COURT OF APPEAL SUMMARIES (May 29, 2023 – June 2, 2023) - Libel & Defamation

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of May 29, 2023.

The Catalyst Capital Group Inc. v West Face Capital Inc. , 2023 ONCA 381 is a defamation and anti-SLAPP case involving multiple actions that have been going on for years and arise out of a dispute over the purchase of Wind mobile years ago. The Court upheld the dismissal of Catalyst's claims under the anti-SLAPP provisions of the Courts of Justice Act .

In Lewis v Lifetime Developments , the appellant sued for an unpaid real estate commission earned back 2012. The appeal from the motion judge's dismissal of the action as being out of time was dismissed.

In Burnham v. Co-operators General Insurance Company , a passenger of a stolen vehicle was injured, and claimed to have not known that the vehicle was stolen. The passenger made a claim against the owner's insurer under the uninsured motorist coverage part of the policy. The motion judge held that the owner's insurer had no liability to the passenger . The Court allowed the appeal and held that innocent passengers in a stolen vehicle are exempt from being excluded from coverage. Exclusions are to be interpreted and applied narrowly.The alternative to this outcome was that the passenger would have to be compensation out of the public Motor Vehicle Accident Claims Fund.

In Airport Business Park Inc. v. Huszti Holdings Inc., a vendor of land had a fixed period of time to remove an easement in favour of the City of Windsor from title to the property, failing which the purchaser would be entitled to an abatement of the purchase price. The vendor obtained and registered a court order removing the easement two days before the deadline. The City appealed (and ultimately lost). The purchaser still claimed the abatement, arguing that since the appeal was outstanding beyond the deadline, the vendor had not complied with the condition and the purchaser was entitled to the abatement. The motion judge found in favour of the vendor. The Divisional Court set aside that decision, finding in favour of the purchaser. The Court allowed the appeal and restored the motion judge's decision. The issue hinged on whether order could be considered final or not. Since there was no stay of the order and a subsequent sale of the property by the purchaser before the City's appeal was heard would have prejudiced the City's appeal rights, the Court felt that the order was final for the purpose of complying with the contractual condition to remove the easement by the time period specified. Determining whether an order is final depends on the extent of why the finality was being questioned, and it is not a bright line test.

In Russian Federation v Luxtona Limited , the Russian Federation appealed an international arbitral tribunal's ruling that it had the jurisdiction to hear a contractual dispute involving the Russian government. The Superior Court had dismissed the appeal and refused to permit Russia to file fresh evidence on the jurisdiction question. The Divisional Court set that order aside and found that the appeal to the court was a de novo hearing, as per international consensus. The Court agreed with the Divisional Court and dismissed the appeal.

Civil Decisions

The Catalyst Capital Group Inc. v. West Face Capital Inc. , 2023 ONCA 381

Keywords: Torts, Defamation, Anti-SLAPP, Injurious Falsehood, Conspiracy, Unlawful Means Tort, Securities Law, Canadian Charter of Rights and Freedoms , s. 2(b), Courts of Justice Act , R.S.O. 1990, c. C. 43, subsections 137.1(3) and (4), and sections 6(1)(d) and 133(b), Libel and Slander Act, R.S.O. 1990, c. L. 12, 1704604 Ontario Ltd. v. Pointes Protection Association , 2020 SCC 22, Bent v Platnick , 2020 SCC 23, Grant v. Torstar Corp. , 2009 SCC 61, Park Lawn Corporation v. Kahu Capital Partners Ltd. , 2023 ONCA 129, Guergis v. Novak , 2013 ONCA 449, Miguna v. Toronto (City) Police Services Board , [2004] O.J. No. 2455, Frank v. Legate , 2015 ONCA 631, WIC Radio Ltd. v. Simpson , 2008 SCC 40, Lewis v. The Daily Telegraph Ltd. , [1964] A.C. 234 (H.L.), Bangash v. Patel , 2022 ONCA 763, Hansman v. Neufeld , 2023 SCC 14, Fortress Real Developments Inc. v. Rabidoux , 2018 ONCA 686, Subway Franchise Systems of Canada, Inc. v. Canadian Broadcasting Corporation , 2021 ONCA 25, Platnick v. Bent , 2018 ONCA 687, Subway Franchise Systems of Canada Inc. v. Canadian Broadcasting Corporation , 2021 ONCA 26, Murano v. Bank of Montreal (1998), 41 O.R. (3d) 222 (C.A.), Veneruzzo v. Storey , 2018 ONCA 688, Brad-Jay Investments Limited v. Village Developments Limited (2006), 218 O.A.C. 315 (C.A.), Hamilton v. Open Window Bakery Ltd. , 2004 SCC 9, Duong v. NN Life Insurance Co. of Canada (2001), 141 O.A.C. 307, Levant v. DeMelle , 2022 ONCA 79, Hobbs v. Warner , 2021 BCCA 290

Burnham v. Co-operators General Insurance Company , 2023 ONCA 384

Keywords: Contracts, Insurance, Coverage, Automobile Insurance, Uninsured Motorist Coverage, Excluded Drivers, Driving Without Permission, Statutory Interpretation, Insurance Act , R.S.O. 1990, c. I.8, s. 265, Chilton v. Co-operators General Insurance Co. (1997), 32 O.R. (3d) 161 (C.A.)

Airport Business Park Inc. v. Huszti Holdings Inc. , 2023 ONCA 391

Keywords: Contracts, Interpretation, Real Property, Land Titles, Deferred Indefeasibility, Mirror Principle, Curtain Principle, Insurance Principle, Civil Procedure, Orders, Finality, Appeals, Conveyancing and Law of Property Act , R.S.O. 1970, c. 85, s. 62, Land Titles Act , R.S.O. 1990, c. L.5, ss. 78(4), 78(4.1), 86(1), 93, 99, 101(1) 101(6), 102, 105, 111, 118, 119, 128, O. Reg. 430/11 "Forms", Rules of Civil Procedure , r. 63, Smith et al. v. Tellier et al. (1974), 4 O.R. (2d) 154 (C.A.), Re West , 1928 CanLII 413 (ONSC), Leonard v. Wharton 1921 CanLII 441 (ON SC), Durrani v. Augier 2000 CanLII 22410 (ON SC), Re Regal Constellation Hotel (2004), O.R. (3d) (C.A.), Stanbarr Services Ltd. v. Metropolis Properties Inc. , 2018 ONCA 244, 2544176 Ontario Inc. v. 2394762 Ontario Inc. , 2022 ONCA 529, Martin v. 11037315 Canada Inc. , 2022 ONCA 322, Waimiha Sawmilling Co. v. Waione Timber Co. , [1926] A.C. 101 (P.C.), Lawrence v. Maple Trust Company , 2007 ONCA 74, United Trust Co. v. Dominion Stores Ltd. , [1977] 2 S.C.R. 915, Hydro Fuels Inc. v. Mid-Pacific Services Inc. , 2000 BCCA 608, R.A. & J. Family Investment Corp. v. Orzech (1999), 44 O.R. (3d) 385 (C.A.), Regal Constellation Hotel Ltd. , Re (2004), 71 O.R. (3d) 355 (C.A), Third Eye Capital Corporation v. Ressources Dianor Inc./Dianor Resources Inc. , 2019 ONCA 508, Lamont on Real Estate Conveyancing , 2nd ed. (Thomson Reuters looseleaf, 1991)

Russian Federation v. Luxtona Limited , 2023 ONCA 393

Keywords: Contracts, Civil Procedure, International Arbitration, Jurisdiction, Competence-Competence Principle, Uniformity Principle, Fresh Evidence, Energy Charter Treaty , 17 December 1994, 2080 U.N.T.S. 95, Article 45(1), UNCITRAL Model Law on International Commercial Arbitration , Articles 16(1), 16(3) and 34(2), International Commercial Arbitration Act , 2017, S.O. 2017, c. 2, Sch. 5., Schedule 2, Palmer v. The Queen , [1980] 1 S.C.R. 759, Uber Technologies Inc. v. Heller , 2020 SCC 16, Dell Computers v. Union des consommateurs , 2007 SCC 34, Dallah Real Estate and Tourism Holding Company v. The Ministry of Religious Affairs, Government of Pakistan , [2010] UKSC 46, République Arabe d'Egypte c. Southern Pacific Properties Ltd , Cour de cassation Civ. 1re, 6 January 1987, No. 84-17.274, Insigma Technology Co. Ltd. v. Alstom Technology Ltd. , [2008] SGHC 134, aff'd [2009] SGCA 24, Electrosteel Castings Ltd v. Scan-Trans Shipping and Chartering Sdn Bhd , [2003] 2 All E.R. (Comm) 1064 (Q.B.), AQZ, Government of the Lao People's Democratic Republic v. Sanum Investments Ltd. , [2015] SGHC 15, Azov Shipping Co v. Baltic Shipping Co, S Co v. B Co , [2014] 6 HKC 421, AQZ v. ARA, [2015] SGHC 49, Sanum Investments Limited v. The Government of the Lao People's Democratic Republic , [2016] SGCA 57, Lin Tiger Plastering Pty Ltd. v. Platinum Construction (Vic) Pty Ltd , [2018] VSC 221, Mexico v. Cargill , 2011 ONCA 622, Nigel Blackaby, K.C., Constantine Partasides, K.C., & Alan Redfern, Redfern and Hunter on International Arbitration , 7th ed. (Oxford: Oxford University Press, 2023), Emmanuel Gaillard & John Savage, eds., Fouchard, Gaillard, Goldman on International Commercial Arbitration (The Hague: Kluwer Law International, 1999)

Lewis v. Lifetime Developments , 2023 ONCA 388

Keywords: Breach of Contract, Civil Procedure, Summary Judgment, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, Thermal Exchange Services Inc. v. Metropolitan Toronto Condominium Corporation No. 1289 , 2022 ONCA 186

Short Civil Decisions

Maynard v. Johnson Controls Canada LP , 2023 ONCA 392

Keywords: Contracts, Employment, Wrongful Dismissal, Remedies, Damages, Payment in Lieu of Notice, Employment Standards Act, 2000 , S.O. 2000, c. 41

CIVIL DECISIONS

Catalyst Capital Group Inc. v West Face Capital Inc. , 2023 ONCA 381

[Miller, Coroza and Copeland JJ.A.]

COUNSEL:

J.E. Callaghan, R.G. Dearden, B. Na, M. Karabus, and M.S. Romeo, D. Moore and K. Jones, for the appellant, Catalyst Capital Group Inc.
M. Milne-Smith, A. Carlson, and M. O'Sullivan, for the respondents, West Face Capital Inc. and G.B.
M.P. Tunley, for the respondents, Dow Jones and Company and J.M. and R.C.
L. Lung and R. Shoom, for respondents, ClaritySpring Inc. and N. A.
E. Bodnar and B. Campbell, for the respondent, K.B.
M. Wiffen, for the respondents, J. McFarlane and D.L.
A.D. Lascaris, P. Guy, and A. Seely, for the respondent, B.L.

FACTS:

This is a complex set of appeals. The three underlying actions allege multiple torts involving the coordinated actions of many individuals and companies. The appellants launched a comprehensive attack on the motion judge's reasons, raising a dozen or so grounds of appeal against the dismissal of their two actions pursuant to anti-SLAPP motions and the dismissal of their competing anti-SLAPP motion in relation to a counterclaim.
The Catalyst Parties and West Face are significant players in the Canadian private equity and financing markets. They have a considerable history of animosity, with Catalyst having sued West Face three times relating to a 2015 business deal in which West Face triumphed over Catalyst to acquire WIND Mobile. Of the three lawsuits, the only action to proceed to trial was dismissed by Newbould J. in 2016.

On August 9, 2017, an article published on the Wall Street Journal's ("WSJ") website reported that a series of whistleblower complaints had been filed with the OSC. The WSJ article reported that whistleblowers had accused the Catalyst parties (Catalyst Capital and Callidus Capital) of fraud, and of deceiving borrowers. The article was written by the respondents R.C. and J.M., who were relying on information supplied by the respondent N.A. that he and several Callidus borrowers had filed complaints about Catalyst with securities regulators. The Catalyst parties claimed that the WSJ article defamed them to an audience of approximately 2.4 million readers and had a devastating effect on their business. This included shares of Callidus falling 19.2% in 28 minutes, resulting in a loss of at least $144 million.

The Catalyst parties brought three appeals from: the dismissal of two of their actions pursuant to anti-SLAPP motions brought by some or all of the defendants, and the dismissal of the Catalyst parties' partial anti-SLAPP motion in relation to the West Face parties' counterclaim:

1. The Defamation action was brought by the Catalyst parties against the Dow Jones parties for publishing allegedly defamatory statements in the WSJ article. The Dow Jones parties were successful in having the action against them dismissed through an anti-SLAPP motion, and the Catalyst parties appealed.

2. The Wolfpack action was brought by the Catalyst parties against the Wolfpack parties, claiming they engaged in a conspiracy against the Catalyst parties which culminated in the publication of the WSJ article. Some of the defendants brought an anti-SLAPP motion and were successful in having the Wolfpack action dismissed against them. The Catalyst parties appealed the dismissal of the Wolfpack action.

3. The West Face counterclaim was brought by the West Face parties in the Wolfpack action against the Catalyst parties and certain officers, seeking damages for defamatory comments and other tortious behaviour. The Catalyst parties brought an anti-SLAPP motion targeting a portion of West Face's defamation action in the counterclaim. The Catalyst parties were unsuccessful, and they have appealed.

ISSUES:

Defamation Action

1. Did the motion judge err in finding that the Catalyst parties failed to establish grounds to believe that the Defamation action as against the Dow Jones parties had substantial merit?

2. Did the motion judge err in finding that the Catalyst parties failed to establish grounds to believe that the Dow Jones parties had no valid defences of justification or responsible communication?

3. Did the motion judge err in law by weighing the evidence and making credibility findings with respect to R.C.'s participation in the common design?

Wolfpack Action

4. Did the motion judge err in law by improperly conducting the public interest weighing exercise under s. 137.1(4)(b)?

5. Did the motion judge err in law in finding the West Face parties, K.B. and D.L., who denied making the impugned expressions, met the threshold test under s. 137.1(3)?

6. Did the motion judge err in law by weighing the evidence and making credibility findings with respect to R.C.'s participation in the common design?
West Face counterclaim (cross-appeal)

7. Did the motion judge err in finding that section 137.1 does not permit partial anti-SLAPP motions?

8. Did the motion judge err in finding that the four statements were defamatory?

9. Did the motion judge err in finding that the harm allegedly suffered by the West Face parties was due to the four statements?

10. Did the motion judge err in finding that the public interest weighed in favour of permitting the underlying action to proceed under s. 137.1(4)(b)?

HOLDING:

Appeals dismissed.

REASONING:

Defamation Action

1. Did the motion judge err in finding that the appellants failed to establish grounds to believe that the Defamation action as against the Dow Jones respondents had substantial merit?

No. The Court held that at the merits analysis stage, the onus on the responding party - the plaintiff in the action - is not a high standard; it is more than mere suspicion but less than proof on the balance of probabilities ( 1704604 Ontario Ltd. v. Pointes Protection Association ).
The appellants first alleged that the motion judge misinterpreted the distinction drawn in Lewis v. The Daily Telegraph Ltd. (1963) between (i) reporting the fact that authorities - such as the OSC and the TPS - are conducting an inquiry into fraud, and (ii) reporting that parties have actually engaged in fraud. The motion judge relied on Lewis as support for the further proposition that "[t]he former is not capable, as a matter of law, of lowering the reputation of the appellants in the eyes of an ordinary person." The appellants argue that the motion judge misread Lewis and was bound by a passage from Lord Devlin's speech in which he stated: "I think it is undoubtedly defamatory of a company to say that its affairs are being inquired into by the police." In rejecting this submission, the Court explained that the cited passage from Lord Devlin was dicta and not a binding proposition of law. Furthermore, Lord Devlin agreed with the view expressed by the majority of other Lord Justices that stating an investigation is afoot does not constitute innuendo imputing guilt. The Court held that the appellants made entirely too much of Lord Devlin's dicta and held that the motion judge made no error either in his reading of Lewis or more generally in his understanding of the common law regarding defamation.

The appellants also alleged that the motion judge failed to give effect to the repetition rule - that one cannot escape liability for libel simply by prefacing the libel with a statement that one is just repeating what someone else has said ( Grant v. Torstar Corp. ). The Court held that the motion judge did not commit this error. The article did not contain a statement, from a first-person perspective, that the appellants had engaged in fraud. Whistleblowers made allegations of fraud to the OSC and to the TPS. The article reported this fact. That a reader is exposed to the idea that third parties believe the appellants to have committed fraud does not make the reporting of the allegation defamatory. If it did, it would never be permissible for a journalist to report that anyone was being investigated for fraud until such time as the matter was concluded. The law of defamation presumes that a reasonably thoughtful and informed reader understands the difference between allegations and proof of guilt ( Guergis v. Novak; Miguna v. Toronto (City) Police Services Board; Frank v. Legate ).

2. Did the motion judge err in finding that the appellants failed to establish grounds to believe that the Dow Jones respondents had no valid defences of justification or responsible communication?

No. With respect to the defence of truth or justification, the appellants argued that the defence was only available in this case to the extent that the whistleblower complaints were true. The motion judge found that the "main thrust" of the WSJ article was true - "that Whistleblower Complaints had been submitted to the OSC concerning the appellants and that, as a result, enquiries were being made." Furthermore, the motion judge found that the WSJ article did not "purport to comment on the innocence or guilt" of the appellants or accuse them of wrongdoing. The Court held that the motion judge made no reviewable error in his analysis or conclusion in this regard.

The appellants also argued that justification is not available unless the defence accepts that it made the impugned statements (including the inferences alleged to be drawn from those statements) contained in the statement of claim. The appellants had pleaded that the statements made in the WSJ article were capable of supporting inferences that were defamatory. The Court held that the motion judge made no error in dismissing this argument, relying on WIC Radio Ltd. v. Simpson , for the proposition that the court need not accept the worst possible interpretation of the WSJ article for the purposes of assessing the truth defence. For the purposes of an anti-SLAPP motion, the Court held that the motion judge was entitled to resolve the issues by making findings about the inferences available from the impugned statements, on the basis of the limited record before the court, and was not required to accept the interpretation proposed by the appellants.

The Court also held that the motion judge made no error in finding that the appellants had not discharged their burden with respect to the unavailability of the responsible communication defence. The Court explained that to establish this defence, the publication must be on a matter of public interest and the defendant must show the publication was responsible, in that those involved in writing and publication were diligent in trying to verify the allegations, having regard to all the relevant circumstances ( Grant v. Torstar ). The Court found that the motion judge was entitled to make the factual findings that he did, on the record that was before him, which included evidence that the WSJ article was subject to a multi-tiered vetting process and the appellants had been provided an opportunity to comment before the article was released. As the motion judge is entitled to deference on appeal, the Court rejected the appellants argument that the motion judge erred by failing to find the Dow Jones respondents were actuated by malice.

3. Did the motion judge err in law by weighing the evidence and making credibility findings with respect to Copeland's participation in the common design?

No. The Court explained that to avoid having a proceeding dismissed under s. 137.1(4)(b), the responding party must satisfy the motion judge that the harm it has suffered or will suffer because of the moving party's expression is sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting that expression. The appellants argued that the motion judge failed to undertake this analysis and instead applied a different standard - dismissing the proceedings because of the "exceptional circumstances" of the appellants' conduct. The Court held that this argument was misconceived, and that although the motion judge occasionally referenced "exceptional circumstances," the s. 137.1(4)(b) analysis was entirely conventional.
The Court found that the appellants' claim was that the motion judge ought to have concluded there was greater harm to the appellants, and that the expression was of lesser value than the motion judge found. The appellants invited the Court to replace the motion judge's findings of fact with its own and engage in a reweighing of the public interest. The Court held that this was not the function of the Court, and therefore dismissed the appeal in relation to the Defamation action.

Wolfpack Action

4. Did the motion judge err in law by improperly conducting the public interest weighing exercise under s. 137.1(4)(b)?

Harm Analysis
No. The Court explained that section 137.1(4)(b) required the appellants to show that the harm they suffered (or were likely to suffer) as a result of the respondents' expression is sufficiently serious that the public interest in permitting the proceeding to continue outweighs the public interest in protecting the underlying expression. The appellants took issue with the motion judge's finding that the harm they suffered was in the mid-range of the spectrum. However, the Court held that there was nothing wrong with the motion judge's finding, which was entitled to deference on appeal.

Public Interest in allowing the claims to proceed

The appellants also argued that because the motion judge found that there were grounds to believe they would succeed on multiple claims, the public interest in their claims necessarily outweighed the public interest in protecting the respondents' expressions. However, the Court rejected this argument, explaining that it ignored two principles of the s. 137.1(4)(b) analysis. First, at this stage, the Court explained that the "grounds to believe" standard is replaced with the more onerous "balance of probabilities" standard (Pointes Protection). Thus, a finding of "substantial merit" on the lower threshold in 137.1(4)(a) does not necessarily meet the public interest hurdle in s. 137.1(4)(b). Second, the Court held that the public interest hurdle of the analysis "serves as a robust backstop for motion judges to dismiss even technically meritorious claims if the public interest in protecting the expression that gives rise to the proceeding outweighs the public interest in allowing the proceeding to continue" (Pointes Protection). The Court further explained that it would be an error of law to do as the appellants suggested and tip the public interest balance in favour of findings made at an earlier stage of the s. 137.1 analysis, which would render the final step superfluous.

Public interest in protecting the expression

Furthermore, the appellants argued that the motion judge erred by failing to consider the quality of the expressions sought to be protected and the motivation behind them. They pointed to the motion judge's findings that there were grounds to believe the claim had substantial merit because there was a real prospect that the respondents were motivated by malice. The Court disagreed, holding the appellants misunderstood the different thresholds of proof employed at the different stages of the s. 137.1 analysis. The Court explained that the motion judge was entitled to find the expression could be found false or motivated by malice on the lesser standard but also that it was not fair to conclude that the statements contained deliberate falsehoods or amounted to gratuitous personal attacks on the higher standard. The Court agreed with the motion judge's findings that, considering the law and the facts before it, the expressions were "valid and important topics of public debate concerning major financial entities that solicit investments from both domestic and international actors." The Court explained, again, that it is not the task of the Court of Appeal to redo the inferences drawn as to the quality of the commercial speech or the weight attached to it.

Factors relevant to weighing the public interest

The Court rejected the appellants' claim that the motion judge considered factors irrelevant to the balancing exercise under s. 137.1(4)(b), because they sought an unduly narrow interpretation of this provision which ran contrary to the established jurisprudence. The Court stressed that indicia of a SLAPP are open-ended and can always be relevant to the public interest weighing exercise in an appropriate case. The Court found it was not an error for the motion judge to consider these indicia as part of the public weighing exercise so long as they were considered together with other relevant considerations and not automatically treated as dispositive.

The Court also rejected the Catalyst parties' claim that consideration of the financial and power imbalance between the parties and impact of this defamation claim on court resources and access to justice concerns were irrelevant to a s. 137.1(4)(b) analysis. The Court found that where, as here, the financial and power imbalance was evident in an extraordinary record of judicial and extra-judicial attempts to intimidate others and suppress the public interest in free expression, it was difficult to argue that this consideration should be irrelevant.

The Court dismissed the appellants' first ground of appeal.

5. Did the motion judge err in law in finding the West Face respondents, who denied making the impugned expressions, met the threshold test under s. 137.1(3)?

The appellants' second ground of appeal was that the respondents, West Face, D.L., K.B., and B.L., who did not admit to making the expressions at issue or acting in common design with the other defendants giving rise to the expressions cannot then satisfy the threshold test under s. 137.1(3) that "the proceeding arises from an expression made by the person that relates to a matter of public interest." The Court found that the appellants' second ground of appeal was a question of law not arising on the facts of this case, and provided deference to the motion judge's findings, dismissing this ground of appeal.

6. Did the motion judge err in law by weighing the evidence and making credibility findings with respect to R.C.'s participation in the common design?

The Catalyst parties' third and final ground of appeal in the Wolfpack action related to the defendant R.C. and his participation in the alleged conspiracy. The Catalyst parties asserted legal errors such as applying the wrong test or misapprehending the evidence. The Court refused to revisit factual findings and redo the weighing exercise absent any palpable and overriding error, and dismissed this ground of appeal.

West Face Counterclaim

7. Did the motion judge err in finding that section 137.1 does not permit partial anti-SLAPP motions?

The Catalyst parties explained that they brought a partial anti-SLAPP motion with respect to four expressions only, because the remainder of the expressions were not attributable to them. They argued that they should not be precluded from bringing an anti-SLAPP motion only in respect of the expressions they admitted to making. The Court noted that the jurisprudential question of whether s. 137.1 contemplates partial anti-SLAPP motions would be better left to another appeal in which the issue would be dispositive.I In this case, the motion would not be dispositive of the counterclaim, nor the particular cause of action. The Court stated that an anti-SLAPP motion is meant to be summary, efficient, and final. It is intended to save resources. The Court expressed concern that it is too often simply an occasion for the waste of additional time and expense, at no risk to the moving party, and agreed with the motion judge's concern that allowing a partial anti-SLAPP motion of this sort would have the effect of delaying the entire proceeding for little purpose and with great expense and delay. The Court found the motion judge did not err in dismissing the appellants' first ground of appeal.

8. Did the motion judge err in finding that the four statements were defamatory?

No, the Court held that the motion judge did not err in finding that the four statements were defamatory. The Court found that the motion judge examined each statement individually, and determined correctly that all four statements advanced the same meaning. The Catalyst parties raised two other arguments under this ground that took issue with the factual findings, which the Court found failed to identify any palpable and overriding errors in the motion judge's decision. Consequently, the Court rejected the second ground of appeal in its entirety.

9. Did the motion judge err in finding that the harm allegedly suffered by the West Face respondents was due to the four statements?

No, the finding of the motion judge was theirs to make and was grounded in G.B.'s evidence that investors were shunning West Face on the basis that they could not invest with them while the Catalyst parties' allegations were outstanding. The Court stated that it is not the task of a judge faced with an anti-SLAPP motion to do a deep dive into the record, as requested by the Catalyst parties, to assess the West Face parties' claim that they have suffered harm. The Court stated that an anti-SLAPP motion is brought at an early stage in the proceedings and requires only a limited assessment of the evidence from the motion judge's perspective. While there was no doubt the issue of harm and damages will be highly contested at the trial of the action, the Court found that at this stage in the proceeding, the West Face parties met their burden to show the harm was sufficiently serious. Although the motion judge considered the Catalyst parties' broader conduct in this analysis, the motion judge did not err in doing so given the close relationship between the statements and the conduct addressed.

10. Did the motion judge err in finding that the public interest weighed in favour of permitting the underlying action to proceed under s. 137.1(4)(b)?

No, the Court found that because the appellants failed to overcome the merits-based hurdle under s. 137.1(4)(a), there was no need for the Court to consider their final ground of appeal concerning the public interest analysis. The Court held that this was clearly a finding of fact entitled to significant deference. The appellants did not allege palpable or overriding error.

Burnham v. Co-operators General Insurance Company , 2023 ONCA 384

[Doherty, Zarnett and Sossin JJ.A.]

COUNSEL:

J. Friendly and T.M. Wasserman, for the appellant
M. Dhanani, for the respondent

FACTS:

This appeal involved a dispute over the interpretation of a provision of the standard Ontario Automobile Policy ("Policy") dealing with the circumstances where a vehicle covered by the Policy is driven by a person without permission (in this case, a stolen vehicle).
The respondent is the insurer, the Co-operators General Insurance Company ("Co-operators"). The Minister of Public and Business Service Delivery (the "Minister"), responsible for the Motor Vehicle Accident Claims Fund (the "Fund"), appealed this decision.
The passenger was in the back seat of a stolen pickup truck involved in a motor vehicle accident. The driver and a front-seated passenger of the pickup truck were killed, the passenger sustained serious injuries. The passenger then sued the owner's insurer, Co-operators, for uninsured motorist coverage.

The question facing the motion judge was whether the provision in question excludes coverage for passengers of the vehicle who do not know the vehicle is being driven without consent. The motion judge ruled in favour of Co-operators and held that the passenger had no cause of action as against Co-operators, as his claims for uninsured motorist coverage were precluded under s. 1.8.2. of the Policy, whether or not his allegation that he did not know the pickup truck was stolen were true.

ISSUE:

Did the motion judge err in his interpretation of s. 1.8.2 of the Policy by finding that the passenger of a stolen vehicle was precluded from uninsured motorist coverage under this exclusion in the Policy, even if the allegation that he did not know the pickup truck was stolen were proven to be true?

HOLDING:

Appeal allowed.

REASONING:

Yes.

Uninsured automobile coverage is coverage mandated by statute included in every motor vehicle liability insurance policy, subject only to the limits prescribed by regulation, as provided by s. 265 of the Insurance Act . The Policy is a statutory contract. It includes uninsured automobile coverage but also includes certain exclusions from coverage. Section 1.8.2 of the Policy includes an exclusion entitled, "Excluded Drivers and Driving Without Permission".

At issue was whether a passenger in a vehicle whose owner is a policyholder is caught by this exclusion where that passenger does not know or ought not reasonably to know that the vehicle is being driven by someone without the owner's consent.

Section 5 of the Policy outlines coverage for injuries arising from accidents involving an uninsured automobile. The focus of the exclusion in s. 1.8.2 is on passengers in uninsured vehicles (that is, passengers in vehicles not driven by its owner or the spouse of its owner).
In order to claim under the uninsured automobile provisions of the Policy, a claimant must not otherwise be excluded from coverage under the Policy. Therefore, the exclusion in s. 1.8.2 determines which passengers in uninsured automobiles can claim coverage under s. 5 of the Policy.

The second paragraph of the exclusion sets out that, "there is no coverage under this policy for a person who, at the time he or she willingly becomes an occupant of an automobile, knows or ought reasonably to know that the automobile is being used or operated by a person in possession of the automobile without the owner's consent."

Both paragraphs appear to extend coverage to innocent occupants injured in stolen vehicles. As a general rule, clauses in insurance policies will be granted a liberal meaning "in favour of the insured and those clauses excluding coverage [will be] construed strictly against the insurer": Chilton v. Co-operators General Insurance Co. (1997), 32 O.R. (3d) 161 (C.A.).
The wording of s. 1.8.2 of the Policy and its legislative history support an interpretation of the first paragraph which exempts innocent passengers in a stolen vehicle from the exclusion of coverage. The Court felt that the motion judge should have been guided by the principle that exclusions are to be interpreted and applied narrowly.

The Minister argued on appeal that the real issue for the Court's consideration is whether an insurer, the Co-operators, or the public's Fund, ought to pay for an accident where the passenger does not know (or ought to know) the vehicle is stolen.
The Court favoured the interpretation advanced by the Minister, as opposed to Co-Operators, for the following reasons:

1. This interpretation flows from the text of the first paragraph of s. 1.8.2 which excludes coverage to occupants of a stolen vehicle, where those occupants know or ought to know the vehicle is being driven without permission of the owner.

2. This interpretation allows for a coherent distinction between the two paragraphs which comprise s. 1.8.2 of the Policy, with the first paragraph exempting an innocent passenger in the insured stolen vehicle, and the second paragraph dealing with a passenger covered by the Policy in any stolen vehicle other than the insured vehicle.

3. This interpretation is the narrower one with respect to the exclusion and favours the insured rather than the insurer.

4. This interpretation accords with the legislative history and the goal in the 2010 amendments of addressing the gap left by the 2005 amendments regarding innocent passengers in an uninsured vehicle.

5. This interpretation is consistent with the legislative intent of the Policy to increase insurance coverage for uninsured vehicles and decrease recourse to the Fund.

Airport Business Park Inc. v. Huszti Holdings Inc. , 2023 ONCA 391

[Zarnett, Coroza and Favreau JJ.A.]

COUNSEL:

S. Laubman, N. Holmberg, and X.L. (C) Li, for the appellant
D. Gatti, for the respondent

FACTS:

The appellant agreed to sell to the respondent a property located in Windsor pursuant to an Agreement of Purchase and Sale. The property was subject to an easement in favour of the City of Windsor (the "Easement"). Prior to closing, the respondent requisitioned that the appellant have the Easement discharged from title to the property. The appellant did not do so before the closing date. The parties closed the sale on revised terms. Title to the property was transferred to the respondent subject to the Easement, and a charge was placed on the property by a vendor take-back mortgage (the "VTB Mortgage") with a provision that required the appellant to remove the Easement within one year, failing which the amount owing under the VTB Mortgage would be reduced.

The appellant commenced an application to have the Easement discharged. It obtained a court order discharging the Easement and it registered the order on the property's title, thereby vacating the Easement before the deadline in the VTB Mortgage. After the deadline in the VTB Mortgage, the City of Windsor appealed the discharge order. The appeal was dismissed nine months after the appellant had obtained the discharge order. The respondent took the position that the discharge order vacating the Easement did not satisfy the requirements of the VTB Mortgage. The respondent commenced an application for a declaration that the appellant failed to comply with the condition to obtain a valid release of the Easement, arguing that the court order did not meet the condition, and furthermore, the order did not meet the deadline because appeal rights existed after the deadline. The Application Judge rejected both arguments and dismissed the application.

The Divisional Court reversed the Application Judge's decision, holding that although the appellant had obtained a valid release of the Easement, the contractual deadline was not met because appeal rights still existed at the time of the deadline. Relying on the Court's decision in Smith et al. v. Tellier et al. (" Smith (ONCA)"), the Divisional Court held that the order obtained by the appellant was "in a sense interlocutory" until appeal rights had been exhausted.

Although the Divisional Court noted that the Supreme Court of Canada reversed the Smith (ONCA) decision, it held that the Supreme Court did not displace the principle that an order which is subject to appeal is not effective for all purposes before appeal rights have been exhausted. The Divisional Court held that the Supreme Court only carved out a limited exception to the principle: where the "prospect of an appeal" was ephemeral. The Divisional Court reasoned that, in this case, the prospect of appeal was not ephemeral when the order was obtained and the respondent's request for good title without contingency was not met until the actual appeal had concluded - which took place well beyond the deadline.

The appellant's primary argument was that the Divisional Court's reliance on Smith (ONCA) was misplaced and that the discharge order was a final order, binding on the parties unless it was reversed on appeal or stayed. The discharge order was registered on title, effective as of the deadline and complied with the terms of the mortgage. Accordingly, the Divisional Court erred in law and principle by failing to accord proper deference to the Application Judge's finding that it had complied with the terms of the VTB Mortgage.

ISSUES:

1. Did the Divisional Court err in law by finding that the discharge order was not final and did not satisfy the VTB Mortgage?

2. Did the Divisional Court err by failing to consider that the respondent will receive both the benefit of its bargain of having the Easement removed and the windfall of a reduction in the purchase price?

3. Should the court consider new arguments of relief from forfeiture on appeal?

HOLDING:

Appeal allowed.

REASONING:

1. Yes.

The Court reviewed the decision in Smith (ONCA), which the Divisional Court relied on in reversing the Application Judge's decision. In Smith (SCC), on appeal, Laskin C.J.C. instructed courts to use a contextual analysis to determine whether an order is final.
The Court interpreted the holding in Smith (SCC) to be an instruction that in determining whether an order is final depends on the context of why finality is being questioned. It is not a bright line test.

The Court held that the language of the VTB Mortgage was clear, it required the appellant to secure and register on title a good and valid Transfer Release and Abandonment relating to the Easement. When the appellant obtained a discharge order, it was equivalent of a good and valid Transfer Release and Abandonment. Once that order was immediately registered in the land titles system, the Easement, as the Application Judge correctly observed, was extinguished two days before the deadline set out in the VTB Mortgage.
The Court relied on the fundamental principles of a land titles regime described by Epstein J. in Durrani v. Augier (2000): 1) the mirror principle; 2) the curtain principle and; 3) the insurance principle.

Section 78(4) of the Land Titles Act is one of the main legislative mechanisms to achieve the mirror principle. Subject to limited exceptions that must be narrowly construed, s.78(4) establishes a deferred indefeasibility of title regime that guarantees that a transfer in favour of a subsequent purchaser is effective once registered. One of the exceptions is actual notice of an unregistered instrument to a third-party purchaser for value: United Trust Co. v. Dominion Stores Ltd.

The Court cited the British Columbia Court of Appeal's (BCCA) decision in Hydro Fuels Inc. v. Mid-Pacific Services Inc. on whether the former owners of land retained some unregistered interest by bringing an appeal against orders vesting the land in another party. The BCCA rejected the contention that an appeal of a vesting order created an unregistered interest in property, stating that if the party wished to preserve their interest in title, they had to seek a stay of the order.

The Court further referenced that the relevant jurisprudence holds that where there is no stay of an order that is being appealed, there is no jurisdiction to rectify the register on a successful appeal, if to do so would interfere with the registered interest of a bona fide purchaser for value in the interest as registered ( Re Regal Constellation ).

The Court held that the importance of the City of Windsor not seeking a stay of the discharge order could not be overstated. The Court noted that there is no requirement under the Land Titles Act to show that no appeal is pending, or appeal rights have not terminated. Appeal rights may be protected by obtaining a stay, which precludes registration of the order, but where a losing party does not seek such a stay, their rights of appeal might well be prejudiced. The fact that the effect of the discharge order when registered was the equivalent in all respects of the release of the Easement required under the VTB Mortgage was a complete answer to the Divisional Court's concern about title being uncertain or contingent.
The Court concluded that there was no basis to find that the City's appeal rights impacted on the respondent's good and marketable title in any meaningful way and the Divisional Court was wrong to find that the Application Judge erred in failing to consider the City's appeal rights without first considering the significance of those appeal rights in the context of this case.

2. and 3.

The Court's conclusion on the first issue was dispositive of the appeal. It was therefore not necessary to deal with the remaining grounds of appeal.

Russian Federation v Luxtona Limited , 2023 ONCA 393

[Fairburn A.C.J.O., MacPherson and Miller JJ.A.]

COUNSEL:

L. Caylor, S.A. Bandali, G. Beaulne, S. Babwani, S. Tolani, for the appellant
J. Lotz and N. Antturi, for the respondent

FACTS:

The appellant Luxtona is a former shareholder of Yukos, an energy company based in Russia. It alleges that the respondent Russia violated provisions of the Energy Charter Treaty relating to protection of investments, including Luxtona's investment in Yukos. Russia is a signatory to the Treaty but has not ratified it. Luxtona sought damages of US$701 million and argued that pursuant to article 45(1) of the Treaty , Russia agreed provisionally to apply the Treaty, including its arbitration provisions, to the extent that the provisional application was not inconsistent with Russia's constitution, laws and regulations. Russia took the position that it did not agree to apply the Treaty provisionally and that the arbitration provisions of the Treaty were inconsistent with Russian law.

The parties appointed an arbitral tribunal seated in Toronto. The tribunal received evidence and heard legal arguments on the jurisdiction issue. The arbitral tribunal held that it had jurisdiction to arbitrate Luxtona's claims against Russia. Russia applied to the Ontario Superior Court of Justice to set aside the arbitral tribunal's decision on jurisdiction. It based its application on the UNCITRAL Model Law on International Commercial Arbitration (the "Model Law"), enacted in Ontario as Schedule 2 to the International Commercial Arbitration Act, 2017, . Russia relied on Articles 16(3) and 34(2) of the Model Law .

The Superior Court rendered three (3) decisions on the jurisdiction issue.

1. Justice Dunphy held that Russia was entitled as of right to adduce its proposed fresh evidence. Justice Dunphy stated ".I am not confined to the findings of fact made in regard to Russian law by the tribunal where these relate to the question of jurisdiction nor am I confined to the record consulted by the tribunal in reaching its own conclusion."

2. Justice Penny was assigned to hear the application but expressed some doubt about the correctness of Justice Dunphy's reasoning and decision. Justice Penny directed the issue of admissibility of the new evidence to be re-argued, and following this, released reasons that determined that Russia could not introduce its proposed fresh evidence. Russia appealed this to the Divisional Court.

3. The Divisional Court allowed the appeal and set aside Justice Penny's decision. The appellant appealed the Divisional Court's decision.

ISSUES:

1. Did the Divisional Court properly consider the competence - competence principle when deciding that the words "decide the matter" in Article 16 mean that Russia can file the Fresh Evidence as of right?

2. Did the Divisional Court err in concluding that there was an "international consensus" that parties may file fresh evidence as of right in jurisdictional set-aside applications?

3. Did the Divisional Court err in deciding the appeal based only on an interpretation of Article 16 and without regard to Article 34?

HOLDING:

Appeal dismissed.

REASONING:

1. The competence issue
Yes.
The Court rejected the appellant's argument that the Divisional Court erred in not referring to the competence-competence principle, and that this principle, which allows an arbitral tribunal to rule on its own jurisdiction, requires that parties be given strong incentives to put as much of the record before the tribunal as possible. Otherwise, the tribunal will not truly be able to rule on its own jurisdiction. The Court noted that the competence-competence principle had provided the tribunal with the first opportunity to resolve Russia's challenge to its jurisdiction, and that this was as far as the competence-competence principle goes. The Court found that this principle does not require any special deference be paid to an arbitral tribunal's determination of its own jurisdiction. Competence-competence is best understood as "a rule of chronological priority" rather than as "empowering the arbitrators to be the sole judge of their jurisdiction."

The Court also found that the Divisional Court correctly noted the "uniformity principle" set out in Article 2A(1) of the Model Law makes international decisions strongly persuasive in Ontario. The weight of international authority shows that the competence-competence principle does not limit the fact-finding power of a court assessing an arbitral tribunal's jurisdiction. The Court cited a Singapore court case AQZ, which states that because the court retains the final say over questions of jurisdiction, it necessarily follows that the court must be "unfettered by any principle limiting its fact-finding ability."

2. The "international consensus" issue
No.
The Court rejected the appellant's submission that the Divisional Court erred in concluding that a de novo hearing was appropriate, and instead found that the weight of the international authority supports the Divisional Court's conclusion. Using the leading case in this area, Dallah , as relied upon by the Divisional Court, the United Kingdom Supreme Court held that the "tribunal's own view of its jurisdiction has no legal or evidential value, when the issue is whether the tribunal had any legitimate authority in relation to the government at all. This is so however full was the evidence before it and however carefully deliberated was its conclusion." The Court noted that this case was endorsed by Courts in several other countries and stated that it could not conclude that the Divisional Court erred in determining that there was a "strong international consensus" in favour of a de novo hearing in the circumstances of this dispute.

3. The Article 16/Article 34 issue
No.
The Court held that the Divisional Court correctly interpreted Article 16(3) as providing for a proceeding de novo , rather than a review or an appeal. Additionally, nothing in the language of Article 34(2)(a)(i) or (iii) suggested the nature of the proceeding under those articles was any different. The Court rejected the appellant's argument that the nature of the court's jurisdiction is any different under Article 34 than it is under Article 16, and this issue was not before the court in Cargill . The Court found that the question in Cargill was whether deference was owed to the tribunal's determination of its own jurisdiction, not whether an application to set aside is a review or a proceeding de novo . The nature of a proceeding to set aside an arbitral award is a separate question from the standard to be applied in that proceeding.

Lewis v. Lifetime Developments , 2023 ONCA 388

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

COUNSEL:

O. Lewis, acting in person
M. Lerner and S. Blakeley, for the respondents

FACTS:

The appellant commenced an action in May 2021 suing for a real estate commission alleged to have been owed to him and in respect of which he first made a demand in early 2012. After delivering a statement of defence denying that a commission was owed, and asserting that the action was barred by the Limitations Act, , 2002, the respondents brought a summary judgment motion. The motion judge dismissed the action after concluding that the action was out of time and there was no genuine issue requiring a trial. The appellant appealed the dismissal of his action. He has also brought a motion to adduce fresh evidence.

ISSUES:

1. Did the motion judge err in dismissing the appellant's action by way of summary judgment?

2. Should the appellant be permitted to adduce fresh evidence on appeal?

HOLDING:

Appeal and motion dismissed.

REASONING:

1. No.

The appellant raised three arguments as to why the motion judge erred in granting summary judgement. The Court dismissed each ground.
First, the appellant argued that he had entered into a tolling agreement with the respondent, which suspended the running of the limitation period. The Court determined that the agreement referred to by the appellant did not meet the standard necessary to establish a tolling agreement under s. 22 of the Limitations Act, 2002.
Second, the appellant argued that he was not treated fairly at the hearing when he was not afforded the opportunity by the motion judge to obtain further evidence regarding his psychological incapacity. The appellant claimed that the respondent's representative had used a racial slur when refusing to pay the commission in question, which resulted in psychological distress. He claimed the psychological distress he suffered from this interaction should have lengthened the limitation period under s. 7(1) of the Limitations Act, 2002. Further, he argued that fresh evidence should be considered in the form of a psychodiagnostics assessment dated April 27, 2023. The Court determined that the appellant was not treated unfairly by the motion judge. In fact, although the appellant had filed his supplementary affidavit late, and had delivered a reply factum, the motion judge explained to him that she would consider both, as there was no objection by the respondents. In addition, there was nothing to indicate that the appellant requested the opportunity to obtain more evidence, nor did he ask for an adjournment of the summary judgment motion hearing.
Third, the appellant relied on the Court's decision in Thermal Exchange Services Inc. v. Metropolitan Toronto Condominium Corporation No. 1289 to assert that his good faith negotiations with the respondent's representative suspended the operation of the limitation period. The Court distinguished that decision on the facts.

2. No.

Even if the new psychodiagnostic report had been before the motion judge, it would not have affected the outcome of the motion..

SHORT CIVIL DECISIONS

Maynard v. Johnson Controls Canada LP , 2023 ONCA 392

[Lauwers, Huscroft and Zarnett JJ.A.]

COUNSEL:

S. Gordon and Reuben Rothstein, for the appellant
N. C. MacDonald and Chris Randall, for the respondent

Keywords: Contracts, Employment, Wrongful Dismissal, Remedies, Damages, Payment in Lieu of Notice, Employment Standards Act, 2000 , S.O. 2000, c. 41

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be ought about your specific circumstances.

Canada: COURT OF APPEAL SUMMARIES (May 29, 2023 – June 2, 2023) Blaney's Appeals

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CIVIL DECISIONS

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FACTS:

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REASONING:

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REASONING:

SHORT CIVIL DECISIONS

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Canada: COURT OF APPEAL SUMMARIES (May 29, 2023 – June 2, 2023)
Blaney's Appeals