COURT OF APPEAL FOR ONTARIO

CITATION:
TPG
    Technology Consulting Ltd. v. Canada
(Industry Canada), 2012 ONCA 87

DATE: 20120208

DOCKET: C54240

Sharpe, Blair and Rouleau JJ.A.

BETWEEN

TPG Technology Consulting Ltd. and Donald Powell

Plaintiffs (Appellants)

and

Her Majesty the Queen in Right of Canada as
    represented by the Minister of Industry Canada and as represented by the
    Competition Bureau of Canada, John Pecman, Sheridan Scott and Stephen
    Fitzpatrick

Defendants (Respondents)

Charles Gibson for TPG Technology Consulting Ltd.

Alexandre Kaufman, for the Her Majesty the Queen in
    Right of Canada

Heard: January 6, 2012

On appeal from the order of Justice Stanley Kershman of
    the Superior Court of Justice, dated July 28, 2011, with reasons reported at
    2011 ONSC 4604, [2011] O.J. No. 3511.

Sharpe J.A.:

[1]

The issue on this appeal is whether the motion judge erred by striking
    out a defamation claim on a rule 21.01(1) pleadings motion on the ground that
    the allegedly defamatory words are not capable of bearing defamatory meaning.

[2]

The appellants claim arises out of a bid-rigging investigation and
    inquiry conducted by the Competition Bureau that led to charges against the
    appellants and several other parties under the
Competition Act
, R.S.C.
    1985, c. C-34, s. 47. In their amended statement of claim, the appellants
    allege that the charges, and the manner in which the charges were announced to
    the public, were part of a deliberate and malicious effort by the respondents
    to discredit and harm the appellants. The respondents say that they merely
    reported the fact that the appellants had been charged with bid-rigging and
    that the statements are not capable of bearing a defamatory meaning.

FACTS

[3]

The appellant TPG Technology Consulting Ltd. (TPG) specializes in
    providing professional information technology (IT) services to public and
    private corporations and has been a major supplier of IT services to the
    federal government. The appellant Powell is the sole shareholder of TPG.

[4]

In 2006, the Competition Bureau commenced an inquiry into bid-rigging
    allegations against fourteen individuals and seven companies, including the
    appellants. The appellants and others were suspected of coordinating their bids
    for IT service contracts with the federal government in violation of the
Competition
    Act
. On February 17, 2009, at the request of the Competition Bureau, the
    Attorney General filed criminal charges against the suspected companies and
    individuals. On that same day, the Bureau announced the charges in a press
    release on its website. The website provides details regarding the
Competition
    Act
and the type of conduct it seeks to deter. Media outlets published a
    number of articles regarding the Bureaus inquiry into the appellants conduct
    based on information posted on the Bureaus website.

[5]

In their amended statement of claim, the appellants allege that the
    Bureau defamed them in two separate ways:  (i) in their own internet postings;
    and (ii) by providing information that formed the basis of various media publications.

[6]

The alleged defamatory words that have been disseminated on the Bureaus
    website:

A
s a result of the agreement, the bidders were
    allegedly

able to maximize the
    rates at which services were to be provided to the various departments.

the Bureaus best weapons to combat these
    secret criminal anti-competitive agreements.

Some recent studies suggest that in cases
    where bid- rigging occurs, the price paid for the good or service typically
    increases by about 20 percent.

The Bureau found evidence indicating that
    several IT services companies in the National Capital Region secretly
    coordinated their bids in an illegal scheme to defraud the government by
    winning and dividing contracts, while blocking out honest competitors.

Bid-rigging is a criminal offence where
    bidders secretly agree not to compete or to submit bids that have been
    pre-arranged among themselves.  Their goal is to thwart the competitive
    tendering process and inflate prices to purchasers.

Bid-rigging charges under s. 47 of the Competition Act. Charges
    laid against 7 companies and 14 individuals based on allegations that the
    parties entered into agreements to coordinate their bids in an illegal scheme
    to defraud the government by winning and dividing contracts for information
    technology services

[7]

Similar statements were published by various media outlets in Ontario,
    and in other provinces, allegedly as a result of the information provided by
    the respondents. The media reports stated,
inter alia
, that:

bid-rigging is a lot like price-fixing - with the aim of
    secretly agreeing to get as much money as possible out of each contract. The
    bureau says it can inflate prices by as much as 20%.

an illegal scheme to defraud the government by winning and
    dividing contracts, while blocking out honest competitors.

In a statement, the interim Commissioner of Competition said
    the alleged infractions increased the final price of the services to the
    government.

[8]

The amended statement of claim also asserts a claim of abuse of public
    office. The appellants allege that the investigation and bid-rigging charges,
    and the dissemination of the defamatory statements, were a direct response to a
    lawsuit commenced by the appellant TPG against Public Works Government Services
    of Canada. The lawsuit alleges irregularities during a bidding process in which
    CGI, one of TPG's competitors, was selected as the supplier of services
    previously supplied by TPG. The appellants further allege that the
    investigation, charges, and dissemination of the defamatory statements, were an
    intimidation tactic in response to the appellant Powells testimony before a
    Parliamentary standing committee alleging that the Minister of Public Works was
    guilty of conflict of interest in relation to the CGI contract.

ISSUES

1.       Did
    the motion judge err in striking out the defamation claim under rule 21.01 on
    the ground that the impugned statements are not capable of bearing defamatory meaning?

2.       Is
    the defamation claim arising from alleged defamatory statements in Ontario media
    barred because the appellants failed to give timely notice pursuant to the
Libel
    and Slander Act
, s. 5(1)?

ANALYSIS

1.

Did the motion judge err in striking out the
    defamation claim under rule 21.01 on the ground that the impugned statements
    are not capable of bearing defamatory meaning?

[9]

It is well-established that it is only where it is plain and obvious
    that the impugned statement is not capable of bearing defamatory meaning that a
    motion under rule 21.01 will succeed:
Mantini v. Smith Lyons LLP
(2003), 64 O.R. (2d) 516 (C.A.).

[10]

The motion
    court judge appropriately characterized the issue, at para. 18 of his reasons,
    as whether the respondents went beyond simply stating that the [appellants]
    had been charged with bid-rigging; specifically, did they imply that the
    plaintiffs engaged in conduct more serious and blameworthy than bid-rigging.

[11]

A report
    that someone is under investigation or that they have been arrested for, or
    charged with, a criminal offence is not considered the equivalent of saying
    that the person has committed the crime unless there is something in the
    language of the report that suggests the plaintiffs guilt: Raymond E. Brown,
Brown
    on Defamation
, loose-leaf, (Toronto: Carswell, 2011), ch.4 at pp. 4-165 to
    4-166; Roger D. McConchie & David A Potts,
Canadian Libel and Slander
    Actions
, (Toronto: Irwin Law Inc., 2004) at p. 516.  However, reports of
    arrest or charges will be capable of conveying a defamatory meaning, where it
    is stated, either directly or by clear implication, that an offence has been
    committed, and the qualifications contained in any of the surrounding
    statements are not sufficient to outweigh or nullify the effect of what appears
    to be a plain statement of fact:
Shave v. West Australian Newspapers Ltd.,
[2000] W.A.S.C. 172 (S.C.) at para. 29.

[12]

A
    distinction is drawn between reports which are thought to do no more than
    state that a person is under investigation or has been charged with a criminal
    offence and reports which assert directly, or by clear implication, that the
    plaintiff has been involved in acts amounting to a criminal offence; the
    former are generally not considered capable of a defamatory meaning while the
    latter are:
Shave v. West Australian Newspapers Ltd.
, [2000] W.A.S.C.
    172 (S.C.) at para. 28; Raymond E. Brown, Brown on Defamation, ch.4 at 4-168.

[13]

The law in
    this area has been most clearly articulated in the Australian case,
Mirror
    Newspapers Ltd. v. Harrison
[1982] HCA 50; (1982) 149 C.L.R. 293, per
    Mason J. at pp. 300-01:

The ordinary reasonable reader is mindful of the principle that
    a person charged with a crime is presumed innocent until it is proved that he
    is guilty. Although he knows that many persons charged with a criminal offence
    are ultimately convicted, he is also aware that guilt or innocence is a
    question to be determined by a court, generally be a jury, and that not
    infrequently the person charged is acquitted.

A distinction needs to be drawn between the readers
    understanding of what the newspaper is saying and judgments or conclusions
    which he may reach as a result of his own beliefs and prejudices. Its one
    thing to say that a statement is capable of bearing an imputation of defamatory
    of the plaintiff because the ordinary reasonable reader would understand it in
    that sense, drawing on his own knowledge and experience of human affairs in
    order to reach that result. It is quite another thing to say that a statement
    is capable of bearing such an imputation merely because it excites in some
    readers a belief or prejudice from which they proceed to arrive at a conclusion
    unfavourable to the plaintiff. The defamatory quality of the published material
    is to be determined by the first, not by the second, proposition.

[14]

The
    question in this case is, therefore, do the statements complained of go beyond
    simply stating that the appellants have been charged with a criminal offence?
    For the following reasons, I conclude that when the amended statement of claim
    is fairly read as a whole, the question of whether the impugned statements are
    capable of bearing a defamatory meaning raises issues of fact that are not
    susceptible of being determined on a pleadings motion.

[15]

The motion
    judge appears to have failed to distinguish between the two stages of the
    process to be followed when determining whether the impugned statements were
    capable of defamatory meaning. The first stage requires a determination of whether
    the impugned expression is
capable
of bearing a defamatory meaning.
    This is a question of law and has been referred to as the gatekeeper function:
    see
Mantini v. Smith Lyons LLP
(2003), 64 O.R. (3d) 516 at para. 11;
Laufer
    v. Bucklaschuk
(1999), 181 D.L.R. (4
th
) 83 (Man. C.A.) at para.
    25, leave to appeal to SCC refused (2000), 189 D.L.R. (4
th
) vii
    (S.C.C.); Roger D. McConchie & David A Potts,
Canadian Libel and
    Slander Actions
, at p.

295.

[16]

The
    question of whether the words
actually conveyed
those meanings, on the
    other hand, is a question of fact: see, for example,
Young v. Toronto Star
    Newspapers Ltd.
(2005), 259 D.L.R. (4
th
) 127 (Ont. C. A.) at para.
    68;
Laufer v. Bucklaschuk
(1999), 181 D.L.R. (4
th
) 83 (Man.
    C.A.) at para. 25, leave to appeal to SCC refused (2000).

[17]

The motion
    judge did not advert to the two-stage process and appears to me to have
    conflated the initial threshold legal issue with the second factual issue that
    properly belonged to the trier of fact. He concluded, at para 23, that the
    Bureaus statement that the appellants objective was to maximize the rate they
    would charge for their services [was] a fair characterization of what the
    plaintiffs sought to achieve by engaging in bid-rigging. Similarly, at para.
    24, the motion judge found that statements to the effect that the appellants
    had secretly coordinated their bids to illegally defraud the government was
    a fair characterization of the charges to which [sic] the plaintiffs were
    accused.

[18]

In my
    view, in the context of this case, the question whether the statements made by
    the respondents were a fair characterization of the charges against the
    appellants involved issues of fact and belongs to the second stage of the
    two-stage analysis. It was not appropriate for the motion judge to make those findings
    on the material before him on a rule 21.01(1) motion.

[19]

It is
    common ground that to establish bid-rigging, the Crown does not have to prove
    that prices were inflated or that anyone was defrauded. While avoidance of
    inflated prices and fraud are undoubtedly the underlying rationale for the
    creation of the offence of bid-rigging, they are not ingredients or elements of
    the offence.

[20]

In the
    amended statement of claim, the appellants specifically deny that prices were
    inflated or that the government was defrauded. The appellants also allege that
    the respondents made these statements despite their knowledge that these
    allegations are unfounded and that [t]he purpose of the defamatory statements
    was to discredit and attack the credibility of the [appellants] and to damage
    the [appellants] ongoing business with the Government of Canada.

[21]

Moreover,
    it would appear that at the appellants upcoming trial, neither fraud nor
    inflated prices will form any part of the Crowns case. The reasons of the
    preliminary inquiry judge committing the appellants for trial quote the theory
    advanced by the Crown:

The theory of the Crown is that the accused decided to unify
    their efforts to win all the contracts from various RFPs. To achieve that
    result, they would participate in numerous meetings, communicate (orally and in
    writing), share information about technical requirements and pricing of bids,
    delegate to each other a role in the preparation of the bids, maintain a
    tracking list which identifies the parties, the winning RFPs, their
    resources, the prices, the contracts awarded, and acted collectively in responding
    to the authorities or in dealing with the contracts awarded.

[22]

It is also
    important to read the statement of claim as a whole. The defamation claim is
    closely linked to the abuse of public office claim. The appellants allege that
    the statements supporting the defamation claim were part and parcel of a
    deliberate and malicious attempt to discredit them and to intimidate them so
    that they would not continue their lawsuit alleging that the government and the
    Minister of Public Works acted in conflict of interest.

[23]

We are,
    then, left with this. It is at least arguable that the impugned statements suggest
    that the appellants were guilty of fraud and price inflation. These allegations
    need not be proven as elements of the offences charged, nor did they form any
    part of the case that the Crown led at the preliminary inquiry. They are also strenuously
    denied by the appellants, who plead that they are part of a deliberate and
    malicious attempt to discredit and harm the appellants.

[24]

When that
    entire context is taken into account, it is my view that it cannot be said that
    it is plain and obvious that the impugned statements are not capable of bearing
    a defamatory meaning. The determination of that issue is better left to trial
    on a full factual record.

[25]

I hardly
    need add that I make no comment as to whether there is any basis in fact for
    these very serious allegations. What I will say, however, is that at this stage
    of the proceedings when we only have before us the appellants version of the
    facts, these are not matters that can be resolved on a pleadings motion and
    that the best and fairest course is to allow the entire matter to proceed to
    trial.

2.  Is the defamation claim arising from alleged
    defamatory statements in Ontario media barred because the appellants failed to
    give timely notice pursuant to the Libel and Slander Act, s. 5(1)?

[26]

As I have already noted, the amended statement of claim alleges that
    the respondents provided the media with false and defamatory information about
    them which formed the basis of several media articles. Several of the publications
    in which the allegedly defamatory statements appeared are Ontario publications.
    In response to a request to admit, the appellants admitted that they did not
    provide notice of their claim pursuant to s. 5 (1) of the
Libel and
    Slander Act
, R.S.O. 1990, c. L-12, which states:

Notice of action

(1)  No action for libel in a newspaper or in a broadcast lies
    unless the plaintiff has, within six weeks after the alleged libel has come to the
    plaintiffs knowledge, given to the defendant notice in writing, specifying the
    matter complained of, which shall be served in the same manner as a statement
    of claim or by delivering it to a grown-up person at the chief office of the
    defendant.

[27]

As the motion judge struck the entire defamation
    claim, he did not deal with this issue.

[28]

The appellants argue that no notice was required
    on the ground that their claim is for slander for transmitting words to the
    media rather than for the publication of the words by the media.

[29]

I am unable to accept that submission.

[30]

In my view, it is clear from the amended
    statement of claim that the appellants did not plead a claim for slander. That
    claim would necessarily be limited to damages flowing from the communication
    and not include damages flowing from the publications that followed. Rather,
    the appellants are alleging that the respondents were the source of the
    allegedly defamatory information that was published by the media and which,
    they say, caused damage to their reputation. As framed, the claim for
    defamation is based on the fact that the information was published in a
    newspaper or in a broadcast and the notice requirement imposed by s. 5(1)
    therefore applies.

[31]

As explained by
Brown on Defamation
,
    at pp. 7-30 to 7-31, a person who communicates a defamatory remark to a
    newspaper will be held responsible for libel, rather than slander, as though he
    or she published it him- or herself:

Thus, it has been said by the Supreme Court of
    Canada that a person who communicates a defamatory remark to a newspaper
    reporter will be deemed to have authorized that reporter to publish the remark
    in the newspaper and will be held responsible as though he published it
    himself.  []  If the defamation is published in the newspaper, the
    liability will sound in libel rather than slander even if the defendant
    communicated it orally to the reporter

[32]

The rationale behind s. 5(1) is to give a
    defendant an opportunity to correct, retract, justify, apologize for, or
    otherwise consider what mitigating steps are appropriate :
Siddiqui
    v. Canadian Broadcasting Corporation

(2000), 50 O.R. (3d)
    607 (C.A.) at para. 16. The section and the rationale have been applied to
    non-media defendants by several decisions of this court:
Janssen-Ortho
    Inc. v. Amgen Inc.
(2005), 256 D.L.R. (4
th
) 407 (Ont. C.A.);
Watson v. Southam Inc.
(2000), 189 D.L.R. (4
th
) 695
    (Ont. C.A.);
DeHeus v. Niagara Regional Police Services Board
[2001] O.J. No. 4201 (C.A.);
Weiss v. Sawyer
(2002), 61 O.R. (3d) 526 (C.A.). In
Watson v. Southam
    Inc.
,
Weiler J.A. noted that the application of the
    section to non-media defendants had been criticized, but concluded that the
    parties had not made out a case for overruling it. The same observation applies
    to this case.

[33]

Accordingly,
    I conclude that to the extent the claim for defamation rests upon allegedly
    defamatory statements published or broadcast by media in Ontario, it should be
    struck out on the ground that the appellants failed to give the notice required
    by s. 5(1).

DISPOSITION

[34]

Accordingly,
    I would allow the appeal, set aside the order dismissing the claim for
    defamation and in its place, substitute an order striking only those paragraphs
    of the amended statement of claim resting on defamatory statements published or
    broadcast by media in Ontario.

[35]

In view of
    the divided success, I would award the appellants costs fixed in the amount of
    $7,500 inclusive of disbursements and HST.

Robert J. Sharpe J.A.

I agree R.A. Blair
    J.A.

I agree Paul Rouleau
    J.A.

Released: February 8, 2012


COURT OF APPEAL FOR ONTARIO

CITATION:
Toronto-Dominion
    Bank v. Skill, 2012 ONCA 132

DATE: 20120227

DOCKET: C53060

Winkler C.J.O., Laskin and Cronk JJ.A.

BETWEEN

The Toronto-Dominion Bank

Plaintiff
Defendant by Counterclaim

Respondent

and

Frank Skill, also known as Frank Henry Herbert
    Skill

Defendant
Plaintiff by Counterclaim

Appellant

Frank Skill, acting in person

Dennis Tourshard, for the respondent

Heard: February 27, 2012

On appeal from the summary judgment of Justice Harrison
    S. Arrell of the Superior Court of Justice, dated Wednesday, November 10, 2010.

APPEAL BOOK ENDORSEMENT

[1]

We see no error in the reasons of the court below, in fact we agree with
    them. Appeal dismissed. Costs of $5,000 all inclusive.

W. Winkler C.J.O.


COURT OF APPEAL FOR ONTARIO

CITATION:
Valenti v. The
    Equitable Trust Company, 2012 ONCA 93

DATE: 20120209

DOCKET: C54272

Doherty, Laskin and Epstein JJ.A.

BETWEEN

Marco Valenti

Plaintiff (Appellant)

and

The Equitable Trust Company

Defendant (Respondent)

Michael S. Herbert, for the appellant

J. Stephen Cavanagh, for the respondent

Heard: February 7, 2012

On appeal from the order of Justice Paul Kane of the Superior
    Court of Justice, dated August 11, 2011.

APPEAL BOOK ENDORSEMENT

[1]

This appeal must be allowed.  The plaintiff has pleaded the elements of
    a cause of action in inducing breach of contract.  Whether Equitable has a
    defence based on an implied term or justification is not a matter that can be
    resolved on a rule 21 motion.

[2]

The plaintiff has also pleaded a cause of action in intentional
    interference with economic relations.  The unlawful means element of the cause
    of action is perhaps not pleaded with the particularity necessary, but it is
    open to the plaintiff to seek leave to amend.

[3]

The appeal is allowed, the order of Kane J. is set aside, and in its
    place there will be an order dismissing the defendants rule 21 motion.  The
    plaintiff is entitled to its costs of the appeal and the motion in the amounts
    of $10,000 and $4,000 respectively, inclusive of disbursements and applicable
    taxes.


COURT OF APPEAL FOR ONTARIO

CITATION: 1369349 Ontario Inc. v. Yanch
    Heating and Air conditioning

(Barrie) Limited, 2012 ONCA 182

DATE: 20120321

DOCKET: C53560

MacPherson, LaForme J.J.A. and Pattillo J. (
Ad
    hoc
)

BETWEEN

1369349 Ontario Inc.

Plaintiff (Appellant)

and

Yanch
    Heating and Air conditioning (Barrie) Limited and

Andrew Bates c.o.b. as Live Wire
    Electrical

Defendant (Respondent)

Roger Chown and David Thompson, for the plaintiff
    (appellant)

Daniel Dooley, for the respondent Andrew Bates

Heard and released orally: March 20, 2012

On appeal from the judgment of Justice John R. McIsaac of
    the Superior Court of Justice, dated March 14, 2011.

ENDORSEMENT

[1]

The appellant alleged that Andrew Bates, the respondent, negligently
    damaged the armoured cable he installed in the appellants building causing a
    fire in the building two weeks later.  The trial judge found that the respondent
    was not negligent.  This is an appeal from that decision.

[2]

The appellant advances several grounds of appeal.  First, it submits
    that the respondent was required to provide an explanation, based on evidence,
    for the cause of fire in order to rebut the presumption of negligence suggested
    by the experts.

[3]

The appellant next submits that the trial judge ignored, misapprehended
    or misunderstood the jointly retained experts evidence.  In the alternative,
    it argues that the reasons of the trial judge for rejecting this evidence and
    accepting the respondents denial of negligence are inadequate.

[4]

We reject these grounds of appeal.

[5]

The task of the trial judge in this case was to decide on all the
    evidence, whether it could be fairly inferred that the fire was the result of
    the respondents conduct.  If a review of the evidence revealed that the cause
    of the fire remained unknown, then the required burden of proof upon the
    plaintiff would not have been satisfied and the trial judge would be required
    to dismiss the action.  That is what occurred in this case.

[6]

The jointly retained expert testified to only two ways that the
    respondent could have caused the fire: (1) by severely abusing the armoured
    cable including bending it severely, or (2) by yanking the armoured cable if
    it became caught when it was fished above a false ceiling.

[7]

The trial judge found that the respondent did not severely abuse, bend
    or yank the armoured cable.  This finding was open to the trial judge and the
    evidence was more than sufficient to support it.  He was entitled to believe
    the respondent on this issue, which was sufficient to rebut the presumption of
    negligence.  As the trial judge stated at paragraph 17:

although I have some suspicions about the quality of this
      installation and as to the overall credibility of the defendant, these concerns
      do not rise to a sufficient level to cause me to not accept his denial of
      professional negligence in this case.  I am satisfied that the appropriate
      standard of care was met and, accordingly, that the inference to the contrary
      has been rebutted.

[8]

The trial judges analysis was consistent with
Fontaine v. British
    Columbia (Official Administrator)
, [1998] 1 S.C.R. 424.  Accordingly, this
    ground of appeal is dismissed.

[9]

On the remaining grounds of appeal, there was no evidence that the fire
    was caused by a manufacturing defect in the armoured cable.  Further, the
    reasons of the trial judge are sufficient.  They pose no difficulties in either
    informing the appellant as to the reasons why the claim was dismissed or
    allowing for meaningful appellate review.

[10]

For
    these reasons, the appeal is dismissed with costs to the respondent in the
    amount of $16,000 inclusive of disbursements and HST.

J.C. MacPherson J.A.

H.S. LaForme J.A.

Pattillo J. (
Ad hoc
)


COURT OF APPEAL FOR ONTARIO

CITATION:
1540039
    Ontario Limited v. Farmers' Mutual Insurance Company
    (Lindsay),  2012 ONCA 210

DATE: 20120330

DOCKET: C54167

Feldman, Hoy JJ.A. and Spence J. (
ad hoc
)

BETWEEN

1540039 Ontario Limited

Applicant (Appellant)

and

Farmers Mutual Insurance Company (Lindsay)

Respondent (Respondent)

David Zuber and James S. Schacter, for the appellant

William G. Scott, for the respondent

Heard: February 15, 2012

On appeal from the order of Justice J. Christopher
    Corkery of the Superior Court of Justice dated September 15, 2009.

Hoy J.A.:

[1]

Daniel Nearing was electrocuted while working on a pylon sign located in
    front of a commercial plaza. His surviving family members sued, among others,
    the appellant, 1540039 Ontario Limited, the owner of the plaza.

[2]

The appellant has primary coverage under its own comprehensive general
    liability policy. It is also an additional named insured under a comprehensive
    general liability policy issued by the respondent insurer, Farmers Mutual
    Insurance Company (Lindsay), to one of the appellants tenants, Design Depot.

[3]

The application judge dismissed the appellants application for a
    declaration that the policy bound the respondent insurer to share in the
    defence of the claim against the appellant.

[4]

At issue on this appeal is whether the application judge erred in
    failing to consider extrinsic evidence of the underlying facts, which the
    appellant characterizes as undisputed, in determining whether the respondent
    insurer had a duty to defend the appellant.

[5]

For the reasons that follow, I would dismiss the appeal.

A.

The Background

(1)

The pleadings

[6]

The plaintiff surviving family members plead that the appellant landlord
    was the owner and/or occupier of the plaza and was negligent in that it:

·

failed to regularly inspect the premises to ensure that it was
      kept in a safe condition;

·

employed incompetent servants, agents and employees to perform
      work on the premises;

·

failed to instruct its servants, agents and employees properly or
      at all in the proper methods and procedures to be employed while performing
      work on the premises;

·

failed to take such care as in all the circumstances was
      reasonable to see that persons entering the premises were reasonably safe,
      including Mr. Nearing;

·

improperly placed its signage;

·

failed to post warning signs; and

·

created a situation of danger.

[7]

In addition to the appellant, the plaintiffs sued Hydro One Inc.,
    claiming it was the owner and/or occupier of the hydro lines above the pylon
    sign, and Robert Monroe, carrying on business under the name TRJ Signman,
    claiming he subcontracted the work to Mr. Nearing that resulted in Mr. Nearings
    death. The plaintiffs allege that these defendants were also negligent.

[8]

The plaintiffs did not plead that the appellant hired TRJ Signman to
    work on the pylon sign. Their statement of claim is silent as to who hired TRJ
    Signman.

[9]

In its statement of defence and crossclaim, the appellant pleaded, at
    para. 5:

This Defendant states that it did not hire Daniel Nearing or
    any other contractor, person or entity, to perform the work giving rise to the
    alleged damages and losses outline in the Statement of Claim. Instead, Daniel
    Nearing was employed by the Defendant, Robert Charles Monroe c.o.b. as TRJ
    Signman, on behalf of 1139063 Ontario Ltd. c.o.b. as Design Depot.

[10]

In
    his statement of defence, counterclaim and crossclaim, which post-dates that of
    the appellant, Mr. Monroe pleaded that he was not Mr. Nearings employer, and
    that Mr. Nearing was a self-employed independent contractor. Mr. Monroe did not
    take issue with the appellants assertion that the work was done on behalf of
    Design Depot.

[11]

In
    its statement of defence, crossclaim and counterclaim, Hydro One pleaded that
    care and control of the property that the sign was situated on rested, at all
    material times, with the appellant, as owner of the property, and Robert Monroe
    c.o.b. as TRJ Signman, as contractor hired by the appellant to perform work on
    the property. Hydro One claimed that the appellants negligence caused or
    contributed to the damages alleged. Hydro One relied on the plaintiffs
    allegations of negligence against the appellant and made further allegations,
    including that the appellant failed to hire competent contractors, failed to
    ensure that its contractors were familiar with and followed prescribed
    occupational health and safety requirements, and failed to ensure that its
    contractors exercised due care prior to performing any work on the property.(
    Although not identified by  name, the contractors referred to are, by
    implication, TRJ Signman and/or Mr. Nearing.)

[12]

The
    plaintiffs did not sue Design Depot, and none of the appellant, Hydro One, or
    Mr. Monroe has issued a third party claim against it.

(2)

The extrinsic
    evidence in issue

[13]

The
    affidavit evidence of the respondent insurers adjuster, R. Ian Pepper, is that
    one of the principals of Design Depot, Beau Wasiluk, advised him that Design
    Depot had retained TRJ Signman to provide new signage for his storefront and
    the pylon sign. Mr. Pepper attached a copy of an invoice from TRJ Signman to
    Design Depot, which Mr. Wasiluk told him he had received from TRJ Signman.

[14]

The
    affidavit evidence of James Schacter, a lawyer with the firm representing the
    appellant, is that he was advised by the president of the appellant that Mr.
    Nearing was retained to perform work on behalf of Design Depot. Specifically, Mr.
    Nearing was placing a sign advertising Design Depots business.

(3)

The lease

[15]

Paragraph
    12 of the lease between the appellant and Design Depot requires Design Depot to
    list the appellant as an additional insured under its comprehensive general
    liability policy issued by the respondent:

The Landlord requires the Tenant to take out and keep in force comprehensive
    General Liability Insurance coverage with respect to the business carried on in
    the leased premises for the duration of the Tenancy. A copy of the insurance
    shall be provided to the Landlord who shall be listed as ADDITIONAL INSURED
    during the term of the tenancy.

[16]

Paragraph
    30 of the lease relates to occurrences on the leased premised only and has no
    application to occurrences elsewhere in the plaza. It contains provisions
    requiring Design Depot to indemnify the Appellant if the Leased Premises or
    any part thereof [are] damaged by fire, lightning, tempest, floods, structural
    defect or acts of God or by any additional perils from time to time defined and
    covered in the standard broad coverage fire insurance policy carried by the
    Landlord on the Leased Premises. If that precondition is satisfied, then the
    indemnity extends to, among other things, any injury to person or persons
    including death resulting at any time there from occurring in or about the
    Leased Premises.

(4)

The policy

[17]

As
    required by paragraph 12 of the lease, Design Depot added the appellant as an
    additional insured under the comprehensive general liability policy at issue.
    The Additional Insured Endorsement effecting that addition cross-references the
    insurance declaration. The insurance declaration indicates that the appellant
    is an additional insured as landlord only. It is not disputed that, once those
    cross-references are incorporated into the Additional Insured Endorsement, it
    reads as follows:

It is Hereby Understood and Agreed that [the appellant] is
    added as an Additional Insured for the term of as of April 9, 2007 to January
    14, 2008 but, only
with respect to liability arising out of operations by
    or on behalf of Design Depot for interior decorating - home decor
.

It is Further Understood and Agreed that the Additional Insured
    shall not be covered for other than Insured Contract as defined in the
    Insuring Agreements. [Emphasis added.]

[18]

The
    Insuring Agreement provides,

Insured contract means:

(a)  A lease of premises;

...or

(g) That part of any other contract or agreement pertaining
    to your business under which you assume the tort liability of another to pay
    compensatory damages because of bodily injury or property damage to a third
    person or organization, if the contract or agreement is made prior to the
    bodily injury or property damage. Tort liability means a liability that
    would be imposed by law in the absence of any contract or agreement.

[19]

The
    Occurrence Form in the policy provides that the insurer will pay those sums
    that the insured becomes legally liable to pay as compensatory damages because
    of bodily injury (defined to include death resulting from bodily injury)
    caused by an occurrence (defined to mean an accident) in the coverage
    territory (defined to include Canada and the United States) to which the
    insurance applies.

B.

The decision of the application judge

[20]

In
    his oral reasons of September 15, 2009, the application judge determined that
    the extrinsic evidence was not admissible because it would require findings to
    be made before trial that would affect the underlying litigation. He further
    concluded that, even if admitted, the extrinsic evidence would not establish a
    duty to defend.

[21]

In
    his subsequent written reasons, the application judge also concluded that, on
    the facts contained in the pleadings, there was no possibility of coverage
    under the policy having regard to the wording of the lease between the
    appellant and Design Depot. In his view, the effect of paragraphs 12 and 30 of
    the lease is to limit coverage to liability arising out of occurrences within
    the leased premises, in respect of which paragraph 30 provides a right of
    indemnity. On this reasoning, there would be no possibility of coverage, even
    if the extrinsic evidence were admitted.

C.

The law with respect to the duty to defend

[22]

As
    the application judge wrote:

[14]  An insurers duty to defend a claim is broader than its
    duty to indemnify. An insurer is obliged to defend a claim if facts are alleged
    in the pleadings that, if proven true, would require the insurer to indemnify.
    The mere possibility that a claim may fall within the policy is sufficient to
    trigger the duty to defend (
Nichols v. American Home Assurance Co.
,
    [1990] 1 S.C.R. 801 at 811;
Monenco Ltd. v. Commonwealth Insurance
,
    [2001] 2 S.C.R. 699 at para. 28).

[15]  In assessing whether the facts pleaded fall within the
    policy, the court must consider the substance and true nature of the claim (
Non-Marine
    Underwriters, Lloyds of London v. Scalera
,
[2000] 1 S.C.R. 551, at para. 79,
Monenco
,
    paras. 34-36).

[16]  In
Monenco
, Iacobucci J. addresses what evidence
    may be considered in assessing the substance and true nature of the claim:

36  While these principles are instructive for the purposes
    of the present case, one important question arising in this appeal has been
    left open by the jurisprudence to date. That is, whether, in seeking to
    determine the substance and true nature of a claim, a court is entitled to
    go beyond the pleadings and consider extrinsic evidence. Without wishing to
    decide the extent to which extrinsic evidence can be considered, I am of the
    view that extrinsic evidence that has been explicitly referred to within the
    pleadings may be considered to determine the substance and true nature of the
    allegations, and thus, to appreciate the nature and scope of an insurers duty
    to defend. I now turn to that question.

(2) Application of Legal
    Principles to the Present Case

(a) Reference to Extrinsic
    Evidence

37  It should be recalled that the question whether an
    insurer is bound to provide defence coverage in an action taken against the
    insured arises as a preliminary matter. Of course, after trial, it may turn out
    that there is no liability on the insurer, and thus, no indemnity triggered.
    But that is not the issue when deciding the duty to defend. Consequently, we
    cannot advocate an approach that will cause the duty to defend application to
    become a trial within a trial. In that connection, a court considering such
    an application may not look to premature evidence, that is, evidence which,
    if considered, would require findings to be made before trial that would affect
    the underlying litigation.

D.

The parties submissions

[23]

The
    appellant concedes that the facts alleged in the pleadings would not, if proven
    true, require the respondent insurer to indemnify it. There is no allegation in
    the pleadings that the hiring of TRJ Signman (and the deceased) by the tenant,
    Design Depot, leads to liability of the appellant.

[24]

Nevertheless,
    the appellant submits that the application judge erred in failing to admit the
    extrinsic evidence that it was Design Depot that hired TRJ Signman.

[25]

The
    appellant argues that the Supreme Court in
Monenco Ltd. v. Commonwealth
    Insurance Co.
, 2001 SCC 49, 2 S.C.R.
    699,
left the door open as to the extent that extrinsic evidence
    should be admitted. Counsel for the appellant notes that this court, in
Meadows
    v. Meloche Monnex Insurance Brokers Inc.
,
2010 ONCA 394, 102 O.R. (3d) 312, when presented with extrinsic evidence not
    explicitly referred to in the pleadings, carefully left open the possibility
    that such evidence might be admissible. Counsel urges this court to adopt the recommendation
    made by Gordon Hilliker,
Liability Insurance Law in Canada
, 5
th
ed. (Markham: LexisNexis Canada Inc., 2011), at p. 104:

...in certain limited circumstances, with respect to facts that
    are not in dispute in the underlying action and an issue that does not require
    findings to be made before trial that would affect the underlying litigation,
    the court may permit the admission of extrinsic evidence as an aid to determining
    the duty to defend.

[26]

Similar
    comments were made in Craig Brown and Thomas Donnelly,
Insurance Law in
    Canada
, looseleaf (Toronto, Ont.: Carswell, 2002), at p. 18-20:

Underlying facts may be admissible in certain limited
    circumstances, where the underlying facts do not deal with any matters at issue
    in the action against the insured...There is some logic in considering
    uncontroversial underlying facts where the matter at issue has nothing to do
    with the underlying action against the insured. There would be no prejudice to
    the insured in determining the issue based on underlying facts, and no conflict
    between the insurer and insured.

[27]

The
    appellant further submits that the extrinsic evidence is undisputed, and
    establishes that its liability arose out of Design Depots operation of its
    interior decorating - home decor business: Mr. Nearing was on the pylon sign
    because Design Depot had made arrangements to have a sign advertising Design
    Depots business posted on the pylon. The appellant argues that the application
    judge erred in his interpretation of the policy, and the extrinsic evidence
    establishes that the plaintiffs claim falls within the policy.

[28]

The
    insurer argues that the application judge was correct, both in concluding that
    the extrinsic evidence should not be admitted and that there was no possibility
    of coverage.

[29]

The
    insurer points to decisions of this court which did not consider extrinsic
    evidence of underlying facts in determining whether an insurer has a duty to
    defend:
Jon Picken Ltd. v. Guardian Insurance Co. of Canada
(
1993), 66 O.A.C. 39 (C.A.);
Trafalgar
    Insurance Co. of Canada v. Imperial Oil Ltd.
(2001)
, 57 O.R. (3d) 425 (C.A.);
Cooper v. Farmers
    Mutual Insurance Co.
(
2002),
    59 O.R. (3d) 417 (C.A.); and
Halifax Insurance Co. of Canada v. Innopex
    Ltd.
(
2004), 72 O.R. (3d)
    522 (C.A.). The insurer notes that, in
Trafalgar
, this court
    interpreted
Monenco
as having resolved the extent to which extrinsic
    evidence can be admitted in determining if there is a duty to defend.

E.

Analysis

[30]

While
    there may be merit in the position advocated by Hilliker, particularly in a
    case where there is no dispute between the insured and the insurer as to the
    underlying facts and the insured, rather than the insurer, seeks to rely on the
    extrinsic evidence, ultimately this is not the case to further extend the scope
    of extrinsic evidence that can be considered in determining whether or not an
    insurer has a duty to defend.

[31]

There
    are two problems with the position advanced by the appellant. The first is that
    the allegedly undisputed facts are not undisputed.

[32]

Hydro
    One put by whom Mr. Monroe, c.o.b. as TRJ Signman, was hired in issue in its
    crossclaim against the appellant. Hydro One alleges that the appellant hired
    TRJ Signman in its crossclaim in negligence against the appellant. The
    appellant denies that it hired TRJ Signman and alleges that Design Depot did so.
    Who hired TRJ Signman is accordingly in dispute in the underlying litigation.

[33]

The
    second and more serious problem is in my view that, even if admitted, the
    extrinsic evidence would not support a duty to defend. I come to this
    conclusion for different reasons than the application judge.

[34]

My
    reasoning is rooted in
Monenco.

[35]

Monenco
instructs that in assessing whether there is a duty to defend, the court
    must consider the substance and true nature of the claim. The substance and
    true nature of the plaintiffs claim against the appellant is a claim in
    negligence arising out of the appellants alleged failure to ensure that the
    pylon sign was kept in a safe condition and its alleged improper placement of
    the pylon sign. It is based on the appellants conduct as owner and occupier of
    the plaza and not as landlord of the premises leased to Design Depot. Hydro
    Ones crossclaim against the appellant similarly arises out of the appellants
    conduct as owner of the property.
In substance
, they are not claims
    arising out of the operation of Design Depots business. Nor did the plaintiffs
    or Hydro One sue Design Depot.

[36]

The
    extrinsic evidence, if considered, would not create a possibility that the
    claims against the appellant may fall within the policy; it cannot convert
    claims against the appellant qua owner into claims against the appellant as
    landlord of the premises leased to Design Depot. The extrinsic evidence
    exception to the pleadings rule cannot be used to demonstrate that pleadings
    that say one thing really mean something else.

F.

Costs

[37]

In
    accordance with the agreement of the parties, the respondent shall be entitled
    to costs in the amount of $10,000, inclusive of disbursements and HST.

Released: Mar 30, 2012                                         Alexandra
    Hoy J.A.

KF                                                                    I
    agree K. Feldman J.A.

I
    agree Spence J. (ad  hoc)


COURT OF APPEAL FOR ONTARIO

CITATION:
625882 Ontario
    Limited v. Hacohen, 2012 ONCA 170

DATE: 20120319

DOCKET: C54421

Goudge, Sharpe and Blair JJ.A.

BETWEEN

625882 Ontario Limited and Batya Wagner

Plaintiffs (Respondents)

and

Ilan Hacohen and Ronit Hacohen

Defendants (Appellants)

Arnold Zweig, for the appellants

Paul Neil Feldman, for the respondents

Heard: March 16, 2012

On appeal from the judgment of Justice Low of the Superior
    Court of Justice, dated September 13, 2011.

APPEAL
    BOOK ENDORSEMENT

[1]

Before us the appellant argued only one point, namely the fresh
    evidence.  In our view the fresh evidence would not have changed the result.
    The amount contained in the fresh evidence is completely consistent with the
    internal allocation of payments by the respondent found by the motion judge and
    does not affect her finding that interest was being paid on all three loans
    thereby defeating the limitations defence.  The appeal is dismissed.

[2]

Costs to the respondent fixed at $7500 inclusive of disbursements
    and applicable taxes.


COURT OF APPEAL FOR ONTARIO

CITATION:

Anastasiadis v. Vano, 2012
    ONCA 137

DATE: 20120301

DOCKET: C53629 and C53749

Winkler C.J.O., Laskin and Cronk JJ.A.

BETWEEN

Vasilios Anastasiadis

Plaintiff/Appellant

and

Steven Vano

Defendant/Respondent

Julie Amourgis, for the appellant

Bernard B. Gasee, for the respondent

Heard and released orally: February 27, 2012

On appeal from the orders of Justice J.B. Shaughnessy of
    the Superior Court of Justice, dated April 7, 2011, and the order of Justice
    M.L. Lack of the Superior Court of Justice, dated April 26, 2011.

ENDORSEMENT

[1]

The parties have a lengthy history of various real estate-related
    dealings.  The appellant claims that he has never received a proper or any
    accounting from the respondent  his former lawyer and mortgagee  regarding
    the proceeds of sale of at least two properties.  The appellants action
    seeking such an accounting, among other relief, has been set down for trial in
    Oshawa and is apparently scheduled to be spoken to in March or April of this
    year.  The appellants entitlement to an accounting or other relief from the
    respondent is therefore a matter that will be dealt with by the courts in the
    normal course.

[2]

The matter now before this court, however, relates to an agreement
    signed by the appellant on October 25, 2007 (the October Agreement) in respect
    of a third property situate in Whitby (the Fallstaff Property).  Under the
    October Agreement, the appellant agreed to make monthly payments in the amount
    of $2,500 commencing November 25, 2007 in exchange for occupancy of the
    Fallstaff Property, failing which he agreed to immediately vacate the premises.
    In the same agreement, he acknowledged that the sum of $291,620.07 was owing to
    the registered owner of the Fallstaff Property, 1471423 Ontario Inc. (147
    Ontario), a company controlled by the respondent, in respect of mortgage funds
    advanced and/or secured against the Fallstaff Property.  There is also
    uncontradicted evidence that the appellant had recourse to independent legal
    and accounting advice when he signed the October Agreement.

[3]

The appellant acknowledges that he is in default under the October
    Agreement.  He has made no payments since October 2007 under the October Agreement.
    Nor has he otherwise paid any funds to 147 Ontario or the respondent, or into
    court, regarding his occupancy of the Fallstaff Property.

[4]

In these circumstances, regardless of the state of accounts between the
    parties in relation to other transactions  a matter that will ultimately be
    tried  it was open to the motion judge to grant possession of the Fallstaff
    Property to 147 Ontario.  We also see no error in the subsequent decision of
    Lack J. of the Superior Court of Justice, dated April 26, 2011, refusing to set
    aside the possession order.

[5]

We acknowledge that the appellant alleges various procedural
    irregularities concerning the hearings before the motion judge and Lack J.  We
    are satisfied that sufficient notice of the April 7, 2011 possession
    application was provided to the appellant through his solicitor of record and
    his then new solicitor.  We are also persuaded that the materials necessary for
    the determination of the possession application were available to the court.
    Further, we see no basis on which to interfere with Lack J.s decision to
    correct an inadvertent error in the formal version of the April 7, 2011
    possession order to ensure that the relief afforded thereunder was granted to
    the proper party in accordance with the style of proceedings.

[6]

Finally, during oral argument the appellant claimed that he entered into
    the October Agreement under duress and as a result of undue influence by the
    respondent.  This claim is untenable on the record before this court.

[7]

The appellant is an experienced real estate developer.  As we have
    already said, he had the benefit of independent legal and accounting advice
    when he entered into the October Agreement.  He took the benefit of that
    agreement without honouring his obligations under it.  He remains in default
    and in possession of the Fallstaff Property.  147 Ontario was therefore
    entitled to the relief granted.

[8]

For these reasons, the appeal is dismissed.  The respondent is entitled
    to his costs of the appeal, fixed in the amount of $20,000, inclusive of
    disbursements and all applicable taxes.

Winkler C.J.O.

John Laskin J.A.

E.A. Cronk J.A.