COURT OF APPEAL FOR ONTARIO

CITATION: Nissa Corporation v. Enviro Park Solar Ltd., 2019
    ONCA 563

DATE: 20190704

DOCKET: C66040

van Rensburg, Hourigan and Huscroft JJ.A.

BETWEEN

Nissa Corporation

Respondent

(Appellant in Appeal)

and

Enviro Park Solar Ltd.

Applicant

(Respondent in Appeal)

Peter R. Jervis and Golnaz Nayerahmadi for the
    appellant, Nissa Corporation

Jeffrey Levine and Nicole Rozario for the respondent,
    Enviro Park Solar Ltd.

Heard: March 26, 2019

On appeal from the
    order of Justice Jill M. Copeland of the Superior Court of Justice, dated
    October 1, 2018, with reasons reported at 2018 ONSC 5750.

Huscroft J.A.:

OVERVIEW

[1]

The appellant, Nissa Corporation (Nissa), inherited a lease between
    the respondent, Enviro Park Solar Ltd., (the Tenant) and 1809765 Ontario Limited
    (180 Ontario), the original landlord, when it purchased two properties in
    Napanee, 61A and 60A Enviro Park Lane (61A and 60A) from the B
usiness Development Bank of Canada
,
    the mortgagee in possession of the property.

[2]

The lease governed the rooftop and certain rights of way at 61A for the
    purpose of operating a solar power generation project. The Tenant and 180
    Ontario were both controlled by Karl Hollett when the lease was entered into.

[3]

Nissa disputed the validity of the lease and the Tenant brought an
    application seeking declarations that: (i) the lease was effective and binding
    on the parties to the lease and their successors; (ii) the Tenant was the owner
    of certain equipment on the premises; and (iii) Nissa had wrongly prevented the
    Tenant from accessing the property. Nissa took the position that the roof lease
    had been terminated prior to its purchase of the property, or in any event,
    after the expiry of the cure period.

[4]

On November 14, 2017, Myers J. granted all three declarations, and in
    addition awarded damages caused by Nissas failure to allow the Tenant to
    access the property and resulting loss of solar power production.

[5]

Subsequently, Nissa took the position that the manner in which the solar
    generation system had been installed did not comply with the terms of the lease
    and that additional rent was therefore owing. This led to a second application
    and the decision that is the subject of this appeal.

[6]

On the second application, the application judge ordered that Nissa was
    required to maintain the Tenants connection to the local electrical utility system
    via the transformer in the building across the street, at 60A Enviro Park Lane
     a building not mentioned in any part of the lease  and that it was not
    entitled to receive any additional rents for that connection. The application
    judge ordered, further, that the Tenant had the right to install inverters in
    the electrical room of the building at 61A.

[7]

Nissa argues that the application judge erred by reading a positive
    covenant into the lease, requiring it to provide the Tenant with access to the
    transformer at 60A Enviro Park Lane. She erred, further, in interpreting the
    lease as permitting the Tenant to install and operate inverters inside the
    building at 61A, in essence allowing conduct of the former landlord to
    overwhelm the express terms of the lease.

[8]

In my view, the application judge erred in law by reading the lease as
    requiring that a connection to the transformer at 60A be maintained. However,
    her interpretation of the lease as permitting the Tenant to install inverters
    inside the building at 61A reveals no error and is entitled to deference.

[9]

I would allow the appeal in part for the reasons that follow.

BACKGROUND

[10]

The
    application judge was required to decide only two questions. First, is the
    Tenant entitled under the terms of the lease to connect to the local electrical
    utility system via the transformer located on the property at 60A Enviro Park
    Lane? Second, is the Tenant entitled under the terms of the lease to have
    inverters, which are part of the solar power generating system, located in the
    electrical room of the building at 61A Enviro Park Lane rather than on the
    roof?

[11]

The
    relevant provisions of the lease are set out in the appendix to these reasons.

The application judges decision

[12]

Concerning
    the first issue, the application judge noted that the lease was entered into when
    180 Ontario owned both 61A and 60A Enviro Park Lane. She concluded that
    although the lease did not refer specifically to 60A, read in context it
    supported the Tenants submission that it had the right to connect to the
    electrical utility system via the transformer that was located at 60A. The
    solar project was central to the lease, as demonstrated by the provision in s.
    5(a) that the Tenant satisfy itself of the ability to connect to the electrical
    utility system as a Tenants condition in the lease. Section 11(b) limited the
    landlords activities not only on the Roof or other parts of the Building or
    Property, but also on any lands adjacent to the Property, and the application
    judge found that 60A was properly considered adjacent for purposes of the
    lease.

[13]

On
    the second issue, the application judge agreed with the Tenant that s. 2 of the
    lease, which defines the right of way that is leased to the Tenant pursuant to
    s. 6(a), is clearly not limited to the Roof Area as it includes (i) such
    rights, interests, rights-of-way, easements and privileges in any way
    pertaining thereto and set forth in greater detail herein and (ii) such rights
    of ingress and egress to the Property as may be reasonably necessary for the
    Tenants use of the Roof Area in accordance with the terms hereof, to have and
    to hold for and during the Term.

[14]

The
    application judge concluded that, although the definition of Roof Equipment
    requires that it is to be located on the Roof Area and includes inverters,
    Connecting Equipment in s. 2(b)(i) is not limited to the rooftop location.
    Because the inverters are also included in the definition of Connecting
    Equipment, the lease does not limit their installation to the Roof Area. The
    application judge rejected Nissas argument that the Tenant had a right only to
    use or travel across the Property other than the Roof, because the lease
    necessarily contemplated the connection of some equipment/wires from the solar
    panels on the Roof and out of the Building in order to join the local electrical
    utility system, and this equipment would necessarily be installed permanently.
    The application judge also considered that the separate listing of rights to
    access to the Roof Area and the Connecting Rights of Way in s. 2(b)(ii)
    supported the argument that the rights in s. 2(b)(i) were more than just access
    rights.

[15]

The
    application judge therefore granted the Tenants application.

DISCUSSION

[16]

It
    is now well established, following the decision in
Sattva Capital Corp. v.
    Creston Moly Corp.
, 2014 SCC 53, [2014] 2 S.C.R. 633, that contractual
    interpretation of non-standard form contracts is properly characterized as a
    mixed question of fact and law and is subject to deferential review on appeal.
    The standard of review is palpable and overriding error, unless it is possible
    to identify an extricable question of law, in which case correctness review
    applies.

[17]

Sattva

emphasizes that questions of law are relatively rare, but the Supreme Court
    identified three examples of legal errors that may occur in the course of
    contractual interpretation: the application of an incorrect principle, the
    failure to consider a required element of a legal test, or the failure to
    consider a relevant factor:
Sattva
, at para. 53 (citing
King v.
    Operating Engineers Training Institute of Manitoba Inc.
, 2011 MBCA 80, 270
    Man. R. (2d) 63, at para. 21). Nissa does not argue that the application judge
    made a palpable and overriding error. Accordingly, the burden is on Nissa to
    establish an error on a question of law, as contemplated in
Sattva
.

(1)

The right to connect at 60A

[18]

Nissa
    argues that the lease is restricted to 61A Enviro Park Lane; that by its terms
    it does not and cannot grant access to or use of any other property; and that
    the application judge erred in law by implying a term into the lease
    essentially granting the Tenant a license to use the transformer at 60A Enviro
    Park Lane. Nissa describes s.11(b) as a negative covenant of non-interference
    that does not create positive obligations, and argues that the application
    judge erred in interpreting the word adjacent as including a building across
    the road from the leased premises.

[19]

I
    agree that the application judge erred in interpreting the lease as it relates
    to this issue.

[20]

The
    application judge concluded that, read as a whole, the lease supported the
    Tenants right to connect to the electrical utility system via the transformer
    at 60A. She focused on s. 6(d), which
gives
    the Tenant a right to make necessary connections to the local electrical
    utility system, and s.
11(b), which
provides that the landlord covenants not to initiate or conduct or
    carry on maintenance or other activities that it knows or reasonably should
    know would adversely affect the solar energy project.

[21]

The
    application judge noted that when the lease was signed, both 60A and 61A were
    owned by 180 Ontario, and that both properties are now owned by Nissa.

[22]

The
    application judge treated ss. 6(d) and 11(b) as extending the leasehold
    interest to include 60A, but in doing so she failed to give effect to all of
    the relevant provisions in the lease, including the definitions of Property,
    Building, Roof, Roof Area and Project. These definitions operate to clearly
    limit the leasehold interest to 61A. Section 6(a) specifically provides that
    the Tenant leases the Roof Area and rights, interests, rights-of-way, easements
    and privileges and rights of ingress and egress to the Property, which is
    defined as lands municipally known as 61A Enviro Park Lane together with all easements,
    rights-of-way and other interests and appurtenances relating thereto.

[23]

In
    addition, the negative language in s. 11(b), which precludes the Landlord from
    engaging in activities that adversely affect the solar energy project, cannot
    be construed as creating an easement, right-of-way or other interest in land
    not subject to the lease. The application judge erred in relying on the
    language of this negative covenant to enlarge the description of the leasehold
    interest to include 60A, despite the definitions in the lease that clearly
    limit the leasehold interest to 61A.

(2)

The placement of the inverters

[24]

Nissa
    argues that the application judge erred in law by failing to apply the correct
    test for contractual interpretation. Specifically, Nissa says that, although
    the application judge correctly set out the principles in
Sattva
, she
    erred by excluding Mr. Holletts evidence, which should have been admitted as
    objective evidence of the circumstances surrounding the negotiations. The
    application judge erred, further, in failing to consider the practical
    consequences of her interpretation of the lease, which Nissa asserts undermines
    its use of the inside of the Building and its commercial interests, contrary to
    the principle of commercial reasonableness.

[25]

I
    would reject these arguments.

[26]

First,
    the application judge had concerns about the reliability of Mr. Holletts
    evidence, but ultimately rejected it on the basis of her finding that it went
    beyond what
Sattva
permitted. She made no error in doing so. Although
    in the unusual circumstances of this case the lease was entered into by related
    corporations, both of which were controlled by Mr. Hollett, his affidavit is
    evidence about the subjective intentions of the parties, and is impermissible
    on this account: see
Sattva
, at para. 59. It was also opinion evidence
    as to how the lease ought to be interpreted.

[27]

The
    application judge specifically instructed herself concerning the need to
    interpret the lease in accordance with sound commercial principles, as set out
    in the leading decisions of this court, at para. 30 of her decision. In
    essence, the Landlord is advancing on appeal the same argument that was rejected
    by the application judge  that s. 2(b) does not permit inverters to be
    installed anywhere other than the Roof.

[28]

The
    application judge provided cogent reasons in support of her conclusion
    rejecting this argument. By its terms, s. 2(b)(i) provided that Connecting
    Equipment, which included inverters, may be connected in places other than the
    Roof. The language of s. 2(b) was very broad and included provisions designed
    to facilitate the operation of a solar power system, which necessarily involved
    the connection of the solar panels on the Roof to equipment that exited the
    Building in order to connect to the electrical utility system. Thus, the
    application judge interpreted the right of way broadly rather than narrowly
    as more than simply a right of access to the Roof.

[29]

In
    summary, the application judges interpretation of the lease with respect to
    the issue of inverters reveals no legal error and is reasonable. There is no
    basis for this court to intervene on appeal.

CONCLUSION

[30]

I
    would allow the appeal in part.

[31]

The
    Tenant is not entitled under the lease to connect to the electrical utility
    system via the transformer at 60A Enviro Park Lane. The Tenant is entitled to
    have inverters located in the building at 61A Enviro Park Lane.

[32]

In
    light of the divided success, I would order the parties to bear their own costs
    of the appeal. I would vacate the application judges costs order, and order the
    parties to each bear their own costs of the application.

Released: C.W.H. July 4, 2019

Grant Huscroft J.A.

I agree. K. van
    Rensburg J.A.

I agree. C.W. Hourigan
    J.A.

Appendix

1. DEFINITIONS

Access Right-of-Way has the
    meaning ascribed to it in Section 2 hereof.
...
Building means, collectively, the building or buildings located on the
    Property

...

Connecting Equipment has the
    meaning ascribed to it in Section 2 hereof.

Connecting Rights-of-Way has
    the meaning ascribed to it in Section 2 hereof.

...

FIT Contract means the
    agreement no. F-003012-SPV-508 dated July 23, 2013 entered into between 1809765
    Ontario Limited, and the OPA under the FIT Program with respect to the Roof
    Area and the Project, as such agreement may be amended, restated, replaced,
    renewed, assigned or otherwise amended from time to time.

FIT Program means the Renewable
    Energy Feed-In Tariff Program established by the OPA.

...

Project means the renewable
    energy generation project to be constructed on the Roof Area, and other areas
    defined in Section 6 hereof, and owned by the Tenant, for the purposes of solar
    power electricity generation and distribution pursuant to the FIT Program.

Property means the lands
    municipally known as 61A Enviro Park Lane, Napanee, Ontario and legally
    described in Schedule B attached hereto
[1]
,
    together with all easements, rights-of-way and other interests and
    appurtenances relating thereto.

...

Roof means the roof of the
    Building, including the roof membrane and roof structure.

Roof Area means the area on the
    Roof, as shown on the sketch attached hereto as Schedule A.
[2]

Roof Equipment means the solar
    power generating panels and other related equipment located on the Roof Area,
    including, but not limited to, one or more inverters, which is used for the
    generation, metering and distribution of electricity from the Project, and
    includes such equipment as is required to secure, support, maintain and protect
    the solar power generating panels.

...

Utility System means the
    electricity distribution system owned and operated by the local electricity
    distribution company that provides electricity supply service to the Building.

2. ROOF AREA

Subject to the terms and
    conditions contained herein, the Landlord hereby grants to the Tenant:

(a) an exclusive lease of the
    Roof Area; and

(b) one or more rights-of-way to
    be shared in common with the Landlord and others entitled thereto, in, over,
    under, across and through the Building, the Property and those portions of the
    Roof, if any, which are not included in the Roof Area, in the location or
    locations shown on the Plans, for the purposes of the Project, including,
    without limitation:

(i)
    installing, operating, inspecting, maintain, repairing, replacing and removing
    all equipment required to connect the Roof Equipment to a transformer and
    distribute the electricity generated by the Project to the Utility System (the
    Connecting Equipment) including access to electrical panels and conduits to
    interconnect or disconnect the Project, which Connecting Equipment shall
    include, without limitation, conduits, cables, electrical wiring, wire
    management systems, electric meters, power distribution boxes, connecting
    hardware and inverters (the Connecting Rights-of-Way); and

(ii)
     access to the Roof Area and the Connecting Rights-of-Way (the Access
    Right-of-Way).

...

5. TENANTS CONDITION

This Lease shall be conditional
    on the Tenant satisfying itself, in its sole and absolute discretion, that it
    has the ability to install and operate the Project on the Roof Area (the
    Tenants Condition), which ability shall include, without limitation:

(a) the Tenant having satisfied
    itself with respect to the title of the Property, the zoning and permitted uses
    for the Property, the environmental condition of the Property, the ability to
    connect the Project to the Utility System, and the suitability of the Roof for
    the Project. The Landlord agrees that from and after the Date of this Lease,
    the Tenant may have unfettered access to the Property, the Building and the
    Roof upon forty-eight (48) hours prior notice to the Landlord, to conduct such
    tests and inspections as the tenant may reasonably require in order to satisfy
    itself with respect to the foregoing; provided that, promptly following all
    such tests and inspections, the Tenant shall, at its sole cost and expense,
    restore the Property, the Building and the Roof to their respective conditions
    prior to the carrying out of any such tests and inspections, and repair any
    damage caused to the Property, the Building or the Roof by any such tests and
    inspections.

The Tenants Condition is for the
    sole benefit of the Tenant and may be waived by the Tenant in whole or in part
    in the Tenants sole discretion. The Tenant shall give Notice to the Landlord
    within thirty (30) days after the satisfaction of the Tenants Condition. In
    the event that neither a Notice of satisfaction of the Tenants Condition nor a
    Notice waiving the Tenants Condition has been delivered by the Tenant to the
    Landlord by 11:59 p.m. EST on the day which is the thirty-six (36) month
    anniversary of the date of this Lease, this Lease shall terminate and be of no
    further force and effect and neither Party shall have any further obligations
    or liability to the other, save and except for the Tenants obligations under
    Section 5(a) and Section 10(d) which shall survive the termination of this Lease.

6. USE AND ACCESS

(a)  The
    Landlord acknowledges, consents and agrees that the Tenant, its contractors,
    agents and employees may use the Roof Area throughout the Term and any
    extension for the purposes of solar power electricity generation and distribution
    under the FIT Contract and agrees that, with respect to the Property and the
    Building, this use shall be exclusive to the Tenant and its contractors, agents
    and employees. The Landlord agrees that, in furtherance of such permitted use,
    the Tenant may install, operate, inspect, maintain, repair, replace, enhance,
    upgrade, remove and alter the Roof Equipment and the Connecting Equipment in
    its sole discretion, at any time or times, subject to the terms of this Lease.
    The Tenant hereby takes and leases from the Landlord the Roof Area together
    with (i) such rights, interests, rights-of-way, easements and privileges in any
    way pertaining thereto and set forth in greater detail herein and (ii) such
    rights of ingress and egress to the Property as may be reasonably necessary for
    the Tenants use of the Roof Area in accordance with the terms hereof, to have
    any to hold for and during the Term.

(b) The Landlord agrees that the
    Tenant and its contractors, agents, employees and invitees (including, without
    limitation, the OPA) shall have unrestricted access to the Roof Area, the
    Connecting Right-of-Way and Access Right-of- Way at all times during the Term,
    on a 24 hours per day, 7 day per week basis, provided that, except in cases of
    emergency, the Tenant shall use commercially reasonable efforts to provide the
    Landlord with at least twenty-four (24) hours prior notice of the need to
    access such areas and shall use commercially reasonable efforts to minimize any
    interference with the business of the Landlord or other Building tenants.

...

(d) In connection with the
    Tenants use of the Roof Area, the Tenant shall have the right, subject to
    compliance with all Applicable Laws and obtaining the Landlords consent, which
    consent shall not be unreasonably withheld, to (i) trim, cut down and remove
    flora adjacent to the Project to provide reasonable solar access, (ii) make
    necessary connections to the local electrical utility system so long as such
    connection will not cause an overload to such system(s), and (iii) access to
    all such areas of the Property for the purposes of performing the foregoing
    actions. The Tenant covenants to use its best efforts to minimize any
    disruptions to business operations on the Property in exercising its rights
    under this Section 6.

...

11. LANDLORDS CONVENANTS

...

(b) The Landlord covenants and
    agrees to keep the Roof and the structural elements of the Building in good
    repair at all times during the Term, provided that the Landlord shall not
    initiate or conduct or carry on maintenance or other activities to, on or
    affecting the Roof or other parts of the Building or the Property, or on any
    lands adjacent to the Property, that it knows, or should reasonably know, may
    damage, impair or otherwise adversely affect the Project or its function (including
    activities that may adversely affect the Projects exposure to sunlight), or
    cause the Tenant to be in breach of its obligations under the FIT Contract.

[1]
No Schedule B was, in fact, attached to the lease.

[2]
No Schedule A was, in fact, attached to the lease.


COURT OF APPEAL FOR ONTARIO

CITATION: Petersoo v. Petersoo, 2019 ONCA 624

DATE: 20190723

DOCKET: C66775

Tulloch, Benotto and Huscroft JJ.A.

BETWEEN

Karinna Margaret Gerda Petersoo

Applicant (Appellant)

and

Tonu Elmar Petersoo

Respondent (Respondent)

Kristen Normandin and Joanna Hunt-Jones, for the
    appellant

Michael Stangarone and Stephen Kirby, for the respondent

Heard: May 23, 2019

On appeal from the order of Justice Jasmine T. Akbarali
    of the Superior Court of Justice, dated November 1, 2018, with reasons reported
    at 2018 ONSC 6519, allowing an appeal from a decision of Arbitrator Gregory
    Cooper, dated August 21, 2017.

Benotto J.A.:

[1]

T
he parties retained an arbitrator to conduct the parenting plan review
    provided for in their separation agreement. Following an eight-day hearing, the
    arbitrator awarded the mother custody and allowed her to move the children from
    Toronto to Guelph to attend a school adapted to their special needs. The mother
    moved and enrolled the children in the school.  The father then appealed the
    arbitrators decision.

[2]

Although the father raised
    several grounds of appeal, the appeal judge overturned the arbitral award on
    the basis that there was a fundamental procedural unfairness to the process
    causing a denial of natural justice. It arose, she found, because the father
    did not receive adequate notice of the mothers intent to move. The appeal
    judge set aside the award and directed the parties to attend another arbitration
    before a different arbitrator.
[1]

[3]

For the reasons that follow, I would allow the
    appeal and re-instate the arbitrators award.

FACTS

[4]

The parties were married in 2003 and had three
    children: K. born November 2007, and twins U. and J. born December 17, 2009. The
    parents separated in 2011.

[5]

Not long after the separation, the parties
    retained senior family law lawyer Gregory Cooper to mediate their disputes as
    to property, support and parenting. The issues were resolved and incorporated
    into the terms of a separation agreement on December 16, 2013. They agreed to
    joint custody of the children with a comprehensive parenting plan that provided
    for the following:

·

The
    children would reside primarily with the mother;

·

The
    children would reside with the father alternate weekends, Tuesdays overnight
    and alternate Thursdays from after school until 7:30 pm.

·

The
    mother would continue to be the main contact person with respect to the
    childrens educators and health care providers.

[6]

The separation agreement provided that the
    parenting schedule would be reviewed at the request of either party on or after
    September 1, 2015. In this regard, the agreement stated, at para. 3.22:

The review will be conducted by way of
    mediation/arbitration with Gregory Cooper, or if Mr. Cooper is not available,
    another mutually agreed to mediator/arbitrator.

[7]

There was also a Dispute Resolution provision
    in para. 5.3 and 5.4:

The arbitration will be conducted in
    accordance with the
Arbitration Act,
and will constitute a secondary arbitration
    under the
Arbitration Act
and the
Family Law Act.

[The parties] waive section 35 of the
Arbitration Act.

[8]

The children did not do well under the parenting
    plan. All three children were having difficulties. K. was having serious
    difficulties academically. In 2014, the

mother
    sought the advice of
Dr. Handley-Derry,
a
    developmental pediatrician.

[9]

In 2015, the mother asked Mr. Cooper to
    terminate the fathers overnight access due to concerns about alcohol and anger
    management. Mr. Cooper did not do so, but required the parties to attend an
    assessment before Dr. Raymond Morris pursuant to s. 30 of the
Childrens
    Law Reform Act
, R.S.O. 1990, c. C.12
.

[10]

The childrens situation did not improve.
    According to the mother, the children were in crisis academically and
    emotionally. K., who by 2016 was in grade four, was reading at a grade one
    level and was falling further behind. The boys were also below grade level.

[11]

The mother initiated the custody review
    procedure provided for in the separation agreement.

[12]

Meanwhile,
Dr. Handley-Derry continued to
    see the children. He
recommended that they be enrolled in a
    school that offers a Direct Instruction system. This system operates in
    conjunction to regular classroom programmes with remedial attention for special
    needs children. Shortly before the review was to begin, the mother began
    researching schools. Unable to find an affordable and suitable institution in
    Toronto, she expanded her search. She was impressed with St. Judes/Scholars
    Hall in Kitchener which offers the Direct Instruction system at affordable
    tuition.

[13]

The father did not agree that the children were
    having difficulties at school. He wanted them to stay at their current school
    and he wanted more time with them, in accordance with the assessment report of
    Dr. Morris which recommended that the children not spend more than three days
    without seeing their father.

The arbitration

[14]

In May 2017, the parties attended before Mr.
    Cooper for a pre-arbitration meeting.  He fixed the date for the hearing at
    June 26, 2017.

[15]

On June 16, 2017 the father brought a motion before
    Mr. Cooper seeking a six to eight-week adjournment. He relied on a non-specific
    medical issue and the need for more time to assemble financial information. The
    adjournment was opposed by the mother, who argued that the children were in
    crisis. The arbitrator moved the start date for the hearing from June 26 to
    July 7, 2017 but made it peremptory on the father.

[16]

On July 4, 2017 the mother served an offer to
    settle including a term that she be entitled to move to Guelph so the children
    could attend St. Judes.

[17]

On July 6, 2017 Opening Statements were
    exchanged. The mothers statement indicated that she would be seeking an order
    allowing her to move to Guelph so that the children can attend St. Judes.

[18]

The arbitration began on July 7, 2017 and
    continued for eight hearing days concluding on July 24, 2017. The arbitrator
    heard from the parents, from Dr. Handley-Derry and from Dr. Morris. At no point
    during the hearing did the father seek an adjournment in response to the mother
    having raised the issue of the move to Guelph.

[19]

A review of the parenting plan was front and
    centre in the hearing. The most significant issue was the educational plan for
    the children.

[20]

Dr. Handley-Derry recommended that the children
    move schools. Dr. Morris recommended that the mother have final decision-making
    authority with respect to health and education. However, Dr. Morriss report of
    February 7, 2017 predated the mothers request to move the children to Guelph
    and he did not offer an opinion on this issue.

[21]

The arbitrators award was released on August
    21, 2017. He agreed that the children were in crisis. They were acting out,
    hitting each other, lashing out at their mother, exhibiting symptoms of illness
    with no apparent physical bases and regressing in terms of bladder and bowel
    control. He concluded that the existing joint custodial arrangement had not
    served the children well and that their best interests would be served by
    being in the custody of the mother, who had primarily managed their lives to
    date.

[22]

The arbitrator then addressed the mothers
    proposal to move the children to Guelph to attend St. Judes. At no point did
    the father or his counsel object to the mobility issue being addressed by the
    arbitrator.

[23]

The arbitrator correctly set out the law on
    mobility and concluded that the children should move to Guelph and attend St.
    Judes because it was most appropriate to meet their complex needs. The
    arbitrator recognized that this was contrary to one of the recommendations of
    Dr. Morris that the children should not be away from either parent for more
    than three days, but found as follows at para. 123:

However, when I
    examine Dr. Morris report carefully, I am not able to find the rationale for
    this position, nor did I hear such rationale in Dr. Morris oral evidenceIt
    was my impression that the frequent transitions between the parties houses has
    been detrimental rather than beneficial to the children, partly due to the
    differing parenting styles and regimens in each of the homes. I am buttressed
    in this view by the comment of Dr. Handley-Derrythat The moving back and
    forth between the two homes was a very stressful period for the children, due
    to the disruption in [their] sleep and routines.

[24]

The arbitrator found that the high level of
    conflict between the parents was impacting the children. He then set out a
    parenting plan on the basis of the move to Guelph.

Events
    following the award

(1)

The mother and children moved

[25]

Following the award, the mother and children
    moved to Guelph and the children began attending St. Judes. No motion to stay
    the award was brought by the father.

(2)

The father appealed

[26]

The father served a notice of appeal of the
    arbitrators award on September 20, 2017, after the children began attending
    St. Judes. This was the last day of the appeal period.

(3)

The costs award was released

[27]

On November 1, 2017 the arbitrator released his
    costs award. He awarded the mother $75,000 in costs pursuant to r. 24(11)
    representing costs of the financial issues. With respect to costs of the
    parenting issue, he awarded no costs. He explained this at para. 21:

I do not consider that it was unreasonable for [the father] to
    oppose the plan put forward by [the mother]. There are several reasons for
    this:

a)

The parties had operated for many years under a mediated separation
    agreement which provided [the father] with considerably more parenting time
    than that proposed by [the mother] at the hearing;

b)

The
mobility issue, which arose as a result
    of [the mothers] wishing to enroll the children in a private school in
    Kitchener, came to [the fathers]  attention only very shortly prior to the
    commencement of the hearing, and thus, arguably, [he] had insufficient time to
    fully prepare for and respond to this aspect of [the mothers] case;

c)

Dr. Morrisrecommended
    that the children not be apart from either parent for a period in excess of
    three days. In the face of this recommendation, I do not consider that it was
    unreasonable for [the father] to take the position that the children should not
    be moved

(4)

The appeal was heard

[28]

The appeal was heard in Superior Court on
    October 22, 2018. By this time, the children had been living in Guelph for 14
    months and were in their second year at St. Judes.

DECISION OF THE APPEAL JUDGE

[29]

Although many issues were raised by the father
    on appeal, the appeal judge relied entirely on a procedural issue to set aside
    the arbitrators award with respect to parenting issues.

[30]

She concluded that the arbitration process was
    fundamentally unfair to the father because of the late notice of the mobility
    issue. She found that the arbitrator did not comply with s. 19(2) of the
Arbitration
    Act
,
1991
, S.O. 1991, c. 17 (the
Arbitration
    Act
),
which requires that
    each party: shall be given an opportunity to present a case and to respond to
    the other parties cases. Despite the fact that the father  who was
    represented throughout  did not object to the issue being decided or seek an
    adjournment, the appeal judge found at para. 32 that:

it was incumbent
    on the arbitrator to enquire about the issue to ensure proper notice has been
    given.

[31]

On this basis she found a denial of procedural
    fairness and set aside the award as it related to parenting issues. She ordered
    a new arbitration before a different arbitrator. Pending that arbitration, the
    appeal judge set aside the entirety of the arbitrators parenting schedule

including several provisions that
    had been made on consent
and made significant changes to the
    parenting arrangements on an interim basis.

POSITION OF THE PARTIES

[32]

The mother submits that the appeal judge erred
    by relying solely on the alleged procedural rights of the father without regard
    to the best interests of the children. The appeal judge should not have
    entertained a submission not made before the arbitrator. It was not incumbent
    on the arbitrator to pursue procedural rights not raised by a represented party
    at first instance.

[33]

The father submits that a balanced analysis of
    the best interests of the children cannot take place where there has been  as
    here  a denial of procedural fairness. The father was prevented from
    addressing the mobility issue because of the short notice. The appeal judge
    therefore correctly concluded that a new hearing before a different arbitrator
    was required.

ISSUES

[34]

The sole issue on this appeal is clear: did the
    appeal judge err in law by finding that the arbitrator violated principles of procedural
    fairness?

ANALYSIS

[35]

Mediation/arbitration is an important method by
    which family law litigants resolve their disputes. Indeed, the courts encourage
    parties to attempt to resolve issues cooperatively and to determine the
    resolution method most appropriate to their family. The mediation/arbitration process
    can be more informal, efficient, faster and less adversarial than judicial
    proceedings. These benefits are important with respect to parenting issues,
    which require a consideration of the best interests of children. The decision
    of an arbitrator, particularly in child related matters, is therefore entitled
    to significant deference by the courts: see
Patton-Casse v. Casse
,
    2012 ONCA 709, 298 O.A.C. 111, at paras. 9, 11.

[36]

The essence of arbitration is that the parties
    decide on the best procedure for their family. Although the family law of
    Ontario must be applied, the procedures on an arbitration are not meant to
    mirror those of the court. I do not agree with the appeal judges criticism of
    the process which did not include pleadings and a record of the pre-arbitration
    meeting.

[37]

Here the parties decided that an appeal would
    only be based on a question of law. As this court stated in
Alectra
    Utilities Commission v. Solar Power Network Inc.,
2019 ONCA 254, at para.
    20:

The starting point in exercising the courts
    role under the
Arbitration Act, 1991
is the
    recognition that appeals from private arbitration decisions are neither
    required nor routine.

[38]

The issue on this appeal is whether the appeal
    judge erred on a point of law. She found that the arbitrator violated s. 19 of
    the
Arbitration Act
because:

1.

It was incumbent on him to enquire about the
    notice as to mobility and to ensure proper notice had been given (para. 32);
    and

2.

The lack of notice of the mobility issue caused
    a fundamental procedural unfairness (para. 34).

[39]

The
Arbitration Act
provides the
    following under the general heading Conduct of Arbitration:

Equality and fairness

19

(1) In an
    arbitration, the parties
shall be treated equally and
    fairly.

(2) Each party shall be
    given an opportunity to present a case and to respond to the other parties
    cases. 1991, c. 17, s. 19 (2).

[40]

The appeal judge erred in law by finding a
    violation of s. 19. I say this for four reasons:

1.

the proceedings were fair;

2.

the father acquiesced in the notice with respect to mobility;

3.

the appeal judge ignored the best interests of the children; and

4.

the appeal judges interpretation of s. 19 of the
Arbitration Act
establishes a new duty for arbitrators that would fundamentally change the arbitration
    process and undermine arbitral independence and impartiality.

The proceedings were fair

[41]

There is no doubt that the issue of mobility
    came up relatively late in the proceedings. However, the father, who was
    represented throughout, knew of the issue prior to the start of the hearing and
    neither requested an adjournment nor objected to the issue being addressed.

[42]

For eight days while evidence was being
    presented, he was not impeded from presenting his case, nor from cross-examining
    the mother or the experts. At no point did he request a further assessment with
    respect to St. Judes to challenge the evidence that the school would benefit the
    children. Instead, the father simply gave evidence that the children were fine
    and should stay at their Toronto school.

[43]

Having received the evidence of both parties on
    the mobility issue, the arbitrator preferred the mothers evidence and found in
    her favour, as he was entitled to do so: see
Arbitration Act,
s. 21. The
    proceedings were not rendered unfair simply because the arbitrator found in
    favour of the mother on this issue.

The father acquiesced in the notice

[44]

The father acquiesced in the late notice.
    Instead of raising the issue and seeking an adjournment, he proceeded with the
    hearing, submitting that the children should stay at their school and only raising
    an objection when the result was not to his liking.

[45]

In
Popack v. Lipszyc,
2016 ONCA 135, 129 O.R.
    (3d) 321, this court dealt with a challenge to an arbitration decision where
    the arbitral panel met with a witness
ex parte
without notice to the parties
. On appeal,
    the appellant, Mr. Popack, who had not objected to such a meeting when the
    issue was raised during the hearing, argued that the award should be set aside
    because of this procedural breach. In dismissing the appeal and upholding the
    arbitral award, this court said, at para. 39:

Mr. Popack sought
    to gain an advantage in the arbitration proceedings when he learned of the
ex
    parte
meeting[He] positioned himself so that he could decide to raise the
    issue formallyif he was not satisfied with the award given by the panel. To
    reward that tactic by setting aside the award would eviscerate the finality
    principle that drives judicial review of arbitral awards and would cause a
    real practical injustice.

[46]

Similarly, here, the father was not entitled to
    stay silent, participate in the proceedings without objection, wait to see what
    the ruling was and then claim procedural unfairness when the decision was
    against him.

[47]

Further, the fathers conduct after the hearing
    confirms his acquiescence in the process. He did not seek a stay of the
    mobility order but raised the issue for the first time on appeal.

[48]

As a general rule, an appellate court will not
    permit an issue to be raised for the first time on appeal. This rule is
    grounded, in part, on societys interests in finality and the expectation that
    matters will be dealt with at first instance: see
R. v. Reid
, 2016
    ONCA 524, 132 O.R. (3d) 26, at paras. 39-40, leave to appeal refused [2016]
    S.C.C.A. No. 432.  This principle is particularly important when the lives of
    children are impacted by the proceedings.

Best interests of the children

[49]

The record leaves no doubt that the children
    were in crisis. The evidence was overwhelming that their behavioural, emotional
    and scholastic life was in danger. Although the father did not accept the
    crisis, he long knew that this was the issue on the parenting review. The
    mother found St. Judes to ameliorate the crisis. To require the parties to
    defer a proposed remedy  however late-breaking  because of procedural issues
    ignores the urgency of the situation and the best interests of the children.

[50]

The appeal judge relied exclusively on the short
    notice given to the father to set aside the award without regard to the
    childrens best interests. The procedural rights of a parent  which were not
    pursued at the time of their purported breach, despite ample opportunity to do
    so  cannot be invoked long after the hearing has been completed in order to override
    the welfare of children in crisis.

Duty of arbitrator

[51]

The appeal judges interpretation of s. 19 of
    the
Arbitration Act
places a new and unreasonable burden on an
    arbitrator in family law proceedings. When parties are represented, it does not
    fall to the arbitrator
to move to the role of advocate
.
    Such a move would undermine the required independence and impartiality of an
    arbitrator.

[52]

There is no evidence that the arbitrator did not
    treat the parties equally and fairly. There is no evidence that the father did
    not have an opportunity to present and respond to the case. As I have already
    explained, he was represented by counsel and did not object to the mobility
    issue being determined. The situation was urgent, and the arbitrator had a duty
    to consider the childrens welfare as paramount.
Recall that the
    arbitrator had been involved with the family for many years.

[53]

The appeal judge placed an obligation on the
    arbitrator to depart from his role as independent adjudicator and move to the
    role of advocate. This would compromise his independence and potentially breach
    his duty of impartiality. Section 19 does not require the arbitrator to descend
    into the arena and become an advocate or advance a partys case.

THE INTERIM PARENTING PLAN

[54]

In light of my determination to re-instate the
    arbitrators award, it is not necessary for me to consider the interim
    parenting plan set out by the appeal judge.

CONCLUSION

[55]

The appeal judge erred in determining that the
    principles of procedural fairness as articulated in s. 19 of the
Arbitration
    Act
were violated.

[56]

I would allow the appeal and re-instate the
    arbitral award.

[57]

I would award the appellant her costs of the
    appeal in the amount of $23,000 inclusive of HST, disbursements and the
    application for leave to appeal. I would reverse the costs awarded in the court
    below so that they are payable to the her by the father.

Released: July 23, 2019

MLB

M.L. Benotto J.A.

I agree M. Tulloch J.A.

I agree Grant Huscroft J.A.

[1]
Although financial issues were included in the award and on the appeal, only
    custody is an issue before this court.


COURT OF APPEAL FOR ONTARIO

CITATION: Potis Holdings Ltd. v. The Law Society of Upper
    Canada, 2019 ONCA 618

DATE: 20190722

DOCKET: C66263

Hoy A.C.J.O.,
    Trotter and Jamal JJ.A.

BETWEEN

Potis Holdings Ltd. and
    Ullrich Stefan Vogel

Plaintiffs (Appellants)

and

The Law Society of Upper Canada
, Lawyers
    Professional Indemnity Company, Evans Sweeny Bordin LLP and Steven D. Gadbois

Defendants (
Respondent
)

Marc A. Munro, for the appellants

Antonios T. Antoniou and Frank C. Caruso, for the
    respondent

Heard: July 16, 2019

On appeal from the order of
    Justice Antonio Skarica of the Superior Court of Justice, dated November 14,
    2018.

Jamal J.A.:

INTRODUCTION

[1]

The appellants appeal the order of the motion judge striking out their
    statement of claim and amended statement of claim as against the respondent The
    Law Society of Upper Canada (now Law Society of Ontario) as disclosing no
    reasonable cause of action.

[2]

The appellants complained that their former
    lawyer, the respondent, Steven D. Gadbois,
had
    negligently represented them in a lawsuit against the City of Waterloo.
    Following the complaint,
Mr. Gadbois
    delivered his client file to the respondent law firm, Evans Sweeney Borden LLP,
    which was retained by the respondent Lawyers Professional Indemnity Company (LPIC)
    to represent Mr. Gadbois in relation to the professional indemnity claim.

[3]

The appellants action is premised on the Law Societys alleged practice
    of requiring or permitting lawyers facing potential negligence claims to
    provide a copy of the relevant client file to LPIC to allow it to evaluate and
    address the anticipated professional indemnity claim. The appellants say that
    this practice gives rise to a variety of civil causes of action against the Law
    Society.

THE PLEADINGS

[4]

The statement of claim and amended
    statement of claim plead that [t]he practice of the [Law] Society in requiring
    or permitting solicitors facing potential negligence claims to deliver their
    clients confidential property to LPIC and its solicitors was a violation of
    the confidential relationship required of lawyers with their clients at common
    law and by statute.
The amended statement of
    claim pleads that the Law Society is liable for breach of confidence,
    confidentiality, trust, privacy and solicitor-client privilege, as well as
    conversion and trespass to chattels.

[5]

Neither the statement of claim
    nor the amended statement of claim pleads that the Law Society engaged in any
    bad faith conduct, either generally with respect to the Law Societys alleged
    practice, or specifically with respect to the appellants.

[6]

The Law Societys statement of defence
    invokes a statutory immunity under s. 9 of the
Law Society Act
,
R.S.O. 1990, c. L.8, in
    respect of claims for damages arising from the execution of its statutory duties
    and powers.
It says that s. 9 broadly
    immunizes the Law Society, including its Treasurer, officers, benchers,
    employees, and other officials of the Law Society, from civil liability arising
    from the good faith performance of its statutory duties and powers.

THE MOTION TO STRIKE

[7]

After filing its statement of defence,
    the Law Society moved to strike
the
    appellants statement of claim as disclosing no reasonable cause of action. At
    the return of the motion, the appellants brought a cross-motion to amend the
    statement of claim  which as amended again included no allegations of bad
    faith  such that the motion was argued based on the amended statement of
    claim. The appellants also argued that the Law Society was required to obtain
    leave before bringing its motion because it had filed its statement of defence.

[8]

There was no evidence before the
    motion judge as to whether the Law Societys practice was as alleged, nor would
    such evidence be admissible on a motion to strike:
Rules of Civil
    Procedure
, R.R.O. 1990, Reg. 194, r.
    21.01(2)(b).

[9]

The motion judge found that s. 9 of
    the
Law Society Act

confers upon the Law Society a statutory immunity from
    claims for damages for actions taken in good faith pursuant to its statutory
    mandate to regulate the legal profession or the provision of legal services.
    Section 9 provides as follows:

No action or other
    proceedings for damages shall be instituted against the Treasurer or any
    bencher, official of the Society or person appointed in Convocation for any act
    done in good faith in the performance or intended performance of any duty or in
    the exercise or in the intended exercise of any power under this Act, a
    regulation, a by-law or a rule of practice and procedure, or for any neglect or
    default in the performance or exercise in good faith of any such duty or
    power.

[10]

The motion judge found that the
    appellants slim allegations in their pleadings did not include any claim of
    bad faith against the Law Society, and therefore struck out the pleadings as
    disclosing no reasonable cause of action, without leave to amend.

[11]

For the reasons that follow, I agree
    with the motion judges disposition. The appeal is therefore dismissed.

ISSUES

[12]

The appellants raise three issues on appeal:

1.

Did
    the motion judge err in hearing the Law Societys motion to strike after the
    Law Society had delivered its statement of defence?

2.

Did
    the motion judge err in striking out the statement of claim and amended
    statement of claim as against the Law Society?

3.

Did
    the motion judge err in refusing to grant leave to amend?

ANALYSIS

(1)

Did the motion judge err in
    hearing the Law Societys motion to strike after the Law Society had delivered
    its statement of defence?

[13]

The appellants assert that the motion judge erred in
    hearing the Law Societys motion to strike because the Law Society had not
    applied for leave to bring the motion after having filed its defence. They note
    that r. 2.02 of the
Rules of Civil Procedure

provides that a
    motion to attack a document for irregularity shall not be made, except with
    leave of the court, in circumstances where the moving party has taken any
    further step in the proceeding after obtaining knowledge of the irregularity.
    The appellants argue that a motion to strike a pleading is an attack on a
    document for irregularity,
and therefore
    required leave in this case,
as the Law
    Society had already taken a further step by delivering its defence. The
    appellants rely on
Bell v. Booth Centennial Healthcare Linen
    Services
,
2006
    CanLII 39029 (Ont. S.C.), at para. 6, in support of the proposition that the
    practice of bringing a motion to strike after delivering a defence should be
    discouraged.

[14]

I do not agree with the appellants submission.
While generally a defendant should move to strike a claim
    as disclosing no reasonable cause of action before filing a statement of
    defence, in some instances a defendant may bring such a motion without leave
    even after delivering a defence. One such instance is where it is obvious from
    the defendants pleading that the defendant takes issue with the sufficiency of
    the plaintiffs claim:
Arsenijevich v. Ontario (Provincial Police)
, 2019 ONCA 150, at para. 7.

[15]

That is the case here. The Law
    Societys statement of defence pleads the very deficiencies that were relied on
    in the motion to strike, namely, the Law Societys statutory immunity under s.
    9 of the
Law Society Act
.

[16]

Moreover, the motion
    judge proceeded to hear the Law Societys motion in the face of the appellants
    argument that the Law Society should have obtained leave. It was clear that the
    motion judge would have granted (or indeed effectively granted) leave. The motion
    judges determination to proceed was consistent with r. 1.04 of the
Rules of
    Civil Procedure
that the rules be liberally construed to secure the just,
    most expeditious and least expensive determination of every civil proceeding on
    its merits.

[17]

As such,
the motion judge did not err in hearing the motion to
    strike.

(2)

Did the motion judge err in striking
    out the statement of claim and amended statement of claim as against the Law
    Society?

[18]

The essential
    principles governing a motion to strike out a pleading under r. 21.01(1)(b) as
    disclosing no reasonable cause of action are well known. A pleading will be
    struck out if, assuming the facts pleaded to be true, it is plain and obvious
    that it discloses no reasonable cause action; that is, where it has no
    reasonable prospect of success:
R. v. Imperial Tobacco
, 2011 SCC 42, [2011] 3 S.C.R. 45, at
    para. 17;
Hunt v. Carey Canada Inc.
, [1990] 2 S.C.R. 959, at p. 980; and
McCreight v. Canada
    (Attorney General)
, 2013 ONCA 483, 116 O.R. (3d) 429, at
    para. 39.

[19]

It is also settled that the standard of
    review of a decision on a rule 21.01(1)(b) motion is correctness:

McCreight
, at para. 38.

[20]

The appellants
    raise two grounds to challenge the motion judges decision to strike out their
    pleadings.

[21]

First, the
    appellants contend that they were not required to plead bad faith to
    preemptively defeat the application of s. 9 of the
Law
    Society Act
, as good faith is a
    statutory defence to be pleaded by the Law Society. The appellants say that their
    claim was not required to anticipate defences that might be raised.

[22]

I do not agree
    with the appellants submission. This court has accepted that
Hunt
does not preclude a court from striking
    out a claim on the basis that it discloses no cause of action because of the
    existence of an unanswerable defence:
Louie v. Lastman
(2002), 61 O.R. (3d) 459 (C.A.), at para.
    21.

[23]

Here, the
    unanswerable defence is that it is settled law that s. 9 of
the
    Law Society Act
provides the
    Law Society with statutory immunity from civil claims for damages for the
    exercise of statutory duties and powers made in good faith:
Edwards
    v. Law Society of Upper Canada
,
    2001 SCC 80, [2001] 3 S.C.R. 562, at paras. 14-17;
Robson v.
    Law Society of Upper Canada
,
    2017 ONCA 468, 26 Admin. L.R. (6th) 133, at paras. 4-7; and
Conway
    v. Law Society of Upper Canad
a
, 2016
    ONCA 72, 395 D.L.R. (4th) 100, at paras. 21-22.

[24]

While a claim
    against the Law Society alleging that it engaged in bad faith conduct may not be
    subject to the immunity provided by s. 9 of the
Law Society
    Act
, such a claim must still be
    pleaded with precision and with full particulars, as required by the
Rules
    of Civil Procedure
:
Conway
, at para. 39; r. 25.06(8).

[25]

Here, neither
    the statement of claim nor the amended statement of claim alleges that the Law
    Society engaged in any bad faith conduct. As such, there is no viable claim
    against the Law Society.

[26]

The appellants
    nevertheless assert that there is no authority for the proposition that s. 9
    applies to an intentional tort committed by the Law Society. They note that
Edwards
involved a claim for negligence;
Robson
involved a claim of negligent investigation;
    while in
Conway
this court granted leave to amend to permit a claim for misfeasance
    in public office to be pleaded against the Law Society because such a claim
    does not fall within the statutory immunity provided by s. 9. The appellants
    note that this court in
Conway
stated, at para. 22, that an absence of good faith or bad faith,
    involving malice or intent, is sufficient to ground a properly pleaded cause of
    action against the [Law Society].

[27]

I do not read
Conway
as supporting the appellants argument.
    The intent referred to is a malicious intent, which if pleaded would
    constitute bad faith and would therefore bring the impugned conduct outside the
    scope of s. 9. The court was not suggesting that the pleading of any
    intentional tort, even without a claim of bad faith, would necessarily fall
    outside s. 9.

[28]

None of the
    causes of action pleaded by the appellants  namely,
breach of confidence, confidentiality, trust, privacy and
    solicitor-client privilege, as well as conversion and trespass to chattels  involves
    bad faith as an essential element:
see e.g.
Jones v. Tsige
,
    2012 ONCA 32, 108 O.R. (3d) 241, at para. 71 (breach of privacy);
Lac
    Minerals Ltd. v. International Corona Resources Ltd
.
, [1989] 2
    S.C.R. 574, at p. 635 (breach of confidence);
373409 Alberta Ltd. (Receiver
    of) v. Bank of Montreal
, 2002 SCC 81, [2002] 4 S.C.R. 312, at para. 8
    (tort of conversion);
Ontario Consumers Home Services Inc. v. EnerCare Inc.
,
    2014 ONSC 4154, at paras. 50-53 (trespass to chattels);
Pritchard v.
    Ontario (Human Rights Commission)
, 2004 SCC 31, [2004] 1 S.C.R. 809, at
    paras. 14-21;
Canada (Privacy Commissioner) v. Blood Tribe Department of
    Health
, 2008 SCC 44, [2008] 2 S.C.R. 574, at para. 21 (solicitor-client
    privilege);
and
Mills v.
    Royal Bank
, 2012 ABCA 75, 524 A.R. 127, at para. 25 (breach of trust)
. As such, unlike
Conway
, it cannot be said that the pleadings implicitly allege bad
    faith so as to raise a tenable plea. As noted, there is no plea of bad faith
    against the Law Society at all, either in respect of the alleged practice or in
    respect of the appellants themselves.

[29]

Second, the
    appellants contend that the defence of good faith should not be determined on a
    motion to strike, as good faith is a question of fact requiring an evidentiary
    record.

[30]

I do not accept
    this submission. As the appellants pleadings do not allege any bad faith
    conduct by the Law Society, there is no need for an evidentiary hearing to
    determine the issue.

[31]

Accordingly, I
    conclude that the motion judge did not err in striking out the appellants
    pleadings as disclosing no reasonable cause of action.

(3)

Did the motion judge err in refusing
    leave to amend?

[32]

Lastly, the appellants
    assert that the motion judge, having granted the motion to strike, erred in
    refusing leave to amend the amended statement of claim. They say that because parties
    can amend pleadings as of right pursuant to r. 26.01, the motion judge erred in
    law by refusing leave to amend to cure any deficiencies.

[33]

I do not agree with this
    submission. A motion judges decision as to whether to grant leave to amend is
    discretionary and entitled to deference on appeal, absent palpable and
    overriding error of fact or error of law:
Conway
,
at
    para. 16. An appellate court should interfere only if the motion judge erred in
    principle or acted unreasonably in the exercise of his discretion: see
Grigonis
    v. Toronto Boardsailing Club
, 2010 ONCA
    651, at para. 5.

[34]

Here, the motion judge
    exercised his discretion to refuse leave to amend as the appellants had already
    twice pleaded no allegations of bad faith against the Law Society. His decision
    to refuse to afford a third opportunity to fashion a tenable plea was
    reasonable in the circumstances.

[35]

Nor did the motion judge
    err in law in refusing leave to amend. The appellants claim arises from the
    Law Societys alleged general practice of requiring client files to be provided
    to LPICs counsel; it does not arise from specific acts of bad faith directed at
    the appellants themselves. I have already found that, absent allegations of bad
    faith, the Law Society is protected by the statutory immunity in s. 9 of the
Law
    Society Act
. As such, there are no
    amendments that the appellants could make that might resuscitate their claim.

[36]

The motion judge was
    therefore entitled to refuse leave to amend.

DISPOSITION

[37]

For these reasons, the appeal is dismissed, with costs to the
    respondent Law Society in the amount of $
6,800
, inclusive of disbursements and taxes.

Released: July 22, 2019 A.H.

M. Jamal J.A.

I agree.
Alexandra Hoy A.C.J.O.

I agree. G.T. Trotter J.A.


WARNING

The President of the panel hearing this
    appeal directs that the following should be attached to the file:

An order restricting publication in this
    proceeding under ss. 486.4(1), (2), (2.1), (2.2), (3) or (4) or 486.6(1) or (2)
    of the
Criminal Code
shall continue.  These sections of
the Criminal
    Code
provide:

486.4(1)       Subject to subsection (2),
    the presiding judge or justice may make an order directing that any information
    that could identify the victim or a witness shall not be published in any
    document or broadcast or transmitted in any way, in proceedings in respect of

(a)     any of the following offences;

(i)      an offence under section 151,
    152, 153, 153.1, 155, 159, 160, 162, 163.1, 170, 171, 171.1, 172, 172.1, 172.2,
    173, 210, 211, 213, 271, 272, 273, 279.01, 279.011, 279.02, 279.03, 280, 281,
    286.1, 286.2, 286.3, 346 or 347, or

(ii)      any offence under this Act, as
    it read at any time before the day on which this subparagraph comes into force,
    if the conduct alleged involves a violation of the complainants sexual
    integrity and that conduct would be an offence referred to in subparagraph (i)
    if it occurred on or after that day; or

(iii)     REPEALED: S.C. 2014, c. 25, s.
    22(2), effective December 6, 2014 (Act, s. 49).

(b)     two or more
    offences being dealt with in the same proceeding, at least one of which is an
    offence referred to in paragraph (a).

(2)     In proceedings in respect of the
    offences referred to in paragraph (1)(a) or (b), the presiding judge or justice
    shall

(a)     at the first reasonable
    opportunity, inform any witness under the age of eighteen years and the victim
    of the right to make an application for the order; and

(b)     on application made by the
    victim, the prosecutor or any such witness, make the order.

(2.1) Subject to subsection (2.2), in
    proceedings in respect of an offence other than an offence referred to in
    subsection (1), if the victim is under the age of 18 years, the presiding judge
    or justice may make an order directing that any information that could identify
    the victim shall not be published in any document or broadcast or transmitted
    in any way.

(2.2) In proceedings in respect of an
    offence other than an offence referred to in subsection (1), if the victim is
    under the age of 18 years, the presiding judge or justice shall

(a) as soon as feasible, inform the
    victim of their right to make an application for the order; and

(b) on application of the victim or the
    prosecutor, make the order.

(3)     In proceedings in respect of an
    offence under section 163.1, a judge or justice shall make an order directing
    that any information that could identify a witness who is under the age of
    eighteen years, or any person who is the subject of a representation, written
    material or a recording that constitutes child pornography within the meaning
    of that section, shall not be published in any document or broadcast or
    transmitted in any way.

(4)     An order made under this section
    does not apply in respect of the disclosure of information in the course of the
    administration of justice when it is not the purpose of the disclosure to make
    the information known in the community.
2005, c.
    32, s. 15; 2005, c. 43, s. 8(3)(b); 2010, c. 3, s. 5; 2012, c. 1, s. 29; 2014,
    c. 25, ss. 22,48; 2015, c. 13, s. 18..

486.6(1)       Every person who fails to
    comply with an order made under subsection 486.4(1), (2) or (3) or 486.5(1) or
    (2) is guilty of an offence punishable on summary conviction.

(2)     For greater certainty, an order referred to in
    subsection (1) applies to prohibit, in relation to proceedings taken against
    any person who fails to comply with the order, the publication in any document
    or the broadcasting or transmission in any way of information that could
    identify a victim, witness or justice system participant whose identity is
    protected by the order. 2005, c. 32, s. 15.

COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Box, 2019 ONCA 601

DATE: 20190712

DOCKET: C66106

Rouleau, Tulloch and Fairburn JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Frazer Box

Appellant

Frazer Box, in-person

Nathan Gorham, duty counsel

Andrew Hotke, for the respondent

Heard: July 8, 2019

On appeal from the conviction entered on May 28, 2018 by
    Justice Shaw of the Superior Court of Justice, sitting without a jury.

APPEAL BOOK ENDORSEMENT

[1]

The appellant says that the trial judge
    erred in two respects: (a) misusing the fact that the appellant was bound by a
    prohibition order; and (b) finding that the complainants credibility was
    enhanced on the basis that she testified in a way that was not always favourable
    to her when all of those factors were provable by text messages.

[2]

We do not agree.

[3]

On the first point, the trial judge
    properly instructed herself on bad character evidence and the need to avoid all
    propensity reasoning. We see nothing in the reasons to suggest that she failed
    to adhere to that self-instruction.

[4]

On the second point, it was open to the
    trial judge to take into account the complainants acknowledgements, whether
    they were in text messages or not.

[5]

At its core, this appeal constitutes a
    complainant about credibility findings. We would defer to the trial judges
    assessment of credibility.

[6]

On consent of the Crown, the victim
    fine surcharge will be set aside:
R. v. Boudreault
, 2018 SCC 58. No other argument was pursued on the
    sentence appeal.

[7]

The conviction appeal is dismissed.
    Sentence appeal is dismissed except to the extent of setting aside the victim
    fine surcharge.