Hello everyone. Below are summaries of this week’s Ontario Court of Appeal decisions. Topics covered include Civil Procedure, Dismissal for Delay, Summary Judgment, Substantial Indemnity Costs, Contract Law, Fraudulent Conveyances, Derivative Actions versus Oppression, Real Estate Law, Condominium Law and Wills & Estates.  There was an interesting criminal law decision released this week in R v Delchev that applied the test for settlement privilege set out in the recent Supreme Court of Canada in Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37.  The decision may have application in non-criminal law settings and is a reminder that no privilege is absolute.

A special mention to Blaneys’ own Reeva Finkel for who successfully defended the validity of our client’s mortgage in Simcoe Vacant Land Condominium Corporation No. 272 v. Blue Shores Developments Ltd.  Well done!

Please feel free to share this blog with others. As always, we welcome your feedback.

Enjoy the weekend.

John Polyzogopoulos

Blaney McMurtry LLP jpolyzogopoulos@blaney.com Tel: 416.593.2953 http://www.blaney.com/lawyers/john-polyzogopoulos

Simcoe Vacant Land Condominium Corporation No. 272 v. Blue Shores Developments Ltd., 2015 ONCA 378

[MacFarland, LaForme and Lauwers JJ.A.]

Counsel:

J. H. Fine and B. J. Rutherford, for the appellants S. Schwartz, for the respondents, Blue Shores Developments Ltd. R. Finkel of Blaney McMurtry, for the respondent, Duca Financial Services Credit Union Ltd.

Keywords: Real Estate Law, Condominiums, Condominium Act,  ss. 109(3), 113 and 135, Land Titles Act, ss. 71 and 71(1.1), Oppression, Equitable Interest, Executory Contract, Priority of Registration

Facts:

The appellants are four condominium corporations. The respondent, Blue Shores Developments Ltd. (“Blue Shores”) developed its lakeside condominium project. The dispute centres on the ownership and operation of the Clubhouse at the condominium project. The disclosure statements that Blue Shores gave to purchasers of the condominium units provided for the conveyance of the Clubhouse to the appellants within 120 days after the date that Blue Shores was no longer registered owner of any lands within the project. Furthermore, the Easement and Cost Sharing Agreement (the “EACSA”) between the appellants and Blue Shores provides that so long as Blue Shores owned and operated the Clubhouse, each condominium unit owner was required to pay a monthly Clubhouse membership fee to the condominium corporation, which was remitted in aggregate to Blue Shores.

In November 2009, Blue Shores granted a mortgage to Duca Financial Services Credit United Ltd. (“Duca”) for $1 million, which mortgage was renewed in November, 2011.  In April 2012, after Blue Shores renewed its mortgage with Duca, the appellants registered a notice of an unregistered estate, right, interest or equity against title to the Clubhouse under s. 71 of the Land Titles Act.

The appellants applied for a declaration that they own the Clubhouse, and that the mortgage over it granted by Blue Shores to the respondent, Duca, is void or subordinate to their interests. The application judge dismissed their application.

Issues:

  1. Do the appellants have an equitable or inchoate interest in the Clubhouse?
  2. Did Blue Shores have the right to mortgage the Clubhouse to Duca?
  3. Is Duca’s mortgage subordinate to or void against the appellants’ interest in the Clubhouse?
  4. Are the appellants entitled to an order that Blue Shores take steps to convert the Clubhouse from a freehold interest to a unit within a condominium corporation?
  5. Is Blue Shores required to operate the Clubhouse on a non-profit basis and account to the appellants?
  6. Does the limitation period in s. 113 of the Condominium Act bar the appellants’ claim?
  7. Does Blue Shores’ conduct constitute oppression under s. 135 of the Condominium Act?

Holding:

Appeal dismissed with costs awarded to the respondents, Blue Shores and Duca.

Reasoning (MacFarland J.A. and LaForme J.A.):

(1) Do the appellants have an equitable or inchoate interest in the Clubhouse?

The majority affirmed the application judge’s decision that the disclosure statement was not an executory contract between the appellants and Blue Shores. The dissenting opinion relied on Peel Condominium Corp. No. 417 v. Tedley Homes Ltd.  for the proposition that condominium documents can be enforceable contracts that may give rise to obligations to convey property in the condominium context. However, the majority noted that in Tedley, Robins J.A. used the word “contract” in reference to a draft conveyance and purchase agreement that had been appended to the disclosure statement. Therefore, Tedley does not support the proposition that the disclosure statement could, in and of itself, constitute a contract between the developer and the condominium corporation. Moreover, in this case the disclosure statements expressly indicated that an interest in the Clubhouse was not being conveyed with the sale of each condominium unit.

Given that the disclosure statement did not constitute an executory contract, the appellants had no rights that were capable of registration under either s. 71(1) or (1.1) of the Land Titles Act

(2) Did Blue Shores have the right to mortgage the Clubhouse to Duca?

(3) Is Duca’s mortgage subordinate to or void against the appellants’ interest in the Clubhouse

The majority adopted the dissenting opinion. As owner of the property, Blue Shores was entitled to mortgage the property and there was no prohibition to it doing so in any of the condominium documentation.

(4) Are the appellants entitled to an order that Blue Shores take steps to convert the Clubhouse from a freehold interest to a unit within a condominium corporation?

In its factum, Blue Shores stated that it was prepared to consent to the conversion of the Clubhouse from freehold tenure to a condominium unit, although it pointed out it had no obligation to do so. The appellants may bring an application on consent to the Superior Court of Justice under s. 109 of the Act for the necessary order.

(5) Is Blue Shores required to operate the Clubhouse on a non-profit basis and account to the appellants?

The majority adopted the dissenting opinion.

(6) Does the limitation period in s. 113 of the Condominium Act bar the appellants’ claim?

The majority adopted the dissenting opinion.

(7) Did Blue Shores’ conduct constitute oppression?

The majority adopted the dissenting opinion.

Lauwers J.A. (dissenting in part)

(1) Do the appellants have an equitable or inchoate interest in the Clubhouse?

With respect to the conveyance of the Clubhouse, the essential terms of an agreement for purchase of land – the parties, the properties, the price and the date of conveyance – were all clearly set out in the conveyance obligation in the disclosure statements. No contractual element was missing. The conveyance obligation was a valid executory contract.

Therefore, the principles of contract law and real estate law operated to give the appellants an equitable interest in the Clubhouse. The corollary is that ss. 71 and 71(1.1) of the Land Titles Act permitted the appellants to register a notice of an unregistered interest in respect of the Clubhouse conveyance obligation.

(2) Did Blue Shores have the right to mortgage the Clubhouse to Duca?

A vendor may deal with the property as it sees fit, provided it can still comply with the terms of the conveyance obligation. The Duca mortgage did not prevent Blue Shores from conveying the Clubhouse in accordance with the disclosure statements. Hence, the mortgage was permissible notwithstanding the appellants’ equitable interest.

(3) Is Duca’s mortgage subordinate to or void against the appellants’ interest in the Clubhouse

The registration of a notice of an unregistered interest by a condominium corporation against property owned by the developer could interfere with the project’s financing. Whether the type of contractual subordination at issue is an available approach in the condominium area was not raised on the facts. The   ongoing tension between condominium corporations and developers is a matter for legislation.

(4) Are the appellants entitled to an order that Blue Shores take steps to convert the Clubhouse from a freehold interest to a unit within a condominium corporation?

Subsection 109(3) of the Condominium Act permits a judge of the Superior Court of Justice to make an order to amend the declaration or description registered under s. 2 of the Act. Blue Shores consented to the conversion of the Clubhouse from freehold tenure to a condominium unit. The court granted an order to amend the declarations and descriptions necessary to effect the conversion.

(5) Is Blue Shores required to operate the Clubhouse on a non-profit basis and account to the appellants?

Articles 5.00 and 6.00 that governed the ownership and use of the Clubhouse facilities substantiated the application judge’s view that Blue Shores retained ownership and control over the Clubhouse as “an essential amenity in the marketing of the project.” Blue Shores was not obligated to account to the appellants until it conveys the Clubhouse.

(6) Does the limitation period in s. 113 of the Condominium Act bar the appellants’ claim?

Subsection 113(3) of the Condominium Act permits a court to amend or terminate an agreement such as the EACSA if the disclosure statements did not provide sufficient disclosure, and the agreement “produces a result that is oppressive or unconscionably prejudicial” to the condominium corporation. Since the appellants did not meet the 12 month deadline for challenging the terms of the EACSA, as set out in s. 113 of the Condominium Act, the section had no application to the case.

(7) Did Blue Shores’ conduct constitute oppression?

Under s. 135 of the Condominium Act, a court can make an order to rectify conduct that “is or threatens to be oppressive or unfairly prejudicial to the applicant or unfairly disregards the interests of the applicant.” Oppression also captures conduct that is legal but unfair in the sense that it violates the reasonable expectations of a party. Blue Star had not done anything wrong in its use and operation of the Clubhouse; hence, it was not liable for oppression.

Jacob v. Playa El Agua Development Limited Partnership, 2015 ONCA 372

[MacPherson, Cronk and Gillese JJ.A.]

Counsel:

R. A. Maxwell, for the appellant J. B. Berkow and R. Das, for the respondents Morris, Rose Ledgett and Harvey Wortsman D. A. Brooker, for the respondents the Estate of John Church and Hwa Lee

Keywords: Endorsement, Civil Procedure, Dismissal for Delay, Inordinate Delay

Facts: 

The appellant Jose-Bernard Jacob appeals the Order of D. Wilson J. of the Superior Court of Justice dated November 19, 2014, dismissing this action against the four defendants. The action, which relates to a property transaction in Venezuela, was commenced by the appellant in 1998. By the autumn of 2014, it had still not come to trial. There is a long list of steps, missteps, inactivity and silence during the 16-year life of the action, the majority of which clearly rest at the feet of the appellant, as the motion judge found. The appellant also appeals the costs order made by the trial judge.

Issue: 

Should the action be dismissed for delay?

Holding:

The appeal is dismissed. The respondents are entitled to their costs of the appeal. Additionally, there is no basis for interfering with the costs order in the court below.

Reasoning: 

The well-established test is that an action should not be dismissed for delay unless: (1) the delay is intentional and contumelious; or (2) there is an inordinate, inexcusable delay, for which the plaintiff or his lawyer is responsible, which gives rise to a substantial risk that a fair trial might not now be possible: see Langenecker v. Sauvé, 2011 ONCA 803, at paras. 6-7.

It is the second branch of the test that is in issue on this appeal. There can be no question that the delay in this case was inordinate. The delay was as clearly inexcusable as it was inordinate. In Langenecker, Doherty J.A. said that “there can be no doubt that 15 years from the commencement of the action to the motion to dismiss constitutes inordinate delay.” Obviously, the same comment applies to a 16-year delay.

Midanik v. Powell, 2015 ONCA 375

[MacPherson, Cronk and Gillese JJ.A.]

Counsel:

W. C. McDowell, for the appellant J. Groia and M. Mendelzon, for the respondent Betsy Powell R. G. Dearden and A. Semenova, for the respondent John Wiley & Sons Canada Limited

Keywords:  Endorsement, Torts, Defamation, Summary Judgment, Reasonable and Fair Minded Reader, Rules of Civil Procedure, Rule 49, Costs, Substantial Indemnity

Facts: 

Midanik’s defamation action related to a book written by Powell and published by Wiley Co. The book was titled Bad Seeds – The True Story of Toronto’s Galloway Boys Street Gang. Midanik is introduced as defence counsel for an accused murderer and member of the gang. Powell wrote: “He also, by his own admission, was someone who didn’t work well with others. He said he identified with the character Tuco in director Sergio Leone’s 1966 Italian spaghetti western classic, The Good, the Bad and the Ugly. Midanik told me the loutish outlaw Tuco (the Ugly) said in the movie: “I like big men because when they fall, they fall hard.” Midanik was known for making noise.

Midanik decided to sue the respondents in defamation for this passage. In his Amended Statement of Claim, in paragraph 7 he claimed: “false and defamatory innuendo created by the defamatory words set out in paragraph 5, which taken in the context of the book as a whole, in their natural and ordinary meaning were meant and were understood to mean any or all of the following, which are defamatory of the plaintiff: (a) the plaintiff is a hardened criminal; (b) the plaintiff is a murderer; (c) the plaintiff is a rapist; (d) the plaintiff is a thief; (e) the plaintiff is ugly; (f) the plaintiff is immoral; (g) the plaintiff is violent; (h) the plaintiff is not a good lawyer; (i) the plaintiff is dishonest; (j) the plaintiff is a psychopath; and (k) the plaintiff is sleazy.”

Issues: 

(1) Did the motion judge err in his defamation analysis?

(2)Did the motion judge err by not considering the ‘true innuendo’ category of interpretation of allegedly defamatory statements?

(3) Should the motion judge have granted the plaintiff leave to amend his pleading rather than dismiss the action?

(4) Did the motion judge err by awarding substantial indemnity costs to both respondents for both the motion and the action?

Holding:

The appeal is allowed in part, but only to change the costs awards. In all other respects, the appeal is dismissed.

Reasoning:

(1)The words in dispute, when read as a whole and in context, are far removed from the meaning suggested by Midanik in para. 7 of his Statement of Claim. As the motion judge said: “The words complained of …are not capable of bearing those defamatory meanings.”

(2) The motion judge did not need to consider this category because Midanik’s counsel on the motion specifically disclaimed reliance on it, even employing a heading in his motion factum saying “The innuendos are false, not true.”

(3) This was a summary judgment motion, not a motion to strike pleadings. Moreover, at no time during the summary judgment proceeding did the appellant request leave to amend his Amended Statement of Claim to plead true innuendo and the extrinsic facts that would support the special meanings that he was a murderer, rapist, thief and the other extreme meanings pleaded in para. 7 of the Amended Statement of Claim

(4) The motion judge reasoned: “On the motion for summary judgment the defendants made Rule 49 offers. Costs on the substantial indemnity scale are warranted.” This passage reflects a misunderstanding of the Defendant’s Offer branch of Rule 49, which says nothing about substantial indemnity costs. Nor can the respondents bring themselves within the case law dealing with substantial indemnity costs for a successful defendant.

Thompson 28 Co. Ltd. v Buote, 2015 ONCA 375

[MacPherson, Cronk, Gillese JJ.A.]

Counsel:

J. D. Buote, acting in person J. Mesiano-Crookston, for the respondent

Keywords: Endorsement, Contract Law, Certainty of Essential Terms

Facts:

The appellant, Mr. Buote, an Ontario tax lawyer, and the respondent, Thompson 28 Co., a Manitoba corporation, had a lengthy solicitor-client relationship that eventually soured. On April 29, 2014, the parties signed a Memorandum of Settlement.

The appellant refused to comply with one term of the Memorandum relating to the date of transfer of shares in the respondent’s company. The respondent brought an application seeking a declaration that the Memorandum was binding and effective, and was successful before the applications judge.

Issues:

Is the Memorandum of Settlement a binding contract between the parties?

Holding:

Yes.

Reasoning:

The words of the Memorandum (a two page document) are straight-forward and easy to understand, especially for an experienced tax lawyer. It is not a long, complicated, ambiguous document and was sufficiently certain .

There is nothing to suggest that the application judge did not review and consider all relevant evidence, including affidavits, exhibits, and the behaviour and actions of the parties before and after the Memorandum was signed.

As the appellant, an experienced tax lawyer, did not object to the unambiguous terms of the Memorandum at its execution, he cannot contest them now.

Nguyen v Lee, 2015 ONCA 371

[MacPherson, Gillese and van Rensburg JJ.A.]

Counsel:

B. D. Nguyen, acting in person H. J. Doan, for the respondents

Keywords: Endorsement, Contract Law, Loan Agreement, Self-represented Litigant, Fraudulent Conveyance

Facts:

The appellant, Nguyen, and the respondent, Lee were parties to a loan agreement dated September 25, 2004. The loan was for a one year term from September 30, 2004, to September 30, 2005, and the agreement provided that “Lee can pay [Nguyen] anytime”. The loan was for $135,000. The loan consisted of $70,000 “from before”, which the evidence showed that Lee had borrowed over time from the appellant to fund his jewellery business. The further $65,000 was advanced in order to complete Lee’s purchase of the appellant’s property at 1276 Bloor Street West, in Toronto. The purchase closed in October 2004. Title to the property was taken in the name of the corporate respondent, 1634502 Ontario Inc., a company owned by Lee and his wife, the respondent Va Lay Duong.

The central issue at trial was whether and to what extent the loan had been repaid. The trial judge concluded $90,700 had been repaid and that damages and pre-judgment interest in the sum of $57,566 should be awarded to the appellant against the respondent Iwin Lee.

Issues:

(1)  Was the appellant, as a self-represented litigant, treated unfairly at trial?

(2)  Did the trial judge err in his findings with respect to the $23,200 payment?

(3)  Did the trial judge err in dismissing the fraudulent conveyance claims?

Holding:

The appeal is dismissed. The respondents are entitled to their costs of the appeal payable by the appellant. Costs are fixed at $1,000, inclusive of disbursements and applicable taxes.

Reasoning:

(1) No, the appellant was not treated unfairly at trial. The transcripts of the trial proceeding show that the trial judge treated all of the parties and witnesses with fairness, patience and respect. He provided appropriate guidance to the appellant as a self-represented litigant and accommodated the appellant on several occasions. Furthermore, at the end of the trial, the appellant expressed his appreciation to the judge for the fair manner in which the trial was conducted.

(2) No, the trial judge did not err in his findings with respect to the $23,000 payment. The trial judge heard evidence regarding the $23,000 payment and rejected the appellant’s theory. The trial judge’s decision to consider the $23,000 payment towards the loan was amply supported by the evidence that he did accept.

(3) No, the evidence shows no basis for interfering with the trial judge’s conclusion respecting the fraudulent conveyance claims.

Rea v Wildeboer, 2015 ONCA 373

[Weiler, Sharpe and Blair JJ.A.]

Counsel:

J. C. Millard and H. V. A. Cunliffe for the appellants D. H. Jack and C. Raphael for the respondents

Keywords: Corporate Law, Public Companies, Oppression Remedy, Derivative Action, Business Corporations Act, s. 248, Fraud

Facts: 

The appellants brought an oppression claim alleging a breach of fiduciary duties owed to Martinrea International Inc. (“Martinrea”) and misappropriation of funds.  Martinrea is a widely-held public company that manufactures auto parts.  The Defendants include directors and an executive of Martinrea, as well as others claimed to have assisted  them in their alleged wrongdoing, such as facilitating the sale of equipment at well over market value in exchange for kickbacks.  The respondents argue the claim must be pursued as a derivative action on behalf of the corporation, with leave of the court.

The motion judge agreed with the respondents and struck the oppression claim against them.

Issues: 

Can a complainant assert, by way of an oppression remedy proceeding, a claim that is by nature a derivative action for a wrong done solely to the corporation, thereby circumventing the requirement to obtain leave to commence a derivative action?

Holding:

Appeal dismissed with costs to the respondents fixed at $20,000.00.

Reasoning: 

Claims must be pursued by way of a derivative action after obtaining leave of the court where, as here, the claim asserted seeks to recover solely for wrongs done to a public corporation, the thrust of relief sought is solely for the benefit of the corporation, and there is no allegation that the complainant’s individualized personal interests have been affected by the wrongful conduct.

The oppression remedy is not available simply because a complainant asserts a “reasonable expectation” which has been violated by conduct falling within the terms “oppression,” unfair prejudice” or “unfair disregard.”  The impugned conduct must be “oppressive” of or “unfairly prejudicial” to, or “unfairly disregard” the interests of the complainant. Here, there is no particularized allegation of any wrong done to the interests of the plaintiffs themselves as opposed to a wrong affecting the “corporate body.” Furthermore, this case can be distinguished from Malata Group (HK) Ltd. v. Jung, 2008 ONCA 111, 89 O.R. (3d) 36 which held a different result, because Martinrea is a large, widely-held public corporation and no type of personal wrong is evident here.

CIBC Mortgages Inc. v. Mostafavi, 2015 ONCA 363

[Weiler, Epstein and Brown JJ.A.]

Counsel:

P. Di Monte, for the appellant D. Waldman, for the respondent

Keywords: Real Estate Law, Mortgages, Assumption Agreement, Summary Judgment

Facts: 

In March 2007, the registered owner of the property was Sayed Shahram Mostafavi. On March 2, 2007, Mostafavi granted a mortgage in favor of the CIBC on the property.  The Mortgage was for a principal amount of $588,147.06, at an interest rate of 5% per annum and had a five-year term.  It was registered against title on March 5, 2007. On July 12, 2007, a transfer of the property from Mostafavi to Gil was registered against title. The transfer disclosed a nominal consideration of $2.00, but it had been made pursuant to a May 1, 2007, agreement of purchase and sale entered into between Gil and Mostafavi for a purchase price of $502,000. As part of that transaction, Gil executed a mortgage assumption agreement in favor of the CIBC dated June 1, 2007. In October, 2007, CIBC commenced this action against Mostafavi and Gil seeking possession of the property and payment from them of the amounts due under the Mortgage based upon a principal amount of $587,623.44.

In his statement of defence and counterclaim, Gil took the position that he had only assumed a principal debt of $502,000 under the Mortgage and, in his counterclaim, he sought a declaration that his liability under the Mortgage was limited to that amount. In his counterclaim, Gil also sought a declaration that any indebtedness under the Mortgage in excess of $502,000 had been released by the conduct of the defendants by counterclaim, the CIBC and the lawyer who had acted on the transfer and mortgage assumption transaction, Jacob O. Edeniyere.

In January 2008, CIBC gave Gil notice of sale under the Mortgage.  In 2009, CIBC brought a motion for partial summary judgment. That motion ultimately was dealt by the July 28, 2010 order of M.G.J. Quigley J. (the “2010 Order”) under which Gil was required to pay the CIBC a sum of money. Gil appealed that order to this court. In March 2011, the parties ultimately agreed to set aside the 2010 Order on the basis that Gil would pay to the CIBC the amount of $113,825.87, which he did on March 25, 2011. Gil made no further payments under the Mortgage. In July 2012, the CIBC brought a further motion for summary judgment against Gil seeking payment of all amounts due under the Mortgage, together with possession of the property. The motion judge granted the summary judgment requested.  Gil appealed.

Issues: 

(1) Did the motion judge err in finding that no genuine issue requiring a trial existed as to whether Gil assumed the full principal amount of $587,623.44, or the lesser amount of $502,000?

(2) Did the motion judge fail to properly treat two payments Gil had made under the Mortgage, specifically a cheque in the amount of $15,336.03 the CIBC had received from him on November 8, 2007, as well as the amount of $113,825.87 Gil had paid to the CIBC’s lawyers by cheque dated March 25, 2011?

Holding:

Appeal dismissed.

Reasoning: 

(1) No. First, there was no evidence that Edeniyere had made any misrepresentation to Gil about the terms of the assumed Mortgage. Nor was there any evidence from Gil that Edeniyere had remained silent in the face of Gil’s description of his purported incorrect understanding of the terms of the assumed Mortgage. Indeed, Gil’s own evidence was that he never met personally with Edeniyere and he never had anything explained to him by a lawyer. Second, although in resisting liability for the principal amount of $587,623.44 Gil relied heavily on his assertion that his deal with Mostafavi only required him to assume a mortgage in the amount of $502,000 at an annual rate of interest of 2.2%, Gil provided no explanation about how the agreement of purchase and sale changed from one in which Gil would arrange a new first mortgage for the property into one under which Gil assumed the Mortgage. Moreover, Gil adduced no evidence that either the CIBC or Edeniyere had been involved in his decision to make that change in his purchase transaction with Mostafavi.

(2) No. The judge accepted the evidence of Lanning Abramson, a lawyer acting for the CIBC, that the payment of $15,336.03 was insufficient to bring the mortgage into good standing. In light of that evidence, the motion judge did not commit any palpable and overriding error of fact when he concluded that Gil’s November 2007 payment was insufficient to bring the Mortgage into good standing.

As to the payment of $113,825.87, from the record it was clear that the March 25, 2011 payment by Gil originated in the 2010 Order when the judge granted partial summary judgment. His appeal was dismissed for failure to perfect it in time. By order dated March 3, 2011, Simmons J.A. set aside the registrar’s dismissal of the appeal, set a timetable for the perfection of the appeal, and ordered Gil to pay counsel for the CIBC the amounts ordered by Quigley J.

Andrina McMillan, a Risk Manager at the CIBC, deposed on the summary judgment motion that the parties had agreed to set aside the 2010 Order on the basis that the $113,825.87 paid by Gil would be applied to reduce the Mortgage debt in accordance with the terms of the Mortgage, and not as directed in the 2010 Order. She deposed that, as a result of that agreement, only $3,187.39 of the amount Gil paid went to reduce the principal owing under the Mortgage, with the rest applied against accumulated interest, legal fees and property tax arrears. The evidence therefore supported the finding that the CIBC’s application of the $113,825.87 did not bring the Mortgage into good standing.

Foley (Re), 2015 ONCA 382

[Doherty, Juriansz and Huscroft JJ.A.]

Counsel:

G. M. Sidlofsky and B. Donovan, for the appellant B. L. Evans, for the respondent

Keywords: Property Law, Wills & Estates, Presumption of Resulting Trust, Presumption of Undue Influence, Power of Attorney

Facts:

The appellant sought to set aside two money transfers and a bequest of Canada Savings Bonds that his father made to his sister, the respondent, Dorothy McIntyre. McIntyre held the father’s power of attorney for property during the final years of his life. The trial judge held that the father was not unduly influenced, and that the gifts and bequest were valid.

The appellant claimed that the trial judge erred in finding that the presumptions of resulting trust and undue influence were rebutted. The appellant challenged the respondent’s entitlement to the proceeds of the Canada Savings Bonds, and submitted that the trial judge erred in finding that the testamentary gift did not adeem when the father deposited his Canada Savings Bonds into a joint account.

Issues:

Whether the trial judge erred in finding that the gifts were valid.

Holding:

Appeal dismissed. The gifts were valid.

Reasoning: 

(1) Written instructions from the father validated the November 10th and November 14th 1997 transfers. The November 10th 1997 gift conformed to the intention in the father’s will to gift to his daughter bonds registered in his name only at the time of his death. Testimony from the father’s independent financial advisor corroborated the gifts. There was no suspicious change in the father’s investment choices suggesting undue influence.

(2) The November 2, 1994/November 4, 1997 transfer was also upheld. Expert testimony suggested that the bank acted to correct an error, and it was open to the trial judge to accept this testimony. Moreover, the 1994 gift was made at a time when the father was his least vulnerable. It was reasonable to conclude the father understood the nature of the transaction and was not subject to undue influence.

(3) The court rejected the appellant’s challenge to the trial judge’s finding that the presumption of resulting trust in the context of the gift of the Canada Savings bonds was not rebutted. The father never endorsed the bonds. Without his endorsement, the bonds could not become negotiable instruments. The bank could not become the registered holder. There was no basis for interfering with the trial judge’s finding that the presumption of resulting trust was not rebutted. At the time of Mr. Foley’s death, the bonds had not matured. Since they remained registered “in his name only,” they would have passed to the respondent pursuant to the father’s will. The trial judge’s decision to treat the Canada Savings Bonds in the Joint Account as a bequest to the respondent was upheld.

Najjar v Brombow Developments Limited, 2015 ONCA 383

[Juriansz, MacFarland, and Lauwers JJ.A.]

L. Najjar, acting in person J. Norton and D. Byskal, for the respondent, The Municipality of Chatham-Kent A. Patton, for the respondent, Brombow Developments Limited

Keywords: Municipal Law, Ontario Municipal Board Act, Ontario Municipal Board, Expert Tribunal, Settlement Agreement, Enforcement

Facts:

The dispute concerns a woodlot in Chatham-Kent that is bisected into north and south halves by a drainage ditch. Brombow owns land on either side of the drainage ditch but refuses to give the Municipality construction access. The appellant, which is not the Municipality, asserts that in refusing access, Brombow is breaching specific language in a Settlement Agreement under which it “agrees to cooperate with Chatham-Kent and a chosen service club or community agency which may wish to establish Open Space/Trail Way linkages prior to development of the balance of the Brombow lands.” The appellant brought a motion under s. 86 of the Ontario Municipal Board Act (OMBA)  to enforce the terms of the Settlement Agreement.

The appellant concedes that he is not a party to the contract between the Municipality and Brombow and therefore cannot enforce it. However, he argues that he is seeking to enforce the memorandum of the oral decision of the Ontario Municipal Board (OMB) dated November 19 2010, and that he has status to do so because he was a party to the hearing. The appellant asked the court to reverse the motion judge’s dismissal.

Issues:

(1) Can the appellant enforce the terms of the Settlement Agreement?

Holding:

No. Appeal dismissed.

Reasoning:

The Legislature has chosen to confer responsibility for approvals in land use planning on the OMB, an expert tribunal. For three reasons, the court should be reluctant to issue an enforcement order.

(1) The OMBA sets out alternative routes and gives the OMB additional responsibility for selecting the method of enforcing decisions.

(2) The court should be reluctant to interpret the expression of cooperation in the Settlement Agreement.

(3) The court should be reluctant make conclusions about what the OMB would conclude or the common practices of the OMB in situations of conflict or ambiguity, as these may be entirely different than the court’s interpretation.

The appellant ought to have moved before the OMB before seeking an order of the Superior Court.

Criminal Decisions

R. v. Delchev, 2015 ONCA 381

[Simmons, Rouleau and Tulloch JJ.A.]

Counsel:

J. Presser and A. Menchynski, for the appellant S. Magotiaux, for the respondent

Keywords: Criminal Law, Abuse of Process, Settlement Privilege, Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37, Natural Justice, Rules of Professional Conduct, limited scope retainers and second opinions, s. 7.2-6

Facts:

The appellant was charged with twenty-three drug and weapons related offences following a police search of two residences.

After jury selection, the Crown and the applicant had a resolution discussion. During this resolution discussion, the applicant alleges the Crown indicated that if the appellant was to provide an induced statement in which he would admit that his evidence up to that point in the proceeding regarding duress was false, and that his counsel knew it to be false, the Crown would recommend a conditional sentence to the Crown Attorney for Scarborough as the Crown position on sentence upon the appellant’s plea of guilty to certain charges. The applicant also alleges that the Crown advised the appellant’s father that the resolution would save a lot of time and money and that the appellant should get independent legal advice regarding the offer. Additionally, the applicant alleges that the Crown advised the appellant to get independent legal advice regarding the settlement offer.

The applicant made an abuse of process application to stay the charges against him on the basis that the offer to settle the charges made by the trial Crown was inappropriate and constituted an abuse of process. In responding to the application, the Crown asserted privilege with respect to the content of the settlement discussion.

The trial judge concluded that the settlement discussion between the appellant, his counsel and the Crown was subject to settlement privilege. She determined the Crown did not waive privilege simply because the discussion was conducted in the presence of the appellant’s father. The trial judge held that no exception to settlement privilege applied in this case. She held there was no evidence that Crown counsel was threatening the appellant or suggesting he should do something unlawful. She dismissed the application for a stay of proceedings due to an abuse of process.

The appellant proceeded to trial before a jury. The jury found the appellant guilty on sixteen counts.  The accused appealed his convictions.

Issues:

(1) Did the trial judge err in finding that the evidence of the settlement discussion was subject to settlement privilege and therefore inadmissible on the application?

(2) Did the trial judge err in failing to find that the trial Crown’s conduct was grossly improper such as to constitute an abuse of process warranting a stay of proceedings?

(3) Did the trial judge deny natural justice to the appellant by considering the propriety of the Crown’s conduct without giving the appellant an opportunity to make oral submissions on the issue?

Holding:

Appeal allowed and new trial ordered.

The settlement discussion could be admitted as an exception to settlement privilege.

Reasoning:

(1) Yes, while the evidence of the settlement discussion is subject to settlement privilege, the evidence of the discussion should have been admitted for the purpose of the appellant’s abuse of process application.

Though the Crown’s offer was unusual, settlement does not have to be the only purpose of a settlement negotiation in order for privilege to apply. The Crown’s discussion met all the conditions required by Sable Offshore Energy Inc. v. Ameron International Corp., 2013 SCC 37 to be considered prima facie protected by settlement privilege.

However, the circumstances of the discussion and the content of the offer is admissible as an exception to settlement privilege. Exceptions to settlement privilege will be found when the justice of the case requires it. Since the appellant was not attempting to adduce the Crown’s settlement offer as evidence that the Crown had a weak case, an exception to settlement privilege would do little to detract from the “public interest in encouraging settlement”. Additionally, an allegation of prosecutorial misconduct constitutes a “competing public interest” that outweighs the public interest in promoting settlement in the circumstances of this case.

Furthermore, “extrinsic evidence” of prosecutorial misconduct is not required in order to establish an exception to settlement privilege.

(2) Yes. While the trial judge correctly stated that the appellant must overcome an evidentiary burden before the court will look behind the exercise of prosecutorial discretion, the trial judge erred in concluding that extrinsic evidence is required in order to meet that burden. In this case, the evidentiary threshold for an inquiry into prosecutorial discretion was met on the allegations to which the Crown was prepared to respond.

In most cases, the exercise of prosecutorial discretion is not subject to review by the courts. Prosecutorial discretion is reviewable, however, for abuse of process, which must be established by the accused on a balance of probabilities. An accused must meet a threshold evidentiary burden before the court will embark on an inquiry into the reasons behind the exercise of discretion. Once an accused has established this evidentiary foundation, “the Crown may be required to provide reasons justifying its decision”.

While it is clear from Nixon that a “bare allegation” on its own will not meet the requisite threshold, it does not follow that an accused must produce extrinsic evidence in order to meet the burden. A requirement for extrinsic evidence would be irreconcilable with the Supreme Court’s conclusion in Nixon that repudiation of a plea agreement in and of itself is not a bare allegation and meets the evidentiary burden. The impugned act of prosecutorial discretion may be sufficient on its own to meet the threshold burden.

This case fits in the second avenue set out by the Supreme Court in Nixon and Anderson for an accused to meet the threshold, namely where a discretionary decision is so rare and exceptional in nature that it demands an explanation. The court inferred from Nixon that a Crown discretionary decision may qualify as a rare and exceptional event when the decision itself raises the court’s concern about the Crown’s exercise of discretion. As such, the appellant meets the threshold evidentiary burden on the basis that the offer here was a “rare and exceptional event”. The offer itself and the circumstances in which it was made are sufficient to raise the court’s concern about the Crown’s exercise of discretion.

Additionally, the Crown’s offer had the potential to undermine the appellant’s relationship with his counsel in three ways: first, the offer itself created a potential conflict of interest between the appellant and his counsel because it required the appellant to make a statement implicating his counsel in suborning perjury; second, the offer was contingent on the approval of the trial Crown’s supervisor; and third, it appears the Crown attempted to resolve the matter directly with the appellant, although he was represented by counsel.

Specifically, the trial Crown’s conduct in making the offer appears to tread close to the ethical line drawn by s. 7.2-6 of the Rules of Professional Conduct. While the appellant’s trial counsel were present at this resolution discussion, the trial Crown’s conduct appears to tread close to the line in two respects: it seems the offer was not made to the appellant’s counsel, but rather to the appellant himself, and the trial Crown appears to have advocated for the offer directly with the appellant’s father. The concern that the trial Crown might be viewed as having negotiated directly with the appellant contributes to my conclusion that the offer was a rare and exceptional event.

In light of the importance of protecting the relationship between an accused and defence counsel, and the problems inherent in the offer in this case, the appellant has met his threshold evidentiary burden.

(3) It was not necessary to address the appellant’s argument that he was denied natural justice, since the appeal was allowed on the second ground.

R v Siddiqi, 2015 ONCA 347

[Hoy A.C.J.O., Doherty and Benotto JJ.A]

Counsel:

M. Henein and C. Mainville, for the appellant

N. Devlin and Y. Pressman, for the respondent

Keywords: Endorsement, Criminal Law, False Statements, Canada Small Business Financing Act, ss. 16(1)(a), Evidence, Sentencing, Deference

R. v. J.C., 2015 ONCA 370

[Simmons, Tulloch and Huscroft JJ.A.]

Counsel:

M. Thomas, for the appellant

G. Skerkowski, for the respondent

Keywords: Criminal Law, Aggravated Sexual Assault, Criminal Code, s. 276, Cross-Examination, Evidence

R v. Rhayel, 2015 ONCA 377

[Strathy C.J.O., Watt and Epstein JJ.A]

Counsel:

A. D. Gold and M. J. Webb, for the appellant J. K. Stuart, for the respondent

Keywords: Criminal Law, Criminal Code, ss. 715(1) and ss. 686(1)(a)(iii), Evidence, Evidence Previously Taken, Videotaped Statements, Hearsay, Necessity, Credibility, Prior Consistent Statements

Canada (Attorney General) v. Lewis, 2015 ONCA 379

[Simmons, Juriansz and van Rensburg JJ.A.]

Counsel:

M. Sims and J. Kapches, for the appellant B. A. Callender, for the respondents

Keywords: Criminal Law, Sentencing, Trafficking, Abolition of Early Parole Act, ss. 10(1), Corrections and Conditional Release Act, Accelerated Parole Review, The Canadian Charter of Rights and Freedoms, ss. 1 and 11(i)

Frost v. Canada (Attorney General), 2015 ONCA 386

[Simmons, Juriansz and van Rensburg JJ.A.]

Counsel:

B. A. Callender, for the appellant M. Sims and J. Kapches, for the respondent

Keywords: Criminal Law, Sentencing, Trafficking, Abolition of Early Parole Act, ss. 10(1), Corrections and Conditional Release Act, Accelerated Parole Review, The Canadian Charter of Rights and Freedoms, s. 11(i)

Lapple v. Canada (Attorney General), 2015 ONCA 385

[Simmons, Juriansz and van Rensburg JJ.A.]

Counsel:

V. Rondinelli, duty counsel for the appellant M. Sims and J. Kapches, for the respondent

Keywords: Criminal Law, Sentencing, Trafficking, Possession, Abolition of Early Parole Act, ss. 10(1), Corrections and Conditional Release Act, Accelerated Parole Review, The Canadian Charter of Rights and Freedoms, s. 11(i)

R. v. Windibank, 2015 ONCA 387

[Laskin, MacFarland and Rouleau JJ.A.]

Counsel:

L. Csele, for the appellant F. Miller, for the respondents

Keywords: Endorsement, Criminal Law, Search Warrant, Possession, The Canadian Charter of Rights and Freedoms, ss.24(2)

R. v. Jaques, 2015 ONCA 380

[Lauwers J.A. (In Chambers)]

Counsel:

K. Jaques, acting in person K. Manning, amicus for the moving party J. Speyer, for the responding party

Keywords: Endorsement, Criminal Law, Driving with a Suspended Licence, Compulsory Automobile Insurance Act, Provincial Offences Act