COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Whyte, 2014 ONCA 268

DATE: 20140404

DOCKET: M43365 (M42958)

Feldman, Tulloch and Lauwers JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Tassandra Whyte

Applicant

Marcus Bornfreund, for the applicant

Christine Bartlett-Hughes, for the respondent

Heard: February 18, 2014

An application for review under s. 680 of the
Criminal
    Code
of the order of the Honourable Justice Speyer of the Superior Court
    of Justice dated October 31, 2012, denying release of the applicant on bail
    pending her trial on a charge of accessory after the fact to murder, and the
    ruling of Justice OMarra of the Superior Court of Justice dated May 10, 2013, dismissing
    the application for lack of jurisdiction, pursuant to the order of Associate
    Chief Justice Hoy dated October 31, 2013.

Tulloch J.A.:

A.

OVERVIEW

[1]

The applicant, Tassandra Whyte, brought an application for a bail review
    in this court under s. 680(1) of the
Criminal Code
, R.S.C. 1985, c.
    C-46 (the
Code
). She seeks review of the detention order made by Speyer
    J. of the Superior Court of Justice on October 31, 2012, which denied the applicants
    release pending her trial on a charge of accessory after the fact to murder,
    and of the ruling made by OMarra J. of the Superior Court on May 10, 2013, which
    dismissed her second bail application for lack of jurisdiction. For the reasons
    that follow, I would find the second bail judge erred in declining
    jurisdiction, set aside the detention order and impose an order granting the
    applicant bail.

B.

BACKGROUND

[2]

I begin by briefly setting out the nature of the offence with which the applicant
    is charged and the procedural history of this matter.

(1)

The nature of the alleged offence

[3]

The applicant is charged with the offence of accessory after the fact to
    murder. Mark Moore is charged with  among many other offences  the murder of Jahmeel
    Spence on September 21, 2010. Sometime later, Mr. Moore became a suspect in the
    murder investigation. In August of 2011, the investigators sought and obtained
    a Part VI Authorization to covertly intercept telephone communications between multiple
    targets. The applicant was Mr. Moores girlfriend throughout 2010 and into the fall
    of 2011, and was also his surety for part of that time. As such, she was named
    as one of the targets in the application. Other targets included Mr. Moore, his
    mother, Hyacinth Moore, and the applicants sister, Nadine Keen.

[4]

As a means of stimulating discussion over the monitored phone lines, the
    police held a press conference on the one-year anniversary of Mr. Spences
    death, at which they announced that they believed that the getaway car for the
    murder was a blue Honda, and that they were continuing to search for that
    vehicle. The police knew that Mr. Moore was operating a blue Honda at the time
    of Mr. Spences homicide. The vehicle, which Mr. Moore had subsequently painted
    black, was registered in the applicants name.

[5]

The Crown alleges that, while in custody on firearms and drug charges, Mr.
    Moore called the applicant on several occasions to discuss the press conference
    and to urge her to amend the registered colour of the car from blue to black at
    the Ministry of Transportation (MTO). Eventually, the applicant attended at
    the MTO to change the vehicles colour on the registration form. The change
    applied retroactively to the entire history of the vehicle. During a subsequent
    intercepted call, the applicant told Mr. Moore that she had left the vehicle
    documents with Mr. Moores mother, Hyacinth Moore, so that they would not be
    found if a search warrant for her premises was executed.

[6]

During this period, the applicant lived in the same building as and
    across the hall from two of the Crown witnesses. During a number of the applicants
    intercepted calls with Mr. Moore, police heard them speaking about harming one
    of the witnesses. On one call, the applicant was intercepted engaging in an intimidating
    manner with one of the witnesses in the buildings elevator.

[7]

Mr. Moores preliminary hearing for the firearm-related offences was
    held during the timeframe of the wiretap authorization. The applicant attended
    the hearing on several occasions. During one of the applicants visits to the
    preliminary hearing, the Crown adduced surveillance evidence that showed an
    individual wearing a baseball hat. The Crown alleges that during the course of
    this evidence, the applicant made a note demonstrating a suggestion that she
    should ask Mr. Moore if she could throw away his hat because they may try to
    come over to [his] house and retrieve that item.

(2)

Procedural history

[8]

The applicant was arrested on November 10, 2011 and detained pursuant to
    s. 515(11) of the
Code
. The date for her trial has not yet been set,
    and her trial will not commence until after the completion of Mr. Moores
    trial.  Mr. Moores trial is currently set to commence on January 7, 2015, and
    is estimated to last for approximately four months.

[9]

On October 31, 2012, the applicant applied for bail for the first time
    before Speyer J. of the Superior Court. At the time of her bail hearing, the applicant
    had already been in custody for a year.

[10]

The
    bail judge denied the applicants application for bail on the secondary ground in
    s. 515(10)(b) of the
Code
 namely, that the applicants detention was
    necessary both for the protection or safety of the public and to ensure that
    the applicant did not interfere with the administration of justice. The bail
    judge noted that, if the underlying charge of murder was successful, the applicant
    could be facing, in all probability, a significant penitentiary term of
    imprisonment. The Crown was willing to consent to bail with a responsible
    surety  an unusual concession where an accused is charged with a s. 469
    offence. The applicant failed to produce a surety, and the bail judge  who
    concluded that one-on-one supervision of the applicant was indispensable  was
    unwilling to release her without one. The bail judge invited the applicant to
    renew her application if she found an appropriate surety and conveyed his
    willingness to consider even sureties with a dated criminal record.

[11]

On
    May 10, 2013, the applicant brought a second bail application before OMarra J.
    of the Superior Court, seeking interim release on the basis of a change in
    circumstances. She still did not have a surety, but argued that the passage of
    time itself constituted a material change in circumstances. The second bail
    judge dismissed the application for lack of jurisdiction, holding that a
    renewed application for bail based on change of circumstances could only be by
    review of this court.

[12]

In
    a decision dated October 31, 2013, Hoy A.C.J.O. directed a review of the applicants
    application by a full panel of this court, pursuant to s. 680 of the
Code
.
    Counsel for the applicant argued before her that the sentence for an offence of
    accessory after the fact to murder ranges from a conditional sentence to five
    years incarceration. Counsel further submitted that on these facts, the
    maximum possible sentence that could reasonably be imposed is three years. The
    Associate Chief Justice observed that if the applicant is given credit for her
    pre-trial custody at a rate of 1.5:1, the applicant will have served the equivalent
    of a five-year sentence by the time her trial commences. Hoy A.C.J.O. held that
    the applicants claim, while novel, had a reasonable prospect of success.

C.

DISCUSSION

[13]

Pursuant
    to s. 680 of the
Code
, the applicant seeks review of the detention
    order initially imposed by the bail judge and the dismissal of her second
    application by the second bail judge. The applicant attacks these decisions on
    effectively two grounds.
[1]

[14]

First,
    she submits that the second bail judge erred in law in finding that he lacked
    jurisdiction to review the application. Second, she contends that her continued
    detention is not warranted, considering the amount of time she has spent in
    jail and the sentence she faces if convicted. She also points to her current
    personal circumstances, which have lessened the risk that she will interfere
    with the administration of justice. These two sets of changes, she argues, are
    material changes in circumstance that justify her release pending trial.

[15]

I
    address these issues in turn.

(1)

The second bail application in Superior Court

[16]

Section
    522(1) of the
Code
provides that anyone charged with a s. 469 offence,
    which includes accessory after the fact to murder, may be granted judicial
    interim release only by a Superior court judge. Section 522(4) adds the
    following: An order made under this section is not subject to review, except
    as provided in section 680.

[17]

Section
    680 of the
Code
provides the legal mechanism for review, by the Court
    of Appeal, of an order of a Superior court judge that grants or refuses a
    judicial interim release order for a s. 469 offence.

[18]

In
R. v. Seti-Mayinga
, [2001] O.J. No. 6335 (S.C.), Campbell J, canvassed
    the jurisprudence of other provinces and concluded the following at paras. 27-
    30:

The authorities in other provinces, although perhaps divided,
    favour a purposive interpretation of s. 522(4) which permits a new hearing or
    motion to vary on the basis of changed circumstances.

From a practical point of view, it does not make administrative
    sense to funnel through the Court of Appeal, before trial, every variation in
    the terms of a bail order necessitated by changed circumstances. Changes in
    reporting conditions, changes in the identity of sureties or the form or
    quantum of their recognizances, changes in employment and similar matters are
    minor administrative issues that should not require the full panoply of the
    Court of Appeal machinery contemplated by s. 680.

It is not unusual for the circumstances of the accused or the
    sureties to change during the months or even longer between the release order
    and the trial. As the Newfoundland Court of Appeal pointed out in
R. v. T. (G.J.)
,
    the circumstances that give rise to the release are not necessarily static
    throughout the pretrial period. Changes in circumstances may give an entirely
    new complexion to the continued reasonableness of the release conditions, and
    it is difficult to think that Parliament intended to complicate or delay the
    opportunity to respond appropriately one way or the other, to changed circumstances.

As Doherty J.A. said in a different context in
R. v.
    Daniels

(1997), 35 O.R. 737, 119 C.C.C. (3d) 413
(Ont.
    C.A.), a fresh application based on a material change in circumstances makes
    more practical sense than does a full appeal by way of review. A purposive
    interpretation of the bail provisions suggests that a fresh hearing or motion
    to vary based on changed circumstances is preferable because it provides
    greater flexibility and greater access to judicial remedies for both the Crown
    and the accused, than a full blown appeal by way of review.

[19]

Recently,
    the Alberta Court of Appeal arrived at the same conclusion in the case of
R.
    v. Kuol
, 2013 ABCA 380.

The court stated the following, at para.
    10:

We favour the weight of the authorities from Ontario, Alberta,
    Nova Scotia and Manitoba referred to above and find that we, as a Court of
    Appeal, do have jurisdiction pursuant to s. 680 to consider applications for
    release of detention based solely on a change of circumstance.  However, we
    also think it best that such applications ordinarily be returned to the initial
    court for reconsideration.

[20]

After
    reviewing the relevant authorities, I am of the view that the second bail judge
    erred in dismissing the applicants application for lack of jurisdiction.

[21]

The
    relevant practice in Ontario can be summed up as follows:  Where an applicant
    is detained pursuant to a charge for an offence listed in s. 469 of the
Code
,
    the appropriate procedure for challenging the s. 515(11) denial of bail turns
    on the nature of the applicants grievance. Where the applicant disputes the
    correctness of a bail decision of a Superior Court of Justice or Court of
    Appeal judge, the proper course is to seek review by a court of appeal under s.
    680 of the
Code
:
R. v. Daniels
(1997), 35 O.R. (3d) 737
    (C.A.), at p. 746. Where an applicant concedes the validity of the bail
    decision but seeks a review on the basis of a change in circumstances, the
    normal course is to bring a second bail application in Superior Court:
R.
    v. Robinson
, 2009 ONCA 205, 95 O.R. (3d) 309, at para. 5;
R. v.
    Klymchuk
(2007), 220 C.C.C. (3d) 439 (Ont. S.C.), at pp. 447-48;
R. v.
    Saleh
(2007), 252 C.C.C. (3d) 521 (Ont. S.C.). This second avenue reflects
    the considerable common sense in returning to the originating court, creating
    an evidentiary record and obtaining the views of a judge of first instance on
    the impact of the new or changed information on the issue of interim release:
R.
    v. Boyle
, [2006] O.J. No. 5094 (C.A.), at para. 3.

[22]

The
    availability of this second procedure does not foreclose consideration of a
    change in circumstances on a s. 680 application, however: see
Daniels
,
    at p. 747;
Boyle
, at paras. 3-4. In other words, the Superior Court of
    Justice and the Court of Appeal have concurrent jurisdiction to decide whether
    there has been a material change of circumstances warranting judicial interim
    release.

[23]

In
    attributing exclusive jurisdiction to this court and dismissing the applicants
    bail application for lack of jurisdiction, OMarra J. erred. He stated that if
    there is to be a renewed application for bail based on change of circumstance,
    it will be by review of the Ontario Court of Appeal. As explained above, this
    misstates the law: both the Superior Court and Court of Appeal have jurisdiction
    to consider an application based on change in circumstance.

[24]

I
    will now address the substance of the application pursuant to the order of Hoy
    A.C.J.O. For the reasons below, I would grant the application.

(2)

A material change in circumstances

[25]

Courts
    have recognized that a material change in circumstances will warrant judicial
    interim release where, for example, in the bail pending appeal context,
    additional sureties become available,
R. v. Baltovich
(2000), 47 O.R.
    (3d) 761 (C.A), or where the applicant offers a new legal argument and
    rearticulates existing arguments in a more comprehensive form,
Daniels
,
supra
.

[26]

In
    my view, the assessment of whether a material change in circumstances exists in
    a particular case depends on the actual considerations that underpinned the
    first bail judges refusal of bail. In other words, the issue is whether the
    change in circumstances is relevantly material.
[2]

[27]

This
    application raises two competing principles: the liberty interest, and the need
    to maintain the integrity of the trial process.  In balancing these two
    principles, I am satisfied that based on the unique factual situation of this
    case, a release order can be fashioned to satisfy the secondary ground
    considerations.

[28]

Our
    society places a high value on the liberty of each individual, and the loss of
    that liberty should not be taken lightly. As noted by Iacobucci J. in dissent
    in
R. v. Hall
, 2002 SCC 64, [2002]
    3 S.C.R. 309,
at para 47:

At the heart of a free and democratic society is the liberty of
    its subjects. Liberty lost is never regained and can never be fully compensated
    for; therefore, where the potential exists for the loss of freedom for
even a day
, we, as a free and democratic society,
    must place the highest emphasis on ensuring that our system of justice
    minimizes the chances of an unwarranted denial of liberty.

[29]

The
    judicial interim release provisions of the
Code
strongly favor
    affording accused persons bail pending their trial: R.J. Sharpe and K. Roach,
The
    Charter of Rights and Freedoms
, 5th ed. (Toronto: Irwin Law, 2013), at p.
    291. [P]re-trial detention is extraordinary in our system of criminal
    justice,
R. v. Morales
, [1992] 3 S.C.R. 711, at p. 728, Lamer C.J.,
    and to pretend that pre-sentence imprisonment does not occasion a severe
    deprivation and that it is not punitive, would result in the triumph of form
    over substance:
R. v. McDonald
(1998), 40 O.R. (3d) 641 (C.A.), at p.
    658.

[30]

As
    Gonthier J. noted in dissent in
Morales
,
supra
, at p.
753:

[T]he purpose of a denial of bail is neither punishment, nor is
    it retribution or reform. Rather, it is better understood as a part of the
    process by which those aims of the law may eventually be achieved by
    safeguarding the proper functioning of the justice system. Far from obscuring
    the importance of liberty, a consideration of the administration of justice in
    these broader terms is necessary for the due recognition of the ways in which
    the administration of justice allows liberty to be properly respected.

[31]

An
    important countervailing principle, however, is the need to maintain the
    integrity of the trial process, by ensuring that witnesses are not deterred
    from participating in the trial process by intimidation and interference. In this
    case, an important aspect of the allegations against the applicant was her
    alleged attempt to intimidate and interfere with Crown witnesses.

[32]

With
    these observations in mind, I now turn to the material changes in this case
    that the applicant identifies as warranting her release.

(a)

Changed Circumstances that Reduce the Need for a Surety

[33]

First,
    the applicant points to a set of significant changes in the applicants
    personal circumstances that reduce the risk of her interfering with the
    administration of justice, and consequently reduce the need for a surety.

[34]

One
    aspect of this is the applicants proposed living arrangements if she is
    released. She intends to reside in community housing in York Region or Brampton
    and to complete her studies in early childhood education at Seneca College in
    North York. While waiting to be accepted into community housing, she could
    reside with her mother in Scarborough, although that is not her preference, or
    in a womens shelter in Toronto. The witnesses resided in a building in
    Scarborough. The applicant would not be returning there.

[35]

Counsel
    also advised the court that the applicant no longer has any relationship with
    the co-accused.

[36]

The
    applicant agrees to abide by all terms that require reporting, supervision and
    compliance with all bail terms and not to have any communication with the
    witnesses. She has served an extended period in Vanier Institute and in her
    affidavit points to that circumstance as a motivating factor for her to abide
    strictly by any bail terms that may be imposed.

[37]

In
R. v. Baltovich
(1991), 6 O.R. (3d) 11, a previous s. 680 application
    before this court where bail had been initially denied on the secondary ground,
    Doherty J.A. acknowledged, at p. 14, that the time an accused has spent in
    custody awaiting trial diminishes the chance that the accused will interfere
    with witnesses and evidence, and is relevant to these concerns:

In our view, the chances that the
    applicant will interfere with witnesses or evidence, if released, have
    substantially diminished over the last year. He will obviously be aware if
    released that he will be the subject of police attention and he must know from
    prior experience that any effort to contact witnesses or to deal with potential
    evidence can operate to his detriment. I am sure his counsel will impress that
    point on him.

Similar considerations apply in the instant case.

[38]

There
    have now been material changes in the applicants circumstances since she was
    first arrested two and a half years ago that make it more likely that she will,
    in her own best interest, abide by her bail terms and not engage in activity
    contrary to the public interest and the due administration of justice, without
    the involvement of a surety.

(b)

The Post-Bail Hearing Trial Delay

[39]

Second,
    the applicant argues that the passage of time and the probable outcome of
    sentencing together constitute a material change in circumstances entitling her
    to changed bail conditions on the facts of this case.

[40]

Although
    the bail judge anticipated that the applicants trial might not be held before
    September 2014, it is now not scheduled and will not be held before May 2015,
    at the earliest.

[41]

The
    applicant was arrested on November 10, 2011 and has been held in custody since
    that date. Crown counsel agreed at the review hearing that if the applicant
    were to plead guilty now, she would most likely be released on the basis of
    time served because the appropriate sentence is three years. I note that if she
    were released after pleading guilty, she would not be under any supervision.

[42]

The
    result is that  counting pre-trial custody on a 1 to 1 ratio  the applicant
    will have served the sentence she is likely to receive by November 2014, long
    before she will go to trial. If a 1.5 to 1 ratio (which Crown Counsel conceded
    was appropriate) were applied to the applicants pre-trial custody, she will
    have served a sentence at the upper limit of the sentencing range well before
    her trial commences in May 2015. Furthermore, as a result of her co-accuseds
    imminent application for severance of his murder charges, it is not clear that
    her trial will commence even then.

[43]

In
    my view, this is a material change in circumstances that, coupled with the
    reduced risks that the appellant poses of interfering with potential witnesses
    and thus obstructing justice, favours granting judicial interim release. The
    severance of the applicants trial from her former co-accuseds trial, and the
    change in the anticipated date of trial, occurred after the bail judge rendered
    his decision. The amount of time the applicant will now serve in pretrial
    custody in excess of her anticipated sentence if convicted has increased
    significantly. As stated by Hill J. in
R. v. White
, 2010 ONSC 3164, at
    para. 10:

[P]ublic confidence in the administration of justice, and in
    particular in the judicial interim release regime, would be substantially
    eroded by pre-trial incarceration of presumptively innocent individuals to the
    equivalency or beyond the term of what would be a fit sentence if convicted.

D.

Conclusion

[44]

I am satisfied that the applicant has
    established a material change in circumstances. In the circumstances, a
    judicial interim release can be fashioned to satisfy any public safety concerns
    that may have existed at the time of her initial detention. Accordingly, I
    would order the applicant released on the terms set out in Schedule A.

Released: KF April 4, 2014

M. Tulloch J.A.

I agree. K. Feldman
    J.A.

I agree. P. Lauwers
    J.A.

Schedule A

The applicant is:

·

ORDERED RELEASED
on
    her own recognizance in the amount of $500, without deposit, without surety,
    and with conditions;

CONDITIONS OF RELEASE:

·

Attend the Superior Court of
    Justice at 361 University Avenue, Toronto, as required;

·

Keep the peace and be of good
    behaviour;

·

Advise the Registrar of the
    Superior Court of Justice, 361 University Avenue, Toronto, M5G 1Y1, Room 241,
    of any change of address IN WRITING within twenty-four hours of the change;

Additional conditions:

·

Remain in the Province of Ontario;

·

Report to the Toronto Bail
    Program, Room 162, Old City Hall, 160 Queen Street West, Toronto, forthwith
    upon release (between 8:00 a.m. and 4:00 p.m.) and thereafter as required by
    the Toronto Bail Program.

·

In addition to any
    reporting required by the Toronto Bail Program, report thereafter to the
    Reporting Centre, 2440 Lawrence Avenue East, Toronto, M1P 2R5 (416-808-5700),
    and thereafter twice weekly each Monday and Friday, except statutory holidays;

·

Deposit her passport
    with the officer-in-charge, Officer Idsinga #6830, or designate, Toronto Police
    Service Homicide Squad, 40 College Street, Toronto, within 48 hours of release;

·

Reside at an address
    approved in advance, in writing, by the Toronto Bail Program, not change
    addresses without the approval of the Bail Program, and advise the reporting
    officer of any change of address in writing within twenty-four hours in advance
    of the change;

·

Seek and maintain
    gainful employment or continue to attend school;

·

Observe a curfew from 11 p.m. to 6
    a.m., 7 days a week;

·

Refrain from association or
    communication with: Kevin Williams; Guyvin July; Deah Reid (nee Huff); Barbara
    Marten; Nadine Keen; Mark Moore; Hyacinth Moore; Naseem Khan; Tafra Neil;
    Robert Hurdon; Neil Costello; Mark Costello; Shivonne Clarke; and any person
    known to the applicant as a member of the following families of the victims:
    the Spence family; the Facey family; the James family; and the Cole family.

·

Refrain from possessing any
    firearm, cross-bow, prohibited weapon, restricted weapon, prohibited device,
    ammunition or explosive substance and surrender to a peace officer, a firearms
    officer, or a chief firearms officer any such items currently in the
    applicants possession, together with every authorization, licence, and
    registration certificate relating thereto and held by the applicant.

·

Keep 500 metres away from: 370
    McCowan; 24 Hapley Ave; Greenbrae Circuit; and 50 Tuxedo Ave.

·

Answer the front door of residence
    upon the request of a police officer.

[1]
The applicant, through her counsel, abandoned the argument in her factum that
    her prolonged detention constitutes cruel and unusual punishment within the
    meaning of s. 12 of the
Charter of Rights and Freedoms
.

[2]

The Crown conceded from the first bail application
    that the applicant was releasable with appropriate supervision.

There are no primary or tertiary ground concerns.


COURT OF APPEAL FOR ONTARIO

CITATION: R & G Draper Farms (Keswick) Ltd. v. 1758691
    Ontario Inc.

(ATV Farms), 2014 ONCA 278

DATE: 20140408

DOCKET: C57804

Cronk, Gillese and Strathy JJ.A.

BETWEEN

R & G Draper Farms (Keswick) Ltd.

Appellant

and

1758691 Ontario Inc. c.o.b. ATV Farms

Respondent

Morris Manning, Q.C., for the appellant

J.F. Lalonde, for the respondent

Heard: April 1, 2014

On appeal from the order of Justice W. Matheson of the
    Superior Court of Justice, dated September 13, 2013.

ENDORSEMENT

I.        Introduction

[1]

This litigation arose out of disputes concerning the purchase and sale
    of carrots between two Ontario-based farming concerns.  At the relevant times,
    both parties were members of the Fruit and Vegetable Dispute Resolution
    Corporation (the DRC).  They submitted their disputes to the DRC for
    resolution in accordance with the DRCs mediation and arbitration rules.  By
    order dated December 20, 2011, the arbitrator issued his award and ordered the
    appellant, R & G Draper Farms (Keswick) Ltd. (R & G), to pay
    $58,507.42 to the respondent, 1758691 Ontario Inc. c.o.b. as ATV Farms (ATV).

[2]

R & G applied to the Superior Court of Justice to set aside the
    arbitral award on jurisdictional and other grounds.  By order dated September
    13, 2013, the application judge dismissed the application.

[3]

R & G appeals.  At the conclusion of oral argument on behalf of R
    & G, we dismissed the appeal, with reasons to follow.  These are those
    reasons.

II.       Issues

[4]

R & G advanced four grounds of appeal.  It argued that the
    application judge erred: (1) by holding that the
Arbitration Act, 1991
,
    S.O. 1991, c. 17 (the Act), rather than the
International Commercial
    Arbitration Act
, R.S.O. 1990, c. I.9 (the ICCA), applied to the
    arbitration conducted under the DRC process, with the result that R & Gs
    challenge of the arbitral award was out of time; (2) by failing to extend the
    applicable 30-day time period provided for under the Act; (3) by holding that R
    & G had waived ATVs breach of the DRC rules arising from ATVs inclusion of
    confidential mediation documents in the materials it delivered to the
    arbitrator; and (4) by failing to hold that the arbitrator had no jurisdiction
    to deal with the disputed pricing for the carrots.

III.      Discussion

(1)

Application of the
Arbitration Act

[5]

The appellant accepts that the threshold issue on appeal is whether the
    application judge erred by concluding that the Act governed the conduct of the
    arbitration.  The issue is important because s. 47 of the Act provides for a
    period of 30 days within which a party to an arbitration may appeal or seek to
    set aside or vary the arbitral award.  In contrast, the ICAA provides for a three-month
    time period within which to challenge an arbitral award governed by that
    statute.  There is no dispute that R & Gs application for a declaration
    setting aside the arbitral award was not issued within the 30-day time period
    under the Act, although it was issued within the three-month time period set
    out under the ICAA.

[6]

The application judge held that the Act, rather than the ICAA, applied
    to the arbitration in this case.  The core of her reasoning is set out at
    paras. 43-45 and 48 of her reasons:

[43]    There is no question that the parties both have their
    places of business in Ontario, and have not expressly agreed that the
    subject-matter of the arbitration relates to more than one country.  Nor was
    the place of arbitration outside Ontario.

[44]    Here, the commercial relationship at issue was between
    two Ontario businesses.  Draper Farms sold carrots to ATV Farms to be made into
    carrot chunks, and bought carrot chunks from ATV Farms.  Draper Farms bought
    the carrot chunks for sale to a California purchaser; however, the California
    company was the customer of Draper Farms, not ATV Farms.  The California
    customer was not a party to the purchase and sale agreements that were the
    subject of the Award.  Nor did ATV Farms ship directly to the California
    company; Draper Farms took delivery of the carrot chunks at issue.

[45]    While the involvement of a California company forms
    part of the backdrop to the transactions in dispute in the arbitration, Ontario
    remains the place where the obligations of the commercial relationship between
    ATV Farms and Draper Farms were to be performed.  Ontario also remains the
    place with which the subject-matter of the dispute is most closely connected.
    I therefore conclude that in this case the ICAA does not apply.

.

[48]    Draper Farms also points to the DRCs own description
    of its inception, arising from NAFTA, and the international nature of its
    mandate.  There is no doubt that there is an international aspect to the
    inception and mandate of the DRC.  However, the ICAA definition of
    international arbitration does not turn on the reasons for or mandate of the
    organization administering the arbitration process.  It focuses on the location
    of the place of business of the parties, the location of the actual
    arbitration, the place where the obligations are performed and the place the
    subject matter of the arbitration is connected with.  Here, all of those
    locations/places are Ontario.

[7]

We agree with the application judges conclusion that the Act applies in
    this case and with her reasoning in support of that conclusion.

[8]

By reason of s. 2(1) of the Act, the Act applies to an arbitration
    conducted under an arbitration agreement unless the application of the Act is
    excluded by law, or the ICAA applies to the arbitration.  In this case, the
    application of the Act is not excluded by any law and, in our view, the ICAA
    did not apply to the arbitration.  The ICAA is directed at international
    commercial arbitrations.  Under the ICAA, an arbitration is international if:

(a)   the
    parties to an arbitration agreement have, at the time of the conclusion of that
    agreement, their places of business in different countries; or

(b)   one of
    the following places is situated outside the country in which the parties have
    their places of business:

(i)      the
    place of arbitration if determined in, or pursuant to, the arbitration
    agreement,

(ii)     any
    place where a substantial part of the obligations of the commercial
    relationship is to be performed or the place with which the subject-matter of
    the

dispute is most closely
    connected; or

(iii)    the

parties

have

expressly agreed that

the

subject-matter

of

the
    arbitration agreement relates to more than one country.

[9]

None of these prerequisites is satisfied in this case.  To the contrary:

(a)   both
    parties have their place of business in Ontario (Keswick and Bradford);

(b)   the carrots were grown by R & G in Ontario;

(c)   the carrots were sold by R & G to ATV;

(d)   ATV
    processed the carrots, and resold them to R & G in Ontario;

(e)   the dispute was arbitrated in Ontario; and

(f)    there
    is no express agreement between the parties that the subject-matter of the
    arbitration relates to more than one country.

[10]

The arbitration,
    therefore, was not an international arbitration within the meaning of the
    ICAA.  As a result, the ICAA did not apply to the arbitration.

[11]

Relying on
Freshway Specialty Foods Inc. v. Fruit and Vegetable Dispute Resolution
    Corp.
(2006), 2 O.A.C. 385 (Div. Ct.), R & G argues before this court,
    as it did before the application judge, that Ontario courts have recognized
    that the ICAA applies to DRC arbitrations.  There are three difficulties with
    this argument.

[12]

First,
Freshway
is distinguishable from this case.  As the application judge observed,
Freshway
did not involve domestic disputants.  Rather, the disputing parties were
    located in British Columbia and Arizona.  Thus, at the time of the arbitration,
    the parties places of business were in different countries.  This was
    sufficient to render the arbitration international in nature under the terms
    of the ICAA, thus triggering the application of that statute.  In the case at
    bar, as we have said, the parties places of business are both in Ontario.

[13]

Second,
    there was evidence before the application judge that the DRC rules were drafted
    with the intent that either the Act or the ICAA could apply to an arbitration
    between DRC members, depending on the specific circumstances of the relevant
    dispute.  This ensures that where the dispute truly involves an international
    commercial matter, the ICAA will govern.  Conversely, there will be cases
    where, as here, the heart of the dispute is domestic in nature, involving
    Ontario-based disputants.  In the latter circumstances, the Act will govern.

[14]

Finally,
    s. 2(1) of the Act makes it clear that the application of that statute and the
    ICAA are mutually exclusive.

[15]

We therefore
    conclude that the application judge did not err in holding that the Act applied
    to the arbitration at issue in this case.  Consequently, the 30-day time limit
    established by the Act for an appeal of an arbitral award or an application to
    set aside or vary an arbitral award was operative, and R & Gs application
    was out of time.

(2)

Denial of Extension of Section 47 Time Limit

[16]

R & G
    next contends that if, as we conclude, the Act applied to the arbitration at
    issue here, the application judge erred by failing to exercise her inherent
    discretion to extend the 30-day time period applicable under s. 47 of the Act
    to a challenge of an arbitral award.

[17]

The
    application judge held that she lacked jurisdiction to extend the 30-day time
    limit under the Act.  We agree.

[18]

R & G
    was unable to point to any authority in support of its assertion that the
    application judge had the authority, in the exercise of her discretion, to
    extend the 30-day time period set out under s. 47 of the Act.

[19]

Nor, in
    our view, does the Act contemplate a judicial discretion to extend the s. 47
    time period.  Under s. 37 of the Act, an arbitral award binds the parties to
    the arbitration unless set aside or varied under s. 45 or 46 of the Act.
    Further, under s. 50(3) of the Act, an arbitral award becomes final within 30
    days unless otherwise set aside or varied.  The Act makes no express provision
    for the extension of the 30-day time period under s. 47.  And s. 50(3) is
    inconsistent with the notion of a residual discretion to extend the 30-day time
    period that governs an application to set aside or vary an arbitral award.

[20]

Finally,
    the Act does contemplate relaxation of time periods stipulated under the Act,
    in certain circumstances: see
e.g.
, s. 39 of the Act.  However, no
    such provision exists under the Act in respect of the s. 47 time period.  This
    also tells against the notion of a residual judicial discretion to extend the
    30-day time period established under s. 47 of the Act.

[21]

In light
    of these considerations, we conclude that the application judge did not err in
    declining to extend the 30-day time period established by s. 47 of the Act.

(3)

Other Grounds of Appeal

[22]

In light
    of our conclusion that the Act and, hence, s. 47 of the Act, applied to the
    arbitration in this case, it is unnecessary to address R & Gs other
    grounds of appeal.  R & Gs challenge to the arbitral award, not having
    been brought within the 30 days provided for under s. 47 of the Act, was
    time-barred.

IV.     Disposition

[23]

For these
    reasons, the appeal is dismissed.  ATV is entitled to its costs of the appeal,
    fixed in the total amount of $7,825, inclusive of disbursements and all
    applicable taxes.

E.A. Cronk J.A.

E.E. Gillese J.A.

G.R. Strathy J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Racco v. Racco, 2014 ONCA 330

DATE: 20140428

DOCKET: C56694

Gillese, Epstein and Benotto JJ.A.

BETWEEN

Josephine Racco

Applicant (Respondent)

and

Peter Racco

Respondent (Appellant)

Jeffery Wilson and Farrah
    Hudani, for the appellant

Geoffrey Wells and
    Christine Ashbourne, for the respondent

Heard: February 6, 2014

On appeal from the
    judgment of Justice John C. Murray of the Superior Court of Justice, dated
    January 31, 2013.

Benotto J.A.:

[1]

This appeal raises issues in connection with an award of lump sum
    spousal support. For the reasons that follow, I would dismiss the appeal.

Facts

[2]

The parties were married on June 24, 1989. They separated in 2011. They
    have two children who were teenagers at the time of trial. When the children
    were young, the respondent was their primary caregiver.

[3]

During their marriage the parties developed a very successful real
    estate business in the Oakville-Burlington area. The couple was associated with
    Royal LePage and marketed themselves as a team. In the later years of marriage,
    Team Racco generated annual gross real estate commissions well in excess of a
    million dollars. For the three years before separation, the parties combined gross
    commissions and net incomes reported on line 150 of their tax returns totalled:

Commissions

Line 150

2008:

$1,702,257

$527,211

2009:

$1,306,321

$377,286

2010:

$1,651,961

$319,696

[4]

The parties also jointly owned a management company which, at the time
    of separation, owned seven properties with a net worth of over a million
    dollars. Their business success allowed them and their children to enjoy a
    luxurious lifestyle.

[5]

Early in 2011, the appellant was charged with the sexual assault of a
    female employee. The parties separated shortly thereafter. The appellant immediately
    took steps to exclude the respondent from the home and the business. He changed
    the locks on the matrimonial home, redirected and cancelled their joint credit
    card, diverted all their joint commission cheques to himself, started his own
    real estate business and locked the respondent  out of the client data base. The
    appellant paid no child or spousal support for several months.

[6]

On May 4, 2011, the respondent commenced an application for divorce and
    corollary relief. The record reveals a high conflict divorce.

[7]

The appellants criminal trial for sexual assault in the fall of 2011
    was very public. The press attended and covered it in the local papers and
    online. He was convicted in October 2011.

[8]

Team Racco no longer existed. In November 2011, Royal LePage ended its
    association with the appellant. Another company hired him in January 2012, but
    the impact of the conviction and the publicity remained an impediment to his
    financial success.

[9]

The respondent did not return to real estate. She had been shut out of
    the business by the appellant. She was humiliated and devastated by the criminal
    proceedings. These circumstances made continuing in the real estate business difficult,
    if not impossible. She testified that she did not enjoy real estate in any
    event, and decided to devote her time to building a womens clothing business
    that she had previously operated as a sideline.

[10]

The
    parties settled all issues relating to their property and children. They went
    to trial in November 2012 on the issue of the respondents entitlement to
    spousal support.

The Trial Judgment

[11]

There
    was little factual dispute at trial. The trial judge found that after
    separation, the appellant had unilaterally terminated the couples partnership
    and kept for himself the 2011 real estate commissions of $663,000. The trial
    judge said of the appellant:

It is not disputed that the commission income earned by the
    parties in 2011, in whole or in large part, was diverted to the [appellant] for
    his use and [he] did not treat the [respondent] fairly on the termination of
    the partnership.

[12]

The
    trial judge found that the appellant will likely be less successful financially
    in the future as a result of his own criminal misconduct and also his unilateral
    termination of the partnership with the respondent. The trial judge found that
    as a practical matter, imputing significant income to the appellant for
    support purposes would be futile and thus a lump sum payment was the
    appropriate response to this practical reality. He imputed income after
    expenses to the appellant in the amount of $400,000 for 2011. The parties had
    previously agreed that the appellants income for child support purposes would
    be $150,000 from 2012 onwards. The trial judge found that had it not been for
    the criminal conduct of the appellant, his income for 2012 would have been
    substantially in excess of $150,000.

[13]

With
    respect to the respondents income, the trial judge found that she had elected
    to leave a lucrative career in favour of one that was not yet profitable and
    was thus not entitled to ongoing periodic support. She was, however, entitled
    to spousal support for a period (which he termed transitional) following the
    termination of the partnership by the appellant. The trial judge stated:

Her income loss, and the immediate change in her standard of
    living, was a direct consequence of the termination of the partnership.  The
    termination of the partnership by the [appellant] was a direct consequence of
    the marriage breakdown.

I agree that the [appellant] had an obligation to provide to
    the [respondent] spousal support immediately after termination of the partnership
    in order to provide her with a replacement income for a transitional period
    during which she could have explored other opportunities

[14]

After
    considering these circumstances, the trial judge awarded lump sum support in
    the amount of $200,000.

issues

[15]

The
    issues raised in this appeal are as follows:

1.

Was the
    respondent entitled to spousal support?

2.

Should the award
    have been a lump sum?

3.

Was the quantum
    of the lump sum excessive?

4.

What is the
    nature of transitional support?

[16]

The
    appellant sought to admit fresh evidence on the appeal showing that, after
    trial, his income did not exceed $150,000 and that the respondent returned to
    the real estate business.

[17]

I
    will begin with the fresh evidence application and then consider the four issues
    raised.

Fresh Evidence Application

[18]

The
    principles governing the admissibility of fresh evidence on appeal are outlined
    in
R. v. Palmer
, [1980] 1 S.C.R. 759. The Palmer test requires the
    applicant to satisfy four criteria: (i) the evidence could not have been
    adduced at trial; (ii) the evidence must be relevant in that it bears on a
    decisive or potentially decisive issue; (iii) the evidence must be reasonably
    capable of belief; and (iv) the evidence must be such that, if believed, it may
    have affected the result at trial.

[19]

The
    fourth criterion of
Palmer
is not satisfied. The evidence is not such
    that the result at trial would have been affected. If the respondent returned
    to real estate and earned more than anticipated, it would not matter because
    she was not awarded ongoing support. The appellants income after trial, as set
    out in the fresh evidence application, is in the range anticipated by the trial
    judge. Thus, this evidence would not have affected the result.

[20]

I
    would dismiss the fresh evidence application.

The Issues

[21]

The
    issues in this appeal must be considered in the context of the statutory and
    jurisprudential framework for spousal support.

[22]

The
Divorce Act
R.S.C 1985, c.3 (2
nd
Supp.), provides that an
    order for support should recognize, among other things, the advantages and
    disadvantages arising from the marriage or its breakdown and relieve any
    economic hardship of the spouses arising from the breakdown of the marriage.
    The objectives are set out in section 15.2(6):

An order made under subsection (1) or an interim order under
    subsection (2) that provides for the support of a spouse should

(a) recognize any economic advantages or disadvantages to
    the spouses arising from the marriage or its breakdown;

(b) apportion between the spouses any financial consequences
    arising from the care of any child of the marriage over and above any
    obligation for the support of any child of the marriage;

(c) relieve any economic hardship of the spouses arising
    from the breakdown of the marriage; and

(d) in so far as practicable, promote the economic
    self-sufficiency of each spouse within a reasonable period of time.

[23]

The
    Supreme Court of Canada has directed that these four objectives must be
    considered together in establishing an equitable sharing of the economic
    consequences of marriage breakdown. The courts have been repeatedly urged to
    not concentrate on one factor to the exclusion of the others. The factors are
    cumulative, not alternative.

[24]

In
Moge v. Moge,
[1992] 3 S.C.R. 813, the court established the
    compensatory model of support. This was followed by
Bracklow v. Bracklow,
[1999] 1 S.C.R. 420, which formally recognized compensatory, non-compensatory,
    and contractual entitlements to support. Generally speaking, compensatory
    support focuses on the advantages and disadvantages flowing from the marriage
    or its breakdown, while non-compensatory support focuses on need.

[25]

The
    application of these principles makes the determination of spousal support
    highly individual and discretionary. As Professors Rogerson and Thompson state
    in their introduction to the
Spousal
    Support Advisory Guidelines
(Ottawa: Department of Justice, 2008)
    (SSAG):

Bracklow
emphasized the highly discretionary,
    individualized nature of spousal support decisions.  The Court was clear that
    the
Divorce Act
endorses no single theory of spousal support and must
    retain flexibility to allow judges to respond appropriately to the diverse
    forms that marital relationships can take. The Court presented spousal support
    determinations as first and foremost exercises of discretion by trial judges
    who were required to balance the multiple support objectives and factors
    under the
Divorce Act
and apply them in the context of the facts of
    particular cases.

[26]

With this background,  I turn to the
    specific issues in the appeal.

(1)

Was the respondent entitled to spousal support?

[27]

The
    trial judge found that the respondent was not entitled to ongoing spousal support
    because she was capable of achieving self-sufficiency at some point in the
    future. However, he found that she had experienced economic disadvantage as a
    result of the marriage and its breakdown and economic hardship that arose from
    the breakdown of the marriage. The trial judge considered the following
    evidence:

·

The parties had enjoyed a lavish lifestyle;

·

Their business produced annual gross commissions of over one
    million dollars for a  number of years;

·

The appellant shut the respondent out of the business after
    separation;

·

The appellant paid nothing to the respondent for 8 months after
    the separation when she was most vulnerable financially;

·

Thereafter the appellant paid interim support which included both
    child and spousal support on a without prejudice basis;

·

The appellant unilaterally terminated the partnership, unfairly
    deprived the respondent of her share of the proceeds, repudiated the
    respondents efforts to find a way to continue the business and locked her out
    of the data base of clients;

·

The appellant unfairly took for himself $633,000 in commission
    which should have been shared; and

·

The appellant filed an income tax return erroneously showing that
    the respondent received $152,000.

[28]

On
    the record, it was open to the trial judge to find an entitlement to spousal support
    which would include retroactive support, non-compensatory and compensatory
    support.

[29]

The
    appellant argues that the trial judge incorrectly considered the appellants misconduct
    in awarding support. Section 15.2(5) of the
Divorce Act
requires that
    the court not take into consideration any misconduct of a spouse in relation
    to the marriage. The misconduct referred to in the section is specified as
    misconduct in relation to the marriage. It does not preclude a court from
    considering relevant misconduct outside the marriage. Consequently, I see no
    error in the trial judge considering the appellants criminal conduct which led
    to economic hardship for the respondent. By referring to the appellants
    conduct, the trial judge did not contravene section 15.2(5).

(2)

Should the award have been a lump sum?

[30]

The
    trial judge was required to fashion an appropriate award of spousal support
    within the unique circumstances of this case. He balanced the support
    objectives with a view to the self-sufficiency of the respondent. The award of
    support included elements of both compensatory support for the economic disadvantage
    suffered by the respondent as a result of the marriage and its breakdown, and
    non-compensatory support as a result of the economic hardship arising from the
    breakdown of the marriage

[31]

This
    was an appropriate case for a lump sum payment. The appellant has an ability to
    pay. There was a high level of animosity between the parties, a history of
    non-payment by the appellant, the possibility that the appellants financial
    situation would continue to be precarious, the desirability of terminating personal
    contact, the need to effect a retroactive award of support and the need to provide
    capital to the respondent. These factors support a lump sum award. It was for
    the trial judge to consider all of them and exercise discretion in addressing
    the individual circumstances of the parties. This was confirmed in
Davis v.
    Crawford,
2011 ONCA 294, 95 R.F.L. (6th) 257, at paragraph 69:

In the end, it is for the presiding judge to consider the
    factors relevant to making a spousal support award on the facts of the
    particular case and to exercise his or her discretion in determining whether a
    lump sump award is appropriate and the appropriate quantum of such an award.

[32]

On
    the record, the trial judge was fully justified in exercising his discretion
    and ordering a lump sum payment.

(3)

Was the quantum of support excessive?

[33]

The
    appellant submits that the quantum of support cannot stand because the trial
    judge gave no indication of how he arrived at the amount. In addition, the
    appellant submits that the amount is excessive.

[34]

The
    appellant submits that the trial judges reasons are deficient because he did
    not indicate the amount of income that he was attributing to the parties for
    the purpose of calculating spousal support, or indicate the duration of the
    support that he called transitional. Although the SSAG were argued, he did not
    refer to them.

[35]

It
    would have been preferable had the trial judge referred to these matters in his
    reasons. However, the reasons demonstrate that he considered the objectives of
    section 15 of the
Divorce Act
. The trial judge did not misapprehend
    the evidence or commit an error in principle: see
Hickey v. Hickey
[1999]
    2 S.C.R. 518. Deference is therefore accorded to the trial judge when, as here,
    there is a clear apprehension of the evidence, an identification of the
    objectives of the support award and a balancing of the factors supporting the
    award.

[36]

I
    do not accept that the spousal support order is so high it warrants
    interference. The respondents share of diverted commissions alone would exceed
    $300,000. Even assuming the highest tax rate, the respondent would have received
    $150,000. She would also have been entitled to a consideration of the other
    elements of economic loss suffered.

[37]

The
    amount can also be tested against the SSAG. The appellant argued that, on the
    basis of income for the appellant of $400,000 and the respondent of $50,000, a
    suggested lump sum support would be approximately $12,000 to $55,000. This
    however, was based on a one-year term. The appellants submissions that the
    quantum of the lump sum should be measured against a one-year term of support
    is not supported by the evidence or by the objectives of the
Divorce Act
.
    During the first year after the separation, the respondent could not have realistically
    achieved self-sufficiency: she moved homes, was prevented from working in the
    business, was involved in matrimonial litigation and subjected to the
    humiliation of the publicity of the criminal trial. I note that the SSAG
    suggest a lump sum payment of between $180,000 and $220,000 for a term of four
    years.

(4)

What is the nature of Transitional Support?

[38]

I
    turn now to address the trial judges description of the award as transitional
    support. In my view, this description does not reflect what the trial judge
    actually awarded. For that reason, I address the concept of transitional
    support and its connection to limited-term support.

[39]

Transitional
    support is not a category of support. It is a word that is sometimes used to
    describe a spousal support award that is for a brief period of time, in other
    words, a short limited-term support award. It was the word transitional that
    appears to underlie the appellants submission that the amount of the award was
    excessive. Since the  phrase transitional support is vernacular rather than a
    recognized legal term, it is generally not advisable to use it.

[40]

A
    limited-term support award is generally designed to enable the recipient, after
    a short term marriage, to either achieve self-sufficiency or adjust to a lower
    standard of living. According to
Moge
, limited-term support should be
    rarely awarded in marriages of long duration. Where limited-term support is
    awarded after a long term marriage, particularly one with children, the term
    must be long enough to satisfy the objectives of the
Divorce
Act.

[41]

In
Fisher v. Fisher
2008 ONCA 11,

the parties had been married for 19 years and had no children. At the time
    of separation, the wife was 41 and the husband was 42. The trial judge made a
    step-down support order which provided support at decreasing amounts for three
    years followed by a review, if requested. Since the wife had received interim
    support, the total term of support was four years. This court set aside the
    trial award and substituted a support order for an increased amount and for a
    term of seven years, without the possibility of a review. Although the marriage
    was lengthy, the court considered that after a period of seven years, the wife,
    who was still young, would either earn a higher income or adapt to a different
    lifestyle.

[42]

The
    SSAG provide lump sum calculations for limited-term support of up to four
    years. In
Fisher,
the
award
    was for seven years. Here the term of support must recognize  a long-term
    marriage, with dependent children.

Conclusion

[43]

The
    trial judges reasons, read as a whole, in the context of the evidence before
    him, support the conclusion that the lump sum award incorporated elements of
    compensatory, non-compensatory, and retroactive support. This accorded with the
    principles mandated by section 15 of the
Divorce Act
and
    jurisprudential precedent.

[44]

The
    principles articulated in the Supreme Court of Canada in connection with the
Divorce
    Act
provide a framework within which equitable support awards are to be
    made. Although the SSAG offer a certain level of predictability and consistency
    once the basis for entitlement has been established, they are advisory only. The
    court cannot lose sight of the individual circumstances of a case in
    determining both entitlement and quantum under section 15 of the
Divorce
    Act
.

[45]

This
    was a marriage of long duration. The parties lived a lavish lifestyle. Together
    they built a successful business. The consequences of the appellants conduct ended
    the financial success of the business, and disrupted the respondents ability
    to support herself financially.

[46]

The
    reasons of the trial judge make it clear that he considered these factors in
    arriving at an award which recognized the advantages and disadvantages arising
    from the marriage and its breakdown as well as the economic hardship arising
    from the breakdown of the marriage.

[47]

I
    see no basis on which to interfere with the $200,000 lump sum payment to the
    respondent ordered by the trial judge.

[48]

The
    appellant has also appealed the trial judges award of costs. In light of these
    reasons, there is no basis to interfere with the award of costs.

DISPOSITION

[49]

I
    would dismiss the appeal with costs payable to the respondent in the amount of
    $15,000, inclusive of disbursements and taxes.

M.L. Benotto J.A.

I agree E.E. Gillese
    J.A.

I agree Gloria
    Epstein J.A.

Released: April 28, 2014


COURT OF APPEAL FOR ONTARIO

CITATION:
    Raposo v. Dasilva, 2014 ONCA 263

DATE: 20140403

DOCKET: M43231 (C57274)

Cronk, Pepall and Tulloch JJ.A.

BETWEEN

Jose Manuel Raposo

Plaintiff

(Moving Party)

and

Natalie Dasilva

Defendant

(Responding Party)

David S. Altshuller, for the moving party

Andreas G. Seibert, for the responding party

Heard and released orally: March 31, 2014

On review of the order of a single judge (in chambers),
    of the Court of Appeal for Ontario, dated December 9, 2013.

ENDORSEMENT

[1]

The moving party, Jose Manuel Raposo, moves to set aside the chambers order
    of Rosenberg J.A. of this court, dated December 9, 2013, declining to set aside
    the Deputy Registrars dismissal of this appeal for delay and to extend the
    time for perfecting the appeal from the June 3, 2013 order of Stinson J. of the
    Superior Court of Justice.

[2]

Justice Rosenberg denied Mr. Raposos motion on the basis that there is
    no merit to the proposed appeal.  He held that Mr. Raposos pleading fails to
    give rise to an actionable claim for mental distress damages in respect of
    either of the incidents complained of in the statement of claim.

[3]

For the reasons expressed by him, we agree with Rosenberg J.A.s
    assessment of the merits of the proposed appeal and with his conclusion that
    Mr. Raposos pleading fails to give rise to a reasonable cause of action in
    respect of the matters pleaded.

[4]

Mr. Raposo argues that Rosenberg J.A. erred by treating the merits of
    the appeal as the determinative factor on the test whether to set aside the
    Deputy Registrars dismissal order and by failing to balance all the pertinent
    factors in determining whether to set aside that order.

[5]

We disagree.

[6]

In respect of the merits of the appeal  a relevant and necessary
    consideration  Rosenberg J.A. concluded that Mr. Raposos pleading fails to
    give rise to any reasonable cause of action.  In our view, his reasons indicate
    that he balanced all the relevant factors and essentially concluded that, no
    merit to the appeal having been demonstrated, the interests of justice do not warrant
    the discretionary relief sought in this case.

[7]

We see no error in this conclusion.  Indeed, we agree with it.  It is
    not necessary to go beyond the pleading in this case to determine this matter.
    Considering only Mr. Raposos statement of claim, no reasonable cause of action
    having been pleaded, there is no prospect that this proposed appeal could succeed.
    We note, in this regard, that the moving party was unable to point to any
    judicial authority in support of his contention that the tort of intentional
    infliction of mental suffering can be grounded on an alleged omission, rather
    than an intentional act or statement, by the defendant. Nor has he identified
    any actionable wrong by the defendant to support his claim for mental distress
    damages.

[8]

In all these circumstances, the interests of justice tell against, not
    in favour of, granting discretionary relief from the Deputy Registrars
    dismissal order.

[9]

For these reasons, this motion is dismissed.  The respondent is entitled
    to her costs of this motion, fixed in the amount of $7,500, inclusive of
    disbursements and all applicable taxes.

E.A. Cronk J.A.

S.E. Pepall J.A.

M. Tulloch J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
Royal Bank of Canada v. Hejna, 2014 ONCA 306

DATE: 20140417

DOCKET: C56944

Blair, Epstein and van Rensburg JJ.A.

BETWEEN

Royal Bank of Canada

Respondent/Plaintiff

and

Roland Hejna

Appellant/Defendant

Robert A. Klotz, for the appellant

Martin Greenglass for the respondent

Heard: April 16, 2014

On appeal from the judgment of Justice Susan E. Healey of
    the Superior Court of Justice, dated March 21, 2013.

APPEAL BOOK ENDORSEMENT

[1]

Mr. Hejna seeks to set aside a summary judgment granted by Healey J.
    awarding RBC approximately $6 million and declaring that the judgment was a
    judgment in fraud and therefore survives Mr. Hejnas discharge from bankruptcy.

[2]

The central issue on the appeal turns on the appellants argument that
    he did not receive proper production from the bank, and that the record was
    therefore insufficient on which to base a summary judgement because it was
    necessary for the trial judge to find that the appellant had the necessary
    intent for fraud.

[3]

What was involved was essentially a large cheque-kiting scheme, which
    the appellant defends on the basis that what took place was at least implicitly
    authorized or permitted by the bank.

[4]

The motion judge reviewed the record and evaluated the evidence on the
    basis of the full appreciation test set out in
Combined Air Mechanical
    Services Inc. v. Flesch
, 2011 ONCA 764.

[5]

Leaving aside the issue of production, which raises a question of law,
    we are not satisfied that the motion judge erred in her findings based on the
    application of
Combined Air
. The more recent decision of the Supreme
    Court of Canada in
Hryniak v. Mauldin
, 2014 SCC 7 limits our ability
    to review the decision on issues of fact or of mixed fact and law even further.

[6]

We do not accept the argument founded on the banks alleged failure to
    make adequate production. There is a long history to this litigation, including
    an earlier successful appeal to this court setting aside an earlier default judgment,
    and much has been said about who is to blame for what periods of delay. Suffice
    it to say, however, that the appellant had over six years to bring a production
    motion that would force the issue and enable him to put his best foot forward
    as required by the jurisprudence. The reality is that no such motion was
    brought until the late afternoon of two days before the summary judgment motion
    was to be heard (the second summary judgment date made
peremptory
to
    the appellant). We see no error in the motion judges decision not to accept
    the motion, in the circumstances. There was no request for an adjournment.

[7]

In conclusion, the motion judges decision was amply supported on the
    record with respect to each of the issues of liability, fraud and production. The
    appeal is therefore dismissed.

[8]

Costs of the appeal to the respondent fixed at $31,231.53 all-inclusive
    on a substantial indemnity scale given the allegation of fraud.


COURT OF APPEAL FOR ONTARIO

CITATION:
    Sharafbayani v. Jackson Roofing Corporation, 2014 ONCA 271

DATE: 20140407

DOCKET: C55932

Cronk, Gillese and Strathy JJ.A.

BETWEEN

Mansoor Sharafbayani

Plaintiff (Respondent)

and

Jackson Roofing Corporation

Defendant (Appellant)

Michael R. White, for the appellant

William D. Dunlop and Shayna A. Beeksma, for the
    respondent

Heard: April 3, 2014

On appeal from the judgment of Justice Gisele M. Miller
    of the Superior Court of Justice, dated July 18, 2012.

ENDORSEMENT

[1]

This appeal arises from a simplified proceeding under Rule 76. In 1999
    the respondent contracted with the appellant to install a new roof on his
    multi-unit residential building.

[2]

The appellant moved for a non-suit at the conclusion of the respondents
    case. In her ruling on the procedure to be followed on the non-suit motion,
    reported at 2011 ONSC 2707, the trial judge held that in an action under the
    simplified rules, a defendant moving for a non-suit is required to elect
    whether to call evidence, in the manner described by Laskin J.A. in
FL
    Receivables Trust 2002-A (Administrator of) v. Cobrand Foods Ltd.
(2007),
    85 O.R. (3d) 561 (C.A.), at paras. 12-14. Following this ruling, the appellant
    withdrew its non-suit motion, abandoned its counterclaim on its invoice, and
    elected to call no evidence.

[3]

In the result, the trial judge was left with only the respondents
    evidence, which included the evidence of an expert whom the trial judge found
    qualified to testify on the subject of roof installation and maintenance: see
    2010 ONSC 3496. The trial judge accepted the respondents evidence that:

·

there had been no complaints by tenants of leaks in the 12 years
    before the replacement of the roof;

·

the appellant gave a 10 year warranty on its work;

·

beginning in 2005, within the warranty period, the roof leaked
    persistently;

·

the appellant returned on numerous occasions, pursuant to its
    warranty and at no charge, to attempt to correct the problem, without any
    success;

·

in spite of the installation of a new roof membrane by the
    appellant in 2006, the roof continued to leak, notwithstanding further
    attendances and repairs by the appellant, pursuant to its warranty; and

·

in March 2007, the appellant denied responsibility for any more
    repairs and sent the respondent an invoice for $24,035.50 for its efforts to
    address what it claimed were condensation problems outside its control.

[4]

Based on these and other findings of fact, the trial judge found the
    appellant liable for breach of contract for failing to fulfill its warranty.

[5]

In our view, the trial judges findings of fact are supported by the
    evidence and the appellant has demonstrated no palpable and overriding error in
    her assessment of the evidence. Nor are we persuaded that there was error in
    the legal conclusions flowing from that evidence. The trial judge was entitled
    to find that a new roof is not supposed to leak and that the appellants
    warranty work did not correct the problem. In the absence of evidence from the
    appellant, demonstrating that the persistent leaking after the installation and
    repair of the roof was due to circumstances outside its control, the trial
    judge was entitled to find that the appellant had failed to fulfill its
    contractual warranty. The appellant having abandoned its efforts to resolve the
    problem pursuant to its warranty, the respondent was entitled to claim damages
    arising from the leaking of the roof and the cost of installing a properly
    constructed roof.

[6]

We note that a number of the appellants complaints are tort-based.
    Liability is this case was founded on breach of contract and breach of
    warranty.

[7]

The appellant asserts, as it did before the trial judge, that the
    respondent failed to establish causation. The findings of fact referred to
    above, coupled with the observations of the trial judge at paragraphs 60 and 61
    of her reasons, provide a basis for her conclusion that the respondents
    damages were caused by the appellants breach of contract and breach of
    warranty. The appellant having elected to call no evidence, this conclusion was
    clearly open to the trial judge.

[8]

The appellant claims that the trial judge erred in finding that the action
    was not time-barred. We disagree. When the appellant refused to honour its
    contractual warranty, the respondent was entitled to sue for damages. Accordingly,
    the respondent commenced its action within the limitation period.

[9]

In the absence of any evidence from the appellant as to the costs of
    repairing the damage and replacing the roof, the trial judge was entitled to
    accept the respondents evidence on those costs. We are not persuaded that the
    trial judge made a reversible error in the assessment of damages.

[10]

For
    these reasons, the appeal is dismissed, with costs to the respondent fixed at
    $10,000, inclusive of disbursements and all applicable taxes.

E.A. Cronk
    J.A.

E.E.
    Gillese J.A.

G.R.
    Strathy J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Sievert & Sawrantschuk LLP v. Hommel, 2014 ONCA
317

DATE: 20140423

DOCKET: C56918

MacPherson, Blair and Pepall JJ.A.

BETWEEN

Sievert & Sawrantschuk LLP

Plaintiff (Appellant)

and

Boston Hommel

Defendant (Respondent)

AND BETWEEN

Boston Hommel

Plaintiff by Counterclaim (Respondent)

and

Bryon Sievert and
Sievert
& Sawrantschuk LLP

Defendants to the Counterclaim (
Appellant
)

J.C. Rioux and John Philpott, for the appellant

Evan L. Tingley, for the respondent

Heard and released orally: April 22, 2014

On appeal from the judgment of Justice James M. Spence of
the Superior Court of Justice, dated March 18, 2013.

ENDORSEMENT

[1]

The appellant partnership appeals from the March 18, 2013 judgment of
Spence J. in which he dismissed the partnerships action and awarded the
respondents former partner $80,416.50 in damages plus prejudgment interest on
his counterclaim.

[2]

The appellant advances three grounds of appeal.

[3]

First, the appellant submits that the trial judge erred in his
application of the Partnership Agreement when calculating the value of the
goodwill attributable to the respondents capital account.  It is conceded by
the appellant that the partnership did not actually apply the language of the
relevant provisions of the Partnership Agreement.  Based on the record before
him and the positions taken by the parties, we see no legal error in the trial
judges conclusion.

[4]

Secondly, the appellant submits that the trial judge erred in concluding
that the respondents share of the equity of the subsidiaries was not already
included in his capital account.

[5]

The trial judge relied on the financial statements prepared by the
partnership in support of his conclusion and also preferred the respondents
evidence on this issue to that of the partnership.  It was open to him to do
so.  We see no error in his approach and we would not give effect to this
ground of appeal.

[6]

Thirdly, the appellant submits that the trial judge erred in calculating
the goodwill for clients retained by the partnership.

[7]

The standard of review in this regard is palpable and overriding error.
Based on the state of the record before him, we are not persuaded that the
trial judge erred.

[8]

In the circumstances, it is unnecessary to address the respondents
limitations submission.

[9]

The appeal is dismissed.  Costs of $10,000 inclusive of disbursements
and applicable tax are to be paid by the appellant to the respondent.

J.C. MacPherson J.A.

R.A. Blair J.A.

S.E. Pepall J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Teplitsky Colson LLP v. Malamas, 2014 ONCA 308

DATE: 20140417

DOCKET: M43356 (C55730)

Laskin, Rosenberg and Lauwers JJ.A.

BETWEEN

Teplitsky Colson LLP, Gary Caplan,
    2004782 Ontario Limited, 717 Pape Inc., Peter L. Biro, CGD Management Limited,
    Crerar Property Corp., Danforth Properties Limited, George Fouldis, Goodman and
    Carr, Jonathan Lisus, Mccarthy Tetrault LLP, The Mutual Trust Company (now known
    as the Clarica Trust Company), Raymond Raphael, Raymond Raphael Professional
    Corporation, Stewart J.L Robertson, Nicholas Stanoulis, Donna Stanoulis,
    Christina Stanoulis, Gary Stanoulis, Thomas Stanoulis, Thomas M.T. Sutton,
    Chris Tatsis, Panagiota Tatsis, Tonu Toome,
Toome
    Laar & Bell, City of Toronto

Applicants/Respondents/Respondents

and

William Malamas, also
    known as Vasilios Malamas, Apollco Developments Ltd., Apollo Real Estate
    Limited, Apollco Properties Limited, Apollco Construction Ltd., Apollo Ltd.,
    Pallas Properties Inc.

Respondents/Appellants/Moving Parties

William Malamas, appearing in person and on behalf of
    Apollo Real Estate Limited, Apollco Properties Limited, Apollco Developments
    Ltd., Apollco Construction Ltd. and Pallas Properties Inc.

William OHara, for the respondents Teplitsky Colson LLP
    and Gary Caplan

Ray Tahpar, for respondents
Crerar
    Property Corp., Danforth Properties Limited, Stewart J.L Robertson, Clarica
    Trust Company, 2004782 Ontario Limited and CDG Management Ltd.

Constantine Alexiou, for the
    respondents Chris Tatsis and Panagiota Tatsis

Sean Dewart, for the respondents
    McCarthy Tetrault, Raymond Raphael Professional Corporation, Peter L. Biro,
    Goodman and Carr, Tonu Toome, Toome Laar & Bell and Jonathan Lisus

Andrew Stikuts, for the respondent City
    of Toronto

Lawrence F. Wallach, for the respondents
    Nicholas Stanoulis, Donna Stanoulis, Christina Sanoulis, Gary Stanoulis and
    Thomas Stanoulis

Nicholas Stanoulis, for the respondent
    717 Pape Inc.

Heard in writing

On motion pursuant to Rule 59.06 to set aside the order
    of this court dated June 17, 2013, on the appeal from the judgment of Justice
    Frank J. C. Newbould of the Superior Court of Justice dated August 13, 2012.

By the Court
:

[1]

Mr. Malamas brings a motion to vary, amend or set aside the order of
    this court dated June 17, 2013, and for other relief.  We have reviewed his
    material.  His motion has no merit.  Accordingly, we decline to grant Mr.
    Malamas an oral hearing.  And we do not require any response from the
    responding parties.  The motion is dismissed.

[2]

We also make the following orders:

·

Mr. Malamas may not file any further documents in connection with
    this appeal;

·

Mr. Malamas may not communicate or make further inquiries
    pertaining to this appeal to the staff of this court;

·

This order may be taken out by the responding parties.  Mr.
    Malamas approval of the form and content of this order or of any orders in
    connection with this motion and his appeal are not required.

Released: April 17, 2014 (J.L.)

John Laskin J.A.

M. Rosenberg J.A.

P. Lauwers J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Toronto-Dominion Bank v. Horizon Landings Columbia
    Limited Partnership, 2014 ONCA 280

DATE: 20140409

DOCKET: C58026

Weiler, Lauwers and Pardu JJ.A.

BETWEEN

TD Bank, N.A.

Plaintiff (Respondent)

and

Horizon
    Landings Columbia Limited Partnership, Henry

Morton, Horizon Landings,
    Inc. and Campus Suites, LLC.

Defendants (Appellants)

Robert D. Malen, for the appellants

Chad Kopach, for the respondent

Heard: April 9, 2014

On appeal from the judgment of Justice David L. Corbett
    of the Superior Court of Justice, dated November 29, 2013.

APPEAL BOOK ENDORSEMENT

[1]

The wording of the guaranty does not require the respondent to exhaust
    its other remedies against the guarantor before enforcing the guaranty.

[2]

The motions judge did not err in granting summary judgment allowing the
    foreign judgment to be enforced here, although the respondent had not exhausted
    the remedies it had in the foreign jurisdiction.

[3]

The appellant relies on para. 60 of
Beals and Saldanha
[2003] 3
    S.C.R. 416, [2003] S.C.J. No. 77, which states:

A domestic court enforcing a judgment has a heightened duty to
    protect the interests of defendants when the judgment to be enforced is a
    foreign one. The domestic court must be satisfied that minimum standards of
    fairness have been applied to the Ontario defendants by the foreign court.

[4]

We see no unfairness here. The thrust of the jurisprudence moreover is
    to facilitate enforcement of foreign judgments. The position advocated by the
    appellant would be contrary to this policy. Accordingly, the appeal is
    dismissed.

[5]

Costs of $5256.87 inclusive of disbursement and all applicable taxes are
    awarded to the respondent.


COURT OF APPEAL FOR ONTARIO

CITATION: Toronto Standard Condominium Corporation No.
    1786 Owners Group v. Toronto Standard Condominium Corporation No.
    1786, 2014

ONCA 253

DATE: 20140401

DOCKET: M43437/C57774

Feldman, Rouleau and Hourigan JJ.A.

BETWEEN

Toronto
    Standard Condominium Corporation

No. 1786 Owners Group

Applicant (Respondent in Appeal)

and

Toronto
    Standard Condominium Corporation No. 1786,
Joseph

Ieradi, Giorgio Marchi (George Marchi), and Konstantinos

Koutoumanos
    (Gus Koutoumanos)

Respondents (Appellants)

Nick Porco, for the appellants

Michael A. Spears, for the respondents

Heard:  March 31, 2014

On appeal from the order of Justice Edward P. Belobaba of
    the Superior Court of Justice, dated September 20, 2013.

APPEAL BOOK ENDORSEMENT

[1]

The underlying dispute between the parties was the cost of repairs of
    the parking structure and the liability for those costs. That issue was before
    the motion judge at the time of the motion seeking interim relief. That motion
    was brought on the grounds that the appellants were in breach of the motion
    judges previous order for the production of documentation. In those
    circumstances, he made an order to facilitate the holding of the AGM meeting,
    including the impugned paragraph (which allowed people with outstanding parking
    assessments to vote at the AGM). That impugned paragraph did not determine the
    underlying issue but suspended its determination pending the holding of the
    meeting. This was an order that was within his broad discretion under s. 134(3)(c)
    of the
Condominium Act
and was not a breach of that act. We,
    therefore, see no basis to interfere with the exercise of his discretion. The
    appeal is dismissed. Costs to the respondents of $11,000 inclusive of
    disbursements and HST.


COURT OF APPEAL FOR ONTARIO

CITATION: United States v. Yemec, 2014 ONCA 274

DATE: 20140408

DOCKET: C57021 & C57472

Sharpe, Watt and Benotto JJ.A.

AND BETWEEN

C57021

The United States of America and United States
    Federal Trade Commission

Plaintiffs (Appellants)

and

George Michael Yemec, Anita Fern Rapp, Julia F.
    Bungaro, World Media Brokers Inc., 624654 Ontario Limited, 637736 Ontario
    Limited, 537721 Ontario Inc., Express Marketing Services Ltd., 331216 B.C.
    Ltd., 364058 B.c. Ltd., 1306051 Ontario Inc., 377414 Ontario Inc., O/A World
    Media Brokers, Dial-A-Million Inc., Telegroup Inc. O/A Market Monitor, 747321
    Ontario Inc., Grant Print Inc., 599026 Ontario Inc., Jackpots & Prizes, Nelson
    Bunting and Express Purchaser Services Ltd.

Defendants (Respondents)

AND BETWEEN

C57472

The United States of America and United States
    Federal Trade Commission

Plaintiffs (Appellants)

and

George Michael Yemec, Anita Fern Rapp, Steven
    Lawrence Rapp, Paul Churchill Teskey, Jean-Paul C. Teskey, Julia F. Bungaro,
    William Dean Temple, Jr., Yvonne Buckingham, Florence Mary Teskey, World Media
    Brokers Inc., 1165107 Ontario Inc., Faby Games Inc., 624654 Ontario Limited,
    637736 Ontario Limited, 537721 Ontario Inc., Express Marketing Services Ltd.,
    364058 B.C. Ltd., 331216 B.C. Ltd., Intermarketing Services, Inc., Cash &
    Prizes, Inc., Cash & Prizes Inc., Taras Voloshchuk (a.k.a. Terry
    Wokoschuk). Canadian Subscription Services, 1306051 Ontario Inc., 377414
    Ontario Inc., O/A World Media Brokers, Dial-A-Million Inc., Telegroup Inc., O.A
    Market Monitor, 747321 Ontario Inc., Grant Print Inc., Jackpots & Prizes,
    Nelson Bunting, 599026 Ontario Inc. and Express Purchase Services Ltd.

Defendants (Respondents)

Malcolm Ruby and Zoe Paliare, for the appellants

David Wires and Krista Bulmer, for the respondents

Heard: March 19, 2014

On appeal from the orders of Justice Edward Belobaba of
    the Superior Court of Justice, dated April 2, 2013 and July 2, 2013.

By the Court:

[1]

The appellants obtained two
ex parte
injunctions against the
    respondents. They provided an undertaking to compensate the respondents for
    damages if the injunctions were found to have been wrongfully granted.  The injunctions
    were ultimately set aside, and pursuant to the undertaking, an inquiry with
    respect to damages was held.  The inquiry judge awarded damages, legal fees to
    be held in trust for third parties and a charging order to cover the legal fees
    of the respondents counsel. The USA appeals the damages award and the charging
    order.

A.

History of the Action

[2]

The respondents operated telemarketing businesses in Canada.  In October
    2002, the appellants alleged that the respondents were targeting American
    seniors and fraudulently demanding fees in their sale of Canadian lottery
    tickets. The USA applied for and received a
Mareva
injunction and a
Anton
    Piller
order. The motion was heard
ex parte
based on misleading
    affidavit evidence. The orders, dated October 3, 2002, included the following
    undertaking on the part of the appellants, which tracked the language of rule 40.03
    of the
Rules of Civil Procedure
, R.R.O. 1990, Regulation 194:

To abide by any Order concerning damages that the Court may
    make if it ultimately appears that the granting of the Order has caused damage
    to the Defendants for which the Plaintiff out to compensate the Defendants.

[3]

The
ex parte
orders were set aside on October 3, 2003.  The
    appellants appealed. The appeal was dismissed by the Divisional Court on March
    24, 2005. A damage inquiry was held in 2012.

(1)

Damages Inquiry

[4]

The damages inquiry was heard over the course of 15 days.  The claimants
    George Yemec, Anita Rapp, Julia Bungaro and Nelson Bunting, along with various
    corporate claimants, claimed tens of millions of dollars.  The inquiry judge
    dismissed most of the claims on the basis that almost all of the damages claimed
    had not been caused by the wrongful injunctions.  Instead, the inquiry judge
    found that the damages were caused by other events that pre-dated the
    injunctions, including a Temporary Restraining Order (TRO) issued by a court in
    Chicago in the context of a civil proceeding brought by the United States
    Federal Trade Commission (FTC) against several of the respondents in the
    United States.  The TRO had effectively shut down the businesses.

[5]

However, the inquiry judge did award a total of $954,576 in damages
    stemming from the unlawful injunctions, which included the following:

·

$1,000 to Mr. Bunting for the seizure of his cellphone during a
    search of the respondents business premises;

·

$250,000 to Mr. Yemec for loss of reasonable time to transition
    to a new business;

·

Legal fees to be paid in trust for the following lawyers:

o

$52,560 for Goodmans LLP;

o

$17,228 for Thomas Kent;

o

$3,788 for Wires Jolley LLP;

o

$10,000 for Martin Evans.

·

Other legal fees to the defendants:

o

$25,000 for topping up the costs of setting aside the
ex
    parte
order;

o

$595,000 for costs of the inquiry and the related appeals.

[6]

The inquiry judge also issued a charging order, granting Wires Jolley LLP
    first charge on $871,000 for the payment of any unpaid fees and expenses in
    relation to setting aside the
ex parte
orders and the costs of
    obtaining and conducting the damages inquiry.

B.

The Appeal

[7]

The appellants appeal the damages awards and the charging order.  They
    submit that:

(1)

The inquiry judge erred in awarding damages to Mr. Bunting for loss of
    his cellphone because he was not a defendant at the time the cellphone was
    seized.

(2)

Mr. Yemec should not have received damages for loss of transition time
    because no claim was advanced under that head at the inquiry, the inferences
    drawn by the inquiry judge were not clear and Yemecs businesses were illegal.

(3)

Damages should not have been awarded to third party law firms because
    the injunction did not extend to them.

(4)

The costs awarded for the inquiry were disproportionate to the amount
    actually awarded particularly in light of the amount claimed, and top-up costs
    were not appropriate because the respondents were already awarded costs by the
    Divisional Court when the appeal was heard.

(5)

A charging order is only appropriate when a client derives a net benefit
    from the solicitors work.  The appellants argue that, in this case, the
    respondents remain liable for a $19 million judgment rendered against them in
    the parallel American proceedings and deemed to be enforceable in Canada by
    this court. They submit that the Canadian and American actions were one
    proceeding and thus there was no net benefit to the respondents from the damage
    inquiry.

C.

Analysis

[8]

Before dealing with the specific issues, we make two preliminary
    observations.

[9]

First, the starting point for this inquiry is that the appellants were
    found to have obtained the drastic remedies of an
Anton Piller
order and
    a
Mareva
injunction on an
ex parte
application based on
    misleading affidavit evidence.

[10]

Second,
    the errors alleged by the appellants are fact-based.  As we will explain, it is
    our view that the inquiry judge carefully considered the legal tests,
    articulated the facts and drew available inferences.

1. Bunting cell phone

[11]

Mr.
    Buntings cellphone was left at premises that became the subject of the
    seizures pursuant to the
Anton Piller
order.  Although he was not a
    defendant at the time the injunctions were granted, he became a defendant and,
    in our view, as a defendant, he is entitled to be compensated pursuant to the
    undertaking.  While the damages awarded appear to us to be generous, there was
    some evidence to support the award and we decline to interfere.

2. Loss of transition time

[12]

Mr.
    Yemecs loss of transition time arose from the fact that he was unable to
    pursue any business opportunity because the injunctions froze his assets and
    records. Although the inquiry judge gave this head of damages an unusual label
    that was not mentioned at the inquiry, there was ample evidence of the drastic
    impact of the injunction upon Yemec and the award was well within the
    parameters of the case that was presented.

[13]

The
    inquiry judge found, at para. 35, that the injunction froze Yemecs assets and
    bank accounts, both current and future; it was not set aside until one year
    later; and the appeal effectively extended the period during which Yemec could
    not realistically raise money for a new venture for another year and a half.

[14]

We
    do not agree that it should be assumed that because of the illegality of
    Yemecs past business, he would not have been able to launch a legal venture.
    In our view, the inquiry judge was entitled to accept the evidence and draw the
    inferences that he did in making this award.

3. Legal Fees in Trust

[15]

We
    do not accept the appellants characterization of the award for legal fees to
    be paid in trust as an award to third party law firms. The amounts awarded
    corresponded to legal fees the respondents had incurred in dealing with the
    improperly obtained injunctions. One law firm had obtained a judgment for the
    fees and other fees remained outstanding to be dealt with at or after the
    inquiry. The trust provision in the award simply ensured that the fees would be
    paid to the law firms.

4. Costs of the Damages Inquiry

[16]

It
    is not an error of law to award legal fees as damages on an inquiry. (See:
Stonehocker
    v. King
1998 CanLII 7187 (CA)). The inquiry judge was entitled to require
    the appellants to pay for all the costs associated with setting aside the
    wrongly obtained orders and the costs of the damages inquiry. While the amount
    awarded was substantial, we cannot say that it was unreasonable when considered
    in the entire context of this litigation.

5. Charging Order

[17]

The
    inquiry judge did not err in granting the charging order. The $19 million
    judgment asserted by the appellants was granted to a different party in a
    different proceeding and did not preclude the charging order in favour of the
    solicitors who got the improperly obtained injunctions set aside and obtained
    and conducted the damages inquiry. We agree with the inquiry judges reasons
    that the work done by the lawyers in the Canadian proceeding was separate from
    the American proceeding and that the American damages award ought not to
    deprive the solicitors of their right to a charging order.

D.

DISPOSITION

[18]

The
    appeal is dismissed.  Costs to the respondent in the amount of $37,500 ($7500
    for the charging order appeal and $30,000 for the damages appeal) inclusive of
    disbursements and applicable taxes.

Robert J. Sharpe
    J.A.

David Watt J.A.

M.L. Benotto J.A.

Released: April 08, 2014