Good afternoon.

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of April 19, 2021.

In Fercan Developments v Canada, the Court confirmed that the plaintiffs who waited until after criminal and civil forfeiture proceedings were concluded before suing the Crown for malicious prosecution and related torts were entitled to do so on the basis that their claims were not discoverable under the “appropriate means” branch of the discoverability test in ss. 5(1)(a)(iv).

In Law Society of Ontario v Diamond the Court upheld the Law Society’s finding of professional misconduct for failure to cooperate with its investigation.

Other topics covered this week included  a priority dispute to the proceeds of sale a matrimonial home between a spouse and a judgment creditor and occupational health and safety.

Our “Top Appeals” of 2020 CLE is finally upon us. Please join us this Tuesday evening, April 27, 2021, from 5:30 to 7:45 pm via Zoom. We are set to have a great turnout. Justice Benjamin Zarnett will be co-chairing the event with me and Chloe Snider. Following is our excellent slate of decisions and panelists:

2020 Update from the Bench

The Honourable Benjamin Zarnett, Court of Appeal for Ontario

Panel 1 – Advocacy Practice Tips from the Court

Girao v. Cunningham, 2020 ONCA 260

OZ Merchandising Inc. v. Canadian Professional Soccer League Inc., 2020 ONCA 532

Welton v. United Lands Corporation Limited, 2020 ONCA 322

Jordan Goldblatt, Adair Goldblatt Bieber LLP

Sara Erskine, Weintraub Erskine Huang LLP

Panel 2 – Negligently Designed Financial Products – A New Age in Product Liability?

Wright v. Horizons ETFS Management (Canada) Inc., 2020 ONCA 337

Seumas Woods, Blake, Cassels & Graydon LLP

Alistair Crawley, Crawley MacKewn Brush LLP

Elizabeth Bowker, Stieber Berlach LLP

Panel 3 – Developments in Insolvency Law – Priority of Construction Trust Claims and Landlord Claims in Bankruptcy

Urbancorp Cumberland 2 GP Inc. (Re), 2020 ONCA 197

7636156 Canada Inc. (Re), 2020 ONCA 681

Ken Kraft, Dentons LLP

Kevin Sherkin, Miller Thomson LLP

D.J. Miller, Thornton Grout Finnigan LLP

There is still time to register for the program by visiting the OBA’s website.

Wishing everyone an enjoyable weekend.

Table of Contents

Civil Decisions

Iafolla v. Lasota , 2021 ONCA 245

Keywords: Family Law, Child Support, Variation, Material Change in Circumstances, Debtor-Creditor, Civil Procedure, Judgments, Enforcement, Writs of Execution, Priority, Creditors’ Relief Act, 2010, S.O. 2010, c. 16, s. 2, Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), s. 11, Maroukis v. Maroukis (1981), 33 O.R. (2d) 661 (C.A.), aff’d [1984] 2 S.C.R. 137, Stevens v. Stevens (2005), 20 R.F.L. (6th) 453 (Ont. S.C.J.), aff’d 214 O.A.C. 201, Willick v. Willick, [1994] 3 S.C.R. 670, L.M.P. v. L.S., 2011 SCC 64

Martin v. 11037315 Canada Inc. , 2021 ONCA 246

Keywords: Contracts, Real Property, Mortgages, Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Courts of Justice Act, R.S.O. 1990, c. C.43, section 19(1)(b), Rules of Civil Procedure, Rules 59.06(2) and 62.02(1), Laurentian Plaza Corp. v. Martin (1992), 89 D.L.R. (4th) 50 (Ont. C.A.), Lax v. Lax (2004), 239 D.L.R. (4th) 683 (Ont. C.A.), Abbott v. Collins, (2002), 62 O.R. (3d) 99 (C.A.), Azzeh v. Legendre, 2017 ONCA 385, Abbasbayli v. Fiera Foods Company, 2021 ONCA 95, 2099082 Ontario Limited v. Varcon Construction Corporation, 2020 ONCA 202, Cooper v. The Laundry Lounge, Inc., 2020 ONCA 166, Antique Treasures of the World Inc. v. Bauer, 2003 CanLII 35349 (Ont. C.A.)

Fercan Developments Inc. v. Canada (Attorney General) , 2021 ONCA 251

Keywords: Torts, Malicious Prosecution, Negligent Investigation, Misfeasance in Public Office Conspiracy, Civil Procedure, Summary Judgment, Limitation Periods, Discoverability, “Appropriate Means”, Limitations Act, 2002, s. 5(1)(a)(iv), Controlled Drugs and Substances Act, S.C. 1996, c. 19, Civil Remedies Act, S.O. 2001, c. 28, Longo v. MacLaren Art Centre Inc., 2014 ONCA 526, Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922, Nasr Hospitality Services Inc. v. Intact Insurance, 2018 ONCA 725, Presidential MSH Corporation v. Marr Foster & Co. LLP, 2017 ONCA 325, Markel Insurance Company of Canada v. ING Insurance Company of Canada, 2012 ONCA 218, Sosnowski v. MacEwan Petroleum Inc., 2019 ONCA 1005, Winmill v. Woodstock (Police Services Board), 2017 ONCA 962

Law Society of Ontario v. Diamond , 2021 ONCA 255

Keywords: Administrative Law, Regulated Professions, Lawyers, Professional Misconduct, Failure to Co-operate with Law Society, Standard of Review, Law Society Act, R.S.O. 1990, c. L.8, ss. 34(1) and 49.38, Canadian Charter of Rights and Freedoms, s 8, Part 1 of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11, s. 24(2), Rules of Professional Conduct, Rule 7.1-1, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Housen v. Nikolaisen, 2002 SCC 33, Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, Longueépée v. University of Waterloo, 2020 ONCA 830, Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3, Law Society of Upper Canada v. Ghobrial, 2014 ONLSHP 5, Law Society of Upper Canada v. Boissonneault (May 23, 2008), Toronto, CN04/08 (Law Society of Upper Canada Hearing Panel), Law Society of Upper Canada v. Cucci, 2012 ONLSHP 131, Law Society of Upper Canada v. Gray, 2011 ONLSHP 198, Law Society of Upper Canada v. Rosenthal, 2011 ONLSHP 103, Law Society of Upper Canada v. Leahy, 2014 ONLSTH 104, Law Society of Upper Canada v. Gavris, 2015 ONLSTH 144, Groia v. Law Society of Upper Canada, 2018 SCC 27, Re Bernstein and College of Physicians and Surgeons of Ontario (1977), 76 D.L.R. (3d) 38 (Ont. Div. Ct.), Barrington v. The Institute of Chartered Accountants of Ontario, 2011 ONCA 409, leave to appeal refused, [2011] S.C.C.A. No. 367, Reid v. College of Chiropractors of Ontario, 2016 ONSC 1041 (Div. Ct.), Law Society of New Brunswick v. Ryan, 2003 SCC 20, Pearlman v. Manitoba Law Society Judicial Committee, [1991] 2 S.C.R. 869, Law Society of Upper Canada v. Baker, 2006 ONLSHP 21, Law Society of Upper Canada v. Wysocky, 2009 ONLSHP 77

Ontario (Labour) v. Sudbury (City) , 2021 ONCA 252

Keywords: Labour and Employment Law, Provincial Offences, Occupational Health and Safety, Definition of “Employer”, Defences, Due Diligence, Occupational Health and Safety Act, R.S.O. 1990, c. O.1, ss. 1(1), 1(3), 25(1)(c), Provincial Offences Act, R.S.O. 1990, c. P.33, ss. 121, 125, 134, Construction Projects, O. Reg. 213/91, Ontario (Labour) v. Quinton Steel (Wellington) Limited, 2017 ONCA 1006, R. v. Wyssen, 1992 CanLII 7598 (Ont. C.A.), Ontario (Labour) v. Nugent, 2019 ONCA 999, R. v. Francis (1996), 92 O.A.C. 308 (C.A.), R. v. Thorne, [1997] O.J. No. 1036 (C.A.), Ottawa (City) v. Spirak, 2008 ONCA 299, Ontario (Ministry of Labour) v. Modern Niagara Toronto Inc., 2008 ONCA 590, R. v. Courtice Auto Wreckers Limited, 2014 ONCA 189, R. v. Maxwell, 2007 ONCA 834

 

Short Civil Decisions

Jay-Pee Drycleaners Inc. v. 2321324 Ontario Inc., 2021 ONCA 250

Keywords: Contracts, Real Property, Commercial Leases, Civil Procedure, Appeals, Monetary Jurisdiction, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 19(1)(a), 110

Moar v. McLaughlin, 2021 ONCA 264

Keywords: Family Law, Custody and Access, Variation, Material Change in Circumstances, Family Law Rules, Rules 15, 16, Gordon and Goertz [1996] 2 S.C.R. 27


CIVIL DECISIONS

Iafolla v. Lasota, 2021 ONCA 245

[Rouleau, Benotto and Miller JJ.A.]

COUNSEL:

P. Ezzatian, for the appellant

B.P. Pilley, for the respondent

Keywords: Family Law, Child Support, Variation, Material Change in Circumstances, Debtor-Creditor, Civil Procedure, Judgments, Enforcement, Writs of Execution, Priority, Creditors’ Relief Act, 2010, S.O. 2010, c. 16, s. 2, Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), s. 11, Maroukis v. Maroukis (1981), 33 O.R. (2d) 661 (C.A.), aff’d [1984] 2 S.C.R. 137, Stevens v. Stevens (2005), 20 R.F.L. (6th) 453 (Ont. S.C.J.), aff’d 214 O.A.C. 201, Willick v. Willick, [1994] 3 S.C.R. 670, L.M.P. v. L.S., 2011 SCC 64

FACTS:

This appeal concerned a dispute between a judgment creditor and the ex-wife of an individual (“Z.A.”) with respect priority over Z.A.’s share of the proceeds from the sale of the matrimonial home.

In July 2018, as part of divorce proceedings between the respondent and Z.A., the presiding judge ordered that the arrears of child support owed by Z.A. be deducted from his share of the sale proceeds, and that the remaining balance be held in trust as security for Z.A.’s future support obligations (the “Divorce Order”).

The appellant is a judgment creditor of Z.A., and brought an application to determine who had priority over the remaining balance of the funds held in trust pursuant to the Divorce Order. The appellant cited s. 2 of the Creditors’ Relief Act, 2010, S.O. 2010, c. 16, as well as Maroukis v. Maroukis (1981), 33 O.R. (2d) 661 (C.A.), aff’d [1984] 2 S.C.R. 137, to argue that he is entitled to collect on his judgment from the funds held in trust.

The application judge concluded that the Divorce Order took priority over the appellant’s interest, and the application was dismissed.

ISSUES:

(1) Did the application judge err in interpreting the jurisprudence? (2) Did the application judge err by not addressing the court’s duty regarding child support?

HOLDING:

Appeal allowed in part.

REASONING:

(1) Did the application judge err in interpreting the jurisprudence?

Yes. In his decision, the application judge relied on Stevens v. Stevens (2005), 20 R.F.L. (6th) 453 (Ont. S.C.J.), aff’d 214 O.A.C. 201. In Stevens, the trial judge determined that a constructive trust operated as of the date of the separation to vest the matrimonial home in the wife’s name before the execution was filed. Conversely, in this case, the respondent did not have title in the husband’s portion of the sale proceeds at the time the writ was filed.

However, the Court also disagreed with the appellant that the Maroukis decision helped him. Maroukis was ultimately appealed to the Supreme Court, where it was held that when property is divided on marriage breakdown, it does not vest until the order is made, and there is no provision to retroactively vest property. The crucial distinction was that the underlying order in Maroukis did not involve child support, and the limits on retroactivity do not apply to a variation of child support.

(2) Did the application judge err by not addressing the court’s duty regarding child support?

Yes. Because children are not parties to their parents’ divorce, the presence of a child in divorce proceedings engages special duties for the court to ensure that arrangements are made for support, as prescribed by s. 11 of the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.). In making the Divorce Order, the divorce trial judge clearly intended to secure Z.A.’s share of the proceeds for the benefit of the child.

When the Divorce Order was made, it was clear that the trial judge was not aware of the appellant’s writ. Had the trial judge been aware of the writ, it would have likely resulted in a different order. Therefore, the discovery of the writ constitutes a material change in circumstances giving rise to a variation application (Willick v. Willick, [1994] 3 S.C.R. 670; L.M.P. v. L.S., 2011 SCC 64). In these circumstances, the application judge should have referred the matter back to the trial judge, in accordance with the court’s duty to ensure adequate arrangements are made for the support of the child. The substance of this duty meant that the application judge should have proceeded accordingly, notwithstanding the fact that the respondent did not actually move for a variation. The matter was therefore returned to the divorce trial judge to consider the material change in circumstances.


Martin v. 11037315 Canada Inc., 2021 ONCA 246

[Pepall J.A. (Motions Judge)]

COUNSEL:

S.S. Chhina, for the appellants/moving parties

D. Van Sickle, for the respondent/responding party

Keywords: Contracts, Real Property, Mortgages, Civil Procedure, Appeals, Jurisdiction, Orders, Final or Interlocutory, Courts of Justice Act, R.S.O. 1990, c. C.43, section 19(1)(b), Rules of Civil Procedure, Rules 59.06(2) and 62.02(1), Laurentian Plaza Corp. v. Martin (1992), 89 D.L.R. (4th) 50 (Ont. C.A.), Lax v. Lax (2004), 239 D.L.R. (4th) 683 (Ont. C.A.), Abbott v. Collins, (2002), 62 O.R. (3d) 99 (C.A.), Azzeh v. Legendre, 2017 ONCA 385, Abbasbayli v. Fiera Foods Company, 2021 ONCA 95, 2099082 Ontario Limited v. Varcon Construction Corporation, 2020 ONCA 202, Cooper v. The Laundry Lounge, Inc., 2020 ONCA 166, Antique Treasures of the World Inc. v. Bauer, 2003 CanLII 35349 (Ont. C.A.)

FACTS:

The responding party’s mortgage was assigned to 11037315 Ontario Ltd. (“110”) which she was not aware of. 110 served her with a claim for foreclosure and eventually obtained default judgment and sold the property to 2670082 Ontario Ltd. (“267”). The responding party sought to set aside the default judgment. In a December endorsement, the judge granted the responding party’s application and ordered that the she recover her equity in the property net of the mortgage. He also dispensed with a formal typed order, saying that his endorsement was deemed to be an order due to COVID-19. In exercising his discretion, he relied on equity, absence of prejudice to 267, and the absence of notice of assignment, meaning the default judgment was irregularly obtained. 267 then moved under r. 59.06(2) of the Rules arguing that a new fact had been discovered. In a January order, the motion judge dismissed the motion on the basis of lack of due diligence and in any event, his earlier decision was based on equity. He again determined that given the pandemic, his endorsement was deemed to be the order without any need to obtain a formal order. 267 appealed the two orders. The moving parties sought an order setting aside the Registrar’s order dismissing their appeal and an order extending the time to perfect the appeal. Counsel for the responding party sought an adjournment to file materials in response. There was also an issue regarding the jurisdiction to hear the appeal.

ISSUES:

  1. Does the Court of Appeal have jurisdiction to hear this matter?
  2. Should the request to adjourn the motion to a new date be permitted?

HOLDING:

Motion adjourned.

REASONING:

  1. Does the Court have jurisdiction to hear this matter?

Yes, the Court briefly outlined the background facts related to the question of whether the Court has jurisdiction over the proposed appeal. Firstly, an issued and entered order is required for the purpose of an appeal. Therefore, the Court recommended that the moving parties obtain and file an issued and entered order prior to the hearing of this motion. Secondly, the December order had both interlocutory and final elements. Normally, leave must be obtained from the Divisional Court before an appeal from an interlocutory order can be combined with an appeal from a final order. However, leave to appeal from an order of a judge of the Superior Court is not required where the issues in an appeal from an order having final and interlocutory aspects are so interrelated that leave would inevitably have been granted. The January order was entirely interlocutory; however, the issues raised by that order were closely related to those in the December order. In the circumstances, given the interrelationship of the issues, the Court held that it was at least arguable that it had jurisdiction over the appeal.

  1. Should the request to adjourn the motion to a new date be permitted?

Yes, the Court adjourned the motion to a date agreed upon by the parties, to permit the responding party to respond to the motion. The Court was satisfied that the request was legitimate given the abbreviated service and the absence of any materials from the responding party.


Fercan Developments Inc. v. Canada (Attorney General), 2021 ONCA 251

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

COUNSEL:

J. Im and B. Forson, for the appellants, Ontario Provincial Police and S.H.

J. Robichaud and J. Schneider, for the appellant, The Attorney General of Canada

W. Friedman, P. Bakos, J.G. Hamilton, B.H. Greenspan and N.M. Lutes, for the respondents, Fercan Developments Inc. and GRVN Group Inc.

Keywords: Torts, Malicious Prosecution, Negligent Investigation, Misfeasance in Public Office Conspiracy, Civil Procedure, Summary Judgment, Limitation Periods, Discoverability, “Appropriate Means”, Limitations Act, 2002, s. 5(1)(a)(iv), Controlled Drugs and Substances Act, S.C. 1996, c. 19, Civil Remedies Act, S.O. 2001, c. 28, Longo v. MacLaren Art Centre Inc., 2014 ONCA 526, Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922, Nasr Hospitality Services Inc. v. Intact Insurance, 2018 ONCA 725, Presidential MSH Corporation v. Marr Foster & Co. LLP, 2017 ONCA 325, Markel Insurance Company of Canada v. ING Insurance Company of Canada, 2012 ONCA 218, Sosnowski v. MacEwan Petroleum Inc., 2019 ONCA 1005, Winmill v. Woodstock (Police Services Board), 2017 ONCA 962

FACTS:

The proceedings leading to this appeal began as a result of the appellants’ unsuccessful attempts to obtain forfeiture of certain properties of the respondents which housed marijuana grow operations.

The appellant Attorney General of Canada (the “AGC”) brought an application for forfeiture under the Controlled Drugs and Substances Act, S.C. 1996, c. 19 (the “criminal forfeiture application”), which was dismissed in September 2013. In June 2014, Justice West granted the respondents’ application for costs of the criminal forfeiture application, noting there had been a “marked and unacceptable departure from the reasonable standard expected of the Crown.” The appeal of Justice West’s costs order was dismissed, and his finding of Crown misconduct was upheld in April 2016.

The matter was also referred to the Attorney General of Ontario (the “AGO”), who commenced his own forfeiture proceedings under the Civil Remedies Act, S.O. 2001, c. 28 (the “civil forfeiture application”). The AGO was similarly unsuccessful in the civil forfeiture application, and leave to appeal the decision was refused in June 2014.

In May 2016, the respondents commenced an action against the AGC. Later, in September 2016, the respondents commenced an action against the Ontario Provincial Police and one of its officer (the “OPP Defendants”). These actions included claims of malicious prosecution, negligent investigation, misfeasance in public office and civil conspiracy. The two actions were eventually consolidated in January 2017.

The appellants moved for summary judgment to dismiss the actions on the basis that they were statute-barred by the Limitations Act, 2002. The motion judge dismissed the motion, and concluded that pursuant to s. 5(1)(a)(iv) of the Limitations Act, 2002, it was not appropriate to commence proceedings until, at the earliest, June 26, 2014, being the date when the civil forfeiture proceedings came to an end. Further still, the motion judge went on to conclude that it was not appropriate to commence proceedings against all of the appellants until, at the earliest, April 14, 2016, being the date when Justice West’s costs order and finding of Crown misconduct in the criminal forfeiture application proceedings was upheld. Accordingly, neither of the respondents’ actions were statute-barred.

ISSUES:

Did the motion judge err in concluding that the limitation period had not expired for the respondents’ claims against the appellants?

HOLDING:

Appeal dismissed.

REASONING:

No. Because the issue of a limitation period’s expiry is a question of mixed fact and law, it is subject to review based on a standard of “palpable and overriding error” (Longo v. MacLaren Art Centre Inc., 2014 ONCA 526; Kassburg v. Sun Life Assurance Company of Canada, 2014 ONCA 922).

On review of the motion judge’s decision, the Court found that the motion judge applied the correct legal framework, specifically by citing Nasr Hospitality Services Inc. v. Intact Insurance, 2018 ONCA 725 to recognize that the determination of an action being statute-barred requires specific findings of fact relating to the elements set out in s. 5 of the Limitations Act, 2002. Appropriately, the motion judge went on to make such factual findings, which were all supported by her reasoning.

Importantly, the motion judge correctly noted that the specific issue in this case was whether the limitation period should be “suspended because a proceeding would be premature” (Presidential MSH Corporation v. Marr Foster & Co. LLP, 2017 ONCA 325), and that s. 5(1)(a)(iv) discourages parties from rushing to litigation. Therefore, while the claims themselves might have been technically “discoverable” at an earlier date, the motion judge correctly found that it would have been premature to require the respondents to launch a lawsuit at such times, as they were still embroiled in the proceedings, which could have feasibly rendered their lawsuit non-viable and unworthy of pursuing.

The motion judge was also correct in rejecting the appellants’ argument that the AGC’s appeal of the costs order was only relevant to the running of the limitation period against the AGC, and not the OPP Defendants. Rather, the motion judge did not err in treating the OPP Defendants and the AGC as if they were one entity, given the unique circumstances of the case and the substantial similarities between the claims advanced against all of the appellants.

It was also significant to note that the decision of the respondents to delay bringing their lawsuits was not a purely tactical decision, or simply an effort to wait until the end of other proceedings that might improve their chances of success, as was the case in other decisions such as Markel Insurance Company of Canada v. ING Insurance Company of Canada, 2012 ONCA 218 and Sosnowski v. MacEwan Petroleum Inc., 2019 ONCA 1005. Rather, as in Winmill v. Woodstock (Police Services Board), 2017 ONCA 962, the final determination of the criminal forfeiture application and civil forfeiture application would have been a “crucial, bordering on determinative factor” in whether the respondents had any claim at all to pursue, therefore making it appropriate to wait.


Law Society of Ontario v. Diamond, 2021 ONCA 255

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

COUNSEL:

B.H. Greenspan and N.M. Lutes, for the appellant

L. Maunder, for the respondent

Keywords: Administrative Law, Regulated Professions, Lawyers, Professional Misconduct, Failure to Co-operate with Law Society, Standard of Review, Law Society Act, R.S.O. 1990, c. L.8, ss. 34(1) and 49.38, Canadian Charter of Rights and Freedoms, s 8, Part 1 of the Constitution Act, 1982, being Schedule B to the Canada Act 1982 (UK), 1982, c 11, s. 24(2), Rules of Professional Conduct, Rule 7.1-1, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Housen v. Nikolaisen, 2002 SCC 33, Agraira v. Canada (Public Safety and Emergency Preparedness), 2013 SCC 36, Longueépée v. University of Waterloo, 2020 ONCA 830, Merck Frosst Canada Ltd. v. Canada (Health), 2012 SCC 3, Law Society of Upper Canada v. Ghobrial, 2014 ONLSHP 5, Law Society of Upper Canada v. Boissonneault (May 23, 2008), Toronto, CN04/08 (Law Society of Upper Canada Hearing Panel), Law Society of Upper Canada v. Cucci, 2012 ONLSHP 131, Law Society of Upper Canada v. Gray, 2011 ONLSHP 198, Law Society of Upper Canada v. Rosenthal, 2011 ONLSHP 103, Law Society of Upper Canada v. Leahy, 2014 ONLSTH 104, Law Society of Upper Canada v. Gavris, 2015 ONLSTH 144, Groia v. Law Society of Upper Canada, 2018 SCC 27, Re Bernstein and College of Physicians and Surgeons of Ontario (1977), 76 D.L.R. (3d) 38 (Ont. Div. Ct.), Barrington v. The Institute of Chartered Accountants of Ontario, 2011 ONCA 409, leave to appeal refused, [2011] S.C.C.A. No. 367, Reid v. College of Chiropractors of Ontario, 2016 ONSC 1041 (Div. Ct.), Law Society of New Brunswick v. Ryan, 2003 SCC 20, Pearlman v. Manitoba Law Society Judicial Committee, [1991] 2 S.C.R. 869, Law Society of Upper Canada v. Baker, 2006 ONLSHP 21, Law Society of Upper Canada v. Wysocky, 2009 ONLSHP 77

FACTS:

In the fall of 2016, the respondent, Law Society of Ontario (“LSO”), started an investigation into the appellant’s law firm, focusing on the firm’s structure and referral fee practices. In October of 2016, the LSO initially requested from the appellant, documents and information needed for its investigation. A further request letter was sent in December of 2016. Later, the LSO sent a third request letter in February of 2017. All of the requested items fell within the parameters of documents required to be kept by licensees.

In the months that followed the initial and subsequent requests, there was a significant amount of back-and-forth communication between the appellant’s counsel and the LSO, which included fourth and fifth formal request letters, dated March 28, 2017 and April 3, 2017.

In May of 2017, the LSO commenced an application before the Law Society Tribunal Hearing Division (the “Hearing Division”), alleging that the appellant engaged in professional misconduct in not cooperating fully with the LSO’s investigation by failing to produce the requested information and documentation.

Eventually, all requested records were produced by late June and early July 2017. The Hearing Division concluded that the appellant had breached Rule 7.1-1 of the Rules of Professional Conduct, and therefore committed professional misconduct, by failing to provide a prompt and complete response to all of the requests made by the LSO.  The Law Society Tribunal Hearing Appeal Division and the Divisional Court affirmed the Hearing Division’s ruling.

ISSUES:

(1) What was the correct standard of review?

(2) Did the Tribunals and Divisional Court err in applying the incorrect legal test for determining a failure to cooperate?

HOLDING:

Appeal dismissed.

REASONING:

(1) Palpable and overriding error. Where the legislature provided for an appeal from an administrative decision to a court, the reviewing court is to apply appellate standards of review: Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65 at para 37. Here, there was an appeal under s. 49.38 of the Law Society Act, R.S.O. 1990, c. L.8.

The appellant’s primary position was focused upon a pure question of law, but there was no extricable error of law. The question of whether the appellant engaged in professional misconduct in the circumstances of the case was a clear question of mixed fact and law, reviewable on a standard of palpable and overriding error.

(2) No.

The correct test was stated.

The legal test for determining a failure to cooperate permits a consideration of all the facts, looked at through both a subjective and objective lens. While articulated slightly differently at each instance, the following considerations emerged from these decisions:

(a) all of the circumstances must be taken into account in determining whether a licensee has acted responsibly and in good faith to respond promptly and completely to the Law Society’s inquiries;

(b) good faith requires the licensee to be honest, open, and helpful to the Law Society;

(c) good faith is more than an absence of bad faith; and

(d) a licensee’s uninformed ignorance of their record-keeping obligations cannot constitute a “good faith explanation” of the basis for the delay.

The Court further clarified the framework of Rule 7.1-1 of the Rules of Professional Conduct and whether a licensee has failed to cooperate:

  1. Ignorance of one’s professional obligations cannot subsist as a demonstration of good faith.
  2. The label of professional misconduct is only given to a failure to cooperate, which is a failure to act responsibly and in good faith in responding to the LSO’s requests – because this type of conduct constitutes a significant departure from the acceptable standards of the profession
  3. While there must be clear, convincing, and cogent evidence of professional misconduct under Rule 7.1-1, the standard is not as high as a “clear refusal to cooperate”

The test was properly applied.

The Vice-Chair of the Hearing Division, without legal error, came to his conclusion that the appellant did not act in good faith. This was most clearly articulated when he concluded that the appellant had engaged in a “‘cat and mouse game’ that has no place in the relationship between licensee and regulator.” This type of game was the antithesis of good faith dealings and it could not be said that a palpable and overriding error was made.


Ontario (Labour) v. Sudbury (City), 2021 ONCA 252

[Fairburn A.C.J.O., Watt and Huscroft JJ.A.]

COUNSEL:

D. McCaskill, for the appellant

R.J. Conlin and A.D. Boyce, for the respondent

C. Muram and K. Simms, for the intervener Workers’ Health and Safety Legal Clinic

Keywords: Labour and Employment Law, Provincial Offences, Occupational Health and Safety, Definition of “Employer”, Defences, Due Diligence, Occupational Health and Safety Act, R.S.O. 1990, c. O.1, ss. 1(1), 1(3), 25(1)(c), Provincial Offences Act, R.S.O. 1990, c. P.33, ss. 121, 125, 134, Construction Projects, O. Reg. 213/91, Ontario (Labour) v. Quinton Steel (Wellington) Limited, 2017 ONCA 1006, R. v. Wyssen, 1992 CanLII 7598 (Ont. C.A.), Ontario (Labour) v. Nugent, 2019 ONCA 999, R. v. Francis (1996), 92 O.A.C. 308 (C.A.), R. v. Thorne, [1997] O.J. No. 1036 (C.A.), Ottawa (City) v. Spirak, 2008 ONCA 299, Ontario (Ministry of Labour) v. Modern Niagara Toronto Inc., 2008 ONCA 590, R. v. Courtice Auto Wreckers Limited, 2014 ONCA 189, R. v. Maxwell, 2007 ONCA 834

FACTS:

A woman died after being struck by a road grader employed by Interpaving Limited, a company the respondent had contracted. The respondent employed inspectors at the project site. Interpaving and the respondent were charged with violations of Construction Projects (the “Regulation”), contrary to s. 25(1)(c) of the Occupational Health and Safety Act (“OHSA” or the “Act”). The respondent was charged on the basis that it was both a “constructor” and an “employer” within the meaning of the Act. Interpaving was found guilty but the respondent was acquitted. The trial judge in the respondent’s case found that there was no signaller in assisting the grader operator, nor was a fence erected between the public way and the worksite, as required by the Regulation. However, the trial judge concluded that the respondent was neither an employer nor a constructor and so owed no duties under the Act. The trial judge went on to find that, in any event, the respondent had a due diligence defence to the charges. The appeal judge dismissed the appellant’s appeal and upheld the trial judge’s finding that the respondent was neither an employer nor a constructor and did not consider whether the respondent would have had a due diligence defence. The appellant was granted leave to appeal to the Court to determine whether the appeal judge erred.

ISSUES:

  1. Did the appeal judge err in concluding that the respondent was not an employer for the purposes of the OHSA?
  2. Did the respondent exercise due diligence?

HOLDING:

Appeal allowed.

REASONING:

  1. Did the trial judge err in concluding that the respondent was not an employer for the purposes of the OHSA?

Yes. The OHSA is a public welfare legislation, and as such must be interpreted generously, rather than narrowly or technically to achieve the purpose of protecting employees’ health and safety. Whether the respondent was an “employer” turned on the application of the definition of employer in s. 1(1) of the OHSA. The definition embraces both employing and contracting for the services of workers. A person “who employs one or more workers” is therefore an employer for the purposes of the Act and is responsible for ensuring compliance with the Act in the workplace. The Court held that there was no doubt that the respondent’s inspectors – employees employed directly by the respondent – were present on the project site and performed a variety of tasks. Plainly, the respondent employed one or more workers at the project site within the meaning of s. 1(1) and so assumed responsibilities as an employer under the Act. Therefore, the Court concluded that the respondent was an employer within the meaning of the Act and, as a result, was liable for violations of the Regulation found by the trial judge unless it could establish a due diligence defence.

  1. Did the respondent exercise due diligence?

The trial judge’s findings that the Regulation was breached by the failure to have a signaller and the failure to erect a fence rendered the respondent liable as employer for breach of s. 25(1)(c) of the Act, unless the respondent succeeded in establishing a due diligence defence. The appellant argued that the trial court’s test for due diligence was wrong in law. According to the appellant, the respondent was required to show that it took all reasonable steps to ensure that the specific safety violations were remedied. The appellant submitted that, if this court concluded that the respondent was an employer, the necessary findings of fact were made by the trial judge to substitute convictions on counts 8 and 9 of the Information (failure to have a signaller and failure to erect a fence). In the alternative, the appellant requested that a new trial be ordered. The Court noted that the appeal judge made no decision on the due diligence question, but that a new trial was neither necessary nor appropriate for that reason. The appropriate remedy was to remit the matter to the appeal court to hear the respondent’s appeal of the due diligence issue.


SHORT CIVIL DECISIONS

Jay-Pee Drycleaners Inc. v. 2321324 Ontario Inc., 2021 ONCA 250

[Tulloch, Nordheimer and Jamal JJ.A.]

COUNSEL:

B.L., in person/responding party

M. Younes, for the respondent/moving party

Keywords: Contracts, Real Property, Commercial Leases, Civil Procedure, Appeals, Monetary Jurisdiction, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 19(1)(a), 110

Moar v. McLaughlin, 2021 ONCA 264

[Benotto, Miller and Trotter JJ.A.]

COUNSEL:

M.R. Massey, for the appellant

D. Maslov, for the respondent

Keywords: Family Law, Custody and Access, Variation, Material Change in Circumstances, Family Law Rules, Rules 15, 16, Gordon and Goertz [1996] 2 S.C.R. 27