Canada: Top 5 Civil Appeals From The Court Of Appeal (November 2014)

1.  Brown v. Canadian Imperial Bank of Commerce, 2014 ONCA 677 (Doherty, Epstein and Benotto JJ.A.), October 6, 2014

This appeal is another case in which plaintiffs sought to certify a class action claiming overtime pay.

In June 2012, the Court of Appeal released decisions in Fulawka v. Bank of Nova Scotia, 2012 ONCA 443, Fresco v. Canadian Imperial Bank of Commerce, 2012 ONCA 444, and McCracken v. Canadian National Railway, 2012 ONCA 445, a trilogy of class action cases against federally-regulated employers for unpaid overtime pay. In McCracken, the Court allowed Canadian National Railway's appeal from the certification order due to an absence of "a core of commonality".  In this case the Court of Appeal was required to revisit its decision in McCraken, and the notion of commonality, with the overtime claim brought against CIBC.  

The plaintiffs proposed a class definition consisting of employees who had worked for CIBC after 1996 and who held the job titles of Analyst, Investment Advisor, or Associate Investment Advisor. The motion judge declined to certify the proceeding under s. 5 of the Class Proceedings Act, 1992, S.O. 1992, c. 6, ("CPA"), holding that eligibility for overtime pay under the applicable statutory regime or CIBC's overtime policy could not be determined on a common basis for all members of the proposed class.

The plaintiffs launched an appeal to the Divisional Court and also narrowed the proposed class to exclude those Analysts, Investments Advisors and Associate Investment Advisors who had managerial responsibilities. Nonetheless, the Divisional Court, relying on McCracken, held that the determination of eligibility for overtime pay remained an employee-specific inquiry that could not be resolved as a common issue. The Divisional Court also agreed with the motion judge that none of the other proposed common issues made the claims suitable for certification.

The Court of Appeal granted the plaintiffs leave to appeal from the order of the Divisional Court.

The appellants submitted that both the motion judge and the Divisional Court erred in holding that eligibility for overtime pay was not a common issue. They argued that the lower courts misapprehended the evidence and failed to apply the legal principles governing common issue assessment. They further argued that, in any event, there were other common issues that warranted certification of the class action.

Writing for the Court of Appeal, Doherty J.A. agreed with the lower courts that the outcome of the certification motion turned on s. 5(1)(c) of the CPA, which stipulates that a class proceeding can only be certified if the claims raise common issues, and, specifically, on whether eligibility for overtime pay could be certified as a common issue.  

As Winkler C.J.O. explained in McCracken, the question of commonality is determined on the basis of the evidence led on the certification motion and depends on whether the similarity of employment duties performed by the class members provides "the fundamental element of commonality".  Commonality exists only where the evidence establishes that the responsibilities of all of the employees in the proposed class are sufficiently similar that the classification of those employees as eligible or ineligible for overtime pay could be made for the class as a whole, without regard to the specific circumstances of individual employees.

Emphasizing that the common issues inquiry is evidence-driven, Doherty J.A. observed that the evidence led by the CIBC was similar to that adduced by CN in McCracken. The CIBC's evidence demonstrated a wide range in the duties and responsibilities of employees in the proposed class, revealing the same absence of "core of commonality" which was fatal to the plaintiffs' case in McCracken. Doherty J.A. concluded that neither the motion judge nor the Divisional Court misapprehended the evidence. They also did not err in determining whether eligibility for overtime pay could be certified as a common issue. Both courts' analysis was consistent with that in McCracken.

Doherty J.A. further held that Rosen v. BMO Nesbitt Burns Inc., 2013 ONSC 2144, leave to appeal to Div. Ct. refused, [2013] O.J. No. 6258 (S.C.J.), a certification motion decided after the Divisional Court's ruling, in which the motion judge certified an overtime pay claim, was of no assistance to the appellants. Recalling the evidence-based nature of the commonality inquiry, he noted that the outcome of the Rosen motion turned on significant factual differences from the case at bar.

Doherty J.A. rejected the appellants' submission that even if eligibility for overtime pay was not deemed to be a common issue, the lower courts erred in failing to certify any of the other proposed common issues. Doherty J.A. recalled that in McCracken, after deciding that eligibility for overtime pay of the proposed class members was not a common issue, the motion judge held that the "minimum requirements" to be a managerial employee could be resolved as a common issue. Winkler C.J.O. found that the motion judge erred in this conclusion, noting that without a common issues trial that would resolve the "threshold misclassification issue", determining the issue of the minimum requirements for managerial employment at CN would not advance the proceedings in any meaningful way. There would still be a need for substantial individual inquiries. Doherty J.A. agreed that in the case at bar, without a common issue of eligibility for overtime pay, certification based on proposed common issues involving the terms of the employment contract that relate to overtime pay would be a case of "the tail wagging the dog".

2. Pankerichan v. Djokic, 2014 ONCA 709 (Doherty, Lauwers and Strathy JJ.A.), October 17, 2014

In this appeal, which arose from a dispute over control of church property, the Court of Appeal considered the complex relationship between statutory authorities and church documents.  The Court of Appeal also examined, and put significant restraints upon, the value of American jurisprudence on this issue for Canadian courts.

The appellants were members of a Hamilton, Ontario congregation of the Serbian Orthodox Church, known as the Serbian Orthodox Church-School Congregation of St. Nicholas in Unity. The Congregation occupied a number of properties, which were held in trust under provisions of the Religious Organizations' Lands Act, R.S.O. 1990, c. R.23 ("ROLA"). The deeds to the Congressional properties conveyed them to certain individuals referred to as "trustees", but did not contain any express trust terms.

The dispute began when the respondent, Bishop Georgije Djokic, the head of the Serbian Orthodox Diocese of Canada, forced the Congregation's long-time parish priest to retire. After some members of the Congregation protested, the Diocesan Administrative Board removed the Congregation's elected Executive Board, which, pursuant to the Congregation's governing documents, was responsible for administering Congregational property, replacing it with a Temporary Trusteeship.

The appellants applied for a declaration that the Executive Board held the Congregational properties in trust, and that these elected trustees, not the Temporary Trusteeship appointed by the Diocesan Administrative Board, had authority to manage and deal with the properties.  The application judge refused to make the declarations sought or to order any of the requested relief, including reinstating the Executive Board.

On appeal, the appellants' argued that while the Diocese has authority over spiritual matters, the Congregation, through its Executive Board, has authority over the Congregational property pursuant to the deeds. They argued that the application judge erred by looking beyond the deeds to base his analysis on the constitution adopted by the Diocesan Assembly in 1995, known as the "Statute", the resolutions made by the Diocese based on the Statute and the Diocese's Trusteeship that was imposed pursuant to the Statute, documents that the appellants submitted were "irrelevant and extraneous factors". The appellants asserted that the Diocese's authority under the ROLA must be subservient to provincial legislation, and therefore its constructive removal of the trustees of the property was invalid. They submitted that the application judge ought to have adopted a secular, American approach to resolving church property disputes known as the "neutral principles of law" ("NPL") doctrine.

Writing for the Court of Appeal, Lauwers J.A. noted that while courts are generally reluctant to exercise jurisdiction over conflicts within religious organizations, they have intervened to review the actions of religious bodies when the disputes involve property. Moreover, two recent appeals involving the Anglican Church of Canada demonstrate the emergence of a consistent method for dealing with property disputes, whereby the court will construe the terms of the trust by considering the deeds, the applicable legislation, the canons or church law and, to some extent, the doctrinal context. In Incorporated Synod of the Diocese of Huron v. Delicata, 2013 ONCA 540, leave to appeal refused, [2013] S.C.C.A. No. 439, the Court of Appeal's conclusion that the "Parish" for which the impugned property was held in trust is a static entity was based on Canon 14 as well as its interpretation of the Anglican Church of Canada Act, S.O. 1979, c. 46.  Simply put: members may come and go, but the parish itself remains constant.

The appellants asserted that the Congregation was designated the sole beneficiary under each deed. Lauwers J.A. found, however, that in the absence of express trust terms in the deeds, the application judge correctly expanded his analysis to the ROLA, the 1982 Constitution and the Statute and the Bylaws of the Congregation to determine the relationship between the Congregation, the Church and the Diocese. He considered in particular article 56 of the Bylaws, which provides that the powers of trustees under the ROLA with respect to real property are clearly subject to the approval of the Diocese. Lauwers J.A. held that the application judge's conclusion that the Temporary Trusteeship held the Congregational properties in trust flowed from his consideration of all of these governing documents.

The appellants argued that the application judge ought to have adopted the American NPL doctrine, excluding from consideration virtually all of the Church, Diocesan and Congregational documents. Lauwers J.A. found that the appellants misunderstood the role of the NPL doctrine in American jurisprudence as well as unique concerns under the U.S. Constitution. As the U.S. Supreme Court held in Jones v. Wolf, 443 U.S. 595 (1979), the NPL doctrine is not mandatory in all cases, and does not preclude courts from examining a variety of internal church documents at both the congregational and higher levels.

Additionally, Lauwers J.A. held that the application judge's examination of the ROLA, the deeds, the Statute, the resolutions of the Diocese and the terms of the Temporary Trusteeship was consistent with both the Court of Appeal's general approach and with the NPL approach. Moreover, the evidence before the application judge necessitated his consideration of internal church documents. Canadian courts are free of the anti-establishment concerns unique to the United States, which are rooted in the American First Amendment, which has no equivalent in Canadian law.   Canadian courts have not hesitated to consider religious documents when adjudicating disputes over church property.

3. Mader v. South Easthope Mutual Insurance Company, 2014 ONCA 714 (Weiler, Hourigan and Pardu JJ.A.), October 21, 2014

This case will be important for the personal injury bar.  It affirms the importance of the mandatory mediation procedure for disputes involving the Statutory Accident Benefit Schedule.  It also explores the implications of the accident benefit settlement regulation and the steps that must be taken to rescind a purported settlement.

Michelle Mader ("Mader") was insured by the South Easthope Mutual Insurance Company ("South Easthope").  She was involved in a single vehicle accident in 2002 and sought accident benefits pursuant to the Statutory Accident Benefit Schedule – Accidents on or After November 1, 1996, O.Reg. 403/96 ("SABS – 1996").

Mader and South Easthope got involved in a dispute over Mader's entitlement to income replacement benefits just a few months after Mader began receiving this benefit.  Soon into their dispute, Mader signed a release in favour of South Easthope, settling all accident benefits for the lump sum of $3,000.

In 2005, Mader commenced legal proceedings against South Easthope, seeking a declaration that the release was a nullity. She also sought income replacement and other benefits for life, as well as damages for breach of contract, conspiracy, mental distress and breach of the duty to act in good faith.

South Easthope's lawyer wrote Mader's lawyer, advising that Mader had an obligation to repay the $3,000.00 settlement funds and that she also must file her dispute for mediation at the Financial Services Commission of Ontario ("FSCO") prior to commencing her action in the courts. Mader did neither.

More than seven years later, in January 2013, Mader brought a motion for partial summary judgment. She sought a declaration that she was entitled to income replacement benefits until South Easthope provided a Designated Assessment Centre ("DAC") assessment (despite the fact that DAC assessment facilities ceased to exist in Ontario in 2006). South Easthope brought its own motion for summary judgment, seeking to dismiss Mader's action on the grounds that it was statute barred because she failed to repay the lump sum settlement funds and also failed to file for FSCO mediation. Nightingale J. found in favour of the insurer, South Easthope.  Mader appealed.

Writing for the Court of Appeal, Hourigan J.A. noted that ss. 281(1) and (2) of the Insurance Act, R.S.O. 1990, c I-8 permitted Mader to pursue her claim by way of a court action or a FSCO arbitration, but precluded her from commencing either proceeding prior to first seeking a FSCO mediation. Citing the Court's decision in Hurst v. Aviva Insurance, 2012 ONCA 837, Hourigan J.A. emphasized that mediation is central to the statutory scheme for resolving disputes between insurers and insureds. Failed mediation is a precondition to an insured bringing court proceedings; without it, the court has no jurisdiction to hear the claim.

Hourigan J.A. rejected Mader's submission that her dispute would not be accepted for mediation at FSCO under its Dispute Resolution Practice Code, noting that her claim was clearly contemplated by the Code's mediation procedure, which covers "any dispute" concerning an insured person's entitlement to accident benefits, and that the Code permits mediation where a settlement agreement is in place in cases where the claimant disputes its validity.  

Hourigan J.A. also observed that despite purporting to rescind the settlement agreement, Mader failed to repay the settlement funds in accordance with s. 9.1(8) of the Automobile Insurance Regulation, R.R.O. 1990, Reg. 664. The Automobile Insurance Regulation also precluded Mader from commencing a mediation proceeding under s. 280 of the Insurance Act unless she returned the funds received in the settlement. Affirming Lindsay v. Martin, [2004] O.T.C. 468 (Ont. S.C.), the Court held that before a court proceeding may be commenced, settlement funds must be repaid and mediation must fail. Mader failed to fulfill either of these preconditions.

Mader asserted that her additional claims for mental distress, breach of the duty to act in good faith and conspiracy did not require a FSCO mediation prior to the commencement of an action, arguing that these claims were independent causes of action arising from her insurer's denial of her procedural rights, rather than the denial of benefits grounding her claim for breach of contract. Hourigan J.A. rejected this submission, noting that while breach of an insurer's duty to act in good faith or intentional infliction of mental distress can constitute an independent cause of action, neither was a separate actionable wrong in this case. Applying the Court's decision in Arsenault v. Dumfries Mutual Insurance Co., (2002), 57 O.R. (3d) 625 (C.A.), Hourigan J.A. held that these claims all flowed from the denial of benefits, amounting to "nothing more than a claim that Mader was wrongly denied benefits to which she believes that she is entitled to receive."

Hourigan J.A. concluded that the motion judge was correct to grant South Easthope's motion for summary judgment and dismissing Mader's claim.

Turning to Mader's appeal from the dismissal of her motion for partial summary judgment, Hourigan J.A. noted that the Court of Appeal did not have jurisdiction to hear the appeal from that interlocutory order, as leave was not obtained from the Divisional Court to combine it with the appeal from the final order respecting South Easthope's motion for summary judgment. Hourigan J.A. held that, in any event, all of Mader's claims, including those forming the basis of her motion for partial summary judgment, were properly dismissed on South Easthope's summary judgment motion. Moreover, Hourigan J.A. noted that because DAC assessments ceased to exist in 2006, Mader was essentially seeking an order in perpetuity.

4. Weidelich v. de Koning, 2014 ONCA 736 (Doherty, Laskin and Epstein JJ.A.), October 24, 2014

Two neighbours living in a block of row houses fought so passionately over a right-of-way that they made it all the way to the Court of Appeal, where the Court was required to consider when an encroachment on a right-of-way becomes actionable.

Cottingham Street in Toronto should have been idyllic.  On the south side of the street there were row houses, each property backing onto a private driveway, where, beyond it, was a garage.  The laneway crossed land owned by each of the parties in the appeal which was subject to a right-of-way – designated in each of the property's title documents – in favour of the occupants of the other houses in the row for the purposes of "vehicular ingress and egress".

The Respondent, de Koning, owned the easternmost house in the row, which bordered the laneway's entrance from Cottingham Street. de Koning renovated his home to include an addition which encroached upon the portion of the laneway that passed by his property. Weidelich, who owned four of the adjoining houses, sought a declaration preventing the obstruction of the right-of-way and sought an order for the removal of all structures built upon it. He also sought a declaration that he had certain ancillary rights, including the right to use the right-of-way for snow removal.

The application judge found that the encroachment caused by the renovations still left a right-of-way of at least 4.4 metres, so it did not create "a real or substantial interference" with the laneway. The laneway remained passable and their garages accessible.

Weidelich agreed that the renovation did not preclude access to the garages. Weidelich argued at the Court of Appeal, however, that the practical effect of the encroachment was irrelevant: The encroachment was actionable even if it did not interfere with the ability to use the right-of-way for the purpose identified in the deed.

Writing for the Court, Doherty J.A. agreed with the application judge that an encroachment on a right-of-way is actionable only if it "substantially interferes" with the use of the right-of-way as granted. This principle reflects the nature of the right: The dominant owner does not own the land or the right-of-way upon it, but may enjoy the reasonable use of the property for its granted purpose. It follows that any claim must be predicated on substantial interference with that reasonable use.

Doherty J.A. explained that in evaluating whether an encroachment results in a substantial interference with the claimant's use of his right-of-way, a court will look to the terms of the grant and the nature of the encroachment. This factual determination turns on the impact of the encroachment on the dominant owner's reasonable use of the right-of-way for its granted purpose, or, put another way, whether the right-of-way can be substantially and practically exercised as conveniently as it was before it was encroached upon. In this case, the application judge found that the laneway was as accessible and passable after the construction as it was before. That finding was unchallenged.  

Doherty J.A. rejected Weidelich's submission that the addition to de Koning's home, as a permanent structure, constituted a substantial interference regardless of its practical effect on their reasonable use of the laneway, noting that the case law and jurisprudence do not distinguish between encroachments by permanent structures and other forms of encroachment. Weidelich relied on Albiston v. Liu, [2013] O.J. No. 3685 (S.C.), which did draw such a distinction, to support the claim that "substantial interference" is not defined by the degree of actual interference. In that case, the trial judge held that a trivial interference by a permanent structure is substantial if the defendant deliberately built on the right-of-way. Doherty J.A. dismissed this proposition, finding that Albiston was wrongly decided.

Doherty J.A. also rejected Weidelich's reliance on the Court's judgment in Spencer v. Sallow, 2013 ONCA 98, leave to appeal refused, [2013] S.C.C.A. No. 174. In that case, which involved a motion brought by a land surveyor to rectify a mis-description of a right-of-way, the Court held that territorial limits of easements, including rights-of-way, are "boundaries in every sense of the word".  Doherty J.A. distinguished the case at bar from Spencer, noting that there was no dispute between the parties over the boundaries of the right-of-way - which were clearly delineated in the deed - or with respect to the fact that de Koning's addition encroached over the boundary line onto Weidelich's right of way. The sole issue was whether that encroachment was actionable. Therefore, Spencer was of no assistance.  

Absent actual, substantial interference with the granted right, there was no actionable claim. The application judge's unchallenged finding that there was no such interference compelled dismissal of Weidelich's claim.  

Doherty J.A. noted that the issue of ancillary rights had not been addressed sufficiently before the Court to allow for a definitive declaration as to any such rights associated with the appellants' use of the right-of-way. Potential disputes concerning these rights would have to be settled by the courts in the future if "common sense and neighbourly goodwill" did not prevail.  

5. Susin v. Susin, 2014 ONCA 733 (Hoy A.C.J.O., Feldman and Blair JJ.A.), October 29, 2014

Estate disputes can have all the drama of the most contentious family law proceeding, an unfortunate truism sadly illustrated by the nine Susin siblings' divisive sixteen-year squabble over the estate of their late father, John Sr.

Two competing factions were formed amongst the siblings, one led by John Jr. and Dorino, the other led by Fermino. The former faction had been largely unsuccessful. In fact an order declaring John Jr. a vexatious litigant had already been upheld on an earlier appeal, and numerous costs orders against this camp remained unpaid. In this new skirmish, the Court of Appeal was asked to consider Dorino Susin's appeal from an order that declared him in contempt and which dismissed his request that a passing of accounts of John Sr.'s estate take place in Brampton.

The underlying dispute that lead to this new appeal concerned the choice of venue for proceedings relating to the estate. Team John Jr./Dorino objected to estate matters being dealt with in Welland. Their motion for a change in venue was dismissed in March, 2010, and their attempt to appeal that order was quashed by the Court of Appeal. Despite motions brought in Toronto, Newmarket and Brampton resulting in seven different Superior Court judges affirming that Welland was the proper venue for estate proceedings, including for the passing of accounts, Dorino brought another motion that sought a passing of accounts in Brampton. Team Fermino responded with a cross-motion seeking to find both Dorino and John Jr. in contempt of court as well as an order declaring Dorino to be a vexatious litigant.

Ramsay J. dismissed Dorino's motion for the passing of accounts in Brampton. Although Ramsay J. declined to declare Dorino a vexatious litigant, he found him in contempt, ordered that he be committed to prison for three days and that he pay a $10,000 fine to the estate.  Ramsay J. also prohibited Dorino from taking any further steps in the proceeding, apart from an appeal of his order, or in any proceedings to which Fermino Susin was a party.

Dorino did serve his time in prison, so his appeal focused on the contempt finding and the $10,000 fine. He only abandoned his claim that Brampton was the proper venue for the passing of accounts in oral argument.

Writing for the Court of Appeal, Blair J.A. held that the motion judge had reasonable grounds for refusing to order the passing of accounts, including the fact that Dorino was attempting to re-litigate an issue already litigated repeatedly and decided - repeatedly - in favour of Welland.  

On the issue of contempt, Dorino argued that his motion did not constitute disobedience of the previous orders requiring that all estate matters be dealt with in Welland, and that the motion judge therefore had no authority to make a contempt order. Blair J.A. explained that there is no practical difference between failing to obey orders and failing to recognize and accept them "by repeatedly launching unmeritorious motions seeking the same relief that was the subject matter of these orders and was denied." Such actions have the same destructive effect on the integrity of the administration of justice. Regardless whether it amounted to breach of a court order, Dorino's conduct was intended to, or likely to, interfere with the fair administration of justice.  Blair J.A. held that it was open to the motion judge to find Dorino in contempt.

Dorino argued that the contempt order should be set aside because Dorino was not personally served with the contempt cross-motion. In Blair J.A.'s view, the proceedings leading up to the contempt finding afforded Dorino procedural fairness and did not deprive him of a fair hearing.

Blair J.A. did object, however, to Ramsay J.'s order of a $10,000 fine payable to the estate as opposed to the province of Ontario. As the Court held in SNC-Lavalin Profac Inc. v. Sankar, 2009 ONCA 97, contempt of court is an offence against the authority of the court and the administration of justice. A fine imposed for contempt should therefore not be payable to a party in the action, but rather to the Provincial Treasurer. Blair J.A. held that this principle ought to apply equally to cases of contempt at common law, where a party is not found in contempt for breach of a court order but for the failure to recognize and accept the validity of previous orders. Blair J.A. set aside the portion of the order relating to the payment of the fine, noting that it would make it even more difficult for the estate to recover Dorino's outstanding liabilities and that the objectives of deterrence and of emphasizing the importance of respect for the court's process were met by Dorino's three days' imprisonment.

Finally, while Blair J.A. declined to interfere with the motion judge's decision to impose a prohibition order in relation to further steps in the proceedings, he found that the scope of the order, which amounted to an absolute prohibition, went beyond what was reasonably necessary. Blair J.A. therefore varied the order to include the words "without leave of the court".

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