Hello everyone.  Below are the summaries of this week’s Ontario Court of Appeal decisions. There were not very many decisions released this week.  Topics covered include the duty to defend in insurance law, real estate, bankruptcy and insolvency, unjust enrichment, medical negligence, landlord and tenant, and family law.

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

Keys v. Intact Insurance Company, 2015 ONCA 400

[Juriansz, Lauwers, Huscroft JJ.A.]

Counsel:

O. Bourns, for the appellants.

C. Reil, for the respondents.

Keywords: Insurance Law, Duty to Defend, Cross-Claims, Third Party Claims

Facts:

The appellants appeal a decision that the respondent insurance company did not have the duty to defend them in a defamation action arising out of a video posted on the internet. The question before the judge was whether there was a “mere possibility” that the appellants were acting in the course of their employment when they made the video and posted it on the internet. The judge erred in the facts, believing that there was no cross-claim or third party claim against the applicants, when in fact there were both. As a result of this error, the application judge ruled that the substance of the claim in no way implicated the appellants as employees, making the video in the course of their employment.

Issue:

Is there a mere possibility that the appellants were employed by CASA and acting in the course of their employment when they made the video?

Holding:

Appeal allowed.

Reasoning:

Yes.  All pleadings must be considered, with the most weight placed on pleadings against the potential insured, as the object of the exercise is to ascertain the “substance” and the “true nature” of the claims. This includes cross-claims and third party claims.

Nanne v. 3011650 Nova Scotia Limited (Michipicoten Forest Resources), 2015 ONCA 391

[Feldman, Benotto and Brown JJ.A.]

Counsel:

W. J. Earle and M. Furrow, for the appellant.

R. G. Doumani and P. Harrington, for the respondents.

B. A. Blumenthal, for the intervener Landlord and Tenant Board.

Keywords: Real Estate Law, Landlord and Tenant Law, Matthews v. Algoma Timberlakes Corp., Residential Tenancies Act, ss. 135(1) and ss. 38(1), The Planning Act, ss. 50(3), Rent Rebate

Facts: 

During the 1970s and 1980s, the Algoma Central Railway leased out a large number of one-acre cottage sites on property it owned north of Sault Ste. Marie. In 1997, the Railway sold the land to the appellant, 3011650 Nova Scotia Limited c.o.b. as Michipicoten Forest Resources (the “Landlord”). In 2005, the Landlord sold part of the land and cottage sites to Algoma Timberlakes Corp., retaining for itself a tract of land on which 435 cottage sites are located.

In its 2010 decision in Matthews v. Algoma Timberlakes Corp., the court held that the Residential Tenancies Act, 2006 (the “RTA”) applied to the cottage sites on the Timberlakes land.

The respondents are the tenants of three cottage sites located on the Landlord’s property. The respondents lease the cottage sites from the Landlord and they own the structures that they have built on the sites. The leases are each for a term of one year but renewable for 20 years. (The leased sites and the cottages built thereon collectively will be referred to as the “Cottages”.) In their Agreed Statement of Facts, the parties agreed that the Cottages on the Landlord’s property are similar to those located on the Timberlakes land considered by this court in Matthews.

In 2012, the respondents applied to the Landlord and Tenant Board for rent rebates subject to ss. 135(1) of the RTA.

Although the Landlord acknowledged that the Matthews decision applied to the respondents’ Cottages, it argued that the RTA could not apply to them without rendering those tenancies void. The Landlord based its argument on the subdivision control provisions of the Planning Act (the “PA”). Specifically, the Landlord contended that although the leases were at most 20 years in duration, the security of tenure provisions of the RTA would extend the tenancy agreements for the Cottages beyond 21 years, thereby contravening the subdivision control provisions of the PA, with the result that the tenancy agreements would not “create or convey any interest in land”: PA s. 50(21). In order to avoid that result, the Landlord submitted that the Board should find that the respondents’ Cottages were not subject to the RTA, but to the Commercial Tenancies Act, and dismiss their rent rebate applications.

The Board rejected the Landlord’s argument, holding that the respondents’ tenancies were subject to the RTA and, based on its interpretation of ss. 50(3) of the PA, their leases were not void under the PA. It ordered the Landlord to rebate to the respondents part of the rent they had paid for 2011 and 2012. The Divisional Court dismissed the Landlord’s appeal. Leave to appeal to this court was granted.

Issue:

Whether the rent control provisions of the RTA apply to the respondents’ cottages?

Holding:

Appeal dismissed.

Reasoning: 

In Matthews, this court held that the rent control provisions of the RTA applied to the land leases in question in that case. The parties agreed that the land leases in Matthews were similar to the land leases in the present case. The Board and the Divisional Court were bound by Matthews when determining the respondents’ applications for a rent rebate. The court is not in a position to overrule Matthews and hold that the respondents cannot rely on the rent control provisions of the RTA in respect of their Cottages.

Shantry v. Warbeck, 2015 ONCA 395

[Cronk, Pepall and Benotto JJ.A.]

Counsel:

P.Pape and J. Nairn, for the appellants.

M. Royce and D. Varah, for the respondents.

Keywords: Torts, Medical Malpractice, Wrongful Death, Standard of Care, Causation

Facts:

The appellants, the family of Mr. Miller, brought an action in negligence that alleged the respondent, a physician who attended to Mr. Miller, caused his death by ordering an excessive dose of Dilaudid (hydromorphone).  Mr. Miller arrived at a hospital emergency room with severe back pain.  Intravenous morphine throughout the night had little effect.  The next day, the nurse told the respondent that Mr. Miller had received 20 mg of morphine over a four-hour period.  Mr. Miller was clear-headed, but still in pain.  The respondent changed his medication to 5-10 mg of Dilaudid every four hours.  According to the appellants’ expert witness, Dilaudid is 3-8 times more potent than morphine.  By 3 am the following morning, Mr. Miller’s pain finally abated.  At 4:30 am, hospital staff found him not breathing.  He was pronounced dead less than 35 hours after he arrived at the hospital.

In the Medical Certificate of Death, the investigating coroner cited “mixed drug overdose” as the immediate cause of death. At least eight diagnostic or analytical reports were written regarding the cause of Mr. Miller’s death.  The trial judge determined that the dose was appropriate in the circumstances and that the respondent’s conduct did not fall below the standard of care.  The trial judge also rejected the coroner’s finding as to cause of death.

Issues:

  1. Did the trial judge err in addressing standard of care before causation?
  2. Did the trial judge err in his finding with respect to standard of care?
  3. Did the trial judge err in his finding with respect to causation?

Holding:

The appeal is dismissed.

Reasoning:

The trial judge did not err by addressing causation after the standard of care.  The requirements that must be met to establish negligence are sequential and separate.  The plaintiff must demonstrate a breach in the standard of care before causation.

The Court rejected the appellants’ argument that the trial judge had erroneously conflated “opioid tolerance” with analgesic effect, which impacts the standard of care analysis.  Read in its entirety, the trial judge’s reasons did not use the term with respect to its “strict definition”.  He recognized that a person cannot become opioid tolerant in the amount of time that Mr. Miller had received morphine.  However, he also accepted the respondent’s expert evidence that prior doses of morphine should inform the starting dose of Dilaudid.  All the medical witnesses agreed that the proper opioid dose is one which relieves pain.

The Court rejected the appellants’ argument that the trial judge had erred by not accepting the coroner’s conclusion regarding cause of death.  The appellants submitted that, because they put forth extensive evidence to support their theory and the respondent did not lead sufficient evidence to support an alternative, the trial judge was required to accept the appellants’ theory of causation, per the SCC decision in Ediger v. Johnston.  However, the Court stated that the decision in that case makes it clear that the drawing of inferences against a defendant is permissive, not mandatory.  The evidence in this case provided an adequate basis for the trial judge to conclude that the appellants had failed to prove causation on a balance of the probabilities.

The Court also rejected the appellants’ argument that the trial judge had made two factual errors with respect to causation. The trial judge incorrectly stated that Mr. Miller came into the hospital “after 2 days of acute pain.”  However, the respondent’s theory of causation – an unidentified condition, possibly a viral infection – was in no way dependent on a finding that he was in pain for days prior to his arrival at the hospital.  The trial judge also stated that Mr. Miller’s clinical presentation did not accord with death by overdose.  The appellants submitted that, by making his impugned comment, the trial judge ignored or forgot about the last dose of Dilaudid.  However, the trial judge’s statement was supported by the respondent’s expert witness, who rejected the suggestion that an adverse reaction to Dilaudid could have taken place after 3 am.

514052 Ontario Limited v 2000768 Ontario Inc., 2015 ONCA 401

[Juriansz, Lauwers and Huscroft JJ.A.]

Counsel:

B. Bowen, for the appellant.

No one appearing for the respondent.

Keywords: Endorsement, Real Estate Law, Unjust Enrichment, Juristic Reason

Facts:

The appellant developer was entitled to certain credits against development charges pursuant to a development agreement with a municipality.  The appellant did not develop the property, and sold the land and its entitlement to the credits to 2000768 Ontario Inc. (“2000768”).  The agreement of purchase and sale required 2000768 to pay the credits to the appellant, or if they did not develop the land, to obtain a similar covenant from the subsequent purchaser.

2000768 sold the land and its entitlement to Drew Future Developments (“Drew”), but did not include the covenant to pay the credits to the appellant.  Drew sold the property to the respondent, 2080323 Ontario Inc. (“2080323), also without a covenant to that effect.  The respondent developed the property and received credits amounting to $123,443.37 from the municipality.  The appellant claims the respondent’s receipt of the credits constituted unjust enrichment.  The trial judge dismissed the claim on the basis that there was a juristic reason for the enrichment.

Issue:

Whether 2080323’s receipt of the credits constituted unjust enrichment.

Holding:

Appeal dismissed, with no order as to costs.

Reasoning:

There was no unjust enrichment, although the Court found no unjust enrichment on a different basis than the trial judge. The Court of Appeal concluded that the respondent, having paid a premium in the expectation of future credits, could not be enriched by the eventual receipt of those credits.

Impact Tool & Mould Inc. (Re), 2015 ONCA 393

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

Counsel:

J. R. Fogarty and J. Dutrizac, for the appellant.

B. G. Blay, for the respondent BDO Dunwoody Limited.

N. M. Rouleau, for the respondent Kevin O’Brien.

Keywords: Endorsement, Bankruptcy and Insolvency, Interim Receiver, Trustee in Bankruptcy, Bankruptcy and Insolvency Act, s. 135, Disallowance of a Claim, Receiver’s Fees

Facts: 

The appellant Doyle Salewski Inc. (“DSI”) was appointed interim receiver of Impact Tool & Mould Inc. (“Impact”), pursuant to s. 47 of the Bankruptcy and Insolvency Act (“BIA”) and s. 101 of the Courts of Justice Act, by the order of Patterson J. dated March 7, 2003. The appointment order granted DSI a priority charge over Impact’s property for its fees and disbursements properly incurred in its role as interim receiver. The order stated that the charge was binding on all persons, including any trustee in bankruptcy of Impact. The order also provided that DSI “shall from time to time pass its accounts.” DSI has never been discharged as interim receiver.

DSI sold Impact’s assets – with court approval – to Impact’s two major shareholders. On May 20, 2003, DSI assigned Impact into bankruptcy at the request of Unique Tool & Gauge Ltd. (“Unique”), an unsecured judgment creditor of Impact. The respondent BDO Dunwoody Limited (“BDO”) was appointed trustee in bankruptcy. The respondent O’Brien, a representative of Unique, was appointed as an inspector of the estate. The fees of the trustee and inspector were paid by Unique.  There are currently no assets in Impact’s estate. However, DSI and the trustee have been embroiled in litigation since 2006.

DSI had previously filed a proof of claim for fees and disbursements with the trustee in 2003. The context was a demand for the payment of monies in Impact’s lawyer’s trust account which were paid to BDO post-bankruptcy. That proof of claim asserted a secured claim for $15,000 and referred to DSI’s charge against all property, assets and undertaking of Impact pursuant to the appointment order. BDO ultimately paid to DSI the funds it received from the lawyer’s trust account. In 2011, DSI filed an amended proof of claim with BDO for $457,040.29, which included a secured claim of $96,561.74 and an unsecured claim of $360,744.93. DSI again referred to its charge against all property, assets and undertaking of Impact pursuant to the appointment order, and claimed as security, funds due “to be returned by the Trustee and Inspector Kevin O’Brien in the total amount of $96,561.74.” The trustee disallowed DSI’s amended proof of claim on September 17, 2014, five days before the scheduled hearing of the motion to dismiss the s. 37 application. The reason for the disallowance was communicated to DSI as follows:

The debt claimed is not a debt or liability, present or future, to which the bankrupt was subject on May 20, 2003 or to which the bankrupt would become subject before the bankrupt’s discharge by reason of any obligation incurred before May 20, 2003 and is therefore not a provable claim in the bankruptcy.

DSI brought an application to appeal the disallowance to a Superior Court judge under s. 135(4) of the BIA.

Issue:

Should the interim receiver’s claim ought to have been disallowed?

Holding:

Appeal Dismissed.

Reasoning: 

An interim receiver is not entitled to bypass the procedural requirement of passing accounts by submitting its unliquidated and non-approved fees to a trustee in bankruptcy in the form of a proof of claim. An appeal from a trustee’s disallowance is not the proper forum in which to obtain court approval of such costs. The appointment order of Patterson J. explicitly required DSI to pass its accounts from time to time. There is nothing in the record that indicates why DSI should be permitted to omit this procedural step prior to asserting any claim. The trustee was therefore entitled to disallow DSI’s proof of claim.

Mahoney v. Sokoloff, 2015 ONCA 390

[Weiler, Cronk and Pepall JJ.A.]

Counsel:

B. D. Rumble, for the appellants.

M. R. Kestenberg, for the respondents.

Keywords: Endorsement, Torts, Personal Injury, Family Law Act Claims, Summary Judgment

Facts: 

The Appellants claimed damages under the Family Law Act for loss of care, guidance and companionship and for damages for the delay in applying for benefits for their injured family member under the catastrophic impairment designation.  The motion judge granted summary judgment because the appellants failed to put forward any evidence of losses or damages sustained. The appellants submit both were genuine issues requiring a trial.

Issues: 

Was this an appropriate case for summary judgment? Were the appellants required to lead evidence as to the damages they suffered under the Family Law Act and the damages as to the delay in application for catastrophic benefits?

Holding:

Appeal dismissed. Costs awarded to the respondents in the agreed amount of $7,500, inclusive of disbursements and taxes.

Reasoning: 

The action for damages due to the delayed application was settled with the injured family member, and the applicants did not demonstrate they suffered any damages as a result of the delay that were not fully compensated for in the settlement.  The appellants were also obliged in responding to the motion for summary judgment to lead some evidence of the foundation for their claim under the Family Law Act.  The motion judge did not err in concluding that there was no genuine issue for trial. 

Himel v. Molson, 2015 ONCA 405

[Juriansz, Lauwers and Huscroft JJ.A.]

Counsel:

C. Sinclair, for the appellant David Molson.

H. J. Ash, for the respondent Evelyn Himel.

Keywords: Endorsement, Civil Litigation, Standard of Proof, Balance of Probabilities, Damages, Punitive Damages, Courts of Justice Act, Costs, Substantial Indemnity

Cheung v. Shuen, 2015 ONCA 403

[Juriansz, Lauwers and Huscroft JJ.A.]

Counsel:

C. Shi, for the appellants (defendants).

S. Laubman, for respondents.

Keywords: Endorsement, Civil Procedure, Interlocutory Order, Striking Out Portions of Statement of Defence, Jurisdiction

Militky v. Drummon/North Elmsley (Township), 2015 ONCA 408

[Feldman, Hourigan and Benotto JJ.A.]

Counsel:

M. Polowin and R. Aburto, for the appellants.

J. Bradley, for the respondent.

Keywords: Endorsement, Municipal Law, Official Plan, s. 4.3.6(7), Public Park, Private Park

R. v. Farinacci, 2015 ONCA 392

[MacFarland, Tulloch and Pardu JJ.A]

Counsel:

F.Addario and R. McConchie, for the appellant Lucas Farinacci.

R. C. Bottomley and C. Sewrattan, for the appellant Len Farinacci.

Jr. M. Pistyner and L. Price, for the respondent.

Keywords: Criminal Law, Conspiracy, Hearsay, R v Mapara, Jury Exposure to Extrinsic Information, Appearance of Unfairness, Jury Charge

R. v. Vushaj, 2015 ONCA 388

[Laskin, MacFarland and Rouleau JJ.A.]

Counsel:

F. Miller, for the appellant.

M. Lai, for the respondent.

Keywords: Endorsement, Criminal Law, Perjury, PSA Hearing

R. v. Dimmick, 2015 ONCA 402

[Weiler, Tulloch and van Rensburg JJ.A.]

Counsel:

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

L. Cecchetto, for the respondent.

Keywords: Endorsement, Criminal Law, Sexual Assault, Credibility and Reliability of Witness Evidence, Conflicting Evidence, SOIRA order

R. v. Rawn, 2015 ONCA 396

[Watt, Pepall and Benotto JJ.A.]

Counsel:

J. Di Luca, for the appellant.

A. Alyea, for the respondent.

Keywords: Criminal Law, Criminal Code, s. 686(1)(b)(iii), Error Requiring Appellate Intervention, Alibi Evidence, Criminal Code, s. 258(3), Adverse Inference, Prior Criminal Record

R. v. L.O., 2015 ONCA 394

[Doherty, Cronk and Hourigan JJ.A.]

Counsel:

P. J.I. Alexander, for the appellant.

A. Hrybinsky, for the respondent.

Keywords: Criminal Law, Sexual Assault, Possession of Child Pornography, Prior Consistent Statements, Jury Instructions, Circumstantial Evidence, Motive, Ineffective Assistance of Counsel, R. v. Kienapple, Double Jeopardy, R. v. Summers, Credit For Pre-sentence Incarceration

R. v. P.L., 2015 ONCA 404

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

Counsel:

R. Sheppard, for the appellant.

A. Derwa, for the respondent.

Keywords: Endorsement, Criminal Law, Sexual Assault, Credibility Analysis