COURT OF APPEAL FOR ONTARIO

CITATION: Goderich-Exeter Railway Company
    Limited v. Shantz Station Terminal Ltd., 2020 ONCA 560

DATE: 20200909

DOCKET: C67132

Huscroft, Zarnett and Coroza
    JJ.A.

BETWEEN

Goderich-Exeter Railway Company Limited

Plaintiff

(Appellant)

and

Shantz
    Station Terminal Ltd.
and Parrish and Heimbecker
    Limited

Defendants

(Respondents)

Kenneth Peel and George Karayannides,
    for the appellant

Forrest Hume, Monika Gehlen and Robert
    Reynolds, for the respondents

Heard: in writing

On
    appeal from the judgment of Justice Catrina D. Braid of the Superior Court of
    Justice, dated May 31, 2019 with reasons reported at 2019 ONSC 1914, and from a
    costs order, dated September 9, 2019 with reasons reported at 2019 ONSC 5192.

Zarnett J.A.:

INTRODUCTION

[1]

The appellant, Goderich-Exeter Railway Company Limited
    (GEXR), appeals from the dismissal of its claim against the respondents for demurrage.
     Demurrage is a charge by a railway to a shipper for the detention of the
    railways equipment and assetsits railcarsbeyond a specified amount of free
    time allowed for loading or unloading.
[1]
When properly payable, demurrage compensates the railway for the extended use
    of its assets and equipment and encourages their prompt return to the
    transportation network.

[2]

The issue at the core of this appeal concerns
    the source of a railways entitlement to charge demurrage, specifically whether
    a contract is required as the foundation for the claim.

[3]

The respondent, Parrish and Heimbecker Limited (P&H),
    entered into an agreement with Canadian National Railway (CN) to ship grain
    by rail from Western Canada to Ontario. CN carried the grain for much of the
    rail journey. Pursuant to an agreement CN had with GEXR, GEXR carried the grain
    on its final leg, along the GEXR operated Guelph Line to a facility (the
    Shantz Station) where it was unloaded. The Shantz Station is owned by the
    respondent Shantz Station Terminal Ltd. (SSTL), a subsidiary of P&H.

[4]

GEXR claimed that its railcars were detained for
    longer than the free time stipulated in tariffs it had issued while the
    respondents unloaded them at the Shantz Station, and that, as the shippers of
    the grain, the respondents were liable to pay demurrage. The trial judge
    dismissed the claim, holding that GEXR had not established an express or
    implied contract with the respondents to be paid demurrage, nor the required
    elements of a claim for unjust enrichment.

[5]

In this court, GEXR does not assert an express
    contract. It argues that the trial judge was wrong to require a contract between
    it and the respondents. It submits that a railway is entitled to charge
    demurrage to a shipper that detains its railcars, in the absence of any
    agreement. Alternatively, GEXR argues that the trial judge erred in failing to
    find an implied contract or to give relief under the doctrine of unjust
    enrichment. Finally, GEXR seeks leave to appeal the trial judges refusal to
    stay her costs award.

[6]

For the reasons that follow, I would dismiss the
    appeal. A contract, express or implied, between a railway and a shipper is the
    required basis for a claim for demurrage. There was no express contract between
    P&H and GEXR. Furthermore, in light of the parties conduct  including the
    contract between P&H and CN to which GEXR was not privy, the contract
    between CN and GEXR to which the respondents were not privy, and P&Hs
    repeated statements to GEXR that it would not honour any of GEXR claims for
    demurrage  the trial judge did not err in finding that there was no implied
    contract between the respondents and GEXR permitting it to charge them
    demurrage.

[7]

The elements of a claim for unjust enrichment were
    also not established by GEXR. Nor did the trial judge err in exercising her
    discretion not to defer making a costs award or refusing to stay the award she
    made.

THE FACTUAL CONTEXT

GEXR Operates the Guelph Line Under a Lease
    from CN

[8]

The Guelph Line is a rail line owned by CN that runs
    from Georgetown, Ontario to London, Ontario. GEXR obtained the right to operate
    a railroad on the Guelph Line in 1998, under a lease from CN that had a 20-year
    term.

[9]

Pursuant to a Certificate of Fitness issued
    under the
Canada Transportation Act
, S.C. 1996, c.10 (the
CTA
),
    GEXR was the only authorized operator on the Guelph Line for the term of the
    lease and had all the obligations and status of a railroad under federal
    legislation.

GEXRs Interchange Agreement with CN

[10]

CN and GEXR entered into the Guelph Line
    Operating, Marketing and Interchange Agreement in November 1998 (the
    Interchange Agreement).

[11]

The Interchange Agreement gave CN the right to
    contract with shippers to carry freight over its own lines and onward to points
    on the Guelph Line, even though GEXR was the operator of the Guelph Line. Article
    11.2 provided that CN would continue to market services on the Guelph Line, and
    would be entitled to publish tariffs, enter into contracts, and collect for CNs
    own account all related revenues for traffic to and from stations on the Guelph
    Line which travelled over CN lines. GEXR was to be paid a haulage fee by CN for
    such traffic. As noted below, CN referenced this provision when contracting
    with P&H to carry grain to the Shantz Station.

[12]

The Interchange Agreement also contained a
    provision CN seems to have ignored when it subsequently contracted with P&H.
    Article 11.5 of the Interchange Agreement provided that GEXR would have the
    right to publish tariffs or enter into contracts governing incidental services
    to normal interline movements, including for demurrage.

P&H Contracts with CN to Carry Grain to the
    Shantz Station

[13]

P&H is a grain company. It ships grain from Western
    Canada for supply to flour mills in Eastern Canada.

[14]

Starting in 2001, negotiations took place
    between CN and P&H about CN being the carrier for such shipments, which
    would travel to a grain terminal to be built by P&H in Ontario close to
    four flour mills that P&H supplied. After various proposed sites on
    CN-operated lines proved to be unworkable, CN proposed that the terminal be
    built on the Guelph Line (the line operated by GEXR).

[15]

The trial judge found that, notwithstanding that
    the Guelph Line was GEXR operated, P&H wanted solely to deal with CN and
    wanted no commercial relations with GEXR.

[16]

In March 2003, CN entered into a Memorandum of
    Understanding (the MOU) with P&H, to which GEXR was not a party. The MOU
    contemplated that P&H would ship grain from Western Canada to a terminal that
    it would construct, using CN as carrier. The MOU referenced the Interchange
    Agreement CN had with GEXR, including the substance of article 11.2, which provided
    that CN had the right to contract for carriage to stations on the Guelph Line
    and to collect all related revenues. The MOU did not refer to article 11.5 of
    the Interchange Agreement or otherwise to the prospect of GEXR claiming
    demurrage from P&H. The MOU referred to a CN tariff under which demurrage
    would be charged.

[17]

The MOU provided for arbitration of disputes
    between P&H and CN.

[18]

The trial judge found that the MOU was an
    agreement solely between CN and P&H, and that among other things it reflected
    CNs assurances to P&H that only CN would invoice P&H for demurrage.
    She noted the inconsistency between the Interchange Agreement provision by
    which CN had agreed that GEXR would be allowed to charge interline customers
    demurrage, and the MOU provisions by which CN assured P&H that only CN (and
    not GEXR) would charge demurrage. She stated: [f]or reasons that are unclear,
    portions of the MOU are directly contrary to CNs agreement with GEXR,
    especially as it relates to GEXRs ability to bill accessorial charges.

The Shantz
    Station and the Shipment and Unloading of Grain

[19]

On the strength of the MOU, SSTL was
    incorporated as a P&H subsidiary. In 2003, it constructed and opened the
    Shantz Station at Breslau, Ontario, located on the Guelph Line, for the purpose
    of unloading grain of P&H, its sole customer.

[20]

From the time the Shantz Station was built until
    November 2018, railcars carrying P&H grain travelled on CN lines from
    Western Canada to Ontario, and ultimately to the Shantz Station. The trial
    judge found that those shipments were pursuant to contractual commitments
    between P&H and CN, whereas GEXRs involvement was pursuant to its contract
    with CN.

[21]

When P&H wished to send shipments, CN would
    create a waybill or bill of lading for each shipment that described P&H as shipper
    and consignee with the care of party listed as Shantz Station. The grain was then
    carried on CN operated lines to CNs MacMillan Yard in Toronto.

[22]

In order to move the grain to the Shantz
    Station, CN would send a waybill to GEXR. GEXR was thereupon required to take
    railcars from the CN line and interchange them onto the Guelph Line. GEXR
    engines would pick up the cars at MacMillan Yard and take them to Shantz
    Station.
[2]

[23]

GEXR would provide P&H with a report that
    listed the car numbers, commodity weight, customer name and address, and
    destination, and the respondents would direct GEXR regarding the placement of
    those railcars. After the grain was loaded by the respondents from railcars
    onto trucks at the Shantz Station, the respondents would notify GEXR when the
    empty railcars could be picked up. As the trial judge found, the respondents controlled
    when the empty cars could be released.

Tariffs

[24]

As discussed below, the
CTA
contemplates
    the issuance and publication of tariffs by railways. Tariffs are the schedule
    of rates, charges, terms and conditions applicable to the movement of traffic
    and incidental services:

s. 87. GEXR published tariffs that set out when
    it would levy demurrage charges, and how they were to be calculated. The
    tariffs were provided to P&H. GEXRs tariffs were different than the CN tariff
    for demurrage that was specifically referred to in the MOU.

GEXRs Demands for Payment of Demurrage and
    P&Hs Response

[25]

Prior to 2010, GEXR sent invoices to P&H
    claiming payment of demurrage for occasions when the time taken to unload
    railcars at the Shantz Station exceeded the free time in the GEXR tariffs.
    P&H refused to pay them, asserting that under its agreement with CN, only
    CN was entitled to charge it for demurrage. Although CN advised GEXR that, in
    its view, nothing prevented GEXR from claiming demurrage, GEXR did not
    ultimately pursue payment of the pre-2010 invoices.

[26]

In 2010, GEXR again began sending demurrage
    invoices to P&H. These were met with the same response. As the trial judge
    found:

P&H told GEXR that only CN has the right
    to charge and collect demurrage on P&H traffic at Shantz Station.
    Notwithstanding the position P&H advanced, GEXR kept sending invoices and
    kept providing services. At all relevant times, the defendants rejected any
    demurrage invoices GEXR sent to them and did not pay demurrage to GEXR.

[27]

Although for a time CN agreed to send demurrage invoices
    to the respondents and remit what was paid to GEXR, parts of the invoices were
    disputed. Among other reasons, P&H was not prepared to pay CN for delays
    that it attributed to CNs conduct. In any event, that invoicing arrangement
    did not subsist. GEXR and the respondents reverted to their original positions.
    GEXR took the position it was entitled to charge demurrage directly to the
    respondents calculated under its tariffs. The respondents took the position
    that they had no obligation to pay GEXR any demurrage charges at all.

The Action and
    the Arbitration

[28]

In October 2012, GEXR commenced action seeking judgment
    against the respondents for $378,074 for invoiced but unpaid demurrage charges,
    plus ancillary relief.

[29]

In April 2012, P&H commenced an arbitration
    against CN, seeking among other things indemnity from CN as a result of the
    claims against it for demurrage by GEXR. GEXR was not a party to the
    arbitration.

[30]

Prior to the action coming to trial, the
    arbitrator ruled that CN was in violation of the MOU to the extent it breached
    its promise to be the only carrier to charge P&H for demurrage in
    connection with traffic to Shantz Station. Final determination of the remedy to
    P&H was deferred pending the result of the action. The findings of the
    arbitrator were not relied upon in the action, since, as the trial judge noted,
    GEXR was not a party to it.

THE TRIAL JUDGMENT AND COSTS AWARD

[31]

The trial judge dismissed GEXRs action, dealing
    with the issues in four steps.

[32]

First, she rejected GEXRs argument that the
CTA
and GEXRs issuance of tariffs under it gave GEXR the right to charge demurrage
    to a shipper without the need for any contract between them. She stated [a]
    railway may not charge demurrage to a party with whom it has no contract.

[33]

Second, the trial judge held that there was no
    express contract between GEXR and the respondents on which to base a claim for payment
    of demurrage. She stated:

GEXR was not a party to a contract for the
    carriage of goods to Shantz Station. P&H did not pay freight charges to
    GEXR or receive bills of lading from GEXR for the goods that were shipped to
    Shantz Station. I find that there was no express contract between GEXR and
    P&H for the payment of demurrage.

[34]

Third, she held there was no implied contract
    requiring such payment. Noting that the respondents had rejected every request
    for payment of demurrage that GEXR had made, she concluded:

The facts in this case do not give rise to an
    implied contract for payment of demurrage. P&Hs repeated denials of any
    liability for demurrage, together with the long periods of time in which GEXR
    did not bill for demurrage (and appeared to accept P&Hs position),
    preclude a finding of an implied contract between the parties.

[35]

Fourth, she rejected GEXRs claim that it was
    entitled to payment based on the doctrine of unjust enrichment. In her view, GEXR
    had not established an enrichment of the respondents or that GEXR had suffered
    a corresponding deprivation.

[36]

The trial judge refused to defer dealing with
    costs until after the completion of the arbitration between P&H and CN, in
    which P&H had claimed indemnity for its costs of defending GEXRs claims
    against it. She awarded the respondents costs of $250,000 all inclusive.

THE ISSUES ON APPEAL

[37]

On the merits appeal, GEXR raises four arguments:

(a)

It submits that a railway has a long standing common
    law right to charge demurrage to a shipper even in the absence of any contract
    between them.

(b)

It submits that the publication of tariffs by a
    railway and their provision to a shipper are, in light of the
CTA
, a sufficient
    basis for an entitlement to demurrage.

(c)

It submits the trial judge erred in failing to
    find that an implied contract existed for the payment of demurrage by the
    respondents to GEXR.

(d)

It submits the trial judge erred in failing to
    find that the required elements for a claim in unjust enrichment had been established.

In seeking leave to appeal costs, GEXR
    argues that the costs order should have been stayed until after P&H
    completed seeking indemnity from CN in their arbitration, as the claim included
    indemnity for costs of defending GEXRs action.

ANALYSIS

(1)

Is There an Entitlement to Demurrage in the
    Absence of a Contract?

The Standard of
    Review

[38]

GEXRs first two points are closely connected
    and appropriately dealt with together. In essence, they both raise the central question
    of whether a demurrage claim must be based on an express or implied contract. Accordingly,
    they raise a question of law. The standard of review on this issue is correctness:
Housen v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235, at para. 8.

The Common Law
    Required A Contract

[39]

There is strong authority for the proposition
    that, at common law, a shippers obligation to pay freight charges  that is,
    charges for the movement of traffic  is based on a contract with the carrier.
    In some cases, that contract may be implied. For example, in
N.Y. Central R.
    Co. v. Joseph Dolan & Sons Ltd.
, [1929] 1 D.L.R. 817 (Ont. C.A.), at
    p. 820, this court adopted, with approval, the following statement:

Ordinarily, the person from whom the goods are
    received for shipment assumes the obligation to pay the freight charges; and
    his obligation is ordinarily a primary one. This is true even where the bill of
    lading contains, as here, a provision imposing liability upon the consignee.
    For the shipper is presumably the consignor; the transportation ordered by him
    is presumably on his own behalf; and a promise by him to pay therefor is
    inferred (that is, implied in fact), as a promise to pay for goods is implied,
    when one orders them from a dealer.

[40]

Demurrage, as one of those rates or
    charges[that] relates to the movement of traffic is a subset of freight
    charges:
Canadian National Railway v. Neptune Bulk Terminals (Canada) Ltd.
,
    2006 BCSC 1073 at paras. 95-96. Accordingly, the basis for a claim for
    demurrage would be the existence of a contract between the shipper and the carrier.

[41]

In support of its argument that no contract is
    necessary, GEXR points to the fact that charges for demurrage by railways have both
    a long history and a firm underpinning in business efficacy and fairness. It
    submits that descriptions of the nature of the claim do not state that it is a
    function of contract.

[42]

For example, in
North-West Line Elevators
    Association et al. v. Canadian Pacific Railway and Canadian National Railway et
    al.
, [1959] S.C.R. 239, Rand J. stated at p. 244:

[T]he principle of exaction for delay in
    loading and unloading in water transportation has been known and applied for
    centuries. Its appropriateness to railway carriage can be assumed to have been
    recognized and acted upon both in England and in North America certainly from
    the middle of the nineteenth century.

Delay in loading or unloading cars of
    freight violates the implied understanding when equipment is placed at the
    disposal of shipper or consignee that no more than reasonable time shall be
    taken for either purpose.
The profitable and
    efficient use of equipment is an important item of the costs reflected in the
    freight rates charged and is an essential in good railway management. That a
    railway is to supply expensive equipment in order to furnish, gratis, a storage
    means for shippers and consignees, reveals, on its mere statement, its own
    absurdity [Citation omitted; Emphasis added.]

[43]

As a further example, in
Turner
,
Dennis
    & Lowry Lumber Co. v. Chicago
,
M & St. P. Ry. Co.
,
271 U.S. 259
(1926), Brandeis J. stated at p. 262:

One cause of undue detention (of rail cars) is
    lack of promptness in loading at the point of origin, or in unloading at the
    point of destination. Another cause is diversion of the car from its primary
    use as an instrument of transportation by employing it as a place of storage,
    either at destination or at reconsignment points, for a long period while
    seeking a market for the goods stored therein. To permit a shipper so to use
    freight cars is obviously beyond the ordinary duties of a carrier.
The right
    to assess charges for undue detention existed at common law
. Now, they are
    subject, like other freight charges, to regulation by the Commission. Demurrage
    charges are thus published as a part of the tariffs filed pursuant to the
    statutes. [Emphasis added.]

[44]

I do not read either statement as suggesting
    that there is a right to charge demurrage to a party with whom the railway has
    no contract at all.

[45]

The dispute in
Turner
was between a
    person to whom lumber had been shipped and the railway that carried it. It was
    not a dispute between parties who had no contractual relationship. Brandeis J.
    rejected the consignees contention that the demurrage charge was a penalty which
    could not be legally imposed by the railway or approved by its statutory
    regulator. His reference to demurrage previously having been a common law right
    does not suggest, at least as viewed through the lens of Ontario law, that it
    existed outside of contract; it simply contrasted how the right was previously governed
    (exclusively by the common law, which governed when and how a contract came
    into existence and the extent to which it could be enforced) with how the right
    came to be regulated (in part by statute).

[46]

The issue in
North-West Line Elevators
was
    whether the Board of Transport Commissioners (then the statutory regulator of
    railway rates and charges) had correctly considered itself to be without authority
    to disallow a railways tariff that provided for demurrage charges to shippers.
    In dismissing the appeal, Rand J. did not say anything that suggested a railway
    could charge demurrage to a person with whom it had no contract to ship or
    carry goods. Rather, his statement is more consistent with the view that, where
    there is a contract between a shipper and a railway for the movement of
    freight, a right to charge demurrage will be implied into that contract as the
    freight rates otherwise charged will necessarily have been based on the
    profitable and efficient use of the railways equipment (subject to compliance
    with the statutory regulation of rates and charges of railways).

The Provisions
    of the CTA Do Not Authorize the Charging of Demurrage to Non- Contracting
    Parties

[47]

The
CTA
imposes obligations on railways
    to provide service and regulates their rates and charges, including charges for
    demurrage. Although demurrage is not specifically referred to in the
CTA
,
    I agree with the trial judge that it is subject to the Act. In
Canadian
    Pacific Ltd. v. Canada (National Transportation Agency) and Canadian Millers
    Association
, [1979] 2 F.C. 809 at p. 822, affd [1980] 1 S.C.R. 319, (dealing
    with predecessor legislation to the
CTA
), the court stated that demurrage
    is sufficiently related to the transportation of goods to be part of the rates
    in respect of the movement of goods within the meaning of [the statute].

[48]

The fact that the
CTA
regulates the
    charging of rates or charges, including demurrage, to persons who contract with
    the railway is one thing; it is quite another to view the
CTA
as creating
    the right to charge demurrage to persons with whom a railway has no contract at
    all.

[49]

In support of the argument that the
CTA
creates a right to charge demurrage to persons with whom a railway has no
    contract, GEXR relies on the combined effect of a number of provisions.

[50]

First, it points to the provisions of the
CTA
that provide that a railway company shall provide a certain level of service. For
    example, a railway has a service obligation to:

113(1)(a) furnish, at the point of
    origin, at the point of junction of the railway with another railway, and at
    all points of stopping established for that purpose, adequate and suitable accommodation
    for the receiving and loading of all traffic offered for carriage on the
    railway

113(1)(c) without delay, and with
    due care and diligence, receive, carry and deliver the traffic

114(1) afford all persons and other
    companies all adequate and suitable accommodation for receiving, carrying and
    delivering traffic on and from its railway, for the transfer of traffic between
    its railway and other railways and for the return of rolling stock.

[51]

Second, GEXR stresses that the
CTA
makes clear that the railway is to be compensated for providing service. Section
    113(2) provides that Traffic must be taken, carried to and from, and delivered
    at the points referred to in paragraph [113](1)(a) on the payment of the
    lawfully payable rate.

[52]

Third, GEXR points to the fact that the
CTA
defines what a lawfully payable rate is, namely, the rates that are contained
    in the duly issued and published tariffs of the railway: s. 119(2)(a).

[53]

The
CTA
prevents a railway from
    requiring payments other than lawfully payable rates.
With
    one exception, only rates that have been published in a tariff are lawful
    rates.
A railway company is obliged, at the request of a shipper, to issue
    a tariff in respect of the movement of traffic on its railway, and if the railway
    company proposes to increase a rate in a tariff for the movement of traffic it
    must publish a notice of the increase at least 30 days before its effective
    date. The only exception to the published tariff requirement is where the
    parties have a confidential contract: ss. 117-119, 126.

[54]

Finally, GEXR points to the fact that the
CTA
provides protection to parties who feel unfairly charged, as it provides a
    means of challenging the reasonableness of tariff charges: s. 120.1.

[55]

Taken together, GEXR submits that these
    provisions entail that a railway is entitled to charge demurrage in accordance
    with its published tariff in the absence of having any contract with the person
    to whom it wishes to levy that charge. It notes that the respondents at no time
    complained under s. 120.1 of the
CTA
that GEXRs tariff charges for
    demurrage were unreasonable.

[56]

I disagree with GEXRs submission. Although a
    railway is entitled to payment of lawfully payable rates in exchange for
    service it is obliged to provide, the entitlement to payment must be from a
    person who has contracted, expressly or impliedly, to have the railway carry or
    deliver freight.

[57]

The substance of GEXRs argument was rejected in
Neptune Bulk Terminals
, a case in which CN had issued a tariff that
    required terminal owners, with whom it had no contract, to pay demurrage. There
    the court stated:

It is true, as CN argues, that the
CTA
does not expressly limit the application of a tariff to the party with whom CN
    contracts. Nor, however, does the
CTA

expressly or by
    implication permit CN to impose its tariffs on parties with whom it has no
    contract of carriage. The
CTA
does not authorize railway companies to
    impose tariffs on third parties. It requires railway companies to publish tariffs
    in order to inform prospective customers as to the nature and amount of the
    rates, charges and penalties they will be expected to pay pursuant to the
    contract of carriage.

In summary, I conclude that [CNs tariff] is
    binding only on parties with whom CN contracts for the carriage of goods. Tariffs
    published by CN become enforceable when a party enters into a contract with CN
    which incorporates the terms of the tariff. As there was no contract of
    carriage between the parties in this case, Neptune is not liable for demurrage
    charges described in the tariff: at paras. 104, 107.

[58]

In my view, the conclusion in
Neptune Bulk
    Terminals

was correctly followed by the trial judge.

[59]

The correctness of the conclusion in
Neptune
    Bulk Terminals

is not diminished because it predated the
    introduction into the
CTA
of s. 120.1, providing shippers with an
    opportunity to contest the reasonableness of tariff charges.

[60]

Section 120.1 of the
CTA
provides:

If, on complaint in writing to the Agency by a
    shipper who is subject to any charges and associated terms and conditions for
    the movement of traffic or for the provision of incidental services that are
    found in a tariff that applies to more than one shipper other than a tariff
    referred to in subsection 165(3), the Agency finds that the charges or
    associated terms and conditions are unreasonable, the Agency may, by order,
    establish new charges or associated terms and conditions.

[61]

The reasonableness challenge process requires a
    complaint by a shipper who is subject to charges found in a tariff. Section
    120.1 does not provide that a person automatically becomes subject to those
    charges without there being any contract between it and the railway.

[62]

Nor do the provisions of the
CTA
that contemplate,
    but do not require,
confidential
contracts, support the argument that
    if there is no confidential contract tariffs permit the charging of demurrage
    in the absence of
any
contract at all.

[63]

The exception to the rule that a railway may
    charge only what is in a published tariff is when the parties have made a confidential
    contract that complies with certain requirements. A confidential contract is a
    contract between a shipper and a railway that the parties agree to keep
    confidential respecting, among other things, rates to be charged, reductions
    in rates or charges in a published tariff, or rebates or allowances from such
    tariff rates and charges: s. 126(1).

[64]

GEXR relies on the statement of Rothstein J. in
Canadian
    National Railway v. Canada (Attorney General)
, 2014 SCC 40, [2014] 2
    S.C.R. 135, that:

Confidential contracts provide an alternative
    to the historic requirement that a railway company could only charge a rate in
    respect of the movement of traffic if the rate was set out in a tariff that had
    been issued and published by the railway company: at para. 26.

Effectively, GEXR submits that if
    confidential contracts are one alternative, the other must involve no contract.
    In my view, that conclusion does not follow.

[65]

The contrast drawn by Rothstein J. is between charges
    that are lawful because they are in a contract that the parties have agreed to
    keep
confidential
and that otherwise meets the requirements of s. 126,
    and charges that are lawful because they are in an issued and
published
tariff. Nothing in the statement of Rothstein J. speaks to or suggests the
    ability to charge demurrage under a tariff to a person who is not in any type
    of contractual relationship with the railway.

Conclusion

[66]

There is no common law right to charge demurrage
    to a non-contracting party. The provisions of the
CTA
concerning
    tariffs do not authorize the charging of demurrage to persons who have no
    contract with the railway.

[67]

The
CTA
regulates what a railway may
    charge to persons who expressly or impliedly contract for their services, and
    how those persons are to be notified, before expressly or impliedly contracting
    for those services, what those rates and charges will be. As the court stated
    in
Neptune Bulk Terminals
, The
CTA
does not authorize
    railway companies to impose tariffs on third parties: at para. 104. Or, to adopt
    the respondents formulation, the existence of an issued and published tariff
    is a necessary, but not a sufficient, condition for a railway to charge
    demurrage.

[68]

Accordingly, I would reject GEXRs first two grounds
    of appeal.

(2)

Was There an Implied Contract?

The Standard of
    Review

[69]

Whether a contract exists, including whether an
    implied contract should be recognized, is a question of mixed fact and law:
Simpson
    v. 603418 Ontario Inc.
, 2018 ONSC 5156 (Div. Ct.) at para. 44;
2484234
Ontario
    Inc. v. Hanley Park Developments Inc.
, 2020 ONCA 273, at para. 42.
    Accordingly, a trial judges finding that there was no implied contract should
    not be disturbed on appeal, absent palpable and overriding error of fact or the
    trial judge having made an extricable legal error:
Housen
,
at
    paras. 10, 36.

The Trial Judge
    Did Not Commit an Extricable Error of Law

[70]

In a situation where the shipper deals directly and
    solely with a railway, engaging it to carry or deliver goods to a particular
    location on the railways own line, it is clear that a contract between the shipper
    and the railway to pay freight charges and thus to pay demurrage, can be
    readily implied:
N.Y. Central R.
, at p. 820;
North-West Line
    Elevators
, at p. 244. The rates and charges payable under the implied
    contract are of course subject to the
CTA
provisions that regulate
    them.

[71]

In the case at bar, a more complex arrangement
    existed. On the trial judges findings, P&H expressly contracted with CN to
    carry freight not only along CN lines, but beyond them to the Shantz Station. CN,
    under its express contract with GEXR, was able to have the freight carried by
    GEXR from the CN lines to the Shantz Station.

[72]

There were thus two
express
contracts in
    place, one between CN and P&H to which GEXR was not a party, and one
    between CN and GEXR to which neither respondent was a party. In my view, the
    trial judge did not commit an extricable error of law when she refused to also
imply
a further contract between GEXR and the respondents.

[73]

The law does not require such an implication. Courts
    have recognized that in this type of situation, privity of contract may exist
    only between the shipper (the respondents) and the originating carrier (here,
    CN) and not between the shipper and the connecting or destination carrier
    (here, GEXR):
Grand Trunk Ry. Co. of Canada v. McMillan
, [1889] 16
    S.C.R. 543, at pp. 549-50:
Canadian National Ry. Co. v. Canadian Industries
    Ltd.
, [1940] 3 D.L.R. 621 (Ont. S.C.), at pp. 624-627, affd [1940] O.W.N.
    452 (C.A.), affd [1941] S.C.R. 591.

[74]

In
Canadian Industries
, the following
    proposition was quoted with approval:

the acceptance of goods by a railway for
    conveyance to points off its own line imposed (in the absence of special
    circumstances) the obligation of a common carrier on such railway till the
    goods were delivered at their destination.
The only contract of carriage to
    which the shipper was a party was that made with the carrier to whom the goods
    were first delivered
.: at p. 624 [Emphasis added.]

[75]

GEXR relies on two cases in which the court implied
    a contract between a shipper (consignee) and a connecting or destination
    carrier. In my view, neither assists GEXR. At their highest, all they show is
    that while the law does not require the contract that the GEXR contends for be
    implied, it does not forbid it. It all depends on the facts.

[76]

In
Railink Canada Ltd. (Southern Ontario
    Railway) v. Fedmar Limited
, 2009 CanLII 15893 (Ont. Sup. Ct.), Milanetti J.
    upheld a decision of the Small Claims Court allowing a railway, that was the destination
    carrier, to charge demurrage to the ultimate consignee of the shipment. She
    stated:

Whether there is a paper contract or not,
    there is clearly a common understanding between these two parties. SOR was
    required and mandated to deliver the goods to FedMar at their request. FedMar
    alone controls the timing of receipt and return of the cars. This may also be
    seen as a relationship of convenience: at para. 18.

[77]

FedMar
does not
    lay down a rule of law. It turned on its facts, in particular, the finding of a
    common understanding. The trial judge distinguished
FedMar
on its
    facts. She held that there was no common understanding between the respondents
    and GEXR that could support the implication of the contract contended for by GEXR.

[78]

GEXR also relies on
Norfolk & Western
    Railway Co. v. Great Lakes Brick & Stone Ltd.
, 1995 CanLII 7408 (Ont.
    Ct. J.), where the court stated, at para. 21:

It was clearly established that it is an
    accepted custom on a through carriage, that the destination carrier is also a
    party to the contract.  A delivering carrier has the required privity to sue
    a shipper, or a property acquiring consignee. [Citations omitted.]

[79]

Norfolk & Western Railway
also turned on its facts, specifically the finding that an accepted
    custom had been established, something the trial judge did not find to have
    been established or applicable in this case.

[80]

As a general matter, for a contract to be
    implied, the conduct of the parties must objectively manifest that an offer of
    one party has been accepted by the other resulting in a meeting of the minds. Where
    the terms upon which services made available by one party are made known to the
    other, who uses the services while remaining silent about the terms, acceptance
    of the terms may be implied:
Saint John Tug Boat Co. Ltd. v. Irving
    Refinery Ltd.
, 1964, S.C.R. 614 at pp. 622-23.

[81]

The trial judge appropriately focussed on the
    conduct of GEXR and the respondents. That conduct included GEXRs provision of
    its tariffs to P&H, and the respondents control over when railcars would
    be released back to GEXR, facts that could support the finding of an implied
    contract. But the conduct also included the respondents repeated statements to
    GEXR that the dealings between them did not and would not give rise to any
    obligation to pay demurrage to GEXR. Those statements were made before 2010 and
    continued thereafter. They pre-existed and continued during the services provided
    by GEXR that underlie its claims in the action, and are inconsistent with the
    basis for any implied contract.

[82]

This was not a case of the use of services
    coupled with silence about the terms on which they were offered. It was open to
    the trial judge to find, on all the facts, that there was no implied acceptance
    of GEXRs terms, that no meeting of the minds had been objectively manifested,
    and thus to refuse to find an implied contract.

[83]

I do not accept GEXRs argument that the trial
    judge in effect held it to be bound by the MOUs provisions by which CN agreed that
    P&H would not have to pay demurrage to GEXR. The trial judge found that
    GEXR was neither a party to nor bound by the MOU. She held that the conduct of
    GEXR and the respondents failed to show a meeting of the minds about the
    payment of demurrage to GEXR.

[84]

In my view the trial judges finding that there
    was no implied contract was not tainted by an extricable error of law.

The Trial Judge
    Made No Palpable and Overriding Errors of Fact

[85]

The trial judges findings of fact were well
    supported by the record. In my view, her finding that there was no implied
    contract was also not the product of any palpable and overriding error.

Conclusion

[86]

I would not give effect to this ground of
    appeal.

(3)

No Unjust Enrichment

[87]

Under the principled framework to unjust
    enrichment a plaintiff will succeed if he or she can show: (a) that the
    defendant was enriched; (b) that the plaintiff suffered a corresponding
    deprivation; and (c) that the defendants enrichment and the plaintiffs
    corresponding deprivation occurred in the absence of a juristic reason:
Moore
    v. Sweet
, 2018 SCC 52, [2018] 3 S.C.R. 303, at para. 37.

[88]

I agree with the trial judge that the evidence
    does not establish such a claim, because it does not establish any enrichment
    of the respondents or corresponding deprivation of GEXR, let alone one that
    occurred without juristic reason. GEXR carried grain to the Shantz Station
    pursuant to its agreement with CN in exchange for haulage fees from CN. To be
    sure, the Interchange Agreement gave GEXR the opportunity to contract with
    interline customers for payment of demurrage, but GEXR failed to contract with
    the respondents for such payments.

[89]

Whether that was due to a failure by CN to
    honour its arrangements with GEXR by making contradictory arrangements with
    P&H in the MOU, or a failure of GEXR to appropriately structure its
    arrangements with CN so that it could refuse service to any interline customer
    that was not prepared to commit to pay it demurrage, matters not. The
    circumstances fall well outside the notion that some benefit was conferred on
    the respondents which justice does not permit one to retain, the notion that
    lies at the heart of the doctrine of unjust enrichment:
Moore v. Sweet
,
    at para. 35.

[90]

I would not give effect to this ground of
    appeal.

(4)

The Costs Appeal

[91]

In my view, it was completely within the
    discretion of the trial judge to refuse to defer dealing with costs until the
    completion of the P&H arbitration with CN. She made no error in principle. That
    arbitration could not affect GEXRs obligation to pay costs as the unsuccessful
    party in its action against the respondents.

[92]

I would not grant leave to appeal costs.

CONCLUSION

[93]

For these reasons, I would dismiss the appeal.

[94]

If the parties are unable to agree on costs of
    the appeal they may make written submissions. The submissions of the
    respondents shall be made within ten days of these reasons. The submission of
    GEXR shall be made ten days thereafter. The submissions shall not exceed three pages
    each.

Released: G.H. September 9, 2020

B. Zarnett J.A.

I agree. Grant Huscroft J.A.

I agree. S. Coroza J.A.

[1]
A shipper is a person who sends or receives goods by means of,
    among other modes, a railway:
Canada Transportation Act
, S.C. 1996, c.
    10, s. 6.

[2]
Although the railcars were not the property of GEXR, GEXRs claim
    was that it paid car hire costs to the railcar owners for the period from its
    receipt of the cars until they were interchanged to another carrier. Delay in
    being able to put the cars to other uses or send them to another carrier could
    affect GEXR economically.


COURT OF APPEAL FOR ONTARIO

CITATION: Johnson v. Fisher, 2020 ONCA 613

DATE20200929

DOCKET: C67750

Pepall, Benotto and Coroza JJ.A.

BETWEEN

Dalton Johnson a.k.a. Bill
    Jamieson

Plaintiff (Appellant)

and

Rosemary
    Anne Fisher

Defendant (Respondent)

J. Richard Forget, for the appellant

Adrienne Lei, for the respondent

Heard and released orally by
    videoconference: September 25, 2020

On appeal from the order of Justice Sandra
    Nishikawa of the Superior Court of Justice, dated November 27, 2019.

REASONS FOR DECISION

[1]

The appellant filed an assignment into
    bankruptcy on June 14, 2017.  He subsequently commenced an action against the
    respondent for damages for solicitors negligence.  At the time, he was an
    undischarged bankrupt.

[2]

The motion judge properly struck out his claim
    on the basis of lack of legal capacity.

[3]

Under s. 71 of the
Bankruptcy and Insolvency
    Act
, R.S.C. 1985, c. B-3, on bankruptcy, a bankrupt ceases to have any
    capacity to dispose of or otherwise deal with their property, which shall,
    subject to the Act and to the rights of secured creditors, pass to and vest in
    the trustee in bankruptcy. Property includes a cause of action.

[4]

In this case, the appellant had no power to
    initiate the action against the respondent while still an undischarged bankrupt
    as the cause of action vested in the trustee.

[5]

For these reasons, the appeal is dismissed.
    There will be no order of costs.

S.E. Pepall
    J.A.

M.L. Benotto
    J.A.

S. Coroza
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Kassa (Re), 2020 ONCA 543

DATE: 20200901

DOCKET: C67530

Watt, Trotter and Harvison Young JJ.A.

IN THE MATTER OF: Samuel Kassa

AN APPEAL UNDER PART XX.1 OF THE
CODE

Kelley J. Bryan, for
    the appellant, Samuel Kassa

Michele Warner, for the respondent, Centre for Addiction
    and Mental Health

Emily Marrocco, for the respondent, Ministry of the
    Attorney General

Heard: June 11, 2020 by video conference

On appeal from the
    disposition of the Ontario Review Board dated, August 2, 2019, with reasons
    dated August 21, 2019, reported at 2019 CarswellOnt 13632.

Harvison Young J.A.:

A.

Overview

[1]

In July 2012, Samuel Kassa was found not criminally responsible (NCR) by
    reason of mental disorder of uttering a death threat to a Toronto Transit
    Commission (TTC) operator. Since this NCR finding, the appellant has been
    subject to orders requiring his detention.

[2]

At his annual hearing in July 2019, the appellant sought an absolute
    discharge, as he had done for a number of years previously. The Ontario Review
    Board (the Board) declined to order a discharge, and instead ordered the appellant
    be detained at a secure forensic unit. The person in charge at the hospital retained
    discretion to transfer the appellant to a general forensic unit.

[3]

The appellant says that the Board failed to conduct a very careful
    assessment of the likelihood and seriousness of potential future harm, as
    required by
Winko v. British Columbia (Forensic Psychiatric Institute)
,
    [1999] 2 S.C.R. 625
.
In particular, the appellant argues that the
    Boards analysis of whether he poses a significant risk to public safety was
    unreasonable. He seeks an absolute discharge, or for the matter to be returned
    to the Board for a new hearing.

[4]

For the following reasons, I disagree and would dismiss the appeal.

B.

Background

(1)

Pre-index offence conduct

[5]

The appellant had used cannabis and cocaine for close to a decade before
    the index offence. His hospital reports also detail incidents leading to  a
    number of admissions into psychiatric care, including: driving over 150 km/hr
    and causing an accident, possibly as part of a suicide attempt (2000); starting
    a fire in his apartment and throwing items off his balcony (2002); and setting
    fires in his apartment in attempts to notify people of upcoming civic elections
    (2005).

[6]

In 2009, the appellant was found guilty of uttering threats and weapons
    dangerous. He received a conditional discharge and two years probation. In 2010,
    the appellant was accused of throwing milk on and threatening to shoot a
    physician at the Centre for Addiction and Mental Health (CAMH).

(2)

Index offence and initial detention

[7]

The index offence took place in July 2010. The appellant walked up to a
    TTC operator, lifted his right arm up and put his hand out as if he were
    pointing a gun at the operator and pulling the trigger. The appellant stated:
    Fuck you, youre dead. He walked away, returned to stand within 10 feet of
    the operator, and repeated the hand gesture silently.

[8]

In July 2012, the appellant was found NCR by reason of mental disorder
    of uttering a death threat. From 2012 to 2018, the Board annually ordered the
    appellant to be detained on a general forensic unit, primarily at Ontario
    Shores Centre for Mental Health Sciences (Ontario Shores).

[9]

The appellant has been diagnosed with schizophrenia, and cocaine and
    cannabis use disorder. Following his initial admission into Ontario Shores, the
    appellant participated in various rehabilitative programs to help develop
    insight into his illnesses. However, the appellant has repeatedly relapsed into
    substance abuse. Typically, the appellant leaves the hospital or residence,
    uses substances, then returns after a day or two. While the appellant has been
    discharged to live in approved community homes on several occasions, he was
    eventually readmitted to the hospital due to substance use.

[10]

Until
    2018, Ontario Shores had recommended the appellant be detained to monitor his
    mental state and mitigate the risks of abusing drugs and reoffending, which
    would present a serious risk to safety of the public.

(3)

The 2018 disposition and subsequent appeal

[11]

In
    July 2018, however, the Ontario Shores hospital report stated that, in light of
    this courts decision in
Wall (Re)
,

2017 ONCA 713, 417 D.L.R.
    (4th) 124,

the appellant [did] not appear to meet the threshold for a
    significant threat to the safety of the public and thus is entitled to an
    absolute discharge. This was because there had been no incidents of the
    appellant engaging in behaviour likely to cause serious harm during his time
    under the Review Board. While the appellants actions during the index offence
    were undoubtedly frightening and intimidating it was difficult to view them as
    having the potential to cause serious psychological harm.

[12]

The
    report recommended that, if the Board did find that the appellant met the
    threshold of significant threat, he be detained on a secure forensic unit. This
    is because the appellants clinical team believed that his substance abuse
    could not be adequately addressed in the course of indirectly supervised
    privileges. The 2018 report was authored by Dr. Morgan, who was the appellants
    main treating physician for that reporting year.

[13]

In
    its reasons released on August 28, 2018, the Board found that the appellant
    continued to pose a significant threat to the safety of the public as defined
    in
Winko
. It stated that the appellants actions, both before and
    after the index offence,

could have caused real and
    substantial psychological harm to others (eg fire-setting, dangerous operation
    of a motor vehicle, threats, throwing things off his apartment balcony etc) . The
    Panel accepts the evidence of Dr. Morgan and the Treatment Team that without
    close supervision Mr. Kassa would likely become medication noncompliant, start
    to use substances which would lead to a decompensation and a re-emergence of
    behaviour similar to the index offence.

[14]

The
    Board continued the existing detention order, under which Ontario Shores had
    been in the process of admitting the appellant to Boxx House (a group home) but
    was interrupted by the appellants drug use and readmission to hospital. The
    prior disposition had also recommended a transfer to CAMH, which had not yet
    taken place due to a long waiting list.

[15]

The
    appellant challenged the Boards 2018 order at this court. By reasons dated
    April 18, 2019, this court allowed the appeal and ordered that the Board hold a
    new hearing based on a proper
Winko
analysis. Hoy A.C.J.O., writing
    for the court in
Kassa (Re)
, 2019 ONCA 313, at paras. 34-35, held that
    the Board had failed to properly apply the
Winko
test:

In considering only that there was a serious likelihood that
    conduct such as that which the appellant engaged in prior to the index offence,
    and of which limited details were available,
could
result in significant harm, the Board failed to engage in the core analysis
    that
Winko
requires.

Could does not suggest the
    real risk that
Winko
requires. Moreover, the Board did not expressly
    consider the seriousness of the potential harm or weigh it in combination with
    the risk of that harm materializing. [Emphasis in original.]

(4)

The 2019 disposition

[16]

By
    the time of the appellants annual hearing in July 2019, there was evidence
    that the appellants symptoms had significantly worsened. He was discharged to
    Boxx House in August 2018, but then readmitted to the hospital three times before
    the annual hearing. On two of those occasions, the police were necessary to readmit
    the appellant to the hospital.

[17]

The
    2019 hospital report, dated May 27, 2019 and authored by Dr. Pytyck, detailed
    clear evidence of clinical instability, with recurrent periods of
    decompensation due to substance use (specifically, synthetic cannabinoids) and
    a change in injectable medication. When unwell, the appellant

typically has presented as
    irritable and easily angered, as well as verbally inappropriate and rude
    towards staff. He has made indirectly threatening comments (for example, asking
    whether he should kill a member of a sports team) and he has, at times, caused
    staff members to feel intimidated due to his irritability and bizarre comments.

[18]

The
    report recommended that the appellant be detained on a general forensic unit at
    Ontario Shores. If discharged, the appellant would likely continue to engage in
    substance abuse that

would cause him to lose his
    housing and migrate to homelessness, which would in turn lead him to fall away
    from treatment and medication. He would be likely to deteriorate rapidly to a
    state similar to that in which he has previously engaged in problematic
    behaviours that had the potential to cause harm to others.

[19]

An
    addendum to the 2019 hospital report, dated July 9, 2019 and authored by Dr.
    Morgan, further detailed the appellants struggles. The appellant had been
    leaving Boxx House without signing out, going on a crack binge, then
    returning for a day (typically high and disruptive), before going out again.
    His hygiene had deteriorated and he was likely going to be evicted.

[20]

Like
    the 2019 hospital report, the addendum noted that the appellant would likely
    fall away from treatment if granted a discharge. This would lead to
    homelessness and contact with the police, either through the commission of
    minor offences and/or disorganized/bizarre behaviour driven by psychosis.
    However, it continued that this conduct likely will not result in serious
    physical or psychological harm to the public. The addendum described the
    appellants behaviour during his time under the Board as merely trivial or
    annoying, since there has not been any previous instance of the appellant
    causing serious physical or psychological harm.

[21]

The
    addendum did not explicitly recommend a discharge like the 2018 hospital
    report. Instead, it stated that if the Board found the appellant to be a
    significant threat, he should be detained within a Forensic Service, and that
    he would benefit from a transfer to CAMH or St. Josephs Healthcare.

[22]

Dr.
    Pytyck testified at the 2019 hearing, which took place on July 22, 2019. She
    reported that the appellants stability had deteriorated since the addendum was
    written, in that the appellant was displaying more psychotic and bizarre behaviour.
    Dr. Pytyck highlighted that staff members at the hospital have felt threatened
    by the appellants behaviour and the appellant has limited insight into his
    illness. She disagreed that the appellant has not historically been a threat, citing
    his pre-index conduct that included dangerous driving, throwing objects off a
    balcony, and a conviction for weapons dangerous and uttering threats. Dr.
    Pytyck also said that it was now her view that appellant should be detained on
    a secure forensic unit, with the ability to transfer to a general unit after a
    month or two.

[23]

The
    Board accepted Dr. Pytycks evidence and ordered the appellants continued detention.
    It reasoned the appellant was a significant risk to public safety, agreeing
    with Dr. Pytyck that if the appellant was discharged, he would become homeless,
    stop taking medication, and rapidly deteriorate:

[E]ven in hospital, and even while
      being medicated, Mr. Kassa has threatened both female and male staff members to
      the point where those staff members fear for their safety. In this panels
      opinion, that conduct on the part of Mr. Kassa meets the test set out in
Winko
.
We are satisfied there is a real risk of at least
        psychological harm occurring to those staff members. We are satisfied that this
        harm is serious. We are satisfied that Mr. Kassas conduct in making those
        threats are criminal in nature. [
Emphasis added.]

[24]

The
    Board acknowledged that Dr. Morgan came to a different conclusion about the
    appellants risk to public safety. The Board, however, preferred Dr. Pytycks
    conclusion, based on evidence of the appellants conduct over the past year
    (including two extended hospital admissions and threats to staff members), as
    well as the appellants behaviour during the hearing.

[25]

The
    Board was not satisfied that the Community Treatment Order (CTO), that the
    appellant signed under the
Mental Health Act
, R.S.O. 1990, c. M.7, would
    mitigate his risk to public safety. It also stated there was no air of
    reality to a conditional discharge, noting that the appellants return to the
    hospital on two occasions in the past six months was only achieved through the
    existing detention order.

[26]

Consequently,
    the Board ordered the appellant to be detained at a secure forensic unit at
    CAMH, with the person in charge having discretion to transfer him to a general
    forensic unit. Ontario Shores retained residual authority on the same terms. The
    appellant had transferred to CAMH by the time this appeal was heard.

C.

ANALYSIS

(1)

The Board did not err in basing its significant threat finding on the
    alleged verbal threats to staff members

[27]

The
    appellant argues that the Board decision cannot stand for a few reasons. First,
    the appellant says that the Board erred in basing its significant threat
    finding on the alleged threats made to staff. Specifically, the appellant
    alleges the Board overstated the nature of the threatening behaviour, failed to
    properly consider other evidence material to the significant threat analysis,
    and thus did not conduct a proper
Winko
analysis.

[28]

I
    disagree. The Board did not overstate the nature of the alleged threats. Verbal
    threats, bizarre voice messages, and intimidating behaviour were reported
    multiple times in the evidence. Moreover, the Board did not base its finding of
    significant risk solely on the verbal threats made to staff. The Boards
    decision was also based on the appellants broader history and Dr. Pytycks
    evidence, which the Board accepted without reservation. Dr. Pytycks evidence
    detailed the following relevant factors for the significant threat analysis:

·

if given an absolute discharge, the appellant would stop
    medication, continue abusing substances, become homeless, and rapidly
    deteriorate;

·

the appellants use of synthetic cannabinoids has dramatically
    increased his psychotic symptoms;

·

the appellant has limited insight to his use of substances and
    illness; and

·

the appellants recent deterioration in his stability has resulted
    in hospitalizations of extended periods.

[29]

The
    fact that the appellants situation was worsening was reflected in the need for
    both an addendum a month after the 2019 report, and then a further update from
    Dr. Pytyck at the hearing a month after that. At the hearing, Dr. Pytyck
    testified that as recently as the week prior, the appellant had to be placed in
    intensive care on the secure forensic unit. This was because the appellant was
    engaging in behaviours that the staff were having great deal of difficulty
    managing and the appellant was making them feel personally intimidated and  threatened.
    The Board observed that it also had the benefit of seeing the appellant
    throughout the hearing:

Frequently, Mr. Kassa would laugh
    inappropriately during the evidence and in this panels opinion, it is simply
    more evidence of Mr. Kassas psychotic symptoms.

[30]

The
    Board squarely addressed the fact that Dr. Pytyck and Dr. Morgan disagreed on
    the question of significant threat. The Board was entitled to prefer Dr.
    Pytycks evidence. While the addendum expressed that the appellants behaviours
    under the Boards jurisdiction are best descried as trivial or annoying, this
    was qualified by the caveat that the appellant has received consistent
    antipsychotic treatment for a number of years. Dr. Pytyck referred to this
    caveat in her evidence and was cross-examined on this difference of opinion. Her
    testimony about the appellants recent deterioration was the most current
    information before the Board. It is also worth noting that Dr. Morgan stopped
    short of recommending an absolute discharge in the addendum, contrary to his
    recommendation in the 2018 hospital report. Given the evidence outlined above, I
    see no error in the Board preferring Dr. Pytycks opinion on whether the
    significant threat threshold was met.

[31]

The
    Board properly instructed itself on the
Winko
threshold for
    significant threat. It also expressly considered this courts decision in
Kassa
    (Re)
, noting that there must be more than a potential for harm.

[32]

In
    short, the Board based its decision on significant threat not only on the
    verbal threats, but the evidentiary record as a whole. It closely considered
    the difference between Dr. Pytyck and Dr. Morgans opinion. It also correctly
    considered the
Winko
test and applied it to the evidence which it
    accepted.

(2)

The Board did not fail in exercising its inquisitorial function

[33]

The
    appellant argues that the Board failed to exercise its inquisitorial duty to
    search out all available evidence pertaining to the factors in s. 672.54 of the
Criminal Code
, R.S.C., 1985, c. C-46. In particular, he says that the
    Board should have obtained the clinical notes relevant to the verbal threats described
    by Dr. Pytyck and sought Dr. Morgans testimony.

[34]

Again,
    I do not agree. The Boards duty to inquire arises when additional information
    is necessary, in the Boards view:
Palmer (Re)
, 2013 ONCA 475, 307
    O.A.C. 322, at para. 23. When Dr. Pytyck testified about the threats and
    intimidation of staff members, the Board asked her multiple and specific
    questions about the nature of the threats. It is not clear why the clinical
    notes pertaining to the threats would be necessary or useful in these
    circumstances.

[35]

The
    Board also directly considered the two diverging opinions as to whether the
    appellant posed a significant risk to public safety. Dr. Pytyck explained how
    her opinion differed from Dr. Morgans several times in her testimony. The
    Board clearly understood the nature of the divergence, as it explicitly quoted
    a portion of Dr. Morgans addendum that outlined the divergence, as follows:

It would appear that the primary
    issue is whether Mr. Kassas psychotically driven behaviours prior to coming
    under the Board  during episodes where his schizophrenia was completely
    untreated  are sufficiently serious in nature that it can be determined with
    certainty that Mr. Kassa remains a significant threat as defined in law. These
    behaviours are listed on pages 46 and 47 of his ORB report.

[36]

Pages
    46 and 47 of the hospital report describe instances of his pre-index offence
    conduct, such as setting fires, dangerous driving, and throwing items off a
    balcony. In these circumstances, the Board had sufficient information to
    appreciate the difference of opinion and determine which one it preferred. It accepted
    Dr. Pytycks opinion without reservation. In doing so, as I have already
    discussed, the Board was required to consider Dr. Morgans opinion and the
    appellants criminal and psychiatric history as a whole. It did so, based on an
    extensive evidentiary record, and it was entitled accept Dr. Pytycks evidence
    without calling Dr. Morgan to testify.

[37]

As
    outlined earlier, Dr. Pytycks evidence as to the verbal threats was only one
    element of the significant threat analysis. I see no basis for the appellants
    claim that the Board should have required the clinical notes or Dr. Morgans
    testimony. The Board had the necessary and relevant information to determine whether
    the appellant constituted a significant threat to public safety.

(3)

The Board did not err with respect to the CTO

[38]

The
    appellants final argument is that the Board unreasonably concluded that the
    civil mental health system could not mitigate any risk that the appellant would
    fall away from treatment in the context of either an absolute discharge or a
    conditional discharge. I see no merit to this ground of appeal.

[39]

The
    Board was aware of and explicitly considered the CTO, which was filed as an
    exhibit. It was advised at the start of the hearing that the appellant had
    signed a CTO that was valid until January 2020, unless the appellant revoked
    his consent. During the hearing, the Chairperson confirmed that the appellant
    was capable and could therefore revoke his consent to the CTO at any time. In
    its reasons, the Board stated:

We are mindful of the evidence that Mr. Kassa has entered into
    a Community Treatment Order.

That fact does not give this panel any comfort. Mr. Kassa is
    capable of making treatment decisions. This Community Treatment Order
    terminates January 1, 2020. Mr. Kassa has no obligation to renew that Community
    Treatment Order. In fact, Mr. Kassa as a capable patient, has the right to
    terminate the terms of the Community Treatment Order at any time.

There was evidence that the civil mental health system would
    not be useful for the appellant, given his lack of housing and community
    supports, as well as his substance abuse issues. In particular, the 2019
    hospital report stated that the
Mental Health Act
would not be
    sufficient to keep Mr. Kassa in hospital long enough to fully stabilize him or
    to organize appropriate resources to manage him in the community, given his
    tendency to rapidly return to his usual psychiatric baseline. Furthermore, the
    addendum stated that:

Mr. Kassa pays no heed to the
    terms of his Disposition. He wantonly uses substances, disregards requests to
    return to hospital, and elopes from hospital whenever he feels the desire to do
    so. He is unmotivated to address these risk factors and as such, we anticipate
    that, for the time being, Mr. Kassa will remain on a highly supervised forensic
    unit without access to indirectly supervised privileges.

[40]

The
    Board specifically accepted Dr. Pytycks evidence that it is absolutely
    necessary that the appellant be subject to a detention order, noting that
    there was no air of reality to a conditional discharge. As the Board noted, on
    at least two occasions in the previous six months, the appellants return to
    the hospital had been achieved only because he was subject to a detention
    order.

[41]

I
    see no misapprehension in the Boards treatment of this issue as the appellant
    submits. The Board is an expert tribunal and is presumed to be well aware of
    the mechanisms under the
Mental Health Act.
Absent some evidence that
    the Board truly misunderstood how to enforce the order, there is no basis to
    find that the Board misapprehended the consequences of a revocation of consent.
    In this case, none of the parties, including the appellant, focused on the
    community treatment order during the hearing. It did not figure prominently
    into the hearing and was not central to the decision.

D.

disposition

[42]

Read as a whole, the Boards reasons are reasonable and disclose
    no error or misapprehension that could warrant allowing the appeal. I would
    dismiss the appeal.

Released: September 1, 2020

D.W.

A. Harvison Young J.A.

I agree David Watt J.A.

I agree
Gary Trotter J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Le Treport Wedding &
    Convention Centre Ltd. v. Co-operators General Insurance Company, 2020 ONCA 556

DATE: 20200903

DOCKET: C67088

Feldman, Lauwers and Huscroft
    JJ.A.

BETWEEN

Le Treport Wedding &
    Convention Centre Ltd.

Plaintiff (Appellant)

and

Co-operators General Insurance
    Company

Defendant
    (Respondent)

Emily Stock and Brandon Cook, for the
    appellant

Robert W. Dowhan and Matthew J.
    McMahon, for the respondent

Heard: in writing

On appeal from the judgment of Justice Douglas K. Gray of the
    Superior Court of Justice, dated May 17, 2019, with reasons reported at 2019
    ONSC 3041 and from the costs order, dated June 18, 2019, with reasons at 2019
    ONSC 3779.

COSTS ENDORSEMENT

[1]

We allowed the appeal in part and granted
    judgment to Le Treport Wedding & Convention Centre Ltd. in the amount of
    $429,329.18, with costs and disbursements on the appeal, for the reasons
    reported at 2020 ONCA 487. We invited the parties to make written submissions
    on the trial costs if they were unable to agree.

[2]

Both parties had trial bills of costs in the amount
    of about $100,000 apart from the appellants additional costs for its business
    loss expert.

[3]

In his costs endorsement of June 18, 2019, the
    trial judge awarded the respondent, Co-operators General Insurance Company,
    costs on a partial indemnity basis, but reduced the total award to $75,000 to
    account for Co-operators unreasonable delay in paying out the balance it owed
    to the appellant under a Sewer Back Up Endorsement included in the all-risks policy
    at issue in this case.

[4]

In light of its success on appeal, Le Treport
    requests its trial costs in the amount of $100,000 all-inclusive. While the
    trial judge did not expressly state the amount of the discount he applied to
    Co-operators costs, counsel for Le Treport infers, and we agree, that it was
    in the range of $25,000. In Le Treports submission, this $25,000 discount
    should be added back to the total figure to be awarded.

[5]

Le Treport also notes that it made an offer to
    settle the action for $900,000 on March 8, 2017. It argues that its combined
    award of $813,313.87, comprised of judgment damages and the late Sewer Back Up
    payment, is likely greater than the settlement offer if costs and interest
    are taken into account.

[6]

For its part, Co-operators requests 100 percent
    of its costs at trial or, in the alternative, a 25 percent reduction to the
    costs awarded by the trial judge in recognition of the appellants success on
    one out of the four issues on appeal. Counsel for Co-operators argues that the
    appellant aggressively pursued claims for extracontractual damages, bad faith,
    and punitive damages, refusing to narrow the issues for trial. Co-operators
    also notes that the appellant was ultimately awarded less than one fifth of the
    total amount claimed in the action.

[7]

With respect to the March 8 settlement offer, counsel
    for Co-operators states that Le Treport was only awarded damages of $429,329.18,
    or approximately half of its offer to settle. Despite Co-operators very late
    payment of the Sewer Back Up indemnity, Co-operators asserts that its amount should
    not be counted for the purposes of any analysis under r. 49 of the
Rules of
    Civil Procedure
, R.R.O. 1990, Reg. 194. Counsel for Co-operators also
    argues that the March 8 settlement offer was made before Le Treport issued its Fresh
    as Amended Statement of Claim on May 5, 2017, which significantly increased the
    scope of the action and the damages sought.

[8]

We agree with the appellant that costs should follow
    the event. In this case, Le Treport was required to initiate proceedings in
    order to recover funds to which it was entitled under the policy. Le Treport
    succeeded on appeal and should have succeeded at trial. It should have its trial
    costs.

[9]

While Le Treports success was limited to one
    out of four issues on appeal, this is not a case of mixed success as between,
    for example, a claimant and cross-claimant. It is not appropriate to award trial
    costs in proportion to the number of issues on which the appellant succeeded or
    failed on appeal.

[10]

In coming to this conclusion, we do not apply r.
    49. The trial judge does not appear to have considered the consequences of the
    settlement offer and it is not clear whether the issue was before him. In any
    event, r. 49 is of limited usefulness at this stage. As noted, both parties claimed
    trial costs in the amount of about $100,000. There is no basis for discounting
    the award of costs to the appellant.

[11]

For these reasons, we set aside the costs order
    of the trial judge and fix costs in favour of the appellant at $100,000 all-inclusive
    payable forthwith.

K.
    Feldman J.A.

P.
    Lauwers J.A.

Grant
    Huscroft J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Levin v. Levin, 2020 ONCA 604

DATE: 20200924

DOCKET: C66262

Watt, Trotter
    and Zarnett JJ.A.

BETWEEN

Alla Levin

(Applicant)

Respondent

and

Nikolay Levin

(Respondent)

Appellant

Peter I. Waldmann, for the appellant

Ryan M. Kniznik, for the respondent

Heard: in writing

On appeal from
    the order entered on November 14, 2018 by Justice Mary E. Vallee of the
    Superior Court of Justice, with reasons reported at 2018 ONSC 6805, and from
    the costs order entered on February 08, 2019, with reasons reported at 2019
    ONSC 932.

REASONS FOR DECISION

Introduction

[1]

Mr. and Mrs. Levin were married and have two
    children. Their marriage broke down after almost 26 years. In the meantime, they
    have been unable to resolve financial and property issues, culminating in an
    eight-day trial that ended unfavourably for Mr. Levin. The trial judge made
    various substantive orders in Ms. Levins interest and awarded her costs in the
    amount of $65,030.53.

[2]

This appeal concerns spousal support, child
    support, net family property, and costs. The appellant, Mr. Levin, appeals the
    trial judges decision on these issues, focusing largely on alleged errors in
    imputing income. Ms. Levin, the respondent, acknowledges some minor
    inaccuracies in two of the trial judges calculations (one involving her 2017
    income and the other involving the amount of the equalization payment owed to
    Mr. Levin), and invites this court to make the necessary adjustments. She
    resists any further changes to the trial judges decision and the costs order.

[3]

Subject to rectifying the minor errors conceded
    by Ms. Levin, we dismiss the appeal.

Background

[4]

The parties were married in Ukraine in 1990.
    They immigrated to Israel in 1991 and remained there until they immigrated to
    Canada in 2013. They have two daughters. The older daughter is an adult, born
    in 1993. The younger daughter was born in 2008 and has a learning disability.
    Ms. Levin is her primary caregiver.

[5]

The Levins are both well-educated. Ms. Levin has a
    masters degree in nursing and has been working as a Registered Practical Nurse
    (RPN) and Personal Support Worker (PSW).  Mr. Levin has a software
    engineering degree and works as an electrician. Mr. Levin worked full-time
    throughout the marriage. Ms. Levin worked mostly part-time.
Ms. Levin expects to complete her Ontario registered nursing program
    and become self-sufficient by May 2021. Accordingly, the trial judges order
    allows Mr. Levin to request a review of spousal support at that time.

[6]

Mr. Levin was ordered to pay $2,511 per month in
    spousal and child support until a review of support in May 2021, based on his 2018
    income of $118,033. The trial judge accepted that it was reasonable for Ms.
    Levin to try to return to school and have only part-time income imputed to her
    for the duration of the 3-year degree, in the amount of $33,994. The trial
    judge ordered payment of arrears calculated in accordance with these imputed
    incomes.

Analysis

[7]

As already noted, the trial lasted eight days.
    The trial judge delivered detailed and lengthy (43-pages) reasons, addressing
    the many issues raised by the parties. As the paragraphs that follow will show,
    the trial judges reasoning was sound, subject to a few minor calculation
    errors. Therefore, it is entitled to deference on appeal.

A.

Credibility Findings

[8]

Credibility was at the heart of this family law
    trial. The trial judge made extensive credibility findings that informed her
    determination of the parties incomes.

[9]

The trial judge identified a few minor
    shortcomings in the evidence of Ms. Levin, but found that [o]therwise, Ms.
    Levins testimony was generally consistent and credible:
Levin v. Levin
,
2018 ONSC 6805, [2018] O.J. No. 5931, at para. 9.

[10]

Mr. Levin did not fare as well. The trial judge
    itemized numerous internal and external inconsistencies in his testimony,
    largely in relation to financial disclosure. As discussed below, a key issue in
    imputing income to Mr. Levin was determining whether he worked for cash. He
    denied that he did. However, in a recorded telephone conversation with Ms.
    Levin in 2016, Mr. Levin said: I am trying to make some cash off the books in
    order to pay you, fucking whore, to pay the lawyer. Once again, I dont give a
    shit if its a maximum or minimum to pay you and also to support myself, you
    see? Thats why I [am] working for cash:
Levin v. Levin
,
at para.
    38.

[11]

This evidence assumed prominence in the trial
    judges reasons. It led to the following finding of the trial judge, at para. 39
    of her reasons:

When I consider Mr. Levins answers in
    cross-examination, his demeanour, and the contradictions in his evidence in contrast
    to the documentary evidence, I conclude that he was not a credible or reliable
    witness. Where his evidence conflicts with Ms. Levins evidence, hers will be
    preferred.

[12]

A trial judges findings of fact, including
    credibility assessments, are entitled to substantial deference on appeal
    especially in family law cases:
Rados v. Rados,
2019 ONCA 627, 30
    R.F.L. (8th) 374, at para. 23.
Moreover, the imputation of income for support purposes is
    a discretionary and fact-specific exercise:
Bak v.
    Dobell
,
    2007 ONCA 304, 86 O.R. (3d) 196, at para. 73, affd in
Korman v. Korman
,

2015 ONCA 578, 126 O.R. (3d) 561,
    at paras. 49 and 51.

B.

Attribution of the Appellants Income

[13]

The appellant argues that the trial judge
    misapprehended the evidence in over-imputing income to him and
    under-attributing income to Ms. Levin. Subject to one minor error in relation
    to Ms. Levins income, discussed below, we disagree.

[14]

In imputing income to Mr. Levin, the trial judge
    relied on the fact that, during the relevant time frames, his expenditures
    exceeded his stated income. Mr. Levin submits that this approach is flawed
    because the trial judge treated mortgage payments as an expenditure when his income
    included the net rental income from the same property. The net rental income already
    deducted the mortgage payments; thus, the trial judges approach counted them
    twice. He also submits that discrepancies between his expenditures and his
    income are explained by post-separation payments made to Ms. Levin.

[15]

We do not accept these submissions. Once
    satisfied that there is undeclared income, trial judges have considerable
    leeway in imputing additional income to calculate support. The trial judge
    found Mr. Levin to be an untrustworthy witness, and this guided her approach.
    Mr. Levins own position on his income, especially in 2017, shifted multiple
    times. Moreover, Mr. Levins double counting argument is belied by the trial
    judges finding that he under-declared his rental income from 2016. More
    importantly, as noted above, the trial judge found that Mr. Levin received
    money under-the-table, even though his bank accounts did not show cash
    deposits. In other words, her concerns about his credibility were well founded.
    The amount of income imputed to Mr. Levin was reasonable. We would not
    interfere with the manner in which the trial judge calculated Mr. Levins
    income for any of the years in question.

C.

Attribution of the Respondents Income

[16]

Ms. Levin accepts that the trial judge
    miscalculated her income for 2017 when determining arrears obligations for that
    year. The trial judge found that her income was $33,994.00 when it should have
    been $60,928.99. When this error is corrected, the combined arrears for child
    and spousal support for 2017 is $24,190.79 (instead of $35,026.79).

[17]

Mr. Levin submits that the trial judge
    underestimated Ms. Levins income for 2018 and on a go-forward basis. We
    disagree. The trial judge imputed income of $33,994.00 for the three years it
    is expected to take Ms. Levin to complete her studies. This represents 51% of
    her Line 150 income for 2017. The trial judge did so because the respondent
    will be unable to work full-time during this period. The trial judge made no
    error in reaching this conclusion.

D.

Net Family Property

[18]

Mr. Levin submits that the trial judge erred in
    her calculation of net family property and the amount of the equalization
    payment that he should receive. Ms. Levin agrees. This has the effect of
    increasing the equalization payment by $2,500. The appellant is entitled to an
    equalization payment of $39,091.51.

E.

The Review of Support Issues

[19]

The trial judge ordered that her decision on
    support issues could be reviewed in 2021. The appellant wishes to change the
    order so that he may request a review of support at any time. The trial judge
    chose May 2021 because this is when it is anticipated that Ms. Levin will have
    completed the steps required to achieve self-sufficiency. The appellant gives
    no reason for requesting a variation of this order. The timing of the review
    date in May 2021 seems eminently sensible. Thus, we see no error in the trial
    judges decision on this issue and we decline to interfere.

F.

The Costs Award at Trial

[20]

Mr. Levin challenges the trial judges costs
    award. The trial judge delivered careful reasons for her decision. She
    considered two offers made by the respondent prior to trial; offers that were
    more favourable to Mr. Levin than what he achieved at trial. Rule 18(14) of the
Family Law Rules
, O. Reg. 114/99 entitles Ms. Levin, unless the
    court orders otherwise to costs to the date the offer was served and full
    recovery of costs from that date. The trial judge determined that there was no
    basis to depart from this rule. Moreover, Ms. Levin did not request costs up to
    the point of the first offer; she only requested full recovery from the date of
    that offer onwards.

[21]

The trial judge further found that, even without
    the offers to settle, she would have ordered costs in the same amount because
    of Mr. Levins bad behaviour during the course of litigation, which she
    itemized at para. 18 of her Costs Endorsement:
Levin v. Levin
,
2019
    ONSC 932, [2019] O.J. No. 655.

[22]

As this court held in
Fielding v. Fielding
,
    2015 ONCA 901, 129 O.R. (3d) 65, at para. 69: In family law, there is arguably
    even greater reason to afford deference to the quantum of costs awarded. The
    trial judges costs decision reveals no error in principle.

Disposition

[23]

The appeal is allowed in part. We correct the
    minor errors conceded by Ms. Levin, as noted above. For the sake of clarity,
    the appeal is dismissed other than the following corrections to the trial
    judges order:

i.

Paragraph 3 shall be revised to reflect that Mr.
    Levins support arrears for 2017 shall be $24,190.79 [instead of $35,026.79];

ii.

Paragraph 12 shall be revised to reflect that Ms.
    Levins equalization payment to Mr. Levin shall be $39,091.51 [instead of
    $36,519.51]; and

iii.

Paragraph 21 shall be revised so that the
    adjusted arrears total [net off-set payment] owing from Mr. Levin to Ms. Levin
    shall be $25,422.70 [instead of $38,758.70, which reflects the $10,836.00
    adjustment to 2017 support arrears, plus the $2,500.00 equalization payment
    increase, for a total reduction of $13,336.00 in the net payment owing].

[24]

The appeal from the costs decision is dismissed.

[25]

Ms. Levin is entitled to her costs on appeal. If
    the parties are unable to agree on quantum, they may make written submissions. Ms.
    Levin shall submit a bill of costs and written submissions that are no longer
    than four pages within 14 days of the release of this decision. Mr. Levin will
    be permitted to file a bill of costs and submissions that are no longer than
    four pages within 10 days of receiving Ms. Levins materials. No reply
    submissions shall be filed.

David Watt J.A.

Gary Trotter J.A.

B. Zarnett J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Lone Oak Properties Ltd. v.
    Baillie, 2020 ONCA 614

DATE: 20200929

DOCKET: C67421

Pepall, Benotto and Coroza JJ.A.

BETWEEN

Lone
    Oak Properties Ltd.

Applicant (Appellant)

and

Clayton Baillie and Wilma Baillie

Respondents (Respondents)

Michelle L. Kropp and Kenneth J.
    Peacocke, for the appellant

Matthew J. R. Chapman, for the
    respondents

Heard and released orally: September 25, 2020
    by video conference

On
    appeal from the judgment of Justice Lynda Templeton of the Superior Court of
    Justice, dated August 6, 2019.

REASONS FOR DECISION

[1]

The appellant is a developer of a small
    subdivision. The respondents purchased a vacant lot from the appellant which
    was subject to a time-limited restrictive covenant limiting the size of
    ancillary buildings to 48 by 24 feet. The respondents built a shed measuring 60
    by 30 feet. The appellant applied to the Superior Court for a declaration that
    the shed breached the covenant and for an order requiring its removal.

[2]

The application judge dismissed the appellants
    application with costs of $29,000. This reflected costs on a partial indemnity
    basis up to the date of the respondents offer to withdraw the application and on
    a substantial indemnity basis thereafter.

[3]

The appellant appeals the dismissal of its
    application and the award of costs.

[4]

The restrictive covenant expired on September
    15, 2019 and this would indicate that the appeal is moot.

[5]

The appellant submits that there are community
    interests at stake and as such, this court should exercise its discretion to
    hear and determine the appeal on its merits.

[6]

We do not agree.

[7]

As found by the application judge, the
    restrictive covenant was not part of a building scheme. The tangible and
    concrete dispute between the parties has disappeared, there is no evidence that
    it will recur, and there is no issue of public or constitutional importance
    (see:
Borowski v. Canada,
[1989]1 S.C.R. 342 at para. 39).

[8]

The appellant seeks leave to appeal costs.

[9]

Rule 49.10(7) provides that when the defendant
    (in this case the respondent) makes an offer, and the plaintiff (in this case
    the appellant), obtains a judgment that is as favourable or less favourable
    than the offer to settle, the defendant is entitled to partial indemnity costs.
    There is nothing in the rule that would support an award of substantial
    indemnity costs when the plaintiff obtains nothing (see
Groh v. Steele
,
    2017 ONSC 4925 at paras 8,9).

[10]

The respondent submits that, nonetheless, the
    award of costs is a matter of discretion and it was open to the application
    judge to award substantial indemnity costs after the date of the offer. The award
    of substantial indemnity costs is extraordinary. The application judge
    erroneously anchored her award of substantial indemnity costs on r. 49 and did
    not articulate reasons for the award or its timing beyond a reference to the
    respondents offer to settle.

[11]

The application judge erred by awarding costs on
    a substantial indemnity basis to the respondents after the date of their offer.

[12]

Leave to appeal costs is granted and the costs
    award is reduced to $20,000. The appeal is otherwise dismissed as moot. Costs
    of the appeal are payable to the respondent in the amount of $10,000 inclusive
    of disbursements and HST.

S.E.
    Pepall J.A.

M.L.
    Benotto J.A.

S.
    Coroza J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: McEwen (Re), 2020 ONCA 562

DATE:  20200908

DOCKET: M51208 (C67520)

Gillese, Brown and Paciocco
    JJ.A.

In the Matter of the Bankruptcy
    of Robert Morris Jr. McEwen and Caroline Elizabeth McEwen, of the Town of
    Perth, in the County of Lanark, in the Province of Ontario

BETWEEN

Barbara Lynn Carroll by Her
    Litigation Guardian Shannon Luknowsky, Shannon Luknowsky, Jeffrey Carroll and
    Shannon Luknowsky as Executor for the Estate of Lorne Carroll

Plaintiffs (Respondents/Responding Parties)

and

Robert McEwen and Caroline
    McEwen

Respondents (Respondents)

and

Traders General Insurance Company
, improperly described in Superior Court of Justice Court File
    Number
CV-17-00073740-0000 as Aviva Canada Inc.

Person Affected by an
    Order

Obtained
    on Motion Without Notice

(Appellant/Moving Party)

Harvey Chaiton and Alan L. Rachlin, for
    the moving party, Traders General Insurance Company

Joseph Y. Obagi, for the responding
    parties, Barbara Lynn Carroll et al.

Heard: in writing

COSTS ENDORSEMENT

[1]

In our reasons dated August 17, 2020, we awarded
    Traders General Insurance Company (Traders) its costs of this panel review
    motion and invited the parties to file written submissions regarding the amount
    of those costs. We have reviewed those submissions.

[2]

Traders seeks partial indemnity costs in the
    amount of $24,158.71. The Carroll Plaintiffs argue that much of the work
    required for this motion drew on that already performed for the motion before
    the Chambers Judge. Consequently, the Carroll Plaintiffs contend that Traders
    should only be awarded $7,500.00 in costs.

[3]

This motion was heard in writing. We agree that some
    of the work for this motion duplicated that performed for the initial motion.
    As a result, we conclude that a fair and reasonable award of costs to Traders
    is $15,000.00, inclusive of disbursements and applicable taxes.

E.E. Gillese J.A.

David Brown J.A.

David M. Paciocco J.A.