Court Of Appeal Summaries (January 1 – 5, 2024)

Martin v. Wright Medical Technology Canada Ltd is a class action decision involving a claim for negligent manufacturing of a prosthetic hip implant. There were two actions brought. The amendments to the Class Proceedings Act, 1998 provided for mandatory dismissal of claims if certain steps were not taken within one year of commencement of the action or coming into force of the amendments on October 1, 2020. The amendments also imposed a more difficult test for certification, but older cases that had not yet been certified were grandfathered and the old certification test continued to apply to them. Counsel in the earlier action took steps to avoid it being administratively dismissed, and to preserve the application of the old certification test. The later claim was exposed to administrative dismissal. The motion judge allowed the claims made in the later action to proceed as part of the older action, but ordered that the new Act, and therefore the new test for certification, applied to all of the claims made in the one consolidated action. The Court disagreed with the motion judge and allowed the appeal. The Court emphasized the legislative intent to maintain a clear distinction between actions started under the old and amended Acts, and concluded that there was no reason the certification judge cannot apply the different tests to the different claims.

In 3 Gill Homes Inc. v. 5009796 Ontario Inc. (Kassar Homes), 2024 ONCA 6, the appeal involved a dispute over a failed real estate closing where the purchaser was 35 minutes late in tendering funds. The vendor refused an extension, considered the purchaser in breach and terminated the contract. The application judge in favour of the vendor, as the "time is of the essence" clause was to be strictly enforced and had not been waived. The Court dismissed the appeal.

York Condominium is a condo law decision in which the lower court orders requiring the sale of a unit holder's property who persistently breached the Fire Code were upheld..

El Rassi-Wight v. Arnold is a family law decision that considered whether a settlement of property issues constituted a binding and enforceable domestic contract. The Court dismissed the appeal, agreeing with the motion judge that the agreement should not be enforced because it did not meet the formalities of a valid domestic contract and there was no basis to relax the formalities in this case..

Wishing everyone an enjoyable weekend.

Table of Contents

Civil Decisions

York Condominium Corporation No. 221 v. Mazur , 2024 ONCA 5

Keywords: Real Property, Condominiums, Oppression, Civil Procedure, Order, Enforcement, Writs of Possession, Condominium Act, 1998, S.O. 1998, c. 19, Kaiman v Graham, 2009 ONCA 77, Ontario Energy Savings LP v 767269 Ontario Ltd, 2008 ONCA 350

Martin v. Wright Medical Technology Canada Ltd. , 2024 ONCA 1

Keywords: Torts, Negligent Manufacture, Civil Procedure, Class Proceedings, Statutory Interpretation, Class Proceedings Act, 1992, S.O. 1992, c. 6, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, David v. Loblaw Companies Ltd., 2022 ONCA 833, Bourque v. Insight Productions, 2022 ONSC 174, St. Louis v. Canadian National Railway Company, 2022 ONSC 2556, Lamarche v. Pacific Telescope Corp., 2022 ONSC 2553, LeBlanc et al. v. The Attorney General of Canada et al., 2022 ONSC 3257, Westgate v. WestJet Airlines Ltd., 2022 ONSC 4190, D'Haene v. BMW Canada Inc., 2022 ONSC 5973, A. (B.) v. University of Ottawa, 2023 ONSC 310, Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City), 2015 ONCA 572, Fresco v. Canadian Imperial Bank of Commerce, 2012 ONCA 444, Smith v. Inco Limited, 2011 ONCA 628

El Rassi-Wight v. Arnold , 2024 ONCA 2

Keywords: Family Law, Property, Domestic Contracts, Enforcement, Setting Aside, Family Law Act, R.S.O. 1990, c. F.3, s. 55(1), s. 56(4), Gallacher v. Friesen, 2014 ONCA 399, Virc v. Blair, 2014 ONCA 392, Anderson v. Anderson, 2023 SCC 13

3 Gill Homes Inc. v. 5009796 Ontario Inc. (Kassar Homes) , 2024 ONCA 6

Keywords: Contracts, Breach, Interpretation, Real Property, Agreements of Purchase and Sale of Land, "Time of the Essence", Damages, Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2017 ONCA 29, Di Millo v. 2099232 Ontario Inc., 2018 ONCA 1051

Short Civil Decisions

The Rosseau Group Inc. v. 2528061 Ontario Inc. , 2024 ONCA 7

Keywords: Costs

CIVIL DECISIONS

York Condominium Corporation No. 221 v. Mazur , 2024 ONCA 5

[Roberts, Sossin and Dawe JJ.A.]

Counsel:

M. Molloy and J. Wright, for the respondent

S. Mazaheri, for the appellants

Keywords:Real Property, Condominiums, Oppression, Civil Procedure, Order, Enforcement, Writs of Possession, Condominium Act, 1998, S.O. 1998, c. 19, Kaiman v Graham, 2009 ONCA 77, Ontario Energy Savings LP v 767269 Ontario Ltd, 2008 ONCA 350

facts:

The appeal concerned a dispute between a condominium corporation (YCC 221) and the owners of a condominium unit relating to non-compliance with fire safety rules. The dispute culminated in an order granting the condominium corporation, the respondent, a writ of possession over the unit, along with the right to list and sell the unit. The court ordered that upon completion of the sale, the proceeds of the sale, less payment of all encumbrances on title, be paid into the court. Finally, the court ordered that the appellants must not purchase, lease, or reside in any other unit at YCC 221.

The motion judge determined further that the appellants had failed to demonstrate that they were capable of abiding by the safety rules which governed conduct at YCC 221, and that the failure was "serious and persistent and could have a tragic impact on their community." Given the long and continuous breach of a prior order (the "Koehnen J. Order"), the motion judge concluded that the forced sale of the Unit was justified in the unusual circumstances of the case. The appellants, who are the unit owners, appealed that order.

issues:

1. Did the motion judge err in law by failing to state and apply the relevant two-part test for oppression under the Condominium Act, 1998?
2. Did the motion judge err in law by failing to consider the relevant sections of the Act (ss. 17(3), 102, 117, 119, and 134) and case law that places the legal obligation on a condominium corporation, and not individual owners, to enforce its governing documents and take reasonable steps to enforce them?
3. Was it an error of law for the motion judge to suggest that the appellants had not made any efforts to comply with the Fire Code when the evidence suggested that "concerted effort" was made by the appellants?
4. Was there sufficient evidence for the Court to apply the required legal test and award the relief sought by the appellants, specifically relating to oppression and its associated remedies?

holding:

Appeal dismissed.

reasoning:

1), 2), & 4) No.

The respondent argued that the grounds of appeal had no merit, amounted to an attempt to relitigate the motion, and introduced new issues on appeal. The general rule was that appellate courts would not entertain entirely new issues on appeal. There was no basis to depart from that rule in this case. The motion judge's factual findings did not support the appellants' claim that they would have had grounds for obtaining a remedy under s. 135 of the Act, even if they had made a proper application. Rather, her reasons made it clear that the appellants repeatedly failed to comply with the Fire Inspection Order.

3) No.

The appellants focused on the motion judge's alleged errors in relation to findings of fact and the weighing of evidence. The motion judge found that the appellants had provided no valid explanation for non-compliance with the Koehnen J. Order. The appellants contended that the motion judge had affidavit evidence before her of "exceptional circumstances" to which she should have referred. The motion judge concluded that the appellants had failed to provide evidence of "exceptional circumstances" that could excuse their non-compliance. The appellants argued that the motion judge's approach was in error because it was "singularly focused" on serious allegations. The Court was not persuaded that the motion judge made any reversible errors. The only issue was whether the appellants were in breach of the Koehnen J. Order, and if so, what remedy was appropriate. The Court concluded that the motion judge's conclusions that the appellants failed to comply with clear court orders and that the orders issued were warranted were entitled to deference.

Martin v. Wright Medical Technology Canada Ltd., 2024 ONCA 1

[Lauwers, Hourigan and George JJ.A.]

Counsel:

J. P. Rochon, G. Nayerahmadi, M. B. McPhee, and N. J. Kelly, for the appellants/respondents by way of cross-appeal A. Chamberlain, T. Kinney, P. Marchand, and L. Chamberlain

P. J. Pliszka and R. Hung, for the respondent/appellant by way of cross-appeal Wright Medical Technology, Inc.

L. G. Theall and C. A. Jordaan, for the respondents MicroPort Medical B.V., MicroPort Scientific Corporation and MicroPort Orthopedics Inc.

Keywords:Torts, Negligent Manufacture, Civil Procedure, Class Proceedings, Statutory Interpretation, Class Proceedings Act, 1992, S.O. 1992, c. 6, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, David v. Loblaw Companies Ltd., 2022 ONCA 833, Bourque v. Insight Productions, 2022 ONSC 174, St. Louis v. Canadian National Railway Company, 2022 ONSC 2556, Lamarche v. Pacific Telescope Corp., 2022 ONSC 2553, LeBlanc et al. v. The Attorney General of Canada et al., 2022 ONSC 3257, Westgate v. WestJet Airlines Ltd., 2022 ONSC 4190, D'Haene v. BMW Canada Inc., 2022 ONSC 5973, A. (B.) v. University of Ottawa, 2023 ONSC 310, Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City), 2015 ONCA 572, Fresco v. Canadian Imperial Bank of Commerce, 2012 ONCA 444, Smith v. Inco Limited, 2011 ONCA 628

facts:

This appeal concerned a motion judge's order adding a discontinued cause of action and defendants to a class action operating under the old Class Proceedings Act, 1992 ("CPA"), and ordering that the action be governed by the amended Act. The motion judge also denied the appellants leave to add a party as a defendant in the action.

On February 27, 2014, SM (now deceased) and her spouse, JCD, started a class proceeding against the Wright respondents alleging negligent manufacturing of a prosthetic hip implant for resurfacing surgery, with Rochon Genova LLP as proposed class counsel. On September 24, 2014, GR started a class proceeding against the Wright respondents and named MicroPort alleging negligent manufacturing of a prosthetic hip implant for arthroplasty surgery, with Kim, Spencer, McPhee Barristers P.C. as proposed class counsel.

On October 1, 2020, amendments to the CPA came into force. Section 39 of the amended Act sets out the transition provisions for the move from the old Act to the amended Act. Essentially, the old Act continues to apply to cases started before October 1, 2020, and the amended Act applies to cases started after that date.

There were two provisions in the amended Act of particular importance to the underlying motion and this appeal. Section 29.1 of the amended Act provides for mandatory dismissal of actions for delay "unless, by the first anniversary of the day on which the proceeding was commenced," one of four steps has been taken. Class counsel in the SM action took an appropriate step before October 1, 2021, to avoid mandatory dismissal of the action under s. 29.1. As a result, the old Act continued to apply to the SM action. Because class counsel in the GR action did not do so, the GR action was exposed to mandatory dismissal for delay under s 29.1 of the amended Act.

The motion judge ordered that the amended SM action with the added GR causes of action and the GR defendants was to be governed by the amended Act. The motion judge dismissed the motion to add MicroPort Orthopedics Inc. as a defendant to the SM action as he would have reconstituted it.

issues:

1. Did the motion judge err in ordering that the amended SM action would be governed by the amended Act for all purposes, including a more onerous certification test?
2. Did the motion judge err in declining to add MicroPort Orthopedics Inc. as a defendant, based on the operation of the Limitations Act, 2002?

holding:

Appeal allowed. Cross-appeal allowed in part.

reasoning:

1. Yes.

The effect of the motion judge's order was to override s. 39 of the amended Act, which provides expressly that the old Act would continue to apply to class actions commenced before October 1, 2020 – such as the SM action. The motion judge noted, at para. 105, that "the transition provisions of the amended Act ... do not directly speak to the situation of what happens when an action to be governed by the older certification test is amended before the certification motion." He purported to find a gap in the legislation, which enabled him to make his ruling under s. 12 of the Act. He offered no explanation for this assertion and did not engage with the applicable principles of statutory interpretation.

The motion, and the appeal, turned on the interpretation of s. 39 of the amended Act, which distinguishes sharply between actions started under each of the old Act and the amended Act, how s. 39 relates to automatic dismissal for delay under s. 29.1, and whether s. 12 gives a motion judge the overriding authority he asserted.

The Governing Principles of Statutory Interpretation

The task of interpretation requires the court to consider the text of the legislation, the context within which it operates, and the particular purpose for the provisions at issue. The Court noted that this reflects the "modern approach" to interpretation, which "requires that the words of a statute be read 'in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament": Pointes Protection Association at para 6.

The statutory text

Section 39 is a transitional provision that specifies that the old Act continues to apply to cases started before October 1, 2020. The amended Act applies to cases started after that date. An exception to this rule is found in s. 39(2), which provides that actions started under the old Act are subject to mandatory dismissal for delay under s. 29.1 of the amended Act. Section 39(2) applied to both the SM and the GR actions, but only class counsel in the SM action met the s. 29.1 test and avoided mandatory dismissal. The motion judge correctly approved class counsel's motion for leave to discontinue the GR action as an alternative to dismissal and ordered costs payable to the defendants in that action.

Context and Purpose

Legislative history can inform the court's appreciation of the legislative intention in enacting the changes brought about by legislative amendments: Valilov, at paras. 167, 180, and 195. The legislative history showed that the amended Act followed upon the Law Commission of Ontario's Final Report ("the Report"). There were two significant differences between the Report and the amended Act. The first was that the amended Act stiffened the certification criteria even though the Commission had recommended against doing so. The amended section 5(1.1) moved Ontario class actions closer to the American certification rule, as commentators note: "As of October 1, 2020, the preferable procedure portion of Ontario's certification test has been made more rigorous and now largely reflects US Rule 23." Had the Legislature followed the Commission's advice and left the certification criteria as they were, there would have been no need for s. 39 as a transition provision to mitigate stricter certification requirements.

Principles Applied

The text, legislative history, and jurisprudence concerning s. 39 supported the inference that the Legislature intended there to be a bright line between actions started under the old Act and actions started under the amended Act. Under s. 39, the SMartin was to be governed by the certification criteria in the old Act. The plaintiffs in the GR action were entitled to "refile", following discontinuance of their action, but under the amended Act.

The Court also noted that the motion judge erred in using s. 12 of the amended Act to conjure up a gap needing to be filled. There was no gap in the amended Act. The consequences of the statutory changes for class actions started before and after October 1, 2020, were addressed by the Legislature and must be given full force and effect. Motion judges will be able to manage the application of different criteria in actions that are processed together because of similar causes of action and factually related evidence.

2. Yes.

There was no doubt that the reconstituted GR action could be brought, and it will be subject to the amended Act in all respects. It was the only vehicle by which MicroPort Orthopedics Inc. could be added as a defendant. Because of the broad basis on which the motion judge refused the joinder motion, it was necessary for the Court to address the limitations issue.

In the context of an appeal of a motion refusing certification, the Court in Fresco established that the issue of limitation periods was not an ingredient of the class members' claims, but instead may be relied upon by CIBC in its defence in that case. The question of how individual issues are best resolved is a procedural matter that would follow after the common issues trial": Fresco at para. 108. If the evidence does not establish that all class members were not aware of and ought not to have been aware of the material facts, then the application of the Limitations Act, 2002 to the claims is an individual and not a common issue: Smith at para 164.

The Court noted that reinforcing this approach is the difficult issue of discoverability in the context of a class action involving personal injuries. The Court stated that there were no ultimately dispositive facts before the motion judge on which he could have based such a sweeping ruling, particularly since the products at issue continued to be sold today. Therefore, there was no impediment to a reconstituted GR class action naming MicroPort Orthopedics Inc. as a defendant.

El Rassi-Wight v. Arnold , 2024 ONCA 2

[Roberts, Sossin and Dawe JJ.A.]

Counsel:

D. A. Thomson, for the appellant

D, Williams, for the respondent

Keywords: Family Law, Property, Domestic Contracts, Enforcement, Setting Aside, Family Law Act, R.S.O. 1990, c. F.3, s. 55(1), s. 56(4), Gallacher v. Friesen, 2014 ONCA 399, Virc v. Blair, 2014 ONCA 392, Anderson v. Anderson, 2023 SCC 13

facts:

In March 2019, appellant and the respondent, who were in a long-term relationship, bought a house together, with both holding title as joint tenants. On August 2, 2020, the parties signed a document, stating that the respondent agreed to transfer his interest in the house to the appellant in exchange for $10,000 and a motorcycle that belonged to the appellant's father ("the August 2 Document"). However, the respondent later refused to follow through with the terms of the agreement.

The appellant brought an application seeking a declaration that the August 2 Document was a valid and binding domestic contract, and an order that the respondent's share of the property be transferred to the appellant. In response, the respondent then brought his own application, seeking an order that the property be sold pursuant to s. 3(1) of the Partition Act, and other relief. The two applications were converted to an action and heard together. The main disputed issue between the parties was whether the August 2 Document was a binding domestic contract for the purposes of Part IV of the Family Law Act (the "FLA"). The trial judge found that it was not. The decision was appealed.

issues:

1. Was the failure to have the document signed by a third-party witness fatal to a finding that the document is a binding domestic contract, or was the video recording and acknowledgment by the respondent of having signed the document sufficient?
2. Did the trial judge fail to identify the proper test to determine whether compliance with the formalities in s. 55(1) could be dispensed with in the circumstances of the case?
3. Did the trial judge apply a test which had an unreasonably low threshold to preclude the relaxing of the formalities in s. 55(1)?
4. Did the trial judge err in concluding that the circumstances were oppressive and unfair so as to preclude the relaxing of the formalities in s. 55(1)?
5. Did the trial judge conclude, or give undue weight to an implicit finding, that the respondent signed the document under duress when the evidence did not justify such a conclusion?

holding:

Appeal dismissed.

reasoning:

1. No

The video recording made by the appellant confirmed the respondent's acknowledgement that he had signed the August 2 Document. However, the purpose of the formal requirements in s. 55(1) of the FLA is not just to "provide proof that [a document] was in fact signed by the parties", but also to "ensure a measure of formality in the execution of a domestic contract", and to "avoid 'kitchen table' agreements". The Court was not persuaded that the trial judge made any error in concluding that the video recording did not serve as a complete substitute for the document having been properly witnessed.

2. and 3. No

There was no real inconsistency between the Court's observation in Gallacher that one of the purposes of s. 55(1) of the FLA is "to ensure that [domestic contracts are] free from undue influence, coercion or duress", and the Court's later statement that "[t]he strict requirements of s. 55(1) may be relaxed where the court is satisfied that the contract was in fact executed by the parties, where the terms are reasonable and where there was no oppression or unfairness in the circumstances surrounding the negotiation and execution of the contract." The trial judge considered and applied the relevant factors in Gallacher to determine whether the formal requirements of s. 55(1) should be relaxed in a particular case.

Applying the same tests under s. 55(1) and s. 56(4) would unduly undermine the legislature's decision to require domestic contracts to ordinarily have at least some degree of formality, in part to underscore their importance and ensure that the parties who sign them take them seriously.

4. No

The Court was satisfied that the trial judge properly considered the factors identified in Gallacher. Unlike the situation in Gallacher, the trial judge found as a fact that neither party had received independent legal advice before signing the August 2 Document. She also found that the document was vague, and that the respondent had not understood some key terms. The trial judge also noted that the document left important questions unresolved, leading to the conclusion that the formalities of s. 55(1) of the FLA should not be relaxed in the circumstances. The Court was not persuaded that anything that was said in Anderson v. Anderson undermined the trial judge's analysis or conclusions.

5. No

There was no basis to interfere with the trial judge's alternative conclusion that even if the August 2 Document was a valid domestic contract, despite not having been prepared in accordance with s. 55(1) of the FLA, she would have set it aside pursuant to s. 56(4). In Ontario, s. 56(4) of the FLA permits courts to set aside domestic contracts on multiple bases, including when "a party did not understand the nature or consequences of the domestic contract" (s. 56(4)(b)). While a finding of duress might have entitled the trial judge to invoke s. 56(4)(c), which authorizes the setting aside of domestic contracts "otherwise in accordance with the law of contract", s. 56(4)(b) does not require a finding of duress.

The trial judge found as fact that the respondent did not understand precisely what he was giving up, noting that "[n]either party reviewed any of their financial records prior to signing the document", and finding further that the respondent, in particular, did not understand the meaning of the term "equity". These findings would have given the trial judge a sufficient basis to allow her to set aside the contract under s. 56(4)(b), had it been necessary for her to do so.

3 Gill Homes Inc. v. 5009796 Ontario Inc. (Kassar Homes) , 2024 ONCA 6

[Roberts, Sossin and Dawe JJ.A.]

Counsel:

D. Camenzuli and J.A. Cecchetto, for the appellant

C. Vegso, for the respondent

Keywords:Contracts, Breach, Interpretation, Real Property, Agreements of Purchase and Sale of Land, "Time of the Essence", Damages, Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2017 ONCA 29, Di Millo v. 2099232 Ontario Inc., 2018 ONCA 1051

facts:

This appeal concerned a dispute over a real estate transaction where the purchasing party missed the time stipulated for paying the funds to close the transaction by 35 minutes. On the basis of the breach, the vendor treated the contract between the parties as terminated. The application judge found in favour of the respondent vendor, 5009796 Ontario Inc. carrying on business as Kassar Homes ("Kassar Homes"). The unsuccessful purchaser, 3 Gill Homes Inc., appealed.

issues:

1. Did the application judge err in finding that 3:00 p.m. was the payment deadline under the APS?
2. Did the application judge err in finding that, in respect of the closing payment, time was of the essence?
3. Did the application judge err in finding that the payment deadline was not unconscionable?
4. Are the reasons of the application judge sufficient to permit appellate review?
5. Did the application judge err in finding that damages could not be fairly and justly determined on a written record?

holding:

Appeal dismissed.

reasoning:

1. No

While the outcome for the respondent was harsh, it was not unconscionable or unfair. The wording of the contract and the warnings provided by the respondent beforehand were clear. The standard of review was palpable and overriding error. The wording of article 14.02(d) of the APS meant that where electronic registration was mandatory, the funds due on closing had to be received by 3:00 p.m. on the closing date. It would be an unwarranted intervention into the freedom of contract for a court to alter the APS and its closing time.

2. No

A 'time is of the essence' clause is engaged where a time limit is stipulated in a contract. The phrase 'time is of the essence' means that a time limit in an agreement is essential such that breach of the time limit will permit the innocent party to terminate the contract.

The application judge found that the amending agreement to the APS dated November 15, 2021, changed the state of affairs and became a starting point from which the closing deadline was to be treated as firm. The exchanges between the parties in the days prior to the closing date all reflected what the application judge found to be a shared understanding that the closing date and time was to be enforced. Further, article 16.02 of the APS made clear that the default by the appellant in failing to deliver the funds owing by the closing time justified the respondent in treating the APS as terminated. The application judge's reliance on the "time is of the essence" clause in the APS revealed no error.

3. No

The application judge's conclusion with respect to the absence of unconscionability, in light of the previous transactions between the parties and their sophistication with respect to real estate transactions and APSs, was entitled to deference. There was no basis to interfere with the application judge's conclusions.

4. No

There was no basis for the assertion that the application judge's reasons did not permit appellate review. The application judge explained his findings by virtue of the governing case law, the APS, and the surrounding factual circumstances.

5. No

In light of the conclusion that the application judge did not err in finding in favour of the respondent on the merits of the application, it was not necessary to consider the appellant's ground of appeal in relation to the application judge's decision to refer the question of damages to a trial.

SHORT CIVIL DECISIONS

The Rosseau Group Inc. v. 2528061 Ontario Inc., 2024 ONCA 7

[Benotto, Trotter and Zarnett JJ.A.]

Counsel:

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

S. Schwartz and E. Quail, for the respondent

Keywords: Costs

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