Hello everyone. Below are summaries of this week’s Ontario Court of Appeal civil decisions (non-criminal). Topics include motions to strike, family law, undisclosed material changes in condominium construction plans, and judicial review of a Toronto Chief of Police Order. As noted on the Court of Appeal website, Osgoode Hall was closed today due to an electrical fire and no Friday decisions were released. Hope everyone has a good weekend.

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John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416.593.2953

http://www.blaney.com/lawyers/john-polyzogopoulos

465519 Ontario Limited v Sacks, 2015 ONCA 175

[Cronk, Gillese and Brown JJ.A.]

Counsel:

F.S. Turton, for the appellants

O.Strawczynski, for the respondent

Keywords: Civil Litigation, Rules of Civil Procedure, Rule 21.01(b), Motion to Strike, Limitation Period, Dissolved Corporation, Post-Ruling Communications with Judge, Rule 1.09, Fundamental Fairness

Facts: 

Cliffwood Plaza Corp. moved under rule 21.01(b) of the Rules of Civil Procedure to strike the appellants’ entire pleading on the basis that it disclosed no reasonable cause of action. Cliffwood Plaza Corp. argued that although the appellants’ action was commenced prior to the expiry of the two-year limitation period, 465519 Ontario Limited’s claim was a nullity because its corporate charter has been revoked and it was a dissolved company when the action was initiated. Since 465519 Ontario Limited’s corporate status was not revived until after the expiry of the limitation period, Cliffwood Plaza Corp. argued that its claim, and the derivative claims of the remaining appellants, could not succeed. Cliffwood Plaza Corp. also maintained that the appellants’ pleading of the only claim against Cliffwood, that of civil conspiracy, was fatally deficient and incapable of success.

The motion judge accepted the limitation period argument and struck the claim on the ground that it was statute-barred. At the request of Cliffwood’s counsel the motion judge subsequently amended her ruling to also strike the entire action, including the claims of the individual appellants, as against Cliffwood. The appellants appealed from this order striking the claim of 465519 Ontario Limited and the “entire action” as against the respondent, Cliffwood Plaza Corp.

Issues:

  1. Did the motion judge err in holding that 465519 Ontario Limited’s claim against Cliffwood Plaza Corp. was statute-barred due to the expiry of the applicable limitation period and, hence, that it could not succeed?
  2. Did the motion judge err in striking the entire action against Cliffwood, including the claims of the individual appellants?

Holding:

Appeal allowed in part, by striking the words “and the entire action” from paragraph one of the motion judge’s order without prejudice to Cliffwood renewing its motion to strike the individual appellants’ claims against Cliffwood. In all other respects, the appeal is dismissed.

Reasoning:

  1. No, 465519 Ontario Limited had no legal status to commence an action while it was dissolved. The court agreed with the motion judge that the action commenced in its name on February 8, 2012 was a nullity. The limitation period ran its course prior to the date of the corporation’s revival. 602533 Ontario Inc v Shell Canada Ltd., had direct application and was dispositive of 465519 Ontario Limited’s claim against Cliffwood.
  2. Yes, the motion judge’s ruling striking the entire action as against Cliffwood could not stand and needed to be set aside. The court held that the post-hearing communication with the motions judge was inadvisable and contrary to rule 1.09. The delivery of the letter, without consent of the appellants’ counsel and in the face of his opposition to its delivery to the motions judge was an issue. The court did not agree that the letter was inconsequential to the change in the motion judge’s ruling. The court held that the letter precipitated a significant amendment to the motion judge’s ruling, whereby the individual appellants’ claims were struck without explanation and without the motion judge having had the benefit of submissions from counsel for the individual appellants. The change in her ruling should not have been made without providing the appellants’ counsel with an opportunity to challenge the requested change and to make further submissions if so advised. Fundamental fairness required that this part of the decision be set aside.

Mroz v. Mroz, 2015 ONCA 171

[Doherty, Gillese and Lauwers JJ.A.]

Counsel:

M.T. Hyde, for the appellant

M. Czuma, for the respondents

Keywords: Estates Law, Wills, Joint Tenants, Resulting Trust, Right of Survivorship

Facts:

An aging mother (“Kay”) transferred title to the family home (the “Property”) to herself and her daughter (“Helen”), as joint tenants. The family home was the mother’s only significant asset. At the same time as she directed that the transfer be made, the mother executed a will in which she referred to the family home and made bequests to a number of family members.

In the 2004 Will, Kay named Helen and her nephew, Richard, as her executors and bequeathed $50,000 to Richard and his family.  She also stipulated that her “share of the [P]roperty” was to go to Helen, on the condition that within a year of her death, Helen paid $70,000 to each of Martin and Adrianna, Kay’s grandchildren.

Shortly after Kay’s death, Helen sold the Property for approximately $476,000. She used the sale proceeds for herself. All of this was done without notifying Richard, her co-executor under the 2004 Will. As a result of Helen’s actions, the Property did not pass through Kay’s estate. Apart from the Property, the value of Kay’s estate was approximately $3,200.

Martin and Adrianna started legal proceedings in which they challenged the validity of the 2004 Will and Helen’s conduct in relation to the Property. The trial judge found that the 2004 Will was valid and the presumption of resulting trust in respect of the Property had been rebutted, stating that when Kay transferred the Property into joint tenancy with Helen, Kay “wished to gift Helen full title to the house upon Kay’s death and specific bequests, including the monies for the grandchildren, were to be paid from the proceeds of sale”.

However, the trial judge also found that Helen’s failure to pay $70,000 to each of Martin and Adrianna was declared to be a breach of trust and Helen was ordered to pay them those sums, plus pre-judgment interest. Helen appealed. The essence of her appeal was that once the trial judge found that the presumption of resulting trust had been rebutted, the Property passed to her by right of survivorship and, therefore, she had no legal obligation to pay the legacies to Martin and Adrianna.

Martin and Adrianna cross-appealed. The essence of their cross-appeal was that the trial judge erred in finding that the presumption of resulting trust had been rebutted and, accordingly, the Property formed part of Kay’s estate.

Issue(s):

  1. Did the trial judge err in finding the 2004 Will valid?
  2. Did the trial judge err in finding that Helen is obliged to pay Martin and Adrianna the amount of their bequests under the 2004 Will?

Holding:

Appeal and cross-appeal dismissed.

Reasoning:

  1. No. On appeal, the court found that the trial judge’s findings, that Kay had testamentary capacity and that Helen did not exert undue influence on her, were fully available on the record. Therefore, the court did not interfere with the determination that the 2004 Will was valid.
  2. No. The court found that the trial judge correctly concluded that Helen was liable to pay $70,000 to each of Martin and Adrianna and that Helen’s failure to have made those payments from Kay’s estate was a breach of trust. However, Gillese J. arrived at this conclusion for different reasons than those given by the trial judge.

The Court of Appeal found that Helen held the Property on resulting trust. Consequently, when Kay died, the Property formed part of Kay’s estate and was to be dealt with in accordance with the 2004 Will.

Under the terms of the 2004 Will, Martin and Adrianna were each entitled to a legacy of $70,000 and those legacies were a first charge on the Property. However, since Pecore v. Pecore, 2007 SCC 17, [2007] 1 S.C.R. 795, in which the Supreme Court clarified the law regarding the presumptions of resulting trust and advancement, it is clear that once the trial judge found that the sale of the Property after Kay’s death was to be the source of funds for bequests under the 2004 Will, she could not find that the presumption of resulting trust had been rebutted.

A resulting trust arises when title to property is in one party’s name but that party, because he or she is a fiduciary or gave no value for the property, is under an obligation to return it to the original title owner. When a parent gratuitously transfers property to his or her adult child, the law presumes that the child holds the property on resulting trust for the parent. The burden of rebutting the presumption is on the child. In determining whether the presumption has been rebutted, the trial judge must begin his or her inquiry with the presumption and then weigh all of the evidence in an attempt to ascertain, on a balance of probabilities, the parent transferor’s actual intention at the time of transfer.

The trial judge’s key findings on Kay’s actual intent at the time of transfer are as follows: Kay wanted Helen to have title to the Property after her death; Kay wanted her grandchildren and Richard’s family to receive their bequests from the sale of the Property; and Kay wanted Helen to pay the bequests to Kay’s two grandchildren within a year of her death from the proceeds of sale of the Property. The evidence indicated that Kay wanted to use the proceeds of sale of the Property to make the bequests to Richard and his family, and to each of her two grandchildren.

H.B. Fuller Company v Rogers (Rogers Law Office), 2015 ONCA 173

[Weiler, Epstein and Brown JJ.A.]

Counsel:

D. Templer, for the appellants

P. Bremner, for the respondent

Keywords:Rules of Civil Procedure, Registrar’s Dismissal for Delay, Setting Aside, Rules 48.14, 37.14, Status Notice

Facts:

H.B. Fuller Company and H.B. Fuller Construction Products Inc., the appellants, commenced an action in October 2011 alleging that the respondent, Computer Packages Inc. (“CPI”), failed to monitor the dates when patent maintenance fees for certain of the appellants’ patents became payable. The appellants further alleged that CPI negligently relied on, and failed to verify the incorrect representations of, the respondent Rogers, a Toronto-based patent lawyer against whom the appellants also brought a claim for damages in negligence.

Rogers filed his Statement of Defence on December 21, 2012, more than 14 months after service of the Statement of Claim. The parties began discussions regarding discovery. Rogers then died on July 17, 2013. CPI served and filed its Statement of Defence on July 22, 2013.

On November 8, 2013, the registrar issued a status notice because, pursuant to the former Rule 48.14 of the Rules of Civil Procedure, the appellants had not set the action down for trial within the required time (2 years). The appellants’ solicitors did not receive the status notice. Although the proper address for service was clearly indicated on the statement of claim, the registrar apparently sent the notice to the wrong address. The subsequent order from the registrar dismissing the action, dated February 24, 2014, was also sent to the wrong address.

After discovering the dismissal, instead of contacting CPI immediately and seeking its consent to set aside the order of the registrar, the appellants’ counsel took the position that the registrar had no jurisdiction to dismiss the action for delay because the status notice had not been properly served. This was an error of law as the failure to properly serve a status notice is an irregularity and does not oust the registrar’s jurisdiction to dismiss the action.

On June 9, 2014, the appellants brought a motion under Rule 37.14 seeking to set aside the registrar’s order. The motion judge, Myers J., held that the appellants had not met their burden to explain the delay in moving to set aside the registrar’s order. Further, he held that the appellants had not met their burden of showing that Rogers’ death in 2013 did not cause any prejudice to CPI.

Holding:

Appeal allowed.

Reasoning:

The motion judge’s decision was discretionary and entitled to deference on appeal, however, reversal is appropriate where the lower court gives no or insufficient weight to relevant considerations.

In determining whether to set aside a registrar’s order dismissing an action for delay, the judge must consider and weigh four well-known factors: (1) the length of the litigation delay and whether the plaintiff has provided an adequate explanation for it; (2) whether the failure to meet the mandated time limits was due to inadvertence; (3) whether the motion to set aside the dismissal order was brought promptly; and (4) whether the delay has prejudiced the defendant. The judge must adopt an overall contextual approach in arriving at a just result in the particular circumstances of the case.

The motion judge’s analysis ignored the fact that the appellants did move to set aside the order reasonably quickly – just over three months after the action was dismissed for delay. It also ignored that their delay in moving to set aside the order was due, in part, to the appellants’ solicitors’ mistaken view that the registrar lacked jurisdiction to dismiss the action. While this erroneous legal interpretation did not excuse the delay, that the delay proceeded from the inadvertence of the appellants’ solicitors is a factor that must be considered. More importantly, the motion judge also failed to consider that, because the status notice went to the wrong address, the appellants lost the opportunity to prevent their action from being dismissed for delay. In the particular circumstances of this case, this was a key factor that had to be considered in assessing whether it was just to set aside the order of dismissal.

Overall, the appellants had explained the delay in their conduct of the litigation and the delay in moving to set aside the dismissal order was not so great as to yield to CPI’s reliance on the security of its position.

With respect to prejudice, the motion judge failed to consider evidence respecting the respondent’s conduct. The circumstances in this case were distinguishable from the situation in Faris v Eftimonski, 2013 ONCA 360. It was unfair in the circumstances of this case to ignore CPI’s passivity. CPI did nothing from July 2013 to May 2014. It was content to let the appellants focus on Rogers/Law Pro, as any settlement they might reach with him potentially reduced its liability. This passivity undercut the claim of actual prejudice.

A second error on the part of the motion judge with respect to prejudice was that he did not advert to a significant piece of evidence, namely the appellants’ solicitor’s affidavit that he was unaware of any prejudice to the respondent in setting aside the order. It was open to the motion judge to reject this affidavit evidence as being a bald and unsupported statement, but he was not entitled to simply ignore that evidence.

Finally, the motion judge did not link the question of prejudice to whether a fair trial was still possible and made no finding in that regard.

Overall, and reweighing the evidence of prejudice, nothing occurred between the issuance of the status notice and the motion to set aside the dismissal order that increased the prejudice to CPI. The appellants had rebutted the presumption of non-compensable prejudice. Nor was the delay in moving to set aside the registrar’s order once it came to the appellants’ attention so great that the principle of finality and CPI’s reliance on the security of its position must prevail. A fair trial was still possible in these circumstances.

Warshafsky v. Gasner, 2015 ONCA 174

[Cronk, Gillese and Brown JJ.A.]

Counsel:

W. Friedman and M. Russell, for the appellant

A. Rosen and K. Eckert, for the respondent

Keywords:   Family Law, Matrimonial Home, Domestic Contracts

Facts:

The parties married in their late 60s. Both had adult children. After full financial disclosure and independent legal advice, the parties entered into a marriage contract that provided, among other things, that each would pay for his or her own nursing and health care expenses.

The appellant fell ill and was hospitalized in late 2011. After his health improved somewhat, he wanted to return home. The respondent, 80 years old at the time, indicated that she could not properly care for him in their home. The appellant lived in extended care facilities until his death on July 1, 2014.

The parties separated in May 2012 and ultimately divorced on April 2014.

In August 2013, the appellant, through his litigation guardian, brought a claim against the respondent flowing from her allegedly unlawful refusal to allow him to return to the matrimonial home. The appellant sought to have the marriage contract set aside, and asked for damages for occupation rent due to the appellant’s loss of possession of the matrimonial home. Those damages were quantified as being the costs of nursing care and medical expenses.

The respondent successfully moved for summary judgment. The motion judge found there was no evidence that the respondent refused to allow the appellant to return to the matrimonial home.

Issue:

Did the motion judge err in finding that there was no genuine issue requiring a trial on the question of whether the respondent improperly barred the appellant from the matrimonial home?

Holding:

Appeal dismissed.

Reasoning:

No. The motion judge’s finding with regards to the respondent’s alleged refusal was amply justified by the record. The evidence showed that the appellant simply indicated that she could not properly meet the appellant’s health needs in the home. Neither the appellant nor his children presented the respondent with an appropriate plan of care to meet the appellant’s health needs while in the matrimonial home.

In any event, the claim for reimbursement of medical and nursing expenses is barred by the marriage contract.

Auciello v. Canadian Imperial Bank of Commerce (CIBC), 2015 ONCA 178

[Epstein, Pepall and Benotto JJ.A.]

Counsel:

V. Auciello, acting in person

R. Aisenberg, for the respondents

Keywords: Civil Litigation, Appeal Book Endorsement, Motion to Strike, No Reasonable Cause of Action

Issue:

Did the motion judge err in striking the pleadings against CIBC?

Holding:

The appeal was dismissed, and costs fixed at $2,000 were payable to the respondents.

Reasoning:

No. There was no error in the motion judge’s decision that the appellant’s pleadings failed to disclose a reasonable cause of action.

Jiang v. Jade-Kennedy Development Corporation, 2015 ONCA 177

[Epstein, Pepall and Benotto JJ.A.]

Counsel:

J.O’Sullivan, for the appellant

S. Schwartz, for the respondent Jade-Kennedy Development Corporation

Keywords: Real Estate, Commercial Condominium, Undisclosed Material Change, Condominium Act, 1998

Facts:

The appellant purchased a pre-construction commercial condominium unit from the respondent. He was provided with a disclosure statement containing two draft condominium plans. Two months later, he received a supplemental disclosure statement that contained a revised draft condominium plan. In all three plans the storefront was depicted by a straight line. The appellant thought that the storefront of his unit would be all glass. However, three years later, he inspected the nearly-completed unit and discovered a large concrete pillar bisecting the glass store front. The appellant refused to close the transaction. Litigation ensued in which the appellant’s claims included rescission and damages.

At trial, the appellant argued that the existence of the pillar was not disclosed in either of the disclosure statements, as the straight line on the draft plans led one to believe that no pillar would be present. The appellant argued that the existence of the pillar constituted a material change that should have been disclosed.

The trial judge found that the appellant’s assumption that the storefront shown on the plans was all glass was not supported by the documents provided. The appellant appealed.

Issues: 

  1. Did the trial judge err by finding that there was no material change to the information contained in the disclosure statement?
  2. Did the trial judge err by finding that the disclosure statement was not required to disclose the pillar?

Holding:

Appeal Dismissed

Reasoning:

  1. No. The straight line on the condominium plans, which were all schematic in nature, did not indicate the absence of a pillar, thus the presence of a pillar did not constitute a material change. The Condominium Act, 1998 requires that the disclosure statement provide that the plan is “intended to give purchasers an overview of the units in the Condominium and the location of the Condominium.” It was not intended to provide structural details.
  2. No. The Court found that point was not the subject matter of the issue ordered to be tried, was not argued before the trial judge, and was not addressed in the judgment under appeal. The Court declined to address this issue.

Saisho v. Loblaw Companies Limited, 2015 ONCA 172

[MacFarland, Pardu and Huscroft JJ.A.]

Counsel:

P. Pape and J. Nairn, for the appellants

C. Brochu, for the respondents Loblaw Companies Limited and Westfair Properties Ltd.

Keywords:  Personal Injury, Torts, Occupier’s Liability, Standard of Care, Reasonableness, Occupiers’ Liability Act, Section 3

Facts:

Mr. Beardy, a patron of the respondents’ store overloaded his cart (after he had paid) to the point that he could not see over the top and was unable to see what was directly in front of him. The patron’s cart eventually struck Mr. Saisho, a 90 year-old man who walked very slowly with the assistance of a cane. This accident confined him to the hospital from the accident date to the date of this death. The law was not in dispute and section 3 of the Occupiers’ Liability Act governed the situation. The trial judge found that the store policies in respect of general health and safety, and directions given to employees to take action if they saw a hazard “were adequate and reasonable” in all the circumstances. He therefore dismissed the action against Loblaws and Westfair.

Issues:

  1. Was the store policy inadequate and there ought to have been a specific policy dealing with overloaded shopping carts and requiring checkout cashiers to specifically look to ensure their customers did not overload their carts?
  2. If the store policy was reasonable, was it breached because, although store employees saw the overloaded cart, they did not intervene?

Holding:

Appeal dismissed.

Reasoning:

  1. No.  The written store policy was in general terms and as per the evidence adduced at trial, the employees were well aware that overloaded shopping carts presented the potential to cause injury or harm. To require a standard that would specifically address the problem of overloaded shopping carts (as the appellants suggested) would require a standard of perfection and that is not what the law requires.
  2. No.  The trial judge found that it was not reasonable to expect a cashier to be vigilant to look behind themselves to ensure that two distinct customers were not loading up their purchases into one cart. Mr. Beardy testified he was rushing and made a bad decision. The trial judge concluded that it was not reasonable to make the respondent store owners liable for the poor decision of Mr. Beardy. The conduct of the respondent store owners was reasonable in the circumstances and the law requires nothing more.

Leighton v Best, 2015 ONCA 180

[Lauwers, Hourigan and Pardu JJ.A.]

Counsel:

L.D. Belcourt, for the appellants

R. Kerr, for the respondent

Keywords: Bankruptcy and Insolvency Law, Bankruptcy and Insolvency Act, ss. 178(1)(a.1)(i), Claims Surviving Bankruptcy, Intentionally Inflicted Bodily Harm, Hockey

Facts:

The respondent Matthew Best punched the appellant Randy Leighton in the jaw during a recreational hockey game. The force of the blow sent the appellant to the ice and broke his jaw in three places. Following a trial, Riopelle J. found the respondent liable in damages for battery on the basis that the punch exceeded the scope of the appellant’s consent to the application of force. The respondent went bankrupt before satisfying the damage award he owed to the appellants. The appellants brought a motion for a declaration that under ss. 178(1)(a.1)(i) of the Bankruptcy and Insolvency Act, the respondent was not released from his obligation to pay the damage award. That motion was dismissed, meaning the damage award was discharged by the bankruptcy.

 

The appellants challenged the decision of the motion judge that the damage award did not survive the respondent’s bankruptcy. The motion turned on whether the damage award was for “bodily harm intentionally inflicted”. The motion judge noted that recklessness or negligence were not sufficient to establish that bodily harm was intentionally inflicted, but there had to be actual intent to cause bodily injury, not simply intent to do the act that caused harm. The motion judge relied heavily on Dickerson v 1610396 Ontario Inc. and held that it had not been proven that there was an intent to inflict bodily harm. Dickerson was reversed by the Court of Appeal shortly after the motion judge delivered his decision.

Issue:

Did the motion judge err in determining the damage award did not survive the respondent’s bankruptcy?

Holding:

Appeal allowed, the damages, interest and costs awarded to the appellants by Riopelle J. survive the respondent’s bankruptcy pursuant to s. 178(1)(a.1)(i) of the Bankruptcy and Insolvency Act. Costs awarded to the successful appellants in the agreed amount of $7,500.

Reasoning:

Yes, the motion judge erred in concluding that there was no intent to inflict bodily harm and that damages for a single punch should not survive bankruptcy. The fact that the punch was intentional is not enough, but the respondent must have intended for the punch to cause bodily harm. In this case, the court held that the inference that the respondent intended to cause significant bodily harm was inescapable.

The court held that the fact that there was a single punch did not preclude the finding that the respondent intended to, and did, cause bodily harm to the appellant. An intention to cause significant bodily harm was sufficient to bring the damage award related to that conduct within the exception of  ss. 178(1)(a.1)(i) of the Bankruptcy and Insolvency Act.

Spirleanu v. Transglobe Property Management Service Ltd., 2015 ONCA 187

[Cronk, Gillese and Brown JJ.A]

Counsel:

I. Spirleanu, acting in person

M.P. Zarnett, for the respondent

Keywords: Civil Litigation, Endorsement, Summary Judgment, Fresh Evidence on Appeal

Facts:

The appellant appeals the order of Pollak J., which granted summary judgment dismissing his action against the respondent, and awarded the respondent costs. The appellant was previously evicted by the Landlord and Tenant Board from his residence. The appellant subsequently brought an action against the respondent for unlawful eviction, despite the dismissal of his appeal of the Landlord and Tenant Board’s order, and the dismissal of his additional action in the Small Claims Court for the same matter.

Issues:

  1. Should the appellant be granted leave to file fresh evidence on the appeal?
  2. Did Pollak J. err in granting the respondent’s summary judgment motion?

Holding:

The appeal was dismissed and costs of $1,000 were payable to the respondent.

Reasoning:

  1. No. The appellant moved to introduce the Landlord and Tenant Board file dealing with eviction, the Sheriff’s file relating to his eviction, and miscellaneous photos and correspondence. These materials did not meet the criteria for the admission of fresh evidence set out in R v Palmer because they were all available to the appellant before the summary judgment motion, however he failed to file them in his responding materials.
  2. No. Pollak J. applied the relevant legal principles to the evidence, and did not err in granting summary judgment. She found that the appellant was attempting to re-litigate issues that had previously been decided against him by the Landlord and Tenant Board, the Divisional Court, and the Small Claims Court. Further, Pollak J. was correct in finding that this matter lay within the exclusive jurisdiction of the Landlord and Tenant Board.

Toronto (Police Association) v Toronto (Police Services Board), 2015 ONCA 188

[Feldman, Watt and van Rensburg JJ.A.]

Counsel:

M.A. Hines, for the appellant

I.J. Roland and M. Fenrick, for the respondent

Keywords: Administrative Law, Labour Law, Judicial Review, New Brunswick v Dunsmuir, Reasonableness, Arbitrability, Jurisdiction, Police Services Act, Police Labour Relations

Facts:

The Toronto Chief of Police issued an Order requiring officers under suspension to report twice daily at police headquarters. The Toronto Police Association (“the Association”) filed a policy grievance challenging the reasonableness of the Order. The preliminary issue before the arbitrator was her jurisdiction to hear the grievance. If the Order involved a management rights issue that fell within the ambit of the Collective Agreement, it could be the subject of a grievance. If the Order fell within the statutory prerogative of the Chief of Police to manage the discipline of officers, make operational decisions and conduct the day-to-day operation of the police force, the arbitrator had no jurisdiction to review it.

The arbitrator concluded that the Order was not arbitrable. The Association sought judicial review of the decision before the Divisional Court. Applying the reasonableness standard of review as established in New Brunswick (Board of Management) v. Dunsmuir, 2008 SCC 9, [2008] 1 S.C.R. 190, the Divisional Court found that the decision of the arbitrator was unreasonable. Leave was granted for the Toronto Police Services Board (“the Board”) to appeal to the Court of Appeal.

Issue:

Was the twice-daily reporting requirement a working condition governed by the Collective Agreement, or was it a matter of discipline, or day-to-day operations, both of which are the exclusive prerogative of the Chief of Police under the Police Services Act, R.S.O. 1990, c. P.15 (“PSA”)?

Holding:

Appeal dismissed.

Reasoning:

The parties agreed that the standard of review to be applied to the arbitrator’s decision was reasonableness, even though the arbitrator was determining the jurisdiction question of the arbitrability of the grievance.

The Court of Appeal agreed with the Divisional Court that the arbitrator’s interpretation of the PSA and the Collective Agreement was unreasonable. It was her failure to apply the principles from past cases, as well as her unreasonable approach to the fundamental question at issue, that rendered the process by which she came to her decision flawed. Three aspects of the arbitrator’s analysis undermined and vitiated the cogency of her decision-making process and the acceptability of the result.

First, the arbitrator’s analysis was based on what was, in effect, a presumptive conclusion that the Chief of Police had the “exclusive authority” to make the twice-daily reporting order. As the arbitrator correctly acknowledged, her role was to determine whether the essential nature of the Order was a working condition, or an order concerning day-to-day operations or discipline. The Chief of Police’s “exclusive authority” to make the Order was crucial to the arbitrator’s analysis of the essential nature of the Order, and determined whether the reasonableness of the Order was arbitrable. Yet, the arbitrator’s reasoning on this essential question was conclusory. Her reasoning effectively predetermined the outcome and lacked the thorough analysis that was required to resolve the jurisdictional dispute.

Second, the arbitrator appeared to be comforted by the belief that her decision would not have the drastic consequence of precluding a reasonableness review of the Order. She stated, twice, that there was another forum where the issue could be adjudicated, that forum being in a discipline hearing following disobedience of the Order. With respect to the arbitrator, that suggestion was contrary to all the jurisprudence on this issue, which indicates that in a police discipline hearing, the only justiciable issues are whether the Order was lawfully made under the PSA and if so, whether it was disobeyed. Had the arbitrator recognized that there was no other forum for adjudicating the reasonableness of the Order, that recognition may well have influenced her analysis and her ultimate conclusion.

Third, the reasonableness of the outcome was weakened by the arbitrator’s failure to assess the effect of her decision on the police labour relations regime. By effectively broadening the scope of what are considered “day-to-day operations” over which the Chief of Police has exclusive authority and which are immune from arbitral oversight, the decision had the potential to upset the balance of the tripartite nature of the police labour relations regime that includes the Board, the Chief of Police and the Association, working under the PSA and the Collective Agreement, as it has been understood and functioned for many years.