WARNING

THIS IS AN APPEAL UNDER THE

CHILD AND FAMILY SERVICES ACT

AND IS SUBJECT TO S. 45 OF THE ACT WHICH
    PROVIDES:

45(7)  The court may make an order,

(a) excluding a particular media representative
    from all or part of a hearing;

(b) excluding all media representatives from all
    or a part of a hearing; or

(c) prohibiting the publication of a report of the
    hearing or a specified part of the hearing,

where the court is of the opinion that the presence
    of the media representative or representatives or the publication of the
    report, as the case may be, would cause emotional harm to a child who is a
    witness at or a participant in the hearing or is the subject of the proceeding.

45(8)
No person shall publish or
    make public information that has the effect of identifying a child who is a
    witness at or a participant in a hearing or the subject of a proceeding, or the
    childs parent or foster parent or a member of the childs family.

45(9)
The court may make an order
    prohibiting the publication of information that has the effect of identifying a
    person charged with an offence under this Part.

COURT OF APPEAL FOR ONTARIO

CITATION: Children's Aid Society of Oxford County v. W.T.C.,
    2014 ONCA 540

DATE: 20140710

DOCKET: C55909

Hoy A.C.J.O., Feldman and Simmons JJ.A.

BETWEEN

Childrens Aid Society of Oxford County

Applicant
    (Respondent)

and

W.T.C.

Respondent (Appellant)

John
    Schuman and Rachel Healey, for the appellant

Lorne
    Glass, for the respondent

Robert
    E. Charney and Bruce Ellis, for the Ministry of the Attorney General

Heard: December
    20, 2013

On appeal from the order
    of Justice Johanne N. Morissette of the Superior Court of Justice, dated July
    20, 2012, dismissing an appeal from the order of Justice Peter R. W. Isaacs of
    the Ontario Court of Justice, dated September 2, 2010.

Feldman J.A.:

Background

[1]

In reasons for decision dated July 23, 2013 (2013 ONCA 491), and, after
    receiving fresh evidence, November 1, 2013 (2013 ONCA 637), this court
    confirmed the decisions of the Ontario Court of Justice on a status review
    application and of the Superior Court on appeal, that the child L.H. remain a
    Crown ward with no access so that she could be adopted by the prospective adoptive
    parents with whom she had been living for over four years.

[2]

In her Supplementary Appeal Book and Compendium filed in this court,  the
    mother submitted that delays in the appeal process, caused most significantly
    by delays in preparation of necessary transcripts, deprived her of her s. 7
Charter
right to security of the person, contrary to the principles of fundamental
    justice. In particular, she argued that the institutional delay effectively
    rendered the outcome of the appeal process a
fait accompli
by
    extending the time that the child remained in the care of the prospective
    adoptive family to four years, creating the exclusive opportunity for the child
    to bond with that family. The child was two years old when she was initially
    placed with the prospective adoptive family and was six years old at the time
    of the appeal hearing in this court.

[3]

In its July 2013 reasons, the court requested written submissions from
    the Attorney General of Ontario in response to the
Charter
issue and
    ordered a further report on the child. After receiving the fresh evidence, the
    court issued its decision dismissing the mothers appeal from the status review
    application in November 2013. Having received the submissions of the Attorney
    General in response to the
Charter
claim, the panel reconvened to hear
    oral submissions from all parties on whether there was a
Charter
breach, and if so, what remedy was available.

[4]

The details of the mothers
Charter
claim are set out at paras. 53-55 of the July 2013 decision
:

[53] The basis of the mothers s. 7 claim is the institutional
    delay that occurred in this case. The chronology began in March 2008 when the
    order for Crown wardship with no access was made for L.H. The mother applied
    for a status review under s. 65.1 of the CFSA on February 20, 2009, returnable
    on April 6, 2009. Although Rule 33 of the
Family Law Rules
, O. Reg.
    114/99 provides that a status review hearing must be completed within 120 days,
    for reasons unexplained in the record, the status review hearing in this case
    did not begin until November 16, 2009. In the meantime, in June 2009, L.H. was
    placed with the prospective adoptive family with whom she continues to reside
    today. The hearing was continued on January 5, 2010 with written submissions on
    February 26, 2010. The reasons of the status review judge were released on
    September 2, 2010.

[54] For the purposes of the appeal to the Superior Court, the
    mother ordered the transcript of the hearing on January 29, 2011, but it was
    not prepared for 13 months until March 7, 2012. The appeal record to the
    Superior Court was filed on April 23, 2012. The Superior Court appeal judge
    released her reasons on July 20, 2012. Because her reasons were given orally,
    the transcript of those reasons had to be ordered for the purpose of the appeal
    to this court. The transcript was not produced until December 17, 2012. The mother
    was also not able to perfect her appeal to this court without orders of the two
    lower courts, which could only be obtained with the Societys cooperation.

[55] In summary, the mother submits that her rights under s. 7
    of the
Charter
have been violated by delays she did not cause. Although
    she initiated the status review in February 2009, the decision of the court only
    came in September 2010. Her appeal was then delayed for 13 months because the
    transcript of the hearing, which was required, took that long to prepare. There
    was then an additional delay in bringing the further appeal to this court
    because the oral reasons of the appeal judge, which were very brief  just two
    pages (plus 17 pages of submissions)  were not prepared for several months.

[5]

The appellant submits that the delay in proceeding with the status
    review and the appeals caused her real prejudice because it was only after she
    requested the status review that the child was placed with the prospective
    adoptive family and had the opportunity to bond with them over the four years
    it took to go through the process.

[6]

In
New Brunswick (Minister of Health and Community Services) v. G.
    (J.)
, [1999] 3 S.C.R. 46, the Supreme Court of Canada held that state
    action under child welfare legislation that seeks to interfere with a parents
    relationship with her or his child engages s. 7 of the
Charter
. The
    nature of the impact on the parents security of the person is a serious and
    profound effect on a persons psychological integrity: at para. 60. Lamer
    C.J., speaking for the court
[1]
,
    made it clear how sensitive he was to the sanctity and profound importance of
    the parent-child relationship, stating at para. 61, that he had:

[61] [L]ittle
doubt that state removal of a child
    from parental custody pursuant to the states
parens patriae
jurisdiction constitutes a serious interference with the psychological
    integrity of the parent. The parental interest in raising and caring for a
    child is, as La Forest J. held in
B. (R.)
,
supra
, at para. 83, an individual interest of fundamental
    importance in our society. Besides the obvious distress arising from the loss
    of companionship of the child, direct state interference with the parent-child
    relationship, through a procedure in which the relationship is subject to state
    inspection and review, is a gross intrusion into a private and intimate sphere.
    Further, the parent is often stigmatized as unfit when relieved of custody.
    As an individuals status as a parent is often fundamental to personal
    identity, the stigma and distress resulting from a loss of parental status is a
    particularly serious consequence of the states conduct.

[7]

Turning to an analysis of the principles of fundamental justice, Lamer C.J.
    explained at paras. 70 and 72 that in the child protection context, the
    principles of fundamental justice are both substantive and procedural:

[70] Thus, the principles of fundamental justice
    in child protection proceedings are both substantive and procedural. The state
    may only relieve a parent of custody when it is necessary to protect the best
    interests of the child, provided that there is a fair procedure for making this
    determination.

[72] A fair procedure for determining whether a
    custody order should be extended requires a fair hearing before a neutral and
    impartial arbiter. The paramount consideration at the hearing should be the
    childs best interests

[8]

In that case, the Court determined that in order to have a fair hearing,
    the mother required appropriate legal representation to present the parents
    case in the most effective way possible. Lamer C.J. explained at para. 73:

[73] For the hearing to be fair, the parent must
    have an opportunity to present his or her case effectively. Effective parental
    participation at the hearing is essential for determining the best interests of
    the child in circumstances where the parent seeks to maintain custody of the
    child.  The best interests of the child are presumed to lie within the
    parental home. However, when the state makes an application for custody, it
    does so because there are grounds to believe that is not the case. A judge must
    then determine whether the parent should retain custody. In order to make this
    determination, the judge must be presented with evidence of the childs home
    life and the quality of parenting it has been receiving and is expected to receive.
    The parent is in a unique position to provide this information to the court. If
    denied the opportunity to participate effectively at the hearing, the judge may
    be unable to make an accurate determination of the childs best interests.
    There is a risk that the parent will lose custody of the child when in actual
    fact it might have been in the childs best interests to remain in his or her
    care.

[9]

In this case, the appellant does not assert that she did not have a fair
    hearing at any stage. Rather, she states that the delays in the process, most particularly
    the significant delay in preparing necessary transcripts and the delay in
    scheduling the status review hearing, made the procedure unfair to her and, in
    that way, did not accord with the principles of fundamental justice.

Analysis

[10]

I
    agree that in cases involving the welfare of children, timeliness is extremely important.
    Whether a child ultimately returns to the parents or parent, or is made a Crown
    ward, the child lives in temporary care, and all interested parties live in a
    state of uncertainty until the proceedings have been concluded. No adoption
    process can begin until any appeal from the order for Crown wardship is
    dismissed.

[11]

This
    court case-manages child protection appeals to ensure that time limits for
    perfection are adhered to or modified only as necessary, and the appeal hearing
    itself is expedited. Because this court is the second level of appeal for Crown
    wardship orders, transcript preparation is not usually an issue.

[12]

Delay
    in the preparation of transcripts for the first level of appeal from a Crown
    wardship proceeding has been identified by the courts and by the Ministry as a
    significant issue and some administrative steps have been taken to address it,
    including a new system for the ordering and preparation of transcripts. Hopefully
    this new system, as well as recent case law (including this courts July 23,
    2013, decision in the present appeal) will ensure that counsel, the Ministry
    and the court give these cases the priority they demand.

[13]

Whether
    inordinate procedural delay, including the preparation of transcripts, could
    amount to a breach of a parent/appellants s.7
Charter
right and if
    so, what remedies may be available, do not need to be decided in this case
    because of the view I take of the effect of the delay in the particular
    circumstances.

[14]

As
    I stated at the outset, the mothers position is that the passage of over four
    years from June 2009 (when the child was placed with the prospective adoptive
    parents) to July 2013 (when the final appeal was heard in this court) effectively
    doomed her case because the child had the opportunity to bond with the new family.
    This, she claimed, made it inevitable that the courts best interests assessment
    would favour a Crown wardship/no access order.

[15]

I
    agree that over that time the child was able to settle well into a new family
    environment, but I do not accept that she would have been returned to her
    mothers care but for the delay in the Crown wardship proceedings.

[16]

As
    recounted in our July 13, 2013 decision, at para. 10, the evidence before the
    status review judge indicated that L.H. was born five weeks premature, that she
    was exposed to cocaine in the womb, and that she developed feeding problems
    necessitating the insertion of a G tube into her stomach to ensure that she
    received sufficient nutrition. The evidence also indicated that L.H. was
    developmentally delayed and required the support of a speech therapist,
    occupational therapist and nutritionist.

[17]

By
    the time of the status review hearing, the mother had a job at a restaurant and
    an apartment, she had been drug-free for over a year and was continuing with
    drug rehabilitation programs. Her progress was such that the Society was
    prepared to return her oldest and youngest children to her care, subject to
    supervision orders. Despite that progress, however, in reasons released in
    September 2010, the status review judge found that the mother had not yet demonstrated
    a real understanding of the commitment and effort that would be required to
    successfully parent L.H and that [n]othing ha[d] been produced to demonstrate
    that access to [L.H.] by [the mother] will be either beneficial or meaningful
    for the child.

[18]

At
    the same time, L.H. showed significant improvement through the care she
    received from the prospective adoptive parents. It was clear to the status
    court judge that the new situation was in the childs best interests. That
    conclusion was confirmed on appeal to the Superior Court.

[19]

Fresh
    evidence on the appeal to this court showed on the one hand that the mother had
    continued to improve her situation considerably: she had taken medical courses
    to better prepare herself to provide for L.H.s care; she graduated from a
    medical lab assistant/technician course with some health-related components;
    she now had a part-time managerial position in a restaurant; she owned a home
    with her new partner which could accommodate L.H.; and the other two children were
    thriving with her.

[20]

On
    the other hand, the fresh evidence confirmed that the child was thriving as a
    member of her new family. She no longer needed the feeding tube, which was a
    significant achievement.

[21]

Finding
    no error in the decisions below, this court sought and received a further updated
    report on the childs status before upholding the decision of the Superior
    Court. That report confirmed not only that the child was thriving, but also that
    it would be potentially harmful if she had to undergo another move.

[22]

In
    other words, the passage of time benefitted both the mother and the child. The
    mother made significant improvements in her life that gave her the ability to
    seek the return of her child. The child thrived in the care of the prospective
    adoptive family. In other circumstances, it may have been in the best interests
    of the child to return to the care of the mother by the time the appeal was
    heard in this court, had the child not been placed in a home where she was
    thriving and where her situation had the potential for permanence. Many children
    wait in foster care.

[23]

Ultimately,
    the issue for the courts was the best interests of the child. The passage of
    time gave the mother the chance to improve her ability to be an effective
    parent for this child. However, before the mother reached that position, and a
    decision had to be made by the status court judge, it was in the childs best
    interests to remain in the care of the proposed adoptive family. That situation
    continued to be the case until the final order of this court made on November
    1, 2013.

[24]

I
    conclude that the delays in this case did not cause the substantive prejudice
    the mothers alleges. The issue of a s. 7
Charter
breach does not
    arise.

[25]

I
    would therefore dismiss the appeal on the
Charter
application.

[26]

The
    court left the issue of the costs of the appeal to be determined following its
    decision on the
Charter
application. The appellant was not successful
    on the appeal and therefore is not entitled to her costs of the appeal.

[27]

On
    the
Charter
application, the issue arose because of court administration
    delays. The issue is one of general importance and the court asked the Ministry
    of the Attorney General to respond in writing and asked the parties to
    re-attend to make oral submissions. In those circumstances, in my view, the
    appellant should receive her costs of the
Charter
application on the
    partial indemnity scale, payable by the Attorney General for fees in the amount
    of $5000.00 as claimed plus HST. No claim was made for disbursements.

RELEASED: AH July 10, 2014

K.
    Feldman J.A.

I
    agree. Alexandra Hoy A.C.J.O.

I
    agree. J. Simmons J.A.

[1]

LHeureux Dube J. wrote concurring reasons.


COURT OF APPEAL FOR ONTARIO

CITATION:
Elbakhiet v. Palmer, 2014 ONCA 544

DATE: 20140711

DOCKET: C56143

Rosenberg, Cronk and Tulloch JJ.A.

BETWEEN

Amira Khalid Mo Elbakhiet, Abdelrhman Elkh Ahmed
    and Maha Ahmed, a minor, and Niem Ahmed, a minor, by their Litigation Guardian,
    Abdelrhman Alkh Ahmed

Plaintiffs (Respondents)

and

Derek A. Palmer, Rockie Palmer, Metcalfe Realty
    Company Limited and Kingsway General Insurance Company

Defendants (Appellants)

Chris G. Paliare and Andrew K. Lokan, for the
    appellants, Derek A. Palmer and Rockie Palmer

Allan Rouben, for the respondents

Heard: January 20, 2014

On appeal from the judgment of Justice Giovanna Toscano
    Roccamo of the Superior Court of Justice, dated June 21, 2012, with reasons
    reported at 2012 ONSC 3666.

Rosenberg J.A.:

[1]

The appellants, defendants in a motor vehicle accident action, appeal
    from the trial judges costs award. Prior to the commencement of trial, the
    appellants made two offers to settle. While the respondents obtained judgment
    in their favour following a jury trial, the appellants submit that the trial
    judge erred in failing to correctly apply rules 49.10(2) and 49.13, and Rule 57
    of the
Rules of Civil Procedure,
R.R.O. 1990, Reg. 194. This appeal
    raises the following issues:

(1)

Was the appellants second offer to settle made at least seven days
    before the commencement of the hearing as required by rule 49.10(2)?

(2)

Did the appellants prove that the respondents obtained a judgment as
    favourable as or less favourable than the terms of the second offer to settle?

(3)

Even if the second offer to settle did not meet the requirements of rule
    49.10, did the trial judge err in awarding the respondents their costs on a
    partial indemnity basis in the amount of $578,742.28 despite the respondents
    modest success at trial and the offers to settle made by the appellants?

[2]

For the following reasons, I would allow the appeal and set aside the
    costs order of the trial judge.

THE FACTS

The Jurys Damages Award

[3]

This appeal arises out of a jury trial for a motor vehicle accident that
    occurred on July 7, 2007. There was no dispute that the appellant Derek
    Palmers motor vehicle rear-ended a vehicle being driven by the respondent Abdelrhman
    Elkh Ahmed. The issue at trial was the scope of the injuries suffered by the
    respondent Amira Khalid Mo Elbakhiet, who was a back-seat passenger. Despite
    the fact that the collision occurred at low speed, Ms. Elbakhiet claimed that
    she suffered serious post-traumatic headaches, whiplash-related symptoms,
    depression and a traumatic brain injury leading to post-concussive syndrome.
    The respondents claimed damages of almost $2 million, including substantial
    amounts for loss of future earnings and cost of future care. The jury awarded
    damages of only $144,013.07  (Judgment) allocated as follows:

Non-pecuniary damages                     $25,000.00

Loss of past earnings                                 $0.00

Loss of future earnings                       $87,852.75

Cost of future care                                $6,160.32

Family Law Act
claims
$25,000.00

Total
    $144,013.07

[4]

The jurys answers to the questions on the verdict sheet show that it
    had difficulty with Ms. Elbakhiets credibility.

The Offers to Settle

[5]

The respondents made one offer to settle on February 9, 2012 for
    $600,000, plus costs as agreed or assessed on a partial indemnity basis to the
    date of the offer, and on a substantial indemnity basis thereafter.

[6]

The appellants made two offers. The first, dated November 15, 2011, was
    for $120,000, plus costs as agreed or assessed to the date of the offer. The
    second offer was dated February 9, 2012 and served on February 10, 2012. This
    offer was for $145,000, plus prejudgment interest in accordance with the
Courts
    of Justice Act
, R.S.O. 1990, c. C. 43,
and costs as agreed or assessed to the date of the offer.

THE APPLICABLE RULES

[7]

As this case involves offers to settle, portions of Rule 49 are involved
    as follows:

49.03  An
    offer to settle may be made at any time, but where the offer to settle is made
    less than seven days before the hearing commences, the costs consequences
    referred to in rule 49.10 do not apply.

49.10
(2)  Where
    an offer to settle,

(a) is made by a defendant at least seven days before the
    commencement of the hearing;

(b) is not withdrawn and does not expire before the
    commencement of the hearing; and

(c) is not accepted by the plaintiff,

and the plaintiff obtains a judgment as favourable as or less
    favourable than the terms of the offer to settle, the plaintiff is entitled to
    partial indemnity costs to the date the offer was served and the defendant is
    entitled to partial indemnity costs from that date, unless the court orders
    otherwise.

(3)  The
    burden of proving that the judgment is as favourable as the terms of the offer
    to settle, or more or less favourable, as the case may be, is on the party who
    claims the benefit of subrule (1) or (2).

49.13  Despite
rules 49.03, 49.10 and 49.11, the
    court, in exercising its discretion with respect to costs, may take into account
    any offer to settle made in writing, the date the offer was made and the terms
    of the offer.

[8]

This case also concerns the general principles a court considers when
    exercising its discretion to award costs, set out in rule 57.01(1):

57.01  (1)  In
    exercising its discretion under section 131 of the
Courts of Justice Act
to award costs, the court may consider, in addition to the result in the
    proceeding and
any offer to settle
or to contribute made in writing,

(0.a) the principle of indemnity, including, where
    applicable, the experience of the lawyer for the party entitled to the costs as
    well as the rates charged and the hours spent by that lawyer;

(0.b) the amount of costs that an unsuccessful party could
    reasonably expect to pay in relation to the step in the proceeding for which
    costs are being fixed;

(a)
the amount claimed and the amount recovered in the
    proceeding
;

(b) the apportionment of liability;

(c) the complexity of the proceeding;

(d) the importance of the issues;

(e) the conduct of any party that tended to shorten or to
    lengthen unnecessarily the duration of the proceeding;

(f) whether any step in the proceeding was,

(i) improper, vexatious or
    unnecessary, or

(ii) taken through negligence,
    mistake or excessive caution;

(g) a party's denial of or refusal to admit anything that
    should have been admitted;

(h) whether it is appropriate to award any costs or more
    than one set of costs where a party,

(i) commenced separate proceedings
    for claims that should have been made in one proceeding, or

(ii) in defending a proceeding
    separated unnecessarily from another party in the same interest or defended by
    a different lawyer; and

(i) any other matter relevant to the question of costs. [Emphasis
    added.]

THE REASONS OF THE TRIAL JUDGE

[9]

The trial judge first dealt with whether the offer served by the
    respondents on February 10 was made at least seven days before the
    commencement of the hearing, within the meaning of rule 49.10(2)(a). Because
    of rule 3.01(1)(b), holidays including weekends and statutory holidays are not
    to be counted in calculating the seven days. It was conceded by the parties
    that the seven day requirement was met only if the hearing commenced on
    February 22.

[10]

The
    trial judge held that in a jury trial, the time should only begin to run with
    the calling of evidence.  The trial judge referred to several cases that have
    held to this effect. Jury selection, opening statements and rulings on
    objections by the parties to each others opening statements were dealt with on
    February 21, 2012. The calling of evidence did not begin until February 22. She
    also noted that the respondents had 14 calendar days to consider the offer.
    Accordingly, she found that the February 10 offer was made within seven days
    before commencement of the hearing, within the meaning of rule 49.10(2)(a).

[11]

The
    trial judge then turned to the question whether the respondents obtained a
    judgment as favourable as or less favourable than the terms of the second offer
    to settle. It was the position of the appellants that the phrase plus
    prejudgment interest in accordance with the
Courts of Justice Act
 in
    the offer was intended to mean prejudgment interest of 5% on the entire
    $145,000. If that were the case, the offer would exceed the jurys verdict.
    Under the
Courts of Justice Act,
s. 128, only non-pecuniary damages
    attract an interest rate of 5%. Other elements of an award, such as past income
    loss and damages at that time would have had a lower interest rate. The trial
    judge was not satisfied there was a uniform practice that 5% should be applied
    to the entire offer. The trial judge noted that the terms of a Rule 49 offer
    must be fixed, certain and capable of clear calculation in order to attract the
    cost consequences. The trial judge appeared to find that the offer was
    uncertain and therefore the respondents should not be deprived of partial
    indemnity costs, subject to considerations under Rule 57.

[12]

The
    trial judge found, at para. 35, that there were no circumstances pertinent to
    the factors in Rule 57 that would justify departure from application of the
    costs consequences of Rule 49. She rejected the position that even if the Judgment
    was only slightly better than the offer, the normal costs consequences should
    not follow. She stated, at para. 36, that only where the party meets its
    burden under Rule 49.10(2) and (3), subject to the courts jurisdiction to
    order otherwise should there be costs consequences from not accepting the
    offer. The trial judge said, at para. 37:

[N]either the Plaintiffs nor the Defendants clearly point to
    any factor in Rule 57.01, other than the result in the proceedings and the
    Offers to Settle, to guide me in the exercise of my discretion to award costs
    in this case.

[13]

The
    trial judge dealt with what she identified as the relevant matters under Rule
    57 as follows:

·

The Amount Claimed and Received
: while the jury
    preferred the appellants theory of the case, based on reputable and ample
    medical opinion, the case was potentially worth considerably more than the jury
    awarded. In light of the body of medical evidence, the trial judge would not
    exercise [her] discretion to penalize the Plaintiffs in costs for pursuing the
    case with the degree of care and attention it clearly demanded.

·

Complexity of Proceeding, and Importance of the Issues
:
the parties agreed that the case
    involved complex issues of causation and significantly important issues.

·

Conduct Tending to Impact on Duration of Proceedings
:
while the respondents called seven witnesses
    not on their witness list and filed three expert reports after a deadline
    ordered by the trial management Master, there should be no costs consequences.
    There was no suggestion that the witnesses were unnecessary or that the
    appellants were prejudiced by the expert reports.

·

Improper, Vexatious or Unnecessary Steps
:
there were no improper, vexatious or
    unnecessary steps.

·

Failure or Refusal to Admit what should have been
    Admitted
:
neither party
    could be faulted for denial of or refusal to admit anything that should have
    been admitted.

·

Other Relevant Matters
:
the trial judge took into account that if the appellants were given costs this
    would deprive Amira Elbakhiet of funding for ongoing psychotherapy and would
    have some bearing on her ability to complete her schooling.

Accordingly, the trial judge ordered the appellants to
    pay the respondents partial indemnity costs throughout in the amount of
    $578,742.28, inclusive of disbursements and taxes.

THE ISSUES

[14]

The
    appellants submit that the trial judge erred in finding that their offer to
    settle did not exceed the Judgment. They submit that there is a general
    understanding that an offer in the terms made by the appellants would bear
    interest at the most favourable rate of 5% for the entire amount. If there was
    any doubt, the respondents should have made inquiries as to the terms of the
    offer. Alternatively, the trial judge should have allocated most of the offer
    to general damages in which case the offer would have exceeded the Judgment.
    They rely upon the reasons of the majority in
Rooney (Litigation Guardian
    of) v. Graham
(2001), 53 O.R. (3d) 685 (C.A.) and note that while the
    trial judge referred to
Rooney
, she only referred to the concurring
    minority reasons of Carthy J.A.  Alternatively, the trial judge erred in
    failing to take into account that the Judgment was very close to the
    appellants offer. This near miss should have been considered as required by rules
    49.13 and 57.01. Finally, the trial judge also failed to apply the
    proportionality principle, given the respondents very limited success as
    compared to the amounts sought.

[15]

The
    respondents support the trial judges order, except that they argue that the second
    offer to settle was not made at least seven days before the commencement of the
    hearing. They argue that the hearing began on February 21, 2012. They further submit
    that the offer was not certain and the appellants were unable to discharge the
    onus of proving that the offer was more favourable than the Judgment. They deny
    that there is any industry practice in relation to pre-judgment interest as
    claimed by the appellants. There is also no near-miss principle that applies
    to attract the costs consequences of Rule 49. The trial judge had the authority
    to reduce the respondents costs but it was a matter of discretion for the
    trial judge and she did not act unreasonably. The trial judge considered all of
    the relevant factors under Rule 57. This was not a case where the parties
    litigated a matter of negligible value out of all proportion to the amounts at
    stake.

ANALYSIS

At least seven days before commencement of the hearing

[16]

Determining
    when a trial has commenced is a complex matter that depends upon the purpose
    involved in the inquiry. In general, cases in the trial courts of this province
    have supported the view that a jury trial commences for the purpose of Rule 49
    when evidence has been heard. Some of the relevant cases are summarized by
    Sutherland J. in
Capela v. Rush
(2002), 59 O.R. (3d) 299 (S.C.J.). One
    contrary decision in
Bontje v. Campbell, Roy & Brown Insurance Brokers
    Inc.
(1994), 21 O.R. (3d) 545 (Gen. Div.), is discussed at some length in
Capela
.
    Sutherland J. in
Capela
pointed out that the judge in
Bonje
did not refer to the many other cases that held the trial only commenced with
    the hearing of evidence.

[17]

The
    respondents point out that Rule 49 uses the term hearing rather than trial.
    I agree with the appellants that the use of hearing merely reflects the fact
    that Rule 49 can apply to other types of proceedings, not just trials.

[18]

In
    different circumstances the terms trial or hearing can have a broader or
    narrower meaning depending upon the purpose for which the term is used. For
    example, in
Sauve v. Pokorny
(1997), 35 O.R. (3d) 752 (C.A.), the
    court had to determine the meaning of the phrase presiding at a trial in s.
    108(7) of the
Courts of Justice Act
. That section provides as follows:

[t]he judge presiding at a trial
    may discharge a juror on the ground of illness, hardship, partiality or other
    sufficient cause. The question in
Sauve
was whether that section
    applied after the jury was sworn and the trial judge and counsel had given
    their opening addresses. A majority of this court held that the judge was
    presiding at the trial for the purpose of that section and could proceed with
    five jurors. The court relied upon a similar decision in the criminal context
    in
R. v. Varcoe
(1996), 104 C.C.C. (3d) 449 (Ont. C.A.).

[19]

The
    wording of Rule 49 and s. 108(7) are different and engage different interests.  In
    the case of discharge of jurors, as in
Sauve,
the purpose of the power
    is to avoid abortive trials. The purpose of Rule 49, in contrast, is to
    encourage settlement.

[20]

The
    weight of judicial authority, reviewed in
Capela
, suggests that a
    trial commences on the first day of evidence. This is also the view expressed
    in the leading text on costs, M.M. Orkin
The Law of Costs
, looseleaf,
    2d ed. (Aurora: Canada Law Books Inc., 2011), at para. 214.5. This consensus
    has provided certainty to parties making Rule 49 offers, and such certainty
    furthers the purposes of Rule 49. A civil trial therefore commences within the
    meaning of Rule 49 when evidence has been heard.

[21]

The
    appellants second offer to settle, served February 10, 2012, was therefore
    made at least seven days before the commencement of the hearing.

Did the Offer exceed the Judgment?

[22]

There
    are two issues involved in the question whether the second offer exceeded the
    Judgment. First, whether the offer was sufficiently certain or clear. Second,
    whether the appellants established that the offer did in fact exceed the
    Judgment.

[23]

The
    clarity issue arises because the offer does not specify to what part of the
    judgment the interest rate should apply. As noted by the trial judge, there are
    different rates of interest for different types of claims. In
Rooney
    (Litigation Guardian of) v. Graham
(2001), 53 O.R. (3d) 685 (C.A.), Carthy
    J.A. in his concurring minority reasons suggested that an offer of that type could
    suffer from lack of clarity and be invalid.  As he said, at para. 30:

The inclusion of a general claim for prejudgment interest in an
    offer presents no problems to the trial judge because it appears as the same
    amount in both the offer and the judgment. However, if presented as a general
    claim (in the present case it was fixed at 10 per cent of $225,000) it does
    provide problems to the offeree. Section 128 of the
Courts of Justice Act
provides for different rates for different types of claims and, thus, whenever
    the claim is a mixed one there would be no means whereby the offeree would know
    the current amount being offered.

[24]

Speaking
    for the majority, Laskin J.A. seemed more inclined to accept that this type of
    offer could be sufficiently clear. As he said, at para. 49:

What I have said about ongoing costs provisions in an offer
    applies to provisions for prejudgment interest. Carthy J.A. suggests that even
    some provisions for prejudgment interest may deprive a party of the cost
    consequences of rule 49.10. Rule 49 offers routinely contain provisions for
    prejudgment interest, either a specified amount or, as in this case, a
    specified rate. The calculation of prejudgment interest ordinarily is not
    difficult. I see no justification for interpreting Rule 49 to preclude
    provisions for ongoing prejudgment interest in offers to settle.

[25]

The
    problem in this case is that the provision for prejudgment interest in the
    offer neither provides for a specified amount nor a specified rate, because the
    rate varies depending upon the element of the claim.
Rooney
has,
    however, in my view resolved the approach to this uncertainty. As Laskin J.A.
    said, albeit in the context of a provision for solicitor and client costs, at
    para. 44:

This "uncertainty" should not invalidate Rule 49
    offers. I recognize that some courts have taken the opposite view. It seems to
    me, however, that in evaluating a Rule 49 offer any "uncertainty"
    that arises from a provision for costs should only be relevant in deciding
    whether the party relying on the offer has met its burden of proof under rule
    49.10(3). In other words, uncertainty or lack of clarity in an offer may
    prevent a party from showing that the judgment it obtained was "as
    favourable as the terms of the offer to settle, or more or less favourable, as
    the case may be". [Citations omitted.]

[26]

The
    respondents could know with sufficient precision whether to accept the offer.
    The uncertainty about the amount that would accrue for prejudgment interest in
    the circumstances of this case was narrow and did not prevent the respondents
    from fairly determining whether to accept the offer or proceed with the trial.

[27]

The
    real issue faced by the appellants is whether, in accordance with
Rooney
,
    they established that the offer exceeded the Judgment. As indicated, the
    appellants meet this argument on the basis that there is a general
    understanding that interest at 5% should apply to the entire offer. The trial
    judge was unaware of any such general understanding. The appellants have not
    offered any evidence of such a general understanding. The appellants refer to
Igbokwe
    v. Clarke
, [2004] O.J. No. 4667 (S.C.J.) where an offer used wording
    similar to the wording in the offer in the present case. But, that case, if
    anything, suggests that there was a lack of any such general understanding. In
Igbokwe,
in response to the offer, plaintiffs counsel wrote to defendants counsel and
    received a statement that prejudgment interest would be payable on the entire
    amount offered for net damages at the rate of 5% per year. There is nothing in
    the reasons of Jennings J. on costs suggesting that there was any general
    understanding to this effect; it was the terms of the correspondence that
    established the interest rate.

[28]

In
    this case, the Judgment and the offer were sufficiently close that only by
    making some arbitrary distribution of interest could the appellants establish
    that their offer exceeded the Judgment. They have not met the burden of proof
    imposed by rule 49.10(3):
Onisiforou v. Rose
(1998), 41 O.R. (3d) 737
    (C.A.), at p. 740.

Relevant Considerations for Setting the Costs

[29]

The
    appellants submit that even if their offer was not shown to have exceeded the
    Judgment, the trial judge erred in awarding the respondents costs on a partial
    indemnity basis without regard to the terms of the offer and the amount of the
    award.

[30]

It
    is only where a plaintiffs judgment is as favourable as or less favourable
    than the terms of the offer to settle that the defendant is entitled to costs
    in accordance with rule 49.10(2) unless the court orders otherwise. This
    court has narrowly construed this exception and the defendant will almost
    always be entitled to the benefit of rule 49.10 where the defendants offer complies
    with rule 49.10. A narrow construction of the exception underlies the high
    interest in encouraging settlement of cases: see
Niagara Structural Steel
    (St. Catherines) Ltd v. W.D. Laflamme Ltd.
(1987), 58 O.R. (3d) 773 (C.A.),
    at p. 777 and
Starkman v. Starkman
(1990), 75 O.R. (2d) 19 (C.A.), at p.
    27. As Morden J.A. said at p. 777 in
Niagara Structural Steel
:

[R]esort should only be had to the exception where, after
    giving proper weight to the policy of the general rule, and the importance of
    reasonable predictability and the even application of the rule, the interests
    of justice require a departure.

[31]

I
    agree with the respondents that there is no near miss policy.  A party that
    comes close to meeting the judgment is not thereby entitled to an award of
    costs as if they did provide a successful offer. This point was made clear in
PreMD
    Inc. v. Ogilvy Renault LLP
, 2013 ONCA 412 where the court applied the
    reasoning of
Niagara Structural Steel
and held, at para. 106, that a
    court should depart from rule 49.10 only in exceptional circumstances, where
    the interests of justice require a departure.

[32]

For
    the appellants to succeed they must show that the trial judge erred in
    principle in respect to other aspects of Rules 49 and 57. In my view, she did.
    First, the trial judge gave no consideration to rule 49.13 which provides that
    despite, among other things, rule 49.10, the court, in exercising its
    discretion with respect to costs, may take into account any offer to settle
    made in writing, the date the offer was made and the terms of the offer. The
    trial judge gave lengthy reasons in considering the factors set out in Rule 57.
    She dealt at length with rule 49.10. But she made no mention of rule 49.13.
    Given that the offer to settle was virtually the same as the Judgment, this was
    a case where the court had to consider the impact of rule 49.13.

[33]

As
    this court pointed out in
Lawson v. Viersen
, 2012 ONCA 25, at para.
    46, rule 49.13 is not concerned with technical compliance with the requirements
    of rule 49.10. Rather, it calls on the judge to take a more holistic approach.
    The appellants complied with the spirit of Rule 49 even if they failed for
    technical reasons to provide an offer that exceeded the Judgment. As held in
Lawson
,
    at para. 49, this was the type of offer that ought to have been given
    considerable weight in arriving at a costs award.

[34]

Second,
    the trial judge erred in principle in her approach to rule 57.01(1)(a), which asks
    the trial court to consider the amount claimed and the amount recovered in the
    proceeding. The trial judge recognized that the jury preferred the defence
    theory of the case but she gave that factor no weight. Rather, she relied upon
    her own view of what the case was worth. As she put it in para. 38 of her
    reasons:

There is no doubt that the amount recovered by the Plaintiffs
    in the proceedings falls well short of the amount claimed. However, even in
    closing submissions before the jury, defence counsel acknowledged that if the
    jury did not accept that Amira Elbakhiet suffered minor injury in the accident,
    and believed that Amira Elbakhiet's complaints were caused by the accident, an
    appropriate range of general damages would fall between $70,000 and $90,000. In
    view of the verdict, it is apparent the jury preferred the Defendants' theory
    of the case.
From the Plaintiffs' perspective, however, based on reputable
    and ample medical opinion, this case was potentially worth considerably more
    than the jury ultimately awarded. In light of the body of medical opinion
    supporting the Plaintiffs' cause, I would not exercise my discretion to
    penalize the Plaintiffs in costs for pursuing the case with the degree of care
    and attention it clearly demanded.
[Emphasis added.]

[35]

The
    respondents sought damages of approximately $1.9 million, most of it in
    relation to loss of future earnings and cost of future care totalling
    approximately $1.6 million. The jury awards for those items were approximately
    $94,000. The amounts claimed and the amounts recovered were completely
    different. Rule 57.01 required those facts to be taken into consideration, not
    discounted because the trial judge believed the case was worth potentially
    more. It was not fair and reasonable to award the respondents costs of almost
    $580,000 for a claim the jury valued at just under $145,000.

[36]

In
    my view, because of these errors, the trial courts decision on costs cannot
    stand. The trial judge made an error in principle in failing to give any
    consideration to the offers to settle and her award is wholly disproportionate
    to the amounts recovered. The trial judges decision to simply award the costs
    sought by the respondents failed to give any consideration to what amount would
    be fair and reasonable.

Proper Costs Award

[37]

The
    appellants submit that the costs award should be set aside and an order made
    awarding the appellants their costs in an amount offsetting the amount of the Judgment
    and the respondents partial indemnity costs to the date of the second offer to
    settle. In my view, this submission gives undue weight to the offer to settle
    and fails to take into account any of the other matters to be considered under Rule
    57, which were resolved against the appellants.

[38]

I
    would allow the appeal and reduce the costs to be paid by the appellants to
    $100,000. In my view, this amount takes into consideration all the factors to
    be considered under Rules 49 and 57, including the complexity of the matter and
    the manner in which the litigation was conducted, and in particular that the
    offer to settle was virtually the same as the Judgment. This amount is more
    consistent with the objectives of fairness and reasonableness and especially
    gives some attention to the need for some proportionality.

DISPOSITION

[39]

Accordingly,
    I would allow the appeal, set aside the costs order made by the trial judge and
    reduce the award for costs to $100,000, inclusive of disbursements and HST.
    There was divided success on the appeal and I would order no costs of the
    appeal.

Released: KF July 11, 2014

M. Rosenberg J.A.

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

I agree. M. Tulloch
    J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Ferreira v. Esteireiro, 2014 ONCA 523

DATE: 20140704

DOCKET: C58421

Feldman, MacPherson and Cronk JJ.A.

BETWEEN

Maria Alida Ferreira

Appellant (Applicant)

and

Joao (John) Carlos Esteireiro

Respondent (Respondent)

Jeanie M. DeMarco, for the appellant

Judith M. Nicoll, for the respondent

Heard: July 2, 2014

On appeal from the order of Justice Suzanne M. Stevenson of
    the Superior Court of Justice, dated December 23, 2013.

ENDORSEMENT

[1]

The appellant, Maria Alida Ferreira, appeals from the order of Stevenson
    J. of the Superior Court of Justice (the Motions Judge), dated December 23,
    2013.  By that order, the Motions Judge granted summary judgment in favour of
    the respondent, Joao (John) Carlos Esteireiro, dismissed the appellants motion
    for various forms of relief, lifted the stay order of Kiteley J. of the
    Superior Court of Justice, dated October 9, 2013, described below, and awarded
    costs to the respondent in the total amount of $15,000, among other relief.

[2]

This matrimonial dispute has a tortured and troubling history.  In
    brief, the parties married in Las Vegas in 1995 and again in South Africa in
    1996.  They separated in 2005.  There are no children of the marriage.

[3]

In November 2005, the parties entered into a separation agreement (the
    Agreement), which provided for lump sum and periodic spousal support to be
    paid by the respondent to the appellant, among other matters.  Under the
    Agreement, the appellants spousal support was to terminate on the happening of
    specified events, including if she entered into a relationship resembling
    marriage.

[4]

The respondent paid periodic support, in the amount of $12,500 per
    month, from March 2006 to May 2012, whereupon he ceased making support payments
    on the basis of his belief that the appellant was in a relationship resembling
    marriage, thus terminating his support obligations under the Agreement.

[5]

The appellants ensuing application for relief was stayed by the court
    because the Agreement contained an arbitration/mediation dispute resolution
    mechanism.  An arbitration was eventually held before an arbitrator nominated
    by the appellant.  The arbitrator ruled in favour of the respondent, concluding
    that the appellant had entered into post-separation relationships resembling
    marriage at two different times, with two different men, thus triggering a
    spousal support termination event under the Agreement.  She ordered the
    appellant to reimburse the respondent for overpaid spousal support and
    subsequently awarded costs to the respondent.

[6]

A flurry of litigation soon followed.  The appellant sought leave to
    appeal the arbitral award under s. 45(1) of the
Arbitration Act, 1991
,
    S.O. 1991 c.17 (the Act).  She also sought to review the arbitral awards
    under s. 46 of the Act.  By order dated July 5, 2013, Mesbur J. of the Superior
    Court of Justice dismissed the appellants leave motion.

[7]

On July 25, 2013, the appellant commenced a fresh application  the
    subject of this appeal  in which she sought various relief, including an order
    setting aside the main arbitral award and the arbitrators costs award, as well
    as certain declaratory relief (the 2013 Application).

[8]

For his part, the respondent moved for a court order enforcing the
    substantive arbitral award.  The appellant opposed the motion on grounds that
    included some of those raised on her unsuccessful leave motion.  By order dated
    August 16, 2013, Sachs J. of the Superior Court of Justice granted the
    respondents enforcement motion.

[9]

The appellant then sought a reattendance before Sachs J., ostensibly to
    clarify aspects of the enforcement decision.  Her request for relief on the
    reattendance motion was denied by Sachs J.  In her reasons, dated September 21,
    2013, Sachs J. described the reattendance motion as entirely inappropriate
    and as a thinly disguised attempt to reargue the same issues that were argued
    before her on the original enforcement motion.

[10]

The
    respondent also moved for an order enforcing the arbitrators costs award and
    for security for costs.  By order dated October 9, 2013, Kiteley J. of the
    Superior Court of Justice granted the relief sought, but stayed the enforcement
    of her order pending disposition of a motion for summary judgment brought by
    the respondent.

[11]

As
    we have said, the Motions Judge granted the respondents motion for summary
    judgment and dismissed the appellants 2013 Application as an abuse of the
    court process.  In her detailed reasons, the Motions Judge made three critical
    findings.  First, she found there was no genuine issue requiring a trial.
    Second, she held that the appellants 2013 Application was an abuse of process
    because the issues raised in it had already been litigated and determined on
    the leave motion before Mesbur J.  The appellant, therefore, was simply
    attempting to relitigate the same issues.  Finally, and in any event, she ruled
    that the appellants 2013 Application was commenced outside the time limits set
    under s. 47(1) of the Act.

[12]

The
    appellant now appeals to this court.  She attacks the Motions Judges decision on
    numerous grounds.  In our view, it is unnecessary to address those grounds in
    any detail.  The issues raised on appeal concern matters advanced and addressed
    in previous proceedings between the parties including, especially, in the
    proceedings before Mesbur J. and Sachs J., described above.

[13]

During
    oral argument before this court, the appellant maintained that the arbitrator
    failed to rule on a threshold jurisdictional question, namely, whether the
    preconditions to the invocation of the arbitration provisions of the Agreement
    had been satisfied by the respondent.  The appellant contends that, to date,
    there has been no ruling on this question.

[14]

This
    complaint is unsustainable.  In our view, the appellants amended statement of
    issues for the arbitration did not clearly raise this jurisdictional question.
    Further, the arbitration proceeded by reason of a court order.  The issue of
    the arbitrators jurisdiction to determine the issues referred to her was
    subsumed in the arbitration process, in which the appellant fully
    participated.  Moreover, the matter of the arbitrators jurisdiction to conduct
    the arbitration was not raised before the Motions Judge.

[15]

In
    our view, the extensive record on appeal overwhelmingly demonstrates that the appellant
    is dissatisfied with the outcome of the arbitration and is unrelenting in her
    determination to overturn the arbitral awards made against her.  To that end,
    she has raised a host of issues in proceedings before four different judges of
    the Superior Court, with the sole purpose of avoiding enforcement of the
    arbitrators rulings.  We are compelled to observe that this strategy is both
    misconceived and duplicative of the courts process.

[16]

The
    decisions of Mesbur J. and Sachs J. are final.  The vast majority of the issues
    raised in the appellants 2013 Application and argued before the Motions Judge
    were raised before and adjudicated upon by Mesbur J.  In any event, the Motions
    Judge based her decision not only on
res judicata
or issue estoppel
    but, as well, on her own view that they had no merit.  To the extent that it
    can be said that any new issues were pursued before her, the Motions Judge
    addressed those issues directly and also rejected the appellants position on
    each of them.

[17]

We
    see no basis for appellate interference with the Motions Judges decision.
    Indeed, we agree with it.  In particular, we agree with her conclusion that
    there is no genuine issue requiring a trial in this matter and that the
    appellants repeated attempts to relitigate issues previously determined by the
    courts is an abuse of the courts process.  We also agree, in any event, that the
    appellants 2013 Application is caught by s. 47(1) of the Act.  The appellant
    commenced her 2013 Application outside the 30-day time limit provided for under
    s. 47(1).  (The main arbitral award was made on May 23, 2013, yet the appellant
    did not commence her 2013 Application until July 25, 2013.)  The 2013 Application,
    therefore, was time-barred.

[18]

For
    these reasons, the appeal is dismissed.

[19]

The
    respondent is entitled to his costs of this appeal.  Having regard to the
    outcome on appeal and the appellants conduct throughout this litigation,
    discussed above, the respondents costs are fixed in the total amount of $10,000,
    inclusive of disbursements and H.S.T.

[20]

Finally,
    the stay order of LaForme J.A. of this court, set out in paragraph four of his
    order dated February 18, 2014, is set aside, effective 45 days from the date of
    the release of these reasons.  A copy of LaForme J.A.s order is attached
    hereto, as Schedule A to these reasons.

K. Feldman J.A.

J.C. MacPherson J.A.

E.A. Cronk J.A.


COURT OF APPEAL FOR ONTARIO

CITATION: Foulidis v. Baker, 2014 ONCA 529

DATE: 20140708

DOCKET: C56528

MacPherson, Watt and Benotto JJ.A.

BETWEEN

George Foulidis

Plaintiff (Appellant)

and

Bruce Baker

Defendant (Respondent)

Paul J. Pape and Andrea M. Bolieiro, for the appellant

Gavin Tighe and Stephen Thiele, for the respondent

Heard: May 20, 2014

On appeal from the judgment of Justice John A. B.
    Macdonald of the Superior Court of Justice, sitting without a jury, dated December
    27, 2012, with reasons reported at 2012 ONSC 7295.

Watt J.A.:

[1]

Untendered service contracts attracted the attention of at least two
    candidates for office in the Toronto municipal elections of 2010. And what the
    candidates said about untendered service contracts attracted two actions for
    libel.

[2]

Both actions failed at trial. The unsuccessful plaintiff in both actions
    appeals. These reasons, and those released concurrently in the companion appeal
    of
Foulidis v. Ford
(C56537)
[1]
,
    explain why both appeals fail.

THE BACKGROUND FACTS

[3]

First, some background about the principals, the contract and the
    allegedly libellous letter.

The Principals

[4]

The Foulidis family has been in the restaurant business for many years.
    Through their company, Tuggs Inc. (Tuggs), the family operated the Boardwalk
    Café in the Beaches area of Toronto under a long-term lease with the City. The
    lease was to expire in 2007.

[5]

George Foulidis was not an officer or director of Tuggs but was involved
    in the operation of the Boardwalk Café. He was the family member who sought for
    Tuggs a new and exclusive long-term lease to operate the Boardwalk Café and
    other concessions after the prior lease expired in 2007.

[6]

Bruce Baker was a resident of the Beaches who sought election as a
    councillor for Ward 32 in the municipal elections in the fall of 2010.

The Original Lease

[7]

In 1987, Tuggs was the successful bidder for a long-term (20 year)
    exclusive lease to operate food and beverage facilities, including the
    Boardwalk Café, along the eastern Beaches area of Toronto. Tuggs agreed to spend
    $2,000,000 to improve the Boardwalk Café premises and other concession
    facilities.

Lease Expiry and Negotiation

[8]

During the fall of 2006, George Foulidis prepared and submitted a
    proposal on behalf of Tuggs to Parks staff of the City promising a further investment
    of $2,000,000 in the Boardwalk Café and concessions in return for another
    long-term lease to operate those facilities. Among other things, Foulidis
    contacted the office of the incumbent councillor for the Beaches, Sandra
    Bussin, to solicit her support for the Tuggs bid. Some councillors opposed
    Tuggs application because it did not involve an RFP (Request for Proposals)
    process.

[9]

In early 2007, City Council voted to approve the Tuggs proposal and
    directed Parks staff to begin negotiations with Tuggs on a new lease that was
    to include certain conditions. As it turned out, negotiations would extend over
    a period of three years.

The Media Interest

[10]

The
    decision to proceed with the untendered Tuggs proposal attracted media
    attention. The controversy continued into the election year, 2010. Some
    articles drew a connection between contributions to councillor Bussins earlier
    campaign for re-election and her support of the Tuggs proposal. Some
    commentators went so far as to suggest that a police investigation should be
    pursued.

[11]

Neither
    Foulidis nor Tuggs made any contributions to councillor Bussins campaign.

The Baker Campaign and the Tuggs
    Deal

[12]

On
    January 4, 2010 Bruce Baker filed his nomination papers as a candidate for City
    Council in the election to be held in the fall of 2010. By April 2010, Baker
    made the Tuggs deal an issue in his campaign.

[13]

A
    City staff member raised issues about the untendered nature of the Tuggs deal.
    On April 28, 2010 the Government Management Committee of City Council referred
    the issue to Council for further consideration, but made no recommendation
    about the course to be followed. Bruce Baker attended the Committee Meeting.

The Article in Toronto Life

[14]

On
    May 11, 2010 an article on election finance donations was published by
Toronto
    Life
. The article made specific reference to the contributions of the
    Foulidis family and their friends to Sandra Bussins 2006 election campaign.
    The article noted that the contributions and campaign were shortly before the
    Tuggs lease was extended by Council in 2007.

The Malamas Letter

[15]

On
    the evening of May 11, 2010 Baker got an email from the same City staff member
    who had questioned the propriety of the untendered lease agreement with Tuggs
    before the Government Management Committee on April 28, 2010. The email
    contained no original text but attached a letter from William Malamas to a
    Toronto Star newspaper reporter.

[16]

The
    Malamas letter read:

I read your article, published in the Toronto Star on April 29,
    2010. I know George Foulidis well.

George Foulidis has disclosed to me,
repeatedly
,
    how he manages to obtain favours from the Toronto City Hall, in connection with
    his lease in the beaches.

Mr. Foulidis has
specifically
told
    me, that he manages to obtain, whatever favours he wants from the City, by
    finding the key people who are responsible in overseeing his lease with the
    City.

Mr. Foulidis has specifically and repeatedly told me that he
pays
, directly or indirectly, the key people who make
    decisions about his lease.

Mr. Foulidis also has told me that he attends fundraising
    events for councillors. He makes contributions to their election campaigns. He
    hires lobbyists who lobby councillors and/or key people influential with the
    City, in order to obtain their support in obtaining favours from the City, in
    connection with his lease.

Mr. Foulidis has
specifically
told
    me about his connections with the former councillor of the area and how he,
always
, was able to obtain his support in connection
    with his lease.

I know nothing as to how he obtained the support of the
    present councillor for the area and/or how he obtained the support of the other
    people from the City who oversee his lease, at the present time.

However, judging from what Mr. Foulidis
    has told me about the actions that he takes to obtain support from the key
    people who oversee his lease
, I believe that the support he has,
presently
, obtained is not genuine.

In my opinion the RCMP,
not the Toronto
    Police
, should be called in, to investigate as to how Mr. Foulidis has
    obtained support from the City of Toronto, throughout the last twenty years, in
    connection with his lease and all the favours that he has obtained from the
    City, in connection with his lease, and the means that he used to obtain such
    favours.

If you wish to further discuss this matter with me, please
    contact me, I am faxing a copy of this letter to the persons or city officials
    noted below.

Yours truly,

William Malamas [Emphasis in original.]

[17]

Baker
    did not know William Malamas and made no effort to contact him despite
    inclusion in the Malamas letter of all relevant contact information.

[18]

The
    Malamas letter to the Toronto Star reporter indicated that copies of it had
    been sent to the Mayor and seven incumbent councillors. Baker assumed that
    everyone shown as being sent a copy had received one.

The Baker Letter

[19]

City
    Council was to vote on the Tuggs lease on May 12, 2010. On that day, Baker
    delivered a letter to the City Clerk. The letter, marked confidential, was
    addressed to the Mayor and councillors. To ensure confidentiality, staff in the
    City Clerks office transferred the letter to purple paper and delivered it to
    the intended recipients.

[20]

Bakers
    letter refers to but does not attach the letter from William Malamas and the
    article in
Toronto Life
. Baker sought a full audit of election finance
    donations and a full investigation of the allegations by Toronto Police.

[21]

The
    Baker letter, addressed to councillors and Mayor Miller, was in these terms:

I am a beach resident fighting the lease agreement between the
    City of Toronto and Tuggs Inc.

As a concerned beach resident and upon learning of new
    revelations over the deal between the City of Toronto and Tuggs Inc., I am
    calling on you to call in the Toronto Police to investigate.

What has transpired between the City of Toronto and Tuggs Incorporated-aka:
    Boardwalk Café- has new meaning when a letter was received by residents
    fighting Tuggs Incs expansion plans that alleges that Tuggs Incs owner,
    George Foulidis, has influenced Toronto City Hall for favors.

The letter was originally sent to Toronto Star reporter Paul
    Moloney and copied to residents fighting the expansion plans. The letter was
    sent from Mr. William Malamas from Richmond Hill.

Aside from the letter received from Mr. Malamas, the Toronto
    Life, May 11
th
issue of 2010 raises further questions regarding
    election finance donations. Enough to ask for a full audit and a full
    investigation into the allegations.

[22]

When
    Baker delivered his letter to the City Clerks office, he did not ask whether
    the Malamas letter had been delivered to the Mayor and councillors.

Approval of the Lease

[23]

At
    its meeting on May 12, 2010 City Council approved the Tuggs lease to operate
    the Boardwalk Café and other concessions in the Beaches area for another 20
    years.

The Findings of the Trial Judge

[24]

The
    trial judge was satisfied that:

i.

Baker wrote and published the letter;

ii.

the letter referred to Foulidis by name and through his association with
    Tuggs; and

iii.

the letter was defamatory of George Foulidis.

The trial judge described the sting of the libel in
    these terms:

[19] The particular sting of the libel is the statement that
    he influenced City government for favours, inferentially in respect of Tuggs
    Inc.s contract with the City, in a manner which merits a police investigation.
    The letter is also defamatory in asserting that there are questions about Mr.
    Foulidis election finance donations, which, inferentially, are related to the
    aforesaid influence.

[25]

The
    trial judge then considered the three defences advanced by counsel for Baker:

i.

fair comment;

ii.

qualified privilege; and

iii.

responsible communication.

[26]

The
    trial judge concluded that some of the contents of the letter were protected by
    fair comment, but others, which were assertions of fact, were beyond the reach
    of the fair comment defence. He deferred consideration of the contents
    protected by fair comment until he discussed express malice later in his
    reasons.

[27]

The
    trial judge concluded that the Baker letter had been delivered to City Council
    on an occasion of qualified privilege. He concluded:

[67] I conclude that the defendant had a legitimate interest in
    directing his letter to City Council for the reasons he did, calling for
    investigations into serious allegations of unknown and, for him,
    unascertainable reliability which were reasonably seen as putting in question
    the integrity of the governmental processes for which City Council was
    responsible. The members of City Council who received the Baker letter had a
    corresponding interest and, given the serious nature of the allegations which
    impugned the integrity of the processes for which Council was responsible, a
    duty to receive it. Leaving aside the issue of express malice, I conclude that
    the Baker letter was delivered on an occasion of qualified privilege.

[28]

The
    judge rejected the defence of responsible communication on a matter of public
    interest for several reasons that he expressed in these terms:

[70] In my view, there are several related reasons why this
    defence is not available to the defendant. This case does not involve either
    traditional media or new media dissemination of information. It involves
    communication which is almost antiquated in nature: a letter, delivered by
    hand. The letter was not published generally, as is the case with media
    publication, but to a select and focused few. Further, in a case of widespread
    media publication, the defence of qualified privilege is often unavailable.
    That was a reason given in
Grant v. Torstar
[[2009] 3 S.C.R. 640] for
    the development of this new defence. In this case, the defence of qualified
    privilege is available to the defendant. In my view, it adds unnecessary
    complexity to this area of the law to hold that this important new defence is
    available to a non-media defendant to whom the defence of qualified privilege
    has been found to apply.

[29]

The
    trial judge considered whether express malice removed Bakers comments from the
    protections afforded by qualified privilege or fair comment. He concluded that
    Foulidis had failed to prove express malice. The trial judge explained:

[75] In my opinion, the plaintiff has failed to prove express
    malice. I wont repeat my findings about why the plaintiff did what he did and
    how that was directed to serving the interests of the public, both in advancing
    the interests of Ward 32 electors and in urging City Council to cause or to
    make inquiries into the Malamas and Toronto Life allegations. These were his dominant
    motives, in my opinion. I am satisfied that any incidental personal gain as a
    candidate or otherwise which might have been derived by the defendant from his
    letter was not in conflict with the duty/interest equation which is the basis
    for my finding that the defendant wrote his letter on an occasion of qualified
    privilege. Similarly, I am satisfied that any incidental personal gain as a
    candidate or otherwise was sufficiently connected to the purpose for which the
    defence of fair comment exists, namely to ensure robust and candid commentary
    on matters of public concern, that it cannot be seen as establishing express
    malice.

[76] The defendant also did not knowingly or recklessly
    disregard the truth of what he stated in his letter. He was careful to refer to
    the content of the Malamas letter and to the Toronto Life election finance
    assertions as allegations. He did not hold them out as truth to be accepted. To
    the contrary, he called for investigation of them. He was neutral about their
    factuality and concerned to have it subjected to inquiry. I have already
    commented on the short period of time he had before City Council would vote,
    and how limited his opportunities were for productive inquiry into the facts.

THE GROUNDS OF APPEAL

[30]

The
    appellant says that the trial judge erred in failing to find that the defence
    of qualified privilege was lost because:

i.

the dominant motive for making the statements contained in the letter
    was malice; or

ii.

the statements were not commensurate with the occasion that gave rise to
    qualified privilege.

[31]

The
    appellant also challenges the costs order made against him. He contends that
    since the action was dismissed on the basis of qualified privilege, which only
    becomes engaged on proof of the defamatory nature of the publication, he should
    not be required to pay the defendants costs.

Ground #1: Was the Baker Letter Reasonably Appropriate to the
    Occasion of Qualified Privilege?

[32]

Several
    features of the background provide the setting for an assessment of this claim
    of error.

The Essential Facts

[33]

Baker
    delivered his letter to the Mayor and members of Council on May 12, 2010, the
    day on which Council was to vote on approval on the sole source contract with
    Tuggs to operate the Boardwalk Café and related concessions. The letter
    referred to but did not enclose the letter sent by William Malamas to a Toronto
    Star reporter and an article published the previous day by Toronto Life magazine.

[34]

In
    his letter, Baker asked or invited Council to do two things:

i.

call in Toronto Police to conduct a full investigation; and

ii.

request a full audit.

regarding election finance donations. Baker marked his
    letter confidential and delivered it to the office of the City Clerk. The
    letter was forwarded to its intended recipients as a confidential document by
    staff in the City Clerks office.

[35]

The
    Malamas letter that Baker received the evening before he sent his letter to the
    Mayor and Council indicated that it (the Malamas letter) had been ccd to the
    Mayor and several members of Council.

The Positions of the Parties

[36]

For
    the appellant, Mr. Pape submits that the occasion that gave rise to the defence
    of qualified privilege was the need for Council to receive timely notification
    of information relevant to the impending vote on approval of the Tuggs
    contract. To be protected by qualified privilege, the Baker letter must be
    reasonably appropriate to achieve the purpose of that occasion.

[37]

Mr.
    Pape says that the Baker letter was not reasonably appropriate to achieve the
    purpose of the occasion. The letter simply repeated previously unsubstantiated
    and unproven allegations of unascertainable reliability from unknown sources.
    The information had already been communicated to several members of Council.
    Some of the allegations, those made in the
Toronto Life
article, were
    already in the public domain. The trial judge erred in considering as
    dispositive Bakers subjective belief that the letter was worthy of consideration
    by Council, rather than applying an objective standard.

[38]

For
    the respondent, Mr. Tighe says the trial judge applied the proper test. His
    finding, which involves a question of mixed fact and law, is entitled to
    deference on appeal. The appellant has demonstrated no palpable and overriding
    error that would warrant our intervention. Baker acted in the interests of the
    electors in Ward 32. He provided timely notice to the decision-makers of
    matters that were relevant to their decision.

The Governing Principles

[39]

The
    controversy here is governed by the application of some basic principles
    applicable to the defence of qualified privilege and the circumstances that may
    render that defence unavailable in answer to a defamation claim.

[40]

First,
    qualified privilege attaches to the occasion on which a communication was made,
    not to the communication itself:
Hill v. Church of Scientology of Toronto
,
    [1995] 2 S.C.R. 1130, at para. 143;
RTC Engineering Consultants Ltd. v.
    Ontario (Ministry of the Solicitor General & Correctional Services-Office
    of Fire Marshall)
(2002), 58 O.R. (3d) 726 (C.A.), at para. 14; and
Botiuk
    v. Toronto Free Press Publications Ltd.,
[1995] 3 S.C.R. 3, at para. 78.

[41]

Second,
    on an occasion of qualified privilege, one person may defame another without
    attracting liability for defamation. The law presumes that the defamatory
    statement was made honestly and in good faith:
RTC Engineering
, at
    para. 14. Said somewhat differently, the legal effect of the defence of
    qualified privilege is to rebut the inference, one that naturally emerges from
    the publication of defamatory words, that they were spoken with malice:
Hill
,
    at para. 144.

[42]

Third,
    as the term qualified privilege would itself suggest, the privilege is not
    absolute:
RTC Engineering
, at para. 18.

[43]

Fourth,
    qualified privilege may be defeated when the information communicated in the
    statement is not reasonably appropriate in the context of the circumstances
    existing on the occasion when the information was given:
Hill
, at
    paras. 146-147;
RTC Engineering
, at para. 18;
Botiuk
, at
    para. 80; and
Douglas v. Tucker
, [1952] 1 S.C.R. 275, at p. 286.

The Principles Applied

[44]

As
    I will explain, two principal reasons persuade me not to give effect to this
    ground of appeal.

[45]

First,
    the trial judges finding that the Baker letter was reasonably appropriate in
    the context of the circumstances of the occasion when the information was given
    is pre-eminently a finding of fact that is subject to deference in this court.
    The appellant has not pointed to any palpable and overriding error made by the
    trial judge in reaching his conclusion. Nor has the appellant identified any
    legal error in the test applied, which was objective rather than subjective as
    the appellant contends.

[46]

Second,
    the timing and manner of the communication were reasonably appropriate in the
    context of the circumstances that existed on the occasion when the information
    was provided. The letter was sent to a restricted constituency  the parties
    who would make the decision about the contract. The letter was marked and
    treated as confidential and delivered the day on which the decision was to be
    made. The letter was not disseminated to the world at large, as for example, by
    dispatch to media organizations.

Ground #2: Alleged Error in Failure to Find Malice

[47]

The
    second error alleged by the appellant advances a discrete basis  which, if
    accepted, would eliminate the defence of qualified privilege advanced at trial.

The Additional Facts

[48]

In
    connection with this ground of appeal, it is essential to keep in mind one
    additional feature of the background. The Malamas letter Baker received on the
    evening of May 11, 2010, and to which he referred in his confidential letter to
    the Mayor and Council, contained contact information for Malamas  his
    residential and email address and his telephone number. Malamas lived in a
    Toronto suburb close to the northern boundary of the city.

The Positions of the Parties

[49]

For
    the appellant, Mr. Pape submits that the trial judge erred in failing to find
    that the defence of qualified privilege was defeated by malice on the part of
    Baker. Malice can be established by proof of a knowing or reckless disregard
    for the truth, or by proof of an ulterior or indirect motive. A plaintiff can
    establish malice by drawing inferences from the language of the allegedly
    defamatory communication or by introducing extrinsic evidence.

[50]

In
    this case, Mr. Pape says, the trial judge erred in failing to draw the required
    inferences from the uncontroverted facts. Baker made no effort to verify
    accusations that he acknowledged were shocking and unbelievable. The
    allegations were made by a person with whom Baker had had no previous dealings
    about a person of whom Baker thought favourably. That Baker considered and
    characterized Malamas letter as mere allegations does not warrant a finding
    that Baker was not reckless with respect to the truth of those allegations.

[51]

For
    the respondent, Mr. Tighe submits that on an occasion of qualified privilege,
    we begin with a presumption of good faith. Qualified privilege rebuts the
    inference of malice that would normally arise from the publication of
    defamatory words. It is the burden of a plaintiff to prove malice, that is to
    say, that the communication was animated by ill-will or indirect motive. The burden
    is an onerous one to discharge and requires proof that the defendant knew he
    was not telling the truth or that he was at least reckless about the truth of
    his comments.

[52]

In
    this case, Mr. Tighe says, the record is barren of any evidence of express
    malice. The parties did not know one another. Baker had a favourable impression
    of Foulidis from what he had heard of him. Bakers failure to contact Malamas
    to verify his allegations would have made no difference and cannot ground a
    finding of reckless disregard for the truth and thus a finding of malice.

The Governing Principles

[53]

Several
    principles furnish the guidance necessary to a just determination of this
    ground of appeal.

[54]

First,
    qualified privilege may be lost if the dominant motive for the statement was
    malice:
Hill
, at para. 144;
RTC Engineering
, at para. 18; and
Botiuk
, at para. 79.

[55]

Second,
    to defeat a defence of qualified privilege, the dominant motive for publishing
    the statement must be actual or express malice:
Hill
, at para. 144;
Botiuk
,
    at para. 79; and
Horrocks v. Lowe
, [1975] A.C. 135 (H.L.), at p. 149.

[56]

Third,
    malice means spite or ill-will, but also includes any indirect motive or
    ulterior purpose that conflicts with the sense of duty or mutual interest that
    the occasion giving rise to qualified privilege created:
Hill
, at
    para. 145; and
Botiuk
, at para. 79.

[57]

Fourth,
    malice can also be established by showing a defendant spoke or wrote
    dishonestly or in knowing or reckless disregard for the truth:
Hill
,
    at para. 145;
Botiuk
, at para. 79; and
RTC Engineering
, at
    para. 18.

[58]

Further,
    the onus rests on the plaintiff to prove malice by inference, extrinsic
    evidence, or both. This follows from the effect of qualified privilege, which
    is to rebut the inference of malice that arises from the fact of publishing
    defamatory words:
Hill
, at para. 144; Raymond E. Brown,
Brown on
    Defamation,
loose leaf, 2nd ed. (Toronto: Carswell, 2011), at p. 16-2.

[59]

Finally,
    whether a plaintiff has established malice to rebut a defence of qualified
    privilege is a question of mixed fact and law, heavily dependent on the facts
    disclosed by the evidence adduced at trial and subject to the palpable and
    overriding standard of review on appeal:
Chohan v. Cadsky
, 2009 ABCA
    334, 464 A.R. 334, leave to appeal to S.C.C. refused, [2009] S.C.C.A. No. 496,
    at para. 87; and
Cimolai v. Hall
, 2007 BCCA 225, 44 C.P.C. (6th) 389, at
    para. 30.

The Principles Applied

[60]

For
    several reasons, I would reject this ground of appeal.

[61]

First,
    after correctly articulating the test for malice and assigning the onus of
    proof to the plaintiff, the trial judge made an express finding, anchored in
    the evidence adduced at trial, that the plaintiff had failed to prove malice.
    This conclusion is heavily dependent on findings of fact made by the trial
    judge and is subject to review on a standard of palpable and overriding error:
Chohan
,
    at para. 87. The appellant has failed in his quest to identify any such error
    on appeal.

[62]

Second,
    the trial record is barren of any evidence of an existing relationship between
    the parties, all the more so of any animosity or ill-will of Baker towards
    Foulidis. The trial judge expressly found that any incidental personal gain
    Baker might have derived from the letter as a candidate in the upcoming
    municipal elections did not conflict with the duty/interest equation that
    grounded the finding that the letter was sent on an occasion of qualified
    privilege.

[63]

Third,
    while it is true that Baker did not verify the accuracy of the facts that
    generated Malamas allegations, the manner in which he communicated his letter,
    as well as its contents, belied any assertion of malice. Baker did not assert
    that the allegations were anything more than allegations, something that
    warranted investigation. He did not vouch for their truthfulness. His
    communication was designated confidential, sent only to the decision-makers,
    and not disseminated to the electors or population at large.

THE COSTS APPEAL

[64]

The
    appellant also seeks leave to appeal the costs order made against him at trial.

[65]

Counsel
    for the appellant at trial (not Mr. Pape) asked the trial judge to award no
    costs to the defendant despite his success at trial. Counsel submitted that the
    defendant used the Tuggs deal as a political football to advance his campaign
    for a seat on Council. Such an irresponsible use of a private citizen and his
    business for perceived political gain, counsel submitted, warranted denial of
    costs despite the defendants success at trial.

[66]

The
    trial judge recognized that he had discretion to deny costs to a successful
    libel defendant where the words were abusive but not libellous and there was
    reason for the court to express its disapproval of the defendants conduct. The
    trial judge acknowledged a similar discretion in cases, like this, where the
    words were libellous but protected by qualified privilege.

[67]

The
    trial judge refused to deny the defendant his costs. The judge pointed out that
    Baker recognized the importance of verifying the accuracy of the underlying
    allegations. He was careful never to assert their truth. He acted in the public
    interest, not irresponsibly, abusively or offensively.

[68]

It
    is well established that a costs award should be set aside on appeal only if
    the trial judge has erred in principle or has made an award that is plainly
    wrong:
Hamilton v. Open Window Bakery Ltd.
, 2004 SCC 9, [2004] 1
    S.C.R. 303, at para. 27.

[69]

Mr.
    Pape submits that the trial judge erred in awarding Baker his costs. The judge
    failed to take into account Bakers divided success at trial. The letter was
    defamatory. Baker made no effort to verify the truthfulness of the allegations
    contained in the Malamas letter, claims made by an unknown and untested source.
    Further, Bakers subsequent conduct did not include any acknowledgment that the
    allegations were without foundation or any apology to the appellant.

[70]

I
    would not interfere with costs award made by the trial judge. The award
    reflects no error in principle and is not plainly wrong.

CONCLUSION

[71]

For
    these reasons, I would dismiss the appeal in its entirety. The respondents are entitled
    to their costs of the appeal that I would fix, as counsel have agreed, at
    $27,651, inclusive of disbursements and all applicable taxes, for Baker and
    Ford, in the companion appeal, jointly.

Released: July 8, 2014 (JCM)

David Watt
    J.A.

I agree
    J.C. MacPherson J.A.

I agree
    M.L. Benotto J.A.

[1]
The reasons in
Foulidis v. Ford
also explain the basis of our jurisdiction to hear both appeals.