COURT OF APPEAL FOR ONTARIO

CITATION:
Canada (Minister of Justice) v. Dika, 2012 ONCA
    196

DATE: 20120323

DOCKET: C54345

Rosenberg, Armstrong and Juriansz JJ.A.

BETWEEN

Minister of Justice of Canada

Respondent

and

Myfit Dika aka Mike Davis

Applicant

Vincenzo Rondinelli, for the applicant

Richard A. Kramer and Roy Lee, for the respondent

Heard and endorsed:  March 22, 2012

An application for a judicial review of the Surrender
    Order of the Minister of Justice dated May 31, 2011.

APPEAL BOOK ENDORSEMENT

[1]

There is no merit to this application. The reasonableness of the
    decision to extradite to the United States is not affected by the outstanding
    charges in Macedonia for entirely different offences.

[2]

The application is dismissed.


COURT OF APPEAL FOR ONTARIO

CITATION:
Capano
    (Re), 2012 ONCA 172

DATE: 20120320

DOCKET: C54080

Doherty, Laskin JJ.A. and Brown R.S.J. (
Ad
    Hoc
)

IN THE MATTER OF:  Rocco Capano

Rocco Capano, acting in person

Paul Burstein, as
amicus

curiae

Andreea Baiasu, for the Attorney General

Janice E. Blackburn, for the Centre for Addiction and
    Mental Health

Heard: February 13, 2012

On appeal against the disposition of the Ontario Review
    Board dated, July 27, 2011.

ENDORSEMENT

[1]

Mr. Capano appeals the disposition of the Ontario Review Board dated
    July 27, 2011.  That disposition, made following an early review hearing
    requested by CAMH, imposed a detention order in the minimum secure unit of the
    hospital, but gave the hospitals officials discretion to permit Mr. Capano to
    continue living in the community.

Background

[2]

In May 2004, Mr. Capano was found not criminally responsible on account
    of a mental disorder.  Since January 2007, he has been living in the community
    in a supervised residence at 60 Borden Street, under the care and supervision
    of his Assertive Community Treatment team.  Following his annual review hearing
    in 2009, the Board granted Mr. Capano a conditional discharge.  This court
    dismissed his appeal from that disposition and affirmed the conditional discharge.

[3]

After his annual review in 2010, the Board again imposed a conditional
    discharge on identical terms to the 2009 disposition.  Although Mr. Capano has
    appealed his 2010 disposition, that appeal has been rendered moot by the 2011
    disposition.

[4]

While Mr. Capano is now subject to a detention order, he continues to
    reside in the community.

Mr. Capanos Position

[5]

Mr. Capano asks this court to set aside the detention order and grant
    him an absolute discharge.  What underlies his request is his desire to have complete
    freedom to care for his elderly and ailing parents.

[6]

While Mr. Capanos desire to take care of his parents is understandable,
    we cannot agree to his request for an absolute discharge.  The Board found that
    Mr. Capano remains a significant threat to the safety of the public.  That
    finding is well supported by the record.  For many years Mr. Capano has
    suffered from schizophrenia.  He frequently has delusions and auditory
    hallucinations, and his thinking is at times disorganized.  He has limited insight
    into his underlying psychiatric disorder or the need for ongoing anti-psychotic
    medication.

[7]

Because Mr. Capano is a significant threat to the safety of the public,
    under the provisions of the
Criminal Code
he is not entitled to an
    absolute discharge.

Amicus Curiae
s Position

[8]

The three-member Review Board was divided.  The majority imposed a
    detention order.  The minority  the psychiatrist on the panel  would have
    maintained a conditional discharge.

[9]

Amicus
submits that we should set aside the detention order and
    substitute the conditional discharge proposed by the dissent.
Amicus
essentially makes three submissions.  First, the majority erred by failing to
    properly consider whether a conditional discharge continued to be the least
    onerous and least restrictive disposition.  Second, the majority erred by
    finding that Mr. Capano had breached the terms of his conditional discharge.
    And third, this court should give less deference to the majority decision of
    the Board than it would otherwise do because the expert on the panel
    dissented.  We do not agree with any of these submissions.

(1)

A detention order was the least onerous and least restrictive
    disposition

[10]

The
    majority found that since the 2010 disposition, Mr. Capano had not complied
    with the terms of his conditional discharge.  The majority concluded that Mr.
    Capanos failure to do so was a significant change from the previous year.  In
    Dr. Simpsons words, Mr. Capano had gone downhill.

[11]

The
    majoritys finding and its conclusion are reasonably supported by the evidence
    at the hearing.  In particular:

·

Mr. Capano had started staying overnight at his parents home
        without the approval of the hospital; in the previous year he would be at their
        home only in the daytime.

·

Mr. Capano regularly failed to meet with his Assertive Community
        Treatment team, and generally made himself unavailable to the team; in the
        previous year he typically reported for assessment six days a week.

·

Mr. Capano now refuses to take his medication; in the previous
        year he would eventually agree to take his medication, albeit under threat of
        hospitalization.

[12]

Because
    of these significant changes, the majority of the Board reasonably concluded
    that Mr. Capanos risk could only be adequately managed under a detention
    order.  In reaching this conclusion, the majority considered the available
    mechanisms for returning Mr. Capano to the hospital under both a conditional
    discharge and a detention order.  The majority held that the mechanisms
    available to the hospital under a conditional discharge did not adequately
    protect the public.  Moreover, they noted that in the light of the limitations
    in re-admitting Mr. Capano to the hospital under the terms of a conditional
    discharge, a detention order would not only more likely ensure Mr. Capans
    compliance but as well would likely be less onerous.

[13]

The
    majoritys decision is thorough and well reasoned.  We see no basis to
    interfere with its finding that a detention order is the least onerous and
    least restrictive disposition.

(2)

Mr. Capano breached
    the terms of his conditional discharge

[14]

We
    accept
amicus
submission that some of the terms of the conditional
    discharge could have been more precisely spelled out.  Nonetheless, we are
    satisfied that Mr. Capano was fully aware of the substance of those conditions
    and in the period leading up to the 2011 disposition, breached several of them.

[15]

For
    example, although the conditional discharge order did not expressly say that
    Mr. Capano could stay overnight at his parents home only with the approval of
    the person in charge, Mr. Capano was aware that the permitted contact term in
    paragraph 1(f) of the conditional discharge order meant that he needed the
    hospitals permission to stay overnight at his parents residence.  Yet he
    continually stayed there without obtaining permission to do so.  We are
    therefore satisfied that Mr. Capano did breach the terms of his conditional
    discharge.

(3)

The majority decision should be upheld without regard to the standard of
    review.

[16]

In
    essence,
amicus
submits that the standard of review of reasonableness
    fluctuates according to the individual expertise or qualifications of the
    members of the Board whose decision is being appealed.  A tribunals expertise
    is an important consideration supporting a deferential standard of review of a tribunals
    decision.  The case law, however, has uniformly considered the expertise of the
    tribunal itself, rather than inquiring into the expertise or qualifications of
    individual members.  Nonetheless, in this case, we need not decide the merits
    of
amicus
 submission.

[17]

We
    agree with the decision of the majority, and would therefore uphold it if we
    accorded it limited deference or even no deference at all.

Conclusion

[18]

The
    appeal from the 2011 disposition is dismissed.

Doherty
    J.A.

John Laskin
    J.A.

M.F. Brown
    R.S.J. (Ad Hoc)


COURT OF APPEAL FOR ONTARIO

CITATION:
Carleton Condominium Corporation No.
    396 v. Burdet, 2012 ONCA 169

DATE: 20120319

DOCKET: M40977 (C54549) and M40992 (C54548)

Goudge, Sharpe and Blair JJ.A.

M40977

BETWEEN

Carleton Condominium Corporation No. 396

Plaintiff/Respondent

(Moving Party)

and

Claude-Alain Burdet, Claude-Alain Burdet in
    Trust, 1457563 Ontario Corporation, 1457563 Ontario Corporation in Trust, Janet
    Sue Burdet, Nelson Street Law Offices, LAcademie Christiane Sauve Inc., and
    International Beauty Depot

Defendants/Appellants

(Responding Parties)

M40992

AND BETWEEN

Patrick Dewan, Domicile Developments Inc.,
    1436984 Ontario Ltd., Amira Gabriel, 1496055 Ontario Inc., 117490 Canada Ltd.,
    and Sheila Eberts

Plaintiff/Respondents

(Responding Parties)

and

Claude-Alain Burdet, in Trust

Defendant/Appellant

(Moving Party)

APPLICATION UNDER section 135 of the
Condominium
    Act
, 1998,               Converted into an ACTION in consent, in November
    2001.

Janice B. Payne,
    for the moving party Carleton Condominium Corporation No. 396

Jonathan H.
    Fine, for the responding parties Claude-Alain Burdet, Claude-Alain Burdet in
    Trust, 1457563 Ontario Corporation, 1457563 Ontario Corporation in Trust,
    Nelson Street Law Offices and Janet Sue Burdet

Jeffrey
    Radnoff, for the moving parties Patrick Dewan, Domicile Developments Inc.,
    1436984 Ontario Ltd., Amira Gabriel, 1496055 Ontario Inc., 117490 Canada Ltd.,
    and Sheila Eberts

Charlene
    Kavanagh, for the court-appointed Administrator

Heard and released orally: March 13, 2012

On motions to quash the appeals from the judgment of
    Justice Paul Kane of the Superior Court of Justice, dated September 30, 2011.

ENDORSEMENT

The Dewan et al Motion

[1]

In our view, the moving parties are correct that this appeal is
    from an order dismissing claims for orders that would be interlocutory.  The
    order appealed from does not finally dispose of any defences that are sought to
    be raised at trial.  The moving parties acknowledge that the trial will begin
    with a clean slate.

[2]

The motion succeeds. This appeal is quashed.

The Carleton Condominium Corporation No. 396 Motion

[3]

We agree with the moving party that this appeal seeks to
    challenge parts of the order of December 12, 2011, that are interlocutory.

[4]

We refer here to paras. 1, 4, 5, 7 and 8.  None of these finally
    dispose of an issue properly to be disposed of at trial.  It is conceded that
    para. 6 removes a defence at trial.  That makes it a final order in our view,
    even though, despite this order, the defendants/appellants can properly advance
    the issue of their alleged overpayment as part of their own claim, and para. 7
    provides that if they succeed that will be credited against anything they are
    found to owe.

[5]

While it therefore appears to make little practical difference,
    the motion seeking to quash the appeal from para. 6 is dismissed.  Otherwise it
    is allowed.

[6]

The costs order to the moving parties in the Dewan motion will be
    $5,000 inclusive of disbursements and applicable taxes.  The costs order to the
    moving party in the Condominium motion will be $7,500 inclusive of
    disbursements and applicable taxes.  There will be no costs for the
    Administrator.

S.T.
    Goudge J.A.

Robert
    J. Sharpe J.A.

R.A.
    Blair J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:
Chandran v. National Bank
    of Canada, 2012 ONCA 205

DATE: 20120327

DOCKET: C53757

MacPherson, LaForme JJ.A., and Pattillo J. (
ad
    hoc
)

BETWEEN

Adrian Chandran

Plaintiff (Respondent)

and

National Bank of Canada

Defendant (Appellant)

Malcolm Mackillop and Hendrik Nieuwland, for the
    appellant

William Gale, for the respondent

Heard and released orally: March 23, 2012

On appeal from the judgment of Justice Pollak of the Superior
    Court of Justice, dated April 26, 2011.

ENDORSEMENT

[1]

The appellant National Bank of Canada (the bank) appeals the
    judgment of Pollak J. of the Superior Court of Justice dated April 26, 2011,
    awarding the respondent Adrian Chandran (Chandran) damages for constructive
    dismissal of $131,226.59 and costs of $85,894.64.

[2]

Chandran was employed by the Bank for 18 years.  He was promoted
    several times and by August 2007 he was a senior manager, which included the
    responsibility of supervising 11 employees.

[3]

In August 2007, the bank conducted a survey of the employees in
    Chandrans office.  Nine of the 11 employees complained about Chandran, saying
    that he made condescending remarks, embarrassed employees in front of others,
    and engaged in bullying behaviour.

[4]

After a meeting with Chandran to discuss the employee complaints,
    the bank sent him a disciplinary letter setting out the behaviour that provoked
    the complaints, informing him that he would be relieved of his supervisory
    duties, and providing him with two possible reassignment options (same salary
    and level, but without supervisory responsibilities).  The letter ended:

As mentioned in our discussion, we wish to reiterate that
    disrespectful treatment of employees and colleagues must cease immediately and
    you are not to take part in any actions that may be seen or perceived to be
    retribution by the employees who raised their concerns to us.  You must know
    that further behaviour of this type will result in termination of employment
    for cause.  Please note that no other warnings will be issued on this matter.

[5]

Chandran did not accept either offer.  He left the bank and after
    14 months found employment with another bank.

[6]

Chandran brought an action against the bank for wrongful
    dismissal.  The trial judge found that Chandran was constructively dismissed
    and that he was not required to mitigate his damages by accepting one of the
    positions offered by the bank.  She fixed the notice period at 14 months and
    awarded damages of $131,226.59.

[7]

Initially, the trial judge fixed costs at $65,833.35.  After
    taking into account offers to settle, she increased the costs award to
    $85,894.64.

[8]

The bank does not appeal the finding that it constructively
    dismissed Chandran.

[9]

The bank contends that the trial judge erred by concluding that
    Chandran was not required to mitigate his damages by accepting one of the
    positions offered by the bank.

[10]

We disagree.  The leading case dealing with an employees duty to
    accept a different position with his employer to mitigate his damages after
    being terminated from another position is
Evans v. Teamsters, Local 31
,
    2008 SCC 20.  In
Evans
, Bastarache J. stated that a finding by a trial
    judge that an employer did not meet its burden of proving that a dismissed
    employee should have accepted an offer of re-employment is a finding of mixed
    fact and law and is, therefore, subject to appellate intervention only if there
    is a palpable and overriding error in the trial judges finding.

[11]

The bank cannot clear this high hurdle in this appeal.  The trial
    judge considered the factors relevant to mitigation enumerated in
Evans
.
    She held that the factors that gave rise to the constructive dismissal (a
    finding, we note, that the bank does not appeal)  the imposition of serious
    discipline on Chandran and the serious findings of misconduct  led her to
    conclude that, viewed objectively as required by
Evans
, Chandran would
    have been subjected to, again as per
Evans
, an atmosphere of
    embarrassment or humiliation as well as a real fragility in his continuing
    employment with the bank.  Accordingly, it simply cannot be said that the trial
    judges ultimate conclusion that Chandran did not therefore have a positive
    duty to accept the offers amounts to a palpable and overriding error.

[12]

The bank also appeals the costs award on two bases.

[13]

First, the bank asserts that the trial judge ordered partial
    indemnity costs of $65,833.35 without allowing for submissions from the bank.

[14]

We do not accept this submission.  The bank received Chandrans
    costs submissions and chose not to say anything about either the hours worked
    or rates billed on behalf of Chandran at the trial.  Indeed, in its appeal
    factum the bank states: The Bank took no issue with the hours spent and hourly
    rates in Chandrans costs outline and therefore made no comment.

[15]

Second, the bank contends that the ultimate award of $85,894.64
    is not proportional and is outside the reasonable expectations of the bank.

[16]

We disagree.  Having not challenged the legal work that generated
    the initial costs award of $65,833.35, the bank is in no position to challenge
    the extra $20,000 that flows almost entirely from the trial judges
    consideration of offers to settle.

[17]

The appeal is dismissed.  The respondent is entitled to costs
    fixed at $22,600 inclusive of disbursements and HST.

J.C. MacPherson J.A.

H.S. LaForme J.A.

L.A.
    Pattillo J. (
ad hoc
)


COURT OF APPEAL FOR ONTARIO

CITATION:
The
    Courthouse Block Inc. v. Middlesex Condominium Corporation No.
    173, 2012 ONCA 157

DATE: 20120312

DOCKET: C54118

Feldman, MacPherson and Rouleau JJ.A.

BETWEEN

The Courthouse Block Inc.

Applicant (Appellant)

and

Middlesex Condominium Corporation No. 173

Respondent (Respondent in Appeal)

Brian T. Daly and Sean C. Flaherty, for the appellant

Jonathan Fine and Kristine Bailey, for the respondent

Heard and endorsed: March 9, 2012

On appeal from the judgment of Justice Helen Rady of the Superior
    Court of Justice, dated July 5, 2011.

APPEAL BOOK ENDORSEMENT

[1]

The appellant appeals the decision of Rady J. denying an order
    for an oppression remedy under s. 135 of the
Condominium Act, 1998,
S.O.
    1998, c.19. We see no basis on which to interfere with the decision of the
    motion judge. She considered the full record, the case law on the section and
    then applied the law to her view of the facts and exercised her discretion on
    whether the oppression remedy was applicable in the circumstances of this case.
    She made no reversible error in so doing.

[2]

The appeal is therefore dismissed. Costs to the respondent of $15,000
    inclusive of disbursements and H.S.T.


COURT OF APPEAL FOR ONTARIO

CITATION: Dean v. Kotsopoulos, 2012
      ONCA 143

DATE:
          20120307

DOCKET:
          C52563

Rosenberg and
          Feldman JJ.A. and Swinton J. (
ad hoc
)

BETWEEN

RONALD
          JAMES DEAN and 1083994 ONTARIO INC.

Appellants
          (Plaintiffs)

and

STEVE
          KOTSOPOULOS and TEDS RESTAURANT EAST YORK LIMITED

Respondents
          (Defendants)

Eric Freedman,
          for the appellants

Alfred S.
          Schorr, for the respondents

Heard: January
          20, 2012

On appeal from
          the judgment of Justice Romain W. Pitt of the Superior Court of Justice,
          dated July 30, 2010

Swinton J. (
ad
          hoc
):

[1]

The appellants
    Ronald James Dean and 1083994 Ontario Inc. (108) appeal from a judgment of
    Pitt J. in which he found that they had abandoned restaurant equipment and so
    dismissed their action for damages for conversion of the equipment with costs
    of $9,300.00. In my view, he erred in finding abandonment, and therefore, the
    appeal should be allowed.

Background
    Facts

[2]

The respondent
    Steve Kotsopoulos was the sole owner of the corporate defendant, Teds
    Restaurant East York Limited.  For many years, he had operated a restaurant in
    a building he owned on OConnor Drive in Toronto.

[3]

On January 25,
    2006, 108 signed a document called Offer to Lease and Offer to Purchase
    Equipment with Mr. Kotsopoulos and Teds Restaurant.   According to that
    document, Mr. Dean, the sole shareholder of 108, agreed to purchase the
    equipment set out in Schedule A for $40,000.00 paid to Teds Restaurant, while
    108 agreed to lease the premises for five years.  The lease was to commence
    February 1, 2006.

[4]

The equipment
    listed in Schedule A consisted of used restaurant equipment and included two
    stoves with burners, two grills, a charcoal broiler, two freezers, chairs and
    tables, among many other items.  The purchase price was paid in full by January
    26, 2006.   Although the parties contemplated the execution of a standard form
    offer to lease, none was ever provided to the appellants by the respondents.

[5]

Mr. Dean also
    purchased some new equipment, including televisions, satellite dishes, cash
    registers and draught lines for beer, which he valued at $16,730.75.  He
    testified that he opened a sports bar for business in April 2006, with the
    delay in opening caused by the need for maintenance work.

[6]

Rent was paid to
    the end of June 2006.  However, during the month of June, 2006, Mr.
    Kotsopoulos lawyer notified Mr. Dean that he was in breach of his obligation
    to provide insurance, and the lease would be terminated if the breach was not
    cured by June 30, 2006.  Mr. Dean asked Mr. Kotsopoulos to use the last months
    rent he had paid for July rent so that he could pay for insurance.  After Mr.
    Kotsopoulos refused, Mr. Dean began to move equipment and supplies out of the
    restaurant over the July 1 long weekend.   He had also contacted an auction
    company with the intention that he would sell the equipment at an auction, but
    the company had no truck available that weekend.

[7]

Mr. Dean testified
    that he made about four trips over the weekend.  Sometime on July 2, when he
    returned to the premises for more of equipment, he found the lock had been
    changed.  Mr. Kotsopoulos denied changing the lock. The trial judge made no
    finding as to whether the lock was changed.

[8]

Mr. Dean and Mr.
    Kotsopoulos had no contact in the following days.  Mr. Dean testified that he
    left a voicemail message for Mr. Kotsopoulos, which was denied.  Mr.
    Kotsopoulous testified that he made numerous attempts to contact Mr. Dean
    without success.

[9]

On July 6, 2006,
    Mr. Dean saw a for rent sign in the window of the premises.  He also saw an
    advertisement for the sale of the premises in the
Toronto Star
that day,
    which said restaurant and equipment for sale. Mr. Kotsopoulos admitted that
    he never told Mr. Dean that he was going to lease or sell the equipment.

[10]

On July 13, 2006,
    Mr. Notzl, a lawyer, wrote a letter on Mr. Deans behalf asking for the
    opportunity to remove the equipment.  Mr. Kotsopoulos testified that he never
    received the letter.  The trial judge accepted, albeit reluctantly, that the
    letter was sent.

[11]

On August 2, 2006,
    Mr. Kotsopoulos listed the property for sale.  The listing made reference to
    the equipment and furnishings.

[12]

On August 30,
    2006, Mr. Kotsopoulos entered into a new lease for the premises, along with the
    equipment listed in Schedule A of the new lease.  The equipment in Schedule A
    was almost identical to the equipment that had been purchased by Mr. Dean.

[13]

On November 10,
    2006, Mr. Notzl sent another letter to Mr. Kotsopoulos on behalf of Mr. Dean,
    again claiming access to the equipment.  Mr. Kotsopoulos lawyer responded on
    November 15, 2006, claiming that the appellants had left the premises vacant
    without contacting the landlord, and they had abandoned the equipment.   There
    was no reply to this letter from the appellants.

[14]

The landlord sold
    the property in 2007 or 2008.  Some of the equipment purchased by the
    appellants remained on the premises at the time of sale.  Mr. Dean, with
    the assistance of Law Help Ontario, issued a Statement of Claim in June 2008.

The
    Decision of the Trial Judge

[15]

The respondents
    defended the appellants claim for conversion or unjust enrichment on the basis
    that the appellants had abandoned the personal property.

[16]

The trial judge
    correctly stated that conversion is a strict liability tort.  It is no defence
    that the wrongful interference with the goods of another was done innocently (
Northstar
    Leasing Corp. v. Two Ten Spruce Corp
.
, [2007] O.J. No. 1068 (S.C.J.) at
    paras. 13-14).

[17]

Abandonment is a
    defence to an allegation of conversion.  The Ontario Court of Appeal adopted
    the following definition of abandonment in
Simpson v. Gowers
(1981), 121 D.L.R. (3d) 709 at para.
    6:

Abandonment has been succinctly defined in R.A. Brown, in The
    Law of Personal Property, 2nd ed. (1955), at p. 9:

·

Abandonment occurs when there is a giving up, a total desertion,
    and absolute relinquishment of private goods by the former owner. It may arise
    when the owner with the specific intent of desertion and relinquishment casts
    away or leaves behind his property ...

[18]

A party who
    alleges abandonment bears the onus to prove, on a balance of probabilities, that
    the owner intended to abandon the chattels in issue (
Simpson
at para.
    9).   Abandonment is a question of fact, turning on factors such as the passage
    of time, the nature of the property, the conduct of the owner and the nature of
    transaction (
Stewart v. Gustafson
, [1998] 4 W.W.R. 695 (Sask. Q.B.) at
    para. 17).

[19]

The trial judge
    considered each of these factors, starting with the passage of time.  He
    observed that the appellants had made minimal efforts to recover the goods
    before commencing litigation, consisting of the letters of July 13, 2006 and
    November 10, 2006.  They made no reply to the respondents letter alleging
    abandonment.

[20]

Second, the trial
    judge described the transaction as, in substance, one in which the chattels and
    equipment were part of a business from which Mr. Dean withdrew.  Third, he
    described the appellants avoidance of the landlord.  Finally, he stated that
    there was no evidence nor reason to believe that the chattels and equipment in
    a free standing situation had real market value.  Therefore, he concluded that
    the goods had been abandoned.

Analysis

[21]

The appellants argue that the trial
    judge erred in finding that Mr. Dean had abandoned the property, as he failed
    to consider evidence showing Mr. Deans ongoing intention to claim possession
    of the property.  As well, he improperly found the goods had no real market
    value in the absence of evidence.

[22]

On an appeal, an
    appellate court will not interfere with the trial judges findings of fact
    absent palpable and overriding error (
Housen v. Nikolaisen
, [2002] 2 S.C.R. 235 at para. 10).

[23]

Mr. Kotsopoulos
    offered to sell the restaurant premises, along with the equipment, as early as
    July 6, 2006.  By late August of 2006, he had entered into a new lease for the
    premises in which he leased much of the equipment which Mr. Dean had
    purchased.   The initial question for the trial judge, then, was to determine
    whether the appellants intended to abandon the equipment before that date - a
    period of about two months.  If not, the respondents are liable for damages for
    conversion.

[24]

The trial judge
    did not address the fact that Mr. Kotsopoulos had leased the equipment by late
    August 2006.  When discussing the passage of time, he focussed on the two
    letters sent on behalf of the appellants on July13 and November 10, 2006, the
    lack of response to the respondents letter in mid-November, and then the further
    delay in bringing the action.  In my view, he erred in failing to determine
    whether the appellants intended to abandon the property in the period up to the
    end of August 2006.

[25]

Moreover, the
    trial judge failed to consider other evidence that showed Mr. Deans ongoing
    intention to protect his property interest:

·

He had an
    auctioneer inspect the equipment with a view to having it moved and sold at an
    auction.

·

Although he moved
    some of the new equipment out of the premises over the July 1st weekend, according
    to Mr. Deans evidence, he could not continue moving the property because he
    was locked out.  The trial judge made no finding as to whether this occurred,
    but he did not reject Mr. Deans evidence.

·

Mr. Dean caused
    his lawyer to write the July 13 letter.

·

Mr. Dean testified
    that he became aware that someone else was operating a restaurant in the
    premises and using the equipment, so he subsequently contacted Mr. Notzl and
    had the November letter sent.

[26]

All of this
    evidence shows that Mr. Dean did assert an ongoing interest in the property.

[27]

Moreover, the
    trial judge assumed that the equipment and property were of little value, and
    this, too, was a factor on which he relied to find abandonment.  However, there
    was evidence going to the value of the property. Mr. Dean had paid $40,000.00
    for the used property only five months before and made inquiries about an
    auction.  As well, the lease to the new tenants included the listed property,
    which they used for a restaurant operation.  Even though the rent they paid was
    less than the rent Mr. Dean and 108 had negotiated, one can infer that there
    was some value to the equipment leased.

[28]

In other cases
    where abandonment has been found, the trial judge has taken note of the efforts
    of the defendant to contact the property owner before the property was disposed
    of and the owners lack of response (see, for example,
Nash v. Chan
(1989), 93 A.R. 228 (Q.B.) at para.
    37).  In the present case, Mr. Kotsopoulos gave no notice to the
    appellants.  Indeed, he began advertising the sale of the premises and
    equipment within a few days after Mr. Dean vacated the premises.

[29]

The trial judge
    also failed to consider whether it made commercial sense for the appellants to
    abandon the equipment, for which Mr. Deans had paid $40,000.00 only five months
    earlier.  The landlord could not have reasonably believed that the appellants
    had abandoned the equipment within a few days after the termination of their
    relationship.  Moreover, the equipment left included large items such as
    refrigerators and freezers which Mr. Dean had been unable to move without a
    truck.

[30]

When all the
    evidence is considered and with a focus on the relatively short period prior to
    the disposition of the property, the trial judge erred in finding abandonment
    prior to the lease of the premises in August 2006.  Therefore, given that the
    appellants did not abandon the equipment, the respondents are liable for
    damages for conversion because they leased and later sold the premises along
    with the equipment.

[31]

The difficult
    issue remaining is the quantum of damages.  The evidence on the value of the equipment
    is minimal.  The appellants submit that the amount should be $40,000.00 for the
    used equipment and some $16,000.00 for the new equipment, less depreciation of
    5%.

[32]

With respect to
    the new equipment, receipts were filed at trial totalling approximately $4,000.00.
    However, Mr. Dean testified that he removed some of this equipment, including
    the television sets and cash registers, so it is unclear what the value of the
    remaining new equipment was.

[33]

The used equipment
    purchased from Mr. Kotsopoulos that remained on the property consisted, in
    part, of larger items, such as stoves and refrigerators, that were not easily
    moved.  While this equipment would likely have had some
value at
    auction, one can reasonably infer that the recovery would be less than the
    purchase price.

[34]

In the
    circumstances, given the unsatisfactory evidence on valuation, I would award a
    nominal sum in damages, fixed at $10,000.00.

[35]

The appellants
    also argued that the trial judge erred in failing to order the repayment of the
    last months rent.  I would not give effect to this ground of appeal.  The
    landlord reasonably kept this payment after the appellants ceased to carry on
    their business in the premises.

Conclusion

[36]

Accordingly, I would allow the
    appeal, set aside the judgment of the trial judge and grant judgment in favour
    of the appellants in the amount of $10,000.00 plus costs of the trial and of
    the appeal in the agreed amount of $6,700.00, inclusive of disbursements and H.S.T.

Signed:
    K. Swinton J. (ad hoc)

I
    agree M. Rosenberg J.A.

I
    agree K. Feldman J.A.

RELEASED:  MR March 7, 2012


COURT OF APPEAL FOR ONTARIO

CITATION: Dundas v. Zurich
  Canada, 2012 ONCA 181

DATE:  20120322

DOCKET: C53291

Cronk and Blair JJ.A. and Strathy J. (
Ad Hoc
)

BETWEEN

Joyce Maebell Dundas,
    Christopher Howard Dundas, Pamela Joyce Cake, Roger Garnet Dundas, Karin Edith
    Thomas, Lisa Ella Marie Roach, Barbara Elizabeth Dundas, Irene Hickson, Robert
    Hickson, William Hickson, Geraldine Willan, Joan Gerard, May Hickson, Josephine
    Hines and Candace Hickson, a Minor, by her Litigation Guardian, William Hickson

Plaintiffs (Appellants)

and

Zurich
    Canada, Zurich Insurance Company and                                            Zurich
    Insurance Company of Canada

Defendants (Respondents)

Glenn A. Smith and Dena N. Varah, for the appellants

David F. Murray and Dylan Crosby, for the respondents

Heard: January 24, 2012

On appeal from the order of Justice T.L.J. Patterson of
    the Superior Court of Justice, dated January 20, 2011.

Strathy
    J. (
Ad Hoc
)
:

[1]

This appeal concerns the limitation period for a claim against an
    insurer for allegedly delaying settlement of the claims of third parties
    against its insured and failing to pay the policy limits into an
    interest-bearing account to accrue for the benefit of the third parties. The
    insured claimed that the resulting delay increased the damages for which it was
    liable and sued the insurer for the consequent exposure in excess of the policy
    limits. The insured assigned the cause of action against the insurer to two of the
    third parties, in exchange for an agreement that they would not pursue their
    judgment against the insured for the amount in excess of the policy limits. Those
    third parties thus stand in the shoes of the insured in this action against the
    insurer.

[2]

The appellants appeal from an order of Patterson J., dismissing their
    action on a summary judgment motion brought by the respondents (Zurich).
    Patterson J. found that the claim was brought outside the limitation period
    contained in the former Ontario Standard Automobile Policy (SPF No. 1) (SAP).

[3]

For the reasons that follow, it is my view that the appeal should be
    allowed and the action should be permitted to proceed.

The Facts

[4]

On November 1, 1988, four people died in an automobile accident,
    including the driver, Robert Reid, who was insured by Zurich under a standard
    automobile policy providing $1 million in coverage. The families of the three
    deceased passengers sued Reids estate.

[5]

On May 27, 1992, the passengers families offered to settle their claims
    for $1,657,032.00, an amount that was in excess of the policy limits, with
    issues of prejudgment interest and costs to be determined.

[6]

On April 6, 1993, the independent counsel for the Reid estate agreed to
    the proposed assessment of damages.

[7]

On October 12, 1993, counsel for the appellants and for Zurich (defending
    the claim on behalf of the Reid estate) met in chambers with Kennedy J. of the
    Superior Court of Justice. Minutes of settlement were agreed upon, with damages
    in the amount set out above. Prejudgment interest and costs had not yet been
    resolved. Zurichs lawyer advised counsel for the Reid estate that the minutes
    of settlement had been signed.

[8]

On December 3, 1993, Kennedy J. heard submissions on prejudgment
    interest and costs. Counsel for the appellants asserted that Zurich had
    breached its duty of good faith to the Reid estate by failing to promptly settle
    the third party claims and by failing to pay the insurance policy limits into
    an interest-bearing account, thereby exposing the estate to a judgment over the
    policy limits. Interest rates were significant at the time, with rates of 9%
    and 14% ultimately being awarded. Under the terms of the insurance policy, prejudgment
    interest in excess of the policy limits would fall on the insured.

[9]

On December 23, 1993, Zurich paid the insurance limits into an
    interest-bearing account.

[10]

On
    March 29, 1994, the insurance limits were paid out to the appellants and to the
    family of the third passenger in agreed proportions.

[11]

On
    November 25, 1994, Kennedy J. issued an endorsement dealing with interest and
    costs. He made critical comments about Zurichs failure to adjust the loss and
    to pay the policy limits into an interest-bearing account at an early date.

[12]

On
    December 21, 1994, the endorsement of Kennedy J. was sent to the lawyer for
    Zurich who immediately sent it to counsel for the Reid estate.

[13]

In
    the result, consent judgments dated August 21, 1995 were issued against the
    Reid estate for the total amount of $2,067,399.35, inclusive of damages and prejudgment
    interest. Costs were awarded to the appellants but were not fixed. They were
    ultimately resolved in 1998 for approximately $600,000.

[14]

This
    action was commenced by the Reid estate against Zurich by notice of action
    issued on August 19, 1996  that is, just less than one year after the date of
    the consent judgments. A statement of claim was delivered, alleging that Zurich
    had:

·

breached its duty of good faith,

·

exposed the estate to claims in excess of the policy limits,

·

failed to pay the policy limits on a timely basis, and

·

failed to pay the limits into an interest-bearing account.

[15]

On
    January 9, 1997, this action was assigned to the families of two of the three
    passengers, in exchange for an agreement that those parties would not sue the
    Reid estate for the balance owing under the judgment.

Statutory Provisions

[16]

The
    one-year limitation period applicable to a claim against an automobile insurer
    at the material time was contained in the statutory conditions in the SAP.
    These conditions were included in every insurance policy issued in Ontario, as
    required by s. 207 of the
Insurance Act
, R.S.O. 1980, c. 218:

Time and Manner of Payment of Insurance Money

6(1) The insurer shall
    pay the insurance money for which it is liable under this contract within sixty
    days after the proof of loss has been received by it, or where an appraisal is
    made under subcondition 4(8), within fifteen days after the award is rendered
    by the appraisers.

When Action May be Brought

6(2) The insured
    shall not bring an action to recover the amount of a claim under this contract
    unless the requirements of statutory conditions 3 and 4 are complied with or
    until the amount of the loss has been ascertained as therein provided or by a
    judgment against the insured after trial of the issue or by agreement between
    the parties with the written consent of the insurer.

Limitation of Actions

6(3) Every action or
    proceeding against the insurer under this contract in respect of loss or damage
    to the automobile shall be commenced within one year next after the happening
    of loss and not afterwards, and in respect of the loss or damage to person or
    property shall be commenced within one year next after the cause of the action
    arose and not afterwards.

[17]

Statutory
    conditions 3 and 4, referred to in condition 6(2), pertain, respectively, to
    the obligations on the insured in the case of third party claims for loss or
    damage to persons or property and claims for loss or damage to the insured
    automobile. Both require the insured to give prompt written notice to the
    insurer and to verify the claim by statutory declaration in the case of damage
    to the insured automobile.

The Motion Judges Decision

[18]

On
    its motion for summary judgment, Zurich contended that the limitation period began
    on the date on which the material facts grounding the claim ought to have been
    discovered through the exercise of reasonable diligence. It asserted that this
    occurred, at the latest, on December 21, 1994, when counsel for the Reid estate
    received the endorsement of Kennedy J. containing critical comments about
    Zurichs handling of the claim.

[19]

The
    appellants argued that the limitation period did not begin to run until August
    21, 1995, when the consent judgments were taken out and the amount of the Reid
    estates exposure was ascertained.  As the action was commenced on August 19,
    1996, the appellants claimed that it had been initiated within time.

[20]

The
    motion judge began his analysis by noting that statutory condition 6(3)
    provides that the period to sue for loss or damage to an automobile is one
    year next after the happening of the loss and not afterwards. He then
    referred to
McNaughton Automotive Ltd. v. Co-Operators General Insurance Co.
(2003), 66 O.R. (3d) 112 (S.C.), revd on other grounds (2005), 76 O.R.
    (3d) 161 (C.A.), a group of proposed class actions involving automobile
    property insurance, in which Haines J. held that the limitation period might be
    extended based on discoverability issues and the doctrine of fraudulent
    concealment.

[21]

The
    motion judge found that the Reid estate had known for some time that it had
    exposure beyond the policy limits and, having received the endorsement of
    Kennedy J. on December 21, 1994, it was informed of a possible claim against
    Zurich. He concluded, at paras. 16-19:

I am of
    the opinion the exact amount of the claim is not required and the one year
    period starts to run from December 21, 1994, at which time the possible claim
    against Zurich was not only discoverable, it was known.

In my
    opinion, the limitation period started on December 21, 1994.

Section
    6.3 of the statutory conditions in the Standard Automobile Policy requires that
    the action must be commenced within one year next after the happening of the
    loss and not afterwards.

Therefore
    the claim issued by the Reid estate claim August 19, 1996, against Zurich is
    out of time.

[22]

The
    motion judge therefore dismissed the action.

[23]

Two
    aspects of the reasons of the motion judge are noteworthy. First, he focussed
    on the date of the happening of the loss, which triggers the limitation
    period applicable to claims relating to the insured vehicle. The action in this
    case is in respect of loss or damage to third parties or their property, which must
    be commenced within one year after the cause of the action arose. Second, the
    motion judge applied a discoverability analysis to the determination of when
    the limitation period began to run.

[24]

I
    turn to the positions of the parties on this appeal.

Positions of the Parties

[25]

The
    appellants submit that the limitation period only began to run when the consent
    judgments against the Reid estate were issued on August 21, 1995. They submit
    that the motion judge erred in applying the one-year limitation period in
    statutory condition 6(3) of the SAP without considering statutory condition
    6(2).

[26]

The
    appellants further submit that condition 6(2) defines when an action can be
    brought by an insured and when the limitation period begins to run. They say
    that condition 6(2) provides a series of pre-conditions to the commencement of an
    action, all of which relate to ascertaining the amount of loss. The provision aims
    at delaying the action until the amount of loss is definitively ascertained.
    The use of or in condition 6(2) is disjunctive, meaning each condition stands
    alone. The party to whom the provision applies must elect which condition is
    appropriate in its case.

[27]

The
    appellants cite one case in support of their interpretation of the interplay
    between conditions 6(2) and 6(3):
Jeffery v. Guarantee Co. of North America
(1985),
    50 O.R. (2d) 494 (H.C.J.).  I will discuss this decision below.

[28]

Zurich
    submits that condition 6(2) has no bearing on the commencement of the
    limitation period in condition 6(3), which, subject to the discoverability
    rule, starts to run from the time when the cause of action arose. It says that
    the case law establishes that the one-year limitation period under condition
    6(3) (or its equivalent in other provinces) runs regardless of compliance with
    the statutory preconditions in condition 6(2):
Terroco Industries Ltd. v.
    Sovereign General Insurance Co.
, 2007 ABCA 149, 404 A.R. 252;
Raymond v.
    Canadian Surety Co.
, [1995] A.J. No. 1561 (Q.B);
Burnett v. Palatine
    Insurance Co.
(1965), 54 D.L.R. (2d) 378 (N.B.S.C. App. Div.).

[29]

Zurichs
    position is that if a statutory precondition cannot be complied with prior to
    the expiry of the limitation period, the correct procedure is to commence an
    action within the limitation period and argue about the preconditions later.

[30]

Furthermore,
    Zurich says that if, as the appellants argue, the limitation period does not
    begin to run until the amount of loss has been ascertained, then the limitation
    period will never begin to run upon the happening of the loss.  This, it says,
    would render condition 6(3) meaningless.

[31]

Zurichs
    alternative submission is that the action is statute-barred because it was not
    brought within two years of Mr. Reids death, relying on ss. 38(1) and (3) of
    the
Trustee Act
,

R.S.O. 1990, c. T.23,

which stipulate
    that all actions brought by an estate must be brought within two years of the
    death of the deceased. This limitation period relates to all actions of a
    personal nature, whether in tort or in contract:
Roth v. Weston Estate
(1997),
    36 O.R. (3d) 513 (C.A.), at pp. 514-515.

Analysis

[32]

The
    appeal was argued primarily on the basis of the trial judges interpretation of
    the statutory conditions. While I agree with the appellants that the trial
    judges interpretation was incorrect, it is my view that the appeal should also
    be allowed because the claim in this action does not engage the statutory
    conditions at all. It is not a claim under the insurance contract. Rather, it
    is a claim for breach of the insurers independent duty of good faith and fair
    dealing and is subject to the general six-year limitation period that applied at
    the time.

Interpretation of the
    Statutory Conditions

[33]

I
    will begin by explaining my view that the motion judge erred:

·

in failing to consider the provisions of conditions 6(2) and
    6(3), requiring that claims for loss or damage to
persons or property
be
    commenced within one year after the cause of action arose; and

·

in importing a discoverability analysis into the issue.

[34]

Statutory
    condition 6(2) sets out conditions precedent to bringing an action against the
    insurer, specifically, compliance with statutory conditions 3 and 4 or until
    the amount of the loss has been ascertained by judgment against the insured
    after trial or by agreement between the insured and the third party with the written
    consent of the insurer.

[35]

In
    the case of third party claims (for loss or damage to person or property),
    condition 6(3) requires that the claim be commenced within one year after the
    cause of action arose:

Every
    action or proceeding against the Insurer under this contract   in respect of
    the loss or damage to person or property shall be commenced
within one year
    next after the cause of the action arose and not afterwards
. [Emphasis
    added.]

[36]

It
    is noteworthy that this limitation period is different from the limitation
    period in condition 6(3) applicable to a claim for damage to the insured
    automobile, which begins to run on the happening of loss and expires one year
    later.

[37]

The
    question then is: When did the cause of action of the Reid estate arise
    against Zurich?

[38]

In
    my view, the cause of action did not arise until Zurich had a liability to indemnify
    the Reid estate under the policy of insurance. This only occurred when the
    liability of the Reid estate had been finally ascertained by judgment after
    trial or by settlement between the parties with the consent of the insurer,
    using the language of condition 6(2). On the facts, this did not occur until
    the issues of interest and costs had been resolved by the consent judgments
    that were taken out on August 21, 1995. It was at this time that the Reid estate
    had a liability to pay the third parties and it was at this time that it was
    entitled to demand indemnity from Zurich.

[39]

Interpreting
    the statutory conditions in this fashion results in consistency between
    conditions 6(2) and 6(3). It also promotes certainty, by fixing a date that is
    readily ascertainable, as opposed to being dependent on subjective questions of
    discoverability.

[40]

The
    courts have held that a limitation period, which by definition circumscribes
    the rights of action of the citizen, should be strictly interpreted and
    ambiguities should be resolved in favour of the person whose rights are being truncated:
Berardinelli v. Ontario Housing Corp
., [1979] 1 S.C.R. 275, at p. 280.
    To the extent the statutory conditions are capable of more than one reasonable
    interpretation, it is appropriate to adopt the least restrictive one.

[41]

This
    interpretation is, moreover, consistent with the only Ontario authority
    directly on point:
Jeffrey v. Guarantee Co. of North America
, referred
    to above. The accident in that case occurred on April 22, 1975. The insured was
    served with a statement of claim, claiming property damages and damages for personal
    injury, on June 7, 1976. The insurer denied coverage under the policy and
    refused to defend the claim. In January 1984, eight years after the initial
    denial of coverage, the insured commenced an action for a declaration that he
    was covered under the insurance policy. Trainor J. held that the cause of
    action arose at the time of judgment against the insured, although the insured
    was entitled to bring an action at an earlier date, after he had complied with
    statutory conditions 3 and 4. He stated at p. 495:

Counsel
    for Jeffrey submitted that Jeffrey's cause of action will arise when the amount
    of Wilson's claim is ascertained by a judgment within the meaning of stat. con.
    6(2). Therefore, the limitation period has not even begun to run. In my opinion
    this is the correct reading of stat. con. 6(2):

6(2)
    The insured shall not bring an action to recover the amount of a claim under
    this contract ... until the amount of the loss has been ascertained ... by a
    judgment against the insured after trial ...

Under
    stat. con. 6(3) it is when judgment is awarded against the insured that the
    cause of action arises and time begins to run.

Counsel
    for the insurer suggested, that if my reading is correct, this action is
    premature. I disagree. Statutory condition 6(2) provides two alternate times
    when the insured's cause of action arises. The other time is when the
    "requirements of statutory conditions 3 and 4 are complied with". The
    use of the word "or" in stat. con. 6(2) means that either of the
    dates can be relied on. Upon complying with stat. con. 3, Jeffrey had a cause
    of action entitling him to commence this action against the insurer for a
    declaration that Jeffrey is covered by the insurance policy. Such a declaration
    will have a substantial practical result. Section 212(b) (now s. 214(b)) would
    require the insurer to defend the Wilson action on behalf of Jeffrey.
The
    limitation period, however, does not begin to run until the last cause of
    action, judgment, arises.
[Emphasis added.]

[42]

As
    I have said, Zurich submits that Canadian cases have consistently held that the
    one-year limitation period under the equivalent of statutory condition 6(3)
    will run regardless whether the statutory preconditions to bringing an action,
    set out in condition 6(2), have been complied with. It refers to
Raymond v.
    Canadian Surety Co.
and
Burnett v. Palatine Insurance Co.,
above. It
    also relies on an observation to this effect in Craig Brown & Thomas
    Donnelly,
Insurance Law in Canada,
looseleaf (Scarborough: Carswell,
    1999) vol. 1 at 10-22:

Faced with this dilemma [non-compliance with statutory
    conditions 3 and 4] the customer should commence the action before the
    expiration of the limitation period notwithstanding that the appraisal
    proceedings have not been completed. It is this formal step which avoids the
    consequences of the limitation section. The worst that will happen in terms of
    the action will be that it will be stayed on the application of the insurer.
    [Citations omitted.]

[43]

The
    authorities referred to by Zurich are, in my view, distinguishable as they were
    dealing with first party claims  that is, claims for damage to the insured
    automobile  as opposed to third party claims. The citation from Professor
    Browns work likewise deals with claims for damage to the insured automobile.
    Moreover, one of the authorities referred to by Zurich,
Terroco Industries
    Ltd. v. Sovereign General Insurance Co
., to which I shall refer in a
    moment, actually supports a different conclusion  a claim against the insurer
    that is not founded on a claim under the policy is not subject to the
    limitation period at all.

[44]

In
    my opinion, therefore, the motion judge erred in failing to consider that the
    claim in question was in respect of the loss or damage to person or property
    and in failing to consider when the cause of action against Zurich arose
    under condition 6(3), in the context of condition 6(2). Had he done so, he
    would have concluded that the cause of action arose only once the insureds
    loss had been ascertained by a judgment against the insured after trial of the
    issue or by agreement between the parties with the written consent of the
    Insurer, within the meaning of condition 6(2).

[45]

I
    turn to the second reason why the appeal should be allowed.

The Action is not a Proceeding under the Contract

[46]

In
    my view, this action is not an action or proceeding against the Insurer under
    [the insurance contract]  in respect of the loss or damage to person or
    property within the meaning of statutory condition 6(3). As a result, the
    limitation period in condition 6(3) does not apply and the action is subject to
    the general six-year limitation period then contained in the
Limitations Act
,
    R.S.O. 1980, c. 240.

[47]

In
    their statement of claim, the appellants claim, among other things, a
    declaration that Zurich breached its duty of good faith to the Reid estate by:

·

failing to advise its insured, on a timely basis, that the claim
    would exceed the policy limits;

·

failing to pay its limits on a timely basis, thereby enjoying the
    benefit of interest on its limits;

·

failing to take reasonable steps to negotiate a settlement within
    the limits; and

·

failing to place the limits in an interest-bearing account on a
    timely basis.

[48]

Counsel
    for Zurich submitted that the words [
E]very
    action or proceeding against the Insurer
in respect of
the loss or
    damage to person or property shall be commenced within one year next after the
    cause of the action arose  (emphasis added) in statutory condition 6(3) are
    very broad. He refers to
Arsenault v. Dumfries Mutual Insurance Co.
(2002),
    57 O.R. (3d) 625 (C.A.), at para. 16 and
Nowegijick v. The Queen et al.
,
    [1983] 1 S.C.R. 29, at p. 39, in support of the proposition that:

The phrase "in respect
    of" is probably the widest of any expression intended to convey some
    connection between two related subject matters.

[49]

While
    that is no doubt true, it is my view that this is not an action to recover a
    claim under [this] contract within the meaning of statutory condition 6(2).
    Nor is it an action or proceeding under this contract  in respect of the loss
    or damage to person or property within condition 6(3). It is not a claim for
    indemnity under the contract at all.

[50]

On
    the contrary, this action contains a claim for breach of the independent duty
    of the utmost good faith, which an insurer owes to its insured. In
Whiten v.
    Pilot Insurance Co.
, [2002] 1 S.C.R. 595, at para. 79, Binnie J. described the
    duty as independent of and in addition to the breach of contractual duty to
    pay the loss. Similarly, in
Ferme G
érald Laplane & Fils Lt
ée.
    v. Grenville Patron Mutual Fire Insurance Co.
(2002),

61 O.R. (3d)
    481 (C.A.), at para. 78, leave to appeal refused, [2002] C.S.C.R. No. 488,
    Charron J.A. observed:

A breach of the duty to act fairly
    and in good faith gives rise to a separate cause of action that is distinct
    from the cause of action founded on the express terms of the policy and that is
    not restricted by the limits in the policy. Hence it may result in an award of
    consequential damages distinct from the proceeds payable under the policy.

[51]

In
702535 Ontario Inc. v. Non-Marine Underwriters, Lloyds of London
(2000),

184 D.L.R. (4th) 687 (Ont. C.A.), at para. 31, leave to appeal refused,
    [2000] S.C.C.A. No. 258, OConnor J.A. stated that a breach of the duty to act
    in good faith gives rise to a separate cause of action from an action for the
    failure of an insurer to compensate for loss covered by the policy. He noted,
    at paras. 28-31, that the duty of good faith requires the insurer to deal
    promptly and fairly with a claim under the policy, including paying the claim
    in a timely manner where there is no reasonable basis to contest coverage or
    withhold payment. Although OConnor J.A. was speaking of a first party claim,
    his observations are equally applicable to a claim under a liability policy
    where the insurers delay in the resolution of the claim or in paying the
    policy limits into court may result in the accumulation of prejudgment interest
    in excess of the policy limits to the detriment of the insured.

[52]

The
    alleged breach of duty in this case was not a claim for indemnity under the
    insurance contract and was not a claim to which statutory conditions 6(2) and
    6(3) applied. It was not, therefore, subject to the one-year limitation period
    contained in those conditions and was, instead, subject to the six-year
    limitation period in the general
Limitations Act
of the time.

[53]

This
    result is consistent with
Terroco Industries Ltd. v. Sovereign General
    Insurance Co
, one of the cases referred to by Zurich. In that case, which
    was governed by Alberta legislation, the insured claimed under an insurance
    policy for damages to a truck as a result of a fire. Each party had appointed
    an appraiser, but the appraisers could not agree. It was decided that an umpire
    would be appointed to fix the amount of the loss, with the result binding on
    both parties. There was a delay on the part of the insured in getting their
    appraisal documents to the umpire and the one-year limitation period passed
    without the claim having been resolved. The insurer took the position that the
    claim was time-barred. The Alberta Court of Appeal held that the one-year
    limitation period in the statute was not interrupted by the appointment of the
    appraiser and endorsed the approach suggested by Professor Brown, above.
    However, it held that on the facts there had been an admission of liability and
    an agreement to make payment of the claim once the amount had been determined
    by the appraisal process. The claim was for enforcement of that agreement  the
    Court stated, at para. 36:

In these circumstances, the limitation
    period in the statutory condition is not engaged and is inapplicable. The
    limitation period is directed against actions against the insurer
under this
    contract
, i.e., the insurance policy. Here the action is not brought to
    enforce the policy but rather to enforce the agreement to value the loss as a
    prelude to its payment. Any defences under the policy are not available to the
    Insurer. [Emphasis in original.]

[54]

The
    same is true in this case. I conclude that the appellants claim falls outside
    the statutory conditions and is subject to the general limitation period.

The Trustee Act

[55]

I
    turn to Zurichs alternative submission under the
Trustee Act.

[56]

Zurich
    submits that the appellants claim is barred by s. 38(3) of the
Trustee Act
.
    The relevant provisions are:

38.
(1) Except in
    cases of libel and slander, the executor or administrator of any deceased
    person may maintain an action for all torts or injuries to the person or to the
    property of the deceased in the same manner and with the same rights and remedies
    as the deceased would, if living, have been entitled to do, and the damages
    when recovered shall form part of the personal estate of the deceased; but, if
    death results from such injuries, no damages shall be allowed for the death or
    for the loss of the expectation of life, but this proviso is not in derogation
    of any rights conferred by Part V of the
Family Law Act
.

(2) Except in cases of
    libel and slander, if a deceased person committed or is by law liable for a
    wrong to another in respect of his or her person or to another persons
    property, the person wronged may maintain an action against the executor or
    administrator of the person who committed or is by law liable for the wrong.

(3) An action under this
    section shall not be brought after the expiration of two years from the death
    of the deceased.

[57]

The
Trustee Act
limitation period is concerned with the survival of claims
    for wrongs done to the deceased in his or her lifetime. At common law, personal
    causes of action for negligence died with the person. This harsh consequence was
    mitigated by statute, ultimately by the
Trustee Act
in this
    jurisdiction. The history and purpose of the legislation were described by
    Abella J.A., as she then was, in
Waschkowski v. Hopkinson Estate
(2000), 47 O.R. (3d) 370 (C.A.), at paras. 2
  and 9:

At common law, no action in
    negligence could be brought on behalf of or against someone who had died. This
    prohibition was lifted in most jurisdictions by statute. In Ontario, the
    legislative entitlement to maintain an action in tort by or against the estate
    of a deceased person is found in s. 38 of the Trustee Act, R.S.O. 1990, c. T.23

The underlying policy
    considerations of this clear time limit are not difficult to understand. The
    draconian legal impact of the common law was that death terminated any possible
    redress for negligent conduct. On the other hand, there was a benefit to
    disposing of estate matters with finality. The legislative compromise in s. 38
    of the Trustee Act was to open a two-year window, making access to a remedy
    available for a limited time without creating indefinite fiscal vulnerability
    for an estate.

[58]

As
    this court explained in
Lafrance Estate v. Canada (Attorney General)
(2003),
    64 O.R. (3d) 1, [2003] O.J. No. 1046, at paras. 54-55, one must ask whether the
    claim is for injury of a personal nature in order to  determine whether the
Trustee
    Act
applies:

In determining whether the estate
    claims fall within the scope of s. 38(1) of the
Trustee Act
, the focus
    is not upon the form of the action but, rather, the nature of the injury. The
    question to be asked in determining its applicability is whether the alleged
    wrong constituted an injury to the deceased person. See
Smallman v. Moore
,
[1948]
    S.C.R. 295
, and
Roth v. Weston Estate
(1997), 36 O.R. (3d)
    513 (C.A.).

Whether the claim for forced
    labour is framed in tort, contract, quasi-contract or breach of fiduciary duty,
    the claim is for injury of a personal nature. The core of the alleged
    wrongdoing is the failure of those running the residential schools to compensate
    the deceased persons for the work they were forced to perform. In other words,
    the claims arise out of the treatment that the deceased plaintiffs endured at
    the residential schools. As such, the claims for forced labour are within the
    meaning of "injuries to the person". Accordingly, they fall squarely
    within the provisions of s. 38(1) of the
Trustee Act
and are subject to
    the applicable two-year limitation period in s. 38(3).

[59]

Here,
    the policy of insurance issued by Zurich to Mr. Reid passed to his estate on
    his death. The injury in question was not an injury to Mr. Reid, but an injury to
    his estate. The
Trustee Act
has no application: see
English Estate v.
    Tregal Holdings Ltd.,
[2004] O.J. No. 2853 (S.C.J.), at paras. 19, 21-24;
Lafrance
    Estate.

[60]

I
    therefore agree with the submission of the appellants that the claim against
    Zurich does not arise from an injury to the late Mr. Reid during his lifetime
    and that the limitation period set out under the
Trustee Act
is
    inapplicable.

Conclusion

[61]

Accordingly,
    for the reasons given, I would allow the appeal, with costs of the appeal to
    the appellants in the agreed amount of $20,000, inclusive of disbursements and all
    applicable taxes.

Signed:        G. R. Strathy J. (ad hoc)

I agree E. A. Cronk J.A.

I agree R. A. Blair J.A.

Released:EAC MARCH 22, 2012


COURT OF APPEAL FOR ONTARIO

CITATION:
Fontaine v. Canada
    (Attorney General), 2012 ONCA 206

DATE: 20120327

DOCKET: M41060  M41077 C54782

Watt J.A.

BETWEEN

LARRY PHILIP FONTAINE in his
    personal capacity and in his capacity as the Executor of the estate of Agnes
    Mary Fontaine, deceased, MICHELLINE AMMAQ, PERCY ARCHIE, CHARLES BAXTER SR.,
    ELIJAH BAXTER, EVELYN BAXTER, DONALD BELCOURT, NORA BERNARD, JOHN BOSUM, JANET
    BREWSTER, RHONDA BUFFALO, ERNESTINE CAIBAIOSAI-GIDMARK, MICHAEL CARPAN, BRENDA
    CYR, DEANNA CYR, MALCOLM DAWSON, ANN DENE, BENNY DOCTOR, LUCY DOCTOR, JAMES
    FONTAINE in his personal capacity and in his capacity as the Executor of the
    Estate of Agnes Mary Fontaine, deceased, VINCENT BRADLEY FONTAINE, DANA EVA
    MARIE FRANCEY, PEGGY GOOD, FRED KELLY, ROSEMARIE KUPTANA, ELIZABETH KUSIAK,
    THERESA LAROCQUE, JANE McCULLUM, CORNELIUS McCOMBER, VERONICA MARTEN, STANLEY
    THOMAS NEPETAYPO, FLORA NORTHWEST, NORMAN PAUCHEY, CAMBLE QUATELL, ALVIN BARNEY
    SAULTEAUX, CHRISTINE SEMPLE, DENNIS SMOKEYDAY, KENNETH SPARVIER, EDWARD
    TAPIATIC, HELEN WINDERMAN and ADRIAN YELLOWKNEE

Plaintiffs (Respondents)

and

THE ATTORNEY GENERAL OF CANADA,
    THE PRESBYTERIAN CHURCH IN CANADA, THE GENERAL SYNOD OF THE ANGLICAN CHURCH OF
    CANADA, THE UNITED CHURCH OF CANADA, THE BOARD OF HOME MISSIONS OF THE UNITED
    CHURCH OF CANADA, THE WOMENS MISSIONARY SOCIETY OF THE PRESBYTERIAN CHURCH,
    THE BAPTIST CHURCH IN CANADA, BOARD OF HOME MISSIONS AND SOCIAL SERVICES OF THE
    PRESBYTERIAN CHURCH IN BAY, THE CANADA IMPACT NORTH MINISTRIES OF THE COMPANY
    FOR THE PROPAGATION OF THE GOSPEL IN NEW ENGLAND (also known as THE NEW ENGLAND
    COMPANY), THE DIOCESE OF SASKATCHEWAN, THE DIOCESE OF THE SYNOD OF CARIBOO, THE
    FOREIGN MISSION OF THE PRESBYTERIAN CHURCH IN CANADA, THE INCORPORATED SYNOD OF
    THE DIOCESE OF HURON, THE METHODISTCHURCH OF CANADA, THE MISSIONARY SOCIETY OF
    THE ANGLICAN CHURCH OF CANADA, THE MISSIONARY SOCIETY OF THE METHODIST CHURCH
    OF CANADA (ALSO KNOWN AS THE METHODIST MISSIONARY SOCIETY OF CANADA), THE
    INCORPORATED SYNOD OF THE DIOCESE OF ALGOMA, THE SYNOD OF THE ANGLICAN CHURCH
    OF THE DIOCESE OF QUEBEC, THE SYNOD OF THE DIOCESE OF ATHBASCA, THE SYNOD OF
    THE DIOCESE OF BRANDON, THE ANGLICAN SYNOD OF THE DIOCESE OF BRITISH COLUMBIA,
    THE SYNOD OF THE DIOCESE OF CALGARY, THE SYNOD OF THE DIOCESE OF KEEWATIN, THE
    SYNOD OF THE DIOCESE OF QUAPPELLE, THE SYNOD OF THE DIOCESE OF NEW
    WESTMINISTER,  THE 2 SYNOD OF THE DIOCESE OF YUKON, THE TRUSTEE BOARD OF THE
    PRESBYTERIAN CHURCH IN CANADA, THE BOARD OF HOME MISSIONS AND SOCIAL SERVICE OF
    THE PRESBYTERIAN CHURCH OF CANADA, THE WOMENS MISSIONARY SOCIETY OF THE UNITED
    CHURCH OF CANADA, SISTERS OF CHARITY, A BODY CORPORATE ALSO KNOWN AS SISTERS OF
    CHARITY OF ST. VINCENT DE PAUL, HALIFAX, ALSO KNOWN AS SISTERS OF CHARITY
    HALIFAX, ROMAN CATHOLIC EPISCOPAL CORPORATION OF HALIFAX, LES SOEURS DE NOTRE
    DAME-AUXILIATRICE, LES SOEURS DE ST.
FRANCOIS DASSISE,
    INSITUT DES SOEURS DU BON CONSEIL, LES SOEURS DE SAINT-JOSEPH DE
    SAINT-HYANCITHE, LES SOEURS DE JESUSMARIE, LES SOEURS DE LASSOMPTION DE LA
    SAINTE VIERGE, LES SOEURS DE LASSOMPTION DE LA SAINT VIERGE DE LALBERTA, LES
    SOEURS DE LA CHARITE DE ST.-HYACINTHE, LES OEUVRES OBLATES DE LONTARIO, LES
    RESIDENCES OBLATES DU QUEBEC, LA CORPORATION EPISCOPALE CATHOLIQUE ROMAINE DE
    LA BAIE JAMES (THE ROMAN CATHOLIC EPISCOPAL CORPORATION OF JAMES BAY), THE
    CATHOLIC DIOCESE OF MOOSONEE, SOEURS GRISES DE MONTRÉAL/GREY NUNS OF MONTREAL,
    SISTERS OF CHARITY (GREY NUNS) OF ALBERTA, LES SOEURS DE LA CHARITÉ DES T.N.O.,
    HOTEL-DIEU DE NICOLET, THE GREY NUNS OF MANITOBA INC.-LES SOEURS GRISES DU
    MANITOBA INC., LA CORPORATION EPISCOPALE CATHOLIQUE ROMAINE DE LA BAIE DHUDSON
     THE ROMAN CATHOLIC EPISCOPAL CORPORATION OF HUDSONS BAY, MISSIONARY OBLATES
     GRANDIN PROVINCE, LES OBLATS DE MARIE IMMACULEE DU MANITOBA, THE
    ARCHIEPISCOPAL CORPORATION OF REGINA, THE SISTERS OF THE PRESENTATION, THE
    SISTERS OF ST.
JOSEPH OF SAULT ST. MARIE, SISTERS OF
    CHARITY OF OTTAWA, OBLATES OF MARY IMMACULATE ST. PETERS PROVINCE, THE
    SISTERS OF SAINT ANN, SISTERS OF INSTRUCTION OF THE CHILD JESUS, THE BENEDICTINE
    SISTERS OF MT. ANGEL OREGON, LES PERES MONTFORTAINS, THE ROMAN CATHOLIC BISHOP
    OF KAMLOOPS CORPORATION SOLE, THE BISHOP OF VICTORIA, CORPORATION SOLE, THE
    ROMAN CATHOLIC BISHOP OF NELSON, CORPORATION SOLE, ORDER OF THE OBLATES OF MARY
    IMMACULATE IN THE PROVINCE OF BRITISH COLUMBIA, THE SISTERS OF CHARITY OF
    PROVIDENCE OF WESTERN CANADA, LA CORPORATION EPISCOPALE CATHOLIQUE ROMAINE DE
    GROUARD, ROMAN CATHOLIC EPISCOPAL CORPORATION OF KEEWATIN, LA CORPORATION
    ARCHIÉPISCOPALE CATHOLIQUE ROMAINE DE ST. BONIFACE, LES MISSIONNAIRES OBLATES
    SISTERS DE ST. BONIFACE-THE MISSIONARY OBLATES SISTERS OF ST. BONIFACE, ROMAN
    CATHOLIC ARCHIEPISCOPAL CORPORATION OF WINNIPEG, LA CORPORATION EPISCOPALE
    CATHOLIQUE ROMAINE DE PRINCE ALBERT, THE ROMAN CATHOLIC BISHOP OF THUNDER BAY,
    IMMACULATE HEART COMMUNITY OF LOS ANGELES CA, ARCHDIOCESE OF VANCOUVER  THE
    ROMAN CATHOLIC ARCHBISHOP OF VANCOUVER, ROMAN CATHOLIC DIOCESE OF WHITEHORSE,
    THE CATHOLIC EPISCOPALE CORPORATION OF MACKENZIEFORT SMITH, THE ROMAN CATHOLIC
    EPISCOPAL CORPORATION OF PRINCE RUPERT, EPISCOPAL CORPORATION OF SASKATOON, OMI
    LACOMBE CANADA INC. and MT. ANGEL ABBEY INC.

Defendants (Appellants)

Sheila Read, for the appellant, moving party

Susan Vella, for the respondents Windigo First Nations
    Council and Nishnawbe Aski Nation

Heard: March 2, 2012

Motion and cross-motion arising out of order of Chief
    Justice Winkler adding Stirland Lake and Cristal Lake high schools to Schedule
    F under the Indian Residential Schools Settlement Agreement on August 16,
    2011.

Watt J.A.:

[1]

This motion and cross-motion originate in an order made by the Chief
    Justice of Ontario adding two new residential schools to a schedule under the Indian
    Residential Schools Settlement Agreement (IRSSA).  An appeal from that order is
    listed for argument before a panel of this Court on May 16, 2012.

[2]

The effect of the order under appeal is to permit former students of the
    added residential schools to become eligible to apply for two types of benefits
    payable under and in accordance with the terms of IRSSA.

[3]

The reasons that follow explain why I dismiss both the motion and
    cross-motion, but order that the hearing of the appeal be expedited to take
    place in April, 2012.

The Procedural Background

[4]

IRSSA represents the resolution of a national class action proceeding.
    The Government of Canada, various religious institutions and the class members,
    First Nations people who attended Indian Residential Schools across Canada,
    agreed to dispute resolution schemes authorizing payment of various benefits
    including compensation, for former students with validated claims.

[5]

About five years ago, nine provincial and territorial superior courts
    across Canada issued orders approving a pan-Canadian settlement in the
    litigation arising out of the joint operation of these residential schools by
    the Government of Canada. The court-approved settlement identified over 130
    residential schools and other institutions as approved and listed under two
    schedules, E and F, of the Agreement.

The Authority to Add Schools

[6]

The IRSSA permits applications to add further residential schools and
    other institutions to Schedule F of the Agreement and describes the procedure
    to be followed to do so.

[7]

In early October 2007, Windigo First Nations Council (Windigo) and
    Nishnawbe Aski Nation (NAN) submitted a request to the Government of Canada to
    add Stirland Lake (Stirland) and Cristal Lake (Cristal) high schools. In late
    May 2008, Canada rejected the request.

[8]

In December 2008, Windigo and NAN applied to Chief Justice Winkler under
    Article 12 of IRSSA for an order adding Stirland Lake and Cristal Lake to
    schedule F of the Agreement.

The Decision Under Appeal

[9]

On August 16, 2011, the Chief Justice released his Reasons for
    Decision.  He concluded that Stirland and Cristal satisfied the requirements of
    Article 12 of IRSSA and directed that both institutions be added to Schedule
    F of the Agreement.

[10]

The
    addition of Stirland and Cristal to Schedule in F of IRSSA entitles former
    students of both institutions to apply for benefits under the Agreement.  The
    Chief Justice directed the parties to meet with Court Counsel for the purposes
    of settling the terms of the order that will flow from these reasons.

The Available Benefits

[11]

Under the
    Agreement, former residents of institutions listed in Schedule F may apply
    for and be entitled to two types of benefits provided they satisfy the relevant
    criteria.

[12]

The Common
    Experience Payment (CEP) is available to former students of listed institutions
    solely because they were residents of the institution. The amount of
    compensation to which a former resident is entitled depends on the number of
    years of residence. Eligibility is subject to validation in a documents-based
    hearing. The CEP benefit is paid out of a trust fund.

[13]

The second
    benefit, the Independent Appeal Process (IAP), requires former students of
    listed institutions to complete a detailed application and collect and file
    mandatory records. The IAP also involves an in-person hearing. The applicant
    testifies before an adjudicator. Typically, counsel appears for the
    Government.

[14]

Compensation
    under the CEP provides redress for the fact that the former students were put
    into an institutionalized residential schooling system typically operated as a
    joint venture by the Government of Canada and religious or other institutions.

[15]

The IAP
    provides redress for validated claims of physical and sexual abuse and other
    wrongful conduct as defined in the enabling provisions.  As a general rule, IAP
    awards exceed those under the CEP.

[16]

Despite
    their differences, the CEP and IAP share common features. Each requires an
    application. Each includes temporal restrictions and compensatory limits. Each
    demands satisfaction of various criteria.  And each imposes an onus on the
    applicant. Neither issues as of right.

The Formal Order

[17]

The formal
    order of November 16, 2011, refers to the Reasons for Decision of August 16,
    2011, declares that both Stirland and Cristal satisfy the applicable
    requirements of IRSSA and directs that both institutions be added forthwith
    to Schedule F of IRSSA. The order establishes a period of six months within
    which former residents can apply for CEP, attaches relevant notices, and
    declares that supplementary orders may issue about the documents necessary to
    verify the attendance of residents/students at the added institutions.

[18]

The formal
    order also directed the parties to deliver their submissions on costs by
    specified dates.

The Grounds of Appeal

[19]

In its
    amended Notice of Appeal of December 16, 2011, the Attorney General alleges
    three errors:

1.       The judge erred in law by concluding that the
    Institutions proposed by the Applicant met the test prescribed by Article 12.01
    of the Indian Residential Schools Settlement Agreement;

2.       The judge committed a palpable and overriding error by
    failing to consider relevant evidence that could have been determinative of the
    issue;

3.       The judge committed a palpable and overriding error by
    drawing wrong inferences from factual conclusions.

The Motion

[20]

The
    principal remedy the Attorney General seeks on its motion is a stay of the
    order under appeal.

The Positions of the Parties

[21]

For the
    Attorney General, Ms. Read advances two alternative grounds upon which she
    submits the order under appeal is or should be stayed pending final disposition
    of the appeal.

[22]

First, Ms.
    Read invokes rule 63.01(1). She says that the order under appeal contains a
    provision for the payment of money, thus delivery of the notice of appeal
    automatically stayed the provision. The order added Stirland and Cristal to
    schedule F of IRSSA, thus made them residential schools or institutions for
    the purposes of the Agreement. Once added,
residents/
students
at the schools qualified for CEP. Under Article 5.01 of
IRSSA,
    the submission continues, the trustee of the Fund must make a payment to every
    former resident/student who resided at either school prior to December 31,
    1997, was alive on May 30, 2005, and submitted an application for CEP. Thus,
    the order provides for the payment of money and is automatically stayed by
    delivery of the notice of appeal.

[23]

Second,
    and in the alternative, Ms. Read contends that the Attorney General has satisfied
    the requirements imposed by rule 63.02(1)(b) for entry of a stay until
    disposition of the appeal.

[24]

Ms. Read
    says that the appeal raises a serious legal issue, the interpretation of Article
    12 of IRSSA. This issue has never been considered by an appellate court. The
    legal error, the failure to consider both parts of the test for inclusion of a
    residential school or institution in Schedule F, was compounded by palpable
    and overriding factual errors that consisted of failure to consider relevant
    evidence and drawing unsupported inferences.  Ms. Read reminds that the
    threshold to establish this requirement is low and is met by a demonstration
    that the appeal is neither frivolous nor vexatious.

[25]

Ms. Read
    points out that failure to enter a stay will cause irreparable harm to the
    appellant. Once made, CEP payments will be almost impossible to recover if the
    appeal is successful. Failure to recover unauthorized payments will prejudice
    the other CEP claimants and residual beneficiaries of the remainder of the
    trust fund.

[26]

According
    to the appellant, the balance of convenience tilts in favour of entry of the
    stay. The only prejudice to former residents/students of Stirland and Cristal
    if the schools were properly added to Schedule F is that their CEP payments
    will be delayed. An expedited hearing of the appeal will reduce any delay to a
    minimum.

[27]

For the
    respondent, Ms. Vella says that rule 63.01(1) is of no avail to the appellant.
    This order contains no provision for the payment of money. She submits that
    rule 63.01(1) has been narrowly interpreted, confined to orders that create a
    fixed debt obligation. The obligation must be actual, not prospective or
    contingent. This order simply declared entitlement, said another way, created
    an opportunity for members of a certain class, former residents/students at
    Stirland and Cristal, to participate in compensation schemes in accordance with
    and upon satisfaction of their requirements.

[28]

Ms. Vella
    urges rejection of the appellants claim for a discretionary stay under rule
    63.02(1)(b). She acknowledges that the appeal cannot be characterized as
    frivolous or vexatious and that compliance with the order would cause
    irreparable harm to non-Stirland and non-Cristal class members who may be
    entitled to participate in any surplus in the CEP Trust Fund.  She points out
    that refusal of the stay, as the appellant concedes, causes no harm to IAP
    claimants.

[29]

Ms. Vella
    centres her opposition to a discretionary stay on the balance of convenience
    factor.  The judgment is presumptively correct.  To stay its operation works
    substantial prejudice against residents/students of Stirland and Cristal
    because the period within which they could apply for compensation under CEP and
    IAP would be so short as to render their entitlement more illusory than real.

The Governing Principles

[30]

The
    principles that govern motions for stays under rules 63.01(1) and 63.02(1) are
    familiar.  Brief reference to some of their features will suffice.

[31]

Courts
    have interpreted rule 63.01(1) narrowly. To qualify as an order for the
    payment of money under the rule, the order or applicable term must create a
    fixed debt obligation:
Longley v. Canada (Attorney General)
(2007),
    223 OAC 102 (Chrs), at para. 11. The debt obligation created must be actual,
    not prospective or contingent on some other determination or satisfaction of
    various conditions precedent:
Longley
,
at para. 12.

[32]

Where a
    party invokes rule 63.02(1) to stay an order pending disposition of an appeal,
    courts apply a three-stage test to determine whether a stay should be entered.
    Stated in short form, the components of the test are:

·

serious question

·

irreparable harm

·

balance of convenience

See,
RJR-MacDonald Inc. v. Canada (Attorney
    General)
, [1994] 1 S.C.R. 311, at p. 334.

[33]

The first component, whether there is a serious question to
    be determined on the appeal, requires a preliminary assessment of the merits of
    the appeal:
RJR-MacDonald Inc.
,

at p. 334.

[34]

The preliminary assessment of the merits begins with
    a presumption of correctness of the decision under appeal:
Ogden
    Entertainment Services v. United Steelworkers of America, Local 440
(1998), 38 O.R. (3d) 448 (C.A.), at p. 450. The onus
    is on the moving party to establish a case for a stay:
International
    Corona Resources Ltd. v. Lac Minerals Ltd.
(1986) 21 C.P.C. (2d) 252 (Ont. C.A.- Chrs), at p. 255. The threshold
    to be met in connection with this first component of the test is a modest one:
Horsefield v. Ontario (Registrar of Motor Vehicles)
(1997), 35 O.R. (3d) 304 (C.A.  Chrs), at p. 311;
RJR-MacDonald
    Inc.
, at p. 337. The moving party must
    demonstrate that the appeal is not frivolous or vexatious:
Longley
, at para. 16;
International Corona
, at p. 255.

[35]

The irreparable harm component has to do with the nature,
    not the magnitude of the harm:
RJR-MacDonald Inc.
, at p. 341. It refers to harm that cannot be
    quantified in monetary terms or that cannot be cured, for example, because one
    party cannot collect damages from the other:
RJR-MacDonald Inc.
,

at

p. 341.

[36]

The balance of
    convenience constituent of the test involves a determination of which of the
    parties will suffer the greater harm from the granting or refusal of the stay
    pending the disposition of the appeal on the merits:
RJR-MacDonald
    Inc.
, at p. 342. The factors relevant
    for consideration in determining where the balance of convenience settles
    varies from one case to the next:
RJR-MacDonald Inc.
, at pp. 342-343.

The Principles Applied

[37]

Rule
    63.01(1) does not provide for an automatic stay at the order under appeal and I
    would not summon rule 63.02(1)(b) as a discretionary substitute.

[38]

We confine
    rule 63.01(1), perhaps because of its mandatory effect, to orders that fall
    plainly within its compass. No term of the order in this case creates a fixed debt
    obligation.

[39]

The
    principal relief ordered was declaratory. The Chief Justice considered whether
    two residential schools/institutions satisfied the requirements of IRSSA for
    inclusion in Schedule F.  He decided that both Stirland and Cristal met those
    requirements. He ordered that both schools be added to the schedule.

[40]

The
    addition of Stirland and Cristal to Schedule F did not create any fixed debt
    obligation for the appellant. The addition entitles residents/students of
    Stirland and Cristal to apply for compensation under CEP and IAP. To obtain
    compensation, each former resident/student of the added institution must meet
    the eligibility requirements imposed under IRSSA. It is then, and only then,
    that the appellant is required to pay compensation in accordance with the
    applicable scheme. The obligation is not fixed by any term of the order, rather
    prospective and contingent on satisfaction of the relevant criteria.

[41]

In the
    absence of a term in the order under appeal that creates a fixed debt obligation,
    the automatic stay for which rule 63.01(1) provides is not engaged by delivery
    of the notice of appeal.

[42]

The
    discretionary stay authority rule 63.02(1), which the appellant invokes as an
    alternative, also eludes the appellants grasp.

[43]

The
    respondent acknowledges that the appeal involves a serious issue, the
    interpretation of Article 12 of IRSSA, a controversy that has thus far not
    ripened for appellate review. That said, it is worth mention that the grounds
    of appeal advanced include two questions of fact that are subject to a standard
    of review of palpable and overriding error, a standard more difficult to
    satisfy than to express. The grounds advanced, the failure to consider relevant
    evidence and drawing erroneous inferences, are notoriously impervious to
    appellate intrusion.

[44]

As for the
    irreparable harm constituent, payments of CEP compensation to unentitled
    applicants may be difficult to recoup once paid. And the payments would reduce
    any surplus in the Trust Fund, thus any further payments from the residue to
    those entitled to them. That said, we have no concrete evidence about the time
    involved in processing the applications and forwarding payments, much less the
    likelihood of substantial payments prior to the disposition of the appeal.

[45]

More
    importantly, however, the balance of convenience settles in favour of the
    respondents.

[46]

Compared
    to the residents/students of schools or institutions contained in the original
    Schedule E and Schedule F of IRSSA, residents/students of Stirland and
    Cristal have a significantly shorter time within which to apply for
    compensation under CEP. Despite the order under appeal, applications from
    Stirland and Cristal residents/students have not been processed, in part
    because the appellant has declined to add the names of the schools to schedule
    F.  Entry of the stay would shorten the period even further. For those who
    seek compensation under IAP, the complexity of the application process and the
    need for legal assistance in compiling and filing the necessary documents exacerbates
    the prejudice.

[47]

The motion
    for a stay until the disposition of the appeal is dismissed.

The Cross-motion

[48]

By
    cross-motion, the respondents seek two orders, only one of which is
    controversial. Unopposed is the cross-motion to expedite the hearing of the
    appeal currently scheduled for May 16, 2012. In dispute is a cross-motion for
    directions about the commencement date from which the time for delivery of the
    notice of appeal began to run.

The Additional Background

[49]

The Chief
    Justice released his Reasons for Decision on August 16, 2011.  After setting a
    schedule for counsel to deliver written submission on costs, the Chief Justice
    concluded:

[79]    In the meantime, I direct the parties to meet with
    Court Counsel for the purpose of settling the terms of the order that will flow
    from these reasons.

[50]

On
    November 16, 2011, the formal Order, upon which the parties agreed, was
    settled.  The order was entered on November 17, 2011.

[51]

On
    December 16, 2011, the Attorney General delivered the notice of appeal.

The Positions of the Parties

[52]

In support
    of her cross-motion, Ms. Vella says that the operative date for determining
    whether a notice of appeal has been delivered within the prescribed time period
    is the date the order under appeal was pronounced, unless the order itself says
    otherwise. The operative date is not the date on which the formal order is
    signed and entered.

[53]

In this
    case, Ms. Vella continues, the order bound the parties from the moment the
    Reasons for Decision were issued. Nothing in the order itself, said or left
    unsaid, expressly or by necessary implication, shows any contrary intention.
    The general rule should prevail.

[54]

Ms. Vella
    submits that the only matters left unresolved by the decision were collateral
    issues, like timelines, the forms of notice, and directions on implementation. No
    issues of substance remained unresolved and no reconsiderations were sought or
    undertaken.

[55]

Ms. Read
    characterizes the cross-motion as a thinly disguised or poorly veiled attempt
    to have the appeal quashed.  Such a remedy, she submits, is not available from
    a chambers judge only from a panel of the court. Nor should the respondent be
    permitted to achieve indirectly what they cannot do directly.

[56]

At all
    events, Ms. Read says the operative date in this case is the date of the formal
    order. The Reasons for Decision make it clear that issues of substance were
    left unresolved and required collaboration among the parties.  As an
    alternative, she seeks an extension of the time for delivery of the notice of
    appeal until the actual service and filing date of December 16, 2011.

The Governing Principles

[57]

As a general rule, the time period within which a notice of
    appeal is to be delivered begins to run on the date the order under appeal is
    pronounced by oral or written reasons:
Byers (Litigation Guardian of) v.
    Pentex Print Master Industries Inc.
(2003), 62 O.R. (3d) 647 (C.A.), at
    para. 31. In other words, the time begins to run from the date a judgment is
    pronounced, and not from the date that it is signed and entered:
Byers
, at para. 31.

[58]

The general rule derives
    from the settled principle to which rule 59.01 gives effect that the binding
    effect of a judgment or order commences the date on which it is pronounced:
Byers
, at para. 31.

[59]

The general rule is not unqualified. The judgment itself may
    provide otherwise:
Byers
, at
    para. 31. Sometimes, the judgment is uncertain on an issue.  Clarification may
    be required. Something of substance may have been missed.  In these cases, the
    time runs from entry, not pronouncement:
Byers
, at paras. 33 and 34.

[60]

Where a court determines
    issues of costs in  discrete proceedings, after the decision on the merits has
    been given, the general rule that time runs from pronouncement is not
    displaced:
Byers
, at
    paras. 36 and 43.

The Principles Applied

[61]

In this
    case, I see no basis upon which to depart from the general rule that the
    operative date for the purposes of calculating the time within which the notice
    of appeal was to be delivered was August 16, 2011, the date the Reasons for
    Decision were released.  Nothing of substance remained undecided.

[62]

It follows
    that the notice of appeal was delivered out of time.  In the absence of a
    motion to quash the appeal, I would extend the date for service and filing to
    the date each occurred, namely, December 16, 2011.

Conclusion

[63]

For these reasons, the motion and cross-motion are
    dismissed. To regularize the appellate process, the time for service and filing
    of the notice of appeal is extended,
nunc pro tunc
, until December 16, 2011.

[64]

Both parties agree that
    the hearing of the appeal should be expedited. The hearing is expedited to a
    date in April 2012, agreeable to counsel, to be fixed by the Registrar.

[65]

The costs of these motions are reserved to the panel
    hearing the appeal.

Released: March 27, 2012                                      David
    Watt J.A.