COURT OF APPEAL FOR ONTARIO

CITATION: Butera v. Chown, Cairns LLP, 2017 ONCA 783

DATE: 20171013

DOCKET: C62318

Juriansz, Pepall and Miller JJ.A.

BETWEEN

Luciano
    Butera, 1515404 Ontario Inc., operating as Niagara Mitsubishi

and Canterra Property
    Holdings Inc.

Plaintiffs (Appellants)

and

Chown, Cairns LLP and Harry Korosis

Defendants (Respondents)

Neil G. Wilson, for the appellants

John D. Campbell, for the respondents

Heard: April 28, 2017

On appeal from the partial judgment of Justice Edward P. Belobaba
    of the Superior Court of Justice, dated May 27, 2016, with reasons reported at 2016
    ONSC 3134.

Pepall J.A.:

[1]

This appeal concerns an award of partial summary judgment
arising from an action by the appellants against their former
    solicitors, the respondents.  The respondents had acted for the appellants in a
    prior lawsuit that was dismissed due to a successful limitations period
    defence.  As a result, the appellants sued the respondents for solicitors
    negligence and lost opportunity damages.  The respondents brought a motion for
    partial summary judgment to dismiss that portion of the appellants damages
    claim relating to misrepresentation.  The judgment was granted.  The appellants
    now appeal.  For the reasons that follow, I would allow the appeal.

Facts

(a)

The Original Action

[2]

The appellant, Luciano Butera, is the sole owner
    and operator of the appellant, 1515404 Ontario Inc., a Mitsubishi Motors
    franchisee operating as Niagara Mitsubishi, and of the appellant, Canterra
    Property Holdings Inc. (collectively referred to as the appellants).  When their
    dealership failed, the appellants sued various Mitsubishi companies
    (Mitsubishi) for damages for breach of contract, misrepresentation,
    negligence, and breaches of the provisions of the
Arthur Wishart Act,
    Franchise Disclosure, 2000
, S.O. 2000,
    c. 3
.

[3]

Mitsubishi moved for summary judgment on the
    basis that the applicable two-year limitation period had expired.  In the
    alternative, it sought an order for summary judgment dismissing some of the
    appellants claims on the merits.  The appellants conceded that the applicable
    limitation period was two years.

[4]

Justice Hambly granted summary judgment to Mitsubishi
    and dismissed the appellants action.  He decided, with reasons reported at
    2012 ONSC 4980, that there was no genuine issue for trial due to the passage of
    the two-year limitation period applicable to the appellants claims.  In addition,
    in obiter, he determined that the appellants had no evidence that the
    information presented to them by Mitsubishi was inaccurate or that Mitsubishi
    did not honestly believe their own predictions of success.  He concluded that
    the predictions made by Mitsubishi were opinions about the future that were
    honestly held and did not amount to misrepresentations.  He also found that the
    entire agreement and release provisions in the dealer licence agreement were
    complete defences to the appellants claims and that the
Arthur Wishart
    Act
did not apply.  If the Act did apply, Mitsubishi made
    no representation which would give the [appellants] a cause of action [under s.
    7 of the Act].

[5]

He ordered the appellants to pay $150,000 in
    costs of both the action and the summary judgment motion on a partial indemnity
    scale inclusive of disbursements and applicable tax.

[6]

The appellants appealed from Hambly J.s
    dismissal of their action and asked that the judgment be set aside. In their
    grounds for appeal, among other things, they took the position for the first
    time that a six-year limitation period was applicable.  Mitsubishi successfully
    moved to strike that ground of appeal on the basis that the appellants had
    raised a new issue that they had not advanced before Hambly J.

[7]

This court then dismissed the appellants
    appeal.  It agreed with Hambly J. that the action was time-barred by the
    two-year limitation period.  In its endorsement, reported at 2013 ONCA 99, the court
    stated:

Without going into the overall merits of the
    plaintiffs claim, we are satisfied that the motion judge was in a position to
    have a full appreciation of the record for purposes of determining  as he
    did  the factual issue of whether, and as of when, the plaintiff knew or ought
    to have known the basis of his claim. The motion judge decided this date was
    April 11, 2005 at the latest and the action was not commenced until October 31,
    2007, more then two years after the claim was discovered. It is therefore
    statute barred.

The court therefore only addressed
    the issue of the limitation period and did not comment on Hambly J.s findings
    made in obiter or otherwise deal with the merits of the appellants claims
    except to say it was not going to consider them.

(b)

The Solicitors Negligence Action

[8]

The appellants then sued the respondents, their
    solicitors in the action against Mitsubishi, for negligence.  The appellants
    stated that in the original action, the respondents had failed to take the
    position that a six-year limitation period applied rather than the two years found
    by Hambly J.  As such, they had lost the opportunity on appeal to argue the
    merits of their claims against Mitsubishi.  They claim $5 million in damages
    flowing from their lost opportunity to argue the merits of their claims in
    negligence, misrepresentation, breach of contract, and breaches of the
Arthur
    Wishart Act
.

[9]

The respondents defended the solicitors
    negligence action and moved for summary judgment asking that the entire action
    be dismissed.  They subsequently advised that they were only going to argue
    that there was no genuine issue requiring a trial on the issue of common law
    and statutory misrepresentation and therefore were seeking a partial summary
    judgment.

(c)

Motion Judges Decision

[10]

The respondents motion for partial summary
    judgment proceeded before Belobaba J.  He framed the analysis at para. 10 of
    his reasons as follows:

The [solicitors] motion turns on whether
    there was an appeal from Justice Hamblys finding that there was no
    misrepresentation.  If the misrepresentation finding was appealed, then the
    [appellants] arguably lost the opportunity to argue and possibly prevail on
    this ground.  But if it was not appealed, then no such opportunity was lost.

[11]

Before Belobaba J., the respondents argued that
    the appellants did not appeal Hambly J.s misrepresentation conclusion and
    therefore there could be no lost opportunity.  The appellants argued to the
    contrary.

[12]

Justice Belobaba agreed with the respondents position.
    He examined the grounds of appeal that had been advanced by the respondents on
    behalf of the appellants and concluded that there was no indication of any
    intention to appeal the finding that there were no misrepresentations.
    Accordingly, the appellants did not lose any opportunity to pursue an appeal on
    this ground.  He therefore allowed the motion for partial summary judgment and
    dismissed the damages claim arising out of the common law and statutory
    misrepresentations allegedly made.

Issues on Appeal

[13]

There are two issues to consider.  First, did
    the motion judge err in concluding that the appellants had not appealed the
    misrepresentation finding? Second, and in any event, did he err in failing to
    consider the advisability of an award of partial summary judgment?

[14]

For the following reasons, I would allow the
    appeal on both grounds.

(a)      Appeal of Hambly J.s Judgment

[15]

The appellants submit that the motion judge
    erred in failing to conclude that the appellants had appealed Hambly J.s
    entire decision.  The respondents argue that the appellants did not raise
    misrepresentation as a specific ground of appeal.  Justice Hambly made a
    factual finding that no misrepresentation was made and this finding was not
    challenged on appeal.  Issue estoppel precluded the appellants from
    re-litigating the issue of misrepresentation as it was finally determined in
    the underlying action.  There was no lost opportunity.

[16]

In my view, the motion judge erred in law in
    framing the issue as an analysis of whether there was an appeal from the
    finding of no misrepresentation.  While issue estoppel may be based on
    reasons alone (see Donald J. Lange,
The Doctrine of Res Judicata in
    Canada
, 4th ed (Markham, ON: LexisNexis Canada, 2015) at
    pp. 16-18), an appeal is from an order or a judgment, not from the reasons for
    decision:
Fram
Elgin Mills 90 Inc. v. Romandale Farms Ltd.
,
2016 ONCA 404, 131 O.R. (3d) 455, at para. 33; and
Glennie
    v. McD. & C. Holdings Ltd.
,
[1935] S.C.R. 257, at p. 268.

[17]

Here, the appellants appealed from the judgment
    of Hambly J. and asked that it be set aside. As a matter of law, this included
    the claims based on misrepresentation.

[18]

That conclusion is dispositive.

[19]

However, I would also note that one of the four
    grounds of appeal that was advanced by the appellants was that Hambly J. had
    erred in his application of the then-applicable full appreciation test enunciated
    by the Court of Appeal in
Combined Air Mechanical Services Inc. v.
    Flesch
, 2010 ONCA 633, 268 O.A.C. 172.  It is
    inconceivable to me that had this court found in favour of the appellants on
    the limitation issue, the panel would not have gone on to consider the
    misrepresentation claims.  Put differently, to the extent that the notice of
    appeal lacked specific detail, it was implicit that the appellants were
    appealing the judgment that encompassed misrepresentation. The appellants
    factum filed before the Court of Appeal was replete with references to
    misrepresentation.  No one would have been caught by surprise.

[20]

Lastly, I would also observe that Hambly J.s
    decision was anchored in his conclusion regarding the expiry of the two-year
    limitation period.  He stated at para. 20 of his reasons that if he were wrong
    in his conclusion on the limitation period, he would go on to assess the other
    arguments advanced.  However, as it turned out, he was not wrong in his
    conclusion and his comments on the issue of misrepresentation were obiter.

[21]

For these reasons, I would allow the appeal on
    this first ground of appeal.

(b)     Partial Summary Judgment

[22]

I now turn to the second ground of appeal which
    relates to the granting of partial summary judgment.

[23]

In
Hryniak v. Mauldin
, 2014 SCC 7, [2014] 1 S.C.R. 87, the Supreme Court rewrote the law
    on summary judgments.  Justice Karakatsanis, writing for a unanimous court,
    commenced her analysis by stating: Ensuring access to justice is the greatest
    challenge to the rule of law in Canada today.  She described accessibility as
    being achievable through justice that is proportionate, timely and affordable.
    As noted in that decision, rr. 1.04(1) and (1.1) of the
Rules of Civil
    Procedure
, R.R.O. 1990, Reg. 194, specifically codify the proportionality
    principle:

1.04(1)    These rules shall be liberally
    construed to secure the just, most expeditious and least expensive
    determination of every civil proceeding on its merits.

(1.1)        In applying these rules, the
    court shall make orders and give directions that are proportionate to the
    importance and complexity of the issues, and to the amount involved, in the
    proceeding.

[24]

The Superior Court of Justice has since
    considered a multitude of summary judgment motions using the principles
    established in
Hryniak
.

[25]

Hryniak
does not address partial
    summary judgment per se except in the context of exercising the enhanced
    fact-finding powers contained in r. 20.04(2.1).  In that regard, Karakatsanis
    J. observed that it may not be in the interests of justice to use the new
    fact-finding powers to grant summary judgment against a single defendant if the
    claims against other parties will proceed to trial in any event. Such partial
    summary judgment runs the risk of duplicative proceedings or inconsistent
    facts.  On the other hand, Karakatsanis J. noted that the resolution of an
    important claim against a key party could significantly advance access to
    justice and be the most proportionate, timely and cost effective approach.

[26]

The pre-
Hryniak
appellate jurisprudence on partial summary judgment limited its availability.  At
    para. 3 of
Corchis v. KPMG Peat Marwick Thorne
,
    [2002] O.J. No. 1437 (C.A.), this court applied
Gold Chance
    International Ltd. v. Daigle & Hancock
, [2001] O.J.
    No. 1032 (S.C.J.) to state that:

[P]artial summary judgment ought only to be
    granted in the clearest of cases where the issue on which judgment is sought is
    clearly severable from the balance of the case.  If this principle is not
    followed, there is a very real possibility of a trial result that is
    inconsistent with the result of the summary judgment motion on essentially the
    same claim.

[27]

Since
Hryniak
,
    this court has considered partial summary judgment in
Baywood Homes Partnership
    v. Haditaghi
, 2014 ONCA 450, 120 O.R. (3d) 438 and in
Canadian
    Imperial Bank of Commerce v. Deloitte & Touche
, 2016
    ONCA 922, 133 O.R. (3d) 561.
Baywood
was
    decided in the context of a motion for summary judgment on all claims, but
    where only partial summary judgment was granted.  CIBC involved a motion for
    partial summary judgment.

[28]

In both
Baywood

and
CIBC
, the court analyzed the
    issue from the perspective of whether (i) there was a risk of duplicative or
    inconsistent findings at trial and whether (ii) granting partial summary
    judgment was advisable in the context of the litigation as a whole.  In both cases,
    the court held that partial summary judgment was inadvisable in the
    circumstances.

[29]

The caution expressed pre-
Hryniak
in
Corchis
is equally applicable
    in the post-
Hryniak
world.  In addition to the
    danger of duplicative or inconsistent findings considered in
Baywood

and
CIBC
, partial summary
    judgment raises further problems that are anathema to the stated objectives
    underlying
Hryniak
.

[30]

First, such motions cause the resolution of the main
    action to be delayed.  Typically, an action does not progress in the face of a
    motion for partial summary judgment.  A delay tactic, dressed as a request for
    partial summary judgment, may be used, albeit improperly, to cause an opposing
    party to expend time and legal fees on a motion that will not finally determine
    the action and, at best, will only resolve one element of the action.  At
    worst, the result is only increased fees and delay.  There is also always the
    possibility of an appeal.

[31]

Second, a motion for partial summary judgment
    may by very expensive.  The provision for a presumptive cost award for an
    unsuccessful summary judgment motion that existed under the former summary
    judgment rule has been repealed, thereby removing a disincentive for bringing partial
    summary judgment motions.

[32]

Third, judges, who already face a significant responsibility
    addressing the increase in summary judgment motions that have flowed since
Hryniak
,
are required to spend time hearing partial summary judgment motions
    and writing comprehensive reasons on an issue that does not dispose of the
    action.

[33]

Fourth, the record available at the hearing of a
    partial summary judgment motion will likely not be as expansive as the record
    at trial therefore increasing the danger of inconsistent findings.

[34]

When bringing a motion for partial summary
    judgment, the moving party should consider these factors in assessing whether
    the motion is advisable in the context of the litigation as a whole.  A motion
    for partial summary judgment should be considered to be a rare procedure that
    is reserved for an issue or issues that may be readily bifurcated from those in
    the main action and that may be dealt with expeditiously and in a cost
    effective manner.  Such an approach is consistent with the objectives described
    by the Supreme Court in
Hryniak

and with the
    direction that the Rules be liberally construed to secure the just, most
    expeditious, and least expensive determination of every civil proceeding on its
    merits.

[35]

Lastly, I would observe the obvious, namely,
    that a motion for partial summary judgment differs from a motion for summary
    judgment. If the latter is granted, subject to appeals, it results in the
    disposal of the entire action.  In addition, to the extent the motion judge
    considers it advisable, if the motion for summary judgment is not granted but
    is successful in part, partial summary judgment may be ordered in that
    context.

[36]

Turning then to the substance of the second
    ground of appeal, the appellants submit that granting partial summary judgment
    on the misrepresentation issue provides minimal, if any, efficiency as the action
    is proceeding to trial on the negligence, breach of contract, and
Arthur
    Wishart Act
claims.  The misrepresentation claims are
    largely intertwined with these other claims and partial summary judgment risks
    inconsistent results.

[37]

The respondents reject these submissions,
    arguing that r. 20.05(1) recognizes the utility of partial summary judgment.
    The motion judges decision is entitled to deference and was appropriate for
    the litigation as a whole.

[38]

As explained in
Hryniak
, the exercise of powers under the summary judgment rule generally
    attracts deference.  Here the motion judge made an extricable error in
    principle in failing to consider whether partial summary judgment was
    appropriate in the context of the litigation as a whole.  As the appellants
    point out, the action is proceeding to trial on the
Arthur Wishart
    Act
claims, which include allegations of a breach of the
    duty of fair dealing and deficient disclosure, the claims in negligence, and for
    breach of contract.  These claims are intertwined with the misrepresentation
    claims.  An award of partial summary judgment in these circumstances may lead
    to inconsistent results to the extent the misrepresentation claims were not barred
    due to a limitation period.  On the other hand, had the litigation as a whole
    been considered, partial summary judgment would not have been an appropriate
    award as it would not serve the objectives of proportionality, efficiency, and
    cost effectiveness.

Disposition

[39]

For these reasons, I would allow the appeal and
    set aside the award of partial summary judgment. I would order the respondents
    to pay $12,500 in costs of the appeal on a partial indemnity scale inclusive of
    fees, disbursements, and applicable tax. I would set aside the costs of $25,000
    awarded by the motion judge to the respondents and, in the absence of agreement
    between the parties which is encouraged, remit the costs to him to reconsider
    in light of this decision.

Released:

OCT 13 2017                                   S.E.
    Pepall J.A.

RGJ                                                I agree
    R.G. Juriansz J.A.

I
    agree B.W. Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Deltro Group Ltd. v. Potentia Renewables Inc., 2017
    ONCA 784 DATE: 20171012

DOCKET: M48177 (C64114)

Sharpe, Blair and Epstein JJ.A.

BETWEEN

Deltro Group Ltd. And Deltro Electric Ltd.

Plaintiff

(Appellant/Responding
    Party)

and

Potentia Renewables Inc.

Defendant

(Respondent/Moving
    Party)

William Brock and Maureen Littlejohn, for the moving
    party

Michael Mazzuca, for the responding party

Heard and released orally: October
    6, 2017

REASONS FOR DECISION

[1]

The respondents move to quash this appeal from the dismissal of a motion
    for an interlocutory injunction.

[2]

In our view, the motion must be granted as the order is interlocutory in
    nature and therefore, the appeal is not within the jurisdiction of this court:
Courts
    of Justice Act
R.S.O. 1990. C. C. 43, ss. 6(1)(b) and 19(1)(b).

[3]

It is well established that the characterization of an order as being
    final interlocutory depends upon its legal nature rather than its practical
    effect. Accordingly, even where the practical effect of refusing an
    interlocutory injunction, may from a practical perspective effectively end some
    aspect of the litigation, the legal nature of such an order remains interlocutory
    for the purposes of appeal see:
Ontario Medical Association v. Miller
,
    [1976] 14 O.R. (2d) 468.

[4]

The request for a mandatory injunction to search and obtain documents
    was made within this action and the order dismissing that request is also
    interlocutory in nature for the purposes of appeal.

[5]

The appellants express concern that the reasons of the motion judge
    determine the issue of confidentiality. We do not accept that submission. The
    reasons reflect a decision on the state of the record at the stage of the
    interlocutory injunction and do not conclusively determine the issue which
    remains open for trial.

[6]

Accordingly, the appeal is quashed.

[7]

Costs to the moving party fixed at $5000, inclusive of taxes and
    disbursements.

Robert J. Sharpe
    J.A.

R.A. Blair J.A.

Gloria Epstein
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Fiorito v. Wiggins, 2017 ONCA 765

DATE: 20171004

DOCKET: C62788

Laskin, Feldman and Miller JJ.A.

BETWEEN

Anna Maria Fiorito

Applicant (Appellant)

and

Jefferson Ross Wiggins

Respondent (Respondent)

Brandon Jaffe, for the appellant

Brian Ludmer, for the respondent

Heard: August 24, 2017

On appeal from the order of Justice Pamela L. Hebner of
    the Superior Court of Justice, dated September 23, 2016.

FELDMAN J.A.:

[1]

Following protracted custody and access litigation that involved two
    lengthy trials and an appeal to the Court of Appeal, costs of $200,000 were
    awarded to the father. During a further access review hearing ordered by the
    Court of Appeal that proceeded before the awarded costs were paid, the mother
    made an assignment into bankruptcy.

[2]

The issue in this appeal is whether the bankruptcy judge erred in law by
    lifting the automatic stay arising from the bankruptcy to allow the father to
    enforce the $200,000 debt for costs against otherwise exempt assets of the
    mother.

[3]

I would dismiss the appeal.

Background Facts

[4]

The parties were married on May 23, 1998 and have three daughters. At
    the time of the motion under appeal, the children were aged 15, 13 and 12. The
    parties separated on February 8, 2008. Following two years of custody and
    access litigation, they entered into minutes of settlement whereby the mother had
    custody of the girls with substantial access to the father. However, the mother
    did not comply with the access provisions of the agreed settlement.

[5]

The father brought a contempt motion, which was heard together with a
    custody and access trial over 22 days from March to May 2011. Justice Harper
    found the mother to be in contempt of previous interim orders. The children
    expressed fear and dislike of the father because of the mothers fear and
    dislike of him. Justice Harper sentenced the mother to six months probation.
    Custody of the children remained with the mother, but she was required to grant
    access to the father in accordance with Harper J.s order. The children were
    found to be in need of protection. There was to be a review of the custody and
    access order before Harper J. in six months: see
F. (A.M.) v. W. (J.R.)
,
    2011 ONSC 1868, 6 R.F.L. (7th) 282.

[6]

The review took place over 23 days from July 2012 to April 2013. Justice
    Harper found that although the ordered access was occurring, the children
    refused to interact with the father and were rude and disrespectful to him and
    his new wife. As a result, Harper J. granted custody of the children to the
    father with access to the mother only during weekly sessions with the
    childrens therapist. The mother could bring a change motion if she was able to
    demonstrate that she would promote a loving relationship between the children and
    both parents: see
F. (A.) v. W. (J.)
, 2013 ONSC 4272. Costs in the
    amount of $400,000 were awarded to the father for the 2011 and 2013 proceedings:
    see
F. (A.) v. W. (J.)
, 2013 ONSC 7770.

[7]

On appeal in October 2015, this court set aside the contempt finding as
    there was no outstanding order at the time to be the subject of contempt,
    ordered another access review to be held by February 2016, and reduced the
    costs award to $200,000: see
Fiorito v. Wiggins
, 2015 ONCA 729, 69
    R.F.L. (7th) 5.

[8]

After the date of February 1, 2016 was set for the review hearing, the
    father brought a motion returnable on January 22, 2016 for the purpose of
    obtaining or ensuring payment of the $200,000 costs award. He wanted security
    orders and payment as a condition of proceeding with the review hearing. Justice
    Hebner refused any delay, as the Court of Appeal had required the review to be
    held no later than February 2016. Instead, she made a temporary order, on
    consent, that: (i) the mother produce to the father copies of all bank and
    investment statements (personal and corporate); (ii) the mother produce to the
    father financial and accounting records for her corporation; (iii) examinations
    be held according to a stated timetable; and (iv) pending the return of the
    motion, the mother was restrained from disposing of her RRSPs and from
    dissipating assets.

[9]

On that motion, the mother filed evidence swearing that she intended to
    pay the awarded costs and denying a suggestion in the evidence submitted on
    behalf of the father that she intended to file for bankruptcy after the review
    to thwart the fathers claim.

[10]

During
    the review hearing, on February 9, 2016, the father brought a motion requesting
    the assistance of the court in enforcing the costs award by garnishment against
    the financial institutions where the mother had registered assets. Before the
    assets could be garnished, the mother had to convert them to cash. In
    responding evidence, the mother took the position that her RRSPs could not be
    garnished as they were in the nature of a trust. The motion was never heard, as
    the mother made an assignment into bankruptcy on February 22, during the review
    hearing.

[11]

In
    the bankruptcy, the mother claimed exempt assets of $295,600. She claimed no
    other assets with any value. Her home was valued at $275,000 and was fully
    mortgaged. The value of her shares in her corporation was $1. Comparing the
    financial statement the mother filed in response to the January enforcement motion
    with the one filed for the bankruptcy proceeding, her debts had increased by
    $41,192, with no explanation given.

[12]

The
    motion judge noted the legal effect of the mothers assignment into bankruptcy
    on the father: (i) he was no longer able to enforce the costs award; (ii) upon the
    mothers discharge, that award would be unenforceable; and (iii) the mother
    would be able to keep her RRSPs. This result would occur because although RRSPs
    are exempt assets in bankruptcy, under Ontario law they are not exempt from
    creditors outside of bankruptcy, as they are not a class of property specified
    under the
Execution Act
, R.S.O. 1990, c. E.24. The mother would
    therefore be able to keep those assets.

Decision of the Motion Judge

[13]

The
    father brought a motion, heard on August 5, 2016, for an order annulling the
    bankruptcy or, alternatively, lifting the stay under s. 69.4 of the
Bankruptcy
    and Insolvency Act
, R.S.C. 1985, c. B-3 (the BIA), and authorizing the
    father to continue his enforcement of the costs award against the mothers
    registered assets.

[14]

The
    motion judge referred to s. 69.4 of the BIA, which allows the court to make a
    declaration that the automatic stay on bankruptcy does not operate in respect
    of the applying creditor where the creditor is likely to be materially prejudiced
    by the stay, or where it is equitable on other grounds. She considered case law
    regarding lifting stays to allow a spouse to enforce an equalization claim
    against exempt assets, including
Schreyer v. Schreyer
, 2011 SCC 35,
    [2011] 2 S.C.R. 605, and
Scott (Re)
, 2014 ONSC 5566, 51 R.F.L. (7th)
    233. She also considered
Shirkie v. Shirkie
, 2015 SKQB 303, 67 R.F.L.
    (7th) 274, where a bankruptcy stay was lifted to allow a spouse to pursue a
    family property claim against exempt assets.

[15]

The
    motion judge determined that the father was entitled to have the stay lifted,
    based on three factual findings: (i) this was an extreme case of one parent
    undermining the other parent with the children during eight years of litigation
    in which the father was trying to have a relationship with his children; (ii)
    the Court of Appeal determined that the mother should pay the father $200,000
    in costs for the two trials before Harper J., but she had paid nothing; and (iii)
    when the court restrained the mother from disposing of her RRSPs or
    dissipating assets and allowed the review hearing to proceed without the
    payment of the costs award, the court and the father relied on the mothers
    representations in her affidavits that she intended to pay the costs and that
    she did not intend to thwart that payment by making an assignment into
    bankruptcy.

[16]

Based
    on those factual findings, the motion judge found that the father was likely to
    be materially prejudiced by the continued operation of the stay. She concluded,
    based on the record, that the father was likely to receive nothing towards his
    costs award unless the stay was lifted, and she observed that allowing him to
    enforce that award against the mothers bankruptcy-exempt assets would not
    affect other creditors. She was also satisfied, on the alternative ground, that
    it was equitable to grant the declaration. Finally, because the costs debt
    would be released on the mothers discharge from bankruptcy, the motion judge
    also ordered the discharge to be stayed for a reasonable period of time to
    allow the father to take the appropriate enforcement steps.

Issues

[17]

The
    issues on this appeal are:

1) Did the motion judge err in law by lifting the stay under s.
    69.4 of the BIA in order to allow the enforcement of a family law costs award?

2) Did the motion judge err in law by misapprehending the
    meaning of prejudice and of equitable under s. 69.4 of the BIA?

3) Did the motion judge misapprehend the evidence regarding
    whether the father would receive any payment towards his costs award in the bankruptcy?

Analysis

(1)

Did the motion judge err in law by lifting the stay under s. 69.4 of the
    BIA in order to allow the enforcement of a family law costs award?

[18]

In
    the Supreme Court of Canada case of
Schreyer
, the husband made an
    assignment into bankruptcy without giving notice to the wife, who had an
    equalization claim under Manitoba family law legislation. He was also
    discharged without notice to her, thereby releasing him from her claim.
    However, the husband owned a farm, which was exempt from execution by creditors
    under s. 13 of Manitobas
The Judgments Act
, C.C.S.M. c. J10, and could
    not be disposed of by the trustee in bankruptcy for distribution to creditors.

[19]

Speaking
    for the court, at para. 32, LeBel J. stated:

In such circumstances, the appropriate remedy for a creditor
    like the appellant would be to apply to the bankruptcy judge under s. 69.4
BIA
for leave to pursue a claim against the exempt property. Since this property is
    beyond the reach of the ordinary creditors, lifting the stay of proceedings
    cannot prejudice the estate assets available for distribution. In keeping with
    the wording of s. 69.4(
b
)
BIA
, this is why it would be
    "equitable on other grounds" to make such an order. This procedure
    would also accord with the policy objective of bankruptcy law of maximizing,
    under the
BIA
, returns to the family unit as a whole rather than
    focussing on the needs of the bankrupt: see, on this point,
Hildebrand v.
    Hildebrand
(1999), 13 C.B.R. (4th) 226 (Man. Master), at para. 16; and,
    generally, on Parliament's concern for the support of families,
Marzetti v.
    Marzetti
, [1994] 2 S.C.R. 765 (S.C.C.), at pp. 800-01.

[20]

The
    appellant submits that LeBel J.s statement of the law applies only to an
    equalization payment, and not to a custody costs award. The argument hinges on
    what she submits is a necessary link between a lift-stay order and a spouses ability,
    before bankruptcy, to obtain an order granting a proprietary interest in the
    other spouses property under s. 9(1) of
Family Law Act
, R.S.O. 1990,
    c. F.3 (the FLA) when applying for an order for an equalization payment. Such
    a proprietary order is not available to enforce a costs award.

[21]

Sections
    9(1)(b) and (d) of the FLA provide:

9 (1) In an application under section
    7, the court may order,

(b) that security, including a
    charge on property, be given for the performance of an obligation imposed by
    the order;

(d) that, if appropriate to satisfy
    an obligation imposed by the order,

(i) property be transferred to or in
    trust for or vested in a spouse, whether absolutely, for life or for a term of
    years, or

(ii) any property be partitioned or sold.

[22]

Section
    5 of the FLA establishes entitlement to an equalization payment between
    spouses. Section 7 provides the mechanism to apply to court to determine any
    matter respecting the entitlement under s. 5.

[23]

In
Schreyer
, LeBel J., at para. 25, explained that the only way Ms.
    Schreyers equalization claim would not have been extinguished by Mr.
    Schreyers discharge from bankruptcy was by obtaining an order lifting the stay
    so that she could seek a proprietary remedy under s. 17 [of
The Family
    Property Act

of Manitoba]. That section is to the same effect as
    s. 9(1) of the Ontario FLA. The appellant submits that the lift-stay remedy is
    therefore only applicable where the creditor spouse is then able to obtain a
    proprietary interest in exempt assets in pursuit of an equalization claim.

[24]

I
    do not accept this submission. In Manitoba, a farm property is exempt from execution
    by creditors. As a result, a proprietary order would have been necessary to
    allow a spouse to realize on such property outside bankruptcy. By contrast, in
    Ontario, outside of bankruptcy, RRSPs are not exempt from execution by
    creditors, as they are not a class of property specified under the
Execution
    Act
. Therefore no order under ss. 9(1)(b) or (d) is necessary to allow a
    spouse to execute any debt against an RRSP belonging to the other spouse.
    However, once a spouse makes an assignment into bankruptcy, that spouses
    RRSPs become exempt property: see BIA, s. 67(1)(b.3). Accordingly, the
    lift-stay remedy allows the creditor spouse to execute any debt against RRSPs;
    they are only exempt under the bankruptcy regime, not under the provincial
    property and creditors rights laws.

[25]

Similarly,
    I do not accept the appellants argument that the effect of the lift-stay order
    is to give the respondent a proprietary interest in the RRSPs for a costs debt,
    effectively expanding the courts power under s. 9(1) of the FLA. As stated, under
    Ontario law, the respondent does not require a proprietary order to execute
    against RRSPs, as outside bankruptcy they are not assets that are exempt from
    execution.

[26]

Furthermore,
    there is nothing in the reasons of LeBel J. that suggests that the equitable
    considerations for allowing a spouse to obtain the lift-stay remedy to execute
    against exempt or protected assets of the other spouse are limited to enforcing
    an equalization claim and would not apply, in appropriate circumstances, to a
    costs award arising out of protracted family litigation.

[27]

Maximizing
    returns to the family unit as a whole, not just the bankrupt, is identified by
    LeBel J., at para. 32, as a policy objective of bankruptcy law. This is the
    effect of lifting the stay and allowing the creditor spouse, where it is
    equitable to do so, to realize against exempt assets of the bankrupt spouse,
    which are not available to other creditors in the bankruptcy.

(2)

Did the motion judge err in law by misapprehending the meaning of
    prejudice and of equitable under s. 69.4 of the BIA?

(a)

Material Prejudice

[28]

The
    appellant submits that the motion judge erred by finding that the respondent
    would suffer material prejudice because he would likely receive nothing towards
    his costs award in the bankruptcy. The appellant argues that s. 69.4(a)
    requires prejudice different from that experienced by other unsecured
    creditors, and that the fathers prejudice is no different from that suffered
    by any other unsecured creditor in a bankruptcy.

[29]

I
    would not accept the submission that the motion judge erred in her interpretation
    or application of the material prejudice requirement of the section. Her
    conclusion is readily justifiable by the record.

[30]

The
    appellant argues that differential treatment is a requirement for material
    prejudice. I disagree. In my view, differential treatment may justify a finding
    of material prejudice. However, it is not a necessary factor. The appellant
    cites
Ingles (Re)
(1997), 46 C.B.R. (3d) 202 (B.C. S.C., in Chambers),
Janodee Investments Ltd. v. Pellegrini
(2001), 25 C.B.R. (4th) 47
    (Ont. S.C.) and
Exponents Canada Inc. v. Sharma
, 2014 ONSC 7097, 19
    C.B.R. (6th) 231. However, these cases include differential treatment as one
    possible kind of material prejudice. Material prejudice arises when the
    bankruptcy would treat a creditor unfairly, differently or in some way worse
    than other creditors: see
Ingles
, at para. 23;
Janodee
, at
    para. 28; and
Exponents
, at para. 69.

[31]

Material
    prejudice can arise from the size of the debt and the expected loss. As noted by
    Farley J. in
Cumberland Trading Inc. (Re)
(1994), 23 C.B.R. (3d) 225
    (Ont. Gen. Div.), at para. 11, material prejudice:

[I]s an objective prejudice as opposed to a subjective one
    i.e., it refers to the degree of the prejudice suffered vis-à-vis the
    indebtedness and the attendant security and not to the extent that such
    prejudice may affect the creditor
qua
person, organization or entity.

[32]

The
    motion judge made three factual findings that differentiated the respondents
    position from that of other creditors and demonstrated the unfairness he faced:
    (i) the need for the father to pursue lengthy custody and access litigation in order
    to have any relationship with his children; (ii) the mothers failure to pay
    anything toward the costs ordered by the Court of Appeal; and (iii) the fact
    that the mother thwarted the enforcement of the costs award by reneging on
    assurances she made to the court about her intent to pay the costs and not use
    bankruptcy to thwart that payment. It was these findings that grounded the
    finding of prejudice.

[33]

Section
    69.4(a) also requires that the material prejudice be related to the continued
    operation of the stay. The motion judge was entitled to find that the father
    would in all likelihood, receive nothing absent a lifting of the stay.

(b)

Equitable on Other Grounds

[34]

The
    appellant also submits that the motion judge erred in finding that it was
    equitable to grant the declaration lifting the stay in favour of the
    respondent. She argues that the cause of the debt is not relevant to the
    consideration of the equities, nor did the change in her intention regarding an
    assignment into bankruptcy either prejudice the respondent or create an
    inequity. She also argues that, while the motion judge could have postponed the
    review regarding access to the children, the motion judge could not have
    transferred the RRSPs to the father using s. 9(1) of the FLA because the debt arose
    from a costs award and not an equalization claim.

[35]

I
    do not agree with these submissions. Under s. 69.4 courts have a wide
    discretion based on the particular facts of the particular case: see L.W.
    Houlden, G.B. Morawetz and Janis Sarra,
Bankruptcy and Insolvency Law of
    Canada
, 4th ed. (Toronto: Thomson Reuters, 2016) vol. 2 at pp. 3-350,
    3-400.1. The motion judge was clearly entitled to take into account the
    circumstances regarding the background to the debt, particularly in the context
    where other creditors would not be affected by the order being sought. Further,
    although the appellant characterizes her decision to make an assignment into
    bankruptcy in the midst of the review hearing as a change in [her] intention,
    there is no explanation on the record for that change. The court had previously
    relied on her representations that: (i) she intended to pay the costs; and (ii)
    she had no intention of filing for bankruptcy to avoid this payment. It is
    apparent that the motion judge did not accept that the appellants behaviour
    was a simple change of intention.

[36]

Further,
    as in
Schreyer
, because the respondent would be enforcing the costs
    award against exempt assets in the bankruptcy, other creditors would not be
    affected. As LeBel J. held, at para. 32, [i]n keeping with the wording of s.
    69.4(
b
) [of the]
BIA
, this is why it would be equitable on
    other grounds to make such an order.

[37]

The
    appellant repeats again here her submission regarding the limited application
    of s. 9(1) of the FLA. To be clear, the motion judge did not refer to this
    provision or intend to make any order under it. The orders she made regarding
    the RRSPs were only to facilitate their liquidation for ease of execution and
    to prevent the appellant from dissipating them. The orders did not give the
    respondent a proprietary interest or preference in respect of those assets.

[38]

Lastly,
    on this point, the appellant argues that none of the factors listed in
Advocate
    Mines Ltd.
,
(Re)
(1984), 52 C.B.R. (N.S.) 277 (Ont. S.C.),
    that are typically present when a bankruptcy stay is lifted are present in this
    case. However, the appellant rightfully concedes that these factors are not an
    exhaustive list. Given the strong equitable grounds, lifting the stay was
    appropriate in this case. Further, in light of the history and current status of
    the proceedings, I would find that logic dictates that this claim be allowed
    to proceed, in line with the fifth
Advocate Mine
s
factor: see
Advocate
    Mines
, at p. 278.

(3)

Did the motion judge misapprehend the evidence regarding whether the
    father would receive any payment towards his costs award in the bankruptcy?

[39]

The
    appellant submits that the respondent could have opposed the appellants
    discharge from bankruptcy and thereby shared with other creditors in any
    payment made as a condition of that discharge. She points to evidence that
    there was potential further growth of equity in her home. She also argues that
    the value of her exempt assets would lead the bankruptcy court to order a
    payment as a condition of discharge.

[40]

Accordingly,
    the appellant argues that the motion judges finding that the respondent would
    likely receive nothing toward his costs award misapprehends and denigrates the
    bankruptcy regime and the rights of creditors under that regime.

[41]

I
    disagree. The motion judges finding was reasonable based on the appellants
    statement of affairs. Although it is open for any creditor to oppose the
    discharge of the bankrupt, there is no guarantee that any order will be made or
    that any funds will be available. Any potential increase in the value of the
    home is purely speculative.

[42]

In
    any event, the bankruptcy regime includes s. 69.4 and the ability of the court
    to lift the stay in favour of a particular creditor in prescribed
    circumstances. The use of that provision in these circumstances does not
    denigrate the regime. In this case, there are sound reasons, consistent with
    the scheme of the [BIA] to relieve against the automatic stay: see
Ma (Re)
(2001), 143 O.A.C. 52 (C.A.), at p. 54 (citations omitted).

[43]

Finally,
    regardless of whether the respondent received nothing in the bankruptcy or a
    small dividend towards the $200,000 costs debt, the findings of material
    prejudice and that it was equitable to make the declaration for a lift-stay
    would be amply justified.

Result

[44]

I
    would dismiss the appeal with costs fixed at $25,000 inclusive of disbursements
    and HST, to be included within the lift-stay order.

Released: K.F. October 4, 2017

K. Feldman
    J.A.

I agree.
    John Laskin J.A.

I agree.
    B.W. Miller J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Gibson (Re), 2017 ONCA 816

DATE: 20171024

DOCKET: C62917

Laskin, Feldman and Blair JJ.A.

IN THE MATTER OF: MATTHEW GIBSON

AN APPEAL UNDER PART XX.1 OF THE
CODE

Stephen Gehl, for the appellant

Elizabeth Teed, for the respondent

Heard: October 23, 2017

On appeal against the disposition of the Ontario Review
    Board dated, October 16, 2016.

APPEAL BOOK ENDORSEMENT

[1]

Before his last Board hearing, Mr. Gibson was subject to a conditional
    discharge. At his hearing in October 2016 he sought an absolute discharge. The
    Board, however, held that Mr. Gibson remained a significant threat, and
    therefore upheld the conditional discharge.

[2]

Mr. Gibsons sole ground of appeal is that the Boards disposition was
    unreasonable. We do not agree. The Board relied on Dr. Ferenczs opinion of Mr.
    Gibsons future risk, as it was entitled to do. Dr. Ferenczs opinion was that
    if Mr. Gibson were absolutely discharged, he would stop taking his medication
    and increase his use of marijuana and, as a result, would become paranoid and
    threatening. There was an evidentiary basis for Dr. Ferenczs opinion as, in
    the past, Mr. Gibsons marijuana use caused his decompensation.

[3]

The Boards disposition was reasonable.

[4]

The appeal is therefore dismissed.


COURT OF APPEAL FOR ONTARIO

CITATION: Girao v. Cunningham, 2017 ONCA 811

DATE: 20171023

DOCKET: M48076 (C63778)

MacPherson, Juriansz and Roberts JJ.A.

BETWEEN

Yolanda Girao

Plaintiff (Appellant)

(Moving Party)

and

Lynn Cunningham
and Victor Mesta

Defendants (
Respondent
)

(Responding Party)

Yolanda Girao, acting in person

Michael J.T. Best, for the responding party

Heard: October 19, 2017

REASONS FOR
    DECISION

[1]

The applicant seeks to set aside the decision of the chambers judge
    dismissing her motion for an order allowing her to perfect her appeal without
    filing a transcript of proceedings. Her appeal is from a 20-day jury trial and
    threshold determination of the judge. The chambers judge decided that the
    issues the applicant raises in her notice of appeal are largely fact-driven,
    and an appellate court would be in no position to determine the validity of her
    appeal without a full evidentiary record.

[2]

In her submissions the applicant addressed the merits of the appeal and
    stressed her financial inability to obtain the transcripts. While we are
    sympathetic with the applicants plight, we can see no error in the chambers
    judges conclusion the transcripts are necessary to enable the court to
    properly determine the appeal.

[3]

Before us, the applicant sought leave to file a digital audio recording
    of the trial instead of transcripts.

[4]

In due course, as the court embraces modern technology and electronic
    data, the time may come when the rules requiring the filing of paper
    transcripts are made more flexible. The preparation of transcripts adds
    significant cost to many appeals and often accounts for the major portion of
    the delay in scheduling them. However, practices and procedures must be
    developed to enable parties and the court to use audio recordings efficiently. It
    is best that the experimentation needed to develop the needed practices take
    place with the consent of all parties in an appeal actively managed by a judge
    of the court. In this case, the respondent strenuously asserts transcripts are
    essential for the proper hearing of the appeal. We cannot say the respondents
    position is unreasonable.

[5]

In the circumstances, we are of the view the use of an audio recording
    instead of transcripts in this appeal would not be practicable.

[6]

The motion to set aside the order of the chambers judge is dismissed. We
    see no utility in granting the applicants further request for additional time
    to obtain the transcripts. Costs in favour to the respondent are fixed in the
    amount of $2,000, inclusive of applicable taxes and disbursements.

J.C. MacPherson J.A.

R.G. Juriansz J.A.

L.B. Roberts J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Holterman v. Fish, 2017 ONCA 769

DATE: 20171005

DOCKET: C62338

Feldman, Cronk and Miller JJ.A.

BETWEEN

F. Marc Holterman and Thomas S. Tiffin

Plaintiffs/Moving
    Parties

(Appellants)

and

S. Andrew Fish and the Attorney General of Canada

Defendants/Respondents

(Respondents)

F. Marc Holterman and Thomas S. Tiffin, acting in person

Helen A. Daley and Simon Bieber, for the respondents

Heard: April 13, 2017

On appeal from the order of Justice Thomas R. Lederer of
    the Superior Court of Justice, dated May 26, 2016, with reasons reported at
    2016 ONSC 3275.

B.W. Miller J.A.:

OVERVIEW

[1]

The appellants, Marc Holterman and Thomas Tiffin, commenced an action
    for misfeasance in public office against the respondents, Andrew Fish and the
    Attorney General of Canada. The action was discontinued on consent. On
    discovering new information after the discontinuance, the appellants brought a
    motion to set the discontinuance aside. Their motion was dismissed. The
    appellants have appealed that decision.

[2]

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

BACKGROUND

[3]

The Canada Revenue Agency (CRA) suspected that the appellants had underreported
    their incomes for the years 1995-99. It commenced a fraud investigation. The
    respondent Andrew Fish was a CRA investigator. In 2002, he swore an Information
    to Obtain (ITO) in support of an application for search warrants, stating
    that he had reasonable grounds to believe that the appellants were in breach of
    the
Income Tax Act
, R.S.C. 1985, c. 1 (5
th
Supp) (ITA). Following
    execution of the search warrants, fraud and tax evasion charges were laid
    against the appellants.

[4]

A year later, the appellants filed Notices of Objection with the
    Minister of National Revenue (MNR), disputing the CRAs determination that certain
    monies they had received were payments rather than loans, and were therefore
    subject to income tax.

[5]

At the appellants criminal trial, the trial judge found that Fish had
    been intentionally misleading in swearing the ITO, and that the ITO contained
    numerous misstatements of facts:
R. v. Tiffin
(2005), 136 C.R.R.
    (2d) 1, at paras. 41-42. He quashed the search warrants and excluded the
    evidence obtained from their execution. Although this Court allowed the Crowns
    appeal, it did not disturb the trial judges findings that Fish had been
    intentionally misleading: (2008) 90 O.R. (3d) 575 (C.A.). The Attorney General
    subsequently stayed the charges against the appellants.

[6]

Thereafter, the appellants commenced the current civil action against
    the respondents for misfeasance in public office, alleging that Fish had
    intentionally sworn a false ITO with the intent to injure them and that the
    Attorney General was vicariously liable for Fishs actions. At trial before
    Lederer J. of the Superior Court of Justice, the appellants sought to have
    Fishs testimony from their criminal trial admitted into evidence. Lederer J.
    declined, as Fish had not been a party to that proceeding. Neither did Lederer
    J. accept that factual findings from the criminal trial  specifically, that
    Fish had made misstatements and been intentionally misleading  were binding as
res judicata
.

[7]

By the fourth day of the civil trial, the appellants had closed their
    case. After Holterman had begun his cross-examination of Fish, the trial judge
    alerted the appellants about a potentially insurmountable obstacle: the onus
    was on them to prove that the monies they had received were in fact loans and
    therefore not taxable, but they had not led any evidence to establish this.
    During a recess, the appellants conferred and decided it would be best to seek
    a discontinuance of the action. The respondents were agreeable and the action
    was discontinued on consent.

[8]

In January 2016, approximately one month after the discontinuance, the
    appellants received Notices of Reassessment from the MNR, in response to the
    Notices of Objection they had filed in 2003. All the money that the CRA had originally
    assessed as taxable income was now reassessed as non-taxable. The MNR provided
    no explanation for its reversal.

[9]

In the appellants view, the reassessments vindicated their original
    position, and provided some evidence that Fish had acted in bad faith in
    swearing the ITO in which he stated he had reason to believe the appellants had
    not disclosed taxable income. The appellants also viewed the timing of the reassessments
    as highly suspect: they came 13 years late, and immediately on the heels of the
    appellants discontinuance of their action against Fish and the Attorney
    General.

[10]

The
    appellants therefore brought a motion to set aside the consent discontinuance
    on the basis of exceptional circumstances; specifically, new facts that had arisen
    after the discontinuance. The appellants argued that if the reassessments had
    been available at trial, their availability would have likely changed the
    result. The appellants argument was that the reassessments proved that Fish
    must have been lying in the August 2002 ITO when he swore that he had reason to
    believe that the appellants had undisclosed taxable income.

[11]

The
    motion judge rejected this argument:

There is no reason to believe that the release of these
    re-assessments would have had any impact on whatever decision would have been
    made but for the discontinuance. The re-assessments do nothing to establish the
    requirements necessary to prove misfeasance in public office. There is no
    basis, in law, for assuming that this information should be assessed as if it
    were known at the time the Information to Obtain Search Warrants was sworn. The
Income Tax Act
provides that while a re-assessment is underway, the
    original assessment remains valid and binding notwithstanding any error,
    defect or omission in the assessment or in any proceeding under this Act
    relating thereto. Thus, there is no basis for going back.

The letters revealing the results of the re-assessment are not
    evidence of a sort that can support a setting aside of the discontinuance.
    These letters do not deal with evidence referring to events that led to the
    bringing of the action. They provide a conclusion reached long after that time.
    [Citations omitted.]

[12]

Essentially,
    the motion judge concluded that the reassessments could not help prove what
    Fish knew 12 years earlier, at a time before the search warrants were executed,
    before the CRA investigation was complete, and before the Notices of Objection setting
    out the appellants argument had been received.

[13]

The
    motion judge also found that the evidence could have been obtained by the
    appellants by the time of trial had they exercised proper diligence. The motion
    judge reasoned that the appellants could have exercised their statutory right
    of appeal under s. 169 of the
ITA
to apply for an order vacating or
    varying the original assessment. He also noted that the appellants had a strong
    incentive
not
to do so: while the reassessments were outstanding, they
    did not have to pay the outstanding tax assessments.

[14]

The
    motion judge therefore dismissed the motion.

ANALYSIS

[15]

A
    court can set aside a notice of discontinuance in exceptional circumstances. The
    appellants argue that the motion judge erred in refusing to exercise his
    discretion to do so.

[16]

In
    my view, the motion judge did not make any reversible error. For the reasons
    that follow, I conclude that the appellants fall far short of meeting the high
    bar for setting aside the consent discontinuance in this case.

The test
    for setting aside a discontinuance

[17]

In
    determining whether there were exceptional circumstances to set aside the
    discontinuance, the motion judge applied the
Sagaz
test, which guides
    the application of r. 59.06(2)(a) of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194 for setting aside or varying an order due to fraud or
    facts arising or discovered after the order has been made. In
671122
    Ontario Ltd. v. Sagaz Industries Canada Inc.
, 2001 SCC 59, [2001] 2 S.C.R.
    983, the moving party sought to reopen a trial on the basis of fresh evidence. The
    Supreme Court ruled against the moving party, and cautioned at para. 61 of its
    decision that the discretion to reopen a trial should be exercised sparingly
    and with the greatest care.

[18]

The
    test from
Sagaz
is often reduced to two questions: (1) whether the new
    evidence, if presented at trial, would probably have changed the result, and
    (2) whether the evidence could have been obtained before trial by the exercise
    of reasonable diligence. But more is involved. As this Court stated in
Mehedi
    v. 2057161 Ontario Inc.
, 2015 ONCA 670, at para. 20, the test includes
    considerations of finality, the apparent cogency of the evidence, delay,
    fairness and prejudice. Appellate courts must also consider the importance of deferring
    to trial judges, who are in the best position to decide whether, at the
    expense of finality, fairness dictates that the trial be reopened:
Sagaz
,
    at para. 60;
Mehedi
, at para. 21.

[19]

In
    my view, the factors set out in
Sagaz
provide an appropriate structure
    for determining whether to set aside a notice of discontinuance, with the
    caveat that the interest in finality may pose an even greater obstacle to
    setting aside a consent discontinuance than reopening a trial. An important
    aspect of a discontinuance on consent is that the parties, after considering
    their positions, made a joint decision to end the litigation. Although there
    may be exceptional circumstances where departure from such a decision will be
    justified, courts should not allow significant and considered measures to terminate
    litigation to be lightly undone:
Yancey v. Neis
, 1999 ABCA 272, 250
    A.R. 19, at para. 25;
Philipos v. Canada (Attorney General)
, 2016 FCA
    79, 483 N.R. 328, at paras. 17-20.

Application

[20]

The
    appellants argue that the motion judge erred in not finding exceptional
    circumstances that would justify setting aside the discontinuance. I do not
    agree.

[21]

The
    salience of the appellants fresh evidence is a matter of its ability to
    satisfy elements of their cause of action: misfeasance in public office. The
    appellants alleged that Fish committed that tort by engaging in unlawful
    conduct in the exercise of his public duties (swearing the ITO), which he knew
    to be unlawful, and which he knew was likely to injure the appellants. The MNRs
    conclusion that the appellants had no tax liability, the appellants argue, assists
    in establishing that Fishs conduct in swearing the ITO was unlawful and that
    he knew it to be so.

[22]

The
    essence of the appellants argument is this:

(1)     the
    MNR, on reassessment, determined that the appellants had no tax liability;

(2)     that
    determination was based on facts that existed in 2002;

(3)     the
    original Notice of Assessment was therefore in error, and the appellants never
    had a tax liability;

(4)     Fish
    could not have had reasonable grounds to believe the appellants had a tax
    liability if the appellants did not, in fact, have a tax liability; and
    therefore

(5)     by
    stating that he had reasonable grounds to believe that the appellants had
    undisclosed income when, as a matter of fact, they did not, Fish deliberately acted
    unlawfully.

[23]

The
    argument derails at step 4. The appellants treat a determination of tax
    liability as an empirically ascertainable event rather than a technical
    determination made by applying legal rules to established or apparent facts. That
    dubious premise leads the appellants to the proposition that if in 2016 the MNR
    concluded the appellants had no liability in 2002, then there could have been
    no good reason in 2002 for anyone to have suspected otherwise. The appellants
    are incorrect, however, to attribute to Fish, at an early stage of an
    investigation, all that was known and subsequently concluded by the MNR by
    2016. As the motion judge explained, the reassessments merely report a
    conclusion. They provide no evidence of what Fish knew in 2002, at a time
    before the search warrants were executed, and before receipt of the Notices of
    Objection setting out the appellants argument as to why the payments in
    question were not taxable. Neither do the reassessments provide any insight
    into how the MNR reached its conclusion, other than it was made after a review
    of the facts and documents submitted by the appellants.

[24]

The
    argument also fails at step 5. As the motion judge found, the fresh evidence sheds
    no light on the pivotal issue in the action: did Fish, in 2002, knowingly
    engage in unlawful conduct that he knew would likely injure the appellants? The
    bare fact of the reassessments does not significantly advance the argument that
    in 2002 Fish had no reason to believe that the appellants were in breach of the
ITA
. The reassessments are equally consistent with: 1) Fish, in 2002,
    having reasonable grounds; 2) Fish not having reasonable grounds but (incompetently)
    believing that he did; and 3) Fish lacking reasonable grounds, knowing that he
    did not have reasonable grounds, and acting in the knowledge that his actions were
    unlawful. The equivocal nature of the fresh evidence prevents it from meeting
    the high bar of probably changing the result of the tort action. I see no
    reason to interfere with the motion judges conclusion on this issue.

[25]

Ultimately,
    the fresh evidence  even when viewed in conjunction with the evidence adduced
    at trial  does not prove that Fish knowingly acted unlawfully and with an
    intent to injure the appellants. The reassessments do not provide the
    appellants with the evidentiary foundation to establish a case for misfeasance
    in public office. At most, they address one of the concerns raised by the trial
    judge: that the appellants could not prove that Fishs original assessment was,
    in fact, incorrect. Other obstacles remained.

[26]

Although
    that is sufficient to dispose of the appeal, I will address the further issue
    whether the evidence could have been found with reasonable diligence.

[27]

The
    appellants argue, with some justification, that it appears exceedingly unlikely
    that the MNR, which had an obligation under s. 165(3) of the
ITA
to
    make a determination with all due dispatch, would in fact take 13 years and
    coincidentally release its Notices of Reassessment immediately after the
    appellants discontinued their action. The respondents provided no evidence that
    would shed any light on this timing.

[28]

The
    motion judge held, however, that the appellants did not pursue the evidence
    with reasonable diligence, because they failed to exercise their statutory
    right to appeal the CRAs original assessments to the Tax Court of Canada. The
    motion judge found it significant that the appellants had a strong incentive
    not to take steps to force the issue: as long as the Notices of Objection
    remained outstanding, there was a stay of the appellants obligation to pay the
    assessed tax and penalties.

[29]

I
    do not agree with the motion judge on this point. It seems unduly harsh to put
    the onus on the appellants to go to the considerable expense and trouble of
    bringing an appeal before the Tax Court in order to force the MNR to comply
    with its statutory obligations, particularly when the appellants would have had
    no inkling, at that point, that the MNR would end up allowing their objection.

[30]

Although
    I would not fault the appellants on their diligence in pursuing the
    reassessments, they nevertheless cannot succeed on this appeal. As noted above,
    I agree with the motion judges decision that the fresh evidence is not of a
    nature that could have affected the result had the matter proceeded to judicial
    determination.

DISPOSITION

[31]

I
    would dismiss the appeal and award costs to the respondents in the amount of
    $5,000, inclusive of disbursements and HST.

Released: KF OCT 5 2017

B.W. Miller J.A.

I agree. K. Feldman
    J.A.

I agree. E.A. Cronk
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Jackson v. Ontario, 2017 ONCA 812

DATE: 20171023

DOCKET: C62994

Doherty, LaForme and Paciocco JJ.A.

BETWEEN

Stuart Jackson

Applicant (Appellant)

and

Her Majesty the Queen

Respondent

Sandra Barton, for the appellant

Milan Rupic, for the respondent

Heard and released orally: October 18, 2017

On appeal from the order of
    Justice Michael Brown of the Superior Court of Justice, dated October 28, 2016,
    dismissing the application for judicial review of a Crown decision to continue
    a stay of a private prosecution.

REASONS FOR DECISION

[1]

The appellant alleges that the Crowns decision to stay its private
    prosecution is an abuse of process. It alleges the decision was not
    evidence-based given that in the appellants view, the perjury is indisputable
    and that it harms the integrity of the administration of justice not to
    prosecute obvious instances of perjury. In essence, the applicant is asking
    this court to use the abuse of process standard to assess the reasonableness of
    the Crowns decision, at least to the extent of determining whether there is
    evidence capable of supporting the Crowns position.

[2]

This invitation is contrary to the authority. Abuse of process is not a
    tool for assessing the quality of prosecutorial decisions. It is a tool for
    addressing conduct of the Crown that is egregious and seriously undermines the
    fairness of the proceeding or the integrity of the administration of justice.
    Simply put, it is about misconduct, not poor performance. Even if we were to
    accept the appellants characterization of the facts stated at its highest,
    there is no foundation for finding an abuse of process. Justice Brown understood
    this. He applied the correct test and did so impeccably.

[3]

The appeal is dismissed.

Doherty J.A.

H.S. LaForme J.A.

David M. Paciocco J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Jay-Pee Drycleaners Inc. v. 2321324 Ontario Inc.,
    2017 ONCA 798

DATE: 20171018

DOCKET: C63330

Pepall, van Rensburg and Trotter JJ.A.

BETWEEN

Jay-Pee Drycleaners Inc. (Lee Byeongheon)

Plaintiff (Appellant)

and

2321324 Ontario Inc. a.k.a. Jasaab Holdings Inc.

Defendant (Respondent)

Byeongheon Lee, acting in person

Kyle Van Schie, for the respondent

Heard:  August 18, 2017

On appeal from the judgment of Justice Robert L. Maranger
    of the Superior Court of Justice, dated January 6, 2017, with reasons reported
    at 2017 ONSC 7874.

Reasons for Decision

[1]

Following oral argument, we allowed the appeal with reasons to follow.
    These are those reasons.

Background Facts

[2]

The appellant, Byeongheon Lee, had operated a dry cleaning business in
    premises that were subject to a 12-year commercial lease.  Section 6.07 of the
    lease required the appellant to comply with all applicable statutes and
    regulations affecting the premises.  When the lease expired on February 28,
    2012, it was converted into a month-to-month tenancy subject to the existing
    terms of the lease.

[3]

On April 5, 2012, the former landlord assigned the lease to the
    respondent landlord, 2321324 Ontario Inc.

[4]

On April 20, 2012, the respondents property manager wrote to the
    appellant advising that under s. 6.07 of the lease and
Dry Cleaners
, O.
    Reg. 323/94, a regulation under the
Environmental Protection Act
,
    R.S.O. 1990, c. E. 19, which he attached, the appellant had to successfully
    complete a course approved by the Director in the Management of Contaminants
    and Wastes in connection with the operation of dry cleaning equipment.  The
    letter further stated that the appellant had to complete the course within 90
    days and provide proof of completion to the office of the property manager.

[5]

Subsection 2(1) of the
Dry Cleaners

Regulation provides
    that [n]o person shall operate dry cleaning equipment at a commercial
    establishment unless a trained person works full-time at the establishment.

[6]

Subsection 1(1) of the Regulation defines trained person as a person
    who has:

(a) successfully completed a course approved by the
    Director;

(b) otherwise satisfied the Director that he or she
    is qualified to manage contaminants and wastes in connection with the operation
    of dry cleaning equipment; or

(c) satisfied the Director that he or she holds a
    valid authorizing certificate that is in good standing issued by an
    out-of-province regulatory authority.

[7]

The property manager wrote again on June 28, 2012, stating that in order
    to comply with the lease and the Regulation, the appellant was to successfully
    complete the course. The appellant was given until July 20, 2012 to comply and
    to provide proof of completion, failing which he would be seen to be in breach
    of the lease.

[8]

On August 29, 2012, the property manager wrote reminding the appellant
    of the previous two letters and stating that, as the July 20 date had lapsed
    and the respondents office had not received proof of completion, the appellant
    was in breach of the lease agreement.  The property manager went on to advise
    that as of September 30, 2012, the appellants lease was terminated.  Apart
    from the failure to complete the course and provide evidence of completion, the
    respondents property manager did not specify any other grounds for termination.

[9]

On September 10, 2012, the Manager of Program Development of the Program
    Planning and Implementation Branch of the Environmental Programs Division of
    the Ontario Ministry of the Environment wrote to the appellant confirming that
    the Ontario Dry Cleaners Training Course had not been available since March,
    2012 and that the Ministry anticipated that the course would be available again
    early in 2013.

[10]

On
    October 4, 2012, a bailiff posted a notice to terminate on the door of the premises
    and changed the locks.  The notice indicated that the appellant had five days
    to remove any assets from the premises and if he failed to do so, he would be
    charged storage costs.

[11]

The
    appellant sued for damages arising from the unlawful termination of the lease
    and the respondent counterclaimed for damages flowing from, among other things,
    the appellants failure to deliver vacant possession.  The respondent then
    moved for summary judgment dismissing the appellants action and seeking
    judgment on the counterclaim.

Summary Judgment Motion

[12]

Before
    the motion judge, the appellants evidence was that the Ministry of the
    Environment had checked his premises and that, as a result, he had told the
    respondents property manager that the course was unnecessary.  Ultimately
    however, he agreed to get the certificate as requested.  He stated that he
    tried numerous times to contact the government and ultimately was advised that
    the course was unavailable.  This was confirmed in the aforementioned September
    10, 2012 letter from the Manager of Program Development of the Ministry of the
    Environment.  The appellant advised the property manager that the course was unavailable.
    The reply affidavit of the respondent did not contradict the appellants
    evidence that he had told the property manager that the course was both unnecessary
    and unavailable.

[13]

The
    motion judge granted summary judgment to the respondent dismissing the
    appellants claim and allowing the respondents counterclaim in part by
    awarding $23,122.56 to the respondent.

[14]

The
    motion judge held that the respondent had lawfully terminated the tenancy.  This
    conclusion was based on the motion judges findings that the appellant had
    failed to provide evidence that he had taken a dry cleaning course or that he
    had a trained person working at all times on the premises.  The motion judge
    determined that the regulations governing dry cleaning businesses required this
    designation.

[15]

The
    appellant appeals from that judgment.  He argues that the motion judge erred in
    concluding that the tenancy was lawfully terminated and in finding that the
    tenancy was month-to-month.  In addition, he submits that the motion judges
    reasons were insufficient.

[16]

Before
    the motion judge and before this court, the appellant was self-represented.

Analysis

[17]

As
    the motion judge noted, the appellants claim could only succeed if the
    landlord unlawfully terminated his tenancy.  In our view, the motion judge
    erred in law in determining that there had been a lawful termination.

[18]

Subsection
    19(2) of the
Commercial Tenancies Act
,
    R.S.O. 1990, c. L.7
provides that a landlords right of re-entry
    for breach of any covenant or condition in the lease, other than in respect of
    the payment of rent, is not enforceable unless the landlord serves on the
    tenant a notice specifying the breach, and if the breach is capable of remedy,
    the tenant has failed within a reasonable time thereafter to remedy the breach.

[19]

In
    reaching his conclusion, the motion judge relied in part on the appellants failure
    to provide evidence that he had a trained person working at all times on the
    premises.  However, this was not a ground relied upon by the respondent in the
    notice of termination given to the appellant.  As noted in
780046 Ontario
    Inc. v. Columbus Medical Arts Building Inc.
(1994), 20 O.R. (3d) 457 (C.A.),
    courts considering a landlords termination of a lease have insisted upon
    strict compliance with the notice requirement in s. 19(2) of the Act.  The
    particular breach must be identified:
Mason Homes Ltd. v. Woodford
,
    2014 ONCA 816, 48 R.P.R. (5th) 1.

[20]

Furthermore,
    the motion judge failed to consider that the Regulation could be satisfied in
    one of three ways and failed to address the appellants uncontradicted evidence
    that the Ministry had checked the premises and that a course was unnecessary.
    In essence, the appellants contention was that he met the definition of a trained
    person within the meaning of the Regulation because he had satisfied the
    Director that he was qualified to manage contaminants and wastes in connection
    with the operation of dry cleaning equipment.

[21]

The
    motion judge also failed to consider the appellants evidence that, contrary to
    the position of the respondent, the course was unavailable and the breach was
    incapable of being remedied in the time provided.  As such, the appellant, to
    the knowledge of the respondent, could not comply in the time specified.  The
    respondent therefore did not give the appellant a reasonable amount of time to
    remedy the breach before exercising its right of re-entry, as required by s.
    19(2).

[22]

Lastly,
    in oral argument before this court, the respondent submitted that the tenancy
    could have been terminated under s. 28 of the
Commercial Tenancies Act
,
    which provides for one months notice of termination for a month-to-month
    tenancy.  The problem with this submission is that the respondent never gave
    any notice relying on this provision as the basis for termination.  The only
    ground advanced was the appellants failure to take the course and to provide
    the property manager with evidence of same.

[23]

The
    appellant raised other grounds in support of his appeal, namely that the motion
    judges reasons were inadequate and that he erred in treating the appellants
    tenancy as being month-to-month.  We would not give effect to either of these
    arguments.  The motion judges reasons explained how and why he reached the
    conclusions he did, and allowed for effective appellate review.  Additionally,
    the record fully supported the finding of a month-to-month tenancy.

Disposition

[24]

For
    these reasons, we have allowed the appeal.  The summary judgment, including the
    judgment on the counterclaim, is set aside.  We are granting judgment to the
    appellant for wrongful termination of his tenancy and are remitting the action to
    the Superior Court for an assessment of any damages suffered by him.  In
    addition, we are setting aside the costs award of $10,000 in favour of the
    respondent and are remitting the costs of the summary judgment motion to the
    judge hearing the assessment of damages.

[25]

The
    appellant is awarded costs of the appeal in the amount of $1,000 inclusive of
    disbursements and applicable tax.

S.E. Pepall J.A.

K. van Rensburg J.A.

G.T. Trotter J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: McAfee v. McAfee, 2017 ONCA 785

DATE: 20171012

DOCKET: C63777

Sharpe, Blair and Epstein JJ.A.

BETWEEN

Kerie Lynn McAfee

Applicant

(Respondent)

and

Robert McAfee

Respondent

(Appellant)

Robert McAfee, acting in person

Erin MacKenzie, for the respondent

Heard and released orally: October 6, 2017

On appeal from the order of Justice Paul W. Nicholson of
    the Superior Court of Justice, dated May 11, 2017.

REASONS FOR DECISION

[1]

The appellant purported to accept portions of the respondents offer to
    settle, most if not all of which favored him, relying on the severability
    clause that had been put in the offer. In particular, he accepted the term
    providing that he did not have to pay arrears of child support or spousal
    support from the date of separation to date.

[2]

He did not accept any other essential term of the offer in exchange to
    resolve the matter. Within hours of the purported acceptance, counsel for the
    respondent advised the appellant that the severability clause had been included
    in error and that his partial acceptance of the offer was rejected.

[3]

The court has the jurisdiction to correct an inadvertent error in an
    offer to settle:
Milos v. Zagas
, [1998] 38 O.R. (3d) 218.

[4]

We agree with the motion judge that the mistake made by the respondents
    counsel was obvious on the face of the offer and that the severability clause
    made no sense in the context of this offer. As the motion judge put it at para.
    8 of his reasons:

To allow the [appellant] to accept the clauses that financial
    benefit him and require the [respondent] to litigate all other clauses more
    than a year after the offer was submitted would be blatantly unfair.

[5]

The appellant has failed to demonstrate any error on the part of the
    motion judge that would justify this court in interfering with the exercise of
    his discretion to refuse to enforce the terms of the offer the appellant
    purported to accept.

[6]

Accordingly, the appeal is dismissed.

[7]

Costs to the respondent fixed at $6000, inclusive of taxes and
    disbursements.

Robert J.
    Sharpe J.A.

R.A. Blair J.A.

Gloria Epstein J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: MacNamara v. 2087850 Ontario Ltd., 2017 ONCA 813

DATE: 20171023

DOCKET: C63462

Simmons, Rouleau and Brown JJ.A.

BETWEEN

Tyler MacNamara

Plaintiff (Respondent)

and

2087850
    Ontario Ltd., o/a Strathcona Construction,

Robert Koblinsky
,
    and Richard Morris

Defendants (
Appellants
)

Michael Farace, for the appellants

Sarah Whitmore and Crawford Smith, for the respondent

Heard and released orally: October 16, 2017

On appeal from the judgment of Justice J.T. Akbarali of
    the Superior Court of Justice, dated February 10, 2017, with reasons reported
    at 2017 ONSC 499.

REASONS FOR DECISION

[1]

The appellants argue that the motion judge committed four errors in
    finding that:

1.

a contract existed between the parties;

2.

there had been fraudulent invoicing;

3.

overcharging had been concealed; and

4.

double-charging for HST had taken place.

The appellants argue that the motion judge committed a
    fifth error in admitting into evidence portions of Mr. Finnegans affidavit and
    cross-examination.

[2]

With respect to the first ground, the appellants submit that there was
    no contractual agreement between the parties as to the work to be undertaken
    and the basis for payment. In the appellants submission, the work carried out
    was on an
ad hoc
basis. In the absence of an agreement, Strathcona was
    free to charge what it wanted for the work.

[3]

We dismiss this ground of appeal. There was ample evidence supporting
    the motion judges conclusion, at para. 26, that the parties had an oral
    agreement and that [t]he contract between the parties required Strathcona to
    bill its actual costs plus a mark-up. The mark-up Strathcona charged was 25%.

[4]

This was a two-and-a-half-year project at a cost of over six million dollars
    with architect plans and a site supervisor. In our view, it was simply
    inconceivable that the work was all done
ad hoc
as suggested by the
    appellants. It is also inconceivable that there was no agreement as to what,
    how or in what amount the work could be billed.

[5]

As we have concluded that the motion judge correctly determined the
    existence and central terms of the contract, the second, third and fourth
    grounds of appeal fall away. To succeed on these grounds, the appellants had to
    succeed on the first ground. Each of the three impugned findings logically
    followed once the motion judge found that a contract was in place with the
    terms set out above.

[6]

Finally, we are not persuaded that it was an error to admit Mr. Finnegans
    evidence about the amount of excess charges included in Strathconas invoices.
    His testimony in this respect amounted to evidence gathering and arithmetic. It
    did not stray into the realm of expert evidence. The motion judge could conclude
    that Mr. Finnegans previous employment by the respondent did not
    interfere with his ability to give this evidence. During the oral argument
    before this court, the appellants conceded that they are not challenging Mr.
    Finnegans calculations.

[7]

In the result, the appeal is dismissed. Costs of the appeal are awarded to
    the respondent and fixed in the amount of $25,000, inclusive of disbursements
    and applicable taxes.

Janet
    Simmons J.A.

Paul
    Rouleau J.A.

David
    Brown J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Misir v. Misir, 2017 ONCA 810

DATE: 20171023

DOCKET: C62436 & C63026

Pepall, van Rensburg and Trotter JJ.A.

BETWEEN

Randy Misir

Plaintiff (Respondent in Appeal)

and

Geree Misir and Rajendra Narine (a.k.a. Hardial
    Singh)

Defendants (Appellants)

AND BETWEEN

Randy Misir

Applicant (Respondent in Appeal)

and

Geree Misir and Rajendra Narine (a.k.a Hardial
    Singh)

Respondents (Appellants)

David Reiter, Selwyn Hicks and Brian Chung, for the
    appellants

Abba Chima, for the respondent

Heard: August 18, 2017

On appeal from the order of Justice Edward M. Morgan of
    the Superior Court of Justice, dated July 19, 2016 and the order of Justice
    Peter J. Cavanagh of the Superior Court of Justice, dated November 23, 2016.

COSTS ENDORSEMENT

[1]

The appellants were successful on appeal. The
    result was that an order reinstating a default judgment and an order permitting
    the sale of certain property, were set aside. The appellants seek costs of the
    appeal and the proceedings in the court below.

[2]

The appellants were self-represented throughout
    the proceedings, until a few months before the appeal was argued, and they
    obtained leave to deliver a fresh as amended notice of appeal, and a
    supplementary factum and other materials were also filed.

[3]

As we noted in our reasons allowing the appeal,
    the record [was] voluminous and contained affidavits from the parties with
    contradictory accounts of misconduct and subterfuge on all sides in connection
    with the litigation. Ultimately it was unnecessary for this court to attempt
    to reconcile the conflicting accounts. The appeal was allowed because of the
    respondents failure to make full and fair disclosure of material facts (concerning
    the appellants alleged default and participation in the action) when he and
    his then counsel attended before the court without notice to the appellants,
    resulting in the reinstatement of a default judgment.

[4]

Although this ground was pursued in argument
    before us, the appellants focus, in their written materials, even after they
    retained counsel, was on challenging the factual findings in the court below
    (which would have required the demonstration of a palpable and overriding
    error).

[5]

Their claim for costs on a substantial or full
    indemnity scale has no basis, and the partial indemnity claim for costs (of
    almost $50,000) is excessive and disproportionate. The appellants own approach
    to the proceedings contributed in no small measure to unnecessary expense in
    the litigation and the appeal.

[6]

For these reasons, we award the appellants costs
    of $5,000 for the appeal, inclusive of disbursements and applicable taxes, and
    no costs in the Superior Court proceedings.

[7]

Finally, the sum of $19,430 that was paid into
    court by the appellant pursuant to the order of Huscroft J.A. dated January 9,
    2017, and filed as Account No. 544198, shall be released to the appellant
    forthwith.

S.E.
    Pepall J.A.

K.
    van Rensburg J.A.

G.T.
    Trotter J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Moses Estate v. Metzer, 2017 ONCA 767

DATE: 20171004

DOCKET: C61974

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

BETWEEN

Tsur Moses as Estate
    Trustee

For the Estate of Ora
    Moses, deceased

Plaintiff (Respondent)

and

Oded Metzer

Defendant (Appellant)

Simon Morris and John Adair, for the appellant

Igor Ellyn and Ryan Kniznik, for the respondent

Heard: September 15, 2017

On appeal from the judgment of Justice Wendy Matheson of
    the Superior Court of Justice at Toronto, Ontario, dated March 14, 2016, with
    reasons reported at 2016 ONSC 1765.

By the Court:

[1]

This appeal arises from a dispute between the appellant, Oded
    Metzer, and the respondent, the Estate of Ora Moses.  Ora Moses was the
    appellants former spouse.  The couple never married and separated before her
    death.  The main issue at trial was whether broadly-worded waivers of property
    rights in the couples Cohabitation Agreement applied to three development
    properties.

[2]

Under the Cohabitation Agreement, dated July 23, 2007, the
    rights of ownership were stated to govern property division, the parties waived
    any claims to beneficial ownership, they agreed to deal with their property as
    though they were unmarried, and they specifically waived rights to the property
    of the other.

[3]

At trial, the respondent claimed, amongst other relief, either a
    constructive or resulting trust interest in the property municipally known as
    21 Parkwood Avenue, Toronto Ontario, to which the appellant alone held title,
    or an order setting aside clauses 9, 10, 11 and 12 of the Cohabitation
    Agreement.

[4]

The trial judge found that though never formalized, a property
    development agreement (the PDA) existed between the appellant and Ora Moses.
    She further found that despite the express wording of the Cohabitation
    Agreement, there was convincing evidence that the PDA and not the Cohabitation
    Agreement governed 21 Parkwood and two other development properties in which
    the parties invested.    The evidence of the PDA included, amongst other
    things, the appellants own testimony of the understanding between him and Ora
    Moses, and two letters, both dated after the execution of the Cohabitation
    Agreement, which confirmed that the parties had a clear agreement about their
    respective interests in the development properties.  The letters also set out the
    specific nature of this agreement.  Namely, that after the settlement of all
    related debts, each party would be refunded his or her share of the initial
    investment in the property, with the remaining profit shared equally between
    them.

[5]

The trial judge found that the PDA was not an enforceable
    agreement to amend the Cohabitation Agreement because it was not in writing,
    signed by the parties, and witnessed, as required by s. 55(1) of the
Family
    Law Act
, R.S.O. 1990, c. F.3, as am. (
FLA
).
However, relying on s. 56(4)(b)
of the
FLA
, the trial judge set aside the Cohabitation Agreement as it applied
    to the three development properties
.  She granted judgment in favour of
    the respondent in the amount of $3,325,000 for amounts owing under the PDA as
    well as pre- and post-judgment interest and costs in the amount of $315,000.

[6]

At the hearing, the appellant narrowed his
    arguments to the following. The trial judge erred:

(1) in
    setting aside the Cohabitation Agreement, only as it applied to the development
    properties;

(2)
    in not setting aside the whole Cohabitation Agreement, including the waiver of
    support clause; and

(3)  in
    calculating the amount owing under the terms of the PDA.

[7]

We address each alleged error in turn.

[8]

The Cohabitation Agreement is a domestic
    contract as defined by the
FLA
.  Section 56(4)
    permits a court, on application, to set aside a domestic contract or a provision
    in it under certain circumstances.  In this case, the trial judge held that s. 56(4)(b)
     if a party did not understand the nature or consequences of the domestic
    contract  was engaged.

[9]

As the trial judge herself explained, in
LeVan
    v. LeVan
, 2008 ONCA 388, 90 OR (3d), this court approved
    of the two-part approach to applying s. 56(4) articulated in
Dochuk
    v. Dochuk
(1999), 44 RFL (4
th
) 97 and
Demchuk
    v. Demchuk
, [1986] O.J. No. 1500 before that.  First, the
    party seeking to set aside must demonstrate that one of the listed
    circumstances within s. 56(4) has been engaged.  This is a necessary but
    insufficient condition for invoking the power to set aside.  The court must
    then consider whether it is appropriate to exercise discretion in favour of
    setting aside the agreement or a provision within it.

[10]

This is precisely the approach the trial judge
    took in this case.  She first found that there was overwhelming evidence that
    neither party to the Cohabitation Agreement understood its consequences in
    regard to their property development venture (para. 139).  This conclusion was
    amply supported by the record and, in his oral submissions, counsel for the
    appellant ultimately conceded that there is no basis for this court to
    interfere with that factual finding.

[11]

The trial judge then went on to consider whether
    it was appropriate to exercise her discretion to set aside all or part of the
    Cohabitation Agreement. In
LeVan
, this court
    held, at para. 60, that fairness was an appropriate consideration in the
    exercise of the courts discretion in the second stage of the s. 56(4)(a)
    analysis.  Here, the trial judge set aside the Cohabitation Agreement as it
    applied to the development properties because in her view, it would be a
    failure of justice to broadly enforce the property clauses in the Cohabitation
    Agreement in the circumstances of this case (para. 148).

[12]

The trial judges conclusion that enforcing the
    property clauses in the Cohabitation Agreement would be a failure of justice
    was based on detailed factual findings which were in our view amply supported
    by the record.

[13]

Having so found, we do however agree with the appellant
    that the trial judge erred in setting aside the property waiver clause of the Cohabitation
    Agreement only as it related to the development properties.

[14]

Section 56(4) of the
FLA
permits a court to set aside a domestic contract or a provision in
    it. This contemplates setting aside a contract or provision in its entirety. It
    does not permit the court to, in effect, amend a domestic contract by providing
    that it does not apply to certain assets.  Moreover, the respondent did not
    seek that relief at trial. Rather, the respondent sought an order setting aside
    in their entirety clauses 9, 10, 11 and 12 of the Cohabitation Agreement.

[15]

Counsel for the Appellant argues that given the
    inadequate financial disclosure provided by both parties prior to signing the
    Cohabitation Agreement, the effect of setting aside clauses 9, 10, 11 and 12
    cannot be known such that setting aside the clauses is inappropriate.

[16]

We disagree.  Neither party argued inadequate
    disclosure as a basis for setting aside the Cohabitation Agreement.  And the
    only property put in issue by the pleadings was 21 Parkwood.  There is no
    evidence that setting aside clauses 9, 10, 11 and 12 would have any effect on
    any other property.

[17]

To give effect to the trial judges factual
    findings and conclusions, we would modify the application of s. 56(4) to set
    aside in their entirety clauses 9, 10, 11 and 12 of the Cohabitation Agreement.

[18]

The appellant argues in the alternative that the
    trial judge should have set aside the whole Cohabitation Agreement, including
    the waiver of spousal support, and that this court should do so.   He submits that
    to do otherwise is to upset the balance of the bargain.

[19]

We do not agree.

[20]

The appellant made this same argument before the
    trial judge. The trial judge declined to set aside the spousal support waiver saying,
    at para. 147, that she did not find a particular unfairness arising from the
    waiver of spousal support in the Cohabitation Agreement.  Her conclusion was
    based on the entirety of the record including the significant cash gifts that
    Ora Moses had given to the appellant. And contrary to the appellants
    submissions, the appellant receives a not-inconsiderable sum in the form of 50%
    of the profits earned on all three development properties.

[21]

The decision to leave the spousal support waiver
    intact was open to the trial judge.  Further, we agree with it.

[22]

Unlike with the reach of the property clauses,
    there was no finding that the parties did not understand or did not intend any
    aspect of the spousal support waiver.  And if the property clauses were never
    understood or intended to apply to the development properties, then there is no
    merit to the appellants argument that declining to set aside the support
    waiver disturbs the balance of the bargain.

[23]

It was clear that the trial judge sought to
    fashion a remedy directed at the parties property rights only. Informed by the
    trial judges extensive factual findings, we would give effect to her intent by
    setting aside clauses 9, 10, 11 and 12 of the Cohabitation Agreement.

[24]

Finally, we reject the appellants argument that
    the trial judges conclusion as to the amount that Ora Moses contributed to one
    of the development properties, and therefore the amount owing under the PDA,
    was the result of a palpable and overriding error. The trial judge relied on an
    updated expert report in finding the amount that Ora Moses contributed.  And,
    contrary to the appellants assertion, the experts opinion is supported by
    bank statements produced by the appellant.

[25]

For these reasons, we replace the trial judges decision
    to set aside the Cohabitation Agreement as inapplicable to the development
    properties with a decision to set aside clauses 9, 10, 11 and 12 of the
    Cohabitation Agreement. The appeal is otherwise dismissed.

[26]

Since the Cohabitation Agreement does not govern
    property ownership or division without clauses 9, 10, 11 and 12, the PDA, which
    on the facts of this case is also consistent with common law trust principles,
    determines the division of the proceeds of sale of 21 Parkwood Avenue. The
    trial judges order for the return to the respondent of Ora Moses investment
    in the 21 Parkwood Avenue and half of the profits from the sale of that
    property therefore stands.

[27]

The judgment amount of $3,145,682.88 plus
    accumulated interest and costs shall be paid out to the respondent.  The
    remainder of the amount previously paid into court shall be paid out to the
    appellant.

[28]

The respondent shall be entitled to costs in the
    sum of $25,000, inclusive of HST and disbursements.

Released: AH OCT 04 2017

Alexandra Hoy
    A.C.J.O.

Grant Huscroft J.A.

D.M. Paciocco J.A.