Court of Appeal Summaries (November 18-22)

29 novembre 2024
John Polyzogopoulos

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Civil Decisions

Rebello v. Ontario (Transportation), 2024 ONCA 842

Keywords: Crown Liability, Civil Procedure, Limitation Periods, Discoverability, Costs, Proceedings Against the Crown Act, R.S.O. 1990, c. P. 27, Limitations Act, 2002, S.O. 2002, c. 24, ss. 4, 5(1), 5(2), Apology Act, 2009, S.O. 2009, c. 3, Courts of Justice Act, R.S.O. 1990, c C.43, s. 131, Rules of Civil Procedure, rr. 49.10(1), 57.01, Fockler v. Spiegel, 2023 ONCA 148, Dass v. Kay, 2021 ONCA 565, Housen v. Nikolaisen, 2002 SCC 33, Longo v. MacLaren Arts Centre, 2014 ONCA 526, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, Galganov v. Russell (Township), 2012 ONCA 410, Rebello v. Ontario (Community Safety and Correctional Services), 2024 ONCA 718, Ontario v. Rothmans Inc., 2012 ONSC 1804

Guillaume v. Ontario (Animal Care Review Board), 2024 ONCA 851

Keywords: Administrative Law, Animal Care Review Board, Pet Law, Animal Welfare, Civil Procedure, Appeals, Stay Pending Appeal, Provincial Animal Welfare Services Act, 2019, R.S.O. 2019, c. 13, s. 35(4), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 21(5), Guillaume v. Chief Animal Welfare Inspector, 2023 ONACRB 52, Guillaume v. Chief Animal Welfare Inspector, 2023 ONSC 5782, Guillaume v. Ontario (Chief Animal Welfare Inspector), 2024 ONSC 1087, RJR-MacDonald Inc. v. Canada, [1994] 1 SCR 311, Graff v. Network North Reporting and Mediation, 2020 ONCA 319, Sickinger v. Sickinger, 2017 ONCA 760, Langer v. Yorkton Securities Inc. (1986), 57 O.R. (2d) 555 (C.A.), Teitler v. Dale, 2021 ONCA 577, Derakhshan v. Narula, 2018 ONCA 658, Issai v. Rosenzweig, 2011 ONCA 112

Aroma Franchise Company Inc. v. Aroma Espresso Bar Canada Inc., 2024 ONCA 839

Keywords: Contracts, Franchising, Civil Procedure, Arbitration, International Commercial Arbitration, Procedural Fairness, Reasonable Apprehension of Bias, UNCITRAL Model Law on International Arbitration, article 12, International Bar Association Guidelines on Conflicts of Interest in International Arbitration, International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sched. 5, Police Services Act, R.S.O. 1990, c. P.15, Halliburton Company v. Chubb Bermuda Insurance Ltd., [2020] UKSC 48, Aiteo Eastern E & P Company Ltd. v. Shell Western Supply and Trading Ltd. & Ors, [2024] EWHC 1993 (Comm), Jacob Securities Inc. v. Typhoon Capital B.V., 2016 ONSC 604, Conmee v. Canadian Pacific Railway Co. (1888), 16 O.R. 639 (Q.B.), Grupo Unidos por el Canal, S.A. v. Autoridad del Canal de Panama, 78 F. (4th) 1252 (11th Cir. 2023), Wewaykum Indian Band v. Canada, 2003 SCC 45, Committee for Justice and Liberty et al. v. National Energy Board et al., [1978] 1 S.C.R. 369, Porter v. Magill, [2001] UKHL 67, Dufferin v. Morrison Hershfield, 2022 ONSC 3485, Ontario Provincial Police v. MacDonald, 2009 ONCA 805, Terceira v. Labourers International Union of North America, 2014 ONCA 839, Housen v. Nikolaisen, 2002 SCC 33, R. v. S. (R.D.), [1997] 3 S.C.R. 484, Rando Drugs Ltd. v. Scott, 2007 ONCA 553, leave to appeal refused, [2007] S.C.C.A. No. 494, Locabail (U.K.) Ltd. v. Bayfield Properties Ltd., [2000] 1 All E.R. 65 (Eng. C.A.), Szilard v. Szasz, [1955] S.C.R. 3

Halton Condominium Corporation No. 61 v. Kolarovaliev, 2024 ONCA 848

Keywords: Real Property, Condominiums, Remedies, Compliance Orders, Civil Procedure, Appeals, Fresh Evidence, Condominium Act, 1998, S.O. 1998, c. 19 s. 134, Palmer v. The Queen, [1980] 1 S.C.R. 759

Infor Financial Inc. v. CentriLogic Inc., 2024 ONCA 849

Keywords: Contracts, Interpretation, Civil Procedure, Costs, Offers to Settle, Rules of Civil Procedure, r. 49.10, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Prism Resources Inc. v. Detour Gold Corporation, 2022 ONCA 326, McFlow Capital Corp v. James, 2021 ONCA 753, Shaulov v. Law Society of Ontario, 2023 ONCA 95

Fehr v. Sun Life Assurance Company of Canada, 2024 ONCA 847

Keywords: Contracts, Insurance, Duty of Good Faith and Fair Dealing, Civil Procedure, Class Proceedings, Certification, Common Issues, Amending Pleadings, Limitation Periods, Discoverability, Limitations Act, 2002, S.O. 2002, c. 24, ss. 4 and 5, Sched. B, Insurance Act, S.O. 1990, c. I.8, s. 439, Class Proceedings Act, 1992, S.O. 1992, c. 6, ss. 8(3), 12 and 28, Rules of Civil Procedure, r. 26.01, Polla v. Croatian (Toronto) Credit Union Limited, 2020 ONCA 818, Grant Thornton LLP v. New Brunswick, 2021 SCC 31, Di Filippo v. Bank of Nova Scotia, 2024 ONCA 33, 1100997 Ontario Limited v. North Elgin Centre Inc., 2016 ONCA 848, Klassen v. Beausoleil, 2019 ONCA 407, Crombie Property Holdings Limited v. McColl-Frontenac Inc., 2017 ONCA 16, Soper v. Southcott (1998), 39 O.R. 737 (C.A.), Levac v. James, 2023 ONCA 73, Smith v. Inco Limited, 2011 ONCA 628, R. v. Reid, 2016 ONCA 524, Becker v. City of Toronto, 2020 ONCA 607, Logan v. Canada (Minister of Health) (2003), 36 C.P.C. (5th) 176 (Ont. S.C.), Green v. Canadian Imperial Bank of Commerce, 2014 ONCA 90, Karkhanechi v. Connor, Clark & Lunn Financial Group Ltd., 2022 ONCA 518, Marvelous Mario’s Inc. v. St. Paul Fire and Marine Insurance Co., 2019 ONCA 635, Spina v. Shoppers Drug Mart Inc., 2024 ONCA 642, Richards v. Sun Life Assurance Company of Canada, 2016 ONSC 5492

Short Civil Decisions

World Financial Solutions Inc. v. 2573138 Ontario Ltd., 2024 ONCA 844

Keywords: Real Property, Land Titles, Rectification of Register, Civil Procedure, Appeals, Jurisdiction, Land Titles Act, R.S.O. 1990, c. L.5., s. 27, CIBC Mortgages Inc. (c.o.b. Firstline Mortgages) v. Computershare Trust Co. of Canada, 2015 ONCA 846

Zhang Estate v. Wainfleet (Township), 2024 ONCA 846

Keywords: Municipal Law, By-Laws, Jurisdiction, Ultra Vires, Torts, Negligence, Misfeasance in Public Office, Negligent Assumption of Jurisdiction, Trespass, Nuisance, Civil Procedure, Evidence, Admissibility, Expert Evidence, Procedural Fairness, Sufficiency of Reasons, Weed Control Act, R.S.O. 1990, c. W.5, Corporation of the Township of Wainfleet Bylaw No. 028-2013, Being a bylaw to designate certain diseased fruit trees as local weeds in the Township of Wainfleet (11 June 2013)

Sabaratnam v. Yohanathan, 2024 ONCA 845

Keywords: Torts, Defamation, Defences, Truth, Fair Comment, Damages, Civil Procedure, Summary Judgment, Appeals, Fresh Evidence, R. v. Palmer, [1980] 1 S.C.R. 759, OZ Merchandising Inc. v. Canadian Professional Soccer League Inc., 2021 ONCA 520

Chowdhury v. Exquisite Bay Development Inc., 2024 ONCA 852

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Construction, Torts, Conspiracy, Civil Procedure, Striking Pleadings, Limitation Periods, Discoverability, Rules of Civil Procedure, rr. 21.01(1)(b) and 59.06(2)(a), ADGA Systems International Ltd. v. Valcom Ltd. (1999), 43 O.R. (3d) 101 (C.A.)

CIVIL DECISIONS

Rebello v. Ontario (Transportation), 2024 ONCA 842

[Hourigan, Madsen and Pomerance JJ.A.]

COUNSEL:

T. R., acting in person

A. Mortimer and B. Lekhi, for the respondent

FACTS:

The appellant appealed the order of the trial judge dismissing her claims against MTO arising from a mistakenly transferred Vehicle Identification Number (“VIN”) in 2018, and a medical drivers’ license suspension in 2016. She also sought leave to appeal the related costs order. The trial judge dismissed the appellant’s claims on the basis that they were statute-barred and ordered costs against her on a substantial indemnity basis in the amount of $100,000.

ISSUES:

Did the trial judge err in finding the appellant’s claims to be statute-barred under the Limitations Act, 2002?
Did the trial judge err in ordering costs in the amount of $100,000?

HOLDING:

Appeal dismissed.

REASONING:

1. No.

The Court held that the trial judge correctly set out the applicable limitation period being two years from the date the claim was discovered, noting that s. 5(2) provides that actions are presumed to have been discovered at the time the events that underlie them have been discovered unless the contrary is proved. Under s. 5(1), discovery occurs (a) at the time the plaintiff knew of the facts giving rise to the claim; or (b) when a reasonable person in the plaintiff’s circumstances would have known.

The trial judge found that the appellant knew of the facts giving rise to the VIN-related claim when she issued her first statement of claim on June 18, 2018. The Court agreed, and distinguished this case from Longo v. MacLaren Arts Centre, cited by the appellant, where discovery turned on when a “reasonable person” ought to have known of the facts giving rise to the claim. The Court held that the facts supported that the appellant was fully aware of the claim when she filed her first statement of claim. The Court also held that the conclusion of the trial judge that the medical suspension-related claim was statute-barred was also appropriate on the evidence.

The Court added that the six-month suspension of court operations during the Covid-19 pandemic between March 16 and September 14, 2020 did not assist the appellant. Accounting for that suspension, the limitation period in respect of the VIN-related claim expired on December 18, 2020, and the medical suspension claim expired two years after her letter to MTO, on July 12, 2018. The appellant’s statement of claim in this matter was filed December 21, 2021.

The Court determined that it was unnecessary to review the appellant’s assertion that the trial judge mischaracterized her various causes of action because the claims were statute-barred and therefore determinative of the appeal.

2. No.

The Court held that because the respondent was successful at trial and the appellant failed to accept a reasonable Rule 49 offer to settle, the respondent was entitled to costs on a substantial indemnity basis from the date of the offer.

The Court agreed with the trial judge’s finding of fact that the appellant was an “experienced litigant” who would well have known the consequences of proceeding as she did. From 2018 onwards, a review of reported costs decisions indicated that the appellant had at least six other costs awards against her. She had been repeatedly admonished for bringing meritless motions and proceedings based on unfounded allegations. The Court explained, however, that the appellant was not to be punished for prior litigation in which costs were already determined, and that the costs award had to address the current litigation before the Court.

The Court held that as a self-represented litigant, the appellant was not exempt from costs: Rebello v. Ontario (Community Safety and Correctional Services). The Court rejected the appellant’s argument that costs should not be payable where a party is the Crown as s. 131(2) of the Courts of Justice Act provides to the contrary. In the Court’s view, the trial judge applied the appropriate principles in his determination of costs and that there was no basis on which to intervene.

Guillaume v. Ontario (Animal Care Review Board), 2024 ONCA 851

[Gomery J.A.]

COUNSEL:

V. G., acting in person

J. Tam, for the respondent Chief Animal Welfare Inspector

D. Lee, for the respondent Animal Care Review Board

FACTS:

This motion arose from actions taken by the Chief Animal Welfare Inspector under the Provincial Animal Welfare Services Act. The moving party appealed the removal by Animal Welfare Services (“AWS”) of 41 cats from her home and the issuance of a statement of account of almost $24,000 for their ongoing care. The moving party applied to the Divisional Court for judicial review, and pending adjudication, moved to a single judge of that court for a stay. The stay was denied on the basis of mootness. The moving party sought leave to appeal that decision and was granted a 30 day extension to file her motion materials, but she missed the deadline. The Registrar administratively dismissed her motion for leave to appeal and the moving party now sought to set aside that administrative dismissal.

ISSUES:

Should the Registrar’s administrative dismissal of the appellant’s motion for leave to appeal be set aside?

HOLDING:

Motion dismissed.

REASONING:

No. The Court explained that the considerations on a motion to set aside a Registrar’s order are similar to the considerations on a motion to extend a deadline to perfect an appeal or leave motion. The overarching consideration is the justice of the case. Relevant factors include the merits of the appeal; whether the moving party had an intention to appeal within the required deadline; the length of the delay and reason for it; and any prejudice caused to the responding party as a result: Graff v. Network North Reporting and Mediation; Sickinger v. Sickinger. The Court further noted that the test is more demanding than the test on a motion for an extension to perfect: Sickinger, citing Langer v. Yorkton Securities Inc. Where a party has already been granted an extension of time, as was the case here, a request for further time may be harder still to justify.

The Court noted that some factors weighed in favour of granting the motion, including that the moving party formed an intention to appeal the Divisional Court’s decision and maintained her intention to do so since filing her notice of appeal, and that the respondents did not contest the moving party’s motion. However, the Court held that the balance of factors did not weigh in favour of setting aside the Registrar’s order. There was no evidence supporting the moving party’s request and she did not file an affidavit in support of her motion. Further, her notice of motion asserted that court staff unreasonably refused to accept materials that she attempted to file, that they conspired to prevent her from perfecting her motion, and that she had ongoing health issues that made it difficult for her to comply with filing deadlines. She did not file anything to substantiate these assertions.

The Court explained that while some allowance may be made for the fact that the moving party was self-represented, she was put on notice that the failure to provide evidence in the proper form may be a sufficient basis on which to dismiss the motion: Teitler v. Dale. This was not the first time that the moving party had been alerted to the need to file affidavit evidence in support of a motion. Given this history, the Court held that no consideration could be given to the moving party’s assertions in the notice of motion. There was therefore no explanation for her failure to perfect the leave motion since the Registrar’s order.

The Court rejected the appellant’s argument that the respondents breached her Charter rights and distinguished Derakhshan v. Narula and Issai v. Rosenzweig, where the delays involved could be counted in days rather than months; the moving parties presented evidence explaining their failure to meet filing deadlines; no extensions of time had been granted; and the Registrar had not issued a dismissal order. Derakhshan and Issai also concerned appeals as of right, as opposed to a motion for leave to appeal. The impact of denying further time in those cases was undeniable, even if the merits of the appeals appeared slight. Here, the Court held that given that the proposed appeal’s lack of merit made it unlikely that the moving party could obtain leave even if given more time to do so, dismissing the motion had less impact.

Aroma Franchise Company Inc. v. Aroma Espresso Bar Canada Inc., 2024 ONCA 839

[Fairburn A.C.J.O., van Rensburg and Zarnett JJ.A.]

COUNSEL:

A. FitzGerald, A. D.J. Dick and D. Hamson, for the appellants

M. J. Latella and P. Chopra, for the respondents

P. Michell and P. Underwood, for the interveners, Toronto Commercial Arbitration Society and ADR Institute of Canada

FACTS:

An international commercial arbitration seated in Ontario is governed by the UNCITRAL Model Law on International Arbitration (the “Model Law”), adopted in the International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sched. 5. The Model Law contains provisions that promote the principle of arbitral impartiality. Article 12(1) imposes a duty on an arbitrator to disclose circumstances likely to give rise to justifiable doubts about the arbitrator’s impartiality. Article 12(2) permits a challenge to the arbitrator or the award if circumstances exist that give rise to justifiable doubts about the arbitrator’s impartiality.

The appellants and respondents engaged in an international commercial arbitration (the “MFA Arbitration”) before the Arbitrator addressing disputes that arose under a Master Franchise Agreement (the “MFA”). It culminated in a Final Award. In the Final Award, the Arbitrator found that the respondents had wrongfully terminated the MFA, under which the appellant, Aroma Espresso Bar Canada Inc. (“Aroma Canada”), served as the master Canadian franchisee for Aroma cafes in Canada. The MFA was entered into in 2007 between the respondent, Aroma USA, Inc., as franchisor, and the appellant, Aroma Canada, as master franchisee. In May 2019 the respondent Aroma Franchise Company, Inc., the assignee of Aroma USA, sent a notice to Aroma Canada terminating the MFA. The appellants took the position that the termination was unlawful.

After the MFA Arbitration commenced, but before the Final Award, the lead lawyer of the legal team acting in the MFA Arbitration for the appellants (a member of Sotos LLP) asked the Arbitrator if he would serve as the arbitrator for another arbitration – one that concerned a dispute between another client of the Sotos firm and a third party (the “Sotos Arbitration”). The Sotos Arbitration did not involve any of the parties to the MFA Arbitration or any issues that significantly overlapped with those in the MFA Arbitration. The Arbitrator accepted the engagement for the Sotos Arbitration; he did so without disclosure to the respondents. After the Final Award in the MFA Arbitration, the respondents learned of the Arbitrator’s involvement in the Sotos Arbitration. The respondents then brought an application to the Superior Court to set aside the Final Award.

Although the respondents’ application raised several other grounds, the application judge granted relief solely based on her finding of a reasonable apprehension of bias. She stated that the Arbitrator’s failure to disclose the Sotos Arbitration was the starting point for a reasonable apprehension of bias analysis. She cited Article 12 of the Model Law which provides that an arbitrator shall disclose, before appointment, “any circumstances likely to give rise to justifiable doubts as to his impartiality or independence” and after the time of his appointment shall disclose “any such circumstances to the parties unless they have already been informed of them by him.” She then cited the International Bar Association Guidelines on Conflicts of Interest in International Arbitration (the “IBA Guidelines”), noting that the respondents cited them as “instructive”.

The application judge granted the respondents’ application to set aside the Arbitrator’s awards. She directed that there be a new arbitration before a different arbitrator. In her view, the Arbitrator was required to disclose that he was being engaged for the Sotos Arbitration and his involvement in it without such disclosure gave rise to a reasonable apprehension of bias. In reaching these conclusions, she placed substantial weight on the parties’ expectations about disclosure of engagements, derived from correspondence their counsel had exchanged before the Arbitrator was approached and appointed. In that correspondence, counsel explained their own relationships with potential arbitrators and asked certain questions about opposing counsel’s relationships. That correspondence was never provided to the Arbitrator, nor was he made aware of it.

ISSUES:

Did the application judge err in law in the way she articulated and applied the test for disclosure and by taking into account subjective considerations that the parties did not make known to the Arbitrator?
Did the application judge err in finding that the Arbitrator had a legal duty to disclose that he was being engaged in the Sotos Arbitration?
Did the application judge err in finding a reasonable apprehension of bias?

HOLDING:

Appeal allowed.

REASONING:

1. Yes.

The Court explained that the Model Law’s test that dictates when an arbitrator must make disclosure is an objective one. It considers whether relevant circumstances would likely give rise to justifiable doubts about impartiality from the standpoint of a fair-minded and informed observer, rather than through the eyes of the parties. The Court held that the application judge erred in law in the way she articulated and applied the test for disclosure and by taking into account subjective considerations that the parties did not make known to the Arbitrator. Her approach essentially converted the objective test into a subjective one. The Court held that, under the objective test, the Arbitrator’s failure to disclose his engagement, in what the application judge herself termed a second unrelated arbitration, was not a breach of the legal duty of disclosure.

The Court stated that what disclosure is required turns on the legal regime that governs the arbitration. The MFA Arbitration was governed by the Model Law. Article 12(1) of the Model Law sets out the legally mandated duty of disclosure of an arbitrator:

When a person is approached in connection with his possible appointment as an arbitrator, he shall disclose any circumstances likely to give rise to justifiable doubts as to his impartiality or independence. An arbitrator, from the time of his appointment and throughout the arbitral proceedings, shall without delay disclose any such circumstances to the parties unless they have already been informed of them by him.

The Court clarified that unlike the Model Law, the IBA Guidelines are not a legal standard. The IBA Guidelines can assist the court in identifying what matters may require disclosure, but the IBA Guidelines do not themselves give rise to legal obligations or override national law or the arbitral rules chosen by the parties. This distinction is important because the objective standard for disclosure in Article 12(1) of the Model Law differs from the IBA Guidelines which propose a different rule for disclosure by an arbitrator. It provides that “If facts or circumstances exist that may, in the eyes of the parties, give rise to doubts as to the arbitrator’s impartiality or independence, the arbitrator shall disclose such facts or circumstances to the parties … prior to accepting his or her appointment or, if thereafter, as soon as the arbitrator learns of them”.

The MFA does not directly mandate disclosure, and the Court held that the application judge made no finding of circumstances that are expressly identified in the MFA as disqualifying. She did not find that an engagement of the Arbitrator by counsel on behalf of a different client for a different arbitration constituted a “social, business or professional relationship with either party”. Nor did she say that the MFA required disclosure because its terms called for the Arbitrator to be “neutral”. The Court held that to the extent that this is what she meant, her conclusion was inseparable from what she drew from the IBA Guidelines and the parties’ correspondence. In the Court’s view, this conclusion reflected legal errors making the conclusion not entitled to deference.

Although the application judge referred in her reasons both to the legal standards of disclosure found in Article 12(1) of the Model Law, and to the IBA Guidelines, she did not ultimately say that she was applying the Model Law. She did not apply its objective test. She never asked what a fair-minded and objective person would consider as likely to give rise to justifiable doubts about the Arbitrator’s impartiality. Rather, she said she was applying the IBA Guidelines without acknowledging the pivotal distinction between the rule about disclosure in the IBA Guidelines, a subjective test, and the legal obligation about disclosure in the Model Law, an objective test.

2. Yes

In the Court’s view, applying the objective test, the Arbitrator did not have a legal duty to disclose that he was being engaged in the Sotos Arbitration since it did not involve any party to the MFA Arbitration and there was no meaningful overlap of issues. The fact that counsel for one of the parties to the Sotos Arbitration was also counsel for the appellants in the MFA Arbitration, and the reality that the Sotos Arbitration was an engagement for which the Arbitrator would be compensated, are insufficient to trigger the legal duty of the Arbitrator to disclose. The Court noted that there was no common party between the Sotos Arbitration and the MFA Arbitration and did not involve a franchise dispute. The Sotos Arbitration did not arise out of the same incident as the MFA Arbitration. There were no significant overlapping issues. Accordingly, the Court concluded that the application judge erred in finding a breach by the Arbitrator of his legal duty to disclose.

3. Yes.

A finding that there was a breach of the legal duty of disclosure is germane to, but not determinative of, whether an arbitral award should be set aside for reasonable apprehension of bias. Failing to make legally required disclosure may indicate a lack of concern about matters that likely raise justifiable doubts about impartiality. But a failure of an arbitrator to disclose according to an expectation of the parties that was not shared with the arbitrator does not have this effect.

In the Court’s view, the application judge erred in finding a reasonable apprehension of bias. The test for a reasonable apprehension of bias on the part of an arbitrator is objective, it considers the relevant circumstances from the standpoint of a fair-minded and informed observer, with a strong presumption that an arbitrator is impartial. The Court held that the application judge erred in law in the way she applied that test, in effect changing the test to one attuned to unshared subjective views. The circumstances she considered to determine that a reasonable apprehension of bias was present went outside of those properly considered in applying the objective test. Although the application judge articulated the objective test, and cited the principle that the subjective views of the parties were not relevant, she ended up treating the subjective views not only as relevant, but determinative. The result was to change the test, which the Court held was an error of law.

The Court held that the application judge’s conclusion that a fair-minded and informed person, would conclude that circumstances exist that give rise to a reasonable apprehension of bias is rooted in circumstances that were not objective. A fair-minded and informed person would consider the facts and circumstances objectively known; they would focus on what the Arbitrator was told. What the parties kept to themselves are subjective views. The Court held that applying the standard of reasonable apprehension of bias objectively, the presumption of impartiality on the part of the Arbitrator was not displaced by his acceptance to arbitrate a second matter that did not involve any of the parties to the MFA Arbitration nor any overlapping issues of significance.

The Court allowed the appeal, set aside the judgment of the application judge, and reinstated the award of the Arbitrator. The respondents raised other grounds, some of which the application judge did not fully address. The Court returned the matter to the Superior Court to address those grounds.

Halton Condominium Corporation No. 61 v. Kolarovaliev, 2024 ONCA 848

[Zarnett, Coroza and Favreau JJ.A.]

COUNSEL:

N. K. and B. B., acting in person

A. Casalinuovo, for the respondent

FACTS:

The appellants, N. K. and B. B., were involved in a dispute with the respondent, the condominium corporation for the building in which their unit is located. The respondent alleged the appellants smoked or permitted smoking in their condominium unit and brought an application pursuant to s. 134 of the Condominium Act (the “Act”) to enforce its Non-Smoking Rule against the appellants.

The application judge confirmed the prohibition on smoking in the condominium building and terminated an existing “Grandfather Agreement” that had previously enabled the appellants to smoke in their unit under certain circumstances. He ordered that the appellants and any other individuals in the unit were prohibited from smoking anywhere in the unit itself and could only smoke on the condominium property if they did so outside of the condominium building and at least nine meters away from all doorways, operable windows, and air intakes of the building. If the appellants violated the terms of the order, the respondent was at liberty to apply for further relief under s. 134 of the Act. The appellants were ordered to pay $70,476.66 in costs to the respondent.

ISSUES:

Did the application judge fail to deal with and misapprehend relevant evidence?
Should leave to adduce fresh evidence be granted?
Did the application judge treat the appellants unfairly?

HOLDING:

Appeal dismissed.

REASONING:

The Court noted that the appellants argued two specific pieces of evidence that they claimed the application judge failed to deal with or misapprehended the importance of. The first was their evidence that the entire dispute was a fabrication by the respondent in retaliation for an incident that arose shortly before the start of the dispute at issue. The second was the evidence of their financial planner, Ms. K., that the appellants were on a video call with her at a time when the respondent alleged they were smoking on their balcony.

The Court rejected these arguments. The application judge did not ignore or misapprehend relevant evidence. The application judge noted the conflict between the appellants and Mr. B in his reasons. He specifically reviewed their claim that the respondent was “retaliating against them for having raised complaints about Mr. B’s abuse of his power and harassment of them in his role as President of [the respondent]”.

The Court further held that the application judge was not required to mention every piece of evidence that was before the court on the application. Ms. K’s evidence was in reference to only one of the complainants, and while the application judge did not specifically mention it, he expressly stated that he considered the “evidence as a whole” and found “on a balance of probabilities that the smoke from [the appellants’ unit] escaped to the hallway, perhaps under the doorway, and through the balcony to adjoining areas.”

The Court noted that the appellants sought to introduce fresh evidence which consisted of an affidavit of the appellant N. K.’s son, and a further affidavit of the appellant N.K. The appellants claimed that the fresh evidence contradicted the application judge’s findings.

The Court noted that the appellants had to meet the following test to persuade us that the fresh evidence should be admitted: i) the evidence could not, by the exercise of due diligence, have been obtained for the hearing; ii) the evidence is relevant in that it bears upon a decisive or potentially decisive issue; iii) the evidence is credible in the sense that it is reasonably capable of belief; and iv) the evidence is such that, if believed, could have affected the result. The overarching consideration is whether the evidence should be admitted in the interests of justice.

The Court noted that there was no explanation as to why the first two pieces of fresh evidence could not, with the exercise of due diligence, have been introduced during the hearing in the court below. However, the Court dismissed the application to introduce fresh evidence because there was no basis for concluding that the proposed fresh evidence could have affected the result of the hearing.

The Court held that there was no basis for finding that the appellants were not treated fairly by the application judge or that he did not take into account all of the evidence tendered by the parties. It was his job to determine which evidence he would rely on.

Infor Financial Inc. v. CentriLogic Inc., 2024 ONCA 849

[Miller, Zarnett and Thorburn JJ.A.]

COUNSEL:

M. P. Falco and H. Khan, for the appellant

M. P. Gottlieb and M. A. Currie, for the respondent

FACTS:

The appellant, CentriLogic, appealed the order that it pay the respondent, Infor Financial, $689,375.85 in damages made up of a financing fee (the “Financing Fee”) of $600,000 (less $25,000 already paid), prejudgment interest and HST, and costs of the trial in the amount of $511,762.22. The appeal concerned the proper interpretation of an engagement agreement (the “Agreement”) between the parties and whether Infor was entitled to the Financing Fee.

ISSUES:

Did the trial judge err in concluding that CentriLogic breached s. 8 of the Agreement?
Did the trial judge err in finding that the respondent was entitled to a financing fee?
Did the trial judge err in awarding an excessive costs award to the respondent?

HOLDING:

Appeal dismissed.

REASONING:

1. No.

The Court held that the trial judge did not err in finding that CentriLogic breached s. 8 of the Agreement by providing a copy of Infor’s proprietary information to CentriLogic’s lender, HSBC. First, the Court explained that Infor added significant value through its “vetting” process which involved “detail-oriented work of checking each of thousands of entries for accuracy and ensuring that the formulas underlying each of those thousands of entries work cohesively with the balance of the model”. CentriLogic admitted “that the work [Infor] did was valuable” as it “could not afford to have lenders finding problems with the financial model.” Second, CentriLogic could point to only 5 out of 55 pages of the Lender Presentation that came from the financial model CentriLogic created. In any event, the Court found that the trial judge did not award damages for breach of s. 8. He awarded damages for failure to pay the Financing Fee that had been earned.

2. No.

The Court held that the trial judge did not err in concluding that Infor was entitled to the Financing Fee and that CentriLogic’s interpretation of the Agreement was inconsistent with “sound commercial principles and good business sense”.

The Court noted that the Agreement demonstrated that the parties “clearly contemplated the possibility that HSBC would continue to participate in the financial affairs of CentriLogic” and that the Financing Fee was payable where lenders were “contacted to” CentriLogic within twelve months of the termination of the Agreement. The Court held that it would not make commercial sense for Infor to enter into an agreement under which it would not be entitled to compensation if HSBC participated in the funding in any way. Rather, the commercially reasonable interpretation was that Infor “would earn a fee on the amounts that other lenders advanced”. The Court explained that this interpretation was consistent with the Court’s “interpretative principle of commercial reasonableness” set out in Prism Resources.

Furthermore, the Court found that CentriLogic admitted that Infor was to be paid the fee “not on money that HSBC advanced but on money that new lenders advance[d]”. The Court held that it was open to the trial judge to find that CWB and TD were parties “contacted to” CentriLogic by Infor given the “meaningful contact” between them. The trial judge found that “contacted to” was to be interpreted as a low threshold, given that “the purpose of the section [was] to protect Infor against a situation where it has initiated contact between CentriLogic and lenders” and then CentriLogic entered into a financing arrangement with the lenders after the termination of the Agreement, therefore disentitling Infor from collecting the Financing Fee.

3. No.

The Court explained that leave to appeal costs orders is granted only when there are “strong grounds where the trial judge erred in exercising his discretion” or “where the order is tainted by palpable and overriding error or error of law”: McFlow Capital Corp v. James; Shaulov v. Law Society of Ontario. In this case, the judgment was more favourable than Infor’s Rule 49 offer.

The Court held that the costs award was proportionate and in the interests of justice as the directing minds of CentriLogic were “highly sophisticated … venture capital players” who “should not be surprised by the rates charged by Infor’s lawyers”. The Court agreed with the trial judge’s rejection of CentriLogic’s argument that Infor “spent excessive time on various tasks in the litigation”, highlighting that the matter was “of more importance” to Infor than it was to CentriLogic given the smaller size of the company, and that awarding costs on a partial indemnity scale “would entirely ignore Rule 49.10”.

Fehr v. Sun Life Assurance Company of Canada, 2024 ONCA 847

[van Rensburg, Roberts and Gomery JJ.A.]

COUNSEL:

M.C. Spencer and M.B. McPhee, for the appellants

F.P. Morrison, G.P. Burt and J. Cole, for the respondent

FACTS:

This matter has a complex procedural history. It involves a class action proceeding which concerns the sale and administration of certain universal life insurance policies that generated tax-free returns for policyholders. The action was commenced in 2010 and certified in 2020 with five common issues, all focused on breach of contract claims. The plaintiffs, who are also the appellants in this appeal, delivered a Fresh as Amended Statement of Claim (“FASOC”) in 2013.

This is an appeal from an order dismissing the appellants’ motion for leave to add a common issue to a certified class proceeding and to amend their FASOC to particularize the cause of action underlying the proposed new common issue.

The appellants’ motion was brought in 2022, in the course of preparing for a summary judgment motion brought by the respondent, Sun Life, seeking a determination of the common issues. Sun Life delivered an affidavit of documents. The appellants moved for a better affidavit of documents. In response to Sun Life’s summary judgment motion and in support of their summary judgment cross-motion, the appellants delivered an affidavit sworn by M.K. as part of their productions. The affidavit contained an expert report in which M.K. provided his opinion on Sun Life’s repricing practices pertaining to “Flexiplus,” one of the universal life insurance policies in question. M.K. explained that effective March 2001, Sun Life had increased the investment spread to allow Sun Life to take greater share of investment profits and it failed to advise policyholders of the investment spread increase when COI rates and administrative fees were increased. M.K. expressed this to be unfair pertaining to general standards of actuarial practice. Sun Life objected to the scope of M.K.’s opinion, having asserted that it went beyond the certified common issues. The appellants brought a motion to amend their pleadings to add a new common issue, which the parties referred to as the “Investment Spread Claim,” that arose from M.K.’s report.

The appellants sought to accomplish this pursuant to the Court’s discretion under ss. 8(3) and 12 of the Class Proceedings Act, 1992 (the “CPA”). The appellants asserted that the Investment Spread Claim was covered by a cause of action already pleaded in the FASOC. In the alternative, they argued that the Investment Spread Claim was not discoverable until after Sun Life delivered the productions in 2022.

Sun Life opposed the motion on the basis that the Investment Spread Claim was not already pleaded in the FASOC and that it was statute-barred because it was discoverable in 2016. Sun Life also moved to strike portions of M.K.’s report that dealt with the increase to the investment spread on Flexiplus policies, on the basis that it introduced new matters that had not been pleaded and went beyond the common issues already certified.

These motions were heard by the motion judge in April 2023. The motion judge dismissed the appellants’ motion for leave to amend the FASOC and to certify a new common issue. The motion judge rejected the argument that the FASOC already pleaded the necessary facts in relation to the Investment Spread Claim, finding the interest rate spread (which is another term for “investment spread”), had nothing to do with rates for daily interest included in the FASOC. Further, the motion judge rejected the argument that the Investment Claim Spread was only discoverable in 2022. The motion judge concluded that the Investment Claim Spread was in fact discoverable in in 2016 from partial information included in productions which had been delivered by Sun Life then.

The motion judge granted Sun Life’s motion to strike portions of M.K.’s report on the basis that references to the Investment Spread Claim and the profitability of the Flexiplus policies were not relevant to the certified common issues.

The appellants were denied leave to appeal to the Divisional Court on Sun Life’s motion to strike portions of M.K.’s report. The appellants appealed to the Court of Appeal on the motion for leave to amend the FASOC, which was the subject of this appeal.

ISSUES:

Did the motion judge err in concluding that the Investment Spread Claim was not covered by a cause of action already pleaded in the FASOC?
Did the motion judge err in determining that the Investment Spread Claim was discoverable in 2016 based on information in the Repricing Report, included in Sun Life’s productions?
Did the motion judge err in applying the limitation period bar on a class-wide basis on the claim’s discoverability in 2016 even though the action that not been certified as a class proceeding at the time?
Did the motion judge err in failing to apply a rolling limitation period to the Investment Spread Claim?
Did the motion judge err in deciding, in the alternative, that if the Investment Spread Claim were not statute-barred, the addition of this claim should be denied under s. 12 of the CPA because it would fundamentally change the nature of this class proceeding and undermine judicial efficiency and access to justice?

HOLDING:

Appeal dismissed.

REASONING:

The Court found that the Investment Spread Claim was a new claim, not already covered by the appellants’ FASOC. The Court asserted that although the amendments built on the language that was already in the pleading, the FASOC does not contain the factual matrix to support the claim to which the proposed amendments related. The amendments proposed by the appellants’ asserted specific facts in relation to the Investment Spread Claim. Accordingly, the Court found that the motion judge did not err in concluding that the reference to “rates for daily interest, term investment units, and equity-adjusted investment units” in the existing pleading did not fairly describe the interest spread issue. Accordingly, the Investment Spread Claim fell outside the scope of the FASOC.

The Court found that the motion judge did not err in concluding that the Investment Spread Claim was discoverable in 2016. The appellants contended that the investment spread increases were never disclosed and had been concealed from policyholders until discovered by their summary judgment expert in 2022. The respondent contended that a 2001 internal memo reflecting a recommended spread increase had been attached to an affidavit on cost of insurance adjustments submitted in opposition to class certification in 2016. The court found that the information available in 2016 was sufficient for the appellants, through their counsel, to understand that they had a claim within the meaning of s. 5(1) of the Limitations Act, 2002.

The Court found that that limitations bar was properly applied to the claims of all class members. The Court found against the appellants for four reasons. First, on motion, the appellants approached the issue of discoverability of the spread increase on a class-wide basis and did not make the argument that it should be considered on an individual policyholder basis. Accordingly, they ought not be permitted to raise this issue on appeal. Second, the Court saw no merit at this point in the proceedings for the appellants’ attempt to cast the limitation period defence as an “individual” and not a class-wide issue. Third, the appellants advanced the discoverability issue as depending on what was known to those who were pursuing litigation on the policyholders’ behalf which included the named plaintiffs and their counsel, before the class was certified. Just as the appellants sought to rely on the 2022 events to extend the limitation period in respect of the Investment Spread Claim on a class-wide basis, the Court found that they could not avoid the class-wide effect of the discoverability issue on the 2016 disclosure in the same litigation. Lastly, the Court disagreed with the appellants’ attempt to draw a distinction between the role of representative plaintiffs before and after certification. The appellants argued that in 2016, their counsel could have imputed knowledge of the Investment Claim Spread only to the seven named plaintiffs and not to all members of the yet-to-be-certified class. The Court found that for limitation period purposes, the action did not, upon certification, transform from an action by individual plaintiffs into a class proceeding.

The Court found that the rolling limitation period did not apply. The appellants argued that a rolling limitation period should have applied because a discrete claim arose every time Sun Life deducted an excessive discretionary investment spread percentage from the interest credited to Flexiplus policyholders’ investment accounts. The Court found that a rolling limitation period may apply to a claim for breach of contract where each failure to make a periodic payment can be said to give rise to a new cause of action. The Court asserted that the Investment Spread Claim does not qualify under such an exception given there was no breach of a contractual entitlement to a particular rate of interest. While the Court recognized that the breaches could be considered a breach of an implied term, it further asserted that the interest spread increases that occurred in 2001 and 2014 were discrete breaches which caused continued loss, not a series of periodic breaches. As such, the breaches did not qualify for a rolling limitation period exception.

The Court found that it was unnecessary to consider this ground of appeal given the Court’s findings on the previous issues, which made this issue a moot point.

SHORT CIVIL DECISIONS

World Financial Solutions Inc. v. 2573138 Ontario Ltd., 2024 ONCA 844

[Pepall, Nordheimer and Zarnett JJ.A.]

COUNSEL:

G. Cadogan, for the appellants

T. Arndt and A.D. Pelletier, for the respondent

Zhang Estate v. Wainfleet (Township), 2024 ONCA 846

[Fairburn A.C.J.O., Coroza and Sossin JJ.A.]

COUNSEL:

A. Evangelista and S. Reid, for the appellants

C. G. Carter, for the respondent

Sabaratnam v. Yohanathan, 2024 ONCA 845

[Pepall, Nordheimer and Zarnett JJ.A.]

COUNSEL:

T.M., acting in person

J.R. Lane, for the respondent/appellant by way of cross-appeal

Chowdhury v. Exquisite Bay Development Inc., 2024 ONCA 852

[Fairburn A.C.J.O., Coroza and Sossin JJ.A.]

COUNSEL:

R.G. Scocco and A.N.G. Dublin, for the appellants

J. Suttner, for the respondent R.M.

N. Perfetto, for the respondent S.C.

No one appearing for the respondent, J.V.

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