There were several important civil decisions released this week.
In Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc and Sankar v. Bell Mobility Inc., the Court reconsidered, but ultimately upheld, its prior decisions on appeal. Both those cases involved the standard of review from decisions of contractual interpretation. The unsuccessful parties in both matters sought leave to appeal to the Supreme Court. While the leave applications were pending, the Supreme Court released its decision in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co, which modified Sattva Capital Corp. v. Creston Moly Corp by clarifying that the standard of review is correctness, not palpable and overriding error, for standard form contracts and extricable questions of law. Rather than grant or deny leave, the Supreme Court remanded both cases back to the Court of Appeal for reconsideration in light of Ledcor.
In Romspen Investment Corporation v. Courtice Auto Wreckers Limited, the Court of Appeal, in a split decision, lifted a stay of proceedings imposed in a receivership to permit a union to proceed with a certification hearing and unfair labour practices complaint after the receiver terminated some of the employees after the certification application had been commenced. The Court was not satisfied on the evidence that the unionization of the employees would hinder the sale process. In his dissent, Lauwers JA warned that permitting unions to certify in the middle of insolvency proceedings will result in a “sea change” in insolvency practice.
In Tim Ludwig Professional Corporation, the Court extended Keays v Honda Canada aggravated damages for intangible harms flowing from the manner of dismissal in employment cases to the explusion of partners from partnerships. Applying Hadley v Baxendale, such damages were found to have been within the reasonable contemplation of the parties at the time the partnership agreement was entered into.
Other topic covered included coverage under CGL policies, family law, jurisdiction and wills and estates.
Wishing everyone a nice weekend and to those who celebrate, a Happy Easter long weekend!
Blaney McMurtry LLP
Tel: 416 593 2953
Table of Contents:
[Cronk, Pepall and Miller JJ.A.]
D.H. Rogers, Q.C. and R. Moore, for the appellan
M. J. Halpin, for the respondent
Heard: In Writing
Keywords: Real Property, Contracts, Commercial Leases, Interpretation, Standard of Review, Extricable Questions of Law, Correctness, Supreme Court Act, Remand Order, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., Sattva Capital Corp. v. Creston Moly Corp
Facts:On October 1, 2014, Deslaurier Custom Cabinets Inc. (the “Tenant”) obtained summary judgment in the Superior Court of Justice against 1728106 Ontario Inc. (the “Landlord”) for recovery of its losses arising from a fire at premises leased by it from the Landlord under a commercial lease dated November 28, 2007 (the “Lease”). The fire occasioned significant damage to the Landlord’s building and the Tenant’s property and business.
The Landlord appealed. On April 4, 2016, the Court of Appeal allowed the appeal, set aside the summary judgment and dismissed the Tenant’s action against the Landlord (the “Appeal Decision”). On June 3, 2016, the Tenant sought leave to appeal to the Supreme Court of Canada. On September 15, 2016, while the Tenant’s leave application was pending, the Supreme Court released its decision in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co (“Ledcor”).
The Supreme Court did not grant or deny leave to appeal. Instead, on October 21, 2016, it directed that the case forming the basis of the application for leave to appeal be remanded to the Court of Appeal, pursuant to s. 43(1.1) of the Supreme Court Act, for disposition “in accordance with Ledcor” (the “Remand Order”).
After the Remand Order, the Court of Appeal requested and received submissions from the parties on three issues: (a) the meaning and effect of the Remand Order; (b) the appropriate disposition in light of Ledcor; and (c) whether oral submissions should be received, at the request of the parties. No request for a further oral hearing was made. Accordingly, the remand case proceeded on the basis of the parties’ written submissions.
Holding: Appeal decision affirmed.
- What is the meaning and effect of the Remand Order?
- What is the appropriate disposition in light of Ledcor?
- What is the meaning and effect of the Remand Order?
Having considered the terms of the Remand Order, the parties’ submissions and the available authorities, it requires the Court of Appeal to reconsider its previous decision in light of the Supreme Court’s authoritative pronouncements in Ledcor on issues that may have affected the Court of Appeal’s disposition of the appeal. The Court of Appeal should not revisit questions that Ledcor does not touch upon. If the application of Ledcor mandates a different disposition, the Court of Appeal should alter its earlier decision in light of the teachings of Ledcor. If it does not, the Court of Appeal should affirm its earlier decision.
- What is the appropriate disposition in light of Ledcor?
(i) Standard of Review Discussion in Appeal Decision
First, Sattva Capital Corp. v. Creston Moly Corp (“Sattva”) holds that in rare cases the correctness standard of review will apply to questions of contractual interpretation where it is “possible to identify an extricable question of law from within what was initially characterized as a question of mixed fact and law”. The Supreme Court explained in Sattva that “extricable questions of law” include legal errors involving “the application of an incorrect principle, the failure to consider a required element of a legal test, or the failure to consider a relevant factor”.
Second, at the time of the Appeal Decision, the jurisprudence of some provincial appellate courts, including this court’s decision in MacDonald v. Chicago Title Insurance Company of Canada, recognized an exception to the Sattva general standard of review rule for the interpretation of standard form contracts. These authorities had held that, for standard form contracts, the correctness standard applies. In Ledcor, the Supreme Court held that the correctness standard does generally apply to the interpretation of standard form contracts, as the factual matrix or surrounding circumstances are usually not engaged in the interpretation exercise.
The Lease in this case is not a standard form contract but, rather, was negotiated by the parties. In the first instance, therefore, the palpable and overriding error standard of review applied to the motion judge’s interpretation of the Lease. However, in the Appeal Decision, this court held that the motion judge’s interpretation of the Lease was tainted by several legal errors involving extricable questions of law. Consequently, applying Sattva standard of review principles, the correctness standard was engaged.
(ii) Ledcor Decision
Ledcor involved the interpretation of an exclusion clause and an exception to that exclusion in a common form of builders’ all-risk property insurance. The exclusion clause, a standard form provision, denied coverage for the “cost of making good faulty workmanship”. As an exception to that exclusion, coverage applied for “physical damage” that “result[ed]” from the faulty workmanship. The Supreme Court considered two issues in Ledcor. First, what standard of appellate review applies to a trial judge’s interpretation of a standard form insurance contract? Second, what interpretation should be given to the faulty workmanship exclusion clause and the “resulting damage” exception to that exclusion contained in builders’ risk insurance policies?
The trial judge in Ledcor had found the insurers to be liable under the relevant all-risk insurance policy, a standard form contract. The Court of Appeal of Alberta had held that standard form contracts are subject to appellate review on the correctness standard, and reversed the trial decision. The Supreme Court concluded that, in certain circumstances, standard form contracts are reviewable on the standard of correctness. However, the majority of that court disagreed with the Court of Appeal of Alberta’s interpretation of the policy and restored the trial judge’s decision.
Ledcor identifies an exception to the general rule established by Sattva for contractual interpretation by holding that the proper interpretation of a contract is a question of law subject to appellate review on the standard of correctness where three criteria are satisfied:
(1) the appeal involves the interpretation of a standard form contract;
(2) the interpretation at issue is of precedential value; and
(3) there is no meaningful factual matrix that is specific to the parties to assist the interpretation process.
Where these three criteria are not met, Ledcor confirms that even the interpretation of standard form contracts may involve issues of mixed fact and law reviewable on the deferential standard of palpable and overriding error.
The Ledcor court distinguished Sattva on a factual basis, noting that Sattva involved a complex commercial agreement concluded by sophisticated parties, and not a standard form contract. As a result, Sattva did not address “the unique issues that standard form contracts raise”. In contrast, Ledcor was specifically concerned with the standard of review for standard form contracts. And it is in respect of only standard form contracts that the exception for correctness review accepted in Ledcor may apply.
To summarize, Ledcor instructs that:
(1) as Sattva holds, contractual interpretation is generally a question of mixed fact and law subject to appellate review on the deferential standard of palpable and overriding error;
(2) as Sattva also holds, the correctness standard of review applies to extricable questions of law arising within what was initially characterized as a question of mixed fact and law;
(3) as an exception to the general Sattva standard of review rule for contractual interpretation, the correctness standard applies where an appeal involves the interpretation of a standard form contract, the interpretation at issue is of precedential value, and there is no meaningful factual matrix that is specific to the parties to assist the interpretation process; and
(4) as Sattva further holds, the factual matrix or surrounding circumstances of a contract remain an important consideration in the contractual interpretation exercise. The factual matrix, however, is temporally limited to objective evidence of the background facts at the time of contract formation, namely, knowledge that was or reasonably ought to have been known to both parties at or before the time of contracting.
In the Appeal Decision, the Court of Appeal held that the motion judge made several legal errors involving extricable questions of law in her interpretation of the Lease. Consequently, in accordance with Sattva, appellate review of her decision was governed by the standard of correctness.
The Tenant contends that the Court of Appeal’s s identification of extricable questions of law in the motion judge’s interpretation of the Lease, as well as its consideration of the motions judge’s admission of extrinsic evidence to aid in the interpretation of the Lease, are inconsistent with Ledcor. As a result, says the Tenant, the Court of Appeal should restore the judgment below in favour of the Tenant and remit the matter to the Superior Court of Justice for a determination of the balance of the issues in the action relating to damages.
The Tenant submits that, with the exception of the motion judge’s rulings on the admissibility of external evidence concerning the Landlord’s leases with other tenants and the availability of subrogated claims against additional insureds, each of the legal errors attributed to the motion judge in the Appeal Decision relate to the way in which she applied correctly identified legal principles to the unique factual circumstances before her. Accordingly, the Tenant says, the questions of contractual interpretation that arose on appeal are questions of mixed fact and law subject to appellate review on the deferential standard of palpable and overriding error.
The Court of Appeal disagrees.
The heart of the problem is that the distinction between a question of law, which may be subject to correctness review, and a question of mixed fact and law, subject to review on the palpable and overriding standard, is difficult to draw. As the majority in Ledcor stated “There is no bright-line distinction between questions of law and those of mixed fact and law. Both Sattva and Ledcor provide guidance on this issue.
Sattva and Ledcor instruct that certain legal errors constitute extricable questions of law for standard of review purposes. These include: the application of an incorrect principle; the failure to consider a required element of a legal test; the failure to consider a relevant factor; the substantive requirements for the formation of a valid contract and the content of a given legal principle of contractual interpretation. Notably, neither Sattva nor Ledcor provide an exhaustive list of the legal errors that may constitute “extricable questions of law”. In both decisions, the Supreme Court provides examples of those questions of law that may trigger review on the correctness standard.
It also bears emphasis that the difficulty of identifying extricable questions of law in contractual interpretation disputes does not relieve a reviewing court from the necessity of properly characterizing the nature of the interpretation questions at issue. Indeed, in contract disputes, the proper characterization of the proposed grounds of appeal is critical. Extricable questions of law must be addressed by a reviewing court when they arise.
In this case, having carefully considered the teachings of Sattva and Ledcor, the Court of Appeal remains of the view that the motion judge’s interpretation of the Lease is tainted by legal errors involving extricable questions of law subject to review on the correctness standard.
Where the matter at issue is of limited precedential value and approaches “utter particularity”, Ledcor and Sattva hold that it draws close to characterization as a question of mixed fact and law. But where, as here, the legal error at issue involves the failure to properly identify and employ the governing authorities and applicable principles regarding contractual allocation of risk, the matter transcends the interests of the parties and implicates the broader principle that disputes, including contract disputes, will be resolved according to law.
It cannot be said that such an error is of “utter particularity” to the parties, or that it is devoid of future interest to judges and lawyers. The goals of certainty, clarity and consistency in the law dictate that missteps in the identification of controlling legal principles be characterized as questions of law subject to correctness review.
In short, the motion judge failed to consider a number of principles relevant to the interpretation of the Lease. This failure constitutes a legal error subject to correctness review. Sattva, for example, holds that the failure to read a disputed contract as a whole is a question of law that is extricable from a finding of mixed fact and law.
The Court of Appeal therefore rejects the Tenant’s claim that the legal errors identified in the Appeal Decision relate only to the way in which the motion judge applied the law to the interpretation of the particular contract before her. The motion judge’s interpretation of the Lease, a question of mixed fact and law, involved extricable questions of law. The correctness standard of appellate review therefore applied to those questions.
[Strathy C.J.O., LaForme and Huscroft JJ.A.]
P. Pape and Shantona Chaudhury, for the appellant
S. Tenai and Guy White, for the respondent
Keywords: Contracts, Interpretation, Standard Form Contracts, Standard of Review, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., Class Actions, Supreme Court Act, Remand Order
On April 4, 2016, the Court of Appeal dismissed the appellant’s appeal from a summary judgment dismissing her class action. At issue were Bell’s Terms of Service regarding customers who bought pre-paid services. Such customers would replenish the funds in their accounts by “topping up” from time to time. However, if the funds were not topped up, the balance would expire “after a specified time period” or “after an expiry date” and any funds remaining in the account would be forfeited.
On June 2, 2016, the appellant brought an application for leave to appeal to the Supreme Court of Canada. On September 15, 2016, the Supreme Court released its decision in Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, which pertained to the interpretation of standard form contracts.
On October 20, 2016, the Supreme Court neither granted nor denied leave to appeal, but directed that the case forming the basis of the application for leave to appeal be remanded to the Court of Appeal, pursuant to s. 43(1.1) of the Supreme Court Act, R.S.C. 1985, c. S-26, which provides that the Supreme Court “may, in its discretion, remand the whole or any part of the case to the court appealed from or the court of original jurisdiction and order any further proceedings that would be just in the circumstances.”
1) Should the remand matter be heard as a fresh appeal?
2) Does the appropriate disposition in light of Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co. change the Court’s previous decision?
Holding: Appeal decision affirmed.
1) No. The court held that disposition of the case in accordance with Ledcor did not mean revisiting questions that Ledcor did not touch upon. It meant, as a matter of fairness to the parties and judicial economy, that the Court would reconsider its original decision in light of the authoritative pronouncement of the Supreme Court on issues that may have affected the disposition of the appeal. As this court has stated in Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2017 ONCA 293, at para. 14, “[i]f the application of Ledcor mandates a different disposition, this court should alter its earlier decision in light of the teachings of Ledcor. If it does not, this court should affirm its earlier decision.”
2) No. Ledcor’s core instruction is that in cases involving the interpretation of standard form contracts, the standard of review is correctness because the factual matrix or surrounding circumstances generally have little impact on their interpretation.
A second instruction of Ledcor is that the circumstances of the negotiation of standard form contracts will generally play no role in their interpretation, because by their very nature there is usually no negotiation of such contracts. Some elements of the surrounding circumstances of standard form contracts, such as “the purpose of the contract, the nature of the relationship it creates, and the market or industry in which it operates”, have a role in the interpretative process. However, this is only because they are the same for everyone who enters into the particular standard form contract, are not negotiated on a case-by case basis, and are not inherently fact-specific.
The appellant asserted that the motion judge erred by incorrectly using the “surrounding circumstances” or “factual matrix” in interpreting Bell’s Terms of Service. Specifically, that he erred in considering parts of the factual matrix that were not common to all Bell subscribers and failed to consider provisions of Bell’s Terms of Service that were common to all subscribers. Ledcor went beyond MacDonald v. Chicago Title Insurance Company of Canada, 2015 ONCA 842 by emphasizing that the surrounding circumstances of a standard form contract play no role in its interpretation unless they are “the same for everyone”.
The Court rejected this argument, noting that the appellant did not complain about the accuracy of the expiry date identified when customers purchased their top-ups. Rather, her complaint related to the date communicated to customers by text message at some point before their top-ups were to expire.
The purchase of a prepaid card for valuable consideration was an individual contractual transaction that took place under the umbrella of the contractual relationship contained in the Terms of Service. This transaction was specifically contemplated by the Terms of Service and it was consistent with them. To use the language of Ledcor, no matter what method the customer used to top up her account, the method of calculating the expiry date and the manner in which it was communicated to the customer was “the same for everyone”.
It was impossible for the motion judge to answer the breach of contract common issue without examining the terms of the top-up transaction. He could not find the answer solely in the Terms of Service and neither party suggests otherwise. Hence, the motion judge did not err in answering the breach of contract common issues as he did.
[Doherty, MacPherson and Lauwers JJ.A.]
M. Zigler and J. Harnum, for the appellant International Union of Operating Engineers, Local 793
L.S. Corne and D. P. Preger, for the respondent Rosen Goldberg Inc., in its capacity as court-appointed Receiver
Keywords: Bankruptcy and Insolvency, Receiverships, Labour Law, Unions, Certification, Unfair Labour Practices, Ontario Labour Relations Board
On the application of Romspen Investment Corporation as secured creditor, and pursuant to an order of Penny J. of the Superior Court of Justice on October 19, 2015, Rosen Goldberg Inc. (the “Receiver”) was appointed Receiver of several corporations (together, the “Ambrose Group”).
On December 9, 2015, the union applied to the OLRB for certification, seeking to represent a bargaining unit comprised of six employees at the employer’s Harmony Road location in Oshawa (also known as Ontario Disposal). The union asserts that two days later, on December 11, the Receiver dismissed four of the six employees in the proposed bargaining unit and, on December 14, hired new workers to perform duties substantially similar to those performed by the dismissed employees. The Receiver offers business reasons for the dismissals and denies hiring replacement workers. On December 14, the OLRB stayed the union’s certification application, holding that the stay imposed by the receivership order applied. On December 18, the union filed an unfair labour practice (“ULP”) complaint with the OLRB, alleging that the Receiver dismissed the employees at least in part as a result of anti-union animus. In light of the OLRB’s decision on December 14, the union sought leave of the court to proceed with its certification application and ULP complaint at the OLRB.
The motion judge dismissed the union’s motion in its entirety. The Receiver moves to quash the appeal on the basis that the motion judge’s order does not fall within the meaning of s. 193(a) through (c) of the Bankruptcy and Insolvency Act (the “BIA”). Accordingly, the appeal cannot proceed without leave. The union did not seek the required leave when it filed its notice of appeal. The union resists the Receiver’s motion to quash. The union asserts that there is an automatic right of appeal under s. 193(a) and (c) for appeals involving “future rights” and property in excess of $10,000 and that its appeal implicates these categories. In the alternative, if this court determines that s. 193(a) and (c) of the BIA do not support its direct appeal, the union makes a cross-motion seeking leave to appeal pursuant to s. 193(e) of the BIA.
(1) Is the appeal as of right pursuant to ss. 193(a) or 193(c) of the BIA?
(2) If the answer to (1) is ‘No’, should the union be granted leave to appeal pursuant to s. 193(e) of the BIA?
(3) Did the motion judge err by not granting the union leave to continue its certification application at the OLRB?
(4) Did the motion judge err by not granting the union leave to continue its ULP complaint at the OLRB?
Holding: Appeal allowed.
(1) No. The union cannot appeal as of right from the motion judge’s decision. The Receiver’s motion to quash the appeal is prima facie valid. In this proceeding, the right at issue before the motion judge was the union’s existing right to apply for certification at a time when a stay is in place.
Accordingly, it cannot reasonably be said that the union’s right to apply for certification depended on a future event that had not yet occurred. The right of appeal without leave under s. 193(c) must be narrowly construed and limited to cases where the appeal directly involves property exceeding $10,000 in value. The union’s proposed appeal involves a procedural matter – can the union proceed at this time with its certification application and ULP complaint at the OLRB? The appeal does not involve directly any quantum of money.
(2) Yes. The central issue in this appeal is the relationship between, and intersection of, federal bankruptcy law and general provincial labour relations law. The factual context for the intersection of these laws in this case is the Receiver’s legitimate attempt to sell a large failing company and the important labour rights of some of the company’s employees, including their right to seek to join a union and their right not to be fired unfairly.
It is obvious that this issue is one of general importance to the practice in bankruptcy/insolvency matters and to the administration of justice generally. The resolution of this appeal requires careful consideration of whether the motion judge’s decision is consistent with the leading case in this domain involving the intersection of the BIA and provincial labour law, namely, the Supreme Court of Canada’s decision in GMAC Commercial Credit Corporation – Canada v. T.C.T. Logistics Inc., 2006 SCC 35,  2 S.C.R. 123 (“GMAC”). The proposed appeal does not appear to be unmeritorious.
The court was satisfied that this appeal would not unduly hinder the progress of these insolvency proceedings. The issues on appeal are narrow and the record is modest. Moreover, the Receiver did not move to quash the appeal until almost six months after the union filed its notice of appeal and three months after the hearing date was set. As a result, the Receiver’s motion to quash and the union’s cross-motion for leave were argued as part of the appeal proper.
(3) Yes. A successful certification application does not guarantee employees better wages; it simply allows employees to combine their bargaining power and rely on the union’s assistance in negotiating their terms and conditions of employment. While it is true that upon certification certain rights and obligations crystallize that would not otherwise (e.g. the employer’s duty to recognize the union and bargain with it in good faith), certification does not have the effect of automatically increasing the rights employees have as creditors, thereby prejudicing other creditors.
The court said it was simply conjecture at this point to assume that the union would be successful in negotiating a more financially favourable contract for bargaining unit employees. Moreover, at this juncture, allowing the union’s certification application to proceed merely entitles the union to a representation vote, not to certification.
The motion judge next reasoned that recognition of the proposed bargaining unit could negatively impact a sale of Ontario Disposal and that, in the circumstances, it would be inequitable to require creditors to accept such an outcome. This line of reasoning is speculative. The union, on behalf of its members, has an interest in the business being sold as a going concern and therefore has an incentive to act in a manner that would promote such an outcome. More fundamentally, however, there is simply no concrete evidence that recognition of the proposed bargaining unit would negatively impact a sale. Without having concrete evidence before him to ground the Receiver’s apparent concern, the motion judge erred in denying the union leave to proceed with its certification application on this basis.
Interfering with employees’ ability to exercise their statutory labour rights, particularly in circumstances where employees were allegedly terminated for exercising those rights, causes clear prejudice. The right to form and join a union of one’s choosing is a fundamental right under the Labour Relations Act (the “LRA”). While flexibility is required to address the challenges in any particular insolvency proceeding, courts should not unduly inoculate insolvency proceedings against the legitimate exercise of labour rights simply because the assertion of those rights represents an inconvenience to the receivership process.
The court found it unreasonable to characterize as entirely non-prejudicial what amounts to an indefinite suspension of the union and employees’ ability to exercise labour rights they otherwise enjoy at law, especially where, as here, employees have allegedly faced retribution for so doing.
Finally, the motion judge reasoned that leave ought to be refused given that there is no certainty that the proposed bargaining unit would be meaningful after the completion of any sale of Ontario Disposal assets. Again, this is speculative. Whatever the results of the sale, the employees have presently existing rights, established under the LRA, to organize themselves and select a collective bargaining agent. The fact that a court may speculate as to the ultimate efficacy of their decision to organize in this manner does not diminish the prejudice suffered now by preventing employees from exercising those rights.
The court then considered the relative prejudice to both sides. On the one hand, the Receiver can point to little material prejudice should the stay be lifted. The court did not accept that a sale would be prevented or that sale proceeds would be diminished should the union be granted leave to proceed with its certification application. The union’s certification application is an especially simple one. In these circumstances, the court was not persuaded that allowing the union’s certification application to proceed would cause any more than de minimis prejudice to Ambrose Group creditors. On the other hand, a lot is at stake for the union and the employees. The court was satisfied that there were sound reasons in this case to lift the stay and allow the union to proceed with its certification application.
(4) No. The union argues that the motion judge erred in holding that the union was not entitled to bring a ULP complaint without a valid prior commencement of a certification application. However, the court did not accept this argument. On the court’s reading of his reasons, the motion judge was not holding that, as a matter of law, ULP complaints cannot exist independently of certification applications. He was simply of the opinion that, in the particular circumstances of this case, given its factual basis, the ULP complaint could not stand independently of the certification application.
The court saw no sound basis upon which to preclude the union from relying on this fact to establish how and when the employer became aware of the union’s organizing campaign. It would not only be unfair but also a triumph of form over substance to prevent individuals who have lost their jobs from asserting basic protections otherwise available to them under law because of a technical defect in a legally distinct proceeding. The court held that the certification application ought to proceed as well as the ULP complaint.
Lauwers J.A.: (Dissenting)
In the dissenting opinion, Lauwers J.A. held the appeal of the bankruptcy judge’s refusal to lift the stay with respect to both the union certification process, and the unfair labour practice complaint should be dismissed. The bankruptcy judge is owed deference regarding the exercise of his discretion, and he was not persuaded that he erred in law or in principle.
As a commercial list judge with long experience in insolvency, the bankruptcy judge would be fully alive to the relevant law and to the business realities faced by the debtor, the creditors and the receiver. Moreover, he would be intimately familiar with the particular facts of the case. That is why it is important for the appellate court, from the viewpoint of the standard of review, to defer to the bankruptcy judge in the exercise of his discretion under s. 215 of the BIA or the terms of the receivership order.
Giving union’s carte blanche to begin certification efforts for insolvent enterprises after the date of the appointment of a trustee or receiver or the date of an order under the CCAA would effect a sea change in insolvency law – it would profoundly alter the economic dynamics of insolvency, and whether the CCAA route is preferable to outright bankruptcy. The consensus is that the CCAA has been effective in salvaging businesses and jobs, including union jobs. It would be unwise for the court to sanction such a profound change in the absence of full evidence and argument addressing both whether the s. 2(d) Charter right of employees have been substantially limited in the insolvency context, and whether any such limit is demonstrably justified under s. 1 of the Charter.
In this case, two distinct regulatory regimes come into contact: the Ontario labour relations regime, and the federal insolvency regime. There is no operative incompatibility or conflicting language on the facts of this case to engage the first branch of the paramountcy analysis. However, in Lauwers J.A.’s view, the second branch is engaged, under which the bankruptcy judge is obliged to consider the exigencies of each regime and reconcile them if possible. The court’s task here is not to reconcile statutory language, but to reconcile different policies. This is a nuanced, difficult and delicate task informed by the bankruptcy judge’s knowledge both of the law and the operation of the marketplace in the context of the specific matter before him, drawing also on his experience and wisdom, and his sense of what is commercially reasonable. The bankruptcy judge brought just that perspective to this case.
The bankruptcy judge’s statement that certification could negatively impact the sale of the Harmony Road depot is self-evidently true and falls well within the margin of appreciation that is his due, given his knowledge of the commercial realities. Lawers JA was reluctant to disparage the advice of the court-appointed receiver as mere “self-serving speculation”. Such an officer of the court has no self-interest and owes duties to all the parties and to the court. It was open to the bankruptcy judge to accept the receiver’s advice.
Lauwers J.A. stated he would dismiss the appeal respecting the bankruptcy judge’s refusal to lift the stay both with respect to the union certification process, and the unfair labour practice complaint.
[Strathy CJO, Weiler and Benotto JJ.A.]
P. H. Griffin and S. Johansen, for the appellant
J. G. Bell and L. M. H. Belzil, QC, for the respondents
Keywords: Partnerships, Fiduciary Duties, Duty of Good Faith, Expulsion, Damages, Aggravated Damages, Intangible Harm, Hadley v Baxendale, Fidler v Sun Life Assurance Co of Canada, Vorvis v Insurance Corp of British Columbia, Keays v Honda Canada Inc
Ludwig was a partner of BDO for 22 years until he was called into a meeting and told to retire. He brought an action against BDO claiming that BDO breached the terms of their partnership agreement. Ludwig was granted summary judgment and awarded damages. BDO appealed the findings of liability and the damages awarded.
The Partnership Agreement provided for the timing and terms of departure for each partner. For Ludwig, his compulsory retirement date was January 1, 2019. The Partnership Agreement also provided for a process for the “Requested Resignation” of a partner before the compulsory retirement date. The Policy Board, consisting of seven members elected for three year terms, having determined that it was not in the best interest of the partnership for the partner to remain, was to give a notice to the partner of the decision and the partner was deemed to have resigned.
On July 8, 2014, Ludwig, then age 60, had been with BDO for 22 years. He was called into a meeting with two other partners, Blair Davidson and Darren Crocker (the “July meeting”), where he was told that he would have to retire. Ludwig’s counsel wrote to the CEO indicating that BDO was not following the process set out in the Partnership Agreement in that BDO did not allege any grounds for expulsion particular to Ludwig. On October 8, 2014, the Policy Board unanimously voted to request Ludwig to resign under Article 17.4 (the “October meeting”). On October 9, 2014, BDO provided notice of the retirement request to Ludwig’s lawyer, using the same language.
The motion judge granted summary judgment for two overarching reasons (1) Ludwig’s expulsion did not comply with the language of Article 17.4 of the Partnership Agreement; and (2) common law principles governing partnerships require that a partner’s expulsion must be reasonable and made in good faith, rather than arbitrary or capricious. BDO did not advance any evidence that the Policy Board independently decided that to expel Ludwig was in the best interest of the partnership, and it did not act in good faith because it did not give Ludwig an opportunity to explain why he should not be expelled. The motion judge awarded Ludwig expectation and aggravated damages.
(1) What is the standard of review?
(2) Did the motion judge correctly interpret the agreement?
(3) Did the motion judge err in awarding expectation and aggravated damages?
Holding: Appeal dismissed.
(1) The Court of Appeal determined that the correctness standard of review applied to the motion judge’s interpretation of the Partnership Agreement and to his decision on the applicable measure of damages. The errors BDO alleged are errors of law, not findings of fact. The motion judge’s findings of fact underlying his assessment of damages, however, were entitled to deference.
(2) Yes. The Court of Appeal considered the legislative and common law framework governing the Partnership Agreement. The Ontario Partnerships Act sets out the requirements for the expulsion of a partner. The relevant portions are:
Section 25 – no majority of the partners can expel any partner unless a power to do so has been conferred by express agreement between the partners.
Section 28 – partners are bound to render true accounts and full information of all things affecting the partnership to any partner or the partner’s legal representative.
Section 45 – the rules of equity and of common law applicable to partnership continue in force, except so far as they are inconsistent with the express provisions of this Act.
The relevant common law principles which inform the construction of a partnership agreement, as explained in Lindley & Banks are as follows:
Because an expulsion from a partnership is expropriatory in nature, depriving the partner of future profits, an expulsion provision in a partnership agreement will be construed strictly. Partners are fiduciaries among themselves and the utmost good faith is owed from every member of a partnership towards every other member. Where discretion is conferred on the management of the firm or on a majority of partners, a partner will normally be entitled to expect that it will be exercised rationally and in good faith and not arbitrarily or capriciously.
The Partnership Agreement must be interpreted in light of the partners’ duty of utmost good faith towards each other. The expropriatory nature of expulsion and the loss of profits that it entails requires that the provision be construed strictly in favour of the expelled partner. The wording of Article 17.4 authorizes the Policy Board to request a partner’s resignation if it “unanimously determines that it is not in the best interest of the Partnership for a particular Partner to remain.”
The Court of Appeal held that BDO breached Article 17.4 of the Partnership Agreement. The Policy Board’s reasons, as reflected in the minutes of the October meeting, relate to the economic climate and the firm’s economic circumstances. In the July meeting, Ludwig was told that his underperformance was also a factor. The Court of Appeal agreed with the motion judge that these were bald assertions. Neither the CEO nor any member of the Policy Board gave evidence on the summary judgment motion. There was no evidentiary basis on which to reasonably conclude that it was in the best interest of the partnership to request Ludwig’s retirement. Moreover, it was clear from the evidence that the decision to expel Ludwig was not made by the Policy Board, as required by Article 17.4. It was made by the CEO. This supported the inference that the Policy Board’s decision in October was pre-determined. The motion judge was correct in his interpretation of Article 17.4 and did not err in holding that BDO did not comply with the provision in purporting to expel Ludwig from the partnership.
(3) No. There was no evidence before the motion judge to contradict any element of Ludwig’s claim for damages. The evidentiary obligation on a summary judgment motion is well established – each side must put its best foot forward. The motion judge is entitled to presume that the evidentiary record is complete and there will be nothing further if the issue were to go to trial. It was open to the motion judge to accept Ludwig’s uncontradicted evidence. The availability of damages arose from the particular facts of this case and the motion judge’s finding that Ludwig cannot feasibly return to the firm. The general principle that a wrongful expulsion does not affect the status of the “expellee” still governs.
The motion judge awarded aggravated damages for “intangible harms” Ludwig suffered, particularly embarrassment and reputational harm. Contract damages for intangible harm may be awarded under the principle in Hadley v Baxendale where the intangible harm was in the reasonable contemplation of the parties when they entered into the agreement. In Fidler v Sun Life Assurance Co of Canada, 2006 SCC 30, the Supreme Court stated that all types of damages for breach of contract are awarded on the basis of the “reasonable foreseeability” principle. Damages are meant to compensate the victim of the breach by reference to what was in the reasonable contemplation of the parties at the time the contract was made.
In Fidler, the court distinguished contract damages for intangible harm from damages for intangible harm arising out of circumstances that aggravate the breach of contract, referring to the latter as “true aggravated damages”. Such damages are not awarded under the general principle of Hadley v Baxendale, but rest on a separate cause of action, usually in tort, like defamation, oppression or fraud. If a plaintiff can establish mental distress as a result of the breach of an independent cause of action, then he or she may be able to recover accordingly. The award of damages in such a case arises from the separate cause of action. It does not arise out of the contractual breach itself, and it has nothing to do with contractual damages under the rule in Hadley v Baxendale.
In the employment context, damages for intangible harm arising out of the manner of termination may be awarded pursuant to the Hadley v Baxendale principle. In Keays v Honda Canada Inc, 2008 SCC 39, the Supreme court confirmed the rule established in Wallace v United Grain Growers Ltd,  3 SCR 701 that employers owe an obligation of good faith and fair dealing in the manner of dismissing an employee, such that an employment contract creates an expectation that the employer will be “candid, reasonable, honest and forthright with its employees.” Breach of this obligation therefore gives rise to damages for intangible harm, which is reasonably foreseeable and in the contemplation of the parties as a consequence of the breach.
Intangible damages for bad faith in the manner of dismissal of employment are not awarded for an independently actionable wrong and are not “true aggravated damages” as defined in Fidler. They arise from the breach of the employment contract – specifically, the employer’s implied contractual obligation to act in good faith when dismissing an employee. The decision in Keays overturned that in Vorvis v Insurance Corp of British Columbia,  1 SCR 1085, in which the court held that damages for intangible harm in the employment context were only available if the employer committed an independently actionable wrong. Keays also overturned the proposition established in Wallace that bad faith in the manner of dismissal entitles the employee to an increase in damages in lieu of proper notice of termination.
The Court of Appeal commented that caution must be exercised when directly applying the rules governing intangible damages in the employment context to partners. Courts have held that partners are typically not employees and are governed by a separate legal regime at common law and have specialized legislation, particularly the Partnerships Act. However, the reasoning of the court in Keays, in combination with the principles of partnership law discussed above, suggests that damages for intangible harm are available in the partnership context on the Hadley v Baxendale principle where the harm was in the reasonable contemplation of the parties when they made their contract. Keays holds that, because employers have an implied contractual obligation of good faith in the manner of dismissal, damages for bad faith in the manner of dismissal are within the contemplation of the parties when they enter into the contract. Given the duty of utmost good faith owed between partners, the reasoning in Keays should apply in the partnerships context. Damages flowing from bad faith in the manner of a partner’s expulsion are within the reasonable contemplation of the parties when they enter into the partnership agreement. Such damages can be awarded on the Hadley v Baxendale principle. Part of what the parties agree to when they enter into the partnership agreement is that they must treat each other with utmost good faith. The intangible harm resulting from a bad faith expulsion is reasonably foreseeable and flows from the breach of the duty of good faith, which is an implied term of the partnership agreement.
The Court of Appeal saw no error in the motion judge’s award for aggravated damages on the basis of BDO’s conduct and the humiliation it caused.
[Simmons, Lauwers and Hourigan JJ.A.]
V. Avagyan, for the appellant P. Cianfarani and S. W. Ronan, for the respondent
Keywords: Contracts, Insurance, Commercial General Liability Policy, Interpretation, Coverage, Property Damage, “Your Work” Exclusion
Facts: The appellant was contracted to provide window cleaning services at a newly-constructed commercial building. During the cleaning, a number of windows were scratched. The appellant paid the owner of the building to replace the damaged windows and then sought reimbursement under its commercial general liability insurance policy, issued by the respondent. Coverage was denied by the respondent on the basis that the claim fell within the “your work” exclusions (clause 2(h)(v)) contained therein.
The appellant commenced an action against the respondent seeking indemnification under the policy. The appellant maintained that its claim against the respondent for indemnification for the cost of replacing the windows was covered by the policy. The respondent brought a motion for summary judgment to dismiss the action on the grounds that exclusions applied and there was consequently no coverage under the terms of the policy. The motion judge granted the motion and dismissed the claim, ruling that the claim was barred by two exclusions and there was, therefore, no genuine issue requiring a trial.
The appellant appealed on the basis that the motion judge erred in his interpretation of the exclusions and in holding that there was no coverage under the terms of the policy, and further that he provided insufficient reasons.
Issue: Did the motion judge err in granting summary judgment?
Holding: Appeal dismissed.
No. The motion judge did not err in granting summary judgment. The primary interpretive principle is that when the language of the policy is unambiguous, courts will give effect to clear language, reading the contract as a whole. If the language of the insurance policy is ambiguous, courts will apply the general rules of contract construction. A corollary of the contra proferentem rule is that coverage provisions are interpreted broadly and exclusion clauses narrowly. Thus, in the case at bar, the proper analysis requires the appellant to establish that the claim for indemnification for the cost of replacing the windows falls within the initial grant of coverage. Once that is established, the onus shifts to the respondent to prove that there is no coverage because the claim is excluded under the policy. That is the end of the analysis because in the case at bar no exceptions to the exclusions are relied upon.
The appellant submits that the motion judge erred in finding that the occurrence under the policy was the scratching of the windows. It argues that, in fact, the occurrence was the confluence of the various environmental factors, including the debris produced by the stone cutters, which established the conditions for the scratching. There is no error in the motion judge’s conclusion that the occurrence that caused the property damage in this case was the scratching of the windows. The windows were scratched by means of the application of the squeegees to the windows by the appellant’s employees. The cleaning of the windows using the squeegees was expected and intended, but the scratching of the windows while they were being cleaned through the application of the squeegees was unexpected and unintended. This is what caused the property damage. Under the terms of the initial grant of coverage under the policy, this was a claim that was potentially recoverable.
The motion judge also did not err in interpreting the wording of exclusion 2(h)(v) – a “Your Work” exclusion. No property damage occurred until the appellant’s workers performed their window-cleaning operation by applying their squeegees to the windows. If the workers had chosen not to undertake the window cleaning amid the airborne cement debris given the conditions on the site, there would be no property damage. Therefore, the property damage clearly did “arise out of” the window cleaning operation and coverage was properly denied.
[Feldman, Brown and Roberts JJ.A.]
P. Gemmink, for the appellant
F. M. Vieira, for the respondent
Keywords: Endorsement, Insurance Law, Commercial General Liability Policy, Duty to Defend, Duty to Indemnify, Property Damage, Exclusions
The appellant homebuilder appealed the dismissal of its action against the respondent insurer. The appellant submitted that the motion judge erred in determining that the respondent had no duty to defend or indemnify the appellant under its Commercial General Liability (“CGL”) insurance policy in relation to a claim arising out of the appellant’s sale of a lot and a home to be constructed on the lot.
The subdivision agreement between the appellant and the Town of Uxbridge required the appellant to include a warning in the agreement of purchase and sale of the property with the homeowners concerning the grading in the rear yard of the property, which exceeded maximum standards. The appellant failed to do so. The homeowners sued the appellant for breach of the agreement of purchase and sale, which included a rendering showing a level lot. The homeowners asserted that the appellant deliberately failed to include the warning about the property grading in the agreement of purchase and sale and that the appellant was grossly negligent in having submitted to the Town plans providing for the overly steep property grading.
The motion judge dismissed the appellant’s action against the insurer on the basis that there was no coverage for homeowners’ claims under the CGL policy with the respondent on two bases: first, the substance of the homeowners’ claims as pleaded was based on intentional conduct, not an accident, so there was no coverage. Second, even if the homeowners’ claims could be read as including a claim for negligent, non-intentional conduct that could be an accidental occurrence, the exclusions in the CGL policy expressly precluded coverage.
The appellant submitted that its failure to disclose amounted to a negligent misrepresentation, which the respondent conceded would be covered under the Insuring Agreement of the CGL policy if not otherwise excluded. The appellant argued that the motion judge erred in not looking beyond the homeowners’ choice of labels in their statement of claim, and thus not appreciating that it was or could have been negligence, rather than deliberate conduct on the part of the appellant in failing to disclose the warning as required by the Town, and that any such negligence was not derivative of the deliberate conduct that was pleaded.
Whether the motion judge erred in determining that the respondent had no duty to defend or indemnify the appellant.
No. As the motion judge correctly found, even if the homeowners’ underlying claim could be read to include a negligent, accidental act of not warning the homeowners about the steep grading that was not a derivative claim, such a claim was clearly excluded under the CGL policy.
Paragraph 2a excluded from coverage property damage “expected or intended from the standpoint of the insured”. “Property damage” includes “loss of use of tangible property that is not physically injured.” The appellant intended to create the steep grading of the property, which resulted in the homeowners’ loss of their use of the property. The exclusions under paragraph 2 h (5) and (6) covered the steep grading of the property performed by the appellant, as well as the appellant’s failure to include a warning about the grading in the agreement of purchase and sale. Paragraph 2 k provided for the exclusion from coverage of the appellant’s steep grading of the property and its failure to include the requisite warning in the agreement of purchase and sale.
The appellant admitted that it intentionally graded the steepness of the property beyond the maximum municipal standards and that it failed to provide the requisite warning to the homeowners. As the motion judge found, these acts are clearly excluded under the CGL policy.
[Feldman, Sharpe and Roberts JJ.A.]
Counsel: D. A. Thomson, for the appellant D. Ronde, for the respondent
Keywords: Endorsement, Contracts, Guarantees, Franchise Agreements, Set-off, Mutuality of Debts, Limitation Periods
The appellant, principal owner of 2176693 Ontario Ltd., a franchisee of the respondent, appeals a summary judgment against him as guarantor of the franchisee’s indebtedness. The appellant does not dispute the franchisee’s indebtedness or his obligation as guarantor. However, he asserted by way of set-off and sought to assert by way of counterclaim a claim for damages arising from the loss of the potential sale of the franchise which failed to close when the franchisor refused to provide the franchisee with a release as required by the franchise agreement.
The motion judge found that there was no basis for the appellant to assert a set-off and that the franchisee’s claim for damages flowing from the loss of the sale was statute-barred.
Issue: Did the motion judge err?
Holding: Appeal dismissed.
No. There was no error on the part of the motion judge. The franchise agreement explicitly precludes set-off and, in any event, the right to damages asserted is that of the franchisee, not the appellant guarantor. Moreover, the motion judge did not err in concluding that any claim for damages was barred by the limitation period.
The motion judge also correctly rejected the submission that the appellant only acquired the information necessary to commence a claim after the application and appeal judgments in a related proceeding. The damages claim could have been brought at the same time as the declaratory proceeding and there is no merit to the submission that the limitation period did not start to run until after the Court of Appeal’s judgment.
[Epstein, Benotto and Trotter JJ.A.]
B. R. G. Smith, for the appellant
L. Kudelya, in person
Keywords: Family Law, , Custody, Variation, Material Change in Circumstances, Gordon v. Goertz, Divorce Act, s. 17, Children’s Law Reform Act, s. 30, Assessments, Parenting Co-ordinators, Fresh Evidence, Palmer Test
The parties were married in 2004. The father is a lawyer; the mother is a registered nurse. They have one child, born January 2007. They separated in January 2010 when the mother was contacted by a woman who provided her with evidence of the father’s extra-marital affairs. This was the genesis for ongoing mistrust, anger and a sense of betrayal that the mother felt towards the father. The parties immediately embarked upon what has been accurately described as “high conflict” litigation. The police, children’s services agencies and the courts became involved. In August 2010, the court appointed Dr. Irwin Butkowsky to conduct an assessment pursuant to s. 30 of the Children’s Law Reform Act.
Dr. Butkowsky conducted an extensive assessment and prepared detailed recommendations with respect to parenting. In his opinion, both parents were loving and had good parenting skills. The difficulty was the lack of mutual trust leading to ongoing conflict. His recommendation for decision-making for the child focused on a concept known as “parallel parenting” or “divided custody”. This means that each parent has decision-making authority in certain areas after consultation with the other. For example, the father has decision-making authority over education, the mother over health issues. Dr. Butkowsky was of the view that in situations of intense conflict, shared parenting, which involves joint decision-making, would increase the likelihood of the child being exposed to conflict.
Dr. Butkowsky further recommended that the parties attend joint education/facilitation with a qualified mental health professional who could serve as a “parenting coordinator” and assist in the implementation and maintenance of the recommended parenting plan. Dr. Butkowsky met with the parties to achieve agreement. The parties did not agree. They proceeded to settle the financial issues and went to trial on child related matters in June and July 2012.
Both parties seek to rely on fresh evidence describing the ongoing conflict. The fresh evidence details the recent conflict concerning appointing a parenting coordinator and arranging counselling for the child. Predictably, each spouse points the finger at the other. The father’s fresh evidence focuses largely on efforts to arrange counselling for the child. He alleges that, even though the mother told the motion judge that she agreed to obtain counselling for the child, she has not done so. (It appears to be common ground that counselling falls within the purview of health, a topic over which the mother has decision-making authority.) The mother’s evidence suggests that it is the father who has been thwarting her efforts to arrange counselling.
- Should the fresh evidence be admitted?
- Has there been a material change in circumstances?
- Did the motion judge err in authorizing Dr. Butkowsky to appoint a parenting coordinator if the parties could not agree on one?
Holding: Appeal dismissed.
1. No. The principles governing the admissibility of fresh evidence on appeal are outlined in R. v. Palmer. The Palmer test requires the applicant to satisfy four criteria: (i) the evidence could not have been adduced at trial; (ii) the evidence must be relevant in that it bears on a decisive or potentially decisive issue; (iii) the evidence must be reasonably capable of belief; and (iv) the evidence must be such that, if believed, it could reasonably, when taken with the other evidence adduced at trial, be expected to have affected the result.
The proposed evidence is predominantly focused on the parents’ inability to appoint a parenting coordinator and arrange counselling for the child. The evidence of the child’s need for counselling is not new. The evidence was before the motion judge and put to him as a basis for a finding of a material change; he was not asked to decide that the evidence demonstrated a need for counselling. Accordingly, the Court of Appeal decided to not admit the fresh evidence.
2. No. The authority for a change of a final custody order is found in s. 17 of the Divorce Act. In Gordon v. Goertz, the Supreme Court clarified that s. 17 calls for a two-stage inquiry. First, there must be a material change in the situation of the child which “represent[s] a distinct departure from what the court could reasonably have anticipated in making the previous order”. If there is no material change, the inquiry ends. If there is a material change, the court must move to the second stage and consider the best interests of the child and whether to vary the original order.
The material change relied on by the father before the motion judge was that “a parenting coordinator has not been put in place as was a requirement of the consent portion the Order”. The Court of Appeal saw no error in the motion judge’s finding that there was no material change in circumstances and that the events that took place after the trial were within the realm of what “could reasonably have been anticipated” by the trial judge.
3. No. The father submits that it was not open to the motion judge to delegate custody, access and parenting decisions to a third party. There was no agreed-to process for selecting a parenting coordinator. The father is no longer willing to submit to the parenting coordinator process given the mother’s lack of cooperation. The content of the motion judge’s order was not new. The motion judge’s order simply restated the original order after the first trial, when he accepted Dr. Butkowsky’s recommendation that if the parties did not agree on a parenting coordinator, he would have the authority to name one. No appeal was taken from this judgment. In fact, the basis for the father’s motion to change was the fact that a parenting coordinator had not been appointed. The Court of Appeal saw no reason for appellate intervention on this issue
[LaForme, Pepall and Pardu JJ.A.]
J.G. Saikaley, for the appellant
M. W. Smith, for the respondent
Keywords: Wills and Estates, Inter Vivos Gifts, Constructive Trust
Facts: This case involved a dispute over control of a family company, Mic Mac Realty Ltd. (MMR). Mildred and Keith McMurtry were married and had six children. After buying out his co-founder, Keith was the sole owner of MMR. Out of a total of 22 shares, he gave four shares to each of his three sons, John, Jim and Michael. Keith retained the remaining ten shares. Michael died in 1983. John and Jim received half of Michael’s shares, leaving each with six shares as of 1984.
Keith died in 1998. Under his will, Mildred was the residual beneficiary of Keith’s estate. The will made no mention of Keith’s ten shares (the “Disputed Shares”). Mildred and John each claimed ownership of the Disputed Shares. Mildred claimed they were hers as the residual beneficiary of her husband’s estate. John claimed his father gifted the shares to him before he died.
The trial judge ruled that there had been no gift to John. He also ruled against John’s assertion that Mildred’s claim was statute-barred. The trial judge found that because of certain statements made by Mildred, she held the shares in constructive trust for John. This appears contradictory to the finding that Mildred beneficially owned the shares, but apparently the trial judge is yet to determine whether or all or part of the shares are held by Mildred by way of a constructive trust for John.
John appealed from the judgment declaring Mildred the beneficial owner of the shares.
Issue: Did the trial judge err in holding that the Disputed Shares were not gifted to John?
Holding: Appeal dismissed.
No. The trial judge’s finding that there was insufficient evidence of a gift is entirely reasonable. The “Declaration of Transmission” that John executed on December 15, 1999, stated that the Disputed Shares remained vested in Keith’s estate as of that date and that John was the “beneficiary properly entitled by law to receive the shares.” The trial judge found that the declaration was intended to identify John as the beneficiary of the Disputed Shares pursuant to the will and not the owner by virtue of an inter vivos gift. Since John knew the contents of the will, he swore a document he knew to be untrue, which hurt his credibility.
It followed that the Disputed Shares were not gifted to John and that Mildred became the beneficial owner of the shares as the residual beneficiary under the terms of the will.
[Weiler, Benotto and Roberts JJ.A.]
M. C. Laflamme, for the appellant
P. Masic, for the respondents
Keywords: Endorsement, Contracts, Misrepresentation, Jurisdiction, Real and Substantial Connection, Van Breda v Village Resorts Ltd, Arbitration Clauses
The appellant appealed the dismissal of its motion to stay the respondents’ counterclaim on the basis that Ontario lacks jurisdiction over the counterclaim, Ontario was not the convenient forum for the adjudication of the counterclaim, and Ontario’s jurisdiction was ousted by the arbitration clause agreed to by the parties.
Following the framework set out by the Supreme Court of Canada in Van Breda v Village Resorts Ltd, 2012 SCC 17, the motion judge found that there were two presumptive connecting factors tying the counterclaim to Ontario. The tort of fraudulent misrepresentation as pleaded in the counterclaim was committed in Ontario because the appellant’s impugned misrepresentation that had been made to, and was relied on by, the respondents in Ontario. The contract, based on the wording of the Memorandum of Understanding, as well as evidence of the other elements of the contractual matrix of the parties’ relationship, was made in Ontario.
The motion judge held that the parties had never agreed to the arbitration clause as a term of their contractual relationship. As a result, the motion judge determined that the clause did not apply to oust Ontario’s jurisdiction in relation to the counterclaim.
Issue: Whether the motion judge erred in dismissing the motion.
Holding: Appeal dismissed.
Reasoning: The Court of Appeal saw no error in the motion judge’s factual findings or legal conclusions. He applied the correct legal tests and was entitled to prefer the evidence of the respondents. It was open to him on the record to make the determinations that he made.
[Simmons, LaForme and Pardu JJ.A.]
P. J. Pape, S. Chaudhury and J. H. Nasseri, for the appellant
M. H. Arnold, C. G. Paliare and A. Young, for the respondents
Keywords: Costs Endorsement, Pre-judgment Interest, Courts of Justice Act
[Doherty, MacFarland and Rouleau JJ.A.]
J. H. Chow, for the appellants
H. W. Winkler and E. Pond, for the respondent
Keywords: Endorsement, Defamation, Damages, Standard of Review
[Doherty, MacFarland and Rouleau JJ.A.]
Lidia Prisecaru and Corneliu Prisecaru, appearing in person
V. Santini, for the respondent
Keywords: Endorsement, Insurance Law
[Doherty, MacFarland and Rouleau JJ.A.]
J. Bruggeman for the appellant
B. Nitchke and D. Sazant for the respondents, David G. Scherer (Estate) and Scherer Leasing Inc.
A. L. Rachlin and J. Small for the respondents, Premier Express Lines and The Estate of Curtis Rivard
Keywords: Endorsement, Reconsideration
[Strathy C.J.O., Weiler and Watt JJ.A.]
J. S. Wilkinson, for the appellant
S. Dawson, for the Crown
Keywords: Criminal Law, Drug Trafficking, Unreasonable Search and Seizure, Warrantless Search, Evidence, Admissibility, Hearsay, Unlawful Detention, Canadian Charter of Rights and Freedoms, s. 24(2), R. v. Grant, 2009 SCC 32
[Sharpe, Rouleau and Benotto JJ.A.]
D. Doucette and A. Ruffo, for the appellant Elizabeth Gayle
P. Alexander, for the appellant Fedrick Gayle
D. F. and L. Bolton, for the respondent
Keywords: Criminal Law, First Degree Murder, Evidence, Admissibility, Discreditable Conduct, Jury Instructions
[Watt, van Rensburg and Pardu JJ.A.]
B. Wassenaar, for the appellant
J. K. Penman, for the respondent
Keywords: Publication Ban, Criminal Law, Sexual Offences, Evidence, Admissibility, Child Witnesses, Videotaped Statements, Criminal Code, 715.1
[Watt, van Rensburg and Pardu JJ.A.]
N. A. Xynnis, for the appellant
R. Flumerfelt, for the respondent
Keywords: Endorsement, Criminal Law, Aggravated Assault, Evidence, Cross-examination, Standard of Review, Sentencing, R. v. Kienapple,  1 S.C.R. 729
[Watt, van Rensburg and Pardu JJ.A.]
M. Salih and C. F. Rippell, for the appellant
J. North, for the respondent
Keywords: Criminal Law, Importation of Cocaine, Controlled Drugs and Substances Act, ss. 6(1), 515(6)(d), Criminal Code, s. 523(2)(a), Canadian Charter of Rights and Freedoms, Habeas Corpus
[Simmons, van Rensburg and Miller JJ.A.]
M. R. Gourlay, for the appellant
K. Wilson, for the respondent
Keywords: Endorsement, Criminal Law, Possession for the Purpose of Trafficking, Opinion Evidence, Burden of Proof, Criminal Code, s. 686(1)(b)(i), Sentencing
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