CITATION:
R. v. Morgan, 2012 ONCA 28

DATE: 20120116

DOCKET: C52843

COURT OF APPEAL FOR ONTARIO

Sharpe, Blair and Rouleau JJ.A.

BETWEEN

Her Majesty the Queen

Appellant

and

Calvin Morgan and Damaine Smith

Respondents

Randy Schwartz, for the appellant

Dirk Derstine and Mariya Yakusheva, for the respondent Calvin
          Morgan

Michael Dineen and Jeff Hershberg, for the respondent Damaine
          Smith

Heard:
December 20, 2011

On appeal from the acquittal entered by Justice Leonard
          Ricchetti of the Superior Court of Justice dated September 24, 2010.

Rouleau J.A.:

[1]

The Crown appeals from the acquittals entered in favour of the
    respondents and seeks a new trial on the basis that the trial judge erred in
    ruling that the respondent Morgans s. 8 rights under the
Canadian Charter
    of Rights and Freedoms
, Part I of the
Constitution Act, 1982
, being
    Schedule B to the
Canada Act 1982
(U.K.), 1982, c. 11 to be free from
    unreasonable search and seizure had been violated and that the evidence
    obtained pursuant to a search warrant should be excluded under s. 24(2) of the
Charter
.

FACTS

[2]

On the evening of December 30, 2008, masked and armed assailants invaded
    an apartment at 30 Tullamore Road in Brampton.  They wielded a gun (or an
    imitation gun) as well as machetes.  The victims, Kyle Campbell, Nancy Caines
    and Jordan Northcott, were home that evening.  A scuffle resulted in Mr.
    Northcott receiving several wounds.  The perpetrators took cellular telephones,
    electronic equipment and various pieces of identification belonging to the
    victims.  The police were called immediately after the perpetrators left the
    apartment.  Police officers arrived shortly thereafter and conducted an
    investigation.

[3]

As a result of their investigation, the police obtained a search warrant
    on January 2, 2009, authorizing them to search a residence located at 76
    Abelard Avenue in Brampton.  The police executed the search warrant.  In the respondents
    bedrooms, they found property taken from the apartment at 30 Tullamore Road
    during the robbery, including pieces of identification belonging to the victims.
    They also found clothing stained with blood containing the DNA of Mr.
    Northcott.

[4]

At pre-trial, Mr. Morgan brought an application for an order declaring that
    his s. 8
Charter
rights were breached and excluding all evidence derived
    from the search of 76 Abelard Avenue pursuant to s. 24(2) of the
Charter
.

DECISION OF THE TRIAL JUDGE

[5]

The trial judge found that the information to
    obtain (ITO), which formed the basis for the issuance of the search warrant, contained
    extensive misinformation, misleading information and incomplete evidence
    which went to the very core of the evidence necessary to the issuing judges
    decision.  The trial judge concluded that there had been a clear and
    deliberate breach or, at the very least, that the polices conduct showed a
    reckless disregard of their obligation to make full and frank disclosure in the
    ITO.

[6]

In his reasons, the trial judge set out eight
    of the more significant problems with the evidence in the ITO and concluded
    that, once the ITO is stripped of its erroneous and tendentious assertions,
    only three facts remain:

(1) Mr.
    Morgan telephoned Ms. Caines on one occasion prior to December 30, 2008 from a
    telephone number registered to 76 Abelard Avenue;

(2) there
    were fresh footprints found in the snow at about 10:45 p.m. on December 30,
    2008 at the intersection of Pearson Road and Abelard Avenue; and

(3) Ms.
    Caines received a telephone call from a telephone number registered to 76
    Abelard Avenue on December 31, 2008, the morning after the robbery.

[7]

Later in his reasons, the trial judge added an
    additional uncontroversial fact: one of the stolen cellular telephones was
    located by Bell Canada within approximately a half hour of the robbery at the
    intersection of Abelard Avenue and Pearson Road.

[8]

The trial judge found that
[
t]hese remaining facts could not reasonably have provided the
    issuing judge sufficient credible and reliable evidence to find reasonable and
    probable grounds to believe evidence of the home invasion would be found at 76
    Abelard [Avenue].  Consequently, the trial judge determined that the resulting
    search executed at 76 Abelard Avenue had been in breach of Mr. Morgans s. 8
Charter
rights.

[9]

Given that the search warrant was deemed
    invalid, the trial judge next assessed the admissibility under s. 24(2) of the
Charter
of the evidence seized when the search warrant was executed.  In applying the
    analytical framework for the exclusion of evidence under s. 24(2) of the
Charter
,
    the trial judge found that the seriousness of the polices misconduct coupled
    with the significant privacy interest one has in a private home outweighed the
    factors favouring the admission of the evidence.  Considering all of the
    circumstances, the trial judge found that the admission of the evidence would
    bring the administration of justice into disrepute.  As a result, the balancing
    of these factors led the trial judge to conclude that the evidence obtained
    pursuant to the search warrant would be excluded under s. 24(2) of the
Charter
.

ISSUES ON APPEAL

[10]

The Crown raises three grounds of appeal:

1)

the trial judge erred in his analysis of each of the eight
    problems that he identified in the ITO;

2)

even after removing any misstatements in the ITO, there remains
    sufficient evidence supporting the issuance of the search warrant in this case;
    and

3)

if there was nonetheless a breach of s. 8 of the
Charter
, the
    evidence obtained pursuant to the search warrant should not have been excluded
    under s. 24(2) of the
Charter
.

[11]

For the reasons that follow, I have concluded that, even after removing
    any misstatements or incorrect information in the ITO, there remains sufficient
    information supporting the issuance of the search warrant.  As I would allow
    the appeal on that ground, I need not deal with the Crowns first and third
    grounds of appeal.

ANALYSIS

[12]

In considering the second ground of appeal, I
    will assume, without deciding, that the trial judges findings that much of the
    information contained in the ITO was incorrect or misleading and is to be removed
    can be upheld.

[13]

The Supreme Court of Canada has held that even
    where the ITO contains misleading or false allegations, the reviewing judge is
    to determine whether, after disregarding the misleading or false allegations,
    there remains sufficient evidence to justify issuing the search warrant:
R.
    v. Araujo
, 2000 SCC 65, [2000] 2 S.C.R. 992, at para. 57.  I have concluded
    that, in the present case, there remains substantially more relevant
    information in the ITO than the three (or four) remaining facts listed by the
    trial judge in his reasons.  As I will explain, when the additional information
    (described below) coupled with the three (or four) facts listed by the trial
    judge are considered in the context of this case, there is reliable evidence
    that might reasonably be believed to show:

1)

a connection between 76 Abelard Avenue and the robbery;

2)

a connection between Mr. Morgan and the searched premises at 76
    Abelard Avenue; and

3)

a connection between Mr. Morgan and the robbery.

[14]

Once these connections are made, they are reasonably
    capable of supporting the issuing judges decision that there were reasonable
    grounds to issue the search warrant.

THE
    CONNECTIONS

1)

Connection between 76 Abelard Avenue and the robbery

[15]

Approximately 30 minutes following the robbery,
    Bell Canada was able to place one of the stolen cellular telephones equipped
    with GPS capabilities at the intersection of Pearson Road and Abelard Avenue.
    That location, as determined by Bell Canada, is accurate to within 100 meters.
    Shortly after receiving the information that the cellular telephone was located
    at the intersection of Pearson Road and Abelard Avenue, the police attended at
    that location.  It was snowing heavily when they arrived and they observed
    fresh footprints in the snow on the street located directly in front of 76
    Abelard Avenue which is at the intersection of Pearson Road and Abelard Avenue.

[16]

The stolen cellular telephones location and the
    fresh footprints provide a basis for inferring a connection between 76 Abelard
    Avenue and the robbery.

2)

Connection between Mr. Morgan and the robbery

[17]

Two of the victims identified the perpetrators
    of the robbery as being three black males, approximately 20 years old with
    medium builds and measuring between 5 feet 10 inches and 6 feet tall.  The
    third victim could only say that one perpetrator was black and was unable to
    describe the others.  Mr. Morgan matched the general description given by the
    victims.

[18]

The victims knew Mr. Morgan as he was one of
    only two black men who had been to their apartment to buy a small amount of
    marihuana.  The second black man who had attended at their apartment was a
    relative and did not match the general description of the perpetrators.  He was
    therefore not a suspect.

[19]

Ms. Caines told police that she had seen a photo
    image of Mr. Morgan wearing a red bandana in the same fashion as one of the
    perpetrators during the robbery.  There was, however, some inconsistency in the
    description given by the victims of the face coverings worn by the
    perpetrators.  Mr. Northcott described the face covering as being a tie-dyed
    bandana and Mr. Campbell thought that all of the face coverings were black.

[20]

These facts provide a basis for inferring a
    connection between Mr. Morgan and the robbery.

3)

Connection between Mr. Morgan and 76 Abelard Avenue

[21]

Further to the interview with Ms. Caines, the
    police were informed that sometime prior to the robbery, Mr. Morgan had placed
    a telephone call to her from a telephone number registered to 76 Abelard
    Avenue.  On the morning following the robbery, Ms. Caines received a telephone call
    from that same number but she was not home at the time.  The telephone callers
    number was, however, recorded in her telephone.  She considered this telephone
    call to be suspicious because Mr. Morgan, who was the person known to her at
    that telephone number, would have known that she was at work at that time.  She
    therefore reported this event to police.

[22]

Further to Ms. Caines report, the police
    followed up on the telephone number she provided.  The police confirmed that
    the telephone calls were made from the landline telephone number registered to 76
    Abelard Avenue.  The owner of 76 Abelard Avenue was found to be someone with
    the surname Morgan.  Although the police had a different address for Mr.
    Morgan, further investigation revealed that Mr. Morgan was no longer residing
    at that last known address.  The police therefore concluded that he was
    residing at 76 Abelard Avenue with relatives.

[23]

Consequently, there is a basis for inferring a connection
    between Mr. Morgan and the residence located at 76 Abelard Avenue.

THE ITO VIEWED AS A WHOLE

[24]

As outlined above, there was considerably more
    evidence supporting the issuance of the search warrant than the three (or four)
    remaining facts listed by the trial judge.  That information provided the basis
    for making the three critical connections noted above.

[25]

Further, the information must be viewed in the
    context of this case.  The search warrant was sought less than three days after
    the robbery and as part of an ongoing investigation.  At this stage, the burden
    on the police is not to prove, beyond a reasonable doubt, that evidence of the
    robbery would be recovered at 76 Abelard Avenue.  Rather, the test to be
    applied by a reviewing judge was set out in
Araujo
, at paras. 51 and 54,
    as follows:

In looking for reliable information
    on which the authorizing judge could have granted the authorization, the
    question is simply whether there was
at least some evidence that might
    reasonably be believed on the basis of which the authorization could have
    issued
.

An approach based on looking for sufficient
    reliable information in the totality of the circumstances appropriately
    balances the need for judicial finality and the need to protect prior
    authorization systems.  Again, the test is whether there was reliable
evidence
    that might reasonably be believed on the basis of which the authorization could
    have issued
, not whether in the opinion of the reviewing judge, the
    application should have been granted at all by the authorizing judge. [Emphasis
    in original.]

[26]

When the three connections and other remaining facts are viewed in the
    totality of the circumstances, the trial judge ought to have concluded that,
    stripped of the materially inaccurate and incomplete information, the ITO
    provided reliable evidence on which the issuing judge or justice could have
    issued the search warrant.  Further, the respondent Morgan did not meet his burden
    to show that, on a balance of probabilities, the warrant could not have been issued.

[27]

For these reasons, in applying the test described in
Araujo
, the search warrant could have
    issued given that it was based on sufficient reliable information in the
    totality of the circumstances.

[28]

Before concluding, let me add one further comment.  As explained, it was
    not necessary to address the appellants first ground of appeal.  Accordingly,
    I should not be taken as either accepting or rejecting the appellants
    submissions that the trial judge erred in his finding that there were many instances
    of inaccurate and incomplete information and erred in concluding that the
    police had deliberately and recklessly misled the issuing judge.

CONCLUSION

[29]

In conclusion, therefore, I would allow the appeal and order a new
    trial.

Paul Rouleau J.A.

I agree Robert J.
    Sharpe J.A.

I agree R.A. Blair
    J.A.

RELEASED: January 16, 2012


CITATION:
R. v. Oladimeji, 2012
          ONCA 19

DATE: 20120111

DOCKET: C54066

COURT OF APPEAL FOR ONTARIO

Winkler C.J.O., Doherty and Goudge JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Olayikanmi Oladimeji

Appellant

Andrew Furgiuele, for the appellant

Scott Latimer, for the respondent

Heard:  January 10, 2012

On appeal from the sentence imposed by Justice J.C. Moore of
          the Ontario Court of Justice dated July 15, 2010.

APPEAL BOOK ENDORSEMENT

[1]

The trial judge misapprehended the evidence.  This was not an attack on
    a stranger as indicated by the trial judge on three occasions in his reasons.
    The assault occurred in the course of a drug transaction.

[2]

The misapprehension of the evidence was material to the determination of
    the sentence and constitutes an error in principle.  We must, therefore,
    examine the fitness of sentence afresh.

[3]

This was a serious assault with a weapon (a brick).  The victim suffered
    injuries of some significance.  The appellant has a lengthy record, although
    his longest prior sentence was a one-year term.

[4]

We are satisfied that a sentence of two years, in addition to the four
    months pre-trial custody, is a fit sentence in the circumstances.  The sentence
    is varied accordingly.


COURT OF APPEAL FOR ONTARIO

R. v. Opoku, 2012
    ONCA 22
DATE:
    20120113
DOCKET: M39896
Rosenberg, Simmons and Armstrong JJ.A.
BETWEEN
Her Majesty The Queen
Respondent
and
Theresa Ansaba Opoku
Applicant
Theresa Opoku, in person
Hilary Book, amicus curiae
Benita Wassenaar, for the respondent
Heard and released orally: January
    5, 2012
ENDORSEMENT
[1]

This application for special leave to appeal from the dismissal
    of an application for an extension of time which was dismissed as abandoned was
    referred to a panel of this court by Cronk J.A.
[2]

This is not a case for special leave. It does not meet the statutory
    test. The test under s. 131 is a strict one. No issue essential to the public
    interest arises in this case where the question is simply the applicants
    reason for failing to attend court. Nor is there an issue as to the due
    administration of justice, given that the applicant has another remedy, as will
    be discussed below.
[3]

We leave to another time whether there is jurisdiction under s.
    131 of the
Provincial Offences Act
to grant special leave from dismissal
    of an application for an extension of time when the application was dismissed
    on the merits.
[4]

Where the application was, as here, dismissed as abandoned, the
    remedy is an application to the Provincial Offences Appeal Court to reopen the
    application for the extension of time. On the application for leave to reopen,
    the applicant does not have to meet the strict test for special leave to appeal
    that applies in this court. Rather, it would be for the Provincial Offences Appeal
    Court to apply the appropriate factors for reopening an application for an extension
    of time. An application to reopen would not in our view violate s. 85(2) of the
Provincial Offences Act
. Accordingly the application for special leave to
    appeal is dismissed.
Signed:        M. Rosenberg J.A.
Janet Simmons J.A.
Robert P. Armstrong J.A.
Released: MR JANUARY 13, 2012


COURT OF APPEAL FOR ONTARIO

CITATION:
R. v. Phillips, 2012
    ONCA 54

DATE: 20120130

DOCKET: C53523

OConnor A.C.J.O., MacPherson J.A. and OConnor
    J. (
ad hoc
)

BETWEEN

Her Majesty the Queen

Respondent

and

George Christopher Phillips

Appellant

Vanessa V. Christie, for the appellant

David Lepofsky, for the respondent

Heard and released orally: January 26, 2012

On appeal from the decision of Justice Nordheimer of the Superior
    Court of Justice, dated March 25, 2011.

ENDORSEMENT

[1]

The application judge dismissed Mr. Phillips application under
    s. 745.6(1) of the
Criminal Code
for an order allowing him to proceed to
    a hearing before a jury for a determination as to whether his period of parole
    ineligibility should be reduced (a faint hope hearing).  Mr. Phillips appeals.

[2]

Until recent amendments, s. 745.6(1) of the
Code
set the
    test to be used on an application of this nature as whether the applicant has
    shown, on the balance of probabilities, that there is a reasonable prospect
    that the application will succeed.

[3]

Mr. Phillips argues that the application judge erred because in
    applying the section he used the phrase a realistic probability of success to
    describe the reasonable prospect test set out in the section.  He submits
    that a realistic probability is a higher threshold than a reasonable prospect.

[4]

Mr. Phillips goes on to argue that if we apply the correct test,
    we should allow his application.

[5]

We do not find it necessary to resolve the semantic issue.  In
    our view, Mr. Phillips application does not meet the reasonable prospect test
    set out in the statute.

[6]

We agree with the application judge that the statutory test
    embodies more than merely showing that a case is not hopeless.  The normal
    meaning of the words suggests a higher test.  Moreover, as the application
    judge pointed out, lowering the threshold to having to establish only that a
    case is not hopeless would frustrate the purpose of the judicial screening
    stage.

[7]

In passing, we note that it is generally preferable when a court
    is applying a statutory test to use the language in the legislation.  Inserting
    what are considered to be synonymous words or phrases into an analysis often
    tends to confuse rather than clarify.

[8]

In our view, Mr. Phillips fails to meet the test under s.
    745.6(1).  He was convicted of a cold-blooded execution style planned and
    deliberate murder.  He has not accepted responsibility for his offence nor
    expressed remorse.  He has been far from a model prisoner.  Although in the
    last few years his conduct has improved, his record while in custody is at best
    mixed.  He has a considerable record of institutional misconduct offences.  He
    has participated in educational programs only sporadically and has made minimal
    gains in the anger management programs.  He has not been transferred down the
    security ladder below medium security.

[9]

In these circumstances, we do not consider that there is a
    reasonable prospect that Mr. Phillips will be able to convince 12 jurors that
    his parole ineligibility should be reduced.

[10]

The appeal is dismissed.

D. OConnor A.C.J.O.

J.C. MacPherson J.A.

OConnor J. (
ad hoc
)


CITATION:
R. v. Razmara, 2012
          ONCA 13

DATE: 20120109

DOCKET: C51616

COURT OF APPEAL FOR ONTARIO

Winkler C.J.O., Doherty and Goudge JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Amir Razmara

Appellant

Michael S. Mandelcorn, for the appellant

Marie Comiskey, for the respondent

Heard:
January 9, 2012

On appeal from the sentence imposed by Justice McMahon of the
          Superior Court of Justice dated July 4, 2008.

APPEAL BOOK ENDORSEMENT

[1]

The appellant was sentenced on his guilty plea to a total of 14 years on
    charges of importing and trafficking in large amounts of cocaine.  The
    appellant has a criminal record in the United States for similar offences.  He
    was on probation for these offences when he committed these offences.

[2]

In oral argument, counsel argued that the appellant is liable to
    deportation because of his immigration status and that this potential means
    that he may not be eligible for day parole.  Speculation as to the potential
    effect of the appellants immigration status on his eligibility for day parole
    had no relevance to the determination of the appropriate sentence.

[3]

The appeal is dismissed.


COURT OF APPEAL FOR ONTARIO

CITATION:
R. v. Robinson, 2012
    ONCA 50

DATE: 20120126

DOCKET: C54399

Feldman, Watt JJ.A. and Dambrot J.
(ad hoc
)

BETWEEN

Her Majesty The Queen

Respondent

and

Trevor Robinson

Appellant

E. Rolfe, for the appellant

Andrew Wiese, for the respondent

Heard and endorsed: January 24, 2012

On appeal from sentence imposed on July 7, 2011 by
    Justice Laurence Pattillo of the Superior Court of Justice, sitting with a
    jury.

APPEAL BOOK ENDORSEMENT

[1]

The appellant appeals his sentence of 12 months for trafficking
    in cocaine and 10 months concurrent for possession of proceeds of crime. He
    submits that the trial judge erred in over-emphasizing the appellants role as
    a supplier in his decision not to impose a conditional sentence.

[2]

In our view, the trial judge made no error in his assessment of
    the aggravating and mitigating factors. The appellant was acting as a supplier
    on this occasion and in that role was one rung up in the chain of supply and at
    a higher level of culpability. The fact that the appellant has made great strides
    in his own rehabilitation is very commendable but, again, was given credit by
    the trial judge.

[3]

In our view, the trial judge made no error and was entitled to
    decline to impose a conditional sentence in the circumstances of this case.

[4]

Leave to appeal sentence is granted but the appeal is dismissed.


CITATION:
R. v. Roy, 2012 ONCA
      23

DATE:  20120112

DOCKET: C50317

COURT OF APPEAL FOR ONTARIO

Winkler C.J.O., Doherty and Goudge JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Sébastien Roy

Appellant

Michael Davies, for the appellant

Christine Tier, for the respondent

Heard and released orally:  January 9, 2012

On appeal from the conviction entered by a jury, presided over
          by Justice Maranger of the Superior Court of Justice, dated November 10, 2006.

ENDORSEMENT

[1]

This is a single issue appeal.  The appellant was convicted of first
    degree murder on the basis that he murdered the victim while forcibly confining
    him contrary to s. 231(5) of the
Criminal Code
.  On appeal, counsel for
    the appellant frankly concedes that the appellant was properly found to have
    murdered the victim, but submits that the finding of first degree murder based
    on s. 231(5) is unreasonable on the evidence.  Counsel asks that this court
    substitute a conviction on the included charge of second degree murder.

[2]

Counsel for the appellant submits that the evidence could not reasonably
    support a finding that the appellants act of killing the victim, probably by
    strangulation, was a discrete act from the act of confining the victim.
    Counsel correctly makes the legal point that s. 231(5) requires two discrete
    events  a killing of the victim and a confinement of the victim.  A
    confinement that is inherent in the very act of killing cannot justify
    elevating second degree murder to first degree murder.

[3]

We have reviewed the evidence and we are satisfied that there was ample
    evidence upon which a jury could draw the inferences necessary to support a
    finding of first degree murder.

[4]

The inferences include the following.  The jury could infer that at some
    point the appellant, who was alone with the victim in the victims apartment,
    confined the victim by tying his arms and ankles and by securing the victim to
    the wall of the apartment.  The jury could also infer that the appellant placed
    several ligatures, including a cable, around the victims neck and that at
    least one of the cables around his neck was placed there after the victims
    wrists had been tied behind him.  The jury could further infer that at some
    point after the appellant tied the victims wrists and ankles he beat the
    victim.  The jury could infer that the beating went on for some time, involved
    blows with at least two different objects inflicted at two or more locations in
    the apartment.  The jury could further infer that after the appellant had
    beaten the victim and while the victim was still bound and gagged and confined,
    the appellant strangled the helpless victim.  In doing so, the appellant took
    advantage of the dominance he had gained over the victim through his
    confinement of the victim to kill the victim.  That is exactly the kind of fact
    scenario that s. 231(5) is intended to capture.

[5]

We readily accept that the inferences outlined above were not the only
    inferences that the jury might have drawn.  There were other ways to look at
    the physical evidence presented in this case.  The inferences described above
    were, however, in our view, reasonable inferences on the evidence and they
    provided a reasonable basis for the verdict derived at by the jury.  That is as
    far as our power of review goes under s. 686(1)(a) of the
Criminal Code
.

[6]

The appeal is dismissed.

Winkler C.J.O.

Doherty J.A.

S.T. Goudge J.A.


CITATION:
R. v. Tohl, 2012 ONCA
          9

DATE: 20120106

DOCKET: C52458

COURT OF APPEAL FOR ONTARIO

Sharpe, Blair and Rouleau JJ.A.

BETWEEN:

Her Majesty the Queen

Respondent

and

Mohamad Tohl

Appellant

Mohamad Tohl, in person

C. Mainville, Duty Counsel

V. Goela for the Public Prosecution Service of Canada

Heard: December 22, 2011

On appeal from  convictions imposed by Justice Michel
          Charbonneau of the Superior Court of Justice dated June 25, 2010.

ENDORSEMENT

[1]

Mr. Tohl seeks to set aside his convictions for possession of cocaine
    and marihuana for purposes of trafficking, and for unlawful possession of
    proceeds of property obtained by crime.  As duty counsel on his behalf, Ms.
    Mainville ably argued,

a)

that the trial judge erred in concluding that there were sufficient
    grounds to issue the search warrant in respect of his residence; and,

b)

that in light of the fact the search warrant  which had been issued in
    Quebec  was endorsed in Ontario without the proper record being placed before
    the endorsing justice, the trial judge erred in concluding that there was no
    violation of the appellants s. 8
Charter
rights.

[2]

We reject these arguments.

[3]

We did not find it necessary to call on the Crown with respect to the
    warrant endorsement issue.  The Ontario Justice of the Peace who endorsed the
    warrant had the warrant before her.  We are satisfied that in the circumstances
    of this case the warrant contained sufficient information to enable to conduct
    her statutory duty under s. 11(3) of the
Controlled Drug and Substances Act
S.C.
    1996, c 19, which is to endorse the warrant as a justice having jurisdiction in
    Ontario.  There is nothing in the record to indicate she failed to carry out
    her duties properly in this regard.

[4]

Nor would we give effect to the argument that there were insufficient
    grounds set out in the information to obtain the warrant (the ITO) on which
    the issuing justice in Quebec could have issued the warrant to search Mr.
    Tohls residence at 1380 Prince of Wales Dr. in Ottawa.

[5]

The trial judge applied the correct test for review of a search
    warrant.  There was more than ample evidence in the ITO, as he found, to
    support the conclusion  for purposes of issuing the warrant  that Mr. Tohl
    was actively engaged in supplying drugs to the Chahwan brothers on a regular
    basis and in substantial amounts, and that he had a supplier who was known by
    police to be a large drug supplier himself.  At the same time, the trial judge
    noted that there must be a link with the place to be searched, namely in this
    case, his residence, in order to justify the warrant.  The issue is whether
    the evidence, as a whole, is sufficient to establish that link here.

[6]

We agree with Ms. Mainville, that the trial judge appears to have
    overstated the evidence of that connection somewhat.  He concluded that there
    were a number of pieces of evidence which indicate a link to the place to be
    searched,  In this respect, the trial judge said:

Mr. Tohl, during all
    of this period when he was under surveillance, on a number of occasions, left
    his residence and went directly to the residence of [Mr.] Chahwan in
    circumstances, which under surveillance, led the police to suspect that he was
    bringing drugs to Mr. Chahwan.  He was observed attending at the residence of
    Mr. Elouta, the larger supplier I have talked about, picking up some packages
    and then coming back to his own residence in the context also that led the
    investigators or the surveillance officers [to believe] that he was picking up
    drugs and he, at that point in time, returned to his residence.  On a number of
    occasions, when he drove to the Chahwan residence, not long after the
    undercover agents purchased drugs, again the surveillance established him as
    being the person in control of this apartment at 1380 Prince of Wales.

[7]

The ITO does not support the finding that on a number of occasions the
    surveillance showed that Mr. Tohl left his residence and went directly to the
    residence of [Mr.] Chahwan.  There appears to be no such direct evidence. However,
    we are satisfied that despite this error, there was sufficient evidence to
    establish the required link with the appellants residence and to support the
    conclusion that Mr. Tohl was the person in control of the apartment at 1380
    Prince of Wales St. in Ottawa.  There is also direct evidence of one occasion
    on which Mr. Tohl attended at the residence of his supplier, Mr. Elouta,
    apparently obtained a quantity of drugs there, and returned directly to his
    residence.

[8]

In addition, there is one other piece of evidence in the ITO that, when
    considered in the light of the rest of the evidence, supports an inference that
    there may be evidence of drug crime activity in Mr. Tohls home: Mr. Tohl has
    been arrested on drug-related charges before and the last time he was, he was
    found to have almost a kilo of cocaine in his possession at his home.

[9]

Accordingly, and notwithstanding that the trial judge overstated the
    evidence of a direct connection between the drug dealing and Mr. Tohls
    residence, we are satisfied that there was sufficient evidence in the ITO from
    which the issuing judge could reasonably have inferred that a search of Mr.
    Tohls premises at 1380 Prince of Wales in Ottawa would reveal evidence of
    criminal activity contrary to the
Controlled Drugs and Substances Act
.

[10]

The appeal is therefore dismissed.

Robert J. Sharpe J.A.

R.A. Blair J.A.

Paul Rouleau J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
Remo Valente Real Estate (1990)
    Limited v. Portofino Riverside Tower Inc., 2012 ONCA 51

DATE: 20120126

DOCKET: C53256

Doherty, Goudge and Epstein JJ.A.

BETWEEN

Remo Valente Real Estate (1990) Limited

Plaintiff (Appellant)

and

Portofino Riverside Tower Inc., Westview Park
    Gardens (2004) Inc., Portofino Corporation and Dante J. Capaldi

Defendants (Respondents)

Gino Morga and Michelle D. Reynolds, for the appellant

William V. Sasso and Jacqueline A. Horvat, for the
    respondents

Heard: October 24, 2011

On appeal from the order of the Divisional Court (Hambly,
    Murray and Ray J.J.) dated February 24, 2010, with reasons by Hambly and Ray
    J.J. reported at 2010 ONSC 280, 68 B.L.R. (4th) 66.

COSTS
    ENDORSEMENT

[1]

The parties have provided us with detailed costs submissions
    which we have now reviewed carefully.

[2]

The history of these proceedings is a tangled one, to say the
    least.

[3]

The primary issue litigated in the lengthy trial and the appeal
    from it to the Divisional Court, was the oppression claim.  We have concluded
    that the Divisional Court was correct in deciding that it fails.

[4]

However, as we explained in our decision, the trial and the
    appeal to the Divisional Court left unresolved another significant issue
    concerning breach of contract.  We have directed that this be determined in a
    new trial.

[5]

There is no doubt that the costs to date have been largely
    incurred to address the oppression issue.  As we have indicated, however, this
    was not the only issue between the parties.  A fair costs award cannot be made
    as if it were.  Had the unresolved issue been litigated at trial, that could
    well have determined the appropriate costs order for the entire proceedings,
    including the oppression issue.

[6]

In our view, responsibility for failure to litigate the contract
    issue is divided.  The appellant pursued the oppression remedy single-mindedly
    at trial and in the Divisional Court.  However, in this court it also raised
    the contract issue, and once the respondents made clear the shared contractual
    responsibility of the three corporate respondents, a new trial was obviously
    needed if all issues between the parties were to be resolved.  We allowed the
    appeal, and so ordered.  In that sense, although it lost the oppression issue,
    the appellant succeeded on the appeal.

[7]

In applying the usual loser pays basis for costs, we have
    considered whether to attempt to allocate responsibility for the history of and
    current state of this litigation.  In a broad sense, while the appellant might
    be assigned more responsibility for the costs devoted to the oppression claim,
    the reverse might be said for the contract issue remaining still unresolved.
    Put another way, while the respondent could be said to have succeeded on the
    oppression issue, the appellant could be said to have succeeded on the appeal.

[8]

Any attempt in these circumstances to fine tune relative degrees
    of responsibility would necessarily be arbitrary in our view.

[9]

We conclude that the fair costs award in these unusual
    circumstances is that each side bear its own costs throughout.  We therefore
    order no costs here or below.  Costs of the new trial will of course be for the
    trial judge.

Doherty J.A.

S.T. Goudge J.A.

G.J. Epstein J.A.


CITATION:
Return On Innovation Capital
          Ltd. v. Gandi Innovations Limited, 2012 ONCA 10

DATE: 20120109

DOCKET: M40553

COURT OF APPEAL FOR ONTARIO

Sharpe, Blair and Rouleau JJ.A.

BETWEEN:

Return
          on Innovation Capital Ltd. as agent for ROI Fund Inc., ROI Sceptre

Canadian
          Retirement Fund, ROI Global Retirement Fund and ROI high Yield

Private Placement Fund and Any
          Other Fund Managed by ROI from time to time

Applicants/Respondents

and

Gandi
          Innovations Limited, Gandi Innovations Holdings LLC

and Gandi Innovations LLC

Respondents/Appellants

Christopher J. Cosgriffe and
          Natasha S. Danson, for James Gandy, Hary Gandy and Trent Garmoe

Matthew J. Halpin and Evan Cobb, for TA Associates Inc.

Harvey Chaiton and Maya Poliak, for the Monitor

Heard: In writing January 3, 2012

ENDORSEMENT

Overview

[1]

The moving parties (James Gandy, Hary Gandy and Trent Garmoe) are
    officers, directors and shareholders in the Gandi Group, a series of related
    companies currently under CCAA protection.  In those proceedings they assert
    indemnity claims in the range of $75  80 million against each of the companies
    in the Gandi Group.  The indemnity claims arise out of arbitration proceedings
    brought against them individually, as officers and directors, by TA Associates,
    a disgruntled investor in the Gandi Group.  TA Associates is the major
    unsecured creditor in the CCAA proceedings.

[2]

The assets of the Gandi Group have been sold and what remains to be done
    in the CCAA process is the finalization of a plan of compromise and arrangement
    for the distribution of the proceeds among the various creditors.  Before
    settling on the most effective type of plan for such a distribution  a
    consolidated plan, a partial consolidation plan, or individual corporate plans
    the Monitor and the creditors sought to have two preliminary issues determined
    by the Court:

a)

whether the moving parties (the Claimants) are entitled to indemnity
    from all of the entities which comprise the Gandi Group, and, if so,

b)

whether those indemnification claims are equity or non-equity claims
    for purposes of the CCAA (non-equity claims have priority).

[3]

On August 25, 2011, Justice Newbould, sitting on the Commercial List,
    ruled :

a)

that the Claimants were only entitled to indemnity from the direct and
    indirect parent company, Gandi Holdings (except that the Claimant, James Gandy
    only was also entitled to indemnification from a second entity in the Group,
    Gandi Canada);

b)

that any claim of James Gandy was subordinated to the claim of TA
    Associates because of an earlier existing Subordination Agreement; and

c)

that the claims for indemnification in respect of the TA Associates
    claim in the arbitration were equity claims for purposes of the CCAA and
    therefore subsequent in priority to the claims of unsecured creditors.

[4]

The Claimants seek leave to appeal from that order.

[5]

We deny the request.

Analysis

The Test

[6]

Leave to appeal is granted sparingly in CCAA proceedings and only when
    there are serious and arguable grounds that are of real and significant
    interest to the parties.  The Court considers four factors:

(1)

Whether the point on the proposed appeal is of significance to the
    practice;

(2)

Whether the point is of significance to the action;

(3)

Whether the appeal is prima facie meritorious or frivolous; and

(4)

Whether the appeal will unduly hinder the progress of the action.

See
Re Stelco (Re)
, (2005) O.R. (3d) 5, at para.
    24 (C.A.).

[7]

The Claimants do not meet this stringent test here.

The Indemnification Issue

[8]

Whether the Claimants are entitled to indemnification from all or just
    one or some of the entities in the Gandi Group was essentially a factual
    determination by the motion judge, is of no significance to the practice as a
    whole, and the proposed appeal on that issue is of doubtful merit in our view.
    We would not grant leave to appeal on that issue.

The Subordination Issue

[9]

The same may be said for the Subordination Agreement issue.  The
    Claimants argue that by declaring that the indemnity claim of James Gandy is
    subordinate to the CCAA claim of TA Associates, the motion judge usurped the
    role of the pending arbitration.  We do not agree.  The subordination issue
    needed to be clarified for purposes of the CCAA proceedings.  None of the
    criteria respecting the granting of leave is met in relation to this proposed
    ground.

The Equity Claim Issue

[10]

Nor do we see any basis for granting leave to appeal on the
    equity/non-equity claim issue.

[11]

Equity claims are subsequent in priority to non-equity claims by
    virtue of s. 6(8) of the CCAA.  What constitutes an equity claim is defined
    in s. 2(1) and would appear to encompass the indemnity claims asserted by the
    Claimants here.  Those provisions of the Act did not come into force until
    shortly after the Gandi Group CCAA proceedings commenced, however, and
    therefore do not apply in this situation.  Newbould J. relied upon previous
    case law suggesting that the new provisions simply incorporated the historical
    treatment of equity claims in such proceedings: see, for example,
Re Nelson
    Financial Group Ltd
., 2010 ONSC 6229 (CanLII), (2010), 75 B.L.R. (4
th
)
    302, at para. 27 (Pepall J.).  He therefore concluded that TA Associates was in
    substance attempting to reclaim its equity investment in the Gandi Group
    through the arbitration proceedings and that the Claimants indemnity claims
    arising from that claim must be equity claims for CCAA purposes as well.

[12]

This issue in the proposed appeal is not of significance to the practice
    since all insolvency proceedings commenced after the new provisions of the CCAA
    came into effect in September 2009 will be governed by those provisions, not by
    the prior jurisprudence.  The interpretation of sections 6(8) and 2(1) does not
    come into play on this appeal.  To the extent that existing case law continues
    to govern whatever pre-September 2009 insolvency proceedings are still in the
    system, those cases will fall to be decided on their own facts.  We see no
    error in the motion judges analysis of the jurisprudence or in his application
    of it to the facts of this case, and therefore see no basis for granting leave
    to appeal from his disposition of the equity issue in these circumstances.

Disposition

[13]

The motion for leave to appeal is therefore dismissed.  Costs to the
    Monitor and to TA Associates fixed in the amount of $5,000 each, inclusive of
    disbursements and all applicable taxes.

Robert J. Sharpe J.A.

R.A.
    Blair J.A.

Paul
    Rouleau J.A.


CITATION:
Rouge Valley Health System v. TD Canada
          Trust, 2012 ONCA 17

DATE: 20120112

DOCKET: C53104

COURT OF APPEAL FOR ONTARIO

Laskin, Goudge and Gillese JJ.A.

BETWEEN

Rouge Valley Health System

Plaintiff (Appellant)

and

TD Canada Trust

Defendant (Respondent)

Lincoln Caylor and Ranjan Agarwal, for the plaintiff
          (appellant)

Martin Greenglass, for the defendant (respondent)

Heard: May 31, 2011

On appeal from the judgment of Justice A.D. Grace of the
          Superior Court of Justice dated November 24, 2010, with reasons reported at
          2010 ONSC 4717.

Laskin J.A.:

A.        OVERVIEW

[1]

The appellant, Rouge Valley Health System, and
    the respondent, TD Canada Trust, were the innocent victims of a fraud
    orchestrated by a senior employee of Rouge Valley. The general question on this
    appeal is whether the motion judge erred in determining that Rouge Valley should
    bear the loss for that fraud.

[2]

In brief, Uwe Marshner, a manager at Rouge
    Valley, caused his employer to pay nearly $700,000 worth of invoices rendered
    by Scarborough-York Mobile Rehabilitation, a made-up entity, for services that
    were never provided.  Cheques were issued, payable to S.M.R., also a made-up
    entity. These cheques were deposited by Marshners associate, Sheldon
    Reinsilber, at TD Canada Trust.  Reinsilber put the cheques in an account for
    SMR and Associates, which was his sole proprietorship.

[3]

When the fraud came to light, Rouge Valley sued
    TD Canada Trust for conversion. The bank maintained that it had a valid defence
    under s. 20(5) of the
Bills of Exchange Act
, R.S.C. 1985, c. B-4, which
    provides that [w]here the payee is a fictitious or non-existing person, the
    bill may be treated as payable to bearer.

[4]

The parties agreed to resolve their dispute by motion
    for summary judgment.  Rouge Valley moved for summary judgment on its claim and
    TD Canada Trust sought summary judgment dismissing that claim. The motion
    judge, Grace J., held that Scarborough-York (S.M.R.) was both a non-existing
    and a fictitious person.
[1]
On either basis, TD Canada Trust was not liable in conversion. Accordingly, he
    dismissed Rouge Valleys motion for summary judgment and granted TD Canada
    Trusts motion, summarily dismissing the claim against it.

[5]

Rouge Valley argues three points on its appeal:

(1)       The motion judge erred in finding that Scarborough-York
    (and therefore S.M.R.) was non-existing because it was not a real person. Instead,
    the motion judge ought to have found that Scarborough-York was not non-existing
    because it was
plausibly
real.

(2)       The motion judge erred in finding that Scarborough-York
    was non-existing because its relationship with Rouge Valley was not real.

(3)       The motion judge erred in finding that Rouge Valley had no
    intent to pay Scarborough-York.

[6]

Rouge Valleys first two arguments are related,
    and challenge the motion judges finding that S.M.R. was a non-existing person.
    Its third argument challenges the motion judges finding that S.M.R. was a
    fictitious person. I would reject Rouge Valleys first two arguments and uphold
    the motion judges finding that S.M.R. was a non-existing person under s. 20(5)
    of the Act. For that reason, I would dismiss Rouge Valleys appeal.  It is
    therefore unnecessary to consider Rouge Valleys third argument and the motion
    judges finding that S.M.R. was also a fictitious person.

B.        THE
    LEGAL CONTEXT

(a)       Cheques
    payable to order, bearer cheques and s. 20(5) of the
Bills of Exchange
    Act

[7]

Under s. 20(2) of the
Bills of Exchange Act
,
    a cheque may be payable either to order or to bearer. A bank may validly
    negotiate a cheque payable to order only if the cheque is both delivered and
    endorsed. In contrast, a bank may validly negotiate a cheque payable to bearer
    if the cheque is simply delivered to the bank. Even if a bearer cheque has a
    forged or missing endorsement, the bank can negotiate it on delivery.

[8]

In most cheque transactions, the payor (the
    drawer) issues a cheque on its bank account, which instructs its bank (the
    drawing bank) to pay the stated amount to the person named on the cheque (the
    payee). Ordinarily, if the cheque is made payable to a specific payee it is
    payable to order, and the payee can negotiate the cheque. The payee deposits
    the cheque at its own bank (the collecting bank), which collects the money from
    the drawing bank and credits the payees account. A collecting bank will be
    liable in conversion if it credits the account of someone other than the
    intended payee.

[9]

Conversion  the wrongful interference with the
    goods of another  is a tort of strict liability. That the wrongful
    interference may have been innocent does not afford the bank a defence. In the
    present case, Rouge Valley claims that TD Canada Trust, wrongfully, albeit
    innocently, converted its money by negotiating the cheques in question.

[10]

However, s. 20(5) of the
Bills of Exchange
    Act
provides banks with some reprieve from the harsh result of an innocent
    conversion. That section stipulates that a cheque payable to a specific payee
    that is either a fictitious or non-existing person may be treated as payable to
    bearer, not to order. The person delivering the cheque to the collecting bank
    (the bearer) is deemed to be the rightful payee and the bank is not liable for
    negotiating the cheque. A defence under s. 20(5) is available to both a drawing
    bank and a collecting bank such as, in this case, TD Canada Trust: see
Boma
    Manufacturing Ltd. v. Canadian Imperial Bank of Commerce
, [1996] 3 SCR 727,
    at para. 52.

[11]

Section 20(5) thus protects a bank from fraud on
    the drawer committed by a third party, including an insider in the drawer
    organization. The section allocates the loss to the drawer, who typically is
    better positioned to discover the fraud or to insure against it: see
Bank of
    Nova Scotia v. Toronto Dominion Bank
(2001), 145 O.A.C. 106, at para. 15.

[12]

In the present case, TD Canada Trust claims that
    it is not liable in conversion because S.M.R. is a non-existing and a
    fictitious person under s. 20(5). It submits that the loss is properly
    allocated to Rouge Valley

C.        THE FRAUD

[13]

The facts material to this appeal are largely not
    disputed. My summary here is drawn almost entirely from the thorough reasons
    and analysis of the motion judge.

(a)       Marshners position and authority at Rouge
    Valley

[14]

Rouge Valley is an acute care community hospital
    servicing patients in Toronto, Ajax and Pickering. Marshner was one of five
    program managers employed by Rouge Valley. He managed the hospitals mental
    health program. Though not an officer or director at Rouge Valley, Marshner
    nonetheless had significant responsibility. He oversaw a budget of more than
    $10 million and, on his own, could authorize the payment of invoices of up to
    $10,000. None of the invoices in question in this litigation were for more than
    $10,000.

[15]

Rouge Valley used an automated system for
    issuing cheques. So, for example, when Marshner approved an invoice, an
    accounts payable clerk would input the amount and name of the supplier into the
    system, and a cheque containing mechanical signatures would be produced
    electronically. Marshner did not need anyones approval to issue cheques of
    less than $10,000.

(b)       The previous fraud involving Delisle Youth
    Services

[16]

Delisle Youth Services is a community agency and a member of the United Way.
    It provides counselling and treatment programs for troubled youth. As well, it
    provides children with mental health problems access to group homes and their resources.

[17]

Reinsilber was the executive director of Delisle until April 2003, when
    he was fired. For several years, Marshner and Reinsilber used Delisle to
    defraud Rouge Valley of over $1.3 million. Although that amount is not in issue
    in this litigation, the fraud involving Delisle provides an important context
    for the issues on this appeal.

[18]

The fraud worked this way: Marshner established a vendor code for
    Delisle (which was later changed to S.M.R.) at Rouge Valley. Reinsilber sent
    Marshner a series of fraudulent invoices, each one for less than $10,000. The
    invoices were purportedly for mental health treatment services rendered to
    young Rouge Valley patients. In fact, Delisle never provided any services to
    Rouge Valley; however, Marshner authorized the payment of these invoices. Eventually,
    Reinsilber forwarded a portion of the money paid to Delisle back to Marshner.

(c)       The fraud involving Scarborough-York and S.M.R.

[19]

After Delisle fired Reinsilber, he and Marshner concocted a new plan to
    defraud Rouge Valley. Reinsilber wrote to Marshner at Rouge Valley to advise
    him that in the future a new company  Scarborough-York Mobile Rehabilitation
    would be providing services to Rouge Valley. That letter, and the others that
    followed requesting payment, contained the Delisle logo but not the name
    Delisle or Delisles address. Instead, they contained the acronym S.M.R.
    followed by the name Scarborough-York Mobile Rehabilitation, an address and a
    telephone number. Reinsilber signed each letter and asked Rouge Valley to send
    a cheque for the alleged service to S.M.R.

[20]

Scarborough-York Mobile Rehabilitation did not exist; it was a made-up
    entity.  S.M.R. also did not exist, though the acronym bore some resemblance to
    Reinsilbers sole proprietorship, SMR and Associates.

[21]

In all, Marshner approved the payment of 78 cheques to S.M.R., each for
    less than $10,000. Reinsilber deposited the cheques in his account for SMR and
    Associates at TD Canada Trust. He then gave Marshner the bulk of the funds. The
    aggregate fraud amounted to $688,511. The fraud was discovered in 2007 through
    the efforts of a diligent employee of Rouge Valley.

D.        DID THE MOTION JUDGE ERR IN DETERMINING THAT S.M.R. WAS A
    NON-EXISTING PERSON UNDER S. 20(5) OF THE
BILLS OF EXCHANGE ACT?

[22]

A good deal of case law and commentary has considered the meaning of a
    non-existing person and a fictitious person for the purpose of s. 20(5) of the
Bills
    of Exchange Act.
The main authority remains the majority judgment of
    Iacobucci J. in
Boma Manufacturing Ltd. v. Canadian Imperial Bank of
    Commerce
. There, with some modification, he approved of four propositions
    taken from John D. Falconbridges
Banking and Bills of Exchange,
6
th
ed. (Toronto: Canada Law Book, 1956), at pp. 468-469. The four propositions
    of which propositions 1 and 4 are relevant to my analysis  are as follows:

(1)

If the payee is not the name of any real person known to the drawer, but
    is merely that of a creature of the imagination, the payee is non-existing, and
    is probably also fictitious.

(2)

If the drawer for some purpose of his own inserts as payee the name of a
    real person who was known to him but whom he knows to be dead, the payee is
    non-existing, but is not fictitious.

(3)

If the payee is the name of a real person known to the drawer, but the
    drawer names him as payee by way of pretence, not intending that he should
    receive payment, the payee is fictitious, but is not non-existing.

(4)

If the payee is the name of a real person, intended by the drawer to
    receive payment, the payee is neither fictitious nor non-existing,
    notwithstanding that the drawer has been induced to draw the bill by the fraud
    of some other person who has falsely represented to the drawer that there is a
    transaction in respect of which the payee is entitled to the sum mentioned in
    the bill.

[23]

Two important principles structure these propositions.

·

Whether the payee is non-existing is a simple question of fact not
    depending on anyones intention.

·

Whether the payee is fictitious depends upon the intention of the
    drawer of the instrument, that is the drawer of a bill or cheque or the maker
    of a note.

[24]

In the present case, for the purpose of Falconbridges four propositions,
    the payee is S.M.R., and the drawer is Rouge Valley, the entity out of whose
    bank account the 78 cheques in issue were drawn: see
Boma,
at para. 59. Rouge
    Valley contends that this case falls under Falconbridges fourth proposition:
    S.M.R is neither non-existing nor fictitious.  TD Canada Trust contends that
    this case falls under proposition one: S.M.R. is both non-existing and
    fictitious. I propose to deal with whether S.M.R. is a non-existing person,
    because, in my view, it is and that disposes of the appeal.

[25]

On its face S.M.R. seems to be, beyond doubt, a non-existing person.
    Falconbridge states that whether a person is non-existing is a question of
    fact. Rouge Valley conceded that Scarborough-York and S.M.R. did not exist, but
    were entities made up by Marshner and Reinsilber to defraud Rouge Valley. In
    other words, they were non-existing. And they certainly were not known to the
    drawer, Rouge Valley.  Falconbridges first proposition thus seems applicable.
    Moreover the motion judge found as a fact that S.M.R. was non-existing. That
    finding is entitled to deference in this court.

[26]

However, as I said earlier, in
Boma
, Iacobucci J. approved
    Falconbridges four propositions with some modification, and it is this
    modification or gloss on which Rouge Valley relies  a gloss that imports the
    notion of plausibility.

[27]

Boma Manufacturing Ltd. and Panabo Sales Ltd. were two small
    family-owned companies controlled by a husband and wife, Mr. and Mrs Mange. Over
    a five-year period, their bookkeeper, Ms. Alm defrauded the companies. Although
    she was not an officer, director or shareholder of either company, Ms. Alm had signing
    authority on cheques and she signed or had a senior officer sign numerous
    cheques payable to a J. Lam or J.R. Lam, neither of whom existed. She then
    deposited the cheques in her bank account at the CIBC. In the companies action
    to recover their money, the bank relied on s. 20(5) of the
Bills of Exchange
    Act.
It claimed that the payees on the cheques were fictitious and
    non-existing.

[28]

The majority of the Supreme Court of Canada held otherwise. Iacobucci J.
    considered whether J. Lam and J.R. Lam were non-existing or fictitious
    payees. He acknowledged that as the cheques were made

payable not to
    actual persons associated with the companies, but to persons with whom the Manges
    had no dealings, Falconbridges first proposition seemed to dictate that J.
    Lam and J.R. Lam were non-existing persons.

[29]

However, the companies had had dealings with a subcontractor named Van
    Sang Lam. Iacobucci J. concluded Mr. Mange honestly believed that the cheques
    were being made out for an existing obligation to a real person known to them. He
    therefore held that the payees J. Lam and J.R. Lam were not non-existing
    and hence not fictitious. The cheques thus fell under Falconbridges fourth
    proposition. He wrote at paras. 60-61:

Many of the cheques, however, were made payable not to actual persons
    associated with the companies, but to J. Lam and J. R. Lam.  The
    appellants had no dealings with any persons of such names.  According to
    the criteria set out in Falconbridge, supra, such a person would be categorized
    as non-existing, and hence, fictitious.  But in my view, it seems that
    Boris Mange was reasonably mistaken in thinking that J. Lam or J. R. Lam
    was an individual associated with his companies. Mange knew that one of the
    subcontractors retained by the companies was a Mr. Lam.  He did not
    specifically recall Lams first name, which, incidentally, was Van Sang.
    However, when Mange approved the cheques to J. Lam and J. R. Lam, he
    honestly believed that the cheques were being made out for an existing obligation
    to a real person known to the companies.  The trial judges comments in
    this regard were tantamount to a finding of fact, and were not disturbed on
    appeal; as these are concurrent findings of fact, this Court should not
    intervene.

Accordingly, the cheques made out to J.
    Lam and J. R. Lam also fall within the fourth category, and could not be
    treated by the CIBC as payable to bearer.  Rather, the cheques were
    payable to order, and in order to be negotiable to the bank, delivery alone was
    not sufficient.  Valid, non-forged endorsements were required.

[30]

In his text,
The Law of Banking and Payment in Canada
(Aurora:
    Canada Law Book, 2008), Bradley Crawford summarizes the effect of Iacobucci
    J.s gloss on
Boma
:

[T]he law appears to be that if the name of the
    payee is a pure invention of the drawer of a cheque (or the maker of a note),
    the payee may be non-existing within the meaning of BEA, s. 20(5), but only
    if it is also true that the name is of a person having no real connection with
    the drawers business, or
semble
, is not a name that
plausibly
might be identified by the drawer as being a real creditor of his business.
    [Emphasis in original.]: at p. 22-34.

[31]

In the present case, Rouge Valley relies on the notion of plausibility
    to submit that although S.M.R. may in fact be a non-existing person, it is not
    in law under s. 20(5), a non-existing person. In support of this submission,
    Rouge Valley makes two related arguments.

[32]

The first argument is that the motion judge ought to have found
    Scarborough-York and therefore S.M.R. was plausibly a real person because it
    provided services similar to those provided by Delisle, which was a real
    person. The second argument is that even though Rouge Valleys relationship
    with S.M.R. may not have been real, S.M.R. was not non-existing because Rouge
    Valley honestly believed that cheques were being made out for an existing
    obligation to an entity associated with Delisle, a real community agency with
    whom it did business.

[33]

The motion judge rejected these arguments, and in my view, he was
    entirely correct in doing so. Rouge Valleys arguments fail for any one of at
    least three reasons.

[34]

First
, the gloss on Falconbridge based on the notion of
    plausibility is limited to cases where the payee named on the cheque is
    factually non-existent, in other words is not a real entity known to the
    drawer, but has a name similar to the name of an actual person with whom the
    drawer has done business. In those situations, the drawer might plausibly
    maintain that it believed it was writing a cheque to a real creditor of its
    business.

[35]

Boma
itself illustrates this limitation. J. Lam and J.R. Lam
    were creatures of Ms. Alms imagination, but each bore a name similar to that
    of a real creditor of the companies, Van Sang Lam. Thus the owner of the
    companies, Mr. Mange, could plausibly maintain that he honestly believed he was
    paying a real creditor of his business.

[36]

This courts decision in
Westboro Flooring and Décor Inc. v. Bank of
    Nova Scotia
(2004), 71 O.R. (3d) 723, also shows the limited reach of the
    notion of plausibility. There the court was asked to decide whether a made-up
    entity, Ottawa-Hall Carpet was nonetheless not a non-existing person under s.
    20(5) because the drawer, Westboro, believed it had been approving cheques to
    an existing supplier named Terry Govas Ottawa-Hull Carpet Ltd.. This court
    upheld the trial judges finding that Ottawa-Hull Carpet was not a
    non-existing payee. Simmons J.A. wrote at para. 25 that even if the name that
    Westboro used to refer to its supplier was not precisely accurate, the error was
    one of misnomer and did not make the payee non-existing under the Falconbridge
    criteria.

[37]

Here the names Scarborough-York Mobile Rehabilitation and S.M.R., both
    admittedly made-up names, bear no similarity to the name of Rouge Valleys
    alleged real creditor, Delisle. Indeed, Rouge Valley has not even argued that
    in paying S.M.R., it intended to pay Delisle.

[38]

The situation might be different if, for example, Rouge Valley did
    business with a supplier named M.R.S. and made a cheque to S.M.R. honestly but
    mistakenly thinking that it was paying for services M.R.S. had rendered. That,
    however, is not what occurred. To extend the notion of plausibility in the way
    Rouge Valley contends is antithetical to the principles of negotiability,
    certainty and finality that govern cheque transactions: see
Boma,
at para.
    91.

[39]

Second
, Rouge Valleys arguments must fail because they rest on a
    false premise: that just as Van Sang Lam was a real creditor of the companies
    in
Boma
, Delisle was a real creditor of the hospital. However, Delisle
    was anything but a real creditor of Rouge Valley. It was a real agency, but it
    had never provided services to Rouge Valley. Instead, it was a tool of the
    fraud perpetrated by Marshner and Reinsilber. The motion judge put it this way
    in a passage with which I agree, and which by itself is fatal to Rouge Valleys
    position.

Second, in
Boma
the relationship between the
    intended payee and the drawer was a real one. Van Sang Lam was a supplier.
    There had been real transactions. There was, in other words a factual
    foundation for a finding that the drawers intention to pay Van Sang Lam was
    honest and reasonable or at least plausible. Here there is no such
    foundation. The entire relationship between Rouge Valley and Delisle was a
    façade. No services were rendered. No amounts were due.Ever. It seems to me
    there was a shocking systemic failure within Rouge Valley which allowed a
    middle level employee to perpetrate a fraud based on a relationship that had
never
existed.  It affronts my view of common sense to suggest that this case is
    analogous to
Boma
because Delisle was the type of organization with whom
    Rouge Valley often partnered.  The fact is it never partnered with Delisle.
    Surely any due diligence by someone in authority at Rouge Valley would have
    revealed that fact. [Emphasis in original.]: at para. 71

[40]

Third
, as the trial judge noted in
Boma
, Mr. Mange, who
    ran the companies, actually considered the name of the payee when the cheques
    in question were drawn. The court could therefore find that he honestly
    believed he was paying a legitimate creditor of his business. Here, in
    contrast, no one responsible for running Rouge Valley considered any of the
    cheques authorized by Marshner. Therefore, no one at Rouge Valley could say
    that the cheques were being issued to a known entity with whom the hospital had
    previous legitimate business dealings.

[41]

For these three reasons, I reject Rouge Valleys arguments. I would
    affirm the motion judges finding that S.M.R. is a non-existing person under s.
    20(5) of the
Bills of Exchange Act.
The purpose of this section is to
    protect banks from fraud on the drawer, even fraud committed, as in this case,
    by an employee of the drawer. As between the drawer and the collecting bank, s.
    20(5) allocates the loss to the drawer who usually is better able to detect the
    fraud or insure against it. Allocating the loss to Rouge Valley is consistent
    with the purpose of s. 20(5).

[42]

Because S.M.R. is a non-existing person, TD can avail itself of the
    defence contained in s. 20(5) of the
Bills of Exchange Act
. It is
    therefore unnecessary to address the question whether S.M.R. is also a fictitious
    person.

E.        CONCLUSION

[43]

The motion judge correctly decided that S.M.R.
    was a non-existing person under s. 20(5) of the
Bills of Exchange Act
and that therefore TD Canada Trust is not liable in conversion.

[44]

I would dismiss Rouge Valleys appeal with costs
    fixed at $16,000 inclusive of disbursements and applicable taxes.

RELEASED:  January 12, 2012                                                     John
    Laskin J.A.

JL                                                                                I
    agree S.T. Goudge J.A.

I
    agree E.E. Gillese J.A.

[1]
The motion judge seems to have used the names Scarborough-York and S.M.R.
    interchangeably. Although this does not affect his analysis, the payee was
    S.M.R.


CITATION:
Royal Bank of Canada v. Hejna, 2012 ONCA 27

DATE: 20120113

DOCKET: C53542

COURT OF APPEAL FOR ONTARIO

Weiler, Armstrong and Rouleau JJ.A.

BETWEEN:

Royal Bank of Canada

Plaintiff (Respondent)

and

Roland Hejna

Defendant (Appellant)

Robert Klotz, for the appellant

Martin Greenglass, for the respondent

Heard and released orally: January 9, 2012

On appeal from the order of Justice
          Susan E. Healey of the Superior Court of Justice, dated March 10, 2011.

ENDORSEMENT

[1]

We are all of the opinion that the appeal should be allowed.  The
    motions judge failed to consider the proportionality of granting the banks
    motion to strike Mr. Hejnas defence for failure to pay $3,000 in costs in an
    action for almost seven million dollars in fraud which had been allowed to
    proceed despite Mr. Hejnas bankruptcy.  In addition the motions judge failed
    to consider the possibility of an adjournment particularly in light of the fact
    that Mr. Hejna had been out of the country since service of the motion.  There
    is no evidence of prejudice to the bank.  The costs order of $3,000 has been
    paid.

[2]

Accordingly the appeal is allowed and the order of the motions judge
    striking Mr. Hejnas statement of defence for failure to pay $3,000 in costs is
    set aside.  In addition, the order granting the bank default judgment on March
    18, 2011 is set aside.

[3]

Mr. Hejna concedes that he should pay the costs of the motion that the bank
    was invited to bring in the event that the $3,000 costs had not been paid by
    February 15, 2011.  The costs of that motion were fixed in the amount of $1,500.
    Insofar as the costs of the appeal are concerned, we award those costs to Mr.
    Hejna and fix the costs of the appeal in the amount of $8,000.  The costs of
    the motion are to be set off against the costs of appeal with the result that
    $6,500 in costs are awarded to Mr Hejna inclusive of all disbursements and
    applicable taxes.

K.M. Weiler
    J.A.

R.P.
    Armstrong J.A.

Paul Rouleau
    J.A.


CITATION:
Tuerr Holdings Inc. v. Vrankovic, 2012 ONCA 5

DATE: 20120105

DOCKET: C53722

COURT OF APPEAL FOR ONTARIO

Cronk, Lang and Watt JJ.A.

BETWEEN

Tuerr Holdings Inc.

Respondent/Plaintiff

and

Peter Vrankovic

Appellant/Defendant

Lisa S. Corne, for the appellant

J. Greg Murdoch, for the respondent

Heard:
December 8, 2011

On appeal from the judgment of Justice W. L. MacPherson of the
          Superior Court of Justice, dated March 9, 2011.

ENDORSEMENT

[1]

Peter Vrankovic (Vrankovic) appeals from an order granting summary
    judgment to Tuerr Holdings Inc. (Tuerr) on Vrankovics guarantee of a second
    mortgage on a commercial property owned by Cambridge Place Commercial
    Corporation (Cambridge) of which Vrankovic was the president and a director.

[2]

Vrankovic says that the motion judge erred in granting summary judgment to
    Tuerr. He submits that the judge erred in holding that Vrankovic had waived his
    right as guarantor to advance deficiencies in Tuerrs prior attempt to enforce
    its security in response to the motion for summary judgment. Vrankovic also
    argues that the motion judge was wrong in her conclusion that the evidence
    adduced by him on the motion raised no genuine issues requiring a trial.

[3]

We would not give effect to either argument advanced by Vrankovic and,
    for the reasons that follow, would dismiss the appeal.

The Background

[4]

In April 2010, Cambridge was in default on its
    second mortgage to Tuerr. As a result of Cambridges default, Tuerr served a
    Notice of Intention to Enforce Security on Cambridge and a Notice to Attorn Rents
    on Cambridges tenants.

[5]

On April 29, 2010, Cambridge sought injunctive
    relief requiring Tuerr to withdraw its Notice to Attorn Rents and to inform all
    Cambridges tenants that their rents were to be paid to Cambridge rather than
    to Tuerr. Cambridge also sought relief from the consequences of its default on
    payment into court or to Tuerr of the amount of the outstanding arrears.

[6]

On May 14, 2010, the parties executed Minutes of
    Settlement and Forbearance Agreement. This document included an agreement by
    Tuerr to suspend any further enforcement proceedings on the mortgage until
    September 5, 2010, provided Cambridge paid the arrears owing to Tuerr and kept
    its first mortgage on the property, held by Meridian Credit Union (Meridian),
    in good standing.  The parties agreement under the Minutes of Settlement and
    Forbearance Agreement was subsequently confirmed by a consent court order dated
    May 17, 2010.

[7]

Vrankovic signed the Minutes of Settlement and
    Forbearance Agreement as president of Cambridge, with authority to bind the
    corporation, and also in his personal capacity.

[8]

Contrary to the terms of the Minutes of
    Settlement and Forbearance Agreement, and of the consent court order, Cambridge
    did not pay the arrears owing to Tuerr and defaulted on its first mortgage to
    Meridian.  Under s. 243(1) of the
Bankruptcy and Insolvency Act
, R.S.C.
    1985, c.B-3, Meridian obtained an order appointing a Receiver to sell the
    property.

[9]

Tuerr sued Vrankovic on his guarantee of the
    second mortgage and obtained summary judgment on the claim on March 9, 2011.

The Grounds of Appeal

[10]

The appellant seeks reversal of the order
    granting summary judgment on two main grounds, which we would paraphrase in
    these terms:

i.          that the motion judge erred in concluding that Vrankovic
    had waived his right to raise deficiencies in the Notice of Intention to
    Enforce Security sent by Tuerr by signing the Minutes of Settlement and
    Forbearance Agreement; and

ii.         that the motion judge erred in failing to find that the
    evidence filed in response to the motion, affidavits from Vrankovic and his son,
    raised genuine issues requiring a trial.

Discussion

[11]

We would not give effect to either ground of
    appeal.

Deficiencies in the
    Notice and Waiver

[12]

On April 29, 2010, Cambridge sought relief from
    the consequences of its default under the second mortgage. On May 14, 2010,
    Cambridge and Tuerr executed the Minutes of Settlement and Forbearance
    Agreement. According to that document, Cambridge withdrew its application
    seeking injunctive and other relief against Tuerr and Tuerr agreed to hold off
    on any further enforcement proceedings until September 5, 2010, as long as
    Cambridge did not default under the terms of the agreement or on the first
    mortgage to Meridian.

[13]

Vrankovic signed the Minutes of Settlement and
    Forbearance Agreement on behalf of Cambridge and in his own capacity. Unbeknownst
    to Tuerr, when Vrankovic signed the document, Cambridge was already in default in
    its mortgage payments to Meridian, the first mortgagee, and owed over $500,000
    in municipal taxes on the property. The motion judge concluded that by signing
    this document in his personal capacity, Vrankovic waived his right to raise any
    previous deficiencies in Tuerrs enforcement proceedings in response to the
    motion for summary judgment.

[14]

We agree.  The motion for summary judgment was
    based on Cambridges default under the Minutes of Settlement and Forbearance
    Agreement, which amended the terms of the second mortgage. What had occurred
    previously, in particular, the adequacy of prior notices sent to Cambridge, was
    at once irrelevant to a decision on the motion for summary judgment and, in any
    event, waived by Vrankovic.

[15]

The alleged deficiencies in Tuerrs enforcement
    measures were known to Cambridge and Vrankovic at the time they executed the
    Minutes of Settlement and Forbearance Agreement.  Indeed, they formed a principal
    basis for Cambridges injunction application.  Moreover, Cambridge breached the
    terms of the Minutes of Settlement and Forbearance Agreement in two respects:
    by failing to pay the arrears owing to Tuerr, as it promised to do, and by its
    default under the Meridian first mortgage.  Thus, whatever the nature of
    Cambridges prior complaints regarding Tuerrs attempts to enforce its
    security, under the bargain made in the Minutes of Settlement and Forbearance
    Agreement, Tuerr was entitled to enforce its security.

[16]

This ground of appeal fails.

The Absence of
    Genuine Issues Requiring a Trial

[17]

Vrankovic contends that the motion judge erred
    in failing to conclude that his affidavit evidence filed in response to the
    motion raised genuine issues requiring a trial.  In his affidavits and in that
    of his son, Vrankovic advanced the claim that, by oral agreement, Meridian
    agreed to forebear on enforcement of its first mortgage and to permit Cambridge
    to pay reduced rent so that Cambridge could pursue lease negotiations that
    would yield increased revenue from existing or potential tenants. This
    evidence, Vrankovic submits, afforded a viable defence to the assertion that
    Meridian was entitled to enforce its mortgage security.

[18]

Vrankovic further argues that the motion judge erred
    by misapprehending and failing to accept his evidence about the impact of
    Tuerrs Notice to Attorn Rents on Meridians willingness to forebear on its
    enforcement of the first mortgage. Vrankovic further complains that the motion
    judge relied on unreliable hearsay, or double hearsay, from a declarant who
    bore Vrankovic ill-will rather than on Vrankovics own firsthand account.

[19]

We disagree.

[20]

On the basis of the record before her, the
    motion judge was well-positioned to have a full appreciation of the evidence
    and the issues in the matter before her. She rejected, as she was entitled to
    do, Vrankovics bald assertions of an oral forbearance agreement with Meridian.
    These assertions were unsupported by any documentary evidence, at odds with
    commercial reality, and inconsistent with the terms of the first mortgage. Moreover,
    even on the most generous reading of Vrankovics affidavit materials, Cambridge
    was hopelessly in debt, in breach of the terms of the first mortgage and beyond
    rescue by any extended lease arrangements that were nowhere near completion.

[21]

The preference of the motion judge for the evidence
    contained in the affidavit of Tuerrs secretary-treasurer to Vrankovics
    assertions does not render the motion judges conclusion erroneous. Setting to one
    side the hearsay portion of the secretary-treasurers affidavit, Vrankovics affidavit
    materials were replete with unsubstantiated bald allegations of ongoing
    negotiations, barren of detail and unsupported by any documentary or other
    evidence from Meridian or existing or proposed tenants.  In particular,
    Vrankovic failed to adduce any convincing evidence of the alleged oral
    agreement with Meridian or to support his claim that Cambridge suffered damage,
    including the loss of prospective tenants, as a result of Tuerrs actions.  His
    evidence, therefore, failed to raise any genuine issues requiring a trial.

[22]

This ground of appeal lacks substance.

Conclusion

[23]

The appeal is dismissed. The respondent shall
    have its costs of the appeal, which we fix at $15,000 inclusive of
    disbursements and all applicable taxes.

E.A. Cronk J.A.

S.E. Lang J.A.

David Watt J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
United States of
    America v. Nguyen, 2012 ONCA 58

DATE: 20120130

DOCKET: M40855 (C53423 and C54538)

OConnor A.C.J.O., MacPherson J.A. and OConnor
    J. (
ad hoc
)

IN THE MATTER
    OF an appeal by the Applicant of his committal for extradition;

AND IN THE
    MATTER OF an application for judicial review of the Ministers decision on
    surrender;

AND IN THE
    MATTER OF an application pursuant to section 683(1) of the
Criminal Code
;

BETWEEN

The Attorney General of Canada on behalf of the
    United States of America

Respondent

and

Dung Ngoc Nguyen

Appellant/Applicant

Kim Schofield and Zachary Kerbel, for the applicant

Richard Kramer, for the respondent

Heard and released orally: January 26, 2012

ENDORSEMENT

[1]

The applicant Dung Ngoc Nguyen brings this motion for the
    production of documents, to cross-examine the certifying U.S. attorney, and to
    examine the applicants counsel at first instance.  All of this relief is
    sought to explore paragraph 10 of the Record of the Case which, the applicant
    asserts, is untruthful.  The key sentence in this paragraph is: Canadian law
    enforcement officers are expected to testify that DUNG NGOC NGUYEN has a
    history of trafficking drugs in Canada.

[2]

The applicant states that this sentence is false because,
    although she was charged with drug trafficking offences in 2005, the charges
    were withdrawn after the trial judge made a
Charter
ruling excluding
    evidence.  The applicant submits that inclusion of the impugned statement in
    the ROC constitutes an abuse of process.  The relief sought in the motion is
    designed to obtain information about the impugned statement so that the
    applicant can develop an abuse of process argument for her appeal of the committal
    order of the Thorburn J. and her judicial review of the Ministers surrender
    decision.

[3]

We do not accept this submission.  There is no air of reality to
    the applicants assertion that the requesting state deliberately attempted to
    mislead Canadian courts.  The applicant concedes that there was no attempt to
    hide the withdrawal of the earlier Canadian charges; in fact, this was
    disclosed during the initial application for her extradition arrest warrant.

[4]

In addition, neither the applicants previous counsel (at the
    committal stage) nor her current counsel (at the surrender stage) sought
    disclosure or production relating to this issue.  The current motion is a very
    late-developing contention in the extradition process.  Indeed, the information
    in paragraph 10 is completely unconnected to the facts which gave rise to the
    charges that are the subject matter of this extradition request.

[5]

Finally, the committal judge did not rely on the information in
    the impugned paragraph in making her committal decision.  As for the Minister,
    he carefully addressed the issue on the basis of the record before him and
    stated you have provided no evidence to suggest that the United States was
    attempting to mislead by including this information in its materials.  The
    record supports this observation.

[6]

As an alternative argument, the applicant seeks an order that the
    applicants prior counsel attend for examination in relation to an allegation
    of ineffective assistance of counsel.  On the basis of this record, including
    previous counsels oral submissions and factum at the committal hearing and his
    letter to Ms. Schofield dated January 16, 2012, we see no basis for making such
    an order.

[7]

The motion is dismissed.

Dennis OConnor A.C.J.O.

J.C. MacPherson J.A.

OConnor J. (ad hoc)


COURT OF APPEAL FOR ONTARIO

CITATION:
Warren
    Woods Land Corporation v. 1636891 Ontario Inc., 2012 ONCA 34

DATE: 20120118

DOCKET: M40854 (C54786)

Weiler (In Chambers)

BETWEEN

Warren
    Woods Land Corporation, 617567 N.B. Inc.,

1340258
    Ontario Inc. and 797045 Ontario Limited

Applicant

(Respondents in Appeal/Responding
    Parties)

and

1636891 Ontario Inc.

Respondent

Appellant/Moving Party)

Christopher A.L. Caruana, for the moving party

Barbara Frederikse, for the responding parties

Heard: January 13, 2012

On appeal from the order of Justice Barry H. Matheson of
    the Superior Court of Justice, dated December 5, 2011, with reasons reported at
    2011 ONSC 7177, and on a motion for a stay pending appeal.

COSTS ENDORSEMENT

[1]

The motion for a stay was disposed of by written reasons dated January
    6, 2012. Oral submissions were made today by teleconference.

[2]

Costs of the motion are to the responding parties and are fixed in the
    amount of $4,625.00, inclusive of disbursements and all applicable taxes.

Karen M. Weiler J.A.