COURT OF APPEAL FOR ONTARIO

CITATION: All-Terrain Track Sales and
    Services Ltd. v. 798839

Ontario Limited, 2020 ONCA 129

DATE: 20200219

DOCKET: C66985

Pepall, Pardu and Paciocco JJ.A.

BETWEEN

All-Terrain Track Sales and Services Ltd. and Andre Boudreau

Plaintiffs (Appellants)

and

798839 Ontario Limited, Jacobus Hanemaayer,
    153078 Canada Inc.,
Community Expansion Inc.,
Great Lakes Nickel Limited
,
Robin Lowe and Rio Tinto Exploration Canada Inc.

Defendants (
Respondent
)

Donald Rollo and Marc Chaput, for
    appellants

Steve Gearing, for the respondent

Heard: January 31, 2020

On
    appeal from the judgment of Justice Shaun OBrien of the Superior Court of
    Justice, dated May 16, 2019, with reasons reported at 2019 ONSC 2998.

REASONS
    FOR DECISION

[1]

The appellants are judgment creditors of 798839 Ontario Limited (39).
    The appellants sued the respondent, asserting that 39 had successfully
    exercised an option contained in a joint venture agreement with the respondent
    to acquire an interest in the Pardee Mining Development. The appellants hoped
    to obtain part of a revenue stream originating from that development, in
    satisfaction of the judgment against 39.

[2]

The summary judgment motion judge concluded that 39 had not satisfied
    the contractual prerequisites necessary to acquire an interest in the mining
    development. The appellants argue that the motion judge erred in failing to
    have regard to the factual matrix surrounding the formation of the contract and
    erred in her interpretation of the contract.

[3]

We do not agree and dismiss the appeal.

I.

DECISION BELOW

[4]

The contract at issue was dated December 5, 1988, more than 30 years
    before the motion judges decision. None of the affiants in the summary
    judgment motion had any involvement in the contract formation and there were no
    such witnesses available.

[5]

The motion judge began her analysis by examining the text of the contract.

[6]

The agreement recites that the respondent is the owner of the property
    and that it has agreed to grant to 39 an exclusive option to earn an undivided 80
    percent interest in the property upon the terms set out in the agreement.

[7]

39 could incur Expenditures in respect of the property of no more than
    two million dollars. Paragraph 3.2 provided that for each separate block of
    Expenditure of $250,000, 39 shall be deemed to have acquired an undivided ten
    percent right to the property, subject to the provisions of paragraph 3.1,
    which provided the right and option to acquire an undivided 80% interest in the
    property.

[8]

Paragraph 3.3 provided that the option granted to 39 would terminate if
    39 failed to expend two million dollars in the aggregate. Specifically, the
    option would terminate:

(a)

On November 30, 1989, unless on or before that date Ontario [39] has
    incurred $750,000 in Expenditures;

(b)

On November 30, 1990, unless on or before that date Ontario [39] has
    incurred a further $750,000 in Expenditures in the aggregate;

(c)

On November 30, 1991, unless on or before that date Ontario [39] has
    incurred a further $500,00 in Expenditures in the aggregate; or

(d)   if Ontario [39] gives notice in accordance
    with paragraph 3.7.

[9]

Paragraph 3.7 provided, amongst other things, that if 39 failed to make
    the requisite Expenditures under paragraph 3.3, the agreement would be of no
    further force or effect and 39 would have no interest in the property.

[10]

Paragraph
    3.9 defined the Participation Date for the joint venture as the date on which
    39 had exercised its option by incurring two million in Expenditures in the
    aggregate, according to the above timetable in paragraph 3.3.

[11]

Paragraph
    3.10 stipulated that on the Participation Date, 39 would be deemed to have
    earned an undivided 80 percent interest in the property and the joint venture
    would be formed to develop the property and operate it as a mine.

[12]

Paragraph
    5.2 set out a formula to calculate 39s interest in the joint venture if 39
    made subsequent contributions to Expenditures beyond the two million, using the
    two million dollar amount as a starting point.

[13]

Expenditures
    were defined in the agreement as follows:

(e) Expenditures means all cash, expenses, obligations and
    liabilities of whatever kind or nature, spent or incurred by the parties hereto
    prior to a Production Programme in connection with the exploration and
    development of the Property including, without limiting the generality of the
    foregoing:

(i) moneys expended in maintaining the Property in good
    standing by doing and filing assessment work;

(ii) moneys expended in doing geophysical, geochemical and
    geological surveys, drilling, assaying and metallurgical testing;

(iii) moneys expended in acquiring Facilities;

(iv) moneys expended in paying the fees, wages, salaries,
    travelling expenses, plus fringe benefits in an amount not in excess of thirty
    percent (30%) of salaries (whether or not required by law) of all persons
    engaged in work with respect to and for the benefit of the Property;

(v) moneys expended in paying for the food, lodging and
    other reasonable needs of the persons referred to in clause (iv) hereof;

(vii) a charge equal to ten percent (10%) of all
    Expenditures other than the charge refered to in this clause (vi) for
    unallocable overhead and head office expenses and all other expenses relating
    to supervision and management of all work done with respect to and for the
    benefit of the Property; and

(vii) all costs and expenses related to the preparation of a
    Feasibility Report;

but does not include any amount
    incurred in respect of Production Programme Costs.

[14]

39
    entered into a management contract with James Bay Company Mineral Resources
    Inc. (JBC) to manage the exploration and development of the Pardee claims. JBC
    had the necessary expertise, experience, and ability to carry out the
    exploration and testing program. The management contact provided that JBC would
    incur expenditures on the Pardee mining claims as mutually agreed upon with 39,
    from time to time. The respondent was not a party to this agreement.

[15]

All
    parties agreed for the purposes of the motion that, while 39 may have advanced two
    million to JBC, $360,687 of that two million advancement was not used on the
    Pardee project. Instead, it was diverted to another project, called the Kipling
    project. 39 had contracted with another development company, James Bay Kaolin
    Corporation (JBK), to develop the Kipling project. JBK and JBC were related
    corporations controlled by the same person.

[16]

Before
    the motion judge, the appellants argued that 39 had validly exercised the
    option because 39 had advanced two million to JBC, even if $360,687 was
    diverted to another project. In the alternative, the appellants argued that 39
    had acquired a 60 percent interest in the property.

[17]

The
    motion judge concluded that the plain language of the agreement meant that 39
    had to make the full two million in expenditures on the specified Pardee property.
    Otherwise, 39s option would terminate according to paragraphs 3.3, 3.7, 3.9
    and 3.10 of the agreement. She concluded that the joint venture agreement did
    not give 39 the right to a smaller stake in the joint venture proportionate to
    lesser expenditures.

[18]

The
    motion judge attached little importance to subsequent documents such as
    financial statements, correspondence, management information circulars,
    memoranda and legal opinions  as these were conflicting and based on uncertain
    provenance. None of these undermined her plain reading of the joint venture
    agreement.

II.

ANALYSIS

(1)

Did the motion judge err by failing to have regard to the factual
    context surrounding the formation of the contract?

[19]

The
    appellants focus on the factual findings made in other litigation between 39, JBK,
    and others in relation to the Kipling project.
[1]
The motion
    judge accepted the parties agreement as to the amounts 39 advanced to JBC and
    the amounts expended on the Pardee claims, mirrored in the other litigations
    findings. However, the appellants argue that the motion judge somehow failed to
    have sufficient regard to other findings made in that litigation.

[20]

We
    do not agree. The respondent was only peripherally involved in the other
    litigation and was not a party to the four contracts interpreted in that
    litigation. The Pardee joint venture agreement with 39 was not interpreted in
    that litigation.

[21]

There
    is no indication that the contracts in the other litigation formed part of a
    composite whole with the Pardee joint venture agreement.

[22]

As
    pointed out by Blair J.A. in the appeal from the other litigation, the appeal
    was confined to the issue of ownership of the Kipling claims, a matter in which
    the respondent had no interest:
798839 Ontario Ltd. v.
    Platt
, 2016 ONCA 488, 351, 350 O.A.C. 226, at para. 7.

[23]

The
    starting point for contractual interpretation is the language of the agreement.
    As indicated in
Sattva Capital Corp. v. Creston Moly Corp.
, 2014 SCC 53, [2014] 2 S.C.R. 633,
at
    para. 57:

While the surrounding circumstances
    will be considered in interpreting the terms of a contract, they must never be
    allowed to overwhelm the words of that agreementWhile the surrounding
    circumstances are relied upon in the interpretive process, courts cannot use
    them to deviate from the text such that the court effectively creates a new
    agreement. [Citations omitted.]

[24]

Further,
    the factual matrix should consist only of objective evidence of the background
    facts at the time of the execution of the contract, that is, knowledge that was
    or reasonably ought to have been within the knowledge of both parties at or
    before the date of contracting (citation omitted):
Sattva
,

at para. 58.

[25]

We
    are at a loss to know what other aspect of the factual matrix as expressed in
    the other litigation should have been considered by the motion judge but was
    not.

(2)

Did the motion judge misinterpret the Pardee Joint Venture Agreement?

[26]

The
    key issue to determine in contractual interpretation is  the intent of the
    parties and the scope of their understanding:
Sattva
,
at para. 47.

[27]

As summarized in
Richcraft Homes Ltd. v.
    Urbandale Corporation,
2016 ONCA 622, 352 O.A.C. 186, at para. 58, this
    court reiterated that a commercial contract is to be interpreted:

(a) as a whole, in a manner that gives meaning
    to all of its terms and avoids an interpretation that would render one or more
    of its terms ineffective;

(b) by determining the intention of the
    parties in accordance with the language they have used in the written document
    and based upon the "cardinal presumption" that they have intended
    what they have said;

(c) with regard to objective evidence of the
    factual matrix underlying the negotiation of the contract, but without
    reference to the subjective intention of the parties; and (to the extent there
    is any ambiguity in the contract),

(d) in a fashion
    that accords with sound commercial principles and good business sense, and that
    avoids a commercial absurdity.

[28]

The
    motion judge analyzed the language used by the parties as a whole and gave the
    words their plain meaning. There was little evidence of the surrounding
    circumstances known to the parties at the time they entered the agreement. According
    to JBCs management contract with 39, JBC required 39s consent before
    incurring expenditures. Presumably, 39 had good reasons related to its own
    self-interest to agree to divert $360,687 to the Kipling project, rather than
    expend it on the Pardee project.

[29]

The
    motion judges interpretation of the contract was rational, rooted in the
    language of the contract and the evidence before her. There is no basis to
    depart from the deference owed to her interpretation.

III.

CONCLUSION

[30]

Accordingly, the appeal is dismissed, with costs to the
    respondent in the agreed amount of $20,000 inclusive of disbursements and taxes.
    The cross-appeal is dismissed as abandoned.

S.E.
    Pepall J.A.

G. Pardu
    J.A.

David M.
    Paciocco J.A.

[1]

798839 Ontario Limited v. Robert Platt; and Robert Platt
    v. Community Expansion Inc.,
2013 ONSC 6879, affd 2016 ONCA 488, 350
    O.A.C. 226.


COURT OF APPEAL FOR ONTARIO

CITATION: Amorosi v. Barker, 2020 ONCA 144

DATE: 20200220

DOCKET: C67396

Doherty, Brown and Thorburn JJ.A.

BETWEEN

Mark
    Amorosi

Plaintiff (Respondent)

and

Gerry Barker

Defendant (Appellant)

Jordan Goldblatt, for the appellant

Iain A.C. MacKinnon, for the respondent

Heard and released orally: February 10, 2020

On
    appeal from the order Justice Petersen of the Superior Court of Justice, dated August
    9, 2019.

REASONS FOR DECISION

[1]

The necessary factual background is set out in
    the reasons of the motion judge: see
Amorosi v. Barker
, 2019 ONSC
    4717.

[2]

There are two grounds of appeal:

1.

Did the motion
    judge err in granting an adjournment of the motion to allow for cross-examination
    of the appellant (plaintiff) on his affidavit filed on the motion?

2.

Did the motion judge err in the balancing of the competing interests required
    under s. 137.1(4)(b) of the
Courts of Justice Act
?

The Adjournment Issue

[3]

The appellant argues that the adjournment should not have been granted
    because it effectively deprived the motion judge of jurisdiction to hear the
    motion by extending the hearing of the motion beyond the 60-day time limit
    referred to in s. 137.2(2).

[4]

Read with s. 137.2(3), the requirement in s. 137.2(2), that the motion
    shall be heard within 60 days, requires that the date on which the motion is
    heard, that is commenced, must be within 60 days of the filing of the motion.

[5]

The language of the subsection permits the interpretation that 60 days
    refers to the commencement of the motion. The practicalities of litigation in
    the province demand that interpretation. Clearly, the legislation intended that
    these motions should be heard expeditiously. Equally clearly, the legislature did
    not intend to impose an arbitrary and unbending limit on the time needed to
    hear and determine the motion. It does not take much imagination to think of
    fact situations in which a 60-day hard cap would lead to wasting of important
    resources and unfair results.

[6]

The purpose animating s. 137.1 is fully served by interpreting the
    section as requiring that the motion be returnable before the motion judge
    within 60 days of the filing of the motion. The motion judge is then in a
    position to ensure that the motion proceeds expeditiously and fairly to all
    concerned.

[7]

The second issue, that is the balancing of the competing interests under
    s. 137.1(4)(b), engages a motion judges discretion. There are clearly
    competing interests which must be examined. The motion judge did that. This
    court has addressed the exercise of the discretion under that provision in a
    series of cases. In doing so, the court has recognized that different judges
    may well exercise their discretion differently in given cases. This court shows
    deference to those determinations.

[8]

The appellant argues that the motion judge erred in concluding there was
    evidence supporting the respondents alleged damages flowing from the alleged defamation.
    The appellant submits that, on the record, the alleged damages were
    attributable to an entirely independent event which led to the respondents
    dismissal.

[9]

We see no error in the motion judges consideration of this evidence.
    The  evidence offered by the plaintiff (respondent) suggests a causal
    connection between the defamation and damages suffered by the respondent. The
    appellants (defendant) material puts forward a separate cause for the damages.
    In exercising her discretion under s. 137.1(4)(b), the motion judge was
    entitled to consider that there was evidence of a causal connection between the
    defamation and the alleged damages. The respondent (plaintiff) was not required
    to prove his damages in the context of his response to the s. 137.1 motion.

[10]

Counsel
    for the appellant in oral argument also referred to two alleged factual errors,
    which he said constituted clear and palpable errors, warranting the
    intervention of the court. We are not satisfied that the motion judge made
    either error and, in our view, neither error, if made, was sufficiently
    material to warrant the intervention of this court.

[11]

Finally,
    we note that, in considering the plaintiffs potential damages for the purposes
    of the balancing under s. 137.1(4)(b), the motion judge observed, at para. 55
    and again at para. 70, that the plaintiffs damages might well be
    significant. In our view, it was open to her to reach that assessment and to
    take that assessment into account in the balancing required under the
    provision. We see no basis upon which we should interfere with the motion
    judges determination.

[12]

The appeal is dismissed. Costs of the appeal awarded to the respondent
    in the amount of $10,000, inclusive of disbursements and all relevant taxes.

Doherty
    J.A.

David
    Brown J.A.

Thorburn
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Atkinson (Re), 2020 ONCA 152

DATE: 20200226

DOCKET: C66678

Simmons, Watt and Miller JJ.A.

IN THE MATTER OF:  Sharon Atkinson

AN APPEAL UNDER PART XX.1 OF THE
CODE

Mercedes Perez, for the appellant

Sean Horgan, for the Attorney General
    of Ontario

Michele Warner, for the Person
    in Charge of the Centre for Addiction and Mental Heath

Heard: October 25, 2019

On appeal against the disposition of the
    Ontario Review Board, dated January 10, 2019.

REASONS FOR DECISION

[1]

On May 2, 2000 Sharon Atkinson (the appellant)
    was found not criminally responsible on account of mental disorder (NCRMD) on a
    single count of arson. She set her bed on fire and left the home in which she
    lived. No one was injured. The fire caused property damage of about $5,000.

[2]

During the first decade of her supervision by
    the Ontario Review Board, the appellant was detained at CAMH. From the outset,
    she was found treatment incapable. Her mother has served and continues to serve
    as her substitute decision-maker (SDM).

[3]

In early 2010, the appellant was discharged from
    CAMH to reside at Christian Horizons Group Home (CH), a locked facility with 24-hour
    supervision. To this day the appellant remains a resident of that facility.

The Background Facts

[4]

For our purposes, the essential background may
    be recounted briefly.

The Pre-Board History

[5]

The appellant's mental health issues became
    apparent in her behaviour as she progressed through elementary school. There
    were incidents of self-harm, theft and property damage. Her behaviour was
    impulsive. At times, she was physically and verbally abusive towards her
    parents. In school, the appellant had problems in all academic areas. She was
    at least two years below age expectation. Her impairments compromised her
    ability to assimilate non-verbal social cues and the other information needed
    for good social judgment.

[6]

At age 15, the appellant was diagnosed with Prader-Willi
    syndrome. Behavioural problems associated with this syndrome include
    impulsivity, stubbornness and temper tantrums. Those afflicted are often
    manipulative, perseverative, egocentric and demanding. The appellant's behavioural
    problems escalated at age 16. She frequently ran away from her parents' home.
    Out of fear, her parents locked their bedroom door at night.

[7]

In 1997, at age 17, the appellant was placed in
    a group home.

The CAMH Years

[8]

After she was found NCRMD, the appellant was
    placed in a group home. Shortly after this placement, she stole a van, tried to
    leave the group home and crashed the van into a tree. She was then transferred
    to CAMH where she remained until her discharge to CH in 2010.

[9]

In her early years at CAMH, the appellant was a
    management problem. She set fires. She harassed and stalked male co-patients.
    Her conduct was oppositional, her behaviour, sexually inappropriate. She was
    assaultive, abusive, manipulative and threatening with staff and co-patients.

The Discharge to Supervised Housing

[10]

On January 12, 2010 the appellant was discharged
    from CAMH to reside at CH in Brampton. This is a secure residence with 24-hour
    supervision and 12 hours of daily programming.

The CH Residency

[11]

In the early years at CH, behavioural problems
    persisted. Elopements, sometimes requiring police assistance. Physical
    altercations with staff and other patients. Overnight visits with her parents terminated
    prematurely because the appellant became unmanageable.

[12]

As her tenure at CH continued, the appellant's
    conduct fluctuated between adherence to the behavioural plan put in place for
    her and disobedience of it. Aggressive and assaultive behaviour occurred,
    usually when the appellant felt that her needs had not been met. From time to
    time, the appellant expressed her desire for an absolute discharge. Her
    proposals included living with her family or moving elsewhere, perhaps to
    Ireland. None of these proposals were viable.

The Diagnosis and Risk Assessment

[13]

To understand and evaluate the appellant's
    current and future risk, it is important to understand the condition or
    conditions that contribute to that risk.

[14]

Although actuarial testing has not been carried
    out with respect to the appellant because it is considered inapplicable to her
    situation, her score on an instrument designed to assess the likelihood of
    violent recidivism disclosed that she is a moderate-high risk of violent
    recidivism. She scored full points for historical items like previous violence,
    personality disorder and prior supervision failure. Clinical items included
    impulsivity and risk items, plans lacking feasibility and exposure to destabilizers.

[15]

Behavioural difficulties and emotional lability
    are characteristics of Prader-Willi syndrome. The appellant is stubborn,
    impulsive and prone to temper tantrums.

[16]

The appellant suffers from a mild intellectual
    disability which makes it difficult for her to learn new skills, and access
    appropriate social judgment. She also suffers from certain maladaptive
    personality characteristics of the borderline, narcissistic and antisocial
    personality spectrum. She displays a pervasive pattern of having little regard
    for the rights of others and little empathy or remorse for her actions. In her
    interactions with others, she is self-serving and egocentric.

The Current Disposition

[17]

The current disposition issued by the Board
    about 13 months ago is a conditional discharge including residency and
    reporting conditions.

The Grounds of Appeal

[18]

The appellant seeks an absolute discharge, in
    the alternative, a new hearing before a differently constituted Board. She
    advances two grounds of appeal, contending that the Board erred:

i.

in finding that the appellant was a significant
    threat to the safety of the public; and

ii.

in finding the civil mechanisms available,
    together with an absolute discharge, inadequate to control the risk to public
    safety.

[19]

In our view, this appeal fails.

Ground #1: The Significant Threat Finding

[20]

The appellant challenges the Board's finding of significant
    threat" as unreasonable and unsupported by the evidence. According to the
    appellant, the Board failed to focus on the fundamental issue  significant
    threat"  instead rested their conclusion on their concern about the
    consequences of an absolute discharge. In the result, the Board failed to
    consider the core question of whether there was a serious likelihood that the
    appellant would commit an offence involving serious harm. The conclusion of significant
    threat" was speculative, not the product of reasonable inference drawn
    from the evidence adduced before the Board.

[21]

The appellant says that the evidence adduced,
    considered as a whole, cannot support a reasoned conclusion that the appellant
    remained a significant threat to the safety of the public almost 20 years after
    her index offence. In two decades, the appellant has not been involved in any
    assaultive behaviour resulting in serious physical or psychological harm. In
    the year under review, the appellant had made significant improvements
    clinically, in particular, in the areas of self-regulation and de-escalation.
    She has not been returned to a psychiatric facility since her discharge in
    2010. Any problematic behaviour is associated with the Prader-Willi syndrome
    and did not reach the level of significant threat. She made no attempt to elope
    from her residence permanently.

[22]

Satisfied that the finding of significant threat
    was within the range of reasonable outcomes available on the evidence adduced
    at the hearing, we reject this ground of appeal.

[23]

In its assessment of whether the significant
    threat" threshold had been established, the Board was entitled to examine
    a range of evidence. The circumstances of the index offence. The past and
    expected course of the appellant's treatment. The appellant's current condition
    and future plans. The availability of support services in the community. And,
    perhaps most importantly, the recommendations of those who have examined the
    appellant:
Winko v. British Columbia (Forensic Psychiatric Institute)
,
    [1999] 1 S.C.R. 625, at paras. 57, 61, 69.

[24]

In this case, the Board was considering a person
    who had a genetic condition  Prader-Willi syndrome  that will never change
    and causes her to be impulsive, stubborn and subject to emotional dysregulation.
    In addition, she suffers from a significant mental disorder  personality disorder
    not otherwise specified  and a mild intellectual disability that results in
    her functioning at the level of an elementary school child. Her personality
    disorder involves a pervasive pattern that includes little regard for the
    rights of others, little empathy or remorse for her conduct and a self-serving
    and egocentric approach to her interactions with others. She has a robust
    history of elopement and of violence, threats and inappropriate behaviour when
    her needs are not met.

[25]

The Board also had evidence that the appellant
    was a moderate-high risk to recidivate. She has an extensive history of
    violence, albeit not severe violence, more likely than not to occur when her
    demands are not met immediately. Absent the significant support and supervision
    provided under her current disposition, the appellant would most likely revert
    quickly to inappropriate behaviour which would place not only herself, but also
    the community at risk.

[26]

Beyond the fervent hope for an absolute
    discharge, the record before the Board reveals no realistic plan for the
    appellant were an absolute discharge ordered. Her tenure at CH would be over,
    so too its supervision and the administration of vital medication. Left to her
    own devices and unmedicated, recidivism would be likely to occur. Not only did
    the evidence before the Board satisfy the significant threat" threshold,
    it put paid to any claim of an absolute discharge as a necessary and
    appropriate disposition.

Ground #2: The Sufficiency of Civil Mechanisms

[27]

The appellant also argues that the Board
    misapprehended the sufficiency of civil mechanisms, available together with an
    absolute discharge, to reduce the risk of recidivism below the significant
    threat" threshold. This error, the appellant says, is linked to the Boards
    antecedent finding of substantial threat.

[28]

In large measure, this argument fails once the
    Board's core finding of significant threat" is sustained. For a finding
    of significant threat excludes any prospect of an absolute discharge under s.
    672.54(a) of the
Criminal Code
. In any event, we are not persuaded
    that any such error appears in the reasons of the Board.

[29]

The record before the Board is barren of any
    evidence that would give an air of reality to the submission that civil
    mechanisms available under provincial legislation, coupled with an absolute
    discharge, would reduce the risk of recidivism below the significant threat
    threshold.

[30]

The appellant conceptualizes an absolute
    discharge as removing legal barriers to doing as she wishes to do. None of her
    plans for accommodation have any basis in reality. She made it clear by
    interjections at the hearing that she would not return to CAMH. She was not
    eligible for a Community Treatment Order. Even if she were to become eligible,
    her SDM, her mother, would not consent to such an order. Once out of CH, thus the
    supervision of the Board, the mechanisms available under provincial legislation
    would not assist in alleviating the risk.

Disposition

[31]

The appeal is dismissed.

Janet Simmons J.A.

David Watt J.A.

B.W. Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Austin v. Bell Canada, 2020 ONCA 142

DATE: 20200221

DOCKET: C67404

MacPherson, Sharpe and Jamal JJ.A.

BETWEEN

Leslie Austin

Plaintiff (Appellant)

and

Bell Canada, Bell Media Inc., Expertech Network
Installation Inc., and Bell Mobility Inc.

Defendants (Respondents)

Mark Zigler, Jonathan Ptak, and Garth Myers, for the
    appellant

Dana Peebles, for the respondents

Heard: February 5, 2020

On appeal from the judgment of Justice E.M. Morgan of the
    Superior Court of Justice, dated August 12, 2019, with reasons reported at 2019
    ONSC 4757, 147 O.R. (3d) 198.

By the Court:

[1]

The appellant is the representative plaintiff in a
    class action brought on behalf of retirees who are beneficiaries of the
    respondents (Bell) Pension Plan.

[2]

The sole issue for this court to decide is the proper
    calculation of the cost-of-living adjustment under the Plan for 2017. That
    turns on the interpretation of the Plans definition of the Pension Index and
    how that definition works together with the provisions in the plan governing
    the calculation of the amount of the cost-of-living adjustment. The appellant
    argues that the motion judge erred by finding that Bell was entitled to round
    up the annual percentage increase in the Consumer Price Index, mathematically
    calculated as 1.49371%, to two decimal points, or 1.49%. The appellant says
    that, properly interpreted, the Plan requires Bell to follow Statistics
    Canadas policy of rounding to only one decimal point, or 1.5%. The difference
    is significant. Another provision in the Plan provides that to determine the
    annual pension increase for the appellant and most other Bell Pensioners, the
    Pension Index is to be rounded to the nearest whole number. If the appellant is
    right, 1.5% is rounded to 2%. If Bell is right, 1.49% is rounded to 1%. The difference
    to the class members between a 2% and a 1% increase in the 2017 pension is over
    $10 million for the first year and, over the long-term, over $100 million.

Background

[3]

The appellant, a longtime Bell Canada employee,
    brings this class proceeding on behalf of approximately 35,000 pensioners who
    are all beneficiaries of the common Pension Plan administered by the
    respondents which are all part of the Bell corporate family.

[4]

The motion judge certified the proceeding under
    the
Class Proceedings Act
, 1992,
    S.O. 1992, c. 6
. It was common ground that the
    matter was suitable for summary judgment. As we explain below, the motion judge
    concluded that Bell was entitled to round the Pension Index to two decimal
    points and accordingly granted summary judgment dismissing the action.

The Bell Pension Plan

[5]

The motion judges ruling and this appeal turn
    on two provisions in the plan dealing with the annual indexing of benefits.

[6]

The first is the definition of Pension Index in
    s. 1.29 of the Plan:

1.29
Pension Index means
    the annual percentage increase of the Consumer Price Index, as determined by
    Statistics Canada, during the period of November 1 to October 31 immediately
    preceding the date of the pension increase;

[7]

The second key provision is s. 8.7, which governs the calculation of the
    annual indexation increase. The case turns on how s. 1.29 and the determination
    of the Pension Index works in conjunction with the rounding provision in s.
    8.7(iv):

8.7
On every first day of January, the retirement
    benefits payable to a Member, the surviving Spouse or the Beneficiary under the
    DB Provisions shall be augmented by a percentage determined as follows:

(i) If, on the date of the increase, the Member has not reached
    65 years of age, or would not have reached 65 years of age in the case of a
    surviving Spouse or Beneficiary, the Pension Index, limited to a maximum of 2%
    and calculated on a compounded basis.

(ii) If, on the date of the increase, the Member has reached 65
    years of age, or would have reached 65 years of age in the case of a surviving
    Spouse or Beneficiary, the percentage shall be the greater of:

(a) 60% of the Pension Index,
    limited to a maximum of 4% and calculated on a compounded basis; or

(b) the percentage determined
    under paragraph (i) above.

(iii) For the purpose of any increase applicable to a Member,
    the surviving Spouse or the Beneficiary within the first year of retirement,
    the applicable percentage shall be prorated, taking into account the number of
    full calendar months of retirement in the calendar year preceding the date of
    the increase.

(vi) All percentage increases
    shall be rounded to the nearest 2 decimal points, except for the percentage
    increase under paragraph (i) above which shall be rounded to the nearest whole
    number.

[8]

It is common ground that for the relevant
    period, the Consumer Price Index rose from 127.2 to 129.1 and, as a matter of
    simple mathematics, that represented a 1.49371 % increase. It is also
    undisputed that Statistics Canada has a policy of rounding the annual percentage
    increase to one decimal point. Accordingly, Statistics Canada published the
    annual percentage increase for the relevant period as 1.5%. Section 8.7(iv)
    provides that percentage increase for all pensioners other than those who are
    in their first year of retirement (s. 8.7(iii)), is to be rounded to the
    nearest whole number. Accordingly, if, as the appellant argues, the Statistics
    Canada policy governs, the Pension index of 1.5% should be rounded to 2%. On
    the other hand, Bell asserts that the words of s. 8.7(iv) apply: All percentage
    increases shall be rounded to the nearest 2 decimal points. If s. 8.7(iv) does
    apply to s. 1.29, the Pension Index is 1.49% which, when rounded to the nearest
    whole number, becomes 1%.

The Motion Judges Reasons

[9]

The motion judge turned first to s. 1.29. He
    held that the proper interpretation of that provision depended upon the
    importance to be ascribed to the comma after the words Consumer Price Index.
    He reviewed in some detail case law and academic writing, both Canadian and
    American, dealing with the significance to be attached to commas that follow a
    sequence of items. Ordinarily, if there is no comma, the last antecedent rule
    states that the phrase at the end of the list will modify only the last item.
    If there is a comma, the series qualifying rule states that the phrase will
    modify all items on the list: Ruth Sullivan,
Sullivan on the
    Construction of Statutes
, 6th ed. (Markham: LexisNexis
    Canada, 2014), at p. 470. Here, there is not a list but there are two items:
    (1) the annual percentage increase, and (2) the Consumer Price Index.
    Accordingly, the comma after Consumer Price Index suggests that the phrase
    as determined by Statistics Canada modifies both items.

[10]

The motion judge appears to have accepted that
    interpretation but found that it was rebutted by the need to read the Plan as a
    whole. He focused on the s. 8.7(iv) provision that [a]
ll
    percentage increases shall be rounded to the nearest 2 decimal points. There
    was uncontradicted expert evidence that the calculation required under s.
    8.7(ii)(a) for pensioners aged 65 or older  60% of the Pension Index  will
    never yield more than a two-decimal place figure if the Statistics Canada one-decimal
    place increase is used. The motion judge found, at para. 61, that as using
    Statistics Canadas one-decimal rounding of the Pension Index would eliminate
    the need for any further rounding as set out in s. 8.7(ii), it would render
    meaningless the provision in s. 8.7(iv) that all rounding be to two decimal
    places. He added that the expert evidence indicated that following Bells
    policy of rounding the Pension Index to two decimal places would often yield a
    three-decimal place figure in the s. 8.7(ii)(a) calculation. The Bell
    two-decimal point rounding of the Pension Index would therefore give s. 8.7(iv)
    meaning.

[11]

The motion judge concluded that while Statistics Canada uses the
    one-decimal place approach to rounding for its own purposes, that method did
    not govern the Plan when read as a whole. The key passage in his reasons is
    para. 65:

Section 8.7 of the Plan is a precisely drafted, mathematically
    crafted section that is dependent on rounding being part and parcel of the
    calculations it prescribes. It is not possible to surmise that the drafters of
    the Plan went to all of that trouble and detail only to have the entire
    exercise rendered meaningless by a deferral to Statistics Canadas method of
    rounding when doing the initial Pension Index calculation under s. 1.29 of the
    Plan.

[12]

At para. 64, the motion judge referred to the
contra proferentem
rule that would favour the pensioners as the non-drafting party, but stated
    that there is no rule of interpretation that would implement a version of the
    Plan that renders it partly meaningless or effectively gut a key aspect of
    the method of calculation.

ANALYSIS

[13]

The appellant accepts that as the issue in this
    appeal turns upon the interpretation of a contract, the standard of review is
    that laid down by
Sattva

Capital Corp. v. Creston Moly
    Corp.
, 2014 SCC 53, [2014] 2 S.C.R. 633 and
Housen
    v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235
. To
    succeed, the appellant must establish either a palpable and overriding error of
    fact or an extricable error of law.

[14]

The appellant argues that this appeal turns on
    the plain and ordinary meaning of s. 1.29. The appellant accepts that s. 1.29
    must be read in the light of the Plan as a whole. The appellant argues,
    however, that the definition in s. 1.29 is unaffected by s. 8.7(iv) which deals
    only with percentage increase in pensions under s. 8.7. The appellant submits
    that the motion judge made a foundational error by finding that unless s.
    8.7(iv) applies to the definition of Pension Index, s. 8.7(iv) would be
    meaningless. The motion judge failed to take into account the uncontradicted
    evidence regarding the calculation under s. 8.7(iii) of the annual percentage
    increase of pensioners who retired during the current year. Those pensioners
    are not entitled to the full years cost-of-living increase and their annual
    percentage increase is prorated according to the number of months of
    retirement. The expert evidence established that by reason of the prorating,
    using a Pension Index rounded to one decimal place will often yield an annual
    percentage increase with three or more decimal places. Therefore, resort must
    be had to the s. 8.7(iv) two-decimal place rounding rule. That, in turn, means
    that using the Statistics Canada one-decimal point rounding to determine the
    Pension Index does not render s. 8.7(iv) meaningless and the whole foundation
    for the motion judges interpretation collapses.

[15]

Bell argues that the motion judge did not err.
    The evidence regarding the calculations and need to round or not round was
    uncontradicted and the argument that the motion judge made a palpable and
    overriding error of fact should be rejected. Bell has used the two-decimal
    rounding policy since 1998 with no complaint from the pensioners. The motion
    judge did not err by finding that the Statistics Canada one-decimal policy
    would render s. 8.7(iv) meaningless in relation to s. 8.7(ii) which governs the
    annual percentage increase for all but a very small number of pensioners.

[16]

For the following reasons, we conclude that the
    appeal should be allowed.

[17]

Our starting point is the language of s. 1.29.
    We agree with the appellant and the motion judge that, on its face, s. 1.29
    states that
both
the
    annual percentage increase and the Consumer Price Index are to be determined by
    Statistics Canada. That conclusion is supported by the comma following the
    phrase Consumer Price Index and the series qualifying rule referred to by
    the motion judge.

[18]

We add here that the appellant led evidence to
    explain the reason for the Statistics Canada one-decimal point rounding policy.
    An expert testified that the Consumer Price Index cannot be accurately measured
    to two decimal points and to publish more than one decimal point would convey
    a message about the precision and accuracy of the index that would not be
    justified. The one-decimal point rounding is also the convention among most
    statistical agencies.

[19]

We do not accept Bells submission that adhering
    to the one-decimal rounding policy is undermined by the experts admission on
    cross-examination that Statistics Canada follows the one-decimal rounding
    policy for its own purposes and is not in the business of telling people how
    to use [its] data. As the expert explained, the policy Bell adopts for the
    Plan is matter for negotiation between Bell and its employees. In our view this
    simply states the obvious. Statistics Canada determines and publishes the
    annual percentage increase in the Consumer Price Index using what it regards as
    sound statistical practices. Statistics Canada has no authority to dictate how
    pensions are to be adjusted for inflation and parties are free to adopt
    whatever method they wish. However, the question before the motion judge and
    before us is whether the words in the Plan require the parties to adopt the
    Statistics Canada approach.

[20]

We agree with the motion judge that the language
    the parties have adopted in s. 1.29 points in the direction of applying
    Statistics Canadas calculation of the annual percentage increase of the
    Consumer Price Index. That interpretation is supported by use of the comma
    indicating that the phrase as determined by Statistics Canada modifies both
    the phrases

Consumer Price Index and annual
    percentage increase.
It is also supported by the evidence of
    sound statistical methodology supporting the one-decimal rounding policy.

[21]

In our view, having regard to the grammatical
    meaning of s. 1.29 and the evidence regarding accepted statistical conventions
    for rounding, a strained interpretation of s. 1.29 would be required to make it
    mean that Statistics Canada determines only the increase in the Consumer Price
    Index and leaves it to Bell to adopt a different rounding policy to determine
    the Pension Index.

[22]

This brings us to the next stage, namely reading
    s. 1.29 in the context of the Plan as a whole. We agree with the motion judge
    that this is an important part of the interpretive exercise. We also agree that
    when a pension scheme should be interpreted as a whole and that the meaning of
    a particular clause should be considered in conjunction with other relevant
    clauses:
Dinney v. Great-West Life Assurance Co.
, 2009 MBCA 29, 236 Man. R., 299, at paras. 61-2; Geoff R. Hall,
Canadian
    Contractual Interpretation Law
(3rd ed.) (Toronto: LexisNexis
    Canada, 2016), at p. 256. There can be no doubt that the crucial point for the
    motion judge was his conclusion that accepting the Statistics Canada
    one-decimal rounding policy would render s. 8.7(iv) meaningless or partly
    meaningless. In our view, that conclusion rests on either (or both) a palpable
    and overriding error of fact or an extricable error of law.

[23]

The palpable and overriding error of fact is
    that the motion judges conclusion ignores the uncontradicted evidence that
    using the Statistics Canada one-decimal rounding policy will frequently produce
    a three-decimal figure in the calculation of the annual percentage increase for
    recently retired pensioners under s. 8.7(iii), and that the two-decimal
    rounding provision on s. 8.7(iv) applies and therefore has meaning.

[24]

Bell argues that as the evidence was
    uncontradicted, the motion judge could not have misunderstood or mistaken its
    effect. However, even if the motion judge understood and did not mistake the
    effect of the evidence, we have no explanation for why he failed to take it
    into account in reaching the conclusion that s. 8.7(iv) would be rendered
    meaningless. In our respectful view, the motions judges failure to apply the
    evidence to the interpretation of the Plan amounts to a palpable and overriding
    error of fact. In the words of
Waxman v. Waxman
(2004)
, 186 O.A.C. 201,
    at paras. 296-7, his finding was made in conflict with accepted evidence and
    is plain to see and therefore palpable. The error is also overriding as
    it determined the result.

[25]

If we were to accept Bells submission that the
    motion judge only meant meaningless in relation to s. 8.7(ii), we are left
    with his conclusion that s. 8.7(iv) would be rendered partly meaningless. In
    our view, that reflects an extricable error of law.

[26]

It is not apparent what partly meaningless
    means. A contractual provision either has a meaning or it does not. Courts will
    strive to give all provisions in a contract meaning and to avoid an
    interpretation of one provision that would render another provision meaningless
    or redundant. The redundancy rule relied upon by the motion judge was explained
    by this court in
Scanlon v. Castlepoint Development Corp
. (1992), O.R. (3d) 744, at para. 88 (leave to appeal refused, [1993]
    S.C.C.A. No. 62).

To the extent that it is possible
    to do so, [a contact] should be construed as a whole and effect should be given
    to all of its provisions. The provisions should be read, not as standing alone,
    but in light of the agreement as a whole and the other provisions thereof:
Hillis
    Oil & Sales Ltd. v. Wynn's Canada Ltd
., [1986] 1 S.C.R. 57 at p. 66, 25
    D.L.R. (4th) 649 at p. 655. The court should strive to give meaning to the
    agreement and "reject an interpretation that would render one of its terms
    ineffective":
National Trust Co. v. Mead
, [1990] 2 S.C.R. 410 at p.
    425, 71 D.L.R. (4th) 488 at p. 499.

[27]

In this case, as we have explained, the rounding
    provision in s. 8.7(iv) would not be rendered ineffective by giving s. 1.29 its
    plain grammatical meaning. It will be frequently necessary to round to two
    decimal points to determine the annual percentage increase for recently retired
    pensioners.

[28]

Bell asks us to ignore that fact as the recently
    retired pensioners represent only between 4% and 5% of the class. That number
    amounts to hundreds of pensioners each year. We fail to see why that category
    of pensioners should be ignored in the interpretation of the Plan.

[29]

Adhering to the Statistics Canada one-decimal
    rounding policy for the purpose of determining the Pension Index pursuant to s.
    1.29 does not strip s. 8.7(iv) of meaning. The plain grammatical reading
    of s. 1.29 is readily reconcilable with the rounding method specified by s.
    8.7(iv) with respect to the other provisions of s. 8.7 and it follows that the
    plain grammatical meaning should be followed.

[30]

Alternatively, the motion judge made an extricable error of law by
    failing to consider the
contra proferentem
rule. The motion judge
    found the wording of the Plan to be awkward (para. 69). He referred briefly
    to the appellants
contra proferentem
argument but did not explain why
    the doctrine should not apply.

[31]

The Plan was drafted by Bell without meaningful participation by the
    pensioners who are a vulnerable group in relation to Bell. The
contra proferentem
rule of interpretation applies to contracts  on the simple theory that any
    ambiguity  must be resolve against the author if the choice is between him and
    the other party to the contract who did not participate in its drafting:
McClelland
    & Stewart Ltd. v. Mutual Life
, [1981] 2 S.C.R. 6, at p. 15.
Contra
    proferentem
is regularly applied to resolve ambiguities in pension
    documents in favour of pensioners: see
ONeill v. General Motors of Canada
    Ltd
., 2013 ONSC 4654, 6 C.C.P.B. (2nd) 257, at paras. 21-2.

[32]

In our view, the Plan is not ambiguous and, for the reasons above, the
    appellants interpretation is the correct one. We therefore do not find it
    necessary to resort to
contra proferentem
. However, it is a very short
    step to take from the motion judges observation that the wording of the Plan
    is awkward to finding that the wording is ambiguous. Having found the wording
    to be awkward, the motion judge should have taken that step, applied the
contra
    proferentem
doctrine, and ruled that given the ambiguity, the
    interpretation favouring the pensioners should prevail. His failure to do so
    represents an extricable error of law reviewable by this court under the
Saatva
standard of review.

DISPOSITION

[33]

Accordingly, we allow the appeal, set aside the
    summary judgment dismissing the action and in its place award summary judgment
    in favour of the appellant. The matter is remitted to the motion judge for any
    ancillary or consequential matters that may arise from our judgment.

[34]

The appellant is entitled to costs fixed in the
    amount agreed to by the parties, namely $22,500 inclusive of taxes and
    disbursements.

Released: February 21, 2020

JCM

J.C. MacPherson
    J.A.

Robert J. Sharpe
    J.A.

M. Jamal J.A.