Good afternoon.

Following are this week’s summaries of the Court of Appeal for Ontario for the week of September 7, 2021.

Congratulations to our very own Anthony H. Gatensby and W. Colin Empke for their success in ! In that case, the Court determined that there was no duty on the part of our client to defend its insured against two claims of breach of contract in an arbitration proceeding.

In , a creditor made a demand for repayment of loans after the death of the debtor. The debtor’s estate successfully brought a motion for summary judgment. The court set aside the motion judge’s order, finding several palpable and overriding factual errors.

In ., the Court refused to stay an order of the supervising judge ordering a sale process pending an appeal from the order.

Lastly, I am very excited and proud to help announce the release of (). The is a new free online resource jointly published by the University of Windsor and CanLII. As most of our readers probably know, is a not-for-profit organization operated by the Federation of Law Societies of Canada and is dedicated to assisting with access to justice through the free and open dissemination of the laws of Canada to all members of the public. The was written by a team of 135 leading litigators and experts in Ontario civil procedure, led by Professor Noel Semple of Windsor Law School.

will serve as a guide to Ontario’s , , and , and will be accessible not only to practitioners, but to members of the public. It contains not only the text of all these rules and statutory provisions, but also commentary and annotations to all the relevant case law applying and interpreting each rule and section. To access , please , and make sure to bookmark the site for easy access.

Together with my colleague, Natasha Rambaran, I had the privileged and honour to contribute two chapters to dealing with Rules 54 and 55 (Directing a Reference and Procedure on a Reference). I would like to thank Professor Semple for inviting me to participate in this very worthwhile project.

I would encourage all of our readers to consult in their daily practice, and to spread the word among colleagues. In addition, the authors and Professor Semple would welcome any feedback and ideas for improvement, as the resource will not be static. The intention is for to be continually updated and improved.

Wishing everyone an enjoyable weekend.

Table of Contents

Civil Decisions

2161907 Alberta Ltd. v. 11180673 Canada Inc., 2021 ONCA 590

Keywords: Contracts, Breach, Wrongful Termination, Duty of Good Faith, Bad Faith, Doctrine of Frustration, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Bhasin v. Hrynew, 2014 SCC 71, M. Callow Inc. v. Zollinger, 2020 SCC 45, Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7

Urbancorp Toronto Management Inc. (Re), 2021 ONCA 613

Keywords: Bankruptcy and Insolvency, Civil Procedure, Stay Pending Appeal, Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Hodgson v. Johnston, 2015 ONCA 731, (Re) Brainhunter (2009), 62 C.B.R. (5th) 41 (Ont. Sup. Ct.), Marchant Realty Partners Inc. v. 2407553 Ontario Inc., 2021 ONCA 375

James v. Chedli, 2021 ONCA 593

Keywords: Evidence, Promissory Notes, Limitation, Standard of Review, Bills of Exchange ActEvidence ActReal Property Limitations ActLimitations ActHousen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1. S.C.R. 401, Burns Estate v. Mellon (2000), 48 O.R. (3d) 641 (C.A.), Royal Bank v. Davidson (1972), 25 D.L.R. (3d) (N.S.C.A.), Goss v. Nugent (1833), 5 B & Ad. 58, 110 E.R. 713 (Eng. K.B.), Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200

Panasonic Eco Solutions Canada Inc. v. XL Specialty Insurance, 2021 ONCA 612

Keywords: Contracts, Interpretation, Insurance, Professional Errors and Omissions, Coverage, Duty to Defend, Standard of Review, Non-Marine UnderwritersLloyd’s of London v. Scalera, 2000 SCC 24, Central Trust Co. v. Rafuse, [1986] 2 S.C.R. 147; B.G. Checo International Ltd. v. British Columba Hydro and Power Authority, [1993] 1 S.C.R. 12, Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., [1995] 1 S.C.R. 85, Crum & Forster Specialty Insurance Company v. DVOInc., 939 F. (3d) 852 (7th Cir. Ct. App. 2019), Cabell v. The Personal Insurance Company, 2011 ONCA 105, Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33

Short Civil Decisions

Tanti v. Tanti, 2021 ONCA 607

Keywords: Family Law, Civil Procedure, Appeals

Dunn Aggregates Limited v. Coco Paving Inc., 2021 ONCA 604

Keywords: Contracts, Asset Purchase Agreement, Restrictive Covenants, Civil Procedure, Interlocutory Injunctions, Undertaking in Damages, Costs, Rules of Civil Procedure, Rule 40.03, United States of America v. Yemec, 2013 ONSC 50, 35 C.P.C. (7th) 57, aff’d 2014 ONCA 274

Alajajian v. Alajajian, 2021 ONCA 602

Keywords: Family Law, Property, Spousal Support, Standard of Review, Costs

Florovski v. Florovski, 2021 ONCA 606

Keywords: Family Law, Disclosure


CIVIL DECISIONS

Alberta Ltd. v. 11180673 Canada Inc., 2021 ONCA 590

[Rouleau, Hoy and van Rensburg JJ.A.]

COUNSEL:

J. Thomas Curry, B. Kolenda and A. Quinn, for the Appellant J. Hoffman, for the Respondent

Keywords: Contracts, Breach, Wrongful Termination, Duty of Good Faith, Bad Faith, Doctrine of Frustration, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Bhasin v. Hrynew, 2014 SCC 71, M. Callow Inc. v. Zollinger, 2020 SCC 45, Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7

FACTS:

In the decision under appeal, the application judge dismissed the application of 2161907 Alberta Ltd. (“216”) and granted the application of 11180673 Canada Inc. (“111”). 216 was ordered to pay the Branding Fee (defined below) and was declared to have acted in bad faith, having had no valid reason to terminate the agreements between the parties.

216 holds the Ontario rights to the “Tokyo Smoke” cannabis brand and licenses it to various retail operators. 111 won a cannabis retail operator license in an August 2019 allocation lottery by the Alcohol and Gaming Commission of Ontario’s (“AGCO”). In November 2019, 111 and AGCO entered into a License Agreement for the use of the Tokyo Smoke brand and a Sublease, whereby 111 rented the retail premises from 216 for the operation of a cannabis store. 216 offered 111 funding for start-up costs, including monthly rent of $105,409.03, and an approximately $2 million inducement to open under the Tokyo Smoke banner (the “Branding Fee”). The Branding Fee was due once 111 obtained its Retail Store Authorization from the AGCO.

Two days before opening, a dispute arose and 216 refused to pay 111’s June rent. Accordingly, 111 advised 216 that it would be laying off employees and not opening the store as planned. 216 took 111’s position as a “threat to cease to carry on business”, in breach of the License Agreement, and terminated its relationship with 111. 216 brought an application seeking a declaration that 111 had breached their various agreements, that the Branding Fee was not payable, and that 111 must vacate the retail premises. 111 brought a counter-application seeking payment of the Branding Fee, and a declaration that 216 had wrongfully terminated the License Agreement and breached its duty of good faith in the performance and enforcement of contractual relations.

ISSUES:

(1) Did the application judge err in finding that 216’s termination of the License Agreement was invalid?

(2) Did the application judge err in finding that 216 had breached the duty of good faith?

(3) Did the application judge err in failing to issue a declaration that the Sublease between the parties was validly terminated on August 5, 2020?

HOLDING:

Appeal allowed in part.

REASONING:

(1) No

The application judge’s interpretation and application of contractual terms was owed deference on appeal, and there was no basis to interfere with her findings. 111’s statements were not a “threat to cease to carry on business” for the purposes of the License Agreement. 111’s statements occurred after being told that 216 would not be financing June rent. 111 correctly believed that 216 had breached their agreements, and was consequently unsure whether the store would open in the face of an unexpected $95,000 shortfall. Given the circumstances, it was clearly reasonable for the application judge to find that 111’s statements did not meet the requirements of the parties’ termination clause.

(2) Yes.

216’s erroneous belief that the circumstances gave rise to rise to a right of termination does not amount to bad faith, regardless of 216’s desire to end its relationship with 111. The termination right was part of the parties’ bargain, and reflected the licensor’s legitimate interest in protecting its brand. The License Agreement contained an express contractual duty of good faith that bound both parties, and four legal doctrines were addressed to conclude that 216 did not seek to undermine 111’s interests in bad faith:

a. The duty of cooperation between the parties to achieve the objects of the contract

216 did not knowingly mislead 111 about its intention with respect to the Branding Fee or the deferral of rent. 216 did not lie to 111 at any point, but simply changed positions given new information. This position was not taken dishonestly, unreasonably, capriciously or arbitrarily.

b. The duty to exercise contractual discretion in good faith

While 216’s basis for terminating the License Agreement ultimately proved invalid, its position on termination was not so unreasonable, malicious, or inconsiderate of 111’s legitimate contractual interests as to constitute bad faith. A party is not prevented from exercising a valid right of termination simply because it is anxious to end a relationship, and “pounces” on what it views as an opportunity to do so.

c. The duty not to evade contractual obligations in bad faith

The fact that termination releases a party from making a significant payment does not amount to bad faith, even where a court later finds that the termination was invalid. 216 did not manufacture an artificial reason to avoid paying the Branding Fee, but believed its termination of the Licensing Agreement was justified.

d. The duty of honest performance

There was no deliberate attempt by 216 to create the conditions that triggered 111’s perceived contractual default. It would not be appropriate to characterize 216’s error as bad faith simply because it set in motion the events that resulted in the License Agreement’s invalid termination

(3) Issue not addressed.

The application judge awarded 216 its rent payments under the Sublease for June 1 to September 8, and granted 216 possession of the retail premises as of September 8. From a practical perspective, the Sublease was at an end and all of the outstanding issues under the Sublease were resolved. 216 sought a declaration that the Sublease was validly terminated and that, consequently, the License Agreement was frustrated and at an end. The issue regarding the doctrine of frustration should not be addressed for the first time on appeal.


Urbancorp Toronto Management Inc. (Re), 2021 ONCA 613

[Miller J.A.]

COUNSEL:

K. Kraft, N. Rabinovitch, and M. Beeforth, for the moving party R. Schwill, M. Milne-Smith, and R. Nicholls, for the responding party, KSV Restructuring Inc., in its capacity as monitor M. Gottlieb, J. Renihan, and J. Dietrick, for the responding party, Mattamy Homes Limited

Keywords: Bankruptcy and Insolvency, Civil Procedure, Stay Pending Appeal, Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Hodgson v. Johnston, 2015 ONCA 731, (Re) Brainhunter (2009), 62 C.B.R. (5th) 41 (Ont. Sup. Ct.), Marchant Realty Partners Inc. v. 2407553 Ontario Inc., 2021 ONCA 375

FACTS:

The motion involved a group of companies owned by Urbancorp Inc. (“UCI”). The moving party, the Foreign Representative of UCI, sought a stay pending its motion for leave to appeal an order of the supervising judge.

The order authorized a process for the sale of a 51% interest in a real estate development project, Downsview Homes Inc (“DHI”), owned by a subsidiary of UCI, Urbancorp Downsview Park Developments Inc. (“Downsview”). The responding party, Mattamy Homes Limited (“Mattamy”), owned the remaining 49% of DHI.

Mattamy was the lender in a debtor-to-possessor facility (the “DHI Facility”) with Downsview. Downsview was unable to repay its debt, and Mattamy refused to extend the payment deadline unless a sale process was conducted for Downsview’s interest in DHI.

Mattamy and Downsview were also in a payment dispute that arose from a co-ownership agreement. The supervising judge ordered arbitration of the payment dispute. The outcome will have a material impact on the value of Downsview’s interest in the DHI.

Downsview argued before the supervising judge that the sale process for Downsview’s interest be postponed until the payment dispute could be arbitrated. The supervising judge held that the sale process should not be postponed. Downsview sought leave to appeal. Downsview moved for a stay of the sale process until the leave application could be decided.

ISSUES:

(1) Should the motion to stay the sale process pending appeal be granted? a. Is there a serious issue to be determined on appeal? b. Will the moving party suffer irreparable harm if the stay is not granted? c. Does the balance of convenience favour the granting of the stay.

HOLDING:

Motion dismissed.

REASONING:

(1) No.

The test for staying an order pending appeal is set out in RJR-MacDonald Inc. v. Canada (Attorney General): (i) is there a serious issue to be determined on appeal, (ii) will the moving party suffer irreparable harm if the stay is not granted, and (iii) does the balance of convenience favour the granting of the stay?

a. No.

The moving party set out four issues that it characterized as important, both to the parties and to the CCAA as a whole: (i) the level of deference owed by the court to a “Super Monitor”; (ii) the extent to which a Super Monitor needs to obtain independent evidence to support the fairness and viability of a proposed sale process; (iii) whether the evidentiary onus regarding fairness and viability of the sale process remains with the Super Monitor or shifts to the party objecting to the sale process; and (iv) the extent to which a court can rely on a decision that is released after the parties’ hearing.

Additionally, the moving party faces the high hurdle of the standard of review applicable to a decision under the supervising judge in a CCAA proceeding. The weakness of the grounds for appeal as well as the unlikelihood that the moving party will satisfy the other ground of the test for leave to appeal, the moving party is unlikely to obtain leave to appeal. This factor weighed in favour of dismissal. The Court concluded that the first two issues would be arguable however weak, and the latter two issues would be highly unlikely to attract leave.

b.

The question to be determined is whether refusal to grant relief would so adversely affect the moving party’s interests that the harm could not be remedied were the moving party to lose the motion but succeed on the appeal. To question the efficacy of the sale process in order to find irreparable harm to the moving party would be to effectively reverse a factual finding of the supervising judge, contrary to the role of an appellate court on a stay motion.

c. No.

The balance of convenience favoured Mattamy. Determining the balance of convenience requires an inquiry into which of the two parties will suffer the greater harm from granting or refusing the stay. Comparing the potential commercial prejudice to Mattamy from delaying the sale process against what the supervising judge concluded to be an absence of genuine prejudice to the moving party in proceeding with the sale process prior to the conclusion of the arbitration, the balance of convenience favoured Mattamy.


James v. Chedli, 2021 ONCA 593

[Feldman, Paciocco and Coroza JJ.A.]

COUNSEL:

P. Bakos, for the appellant M. R. Kestenberg and A. Hershtal, for the respondents

Keywords: Evidence, Promissory Notes, Limitation, Standard of Review, Bills of Exchange ActEvidence ActReal Property Limitations ActLimitations ActHousen v. Nikolaisen, 2002 SCC 33, [2002] 2 S.C.R. 235, H.L. v. Canada (Attorney General), 2005 SCC 25, [2005] 1. S.C.R. 401, Burns Estate v. Mellon (2000), 48 O.R. (3d) 641 (C.A.), Royal Bank v. Davidson (1972), 25 D.L.R. (3d) (N.S.C.A.), Goss v. Nugent (1833), 5 B & Ad. 58, 110 E.R. 713 (Eng. K.B.), Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200

FACTS:

After the death of a debtor, the creditor made a demand for payment of two outstanding loans made by promissory notes. The debtor’s estate brought a motion for summary judgment. The issue on the respondents’ summary judgment motion was whether those notes had become unenforceable, either because they were statute-barred, or because they had been materially altered without the assent of the borrowers, rendering them void.

The motion judge granted summary judgment in favour of the respondents and dismissed the claims against them. He found that: 1) the first note was not enforceable, either because it had already been paid off in full, or if it had not, then it had been materially altered without the assent of the borrowers and was voided and not enforceable against them; and 2) the second note was not enforceable because it was statute-barred. There was no independent corroboration that it had been consensually converted to a demand note and, because it remained a term note, the action was out of time.

The creditor appealed.

ISSUES:

(1) Did the motion judge err by deciding the motion for summary judgment?

(2) Did the motion judge make an unreasonable inference from the evidence that the first promissory note was repaid by D.C. in November 2006 and the funds re-advanced as a new loan?

(3) Did the motion judge err by finding that s. 144(1) of the Bills of Exchange Act applied and voided the first note as against A.C.?

(4) Did the motion judge err by finding that there was insufficient corroborative evidence that D.C. assented to the amendment of the notes from term notes to demand notes?

HOLDING:

Appeal allowed in part.

REASONING:

(1) No.

The appellant’s real complaint was with the inferences the motion judge drew from the evidence rather than with the summary judgment procedure. The Court held the motion judge was entitled to treat the record as complete and to conclude that it was sufficient to determine the action by way of summary judgement.

(2) Yes.

The Court outlined there was no evidence that either the appellant or D.C. intended to start fresh with a new loan for $500,000. The motion judge put his focus on the word “re-advanced”, which the Court held had no legal significance in determining the intention of the parties. Therefore, the motion judge’s finding that a new loan was issued was unreasonable.

(3) No.

The motion judge did not err, because the first note as against A.C. was materially altered by the appellant in his letter of November 20, 2006 to the Cs. He reduced the principal amount of the note from $531,000 to $500,000, and the timing of the interest payments on the new principal amount. The appellant acknowledged in his testimony that A.C. never gave her assent to this or any subsequent changes to the first note. Therefore, in accordance with s. 144(1) of the Bills of Exchange Act, the first note was void as against A.C. and unenforceable against her.

(4) Yes.

The Court concluded there were two pieces of potentially cogent, independent evidence to corroborate D.C.’s assent to the alteration of the first note. First, the evidence of N.D.L. indicating he spoke with D.C. after the conversion of the note and D.C. expressed his intention to repay both notes. Second, D.C. made a number of payments after the first note was converted, including a $30,000 bank draft of which $25,000 was allocated by the appellant to the loan covered by the first promissory note.

The Court concluded the motion judge misapprehended the evidence and drew an unreasonable inference by failing to find that D.C.’s payment of $30,000 to the appellant after the appellant amended the first note and converted it to a demand note constituted independent corroborative evidence of his assent. Further, N.D.L.’s evidence of his discussions with D.C. was consistent with that conclusion.


Panasonic Eco Solutions Canada Inc. v. XL Specialty Insurance Company, 2021 ONCA 612

[Feldman, Oaciocco, Coroza J.A]

COUNSEL:

Anthony H. Gatensby and W. Colin Empke for the appellant J. Brown and C.J. Micucci for the respondent

Keywords: Keywords: Contracts, Interpretation, Insurance, Professional Errors and Omissions, Coverage, Duty to Defend, Standard of Review, Non-Marine UnderwritersLloyd’s of London v. Scalera, 2000 SCC 24, Central Trust Co. v. Rafuse, [1986] 2 S.C.R. 147; B.G. Checo International Ltd. v. British Columba Hydro and Power Authority, [1993] 1 S.C.R. 12, Winnipeg Condominium Corporation No. 36 v. Bird Construction Co., [1995] 1 S.C.R. 85, Crum & Forster Specialty Insurance Company v. DVOInc., 939 F. (3d) 852 (7th Cir. Ct. App. 2019), Cabell v. The Personal Insurance Company, 2011 ONCA 105, Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC

FACTS:

The issue on appeal was whether the appellant insurer, XL Specialty Insurance Company, has a duty to defend its insured, the respondent Panasonic Eco Solutions Canada Inc., against two claims of breach of contract brought against Panasonic by a group of companies collectively operating as Solar Flow-Through Fund (“Solar”) in an arbitration proceeding. The insurance policy was a professional errors and omissions policy that excludes contractual liability claims unless the insured would have had the liability in the absence of the contract.

The XL policy insuring Panasonic is an errors and omissions policy, formally named a Professional and Contractor’s Pollution Legal Liability Policy. The policy covers monetary judgments that Panasonic becomes legally obligated to pay because of a claim “resulting from an act, error or omission in Professional Services”. XL agreed that Solar’s claim arises from the delivery of professional services.

The application judge referred to the principle that where the pleadings are imprecise, “the insurer’s obligation to defend will be triggered where, on a reasonable reading of the pleadings, a claim within coverage can be inferred”: Monenco.

The application judge was unable to determine on the record before him whether the damages Solar sought were attributable to negligence by Panasonic or to circumstances beyond Panasonic’s control. He presumed that this may be one of the issues in the underlying arbitration. The application judge noted, as an aside, that if it turned out that the delay was due to deliberate acts or omissions by Panasonic, as opposed to negligence, then there would be no coverage.

The application judge held that XL has a duty to defend on of the claims but not the other. The application judge concluded that Panasonic’s liability under the Proceeds Agreement was in effect a debt claim that arose under the contract and could not come within the exception to the exclusion. He also rejected the efficacy of the negligent misrepresentation and unjust enrichment claims. The negligent misrepresentation claim was based on representations by Panasonic that it would pay under the agreement, and was therefore based solely on Panasonic’s breach of the Proceeds Agreement by failing to make payments under it. The application judge further found that the unjust enrichment claim was excluded under the policy because the policy does not cover claims for equitable remedies.

XL appealed and Panasonic cross-appealed.

ISSUES:

(1) What is the standard of review?

(2) What are the principles of interpretation and application of insurance policies?

(3) What is the proper interpretation of the exclusion clause?

(4) Does Solar’s claim under the Engineering Agreement give rise to a duty on XL to defend the claim?

(5) Does Solar’s claim under the Proceeds Agreement give rise to a duty on XL to defend the claim?

HOLDING:

Appeal allowed. Cross-appeal dismissed.

REASONING:

(1) Correctness.

As per Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, the standard of review for the interpretation of a standard form policy of insurance is correctness.

(2)

The Court reiterated that the principles governing the duty to defend were articulated in the Supreme Court of Canada’s decision, Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49 as follows: The duty to defend is triggered by the pleading by the claimant against the insured; the insurer has a duty to defend if the facts alleged in the pleading would, if true, require the insurer to defend; the duty to defend is broader than the duty to indemnify; pleadings are interpreted broadly; any doubt is resolved in favour of the insured; and the court should determine the substance of the claim rather than the legal label.

The Court followed and summarized the general principles of policy interpretation in the Supreme Court of Canada’s decision, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, as follows: If the language of the policy is unambiguous, the court should give effect to clear language, reading the contract as a whole; if the language of the insurance policy is ambiguous, the general rules of contract construction should be relied upon; courts should prefer interpretations that are consistent with the reasonable expectations of the parties. If the rules of construction fail to resolve the ambiguity, courts will construe the policy contra proferentum – against the insurer.

(3)

The meaning of the exception clause is that the policy continues to cover professional losses caused by the insured in performing its professional functions in its relationship with the claimant that arise in law, regardless of the terms of their contract. These would include liability for losses that third parties may suffer as a result of an insured’s negligence in performing the professional services contract, as well as liability to the claimant for negligence in performing the contractual obligations under the doctrine of concurrent liability in contract and tort. The interpretation makes sense from the point of view of both the insured and the insurer, and gives effect to both their reasonable expectations, in light of the purpose of the professional errors and omissions insurance contract. The insurer will be responsible for the losses caused by the insured’s negligent performance of its professional obligations; but the insurer will not indemnify the insured for any extra obligations it undertakes in a contract, or for the breach of any extra obligations that it undertakes in a contract.

(4) No.

The claim does not give rise to a duty to defend under the Proceeds Agreement. The exclusion excludes coverage for liability arising from breach of contract, and the exception does not apply because the obligation to pay liquidated damages is purely contractual and does not otherwise arise. A liquidated damages clause demonstrates the fairness of the contractual exclusion and exception clause of the insuring agreement when it is interpreted in accordance with the reasonable expectations of the parties to that agreement.

The trial judge erred in law in his application of the test for determining the duty to defend by failing to apply the exclusion and the exception to the exclusion in his analysis of the liquidated damages clause.

(5) No.

The claim does not give rise to a duty to defend under the Proceeds Agreement. The Court found the claim under the Proceeds Agreement is essentially a debt owing and arises under the contract. Panasonic’s liability under the Proceeds Agreement arose out of its assumption of liability under a contract and out of its breach or contract, falling squarely within the contractual exclusion. The claim could not come within the exception because Panasonic would not have had the liability to Solar to pay it following the sale of the projects, except under the contract. There would be no claim without the contract. Therefore, if the claim came within the coverage under the policy, it is excluded by contractual liability exclusion clause, and it is not saved by the exception to the exclusion.

The claims for negligent misrepresentation and unjust enrichment do not give rise to a duty to defend. The negligent misrepresentation alleged against Panasonic is that it misled Solar into working on the promise that it would be paid under the Proceeds Agreement. This was solely based on Panasonic’s failure to make payments under the Proceeds Agreement, in breach of the contract. The contractual liability exclusion was triggered, and the exception to the exclusion did not apply. Unjust enrichment is an equitable claim that is specifically not compensable under the XL insurance policy.


SHORT CIVIL DECISIONS

Tanti v. Tanti, 2021 ONCA 607

[Strathy C.J.O., Lauwers and Sossin JJ.A.]

COUNSEL:

J. Nwawe, for the moving party W.R. Gilmour, for the responding party K. Kinch, for the responding party

Keywords: Family Law, Civil Procedure, Appeals

Dunn Aggregates Limited v. Coco Paving Inc., 2021 ONCA 604

[Juriansz, Lauwers and Sossin JJ.A.]

COUNSEL:

J. Ball, for the appellant J. Leslie & T. Kalnins, for the respondent

Keywords: Contracts, Asset Purchase Agreement, Restrictive Covenants, Civil Procedure, Interlocutory Injunctions, Undertaking in Damages, Costs, Rules of Civil Procedure, Rule 40.03, United States of America v. Yemec, 2013 ONSC 50, 35 C.P.C. (7th) 57, aff’d 2014 ONCA 274

Alajajian v. Alajajian, 2021 ONCA 602

[Juriansz, Lauwers and Sossin JJ.A.]

COUNSEL:

E. Birnboim, for the appellant D.Z. Frodis, for the respondent

Keywords: Family Law, Property, Spousal Support, Standard of Review, Costs

Florovski v. Florovski, 2021 ONCA 606

[Strathy C.J.O., Lauwers and Sossin JJ.A.]

COUNSEL:

F. Yehia and G. Pop-Lazic, for the appellant C. Doris and S. Bunting, for the respondent

Keywords: Family Law, Disclosure