Court of Appeal Summaries (December 8 – December 12)

In B.L.T. Construction Services Inc. v. Una Pizza Napoletana Inc., the Court dismissed the appeal, upholding the finding that the appellant was jointly and severally liable for breach of trust in respect of unpaid construction invoices. His defence had been struck after years of unjustified delay, and he offered no credible explanation or arguable defence. Because he was noted in default, he was deemed to admit the facts, including that the landlords had made leasehold improvement advances to the appellant, but he did not use those funds to pay invoices for those improvements, resulting in his personal liability for breach of trust.

In Project Freeway Inc. v. ABC Technologies Inc., the Court dismissed an appeal by a vendor that had sold shares in a company to a purchaser pursuant to a Share Purchase Agreement that provided for earn-out payments over time, based on the future performance of the company. The vendor submitted that the purchaser’s subsequent sale and leaseback of some assets triggered the full earn-out payment, but the Court affirmed the trial judge’s contractual interpretation to the contrary. Overall, the Court emphasized its deference to the trial judge in cases involving highly technical contracts which implicate only the immediate contracting parties and involve issues of mixed fact and law. The standard of review of the trial judge’s contractual interpretation was palpable and overriding error, and no such error was found.

In Gumbley v. Vasiliou, the Court dealt with a catastrophic brain injury following a severe asthma attack and examined whether delayed decisions by the treating physician caused the harm. The Court upheld the trial judge’s findings that the physician’s negligent delays in escalating care and intubating the patient more likely than not led to prolonged hypoxia and the resulting brain damage, rejecting challenges to the trial judge’s evidentiary foundation and causation analysis.

In Nguyen v Pham the moving party sought an extension to file his appeal of an application judgment. The motion was opposed on the grounds that it was frivolous and part of a pattern of unreasonable conduct. The Court dismissed the motion, holding that the moving party’s repeated procedural delays and non-compliance with court orders made an extension not in the interests of justice and prejudicial to the respondent. The moving party’s proposed appeal lacked merit, as it merely attacked discretionary, well‑reasoned findings on striking pleadings, occupation rent, adjustments, and costs that were entitled to deference.

In R.W. Tomlinson Limited v. Labourers’ International Union of North America, Local 527, the Court held that R.W. Tomlinson was required to arbitrate its dispute with the Union, as the dispute arose from the collective agreement and fell within the arbitrator’s exclusive subject-matter jurisdiction. The claims of non-parties 283 Ontario and Tomlinson Environmental were not dismissed but were properly subject to a temporary stay pending arbitration, given the arbitrator’s lack of personal jurisdiction and the risk of inconsistent outcomes. The appeal was allowed in part.

Civil Decisions

B.L.T. Construction Services Inc. v. Una Pizza Napoletana Inc., 2025 ONCA 849

Keywords: Contracts, Construction, Breach of Trust, Civil Procedure, Striking Pleadings, Setting Aside, Default Judgment, Construction Act, R.S.O. 1990, c. C.30, s. 7, Rules of Civil Procedure, r.19.02(1)(a), Intact Insurance Company v. Kisel, 2015 ONCA 205

Mr. Zagros Management Inc. v. Yulee Developments Inc., 2025 ONCA 852

Keywords: Franchise Relationships, Commercial Leases, Notices of Default, Real Property, Validity of Notices, Landlord and Tenant, Service Requirements, Termination, Indemnity]

Project Freeway Inc. v. ABC Technologies Inc., 2025 ONCA 855

Keywords: Contracts, Interpretation, Standard of Review, Share Purchase Agreements, Purchase Price, Earn-out Payments, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Wiener Städtische Versicherung AG Vienna Insurance Group v. Infrassure Ltd., 2025 ONCA 20, Ontario First Nations (2008) Limited Partnership v. Ontario Lottery and Gaming Corporation, 2021 ONCA 592]

Gumbley v. Vasiliou, 2025 ONCA 851

Keywords: Torts, Medical Malpractice, Negligence, Causation, But-For-Test, Standard of Care, Acts of Omission, Evidence Act, R.S.O. 1990, c. E.23, s. 35, Clements v. Clements, 2012 SCC 32, Armstrong v. Royal Victoria Hospital, 2019 ONCA 963, Dallner v. Gladwell, 2024 ONSC 6557, Kotorashvili v. Lee, 2024 ONSC 1495, Aristorenas v. Comcare Health Services (2006), 83 O.R. (3d) 282 (C.A.), Sacks v. Ross, 2017 ONCA 773, Beldycki Estate v. Jaipargas, 2012 ONCA 537, Hasan v. Trillium Health Centre (Mississauga), 2024 ONCA 586, Campbell v. Hasan, [2024] S.C.C.A. No. 402, Chasczewski v. 528089 Ontario Inc. (Whitby Ambulance Service), 2012 ONCA 97, Subramaniam v. Public Prosecutor, [1956] 1 W.L.R. 965, R. v. Rosik, [1971] 2 O.R. 47, R. v. Wildman (1981), 60 C.C.C. (2d) 289, Barker v. Montfort Hospital, 2007 ONCA 282, Barker v. Dervish, [2007] S.C.C.A. No. 299, Robitaille v. Anspor Construction Ltd. (2002), 161 O.A.C. 96 (C.A.), K.K. v. M.M., 2021 ONSC 3975, Parliament et al v. Conley and Park, 2019 ONSC 2951, L. (B.) v. Saskatchewan (Ministry of Social Services), 2012 SKCA 38, Setak Computer Services Corporation Ltd. v. Burroughs Business Machines Ltd. et. al. (1977), 15 O.R. (2d) 750, Bruno v. Dacosta, 2020 ONCA 602, R. v. Evans, [1993] 3 S.C.R. 653, Fleury (Estate) v. Kassim, 2022 ONSC 2464, Benhaim v. St. German, 2016 SCC 48, Hanson-Tasker v. Ewart, 2023 BCCA 463, Ghiassi v. Singh, 2018 ONCA 764, Goodwin v. Olupona, 2013 ONCA 259, Girao v. Cunningham, 2020 ONCA 260, Blake v. Dominion of Canada General Insurance Company, 2015 ONCA 165, Adderly v. Bremner, [1968] 1 O.R. 621 (H.C.), McGregor v. Crossland, 1994 CanLII 388, White Burgess Langille Inman v. Abbott and Haliburton Co., 2015 SCC 23, R. v. Marquard, [1993] 4 S.C.R. 223, Westerhof v. Gee Estate, 2015 ONCA 206, Hacopian-Armen Estate v. Mahmoud, 2021 ONCA 545, Calin v. Calin, 2021 ONCA 558

Nguyen v. Pham, 2025 ONCA 858

Keywords: Family Law, Civil Procedure, Motions, Extension of Time, Delay, Frivolous, Vexatious, Pleadings, Striking Pleadings,Occupation Rent, Costs, , Merits, Rules of Civil Procedure, J.J.W. v. K.F., 2024 ONCA 362, Lavallee v. Isak, 2022 ONCA 290, Jex v. Jiang, 2021 ONCA 160, Issasi v. Rosenzweig, 2011 ONCA 112, Enbridge Gas Distribution Inc. v. Froese, 2013 ONCA 131, Liu v. Chan, 2024 ONCA 699, Sabatino v. Posta Ital Bar Inc., 2022 ONCA 208, Roberts v. Roberts, 2015 ONCA 450, Martin v. Watts, 2020 ONCA 406, Mullin v. Sherlock, 2018 ONCA 1063, Griffiths v. Zambosco (2001), 54 O.R. (3d) 397 (C.A.)

R.W. Tomlinson Limited v. Labourers’ International Union of North America, Local 527, 2025 ONCA 861

Keywords: Labour and Employment, Unions, Collective Agreements, Labour Arbitration, Jurisdiction, Personal Jurisdiction, Subject Matter Jurisdiction, Parties, Torts, Civil Procedure, Stay of Proceedings, Standard of Review, Correctness, Rules of Civil Procedure, r. 21.01(3)(a), r. 21.01(1)(b), Labour Relations Act, 1995, S.O. 1995, c. 1, Sch. A, s. 48(1), Courts of Justice Act, R.S.O. 1990, c. C.43, 2. 106, Northern Regional Health Authority v. Horrocks, 2021 SCC 42, Housen v. Nikolaisen, 2002 SCC 33, Black v. Owen, 2017 ONCA 397, Canada (Information Commissioner) v. Canada (Minister of National Defence), 2011 SCC 25, Aldo Group Inc. v. Moneris Solutions Corporation, 2013 ONCA 725, Weber v. Ontario, [1995] 2 S.C.R. 929, Re Canex Placer Ltd. and CAIMAW, Local 10, [1975] 1 Can. L.R.B.R. 269 (B.C.L.R.B.), Energy & Chemical Workers Union, Local 691 v. Irving Oil Ltd. (1983), 47 N.B.R. (2d) 205 (C.A.), Regina Police Assn. Inc. v. Regina (City) Board of Police Commissioners, 2000 SCC 14, K.A. v. Ottawa (City) (2006), 80 O.R. (3d) 161 (C.A.), Ball v. McAuley, 2020 ONCA 481, Burley v. Ontario Public Service Employees Union (2004), 133 L.A.C. (4th) 97 (Ont. S.C.), Fuller v. Beecroft, 2007 CanLII 293 (Ont. S.C.), Coté c. Saiano, [1998] R.J.Q. 1965 (C.A.), Nadeau v. Carrefour des jeunes de Montréal, [1998] R.J.D.T. 1513 (C.A.), Hart v. Roman Catholic Episcopal Corporation of the Diocese of Kingston, in Canada, 2011 ONCA 728, Giorno v. Pappas (1999), 42 O.R. (3d) 626 (C.A.), Cherubini Metal Works Ltd. v. Nova Scotia (Attorney General), 2007 NSCA 38, 253 N.S.R. (2d) 144, Soulos v. Leitch, 2005 CanLII 13790 (Ont. S.C.), Piko v. Hudson’s Bay Co. (1998), 41 O.R. (3d) 729 (C.A.), Ruscetta v. Graham (1998), 36 C.C.E.L. (2d) 177 (Ont. C.A.), Dwyer v. Canada Post Corp., 1997 CanLII 1110 (Ont. C.A.), Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), 2014 SCC 59, Bremer Vulkan Schiffbau und Maschinenfabrik v. South India Shipping Corporation Ltd., [1981] A.C. 909 (H.L.), Brotherhood of Maintenance of Way Employees Canadian Pacific System Federation v. Canadian Pacific Ltd., [1996] 2 S.C.R. 495, Bruce v. Cohon, 2017 BCCA 186, Bisaillon v. Concordia University, 2006 SCC 19, Skof v. Bordeleau, 2020 ONCA 729, London Life Insurance Co. v. Dubreuil Brothers Employees Assn. (2000), 49 O.R. (3d) 766 (C.A.), Reference re Code of Civil Procedure (Que.), art. 35, 2021 SCC 27, Berardinelli v. Ontario Housing Corp., [1979] 1 S.C.R. 275, O’Leary v. New Brunswick, [1995] 2 S.C.R. 967, Bohemier v. Centra Gas Manitoba Inc. (1999), 170 D.L.R. (4th) 310 (Man. C.A.), Vale Inco Newfoundland & Labrador Ltd. v. U.S.W., 2010 NLTD(G) 124, 299 Nfld. & P.E.I.R. 73, Quebec (Commission des droits de la personne et des droits de la jeunesse) v. Directrice de la protection de la jeunesse du CISSS A, 2024 SCC 43, Canada Trustco Mortgage Co. v. Canada, 2005 SCC 54, CAW-Canada v. Sun Life Assurance of Canada (2000), 135 O.A.C. 115 (C.A.), Quebec (Attorney General) v. 9147-0732 Québec inc., 2020 SCC 32, R. v. Breault, 2023 SCC 9, TELUS Communications Inc. v. Wellman, 2019 SCC 19, Piekut v. Canada (National Revenue), 2025 SCC 13, Canada Systems Group (EST) Ltd. v. Allendale Mutual Insurance Co. (1983), 41 O.R. (2d) 135 (Div. Ct.), Ainsworth Lumber Co. v. Canada (Attorney General), 2001 BCCA 105, Allarco Entertainment 2008 Inc. v. Rogers Communications Inc., 2009 CanLII 68464 (Ont. S.C.), Hollinger International Inc. v. Hollinger Inc. (2004), 11 C.P.C. (6th) 245 (Ont. S.C.), Penn-Co Construction Canada (2003) Ltd. v. Constance Lake First Nation, 2008 ONCA 768, Ghosh v. Domglas Inc. (1986), 57 O.R. (2d) 710 (H.C.), Pyke v. Tri Gro Enterprises Ltd. (2001), 55 O.R. (3d) 257 (C.A.), Mahar v. Rogers Cablesystems Ltd. (1995), 25 O.R. (3d) 690 (Gen. Div.), Delsom Estates Ltd. v. Delta (Municipality) (1994), 53 L.C.R. 241 (B.C.S.C.), Fareau v. Bell Canada, 2023 ONCA 303, Cirone v. Park Lawn Co. (2008), 233 O.A.C. 337 (Div. Ct.), Areva NP GmbH v. Atomic Energy of Canada Ltd., 2009 CarswellOnt 1149 (S.C.), Lehman v. Davis (1993), 16 O.R. (3d) 338 (Gen. Div.), Farris v. Staubach Ontario Inc. (2004), 32 C.C.E.L. (3d) 265 (Ont. S.C.), 1196303 Ontario Inc. v. Glen Grove Suites Inc., 2015 ONCA 580, Donovan v. Waterloo (Police Services Board), 2022 ONCA 199

Short Civil Decisions

Rabbani v. Furney, 2025 ONCA 860

Keywords: Civil Procedure, Jurisdiction, Contempt, Gueye v. DiNino, 2023 ONCA 342

Spencer v. Omega Insurance Company, 2025 ONCA 859

Keywords: Civil Procedure, Motion to Extend Time, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 7(5)]

Dell v. Zeifman Partners Inc., 2025 ONCA 871

Keywords: Contempt, Motion to Strike, in personam Orders, Costs, Farming and Food Production Protection Act, 1998, S.O. 1998, c. 1, s. 5(4)

Fox Excavating and Grading LTD. v. Vandyk-Summerhill Limited, 2025 ONCA 870

Keywords: Civil Procedure, Undertakings, Peremptory Orders, Halifax Dartmouth Bridge Commission v. Walter Construction Corp., 2010 NSSC 350

Melville v. McLaren, 2025 ONCA 869

Keywords: Civil Procedure, Costs

Way v. Schembri, 2025 ONCA 863

Keywords: Civil Procedure, Failure to Comply, Rules of Civil Procedure, R.R.O. 1990, Reg. 194, S. 37.15,

Jaymat Limited v. Trichilo, 2025 ONCA 854

Keywords: Civil Procedure, Summary Judgment, Appeals, Panel Reviews, Stay Pending Appeal, Lifting of Stay, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 7(5), Hillmount Capital Inc. v. Pizale, 2021 ONCA 364, Machado v. Ontario Hockey Association, 2019 ONCA 210

Vacaru v. Legge, 2025 ONCA 856

Keywords: Family Law, Professional Negligence, Lawyers, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Frivolous, Vexatious, Abuse of Process, Vexatious Litigants, Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 2.1.01, 21.01(1), 25.11, Marmer Penner Inc. v. Vacaru, 2022 ONCA 280, Vacaru v. Legge, 2025 ONSC 218, Marmer Penner Inc. v. Purcaru, 2021 ONSC 3785, Simpson v. The Charter Professional Accountants of Ontario, 2016 ONCA 806, Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733, Kokic v. Johnson, 2025 ONCA 4

SHORT CIVIL DECISIONS

Rabbani v. Furney, 2025 ONCA 860

[Trotter, Copeland and Gomery JJ.A.]

Counsel:

A. F., acting in person

No one appearing for the appellant/responding party, M.F.

B. Martin, for the respondent/moving party

Keywords: Civil Procedure, Jurisdiction, Contempt, Gueye v. DiNino, 2023 ONCA 342

Spencer v. Omega Insurance Company, 2025 ONCA 859

[Trotter, Copeland and Gomery JJ.A.]

Counsel:

P. Waldmann, for the appellant/moving party

O. Guillaume and S. Sharma, for the respondents/responding parties

Keywords: Civil Procedure, Motion to Extend Time, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 7(5)

Dell v. Zeifman Partners Inc., 2025 ONCA 871

[Trotter, Copeland and Gomery JJ.A.]

Counsel:

P. Marshall, C. Kirewskie and D. McAllister, for the appellants

S. Kar and B. Fragomeni, for the non-party respondents, the Minister of Environment, Conservation and Parks, the Honourable A. K., M. K. and K. G.

B. Sachdeva and G. Rhodes, for the non-party respondents, 2507626 Ontario Inc. o/a 4 Mile Creek Farms and L.K.

T. Hill and K. Shedden, for the non-party respondent, E.M.

P. DeMelo, for the non-party respondent, the Corporation of the Town of Niagara-on-the-Lake

No one appearing for the respondent, Zeifman Partners Inc. as operator of the waste disposal site at 2021 Four Mile Creek Road, Niagara-on-the-Lake

Keywords: Contempt, Motion to Strike, in personam Orders, Costs, Farming and Food Production Protection Act, 1998, S.O. 1998, c. 1, s. 5(4)

Fox Excavating and Grading LTD. v. Vandyk-Summerhill Limited, 2025 ONCA 870

[Simmons, Miller and Wilson JJ.A.]

Counsel:

M. Simaan, for the appellant

J. Goode and M. Falco, for the respondent

Keywords: Civil Procedure, Undertakings, Peremptory Orders, Halifax Dartmouth Bridge Commission v. Walter Construction Corp., 2010 NSSC 350

Melville v. McLaren, 2025 ONCA 869

[Trotter, Copeland and Gomery JJ.A.]

Counsel:

R. Malen, for the appellant

T. Hill and Karen Faye Shedden, for the respondent

Keywords: Civil Procedure, Costs

Way v. Schembri, 2025 ONCA 863

[Trotter, Copeland and Gomery JJ.A.]

Counsel:

J. Goldblatt, E. Vaillancourt, and C. Allen for the appellants

A. Winton and P. Underwood for the respondents

Keywords: Civil Procedure, Failure to Comply, Rules of Civil Procedure, R.R.O. 1990, Reg. 194, S. 37.15,

Jaymat Limited v. Trichilo, 2025 ONCA 854

[Paciocco, George, and Monahan JJ.A.]

Counsel:

K. Sherkin and M. Sanctis, for the moving party

J. Damstra for the responding party

Vacaru v. Legge, 2025 ONCA 856

[Paciocco, George and Monahan JJ.A.]

Counsel:

F.V., acting in person

A. Antoniou and M. Hanna, for the respondents

LONG CIVIL DECISIONS

B.L.T. Construction Services Inc. v. Una Pizza Napoletana Inc., 2025 ONCA 849

[Zarnett, Sossin and Pomerance JJ.A.]

Counsel:

P.D. Monte, for the appellant

C.A.L. Caruana, for the respondent

Facts:

The respondent, B.L.T. Construction Services Inc. (“BLT”), was retained to perform construction management services for two new pizza restaurants. The restaurants were run by Una Pizza Napoletana Inc. (“Una”) and Pizza Couture Inc. (“Couture”, collectively, “the Corporations”). The appellant, RM served as an officer and director of Una.

The respondent submitted invoices for its work but was never paid. The respondent launched a claim that included allegations that the Corporations received leasehold improvement advances from the third-party landlords to fund the construction projects yet failed to advance the funds to the respondent. The respondent’s claim asserted that this constituted a breach of the trust as well as an unjust enrichment of the Corporations. It alleged that the individual defendants, including the appellant, were liable because they were each a person with effective control of the Corporations and had assented to or acquiesced in the misuse of trust funds.

The appellant had been noted in default, after his defence was struck and he had taken no steps to defend the action for several years. In response to the respondent’s motion for judgment he brought a motion to set aside the order striking his defence. The motion judge refused to set aside the order striking the appellant’s defence and concluded that the appellant was jointly and severally liable, along with his co-defendants, for $180,372.49 in unpaid invoices.

Issues:

1. Did the motion judge err in failing to set aside the striking out of the appellant’s defence?

2. Did the motion judge err in granting judgment against the appellant, finding him to be jointly and severally liable for the amount of $180,372.49?

Holding:

Appeal dismissed.

Reasoning:

1. No.

The motion judge did not err in refusing to set aside the order striking the appellant’s defence. The appellant failed to participate in the proceedings, despite being given several opportunities to do so. Among the factors considered by the motion judge were the appellant’s behaviour, the length of the delay, the reasons for the delay, the lack of complexity, and the relatively low value of the claim. The motion judge found the appellant’s excuses and explanations to be unsubstantiated and incredible. He did not provide any evidence as to what happened to the leasehold improvement funds or why the invoices were not paid. There was no rational explanation as to why he was not liable for breach of trust.

2. No.

The motion judge did not err in holding the appellant and his co-defendants jointly and severally liable to the respondent in the amount of $180,372.49. The claim was sufficient to make out the elements of breach of trust and the amount. Because his defence had been struck, and he had been noted in default, there was no basis on which the appellant could contest the allegation that the landlords advanced an amount equal to all of the work and services provided by the respondent, as shown on its invoices.

Mr. Zagros Management Inc. v. Yulee Developments Inc., 2025 ONCA 852

[Gillese, Pepall and Zarnett JJ.A.]

COUNSEL:

G. Galati and D. Baker, for the respondent/appellant by way of cross-appeal

D. Hamson and S. R. Ramesh, for the respondent/appellant by way of cross-appeal

Keywords: Franchise Relationships, Commercial Leases, Notices of Default, Real Property, Validity of Notices, Landlord and Tenant, Service Requirements, Termination, Indemnity

FACTS:

Mr. Zagros Management Inc. (“MZ”) leased commercial premises from Yulee Developments Inc. (“YD”) for use by a franchise restaurant operated by 112543 Canada Inc. (“112”). Although 112 was not technically the tenant under the lease, it was the party responsible for paying rent directly to YD, and 112’s director SZ, provided indemnities to both MZ and YD guaranteeing rent payments.

112 subsequently failed to pay the rent and did not inform MZ. YD then issued a series of rent-default and termination notices, but each was addressed either to 112 or to SZ personally rather than to the actual listed tenant, MZ. As a result, the notices never reached the tenant before YD purported to terminate the lease and later re-leased the premises to a new company controlled by SZ.

MZ applied for declarations that the default and termination notices were void for improper service. The application judge agreed, finding the notices were not brought to the tenant’s attention as required by the lease, and awarded costs against the SZ parties. YD appealed, and MZ sought leave to appeal the costs ruling.

ISSUES:

1. Did the application judge err in finding that the Default Notice and Termination Notice were void because they were not properly served on MZ, the tenant, as required under the lease?

2. Did the application judge err in her costs disposition?

HOLDING:

Appeal and cross-appeal dismissed.

REASONING:

1. No.

The Court agreed with the application judge’s conclusion that both notices were void because they were not properly served on the tenant, MZ, as required by the lease. Although YD delivered the notices to the leased premises, they were improperly addressed to 112 or to SZ personally, rather than to the tenant named in the lease. As a result, they did not come to MZ’s attention, contrary to the lease’s service and notice provisions. Proper notice was a precondition to re-entry or termination, so this defect rendered the notices to be of no force and effect.

2. No.

The Court found no error in the application judge’s decision to decline ordering YD to pay MZ costs, even though this was the ordinary process. The judge explained that the application was necessitated by the tenant’s failure to ensure that rent was paid, and she was entitled to conclude that this failure contributed to the circumstances giving rise to the dispute. Therefore, it was open to the judge to exercise her discretion to order costs only against the SZ parties and require YD to bear its own.

Project Freeway Inc. v. ABC Technologies Inc., 2025 ONCA 855

[Paciocco, George and Monahan JJ.A.]

Counsel:

R. B. Cohen, T. Frankel and H. Dhaliwal, for the appellant

B. E. Berg and J. Schabas, for the respondents

Facts:

The respondents, ABC Technologies Inc. and ABC Technologies Holdings Inc. (“ABC”), contracted to make “Earn-Out Payments” of up to US$26,461,000 to the appellant vendor, Project Freeway, as partial consideration for its multimillion-dollar purchase of certain companies owned by the vendor (the “Target Companies”). Although the Share Purchase Agreement (the “SPA”) provided that ABC would pay Project Freeway at the end of each Earn-Out Period based on the Target Companies’ performance, s.3.10(12) set out events that would trigger immediate payment of the entire maximum earn-out. This dispute centred upon the parties’ conflicting interpretations of triggering provision s.3.10(12)(a), which stated that accelerated payment would be triggered if ABC sold “a material portion of the assets” of the Target Companies’ business to a non-affiliated purchaser, without Project Freeway’s “prior written consent.” Shortly after the purchase, ABC sold a large percentage of the Target Companies’ assets to a non-affiliated purchaser via a sale leaseback arrangement (the “Sale Leaseback”) and also factored the Target Companies’ accounts receivable (the “Factoring Agreement”). Notably, ABC did not secure Project Freeway’s prior written consent for either transaction.

Project Freeway contended that the Sale Leaseback triggered the full earn-out, but ABC disagreed. Hence, Project Freeway sued ABC for breach of contract, alleging that the Sale Leaseback and the Factoring Agreement were each independent triggers. The trial judge dismissed the action, finding that ABC had not breached the SPA. In her interpretation, for a sale to trigger accelerated Earn-Out Payments under s.3.10(12)(a), the transaction must be “material to the operation of the earn-out.” Neither the Sale Leaseback nor the Factoring Agreement qualified since they did not impact the Target Companies’ ability to hit financial performance targets used to calculate Earn-Out Payments. On appeal, Project Freeway asserted that the trial judge erred legally in misinterpreting s.3.10(12)(a), and also committed palpable and overriding factual errors relating to the impact of the two transactions on Project Freeway’s receipt of the Earn-Out Payments.

Issues:

1. Did the trial judge err by failing to respect the grammatical and ordinary meaning of s.3.10(12)(a) of the SPA?

2. Did the trial judge err by relying on the Letter of Intent terms to inform her contractual interpretation, contrary to the SPA’s entire agreement clause?

3. Did the trial judge err in concluding that Project Freeway’s preferred SPA interpretation would be commercially absurd?

4. Did the trial judge err in considering evidence of post-agreement conduct by individuals associated with Project Freeway?

5. Did the trial judge err in finding that the Sale Leaseback and Factoring Agreement were not material to the operation of the earn-out?

Holding:

Appeal dismissed.

Reasoning:

1. No. In cases like this, where the impugned contract raises implications mostly limited to the interests of the contracting parties, a trial judge’s contractual interpretation is a question of mixed fact and law attracting deference (absent an extricable error of law). The Court was not persuaded by Project Freeway’s submission that the trial judge ignored the ordinary meaning of “material portion” in the triggering provision. Project Freeway asserted that the language and context of the contract compelled the conclusion that “material portion” referred to the size of the sale, not the impact of the transaction on its ability to access the earn-out. This reading, it claimed, was supported by the use of the words “material impairment” in the second triggering provision, s.3.10(12)(b), specific language that the parties did not use in s.3.10(12)(a). The Court rejected this analysis, holding that the meaning of “material portion” was ambiguous and that the trial judge’s interpretation was reasonably supported by the contractual language. It was evident that the trial judge simply disagreed that s.3.10(12)(a) bore the ordinary, grammatical meaning that Project Freeway preferred. She considered the differences between the triggering provisions and held that they did not drive the outcome, preferring ABC’s interpretation over that of Project Freeway. ABC’s reading was supported by the contract’s factual matrix, consistent with its purpose, and commercially reasonable, unlike the appellant’s competing interpretation. Overall, the Court concluded that the trial judge was entitled to engage in the interpretive exercise via a practical approach and need not rely on an approach dominated by technical rules of contract construction.

2. No. The Court held that the trial judge’s consideration of the Letter of Intent (“LOI”) that the parties had engaged in prior to executing the SPA did not offend the entire agreement clause at s.14.11 of the SPA. She considered the LOI as merely one of “all the circumstances” that supported her conclusion that the word “material” in s.3.10(12)(a) meant material to the earn-out regime. The trial judge was entitled to use the LOI as an interpretative aid in this way. Responding to Project Freeway’s closely related assertion that the trial judge erred in using the LOI’s contents to support her contractual interpretation, the Court observed that the trial judge’s conclusions about principles reflected in the LOI were entitled to deference as related to issues of fact.

3. No. It was open to the trial judge to conclude that Project Freeway’s interpretation would be commercially absurd since, in her view, it would not make sense to accelerate the Earn-Out Payments merely because the purchaser entered a sale with no impact on the Target Companies’ financial performance. The Court rejected the appellant’s contention that the outcome was not absurd and merely reflected the bargain struck by the parties, finding that ambiguity existed allowing the trial judge to reach this conclusion.

4. No. The trial judge did not err in relying on a provision in the SPA relating to representations and warranties to buttress her conclusion that the knowledge of two individuals could be ascribed to Project Freeway, nor did she err in relying on the testimony of the Target Companies’ CEO. However, the trial judge drew a problematic factual inference when she concluded that it was significant that Project Freeway raised no concern despite being aware that ABC was negotiating a Sale Leaseback. A vendor, believing their consent would be sought pursuant to the contract before an asset sale triggering s.3.10(12)(a), would have no reason to raise concern. Nevertheless, any error the trial judge made in drawing this inference was not an overriding or reversible legal error, being far from a central consideration in her reasoning.

5. No. Project Freeway failed to indicate any palpable or overriding errors related to these findings, which were factual and owed substantial deference on appeal.

Gumbley v. Vasiliou, 2025 ONCA 851

[Lauwers, Paciocco and Dawe JJ.A.]

COUNSEL:

P. Kryworuk, S. Zacharias and S. Ronan, for the appellant

K. Bonn, P. Harte, M. Damiano, and J. Harte for the respondents

FACTS:

In October 2014, AG suffered a severe asthma attack and was taken by ambulance to Toronto East General Hospital, where her condition deteriorated. She was admitted to the ICU under the care of Dr. DV, and later intubated and ventilated. About a week later, AG showed signs of serious neurological injury; she was ultimately left an incomplete quadriplegic, unable to walk, incontinent, and requiring 24-hour care.

The trial judge found that Dr. DV was negligent in several respects as she: failed to call the on-call ICU specialist, Dr. W, in a timely manner; failed to decide to intubate earlier; failed to carry out intubation as soon as reasonably possible once that decision was made; and failed to ensure the most experienced clinician available performed the intubation and managed ventilation. The central dispute on appeal was causation, being the determination of whether AG brain injury occurred while under Dr. VDV’s careand whether the trial judge improperly relied on a critical care note dictated by Dr. W to conclude that AG was hypoxemic and suffered her brain injury while under Dr. DV’s care.

ISSUES:

1. Did the trial judge improperly rely on the critical care note?

2. Did the trial judge err in the causation analysis?

HOLDING:

Appeal dismissed.

REASONING:

1. No

The Court held that the trial judge was entitled to rely on Dr. W’s critical care note and did not use it for an improper hearsay or opinion purpose. The note was part of the agreed joint document brief and qualified as a hospital business record, making it admissible to show the information Dr. W received when he assumed care.

Because the note reflected Dr. DV’s own medical assessment, it was admissible as a party admission and could be relied on for the truth of its contents. The Court went on to reject the argument that such reliance violated limits in the parties’ document agreement, noting that the opinion being relied upon in the critical care note was not Dr. W’s opinion at all, but Dr. DV’s. Finally, the trial judge’s inference about authorship of the information was open to him on the record. Accordingly, there was no evidentiary error in the use of Dr. W’s critical care note.

2. No

The Court rejected the argument that the trial judge failed to properly link Dr. DV’s specific breaches of the standard of care to AG’s brain injury. The Court emphasized that causation in medical-negligence cases is a factual determination owed substantial deference on appeal, especially where the trial judge has weighed extensive and conflicting expert evidence.

The Court held that trial judge made two core factual findings that together established causation. First, based on the admissible evidence, including the critical care note, Dr. DV’s own admissions, and the expert evidence of the respondent, he found that AG was hypoxemic and experiencing severe metabolic derangements between approximately 10:30 p.m. and midnight on October 9, the window in which he determined the brain injury occurred.

Second, the trial judge found that had Dr. DV acted with appropriate urgency by calling for help earlier, deciding to intubate earlier, and ensuring the procedure was performed promptly and by the most experienced clinician, AG likely would have avoided the injury. This conclusion was supported by multiple experts, who testified that timely intubation in severe asthma cases is critical, and that earlier ventilation would likely have prevented the cascade of hypoxia, hypercarbia, and acidosis that resulted in catastrophic brain damage. The trial judge was entitled to prefer this evidence over the appellant’s experts who either discounted the significance of the missing oxygen data or assumed the injury must have occurred days later.

The Court rejected the submission that the trial judge improperly considered the breaches “cumulatively.” His analysis identified each specific omission and explained how each contributed to the unsafe period of respiratory decline. The judge’s reasoning did not aggregate unrelated breaches; it traced a continuous sequence in which each delay worsened AG’s physiological instability.

Nguyen v. Pham, 2025 ONCA 858

[Roberts J.A. (Motion Judge)]

Counsel:

Q. Ali, for the moving party, T.T.L.P.

R. Masellis, for the responding party, S.T.N.

Facts:

This motion was the latest in a series of procedural steps taken by TTLP in hotly contentious family law proceedings involving his ex-wife, STN. TTLP sought an extension to serve and file his notice of appeal from the underlying August 5, 2025 judgment, arguing that the extension was in the interests of justice as the subject delay was one day and as his appeal was meritorious. In response, the STN maintained that the appeal was frivolous and vexatious. She submitted that the TTLP’s delay in advancing his appeal was part of an ongoing pattern of unreasonable conduct that had continued since separation and throughout the litigation.

Issue: Should TTLP be granted an extension of time to serve and file his notice of appeal?

Holding:

Motion dismissed.

Reasoning:

No.

The Court held that it was not in the interests of justice to grant the requested extension, and dismissed TTPL’s motion for extension of time to serve and file his notice of appeal. The analysis was based the following four factors:

1) The requisite and timely formation of TTLP’s intention to appeal;

2) The length of, and explanation for, the filing delay;

3) Any prejudice to STN because of the delay; and

4) The merits of the proposed appeal.

Considering the first three interrelated factors, the Court observed that a redacted retainer indicated that TTLP had contacted counsel by August 27, 2025, and had retained counsel by September 3, 2025. Hence, though it was at the last minute, the Court accepted that TTPL did form the requisite intention to appeal within the 30-day prescribed deadline to appeal under the Rules.

Regarding delay, TTPL served and attempted to file his notice of appeal and certificate of evidence one day late, on September 5, 2025. This short delay was considered in light of TTPL’s further delay by not bringing the within motion until October 27, 2025. Such combined delay was significant and exemplified that TTPL’s pattern of delay would likely continue should his appeal be permitted to proceed. Furthermore, the explanation for the delay was inconsistent. An affidavit filed by TTPL claimed that the notice of appeal was filed on September 4, 2025, and that only through inadvertence was opposing counsel served on September 5, 2025, but no evidence supported the alleged September 4 filing.

While by themselves these circumstances were not egregious or remarkable, they held importance when contextualized amid TTPL’s consistently unreasonable conduct post-separation. The Court observed that TTPL’s unwarranted refusals and last-minute consents, repeated delays, and failure to comply with court orders bore all the hallmarks of frivolous, vexatious litigation. Though this minor delay may not have prejudiced the STN, prejudice frm TTPL’s continuing conduct was substantial and relevant.

Turning to the merits, the central question was whether the proposed appeal had so little merit that TTPL should be deprived of his important appeal right. In determining this issue, the Court held thatnone of the alleged reversible errors stated in TTPL’s appeal notice had any merit – instead, they were thinly guised attacks on the application judge’s careful reasons which were owed deference.

First, TTPL complained about the application judge’s striking of his pleadings and affidavit at the outset of trial. The Court acknowledged that discretion to strike pleadings and restrict participation must be exercised sparingly but held that the application judge correctly applied relevant principles justifying her decision, which was grounded in TTP’s ongoing misconduct. Second, the Court rejected the TTPL’s contention that the application judge erred in determining he should pay occupation rent amounting to $56,590, finding her decision was informed by the TTPL’s unreasonable refusal to sell the matrimonial home until litigation commenced. Moreover, the application judge’s finding that the STN was forced to move out of the home with their daughter to escape TTPL’sviolence was entitled to deference. The application judge also made no error in calculating post-separation adjustments. Finally, the application judge sensibly exercised her discretion in ordering that previous costs awards be deducted from the TTPL’s share of the home sale proceeds, which were to be kept in trust pending judgement as security for the STN’s costs. The TTPL’s past failure to pay costs justified this arrangement.

R.W. Tomlinson Limited v. Labourers’ International Union of North America, Local 527, 2025 ONCA 861

[Tulloch C.J.O., Pepall and Pomerance JJ.A.]

Counsel:

D.P. Taylor and S. Grassie, for the appellants

E. Schirru and D. Rosenfeld, for the respondents

Facts:

The appellant, R.W. Tomlinson, was a construction corporation. Its road and sewer workers were unionized and represented by the respondent, Labourers' International Union of North America, Local 527 (the "Union"). The employees in its Ready Mix division, which produced and supplied concrete, were not unionized. The other two appellants, 283 Ontario and Tomlinson Environmental, were separately incorporated members of the Tomlinson Group. The Union did not represent employees at either company.

When the collective agreement between R.W. Tomlinson and the Union expired, the Union commenced a lawful strike. During the strike, the appellant corporations commenced an action against the Union and four Union leaders, the respondents LC, SM, CT, and RM. They sought injunctive relief and alleged that the strike caused commercial harm across the Tomlinson Group. The Superior Court issued a consent order that established a picketing protocol. Picketing ended the following day when a settlement was reached between Ottawa roadbuilding employers and unions and resulted in a new collective agreement that was applied retroactively to the strike period.

Nearly a year and a half after the settlement, and as the renewed collective agreement approached renegotiation, the appellant corporations began to actively pursue their litigation against the respondets. They amended their claim to proceed under the simplified procedure and sought monetary damages. The respondents moved to dismiss the action for lack of jurisdiction under r. 21.01(3)(a) of the Rules of Civil Procedure or alternatively to strike certain claims under r. 21.01(1)(b). They submitted that a labour arbitrator had exclusive jurisdiction pursuant to s. 48(1) of the Labour Relations Act (the "LRA") and the arbitration clause in the collective agreement.

The appellants argued that the arbitrator lacked personal jurisdiction over 283 Ontario and Tomlinson Environmental and lacked subject-matter jurisdiction as the dispute did not arise from the collective agreement, but from alleged tortious interference with private property. The motion judge dismissed the action for lack of jurisdiction and, therefore, did not consider the motion to strike. The motion judge did not address the appellants' argument that the claims by 283 Ontario and Tomlinson Environmental could proceed in court given that the arbitrator lacked personal jurisdiction over them.

Issues:

1. Does the labour arbitrator have subject matter jurisdiction over the dispute between R.W. Tomlinson and the respondents?

2. Should the claims of 283 Ontario and Tomlinson Environmental be dismissed for lack of jurisdiction or temporarily stayed pending the arbitration of R.W. Tomlinson’s claims?

Holding:

Appeal allowed in part.

Reasoning:

1. Yes.

The Court held that R.W. Tomlinson, as a party to the collective agreement, had to arbitrate its dispute with the respondents. Labour arbitrators have exclusive subject-matter jurisdiction pursuant to s. 48(1) of the LRA if the collective agreement expressly or implicitly covers the essential character of the dispute.

The appellants correctly noted that the motion judge erred in suggesting that the mere presence of a labour dispute was sufficient to establish arbitral jurisdiction. Not every labour dispute was arbitrable; only disputes that arose from the collective agreement fell within an arbitrator's authority.

The Court held that the renewed collective agreement applied retroactively and therefore governed the strike period. Although the agreement did not expressly reference picketing, Article 4.1(a)'s management-rights clause granted R.W. Tomlinson exclusive authority over the conduct of its entire business and operations. Properly construed, this broad grant included protection against picketing-related disruption of operations. The appellants alleged precisely such interference. The essential character of the dispute, interference with the employer's business and operations, thus arose from the collective agreement.

The Court held that R.W. Tomlinson could not avoid arbitration by characterizing its allegations as common law torts arising from picketing, nor could it circumvent arbitral jurisdiction by linking its claims to those advanced by 283 Ontario and Tomlinson Environmental. Further, Article 12.1's strike prohibition did not negate the application of Article 4.1(a); Article 12.1 operated prospectively and reading it otherwise would have retroactively prohibited the lawful strike that produced the agreement, an untenable interpretation.

Arbitration did not deprive R.W. Tomlinson of an available remedy. It could grieve an alleged breach of Article 4.1(a), even if the arbitrator ultimately declined jurisdiction over some tort claims. Whether jurisdiction ultimately existed was for the arbitrator to decide.

2. No.

The Court held that the motion judge should not have dismissed the claims for lack of jurisdiction. Instead, he should have temporarily stayed them under r. 21.01(3)(a) pending the arbitration between R.W. Tomlinson and the Union.

The Court, citing Weber v. Ontario, [1995] 2 S.C.R. 929, recognized that parallel court proceedings between the parties to a collective agreement undercut labour arbitration. Parallel litigation involving non-parties posed similar risks and courts must prevent those risks from materializing. However, permanently removing the judicial forum without providing an arbitral one in its place denied litigants any forum to adjudicate those claims.

The Court held that a labour arbitrator’s jurisdiction has two distinct dimensions: subject-matter jurisdiction and personal jurisdiction. Arbitrators have no personal jurisdiction over litigants who are not parties to the collective agreement unless they voluntarily and expressly agreed to arbitrate. When an arbitrator lacked personal jurisdiction over some parties to a dispute, the ordinary courts retained jurisdiction. The text of s. 48(1) of the LRA did not remove the right to bring claims involving non-parties in court. Instead, it only mandated arbitration of disputes “between the parties” to a collective agreement.

The Court held that the motion judge’s central conclusion was sound, the claims of 283 Ontario and Tomlinson Environmental should not have proceeded at that time because they would undercut the labour arbitration.

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Court of Appeal Summaries (December 8 – December 12)

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