Court Of Appeal Summaries (December 4 – December 8) - Civil Law - Litigation, Mediation & Arbitration

Congratulations to Blaneys' very own Giovanna Asaro who achieved a successful result for our client, the Ontario government, in Algra v Comrie Estate. This was a complex negligence case arising out of a tragic 2011 boating accident that resulted in several deaths and serious injuries. The appeals on the liability issues were dismissed.

Mehralian v Dunmore is an international family law case. The parties lived in multiple countries and initiated and participated in legal proceedings in both Oman and Ontario. The Ontario court recognized the divorce judgment of the Omani court, as the applicant had attorned to the jurisdiction of the Omani courts by participating in the proceedings there. At the same time, the Ontario court determined that Ontario had jurisdiction over parenting issues, as the child was habitually resident here. The appeal was dismissed.

In Frye v. Sylvestre, the Court dismissed an appeal and upheld the lower court's finding that there was no concluded agreement on the sale of shares in a family corporation.

The Rosseau Group Inc. v. 2528061 Ontario Inc was a claim for breach of an agreement of purchase and sale of land. The trial judge departed from the normal measure of damages (the difference between the market value of the land at the time of closing and the purchase price under the agreement) and instead awarded over $11 million based on lost expected profits from the potential development of the land by the purchaser. The Court allowed the appeal from the damage award, finding that the trial judge had erred in departing from the normal award of damages. The matter was remitted to a new hearing on the issue of damages.

Birhane v Medhanie Alem Eritrean Orthodox Tewahdo Church involved the extent of jurisdiction of the courts over voluntary religious organizations. The Court upheld, but revised the application judge's order requiring an annual general meeting of members to take place.

Sanson v Paterson involved a collision between a motor vehicle and cyclist that resulted in an over $2.5 million damage award to the cyclist. The Court allowed the motorist's appeal in relation to an error in the calculation of future income loss, but dismissed the bulk of the appeal.

In Kantoor v Comparone, the Court dismissed an appeal from a trial judgment setting aside a default judgment on a mortgage debt.

Kozoubenko v. Gosk was a consent and capacity matter in which the Court dismissed the appeal as moot.

In Carcillo v. Ontario Major Junior Hockey League, a class action, the Court stayed the order below pending appeal.

Civil Decisions

Sanson v. Paterson , 2023 ONCA 798

Keywords: Torts, Negligence, MVA, Damages, Costs, Highway Traffic Act, R.S.O. 1990, c. H.8, Insurance Act, R.S.O. 1990, c. I.8, Tanner v. Board of School Trustees of School District No. 57 (Prince George), [1976] 5 W.W.R. 240 (B.C.C.A.), Butler v. Royal Victoria Hospital, 2018 ONCA 409, Jungwirth v. Robertson, 2011 ONSC 3021, Burns v. Hedge (2001), 146 O.A.C. 333 (C.A.)

Frye v. Sylvestre, 2023 ONCA 796

Keywords: Contracts, Interpretation, Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 79 D.L.R. (4th) 97 (Ont. C.A.)

Algra v. Comrie Estate, 2023 ONCA 811

Keywords: Torts, Negligence, Duty of Care, Standard of Care, Causation, "But For" Test, Material Contribution Test, Damages, Statutory Cap, Statutory Interpretation, Civil Procedure, Costs, Sanderson Orders, Marine Liability Act, S.C. 2001, c. 6, Canada Shipping Act, S.C. 2001, c. 26, s. 6, Navigable Waters Protection Act, R.S.C., 1985, c. N-22, ss. 5, 14, Occupier's Liability Act, R.S.O. 1990, c. O.2, Clements v. Clements, 2012 SCC 32, [2012] 2 S.C.R. 181, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Gendron v. Doug C. Thompson Ltd. (Thompson Fuels), 2019 ONCA 293, Berry v. Scotia Capital Inc., 2010 ONSC 1948, Brad-Jay Investments Limited v. Village Developments Limited, 2006 CanLII 42636 (ON CA), More v. 1362279 Ontario Ltd. (Seiko Homes), 2023 ONCA 527, Moore v. Wienecke, 2008 ONCA 162, 90 O.R. (3d) 463, Ruth Sullivan, The Construction of Statutes, 7th ed. (Toronto: LexisNexis Canada, 2023),

Mehralian v. Dunmore, 2023 ONCA 806

Keywords: Family Law, Parenting, Civil Procedure, Jurisdiction, Foreign Divorce Judgments, Attornment, Res Judicata, Children's Law Reform Act, R.S.O. 1990, c. C.12, Housen v. Nikolaisen, 2002 SCC 33, Beals v. Saldanha, 2003 SCC 72, Wolfe v. Pickar, 2011 ONCA 347

Kozoubenko v. Gosk, 2023 ONCA 802

Keywords: Administrative Law, Health Law, Health Care Consent, Consent and Capacity, Civil Procedure, Appeals, Mootness, Fresh Evidence, Amicus Curiae, Health Care Consent Act, 1996, S.O. 1996, c. 2, Sched. A, ss. 4, 80, Palmer v. the Queen, [1980] 1 S.C.R. 759, Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342 , Adsett v. Labelle, 2023 ONSC 2842, A.N. v. Guimond, 2020 ONSC 6751, Giannoylis v. McIntyre, 2018 ONSC 547, M.L. v. Meng, 2023 ONSC 4775, M.N. v. Klukach, 12 Admin L.R. (4th) 101 (Ont. S.C.J.), Doherty v. Horowitz, 2016 ONSC 4457, Dickey v. Alexander, 2016 ONCA 961, Starson v. Swayze, 2003 SCC 32, L.(L.) v. T.(I.) (1999), 46 O.R. (3d) 284 (C.A.)

Kantoor v. Comparone, 2023 ONCA 812

Keywords: Contracts, Debtor-Creditor, Mortgages, Civil Procedure, Default Judgments, Setting Aside, Reasonable Apprehension of Bias, Metro Financial Planning Limited and Dinesh Khanna v Ontario (Superintendent Financial Services), 2017 ONFST 4, Supreme Court of Canada in R. v S (RD), [1997] 3 SCR 484, Committee for Justice and Liberty v National Energy Board, [1978] 1 SCR 369, Yukon Francophone School Board v Yukon (Attorney General), 2015 SCC 25

Carcillo v. Ontario Major Junior Hockey League, 2023 ONCA 818

Keywords: Intentional Torts, Assault, Civil Procedure, Class Proceedings, Certification, Appeals, Jurisdiction, Stay Pending Appeal, Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 7, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 6(2), Rules of Civil Procedure, r. 63.02(1)(b), Cole v. Hamilton (City) (2002), 60 O.R. (3d) 284 (C.A.), Abuzour v. Heydary, 2015 ONCA 249, Ncube v. Hassen, 2022 ONCA 840

The Rosseau Group Inc. v. 2528061 Ontario Inc., 2023 ONCA 814

Keywords: Contracts, Breach, Interpretation, Real Property, Agreements of Purchase and Sale of Land, Damages, Remoteness, Quantification, Mitigation, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Ontario First Nations (2008) Limited Partnership v. Ontario Lottery and Gaming Corporation, 2021 ONCA 592, Domicile Developments Inc. v. MacTavish (1999), 45 O.R. (3d) 302 (C.A.), Di Millo v. 2099232 Ontario Inc., 2018 ONCA 1051, Time Development Group Inc. (In trust) v. Bitton, 2018 ONSC 4384, 1179 Hunt Club Inc. v. Ottawa Medical Square Inc., 2019 ONCA 700, Earley-Kendall v. Sirard, 2007 ONCA 468, Lamba v. Mitchell, 2021 ONSC 1612, G.P.I. Greenfield Pioneer Inc. v. Moore, [2002] 58 O.R. (3d) 87 (C.A.), 1476335 Ontario Inc. v. Frezza, 2021 ONCA 822, SFC Litigation Trust v. Chan, 2019 ONCA 525, 100 Main Street Ltd. v. W.B. Sullivan Construction Ltd. (1978), 20 O.R. (2d) 401 (C.A.), 642947 Ontario Ltd. v. Fleischer (2001), 56 O.R. (3d) 417 (C.A.), Rougemount Capital Inc. v. Computer Associates International Inc., 2016 ONCA 847, Akelius Canada Ltd. v. 2436196 Ontario Inc., 2022 ONCA 259, Kinbauri Gold Corp. v. Iamgold International African Mining Gold Corp. (2004), 246 D.L.R. (4th) 595 (Ont. C.A.), Saramia Crescent General Partner Inc. v. Delco Wire and Cable Limited, 2018 ONCA 519, Musqueam Indian Band v. Glass, 2000 SCC 52, Re Farlinger Developments Ltd. and Borough of East York, [1975] 61 D.L.R. (3d) 193 (Ont. C.A.), DHMK Properties Inc. v. 2296608 Ontario Inc., 2017 ONSC 2432, 1427814 Ontario Limited v. 3697584 Canada Inc., 2012 ONSC 156, WED Investments Limited v. Showcase Woodycrest Inc., 2021 ONSC 237, Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19, Eastwalsh Homes Ltd. v. Anatal Developments Ltd., [1993] 12 O.R. (3d) 675 (C.A.)

Birhane v. Medhanie Alem Eritrean Orthodox Tewahdo Church, 2023 ONCA 815

Keywords: Voluntary Associations, Governance, Religious Organizations, Not-for-Profit Corporations, Ontario Corporations Act, RSO 1990, c. C.38, Ontario Not-for-Profit Corporations Act, 2010, SO 2010, c.15, Charities Accounting Act, RSO 1990, c. C.10, Ethiopian Orthodox Tewahedo Church of Canada St Mary Cathedral v Aga, 2021 SCC 22, Ukrainian Greek Orthodox Church v Ukrainian Greek Orthodox Cathedral of St Mary the Protectress, [1940] SCR 586, Rexdale Singh Sabha Religious Centre v Chattha, 2006 CanLII 39456 (Ont CA), Ivantchenko v Sisters of Saint Kosmas Aitolos Greek Orthodox Monastery, 2011 ONSC 6481, Lakeside Colony of Hutterian Brethren v Hofer, [1992] 3 SCR 165, Syndicat Northcrest v Amselem, 2004 SCC 47, Pankerichan v Djokic, 2014 ONCA 709, Highwood Congregation of Jehovah's Witnesses (Judicial Committee) v Wall, 2018 SCC 26, Mathai v George, 2019 ABQB 116, Hart v Roman Catholic Episcopal Corporation of the Diocese of Kingston in Canada, 2011 ONCA 728, Rex Ahdar & Ian Leigh, Religious Freedom in the Liberal State, 1st ed. (Oxford: Oxford University Press, 2005)

Short Civil Decisions

Lauzon v. Ontario (Justices of the Peace Review Council), 2023 ONCA 810

Keywords: Costs

CIVIL DECISIONS

Sanson v. Paterson, 2023 ONCA 798

[Doherty, Pepall and Zarnett JJ.A.]

Counsel:

D. Zarek and M. C. Owen, for the appellant John B. Paterson

N. Koutsoubos-Giovanoglou and K. Temple, for the appellant Security National Insurance Company

N. G. Wilson and M. Coker, for the respondent

facts:

This appeal involved the collision of a motor vehicle with a cyclist in Toronto. The respondent cyclist, GS, a highly respected human rights lawyer, sued the appellant driver, JBP, and was granted judgment for over $2.5 million in damages. JBP and the respondent's excess insurer, Security National Insurance Company ("Security National"), appealed from that judgment.

The trial judge found that JBP had not paid any attention to the cyclist to determine her position and to ensure it was safe for him to accelerate forward into the intersection. The trial judge's impression was that he was preoccupied with the upcoming maneuver he would have to make to move from the curb lane to the centre lane to avoid cars parked in the curb lane ahead. The trial judge found it likely that the cyclist was not right up against the curb as JBP had suggested but likely on or near the sharrow symbol (bicycle lane markings) as the respondent had recalled. JBP had failed to watch the respondent closely to ensure his safe passage and did not look at her at all as he was accelerating into the intersection. He had not noticed her till the impact, at which point he got out of his car to see if the respondent was all right. The respondent acknowledged that there was a scuff mark or smear on the side of his car caused by contact with the bicycle.

The trial judge found that JBP had failed to discharge the reverse onus found in s. 193(1) of the Highway Traffic Act. He had not found that any conduct on the respondent's part caused or contributed to the collision. He found JBP was wholly responsible and liable for the collision.

In analysing causation, he found the respondent to be a credible witness whose complaints were confirmed by essentially unchallenged medical evidence. He concluded that she had demonstrated on a balance of probabilities that she suffered and continues to suffer injuries and symptoms caused by the collision. She was more likely than not in the minority of patients who continue to suffer from mild traumatic brain injuries on an ongoing basis and her injuries had persisted to the point that they were regarded as permanent.

issues:

Did the trial judge err in his liability analysis and reasons?
Did the trial judge err in his choice of procedure utilized to assist in itemizing elements of the damages award?
Did the trial judge err in considering specific components of, or omissions from, the award relating to (1) past and future income loss, (2) housekeeping expenses, (3) deductions of benefits, and (4) contingencies?
Did the trial judge err in his calculation of costs?
Did the trial judge err in calculating other incidental parts of the award?

holding:

Appeal allowed in part.

reasoning:

Section 193(1) of the Highway Traffic Act provides that when loss or damage is sustained by any person by reason of a motor vehicle on a highway, the onus of proof that the loss or damage did not arise through the negligence or improper conduct of the owner, driver, lessee or operator of the motor vehicle is upon the owner, driver, lessee or operator of the motor vehicle.

The trial judge found that JBP had not discharged this onus. His self-acknowledged failure to look at the respondent once the light turned green in order to ensure he could safely pass her as he entered the intersection reflected a failure to meet the minimum requirements of basic prudence. The trial judge found that no conduct of the respondent contributed to the collision. The trial judge addressed details of the collision including the location of the parties' vehicles and determined that JBP was insufficiently attentive. Moreover, the respondent's evidence was that she was hit twice by a car coming from behind and that JBP identified himself as the driver of the car that had collided with her. The mark on his car was consistent with a collision between the respondent's bicycle and the appellant's car.

The Court noted that JBP had failed to disprove negligence. Accordingly, he was responsible for the collision. Given the reverse onus and the trial judge's finding that JBP had not satisfied his burden, there was no need to engage in any Anns/Cooper inquiry. Liability was established. The Court concluded that there was no basis for any appellate intervention.

JBP submitted that the trial judge accepted new evidence from Mr. M, the respondent's accounting expert, which included actuarial calculations for future housekeeping. He complained that he had no opportunity to cross-examine Mr. M or to reply to this evidence. He asserted that this was procedurally unfair.

The Court rejected this submission. No objection was taken to the procedure that was used. Consistent with his direction, there was no new evidence relied upon by the trial judge nor did JBP ever make a request to cross-examine Mr. M or to file any evidence in reply. Moreover, although the appellants objected to the housekeeping award, the amounts included in the final judgment were all calculable from the trial judge's reasons and the evidence he referred to in his reasons, and no one suggested that the calculations were in error.

No, except for Past and Future Income Loss Award

Past and Future Income Loss Award

The Court was of the opinion that the trial judge erred in his past and future loss of income award. Firstly, the trial judge awarded $210,000 in 2012 dollars, adjusted for inflation. However, even the respondent acknowledged that this amount was in excess of the amount she had sought.

Second, in his May 16, 2022 reasons, the trial judge stated that $210,000 in 2012 dollars adjusted for inflation at 2% was just above the mid-point of Mr. M's calculations. However, Mr. M's evidence and demonstrative aid showed that his range of $147,700 to $248,500 was "in 2022 dollars". Inflation was already built into Mr. M's figures.

Third, the trial judge's earning capacity determination was not, as he indicated in his August 11, 2022 reasons, "well-supported by the overall evidence". There were two palpable and overriding errors in his August 11, 2022 endorsement. First, the $250,000 figure represented the gross revenue of the respondent's law firm, not the respondent's gross income. Second, there was only one year in which the respondent's gross income exceeded $200,000 and that was in 2009 when her gross income was $207,000 and her law firm's gross revenue was $252,859.

Lastly, it was clear from the trial judge's detailed May 16, 2022 reasons that his analysis centred on the expert evidence, which, as noted above, did not support an award of $210,000 in 2012 dollars.

In essence, the trial judge erred in relying on the 2022 estimates in Mr. M's evidence and treating them as 2012 figures in his loss of income calculations. This was a palpable and overriding error. The figure of $210,000 using 2022 dollars was just above the mid-point of Mr. M's range, within the range sought by the respondent at trial, and in keeping with the other evidence on the respondent's pre-collision earning capacity. The Court therefore allowed the appellants' appeal on this issue. The judgment as it related to the income loss award should have been varied to adjust the $210,000 earning capacity figure to 2022 dollars rather than 2012 dollars.

Future Care and Housekeeping

The Court disagreed with the appellants' submission that there was no physician or medical evidence to support the future housekeeping award of $118,194 to age 80. First, while actuarial evidence may be persuasive evidence that a court may consider along with other evidence, it is not an absolute requirement: Tanner at para 30.

Second, the only future care costs awarded by the trial judge were for prescription medications and housekeeping. The former was not seriously challenged by the appellants and there was evidence to support the housekeeping award. This included extensive medical evidence on the respondent's impaired condition; testimony from the respondent and her life partner on the respondent's need for assistance; and evidence from an occupational therapist, a speech language pathologist, and the family physician, Dr. Ouchterlony, who has extensive experience in the field of brain injury. In addition, the respondent tendered recent invoices for actual housekeeping costs. The Court rejected this ground of appeal.

Deduction of Benefits

In his May 16, 2022 reasons, the trial judge addressed out-of-pocket expenditures and noted that those amounts were offset by amounts that had been paid out to the respondent by her accident benefits insurer or by her life partner's insurer through a spousal benefits plan. He stated that the total amount that the respondent had received from those sources totalled just over $60,000 and that this offset would eclipse the total claims he had allowed.

The Court agreed with the trial judge's reasoning that it appeared that the $60,000 was already deducted from the out-of-pocket expenses claimed by the respondent and in any event, he had received no such argument from the appellants at trial. The trial judge had not erred in declining to deduct the respondent's business expense benefits of $60,000 from the award for past loss of income. These benefits had not amounted to an "income continuation benefit plan". They did not represent any income replacement and the trial judge had properly concluded that the benefits were not based on pre-collision income.

Contingencies

At trial, the appellants did not ask for the application of contingencies. It was raised for the first time in Security National's correspondence of June 22, 2022. In these circumstances, it was open to the trial judge to refuse Security National's request. Furthermore, it was not an error to decline to adjust for general contingencies: Butler at para. 11. As for specific contingencies, the trial judge addressed the alleged decline of the respondent's pre-accident practice, her pro bono work, her participation in continuing legal education and her attempts to return to work. Mr. M testified that he considered contingencies but decided not to apply any. He was not cross-examined on this evidence. There was no evidence from the appellant's expert, Mr. S, on contingencies. In the absence of any request for contingencies and given the state of the evidentiary record, the trial judge did not err in failing to apply any contingencies.

The Court noted that there was no merit to the appellant's argument that the trial judge erred in his costs disposition. The trial judge expressly stated that he was "of course unaware whether there have been any relevant offers to settle that may impact" his assessment of costs and then sought submissions on costs.

The Court also rejected the argument that an under insurer does not have to contribute costs where the primary insurer has not offered its policy limits. Security National submitted that JBP could have resolved the case within his policy limits. There was no need for a primary insurer to tender its policy limits to warrant a costs award against an under insurer. Maximum flexibility was afforded to the trial judge in such circumstances. The Court refused to interfere with the trial judge's discretionary order.

Subrogation

The issue of subrogation was only raised by the Security National appellant in correspondence sent to the trial judge on June 21, 2022, and was not the subject-matter of submissions. Given the late request, it was open to the trial judge to decline the request. The Court made no determination as to whether such an order would be available from the Superior Court on proper notice and materials.

Sufficiency of Reasons and Weighing of the Evidence

JBP submitted that the trial judge's reasons were insufficient. Relatedly, the Security National appellant submitted that the trial judge erred in his weighing of the evidence. The Court disagreed, stating that the trial judge carefully reviewed all of the evidence and gave his rationale for why and how he found as he did in his reasons of May 16, 2022, which were 469 paragraphs in length.

Frye v. Sylvestre, 2023 ONCA 796

[Hourigan, Zarnett and George JJ.A.]

Counsel:

G. Avraam and M. Nowina, for the appellant

W. V. Sasso and M. W. Shulgan, K.C., for the respondent

Keywords: Contracts, Interpretation, Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 79 D.L.R. (4th) 97 (Ont. C.A.)

facts:

This case concerned an action to enforce an agreement to acquire the respondent's shares in a family corporation, and for a declaration that the respondent had consented to the sale of shares owned by one of her brothers, over which she was a co-trustee.

On a motion for summary judgment, the motion judge held that the respondent did not make a binding agreement to sell her shares to the appellant and did not agree or consent to a sale of her brother's shares.

The agreement at issue was contained in an exchange of emails dated October 19, 2020. After reviewing the language of the emails and the context of what occurred before and after them, the motion judge found there was no concluded agreement for two reasons.

First, the emails did not record an agreement to the 2019 BDO suggested structure for the way the transaction would be structured. As a result, the respondent never agreed to it. Second, there was no concluded agreement as to the payment of dividends. Despite there being a history of quarterly dividends, it was not clear that they were capped amounts regardless of how long the respondent and the trust remained shareholders.

issues:

Did the motion judge make palpable and overriding errors in coming to their conclusions and did the motion judge place undue reliance on surrounding circumstances, and especially on conduct after the October 19, 2020 emails, to detract from the clear meaning of their text?

holding:

Appeal dismissed.

reasoning:

No.

The October 19, 2020 email exchanges contemplated the parties taking steps towards giving effect to the sale transactions and the BDO structure and method of payment. However, as Robins J.A. explained in Bawitko Investments Ltd. v. Kernels Popcorn Ltd., an exchange of correspondence agreeing on terms to be incorporated into a more formal document will not amount to an enforceable contract in certain circumstances, including where "essential provisions intended to govern the contractual relationship have not been settled or agreed upon."

The structure and method of payment suggested by BDO in 2019, updated by BDO in December 2020 to determine the purchase price, was never agreed to. It was open to the motion judge to find that the structure and method of payment were essential terms.

Furthermore, there was no error in the motion judge's finding that there was no concluded agreement on the terms concerning dividends. The email exchange did not include a closing date, raising the question of whether the amounts specified as outstanding dividends were to be all that was ever payable even if completion of the sale was materially delayed.

Algra v. Comrie Estate, 2023 ONCA 811

[Hourigan, Roberts and Coroza JJ.A.]

Counsel:

D. W. Leschied, M. W. Shulgan, K.C., and J. Benson, for the appellants/respondents by way of cross-appeal (COA-22-CV-0057), and for the respondents (COA-22-CV-0155), BJLA et al.

G. Monforton and H. Colman, for the appellant/respondent by way of cross-appeal (COA-22-CV-0151), and for the respondent (COA-22-CV-0155), DF

L. Abey and N. M. Kirby, for the respondent/appellant by way of crossappeal (COA-22-CV-0057 & COA-22-CV-0151), and the appellant (COA-22-CV0155), P.M.M, Litigation Administrator of the Estate of AC

D. J. Lee and J D. Sharpe, for the respondent/appellant by way of cross-appeal (COA-22-CV-0057 & COA-22-CV-0151), and the appellant (COA22-CV-0155), BJLA as Estate Trustee of the Estate of DM

J. Levine and A. Franzke., respondent/respondent by way of cross-appeal (COA-22-CV-0057 & COA-22-CV-0151), His Majesty the King in Right of Canada, as represented by the Minister of Fisheries and Oceans and the Attorney General of Canada

Giovanna Asaro, for the respondent/respondent by way of cross-appeal (COA22-CV-0057 & COA-22-CV-0151), His Majesty the King in right of Ontario, as represented by the Minister of Transportation for the Province of Ontario

A. R. Szalkai, for the respondent/respondent by way of cross-appeal (COA-22-CV-0057 & COA-22-CV-0151), The Corporation of the Municipality of Leamington

facts:

These appeals arose from a tragic accident on June 5, 2011. DM, AC, BJLA, DF, and SB were in a nighttime boat crash. They were on DM's boat, and AC was driving at the time. They crashed into a breakwater south of the Leamington Harbour. DM, AC, and SB died, and BJLA and DF were badly injured. At the time of the accident, AC had a blood alcohol level that was over the legal limit. He had also been smoking marijuana earlier in the evening.

Ontario owns the breakwater. Prior to the accident, the Government of Canada installed navigation aids on the breakwater. Specifically, it installed a green light at the east end and a flashing yellow light on the west end.

Two actions were commenced as a result of the accident, which were consolidated. Three appeals were before the Court: the Liability Appeal, the Estate's Marine Liability Act Appeal, and the Estates' Costs Cross-Appeal.

issues:

Did the motion judge err in concluding that the Government Respondents were not liable?
Did the motion judge err in law when he found that the cap imposed in s. 29 of the Marine Liability Act does not include claims for costs and interest?
Did the motion judge err in issuing a Sanderson Order and fixing the amount of costs payable on the summary judgment motions?

holding:

Liability appeals dismissed. One cross-appeal on costs allowed.

reasoning:

The Court held that the Liability Appellants did not meet their onus of establishing a basis for appellate interference with the motion judge's analysis. The Liability Appellants argued that the motion judge erred in: (a) drawing an improper inference from the evidentiary record about whether the yellow light on the west end of the breakwater was visible, (b) not undertaking a duty of care or standard of care analysis for the Government Respondents, (c) failing to utilize the material contribution test to determine causation, (d) finding that the sodium vapour lights were not a cause of the accident, and (e) finding, based on an unreasonable inference, that AC and DM were not keeping a proper lookout. Each of these submissions was considered by the Court.

Visibility of the Yellow Light: The Liability appellants submitted that the motion judge drew an impermissible inference, which infected his legal analysis on the issue of liability. In his reasoning, the motion judge cited the evidence of the Captain of the Canadian Coast Guard, who participated in an early morning search effort after the accident. The Captain stated that she observed the light at the west end of the breakwater throughout the night. The motion judge also relied on the evidence of the first responders who "saw the lights on both ends of the breakwater and noted that they were operational" and the two collision reconstructionists who testified that they could see the lights when they arrived at the scene around 4:30 a.m. The Court held that based on the foregoing, it appeared that the motion judge's finding that the yellow light was operational and clearly visible was well supported by the evidence.
Duty of Care and Standard of Care Analyses: The Liability Appellants submitted that, while the motion judge conducted a duty of care analysis for both AC and DM in their respective roles as "operator" and "master" of the vessel, he did not undertake a duty of care analysis for the Government Respondents. With respect to Canada – namely, Transport Canada and the Canadian Coast Guard – they submitted that the duty of care arose from the federal legislative scheme that mandates the protection of mariners and imposes a duty to ensure the safety of life at sea. With regard to Ontario, they noted that the Ontario Ministry of Transportation owned the breakwater and submitted that it has to comply with its regulatory duties as owner, including duties under the Occupier's Liability Act. The Court held that it was evident from the motion judge's reasons that he proceeded on the basis that the Government Respondents all owed a duty of care to the Liability Appellants. The motion judge's analysis focused on the issue of causation and the motion proceeded on the basis that all Government Respondents owed a duty of care to the Liability Appellants. The Liability Appellants also took issue with the absence of a standard of care analysis. The Court, however, held that it was not a material or extricable error of law not to have engaged in this analysis. Ultimately, the Court held that there was nothing improper in the motion judge assuming a breach of the standard of care and moving on to the issue of causation.
Material Contribution Test: The Liability Appellants submitted that the motion judge erred in law in not adopting the "material contribution to risk test" in his causation analysis. The Court held that the motion judge properly applied the "but for" test rather than the "material contribution to risk" test. The Court noted that the material contribution test is only appropriate where it is impossible for a plaintiff to prove which of several defendants caused the plaintiff's injury using the "but for" test. In the case at bar, it was not impossible for the Liability Appellants to establish "but for" causation, and the "material contribution to risk" test was not in play.
Sodium Vapour Lights: The primary complaint here was that the sodium vapour lights interfered with the visibility of the yellow light on the west end of the breakwater. The first submission was that Leamington breached its regulatory duties not to interfere with navigation on Lake Erie by installing the sodium vapour lights without the permission of the federal government in contravention of s. 5(1) of the NWPA. The Court agreed with the motion judge's conclusion that the legislation does not apply to the Marina's sodium vapour lights, as they were on shore, and, per s.5(1), the Act only covers structures built or placed in, on, over, under, through, or across navigable waters. The second submission was that the sodium vapour lights decreased the visibility of the yellow light and were, therefore, a cause of the collision. The Court held that the motion judge made no error in his finding. The motion judge properly established the direction of the vessel based on expert evidence and relied on evidence to determine that the sodium vapour lights would not have impeded the visibility of the yellow light.
Improper Look Out: The Liability Appellants asserted that the motion judge's causation analysis was flawed because he found that Comrie and Monteiro were not keeping a proper look out. The Court held that the motion judge's findings were well entrenched in the evidence and supported by common sense inferences. The motion judge closely examined the factual record and grounded his causation analysis in the specific facts as established in the record. The motion judge properly concluded that AC and DM were aware of the presence of the breakwater. Consequently, the intensity of the light was not a factor, nor was the presence of the sodium vapour lights. Given that the vessel had successfully completed several laps, AC and DM must have known the location of the breakwater and the lights must have been visible. Why, then, did they drive straight into the breakwater? The motion judge found that this was because they were not keeping a proper look out at the time of the collision. The Court held this to be a logical inference.

The Court held that the motion judge undertook a careful review of the MLA and determined that, when imposing a monetary cap for maritime claims for loss of life or personal injury, Parliament did not intend to include claims for costs and interests. The Court held that the motion judge's analysis was correct. The legislation was silent on whether costs or interest were included under the cap. The role of costs is to ensure that litigation is conduced in an efficient, fair, and just manner, and that the role of prejudgement interest is to account for the delay between injury and judgment. The Court held that claims for interest and costs are of a different nature than claims for loss of life or personal injury. If Parliament wanted to restrict those claims, it could have done so with explicit language. Such a restriction would be extraordinary because it would interfere with the ability of courts – grounded in provincial legislation – to control the litigation process through two of their most effective tools. If costs were included in a legislated cap, then defendants and their insurers would effectively be playing with "house money" and have less incentive to act reasonably.

Yes, in respect of only one of the cross-appellants on costs.

The Court held that leave to appeal the motion judge's quantification of costs and his Sanderson Order should be denied. The motion judge properly applied the applicable law and committed no error in making his discretionary costs order. The motion judge properly applied the two-step test as set out in Moore v. Wienecke.

Leave to appeal a costs order will not be granted save for in obvious cases where the party seeking leave convinces the Court that there are "strong grounds upon which the appellate court could find that the judge erred in exercising his discretion". Regarding the fixing of costs in the instant case, the Court was not satisfied that the motion judge made any error. He carefully canvassed the law and correctly applied the relevant legal principles in determining the amount of costs.

With respect to the award of costs in favour of BJLA's Estate, counsel for the DM's Estate conceded that the motion judge made an obvious error in finding that only the AC Estate was liable given that it had cross-claimed against the DM Estate. This was a sensible concession. This error met the high standard required to warrant appellate intervention. The Court granted leave to appeal on this issue and allowed that appeal only.

Mehralian v. Dunmore, 2023 ONCA 806

[Trotter, Sossin and Monahan JJ.A.]

Counsel:

A. Macri, for the appellant (COA-23-CV-0250)/respondent (COA-23-CV-0580)

M.J. Stangarone and M.P. Melito, for the respondent (COA-23-CV-0250)/appellant (COA-23-CV-0580)

facts:

This appeal arose from two separate orders of the Ontario Superior Court dealing with issues relating to the breakdown of the parties' marriage and parenting arrangements for their child, M.

The parties were married in Japan on June 26, 2015. They lived in Japan until 2016, when they moved to the United Arab Emirates. They separated for a period in 2017 but reconciled in 2018 and then lived together in Oman until March 2020. In 2021, the parties separated after an altercation. In June 2021, the applicant wife commenced an Ontario proceeding seeking a divorce, corollary relief and equalization of property. At the same time, the respondent husband commenced a court proceeding in Oman seeking a divorce and joint custody of M.

The applicant contested the jurisdiction of the Omani courts in relation to the proceeding commenced there by the respondent but, on March 7, 2022, the Omani Court of Appeal found that Oman had jurisdiction. The two appeals before the Court arose from a motion by the respondent in the Ontario Superior Court in which he sought an order recognizing the validity of the Omani divorce in Ontario, as well as an order returning M. to what he claimed was the child's habitual residence in Oman pursuant to s. 40 of the Children's Law Reform Act. The application to recognize the Omani divorce order in Ontario was granted, however the motion for the return of the child to Oman was dismissed. Both the applicant and respondent appealed.

issues:

Did the Divorce Recognition Judge err when he held that the applicant had attorned to the jurisdiction of the Omani courts?
Did the Divorce Recognition Judge err in his finding that the applicant could not relitigate issues that she had unsuccessfully raised before the Omani court?
Did the Parenting Jurisdiction Judge fail to consider the settled intention of the parties in determining whether M. was habitually resident in Ontario at the time of the parties' separation in May 2021?

holding:

Appeal dismissed.

reasoning:

The Divorce Recognition Judge's finding that the applicant attorned to the jurisdiction of Omani courts was one of fact. He found that, although the applicant initially contested the jurisdiction of the Omani courts, she subsequently made a voluntary and rational choice to participate fully on the merits. This included litigating the merits of the divorce, in which she asserted that under Omani law her marriage to the respondent was invalid and that the respondent had made false statements in the course of obtaining the divorce. The applicant also sought and obtained relief from the Omani court, through the award of custody of M.

The Court held that the Divorce Recognition Judge's finding was firmly grounded in the factual record. His findings in this regard were based on facts that were essentially uncontested. The Court found there to be no basis for disturbing his finding that the applicant attorned to the jurisdiction of the Omani courts.

Parties to an action are free to select or accept the jurisdiction in which their dispute is to be resolved. As the Divorce Recognition Judge noted, a party that has voluntarily attorned to the jurisdiction of a court has consented to having the issues in dispute determined by that court. Where jurisdiction is established through such consent, as in this case, it is unnecessary to consider whether there are other grounds upon which a court's jurisdiction might be either recognized or challenged, such as whether the parties had a real and substantial connection with the jurisdiction in question.

The Court held that for the same reason as above, the Divorce Recognition Judge did not err in his finding that the applicant could not relitigate issues that she had unsuccessfully raised before the Omani court. These issues included whether the applicant had received valid notice of the Omani divorce and whether the respondent had committed fraud in obtaining the divorce. Having consented to the application of Omani law, the applicant could not now argue that the decision of the Omani court should not be recognized in Ontario because the law on which it was based is contrary to Canadian public policy.

The respondent argued that he and the applicant did not have a shared intention to move to Toronto when they travelled here in April 2021. Instead, he argued that they were merely visiting Ontario temporarily and planned to return to the Middle East. The Parenting Jurisdiction Judge had credibility concerns with respect to the evidence of both parties. However, she ultimately preferred the evidence of the applicant on the issue of the parties' residence in April and May 2021. She found that the applicant's evidence was more aligned with the documentary evidence and made more narrative sense than did that of the respondent.

The Parenting Jurisdiction Judge therefore found that the parties decided to move to Toronto and began residing here in early April 2021, and were not merely temporarily visiting, as the respondent had claimed. The Parenting Jurisdiction Judge concluded that this was sufficient to establish that M. was habitually residing here, in accordance with s. 22(1)(a) of the CLRA.

The Court held that the Parenting Jurisdiction Judge's finding that the parties had decided to move to Ontario in early April 2021 was one of fact. Moreover, it was based upon a careful and detailed review of the evidence, in light of credibility findings made by the Parenting Jurisdiction Judge. Accordingly, it was entitled to a high degree of deference. The respondent has not identified any palpable or overriding error in the Parenting Jurisdiction Judge's factual analysis. He merely invited the Court to accept the same evidence that was expressly rejected by the Parenting Jurisdiction Judge and accept his submission that the parties were merely visiting Ontario in April 2021.

Moreover, the Parenting Jurisdiction Judge did not err in finding that the recognition of the Omani divorce by the Divorce Recognition Judge did not oust the parenting jurisdiction of Ontario courts in relation to M. The Parenting Jurisdiction Judge correctly pointed out that the Divorce Recognition Judge's mandate was to determine the divorce issue only, reserving to the Parenting Jurisdiction Judge the determination of parenting jurisdiction over M.

Kozoubenko v. Gosk, 2023 ONCA 802

[van Rensburg, Nordheimer and George JJ.A.]

Counsel:

R.K, acting in person

L. Leinveer, appearing as amicus curiae

facts:

In October 2018, Mr. K. was found to be incapable of consenting or refusing consent to treatment with anti-psychotic medications, both oral and injectable. Dr. Gosk concluded that Mr. K. satisfied the first part of the two-part test set out in s. 4 of the Health Care Consent Act, 1996, S.O. 1996, c. 2, Sched. A (the "HCCA"): he had the ability to understand the information that was relevant to making a decision about the proposed treatment. However, she determined he did not satisfy the second part as he was unable to appreciate the reasonably foreseeable consequences of a decision or lack of a decision.

The finding of incapacity was upheld on review by the Consent and Capacity Board (the "Board") while Mr. K. was a patient at CAMH. Mr. K's appeal to the Superior Court of Justice ("SCJ") pursuant to s. 80 of the HCCA was dismissed in 2019. Mr. K. further appealed in July 2019, together with a motion by the respondent, Dr. G., to introduce fresh evidence and to dismiss the appeal as moot. In September 2022, at the request of the respondent, amicus curiae was appointed to assist the court with respect to the appeal.

Amicus filed a factum asking that the SCJ order be reversed, that the decision of the Board be quashed, and that the court make an order that Mr. K. was capable at the time of his assessment and the Board review in October and November 2018 in respect of the specified psychiatric treatment. Alternatively, amicus requested that the matter be referred back to the Board for a new hearing.

Dr. G.'s factum contended that there was no reversible error that would warrant allowing the appeal. Dr. G. also brought a motion for the admission of fresh evidence and for an order dismissing the appeal as moot. The fresh evidence consisted of an affidavit from Dr. G. stating that, as of May 17, 2023, Mr. K. was no longer receiving in-patient treatment at CAMH, that no physician from CAMH was proposing any treatment, and that, because Mr. K. had not been treated since 2018, a new capacity assessment would be required if new treatment were proposed. The introduction of fresh evidence for the purpose of the mootness motion was not opposed by amicus. The evidence was argued to be both relevant and necessary for the purpose of determining whether Mr. K.'s further appeal was moot, and, if so, whether the court should exercise its discretion to permit the appeal to proceed.

issues:

Is the appeal moot?

holding:

Appeal dismissed.

reasoning:

Yes.

An appeal is moot where the "tangible and concrete dispute has disappeared", that is, when there is no live controversy that requires resolution between the parties: Borowski v. Canada (Attorney General), at p. 353. The court may nevertheless exercise its discretion to hear a moot appeal. One factor to consider is whether the court's decision on the appeal will have a practical effect on the rights of the parties: Borowski, at p. 360.

The Court was not persuaded that the determination of the appeal some five years after the 2018 incapacity finding would have a practical effect on Mr. K.'s rights such that the appeal should be heard notwithstanding that it was moot. The Court accepted that the appeal was moot because there was no longer a "live controversy" between Mr. K. and Dr. G. The question was whether the Court should exercise its discretion to hear the appeal on the basis that a decision will have an effect on Mr. K.'s rights.

First, there was no information in the record before the Court about Mr. K.'s current mental health status and condition, other than that he had no ongoing therapeutic relationship with CAMH. While the Court was advised by amicus that Mr. K. was living in difficult conditions and that no treatment was being "held up" as a result of the appeal, there was unfortunately no information about any interactions he may have had with any health practitioner other than the two brief contacts with the CAMH emergency department, and whether he had been offered and accepted or refused any form of treatment. The absence of information about Mr. K.'s circumstances made it difficult to assess whether hearing the appeal would have any practical effect on his rights.

Second, capacity to consent to treatment must be determined afresh each time a new treatment is proposed. Whether or not the appeal is successful, any future treatment proposed would require the health practitioner to consider whether Mr. K. was capable of consenting to that treatment at that time. In each case a new capacity assessment would have to be performed. Any subsequent opinion with respect to Mr. K.'s capacity to consent to a particular treatment would also be subject to the review and appeal procedures provided under the HCCA.

Third, if the Court were to determine that the Board erred and that Mr. K. was in fact capable in October 2018, it may be difficult to discern a "prior capable wish" from the circumstances that existed at that time: was it Mr. K.'s wish in October and November 2018 not to be treated at all with anti-psychotic medication, or was it, as he later agreed, to take olanzapine, but at a suboptimal dose of 2.5 mg? At a minimum, the record suggested that Mr. K.'s wishes were inconsistent over the course of the two-month period of his assessment by Dr. G. and the Board hearing.

Fourth, even if the expression of a prior capable wish could be ascertained from what transpired in October and November 2018, Mr. K.'s substitute decision-maker could depart from that wish with the approval of the Board. According to the record, Mr. K.'s mother indicated, while he was an in-patient at CAMH, that she would refuse 2.5 mg of olanzapine because it was a subtherapeutic dose, he was non-compliant when taking it before and because he had substantial weight gain when he took it. The availability of a statutory procedure for determining and departing from a prior capable wish expressed by a person found incapable of consenting to treatment is a relevant factor.

Kantoor v. Comparone, 2023 ONCA 812

[Rouleau, Benotto and Copeland JJ.A.]

Counsel:

P. Baxi, for the appellants

M. Lesage, for the respondents

facts:

In 2007, D.K, a mortgage broker, and his company, Metro Financial Planning Ltd., arranged refinancing of the respondents' home, including a second mortgage with V.K, D.K's wife (the "Second Mortgage"). The Second Mortgage, transferred later to S.H and then back to V.K, was the subject of the appeal. In 2010, the respondents defaulted on the Second Mortgage, leading V.K to obtain a default judgment. Subsequently, in 2012, V.K initiated action to recover further amounts owing on the Second Mortgage. In 2017, the Financial Services Tribunal (FST) revoked D.K and his company's mortgage brokerage licence, finding that D.K had not conducted business with honesty and integrity. The action against the respondents went to trial in 2022, where the trial judge, referencing the FST findings, struck out the default judgment against the respondents as an abuse of process and awarded them damages for overpayment on the Second Mortgage and slander.

issues:

Did the trial judge err by striking out the default judgment because the delay to move to set aside the default judgment was not explained?
Did the trial judge err by granting the respondents' motion to strike the appellants' statement of claim as an abuse of process?
Did the trial judge err by finding that J.C was credible and D.K was not?
Did the trial judge err by creating a reasonable apprehension of bias?

holding:

Appeal dismissed.

reasoning:

& 2. No

The Court stated that if it were to accept the trial judge's findings that D.K's brokering and administration of the mortgages was essentially corrupt and that $41,494 said to be owing on the mortgage were the result of fraud by D.K and his company, the first two issues would become moot. The claims against the respondents were for amounts that were found not to be owing. The trial judge found that the delay in moving to set aside the default judgment was explained because the respondents were overwhelmed at the prospect of losing their home, they were going through difficult times, and they were "consumers, unrepresented, with little in the way of resources to defend an action." This evidence was uncontradicted. The Court concluded that it was open to the trial judge to make those findings on the record.

3. No.

The trial judge explained his credibility findings in reference to the evidence before him. The Court found that his findings were entitled to deference.

4. No.

At the opening of an earlier case involving D.K, the trial judge asked if anyone objected to him presiding over the case due to his previous dealings with D.K, to which counsel for the appellants confirmed there were no objections. The appellants later claimed bias, but their allegation was based on the judge's findings rather than his conduct. The standard for reasonable apprehension of bias, as established by the Supreme Court of Canada in R v S (RD), requires that the bias must be reasonable in the context of the case, and the individual considering the alleged bias must be reasonable and informed. There is a presumption of judicial impartiality and a significant burden on those alleging bias. The Court concluded that the appellants' allegation of bias stemmed from losing the trial, but there was no evidence of bias in the conduct or reasoning of the trial judge.

Carcillo v. Ontario Major Junior Hockey League, 2023 ONCA 818

[Nordheimer J.A. (Motions Judge)]

Counsel:

V. Calina and D. Rosenfeld, for the appellants

G. Beaulne, N. Butz and M. Torgov, for the respondents

T. Pinos and N. Campion, for the respondents, Jaw Hockey Enterprises LP c.o.b. Erie Otters, IMS Hockey c.o.b. Flint Firebirds, Saginaw Hockey Club, L.L.C., EHT, Inc., John Doe Corp. A o/a Everett Silvertips Hockey Club, Winterhawks Junior Hockey LLC, Portland Winter Hawks Inc., Thunderbirds Hockey Enterprises, L.L.C., John Doe Corp. B o/a Seattle Thunderbirds, Brett Sports & Entertainment, Inc., Hat Trick, Inc., John Doe Corp. C o/a Spokane Chiefs, Tri-City Americans Hockey LLC and John Doe Corp. D o/a Tri-City Americans

facts:

This appeal arose out of a proposed class action against 60 amateur hockey clubs that compete at the highest level of junior amateur hockey in Canada. The 60 amateur hockey clubs are all members of the Canadian Hockey League. The proposed class is composed of all former and current players who claim to have suffered abuse while playing in the CHL between May 8, 1975, and the present. The abuse is stated to have included sexual assault, hazing, bullying, physical and verbal harassment, sexual harassment, and other activities.

The appellants moved for a stay pending appeal of the order made pursuant to s.7 of the Class Proceedings Act, 1992 (CPA).

issues:

Should a stay of the s. 7 order be granted pending the outcome of the appeal from that order?

holding:

Motion granted.

reasoning:

No.

The motion judge considered whether he should permit the proceeding to continue as one or more proceedings between different parties pursuant to s. 7(2) of the CPA. The motion judge decided that he should. He held that to allow the s. 7 process to unfold and to prevent the recommencement of any limitation periods, the operation of the order dismissing the Certification Motion was suspended for 120 days pending the determination of a motion for approval of an Individual Issues Protocol. The motion judge directed the proposed representative plaintiffs to prepare an "Individual Issues Protocol" for 60 individual actions and to bring a motion for approval of the Individual Issues Protocol.

The respondents contended that the Court did not have jurisdiction to grant the requested stay. They maintained that any request for a stay should be directed to the motion judge or to a judge of the Divisional Court, since any appeal of the s. 7 order lies to that court with leave as it is an interlocutory order, in their view. The respondents add that they would consent to a stay if the matter was brought before the motion judge. The Court held that the motion judge was, of course, not obliged to grant a stay just because the parties consent to one.

The appellants did not agree that the appeal of the s. 7 order lies to the Divisional Court but maintained that, even if it does, the s. 7 order is so inextricably linked to the dismissal of the certification motion that the Court ought to take jurisdiction over it under s. 6(2) of the Courts of Justice Act. The respondents however, argued that s. 6(2) of the Courts of Justice Act cannot be relied upon because the appellants require leave to appeal to the Divisional Court and the Court will not exercise its authority under s. 6(2) unless and until leave is granted. The Court held that on that point, the respondents were correct.

The Court noted that since this motion was before a single judge of the Court, issues involving the jurisdiction of the Court could not be decided. If the Court does not have jurisdiction to entertain an appeal of the s. 7 order, then the remedy is for the respondents to bring a motion to quash before a panel, which they have not done. Until that occurs, the fact was that there is a pending appeal in the Court and r. 63.02(1)(b) applies in accordance with its plain wording.

The Court held that no purpose is to be served by requiring the parties to make another attendance before a different judge only to raise the same issue about the stay. The judge concluded that there was jurisdiction in the Court under r. 63.02(1)(b) to grant a stay and the stay of the s.7 order was granted.

The Rosseau Group Inc. v. 2528061 Ontario Inc., 2023 ONCA 814

[Benotto, Trotter and Zarnett JJ.A.]

Counsel:

J.T. Curry and A. Quinn, for the appellant

S. Schwartz and E. Quail, for the respondent

facts:

This appeal raised the question of whether a departure from the normal measure of damages for breach of contract was appropriate.

The respondent ("Rosseau Group") was the purchaser, and the appellant ("252") was the vendor, under an agreement for the sale of development lands (the "APS"). The purchase price was $350,000 per acre based on the number of developable acres within the property, and was ultimately set, subject to final adjustment at about $6.6 million. The purchase did not close. Rosseau Group brought an action alleging that 252 breached the agreement.

Rosseau Group did not, however, seek the normal measure of damages for that breach, and led no expert appraisal evidence that the property was worth more on the closing date than the contractual purchase price. Instead, it sought the profits it claimed it would have earned had it acquired the property and developed it into serviced residential lots over a period of six years after closing.

The trial judge found that 252 had breached the APS by refusing to complete the transaction because the $400,000 further deposit had not been paid. She held that this was an appropriate case to depart from the normal measure of damages and awarded Rosseau Group over $11 million as a "reasonable estimate" of its "lost expected profit".

issues:

Did the trial judge err in finding that the amendments to the APS removed the requirement that the Rosseau Group post a further $400,000 deposit?
Did the trial judge err in finding that Rosseau Group was not required to tender?
Did the trial judge err in finding that the Rosseau Group was ready, willing, and able to tender and in any event erred by not considering herself bound by the finding on the motion to vacate the CPL that Rosseau Group was not ready, willing, and able to close the transaction o the closing date?
Did the trial judge err in departing from the normal measure of damages?
Did the trial judge err in awarding damages that violated the remoteness principle?
Did the trail judge err in not using the proper date for assessment of damages and making an award that failed to address contingencies?

holding:

Appeal allowed, in part.

reasoning:

The Court held that whether the amended APS did away with the requirement for a $400,000 further deposit was an issue of contractual interpretation. Absent an extricable legal error, the trial judge's interpretation is entitled to deference on appeal. The Court held that the trial judge did not make an extricable legal error.

The trial judge was not construing the legal effect of a deposit in a situation where the parties had not specified what that effect would be. She was deciding what effect should be given to the language the parties used in the amendment to the APS. In the amendment, the parties set out the precise components of the purchase price − the assumption of the BMO Mortgage, the VTB mortgage, the initial deposit and the balance to be paid on closing. These four amounts were expressly described in the amendment as totalling the full purchase price. The initial deposit was referred to in the amendment as being credited against the balance payable on closing, and future changes to net developable acres were to be adjusted from the VTB mortgage. It was thus significant that the amendment did not refer to the further deposit as a component of the purchase price at all, let alone state how, or against what component of the purchase price, the further deposit was to be credited.

Although the amendment did not expressly say that the Schedule to the original APS that provided for the further deposit was deleted, the trial judge was required to construe the APS as a whole, post-amendment, including reconciling apparently inconsistent terms. In doing so she was entitled to consider whether the express language of the amendment should be given priority over a Schedule to the original APS that was inconsistent with it. The trial judge was entitled to conclude that the parties deleted the requirement for the further deposit by the language of the amendment.

The Court held that the genesis of the amendment, in the sense of the identification of points the parties were expecting it to address, was relevant objective evidence of "background facts at the time of the execution of the contract". The trial judge used those facts properly to deepen her understanding of the language of the amended APS, not to overwhelm that language. She reached an interpretation that was grounded in the text.

252 argued that the trial judge should have treated the failure to tender as fatal to Rosseau Group's claim. The Court disagreed. Because Rosseau Group did not accept 252's anticipatory repudiation of the APS, but instead rejected it, it kept the APS alive, and both parties remained bound to perform their obligations on the closing date. In order to rely on 252's failure to close on September 19, 2017, Rosseau Group had to be ready, willing, and able to close on that date. But that obligation was satisfied if Rosseau Group was (as the trial judge found) actually ready, willing, and able to close.

The Court saw no error in the trial judge's conclusion that a tender was not required. Although tendering is one way of showing that a party is ready, willing, and able to close, it is not the only way. While tender is the best evidence that a party is ready, willing and able to close, tender is not required from an innocent party enforcing his or her contractual rights when the other party has clearly repudiated the agreement or has made it clear that they have no intention of closing the deal.

252 argued that the trial judge erred in finding that Rosseau Group was in fact ready, willing, and able to close. It argued that although the trial judge found that Rosseau Group had sufficient funds available from related entities to close the transaction, this was insufficient as it had not taken possession of those funds itself. It also argued that although the trial judge found Rosseau Group could assume the BMO Mortgage, this too was insufficient because it took no steps to do so. And it argued that the trial judge should have considered herself bound by the findings about readiness to close made on the CPL motion. The Court disagreed.

The Court held that on the question of funds for closing, the trial judge's finding that the funds required to close were available to Rosseau Group was sufficient. With that availability, it was ready, willing, and able to close. The added step of symbolically depositing the funds in its own account for a transaction that 252 would not complete would have been a meaningless or futile gesture of the type the law does not insist upon. The obligation of Rosseau Group to assume the BMO Mortgage was an obligation in favour of 252. To perform it, if the transaction were completed, Rosseau Group would have had to make the mortgage payments that 252 had committed to − it would be in breach of that obligation and would have to indemnify 252 if it did not.

The Court held that the trial judge's finding that Rosseau Group could have assumed the BMO Mortgage, in other words, that it could have performed the BMO Mortgage obligations it agreed to assume, was sufficient.

Yes.

The Court held that the trial judge erred in departing from the normal measure of damages in the absence of anything that suggested that that measure would not address Rosseau Group's recoverable loss.

The normal measure of damages for a failed real estate purchase is the difference between the contract price and the market value of the land on the "assessment date". The assessment date is usually the date on which the purchase was scheduled to close. Although the court may set a later date if the party seeking damages satisfies certain criteria, the presumption is that damages are to be assessed as of the date of the breach. That presumption is not easily displaced; any deviation from it must be based on legal principle.

Yes.

The trial judge noted that Rosseau Group, in calculating its lost expected profit from the opportunity it would have had to develop the property, was not claiming damages according to the normal measure. She said that there is a general discretion in the court to depart from that measure if circumstances warranted. She held the circumstances here justified the departure because the parties in this case specifically contemplated that the property would be developed into serviced lots. These were special circumstances known to the parties at the time they made the APS and amended the APS.

The Court held that it was an error to rely solely on the parties' contemplation of future development to justify a departure from the normal measure of damages in this case. The existence of what the trial judge referred to as special circumstances only meant that a type of loss was recoverable − in other words, it was not too remote. That conclusion is not the same as, let alone determinative of, the question of whether the normal measure is somehow inadequate to measure that loss.

The remoteness test deals with the "type" of loss that is recoverable, while the measure is about how the loss is quantified. Regardless of the branch of the remoteness test into which the loss of an opportunity to acquire lands that can be developed falls, the Court concluded that the normal measure of damages should not be departed from unless the party seeking damages shows that that measure does not address that type of loss. The trial judge made no such finding, nor, in the Court's view, was it available on the record.

The Court held that Rosseau Group's compensation for breach of the APS should take into account development value of the lands. The loss is not too remote.

Yes.

The assessment date is presumptively the date of closing. It can be moved, in the discretion of the court, where to do so is fair, which usually has to do with when the innocent party should re-enter the market so they can engage in mitigating transactions.

The trial judge did not use the date of closing as the assessment date. She was of the view that for a calculation of damages based on an estimate of lost profits, no date of assessment was necessary. Nor does it appear that she used a later date (in the sense of a specific date). Instead, she stated that if a date was required, she considered it to be fair in the circumstances to start the assessment at the date of closing and estimate the expenses and revenue over the period over which the land would be developed − in this case, six years from the closing date. The trial judge did not otherwise explain why no date of assessment was required.

Although when she came to consider mitigation, the trial judge found that 252 had not satisfied its onus of showing Rosseau Group did not take reasonable efforts to mitigate, she did not expressly link that conclusion to the lack of a specific assessment date or the use of a six year period, or specifically equate it to Rosseau Group having satisfied its onus to depart from the presumptive date, or to use a later specific date.

The Court held that a lack of a specific date of assessment of damages was problematic. First, the expected profit is inherent in the value of the land at the date of closing. Second, because the normal measure of damages compares the purchase price to the market value at the date of closing, it compares outflows and inflows of value at the same date. If no date, or multiple dates over a period are used, there can be concerns about what is being measured, and whether amounts are being measured and treated consistently.

When damages are assessed on the basis that an opportunity to make a profit in a certain way was lost, the question arises as to whether a discount is appropriate to reflect the contingency that the opportunity may not be realized, perfectly or at all. The Court held that it did not need to decide whether or what contingency discount should have been applied, as the trial judge erred in using them as she did.

While the Court dismissed the appeal as to liability, it allowed the appeal from the trial judge's order on damages. The Court declined to order nominal damages because the trial judge had made a finding that the property had increased in value by the closing date. However, the trial judge did not make a finding on what that value was. Since the Court was not in a position to determine that value, the matter was remitted to a new hearing on the issue of damages according to the normal measure of damages.

Birhane v. Medhanie Alem Eritrean Orthodox Tewahdo Church, 2023 ONCA 815

[Roberts, Miller and Coroza JJ.A.]

Counsel:

D. Sischy and Y. Gal, for the appellants

A. Morrison and E. Beygi, for the respondents

facts:

The individual parties were all members of Medhanie Alem Eritrean Orthodox Tewahdo Church (the "local Church"). The present litigation arose from a conflict between two groups within the local Church over internal governance issues, particularly whether the board was properly constituted and whether the local Church could be ordered to hold an overdue Annual General Meeting ("AGM"). The application judge ordered that an AGM be held, as required by both the local Church's bylaws and statute. However, two aspects of the order below created unnecessary conflict with canon law and were set aside.

The local Church was incorporated as a not-for-profit corporation under the Ontario Corporations Act. It was governed in part by internal bylaws. The application judge found that the 2014 Bylaws continued to govern. The Diocese promulgated canon law resolutions (the "Canon Law Promulgation") in 2016, which stipulated requirements for the AGM and the board of directors. An AGM was scheduled for December 4, 2021, but the appellants vacated the AGM to facilitate the Diocese's review. In response, on December 24, 2021, the respondents brought the application now under appeal. After multiple court appearances in early 2022, all parties agreed that an AGM would be held. The part of the application relating to the holding of the AGM was heard by the application judge, who ordered the local Church to hold an AGM pursuant to the Not-for-Profit Corporations Act (the "NFPCA") and the 2014 Bylaws, with a court-appointed neutral chair. The appellants appealed.

issues:

Did the application judge err by finding that the respondents, by virtue of their membership in the local Church congregation, were also members of the Church as an incorporated entity (the "Incorporated Church"), and therefore had justiciable legal rights under the NFPCA?
Did the application judge err by holding that the interpretation of the Canon Law Promulgation was justiciable?
Did the application judge err by holding that the respondents were not required to exhaust alternative remedies available within the Eritrean Orthodox Church, and that the respondents nevertheless satisfied this requirement?
Did the application judge err by finding that the individual appellants failed to satisfy their obligations as volunteer directors of the Church?

holding:

Appeal allowed in part.

reasoning:

Yes.

The appellants argued that the application judge did not properly distinguish between the local Church as a congregation and as a corporation, claiming the respondents were not members of the Incorporated Church governed by the NFPCA and its bylaws. They based this argument on s. 121 of the Corporations Act. However, the application judge found no evidence of two separate entities (an unincorporated congregation and an associated corporation) and concluded that the 2014 Bylaws governed a single church entity organized as a corporation, of which the respondents were members. This conclusion, drawn from the bylaws and factual record, was found reasonable by the application judge. The Court found that this determination did not resolve how canon law applied to the dispute or the extent to which the dispute over the governance issues was justiciable.

2. Yes.

The finding that the local Church was organized as a single incorporated entity and subject to corporate governance statutes did not resolve the key disputed issues. The application judge found the Canon Law Promulgation applied only to the Church congregation, not affecting governance issues. Incorporation of a church did not negate its adherence to canon law. The act of incorporation added legal obligations to be reconciled with ecclesiastical duties. The civil law can impose governance obligations on religious bodies within its authority. However, the order for the local Church to hold an AGM per its old bylaws conflicted with canon law. The Church should have been allowed to hold a special or emergency meeting per the 2014 Bylaws to decide on amendments aligning with Canon Law Promulgation, followed by an AGM under the revised bylaws. Better evidence on canon law and church institutions was deemed necessary by the Court.

3. No.

The appellants had an obligation to schedule an AGM in 2019 and to hold an election for directors. They were derelict in this responsibility. The respondents were entitled to seek a remedy through the civil courts. The problem faced by the appellants was an evidentiary one. If there was an internal dispute mechanism by which the respondents could have objected to the failure of the appellants to hold the AGM, they did not provide evidence as to what it is, beyond a general reference to "the Diocese". The Court found that, in the absence of such evidence, the application judge made no error in ordering that an AGM be held.

4. No.

The appellants, as volunteer board members, argued that the application judge applied an overly stringent standard to them regarding election term extensions and record-keeping, asserting they should have been given more leniency for technical faults. They believed they should have been judged against the practices of previous boards, not by strict corporate standards. The Court stated that the application judge was justified in drawing adverse inferences against them for not providing necessary evidence like corporate records. She also correctly determined the need for an AGM as per corporate by-laws and canon law. Some of the application judge's comments, deemed as straying into non-justiciable matters of religious doctrine, such as calling the appellants "obstructionist" and questioning their diligence and care, were seen as potentially unjustified, especially since resolving these issues was not necessary for her ruling.

The Court found that the court-ordered AGM must still take place, but the conditions stipulating that the AGM must accord with the 2014 Bylaws and have a court-appointed neutral chair were struck. The local Church must hold a special or emergency meeting, in accordance with the 2014 Bylaws, for the purpose of voting on whether to amend the Bylaws to adopt the Canon Law Promulgation. This meeting must have a court-appointed neutral chair. The parties were free to agree on a neutral chair subject to court-approval. They were to return to the application judge with a proposed name on consent for the court-appointed neutral chair, or, if there was no agreement, they would be required to return with proposed names, and the application judge would appoint the neutral chair. The local Church must then hold an AGM in accordance with whatever bylaws resulted from the meeting.

SHORT CIVIL DECISIONS

Lauzon v. Ontario (Justices of the Peace Review Council), 2023 ONCA 810

[Lauwers, Roberts and Miller JJ.A.]

Counsel:

L. Greenspon and P. Daly, for the appellant

A. Goldenberg and A. Dobkin, for the respondent

Keywords: Costs

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.

Court Of Appeal Summaries (December 4 – December 8)

Contributor

Table of Contents

CIVIL DECISIONS

Counsel:

facts:

issues:

holding:

reasoning:

Counsel:

facts:

issues:

holding:

reasoning:

Counsel:

facts:

issues:

holding:

reasoning:

Counsel:

facts:

issues:

holding:

reasoning:

Counsel:

facts:

issues:

holding:

reasoning:

Counsel:

facts:

issues:

holding:

reasoning:

Counsel:

facts:

issues:

holding:

reasoning:

Counsel:

facts:

issues:

holding:

reasoning:

Counsel:

facts:

issues:

holding:

reasoning:

SHORT CIVIL DECISIONS

Counsel:

Litigation, Mediation & Arbitration

Contributor

Canada