COURT OF APPEAL FOR ONTARIO

CITATION: Drywall Acoustic Lathing and Insulation, Local 675
    v. SNC-Lavalin Group Inc., 2015 ONCA 718

DATE: 20151028

DOCKET: C59951 (M45104)

Hoy A.C.J.O., Weiler and Huscroft JJ.A.

BETWEEN

The Trustees of the Drywall Acoustic Lathing and
    Insulation Local 675 Pension Fund and 0793094 B.C. Ltd.

Plaintiffs (Appellants)

and

SNC-Lavalin Group Inc., Ian A. Bourne, David
    Goldman, Patricia A. Hammick, Pierre H. Lessard, Edythe A. Marcoux, Lorna R.
    Marsden, Claude Mongeau, Gwyn Morgan, Michael D. Parker, Hugh D. Segal,
    Lawrence N. Stevenson, Gilles Laramée, Michael Novak, Pierre Duhaime, Riadh Ben
    Äissa and Stéphane Roy

Defendants (Respondents)

A. Dimitri Lascaris, Douglas Worndl and Anthony OBrien,
    for the appellants

Steve Tenai and Vasuda Sinha,
    for the respondents, SNC-Lavalin Group Inc., Ian A. Bourne, David Goldman,
    Patricia A. Hammick, Pierre H. Lessard, Edythe A. Marcoux, Lorna R. Marsden,
    Claude Mongeau, Gwyn Morgan, Michael D. Parker, Hugh D. Segal and Lawrence N.
    Stevenson

Clifford Lax, Q.C., for the respondent, Gilles Laramée

Rebecca Wise, for the respondent, Michael Novak

Scott Kugler and Max Muñoz, for the respondent, Pierre
    Duhaime

Laura Young, for the respondent, Stéphane Roy

Heard: July 8, 2015

On appeal from the order of Justice Paul M. Perell of the
    Superior Court of Justice dated January 13, 2015, with reasons reported at 2015
    ONSC 256.

Hoy A.C.J.O.:

OVERVIEW

[1]

Revelations of possible bribery by SNC-Lavalin Group Inc. (SNC)
    prompted the appellants to seek to commence a class action alleging statutory
    claims for misrepresentation in secondary market disclosure documents under
    Part XXIII.1 of the
Securities Act,
R.S.O. 1990, c. S.5 (the
OSA
).
    They sought to sue the respondents: SNC, certain officers of SNC, and persons
    alleged to have been directors of SNC when it released the disclosure documents
    containing the alleged misrepresentations.

[2]

Under s. 138.3(1) of Part XXIII.1, a person or company who acquires or
    disposes of an issuers security between a documents release and public
    correction of a misrepresentation in the document has a right of action for
    damages, without regard to whether the person or company relied on the
    misrepresentation. However, in order to limit meritless litigation or strike
    suits
[1]
,
    s. 138.8(1) of the
OSA
requires leave of the court to commence an
    action under s. 138.3. Section 138.14(1) also imposes a three-year limitation
    period for the commencement of the action, measured from the date the document
    containing the misrepresentation was first released.

[3]

By order dated September 19, 2012, the appellants obtained leave to
    bring the misrepresentation claims pleaded in their Fresh as Amended
    Consolidated Statement of Claim. The action was certified at the same time as a
    class proceeding, with the appellants as the representative plaintiffs. The
    class consists of all persons who acquired SNC securities between November 6,
    2009 to and including February 27, 2012 (the Class Period), subject to
    certain exceptions. The respondents did not oppose the appellants motions for
    leave and certification.

[4]

The Fresh as Amended Consolidated Statement of Claim outlining the misrepresentation
    claims the appellants were granted leave to pursue referred to various
    allegations of wrongdoing, including: (1) allegedly improper agreements between
    SNC and various agents, pursuant to which SNC made payments totalling US$56
    million, and (2) criminal activity by two former SNC employees relating to SNCs
    activities in Bangladesh (the Padma Bridge Project) that resulted in criminal
    charges being filed.

[5]

Criminal and regulatory investigations continued and information of a
    wider scale of alleged wrongdoing later became available. The appellants sought
    leave pursuant to r. 26.01 of the
Rules of Civil Procedure
, R.R.O.
    1990, Reg. 194, to amend the Third Fresh as Amended Consolidated Statement of
    Claim to add what they characterize as further particulars of the wrongful
    conduct underlying the misrepresentation claims. The respondents opposed most
    of the amendments, arguing that the appellants sought to add new allegations of
    misrepresentation and that those new allegations required fresh leave under s.
    138.8(1) of the
OSA
. The respondents also argued that the limitation
    period in s. 138.14(1) of the
OSA
barred the appellants from pursuing these
    new allegations of misrepresentation.

[6]

The motion judge  who was the class proceeding case management judge
    agreed with the respondents, and, by order dated January 13, 2015, denied leave
    under r. 26.01 for the bulk of the proposed amendments and dismissed the causes
    of action arising from those amendments. The appellants now appeal that order.

[7]

At issue on appeal is whether the motion judge erred (1) in holding that
    the appellants could not make the amendments without bringing a new leave
    application under s. 138.8(1), and (2) in concluding that s. 138.14(1) barred
    those disallowed amendments as out of time.

[8]

I conclude that the motion judge erred only by not permitting the
    appellants to plead that SNC committed a misrepresentation by omission in
    failing to disclose the US$56 million agent payments and the criminal activity
    connected to the Padma Bridge Project in Bangladesh  to the extent they
    occurred during the Class Period  in managements discussion and analysis
    (MD&A) and annual information forms (AIFs). Because he did not permit
    this amendment, the motion judge did not consider whether it was properly
    pleaded. If the parties cannot resolve the matter, I would direct the
    appellants to draft an amended pleading incorporating this limited omission
    allegation and attend before the motion judge to determine if it is properly
    pleaded. I would not interfere with the motion judges conclusion that the
    appellants require leave under s. 138.8(1) to plead the balance of the
    amendments, and that s. 138.14(1) bars those amendments as out of time. I would
    accordingly otherwise dismiss the appeal.

[9]

Before addressing the substantive issues on appeal, I will briefly
    address the preliminary issue of this courts jurisdiction.

JURISDICTIONAL ISSUE

[10]

The
    respondents move to quash this appeal to the extent it concerns the motion
    judges order dismissing the appellants motion to make the refused amendments.

[11]

The
    appeal arises from para. 2 of the motion judges order:

THIS COURT ORDERS that the Plaintiffs motion is hereby dismissed
    with respect to the proposed amendments in paragraphs  of the Plaintiffs
    proposed Fourth Fresh as Amended Consolidated Statement of Claim  and the
    causes of action arising from such amendments are hereby dismissed.

[12]

The
    respondents argue that the order at issue is both interlocutory (to the extent
    that it dismissed the appellants motion to amend because the amendments
    require leave under s. 138.8(1)) and final (to the extent that it dismissed the
    causes of action arising from the refused amendments because they are
    statute-barred). They say that an appeal from the interlocutory portion of the
    order lies to the Divisional Court, with leave, and not to this court. They say
    the interlocutory portion of the appeal cannot be transferred to this court
    until the Divisional Court grants leave.

[13]

I
    reject the respondents argument that this court does not have jurisdiction to
    hear this appeal and I would dismiss the respondents motion to quash. The
    respondents rely on the motion judges reasons to artificially parse the order
    under appeal. Appeals lie from orders, not reasons. The motion judges single
    paragraph permanently prohibits the appellants from advancing the refused
    amendments and pursuing the underlying misrepresentation claims and therefore
    constitutes a final order. In any event, as becomes clearer below, the motion
    judges reason for refusing the amendments underlies his conclusion that they
    are statute-barred.

[14]

I
    now turn to the substantive issues on this appeal.

THE MISREPRESENTATIONS PLEADED

[15]

Because
    we are asked to determine whether the proposed amendments constitute discrete
    misrepresentations, separate from those for which leave was initially granted, I
    must review in some detail the misrepresentations already pleaded when the
    appellants brought the motion below.

[16]

Shortly
    after the appellants obtained leave under s. 138.8(1) of the
OSA
, they
    filed a Second Fresh as Amended Consolidated Statement of Claim. Then, in
    January 2014, the motion judge granted the appellants leave to deliver a Third
    Fresh as Amended Consolidated Statement of Claim. The respondents did not argue
    that the amendments in the Second or Third Fresh as Amended Consolidated
    Statement of Claim constituted discrete claims of misrepresentation, requiring
    further leave under s. 138.8(1). The paragraph references below correspond to
    the Third Fresh as Amended Consolidated Statement of Claim, the iteration of
    the appellants statement of claim when they brought the motion at issue.

[17]

At
    para. 5, the appellants provide an overview. They allege that SNC conducted its
    business in an unlawful manner during the Class Period. They say that:

In particular, in December 2009 and July 2011, SNC entered into
    agreements with agents with respect to projects on which SNC was working,
    pursuant to which SNC made payments totalling US$56 million to those agents.
    Although SNC purports not to know the purpose of such payments, their purpose
    was, in fact, to bribe foreign government officials and/or persons in Canada
    for the procurement of business by SNC. In any event, the agreements and the
    payments thereunder violated SNCs Agents Policy and Code of Ethics in numerous
    respects.

[18]

At
    paras. 9 and 58, the appellants plead that SNC made the following
    misrepresentations during the Class Period:

a)

SNC was a socially responsible company and a responsible global
    citizen;

b)

SNC had in place controls, policies and practices that were designed to
    ensure compliance with anti-bribery laws to which SNC is subject;

c)

SNC had ICFR [internal controls over financial reporting] and DC&P [disclosure
    controls and procedures] that were properly designed and/or operating
    effectively; and

d)

SNCs business was conducted in compliance with the Code of Ethics [SNCs
    Code of Ethics and Business Conduct].

[19]

These
    misrepresentations were contained in SNCs annual and interim MD&A, annual
    and interim financial statements, management proxy circulars and AIFs.

[20]

At
    para. 10, the appellants plead why these statements were false:

Such statements were materially false and/or misleading
    because, during the Class Period, SNC was paying bribes to the agents, or
    others with whom the agents contracted on behalf of SNC,
in contravention of
the Code of Ethics and
applicable anti-bribery laws
and, in any event the agency
    agreements and the payments to the agents thereunder violated the Agents
    Policy [SNCs Policy on Commercial Agents/Representatives] and the Code of
    Ethics. Further, SNCs ICFR and DC&P were not effective during the Class
    Period as a result of material weaknesses in the design and operating
    effectiveness of the ICFR relating to non-compliance with, and ineffective
    controls over compliance with, the Code of Ethics and the Agents Policy. [Emphasis
    added.]

[21]

After
    describing the Audit Committees findings and recommendations, the appellants,
    at para. 57, plead that:

Although the investigation conducted by the Audit Committee
    identified problems with SNCs ICFR relating to unlawful and improper payments
    made to third parties in respect of contracts
in North
    Africa
, the bribery practices extended to SNCs operations
in Asia and Canada. These practices and activities were
    systemic at SNC
and were carried out with the full knowledge of senior
    management, including members of the Office of the President, as well as SNCs
    inside directors. The full particulars of such activities are known to the
    Defendants. [Emphasis added.]

[22]

At
    paras. 59 to 105, the appellants provide particulars of the alleged
    misrepresentations, including, at para 59:

SNC was paying bribes, whether directly
    or indirectly, to foreign government officials and/or persons in Canada
in contravention of the Code of Ethics and applicable anti-bribery laws and, in
    any event, SNC entered into agreements with, and made payments pursuant to
    those agreements to, third parties in contravention of the Agents Policy and
    the Code of Ethics. [Emphasis added.]

[23]

At
    para. 111, the appellants describe an SNC press release issued on February 28,
    2012 announcing an expected 18% reduction in net income for 2011. It disclosed,
    among other things, that expenses of approximately $35 million were documented
    to construction projects to which they did not relate and, consequently, had to
    be recorded as expenses in the quarter. It announced that the Board of
    Directors had initiated an independent investigation, led by its Audit
    Committee, of the facts and circumstances surrounding the $35 million of
    payments referred to above and certain other contracts. At paras. 6, 7, and
    112, the appellants plead that the value of SNCs shares fell significantly as
    a result of this corrective disclosure.

[24]

At
    paras. 8 and 113, the appellants allege further declines as a result of
    additional corrective disclosures, including the June 25, 2012 disclosure that
    two former employees of SNC had been charged with criminal offences under the
Corruption
    of Foreign Public Officials Act
, S.C. 1998, c. 34 (the
CFPOA
)
    relating to SNCs activities in Bangladesh.
[2]

THE FIRST OPPOSED AMENDMENT MOTION

[25]

The
    order under appeal arises out of the appellants second opposed motion to amend
    their statement of claim.

[26]

After
    more information became available about the scale of alleged wrongdoing, the
    appellants brought their first opposed motion for leave under r. 26.01 to amend
    the Second Fresh as Amended Consolidated Statement of Claim. They sought to:
    add details of further declines in the market value of SNCs securities
    following additional investigations undertaken by the RCMP and other
    authorities of SNCs activities; to allege the jurisdictions in which SNC
    engaged in bribery; and to plead misrepresentation by omission in relation to
    conduct by SNC occurring before and during the Class Period that was not
    disclosed in its Class Period MD&A and AIFs.

[27]

Because
    the appellants sought leave to make some of the same and similar amendments on
    the second opposed motion, the motion judges reasons on the first opposed
    motion are relevant.

[28]

He
    permitted the appellants to plead additional facts which he characterized as corrective
    disclosures, namely that:

1)

There was a decline in the market value of SNCs securities during
    trading on April 13, 2012 as a result of the release of information that the
    Royal Canadian Mounted Police conducted a search of SNCs headquarters in
    Montreal on April 13, 2012  ;

2)

There was a decline in the market value of SNCs securities during
    trading on November 26, 2012 as a result of the release of information that
    Swiss authorities were investigating illegal or improper payments by SNC in the
    approximate amount of $139 million and that such payments were in addition to
    the US$56 million of payments referenced [earlier in the pleading]  ; (the Swiss
    Investigation Disclosure)

3)

There was a decline in the market value of SNCs securities during
    trading on November 28 and 29, 2012 as a result of the release of information
    that [the defendant Pierre] Duhaime had been arrested and charged with fraud
    and other criminal offences related to the contract awarded to SNC with respect
    to the construction and operation of the McGill University Health Centre
    hospital project in Montreal  ; and

4)

There was a decline in the market value of SNCs securities during
    trading on July 3, 2013 as a result of the release of information that SNC had
    paid a secret $13.5 [million] commission that was linked to a major oil sands
    project in Alberta.

These particular amendments were not opposed by the
    respondents:
Drywall and Acoustic Lathing and Insulation Local 675 Pension
    Fund (Trustees of) v. SNC-Lavalin Group Inc.
, 2014 ONSC 660, at paras. 26,
    32 and 61.

[29]

At
    para. 33, the motion judge dismissed the balance of the first opposed motion to
    amend for one or more of the following reasons:

(a) [S]ome of the proposed amendments are barred by the Order
    granting leave under the Ontario
Securities Act
that foreclosed a
    common law negligence claim; (b) most if not all of the proposed amendments
    would re-open the certification motion; (c) the proposed amendments contravene
    the rules about pleadings, in particular the amendments do not meet the
    standard for pleading a case of bribery associated with a pleading of
    misrepresentation under Part XXIII.1 of the Ontario
Securities Act

[30]

At
    para. 34, on which the respondents rely, he wrote:

The Plaintiffs main argument that their proposed amendments do
    not alter the fundamental structure of the action is not true or it is no more
    true than saying that a trip to Dhaka (the capital of Bangladesh) is the same
    as a trip to Montreal simply because both are cities. But more to the point,
    this argument fails because the proposed amendments are not proper pleadings.

[31]

The
    motion judge, at para. 39, dismissed the proposed bribery-related amendments
    because the appellants had not pleaded the necessary material facts:

[T]here are no material facts pleaded as to who made the bribe,
    to whom was the bribe made, where was the bribe made, when was the bribe made,
    what was the amount of the bribe, and what was the purpos[e] of the bribe. The Plaintiffs
    proposed amendments plead that bribes were paid by a non-exclusive list of
    employees in respect of a non-inclusive list of countries.

[32]

At
    paras. 44 and 45, he dismissed the pleading of misrepresentation by omission
    because the appellants had failed to plead the material facts with respect to a
    corrective disclosure, one of the elements of the statutory cause of action
    under the
OSA
. He wrote, at para. 46, that to generalize undisclosed
    bribery as falsifying SNC-Lavalins disclosure documents [conceals] what counts
    as corrective disclosure. He concluded that the only additional alleged
    corrective disclosure the appellants pleaded regarding pre-Class Period conduct
    was the Swiss Investigation Disclosure and the appellants failed to plead the
    material facts with respect to that disclosure.

[33]

He
    concluded, at para. 47, that the proposed amendments were unfair. They did not
    provide notice to the respondents of the case they must meet, and they would
    permit the appellants to engage in a fishing expedition for more misconduct on
    discovery.

[34]

The
    Divisional Court dismissed the appellants motion for leave to appeal the
    motion judges order:
The Trustees of the Drywall Acoustic Lathing and
    Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc.
, 2014 ONSC
    3438.

[35]

The
    permitted amendments were incorporated into the Third Fresh as Amended
    Consolidated Statement of Claim.

THE AMENDMENTS AT ISSUE

[36]

About
    a year after the first opposed motion to amend, the appellants brought the
    motion below. The appellants sought to amend the Third Fresh as Amended
    Consolidated Statement of Claim. The appellants moved to plead, among other
    things:

a)

Additional Bribery Allegations:
That in addition to the
    US$56 million, SNC offered or paid bribes to foreign public officials in Libya
    and Tunisia during the Class Period. The appellants provided particulars of who
    made the bribes to whom, when and where the bribes were made or offered, and
    the amount and purpose of the bribes;

b)

Embezzlement Allegations:
That the defendant Riadh Ben Äissa,
    a former senior executive of SNC, and the non-defendant Sami Bebawi embezzled
    money from SNC through Duvel Securities Inc. and Dinova International Inc.,
    thereby violating SNCs Code of Ethics;

c)

Enrichment Allegations:
That, between January 2003 and
    December 2010, Ben Äissa was enriched through payments to his company, Tresca
    Holding Inc., from several South Korean and Malaysian companies, again in
    violation of SNCs Code of Ethics;

d)

Gaddafi Allegations:
That SNC funded a plan to extract
    Saadi Gaddafi and his family from Libya and transport them to Mexico, and paid
    fees in relation to a Toronto condominium owned by Gaddafi, both in violation
    of the
Regulations Implementing the United Nations Resolutions on Libya
,
    SOR/2011-51 (the Regulations);
[3]

e)

Agent Agreements Allegations:
That the quantum of fees
    paid under two agent agreements connected to a project in Angola breached SNCs
    Agents Policy and Code of Ethics;

f)

Violation of Laws Allegations:
That SNC violated laws
    applicable to its business, including the Regulations and the
Criminal Code
,
    R.S.C. 1985, c. C-46; and

g)

Omission Allegation:
That SNCs failure to disclose
    that it was engaged in bribery in multiple jurisdictions during the Class Period
    constituted a misrepresentation by omission.
[4]

THE MOTION JUDGES DECISION

[37]

The
    motion judge granted leave to amend the pleadings related to alleged bribery in
    Bangladesh and alleged misconduct connected to Canadian projects. However, he
    concluded that the balance of the amendments advanced discrete
    misrepresentation claims and therefore required a fresh leave application under
    s. 138.8(1). He also held that it was too late to obtain leave, as per s.
    138.14(1):
Drywall Acoustic Lathing and Insulation, Local 675 Pension Fund
    (Trustees of) v. SNC-Lavalin Group Inc.
, 2015 ONSC 256, 124 O.R. (3d) 368.

[38]

He
    concluded, at paras. 5 and 7, that allowing the appellants to advance the
    discrete misrepresentation claims without running them through the safeguard of
    a fresh leave analysis would be unfair to the respondents. The respondents had
    not opposed the granting of leave for the claims as originally pleaded and, he
    wrote at para. 7, [o]btaining leave cannot be used as a procedural
    bait-and-switch tactic or a procedural bait-and-pile-on tactic.

[39]

He
    noted, at para. 18, that the only evidence led on the unopposed motion for
    leave and for class certification pertained to the Audit Committees
    investigation into the US$56 million agent payments and to the allegations of criminal
    activity connected to the Padma Bridge Project in Bangladesh. Similarly, the
    appellants expert only addressed price drops in SNC shares on February 28-29
    and June 25, 2012, dates that immediately followed disclosure of the US$56
    million in payments and the Padma Bridge Project charges.

[40]

He
    also noted, at para. 20, that only one sentence of the appellants lengthy pleading
    alleged that bribery was systemic at SNC.

[41]

At
    para. 28, he explained why identifying the misrepresentation associated with
    the disclosure document is necessary. Among other reasons, one needs a
    benchmark to determine when and whether there was a corrective disclosure and
    to determine whether leave should be granted under s. 138.8.

[42]

He
    explained, at para. 29, that to identify a misrepresentation, a plaintiff must
    specify the facts represented and why those facts are false. That is, the
    plaintiff must specify what makes the representation a misrepresentation. Each
    misrepresentation is distinct, even if the representation is the same.
    Therefore, he held at para. 34, a plaintiff applying for leave under s.
    138.8(1) must lead evidence of each discrete allegation of misrepresentation
    that she wishes to pursue. He wrote, at para. 42, that whether a plaintiff
    requires leave under s. 138.8(1) to amend a statement of claim turns on the
    nature of the misrepresentation claim that was pleaded for the purpose of
    obtaining leave.

ANALYSIS

[43]

I
    am not persuaded that the motion judge erred in principle in his approach. I
    reject the appellants argument that the motion judge failed to consider the objectives
    of the leave requirement in s. 138.8(1), Part XXIII.1 and the
OSA
as a
    whole and that his conclusion is inconsistent with those objectives. I agree
    with the motion judge that when a plaintiff seeks leave to amend a statement of
    claim under r. 26.01 after receiving leave under s. 138.8(1), and after the
    expiry of the limitation period in s. 138.14(1), the motion judge must consider
    the precise misrepresentation that was pleaded for the purpose of obtaining
    leave. I also agree with him that, in such circumstances, the motion judge must
    focus on the facts the plaintiff pleaded that make the representation a
    misrepresentation. I further agree that the plaintiff must lead sufficient
    evidence to satisfy the leave requirement for each discrete allegation of
    misrepresentation.

[44]

Nor
     with one limited exception  am I persuaded that there is any basis for the
    court to interfere with the motion judges decision that the refused amendments
    in this case constitute discrete misrepresentation claims.

Objectives of the Leave Requirement

[45]

I
    first address the appellants argument that the motion judge failed to consider
    the objectives of the leave requirement in s. 138.8(1), Part XXIII.1 and the
OSA
as a whole and that his conclusion is inconsistent with those objectives.

[46]

The
    appellants argue that the
OSA
is remedial legislation: its purposes,
    which are explicitly stated in s. 1.1 of the
OSA
are (a) to provide
    protection to investors from unfair, improper or fraudulent practices; and (b)
    to foster fair and efficient capital markets and confidence in capital
    markets. They also point to the twin goals of the statutory scheme under Part
    XXIII.1: (a) facilitating and enhancing access to justice for investors, and (b)
    deterring corporate misconduct and negligence:
Green v. Canadian Imperial
    Bank of Commerce
, 2014 ONCA 90, 118 O.R. (3d) 641, at para. 36, leave to
    appeal granted, [2014] S.C.C.A. No. 137, appeal heard and reserved February 9,
    2015. They reiterate that the objective of the leave requirement in s. 138.8(1)
    is to limit meritless litigation or strike suits.

[47]

The
    appellants argue that the motion judge failed to consider these objectives and
    elevated concerns about the right of defendants to procedural fairness above
    the interests of investors. They say that once the leave test is met, and the
    court is satisfied that the proposed action is not a strike suit, a pleading
    amendment that does not alter the core or essence of the action cannot convert
    the action into a strike suit. The appellants submit that a further leave
    motion should be required only if the proposed pleading fundamentally alters
    the action for which leave was granted. In this case, they argue, the
    allegations at issue are not new misrepresentations wholly unrelated to the misrepresentation
    claims for which leave was granted. Therefore, the motion judge should have
    permitted the proposed amendments.

[48]

I
    am not persuaded that the motion judges conclusion is inconsistent with the
    objectives of the leave requirement, Part XXIII.1 or the
OSA
generally.

[49]

Part
    XXIII.1 was added to the
OSA
after a lengthy period of study and
    debate and only came into force on December 31, 2005. Its scheme includes
    various defences and other important limitations that temper its goals of
    providing access to justice for aggrieved secondary market investors and
    deterring disclosure violations. The scheme also provides various protections
    to issuers, including the three-year absolute limitation period in s.
    138.14(1), a cap on a responsible issuers liability in s. 138.7 and the leave
    requirement in s. 138.8(1), which is reproduced below. The objectives of Part
    XXIII.1 must be considered in light of these countervailing limitations.

[50]

Section
    138.8(1) provides as follows:

Leave to Proceed

138.8 (1) No action may be commenced under section 138.3
    without leave of the court granted upon motion with notice to each defendant.
    The court shall grant leave only where it is satisfied that,

(a) the action is being brought in good faith; and

(b) there is a reasonable possibility that the action will
    be resolved at trial in favour of the plaintiff.

[51]

Section
    138.8(1) is intended to be a robust deterrent screening mechanism: see
Theratechnologies
    inc. v. 121851 Canada inc.
, 2015 SCC 18, 382 D.L.R. (4th) 600, at para.
    38. It must be remembered that an action under s. 138.3 is an action for
    misrepresentation. Thus, when a plaintiff seeks to amend its misrepresentation
    claim under r. 26.01 after receiving leave under s. 138.8(1), and after the
    expiry of the limitation period in s. 138.14(1), the analysis is necessarily
    whether the plaintiff seeks to advance a different misrepresentation claim. The
    approach that the appellants urge would permit a plaintiff which has met the
    leave test in s. 138.8(1) to significantly expand the scope of its action to
    include discrete, untested allegations of misrepresentation that are without
    merit. Permitting this would, in my view, frustrate the objective of the leave
    requirement. The threat of expanded litigation has the possibility of affecting
    the settlement dynamic  the very matter that the leave requirement sought to
    address.

Discrete Misrepresentation Claims

[52]

The
    need to assess whether each pleaded misrepresentation meets the leave test was
    identified by the motion judge in an earlier decision:
Millwright Regional
    Council of Ontario Pension Trust Fund (Trustees of) v. Celestica Inc.
,
    2014 ONSC 1057, 49 C.P.C. (7th) 12. Leave was granted with respect to an
    alleged misrepresentation about Celesticas restructuring but denied with
    respect to other alleged misrepresentations because the plaintiffs failed to
    meet the requisite evidentiary burden.

[53]

While
    the appellants argue that the motion judge erred in principle, in my view,
    their real dispute is with his conclusion that the proposed amendments
    represent discrete misrepresentation claims, and go too far to be allowed
    without being tested by a fresh leave application: at para. 5.

[54]

The
    motion judge has case-managed every aspect of this complex action. Most
    importantly, he heard and granted the appellants unopposed motion for leave
    under Part XXIII.1 of the
OSA
. The motion judge was best positioned to
    determine the nature of the claim he had granted the appellants leave to
    pursue. His conclusion that the proposed amendments constitute discrete
    misrepresentation claims is entitled to deference.

[55]

The
    motion judge emphasized that the respondents had not opposed the leave motion. In
    my view, it is significant that they did not do so, and is something to be
    encouraged. If a defendant who does not oppose leave based on one set of
    allegations and on the evidence that the plaintiffs advanced in support of
    those allegations can  in the motion judges words  be exposed to a
    procedural bait-and-pile-on tactic, defendants will be more inclined to
    oppose leave motions. This would increase the cost of litigation and be
    contrary to the goal of Part XXIII.1 of facilitating and enhancing access to
    justice for investors.

(a) Additional Bribery Allegations

[56]

In
    disallowing the Additional Bribery Allegations, the motion judge rejected the
    appellants argument that they were simply providing further particulars of
    already pleaded systemic bribery. He noted that there was only a single
    reference to systemic bribery in the lengthy pleading and that the evidence
    on the unopposed motion for leave pertained only to the US$56 million agent
    payments and the allegations connected to the Padma Bridge Project. As I have
    said, the motion judge, who heard the leave motion, was in the best position to
    determine the nature of the claim he granted the appellants leave to pursue.

[57]

I
    am not persuaded that, in permitting the amendment to the Second Fresh as
    Amended Consolidated Statement of Claim to plead the Swiss Investigation
    Disclosure (an investigation distinct from the scrutiny into the US$56 million),
    the motion judge acknowledged that the appellants claim was one of systemic
    bribery. I therefore reject the appellants argument that, in light of this
    earlier amendment, the motion judges failure to allow the Additional Bribery
    Allegations amounts to a palpable and overriding error. Nor does the
    respondents failure to object to the amendment prevent them from now objecting
    to the Additional Bribery Allegations.

[58]

The
    Swiss Investigation Disclosure amendment was proposed by the appellants, and
    permitted by the motion judge, in the absence of any pleading that the representations
    at issue were false because of the payments that were the subject of the Swiss
    investigation. In other words, the motion judge did not allow the amendment on
    the basis that the additional corrective disclosure provided further
    particulars of or refined the misrepresentation claims for which leave had
    already been granted. He allowed it because it was unopposed by the respondents.

[59]

It
    is not clear to me that the proper approach is to define (or re-define) the
    misrepresentation by alleged further corrective disclosure pleaded following
    the leave motion. This is an issue best left for another day. What constitutes corrective
    disclosure for the purposes of this action may be an important issue and one
    which the respondents may choose to address in a forum other than a pleadings
    motion.

(b) Omission Allegation

[60]

The
    motion judge did not specifically address the Omission Allegation in the
    decision at issue. However, it follows that if the appellants cannot plead the Additional
    Bribery Allegations, they cannot plead the Omission Allegation, which is
    similarly founded on SNCs failure to disclose that it was engaged in bribery
    in multiple jurisdictions. It suffers from the same defect as the allegations
    based on a reference to systemic bribery. This is perhaps why the motion
    judge did not specifically address the Omission Allegation.

[61]

The
    motion judge did not consider whether a narrower omission allegation should be
    permitted. I would permit the appellants to plead a narrower form of omission
    allegation under s. 138.3(1) of the
OSA
, limited to SNCs failure to
    disclose the US$56 million agent payments and the criminal activity connected
    to the Padma Bridge Project in Bangladesh  to the extent they occurred during
    the Class Period
in
its
MD&A
and
AIFs
.
[5]

[62]

On
    the initial leave motion, the appellants pleaded that various representations
    made by SNC in specified core documents
[6]
,
    such as the fact that it was a socially responsible company, were false
    because SNC paid US$56 million to agents and because its former employees were
    involved in criminal activity connected to the Padma Bridge Project in
    Bangladesh. The motion judge was satisfied that sufficient material facts were
    pleaded in respect of these misrepresentation claims. He also accepted that the
    claims were made in good faith and that there is a reasonable possibility they
    will be resolved in the appellants favour. Given this, a claim that SNC
    committed a misrepresentation by omission in failing to disclose the
    already-pleaded material facts that were required to be disclosed in order to
    make the representations listed above in para. 18 not misleading would have
    obtained leave.

[63]

Denying
    the appellants leave under r. 26.01 to plead this variant without a
    difference would not enhance justice for investors or serve the purposes of s.
    138.8(1). It would constitute an overly technical approach that disregards the
    twin goals of Part XXIII.1 and the purpose of the leave requirement in s.
    138.8(1).

[64]

On
    the first opposed amendment motion, the motion judge dismissed the appellants request
    to amend their pleading to include a broad allegation that SNC failed to
    disclose bribery that occurred both prior to and during the Class Period on the
    basis that they had failed to plead the material facts with respect to the
    associated corrective disclosure. His concern appears to have related to the
    allegations regarding the pre-Class Period. On the motion at issue, the motion
    judge did not revisit this issue. He disposed of all of the proposed further
    allegations on the basis that they constituted discrete misrepresentation
    claims and therefore required a fresh leave application. The narrower Omission
    Allegation  and the portion of it that I would permit the appellants to plead
     relates only to the Class Period. If the corrective disclosures of the
    alleged misrepresentations relating to the US$56 million agent payments and the
    criminal activity connected to the Padma Bridge Project in Bangladesh are
    adequately pleaded, it follows that the corrective disclosures for the
    corresponding omission allegation are sufficiently pleaded.

[65]

The
    respondents argued, in oral submissions, that where the alleged misrepresentation
    is a misrepresentation by omission, a plaintiff must plead and prove that the
    defendants had knowledge of the omitted material fact. They say that, because the
    appellants did not plead or lead any evidence on the leave motion that the
    defendants had knowledge of the omitted material fact, they cannot now advance
    an omission allegation. I reject this argument.

[66]

Misrepresentation
    is defined in s. 1(1) of the OSA:

misrepresentation means,

(a)  an untrue statement of material fact, or

(b) an omission to state a material fact that is required to
    be stated or that is necessary to make a statement not misleading in the light
    of the circumstances in which it was made.

Material fact is in turn defined as follows:

material fact, when used in relation to securities issued or
    proposed to be issued, means a fact that would reasonably be expected to have a
    significant effect on the market price or value of the securities.

Neither the definition of misrepresentation nor the
    definition of material fact includes a knowledge requirement. A plaintiff
    who, as in this case, makes a claim under s. 138.3(1) alleging
    misrepresentations in a core document
[7]
(as opposed to a non-core document or a public oral statement) is not required
    to prove that the defendant knew of the omission: see
OSA
, s. 138.4;
Gould
    v. Western Corp.
, 2012 ONSC 5184, 7 B.L.R. (5th) 19, at para. 100.

(c) Embezzlement, Enrichment, Gaddafi and Agent Agreements
    Allegations

[67]

Like
    the motion judge, I view the Embezzlement, Enrichment, Gaddafi and Agent
    Agreements Allegations as discrete misrepresentation claims. The
    misrepresentations previously pleaded made no reference to agent agreements in
    Angola, payments for the benefit of Saadi Gaddafi in violation of the
    Regulations, or the embezzlement of funds by or for the personal enrichment of
    Ben Äissa. These allegations constitute separate reasons why the broad representations
    described in para. 18 above are false.

(d) Violation of Laws Allegations

[68]

As
    for the Violation of Laws Allegations, the appellants allege violations of
    laws applicable to SNCs business, including the
Regulations
and the
Criminal
    Code
. From the outset, the appellants pleaded that SNC was paying bribes
    in contravention of  applicable anti-bribery laws. They also pleaded that
    two former employees had been charged with criminal offences under the
CFPOA
.
    The proposed pleading retains these references. As the appellants already
    pleaded violations of applicable anti-bribery laws, I infer that the proposed
    addition alleges violations of laws other than anti-bribery laws.
[8]
SNCs possible violation of non-bribery-related laws falls outside the scope of
    the misrepresentation claim for which the appellants obtained leave. Accordingly,
    the appellants must bring a fresh leave application to allege that SNC violated
    laws other than anti-bribery laws.

LIMITATIONS ISSUE

[69]

The
    motion judge concluded that it was too late for the appellants to obtain leave
    under s. 138.8(1) to plead the denied amendments.

[70]

Section
    138.14(1) imposes a three-year limitation period. It provides, in relevant
    part:

Limitation period

No action shall be commenced under section 138.3,

(a) in the case of misrepresentation in a document, later
    than the earlier of,

(i) three years after the date
    on which the document containing the misrepresentation was first released

[71]

The
    parties agree that the documents alleged to contain the misrepresentations were
    released between November 6, 2009 and November 4, 2011.

[72]

The
    limited portion of the Omission Allegation that I would permit the appellants
    to plead is not statute-barred because it forms part of the misrepresentations
    initially pleaded.

[73]

The
    word action is not defined in the
OSA
. The appellants argue that
    since they commenced this action and pleaded the misrepresentations in the
    impugned documents within the applicable limitation period, any related
    misrepresentation claim arising out of the already-pleaded impugned documents is
    not statute-barred. In other words, if a plaintiff commences an action
    asserting misrepresentation in a disclosure document within the limitation
    period, the plaintiff can, at any time thereafter, assert any related
    misrepresentation claims arising out of the same documents.

[74]

The
    appellants were granted leave to commence a particular action, namely one
    asserting that representations in the impugned documents were false because of
    evidence that amounts had been paid to agents and that SNC was engaged in
    criminal activity with respect to the Padma Bridge Project in Bangladesh. As I
    concluded above, the appellants did not obtain leave to pursue claims founded
    on other misrepresentations, and therefore those other claims are not part of
    the action. As the impugned documents are now more than three years old, those
    claims are statute-barred.

[75]

If
    leave is required to advance further misrepresentation claims arising out of
    previously impugned documents, then those further misrepresentation claims are
    a different action, and are subject to the limitation period in s. 138.14(1).

DISPOSITION

[76]

I
    would allow the appeal only to the extent of permitting the appellants to plead
    that SNC committed a misrepresentation by omission in failing to disclose the
    US$56 million agent payments and the criminal activity connected to the Padma
    Bridge Project in Bangladesh  to the extent they occurred during the Class
    Period
in
its
MD&A
and
AIFs
. Because
    he did not permit this amendment, the motion judge did not consider whether it
    was properly pleaded. If the parties cannot resolve the matter, I would direct
    the appellants to draft an amended pleading incorporating this limited omission
    allegation and attend before the motion judge to determine if it is properly
    pleaded. I would not interfere with the motion judges decision that the
    appellants require leave under s. 138.8(1) to plead the balance of the
    amendments, and that s. 138.14(1) bars those amendments as out of time. I would
    accordingly otherwise dismiss the appeal.

[77]

The
    parties agreed to costs of $2,000 to the successful party on the motion to
    quash and costs of $10,000 to the successful party on the appeal  in each
    case, inclusive of disbursements and HST. On the motion to quash, I would order
    the respondents to pay the appellants $2,000. As the respondents were
    substantially successful on the appeal, I would order the appellants to pay the
    respondents costs of the appeal in the amount of $10,000.

Released: AH  OCT 28
    2015

Alexandra
    Hoy A.C.J.O.

I
    agree K.M. Weiler J.A.

I
    agree Grant Huscroft J.A.

[1]

Green v. Canadian Imperial Bank of Commerce
, 2014 ONCA 90, 118 O.R.
    (3d) 641, at paras. 39-40, leave to appeal granted, [2014] S.C.C.A. No. 137,
    appeal heard and reserved February 9, 2015. At para. 39, the court describes
    strike suits, which had become prevalent in the United States in the period
    prior to enactment of Part XXIII.1: In a strike suit, a class action lawyer
    would sue on a corporate statement whenever the share price fell, in order to
    obtain a quick settlement from the corporation, regardless of the merit of the
    claim.

[2]
See para. 28 below for a description of the additional corrective disclosures
    that the motion judge permitted the appellants to plead in the Third Fresh as
    Amended Consolidated Statement of Claim. While I refer to them in these reasons
    as corrective disclosures, I make no determination as to whether or not they
    constitute corrective disclosures for purposes of this action.

[3]
The Regulations implemented a United Nations Security Council resolution passed
    in the first days of Libyas 2011 civil war. The Regulations prohibit Canadians
    or persons in Canada from supplying arms or related material to Libya or any
    person in Libya. The Regulations also prohibit Canadians or persons in Canada
    from knowingly dealing in any property in Canada owned or controlled by a
    designated person, and from knowingly making any property available to a
    designated person. The Regulations define a designated person as a person
    listed by the Security Council. The Security Council lists people with ties to
    the Muammar Gaddafi regime.

[4]
This allegation is narrower than that which the appellants sought to plead on
    the first opposed amendment motion. There, the appellants also sought to allege
    that SNC failed to disclose bribery that occurred prior to the Class Period.

[5]
The appellants allege misrepresentations by omission arising only out of SNCs
    Class Period MD&A and AIFs.

[6]
A core document is defined in s. 138.1 of the
OSA
and includes: a prospectus, a
    take-over bid circular, an issuer bid circular, a directors circular, a notice
    of change or variation in respect of a take-over bid circular, issuer bid
    circular or directors circular, a rights offering circular, MD&A, an AIF,
    an information circular, annual financial statements, an interim financial
    report and a material change report, where used in relation to a responsible
    issuer (among others). The appellants allege that SNCs AIFs, financial
    statements, management proxy circulars and MD&A contained
    misrepresentations.

[7]
See footnote 6.

[8]
I also note that the Regulations do not appear to fall under the category of
    anti-bribery laws. As explained in a footnote above, the Regulations, passed in
    the context of the Libyas 2011 civil war, aim to shrink the Libyan arms trade
    and to limit some Libyan officials dealings in property. It is not clear to me
    that such war sanctions would be characterized as anti-bribery laws.


COURT OF APPEAL FOR ONTARIO

CITATION: Entry Point Investments v. Invis Inc., 2015 ONCA
    701

DATE: 20151020

DOCKET: C60273

Gillese, van Rensburg and Miller JJ.A.

BETWEEN

Anthony Gyimah trading as Entry Point Investments

Appellant (Plaintiff)

and

Invis Inc.
,
Ricky Singh
, Poorna Jayasena, Kviwinder Sohi, Jasvinder Sohi,
    Naomi Edwards, Ranjit Dullay,
Domenic Reda

Respondents
(Defendants)

Anthony Gyimah, acting in person

Ilan Ishai and Grace M. McKeown, for the respondents

Heard: October 9, 2015

On appeal from the order of Justice Paul Perell of the Superior
    Court of Justice, dated March 30, 2015.

ENDORSEMENT

[1]

Anthony Gyimah brought a motion for summary judgment against the
    respondents Ricky Singh, Domenic Reda, and Invis Inc. on an alleged guarantee
    of a $30,000 loan that Gyimah made to Ranjit Dullay and Naomi Edwards, who were
    also named as defendants to the action.

[2]

The motion for summary judgment was dismissed, and the cross-motion of
    the respondents for summary judgment dismissing the action against them was
    granted, with costs fixed at $25,000.

[3]

Gyimah appeals, and also seeks leave to appeal the costs order.

[4]

The motions judge found that Dullay and Edwards approached Singh, a
    mortgage broker with Invis Inc., to arrange a short-term bridge loan to
    facilitate the closing of a home purchase. Singh approached his Invis Inc.
    colleague Reda, who approached Gyimah in relation to providing a loan to Dullay
    and Edwards.

[5]

Gyimah agreed to lend $30,000 to Dullay and Edwards for a fee of $1,500.

[6]

Gyimahs expectation was that the loan would be repaid, together with
    the loan fee, in three days, on the close of the real estate transaction.

[7]

After receiving letters of direction confirming that $31,500 from the
    proceeds of the purchase price would be paid to him on closing, Gyimah advanced
    $30,000 to Dullay. Dullay is alleged to have given $10,000 to a realtor for a
    purchase deposit, and $20,000 to Dullays solicitor.

[8]

Subsequently, the real estate transaction did not close, and Dullays
    solicitor paid the $20,000 into court.

[9]

The motions judge found that there was no agreement between Gyimah and
    the respondents that the respondents would guarantee the loan. The motions
    judge preferred the respondents evidence over Gyimahs evidence, which was
    unsupported by documentary evidence and found to be implausible. The motions
    judge weighed the evidence of the parties as he was entitled to do, and drew
    permissible inferences. These findings and inferences are entitled to deference;
    the appellant has not identified any palpable and overriding errors in them.

[10]

With
    respect to Gyimahs allegation that the guarantee was an oral agreement, the
    motions judge made no error in dismissing the claim on the basis that even if
    an oral guarantee had been given, s. 4 of the
Statute of Frauds
,
    R.S.O. 1990, c. S.19 requires a guarantee to be in writing to be enforceable.

[11]

We
    would not grant leave to appeal the costs order but, in any event, we see no
    basis on which to interfere with it.

DISPOSITION

[12]

The
    appeal is dismissed with costs to the respondents fixed at $6,400.00, all
    inclusive.

E.E.
    Gillese J.A.

"K. van Rensburg
    J.A."

B.W. Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Ferri v. Ontario (Attorney General), 2015 ONCA 683

DATE: 20151008

DOCKET: C60766

Cronk, Tulloch and Hourigan JJ.A.

BETWEEN

Mario Ferri

Applicant (Appellant)

and

Her Majesty the Queen, as represented by the
    Ministry of the

Attorney General

Respondent (Respondent)

Paul J. Pape and Andrea M. Bolieiro, for the appellant

Tom Schreiter, for the respondent

Heard: September 25, 2015

On appeal from the order of Justice Robert E. Charney of
    the Superior Court of Justice, dated June 23, 2015.

Hourigan J.A.:

[1]

Mario Ferri appeals the order dismissing his application under r. 14.05(3)
    of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194,

for a declaration that he does not have
    a pecuniary interest within the meaning of the
Municipal Conflict of
    Interest Act
, R.S.O. 1990, c. M.50 (the
MCIA
) in relation to an
    appeal currently before the Ontario Municipal Board (the OMB) commenced by
    Antonio Di Benedetto (the Di Benedetto Appeal) and related matters.

[2]

At the conclusion of oral argument, this court allowed the appeal, for
    reasons to follow. These are those reasons.

A.

Background in Brief

[3]

The facts giving rise to the application are simply stated. The
    appellant is a local and regional councillor for the City of Vaughan. His son,
    Steven Ferri, is an associate with the law firm Loopstra Nixon LLP, practising
    in the areas of municipal, development, and land use planning law. Following
    the adoption of the Vaughan Official Plan 2010 (the Plan) by Vaughan City Council,
    Loopstra Nixon was retained by Antonio Di Benedetto to appeal an aspect of the
    Plan to the OMB. Steven Ferri works directly on the Di Benedetto Appeal, under
    the supervision of a partner of Loopstra Nixon.

[4]

Pursuant to s. 3 of the
MCIA
, the pecuniary interest of any
    parent, spouse, or child of a councillor, if known to the councillor, is deemed
    to be the pecuniary interest of the councillor. Under s. 5 of the
MCIA
,
    where a councillor has a pecuniary interest, direct or indirect, in any matter
    that is under consideration at a meeting, that member shall declare his
    interest, and is prohibited from, among other things, discussing or voting in
    respect of the matter or attempting to influence the vote. However, pursuant to
    s. 4(k) of the
MCIA
, where the pecuniary interest of the councillor is
    so remote or insignificant in its nature that it cannot reasonably be regarded
    as likely to influence the councillor, s. 5 does not apply.

[5]

Given that the pecuniary interest of his son is deemed to be also his
    pecuniary interest, the appellant adopted, out of an abundance of caution, the
    practice of disclosing and declaring an interest under s. 5 of the
MCIA
with respect to any matter in which he knew that Loopstra Nixon was retained.
    However, given the importance of the matters related to the Plan, the appellant
    brought an application to determine whether he could participate in council
    proceedings with respect to the Di Benedetto Appeal without breaching the
MCIA
.

B.

Application Judges Decision

[6]

The application judge dismissed the application, holding that Steven
    Ferri had a pecuniary interest in the Di Benedetto Appeal, that Steven Ferris
    pecuniary interest was neither remote nor insignificant, and that a reasonable
    elector would likely conclude that the appellants deemed interest was not so
    remote or insignificant in its nature that it cannot reasonably be regarded as
    likely to influence the member.

C.

Issues

[7]

On appeal, the appellant argues that the application judge erred in
    dismissing his application by: (i) applying an overly broad definition of the
    term pecuniary interest under the
MCIA
; (ii) conflating the
    analyses required under ss. 3 and 4(k) of the
MCIA
; and, (iii) disregarding
    factors relevant to the analysis required under s. 4(k) of the
MCIA
.

[8]

For the following reasons, I would allow the appeal.

D.

Discussion

[9]

Turning first to the appellants argument that the application judge
    erred by applying an overly broad definition of pecuniary interest under the
MCIA
,
    I note that pecuniary interest is not a defined term in the
MCIA
. The
    case law establishes that a pecuniary interest under the
MCIA
is
    restricted to a financial, monetary, or economic interest: see
Mondoux v.
    Tuchenhagen
, 2011 ONSC 5398, 107 O.R. (3d) 675 (Div. Ct.), at para. 31;
Magder
    v. Ford
, 2013 ONSC 263, 113 O.R. (3d) 241 (Div. Ct.), at para. 6, leave to
    appeal to S.C.C. refused, 326 O.A.C. 400 (note).

[10]

This
    court has held that, given the purpose of the
MCIA
, what constitutes
    a pecuniary interest sufficient to trigger the provisions of the
MCIA
is not to be narrowly confined:
Orangeville (Town) v. Dufferin (County)
,
    2010 ONCA 83, 266 O.A.C. 207, at para. 22. The competing policy imperative is
    that pecuniary interest must not be construed so broadly that it captures
    almost any financial or economic interest such that it risks needlessly
    disqualifying municipal councillors, and others captured under the ambit of the
MCIA
, from participating in local matters of importance to their
    constituents. Section 4(k) of the
MCIA

operates to respond to
    this concern and ameliorate the potentially harsh effects of a broad definition
    of pecuniary interest by ensuring that pecuniary interests that are truly
    remote or insignificant are not caught under s. 5.

[11]

The
    application judge found as a fact that Steven Ferris salary, bonus and
    ongoing employment do not depend on the outcome of the Di Benedetto appeal or
    any decision by the City or the Regional council with respect to these matters.
    However, the application judge nonetheless held that Steven Ferris pecuniary
    interest was neither remote nor insignificant on the basis that it ignores
    reality to suggest that success goes unrewarded in the legal profession. The
    appellant submits that this finding was entirely speculative.

[12]

In
    the present case it is unnecessary to determine whether the appellant has a
    pecuniary interest in the Di Benedetto Appeal because the appellant conceded on
    the application that Steven Ferri has an indirect pecuniary interest in the
    outcome of the Di Benedetto Appeal. An indirect interest is defined in s. 2 of
    the
MCIA
and includes a matter in which the councillor is
a partner of a person or is in the
    employment of a person or body that has a pecuniary interest in the matter
.

[13]

Having
    made this concession on the application, the appellant cannot resile from it on
    this appeal. Although the application judge did not explicitly rely on the
    concession in reaching his conclusion that Steven Ferri has a pecuniary
    interest, his analysis was conducted in the context of the concession. In any
    event, for the reasons discussed below, I am of the view that any pecuniary
    interest is so remote or insignificant that it falls within the exception in s.
    4(k) and that, consequently, the appellant is not required to comply with the requirements
    of s. 5.

[14]

The
    appellants next submission is that the application judge conflated the
    analyses required under ss. 3 and 4(k). Specifically, the appellant argues that
    the application judge improperly imported into his s. 4(k) analysis his
    conclusions from his s. 3 analysis. I agree.

[15]

The
    application judge stated that, [i]f the interest of the child is proximate and
    significant, then, unless there is some reason to conclude otherwise, so too is
    the deemed interest of the member. The application judge erred in reaching
    this conclusion. The analysis of whether a councillors pecuniary interest is
    too remote or insignificant to be reasonably regarded as likely to influence
    that councillor cannot be premised on the notion that, unless proven otherwise,
    the councillor is fixed with the same level of proximity and significance as
    his child. The s. 4(k) analysis must commence afresh and focus on the proximity
    and significance of the councillors pecuniary interest in the context of all
    the circumstances. In my view, the application judge erred in his approach to
    s. 4(k) by reading in a rebuttable presumption.

[16]

The
    application judge compounded this error in his consideration of the factors
    relevant to the analysis required under s. 4(k) of the
MCIA
. The test
    to be applied under s. 4(k) is well established, and asks [w]ould a
    reasonable elector, being apprised of all the circumstances, be more likely
    than not to regard the interest of the councillor as likely to influence that councillors
    action and decision on the question?:
Whiteley v. Schnurr
(1999), 4
    M.P.L.R. (3d) 309 (Ont. S.C.), at p. 313;
Lastman v. Ontario
(2000),
    47 O.R. (3d) 177 (S.C.), at para. 14;
Tolnai v. Downey
(2003), 40
    M.P.L.R. (3d) 243 (Ont. S.C.), at p. 252;
Bowers v. Delegarde
(2005),
    5 M.P.L.R. (4th) 157 (Ont. S.C.), at p. 180;
Lorello v. Meffe
, 2010
    ONSC 1976, 99 M.P.L.R. (4th) 107, at para. 80;
Amaral v. Kennedy
, 2012
    ONSC 1334, 96 M.P.L.R. (4th) 49 (Div. Ct.), at para. 17;
Hazineh v.
    McCallion
, 2013 ONSC 2164, 11 M.P.L.R. (5th) 18, at para. 99;
Craig v.
    Ontario (Attorney General)
, 2013 ONSC 5349, 15 M.P.L.R. (5th) 23, at para.
    34;
Aurora (Town) v. Ontario
, 2013 ONSC 6020, 17 M.P.L.R. (5th) 188,
    at para. 38.

[17]

That
    test requires a court to consider
all
the circumstances:
Amaral
,
    at paras. 38-44;
Craig
, at para. 35. The application judge accepted
    that the same factors relevant to the Divisional Courts analysis in
Amaral
were present in the appellants case. In
Amaral
, at para. 41, these
    relevant factors included the lack of bad faith of the trustee, the number of
    years of faithful service of the trustee, the trustees long career of public
    service, and evidence that the trustee was there for her constituents and not
    for her sons.

[18]

However,
    in his reasons, the application judge expressly questioned whether the motive
    of a councillor, identified as relevant to the application of the reasonable
    elector test by the Divisional Court in
Amaral
, was appropriate to be
    considered in the analysis. The application judge stated that in this regard
Amaral
was inconsistent with the earlier Divisional Court decision of
Moll v.
    Fisher
(1979), 23 O.R. (2d) 609, where the court held that a councillors
    motive was not a relevant consideration.

[19]

There
    is no inconsistency between
Amaral
and
Moll
. In
Moll
the court was considering an earlier version of the
MCIA
that provided
    that the remoteness or insignificance of a pecuniary interest was a mitigating
    factor in determining the penal consequences of a breach of the statute.
    Therefore, under that version of the
MCIA
the court concluded that
    motive was not relevant to determining if a pecuniary interest was present. In
    contrast, under the current version of the legislation, good faith and motive
    are relevant to the question of whether a pecuniary interest is likely to
    influence the councillor, which lies at the heart of the analysis of whether a
    pecuniary interest is remote or insignificant under s. 4(k).

[20]

The
    application judge erred in concluding that
Amaral
and
Moll
are inconsistent. While the application judge indicated that he nonetheless took
    the factors identified in
Amaral
into account in his application of
    the s. 4(k) test, his lack of analysis of these and other relevant factors in
    his reasons precludes meaningful appellate review.

[21]

In
    these circumstances, it falls to this court to conduct the required analysis
    under s. 4(k). In my view, applying the relevant test, it is necessary to consider
    all the following circumstances that were established in the evidence:

·

The appellant has many years of faithful service to the
    municipality;

·

The appellant was acting in good faith and his motivation to
    participate in the issues related to the Plan are not motivated by a potential
    pecuniary benefit;

·

The appellant has been extremely vigilant and conscientious in
    declaring conflicts of interest under the
MCIA
, including sixteen
    times when Loopstra Nixon was retained on a matter, even if his son was not on
    the file;

·

The matters related to the Plan are of major public interest to
    his constituents;

·

The appellant receives no benefit from his sons compensation;
    and,

·

Steven Ferris compensation and employment do not depend on the
    outcome of the Di Benedetto Appeal or any decision of council respecting these
    matters.

[22]

In
    my view, a reasonable elector apprised of all these circumstances would not
    conclude that the appellants deemed interest in the Di Benedetto Appeal would
    be likely to influence his participation in debate or voting on the matter
    before council.

E.

Disposition

[23]

I
    would allow the appeal, set aside the order of the application judge, and grant
    the appellant an order declaring that his deemed pecuniary interest in the Di
    Benedetto Appeal and related matters is sufficiently remote or insignificant in
    its nature that it cannot reasonably be regarded as likely to influence the Appellant.
    I note that this decision applies only to the Di Benedetto Appeal and related
    matters and does not affect the right of any person under the
MCIA
to
    raise other potential conflicts of interest related to other matters, including
    other matters where Loopstra Nixon or Steven Ferri are retained.

[24]

Since
    this matter was unopposed, the respondent taking no position and filing no
    materials, the issue of the costs of this appeal does not arise.

Released: October 8, 2015 CWH                C.W.
    Hourigan J.A.

I
    agree E.A. Cronk J.A.

I
    agree M. Tulloch J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Hodgson v. Johnston, 2015 ONCA 731

DATE: 20151029

DOCKET: M45435 (C60746)

Feldman, Lauwers and Benotto JJ.A.

BETWEEN

Sheri Hodgson and Frank Watt

Moving Party (Appellants)

and

Emary Johnston

Responding Party (Respondent)

and

Jason Mamounis

Responding Party (Respondent)

Sarah Young, for the appellants

Farrah Hudani, for the respondent, Emary Johnston

Jonathan Kline, for the respondent, Jason Mamounis

Heard: October 27, 2015

On a motion for a review of the order of Roberts J.A., dated
    August 12, 2015, granting a stay of the order of Gunsolus J., dated June 29,
    2015.

ENDORSEMENT

[1]

The maternal grandparents of an 8-year-old child brought an application
    for an order granting them custody. In the course of the application, the
    grandparents moved for interim custody in order to prevent the mothers
    intended move to British Columbia with her child.

[2]

Gunsolus J. dismissed the motion, awarded custody to the mother allowing
    her to move with her child, on consent of the father, to British Columbia. The
    grandparents were granted access to the child at various times during the year,
    including every July, and every other Christmas break and March break.

[3]

The grandparents
    appealed the order to this court. The appeal is scheduled to be heard on
    November 24, 2015. At the same time, the grandparents brought a motion for a
    stay of the custody order pending appeal. The stay was granted.

[4]

The grandparents filed extensive affidavit evidence in support of their
    motion for a stay. The mother did not. Instead, the mother properly relied on
    the material filed before the motion judge in the court below.

[5]

When the motion judge in this court granted the stay of the custody order,
    she had a misleading record before her. The record should have consisted of the
    evidence before the motion judge below, unless the fresh evidence met the test
    in
R. v. Palmer
, [1980] 1 S.C.R.
    759
.

[6]

A judge hearing a motion for a stay of an order must consider and
    balance three factors: (1) whether there is a serious issue to be tried on the
    appeal; (2) the risk of irreparable harm if the stay is or is not granted; and
    (3) whether the balance of convenience favours a stay.

[7]

In a custody case, these factors are also informed by a consideration of
    whether a change in custody was ordered in the court below.  A stay should
    arise from the need to preserve the status quo or on proper fresh evidence
    under the
Palmer
test. Here, it did not.

[8]

The evidence before the motion judge below was that the mother had a
    plan of care, family connections in British Columbia and a stable employment
    opportunity. The judge found that the mother had been the primary caregiver.
    His reasons for decision include the following statements:

·

Theres no evidence that [the
    mother] ever abdicated her position as mother, but has used the extended family
    safety net extensively.

·

Nowhere in the materials is
    there any evidence that [the mother] is not a capable, loving, mother.

·

There is no evidence that the
    move will put [the child] in any danger.

·

In quoting another case, he
    said: The ultimate test is the best interests of the child.

[9]

It was not appropriate on a stay motion to reverse the factual findings
    of the motion judge in the decision under appeal, particularly on the basis of
    additional evidence filed on the motion for a stay that did not meet the Palmer
    test.

[10]

We
    find that the test for a stay was not met. As a result, the order granting a
    stay of the custody order is set aside. The mother  whose position was
    supported by the father  has undertaken to this court to remain in Fenelon
    Falls until the disposition of the appeal.

[11]

The
    costs of this motion are reserved to the panel hearing the appeal.

K. Feldman J.A.

P. Lauwers J.A.

M.L. Benotto
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Holgate v. Sheehan Estate, 2015 ONCA 717

DATE: 20151027

DOCKET: C59988

Cronk, Hourigan and Benotto JJ.A.

BETWEEN

Stephen Craven Holgate and John Edward Holgate

Plaintiffs (Appellants)

and

The Estate of May Sheehan, the Estate of John
    Holgate, and Jo-Ellen Victoria Buss

Defendants (Respondents)

Ronald Petersen, for the appellants

Paul A. Dancause, for the respondents

Heard: September 21, 2015

On appeal from the orders of Justice Robert Beaudoin of
    the Superior Court of Justice, dated January 6, 2015 and February 26, 2015,
    with reasons reported at 2015 ONSC 259, 248 A.C.W.S. (3d) 733 and 2015 ONSC
    1213, 250 A.C.W.S. (3d) 180.

Benotto J.A.:

Overview

[1]

This appeal concerns the interpretation of the will and codicil of the
    late John Holgate.

[2]

When John Holgate and May Sheehan married, they each had children from
    previous marriages.
[1]

[3]

Mr. Holgate, a lawyer and magistrate, made a will and a codicil that provided
    for Mrs. Holgate to have a life interest in two trusts. After his death, Mrs.
    Holgate used money from the trusts for her expenses. It is alleged that she
    also saved money.

[4]

When she died in 2012, Mrs. Holgate left the bulk of her estate to her
    biological children. Mr. Holgates sons alleged that Mrs. Holgate violated the
    terms of the trusts by accumulating wealth. They took the position that the
    life interest she received from their father allowed her to
use
money
    but not
save
it.

[5]

Mr. Holgates sons brought an action against their fathers estate, Mrs.
    Holgates estate and Mrs. Holgates daughter personally. They sought an
    accounting, a freezing of funds and general damages of $5,000,000. They also sought
    a declaration that they are entitled to a resulting or constructive trust
    interest in both estates.

[6]

The action proceeded to trial. After three days of evidence, the trial
    judge indicated that a critical issue had to be determined with respect to
    the interpretation of Mr. Holgates will and codicil. He invited counsel to
    bring a mid-trial motion either for determination of an issue under r. 21.01(1)(a)
    or for directions under r. 75.06(3), both under the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194.

[7]

Counsel agreed to bring a r. 21 motion before the trial judge to
    determine whether the provisions of either trust precluded Mrs. Holgate from
    accumulating wealth. The question of law (set out below) was drafted and agreed
    to by counsel.

[8]

The trial judge heard the motion and concluded that nothing in the will
    or codicil prevented Mrs. Holgate from accumulating wealth.

[9]

Mr. Holgates sons appeal on two grounds:

1.
        The trial judge erred in his interpretation of the trusts; and

2.     The trial judge had no jurisdiction to hear a r. 21
    motion during the trial and further, by doing so, erred in considering evidence
    from the trial.

[10]

Mr.
    Holgates sons also seek leave to appeal the trial judges award of costs. They
    submit that costs should have been paid by the estate and in the alternative,
    that the costs award is excessive.

[11]

I
    agree with the trial judges interpretation of the provisions of the will and
    codicil. I do not accept that he lacked jurisdiction to conduct the r. 21
    motion. Further, I see no reason to interfere with the costs order.

Interpretation of the Trusts

[12]

The
    will and codicil established two trusts: the Holgate Trust and the U.K.
    Trust. Mrs. Holgate and Robert Joseph Irving (Mr. Holgates solicitor) were
    appointed trustees.

[13]

The
    Holgate Trust provided as follows:

To hold and keep invested the residue of my estate or the
    amount thereof remaining for the sole
use
and
    benefit of my wife, MAY HOLGATE, during her lifetime, with power and authority
    to my Trustee to draw on both the income and the capital of my estate for the
    care and support of my said wife, as my Trustee in their discretion considers
    advisable. In availing themselves of this discretionary power to encroach on
    the capital of my estate for my wifes benefit, it is my strong wish and desire
    that at all times my Trustees first consideration shall be my wifes
    well-being and comfort and that all her needs and requirements of every kind
    shall be provided for adequately in all respects out of my estate, as I do not
    feel that my estate need be largely conserved for the future use of my children
    and step-children. I therefore authorize and empower my Trustee to be generous
    in the exercise of this discretionary authority, even though there may be a
    considerable, or if necessary, total depletion of the capital of my estate by
    reason of such encroachments. [Emphasis added.]

[14]

The
    U.K. Trust provided as follows:

To hold all my interest in real and personal property situated
    in the United Kingdom for the sole
use
and benefit
    of my wife MAY HOLGATE, during her lifetime, with power and authority to my
    Trustee to draw on the income, (but not the capital) of the said real and
    personal property for the use and benefit of my said wife, and on her death to
    pay or transfer to such of my sons, JOHN EDWARD HOLGATE and STEPHEN CRAVEN
    HOLGATE, who shall survive me, and if more than one (1) in equal shares between
    them, whatever interest I may have in the said real and personal property, both
    income remaining and capital. [Emphasis added.]

[15]

The
    foundation of the appellants submission is based on the word use. They
    submit that, with respect to both trusts, Mrs. Holgate was entitled to use
    the money. In that regard, they acknowledge there were no limitations. However,
    they argue that, by saving money, Mrs. Holgate was not using it. They submit
    that the purpose of the life interest was to preserve capital for the remainder
    beneficiaries. Otherwise, there would be an absolute gift.

[16]

Dealing
    first with the Holgate Trust, the trial judge concluded that Mr. Holgates
    intention was clear  there was no restriction on Mrs. Holgates ability to
    save money. The will stipulated that she have all her needs and requirements
    of every kind provided for adequately and in all respects out of the
    estate. It also stipulated that the estate did not need to be conserved for Mr.
    Holgates children and step-children.  A considerable or total depletion of the
    capital of the estate was contemplated.

[17]

The
    will contained no limitations on the use of income, no requirement to
    recapitalize unused income, and no requirement for Mrs. Holgate to look to her
    own resources before accessing trust income. The language of the will,
    according to the trial judge, came as close as possible to conferring an
    absolute gift on Mrs. Holgate of the entire residue.

[18]

Turning
    to the U.K. Trust, the trial judge concluded that there were no limitations
    placed on the use of the assets. He determined that the codicil demonstrated
    Mr. Holgates wish to provide his widow with enough funds for her lifetime.
    Significantly, the codicil revoked a prior provision of the will that made a
    gift of the U.K. assets to his sons.

[19]

I
    agree with the interpretation of the trial judge. It has long been the case
    that [t]he golden rule in interpreting wills is to give effect to the
    testators intention as ascertained from the language that was used: see
Dice
    v. Dice Estate
, 2012 ONCA 468, 111 O.R. (3d) 407, at para. 36. Both trusts
    indicate an intention that there be no limitation on the discretion of the
    trustees to draw on income or (in the case of the Holgate Trust) to encroach on
    capital, and that there be no prohibition on accumulating funds.

[20]

In
    the Holgate Trust, the words care and support and well-being and comfort appear
    in the context of the following phrases used by Mr. Holgate:

·

for the sole use and benefit of my wife;

·

power and authority to my Trustee
    to draw on both the income and the capital of my estate for the care and
    support of my said wife, as my Trustee in their
(sic)
discretion
    considers advisable;

·

it is my strong wish and desire
    that at all times my Trustees first consideration shall be my wifes
    well-being and comfort and that all her needs and requirements of every kind
    shall be provided for adequately in all respects out of my estate;

·

I do not feel that my estate need
    be largely conserved for the future use of my children and step-children; and

·

I therefore authorize and empower
    my Trustee to be generous in the exercise of this discretionary authority, even
    though there may be a considerable, or if necessary, total depletion of the
    capital of my estate by reason of such encroachments.

[21]

These
    words and phrases indicate a clear intention on Mr. Holgates part to allow his
    wife unrestricted access to the funds. Likewise in the U.K. Trust, there are no
    words of limitation regarding access to and use of income; the trustees are empowered
    to draw on the income of the estate for the use and benefit of Mrs. Holgate.

[22]

The
    appellants submit the trial judge failed to distinguish between Mrs. Holgates
    roles as beneficiary and trustee. This matter was not an interpretive issue
    before the court in accordance with the agreed upon question of law, which read:

Having regard to the totality of the wording of the last Will
    and Testament of John Holgate, dated November 20, 1991 and the codicil of John
    Holgate dated July 24, 1992; and in particular, paragraph 3(c)(iii) of the Will
    as prescribed in the codicil and paragraph 3(d) of the Will, do the words of
    the Will of John Holgate preclude his widow the late May Holgate (Sheehan) from
    accumulating wealth in her own name from the two trusts created by the Will?

[23]

The
    only issue before the trial judge was the interpretation of the will and
    codicil. The accounting issues, if any, are matters for trial, which  regrettably
     has not yet taken place.

Jurisdiction: The Rule 21 Motion

[24]

The
    appellants submit that the trial judge had no jurisdiction to hear the mid-trial
    motion because r. 21 provides that the motion is to be brought before trial
    and because no evidence was admissible on the motion.

[25]

I
    deal first with the timing of the motion. The trial judge appears to have
    raised the possibility of a mid-trial motion on his own initiative. He referred
    to the provisions of r. 1.04(1), which direct the court to secure the most
    expeditious and least expensive determination of the issues in the case.

[26]

The
    appellants consented to the process without objection about the timing. They also
    participated in the drafting of the question to be answered. Insofar as the
    result was not what they hoped for, they cannot now claim lack of jurisdiction:
    see
Harris v. Leikin Group Inc
., 2014 ONCA 479, 120 O.R. (3d) 508, at
    para. 53. Given the consent of all counsel and the provisions of r. 1, there
    was no lack of jurisdiction.

[27]

The
    appellants also submit that the trial judge improperly relied on assertions
    made by the respondents when interpreting the will. I do not agree. The trial
    judge made it clear that he attributed the information to the parties but grounded
    his decision on the wording of the will and codicil, not on the evidence at
    trial.

[28]

The
    issues raised by the appellants  albeit unsuccessfully  demonstrate the
    challenges and potential pitfalls involved when a r. 21 motion is entertained
    by a trial judge.

[29]

In
    this case, the trial judges initiative in inviting a mid-trial r. 21 motion
    was clearly designed to narrow the issues and streamline the trial.  These
    objectives are commendable. Unfortunately, however, the initiative produced the
    opposite result. The mid-trial motion resulted in a bifurcated trial, created
    the possibility for two appeals to this court arising from the same proceeding,
    and caused the completion of the trial to be delayed pending the outcome of
    this appeal.

[30]

There
    is an additional concern.  A r. 21 motion concerning a question of law is based
    on the pleadings.  Evidence is not admissible except on consent or with leave
    of the court.  When a r. 21 motion is conducted by a trial judge after the
    evidentiary phase of the trial has commenced, there is a risk that incomplete
    or untested evidence can inadvertently seep  or be seen to seep  into the
    consideration of the motion on its merits.  While I am  satisfied that this did
    not occur in this case, the danger is nonetheless real.

[31]

For
    these reasons, the preferable procedure for the trial judge would have been to
    determine the question of law at the conclusion of the trial, based on all the
    evidence and submissions, and address the issue in the reasons for judgment for
    the trial as a whole.

Costs of the Motion

[32]

I
    would grant leave to appeal costs, but dismiss the appeal as to costs. I  see
    no reason to interfere with the motion judges discretionary decision that the
    appellants pay the costs of the motion as opposed to the estate. Nor do I see a
    reason to interfere with the quantum of costs ordered.  The trial judges costs
    ruling is neither plainly wrong nor tainted by an error in principle.

Disposition

[33]

For
    the reasons given, I would dismiss the appeal.  I would award the costs of the
    appeal to the respondents, fixed in the amount of $8,500, inclusive of
    disbursements and HST.

Released: October 27, 2015

M.L. Benotto J.A.

I agree  E.A. Cronk
    J.A.

I agree C.W.
    Hourigan J.A.

[1]
May Sheehan is referred to as May Holgate or Mrs. Holgate in this decision.


COURT OF APPEAL FOR ONTARIO

CITATION: Latouche (Re) 2015 ONCA 675

DATE: 20151006

DOCKET: C59750

Strathy C.J.O., MacPherson J.A. and Speyer J. (
Ad
    Hoc
)

IN THE MATTER OF:  Cameron Latouche

AN APPEAL UNDER PART XX.1 OF THE
CODE

Gavin S. MacKenzie, for the appellant Person in charge
    of Centre for Addiction and Mental Health

Maureen Addie, for the respondent Cameron Latouche

Stacey D. Young, for the respondent Crown

Heard: October 2, 2015

On appeal against the disposition of the Ontario Review
    Board dated November 21, 2014.

ENDORSEMENT

[1]

In a Disposition dated November 21, 2014, the Ontario Review Board
    (ORB) ordered that the respondent Cameron Latouche be absolutely discharged.
    In its reasons supporting the Disposition, the ORB said:

Having considered all of the evidence, we are not satisfied
    that the evidence supports a finding that Mr. Latouche remains a significant
    threat to public safety. Under these circumstances we are obliged to grant Mr.
    Latouche an Absolute Discharge.

[2]

On December 16, 2014, the appellant hospital appealed the ORBs
    Disposition. The appeal is an unusual one, as reflected in these paragraphs in
    the Notice of Appeal:

5.      The appellant does not allege the Boards decision
    to absolutely discharge the Appellant was unreasonable or tainted by legal
    error.

6.      There have been significant developments with
    respect to Mr. Latouche since he was absolutely discharged.

7.      The appellant takes the position that in light of
    these developments Mr. Latouche currently meets the threshold for significant
    threat to public safety.

8.      The appellant will bring a motion for fresh
    evidence pursuant to s. 672.73 of
Criminal Code
in support of this appeal.

[3]

The hospital made an application to this court to stay the ORBs
    Disposition of absolute discharge pending the hearing of this appeal. In an
    Order dated February 4, 2015, Hoy A.C.J.O. granted the application and
    reinstated the ORBs previous Disposition dated December 19, 2013 which
    detained the appellant in the General Forensic Unit of CAMH, with privileges up
    to living in the community in approved accommodation. In her reasons, Hoy
    A.C.J.O. stated:

Admissible fresh evidence establishes that promptly after being
    discharged, the Respondent resumed marijuana use and engaged in threatening
    behaviour. The respondent has been arrested three times since his discharge. He
    has been charged twice with threatening death and has been charged once with
    assault of a peace officer and failure to comply with a recognizance.

[4]

On March 25, 2015, the ORB reviewed the appellants restriction of
    liberty pursuant to s. 672.81(2.1) of the
Criminal Code
. On March 30,
    2015, the ORB ruled that the restriction of the appellants liberty was
    warranted and in the circumstances of this case represented the least onerous
    and least restrictive decision.

[5]

The appellant has remained at CAMH since February 4, 2015.

[6]

On this appeal, the hospital relies entirely on fresh evidence relating
    to the appellants conduct during the six weeks he lived in the community after
    his absolute discharge and his conduct at CAMH since the resumption of his
    detention there. As mentioned above, the appellant does not challenge the
    merits of the November 21, 2014 Disposition of the ORB.

[7]

Section 672.73 of the
Criminal Code
provides that an appeal
    against a disposition order shall be based on a transcript of the proceedings
    and any other evidence that the court of appeal finds necessary to admit in the
    interests of justice. In
R. v. Owens
, 2003 SCC 33, the court
    indicated that fresh evidence concerning events that postdate the disposition
    order may be admitted where the evidence is trustworthy and touches on the
    issue of risk to public safety (paras. 48-61 and 71). The fresh evidence is
    not limited to the appellant. All parties may proffer fresh evidence: see
R.
    v. Furlan
, 2014 ONCA 740, at paras. 8-10.

[8]

In this appeal, the hospital tendered fresh evidence through affidavits
    by Dr. Padraig Darby, a psychiatrist and the Person in Charge of CAMH, and Dr.
    Virginia Duff, one of the appellants treating psychiatrists. The respondent
    filed fresh evidence through Veronica Yuen, the appellants counsels legal
    assistant.

[9]

The import of the fresh evidence tendered by the hospital is
    overwhelming. Sadly, the appellants good behaviour at CAMH which led to the
    absolute discharge in November 2014 disintegrated very soon after his release.

[10]

The
    fresh evidence documents the following. Since his absolute discharge, the
    respondent has engaged in conduct that has led to three different sets of
    criminal charges, including five counts of threatening death (involving at
    least two incidents), assaulting a court officer, and breach of recognizance.
    He faces three trials on these charges. In addition, the appellant has
    regularly acted in an aggressive and intimidating manner towards CAMH staff and
    co-patients since his return to the hospital. He has been placed in locked
    seclusion for numerous periods in recent months.

[11]

The
    respondent has also tendered fresh evidence consisting of, essentially,
    doctors and staff reports about the respondents condition and behaviour in
    the period from June 1 to September 11, 2015. Although these updates are useful
    and include material that might be relevant to CAMHs treatment of the
    respondent going forward, they do not reduce by much the respondents very
    troubling behaviour and actions since December 2014.

[12]

In
    the end, we accept the conclusion reached by Dr. Darby in his affidavit:

Absent the supervision and oversight of an ORB disposition, I
    believe there is a foreseeable and substantial risk that Mr. Latouche would
    commit a criminal offence that causes serious physical or psychological harm to
    a member of the public.

At this time, I believe that Mr. Latouches risk to public
    safety can only be managed on an in-patient basis.

[13]

We
    note that Dr. Duff, the respondents treating psychiatrist whose highly
    favourable report anchored the ORBs reasons for granting an absolute discharge
    in November 2014, now shares Dr. Darbys opinion.

[14]

The
    appeal is allowed. It is ordered that the ORB conduct a new and expedited hearing
    within 60 days and make a new disposition order. Until that order is made, the
    ORB disposition order dated March 30, 2015 remains in effect.

G.
    R. Strathy C.J.O.

J.C.
    MacPherson J.A.

C.M.
    Speyer J. (
Ad Hoc
)


COURT OF APPEAL FOR ONTARIO

CITATION: Lochner v. Toronto (Police Services), 2015 ONCA 703

DATE: 20151020

DOCKET: C60123

Gillese, Pepall and Lauwers JJ.A.

BETWEEN

Silvano Lochner

Plaintiff (Appellant)

and

Toronto Police Services Board, Detective Alex
    Will (Badge No. 362), and Chief of Police William Blair

Defendants (Respondents)

Silvano Lochner, acting in person

Robert L. Love and Damian Hornich, for the respondents

Heard: September 11, 2015

On appeal from the judgment of Justice James M. Spence of
    the Superior Court of Justice, dated February 12, 2015.

COSTS ENDORSEMENT

[1]

By endorsement dated September 17, 2015, this court dismissed Mr.
    Lochners appeal and indicated that if the respondents sought costs, they were
    to file written submissions within 10 days of the date of release of the
    endorsement.  The endorsement further provided that Mr. Lochner was to file any
    response no later than 15 days after the date of release of the endorsement.

[2]

We have now received the respondents written submissions.  We have
    received nothing in writing from Mr. Lochner.

[3]

As the respondents were fully successful on the appeal, we are satisfied
    that costs should follow the event, on a partial indemnity basis.

[4]

Accordingly, costs of the appeal fixed in the sum of $5,000, all
    inclusive, are ordered in favour of the respondents.

E.E. Gillese J.A.

S.E.
    Pepall J.A.

P.
    Lauwers J.A.