Ontario Court of Appeal Summaries (August 27 – 31, 2018)

September 06, 2018
John Polyzogopoulos

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This was anti-SLAPP week at the Court of Appeal. In 1704604 Ontario Ltd. v. Pointes Protection Association, the Court of Appeal addressed in detail the Protection of Public Participation Act, 2015, which provides defendants to a lawsuit with the option of a pre-trial motion to dismiss the lawsuit on the basis that it constitutes a Strategic Lawsuit Against Public Participation (SLAPP). In this case, 170604 Ontario Ltd. brought an action against Pointes Protection Association and others for breach of contract stemming from a settlement, which allegedly prohibited Pointes and the other defendants from advancing certain claims in subsequent judicial proceedings. Analyzing both the Act in general and the relevant provisions (mainly s. 137.1), the Court found that the plaintiff failed, on grounds of insufficient merit to its lawsuit and on grounds of public interest, to satisfy the court that its action should continue. The Court’s detailed analysis of the two-part test under section 137.1 of the Actwill invariably inform the case law on this section as it develops.

Other cases this week that dealt with defamation and s.137 of the Act included: Fortress Real Developments Inc v Rabidoux, a case stemming from a series of tweets; Veneruzzo v. Storey, which focused on Facebook postings; Platnick v. Bent, which involved a doctor who sued a lawyer who posted an email on the Ontario Trial Lawyers Association “Listserv”; Able Translations Ltd. v. Express International Translations Inc., an action based on an internet post; and Armstrong v. Corus Entertainment Inc., a case about a political candidate who had a 25-year-old criminal conviction.

Pointes Protection is therefore an important decision with which all litigation counsel should become familiar.

Table of Contents

Civil Decisions

Reciprocal Opportunities Incorporated v. Sikh Lehar International Organization, 2018 ONCA 713

Keywords: Court Approved Sale under Receivership, Agreement of Purchase and Sale, Contract, Soundair duties, Sikh Lehar International Organization v. Saini, 2018 ONSC 2839, Sandhu v. Sikh Lehar International Organization, 2017 ONSC 5680, Reciprocal Opportunities Incorporated v. Sikh Lehar International Organization et al., 2018 ONSC 227, Royal Bank of Canada v. Soundair Corp. (1991), 4 O.R. (3d) 1, 83 D.L.R. (4th) 76 (C.A.), HSBC Bank of Canada v. Regal Constellation Hotel (Receiver of) (2004), 71 O.R. (3d) 355, 242 D.L.R. (4th) 689 (C.A.)

Le Feuvre (Re), 2018 ONCA 712

Keywords: Mental Health, Not Criminally Responsible, Centre for Addiction and Mental Health, Detention Order

Conklin v. Ontario, 2018 ONCA 726

Keywords: Breach of Duty of Care, Amended Statement of Claim Particulars, Nash v. Ontario (1995), 27 O.R. (3d) 1 (C.A.), Persaud v. Ontario (Attorney General), [2008] O.J. No. 2953 (S.C.J.)

Riga v. Ontario Lottery and Gaming Corporation, 2018 ONCA 714

Keywords: Frivolous and Vexatious Claims, Rules of Civil Procedure, R.R.O. 1990, Reg. 194 r. 2.1.01

Mercado Capital Corporation v Qureshi, 2018 ONCA 711

Keywords: Bankruptcy and Insolvency, Transfers at Undervalue, Fraudulent Conveyances, Family Law, Net Family Property, Matrimonial Home, Joint Ownership, Bankruptcy and Insolvency Act, RSC 1985, c. B-3, ss. 38, 96(1)(b)(i), Family Law Act, RSO 1990, c F.3

Jeffery v. London Life Insurance Company, 2018 ONCA 716

Keywords: Civil Procedure, Class Actions, Costs, Class Counsel Fees, Solicitor’s Liens, Law Foundation Levy, Orders, Functus Officio, Class Proceedings Act, 1992, S.O. 1992, c. 6, ss 32(3), Ontario Regulation 771/92: Class Proceedings, s. 10(2), Insurance Companies Act S.C. 1991, c. 47, Law Society Act, R.S.O. 1990, c. L.8, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, Doucet-Boudreau v. Nova Scotia (Minister of Education), 2003 SCC 62, Hislop v. Canada, 2009 ONCA 354, D.G. v. A.F., 2015 ONCA 290, Doucet-Boudreau v. Nova Scotia (Minister of Education), 2003 SCC 62

1704604 Ontario Ltd. v. Pointes Protection Association, 2018 ONCA 685

Keywords: Freedom of Expression, Strategic Lawsuits Against Public Participation (“SLAPP”), Protection of Public Participation Act, 2015, SO 2015, c 23, Courts of Justice Act, RSO 1990, c C.43, s. 137.1

Fortress Real Developments Inc v Rabidoux, 2018 ONCA 686

Keywords: Defamation, Public Interest, Costs, Full Indemnity, Courts of Justice Act, RSO 1990, c C.43, s 137.1, Rules of Civil Procedure, RRO 1990, Reg 194, r 57.01, 1704604 Ontario Ltd v Pointes Protection Association, 2018 ONCA 685

Platnick v. Bent, 2018 ONCA 687

Keywords: Libel, Defamation, Freedom of Expression, Public Interest, Courts of Justice Act, RSO 1990, c C 43 s. 137.1, Charter of Rights and Freedoms, 1704604 Ontario Ltd v Pointes Protection Association, 2018 ONCA 685, Grant v Torstar Corp, 2009 SCC 61

Able Translations Ltd. v. Express International Translations Inc., 2018 ONCA 690

Keywords: Defamation, Internet Blog Posts, Court of Justice Act, R.S.O. 1990, c. C.43, Grant v. Torstar Corp, 2009 SCC 61, [2009] 3 S.C.R. 640, Botiuk v. Toronto Free Press Publications Ltd. [1995] 3 S.C.R. 3, WIC Radio Ltd. v. Simpson, 2008 SCC 40, [2008] 2 S.C.R. 420, 1704604 Ontario Ltd. v. Pointes Protection Association, 2018 ONCA 685

SFC litigation Trust v. Chan, 2018 ONCA 710

Keywords: Stay Pending Appeal, Enforcement Proceedings, Interests of Justice, Rules of Civil Procedure, RRO 1990, Reg 194, r. 63.01, Antunes v. Limen Structures Ltd., 2016 ONCA 61, Ryan v. Laidlaw Transportation Ltd. (1994), 19 O.R. (3d) 547 (C.A.), SA Horeca Financial Services v. Light, 2014 ONCA 811, R v. Oland, 2017 SCC 17

The Law Society of Upper Canada v. Nguyen, 2018 ONCA 709

[Sharpe, Juriansz and Roberts JJ.A.]

Keywords: Real Estate Law, Mortgage Fraud, Disciplinary Hearing,

Groia v. The Law Society of Upper Canada, 2016 ONCA 471, 131 O.R. (3d) 1,

The Law Society of Upper Canada v. Durno, 2013 ONSLAP 42, aff’d 2014 ONSC 2993 (Div Ct), R. v. Théroux, [1993] 2 S.C.R. 5

Veneruzzo v. Storey, 2018 ONCA 688

Keywords: Libel, Defamation, Costs, Public Interest, SLAPP, Courts of Justice Act, RSO 1990, c C 43, s. 137.1, 1704604 Ontario Ltd v Pointes Protection Association, 2018 ONCA 685, Grant v Torstar Corp, 2009 SCC 61

Armstrong v. Corus Entertainment Inc., 2018 ONCA 689

Keywords: Defamation, Responsible Communication, Matters of Public Interest, Freedom of Expression, Court of Justice Act, R.S.O. 1990, c. C.43, s. 137.1, Libel and Slander Act, R.S.O. 1990, c. L.12, s. 5(1), 1704604 Ontario Ltd. v. Pointes Protection Association, 2018 ONCA 685, Grant v. Torstar Corp., 2009 SCC 61, Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130

Destefano v. Gerry, 2018 ONCA 701

Keywords: Jurisdiction, Interlocutory, Courts of Justice Act, s. 19(1)

Abdul v. Ontario College of Pharmacists, 2018 ONCA 699

Keywords: Judicial Review, Procedural Fairness, Jurisdiction, Professional Misconduct, Professional Discipline, Health Professions Procedural Code, ss. 25, 28 and 75, Sazant v. College of Physicians and Surgeons of Ontario, 2012 ONCA 727, Katzman v. Ontario College of Pharmacists (2002), 223 DLR (4th) 371, Volochay v. College of Massage Therapists of Ontario, 2012 ONCA 541

Winter v. Sherman Estate, 2018 ONCA 703

Keywords: Fiduciary Duty, ad hoc Fiduciary Duty, Summary Judgment, Abuse of Process, res judicata, Issue Estoppel, Elder Advocates of Alberta Society v Alberta, 2011 SCC 24, Danyluk v Ainsworth Technologies Inc, 2001 SCC 44, Toronto (City) v CUPE, Local 79, 2003 SCC 63, Behn v Moulton Contracting Ltd, 2013 SCC 26.

Shaun Developments Inc. v. Shamsipour, 2018 ONCA 707

Keywords: Summary Judgment, Contract, Agreement of Purchase and Sale, Intention of the Parties, Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19

Clarke v. Kokic, 2018 ONCA 705

Keywords: Property Law, Easement, Rule Against Perpetuities, Renovations, Ancillary Right Fallowfield v. Bourgault (2003), 68 O.R. (3d) 417, [2003] O.J. No. 5206

For Short Civil Endorsement, click here.

For Criminal Decisions, click here.

Reciprocal Opportunities Incorporated v. Sikh Lehar International Organization, 2018 ONCA 713

[Hoy A.C.J.O., van Rensburg and Pardu JJ.A.]

Counsel:

P.J. Pape, for the appellant

D. Touesnard, for the receiver

T.R. Laan, for the respondent A

J. Piccin, for the respondent B

Facts:

The appellant appeals the motion judge’s decision not to approve the sale by a court-appointed receiver of a property in Brampton, Ontario (the “Property”). Respondent A was established as a religious, private charitable organization to buy the Property and establish, manage and operate a Gurdwara (a Sikh temple). The Gurdwara became insolvent in 2014. On September 1, 2017, the motion judge granted an order appointing a receiver of all the assets, undertakings and property of respondent A, which authorized the receiver to sell the Property. Respondent A advised the receiver that it had a firm commitment from a lender to take an assignment of its first mortgage with the transaction to close in the next two weeks. The receiver advised that if the amount and outstanding expenses were paid it would apply to the court to approve the assignment and to be discharged.

The Property was listed for sale as of October 31, 2017. That same day, the receiver confirmed by letter to respondent A’s counsel that if respondent A bought out the first mortgage on the Property on or before November 14, 2017, the receiver would move for a discharge order. The receiver entered into an agreement (the “Agreement”) to sell the Property to the appellant on November 2, 2014. The “buy-out” of the mortgage did not proceed by November 14, 2017.

On November 23, 2017, respondent A confirmed that it had secured financing from a lender and was prepared to pay out all amounts owed to the receiver in exchange for an assignment of the first mortgage. The receiver clarified that while it could undertake to move for an order discharging the receiver, the court would have discretion to grant the relief. On November 24, 2017, the receiver advised respondent A that if the receiver could not move forward with respondent A’s proposal it would be moving forward on January 5, 2018 for an order approving a sale agreement. On November 29, 2017, the receiver confirmed that a motion would be served returnable January 5, 2018 for approval of the sale. If respondent A brought a motion for an order allowing it to redeem, the receiver would not oppose.

In its first report dated December 6, 2017, the receiver detailed the sales process and made no mention of respondent A’s attempts to arrange an assignment of the first mortgage. In its materials, respondent A submitted that the mortgagee’s representative had delivered various documents setting out revised amounts for payout, which differed from the original Notice of Sale, and that the delay in effecting the assignment of the first mortgage was entirely the responsibility of the mortgagee. Respondent A’s trustee also deposed that the emails had led respondent A to believe that upon payments of the proper amounts owing under the first mortgage, the receiver would arrange the assignment of the first mortgage, and that respondent A had incurred substantial costs in securing financing to that effect. Moreover, the trustee deposed that respondent A was unaware of the Agreement until the receiver delivered its motion materials, dated December 6, 2017.

January 5 Motion

The receiver sought an order approving the sale of the Property to the appellant. Respondent A opposed that motion and brought a motion seeking an order requiring the mortgagee to assign the first mortgage, upon payment of all amounts owed to the receiver, and an order discharging the receiver upon payment of such amounts.

The receiver stated in its factum that it had entered into the Agreement prior to the conditional request to take an assignment of the first mortgage. The appellant submitted that respondent A had not shown how it would make future payments to its mortgagees or creditors if the assignment transaction proceeded, and argued the sale should be approved and a vesting order issued.

One of the Property’s tenants filed a motion record opposing the form of vesting order sought because it purported to vest the Property in the appellant free and clear of all encumbrances, including the tenant’s lease.

The motion judge noted that respondent A’s first, second and third mortgages on the Property remained in default, a construction lien was registered in the amount of $406,500, the Ministry of Revenue had a tax lien in the amount of $108,156, the City of Brampton was in a position to put the Property up for sale for tax arrears in the amount of $433,818.29, one of the Property’s tenants was seeking damages in the amount of $2 million for breach of its lease, there was a judgment in favour of the appellant in the amount of $2,206,729.01, and there were numerous other debts.

The motion judge instructed himself on the four duties a court must perform when deciding whether to approve a sale of a property by a receiver (Royal Bank of Canada v Soundair Corp):

1. The court should consider whether the receiver has made a sufficient effort to get the best price and has not acted improvidently.

2. The court should consider the interests of all parties.

3. The court should consider the efficacy and integrity of the process by which the offers are obtained.

4. The court should consider whether there has been unfairness in the working out of the process.

The motion judge found that the receiver had taken reasonable steps to obtain the best price for the property. However, the motion judge stated he would not approve the sale, based on the conduct of the receiver relative to respondent A. Absent that conduct, he would have approved the sale. The motion judge found that it was clear that as of the end of December 2017, the receiver was prepared to accept payment of the outstanding balance of the first mortgage and assign the mortgage to a third party. He concluded that there had been unfairness to respondent A and to the prospective assignee in the manner in which the process had been conducted, and ordered that the proposed sale was not approved.

Issues:

1. Did the motion judge err in his performance of the Soundair duties?

2. If yes, what is the appropriate remedy?

Holding:

Appeal allowed.

Reasoning:

(1) Yes. In failing to consider the interests of the creditors and the appellant, the motion judge had erred in his application of the second Soundair duty.

The Court established the standard of review for the motion judge’s decision. As his decision was discretionary in nature, an appeal court would only interfere where the judge considering the receiver’s motion for approval of a sale had erred in law, seriously misapprehended the evidence, exercised his or her discretion based upon irrelevant or erroneous considerations, or failed to give any or sufficient weight to relevant considerations.

The Court found that there were two ways in which the motion judge had erred in performing the second Soundair duty: (1) He had failed to properly consider and give sufficient weight to the interests of the creditors; and (2) he had failed to consider the interests of the appellant as a purchaser.

The motion judge had noted the existence of substantial debts in arrears but had not considered how declining to approve the sale would affect the creditors’ interests. The assignment of the mortgage would not permit respondent A to repay the other substantial debts which were in arrears, and it was unclear how respondent A would be in a position to service the first mortgage, if assigned to a new mortgagee. The receivership had been triggered by respondent A’s insolvency and the motion judge had not engaged in an analysis of the continued viability of respondent A and of its ability to pay its creditors if the sale did not proceed. Given that Soundair directs the primary interest to be considered to be that of the creditors, this was an error. Moreover, the motion judge had not given consideration to the interests of the appellant. The appellant had taken no part in the conduct of the receiver and of the mortgagee towards respondent A.

(2) The Court found the appropriate remedy to be a new hearing. The motion judge had made no findings on several issues required to properly determine whether to approve the sale, and a new hearing would permit the motion judge to obtain more information and to make the necessary findings.

In concluding that a new hearing was the correct remedy, the Court relied on several factors:

1. The circumstances were unusual. The receiver had not been opposed to the assignment, provided it was discharged and released from any potential liability to the appellant. It recommended the sale only in the event that the motion judge was unwilling to insulate it from liability. A re-hearing would permit the motion judge to obtain clarity on the receiver’s position.

2. The first report of the receiver did not provide an update of respondent A’s financial position, indicate how the assignment option would affect creditors other than the mortgagee, explain what it had told the appellant about the proposed assignment before entering into the Agreement and what it had told respondent A about the proposed sale, or describe what role it took in determining the amount outstanding under the first mortgage. A re-hearing would permit the receiver to provide a further report and assist the motion judge in balancing the interests of the creditors, the appellant, respondent A, and the proposed assignee.

3. It was not clear that the proposed assignee was ready, willing and able to close the assignment upon determination by the motion judge of the payout amount. A re-hearing would permit the motion judge to determine whether the assignment transaction could proceed without delay.

4. A number of factual determinations would potentially need to be made in order to permit the balancing of the interests of the parties, and to determine whether the sale should be approved, and the receiver discharged. For example, the motion judge had made no findings as to what the appellant knew of the proposed assignment, and when. The motion judge also had not made findings about what respondent A knew and when, despite contradictory evidence on that point from the receiver and respondent A. The motion judge had made no findings about what the receiver knew about the indebtedness incurred by respondent A’s trustee in connection with the assignment, nor as to the cause of delay in settling the payout amount.

5. The issue raised by respondent A’s tenant regarding the form of vesting order contemplated by the Agreement remained to be resolved.

Le Feuvre (Re), 2018 ONCA 712

[Watt, Huscroft and Fairburn JJ.A.]

Counsel:

J. Hanna, for the respondent

A. Szigeti, for the appellant

K. Hunt, for the Person in Charge of the Centre for Addiction and Mental Health

Keywords: Mental Health, Not Criminally Responsible, Centre for Addiction and Mental Health, Detention Order

Facts:

The appellant is a 67-year-old man with a lengthy psychiatric history. The appellant appealed from the disposition of the Ontario Review Board, pursuant to which he remains detained at the Centre for Addiction and Mental Health (“CAMH”). Before the Board, the parties agreed that the appellant continues to pose a significant threat to the safety of the public. The only issue on the review concerned the appropriate disposition. The Board continued the appellant’s “hybrid order”, requiring that he be detained within the Secure Forensic Unit, with discretion to transfer him to the General Forensic Unit. If and when detained within the General Forensic Unit, the Board granted the Person in Charge the discretion to permit the appellant to live in the community in 24-hour a day supervised accommodation.

The appellant argued that the appeal should be allowed and that he should be granted an order detaining him in the General Forensic Unit. In the alternative, he asked that the matter be remitted to the Board for a new hearing before a differently constituted panel of the Board. The appellant also submitted to the Court of Appeal that an absolute or conditional discharge should be ordered. In the further alternative, the appellant requested that the Court order CAMH to retain independent professional services to break what he described as a treatment impasse.

The Crown and the Person in Charge sought to uphold the Board’s disposition, arguing that the Board’s decision is reasonable and that there is a reasonable treatment plan in place.

Issue:

Is the Board’s decision to continue the appellant’s “hybrid order” reasonable?

Holding:

Appeal allowed.

Reasoning:

No. The Court of Appeal acknowledged that the Board properly found that the appellant remains a significant threat to the safety of the public, a matter not in dispute at the hearing. The Board noted that the “efficacy of rehabilitative programs in the secure unit has been exhausted”, and refers to an “apparent impasse” in the appellant’s rehabilitation process. Following that finding, the Board’s decision was replete with a sense of urgency.

The Board recognized the pressing need to take meaningful steps toward the ultimate goal of returning the appellant to the community. The Board also noted that the appellant’s treatment – suspension of his indirectly supervised passes for mere rule violations (typically involving the appellant’s smoking addiction) that “did not rise to the level of a significant threat” – was “bordering on punitive”. Having identified a treatment impasse and a recognizable urgent situation, it was unreasonable for the Board simply to continue the hybrid order and make suggestions about what CAMH should do.

Given the appellant’s advancing age, declining health, the length of his detention and in particular the lack of progress that has been made in improving his situation, the Board’s suggestions to CAMH are inadequate.

Accordingly, the Person in Charge was directed to obtain an independent assessment of the appellant and to have a report prepared, in consultation with the appellant’s current treatment team, reviewing the appellant’s history and establishing a plan to advance the appellant toward the ultimate goal of reintegration into the community.

Conklin v. Ontario, 2018 ONCA 726

[Lauwers, Miller and Nordheimer JJ.A.]

Counsel:

J. Obagi, for the appellant

J. Smith and M. Williams, for the respondents

Keywords: Breach of Duty of Care, Amended Statement of Claim Particulars, Nash v. Ontario (1995), 27 O.R. (3d) 1 (C.A.), Persaud v. Ontario (Attorney General), [2008] O.J. No. 2953 (S.C.J.)

Facts:

The appellant claimed damages for negligent investigation by officers of the Ontario Provincial Police (“O.P.P.”) and for breach of the duty of care owed to him by corrections officials while he was held in custody for three years at the Ottawa Carleton Detention Centre (“O.C.D.C.”).

The respondent, Maureen Harvey, is identified in the amended statement of claim as being the superintendent of the O.C.D.C. The respondents, John Doe and Jane Doe, had dual roles in the amended statement of claim. On the one hand, they were alleged to be the O.P.P. officers who were in charge of the investigation of the appellant and the charges against him. On the other hand, they were alleged to be guards or correctional service officers charged with the supervision and care of inmates at the O.C.D.C. The respondent, Her Majesty the Queen in right of Ontario, brought a motion to strike out the appellant’s claim against itself, Maureen Harvey, John Doe and Jane Doe. The motion judge struck the various claims, all without leave to amend.

In granting the order as it related to Ms. Harvey, the motion judge found that the amended statement of claim “does not provide particulars enough to link Ms. Harvey in her personal capacity”. However, the motion judge did not provide any reasons for striking the claims against John Doe and Jane Doe.

Issue:

Did the motion judge err in striking out the plaintiff’s claim against Maureen Harvey, John Doe and Jane Doe?

Holding:

Appeal allowed.

Reasoning:

Yes. It is well-established that on a motion to strike a statement of claim, the pleadings are to be read generously allowing for inadequacies due to drafting deficiencies: Nash v. Ontario (1995), 27 O.R. (3d) 1 (C.A.). The motion judge failed to properly apply Nash.

The amended statement of claim pleaded that Ms. Harvey was the superintendent of the O.C.D.C. “responsible for the hiring and firing of staff”. In a later section of the amended statement of claim, the appellant pleaded that “the staff of the O.C.D.C., its management and supervisors” failed in various respects including hiring staff that lacked the necessary skills and staff that were incompetent.

Read generously, the amended statement of claim alleged facts that amounted to negligence on the part of the staff and management of the O.C.D.C. That staff and management would include Ms. Harvey as superintendent. The Court of Appeal concluded that the claim against Ms. Harvey was not so devoid of allegations of fact that it was “plain and obvious” that it could not succeed. The claim ought not to have been struck, especially without leave to amend.

Riga v. Ontario Lottery and Gaming Corporation, 2018 ONCA 714

[Lauwers, Miller and Nordheimer JJ.A.]

Counsel:

J. P. Riga, in person (appellant)

P. Johnston, for Ontario Lottery and Gaming Corporation

L. Bevan, for Gateway Casino Sault Ste. Marie

W. Ojok, for Alcohol and Gaming Commission of Ontario, Ontario Provincial Police and Premier of Ontario

O. Rosa, for Corporation of the City of Sault Ste. Marie and Sault Ste. Marie Police Service

A. Johnston, for Royal Canadian Mounted Police and Prime Minister of Canada

J. Siegel, for the Liberal Party of Canada and the Ontario Liberal Party

M. Mercer, for McCarthy Tétrault LLP

Keywords: Frivolous and Vexatious Claims, Rules of Civil Procedure, R.R.O. 1990, Reg. 194 r. 2.1.01

Facts:

The appellant filed a Notice of Appeal from the judgment of the motion judge who dismissed the appellant’s action under r. 2.1.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 on the ground that it was frivolous and vexatious. The respondents sought to have the appeal dismissed on the same basis pursuant to the same rule.

In reaching his conclusion to dismiss the appellant’s action, the motion judge said:

The allegations set out in the statement of claim are nonsensical. The statement of claim sets out allegations of perceived personal wrongs against the plaintiff [appellant] which the defendants [respondents] would have no liability in law for. In my view, the plaintiff has failed in the statement of claim to plead any material facts to disclose a cause of action against any of the defendants. To use the language set out in the jurisprudence, this is a clear case where the abusive nature of the proceedings is apparent on the face of the claim.

Issue:

Did the motion judge err in dismissing the appellant’s action?

Holding:

Appeal dismissed.

Reasoning:

No. The Court of Appeal agreed with the motion judge’s conclusion respecting the underlying action. The same observation was made with respect to the Notice of Appeal because it did not set out any grounds of appeal that demonstrate any merit.

Mercado Capital Corporation v Qureshi, 2018 ONCA 711

[Feldman, Benotto and Brown JJ.A.]

Counsel:

M. Myers and M. Krygier-Baum, for the appellant

V. Pohani, for the respondent

Facts:

The appellant is the creditor of the respondent’s husband. While married, the husband and wife sold their matrimonial home (“First Home”), which was registered in the husband’s name, and used the proceeds and other money to purchase a new home in both their names (“Second Home”).

After the appellant petitioned the husband into bankruptcy within one year of the purchase, the appellant sought to void the transfer of half of the new home into the respondent’s name, as a transfer for undervalue contrary to s. 96(1)(b)(i) of the Bankruptcy and Insolvency Act (“BIA”). After being adjudged bankrupt in 2016, the Second Home was sold.

In dismissing the appellant’s claim, the application judge exercised his “equitable discretion” not to declare the respondent’s 50% interest in the Second Home void, relying on the following factors: the good faith of the husband and wife and the lack of any intention to defeat creditors; the respondent’s “substantial non-monetary contribution to the family by her hard work managing the household and caring for their children;” the contributions of the respondent’s parents to the purchase price of both the First Home and Second Home; the husband and wife’s honest belief that the respondent was entitled to a 50% interest in the Second Home because it was their matrimonial home; the respondent and her children have no other guaranteed form of financial support, the Second Home is the respondent’s only asset, and the respondent needs the proceeds from the sale of the home to support herself and her children; and the agreement of purchase and sale for the Second Home was signed by the respondent in 2015, well before the one year period preceding her husband’s bankruptcy.

Issue:

(1) Did the purchase of the Second Home in the joint names of husband and wife constitute a transfer by the husband to the respondent of one half of the home at undervalue?

(2) If so, did the transfer take place within one year or five years of the date of the husband’s initial bankruptcy event?

(3) If the transfer was within five years, did the appellant prove that the transferor was either insolvent when the transfer took place or intended to defraud, defeat, or delay a creditor?

(4) Does the court have discretion under s. 96(1) of the BIA to decline to declare the transfer void as against the trustee in bankruptcy or against the creditor authorized to bring the application under s. 38?

(5) If the court has that discretion, did the application judge err in law in the basis on which he exercised it?

Holding:

Appeal dismissed.

Reasoning:

(1) No, there was not a transfer at undervalue. Both husband and wife believed that each had an equal interest in their matrimonial homes, even though the First Home was registered in the husband’s name alone, and the funds used to purchase both homes came from the husband’s business and from the respondent’s parents. The respondent’s direct contribution was in running the home and raising the children.

This finding is consistent with the Family Law Act and the notion that marriage is an economic partnership, entitling each partner to an equal share of the net value of assets.

(2) No, the transfer did not take place within one year of the date of the husband’s bankruptcy.

The respondent entered into the agreement of purchase and sale for the Second Home on February 18, 2015. The initial bankruptcy event occurred on June 2, 2016. February 18, 2015 was the effective date of the impugned disposition of property.

(3) No, the appellant did not prove that the husband was insolvent when the transfer took place or intended to defraud, defeat, or delay a creditor.

The appellant bore the burden of establishing the foregoing requirements in order to impugn the transfer at undervalue. Since none of these elements were proved, there was no basis for the court to void the purchase of the Second Home in joint names and in particular, to void the impugned disposition to the respondent.

(4)/(5) Since there was no finding of an impeachable transfer for undervalue, there was no need for the court to address the issue of the scope of the discretion in the court not to make the order when all the conditions are met.

Jeffery v. London Life Insurance Company, 2018 ONCA 716

[Doherty, Benotto and Huscroft JJ.A.]

Counsel:

C. Smith, J. Gotowiec, and S. Cumbo-Steinmetz, for the appellants

J. Lisus, I. Matthews, J. Foreman, P. Bates, D. Williams, and M. Gregory, for the respondents

Facts:

This appeal concerns the class counsel fee and costs relating to a class action arising from Great-West Life Assurance Company’s acquisition of London Life Insurance Company. As part of the acquisition, the companies used funds from their respective participating policy (“PAR”) accounts. These accounts allow a holder of a participating policy to participate in the profits of the insurance company and receive dividends, and are, in essence, life insurance contracts and investment contracts. The plaintiff class was holders of the PAR accounts at each company who alleged that the transactions were not in compliance with the Insurance Companies Act, S.C. 1991, c. 47 (“ICA”). After a lengthy trial, on the subsequent appeal the Ontario Court of Appeal upheld the trial judge’s findings (except in one limited respect) but ordered a rehearing with respect to the remedy portion of the judgment. On appeal from this re-hearing, the Ontario Court of Appeal ordered that $56.43 million be paid back into the PAR accounts.

The parties then returned to the trial judge on the issue of class counsel fees. She approved class counsel fees of $16.4 million, placed a first charge for the fees over the $56.43 million to be returned to the PAR accounts pursuant to s.32(3) of the Class Proceedings Act, 1992, S.O. 1992, c. 6 (“CPA”), found that the class plaintiffs were entitled to partial indemnity costs at $4 million, and imposed a levy in favour of the Law Foundation of Ontario (the “Foundation”) on the $56.43 million to be returned to the PAR accounts. On a subsequent motion under r. 59.06 of the Rules of Civil Procedure, she clarified a portion of an earlier judgment from 2010 (the “2010 Prohibition Order”), holding that it meant the companies could not charge or allocate any legal costs or expenses, whenever incurred, to the PAR accounts at any time without leave of the court and on notice. The appellants, Great-West Life Assurance Company and London Life Insurance Company, appealed this decision as well as the trial judge’s order clarifying her previous judgment, and the Foundation cross-appealed on the basis that additional disbursements should have been awarded to the respondents and subject to the levy.

Issue:

(1) Did the trial judge err in ordering payment of the class counsel fee from, and a charge over, the PAR accounts?

(2) Did the trial judge err by ordering the levy in favour of the Foundation or by refusing to award the respondents the additional disbursements?

(3) Did the trial judge err in awarding costs to the respondents?

(4) Did the trial judge err by assuming jurisdiction to hear the r. 59.06 motion and then interpreting the 2010 Prohibition Order retroactively?

Holding: Appeal dismissed (Justice Huscroft dissenting on issues (1) and (2)) and cross-appeal dismissed.

Reasoning:

(1) No. The order requiring the appellants to return $56.43 million to the PAR accounts is a monetary award, and the trial judge did not err in ordering a charge over the PAR accounts. Firstly, the majority dismissed the appellant’s argument that the trial judge’s order did not bind them to another entity’s retainer contract in a way that breaches the doctrine of privity of contract. This was because the class counsel fees were payable from the PAR accounts by virtue of s. 32(3) of the CPA as opposed to the retainer agreement itself.

Secondly, the majority found that the award made in the action, the return of the $56.43 million to the PAR accounts, is a monetary award within s. 32(3) of the CPA. Although the award was not payable directly to the class plaintiffs, the words in s.32(3) refer to “any… monetary award” with the words “payable to” not used in the section. Additionally, s.32(3) should be interpreted generously with a view to the overarching purposes of the CPA, such as encouraging access to justice, and, among other reasons, a limitation on what a “monetary award” is could discourage meritorious class actions. Finally, per Hislop v. Canada, 2009 ONCA 354, “monetary award” should be taken to mean a payment of money imposed by judicial authority, and Hislop was not distinguishable from the case at hand because the award in this case also benefitted, albeit indirectly, the class plaintiffs.

Thirdly, the majority found that the charge could be properly attached to the award. The language of s.32(3) of the CPA does not require that the class must have an ownership interest in property before the first charge is placed against it. The class plaintiffs have a sufficient right to the funds to ground a first charge because they were awarded the right to have the award repaid to the PAR accounts.

Justice Huscroft, writing in dissent on this issue, found the trial judge erred in ordering payment of the class counsel fee from, and a charge over, the PAR accounts. He found that the order requiring the return of the $56.43 million to the PAR accounts was not a monetary award and that no charge under s. 32(3) may attach to it. Firstly, he found that the absence of the words “payable to” in s.32(3) was irrelevant because it is implicit in the concept of an award that it must be awarded. He found that no payment to the class was ordered, and any future benefit to the class was speculative because the members of the class had no entitlement to monies in the PAR account.

Justice Huscroft found that although s.32(3) should be interpreted generously, it did not overcome the plain-language reading requiring relief awarded to the plaintiff class. Additionally, the facts at hand are distinguishable from Hislop because the benefit that may flow to policyholders is speculative, and in the absence of a monetary award there was nothing to which class counsel’s contingency fee arrangement could attach.

(2) No. The majority found that the trial judge did not err in ordering a levy in favour of the Foundation, nor did she err by not including additional disbursements. As noted above, the return of the $56.43 million is a “monetary award” made “in favour of the Plaintiff class”. The majority held that this should also be used to interpret s. 10(2) of Ontario Regulation 771/92: Class Proceedings under the Law Society Act, R.S.O. 1990, c. L.8 requiring a levy payable in favour of the Fund, and therefore, the trial judge’s conclusion that the levy was charitable was supported. The award also resulted in a benefit to the members of the plaintiff class. Furthermore, the plain language of the Regulation contemplates payment of the levy from either plaintiff or defendants depending on what is appropriate in the circumstances.

Justice Huscroft, writing in dissent on this issue, applied his interpretation of the phrase “monetary award” to find that the Foundation was not entitled to a levy since there was no monetary award to be levied.

The majority also dismissed the cross-appeal by finding the trial judge did not err in not ordering the appellants to pay additional disbursements incurred by the plaintiffs. This was because the trial judge gave reasons, and the Foundation did not have standing to argue this issue.

(3) No. The trial judge did not err in her determination of costs. Costs awarded by a judge at first instance attract considerable deference on appeal and a reviewing court, per Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, will only interfere where there has been an error in principle or if the costs award is plainly wrong. The trial judge was involved in the matter for many years, was in the best position to make a determination as to success in the action, and was principled in the exercise of her discretion. There was no basis to disturb the trial judge’s conclusion that the litigation was a success under s.33(2) of the CPA because the respondent class gained much from the judgment.

(4) No. The trial judge had jurisdiction to hear the r. 59.06 motion and did not err in interpreting the 2010 Prohibition Order to have retroactive effect. Rule 59.06 clearly states that a judge can give directions or make an order to carry an order into operation, and this is what the trial judge did in clarifying the 2010 Prohibition Order. She ultimately confirmed that the 2010 Prohibition Order was meant to capture any costs or expenses relating to the legal proceedings, not only to those costs incurred after her judgment in 2010, and this accordingly fell within the jurisdiction provided under r.59.06(2)(c). Consequently, she was not functus officio within the meaning of D.G. v. A.F., 2015 ONCA 290, which cited Doucet-Boudreau v. Nova Scotia (Minister of Education), 2003 SCC 62.

The trial judge did not err in interpreting the 2010 Prohibition Order to have retroactive effect. A retroactive interpretation accords with the intention of the prohibition, which was to prevent the appellants from allocating legal costs and expenses to the very accounts they were accused of mismanaging. It was therefore consistent with her trial order, the impetus of which was to restore the PAR accounts to the position they would have been had the PAR account transactions never occurred.

1704604 Ontario Ltd. v. Pointes Protection Association, 2018 ONCA 685

[Doherty, Brown and Huscroft JJ.A.]

Counsel:

M. Wiffen, for the appellants

J.P.R. Cassan and T. Harmar, for the respondent

Facts:

The respondent wanted to develop a subdivision in Sault Ste. Marie. It needed the approval of the Sault Ste. Marie Region Conservation Authority (“SSMRCA”) and the Sault Ste. Marie City Council (“City Council”). The appellant, Pointes Protection Association opposed the proposed development on environmental grounds.

The respondent first went to the SSMRCA. Its initial application failed, but a second succeeded and SSMRCA passed the necessary resolutions. The appellant brought an application for judicial review of SSMRCA’s decision, seeking a declaration that the resolutions were “illegal” and beyond SSMRCA’s jurisdiction.

While the judicial review application was pending in the Divisional Court, the respondent sought the approval of City Council. The proposed development required an amendment to the City’s official plan. City Council turned down the respondent’s application, following which it appealed to the OMB. The appellant was granted standing in the OMB proceeding.

While the appellant’s application for judicial review and the respondent’s OMB appeal were both pending, the parties settled the judicial review proceeding. The signatories to the agreement (the “Agreement”) included the appellant and the individual members of the appellant’s executive committee (collectively, the “appellants”), as well as the respondent. Each of the members acknowledged that he or she was bound by the terms of the Agreement.

Under the terms of the Agreement, the appellant’s judicial review application was to be dismissed on consent without costs, and this was done in December 2013.

The Agreement also put limitations on the appellants’ future conduct. They agreed not to commence further court proceedings seeking the same or similar relief that had been sought in the judicial review application. They additionally promised that in any OMB proceeding, or in any other subsequent legal proceeding, they would not advance the position that the SSMRCA resolutions were illegal, invalid, or contrary to the relevant environmental legislation. They also undertook to not advance any claim that the SSMRCA had exceeded its jurisdiction by acting without reasonable evidence to support its decision, or by considering extraneous factors in passing the resolutions allowing the development to proceed.

The respondent proceeded with its appeal to the OMB. In the course of the hearing, the appellant called one of the individual appellants Peter Gagnon (President). Over the objection of the respondent’s counsel, Gagnon testified that, in his opinion, the proposed development would result in significant loss of coastal wetlands, thereby causing substantial environmental damage. He had given similar evidence before the SSMRCA.

The OMB dismissed the respondent’s appeal. In doing so, the OMB member held that the proposed development did not “have appropriate regard for the effective development on matters of provincial interest”, and that the proposed development was “not in the public interest as it relates to the loss of coastal wetland”. The member preferred Gagnon’s opinions to those of the respondent’s expert.

About six months later, the respondent sued the appellants for breach of contract. In its Statement of Claim, the respondent asserted that the appellants had breached the terms of the Agreement when Gagnon gave evidence concerning the proposed development’s negative impact on the wetlands and the associated environmental consequences. The respondent claimed that those very matters had been considered by the SSMRCA. According to the Statement of Claim, it was “implicit in the [Agreement] … that the wetlands issue was settled”.

The appellants responded with a motion under s. 137.1 of the Protection of Public Participation Act, 2015, SO 2015, c 23 for an order dismissing the respondent’s claim. The appellants alleged that Gagnon’s testimony, which provided the factual basis for the alleged breach of contract, related to the environmental impact of the proposed development -- that is, a matter of public interest. The appellants further argued that the respondent could not meet its onus under either branch of s. 137.1(4), and thus that the action should be dismissed.

The motion judge accepted that the lawsuit related to expression on a matter of public interest. The burden therefore fell on the respondent to demonstrate that the action should be allowed to proceed. The motion judge concluded that the respondent had discharged that burden. He dismissed the appellants’ 137.1 motion and directed that the action should proceed.

The appellants appealed this decision. They did not challenge the finding that Gagnon’s testimony constituted expression relating to public interest, but rather argued that the motion judge made significant errors in interpreting sections 137.1(4)(a-b) of the Protection of Public Participation Act, 2015.

Issues:

(1) Did the motion judge err in finding that the respondent had cleared the “merits-based” hurdle of s. 137.1(4)(a)?

(2) Did the motion judge err in finding that the respondent had cleared the “public interest” hurdle of s. 137.1(4)(b)?

Holding:

Appeal allowed.

Reasoning:

As a preliminary matter, the Court of Appeal discussed in detail both the relevant provisions of s.137 of the Protection of Public Participation Act, 2015, as well as the Act more generally.

Turning first to the Act’s legislative history, the Court of Appeal observed that the legislative and executive bodies tasked with developing the legislation recognized the need to protect and foster a broad spectrum of expression relating to matters of public interest, but that other interests that could conflict with freedom of expression also deserved vindication through the legal process.

The result was a two-pronged approach for distinguishing between those claims that sought to unduly limit a defendant’s freedom of expression, and those claims that legitimately sought to vindicate a wrong suffered as a result of a defendant’s exercise of his or her freedom of expression. The first prong looked to the merits of the plaintiff’s claim. The second sought to measure the public interest served by allowing the plaintiff’s action to proceed against the harm caused by that action to the defendant’s freedom of expression. Ultimately, this two-pronged approach found its way into the Act, in the form of ss. 137(1)(4)(a) and (b).

Turning second to an overview of the Act itself, the Court of Appeal observed that the purposes of s.137(1) left no doubt that the legislation was intended to promote free expression on matters of public interest by “discouraging” and “reducing the risk” that litigation would be used to “unduly” limit such expression. In order to accomplish this objective, the Act created the pretrial remedy that was at issue in this case -- namely, the motion for dismissal on public interest grounds.

However, the Act also provided for a defence to such a motion, under s.137(1)(4)(a) and (b). These subsections require a plaintiff to establish two things. Under subsection (a) -- what the Court of Appeal in this case termed the “merits hurdle” -- the plaintiff would be required to demonstrate that there are reasonable grounds to believe i) that the proceeding has no substantial merit, and ii) that the moving party has no valid defence in the proceeding.

If the plaintiff meets the conditions of subsection (a), it would still be required to meet the condition of subsection (b) -- what the Court of Appeal termed the “public interest hurdle”. Under this hurdle, the plaintiff is required to show that “[T]he harm likely to be or have been suffered by the responding party [plaintiff] as a result of the moving party’s [defendant’s] expression is sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting that expression.”

Turning third to the concept of “public interest” under the Act, the Court of Appeal stated that the Act did not expressly define the term, but rather used it in two ways. The first, in s. 137.1(4)(b), refers to evaluations of the societal interests served by each of the defendant’s expression and the plaintiff’s claim.

The second, used to modify the word “matter” in s.137.1(3), is defined more broadly. The Court of Appeal relied on the Supreme Court’s judgment in Grant v Torstar, 2009 SCC 61 to find that this use is a broad one, which does not take into account the merits or manner of the expression, nor the motive of the author. The determination of whether an expression relates to a matter of public interest must be made objectively, having regard to the context in which the expression was made and the entirety of the relevant communication. An expression may relate to more than one matter. If one of those matters is a “matter of public interest”, the defendant will have met its onus under s. 137.1(3).

Lastly, the Court of Appeal turned to an analysis of sections 137.1(4)(a) and (b). With respect to subsection (a), the Court of Appeal found that the subsection speaks to the potential merits of the lawsuit. That is, it speaks to the merits of the plaintiff’s claim, and the validity of the defendant’s defence (this latter point being significant in the context of defamation claims).

The Court of Appeal was careful to note that a s.137.1 motion was not a form of summary judgment intended to allow defendants to obtain a quick and favourable resolution of the merits of allegations involving expressions on matters of public interest. Instead, the provision aims to remove from the litigation stream at an early stage those cases which should not proceed to trial for a determination on the merits.

It is incumbent upon the motion judge to conduct a limited weighing of the evidence, and, in some cases, credibility evaluations. Bald allegations, unsubstantiated damage claims, or unparticularized defences are not the stuff from which “grounds to believe” are formulated. Ultimately, it is not for the motion judge to decide whether he or she thinks that the claim has “substantial merit”; it is for them to determine whether it could reasonably be said, on an examination of the motion record, that the claim has substantial merit.

Regarding the “valid defence” component, the Court of Appeal observed two things: first, that the section contemplates a burden on the defendant to advance defences in the pleadings; and second, that “valid” contemplates an evidentiary burden on the plaintiff to prove that none of the stated defences could reasonable have a chance of succeeding.

With respect to subsection (b), the Court of Appeal found that it reflects the legislature’s determination that the success of some claims that target expression on matters of public interest comes at too great a cost to freedom of expression. In essence, it is a balancing exercise. Subsection (b) places the onus on the plaintiff to show the harm caused to it by the defendant’s expression is “sufficiently serious” that the public interest engaged in allowing the plaintiff to proceed with the claim outweighs the public interest in protecting the defendant’s freedom of expression.

Such harm is measured primarily in monetary damages, although the plaintiff may refer to non-monetary harm as well (such as harm to reputation and personal privacy, which have inherent value beyond monetary value). In this vein, the plaintiff must provide a basis upon which the motion judge can make some assessment of the harm, which will likely take the form of some materials quantifying the amount, as well as proof of some causal connection between the defendant’s expression and the harm caused. By contrast, bald allegations by the plaintiff are not acceptable.

With respect to the other side of the balancing exercise, the Court of Appeal found that the evidentiary burden lies on the defendant to establish the specific facts said to give added importance in the specific circumstances to the exercise of freedom of expression. Unlike the “public interest” inquiry in s. 137.1(3), in which the quality of the expression or the motivation of the speaker are irrelevant, both play an important role in measuring the extent to which there is a public interest in protecting that expression.

Having provided this analysis, the Court of Appeal then turned to addressing the issues at hand in this case:

(1) Yes. The motion judge did not examine the record to determine if there were reasonable grounds to believe that the respondent’s claim had substantial merit. In fact, he never considered whether, in all of the circumstances, and having regard to the wording of the Agreement, the Agreement could plausibly be read as precluding Gagnon’s testimony at the OMB. Without some consideration of the relevant principles of contractual interpretation as applied in the circumstances, the motion judge could not properly determine whether there were reasonable grounds to believe that the respondent’s claim had substantial merit.

The motion judge’s failure to examine the potential merits of the respondent’s claim is explained by his interpretation of the phrase “substantial merit” in s. 137.1(4)(a)(i) as referring to the seriousness of the subject matter of the claim and not the potential merits of the claim. With respect, the subject matter of a claim does not determine whether there are grounds to believe that the claim has substantial merit. Claims involving very serious matters can be self-evidently devoid of any merit.

To the extent that the motion judge’s reasons refer to the merits of the respondent’s claim, as opposed to the subject matter of the claim, the motion judge required the claim to pass a “frivolous or fleeting” standard. Neither word appears in s. 137.1(4)(a)(i).

The motion judge should have considered whether, on a proper application of the principles of contractual interpretation, a trier could reasonably conclude that the respondent’s interpretation of the Agreement, as applying to Gagnon’s testimony before the OMB, had substantial merit in the sense that it had a real chance of being accepted. If there were grounds to believe that the respondent’s interpretation had “substantial merit”, it followed that there were also reasonable grounds to believe that the appellants’ conflicting interpretation of the contract did not raise a valid defence.

The respondent’s reliance on an “implicit” term of the Agreement to preclude the appellants from raising the wetlands issue in testimony before the OMB is not an interpretation of the Agreement that flows reasonably from the language or the factual context of the Agreement. The very precise language used in the Agreement was the product of considerable negotiation between counsel for the parties. The Court of Appeal therefore held that there was no reasonable prospect that the respondent could convince a reasonable trier that there was substantial merit to its claim that the Agreement foreclosed Gagnon’s testimony.

For the sake of thoroughness, the Court of Appeal then went on to discuss the second component of the merits hurdle.

The Court of Appeal found that the motion judge’s interpretation of s. 137.1(4)(a)(ii), which refers to the existence of a “valid defence”, wrongly put the onus on the appellants to satisfy him that they had a “valid defence”. In fact, section 137.1(4)(a)(ii) put the persuasive onus on the respondent to prove that there were grounds to believe the appellants had no valid defence; the absence of a statement of defence is not determinative. Ultimately, the Court of Appeal found that the conclusion that the respondent failed to show grounds to reasonably believe that its interpretation of the Agreement had substantial merit lead inevitably to the conclusion that the respondent also could not show that there were reasonable grounds to believe that the defendants’ interpretation of the contract had no validity.

(2) Yes. In weighing the harm suffered by the respondent against the public interest in protecting the appellants’ expression, the motion judge focused almost exclusively on the harm caused to the respondent by the loss of its reasonable expectation that its litigation with the appellants over the proposed development was finished. The Court of Appeal repeated that, while finality in litigation is an important public value, the respondent’s reasonable expectation of finality was dependent entirely on what the Court of Appeal had already stated was an incorrect and unreasonable interpretation of the Agreement.

The Court of Appeal further found that there was no evidence of any other harm. In particular, there was no evidence of any damages suffered or likely to be suffered by the respondent as a result of the alleged breach of the Agreement.

The motion material provides little, if any, insight into either the nature of the respondent’s damage claim, or the quantum of that claim. The motion judge could not make any informed assessment of the monetary damages, if any, suffered or likely to be suffered by the respondent as a result of the appellants’ alleged breach of contract. Without that assessment, the respondent’s claim of harm caused to it by Gagnon’s testimony was weak.

Fortress Real Developments Inc v Rabidoux, 2018 ONCA 686

[Doherty, Brown and Huscroft JJ.A.]

Counsel:

J. Devereux and A. Campbell, for the appellants/respondents in the cross-appeal

G. Zvulony, for the respondents/appellant in the cross-appeal

Facts:

The respondent operates a business that provides opinions about real estate to investors and media outlets through various forums, including Twitter. The appellants operate real estate development businesses across Canada. In late 2014, the respondent posted a series of tweets about the appellants’ businesses. The appellants interpreted those tweets as implying that they were encouraging their brokers to mislead investors, and receiving improper payment from those brokers. The respondent retracted those tweets after receiving a letter from the appellants’ lawyer, and promised that he would not repeat those comments.

The respondent posted another set of tweets in 2015, this time about the appellants in their personal capacity. The appellants interpreted these tweets as accusing them of participating in market manipulation. The appellants responded by serving a libel notice on the respondent, as well as sending him a letter. In exchange for a release from litigation, the respondent retracted the tweets, and promised that he would no longer comment on the appellants in their personal capacity, on their businesses, or on any of their subsidiaries or affiliates, among others. In addition, the respondent agreed to pay $10,000 in legal fees if he breached his promise.

This action arose out of a set of tweets made by the respondent in late 2015 and early 2016, after the last promise the respondent made to the appellants. These tweets did not specifically refer to the appellants by name. Rather, they made sarcastic remarks about the downturn of the real estate market, and how some real estate companies would be affected negatively. In response, the appellants alleged that when put into context with the respondent’s previous tweet, a reader would understand that the respondent was referring to them in their personal capacity, and to their businesses. Subsequently, the appellants sued the respondent for defamation and breach of contract.

The respondent was successful in dismissing the appellants’ action under section 137.1 of the Courts of Justice Act, RSO 1990, c C.43 (“CJA”). The motion judge found first, that the respondent met his onus under section 137.1(3) by demonstrating that the tweets related “to a matter of public interest”. Second, the motion judge found that the appellants failed to meet their onus under section 137.1(4)(b) of the CJA by failing to show that the harm caused by the respondent’s tweets was sufficiently serious that it outweighed the strong public interest in protecting the respondent’s freedom of expression. The motion judge awarded $129,106.61 in costs on a full indemnity basis to the respondent.

Issues:

Appeal

Did the motion judge err in:

(1) her interpretation of section 137.1(3) of the CJA?

(2) her interpretation of section 137.1(4)(b) of the CJA?

Cross-Appeal

Did the motion judge err in:

(3) awarding costs on a full indemnity basis?

(4) calculating the cost award?

Holding:

Appeal dismissed, and cross-appeal allowed in part.

Reasoning:

Appeal

(1) No, the motion judge correctly interpreted the phrase “relates to a matter of public interest” in section 137.1(3) of the CJA as broad.

Both arguments raised by the appellants about why section 137.1(3) should be interpreted narrowly were explicitly considered and rejected in 1704604 Ontario Ltd v Pointes Protection Association, 2018 ONCA 685 (“Pointes”) (released concurrently with these reasons). First, the appellants argued that the phrase “matter of public interest” in section 137.1(3) needs to be read narrowly so that it does not restrict a plaintiff’s right to seek damages arising from defamatory statements. Second, the appellants argued that section 137.1(3) only protects expression that is “responsible” and “legitimate” on matters of public interest.

A broad reading of section 137.1(3) does not restrict the rights of plaintiffs to bring an action for defamation. Rather, a defendant satisfying their onus under section 137.1(3) merely switches the onus to the plaintiff under section 137.1(4). Whether the plaintiff’s entire claim for defamation survives therefore depends on the plaintiff satisfying their onus under section 137.1(4).

(2) No, the motion judge did not err in focusing on whether there was evidence of damages when considering harm suffered to the appellants.

The appellants argued that the motion judge erred in interpreting section 137(1)(4)(b) for two reasons. First, because the motion judge limited her assessment of harm under section 137(1)(4)(b) to specific damages. Second, because the motion judge failed to consider the public interest that is actually engaged in protecting the expression contained in the tweets.

The appellants are correct in arguing that the motion judge should have also considered general damages, however, it would not have made a difference in this case. This is because the appellants had not produced any evidence to support general damages for harm done to them by the respondent. In addition, the motion judge was correct in finding that the appellants had not produced evidence of specific damages for harm done to them by the respondent. This includes the appellants’ attempt to recover damages for breach of contract. The appellants are not entitled to recover from the breach of contract because the contract was designed to silence the respondent, which restricts the respondent’s freedom of expression and therefore potentially damages the public interest.

Furthermore, the content of the public interest that is engaged has no bearing on whether the statements made by the respondent were false or intended to mislead. No matter the content of the subject matter, the respondent’s expressions retain the value of public interest, as per the decision in Pointes.

Cross-Appeal

(3) No, full indemnity costs were warranted in this case.

Section 137.1(7) of the CJA operates in two ways. First, it provides a starting point to the judge for determining costs when the defendant has successfully won a motion under section 137.1. Second, it provides a base award for the defendant comprising of costs for both the motion and the proceeding on a full indemnity basis.

The approach to costs in section 137.1(7) is intended to be a deterrent to others while still affording discretion to the judge. A motion judge should be guided in exercising their discretion by rule 57.01 of the Rules of Civil Procedure, RRO 1990, Reg 194, and by overriding common law objectives such as being fair and reasonable, and having regard to all relevant factors. If the defendant is successful on their section 137.1 motion, the motion judge should award full indemnity costs unless full indemnity is not appropriate in the circumstances.

The appellant has not demonstrated that full indemnity is not appropriate. The appellants allege that the respondent complicated the proceeding, but the respondent did not complicate the proceeding any more significantly than the appellants did. Further, the fact that the appellants’ case was not meritless has no bearing on costs. Finally, an inference can be drawn that the litigation was brought to silence the respondent’s commentary because the appellants brought the action in the absence of having suffered significant harm. This type of litigation is representative of what section 137.1(7) is designed to deter against, and the motion judge properly awarded full indemnity costs.

(4) Yes. The cost agreement by counsel that was filed with the motion judge included HST. The motion judge did not award HST. Therefore, the motion judge erred in not awarding the respondent HST in addition to full indemnity costs.

Platnick v. Bent, 2018 ONCA 687

[Doherty, Brown and Huscroft JJ.A.]

Counsel:

T.S.B. Danson and M. Delavar, for the appellant

H. Winkler, E. Pond and A.K. Lokan, for the respondent, Maia Bent

T.J. O’Sullivan and L.M. Wagner, for the respondent, Lerners LLP

H. Schwartz, for the intervener, the Attorney General of Ontario

Facts:

Platnick v Bent, 2018 ONCA 687 is a companion case to 1704604 Ontario Ltd v Pointes Protection Association, 2018 ONCA 685 and both were released on August 30, 2018.

The appellant is a medical doctor who prepares and reviews medical assessments done in the context of disputes between insurers and persons injured in motor vehicle accidents. The respondent is a lawyer and partner with the respondent law firm, Lerners LLP. The respondent acts for individuals who have been injured in motor vehicle accidents and are seeking compensation from insurers.

In 2014, the respondent was acting for L.C., who had been injured in a motor vehicle accident. L.C. claimed to have suffered a catastrophic impairment. The insurer retained SLR Assessments (“Sibley”) to perform an evaluation. Sibley retained experts to perform an assessment, who in turn provided their reports to Sibley. Sibley retained the appellant to do an impairment calculation based on established criteria and the assessment prepared by the various experts.

The appellant provided a report to Sibley, which made extensive reference to the assessments of the other specialists. The appellant concluded that L.C. did not meet the requirements for catastrophic impairment. The appellant did not speak to the other experts. The acknowledgment page, where the experts could sign, attached to the appellant’s report indicated that the report was a “consensus conclusion of this assessment.” None of the other experts signed and there was not a consensus.

During arbitration, one of the other experts testified that there was no consensus meeting, that he had not signed the appellant’s report, and that portions of his report had been omitted without his knowledge or consent. After the testimony, the insurer offered to settle, and the second offer was accepted. The respondent was convinced that the insurer settled to avoid public scrutiny of the insurer’s conduct in regards to the medical evidence. The respondent believed that there was an attempt to misrepresent the opinions of the experts and mislead the arbitrator.

Following the settlement, the respondent posted an email on the Ontario Trial Lawyers Association “Listserv.” The Listserv members are required to maintain confidentiality. This email was eventually leaked to an advocacy organization and thereafter to the press. The email referred to the foregoing arbitration and what was discovered during arbitration, as well as a report prepared by the appellant two years earlier.

After becoming aware of the email, the appellant sued the respondents for libel, claiming damages of more than $15 million. The respondent brought a motion under s. 137.1 of the Courts of Justice Act to dismiss the claim. During this motion, the appellant brought a motion for a declaration that s. 137.1 infringed the Charter of Rights and Freedoms, ss. 7 and 15. The motion judge rejected the constitutional arguments and dismissed the action.

In allowing the respondent’s motion, the motion judge reached three conclusions: (1) the respondent established that her email constituted expression in respect of a matter of public interest – s. 137.1(3); (2) the appellant did not prove that there were grounds sufficient to believe that the respondent did not have a valid defence to the libel claim – s. 137.1(4)(a)(ii); and (3) the appellant did not prove that the harm suffered or likely to be suffered as a result of the email was sufficiently serious that the public interest in allowing the appellant to proceed with the claim outweighed the public interest in protecting the respondent’s expression – s. 137.1(4)(b).

Issues:

Did the motion judge err in:

(1) his interpretation of s. 137.1(3)?

(2) his interpretation of s. 137.1(4)(a)?

(3) his interpretation of s. 137.1(4)(b)?

(4) rejecting the s. 15 Charter claim?

(5) rejecting the s. 7 Charter claim?

Holding:

Appeal allowed and remitted.

Reasoning:

(1) No, the motion judge did not err in his interpretation of s. 137.1(3). The evidence before the motion judge fully supported a conclusion that the email constituted expression in relation to a matter of public interest.

The respondent’s email related to a matter of importance to the proper administration of justice and raised concerns about the integrity of that process as well as the honesty and reliability of medical reports filed on behalf of insurers. The integrity and reliability of that process has a direct impact on a significant segment of the public. The email was also directed at persons with a vital interest in ensuring the honesty and integrity of the arbitration process, their interest being the responsibility to fully and effectively represent the interests of clients.

(2) Yes, the motion judge erred in his interpretation of s. 137.1(4)(a). While the motion judge properly interpreted s. 137.1(4)(a)(i), he erred in interpreting s. 137.1(4)(a)(ii) by finding that the appellant failed to meet his onus to establish that the respondent had no valid defence.

A motion judge conducting an s. 137.1 motion does not make findings of fact under s. 137.1(4)(a). The motion judge ought to assess the merits of the claim and the validity of any defences. This is done to determine whether the lawsuit should be allowed to proceed.

Section 137.1(4)(a) puts the onus on the plaintiff to establish on the balance of probabilities that there are reasonable grounds to believe both that the plaintiff’s claim has substantial merit and that the defendant has no valid defence.

With respect to s. 137.1(4)(a)(i), there were reasonable grounds to believe that the appellant’s claim had “substantial merit.” For example, the respondent alleged that the appellant altered or misrepresented assessments for the purpose of denying the catastrophic impairment classification. These are allegations of dishonesty and serious professional misconduct.

With regard to s. 137.1(4)(a)(ii) and the first defence put forth of justification, the motion judge erred in narrowly focusing on whether the use of the word “consensus” was literally accurate. Rather, the motion judge should have focused on whether the allegation that the appellant deliberately misrepresented the opinions of other experts was true.

Further, the motion judge misstated the appellant’s position. It was not the motion judge’s function to decide whether the appellant’s use of the word “consensus” should be accepted. This assessment can only be made with the benefit of an opportunity for both sides to present evidence, and for a judge or jury to accept or reject this evidence.

The appellant met the onus of showing reasonable grounds to believe that the justification defence in respect of the use of “consensus” would not succeed, because the allegation regarding “consensus” had not been established as true, and was not a valid defence.

As for the second allegation which involved the report from two years earlier – the respondent alleged that the appellant changed another doctor’s opinion – the respondent had to justify the allegation made in the email. The motion judge erred in misreading the respondent’s allegation. The motion judge erred in law when addressing the justification defence by considering the justification for allegations other than the allegations made in the email.

The appellant met his onus of presenting reasonable grounds to believe that the justification defence advanced by the respondent could not succeed in respect of the second allegation.

With respect to the second defence put forth of qualified privilege, the motion judge did not distinguish between the two references to the appellant in the email. The motion judge had to do this in order to properly assess whether there were grounds to believe that the qualified privilege defence would fail. The second allegation regarding a report from two years prior falls outside the defence of qualified privilege because it was made maliciously or with reckless disregard for the truth. There were reasonable grounds to believe that the defence would not succeed at trial.

(3) Yes, the motion judge erred in his interpretation of s. 137.1(4)(b). The motion judge failed to bear in mind the nature of a s. 137.1 proceeding. It is not the motion judge’s function to make findings with respect to the scope of a damages claim.

Section 137.1(4)(b) recognizes that some claims that target expression on matters of public interest, including defamation allegations, should not be allowed to proceed to trial even though the claims have technical merit. This section requires an evaluation of competing interests. It requires the court to consider, inter alia, the motives of both the plaintiff in commencing the action and the defendant in making the impugned statement.

The appellant provided credible evidence of significant damages. This is enough to establish significant harm caused by the contents of the email. The motion judge erred by approaching the question of the appellant’s damages as if he was making a damage assessment at the end of a trial.

While the public interest in the protection of the respondent’s expression was strong, much of the information relevant to administration of justice concerns could have been equally effectively revealed without referring to the appellant. Ultimately, the potential harm to the appellant outweighs the public interest in protecting the respondent’s expression.

(4) No, the motion judge did not err in rejecting the s. 15 Charter claim.

The appellant argued that “protecting constitutional principles and values” was an analogous group.

Section 15 protects substantive equality by providing the means by which individuals can challenge distinctions made by laws that perpetuate arbitrary disadvantages to which those individuals, as members of certain groups, have been subject. Section 15 prohibits laws that draw a discriminatory distinction based on membership in an enumerated or analogous group. Analogous grounds refer to immutable personal characteristics or personal characteristics which are changeable only at an unacceptable cost to personal identity.

The appellant’s argument effectively removed any meaningful notion of discrimination from s. 15 and therefore, the argument had no merit.

(5) No, the motion judge did not err in rejecting the s. 7 Charter claim.

The appellant argued that reputation is integral to individual liberty and security of the person and is therefore protected. Further, the appellant argued that any government action – i.e., s. 137.1 – that negatively impacts reputation or the ability to defend one’s reputation is a deprivation of individual liberty and security of the person.

Section 137.1 was enacted to address the specific and real problem that litigation was used as a weapon to silence and intimidate persons who spoke out on matters of public interest. To address this, the legislature created a means by which the target of that litigation can seek an early, relatively inexpensive end of litigation. Section 137.1 puts the onus on the plaintiff to show grounds that a claim has real merit and there is no valid defence, as well as provide evidence that the harm is sufficient enough to override the public interest in promoting freedom of expression.

The appellant’s argument that s. 137.1 impacted his ability to defend his reputation was unsupported by the proper interpretation of the provision, and had no merit. The “merits” analysis required by s. 137.1(4)(a) does not limit a plaintiff’s ability to bring a valid defamation claim to trial.

Able Translations Ltd. v. Express International Translations Inc., 2018 ONCA 690

[Doherty, Brown and Huscroft JJ.A.]

Counsel:

J. Radnoff and C. Haworth, for the appellant

D. McGhee, for the respondents

Facts:

The appellant, Able Translations Ltd., sued the respondent, Philippe Vitu (“Vitu”) and his company, Express International Translations Inc. for defamation. The respondents successfully moved under s.137.1 of the Court of Justice Act, R.S.O. 1990, c. C.43, for an order dismissing the action and the motion judge awarded costs of $30,000 to the respondent on a full indemnity basis. The appellants commenced the defamation action based on an internet post made by the respondent denouncing Peter Fonseca, (“Fonseca”) a candidate in the ongoing federal election, in connection with his role as a former vice-president at Able. A second post made by the respondent stated that “ABLE’s attitude with interpreters is absolutely deplorable” and he criticized interpreters who worked for Able.

In his affidavit on the s.137.1 motion, the respondent admitted that he made the posts but asserted that the appellant was notorious in the interpreter/translator community for its failure to pay freelance interpreters and translators. The motion judge considered the operation of s.137.1 of the Act and found that under s.137.1(3) the respondents satisfied him that the proceeding arose from an expression relating to a matter of public interest. He then found that that under s.137.1(4)(a) the appellant had not satisfied him that there were grounds to believe either that the appellant’s claim has substantial merit or that the respondents had no valid defence. He then found under s. 137.1(4)(b) that the appellant had not satisfied him that the public interest in permitting its claim to proceed outweighed the public interest in protecting the respondent’s freedom of expression. The appellant challenged all aspects of this ruling.

Issue:

(1) Did the motion judge err in finding the posts arose from an expression relating to a matter of public interest under s. 137.1(3)?

(2) Should the motion judge’s findings that there were no grounds to believe the appellant’s claim had substantial merit under s. 137.1(4)(a)(i) and the appellant did not prove the respondent had no valid defence under s. 137.1(4)(a)(ii) be overturned?

(3) Did the motion judge err in finding that the balancing of competing interests favoured the respondent?

(4) Should leave to appeal the motion judge’s award of costs on a full indemnity basis be granted?

Holding: Appeal dismissed and leave to appeal costs refused.

Reasoning:

(1) No. The Court found that the motion judge’s interpretation of the posts was reasonable. The posts were not, as the appellant argued, meant to attack the appellant “under the cloak of political debate”. The motion judge correctly articulated the meaning of “public interest” in s. 137.1(3) as described in 1704604 Ontario Ltd. v. Pointes Protection Association, 2018 ONCA 685, released concurrently with this decision, and Grant v. Torstar Corp, 2009 SCC 61, [2009] 3 S.C.R. 640. In having regard to the context and taking the expression as a whole per Pointes, the point of the posts was not to inform the reader about the appellant’s behaviour but to inform the reader of the connection between Fonseca and the appellant and denounce him by reason of that connection. Although the posts painted the appellant in a negative light, they did so in making the point that Fonseca should not be regarded as a suitable person to hold public office as a member of Parliament.

(2) No. The Court found that the motion judge did not err in applying s.137(1)(a) to the corporate respondent, Express, and stated that there was no need to decide whether the motion judge erred with respect to the respondent, Vitu, because the claim was properly dismissed under s. 137.1(4)(b). In addition to establishing the statements complained of were made by one or more of the defendants, the appellant had to establish that:

The words complained of were defamatory;

The words complained of referred to the appellant; and

The words were published to at least one other person.

The Court agreed with the motions judge that there was nothing in the motion record to connect the post to the corporate respondent, Express, and accordingly there were no grounds to believe that the defamation against Express had substantial merit. The Court found that the appellant’s reliance on Botiuk v. Toronto Free Press Publications Ltd. [1995] 3 S.C.R. 3 was misplaced because in Botiuk the libellous documents were mailed out by the company’s principal on envelopes with the corporate name and address where in this case there was no evidentiary connection to Express.

The Court then considered the claim against Vitu, who had conceeded he authored the posts. The Court noted that the motion judge’s reasoning could be seen as trying the ultimate merits of the case, but found that because the claim was properly dismissed under s. 137.1(4)(b), no firm conclusion needed to be made on this.

The Court similarly found that, because the claim was properly dismissed under s. 137.1(4)(b), there was no need to make a firm conclusion with regard to the motion judge’s finding that the appellant did not establish that there were reasonable grounds to believe the respondent had no valid defence. The Court noted that the motion judge’s analysis of the fair comment defence was flawed because the posts provided no factual basis upon which the defamatory opinion was based. Absent a factual foundation, the fair comment defence cannot succeed per WIC Radio Ltd. v. Simpson, 2008 SCC 40, [2008] 2 S.C.R. 420. There was no evidence to support the motion judge’s conclusion that the facts on which the opinion was based would be well-known to the audience to whom the blog was directed.

(3) No. The factors considered by the motion judge were reasonably capable of making out a compelling case in favour of protecting the respondent’s freedom of expression. The motion judge found that, among other factors, the posts were on the website a short time before disappearing, few people responded, and given the nature and quantity of other complaints in the public realm the respondent’s comments therefore had little capacity to cause harm to the appellant’s reputation. The motion judge’s conclusion that there was a high public interest in protecting the respondent’s posts given they were directed towards a person’s suitability for public office was also reasonable.

(4) No. Nothing in the submissions by the appellant offered any basis to review the assessment, and there was no reason the Court should not defer to the motion judge’s determination.

SFC litigation Trust v. Chan, 2018 ONCA 710

[Brown J.A. (Motions Judge)]

Counsel:

J. Bell and W. Bortolin, for the moving party/respondent

R. Rueter and M. Martin, for the responding party/appellant

Facts:

The moving party is the trustee of the SFC Litigation Trust (the “Litigation Trust”) and obtained a judgment against the responding party in his capacity as Chairman of the Board and Chief Executive Officer of Sino-Forest Corporation, in the amount of $2.904 billion as damages for fraud and breach of fiduciary duty and $5 million in punitive damages (the “Judgment”). The responding party resides in Hong Kong and has assets there, but none in Ontario. The moving party commenced an action in Hong Kong for the recognition and enforcement of the Judgment, which was automatically stayed under r. 63.01(1) of the Rules of Civil Procedure when the responding party filed a notice of appeal. The parties agreed to a consent order of the Hong Kong court that stayed the enforcement proceeding and provided that upon the release of the outcome of the appeal against the Canadian Decision or the abandonment of said appeal, or upon a lifting of the stay, parties could give a 21-day written notice to the other side to re-activate the enforcement proceeding. The moving party brings a motion under r. 63.01(5) for an order partially lifting the stay, to continue the enforcement proceeding.

Issue:

Should the motion to lift the stay of proceedings under r. 63.01(5) to enable the moving party to obtain a domestic Hong Kong judgment be granted?

Holding:

Motion dismissed.

Reasoning:

No. The Court stated that the automatic stay of an order requiring the payment of money created by r. 63.01(1) safeguards the appeal process by preserving the appellant’s access to the money to fund the appeal and by continued possession of it in the event the appeal is successful. Under r. 63.01(5), a judge of the court to which an appeal is taken can order “on such terms as are just” that a stay arising from r. 63.01(1) does not apply.

The Court found that motions under this rule should only be granted in cases where there is demonstrable and unusual hardship to the respondent and where a reasonable measure of protection can be afforded to the appellants. The Court should consider the general circumstances of the case to determine whether the order can be granted, and must be satisfied that it would be in the interests of justice to lift the stay. The Court found there were three principal factors to consider: (1) the financial hardship to the respondent if the stay is not lifted; (2) the ability of the respondent to repay or provide security for the amount paid; and (3) the merits of the appeal.

The moving party’s position is that although it will not suffer financial hardship if the stay is not lifted, it will suffer hardship as a result of the time it will take to complete the steps required to enforce the Judgment in Hong Kong. The moving party thus seeks to lift the stay so that it can secure, but not enforce, a judgment in Hong Kong. It would then be in the same enforcement position as a plaintiff who had secured an Ontario judgment against a defendant with assets in Ontario.

The Court was not persuaded that the enforcement delay the moving party may face amounted to the degree of hardship necessary to justify lifting the stay. The Court based its decision on the following factors:

The nature of the hardship described is simply a part of the ordinary cost of conducting the type of business in which the moving party is engaged. Pursuing a litigation claim invariably takes some period of time, and not all defendants reside in the jurisdiction of the domestic court. This is also not a case in which the domestic court cannot move the appeal along, as the appeal will be heard six months following perfection.
The ordinary time it takes to secure recognition of a foreign judgment in Hong Kong poses no financial risk to the moving party, as there is a worldwide injunction against the responding party which has been recognized by the Hong Kong courts.
Although it denies doing so, the moving party was essentially asking the Court to assess the merits of the responding party’s appeal. Such assessment is usually based on material provided by counsel including aspects of the record that are pertinent to the grounds of appeal. Here, the Court found that the slim record did not permit an assessment of the appeal on its merits, and only allowed the Court to say that reasons for judgment of the trial judge were long and canvassed a number of complex legal and factual issues.
The Court found it would be unfair to lift the stay to permit additional proceedings to move forward in Hong Kong, since this would require the responding party to expend resources on both the appeal and the enforcement proceedings.
The need to seek recognition and enforcement of the Ontario judgment arose from the decision of the moving party, based in Hong Kong, to sue a Hong Kong resident in Ontario. Although the Court did not place much weight on this factor, it observed that what the moving party described as hardship flowed from its choice of forum.

The Court stated that in taking all these factors into account, it would not be in the interests of justice to lift the stay of the Judgment to allow the moving party to continue the enforcement proceeding.

The Law Society of Upper Canada v. Nguyen, 2018 ONCA 709

[Sharpe, Juriansz and Roberts JJ.A.]

Counsel:

B. Teplitsky, for the appellant

G. Stuart, for the respondent

Keywords: Real Estate Law, Mortgage Fraud, Disciplinary Hearing,

Groia v. The Law Society of Upper Canada, 2016 ONCA 471, 131 O.R. (3d) 1,

The Law Society of Upper Canada v. Durno, 2013 ONSLAP 42, aff’d 2014 ONSC 2993 (Div Ct), R. v. Théroux, [1993] 2 S.C.R. 5

Facts:

The respondent, The Law Society of Upper Canada brought disciplinary proceedings against the appellant, a Toronto real estate lawyer, alleging professional misconduct in relation to eight real estate transactions. The appellant, who practices exclusively in the area of real estate law, completed approximately 750 real estate closings over a 2½ year period between 2006 and 2009. The respondent alleged that he had acted improperly in eight of those transactions and that his conduct amounted to participation in mortgage fraud. The respondent alleged that in each of those eight transactions, the purchasers had failed to provide all of the funds on closing required by the agreements of purchase and sale and had relied instead on credits that were not disclosed to the lender. The respondent alleged that the appellant’s failure to disclose the credits to the lenders amounted to assisting or participation in mortgage fraud.

The Law Society Tribunal Hearing Division Panel (the “Hearing Panel”) found that the Law Society had failed to prove that the eight transactions were fraudulent or that the appellant had dishonestly withheld information regarding the credits from the lender. However, the Hearing Panel also found that as the appellant had not disclosed the discrepancy between the amounts required to close the transactions by the agreements of purchase and sale and the amounts actually provided in seven of the eight transactions, he had failed to perform legal services in a competent fashion. The Hearing Panel imposed a penalty of two months’ suspension.

On appeal by the respondent, the Law Society Tribunal Appeal Division Panel (the “Appeal Panel”) found that the Hearing Panel had erred in law in its definition of mortgage fraud and that the error tainted its analysis of the evidence.

The Appeal Panel ruled that given the nature of the alleged frauds, the Hearing Panel should have asked itself the following questions with respect to each transaction:

Were material facts not disclosed to the lender?
If so, should an inference of dishonesty be drawn with respect to the transaction?…[A]n inference of dishonesty can be made based on circumstantial evidence, including red flags for fraud. In the absence of any other evidence, an inference should be drawn that the borrower was subjectively aware that the failure to disclose material facts put the economic expectations of the lender at risk, and accordingly was dishonest.
If the transactions were fraudulent, was the lawyer aware of, wilfully blind or reckless to the fraud?
If the lawyer had not knowingly participated in mortgage fraud, had he nevertheless committed a less serious form of professional misconduct by failing to recognize or act on signs of possible fraud?

The Appeal Panel ordered a new hearing with respect to six of the eight transactions.

By a majority, the Divisional Court affirmed the Appeal Panel’s decision, finding that the Appeal Panel’s articulation of the test for fraud was reasonable.

Issues:

Did the Divisional Court err in:

(1) upholding the Appeal Panel’s conclusion that the Hearing Panel applied the incorrect test for mortgage fraud?

(2) upholding the decision of the Appeal Panel to order a new hearing?

Holding:

Appeal allowed.

Reasoning:

(1) No. The Court of Appeal did not accept the appellant’s submission that the appropriate standard of review is correctness. The issue of mortgage fraud by practising lawyers is a matter with which the Appeal Panel deals on a regular basis and that falls squarely within its area of expertise. It follows that the applicable standard of review is reasonableness.

The Appeal Panel provided a detailed review of the principles of mortgage fraud based upon the jurisprudence of the Law Society Tribunal. The Appeal Panel’s statement of the proper test for mortgage fraud in the context of legal practice was reasonable. Furthermore, the Court of Appeal rejected the appellant’s submission that there was an inconsistency between parts one and two of the test as stated by the Appeal Panel.

(2) Yes. The Hearing Panel found the appellant “to be a credible and truthful witness” and accepted his evidence. The Hearing Panel accepted the appellant’s evidence that he was aware that the credits were red flags of fraud, that he had investigated each one, and that in each case, he was satisfied with the explanation that the purchasers or their solicitors gave that the credits were proper.

The Hearing Panel accepted the appellant’s evidence that in not disclosing these various credits to the lenders, he had not acted dishonestly but had made an honest mistake. That mistake meant that his conduct fell below the required standard and warranted a finding of failing to serve his client. However, given the lack of dishonesty, the Law Society had failed to make out an essential element of participation in mortgage fraud.

While the Court of Appeal accepted the reasonableness of the Appeal Panel’s articulation of the test for mortgage fraud, the Court disagreed that it was reasonable to order new hearings in the circumstances of this case. As is clear from step three of the Appeal Panel’s test, to sustain a finding of participation in mortgage fraud, the Law Society must prove that the lawyer was “aware of, wilfully blind or reckless to the fraud”. While it is no defence to fraud if the accused identifies a risk but merely hopes that it will not materialize, those are not the facts of this case. Additionally, while the appellant’s belief was mistaken, it nonetheless indicates that he was not aware, wilfully blind or reckless to the possibility that his failure to disclose the credits could put the lender’s economic interests at risk.

Veneruzzo v. Storey, 2018 ONCA 688

[Doherty, Brown and Huscroft JJ.A.]

Counsel:

B.F. Morrison and J.R.D. Lester, for the appellant

D. Lester and J. Moorley, for the respondents

Facts:

Veneruzzo v Storey, 2018 ONCA 688 was released concurrently with 1704604 Ontario Ltd v Pointes Protection Association, 2018 ONCA 685.

In 2008, the respondents’ daughter died in a car accident. The appellant police officer was driving the vehicle that struck the daughter’s car. In 2012, the appellant pleaded guilty to dangerous driving causing death. In 2013, the appellant was sentenced to two years. In 2015, a related civil action was settled.

After the appellant completed his sentence in 2015, he posted several comments on his Facebook page. These comments referred to the accident that resulted in the daughter’s death, her driving habits, the veracity of representations made about the daughter in the proceedings, and the conduct of the respondents and other relatives of the daughter after the accident. The respondents commenced an action for libel.

The appellant advanced the defences of truth, fair comment, and qualified privilege. In 2016, the appellant moved under s. 137.1. The motion judge dismissed the motion, holding that the appellant did not demonstrate that the Facebook posts related to matters of public interest – s. 137.1(3). The motion judge found the posts did not go beyond the appellant’s personal interests.

The motion judge also awarded costs to the respondents – s. 137.1(8) – notwithstanding that the section creates a presumption that a responding party should not have its costs when an s. 137.1 motion is dismissed. Leave was granted in this appeal to appeal the costs order because the cost provisions in s. 137.1 are different than the ordinary costs provisions and have been previously unconsidered.

Issues:

Did the motion judge err in:

(1) failing to consider the relevant Facebook posts “as a whole?”

(2) characterizing the phrase “public interest” too narrowly?

(3) awarding costs to the respondents notwithstanding s. 137.1(8)?

Holding:

Appeal dismissed. Leave granted to appeal costs and appeal dismissed.

Reasoning:

(1) No, the motion judge did not err in failing to consider the relevant Facebook posts “as a whole.” The motion judge expressly and repeatedly acknowledged that in determining whether the expression related to a matter of public interest, he must consider the publication “as a whole.” A failure to consider the expressions that are the subject matter of the lawsuit as a whole and in the context in which they are made would have constituted a failure to apply a controlling legal principle.

The appellant argued that some of the posts did not relate to the respondents and attempted to place all of the posts within public interest protection. Section 137.1(3) makes it clear that the expression at issue is the expression that gives rise to the proceeding. This expression must relate to a matter of public interest. The expressions giving rise to this proceeding related to the respondents, and statements made about private matters cannot gain public interest protection by references to other topics that might relate to public interest.

(2) No, the motion judge did not characterize the phrase “public interest” too narrowly. Nothing in the posts could reasonably be said to engage public interest issues like road safety, the operation of the justice system, or the public perception of police conduct.

The phrase “public interest” takes its meaning from the circumstances of the specific case. In this case, the Facebook posts were an attempt to create a new narrative about the accident. The narrative attempted to pit the appellant as the victim, and shifted the focus of the cause of the accident to the respondents’ daughter’s driving habits and family character.

(3) No, the motion judge did not err in awarding costs to the respondents notwithstanding s. 137.1(8). The motion judge’s findings that the respondents did not bring the lawsuit for any improper purpose and that there was no merit to the appellant’s s. 137.1 argument were available on the evidence. Both factors were properly considered in exercising his discretion in s. 137.1(8).

The costs provisions in s. 137.1 – s. 137.1(8) – are designed to encourage defendants, who have been sued over expressions on matters of public interest, to bring s. 137.1 motions for an early dismissal of those claims. The cost provisions ease the financial burden and risk placed on the defendant who seeks an early termination of what it claims is a Strategic Lawsuit Against Public Participation (otherwise known as “SLAPP”).

The purpose underlying the costs provisions disappears when the lawsuit has none of the characteristics of a SLAPP, and the impugned expression is unrelated to a matter of public interest. In these circumstances, it is not the initial lawsuit challenging the expression that represents a potential misuse of the litigation process, but rather the s. 137.1 motion.

Armstrong v. Corus Entertainment Inc., 2018 ONCA 689

[Doherty, Brown and Huscroft JJ.A.]

Counsel:

A.F. Camman and S.A. Toth, for the appellants, A, B, C and D

P.M. Jacobsen and J.L. Lefebvre for the appellant, E

S.C. Flaherty, for the respondent

Facts: In 2014, the respondent successfully ran for re-election against appellant A. Appellants B, C and D were involved directly or indirectly in appellant A’s campaign. Appellant D is appellant A’s husband. Appellant E is a broadcasting corporation that operates a radio station in London and maintains a publicly accessible online database including podcasts of broadcast and a page on which commentaries are posted.

In early September 2014, appellant A issued a press release through Facebook in which she stated that the respondent had been convicted of sexual assault in the past. She stated that her release of the information was not “about political campaigning or mudslinging”, but was rather because she was “concerned for [her] own safety, [her] family’s safety, as well as the safety of the residents of [her] community”. She went on to indicate that the respondent’s conviction was part of a disturbing pattern of bullying and intimidation by him. The respondent had in fact been convicted of sexual assault in 1987, and this assertion is not the subject of the defamation claim.

The claim focuses on appellant A’s assertion that the respondent had shown a pattern of unethical and illegal conduct, including the sexual assault, used to bully and intimidate others. On September 5, 2014, appellant A appeared on a talk radio program broadcasted by appellant E. Appellant A was questioned about her press release and asked why she chose to make a 25-year-old criminal conviction public in the middle of an election campaign. Appellant A insisted it was not for political gain but for safety reasons, as she had said in her press release, and that people had a right to know. Appellant A identified prior instances she said supported this pattern of bullying and intimidation.

The respondent alleges that the sentiment of the various statements made by all of the personal appellants was that he was unethical, a threat to the safety of individuals in the community, would engage in criminal conduct, and would bully and intimidate others, both generally and in the context of the election campaign. The respondent asserted that the statements were defamatory, clearly referred to him, and were published to others. The allegation against appellant E arose out of the September 5 interview with appellant A, a podcast of that interview posted on their website, and an article posted on the website referencing the interview, and to which was attached a newspaper article from 1987 detailing the sexual assault allegation and related court proceedings against the respondent. Although the motion judge struck the claim based on the broadcast itself for failure to comply with the notice requirement in s. 5(1) of the Libel and Slander Act, that provision did not apply to the posting of the broadcast on appellant E’s website.

The Section 131.1 Motions

The motion judge held that the appellants had satisfied him that the expressions that were the subject matter of the respondent’s claims related to “a matter of public interest” as required by s. 137.1(3). Under 137.1(4), the onus was then on the respondent to satisfy the motion judge that:

- There were grounds to believe that the his claims had substantial merit (s. 137.1(4)(a)(i));

- There were grounds to believe that the appellants had no valid defence to the allegations (s. 137.1(4)(a)(ii)); and

- The harm suffered or likely to be suffered by the respondent as a result of the appellants’ statements was sufficiently serious that the public interest in permitting him to proceed with the litigation outweighed the public interest in protecting the appellants’ freedom of expression (s. 137.1(4)(b))

The motion judge found that there was substantial merit to the respondent’s assertions that the impugned statements, when read as a whole, referred to the respondent, were published to others, and bore various defamatory meanings. He also concluded that there were grounds to believe that the specific defences raised by the personal defendants and by appellant E were not valid. Although the motion judge acknowledged that there was a public interest in protecting expression about a candidate’s suitability for office, he concluded that the harm likely to have been suffered by the respondent was sufficiently serious that the public interest in permitting the lawsuit to continue outweighed the public interest in protecting those expressions, and dismissed the motion.

Issues:

1. Did the motion judge err in dismissing the appellant E’s motion to dismiss under s. 137.1 of the Courts of Justice Act?

2. Did the motion judge err in dismissing the appellant B’s motion to dismiss under s. 137.1 of the Courts of Justice Act?

3. Did the motion judge err in dismissing the appellant D’s motion to dismiss under s. 137.1 of the Courts of Justice Act?

4. Did the motion judge err in dismissing the appellant C’s motion to dismiss under s. 137.1 of the Courts of Justice Act?

5. Did the motion judge err in dismissing the appellant A’s motion to dismiss under s. 137.1 of the Courts of Justice Act?

Holding: Appeal granted.

Reasoning:

The Court found that the motion judge had treated the appellants A, B, C and D as a group, and had attributed statements made by one to all, also treating them as a single entity when considering harm.

(1) Yes. The motion judge erred in finding that the respondent’s material provided reasonable grounds to believe that appellant E did not have a valid defence of responsible communication. The motion to dismiss should have been allowed.

The Court stated that the approach to be taken on a s. 137.1 motion, specifically the meaning and operation of ss. 137.1(4)(a) and (b), were set out in 1704604 Ontario Ltd. v. Pointes Protection Association, released concurrently. The Court found that the motion judge had correctly identified the elements of the defence of responsible communication, which had two components. First, the subject matter of the publication had to be a matter of public interest. Second, the publication had to be “responsible”, which in this context referred to steps taken to validate the accuracy of factual assertions in the publication and to the overall fairness of the publication.

The Court found that on a proper application of the responsible communication defence to the facts, the material filed by appellant E put the defence squarely in issue, and that the respondent’s material did not provide reasonable grounds to believe that appellant E did not have a valid defence of responsible communication. The publications did not contain any material factual errors and the presentation was balanced and fair. The respondent’s side was not presented because he had chosen to decline appellant E’s request for a comment. The Court found that a reasonable trier on this record could not be satisfied that appellant E did not have a valid defence of responsible communication. The respondent had failed to meet his onus under s. 137.1(4)(a)(ii) and his motion to dismiss should have been allowed.

(2) & (3) Yes. The motion judge erred in law in treating all the alleged defamatory statements as if they had been made by all personal appellants, and had failed in finding that there was substantial merit to the respondent’s argument that appellants B and D’s respective statements referred to him personally. The actions against appellants B and D should have been dismissed on that basis.

Appellants D and B had respectively made a single statement, consisting of a post made by appellant D on his Facebook page on August 30, 2014, and appellant B’s reply to that post on September 2, 2014. Appellant D’s post was not available to the general public but could be read by his 338 Facebook friends. Appellant B’s post could be read by his 211 Facebook friends and appeared on Appellant D’s post. Both statements were made before appellant A’s press release and subsequent interview. The involvement of appellants B and D in appellant A’s campaign did not make them legally responsible for any defamatory statements that may have been made by anyone in the course of the campaign. Appellant A’s statements could not be used to put meaning on appellants B and D’s earlier statements.

Appellant D’s post made no reference to the respondent by name and no reference to the particular ward in which the described inappropriate activity had occurred. The Court found that since appellant D worked on appellant A’s campaign and she was running for election in Ward 2, appellant D’s post could reasonably be taken to refer to activity in Ward 2. However, there was no language in appellant D’s post that could reasonably permit the inference that he was speaking about the respondent personally. Consequently, the respondent had failed to show that there were reasonable grounds to believe that there was substantial merit to the allegation that the post defamed him personally.

Appellant B’s post had to be read in the context of appellant D’s post, but cannot be interpreted in light of the subsequent statements of others involved in appellant A’s campaign. As such, it could not be read as agreeing or adopting appellant A’s allegation that people were being bullied and intimidated. Appellant B’s post simply made an observation that some politicians “make a career” out of bullying others, and could be read as an allegation of improper conduct against any identifiable person. The Court found that the motion judge had wrongly treated appellant B as potentially liable for all of the allegedly defamatory statements in the respondent’s pleadings. When appellant B’s liability was considered by reference to his single Facebook post in the context of appellant D’s originating post, the respondent failed to show that there were reasonable grounds to believe that there was substantial merit to his claim against appellant B.

(4) and (5) Yes. The motion judge erred in finding that public interest in allowing the respondent to pursue his defamation claim outweighed appellants C and A’s right to express their opinion on the respondent’s suitability as a candidate, a matter of significant public interest. The claims against them should have been dismissed.

The claim against appellant C was based on two Twitter posts from September 4 and September 5. Appellant C’s second tweet was posted after appellant A’s press release, and his comments could be seen as supporting appellant A’s allegations. The Court found no error in the motion judge’s conclusion that there was substantial merit to the respondent’s defamation claim against appellant C. The motion judge was also right in concluding that the respondent had demonstrated grounds to believe that the claim against appellant A had substantial merit. Her statements referred to the respondent and were widely published, and were reasonably capable of bearing at least some of the defamatory meanings that the motion judge had identified. The Court was also satisfied that the respondent had met his onus of showing reasonable grounds that appellants A and C had no valid defence to the claims, satisfying the merits analysis in s. 137.1(4)(a). The Court turned to the public interest considerations (137.1(4)(b)) and stated that in assessing the harm done or potentially done to the respondent, one had to distinguish between comments made through various media outlets to a wide public audience and comments made to a handful of Twitter followers. The motion judge erred in law in failing to draw that distinction. The respondent had demonstrated very little if any personal or financial harm, real or potential, as a consequence of the alleged defamatory statements. The Court found that the motion judge had not identified any specific harm suffered or likely to be suffered by the respondent.

With regards to appellant C’s tweets, the Court found no basis to infer that they had caused or could have caused more than minimal harm to the respondent, and on the evidence less than 200 people in total had viewed them. Moreover, it was hard to imagine how his comments added anything to the comments being made at the same time by appellant A, whose comments had a wide audience and were much more detailed. The Court found that although general damages are presumed in defamation, they would have been nominal against appellant C. The thrust of the respondent’s claim was directed at appellant A’s statements. The comments of appellant C were peripheral and their possible impact on the respondent minimal. The Court found that in an election campaign there was a high premium placed on the ability of candidates and members of the public to openly and freely express points of view about the opposing candidate. The respondent had demonstrated no harm, actual or potential, flowing from appellant C’s tweets, and absent harm or risk of harm the public interest in allowing the respondent to pursue his defamation claim could not outweigh appellant C’s right to express his opinion on the respondent’s suitability as a candidate, a matter of significant public interest.

Appellant A had initiated the alleged attack on the respondent’s character, and had repeated her allegations in various media outlets. Some of her statements could reasonably be read as casting serious aspersions on the respondent’s character. As his opponent and a member of the local political community, appellant A’s opinions could have been given significant weight, and her comments had the potential to harm the respondent’s reputation. The Court found there was almost no evidence of any special damage suffered by the respondent as a result of appellant A’s comments, and that the respondent’s continued electoral success suggested that any harm to his reputation had been minimal. Against this modest evidence of harm or potential harm stood the very strong public interest in promoting freedom of expression by candidates during the electoral process. Although there was no doubt that candidates had and would step over the line between strongly stated opinions and defamatory comments, by enacting s. 137.1 the Legislature had acknowledged that in certain circumstances permitting vindication would come at too high a cost to freedom of expression. The respondent had not shown that the public interest in allowing him to continue with his claim against appellant A outweighed the public interest in protecting her right to express her opinions about another candidate in the course of an election campaign.

Destefano v. Gerry, 2018 ONCA 701

[Sharpe, Juriansz and Roberts JJ.A.]

Counsel:

A.P. Fazari, for the applicants (respondents)

H.G., acting in person by teleconference (appellant)

Keywords: Jurisdiction, Interlocutory, Courts of Justice Act, s. 19(1)

Facts:

The parties are involved in a custody dispute. H.G. brought a motion for an order varying interim access and a mental health assessment for the child, among other things. The motion judge granted some of the relief related to the mental health referral, but denied the other relief requested. H.G. appealed. The respondents moved to quash the appeal on the grounds that the costs orders and orders varying interim access under appeal were interlocutory in nature and that the Court of Appeal does not have jurisdiction to entertain the appeal.

Issue:

(1) Does the Court of Appeal have jurisdiction to hear the appeal?

Holding:

Appeal dismissed.

Reasoning:

(1) No, the Court of Appeal does not have jurisdiction to hear appeals as of right from temporary or interlocutory orders.

The orders under appeal do not determine the real matter in dispute between the parties. Since the costs order was made in relation to an interlocutory order, it is also interlocutory. The proper route for an appeal is with the Divisional Court, with leave and not to the Court of Appeal: Courts of Justice Act, s. 19(1).

The appellant sought an order that varied interim access, that the child receive a mental health assessment, and that consents be provided for medical records and participation in relation to an intake meeting with a counsellor. These matters are collateral to the custody dispute and do not resolve it. The motion judge stated that the order was temporary and this is evident from the terms of the order.

Abdul v. Ontario College of Pharmacists, 2018 ONCA 699

[Rouleau, Pardu and Roberts JJ.A.]

Counsel:

B. Gover, A. Dantowitz and B. Kates, for the appellant

N.M. Abramson and R. Barbiero, for the respondent

R. Steinecke and N. Danson, for the intervener

Facts:

In 2012, the Ontario College of Pharmacists (the “College”) received information that the respondent’s pharmacy was re-dispensing unused medications. This information came from C.D. and G.V. The College failed to take steps under s. 25 of the Health Professions Procedural Code (the “Code”) in relation to G.V.’s complaint. Section 25(6) of the Code required notice of the complaint to the member within fourteen (14) days of receipt, and s. 28 required that the complaint be dealt with within one hundred and fifty (150) days.

In 2013, the College’s Manager of Investigations and Resolutions called G.V. to discuss the complaint process. Ultimately, the complaint was withdrawn by G.V. so it could proceed through the Registrar-initiated process under s. 75. The Registrar considered the information and signed an appointment of investigators, which the Inquiries, Complaints and Reports Committee (“ICRC”) approved.

The investigation was summarized in a report to which the respondent was given an opportunity to reply. The respondent provided a cursory response. The ICRC referred specified allegations of professional misconduct to the Discipline Committee, resulting in a hearing.

At the hearing, the respondent moved to quash the charges arguing that the College had lost jurisdiction by failing to abide by the complaints process mandated by the Code. The majority of the Discipline Committee dismissed the motion, finding that the College properly handled the information provided by G.V.; the respondent suffered no prejudice; and the College satisfied the procedural conditions for referral to a Registrar.

The Divisional Court granted the respondent’s application for judicial review and quashed the decision, ordering that the College was prohibited from prosecuting the charges. The Divisional Court held that the College must fulfill its statutory obligations by dealing with complaints in accordance with s. 25 of the Code, treating the departure from strict compliance as resulting in a loss of jurisdiction.

Issue:

Did the Divisional Court err in:

(1) holding that the College and Discipline Committee had no jurisdiction to proceed with the charges under the Registrar process (s. 75)?

(2) finding that the decision of the Discipline Committee was unreasonable?

Holding:

Appeal allowed.

Reasoning:

(1) Yes, the Divisional Court erred in holding that the College and Discipline Committee did not have jurisdiction.

The College’s failure to process G.V.’s complaint under s. 25 of the Code did not automatically result in the loss of jurisdiction to investigate. Section 25 imposes rules of natural justice and a duty of procedural fairness. However, a failure to follow the rules or comply with a duty does not automatically cause a loss of jurisdiction to process a complaint.

(2) Yes, the Divisional Court erred in finding that the decision of the Discipline Committee was unreasonable.

As required, the Discipline Committee balanced the public interest in the investigation and prosecution of charges against the respondent, with the requirement that he received procedural fairness. The Discipline Committee concluded that the respondent’s rights were not denied, and this conclusion was reasonable and open to the Discipline Committee on the record.

There was no evidence of prejudice to the respondent. While not advised of the complaint until sixteen (16) months after it was filed, there was no evidence that his ability to defend himself was impaired by a failure to give notice within fourteen (14) days of a complaint. There are differences between a complaint and Registrar-initiated process, but both ensure basic procedural fairness. Both involve the ICRC in screening allegations. Both involve notice to the member of the issues and the right to make representations to the ICRC before it makes a determination as to whether to refer allegations to the Discipline Committee.

The Discipline Committee concluded that the Registrar-initiated process was handled properly by the College, the Registrar’s request for the appointment of an investigator under s. 75(1)(a) was appropriate, the ICRC approved the appointment, and the ICRC’s request to convene a discipline panel to review the allegations followed. As long as there was no procedural unfairness to the member, the choice to accept the withdrawal of a complaint and to proceed with the Registrar-initiated process cannot be criticized.

Winter v. Sherman Estate, 2018 ONCA 703

[Sharpe, Juriansz and Roberts JJ.A.]

Counsel:

B. Teplitsky, for the appellants

K. Kay and M. Walli, for the respondents

Facts:

The appellants alleged that their cousin, the late Dr. Sherman, breached an ad hoc fiduciary duty to look after their financial interests by dishonouring an option agreement. The option agreement arose out of Dr. Sherman’s purchase of a family business owned by the estates of the appellants’ parents, while the appellants were still minors (the “Empire Companies”). The option agreement would have allowed the appellants to be employed by Empire Companies and to own 5% of their stock.

The motion judge dismissed the appellants’ action for two reasons. First, there was no genuine issue requiring a trial on whether Dr. Sherman owed the appellants an ad hoc fiduciary duty to look after their financial interests. Second, the action was an abuse of process because it attempted to re-litigate issues previously determined.

In addition to this action, the appellants began a separate action against Royal Trust in 2006 alleging negligence in their drafting of the option agreement. Royal Trust was the executor of the appellants’ parents’ estates. That action was dismissed by the Ontario Court of Appeal in 2014 by motion for summary judgment brought by Royal Trust.

Issue:

Did the motion judge err in:

(1) holding that there was no genuine issue requiring a trial on whether Dr. Sherman owed the appellants an ad hoc fiduciary duty to look after their financial interests?

(2) finding that the appellants’ action was an abuse of process?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The motion judge properly used the criteria for the creation of an ad hoc fiduciary duty from Elder Advocates of Alberta Society v Alberta, 2011 SCC 24. After considering the relationship between the parties and the communications between Royal Trust and Dr. Sherman about the purchase of the Empire Companies, the motion judge found that the entirety of Dr. Sherman’s obligations to the appellants were set out in the purchase agreement and option agreement. Dr. Sherman never undertook to look after the appellants’ interests or to abandon his own self-interest in those agreements. Therefore, no fiduciary duty was created as between Dr. Sherman and the appellants.

(2) No. The doctrine of abuse of process is broader than, and to be distinguished from, the strict res judicata or issue estoppel doctrines. This is because abuse of process bars litigation on issues that “could have been determined” in prior proceedings, rather than only issues that were “necessarily bound up with the determination of” issues in prior proceedings: Danyluk v Ainsworth Technologies Inc, 2001 SCC 44 at para 54. In addition, abuse of process bars litigation that violates principles such as finality and consistency, or that attempts to re-litigate previously decided facts: Toronto (City) v CUPE, Local 79, 2003 SCC 63 at para 37.

The subject matter raised in this proceeding arose from the same facts and issues in the 2006 action against Royal Trust. Those facts and issues were finally determined by the Ontario Court of Appeal in 2014. Therefore, this action constituted an abuse of process.

Shaun Developments Inc. v. Shamsipour, 2018 ONCA 707

[Lauwers, Miller and Nordheimer JJ.A.]

Counsel:

D. Taub and E. Gersh, for the appellants

M. Kestenberg and T. Slahta, for the respondent

Keywords: Summary Judgment, Contract, Agreement of Purchase and Sale, Intention of the Parties, Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19

Facts:

The respondent, as purchaser and the appellants, as vendors, entered into three inter-connected agreements of purchase and sale (the “Agreements”) with respect to three contiguous properties in the City of Toronto. The Agreements were conditional upon the respondent receiving in writing a “final, unappealable and official order” by the Ontario Municipal Board (“OMB”) granting an appeal heard on August 26, 2015 and approving a proposed development of the three properties (the “OMB Decision”). Handwritten changes were made to the Agreements that required the respondent to either deliver notice in writing that the OMB condition was fulfilled, or to waive the OMB condition, within 7 days of the “verdict” or “official verdict.” Those terms were not defined in the Agreements. The OMB released its decision on March 15, 2016, granting the appeal and approving the proposed development. The formal Order was withheld pending completion of the site plan process and approval of the form of zoning by-law by the City. The City of Toronto requested a reconsideration of that approval which was dismissed with reasons issued on June 28, 2016.

The parties agree that the OMB decision within the meaning of the Agreements was not issued because there was no final, unappealable and official Order. The issue is the interpretation of the handwritten terms “verdict” and “official verdict” and whether they have the same meaning as the defined term “OMB Decision”. The appellants submit that the motion judge erred in finding the terms had the same meaning, and contend that the fact that different terms were used presumptively suggests that different meanings were intended by the parties.

Issue:

Did the motion judge err in finding that the handwritten terms “verdict” and “official verdict” had the same meaning as the defined term “OMB Decision”?

Holding:

Appeal dismissed.

Reasoning:

No. The Court found that on a fair and purposive reading of the Agreements, the parties intended for those terms to have the same meaning. The purpose of the Agreements was to permit the respondent to make a final decision on whether to be bound by the Agreements based on the final conclusion reached by the OMB regarding the proposed development.

The appellants relied on the principle that meaning must be given to the choice to use one term in one clause and a different term in a different clause of the same agreement (Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19), but the Court found that the application of that principle depended on the circumstances of the case, the nature of the differences between the terms, and any possible reason for the use of different terms.

Here, the Court found of particular significance, the fact that the terms “verdict” and “official verdict” were handwritten changes to the formal Agreements. The changes were made by the parties without the assistance of their lawyers, which explained the different terms used. The variance in terms did not change the reality that the intention of the parties was clear, and that central to the Agreements was the receipt of a final decision of the OMB. The parties agreed that no such final decision was ever received before this dispute arose.

The Court agreed with the motion judge that the provisions in the Agreements with respect to closing which specifically provided that closing was “subject to the Buyer accepting the OMB Decision” were consistent with an interpretation of the Agreements under which the terms “verdict” and “official verdict” of the OMB are given the same meaning as the term “OMB Decision”.

Clarke v. Kokic, 2018 ONCA 705

[Lauwers, Miller, and Nordheimer JJ.A.]

Counsel:

B. Kelly, for the appellants

T. Johnson, for the respondents

Keywords: Property Law, Easement, Rule Against Perpetuities, Renovations, Ancillary Right Fallowfield v. Bourgault (2003), 68 O.R. (3d) 417, [2003] O.J. No. 5206

Facts:

The respondents owned a building attached to an adjacent building owned by the appellants. Under the title deeds the respondents had an easement over part of the appellants’ property providing interior access to the upper floors and roof of the respondents’ property. When the easement was first granted the respondents’ predecessors in title had no other access to the third floor or roof of their property except through the appellants’ property, but this was no longer the case. The respondents began renovations to adapt their property for commercial use on the first two floors and residential use on the third by widening a door frame the easement passed through and replacing some doors to facilitate a fire escape. The appellants interfered with the respondents’ right of way, and the respondents applied for declarative and injunctive relief. The application judge declared the easement valid and ordered the appellants not to interfere with the respondents’ rights under the easement, including the right to make the renovations.

Issue:

(1) Did the application judge err in finding the easement permitted the renovations?

(2) Does the rule against perpetuities apply?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The Court found that the application judge’s finding that that use of the easement remains of the same general nature was reasonable and supported by evidence. The easement language in question reserved a right-of-way along the existing hallways, and this grant was silent on the size of the door frame. The Court observed that the dimensions of the easement remain the same as before, and neither the widening of the door frames nor the replacement of the doors increases the burden on the servient tenement. The appellants argued that, based on the Court of Appeal’s decision in Fallowfield v. Bourgault (2003), 68 O.R. (3d) 417, [2003] O.J. No. 5206, the respondents had no ancillary right to make changes to the doors or door frame to facilitate a fire escape because the changes are not necessary for the use of the easement given that the respondents had the alternative of building fire escapes out of windows. The Court found that the application judge did not err in finding that the use of the easement in the event of a fire was within the scope of the original grant because the easement contemplated ingress and egress for all purposes. Therefore, the renovations were “reasonably necessary” per Fallowfield because they are necessary for the respondents to use the easement for a purpose for which they are entitled to use it for.

(2) No. The Court found that the rule against perpetuities has no application in this case because the rule, as stated in Sutherland Estate v. Dyer, (1991) 4 O.R. (3d) 168, [1991] O.J. No. 1457 (Gen Div.), only applies to contingent interests. An express easement includes ancillary rights reasonably necessary for the use and enjoyment of the easement. These rights vest at the time of the grant, meaning they are not contingent interests and are not subject to the rule.

Criminal Decisions

R. v. Bidawi, 2018 ONCA 698

[Lauwers, Miller and Fairburn JJ.A.]

Counsel:

A. Hotke, for the appellant

K. Wells, for the respondent

Keywords: Procedure, Amendments to Summary Conviction Proceedings, Limitation Period, Firearms Offences, Criminal Code of Canada ss. 601(6), 786(2) and 86, Firearms Act s. 117(h), Display, Transportation and Handling of Firearms by Individuals Regulations ss. 5 and 10, R v Joy Oil Co. Inc., (1959) 123 CCC 370 (Ont CA), R v Irwin, (1998) 107 OAC 102, R v S(A), (1998) 113 OAC 340, R v Morozuk, [1986] 1 SCR 31, R v Côté, [1978] 1 SCR 8, R v Dudley, 2009 SCC 58, R v Robinson, (2001) 143 OAC 80, R v Munyaneza, 2014 QCCA 906

R. v. Judd, 2018 ONCA 724

[Watt, Huscroft and Fairburn JJ.A.]

Counsel:

L. M. Wilhelm, for the appellant

K. Wilson, for the respondent

Keywords: Possession for the Purpose of Trafficking, Production of Drug, Sentencing, Controlled Drugs and Substances Act, s. 7(2)(b), R. v. Vu, 2018 ONCA 436, R. v. Tran, 2017 ONSC 651

R. v. Newton, 2018 ONCA 723

[Watt, Huscroft and Fairburn JJ.A.]

Counsel:

D. Doucette and Z. Shariff, for the appellant

F. Au, for the respondent

Keywords: Manslaughter, Sentencing, Criminal Code of Canada, s. 606(4)

R. v. Macintyre-Syrette, 2018 ONCA 706

[Juriansz, Watt and Miller JJ.A]

Counsel:

K. Bailey and J. Fennell, for the appellant

K. Rawluk, for the respondent

Keywords: Sentencing Principles, Conditional Sentences, Sexual Assault, Criminal Code of Canada, s.718.2(e), R. v. Gladue, [1999] 1 S.C.R. 688, R. v. Ipeelee, 2012 SCC 13, R. v. Wells, 2000 SCC 10, R. v. Proulx, 2000 SCC 5

R. v. Theoret, 2018 ONCA 700

[Watt, Huscroft and Fairburn JJ.A.]

Counsel:

R. Litkowski and J. Zita, for the appellant

K. Doherty, for the respondent

Keywords: Judicial Notice, Aggravated Assault, Expert Evidence

R. v. M.J., 2018 ONCA 708

[Watt, Huscroft and Fairburn JJ.A.]

Counsel:

R. Litkowski, for the appellant

H. Freeman, for the respondent

Keywords: Conviction Appeal, Criminal Negligence Causing Bodily Harm, Failing to Provide the Necessaries of Life, Jury Instructions, Stay of Proceedings, Sentencing Principles, Sentence Appeal, R. v. Kienapple, [1975] 1 S.C.R. 729, R. v. Naglik, [1993] 3 S.C.R. 122, R. v. J.F., 2008 SCC 60, R. v. R. (W.) (2004), 197 C.C.C. (3d) 566 (Ont. C.A.), R. v. Lacasse, 2015 SCC 64

R c. Burroughs, 2018 ONCA 704

[Hoy, van Rensburg and Pardu JJ.A.]

Counsel:

C. Deslauriers, for the appellant

P.G. Cowle, for the respondent

Keywords: Vol Qualifié, Robbery, Séquestration, Sequestration, Usage d’armes à feu, Using Firearm, Détermination de la Peine, Sentencing, Peines Minimales, Mandatory Minimum Sentences, Comparution du Prévenu devant un Juge de la Paix, Appearance of Accused before Justice, Abus de Procédure, Abuse of Process, Code Criminel, L.R.C. (1985), ch. C-46, Criminal Code, R.S.C., 1985, c. C-46 ss. 85, 86, 88, 279(2), 344(1)(a) and 503, Charte canadienne des droits et libertés, Charter of Rights and Freedoms, s. 24(1), R c. Babos, 2014 CSC 16, R v. Babos, 2014 SCC 16, R c. Kineapple, [1975] 1 S.C.R. 729, R v. Kineapple, [1975] 1 R.C.S. 729, R c. Pringle, [1989] 1 R.C.S. 1645, R v. Pringle, [1989] S.C.R. 1645, R v. Rocheleau, 2013 ONCA 679

Civil Endorsements

2212886 Ontario Inc. v. Obsidian Group Inc., 2018 ONCA 715

[Pepall, van Rensburg and Trotter JJ.A.]

Counsel:

G. Adair, for the appellants

D. MacKeigan and C. Vegso, for the respondents

Keywords: Appeal Costs

R. v. Papasotiriou, 2018 ONCA 719

Counsel:

J. Lockyer, for the applicant/appellant

F. Au, for the respondent

Keywords: First Degree Murder, Bail Pending Appeal, Release Order, Public Safety, Public Confidence in the Administration of Justice, R. v. Papasotiriou-Lanteigne, 2018 ONSC 1994, Criminal Code of Canada, s. 515(10)(a), 522(2), 679(3), 679(3)(c), R. v. Oland, 2017 SCC 17, R. v. Forcillo, 2016 ONCA 606

The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

Any article or other information or content expressed or made available in this Section is that of the respective author and not of the OBA.

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