Hello again.
The Court of Appeal released several civil decisions this week. Topics covered included franchising, jurisdiction, reasonable apprehension of bias, bankruptcy and insolvency and family law. In one noteworthy decision, Bank of Montreal v Javed et al, the court stated that the test for unconscionability had not been changed by the duty of good faith as set out in Bhasin v Hrynew. Stuart Budd & Sons Limited v IFS Vehicle Distributors ULC is an interesting but unfortunate decision in which there was a finding of reasonable apprehension of bias on a jurisdiction motion, leaving the parties back at square one.
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Enjoy your weekend.
CIVIL DECISIONS
Bank of Montreal v. Javed, 2016 ONCA 49
[Cronk, Pepall and Lauwers JJ.A.]
Counsel:
Shahzad Siddiqui, for the appellants
No-one appearing for Amer Javed
Ian Klaiman, for the respondent
Facts: Mr. Shah, together with the co-defendant, Amer Javed, provided a joint and several guarantee to the respondent Bank of Montreal (the "Bank") to secure a small business loan to 7596308 Canada Inc. (the "Company"). Mr. Shah later resigned as a director of the Company and ceased to have an active role in it, although he remained vice-president. The Company defaulted on the loan. The Bank made demand for payment on Mr. Shah under his guarantee. The motion judge granted summary judgment on the personal guarantee and ordered the appellants to pay the respondent. He also set aside the transfer of the appellant Ileshkumar Shah's half-interest in the matrimonial home to his spouse, the appellant Mayaben Shah, on the basis that it was a fraudulent conveyance.
Issues:
(1) Did the Bank's conduct render the loan transaction unconscionable?
(2) Did the motion judge err in finding that Mr. Shah's transfer of his interest in the matrimonial home to Mrs. Shah was a fraudulent conveyance?
Holding: Appeal dismissed.
Reasoning:
(1) No. The three-part test for determining unconscionability is set out in Teitelbaum v. Dyson. Bhasin v Hrynew and the organizing principle of good faith in contract law have not altered that test. That test requires a plaintiff to show that the defendant abused its bargaining power, preyed upon the plaintiff, or that the bargain was improvident. The motion judge found that the test for unconscionability was not met. The Bank's account manager refused to provide information to Mr. Shah because the Company had withdrawn his authorization. However, based on the language of the guarantee, the Bank had an obligation to provide information to the guarantor regarding the state of the Company's indebtedness to the Bank, to the extent that it was secured by the guarantee, and, hence, to information about the state of the guarantor's personal exposure under the guarantee. In this case, since the Bank provided nothing to Mr. Shah in response to his request, it therefore breached its contractual obligation to provide information to him in accordance with the terms of the guarantee. Nevertheless, the breach by the Bank of its contractual disclosure obligation to Mr. Shah was not sufficiently serious to give rise to a right of rescission in his favour. Furthermore, the appellants did not discharge their positive obligation to prove damages for the Bank's breach.
(2) No. The motion judge made no error in finding that Mr. Shah's transfer of his half-interest in the matrimonial home to Mrs. Shah two days after being told by the Bank's account manager that a demand would be made on the guarantee was a fraudulent conveyance.
Global Royalties Limited v. Brook, 2016 ONCA 50
[Strathy C.J.O. (In Chambers)]
Counsel:
Harvey Stone, for the respondents
Frank Bennett, for the appellant
Facts:
The appellant was deemed bankrupt in February 2015. The respondents brought an action in June 2015. The statement of claim alleges that the appellant, a former employee, breached his fiduciary duties to them by opening up a competing business, stealing proprietary information and diverting sales to the new business. The statement of claim seeks damages, injunctive relief and declaratory relief and alleges breaches of duty before and after the date of bankruptcy.
The appellant took the position that the action was invalid because, as an undischarged bankrupt, the proceedings against him were stayed by s. 69.3 of the BIA.
In the Superior Court, the respondents brought a motion for the following relief:
(a) a declaration that s. 69.3 of the BIA did not apply to stay the claims for injunctive and declaratory relief, or the claims for damages from the appellant's post-bankruptcy conduct, because they are not claims provable in bankruptcy; and
(b) an order under s. 69.4 of the BIA lifting the stay of proceedings for the damages claimed against the appellant for his pre-bankruptcy conduct.
The motion judge granted the motion. The motion judge agreed that the claims arising after the date of bankruptcy and the claims for injunctive and declaratory relief were not stayed by s. 69.3. This was because they were not claims provable in bankruptcy under s.121 of the BIA. The motion judge therefore found there was no need for an order lifting the stay for those claims.
The appellant appealed under s. 193(b) of the BIA, and also sought leave to appeal under s. 193(e).
Issues:
(1) Did the appellant have a right of appeal under s. 193(b) of the BIA?
(2) Should the appellant be granted leave to appeal, if necessary, under s. 193(e)?
Holding: Appeal Dismissed, Leave to Appeal Denied.
Reasoning:
(1) No. The court held that the appellant had no right of appeal under s. 193(b). The court made it clear that s. 193(b) concerns "real disputes" likely to affect other cases raising the same or similar issues. The court held that it was a matter of speculation to suggest that this case would likely affect other cases involving similar issues. Further, the court held that none of the grounds of appeal set out in the notice of appeal provided a basis to conclude that the order would impact related cases in bankruptcy.
(2) No. The court relied on the test set out in Business Development Bank of Canada v. Pine Tree Resorts. The prevailing considerations are whether the proposed appeal (a) raises an issue that is of general importance to the practice in bankruptcy and insolvency matters or to the administration of justice as a whole; (b) is prima facie meritorious; and (c) would not unduly hinder the progress of the bankruptcy or insolvency proceedings.
The appellant argued that this issue was a matter of general importance in bankruptcy and insolvency, and that his appeal had merit. The court did not find that the proposed appeal raised an issue of general importance in bankruptcy and insolvency matters. The court also held that on a motion to lift the stay the bankruptcy court is not required to look into the merits of the action. In any event, the court also held that the appellant had not satisfied it that the proposed appeal is prima facie meritorious.
Gledhill v. Toronto Police Services Board, 2016 ONCA 37
[Lauwers J.A. (In Chambers)]
Counsel:
Mark Gledhill, acting in person
Kathryn J. Manning, appearing as amicus curiae
Judith Parker, for the respondent Her Majesty the Queen in Right of Ontario
Andrew Davidson, for the respondent Toronto Transit Commission
Timothy Duggan, for the respondents MikeGold Construction Ltd., K & G Group, Sam Goldband, Jeffrey Goldband, Corsetti Paralegal P.C., Cathy Corsetti, Leo Corsetti, Better Living Homes Inc., Jeffrey Rena and Dwayne Witford
Damian Hornich, for the respondent Toronto Police Services
Facts: The moving party, Mark Gledhill, had vexatious litigant declarations issued against him in three actions by Justice Dunphy. Justice Dunphy also dismissed the application brought by Mr. Gledhill against a large number of the respondents who were the applicants in the applications for vexatious litigant declarations. Mr. Gledhill issued a notice of appeal only dealing with the application that was dismissed by Justice Dunphy. It was dismissed because it was brought without leave of a judge of the Superior Court.
Mr. Gledhill filed an amended notice of appeal that included the vexatious litigant declarations. However, the Rules of Civil Procedure do not permit the tacking on of appeals of different proceedings to an existing notice of appeal. Mr. Gledhill then issued a notice of motion asking the court's direction respecting the proper procedure for appeal and an extension of time for filing an amended notice of appeal. Chief Justice Strathy held that Mr. Gledhill must apply for leave to the Superior Court to appeal Justice Dunphy's dismissal of his application.
Issues: Should an extension of time for filing a supplementary notice of appeal and for the perfection of the appeal be granted?
Holding: Motion granted.
Reasoning:
Yes. Mr. Gledhill did not obtain leave from the Superior Court to appeal the dismissal of his application by Justice Dunphy as required by Chief Justice Strathy. The law is clear that Mr. Gledhill can appeal the vexatious litigant declarations without leave but a vexatious litigant is not allowed to appeal any other decision or order without leave of a judge of the Superior Court as required under s. 140(3) of the CJA and confirmed by the court in Kallaba v. Bylykbashi. The appeal of Justice Dunphy's dismissal of Mr. Gledhill's application was struck without prejudice to his right to seek leave of the Superior Court.
The Crown and other parties on the appeal argued that Mr. Gledhill was out of time in his vexatious litigant appeals. The court held that he was technically out of time but that his intention throughout was to appeal the vexatious litigant orders. The court was not prepared to deprive Mr. Gledhill of his substantive right of appeal and extended the time to appeal the three vexatious litigant declarations to January 29, 2016.
Dodman v. Preston, 2016 ONCA 59
[Juriansz, Hourigan and Brown JJ.A.]
Counsel:
Timothy R. Pedwell, for the appellant
Kiran Sah, for the respondent
Facts:
The appeal lies from a six day trial. The trial judge calculated the equalization payment at $183,911.76 owing to the appellant. He ordered the entire proceeds of the sale of the matrimonial home ($277,068.48 currently held in trust) be used to make that payment. However, the proceeds of sale belonged to the appellant and respondent equally, and the order therefore had the effect of using some of the appellant's to make the equalization payment owing to the appellant.
Issue:
(1) Did the trial judge err ordering how the equalization should be funded?
(2) Did the trial judge err in his approach to awarding costs?
Holding: Appeal allowed on the first issue. Appeal dismissed on the second issue. The appellant is awarded $7,500 in costs.
Reasoning:
(1) Yes. The trial judge erred by ordering the making of the equalization payment from the proceeds of sale of the matrimonial home in the way that he did. The parties agreed they had equal entitlement to the home, even though the respondent was the sole registered owner. Therefore, the funds held in trust are jointly owned property and the respondent cannot utilize the appellant's share of the funds to cover any portion of the equalization payment.
(2) No. The trial judge did not err in how he awarded costs. The appellant argued that because of the error the trial judge made, the trial judge did not appreciate the reasonableness of his offer to settle. However, the trial dealt with a number of issues. This part of the appeal is dismissed.
Stuart Budd & Sons Limited v. IFS Vehicle Distributors ULC, 2016 ONCA 60
[Weiler, Epstein and Huscroft JJ.A.]
Counsel:
Matthew Latella and Sarah Petersen, for the appellants
Andy Seretis, for the respondents
Facts:
Three Ontario plaintiffs and five out-of-province plaintiffs (the respondents) sued four foreign defendants (the appellants) for breach of various franchise agreements and of certain provisions in two franchise statutes in a statement of claim issued in March 2013. The appellants brought a motion to dismiss the proceeding for lack of jurisdiction. In the alternative, the appellants submitted that the claims should be brought in five provinces, or in the State of California if they were proceed together in one action.
The motion was dismissed. The motion judge found there was jurisdiction simpliciter in Ontario and all claims were to proceed as one action in Ontario as the most convenient forum.
Issues:
(1) Whether the motion judge erred in law and principle regarding the application of the law germane to jurisdiction simpliciter and its intersection with the joinder of claims;
(2) Whether the motion judge erred in law and principle regarding the application of the law germane to the issue of forum non conveniens; and
(3) Whether the motion judge's statements, conduct and delay give rise to a reasonable apprehension of bias.
Holding: Appeal allowed. The court concluded there was a reasonable apprehension of bias and a new hearing was ordered.
Reasoning:
The court concluded that the appellants were deprived of a fair hearing and did not consider the other two grounds of appeal in its reasons. It found that the motion judges' actions gave rise to a reasonable apprehension of bias through his unwarranted negative comments about the appellants and counsel, arbitrary curtailing of their argument, and followed by amended reasons that entered the fray as an advocate for his actions and decisions.
The court considered the parties' submissions as they applied to the presumption of integrity and the test of reasonable apprehension of bias. The court noted that while judges benefit from a presumption of integrity, the presumption can be rebutted by a judge's comments or conduct. It also reiterated the test of a reasonable apprehension of bias as "what would an informed person, viewing the matter realistically and practically — and having thought the matter through — conclude. Would he think that it is more likely than not that [the decision-maker], whether consciously or unconsciously, would not decide fairly" (Yukon Francophone School Board, Education Area #23 v. Yukon (Attorney General), 2015 SCC 25).
With these legal principles in mind, the court reviewed the parties' submissions. It found that at various points in the proceedings the motion judge conducted himself in a manner that gave the appearance that he favoured the respondents' position. They noted the motion judge chose to adjourn the motion to give the respondents an opportunity to correct a flaw that he identified as fatal to their position. In addition, the motion judge determined the jurisdiction issue without permitting counsel to debate the complicated issue between joinder and jurisdiction simpliciter. Deciding the motion without allowing counsel to engage in oral argument on these issues deprived the appellants of the opportunity to present their arguments fully.
Further, the overall tenor of the motion judge's remarks suggested a critical view of jurisdiction motions and of that motion in particular, with his finding that the motion was an abuse of process despite no factual or legal foundation for such a finding. The court held the finding of abuse of process was a relevant consideration to the ultimate determination that a reasonable apprehension of bias was established.
The court also found that the motion judge was consistently discourteous towards the appellants' counsel, by criticizing his advocacy skills, knowledge of the law and handling of the matter without justification.
The final consideration for bias was that the motion judge advised counsel he would be preparing an Amended Endorsement for appeal purposes, where he insinuated himself into the appeal process and attempted to defend his actions and his comments. Having regard to the conduct of the proceedings, the court found that an informed and reasonable observer would think the Amended Endorsement was more of an after-the-fact justification for the decision than an articulation of the reasoning that led to the decision. Such conduct will have the effect of displacing the presumption of integrity.
Antunes v. Limen Structures Ltd., 2016 ONCA 61
[Lauwers J.A. (In Chambers)]
Counsel:
Jamie J. VanWiechen, for the moving party
Arnold B. Schwisberg, for the responding party
Facts:
The Respondent, Mr. Antunes, successfully sued the Appellant, Limen Structures, for wrongful dismissal and received $105,228.54 in damages. The trial judge also found Mr. Antunes was entitled under his employment contract to 5% of the Appellant's shares, and awarded "other damages" in the amount of $500,000, representing the value of the shares.
The appellant filed a notice of appeal asking the judgment to be varied by setting aside the award of damages for $500,000, the effect being an automatic stay of the judgment. Mr. Antunes then brought a notice of motion to lift the stay. Limen Structures then filed a "supplementary notice of appeal" challenging the amount of wrongful dismissal damages awarded.
Mr. Antunes argued that the court should exercise its discretion under rule 63.01(5) to lift the stay in respect of the wrongful dismissal damages, interest and costs despite the supplementary notice of appeal, which he argued had no merit. He noted that the financial condition of the company has deteriorated and he worried that by the time the appeal was argued the company would be insolvent. The appellant's counsel asserted that Limen Structures was insolvent.
Issues: Should the stay be lifted?
Holding: Yes – stay lifted.
Reasoning:
A stay of execution imposed by rule 63.01 is intended to offer protection to an appellant against payments which it might not eventually be obligated to make. In these cases, courts must consider a number of contextual factors. The test for lifting the stay is found in SA Horeca Financial Services v. Light: an appellate court judge may lift a stay "on such terms as are just", having regard to three principal factors:
- financial hardship to the respondent if the stay is not lifted;
- the ability of the respondent to repay or provide security for the amount paid; and
- the merits of the appeal.
The court noted that Mr. Antunes testified and was found by the trial judge to be credible, whereas the appellant called no evidence. Mr. Antunes also stated in his affidavit that he was unable to secure long-term employment from the date of termination, causing a great deal of financial stress and hardship. Limen Structures also asserted its inability to pay, and appeared to manage its affairs in such a way as to minimize its financial exposure to Mr. Antunes. The court also took "into account the 'scorched earth' trial and appeal tactics taken by the appellant."
With respect to the merits of the wrongful dismissal appeal, the first ground alleged that the trial judge erred in law in finding that the respondent was entitled to payment in lieu of notice at the top end of the scale for an employee of a five month short-service period. To the contrary, taking into account the Bardal factors and the facts of this matter, the court found that the plaintiff would have been entitled to a reasonable notice period of eight months.
The court concluded that the appellant's challenge was not one of law and instead one of the weight that the trial judge accorded to the Bardal factors. Thus, the appellant needed to demonstrate that the trial judge made a palpable and overriding error. The court held that the merits of the wrongful dismissal appeal were weak, especially considering that the appellant "implicitly acknowledged by only belatedly amending its notice of appeal to add the wrongful dismissal appeal in response to this motion." Thus, the court lifted the stay in respect of the award of wrongful dismissal damages, pre-judgment interest and costs.
Holman v. Holman, 2016 ONCA 67
[Hoy A. C. J. O., Simmons and Tulloch JJ.A.]
Counsel:
Frances M. Wood and Marvin Kurz, for the appellant
Evelyn Huber and Joost K. Heersche, for the respondent
Facts:
At trial, the father was awarded $22,000 in costs. The Court of Appeal allowed an appeal of the trial judge's decision and recalculated the amounts of child and spousal support owing. The court permitted written submissions on costs if the parties were unable to agree.
Issues:
Did the trial judge err in awarding $22,000 in costs?
Holding: Costs award affirmed.
Reasoning:
In arriving at the costs award, the trial judge considered a number of factors, including the complexity of the issues, the conduct of the parties, success achieved and the offers that had been made. The outcome of the appeal did not change the outcome below in a manner that affected the trial judge's exercise of discretion. The offer the father made prior to trial remained considerably more generous than the result obtained by the mother.
CIVIL ENDORSEMENTS
Bruce Eco Landbank Inc. v. Bruce Eco Industrial Park Corporation, 2016 ONCA 35
[Weiler, LaForme and Huscroft JJ.A.]
Counsel:
Wade W. Sarasin, for the appellants
William P. Dermody, for the respondents
Keywords: Notice Registration, Land Titles Act, ss.71
ONTARIO REVIEW BOARD DECISIONS
Kamali (Re) 2016 ONCA 52
[Feldman, Cronk and Roberts JJ.A.]
Counsel:
Ian S. McCuaig, for the appellant
Kathryn Hunt, for the Centre for Addiction and Mental Health
Jessica Smith Joy, for the Attorney General of Ontario
Keywords: Criminal Law, NCR, Treatment Order, Significant Threat to Public Safety
CRIMINAL DECISIONS
R. v. Dhami, 2016 ONCA 51
[MacPherson, Watt and Miller JJ.A.]
Counsel:
Rondinelli, for the applicant
John Neander, for the respondent
Keywords: Criminal Law, Credibility, Witness Cross-Examination, Criminal Code, ss. 683(1(b)
R. v. Aghayere, 2016 ONCA 54
[Feldman, Cronk and Roberts JJ.A.]
Counsel:
Mark C. Halfyard and Breana Vandebeek, for the appellant
Michael Perlin, for the respondent
Keywords: Criminal Law, Fraud, Similar Fact Evidence, Inferred Guilt
R. v. Hooyer, 2016 ONCA 44
[Doherty, Pepall and Tulloch JJ.A.]
Counsel:
Damien Frost and Rebecca Young, for the appellant
Robert Gattrell, for the respondent
Keywords: Criminal Law, Theft, Fraud, Criminal Code, ss. 331 & 380
R. v. Manning, 2016 ONCA 56
[MacPherson, Watt and Miller JJ.A.]
Counsel:
Sam Goldstein and Norm Keith, for the appellant
John A. Neander, for the respondent
Keywords: Criminal Law, Plea, Aggravated Assault, Choking, Break and Enter, Kidnapping, R. v. Summers, Enhanced Sentencing Credit
R. v. O'Shea, 2016 ONCA 53
[MacPherson, Watt and Miller JJ.A.]
Counsel:
Michael Davies, for the appellant
Alexander Hrybinsky, for the respondent
Keywords: Criminal Law, Possession of Child Pornography, Plea
R. v. Phoummasak, 2016 ONCA 46
[Doherty, Pepall and Tulloch JJ.A.]
Counsel:
Timothy E. Breen, for the appellant
Chris de Sa, for the respondent
Keywords: Criminal Law, Controlled Drugs and Substances Act ss.11(7), Unlawful Search and Seizure, Canadian Charter of Rights and Freedoms, s.8, Exigent Circumstances
R. v. Ting, 2016 ONCA 57
[Feldman, MacPherson and Miller JJ.A.]
Counsel:
Chris de Sa, for the appellant
Philip Campbell and Eva Tache-Green, for the respondent
Keywords: Criminal Law, Acquittal, Validity of Warrants, Amplification Evidence, Exclusion of Evidence, Grant Factors, Canadian Charter of Rights and Freedoms, ss.24(2)
R. v. Barkho, 2016 ONCA 62
[Weiler, Tulloch and Brown JJ.A.]
Counsel:
Raymond Boggs, for the appellant
David Friesen, for the respondent
Keywords: Criminal Law, Insurance Fraud, Canadian Charter of Rights and Freedoms, ss.11(b), Evidence, Witness Testimony
R. v. Su, 2016 ONCA 58
[Weiler, Tulloch and Brown JJ.A.]
Counsel:
Peter Lindsay, for the appellant
Jeffrey Pearson, for the respondent
Keywords: Criminal Law, Summary Conviction, Criminal Code, ss. 253(1)(b)
R. v. Ogbamichael, 2016 ONCA 65
[Feldman, Hourigan and Roberts JJ.A.]
Counsel:
Tekle Ogbamichael, acting in person
Katie Doherty, for the respondent
Keywords: Criminal Law, Sexual Assault, Breach of Probation
R. v. Osman, 2016 ONCA 64
[Weiler, Tulloch and Brown JJ.A.]
Counsel:
Eva Taché-Green, for the appellant
Brock Jones, for the respondent
Keywords: Criminal Law, Robberies, Crime Spree, Consecutive Sentences
R. v. Woodman, 2016 ONCA 63
[MacPherson, MacFarland, and Roberts JJ.A.]
Counsel:
Jeffrey Woodman, in person
Michael Dineen, duty counsel
Robert Gattrell, for the respondent
Keywords: Criminal Law, Evidence, Reliability of Prior Statements, R. v. Youvarajah
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