COURT OF APPEAL FOR ONTARIO

CITATION: Chaudhary v. Canada (Minister of Public Safety and
    Emergency Preparedness), 2015 ONCA 251

DATE: 20150413

DOCKET: M44915 (C60223)

Weiler J.A. (In Chambers)

BETWEEN

Amina
    Chaudhary, Michael Mvogo,

Carmelo
    Bruzzese
and Glory Anawa

Applicant

(Appellants on appeal)

and

Minister
    of Public Safety and Emergency Preparedness,

Minister
    of Citizenship and Immigration,

Attorney
    General of Canada, Attorney General of Ontario, and

Superintendent of the
    Central East Correctional Centre

Respondents

Barbara Jackman and Rebecca Lockwood, student at law,
    for the applicant

Martin Anderson and Mélissa Mathieu, for the Minister of
    Public Safety and Emergency Preparedness, the Minister of Citizenship and
    Immigration and the Attorney General of Canada

Heard: April 10, 2015

ENDORSEMENT

A.

Overview

[1]

The applicant, Mr. Bruzzese, is a permanent resident of Canada. He is
    being detained in custody as a flight risk and a danger to the public based on
    an investigation of his potential inadmissibility to Canada for being a member
    of an organization engaged in organized criminal activity under s. 37(1)(a) of
    the
Immigration and Refugee Protection Act
S.C. 2001, c. 27 (IRPA).

[2]

He brought an application before a judge of the Superior Court of
    Ontario for
habeas corpus
with
certiorari
in aid, seeking his
    immediate release from custody and claiming that his continued detention was
    unlawful. The judge declined to exercise his
habeas corpus
jurisdiction.
    He held that IRPA is a complete and comprehensive scheme for the determination
    of the lawfulness of the applicants detention and it permits an ambit of
    review that is at least as broad and advantageous as the traditional scope of
    review by
habeas corpus
with
certiorari
in aid. Permitting
    the
habeas corpus
petition to proceed would provide a collateral
    procedure to challenge the merits of detention outside of the comprehensive
    scheme. Declining jurisdiction in such circumstances was consistent with
    well-established jurisprudence. Accordingly, he dismissed the application. The
    applicant has appealed that dismissal to this court.

[3]

The parties have asked this court to expedite the appeal and I have
    ordered that the appeal is to be heard on May 6, 2015.

[4]

In the interim, and in the event a deportation order is made prior to
    the Ontario Court of Appeal deciding his appeal, the applicant seeks an order
    that until this court decides his appeal, no final deportation order is to be
    enforced against him. The mechanism pursuant to which such order is requested
    is this motion for a stay.

[5]

I am not prepared to make the order requested for two reasons. First the
    order being sought is premature. Second, the applicant has not met the
    requirements for granting a stay as the appeal does not raise a serious issue
    to be tried.

B.

The order requested is premature

[6]

The order sought by the applicant does not relate to his continued
    detention. The stay being sought is not a stay of the order under appeal but
    the stay of a possible future deportation order.

[7]

In
Ahani v. Canada (Attorney General),
2002 O.J. No. 90,
    Feldman J.A. held that this court has jurisdiction to issue a stay of a
    deportation order that has been issued pursuant to s. 134(2) of the
Courts
    of Justice Act
, if the criteria of the section are met. That subsection
    provides:

134(2) On motion, a court to which a motion for leave to appeal
    is made or to which an appeal is taken may make any interim order that is
    considered just to prevent prejudice to a party pending the appeal.

[8]

Mr. Ahani was the subject of a deportation order who had exhausted all
    his rights of appeal, including to the Supreme Court of Canada, when he brought
    his motion for a stay. If Feldman J.A. had refused to grant a stay of the
    deportation order, Ahanis appeal from the Superior Courts assumption of jurisdiction
    and decision would have been rendered moot.

[9]

That is not this case. The Superior Court declined to assume
    jurisdiction, a deportation order has yet to be made and the applicant has thus
    not exhausted his rights under IRPA. To ask this court to issue what is in
    effect an injunction in these circumstances is premature. Section 134(2) does
    not give a court the discretion to prevent potential future prejudice that may
    never arise. Thus the requirement for the assumption of jurisdiction under s.
    134(2) of the
Courts of Justice Act
has not been met.

[10]

I
    note that a stay of a prospective deportation order has been granted by the
    Federal Court. (
Yhap v. Canada (Minister of Employment and Immigration)
,
    [1989] F.C.J. No. 926). Thus, with respect to the order requested of me, the
    Federal Court is a more effective venue.

C.

The appeal does not raise a serious question to be tried

[11]

Having
    regard to the lengthy argument advanced, I will, in any event consider whether
    the test for a stay has been met.

[12]

The
    test for staying an order pending appeal under rule 63.02 is the same as the
    test for an interlocutory injunction established by the Supreme Court of Canada
    in
RJR-Macdonald Inc. v. Canada (Attorney General)
, [1994] 1 S.C.R.
    311, at p. 334. The test requires the court to consider the following three
    factors:

(1)

a preliminary assessment must be made of the merits of the case to
    ensure that there is a serious question to be tried;

(2)

it must be determined whether the applicant would suffer irreparable
    harm if the application were refused; and

(3)

an assessment must be made as to which of the parties would suffer
    greater harm from the granting or refusal of the remedy pending a decision on
    the merits.

[13]

See
Circuit World Corp. v. Lesperance
(1997), 33 O.R. (3d) 674 (C.A.);
BTR Global Opportunity Trading Limited v. RBC Dexia Investor Services Trust
,
    2011 ONCA 620, 283 O.A.C. 321 at para. 16;
Warren Woods Land Corp. v.
    1636891 Ontario Inc.
, 2012 ONCA 12 at para. 1.

[14]

The
    overarching consideration is whether the interests of justice call for a stay:
International
    Corona Resources Ltd. v. LAC Minerals Ltd.
(1986), 21 C.P.C. (2d) 252
    (Ont. C.A.); see also
Longley v. Canada (Attorney General)
, 2007 ONCA
    149, 223 O.A.C. 102 at paras. 14-15;
BTR Global
, at para. 16.

[15]

The
    assessment begins with a presumption of correctness of the decision under
    appeal:
Ogden Entertainment Services v. United Steelworkers of America,
    Local 440
(1998), 38 O.R. (3d) 448, [1998] O.J. No. 1824 (C.A.), at p. 450
    O.R. The onus is on the moving parties to establish a case for a stay:
International
    Corona Resources Ltd, supra,
at p. 255 C.P.C.

[16]

I
    have not been persuaded that there is a serious question to be tried as to
    whether the judge at first instance erred in declining to exercise his
    jurisdiction to issue a writ of
habeas corpus
with
certiorari
in
    aid. One of the circumstances in which the Supreme Court of Canada has held
    that a provincial superior court judge should decline to exercise habeas corpus
    jurisdiction is where legislation has put in place a complete, comprehensive
    and expert procedure for the review of an administrative decision regarding the
    detention of individuals:
Mission Institution v. Khela
2014 SCC 24 at
    paras. 42 and 55. This is sometimes called the
Peiroo
exception after
    the decision of Catzman J.A. in
Peiroo v. Canada
(
Minister of
    Employment and Immigration)
(1989) 69 O.R. (2d) 253, (Ont. C.A.) leave
    denied, [1989] S.C.C.A. No. 322. See also
Reza v. Canada
[1994] 2
    S.C.R. 394 at para. 21.

[17]

The
    applicants counsel seeks to distinguish the authorities cited above from the
    present situation. She submits that those cases and the voluminous
    jurisprudence following these decisions can be distinguished because the
    challenges in those cases involved individuals who were either not detained or
    who were detained on a different basis than the applicant. I disagree that the
    jurisprudence can be distinguished on this basis. The applicants detention
    arises out of a matter under immigration law; he is subject to that
    comprehensive scheme, and the decisions made are, with leave, subject to review
    by the Federal Court under s. 72(1) after any right of appeal in the Act has
    been exhausted. Section 72(1) provides:

72(1) Judicial review by the Federal Court with respect to any
    matter  a decision, determination or order made, a measure taken or a question
    raised  under this Act is commenced by making an application for leave to the
    Court.

[18]

The
    applicant relies on
Baroud v. Canada (MCI)
[1995] O.J. No. 43, at
    para. 8 where the court observed:

The parties are agreed that the Federal Court Trial Division
    has no jurisdiction to grant habeas corpus to this appellant. The issue is
    therefore somewhat different than in
Reza
where the same remedies as
    were sought in the provincial court were available in the Federal Court. The
    case is also dissimilar to
Peiroo v. Canada (Minister of Employment &
    Immigration)
where there were avenues of appeal to be pursued in the
    Federal Court. The issue in this case is whether a discretion should be
    exercised against the issuance of a writ of habeas corpus because there are
    adequate alternative remedies available in the Federal Court where other
    related proceedings are presently pending. (citations omitted)

[19]

In
Baroud,
the court held, however, that the applicant for
habeas corpus
had not shown that the alternative remedies available under IRPA were
    inadequate or ineffective. See also
Shepherd v. Canada
(MEI) 1989 OJ
    NO 2056 (C.A.) leave denied [1989] 2 SCR xi and
R. v. Zundel
[2004] OJ
    No. 2087 at paras 5-7, 12, leave denied, [2004] S.C.C.A. No. 316.

[20]

The
    applicant also relies on the assumption of jurisdiction by Campbell J. in
Bembenek
    v. Canada (Minister of Employment and Immigration)
[1991] O.J. No. 2162.
    As Campbell J. observed himself at p. 48 of his reasons, the applicant for
habeas
    corpus
in that case was in custody on extradition proceedings which were
    separate from the immigration proceedings. Thus that decision is not of
    assistance.

[21]

In
    this case, I am also of the opinion that the applicant has not shown
    alternative remedies available under IRPA are inadequate or ineffective. Thus,
    the appeal is frivolous.

[22]

Having
    regard to the argument before me I will elaborate on my conclusion by making
    brief comment on the major specific arguments raised by the applicant.

(1)

Whether access to review of detention under IRPA is untimely; whether
    the applicants detention is not warranted and
habeas corpus
should
    issue

[23]

The
    applicant stresses the time to access the remedies under
IRPA
as
    compared to a
habeas corpus
hearing and submits that the latter is a
    more effective remedy. In
Baroud
,

Carthy J.A. observed, in
    rejecting this argument, that, the length of time that it takes to review a
    detention must depend upon the circumstances of the particular case. While the
    applicant submits that the review of his detention orders was untimely and that
    each successive review relied on the initial decision, those detention orders
    were ultimately reviewed prior to the hearing in the Superior Court on whether
habeas
    corpus
should issue.

[24]

Montignys
    decision concerning the applicants detention, reported at [2014] F.C.J. No.
    261, held that there was sufficient evidence to support the conclusion he
    should be detained because he was a danger to the public and a flight risk. In
    arriving at his decision, Montigny J. considered a number of factors including
    (1) the applicant faces charges in Italy for membership in a criminal
    organization and engaged in behaviour consistent with criminal association; (2)
    the finding the proposed sureties could not reasonably control the applicant
    was reasonable; (3) there are good reasons to find GPS monitoring would not be
    enough, as the bracelet could be removed, was slow to notify police and only
    monitored the applicant's movements.

[25]

This
    decision is helpful context in deciding whether the interests of justice
    require that a stay be issued.

(2)

Whether the proceeding is a disguised extradition

[26]

The
    applicant submits that the proceeding under IRPA is a disguised extradition in
    the sense that IRPA is being used because extradition is not available. Being a
    member of a criminal organization is not an offence in Canada and the double
    criminality aspect required for extradition is not present. The Federal Court
    can assess whether a proceeding under IRPA is a disguised extradition hearing
    because if it is that is an unlawful exercise of power. Indeed, the question as
    to what constitutes a disguised extradition has been examined by the Federal
    Court of Appeal and in
Shepherd, supra,
this court commented at page 9,
    that from the decision of the Federal Court of Appeal in
MacDonald v.
    Kindler
[1987] 3 F.C. 34, and the trial decision, the following principles
    emerge:

1. If the purpose of the exercise is to deport the person
    because his presence is not conducive to the public good, that is a legitimate
    exercise of the power of deportation.

2. If the purpose is to surrender the person as a fugitive
    criminal to a state because it asked for him, that is not a legitimate exercise
    of the power of deportation.

3. It is open to the courts to inquire whether the purpose of
    the government was lawful or otherwise.

4. The onus is on the party alleging an unlawful exercise of
    power. It is a heavy onus.

5. To succeed, it would be necessary to hold that the Minister
    did not genuinely consider it in the public interest to expel the person in
    question.

6. The adoption of the
Charter
has not lessened the
    onus.

[27]

In
    this case, the applicant sought further disclosure to support her argument that
    this is a disguised extradition hearing which was refused. She did not seek to
    have that refusal reviewed by the Federal Court.

[28]

Judges
    of the Federal court and administrative tribunals also have an inherent and
    residual discretion to prevent an abuse of the courts process:
Al Yamani
    v. Canada (Minister of Citizenship and Immigration)
, [2003] F.C.A. 482 at
    para. 25. If the proceeding here is a disguised extradition it would also be an
    abuse of process and would be open to challenge before the Federal Court on
    that ground as well.

Bias

[29]

At
    the outset, the applicant asked that the adjudicator hearing his case to recuse
    herself on account of apprehended bias because she had made an earlier ruling
    against him. She refused to recuse herself and the applicant sought leave to
    review her decision. Leave was refused and there is no further appeal from that
    refusal.

[30]

The
    mere fact that an adjudicator sat on a previous matter involving the same
    applicant does not give rise to actual bias or an apprehension of bias:
Arthur
    v. Canada (Minister of Employment and Immigration),
[1993] 1 F.C. 94
    (C.A.). In
Khalife v. Canada (Minister of Citizenship and Immigration)
[2002]
    F.C.J. No. 1542, Kelen J. explained at para. 12:

In Arthur, the Federal Court of Appeal was faced with a similar
    situation to the case at bar. The adjudicator made a negative credibility
    finding when he ruled against an individual seeking release from detention and
    the applicant argued he had formed an overall opinion on credibility that
    disqualified him from adjudicating a second hearing. The Court held that an
    opinion on credibility was not enough to demonstrate bias.

[31]

What
    the Court must do instead is examine the adjudicators decision to detect any
    predisposition respecting the applicants general credibility that amounts to
    prejudgment of his claim:
Khalife, supra,
at para. 13. In this case
    such a claim may be revisited after the adjudicators decision.

(3)

Whether Section 1 of the
Charter of Rights and Freedoms
is a
    reasonable limit on the applicants rights

[32]

The
    applicant also raised the issue of whether the statutory limit on his right to
    review an unfavorable decision under IRPA was a reasonable limit under s. 1 of
    the
Charter of Rights and Freedoms.
This point was also answered in
Baroud
at para 18 as follows:

Once there is a finding that an alternative remedy is equally
    effective it is axiomatic that the denial of the right to the issuance of a
    writ of habeas corpus is a justifiable limit.

[33]

The applicant relies on the decision of the Supreme Court of
    Canada in
R. v. Bedford
[2013] S.C.C. 32 at para. 42 for the
    proposition that the same
Charter
arguments that have been decided in
    other earlier cases can and should be reconsidered. In
Bedford,
the
    legal issues under s. 7 were different and the evidentiary record was richer.
    The Court observed at para. 41 of that decision that current social and
    economic research not available at the time of the earlier decision now refuted
    earlier assumptions, justifying a departure from precedent. This is not such a
    case.

D.

Conclusion

[34]

The
    applicant does not meet the first requirement for a stay; the appeal does not
    raise a serious question to be tried. Consequently, I need not go on and
    address the other requirements for a stay. The interests of justice do not
    favour the issuance of a stay where, as here, an appellate court would
    inevitably reach the same conclusion as the judge at first instance.

[35]

Accordingly,
    the application is dismissed.

K.M. Weiler J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Conforti (Re), 2015 ONCA 268

DATE: 20150420

DOCKET: C57476

Laskin, Blair and Pepall JJ.A.

In the Matter of the Bankruptcy of Vincenzo
    Francesco Conforti

Robert A. Klotz, for the appellant, Vincenzo Francesco
    Conforti

Howard F. Manis and Debora Miller-Lichtenstein, for the
    respondent Trustee in Bankruptcy, Pat Robinson Inc.

Heard: December 3, 2014

On appeal from the order of Justice James M. Spence of
    the Superior Court of Justice, dated May 3, 2012, with reasons reported at 2012
    ONSC 2656, and the supplemental order dated March 6, 2013.

Pepall J.A.

Introduction

[1]

This appeal involves the impact of bankruptcy on a victim of a motor
    vehicle accident.

[2]

The appellant, Vincenzo Francesco Conforti, was permanently disabled as
    a result of a motor vehicle accident and is unable to continue to work in his
    previous employment as a truck driver. He claimed statutory accident benefits
    (SABs) and also commenced an action for damages. Two and a half years after
    the accident, he filed an assignment in bankruptcy. While bankrupt, he received
    financial assistance from the Ontario Ministry of Community and Social Services
    (the Government). He also received proceeds from the settlements of his SABs
    claim and his action. The appellant failed to disclose either of the settlements
    to his Trustee in Bankruptcy.

[3]

As part of the bankruptcy proceedings, the Trustee was required to
    calculate the appellants total and surplus income under s. 68 of the
Bankruptcy
    and Insolvency Act
, R.S.C. 1985, c. B-3 (
BIA
) to ascertain if
    any amount was available for distribution to the appellants creditors. The
    Trustee sought directions from the court on the appropriate treatment to be accorded
    the financial assistance and the settlement payments received by the appellant.
    At the same time, the appellant asked the court for a discharge from
    bankruptcy.

[4]

The motion judge provided directions and included all of the financial
    assistance, all of the SABs settlement, and a pro-rated portion of the
    settlement of the action proceeds in the appellants total income calculation. This
    resulted in surplus income of $27,986.28 available for creditors. He also
    imposed a $15,000 penalty on the appellant due to his non-disclosure. The
    appellant was granted a discharge upon payment of these two sums.

[5]

The appellant appeals certain parts of the motion judges order. He
    submits that the motion judge erred in his treatment of the financial
    assistance and settlement payments and in his pro-rating methodology. He argues
    that no surplus income was owed to the Trustee for distribution to creditors. He
    accepts that he should be admonished for his conduct, but submits that a
    penalty of $15,000 was only appropriate if no surplus income was payable.

[6]

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

Background Facts

(a)

Motor Vehicle Accident

[7]

The appellant was a truck driver who earned annual income of
    approximately $45,000 to $50,000 before tax. He was seriously injured in a
    motor vehicle accident on January 31, 2007. He was 48 years old, having been
    born on July 7, 1958. As a result of the accident, he was subject to
    significant physical limitations that prevented him from continuing in his
    employment as a truck driver. On December 11, 2007, he commenced an action for
    damages for personal injuries arising out of the motor vehicle accident.

[8]

Following the accident, he received SABs at the rate of $1,600 per month
    after tax until December 31, 2008. He then claimed additional SABs payments and
    also applied for financial assistance from the Government. The Government agreed
    to pay the fees for his assignment into bankruptcy and to provide him with monthly
    financial assistance.  In return, the appellant agreed to reimburse the
    Government from the proceeds of his personal injury action. The repayment
    obligation was secured by an assignment of those proceeds. The agreement and
    the assignment are signed and dated February 2009. Thereafter, the appellant
    received financial assistance payments monthly.

(b)

Assignment into Bankruptcy

[9]

On September 24, 2009, the appellant filed an assignment in bankruptcy
    and named Pat Robinson Inc. as his Trustee in Bankruptcy. The appellant
    disclosed assets of $1,000 and liabilities of $116,683.35. He did not disclose
    or advise the Trustee of his personal injury action or his outstanding claim
    for additional SABs payments. Nor did he include them as assets in his sworn
    statement of affairs filed in his bankruptcy proceedings. He acknowledged that
    his failure to disclose the action and the SABs claim reflected very bad
    judgment. While he also did not list his indebtedness to the Government as a
    liability in his statement of affairs, the Trustee was aware of this obligation.
    The Trustee never challenged the assignment in favour of the Government.

(c)

Settlement of SABs Claim and Personal Injury Action

[10]

On
    November 16, 2009, the appellant settled his SABs claim for a payment of approximately
    $21,000 after deduction of legal fees and disbursements. The appellant did not
    disclose the receipt of the SABs settlement payment to the Trustee. He paid
    this amount to an old friend, Gino Crupi. Mr. Crupi had allegedly lent him
    money in 1976 although this debt obligation was not disclosed on the appellants
    sworn statement of affairs. No documentation existed regarding the alleged loan.

[11]

On
    February 10, 2010, the appellant settled his personal injury action for the sum
    of $275,000 inclusive of costs and disbursements. Pursuant to executed minutes
    of settlement, the appellant was to deliver a release from the Trustee to the
    defendant in the action.

[12]

The
    Trustee learned of the settlement proceeds when the appellants lawyer requested
    the release around March 3, 2010.

[13]

The
    settlement allocated the $275,000 as follows:

General damages (pain and
          suffering)

-

$120,000

Future loss of competitive
          advantage

-

$100,000

Future care

-

$7,000

Housekeeping

-

$15,000

Costs, disbursements, and HST

-

$33,000

In addition to the $33,000 allocated towards legal
    costs, disbursements and taxes, the appellant had to pay legal fees of $80,000.
    The settlement provided that no amount was being paid on account of past loss
    of income.
[1]

[14]

At
    the time of the February 10, 2010 settlement, the appellant was 51 years old,
    and the balance of his working life was estimated to be approximately 15 years.

(d)

Discharge Application

[15]

The
    appellant applied to court for a discharge from bankruptcy. The appellants
    unsecured claims amounted to approximately $105,000 and the appellants debt to
    the Government was approximately $38,000. Both the Trustee and the appellants
    principal creditor, Central Mortgage and Housing Corporation, opposed the
    request for a discharge. At the same time, the Trustee also sought directions
    from the court on the issues of property and income inclusions.

[16]

The
    Trustee took the position that both the SABs and the personal injury settlement
    proceeds constituted capital assets, not income, and accordingly, they should
    be paid to the Trustee for distribution to the appellants creditors pursuant
    to s. 67 of the
BIA
. In the alternative, the Trustee argued that the settlement
    proceeds, along with the financial assistance payments, formed part of the
    appellants total income in the years of receipt, pursuant to s. 68.  If so,
    this would result in surplus income available for the benefit of his creditors.
    The Trustee also sought a penalty as a condition of the appellants discharge
    from bankruptcy.

[17]

The
    appellant differed. He argued that the settlement proceeds were not capital
    assets and that while some elements of the settlement proceeds constituted
    income, they should be pro-rated over time. As a result, he argued that there
    was no surplus income available for distribution to his creditors. He
    acknowledged that some penalty was justified.

Applicable Legal Principles

[18]

To
    understand the parties dispute, it is helpful to describe the scheme reflected
    in ss. 67 and 68 of the
BIA
. As a general proposition, s. 67 of the
BIA
deals with property of the bankrupt and s. 68 deals with the bankrupts income.

[19]

One
    of the purposes of the
BIA
is to ensure that all property owned by a
    bankrupt at the date of bankruptcy will, with certain exceptions, vest in the
    trustee for realization and distribution to the bankrupts creditors:

Husky Oil Operations Ltd. v. Minister of
    National Revenue
, [1995] 3 S.C.R. 453, at pp. 470-471.

[20]

Section
    67(1)(c) states that subject to certain exceptions, the property of a bankrupt divisible
    among his creditors shall comprise: all property wherever situated of the
    bankrupt at the date of the bankruptcy or that may be acquired by or devolve on
    the bankrupt before their discharge.

[21]

Historically,
    subject to any amount exempted from seizure by provincial law, the salary of a
    bankrupt vested in the trustee: see e.g.
Industrial Acceptance Corp. v.
    Lalonde
, [1952] 2 S.C.R. 109. This changed in 1966, when the predecessor
    to s. 68 was added to the legislation, creating a bifurcated regime under which
    property and income were treated separately. Section 68 creates a scheme
    designed to determine which portion of a bankrupts total income is surplus
    income available in part for distribution to creditors. In
Marzetti v.
    Marzetti
, [1994] 2 S.C.R. 765, at p. 794, the Supreme Court described s.
    68 as a complete code governing the income of a bankrupt, and held that any
    proceedings to claim a share of the earnings of a bankrupt had to be brought
    under s. 68. A trustee therefore looks to s. 68 to determine what portion, if
    any, of the bankrupts revenues forms part of the bankrupts estate available for
    distribution to creditors:
Re
Landry
(2000), 50 O.R. (3d) 1
    (C.A.), at para. 26, and
Watt v. Beallor Beallor Burns Inc.
(2004), 1 C.B.R. (5th) 141, affd (2004),
1 C.B.R. (5th) 149 (Ont. C.A.).

[22]

Total
    income is defined in s. 68(2) of the
BIA
as including:

(a) a bankrupts revenues of whatever nature or from whatever
    source that are earned or received by the bankrupt between the date of the
    bankruptcy and the date of the bankrupts discharge, including those received
    as damages for wrongful dismissal, received as a pay equity settlement or received
    under an Act of Parliament, or of the legislature of a province, that relates
    to workers compensation; but

(b) does not include any amounts received by the bankrupt
    between the date of the bankruptcy and the date of the bankrupts discharge, as
    a gift, a legacy or an inheritance or as any other windfall.

[23]

Re

Millin
(2005), 13 C.B.R. (5th) 91 (B.C.S.C.), at para. 34, held that
    the revenues described in s. 68(2)(a) should be a substitution for income,
    akin to income, in the nature of income or to have retained its (previous)
    character of income. Examples of payments that have been held to be
    encompassed by the s. 68(2)(a) definition of total income include lost
    wages, disability payments, severance payments, and income tax refunds:
Marzetti
;

Wallace v. United Grain Growers Ltd.
,
[1997] 3 S.C.R. 701;
Re Ali
(1987), 57 O.R. (2d)
    685 (S.C.);
Re Cole
(1995), 32 C.B.R. (3d) 213 (B.C.S.C.);
Re
    Doucet
(1992), 19 C.B.R. (3d) 249 (N.B.Q.B.);
Re Giroux
(1983), 41
    O.R. (2d) 351 (H.C.J.);
Re Greening
(1989), 73 C.B.R. (N.S.) 24
    (N.B.Q.B.) and
Re Rogers
(1993), 18 C.B.R. (3d) 239 (N.S.S.C. (Reg.)).

[24]

Surplus
    income is defined in s. 68(2) as the portion of a bankrupt individuals total
    income that exceeds that which is necessary to enable the bankrupt individual
    to maintain a reasonable standard of living, having regard to the applicable
    standards. Under s. 68(1), the Superintendent must establish, by Directive,
    the standards for determining the surplus income of an individual bankrupt, and
    the amount that a bankrupt who has surplus income is required to pay to the
    estate of the bankrupt. As stated in Directive 11R-2014, the Directive is
    intended to assist the trustee in determining equitably and consistently the
    portion of the bankrupts income that should be paid into the bankrupts
    estate: Industry Canada, Office of the Superintendent of Bankruptcy Canada,
    Directive No. 11R2-2014 (March 18, 2014), at p. 2. The Directive is updated
    annually so as to reflect current standards based on information produced by
    Statistics Canada. Superintendents Directive No. 11R2-2012 was applicable to
    the matters in issue in this appeal.

[25]

Under
    ss. 68(3) and (4) of the
BIA
, the Trustee is required to determine
    whether the bankrupt has surplus income and, if so, fix the amount the bankrupt
    is required to pay to the estate. In making that determination, the trustee is
    to have regard to the applicable standards and to the personal and family
    situation of the bankrupt. Under the statutory scheme, the trustee obtains
    proof of income and expense information for the bankrupts family unit (which
    includes the bankrupt), determines the total monthly income of the bankrupts
    family unit, deducts certain non-discretionary expenses such as spousal and
    child support payments and expenses associated with a medical condition, and
    then uses the standards in the applicable Superintendents Directive to ascertain
    whether there is any surplus income. Subject to certain adjustments, if the
    bankrupt has monthly surplus income equal to or greater than $200, the bankrupt
    is required to pay 50 per cent to the estate for the benefit of creditors. Other
    provisions in the Superintendents Directive address the duration of the
    payments of surplus income.

[26]

Broadly
    speaking therefore, s. 68 reflects a balance between the interests of a
    bankrupts unsecured creditors to share in the bankrupts estate and a
    bankrupts ability to maintain a reasonable standard of living. The Supreme
    Court has held that s. 68 is to be interpreted broadly having regard to the  family
    responsibilities and personal situation of the bankrupt:
Wallace
, at
    paras. 67-68.  As stated in
Marzetti
, this approach reflects an
    overriding concern for the support of families.  Moreover, s. 68(2)(a) is to
    be interpreted in a manner that is consistent with the fresh start principle
    that underlies the bankruptcy regime.

[27]

As
    is evident from the language of the
BIA
, revenue earned or received
    after a bankrupts discharge does not fall within s. 68.

Trustees Motion for Directions

[28]

The
    Trustees motion for directions proceeded in two stages.

[29]

The
    first stage addressed whether the settlement payment allocation of $100,000 for
    future loss of competitive advantage constituted a capital asset and therefore
    was property of the bankrupt appellant available for distribution to creditors
    pursuant to s. 67 of the
BIA

or, alternatively, fell within the
    purview of s. 68.

[30]

On
    January 6, 2011, Wilton-Siegel J. determined that this sum was not property of
    the bankrupt under s. 67 of the BIA:
Re Conforti
, 2012 ONSC 199, 84
    C.B.R. (5th) 239. Applying the purposive approach described in
Wallace
,
    he determined that the essential nature of the $100,000 payment was income and it
    therefore fell within s. 68 of the
BIA
.

[31]

No
    one sought to appeal this order.

[32]

The
    second stage of the motion proceeded before Spence J. (the motion judge) and
    resulted in the decision under appeal. The Trustee sought directions on what
    was to be included in the appellants total income calculation and whether
    conditions should be imposed on the appellants proposed discharge from
    bankruptcy.

[33]

The
    motion judge addressed numerous proposed inclusions in the total income
    calculation. First, he determined that the motor vehicle accident settlement
    payment of $120,000 that was allocated to pain and suffering was not to be
    included in the s. 68 total income calculation. No appeal is taken from that
    determination.

[34]

Secondly,
    the motion judge considered whether the motor vehicle settlement payment of $100,000
    that was allocated to future loss of competitive advantage should be included
    in full as income in the year it was received or pro-rated over the years the
    replaced loss would have been earned. Relying on
Re Berridge
, 2002 ABQB 884, 38 C.B.R. (4th) 172, he
concluded
    that the $100,000 was to be pro-rated over the appellants prospective 15
    working years and then an amount representing his four years of bankruptcy was
    to be included in the appellants total income calculation. This sum amounted
    to $26,667. The appellant appeals that determination insofar as it relates to
    the four year calculation.

[35]

Thirdly,
    applying a similar principle, the trial judge concluded that in theory, the 2009
    SABs settlement payment of approximately $21,000 could be prorated. However, as
    the appellant had immediately paid the money to Mr. Crupi, the inescapable
    inference was that these funds were not needed for his family. As such, rather
    than prorating the $21,000 over a number of years, it was properly included in the
    appellants total income calculation for 2009, the year of receipt. The
    appellant appeals this portion of the motion judges order.

[36]

Fourthly,
    the motion judge did not accept the appellants argument that the financial assistance
    payments should be excluded from the total income calculation. While he did
    accept that
prima facie
the payments constituted a loan, he reasoned
    that they were offset by a debt which was a provable claim in the bankruptcy
    proceedings and which would either be paid or discharged. In these
    circumstances, he considered it reasonable and fair to treat the financial assistance
    payments as income received in each of the years of bankruptcy. As such, the
    motion judge ordered that those amounts be included in the appellants total income
    calculation. The appellant appeals this portion of the motion judges order.

[37]

Using
    the Trustees calculations but adjusting them to incorporate his conclusions,
    the motion judge ordered the appellant to pay $27,986.28 on account of surplus
    income.

[38]

Lastly,
    the motion judge considered the appellants conduct. He noted the appellants
    failure to disclose the settlement payments and his false statement in his
    Statement of Affairs that he had never been involved in civil litigation from
    which he might receive property or money. The motion judge observed that
    counsel for the bankrupt had conceded that a penalty would be in order. As a
    condition of his discharge from bankruptcy, the appellant was ordered to pay a
    penalty of $15,000 to the estate.

[39]

The
    bankrupt was therefore ordered to pay $27,986.28 on account of surplus income
    plus the penalty of $15,000 for a total of $42,986.28. On payment of the sum of
    $42,986.28, the appellant would be discharged from bankruptcy.

Analysis

(a)     Financial Assistance

[40]

As
    mentioned, the appellant submits that the motion judge erred in including the financial
    assistance payments in the appellants total income calculation. I agree.

[41]

The
    motion judge found that the financial assistance payments constituted a loan. This
    was consistent with the holding in
Re Perry
,
2012 NSSC 446, 3 C.B.R. (6th) 293 (Reg.), which dealt
    with a similar financial assistance agreement.

[42]

The
    appellant was not bankrupt in February 2009 when he signed the agreement and gave
    the assignment to the Government. The assignment was security to ensure
    repayment of the loan made by the Government to the appellant. At the time, it
    was open to him to give an assignment of the fruits of his personal injury
    action. As noted in
Royal Bank of Canada v. Woodhouse
(1997), 33 O.R.
    (3d) 47 (Ont. C.A.) and
Frederickson v. Insurance Corp. of British Columbia
(1986),
    28 D.L.R. (4th) 414 (C.A.), affd [1988] 1 S.C.R. 1089, such an assignment is
    valid.

[43]

The
    Trustee never challenged the assignment, or put the Government on notice. The Government
    did not file a proof of claim in the bankruptcy and there was no evidence
    before the court on the issue of perfection. The Government loan cannot be
    described as a substitution for income, akin to income, in the nature of income
    or to have retained its (previous) character of income.  Subject to the issue
    of perfection, it would appear to be a secured debt.  The motion judges
    decision left the appellant exposed to an obligation to repay 100 per cent of
    the debt to the Government, while the inclusion of this amount in the
    appellants total income calculation effectively imposed an additional payment
    obligation on him.

[44]

In
    my view, the motion judge erred in including approximately $38,000 on account
    of the financial assistance payments in the appellants total income
    calculation. I would allow the appeal in this regard.

(b)     Future Care, Housekeeping and Costs

[45]

The
    appellant also submits that the motion judge erred in including the settlement
    allocations totalling $55,000 for future care ($7,000), housekeeping ($15,000)
    and costs, disbursements and HST ($33,000) less an additional amount in legal
    fees for a net inclusion of $39,000 in the total income calculation.

[46]

I
    agree.

[47]

All
    $33,000 of the $55,000 was paid in legal costs, disbursements and HST. The motion
    judge erred in treating any part of this amount as income received by the
    appellant.

[48]

The
    appellant submits that the remaining $22,000 allocated to future care and
    housekeeping constituted expenses associated with a medical condition under s.
    5(3)(d) of the Superintendents Directive. As such, he argues that these sums ought
    to have been deducted from the income of the appellants family unit and ought
    not to have formed part of the total income calculation. Alternatively, he
    argues that the payments are akin to damages for pain and suffering and ought
    not to be included in income.

[49]

Section
    5(3) deductions from income are non-discretionary in nature. Indeed, s. 5(3)
    expressly refers to them as such. As mentioned, the deductions include such
    things as child and spousal support payments. The damages allocated for the
    cost of care and housekeeping services cannot be so characterized. They are
    amounts paid to the appellant to be used as he chooses and hence are
    discretionary. As such, they do not constitute deductions from total income
    under s. 5(3) of the Superintendents Directive.

[50]

They
    are, however, damages that are personal to the appellant and bear a close
    relationship to damages on account of pain and suffering. There is extensive
    support for the proposition that damages for pain and suffering do not fall
    under s. 67 or s. 68 of the
BIA
:
Re Holley
(1986), 54 O.R.
    (2d) 225 (C.A.) and
Re Hollister
, [1926] 3 D.L.R. 707 (Ont. H.C.J.). As
    stated by Goodman J.A. in
Re Holley
: it is not the policy of the law
    to convert into money for the creditors the mental or physical anguish of the
    debtor. The damages allocated to future care and housekeeping are intended to
    alleviate the appellants injured state. It is therefore appropriate to treat
    them in the same manner as damages for pain and suffering.

[51]

I
    would therefore allow the appeal so as to exclude the amount of $39,000
    (representing the $55,000 less $16,000 in additional costs) from the total
    income calculation.

(c)     SABs Settlement Proceeds

[52]

The
    appellant argues that the motion judge erred in including all of the SABs
    settlement proceeds of approximately $21,000 in the appellants total income
    calculation in 2009.

[53]

I
    disagree.

[54]

The
    appellant paid all of the proceeds to Mr. Crupi.  He did not disclose any debt
    owed to Mr. Crupi in his statement of affairs; he did not disclose the debt to
    his Trustee; and he did not disclose to the Trustee that he had paid the full
    sum of $21,892.59 to Mr. Crupi.  In these circumstances and based on the record
    before him, it was open to the motion judge to treat this lump sum payment as
    income in the year of receipt.  I would not give effect to this ground of
    appeal.

(d)     Pro-Rating Calculation for Loss of
    Future Competitive Advantage Allocation

[55]

Before
    the motion judge, the Trustee argued that all of the funds allocated to future loss
    of competitive advantage should be included in the appellants total income
    calculation in the year of receipt whereas the appellant argued that the
    allocation should be pro-rated over the appellants years in bankruptcy
    relative to his estimated remaining work life of 15 years. The motion judge
    acceded to the appellants submissions but applied a fraction of 4/15.

[56]

The
    appellant submits that the motion judge erred in using the 4/15 fraction in
    pro-rating the allocation for loss of future competitive advantage. No issue is
    taken with the denominator, which, while not exact, is a reasonable estimate of
    the appellants remaining working life of 15 years calculated from the date of
    the settlement.  Rather, the appellant argues that the numerator is in error
    and that the pro-rating fraction should have been 2/15 reflecting the two years
    between the settlement of the personal injury action on February 10, 2010 and
    the appellants discharge in May 2012 and not the 4/15 applied by the motion judge.

[57]

The
    allocation on account of future loss of competitive advantage is in the nature
    of a general damages payment and, as such, the date of the settlement is the
    proper commencement date for the calculation. The motion judge correctly pro-rated
    the settlement payment of $100,000 over 15 years but used the September 24,
    2009 date of the assignment into bankruptcy and the May 2012 date of discharge
    as the relevant dates for the purpose of calculating the appellants total
    income. Instead, the relevant dates were February 10, 2010 and May 2012.  These
    dates result in a fraction of 2/15.

[58]

As
    a result of this and the other adjustments relating to the financial assistance
    payments and the settlement payments on account of future care, housekeeping
    and costs, there is no surplus income to be paid by the appellant.  Accordingly,
    the appeal relating to surplus income is allowed. In the circumstances, it is
    unnecessary to address the remaining submissions on surplus income that were
    advanced by the appellant including the motion judges alleged methodological
    errors and the applicability of the
Charter of Rights and Freedoms
.

(e)

Penalty

[59]

This
    leaves the issue of the penalty. In the event that the appeal on surplus income
    were allowed, the appellant had no objection to the penalty of $15,000. Indeed,
    before this court, the appellants counsel properly acknowledged that the
    appellant deserved to be sanctioned for his conduct. I agree. The penalty of
    $15,000 is therefore affirmed.

Disposition

[60]

For
    these reasons, I would allow the appeal in part.  I would vary the order under
    appeal by removing the requirement to pay surplus income and by reducing the
    payment of $42,986.28 payable by the appellant to $15,000.

[61]

The
    parties are to make brief written submissions on costs.

Released:

APR 20 2015                                    S.E.
    Pepall J.A.

JL                                                    I
    agree John Laskin J.A.

I
    agree R.A. Blair J.A.

[1]
The Trustee did not take issue with the settlement allocation.


COURT OF APPEAL FOR ONTARIO

CITATION: D.G. v. A.F., 2015 ONCA 290

DATE: 20150429

DOCKET: C59175

Laskin, Lauwers and Hourigan JJ.A.

BETWEEN

D.G.

Respondent (Appellant)

and

A.F.

Applicant (Respondent)

D.G., acting in person

A.F., acting in person

Heard:  April 10, 2015

On appeal from the order of Justice Francine E. Van Melle
    of the Superior Court of Justice, dated July 11, 2014, with reasons reported at
    2014 ONSC 4193.

Lauwers J.A.
:

[1]

In the final order under appeal, the motion judge set the appellants
    child support obligation and her contribution to the childrens day care
    expenses. She also permitted the respondent to move with the children from
    Halton to Hamilton and ordered the appellant to pay trial costs.

Background

[2]

The background to this high-conflict family matter is set out in the
    motion judges reasons and in the trial judges reasons, reported at 2012 ONSC
    764. The motion judges task was to complete the review of the case ordered by
    the trial judge, and to deal with trial costs.

[3]

The major dispute between the parties throughout concerns custody of and
    access to their children. At every opportunity, including this appeal, the
    appellant has earnestly sought to have reversed the trial judges award of
    custody to the respondent and supervised access to the appellant. In her factum,
    the appellant raises concerns with the trial decision, showing that she does
    not accept the trial outcome despite the dismissal of her appeal. She seeks custody
    of the children, which is not a remedy that is open to her on this appeal; she has
    been unwilling to work within the custody and access regime that resulted from
    the trial.

[4]

In the decision under appeal, the motion judge noted, at para. 4:

I have told [D.G.] on numerous occasions that it is up to her
    to provide names and resumes for proposed access supervisor. I have described
    to her the qualifications for an access supervisor. I have suggested names to
    her.

[5]

As the motion judge explained, at para. 5:

Each time this matter is before me I have indicated to [D.G]
    that I would like nothing better than to get her access started. She, however,
    seems completely unable to comply with the conditions that I have set out.

The motion judge added, at para. 15:

[N]o matter how [D.G.] feels about the custody and access
    orders in this proceeding she must comply with my Orders so that she can see
    her children. [A.F.] wants her to see the children. He understands that it is
    important for the children to have a relationship with their mother. So much so
    that he has put forward his own suggestions for an access supervisor.

[6]

The motion judge observed that respondents efforts at identifying an
    access supervisor who would be acceptable to the appellant have not been
    successful, noting, at para. 3,

[A]ny name put forward by him will be viewed with suspicion by [D.G.].
    Indeed, despite the fact that [D.G.] is not seeing the children as a result of
    her own failure to propose an adequate supervisor she states, yet again, that [A.F.]
    is withholding the children from her.

[7]

This appeal, simply said, and most unfortunately, has postponed the
    appellants compliance and prolonged the time during which her children have
    not had access to her.

Analysis

(1)

Did the motion judge improperly seize herself of the matter?

[8]

The appellants main complaint in this appeal is that the motion judge
    chose to remain seized of this matter because the trial judge, who had seized
    himself, has been transferred from the jurisdiction. The motion judge took this
    role on when she was Regional Senior Justice and has retained jurisdiction
    since stepping down from that position.

[9]

The appellant seeks to escape the motion judges influence. She argues
    that the motion judge had no basis for seizing herself of the case
    indefinitely. The appellant argues that this effectively puts the motion judge
    in a conflicting position because any motions to change will inevitably involve
    the motion judge in reviewing her own decisions. The appellant fears that the motion
    judge will not treat her fairly.

[10]

I
    would reject this ground of appeal.

[11]

Active
    case management is one of the underlying philosophies of the
Family Law
    Rules
, O. Reg. 114/99. Rule 2(5) places an obligation on courts to
    actively manage cases in order to promote just resolutions. Active case
    management is defined in the
Rules
as including the early
    identification of issues in a case, setting timetables or otherwise controlling
    the process of the case.

[12]

Rule
    39(9) lists the functions of a case management judge, who is required to
    supervise the progress of the case, to conduct conferences and to hear motions.
    Rule 39(9) is seen as the gold standard of case management, but it only applies
    to cases in unified Family Court jurisdictions. Since this case was not decided
    at a unified Family Court site, the more sparse case management provisions of r.
    41 apply. This rule does not explicitly list the functions of a case management
    judge. This distinction in the
Rules
reflects the fact that unified
    sites historically had more judicial resources and therefore could provide more
    active case management.

[13]

However,
    nothing in the
Family Law Rules
precludes a judge from using her
    inherent jurisdiction, and the obligation to actively case manage under r. 2(5),
    to seize herself of a case. This is the best means of promoting the objectives
    of the Rules and ensuring that cases are dealt with justly as required by r. 2(3).

[14]

In
Norman v. Connors
, 2010 ONSC 1975, [2010] O.J. No. 1564, at para. 34, Gordon
    J. noted that in non-unified Superior Court sites, litigants are sometimes
    denied the benefit of active case management as described in r. 39.  Despite
    the lack of resources, he stated that the court must step in and impose case
    management, by relying on the general provisions of the
Rules
and the
    courts inherent jurisdiction.  This is particularly so in high conflict
    cases.

[15]

I
    would agree with this approach to case management. It permits reasonably quick
    access to justice before a judge who is familiar with the relevant facts and
    with the parties. It is proportionate, within the meaning of r. 2(3), since the
    frequent resort to the court in high-conflict cases would otherwise rapidly
    consume too many judicial resources, as judge after judge is forced to learn
    the details of an ever-burgeoning file.

(2)

Does the Supreme Courts decision in
Doucet-Boudreau v. Nova Scotia
have application?

[16]

The
    appellant makes an allied argument that once the motion judge completed the
    tasks left by the trial judge in his decision, she was
functus officio
and could no longer exercise jurisdiction. For this proposition, she cites
Doucet-Boudreau
    v. Nova Scotia (Minister of Education)
, 2003 SCC 62, [2003] 3 S.C.R. 3. In
    my view, for the reasons that follow,
Doucet-Boudreau

has
    virtually no application to this appeal.

[17]

Doucet-Boudreau
was a case about minority language education rights in Nova Scotia under s. 23
    of the
Canadian Charter of Rights and Freedoms
, Part I of the
Constitution
    Act
,
1982, and particularly, the remedial jurisdiction of a trial
    judge under s. 24(1). The issue before the Supreme Court was set out at
    para.12:

The main issue in the appeal is simply this: having found a
    violation of s. 23 of the
Charter
and having ordered that the Province
    make its best efforts to provide homogeneous French-language facilities and
    programs by particular dates, did the Nova Scotia Supreme Court have the
    authority to retain jurisdiction to hear reports from the Province on the status
    of those efforts as part of its remedy under s. 24(1) of the
Charter
?

[18]

The
    majority concluded that the trial judge had not violated the doctrine of
functus
    officio
by retaining jurisdiction to hear reports over the Provinces
    progress in remedying the
Charter
violation that he had found
.

[19]

The
    appellant cites para. 79 of the majority decision, where the Court explains the
    basis of the doctrine of
functus officio
:

It is clear that the principle of
functus officio
exists to allow finality of judgments from courts which are subject to appeal
    (see also
Reekie v. Messervey
, [1990] 1 S.C.R. 219, at pp. 222-23).
    This makes sense: if a court could continually hear applications to vary its
    decisions, it would assume the function of an appellate court and deny
    litigants a stable base from which to launch an appeal. Applying that aspect of
    the
functus
doctrine to s. 23(1), we face the question of whether
    the ordering of progress reports denied the respondents a stable basis from
    which to appeal.

[20]

The
    appellant also cites para.105 from the dissent:

A court purporting to retain jurisdiction to oversee the
    implementation of a remedy, after a final order has been issued, will likely be
    acting inappropriately on two levels. First, by attempting to extend the
    court's jurisdiction beyond its proper role, it will breach the separation of
    powers principle. Second, by acting after exhausting its jurisdiction, it will
    breach the
functus officio
doctrine.

[21]

The
    reasoning in
Doucet-Boudreau
has only limited application to this
    appeal, for the following reasons.

[22]

First,
    the court must exercise great caution before migrating concepts from
    constitutional cases to other areas of the law. For example, the separation of
    powers principle was engaged in
Doucet-Boudreau
, and formed the basis
    of the minoritys position that implementation of the
Charter

remedy
    was the exclusive responsibility of the provincial government.

No
    similar concept applies in this family law case.

[23]

Second,
    the majority in
Doucet-Boudreau
found, at para. 80, that the
    requirement for the Province to report back to the trial judge did not engage
    the
functus officio
doctrine since it did nothing to undermine the
    provision of a stable basis for launching an appeal. That is also true in this
    case. Any successful motion to vary would result in a final order that would be
    appealable, just like the appellants appeal of the motion judges decision.

[24]

Third,
    the majority found, at para. 81, that the
functus officio

doctrine
    yields to the rules of civil procedure insofar as they allow courts to vary or
    add to their orders so as to carry them into operation or even to provide other
    or further relief than originally granted.

[25]

This
    fits comfortably with the concept of motions to change in family cases. Family
    law orders sometimes need to be varied, rescinded or altered based on changing
    circumstances. The
Divorce Act
, R.S.C. 1985, c. 3 (2nd Supp.), the
Federal
    Child Support Guidelines
, S.O.R./97-175, and the
Family Law Rules

all expressly contemplate that final orders will, on occasion, need to be
    altered
.
In this case, the respondent followed the procedure set out in
    the
Family Law Rules
, by bringing a motion to change.  In such
    circumstances, the doctrine of
functus officio

is not
    violated.

[26]

Finally,
    the appellant expresses concern about the motion judges possible partiality to
    the respondent. Actual bias is an independent basis for challenging a decision
    that is not affected by the

functus officio

doctrine. There is
    no evidence in this case that the motion judge was partial to the respondent. The
    motion judges concern for all the parties including the appellant and the
    children is manifest in the language that she uses in her endorsements. The
    fact that she ruled against the appellant does not establish partiality.

[27]

To
    conclude, the Supreme Courts reasoning in
Doucet-Boudreau

does
    not affect this appeal.

(3)

Did the trial judge wrongly award trial costs to the respondent?

[28]

The
    appellant argues that the motion judge wrongly awarded the trial costs to the
    respondent. She states she was not given an opportunity to argue the issue of
    costs, but would have argued that r. 57.01(2) of the
Rules of Civil
    Procedure
, R.R.O. 1990, Reg. 194, applied such that she was entitled to
    costs despite being the unsuccessful party. Further, she would have argued that
    the respondent wrongly gave consent for the childrens therapy, an issue that
    loomed at trial, which she submits is a relevant consideration under r.
    57.01(1)(d) and (g), militating against awarding costs to the respondent.

[29]

The
    issue of costs was live before the motion judge; the appellant should have been
    prepared to argue it, but was not.

[30]

The
    respondent states that he provided evidence of the legal expenses that he
    incurred to the motion judge along with offers to settle. He was seeking about
    $90,000 and was awarded $80,000.

[31]

It
    is quite evident that the motion judge made the costs award based on the
    respondents success at trial, and her review of the material, which implicitly
    addressed the r. 57 factors. There is, on this record, no basis for the
    argument that the appellant was entitled to costs as an unsuccessful party.
    Having ordered the award she did, the motion judge was not prepared to require
    each party to bear its own costs. Therefore, this ground of appeal also fails.

Disposition

[32]

I
    encourage the appellant to comply with the access orders and to make the
    required arrangements as soon as possible so that, with successful experience,
    more normal access arrangements could be justified. There is no short cut
    available to the appellant.

[33]

The
    appeal is dismissed. If either party wishes to seek the costs of this appeal,
    written submissions of no more than five pages in length may be served and
    filed within 10 days of the date of this decision.

Released: April 29, 2015 PL

P.
    Lauwers J.A.

I
    agree John Laskin J.A.

I
    agree C.W. Hourigan J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: D'Antonio v. Monaco, 2015 ONCA 274

DATE: 20150421

DOCKET: C57514

Sharpe, van Rensburg and Benotto JJ.A.

BETWEEN

Alvaro DAntonio

Plaintiff (Respondent)

and

Elio Monaco
, Roko Dzeko and 2167661
    Ontario Ltd.

Defendants (
Appellant
)

Micheal Simaan and Nathaniel Erskine-Smith, for the
    appellant

Rocco DiPucchio and Shaun F. Laubman, for the respondent

Heard: March 25, 2015

On appeal from the judgment of Justice Ruth E. Mesbur of
    the Superior Court of Justice, dated July 29, 2013, with reasons reported at 2013
    ONSC 5007, and from the costs order, dated October 1, 2013, with reasons
    reported at 2013 ONSC 6157.

Sharpe J.A.:

FACTS

[1]

The appellant Elio Monaco, the respondent Alvaro DAntonio and their
    friend Roko Dzeko entered into a business arrangement to acquire a property and
    to erect a large commercial sign on it. DAntonio could provide the financing,
    Monaco had experience in commercial real estate and Dzeko had some expertise in
    the commercial sign business.

[2]

The three men incorporated 2167661 Ontario Ltd. (216) to buy the
    property. They each acquired 100 shares, one third of 216s 300 issued shares.
    DAntonio provided $445,000 to 216. To secure that investment, Monaco and Dzeko
    signed promissory notes in favour of DAntonio for one third of that amount.
    They also signed Share Pledging Agreements as security for their promissory
    notes, giving DAntonio the right to forfeit their pledged shares upon written
    notice of default on the promissory notes. Finally, they each signed an
    Acknowledgment of Future Assumption of Unpaid Shareholders Loan (Assumption
    Agreement) promising to assume any unpaid debt to DAntonio of the other in exchange
    for receipt of the others shares. These agreements were executed in early
    April 2008.

[3]

In the initial stages, the project encountered legal and consequent
    financial difficulties and more funds were required from the shareholders.
    Dzeko was unable to satisfy those calls and, on December 13, 2008, he agreed to
    sign an Ownership Alteration Agreement in favor of DAntonio and Monaco. That
    agreement provided that if Dzeko failed to provide the funds to 216 by December
    15, 2008, 100% of his interest in 216 shall be transferred and be divided
    equally between DAntonio and Monaco. Dzeko failed to provide the funds and he
    was no longer involved in the business.

[4]

Monaco assumed responsibility for managing the property. He arranged a
    profitable lease for the erection of a commercial sign and another lease for a building
    on the land. DAntonio disputed Monacos management of the property and the
    management fees he was paying himself.

[5]

Of the $222,500 Monaco owed DAntonio - for the one third interest in
    216 that he acquired in the initial deal and for his half of Dzekos shares acquired
    pursuant to the Ownership Alteration Agreement - Monaco paid DAntonio $100,000
    on November 12, 2009, and a further $100,000 on March 2, 2010. He withheld
    payment of the remaining $22,500 he owed.

[6]

DAntonio commenced this action in December 2010 claiming, among other
    things, breach of fiduciary duty, oppression, and repayment of excessive
    management fees. He also sought a declaration that he was the sole owner of all
    the shares of 216, or, alternatively, the owner of two thirds of the shares.

[7]

The trial judge allowed the claims for breach of fiduciary duty and
    oppression, and made several specific remedial orders including ordering
    repayment of certain management fees. The trial judge rejected DAntonios
    claims for 100% or 66.67% ownership of the shares. She found that Monaco was
    only entitled to the shares he had paid for and accordingly declared DAntonio
    to be the owner of 55% of the shares. She also ordered a shot-gun buy-sell
    arrangement of 216s shares with Monaco making the buy-sell offer.

[8]

In a separate costs order, the trial judge ordered Monaco to pay costs
    fixed at $145,000 all inclusive.

ISSUES

[9]

The only issues raised by Monaco on appeal are the declaration as to
    ownership of the shares in 216 and a related issue as to costs of the trial.
    Monaco argues that the trial judge erred in failing to declare the parties to
    be 50% owners of the shares provided he (Monaco) satisfied the outstanding
    balance of his indebtedness, namely, $22,500. Needless to say, 5% of the shares
    of 216 now have a value substantially greater than $22,500.

ANALYSIS

[10]

Monacos
    argument is that he acquired half of Dzekos shares by virtue of the operation
    of the Ownership Alteration Agreement, and that the trial judge erred in law in
    finding that his failure to pay the outstanding $22,500 allowed DAntonio to
    forfeit or otherwise acquire more than 50% of the shares.

[11]

For
    the following reasons, I am unable to agree with that submission.

[12]

The
    interpretation of the relevant agreements and the intentions of the parties was
    a question of mixed fact and law and deference is owed to the decision of the
    trial judge:
Sattva Capital Corp. v. Creston Moly Corp
., 2014 SCC 53, [2014]
    2 S.C.R. 633, at para. 50. In my view, the trial judges interpretation and the
    result she reached were entirely reasonable in the circumstances of this case.

[13]

Monaco
    argues that the Ownership Alteration Agreement simply states that one half of
    Dzekos shares were transferred to him upon Dzekos default and that there is
    nothing else in that agreement that permits DAntonio to forfeit all or any of
    those shares for non-payment of the promissory notes. Monaco concedes that when
    he acquired Dzekos shares by virtue of the Ownership Alteration Agreement it
    was an implied term that he assumed responsibility for 50% of the debt which
    Dzeko owed to DAntonio, but he submits that the Share Pledging Agreement and
    the forfeiture provisions in that agreement do not apply to the shares assigned
    by Dzeko. Monaco also submits that, in any event, DAntonio did not give the written
    notice required to trigger forfeiture under that agreement.

[14]

I
    am unable to accept Monacos submission that it is possible to read the
    Ownership Alteration Agreement as a stand-alone contract that confers rights
    unqualified by the Share Pledging Agreements and the Assumption Agreements. I
    agree with what is implicit in the trial judges assessment of this issue,
    namely, that the Ownership Alteration Agreement is simply one piece of a larger
    contractual matrix that includes the promissory notes, the Share Pledging
    Agreements and the Assumption Agreements.

[15]

The
    most obvious point is that the Ownership Alteration Agreement makes no
    reference to the indebtedness associated with Dzekos shares. As I have
    mentioned, Monaco concedes that it was an implied term of the Ownership
    Alteration Agreement that he assumed responsibility for half of Dzekos debt to
    DAntonio. The terms of that debt could only be determined by reference to the
    promissory notes, the Share Pledging Agreements, and the Assumption Agreements.
    I find it impossible to see how Dzekos shares could be transferred pursuant to
    the Ownership Alteration Agreement unburdened by the security afforded by the
    Share Pledging Agreements. DAntonio had bargained for security for the debt
    attributable to the shares and there is nothing in the dealings between the
    parties or in the wording of the Ownership Alteration Agreement to support the
    contention that DAntonio surrendered that security.

[16]

In
    other words, to understand all the rights and obligations pertaining to the
    shares in 216, it is necessary to read all of these agreements as a whole.
    Monaco acquired Dzekos shares by operation of the Ownership Alteration
    Agreement, but he was obliged to pay for those shares by the Assumption
    Agreement and the shares were subject to DAntonios security for the debt by
    virtue of the Share Pledging Agreement.

[17]

Monaco
    relies on para. 45 of the trial judges reasons, where she stated:

The Ownership Alteration Agreement did not provide for any
    requirement that Monaco pay for Dzekos shares, or any timetable for his doing
    so. It seems to me there would be no legal basis for DAntonio simply to assert
    that he now owned all of Dzekos shares.

[18]

The
    trial judges rejection of DAntonios claim to all Dzekos shares as being
    inconsistent with the contractual documents does not dispose of the very
    different claim being advanced by Monaco on appeal. Nor should this portion of
    her reasons be read in isolation or without regard to the position taken by
    Monaco at trial. Both in his statement of defence and in his evidence, Monaco
    admitted that he made the $200,000 of payments pursuant to the Acknowledgement
    of Debt and promissory note. In my view, there is nothing in para. 45 of the
    trial judges reasons inconsistent with the proposition that Monaco acquired
    the Dzeko shares subject to the burdens imposed by the Share Pledging Agreement,
    which gave DAntonio the right to retain shares that had been pledged in the
    event of non-payment.

[19]

I
    see no basis to interfere with the trial judges finding that the statement of
    claim amounted to written notice sufficient to trigger the forfeiture provision
    of the Share Pledging Agreement. This was a factual finding which attracts
    deference on appeal. The statement of claim gave unequivocal notice that
    DAntonio claimed forfeiture of the shares. Monaco made no attempt to pay the
    $22,500 owing for more than two years. The trial judge reasonably found, at
    para. 113 of her reasons, that while Monaco was entitled to a reasonable period
    of time to make the payment after receiving written notice, more than two years
    was beyond a reasonable period.

[20]

The
    appeal as to costs is contingent upon success on the substantive issue and as I
    would dismiss the substantive appeal, I would also dismiss the costs appeal.

DISPOSITION

[21]

Accordingly,
    I would dismiss the appeal and award costs to the respondent in the agreed
    amount of $22,000, inclusive of disbursements and taxes.

Released: April 21, 2015

(RJS)
    Robert J. Sharpe J.A.

I
    agree K. van Rensburg J.A.

I agree M.L. Benotto J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Enviro Paving Corporation v.
    Robar Industries Limited, 2015 ONCA 245

DATE: 20150410

DOCKET: C59487

Laskin, Lauwers and Hourigan JJ.A.

BETWEEN

Enviro Paving Corporation

Plaintiff (Appellant)

and

Robar Industries Limited and Polyval Coatings
    Inc.

Defendants (Respondents)

Shane P. Murphy, for the appellant

M. Katzman, for the respondent

Heard: April 7, 2015

On appeal from the order of Justice Stephen E. Firestone of
    the Superior Court of Justice, dated September 19, 2014.

APPEAL BOOK ENDORSEMENT

[1]

We agree with the reasons of Firestone J. The appeal is dismissed.

[2]

Robar has cross-appealed and asks that we dismiss Enviros claim on the
    ground it is frivolous and vexatious, or an abuse of process. Although we have
    sympathy for Robars position, before Firestone J. it sought either a stay or a
    dismissal  it was granted a stay, and we think it inappropriate to vary that
    order in this court. The cross-appeal is therefore dismissed. Robar is entitled
    to its costs in this court in the amount of $6000 all in.


COURT OF APPEAL FOR ONTARIO

CITATION: Erickson & Partners v. Ontario (Health and
    Long-Term Care), 2015 ONCA 285

DATE: 20150427

DOCKET: C59228

Feldman, Benotto and Brown JJ.A.

BETWEEN

Erickson & Partners

Applicant (Appellant)

and

Her Majesty the Queen in right of Ontario
    (Ministry of Health

and Long-Term Care)

Respondent (Respondent)

Brian A. Babcock, for the appellant

Rita V. Bambers and Sonal Gandhi, for the respondent

Heard: April 1, 2015

On appeal from the judgment of Justice John dePencier
    Wright of the Superior Court of Justice, dated July, 21, 2014, together with an
    erratum dated October 20, 2014, with reasons reported at 2014 ONSC 4339.

Brown J.A.:

I.

Overview

[1]

Under the
Ontario Health Insurance Act,
[1]
any person who commences an action to recover damages arising out of the
    negligence or other wrongful act of a third party must include a claim on
    behalf of the Ontario Health Insurance Plan (the Plan) for the cost of any
    insured medical services provided to the insured person in respect of the
    injury or disability suffered. Section 39(6) of the General Regulation made
    under the Act
[2]
(the Regulation) prescribes the portion of the costs of the insured persons
    action which the Plan must bear.  At issue on this appeal is the proper
    interpretation of that section.

[2]

The appellant, Erickson & Partners, is a Thunder Bay law firm (the
    Law Firm). One of its partners, Mr. Robert Somerleigh, practices in the areas
    of personal injury and medical malpractice litigation. Many of the actions he
    commences on behalf of clients include subrogated claims for insured services
    on behalf of the Plan.

[3]

A dispute arose between the Law Firm and the Plan (represented in this
    appeal by the respondent, Her Majesty the Queen in Right of Ontario), about the
    validity of certain clauses in the firms contingency fee agreements with
    clients and about how to calculate the Plans share of costs payable by the
    insured person under s. 39(6) of the Regulation.

[4]

The Law Firm commenced two applications, one seeking approval of its
    contingency fee agreements, and the other seeking a declaration regarding how the
    Plans share of costs should be calculated, specifically the meaning of the
    phrase the total recovery of the insured person found in s. 39(6) of the Regulation.

[5]

By judgment dated July 21, 2014, and amended October 20, 2014 (the
    Judgment), the application judge declared that the Law Firms contingency fee
    agreements did not comply with the
Solicitors Act
[3]
and, as will be described below, he interpreted s. 39(6) of the Regulation in a
    manner which accepted only part of the Law Firms submissions.

[6]

The Law Firm appeals from the Judgment only in respect of the
    interpretation of s. 39(6) of the Regulation. The respondent Plan submits that
    although the Judgment in large part was correct, the application judge unduly
    complicated the calculation required by s. 39(6) of the Regulation and this
    court should simplify it.

[7]

For the reasons set out below, I would dismiss the appeal. The
    application judge correctly interpreted s. 39(6) of the Regulation

to
    include the recovery made on behalf of the Plan in the total recovery of the
    insured person in the action. However, I agree with the Plan that in his
    reasons the application judge unduly complicated the treatment of costs
    recovered by an insured person through a judgment or settlement. In these
    reasons I clarify that any such costs are first deducted from the total costs
    payable to the lawyer for the insured person.

II.

The Statutory Framework

[8]

Under the Act, the Plan provides insurance against the costs of insured medical
    services, which include hospital services, medically necessary services
    rendered by physicians, and certain other healthcare services.
[4]
Every person who is a resident of Ontario is entitled to become an insured
    person under the Plan.
[5]

[9]

Where an insured person suffers personal injuries for which he or she
    receives insured services under the Act, and those injuries resulted from the
    negligence or other wrongful act or omission of another person, the Plan enjoys
    statutory subrogation rights allowing it to recover the costs of those insured
    services. Specifically, s. 30(1) of the Act states:

30. (1) Where, as the result of the negligence or
    other wrongful act or omission of another, an insured person suffers personal
    injuries for which he or she receives insured services under this Act, the Plan
    is subrogated to any right of the insured person to recover the cost incurred
    for past insured services and the cost that will probably be incurred for
    future insured services, and the General Manager may bring action in the name
    of the Plan or in the name of that person for the recovery of such costs.

[10]

The
    Act requires a plaintiff to include, in any action to recover damages arising
    out of the negligence or wrongful act of another, a claim on behalf of the Plan
    for the cost of insured services. Sections 31(1) and 31(2) state:

31. (1) Any person who commences an action to recover
    for loss or damages arising out of the negligence or other wrongful act of a
    third party, to which the injury or disability in respect of which insured
    services have been provided is related shall, unless otherwise advised in
    writing by the General Manager, include a claim on behalf of the Plan for the
    cost of the insured services.

(2) Where a person recovers a sum in respect of the
    cost of insured services, the person shall forthwith pay the sum recovered to
    the Minister of Finance.

[11]

The
    Act also addresses the issue of the Plans responsibility for a portion of the
    insured persons legal costs when that person includes a subrogated claim on
    behalf of the Plan in his or her action. It authorizes the making of
    regulations prescribing procedures for the enforcement of and recovery under
    rights to which the Plan is subrogated, including prescribing the portion of
    the costs of an insured person incurred in an action for the recovery of such
    rights that shall be borne by the Plan.
[6]

[12]

Sections
    39(6) and 39(7) of the Regulation address the Plans responsibility for a
    portion of the insured persons costs. They state:

39. (6) Subject to subsection (8), where an insured
    person obtains a final judgment in an action in which he or she includes a
    claim on behalf of the Plan, the Plan shall bear the same proportion of the
    taxable costs otherwise payable by the insured person, whether on a party and
    party basis or on a solicitor and client basis, as the recovery made on behalf
    of the Plan bears to the total recovery of the insured person in the action or,
    where no recovery is made, as the assessed claim of the Plan bears to the total
    damages of the insured person assessed by the court.

(7) Where a claim is settled, the Plan shall bear the
    same proportion of the taxable costs otherwise payable by the insured person as
    is set out in subsection (6) in respect of a recovery made.

[13]

As
    can be seen, s. 39(6) establishes formulae for cost-sharing between the insured
    person and the Plan in two scenarios: (i) where the insured person makes a
    recovery in the action; and, (ii) where the insured person does not make any
    recovery.

III.

Issues and Decision Below

[14]

This
    appeal concerns the proper calculation of the Plans portion of costs under the
    scenario where the insured person makes a recovery in the action. Section 39(6)
    of the Regulation states that the Plan shall bear the same proportion of the
    taxable costs otherwise payable by the insured personas the recovery made on
    behalf of the Plan bears to the total recovery of the insured person in the
    action. The regulatory language can be represented as a formula, so that the
    Plans proportion of costs equals:

Taxable costs otherwise payable by insured
          person x

recovery made on
          behalf of the Plan
total recovery of the insured person

A.

Total recovery of the
    insured person

[15]

Two
    aspects of this formula are in issue on this appeal. The first concerns the
    correct interpretation of the phrase the total recovery of the insured person
    used in the denominator of the formula. The Law Firm submits that the total
    recovery of the insured person does not include any amount recovered on behalf
    of the Plan, whereas the Plan contends that it does. If the recovery made on
    behalf of the Plan is included, the size of the denominator in the formula
    would increase, thereby reducing the share of the insured persons costs for which
    the Plan would bear responsibility.

[16]

The
    application judge accepted the interpretation advanced by the Plan. He wrote:

[54] While I had no mathematical evidence before me, my
    understanding of the calculation of proportions involves
taking each
    individual claim and apportioning it according to the total of claims
    outstanding
. Similar situations occur not only in personal injury
    litigation affecting OHIP but in the apportioning of child support expenses
    under s.7 of the
Child Support Guidelines
and the distribution of
    bankrupt estates amongst creditors.

[55] This is done by multiplying the recovery made on behalf of
    the plan (which, as we have seen includes a proportion of the fees recovered),
    by the amount of the fees owing divided by the sum of the total recovery by the
    plan and the injured party. [Emphasis added.]

B.

Treatment
    of recovered costs

[17]

The
    second aspect of the formula in issue involves the treatment of costs recovered
    by an insured person from a defendant, either by way of judgment or as part of
    a settlement. The Law Firm submits that one must first determine the proportion
    of an overall costs recovery attributable to the Plan and then add the Plans share
    of the cost recovery to the recovery made on behalf of the Plan which forms
    the numerator of the formula. For its part, the Plan submits that any such cost
    recovery first should be deducted from the total costs payable by the insured
    person, with the result that the regulatory formula is applied to the net
    taxable costs otherwise payable by the insured person.  By way of illustration,
    if the insured person incurred legal costs of $100,000 and received a costs
    payment from the defendant of $25,000, the Law Firms approach would apply a
    cost-sharing formula against the $100,000, whereas the Plans approach would
    first deduct the costs received of $25,000 and then apply the regulatory formula
    against the remaining $75,000 in costs.

[18]

The
    application judge accepted the interpretation advanced by the Law Firm. He
    concluded that the phrase costs otherwise payable by the insured party in s.
    39(6) of the Regulation referred to the costs payable by the injured party but
    for the subrogation provision found in s. 30 of the Act and s. 39(6) of the Regulation.

IV.

Analysis

A.

First
    Issue: The interpretation of the total recovery of the insured person in the
    action

[19]

Neither
    the Act nor the Regulation defines the phrase the total recovery of the
    insured person in the action used in s. 39(6) of the Regulation. Also, as the
    Law Firm accurately observed in its factum, courts of first instance have not
    applied a consistent approach when apportioning costs to the Plan under s.
    39(6).  Although in the majority of reported cases placed before us the courts included
    the recovery made on behalf of the Plan in the total recovery of the insured
    person in the action (as well as in the total damages of the insured person
    assessed by the court where the insured person made no recovery), in none of
    those cases was the court asked to resolve disputed interpretations about the s.
    39(6) apportionment methodology.
[7]

[20]

Starting,
    then, from first principles, the interpretation of s. 39(6) of the Regulation
    requires the court to read the words of the Act and the Regulation in their
    entire context and in their grammatical and ordinary sense harmoniously with
    the scheme of the Act, the object of the Act, and the intention of Parliament.
[8]
As well, when interpreting a regulation, a court must consider the words
    granting the authority to make the regulation in question, in addition to the
    other interpretive factors.
[9]

[21]

The
    Law Firms main submission is that the phrase the total recovery of the
    insured person in the action is limited to the amount of the personal damages recovered
    by the insured person, such as general damages and loss of income, and should
    not include the amount recovered under the Plans subrogated claim.

[22]

I
    disagree. Section 39(6) must be understood within the Acts framework of paying
    the costs of insured medical services and subrogating the Plan to any right of
    the insured person to recover such costs. A person injured by the negligent or
    wrongful act of another may well require medical treatment for the injuries
    suffered. Should the injured person start a lawsuit to recover damages, he or
    she would seek compensation for any amounts spent for medical services to treat
    the injury caused by the negligent act. As a result of the insurance provided
    to Ontario residents under the Act, the Plan pays the costs of insured medical
    services needed by the injured person to treat his or her injuries.

[23]

The
    Act subrogates the Plan to any right of the insured person to recover the cost
    incurred for past insured services and the cost that will probably be incurred
    for future insured services, and requires an insured person to include in an
    action to recover damages for the injury a claim on behalf of the Plan for the
    cost of the insured services.
[10]
The Act also clarifies that the payment by the Plan for insured services is not
    to be construed to affect the right of the insured person to recover the
    amounts paid in the same manner as if such amounts are paidby the insured person.
[11]

[24]

As
    this court explained in
Mason (Litigation guardian of) v. Ontario (Ministry
    of Community and Social Services)
,
[12]
where an insurer is subrogated to the claim of its insured, the claim
nonetheless
    remains that of the insured in whose name and with whose rights the claim must
    be advanced
 [emphasis added]. This court continued, at para. 23, by
    stating:

OHIPs subrogated claim operates in the same way. OHIP does not
    have an independent cause of action. The cause of action remains that of the
    insured person

[25]

Since
    the cause of action for the recovery of the costs of medical services incurred
    as a result of the injury remains that of the injured person, it follows that
    the total recovery of the insured person in the action would include the
    amounts recovered in respect of the subrogated claim advanced on behalf of the
    Plan for the cost of insured medical services. So, too, where no recovery is
    made by the insured person, the total damages of the insured person assessed
    by the court would include the assessed claim of the Plan.

[26]

That
    conclusion finds support in s. 33 of the Act which states:

33. The judge at trial shall, if the evidence permits,
    apportion
the elements of the injured persons loss and damages so as to
    clearly designate the amount of the Plans recovery for the past cost of
    insured services
and separate it from the amount of the Plans recovery of
    future cost of insured services, if any. [Emphasis added.]

That section treats the Plans recovery for the cost
    of past and future insured services as elements of the injured persons loss
    and damages. As such, the Plans costs of insured services would form part of
    the total recovery of the insured person. As well, in the case of no recovery
    by the insured person, the Plans costs of insured services would form part of
    the total damages of the insured person assessed by the court.

[27]

I
    conclude that the application judge correctly included in the total recovery
    of the insured person in the action the recovery made on behalf of the Plan.

B.

Second
    Issue: The treatment of costs recovered by judgment or settlement

[28]

A
    judgment or settlement in favour of an insured person may include an amount for
    his or her legal costs. Before the application judge, the parties disagreed
    over how such a cost recovery should be treated under s. 39(6) of the Regulation
    when determining the proportion of taxable costs otherwise payable by the
    insured person which the Plan should bear. The positions of the parties and
    the conclusion of the application judge were set out in the following portion
    of his reasons:

[37] The plan submits that costs (not including disbursements)
    are accounted for by first applying them to the final solicitors bill and then
    using s. 39(6) to allocate the plans responsibility for its proportionate
    share of the net fees owing. (I.e. net fees equal total taxable fees owing
    minus fees recovered. Plan pays its proportion of the net fees based upon
    damages and interest ascribed to damages only.) At first I was attracted by the
    simplicity of this approach and the memory (perhaps faulty) that this was the
    practice in years gone by.

[38] Having mulled over this issue for far too long I find that
    I am led to accept the solicitors approach to the application of costs
    received. A proportion of the costs received should be attributed to the plan
    for the purposes of determining the proportion of the taxable costs otherwise
    payable by the insured person  as the recovery made on behalf of the plan
    bears to the total recovery of the insured person in the action.

[29]

That
    led the application judge to conclude that when calculating the portion of
    costs the Plan should bear, one should first ascertain the amount of the
    taxable costs, or solicitors fees, owing, and then ascertain the Plans share
    of the costs recoverable before determining the ratio of the recovery made on
    behalf of the Plan to the total recovery of the insured person in the
    action. The application judge created a four-step approach:

[61] In determining OHIPs obligation to pay a proportion of
    the taxable costs owing:

a)
Ascertain the amount of the taxable costs
    owing, (the solicitors fees) (A).
The taxable amount of the
    solicitors fees (A) should be ascertained by agreement of all parties,
    including OHIP or assessment. Where s. 28.1(8) dictates that an application be
    made to a judge for approval to include in the fee an amount arising as a
    result of an award of costs etc. notice of that application must be served upon
    OHIP as an interested party. Where notice is given of the assessment of such
    fees natural justice demands that OHIP be served as well.

b)
Ascertain OHIPs share the amount of costs
    recoverable (B).
The amount of the costs recovered (B) attributable to
    OHIP (C) should be ascertained by multiplying OHIPs share of the damages and
    interest (D) by the amount of costs recovered (B) and dividing by the amount of
    damages and interest personally recovered by the insured party (E).

c)
Ascertain the amount of the recovery made
    on behalf of the plan (F):
Having determined C, the amount of the
    recovery made on behalf of the plan is the total of OHIPS share of the damages
    and interest plus its share of the costs receivable. (F= (D + C))

d)
Ascertain OHIPs proportion of the taxable
    costs:
The amount of fees OHIP should pay is ascertained by
    multiplying the amount of the recovery made on behalf of the plan (F) by the
    amount of the taxable costs (A) and dividing by the total amount recovered in
    the action (D + E + B)

[30]

The
    Plan submits that the approach of the application judge is not consistent with
    the language of s. 39(6) of the Regulation and unnecessarily complicates the
    calculation exercise.

[31]

I
    agree. The approach proposed by the application judge is inconsistent with s.
    39(6) of the Regulation in two ways. First, it would require ascertaining the
    Plans share of costs twice  once in respect of the amount of costs
    recoverable and then in respect of the taxable costs  whereas s. 39(6)
    contemplates only one calculation of the Plans share of costs. Second, the
    approach uses inconsistent denominators: Step (b) uses only the personal
    recovery of the insured person, whereas Step (d) uses the total recovery of the
    insured person, including the Plans subrogated claim.

[32]

In
    my view, where an insured person recovers costs as part of a judgment or
    settlement, those costs should be deducted from the total costs in order to
    determine the taxable costs otherwise payable by the insured person to their
    lawyer. Once the net costs due to the lawyer are ascertained, one then can
    proceed to calculate the Plans proportionate share of those net costs by using
    the formula found in s. 39(6) of the Regulation.

V.

Summary

[33]

In
    conclusion, I would dismiss the appeal. Where an insured person makes a
    recovery, the amount of costs obtained by judgment or settlement should be
    deducted from the total costs of the insured persons lawyer, and the Plans proportionate
    share of the taxable costs otherwise payable by the insured person should be
    calculated as follows:

Costs x

recovery made on
          behalf of the Plan (Plans damages + pre-judgment interest)

total recovery of the insured person
          (including Plans damages + all pre-judgment

interest)

[34]

The
    respondent sought costs of the appeal in the amount of $20,580.85. The Law Firm
    submitted that there should be no costs because it was bringing the appeal in
    the public interest. Alternatively, the Law Firm submitted that any award of
    costs to the respondent should be in the range of $4,000 to $5,000.

[35]

This
    was not public interest litigation.  The respondent, as the successful party,
    is entitled to some costs. I would award the respondent costs of the appeal in
    the amount of $7,500, inclusive of all disbursements and taxes.

Released: April 27, 2015 (K.F.)

David
    Brown J.A.

I
    agree K. Feldman J.A.

I
    agree M.L. Benotto J.A.

[1]
R.S.O. 1990, c. H-6.

[2]
R.R.O. 1990, Reg. 552.

[3]
R.S.O. 1990, c. S-15.

[4]

Health Insurance Act
, ss. 10, 11.2.

[5]

Ibid.
, s. 11(1).

[6]

Ibid.
, s. 45(1)(s)(iv).

[7]
The recovery made on behalf of the Plan was included in the total recovery of
    the insured person in the action in
Laudon
    v. Roberts
, 2010 ONSC 433 (S.C.J.), at paras. 85 and 86, and in the
    total damages of the insured person assessed by the court in two cases in
    which the plaintiff made no recovery,
Marchand
    (Litigation Guardian) v. Public General Hospital of Chatham
(1997), 33
    O.R. (3d) 570 (Gen. Div.), at para. 7, and
Walford (Litigation Guardian) v. Jacuzzi Canada
    Ltd.
, [2005] O.J. No. 5676 (S.C.J.), at para. 10. An opposite approach
    was taken in
Holder (Litigation Guardian)
    v. Greater Niagara General Hospital
, [1998] O.J. No. 1523 (Gen. Div.), at
    paras. 6, 12, a case in which the plaintiff made a recovery.

[8]

Bell ExpressVu Limited Partnership v. Rex
, 2002 SCC 42, [2002] 2 S.C.R.
    559, at para. 26;
Re Rizzo & Rizzo Shoes Ltd
., [1998] 1 S.C.R. 27,
    at para. 21.

[9]

Amaratunga v. Northwest Atlantic Fisheries Organization
, 2013 SCC 66,
    [2013] 3 S.C.R. 866, at para. 36.

[10]
Act, ss. 30(1) and 31(1).

[11]

Ibid
., s. 30(2).

[12]
[1998] O.J. No. 1866 (C.A.), at para. 22.