Please find below our summaries of the civil decisions released by the Court of Appeal for Ontario during the week of August 24 to 28, 2020. There was a plethora of decisions released.
The headliner last week was undoubtedly Duffy v. Canada (Senate). Senator Duffy was acquitted of criminal charges relating to the scandal surrounding the claiming of expenses relating to his residence and the $90,000 he received from Nigel Wright of the PMO’s office that he used to repay the taxpayers. Senator Duffy sued the Canadian Senate for malicious prosecution and other alleged misfeasance. In a lengthy decision, the Court concluded that the Senate is immune from suit with respect to these issues because of parliamentary privilege. The motion judge’s decision dismissing the claim for want of jurisdiction was therefore upheld.
In Rukavina v. Ottawa (Police Services Board), the Court held that a claim for false arrest and other torts by a former police officer against his police force was not a dispute that was subject to the collective bargaining agreement and was therefore not outside the court’s jurisdiction.
In OZ Merchandising Inc. v. Canadian Professional Soccer League Inc. appellant’s counsel was refused leave to exceed the Court’s 30-page limit for factums in order to file an over 500 page, or in the alternative, a 125 page factum.
Other topics covered included family law (transferring appeal to another court), extension of time to appeal in an OSC matter, vexatious litigants, agreements of purchase and sale of land, child protection, stay of an order for specific performance pending appeal, stay of an order authorizing the destruction of files in the Indian Residental School Settlement and the remedy of a constructive trust in an oppression and breach of fiduciary duty case.
Bernard v. Fuhgeh, 2020 ONCA 529
[Paciocco J.A. (Motion Judge)]
Counsel:
WF, acting in person
MB, acting in person
Keywords: Family Law, Custody and Access, Final Orders, Motion to Change, Material Change in Circumstances, Civil Procedure, Appeals, Jurisdiction, Transfer, Motion to Quash, Frivolous, Vexatious, Abuse of Process, Vexatious Litigants, Courts of Justice Act, R.S.O. 1990, c. C-43, ss. 110, 140, Family Law Rules, O. Reg 114/99, Rules of Civil Procedure, Rule 2.1.01, Scaduto v. Law Society of Upper Canada, 2015 ONCA 733, Cheung v. Samra, 2018 ONCA 923, White v. Garrow, [2011] O.J. No. 6482 (C.A.), Dunnington v. 656956 Ontario Ltd. (1992), 9 O.R. (3d) 124 (Div. Ct.), Lukezic v. Royal Bank of Canada, 2012 ONCA 350
Facts:
This was a custody and access dispute. One party moved to transfer the appeal to the Divisional Court. The other moved to have the appeals dismissed on the basis that it was frivolous, vexatious or an abuse of process.
Issues:
- Should the appeal be transferred to the Divisional Court?
- Should the appeal be dismissed as frivolous, vexatious or an abuse of process?
Holding:
Motions dismissed.
Reasoning:
- No. In exercising its discretion on whether to transfer an appeal to another court, the Court will consider the merits of the proposed appeal, any undue prejudice to the responding party as a result of further delay and whether the moving party moved expeditiously upon becoming aware that jurisdiction was in dispute. In this case, given the moving party’s appropriate concessions, there was no merit to the appeal. There would also be undue prejudice to the responding party in responding to a meritless appeal and in the further attendant delay. The motion to transfer was therefore dismissed.
- No. In order to obtain a vexatious litigant declaration, a party must move by way of originating process under s. 140 of the Courts of Justice Act, not by way of motion. There was no serious request for a vexatious litigant ruling in this case.
Ontario Securities Commission v. Bluestream Capital Corporation, 2020 ONCA 530
[Paciocco J.A. (Motion Judge)]
Counsel:
Mark A. Ross and Eric Brousseau, for the moving party
Ian K. Latimer and Asad Ali Moten, for the responding party
Keywords: Civil Procedure, Appeals, Extension of Time, Rules of Civil Procedure, Rule 3.02, Enbridge Gas Distributions Inc. v. Froese, 2013 ONCA 131, Kefeli v. Centennial College of Applied Arts & Technology, [2002] O.J. No. 3023 (C.A.), Transportaction Lease Systems Inc. v. Spire Freezers Ltd., 2011 ONSC 5509
Facts:
Bluestream Capital Corp (“Bluestream”) had been used as a vehicle of fraud by PB. The respondent, the Ontario Securities Commission (“OSC”), obtained a disgorgement order against Bluestream so that it could attempt to recoup funds for PB’s victims.
Camerlengo Holdings Inc. is a closely held family holding company. During its investigation, the OSC discovered that Camerlengo Holdings Inc. lent $200,000 to Bluestream. The OSC issued a notice of garnishment to Camerlengo Holdings Inc. for this amount. A garnishment hearing was scheduled before Schreck J. The sole ground of opposition offered by Camerlengo Holdings Inc. at that hearing was that losses suffered by members of the C family, as victims of the frauds, should be set off against Camerlengo Holding Inc.’s debt to Bluestream.
In April 2018, Schreck J. denied the set-off defence, declaring that Camerlengo Holdings Inc. owed $200,000 to Bluestream and must pay that amount to the Sheriff. Camerlengo Holdings Inc. did not appeal that decision.
Discussions were undertaken between C and the OSC about recovery of the debt. On October 24, 2018, OSC counsel notified C that the OSC would obtain the records of Camerlengo Holdings Inc. and go after any improper transactions. A judgment debtor examination was held in November 2018. In December 2019, after further investigation, the OSC commenced a civil action against C and his wife. The OSC alleged, among other things, that the June 1996 conveyance by C of his interest in the matrimonial home to his spouse was a fraudulent conveyance, that C wrongly commingled personal and corporate funds, and that he improperly disbursed funds through Camerlengo Holdings Inc. for his benefit and the benefit of his wife. This activity allegedly included the false identification of the Bluestream loan deposit as a shareholder advance by C to Camerlengo Holdings Inc., declaring illegal dividends, and paying funds from Camerlengo Holdings Inc. to himself, his wife and others, to the prejudice of creditors.
Camerlengo Holdings Inc. now brings a motion pursuant to Rule 3.02 of the Rules of Civil Procedure to extend the time within which Camerlengo Holdings Inc. can appeal Schreck J.’s decision of April 2018.
Issues:
Should the moving party be granted an extension of time to appeal?
Holding:
Motion dismissed.
Reasoning:
No. While not in and of itself fatal, the moving party had no intention to appeal within the time period within which to appeal. This is an important consideration unless the explanation for an intention to appeal mitigates its absence. The explanation advanced in this case does not do so. C made a tactical decision not to appeal Shreck J’s decision because he believed it to be pointless and the decision unenforceable because Camerlengo Holdings Inc. had no assets and was therefore judgment-proof.
Moreover, the over two year delay would prejudice the OSC, whose efforts were being undertaken on behalf of victims of fraud.
As to the merits of the proposed appeal, while arguable, Schreck J’s decision was not obviously incorrect. Whether the loan was payable and therefore Camerlengo Holdings Inc. was subject to garnishment was not an issue raised before Schreck J. In any event, lower court authority to the effect that a party was not subject to garnishment if the loan they owed to the judgment debtor was not yet due and payable (Transportaction Lease Systems Inc. v. Spire Freezers Ltd., 2011 ONSC 5509) was not binding on the Court, and there was no appellate authority holding that this was the case. The court in Transportaction Lease Systems specifically left open the possibility that another judge may come to a different decision where there are allegations of fraudulent transactions or conveyances taken. In this case such allegations have been made.
Finally, in deciding where the interests of justice lie, the Court declined to find that setting aside longstanding transactions with respect to C’s matrimonial home would be inequitable. That would require prejudging of the OSC’s fraudulent conveyance action, which the Court was not prepared to do. If the Court was to get into the business of considering the equity of the OSC’s action, it would also have to consider the fact that unless the OSC succeeds, C may receive a windfall. As the sole shareholder of Camerlengo Holdings Inc., he will have had the benefit of a $200,000 loan that the corporation never had to repay.
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