.  The trial judge found as a fact
    that the income should be imputed to the respondent only at the rate of minimum
    wage, but the appellants position could not properly be described as patently
    unreasonable.  This should not have been
    a factor in fixing costs of the trial.  I
    would grant leave to appeal the costs award, and having regard to the divided
    success at trial I would order that the parties bear their own costs of the
    trial.

DISPOSITION

[36]

Accordingly, I would allow the appeal in part as
    follows:

·

The order for child support is terminated as of
    November 30, 2010.

·

The respondent shall pay to the appellant
    spousal support as of December 1, 2010 in the amount of $433 per month.

·

Term 4 of the Order requiring the appellant to
    pay child support arrears is deleted.

·

Term 9 of the Order is varied to require that
    arrears of child support and spousal support payable by the respondent shall be
    paid out of monies held in trust before the funds are released to the
    respondent.

[37]

I would grant leave to appeal costs, allow the appeal
    and order that there be no costs of the trial.  Similarly, given the divided success on the appeal, I would make no
    order for costs of the appeal.

RELEASED:

MR                                                  Marc
    Rosenberg J.A.

AUG 22 2011                                I
    agree M.J.
Moldaver
J.A.

I
    agree K. Feldman J.A.


CITATION: Ekelschot-Kumelj v. Bradley, 2011 ONCA 554

DATE: 20110811

DOCKET: C53245

COURT OF APPEAL FOR ONTARIO

Goudge, Juriansz and MacFarland JJ.A.

BETWEEN

Majda Ekelschot-Kumelj, Stanka Niedra and Veronika
          Bradley

Applicants/Appellants

and

Ivanka Bradley, personally in her capacity as Attorney
          for Property of the late Rozalija Kumelj and in her capacity as Estate
          Trustee of the Estate of Rozalija Kumelj

Respondent

Vesna Vojvodic, for the appellant

Lisbeth A. Hollaman, for the respondent

Heard: August 10, 2011

On appeal from the order of Justice Mark L. Edwards of the
          Superior Court of Justice dated January 7, 2011.

APPEAL BOOK ENDORSEMENT

[1]

The appellants motion to adjourn this appeal until after her motion
    concerning disclosure of certain documents in the estates case is hereby
    dismissed. We cannot see how these documents could be relevant to the case
    before us. Indeed, the appellants did not seek their disclosure in this case.
    The appeal will proceed.

[2]

The judgment appealed from is founded on two factual findings:

1)

that the
      mother was always of full mental capacity; and

2)

the
      respondent simply effected the mothers instruction.

[3]

On appeal the first finding is not challenged.

[4]

The second is challenged on the basis that the mothers physical disability
    and the amounts of money involved require the inference that the respondent was
    not simply implementing the mothers instructions. We disagree. There was ample
    evidence from the records and the evidence of others with whom the mother dealt
    to sustain the trial judges conclusion. The appellants speculation is no basis
    for us to interfere with that finding.

[5]

The appeal is dismissed. Nor is there any basis to interfere with the
    trial judges discretion in awarding the costs below. Costs of the appeal to be
    paid jointly and severally by the appellants in the amount of $15,000 inclusive
    of disbursements and applicable taxes.

S.T. Goudge J.A.


CITATION:
Hassan
          (Re) , 2011 ONCA 561

DATE: 20110824

DOCKET: C52663

COURT OF APPEAL FOR ONTARIO

Laskin, Feldman and Armstrong JJ.A.

IN THE MATTER OF:
Abdi
Hassan

Abdi
Hassan, appearing in person

Anita Szigeti, as
amicus
          curiae

Amy
Alyea
, for the Attorney General

Heard: February 15, 2011

On appeal against the disposition
          of the Ontario Review Board, dated August 26, 2010.

Laskin J.A.:

A.

OVERVIEW

[1]

The appellant,
Abdi
Hassan,
    suffers from schizophrenia.  Eleven years
    ago he was charged with threatening to kill a police officer and related
    offences.  He was found not criminally
    responsible on account of mental disorder.  For most of the past nine years he has been at the Centre for Addiction
    and Mental Health (CAMH) in Toronto.  Successive dispositions of the Ontario Review Board ordered his
    detention in the minimum secure unit at CAMH.

[2]

However, the situation changed last year.  The frequency and degree of Mr. Hassans
    aggressive behaviour escalated.  The
    hospital sought an early review of his disposition.  After a hearing in August 2010, the Board
    ordered that Mr. Hassan be detained in the medium secure unit of CAMH.  Mr. Hassan appeals that disposition.  To ensure that his appeal was fully argued,
    the court appointed
amicus curiae
.

[3]

Mr. Hassan, with the assistance of
amicus
, raises four grounds of appeal:

(1)

The Boards
    disposition was unreasonable;

(2)

The Board failed to consider the four factors in s.
    672.54 of the
Criminal Code
;

(3)

The Boards
    reasons are inadequate; and

(4)

Alternatively, a treatment impasse had been reached,
    requiring an independent assessment of Mr. Hassans treatment and risk.

[4]

Mr. Hassan and
amicus
ask that this court substitute a minimum secure detention order, or a hybrid
    order allowing Mr. Hassan to be transferred to a lower level of security at the
    discretion of the person in charge of the hospital.  Alternatively, Mr. Hassan asks for a new
    hearing or an independent assessment of his treatment and risk.

B.

RELEVANT BACKGROUND

(a)
Mr. Hassans personal circumstances

[5]

Mr.
    Hassan was born in Somalia in 1979.  He
    is now 32 years old.  When he was eight
    years old, his parents divorced.  When he
    was ten, his father brought him and his sister to Canada.  He has lived in Canada since then, mostly
    with his mother.  His father returned to
    Somalia.  Mr. Hassan has little contact
    with him.

[6]

Mr.
    Hassan has no formal education beyond grade 10; he has no history of
    employment; and he has had few friends and no romantic relationships.  He is, however, close to all members of his
    family living in Canada.

[7]

Before
    the index offences (in 2000), Mr. Hassan was charged with a criminal offence
    only once.  It occurred in 1997, when he
    was charged with assaulting his cousin with a knife, threatening her death and
    possessing a weapon.  The charges were
    withdrawn and Mr. Hassan entered into a peace bond.

(b)
Mr. Hassans
    schizophrenia

[8]

After
    Mr. Hassan entered into a peace bond, his mother arranged for his admission to
    Wellesley Hospital in Toronto.  He was
    hospitalized for two weeks and diagnosed as suffering from schizophrenia.  His family doctor noted that Mr. Hassan
    experienced chronic, unremitting psychotic symptoms.

(c)       The index
    offences and NCR finding

[9]

On February 14,
    2000, Mr. Hassan called the police five times to complain about neighbours he
    said were bothering him.  He then walked
    into the main lobby of a police station in Toronto, brandishing a steak
    knife.  He walked to the front counter
    and said to the police officer there: I kill you, I kill you.  Mr. Hassan then lunged at the officer with
    his knife.  Shortly after doing so, Mr.
    Hassan ran from the station.  He was
    eventually caught after a lengthy foot chase.

[10]

Mr. Hassan was charged with threatening death,
    possession of a weapon dangerous to the public, and assault with a weapon.  On October 30, 2001, he was found not
    criminally responsible on account of mental disorder.

(d)       Mr. Hassans detention at CAMH

[11]

In
    January 2002, Mr. Hassan was admitted to CAMH.  He has remained at CAMH for the past nine years, except for brief
    periods beginning in 2008 when he lived in the community.  During his entire stay at CAMH  until the
    Boards disposition now under appeal  Mr. Hassan has been maintained in a
    minimum secure unit.

[12]

Annual
    Board dispositions have ordered Mr. Hassans detention in a minimum secure unit
    even though, on several occasions, he has failed to take his medications and
    left the hospital without leave.  Indeed,
    although Mr. Hassans treatment team has given him a broad range of
    psychotropic medications, he has continued to exhibit psychotic symptoms.

(e)       The Boards April 15, 2010 disposition

[13]

The
    Boards last disposition before the disposition under appeal was issued on
    April 15, 2010.  Mr. Hassan was ordered
    to be detained in the minimum secure unit of CAMH with privileges that included
    being able to live in the community in approved accommodation approved by the
    person in charge of the Centre.

[14]

In
    its reasons for this disposition, the Board referred to the evidence of Dr.
Pallandi
, who had been Mr. Hassans treating psychiatrist
    for a decade.  In Dr.
Pallandis
opinion, Mr. Hassan suffers from treatment resistant schizophrenia.  Nonetheless, Dr.
Pallandi
testified that Mr. Hassan had had a reasonably good year and that Mr.
    Hassans mother is a reliable overseer of his mental state and conduct while
    living in the community.

[15]

In
    the concluding section of its reasons, the Board noted that Mr. Hassan
decompensates
rapidly and unpredictably, has required
    locked seclusion for agitated and threatening
behaviour
when readmitted to hospital, and requires
    very close supervision of both his medication administration and his prevailing
    mental state.  The Board concluded that
    the least onerous and least restrictive disposition was to maintain Mr. Hassan
    in a minimum secure unit.

C.

THE DISPOSITION UNDER APPEAL

(a)

Incidents between April and August 2010, leading to an early disposition
    review

[16]

An
    early review of Mr. Hassans disposition came about for two reasons.  First, in May 2010, he was transferred to and
    detained in the Secure Observation and Treatment Unit of CAMH for more than
    seven days, thus requiring the Boards review of this restriction on his
    liberty.  Second, Mr. Hassans conduct in
    the period from April to July sufficiently concerned the hospital that it
    sought an early review and transfer to the medium secure unit.  A brief summary of this conduct is as
    follows:

·

On
    April 11, Mr. Hassan expressed paranoid delusions about the nursing staff and
    threatened to kill one nurse.

·

On
    May 1, he suddenly began running around opening co-patients doors, banging
    doors loudly, and attempting to open the rear exit door.  When Mr. Hassan refused to stop, he was
    placed in a seclusion room under constant observation.

·

On
    May 4, he assaulted a co-patient and was again placed in locked seclusion for
    12 hours.

·

On
    May 5, he was transferred to the Secure Observation and Treatment Unit, where
    he remained for over one week.

·

On
    May 16, Mr. Hassan began harassing co-patients and aggressively invading their
    space.  He was placed in locked seclusion
    with security present.  He had episodes
    where he appeared delusional, moved around without purpose, and did not respond
    to staff.

·

In
    early June, he remained psychotic and disorganized.  He made sexual gestures to female staff,
    became increasingly disruptive, and refused to take direction or his medication.

·

On
    June 16, he was found damaging property and himself.  He had become acutely psychotic and was
    locked in seclusion for two weeks.

·

In
    July, Mr. Hassan erratically confronted other patients and had a physical
    confrontation with one of them.  He continued
    to require short stays in seclusion because of his behavior.

(b)

The hearing before the Board on August 10

[17]

Both
    the hospital and the Crown recommended a hybrid disposition:  Mr. Hassan would be detained in the medium secure
    unit with hospital grounds privileges when accompanied by staff; and, if the
    person in charge determined that Mr. Hassans mental illness was clinically
    stable, he could be transferred to the general unit (formerly the minimum
    secure unit) with hospital grounds privileges up to indirect supervision.

[18]

Mr.
    Hassan sought the continuation of his then current disposition.

[19]

Only
    one witness testified at the Boards hearing  Dr.
Alina

Iosif
, who had treated Mr. Hassan for the previous three
    months.  In her opinion, Mr. Hassan
    continued to pose a significant threat to the safety of the public, and his
    risk could only be safely managed in a secure forensic unit.  Dr.
Iosif
did not
    believe that Mr. Hassan could be managed in a minimum secure unit because of
    his mental instability, aggressive and inappropriate behavior.  Also, she thought it

not likely that he could be discharged in the community over the
    course of the year.  She testified that
    he was very ill at the time and that, though he could conceivably be
    transferred to a minimum secure unit if his condition improved, that would take
    some considerable time  in her words, All of that would probably take up most
    of a year.

(c)       The Boards disposition

[20]

In
    brief reasons, the Board concluded that the least onerous and least restrictive
    disposition was to detain Mr. Hassan in the medium secure unit of CAMH with
    hospital and grounds privileges accompanied by staff.  The Board rejected the hybrid disposition
    recommended by the hospital and Crown.  It found that there was a significant escalation in the frequency and
    degree of aggressive, assaultive and threatening
behaviour
since the last ORB review.  The Board,
    however, left open the possibility of a request for an early review if Mr.
    Hassans clinical status improved.

D.

THE ISSUES

First issue: Was the Boards disposition unreasonable?

[21]

All
    parties accepted that Mr. Hassan continued to pose a significant threat to the
    safety of the public.  Therefore, the
    Boards task was to fashion the least onerous and least restrictive disposition
    for Mr. Hassan, taking into account the four factors in s. 672.54 of the
Criminal Code
: the need to protect the public;
    Mr. Hassans mental condition; his reintegration into society; and his other
    needs.

[22]

Mr.
    Hassan and
amicus
submit that the
    Boards disposition was not the least onerous and restrictive.  Rather, it was unreasonable, justifying this
    courts intervention.

[23]

In
    support of this submission,
amicus
makes these points: the Boards disposition restricts Mr. Hassans liberty even
    more than the hospital and the Crown had recommended; its disposition was inconsistent
    with the evidence of Dr.
Iosif
, the only expert to
    testify before the Board; historically, Mr. Hassan has exhibited unpredictable
    ups and downs in his behavior, yet the Board has consistently ordered his
    detention in a minimum secure unit; and even the privileges accorded by the
    Board were unreasonably limited.  In my
    judgment these points  taken either individually or collectively  do not
    justify interfering with the Boards disposition.

[24]

I
    accept that the Board ought to tread cautiously before making an order that restricts
    an
accuseds
liberty beyond that which the hospital
    and the Crown think necessary.  That is
    especially so in Mr. Hassans case because, under the Boards disposition, his
    security level is higher than it had been for all of his previous eight years
    at CAMH.

[25]

However,
    the Board does not necessarily err because it declines to follow a hospitals
    or Crowns recommendation.  Automatically
    adhering to the position of a hospital or Crown would mean abdicating its own
    role.  A review board is composed of
    medical and legal experts with specialized knowledge and experience in mental
    health and in risk assessment and management.  Parliament has vested these boards with authority to make their own
    independent and often difficult determinations after weighing the package of
    factors in s. 672.54 of the
Code
.  For these reasons, appellate review of their
    determinations is limited.  On the first
    ground of appeal we can interfere only if, after a somewhat probing
    examination, we conclude that the Boards disposition is unreasonable.

[26]

I
    conclude that the Boards disposition ordering Mr. Hassans detention in the medium
    secure unit of CAMH is reasonable and supported by the evidence at the
    hearing.  That evidence, which I have
    summarized earlier in these reasons, shows that Mr. Hassans behavior and
    condition had worsened significantly since his last disposition.  As the Board found, his aggression, his
    threatening behavior and his assaultive conduct had increased both in frequency
    and degree.  This significant change went
    beyond the ups and downs present in previous years, and reasonably justified
    the Boards detention order.

[27]

Further,
    I do not think that Dr.
Iosifs
testimony assists Mr.
    Hassan.  Dr.
Iosif
treated Mr. Hassan during the period when his condition worsened, and was the
    only expert to testify before the Board.  Her evidence was therefore entitled to considerable weight.  In my view, her evidence supported the
    Boards order.

[28]

Dr.
Iosif
was unequivocal in her opinion that Mr.
    Hassans current disposition should not continue, and that instead he should be
    detained in a medium secure unit.  Detention in a medium secure unit was not only required; in her opinion,
    it would likely be necessary for most of the year.

[29]

Dr.
Iosifs
evidence did provide modest support for the
    hybrid order recommended by the hospital, as she did not foreclose the
    possibility of a transfer to the minimum secure unit during the year.  But she estimated that any such possibility would
    not arise until much later in the year.  In substance, the Board itself contemplated this possibility by leaving
    open the opportunity for an early review if Mr. Hassans condition
    improved.  Therefore, I am not persuaded
    the Board acted unreasonably in rejecting a hybrid order.

[30]

Finally,
    the Board took into account the effect on Mr. Hassans liberty of the
    privileges it found appropriate.  Although the Board did not allow for the potential for indirect
    supervision on hospital grounds or access to the community, it found: the
    medium secure unit with the higher ratio of staff to patient will enable him to
    utilize more privileges that require staff to accompany the accused, than could
    be provided in the general minimum unit.  That finding, too, is supported by Dr.
Iosifs
evidence.  I cannot say that this finding
    is unreasonable.

[31]

For
    these reasons, I would not give effect to the first and main ground of appeal
    advanced by Mr. Hassan and
amicus
.

Second Issue: Did the Board fail to
    consider the four factors in s. 672.54 of the
Code
?

[32]

Amicus
submits that the Board failed to analyze the
    four factors in s. 672.54 in any meaningful way.  This submission is closely related to her
    submission on the unreasonableness of the disposition.  In particular, she contends that the Board
    did not explain why Mr. Hassans
decompensation
in
    2010 warranted his detention in a medium secure unit, when his
decompensation
in previous years was typically followed by
    sufficient improvement to maintain him in a minimum secure unit.  I agree that the Board does not expressly
    address
amicus
contention.  Ideally, it should have done so.

[33]

Still,
    I think it implicit, if not explicit, that the Board considered Mr. Hassans
behaviour
in 2010 to be of a different order of
    dangerousness than his
decompensating

behaviour
in previous years.  Dr.
Iosifs
evidence supports this assessment.  I
    would not give effect to this ground of appeal.

Third Issue: Were the Boards reasons inadequate?

[34]

The
    Boards reasons are perfunctory.  Again,
    further elaboration or explanation for its findings and conclusion would have
    been desirable, especially as the Board was changing a disposition that had
    been in effect for eight years.

[35]

However,
    the Boards reasons do permit meaningful appellate review and, for that reason,
    are not inadequate as a matter of law.  As I have already discussed, it is evident why the Board made the order
    it did: the significant escalation in the frequency and degree of Mr. Hassans
    aggressive, assaultive and threatening
behaviour
coupled with Dr.
Iosifs
testimony.  I would not give effect to this ground of
    appeal.

Fourth Issue: Was there a treatment impasse?

[36]

In
    the alternative,
amicus
submits that
    the Boards disposition implies a treatment impasse.
Amicus
argues that the Board effectively found little likelihood that Mr. Hassan would
    make any real progress over the coming twelve months.  Thus, his treatment and risk ought to be
    independently assessed.  I do not accept
    this submission.

[37]

A
    treatment impasse occurs where no progress has been made or is likely to be
    made.  See

Mazzei
v. British Columbia (Director of Adult Forensic Psychiatric
    Services)
, [2006] 1 S.C.R. 326.

That is not the case with Mr. Hassan.  His medication was being adjusted; other
    treatments were being considered.  As
    counsel for the Crown said in her factum, There remained hope that changes in
    medication would improve [Mr. Hassans] fluctuating condition.  Certainly in the past, changes to his
    medication had brought about improvement.  So, a transfer to a less secure environment remained a possibility. If
    it were otherwise, one might have expected the issue of a treatment impasse to
    have been raised before the Board.  Yet
    no party  not Mr. Hassans counsel or Dr.
Iosif

    adverted to it.  I would not give effect
    to this last ground of appeal.

E.

CONCLUSION

[38]

I would dismiss Mr. Hassans appeal.  As always, we are grateful to
amicus
for her assistance.

RELEASED:  Aug 24,
    2011                                    John
    Laskin J.A.

JL                                                                            I
    agree Kathryn Feldman J.A.

I
    agree Robert P. Armstrong J.A.


CITATION:
Kapuskasing
Plumbing and Heating
          Limited v. Fortier Beverages Limited, 2011 ONCA 558

DATE: 20110822

DOCKET: C51434

COURT OF APPEAL FOR ONTARIO

Moldaver,
          Sharpe and Armstrong JJ.A.

BETWEEN

Kapuskasing Plumbing
          and Heating Limited and Gerald
          Villeneuve

Plaintiffs (Appellants)

and

Fortier Beverages Limited

Defendant (Respondent)

Guy A. Wainwright, for the appellants

David Lanthier, for the respondent

Heard: February 24, 2011

On appeal from the judgment of
          Justice R. A. Riopelle of the Superior Court of Justice dated December 4,
          2009.

Armstrong J.A.:

INTRODUCTION

[1]

The appellant, Kapuskasing Plumbing and Heating Limited
    (Kapuskasing), and the respondent, Fortier Beverages Limited (Fortier),
    were franchisees of Culligan in respect of the distribution and sale of bottled
    water.  In October, 2006, Fortier,
    located in Cochrane, purchased the business of Kapuskasing, located in
    Kapuskasing, for a total purchase price of $1,160,000.  The first $600,000 of the purchase price
    pursuant to an asset purchase agreement was payable on closing.  The balance of the purchase price was payable
    pursuant to a consulting agreement, which was to be paid in monthly instalments
    over six years.

[2]

Fortier stopped making payments under the consulting
    agreement when it was discovered that the former Kapuskasing business was not
    selling an estimated 200,000 bottles of water per year as had been represented
    to Fortier in pre-contract discussions.

[3]

Kapuskasing sued for the balance owing on the
    consulting agreement.  Fortier
    counter-claimed against both Kapuskasing and Gerald Villeneuve, the president
    of Kapuskasing, for breach of warranty and negligent misrepresentation.  The trial judge dismissed Kapuskasings
    claim.  He dismissed Fortiers claim for
    breach of warranty but granted judgment for negligent misrepresentation and
    awarded Fortier damages in the amount of $70,258.32.

[4]

Kapuskasing appeals from the aforesaid judgment on the
    basis that the trial judge erred in finding that Fortiers reliance on the misrepresentation
    in respect of the sale of 200,000 bottles of water was reasonable.

[5]

For the reasons that follow, I would allow the appeal,
    set aside the judgment below and grant judgment in favour of Kapuskasing for
    the amount owing under the consulting agreement.

THE FACTS

[6]

Kapuskasing started as a plumbing and heating business
    in Kapuskasing, Ontario.  The plumbing
    and heating business was sold in 1973.  At
    the time of the events giving rise to this action, Kapuskasing was engaged in
    selling water equipment, water systems, filters and drinking units.  Kapuskasing was also a franchisee of Culligan
    for the distribution and sale of bottled water.

[7]

Fortier operated a Coca Cola bottling business in
    Cochrane, Ontario, which included the sale of soft drinks, juices, soda water
    and confectionary.  Fortier was also a
    Culligan franchisee for the distribution and sale of bottled water.

[8]

Fortier was interested in expanding its bottled water
    business.  Raymond Fortier, the president
    of Fortier, approached Gerald Villeneuve to see if Villeneuve might be
    interested in selling Kapuskasings bottled water business.  Discussions between the two men took place in
    the spring and summer of 2006.

[9]

In July 2006, Mr. Fortier met with Mr. Villeneuve at the
    Kapuskasing plant.  During that meeting,
    Mr. Fortier asked Mr. Villeneuve about the number of 18 litre bottles of water
    sold by Kapuskasing in the previous year.  After a quick mental calculation, Mr. Villeneuve advised that
    Kapuskasing was selling approximately 200,000 bottles per year.

[10]

Following the meeting in Kapuskasing, Mr. Villeneuve faxed
    a memo to Mr. Fortier, which provided information concerning the bottled water
    operation, including the confirmation of sales volume of 200 thousand
    bottles.  The memo also suggested a
    total selling price of $1.2 million.

[11]

On July 25, 2006, Fortier sent a letter to Kapuskasing
    setting out the terms of what was described as a preliminary agreement.  The first two paragraphs of the letter said:

Further to our discussion of July 18, 2006, we have
    prepared a preliminary agreement in principle so that discussions may proceed
    with a formal offer to follow at a later date.

Fortier Beverages Limited will pay Culligan of
    Kapuskasing $4.00 for every 18 litre sold during the 12 month period preceding
    September 1
st
, 2006.  We
    recommend using the monthly report prepared for Culligan International to
    calculate the exact number.  We
    understand that this number is approximately 200,000 jugs annually as stated by
    you in our discussion.

[12]

A letter dated July 28, 2006 from Fortier to
    Kapuskasing referred to a payment of $600,000 on closing for the assets and an
    annual consulting fee of $100,000 for six years.

[13]

On August 3, 2006, Michael Bourgeault, solicitor for
    Kapuskasing, wrote to David Lanthier, Fortiers solicitor, concerning the
    proposed purchase agreement and said:

The $600,000 payment for the assets is payable on
    closing and is
not
dependent on the number of bottles sold.  [Emphasis in the original.]

[14]

On August 8, 2006, Mr. Lanthier sent a letter to
    Kapuskasings lawyer concerning a number of the terms of the proposed
    agreement.  Paragraph 3 of the letter
    said:

The $600,000.00 payment would be payable at
    closing.  My clients agreement to pay
    this amount however is dependent upon obtaining confirmation of the sales of
    the company.  If it is not to be a
    condition of closing, my client is requesting, at this time, that your client
    produce a Report of Sales (including, we presume, the reporting document which
    Culligan International no doubt requires from your client) for the periods
    2004, 2005 and 2006 to the present time.  Mr. Fortier can then review the sales figures prior to signing the
    agreement and address any issues that he might have relative to the sales
    directly with Mr. Villeneuve.

[15]

Following the exchange of the above correspondence and
    about one and one half months prior to the signing and closing of the asset
    purchase agreement and the consulting agreement, Kapuskasing provided financial
    disclosure documentation to Fortier.  The
    disclosure included monthly reports to Culligan International referred to in
    the Fortier letter of July 25, 2006 and his lawyers letter of August 8, 2006.  The documentation did not expressly refer to
    the number of units or bottles of water sold each month. However, Fernand
    Gravel, the former accountant and controller of Fortier, agreed in
    cross-examination that it was relatively easy to get a reasonable estimate of
    the number of units sold by taking the average sale price per unit and dividing
    it into the sales figures.  If such a
    calculation had been done, it would have shown that the unit sales for the year
    prior to the sale fell far short of 200,000.  According to the trial judge, this was so even though the Culligan
    information did not cover bottled water sold under another brand name.

[16]

The asset purchase agreement and the consulting
    agreement were signed on October 5, 2006.  The closing took place on October 16, 2006.  The asset purchase agreement provided for a
    purchase price of $560,000 for the assets of the business including good
    will.  This had been reduced from
    $600,000.  The consulting agreement
    provided for a payment to Kapuskasing of $100,000 a year for six years payable
    in monthly instalments of $8,333.34.

[17]

The asset purchase agreement contained no
    representation or warranty as to the volume of unit sales.  It contained an entire agreement clause as
    follows:

The Agreement constitutes the entire agreement
    between the parties and except as stated in it and in the instruments and
    documents to be executed and delivered, contains all the representations and
    warranties of the respective parties.  There are no oral representations or warranties or collateral agreements
    between the parties of any kind relating to the subject-matter herein.  This Agreement may not be amended or modified
    in any respect except by written instrument signed by both parties.

[18]

At issue before the trial judge and in this appeal is
    clause 4(1)(s) of the asset purchase agreement which provided:

No representation or warranty contained in this
    Section 4, and no statement contained in any Schedule, certificate, list,
    summary or other disclosure document provided or to be provided to the
    Purchaser pursuant hereto, or in connection with the transactions contemplated
    hereby, contains or will contain any untrue statement of a material fact, or
    omits or will omit to state any material fact which is necessary in order to
    make the statements contained therein not misleading.

[19]

After closing and before it was discovered that the
    200,000 estimate was in error, Culligan, the franchisor, advised that there was
    a mutual mistake concerning the western boundary of the sales region for
    Kapuskasing.  That part of the region,
    into which Kapuskasing and then Fortier had been selling, was actually assigned
    to the Thunder Bay Culligan franchisee.  As a result, on August 16, 2007, the parties entered into an amending
    agreement whereby Fortier was given a credit of $150,000 to adjust for the
    mistake.  The credit was to be applied to
    the balance owing on the consulting agreement.

[20]

In arriving at the amount of the credit, Mr. Fortier
    calculated that the territory in issue represented 17.07 per cent of the
    business on sales for the first eight months from November 1, 2006.  He then used the 200,000 unit estimate at
    $5.00 a unit to calculate a 17.07 per cent reduction in the purchase
    price.  This produced a figure of
    $177,000.  The parties then agreed to
    reduce that number to $150,000.  The
    preamble to the amending agreement made reference to the 200,000 estimate.

[21]

At the conclusion of the first full year of sales
    (November 2006 to October 2007), Fortier calculated that it had sold 90,512
    bottles of water.  Subsequently, Fortier
    stopped making the monthly payments under the consulting agreement and this
    lawsuit was commenced by Kapuskasing.

THE TRIAL JUDGMENT

(i)        The Breach of Warranty Claim

[22]

Fortier submitted that pursuant to clause 4(1)(s) of
    the asset purchase agreement, the Villeneuve memo of July 20, 2006 constituted
    a disclosure document which contained a warranty in respect of the estimated
    volume of sales at 200,000 bottles per year.  In dismissing this submission, the trial judge said at para. 8 of his
    reasons for judgment:

I do not agree that the fax is a disclosure
    document.  That fax is simply another
    piece of correspondence exchanged during exploratory negotiations; it is not
    even a letter of intent.  It is never
    again referred to in any of the pre-contractual correspondence or in the
    contract itself.  Were it a disclosure
    document one would expect any germane information it discloses would be
    referred to or incorporated into the contract.

[23]

The trial judge further stated at para. 10 of his
    reasons:

The contract is silent on the matter of the volumes
    of sales or of jugs.  Notwithstanding the
    entire agreement clause such a warranty could have been deemed to form part
    of the contract were it not for the exchange of the letters referred to at
    paragraphs [5] and [6], setting out Kaps refusal to adjust the amount due on
    closing to reflect the actual volume of jugs sold and the Defendants position
    that If it is not to be a condition of closing then Kap should provide some
    additional sales information.  That and
    Fortiers testimony that he was unable to calculate the volume of 18 litre jugs
    from the information given to him prior to closing should have alerted the
    Defendant to the necessity of the inclusion of an express warranty as to the
    volume of jugs in the agreement.  No such
    warranty was requested.  The court will
    not permit pre-contractual representations, even a written one, to be
    introduced as a warranty when the contract is silent as to the issue and the
    circumstances leading to the formation of the contract make it clear that the
    party for whose benefit it is sought to impute a warranty should have inquired
    into whether the other partys position on such a material issue was still
    consistent or reconcilable with its earlier position on that material
    issue.  It was incumbent upon the
    Defendant to request an express warranty in the circumstances of this case.

(ii)       The Claim for Negligent Misrepresentation

[24]

The trial judge cited
Queen v. Cognos
, [1993] 1 S.C.R. 87 at p. 110 for the five general
    requirements of a claim for negligent misrepresentation:

(1)

There must be a duty of care based on a special relationship
    between the representor and the representee;

(2)

The representation in question must be untrue,
    inaccurate, or misleading;

(3)

The representor must have acted negligently in making
    said misrepresentation;

(4)

The representee must have relied, in a reasonable
    manner, on said negligent misrepresentation; and

(5)

The reliance must have been detrimental to the
    representee in the sense that damages resulted.

The trial judge noted that the first requirement has
    subsequently been elaborated on in
Hercules
    Management Ltd. v. Ernst & Young
, [1997] 2 S.C.R. 165 to require a duty
    based on foreseeable reasonable reliance.

[25]

The parties agreed at trial that a duty of care, based
    on a special relationship between the parties, existed on the facts of this
    case.  Only Mr. Villeneuve possessed the
    information requested by Mr. Fortier.  Mr. Villeneuve acknowledged at trial that his representation of the
    number of bottles sold was inaccurate.

[26]

The method employed by Mr. Villeneuve to arrive at his
    approximate figure of 200,000 bottles sold was to do a quick calculation in his
    head while on the plant floor.  He noted
    the number of skids in the plant and multiplied that number by 20 working days
    a month and then did a further multiplication of that number by 12 to obtain an
    annual figure.

[27]

The trial judge concluded that Mr. Villeneuve was
    negligent in using this approach without examining the available data to see if
    it supported the 200,000 figure.  I
    should note that Mr. Villeneuve concedes for the purpose of this appeal that his
    misrepresentation was made negligently.

[28]

The trial judge then turned his mind to the issue of
    reliance: whether it was reasonable for Fortier to rely on the 200,000 bottle
    estimate and whether such reliance was to Fortiers detriment.  The trial judge concluded that it was
    reasonable for Fortier to rely on the representation and that such reliance
    resulted in a loss to Fortier in the amount of $70,258.32.

[29]

The trial judge concluded that, [t]hese were per jug
    negotiations.  He reasoned as follows:

I accept Fortiers evidence that he offered Kap
    $4.00 per jug, that Villeneuve may at one point have insisted on $6.00 per jug
    but that eventually the price settled at $5.00 per jug.  The one constant during those negotiations
    remained the representation that the volume was 200,000 18 litre jugs.  As Mr. Fortier testified, the volume of jugs
    had been finalized and he moved on from that to other issues which needed to
    be dealt with in order to finalize the deal.

He concluded that Fortier was induced into paying a higher
    purchase price based on Mr. Villeneuves representation.

[30]

In assessing damages, the trial judge accepted Mr.
    Gravels conclusion that in the year prior to the sale of the business,
    Kapuskasing sold only 109,981 bottles of water.  Using that number at $5.00 per bottle and reducing the result by 17.07
    per cent (to take into account the loss of the sales territory assigned to the
    Thunder Bay Culligan franchise), he calculated a reduced purchase price.
[1]
After taking into account the amounts already
    paid by Fortier, the trial judge concluded that Fortier had overpaid by

$68,965.  The trial judge
    added $1,293.32 for Mr. Gravels account to produce a damages award on
    Fortiers counter-claim of $70,258.32.

THE APPEAL

[31]

The appellants raise the following grounds of appeal:

(1)

The trial judges findings of fact and legal conclusion
    in respect of the breach of warranty are inconsistent with his conclusion that
    Fortier reasonably relied on the misrepresentation in respect of the estimated
    annual sales of 200,000 bottles.

(2)

The trial judge erred in failing to recognize that the
    amending agreement of August 16, 2007 provided that the balance of the terms of
    the consulting agreement were to remain in full force and effect after allowing
    a credit to Fortier of $150,000.  The
    amending agreement was entered into at a time when Fortier had reason to
    believe that the 200,000 bottle estimate was incorrect.

(3)

It was contrary to public policy for the trial judge to
    award damages on the basis of a sale price of $1,160,000 when in fact the deal
    was structured so that $600,000 of the purchase price was attributable to a
    consulting agreement at the request of Fortier in order to minimize the tax
    consequences of the transaction.

(4)

The trial judge erred in his calculation of damages for
    negligent misrepresentation.  Such
    calculation should have been done on the basis that if the representation had
    not been made, rather than on the basis of what the situation would have been
    if the representation was true.

[32]

Fortier seeks to uphold the trial judgment.  However, counsel for Fortier submits that the
    trial judge erred in dismissing Fortiers claim for breach of warranty.  In this respect, he argues that the memo from
    Mr. Villeneuve to Mr. Fortier dated July 20, 2006 is a disclosure document pursuant
    to clause 4(1)(s) of the asset purchase agreement and constituted a warranty in
    respect of the 200,000 bottle estimate.

[33]

This latter issue raised by Fortier should properly
    have been the subject of a notice of cross-appeal.  However, counsel for the appellants advised
    that he was not taking any objection to the failure to file a notice of cross
    appeal.

ANALYSIS

(i)        Was there reasonable reliance by Mr. Fortier on the
    misrepresentation made by Mr. Villeneuve?

[34]

I start with a review of the trial judges reasons for
    judgment in respect of the claim for breach of warranty.  The trial judge began by observing that the
    asset purchase agreement made no reference to the volume of sales of bottled
    water.  He then referred to the
    pre-contractual correspondence.  In the
    letter of August 3, 2006 from Kapuskasings solicitor to Fortiers solicitor,
    Kapuskasing made it clear that the deal is
not
dependent on the number
    of bottles sold.  The aforesaid letter
    was followed by a letter of August 8, 2006 from the solicitor for Fortier who
    said:

If it is not to be a condition of closing, my
    client is requesting at this time, that your client produce a Report of Sales
    (including, we presume, the reporting document which Culligan International no
    doubt requires from your client) for the periods 2004, 2005 and 2006 to the
    present time.  Mr. Fortier can then
    review the sales figures prior to signing the agreement and address any issues
    that he might have relative to the sales directly with Mr. Villeneuve.

[35]

The trial judge observed that the above correspondence
    and Mr. Fortiers evidence that he was unable to calculate the number of
    bottles sold from the information provided by Mr. Villeneuve before closing
    should have alerted the defendant [Mr. Fortier] to the necessity of the inclusion
    of an express warranty as to the volume of jugs in the agreement.  The trial judge commented: No such warranty
    was requested . [i]t was incumbent on the defendant to request an express
    warranty in the circumstances of this case.

[36]

In my view, the trial judges subsequent conclusion
    that it was reasonable for Mr. Fortier to rely on the misrepresentation is
    inconsistent with his finding that no warranty was requested.  This is particularly so when the solicitor
    for Fortier asked for and received the sales reports, which Kapuskasing sent to
    Culligan.  Although Mr. Fortier said he
    was unable to calculate the volume of sales from these reports, his long time
    accountant and controller testified that it was relatively easy to get a
    reasonable estimate of bottles sold by doing some simple arithmetic.  In spite of requesting and receiving the
    Culligan documentation, Mr. Fortier apparently made no effort to use it or to
    request assistance in interpreting it.  This was somewhat surprising given that Mr. Fortier was also a Culligan
    franchisee in the Cochrane area.  According to the lawyers letter of August 8, 2006, it was contemplated
    that Mr. Fortier would review the sales figures prior to signing the agreement
    and address any issues he might have directly with Mr. Villeneuve.  No such issues were raised by Mr. Fortier.

[37]

When the trial judge finished his analysis of the
    breach of warranty claim and turned to the claim for negligent
    misrepresentation, he focused on the pre-contractual negotiations and the misrepresentation
    concerning the number of bottles sold. He did so without reference to the
    evidence that he had accepted that Kapuskasing had refused to adjust the
    amount due on closing to reflect the actual volume of jugs sold and without
    reference to his conclusion that Fortier should have requested an express
    warranty.  The trial judge also appears
    to have ignored his finding in respect of the letter of August 3, 2006 and the
    correspondence following that the 200,000 bottle figure was never again referred
    to in any of the pre-contractual correspondence.  This finding, together with Fortiers conduct
    in respect of the disclosed financial information, is inconsistent with the
    trial judges conclusion that the one constant during those negotiations
    remained the representation that the volume was 200,000 18 litre jugs.

[38]

The trial judges finding that there was reasonable
    reliance by Fortier in respect of the misrepresentation is largely a finding of
    fact and subject to appellate review on a standard of palpable and overriding
    error.  See
Housen v. Nikolaisen
, [2002] 2 S.C.R. 235.  In my view, his finding on this issue is in
    direct contradiction to his finding in respect of the breach of warranty claim and
    constitutes a palpable and overriding error.

[39]

In summary, the case comes down to this: Kapuskasing
    refused to enter into a contract that was based on the number of bottles sold
    in the prior year.  Mr. Fortier accepted
    that position and asked that he be supplied with documentation from which he
    could review the sales figures prior to signing the agreement and address any
    issues with Mr. Villeneuve.  Mr. Fortier
    received the appropriate documentation and did nothing.  If he had an issue in respect of his ability
    to calculate unit sales from the information provided, he could have raised it
    with Mr. Villeneuve or sought the assistance of Mr. Gravel.  He did neither.

(ii)       The Amending Agreement

[40]

Contrary to the submission of Fortiers counsel, I do
    not believe that the amending agreement adds anything to the result of this
    case.  The amending agreement did nothing
    more than allow a credit in respect of the original purchase price in view of
    the mutual mistake concerning the extent of the western boundary of
    Kapuskasings sales territory.  The fact
    that one of the recitals in the amending agreement referred to the 200,000
    bottle estimate does not alter the analysis concerning breach of warranty or
    the issue of reasonable reliance.

[41]

Based on the conclusions I have reached on the first
    two issues, I find it unnecessary to deal with the third and fourth issues,
    which relate to the assessment of damages.

(iii)     Fortiers
    Position on the breach of warranty issue

[42]

I turn briefly to the submission of counsel for Fortier
    in respect of the claim for breach of warranty.  As indicated above, Fortier seeks to set aside the trial judges finding
    that there was no breach of warranty.  Fortiers
    position turns on whether the memo of July 20, 2006, containing the 200,000
    bottle estimate, is a disclosure document pursuant to clause 4(1)(s) of the
    asset purchase agreement.  Suffice it to
    say, I agree with the trial judges analysis in paragraphs 8 and 10 of his
    reasons for judgment, which are referred to in paragraphs 22 and 23 above.

[43]

The memo of July 20, 2006 is not a disclosure document.  In my view, the trial judge properly
    characterized it as simply another piece of correspondence exchanged during
    exploratory negotiations.  Arguably, the
    trial judge erred in saying that, [i]t is never again referred to in any of
    the pre-contractual correspondence.  However, it is clear that the estimate was not referred to in any
    pre-contractual correspondence after July 28, 2006.  By the letter from Villeneuves lawyer of
    August 3, 2006, the suggestion that a sale was dependent on the number of bottles
    sold was taken off the table.

DISPOSITION

[44]

In the result, I would allow the appeal, set aside the
    judgment below and grant judgment in favour of Kapuskasing for the balance
    owing under the consulting agreement.

COSTS

[45]

I would award Kapuskasing and Villeneuve their costs of
    the appeal on a partial indemnity basis fixed in the amount of $19,500
    inclusive of disbursements and applicable taxes.

[46]

In accordance with the agreement of the parties, I
    would refer the costs of the trial back to the trial judge for assessment.

RELEASED:

AUG 22 2011                                             Robert
    P. Armstrong J.A.

MJM                                                            I
    agree M. J.
Moldaver
J.A.

I
    agree Robert Sharpe J.A.

[1]
He
    assumed the actual purchase price was $1 million, calculated at $5.00 a bottle
    for 200,000 bottles, from which he excluded the hard assets (trucks, etc.)
    valued at $160,000.


CITATION: Landmark II
          Inc. v. 1535709 Ontario Limited, 2011 ONCA 567

DATE: 20110831

DOCKET: C52425

COURT OF APPEAL FOR ONTARIO

Laskin, Lang and LaForme JJ.A.

BETWEEN

Landmark II Inc.

Plaintiff (Appellant)

and

1535709 Ontario Limited

Defendant (Respondent)

Antonio Conte, for the appellant

Richard
Belsito
, Q.C., for the
          respondent

Heard: January 19, 2011

On appeal from the order of the
          Divisional Court (P.T. Matlow, J.D. McCombs and G.W. Tranmer JJ.) dated March
          23, 2010, affirming the judgment of Justice Katherine M. van
Rensburg
of the Superior Court of Justice dated August
          11, 2008, with reasons reported at
2008
CanLII
41171 (ON SC)
and
2009
CanLII
78
          (ON SC)
.

Laskin J.A.:

A.

INTRODUCTION

[1]

The issues on this appeal arise out of a construction lien
    action.

[2]

The appellant, Landmark II Inc., has been in the
    landscaping and excavation business for many years.  The respondent, 1535709 Ontario Limited, is
    in the trucking business and owns a truck terminal in Bolton, Ontario.  In July 2004, the parties entered into a
    written contract under which Landmark was to expand a truck parking lot on
    1535709s property.  The price of the
    contract was $58,850 to be paid in four equal instalments.

[3]

1535709 refused to pay the second instalment when it
    was due.  Landmark then abandoned the
    job, filed a lien for the unpaid balance of the contract, and brought this
    action for the same amount.  1535709
    counterclaimed for damages for Landmarks failure to complete the contract.

[4]

After a six-day trial, the trial judge found that
    1535709 had breached the contract, and that Landmark was not obligated to do
    any further work.  She found that the
    value of the work already done by Landmark was $16,000.  After deducting the amount of the first
    instalment, she held that 1535709 owed Landmark $1,287.50.  She dismissed 1535709s counterclaim.

[5]

However, the trial judge also found that Landmark was
    liable under s. 35 of the
Construction
    Lien Act
for filing a grossly excessive lien.  She fixed 1535709s damages at $5,146.39,
    which was its borrowing cost to vacate the lien.  After adding prejudgment interest and setting
    off the two amounts, Landmark owed 1535709 $3,793.61.  The trial judge then awarded 1535709 its
    costs of the action, which she fixed at $55,000.

[6]

Landmarks appeal to the Divisional Court was dismissed
    with very brief reasons, simply holding that the trial judge had not made any
    palpable and overriding error.  Landmark
    obtained leave to appeal to this court.  It
    submits that the trial judge made four errors:

(1)

The trial judge erred by failing to award Landmark
    damages for breach of contract;

(2)

The trial judge erred by relying on the lay opinion of
    another contractor to assess the value of the work Landmark had performed;

(3)

The trial judge erred in finding Landmark liable under
    s. 35 of the Act; and

(4)

The trial judge erred by awarding 1535709 its costs of
    the action.

B.

ANALYSIS

First
    Issue: Did the trial judge err by failing to award Landmark damages for breach
    of contract?

[7]

To put this
    issue in context, I will briefly review the terms of the contract and the trial
    judges finding of a breach.

[8]

Landmark agreed to expand 1535709s parking lot for
    trucks by stripping and piling topsoil, filling with brick rubble, and
    finishing a four-acre area with three inches of asphalt grindings.  1535709 agreed to pay the contract price in
    four equal instalments. The contract set out the following payment terms:

25% down $14,712.50

25% after stripping
    $14,712.50

25% 2 acre complete
    $14,712.50

25% after complete 2
    acre $14,712.50

Not later than 1 month
    after finish job.

[9]

Landmark began work in late July 2004 even though the
    first instalment had not been paid.  Eventually 1535709 paid it.  By
    September 30, 2004, Landmark had finished the stripping and asked for payment
    of the second instalment.  1535709
    refused to pay.  Its president claimed
    that he was not obliged to pay the second instalment until two acres were
    completed.  When he maintained his
    refusal, Landmark walked off the job, removed its equipment, filed its lien,
    and started this action.

[10]

The trial judge found that 1535709s interpretation of
    the contract was inconsistent with its plain meaning, and that 1535709 was in
    breach by failing to pay the second instalment once stripping was complete.  Until the second instalment was paid  and it
    never was  Landmark had no obligation to continue to do the work.  The trial judge set out her findings at
    paras. 29-30 of her reasons:

While the plaintiff was
    prepared to begin work without receiving a
downpayment
,
    after completing the stripping of the four acres, it had no obligation to
    continue the work without having received the second payment.  The plaintiff was entitled to insist upon the
    balance of the payment terms as the work progressed.  Under the contract, two payments were due at
    the time the stripping was completed.  The defendant defaulted on the payment that was due and therefore was in
    breach of contract.  While the defendant
    may have considered the plaintiffs refusal to perform any additional work to
    be unreasonable, and while it may have appeared that the plaintiff had in fact
    abandoned the work, the defendant had no right to insist on continued
    performance by the plaintiff until the second payment had been made.

Accordingly, the
    defendant was in breach of contract in failing to make the second instalment
    payment that was due under the Second Contract when the stripping had been
    completed.

[11]

In the light of these findings, Landmark submits that
    the trial judge erred by failing to award it damages for breach of contract, in
    other words, its lost profits.  It says
    that, at a minimum, its lost profits amounted to approximately $24,500.  I do not accept Landmarks submission because
    of the way it pursued its claim.

[12]

By its actions of removing its equipment and abandoning
    the job, if not by its words, Landmark undoubtedly accepted 1535709s breach as
    a repudiation of the contract.  Landmark
    then potentially had two claims and two corresponding remedies available to it.  One was a claim for the value of the work it
    had performed and the materials it had supplied up to that point.  This claim, a quantum meruit claim, could be
    secured by registering a lien against 1535709s property.  The other claim was a claim for damages for
    breach of contract.  This is an unsecured
    claim, but is expressly preserved in construction lien actions by s. 63 of the
    Act. See
GNC Realty Products Ltd. v.
Welglen
Ltd.
, [1979] O.J. No. 3456 (H.C.J.), with
    additional reasons at [1979] O.J. No. 3457 (H.C.J.).

[13]

Landmark, thus had a right to alternative remedies: a
    right to quantum meruit and a right to damages.  However, and this is the important point, Landmark was required to elect
    between these alternative remedies, at the latest by the time of judgment: see
GNC Realty Products Ltd. v.
Welglen
Ltd.
at paras. 52-61.

[14]

The problem for Landmark is that it never elected
    damages for breach of contract. Indeed, it never indicated that it was pursuing
    alternative remedies with the intention of making an election at some later
    point before judgment.  Instead, the only
    claim that it maintained and the only remedy that it sought  in its pleading,
    in the way it presented its case, and in its evidence  was quantum meruit for
    the value of the work it performed.

[15]

Landmark submits that the trial judge ought to have
    provided for an election herself, but that is not right. If Landmark was
    seeking damages for breach of contract, it was required to so elect.  It did not do so.  Its claim for damages must therefore
    fail.  I would not give effect to this
    ground of appeal.

Second
    Issue: Did the trial judge err by relying on the lay opinion of another
    contractor to assess the value of the work Landmark had performed?

[16]

To determine Landmarks quantum meruit claim  the
    value of the work it had performed  the trial judge relied on the opinion
    evidence of Sam Di Gregorio, the contractor 1535709 hired to complete the
    job.  Mr. Di Gregorio testified that, in
    his opinion, the value of Landmarks work was $16,000.  The trial judge accepted this figure to
    calculate the amount Landmark was owed.

[17]

Landmark submits that the trial judge erred in relying
    on Mr. Di Gregorios opinion evidence.  According
    to Landmark, the trial judge was required to calculate the value of the work it
    had performed by deducting from the contract price its own cost to complete the
    contract.  I do not accept this
    submission for either of two reasons.

[18]

First, this issue is not properly before this
    court.  Although Landmark was granted
    leave to appeal under s. 6(1)(a) of the
Courts
    of Justice Act
, R.S.O. 1990, c. C-43, this court may only hear an appeal
    on a question that is not a question of fact alone.  The issue raised by this ground of appeal is
    purely factual.  Therefore no appeal lies
    on this issue.

[19]

Second, even if this issue were appealable, there would
    be no basis to interfere with the trial judges assessment.  The trial judge found that she could not rely
    on Landmarks records to calculate its quantum meruit claim because those
    records were unreliable.  For example,
    Landmarks time records were prepared after-the-fact and were inaccurate.  Therefore, the trial judge turned to the only
    reliable evidence available, the testimony of Mr. Di Gregorio.  Without his testimony, she would have had no
    evidence from which to assess Landmarks claim.  Moreover, in construction lien actions, lay opinion evidence from an
    experienced contractor is commonplace.  See Duncan W.
Glaholt
,
Conduct of a Lien Action 2011
(Toronto: Thomson Reuters Canada
    Limited, 2010) at 411-412.

[20]

The trial judges rejection of Landmarks evidence on
    the value of the work it performed, and her acceptance of Mr. Di Gregorios
    evidence was entirely reasonable.  I
    would not give effect to this ground of appeal.

Third
    Issue: Did the trial judge err in finding Landmark liable under s. 35 of the
Construction Lien Act
?

[21]

Under s. 35 of the
Construction
    Lien Act
, R.S.O. 1990, c. C-30, a contractor may be liable for filing an
    exaggerated lien claim:

In addition to any other ground on which the person may be
    liable, any person who preserves a claim for lien or who gives written notice
    of a lien,

(a) for an amount which the person knows or
    ought to know is grossly in excess of the amount which the person is owed; or

(b) where the person knows or ought to know
    that the person does not have a lien,

is liable to any person who suffers damages as a
    result.

[22]

The trial judge found Landmark liable under s. 35(a)
    for filing a lien for the unpaid balance of the contract, $44,137.50.  In her view, Landmark knew or ought to have
    known that amount was grossly excessive.  She awarded 1535709 damages equivalent to its cost of borrowing  its
    interest payments  to discharge the lien and pay the amount claimed into court.
     1535709 had been required to discharge
    the lien to facilitate the conveyance of a strip of its land to the Town of
    Caledon in order to widen the road.

[23]

Landmark submits that the trial judge erred in finding
    it liable under s. 35.  It contends that
    it cannot be held liable for filing a lien for the unpaid balance of the
    contract.  I do not agree.

[24]

Registering a lien for the entire amount of the
    contract before construction is completed is not necessarily improper.  The claimant will be secured only for the
    actual value of the work done, which is typically determined at trial.  However, the trial judges finding that
    Landmark was liable under s. 35 for registering a lien for the three remaining
    instalment payments is supportable because of two circumstances.

[25]

First, Landmark registered the lien two and a half
    months after it had abandoned the job, and when it had no intention of
    completing the contract.  A claimant can
    register a lien for the unpaid balance if it stays on the job and intends to
    finish the contract.  It cannot do so
    when it has left the job and does not intend to finish it.

[26]

Second, the affidavit in support of the lien was signed
    by the sister of one of the principals of Landmark.  She had no knowledge of how much of the job
    had been completed, and took no steps to find out.  She simply followed instructions from her
    brother to claim the unpaid balance, even though he, too, did not know how much
    work had been done.

[27]

In these unusual circumstances, I would not interfere
    with the trial judges finding of liability under s. 35 or with her award of
    damages.

Fourth Issue: Did the trial judge err
    in awarding 1535709 its costs of the action?

[28]

The trial judge was initially inclined to order no
    costs.  That would have been a sensible
    result.  However, she changed her mind
    after receiving the parties written submissions on costs, and learning that
    1535709 had made an offer to settle on terms that both the claim and
    counterclaim be dismissed without costs.

[29]

The trial judge was of the view that 1535709s offer
    was a fair evaluation of the financial merits of the proceedings, and that
    Landmark ought to have accepted it.  She
    ordered that Landmark pay 1535709 its costs of the action, which she fixed at
    $55,000.  Landmark submits that this
    costs award ought not to stand.  I agree
    with this submission.

[30]

A trial judge has broad discretion in fixing the costs
    of an action.  This court rarely
    intervenes with the exercise of that discretion.  However, this is one of those rare cases
    where intervention is warranted.  The
    costs award of $55,000 in favour of 1535709 is not fair and reasonable, and it
    is not proportional to what was at stake in this litigation.

[31]

Intervention is justified because of the following
    considerations:

·

Landmark succeeded in what the trial judge
    termed the central dispute in the action: which party was in breach of
    contract.  Because it succeeded on this
    issue it also succeeded in having 1535709s counterclaim dismissed.  It also succeeded on another disputed issue:
    the timeliness of its lien.  1535709
    succeeded only on its claim under s. 35 of the Act, and in the dismissal of Landmarks
    claim for extras.

·

The amount of 1535709s judgment was de
minimis
, less than $3,800.

·

1535709s offer to settle came late in the
    day.  It was made only four days before trial.

·

This litigation occurred only because 1535709
    stubbornly and unreasonably adhered to its interpretation of the contract.  Although it may have believed its
    interpretation was correct, that interpretation had no air of reality in the
    light of the plain wording of the contract.

[32]

The trial judges initial view of costs was
    correct.  I would grant Landmark leave to
    appeal costs, set aside the trial judges costs order, and order that there be
    no costs of the trial.

C.

CONCLUSION

[33]

I would allow the appeal of the trial judges costs
    award and order there be no costs of the action.  I would otherwise dismiss Landmarks appeal.

[34]

That leaves to be determined the costs of the appeal in
    the Divisional Court, the leave motion and the appeal to this court.  The Divisional Court awarded costs of $10,000
    to 1535709.  In my view, justice would be
    done by giving no costs throughout  that is no costs at trial, in the
    Divisional Court, or in this court.  I
    would so order.

RELEASED:  Aug. 31,
    2011                                               John
Laskin
J.A.

JL                                                                                I
    agree S.E. Lang J.A.

I
    agree H.S. LaForme J.A.


CITATION: Ontario v. Coote, 2011 ONCA 562

DATE: 20110824

DOCKET: C53319

COURT OF APPEAL FOR ONTARIO

Sharpe, Armstrong and Karakatsanis JJ.A.

BETWEEN

Her Majesty the Queen in Right of Ontario

Respondent

and

Antoine Coote aka Antoine Coote aka Claufield Anthony
          St. Orbin Coote

Appellant

and

Lawyers Professional Indemnity Company

Respondent

and

Antoine Coote aka Antoine Coote aka Claufield Anthony St. Orbin
          Coote

Appellant

Antoine Coote, in person

Jeremy Glick and Zachary Green, for Her Majesty The Queen in
          Right of Ontario

Raj Anand and Faren H. Bogach, for the Lawyers Professional
          Indemnity Company

Heard: August 23, 2011

On appeal from the judgment of Justice K.M. Van Rensburg of
          the Superior Court of Justice dated February 10, 2011.

APPEAL BOOK ENDORSEMENT

[1]

The application judge gave very thorough reasons fully explaining the
    factual and legal grounds for declaring the appellant to be a vexatious
    litigant pursuant to s. 140 of the
Courts of Justice Act
.  We see no
    error in those reasons.  Appeal dismissed.

[2]

Costs to Lawyers Professional Indemnity Company of the appeal and
    motion fixed at $10,000 inclusive of taxes and disbursement and to the Attorney
    General for the appeal and motion fixed at $500 inclusive of taxes and
    disbursements.


CITATION: Ontario  v. Coote, 2011 ONCA 563

DATE: 20110824

DOCKET: M39964 (C53319)

COURT OF APPEAL FOR ONTARIO

Sharpe, Armstrong and Karakatsanis JJ.A.

BETWEEN

Her Majesty the Queen in Right of Ontario

Respondent

and

Antoine Coote aka Antoine Coote aka Claufield Anthony
          St. Orbin Coote

Appellant

and

Lawyers Professional Indemnity Company

Respondent

and

Antoine Coote aka Antoine Coote aka Claufield Anthony St. Orbin
          Coote

Appellant

Antoine Coote, in person

Jeremy Glick and Zachary Green, for Her Majesty The Queen in
          Right of Ontario

Raj Anand and Faren H. Bogach, for the Lawyers Professional
          Indemnity Company

Heard: August 23, 2011

ENDORSEMENT

[1]

There is no merit to this motion,
inter alia
, questioning the
    constitutional validity or application of s. 140 of the
Courts of Justice
    Act
and the costs order of the application judge.  The quantum of costs
    awarded was reasonable and there is no error in awarding costs against an
  in-person litigant in the circumstances of this matter.


CITATION: Pitney Bowes of Canada Ltd. v. Homelife/United
      Realty Inc., 2011 ONCA 553

DATE: 20110811

DOCKET:  C53561

COURT OF APPEAL FOR ONTARIO

Goudge, Juriansz and MacFarland JJ.A.

BETWEEN

Pitney Bowes of Canada Ltd.

Plaintiff (Respondent)

and

Homelife/United Realty Inc.

Defendant (Appellant)

Atoosa Mahdavian, for the appellant

Inga Andriessen and Ann Hatsios, for the respondent

Heard: August 8, 2011

On appeal from the final order of Justice David Price of the
          Superior Court of Justice dated April 6, 2011.

APPEAL BOOK ENDORSEMENT

[1]

In our view the draconian step of striking out the Statement of Defence
    and Counterclaim was not justified in the circumstances of this case. This was
    not a case where there were repeated failures to comply. The former solicitors
    for the appellant were removed from the record by order in late February and
    the trial of the action scheduled to proceed at a blitz sitting of the court
    about one month later in April.

[2]

There was evidence of some efforts on the part of the appellant to
    retain counsel and of the difficulties they encountered which is not surprising
    in view of the proximity of the trial date.

[3]

In our view less draconian measures ought to have been considered and
    ought to have prevailed.  For example there could have been an extension of
    time granted failing which the appellant would be obliged to proceed without
    counsel.

[4]

The appeal is allowed and the order of Price J. is set aside.

[5]

Costs to the appellant fixed in the sum of $7,000.00 inclusive of
    disbursements and H.S.T.