Good evening.

It was another busy week for the Court of Appeal of Ontario. Here are this week’s summaries of the civil decisions released for the week of July 18, 2022.

Irwin v. Protiviti, is an employment law case in which the employee brought an action against its employer for constructive dismissal.  The employee ignored the terms of her employment contract which provided that disputes of this nature were to be submitted to arbitration. The motion judge agreed with the employer that the dispute fell within the jurisdiction of the arbitrator in interpreting the employment contract’s arbitration clause.  The action was stayed in favour of arbitration. The plaintiff appealed.  The Court agreed with the motion judge and confirmed the general rule that challenges to an arbitrator’s jurisdiction must be resolved first by the arbitrator.

In Wong v Pretium Resources Inc., the Court was faced with a securities law issue involving a possible misrepresentation through an omission of material fact in Pretium’s disclosure obligations to the public under securities law. The Court dismissed the appeal from a summary judgment dismissing the action on the basis that the concerns expressed by a firm retained by Pretium to advise on its mining project did not constitute a material fact and, therefore, there was no misrepresentation by omission when Pretium did not make the consultant’s opinion known to the market. The motion judge concluded that the consultant’s advice was wrong, and therefore it was not material information that required disclosure. The Court found no palpable and overriding error with the motion judge’s factual findings warranting appellate intervention.

In Ferguson v. Ferguson, the Court dismissed the appeal in a family law case that proceeded by way of an uncontested trial after the appellant’s pleading had been struck for failure to comply with his disclosure obligations.

In Blackwell v. Genier, the appellants owned land at the bottom of Silver Lake, and tried to prevent others from navigating the waters over the submerged land that they owned. The Court held that the application judge erred in finding that the definition of “navigable waters” in the CNWA applied to the dispute. The Court allowed the appeal but did not decide the issue of whether the appellants had the right to prevent others from navigating their vessels on water under which they owned the land. The issues had not been properly framed, and the case is of significance to a great many landowners and the Crown in Ontario. The Court did not have the benefit of submissions from the Crown and other stakeholders. The appellants were therefore given the opportunity to recast the issues and involve other affected stakeholders.  In dissent, Paciocco J.A. agreed with the majority that the application judge had erred, but he would have dismissed the appeal and action, and not given the appellants the right to recast their claims and the issues.

Table of Contents

Civil Decisions

Irwin v. Protiviti, 2022 ONCA 533

Keywords: Contracts, Employment, Constructive Dismissal, Arbitration Clauses, Enforceability, Unconscionability, Civil Procedure, Jurisdiction, Procedural Fairness, Employment Standards Act, 2000, S.O. 2000, c. 41, Human Rights Code, R.S.O. 1990, c. H.19, Arbitration Act, 1991, S.O. 1991, c. 17, s. 7(1), s. 7(2)(2), s. 7(6), s. 17(1), Haas v. Gunasekaram, 2016 ONCA 744, Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, Uber Technologies Inc. v. Heller, 2020 SCC 16, Rogers Wireless Inc. v. Muroff, 2007 SCC 35

Blackwell v. Genier , 2022 ONCA 539

Keywords: Real Property, Boundaries, Riparian Rights, Statutory Interpretation, Canadian Navigable Waters Act, R.S.C. 1985, c. N-22 [the “CNWA”], Beds of Navigable Waters Act, R.S.O. 1990, c. B-4 [the “BNWA”], Public Lands Act, R.S.O. 1990, c. P.43, Courts of Justice Act, R.S.O. 1990, c. C.43, Attorney-General of Canada v. Higbie, [1945] S.C.R. 385, Erik v. McDonald, 2019 ABCA 217, Victorian Townhomes (Burlington) II Limited Partnership v. Mutual Trust Co., [1995] O.J. No. 1844 (C.A.), Solosky v. The Queen, [1980] 1 S.C.R. 821, Daniels v. Canada (Indian Affairs and Northern Development), 2016 SCC 12, Middlesex Centre (Municipality) v. MacMillan, 2016 ONCA 475, Canoe Ontario v. Reed (1989), 69 O.R. (2d) 494 (Ont. H.C.), Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, Interpretation Act, R.S.C. 1985, c. I-21, Wilk v. Arbour, 2017 ONCA 21, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Hrushka v. Canada (Minister of Foreign Affairs), 2009 FC 69, 340 F.T.R. 81, Friends of the Oldman River Society v. Canada (Ministry of Transport), [1992] 1 S.C.R. 3,  R. v. D.L.W., 2016 SCC 22, Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, Canada (Prime Minister) v. Khadr, 2010 SCC 33, Attorney-General of Canada v. Higbie, [1945] S.C.R. 385, Kourtessis v. M.N.R., [1993] 2 S.C.R. 53, Ruth Sullivan, The Construction of Statutes, 7th ed. (Toronto: LexisNexis, 2022)

Unicity Holdings Ltd. v. Great British Vape Co., 2022 ONCA 545

Keywords: Contracts, Interpretation, Franchise Agreements, Settlement Agreements, Intellectual Property, Trademarks

Wong v. Pretium Resources Inc., 2022 ONCA 549

Keywords: Securities Law, Misrepresentation, Material Facts, Civil Procedure, Class Proceedings, Summary Judgment, Appeals, Standard of Review, Securities Act, RSO 1990, c S 5, s 1(1), 138.3, 138.8, 138.4(6), Real Estate Act, RSBC 1996, c., 397, s 75, Sharbern Holding Inc. v Vancouver Airport Centre Ltd., 2011 SCC 23, Inmet Mining Corp. v Homestake Canada Inc., 2003 BCCA 610, Amirault v Westminer Canada Ltd. (1993), 120 NSR. (2d) 91, Housen v Nikolaisen, 2002 SCC 33, Mask v Silvercorp Metals Inc., 2016 ONCA 641, A.M. Gold Inc. v Kaizen Discovery Inc., 2022 BCCA 21, Industries Inc. v. Northway Inc., 426 U.S. 438 (1976), Kerr v Danier Leather Inc., 2007 SCC 44, Peters v SNC-Lavalin Group Inc., 2021 ONSC 5021, Cornish v Ontario Securities Commission, 2013 ONSC 1310, Pacific Coast Coin Exchange of Canada Ltd. v. Ontario (Securities Commission), [1978] 2 SCR 112, Theratechnologies Inc. v 121851 Canada Inc., 2015 SCC 18, Rahimi v SouthGobi Resources Ltd., 2017 ONCA 719, Maurice v. Alles, 2016 ONCA 287, Meridian Credit Union Ltd. v. Baig, 2016 ONCA 150, Harris v. Leikin Group Inc., 2014 ONCA 479, Miller v. FSD Pharma, Inc., 2020 ONSC 4054

Ferguson v. Ferguson , 2022 ONCA 543

Keywords: Family Law, Support, Imputing Income, Property, Equalization of Net Family Property, Vesting Orders, Matrimonial Home, Civil Procedure, Disclosure, Striking Pleadings, Uncontested Trials, Sufficiency of Reasons, Family Law Rules, O. Reg. 114/99, rr 1(8), 1(8.1), 2(3), & 13, Martin v. Watts, 2020 ONCA 406, Kovachis v. Kovachis, 2013 ONCA 663, Canada in Colucci v. Colucci, 2021 SCC 24, R. v. W.O., 2020 ONCA 392, Dovbush v. Mouzitchka, 2016 ONCA 381, R. v. Sheppard, 2002 SCC 26

Short Civil Decisions

Paul v. Madawaska Valley (Township), 2022 ONCA 542

Keywords: Costs

Leaf Homes Limited v. Khan , 2022 ONCA 547

Keywords: Costs

Aquino v. Aquino , 2022 ONCA 541

Keywords: Civil Procedure, Publication Bans, Sealing Orders, Appeals, Jurisdiction, Orders, Final or Interlocutory, Bankruptcy and Insolvency Act, 1985, c. B-3, Companies’ Creditors Arrangement Act, 1985, c. C-36, Courts of Justice Act, s. 6(1), Paulpillai Estate v. Yusuf, 2020 ONCA 655, PI v XYZ, 2021 ONCA 901

1775997 Ontario Inc. v. Jodamar Properties Ltd, 2022 ONCA 540

Keywords: Contracts, Real Property, Construction, Delay, Damages, Interest, Civil Procedure, Appeals

Liu v. Qiu , 2022 ONCA 544

Keywords: Civil Procedure, Orders, Varying or Setting Aside, Rules of Civil Procedure, Rules 37.14, 59.06

Ledsham v. Air Canada Pilots Association , 2022 ONCA 550

Keywords: Civil Procedure, Orders, Varying or Setting Aside, Arbitration Awards, Frivolous, Vexatious, Abuse of Process, Rules of Civil Procedure, Rule 2.1, Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733

Galt Machining & Plating Inc. v. MLS Group Ltd., 2022 ONCA 546

Keywords: Contracts, Real Property, Commercial Leases, Contracts, Agreements of Purchase and Sale of Land, Unlawful Termination, Repudiation, Place Concorde East Ltd. Partnership v. Shelter Corp. of Canada (2006), 270 D.L.R. (4th) 181 (Ont. C.A.)

2257573 Ontario Inc. v. Furney , 2022 ONCA 552

Keywords: Contracts, Real Property, Civil Procedure, Appeals, Costs


CIVIL DECISIONS

Irwin v. Protiviti, 2022 ONCA 533

[Benotto, Miller and Copeland JJ.A.]

COUNSEL:

C. Foulon, K. Kais-Prial and B. Hassibi, for the appellant

J. D. Heeney and J. Burke, for the respondents

Keywords: Contracts, Employment, Constructive Dismissal, Arbitration Clauses, Enforceability, Unconscionability, Civil Procedure, Jurisdiction, Procedural Fairness, Employment Standards Act, 2000, S.O. 2000, c. 41, Human Rights Code, R.S.O. 1990, c. H.19, Arbitration Act, 1991, S.O. 1991, c. 17, s. 7(1), s. 7(2)(2), s. 7(6), s. 17(1), Haas v. Gunasekaram, 2016 ONCA 744, Dell Computer Corp. v. Union des consommateurs, 2007 SCC 34, Uber Technologies Inc. v. Heller, 2020 SCC 16, Rogers Wireless Inc. v. Muroff, 2007 SCC 35

FACTS:

The appellant brought an action against the respondent for constructive dismissal notwithstanding that the  employment contract required the appellant to bring any claim relating to termination to arbitration The arbitration clause further provided that awards of cost and punitive damages would not be available in arbitration.

The respondent responded to the appellant’s claim by bringing a motion to stay the action so the dispute could be referred to arbitration. The appellant defended against the motion on the basis that the arbitration clause was invalid due to unconscionability and for inconsistency with the Employment Standards Act (“ESA”) and the Human Rights Code (“HRC”).

The appellant appealed the decision of the motion judge who held that the validity of the arbitration clause was itself a matter for arbitration and stayed the action under s. 7(1) of the Arbitration Act.

ISSUES:

(1) Was the appellant denied procedural fairness before the motion judge?

(2) Did the motion judge err by declining to determine the validity of the arbitration clause?

HOLDING:

Appeal dismissed.

REASONING:

(1) No.

The appellant argued that she was unaware that the motion judge was contemplating referring the question of the arbitration clause’s validity to arbitration, and therefore was unable to make meaningful submissions on the issue. The Court rejected this argument and found that the appellant was on notice that jurisdiction was an issue, as the respondents took the position in their factum on the motion that the Court should defer to the arbitrator on the issue of the arbitrator’s jurisdiction.

The respondent argued that the Court lacked jurisdiction to hear the appeal. The motion judge granted the stay relying on s. 7(1) of the Arbitration Act, which provides that a Court shall stay proceedings if a party to an arbitration agreement commences proceedings in respect of a matter that the arbitration agreement requires to be submitted to arbitration. Priority granted to arbitration by the legislative scheme is reinforced by s. 17(1).

The motion judge also noted the exception in s. 7(2)(2) of the Arbitration Act that grants the court the discretion to refuse to stay a proceeding where the arbitration agreement is invalid. The motion judge did not refuse to stay the proceeding, holding that the statute and the jurisprudence established that the determination of the validity of the arbitration clause was within the jurisdiction of the arbitral tribunal.

(2) No.

The appellant argued the motion judge was required to decide whether the arbitration clause was invalid due to unconscionability or inconsistency with the ESA or HRC. The Court disagreed. The motion judge was permitted to leave the issue with the arbitrator as contemplated by s. 17(1), and was not obligated to provide reasons justifying the decision. The general rule in Dell Computer Corp v. Union des consommateurs, was that in any case involving an arbitration clause, a challenge to the arbitrator’s jurisdiction must be resolved first by the arbitrator. A Court has the discretion to decide otherwise, but only where the jurisdictional question is based on a pure question of law, or of mixed fact and law requiring not more than a superficial consideration of evidence.

The appellant’s argument that it was unconscionable for an arbitration clause to exclude potential awards of punitive damages or costs required a “probing factual inquiry”. Whether the arbitration clause ought to be found void for unconscionability could therefore not be determined by a superficial consideration of the evidence.

The Court held that given that the unconscionability question had to be resolved by arbitration, it would make little sense to bifurcate the proceedings and have the remaining questions resolved by the motion judge.


Blackwell v. Genier , 2022 ONCA 539

[Lauwers, Benotto and Paciocco JJ.A.]

COUNSEL:

N. Abraham, for the appellants

G. Wainwright and J. Wainwright, for the respondents RG, JG, HV and MV

NN, acting in person

No one appearing for the respondents BB and NS

Keywords: Real Property, Boundaries, Riparian Rights, Statutory Interpretation, Canadian Navigable Waters Act, R.S.C. 1985, c. N-22 [the “CNWA”], Beds of Navigable Waters Act, R.S.O. 1990, c. B-4 [the “BNWA”], Public Lands Act, R.S.O. 1990, c. P.43, Courts of Justice Act, R.S.O. 1990, c. C.43, Attorney-General of Canada v. Higbie, [1945] S.C.R. 385, Erik v. McDonald, 2019 ABCA 217, Victorian Townhomes (Burlington) II Limited Partnership v. Mutual Trust Co., [1995] O.J. No. 1844 (C.A.), Solosky v. The Queen, [1980] 1 S.C.R. 821, Daniels v. Canada (Indian Affairs and Northern Development), 2016 SCC 12, Middlesex Centre (Municipality) v. MacMillan, 2016 ONCA 475, Canoe Ontario v. Reed (1989), 69 O.R. (2d) 494 (Ont. H.C.), Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, Interpretation Act, R.S.C. 1985, c. I-21, Wilk v. Arbour, 2017 ONCA 21, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Hrushka v. Canada (Minister of Foreign Affairs), 2009 FC 69, 340 F.T.R. 81, Friends of the Oldman River Society v. Canada (Ministry of Transport), [1992] 1 S.C.R. 3,  R. v. D.L.W., 2016 SCC 22, Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, Canada (Prime Minister) v. Khadr, 2010 SCC 33, Attorney-General of Canada v. Higbie, [1945] S.C.R. 385, Kourtessis v. M.N.R., [1993] 2 S.C.R. 53, Ruth Sullivan, The Construction of Statutes, 7th ed. (Toronto: LexisNexis, 2022)

FACTS:

The appellants are cottage owners who own most of the bed of Silver Lake. They claim that their ownership empowers them to prevent other cottage owners and members of the public from navigating vessels on the water above “their portion” of the lakebed. When other cottage owners began to jet ski on the lake, the appellants attempted unsuccessfully to prevent this activity by asserting their ownership over the majority of the lakebed. This issue divided the cottage owners.

The appellants initiated an application against the respondent cottage owners who oppose the appellants’ claimed right to control navigation on most of Silver Lake. During the application hearing, the appellants requested a declaration that they are the owners and occupiers of their respective portions of the bed of Silver Lake and that the respondents and the public are prohibited from entering their property without express permission. The application judge dismissed the application, ruling that Silver Lake is navigable water pursuant to the definition of “navigable water” in s. 2 of the Canadian Navigable Waters Act, R.S.C. 1985, c. N-22 [the “CNWA”].

ISSUES:

(1) Did the application judge err in finding that the CNWA definition of navigable water applies?

(2) Should the appeal be allowed and the declaration be granted?

HOLDING:

Appeal allowed.

REASONING:

Lauwers J.A (M.L. Benotto J.A Concurring)

 (1) Yes

The application judge erred in applying the definition of “navigable water” in s. 2 of the CNWA to resolve a dispute over the effect of lakebed property rights on navigation on the waters of Silver Lake.

(2) Yes

Despite allowing the appeal, the Court held that there were several reasons for why it would not be appropriate to make the declaration sought by the appellants that Silver Lake is non-navigable water within the meaning of the Beds of Navigable Waters Act, R.S.O. 1990, c. B-4 [the “BNWA”].

(1) there are likely hundreds, if not thousands, of lakes in Ontario similar to Silver Lake, with riparian landowners and owners of lakebeds, many engaging the interests of the Crown. Arcane and ancient common law intersects with federal and provincial legislation. A final decision in this case would have far-reaching implications. This is a case in which judicial minimalism is warranted. The Court does not have before it representatives of the affected interests, nor is the Government of Ontario present.

(2) the application judge did not address the issue of Silver Lake’s navigability within the meaning of the BNWA, and how it might be related to the appellants’ property interests. Because the application judge did not resolve the factual issues required to make the legal determinations flowing from an interpretation of the BNWA, there is no basis on which the appeal court could do so.

(3) s. 1 of the BNWA, on which the appellants rely, appears to be a provision for interpreting Crown grants and, perforce, title that flows from Crown grants. The appellants seek to enlist the legislation to serve a purpose for which it was not intended. The Court would benefit from the intervention of the Crown on the proper interpretation and application of the statute.

(4) Exclusive control over the waters of Silver Lake that the appellants seek would not likely flow from s. 1 of the BNWA but from the common law, if at all. The declaration sought by the appellants would serve no purpose and would not resolve the live issue, which the application judge identified as “whether the appellants can prevent the respondents from navigating on water that sits above the lakebed property that they own”. Additionally, any determination of right must also account for the rights of riparian owners, whose rights of access to the water of Silver Lake were not fully litigated. The application of the common law was not fully argued on either the property rights of the owners of lake bottoms or the rights of riparian owners. The parties did not refer to the authorities of Attorney-General of Canada v. Higbie, [1945] S.C.R. 385, at pp. 417-418, and Erik v. McDonald, 2019 ABCA 217, 4 R.P.R. (6th) 8, nor did they offer arguments of similar cogency.

(5) The Court heard no argument on the proper interpretation and application of s. 37.4 of the Public Lands Act, R.S.O. 1990, c. P.43, which appears to be relevant. It provides:

37.4 (1) A Crown transfer is subject to the reservations and conditions set out in this section.

[…]

(4) The free use, passage and enjoyment of, in, over and upon all navigable waters found on or under, or flowing through or upon, any part of the lands that are the subject of a Crown transfer is reserved to the Crown.

The Court would benefit from the intervention of the Crown on the proper interpretation and application of this provision and of the impact of the common law on all the issues.

Paciocco J.A. (dissenting):

Holding:

Appeal dismissed.

Reasoning:

(1) Yes

The application judge misapplied the Bell ExpressVu principles in interpreting s. 2 of the CNWA for the following reasons:

(1) When applying the Bell ExpressVu principles, the application judge failed to consider the “context in which the words are found”: Wilk v. Arbour, 2017 ONCA 21 at para. 20. The words the application judge relied upon are found in the definition section of the CNWA, not in any statutory provisions that purport to address the issue. The application judge erred by using a definition provision adopted within the CNWA to resolve a dispute that is not governed by any of the provisions of that statute.

(2) The application judge mischaracterized the purpose of the CNWA by concluding that “Parliament intended to protect the navigation rights of Canadians on more bodies of water by adopting a new and more comprehensive definition of ‘navigable water’”. This characterization is far too general. The CNWA has a dedicated and narrower purpose.

The application judge mistakenly treated Parliament’s intention to expand the definition of navigable waters for the purpose of the CNWA as though it was a general Parliamentary intention to expand the definition of navigable waters for all navigation disputes. There was no basis for interpreting Parliament’s intention this broadly.

(3) The application judge erred in concluding that a fair, large and liberal interpretation requires the CNWA’s definition of navigable water to “be used in any legal proceeding that may affect, restrict or interfere with the navigation rights of Canadians”. There are no relevant provisions in the CNWA addressing navigation generally or in the context of property-based disputes that can be given a large and liberal interpretation.

(4) There is nothing in s. 2 of the CNWA to rebut the presumption and to support the application judge’s conclusion that “the definition of ‘navigable water’ [in s. 2 of the CNWA] must […] be used [in place of the common law definition] in any legal proceeding that may affect, restrict or interfere with the navigation rights of Canadians”. If Parliament intended to give the CNWA such reach, it would have said so.

(2) No

The appeal should be dismissed pursuant to s. 134(6) of the Courts of Justice Act, R.S.O. 1990, c. C.43, which directs the Court not to order a new hearing unless some substantial wrong or miscarriage of justice has occurred. In Paciocco J.A.’s view, no substantial wrong or miscarriage of justice occurred as a result of the application judge’s error because it is not possible as a matter of law to grant the declaration the appellants are now seeking. The action should be dismissed because the relief the appellants now request in this action is not available.

It would be unfair to the respondents to permit the appellants “to bring a fresh application that addresses the numerous deficiencies in this application”. The appellants should not be permitted to reframe their action to seek broader relief than they sought before.

Although there is a live controversy as to whether the appellants can prevent the respondents from navigating on water that sits above the lakebed property that they own, it is not clear that a declaration that Silver Lake is non-navigable water within the meaning of the BNWA could settle this controversy for the following reasons:

(1) the BNWA is a provincial enactment that contains provisions relating to when the bed of navigable water has been granted by the Crown. It has no provisions that address whether those who do have title to beds of navigable or non-navigable water have the legal right to control whether vessels can travel on the water above those beds. Technically, the common law governs this dispute, not the BNWA.

(2) Even if factually available, a declaration that Silver Lake is non‑navigable at common law would not settle the live controversy between the parties as to whether the appellants can lawfully prevent others from traveling in vessels on the water above the portion of the lakebed they own because there is authority recognizing that riparian rights are separate from the right to possession and ownership of land covered by water.


Unicity Holdings Ltd. v. Great British Vape Co., 2022 ONCA 545

[Benotto, Zarnett and Thorburn JJ.A.]

COUNSEL:

P. Bates and W. X. Navarrete, for the appellants

R. Botiuk, for the respondents

Keywords: Contracts, Interpretation, Franchise Agreements, Settlement Agreements, Intellectual Property, Trademarks

FACTS:

The appellants operated “Signature Vape” store franchises in several cities in Ontario. The stores sold vaping equipment and cannabis accessories. The respondents were collectively a former franchisee and principal of a Signature Vape store in Windsor, Ontario.

The parties entered into a franchise agreement on September 13, 2020, which terminated on January 31, 2021. Thereafter, they mediated their dispute and entered into Minutes of Settlement. Pursuant to the Minutes of Settlement, the appellants were to pay the respondents $100,000 upon fulfillment of certain conditions. Under a separate provision of the Minutes of Settlement the respondents promised to cease “using any and all designs, branding or marks used by Signature Vape”. The appellants claimed that the respondents did not comply with that obligation and refused to pay the $100,000 to the respondents. The application judge held that the respondents were entitled to the $100,000 as they did not breach the terms of the Minutes of Settlement. The appellants relied on two recitals and paragraph 27(c) of the Franchise Agreement in support of their claim that the respondents were in breach of the terms of the Minutes of Settlement. The appellants also claimed that the respondents were required, pursuant to sections 11 and 12 of the Minutes of Settlement, to “immediately cease using any and all designs, branding or marks used by Signature Vape” and “not use the chandelier lighting fixture in the Windsor store as it has become an identifying feature of the Signature Vape system.”

The appellants claimed the application judge failed to consider provisions in the Franchise Agreement specifying what designs, marks and branding were not to be used by the respondents

ISSUES:

Did the application judge err by failing to consider provisions in the Franchise Agreement which led to an inaccurate interpretation of the Minutes of Settlement requiring the appellants to pay the respondents?

HOLDING:

Appeal dismissed.

REASONING:

No.

The application judge reviewed the distinguishing features of both franchise outlets to compare the designs, branding and marks. The application judge looked at the distinctive features of the respondents’ store that differed from those in the appellants’ stores: the different colour of the walls, the fact that the distinctive chandelier found in the appellants’ store was never installed by the respondents in their store, the new Union Jack emblems and designs affixed to the respondents’ floors and black display cases, and the addition of tri-colour stripes along the entire perimeter of the respondents’ floor. He also noted that although the grey tiles and black glossy display cabinets remained, they appeared different with the addition of the Union Jack emblems and designs. He compared photographs of the two establishments.

The real issue was whether the grey floor tiles and the black, glossy display cases were design features that made Signature Vape stores so distinctive that the respondents’ store could not be distinguished from them.

The application judge determined that the overall impression is similar as the products and businesses are similar; but the branding details are different, and consumers are certainly able to distinguish the brands.

Nothing in the Minutes of Settlement permitted the appellant to attempt to enforce its view of the branding issue by withholding the $100,000 payment provided for in the Minutes of Settlement. The application judge also concluded that regardless of the accuracy of the appellants’ position on the branding issue, the obligation to pay the $100,000 was subject to specific conditions which had been fulfilled. The appellants must pay the $100,000 to the respondents in accordance with the terms of the Settlement Agreement.

The Court saw no error in the application judge’s interpretation of the Minutes of Settlement and the Franchise Agreement. The Court also noted that, although the appellants were represented by counsel, neither the Franchise Agreement nor the Minutes of Settlement contained a list of objects, designs, branding or marks for which the appellants claimed a proprietary interest. As the application judge noted, after comparing and contrasting the two stores and their appearance, the respondents were not using the appellants’ proprietary designs, branding or marks, and the design of London Vape store was sufficiently distinct from that of Signature Vape stores that no customer would be confused into thinking the respondents’ outlet was associated with the appellants’ stores.


Wong v. Pretium Resources Inc., 2022 ONCA 549

[van Rensburg and Roberts JJ.A. and Tzimas J. (ad hoc)]

COUNSEL:

M. Spencer, A. Morganti, A. Pelletier and C. K.B. Harman, for the appellant H.

M. Rosenberg and A. D. G, Iarusso, for the respondents

Keywords: Securities Law, Misrepresentation, Material Facts, Civil Procedure, Class Proceedings, Summary Judgment, Appeals, Standard of Review, Securities Act, RSO 1990, c S 5, s 1(1), 138.3, 138.8, 138.4(6), Real Estate Act, RSBC 1996, c., 397, s 75, Sharbern Holding Inc. v Vancouver Airport Centre Ltd., 2011 SCC 23, Inmet Mining Corp. v Homestake Canada Inc., 2003 BCCA 610, Amirault v Westminer Canada Ltd. (1993), 120 NSR. (2d) 91, Housen v Nikolaisen, 2002 SCC 33, Mask v Silvercorp Metals Inc., 2016 ONCA 641, A.M. Gold Inc. v Kaizen Discovery Inc., 2022 BCCA 21, Industries Inc. v. Northway Inc., 426 U.S. 438 (1976), Kerr v Danier Leather Inc., 2007 SCC 44, Peters v SNC-Lavalin Group Inc., 2021 ONSC 5021, Cornish v Ontario Securities Commission, 2013 ONSC 1310, Pacific Coast Coin Exchange of Canada Ltd. v. Ontario (Securities Commission), [1978] 2 SCR 112, Theratechnologies Inc. v 121851 Canada Inc., 2015 SCC 18, Rahimi v SouthGobi Resources Ltd., 2017 ONCA 719, Maurice v. Alles, 2016 ONCA 287, Meridian Credit Union Ltd. v. Baig, 2016 ONCA 150, Harris v. Leikin Group Inc., 2014 ONCA 479, Miller v. FSD Pharma, Inc., 2020 ONSC 4054

FACTS:

The appellant was the representative plaintiff in a common law and statutory secondary market misrepresentation class action. The respondents were Pretium Resources Inc. (“Pretium”), a mineral exploration company and its former CEO.

The appellant asserted that the respondents failed to publicly disclose concerns about Pretium’s Brucejack mining project in northwestern British Columbia that had been conveyed to Pretium in writing by Strathcona Mineral Services Ltd. (“Strathcona”), a mining expert retained by Pretium. .

When Pretium issued news releases disclosing the resignation, and later, the reasons for Strathcona’s resignation, its stock price fell by over half. The appellants brought an action claiming  common law and statutory (under s. 138.3 of the Securities Act, the “OSA”) misrepresentations by omission in Pretium’s continuing disclosure: the failure of the respondents to disclose the alleged material facts in its public disclosure documents.

At the heart of the litigation was a disagreement between Pretium and Strathcona about the accuracy and reliability of the Resource Estimate, and in turn, the predictions in the Feasibility Study, based on Strathcona’s observations during its work on the Bulk Sample Program (BSP). Strathcona, based on the assays of the samples processed at the sample tower, and before the entire bulk sample had been excavated, milled and tested, expressed the view that the Feasibility Study was premised on inaccurate and unreliable information, and urged Pretium to make certain disclosures. Pretium disagreed, countering that that the disclosures proposed by Strathcona would be inappropriate.

The motion judge stated that Pretium was “under no obligation to disclose bad and misleading information. As such, there was no omission of any material fact” and “[b]y any objective measure, Pretium was not obliged to publicly disclose information that was premature, unreliable and ‘dead wrong’ – these were not material facts that would assist a reasonable investor in making an informed investment decision”. The motion judge therefore granted the respondents’ motion for summary judgment and dismissed the action.

The appellant submitted that the motion judge erred in concluding that failure to disclose Strathcona’s concerns was not a misrepresentation by omission of a material fact.

ISSUES:

(1) Should the review be on a palpable and overriding error standard?

(2) Were the concerns expressed by Strathcona a material fact whose omission constituted misrepresentation?

HOLDING:

Appeal dismissed.

REASONING:

(1) Yes.

Typically, whether a defendant made a misrepresentation by the omission of a material fact is a question of mixed fact and law, and subject to a palpable and overriding error standard of review. To the extent that an extricable legal issue is identified, the standard of review is correctness. However, absent an error in the legal standard, the motion judge’s determination that there was no omission of a material fact was subject to deference, and to review on a palpable and overriding error standard.

(2) No.

In the present case it was not alleged that Strathcona’s concerns were a material fact that was “required to be stated”. Rather, the allegation was that Pretium made a misrepresentation by omission of a “material fact that [was]… necessary to make a statement not misleading in the light of the circumstances in which it was made”.

The issue that was before the motion judge was whether Pretium released documents that contained misrepresentations as pleaded in the Claim. The Claim asserted that the impugned documents contained material misrepresentations “as they omitted to state an adverse material fact that Strathcona, the Qualified Person responsible for the [BSP], had formed and communicated to Pretium its belief that the [BSP] was failing to confirm the validity of the [Resource Estimate], including the grade distribution and classification of Mineral Resources contained in the [Resource Estimate], and by necessary extension the validity of the Feasibility Study”.

In oral argument, the appellant relied almost exclusively on the Supreme Court’s decision in Sharbern Holding as authority for what constitutes a material fact in the context of a misrepresentation by omission. In that case, Rothstein J. formulated the test for the materiality of an omitted fact as follows:

An omitted fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote…Put another way, there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the “total mix” of information made available”.

The appellant contended that, in deciding the summary judgment motion, the motion judge departed from the teachings of Sharbern Holding by injecting a new and irrelevant factor of “reliability”. The appellant contended that the motion judge improperly relied on Pretium’s subjective views and business judgment, in finding Strathcona’s concerns to be unreliable and, therefore, not material information that had to be disclosed. The appellant said that the reliability of the information should play no role at all: whether or not Pretium agreed with Strathcona’s concerns, they needed to be disclosed, so that the market could make up its own mind.

The Court did not give effect to the appellant’s arguments. The Court was not persuaded that the motion judge applied a test that was wrong at law when he determined that the Strathcona concerns were not material information, in part because they were unreliable. Although the motion judge did not repeat the principles from Sharbern Holding that he previously set out in his leave decision, he undertook an analysis that was consistent with, and did not depart from, the framework articulated in that case. Moreover, the motion judge properly focused on the relevant factors, including reliability, in concluding that Strathcona’s concerns, which were the expression of an opinion, did not constitute a material fact that ought to have been disclosed.

The motion judge, as Sharbern Holding instructs, undertook a “fact-specific inquiry” in light of all relevant considerations. He assessed the “contextual evidence”, examining both the disclosed information and the omitted information. He considered Strathcona’s role, the record of communications and the evidence of Snowden to conclude that Strathcona was expressing opinions prematurely, outside the scope of its retainer and based on faulty assumptions. His characterization of Strathcona’s opinions as inexpert, unsolicited, premature and unreliable was firmly anchored in the evidence. He explained why he accepted the respondents’ evidence respecting Strathcona’s concerns, and why he was unpersuaded by the appellant’s evidence. Referring to the definition of misrepresentation in the OSA, the motion judge concluded that there was no omission of any material fact because the respondents were not obliged to disclose “bad and misleading information”.

In the Court’s view, the motion judge adopted a contextual and fact-specific approach to the materiality of Strathcona’s concerns and, in particular, whether they were material facts that were required to be disclosed. He conducted a detailed review of the evidence on the summary judgment motion, and explained, by reference to such evidence, why he concluded that Strathcona’s concerns were premature, inexpert and unreliable, and in turn, by reference to the disclosure already made, “were not material facts that would assist a reasonable investor in making an informed investment decision”.

The Court then refuted the three main arguments of the appellants:

(a) The Court did not agree with the appellant’s submission that the motion judge erred in considering the reliability of Strathcona’s concerns as part of his materiality analysis. While the reliability of omitted information is not necessarily relevant to the question of materiality in all cases, it was relevant in this case. The appellant was correct that reliability was not identified as a component of a “material fact” in Sharbern Holding. In that case, however, the quality or reliability of the omitted information was not at issue.

(b) The appellant also submitted that the motion judge’s assessment of materiality relied on a post hoc evaluation that accepted Pretium’s subjective opinions and business judgment. The Court rejected this argument. The evidence adduced on the summary judgment motion was not post hoc evidence that was created with the benefit of hindsight. Although assembled years after the relevant events, the respondents’ evidence included emails and letters that showed the discussions about Strathcona’s concerns by the relevant actors at Pretium at the time and, importantly, included Snowden’s contemporaneous views. The motion judge’s findings were based on evidence dating from the Class Period, and he did not adopt a hindsight assessment of whether Strathcona’s concerns were justified or correct.

(c) The appellant also asserted that the fact that Pretium’s share price dropped precipitously after the October 9 and 22, 2013 news releases confirmed that Strathcona’s concerns must have been material. In this case, it was not admitted that the October 22, 2013 news release constituted a public correction – in the sense that it corrected information that was previously misstated. Even in cases where it is admitted or obvious that there was a public correction, the market response, while relevant to materiality, is not determinative.


Ferguson v. Ferguson , 2022 ONCA 543

[van Rensburg, Harvison Young, and Copeland JJ.A.]

COUNSEL:

S.K., for the appellant

C.H., for the respondent

Keywords: Family Law, Support, Imputing Income, Property, Equalization of Net Family Property, Vesting Orders, Matrimonial Home, Civil Procedure, Disclosure, Striking Pleadings, Uncontested Trials, Sufficiency of Reasons, Family Law Rules, O. Reg. 114/99, rr 1(8), 1(8.1), 2(3), & 13, Martin v. Watts, 2020 ONCA 406, Kovachis v. Kovachis, 2013 ONCA 663, Canada in Colucci v. Colucci, 2021 SCC 24, R. v. W.O., 2020 ONCA 392, Dovbush v. Mouzitchka, 2016 ONCA 381, R. v. Sheppard, 2002 SCC 26

FACTS:

The parties separated in 2019, after six years of marriage and having two sons. The respondent wife spent two years making repeated attempts to obtain full financial disclosure from the appellant husband. By way of order in 2021, the trial judge determined the appellant’s income, his resulting support obligations, as well as the equalization payment owing to the respondent.

The appellant appealed the decision of the trial judge, arguing that it was unfair and improper for the trial judge to impute his income and award an equalization payment by way of uncontested trial following a 14B motion striking his pleadings. The appellant further argued that the reasons of the trial judge were inadequate.

ISSUES:

(1) Was the procedure unfair?

(2) Did the trial judge err in awarding an equalization payment?

(3) Were the reasons of the trial judge inadequate?

HOLDING:

Appeal dismissed.

REASONING:

(1) No.

The appellant argued that the process of arriving at a final order for support and equalization as the result of a motion to strike his pleadings was unfair. The Court held that this claim appeared to be a collateral attack on the trial judge’s order striking his pleadings, from which the appellant did not appeal. The order that the respondents proceed by way of 23C motion for an uncontested trial was entirely proper given the striking of the pleadings. Since there was no appeal from the order, the appellant could not raise this issue on this appeal.

The Court further held that focusing on the 14B motion in isolation ignored the context and history of the matter. Individual disclosure is the lynchpin of the family law system. There must be serious consequences for those who prevaricate. The Court held that disclosure’s foundational importance, and the circumstance of this particular case, warranted an exceptional remedy for non-compliance.

The trial judge’s order striking the appellant’s pleadings and the subsequent uncontested trial followed two years of the respondent’s fruitless efforts to obtain the appellant’s disclosure. These efforts forced her to expend significant funds on legal fees for even the most basic disclosure. Accordingly, there was no merit to the claim that this case should not have been resolved by way of a 14B motion.

The appellant also submitted that the three-page limit placed on affidavit material filed on 23C motions was inadequate for the sorts of determinations necessary. However, the 23C affidavit filed by the respondent included sufficient evidence to allow the trial judge to infer the respondent’s income. Had the appellant provided full and prompt disclosure, as he was required to, his pleadings would not have been struck and the trial judge would have benefited from a fuller record. In the circumstances, there was no basis for the appellant to complain about the imputation of income.

(2) No.

Given the absence of any valuation of the appellant’s business or contrary evidence whatsoever, the trial judge’s determination that the matrimonial home should be transferred to the respondent in satisfaction of any equalization payment was fair and just. Even if the respondent did disclose the valuation of her pension, the appellant’s failure to disclose would continue to prevent an arithmetic equalization of the value of net family property because the value of his assets was unknown.

The Court held that in the face of substantial non-disclosure from the appellant, there was no unfairness in excluding the value of the wife’s pension in ordering an equalization payment. It would be further unfair to the respondent to delay the equalization payment because she had not valued her pension despite the appellant’s repeated and blatant attempts to avoid even the most basic disclosure. Consequently, the order transferring the matrimonial home to the respondent did not constitute a palpable and overriding error.

(3) No.

Inadequacy of reasons does not provide a free-standing right of appeal. Rather, an appellant who argues insufficiency of reasons must show not only a deficiency in the reasons, but that the deficiency caused prejudice to the exercise of the right to appeal.

Trial judges are not held to an abstract standard of perfection. In evaluating a trial judge’s reasons, appellate courts must consider the time constraints and general press of business in the court. In the context of busy family law trial courts, there must be a high bar for the insufficiency of reasons. This high bar is mandated by the primary objectives of the Family Law Rules captured in r. 2(3). This rule emphasizes saving expense and time, dealing with the case in ways that are appropriate to its importance and complexity, and giving the case appropriate court resources while taking account of the need to give resources to other cases.

The Court held that the reasons were adequate to permit appellate review.


SHORT CIVIL DECISIONS

Paul v. Madawaska Valley (Township), 2022 ONCA 542

[Tulloch, Lauwers and Paciocco JJ.A.]

COUNSEL:

J. P. R. Cassan and T. J. Harmar, for the appellants

J. Safayeni and K. Bernofsky, for the respondents

Keywords: Costs

Leaf Homes Limited v. Khan , 2022 ONCA 547

[Gillese, Miller and Coroza JJ.A.]

COUNSEL:

A. Farooq and S. Balcharan, for the appellants

M. Kersten, for the respondent

Keywords: Costs

Aquino v. Aquino , 2022 ONCA 541

[Doherty, Benotto and Zarnett JJ.A.]

COUNSEL:

A.W. MacDonald, for the moving party, The Globe and Mail Inc.

D. T. Ullmann, for the responding party

Keywords: Civil Procedure, Publication Bans, Sealing Orders, Appeals, Jurisdiction, Orders, Final or Interlocutory, Bankruptcy and Insolvency Act, 1985, c. B-3, Companies’ Creditors Arrangement Act, 1985, c. C-36, Courts of Justice Act, s. 6(1), Paulpillai Estate v. Yusuf, 2020 ONCA 655, PI v XYZ, 2021 ONCA 901

1775997 Ontario Inc. v. Jodamar Properties Ltd., 2022 ONCA 540

[Benotto, Zarnett and Thorburn JJ.A.]

COUNSEL:

S. Pickard, for the appellant

C. Bondy and I. Vacaru, for the respondent

Keywords: Contracts, Real Property, Construction, Delay, Damages, Interest, Civil Procedure, Appeals

Liu v. Qiu , 2022 ONCA 544

[Feldman, Tulloch and Miller JJ.A.]

COUNSEL:

R. He and C. Tan, for the moving party

S. J. Erskine and A. Zaya, for the responding party

Keywords: Civil Procedure, Orders, Varying or Setting Aside, Rules of Civil Procedure, Rules 37.14, 59.06

Ledsham v. Air Canada Pilots Association , 2022 ONCA 550

[Benotto, Zarnett and Thorburn JJ.A.]

COUNSEL:

A. Ledsham, acting in person

H. Nieuwland, for the respondent

Keywords: Civil Procedure, Orders, Varying or Setting Aside, Arbitration Awards, Frivolous, Vexatious, Abuse of Process, Rules of Civil Procedure, Rule 2.1, Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733

Galt Machining & Plating Inc. v. MLS Group Ltd., 2022 ONCA 546

[Benotto, Zarnett and Thorburn JJ.A.]

COUNSEL:

J. Sacks, for the appellant

D. Baker, for the respondent

Keywords: Contracts, Real Property, Commercial Leases, Contracts, Agreements of Purchase and Sale of Land, Unlawful Termination, Repudiation, Place Concorde East Ltd. Partnership v. Shelter Corp. of Canada (2006), 270 D.L.R. (4th) 181 (Ont. C.A.)

2257573 Ontario Inc. v. Furney , 2022 ONCA 552

[Brown, Roberts and Paciocco JJ.A.]

COUNSEL:

S. Dyment, for the appellants

H. H., acting in person

H. W. Reininger, for the respondent

Keywords: Contracts, Real Property, Civil Procedure, Appeals, Costs