Good afternoon.

Please find below our summaries of the civil decisions of the Ontario Court of Appeal for the week of October 4, 2021. There were ten substantive civil decisions this week.

N. v. F. is a child abduction case in which a stay of proceedings was granted pending leave to appeal to the Supreme Court of Canada.

In Gordon Dunk Farms Ltd. v. HFH Inc., the Court applied the Supreme Court’s recent decision on discoverability in Grant Thornton LLP v. New Brunswick, 2021 SCC 31,  in respect of a claim for damages suffered from the collapse of a barn.

Other topics covered this week included no reasonable cause of action for relational economic loss, two cases on whether a contract was entered into, striking pleadings for failure to comply with a court order, child protection, breach of contract of a commission agreement with a mortgage broker, the calculation of net family property where there is a date of marriage deduction for property brought into the marriage and the extension of time to serve a statement of claim.

Wishing everyone a happy Thanksgiving long weekend.

Table of Contents

Civil Decisions

N. v. F., 2021 ONCA 688

Keywords: Family Law, Custody and Access, Relocation, Child Abduction,  Civil Procedure, Conflict of Laws, Jurisdiction, Appeals, Stay Pending Appeal, Hague Convention, Convention on the Rights of the Child, Can. T.S. 1992, No. 3, Convention on the Civil Aspects of International Child Abduction, Can. T.S. 1983, No. 35, Supreme Court Act, R.S.C., 1985, c. S-26, s. 40(1), s. 65.1(1), and s. 65.1(2), Children’s Law Reform Act, R.S.O. 1990, c. C.12, s. 22, s. 23, and s. 40, N. v. F., 2021 ONCA 614, Zafar v. Saiyid, 2017 ONCA 919, Geliedan v. Radwah, 2020 ONCA 254, D.C. v. T.B., 2021 ONCA 562, K.K. v. M.M., 2021 ONCA 407, BTR Global Opportunity Trading Limited v. RBC Dexia Investor Services Trust, 2011 ONCA 620, Leis v. Leis, 2011 MBCA 109, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, J.P.B. v. C.B., 2016 ONCA 996

2460907 Ontario Inc. v. 1521476 Ontario Inc., 2021 ONCA 682

Keywords: Torts, Negligence, Duty of Care, Proximity, Pure Economic Loss, Relational Economic Loss, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Rules of Civil Procedure, Rule 21.01(1)(b), Canadian National Railway Co. v. Norsk Pacific Steamship Co., [1992] 1 S.C.R. 1021, 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35

Salvatore v. Tommasini , 2021 ONCA 691

Keywords: Contracts, Interpretation, Agreements to Agree, Intention to Enter into Binding Contractual Relations, Civil Procedure, Summary Judgment, Geoff R. Hall, Canadian Contractual Interpretation Law, 3rd ed., (Toronto: LexisNexis, 2016)

Smith v. GCAT Group Inc., 2021 ONCA 700

Keywords: Civil Procedure, Orders, Enforcement, Striking Pleadings, Rules of Civil Procedure, Rule 60.12(b), Oz Merchandising Inc. v. Canadian Professional Soccer League Inc., 2021 ONCA 520

M. L. v. B.T., 2021 ONCA 683

Keywords: Family Law, Child Protection, Custody and Access, Indigenous Children, Office of the Children’s Lawyer, Civil Procedure, Stay Pending Appeal, Fresh Evidence, Factums, An Act respecting First Nations, Inuit and Métis children, youth and families, S.C. 2019, c. 24, ss. 1, 10, Children’s Law Reform Act, R.S.O. 1990, c. C.12, Child, Youth and Family Services Act, 2017, S.O. 2017, c. 14, Sched 1, ss. 2, 74(3), 80, 101(3), 102, 116(1), 112(3), Courts of Justice Act, R.S.O. 1990, c. C43, s 89(3.1), Family Law Rules, s. 7(4), Rules of Civil Procedure, Rule 63.02(1), UD Trading Group Holding PTE. Limited v. TransAsia Private Capital Limited, 2021 ONCA 279

Gordon Dunk Farms Ltd. v. HFH Inc., 2021 ONCA 681

Keywords: Breach of Contract, Torts, Negligence, Civil Procedure, Limitation Periods, Discoverability, Limitations Act, 2002, S.O. 2002, c. 24, Schedule B, s. 14, Limitation of Actions Act, S.N.B. 2009, c. L-8.5, Becker v. Toronto (City), 2020 ONCA 607, Svia Homes Limited v. Northbridge General Insurance Corporation, 2020 ONCA 684, Kaynes v. BP p.l.c., 2021 ONCA 36, Grant Thornton LLP v. New Brunswick, 2021 SCC 31, McSween v. Louis (2000), 132 O.R. (3d) 304 (C.A.), Lawless v. Anderson, 2011 ONCA 102, Dale v. Frank, 2017 ONCA 32, leave to appeal to S.C.C. refused, 37494 (October 12, 2017), Morrison v. Barzo, 2018 ONCA 979

OMJ Mortgage Capital Inc. v. King Square Limited , 2021 ONCA 690

Keywords: ContractsInterpretation, Corner Brook (City) v. Bailey, 2021 SCC 29, Harvey Kalles Realty Inc. v. BSAR (Eglinton) LP, 2021 ONCA 426

Knight v. Knight-Kerr , 2021 ONCA 686

Keywords: Family Law, Equalization of Net Family Property, Domestic Contract, Matrimonial Home, Family Law Act, R.S.O. 1990 c. F.3, s. 2(10), s. 4(1), s. 5(1), s. 18(1), s. 52(1), and s. 52(2)

ESC Enterprises Inc. V. 1867295 Ontario Inc. , 2021 ONCA 687

Keywords: Contracts, Interpretation, Certainty, Restitution, Unjust Enrichment, Quantum Meruit, Corporations, Corporate Veil, Owners, Statata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, Yaiguaje v. Chevron Corporation, 2018 ONCA 472, Transamerica Life Insurance Co. of Canada v. Canada Life Insurance Co. (1996), 28 O.R (3d)

Sbihat v. Nasar , 2021 ONCA 701

Keywords:Civil Procedure, Originating Process, Statements of Claim, Service, Extension of Time, Rules of Civil Procedure, Rule 14.08(1)

Short Civil Decisions

Lalonde v. Agha , 2021 ONCA 704

Keywords: Civil Procedure, Costs


CIVIL DECISIONS

N. v. F., 2021 ONCA 688

[Paciocco J.A.]

COUNSEL:

F. L. Jamal and F. Yehia, for the appellant

B. R.G. Smith and L. Love-Forester, for the respondent

Keywords: Family Law, Custody and Access, Relocation, Child Abduction,  Civil Procedure, Conflict of Laws, Jurisdiction, Appeals, Stay Pending Appeal, Hague Convention, Convention on the Rights of the Child, Can. T.S. 1992, No. 3, Convention on the Civil Aspects of International Child Abduction, Can. T.S. 1983, No. 35, Supreme Court Act, R.S.C., 1985, c. S-26, s. 40(1), s. 65.1(1), and s. 65.1(2), Children’s Law Reform Act, R.S.O. 1990, c. C.12, s. 22, s. 23, and s. 40, N. v. F., 2021 ONCA 614, Zafar v. Saiyid, 2017 ONCA 919, Geliedan v. Radwah, 2020 ONCA 254, D.C. v. T.B., 2021 ONCA 562, K.K. v. M.M., 2021 ONCA 407, BTR Global Opportunity Trading Limited v. RBC Dexia Investor Services Trust, 2011 ONCA 620, Leis v. Leis, 2011 MBCA 109, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, J.P.B. v. C.B., 2016 ONCA 996

FACTS:

In this case, the appellant brought a motion pursuant to s. 65.1(1) of the Supreme Court Act for a stay of proceedings relating to the court’s decision in N. v. F., 2021 ONCA 614, pending her leave to appeal application to the Supreme Court of Canada.

N. v. F., 2021 ONCA 614

Our summary of N. v. F., 2021 ONCA 614 can be found here.

The facts and holding of that case, in brief, are as follows. The appellant is a Canadian citizen, and the respondent is a Pakistani national. The parties married in February 2012 and lived together in Dubai, the UAE, for eight years. They have two children under the age of five, who are both Canadian citizens. Neither the parties nor children are UAE nationals. In mid-2020, the appellant advised the respondent that she intended to take the children to Milton, Ontario, for a month-long trip to visit her parents. The respondent consented to the trip, and the appellant purchased return airline tickets. After arriving in Canada, the appellant told the respondent of her unilateral decision to not return to Dubai with the children. The appellant took no steps in the Ontario courts to determine the jurisdictional issue that arose regarding the custody and access of the children. The respondent commenced legal proceedings in Dubai and then in Ontario to have the children returned.

The appellant appealed the trial judge’s decision that Ontario did not have jurisdiction to deal with the case. The trial judge concluded that, on a balance of probabilities, the children’s best interests would be served by their return to Dubai so that a court there could adjudicate the matters of custody, access, and guardianship.

On appeal, the Ontario Court of Appeal considered six issues. The appeal was allowed in part, with Lauwers J.A. dissenting. Specifically, the court held that:

(1) Fresh evidence should not be admitted as it was of little or no relevance to the issues in the proceeding, and one of the documents could have been available at trial if the appellant had acted with reasonable diligence.

(2) The applicable standard of review for Custody and Support Orders was Deference, and for Questions of Foreign Law was Correctness.

(3) The trial judge did not err in declining jurisdiction under s. 22 of the CLRA. The trial judge was correct because the children were not living in Ontario with both parents since their arrival in June 2020, and the appellant failed to establish all six enumerated criteria under s. 22(1)(b).

(4) The trial judge did not err in declining jurisdiction under s. 23 of the CLRA. A trial judge’s power under s. 23 is discretionary, and the trial judge carefully considered the evidence and made a correct decision regarding its application to the case.

Lauwers J.A. dissented on this issue and found that the trial judge made a palpable and overriding error because he failed to properly assess the harm of an involuntary separation of the children from the appellant. Lauwers J.A. also stated the trial judge should have found a risk of serious harm to the children in the application of UAE custody law, because a parenting determination by the Dubai courts would not be made based on the children’s best interests, as understood under Ontario law. Accordingly, Lauwers J.A. would have allowed the appeal and ordered that the Ontario Superior Court had jurisdiction to make a parenting order in relation to the children.

(5) The trial judge did not err in declining to exercise parens patriae jurisdiction. The trial judge correctly applied the leading authority on parens patriae and there was no basis for appellate interference.

(6) Whether the trial judge erred in making an order under s. 40 of the CLRA was an issue that was not raised in the Notice of Appeal and was not argued by the appellant in her factum. Although the Office of the Children’s Lawyer raised the issue in their factum, the issue was not before the court and it declined to consider it. However, Brown JJ.A considered the issue in concurring reasons, as did Lauwers J.A. in dissenting reasons.

Brown JJ.A (concurring) held that the trial judge was correct in concluding that CLRA s. 40(3) was intra vires the legislative power of Ontario. Further, the trial judge was correct that s. 40(3) was about the return of children to a place that they are most closely connected to, and that an order under that provision did not infringe the appellant or children’s Charter rights under s. 2(a), 6(1), 7, or 15.

Lauwers K.A. (dissenting) held that s. 40 of the CLRA allows a court to order a child’s return to another jurisdiction in cases of wrongful retention. He held that, because of his earlier dissent that Ontario should exercise jurisdiction under s. 23, a return order under s. 40 was not available.

ISSUES:

(1) Should a stay of proceedings be granted pending an appeal to the Supreme Court of Canada?

HOLDING:

Motion granted.

REASONING:

(1) Yes.

A judge of the appeal court, whose order is being appealed to the Supreme Court of Canada, is authorized by s. 65.1(1) of the Supreme Court Act to order that the proceedings be stayed with respect to the judgment from which leave to appeal is sought, on the terms deemed appropriate. This authority can be exercised before the proposed appellant has served and filed a notice of leave to appeal “if satisfied that the party seeking the stay intends to apply for leave to appeal and that delay would result in a miscarriage of justice”.

Whether a stay should be ordered in the interests of justice pending a determination of leave to appeal begins with a consideration of three factors: (1) based on a preliminary assessment of the merits of the case, whether there is a serious issue to be tried; (2) whether the applicant would suffer irreparable harm if the application is refused, and; (3) which party would suffer greater harm from granting or refusing the stay pending a decision of the leave to appeal application. The strength of one factor can compensate for weakness in another.

(1) The threshold of whether there is a serious issue to be tried is low. Although it is raised when an appellate court has already ruled on the question, that raising is tempered where there is a dissenting appellate decision (such as in this case).

In this case, although the appellant identified no errors in the majority’s constitutional law analysis, the Court was persuaded that there were serious issues that arose from Lauwers J.A.’s dissent that could inspire the Supreme Court of Canada to grant leave to appeal. Specifically, the Court found three potential serious issues to be tried:

First, Lauwers J.A.’s concerns about the separation of the children and the mother, and the enforceability of the “with prejudice” agreement might depend on the proper outcome in non-Hague Convention cases when the risk of separation or unenforceability may not be more probable than not, but where those outcomes, if they occur, could pose significant risks to the welfare of the children.

Second, how the onus of proving serious risk operates when there is a risk of separation and yet an inability on the evidence to predict its impact.

Third, whether gender inequalities in the law of the UAE, as a matter of law, undermine the integrity of best interest determinations.

Accordingly, the Court concluded these issues may well be of public importance that could result in leave to appeal to the Supreme Court of Canada being granted.

(2) In custody cases where a stay of proceedings is sought, the overriding consideration is the best interests of the child. The Court was satisfied that, in the circumstances, there was a risk of irreparable harm to the children if a stay was denied. This conclusion was reached based on the fact that the status quo of the mother as primary caregiver could be interrupted if the children were removed to the UAE. Further, the Court found there was a risk that parenting rights could be determined based on gender-based principles or presuppositions rather than the best interests of the children.

(3) Finally, the Court was persuaded that the balance of convenience favoured granting the stay pending leave to appeal. The Court found that even assuming the children would be returned to Ontario if the appeal succeeded, the risk that the status quo relating to the children’s primary care could be disrupted pending a final judicial determination was of greater concern than the harm caused by delay. The Court also mentioned the risk of involuntary separation of the mother from the children, given the mother’s lack of legal status in the UAE.

The Court ordered a stay of proceedings on condition that the mother must file her application for leave to appeal to the Supreme Court of Canada within 45 days from the release of the September 14, 2021 decision.


2460907 Ontario Inc. v. 1521476 Ontario Inc., 2021 ONCA 682

[Lauwers, Harvison Young and Sossin JJ.A.]

COUNSEL:

P. Starkman and C. Zhang, for the appellants

E. Birnboim and M. Crampton, for the respondent

Keywords: Torts, Negligence, Duty of Care, Proximity, Pure Economic Loss, Relational Economic Loss, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Rules of Civil Procedure, Rule 21.01(1)(b), Canadian National Railway Co. v. Norsk Pacific Steamship Co., [1992] 1 S.C.R. 1021, 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35

FACTS:

The appellant 2460907 Ontario Inc. (“246”) appeals from an order striking its claim under Rule 21.01(1)(b) of the Rules of Civil Procedure, for pure economic loss arising from the respondent 1521476 Ontario Inc.’s (“152”) exercise of re-entry against 152’s tenant, 2456787 Ontario Inc. (“245”).

152 had entered into a lease with 245. Later, 245 was unable to afford the rent, stopped paying it, and asked 152 to waive or reduce the rent, a request 152 refused. 245 then wrote to 152 advising that a new restaurant to be located in the premises would be operated by 246 and requested that the original lease and the amending agreement both be changed to reflect that the tenant would now be 246. 152 responded by re-entering the premises and distraining the chattels of 245. 245 commenced an action for wrongful distraint, to which 246 was not a party. Over a year later, 246 commenced its own action against 152 for pure economic loss damages for the profits it was going to earn by operating a restaurant in the premises formerly occupied by 245. 152 brought a motion under Rule 21.01(1)(b) of the Rules of Civil Procedure to strike the claim as disclosing no reasonable cause of action, and was successful.

The motion judge found that, as a third party, 246 did not have a possessory or proprietary interest in the premises. 152 had not consented to an assignment of the lease and refused to enter into any new agreement with 246, and 246 could therefore not have acquired a possessory or proprietary interest in the property. The motion judge also denied 246 the opportunity to amend its claim.

ISSUES:

(1) Whether the trial judge incorrectly applied the test set out under Rule 21.01(1)(b) by not accepting the facts pleaded in the statement of claim as true?

(2) Whether the trial judge erred in his consideration of its tort claim for pure economic loss?

HOLDING:

Appeal dismissed.

REASONING:

(1) No.

The Court found no error in the motion judge’s finding that 152 did not consent to the assignment of the lease and that 246 therefore had no possessory or proprietary interest in the property. The finding was well grounded in the record before the motion judge and was open to him. The motion judge was aware that “152 failed or refused to allow 246 to occupy the premises.” The precise mechanism through which 246 did not obtain possessory or proprietary interest was not vital.

(2) No.

The Court found no merit to the appellant’s argument that 152 owed it a duty of care arising from its possessory or proprietary interest in 152’s property. Without such an interest there could not be an entitlement on the part of 246 to claim possessory or proprietary interest in 152’s property and thus a duty of care that could entitle it to economic loss.

The Court went on to distinguish the case from Canadian National Railway Co. v. Norsk Pacific Steamship Co., [1992] 1 S.C.R. 1021 (which remains the leading case on relational economic loss) on the basis that 246 did not have any relationship with 152, contractual or otherwise, that would entitle it to claim possessory or proprietary interest in 152’s property.

Given the motion judge’s finding that 152 had not consented to any assignment of the lease, there was nothing to ground the necessary finding of proximity.


Salvatore v. Tommasini , 2021 ONCA 691

[Benotto, Brown and Harvison Young JJ.A.]

COUNSEL:

A. McConnell, for the appellants

S. Denis, for the respondents

Keywords: Contracts, Interpretation, Agreements to Agree, Intention to Enter into Binding Contractual Relations, Civil Procedure, Summary Judgment, Geoff R. Hall, Canadian Contractual Interpretation Law, 3rd ed., (Toronto: LexisNexis, 2016)

FACTS:

The appellants and some of the respondents entered into a series of documents regarding the acquisition and operation of a helicopter: a June 24, 2016 Letter of Intent (the “LOI”); an LOI amending agreement dated July 15, 2016 (the “July Letter Agreement”); a September 14, 2016 Aircraft Management Agreement (the “AMA”); and a September 14, 2016 AMA amending agreement (the “September Letter Agreement”).

In granting summary judgment in favour of the respondents, the motion judge struck the appellants’ claim that the agreements contained a binding obligation on the part of the respondents to pay for one-half of the acquisition cost of the helicopter (the “Buy-in Claim”). Further, he dismissed the entire action against the respondents; denying the appellants damages for other breaches claimed.

ISSUES:

(1) Did the motion judge err in finding that the respondents were not subject to an enforceable promise to pay the appellant half of the acquisition cost of the helicopter?

(2) Did the motion judge err in dismissing the action in its entirety?

HOLDING:

Appeal dismissed.

REASONING:

(1) No.

Article 14.13 of the AMA – the so-called “entire agreement clause” – provided, in part, that “[t]his Agreement and the matters referred to herein constitute the entire agreement between Owner and Operator regarding the subject matter hereof”. The clause went on to state that the AMA superseded and cancelled all prior agreements “with respect to or in connection with the subject matter of this Agreement”.

The motion judge erred in law by determining that this clause expressly cancelled the LOI and July Letter Agreement. A recital to the AMA referred to an arrangement to acquire a direct or indirect 50% interest. This arrangement was a subject-matter discussed in the LOI and July Letter Agreement.

With that said, the error of law was of no consequence. The LOI and July Letter Agreement lacked sufficient material facts to characterize them as legal contracts, especially given the absence of fundamental business terms on which the co-ownership and the jointly owned business of the parties in operating the helicopter would be formed. The LOI simply contemplated the acquisition cost for an interest, but the rights and obligations of those with an interest in the “Owner” were to be set out in a “definitive” Owners Agreement. Therefore, any further business dealings with respect to the helicopter would be conditional on the negotiation of the definitive agreement settling all material aspects of the separate stand-alone business of owning and operating it. However, this agreement never came to fruition.

(2) No.

In response to the respondents’ notice of motion to dismiss the entire action, the appellants failed to adduce any evidence particularizing or supporting their pleaded AMA and Internal Cost Claims. As a result, there was no evidence before the motion judge that would have permitted him to conclude that there was a genuine issue requiring trial regarding any damages suffered by the appellants in respect of their AMA and Internal Cost Claims.


Smith v. GCAT Group Inc., 2021 ONCA 700

[Hourigan, Huscroft and Coroza JJ.A.]

COUNSEL:

R. Macklin and L. Bendu, for the appellants

P. Masic, for the respondents

Keywords:Civil Procedure, Orders, Enforcement, Striking Pleadings, Rules of Civil Procedure, Rule 60.12(b), Oz Merchandising Inc. v. Canadian Professional Soccer League Inc., 2021 ONCA 520

FACTS:

The motion judge dismissed the appellants’ claim against the respondents for breach of contract, alleging that the respondents supplied inferior synthetic limestone rather than the Italian limestone for which they had contracted. The appellants’ claim, which commenced in 2012, was dismissed under Rule 60.12(b) because the appellants failed to comply with interlocutory orders requiring them to permit the respondents to inspect the limestone at the centre of the dispute.

The appellants argued that they should have been permitted a final opportunity to provide access to the respondents to inspect the limestone.

ISSUES:

(1) Should the appellants have been permitted a final opportunity to provide access to the respondents to inspect the limestone?

(2) Should the appellants be granted leave to file fresh evidence demonstrating their lawyer gave erroneous advice on which they relied?

HOLDING:

Appeal dismissed.

REASONING:

(1) No.

The motion judge carefully reviewed the history of the action and found that no matter how many times the appellants were told they must permit an inspection, they would not do so. The motion judge drew an inference that the appellants had no case and they must know it. The Court held that in these circumstances the dismissal of the action under Rule 60.12(b) was amply justified, and the motion judge was not required to provide the appellants with another opportunity to disobey a court order before dismissing the action.

(2) No.

The Court found there was no basis to set aside the motion judge’s order because of the appellants’ complaint about their counsel’s strategy. The Court therefore did not admit the appellants’ fresh evidence that purported to demonstrate their counsel’s failings.


M. L. v. B.T., 2021 ONCA 683

[Paciocco J.A.]

COUNSEL:

J. Gagné, for the appellants, M.L. and D.L.

E.R. Van Voort, for the respondent, D.C.

K. Hensel, for the respondent, Dilico Anishinabek Family Care

Keywords: Family Law, Child Protection, Custody and Access, Indigenous Children, Office of the Children’s Lawyer, Civil Procedure, Stay Pending Appeal, Fresh Evidence, Factums, An Act respecting First Nations, Inuit and Métis children, youth and families, S.C. 2019, c. 24, ss 1, 10, Children’s Law Reform Act, R.S.O. 1990, c. C.12, Child, Youth and Family Services Act, 2017, S.O. 2017, c. 14, Sched 1, ss 2, 74(3), 80, 101(3), 102, 116(1), 112(3), Courts of Justice Act, R.S.O. 1990, c. C43, s 89(3.1), Family Law Rules, s. 7(4), Rules of Civil Procedure, Rule 63.02(1), UD Trading Group Holding PTE. Limited v. TransAsia Private Capital Limited, 2021 ONCA 279

FACTS:

J.T. was apprehended by Dilico Anishinabek Family Care (“Dilico”) and placed in the appellants’ care six years ago, when she was 8 days old. Dilico intends to terminate the placement so that J.T. can be placed with her mother, D.C.’s, family, in the Berens River First Nation in Manitoba. When J.T. was four months old, Dilico executed the first of a series of six-month “customary care agreements”. The customary care agreements were also executed by J.T.’s mother, D.C., and the band to which D.C. belongs. Each customary care agreement provided that Dilico would be the legal guardian of J.T. during the duration of the agreement, and that Dilico would be entitled “to assume the duties of parent of the child” and “have the rights and responsibilities as parents of the child for the purposes of the child’s care”. Dilico submitted that its long-term plan was to use the customary care agreements as a mechanism for working towards reunification of J.T. with her indigenous family and community. The appellants submitted that it was in J.T.’s best interest to remain with them and instituted custody proceedings under the Children’s Law Reform Act.

Dilico brought a motion to strike the appellants’ custody application arguing that, as “foster parents” within the meaning of s. 2 of the Child, Youth and Family Services Act (CYFSA), the appellants were prohibited from applying for custody. The appellants sought a dismissal of the motion. They argued that they were not foster parents but “care providers” as defined in An Act respecting First Nations, Inuit, and Métis children, youth and families, the custody care agreements were invalid, and that the care agreements were not in J.T.’s best interests. The motion judge dismissed the motion, ruled that the appellants were entitled to continue their custody application, and awarded the appellants interim custody.

Dilico appealed the motion judge’s order. The appeal judge allowed the appeal and found that the motion judge had erred in concluding the customary care agreements were not creations of the CYFSA, the motion judge committed a palpable and overriding error in finding that the applicants were not “foster parents” within the meaning of s. 2 of the CYFSA, and the motion judge erred in not deferring to Dilico’s placement decision. The appeal judge set aside the motion judge’s decision, struck the appellants’ application for custody, and prohibited the appellants from being parties in a case involving the custody of or access to J.T.

The appellants brought a motion to stay the judge’s decision pending the final determination of their appeal. Dilico did not oppose a conditional stay that would require J.T. to reside with the applicants pending appeal. However, Dilico requested that the conditional stay maintain their role as the legal guardian of J.T.

The appellants also sought orders for additional relief, including the admission of fresh evidence, the representation of J.T. on appeal by the Office of the Children’s Lawyer, and leave to file an extended factum.

ISSUES:

(1) Should the Court grant the appellants’ motion to stay the appeal decision pending further appeal to the Court?

(2) Should the Court grant the appellants’ requests for additional relief?

HOLDING:

Motion granted.

REASONING:

(1) Yes (conditionally).

The Court ruled that granting the motion to stay the appeal decision was in the interests of justice. The Court applied the three factors required for consideration of such a stay, recently described in UD Trading Group Holding PTE. Limited v. TransAsia Private Capital Limited. The Court found that there were serious issues to be tried, that the appellants and J.T. would suffer serious harm if the appellants lost their caregiving role without further determination, and that the appellants and J.T. would suffer greater harm if the Court refused the stay than Dilico, D.C. and other members of J.T.’s family and the indigenous community would experience if the Court ordered the stay.

The Court further found that as an indigenous child, J.T.’s best interests required specific consideration of both the “irreparable harm” and “greater harm” factors. The Court agreed with Dilico that the stay order must enable Dilico to take reasonable steps to nurture J.T.’s connection to her indigenous culture, her family and her community. Thus, the Court imposed conditions on the stay order requiring the most recent customary care agreement to remain in effect pending further court order and entitling D.C. and B.T. to supervised access. The Court also expedited the appeal.

(2) Yes (some).

The Court considered the orders sought for additional relief. The Court was of the view that the appellants’ request for an order admitting fresh evidence was premature. The Court ordered that the appellants were permitted to file an extended factum (no more than 45 pages) if intervenors were permitted to participate in the appeal. Finally, the Court ordered that the Office of the Children’s Lawyer could act as legal representative for J.T.


Gordon Dunk Farms Ltd. v. HFH Inc., 2021 ONCA 681

[Strathy C.J.O., Feldman and van Rensburg JJ.A.]

COUNSEL:

D. Zacks and G. Brimblecombe, for the appellant

P.W. Kryworuk and J.R.W. Damstra, for the respondent HFH Inc.

J.A. LeBer and E.A.F. Grigg, for the respondent M. Engineering & Construction Inc.

No one appearing for the respondent F. Concrete Forming (2011)

Keywords: Breach of Contract, Torts, Negligence, Civil Procedure, Limitation Periods, Discoverability, Limitations Act, 2002, S.O. 2002, c. 24, Schedule B, s. 14, Limitation of Actions Act, S.N.B. 2009, c. L-8.5, Becker v. Toronto (City), 2020 ONCA 607, Svia Homes Limited v. Northbridge General Insurance Corporation, 2020 ONCA 684, Kaynes v. BP p.l.c., 2021 ONCA 36, Grant Thornton LLP v. New Brunswick, 2021 SCC 31, McSween v. Louis (2000), 132 O.R. (3d) 304 (C.A.), Lawless v. Anderson, 2011 ONCA 102, Dale v. Frank, 2017 ONCA 32, leave to appeal to S.C.C. refused, 37494 (October 12, 2017), Morrison v. Barzo, 2018 ONCA 979

FACTS:

In 2011, the appellant decided to build a new hog barn on their property. The appellant’s principals engaged the respondents, M. Engineering & Construction Inc. (“M”) to design the barn, HFH Inc. (“HFH”) to oversee construction, and F. Concrete Forming (2011) (“F”) to undertake the concrete work. The barn was completed in 2013. On May 6, 2014, the barn collapsed and, as a result, the appellant suffered a loss. The appellant’s insurance covered part, but not all, of the loss. The insurer paid the appellant for the covered loss and retained a lawyer to sue the respondents to pursue the subrogated claim. The lawyer was also retained to sue for the balance of the loss on behalf of the appellant directly. The lawyer did not commence the action until May 24, 2016.

All parties brought motions for summary judgment to determine whether the action was brought within time or was statute-barred. After the collapse, the insurance adjuster had retained an expert to examine the barn and report on the cause of the collapse. The appellant received the final expert report on May 21, 2014. The motion judge found that the principals knew they had a claim, within the meaning of the Limitations Act, 2002 (the “Act”) before they received the final report. Thus, the motion judge found that the action was statute barred. The appellants appealed the motion judge’s decision.

ISSUES:

(1) Did the motion judge err by failing to treat each of the appellant’s 20 pleaded acts or omissions as separate claims, and conduct individual discoverability analyses for each?

(2) Did the motion judge err by failing to rule on the appellant’s motion regarding the timeliness of its action as against the respondent, F, who did not defend the motion?

(3) Did the motion judge err with respect to the meaning and effect of section 14 of the Act?

HOLDING:

Appeal dismissed.

REASONING:

(1) No.

The Court held that it was appropriate to address this issue on appeal. As per Becker v. Toronto (City) and Svia Homes Limited v. Northbridge General Insurance Corporation, the record was sufficient, and the issue was an issue of law.

The Court held that one can have a claim for the same remedy based on one or more acts or omissions that may have caused a loss. Different acts or omissions may constitute particulars of a claim, but a claim is for a legal remedy in a court proceeding.

The Court further held that a plaintiff with a negligence claim does not need to have discovered every constituent element of that claim before the limitation period begins to run. A plaintiff need only know that an incident occurred that resulted in a loss, that the defendant failed to do something that caused that loss, and that, having regard to the nature of the injury, loss, or damage, a court proceeding is an appropriate means to seek a remedy. The Court adopted the “plausible inference of liability” standard cited by Justice Moldaver in Grant Thornton LLP v. New Brunswick. The Court found that all of the appellant’s allegations could be classified under three categories: faulty design, faulty construction, and faulty inspection during construction. The motion judge found that the principals knew shortly after the collapse that the respondents were responsible for those aspects. Thus, the Court found that the “plausible inference of liability” test had been met.

(2) No.

The Court was satisfied, based on the reasons of the motion judge, that his failure to find that the action was statute-barred against F, as well as the other two respondents, was an oversight. The motion judge’s findings applied to the appellant’s knowledge of the involvement of each of the three respondents. Thus, the Court held that the action was statute-barred against all three respondents, including F.

(3) Yes.

The Court held that the motion judge erred by referring to section 14 of the Act. However, the error had no effect on the outcome of the motion. The Court found that the purpose of section 14 is to allow a potential defendant to begin running a limitation period so that they can have certainty about when an action will become statute-barred. Section 14 allows a court to take notice into account if a limitation issue arises in respect of an action after it is commenced. The Court found that Section 14 had no application to the facts of the case, as the potential plaintiff had put the potential defendants on notice.


OMJ Mortgage Capital Inc. v. King Square Limited , 2021 ONCA 690

[Benotto, Brown and Harvison Young JJ.A.]

COUNSEL:

M. J. Neirinck, for the appellant

M. L. Solmon and R. Joshi, for the respondent

Keywords: ContractsInterpretation, Corner Brook (City) v. Bailey, 2021 SCC 29, Harvey Kalles Realty Inc. v. BSAR (Eglinton) LP, 2021 ONCA 426

FACTS:

The appellant, King Square Limited (“KSL”), appealed the trial judge’s holding that the respondent, OMJ Mortgage Capital Inc. (“OMJ”), was entitled to commissions on the Second and Third Loans pursuant to the terms of a Commission Agreement (all described below).

In 2014, KSL sought construction financing for its project in Markham, Ontario, and engaged a mortgage broker, OMJ. In February 2014, OMJ obtained an oral commitment for the financing from Firm Capital Corporation (“FCC”). OMJ and KSL entered into a Commission Agreement in respect of construction financing for the project, which provided for a one-year term, following which there would be a one-year holdover period. In May 2014, KSL accepted a commitment letter for $50 million in construction financing from FCC (the “Original Commitment”). That loan closed in November 2014. KSL paid OMJ a commission in accordance with the terms of their Commission Agreement.

In January 2017, KSL and FCC entered into a Mortgage Loan Amendment and Renewal Agreement with respect to the $50 million loan (the “Renewal Agreement”) that increased the amount loaned by an additional $12.9 million (the “Second Loan”). Later that year, in September 2017, KLS and FCC entered into a second Mortgage Loan Amendment Agreement (“Amendment #2”) that provided for a further loan increase of $11.8 million (the “Third Loan”). KSL did not advise OMJ about the Second or Third Loans. When OMJ learned about the Second and Third Loans, it demanded payment of further commissions from KSL under the Commission Agreement. KSL refused to pay any further commissions. OMJ successfully sued KSL for the commissions.

ISSUES:

(1) Did the trial judge err in her interpretation of the Commission Letter in finding that OMJ was owed commission?

a. Did the trial judge fail to characterize the Second and Third Loans as “new loans” based on a different foundation than the Original Commitment?

b. Did the trial judge analyze whether the commission-earning events for which the Second and Third Loans were made had occurred before the respective deadline dates set out in the Commission Agreement?

HOLDING:

Appeal dismissed.

REASONING:

(1) No.

There was no dispute that the trial judge correctly identified the principles of contractual interpretation applicable to the issue before her. Her interpretation of the Commission Agreement was a commercially reasonable one, in the context of the entire agreement and the factual matrix, and was entitled to deference.

a. The trial judge held that the Second and Third Loans were not new loans but further advances made by FCC pursuant to the original Loan Commitment. KSL did not demonstrate that these findings of fact were infected by palpable and overriding error.

b. The trial judge’s analysis was firmly anchored in the language of the Commission Agreement, as interpreted in light of the factual matrix, including the circumstances surrounding the Original Commitment, the Second Loan and Third Loan. Applying the required deferential standard of review, there was no basis for appellate intervention with the trial judge’s conclusion that the Commission Agreement required KSL to pay OMJ commissions for the Second and Third Loans in 2017.


Knight v. Knight-Kerr , 2021 ONCA 686

[Feldman, Paciocco and Nordheimer JJ.A.]

COUNSEL:

L. Stojni-Kassik and E.F. Metcalfe, for the appellant

M.K., acting in person

Keywords: Family Law, Equalization of Net Family Property, Domestic Contract, Matrimonial Home, Family Law Act, R.S.O. 1990 c. F.3, s. 2(10), s. 4(1), s. 5(1), s. 18(1), s. 52(1), and s. 52(2)

FACTS:

The parties married in March 2009, after signing a domestic contract, the “Family Agreement”, that the wife prepared. The wife brought the original matrimonial home (the Kroeger property) into the marriage. The parties lived in that home for a few years, then sold it and purchased a second home, where they lived at the date of separation, which was in July 2017.

The Family Agreement contained a provision whereby the parties agreed to specific treatment of $45,000 representing the deposit that the wife paid to purchase the Kroeger property, which became the parties’ matrimonial home. The Family Agreement specified that the wife would preserve her entitlement to this $45,000 from the sale proceeds of whatever home they were living in in the event of marriage breakdown, whether the parties still lived in the Kroeger property or had moved to another home.

In addition to finding that the Family Agreement was a valid and binding domestic contract, the trial judge found that the husband owed the wife an equalization payment of $43,547. When dealing with equalization, the trial judge did so by reference to the form of the net family property (“NFP”) statement and what should be included in each Part of the form. Under “Part 4(a): Land”, the trial judge found that, because the parties agreed that the wife was entitled to $45,000 more than the husband out of the valuation-date value of the matrimonial home, his share of the value of the second home was $263,500, while hers was $308,500. At the same time, the $45,000 was shown as an exclusion from the wife’s NFP because, pursuant to the Family Agreement, the $45,000 deposit belonged exclusively to her and was not shared with the husband.

Under “Part 6: Property, Debts, and Other Liabilities on Date of Marriage”, on the wife’s side of the ledger, the trial judge included the value of the first home ($250,000) and deducted the mortgage ($157,715). The trial judge thereby included the full amount of the equity in the Kroeger property at the date of marriage, namely $92,285, as a deduction on the wife’s side of the ledger. In the last part of the NFP form, “Part 7: Value of Property Excluded under Subs. 4(2) of the ‘Family Law Act’”, the trial judge stated that the wife was also entitled to exclude $45,000 representing her deposit from the Kroeger home.

The sole issue raised by the husband on the appeal was the calculation of the NFP in respect of the treatment of the two homes, and the interpretation and application of the Family Agreement provision regarding the $45,000.

ISSUES:

(1) Did the trial judge err in his approach to the equalization payment by double counting the respondent wife’s $45,000 deposit in the Kroeger property?

HOLDING:

Appeal allowed in part.

REASONING:

(1) Yes.

The Court saw no error in the trial judge’s approach to the treatment of the $45,000 as agreed by the parties. The proceeds of the second property were jointly owned on the valuation date and the Family Agreement provided that $45,000 of the proceeds of the sale are to be treated as belonging to the wife. The FLA provides that that amount is an exclusion from the wife’s net family property.

Because the parties had sold the Kroeger property, it was no longer their matrimonial home at the date of separation, and therefore its marriage date value was deductible by the wife. However, the trial judge allowed an excluded property (the $45,000 deposit) to also be deducted. This was an error because the same property cannot be an exclusion and a marriage-date deduction. The effect of this error was to double count the $45,000 in the wife’s favour.

The Court allowed the appeal to the extent that the Court would subtract $45,000 from the wife’s date of marriage deduction of $92,285, representing her equity in the Kroeger property, and then recalculate the equalization payment owed by the husband to the wife. The result was that instead of owing the wife an equalization payment of $43,547, the husband owed the wife an equalization payment of $38,924.


ESC Enterprises Inc. V. 1867295 Ontario Inc., 2021 ONCA 687

[Benotto, Brown and Harvison Young JJ.A]

COUNSEL:

D. P. Preger, for the appellants ESC Enterprises Inc. & Strongco Plastics Ltd.

M. Poliak, for the respondents M. Hernandez, M. Hernandez and Strongco Ltd.

Keywords: Contracts, Interpretation, Certainty, Restitution, Unjust Enrichment, Quantum Meruit, Corporations, Corporate Veil, Owners, Statata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29, Yaiguaje v. Chevron Corporation, 2018 ONCA 472, Transamerica Life Insurance Co. of Canada v. Canada Life Insurance Co. (1996), 28 O.R (3d)

FACTS:

The appellant ESC Enterprises Inc. (“ESC”) is held by a sole shareholder. E, who also owns 50% of the shares of the appellant Strongco Plastics Ltd. (“Strongco”). The respondent M. and his business partner operated a company “BuiltRite”. Builtrite was deemed bankrupt on October 31, 2017. In 2017, a representative from BuiltRite approached ESC with a business plan. The plan contemplated a convertible loan of $1 million, secured against BuiltRite assets worth $5.5 million. There were two types of assets: 1) the unencumbered “Trailered Assets”, which included dies worth $2 million and were owned by a separate company, Strongco; and 2) encumbered “Warehoused Assets”, which were owned by BuiltRite. Some of the Trailered Assets had been loaned from a third party and would not form part of the security for the proposed investment.

E. proposed an alternative structure whereby a new company would operate the business and E. would advance the funds to the new company on a secured basis. On February 2, 2018, the new company, Plastics, was incorporated. It was agreed that Plastics would purchase the Warehoused Assets from the facility where they were stored and Strongco would roll the Trailered Assets into Plastics.

ESC registered a security interest under the Personal Property Security Act (PPSA) for all Plastics’ inventory, equipment, accounts, personal property and motor vehicles in February 2018. On March 14, 2018, a Unanimous Shareholders Agreement (“USA”) was signed between the principals of the corporations. At this time, ESC executed an undertaking in favour of Plastics, stating that ESC would advance an aggregate of $1 million, less all amounts advanced at any time and listed in the grid promissory note. The advancement would occur provided “there is no impediment to the advancement of the business of the Corporation on a profitable basis, other than the failure of the undersigned to advance the amounts provided for herein on the terms set forth herein”.

To effect a “roll in” of the Trailered Assets into Plastics, a Quitclaim Deed dated February, 2018 was prepared by counsel for ESC and plastics. The Quitclaim Deed stated that Strongco quitclaimed all right, title and interest in and to the personal property and assets listed on “Schedule A” for the benefit of Plastics. When the Quitclaim was signed on April 13, 2018, Schedule A was blank. M.’s counsel advised counsel for ESC and Plastics that Schedule A would need to be revised once M. had inventoried the equipment, and then a revised Schedule A would be “slip sheeted in”.

M never completed an inventory and no Schedule A was “slip sheeted” in. By August 1, 2018, there was insufficient remaining committed capital to resume the business. The parties agreed to sell the Trailered Assets and Warehoused Assets. On October 2. 2019, while attempting to sell the assets, M. raised question of ownership. In February 2019, M. sold certain dies for $85,000, notwithstanding the question of ownership. The parties agreed that M. was to receive an annual salary of $100,0000 plus a yearly bonus of up to $40,000. They disagreed as to when the salary was supposed to commence.

Two applications were brought in the court below giving rise to these two appeals:

(1) In the first application, the appellants ESC and Plastics sought an order declaring that equipment had been transferred to Plastics. The motion judge dismissed the application on the basis that the Quitclaim agreement was not enforceable. The application judge determined that the Quitclaim was not a binding contract because it lacked certainty and because no consideration was given for the Quitclaim. The application judge held that the Quitclaim was unclear as to which assets formed part of Schedule A, there was no agreement on the timing of the purported transfer of assets from Strongco to Plastics and the words “roll-in” were never defined. ESC and Plastics appealed.

(2) In the second application, the applicant M. sought compensation for work he had performed. The motion judge granted his application. The application judge ordered that ESC pay M. for work performed for Plastics from January to August 2018. She found that ESC was unjustly enriched by M.’s services from January to August 2018, as M was deprived of a living, ESC benefited from his services and there was no reason for the deprivation. She ordered ESC to pay M. $66,666 for January to August 2018, being the prorated amount of a salary of $100,000. ESC and Plastics appealed.

ISSUES:

(1) Did the application judge err in determining that the Quitclaim was not a binding contract?

(2) Did the application judge err by ordering ESC to pay M. for work performed for Plastics?

HOLDING:

Appeal allowed in part.

REASONING:

(1) No.

There was no error in the application judge’s determination that the Quitclaim was unenforceable. The Quitclaim did not specify the timing for the transfer of assets and neither party had a real understanding of what the Quitclaim represented. Therefore, the agreement could not constitute an enforceable contract. The appellants asserted that the equitable maxim “equity considers done that which ought to have been done” should save the agreement. The test for finding that an agreement exists at common law is set out in Owners, Strata Plan LMS 3905 v. Crystal Square Parking Corp., 2020 SCC 29: “the test is objective, and the offer, acceptance, consideration and terms may be inferred from the parties’ conduct and the surrounding circumstances”. The Court concluded that here, essential terms could not be inferred due to the parties’ unclear intentions. The standalone issues with the Quitclaim, aside from the issues with Schedule A, meant that even if equity treated Schedule A as finalized, the Quitclaim would still be unenforceable. Thus, the appellants the appellants could not rely on the equitable maxim to render Quitclaim enforceable.

(2) Yes.

The application judge’s determination with respect to M.’s salary could not stand for three interrelated reasons.

First, the application judge accepted M.’s evidence but did not discuss emails which appeared to indicate that the agreement was not to pay during the preparation phase. Second, the application judge did not provide an analysis, in light of the emails to explain the request for services, of ESC’s encouragement or acquiescence to M.’s work. Third, M.’s work was done for Plastics, not ESC, but ESC was ordered to pay. Even though the main shareholder of each corporation was the same person, there was no reason to pierce the corporate veil and require ESC to pay for work done for Plastics.


Sbihat v. Nasar , 2021 ONCA 701

[Hourigan, Huscroft and Coroza JJ.A.]

COUNSEL:

T. J. McCarthy and R. J. Campbell, for the appellant

D. Zuber and A. Pressé, for the respondents

Keywords: Civil Procedure, Originating Process, Statements of Claim, Service, Extension of Time, Rules of Civil Procedure, Rule 14.08(1)

FACTS:

The action arose out of a motor vehicle accident that occurred on April 28, 2016. The defendants D. S. T. and Carmel Transport International Ltd. were served with the statement of claim in January or February 2020 – approximately 16 months after the six-month deadline for service of a statement of claim prescribed by r. 14.08(1) of the Rules of Civil Procedure. The defendant AJM Toor Group Inc. was never served.

The appellant moved to validate service and extend the time for service. The motion was not opposed by the respondent L. A. N. However, it was opposed by the remaining respondents.

The motion was initially scheduled for October 2020, but the appellant’s former counsel could not proceed on that date for medical reasons. The T. Respondents consented to an adjournment on the understanding that the motion would be argued on the record already filed with the court. The appellant’s former counsel agreed to this undertaking in writing. Despite that agreement, the appellant’s former counsel served and filed a supplementary affidavit six days before the motion was to be argued.

The motion was ultimately heard on November 10, 2020. The motion judge had to consider two issues: (1) whether to admit the appellant’s supplementary affidavit, and (2) whether to validate service and grant the extension of time for service.

The motion judge refused to consider the appellant’s supplementary affidavit because the appellant had previously consented not to file additional materials. Accordingly, she held that it was improper for the appellant to attempt to resile from that agreement.

Ultimately, the motion judge dismissed the motion. She found that the court should not extend the time for service where to do so would prejudice the respondents, and the onus was on the appellant to show that there was no prejudice. According to the motion judge, the appellant had provided an insufficient explanation for the delay and had adduced no evidence of a lack of prejudice beyond a bald assertion that the respondents would suffer no prejudice. The motion judge further found that the T. Respondents would suffer actual prejudice in their ability to conduct investigations, preserve evidence, and obtain timely medical assessments.

ISSUES:

(1) Should the court admit fresh evidence?

(2) Did the motion judge err in refusing to validate service and extend the time for service?

HOLDING:

Appeal allowed.

REASONING:

(1) No.

The court held that it was a misnomer to label the proposed evidence as fresh because it was filed on the prior motion. The court concluded the jurisprudence regarding the filing of fresh evidence was of no assistance, given that the evidence was clearly available on the return of the motion.

In the court’s view, the motion judge did not err in rejecting the evidence on the prior motion. On the record before the motion judge, it was clear that the parties had reached an agreement that no further material would be filed. Accordingly, the motion judge was correct in holding the parties to that agreement. (2) Yes.

The court held that the motion judge erred in her analysis of whether to validate service and extend the time for service in two respects.

First, the motion judge made a palpable and overriding error of fact in finding that there was not a sufficient explanation for the delay in service. The unchallenged evidence filed on the motion made clear that the delay was attributable to the former counsel’s inadvertence.

Second, the motion judge failed to consider that the insurer for the T. Respondents had notice of the accident and the fact that the appellant was an involved person. The court held that this evidence was sufficient to meet the appellant’s onus of establishing that the T. Respondents would suffer no prejudice if the order sought was granted. On the evidence before the court, there was nothing to suggest that the T. Respondents had been hindered in any way in investigating the nature and extent of the appellant’s injuries.

Accordingly, it was evident that the appellant had met the test to validate service and extend the time for service of the statement of claim.


SHORT CIVIL DECISIONS

Lalonde v. Agha , 2021 ONCA 704

[Brown, Roberts and Zarnett JJ.A.]

COUNSEL:

R. J.M. Ballance, for the appellant

M. DiCarlo, for the respondent

Keywords: Civil Procedure, Costs