COURT OF APPEAL FOR ONTARIO

CITATION:  R. v. McDonald, 2016 ONCA 288

DATE: 20160421

DOCKET: M43447 (C44874)

Doherty, Watt and Miller JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Paul McDonald

Applicant (Appellant)

Erin Dann and Joseph Di Luca, for the applicant

Benita Wassenaar, for the respondent

Heard:  April 11, 2016

Application to set aside an order dated October 3, 2008,
    dismissing the applicants appeal as abandoned.

Doherty J.A.:

[1]

The applicant was convicted of sexual assault and related offences some
    15½ years ago in November 2000.  In November 2003, he was declared a dangerous
    offender and sentenced to an indeterminate sentence.  He appealed conviction
    and sentence.

[2]

His appeal proceeded as an inmate appeal until February 2006 when a
    solicitors Notice of Appeal was filed by the applicants former lawyer (appeal
    counsel).  Transcripts from the trial and sentencing proceeding were filed in
    July 2007.  Appeal counsel missed two perfection dates in June and July of
    2008.  The appeal was to be spoken to in Purge Court on September 24, 2008.  On
    September 22, 2008, appeal counsel filed a Notice of Abandonment signed by
    appeal counsel.  The appeal was dismissed as abandoned on October 3, 2008.

[3]

The applicant claims that he did not instruct appeal counsel to abandon
    his appeal.  He contends that he never intended to abandon his appeal and never
    agreed that his appeal should be abandoned.  Appeal counsel maintains that he
    did receive clear instructions from the applicant to abandon the appeal and
    that he filed the Notice of Abandonment as a consequence of those instructions.

[4]

The preparation and listing of this application have been delayed by a
    number of factors, none within the control of the applicant.  The court now has
    the benefit of an extensive record setting out the long and unhappy history of
    the proceedings relating to this application.  The applicant and appeal counsel
    have filed affidavits.  Both were cross-examined at length on those
    affidavits.

[5]

The appeal was dismissed based on the Notice of Abandonment.  Counsel
    for the applicant and Crown counsel agree that as the appeal was not heard on
    the merits, this court has the discretion to set aside the dismissal and reopen
    the appeal if it is in the interests of justice to do so:  see
R. v. H.
    (E.F.)
;
R. v. Rhingo
(1997), 115 C.C.C. (3d) 89 (Ont. C.A.), at pp.
    100-101;
R. v. Sipos
, 2008 ONCA 325, 235 O.A.C. 277, at para. 6.

[6]

In the present circumstances, the interests of justice inquiry focuses
    primarily on whether the applicant instructed appeal counsel to abandon the
    appeal.  If he did, that decision must weigh against him in determining whether
    the appeal should be reopened.  If, however, the applicant did not instruct his
    counsel to abandon the appeal, the interests of justice require that the appeal
    be reopened.  The
Criminal Code
gives the applicant a right of appeal,
    both from conviction (s. 675) and from the finding that he is a dangerous
    offender (s. 759).  If the applicant did not instruct appeal counsel to abandon
    the appeal, it would be unfair to refuse to reopen the appeal and effectively deprive
    the applicant of the rights of appeal he has under the
Criminal Code
.

[7]

As it is the applicant who seeks to reopen the appeal, he bears the
    burden of establishing the facts said to warrant reopening the appeal.
    Principal among the facts asserted by the applicant is his claim that he did
    not instruct appeal counsel to abandon the appeal.

[8]

After careful consideration of the entirety of the application record,
    and acknowledging that there may have been some disconnect between appeal
    counsels perception of his instructions and the actual instructions, I am
    satisfied that the applicant has established that he did not instruct appeal
    counsel to abandon the appeal and that he never intended to abandon his appeal.

[9]

In coming to that conclusion, I have carefully considered the applicants
    evidence.  He strongly denies ever telling appeal counsel to abandon his
    appeal.  He adamantly rejects any suggestion of a possible misunderstanding of
    any instruction he may have given to appeal counsel.  There are good reasons to
    doubt the applicants credibility.  That said, he has never wavered from the
    position that he did not instruct appeal counsel to abandon the appeal and
    always wanted the appeal pursued and determined on its merits.

[10]

Appeal counsel maintains that the applicant gave clear instructions to
    abandon his appeal. While these two competing versions of events deserve
    careful consideration, in the end, the surrounding circumstances considered as
    a whole drive my factual finding.

[11]

First, I accept counsel for the applicants submission that from a
    common sense point of view, a decision to abandon the appeal in September 2008
    made little sense.  It is difficult to see what the applicant had to gain by
    abandoning his appeal at that time.  He was serving an indeterminate sentence.
    According to appeal counsel, the appeal was on the verge of perfection and
    could presumably have been argued in the near future.  The applicant had waited
    several years for the perfection of his appeal.  He had suffered through
    several delays.  Why, after so many years and so much frustration, would the applicant
    abandon his appeal so close to the argument of the appeal?

[12]

Second, contemporaneous records support the applicants version of
    events.  Telephone records of the communications between the applicant and
    appeal counsels office in August and September 2008 before the Notice of Abandonment
    was filed are not consistent with appeal counsels recollection.  There are
    several calls in August and September, however, all are very brief save for a
    seven minute conversation on August 1, 2008, almost eight weeks before appeal
    counsel filed the Notice of Abandonment.  The telephone records strongly
    suggest that there were no meaningful discussions between the applicant and
    appeal counsel about abandoning the appeal in the several weeks prior to the
    filing of the Notice of Abandonment.  If the instructions were given during the
    August 1
st
conversation, one wonders why the Notice of Abandonment
    was not filed for almost eight weeks, and on the eve of appeal counsels
    required attendance at Purge Court.

[13]

The applicants conduct in the weeks and months after the Notice of
    Abandonment was filed and the appeal dismissed is inconsistent with the
    applicant having instructed appeal counsel to abandon the appeal.  The
    applicant made several statements to Corrections staff indicating that he was
    still pursuing his appeal after September 22, 2008.  When staff personnel told
    him that the appeal had been dismissed, he insisted they were wrong.  The
    applicant also made many, many attempts to contact appeal counsel on the
    telephone after the Notice of Abandonment was filed.  Not only did the
    applicant make many attempts, Corrections staff also made attempts on his
    behalf.

[14]

Crown counsel makes the point that evidence of the applicants
    statements to Corrections staff and his many attempts to contact appeal counsel
    are consistent with someone who had abandoned his appeal and then changed his
    mind.  Crown counsels submission, however, loses its force when the evidence
    of the applicants conduct after the supposed abandonment is considered in
    combination with the rest of the evidence.

[15]

Third, appeal counsels recollection of events, and his conduct during
    the relevant time, support the conclusion that the applicant did not give
    instructions to abandon his appeal. Appeal counsels recollection of the actual
    instructions to abandon the appeal is vague to say the least.  He does not
    remember what was said, when it was said, whether it involved one or more
    conversations, what he did to satisfy himself that the decision to abandon was
    an informed one, what advice, if any, he gave to the applicant about abandoning
    the appeal at that time, or what explanation, if any, he gave to the applicant
    about the effect of abandoning his appeal.  The closest appeal counsel comes to
    a recollection of an explanation he offered as to the effect of the abandonment
    is his evidence that he told the applicant that once he abandoned the appeal,
    its pretty much over.  If that comment captures the entirety of appeal
    counsels advice, it did not adequately inform the applicant of the consequences
    of an abandonment.

[16]

The absence of anything in writing, other than appeal counsels Notice
    of Abandonment, offering any confirmation of appeal counsels claim that he
    received specific instructions to abandon the appeal is troubling.  There are
    no written instructions from the applicant.  There is no written confirmation
    from appeal counsel of any instructions.  There is nothing in writing from appeal
    counsel to the applicant indicating that the instructions have been followed,
    and the appeal dismissed as abandoned.  Even though appeal counsels file has
    been lost, he does not suggest it contained any of the documentation outlined
    above.

[17]

Appeal counsel also acknowledged that the applicant had significant
    intellectual and mental limitations and deficiencies.  He agreed that he
    sometimes had some difficulty in effectively communicating with the applicant
    over the course of their relationship.  Despite this, appeal counsel does not
    identify any steps he took to ensure that the applicant understood the effect
    of an abandonment and that he truly wanted to abandon his appeal.

[18]

In my view, appeal counsels conduct when he says he received
    instructions to abandon the appeal is also inconsistent with him having
    received those instructions.  By August 2008, counsel had missed two perfection
    dates set by the Court of Appeal.  He was in breach of an order of a Justice of
    the Court of Appeal.  Crown counsel was asking appeal counsel about the status
    of the appeal as the purge date approached.  If, as appeal counsel eventually
    suggested in his cross-examination, the applicant had told him sometime in
    August that he wanted to abandon the appeal, common sense strongly suggests
    that Crown counsel, who was pressing appeal counsel for some indication of the
    status of the appeal, would have been told by appeal counsel that the applicant
    had decided to abandon the appeal, rendering the perfection of the appeal a
    moot question.  Appeal counsel could offer no explanation for his failure to
    contact Crown counsel to advise her that the applicant had instructed him to
    abandon the appeal if, in fact, as appeal counsel insisted, he received those
    instructions well before the scheduled Purge Court.

[19]

Appeal counsels integrity and commitment to the interests of his clients
    are well known to this court.  Unfortunately, he had encountered personal and health
    problems that impacted his ability to properly perform his duties.  Appeal
    counsel dates those problems to a time after the events relevant to this
    application.  There is, however, medical evidence that those problems may have
    negatively impacted on his performance in the fall of 2008.  Thankfully, those
    difficulties seem to be behind appeal counsel now.

[20]

Ultimately, the Crowns position that the applicant abandoned his appeal
    hinges on the word of appeal counsel.  I take that word seriously and am
    reluctant to do anything other than accept it.   In the end, however, the entirety
    of the record compels me to conclude that whatever discussion may have occurred
    between the applicant and appeal counsel about abandoning the appeal, the
    applicant did not give instructions to abandon the appeal.  The applicant wanted
    his appeal heard.  He has always wanted his appeal heard.  He still wants it
    heard.  He is entitled to that hearing.

[21]

I would set aside the order dismissing the appeal and reinstate the
    appeal in its entirety.  The appeal should be perfected forthwith.  I will be
    available to case manage the perfection and listing of the appeal if counsel
    require my assistance.

Released:

DD  APR 21 2016

Doherty J.A.

I agree David Watt
    J.A.

I agree Bradley W.
    Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Mohammad, 2016 ONCA 297

DATE: 20160425

DOCKET: C58841

Feldman, Simmons and Pepall JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Khaleel Mohammad

Appellant

Khaleel Mohammad, in person

Leslie Paine, for the respondent

Heard and released orally: April 6, 2016

On appeal from the sentence imposed on December 13, 2015
    by Justice John MacDonald of the Superior Court of Justice, sitting without a
    jury.

ENDORSEMENT

[1]

The appellant seeks leave to appeal a global sentence of 6 years, 7.5
    months for break and enter with an intent, robbery, assault with a weapon,
    assault causing bodily harm, mischief under, and uttering death threats. He
    makes two submissions: 1. that the trial judge erred in his attribution of the
    7.5 months of presentence custody, and 2. that the global sentence of 6 years
    should be reduced to 5 years.

[2]

Crown counsel has acknowledged that there may have been confusion on the
    part of the trial judge regarding the Crowns position on whether the 6 year
    sentence was intended to be in addition to or after credit for the presentence
    custody.  Nevertheless, the trial judge clearly believed that the Crown sought
    6 years, plus presentence custody and he also believed that that sentence was
    fit and required in the circumstances.

[3]

From our reading of the record, it appears that the trial judge did
    misunderstand the Crowns position.  In our view, it was appropriate to reduce
    the global sentence of 6 years by the presentence custody, in order to make the
    credit of the presentence custody a meaningful one.

[4]

We commend the appellant for his clear progress and determination in
    custody to qualify himself for legitimate work on his release.  However, we see
    no basis to interfere with the 6 year global sentence imposed by the trial
    judge for these extremely serious crimes.  In the result, leave to appeal
    sentence is granted, the sentence is modified to 6 years less credit of 7.5
    months for pretrial custody.

K. Feldman J.A.

J. Simmons J.A.

S.E. Pepell J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. O'Neill, 2016 ONCA 307

DATE: 20160427

DOCKET: C58587

Strathy C.J.O., Pardu and Benotto JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Hugh ONeill

Applicant

Frank Miller, for the applicant

Matthew Asma, for the respondent

Heard: April 22, 2016

ENDORSEMENT

[1]

The applicant was convicted in the Ontario Court of Justice under s. 253(1)(a)
    and (b) of the
Criminal Code
of having care and control of his vehicle
    while his ability to drive was impaired by alcohol and of having care or
    control when his blood alcohol level exceeded 80 milligrams of alcohol in 100
    millilitres of blood. His appeal to the Superior Court of Justice was
    dismissed. He seeks leave to appeal to this court on a question of law pursuant
    to s. 839(1) of the
Criminal Code
.

[2]

In the early hours of a December morning, police found the applicant asleep
    in the drivers seat of his truck, parked in a lot outside an industrial
    building in London, Ontario. The key was in the ignition and the truck was
    running. It took a while for the officer to rouse him. When he awoke, he
    demonstrated signs of impairment and the officer formed the opinion that the
    applicants ability was impaired by alcohol. Testing detected blood alcohol
    levels of 137 and 136 milligrams per 100 millilitres.

[3]

At issue in the courts below was the effect of the statutory presumption
    contained in s. 258(1)(a) of the
Code
, which provides that the occupant
    of the drivers seat of a vehicle is deemed to have the care or control of the
    vehicle unless they establish on a balance of probabilities that they did not
    occupy that seat for the purpose of setting the vehicle in motion.

[4]

The applicants position was that after a night of drinking he was
    driven back to his truck by friends and went to sleep in the drivers seat of
    the truck with the intention of sleeping it off until he was sober. He
    testified that his plan was to get up the next morning and go have a coffee
    and some, ah you know a bagel or whatever, my usual routine and to drive to
    his work site in St. Thomas, Ontario. He woke up during the night to urinate,
    returned to the truck, got into the drivers seat, put the key in the ignition,
    started the vehicle and turned on the heater for warmth. He then went to sleep
    in the drivers seat with the vehicle running and the gearshift apparently in
    the park mode.

[5]

The trial judge found that the Crown was entitled to the benefit of the
    presumption in the
Code
and that the applicant had failed to rebut the
    presumption because he occupied the drivers seat with the intention of setting
    the vehicle in motion in the morning, once he had sobered up.

[6]

In any event, the trial judge held that the applicant was in care and
    control of the vehicle with the attendant risk that it could be put in motion and
    could become dangerous. There was no reasonable doubt of his guilt, quite apart
    from the presumption.

[7]

The Summary Conviction Appeal Court (SCAC) judge dismissed the appeal.
    The applicant argued that his evidence at trial was capable of being
    interpreted to support the conclusion that he was going to get out of the truck
    the next morning to get coffee and did not intend to immediately put the
    vehicle in motion. The SCAC judge, relying on
R. v. Boudreault
, 2012
    SCC 56, held that a stated intention to drive later did not automatically
    rebut the statutory presumption. She said, at para. 24:

A lack of a contemporaneous
    intention to drive is not enough on its face to alleviate a finding of care
    and control and therefore rebut the presumption found in s. 258(1)(a) of the
Criminal
    Code
.

[8]

In what the respondent describes, accurately in our view, as
obiter
,
    the SCAC judge continued, at para. 27:

even if the appellant as he stated did not have an intention
    to drive at the time he was found by the police in an inebriated state, if
    there still existed,
inter alia
, a realistic risk of danger at that
    time, then a finding of care or control is still at least possible and
    consequently, the presumption has not been rebutted.

[9]

The respondent acknowledges that this statement is problematic, because
    it suggests that the presumption must be rebutted by evidence of the absence of
    risk of danger, independent of the absence of an intention to drive.

[10]

As
    the Supreme Court observed in
Boudreault
,

at para. 41, the
    intention to set the vehicle in motion suffices
in itself
to create
    the risk of danger contemplated by the offence of care or control. Although
    the presumption may be rebutted by proof of the absence of the requisite
    intention, the risk of danger remains relevant,
not
for the purpose of rebutting the presumption, but for the purpose of
    determining whether the accuseds conduct in relation to the vehicle presents a
    realistic risk of danger to persons or property so as to establish care or
    control under s. 253(1) of the
Code
:
Boudreault
,

at
    para. 41.

[11]

The
    test for leave under s. 839 of the
Code
is set out in
R. v. R. R
.,
    2008 ONCA 497, and
R. v. Rulli
, 2011 ONCA 18. Leave is available only
    on a question of law and is granted sparingly. The key considerations are (a) the
    strength of the proposed appeal and (b) the significance of the proposed
    question of law to the administration of justice in the province, beyond the
    circumstances of the particular case.

[12]

In
    our view, the test has not been met.

[13]

First,
    the grounds of appeal are weak. The trial judge found that the applicant had
    failed to discharge the burden of proof to rebut the presumption. The applicant
    did not satisfy the trial judge that it was his intention to leave the vehicle
    and to walk to some unidentified place for breakfast. The applicants evidence
    on this point was ambiguous at best and he has identified no palpable and
    overriding error in the trial judges assessment of that evidence.

[14]

Second,
    the issue of law is well-settled by the Supreme Court of Canada in
Boudreault
and in
R. v. Whyte
, [1988] 2 S.C.R. 3, as well as in this courts
    decision in
R. v. Hatfield
(1997), 33 O.R. (3d) 350
.
The SCAC
    judges
obiter
comments were not necessary to her conclusion, and have
    not, to our knowledge, been followed in other cases. We see no issue of
    significance.

[15]

For
    these reasons, the motion for leave to appeal is dismissed.

G.R. Strathy C.J.O.

G. Pardu J.A.

M.L. Benotto J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Stephens, 2016 ONCA 262

DATE: 20160408

DOCKET: C57080

MacPherson, MacFarland and LaForme JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Omar Stephens

Appellant

Bernadette Saad, for the appellant

Sandy Thomas, for the respondent

Heard: April 7, 2016

On appeal from the conviction entered on July 11, 2012
    and the sentence imposed on May 1, 2013 by Justice Lois B. Roberts of the Superior
    Court of Justice, sitting without a jury.

ENDORSEMENT

[1]

The appellant was convicted of one count of trafficking in cocaine by
    Roberts J. of the Superior Court of Justice on July 11, 2012. The trial judge
    imposed a conditional sentence of 24 months less five days, followed by one
    year of probation on May 1, 2013. The appellant appeals the conviction and
    sentence.

[2]

The conviction arose from a drug transaction with an undercover police
    officer in the Glenholme Ave. and Clovelley Ave. area of Toronto. The Crowns
    case was that a known drug user with a long criminal record, Kathleen Barry,
    had given a small quantity of cocaine (1.3 grams) to the appellant who in turn
    gave it to another man, George Corbiere, who then transferred it to a police
    officer, Detective Constable Dion Monahar, who paid $100 for it. The part of
    the transaction involving the appellant, Corbiere and Monahar took place with
    all three men standing in close proximity outdoors in an area adjacent to a
    low-rise apartment building.

[3]

The appellant testified that he did not know that the small package
    given to him by Barry contained cocaine. Barry testified and confirmed the
    appellants testimony on this point.

[4]

The trial judge disbelieved the appellants and Barrys testimony:

Frankly, I found that Ms. Barry was an incredible and
    unreliable witness.

While he may have been duped by his affection for Ms. Barry,
    Mr. Stephens ultimately showed by his admissions that he was not blind to what
    was going on with Ms. Barry and her friends. He was a knowing and active participant
    in the delivery of the crack cocaine.

I find that Mr. Stephens took an active role in the transaction
    with D.C. Monahar. He delivered the drugs to Mr. Corbiere and was part of the
    chain of distribution of the drugs to the purchaser.

[5]

The trial judge believed Monahars testimony, including, crucially, that
    the appellant was present and actively participated in the three-way transfer
    of the cocaine in the outdoor area near the apartment building and that the
    cocaine was in a clear plastic baggy.

[6]

The appellant appeals his conviction on several grounds.

[7]

First, the appellant contends that the trial judge reversed the burden
    of proof on the key issue of whether a napkin or tissue may have been present
    at the scene. The appellant testified that he did not know what he was
    transferring because the substance was hidden under wrapping.

[8]

We do not accept this submission. The trial judge explicitly accepted
    Monahars testimony that the cocaine was inside a clear plastic baggy.
    Moreover, she said this about the appellants testimony on this issue:

I do not accept Mr. Stephens evidence that he did not know
    that the package contained drugs, nor does his evidence leave me with a
    reasonable doubt. First, I do not believe that the package was wrapped in a
    napkin, tissue or a paper towel. Mr. Stephens evidence was very unreliable on
    this extremely important point: as already noted, he started by saying that the
    package was wrapped in a paper towel, went so far as to describe it as being
    wrapped in a particular napkin from a particular restaurant, and then ended up
    saying it was wrapped in a tissue with which one would blow ones nose.

[9]

We see no error in the way the trial judge treated this issue.

[10]

Second,
    the appellant submits that the trial judge erred by arriving at conclusions on
    new issues not raised at trial and not supported by the facts, including that
    the appellant was involved in a romantic relationship with Barry, observations
    about the appellants demeanour (sweating) in the courtroom on a date
    originally scheduled for judgment, finding that the appellant observed Barry
    doing drugs at a party, and concluding that there must have been some
    communication between the appellant and Barry after the charges were laid.

[11]

In
    our view, there was evidence to support all of these conclusions. In any event,
    they were at the extreme perimeter of the issues at the crux of the trial
    namely, did the appellant participate in the transaction outside the apartment
    and did he know that the substance involved in the transaction was cocaine?

[12]

Third,
    the appellant asserts that the conclusions by the trial judge on the two
    charges, possession for the purpose of trafficking (guilty) and possession of
    the proceeds of crime, namely $100 (not guilty) are logically irreconcilable
    and therefore the conviction on the former charge is unreasonable.

[13]

We
    disagree. The evidence on the trafficking count was very strong. It included
    not only Monahars clear evidence about the appellants role in the
    transaction, but also Officer Duncans corroborating testimony. The evidence on
    the proceeds count was weaker. Although $100 was found on the ground, it was
    unclear how it got there. Accordingly, the trial judge entered an acquittal on
    the proceeds count. In short, the evidence established beyond a reasonable
    doubt that the appellant possessed the cocaine, knowing that it was cocaine.
    The evidence did not conclusively establish that he possessed the $100.

[14]

The
    appellant appeals his sentence. He submits that the 24 month less five day
    sentence was too long in comparison with Corbieres six month conditional
    sentence, that the electronic monitoring and community service components of
    the sentence were harsh and unnecessary, that probation was unwarranted, and
    that credit should have been given for the long and strict bail with which he
    complied pre-trial.

[15]

We
    are not persuaded by this submission. The appellant could easily have received
    a custodial sentence in a provincial, or even federal, institution given that
    the drug involved was cocaine. A conditional sentence with electronic
    monitoring followed by probation and community service was neither unfit nor
    unreasonable.

[16]

The
    appeal is dismissed.

J.C.
    MacPherson J.A.

J.
    MacFarland J.A.

H.S. LaForme J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Stevens, 2016 ONCA 292

DATE: 20160422

DOCKET: C58578

Strathy C.J.O., Gillese and Pardu JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Junior Stevens

Appellant

Mark C. Halfyard and Breana Vandebeek, for the appellant

Robert Morin, for the respondent

Heard: April 20, 2016

On appeal from the conviction entered on December 13,
    2013 by Justice L. Ricchetti of the Superior Court of Justice, sitting with a
    jury.

ENDORSEMENT

[1]

The appellant appeals his conviction on a charge of importing 933 grams
    of cocaine. He also brings a motion to adduce fresh evidence on the appeal.

[2]

The only issue at trial was whether the Crown had proven beyond a
    reasonable doubt that the appellant knew of the existence of the cocaine found
    in his suitcase during a customs inspection at Pearson Airport.

[3]

The cocaine was secreted in the lining of a binder containing music CDs.
    Customs Officer Serengelyi (the Customs Officer) testified that the binder
    had attracted his interest due to its weight, the thickness of its covers and his
    observation that the seams of the covers had been re-glued.

[4]

The appellant denied knowledge of the drugs. He claimed the binder had
    been given to him by a friend in Jamaica for delivery to a third party in
    Canada.

[5]

The appeal centres on a statement allegedly made by the appellant to the
    Customs Officer. The Customs Officer testified that after admitting that he
    owned and had packed his suitcase, and while he was inspecting the binder, the
    appellant volunteered that he had purchased the binder used in Jamaica (the
    impugned statement).

[6]

The appellant denied making the impugned statement.

[7]

Neither party had anticipated the impugned
    statement as there was no reference to it, either in the Customs Officers
    notes or in his evidence at the preliminary inquiry. At the preliminary, the Customs
    Officer indicated that without looking at his notes, he could not recall any of
    the conversations he had with the appellant. At trial, the Customs Officer
    explained that he did not routinely take notes when he was examining baggage
    and he did not make a note of the appellants statement because he did not
    consider it important at the time. He did not say anything about the statement
    at the preliminary hearing because he was not asked about it.

[8]

The trial judge admitted the statement in evidence before the jury,
    without conducting a
voir dire
.

[9]

The appellant raises three interconnected grounds of appeal. He submits
    that the trial judge erred:

(a) in
    admitting the statement without a
voir dire
;

(b) in
    refusing the defence application for a mistrial based on the prejudice caused
    by the unanticipated evidence in the statement; and

(c) in failing
    to instruct the jury that the officers omission of the statement in his notes
    went to its ultimate reliability.

[10]

We do not accept these submissions.

(a)

The admission of the impugned statement
    without a
voir dire

[11]

At the outset of the trial, before the Crown opened its case, the defence
    waived the need to establish the voluntariness of pre-arrest statements made by
    the appellant to two customs officers. The appellant argues that this waiver of
    a
voir dire
was not informed, because he was not aware of the Customs
    Officers evidence about the impugned statement. He points to
R. v. Hodgson
,
    [1998] 2 S.C.R. 449, at para. 41, as authority for the duty of the trial judge
    to ensure that a statement is voluntary notwithstanding counsels failure to
    raise the issue.

[12]

Hodgson
itself makes it clear that the trial judge does not
    commit reversible error unless clear evidence existed in the record which
    objectively should have alerted him to the need for a
voir dire
notwithstanding counsel's silence. Voluntariness is concerned with the
    circumstances in which a statement is made. The impugned statement did not
    affect or change the circumstances in which the pre-arrest statements were
    made. The voluntariness of the pre-arrest statements having been admitted, the
    trial judge made no reversible error in not holding a v
oir dire
in
    relation to the impugned statement. See
Park v. R.
, [1981] 2 SCR 64 at
    para. 15.

(b)

The denial of the mistrial
    application

[13]

The trial judges denial of the mistrial application was a discretionary
    decision. We cannot interfere unless the decision was clearly wrong or based on
    an erroneous principle. See
R. v. Chiassen
, 2009 ONCA 789, at para.
    14.

[14]

We make no such finding. In dismissing the mistrial application, the
    trial judge reasonably concluded that any potential prejudice arising from the Customs
    Officers evidence could be addressed through cross-examination.

[15]

We reject the appellants application to admit as fresh evidence on this
    ground of appeal portions of the transcript of the Customs Officers evidence
    at the preliminary hearing that were not put to either the witness or to the
    trial judge on the mistrial application. The transcript was obviously available
    at trial and other portions of the transcript were put to the Customs Officer
    in cross-examination. The evidence fails the
Palmer
test. It was
    available at trial and could have been adduced with due diligence. It was
    irrelevant, because it was essentially consistent with the Customs Officers
    evidence at trial. And finally, it could not reasonably have affected the
    result.

[16]

On cross-examination at trial, the Customs Officer admitted that his
    memory was not good and that the appellant may have said that he got it [the
    binder] used. We agree with the respondent that by the end of the trial the
    evidentiary value of the statement had been weakened.

[17]

In our view, the appellants ability to make full answer and defence was
    not impaired by the admission of the impugned statement.

(c)

The charge

[18]

The trial judges charge was provided to counsel in advance. The trial
    judge modified it to take into account suggestions made by defence counsel.
    There was no request by the defence for a special instruction in relation to
    the impugned statement. There was ultimately no objection to the charge as delivered.
    The trial judge summarized the evidence of the appellant and the Customs Officer
    and set out the positions of the Crown and defence concerning the Customs
    Officers evidence. He pointed out that the defence position was that the
    statement should not be relied upon because it was not in the Customs Officers
    notes and had not been mentioned at the preliminary inquiry. He instructed the
    jury that a prior inconsistent statement could be a factor in assessing the
    credibility of a witness. In our view, the appellant has demonstrated no error
    in the charge.

[19]

For these reasons, the appeal is dismissed.

G.R. Strathy C.J.O.

E.E.
    Gillese J.A.

G. Pardu
    J.A.


COURT OF APPEAL
    FOR ONTARIO

CITATION: R. v. Zaba, 2016 ONCA 167

DATE: 20160411

DOCKET: C60486

Watt, Lauwers and Huscroft JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Frank Zaba

Appellant

Erec Rolfe, for the appellant

Dena Bonnet, for the respondent

Heard:  January 8, 2016

On appeal from the conviction entered on September 26,
    2014 and the sentence imposed on October 14, 2014 by Justice J.J. Douglas of
    the Ontario Court of Justice.

Huscroft J.A.:

[1]

The appellant appeals his conviction for several offences against his
    wife including assault causing bodily harm, assault, unlawful confinement, use
    of a firearm in the commission of an indictable offence, dangerous driving, and
    possession of a firearm while prohibited. Charges of assault, threatening, and
    careless use of a firearm were stayed under the principle set out by the
    Supreme Court in
R. v. Kienapple
,
[1975] 1 S.C.R. 729.

[2]

The appellant was sentenced to a term of imprisonment totalling 52 months
    for four separate incidents. This was reduced to 42 months and 15 days
    imprisonment after the appellant received credit of 9.5 months for pre-trial
    custody.

A.

Background

[3]

On March 17, 2014 the complainant attended at the police station with
    her sister and gave a detailed statement alleging that the appellant had abused
    her mentally and physically on several occasions. The complainants statement
    was made under oath and she was warned of the legal consequences of making a
    false statement. Her statement was videotaped by the police. Unusually, the
    complainants sister was with her while she made her statement.

[4]

The complainants statement detailed four separate events of domestic
    abuse at the hands of the appellant:

1. On November 14, 2013,
    the appellant punched her in the head several times, resulting in a ruptured
    eardrum.

2. On February 4, 2014, the
    appellant hit, elbowed, and punched the complainant, shoved a firearm in her face,
    and threatened to use a gun to kill her ex-boyfriend, who had custody of their
    children.

3. On February 14, 2014,
    the appellant hit the complainant in the head several times, spit in her face,
    and chased her as she ran away. He then followed her in his truck as she escaped
    in the truck of a stranger who stopped to help her.

4. On March 14, 2014, the
    appellant grabbed the complainant, hit and bit her in the face, and threw her
    in the back seat of his truck. When she tried to escape, he dragged her back to
    their trailer.

[5]

The complainant did not want to testify at trial and she did so only following
    her arrest on a warrant issued by the trial judge. During her the first day of
    her testimony, the complainant sat on the floor of the witness box and cried or
    appeared to cry. She said that she wanted to get back together with the
    appellant and denied having any memory concerning many of the events outlined
    in her statement. The complainant did not repeat this behaviour on the second
    day of her testimony, but maintained that she had little memory of the relevant
    events.

[6]

The trial judge admitted the complainants March 17, 2014 statement to
    the police into evidence for the truth of its contents, in accordance with the
    decision of the Supreme Court in
R. v. B. (K.G.)
, [1993] 1 S.C.R. 740
(K.G.B.)
.
    The other evidence against the appellant included photographs of the
    complainants injuries, taken March 17, 2014, and testimony from Mr. Valiquette,
    a neighbour of the complainants ex-boyfriend, who witnessed the February 4,
    2014 events and called 911.

[7]

The appellant did not testify at his trial.

B.

Issues

[8]

The appellant raises the following issues on appeal:

1.

Did the trial judge err in
    admitting the complainants March 17, 2014 statement to the police under the
    principled exception to the hearsay rule?

2.

Did the trial judge improperly
    assess the credibility and reliability of the complainant?

3.

Did the trial judge provide
    sufficient reasons for convicting the appellant of assault causing bodily harm
    (Nov. 14, 2013), assault (Feb. 14, 2014),
[1]
and
unlawful confinement (March 14, 2014)
?

4.

Did the trial judge render an
    unreasonable verdict in convicting the appellant of assault causing bodily harm
    (Nov. 14, 2013) and dangerous driving (February 14, 2014)?

I address each of these issues in turn.

(1)

The admissibility of the complainants statement

[9]

The admissibility of hearsay under the principled exception depends on
    whether the requirements of necessity and reliability are met. The appellant
    concedes that necessity is established.

That leaves the requirement of
    reliability.

[10]

In
K.G.B.
,
the Supreme Court set out three criteria relevant to determining
    the threshold reliability of a statement
at
    pp. 795-96
:

i.

the statement is made under oath or solemn affirmation after a warning
    about the consequences of an untruthful account;

ii.

the statement is videotaped in its entirety; and

iii.

the opposite party has a full opportunity to cross-examine the witness
    on the statement.

[11]

Absent
    an error in principle, the trial judges decision on the question of threshold
    reliability  whether the hearsay ought to be admitted, not whether it ought to
    be relied on  is entitled to deference: see

R. v. Chretien
,
    2014 ONCA 403, 309 C.C.C. (3d) 418, at paras. 43-55.

[12]

There
    is no dispute concerning the satisfaction of the first two criteria in
K.G.B
.
    The complainants statement to police was sworn and videotaped. However, the appellant
    submits that the trial judge made two errors in principle in admitting the
    complainants statement. First, the trial judge erred in finding that the appellant
    had a full opportunity to cross-examine the complainant on her
K.G.B.
statement.
    Second, the trial judge erred in finding that the complainant had no motive to
    fabricate evidence.

Cross-examination

[13]

The
    appellant submits that he was deprived of a
meaningful
opportunity to cross-examine the complainant as a result of her memory loss.
    The appellant argues that it does not matter whether the complainants memory
    loss was real or feigned; the consequence is that his ability to cross-examine
    was rendered illusory and the complainants
K.G.B
.
statement is
    unreliable as a result. The appellant cites
R. v. Conway
(1997)
, 36 O.R. (3d) 579 (C.A.) and
R.
    v. Diu
(2000)
, 49 O.R.
    (3d) 40 (C.A.) as support for this proposition.

[14]

I
    would reject this ground of appeal.

[15]

Plainly,
    the appellant did not get everything he wanted from cross-examination. In
    particular, the complainant did not recant her allegations of abuse. Her memory
    was selective. But cross-examination was not rendered meaningless on this
    account. A considerable amount of information was elicited from the
    complainant, who agreed with many of defence counsels suggestions. The trial
    judge carefully considered the impact of the complainants professed memory
    lapses and concluded that they did not have the effect of rendering the right
    to cross-examination illusory so as to bar admission of her statement. This
    conclusion was open to the trial judge on the record.

[16]

Neither

Conway
nor
Diu
is authority for the proposition that
    difficulties in cross-examination render an out-of-court statement inadmissible
in all
circumstances. In
Conway
,
    unlike this case, the other
K.G.B.

criteria were not satisfied
     that is, the statement was not made under oath or affirmation and was not
    videotaped. In
Diu
, although the statement was videotaped it was not made
    under oath or affirmation. Not only were the other
K.G.B
.
criteria satisfied in this case, but there were additional indicia of
    reliability including photographs of the complainants injuries and the
    evidence of Mr. Valiquette.

Motive

[17]

The
    appellant submits that the complainant had a motive to fabricate her evidence: she
    wanted out of her relationship with the appellant and wanted him out of their
    residence in order to obtain unrestricted access to the appellants drugs. The
    appellant submits that the trial judge erred in finding, at the threshold
    reliability stage, that the complainant did not act on this motive, as this
    issue was relevant only to the ultimate reliability of the
K.G.B
.
statement. He argues that the threshold inquiry should have been limited to
    determining whether the witness had a motive to fabricate and should not have
    included an evaluation of that alleged motive.

[18]

This
    argument is without merit.

[19]

The
    trial judge was not limited to considering the mere existence a possible motive
    at the threshold reliability stage. Moreover, given the trial judges view that
    it was irrelevant  a red herring, as he described it  it could not
    undermine the complainants
K.G.B
.
statement at the threshold
    reliability stage.

(2)

The complainants credibility and reliability

[20]

The
    appellant submits that the trial judge made several errors in assessing the
    complainants credibility and reliability. In particular, the appellant submits
    that the trial judge failed to consider the complainants
K.G.B.

statement
    in regard to each count on the information, and wrongly treated the
    complainants reliability as an all-or-nothing proposition. The appellant submits,
    further, that the trial judge failed to give adequate weight to the finding
    that the complainant lied about her memory loss at trial when assessing her credibility.
    The appellant points to several statements made by the complainant under
    cross-examination that were not considered by the trial judge.

[21]

I
    would reject this ground of appeal.

[22]

The
    trial judges finding that the complainant was lying about her memory loss is
    key to his decision. It reinforces his conclusion as to the complainants
    credibility and reliability in making the
K.G.B
.
statement
    because he found that she lied in her trial testimony out of a desire not to
    incriminate the appellant. The trial judge found that the fundamental
    truthfulness of the complainants
K.G.B.
statement came out at various points,
    for example, when she said that her husband never hit me in the back of the
    head all that day. The trial judge interpreted this as hinting at the
    frequency of her abuse, even while exonerating the appellant for abuse on the
    relevant day.

[23]

The
    trial judge also referenced confirmatory evidence in several respects. For
    example, the trial judge referred to photographs of the complainants face taken
    March 17, 2014, which record injuries consistent with those that the
    complainant said occurred on March 14
th
. In addition, the trial
    judge found that Mr. Valiquette, who witnessed the incident on February 4th, was
    both credible and reliable.

[24]

The
    trial judge did not treat the complainants reliability as an all-or-nothing
    proposition, as the appellant submits. Although the trial judges reasons do not
    address all of the matters raised by the appellants counsel, this does not
    undermine the trial judges findings on the complainants credibility and
    reliability. Furthermore, although the complainant agreed with defence
    counsels suggestions as to what might have happened at several points in her
    testimony  for example, the possibility that her injuries were caused by the
    appellant grabbing her to prevent her from falling from the vehicle, or that
    the appellant may have disabled their vehicle to prevent her from driving while
    intoxicated rather than to prevent her escape  this is consistent with the
    trial judges finding that the complainant lied in her testimony at trial in
    order to protect the appellant. Shortcomings in the complainants evidence on
    cross-examination, such as unanswered questions as to when the injury to her
    eardrum occurred, are not fatal to a finding that her evidence was otherwise
    credible and reliable.

The sisters role in the interview

[25]

The
    appellant characterized the trial judges reliance on exchanges between the
    complainant and her sister, who was present when the complainant made her
    statement to the police, as constituting oath helping.

[26]

I
    would reject this ground of appeal.

[27]

The
    trial judge was alive to the problem posed by the sisters role in the
    complainants
K.G.B
.
statement. The complainants sister
    accompanied her to the police station to support her and sat with her while she
    made her statement. Given the appellants suggestion that the complainants
    sister goaded her into making her statement, the trial judge was entitled to
    consider the conversation between them on the basis that it formed part of the
    narrative of the complainants statement.

[28]

I
    see no error in the trial judges approach. He found that the sister did not
    interfere significantly in the statement-taking process. He also made clear
    that although he was admitting the complainants statement in its entirety, her
    sisters utterances could not be relied on for the truth of their contents.

(3)

The sufficiency of reasons for the convictions

[29]

The
    appellant submits that the reasons were insufficient in several respects. For
    example, the trial judge provided no analysis supporting the conviction of
    assault causing bodily harm (November 14, 2013); for rejecting the
    complainants evidence at trial that she was only repeating what others told
    her about the allegations (February 4, 2014); for finding the appellant guilty
    of assault (February 14, 2014); and for finding the appellant guilty of
    unlawful confinement (March 14, 2014).

[30]

I
    would reject this ground of appeal.

[31]

Watt
    J.A. summarized the principles governing review of the sufficiency of reasons
    in cases in which the credibility and reliability of principal witnesses is at
    issue in
R. v. A.A
.
, 2015 ONCA 558, 327 C.C.C. (3d) 377, at
    paras. 116-121. The ultimate question is whether the reasons, read as a whole
    in the context of the evidence and the arguments at trial, are so deficient as
    to foreclose meaningful appellate review. Reasons need not be perfect; they
    need not address all of the evidence or answer every argument made at trial in
    order to be sufficient. The trial judge is in the best position to assess the
    evidence and his or her findings are to be accorded significant deference.

[32]

In
    my view, read as a whole in the context of the complainants statement, the
    arguments at trial, the photographs of her injuries, and the evidence of Mr. Valiquette,
    the trial judges reasons are sufficient to support the convictions. It is
    clear from the trial judges decision that he accepted the complainants evidence
    in her
K.G.B
.
statement in relation to each of the four
    incidents that provided the basis of each of the counts and relied on it. It
    was open to him to do so. The trial judge canvassed the possibilities
    concerning the reliability of the complainants statement and considered and
    rejected the appellants arguments.

(4)

Are the verdicts unreasonable?

[33]

The
    appellant submits that there is no evidence upon which the trial judge could
    have concluded that the complainant sustained her ear injury on November 14,
    2013 and that there was no evidence that the appellant was guilty of dangerous
    driving.

[34]

There
    was ample evidence in the complainants
K.G.B.
statement to support the
    appellants conviction for assault causing bodily harm. The complainant
    described punches to her head by the appellant and said that her eardrum was
    ruptured as a result. She did not remember the date but placed it as around
    Christmas. That is sufficient to sustain the conviction for assault causing
    bodily harm, despite the uncertainty surrounding the date that the assault
    occurred.

[35]

However,
    in my view the appellants conviction for dangerous driving is unreasonable.

[36]

Section
249(1)(a) of the

Criminal Code
,
R.C.S. 1985, c. C-46,
describes dangerous driving as operating a motor vehicle:

in a manner that is dangerous to the public, having regard to all
    the circumstances, including the nature, condition and use of the place at
    which the motor vehicle is being operated and the amount of traffic that at the
    time is or might reasonably be expected to be at that place.

[37]

In
R. v. Roy
, 2012 SCC 26, [2012] 2
    S.C.R. 60, at para. 34,
Cromwell J. said:

In considering whether the
actus reus
has been
    established, the question is whether the driving, viewed objectively, was
    dangerous to the public in all of the circumstances. The focus of this inquiry
    must be on the risks created by the accuseds manner of driving, not the
    consequences,
such as an accident in which he or she was
    involved.  As Charron J. put it, at para. 46 of

[
R. v. Beatty
, 2008 SCC 5, [2008] 1 S.C.R. 49], The court must not leap to its
    conclusion about the manner of driving based on the consequence.
There must be a meaningful inquiry into the manner of driving
. [Emphasis in original.]

[38]

The
    problem, in short, is that there is insufficient evidence concerning the manner
    of the appellants driving in this case. The only evidence came from the
    complainants
K.G.B
.
statement, in which the complainant described
    attempting to drive away from the appellant in a strangers truck:

[T]he guy went to pull away and [the appellant] pulled up to
    the side and kept pulling over to the side and the guy was trying to leave and
    he kept going, trying to get him off the road.

[39]

After
    the complainant left the strangers truck briefly, she returned to it and then
    left the scene with the stranger. The complainant said that the appellant kept
    following them, saying he was calling the cops on the guy for taking his
    wife.

[40]

The
    complainants
K.G.B
.
statement concerning the appellants
    driving is vague and is capable of supporting a number of possible
    interpretations. The appellant may well have intended to stop the complainant
    from driving off in the strangers truck, but that is not sufficient to support
    the trial judges finding that the accused was using his motor vehicle as a
    weapon.

[41]

There
    was no evidence as to the way in which the appellant was driving or the context
    in which his driving occurred. For example, there was no evidence as to the
    speed at which the appellant was driving, the traffic conditions, the nature of
    the road or weather conditions, among other things that might properly be
    considered in determining whether, in all the circumstances, his driving was
    dangerous in the requisite sense.

[42]

Accordingly,
    I would quash the appellants conviction for dangerous driving and enter an
    acquittal.

Disposition

[43]

I
    would allow the appeal in part, quash the conviction for dangerous driving and
    enter an acquittal on that count. I would dismiss the appeal from the remaining
    convictions.

[44]

As a result of this disposition, the sentence imposed on the
    dangerous driving count and the driving suspension are set aside. The other
    aspects of the sentence remain unchanged.

Released:  April 11, 2016
    DW

Grant
    Huscroft J.A.

I
    agree David Watt J.A.

I
    agree P. Lauwers J.A.

[1]
The counts relating to unlawful confinement on February 14, 2014 were
    withdrawn. The trial judges reasons for judgement inadvertently refer to these
    counts, but the error was corrected in his reasons for sentence.


COURT OF APPEAL FOR ONTARIO

CITATION: Royal Bank of Canada v. Uni-Can Linen & Uniform
    Supply Company Inc., 2016 ONCA 245

DATE: 20160404

DOCKET: C60755

Weiler, Hourigan and Huscroft JJ.A.

BETWEEN

Royal Bank of Canada

Plaintiff

(Respondent in Appeal)

and

Uni-Can
    Linen & Uniform Supply Company Inc.

and
    Giuseppe DOvidio

Defendants

(Appellants)

Sukhjinder Bhangu, for the appellants

Clark Peddle, for the respondent

Heard and released orally:  March 31, 2016

On appeal from the final order of Justice Paul R. Sweeny
    of the Superior Court of Justice, dated June 17, 2015.

ENDORSEMENT

[1]

The appellants appeal from the motion judges order granting summary
    judgment against them.

[2]

The respondent was granted summary judgment on April 8, 2015. However, the
    respondent agreed to seek to have the judgment set aside because the appellants,
    who did not appear on the motion, had understood they were consenting to an adjournment
    rather than summary judgment. The respondent brought a motion to set aside the April
    8, 2015 summary judgment and another motion for summary judgment, both returnable
    June 17, 2015.

[3]

The appellants were served with notice of the motions on May 22, 2015,
    but did not file any respondent materials. The motion judge denied the
    appellants request for a further adjournment to allow time to pay and to file responding
    material. He set aside the April 8, 2015 summary judgment and granted summary
    judgment to the respondent on the second motion, with credit to be given for
    payments made after the statement of claim was issued.

[4]

The appellants submit that the motion judge erred in granting summary
    judgment to the respondent while the first summary judgment was in place. The
    appellants submit, further, that the motion judge acted unfairly in denying an
    adjournment and that the trial judge erred in calculating the amounts owing.

[5]

These submissions must be rejected.

[6]

The motion to set aside the April 8, 2015 summary judgment was dealt with
    before the second motion for summary judgment was heard and decided. The
    appellants had ample notice of the June 17, 2015 date for the second motion but
    chose not to file materials. The date was picked based on the availability of
    the appellants counsel. Although the second motion for summary judgment was
    not in the court file, the motion was properly before the court, as the
    confirmation of motion indicates. It was open to the motion judge to refuse the
    appellants request for an adjournment in the exercise of his discretion in these
    circumstances.

[7]

The appellants did not raise any specific issues about the amount owing before
    the motion judge. They alleged they had never received a proper statement as to
    what they owed. However, the parties agreed that prior payments made by the
    appellant would be credited following the issuance of the judgment.

[8]

In oral submissions, the appellant sought to adduce an annual statement
    with respect to the one of the loan facilities. This is clearly an incomplete
    statement of the entire account. The breakdown of what is owed is set out in
    the affidavit of Paul Ihnatiuk filed on behalf of the respondent, at p. 46 of
    the Exhibit book. In addition, following summary judgment, the respondents
    counsel provided the appellants with a breakdown of the amounts required to
    discharge the securities.  The total is $1,173,124.52.

[9]

Counsel for the respondent acknowledged receipt of several payments made
    to an agent, set out at p. 32 of the respondents compendium. These payments have
    clearly been credited to the appellants.

[10]

We
    are satisfied there can be no dispute as to the amount owing. We note that the
    respondents counsel undertook before us, as before the motion judge, to credit
    any payments by the appellants and have the writ of execution changed
    accordingly.

[11]

Additional
    arguments set out in the appellants factum were not raised in oral argument,
    but in any event they have no merit. The appeal is therefore dismissed.

[12]

The
    appellants shall pay the respondent costs fixed at $6,000, inclusive of taxes
    and disbursements.

K.M.
    Weiler J.A.

C.W.
    Hourigan J.A.

Grant
    Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Plugers v. Krasnay, 2016 ONCA 279

DATE: 20160420

DOCKET: C59854

Laskin, Hourigan and Brown JJ.A.

BETWEEN

Scott Plugers

Applicant (Respondent)

and

Mary Krasnay

Respondent (Appellant)

Peter Callahan, for the appellant

David Hurren and Ashley Gibson, for the respondent

Heard and released orally: April 12, 2016

On appeal from the judgment of Justice James W. Sloan of
    the Superior Court of Justice, dated December 9, 2014.

ENDORSEMENT

[1]

Ms. Krasnays principal submission on appeal is that the trial judge
    erred in awarding the parents joint custody of their now three-year-old son Brayden.
    She contends that in the face of the parties inability to communicate with
    each other, an order for joint custody was inappropriate.

[2]

The trial judge put in place an order for parallel parenting, where each
    parent has the last say on the various important decisions that must be made in
    raising a child. The trial judge ordered that Brayden primarily reside with his
    mother and ordered that Braydens father have reasonable access. The trial
    judge put in place a specific access schedule.

[3]

The trial judges decision to award joint custody is entitled to
    deference in this court. We are satisfied that the trial judges decision was
    reasonable. Although he did not expressly say why he ordered joint custody, it
    is a fair inference from his reasons as a whole, that he ordered it to preserve
    Mr. Plugers relationship with his son. In his reasons the trial judge found
    that Ms. Krasnay overstated her fear of Mr. Plugers and at times refused to
    communicate or cooperate with him on any matter affecting Brayden. These
    findings of the trial judge support his order for joint custody. That order was
    reasonably necessary to ensure Mr. Plugers has a real relationship with his son,
    and therefore it is in the childs best interest.

[4]

The trial judges order was made on January 2, 2015. We are now over 15
    months from the date of that order. We have not been provided with any fresh
    evidence to suggest the arrangement the trial judge put in place is not
    working. Accordingly, the appeal is dismissed with costs in the amount of
    $10,000, inclusive of disbursements and applicable taxes.

[5]

We conclude these brief reasons by repeating and endorsing what the
    trial judge said at para. 412 of his reasons:

Given the fact, that the parties have created a child, it is
    very unsettling how they currently treat each other. They are the only ones who
    can change that. While it is not unusual for people in close relationships to
    sometimes be very short with each other, the parties are no longer in that type
    of relationship. It is simply time to move on for Braydens sake.

John Laskin J.A.

C.W. Hourigan J.A.

David Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Scamurra v. Sandy Scamurra &
    Sons Limited, 2016 ONCA 311

DATE: 20160428

DOCKET: C60913

Strathy C.J.O., Lauwers and Benotto JJ.A.

BETWEEN

Sandy Scamurra

Applicant

(Respondent/Appellant
    by Cross-Appeal)

and

Sandy Scamurra & Sons Limited, Sandy Scamurra
    Contracting Ltd., 726127 Ontario Inc.,
Albert Scamurra
,
Felix
    Scamurra
, AFJ Disposal Inc., TD Canada Trust and Royal Bank of Canada

Respondents

(
Appellants
/
Respondents
    by Cross-Appeal
)

Michael N. Freeman, for the appellants/respondents by
    cross-appeal

Albert Campea, for the respondent/appellant by
    cross-appeal

Heard: March 18, 2016

On appeal from the judgment of Justice Gordon D. Lemon of
    the Superior Court of Justice, dated August 7, 2015.

By the Court:

[1]

The parties are brothers who operated several businesses together. They
    encountered difficulties that they resolved by entering into a Share Purchase and
    Sale Agreement. The agreement provided for the payment of monthly sums by the
    appellants, Albert and Felix Scamurra, to the respondent, Sandy Scamurra, in
    exchange for his shares in the companies. The agreement was secured by a Share
    Pledge Agreement.

[2]

The appellants defaulted on the required payments. The parties tried
    again to resolve the matter. Their lawyers exchanged offers in November 2014.
    When the appellants remained in default, the respondent brought a motion for
    summary judgment requesting either: enforcement of the Share Purchase and Sale
    Agreement, including the Share Pledge Agreement; or, in the alternative,
    enforcement of the settlement he claimed was reached by letter dated November
    28, 2014.

[3]

The motion judge found that there was no binding settlement in November
    2014. However, he awarded judgment to the respondent for both past and future
    amounts owing on the Share Purchase and Sale Agreement. For the reasons that
    follow, we would allow the appeal and dismiss the cross-appeal.

A.

Facts

[4]

The parties operated various family businesses under the corporate names
    Scamurra Contracting Ltd., Sandy Scamurra and Sons Limited, and 726127 Ontario
    Inc. In response to problems that arose, the respondent brought an application
    pursuant to the oppression remedy section of the
Business Corporations Act
,
    R.S.O. 1990, c. B. 16. The application was settled on September 6, 2013.

[5]

The settlement was incorporated into the terms of a Share Purchase and
    Sale Agreement, whereby the respondent agreed to sell to the appellants all of
    his shares in the corporations in return for $450,000. This amount was to be
    paid by way of 12 monthly instalments of $12,500, commencing on October 1, 2013
    and ending on October 1, 2014. If the monthly payments could not be made, the
    appellants were to provide quarterly payments to make up for the shortfall. The
    appellants were also required to make 120 monthly payments of $2,500. Finally,
    the appellants were to pay the respondent a car allowance totalling $700 per
    month, plus insurance and HST, for ten years.

[6]

A Share Pledge Agreement, dated October 1, 2013, was attached to the Share
    Purchase and Sale Agreement as Schedule A.  According to the terms of this
    agreement, the shares were to be held in escrow until the entire purchase price
    was paid.

[7]

The appellants defaulted on the payments under the Share Purchase and
    Sale Agreement. They discussed resolution and exchanged correspondence through
    respective counsel. The correspondence included letters dated November 18 and 28,
    2014, in which most terms of the settlement were set out by the parties. Yet
    settlement documents were not provided to the respondent, and he moved for
    summary judgment. He sought either an enforcement of the settlement outlined in
    the November 28, 2014 letter or payment of the full amount owing under the Share
    Purchase and Sale Agreement.

[8]

The motion judge concluded that no settlement had been reached in
    November 2014 but granted summary judgment to the appellant in the full amount
    owing on the agreement. This amount totalled $361,719.51, including $13,492.19
    in interest.

B.

Analysis

Overview

[9]

The appellants submit that, in the absence of an acceleration clause,
    the motion judge erred in ordering them to pay the full amount  past and
    future  owing on the Share Purchase and Sale Agreement. If the appeal is
    allowed, the respondent relies on his cross-appeal, in which he claims that the
    motion judge erred in not finding that there was a binding settlement agreed to
    in November 2014.

The Appeal

[10]

The appeal centers on the motion judges award of the full amount owing
    on the Share Purchase and Sale Agreement in the absence of an acceleration
    clause.

[11]

The respondent submits that, based on the Share Purchase and Sale Agreement,
    the Share Pledge Agreement, and the surrounding circumstances, the parties
    intended that, upon default, the full balance outstanding would become due and
    owing.

[12]

We disagree with the respondent. An acceleration clause is a provision
    that requires the debtor to pay off the balance sooner than the due date if
    some specified event occurs, such as the failure to pay an installment:
Blacks
    Law Dictionary
, 8th ed. (St. Paul: Thomson West, 2004). Acceleration
    clauses are common in commercial agreements that provide for a series of
    installment payments. For reasons that have not been explained, the parties did
    not include an acceleration clause in the Share Purchase and Sale Agreement.
    Nor did they do so in the Share Pledge Agreement, which was the means by which
    security was provided for the payments.

[13]

The agreements also contemplate what would happen in the event of
    default. Paragraph 6 of the Share Purchase and Sale Agreement provides that, in
    the event of a late payment, interest accrues at the rate of 10% per year. Paragraph
    14 explains that the reasonable expenses incurred by the respondent in
    recovering payment in case of a default are to be paid by the appellants. Further,
    the Share Pledge Agreement provides security for the payments. It contemplates that
    the respondents shares would be held in escrow until the whole of the purchase
    price is paid to him by the appellants.

[14]

The terms of the agreements are clear. The motion judge erred by
    collapsing the outstanding payments into the amount owing in the absence of an
    acceleration clause and in the face of terms agreed to by the parties setting
    out their responsibilities in case of default.

[15]

It is noteworthy that the respondent did not treat the appellants
    default as accelerating the balance owing under the Share Purchase and Sale
    Agreement or entitling him to realize on the security of the shares held in
    escrow. On the contrary, the respondent accepted payments of $108,000 from the
    appellants between October 2014 and March 2015, bringing the balance in good
    standing apart from interest and costs.

[16]

The respondent sought to rely on fresh evidence about events that
    occurred between the parties after the summary judgment was released. The fresh
    evidence seeks to demonstrate the continued default of the appellants. This
    proposed evidence does not meet the test set out in
R. v. Palmer
,
    [1980] 1 S.C.R. 759. In particular, it is not relevant to the issues before us
    and could not have affected the result of the court below.

The Cross-Appeal

[17]

We agree with the motion judges analysis that the correspondence did
    not amount to a binding agreement. The appellants counsel wrote to
    respondents counsel on November 18, 2014: we confirm that the parties have
    tentatively resolved [their outstanding issues]. This letter notes that
    [t]his issue of costs remains to be addressed. The response from the
    respondents counsel on November 28, 2014 reiterated that [t]he issue of costs
    has not been agreed-upon. The respondents counsel also clearly stated: The
    terms of the settlement offer are not severable from each other.

[18]

The issue of costs was outstanding and the terms were not severable.
    There was clearly no binding settlement and the cross-appeal is therefore
    dismissed.

C.

Disposition

[19]

The appeal is allowed. The cross-appeal is dismissed. The parties may
    if so advised  return to the application judge to determine the quantum of
    damages and the costs of the application appealed from. If the parties cannot
    agree on costs of the appeal, they may provide the court with brief written
    submissions within ten days of the release of these reasons.

Released: April 28, 2016

G.R. Strathy C.J.O.

P. Lauwers J.A.

M.L. Benotto J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Seidel v. Markham (Town), 2016 ONCA 306

DATE: 20160426

DOCKET: C60817

Sharpe, LaForme and van Rensburg JJ.A.

BETWEEN

Henry Seidel

Plaintiff

and

Town of Markham

Defendant/Appellant

and

V.T.A.
    Construction Ltd. and
Intact Insurance (formerly ING
    Insurance

Company
    of Canada
)

Third Parties/
Respondent

David G. Boghosian and Shaneka M. Taylor, for the
    appellant

Sean R. Chambers, for the respondent

Heard and released orally: April 22, 2016

On appeal from the judgment of Justice Bruce A. Glass of
    the Superior Court of Justice, dated July 3, 2015.

ENDORSEMENT

[1]

This appeal arises out of a dispute between the appellant Town of
    Markham (Markham) and the respondent Intact Insurance Company of Canada
    (Intact), with respect to the interpretation of what both parties referred to
    as an agreement.

[2]

The plaintiff sued for damages after an alleged slip and fall on
    Markhams property. He sued Markham, the appellant in this appeal, initially
    pleading that the accident occurred March 6, 2011. Markham had a winter
    maintenance contract with V.T.A. Construction Ltd (V.T.A.). As required by
    the contract, V.T.A. had Markham added as an additional insured to its policy with
    Intact but only with respect to the legal liability arising out of the
    operations of [V.T.A.]. Markham retained counsel, Mr. Persaud, and in January
    2012, served a statement of defence and issued a third party claim against
    V.T.A. and Intact. The third party claim claimed contribution and indemnity from
    V.T.A. and a declaration that Intact owed a duty to defend and indemnify
    Markham in respect of the plaintiffs claims.

[3]

In May 2012, the plaintiff added V.T.A. as a defendant to the action and
    amended the statement of claim to plead that the accident occurred on March 5,
    2011.

[4]

In the fall of 2012 and early 2013, there were a series of
    communications between Mr. Persaud, Intact and Mr. Lipetz at Benson Percival
    Brown LLP (BPB), the law firm appointed to defend V.T.A. in the action, about
    the defence of the action and the third party claim. Mr. Persaud prepared an Assumption
    of Defence Agreement that specifically provided for Intact to assume Markhams
    defence and to indemnify Markham in respect of any damages in the action.
    Mr. Lipetz advised that Intact would not be executing the agreement but
    that his office would serve a Notice of Change of Lawyers. Mr. Persaud
    replied that he did not have to sign the agreement so long as it was understood
    that Markham would be covered for any amounts arising from a finding of
    liability against it. The next day, Mr. Lipetz delivered the Notice of Change
    of Lawyers, with the effect that BPB represented both V.T.A. and Markham in the
    defence of the action. In fact, the retainer continued for the following 16.5
    months, during which time BPB was the only firm representing Markham in the
    proceedings, which included attendance at examinations for discovery.

[5]

In December 2013, BPB notified Mr. Persaud that it was bringing a motion
    to remove itself from the record. This occurred six months later. New counsel
    was appointed for V.T.A. but not Markham. Markham brought a motion under Rule
    49 to enforce the settlement agreement.

[6]

The motion judge dismissed Markhams motion that sought to enforce
    Intacts obligation to both defend and indemnify Markham in the action. He
    concluded that there had not been a meeting of the minds between the parties
    on the question of indemnification and that the agreement was not in clear
    enough terms to require Intact to indemnify Markham for any loss suffered as a
    result of V.T.A.s negligence.

[7]

The appellant raises a number of arguments on appeal, having to do with
    the motion judges approach to the issue and his consideration of the evidence.
    The respondent asserts that the motion judges interpretation of what occurred
    is based on his findings of fact and entitled to deference. Further, the
    communications between counsel were not sufficient to conclude an agreement to
    indemnify in the clearest of terms.

[8]

This appeal is allowed for the following reasons.

[9]

First, the motion judge erred in concluding that there was no agreement.
    The parties both agreed that they entered into an agreement resulting in the
    appointment of the same counsel to represent both V.T.A. and Markham in the
    defence of the action. The issue was not whether there was an agreement, but
    its interpretation.

[10]

Second,
    the motion judge erred in concluding that Intact could not have agreed to
    indemnify Markham for liability in the action, except as resulted from V.T.A.s
    negligence. While that may well have been what was provided for in the
    maintenance contract, and the coverage provided by V.T.A.s insurance policy
    with Intact, the issue was the interpretation of the parties agreement that
    was entered into in the context of both the action and the third party claim.

[11]

In
    its third party claim, Markham claimed both a defence and indemnification from
    Intact. Intact had three choices. It could have denied both obligations, in
    which case Markham would have been on its own in the action. It could have resisted
    the claim for indemnification but accepted the obligation to defend, assuming
    the cost of Markhams defence by different counsel. Or it could have accepted
    the obligation to defend and indemnify. The first two options would recognize
    that Markham and V.T.A. continued to be adverse in interest in the main and
    third party action. The third would mean that their interests were aligned or
    the same.

[12]

Intacts
    appointment of a single firm to represent both Markham and V.T.A. could not
    have occurred if V.T.A. and Markham continued to be adverse in interest. The
    motion judge erred in failing to consider this important and determinative
    fact. The fact that BPB was appointed to represent both defendants and in fact
    did represent them in litigation until discoveries had been completed was only
    consistent with one meaning, namely, that Intact had agreed to both defend and
    indemnify Markham, including in respect of its own negligence unrelated to
    V.T.A.s acts or omissions. This, in our view, is an agreement to indemnify in
    sufficiently clear terms. Without an agreement to indemnify Markham, counsel
    appointed by Intact to act for both V.T.A. and Markham would have been in an
    obvious and untenable conflict of interest.

[13]

It
    may be that Intact and its counsel failed to appreciate the significance of the
    change in the plaintiffs pleading of the accident date until quite late in the
    day. However, this did not permit Intact to resile from the agreement the
    parties had reached, after discoveries had been conducted and after BPB had
    acted as Markhams counsel for more than 16 months.

[14]

The
    appeal is therefore allowed. The order in the court below is set aside. Intact
    shall appoint counsel to defend Markham at its sole expense and Intact shall
    indemnify Markham for any damages and costs awarded against Markham in the main
    action.

[15]

Costs
    are payable to the appellant and fixed in the sum of $25,000, inclusive of the
    costs below, the appeal and applicable taxes and disbursements.

R.J. Sharpe J.A.

H.S.
    LaForme J.A.

K. van Rensburg J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Spence Estate (Re), 2016 ONCA 286

DATE: 20160420

DOCKET: C60021

Cronk, Lauwers and van Rensburg JJ.A.

In the Estate of
    Rector Emanuel Spence, also known as Eric Spence, deceased

BETWEEN

Verolin Spence and A.S.

Applicants (Respondents)

and

BMO Trust Company
, Donna Spence,

K. S.-P.
    and K. S.-P.

Respondents (
Appellant
)

Justin W. de Vries and Angela Casey, for the appellant

Earl A. Cherniak, Q.C., Jasmine T. Akbarali and Michael S.
    Deverett, for the respondents

Heard: September 4, 2015

On appeal from the judgment of Justice Cory A. Gilmore of
    the Superior Court of Justice, dated January 13, 2015, with reasons reported at
    2015 ONSC 615.

COSTS ENDORSEMENT

[1]

This courts decision in this matter was released on March 8, 2016.  At
    the courts direction, the parties filed supplementary written costs
    submissions after the appeal hearing regarding the costs of the appeal.  The
    court has now received and reviewed those submissions.

[2]

In the particular and somewhat novel circumstances of this case, we
    agree that the costs of the appeal should be awarded in accordance with the
    parties agreement on the costs of the appeal, concluded prior to the appeal
    hearing, and their joint submission on those costs.  Accordingly, the costs of
    the appeal shall be payable out of the estate of the deceased, Eric Spence, as
    follows:

(1)

$46,000
    to the successful appellant, BMO Trust, allocated to: i) Whaley Estate
    Litigation, in the sum of $21,000; and ii) de Vries Litigation LLP, in the sum
    of $25,000; and

(2)

$25,000
    to the respondents, Verolin Spence and A.S., payable to Deverett Law Offices.

E.A. Cronk J.A.

P. Lauwers J.A.

K. van Rensburg J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:  Starrcoll Inc. v. 2281927 Ontario Ltd., 2016 ONCA
    275

DATE: 20160420

DOCKET: C60689

Doherty, Epstein and Miller JJ.A.

BETWEEN

Starrcoll Inc.

Applicant (Respondent on Appeal)

and

2281927 Ontario Ltd.

Respondent (Appellant)

David C. Moore and Diana M. Soos, for the appellant

Kevin W. Fisher, for the respondent

Heard:  February 1, 2016

On appeal from the judgment of Justice D.L. Corbett of
    the Superior Court of Justice, dated June 9, 2015, reported at 2015 ONSC 3719.

Doherty J.A.:

I

overview

[1]

The respondent, Starrcoll Inc. (Starrcoll) agreed to sell three
    apartment buildings to Mr. Ken Lu.  Eventually, the appellant 2281927 Ontario
    Ltd. (228), Mr. Lus company, became the purchaser.

[2]

The parties agreed to a total purchase price of $11,860,000.  The
    parties also agreed that $300,000 of the purchase price would be held by
    Starrcolls lawyer for three years (the Escrow Provision).  At the end of the
    three years, some, none or all of the $300,000 would be paid to Starrcoll
    depending on the rents generated from the units in the buildings.  If gross annual
    rentals were $960,000 or more, Starrcoll would get the entire $300,000.  If
    gross rentals were less, 228 was entitled to a return of some or all of the
    $300,000 as calculated using the formula in the Escrow Provision.  Under that
    formula, if gross annual rents were less than $900,000, 228 would be entitled
    to the return of the entire $300,000.

[3]

The parties agreed that the Escrow Provision was designed to allow for
    an adjustment of the purchase price three years after closing, depending on the
    income generated by the rental units.  The parties, however, disagreed over the
    interpretation of the Escrow Provision, and specifically the manner in which
    gross rentals were to be measured when determining whether the $960,000 threshold
    had been met.  Starrcoll brought an application seeking an interpretation of
    the Escrow Provision.

[4]

The application judge found that the $960,000 threshold was met if rents
    for any month in the three-year period reached $960,000, when annualized.  On that
    interpretation, Starrcoll was entitled to the entire $300,000 as gross rents
    for the month beginning April 1, 2014 exceeded $960,000, when annualized.  The
    application judge made an order declaring that Starrcoll was entitled to full
    payment of the escrow amount.  228 appeals from that order.

[5]

Counsel for 228 submits that the threshold requirement in the Escrow
    Provision is met only if gross rents for any 12-month period during the
    three-year period amounted to $960,000 or more.  On this approach, 228 was
    entitled to a return of at least part of the $300,000.

[6]

Starrcoll, without abandoning entirely the application judges
    interpretation of the Escrow Provision, argued in this court that the $960,000
    threshold was met if the monthly rent at the end of the three-year Performance
    Period (May 1, 2014) reached or exceeded $960,000, when annualized.  Starrcoll
    argued that the rent for the period beginning May 1, 2014, when annualized, did
    exceed $960,000, meaning that Starrcoll was entitled to the entire $300,000 and
    that the order made by the application judge should stand.

[7]

I would dismiss the appeal for the reasons that follow.

II

facts

[8]

Dr. Daniel Perlitz, for Starrcoll, and Mr. Lu, for 228, negotiated the
    Agreement of Purchase and Sale.  Mr. Harold Green, a real estate agent retained
    by Starrcoll, had some involvement in the discussions between Mr. Lu and Dr.
    Perlitz.  He acted as Starrcolls and 228s agent on the purchase.  All three
    filed affidavits on the application as did Mr. Paul Colvin, the president of
    Starrcoll.  None of the affiants were cross-examined.

[9]

During the negotiations, the parties discussed the rental income
    potential of the buildings.  Dr. Perlitz anticipated that rents for the units
    would go up in the ensuing two or three years as existing leases expired, and units
    were renovated and subsequently re-rented at higher rates.

[10]

Mr. Lu was given a rent roll for each of the three properties for the
    month of February 2011.  A rent roll is a document that identifies each tenant
    and sets out the rent being paid for each occupied unit as at the beginning of
    the month.  According to the rent rolls, the three buildings generated total
    rents of just under $70,000 for February 2011.  Based on the February 2011 rent
    rolls, the annualized rent for the three buildings was about $840,000.

[11]

Mr. Lu wanted some protection against the possibility that rental income
    would not increase as Dr. Perlitz expected it would.  The Escrow Provision in
    Article 3.2(c) of the Agreement of Purchase and Sale gave that protection:

(c)  payment by the Purchaser of the sum of $300,000.00 payable
    to the Vendors solicitors and to be held in an interest bearing escrow account
    with a Canadian chartered bank (the Escrow Amount) to secure the performance
    of the Property for the three year term commencing at closing (the Performance
    Period).  At the end of the Performance Period, to the extent the rent roll of
    the Buildings, (in the same format as set out in Schedule C hereto) reveals
    gross rental of no less than $960,000.00 (the Gross Rental Threshold), and
    upon being presented with a Statutory Declaration of the Purchaser or an
    authorized agent of the Purchaser, or a representative of the Manager, the
    Vendors Solicitors in trust shall pay the Escrow Amount to the Vendor and the
    Vendors solicitors shall require no further direction to pay out the Escrow
    Amount.  To the extent that at the end of the Performance Period, the Gross
    Rental Threshold has not been achieved, on the evidence of a Statutory
    Declaration of the Purchaser or an authorized agent of the Purchaser, or a
    representative of the Manager, the Vendors Solicitors, without the need of a
    further written direction, shall pay from the Escrow Amount the Purchaser the
    sum of $5.00 for every dollar that the Rent Roll of the Buildings is less than
    the Gross Rental Threshold (the Capitalization Payment) and pay to the Vendor
    any balance remaining after making the Capitalization Payment.  Interest on the
    Escrow Amount shall be paid to the Vendor as earned.

[12]

The Escrow Provision provided that if gross rents reached $960,000,
    Starrcoll would get the entire $300,000 being held in escrow.  If gross rents were
    below $960,000, 228 would be entitled to the return of some or all of the
    $300,000 being held in escrow.  The $960,000 figure was about $125,000 above the
    annualized rental income from the buildings based on the February 2011 rent
    roll given to Mr. Lu before closing.

[13]

Schedule C, referred to in the Escrow Provision, was a blank page with
    the heading Rent Roll.  As indicated above, a rent roll is a document that
    sets out monthly rents paid for each rented unit as at the start of any given
    month.  It may also reflect certain small additional revenues, e.g. parking fees.
    According to Mr. Green, rent rolls are commonly used in the purchase and sale
    of rental income buildings when assessing rental income potential, going
    forward.

[14]

The transaction closed on May 2, 2011.  The three-year Performance
    Period referred to in the Escrow Provision ran from May 2, 2011 to May 2,
    2014.  The Rent Rolls for each month during that period showed variable gross
    rents.  Rents for the first year (May 2011-April 2012) totalled $860,956.01.  In
    the second year (May 2012-April 2013) the gross rents rose to $915,686.00.  In
    the third year (May 2013-April 2014) gross rents amounted to $904,362.90.  The
    final rent rolls for the month commencing May 1, 2014 showed a total monthly
    rent for the three buildings of $81,327.72.  This was slightly below the
    monthly rate for April 2014 ($82,880.85).  April and May 2014 were the only two
    months in which the income shown on the rent rolls exceeded $80,000.  $80,000 is
    the minimum monthly rent needed to achieve an annualized rent of $960,000.

[15]

Under the terms of the Agreement of Purchase and Sale, Linwood
    Management Corporation, a company controlled by Dr. Perlitz, managed the
    properties after the sale.  At the end of the three-year Performance Period, Dr.
    Perlitz, in his capacity as property manager, provided the statutory
    declaration contemplated in the Escrow Provision.  Schedule A to Dr.
    Perlitzs statutory declaration had two parts.  The first part identified the
    monthly rental income generated by each of the three buildings as of May 1,
    2014.  It also identified the total amount ($81,327.72) and the annualized
    amount ($975,932.64).  The annualized amount was simply the monthly total
    multiplied by 12.  The second part of Schedule A consisted of the actual rent
    rolls for each building identifying the tenant, the unit and the rent paid as
    of May 1, 2014.

III

the reasons

[16]

The application judge described the applicable principles of contractual
    interpretation as follows:

[9]
Where there is no ambiguity in a
    written contract, it should be given its literal meaning.
Words should
    be construed in their plain and ordinary sense unless to do so would result in
    a commercial absurdity.  In construing particular words and provisions, they
    should be placed within the context of the entire contract, construed as a
    whole, to the extent that is possible.

[11]
The court may consider objective
    evidence of the factual matrix underlying the negotiation of the contract to
    resolve any ambiguity in the contract.
However, where a party claims
    that the literal, plain-meaning reading of the contract leads to a commercial
    absurdity, the court may look at objective extrinsic evidence to assess the
    commercial reasonableness of the plain meaning. [Emphasis added. Footnotes
    omitted.]

[17]

The application judge erred in law in his approach to contractual
    interpretation.  The words of an agreement, and the context in which those
    words are used, cannot be separated and approached at different stages of the
    interpretative process.  Words in an agreement have no meaning without
    context.  The contemporary approach to contractual interpretation is set out in
Sattva Capital Corp. v. Creston Moly Corp.
, 2014 SCC 53, [2014] 2
    S.C.R. 633, at paras. 47-48:

[
A] decision-maker must read the contract
    as a whole, giving the words used their ordinary and grammatical meaning, consistent
    with the surrounding circumstances known to the parties at the time of the
    formation of the contract.
Consideration of the surrounding
    circumstances recognizes that ascertaining contractual intention can be
    difficult when looking at words on their own, because words alone do not have
    an immutable or absolute meaning.

The meaning of words is often derived
    from a number of contextual factors, including the purpose of the agreement and
    the nature of the relationship created by the agreement.
[Emphasis added.
    Citations omitted.]

[18]

The court in
Sattva
quoted with approval Lord Hoffmann in
Investors
    Compensation Scheme Ltd. v. West Bromwich Building Society
, [1998] 1 All
    E.R. 98 (H.L.), at 115:

The meaning which a document (or any other utterance) would
    convey to a reasonable man is not the same thing as the meaning of its words.
    The meaning of words is a matter of dictionaries and grammars;
the

meaning of the document is
    what the parties using those words against the relevant background would
    reasonably have been understood to mean
.  [Emphasis added.]

[19]

Although I am satisfied the application judge erred in law in his
    approach to the interpretation of the Escrow Provision, I would nonetheless
    dismiss the appeal.  In my view, on a proper interpretation of the provision,
    Starrcoll remains entitled to the entire $300,000.  The application judges
    order should therefore stand.

[20]

As explained in
Sattva
, contractual interpretation is a search
    for the objective intention of the parties as discerned from the language of the
    relevant provision considered in the context of the entirety of the agreement,
    the purpose of the provision, the nature of the relationship created by the
    agreement, and any other relevant surrounding circumstances.  An application of
    that approach to the Escrow Provision leads me to conclude that gross rental as
    at the end of the Performance Period (May 1, 2014) was to be determined by
    annualizing the amount of rental income shown on the rent rolls setting out the
    rents as of May 1, 2014.  On that interpretation, the $960,000 threshold was
    met and Starrcoll is entitled to the $300,000.

[21]

The purpose of a provision is an important contextual feature in
    contractual interpretation.  I begin with the purpose behind the Escrow
    Provision.  The value of the properties, to 228, at least in part, lay in the
    properties ability to produce rental income on an ongoing basis.  The parties
    were aware of the monthly income being generated at the time of purchase (about
    $70,000).  Dr. Perlitz had represented that the rental incomes would increase
    over time as leases expired, and the units were renovated and re-leased.  Given
    the variables that could impact on the increase in rental income, one could not
    predict exactly how or when increases would occur.  The Escrow Provision
    provided the means by which the agreed upon purchase price could be varied,
    albeit in a relatively minor amount (up to about 2.5 per cent of the purchase
    price), depending on the increase in income producing performance of the
    apartment buildings during the three-year Performance Period.

[22]

In the Escrow Provision, the parties agreed that the performance of the
    Property would be measured by testing rental income against a Gross Rental
    Threshold of $960,000.  Although the language in the Escrow Provision did not
    specifically identify $960,000 as annual rental income, the rents being earned
    on the properties at the time of the sale make it clear that $960,000 was a
    reference to gross annual rents earned by the properties.

[23]

The performance of the Property as reflected in rental incomes
    generated could be measured in a variety of commercially reasonable ways.  For
    example, counsel for the appellants submission that actual rental incomes for
    a 12-month period should be used, is certainly a commercially reasonable way in
    which to measure the performance of the Property.  The language of the Escrow
    Provision, however, provides the best insight into the method intended to be
    used in this particular agreement.

[24]

Two features of the language used in the Escrow Provision are
    important.  First, income was to be measured [a]t the end of the Performance
    Period.  May 1, 2014 marked the end of the Performance Period.  Second, income
    was to be determined at the end of the Performance Period by reference to gross
    rents set out in the rent roll.  A rent roll reflects rental income at a
    specific point in time and is a predictor of rental income going forward.
    Under the terms of the Escrow Provision, the May 2014 rent roll was the rent
    roll applicable at the end of the Performance Period.

[25]

Accordingly, having regard to the language of the Escrow Provision, I
    conclude that the parties chose to measure income performance as at the end of
    the three-year Performance Period and not over a period of time during the
    Performance Period (e.g. one year).  I further conclude that the parties
    intended that performance would be measured by reference to the rent rolls for May
    2014.  The terms of the Escrow Provision considered as a whole can only reasonably
    be understood to mean that the determination of whether rental income met the
    $960,000 Gross Rental Threshold required an annualization of the amount
    reflected in the last rent roll (May 2014) for the Performance Period.  This interpretation
    achieves the purpose of the Escrow Provision by providing 228 with some
    security for Dr. Perlitzs representations that the income from the properties
    would increase over the Performance Period.

[26]

The rent roll provided evidence of the income potential of the
    properties going forward.  A forward looking assessment of income potential
    would be important to 228 as the new owner of the properties.  There is nothing
    commercially unreasonable in interpreting Escrow Provision to provide for the
    full payment of the $300,000 to Starrcoll, if at the end of the Performance
    Period, the rental properties were in fact performing up to the Gross Rental
    Threshold identified in the Escrow Provision.

IV

conclusion

[27]

I would dismiss the appeal.  Starrcoll is entitled to costs of the
    appeal in the amount of $15,000, inclusive of disbursements and relevant taxes.

Released:  DD  APR 20 2016

Doherty J.A.

I agree Gloria Epstein
    J.A.

I agree Bradley W.
    Miller J.A.