Hello everyone. It was a quiet week for the Court of Appeal. Topics covered in this week’s civil decisions (non-criminal) include: detention order reviews; determining whether orders are interlocutory or final; whether a motion for leave to appeal should be reopened; whether a court’s dismissal of a counterclaim on summary judgment was justified; limitation periods in the context of negligent investigation; and of course costs decisions.
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[Watt, Pepall and Huscroft JJ.A.]
Breese Davies and Owen Goddard, for the appellant
Maura Jetté, for the Ministry of the Attorney General
Michele Warner, for the Centre for Addiction and Mental Health (“CAMH”)
Keywords: Administrative Law, Ontario Review Board, Detention Order
Facts: On February 3, 2010, the appellant was found not criminally responsible on a count of threatening death or bodily harm (involving his mother) and three counts of assault. The appellant appeals from a disposition of the Ontario Review Board which ordered that he be detained at the General Forensic Unit of CAMH with a condition that he be allowed to live in the community in accommodation approved by CAMH.
The Board found that the appellant continued to represent a significant threat to the safety of the public. The Board heard and considered evidence relating to a conditional discharge including the recommendation of the appellant’s treatment team that he needed close structure and supervision and that he was not ready for a conditional discharge; the hospital had to be able to approve his accommodation. The treatment team considered having the appellant live with his mother but rejected this alternative as lacking viability.
The appellant submits that the Board failed to apply the proper test when it ordered that he continue to be detained at CAMH. He focused on the Board’s statement that returning to live with his mother was not the “safest first step” for the appellant. He submits that the Board recognized that he was ready for discharge and it should have ordered a conditional discharge.
The Board concluded that a detention order was necessary to approve housing for the appellant.
Issue(s): Did the Board err by failing to consider the appropriateness of a conditional discharge and by imposing a detention order?
Held: No. Appeal dismissed.
Reasoning: The Court of Appeal concluded that the Board’s decision revealed no legal errors and was reasonable given the evidence the Board had before it.
The Board considered the relevant criteria including the appellant’s liberty interest and made the least onerous and restrictive disposition. It left the appellant’s current privileges and supervisory terms in place and added a term allowing the appellant overnight passes into the community for up to seven days at a time, in order to facilitate greater community access.
[Laskin, Rouleau and Huscroft JJ.A.]
L. Caylor and N. J. Shaheen, for the moving parties Dynasty Furniture Manufacturing Ltd. et al.
G. R. Hall and J. Sirivar, for the respondent the Toronto-Dominion Bank
Keywords: Civil Procedure, Appellate Jurisdiction, Interlocutory Order, Final Order, Order for Leave to Amend Pleadings
Dynasty Furniture Manufacturing Ltd. (“Dynasty”) sued Toronto-Dominion Bank (“TD”) in negligence, alleging that TD had actual and constructive knowledge of fraudulent dealings by a third party that caused Dynasty to lose roughly $17 million.
In 2010, portions of Dynasty’s statement of claim alleging constructive knowledge were struck on the basis that the circumstances of the case were not capable of establishing a relationship of sufficient proximity to found a duty of care. This order was upheld on appeal.
In 2014, Dynasty successfully moved before Justice Penny to amend its statement of claim to reintroduce allegations grounded in constructive knowledge. (The “Penny Order”) Justice Penny concluded that the amended pleading particularized the allegation based on information that was neither known nor reasonably knowable in 2009/2010. He noted that the previous order left open the possibility that a duty could be owed to a non-customer, but that sufficient facts had not been pleaded to establish the basis for the duty.
Dynasty brings a motion to quash TD’s appeal on the basis that the Penny Order is interlocutory, and therefore, the appeal lies to the Divisional Court. TD argues that the Penny Order is final because it deprives TD of its defence to the part of the action based on constructive knowledge.
Issue: Is the Penny Order interlocutory or final?
Holding: Appeal quashed.
Decisions permitting amendments to pleadings are normally understood to be interlocutory in nature.
As this court noted recently in Waldman v. Thomson Reuters Canada Ltd., 2015 ONCA 53, the issue is not whether the matter has been disposed of finally by an order but, instead, whether an order brings an end to an action or resolves a substantive claim or defence. It remains open to TD to advance a substantive defence to the argument that a duty to a non-customer can be created based on constructive knowledge and that constructive knowledge can be made out on the facts of this case. Thus, the Penny Order is interlocutory in nature and it follows that the appeal lies to the Divisional Court.
[Epstein, Lauwers and Pardu JJ.A.]
R. Leigh Youd and Adam J. Wygodny, for the moving parties
John J. Longo and Martin J. Henderson, for the responding party
Keywords: Costs, Motion for Rehearing
For the reasons reported at 2014 ONCA 573, the Court of Appeal allowed the appeal by First Elgin Mills Developments Inc., with respect to the costs of the appeal, and reversed the costs award in the court below. The respondent in the appeal, Romandale Farms Limited, moved for a rehearing. The motion was dismissed for reasons reported at 2015 ONCA 54.
As the successful respondent to the rehearing motion, First Elgin Mills Developments Inc. sought costs on a partial indemnity basis, in the amount of $13,094, all inclusive. It submitted that a motion for a rehearing was improper and unnecessary.
The moving parties argued that no costs should be awarded due to the particular circumstances of the motion for a rehearing. They submitted that the motion raised a novel issue that resulted in clarification of the law, by way of the Court of Appeal’s adoption of the rehearing criteria set out in Doman Forest Products Ltd. v. G.M.A.C. Commercial Credit Corp., 2005 B.C.C.A. 111. The moving parties also submitted that the quantum of costs requested by the responding party was disproportionate given that it exceeded the $10,000 in costs awarded on the appeal. In the alternative to an order refusing costs, the moving parties suggested that the costs award on the rehearing motion should be no more than $3,900, on a partial indemnity basis.
Issues: Whether costs should be awarded and, if so, their amount.
Decision: Appeal allowed, in part
The Court held that costs should follow the event, and that a modest award was due in the circumstances. It fixed costs at $4,000, all inclusive.
[MacFarland, Tulloch and Pardu JJ.A.]
A. Szigeti, for Giang Ly
G. S. MacKenzie, for CAMH
S. Porter, for the respondent Crown
Keywords: Administrative law, Conditional discharge, Detention order
Facts: The appellant was found not criminally responsible on account of mental disorder on charges of break and enter with intent to commit an indictable offence and arson. At the time of his hearing before the Review Board (the “Board”), the appellant was subject to a disposition detaining him at the General Forensic Unit of the Centre for Addiction and Mental Health (“CAMH”). The appellant did not seek an absolute discharge. The only issue before the Board was whether the least onerous, least restrictive disposition was a conditional discharge or a continuation of the current detention order. The Board concluded that in all the circumstances, a detention order was the least onerous and restrictive disposition to manage the risk posed by the appellant. The appellant submits the Board erred in law by failing to properly consider if he could be discharged conditionally.
Issue: Did the Board make an error in law by failing to meaningfully consider if the appellant could be conditionally discharged?
Holding: Appeal dismissed.
Reasoning: No. Pursuant to R v. Runnalls, 2009 ONCA 504, the requirement for an appellant to reside in approved, supervised community housing means that a conditional discharge is not an appropriate disposition. Currently, there are staff on site 24/7 to monitor the residents. Without the support of the CAMH, the appellant would likely disappear, resulting in serious consequences. As it has been in the past, it is crucial for the appellant be able to get to the hospital quickly where the necessary steps can be taken to stabilize him.
[Juriansz, Epstein and Pepall JJ.A]
M.L. Solmon, for the moving parties, the lenders
L. Taylor Sr., L. Taylor Jr., C. Taylor, 1248136 Ontario Limited, and J. Taylor, acting in person
M. Britton and J. Feasby, for the respondent, the Ontario Securities Commission
Keywords: Motion to Reopen, Leave to Appeal, Ontario Securities Commission, Disgorgement
In a motion for leave to appeal, the appellants sought to appeal the Divisional Court’s dismissal of their appeal from findings made against them by the Ontario Securities Commission (“OSC”). The OSC found that the appellants traded in securities without the proper registration and ordered disgorgement of profits. The matter was dismissed on April 16, 2014.
The lenders move to reopen the motion for leave to appeal. The lenders were not provided with notice of the appellants’ motion for leave to appeal, and they brought a motion to reopen that motion for leave on the basis that they have a right to be heard on the appropriateness of the disgorgement remedy granted by the OSC.
(1) Should the motion for leave to appeal be reopened?
Appeal dismissed, costs in favour of the OSC.
(1) No, the court found that the lenders were not “affected” by the order dismissing the appellants’ motion for leave as required by rule 27.14. The order did not create a right or obligation on their part. The court held that the issues the lenders sought to raise would not be relevant on the appellants’ motion for leave. Additionally, even if the lenders were not formally served with notice, they were aware of the proceedings. They did not seek to participate before the Divisional Court, and there was doubt they would have standing before the OSC.
[Laskin, Rouleau and Huscroft JJ.A.]
P. Kennedy, for the appellants
G. Gligoric, for the respondent
Keywords: Civil Procedure, Summary Judgment, Procedural Fairness, Notice, Costs
Facts: The appellants appeal from the judgment of Ramsay J. of the Superior Court of Justice in which he dismissed their counterclaim during the respondent’s motion for summary judgment. The appellants also appeal the $32,000 in costs awarded against them. The appellants claim they were denied procedural fairness because the respondent’s notice of motion was deficient.
(1) Did Ramsay J. err in dismissing the appellants’ counterclaim?
The appeal was allowed, and costs fixed at $10,000 were payable to the appellants.
(1) Yes. The appellants were denied procedural fairness, as counsel for the respondent acknowledged in court that his notice of motion did not seek the dismissal of the appellants’ counterclaim. The appellants may have provided different evidence at the respondent’s motion for summary judgment had they been provided with proper notice. The costs award of $32,000 against the appellants was upheld because it reflected the respondent’s success on its summary judgment motion.
[Laskin, Rouleau and Huscroft JJ.A.]
M. Olanyi Parsons, for the appellant
Christopher Thompson, for the respondent
Keywords: Civil Procedure, Limitation Periods, Limitations Act, 2002, Negligent Investigation, Malicious Prosecution
Facts: The plaintiff appeals the dismissal of her claim for negligent investigation. The motion judge struck the plaintiff’s claims for malicious prosecution and negligent investigation on the ground they were commenced beyond the two-year limitation period in the Limitations Act, 2002. But the motion judge permitted the plaintiff to amend her statement of claim to pursue her allegation that the defendant has infringed her privacy rights by mishandling her personal information – her fingerprints and photographs.
On appeal, the appellant contended that the negligent investigation claim and the breach of privacy claim are interconnected and at least on a Rule 21 motion, the negligent investigation claim should not have been struck.
Issue: Did the motion judge err in finding that the plaintiff’s negligent investigation claim was statute barred?
Held: No. Appeal dismissed.
Reasoning: The court concluded that the two claims asserted protect different legal interests. The tort of negligent investigation protects accused who are improperly charged, convicted or imprisoned because of a negligent investigation. This tort is therefore distinct from the plaintiff’s breach of privacy claim.
[Cronk, Pepall and Benotto JJ.A.]
S. Hill, in person
J. Winch, for the respondent
Keywords: Creditor-Debtor, Mortgages, Act of Default, Possession
The respondent was granted summary judgment on amounts owing by the appellant under a mortgage and line of credit. The appellant admitted his indebtedness and to committing acts of default. The appellant argued that he obtained a $75,000 loan from a third party, and made arrangements with the respondent’s employees to use that money to make payments on the mortgage, but that one of the bank’s employees held back $35,000 of the third party loan proceeds. No evidence was led in support of this argument. Based on the uncontradicted evidence of the respondent, the motion judge held that the respondent was entitled to the amounts owing and permitted the respondent to seek possession.
The appellant’s counterclaim for excessive fees was dismissed for lack of evidence, but without prejudice to the right of the appellant to bring a separate claim against the respondent in respect of the alleged theft of the loan proceeds by the respondent’s employees.
Holding: Appeal dismissed.
The Court agreed with the motion judge that there was no genuine issue requiring a trial, and that the summary judgment and leave to issue a writ of possession were warranted. The Court saw no error in the motion judge’s ruling on the counterclaim.
[Laskin, Rouleau and Huscroft JJ.A.]
Robert Bilich, acting in person
Michael Smith, for the Moving Parties, respondents in appeal
Keywords: Civil Procedure, Appellate Jurisdiction, Interlocutory or Final Order, Stay Pending Payment of Costs
This was an appeal by Robert Bilich from the order of Myers J. staying his action to allow time for the appellant to pay costs awards. The respondents moved to quash the appeal on the basis that Myers J.’s order was interlocutory, not final.
The appellant sued the defendants for $10 million in damages arising out of his having been arrested and charged with criminal harassment in 2008. Most of the appellant’s claims were struck by Frank J. In the course of various proceedings appealing the order of Frank J., over $6,000 in costs were awarded against the appellant.
The appellant amended his statement of claim and the respondents moved to strike. Justice Myers adjourned the motion and ordered that the appeal be stayed until the appellant paid the outstanding costs orders (including the costs of the motion) and set a final payment date of May 23, 2015, after which the respondents could move to dismiss the action with notice if the costs were not paid, or move to strike the claim if the costs were paid. In addition, Myers J. struck the appellant’s affidavit subject to a motion for leave to re-file it and ordered that the record be sealed and not form part of the public record, pending further order of a Master or Judge.
Was the stay interlocutory?
Decision: Appeal Quashed.
The Court held that the decision under appeal did not finally determine any substantive matter in the litigation. Justice Myer’s decision merely stayed the action while costs awarded to the respondents remained outstanding. Justice Myers provided a fixed date by which the appellant could pursue the action by paying the costs and made clear that the respondents could neither move to dismiss the action nor have it struck until that date had passed.
The appellant could seek leave to re-file the affidavit if the stay was lifted. Likewise, the sealing order could have been lifted if the appellant was able to demonstrate that the transcript and affidavit were admissible and were complete and certified, in compliance with legal requirements.
Because it remained open to the appellant to pursue the action, the decision under appeal was interlocutory rather than final in nature and the appeal must be brought before the Divisional Court with leave.