Good evening.

These are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of May 9, 2022.

In Lash v. Lash Point Association Corp., the Court allowed the appeal and set aside the approval of a sale of a property by a Received because the sale failed to satisfy any of the Soundair principles and ought not to have been approved. The factors relied upon by the motion judge to approve the sale could not serve as an effective substitute to the Soundair factors in the circumstances of the case.

In Taylor v. Hanley Hospitality Inc., the Court set aside the motion judge’s order dismissing the appellant’s action for constructive dismissal on the basis of the interpretation of the infectious disease emergency leave amendments to the Employment Standards Act. The motion judge made inappropriate findings of fact on the Rule 21 motion. The Court declined to interpret the amendments in the absence of a full record.

Other topics covered this week included fire insurance coverage/exclusions, the method of providing notice of waiver of conditions within agreements of purchase and sale of land and interveners. Wishing everyone an enjoyable weekend.

Table of Contents

Civil Decisions

Lin v. Weng, 2022 ONCA 367

Keywords: Contracts, Insurance, Interpretation, Property, Fire, Exclusions, Statutory Interpretation, Retrospectivity, Standard of Review, Insurance Act, R.S.O. 1990, c. I.8, s. 129.1, Hryniak v. Mauldin, 2014 SCC 7, Housen v. Nikolaisen, 2002 SCC 33, Daley v. Economical Mutual Insurance Company (2005), 206 O.A.C. 33 (C.A.); Ledcor Construction Limited v. Northbridge Indemnity Insurance, 2016 SCC 37, Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.), Brosseau v. Alberta Securities Commission, [1989] 1 S.C.R. 301, R. v. Bengy, 2015 ONCA 397, Tran v. Canada (Public Safety and Emergency Preparedness), 2017 SCC 50, Elmer A. Driedger, “Statutes: Retroactive Retrospective Reflections” (1978), 56 Can. Bar. Rev. 264, Ruth Sullivan, Statutory Interpretation, 2nd ed. (Toronto: Irwin Law, 2007), Pierre-André Côté, The Interpretation of Legislation in Canada, 4th ed. (Scarborough: Carswell, 2011), Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed. (Markham: LexisNexis Canada, 2014)

Lash v. Lash Point Association Corp., 2022 ONCA 361

Keywords: Real Property, Receiverships, Sale Process, Approval, Rules of Civil Procedure, Rule 59.06(2)(a), Sengmueller v. Sengmueller (1994) 17 O.R. (3d) 208 (C.A.), Royal Bank of Canada v. Soundair Corp. (1991), 4 O.R. (3d) 1 (C.A.), Regal Constellation Hotel Ltd. (Re) (2004), 71 O.R. (3d) 355 (C.A.), Toronto-Dominion Bank v. Usarco Ltd. (2001), 196 D.L.R. (4th) 448 (Ont. C.A.), Frank Bennett, Bennett on Receiverships, 4th ed. (Toronto: Thomson Reuters, 2021)

Imperial Oil Limited v. Haseeb, 2022 ONCA 392

Keywords: Labour and Employment, Human Rights Law, Discrimination, Citizenship, Civil Procedure, Interveners, Friends of the Court, Human Rights Code, R.S.O. 1990, c. H.19, s. 5(1), Rules of Civil Procedure, Rule 13.03(1), Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada (1990), 74 O.R. (2d) 164 (C.A.), Jones v. Tsige (2011), 106 O.R. (3d) 721 (C.A.), Tranchemontagne v. Ontario (Director, Disability Support Program), 2006 SCC 14, Foster v. West, 2021 ONCA 263

Taylor v. Hanley Hospitality Inc., 2022 ONCA 376

Keywords: Employment Law, Constructive Dismissal, Infectious Disease Emergency Leave, Civil Procedure, Determination of Issue Before Trial, Employment Standards Act 2000, S.O. 2000, c. 41, ss. 50.1, 141, O. Reg. 228/20, Emergency Management and Civil Protection Act, R.S.O. 1990, Ch. E.9, ss. 7.0.1(1), 7.0.2, The Employment Standards Amendment Act (Infectious Disease Emergencies), 2020, S.O. 2020, c. 3, Interpretation Act, R.S.O 1990, c. I.11, s. 10, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 109, Rules of Civil Procedure, Rules 21, 25.08, Beaudoin Estate v. Campbellford Memorial Hospital, 2021 ONCA 57, Public School Boards’ Assn. of Alberta v. Alberta (Attorney General), 2000 SCC 2, R. v. Find, 2001 SCC 32, Rizzo v. Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Elmer Driedger: Construction of Statutes (2nd ed. 1983), Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342

WED Investments Limited v. Showcase Woodycrest Inc., 2022 ONCA 384

Keywords: Contracts, Interpretation, Real Property, Agreements of Purchase and Sale of Land, Waiver of Conditions, Notice, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, McKee v. Montemarano, 2009 ONCA 359, High Tower Homes Corporation v. Stevens, 2014 ONCA 911

Short Civil Decisions

London District Catholic School Board v. Michail, 2022 ONCA 378

Keywords: Torts, Defamation, Anti-SLAPP, Vexatious Litigation, Canadian Charter of Rights and Freedoms, ss. 2(b), 7, 12 and 15(1), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 137.1, 140, Veneruzzo v. Storey, 2018 ONCA 688, R. v. Reid, 2016 ONCA 524

Rieder zu Wallburg v. Plista Gmbh, 2022 ONCA 386

Keywords: Civil Procedure, Costs, Partial Indemnity

Drop and Run Inc. v. 1909703 Ontario Inc. (Integral Health Group Inc.), 2022 ONCA 375

Keywords: Real Property, Commercial Tenancies, Helping Tenants and Small Businesses Act, 2020, S.O. 2020, c. 23, Commercial Tenancies Act, R.S.O. 1990, c L.7

2056706 Ontario Inc. v. Pure Global Cannabis Inc., 2022 ONCA 381

Keywords: Bankruptcy and Insolvency, Receiverships, Contracts, Interpretation, Asset Purchase Agreements, Share Purchase Agreements, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Housen v. Nikolaisen, 2002 SCC 33


CIVIL DECISIONS

Lin v. Weng, 2022 ONCA 367

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

COUNSEL:

P.H. Starkman and C. Zhang, for the appellant F. Csathy, for the respondents

Keywords: Contracts, Insurance, Interpretation, Property, Fire, Exclusions, Statutory Interpretation, Retrospectivity, Standard of Review, Insurance Act, R.S.O. 1990, c. I.8, s. 129.1, Hryniak v. Mauldin, 2014 SCC 7, Housen v. Nikolaisen, 2002 SCC 33, Daley v. Economical Mutual Insurance Company (2005), 206 O.A.C. 33 (C.A.); Ledcor Construction Limited v. Northbridge Indemnity Insurance, 2016 SCC 37, Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.), Brosseau v. Alberta Securities Commission, [1989] 1 S.C.R. 301, R. v. Bengy, 2015 ONCA 397, Tran v. Canada (Public Safety and Emergency Preparedness), 2017 SCC 50, Elmer A. Driedger, “Statutes: Retroactive Retrospective Reflections” (1978), 56 Can. Bar. Rev. 264, Ruth Sullivan, Statutory Interpretation, 2nd ed. (Toronto: Irwin Law, 2007), Pierre-André Côté, The Interpretation of Legislation in Canada, 4th ed. (Scarborough: Carswell, 2011), Ruth Sullivan, Sullivan on the Construction of Statutes, 6th ed. (Markham: LexisNexis Canada, 2014)

FACTS:

The appellant’s tenants burned down his property on the last day of their tenancy. They caused a fire and explosion in the basement by using a butane lighter, a stove, and a propane gas to extract marijuana resin. The appellant had asked the tenants to leave on account of the non-payment of rent. The appellant expected the tenants to move out that day and did not know they were doing anything in the basement. At the time of the fire, the appellant had a home insurance policy with Aviva General Insurance Company, respondent on the appeal. Aviva denied coverage based on two exclusion clauses in the policy: a marijuana production exclusion clause and an illegal activity exclusion clause. After the fire and while the appellant’s claim was outstanding, the legislature amended the Insurance Act by adding a provision limiting the application of criminal and intentional activity exclusion clauses to the claim of a person who caused the loss or who knew about or consented to the activity that caused the loss.

The motion judge awarded summary judgment to the respondents. He found that: 1) the respondents were entitled to deny the applicability of s. 129.1 to the appellant’s claim, even though they had not filed an amended statement of defence to address the s. 129.1 issue; 2) s. 129.1 does not apply retrospectively to insurance policies entered into before the date of its enactment; and 3) s. 129.1 does not apply to the marijuana exclusion clause.

ISSUES:

(1) Did the motion judge err in law by allowing the respondents to rely on a legal issue that they did not plead? (2) Did the motion judge err in law by finding that s.129.1 does not apply retrospectively to a claim under the policy for a loss that occurred before the enactment of s.129.1? (3) Did the motion judge err in law by finding that s.129.1 does not affect or apply to the marijuana exclusion clause?

HOLDING:

Appeal dismissed.

REASONING:

(1) No.

The interpretation of legislation and standard form insurance policies, where there is no unique factual matrix and interpretation is of precedential value, are reviewed on a standard of correctness. The motion judge was best positioned to interpret the pleadings and to determine the extent to which the appellant was faced with any “new issues”. The appeal was a procedural matter where the motion judge determined the fair and appropriate application of the Rules and case law to the circumstances of the motion before him. There was no basis to interfere with the motion judge’s decision on the issue.

(2) No.

If the legislature had intended the amendment to apply to entitlements or claims for losses that had already occurred, but for which the insurer had not yet paid the indemnity, i.e., outstanding entitlements or claims, it would have used clear language to so state. It did not do so and therefore the presumption against retroactivity was not rebutted. To the extent that there may be a special rule for beneficial legislation involving governmental bodies and the public, any such rule is not applicable in the context of the contractual rights of insureds and insurers.

(3) Not addressed.

The court did not address the third point because of the conclusion on the issue of temporal application of s.129.1.


Lash v. Lash Point Association Corp., 2022 ONCA 361

[Fairburn A.C.J.O., Pepall and Sossin JJ.A.]

COUNSEL:

P. Shea and C. Stanek, for the appellants, Lash Point Association Corp., P.C.B.L. and J.E.A.L.

J. W. de Vries and J. Kaufman, for the respondents E.G.H., D.S., W.T.L., J.L., C.P.L., T.E.R., S.M.R and A.L.R

K. Kraft and S. Wilson, for the respondent Grant Thornton Limited in its capacity as court-appointed receiver of Lash Point Association Corp.

T.L., acting in person

Keywords: Real Property, Receiverships, Sale Process, Approval, Rules of Civil Procedure, Rule 59.06(2)(a), Sengmueller v. Sengmueller (1994) 17 O.R. (3d) 208 (C.A.), Royal Bank of Canada v. Soundair Corp. (1991), 4 O.R. (3d) 1 (C.A.), Regal Constellation Hotel Ltd. (Re) (2004), 71 O.R. (3d) 355 (C.A.), Toronto-Dominion Bank v. Usarco Ltd. (2001), 196 D.L.R. (4th) 448 (Ont. C.A.), Frank Bennett, Bennett on Receiverships, 4th ed. (Toronto: Thomson Reuters, 2021)

FACTS:

In 1996, thirteen family members (the “founding members”) transferred their ownership interests in Lash Point, a cottage property consisting of about 28 acres on Lake Rosseau in the Township of Muskoka Lakes, to a non-profit corporation, Lash Point Association Corporation (“LPAC”). The object of LPAC, as stated in its letters patent, was “to own and conserve land and its natural features for the enjoyment of its members and guests.” In the event LPAC was ever wound up, the founding members would receive a percentage of the proceeds realized from the sale of Lash Point equal to the percentage of their interest in Lash Point contributed to LPAC.

By 2016, LPAC had 25 family members from five groups or “clans”. They consisted of 13 founding members and 12 non-founding members. The family members disagreed on the future of Lash Point. Some wanted to stay, continue to enjoy the property, and avoid triggering capital gains tax (the “Remainers”) while others wanted to leave and realize on the fair market value of their interests (the “Departers”). Neither side could muster a two-thirds majority of voting members as required by LPAC’s by-laws. The parties concluded that a court-supervised solution was required. The appeal involved the evolution and outcome of that process.

On October 7, 2020, Messrs. S. and D. made a joint offer to purchase. Between October 14-19, 2020, the Receiver received letters of direction signed by 11 of the 13 founding members of LPAC asking the Receiver to seek an order from the Court facilitating the sale of all of Lash Point and approving the agreement of purchase and sale with Messrs. S. and D. J.E.A.L. and P.C.B.L. opposed the proposed agreement of purchase and sale, as did LPAC, of which they were the controlling directors and which the Remainers controlled.

Messrs. S. and D. finalized the agreement of purchase and sale with the Receiver, who then brought a motion for directions from the Court. The Receiver took no position on the motion and made no recommendation to the Court regarding the proposed sale.

In an order dated June 24, 2021, the motion judge (Dunphy J.) effectively reversed the approach adopted by Penny J., which recognized the desire of the Remainers to retain a portion of their cottage property. The Receiver was directed to cease the severance process. The motion judge approved the agreement of purchase and sale with Messrs. S. and D. for the whole of Lash Point. On the closing of the transaction, LPAC’s right, title, and interest in Lash Point would vest in Messrs. S. and D. Accordingly, the underpinning of Penny J.’s order that provided some protection to those who wished to retain their interest in the cottage property effectively disappeared.

ISSUES:

(1) Did the motion judge lack jurisdiction to vary the buy-out order?

(2) Should the motion judge not have approved the sale to Messrs. S. and D.?

HOLDING:

Appeal allowed.

REASONING:

(1) No.

The Receiver was a court-appointed officer over whom the Court had supervisory jurisdiction. The order appointing Grant Thornton Limited expressly provided it with the ability to return to Court to seek advice and directions. In addition, s. 16 of Schedule A provided to the Receiver and any founding member the ability to return to Court to address any dispute arising from the terms of Schedule A. Indeed, Penny J. recognized this point in his endorsement of November 24, 2016, and Dietrich J. reiterated the possibility of a variation in both of her endorsements. Penny J.’s order provided the Court with the flexibility to address disputes that arose including the pace at which the valuation and sales process was unfolding. The Court concluded that the motion judge had jurisdiction to make an order varying the order of Penny J.

The Court agreed with the motion judge that jurisdiction extended to authorizing the Receiver to terminate the severance plan and take steps to sell all of Lash Point. The parties ought to have moved much earlier in the process for advice and directions and/or a variation in the terms of Penny J.’s order which governed them. That said, the motion judge was not precluded from taking jurisdiction. The Court saw no reason to interfere with this aspect of the motion judge’s order. As the motion judge noted, the process launched by the buy-out order did not have a pre-determined deadline. The Receiver initially estimated, however, that completion of the severance process would require about two years, or about five years from when the Departers first began to seek an exit. The motion judge found that the circumstances had changed in a material way since the buy-out order.

(2) Yes.

The principles governing the approval of sale agreements in a receivership context were set out by the Court of Appeal in Royal Bank of Canada v. Soundair Corp.:

1. whether a sufficient effort has been made to obtain the best price and whether the receiver has acted improvidently;

2. the interests of all of the parties;

3. the efficacy and integrity of the process by which the offers were obtained; and

4. whether the working out of the process was unfair.

The motion judge erred in approving the S./D. agreement of purchase and sale in the face of an express finding that none of the factors in Soundair were satisfied. This was particularly problematic given that there was no true sales process, the property had not been exposed to the open market, there was no evidence from the Receiver that efforts had been made to obtain the best price and there was no written recommendation or analysis from the Receiver, as it had not been clothed with that mandate or given those directions from the Court.

The motion judge also erred in his identification of the factors that purportedly served as substitutes for the Soundair principles. First in that regard, he determined that Lash Point was “attractive to a relatively specialized portion of the Muskoka real estate market” and that it was a “narrow and specialized market”. He relied on this to conclude that the informal canvassing undertaken by some of the founding members provided interested buyers with an opportunity to make an offer and that “an effort to contact those most likely to be in a position to make an offer to acquire it was undertaken”.

There was no expert or other evidence to support these findings. Moreover, there was no evidence that the property was ever advertised either locally, nationally, internationally or indeed at all.

Second, the motion judge also placed great weight on there being no evidence that any of the founding members had any interest in the S./D. agreement apart from the common financial interest of all in obtaining the highest price obtainable. Although not technically an interest in the S./D. agreement, it was noted that Messrs. S. and D. were contributing financially to the Departers’ litigation. The agreement governing this arrangement was not brought to the Court’s attention.

Third, the motion judge also indicated that the purchase price compared very favourably to updated appraisal evidence. However, there was no such evidence. The main compound consisting of 6.25 acres and 1,210 feet of waterfront was appraised in April 2019; the entire property was not. There was simply an estimate of value.

Fourth, the motion judge determined that the overwhelming majority of those with an interest in the size of the “pie” was powerful and convincing evidence that the proposed transaction reflected fair market value. As the motion judge noted, of the four Remainer founding members of LPAC, two had changed camps and supported the transaction and two were firmly opposed, while the rest of the non-founding Remainers expressed no opinion to the Court. Including the two who had changed sides, 87% of the economic interest supported the transaction. However, the Soundair principles do not rest on a head count. Rather they demand integrity in the process and fairness to all claimants with an interest in the property.


Imperial Oil Limited v. Haseeb, 2022 ONCA 392

[Gillese J.A. (Motion Judge)]

COUNSEL:

S. Choudhry and A. Nayerahmadi, for the moving parties and proposed intervener South Asian Legal Clinic of Ontario and Colour of Poverty/Colour of Change Network R. Nixon and D. Burns-Shillington, for the responding party Imperial Oil Limited M. Evans Maxwell and T.G. Young, for the responding party M.H. B.A. Blumenthal, for the responding party Human Rights Tribunal of Ontario

Keywords: Labour and Employment, Human Rights Law, Discrimination, Citizenship, Civil Procedure, Interveners, Friends of the Court, Human Rights Code, R.S.O. 1990, c. H.19, s. 5(1), Rules of Civil Procedure, Rule 13.03(1), Peel (Regional Municipality) v. Great Atlantic & Pacific Co. of Canada (1990), 74 O.R. (2d) 164 (C.A.), Jones v. Tsige (2011), 106 O.R. (3d) 721 (C.A.), Tranchemontagne v. Ontario (Director, Disability Support Program), 2006 SCC 14, Foster v. West, 2021 ONCA 263

FACTS:

M.H. applied to work at Imperial Oil which had a policy requiring prospective job applicants to be eligible to work in Canada on a permanent basis (the “Policy”). M.H. was an international student and did not meet that requirement. However, under the Post-Graduation Work Permit program (“PGWP”), he was eligible to work anywhere in Canada for at least three years upon graduation. PGWP holders may apply for permanent resident status.

Imperial Oil offered M.H. a job but rescinded the offer when he was unable to provide proof of his eligibility to work in Canada permanently. M.H. brought a claim against Imperial Oil to the HRTO, alleging discrimination on the basis of citizenship.

The HRTO found that the Policy constituted discrimination on the basis of citizenship, contrary to s. 5(1) of the Human Rights Code (the “Code”). It denied Imperial Oil’s request for reconsideration and ordered Imperial Oil to pay M.H. for lost income, compensation for injury to dignity, feelings and self-respect, plus interest.

Imperial Oil successfully brought a judicial review application to the Divisional Court. A majority of the Divisional Court held that the HRTO erred in concluding that the requirement that M.H. be able to work permanently in Canada was discrimination on the basis of citizenship and quashed the HRTO decision.

M.H. was granted leave to appeal the Divisional Court’s decision to the Court of Appeal.

The South Asian Legal Clinic of Ontario (“SALCO”) and the Colour of Poverty/Colour of Change Network (“COP-COC”) together brought a motion for leave to intervene, as a friend of the Court on the appeal.

ISSUES:

(1) Should the Court grant SALCO and COP-COC leave to intervene as friends of the Court?

HOLDING:

Motion granted.

REASONING:

(1) Yes.

When deciding motions for leave to intervene as a friend of the court pursuant to Rule 13.03(1), the Court will generally consider (1) the nature of the case and issues that are to be addressed, and (2) the likelihood the applicant will make a useful contribution to the resolution of the appeal without causing injustice to the immediate parties.

While the case arose from a private dispute between M.H. and Imperial Oil, the questions raised on the appeal showed that the issues transcended the interests of the immediate parties. The issues were of public importance, relating as they did to the interpretation of the Code, which is quasi-constitutional legislation, and whether policies requiring citizenship or permanent residency for prospective job applicants are discriminatory.

Given the proposed interveners’ expertise and experience, they were well-positioned to make a useful contribution by bringing a broader and different perspective on the issues. The proposed interveners brought a distinct perspective that would likely assist the Court when it grappled with the alleged mischaracterization of the rights of international students and graduates. The same held true on the issue of partial discrimination.

Taylor v. Hanley Hospitality Inc., 2022 ONCA 376

[Roberts, Miller and Zarnett JJ.A.]

COUNSEL:

L. Samfiru and L. Cerda, for the appellant I. A. Johncox, for the respondent T. Gleason and A. Lei, for the intervener Parkdale Community Legal Services

Keywords: Employment Law, Constructive Dismissal, Infectious Disease Emergency Leave, Civil Procedure, Determination of Issue Before Trial, Employment Standards Act 2000, S.O. 2000, c. 41, ss. 50.1, 141, O. Reg. 228/20, Emergency Management and Civil Protection Act, R.S.O. 1990, Ch. E.9, ss. 7.0.1(1), 7.0.2, The Employment Standards Amendment Act (Infectious Disease Emergencies), 2020, S.O. 2020, c. 3, Interpretation Act, R.S.O 1990, c. I.11, s. 10, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 109, Rules of Civil Procedure, Rules 21, 25.08, Beaudoin Estate v. Campbellford Memorial Hospital, 2021 ONCA 57, Public School Boards’ Assn. of Alberta v. Alberta (Attorney General), 2000 SCC 2, R. v. Find, 2001 SCC 32, Rizzo v. Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Elmer Driedger: Construction of Statutes (2nd ed. 1983), Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342

FACTS:

In issue in this appeal are the amendments to ss. 50.1 and 141 of the Employment Standards Act (“ESA”) and the provisions of O. Reg 228/20 made under the ESA that create a new category of leave under the ESA: the infectious disease emergency leave (“IDEL”).

On March 27, 2020, the respondent employer, Tim Horton’s, placed the appellant, an assistant manager, on a “temporary lay-off” without pay. Before being recalled to her employment in September 2020, the appellant commenced an action against the respondent claiming damages for constructive dismissal, among other things. The respondent defended the action and pleaded that the appellant was on IDEL.

The respondent subsequently brought a motion under rule 21.01(1)(a) of the Rules of Civil Procedure for the determination of an issue before trial, namely, whether the appellant’s action was precluded by virtue of the provisions of s. 50.01 of the ESA and of O. Reg. 228/20, and asked for the dismissal of the appellant’s action. Neither party filed, or sought to file, evidence on the motion.

On the motion, the motion judge took judicial notice of a number of facts and accepted as uncontested the respondent’s allegations in its statement of defence because the appellant did not deliver a reply.

In interpreting s. 50.1 of the ESA and O. Reg. 228/20, the motion judge applied the facts that she accepted as admitted or by way of judicial notice and concluded that the provisions displaced the appellant’s common law claim for constructive dismissal and held that the appellant was on IDEL for all purposes; was deemed not to be laid off for all purposes; and was not constructively dismissed for all purposes. She dismissed the appellant’s action.

The appellant appealed from the motion judge’s decision.

ISSUES:

(1) Did the motion judge err in her approach to the respondent’s rule 21 motion and in dismissing the action where no evidence was admitted and there were material factual issues to be determined? (2) Did the motion judge err in concluding that the COVID-19 amendments to s. 50.1 of the ESA and the associated O. Reg. 228/20, that establish temporary infectious disease emergency leave, displaced the appellant’s common law right of action for constructive dismissal? (3) Should the Court of Appeal interpret s. 50.1 of the ESA and O. Reg. 228/20?

HOLDING:

Appeal allowed.

REASONING:

(1) Yes.

The well-established approach to be followed on a motion brought under rule 21.01(1)(a), as set out in Beaudoin Estate v. Campbellford Memorial Hospital, is as follows: (1) The test is whether the determination of the issue of law is “plain and obvious”; (2) The facts pleaded in the statement of claim are assumed to be true, unless they are patently ridiculous or manifestly incapable of proof; (3) The statement of claim should be read as generously as possible to accommodate any drafting inadequacies in the pleading.

The motion judge erred in failing to assume that the allegations in the statement of claim were true. As a result, the motion judge misapplied the provisions of rule 25.08 that stipulate where a reply is necessary and the deemed effect of the absence of a reply. The Court concluded a reply was not required, and accordingly, by not delivering a reply, the appellant was “deemed to deny the allegations of fact made in the defence” of the respondent. The motion judge therefore erred in treating the allegations in the respondent’s statement of defence as admitted facts.

The Court also held it was not open to the motion judge to take judicial notice of the “litany of adjudicative facts” that she did. The only facts that the motion judge was entitled to accept as true as far as they related to and affected the parties were those in the statement of claim. As a result, there was no basis for the motion judge’s myriad findings, including that the appellant had not resigned from her employment and that the appellant was on an infectious disease emergency leave because of the COVID-19 emergency government-mandated measures and therefore was not constructively dismissed by the respondent.

The Court held it was therefore not plain and obvious that the appellant’s action could not succeed. Accordingly, the motion judge erred in dismissing the appellant’s action which required the adjudication of the material facts that were in dispute and the determination of whether the ESA provisions even applied to the appellant’s circumstances.

(2) Yes.

The Court held the motion judge’s interpretation of s. 50.1 of the ESA and O. Reg. 228/20 was tainted by the analytical errors discussed under issue (1). Specifically, the motion judge erred by following the respondent’s submissions and primarily basing her interpretation of the provisions on her impermissible and unsubstantiated findings concerning the parties’ employment relationship, the appellant’s employment status, as well as the legislative intention and context underlying the provisions, for which there was no evidentiary foundation.

Further, while engaging in statutory interpretation, the Court held the parties and the motion judge erroneously focused their analysis too narrowly on only some of the provisions of the ESA and O. Reg. 228/20 and did not interpret them in the larger context that was required in the circumstances of the case.

The Court concluded that, given how intertwined the statutory interpretation issues were with the factual issues, the respondent’s rule 21 motion could not serve its stated purposes of disposing of all or part of the action, substantially shortening the trial or resulting in a substantial saving of costs. The motion judge erred in not dismissing the respondent’s rule 21 motion and further erred in dismissing the appellant’s action on the basis of an interpretation of the statutory and regulatory scheme that she should not have undertaken.

(3) No.

The Court declined to exercise its discretion to interpret the provision and regulations. The Court held that it had neither the record nor the submissions that would permit it to carry out a proper analysis of s. 50.1 of the ESA and O. Reg. 228/20.

In the result, the motion judge’s order was set aside, the respondent’s rule 21 motion was dismissed, and the action was remitted for determination before another judge of the Superior Court of Justice.


WED Investments Limited v. Showcase Woodycrest Inc., 2022 ONCA 384

[Huscroft, Thorburn and George JJ.A.]

COUNSEL:

M. Klaiman, for the appellants, Showcase Woodycrest Inc. and 2442459 Ontario Inc. S. Schwartz and D. Marr, for the respondent, WED Investments Limited

Keywords: Contracts, Interpretation, Real Property, Agreements of Purchase and Sale of Land, Waiver of Conditions, Notice, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, McKee v. Montemarano, 2009 ONCA 359, High Tower Homes Corporation v. Stevens, 2014 ONCA 911

FACTS:

The appellant Showcase Woodycrest Inc. (“Showcase”) is the owner of a property at 3775 Brock Street North in Whitby (the “Brock Street property”). The appellant, 2442459 Ontario Inc. (“244”) is the owner of another property at 201 Hopkins Street in Whitby. On June 30, 2016, WED Investments Limited (“WED”) offered to purchase both the Brock Street and Hopkins Street properties from Showcase and 224. Each offer was sent by email and included the asking price and deposit proposed. On August 5, 2016, Showcase entered into a standard-form OREA Agreement of Purchase and Sale with WED for the sale of the Brock Street property (the “Agreement”). The Agreement contained a “development condition” which permitted WED time to conduct due diligence. After extensions, the diligence period was set to end on October 17, 2016. On October 17, WED gave written notice of its waiver of the development condition and decision to proceed with the Agreement, by email only. The trial judge determined that the delivery of the written notice to waive and proceed by email satisfied the notice requirement of the Agreement.

ISSUES:

(1) Whether the trial judge erred in determined that delivery to waive conditions by email only satisfied the notice requirement in the Agreement?

HOLDING:

Appeal dismissed.

REASONING:

Paragraph 3 of the standard form Agreement provides that any notices “shall be in writing” and “delivered personally or hand delivered to the Address for Service provided in the Acknowledgement below, or where a facsimile number or email address is provided herein, when transmitted electronically to that facsimile number or email address, respectively”. The attached Schedule A to the Agreement, provided that, “the parties hereto agree that this Agreement of Purchase and Sale and any Amendments thereto may be transmitted through the use of electronic mail and that a true copy will be delivered to the Buyer and the Seller following acceptance of said Agreement”. Paragraph 26 states that if there is a conflict, then the added provision supersedes that of the standard form.

The trial judge based their decision on the following reasons, with which the Court saw no error. As per Sattva, the trial judge noted the importance of looking at the Agreement as a whole, the genesis of the transaction, the background, the context, and the market in which the parties were operating. By doing so, the trial judge correctly identified that the aforementioned paragraph 26 provides that a provision added to the agreement governs to the extent it conflicts with or causes a discrepancy with any provision of the standard pre-set portion. As the Court has determined in the past, a specific notice provision was intended to prevail over a contradictory standard form notice provision, since it would have been unnecessary to include had the parties intended it to be overridden by the standard form provision. Furthermore, Schedule A governed the delivery of the waiver notice based on the language of the specific provision in Schedule A and the surrounding circumstances. The trial judge concluded that it would be inconsistent with the practical, common sense approach described in Sattva to read the contract as disallowing email communication, in light of the surrounding circumstances.


SHORT CIVIL DECISIONS

London District Catholic School Board v. Michail, 2022 ONCA 378

[Huscroft, Thorburn and George JJ.A.]

COUNSEL:

M. M., acting in person L. Ledgerwood, for the respondent

Keywords: Torts, Defamation, Anti-SLAPP, Vexatious Litigation, Canadian Charter of Rights and Freedoms, ss. 2(b), 7, 12 and 15(1), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 137.1, 140, Veneruzzo v. Storey, 2018 ONCA 688, R. v. Reid, 2016 ONCA 524

Rieder zu Wallburg v. Plista Gmbh, 2022 ONCA 386

[Doherty, Huscroft and Harvison Young JJ.A.]

COUNSEL:

D. Spiller, for the appellants E. Kurz, for the respondents

Keywords: Civil Procedure, Costs, Partial Indemnity

Drop and Run Inc. v. 1909703 Ontario Inc. (Integral Health Group Inc.), 2022 ONCA 375

[Huscroft, Thorburn and George JJ.A.]

COUNSEL:

A. Zaya and S. Erskine, for the appellant T. Nemetz, for the respondent

Keywords: Real Property, Commercial Tenancies, Helping Tenants and Small Businesses Act, 2020, S.O. 2020, c. 23, Commercial Tenancies Act, R.S.O. 1990, c L.7

2056706 Ontario Inc. v. Pure Global Cannabis Inc., 2022 ONCA 381

[Huscroft, Thorburn and George JJ.A.]

COUNSEL:

R. Atkinson, A. Freedland and S. Singhal for the appellant, TS Pharmaceutical Ltd. L. Williams, R. Nicholson, and M. Grossell, for the respondent, A. Farber & Partners Inc.

Keywords: Bankruptcy and Insolvency, Receiverships, Contracts, Interpretation, Asset Purchase Agreements, Share Purchase Agreements, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Housen v. Nikolaisen, 2002 SCC 33