Court Of Appeal Summaries (January 15 – 19, 2024) - Civil Law - Litigation, Mediation & Arbitration

In Di Filippo v. Bank of Nova Scotia, the plaintiffs sought to amend their pleadings to add new defendants and amend existing claims in the context of class actions against some of the biggest financial institutions in the world for alleged conspiracies to fix the price of gold and silver. The motion judge had dismissed the motion on the basis that the claims were statute-barred. The Court allowed the appeal, applying the test for discoverability set out in the Supreme Court's decision in Grant Thornton LLP.. Justice Huscroft dissented in respect of three of the banks that were added as defendants. He was of the view that the discoverability analysis was a question of mixed fact and law and was entitled to deference on appeal.

In Kikites v. York Condominium Corporation No. 382, the case involved a noise-related dispute between the appellant and the condominium corporation. The application judge found there had been no oppression by the condo corp. It had investigated reasonably and the results of the noise testing did not reveal any required action. The unit owner who had been the source of the noise was not a party to the application. On appeal, the appellant made a new argument for a compliance order against the non-party unit owner who was making the noise. The Court dismissed the appeal. The appellant could not introduce a new argument on appeal. Furthermore, the condominium corporation had limited authority over the interior of privately owned units and the unit holder who was making the noise would have to be a party before any significant renovation remedies could be ordered to eliminate the noise issues.

In the case of 9806881 Canada Corp. v. Swan, the appellants successfully appealed the application judge's decision, which had declared they did not have a possessory lien over the respondent's aircraft under the Repair and Storage Liens Act. The appellants were permitted to hold onto the aircraft pursuant to their lien rightsand the dispute was remitted to trial to determine whether the work that was the subject of the unpaid invoices was authorized.

In Greenpath Capital Partners Inc. v. 1903130 Ontario Ltd., the Court dismissed an appeal regarding a priority dispute between first and second mortgagees. The Court agreed with the motion judge who found that the pre-payment fees and default fees charged by the first mortgagees pursuant to a forbearance agreement were unenforceable as they breached the Interest Act and, in any event, did not have priority over the second mortgage, as the second mortgagee was not a party to the forbearance agreement.

In Urbancorp Inc., the appellant sought to appeal the dismissal of its summary judgment motion in a case involving the termination of a co-tenancy agreement for a condominium project. The court dismissed the motion, affirming the motion judge's findings that the parties operated at arm's length and there was no attempt to evade creditors.

In Jarvis v. Jarvis, the Court refused to stay the order for exclusive possession of the matrimonial home for the purpose of selling it pending appeal.

Civil Decisions

Urbancorp Inc. v. 994697 Ontario Inc., 2024 ONCA 26

Keywords: Bankruptcy and Insolvency, Reviewable Transactions, Fraudulent Conveyances, Preferences, Civil Procedure, Summary Judgment, Appeals, Leave to Appeal, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, S 95-96, Fraudulent Conveyances Act, R.S.O. 1990, c. F.29, Assignments and Preferences Act, R.S.O. 1990, c. A.33, Companies' Creditors Arrangement Act, R.S.C., 1985, c. C-36, Re Panfab Corp. Ltd., Duro Lam Limited v. Last et al., [1971] 2 O.R. 202 (H.C.J), Montor Business Corporation v. Goldfinger, 2016 ONCA 406, Urbancorp Inc. v. 994697 Ontario Inc., 2023 ONCA 126, Stelco Inc. (Re) (2005), 75 O.R. (3d) 5 (C.A.), Timminco Limited (Re), 2012 ONCA 552, Nortel Networks Corporation (Re), 2016 ONCA 332, Urbancorp Toronto Management (Re), 2022 ONCA 181

Jarvis v. Jarvis, 2024 ONCA 32

Keywords: Family Law, Matrimonial Home, Exclusive Possession, Sale, Civil Procedure, Appeals, Stay Pending Appeal, Family Law Act, R.S.O. 1990, c F.3, s. 23(b)(iii), Rules of Civil Procedure, r. 63.02, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Zafar v. Saiyid, 2017 ONCA 919

Di Filippo v. Bank of Nova Scotia, 2024 ONCA 33

Keywords: Torts, Conspiracy, Unfair Competition, Price-Fixing, Civil Procedure, Class Proceedings, Amending Pleadings, Limitation Periods, Discoverability, Class Proceedings Act, 1992, S.O. 1992, c. 6, s 6, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s 5(1), Competition Act, R.S.C. 1985, c C-34, Part VI, Rules of Civil Procedure, rr. 5.02(2), 5.04(2), 26.01, Polla v. Croatian Credit (Toronto) Union Limited, 2020 ONCA 818, Blueberry River First Nation v. Laird, 2020 BCCA 76, Strathan Corporation v. Khan, 2019 ONCA 418, Crombie Property Holdings Ltd. v. McColl-Frontenac Inc., 2017 ONCA 16, Fercan Developments Inc. v. Canada (Attorney General), 2021 ONCA 251, Kaynes v. BP p.l.c., 2021 ONCA 36, Grant Thornton LLP v. New Brunswick, 2021 SCC 31, Mancinelli v. Royal Bank of Canada, 2018 ONCA 544

Kikites v. York Condominium Corporation No. 382, 2024 ONCA 34

Keywords: Real Property, Condominiums, Remedies, Oppression, Compliance Orders, Condominium Act, 1998, S.O. 1998, c. 19, s. 134, 135, York Condominium Corporation No. 221 v. Mazur, 2024 ONCA 5, Mohamoud v. Carleton Condominium Corporation No. 25, 2021 ONCA 191, 716724 Canada Inc. v. Carleton Condominium Corporation No. 375, 2016 ONCA 650, R. v. G.F., 2021 SCC 20, 1346134 Ontario Ltd. v. Wright, 2023 ONCA 307, Farej v. Fellows, 2022 ONCA 254, leave to appeal refused, [2022] S.C.C.A. No. 180, Hague v. Hague, 2022 BCCA 325, Zaman v. Toronto Standard Condominium Corporation No. 1643, 2020 ONSC 1262, Dyke v. Metropolitan Toronto Condo Corp. No. 972, 2013 ONSC 463

9806881 Canada Corp. v. Swan, 2024 ONCA 35

Keywords: Contracts, Repair and Storage Liens, Possessory Liens, Repair and Storage Liens Act, R.S.O. 1990, c. R.25

Greenpath Capital Partners Inc. v. 1903130 Ontario Ltd., 2024 ONCA 42

Keywords: Contracts, Debtor-Creditor, Real Property, Mortgages, Priority, Interest, Legality, Pre-payment Fees, Default Fees, Interest Act, R.S.C. 1985, c. I-15, s.8, Mortgages Act, R.S.O. 1990, c. M.40, s.17, P.A.R.C.E.L. Inc. v. Acquaviva, 2015 ONCA 331, Reliant Capital Ltd. v. Silverdale Development Corp., 2006 BCCA 226, Krayzel Corp. v. Equitable Trust Co., 2016 SCC 18, We Care Funding Limited Partnership v. LDI Lakeside Developments Inc. et al, 2021 ONSC 7466

Short Civil Decisions

Rahman v. Ramnarine, 2024 ONCA 30

Keywords: Family Law, Divorce

2137073 Ontario Inc. v. Furney, 2024 ONCA 37

Keywords: Civil Procedure, Summary Judgment

The Governing Council of the Salvation Army in Canada v. Patient Ombudsman, 2024 ONCA 40

Keywords: Administrative Law, Health Law, Standard of Review, Reasonableness, Excellent Care for All Act, 2010, SO 2010, c 14, s 13.3(5), Nowegijick v The Queen, [1983] 1 SCR 29

Sanson v. Paterson, 2024 ONCA 44

Keywords: Costs.

CIVIL DECISIONS

Urbancorp Inc. v. 994697 Ontario Inc, 2024 ONCA 26

[Hourigan, Trotter and Copeland JJ.A.]

Counsel:

J. Sacks, for the moving party

C. E. Reed, for the responding parties

facts:

Downing Street Financial Inc. ("Downing Street") sought leave to appeal from an order dismissing its motion for summary judgment and granting the summary judgment motion of the responding parties to dismiss an action by Downing Street and other creditors. Downing Street was an assignee of a claim from Fuller Landau Group Inc., the Monitor appointed under the Companies' Creditors Arrangement Act ("CCAA") of the estates of Edge on Triangle Park Inc. ("Edge"), Bosvest Inc. ("Bosvest"), and Urbancorp Cumberland 2 LP. This motion arose out of the long-running CCAA proceedings of the Urbancorp group of companies.

Downing Street's claim related to a co-tenancy agreement involving a 19-story condominium project owned by Edge in trust for Bosvest and 994697 Ontario Inc. ("InvestorCo"). Bosvest was controlled by Urbancorp and held a two-thirds beneficial interest in the project. InvestorCo, a corporation owned by members of the Jacobs/Kaufman families, owned the remaining one-third beneficial interest. InvestorCo and Bosvest were equal shareholders of Edge.

The parties agreed to terminate the co-tenancy agreement and entered into an agreement which required InvestorCo to release its one-third interest in the project and its mortgage securing that interest. In exchange, InvestorCo received a 100% interest in 44 of the condominium units valued at the time at approximately $7 million. Two significant factors motivated Urbancorp to end the co-tenancy with InvestorCo: avoiding possible litigation with the Jacobs/Kaufman family; and a pending $65 million bond issue in Israel to refinance Urbancorp's operations. A short time after the bond issue closed, substantially all of the Urbancorp companies commenced insolvency proceedings. An order was granted in the CCAA proceedings in April 2018, which permitted the Monitor to commence claims and assign them to creditors.

As an assignee of the claims, Downing Street alleged that the co-tenancy termination transaction was: 1. void under s. 95(1)(b) of the Bankruptcy and Insolvency Act ("BIA"); 2. void under s. 96(1)(b)(i) of the BIA; and 3. a fraudulent preference under s. 96(1)(a) of the BIA and/or the Fraudulent Conveyances Act, and the Assignments and Preferences Act.

issues:

Was the test for granting leave to appeal met?
Did the motion judge commit an error in principle when finding that Edge was operating at arm's length with respect to the impugned transaction?
Did the motion judge commit an error in principle when finding that Edge was solvent at the time of the transfer?
Did the motion judge commit an error in principle when finding that the Jacobs/Kaufman family, as owners of Edge, were not attempting to evade creditors?

holding:

Motion dismissed.

reasoning:

The Court noted that the commencement of and assignment of the claims in this case were authorized by a CCAA judge and that order was "made under" the CCAA such that leave to appeal is required under the CCAA. Accordingly, the usual test for granting leave under the CCAA applied.

In determining whether leave should be granted, the Court considers whether: a. the proposed appeal is prima facie meritorious or frivolous; b. the points on the proposed appeal are of significance to the practice; c. the points on the proposed appeal are of significance to the action; and d. the proposed appeal will not unduly hinder the progress of the action: Stelco Inc. (Re) (2005) at para. 24. Leave to appeal is generally only granted sparingly and only where there are "serious and arguable grounds that are of real and significant interest to the parties": Stelco, at para. 24

The Court concluded that leave was not warranted in this case. The Court was not satisfied that the proposed appeal was prima facie meritorious, nor that it raised issues of significance to the insolvency practice. While the appeal may have been of significance to this action, standing alone, this factor was insufficient to warrant granting leave to appeal in this case: Nortel Networks Corporation (Re), at para. 95.

Section 4(5) of the BIA provides that persons who are "related" to each other are deemed not to deal with each other at arm's length. Section 4(2) also provides a definition of "related parties" which depends upon establishing the element of control. Given that the relevant definitions remain unchanged, the Court found no compelling reason to depart from the long-accepted view that deadlocked shareholders do not have de jure control of a corporation. As found by the motion judge, InvestorCo did not have de jure control of Edge.

Further, s. 4(4) of the BIA provides that "[i]t is a question of fact whether persons not related to one another were at a particular time dealing with each other at arm's length." Absent palpable and overriding error, the motion judge's finding is entitled to deference: Montor Business Corporation v. Goldfinger, at para. 66. Here, the motion judge was satisfied on his review of the record that Edge was operating at arm's length from InvestorCo. The Court saw no palpable and overriding error in his assessment.

Additionally, that factual underpinning meant that establishing "control" for the purposes of s. 95(1)(b) or s. 96(1)(b) of the BIA was dependent on the particular facts of each case. Accordingly, the legal issue as to whether Edge operated at arm's length was not one that necessarily transcended the interests of these particular parties to be of significance to the practice at large.

On the basis of the motion judge's factual finding that the parties operated at arm's length, the claims under ss. 95(1)(b) and 96(1)(b) of the BIA were properly dismissed, and it was not necessary for the motion judge to consider the insolvency aspect of the test under s. 95(1)(b).

It was reasonably open to the motion judge to conclude that Edge had not transferred the units with the intent to defraud, defeat, or delay creditors. He reviewed the relevant badges of fraud and found the evidence of fraud wanting. The Court concluded that there was no palpable and overriding error in his conclusions, and his finding on this point was also entitled to deference.

Jarvis v. Jarvis, 2024 ONCA 32

[Miller J.A. (Motions Judge)]

Counsel:

D.J, acting in person

S. C. Quinn and E. Kostandoff, for the respondent/responding party/moving party by way of cross-motion

facts:

The parties are spouses who have been separated since 2017. Post-separation, the moving party wife lived with the two children of the marriage in the matrimonial home. The responding party husband is the owner of the matrimonial home and has been renting accommodation nearby. The responding party claims that he has accumulated a crushing debt load, is in arrears on property taxes, and rent, and has maxed out his credit. The moving party does not accept that the responding party has any of the debt that he claims. She argues that if he is in debt, it is because he maintains a profligate lifestyle.

The responding party, by way of order, was granted exclusive possession to the matrimonial home in order to prepare for its sale, and was authorized to sell the matrimonial home without the consent of the moving party pursuant to s. 23(b)(iii) of the Family Law Act. The moving party sought a stay of that order pending appeal of that order. The responding party brought a cross-motion to dismiss the moving party's motion.

issues:

Should a Stay of the order granting the responding party exclusive possession of the house be granted?

holding:

Motion dismissed.

reasoning:

No.

The Court applied the test governing motions for a stay under r. 63.02 of the Rules of Civil Procedure from RJR-MacDonald Inc. v. Canada (Attorney General). The test requires a reviewing court to make three inquiries:

A preliminary assessment of the merits of the appeal, to determine whether the appeal raises a serious question;
A determination of whether the appellant would suffer irreparable harm if the order were refused;
A determination of which of the parties would suffer greater harm from granting or refusing the stay pending a decision on the merits of the appeal.

In considering the three inquiries above, the Court held that the moving party raised many grounds of appeal. Although the grounds were weak, they were not frivolous or vexatious, and the motion could not be disposed of on this ground alone.

The Court held that the harm faced in this case was not irreparable. Irreparable harm in this case involves the impact on both the moving party and the children of the marriage. The harm identified by the moving party is that in the immediate term she will be unable to secure rental accommodation in the immediate neighbourhood suitable for her and the two children. The Court held that there are rental properties available in the neighbourhood that would satisfy the needs of the children both to adequate housing and to enable them to maintain the benefit of friendships, schools, and extracurricular activities.

In conducting a balance of convenience, the Court noted that the stay undeniably casts a burden on the moving party. In all likelihood, the matrimonial home will be sold prior to either the appeal or the trial and she will have to find an alternative accommodation. The situation is ultimately not as burdensome as the moving party made it out to be. The order provided that the children can remain in the house with the responding party while the responding party readies it for sale. The order further provided that the date the responding party receives exclusion possession of the matrimonial home could be delayed, at the responding party's discretion, if the moving party agrees to temporarily vacate the property to allow the moving party access to the property to ready it for sale, including painting, repairs, and staging.

If the responding party does not sell the matrimonial home, he will not only lose his housing, but risks a sale of the matrimonial home by the mortgagee. This would be detrimental to the financial interests of both parties. Therefore, the Court held that the RJR-MacDonald Inc. v. Canada (Attorney General) test was not met, and a stay of the order was not warranted.

Di Filippo v. Bank of Nova Scotia, 2024 ONCA 33

[Feldman, Huscroft and Paciocco JJ.A.]

Counsel:

L. Sokolov and R. Mogerman, for the appellants

M. Eizenga, E. Davis, and S. Babwani, for the respondents JP Morgan Chase & Co., J.P. Morgan Bank Canada, J.P. Morgan Canada, and JP Morgan Chase Bank National Association

J. Fabello, J. Gotowiec, and C. Koopman, for the respondents Bank of America Corporation and Merrill Lynch Commodities Inc.

M. Milne-Smith and M. O'Sullivan, for the respondent Morgan Stanley Capital Group Inc.

K. Kay and Z. Smith, for the respondents UBS AG, UBS Bank (Canada), and UBS Securities LLP

M. Evans, A. Goodman, and T. Cesareo, for the respondents HSBC Bank Canada, HSBC Bank PLC, HSBC Holdings PLC, HSBC Securities (Canada) Inc., HSBC USA Inc., and HSBC Securities (USA) Inc.

I. Alame, for the respondents The Bank of Nova Scotia and Scotia Capital (USA) Inc.
E. Dillon and C. Naudie, for the respondents Barclays PLC, Barclays Bank PLC, Barclays Capital Canada Inc., Barclays Capital Inc., and Barclays Capital PLC

L. Jackson, for the respondent London Gold Market Fixing Ltd.

L. Thacker and J. Kras, for the respondents Société Générale, Société Générale (Canada), Société Générale SA, and SG Americas Securities, LLC

facts:

The plaintiffs/appellants moved to amend their pleadings in this class action brought against a number of financial institutions for conspiracy to fix the market and the trading prices of gold and silver over a period of years. The action claimed that the defendants used various illegal methods and practices to fix the prices, depriving the class of the actual value of their trades.

The amendments sought to add a number of financial institutions as defendants and to amend the claims against the existing defendants. The motion judge dismissed the motion in its entirety. He found that the proposed amendments constituted time-barred new claims, and in the case of one bank, while the claim was not time-barred, it could not be joined in the action because it did not arise out of the same transaction or occurrence.

The representative plaintiffs had commenced two class actions against a number of financial institutions that were involved in the international gold and silver trading markets as "market makers", for conspiracy to fix the prices of gold and silver respectively, and implementing the fixes in a number of ways, all to the detriment of the class. The action in respect of gold ("Gold action") was commenced on December 18, 2015, and the action in respect of silver ("Silver action") was commenced on April 15, 2016.

Prior to the motion to amend, the statements of claim had already been amended numerous times. The motions for certification were scheduled for October 2020, but then adjourned to allow the representative plaintiffs to seek further amendments, following the release of decisions in 2019 and 2020 by the U.S. regulatory body, the Commodity Futures Trading Commission ("CFTC"), which made findings and orders against two of the existing defendant institutions, UBS and HSBC, and against four other financial institutions, Bank of America, Merrill Lynch, JP Morgan, and Morgan Stanley.

issues:

Regarding UBS and HSBC, did the motion judge err in law by finding that the proposed claim for non-collusive spoofing constituted a new cause of action and was therefore time-barred?
Regarding Bank of America, Merrill Lynch and Morgan Stanley, did the motion judge err in law by finding that class counsel had "actual knowledge" of a claim for conspiracy to fix precious metals prices based on knowledge of pleadings in a U.S. action or of an investigation in another country?
Regarding JP Morgan, did the motion judge err in law by finding that it was not a proper party to the class proceedings and did not meet the joinder test under Rule 5 of the Rules of Civil Procedure because the CFTC Order of September 2020 found the bank guilty of intra-bank spoofing and not collusive spoofing?

holding:

Appeal allowed.

reasoning:

Yes.

The Court began by stating that the CFTC order dated January 29, 2018, against Deutsche Bank, UBS and HSBC was made more than two years before the motion to amend on October 30, 2020. Therefore, the proposed amendment was out of time if it sought to add a new claim, as defined in the Limitations Act, 2002.

The motion judge found that "...the proposed amendments (re non-collusive spoofing) are indisputably time-barred...they allege new facts re non-collusive, intra-bank spoofing and propose a new cause of action." Although the motion judge's reasons were very briefly stated, it was clear that he viewed non-collusive spoofing and collusive spoofing as giving rise to two different causes of action: spoofing and conspiracy to spoof. He also stated that new facts are alleged to support the non-collusive spoofing claim.

The Supreme Court clarified when a plaintiff discovers that they have a claim. It is when they have knowledge, either actual or constructive, "of the material facts upon which a plausible inference of liability on the defendant's part can be drawn": Grant Thornton LLP at para. 42. The plausible inference standard means that the plaintiff does not have to be certain that the known facts will give rise to legal liability, but the plaintiff must have knowledge of the material facts that form the basis for the plausible inference of legal liability

The Court noted that it is the pleading of the facts that is key. If a statement of claim pleaded all the necessary facts to ground a claim on more than one legal basis, and the original statement of claim only asserted one of the legal bases – that is, one cause of action based on those facts – the statement of claim could be amended more than two years after the claim was discovered to assert another legal basis for a remedy arising out of the same facts – that is, another cause of action. The Court explained that this is because it is only the discovery of the claim, as defined in the Limitations Act, 2002 and the case law, that is time-barred under s. 4, not the discovery of any particular legal basis for the proceeding.

Where a limitation period has run its course, allowing or disallowing the amendment depends upon whether the allegations of the proposed amendment arise out of the already pleaded facts, in which case the amendment will be allowed, but if they do not the amendment will be refused. An amendment of a statement of claim to assert an alternative theory of liability or an additional remedy based on facts that have already been pleaded in the statement of claim does not assert a new claim for the purposes of s. 4 of the Limitations Act, 2002. While the legal basis or cause of action for the original remedy that was sought against the defendants was conspiracy, particularized as both civil conspiracy and conspiracy pursuant to Part VI of the Competition Act, the pleadings alleged as facts that the conspiracy was carried out by the defendants. They fixed the prices of gold and silver on the trading markets over a lengthy period of time using a number of illegal techniques, including what the wrongdoers have called spoofing and painting the screen.

The motion judge erred in law by finding that the proposed amendments were statute-barred because they allege new facts and a new cause of action. The additional facts in the proposed amendments constituted evidence of the facts already pleaded or further details of those facts. Further, the proposed amendments, which included claims for damages for non-conspiratorial spoofing, constituted "an alternative theory of liability or an additional remedy based on facts that have already been pleaded". They had not pleaded a new claim under the Limitations Act, 2002.

Yes,

The motion judge had found that the proposed amendments seeking to add Bank of America, Merrill Lynch and Morgan Stanley as new parties to the action were statute-barred.

The broad test for discoverability is: "the material facts upon which a plausible inference of liability on the defendant's part can be drawn." To meet this standard, the plaintiff must have "actual or constructive knowledge that: (a) the injury loss or damage occurred; (b) the injury loss or damage was caused by or contributed to by an act or omission; and (c) the act or omission was that of the defendant.": at para. 43.

In assessing the plaintiff's state of knowledge, both direct and circumstantial evidence can be used. Moreover, a plaintiff will have constructive knowledge when the evidence shows that the plaintiff ought to have discovered the material facts by exercising reasonable diligence. Suspicion may trigger that exercise: Crombie at para 42. Suspicion may trigger the diligence obligation, but suspicion does not constitute actual knowledge. In Kaynes v. BP p.l.c., the Court held that knowledge of allegations in pleadings does not, without more, constitute actual knowledge of one's claim.

The motion judge erred by treating facts which might trigger a duty to investigate as material facts sufficient to trigger the limitation period – in his words, "the who and the what". The class plaintiffs in this case had actual knowledge that there was a conspiracy among a number of financial institutions to fix and manipulate the price of gold and silver on the trading markets. That was the "what." However, based on the allegations in the U.S. pleadings and in the press release of the Swiss Competition Commission ("WEKO") regarding its investigation, they only had suspicion of the "who". Both a statement of claim and a government investigation, by their very nature, express allegations, not facts.

Actual knowledge does not materialize when a party can make a "plausible inference of liability." Rather, actual knowledge materializes when a party has "the material facts upon which a plausible inference of liability on the defendant's part can be drawn". While class counsel may have had reason to suspect that Bank of America, Merrill Lynch and Morgan Stanley were part of the conspiracy, that suspicion was not actual knowledge. Because the U.S. pleadings and WEKO press release had not disclosed the necessary material facts, it was an error of law to find that the proposed amendments were statute-barred on the basis that class counsel had actual knowledge of the claims against Bank of America, Merrill Lynch and Morgan Stanley more than two years before the motion to amend was brought.

Section 5(1)(b) of the Limitations Act, 2002 sets out an alternative, objective basis for finding that a limitation period has commenced, based on when the plaintiff ought to have known the facts that form the basis for the claim and therefore had constructive knowledge of it. The motion judge in this case did not decide when the plaintiffs had constructive knowledge that they had a claim under s. 5(1)(b) because he agreed with the submissions of the defendants that the plaintiffs had actual knowledge of it.

The effect of s. 5(1)(b) is to impose an obligation of due diligence on those who have reason to suspect that they may have a claim, but who do not yet have actual knowledge of the material facts giving rise to that claim: Crombie, at para. 42. Where potential plaintiffs sit idle or fail to exercise due diligence, the limitation period will commence on the date that the claim would have been discoverable had reasonable investigatory steps been taken. In other words, it is the date when the potential plaintiffs have constructive, as opposed to actual knowledge of their claim: Grant Thornton, at para. 44. A court determining this issue will require evidence of how the material facts could reasonably have been obtained more than two years before the motion to add was brought: Mancinelli, at paras. 28, 31.

Yes.

The motion judge found that JP Morgan was not a proper party to the conspiracy actions because the evidence relied on by the class plaintiffs for amending the statements of claim to add JP Morgan as a party came only from the CFTC order that found extensive spoofing by JP Morgan traders over many years, but did not find that they did it as part of an inter-bank conspiracy.

The motion judge made a palpable and overriding error of fact by finding that the CFTC order found that none of the spoofing by JP Morgan was conspiratorial spoofing. In his review of the CFTC order dated September 29, 2020 against JP Morgan, the motion judge failed to consider a number of the findings that were made. From the size, extent and number of years that the spoofing scheme took place at JP Morgan, overlapping with the period when the other banks were allegedly conducting their conspiracy, and the fact that two JP Morgan traders pled guilty to spoofing and conspiracy to spoof, it cannot be said from the CFTC order and the other information about JP Morgan's involvement in the market manipulation through spoofing, that only intra-bank and not conspiratorial spoofing took place.

Because the proposed amendments to the statements of claim that alleged intra-bank spoofing conduct by each of the defendant banks was allowed, the Court noted that there was no legal basis to deny the amendment adding the defendant JP Morgan to the actions.

Huscroft J.A. (dissenting in part):

The motion judge's decision that the claims against Bank of America, Merrill Lynch, and Morgan Stanley are time barred was entitled to deference.

The motion judge was managing these proceedings for an extended period of time and was well familiar with the facts. His reasons were short but they did not preclude appellate review. The motion judge's finding that plaintiffs' counsel had actual knowledge of ongoing investigations and parallel U.S. legal proceedings commenced earlier was amply supported in the record.

Justice Huscroft did not accept that there was an extricable error that was subject to review for correctness. Whether a limitation period has expired prior to the commencement of an action is a question of mixed fact and law subject to review on a palpable and overriding error standard: Crombie at para 31. Determining when a claimant has obtained actual knowledge of a claim is case-specific: Albert Bloom Limited at para 31. Absent a palpable and overriding error or an extricable error of principle, the determination is entitled to deference: Fercan Developments Inc. at para 11.

The motion judge did not err in concluding that the record and inferences he drew from it were sufficient to satisfy the actual knowledge of material facts standard. In this case, the pleadings in the U.S. proceedings asserted facts and it was open to the motion judge to find that a plausible inference of liability for the Bank of America and Merrill Lynch could be drawn from them. Although the WEKO press release concerning Morgan Stanley was less detailed than the pleadings involving the Bank of America and Merrill Lynch, the appellants relied on that investigation in their statement of claim. Further, although the motion judge pointed to some documents as sufficient to show actual knowledge, there was general knowledge of the investigations and foreign proceedings that were underway – the motion judge referred to "widespread media reports and the publicly available information (easily accessible on Google or PACER) that would have been known to class counsel as far back as December 2016."

The Court concluded that it was open to the motion judge to find the appellants had actual knowledge of their claims against Bank of America, Merrill Lynch, and Morgan Stanley more than two years before they brought their motion to amend.

Kikites v. York Condominium Corporation No. 382, 2024 ONCA 34

[Gillese, Trotter and Coroza JJ.A.]

Counsel:

S. G. Lemke, E. Chapple, and A. Cheung, for the appellant

A. Sharabi and L. Clark, for the respondent

facts:

The appeal arose from a noise-related dispute between the appellant and York Condominium Corporation No. 382 (the "Corporation"). The appellant is a unit holder in a building of a unit directly below the unit occupied by Ms. C. and her twin children, a son and a daughter. According to the appellant, the noise emanating from Ms. C's unit was bothersome. The Corporation investigated over 200 noise complaints from the appellant and even offered to conduct a noise study, which the appellant declined initially. After four years, the complaints resumed in 2020. At the end of March 2021, the appellant retained counsel and noise testing commenced. The Corporation's testing found no significant sound events. The appellant commissioned a noise test between November 5 and 15, 2021 that reported significant intrusions.

The appellant brought an application in the Superior Court seeking various forms of relief under the Condominium Act, S.O. 1998, c. 19 (the "Act"), including $300,000 in damages. Importantly, Ms. C was not made a party to this application, even though she was examined as a non-party. The application was dismissed without a costs award.

issues:

Did the application judge fail to apply the relevant two-part test for the oppression remedy?
Did the application judge fail to consider the broad range of remedies available in s. 135(3) of the Act?
Did the application judge fail to consider other relevant provisions of the Act?
Did the application judge err in finding that he could not grant the remedy requested because Ms. C. was not a party to the proceedings?

holding:

Appeal dismissed.

reasoning:

The Court stated that the test for oppression is set out in Mohamoud v. Carleton Condominium Corporation, another case involving a condominium corporation's response to a noise complaint: "Under s. 135(2) of the Act, the court must determine whether the impugned conduct is, or threatens to be, oppressive or unfairly prejudicial to the applicant or unfairly disregards their interests. The test under s. 135(2) has two prongs. First, the court must assess whether there has been a breach to the claimant's reasonable expectations. If the answer is yes, the court must then go on to consider whether the conduct complained of amounts to oppression, unfair prejudice, or unfair disregard of the relevant interest."

In terms of the appellant's argument that the application judge failed to explicitly state and then apply the two-part test for oppression, the Court followed the direction of the Supreme Court of Canada in R. v. G.F: "A trial judge is under no obligation to expound on features of criminal law that are not controversial in the case before them." The approach is not restricted to the criminal law; it enjoys application in other realms of appellate review.

Although the application judge did not specifically refer to s. 135, when read as a whole, his reasons revealed an appreciation of the principles engaged by that provision. In reviewing the application judge's reasons where it is alleged that a condominium corporation has acted oppressively, the two steps of the oppression test may tend to merge. Although the noise complaint was the underlying factual premise of the application, the legal issue was what the appellant could reasonably have expected the Corporation to do about it.

The reasons of the application judge reflected that he considered these issues to be interrelated. The analysis of steps one and two of the test merged – the application judge found neither a breach of reasonable expectations nor conduct that was unfairly prejudicial or that unfairly disregarded the interests of the appellant. There was no basis for the application judge to intervene. The actions of the Corporation were well within the range of reasonable choices. It could not be said that the Corporation unfairly disregarded the appellant's interests in addressing this difficult situation.

Given that the application judge did not find that the test for oppression had been met, it was not strictly necessary to consider other remedies available to him under s. 135(3) of the Act. Nevertheless, this submission was without merit. The application judge was not required to consider alternative remedies that the applicant did not request.

Different counsel appearing at the appeal hearing attempted to take the case in a different direction. His focus was on the failure of the application judge to make a compliance order under s. 134 of the Act. The new submission essentially ignored all previously made oppression submissions and was focused on an alleged nuisance originating in Ms. C's unit.

The appellant could not be permitted to re-cast his application at such a late stage in the appellate process. The application was all about the steps, or lack of steps, taken by the Corporation in responding to the noise situation. The appellant made a litigation choice to focus these proceedings on the Corporation instead of on Ms. C. Although the appellant made some references to s. 134 in his Amended Notice of Application, and in his written submissions to the application judge, the application judge was not asked to undertake the analysis that the Court was asked to "review" on appeal. To allow the appellant to change direction would require the Court to engage in a fact-finding exercise, which is not the role of an appellate court. Moreover, permitting a new issue to be raised at this juncture ran counter to the interests of finality in litigation.

The appellant sought redress against the Corporation through the oppression remedy. Although Ms. C was examined as a non-party, she did not participate in the application. The trial judge thoroughly addressed the issue in his reasons: "The condominium corporation – the one and only Respondent before me – has done what it could and has not been oppressive in its conduct. It is not in a position, and cannot be expected, to either do internal renovations to another unit owner's unit. And given the conflicting sound engineering evidence and the fact that the noise is non-bothersome all day long, the Respondent is not in a position to compel another unit owner to renovate her unit. In any case, the Court certainly would not be in a position to order such a remedy without fulsome participation and legal submissions from that unit owner." There was no error in the application judge's approach.

9806881 Canada Corp. v. Swan, 2024 ONCA 35

[van Rensburg, Roberts and Favreau JJ.A.]

Counsel:

J. M. Wortzman and J. C. Wortzman, for the appellants

P. Virc and R. Karrass, for the respondent

Keywords: Contracts, Repair and Storage Liens, Possessory Liens, Repair and Storage Liens Act, R.S.O. 1990, c. R.25

facts:

The appellants appealed the application judge's order declaring that they did not have a possessory lien over the respondent's aircraft under the Repair and Storage Liens Act. The appellants asserted a possessory lien over the respondent's aircraft arising out of unpaid repairs. The respondent paid the appellants $1,066,097.16 for repairs to the respondent's aircraft. The dispute between the parties focused on the unpaid work outlined in the appellants' April 19, 2023 invoice, which was delivered following the commencement of the respondent's application.

issues:

Did the application judge err in vacating the lien given her direction that the parties could litigate whether there were any amounts owing to the appellants for repairs carried out on the respondent's aircraft?

holding:

Appeal allowed.

reasoning:

Yes.

The appellants claimed a possessory lien for unpaid repairs on the aircraft. Despite payments made by the respondent, a contention arose over the April 19, 2023, invoice for additional work. The appellants argued this work was authorized, while the respondent viewed it as outside the agreed scope or unauthorized. The application judge acknowledged additional work on the aircraft but found it unauthorized due to lack of written consent. The Court found that the application judge did not fully address the evidence suggesting the respondent's authorization of the additional work. Consequently, the Court concluded that the appellants had a possessory lien under the RSLA until further determination. The case was remitted to trial to address whether the work described in the April 19, 2023, invoice fell under the original agreements, whether it was authorized by the respondent, and the amounts, if any, owed to the appellants.

Greenpath Capital Partners Inc. v. 1903130 Ontario Ltd., 2024 ONCA 42

[Harvison Young, Thorburn and Favreau JJ.A.]

Counsel:

K. Sherkin, for the appellants

B. Rumble and J. Bonniere, for the respondent Greenpath Capital Partners Inc.

W. Jaskiewicz, for the respondents East Sovereign GP Inc. and Blake Andrew Wyatt

facts:

This case concerned the proceeds of sale of certain properties in Oakville sold under power of sale. The appellants held a first mortgage over the properties, which was owned by the respondent East Sovereign GP Inc. ("East Sovereign"). This first mortgage secured a principal sum of $7,182,000 for a one-year term commencing March 1, 2020.

The respondent Greenpath Capital Partners Inc. ("Greenpath") registered a second mortgage against the properties, securing a principal sum of $700,000 for the same term as the first mortgage.

East Sovereign fell into arrears on payments under the first mortgage well before the maturity date. East Sovereign, W (the principal of East Sovereign and guarantor of the first mortgage), the First Mortgagees, and Trilend (the mortgage broker) entered into a forbearance agreement (the "Forbearance Agreement") dated January 1, 2021. Greenpath was not a party to the Forbearance Agreement.

East Sovereign failed to satisfy the entire amount that it was required to pay under the Forbearance Agreement. The First Mortgagees commenced power of sale proceedings by Notice of Sale dated March 25, 2021, and the sale of the properties ultimately closed on August 24, 2021, for $9,000,000. Under the Notice of Sale, the First Mortgagees claimed a total of $7,588,191.38.

Following the sale of the properties, the First Mortgagees issued and served a discharge statement dated August 17, 2021 (the "Discharge Statement"). While the Notice of Sale set out the total amount due to the First Mortgagees as $7,588,191.38, the Discharge Statement claimed $7,983,687.04, which is $395,495.66 more than the amount set out in the Notice of Sale. This difference was largely made up of a pre-payment fee of $103,958.64 and a default fee in the amount of $179,550.00 that the First Mortgagees claimed under the Forbearance Agreement (the "Disputed Amounts").

The First Mortgagees paid out $522,278.81 to Greenpath to partially pay out the second mortgage around November 4, 2021. Before the application judge, Greenpath claimed that the First Mortgagees were not entitled to the Disputed Amounts and sought payment of the whole amount of $762,436.42 set out in Greenpath's discharge statement.

The First Mortgagees appealed from the application judge's order holding that they did not have priority over the Greenpath mortgage to collect certain disputed amounts ($283,508.64) from the proceeds of sale. They also appealed against the dismissal of their application to recover the disputed amounts from East Sovereign.

issues:

Did the application judge err in finding that the appellants had no priority over Greenpath with respect to the Disputed Amounts?
Did the application judge err in finding that the Disputed Amounts constituted a prohibited penalty pursuant to s. 8 of the Interest Act?

holding:

Appeal dismissed.

reasoning:

First, there was no error in the application judge's conclusion that the First Mortgagees could not claim priority with respect to the Disputed Amounts because Greenpath was not a party to the Forbearance Agreement and the Disputed Amounts did not properly arise from the first mortgage. The wording of the Standard Charge Terms of the first mortgage, and the relevant provision, clause 19, did not allow for increases in the principal balance or any other parts of the first mortgage, other than the rate of interest. On this basis, the applicant judge found that the Forbearance Agreement was not "subsumed" into the first mortgage and that it was a separate agreement that was not enforceable against Greenpath.

Second, the application judge properly rejected the argument that the $103,958.64 prepayment fee was a 3% lender fee to the broker, Trilend, which was already included in the first mortgage commitment. There was no evidence that the Forbearance Agreement was a renewal of the first mortgage, nor that the alleged renewal fee was an actual cost incurred by the First Mortgagees.

In any event, even if the Disputed Amounts properly fell under the first mortgage, they were an unlawful penalty contrary to s. 8 of the Interest Act and were thereby unenforceable against Greenpath as the second mortgagee, East Sovereign as the owner and mortgagor of the properties, and Wyatt as the guarantor of the first mortgage.

There was no error on the part of the application judge in the analysis and conclusion that the disputed fees effectively constituted prohibited interest charges under s. 8 of the Interest Act. Section 8 of in the Interest Act serves a protective purpose, as Parliament intended for mortgages on real estate to be treated differently than other loans.

The application judge found that the Disputed Amounts could not be recovered by the First Mortgagees from the proceeds of sale for two reasons.

First, in considering the default fee, the application judge dismissed the First Mortgagees' arguments that the parties contracted out of s. 8(1) and that s. 8(1) was consumer protection legislation that did not apply to the facts of the case. The wording of s. 8(1) was not narrow enough to exclude property holders like East Sovereign, and it was not open to the parties to contract out of this statutory public policy protection. East Sovereign was entitled to the protection of s. 8(1).

Second, as in P.A.R.C.E.L., the First Mortgagees did not discharge their onus of establishing the basis for the calculation of the $7,544,405 amount that was contained in both the Forbearance Agreement and the Discharge Statement. The application judge also noted that the Notice of Sale made specific reference to the Disputed Amounts. Moreover, though the evidence established that the Notice of Sale "wrongly broke out the amounts," the First Mortgagees did not provide a breakdown of how they should have been, or in fact were, broken out.

In P.A.R.C.E.L., at para. 96, the Court made it clear that the onus is on the mortgagee claiming the amounts following default to prove that they "reflect real costs legitimately incurred by the [mortgagee] for the recovery of the debt, in the form of actual administrative costs or otherwise".

In the absence of evidence that the charges in question reflect real costs legitimately incurred by the respondents for the recovery of the debt, in the form of actual administrative costs or otherwise, the only reason for the charges was to impose an additional penalty or fine, apart from the interest otherwise payable under the Mortgage, thereby increasing the burden on the appellants beyond the rate of interest agreed upon in the Mortgage. The courts have not hesitated to disallow similar charges on the basis that they offend s. 8 of the Interest Act.

On the issue of the prepayment fee, there was an absence of any evidence that the prepayment fee was an actual expenditure on the part of the First Mortgagees, or any requirement that the First Mortgagees pay the fee to Trilend. The prepayment fee represented an increase in the interest rate pertaining to monies in default, in excess of the interest rate payable upon monies not in default, contrary to s. 8 of the Interest Act.

The First Mortgagees' arguments with respect to the default fee were neither borne out by the evidence nor supported in law. Though the First Mortgagees argued that the fee corresponded to three months' interest in accordance with s. 17 of the Mortgages Act, the application judge found there was no evidence that the fee was calculated in accordance with s. 17, nor that the amount in the Forbearance Agreement included an amount arising from s. 17. The application judge also referred to the finding in We Care that, once a mortgagee undertakes enforcement proceedings, it can no longer collect a three-month interest bonus as doing so would constitute a penalty and therefore offend the Interest Act: at para. 71.

SHORT CIVIL DECISIONS

Rahman v. Ramnarine, 2024 ONCA 30

[Hourigan, Trotter and Copeland JJ.A.]

Counsel:

M.R., acting in person

No one appearing for the respondent

Keywords: Family Law, Divorce

2137073 Ontario Inc. v. Furney, 2024 ONCA 37

[Roberts, Coroza and Gomery JJ.A.]

Counsel:

D. Laframboise, for the appellants

D. Campoli, J. D. Sobel and A. Freedland, for the respondents

Keywords: Civil Procedure, Summary Judgment

The Governing Council of the Salvation Army in Canada v. Patient Ombudsman , 2024 ONCA 40

[Nordheimer, Copeland and Dawe JJ.A.]

Counsel:

E. Sunshine and E. Gardiner, for the appellant

M. Sampson and M. Bacal, for the respondents

Keywords: Administrative Law, Health Law, Standard of Review, Reasonableness, Excellent Care for All Act, 2010, SO 2010, c 14, s 13.3(5), Nowegijick v The Queen, [1983] 1 SCR 29

Sanson v. Paterson, 2024 ONCA 44

[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

Keywords: Costs

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Court Of Appeal Summaries (January 15 – 19, 2024)

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