Court Of Appeal Summaries (January 22 – 26, 2024) - Civil Law - Litigation, Mediation & Arbitration

In Peakhill Capital Inc. v. 1000093910 Ontario Inc., an insolvency case, the Court concluded that the Debtor had an automatic right of appeal from the motion judge's failure to consider its motion to enforce the original agreement of purchase and sale of land against the buyer instead of a less favourable one between the receiver and the same buyer. The appeal was expedited, as the automatic appeal stayed the order appealed from.

Metro 1 Development Corp. Ltd. v. Michael Garron Hospital was a commercial lease dispute where the tenants operating a Tim Hortons and Greek bakery at Michael Garron hospital unsuccessfully sought relief from forfeiture.

In Fowler v. Family and Children's Services of the Waterloo Region, allegations were made against the appellant, a foster parent, for sexual abuse. The appellant sued the FCS and two of its employees for breach of duty of care, breach of fiduciary duty of care, and defamation. The motion judge struck all these claims as disclosing no reasonable cause of action, but granted leave to amend the claim to plead misfeasance in public office. The Court dismissed the appeal.

Other topics included extension of time to appeal, the validity of POAs and an unsuccessful attempt to stay procedural orders vacating a trial date and permitting a motion for directions to proceed.

Civil Decisions

Fowler v. Family and Children's Services of the Waterloo Region, 2024 ONCA 41

Keywords: Family Law, Child Protection, Torts, Misfeasance in Public Office, Defamation, Breach of Statute, Breach of Fiduciary Duty, Breach of Contract, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Child and Family Services Act, RSO 1990, c C 11, s 15(6), General, RRO 1990, Reg 70, s 120, Rules of Civil Procedure, r 21.01(1)(b)(2)(b), Syl Apps Secure Treatment Centre v B.D., 2007 SCC 38, J.B. v Ontario (Child and Youth Services), 2020 ONCA 198, R. v Imperial Tobacco Canada Ltd., 2011 SCC 42, McCreight v Canada, 2013 ONCA 483, Kang v Sun Life Assurance Company of Canada, 2013 ONCA 118, Alberta v Elder Advocates of Alberta Society, 2011 SCC 24, Anns v. London Borough of Merton, [1977] 2 All E.R. 492 (H.L.); Cooper v Hobart, 2001 SCC 79.

Eddie v. Lepp, 2024 ONCA 55

Keywords: Civil Procedure, Appeals, Extension of Time, defamation, res judicata, Enbridge Gas Distribution Inc. v Froese, 2013 ONCA 131, Howard v Martin, 2014 ONCA 309

Avedian v. Enbridge Gas Distribution Inc., 2024 ONCA 53

Keywords: Civil Procedure, Appeals, Stay Pending Appeal, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s.193, Courts of Justice Act, R.S.O. 1990, c. C.43, s.6, Rules of Civil Procedure, r.63, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Circuit World Corp. v. Lesperance (1997) 33 O.R. (3d) 674 (C.A.), Haudenosaunee Development Institute v. Metrolinx, 2023 ONCA 122, M & M Homes Inc. v. 2088556 Ontario Inc., 2020 ONCA 134, Longley v. Canada (Attorney General), 2007 ONCA 149, Ducharme v. Hudson, 2021 ONCA 151, Halton (Regional Municipality) v. F. Greco & Sons Limited (Greco Construction), 2021 ONCA 446

Peakhill Capital Inc. v. 1000093910 Ontario Inc., 2024 ONCA 59

Keywords: Bankruptcy and Insolvency, Receiverships, Contracts, Real Property, Agreements of Purchase and Sale of Land, Enforceability, Civil Procedure, Appeals, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, ss.193, 195, Courts of Justice Act, R.S.O. 1990, c. C.43, s.101, Royal Bank of Canada v. Sound Air Corp (1991), 4 O.R. (3d) 1 (C.A.), Cardillo v. Medcap Real Estate Holdings Inc., 2023 ONCA 852, Re Harmon International Industries Inc., 2020 SKCA 95, Comfort Capital Inc. v. Yeretsian, 2023 ONCA 282, Hillmount Capital Inc. v. Pizale, 2021 ONCA 364

Metro 1 Development Corp. Ltd. v. Michael Garron Hospital, 2024 ONCA 60

Keywords: Contracts, Interpretation, Real Property, Commercial Leases, Remedies, Relief from Forfeiture, Commercial Tenancies Act, RSO 1990, c L 7, s 21, M.J.B. Enterprises Ltd. v Defence Construction (1951) Ltd., [1999] 1 SCR 619, Energy Fundamentals Group Inc. v Veresen, 2015 ONCA 514, Wastech Services Ltd. v Greater Vancouver Sewage and Drainage District, 2021 SCC 7

Metro Ontario Real Estate Limited v. Embee Properties Limited, 2024 ONCA 51

Keywords: Contracts, Real Property, Commercial Leases, Common Area, Easements, Wal-Mac Amusements Ltd. v. Jimmy's Dining & Sports Lounge, 1997 ABCA 183, Exchange Corporation Canada Inc. v. The Corporation of the City of Mississauga et al., 2012 ONSC 6221 (Div. Ct.), Re B.A. Oil Co. & Halpert, [1960] O.R. 71 (C.A.), Hodkin v. Bigley, [1999] 20 R.P.R. (3d) 9 (Ont. C.A.), Walgreen Co. v. American Nat. Bank & Trust Co. of Chicago, 281 N.E. 2nd 462 (Ill. App. Ct. 1972), Madigan Bros., Inc. v. Melrose Shopping Center Co., 463 N.E. 2nd 824 (Ill. App. Ct. 1984), Weidelich v. de Koning, 2014 ONCA 736

College of Physicians and Surgeons of Ontario v. Kilian, 2024 ONCA 52

Keywords: Civil, Professional Misconduct, Judicial Review, Regulatory Compliance, Judicial Review Procedure Act, RSO 1990, c J1, ss 1, 2, and 6(1), Regulated Health Professions Act, 1991, S.O. 1991, c. 18, Schedule 2, Health Professions Procedural Code, ss 75(1)(a), 76, 87, Sazant v College of Physicians and Surgeons of Ontario, 2012 ONCA 727, College of Physicians and Surgeons v Ravikovich, 2010 ONSC 5714, Kilian v CPSO, 2023 ONSC 5, Ontario College of Art v Ontario (Human Rights Commission) (1993), 11 OR (3d) 798 (Div Ct), Ravikovich v.College of Physicians and Surgeons, 2010 ONSC 5194 (Div Ct), Volochay v College of Massage Therapists of Ontario, 2012 ONCA 541, CB Powell Limited v Canada (Border Services Agency), 2010 FCA 61, College of Physicians and Surgeons v SJO, 2020 ONSC 1047, Pharmascience Inc v Binet, 2006 SCC 48, Zorilla v Quebec (Attorney General), 2005 SCC 16, Dioguardi Tax Law v The Law Society of Upper Canada, 2015 ONSC 3430, Cowper-Smith v Morgan, 2017 SCC 61, College of Physicians and Surgeons of Ontario v Kilian, 2023 ONCA 281

Vrantsidis v. Vrantsidis, 2024 ONCA 65

Keywords: Wills and Estates, Power of Attorneys, Civil Procedure, Costs, Substitute Decisions Act, 1992, S.O. 1992, c. 30, s. 3(2), Courts of Justice Act, R.S.O. 1990, c. C.43, s. 131, Childs v. Childs, 2017 ONCA 516

Buduchnist Credit Union Limited v. 2321197 Ontario Inc., 2024 ONCA 57

Keywords: Torts, Fraud, Contracts, Debtor-Creditor, Mortgages, Priority Dispute, Civil Procedure, Orders, Injunctions, Mareva Injunctions, Breach, Enforcement, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 140(5), Onion Lake Cree Nation v. Stick, 2020 SKCA 101, Housen v. Nikolaisen, 2002 SCC 33, Sabourin and Sun Group of Companies v. Laiken, 2013 ONCA 530, aff'd Carey v. Laiken, 2015 SCC 17, Aetna Financial Services Ltd. v. Feigelman, [1985] 1 S.C.R. 2, Halifax Plc. v. Chandler, [2001] EWCA Civ. 1750, Kepis & Pobe Financial Group Inc. v. Timis Corporation, 2018 BCCA 420, Equustek Solutions Inc. v. Jack, 2014 BCSC 1063, aff'd Equustek Solutions Inc. v. Google Inc., 2015 BCCA 265, aff'd Google Inc. v. Equustek Solutions Inc., 2017 SCC 34, Grenzservice Speditions Ges.m.b.h v. Jans (1995), 15 B.C.L.R. (3d) 370 (S.C.), Brewster Transport Co. v. Rocky Mountain Tours & Transport Co., [1931] S.C.R. 336, White v. E.B.F. Manufacturing Ltd., 2005 NSCA 103, Berlingieri v. DeSantis et al. (1980), 31 O.R. (2d) 1 (C.A.), Barclays Bank PLC v. Devonshire Trust, 2013 ONCA 494, leave to appeal refused, [2013] S.C.C.A. No. 374, McCallum et al. v. Zivojinovic (1977), 16 O.R. (2d) 721 (C.A.), City of Toronto v. Polai, [1970] 1 O.R. 483 (C.A.), aff'd [1973] S.C.R. 38, BMO Nesbitt Burns Inc. v. Wellington West Capital Inc. (2005), 77 O.R. (3d) 161 (C.A.), Trade Capital Finance Corp. v. Cook, 2017 ONSC 1857, United Nurses of Alberta v. Alberta (Attorney General), [1992] 1 S.C.R. 901, Paul Magder Furs Ltd. v. Ontario (Attorney General) (1991), 6 O.R. (3d) 188 (C.A.), leave to appeal refused, [1992] S.C.C.A. No. 92, Thrive Capital Management Ltd. v. Noble 1324, 2021 ONCA 722, Dickie v. Dickie (2006), 78 O.R. (3d) 1 (C.A.), First Majestic Silver Corp. v. Davila Santos, 2015 BCCA 452, Yao v. Li, 2012 BCCA 315, Australian Mortgage & Finance Company v. Rome Euro Windows Pty Ltd, [2014] NSWSC 996, Canadian Imperial Bank of Commerce v. Credit Valley Institute of Business and Technology, 2003 CanLII 12916 (Ont. S.C.), MG Corrosion Consultants Pty Ltd v. Gilmour, [2012] FCA 568, David A. Crerar, Mareva and Anton Piller Preservation Orders in Canada: A Practical Guide (Toronto: Irwin Law, 2017)

Borozny v. Wolfsohn, 2024 ONCA 58

Keywords: Real Property, Land Titles, Easements, Extinguishment, Remedies, Rectification of Register, Land Titles Act, R.S.O. 1990 c L.5, s 159, 160, Courts of Justice Act, R.S.O. 1990, c C.43, s 97, 100, Madigan Plaza Inc. v. Calgary Golf & Country Club, [2015] A.J. No. 457 (Q.B.)

Short Civil Decisions

Schroeder v. Co-operators General Insurance Company, 2024 ONCA 54

Keywords: Contracts, Insurance, Coverage, Motor Vehicle, Unidentified Motorist Coverage, Civil Procedure, Summary Judgment, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Schmitz v. Lombard General Insurance Company of Canada, 2014 ONCA 88

Oro-Medonte Property Owners' Association v. Oro-Medonte (Township), 2024 ONCA 49

Keywords: Municipal Law, By-laws, Land Use Planning, Public Utilities, Municipal Act, 2001, S.O. 2001, c. 25, s. 11(3)4, 391, Friends of Lansdowne Inc. v. Ottawa (City), 2012 ONCA 273

CIVIL DECISIONS

Fowler v. Family and Children's Services of the Waterloo Region, 2024 ONCA 41

[Gillese, Trotter and Coroza JJ.A.]

Counsel:

R. Colautti and A. Elkeeb, for the appellants

J. Dakin and R. Chawla, for the respondents

Keywords:

Family Law, Child Protection, Torts, Misfeasance in Public Office, Defamation, Breach of Statute, Breach of Fiduciary Duty, Breach of Contract, Civil Procedure, Striking Pleadings, No Reasonable Cause of Action, Child and Family Services Act, RSO 1990, c C 11, s 15(6), General, RRO 1990, Reg 70, s 120, Rules of Civil Procedure, r 21.01(1)(b)(2)(b), Syl Apps Secure Treatment Centre v B.D., 2007 SCC 38, J.B. v Ontario (Child and Youth Services), 2020 ONCA 198, R. v Imperial Tobacco Canada Ltd., 2011 SCC 42, McCreight v Canada, 2013 ONCA 483, Kang v Sun Life Assurance Company of Canada, 2013 ONCA 118, Alberta v Elder Advocates of Alberta Society, 2011 SCC 24, Anns v. London Borough of Merton, [1977] 2 All E.R. 492 (H.L.); Cooper v Hobart, 2001 SCC 79.

facts:

The appellant, CF, was a foster parent. Family and Child Services of the Waterloo Region ("FCS") placed a child in his care. That child later made allegations of sexual abuse which FCS investigated.

CF and his daughters sued FCS and two of its employees for breach of statutory duty, "breach of duty of care", breach of fiduciary duty, and defamation.

The respondents brought a motion under r. 21.01(1)(b) of the Rules of Civil Procedure, to strike the appellants' pleading for failing to disclose a reasonable cause of action. The motion judge granted the respondents' motion because, in her view, it failed to disclose a reasonable cause of action. However, she granted the appellants leave to file a fresh as amended statement of claim based on the tort of misfeasance in public office.

In their statement of claim the appellants impugned the quality of the FCS' investigation in response to the allegations of sexual abuse and alleged it and its employees acted with improper motives. The motion judge noted that the appellants' statement of claim was limited, vague, and confusing. She observed that, although the pleading included many conclusory assertions of misconduct by FCS and its employees, it lacked particulars and material facts.

The motion judge outlined the test on a r. 21.01(1)(b) motion. She assumed that the facts pleaded in the statement of claim were true and asked whether the pleading disclosed a reasonable cause of action. As a preliminary matter, the motion judge considered an affidavit proffered by the appellants, which attested to and appended written service agreements between CF and FCS. Regarding the claims against FCS, the motion judge considered the Supreme Court's decision in Syl Apps to be a complete bar to the appellants' case. The appellants argued that Syl Apps only held that child welfare agencies do not owe a duty of care to biological parents. But the motion judge relied on the Court's decision in J.B. for the proposition that Syl Apps ruled out a duty of care, either in negligence or a fiduciary duty, to any party other than the child.

issues:

Did the motion judge err in refusing to admit or consider the affidavit evidence setting out the terms and conditions of the foster care agreement between CF and FCS?
Did the motion judge err in holding that there was no cause of action in negligence, breach of fiduciary duty, or breach of contract under r. 21.01(1)(b)?
Did the motion judge err in applying s. 15(6) of the Child and Family Services Act ("CFSA"), to bar the appellants' action against the individual respondents?

holding:

Appeal dismissed.

reasoning:

Evidence is not admissible on a r. 21.01(1)(b) motion. The appellants argued that the motion judge erred because the statement of claim asserted that CF was a foster parent for FCS, and foster families are required to enter into written agreements with their agencies under regulation. Consequently, in their submission, the written agreements formed part of the pleadings.

The Court dismissed this ground of appeal. The leading decision of the Court on when documents can be considered on a r. 21.01(1)(b) motion is McCreight. In short, a motion judge can consider a document that is "incorporated by reference into the pleading and that forms an integral part of the plaintiff's claim".

As the motion judge noted, the written agreements could not be viewed as having been pleaded in the statement of claim – they were not integral to the factual matrix of the appellants' statement of claim. She observed that CF did not plead the existence, terms, or breach of any terms of the agreements. Nor did the statement of claim plead that the appellants made any acts or omissions because of any such agreements. The motion judge was accordingly correct in holding the written agreements to be inadmissible.

A r. 21.01(1)(b) motion to strike may be granted where the pleading discloses no reasonable cause of action. A generous approach should be employed to assessing the pleading. The appellants argued that the motion judge erred in law by determining that it was plain and obvious that their claims in negligence, breach of fiduciary duty, and breach of contract were not tenable. The standard of review on an appeal of a r. 21.01(1)(b) motion is correctness.

The motion judge held that recognizing a duty of care in negligence or a fiduciary relationship between the parties would put FCS directly into conflict with its paramount duty to act in the best interests of the child. She found that it was well-settled law that child protection agencies like FCS do not owe duties to third parties in exercising their mandate under the CFSA. The Court agreed with the motion judge.

Given the binding authority of Syl Apps and J.B., The pleading disclosed no reasonable cause of action in negligence or for breach of fiduciary duty. In Syl Apps, the plaintiffs were biological family members of a child who was placed into a foster home and, later, under a wardship with the Halton Children's Aid Society. The Society was concerned that the child was being abused by her parents, which the parents vociferously denied. For a unanimous court, Abella J. conducted an "Anns/Cooper" analysis to determine whether a novel duty of care in negligence existed between the parties. Abella J. held that it was plain and obvious that no such duty existed.

The appellants attempted to distinguish this case from Syl Apps on the basis that Abella J. did not specifically opine on a duty to foster families.

In J.B., the plaintiffs were again family members of children in the foster system. They alleged that various child welfare agencies conducted negligent investigations of alcohol and drug abuse and then used the flawed results of those investigations in criminal and child protection proceedings. J.B. is clear and categorical. It is plain and obvious that children's aid societies do not owe a duty of care in negligence to any third party, because the existence of such a duty could conflict with their transcendent, statutory duty to act only in the best interests of the children under their care.

In addition to claiming a duty of care in negligence, the appellants also suggest that FCS owed them a fiduciary duty. As the motion judge noted, any fiduciary duty that would require FCS to weigh competing interests would be improper. The Court agreed with the motion judge that there was no reasonable cause of action based on a claim for breach of fiduciary duty in this case.

Lastly, the appellants argued that this case was materially different from Syl Apps and J.B., because unlike in those cases, there was a principal-agency relationship in this case. According to the appellants, this relationship arose from contract and from the CFSA and its regulations. The Court disagreed. First, the motion judge was correct in finding that the service agreements were inadmissible on the motion because the pleading made no reference to a contractual relationship between the parties. Furthermore, regarding the supposed statutory and regulatory basis for an agency-principal relationship that would give rise to a duty of care in negligence and a fiduciary duty, the motion judge rejected this argument because of Syl Apps. The Court agreed with the motion judge and adopted her analysis. To the extent that there may be statutory obligations towards foster parents under the CFSA, those obligations could not conflict with the paramount purpose of the Act, "to promote the best interests, protection and well being of children."

Finally, the appellants asked the Court to restore their purported claim for breach of contract. However, as the motion judge noted, the statement of claim did not allege a claim for breach of contract or seek a remedy based thereon. This court cannot restore a cause of action that was never in the statement of claim to begin with.

The appellants argued that FCS employees were personally liable for their bad faith acts. In response, the respondents argued that the employees were protected from civil liability under s. 15(6) of the CFSA.

The motion judge accepted that s. 15(6) does not provide statutory immunity to child protection workers regardless of the nature of their alleged conduct. However, in this case, the statement of claim was struck because it did not plead any specific instances of bad faith conduct. The motion judge held that the bald allegations of bad faith were insufficient to surmount the statutory protection provided by s. 15(6). The Court agreed.

The motion judge granted leave to issue a fresh as amended statement of claim to plead a cause of action that properly makes out the tort of misfeasance in public office. This would potentially resurrect the question of whether the employee respondents benefit from s. 15(6).

Eddie v. Lepp, 2024 ONCA 55

[Gillese J.A. (Motions Judge)]

Counsel:

R.L., acting in person

G. L. Adrian, for the respondent/responding party

C. Painter, for The Corporation of the Town of Aurora

Keywords: Civil Procedure, Appeals, Extension of Time, Defamation, res judicata, Enbridge Gas Distribution Inc. v Froese, 2013 ONCA 131, Howard v Martin, 2014 ONCA 309

facts:

M.E. sued R.L. for defamation by Statement of Claim issued on November 9, 2018.

R.L. brought a motion for summary judgment to dismiss the action, and M.E. brought a motion for summary judgment granting the relief she sought. The motion judge, Justice Pollak, dismissed R.L.'s motion and granted M.E.'s cross-motion (the "Order").

The motion judge accepted M.E.'s uncontradicted and unchallenged evidence. She held that numerous of R.L.'s blog posts and emails contained defamatory statements that were either false or substantially misleading. She accepted M.E.'s evidence that, as a result of the defamatory statements, she lost her employment and was unable to find alternate employment.

More than a year had passed since the motion judge released her reasons for decision on the motions. R.L. moved for an extension of time to file a Notice of Appeal from the Order.

It was important to note that R.L. had commenced his own lawsuit relating to the underlying matters in issue. He claimed against the Town of Aurora, the Regional Municipality of York, the York Regional Police Services Board, the York Regional Police, M.E., and two other individuals (the "Second Action"). Regional Senior Justice Edwards dismissed the Second Action as against M.E. He held that the claims against M.E. in the Second Action were res judicata as a result of the Order. R.L. then brought a motion to have the Order stayed. Justice Centa dismissed the stay motion. The trial for the Second Action against the other defendants to that action proceeded for nine days from November 28, 2023, to December 8, 2023, and was due to resume on January 24, 2024. Counsel for the Town of Aurora signaled that there might be issues with the scope of R.L's cross-examination of M.E., given the decisions of Pollak J., and Edwards R.S.J. Justice Leibovich concluded that R.L. could not question M.E. on various issues related to the previous decisions, but he could "ask other relevant questions as long as they are not an attempt to prove M.E. is corrupt, a liar, lied to the police or otherwise relitigate or collaterally attack the findings of Justice Pollak."

issue:

Should R.L. be granted an extension of time to file a Notice of Appeal from the Order?

holding:

Motion dismissed.

reasoning:

No.

The test on a motion to extend time for filing a notice of appeal is well-settled. The overarching principle is whether the "justice of the case" requires that an extension be given. Each case depends on its own circumstances, but the Court is to take into account all relevant considerations, including:

whether the moving party formed a bona fide intention to appeal within the relevant period;
the length of, and explanation for, the delay in filing;
any prejudice to the responding party that is caused, perpetuated or exacerbated by the delay; and
the merits of the proposed appeal.

In the Court's view, the justice of the case required that the motion be dismissed. The Court did not accept that R.L. formed a bona fide intention to appeal within the relevant period, nor was it satisfied by his explanation for the delay in filing. By his own admission, R.L. decided he would not file an appeal against the Order within the relevant time period prescribed by the Rules because he wanted to focus his time and attention on the Second Action. He said that he chose to not file a notice of appeal because he hoped to gain evidence in the Second Action that he could use in an appeal of the Order. On this Motion, he said that some testimony given in the Second Action was what he needed as evidence in an appeal from the Order and, having gotten that, he now wanted to proceed with an appeal of the Order. This was not an acceptable explanation for the delay.

Furthermore, the Court saw no merit to the proposed appeal. The proposed grounds were largely challenges to the factual findings of Pollak J. or exercises of her discretion. Both were discretionary matters to be afforded significant deference on appeal.

Further, and importantly, apart entirely from the prejudice that the delay would cause M.E., in the Court's view, granting R.L. an extension of time to file a Notice of Appeal would harm the administration of justice. It was virtually inevitable that if the motion was granted, it would result in a mistrial of the Second Action. It would fundamentally change the basis on which the Second Action has proceeded, namely, Pollak J.'s decisions and the Order.

Avedian v. Enbridge Gas Distribution Inc., 2024 ONCA 53

[Simmons J.A. (Motion Judge)]

Counsel:

C. Carter and J. Pierre Bouchard, for the moving parties

C. K. Boggs, for the respondents Alpha Delta Hearing Contractor Inc. and ALD, and as agent for counsel for the respondents Enbridge Gas Distribution Inc. operating as Enbridge Gas Distribution and Lakeside Performance Gas Services Ltd. operating as Lakeside Gas Services

D. Reiter, for the respondent Enbridge Solutions Inc.

C. Morrison, for the respondents BB and TQB Heating and Air Conditioning

facts:

The moving parties' action arose out of a gas explosion that occurred in 2010. The action was set down for trial in 2017 and was originally scheduled to proceed to trial in February 2020. However, it was adjourned to permit a motion for partial summary judgment to proceed.

On an earlier appeal as of right to the Court from the partial summary judgment decision, the Court held that the trial should not have been adjourned in light of the "Consolidated Practice Direction for Civil Actions ... in the Toronto Region" in force at the time. The Practice Direction provided that "[o]nce trial dates are set, there will be no adjournments of the trial except in extenuating and exceptional circumstances." The Court found that there were no extenuating or exceptional circumstances to justify adjourning the trial and permitting the motion for summary judgment to proceed, and also found that the motion judge erred in finding there was no genuine issue requiring a trial. The Court ordered that the matter be set down for trial on an expedited basis.

Following the Court's decision on the prior appeal, a case management/trial judge was appointed on consent of the parties.

The case management/trial judge set aside a pre-trial date and vacated a trial date to allow a motion for directions brought by the responding parties to proceed prior to trial (the (Orders").

On this motion to the Court, the moving parties sought an order staying the Orders of the case management/trial judge pending determination of their motion for leave to appeal the Orders and, if leave is granted, pending their appeal. As the Orders are interlocutory, the appeal route was to the Divisional Court with leave. The moving parties' motion for leave to appeal to the Divisional Court was denied by a panel of the Divisional Court on December 8, 2023. As is customary, no reasons were given for denying leave.

On December 20, 2023, the moving parties sought leave to appeal to the Court from the decision of the Divisional Court denying leave. Among other things, the moving parties contended that the responding parties' motion for directions was actually a motion for partial summary judgment or to strike claims disguised as a motion for directions, and that the pretrial and trial dates should not have been vacated to allow it to proceed..

issue:

Should the Orders be stayed?

holding:

Motion dismissed.

reasoning:

No.

The Court denied the moving parties' request for a stay of the Orders. Assuming, without deciding, that the moving parties could seek a stay of the Orders which underly the Divisional Court decision, the moving parties did not meet any of the prongs of the RJR-MacDonald test for a stay.

It was not in the interests of justice that a stay be granted pending determination of a motion for leave to appeal that the Court concluded was bound to fail.

The moving parties did not demonstrate that they would suffer irreparable harm if a stay was not granted. The trial date that was vacated has come and gone. As for the responding parties' motion for directions, the moving parties will only suffer harm if the judge who hears the motion makes a reviewable error. If that occurs, the error can be corrected on appeal.

The moving parties did not demonstrate that the balance of convenience favoured granting a stay. If a stay was granted, the action would be delayed by at least the amount of time involved in hearing the leave motion. If no stay was granted, the motion for directions would go forward and the moving parties would suffer harm through further delay only if the judge who hears it makes some reviewable error. That contingency did not top the balance of convenience in a favour of a stay.

Peakhill Capital Inc. v. 1000093910 Ontario Inc., 2024 ONCA 59

[Simmons J.A. (Motion Judge)]

Counsel:

G.M. Caplan and A. Simovonian, for the moving party

R. Swan and A. Nelms, for the Receiver, KSV Restructuring Inc., and for the responding party

facts:

On September 13, 2023, KSV Restructuring Inc. (the "Receiver") was appointed on consent as Receiver over the Debtor and all of its assets under s. 243(1) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 ("BIA") and s. 101 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The receivership order was obtained by Peakhill Capital Inc., which holds a first mortgage over a Property in the principal amount of $19,000,000. Peakhill's first mortgage matured on May 1, 2023. In accordance with the terms of the consent, the receivership order became effective on October 2, 2023, after the Debtor failed to pay certain sums specified in the consent.

The receivership order specified that the Receiver may cease to perform any contracts of the Debtor and also stated that no Person shall repudiate or terminate a contract held by the Debtor without written consent of the Receiver or leave of the Court.

On September 7, 2023, prior to the receivership order being made but with notice of the receivership proceeding, the Debtor entered into an unconditional agreement of purchase and sale (the "original APS") to sell the Property to 2557904 Ontario Inc. ("255") for $31,000,000. Upon execution of the original APS, 255 paid a deposit of $1,000,000 to the Debtor's real estate agent. The closing date under the original APS was December 21, 2023.

According to the Debtor, a sale of the Property under the original APS would yield sufficient funds to pay all of the Debtor's creditors, including Peakhill, a second mortgage on the Property in the principal amount of $8,000,000, and outstanding property taxes owing to the City of Vaughan in the approximate amount of $162,786.

After the receivership order was made, the Receiver had discussions with 255 concerning amending the original APS to include terms the Receiver considered necessary to implement a receivership sale, including substituting the Receiver as the vendor and allowing for a vesting order of the Property to complete the transaction.

After being informed that 255 was not willing to amend the original APS, on November 13, 2023, the Receiver entered into a stalking horse agreement (the "Stalking Horse APS") with 255 to establish a minimum sale price of $24,255,000 as part of a proposed auction sale process for the Property. Under the terms of the Stalking Horse APS, 255 agreed to purchase the Property in the absence of a superior bid. The Stalking Horse APS included a break fee of $200,000 in the event 255 was not the successful bidder as well as provision for an expense reimbursement of up to $50,000 to 255 if that occurred.

Around the same time, the Debtor's counsel informed the Receiver's counsel that the Debtor wished the Receiver to enforce the original APS. However, the Receiver's counsel informed the Debtor's counsel that the Receiver could not close the original APS without 255's consent and that the Debtor's proposal that the Receiver should seek to enforce the original APS was not tenable. Nonetheless, the Receiver's counsel suggested that the Debtor could bring a motion to seek to close the original APS if it thought that appropriate.

At some point, the Receiver's counsel reserved time for a motion on December 20, 2023, to seek approval of Bidding Procedures to allow the Receiver to sell the Property under the Stalking Horse APS. On December 6, 2023, the Debtor's counsel informed the Receiver's counsel that it would require time on December 20, 2023, to either seek the discharge of the Receiver or vary the receivership order to allow the Debtor to complete the original APS.

On December 19, 2023, just before 4 p.m., the Debtor served a cross-motion returnable on December 20, 2023, requesting amendments to the receivership order to approve the original APS and directing the receiver to permit it to complete the original APS.

On December 20, 2023, the motion judge abridged the time for service of the Receiver's motion and approved the Bidding Procedures and Stalking Horse APS proposed by the Receiver. The Order included a term specifying that nothing in it approved the sale of the Property to 255 under the Stalking Horse APS and that approval of such a sale would be considered on a subsequent motion following completion of the sale process under the Bidding Procedures if 255 was the successful bidder.

In her December 20, 2023 reasons, the motion judge declined to hear the Debtor's cross-motion for several reasons.

issue:

Did the Debtor have an automatic right to appeal the motion judge's failure to consider the Debtor's cross-motion to enforce the original APS?

holding:

Motion granted.

reasoning:

Yes.

The Debtor had an automatic right of appeal and did not need leave. The motion judge's decision not to entertain the Debtor's cross-motion (the "refusal decision"), had the effect of putting in play, and jeopardizing, the value of property by an amount exceeding $10,000 (by almost $7 million), the minimum threshold amount that must ben at issue for appeals to be brought under the BIA.

Although the Receiver was correct in stating that because of the receivership order, the Debtor lacked the ability to complete the APS, the Receiver effectively acknowledged in its dealings with the Debtor and the Debtor's counsel leading up to the December 20, 2023 motion date that the original APS had not been terminated. Further, the Receiver had at least acknowledged, if not suggested, that the Debtor could bring a motion to seek to close the original APS, if the Debtor thought that appropriate, and had reserved its rights concerning the position it would take on such a motion.

On its face, the original APS was an unconditional agreement of purchase and sale with a purchase price of $31,000,000. No basis was advanced to support 255's claim on December 20, 2023 that the original APS was null and void. The Receiver had not terminated the original APS. Nor did the motion judge accede to the Receiver's request that she do so. The Order did not address the original APS. By declining to hear the Debtor's cross-motion, the refusal decision deprived the Debtor of any ability to complete or enforce the original APS, a prospect the Receiver appeared to have acknowledged could occur.

The Court concluded that the Debtor was not required to seek leave to appeal under s. 193(e) of the BIA and that its notice of appeal was validly served. As the appeal and automatic stay will hinder the progress of an ongoing receivership proceeding under the BIA, the Court directed that the appeal be expedited.

Metro 1 Development Corp. Ltd. v. Michael Garron Hospital, 2024 ONCA 60

[MacPherson, Miller and Paciocco JJ.A.]

Counsel:

G. M. Caplan and A. Simovonian, for the appellants

A. Melfi, for the respondent

facts:

Commencing on December 20, 2012, in a 15-year commercial lease, Metro 1 Development Corporation Ltd. ("Metro 1"), rented two areas at the Michael Garron Hospital ("MGH") designated for food and beverage kiosks, "Space #1" and "Space #2". As per s. 1.1(c) of the lease agreement, Space #1 was to be "used solely for the purpose of operating a Tim Hortons." For approximately nine years, Metro 1 did operate a Tim Hortons franchise out of Space #1 through an affiliated company, 844 Ontario Ltd., whose director and shareholder were the same as Metro 1's. During that time, 844 Ontario Ltd. operated the Tim Hortons franchise pursuant to a ten-year Product Licence Agreement ("PLA") it had with Tim Donuts Limited Group Corp. ("TDL") that could be terminated by TDL on 60-days' notice. For many of those years, Athens operated a bakery out of Space #2.

Effective May 12, 2022, after providing the requisite notice, TDL exercised its right to terminate the PLA with 844 Ontario Ltd. because of food safety concerns. Taking the position that Metro 1 was in breach of the commercial lease by not operating a Tim Hortons franchise in Space #1, MGH gave Metro 1 a 20-day period to cure this breach. A standstill agreement was entered into with MGH while Metro 1 negotiated with TDL, but those negotiations did not result in an agreement and the standstill agreement was terminated by MGH.

Around this same time MGH was relocating its food and beverage kiosks, Athens was not permitted to move. It vacated Space #2 at the end of January 2023.

The appellant, Metro 1, issued a Notice of Action seeking a declaration that its commercial lease with the respondent, MGH, had not been terminated, or alternatively, relief of forfeiture. Athens, whose shares are 50 percent owned by Metro 1's principal, also sought relief of forfeiture pursuant to s. 21 of the Commercial Tenancies Act. Both requests for relief from forfeiture were dismissed. Metro 1 and Athens appealed.

issues:

Did the motion judge err in his interpretation of the lease?
Did the motion judge err by commenting that Metro 1 was aware of the "temporal gap" it sought to rely upon, without also mentioning MGH's knowledge of the temporal gap?
Did the lease agreement lack business efficacy?
Did the motion judge err in failing to grant relief of forfeiture to Metro 1 and Athens?
Was MGH obligated by a free-standing duty of good faith to notify Metro 1 when TDL told MGH that it would not negotiate with Metro 1?
Was MGH obliged to offer any prospective Tim Horton franchisees to Metro 1 as sublease prospects to cure its breach?

holding:

Appeal dismissed.

reasoning:

Metro 1 argued that the motion judge erred in finding that it was in breach of the lease agreement. It denied that it was compelled under the terms of the lease to operate a Tim Hortons restaurant on the premises for the full 15-year term of the lease, despite provisions in the lease agreement requiring it to use Space #1 for that purpose. It argued that the lease necessarily carried an implied term that if it cannot operate a Tim Hortons restaurant in Space #1, it was permitted to operate a food and beverage service with an alternative menu with the consent of MGH, which consent could not be unreasonably withheld. It argued that this implied term was necessary to give the lease business efficacy and to reflect the intention of the parties, given the "temporal gap" between the 15-year lease and the PLA between 844 Ontario Ltd. and TDL, which provided for a 10-year agreement subject to cancelation on 60 days' notice.

Metro 1 relied upon a portion of s. 9 of the lease agreement which permitted Metro 1 to make changes to the menu with the consent of MGH, which consent could not be unreasonably withheld, as well as a letter it sent in December 2013, after the lease was executed, warning MGH that TDL could terminate the PLA at any time, upon proper notice. It argued that the motion judge erred in these circumstances in failing to find this implied term.

The Court rejected this submission because the lease could not be clearer in requiring Metro 1 to operate a Tim Hortons restaurant in Space #1, and as the motion judge recognized, to imply the term sought would be inconsistent with the express terms of the lease, which was impermissible.

Specifically, the "Tenant's Trade Name" for Space #1 was described in s. 1.1(b) of the agreement as "Tim Hortons", and, as indicated above, s. 1.1(c) provided that Space #1 "shall be used solely for the purpose of operating a Tim Hortons". Section 9.1(a) added that, "[t]he Tenant will use and permit the Premises to be used only for the Tenant's use set out in Section 1.1(c)" and reaffirmed that "[t]he premises will be used solely for the purpose of operating a Tim Hortons restaurant for on and off the premises consumption".

The provisions permitting changes to the menu that Metro 1 relied upon in s. 9, which reaffirmed the exclusive use of the Space #1 as a Tim Hortons restaurant. The passage from s. 9 that Metro 1 relied upon had to be read in that context. It began by listing the kinds of foods that Tim Hortons carries, and only then provided for that menu to be changed with consent of MGH, which will not be unreasonably held. When the lease was read as a whole, these provisions permitted changes to the Tim Hortons menu, and could not reasonably be interpreted as anticipating an exception to Metro 1's obligation to have a Tim Hortons restaurant in that space. The motion judge did not commit a palpable and overriding error by interpreting the lease agreement in this fashion.

The Court rejected Metro 1's submission that the motion judge erred by commenting that Metro 1 was aware of the "temporal gap" it sought to rely upon, without also mentioning MGH's knowledge of that temporal gap. The motion judge was making the salient point that Metro 1 chose to take the risk of committing in the lease agreement to have a Tim Hortons franchise, knowing that it could not assure MGH that it could comply with this obligation.

The Court rejected the submission that the lease agreement lacked business efficacy because Metro 1 was prepared to take on this risk by executing a lease agreement that did not provide Metro 1 with an out, should it be unable to maintain a franchise on the premises. The motion judge was entitled to find that this was a business choice that Metro 1 made.

The Court did not accept Metro 1's submission that the motion judge erred in failing to grant relief from forfeiture to Metro 1 and Athens. The Court saw Metro 1's submission as an attempt to re-argue relief from forfeiture in the hope that the Court would disagree with the motion judge, which was not the role of the Court. The motion judge considered the same arguments and evidence placed before the Court, and found, as he was entitled to, that MGH had not acted dishonestly or in bad faith but rather reasonably, given that Metro 1 had reasonably concluded that the relationship between Metro 1 and TDL was "beyond repair". There was ample evidence to support this finding and the Court saw no basis for interfering.

The motion judge did not address Athens' application for relief of forfeiture explicitly, but the Court did not find this to be a basis to interfere in the circumstances of this case. Athens failed to furnish the Court with any information confirming that it provided the motion judge with any basis for treating it differently than Metro 1.

The Court rejected the submission that MGH was obligated by a free-standing duty of good faith to notify Metro 1 when TDL told MGH that it would not negotiate with TDL. Metro 1 did not take the Court to any terms of the lease or the standstill agreement that would have required MGH to refrain from communicating with TDL or to disclose its communications to Metro 1.

The Court disagreed with the submission that MGH was obliged to offer any prospective Tim Horton franchisees to Metro 1 as sublease prospects to cure its breach. The duty of good faith in contract law does not require a party to subordinate its interests to those of the other party. Given that TDL terminated 844 Ontario Ltd's franchise for cause and negotiations between TDL and Metro 1 had broken off, MGH had good reason to believe it was not in its interests to attempt to maintain Metro 1's continued involvement with a Tim Hortons franchise on hospital property. MGH was under no obligation to include Metro 1 in any solution it might find to its own interest in maintaining a Tim Hortons franchise on its premises.

Metro Ontario Real Estate Limited v. Embee Properties Limited, 2024 ONCA 51

[Hourigan, Miller and Nordheimer JJ.A]

Counsel:

J. Bunting and A. White, for the appellant

A.J. Stephens and M. Dusseault, for the respondent

facts:

This dispute was about a shopping centre's common parking lot area. The owner of the shopping centre, Embee Properties Limited ("Embee"), wished to expand the shopping centre to accommodate a retail space for a new lessee, the Liquor Control Board of Ontario (the "LCBO"). One of its tenants, Metro Ontario Real Estate Ltd. ("Metro"), objected to the expansion on the basis that it impermissibly interfered with the parking spots it was entitled to under its lease for customers of its grocery store.

Metro brought a successful application to determine its rights regarding the common parking lot area. The application judge found that Metro's interest in the common parking area was both a leasehold proprietary interest and an easement. He determined that the shopping centre's expansion violated Metro's rights and that the appropriate remedy was a permanent injunction.

issue:

Did the application judge err in law in his finding that Metro had a leasehold proprietary interest in the common parking lot area, and in failing to consider the extent to which any easement that it might have interfered with by the shopping centre's expansion?

holding:

Appeal allowed.

reasoning:

Yes.

The Court held that the application judge was inconsistent in his terminology regarding the nature of Metro's interest in the common parking area. At some points, he stated that Metro had an easement over the parking spots. At other points, he found that Metro had a leasehold proprietary interest in the parking spots.

The Court held that the application judge erred in law in finding that Metro held a leasehold proprietary interest in the common parking area. A leasehold proprietary interest arises under the terms of a binding lease agreement and provides a tenant with an exclusive right to possess, occupy, and use the property in question. This right exists against all of the world, including the landlord, meaning that any interference by a landlord with the property will constitute a trespass. In the case at bar, the Court held that the critical element of exclusivity was absent because all of the tenants in the shopping centre have a right to use all of the parking spots for their customers.

The Court held that it was unnecessary to determine whether Metro had an easement because, even if assumed that it did, a servient tenement's alteration of the area covered by the easement is actionable only if the dominant tenement shows that its right to use the easement has been substantially interfered with. The application judge did not engage in a factual analysis to determine whether there had been substantial interference.

The nature of the encroachment at issue was not a reduction in available spaces, only a reconfiguration of them. Further, the record established that the total parking demand for the whole shopping centre, including the proposed LCBO, would be 182 spaces, and the peak parking demand would be 197. After the addition of the LCBO, there would still be 204 parking spaces at the shopping centre. Further, not all of the 36 affected spaces will be moved to an area further from Metro's entrance.

Metro did not have a contractual right to particular parking spots or particular locations for those parking spots. The Court ultimately concluded that Metro's right to use the parking lot for the purpose for which it was granted was not substantially interfered with by the proposed reconfiguration, given that its right could be exercised in generally the same way despite the reconfiguration.

College of Physicians and Surgeons of Ontario v. Kilian, 2024 ONCA 52

[Benotto, Miller and Thorburn JJ.A.]

Counsel:

P. Slansky, for the appellant

P. Wardle and E. Rankin, for the respondent

facts:

Dr. K appealed the order requiring her to comply with the College of Physicians and Surgeons of Ontario's investigation into her conduct, which was initiated after she allegedly issued false COVID-19 vaccine exemption certificates. The College's investigation, supported by Section 75(1)(a) of the Health Professions Procedural Code, focused on determining if Dr. K had committed professional misconduct or was incompetent. The College asked Dr. K to disclose patient records for those she provided with a COVID-19 exemption or certain medications not recommended by Health Canada, citing section 76 of the Code, which overrides confidentiality laws in health records. Dr. K refused to produce the records, citing patient confidentiality and her fiduciary relationship with her patients. Following her refusal, the College received further complaints and made an interim order directing her not to provide COVID-19 exemptions. Despite this, Dr. K issued two more exemptions, which she attributed to a technological error. Consequently, the College directed the Registrar to suspend Dr. K's medical license.

issues:

Did the application judge err in finding he did not have jurisdiction to consider arguments relating to the lawfulness of the s. 76 demand and the constitutional arguments?
Did the application judge err in finding that the requirements of s. 87 were met?

holding:

Appeal dismissed.

reasoning:

Dr. K argued that the application judge erred in not addressing the lawfulness of the College's demand under s. 76 of the Code, including whether the College had reasonable grounds to initiate an investigation, and the constitutionality of processes in s. 76 and s. 87. The Court found that the application judge correctly found these issues were not within his purview during a s. 87 application, which is aimed at compelling non-cooperating doctors to fulfill their statutory obligations in an ongoing investigation. The Court noted that the Court's role in a s. 87 application was limited to assessing whether the investigators' information requests fell within their investigatory powers.

Kilian v CPSO noted that a breach is established when the College demonstrates an ongoing investigation and lack of cooperation from the doctor involved. Dr. K's misunderstanding of the purpose of a s. 87 application was highlighted, emphasizing the principle of non-interference in ongoing administrative processes. Kilian stressed the importance of not disrupting effective healthcare regulation. It was established that noncompliance during a challenge undermines the regulation of health professionals. Dr. K was advised to first raise her issues before the Discipline Committee and then pursue them through judicial review after the administrative process. The Court concluded that the College did not need to prove the lawfulness of its document demand before making the order.

Dr. K claimed the application judge erred by not using his residual discretion to avoid ordering her compliance under s. 87, arguing that the injunction was a "mandatory" statutory injunction requiring a higher standard, that patient privilege was relevant in public hearings, and that the College, not she, caused delays. The Court noted that the application judge's exercise of discretion was given deference on appeal unless there was an error in principle or the result was plainly wrong. The judge applied the principle of not interfering in ongoing administrative processes until completion, thereby avoiding fragmenting the tribunal's process.

The Court stated that the application judge characterized the injunction correctly as statutory and found no basis for it to be deemed mandatory or subject to "higher standards." Furthermore, the application judge provided extensive reasons why patients did not have a reasonable expectation of privacy. The application judge's findings on the cause of delay in the proceedings were supported by the record. Thus, the Court found that Dr. K did not demonstrate any error in principle or that the order was plainly wrong.

Vrantsidis v. Vrantsidis, 2024 ONCA 65

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

Counsel:

J. R.W. Damstra and K.A. Cura, for the appellant

R. Levesque, for the respondents

M. Urback, Section 3 counsel for A. V.

facts:

This case concerned a dispute among three siblings, the appellant and the two respondents, concerning the care of their mother, A.V.

The appellant lived with his mother for over 20 years and was her primary caregiver. The respondents questioned the appellant's handling of their mother's property and personal care and their mother's deteriorating cognitive state. They brought an application seeking, among other things, a declaration of validity of the April 12, 1995 powers of attorney for property and personal care executed by their mother, which appointed her three children as her attorneys. The respondents also sought a declaration that the appellant held the sum of $61,000 on a resulting trust for their mother.

The application judge declared that their mother was a person incapable of managing her property and personal care and that the 1995 powers of attorney for property and personal care were valid and enforceable, including the provision that in the event of a disagreement among the three attorneys, a decision of any two of them was binding. Therefore, the application judge allowed the respondents' application and dismissed the appellant's counter-application. The application judge further ordered that the appellant account for the sum of $61,000 received from A.V on the basis that he held those funds on a resulting trust.

issues:

Did the application judge err by determining the respondent's application without considering the appellant's responding application record?
Did the application judge err in denying the appellant's request for an adjournment upon his counsel getting off the record?
Did the application judge err in dismissing the entirety of the appellant's counter-application?
Did the application judge err in ordering the appellant to pay the costs of counsel?

holding:

Appeal dismissed.

reasoning:

The transcript excerpt in the appeal book showed that the respondents' counsel referenced the appellant's responding affidavit during submissions, and the application judge referred to the appellant's evidence from his responding affidavit in paragraph 24 of her reasons. In the impugned passages, the application judge indicated, correctly, that the appellant failed to directly and successfully counter the evidence and the arguments that she was entitled to accept.

The application judge properly balanced the relevant factors and the parties' competing interests. She found that any further delay would continue the ongoing prejudice to the parties' mother, including the denial of health care services.

The application and counter-application were intertwined and concerned the same questions relating to the mother's capacity, the care and management of her property and personal care, and the propriety of each of the siblings' actions in relation to her property and personal care. The application judge necessarily adjudicated on identical and interrelated issues raised in the counter-application. There was nothing left to decide in the counter-application which was in substance rendered moot by the application judge's determination of the issues on the application.

The appellant did not meet the high onus for leave to appeal the application judge's discretionary costs award. The application judge's determination that positions taken by the appellant in the litigation regarding the 1995 Powers of Attorney, the management of A.V's property, and her care needs were not reasonable, was grounded in the record.

It was within the application judge's discretion to order the appellant to pay part of the costs. Although A.V. was responsible for the legal fees pursuant to s. 3(2) of the Substitute Decisions Act, she was entitled to the benefit of the costs order made after litigation in her favour to assist in paying those costs.

Buduchnist Credit Union Limited v. 2321197 Ontario Inc., 2024 ONCA 57

[Roberts, Trotter and Sossin JJ.A.]

Counsel:

P. Carey, C. Lee and K. Purba, for the appellant

B. Grossman and S. Wilson, for the respondent

Borozny v. Wolfsohn, 2024 ONCA 58

[Fairburn A.C.J.O., Feldman and Sossin JJ.A.]

Counsel:

R. Uukkivi and H. Dhaliwal, for the appellants

J. Diacur, for the respondents

facts:

A cottage property benefitted from an easement over the beach on the property across the road (the "beach easement"). Years before the owner sold the cottage to the respondents, JB and AB, the owner applied to the Registrar of Land Titles to extinguish the beach easement.

Before the JB and AB purchased the cottage on Lot 17 (municipally, 880 Edgemere Road in Fort Erie), it was owned by the G family. The cottage was located across the road from the W cottage on Lot 4 (municipally, 879 Edgemere Road), which was on the beach on Lake Erie. The Gs and Ws were cousins and friends. The properties were registered in the land titles system.

Before 1966, ES and MW installed a pool on Lot 17, for use by both families. After Ms. G became sole owner of Lot 17 in 1966, she conveyed the portion of the property that consisted of the parcel of land where the swimming pool was located (the "pool parcel") to herself and her husband, AG, and to HW and his wife, all four as joint tenants. At the same time, she granted an easement over her cottage parcel that was in front of the pool, in favour of the joint owners of the pool parcel. That easement allowed the Ws to access the pool (the "pool easement").

Up until six years before the JB and AB purchased Lot 17, it had a registered easement over a strip of Lot 4 and over part of its beach. The beach easement was deleted from the parcel register and registered as part of the property description of Lot 17 pursuant to an application registered by a member of the G family (the "Application") and filed by the Land Registrar. When the Gs subsequently sold the cottage to JB and AB in 2012, the transfer did not include the beach easement.

In 2019, approximately seven years after purchasing the property, the JB and AB applied to the court for an order declaring that the deletion of the beach easement was ineffective as a mistake by the Registrar of Land Titles, and that it should be restored to the title to their property.

The application judge granted rectification. He found that there was no express or implied extinguishment of the beach easement and concluded that the deletion was done by the Registrar in error. The application judge's conclusions were made in the face of the former owner's evidence that the express request in the Application to extinguish the beach easement was intentional and not an error. The Ws appealed.

issue:

Did the application judge err in law and misapprehend material facts in failing to find that the beach easement was extinguished by express release?

holding:

Appeal allowed.

reasoning:

Yes.

The application judge correctly began by examining the Application document, registered under the Land Titles Act as instrument SN217598 on July 10, 2006. The Application was filed by Ms. L as the legal owner of Lot 17, which was the dominant tenement of the beach easement over Lot 4, and which once contained both the dominant and servient tenements of the pool easement before the three parcels were merged into one. In the context of easements, the dominant tenement is the property that benefits from the easement, while the servient tenement is the property that is subject to the easement. The requested action was contained in the last three lines, which stated that "she applies to have the thumbnail property description amended by deleting the entry 'T/W & S/T BB43907 & RO530098'."

The legal effect under the Land Titles Act of registration of the Application on July 10, 2006, was to delete the two entries BB43907 and RO530096, the easements that benefitted Lot 17, being the pool easement and the beach easement from the parcel register. That result was also reflected by the Registrar's action in deleting the two easements from the registered property description for Lot 17.

JB and AB applied to the court under ss. 159 and 160 of the Land Titles Act, which provide a procedure that allows the court, on application, to rectify the register in defined circumstances.

A "person aggrieved" is not defined in the Land Titles Act and the issue of who may qualify as such a person was not raised before the court. The application judge ordered rectification of the register for Lot 17 on the basis that the Registrar had registered the Application in error, i.e., the Registrar misunderstood the request. Specifically, the application judge found that the explanation in the "Statement" section of the Application form did not support the request to delete the easements: the explanation for deletion was that the owner of the dominant tenement and the servient tenement were the same, but that was only true for the three previously separate parcels of Lot 17 and not for Lot 4. Therefore, only easements whose dominant and servient tenements had merged would be deleted.

In so concluding, the application judge effectively rejected the evidence of Ms. G without making a finding against her credibility with reasons to support it. Specifically, he rejected her evidence that the Registrar had not misunderstood the Application to delete the easements, that she and her daughter Ms. L (as the beneficial and legal owners of the property) had intended to delete them by making the Application, and that that was confirmed when they sold Lot 17 to JB and AB without including the former beach easement over Lot 4 (or referring to the pool easement).

The Court noted that an easement ceases to exist when one of the following occurs:

The owner of the dominant land (or owner of the easement in gross) releases the easement to the owner of the servient land (see Transfer, Release and Abandonment and Deletion of Easement below), or
The expiry date of the easement is reached, or other conditions have been met, or
The servient land including the easement is expropriated, or
The said party owns the dominant and servient lands. An application to amend the register noting the merging of title is required to remove easement from parcel register.

The application judge focused on the part of the Application that recited the merger of the three parcels that had formed Lot 17, and, referring to the fourth bullet point in the Guide, he concluded that the Application could only have removed any easements across those merged parcels. However, he ignored the effect of the part of the Application that plainly requested the deletion of the easements in accordance with the first bullet point in the Guide, which provided for the express extinguishment of an easement by its owner. The Court noted that this is what had occurred in this case.

The lawyer who drafted the statement in the Application form only referred to the merger of the three parcels of Lot 17 and not to the personal factual circumstances that more fully explained the request to extinguish both the pool and beach easements. However, contrary to the finding of the application judge, there was no requirement to provide an explanation for a request by the owner of the dominant tenement who benefits from the easement to delete it. The failure to provide a full explanation had not affected the legal entitlement of the owner of the dominant tenement, Lot 17, to expressly give up the beach easement over the servient tenement, Lot 4. She was entitled to make that request without any explanation, as bullet one in the Guide reflected Ms. G's evidence about the families' historical agreement not to convey the easements to buyers outside the family and Mr. H's evidence that she specifically asked him to ensure that she was not conveying any easement to JB and AB on their purchase of Lot 17.

Contrary to the application judge's finding, nothing in the wording of the beach easement grant contradicted Ms. G's evidence that the easement was meant for use by family. The grant of the easement was made to the owners of Lot 17 and "their heirs, executors, and administrators and assigns," which reflected that the easement would "run with the land" until such time as it was extinguished. The wording had not suggested that the owners of the easement intended never to extinguish it, and it was entirely consistent with Ms. G's evidence about the families' agreement to extinguish the easements before selling to non-family members.

In this case, the Registrar had not declined to register based on the error that the application judge found. The Registrar's discretion to delete the beach easement (and the pool easement), exercised under the statute, should have been accorded deference by the application judge.

Finally on the issue of the beach easement, both ss. 159 and 160 of the Land Titles Act provide that any rectification is subject to "any estates or rights acquired by registration under this Act." While the Ws had not sold their land to a third party, they obtained rights when their property was freed of the beach easement by the registration of the Application to delete the easement.

The Court noted that in summary, the application judge erred in law by finding that "[t]he disputed Application did not contain an express or implied release of the Beach Right." The last part of the Statement on the form made the request for the express release. There was no requirement to provide an explanation for a request by the owner of the dominant tenement who benefited from the easement to delete it. The Registrar acted on the express release of the pool and the beach easements by the owner of the dominant tenement. The Gs had not taken the position that the Registrar had misunderstood the Application. To the contrary, he did exactly what they asked him to do and what they intended.

SHORT CIVIL DECISIONS

Schroeder v. Co-operators General Insurance Company, 2024 ONCA 54

[Hourigan, Zarnett and Monahan JJ.A.]

Counsel:

T. Jian and A. Chalmers, for the appellant

W. Colin Empke and Kathleen Lefebvre, for the respondent

Oro-Medonte Property Owners' Association v. Oro-Medonte (Township), 2024 ONCA 49

[Nordheimer, Copeland and Dawe JJ.A.]

Counsel:

J. J. Feehely, for the appellant

C. Williams, B. Chung and M. Patterson, for the respondent

Keywords: Municipal Law, By-laws, Land Use Planning, Public Utilities, Municipal Act, 2001, S.O. 2001, c. 25, s. 11(3)4, 391, Friends of Lansdowne Inc. v. Ottawa (City), 2012 ONCA 273

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Court Of Appeal Summaries (January 22 – 26, 2024)

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