COURT OF APPEAL FOR ONTARIO

CITATION: Kumarasamy v. Western Life
    Assurance Company, 2021 ONCA 849

DATE: 20211130

DOCKET: C69084

MacPherson, Simmons and Nordheimer
    JJ.A.

BETWEEN

Kamalavannan
    Kumarasamy

Plaintiff (Respondent)

and

Western
    Life Assurance Company
and Morris National Inc.

Defendants (
Appellant
)

Elizabeth Bennett-Martin and Heather M.
    Gastle, for the appellant

Adam B. Kuciej, for the respondent

Heard: November 1, 2021 by
    video conference

On appeal from the order of Justice Jana
    Steele of the Superior Court of Justice, dated January 14, 2021, with reasons
    reported at 2021 ONSC 337.

Nordheimer J.A.:

[1]

Western Life Assurance Company appeals from the dismissal
    of its summary judgment motion, in which it sought to have this action
    dismissed on the basis that the respondents claim is statute-barred under the
Limitations
    Act, 2002
, S.O. 2002, c. 24, Sched. B. For the following reasons, I would allow
    the appeal, grant the summary judgment motion, and dismiss the respondents
    action.

A.

Background

[2]

The respondent was injured in a car accident on
    August 25, 2014. He has been unable to work since that time. At the time of the
    accident, the respondent was working as a truck driver. He says that, as a
    result of the accident, he suffered injuries to his back, neck, shoulders and
    right leg. He also suffers from severe depression, anxiety and chronic pain
    disorder, which he has treated with various anti-depressants and anti-psychotic
    medications. His medical condition following the accident is such that his
    drivers licence has been medically suspended by the Ministry of Transport.

[3]

At the time of the accident, the respondent was
    employed by Morris National Inc. (Morris), and was covered under Morris group
    long-term disability (LTD) policy with the appellant (the Policy). Under
    the terms of the Policy, the deadline for the respondent to provide a Notice of
    Claim to the appellant, and the first day that LTD benefits would become
    payable to the respondent, was February 26, 2015. The Policy also provided that
    a claimant waives their right to claim benefits if they do not provide notice
    within the prescribed time.

[4]

On August 26, 2014, the respondent retained
    litigation counsel to represent him with respect to his tort and accident
    benefits claims. He did not retain these lawyers with respect to any potential
    long-term disability claim. The respondents lawyers wrote to Morris to advise
    it that they had been retained by the respondent with respect to his accident
    benefits claim.

[5]

The respondents sister worked as a legal
    assistant for the lawyers that the respondent had retained. As found by the
    motion judge, the respondents sister:

[p]resumably, as a personal favour to her
    brother (who had limited ability in English and no knowledge whatsoever of
    legal matters), emailed his employer, Morris, for a notice of LTD claim form on
    December 15, 2014. She did this to help her brother put Western Life on notice
    regarding a potential LTD claim.

[6]

Morris emailed the Notice of Claim form to the
    respondents sister. The respondent completed the form (again, presumably with
    help from his sister). The sister signed the form as the respondents
    representative, and noted the name of the law firm representing the respondent
    in parentheses. It was the sister who faxed the form to the appellant on March
    9, 2015. This initial Notice of Claim is a brief form, not a completed LTD
    application.

[7]

On March 11, 2015, the appellant says that it
    sent an acknowledgement letter directly to the respondent requesting that he
    complete the LTD application forms, which were enclosed. However, the respondent
    said that he never received this letter. The motion judge found that the
    respondent did not receive it.

[8]

The appellant sent three follow-up letters to
    the respondent, including a letter dated June 2, 2015, that advised the
    respondent that it had closed the respondents file because he had not
    forwarded the completed LTD application forms. The motion judge found that,
    while the respondent did not receive the other letters, he did receive the June
    2, 2015 letter.

[9]

There is no evidence that anything consequential
    occurred between that time and October 13, 2016, when the respondents lawyers,
    although still not retained to deal with the respondents potential long-term
    disability claim, wrote to the appellant requesting the respondents LTD claim
    file.

[10]

On November 8, 2016, the appellant responded to
    the lawyers to advise that the file had been closed on June 2, 2015, as the
    plaintiff had not sent the required LTD forms. The appellant enclosed a copy of
    the Notice of LTD claim form submitted by the respondent and a copy of the Certificate
    of Insurance for Group Benefits underwritten for Morris.

[11]

The motion judge found that, between November 8,
    2016 and February 10, 2017, and once again presumably, the respondent met
    with his lawyers to discuss what had happened to his LTD claim. On February 10,
    2017, the respondent signed a retainer with his lawyers to also represent him
    on his LTD claim.

[12]

On February 24, 2017, the lawyers wrote to the
    appellant to advise that they had now been retained by the respondent to assist
    with his LTD application. The lawyers requested copies of earlier letters that
    the appellant had sent to the respondent but that the respondent had not
    received. They also requested a copy of the claim forms.

[13]

On March 9 and 10, 2017, the appellant sent the
    lawyers copies of the missing letters together with blank LTD claim forms. On
    March 30, 2017, the lawyers sent the completed LTD claim forms to the
    appellant. A couple of weeks later, the appellant contacted the lawyers to
    advise them that the appellant would require an authorization signed by the
    respondent, so that the appellant could discuss the claim with the lawyers. The
    signed authorization was sent to the appellant by the lawyers through email on
    May 2, 2017.

[14]

On May 10, 2017, the appellant and the lawyers
    had a call to discuss the respondents claim. After the call, the appellant
    provided the lawyers with a letter dated April 19, 2017, which the respondent
    had not previously received. In that letter, the appellant had advised the
    respondent of certain additional information that the appellant required from
    the respondent to evaluate his claim. In that letter, the appellant advised the
    respondent that he should be aware that by reviewing your claim, we are not
    waiving our right to rely on any statutory or Policy provision including any
    time limitations.

[15]

On June 14, 2017, there was another telephone
    call between the appellant and the lawyers to further discuss the respondents
    LTD claim. After the call, the lawyers sent some information to the appellant
    by email. The lawyers also attempted to explain the reasons why the respondent
    had been delayed in making his LTD claim.

[16]

On June 28, 2017, the appellant wrote to the
    respondent advising that his claim was denied as the information provided in
    your letter does not support reasonable cause for the delay. Presumably the
    letter referred to is actually a reference to the lawyers email of June 14,
    2017. The letter also provided information on how the respondent could appeal
    the claim decision. The respondent did appeal the decision, but the appeal was
    denied.

[17]

The respondent issued a statement of claim against
    the appellant and Morris on June 28, 2019.

B.

THE DECISION BELOW

[18]

The motion judge began her analysis with
    reference to s. 5 of the
Limitations Act, 2002
,

and this
    courts decision in
Clarke v. Sun Life Assurance Company of Canada
,
    2020 ONCA 11, 149 O.R. (3d) 433, for the test on when a claim is discovered.

[19]

The motion judge set out the opposing views on
    when the appellants claim would have been discovered. The appellant said that
    the loss to the respondent occurred on the date that it would have been
    required to pay LTD benefits to the respondent under the Policy (i.e., February
    26, 2015). It argued that a reasonable person in the respondents circumstances
    ought to have discovered his claim on June 7, 2015, the date by which he would
    have received the appellants letter closing his file.

[20]

The respondent, on the other hand, argued that
    he could not have become aware of the loss until there was a denial of the LTD
    claim by the appellant. The plaintiff argued that this occurred on June 28,
    2017, which was the date of the denial letter.

[21]

The motion judge did not accept the appellants
    submission that the respondent ought to have discovered his claim on June 7,
    2015, when he received the claim closure letter of June 2, 2015. She found that
    the closure letter was not a denial of the respondents LTD claim because, at that
    point, no claim application had been made.

[22]

Ultimately, the motion judge stated that the
    issue to be determined was when the respondent discovered that a proceeding
    against the appellant was the appropriate means to remedy his loss. She concluded
    that the claim was not fully ripened until the respondents LTD claim was
    denied by the appellant. Because the respondent commenced his claim within two
    years of this date, his action was not statute-barred. On this basis, the
    motion judge dismissed the appellants summary judgment motion.

C.

Analysis

[23]

As I shall explain, the motion judge erred in
    her analysis of the central question. Section 5(1) of the
Limitations Act,
    2002
requires consideration of when the plaintiff ought to have known four
    things: (i) that the injury, loss or damage had occurred, (ii) that the injury,
    loss or damage was caused by or contributed to by an act or omission, (iii) that
    the act or omission was that of the person against whom the claim is made, and
    (iv) that, having regard to the nature of the injury, loss or damage, a
    proceeding would be an appropriate means to seek to remedy it. The subsection
    then requires a determination of the day when a reasonable person first ought
    to have known of these matters. A claim is discovered, within the meaning of
    the
Limitations Act, 2002
, on the earlier of these two dates.

[24]

Of importance as well is section 5(2). It
    provides a statutory presumption regarding the state of knowledge of a person
    with respect to the requirements set out in s. 5(1). Specifically, s. 5(2)
    reads:

A person with a claim shall be presumed to
    have known of the matters referred to in clause (1) (a) on the day the act or
    omission on which the claim is based took place, unless the contrary is proved.

The section is a statutory
    codification of the requirement that an insured person must act with due
    diligence in pursuing any claim:
Longo v. MacLaren Art Centre Inc.
,
    2014 ONCA 526, 323 O.A.C. 246, at paras. 42-43.

[25]

In this case, the respondent knew of his
    injuries at the time of the accident. At the same time, he knew that he was
    covered by his employers long-term disability insurance provided by the
    appellant. Indeed, he knew enough, with the help of his sister, to ask for an
    LTD claim form from the appellant, which the appellant provided. By June 7,
    2015, the respondent knew that the appellant had closed its file. The
    respondent had to know, from that fact alone, that his claim for coverage was
    in jeopardy. Further, from this time forward, the respondent had lawyers
    representing him with respect to his injuries and, more specifically, with
    respect to his accident benefits. He therefore had access to legal advice and
    assistance if he chose to use it.

[26]

Yet, it is almost a year and a half later before
    the respondent speaks to his lawyers about his LTD claim. Throughout this time,
    the respondent knows that he is not receiving any LTD payments from the
    appellant. The respondents lawyers are told that the file has been closed and
    they have discussions with the respondent about his claim. Notwithstanding
    those circumstances, the respondent does not expand his lawyers retainer to
    include the LTD claim until February 10, 2017.

[27]

Thereafter, the lawyers engaged in discussions
    with the appellant. Both the lawyers and the respondent had to know that there
    was an issue about whether the appellant was going to agree to coverage. Indeed,
    by May 10, 2017, the appellant expressly told the respondents lawyers that by
    engaging in a review of the respondents claim, we are not waiving our right
    to rely on any statutory or Policy provision including any time limitations.
    By this point, the alarm bells ought to have been ringing loudly, and yet the
    claim is still not commenced until June 2019.

[28]

The central errors made by the motion judge are
    her conclusion regarding when the respondent ought to have known that a loss
    occurred and her conclusion that the required element of discoverability, found
    in s. 5(1)(a)(iv), that a proceeding would be an appropriate means to seek to
    remedy the injury, loss or damage, was only satisfied when the appellant clearly
    and unequivocally denied the respondents claim. The motion judge does not cite
    any authority for this conclusion, and it is at odds with other authorities,
    most notably, this courts decision in
Thompson v. Sun Life Assurance
    Company of Canada
, 2015 ONCA 162, [2015] I.L.R. I-5721.

[29]

In
Thompson
, this court found that
    there were two reasons why the injured partys claim was barred. One was that
    the injured party had failed to meet the qualifying conditions of the policy:
    at paras. 11-12. The other was that the two-year limitation period had expired
    because the injured party knew of her total disability in August 2008 but did
    not commence her action until September 17, 2010: at paras. 13-14. The latter
    conclusion applies equally to this case. The respondent knew of the
    significance of his injuries by the end of August 2014. However, because of the
    terms of the Policy, the respondent was not entitled to receive LTD disability
    payments until February 26, 2015. Applying the
Thompson
approach, the
    limitation period would have commenced on February 26, 2015, which was the
    first day benefits would have been payable had the respondent submitted a
    timely application and met the Policys definition of Total Disability. By that
    time, the respondent knew that he was injured, he believed that he was entitled
    to long-term disability payments, and he knew that the appellant was not making
    those payments.

[30]

The motion judge attempted to avoid the
    consequences of
Thompson
, and other cases in the Superior Court of
    Justice subsequently decided along the same lines, on the basis of s. 5(1)(a)(iv),
    that is, that litigation was not an appropriate remedy until the appellant
    categorically denied the respondents claim. While the motion judge said, I
    agree with Western Life that a clear and unequivocal denial is not necessarily
    required to start the limitations clock (at para. 62), it is evident from the
    balance of her reasons and her conclusion that that is, in fact, what she
    required.

[31]

There is no authority for the proposition that a
    clear and unequivocal denial is required. It may be that there will be some
    cases where an insurer may, by its conduct, lead an insured person to believe
    that their claim has not been denied (and thus litigation is not required).
    Those cases will likely be rare, and, in any event, this case is not one of
    them. The appellant did not do anything to lead the respondent into the belief
    that his claim was still alive and well. In fact, the appellant did the
    opposite. First, the appellant had told the respondent that his file had been
    closed. Second, when the issue was raised again, almost two years later, the
    appellant expressly told the respondents lawyers that, in undertaking its re-examination
    of the claim, the appellant was not waiving any applicable time limits.

[32]

To accede to the motion judges conclusion is to
    do that which this court cautioned against in
Markel Insurance Company of
    Canada v. ING Insurance Company of Canada
, 2012 ONCA 218, 109 O.R. (3d)
    652, where Sharpe J.A. discussed the appropriate means requirement in s. 5(1)(a)(iv)
    and said, at para. 34:

To give appropriate an evaluative gloss,
    allowing a party to delay the commencement of proceedings for some tactical or
    other reason beyond two years from the date the claim is fully ripened and
    requiring the court to assess to tone and tenor of communications in search of
    a clear denial would, in my opinion, inject an unacceptable element of
    uncertainty into the law of limitation of actions.

[33]

I would add another reason for rejecting any
    suggestion that a limitation period does not commence until an insurer has made
    a clear and unequivocal denial of a claim. To adopt such an approach would
    only serve to encourage insurers to make such denials at their earliest
    opportunity to ensure that the limitations clock starts to run. It would thus
    discourage insurers from undertaking a fair evaluation of the claim before
    making a decision. It might also lead to the commencement of more premature or
    needless proceedings, which is contrary to the intent of the subsection:
Markel
,
    at para. 34;
407 ETR Concession Co. v. Day
, 2016 ONCA 709, 133 O.R.
    (3d) 762, leave to appeal refused, [2016] S.C.C.A. No. 509, at para. 48.

[34]

The motion judges conclusion in this case is at
    odds with the jurisprudence from this court regarding the proper interpretation
    of s. 5(1)(a)(iv), that is, when litigation is an appropriate remedy. It is
    contrary to the decision in
Thompson
, as I have already explained. It
    is also contrary to this courts decision in
Nasr Hospitality Services Inc.
    v. Intact Insurance
, 2018 ONCA 725, 142 O.R. (3d) 561, where Brown J.A.
    undertook an analysis of the existing authorities on the proper interpretation
    of s. 5(1)(a)(iv). In doing so, Brown J.A. noted that there are certain
    circumstances where the conduct of an insurer may, essentially, toll the
    limitation period. He referred to the decision in

Presidential MSH Corp.
    v. Marr, Foster & Co. LLP
, 2017 ONCA 325, 135 O.R. (3d) 321, where
    Pardu J.A. had identified two such circumstances: (i) where the plaintiff
    relied on the superior knowledge and expertise of the defendant, especially
    where the defendant undertook efforts to ameliorate the loss; and (ii) if an
    alternative dispute resolution process offers an adequate alternative remedy
    and that process has not fully run its course. Like the situation in
Nasr
,
    neither of those circumstances arise in this case.

[35]

Indeed, in this case, there is little to which
    the respondent can point in the conduct of the appellant that could give rise
    to a situation akin to promissory estoppel that is often used in insurance
    cases to avoid the effect of a limitation period: see the discussion in
Nasr
at paras. 53-56. Any such suggestion becomes more problematic, in the circumstances
    of this case, since the respondent had access to lawyers throughout the five
    years before this action was commenced.

[36]

In the end result, there are three potential
    start dates for the limitation period that arise in this case and that would be
    consistent with the existing jurisprudence. One is February 26, 2015, when the elimination
    period required by the Policy expired and the respondent should have started to
    receive LTD payments, if he was entitled to them. Another is June 7, 2015, when
    the respondent would have received the appellants notification that his claim
    file had been closed. At that point, the respondent knew that, not only was the
    appellant not making payments to him, but the appellant was also not going to
    make payments to him in the future. Yet another is November 8, 2016, when his
    lawyers received copies of the same correspondence.

[37]

I do not need to decide which of these three
    dates is the actual start date because the two-year limitation period passed
    with respect to all of them before this proceeding was commenced on June 28,
    2019. The respondents claim for LTD benefits under the Policy is therefore
    statute-barred.

[38]

Before concluding, I should note that the motion
    judge did not expressly address s. 5(2) of the
Limitations Act, 2002
when
    conducting her appropriate means analysis. In fairness, it is not clear that
    the parties raised it. Nevertheless, it was a matter that was required by the
    terms of the
Limitations Act, 2002
to be taken into account. However,
    it is obvious that the motion judge took the view that the respondent had
    displaced the presumption that the date of the injury (extended to February 26,
    2015 because of the terms of the Policy) was the day he ought to have known
    that a proceeding was an appropriate means to remedy his loss, because the
    appellant had not made an unequivocal denial of his claim. I have already
    explained why the motion judge erred in adopting that approach.

D.

CONCLUSION

[39]

I would allow the appeal, set aside the order
    below, and, in its place, make an order granting the summary judgment motion
    and dismissing the action. The appellant is entitled to its costs of the appeal,
    which I would fix in the amount of $10
,000
inclusive of disbursements and HST. The appellant is also entitled
    to the costs of the summary judgment motion, which the parties have agreed are
    to be fixed at $25,000 inclusive of disbursements and HST.

Released: November 30, 2021 J.C.M.

I.V.B. Nordheimer J.A.

I agree. J.C. MacPherson J.A.

I agree. Janet Simmons J.A.


WARNING

An order restricting publication in
    this proceeding was made under s. 517 of the
Criminal Code
and
    continues to be in effect.  This section of the
Criminal Code
provides:

517(1)         If the prosecutor or
    the accused intends to show cause under section 515, he or she shall so state
    to the justice and the justice may, and shall on application by the accused,
    before or at any time during the course of the proceedings under that section,
    make an order directing that the evidence taken, the information given or the
    representations made and the reasons, if any, given or to be given by the
    justice shall not be published in any document, or broadcast or transmitted in
    any way before such time as

(a)     if a preliminary inquiry
    is held, the accused in respect of whom the proceedings are held is discharged;
    or

(b)     if the accused in respect of whom the
    proceedings are held is tried or ordered to stand trial, the trial is ended.

Failure to comply

(2)     Everyone who fails without
    lawful excuse, the proof of which lies on him, to comply with an order made
    under subsection (1) is guilty of an offence punishable on summary conviction.

(3)     [Repealed, 2005, c. 32, s.
    17]

R.S., 1985, c. C-46, s. 517; R.S.,
    1985, c. 27 (1st Supp.), s. 101(E); 2005, c. 32, s. 17.

COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Bahler, 2021 ONCA 857

DATE: 20211129

DOCKET: M52932

Fairburn
    A.C.J.O. (Motion Judge)

BETWEEN

Her
    Majesty the Queen

Respondent

and

Heidi Bahler

Applicant

Lydia Riva and Deanna Cristovao, for
    the applicant

Andrew Cappell, for the respondent

Heard: November 26, 2021 by
    video conference

[1]

A non-publication order under ss. 517 of the
Criminal
    Code
, R.S.C. 1985, c. C-46,
was imposed in this matter at the bail hearing in the court below. That order
    precludes the publication, broadcast, or transmission of any evidence taken,
    information given, representations made, and reasons given.

[2]

The decision in
R. v. Bahler
,
2021 ONCA 857 contains information covered
    by that order.

[3]

Accordingly, the decision will be available on
    the Court of Appeal for Ontarios website once the non-publication order ceases
    to be in effect.

[4]

In the interim, a copy of the full decision is
    available at the Registry of the Court of Appeal for Ontario at 130 Queen
    Street West, Toronto.


WARNING

The President of the panel
    hearing this appeal directs that the following should be attached to the file:

An order restricting
    publication in this proceeding under ss. 486.4(1), (2), (2.1), (2.2), (3) or
    (4) or 486.6(1) or (2) of the
Criminal Code
shall continue.  These
    sections of
the Criminal Code
provide:

486.4(1)       Subject
    to subsection (2), the presiding judge or justice may make an order directing
    that any information that could identify the victim or a witness shall not be
    published in any document or broadcast or transmitted in any way, in
    proceedings in respect of

(a)     any of the
    following offences;

(i)      an offence
    under section 151, 152, 153, 153.1, 155, 159, 160, 162, 163.1, 170, 171, 171.1,
    172, 172.1, 172.2, 173, 210, 211, 213, 271, 272, 273, 279.01, 279.011, 279.02,
    279.03, 280, 281, 286.1, 286.2, 286.3, 346 or 347, or

(ii)      any offence
    under this Act, as it read at any time before the day on which this
    subparagraph comes into force, if the conduct alleged involves a violation of
    the complainants sexual integrity and that conduct would be an offence
    referred to in subparagraph (i) if it occurred on or after that day; or

(iii)     REPEALED: S.C.
    2014, c. 25, s. 22(2), effective December 6, 2014 (Act, s. 49).

(b)     two or more offences being dealt
    with in the same proceeding, at least one of which is an offence referred to in
    paragraph (a).

(2)     In proceedings
    in respect of the offences referred to in paragraph (1)(a) or (b), the
    presiding judge or justice shall

(a)     at the first
    reasonable opportunity, inform any witness under the age of eighteen years and
    the victim of the right to make an application for the order; and

(b)     on application
    made by the victim, the prosecutor or any such witness, make the order.

(2.1) Subject to
    subsection (2.2), in proceedings in respect of an offence other than an offence
    referred to in subsection (1), if the victim is under the age of 18 years, the
    presiding judge or justice may make an order directing that any information
    that could identify the victim shall not be published in any document or
    broadcast or transmitted in any way.

(2.2) In proceedings in
    respect of an offence other than an offence referred to in subsection (1), if
    the victim is under the age of 18 years, the presiding judge or justice shall

(a) as soon as feasible,
    inform the victim of their right to make an application for the order; and

(b) on application of
    the victim or the prosecutor, make the order.

(3)     In proceedings
    in respect of an offence under section 163.1, a judge or justice shall make an
    order directing that any information that could identify a witness who is under
    the age of eighteen years, or any person who is the subject of a
    representation, written material or a recording that constitutes child
    pornography within the meaning of that section, shall not be published in any
    document or broadcast or transmitted in any way.

(4)     An order made
    under this section does not apply in respect of the disclosure of information
    in the course of the administration of justice when it is not the purpose of
    the disclosure to make the information known in the community.
2005, c. 32, s. 15; 2005, c. 43, s. 8(3)(b);
    2010, c. 3, s. 5; 2012, c. 1, s. 29; 2014, c. 25, ss. 22,48; 2015, c. 13, s.
    18..

486.6(1)       Every
    person who fails to comply with an order made under subsection 486.4(1), (2) or
    (3) or 486.5(1) or (2) is guilty of an offence punishable on summary conviction.

(2)     For greater
    certainty, an order referred to in subsection (1) applies to prohibit, in
    relation to proceedings taken against any person who fails to comply with the
    order, the publication in any document or the broadcasting or transmission in
    any way of information that could identify a victim, witness or justice system
    participant whose identity is protected by the order. 2005, c. 32, s. 15.

COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Massey-Patel, 2021 ONCA 860

DATE: 20211130

DOCKET: C67596

Strathy C.J.O., Hourigan and
    Paciocco JJ.A.

BETWEEN

Her
    Majesty the Queen

Respondent

and

Timothy
    Massey-Patel

Appellant

Gregory Furmaniuk, for the respondent

Thomas M. Hicks and Angela
    Ruffo, for the appellant

Heard: November 23, 2021

On appeal from the conviction entered on
    May 17, 2019

by Justice Feroza Bhabha of the Ontario Court of Justice.

REASONS FOR DECISION

OVERVIEW

[1]

The appellant, Timothy Massey-Patel, was working
    as a dancer at a male strip club. The complainant, who was attending a
    bachelorette party, hired the appellant for a private dance in a small room in
    the V.I.P. area of the club. Shortly after leaving the V.I.P. area, the
    complainant made allegations that led to a sexual assault charge against the
    appellant. The appellant was tried and convicted on that charge before the
    Ontario Court of Justice.

[2]

At the trial the complainant testified that the
    appellant touched her sexually and inserted his finger into her vagina without
    her consent. She also testified that the appellant briefly inserted his penis
    into her vagina, again without her consent. She said that she did not call out
    for help or vocalize her lack of consent to any of this touching because she was
    frozen in shock and felt powerless.

[3]

The appellant did not testify. In a police
    statement that was admitted into evidence the appellant initially denied that
    the alleged sexual contact took place. He ultimately admitted to the police
    that he had in fact digitally penetrated the complainant but described her as
    an enthusiastic participant and he gave details of her active participation. He
    denied penetrating the complainants vagina with his penis but acknowledged
    that his penis may have been in the general area of the complainants vagina.

[4]

The trial judge did not believe the appellants testimony
    about the complainants consent and was not left in reasonable doubt by that
    testimony. She believed beyond a reasonable doubt the complainants testimony that
    she had not consented to the sexual activity with the appellant. Although she had
    a reasonable doubt about whether the appellant penetrated the complainant with
    his penis, the trial judge found beyond a reasonable doubt that the sexual
    touching and digital penetration occurred. Although it was not argued before
    her, the trial judge noted that a belief in consent defence was not available
    to the appellant because he had not taken reasonable steps to confirm that the
    complainant was communicating consent. Accordingly, she found the appellant
    guilty of one count of sexual assault.

[5]

The appellant appeals that conviction. At the
    end of the oral argument, we dismissed the appeal for reasons to follow. These
    are our reasons.

ANALYSIS

The verdict was not unreasonable

[6]

The appellant argued that, given her reasonable
    doubt about whether the appellant penetrated the complainant with his penis, it
    was unreasonable for the trial judge to have found the appellant guilty of
    sexually assaulting the complainant by touching and digitally penetrating her
    without consent. The appellant submits that these outcomes are irreconcilable.
    We disagree.

[7]

When the trial judges decision is read as a
    whole, it is clear that her reasonable doubt about whether the appellant
    penetrated the complainant with his penis did not arise from credibility
    concerns about the complainant, whose evidence she believed. Instead, the trial
    judges reasonable doubt relating to whether the appellant penetrated the
    complainant with his penis arose from reliability concerns that in no way
    impugned the credibility of the complainants testimony.

[8]

As the trial judge explained, her reasonable
    doubt about the alleged penile penetration arose from the totality of the
    evidence. That evidence included testimony by the complainant that she was in
    shock, an admission made by the appellant to the police that his erect penis
    was near her vaginal area, and the complainants uncertainty about whether the
    appellant ejaculated. In these circumstances it was reasonable for the trial
    judge to have been left in reasonable doubt by the appellants denial that he
    had penetrated the complainant with his penis, while at the same time accepting
    both the appellants admission that he had digitally penetrated the complainant
    and the complainants testimony that she did not consent.

[9]

Nor was it unreasonable for the trial judge to
    have rejected the appellants police statement that the complainant was an
    active participant in the sexual contact that occurred. The appellants account
    was discredited by the fact that, during the course of that statement, his
    version of events moved from indignant denial of sexual contact to admitting
    digital penetration. Quite simply, he lied about the core allegation. Moreover,
    the appellant told the police that when he touches his clients, he stops if
    they say no. The trial judge was entitled to rely on this admission as
    discrediting his account of the conversations he claimed to have had with the
    complainant about her consent. The trial judge was also entitled to find that
    the appellant offered a self-serving and exaggerated account of how visible the
    inside of the booth was to those in the area. Moreover, the trial judge was
    entitled to rely on the complainants abrupt departure from the V.I.P. booth,
    and testimony from her and her friends about her distraught condition, as
    supportive of her account.

[10]

Simply put, we see no merit in the unreasonable
    verdict appeal.

The trial judge did not err in her assessment
    of the evidence of the cashier and the club manager

[11]

The trial judge accepted evidence that when she
    left the V.I.P. area the complainant remarked something to the effect of, what
    was supposed to happen in there, and that she was distraught as she approached
    her friends. The appellant argues that the trial judge erred in accepting this
    evidence in the face of the testimony of the cashier to the contrary. We
    disagree. There was evidence before the trial judge that the cashier was
    distracted by other patrons, and that the club was noisy. In these
    circumstances, the trial judge was entitled to conclude that the cashier failed
    to hear the statement and was not in a position to observe the complainants distraught
    condition described by the complainant and her friends. The trial judge was
    also entitled to find that the cashier did not have a complete memory of
    events, given that his testimony that the complainant did not pay any money
    before leaving the V.I.P. area was contradicted by other witnesses.

[12]

The trial judge was also entitled to reject the
    testimony of the club manager that the complainant did not become upset until
    she failed to pay the required fee, at which point, he said, she decided to
    begin the waterworks". The trial judge found the club manager to be
    partial against the complainant, dismissive of her demeanour and her complaint,
    and disinterested in inquiring into what happened. As explained immediately below,
    the trial judge also found that he gave misleading evidence about the limits of
    appropriate conduct within the club.

[13]

We are not persuaded that the trial judge erred
    in assessing the evidence of the cashier and the club manager.

The trial judge did not rely on impermissible
    stereotypes

[14]

We reject the submission that the trial judge
    engaged in impermissible stereotypical reasoning. None of the inferences drawn by
    the trial judge were inappropriate.

[15]

Specifically, the trial judge relied on her
    observations about the sexualized culture of the club in discounting the
    managers testimony that the kind of sexual activity complained of would not be
    tolerated. She commented on the parade of men in various states of dress and undress
    to explain the complainants apparent confusion about how the appellant was
    dressed. And she referred to the complainants accurate observation of the
    copious amounts of condoms within the V.I.P. area as an illustration of the
    complainants capacity to observe matters of detail despite her alcohol
    consumption. Simply put, there is no basis for concluding that the trial judge
    relied on the sexualized atmosphere of the club as proof that the sexual
    assault occurred, or to support the improper inference that those who would
    work in such a place are less worthy of belief.

[16]

Similarly, there is no basis for concluding that
    the trial judge relied on the appellants general routine during private dances
    to draw impermissible propensity inferences or to find that he is not of
    credible character. She referred to the appellants general routine during private
    dances because the appellant relied upon that routine in recounting his version
    of events, and because his description of his routine included his admission
    that he would determine whether a client was consenting by touching her and
    gauging her reaction. There is simply no basis for concluding that the trial
    judge inferred that as a sex worker, the appellant is less worthy of belief, or
    more likely to commit sexual offences.

[17]

Nor is there any basis for concluding that the
    trial judge relied on the stereotype of the sexually naïve woman to bolster the
    complainants credibility or to undermine the appellants credibility. Instead,
    the trial judge accepted the complainants direct testimony that she was
    shocked at what was taking place, and that based on her one prior visit to a
    strip club where she had gone for a private dance, she was not expecting the
    kind of sexual contact that she alleged. These were findings the trial judge
    was entitled to make.

[18]

We also reject the appellants contention that
    the trial judge disregarded evidence about the complainants conduct leading up
    to the alleged assault. The trial judge was acutely aware that while attending
    a bachelorette party at a strip club, and after seeing fully naked men, the complainant
    purchased a lap dance and voluntarily entered a private booth with the
    appellant. The trial judge recounted all of this in her reasons for judgment. Although
    a trial judge must consider the factual context within which allegations are
    made, as the appellant conceded in oral argument, none of these circumstances
    required the trial judge to have a reasonable doubt relating to the complainants
    denial of consent. The complainant described her state of mind and the trial
    judge believed her. No issues of stereotype or double standards arise.

[19]

Finally, there is no merit in the appellants
    claim that the trial judge evoked the stereotype that sexual activity with a
    sex worker is naughty and something to be ashamed of. It was the appellant who
    advanced this theory by suggesting that the complainant concocted the sexual
    assault allegation because she regretted having let things go so far and had brides
    remorse. The trial judges conclusion that if the complainant had indeed been remorseful,
    she could easily have kept her conduct secret by saying nothing as the events
    took place in a private area, was a reasoned and appropriate basis for
    rejecting the defence theory as implausible.

[20]

We reject the suggestion that the trial judge
    employed impermissible stereotypes.

The trial judge did not apply uneven scrutiny

[21]

We are thoroughly unpersuaded that the trial
    judge applied uneven scrutiny to the evidence. As we have explained, she gave
    cogent and compelling reasons for rejecting the credibility of the exculpatory
    claims the appellant made in his police statement. We can find no basis for
    concluding that the trial judge applied a different standard in finding that
    the comparatively minor imperfections in the complainants evidence did not
    undermine her credibility.

[22]

We reject this ground of appeal.

CONCLUSION

[23]

The appeal is therefore dismissed.

G.R. Strathy C.J.O.

C.W. Hourigan J.A.

David M. Paciocco J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: National Bank of Canada v.
    Guibord, 2021 ONCA 864

DATE: 20211201

DOCKET: M52984 (C70058)

Nordheimer J.A. (Motions Judge)

BETWEEN

National Bank of Canada

Plaintiff
(Respondent/Responding Party)

and

Marcel Guibord

Defendant
(Appellant/Moving Party)

Marcel Guibord, acting in person

Grand Chief Wabiska Mukwa, acting in
    person

Michael S. Myers, for the responding party

Heard: November 30, 2021 by video conference

ENDORSEMENT

[1]

Mr. Guibord brings this motion, on an urgent
    basis, for an order staying the writ of possession obtained by the respondent
    pursuant to an order of Mew J. dated October 5, 2021. The writ of possession
    was part of the relief that arose from the summary judgment granted by the
    motion judge.
[1]

[2]

At the outset of the hearing, the appellant
    asked that I allow Grand Chief Mukwa to speak on his behalf. While I would not
    normally permit that to happen, given the provisions of r. 15.01(3) of the
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194, counsel for the respondent consented
    to having Grand Chief Mukwa speak so I permitted it. In the end result, I had
    the bulk of the appellants submissions from Grand Chief Mukwa, supplemented by
    submissions from the appellant.

[3]

The test on a stay motion is well-known. It is
    set out in
RJR-MacDonald Inc. v. Canada (Attorney General)
,

[1994]
    1 S.C.R. 311. The test requires the court to consider three factors: (i) whether
    there is a serious issue to be tried; (ii) whether the moving party will suffer
    irreparable harm; and (iii) an assessment of the balance of convenience between
    the parties.

[4]

In my view, the appellant fails on all three of
    these factors. First, I see little merit to the appellants grounds of appeal. While
    I do not question the importance of some of the issues that the appellant
    raises that surround the question of land claims by Indigenous peoples, those
    issues, as the appellant attempts to invoke them in his appeal and on this
    motion, do not relate to any of the issues raised by the motion for summary
    judgment. That motion dealt with a straightforward commercial arrangement
    between the parties on which there had been default by the appellant. That
    default entitled the respondent to exercise its rights under the security which
    it held, namely a mortgage. The respondent sought, and obtained, summary
    judgment arising from the default, which included obtaining a writ of
    possession. The various principles and proclamations to which the appellant
    refers, including the United Nations Declaration of the Rights of Indigenous
    Peoples, simply have no proper application to the issues raised on the summary
    judgment motion.

[5]

Second, the appellant will not suffer
    irreparable harm if the writ of possession is enforced. If the appellant
    suffers any losses arising from that enforcement, those losses are entirely
    compensable by way of damages. I would note in passing, on this point, that the
    appellants argument that the property in question is worth many times what is
    owed on the mortgage, begs the question why, if that is the case, the appellant
    has not simply refinanced the property and paid the mortgage out. On the other
    side of this factor is the fact that the respondents mortgage is a second
    mortgage. The first mortgage is a reverse mortgage for which no interest payments
    are required. Rather, the interest accrues and increases the amount due under
    the first mortgage. Consequently, delay operates to reduce the appellants equity
    in the property and thus prejudices the position of the respondent.

[6]

Third, the balance of convenience does not
    favour the appellant. The summary judgment is presumptively valid. The writ of
    possession is not automatically stayed by virtue of r. 63.01(1) of the
Rules
    of Civil Procedure
. The enforcement of security validly given by a party,
    who is in default, should not be interfered with absent compelling reasons.
    Otherwise, the essential functioning of these type of commercial arrangements would
    be undermined. I note that the appellants default dates back to January 2019,
    so he has had time to adjust to the reality that this day would arrive.

[7]

Other considerations also bear on this factor. One
    is that the appellant has not given a satisfactory explanation for why he waited
    until just days before the writ of possession was to be enforced to bring this
    motion, when the writ of possession arises from a decision of the motion judge
    that was given almost two months ago. Another is the salient fact that the appellant
    gave this mortgage to the respondent some four years ago for the express
    purpose of avoiding the respondent exercising its rights under a writ of seizure
    and sale that it held. The mortgage was given to obtain the forbearance of the
    respondent, in order to avoid the eviction of the appellant from the property
    at that time. Yet another is the fact that the appellant has a number of
    outstanding costs awards against him, including from this court. A party cannot,
    on the one hand, seek relief from a court yet, on the other hand, not obey orders
    made by the court.

[8]

For all of these reasons, the motion for a stay
    is dismissed. The respondent is entitled to its costs of the motion, which I
    fix in the amount of $7,000 inclusive of disbursements and HST, recognizing
    that the mortgage entitles the respondent to recover its full indemnity costs.

I.V.B.
    Nordheimer J.A.

[1]

National Bank of Canada v.
    Guibord
, 2021 ONSC 6549.


COURT OF APPEAL FOR ONTARIO

CITATION: R. v. Marzouk, 2021 ONCA 855

DATE: 20211201

DOCKET: C68089

Rouleau, Huscroft and Thorburn
    JJ.A.

BETWEEN

Her Majesty the Queen

Respondent

and

Ahmed Marzouk

Appellant

Faisal Mirza and Kelly Gates, for the appellant

Jeffrey Wyngaarden
, for the respondent

Heard: October 29, 2021, by
    video conference

On appeal from the conviction entered on
    January 9, 2020 with reasons reported at 2020 ONSC 168, and the sentence
    imposed on March 3, 2020 by Justice Dunphy of the Superior Court of Justice.

REASONS
    FOR DECISION

[1]

The appellant appeals his conviction for robbery
    and the resulting three-year sentence.

[2]

The robbery occurred after the complainant contacted
    Mr. Jermaine Jackson to arrange for an advance of money to pay his rent. Mr.
    Jackson was leaving the country and unable to meet the complainant, so he made
    arrangements whereby a friend, the appellant, would advance the funds. The
    appellants telephone number was provided to the complainant. Following an
    exchange of texts between the complainant and the appellant, the complainant
    drove to an agreed rendezvous spot. The complainant had never met the appellant.
    When he reached the agreed meeting spot, the appellant entered his car, forced the
    complainant to exit at gun point, and then drove away with the complainants
    car.

[3]

The central issue at trial was identity.

[4]

The appellants primary ground of appeal is that
    the identity evidence relied on by the trial judge to convict the appellant was
    so weak that the verdict is unreasonable.

[5]

We disagree. The evidence in this case strongly
    implicated the appellant. The trial judge set out 10 pieces of evidence that
    support his conclusion that the appellant committed the carjacking. The
    appellant does not dispute the existence of this evidence, but argues that two
    of the points relied on by the trial judge  the complainants in-court
    identification of the appellant and the complainants identification of the
    appellant in a photo shown to him by police  were of no value and ought to
    have been given no weight by the trial judge.

[6]

The appellant explains that the factors to be
    considered when assessing the reliability of eyewitness identification raised
    concerns: see
R
. v. T
at
(1997), 117 C.C.C. (3d) 481
    (Ont. C.A.). Specifically, the appellant was not known to the complainant; he was
    seen only briefly in stressful circumstances; and his identification was tainted
    because the complainant was presented with a single photo by police and was simply
    asked to confirm that it depicted the perpetrator. In these circumstances, the
    appellant argues, the identification was worthless.

[7]

While we agree that the factors noted by the
    appellant are of concern, they do not render the complainants identification valueless.
    There was considerable additional evidence to support the complainants
    identification, such as the phone number used to arrange the meeting. The trial
    judge was well aware of the difficulties with each piece of evidence and the
    limits to its use. We see no error in his analysis and reliance on the
    complainants identification evidence.

[8]

The appellant also argues that the trial judge
    overlooked a critical piece of evidence that ought to have raised doubt as to the
    appellants connection with the phone number used by the perpetrator of the
    crime. That evidence consists of a comment by Mr. Jackson that, when he later received
    a text message from the phone number associated with the perpetrator, he
    thought the appellant may have been in custody.

[9]

We agree with the Crowns submission that the
    evidence cited by the appellant was, at best, equivocal. The appellant
    presented no evidence regarding his whereabouts when Mr. Jackson received this
    text messages. The trial judges failure to advert to this evidence does not
    constitute an error.

[10]

In any event, the available evidence links the
    appellant to the perpetrators phone number at the time of the offence. The
    complainant had never met the perpetrator. Their contact was entirely arranged
    through the telephone number the complainant received from Mr. Jackson. Mr.
    Jackson testified that the number belonged to the appellant, and that the
    appellant was the only person to answer his request for help.

[11]

The appellants final concern with respect to
    identity is the trial judges reliance on the list of 10 items of evidence confirmatory
    of identity. The appellant argues that each of these items suggests a very tenuous
    links between the appellant and the crime. Even taken together, they are
    insufficient to support the trial judges conclusion.

[12]

In our view, the trial judges reasons
    demonstrate that he was clearly aware that, taken in isolation, there were
    limits and frailties in each individual piece of identification evidence. He
    concluded, however, that viewed cumulatively, they fully supported a finding
    that the appellant committed the robbery. The weighing of evidence is clearly
    within the trial judges domain and we see no error in his conclusion in that
    regard.

[13]

The appellants second ground of appeal is that
    the trial judge erred in allowing the Crown to call rebuttal evidence. The
    Crown presented an uncropped version of the photo shown to the complainant by
    police to identify the appellant. The cropped version was provided to police by
    Mr. Jackson and was put into evidence by the Crown. In his testimony, Mr.
    Jackson identified the cropped photo depicting the appellant and explained that
    the uncropped photo was one of him with the appellant. Prior to providing the
    photo to police, he cropped it to remove himself from the picture so as to avoid
    confusion when it was shown to the complainant. Mr. Jackson testified that the photo
    was taken when he and the appellant were in a relationship. No issue was taken
    with this aspect of Mr. Jacksons testimony and he was not cross-examined on
    these assertions. When the appellant testified in his defence, he denied having
    had a relationship with Mr. Jackson and strenuously denied that a photo
    depicting him with Mr. Jackson in fact existed.

[14]

At the close of the appellants case, the trial
    judge allowed the Crown to lead the uncropped photo as rebuttal evidence. We
    see no error in the trial judge having done so. The uncropped photo was
    obtained by the Crown only after its existence became an issue in the course of
    the appellants testimony. In presenting its case, the Crown clearly did not
    and could not have reasonably expected that the uncropped photo would be an
    issue. It therefore cannot be faulted for not having sought to obtain it from
    Mr. Jackson and introduced it as part of its case. In these circumstances,
    including the appellants failure to challenge Mr. Jackson on his evidence
    relating to the photo and their past relationship, the trial judge did not err
    in allowing this rebuttal evidence.

[15]

The final ground of appeal as to conviction is
    that the trial judge erred in rejecting the appellants alibi evidence. The
    appellant argues that this rejection was based on a misapprehension of the
    evidence. In his evidence, the appellant claimed that, at the time of the
    offence, he was attending a course at York University. He presented evidence consisting
    of the course schedule and confirmation of his registration. In rejecting this
    alibi evidence, the trial judge noted that no attendance is taken in class. The
    Crown concedes that there was no evidence of this led at trial.

[16]

We agree with the Crown that this
    misapprehension is of no moment as it did not play a material part in the
    judges reasoning process. The appellant did not disclose his alibi before
    trial, and the materials he produced at trial did not prove that he had been in
    class at the time of the carjacking or even that he had completed the course he
    was supposed to be attending. The trial judge, finding that the appellant
    lacked credibility, rejected his evidence and drew an adverse inference against
    the appellants alibi based on its late disclosure. We therefore reject this
    ground of appeal.

[17]

We turn now to the sentence appeal.

[18]

The appellant argues that the three-year
    sentence over-emphasized general deterrence and denunciation and failed to
    sufficiently consider the principles of restraint and parity as compared to
    other youthful first-time offenders with strong rehabilitative prospects.

[19]

The appellant explains that, although the trial
    judge indicates that he considered the cases referenced by the parties, he does
    not cite any of those cases or explain how the sentence he imposed is
    consistent with those authorities. Had he properly considered the case law, he
    would have found that similarly situated youthful individuals with no record
    and excellent rehabilitative prospects received far lesser sentences. In the
    appellants submission, a sentence of 12 months would be more in line with the
    case law. He notes that, in
R. v. Ha
ti
my
, 2014 ONSC 1586, a comparable case
    involving more serious injuries, the sentence imposed was one year.

[20]

The appellant also tenders fresh evidence
    showing that he has continued on his positive progress.

[21]

The Crown concedes that the appellant has
    excellent rehabilitative prospects but submits that the trial judge was well
    aware of this. In the Crowns submission, the sentence he imposed is entitled
    to deference and, absent an error in principle or a finding that it is
    demonstratively unfit, it ought not to be interfered with. The Crown relies on
    the decision in
R. v.
    Noor
,
2007 CanLII 44822 (Ont. S.C.) as being
    similar. In that case, the sentence was three and a half years.

[22]

In our view, the case of
Noor
is quite
    dissimilar. In that case, the offender did not show strong rehabilitative
    prospects like those of the appellant. In
Noor
, the trial judge
    explained that, following his release after being charged, the offender had occupied
    himself almost exclusively, it would seem, with getting into further trouble
    with the law.

[23]

Although the trial judge acknowledged the
    appellants mitigating factors and his excellent rehabilitative prospects, when
    he turned to the applicable sentencing principles, he referenced only
    denunciation and deterrence. However, when sentencing a youthful first offender,
    even for very serious offences justifying incarceration, rehabilitation remains
    an important consideration:
R v. S.K.
, 2021 ONCA 619, at para. 12 citing
R v. Priest
(1996), 110 C.C.C. (3d) 289 (Ont. C.A.). In our view, the
    trial judge erred in principle by focusing almost exclusively on the objectives
    of denunciation and deterrence:
R v. Borde
, 63 O.R. (3d) 417 (C.A.), at
    para. 36. This error had an impact on the sentence imposed, such that we must
    intervene:
R v. Lacasse
, 2015 SCC 64, [2015] 3 S.C.R. 64.

[24]

The trial judge properly noted that carjacking
    is a very serious offence. The appellant planned the robbery from his first
    contact with the complainant and used an imitation firearm. The ordeal
    continues to haunt the complainant. However, in the specific context of this
    case, including the appellants exceptional rehabilitative prospects, a fit
    sentence is one that does not result in a penitentiary sentence for this first
    offence. We note in particular that, in the period following the laying of the
    charge, the appellant completed his university degree in kinesiology and health
    sciences. He also has a strong pro-social family network and established community
    ties.

[25]

Therefore, considering the severity of the
    offence, along with the fact that the appellant is a youthful first-time
    offender with excellent rehabilitative prospects, we consider a sentence of two
    years less a day followed by one year of probation to be appropriate.

[26]

Nonetheless, we would dismiss the motion to file
    fresh evidence. In our view, the evidence serves only to confirm the
    appellants rehabilitative prospects, the evidence of which was already before
    the trial judge. As such, it does not meet the test set out in
R v.
Palmer,
    [1980] 1 S.C.R. 759.

[27]

In conclusion, the conviction appeal is dismissed,
    and the sentence is varied to one of two years less a day followed by one year
    of probation, subject to the submissions of the parties as to terms. The
    parties are to provide proposed terms for the probation within 10 days of this
    decision. The balance of the terms of sentence remains the same.

Paul
    Rouleau J.A.

Grant
    Huscroft J.A.

J.A.
    Thorburn J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:

Bianco v. Deem
    Management Services Limited, 2021 ONCA 859

DATE: 20211202

DOCKET: C68214 (M52219)

Gillese, Trotter and Nordheimer
    JJ.A.

BETWEEN

Donald
    Dal Bianco

Applicant (Appellant)

and

Deem Management
    Services Limited and
The Uptown Inc.

Respondents

David T. Ullmann and Brendan
    Jones, for the appellant

Eric O. Gionet, for the respondent,
    Maxion Management Services Inc.

R. Brendan Bissell and Joël
    Turgeon, for the receiver, Crowe Soberman Inc.

Jeffrey A. Armel, for EXP
    Services Inc.

Harold T. Rosenberg, for Deep
    Foundations Contractors Inc.

Edward L. DAgostino, for Kieswetter
    Excavating Inc.
[1]

Heard: November 17, 2021

On appeal from the order of Justice Cory
    A. Gilmore of the Superior Court of Justice, dated March 10, 2020, with reasons
    reported at 2020 ONSC 1500.

Nordheimer J.A.:

[1]

Donald Dal Bianco appeals from the order of the
    motion judge, who determined that the lien claimants in this matter, including
    the respondent, Maxion Management Services Inc. (Maxion), had priority over
    the appellants registered mortgage. For the following reasons, I would dismiss
    the appeal.

A.

Background

[2]

The motion proceeded on the basis of an agreed
    statement of facts. A summary of those agreed facts is sufficient to set the
    background for the motion.

[3]

On May 31, 2018, pursuant to an order of the
    Superior Court of Justice, Crowe Soberman Inc. was appointed as Receiver of:

1.

the property known municipally as 215 and 219
    Lexington Road, Waterloo, Ontario (the Real Property),

2.

the assets and undertakings of Deem Management
    Services Limited related to the property, and

3.

the property, assets and undertakings of Uptown
    Inc.

[4]

The receivership arose out of a project that
    contemplated the redevelopment of the Real Property as a seniors retirement
    residence called the Uptown Residences (the Uptown Project). The respondent,
    Maxion, was the general contractor on the Uptown Project. At some point in early
    2018, Maxion was advised to cease construction. Shortly after construction
    ceased, various service providers registered construction liens against title
    to the property, commencing on March 7, 2018, that ultimately totalled $7,673,672.48.

[5]

The Uptown Project was sold by the Receiver in
    the summer of 2018. After making certain distributions, including payment of
    the first and second mortgages, the Receiver still holds in trust the sum of
    $5,477,224.57 (inclusive of interest but exclusive of the fees of the Receiver
    and its counsel) from the proceeds of sale.

[6]

As a result of competing priority claims between
    the lien claimants and a third mortgage held by the appellant, the Receiver has
    not been able to distribute these remaining funds.
[2]

[7]

The third mortgage was granted by Deem
    Management to the appellant on February 14, 2018 and registered on February 23,
    2018. The third mortgage was registered after the time when the first lien
    arose. The third mortgage secured the principal amount of $7,978,753.45. The
    amounts secured by the third mortgage were all advanced between 2012 and 2015
    without security having been registered. The first advance was made on April
    22, 2012, and the final advance was made on January 22, 2015.

[8]

All of the funds advanced, that were secured by
    the third mortgage, were intended, and were in fact used, in an improvement
    within the meaning of s. 78 of the
Construction Act
, R.S.O. 1990, c.
    C.30, on the Real Property through the Uptown Project.

[9]

As for the procedure on the motion, the parties
    agreed that Maxion would be the moving party, the appellant would respond, and
    the Receiver would also make submissions. Counsel for some of the other lien
    claimants appeared on the motion but did not make submissions or file material.
    Some of the lien claimants also appeared on this appeal, but again did not make
    submissions or file material.

B.

THE DECISION BELOW

[10]

The motion judge began her analysis with
    reference to various sections of the
Construction Act
but she focussed
    on s. 78.

[11]

The motion judge correctly noted that the
    general intention of s. 78 is to give priority to lien claimants over
    mortgages, subject to certain defined exceptions. Those exceptions are set out
    in s. 78. The motion judge said that the onus is on the mortgagee to prove that
    its mortgage falls within one of those exceptions in order to gain priority
    over the lien claimants. In support of these general principles, the motion
    judge cited
Boehmers v. 794561 Ontario Inc.

(1993), 14 O.R.
    (3d) 781 (Gen. Div.), affd. (1995), 21 O.R. (3d) 771 (C.A.).

[12]

The motion judge referred to both of the
    exceptions that the appellant alternatively sought to bring itself within,
    namely, ss. 78(2) and 78(6). The motion judge decided that neither of those
    exceptions applied to the third mortgage. She therefore concluded that the liens
    had priority over the third mortgage.

[13]

In reaching her conclusion, the motion judge
    also explained that the appellants position, if accepted, would be contrary to
    the proper functioning of the
Construction Act
. She said, at para. 42:

If mortgagees are entitled to lie in the
    weeds while advancing funds for the project and then attempt to gain priority
    later by registering mortgages after liens arise, this would be unfair to lien
    claimants and contrary to the overall protection intended by the Act.

C.

JURISDICTION

[14]

Before turning to my analysis of the issues
    raised, I should explain how this appeal comes before this court instead of the
    Divisional Court as would normally be the case under s. 71(1) of the
Construction
    Act
.

[15]

After this appeal was launched, the Receiver
    brought a motion for directions as to the proper venue for the appeal. A panel
    of this court ruled that the appeal lay to this court because the order in
    question had been granted, at least partly, in reliance on jurisdiction under
    the
Bankruptcy and Insolvency Act
, R.S.C. 1985, c. B-3.
[3]
The panel noted that the Receiver
    had authority to seek the courts directions under s. 249 of the
Bankruptcy
    and Insolvency Act
and paragraph 34 of the receivership order.
    Consequently, any appeal of the resulting order lay to this court under s. 193
    of the
Bankruptcy and Insolvency Act
.

[16]

That decision then led to a motion to quash the
    appeal, brought by the respondent Maxion, on the basis that leave was required
    under the
Bankruptcy and Insolvency Act
because the appeal did not fit
    within the subsections of s. 193 relied upon by the appellant, namely ss.
    193(a)-(c). The appellant subsequently brought a motion for leave to appeal,
    which was heard by the panel at the same time as the appeal on the merits.

[17]

I do not consider it necessary to resolve the
    issue raised by the motion to quash for two reasons. First, the issue was not
    pressed by counsel at the hearing. Second, even if the appeal does not fit
    within any of the subsections relied upon (and I do not make any finding in
    that regard), I would grant leave to appeal under s. 193(e). The issues raised
    are of importance to the law relating to construction liens generally and the
    parties have fully argued those issues.

D.

ANALYSIS

[18]

As a starting point, it is useful to set out the
    relevant portions of s. 78, which read:

(1) Except as provided in this section, the
    liens arising from an improvement have priority over all conveyances, mortgages
    or other agreements affecting the owners interest in the premises.

(2) Where a mortgagee takes a mortgage with
    the intention to secure the financing of an improvement, the liens arising from
    the improvement have priority over that mortgage, and any mortgage taken out to
    repay that mortgage, to the extent of any deficiency in the holdbacks required
    to be retained by the owner under Part IV, irrespective of when that mortgage,
    or the mortgage taken out to repay it, is registered.

(6) Subject to subsections (2) and (5), a
    conveyance, mortgage or other agreement affecting the owners interest in the
    premises that is registered after the time when the first lien arose in respect
    to the improvement, has priority over the liens arising from the improvement to
    the extent of any advance made in respect of that conveyance, mortgage or other
    agreement, unless,

(a) at the time when the advance was made,
    there was a preserved or perfected lien against the premises; or

(b) prior to the time when the advance was
    made, the person making the advance had received written notice of a lien.

[19]

I will consider the two subsections relied upon
    by the appellant in the same order that the motion judge did, beginning with s.
    78(6).

[20]

With respect to subsection 78(6), I agree with
    the motion judge that, on its plain meaning, the subsection does not apply to
    the third mortgage. In particular, the subsection refers to any advance made
    in respect of the mortgage. In this case, the advances were made well before
    the third mortgage was given and registered. Indeed, the third mortgage was
    given and registered more than three years after the last advance and almost
    six years after the first advance. I do not see how, in those circumstances, it
    could be said that the advances were made in respect of the third mortgage.

[21]

On this point, a great deal of effort was spent
    by the appellant with reference to the legislative history of s. 78 and, in
    particular, the stated intention of the legislature to avoid the effects of the
    decision of the Supreme Court of Canada in
Dorbern Investments Ltd. v.
    Provincial Bank of Canada
, [1981] 1 S.C.R. 459. In
Dorbern
, the
    court had held that a subsequent registered collateral mortgage took priority
    over an unregistered lien even where the work covered by that lien predated the
    mortgage. Based on
The Mechanics Lien Act
, R.S.O. 1970, c. 267, as it
    was then worded, the court found that registration set the relevant priorities,
    absent specific notice of the lien.

[22]

The appellant criticizes the motion judge for
    failing to refer to this legislative history. In my view, that criticism is misplaced.
    While the motion judge may not have referred to the legislative history, her
    decision is consistent with the intent of s. 78, to the degree that that intent
    is revealed by the legislative history. Of more importance is the fact that the
    motion judges conclusion is consistent with the wording of s. 78(6).

[23]

The decision in
Dorbern
, and its
    impetus for changes to the provisions of the
Construction Act
, have
    limited relevance to the issues raised by this case. Here, the mortgage was not
    a collateral mortgage but a direct mortgage. Further, the legislative change
Dorbern
caused, namely the addition of s. 78(5), is of no direct relevance to the
    issues this court is called upon to determine.

[24]

The appellant also faults the motion judge for
    relying on two previous decisions which the appellant submits are
    distinguishable from this case. Those two decisions are
Jade-Kennedy
    Development Corp. (Re)
, 2016 ONSC 7125, 72 C.L.R. (4th) 236, affd 2017
    ONSC 3421, 72 C.L.R. (4th) 256 (Div. Ct.), and
XDG Ltd. v. 1099606 Ontario
    Ltd.
(2014), 186 O.A.C. 33 (Div. Ct.).

[25]

The appellant attempts to distinguish those two
    cases on the basis that they involved collateral mortgages used to secure
    advances unrelated to the property. The appellant points out that the third
    mortgage was a direct mortgage to secure advances that led to the improvements
    on the Real Property.

[26]

However, having attempted to make that
    distinction, the appellant then curiously goes on to submit that, in enacting
    s. 78, the legislature did not intend to distinguish between collateral and
    other mortgages. Having thus eliminated the basis on which it attempts to
    distinguish these two cases, the appellant resorts to submitting that the two
    decisions were wrongly decided because those cases also failed to take into
    account the true intent of the legislature.

[27]

In my view, the appellants effort to avoid the
    effects of these two cases fails. Those two decisions are consistent with what
    both the motion judge and I say is the effect of the plain wording of s. 78(6),
    that is, that a mortgage will only be given priority to the extent that any
    advances are made in respect of the mortgage. That was not the factual
    situation in those two cases, and it is not the factual situation here. Indeed,
    it was not the factual situation in
Dorbern
, where the Supreme Court
    of Canada reached the same conclusion in its interpretation of s. 14(1) of
The
    Mechanics Lien Act
and the proper meaning to be given to advances made
    on account of any conveyance or mortgage.

[28]

The appellants effort to avoid the effect of
Dorbern
,
    on this point, by noting the difference in the wording of the two subsections
    between on account of and in respect of, the former being narrower than the
    latter, is unpersuasive in the context of these cases and these legislative
    provisions.

[29]

I now turn to s. 78(2) where the wording is, I
    accept, less plain. However, notwithstanding that lack of clarity, I reach the
    same conclusion on the facts of this case. I accept that the thrust of s. 78(2),
    and the wording [w]here a mortgagee takes a mortgage with the intention to
    secure the financing of an improvement, is to restrict the priority of the
    lien claims relating to that improvement solely to any deficiency in the
    holdback amount, and not over the mortgage generally.

[30]

In this case, though, the appellant cannot bring
    itself within that exception for the same reason that undercuts the appellants
    reliance on s. 78(6), and that is that the wording of s. 78(2) suggests that
    the intention to secure the financing operates prospectively. In other words, to
    fit within s. 78(2), the mortgagee must take the mortgage with the intention to
    secure financing of an improvement, which financing is then made. It does not
    operate retrospectively, that is, with respect to an intention to secure
    financing of an improvement that has already been made.

[31]

That conclusion with respect to the intention of
    s. 78(2) is consistent with the intention of s. 78 generally, which is to give
    priority to lien claimants. If a secured party wishes to propel its claim past
    the general priority given to lien claimants, then it bears the onus of
    bringing itself clearly within one of the exceptions set out in s. 78. In this
    case, the appellant has failed to discharge that onus, both with respect to s.
    78(6) and s. 78(2).

[32]

Before concluding, I will address two other
    points raised by the appellant. First, the appellant says that the motion judge
    erred in failing to address the submissions of the Receiver. The motion judge
    was not required to specifically address any partys submissions. What the
    motion judge was required to do was address the substance of all of the
    submissions made and reach a conclusion in light of all of those submissions.
    That is what the motion judge did in this case.

[33]

Second, the appellant complains about the
    public policy point that the motion judge made, in paragraph 42 of her
    reasons, where she referred to mortgagees not being entitled to lie in the
    weeds while advancing funds. I do not consider it necessary to comment on the manner
    in which the motion judge expressed the point. The
Construction Act
sets out the general principle of providing lien claimants with priority. The
    basic concern that the motion judge identified regarding any conclusion that
    would undermine that legislative intent remains a valid one.

E.

CONCLUSION

[34]

I would dismiss the appeal with costs to the respondent,
Maxion, in the agreed amount of $30,000
    inclusive of disbursements and HST. The Receiver did not seek costs.

Released: December 2, 2021 E.E.G.

I.V.B. Nordheimer J.A.

I agree. E.E. Gillese J.A.

I agree. Gary Trotter J.A.

[1]

Counsel for the lien claimants EXP Services Inc., Deep
    Foundations Contractors Inc. and Kieswetter Excavating Inc. appeared but did
    not make any written or oral submissions.

[2]
The Receiver identified that the third mortgage may be invalid,
    including under the
Fraudulent Conveyances
    Act
, R.S.O. 1990, c. F.29, and the
Assignments
    and Preferences Act
, R.S.O. 1990, c. A.33. By order of the Superior
    Court of Justice, the determination of that issue awaits the determination of
    the priority issue raised in this case.

[3]

Dal Bianco v. Deem Management
    Services Limited
, 2020 ONCA 585, 82 C.B.R. (6th) 161.