COURT OF APPEAL FOR ONTARIO

CITATION:
Benzie v. Hania, 2012
    ONCA 766

DATE: 20121113

DOCKET: C55155

Goudge, Gillese and Armstrong JJ.A.

BETWEEN

Michael Benzie and Norman Benzie

Applicants (Appellants)

and

Barbara Hania and Mitchell Kunin

Respondents (Respondents)

Michael Meredith and Clarke Tedesco, for the appellants

Allan S. Halpert, for the respondents

Heard: August 21, 2012

On appeal from the judgment of Justice J. David McCombs
    of the Superior Court of Justice, dated February 9, 2012, reported at 2012 ONSC
    976.

Gillese J.A.:

[1]

Can a right of first refusal bind non-parties?  Is it registrable under
    the
Land Titles Act
, R.S.O. 1990, c. L.5 (the
Land Titles Act
)?
    These questions lie at the heart of this appeal.

BACKGROUND

[2]

Reuben Kunin (Mr. Kunin) and Sybil Kunin had three children:  Michael
    Benzie (Michael), Barbara Hania (Barbara) and Mitchell Kunin (Mitchell).  In
    1981, they bought a 66-acre farm property on the Oak Ridges Moraine in
    Newmarket, Ontario, for $425,000 (the Property).  For financial and tax
    reasons, title to the Property was taken in Barbaras name.

[3]

Michael was married and lived in Israel for a number of years.  She has
    two sons from that marriage: Marc Davidson and Adam Davidson.

[4]

Barbara has three children.  Mitchell has two.

[5]

In 1986, while Michael was vacationing in New Mexico, U.S.A., she met
    Norman Benzie (Norman).  Shortly thereafter they got engaged.  Michael planned
    to sell her house in Toronto and move to New Mexico to marry and live with Norman.

[6]

To persuade Michael to stay in Canada, her father proposed to sell her the
    Property on which she and Norman could make their home.  Michael and Norman spent
    about $250,000 on renovations and improvements to the Property before the
    purchase.  They have lived on the Property ever since and have completed many
    more renovations.

[7]

Barbara opposed the sale of the Property to Michael because she and
    Mitchell wanted it to remain a family property.

[8]

To keep peace in the family, Mr. Kunin proposed that the three children
    enter into an agreement that would contain two key provisions.  The first was a
    right of first refusal should Michael ever decide to sell the Property.  The
    second would provide for equal distribution among the three children of the net
    proceeds of any future sale of the Property.  Net proceeds meant the sale
    proceeds less sale expenses and less a repayment to Michael of $425,000, the
    amount that she paid to purchase the Property, plus the amounts that she spent
    on renovations and improvements to the Property, plus 6% simple interest on
    both amounts.

[9]

Title to the Property was conveyed into Michaels name on August 24,
    1987.

[10]

On
    August 25, 1987, the three children executed an agreement that contained the
    agreed on terms (the Agreement).  They expressly agreed that the Agreement
    would enure to the benefit of and be binding on, among others, their respective
    heirs, administrators, and successors (the enurement provision).  The Agreement
    also expressly provided that notice of it might be registered on title.

[11]

Paragraphs
    5, 6, 9 and 10 of the Agreement are the most germane for the purposes of this
    appeal.  They read as follows:

5.       If [Michael] shall desire to sell the [Property], she
    shall first offer in writing to sell the [Property] to [Barbara] and [Mitchell]
    and if the parties can come to an agreement between themselves as to the sale
    price and the terms thereof, then [Michael] shall sell the [Property] to [Barbara]
    and [Mitchell] on the said terms and at the said price in which event the
    provisions of paragraph 4 with respect to the division of the proceeds of sale
    among the parties shall apply.

6.       If [Michael] shall have offered to sell the [Property]
    to [Barbara] and [Mitchell] as provided in paragraph 5 of this agreement and if
    within a period of thirty days after the giving of such notice, the parties
    have not been able to come to an agreement as to the purchase price or the
    terms of sale, then [Michael] shall be free to sell the [Property] to any third
    party provided that she again offers to sell the [Property] to [Barbara] and [Mitchell]
    on the same terms and conditions as she is prepared to accept from such third
    party. In this respect, [Michael] shall forward to [Barbara] and [Mitchell] a
    copy of the agreement setting forth the terms and price that she is prepared to
    accept and notice that she is prepared to accept such offer which documents
    shall constitute an offer from [Michael] to [Barbara] and [Mitchell] to sell the
    [Property] at that price and on the terms therein set forth. If [Barbara] or [Mitchell]
    fail to accept such offer by written notice to this effect within a period of
    five business days after receipt of the offer from [Michael], then [Michael]
    shall be free to sell the [Property] to such third parties.

9.       This agreement shall enure to the benefit of and be
    binding upon the parties hereto and their respective heirs, administrators,
    executors, successors and assigns but the benefit thereof shall not be
    assignable.

10.     The parties agree that notice of this agreement may be
    registered on title.

[12]

Michael
    and Norman were married on November 27, 1987.

[13]

On
    November 30, 1987, Norman signed a document in which he promised Mitchell and
    Barbara that he would be bound by the terms and conditions of the Agreement and
    that he would not deal with the Property except in accordance with the
    Agreement (the Norman Undertaking).

[14]

The
    Norman Undertaking reads as follows:

To:  Mitchell Kunin and Barbara Hania

I hereby covenant and agree with you that the terms and
    conditions of the agreement between you and Michael Ann Davidson dated the 25th
    day of August, 1987 with respect to the lands known as [the Property] are
    binding on me and I will not deal with my interest in the said lands except in
    accordance with the said agreement.

[15]

Also
    on November 30, 1987, in consideration of natural love and affection, Michael
    conveyed title to the Property to herself and Norman as joint tenants.

[16]

Because
    of the Norman Undertaking, Barbara and Mitchell did not object to the conveyance
    of the Property into Michael and Normans joint names.

[17]

On
    December 23, 1987, the Agreement, with the Norman Undertaking appended, was registered
    on title pursuant to the provisions of the
Registry Act
, R.S.O. 1980,
    c. 445 (the
1980 Registry Act
).

[18]

In
    1999, title and other registrations pertaining to the Property were migrated
    from the Registry system to the Land Titles system.  The Agreement remained
    registered on title when the Property was converted to the Land Titles system
    of registration.

[19]

In
    2001, the
Oak Ridges Moraine Conservation Act

came into force
    and in 2002 the Oak Ridges Moraine Conservation Plan was completed.  As a
    result, the only permitted uses of the Property are conservation, non-motorised
    trails, and existing legal uses.  Together, the statute and plan have the
    effect of precluding any residential or commercial development of the
    Property.

[20]

Strife
    among the siblings and their children about entitlement to the Property on the
    death of Michael and Norman led them, in 2010, to bring an application to have
    the Agreement deleted from the Land Titles registry.  In the application, they
    also sought a declaration that the Agreement is not binding on non-parties,
    specifically Norman, Marc Davidson, Adam Davidson and any other of Michaels
    heirs.  They provided evidence of valuations for the Property that demonstrated
    that if it were sold, once their costs of purchase, renovation and improvement
    were repaid in accordance with the terms of the Agreement, there would be
    nothing left to distribute.  Thus, they argued, the Agreement was pointless and
    an unnecessary source of friction, and it should not be permitted to remain
    registered on title.

[21]

By
    judgment dated February 9, 2012, the application was dismissed (the Judgment).

[22]

The
    application judge held that the enurement language in para. 9 of the Agreement
    is evidence of the clear intention of the parties that it was to survive the
    death of the parties.  As well, he found that the Agreement created an
    interest in the Property sufficient to bind anyone who might inherit it.  Thus,
    he concluded, although Michaels children were not parties to the Agreement,
    those who inherit the Property do so subject to its terms.

[23]

Further,
    the application judge held that Norman was bound by the Agreement because when he
    signed the Norman Undertaking, Barbara and Mitchell provided consideration in
    the form of forbearance from enforcing their rights under the Agreement.  The
    application judge opined that the provisions of the Agreement that come into
    effect if Michael chooses to sell the Property would have been triggered on
    disposition of half of her interest in the Property to Norman.  Forbearance
    from attempting to enforce the Agreement was valid consideration for the Norman
    Undertaking.

[24]

Finally,
    the application judge refused to strike the Agreement from the Land Titles
    registry.  He reasoned as follows.  The Agreement was lawfully registered on
    title in 1987 pursuant to s. 22 of the
1980 Registry Act
(the relevant
    statutory authority at the time).  In 1999, when the Property was moved to the
    Land Titles system of registration, s. 71(1) of the
Land Titles Act

permitted the registration of notices, cautions, inhibitions or other
    restrictions as are authorized by this Act or by the Director of Titles.  As
    the Agreement was registered under the new regime under the authority of the
    Director of Titles, it was properly registered on title.

[25]

Michael
    and Norman (the appellants) appeal.  Barbara and Mitchell are the respondents
    in the appeal (the respondents).

THE ISSUES

[26]

The
    appellants submit that the application judge erred in each of his
    determinations.  They ask this court to find that the application judge erred
    in concluding that the:

1.

Agreement is binding
    on Michaels heirs;

2.

Norman Undertaking
    is a binding contract; and

3.

Agreement is registrable
    under the
Land Titles Act
.

IS THE AGREEMENT BINDING ON MICHAELS HEIRS?

[27]

The
    appellants submit that the Agreement is not binding on non-parties, including
    Michaels heirs: Marc Davidson, Andrew Davidson and Norman.  They say that the
    Agreement could bind such persons only if it falls within an exception to the
    doctrine of privity of contract or if the Agreement runs with the land such
    that a successor in title takes subject to its terms.  They argue that the
    Agreement neither falls within an exception to the doctrine of privity of
    contract nor runs with the land and, therefore, it is not binding on
    non-parties.

[28]

The
    doctrine of privity of contract stands for the proposition that a contract
    cannot, as a general rule, confer rights or impose obligations arising under it
    on any person except the parties to it.  This doctrine has two very distinct
    components or aspects.  On the one hand, it precludes parties to a contract
    from imposing liabilities or obligations on third parties.  On the other hand,
    it prevents third parties from obtaining rights or benefits under a contract.
    See
London Drugs Ltd. v. Kuehne & Nagel International Ltd.
, [1992]
    3 S.C.R. 299, at para. 200.

[29]

There
    are established exceptions to the second aspect of the doctrine.  In certain
    situations, the courts will permit strangers to enforce the contract and take
    the benefit of its provisions.  The established exceptions are agency, trust,
    assignment or assumption, exceptions established by statute, and restrictive
    covenants.  See
Greenwood Shopping Plaza Ltd. v. Beattie et al.
,
    [1980] 2 S.C.R. 228, at para. 11.

[30]

The
    appellants correctly assert that none of these exceptions apply to the
    Agreement.

[31]

However,
    it is not the second aspect of the privity doctrine that is in play in this
    appeal.  That is, the question for the court is not whether a non-party can
    take the benefit of the Agreement.  Rather, the question is whether the
    obligations under the Agreement will bind Michaels heirs and successors in
    title.

[32]

At
    first blush, it might appear that the first aspect of the privity doctrine
    applies and Michaels heirs, as third parties, are not bound because the
    parties to the Agreement could not impose liabilities or obligations on third
    parties.  Not so.

[33]

Such
    an application of the privity doctrine would be incorrect because it ignores
    the effect of death on contractual rights and obligations.  Death does not
    terminate a contract unless the contract is based on personal considerations,
    skill or confidence (a personal contract).

[34]

As
    Professor G.H.L. Fridman explains in
The Law of Contract in Canada
,

6th ed., (Toronto: Carswell, 2011), at p. 661, apart from personal
    contracts, contracts continue after death.

At common law, the death of either party did not interfere with
    the continuation of the contract or of an action for breach of contract, unless
    the contract was based on personal considerations, skill or confidence.  Any
    rights of action that accrued to a party or existed against him could be
    brought by or against his estate.  Hence, on death, contractual rights and
    liabilities passed, and still pass to the executors or administrators of the deceased,
    that is, his personal representatives, on intestacy or under the will.  In
    consequence, save in respect of personal contracts, one may speak of the
    involuntary and general assignment of all contractual rights and liabilities
    which results from death as a matter of law, regardless of any wishes or acts
    of the deceased contracting party.

[35]

The
    Agreement relates to the sale of the Property.  Michaels presence is not
    essential to its performance.  As the Agreement is not dependent on some special
    skill, knowledge or other personal quality of the parties to it, it is not a
    personal contract and it survives Michaels death.

[36]

What
    does this mean in respect of devolution of the Property?  Because the Agreement
    survives death, Michaels estate will be in the same position as Michael
    herself  it will be bound by the Agreement.  Therefore, it will be bound to
    deal with the Property in accordance with the terms of the Agreement.

[37]

But,
    the question becomes, if Michaels estate conveys the Property to her heirs, will
    they be bound by the Agreement?
[1]
In my view, they would be.  As I have explained, the estate would be bound to
    deal with the Property in accordance with the Agreement.  Therefore, the estate
    would pass title to the Property to the heirs subject to the Agreement.  Heirs do
    not fall into the category of a bona fide purchaser for value without notice.
    Not only do they have actual notice of the Agreement in this case, as heirs they
    are volunteers in the sense that they give no consideration for title to the Property.
    As such, the heirs could not stand in a better position than the estate.
    Therefore, like the estate, the heirs would take title to the Property subject
    to the Agreement.

[38]

There
    is surprisingly little jurisprudence on the question of what happens to a right
    of first refusal on the death of the grantor of the right of first refusal.
    The two cases of which I am aware both support the reasoning advanced above.
    Those cases are
Lawson v. Poirier Estate

(1997), 143 D.L.R.
    (4th) 660 (N.B. C.A.) and
Heintzman v. Poole
, 2008 CarswellOnt 4484
    (S.C.J.), 70 R.P.R. (4th) 107.

[39]

The
    facts of
Poirier Estate
are these.  Mssrs. Lawson, Poirier and Kay were
    equal shareholders in Cable Services Ltd., a company that provided cable
    television service to metropolitan Moncton, New Brunswick.  Mssrs. Lawson and
    Poirier agreed to sell their shares to Mr. Kay.  When they discovered that
    their shares were worth at least twice the amount that they had agreed to
    accept from Mr. Kay, they took steps to rescind their agreements with Mr. Kay.

[40]

One
    of the steps that they took was to enter into an agreement in which, among
    other things, they agreed that they would not sell their Cable Services shares
    without the consent of the other and that each would have a right of first
    refusal over the shares of the other (the Contract).

[41]

Mr.
    Poirier died unexpectedly.  His widow, Rose Marie Poirier, was both executrix
    of his estate and sole beneficiary.  She sold his shares to Mr. Kay.  Mr.
    Lawson then sued Mrs. Poirier, both as executrix of her deceased husbands
    estate and personally.

[42]

At
    first instance, the trial judge found that the Contract survived Mr. Poiriers
    death and was binding on his estate.  He further found that Mrs. Poirier breached
    the Contract when, among other things, she sold her deceased husbands shares
    to Mr. Kay without Mr. Lawsons consent.  He gave judgment against Mrs. Poirier
    in both capacities, namely, as executrix and personally.

[43]

Mrs.
    Poirier appealed.  The New Brunswick Court of Appeal dismissed her appeal.

[44]

The
    Court began by affirming that the Contract bound Mr. Poiriers estate.  Despite
    Mr. Poiriers extensive business involvement with Cable Service Ltd., the
    Contract was not personal because Mr. Poiriers presence was not essential for its
    performance.  Accordingly, the Contract survived Mr. Poiriers death and was
    binding on his estate.

[45]

The
    Court considered whether Mrs. Poirier was personally liable or only in her
    capacity as executrix of her deceaseds husbands estate.  It concluded that
    the trial judge made no error when he found her to be liable in both capacities.

[46]

Thus,
    it can be seen,
Poirier
is consistent with my conclusion that both
    Michaels estate and her heirs will be bound by the Agreement.  In
Poirier
,
    the New Brunswick Court of Appeal found that the estate was bound because the
    contract survived death.  Accordingly, when Mr. Poirier died, his shares were
    transmitted to his estate subject to the terms of the Contract.  Mrs. Poirier,
    as executrix, was bound to complete performance of the Contract at Mr. Lawsons
    demand.  While the court did not explain why it found Mrs. Poirier to be bound
    as beneficiary, I would suggest that the reasoning to support its result is
    that offered above:  Mrs. Poirier, as heir, could stand in no better position than
    the estate.  The estate could not transmit to Mrs. Poirier, as heir, a better
    interest in the shares than it had and it held the shares subject to the
    Contract.  To hold that Mrs. Poirier, as heir, could take the shares unfettered
    by the Contract would undermine the principle that, apart from personal
    contracts, contracts  and their attendant benefits and burdens  survive
    death.

[47]

A
    similar result obtained in
Heintzman
, the relevant facts of which are as
    follows.  Two people owned neighbouring islands in Georgian Bay.  They agreed
    to provide rights of first refusal to one another.  The contract permitted the
    parties to transfer or sell their island to their own children without
    triggering the others right of first refusal provided that the children would then
    be bound by the right of first refusal.

[48]

One
    of the parties transferred his property to two of his children by means of a
    trust arrangement.  The children subsequently transferred the property to a
    third party.  The application judge was required to decide who was entitled to
    the property: the holder of the right of first refusal or the third party
    purchaser.

[49]

The
    application judge found in favour of the holder of the right of first refusal.
    She found that the transfer to the trust was a transfer to the children and that
    the children were bound by the right of first refusal on receipt of the
    property.  Accordingly, the right of first refusal was triggered when the
    children entered into an agreement for the purchase and sale of the property.  When
    the agreement for purchase and sale was signed, the right of first refusal was converted
    into an option to purchase the property on the same terms.  As such, it was an
    enforceable right with priority over any claim that the purchasers had under
    the agreement for purchase and sale.

[50]

In
    short, in
Heintzman
the grantors children were held to take the land
    subject to the right of first refusal.  They could not sell the land free from
    the obligations imposed by it.  This result and reasoning is consistent with my
    conclusion that if Michaels estate transmits the Property to her heirs, they
    will take subject to the Agreement.

[51]

Accordingly,
    if Michaels children take the Property in their capacity as Michaels heirs
    and successors in title, they will take subject to the Agreement and they will
    be bound to deal with the Property in accordance with its terms.

[52]

Similarly,
    the Agreement will be binding on Norman should he take as Michaels heir and
    successor in title.  In any event, as I explain below, Norman is bound by the
    Agreement by reason of the Norman Undertaking.

[53]

I
    end with two observations.  First, the conclusion I have reached is entirely
    consistent with the parties express intention, as evidenced by the enurement
    provision, that both the benefit and the burden of the Agreement will devolve
    to the parties heirs.  Second, this result accords with fairness
    considerations.  It would be manifestly unfair to permit Michaels heirs to
    acquire title to the Property through Michael, free from the obligations under
    the Agreement, when the Property would not have been conveyed to Michael
    originally had she not agreed to the terms of the Agreement.

IS THE NORMAN UNDERTAKING A BINDING CONTRACT?

[54]

The
    appellants submit that the application judge erred in concluding that Barbara
    and Mitchell gave consideration for the Norman Undertaking by way of
    forbearance.  Their argument runs as follows.  Barbara and Mitchells rights
    under the Agreement are triggered only by a sale or intended sale of the
    Property.  Michaels transfer of a joint interest in the Property to Norman was
    not a sale because no consideration flowed from Norman to Michael in respect of
    the transfer.  As there was no sale and no sale proceeds to share, Barbara and
    Mitchell had no contractual right to intervene in the addition of Norman to
    title to the Property.  As they had no rights on which to forbear, there was no
    consideration.  In the absence of consideration, the Norman Undertaking is not
    a legally binding contract.

[55]

I
    do not accept this submission.  I agree fully with the reasoning of the
    application judge on this issue.

[56]

As
    the application judge noted, forbearance from enforcing an agreement or from litigating
    on it can be good consideration.  He relied on
Kochen v. Stewart
, 1999
    ABQB 331, as authority for this proposition.

[57]

At
    paras. 10-11 of
Kochen
, Master Breitkreuz concludes that forbearance
    from bringing a claim is valuable consideration, regardless of whether the
    claim would have been successful if tried in the courts, so long as the forbearance
    was done in good faith and the party forbearing reasonably believed the claim to
    be valid.  Master Breitkreuz relied on
Lister v. Dunlop Canada Ltd.
,
    [1982] 1 S.C.R. 726, at pp. 742-3, for this well-settled legal proposition.

[58]

The
    Agreement gives Barbara and Mitchell a right of first refusal over the Property.
    Michaels transfer of title into joint names with Norman amounts to a
    disposition.  The disposition was made for natural love and affection and may
    not constitute a sale within the meaning of the Agreement.  However, this does
    not mean that Barbara and Mitchell had no rights at the time that Norman signed
    the Norman Undertaking.  They could have taken legal action to attempt to
    enforce the right of first refusal in the Agreement.  It might be that a court
    would find that such a disposition falls outside the scope of the right of
    first refusal but that does not mean that Barbara and Mitchell did not have the
    right to take legal steps to attempt to enforce the Agreement.  Forbearance
    from bringing even a doubtful claim will constitute good consideration provided
    that the party with the claim believes the claim to be a valid one or, if it is
    understood to be doubtful, believes the claim has a fair chance of success.

[59]

It
    was open to the application judge to find, as he implicitly did, that because
    of the Norman Undertaking, Barbara and Mitchell forbore from taking action to
    enforce the right of first refusal.  In so doing, Barbara and Mitchell gave
    consideration for the Norman Undertaking.

[60]

The
    respondents also argue that even in the absence of the Norman Undertaking,
    Norman is bound by the Agreement because he had actual knowledge of it before
    he became a joint owner of the Property with Michael.

[61]

I
    agree.  Norman acquired title (jointly with Michael) from Michael.  He was
    fully aware of the Agreement at the time, as is evidenced by the Norman
    Undertaking. He gave no consideration for acquiring joint title to the
    Property.  He cannot stand in a better position than Michael.  Accordingly, he
    too is bound by the Agreement.

[62]

I
    would add that the appellants are correct in their assertion that the
    application judge erred when he stated that Michael conveyed a 50% interest in
    the Property to Norman.  When Norman was made a joint tenant of the Property
    with Michael, he received an undivided interest in the whole of the Property,
    not a 50% interest.  However, this misdescription of Normans interest does not
    derogate from the application judges primary point, which was that Barbara and
    Mitchell forbore from acting on their contractual rights at the time that Michael
    conveyed title into her and Normans joint names.

[63]

Accordingly,
    I would dismiss this ground of appeal.

IS THE AGREEMENT REGISTRABLE UNDER THE LAND TITLES ACT?

[64]

The
    appellants submit that the Agreement is not properly registered on title because
    a right of first refusal does not create an interest that is capable of running
    with the land.  They rely on s. 119(3) of the
Land Titles Act
, which
    stipulates that in order to be registered, a covenant must be one that is
    running with or capable of being legally annexed to the land.

[65]

This
    submission misses the mark, in my view.  Section 119 deals with covenants and interests
    in property that are capable of running with the land.  What is in issue in
    this case is not a covenant but, rather, a right of first refusal.

[66]

The
    legal status and effect of a right of first refusal is well established:  see
Canadian
    Long Island Petroleums Ltd. v. Irving Wire Products
, [1975] 2 S.C.R. 715;
McFarland
    v. Hauser

(1978), [1979] 1 S.C.R. 337;
McLeod v. Castlepoint
    Corp.
(1997), 31 O.R. (3d) 737 (C.A.), leave to appeal to the Supreme
    Court of Canada dismd, 34 O.R. (ed) xv;
Harris v. McNeely
(2000), 47
    O.R. (3d) (C.A.); and
SBS Sealants Inc. v. Robroy Industries Ltd.
(2002), 59 O.R. (3d) 257 (C.A.).  For convenience, when setting out the
    governing legal principles, I will refer to the grantor of the right of first
    refusal as the landowner and the grantee as the holder.

[67]

A
    right of first refusal is a personal right.  As such, it does not create an
    immediate interest in land.  Nonetheless, when an offer of purchase is made
    which the landowner is prepared to accept, the holders right of first refusal
    is converted into an option to purchase, which is an equitable interest in the
    land.  (I will refer to the point of conversion as crystallization.)  Where the
    land is transferred in breach of the right of first refusal and the transferee
    takes with notice, the transferee is liable to be joined and bound by an order
    of specific performance requiring the owner to transfer the land to the
    holder.

[68]

The
    operation of these principles found expression in
McLeod
.  At p. 31 of
McLeod
, Moldaver J.A. (as he then was) explained that the right of
    first refusal crystallized into an option and, therefore, an equitable interest
    in the land, the moment before the landowner entered into the agreement of
    purchase and sale.  The purchasers interest arose subsequent to the holders
    equitable interest with the result that the holders interest took precedence.
    Thus, as this court held in
McLeod
, where the land is transferred in
    breach of a right of first refusal and the transferee takes with notice, the
    holders right to the land takes precedence over that of the transferee.

[69]

With
    that legal framework in mind, I turn to the issue at hand.  Is the Agreement
    containing the right of first refusal registrable under the
Land Titles Act
?

[70]

The
    application judge held that it had been properly registered on title to the
    Property pursuant to s. 71(1) of the
Land Titles Act
.  I agree.  The
    fact that a right of first refusal is not an immediate interest in land at the
    time of its creation does
not
mean that it cannot be protected by
    registration under s. 71(1).

[71]

When
    the Agreement was made in 1987, the
1980 Registry Act

applied
    to the Property.  Section 21(1) of the
1980 Registry Act
provided that
    any instrument within the meaning of clause 1(f) of that Act might be
    registered.  Section 21(1) read as follows:

Except as otherwise provided in and subject to this
    Act and the regulations, any instrument within the meaning of clause 1(f) and
    any other instrument specifically permitted to be registered under Part 1 of
    this Act may be registered.

[72]

Clause
    1(f) of the
1980 Registry Act

defined instrument to include a
    contract in writing.  The Agreement is a contract in writing.  Thus, it was
    properly registered pursuant to the
1980 Registry Act
.

[73]

The
    Property was moved into the Land Titles system of land registration in 1999, at
    which time the Director of Titles permitted the Agreement to remain registered
    on title.  Was the Director within the scope of s. 71(1) of the
Land Titles
    Act

in so acting?  In my view, he or she was.

[74]

Section
    71(1) of the
Land Titles Act

reads as follows:

Any person entitled to or interested in any
    unregistered estates, rights, interests or equities in registered land may
    protect the same from being impaired by any act of the registered owner by
    entering on the register such notices, cautions, inhibitions or other restrictions
    as are authorized by this Act or by the Director of Titles.

[75]

Recall
    that at the point of crystallization, the holders personal right is converted
    into an equitable interest in the land.  That is, the holder becomes entitled
    to an unregistered equity in registered land.

[76]

Now
    note the breadth of language used in s. 71(1) when describing that which can be
    registered pursuant to it.  Section 71(1) does not limit registration to those
    entitled to an unregistered equity in land.  It provides that any person entitled
    to or interested in, among other things, any unregistered equity in
    registered land can be protected by registration under s. 71(1).

[77]

As
    the legislature used the words interested in as well as entitled to, the
    words interested in must have some meaning other than entitlement.  On their
    plain and ordinary meaning, a person who is interested in a right, interest
    or equity has something less than one who is entitled to that right, interest
    or equity.

[78]

What
    did the holder have before crystallization?  The holder had an interest in the
    unregistered equity that arose at the point of crystallization.  To be sure,
    the holder is not entitled to the equity, as that entitlement arises on
    crystallization.  But the holder has an interest in it, in the sense that the
    holder has something more than a mere
spes
or hope.  The holder, prior
    to crystallization, has the recognised legal interest that will swell into an
    equitable right on crystallization.  In the language of s. 71(1), the holder is
    a person  interested in [an] unregistered  [equity] in registered land.
    Accordingly, rights of first refusal over land can be protected by registration
    under s. 71(1).

[79]

This
    interpretation is supported by a consideration of the clear purpose of s. 71(1),
    which is to protect those with interests in unregistered (estates, interests or)
    equities in registered lands from impairment by the registered owner.  Without
    registration, the holders interest is vulnerable because it is liable to defeat
    by a sale by the registered owner to a
bona fide
purchaser for value
    without notice.  With registration, that vulnerability disappears because s.
    71(2) of the
Land Titles Act
serves to fix with notice anyone
    acquiring title from the registered owner.

[80]

Section
    71(2) provides that:

Where a notice, caution, inhibition or restriction is
    registered, every registered owner of the land and every person deriving title
    through the registered owner, excepting owners of encumbrances registered prior
    to the registration of such notice, caution, inhibition or restriction, shall
    be deemed to be affected with notice of any unregistered estate, right,
    interest or equity referred to therein.

[81]

This
    interpretation is also supported by a consideration of how s. 71(1) operates.  Registration
    pursuant to s. 71(1) is by one of two means.  First, registration is permitted
    for restrictions authorized by the Act itself.  Second, s. 71(1) gives the Director
    of Titles the power to authorize registration of restrictions on the register.
    This power enables the Director to protect, through registration, more varied interests
    in the land.  As I have explained, the Director can register a restriction to
    protect an interest in an (unregistered) right, interest or equity in
    (registered) land.  By investing the Director with this power, the legislature
    has provided a means of fulfilling s. 71(1)s purpose, namely, to protect such
    interests from impairment by the registered owner.

[82]

From
    a broader perspective, this interpretation is also consonant with a properly
    functioning land titles system, which is intended to provide certainty of
    title by ensuring that notice of all interests that may impact on ownership of
    property are registered on title: see
Canadian Pacific Railway Co. v. Turta
,
    [1954] S.C.R. 427, at 443.

[83]

Before
    concluding on this issue, I simply note that Schedule B to Bulletin No. 96001,
    published by the Minister of Consumer and Commercial Relations on July 10,
    1996, contains a non-exhaustive list of various types of notices that have been
    approved by the Director of Titles for registration under s. 71.  This list
    includes a notice of a right of first refusal.

[84]

The
    parties expressly consented to registration of the Agreement on title to the
    Property.  It has been so registered for almost twenty-five years.  It was
    properly registered at the outset; it remains properly registered today.  Accordingly,
    s. 71(2) operates and the interests of the holders of the right of first
    refusal are protected.

DISPOSITION

[85]

Accordingly,
    I would dismiss the appeal with costs to the respondents fixed at $14,000,
    inclusive of disbursements and applicable taxes.

Released: November 13, 2012 (E.E.G.)

E.E.
    Gillese J.A.

I agree S.T. Goudge J.A.

I agree Robert P. Armstrong
    J.A.

[1]
What would transpire if the estate wishes to sell the Property is explained
    below in the context of the third issue.


COURT OF APPEAL FOR ONTARIO

CITATION:
Biskey v. Chatham-Kent
    (Municipality), 2012 ONCA 802

DATE: 20121121

DOCKET: C53321

Sharpe, Rouleau and Hoy JJ.A.

BETWEEN

Brian Paul Biskey and Rita Marie Biskey

Plaintiffs (Respondents)

and

The Corporation of the Municipality of
    Chatham-Kent, Benedykt Kaminski, Grayna Kaminski, Peifer Realty Inc., carrying on
    business as Royal LePage Peifer Realty and Ghassan Najjar

Defendants (Appellants)

Colin Stevenson and Daniel McConville, for the appellant
    the Corporation of the Municipality of Chatham-Kent

Matthew Todd, for the respondents

Heard: October 30, 2012

On appeal from the judgment of Justice Steven Rogin of
    the Superior Court of Justice, dated January 27, 2011, with reasons reported at
    2011 ONSC 413.

B
y the
C
ourt
:

FACTS

[1]

The Biskeys, plaintiffs in the action
and
    respondents on
the appeal, asserted a claim for damages arising from
    their purchase of a property formerly owned by the appellant municipality,
    Chatham-Kent. The property had been previously used by Chatham-Kent and local
    residents as a dump. After declaring the property surplus and conducting an
    environmental site assessment in 2000 (the Jagger Hims Report), Chatham-Kent
    sold the property, zoned for agricultural use, to Mr. and Mrs. Kaminski for $35,000
    in early 2002. Ten months later, the Kaminskis re-sold the property to the
    respondents for $80,000. The Biskeys purchased the property intending to build
    their dream home.

[2]

Chatham-Kent disclosed the Jagger Hims Report to the Kaminskis but the
    Kaminskis did not disclose that report to the Biskeys and Chatham-Kent took no
    steps to bring the report to the attention of subsequent purchasers.

[3]

When the Biskeys applied for a building permit in November 2003, their
    contractor discovered problematic soil conditions related to the prior use of
    the property as a dump. Before any construction was commenced and before Chatham-Kent
    issued a building permit in November 2004, the Biskeys were given the Jagger
    Hims Report. Through a freedom of information request, they obtained the Golder
    Report commissioned by Chatham-Kent in relation to the Biskeys application for
    a building permit. The Biskeys also commissioned and obtained their own engineering
    report, the Atkinson Davies Report, to support their application for a building
    permit. As we will explain below, these reports contained detailed information
    regarding the former use of the property as a dump and its suitability as a
    building site.

[4]

In June 2004, before Chatham-Kent issued a building permit and before
    the Biskeys commenced construction, the Biskeys commenced this action. The
    Biskeys asserted a claim for $350,000 in damages, against Chatham-Kent for
    negligence, nuisance, and negligent misrepresentation, as well as $100,000 for
    aggravated, exemplary and punitive damages. The statement of claim was later
    amended, increasing the damages claim to $2 million and adding two more causes
    of action including breach of contract and breach of the
Environmental
    Protection Act
, R.S.O. 1990, c. E-19. The claim for damages was based on the
    cost of assessing the environmental condition of the property, the cost of
    clean-up, the increased costs the Biskeys would incur related to the
    construction of their home and the cost of diminution in the value of the
    property reflected by the stigma attributable to the prior use as a dump.

[5]

In September 2004, after the statement of claim was issued, the
    Kaminskis offered to re-purchase the property from the Biskeys for $80,000,
    equal to what the Biskeys had paid. The Biskeys refused that offer and decided instead
    to keep the property and proceed with construction.

[6]

The building permit issued by Chatham-Kent in November 2004 required the
    Biskeys to comply with the reports of their own engineers, Atkinson Davies.

[7]

In October 2007, after the house had been constructed, Biskeys settled
    their claim against the real estate agent and agency that had acted on the
    purchase from the Kaminskis for $100,000.

TRIAL JUDGMENT

[8]

The trial judge rejected the Biskeys evidence that, prior to the
    commencement of construction, in the course of discussion about the building
    permit, a Chatham-Kent official had undertaken on behalf of Chatham-Kent to
    cover any additional construction costs incurred by the Biskeys on account of
    the state of the site.

[9]

However, the trial judge held that Chatham-Kent was liable to the
    appellants in negligence and awarded damages in the amount of $386,142.82, plus
    prejudgment interest and costs. The damages award was based on the trial judges
    assessment of $188,459.82 for the additional cost of construction faced by the
    Biskeys on account of the condition of the property, $64,249.00 in additional
    costs the Biskeys would face to deal with environmentally related costs,
    $8,434.00 in miscellaneous costs related to the additional delay caused by the
    condition of the property and $225,000 for diminishment in the value of the
    property attributable to the stigma due to its prior use as a dump, less the
    $100,000 the Biskeys had already recovered in their settlement with the real
    estate agent.

ISSUES

[10]

Chatham-Kent
    raises three grounds of appeal. It argues that:

1.

the trial judge erred in finding that Chatham-Kent owed the Biskeys a
    duty of care;

2.

the trial judge erred in finding that Chatham-Kent breached that duty of
    care; and

3.

the trial judge erred in finding that the losses claimed by the Biskeys
    were attributable to or caused by the negligence of the appellant.

ANALYSIS

[11]

In
    the light of our conclusion with regard to the damages issue, we find it
    unnecessary to deal with the first two issues. However, for the sake of
    clarity, we make the following observations with respect to the issue of duty
    of care. The precise basis upon which the trial judge found a duty of care is
    unclear to us. It appears to rest, in part, on the proposition that in its
    capacity as owner and vendor, Chatham-Kent owed a duty to the Biskeys as
    subsequent purchasers and in part upon the Chatham-Kents responsibilities in
    relation to building permits. As the appeal can readily be disposed of on the
    third ground, we make no comment on the trial judges conclusion as to a duty
    of care and nothing in these reasons are intended to affirm the finding that
    Chatham-Kent owed the Biskeys a duty of care in negligence.

[12]

We
    now turn to the damages issue.

[13]

It
    is clear from the trial record that before the Biskeys commenced construction,
    they knew that the property they had purchased had formerly been used as a dump
    and that, as a consequence, they were bound to encounter additional
    construction costs, that other environmental issues, including methane gas,
    could involve costs in the future, and that the value of the property with a
    constructed dwelling would be diminished from what it would otherwise have been
    because of the stigma attached to the prior use of the property as a dump.

[14]

Information
    regarding the property was disclosed to the Biskeys in the Jagger Hims, Golder,
    and Atkinson Davies Reports as well as from the preliminary work done by their
    contractor. Any doubt as to what the Biskeys knew is removed by the Biskeys
    affirmative response to Chatham-Kents request to admit prior to trial and by
    the assertions they made in the statement of claim long before the commencement
    of construction.

[15]

The
    Biskeys admitted before trial that prior to the issuance of the building permit
    and prior to the commencement of construction in November 2004, they knew:

·

The Jagger Hims Report showed that the site had been frequently
    used as a waste disposal site and: that there was potential for environmental
    concerns relating to historical waste disposal, uncontrolled dumping, the
    presence of fill materials of unknown composition and origin; that the waste
    fill materials ranged to a depth of at least 1.2 m below grade and that the
    fill consisted of construction debris including concrete fragments; and that there
    was some indication that waste fill material might also occur at greater
    depths;

·

The Golder Report indicated that boreholes drilled in the fill
    area of the site showed organic material, sand and gravel, pieces of concrete,
    trace gravel, pieces of metal wire, clay tile cloth and concrete. That report
    also revealed combustible gas readings indicating the presence of combustible
    gas in the subsoil. The report concluded that the considerable quantities of
    fill and organic material made these materials unacceptable as a suitable
    founding medium, for supportive conventional building foundations;

·

The Atkinson Davies Report revealed fill and organic soils to a
    depth of 3.3 m, that there were fragments of wood, concrete, asphalt and other
    construction debris, and that due to the potential for large ongoing settlement
    all fill and organic soils had to be removed from the planned building location
    to a depth of 3.3 m and that a specially engineered pad would be required. That
    report also advised the respondents that there was a potential for the
    generation of methane gas from the film and organic soils and that soil gas
    abatement measures should be provided in accordance with the Ontario Building
    Code.

[16]

Further
    indication of the Biskeys awareness of the significant added costs they were
    bound to incur is provided by the action they launched several months prior to
    commencing construction, claiming a total of $450,000 in damages. The statement
    of claim reveals that the Biskeys were fully aware that if they were to proceed
    with the construction of a home on this site, in addition to added construction
    costs, there would be a diminution in the value the property would otherwise
    have because of the stigma affect attributable to the prior use of the
    property as a dump.

[17]

As
    we have noted, several months before the Biskeys embarked upon the construction
    of their home, the Kaminskis offered to take the property back and refund the
    entire purchase price. Mr. Biskey testified that at that point, he estimated
    his damages to be approximately $25,000.

[18]

We
    agree with Chatham-Kents submission that the trial judge erred in law by
    awarding damages for additional costs related to the condition of the site,
    added construction costs and diminution in value attributable to the stigma
    effect.

[19]

We
    fail to see how, prior to construction, the Biskeys could claim more from
    Chatham-Kent than the diminution in value of the property attributable to its
    former use as a dump, in other words the difference between the price the
    Biskeys paid for the property and the value the property actually had given
    its history and condition. The Biskeys had the opportunity to satisfy substantially
    that claim when, before construction commenced, the Kaminskis offered to take
    the property back for the price the Biskeys had paid. The $100,000 subsequently
    recovered in the settlement with the other defendants more than covered the
    Biskeys remaining claim for the $25,000 in damages sustained to that point.

[20]

When
    the Biskeys decided to reject the Kaminski offer and to proceed with construction
    in the knowledge that they were building on a dump site and that they would
    incur added costs, any causal link with the alleged negligence of Chatham-Kent
    was broken. Simply put, from that point forward, the Biskeys were on their own.
    They had no legally enforceable right to require Chatham-Kent to reimburse them
    for the risk they decided to run in constructing a home on the site they knew
    to be contaminated on account of its former use as a dump.

[21]

We
    fail to see how the negligence of Chatham-Kent, as found by the trial judge,
    could possibly give rise to the equivalent of a promise or contract-like duty
    to provide the Biskeys with the full cost and value of their dream home on this
    site as if it had never been used as a dump.

[22]

The
    Biskeys point to passages in the trial judgment where the trial judge appears
    to find that before construction commenced, the Biskeys reasonably believed
    that the added costs would be in the range of $30,000 to 40,000. In our view,
    that finding is simply impossible to reconcile with the information disclosed
    in various reports and with the claim the Biskeys themselves were advancing for
    $450,000 against Chatham-Kent before construction commenced.

DISPOSTION

[23]

Accordingly, we allow
    Chatham-Kents appeal, set aside the trial judgment and dismiss the action.
    Chatham-Kent is entitled to its costs of the appeal fixed at the agreed amount
    of $15,000 inclusive of disbursements and taxes. Chatham-Kent is also entitled
    to its costs of the trial. As agreed by the parties, we use the trial judges
    costs award in favour of the Biskeys as a guide and with a modest adjustment to
    reflect the fact that Chatham-Kent was defending the action, we fix the those
    costs at $150,000 inclusive of disbursements and taxes.

Robert J. Sharpe J.A.

Paul
    Rouleau J.A.

Alexandra
    Hoy J.A.

Released: November 21, 2012


COURT OF APPEAL FOR ONTARIO

CITATION:
Canadian
    Faces Inc. v. Cosmetic Manufacturers Inc., 2012 ONCA 787

DATE: 20121119

DOCKET: C54566

OConnor A.C.J.O., Simmons and Rouleau JJ.A.

BETWEEN

Canadian Faces Inc., a body corporate

Plaintiff (Defendant to the Counterclaim) (Respondent)

and

Cosmetic Manufacturers Inc., a body corporate

Defendant (Plaintiff by Counterclaim) (Appellant)

James C. Morton, for the appellant

Jane ONeill, for the respondent

Heard and released orally:  November 8, 2012

On appeal from the judgment of Justice B.A. Allen of the
    Superior Court of Justice, dated October 18, 2011.

ENDORSEMENT

[1]

In our view, it was open to the trial judge to imply a term into the
    agreement that the appellant undertook to enter into a contract with QVC UK to provide
    QVC with the respondents products to be aired on the Shopping Channel.

[2]

We note that there was reference to such an agreement with QVC in the
    recitals to the agreement and, more importantly, in the operative terms of the
    agreement.  As the trial judge said, the agreement made no practical sense
    unless such a term was implied.  In the circumstances, we do not think that the
    entire agreement clause precluded the inclusion by implication of this provision
    into the agreement.

[3]

Finally, we note that the trial judge could have reached the same result
    by simply interpreting the provisions of the agreement in accordance with the
    reasonable objective intention of the parties.

[4]

In the result, the appeal is dismissed.

[5]

Costs to the respondent fixed in the amount of $11,500, inclusive of all
    applicable taxes.

D. OConnor A.C.J.O.

Janet Simmons J.A.

Paul Rouleau J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Canadian Champion Auto Services
    Ltd. v. Petro-Canada,

2012 ONCA 815

DATE: 20121122

DOCKET: C54765

Blair, Rouleau and Tulloch JJ.A.

BETWEEN

Canadian Champion Auto Services
    Ltd.

Appellant (Plaintiff)

and

Petro-Canada

Respondent (Defendant)

Alfred J. Esterbauer, for the appellant

No one present for the respondent

Heard: November 21, 2012

On appeal from the judgment of Justice H.K. OConnell of
    the Superior Court of Justice dated November 16, 2011.

ENDORSEMENT

[1]

On consent the appeal is abandoned without costs.


COURT OF APPEAL FOR ONTARIO

CITATION:
Canadian
    Imperial Bank of Commerce v. Travel Industry Council of Ontario, 2012 ONCA 789

DATE: 20121119

DOCKET: C55572

Doherty, MacPherson and Simmons JJ.A.

IN THE MATTER OF AN
    APPEAL FROM A DECISION OF THE BOARD OF DIRECTORS OF THE TRAVEL INDUSTRY COUNCIL
    OF ONTARIO TO DISALLOW THE CLAIM OF CANADIAN IMPERIAL BANK OF COMMERCE

BETWEEN

Canadian Imperial Bank of Commerce

Applicant (Appellant)

and

Travel Industry Council of Ontario

Respondent (Respondent in Appeal)

Laurie A. MacFarlane, for the applicant (appellant)

Soussanna S. Karas, for the respondent (respondent in
    appeal)

Heard and released orally:  November 9, 2012

On appeal pursuant to leave to appeal granted on May 31,
    2012 from the order of the Divisional Court, dated February 21, 2012.

ENDORSEMENT

[1]

A summary of the relevant facts can be found in the reasons of the
    Divisional Court:  2012 ONSC 131.

[2]

The parties agree that reasonableness is the appropriate standard of
    review.  The question, therefore, becomes whether the Divisional Court erred in
    law in holding that the decision of the Tribunal was unreasonable within the
    meaning of the jurisprudence.

[3]

The Tribunal concluded that the payments made by Canadian Imperial Bank
    of Commerce (CIBC) to the travel agency were payments made for travel
    services provided to customers of CIBC.  The Tribunal made that finding on the
    basis of para. 8 of the Agreed Statement of Facts put before the Tribunal and
    the testimony of a witness from the travel agency.

[4]

In its review, the Divisional Court found, correctly in our view, that
    the Tribunal made certain errors in its approach to the interpretation of the
    word customer in the relevant regulation.  However, the Divisional Court
    ultimately determined that the decision of the Tribunal was unreasonable in
    large measure based on its interpretation of the relationship between CIBC and
    the travel agency to whom the bank made the payments.  The Divisional Court
    concluded, at para. 52:

The CIBC was not a customer within s. 57(1), but rather a
    medium to a payment scheme whereby reward points were converted to cash.

[5]

In our view, the description of the nature of the relationship between
    the CIBC and the travel agent provided by the Divisional Court was a reasonable
    one.  However, in our view, the description of that relationship provided by
    the Tribunal was, on the evidence before the Tribunal, also a reasonable
    description of the relationship.  According to the controlling jurisprudence,
    the Divisional Court should have deferred to the Tribunals interpretation of
    the nature of the relationship.

[6]

In our view, on that interpretation of the relationship, the Tribunals
    determination that the CIBC was a customer and, therefore, entitled to
    compensation under the scheme cannot be characterized as unreasonable.

[7]

In the result, the appeal must be allowed, the decision of the
    Divisional Court set aside, and the decision of the Tribunal reinstated.

[8]

The CIBC does not seek costs and there will be no award as to costs.

Doherty J.A.

J.C.
    MacPherson J.A.

Janet
    Simmons J.A.


WARNING

THIS IS AN APPEAL UNDER
    THE

CHILD
    AND FAMILY SERVICES ACT

AND IS SUBJECT TO S. 45
    OF THE ACT WHICH PROVIDES:

45. (7)
The court
    may make an order,

(a)     excluding
    a particular media representative from all or part of a hearing;

(b)
        excluding all media representatives from all or a part of a hearing; or

(c)     prohibiting
    the publication of a report of the hearing or a specified part of the hearing,

where the court is of the opinion that the presence of the
    media representative or representatives or the publication of the report, as
    the case may be, would cause emotional harm to a child who is a witness at or a
    participant in the hearing or is the subject of the proceeding.

45.
    (8)
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.

45.
    (9)
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.

COURT OF APPEAL FOR ONTARIO

CITATION:
Children's
    Aid Society of Toronto v. G.S., 2012 ONCA 783

DATE: 20121119

DOCKET: C55658

Simmons, Armstrong and Watt JJ.A.

BETWEEN

Childrens Aid Society of Toronto

Applicant (Respondent in Appeal)

and

G.S.

Respondent (Appellant in Appeal)

Robin E. Leighton, for the appellant

Caroline Handleman, for the respondent

Heard: October 30, 2012

On appeal from the order of Justice Emile R. Kruzick of
    the Superior Court of Justice, dated May 22, 2012, dismissing the appeal from
    the order of Justice Debra A.W. Paulseth of the Ontario Court of Justice, dated
    October 19, 2011.

By the
    Court:

[1]

The appellant appeals the order of a Superior Court judge dismissing his
    appeal from an order of an Ontario Court judge making M.S. a Crown ward. The
    formal order for Crown wardship is silent on the issue of access. In her
    reasons, the trial judge noted that it was clear from the evidence that if M.S.
    were made a Crown ward, he would be adopted by his foster family and his
    biological father would be able to continue contact with his son.

[2]

The appellant raises one issue on appeal. He argues that the Superior
    Court appeal judge and the trial judge erred in their application of subsection
    37(3) of the
Child and Family Services Act
, R.S.O. 1990, c. C.11 (
CFSA
)
    regarding the best interests of the child.

[3]

For the reasons that follow, we allow the appeal.

A.

Background

[4]

The appellant is the biological father of the child, M.S., who was born
    in June 2008.

[5]

M.S. was initially apprehended two days after his birth because of the
    Societys concerns about his biological mother, R.O. R.O. suffered from untreated
    mental health issues (the result of a closed head injury when she was 15) and
    had a criminal record for assaults. Both parents had a history of substance
    abuse. An older child, R.S., was made a Crown ward soon after M.S. was
    initially apprehended. On May 1, 2009, summary judgment was granted finding
    M.S. a child in need of protection.

[6]

Although R.O. took no steps to cooperate with the Society and address
    her issues following M.S.s initial apprehension, in the words of the trial
    judge, the appellant turned his life around. As described by the trial judge,
    the appellant attended his visits regularly, began a therapeutic access
    program, attended the Canterbury Clinic for substance screens and counselling,
    and participated in a relapse prevention program three times. He also completed
    an anger management program and the Caring Dads program.

[7]

As a result of the appellants efforts, on December 10, 2009, the court
    ordered that M.S. become a ward of the Society for two months and then be
    placed in the care and custody of the appellant for 12 months, subject to
    Society supervision. One of the conditions of the supervision order was that
    the appellant not have any contact with R.O., if M.S. was with him, and that he
    not allow R.O. to have access to M.S. without preapproved consent by the
    Society.

[8]

On February 9, 2011, an order was made terminating the Societys
    supervision of M.S. and placing him in the appellants custody with a
    restraining order against R.O. under subsection 57.1(3) of the
CFSA
.
[1]

[9]

On March 17, 2011, a Society worker made an unannounced visit to the
    appellants home and found R.O. alone in the apartment with M.S. As a result,
    M.S. was again apprehended that day and returned to the foster family he lived
    with before being placed in his father's care.

[10]

As
    a result of M.S.s apprehension, the Society launched a further protection
    application seeking a final order for Crown wardship, with no access, for the
    purpose of adoption.

[11]

At
    trial, it emerged that the appellant had reconnected with R.O. in the late fall
    of 2010 and allowed her to store some of her belongings at his apartment. As
    stated by the appellant, inevitably [M.S.s] path and [his] mother's path
    crossed. The trial judge found that [t]his contact increased such that, on
    three or four occasions before March 17, 2011, [M.S.] was present when [the
    appellant] saw [R.O.].

[12]

According
    to the appellant, on the morning of March 17, 2011, he received an early
    morning telephone call to go to work  and R.O. called immediately thereafter.
    She sounded okay to him and he needed a babysitter. She seemed all right when
    she arrived. The appellant prepared M.S.s lunch and believed M.S. would have a
    nap. The appellant hoped to be back within about six hours  by 3 p.m.

[13]

The
    appellant's evidence at trial made it clear that he had lied to his Society
    worker about not having contact with R.O. and that he had also lied in the
    Statement of Agreed Facts filed in support of the February 2011 order, which
    terminated the Societys supervision.

[14]

That
    said, the appellant also gave evidence at trial concerning the steps he had
    taken to ensure he has no ongoing contact with R.O. For example, he took back
    the key he had given her to his apartment, changed his locks and telephone
    number, continued counselling at the Canterbury Clinic and wrote a letter to
    R.O. in an effort to gain closure of that relationship.

B.

The trial judge's reasons

[15]

The
    trial judge began the analysis section of her reasons by noting the efforts the
    appellant had made to turn his life around and establish a good relationship
    with his son. She described him as a very pleasant, sincere, and likeable
    person  who dearly loves his son.

[16]

Nonetheless,
    the trial judge noted that the appellant had made serious mistakes in the past
     in relation to substance abuse, errors in judgment and in his relationship
    with R.O. In essence, the trial judge concluded that, in the light of the
    serious risk R.O. posed to M.S., and in the light of the appellants conduct in
    exposing his son to that risk as well as lying about it, M.S.s best interests
    required that he be made a Crown ward. She said:

In the three months from December, 2010 until the apprehension
    in March, 2011, [the appellant] had increasing contact with [R.O.]. They talked
    on the phone. He saw her when [M.S.] wasn't there. He then saw her three or
    four times when [M.S.] was there and then left [M.S.] with her to go to the
    store and finally for the better part of a day

[R.O.] is a serious risk to [M.S.]. Someone who lets [M.S.] get
    to know [R.O.] is placing him at risk. Someone who leaves [M.S.] with [R.O.] is
    placing him at risk.

Someone who makes these mistakes after this much involvement
    with courts and doctors and treatment centers, a young child made a Crown ward
    and a second child apprehended twice  this is someone who cannot really commit
    to meeting [M.S.]s best interests. No amount of prohibitive conditions would
    be likely to make this situation adequate  they didn't work before on more
    than one occasion. I cannot place a child back in that same situation. If it
    was a question of giving [the appellant] another chance at just about anything
    else  I would but not a helpless child  the court has to focus on [M.S.] and
    not [the appellant]s best interests.

C.

The Superior Court appeal judge's reasons

[17]

On
    appeal, the Superior Court appeal judge decided the matter on the basis of
    deference to the trial judge. The appeal judge acknowledged that the trial
    judge did not articulate all the elements of the best interests test, but
    concluded that the consideration of the best interests test was implicit in her
    reasons. Finding no errors of fact or law, he therefore dismissed the appeal.

D.

Relevant statutory provisions

[18]

Subsection
    37(3) of the
CFSA
sets out the factors to be considered, where
    relevant, in making an order in the best interests of the child:

37. (3) Where a person is directed in this Part to
    make an order or determination in the best interests of a child, the person
    shall take into consideration those of the following circumstances of the case
    that he or she considers relevant:

1.
The child's physical, mental and
    emotional needs, and the appropriate care or treatment to meet those needs.

2.      The child's physical, mental and emotional
    level of development.

3.      The child's cultural background.

4.      The religious faith, if any, in which the
    child is being raised.

5.
The importance for the child's
    development of a positive relationship with a parent and a secure place as a
    member of the family.

6.
The child's relationship and emotional
    ties to a parent, sibling, relative, other member of the child's extended
    family or member of the child's community.

7.      The importance of continuity in the
    child's care and the possible effect on the child of disruption of that
    continuity.

8.      The merits of the plan for the child's
    care proposed by society, including a proposal that the child be placed for
    adoption or adopted, compared with the merits of the child remaining with
    returning to apparent.

9.      The child's views and wishes, if they can
    be reasonably ascertained.

10.    The effects on the child of delay in the
    disposition of the case.

11.
The risk that the child may suffer harm
    through being removed from, kept away from, returned to or allowed to remain in
    the care of a parent.

12.
The degree of risk, if any, that
    justify the finding that the child is in need of protection.

13.    Any other relevant circumstance (emphasis
    added).

E.

Discussion

(1)

Standard of Review

[19]

In
C.(G.C.) v. New Brunswick (Minister of Health and Community Services)
,
    [1988] 1 S.C.R. 1073, at para. 5, the Supreme Court of Canada said the
    following about the deferential standard of review applicable in family law
    cases in the context of a child welfare proceeding:

trial judges decisions, particularly in matters of family
    law, should not be interfered with lightly by appellate courts absent an error
    in principle, a failure to consider all relevant factors, a consideration of an
    irrelevant factor or a lack of factual support for the judgment.

[20]

The
    order under appeal in this case is the order dismissing the appeal of the trial
    judges decision. At this stage, this court should only intervene if the
    Superior Court appeal judge erred in principle by failing to identify a
    material error in the decision below.

[21]

In
    our view, the Superior Court appeal judge did err in principle by failing to
    identify a material error in the decision below  namely, that the trial judge
    considered only the risk of harm to the child if the appellant exposed him to
    R.O. and failed to weigh that harm against the risk of disruption to the
    childs relationship with his father if an order for Crown wardship were made.

[22]

On
    that basis, it is our view that the Superior Court appeal judge erred in
    failing to identify the error in principle below and in dismissing the appeal.

(2)

The Best Interests
    Determination

[23]

On
    appeal to this court, the appellant argues that the Superior Court appeal judge
    erred in failing to hold that the trial judge erred in law by failing to
    consider the bond between M.S. and his father, the risk that the bond would be
    diminished or terminated as a result of the Crown wardship order, and the harm
    to M.S. that could follow.

[24]

We
    agree with this submission.

[25]

In
    our view, the trial judge made the following error in principle in analyzing
    M.S.s best interests: she failed to identify the risk of disruption to the
    valuable relationship with his father that a Crown wardship order would
    introduce as a relevant factor in the best interests analysis and she failed
    to balance this risk against the risk of harm to M.S. through exposure to R.O.

[26]

On
    appeal, the Superior Court appeal judge repeated this error by deciding the
    case based on deference without reference to this omission in the trial judges
    best interests analysis.

[27]

Subsection
    37(3) of the
CFSA
requires a person in determining a childs best
    interests to take into account all relevant circumstances, including those
    specifically listed.

[28]

In
    this case, the childs emotional needs in connection with his relationship with
    the appellant (s. 37(3)1), the importance of the childs development of a
    positive relationship with the appellant (s. 37(3)5), the childs relationships
    and emotional ties to the appellant (s. 37(3)6) and the risk of harm to the child
    if he were kept away from his father (s. 37(3)11) were all highly relevant.
    While the risk that the child may suffer harm through being allowed to remain
    in the appellants care was also relevant, it was an error for the trial judge
    to consider that risk alone.

[29]

That
    the relationship between the appellant and M.S. was positive is clear from the
    trial judges reasons. At para. 19, the trial judge accepted that the
    supervised visits between M.S. and the appellant have always been very
    positive, that the two have a close and loving relationship,
that the appellant is attentive to [M.S.s] needs and very affectionate with
    him, and that M.S. is always excited to see his father.

[30]

Given
    this clearly positive relationship, it was necessary for the trial judge to
    assess the degree of risk to M.S. through the possibility of exposure to R.O.
    an exposure that the appellant had taken steps to reduce by retrieving his
    apartment key from R.O., changing his locks and phone number, and writing a
    letter to R.O. asking her not to contact him  and balance it against the
    disruption to the father/son relationship.

[31]

Rather
    than engaging in this balancing exercise, the trial judge appears to have been
    satisfied with the future adoptive mothers statement that she would allow the
    appellant to visit with his son, and with making the Crown wardship order
    silent about access. In our view, this was an error. The court should not have
    rested upon the assurances of this foster parent alone as a basis for
    disregarding the potential for risk to M.S. arising from the disruption of his
    relationship with his father.  This is so for at least two reasons. In the
    absence of an order entitling the appellant to have contact with M.S., the
    adoptive parents could at any point and for any reason choose to sever that
    contact.
[2]
Moreover, even if some contact were to continue, this contact would necessarily
    be significantly reduced in a way that could be contrary to M.S.s best
    interests.

[32]

Turning
    to the degree of risk posed to M.S. from the risk of exposure to R.O., ss. 37(3)12)
    requires consideration of the degree of risk, if any, that justified the
    finding that the child is in need of protection. Throughout her reasons, the
    trial judge treated the risk of harm to M.S. through exposure to R.O. as
    significant.

[33]

However,
    beyond referring to the fact that the risk posed by R.O. stems from mental
    health issues and R.O.s decision to self-medicate those issues with marijuana,
    and to the further fact that the risk of harm manifests itself in domestic
    violence, aggression and inability to interact appropriately with her children,
    the trial judge never identified the precise degree of risk posed to M.S. by
    R.O. if M.S. were allowed to remain in the appellants care.
[3]

[34]

The
    documents filed in the appeal record identify incidents of domestic violence
    between R.O. and previous partners, between R.O. and the appellant, and, on one
    occasion, between R.O. and an access supervisor. During the latter incident,
    R.O. apparently threw a bowl, a spoon, and a banana at the access supervisor.
    While the record supports a finding that exposure to R.O. poses a risk to M.S.,
    none of the other documents in the appeal record addressed this risk in the
    context of the appellant having turned his life around, overcome his
    substance abuse problems, and ceased living with R.O. as a domestic partner. In
    these circumstances, the extent of that risk if M.S. were placed in the
    appellants care subject to a restraining order was not in our view
    sufficiently quantified to permit a proper balancing against the risk of
    disruption to the positive relationship with the appellant.

[35]

For
these reasons, it was in our view, an error for the trial
    judge not to weigh the risk of harm through exposure to R.O. against the risk
    of disruption to M.S.s relationship with the appellant. In light of this
    error, it was equally an error for the Superior Court appeal judge to defer to
    the trial judge in the absence of the required balancing of best interest
    factors.

[36]

In
    the light of the nature of the issues to be determined, we see no alternative
    but to order a new trial.

[37]

In
    the result, the appeal is allowed, the orders of the Superior Court appeal
    judge and of the trial judge are set aside, and a new trial is ordered.

Released: JS November 19, 2012                        Janet
    Simmons J.A.

Robert
    P. Armstrong J.A.

David
    Watt J.A.

[1]
Subsection 57.1(3) of the
CFSA
provides that, When making an order under subsection (1), the court may,
    without a separate application, make a restraining order in accordance with
    section 35 of the
Childrens Law Reform
    Act, 2009
, s. 11, s.3. Section 35 of the
Childrens Law Reform Act, 2009
, permits
    a court to make a restraining order if the applicant has reasonable grounds to
    fear for his or her own safety or for the safety of any child in his or her
    lawful custody.

[2]

A
    continuing relationship can be preserved where the society applies for an
    openness order under s. 145.9(1) of the
CFSA
.
    Subsection 145.1(3) of the
CFSA
provides that the court may make an openness order in respect of a child if the
    court is satisfied of the following: that it is in the best interests of the
    child;  that the openness order will permit the continuation of a relationship
    with a person that is beneficial and meaningful to the child;  and that
    the society, the person who will be permitted to communicate with or have a
    relationship with the child if the order is made, and the person with whom the
    society has placed or plans to place the child for adoption, have all
    consented.

[3]

At para. 12 of her reasons, the trial judge states all the
    documents referred to above discuss in great detail the inability of [R.O.] to
    interact appropriately with her children and the high degree of risk she poses
    to [the child, M.S.]. At para. 41, it is stated that [R.O.] is a serious risk
    to [M.S.]. The trial judge refers to R.O.s mental health issues, her decision
    to self-medicate, and to the documented incidents of domestic violence, aggression
    and an inability to interact appropriately with her children.


COURT OF APPEAL FOR ONTARIO

CITATION:
Collett v. Reliance Home
    Comfort Limited Partnership (Reliance Home Comfort), 2012 ONCA 822

DATE: 20121127

DOCKET: C55215

Rosenberg, Gillese and Lang JJ.A.

BETWEEN

Geoffrey Collett and Sandra Collett

Plaintiffs (Respondents)

and

Reliance Home Comfort Limited Partnership also
    known as Reliance Home Comfort

Defendant (Appellant)

Tim Buckley and Heather K. Pessione, for the appellant

Mark A. Mason and Hillel David, for the respondent

Heard: October 23, 2012

On appeal from the order of Justice Gladys Pardu of the
    Divisional Court, dated December 7, 2011.

Gillese
    J.A
.:

[1]

This appeal, like the companion case of
Szilvasy v. Reliance Home Comfort
    Limited Partnership (Reliance Home Comfort)
, 2012
    ONCA 821
(
Szilvasy
), involves the application of s. 9(2) of the
Consumer Protection Act, 2002
, S.O. 2002, c. 30, Schedule A (the
CPA
)
    to the rental of a hot water heater.

OVERVIEW

[2]

Geoffrey Collett and Sandra Collett (the Colletts or the respondents) purchased
    their home in Oakville, Ontario in 1996. The hot water heater in the house had
    been installed in June 1988.  The original homeowner rented the water heater from
    a predecessor company of Reliance Home Comfort Limited Partnership (Reliance or
    the appellant).

[3]

The Colletts took over rental of the water heater and paid Reliances
    monthly bills.

[4]

In early May of 2007, Mr. Collett discovered a leak from the water
    heater, which had caused damage to carpet and baseboards.  Reliance replaced
    the water heater at no cost to the Colletts.

[5]

The Colletts brought a subrogated claim in Small Claims Court for the property
    damages arising from the leak.  They succeeded at trial and were awarded damages
    in the amount of $3,994.15, plus disbursements, costs and interest.

[6]

Reliances appeal to the Divisional Court was dismissed.

[7]

With leave, it appeals to this court.

[8]

The factual differences between this case and
Szilvasy
do not
    affect the outcome.  For the reasons given in
Szilvasy
, in my view, this
    appeal must fail.

DISPOSITION

[9]

Accordingly, I would dismiss the appeal. I would make a single cost
    award in respect of the two appeals by ordering Reliance to pay costs in the
    agreed on sum of $16,000, all inclusive, to the respondents in both appeals.

Released: November 27, 2012 (E.E.G.)

E.E. Gillese
    J.A.

I agree M. Rosenberg J.A.

I agree S.E. Lang J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
DLF
    Solutions Inc. v. Maple Leaf Sports & Entertainment Ltd.,
2012 ONCA 754

DATE: 20121106

DOCKET: C54920

Sharpe, Gillese and Rouleau JJ.A.

BETWEEN

DLF Solutions Inc. and Mark Michalkoff

Appellants

and

Maple Leaf Sports & Entertainment Ltd.

Respondent

Evert Van Woudenberg, for the appellants

Glenn A. Smith and Matthew B. Lerner, for the respondent

Heard: November 2, 2012

On appeal from the order/judgment of Justice Beth A.
    Allen of the Superior Court of Justice, dated December 21, 2011.

APPEAL BOOK ENDORSEMENT

[1]

The trial judge gave careful and considered reasons rejecting the
    appellants claim based upon an alleged representation as to the location and
    configuration of Raptors basketball seats in connection with a licence the
    appellant purchased. We are not persuaded that she made any error.

[2]

In particular, she found that the licence does not contain any representation
    that the seats are in the front row or that that they will remain with the same
    view and configuration. She also found that there were no oral representations
    with regard to those matters. Those findings were entirely open to her on the
    evidence and we see no basis to interfere.

[3]

Accordingly, the appeal is dismissed. Costs to the respondent fixed at
    $20,000 as per the agreement between the parties, exclusive of disbursements
    and taxes.


COURT OF APPEAL FOR ONTARIO

CITATION:
Greater
    Essex County District School Board v. International Brotherhood of Electrical
    Workers, Local 773, 2012 ONCA 791

DATE: 20121120

DOCKET: C55503

OConnor A.C.J.O., Simmons and Rouleau JJ.A.

BETWEEN

Greater Essex County District School Board

Applicant (Appellant)

and

International Brotherhood of Electrical Workers,
    Local 773; The International Unions of Bricklayers and Allied Craftsmen, Local
    6; United Association of Journeymen and Apprentices of the Plumbing and Pipefitting
    Industry of the United States and Canada, Local 552; The International Unions
    of Painters and Allied Trades, Local 1494; Labourers International Unions of
    North America, Local 625 and the Ontario Labour Relations Board

Respondents (Respondents)

Leonard P. Kavanaugh, Q.C. and Suzanne M. Porter, for
    the applicant (appellant)

Craig Flood and Ronald Lebi, for the respondent trade
    unions

Leonard Marvy, for the respondent, Ontario Labour
    Relations Board

Heard and released orally:  November 8, 2012

On appeal from the judgment of the Divisional Court
    (Leitch, Swinton and Hoy JJ.), dated January 12, 2012.

ENDORSEMENT

[1]

We dismiss the appeal.  We agree with the Divisional Court that the
    decision of the Ontario Labour Relations Board (the OLRB) was reasonable.

[2]

In our view, it was reasonable to interpret the definition of
    construction industry in s. 1 of the
Ontario Labour Relations Act
(the

OLRA
) to include the construction management activities of the
    school board carried out by Mr. Faulkner.  These activities were akin to those
    carried out by a general contractor.  We are also of the view that it was
    reasonable for the OLRB to conclude that the receipt of compensation by the
    school board for the construction management activities constituted the operation
    of a business within the definition of an employer in s. 126 of the
OLRA
.
    In reaching this conclusion, the OLRB relied upon its prior decisions made over
    a period of 45 years.

[3]

We are satisfied that the relationship between the school board and the three
    other owners of the property in issue did not preclude the OLRB from finding
    that they were unrelated persons within the definition of a non-construction
    employer.  The owners of the property governed their relationship through an
    agreement which provided
inter alia
that the three other owners would
    pay compensation to the school board for providing construction management
    activities.  Each of the parties are separate legal entities with different
    mandates.  We agree with the Divisional Court that in forming this relationship,
    they would have acted at arms length.

[4]

In these circumstances, we do not consider the conclusion that the
    owners were unrelated persons to be unreasonable.  We recognize that in
    reaching this conclusion, the OLRB mistakenly said that the property was owned
    by only three of the four actual owners.  That mistake, however, in our view,
    did not affect the OLRBs eventual conclusion on this issue.  In para. 93 of
    its reasons, the OLRB clearly found that all of the owners were unrelated
    persons.

[5]

We do not accept that the Divisional Court erred in not setting aside
    the decision of the OLRB for providing insufficient reasons.  The reasons read
    in context of the record as a whole provided a sufficient basis to understand
    the reasons why the OLRB reached its conclusion.

[6]

Finally, we agree with the Divisional Court that the prior decisions of
    the OLRB were not binding on the respondent unions who were not parties to
    those applications.

[7]

In the same vein, we note that the OLRB decision that underlies this
    appeal is not an
in rem
decision as to whether the school board is a
    non-construction employer.

[8]

Costs to the respondent unions in the amount of $15,000, inclusive of
    all applicable taxes.

D. OConnor A.C.J.O.

Janet
    Simmons J.A.

Paul
    Rouleau J.A.