COURT OF APPEAL FOR ONTARIO

CITATION: Direct Energy Marketing Limited v. National Energy
    Corporation, 2014 ONCA 105

DATE: 20140205

DOCKET: C57490 & C57568

Doherty, Gillese and Lauwers JJ.A.

BETWEEN

C57490

Direct Energy Marketing Limited

Applicant (Respondent)

and

National Energy Corporation

Respondent (Appellant)

C57568

BETWEEN

Direct Energy Marketing
    Limited

Applicant (Respondent)

and

National Energy
    Corporation

Respondent (Appellant)

Martin Teplitsky and Bradley Teplitsky, for the respondent
    (appellant)

Paul Le Vay and Justin Safayeni, for the applicant
    (respondent)

Heard and released orally:  February 3, 2014

On appeal from the order of Justice J.S. ONeill of the
    Superior Court of Justice, dated July 30, 2013.

ENDORSEMENT

[1]

There are two appeals before this court.  Appeal C57568 was not argued
    and is dismissed as an abandoned appeal.

[2]

On the second appeal, the appellant raises essentially three issues.

[3]

The first addresses the findings under s. 7(a) and s. 22(1) of the
Trade-Marks
    Act
.  We are satisfied that the application judges findings in respect of
    those provisions were warranted on the record before him and fully supported his
    conclusion with respect to the breach of those provisions.

[4]

The second issue relates to the application judges finding that the
    respondent had proved damages flowing from the breach.  The appellant argues
    that the respondent had to prove such damages as an element of the breach and
    that the respondent produced no evidence to support the assertion that the
    misrepresentations in the appellants brochure caused damages.

[5]

We do not accept this submission.  The respondent filed affidavit
    evidence from Leonard Diplock, the Vice-President and General Manager of Direct
    Energys water heater and rental services.  He testified that as a direct
    result of the brochure, Direct Energy had suffered damages to its business
    and reputation.  As well, there was evidence showing that in the relevant time
    period, Direct Energy had experienced an unusually large number of
    cancellations of hot water heater contracts.

[6]

Mr. Diplocks evidence was not challenged in cross-examination.

[7]

The application judge appears to have accepted this evidence, saying
    that it was reasonable to infer that Direct Energy had suffered damages and
    that Direct Energy had demonstrated a
prima facie
 case of damages.
    In our view, it was open to the application judge to make this finding.  Having
    found that Direct Energy had proved damages, it was open to the motion judge to
    refer the quantification of those damages to a master.

[8]

The third issue relates to s. 52(1) of the
Competition Act
.
    The application judge did not specifically address the elements of liability under
    s. 52.  While liability under s. 52 to a large extent corresponds to liability
    under s. 7(a) of the
Trade-Marks Act
, s. 52(1) does require that the
    misrepresentation be made with knowledge of or recklessness as to its falsity,
    whereas s. 7 of the
Trade-Marks Act
does not contain that
    requirement.

[9]

It would have been better had the application judge specifically
    addressed the added mental component of s. 52(1).  We point out, however, that
    on the application, the appellant did not specifically challenge that element
    of s. 52.(1)

[10]

In
    any event, in the course of his findings, the motion judge said, at para.
    22(a):

The brochure is more directed at misleading consumers with respect
    to Direct Energy or discrediting this company than informing fairly and fully
    the consumer with the information he or she require to make an informed
    decision.

[11]

We
    are satisfied that this holding by the application judge and, in particular,
    his finding that the brochure was directed at misleading consumers implicitly
    amounts to a finding that the misrepresentations in the brochure were made
    knowingly or recklessly.  In our view, that finding flows from the other
    findings made by the application judge with respect to the contents of the
    brochure.

[12]

The
    appeal is dismissed.

[13]

Costs
    of the appeal are agreed upon.  Costs to the respondent in the amount of
    $15,000, inclusive of disbursements and relevant taxes.


COURT OF APPEAL FOR ONTARIO

CITATION: Fitzpatrick v. Orwin, 2014 ONCA
    124

DATE: 20140214

DOCKET: C55718

Gillese, Rouleau and Tulloch JJ.A.

BETWEEN

David Fitzpatrick

Plaintiff (Appellant)

and

Shelley Orwin,
Bill Squires
and
Anne Squires

Defendants (
Respondents
)

J. Morton, for the appellant

H. Rosenberg, for the respondents

Heard: February 13, 2014

On appeal from the judgment of Justice David G. Stinson of
    the Superior Court of Justice, dated June 18, 2012, with reasons reported at
    2012 ONSC 3492.

ENDORSEMENT

[1]

The appellant unsuccessfully sued the respondents for nuisance,
    malicious prosecution and conspiracy.  The respondents succeeded on their
    counterclaim for intentional infliction of mental distress, trespass and
    wrongful registration of a certificate of pending litigation.

[2]

On appeal, the appellant contends that the trial judge erred in drawing
    an inference in the absence of any direct or sufficient evidence on a material
    matter in issue.

FACTS

[3]

The parties were neighbours whose relationship deteriorated following
    the death of the appellants mother.

[4]

On November 11, 2007, the respondents contacted police regarding a
    verbal altercation between the appellant and Mr. OCarroll, an individual hired
    by the respondents to build a fence on the boundary line of the parties
    properties. An audio recording of the incident captured the appellant
    threatening Mr. OCarroll and using profane language.

[5]

The following morning, the respondent Bill Squires went outside to his
    car.  To his horror, he discovered a large dead coyote on the hood of his
    pickup truck, with blood dripping out of its mouth.

[6]

The respondents video surveillance showed that during the evening of
    November 11, a figure approached the camera. Shortly afterward, the picture
    went dark. A subsequent inspection revealed that a cable had been detached from
    the camera.

[7]

On November 13, the appellant was arrested and charged with criminal
    harassment. He denied placing the coyote carcass on the respondents car. The
    appellant remained in custody until released on bail on November 20, 2007. The
    Crown eventually concluded that there was no reasonable prospect of conviction
    and withdrew the charge.

[8]

The respondents decided to sell their home and move elsewhere, at which
    point they discovered the appellants action against them for damages for
    nuisance, malicious prosecution and conspiracy. The appellant then obtained a
    certificate of pending litigation against the respondents home.

[9]

At trial, the appellant abandoned his claims for nuisance and
    conspiracy, proceeding only with the claim for malicious prosecution.

THE TRIAL DECISION

[10]

The
    trial judge did not find the appellant to be credible. He described the
    appellants account of the encounter with Mr. OCarroll as patently
    untruthful. Other than in relation to matters corroborated by the documentary
    record, the trial judge did not rely on his testimony.

[11]

The
    trial judge had concerns with some aspects of the respondents testimony.
    However, in relation to the material events, he found their testimony firm and
    specific and corroborated by other evidence. He concluded that the
    respondents testimony about the core events was both credible and reliable.

[12]

Wherever
    there was a conflict between the appellants and the respondents evidence as
    to what transpired on November 11 and 12, 2007, the trial judge expressly
    rejected the appellants testimony and accepted that of the respondents, Mr.
    OCarroll and the investigating police officer.

[13]

The
    trial judge made the following pertinent findings of fact:

·

The appellant acted in an increasingly hostile and abusive
    fashion toward the respondents after his mothers death.  His hostility was
    manifested in insults, abusive language and failure to respect the property
    line between their driveways.

·

On repeated occasions, the appellant shouted at the respondents
    using profane and abusive language;

·

The respondents attempted to assert their property rights by
    having a surveyor stake the property line, but the appellant removed the stakes
    and knowingly trespassed on the respondents property;

·

With respect to the altercation on November 11, the appellant
    engaged in an unprovoked and verbally abusive confrontation with Mr. OCarroll,
    during which he became enraged, shouted profanities and made threats;

·

When the respondents listened to the tape of the incident, they
    felt genuinely threatened by the appellant and their decision to contact the
    police that day was made in good faith, based on genuine and well-founded
    concerns about their personal safety;

·

The respondents believed that there were reasonable and probable
    grounds that the appellant had committed criminal harassment, and there were in
    fact reasonable and probable grounds to reach this conclusion.

[14]

Of
    most significance to this appeal is the further finding by the trial judge that
    the appellant, or someone acting on his behalf, disabled the respondents video
    camera and placed the coyote carcass on the hood of their truck.  In reaching
    this inference, the trial judge referred to, among other things: the ongoing,
    persistent, and increasing level of hostility the appellant had displayed to
    the respondents; the persistent dispute over the property line; the encounter
    between Mr. OCarroll and the appellant on November 11; and the respondents
    evidence that on the morning of November 12, 2007, when Mr. Squires emerged
    from his home at his usual departure time, the appellant had stationed himself
    in his own driveway so that he could observe Mr. Squires reaction when he
    discovered the dead coyote.

[15]

The
    trial judge dismissed the appellants claim for malicious prosecution. The
    respondents had not initiated the criminal proceeding. In any event, there were
    reasonable and probable grounds to believe that the appellant had committed
    criminal harassment and there was no malice on the respondents part.

[16]

The
    trial judge held that the respondents had made out their claims for intentional
    infliction of mental distress, trespass and wrongful registration of the
    certificate of pending litigation. He awarded them damages of $201,533.29,
    including pre-judgment interest and $20,000 in punitive damages.

ANALYSIS

[17]

This
    appeal is based on the appellants assertion that it was not open to the trial
    judge to draw the inference that he was responsible for the coyote carcass
    incident in the absence of any direct or sufficient evidence on that matter.

[18]

We
    do not accept this submission.

[19]

We
    begin by noting that the trial judge gave a carefully reasoned judgment based on
    the legally correct principles.  His findings of fact are careful, thorough and
    detailed.  His findings on credibility are similarly meticulous.

[20]

Against
    that backdrop, we reiterate the well-known principle that a trial judges
    factual findings are not to be overturned absent palpable and overriding error.
    This standard applies to all factual findings, including the drawing of
    inferences from factual findings.

[21]

Here,
    the trial judges inferences flowed from a logical review of the evidence.  On
    the record, it was fully open to the trial judge to draw the inference that the
    appellant or someone acting on his behalf had placed the coyote carcass on the
    respondents car.

[22]

The
    inference drawn by the trial judge did not result from speculation.  Rather, it
    was based on his findings of fact and the factual circumstances of the case,
    including: the ongoing dispute between the parties; the incident that occurred
    on November 11, the day before the coyote carcass incident; the absence of any
    motive on the part of anyone else; and the direct evidence of the respondents
    that, on the morning of November 12, the appellant was waiting for Mr. Squires
    to leave his home and discover the coyote carcass.

[23]

In
    regard to the last finding, contrary to the appellants assertion, the trial
    judge did acknowledge that Mrs. Squires had not mentioned this when she gave
    her statement to the police.  However, as the trial judge explained at paras.
    78-81 of his reasons, they were shocked and upset about the events of November
    11-12, 2007, and any discrepancies arose from that.

[24]

We
    do not accept that the present case is similar to
1250264 Ontario Inc. v.
    Pet Valu Canada Inc.
, 2013 ONCA 279, 115 O.R. (3d) 653, the case relied on
    by the appellant.  In
Pet Valu
, this court found that the trial judge
    had drawn an inference for which there was no valid evidentiary basis.  On the
    contrary, in the present case, the inference that the trial judge drew was
    solidly grounded in the evidence.  In our view, based on the trial judges
    findings, that inference was virtually inescapable.

DISPOSITION

[25]

Accordingly,
    the appeal is dismissed with costs to the respondents fixed in the amount of
    $11,000, all inclusive.

E.E. Gillese
    J.A.

Paul Rouleau
    J.A.

M. Tulloch
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Garcha v. Mundi, 2014 ONCA 156

DATE: 20140227

DOCKET: C53024

Laskin, Epstein and Pardu JJ.A.

BETWEEN

Manjit Garcha

Plaintiff (Respondent)

and

Parminder Singh Mundi and Bindra Mundi

Defendants (Appellants)

Risa Sokoloff and Tamara Ramsy, for the appellants

Fernand A. Majid, for the respondent

Heard and released orally:  February 21, 2014

On appeal from the judgment of Justice Douglas K. Gray of
    the Superior Court of Justice, dated November 23, 2010.

ENDORSEMENT

[1]

Mr.
    and Mrs. Mundi appeal the judgment of Justice Gray awarding the plaintiff,
    Garcha, $231,963 for loans he advanced to the Mundis.  The Mundis main
    submission on appeal is that the trial judge erred in law by relying on
    evidence of settlement discussions, which took place before a mediator, a guru,
    in India.  They argue that those discussions were inadmissible because of
    settlement privilege.

[2]

At
    trial, the Mundis acknowledged that Garcha advanced the money in question.
    Their contention, however, was that the money advanced was a business
    investment for which they were not liable.  Garcha maintained that the Mundis
    were personally liable for the money he advanced.

[3]

In
    attempting to resolve that dispute, the trial judge was faced with a great deal
    of conflicting evidence and little documentary evidence to support either
    sides position.  The Mundis acknowledge this to be so and submit that in this
    context, the trial judges reliance on the discussions in India tipped the
    balance in the trial judges finding of liability.

[4]

The
    trial judge did not accept that Garcha could sue on the settlement of $300,000
    reached in India.  He did, however, rely on the discussions in India as one
    piece of evidence showing that the Mundis owed Garcha a considerable amount of
    money.  In our view, the trial judge did not err in using the evidence of the
    settlement discussions in that way.

[5]

Early
    in the trial, counsel for the Mundis did raise a preliminary objection about
    the admissibility of this evidence.  However, he accepted the trial judges
    observation that if the objection was to be pursued, then counsel for the
    Mundis should raise it later in the trial.  He never did so.  Instead, he led
    evidence from his clients about the settlement discussions in India and relied
    on that evidence in support of his position that conditions were attached to
    the repayment of the money, conditions that were not met.  Further, in his
    closing submissions at para. 78, counsel for the Mundis said:

Therefore, the only value that could be ascribed to the
    settlement meeting is the argument that the evidence represents an intention to
    repay loans and wages.

This was the very use the trial judge made of the
    evidence.

[6]

Therefore,
    in our view, even if settlement privilege might otherwise attach to those
    discussions in India, a point we need not decide, that privilege was waived.
    The trial judge was thus entitled to consider the evidence of those discussions
    for the limited purpose he explained at para. 300 of his reasons.

[7]

The
    Mundis also point to other evidence that they say is inconsistent with the
    trial judges finding of liability.  However, the trial judge considered this
    evidence and explained why it did not affect his conclusion that the Mundis
    were personally liable.  Instead, he relied on other evidence to support his
    conclusion.  We have not been persuaded that he committed any palpable and
    overriding error in doing so.

[8]

Accordingly,  the appeal is dismissed with costs fixed at $25,000 all inclusive.

John Laskin
    J.A.

Gloria
    Epstein J.A.

G. Pardu
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Greenaway v. Sovran, 2014 ONCA 110

DATE: 20140211

DOCKET: C57577

Rosenberg, Strathy and Benotto JJ.A.

BETWEEN

Michael C. Greenaway

Applicant (Appellant/

Respondent by way of cross-appeal)

and

Egidio Sovran

Respondent (Respondent
    in appeal/

Appellant by way of
    cross-appeal)

David G. Greenaway, for the appellant/respondent by way
    of cross-appeal

Crista L. Rea, for the respondent/appellant by way of
    cross-appeal

Heard: February 4, 2014

On appeal from the judgment of Justice Christopher Bondy
    of the Superior Court of Justice, dated July 30, 2013.

ENDORSEMENT

[1]

The appellant and the respondent had been partners in an accounting
    business for over 20 years.  They sought, by way of application, a
    determination of the enforceability of a restrictive covenant in their
    partnership agreement.

[2]

The application judge found the partnership had been dissolved as of January
    1, 2013 as a result of the partners conduct. He declared that the restrictive
    covenant was unenforceable as a penalty, and directed a trial of an issue to
    determine the damages payable by the appellant as a result of the breach of the
    portion of the covenant he found to be valid and severable.

[3]

In coming to these conclusions, the application judge found the
    appellant had withdrawn from the partnership, thereby triggering a clause in the
    agreement which called for the reduction of the withdrawing partners capital
    account by 500% of the average fees billed by the firm to clients who transfer
    to the withdrawing partner within 24 months from the withdrawal date.

[4]

The issues on this appeal turn on the interpretation of the partnership
    agreement and the legal consequences of dissolution. The standard of review is
    one of correctness:
The Plan Group v. Bell Canada
, 2009 ONCA 548, 96
    O.R. (3d) 81.

[5]

This was a two-person partnership. It had been in operation since 1989.
    The appellant operated out of Amherstburg and the respondent out of Windsor.
    The partnership agreement was prepared by the respondent based on a precedent
    he had obtained at a conference in the United States. It was poorly drafted,
    without legal advice.

[6]

Based on the firms billings, the application of the restrictive
    covenant would have resulted in a reduction of the appellants capital account
    by $1 million if the clients he had serviced transferred to him after
    dissolution of the firm.

[7]

The application judge found the appellants withdrawal from the
    partnership ended the relationship of the partners carrying on business in
    common with a view to profit and effectively dissolved the partnership on January
    1, 2013.

[8]

The dissolution was due to the appellants dissatisfaction with the
    respondents conduct. On September 26, 2012, he gave notice to the respondent
    that he would be retiring from the partnership at the end of the year. On
    October 10, 2012, he confirmed he was retiring from the firm effective December
    31, 2012, and gave notice of his intention to dissolve the partnership as of
    that date. He planned to commence the practice of public accounting through his
    professional corporation.

[9]

After January 1, 2013, the appellant continued to work out of the
    Amherstburg office and the respondent out of the Windsor office. Each continued
    to provide services to former clients of the partnership.

[10]

There
    were separate provisions of the partnership agreement dealing with retirement
    and withdrawal. The application judge found the appellant withdrew from the
    partnership and did not retire.

[11]

While
    it might have been open to the application judge to find that the appellants
    notice of October 10, 2012 was a notice of dissolution, pursuant to s. 26(1) of
    the
Partnerships Act
, R.S.O. 1990, c. P.5, he does not seem to have to
    have been referred to that provision. He rejected the submission that
    dissolution occurred pursuant to s. 32(c) of the
Partnerships Act
as a
    result of the appellants notice. He found, at para. 22, that provision is
    limited to partnerships entered into for an undefined time, whereas the
    agreement provided that the parties would remain partners until such time as
    the partnership may be terminated in accordance with the provisions herein.

[12]

The
    application judge also rejected the appellants submission that the dissolution
    of a partnership prevents a partner from seeking to enforce a restrictive
    covenant against a former partner. The appellant relied on
Brew v. Rozano
    Holdings Ltd.,
2006 BCCA 346, 55 B.C.L.R. (4th) 233, which had cited with
    approval the following statement in R.C. lAnson Banks,
Lindley & Banks
    on Partnership
, 19th ed. (London: Sweet & Maxwell, 2010), at para.
    10-233:

Subject to the precise terms of the agreement, a
general
dissolution will effectively prevent any partner from seeking to enforce a
    restriction against his copartners but will not necessarily affect the
    enforceability of a restriction imposed on a partner who retired
before
the date of the dissolution. [Emphasis in original; citations omitted.]
[1]

[13]

The
    application judge found this proposition was subject to the freedom of contract
    and that the terms of the agreement could survive dissolution and could be
    enforced by one partner against the other.

[14]

There
    was no disagreement that this was a general dissolution, as opposed to a
    technical dissolution, because the dissolution of the two-partner firm
    brought its business to an end.

[15]

Part
    VI of the agreement, entitled Withdrawals and Dissolution, dealt with the
    consequences of withdrawal. Most of the provisions appear to speak to the
    withdrawal of one or more partners in a multi-partner firm. A number of
    provisions contemplate that the firm would continue after the withdrawal of one
    of the partners. For example, the introductory paragraph states:

Considering that the interest of the firm should take
    precedence over the interest of an individual, and further considering the need
    for mutual understanding among many partners, the terms and conditions for
    withdrawal shall be standardized in consideration of both the firm and the
    individual but any areas of doubt or conflict shall be resolved in favour of
    the partnership.

[16]

The
    references to the firm and the partnership contemplate that the withdrawal
    of a single partner in a multi-partner firm would not dissolve the firm and the
    remaining partners would continue to carry on business as a partnership. No
    provisions in part VI address what is to happen in the case of a partnership of
    two.

[17]

The
    respondent argues that this case falls within the exception referred to in
Lindley
    & Banks
, because the appellant retired before the dissolution. That is
    not the case  the appellant gave notice of dissolution before the date of
    dissolution, but his withdrawal coincided with the date of dissolution.

[18]

On
    the dissolution of the two-member firm, the firm ceased to exist and the
    parties were free to pursue their own practices. There was no contractual term preventing
    them from doing so. Had they wished to include a specific term in their
    agreement, permitting one partner to prohibit the other from competing, they
    could have done so. In the absence of such a provision, it is reasonable to
    conclude that the partners should be limited to their common law and statutory
    rights on dissolution, and nothing more.

[19]

To
    interpret the agreement as the respondent suggests would make no commercial
    sense. It would force an unhappy partner to choose between remaining handcuffed
    to the other partner or quitting the partnership and, for practical purposes, leaving
    the entire business to the other partner.

[20]

For
    these reasons, the appeal is allowed. The judgment below is varied by deleting
    paragraphs 4, 5, 8 and 9. As a result, it is unnecessary to address the
    cross-appeal. The appellant is entitled to his costs in this court, fixed in
    the amount of $10,000, inclusive of all applicable taxes and disbursements. The
    costs below, if not agreed upon, are remitted to the application judge.

M.
    Rosenberg J.A.

G.R.
    Strathy J.A.

M.L.
    Benotto J.A.

[1]
The passage cited by the British Columbia Court of Appeal was from the 18th
    edition of
Lindley & Banks.


COURT OF APPEAL FOR ONTARIO

CITATION: Greta Inc. v. De
    Lange, 2014 ONCA 107

DATE: 20140207

DOCKET: C57302

Juriansz, Lauwers and Pardu JJ.A.

BETWEEN

Greta Inc.

Plaintiff (Respondent)

and

Robert
    De Lange
, Level Up SA and

Michael Frank Burgess

Defendants (Appellant)

Lawrence Pick, for the appellant Robert De Lange

Thomas Dunne Q.C. and Mark Crane, for the respondent

Heard and released orally: January 31, 2014

On appeal from the order of Justice
J.
    Patrick Moore
of the Superior Court of Justice, dated May 28, 2013.

ENDORSEMENT

[1]

The only ground of appeal advanced at the hearing of the appeal is that
    the motion judge erred by finding the Ontario courts have jurisdiction over the
    respondents action against the appellant for conspiracy to commit fraud. We
    are satisfied the motion judge did not err in reaching this conclusion.

[2]

The appellant is a resident of South Africa who received, outside Canada,
    monies of the respondent, an Ontario Company. The appellant submits he has no
    personal or business connections to Ontario, and that the action does not meet
    any of the presumptive connecting factors listed by the Supreme Court of Canada
    in
Club Resorts Limited v. Van Breda,
2012 SCC 17, [2012] 1 S.C.R. 572
    at para. 90.

[3]

The motion judge after considering the statement of claim, the
    particulars provided and the evidence filed was satisfied that the plaintiffs
    action involved tortious conduct, an essential part of which took place in
    Toronto. The respondents losses arose out of an agreement reached in Toronto
    in which the respondent gave up contractual protections in the original
    contract made in Florida. This would bring the action within the third and
    fourth presumptive connecting factors, that the tort was committed in Ontario,
    and that a contract connected with the dispute was made in the province.

[4]

The motion judge found that the respondent had produced some evidence
    connecting the appellant with one Burgess as business associates. Burgess
    pleaded guilty in the United Stated to defrauding the respondent. Burgess met
    with the respondent in Toronto to make the agreement noted above. He was
    involved in assembling the respondent's funds for the project and engineered
    the transfer of the respondent's funds. The funds were transferred to a company
    50 per cent owned by the appellant. Some of the funds were subsequently
    transferred into the appellant's personal account. The appellant received the
    money without the respondent's knowledge or consent.

[5]

The respondent alleges the transfer of the funds into the appellant's
    company and personal accounts were in breach of the funding contract and completed
    the conspiracy.

[6]

The appellant submits that it is unclear that the agreement reached in
    Toronto was executed in Toronto. That is of no moment as the motion judge found,
    in para. 31, that the renegotiation of the contract, which clearly took place
    in Toronto, was itself an act in furtherance of the conspiracy and sufficient
    to locate the conspiracy in Ontario. In any event, on our reading of para. 32
    of his reasons the motion judge was satisfied the agreement was made in
    Toronto.

[7]

We are not persuaded that the motion judge made any error in concluding the
    court had jurisdiction and the appeal is dismissed. Costs in favour of the
    respondent fixed in the amount of $15,000 all inclusive as agreed.

R.G.
    Juriansz J.A.

P.
    Lauwers J.A.

G.
    Pardu J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Hansen v. Williams, 2014 ONCA
    118

DATE: 20140212

DOCKET: C57098

Gillese, Rouleau and Tulloch JJ.A.

BETWEEN

Kristen Hansen, Randy
    Cheynowski and Callum Cheynowski, a minor by his litigation guardian Kristen
    Hansen

Plaintiffs (Respondents)

and

Robert D. Williams

Defendant (Appellant)

Alan Rachlin, for the appellants

Christopher Richard and Katharine Book, for the
    respondent

Heard: February 10, 2014

On appeal from the judgment of Justice Wendy L. MacPherson
    of the Superior Court of Justice, dated April 23, 2013.

ENDORSEMENT

[1]

The appellant appeals from the judgment entered following a jury verdict
    in a personal injury matter. The appellant contends that:

1.  the trial judge erred in her charge to the jury with respect to the
    assessment of non-pecuniary general damages, and

2. the jury award of $200,000 for non-pecuniary damages is inordinately
    high and warrants appellate intervention.

BACKGROUND

[2]

Kristen Hansen brought an action following a motor vehicle accident that
    occurred on July 19, 2007. She claimed damages for a thoracic outlet syndrome
    (neck, shoulder and arm injuries) and headaches. Hansen testified that these
    injuries affected her housework, recreational activities, social life, family
    interactions and employment as a court clerk. Liability was admitted.  The only
    issues to be decided at trial were the injuries sustained and the appropriate
    damages.

[3]

In his closing submissions, counsel for the plaintiffs (respondents in
    the appeal) addressed the question of non-pecuniary general damages as follows:

Now, counsel for the defendant has suggested a sum to you, he
    suggested somewhere between five and $10,000.00 [for non-pecuniary damages]. I
    suspect youll agree with me that that sum is [woefully] inadequate if we
    consider the full extent of [the respondents] loss. His assessment on that is
    based upon assumptions about her injuries that have been disproved by the
    evidence in this case.

If [counsel for the defendant is] assessing the damages for
    pain and suffering at five to $10,000.00, based on the assumption that she only
    had three to six months worth of symptoms arising from this accident then I
    think were fair to extrapolate that if we disagree with that assumption and we
    think that shes still experiencing those symptoms because of the car accident
    today. In counsel for the defendants view, six months is valued at five to
    $10,000.00, whats the rest of [the respondents] life worth?

[4]

The appellants trial counsel objected to this aspect of the
    respondents closing submission.  He expressed concern that the approach put to
    the jury by the respondents counsel  extrapolating a figure over Hansens
    entire lifetime  would result in an excessive damages award. He asked the
    trial judge to address this concern in her charge to the jury.

[5]

The trial judge accepted this submission and charged the jury as follows:

In closing submissions the defendants counsel suggested a
    range of damages of $5,000 to $10,000. In cases of this kind, the law does
    permit counsel to suggest possible ranges of damage. You are not bound to
    accept the range suggested, however, if you accept the submissions of the
    defendants counsel you may well conclude that the range of damages he
    suggested to be appropriate.

The plaintiffs counsel did not suggest a possible range of
    damages but he did suggest one approach would be to extrapolate that if
    $10,000.00 was appropriate for injuries lasting six months then you should look
    at that in determining the value over the plaintiffs lifetime.

This is not a mathematical calculation and that should not be
    the approach that you take in dealing with general damages. You and you alone
    determine the amount that is appropriate to reasonably compensate the plaintiff
    for her pain and suffering, and loss of amenities of life that have arisen as a
    result of the motor vehicle accident and in your deliberations you must do so,
    so as to arrive at an amount that is fair to both parties.

[6]

After the jury had been charged, the appellants trial counsel objected again,
    saying that the jury had not been given enough guidance as to the level of
    general damages that would be appropriate in the circumstances.

[7]

The trial judge did not recharge the jury.

[8]

The jury returned a verdict of $200,000 for non-pecuniary general
    damages; $5,600 for past housekeeping expenses; and $28,000 for future
    housekeeping expenses. The jury awarded no damages for income loss or loss of
    care, guidance and companionship.

ANALYSIS

1.

Did the trial judge err in her charge to the jury with respect to the
    assessment of damages?

[9]

If there was an error in the respondents closing submissions, it was
    corrected by the trial judges charge.  The trial judge expressly directed the
    jury to not undertake a mathematical calculation of the kind suggested by
    counsel for the respondents in his closing argument.

[10]

As
    this court has recognized in the past, the trial judge is uniquely placed to
    evaluate errors and determine whether they can be corrected: see
Fiddler v.
    Chiavetti
, 2010 ONCA 210, 317 D.L.R. (4th) 385, at para. 48.  In our view,
    the trial judge adequately corrected any error that may have been created by
    the respondents closing submission in respect of quantifying non-pecuniary
    general damages.

[11]

The
    trial judges charge did not need to be perfect. Absent an error that amounts
    to a substantial wrong or a miscarriage of justice, or circumstances where the
    interests of justice otherwise so require, a new trial will not be ordered:
Brochu
    v. Pond
(2002), 62 O.R. (3d) 722 (C.A.), at para. 68. Here, the trial
    judge provided the jury with adequate guidance on how to assess damages.  There
    is no requirement that the trial judge provide the jury with a range of
    damages. Section 118 of the
Courts of Justice Act
, R.S.O. 1990, c. C.43
 providing that
    the trial judge may give guidance to the jury on the amount of damages  is
    permissive, not mandatory.  In this regard, it is worthy of note that the trial
    judge told counsel that she would not be giving the jury a range for
    non-pecuniary damages and counsel made their closing submissions with that
    knowledge.

2.

Should the court intervene to reduce the non-pecuniary damage award of
    $200,000?

[12]

An
    appellate court is not to interfere with a jurys damage award unless the award
    is so plainly unreasonable and unjust as to satisfy the court that no jury
    reviewing the evidence as a whole and acting judicially could have reached it:
McLean
    v. McCannell
, [1937] S.C.R. 341, at p. 343;
Housen v. Nikolaisen
,
    2002 SCC 33, [2002] 2 S.C.R. 235, at para. 30.  This is a very high threshold.
    Appellate courts are not entitled to substitute their own awards in place of
    jury awards simply because they would have arrived at a different amount:
Hill
    v. Church of Scientology of Toronto
, [1995] 2 S.C.R. 1130, at para. 158.

[13]

While
    the award may be high, this court was given very little Ontario jurisprudence
    involving cases of thoracic outlet syndrome.  A significant number of British
    Columbia cases were provided, but those cases suggest that this is an evolving
    area rather than one in which a range has been established.  Moreover, the
    record before this court is thin on Ms. Hansens injuries and the consequences of
    those injuries to her.  This makes it particularly difficult to compare the
    case at bar with the cases that were relied on, when dealing with the
    appellants submission that the non-pecuniary damage award is so far outside
    the range as to warrant appellate intervention.

[14]

Accordingly,
    we are unable to accede to the appellants submission that the award is so
    plainly unreasonable and unjust that this court should intervene.

DISPOSITION

[15]

For
    these reasons, the appeal is dismissed with costs to the respondents fixed at
    $12,500, all inclusive.

E.E. Gillese J.A.

Paul Rouleau J.A.

M. Tulloch J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Holloway v. Holloway, 2014 ONCA 148

DATE: 20140225

DOCKET: C55804

Laskin, Epstein and Pardu JJ.A.

BETWEEN

Judith Elizabeth Holloway

Appellant

and

Trevor Wilson Holloway

Respondent

Judith Holloway, acting in person

David ONeill, for the respondent

Heard:  February 21, 2014

On appeal from the judgment of Justice D. Roger Timms of
    the Superior Court of Justice, dated July 3, 2012.

APPEAL BOOK ENDORSEMENT

[1]

The main issues at trial were the equalization of the parties net
    family property, and the accounting of debits and credits between the parties.
    The trial judge thoroughly examined these accounting issues.  He concluded that
    Mr. Holloway owed Mrs. Holloway a payment of $9,764.30.  We see no error in
    that award.  Moreover, we are satisfied that Mrs. Holloway received a fair
    trial.

[2]

Finally, we see no error in the trial judges costs award.

[3]

The appeal is dismissed with costs of $5,000 all in.


COURT OF APPEAL FOR ONTARIO

CITATION: Karges v. Karges, 2014 ONCA 163

DATE: 20140228

DOCKET: C56286

MacPherson, Cronk and Gillese JJ.A.

BETWEEN

Angela Annette Karges

Applicant (Respondent)

and

Kevin David Karges

Respondent (Appellant)

Tracy Miller, for the appellant

Michelle Dwyer, for the respondent

Heard and released orally: February 26, 2014

On appeal from the order of Justice
Silja S.
Seppi of the Superior Court of Justice,
    dated October 1, 2012.

ENDORSEMENT

[1]

The appellant Kevin Karges appeals from the Order of Seppi J. of the
    Superior Court of Justice dated October 1, 2012, in matrimonial proceedings
    relating to,
inter alia
, custody, child and spousal support, and equalization
    of net family property.

[2]

The appellant contends that, against the backdrop of a consent joint
    custody order, the trial judge erred by designating the respondents home as
    the childrens primary residence and by ordering unequal periods of access to
    the parents.

[3]

We do not accept this submission.  The trial judge carefully reviewed
    the evidence of the parties and the court appointed assessor, Dr. Butkowsky.
    Her decision on the primary residence issue is fully supported by the record,
    as is her allocation of access time to both parents.  In reaching this
    decision, we are mindful of this courts limited role in reviewing custody and
    access decisions: see
Van de Perre v. Edwards
, 2001 SCC 60, at paras.
    12-13.

[4]

The appellant asserts that the trial judge erred in her child and
    spousal support orders.

[5]

We disagree.  If anything, the trial judges imputation of the
    respondents income ($30,000, even though her actual income in the preceding
    year was $12,513) was generous to the appellant.  Moreover, the evidence at
    trial strongly supported the trial judges conclusions that the respondent had
    a demonstrated need and the appellant had an ability to pay.  As well, the
    trial judge stated that a review could be initiated commencing January, 2015.

[6]

Finally, we see no error in the trial judges calculation of
    equalization, especially in the context of a small number of items and the
    amounts in issue.

[7]

In short, the trial judge provided a comprehensive and sensible analysis
    and disposition in what appears to have been a high conflict matrimonial case.
    The appeal is dismissed.

[8]

In light of this disposition, it is not necessary to consider the
    appellants costs appeal.

[9]

The respondent is entitled to her costs of the appeal fixed at $20,000
    inclusive of disbursements and HST.  It is ordered that this amount be paid to
    the respondent from the money currently held in court as security for costs and
    the remainder paid to the appellants counsel in trust.

J.C. MacPherson J.A.

E.A. Cronk J.A.

E.E. Gillese
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION:  Kelly v. Canada (Attorney General), 2014 ONCA 92

DATE:  20140203

DOCKET: C56838

Hoy A.C.J.O., Cronk and Epstein JJ.A.

BETWEEN

Grand Chief Diane Kelly, on her Own Behalf and on
    Behalf of all Beneficiaries of Treaty 3, Chief Eric Fisher, Wabaseemoong
    Independent Nations; Chief Kemberly Sandy-Kasprick, Northwest Angle #33 First
    Nation; Chief Simon Fobister, Grassy Narrows First Nation; Chief Pamela
    Pitchenese, Eagle Lake First Nation; Chief Charles McPherson, Couchiching First
    Nation

Plaintiffs (Appellants)

and

The Attorney General of Canada

Defendant (Respondent)

Robert J.M. Janes, for the appellants Grand Chief Kelly
et
    al.

Owen Young and Paul Evraire, Q.C. for the respondent the
    Attorney General of Canada

Heard:  January 14-15, 2014

On appeal from the order of Justice Paul M. Perell of the
    Superior Court of Justice, dated February 26, 2013.

ENDORSEMENT

[1]

The appellants, Grand Chief Diane Kelly and other Treaty 3 Chiefs, seek
    to bring a representative action alleging, among other things, that the Crown has
    breached its obligation in Treaty 3 to maintain schools for instruction in
    the 28  reserves within the area covered by Treaty 3 (the Schools Provision).

[2]

The motion judge concluded that, as fashioned, the appellants action
    was non-justiciable. He granted the Crowns motion under Rule 21.01 of the
Rules
    of Civil Procedure
, struck out the appellants statement of claim and dismissed
    the action, with leave to the appellants to commence a justiciable action for
    the alleged breach of Treaty 3.

[3]

Decisions within each of the Treaty 3 reserve communities are made by a
    local governing body, typically a band council. The motion judge also concluded
    that if the appellants breach of treaty claim were justiciable, the appellants
    could bring a representative action on behalf of the beneficiaries of Treaty 3
    provided that (1) they are authorized to do so by band council resolutions of
    all 28 reserve bands, or (2) they join as party defendants those bands that do
    not authorize the representative action.

[4]

On appeal, the appellants argue that their action is justiciable and the
    motion judge erred in striking their statement of claim and dismissing the
    action. They also argue that the motion judge improperly required them to
    obtain authorization from the bands, or join them as party defendants, in order
    to bring their representative action.

Justiciable Action

[5]

At the outset of its oral argument, the Crown conceded that key parts of
    the appellants claim  including their claim for a declaration as to the
    meaning of the Schools Provision of Treaty 3  are justiciable and the appeal
    should therefore be allowed. It submits that this court should substitute an
    order striking the appellants statement of claim, but granting the appellants
    leave to amend their pleading to make it justiciable in its entirety. The Crown
    was unwilling to indicate precisely what changes to the pleading would be
    required for this purpose. More importantly, it was also unwilling to identify
    those parts of the existing claim that it says plead non-justiciable matters.

[6]

The appellants argue that given the Crowns concession, the appeal
    should be allowed and the motion judges order striking their statement of
    claim and dismissing their action should be set aside, without prejudice to the
    Crowns right to challenge particular parts of the pleading on the ground of alleged
    non-justiciability or to attack the pleading on any other basis. The appellants
    argue that the Crowns position before the motion judge was that their claim
    was non-justiciable, in its entirety. If justiciability of particular parts of their
    statement of claim are properly addressed by a Rule 21.01 motion (which they do
    not concede) how, they ask, can they revise a pleading without an understanding
    of the Crowns precise objections?

[7]

We agree with the appellants. The Crowns position has shifted
    significantly. Contrary to its position before the motion judge as renewed in
    its factum before this court, the Crown now acknowledges that those parts of
    the appellants pleading alleging the existence of an enforceable treaty right
    generally raise justiciable issues. The Crown asserts, however, that other parts
    of the appellants pleading, which concern the alleged breach or breaches of
    the asserted treaty right, as well as the remedies claimed, are
    non-justiciable.

[8]

This is a fundamentally different challenge from that faced by the
    appellants before the motion judge. Moreover, as we have said, on this appeal
    hearing the Crown declined to specifically identify those parts of the
    appellants pleading that allegedly run afoul of the requirement of
    justiciability. While the Crown, of course, is free to reconsider its position
    on the appellants proposed action, as currently framed, the altered basis for
    the Crowns opposition to the appellants action as now advanced by the Crown
    results in evident unfairness to the appellants. The appellants are entitled to
    know the case they have to meet on a pleadings challenge to their action.

[9]

Accordingly, the motion judges order striking the appellants
    statement of claim and dismissing the appellants action is set aside, without
    prejudice to the Crowns right to challenge particular parts of the statement
    of claim on such grounds, including justiciability, as the Crown may be
    advised.

[10]

For
    the assistance of the motion judge and the parties, we record in summary
    fashion those parts of the statement of claim that the Crown conceded during
    oral argument are justiciable.

[11]

First,
    the Crown concedes that the appellants claim at para. 1.a. of their pleading
    for the following foundational declaration is justiciable:

a.

a declaration that Treaty 3 (as
    defined below) imposes on Her Majesty the Queen in right of Canada (Canada) a
    duty to provide education services to the beneficiaries of Treaty 3 on their
    reserves (the Treaty 3 Education Right) that are commensurate with those made
    available to the Canadian population generally;

[12]

Second,
    the Crown also concedes that a claim that Treaty 3 has been breached is a
    justiciable issue.  However, as we understand the Crowns argument, it contests
    the appellants claim that the Crown breached the Schools Provision by failing
    to provide sufficient funding (see for example, paras. 32 and 38.a. of the
    appellants pleading), and their request for declaratory relief concerning the
    Crowns alleged failure to provide adequate financial resources. The disputed
    claim for declaratory relief is set out at para. 1.b. of the appellants
    pleading:

b.

a declaration that Canada has
    breached the Treaty 3 Education Right by failing to
provide adequate
    financial resources to maintain and
provide the level of educational
    services required pursuant to Treaty 3 ( emphasis added).

The Crown concedes that para. 1.b. of the pleading
    would raise justiciable issues so long as the reference to failing to provide
    adequate financial resources is deleted.

[13]

Third,
    the Crown takes no issue with the appellants request for a declaration that
    the Crown is obliged to remedy its alleged treaty breach.  However, we
    understand it to object to their assertion that the Crown should be required to
    do so by providing adequate resources to meet its treaty obligations. We do
    not understand the Crown to otherwise assert that the relief claimed is not
    justiciable.

[14]

As
    we have said, the Crown also appears to object to parts of what it says are the
    appellants descriptions of the alleged breaches of Treaty 3. For example, we
    understand it objects to the allegation, set out at para. 31 of the appellants
    pleading, that in the period from 1873 to at least the mid-1970s, Canada
    approached the provision of education in a manner that was directed at
    advancing an agenda of Christianization and assimilation without ensuring
    that a high quality education was delivered to the beneficiaries of Treaty 3.  As
    well, it objects to the allegation at para. 38 that:

Since the 1970s Canada has continued to breach the Treaty 3
    Education Right in that it has failed to: a. provide sufficient funding to
    deliver education services to the Treaty 3 beneficiaries in or near their
    reserves that is reflective of the special circumstances of the Anishinaabeb .

[15]

That
    said, we understand, by way of example, that the Crown would not object to a
    claim that the Crown provided education directed at advancing an agenda of
    Christianization if the foundational declaration sought  as to what the
    Treaty 3 Schools Provision requires  means that the Crown was obliged to
    provide a secular system of education.

[16]

In
    our view, if such objections are properly the subject of a Rule 21.01 motion
    based on justiciability, it would seem that they could be satisfied by
    amendments to the pleading. The action and the statement of claim are complex.
    The statement of claim would benefit from amendment.
[1]

Authorization to Bring a Representative
    Proceeding

[17]

In
    this case, the motion judge is also the case management judge. While the motion
    judges order provides that the appellants motion for authorization to bring a
    representative action and to appoint a representative plaintiff was dismissed,
    the motion judges reasons make clear that if the action were justiciable,
    authorization would be granted, subject to fulfillment of the conditions set
    out above.

[18]

While
    the Crown has not yet filed its statement of defence, it put the motion judge
    and the appellants on notice that, in its view, the 28 bands, and not the
    larger collective of the beneficiaries of Treaty 3 that the appellants seek
    to represent, are the parties entitled to assert any breach of the Schools Provision
    of Treaty 3.

[19]

On
    this appeal, on the basis that the motion judge effectively conditionally
    approved their motion for authorization of a representative action, the
    appellants were initially content to simply join the 28 bands as parties.
    However, in his reply submissions, counsel for the appellants reconsidered his
    position, on the basis that it was no longer clear to him that the Crown will
    assert that the 28 bands are the correct parties.

[20]

From
    the submissions made by Crown counsel, we are satisfied that whether the 28
    bands or the larger collective that the appellants seek to represent are the
    correct parties in this extremely complex litigation remains a live issue. The
    motion judges solution is a practical one. We see no basis to interfere with
    the conditions that he imposed.

[21]

Accordingly,
    the appellants are granted leave to continue this proceeding as a
    representative action on behalf of themselves and all persons who are
    beneficiaries of Treaty 3, and Grand Chief Warren White (who, as discussed
    below, replaces Grand Chief Diane Kelly)  is appointed as the representative
    plaintiff in the action, provided that (1) they are authorized to do so by band
    council resolutions of all 28 reserve bands, or (2) they join as party
    defendants those bands that do not authorize the representative action.

Amendment to Replace Co-Plaintiffs

[22]

Before
    the motion judge, the appellants also sought an amendment to their statement of
    claim to substitute Grand Chief Warren White for Grand Chief Diane Kelly, and
    replace two other co-plaintiffs. The Crown did not object; the amendment was
    not approved because the statement of claim was struck.  The requested
    amendment is granted.

Costs

[23]

The
    appellants are entitled to their costs of the appeal on a partial indemnity
    scale in the amount of $40,000, inclusive of disbursements and HST. The issue
    of costs of the motion below shall be returned to the motion judge for
    determination on such further submissions from the parties as they may be
    advised and the motion judge may direct.

Alexandra
    Hoy A.C.J.O.

E.A.
    Cronk J.A.

Gloria
    Epstein J.A.

[1]
The appellants helpfully clarified that they only focus on historical facts,
    such as those in para. 31 with which the Crown takes issue, with a view to
    establishing a causal link: they argue that the beneficiaries of Treaty 3s
    current disadvantaged situation is due to the Crowns past educational
    policies, and their Treaty education rights, properly interpreted, entitle them
    to special educational strategies and services to rectify their situation and
    create substantive educational equality. It was not clear to us that this
    concept is captured in the foundational declaration sought that the Crown has a
    duty to provide educational services commensurate with those made available to
    the Canadian public generally, as currently pleaded at para. 1.a. of the
    appellants statement of claim.  Counsel for the appellants also clarified that
    the appellants equitable damages claim does not relate to historical conduct.
    Damages are sought to compensate individual plaintiffs whose ability to earn
    income has allegedly been adversely affected because of a breach of the Schools
    Provision in the Treaty. The primary relief sought is a declaration that the
    Crown is currently breaching the Treaty, and a mandatory order, of some type, that
    the Crown take steps to remedy the breach in consultation with the appellants,
    under the supervision of the courts.


COURT OF APPEAL FOR ONTARIO

CITATION: Knox v. Niagara Falls Taxi Ltd. (502909
    Ontario Limited), 2014 ONCA 140

DATE: 20140224

DOCKET: C55623

Laskin, Goudge and Pardu JJ.A.

BETWEEN

Lewis
    Knox, Mary Cammie Bateman,

and Jannese Freeman

Plaintiffs (Respondents)

and

Niagara
    Falls Taxi Ltd., c.o.b. as 502909 Ontario Limited and

Stephen Rashanod, Ayhan Alakoc, Diane Falconer, Mehmet Erilli
    and

Michael
    Thewliss

Defendants (
Appellants
)

Elizabeth J. Forster and Christopher McClelland, for the
    appellant

Gary McClelland, for the respondent

Heard: February 19, 2014

On appeal from the judgment of Justice Barry H. Matheson
    of the Superior Court of Justice, dated May 15, 2012.

APPEAL BOOK ENDORSEMENT

[1]

The appeal is allowed. There
    was no basis for finding the directors liable for breach of contract. The
    corporate defendant was found liable for termination of the contracts of
    dependent contractor taxi drivers without notice and damages were awarded in
    favour of the Plaintiffs against the Defendant corporation. No appeal is
    brought from that conclusion. It was not pleaded nor argued that the individual
    defendants were parties to the contract.

[2]

There is no evidence of
    tortious conduct on the part of the individual defendants. The tort of
    intentional interference with economic relations requires an actionable wrong
    against a third party which is absent here.  In addition, a claim for inducing
    breach of contract cannot proceed against a corporate officer or director where
    a claim for breach of contract lies against the corporation.

[3]

The plaintiffs alleged that a
    tort was committed when the corporate defendant passed a board resolution which
    effected the termination of the Plaintiffs.  Three of the individual defendants
    were not directors at that time.

[4]

The award of costs against
    individual defendants in the judgement of May 15, 2012 is set aside. The Defendants
    Appellants are awarded costs of appeal fixed at $7500.00 inclusive of disbursements
    and H.S.T.


COURT OF APPEAL FOR ONTARIO

CITATION: Kozel v. The Personal Insurance
    Company, 2014 ONCA 130

DATE: 20140219

DOCKET: C57167

Rosenberg, MacPherson and LaForme JJ.A.

BETWEEN

Barbara Kozel

Respondent

and

The Personal Insurance Company

Appellant

Todd J. McCarthy, for the appellant

David A. Zuber, for the respondent

Heard: January 8, 2014

On appeal from the judgment of Justice T.M. Wood of the
    Superior Court of Justice, dated May 9, 2013, with reasons reported at 2013
    ONSC 2670.

H.S. LaForme J.A.:

I. INTRODUCTION

[1]

In February 2012, the respondent severely injured a motorcyclist in an
    automobile accident in St. Petersburg, Florida. At the time of the accident,
    the respondent was driving with an expired license. As a result, the respondent
    was in breach of statutory condition 4(1) of her insurance policy, and the
    appellant insurance company advised her of a possible denial of personal injury
    coverage. In the meantime, the injured motorcyclist commenced a tort action
    against the respondent in Florida. The respondent brought an application
    seeking a declaration that the appellant owes a duty to indemnify her and
    defend her in a third-party action under her contract of insurance.

[2]

The application judge ordered that the appellant has both a duty to
    defend and a duty to indemnify the respondent under her motor vehicle liability
    insurance policy with respect to the action brought against her. The order
    included the requirement that the appellant reimburse the respondent for all
    costs incurred by her in defending the Florida action. The insurance company
    appeals his order.

II. BACKGROUND

[3]

In Ontario, drivers licences must be renewed every five years by the
    holders birthday. Motor vehicle licence plate stickers must be renewed
    annually, also by the vehicle owners birthday. The respondents birthday is
    October 7, and both her licence plate stickers and drivers licence were to
    expire on October 7, 2011.

[4]

Sometime in August 2011, the respondent received an envelope in the mail
    from the Ontario Ministry of Transportation. She placed the envelope in her
    china cabinet and did not open it. On September 24, 2011, the respondent was
    taking possession of a new automobile she had purchased and brought the
    envelope with her to the car dealership. She believes she gave the envelope
    pertaining to licence plate sticker renewal to the dealership to enable it to
    licence the new car. She remembers opening the envelope but does not know
    whether it also contained documentation pertaining to the renewal of her
    drivers licence.

[5]

On February 16, 2012, the respondent was involved in an accident with
    Arthur Grimes, a motorcyclist, in St. Petersburg, Florida. She was charged in
    Florida with driving while having an expired licence. That charge was
    subsequently either dismissed or withdrawn. According to the application judge,
    this [a]pparently  occurred because of a provision in the Florida legislation
    granting a six month grace period before charges are laid for expired licences.
    Grimes subsequently brought a tort action in Florida against the respondent,
    seeking damages for his injuries.

[6]

At the time of the accident, the respondents drivers license had been
    expired for just over four months. On February 19, 2012, three days after the
    accident, the respondent returned to Canada and renewed her licence without any
    difficulty.

[7]

The application judge did not agree with the insurer that the respondent
    was not authorized to drive at the time of the accident. He found that, because
    the offence of driving without a valid license is one of strict rather than
    absolute liability, a due diligence defence was available to the respondent. After
    considering the evidence before him, the application judge held that the
    respondent exercised sufficient diligence and was therefore not in breach of
    statutory condition 4(1). As he summarized it at para. 28 of his reasons:
    While the [respondent]s actions do not amount to the perfect diligence of the
    ideal citizen they are a far cry from  complete passivity.

[8]

Apart from granting the respondents application on the basis of due
    diligence, the application judge went on to hold that the respondent was not
    entitled to relief from forfeiture under s. 129 of the
Insurance Act
,
    R.S.O. 1990, c. I.8, because that provision pertains to imperfect compliance
    with the terms of a policy relating to actions taken or not taken after a loss
    has occurred. Going further, he held that the respondent also could not obtain
    relief from forfeiture under s. 98 of the
Courts of Justice Act
,
R.S.O. 1990, c. C.43 (the
CJA
),
because clause 4(1) is a fundamental term or
    condition precedent of the policy.

[9]

The application judge also rejected the respondents arguments that she
    was not in breach of her policy because she was authorized to drive at the time
    of the accident under Florida law, and that the insurance company was estopped
    from denying personal injury coverage because of its payment of the
    respondents property damage claim.

III. THE ISSUES ON APPEAL

[10]

There
    are two issues on appeal. The first issue is whether or not the respondent, at
    the time of the accident, was in breach of her insurance policy. That is, was
    the respondent entitled to the defence of due diligence? The policy condition
    engaged is statutory condition 4(1) of
Statutory Conditions  Automobile
    Insurance
, O. Reg. 777/93, enacted pursuant to the
Insurance Act
. This
    statutory condition provides that:

The insured shall not drive or operate or permit any other
    person to drive or operate the automobile unless the insured or other person is
    authorized by law to drive or operate it.

[11]

The
    second issue is whether the respondent is entitled to relief from forfeiture under
    s. 98 of the
CJA
.

[12]

Appellants
    counsel asserted in oral argument that the respondents submissions on the s.
    98 issue are an effective cross-appeal. I reject this characterization of the
    respondents submissions. A respondent must file a cross-appeal if he or she
    seeks to set aside or vary the order appealed from, or if he or she will seek,
    if the appeal is allowed, other relief or a different disposition than the
    order appealed from:
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194,
    r. 61.07(1). The respondent here sought none of the above, and her
    submissions on s. 98 fall within the proper scope of this appeal.

[13]

As
    I will explain, I would dismiss the appeal. My reasons for upholding the
    application judges order, however, differ from those he gave. While I disagree
    that this is a case in which the defence of due diligence is available to the
    respondent, I conclude that she is entitled to relief from forfeiture.

IV. ANALYSIS

(1)

Due diligence

[14]

The
    appellant takes the position that the application judge erred in making
    findings of fact based on evidence that was irrelevant and inferences that were
    incorrect and improper. It says that while deference is owed to a judges
    findings of fact, this court should interfere in this case because the
    assessment of the facts upon which the legal conclusions are founded
    constituted an error of law.

[15]

For
    purposes of this appeal, the appellant accepts that the application judge was
    correct in finding that the offence of driving without a valid license is one
    of strict liability for which a due diligence defence is available.

[16]

The
    Supreme Court of Canada discussed the circumstances in which a due diligence
    defence is available in
Lévis (City) v. Tétrault
, 2006 SCC 12, [2006]
    1 S.C.R. 420, at paras. 15 and 30:

The defence will be available if the accused reasonably believed
    in a mistaken set of facts which, if true, would render the act or omission
    innocent, or if he took all reasonable steps to avoid the particular event.

The concept of diligence is based on the acceptance of a
    citizen's civic duty to take action to find out what his or her obligations
    are. Passive ignorance is not a valid defence.

[17]

The
    application judge in this case relied on this courts reasoning in
Tut v.
    RBC General Insurance Co.
,
2011 ONCA 644, 107 O.R. (3d) 481
,
when deciding in favour of the respondent. At
    para. 27 of his reasons, he found that:

The events on [September 24, 2011] caused [the respondent] to
    make a mistake. She was rushed and focused on providing the dealership with the
    ministry documentation it would need to get current stickers for her new car.
    Time was running short and she admits that she may well not have noticed
    additional documentation for her drivers licence renewal.

[18]

The
    application judge then found, at para. 28, that:

Because the [respondent] was focused on renewing her plate
    stickers she wrongly assumed that this was all that the envelope contained. She
    took active steps to ensure that the duty she thought the envelope signalled
    was performed. She provided a believable explanation for her lack of perfect
    diligence on September 24
th
when she picked up her car.

[19]

The
    application judge concluded that the respondent had not demonstrated complete
    passivity in the handling of her affairs and did not deliberately place herself
    in harm's way. He therefore found that the respondent was not in breach of statutory
    condition 4(1).

[20]

I
    disagree with the application judge. In my view, he misapprehended the evidence,
    and his decision is not entitled to deference on review by this court.

[21]

The availability of the due diligence defence, as the Supreme Court
    explained in
Lévis, supra
, depends on the circumstances surrounding
    the relevant offence. That is, an individual can make out this defence if he or
    she can show a reasonable misapprehension of facts or reasonable care
with
    respect to the offence with which he or she is charged
. The respondent
    here, therefore, must show that she acted reasonably with regard to the expiry
    of her drivers license.

[22]

The
    respondent, at the time of the accident, was 77 years of age. She had held a
    drivers licence since she was 17 or 18 and had always renewed it on time. Yet,
    on this occasion there is no evidence that she did anything to inquire about or
    even consider her drivers license renewal. The absence of reasonable care by
    the respondent distinguishes this case from
Tut
, in which the court
    considered  and found  due diligence as it related to the offence charged.

[23]

On
    the relevant facts as found by the application judge, the respondent did no
    more than state that she received an envelope from the Ministry of
    Transportation, which she merely placed in a china cabinet and did not open.
    Weeks later she opened the envelope while purchasing a new automobile, but only
    remembers seeing information pertaining to the plate stickers, which she gave
    to the dealer. She produced her drivers licence for the dealership to copy,
    and later at a lawyers office for identification purposes, but she did not
    examine it on either occasion.

[24]

The
    only additional potentially relevant facts to the due diligence defence, which
    were mentioned neither by the application judge nor by the parties in their
    factums, pertain to health problems experienced by the respondents sons around
    the time her license expired.

[25]

The
    respondent describes that, in the fall of 2011, she was dealing with the poor
    health of her two sons. One of her sons had liver and back problems, and the
    other was in [and] out of hospital for appointments and assessments because of
    issues relating to bleeding bowels. It was therefore open to the respondent to
    argue that, in light of these circumstances, the care she took to avoid driving
    with an expired license was reasonable.

[26]

The
    difficulty with this evidence is that it lacks specificity. That is, the precise
    period of time during which these events took place and the actual impact they
    had on her is not addressed. It is also telling to me that no mention was made of
    the evidence in the decision below or in the parties factums. I doubt that the
    respondents preoccupation with her sons health issues rose to a level where
    it would excuse her failure to take steps to renew her drivers license, and am
    therefore not persuaded that this evidence is strong enough to mount a due
    diligence defence.

[27]

At
    best, the respondents evidence in this case demonstrates that she took all
    reasonable care in connection with her vehicle plate renewal
.
It does not
    show that she acted with reasonable care or operated under a reasonable
    misapprehension of the relevant facts in connection with her drivers licence.
    I would accept the appellants position on this ground of appeal.

(2)

Relief from forfeiture

[28]

Relief
    from forfeiture simply refers to the power of a court to protect a person
    against the loss of an interest or a right because of a failure to perform a
    covenant or condition in an agreement or contract.

[29]

The
    remedy of relief against forfeiture is equitable in nature and purely
    discretionary:
Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance
    Co
.
, [1994] 2 S.C.R. 490, at p. 504. Its origin and purpose was
    briefly reviewed by Doherty J.A. in
Ontario (Attorney General) v. 8477
    Darlington Crescent
, 2011 ONCA 363, 333 D.L.R. (4th) 326, at paras. 86-87:

Courts of equity have always had the power to relieve against
    the forfeiture of property consequent upon a breach of contract. That power is
    now expressed in various statutes dealing with specific kinds of contracts
    (e.g., contracts of insurance, leases) and has been given more general
    expression in s. 98 of the [
CJA
].  The power is predicated on the
    existence of circumstances in which enforcing a contractual right of
    forfeiture, although consistent with the terms of the contract, visits an
    inequitable consequence on the party that breached the contract. Relief from
    forfeiture is particularly appropriate where the interests of the party seeking
    enforcement by forfeiture can be fully vindicated without resort to forfeiture.
    Relief from forfeiture is granted sparingly and the party seeking the relief
    bears the onus of making the case for it. [Citations omitted.]

[30]

In
    insurance cases, the purpose of the remedy is to prevent hardship to beneficiaries
    where there has been a failure to comply with a condition for receipt of
    insurance proceeds and where leniency in respect of strict compliance with the
    condition will not result in prejudice to the insurer:
Falk Bros.
    Industries Ltd. v. Elance Steel Fabricating Co
., [1989] 2 S.C.R. 778, at
    p. 783.

[31]

In
    exercising its discretion to grant relief from forfeiture, a court must
    consider three factors: (i) the conduct of the applicant, (ii) the gravity of
    the breach, and (iii) the disparity between the value of the property forfeited
    and the damage caused by the breach:
Saskatchewan River Bungalows
, at
    p. 504.

[32]

This
    appeal considers statutory provisions found in s. 98 of the
CJA
and s.
    129 of the
Insurance Act
. Under s. 98, A court may grant relief
    against penalties and forfeitures, on such terms as to compensation or
    otherwise as are considered just. In contrast to this broad language, s. 129
    provides:

Where there has been
imperfect compliance with a statutory
    condition

as to the proof of loss
to be given by the insured or
    other matter or thing required to be done or omitted by the insured with
    respect to the loss and a consequent forfeiture or avoidance of the insurance
    in whole or in part and the court considers it inequitable that the insurance
    should be forfeited or avoided on that ground, the court may relieve against
    the forfeiture or avoidance on such terms as it considers just. [Emphasis added.]

[33]

In
Stuart v. Hutchins
(1998), 40 O.R. (3d) 321 (C.A.),
    this court addressed the scope of both of these statutory provisions. Citing
Falk
    Bros
.
, Moldaver J.A. (as he then was) explained, at pp. 327-28,
    that where an insureds breach constitutes imperfect compliance with a policy
    term, relief under s. 129 remains available. However, a breach that consists of
    non-compliance with a condition precedent to coverage forecloses the
    availability of relief against forfeiture under s. 129. Without deciding
    whether s. 98 could be invoked in the circumstances of the case, Moldaver J.A. rejected,
    at p. 333, the possibility of its application on the same grounds: namely, that
    even if s. 98 was available, its reach could not extend beyond that of s. 129
    to relieve against forfeiture in the case of a breach amounting to
    non-compliance with a condition precedent to coverage.

[34]

Courts have interpreted
Stuart
as having decided that s.
    98 has no application to instances of non-compliance with a condition precedent
.
[1]
Indeed, in this case, the application judge based his holding that s. 98 relief
    was not available solely on the fact that the respondents breach here is one
    of non-compliance with a condition precedent to coverage.
At para. 43 of his reasons, he noted that
Stuart

is authority for the
    principle that relief cannot be granted under the powers conferred by
s. 98
for a breach of a
fundamental term or condition
    precedent
of a contract.

[35]

The
    respondent properly concedes that s. 129 of the
Insurance Act

cannot
    provide relief here. That provision does not give judges a broad discretion to
    "grant relief from forfeiture" generally where the conditions of an
    insurance policy are breached. Rather, the court's power under
s. 129
is a narrow one
    pertaining only to those policy conditions  statutory or contractual  that
    relate to proof of loss. It does not apply generally to all policy conditions:
Williams
    v. York Fire & Casualty Insurance Co
.
, 2007 ONCA 479, at paras.
    33 and 35.

[36]

The
    respondent argues that this might be the appropriate case in which to grant
    relief under s. 98 of the
CJA
. She argues that holding for the
    insurance company would expose her personal assets and allow the company to
    enjoy a large and unwarranted windfall.

[37]

The
    brief submissions made by the appellant on the merits of the application of s.
    98 were specific: authorization to drive is a condition precedent to coverage.
    That is, as the law is currently drafted, statutory condition 4(1) is a
    fundamental provision of an automobile insurance contract. And, until the
    legislature says otherwise, this court cannot grant relief against forfeiture.
    There was no explanation as to why statutory condition 4(1) is fundamental,
    nor was this court directed to any authorities in support of this argument.

[38]

In
    light of this and the current state of the law described above in
Stuart

and
Williams
, I propose to examine whether the breach here  the
    failure to hold a valid drivers license, in violation of statutory condition
    4(1)  constitutes imperfect compliance with a policy term, rather than
    non-compliance with a condition precedent, and whether the respondent may be
    entitled to relief under s. 98.

[39]

There
    are two threshold questions to resolve before undertaking the three-part
    analysis in
Saskatchewan River Bungalows
to determine whether the
    court should exercise its discretion to grant relief from forfeiture. First,
    does the breach in this case constitute imperfect compliance with a policy term
    or non-compliance with a condition precedent to coverage? Second, is relief
    available under s. 98 of the
CJA
despite the existence of a specific
    relief against forfeiture provision in the
Insurance Act
?

(a)

Does the breach here constitute imperfect compliance with a
    policy term or non-compliance with a condition precedent to coverage?

[40]

The
    difference between imperfect compliance and non-compliance is crucial for the
    purposes of the relief against forfeiture analysis. If the respondents breach
    of statutory condition is 4(1) is imperfect compliance with a policy term,
    relief against forfeiture under s. 98 of the
CJA
is available. If,
    however, the breach amounts to non-compliance with a condition precedent, the
    court cannot award relief under s. 98:
Stuart
, at p. 333.

[41]

As
    McLachlin J. (as she then was) explained in
Falk Bros
.
, at p.
    784, the distinction between imperfect compliance and non-compliance is akin
    to the distinction between breach of a term of the contract and breach of a
    condition precedent. However, in the context of relief from forfeiture, the
    imperfect compliance/non-compliance analysis does not engage with the contracts
    jurisprudence on conditions precedent. Rather, the focus is on whether the
    breach of the term is serious or substantial. Where the term is incidental, its
    breach is deemed to be imperfect compliance; where the provision is fundamental
    or integral, its breach is cast as non-compliance with a condition precedent.

[42]

In
Falk Bros.
, the issue was whether the claimants failure to give
    notice of his claim to the insurer within the prescribed period precluded an
    award of relief against forfeiture under s. 109 of the
Saskatchewan
    Insurance Act
, R.S.S. 1978, c. S-26
.
    Reviewing the case law, McLachlin J. observed, at pp. 784-85, that the failure
    to give timely notice of a claim has been viewed as imperfect compliance, while
    failure to institute an action within the prescribed time period has been
    viewed as non-compliance, or breach of a condition precedent.

[43]

McLachlin
    J. concluded that a failure to give notice of a claim within the relevant
    period is imperfect compliance, firstly because it is a less serious breach
    than failing to bring an action in a timely manner, and secondly because it
    pertains to proof of loss. In my view, this second reason has no application to
    our case, because unlike s. 109 of the
Saskatchewan Insurance Act
, s.
    98 of the
CJA

does not limit relief to cases of imperfect compliance
    with a condition as to the proof of loss.

[44]

Likewise,
    in
Stuart
, the import of the relevant contract provision  and
    accordingly, the scale of the breach  was an important factor in determining
    whether the breach constituted imperfect compliance or non-compliance with a
    condition precedent. At p. 332, Moldaver J.A. held that the failure of the
    broker to report the claim within the policy period amounted to non-compliance
    with a condition precedent to coverage, rather than imperfect compliance with a
    term of the policy. He stressed the conceptual difference between occurrence
    policies and claims-made and reported policies. In these latter policies, the
    notice provision is integral.

[45]

Finally,
    this court addressed the imperfect compliance/non-compliance distinction in
Canadian
    Newspapers Co. v. Kansa General Insurance Co
.
(1996),30 O.R. (3d)
    257
.
In that case, a newspaper publisher entered into a corporate insurance policy
    with the insurer, which provided, among other things, that the publisher had a
    duty to co-operate with the insurer. This court held that the publisher could
    not succeed on its claim for relief against forfeiture because its breach of
    the duty of co-operation was substantial. In doing so, Weiler J.A. made the
    following observations, at p. 281:

In
Travellers Indemnity Co. v. Sumner Co
.
[(1960),
    27 D.L.R. (2d) 562 (N.B. C.A.)], the court held that, although a breach of the
    insured's duty of co-operation could qualify as imperfect compliance, an
    insurer could deny coverage or refuse to defend if the lack of co-operation was
    substantial. West J.A. held, at p. 565, that [n]o inconsequential or
    trifling breach of such obligation should serve to exonerate the insurer from
    his contractual liabilities under the policy. The liability in that case arose
    out of a motor vehicle accident. The breach complained of by the insurer was
    the insured's failure to promptly notify the insurer of a drink the insured had
    taken shortly before the accident. The insured informed the insurer of this
    drink before he was examined for discovery and, at trial, the judge found that
    the insured was not intoxicated at the time of the accident. The court of
    appeal held that this inconsequential breach should not serve to allow the
    insurer to refuse to indemnify the insured.

The breach complained of in the present appeal is a
    substantial breach of the insured's duty of co-operation and of the insurer's
    right to defend the action. [The publisher] failed to report on the progress of
    the litigation, to convey offers to settle, to inform [the insurer] of the
    theory of the defence and to advise that the action had proceeded to trial
    until after the trial had begun. This breach is more than mere imperfect
    compliance, it is a substantial breach of the policy and on this basis alone
    [the publisher] is not entitled to claim relief from forfeiture.

[46]

In
Colliers McClocklin Real Estate Corp. v. Lloyds Underwriters
, 2004
    SKCA 66, 10 C.C.L.I. (4th) 1, at para. 28, the Saskatchewan Court of Appeal
    followed
Canadian Newspapers
, emphasizing that the proper inquiry is
    whether the relevant contract provision is a fundamental term, and whether its
    breach is a fundamental breach.

[47]

In
    light of the above, my view is that in this case, the respondents breach of
    statutory condition 4(1) is not non-compliance with a condition precedent.
    There are no grounds to believe that 4(1) is a fundamental term or that the
    respondents breach of it was of a fundamental nature. While the provision is a
    condition in name, the appellant pointed to no language in the contract stressing
    that the insurance coverage was conditioned on the claimant being authorized to
    drive. This fact renders our case different than the facts in
Stuart
,
    where plain language in the contract identified the relevant contractual term
    as a condition precedent. Neither was the respondents breach here a
    fundamental one. Had the respondents violation of statutory condition 4(1)
    been more substantial  for example, if she had been drinking heavily prior to
    driving  she may have been barred from obtaining relief from forfeiture.  This
    case, however, involves a relatively minor breach.

[48]

Going
    forward, this courts strict holding in
Stuart
should be applied
    narrowly. In
Marche v. Halifax Insurance Co
.
, 2005 SCC 6,
    [2005] 1 S.C.R. 47, the Supreme Court decided that s. 171 of the Nova Scotia
Insurance
    Act
, R.S.N.S. 1989, c. 231, which states that a policy condition is not
    binding on the insured if a court finds it unjust or unreasonable, extends to
    statutory conditions. Citing the decision in
Falk Bros
.
,
    McLachlin C.J. reasoned that s. 171s remedial purpose warranted this broad
    interpretation.

[49]

Plainly,
Marche
addressed the interpretation of a different statute, and its
    holding is not controlling of the case before us. Nonetheless,
Marche
s
    broad interpretive approach indicates that courts should give remedial
    provisions like s. 98 a wide scope to provide relief where the result would be
    otherwise inequitable or unjust.

[50]

In
    light of
Marche
, I believe the decision in
Stuart
should

be
    given a narrow application. A court should find that an insureds breach
    constitutes noncompliance with a condition precedent only in rare cases where
    the breach is substantial and prejudices the insurer. In all other instances,
    the breach will be deemed imperfect compliance, and relief against forfeiture
    will be available.

[51]

This
    holding does not upset the balance in the existing relief against forfeiture
    jurisprudence, because an insured must still make three showings  that his or
    her conduct was reasonable, that the breach was not grave, and that there is a
    disparity between the value of the property forfeited and the damage caused by
    the breach  in order to prevail.

(b)

Is relief available under s. 98 in insurance cases?

[52]

The
    remaining question of law is whether the relief against forfeiture provision in
    s. 98 of the
CJA
applies to contracts regulated by the
Insurance
    Act
. There is little jurisprudence on this issue, and it appears to be
    unsettled as to whether the relief provision in s. 98 is operative in the
    insurance realm, given the existence of s. 129 of the
Insurance Act
. In
    my view, it is.

[53]

The
    Supreme Court addressed equitable jurisdiction in the insurance context in
Saskatchewan
    River Bungalows Ltd. v. Maritime Life Assurance Co
.
,
supra
.
    The Court rejected the appellants argument that Albertas
Insurance Act
,
    R.S.A. 1980, c. I-5 occupied the field of equitable relief and precluded
    application of the
Judicature Act
, R.S.A. 1980, c. J-1 (the equivalent
    of the
CJA
) to life insurance contracts.  The Court explained at p. 505
    that the
Insurance Act
does not codify the whole law of insurance;
    rather, it merely imposes minimum standards on the industry.

[54]

It
    is worth repeating that courts are to interpret relief from forfeiture
    provisions broadly. In
Falk Bros
.
, McLachlin J. noted at pp.
    782-83, that:

The first consideration is that s. 109 is a remedial section
    and as such should be given an appropriately broad interpretation. In

Minto
    Construction Ltd. v. Gerling Global General Insurance Co.
(1978), 86
    D.L.R. (3d) 147, citing

Canadian Equipment Sales & Service Co. v.
    Continental Insurance Co
.
(1975), 59 D.L.R. (3d) 333 (Ont. C.A.),
    MacKinnon J.A. noted at p. 151 that the equivalent Ontario section is an
    ameliorating clause, and [that] it should be given a fair, large and liberal
    interpretation.

[55]

While
    these comments relate to relief from forfeiture provisions in Saskatchewan and
    Ontarios provincial insurance statutes, s. 98 is no different in that it too
    is a remedial section and merits a correspondingly broad interpretation.

[56]

I
    endorse the view expressed by Brown J. in
Sage v. Peel Mutual Insurance Co
.
(2005), 32 C.C.L.I. (4th) 110 (Ont. S.C.), a case discussed by the
    application judge. In
Sage
, the court granted relief under s. 98 to
    the plaintiffs who were denied coverage after failing to pay an insurance
    premium prior to an automobile accident. While recognizing that
Saskatchewan
    River
left the issue open, Brown J. stated, at p. 118:

In these limited circumstances I am satisfied that the general
    provisions of s. 98 of the [
CJA
] can provide the statutory basis for
    granting relief from forfeiture notwithstanding there is a specific relief from
    forfeiture provision in the
Insurance Act
.

[57]

Like
    Brown J., I would hold that the relief from forfeiture provision in s. 98 of
    the
CJA
applies to contracts regulated by the
Insurance Act
.
    This holding is consistent with the Supreme Courts finding in
Saskatchewan
    River Bungalows
that an insurance statute does not occupy the field of
    equitable relief, and that statutory standards operate as a floor, rather than
    a ceiling, for the insurance industry.

[58]

As
    the application judge explained, s. 129 of the
Insurance Act
is
    restricted to instances of imperfect compliance with terms of a policy
after

a loss has occurred; it has no application to cases where the breach
    occurred before the loss. As a consequence, a person who loses coverage because
    he or she was driving with an expired license, or because he or she failed to
    make a premium payment, see
Sage
, cannot rely on s. 129 for relief. That
    s. 129 leaves individuals like these  who have acted in good faith and whose
    breaches are relatively minor  without a remedy gives force to the argument
    that s. 98 should be operative in insurance cases. Thus, in the absence of
    clear legislative intent indicating that s. 129 of the
Insurance Act
applies to the exclusion of s. 98 of the
CJA
, I would hold that the
    latter provision is available as an avenue of relief for contracts governed by
    the
Insurance Act
.

(c)

Application of relief from forfeiture factors in this case

[59]

Having
    resolved the two threshold questions in the respondents favour, It remains to
    be decided whether she is entitled to relief against forfeiture. As noted
    above, the relief against forfeiture analysis is informed by three factors: (i)
    the conduct of the applicant, (ii) the gravity of the breach, and (iii) the disparity
    between the value of the property forfeited and the damage caused by the
    breach:
Saskatchewan River Bungalows
, at p. 504.

[60]

The
    first factor focuses on the reasonableness of the breaching partys conduct. It
    might seem that a finding that the respondent acted reasonably here would be
    foreclosed by my holding that the respondent did not act with all reasonable
    care and therefore cannot make out a due diligence defence. However, this is
    not necessarily so, because the reasonableness inquiry in the relief against
    forfeiture analysis is a much broader one.

[61]

As
    Doherty J.A. explained in
8477 Darlington Crescent
, at para. 89, the
    first factor of the analysis requires an examination of the reasonableness of
    the breaching partys conduct
as
it relates to all facets of the
    contractual relationship
, including the breach in issue and the
    aftermath of the breach (emphasis added). The scope of the reasonableness
    analysis was also discussed by Osborne J.A. in
Williams Estate v. Paul
    Revere Life Insurance Co.
(1997)
,
    34 O.R. (3d) 161,

at p. 175:

The reasonableness test requires consideration of the nature of
    the breach, what caused it and what, if anything, the insured attempted to do
    about it. All of the circumstances, including those that go to explain the act
    or omission that caused the lapse (forfeiture) of the policy, should be taken
    into account. It is only by considering the relevant background that the
    reasonableness of the insured's conduct can be realistically considered.

[62]

In my view, when all facets of the contractual relationship
    between the parties are taken into account, especially with the relevant
    background, the respondent in this case acted reasonably. Consider that, up
    until the respondents birthday on October 7, 2011, her drivers license was
    valid, and as soon as she discovered that her license had expired she sought to
    renew it and had no difficulty doing so.
Moreover,
    the respondent always paid her premiums in a timely manner and acted in good
    faith on all occasions.

[63]

The
    cases in which courts have found that a breaching party failed to act
    reasonably involve conduct far removed from the respondents actions here. For
    example, in
Day Estate v. Pandurevic
, 2008 ONCA 266, 61 C.C.L.I. (4th)
    50, the court found at para. 4 that the respondent could not obtain s. 98
    relief even though he had no knowledge that his license was suspended. The
    court emphasized the fact that the respondents license had been suspended
    twice before, and that on the day of the accident he picked up two letters from
    the Ministry of Transportation and continued driving without reading them. To
    the court in
Day Estate
, the facts indicated that the respondent acted
    with wilful blindness or recklessness.

[64]

In

Williams
,
supra
, the court held at p. 176 that the
    appellant did not qualify for relief under s. 98 because his failure to pay his
    premiums in a timely fashion occurred due to his ongoing negligence and general
    inability to keep track of his personal finances.

[65]

Finally,
    in
Saskatchewan River Bungalows
, the Supreme Court found, at p. 504,
    that the respondents did not act reasonably because, among other things, they
    learned that payment of a premium was nine months overdue but did not tender a
    replacement cheque until three months later.

[66]

In
    short, I have no doubt that, for the purposes of the relief against forfeiture
    analysis, the respondents conduct here was reasonable.

[67]

The
    second factor is the gravity of the breach. This inquiry looks at both the
    nature of the breach itself and the impact of that breach on the contractual
    rights of the other party:
8477 Darlington Crescent
, at para. 91. If,
    for example, the forfeiture provision operated as a means of securing the
    payment required under a lease, the fact that the breaching party had paid all
    the amounts owing could obviate the need to resort to forfeiture and support a
    claim for relief
.

[68]

This
    second factor has received less judicial consideration than the first, partly
    because courts often end the analysis once it has been determined that the
    breaching party failed to act reasonably. One might argue that in this case,
    the breach was serious because the license had been expired for over four
    months at the time of the accident. However, the breach had no impact on the
    respondents ability to drive safely or on the contractual rights of the
    insurance company. While the purpose of the forfeiture provision here was not a
    means of securing payment, which is typically a ground for finding this factor
    fulfilled,
[2]
the breach here was by no means grave.

[69]

The
    third factor is the disparity between the value of the property forfeited and
    the damage caused by the breach. This factor entails a kind of proportionality
    analysis:
8477 Darlington Crescent
, at para. 92. In an insurance
    case, this inquiry involves comparison of the disparity between the loss of
    coverage and the extent of the damage caused by the insureds breach.

[70]

For
    example, in
Sage
,
the
    court found that the substantial disparity between the loss of insurance
    coverage  which required the plaintiffs to pay for damage to their car  and
    the value of the additional premium that the plaintiffs neglected to pay
    weighed in favor of granting relief against forfeiture.

[71]

In
    the case at bar, the disparity is enormous: the respondent stands to lose
    $1,000,000 in insurance coverage, while the breach of statutory condition 4(1)
    caused no prejudice to the insurance company.

V. CONCLUSION

[72]

For
    the reasons stated above, I would reverse the application judges holding on
    due diligence but grant the respondent relief against forfeiture under s. 98 of
    the
CJA
.

[73]

In
    my view, the facts required to make out a due diligence defence are simply not present.
    At the same time, if this court were to allow the appeal, the insurance company
    would enjoy a large windfall at the expense of an individual who acted in good
    faith and whose breach caused no prejudice to the company. This result would be
    contrary to fundamental notions of equity. Accordingly, I would dismiss the
    appeal.

VI. COSTS

[74]

As
    the respondent is the successful party on appeal, I would award her costs in
    the agreed-upon sum of $12,500 inclusive of disbursements and HST.

Released:

FEB 19 2014                                    H.S.
    LaForme J.A.

JCM                                                          I
    agree M. Rosenberg J.A.

I
    agree J.C. MacPherson J.A.

[1]
See e.g.,
Williams v. York Fire & Casualty Insurance Co
.
,
    2007 ONCA 479, 86 O.R. (3d) 241, at para. 40;
Commander Construction v.
    Sovereign General Insurance Co
.
, 2013 ONSC 7104, at para. 38;
Sage
    v. Peel Mutual Insurance Co
.
(2005), 32 C.C.L.I. (4th) 110 (Ont.
    S.C.).

[2]
See e.g.,
Shiloh Spinners Ltd. v. Harding
, [1973] A.C. 691, at p. 722
    ([W]e should reaffirm the right of courts of equity in appropriate and limited
    cases to relieve against forfeiture for breach of covenant or condition where
    the primary object of the bargain is to secure a stated result which can
    effectively be attained when the matter comes before the court, and where the
    forfeiture provision is added by way of security for the production of that
    result.).