COURT OF APPEAL FOR ONTARIO

CITATION: 3113736 Canada Ltd. v. Cozy Corner
    Bedding Inc., 2020 ONCA 235

DATE: 20200323

DOCKET: C66890

Feldman, Brown and Zarnett JJ.A.

BETWEEN

3113736
    Canada Ltd.

Plaintiff (Respondent)

and

Cozy Corner Bedding Inc.

Defendant (Appellant)

Douglas LaFramboise,
    for the appellant

Varoujan
    Arman, for the respondent

Heard: January 23,
    2020

On appeal from the order of Justice Andrew A. Sanfilippo of the Superior
    Court of Justice, dated April 8, 2019, with reasons reported at 2019 ONSC 2249,
    69 C.B.R. (6th) 102.

Zarnett
    J.A.:

OVERVIEW

[1]

Insolvency legislation preserves the right of a person, who has been
    sued by the insolvent, to raise set-off as a defence. The main issue in this
    appeal is whether that right was given up by a release that the insolvent
    obtained in a class action.

[2]

The respondent, 3113736 Canada Ltd. (Valle Foam) was a manufacturer
    and supplier of foam products. The appellant, Cozy Corner Bedding Inc. (Cozy
    Corner) was one of Valle Foams long-standing customers. In 2010, Valle Foam was
    charged under the
Competition Act
, R.S.C.,
    1985, c. C-34, with fixing prices of its products for a period from 1999 to 2010.
    Along with others, it was also sued for damages for price-fixing in a class proceeding.
    The class was made up of customers who, like Cozy Corner, purchased foam
    products between 1999 and 2012.

[3]

In 2012, on the brink of insolvency, Valle Foam pled guilty to the
    charges and entered into an agreement to settle the class action on terms that did
    not include any payment to the class. The class action settlement included a release
    (the Class Action Release). It released claims by class members against the
    class action defendants, but expressly left unimpaired class members rights to
    advance those claims in a defendants subsequent insolvency. Immediately after
    it agreed to settle the class action, Valle Foam filed for insolvency
    protection under the
Companies Creditors Arrangement Act
, R.S.C., 1985, c. C-36
(the CCAA).

[4]

In 2013, while under CCAA protection, Valle Foam commenced an action
    against Cozy Corner for unpaid invoices rendered in 2011 and 2012. Cozy Corner,
    which made purchases during the price-fixing period, defended the action and
    counterclaimed. It alleged that, due to the price-fixing scheme, it had
    overpaid Valle Foam in amounts that exceeded Valle Foams claim.

[5]

Valle Foam successfully moved for summary judgment for the amount of the
    invoices and a dismissal of the counterclaim. The motion judge rejected Cozy
    Corners contention that it was not bound by the class action settlement
    because it had not received actual notice of it. He characterized Cozy Corners
    defence and counterclaim as raising equitable set-off, but considered equitable
    set-off to be barred by the Class Action Release. Alternatively, he held that Cozy
    Corner had not led sufficient evidence of overcharging in the relevant period to
    meet its burden of showing a genuine issue requiring a trial.

[6]

For the reasons that follow, I would allow Cozy Corners appeal and
    direct that the matter proceed to trial. In light of the exception in the Class
    Action Release, the Class Action Release did not bar Cozy Corner from advancing
    equitable set-off in response to the action that Valle Foam brought while it
    was a CCAA-protected insolvent. The factual record disclosed an issue about
    overcharging which raised a genuine issue requiring a trial.

FACTS

The
Competition Act
Offences and
    Class Actions

[7]

The respondent was known as Valle Foam Industries (1995) Inc. prior to
    its insolvency. It made and distributed flexible polyurethane foam products. Cozy
    Corner was a customer of Valle Foam between 2001 and 2012. Cozy Corners deponent
    gave evidence that it paid Valle Foam over $3 million for product during the
    course of their business relationship. In 2009 alone, Cozy Corner purchased
    $445,000 worth of products from Valle Foam.

[8]

In 2010, Valle Foam was charged under s. 45(1)(c) of the
Competition Act
with conspiring to unduly lessen
    competition in the sale or supply of foam products, and under s. 45(1)(a) of
    the
Competition Act
with conspiring to fix,
    maintain or increase the price for those products. The time period alleged in
    the charges was from January 1, 1999 to March 11, 2010 for the s. 45(1)(c)
    offences and March 12, 2010 to July 27, 2010 for the s. 45(1)(a) offences.

[9]

Various class actions were commenced against Valle Foam and others alleged
    to have been involved in the price-fixing scheme. An Ontario class action was
    commenced in 2010. The class actions included claims for damages for price-fixing
    on behalf of purchasers of foam products.

[10]

On
    January 5, 2012, Valle Foam pled guilty to the
Competition
    Act
offences and was fined a total of $6.5 million. The motion
    judge noted that this included an admission of price-fixing in relation to the
    period covered by the charges, namely January 1, 1999 to July 2010.

[11]

On
    January 11, 2012, Valle Foam agreed to a settlement of the class actions
    conditional upon court approval. The next day, January 12, 2012, Valle Foam
    filed for insolvency protection under the CCAA. As described in the affidavit
    of Tony Vallecoccia, the Chief Executive Officer of Valle Foam at the time of
    the CCAA filing (the Vallecoccia Affidavit), the two events were closely
    related. As he deposed, the settlement of the class action:

·

did not involve any payment by Valle Foam to the plaintiff class;

·

was made expressly on the contemplation that Valle Foam would
    immediately be filing for insolvency protection; and

·

provided that the settlement and the termination of the class
    proceedings were without prejudice to the Class Plaintiffs and putative class
    membersasserting their claims as creditors within the proposed CCAA
    proceedings.

[12]

When
    Valle Foam filed for CCAA protection, it obtained a broad stay of proceedings
    against it. Paragraph 13 of the Initial Order provided that until the
    termination of the stay period, no proceeding or enforcement process in any
    courtshall be commenced or continued against...[Valle Foam]. Paragraph 14
    provided that during the stay period, all rights and remedies of anycorporationagainst
    [Valle Foam] were stayed and suspended. The stay period was initially until
    February 10, 2012, but was extended from time to time through to at least April
    30, 2019, that is, beyond the time this matter was heard by the motion judge.

This Action

[13]

In
    addition to its purchases from Valle Foam during the period covered by the
    price-fixing charges, Cozy Corner purchased additional foam product from Valle
    Foam between August 5, 2011 and January 27, 2012. Valle Foam issued invoices
    totaling approximately $200,000 for this product, the bulk of which remained unpaid
    as of April 8, 2013 when Valle Foam demanded payment (the Disputed Invoices).

[14]

On
    May 1, 2013, Valle Foam, while under CCAA protection, instituted this action
    claiming $184,319.34 on the Disputed Invoices, which Cozy Corner had refused to
    pay when it learned of Valle Foams price-fixing guilty plea.

[15]

Cozy
    Corner defended the action and counterclaimed, alleging that it was not required
    to pay the invoices because of the price-fixing and overcharging in which Valle
    Foam had engaged. Cozy Corner referred to the guilty plea and relied on its
    payments to Valle Foam from 2001 to 2012 for product that was the subject of
    price fixing. Cozy Corner counterclaimed for what it estimated was the amount
    it had been overcharged$410,000 representing 10% of the $4.1 million it had
    paid to Valle Foam since 2001. This amount exceeded Valle Foams claim by
    roughly $225,000.

[16]

In
    its reply, Valle Foam relied on the stay in the CCAA order and asked that the
    counterclaim be dismissed. It claimed that Cozy Corner had not suffered any
    loss on the Disputed Invoices because they were in respect of product sold
    after the price-fixing period in the guilty-plea. Valle Foam also alleged that,
    if any amounts were found to be owing to Cozy Corner, they should be set-off
    against its claim. Paragraph 20 of the reply states: ...in the event any
    amounts are owing by [Valle Foam] to [Cozy Corner], which is expressly denied
    for reasons pleaded herein and in the Statement of Claim, [Valle Foam] is
    entitled to set-off those amounts against the amount claimed in the Statement
    of Claim.

The Class Action Settlement Approval

[17]

The
    Ontario class action was certified for settlement purposes against Valle Foam
    and others in July 2013. In August 2013, notice of the certification and of a
    request that the settlement be approved was mailed to, among others, Valle
    Foams customer list, on which Cozy Corners name appeared. Notice was also
    provided in certain media. The notice provided for an opportunity to opt out of
    participation in the class action and a deadline (October 18, 2013) for doing
    so, and stated that if a class member did not opt out you will be bound by the
    settlement. Cozy Corner did not opt out.

[18]

On
    February 11, 2014, the settlement of the class actions was approved in Ontario
    (the Class Action Settlement Order). Ontario settlement class members were
    defined as including all persons who purchased foam products from January 1,
    1999 to January 10, 2012, and who did not validly opt out. The Class Action Settlement
    Order gave effect to the Class Action Release, described more fully below, and
    deemed the Released Claims (also described below) to be discontinued.

[19]

The
    Class Action Release provides that class members release Valle Foam, among
    others, from the Released Claims, which include any and all manner of claims,
    demands, actions,damages whenever incurred,relating in any way to any conduct
    [between] January 1, 1999 to the date hereof [January 10, 2012]in respect of
    the purchase, sale, pricing, discounting, marketing, distributing of or
    compensation for, Foam Products

[20]

The
    Class Action Release is subject to the following exception:

Notwithstanding anything in this
    Settlement Agreement to the contrary, including but not limited to this
    Settlement Agreements provisions relating to the release of the Released
    Claims granted by the Releasors in favour of
the
Releasees and the discontinuance of proceedings as against the Domfoam
    Defendants, nothing in this Settlement Agreement shall preclude the Plaintiffs,
    or any member of the Settlement Class, individually or collectively, from
    filing against the Domfoam Defendants a claim in any creditor protection,
    restructuring, insolvency or other bankruptcy proceeding in Canada and/or the
    U.S. to the extent that such claim is based upon, arising out of or relating to
    facts, occurrences, transactions or other matters alleged in the Proceedings.
    To the extent permitted by law, the Domfoam Defendants shall not object to the
    filing by the Plaintiffs, or any member of the Settlement Class, of any such
    claim against the Domfoam Defendants in any creditor protection, restructuring,
    insolvency or other bankruptcy proceeding in Canada or the U.S., and further
    agree that nothing in this Settlement Agreement shall in any way impair or
    limit such claim against the Domfoam Defendants or the ability of such
    claimant(s) to seek recovery in any such creditor protection, restructuring or
    other bankruptcy proceeding in Canada or the U.S. for any such claim(s) against
    the Domfoam Defendants.

[21]

The
    term Domfoam Defendants in the Class Action Release included Valle Foam.

The
Motion
Judges Decision

[22]

The
    motion judge rejected Cozy Corners argument that it was not bound by the Class
    Action Release because it did not receive actual notice of the class action, the
    settlement approval, or the right to opt-out. He found that the procedure that
    had been undertaken in the class action provided adequate notice to class
    members.

[23]

In
    addition, the motion judge found that the claims in the defence and counterclaim,
    which Cozy Corner sought to set-off against the respondents claim, fell within
    the definition of Released Claims in the settlement. Cozy Corner was bound by
    the Class Action Release, and its counterclaim was deemed to be discontinued,
    as it had not opted out of the class action settlement. The motion judge held
    this to be a sufficient ground to grant judgment on Valle Foams claim and dismiss
    the counterclaim: at paras. 49-55.

[24]

In
    the alternative, he also found that Cozy Corner had not put its best foot
    forward to show, by evidence, that there was price-fixing on the invoices on
    which it was sued, or the amount of over-charging due to price-fixing on prior
    invoices. He therefore would have granted judgment and dismissed the counterclaim
    on this basis if he had not done so on the basis of the Class Action Release: at
    para. 78.

[25]

Finally,
    he held that if he had not dismissed the counterclaim on the basis of the Class
    Action Release, he would have rejected Valle Foams request to stay the
    counterclaim on the basis of the CCAA stay of proceedings. He reasoned that a
    claim for equitable set-off can be continued in response to a claim brought by
    a party protected by a
CCAA
proceeding
    notwithstanding a stay order, and that the counterclaim is a form of set-off
    responsive to the claim by the party under
CCAA
protection: at paras. 80-82.

[26]

As
    a consequence, the motion judge granted judgment in favour of Valle Foam in the
    sum claimed on the Disputed Invoices ($184,319.34), with pre-judgment and
    post-judgment interest, and dismissed Cozy Corners counterclaim.

ANALYSIS

Standard of Review

[27]

The motion judges decision that there was
    no genuine issue requiring a trial is a finding of mixed
fact and law. Where there is no extricable error in principle,
    findings of mixed fact and law should not be overturned absent palpable and
    overriding error:
Hryniak v. Mauldin
, 2014 SCC 7, [2014] 1 S.C.R. 87,
    at para. 81.

Is Cozy Corner Bound by the Class Action
    Release?

[28]

Cozy
    Corner submits that the motion judge erred in finding that it was bound by the
    Class Action Release because of its contention that it did not actually receive
    notice of the class action, the settlement which contained the release, or the
    right to opt-out.

[29]

I
    would not interfere with the motion judges conclusion on this point.

[30]

Subsection 29(3) of the
Class
    Proceedings Act, 1992
, S.O. 1992, c. 6,
states
    that [a] settlement of a class proceeding that is approved by the court binds
    all class members. Cozy Corner does not dispute that it falls within the class
    definition in the Ontario class action, that it did not opt out, and that even
    after Valle Foam raised the class action settlement against it, it brought no
    motion in the class action to extend the time for it to opt out.

[31]

Cozy
    Corners argument that it did not receive actual notice of the class action,
    the settlement approval hearing, or of the opportunity to opt out, is therefore
    unavailing. While the law is clear that adequate notice to class members must
    be provided, the lack of actual notice to any particular class member does not
    prevent the class (except for opt outs) from being bound where sufficient steps
    have been undertaken to provide adequate notice:

Currie v.
    McDonalds Restaurants of Canada Ltd.
(2005)
, 74 O.R. (3d) 321 (C.A.), at
    paras. 28 to 31;
Airia Brands Inc. v. Air Canada
,

2017
    ONCA 792, 417 D.L.R. (4th) 467, at para. 86, leave to appeal refused: [2017]
    S.C.C.A. No. 476.

[32]

The
    motion judges finding that sufficient steps to provide adequate notice had
    been undertaken was completely justified on the record. It is entitled to
    deference. Cozy Corners lack of actual notice did not prevent it from being
    bound by the Class Action Release.

Does the Class Action Release Cover Equitable Set-Off?

[33]

Cozy
    Corner further argues that the motion judge erred in viewing the Class Action Release
    as applying to Cozy Corners assertion of equitable set-off.

[34]

The
    motion judges interpretation of the Class Action Release is subject to a
    deferential standard of review, absent extricable error:
Creston
    Moly Corp. v. Sattva Capital Corp.
, 2014 SCC 53, [2014] 2 S.C.R.
    633, at paras. 50 and 55. However, here the motion judge failed to interpret the
    Class Action Release as a whole and give meaning to all of its terms, which is
    a fundamental principle of contractual interpretation:
Ventas
    Inc. v. Sunrise Senior Living Real Estate Trust,
2007 ONCA 205, 85
    O.R. (3d) 254, at para 24. His reasons do not advert to or analyze the
    exception in the Class Action Release. This is an extricable legal error within
    the meaning of
Sattva
, at para. 53.
    Accordingly, his interpretation is not subject to deference.

[35]

The
    motion judge relied on the following term of the Class Action Release as
    indicative of its breadth:

Released Claims
mean any and all manner of claims, demands, actions . . . , damages whenever
    incurred, damages of any kind including compensatory, punitive or other
damages
, liabilities of any nature whatsoever,
    . . . relating in any way to any conduct occurring anywhere, from January 1,
    1999 to the date hereof [January 10, 2012] in respect of the purchase, sale,
    pricing, discounting, marketing, distributing of or compensation for, Foam
    Products, or relating to any conduct alleged (or which could have been alleged)
    in the Proceedings or the Other Actions

[36]

Cozy Corner argues that equitable set-off falls outside of this
    language because it is a defence, not a claim. Equitable set-off is not, for
    example, precluded by a limitation period the way a claim is:
Grand Financial Management Inc. v. Solemio Transportation Inc
., 2016 ONCA 175, 395 D.L.R. (4th) 529, leave to appeal refused: [2016]
    S.C.C.A. No. 183, at paras. 92 to 94.

[37]

I would not give effect to this argument. Although equitable set-off is
    a defence, it is one that arises from the defendant having a cross-claim that
    is closely connected to the plaintiffs claim:
Telford
    v. Holt
, [1987] 2 S.C.R. 193, at p. 212. It is a way
    of raising, as a defence, a plaintiffs liability to take into account a loss
    it occasioned to the defendant in reduction of the plaintiffs claim. It is
    often referred to as a claim for equitable set-off:

Canada Trustco Mortgage Co. v. Pierce (Estate Trustee of)
(2005), 254 D.L.R. (4th) 79 (C.A.), at para. 50, leave to appeal
    refused: [2005] S.C.C.A. No. 337.

[38]

The definition of Released Claims refers to any and all manner of
    claim and also to liabilities of any nature whatsoever. In my view, this
    language is broad enough to capture a claim for equitable set-off.

[39]

However, the exception (excerpted at para. 20 of these reasons) is an
    important restriction on what would otherwise be the broad effect flowing from the
    definition of Released Claims. The exception allows class members (like Cozy
    Corner) to make claims arising from the matters in issue in the Class Actions (i.e.
    the price-fixing activities) in the course of an insolvency proceeding taken by
    a beneficiary of the Class Action Release (like Valle Foam). It leaves the
    right to make such claims unimpaired.

[40]

In
    my view the right to claim equitable set-off in an insolvency falls within the
    exception.

[41]

The
    CCAA preserves the ability of a creditor to raise set-off when sued by a
    company that is subject to CCAA protection. Section 21 of the CCAA, which
appears within a group of sections appearing under the heading Claims,
provides:

The law of set-off or compensation applies to all
    claims made against a
debtor
company and to all actions instituted by it for the recovery of debts due to
    the company in the same manner and to the same extent as if the company were
    plaintiff or defendant, as the case may be.

[42]

Section 21 of the CCAA extends to claims for equitable set-off:
Algoma Steel Inc. v. Union Gas Ltd.
(2003),
    63 O.R. (3d) 78 (C.A.), at paras. 13-16. Because successfully raising set-off
    against the insolvent permits a dollar-for-dollar reduction in what would otherwise
    be a liability to the insolvent, claims for set-off are to be viewed with
    caution:
Algoma
, at paras.
    14-15. However, here the motion judge accepted that what Cozy Corner raised was
    a claim for equitable set-off.

[43]

Valle Foam argues that the exception in the Class Action Release only
    applies to permit Cozy Corner to file a claim for payment of the overcharges in
    a CCAA claims process. It argues that the exception does not extend to allowing
    Cozy Corner to raise set-off as a defence when Valle Foam, while under CCAA
    protection, sues it.

[44]

I would not give the exception so narrow a reading. In my view, the
    exception in the Class Action Release preserves the right of class members like
    Cozy Corner to raise claims in insolvency proceedings to the same extent as the
    law applicable to that insolvency proceeding permits. The CCAA governs Valle
    Foams insolvency proceeding and envisages that Valle Foam, as a company
    subject to its protection, may sue to recover on debts owed to it, but that if
    it does, a defendant can raise equitable set-off. Accordingly, I do not view Cozy
    Corners assertion of equitable set-off as falling outside of the right of Cozy
    Corner to seek recovery in a creditor protection, restructuring, insolvency or
    bankruptcy proceeding in Canada, a right which was specifically said not to
    have been impaired by the Class Action Release.

[45]

There is no unfairness to Valle Foam in this conclusion. Although the
    motion judge viewed the settlement as reflecting a choice by Cozy Corner to
    pursue its remedy against [Valle Foam] in the administration of the class
    settlement (para. 68), there was in fact no remedy to be pursued in the class
    settlement as Valle Foam made no payment to settle. More accurately put, the
    settlement channeled claims into Valle Foams CCAA process, and left them
    unimpaired in that process. Cozy Corner, by raising a claim of equitable
    set-off in its defence and counterclaim, is raising a right specifically
    available in the CCAA process, which was not compromised by the Class Action Release.

Was there Sufficient Evidence of Overcharging to
    Raise a Genuine Issue for Trial?

[46]

The motion judge held that, in any event, Cozy Corner failed to lead
    and establish evidence to support its claim of equitable set-off. He stated, at
    paras. 76 to 77, that:

Cozy Inc. did not produce any evidence of
    price-fixing by Valle Inc. during the period of the 2011-2012 Invoices,
    recalling that the Offence Period admitted by Valle Inc. in its guilty plea
    under the
Competition Act
charges (January 1, 1999 to July 2010) pre-dated the 2011-2012 purchases in
    question. Section 9.1 of the Class Settlement Agreement specifically states
    that any step taken by Valle Inc. in the Class Action settlement shall not be
    deemed, construed or interpreted to be an admission of any violation of any
    statute or law, or of any wrongdoing or liability by Valle Inc.

In regard to the 2009 invoices, Cozy Inc. did not
    produce any evidence of the amount of over-charging said to have resulted from
price
fixing by Valle Inc. so as to establish a
    quantification of the damage claim that it asserted. The 10% over-pricing value
    pleaded by Cozy Inc. was not established by any evidence. Cozy Inc. submitted
    that it could not produce this evidence because the Plaintiff had refused
to
provide it. I agree with Corbett J. in [
Sweda Farms Ltd. v. Egg Farmers of Ontario
,
    2014 ONSC 1200], at para. 28, that a burden of persuasion rests on [the responding
    party] to establish that it has taken reasonable steps to obtain the evidence
    it needs for the motion for summary judgment, and that the missing evidence
    would be material to the disposition of the motion. Cozy Inc. has not shown
    that it took reasonable steps to obtain the evidence that it says the Plaintiff
    has on the over-pricing value.

[47]

In my view, the motion judge made a palpable and overriding error in
    his assessment of the evidentiary record in coming to this conclusion.

[48]

The motion judge noted that the Disputed Invoices fell outside the time
    period for which Valle Foam had entered a guilty plea, and that Cozy Corners
    principal had conceded on cross-examination that the only reason these invoices
    were not paid was due to the
Competition Act
charges on which Valle Foam was convicted. The motion judge was
    entitled to view the amount of the Disputed Invoices as established.

[49]

But, even if the amount of the Disputed Invoices sued upon was
    established, any overcharging on prior invoices issued and paid during the
    period of price-fixing could, in the circumstances, qualify as a
    cross-claimso clearly connected with the demand of [Valle Foam] that it would
    be manifestly unjust to allow [Valle Foam] to enforce payment without taking
    into consideration the cross-claim:
Telford
, at p. 212. The parties were in a long-term supply arrangement, and
    overcharging for a period from 2001 to 2010, if it occurred, could form the
    basis of an equitable set-off against amounts properly charged in following
    years. The motion judge made no finding to the contrary. His concern was with
    the evidence in support of the amount of overcharging.

[50]

Valle Foams evidence in support of its motion for summary judgment
    attached the Vallecoccia Affidavit, which had been used in support of its CCAA
    filing. The Vallecoccia Affidavit stated that Valle Foam had agreed to a
    substantial fine in its prosecution by the Competition Bureau based on a
    number of factors, including the Bureaus practice of assuming a 20% overcharge.
    It went on to say that in the absence of a settlement, Valle Foam faced
    substantial exposure in the class action even if [Valle Foam was] only exposed
    to several liability and the Court calculates damages based on
a

modest 5% overcharge
 (emphasis added). The motion judge did not advert to that evidence.

[51]

Given that Valle Foams own evidence included the amount of the
    Competition Bureaus assumption concerning its overcharging (20%), and described
    its potential exposure in the class action using a percentage of overcharging that
    its CEO considered to be modest (5%), there was some basis in the evidence that
    there had been an overcharge which, when applied to the amount of Cozy Corners
    prior purchases from Valle Foam (in excess of $3 million), yielded an amount that
    could substantially negate or reduce Valle Foams claim. Valle Foam supplied no
    other evidence of the amount of the overcharges or to explain the Vallecoccia
    statements.

[52]

The motion judge noted that when asked by Cozy Corner to provide the
    amounts of the overcharges, Valle Foam did not do so. Although the motion judge
    referred to the request and refusal, he did not explain what further steps were
    required to be taken by Cozy Corner at this stage to qualify as reasonable
    steps to obtain the evidence that it says [Valle Foam] has on the over-pricing
    value: at para. 77. Nor did he explain why an adverse inference could not be
    drawn against Valle Foam from its failure to provide such information:
Rules of Civil Procedure
, R.R.O. 1990,
    Reg. 194, r. 20.02 (1);
Indcondo Building Corp. v.
    Steeles Jane Properties

Inc
. (2001), 14 C.P.C. (5
th
) 117 (Ont. Sup. Ct.).

[53]

In my view, taken together, the record disclosed facts showing a
    genuine issue requiring a trial on the amount of the overcharges and their
    effect on Valle Foams claim.

CONCLUSION

[54]

I would allow the appeal, set aside the summary
    judgment, and direct the matter to proceed to trial. The parties did not
    address whether, if Cozy Corner establishes equitable set-off in an amount that
    exceeds Valle Foams claim, it could, in addition to defeating that claim, obtain
    judgment for any excess in a manner analogous to what s. 111 of the
Courts of Justice Act
, R.S.O. 1990, c.
    C.43,
allows in cases of legal set-off. Nothing in these
    reasons preordains the determination of that issue if it arises.

[55]

In accordance with the agreement of the parties, I would award Cozy
    Corner the costs of the appeal in the amount of $5,000, inclusive of
    disbursements and applicable taxes.

Released: March 23, 2020

K.F.

B. Zarnett J.A.

I agree. K. Feldman J.A.

I agree. David Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: 2099082 Ontario Limited v. Varcon
     Construction Corporation, 2020 ONCA 202

DATE: 20200312

DOCKET: C67026

Feldman, Huscroft and Harvison Young JJ.A.

BETWEEN

2099082 Ontario Limited

Plaintiff (Respondent)

and

Varcon
    Construction Corporation
and Trisura Guarantee Insurance Company

Defendant (Appellant)

Todd D. Storms and Zach Flemming-Giannotti, for
    the appellant

Kenneth J. M. Coull, for the respondent

Heard: March 3, 2020

On appeal from the judgment
    of Justice Helen MacLeod-Beliveau of the Superior Court of Justice, dated April
    30, 2019, with reasons reported at 2019 ONSC 2497.

REASONS FOR
    DECISION

[1]

Varcon Construction Corporation (Varcon) appeals from a decision granting
    partial summary judgment to 2099082 Ontario Limited, carrying on business as AWD
    Contractors (AWD).

[2]

The relevant facts are as follows. Varcon was the general contractor for
    a project to construct additional buildings in a correctional facility near
    Joyceville, Ontario. Varcon engaged AWD, a subcontractor, to supply labour and materials
    related to excavation, installation of granular base, construction of pipe
    bedding, and installation of exterior sanitary pipe, backfilling, and
    compaction of the backfill. AWDs work was completed in the summer of 2013.

[3]

A dispute arose between Varcon and AWD when Varcon refused to release
    the balance of AWDs contract price to it. AWD commenced an action in August
    2015, and Varcon filed a statement of defence in November 2015. In late
    September 2016, the sewage system for the building failed. Varcon notified AWD
    that it required a remediation proposal. AWD refused do so unless Varcon
    established that its work had been deficient.

[4]

AWD brought a motion for summary judgment, arguing that Varcon owed it
    the outstanding monies under the construction subcontract. In May 2017, AWDs
    motion was granted, and Varcon was ordered to pay $39,064.87 into court. Varcon
    did so. Payment into the court allowed Varcon to obtain leave to re-open its pleadings
    and issue a fresh counterclaim, which it did in June 2017.

[5]

Varcon counter-claimed for damages, alleging (amongst other things) that
    AWDs work was deficient and that AWD failed to rectify the deficiencies. Varcon
    also claimed that AWD breached the warranty contained in the subcontract and
    was liable for the remediation work on that basis. AWD brought another motion
    for summary judgment to dismiss Varcons counterclaim in its entirety.

[6]

The motion judge granted partial summary judgment in favour of AWD. She determined
    that no trial was required to determine that AWDs work was not deficient, AWD
    did not fail to warn Varcon regarding the unsuitability of certain excavated
    material, and AWD did not fail to rectify the deficiencies. Varcon appeals from
    this decision.

[7]

The motion judge also determined that there was a genuine issue
    requiring a trial with respect to AWDs liability to Varcon under the subcontracts
    warranty provisions. AWD cross-appeals from this decision on the basis that the
    motion judge erred in finding that this was a genuine issue requiring a trial.
    It further submits that the motion judge erred in failing to determine that the
    warranty was inapplicable in the circumstances.

[8]

The appeal is dismissed and the cross-appeal allowed for the reasons
    that follow.

(1)

The main appeal: Did the motion judge err in granting partial summary
    judgment to AWD?

[9]

Varcon argues that the motion judge made palpable and overriding errors of
    fact, which led her to grant AWDs motion. We disagree.

[10]

At the outset, we note that the question of whether summary judgment was
    appropriate was fully argued before the motion judge.

[11]

We accept that the motion judge made some findings of fact that went
    beyond those necessary to determine the central question, which was: did AWD
    complete its work in compliance with the contract and in a non-defective way?

[12]

To the extent that the motion judge made findings as to the actual cause
    of the sewage failure, such findings do not undermine her conclusions, which
    are amply supported by the record.

[13]

In particular, it was open to the motion judge to reject Varcons expert
    evidence, which was given by Mr. Wong. She reasoned that his opinion  that the
    soil compaction had been inadequately performed  was not supportable without reviewing
    the compaction reports under the area of the sewer pipes done at the time of
    construction, which he had not seen. Whose onus it was to produce or obtain
    those records for the litigation was in issue before the motion judge. However,
    for the purpose of obtaining an expert opinion, there is no issue that it was
    Varcons obligation to obtain those records from the compaction overseer or
    from the owner of the project, if Varcon no longer had its copies.

[14]

Although the motion judge gave other reasons which were unnecessary,
    these reasons did not undermine the central basis upon which she found Mr.
    Wongs evidence to be unreliable and not credible.

(2)

The Cross-Appeal:  Did the motion judge err in ordering
    a trial on the warranty issue?

[15]

At the outset of oral argument before this
    court, Varcon submitted that: (i) the motion judge decided that a trial was
    required to determine the applicability of the warranty and any damages issues
    arising from it; (ii) as such, her order in this respect was interlocutory and
    leave to appeal is required; and (iii) AWD had not sought the required leave to
    appeal. Varcon argued that, while it was content for this court to entertain
    the leave application, AWD could not meet the applicable test for leave under
    rule 62.02(4).

[16]

We do not agree.

[17]

This is a case in which the appeals from the
    final and interlocutory aspects of the motion judges order are so
    interrelated, we [are] able to proceed to hear the two appeals together in
    accordance with s. 6(2) of the
Courts of Justice Act
, R.S.O. 1990, c. C.43, on the basis that once the first issue was
    before this court, leave would inevitably have been granted on the second:
Lax
    v. Lax
(2004)
,
70 O.R.
    (3d) 520 (C.A.), at para. 9; see also
Azzeh v. Legendre
, 2017 ONCA 385, 135 O.R. (3d) 721, at para. 26. Accordingly, this
    is a case where both appeals should be heard together by this court.

[18]

In its cross-appeal, AWD argues (i) that the motion
    judge erred in finding that a trial was required on whether AWD was liable to
    Varcon pursuant to the subcontracts warranties, and (ii) that she further
    erred in failing to find that the warranty was inapplicable in these
    circumstances.

[19]

On its merits, we would allow AWDs cross-appeal.
    There was no genuine issue requiring a trial on the warranty issue.

[20]

The record before the motion judge included all
    the evidence necessary to interpret the warranty and consider whether it
    applied to the circumstances. Specifically, the contractual documents contain a
    sufficient basis to resolve the dispute about the warranty. There is no
    indication there would be better evidence or legal arguments on the issues at
    trial. Summary judgment
must
be granted if
    there is no genuine issue requiring a trial (emphasis in original):
Hryniak
    v. Mauldin,
2014 SCC 7, [2014] 1 S.C.R. 87, at para. 68;
    see also Rule 20.04(2),
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194, r. 20.04(2).

[21]

Both parties relied on the contractual
    documents, and the warranty in particular, to support their position. The
    warranty provision reads as follows:

The Subcontractor hereby guarantees the work
    in accordance with the Prime Contract documents. No payment to the
    Subcontractor and no partial or entire use or occupancy of the Subcontract Work
    by the Owner shall be construed as an acceptance of any work or material not in
    accordance with this Subcontract Agreement.

The Subcontractor
    hereby agrees to repair and make good any damages or fault in the Subcontract
    Work []
as the result of imperfect or defective work done or material
    furnished by the Subcontractor
[]. The Subcontractor guarantees the
    Contractor, the Consultant and the Owner, against loss or damage
arising
    from any defects in material or workmanship furnished by the Subcontractor
    under this Subcontract Agreement
for such period as the Contractor is
    liable under the Common Law or Statue or under the specific terms of the Prime
    Contract. [Emphasis added]

[22]

GC3.11(1) of the Prime Contract states:

The Contractor shall promptly remove from the
    site of the Work and replace or re-execute defective Work whether or not the
    defect is the result of poor workmanship, use of defective Material, or damage
    through carelessness or other act or omission of the Contractor.

[23]

Varcon submits that, when reading the warranty
    and Prime Contract together, AWD remains liable to Varcon even if AWDs work
    was not deficient and even if the native soil used was problematic (which
    Varcon denies).

[24]

We do not agree. Varcons interpretation of the
    warranty would effectively make AWD  one of the many subcontractors on the
    project  a guarantor of any or all defects in the project, whether its own
    work has been defective or not. A plain reading of the warranty provisions does
    not support this position and does not accord with sound commercial principles
    and good business sense:
All-Terrain Track Sales and Services Ltd.
    v. 798839
, 2020 ONCA 129, at para. 27
.
Varcon
    also suggested that the warranty applies here because AWD furnished defective
    material, the native soil. However, the contract specified AWD was to use the
    native soil for backfilling. AWD cannot be faulted for adhering to these
    contractual terms.

[25]

The appeal is dismissed. The cross-appeal is
    allowed. Costs of the appeal and cross-appeal in the agreed amount of $6,000,
    all-inclusive, are payable by Varcon to AWD.

K.
    Feldman J.A.

Grant
    Huscroft J.A.

A. Harvison Young J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Abdullahi v. Children's Aid
    Society of Toronto, 2020 ONCA 225

DATE: 20200317

DOCKET: C67253

Rouleau, Hourigan and Roberts
    JJ.A.

BETWEEN

Mohamed Abdullahi, self-rep as Baruutman and on behalf of Prophet
    Muhammad (Peace be Upon Him), and Faiza Ali

Plaintiffs

(Appellants)

and

Childrens Aid Society of
    Toronto, Alberta Danso and Mena Gill, Toronto Police Service Board, Chief Mark
    Saunders, Elizabeth Byrnes, James Casey, Krystal MacLeod, Jason Maunder, Paul
    Walker, Michael Henry, Todd Belza and James Muirhead, The Ministry of Attorney
    General of Ontario, Jennifer Gibson, Rebecca Law and Joanne Bruno

Defendants

(Respondents)

Mohamed Abdullahi, acting in person

Alex Redinger, for the Ministry of the Attorney
    General, Jennifer Gibson, Rebecca Law and Joanne Bruno

Brennagh Smith, for all Police
    Respondents

Heard and released orally: March 13, 2020

On
    appeal from the judgment of Justice Paul M. Perell of the Superior Court of
    Justice, dated June 20, 2019.

REASONS FOR DECISION

[1]

This is an appeal of the order of the motion
    judge on a Rule 21 motion dismissing the appellants claim against the Ministry
    of the Attorney General and certain Crown Attorneys (the MAG Respondents) and
    the libel claim against the Toronto Police Services Board and certain of its
    employees (the Police Respondents).

[2]

We see no error in the motion judges analysis
    and no basis for appellate interference.

[3]

None of the MAG Respondents are proper
    defendants. Even if the proper defendant had been named (i.e. the Attorney
    General for Ontario), the statement of claim failed to disclose a reasonable
    cause of action. The Crown Attorneys are immune from liability in negligence. Further,
    the necessary intent for the torts of malicious prosecution, misfeasance in
    public office, and conspiracy were not pleaded. Nor was the required misconduct
    pleaded for the
Charter
damages claim. The motion judge did not err in
    denying leave to amend because there is nothing in the record to suggest that
    facts exist to establish intent or a threshold of misconduct beyond negligence.

[4]

With regard to the Police Respondents, the libel
    claim was struck because of a failure to comply with the notice requirement and
    limitation period under the
Libel and Slander Act
, R.S.O. 1990, c. L.
    12. We see no error in that analysis.

[5]

The appellants have also raised an argument that
    the motion judge exhibited a reasonable apprehension of bias. There is
    absolutely no merit in that submission.

[6]

The appeal is dismissed.

[7]

Regarding the costs of the appeal, the appellant,
    Mohamed Abdullahi, shall pay costs to the MAG Respondents in the all-inclusive
    sum of $3,000. Mr. Abdullahi shall also pay the Police Respondents their costs
    of the appeal in the all-inclusive sum of $3,000.

Paul Rouleau J.A.

C.W. Hourigan J.A.

L.B. Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Ahmadzai (Re), 2020 ONCA 169

DATE: 20200305

DOCKET: C67229

Benotto, Huscroft
    and Jamal JJ.A.

IN THE MATTER OF: Meladul Ahmadzai

AN APPEAL
    UNDER PART XX.1 OF THE
CODE

Michelle ODoherty, for the appellant

Emily Marrocco, for the respondent,
    Attorney General of Ontario

Marie-Pierre T. Pilon, for the
    respondent, Person in Charge of Royal Ottawa Mental Health Centre

Heard: February 21, 2020

On appeal from
    the disposition of the Ontario Review Board, dated June 11, 2019, with reasons
    dated July 10, 2019.

Jamal J.A.:

Introduction

[1]

The appellant was found not criminally
    responsible on account of mental disorder (NCR) on April 11, 2018, on charges
    of robbery, assault with a weapon, and possession of a weapon for a purpose
    dangerous to the public peace. The appellant had entered a Money Mart store on
    October 17, 2016, approached a female clerk, and demanded cash while
    brandishing a paring knife with a four-inch blade. The clerk activated the
    stores distress alarm and the police arrived within five minutes to arrest the
    appellant. While the police were
en route
the appellant made no effort
    to leave to store. He later explained that a shadow had told him to go to the
    store as the right place to feel better and he had demanded cash even though
    he did not need any money.

[2]

The appellants current diagnoses are
    schizophrenia, first episode (currently in partial remission) and probable
    major depressive disorder (moderate). His two hearings before the Ontario
    Review Board (Board) since the NCR verdict, including the one that is the
    subject of this appeal, both resulted in orders for detention at the Royal
    Ottawa Mental Health Centre (Hospital), with privileges including living in
    the community in approved accommodation.

[3]

The appellant, who was 24 years old at the time
    of the index offences, has been and is currently living with his parents. He was
    last admitted to the Hospital in October 2018. Following that, for the six
    months before the Board hearing, he received monthly antipsychotic injections.
    No concerns regarding his mental health or functioning were raised during this
    period. The attending psychiatrist, Dr. Wood, estimated that the appellant
    would decompensate within two weeks of not receiving his monthly long-acting
    injection. The Board noted, however, that the appellant would be facing
    additional stressors soon as he would be finishing school, looking for
    employment, and starting to live with his spouse.

[4]

Before the Board, the appellant had sought an
    absolute discharge because he no longer posed a significant threat to the
    safety of the public. In the alternative, he sought a conditional discharge. Although
    at the first hearing the Hospital had recommended a detention order, it now recommended
    a conditional discharge as the least onerous and least restrictive disposition.
    This reflected a change in the views of the appellants treatment team,
    including his attending psychiatrist, Dr. Wood, who had previously
    recommended a detention order. Even so, the Board rejected the Hospitals
    recommendation and maintained the detention order in its disposition dated June
    11, 2019.

[5]

The appellant now appeals the Boards
    disposition. For the reasons that follow, I conclude that the Boards
    disposition was unreasonable because it failed to adequately explain why the
    appellants risk could not be adequately managed under a conditional discharge
    as had been recommended by the Hospital.

Discussion

(a)

The statutory scheme

[6]

The Board is tasked with determining whether an
    NCR accused poses a significant threat to the safety of the public:
Criminal
    Code
, R.S.C. 1985, c. C-46, s. 672.54(a). A significant threat to the
    safety of the public means a real risk of physical or psychological harm to
    members of the public that is serious in the sense of going beyond the merely
    trivial or annoying and must be criminal in nature:
Winko v. British
    Columbia (Forensic Psychiatric Institute)
, [1999] 2 S.C.R. 625, at para.
    62. The Board must consider both the likelihood of a risk materializing and the
    seriousness of the harm that might occur:
Kassa (Re)
,
    2019 ONCA 313, at para. 33.

[7]

If the Board concludes that the NCR accused does
    not pose a significant threat to the safety of the public, then he or she must be
    discharged absolutely: s. 672.54(a).

[8]

However, if the Board finds that the significant
    threat threshold is met, it must order the NCR accused to be either discharged
    or detained in custody in a hospital, in either case subject to conditions as
    it considers appropriate: ss. 672.54(b) and (c);
R. v. Lamanna
, 2009
    ONCA 612, 252 O.A.C. 280, at para. 7. The Board must make a disposition that is
    necessary and appropriate in the circumstances (s. 672.54), which has
    been interpreted as meaning the least onerous and least restrictive
    disposition regarding the NCR accuseds liberty interests that is consistent
    with public safety and the NCR accuseds mental condition, other needs, and
    eventual reintegration into society:
Mazzei v. British Columbia (Director
    of Adult Forensic Psychiatric Services)
, 2006 SCC 7, [2006] 1 S.C.R. 326,
    at para. 19;
Lamanna
, at paras. 8-10;
McAnuff (Re)
, 2016 ONCA
    280, at para. 22; and
Esgin (Re)
, 2019 ONCA 155, at paras. 15-17.

(b)

The issues

[9]

The appellant raises two grounds of appeal. He submits
    that the Boards disposition is unreasonable and should be set aside under s.
    672.78(1)(a) of the
Criminal Code
because: (1) the Board erred in
    finding that he posed a significant threat to the safety of the public under
    s. 672.54(a); and (2) in the alternative, the Board erred in imposing a
    detention order rather than a conditional discharge.

(1)

Did the Board err in concluding that the
    appellant posed a significant threat to the safety of the public?

[10]

The appellant asserts that the Boards finding
    that he posed a significant threat to the safety of the public was
    unreasonable. He notes that he has committed no violent acts since the index
    offence in October 2016, he has been compliant with his medication, and his
    treatment team has confirmed his continuing improvement. While he had one
    episode of decompensation in October 2018, no violence ensued, and certainly no
    risk to the public. He asserts that the Board failed to weigh the evidence of
    his attending psychiatrist, Dr. Wood, that the likelihood of him becoming
    non-compliant with his medication was minimal, even if he were discharged
    absolutely. He claims that, properly considered, the evidence did not support a
    finding that he is a significant threat to public safety.

[11]

I do not agree with the appellants submission.

[12]

Parliament has set out in legislation the
    standard of appellate review of the Boards dispositions. Absent a wrong
    decision on a question of law or a miscarriage of justice, this court may allow
    an appeal against a disposition of the Board only where it is of the opinion
    that the disposition is unreasonable or cannot be supported by the evidence:
Criminal
    Code
, s. 672.78(1);
R. v. Owen
, 2003 SCC 33, [2003] 1 S.C.R. 779,
    at paras. 31-32;
Canada (Minister of Citizenship and Immigration) v.
    Vavilov
, 2019 SCC 65, at para. 34.

[13]

I conclude that the Boards finding that the
    appellant was a significant threat to the safety of the public was reasonable.
    The Boards reasoning process and the outcome reflected an internally
    coherent and rational chain of analysis that was justified in relation to the
    facts and law:
Vavilov
, at paras. 83, 85.

[14]

In making its finding, the Board relied on the
    following factors: (i) the index offences are offences of violence; (ii) the
    appellant has a history of violent conduct in the family home, including hitting
    his mother and choking his younger brother; (iii) he is likely to again experience
    psychosis if he becomes non-compliant with his treatment; (iv) he has a prior
    criminal record that shows disregard for court orders; and (v) he does not take
    responsibility for his past misconduct and relies on his inability to recollect
    events that resulted in criminal charges, thereby impeding his treatment teams
    ability to deal with his antisocial conduct. All these findings were supported
    by the evidence before the Board.

[15]

Moreover, while the Hospital Report acknowledged
    that the appellants risk for future violence was low to moderate relative to
    other individuals assessed for violence using the Historical Clinical Risk
    Management-20, Version 3 (an actuarial assessment for assessing and managing
    violence risk), it concluded he posed a significant threat to public safety because
    of his history of not being entirely forthcoming about his symptoms and the
    teams inability to get a better sense of his home environment and his
    day-to-day activities.

[16]

These were all proper factors for the Board to
    consider in reaching its reasoned and internally coherent determination of
    significant threat. These factors included, most importantly, the
    recommendations of the experts who had examined the appellant: see
Winko
,
    at para. 61. Although the appellants condition has improved since the index
    offence, both the Board and his treating psychiatrist remained concerned about
    the lack of transparency regarding his home environment and symptoms, and thus the
    risk factors supporting the significant threat finding continued to weigh more heavily
    in the balance.

[17]

Thus, the Board was not merely uncertain about or
    unable to decide whether the appellant posed a significant threat to the safety
    of the public: see
Winko
, at para. 62. Nor did the Board simply rely
    on historical risk factors relating to the index offence and the appellants
    prior criminal history. Rather, the Board and the treatment team continued to
    have significant concerns that were not assuaged by the other evidence before
    the Board.

[18]

This judgment call, which drew on the Boards expertise
    and required it to weigh the evidence, was one that the Board was especially well
    placed to make, given the inherent difficulty of the subject matter and the
    expertise of the medical reviewers:
Owen
, at paras. 40, 47. As stated
    in
Winko
, at para. 61:

Appellate courts reviewing the dispositions
    made by a court or Review Board should bear in mind the broad range of these
    inquiries, the familiarity with the situation of the specific NCR accused that
    the lower tribunals possess, and the difficulty of assessing whether a given
    individual poses a significant threat to public safety.

[19]

In sum, I have concluded that both the Boards
    reasoning process and its conclusion that the appellant continued to pose a
    significant threat to the safety of the public were reasonable and are therefore
    entitled to deference.

(2)

Did the Board err in imposing a detention order
    rather than a conditional discharge?

[20]

The appellants alternative ground of appeal
    asserts that the Board erred in imposing a detention order rather than a
    conditional discharge.

[21]

At the hearing before the Board, the Hospital
    recommended a conditional discharge as the least onerous and least restrictive
    measure. It conceded that recommending a detention order for the appellant would
    be difficult, as [n]o concerns have been raised over the past six months regarding
    his mental health and his functioning, and he has largely presented himself
    appropriately to the team. The Hospital concluded that [a] conditional
    discharge would allow the team to continue doing a longitudinal assessment of
    Mr. Ahmadzais condition and insight as well as his cooperativeness with the
    team in aiding the achievement of his identified goals. As noted, this recommendation
    reflected a change of opinion of the appellants treatment team from the
    earlier hearing before the Board.

[22]

Nevertheless, the Board rejected the Hospitals
    recommendation and maintained the detention order. The Board reasoned that because
    the appellant was about to face new sources of stress in his life  completing his
    post-secondary studies, getting a job, and cohabitating with his new spouse  a
    detention order would permit him to be admitted to hospital more efficiently if
    he were to decompensate, especially because his parents would likely not seek to
    admit him to hospital under the
Mental Health Act
, R.S.O. 1990, c. M.7.

[23]

The appellant asserts that the Boards reasoning
    process was flawed, and therefore its disposition was unreasonable, because the
    Board failed to adequately address the treatment teams recommendation that a
    conditional discharge would be sufficient to ensure the safety of the public
    in the event that he does experience a deterioration in his mental illness. He
    also contends that the Boards decision unreasonably centred on the perceived
    lack of civil remedies sufficient to bring the appellant to the hospital should
    he refuse to attend on his own. As noted in
Vavilov
, at para. 126: [t]he
    reasonableness of a decision may be jeopardized where the decision maker has
    fundamentally misapprehended or failed to account for the evidence before it.

[24]

I agree with the appellant that the Boards
    reasoning process gave no meaningful consideration to whether his risk to the
    public could be managed under a conditional discharge as recommended by the
    Hospital. The Board therefore failed to evaluate the evidentiary record in
    context, which this court has found to be unreasonable: see
Valdez (Re)
,
    2018 ONCA 657, at paras. 23-24;
Esgin (Re)
, at para. 24. In the
    present case, the Board reasoned that it would be easier to return the
    appellant to hospital under a detention order. But that would always be true
    and could always be used to justify a detention order rather than a conditional
    discharge. The Boards duty to impose the least onerous and least restrictive
    disposition requires more than mere convenience to the hospital:
Valdez
    (Re)
, at para. 21;
Esgin (Re)
, at para. 20. As noted in
Valdez
    (Re)
,
the Board must determine whether the appellants risk could be
    managed under a conditional discharge by examining the evidentiary record in context,
    at paras. 22-23:

The ease of returning an individual to hospital will not always
    justify a detention order as a necessary and appropriate disposition. As
    discussed in
Young Re
, 2011 ONCA 432, 278 O.A.C. 274, at para. 26, there
    are multiple ways in which to secure someones attendance at the hospital when
    they fail to comply with a condition of their discharge. For instance, the
    person could be returned: (1) by convening a new hearing under s. 672.82(1) of
    the
Criminal Code
; (2) by resorting to the breach provisions of the
Criminal
    Code
; or (3) through the committal provisions under the
Mental Health
    Act
, R.S.O. 1990, c M.7.

The Board had a duty to assess the evidentiary record in context,
    including taking into consideration in this case: (1) the risk of
    non-attendance for medication; (2) the mechanisms for securing someones
    attendance at hospital under the conditional discharge framework; (3) the
    length of time that any such steps may take; (4) the effect of that delay on Mr.
    Valdezs mental health; and (5) the risk to public safety posed by any delay in
    treatment.

See also
Esgin (Re)
,
    at paras. 19-25.

[25]

These
    comments apply equally in this case. The Boards reasoning process failed to assess
    whether the appellants risk could be managed under a conditional discharge. The
    appellant has been regularly attending the Hospital as required by the
    conditions of this detention order and is injected with a long-acting
    antipsychotic medication every month. Dr. Wood disagreed with the suggestion
    that the appellant was compliant with his medication only because he was so ordered
    by the Board. He opined that its one of Mr. Ahmadzais strengths in that he
    wants the injection. He also noted that while he suspected that the appellants
    condition would deteriorate within a couple of weeks if he went off his
    medication, the Hospital would know this immediately because he must attend
    for his injection every month.

[26]

In
    summary, the expert evidence before the Board was that the risk of the
    appellants non-attendance for his injection was minimal, immediately
    detectable, and rapidly addressable. Decompensation would occur within a couple
    of weeks if the appellant ceased taking his medication, leaving enough time to
    admit the appellant to hospital if necessary. Apart from relying on administrative
    convenience, which the Hospital itself did not invoke, the Board failed to
    explain why it rejected Dr. Woods expert evidence that the appellants risk to
    the public could now be managed under a conditional discharge. The Boards
    disposition was therefore unreasonable.

Disposition

[27]

I would allow the appeal and refer the matter back
    to the Board for a rehearing on all issues pursuant to s. 672.78(3)(b) of the
Criminal
    Code
. At that time, the Board can consider whether the appellant continues
    to pose a significant threat to public safety, and if so, the appropriate
    disposition in light of the circumstances then prevailing.

Released: March 5, 2020 (M.L.B.)

M.
    Jamal J.A.

I
    agree. M.L. Benotto J.A.

I
    agree. Grant Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Blau v. Wang, 2020 ONCA 194

DATE: 20200310

DOCKET: C67338

Tulloch, Benotto and Jamal JJ.A.

BETWEEN

Andrew Blau

Plaintiff/Respondent

and

Li Wang

Defendant/Appellant

Diana Isaac and Michelle Polster, for the appellant

Shawn Tock, for the respondent

Heard and released orally: March 6, 2020

On appeal from the
    order of Justice Janet Leiper of the Superior Court of Justice, dated July 23,
    2019.

REASONS FOR DECISION

[1]

The motion judge awarded specific performance as a remedy for breach of
    contract. There was no evidence and consequently no finding that the property
    was unique. This is an error of law that had the effect of granting a windfall
    to the respondent: see
Semelhago v. Paramadevan
, [
1996] 2 S.C.R. 415 at paras. 20 and 21.

[2]

The appeal is allowed, and the matter should proceed to trial.

[3]

There will be no costs of the appeal.

M. Tulloch J.A.

M.L. Benotto J.A.

M. Jamal J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Brown v. Canada (Attorney
    General), 2020 ONCA 223

DATE: 20200318

DOCKET: C66789

Simmons, van Rensburg and
    Harvison Young JJ.A.

BETWEEN

Sylviette Rita Brown, Trustee, Greenworld Disability Trust

and Greenworld Farming as applicable to

Property Roll No.1970 000 012 76100 (Lot 7W Con. 2)

Applicants (Appellants)

and

Department of
    Justice, Canada,
Ministry of the Attorney General, Ontario,

Lake Simcoe Region Conservation Authority

Respondents (
Respondent
)

Sylviette Rita Brown, in person

John A. Olah and Francesca
    D'Aquila-Kelly, for the respondent Lake Simcoe Conservation Authority

Heard: February 19, 2020

On appeal from the order of Justice Peter J. Cavanagh of the Superior
    Court of Justice, dated March 5, 2019, with reasons reported at 2019 ONSC 1485.

REASONS FOR DECISION

[1]

In oral argument before this court, the
    appellants  Sylviette Rita Brown, Greenworld Disability Trust and Greenworld
    Farming  clarified that they are appealing only from the motion judges order striking
    out the proceeding commenced by them and Murray Brown in the Superior Court by
    notice of appeal and determination of constitutional rights (court file CV-18-595997)
    (the Superior Court proceeding). They are not appealing the motion judges order,
    dated the same day, dismissing their application for injunctive and other
    relief (Superior Court
court file
    CV-18-595542).

[2]

In the Superior Court proceeding and a related
    motion before the motion judge, the appellants sought relief in relation to
Provincial Offences Act
,
R.S.O. 1990, c. P.33

(POA) prosecutions of Murray Brown under the
Conservation Authorities Act
,
R.S.O. 1990, c. C.27
and a related regulation.

[3]

It is undisputed that those prosecutions
    proceeded in the Ontario Court of Justice before a Justice of the Peace, based
    on five informations laid under Part III of the POA. Mr. Brown was convicted of
    those offences in March 2018. In April 2018, he was sentenced to a $40,000 fine
    and ordered to remediate the property related to the charges.

[4]

On motions brought by the Lake Simcoe Region
    Conservation Authority (LSRCA) and the Ministry of the Attorney General
    (MAG), the motion judge struck out the Superior Court proceeding. He held
    that the appellants had no standing to appeal, as they were not parties to the
    POA prosecutions and, in any event, the proposed appeal was brought in the
    wrong court. The motion judge awarded the Superior Court proceeding costs to
    the LSRCA and the MAG.

[5]

The essence of the appellants argument to this
    court is that the Justice of the Peace overstepped her jurisdiction both with
    respect to the convictions and the remediation order, for the following
    reasons.

[6]

First, they submit that the standing issue is a
    matter involving the identity of the Greenworld Trust, the true owner of the
    property, and that the Trust has a right under the
Canadian Charter of
    Rights and Freedoms
to come before the Superior Court to vindicate its
    rights. Second, they submit that the remediation order was made without
    jurisdiction because Mr. Brown did not either own or have control over the
    property.

[7]

On behalf of the appellants, Mrs. Brown also submits
    that the remediation order was made to reverse changes to the grading of the
    property, changes which the appellants assert were not actually made.

[8]

Based on the record before us, we see no basis
    on which to interfere with the motion judges decision to strike the Superior
    Court proceeding. Any appeal of the POA convictions  which were decided by a Justice
    of the Peace  shall be to the Ontario Court of Justice, presided over by a
    provincial judge: POA, s. 116(2)(a). The Greenworld Trust was not the subject
    of the prosecution and has no freestanding
Charter
right that can be
    asserted in the Superior Court. The appellants remaining arguments were or
    could have been made by Mr. Brown in the course of the prosecutions or any
    appeal to the Ontario Court of Justice. To the extent the appellants were
    denied standing before the Justice of the Peace, any remedy to which they may
    have been entitled did not lie in the form of an appeal to the Superior Court.

[9]

Finally, we note that in his reasons, the motion
    judge observed that Mr. and Mrs. Brown, in their submissions agreed that the
    appeal brought in this court should not proceed, given that Mr. Brown intends
    to commence an appeal to the Ontario Court of Justice.

[10]

Leave to appeal the costs awards is required but
    has not been sought. In any event, we see no clear error in the costs award to
    justify granting leave to appeal.

[11]

For these reasons, the appeal is dismissed with
    costs to the respondent on a partial indemnity scale fixed in the amount of $4,500
    inclusive of disbursements and HST.

Janet
    Simmons J.A.

K.
    van Rensburg J.A.

A. Harvison
    Young J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Caplan v. Atas, 2020 ONCA 205

DATE: 20200312

DOCKET: M51343 (C67979)

Watt, Lauwers and Fairburn JJ.A.

BETWEEN

Gary Caplan, Dale & Lessmann LLP, Robert E.
    Dale, David E. Mende, Christina J. Wallis, Wallis Kagan Shastri LLP, Rahul
    Shastri, David Winter, Stancer Gossin Rose LLP, Gossin Rose LLP, Raymond
    Stancer, Eric Gossin, Mitchell Rose, Garth Dingwall, Ralph Steinberg, David J.
    Sloan, Peoples Trust Company, Derek Peddlesden, Frank Renou, Martin Mallich and
    Sharon Small

Plaintiffs

and

Nadire Atas

Defendant (Appellant)

(Applicant)

Nadire Atas, acting in person

No one appearing for the respondent

Heard and released orally: March 9, 2020

REASONS FOR DECISION

[1]

The applicant has not persuaded us that there is any basis upon which we
    can interfere with the order of MacPherson J.A. However, we grant her an
    extension of time within which to perfect her appeal. This extension will
    expire 60 days after her release from custody.

[2]

We have no authority to refer this matter to the Supreme Court of
    Canada. The
Rules of Civil Procedure
govern interventions and we see
    no need to provide notice in this respect.

[3]

Except as indicated in connection with the time within which to perfect
    the appeal, the motion is dismissed.

David Watt J.A.

P. Lauwers J.A.

Fairburn J.A.


WARNING

This is
    a case under the
Child, Youth and Family Services Act, 2017
and subject
    to subsections 87(8) and 87(9) of this legislation.
These subsections and subsection
    142(3) of
the
Child, Youth and
    Services Act, 2017
, which
deals with the consequences of failure to comply, read
    as follows:

87
(8)
Prohibition
    re identifying child
 No person shall publish or make public
    information that has the effect of identifying a child who is a witness at or a
    participant in a hearing or the subject of a proceeding, or the childs parent
    or foster parent or a member of the childs family.

(9)
Prohibition re
    identifying person charged
 The court may make an order prohibiting
    the publication of information that has the effect of identifying a person
    charged with an offence under this Part.

142
(3)
Offences
    re publication
 A person who contravenes subsection 87(8) or 134(11)
    (publication of identifying information) or an order prohibiting publication
    made under clause 87(7)(
c
) or subsection 87(9), and a director, officer
    or employee of a corporation who authorizes, permits or concurs in such a
    contravention by the corporation, is guilty of an offence and on conviction is
    liable to a fine of not more than $10,000 or to imprisonment for a term of not
    more than three years, or to both.

COURT OF APPEAL FOR ONTARIO

CITATION:

Children's
    Aid Society of Toronto v. S.A.P., 2020 ONCA 208

DATE: 20200316

DOCKET: C67678

Rouleau, Hourigan and Roberts JJ.A.

BETWEEN

Childrens
    Aid Society of Toronto

Applicant/Respondent on Appeal (Respondent)

and

S.A.P.

Respondent/Appellant (Appellant)

and

M.I.

Respondent on Appeal (Respondent)

and

OCL

Respondent on Appeal (Respondent)

Mark Feigenbaum, for the appellant

Kenneth Atkinson, for the respondent Childrens Aid
    Society of Toronto

Andrew Sudano and Robert Shawyer, for the respondent M.I.

Jane Long, for the respondent Office of the Childrens
    Lawyer

Heard and released orally: March 11, 2020

On appeal from the order of Justice Sharon Shore of the Superior
    Court of Justice, dated June 7, 2019, with reasons reported at 2019 ONSC 3482,
    dismissing an appeal from the order of Justice Manjusha Pawagi of the Ontario
    Court of Justice, dated February 14, 2018.

REASONS FOR DECISION

[1]

The appellants two sons, J.P.F. and J.I., were apprehended and
    eventually ordered into the care of M.I., the stepfather of J.P.F. and the father
    of J.I. The Childrens Aid Society of Toronto (the CAS) proposed that the
    children be placed with M.I. permanently while the appellant sought to regain
    custody under the supervision of the CAS. After trial in the Ontario Court of
    Justice, the judge ordered that the children remain with M.I. The appellants
    appeal to the Superior Court of Justice was dismissed.

[2]

On appeal to this court, the appellant raises three main grounds of
    appeal. She argues the trial judge:

1.

erred in
    concluding that there was a risk of emotional harm if the children moved homes
    in the absence of any expert evidence as to the existence of such a risk;

2.

failed to
    adequately consider the many steps taken by the appellant to improve her
    circumstances and whether, in light of these improved circumstances the
    children could be returned to her care with appropriate safeguards; and

3.

failed to
    adequately consider MIs criminal history and violent behaviour.

[3]

In our view the appeal should be dismissed.

[4]

As to the first ground, the appellant argues that, in the absence of
    expert evidence, the CAS had not met its burden to show that the children would
    likely suffer a risk of emotional harm. Under s. 37(2)(f) of the
Child and
    Family Services Act
, R.S.O. 1990, c. C.11,
[1]
not every type and severity of emotional harm was sufficient to establish emotional
    harm justifying state intervention. She maintains that, except in the rarest of
    cases, expert evidence on this point is required. In the appellants
    submission, the trial judges conclusion on harm is conclusory and insufficient
    on this point and, given the absence of expert evidence, the record does not
    support the conclusion of emotional harm requiring state intervention nor does
    it overcome the presumption in s. 57(3) that the children ought to be returned
    to her care.

[5]

We reject this ground of appeal.

[6]

The issue of whether the children were in need of protection had been
    determined on consent of the parties prior to trial. A fresh finding of a need
    for protection pursuant to s. 37 did not have to be made. The issue before the
    trial judge was the appropriate disposition given the earlier finding of a need
    for protection. It is in reaching her conclusion on the appropriate disposition
    that the trial judge found that the order that the children remain with M.I.
    was necessary to protect them in the future. As found by the trial judge, there
    was a risk of emotional harm if the children were removed from M.I. who had
    been their long-term caregiver. That finding was well supported in the evidence
    and is entitled to deference.

[7]

With respect to the second and third grounds of appeal, whether the
    children could be returned to the appellant with appropriate safeguards given
    her improved circumstances and the appropriate weight given to M.I.s criminal
    history and behaviour, both of these were specifically addressed by the trial
    judge in her reasons. We see no basis to interfere with the weight the trial
    judge placed on them nor how she balanced the various factors in coming to her
    determination that the childrens best interests were served by their remaining
    with M.I.

[8]

For these reasons, we dismiss the appeal.

Paul Rouleau J.A.

C.W. Hourigan J.A.

L.B. Roberts J.A.

[1]

This statute was repealed and replaced by the
Child, Youth
    and Family Services Act, 2017
, S.O. 2017, c. 14, Sched. 1, on April 30, 2018,
    subsequent to the trial judges decision.


COURT OF APPEAL FOR ONTARIO

CITATION: Cooper v. The Laundry Lounge,
    Inc., 2020 ONCA 166

DATE: 20200303

DOCKET: C67158

Lauwers, Hourigan and Thorburn
    JJ.A.

BETWEEN

David Cooper by his Litigation Guardian,
    Annette Cooper

and Annette Cooper

Applicants (Respondents)

and

The Laundry Lounge, Inc. and
    André Fiset

Respondents (Appellants)

André Fiset on his own behalf and on
    behalf of The Laundry Lounge Inc.

Krista Chaytor and Caitlin Steven, for
    the respondents

Heard: February 24, 2020

On
    appeal from the judgment of Justice Paul B. Schabas of the Superior Court of
    Justice, dated May 27, 2019, with reasons reported at 2019 ONSC 3216.

REASONS FOR DECISION

Introduction

[1]

This appeal arises from a successful application
    brought by the respondents, David and Annette Cooper, for an order terminating
    two commercial leases for non-payment of rent, an order requiring vacant
    possession of the premises, an order granting leave for the Registrar to issue
    a writ of possession, and orders requiring payment of arrears of rent and
    damages for lost future rent.

[2]

The appellants challenge both final and
    interlocutory orders made by the application judge. We agreed to hear both the
    final and interlocutory aspects of the appeals because the appeals are so
    interrelated that there is good reason to hear them together:
Azzeh v.
    Legendre
, 2017 ONCA 385, 135 O.R. (3d) 721, at paras. 25-26. We also
    granted leave to permit the appellant, André Fiset, to represent the corporate
    appellant.

[3]

At the hearing of the appeals, Mr. Fiset advised
    that the appellants have vacated the premises. Therefore, the relief they now
    seek is limited to setting aside the orders with respect to rental arrears,
    lost future rent damages, pre-judgment interest, and costs.

Facts

[4]

The leases in issue are for two properties on
    adjoining premises.  One property was used as a laundromat, and another was
    used for a dry-cleaning business. Mr. Cooper and the Laundry Lounge, Inc.
    entered into the laundromat lease in 2003. In 2010, Mr. Cooper and The Laundry
    Lounge or a yet-to-be incorporated corporation executed the dry-cleaning
    lease.

[5]

In December 2017, the heat failed in the
    laundromat and subsequently, a frozen pipe burst, causing water damage. The
    respondents offered to reimburse all expenses related to the loss of heat and
    further agreed to a rent abatement for both leases for January 2018.

[6]

The appellants did not provide any receipts for
    expenses to the respondents. Instead, starting in February 2018, the appellants
    stopped paying rent. In March 2018, the appellants brought an action, advancing
    several claims, including breach of contract, misrepresentation, and loss of
    income. The appellants did not serve their statement of claim. The respondents
    commenced their application in August 2018.

[7]

In October and November 2018, the respondents
    took steps to terminate the leases, but the bailiff's efforts to take possession
    were unsuccessful.

[8]

In December 2018, Mr. Fiset paid $35,000, and in
    January 2019, he started paying $7,000 per month, about half of what was owing
    under the leases. These payments were made under Mr. Fiset's obligations for
    the dry-cleaning lease.

[9]

The application judge ruled that the respondents
    were entitled to the relief sought and that the appellants had not established
    a right of set-off pursuant to s. 35 of the
Commercial Tenancies Act
,
    R.S.O., 1990, c. L.-7. He found that there was no evidence filed in support of
    the claim for set-off.

Analysis

[10]

The appellants raise several grounds of appeal,
    which may be broadly categorized as follows: (i) procedural irregularities
    regarding the application; (ii) objection to the respondents use of self-help
    remedies; (iii) failure to mitigate damages; and (iv) an allegation that the
    application judge was biased.

[11]

We do not give effect to any of these grounds of
    appeal.

[12]

We agree with the application judge that an
    application was the appropriate procedure, given the straightforward factual
    and legal issues in play. The fact that the appellants commenced an action does
    not impact that conclusion.

[13]

The respondents, as the title holders to the
    properties, were the proper parties to the application, even though they did
    not manage the properties. Their son, Allen Cooper, who is involved in the day-to-day
    operation of the properties, provided evidence and was extensively
    cross-examined.

[14]

There was nothing improper in the appellants
    exercising their self-help remedies under the
Commercial Tenancies Act
.

[15]

The submission made in the appellants factum
    regarding mitigation of damages is based on a failure to re-let the laundromat
    after it was allegedly vacated before the return of the application. The application
    judge's finding that the laundry lease was not surrendered was well-grounded in
    the evidence. Therefore, we see no error in his conclusion that rent was owing
    up to the date of the hearing.

[16]

Mr. Fiset further argues that the application
    judge erred in awarding damages for lost rent for the balance of the lease
    term, being approximately 11 months, because the respondents failed to
    establish that they made reasonable efforts to re-let the properties. We do not
    give effect to that ground of appeal. Implicit in the application judges
    reasons was a finding that given the relatively short period left in the
    leases, this was a reasonable period to market the properties and obtain new
    tenants. That was a conclusion available to the application judge and we see no
    basis for appellate interference.

[17]

The allegation regarding bias appears to be
    based on the fact that the application judge did not make specific reference to
    heating and flooding issues in the dry-cleaning premises. The application judge
    was under no obligation to reference every fact in his endorsement. In any
    event, the failure to do so does not constitute bias.

[18]

Finally, in his oral reply submissions, Mr.
    Fiset requested that we make clear in our reasons that nothing in the application
    judges reasons or judgment precludes the appellants from prosecuting their
    action. We cannot accede to that request. The determination of that issue is
    not for this court but may be dealt with by a judge of the Superior Court at
    trial or on a motion.

Disposition

[19]

The appeal is dismissed. The appellants shall
    pay the respondents their costs of the appeal, fixed in the all-inclusive amount
    of $10,000.

P. Lauwers J.A.

C.W. Hourigan
    J.A.

Thorburn J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Das Logistics Transport Inc. v.
    Artex Environmental Corporation, 2020 ONCA 168

DATE: 20200303

DOCKET: C67145

Tulloch, Benotto and Jamal JJ.A.

BETWEEN

Das Logistics Transport
    Inc.

Plaintiff/Defendant by Counterclaim

(Respondent)

and

Artex Environmental
    Corporation &

Tec
    International Corporation

Defendants/Plaintiffs
    by Counterclaim

(Appellant)

and

Kurt Peniston and Firoun
    Ismail

Third Parties

Jaspal Sangha, for the appellant

Tyler H. McLean, for the respondent

Heard: March 2, 2020

On appeal
    from the judgment of Justice Gisele M. Miller of the Superior Court of Justice,
    dated May 29, 2019.

APPEAL BOOK ENDORSEMENT

[1]

Punitive damages are an exceptional remedy meant
    to punish wrongful acts that are so malicious that they are worthy of
    punishment. The motion judge provided no analysis as to why she was prepared
    to award punitive damages of $50,000.

[2]

The decision is consequently not capable of
    appellate review. The appeal is allowed. No costs.


COURT OF APPEAL FOR ONTARIO

CITATION: Fermar Paving Limited v. 567723
    Ontario Ltd. o/a Winters Pit, 2020 ONCA 173

DATE: 20200306

DOCKET: C66011

Lauwers, Hourigan and Thorburn
    JJ.A.

BETWEEN

Fermar
    Paving Limited

Plaintiff (Respondent)

and

567723 Ontario Ltd. o/a Winters
    Pit

Defendant (Appellant)

Marco Drudi, for the appellant

Charles C. Chang, for the respondent

Heard: February 24, 2020

On
    appeal from the judgment of Justice Carole J. Brown of the Superior Court of Justice,
    dated September 21, 2018, with reasons reported at 2018 ONSC 5485.

REASONS FOR DECISION

[1]

Fermar Paving Limited (Fermar) is an Ontario
    road builder. On July 29, 2010, Fermar entered into a construction contract
    with the Ontario Ministry of Transportation (MTO) to provide road construction
    on a portion of Highway 26 in Simcoe County (the Project).

[2]

To complete the Project, Fermar required two
    types of aggregate: granular A and granular B. The aggregate was required
    to meet the Ministrys specifications.

[3]

Rocco Buono, the principal of 567723 Ontario
    Limited, operating as Winters Pit (Winters Pit), approached Fermar to
    discuss Fermars needs for aggregate.

[4]

After some discussion, Fermar sent a document
    (the Document) to Winters Pit setting out the proposed terms of an
    agreement. Winters Pit requested a higher price for the granular A and
    granular B but asked for no other changes. The Document was signed by both
    parties on September 3, 2010.

[5]

A few days later, through its solicitor,
    Winters Pit said that it could not provide as much aggregate as it was
    required to in accordance with the signed Document. There were discussions over
    several months, but no new signed agreement was reached.

[6]

In November 2010, Fermar was told to leave the
    site or Winters Pit would commence proceedings for trespass.

[7]

Fermar brought an action for breach of contract
    by repudiation of the agreement and sought damages to compensate Fermar for the
    cost of having to source the aggregate from elsewhere.

[8]

The trial judge found that:

a)

The Document was an enforceable agreement;

b)

The agreement was not void or illegal, nor did
contra
    proferentum
apply as the terms were not ambiguous; and

c)

Winters Pit repudiated the terms of the
    agreement such that it was responsible to pay the respondent damages in the
    amount of $816,436.37.

[9]

Winters Pit appeals from the trial judges
    decision. The appeal is allowed on the basis that the trial judge erred in her
    determination of damages. The issue of damages is remitted to a judge of the
    Superior Court of Justice.

WINTERS PITS ARGUMENTS ON APPEAL

[10]

Winters Pit claims that the trial judge made
    palpable and overriding errors of fact and mixed fact and law in finding the
    Document was an enforceable contract and in awarding damages.

[11]

Winters Pit submits that there was no binding
    contract: the Document was only an agreement in principle. Moreover, the
    Document was void as Fermar knew it was illegal for Winters Pit to extract
    more than 100,000 tonnes of aggregate per year, since the extraction licence
    was attached. Winters Pit also argues that the terms of the Document are
    unclear. Because the Document was drafted by Fermar, the rule of
contra
    proferentum
applies.

[12]

Winters Pit denies that it repudiated any
    contract with Fermar.

[13]

Winters Pit argues that Fermar is not entitled
    to damages because Winters Pit did not breach any contract. Alternatively,
    Winters Pit argues that Fermar failed to adduce cogent evidence to support its
    claim for damages or its efforts to mitigate its damages.

ANALYSIS OF THE TRIAL JUDGES DECISION AND
    CONCLUSION

Liability of Winters Pit for Repudiation of the Agreement

[14]

For the following reasons, we see no error in
    the trial judges conclusion that there was a valid agreement between Fermar
    and Winters Pit and that Winters Pit repudiated that agreement:

a)

Fermar provided Winters Pit with a draft
    agreement on September 2, 2010. After Fermar visited the site, engaged in
    testing, and revised the terms at Winters Pits request, Winters Pit signed
    the draft agreement on September 3.

b)

The Document provides that
Winters Pit
    warrants and represents
that a minimum of 335,000 tonnes of granular B
    material is available to F.P.L. and that F.P.L. shall have the right to
    manufacture a minimum of 140,000 tonnes of granular A (emphasis added).

c)

The terms of the two-page agreement were clear
    and unambiguous.

d)

The agreement was not rendered void because
    Winters Pits licence did not permit it to extract the quantities of granular
    A and B stipulated in the agreement. An increase in the licenced quantities was
    necessary. It was incumbent on Winters Pit to revise the terms of agreement
    before signing. It failed to do so at its peril.

e)

On September 7, 2010, counsel for Winters Pit
    wrote to the Senior Operations manager of Fermar to advise that:

We have been consulted in connection with a
    September 1, 2010 agreement between 567723 Ontario Limited and Fermar Paving
    Limited.
Prior to signing the agreement
, our client did not note the
    quantity requirements of the agreement. O
ur client cannot comply with the
    agreement and is not prepared to fulfil its obligations under the agreement
[Emphasis added.]

f)

On September 15, counsel for Fermar wrote to
    Winters Pit to reiterate that an agreement had been reached and that Winters
    Pit was now seeking to resile from the agreement. He stated that Fermar was
    prepared on a completely without prejudice basis to engage in further
    discussions.

g)

Winters Pit obtained no extension or temporary
    increase to the tonnage of aggregates that could be extracted from Winters
    Pit.

h)

Fermar tried to resolve its differences with
    Winters Pit while maintaining its position that the September 3 Document was
    an enforceable contract. None of Fermars overtures as per Fermars letters of
    October 22 and November 11, were accepted by Winters Pit.

i)

When Fermar put its equipment on the property in
    November 2019, Fermar was told to leave the property, failing which Winters
    Pit would sue Fermar for trespass. At no time thereafter did Winters Pit
    invite Fermar back or indicate that Winters Pit was ready, willing, and able
    to meet the terms of the agreement.

[15]

The appeal in respect of liability is therefore
    dismissed.

Damages

[16]

Fermar sourced its aggregate elsewhere and sued
    Winters Pit for breach of contract.

[17]

The trial judge correctly held that as a result
    of Winters Pits repudiation of the agreement, Fermar was entitled to be
    restored to the position that it would have been in had Winters Pit met its
    obligation to supply all necessary aggregate. Fermar was required to find other
    sources of aggregate and incurred costs for equipment rental, cost of the
    aggregate, transportation, labour and other valid expenses. Fermar had an
    obligation to mitigate its losses.

[18]

The trial judge awarded Fermar damages in the
    amount of $816,436.37, which she found to be the difference between what Fermar
    would have paid to Winters Pit and the amount it did pay to the third-party
    suppliers for the aggregate.

[19]

In so doing, the trial judge relied on only two
    documents. The first was a document entitled, Cost Summary for Alternate
    Sourcing of Granular A and Granular B by Supplier, which purported to
    summarize approximately 1000 pages of invoices and other documents. The second
    was a document entitled, Production Cost Analysis, which compared the costs
    that Fermar says it would have paid to Winters Pit and the costs it paid to
    third parties for the aggregate. These documents were adduced at trial through
    Charles Ezomo, Fermars project manager.

[20]

The trial judge noted that Mr. Ezomo was
    responsible for planning all assigned projects, preparing contracts, progress
    certificates, payments and completion of the projects. He oversaw the
    completion of this project and obtained alternate sources of aggregate. Mr.
    Ezomo testified that Fermar obtained the requisite Granular A from Brock Pit
    and Granular B, as well as some additional Granular A, from Walkers Pit.

[21]

Mr. Ezomo testified that he had to approve all
    invoices used in the analysis when they were originally received and did not
    review them again for purposes of preparing the summary. Mr. Ezomo is not an
    accountant.

[22]

Mr. Ezomo did not do an independent analysis but
    prepared the cost summary based on a report generated by Fermars accounting
    department. It is not clear who prepared the accounting report. None of the
    source documents were produced at trial.

[23]

Although the two summaries were included in a
    Joint Book of Documents, there appears to have been no agreement that the
    parties were thereby acknowledging the truth of the contents of those
    documents.

[24]

We agree with the trial judge that Fermar is
    entitled to damages resulting from the repudiation of the agreement by Winters
    Pit and mitigated its losses by sourcing aggregate from elsewhere. Fermar was
    not required to continue to deal with Winters Pit, who the trial judge found
    was not willing to provide Fermar with any more aggregate.

[25]

It is not possible on this record to calculate
    the amount of the appellants damages because the source documents were not
    part of the trial record, nor was there agreement on the quantum of damages at
    trial. Because it is not possible for this court to make the factual findings
    necessary to determine these issues on the existing trial record, we return
    these issues to a judge of the Superior Court to quantify the damages:

Gholami
    v. The Hospital of Sick Children
, 2018 ONCA 783, 2019 C.L.L.C.
    210-007.

[26]

There is no order as to costs of this appeal
    given the divided success.

P.
    Lauwers J.A.

C.W.
    Hourigan J.A.

J.A.
    Thorburn J.A.