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Court Of Appeal Summaries (August 22, 2022 – August 26, 2022) – Civil Law



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Good afternoon.

Following are this week’s summaries of the Court of Appeal
for Ontario for the week of August 22, 2022.

In Mundo Media Ltd. (Re),  the Court refused
leave to appeal in a bankruptcy case where a debtor of the bankrupt
sought to stay the bankruptcy proceeding in favour of international
arbitration. The single proceeding model permits a bankruptcy court
to override arbitration agreements.

In 2264052 Ontario Inc. v. Brockville Centre
Development Corp
., the Court took issue with the trial
judge’s analysis of the parties’ claims at trial and the
manner in which the trial unfolded. Specifically, the Court held
that the trial judge failed to establish the proper foundation for
a fiduciary duty that would establish liability on the appellants.
Consequently, the Court determined that, given the lack of analysis
of the various causes of action that were advanced, the failure to
relate the evidence to them, and certain factual findings that were
made by the trial judge which were not borne out the evidence, the
reasons of the trial judge did not allow for appellate review. The
trial judge’s reasons simply failed to properly explain to the
parties the basis upon which the trial judge fixed liability on the
appellants. A new trial was ordered.

Other topics this week include the court’s discretion in
hearing a motion for partial summary judgment, condominium
oppression and liens to enforce a special assessment, and setting
aside default judgments.


John Polyzogopoulos


Blaney McMurtry LLP

416.593.2953 Email


Ines Ferriera


Blaney McMurtry LLP

416.597.4895 Email

Table of Contents

Civil Decisions


NDrive, Navigation Systems S.A. v. Zhou, 2022 ONCA
602

Keywords:  Fraud, Punitive Damages, Civil
Procedure, Partial Summary Judgment, Costs, Full Indemnity,
Limitation Periods, Fraudulent Concealment, Malik v.
Attia
, 2020 ONCA 787, Envoy Relocation Services Inc.
v. Canada (Attorney General)
, 2013 ONSC
2622, Vandenberg v. Wilken, 2019 ONCA
262, Mason v. Perras Mongenais, 2018 ONCA
978, Butera v. Chown, Cairns LLP, 2017 ONCA
783, Hryniak v. Mauldin, 2014 SCC 7


Mundo Media Ltd. (Re), 2022 ONCA
607

Keywords:  Bankruptcy and Insolvency,
Receiverships, Civil Procedure, Arbitration Agreements,
Enforceability, Single Proceeding Model, Appeals, Leave to
Appeal, Bankruptcy and Insolvency Act, R.S.C. 1985,
c. B-3, s. 193 (a) – (e) and 243, Courts of Justice
Act
, R.S.O. 1990, c. C.43, s. 101, International
Commercial Arbitration Act
, 2017, S.O. 2017, c. 2, Sch.
5, UNCITRAL Model Law on International Commercial
Arbitration, Sam Lévy & Associés Inc. v. Azco
Mining Inc.,
 2001 SCC 92, [2001] 3 S.C.R.
978, Re: Essar Steel Algoma Inc. Et al, 2016 ONSC
595, Montréal, Maine & Atlantic Canada
Co
., 2013 QCCS 5194, Business Development Bank of
Canada v. Pine Tree Resorts Inc.,
 2013 ONCA
282, Ravelston Corp. (Re) (2005), 24 C.B.R.
(5th) 256 (Ont. C.A.), Third Eye Capital Corporation v.
Ressources Dianor Inc./Dianor Resources Inc
., 2019 ONCA
508, Romspen Investment Corporation v. Courtice Auto
Wreckers Limited
, 2017 ONCA 301, leave to appeal refused,
[2017] S.C.C.A. No. 238 Royal Crest Lifecare
Group Inc. (Re)
 (2004), 181 O.A.C. 115 (C.A.), leave to
appeal refused, [2004] S.C.C.A. No. 104, Grant Forest
Products Inc. v. The Toronto-Dominion Bank
, 2015 ONCA
570, Cosa Nova Fashions Ltd. v. The Midas Investment
Corporation
, 2021 ONCA 581, Marchant Realty Partners
Inc. v. 2407553 Ontario Inc
., 2021 ONCA 375, McEwen
(Re)
, 2020 ONCA 511, Automatic Systems Inc. v.
Bracknell Corp
. (1994), 18 O.R. (3d) 257 (C.A.), Dell
Computer Corp. v. Union des consommateurs
, 2007 SCC 34, [2007]
2 S.C.R. 801, Uber Technologies Inc. v.
Heller,
 2020 SCC 16, 447 D.L.R. (4th)
179, Rogers Wireless Inc. v. Muroff, 2007 SCC 35,
[2007] 2 S.C.R. 921, Canada (Attorney General) v. Reliance
Insurance Co
. (2007), 87 O.R. (3d) 42 (S.C.), Luscar
Ltd. v. Smoky River Coal Ltd
., 1999 ABCA 179, 175 D.L.R (4th)
703, leave to appeal application discontinued, [1999] S.C.C.A. No.
381 Century Services Inc. v. Canada (Attorney
General)
, 2010 SCC 60, [2010] 3 S.C.R. 379, P.I.A.
Investments Inc. v. Deerhurst Ltd. Partnership
 (2000), 20
C.B.R. (4th) 116 (Ont. C.A.), Thorne v. College of the
North Atlantic
, 2022 NLCA 31, 3113736 Canada Ltd. v.
Cozy Corner Bedding Inc
., 2020 ONCA 235, Roderick J.
Wood, Bankruptcy and Insolvency Law  (Toronto:
Irwin Law, 2009)


MacDonald v. Wentworth Condominium Corporation No.
96
, 2022 ONCA 606

Keywords:  Real Property, Condominium,
Declarations, Reserve Funds, Special Assessments,
Oppression, Enforcement, Lien, Condominium Act,
1998, S.O. 1998, c. 19, s. 97(1) and s.97(4), Humphrey v.
Mene Inc.
, 2022 ONCA 531, Doyle v. Zochem Inc.,
2017 ONCA 130


FS Partnership/UPI Energy FS v. Mr. Refuel
Inc.
, 2022 ONCA 612

Keywords:  Breach of Contract, Civil
Procedure, Default Judgments, Setting Aside, Orders, Settling
Terms, Varying, Fresh Evidence, Rules of Civil 
Procedure, r. 3.02(1) and r. 59.04(10), Duffin v. NBY
Enterprises Inc
., 2010 ONCA 765, Beard Winter LLP v.
Shekhdar
, 2015 ONSC 4517, R. v. Palmer and
Palmer
, [1980] 1 S.C.R. 759, Brown v. The Municipal
Property Assessment Corp
., 2014 ONSC 7137 (Div. Ct.)


2264052 Ontario Inc. (Louch & Louch) v. Brockville
Centre Development Corp.
, 2022 ONCA
610

Keywords:  Contracts, Real Property,
Mortgages, Duty of Honest Performance, Land Development, Torts,
Negligent Misrepresentation, Civil Conspiracy, Fiduciary Duty,
Civil Procedure, Reasons for Decision, Reasonable Apprehension of
Bias, Rules of Civil Procedure, R.R.O. 1990, Reg.
194, r. 25.06(8), Hodgkinson v. Simms, [1994] 3
S.C.R. 377, Knoch Estate v. Jon Picken Ltd., [1991]
O.J. No. 1394 (C.A.), Wawrzkiewicz v. Integrated
Distribution Systems Limited Partnership
, 2017 ONSC
1664, Bhasin v. Hrynew, 2014 SCC 71

Short Civil Decisions


Divitaris v. Gerstel, 2022 ONCA 605

Keywords:  Civil Procedure, Litigation
Guardians, Appeals, Jurisdiction, Final or Interlocutory, Leave to
Appeal, Rules of Civil Procedure, r.
7.06(2), Willmot v. Benton, 2011 ONCA
104, Must v. Shkuryna, 2015 ONCA 665, Huang
v. Pan
, 2017 ONCA 268


Mondal v. Kirkconnell, 2022 ONCA 609

Keywords:  Torts, Defamation, Anti-SLAPP,
Civil Procedure, Appeals, Hearing Together, Courts of
Justice Act
, R.S.O. 1990 c. C.43, s. 137.1, Ontario Civil
Appeals Practice Direction, s. 11.9, Williams v. Canada
(AG)
, 2007 CarswellOnt 9967 (C.A.), Fairview Donut
Inc. v. TDL Group Corp
., 2010 ONSC
2845, Moshinsky-Helm v. Helm, 2022 ABCA 32

CIVIL DECISIONS


NDrive, Navigation Systems S.A. v. Zhou, 2022 ONCA
602

[Huscroft, Harvison Young and Sossin JJ.A.]

COUNSEL:

N. Emblem and C. Maldi, for the appellants

R. Gilliland and C. Groper, for the respondents

Keywords:  Fraud, Punitive Damages, Civil
Procedure, Partial Summary Judgment, Costs, Full Indemnity,
Limitation Periods, Fraudulent Concealment, Malik v.
Attia
, 2020 ONCA 787, Envoy Relocation Services Inc.
v. Canada (Attorney General)
, 2013 ONSC
2622, Vandenberg v. Wilken, 2019 ONCA
262, Mason v. Perras Mongenais, 2018 ONCA
978, Butera v. Chown, Cairns LLP, 2017 ONCA
783, Hryniak v. Mauldin, 2014 SCC 7

FACTS:

The respondent, NDrive is a software company based in Portugal.
The appellant, Z owns and controls Aqua Latitude International
Limited (“Aqua”), a Hong Kong corporation, and is the
sole director of the appellant Aguazion Inc., a Canadian
corporation. On March 17, 2010, the respondent, NDrive, entered
into a consultancy agreement with Aqua’s predecessor. Through
Aqua, the appellant helped NDrive establish a business relationship
with LG Electronics Inc. (“LG”) resulting in NDrive and
LG entering a licensing agreement in which LG had the right to
license the NDrive software on its mobile phones. Later, NDrive
discovered that LG had underreported the number of phones that had
NDrive software. NDrive commenced an arbitration, which was
overseen by the appellant, Z, on behalf of NDrive. Hakemi &
Ridgedale LLP (“H&R”) was to assist in the
arbitration and receive instructions from Z. NDrive won an arbitral
award of US$1,068,085.43, which H&R received. On Z’s
direction, H&R wired the balance of the award totaling
US$851,315.94 to an Aguazion account. NDrive appealed the arbitral
decision and Z handled the conduct of the appeal. The appeal was
not successful.

NDrive’s position was that Z had defrauded it through its
conduct during arbitration. On May 4, 2020, the respondent filed a
statement of claim, claiming damages of US$958,449.75. The Zhou
parties counterclaimed for damages of $5 million. On May 6, 2020,
NDrive successfully moved for
Mareva injunction. On March 12, 2021, NDrive
brought a motion for partial summary judgment and to dismiss the Z
parties’ counterclaim.

NDrive was granted partial summary judgment for US$881,170.48
and punitive damages of $200,000. The Z parties’ counterclaim
was also dismissed. The motion judge found that the appellant had
misled NDrive regarding the payment of the arbitral award, failing
to keep NDrive properly informed, and acting on behalf of NDrive
without authority to do so. In the costs endorsement, the motion
judge awarded costs to NDrive in the amount of $230,000 on a full
indemnity basis.

ISSUES:

(1) Did the motion judge err in hearing the motion for partial
summary judgment, in light of the Court’s decision
in Malik?

(2) Did the motion judge err in law in granting the partial
summary judgment and dismissing the counterclaim?

(3) Did the motion judge err in awarding three sets of
compensation to the respondent arising out of the same underlying
facts, by awarding the respondent punitive damages and full
indemnity costs, and finding that the appellant was not entitled to
his 18% under the success fee arrangement?

(4) Did the motion judge err in appreciating the law of
fraudulent concealment and its effect on limitation periods?

HOLDING:

Appeal dismissed.

REASONING:

(1) No.

The motion judge correctly set out the three threshold questions
from Malik: 1) demonstrating that dividing the
determination of the case into several parts will prove cheaper for
the parties; 2) showing how partial summary judgment will get the
parties’ case in and out of the court system more quickly; and
3) establishing how partial summary judgment will not result in
inconsistent findings by the multiple judges who will touch the
divided case. The motion judge found that the triage function to
which these questions were directed was performed by the case
management judge.

The appellants argued that the case management judge did not
consider Malik, and that the subsequent shift in the
litigation when the respondent parties served a notice of motion
for summary judgment required fresh consideration of
the Malik questions. The Court did not accept
this argument and held that the possibility that the respondents
would continue litigation was clearly before the case management
judge at the time of the case management decisions. Further, as the
motion judge observed in her decision on the motion to
vacate, Malik was in fact raised by the
appellants at the January 2021 case conference. She expressly
addressed Malik when considering the case
management judge’s analysis of whether the motion should
proceed. The appellants were unsuccessful in seeking leave to
appeal from the motion judge’s refusal to vacate the
motion.

The Court found that the motion judge’s analysis was
thorough, and it was open to her to rely on the case management
judge’s decisions and earlier analysis in the motion as
satisfying Malik. The motion judge emphasized
that Malik did not alter the key concerns that
informed the determination of whether a partial summary judgment
should go forward. The motion judge also acknowledged that even if
she granted the partial summary judgment, the appellant parties
would remain in the action. She further concluded that the
litigation against the two groups of defendants was “factually
interrelated but not legally similar.” She concluded the
likelihood of inconsistent findings would be
“negligible.”

(2) No.

The appellant failed to establish palpable or overriding error
with the motion judge’s granting of judgment in favour of the
respondents and dismissal of the counterclaim.

(3) No.

The purpose of punitive damages and full indemnity costs differ
and there is no bar to a judge deciding that both are appropriate
in the circumstances. The Court held that the motion judge’s
conclusion that the appellant was ineligible for compensation (that
is, the success fee arrangement) due to his fraudulent conduct was
unrelated both to the punitive damages and to the full indemnity
costs.

(4) No.

The motion judge committed no error in dismissing the
appellants’ claim with respect to fraudulent concealment, which
lacked specificity and a sufficient foundation in the record.


Mundo Media Ltd. (Re), 2022 ONCA 607

[Thorburn J.A. (Motion Judge)]

COUNSEL:

M.P. Gottlieb, B. Vermeersch and X.L. Li, for the moving
party

S. McGrath, R. Nicholson and S. Clinton, for the responding
party

Keywords:  Bankruptcy and Insolvency,
Receiverships, Civil Procedure, Arbitration Agreements,
Enforceability, Single Proceeding Model, Appeals, Leave to
Appeal, Bankruptcy and Insolvency Act, R.S.C. 1985,
c. B-3, s. 193 (a) – (e) and 243, Courts of Justice
Act
, R.S.O. 1990, c. C.43, s. 101, International
Commercial Arbitration Act
, 2017, S.O. 2017, c. 2, Sch.
5, UNCITRAL Model Law on International Commercial
Arbitration, Sam Lévy & Associés Inc. v. Azco
Mining Inc.,
 2001 SCC 92, [2001] 3 S.C.R.
978, Re: Essar Steel Algoma Inc. Et al, 2016 ONSC
595, Montréal, Maine & Atlantic Canada
Co
., 2013 QCCS 5194, Business Development Bank of
Canada v. Pine Tree Resorts Inc.,
 2013 ONCA
282, Ravelston Corp. (Re) (2005), 24 C.B.R.
(5th) 256 (Ont. C.A.), Third Eye Capital Corporation v.
Ressources Dianor Inc./Dianor Resources Inc
., 2019 ONCA
508, Romspen Investment Corporation v. Courtice Auto
Wreckers Limited
, 2017 ONCA 301, leave to appeal refused,
[2017] S.C.C.A. No. 238 Royal Crest Lifecare
Group Inc. (Re)
 (2004), 181 O.A.C. 115 (C.A.), leave to
appeal refused, [2004] S.C.C.A. No. 104, Grant Forest
Products Inc. v. The Toronto-Dominion Bank
, 2015 ONCA
570, Cosa Nova Fashions Ltd. v. The Midas Investment
Corporation
, 2021 ONCA 581, Marchant Realty Partners
Inc. v. 2407553 Ontario Inc
., 2021 ONCA 375, McEwen
(Re)
, 2020 ONCA 511, Automatic Systems Inc. v.
Bracknell Corp
. (1994), 18 O.R. (3d) 257 (C.A.), Dell
Computer Corp. v. Union des consommateurs
, 2007 SCC 34, [2007]
2 S.C.R. 801, Uber Technologies Inc. v.
Heller,
 2020 SCC 16, 447 D.L.R. (4th)
179, Rogers Wireless Inc. v. Muroff, 2007 SCC 35,
[2007] 2 S.C.R. 921, Canada (Attorney General) v. Reliance
Insurance Co
. (2007), 87 O.R. (3d) 42 (S.C.), Luscar
Ltd. v. Smoky River Coal Ltd
., 1999 ABCA 179, 175 D.L.R (4th)
703, leave to appeal application discontinued, [1999] S.C.C.A. No.
381 Century Services Inc. v. Canada (Attorney
General)
, 2010 SCC 60, [2010] 3 S.C.R. 379, P.I.A.
Investments Inc. v. Deerhurst Ltd. Partnership
 (2000), 20
C.B.R. (4th) 116 (Ont. C.A.), Thorne v. College of the
North Atlantic
, 2022 NLCA 31, 3113736 Canada Ltd. v.
Cozy Corner Bedding Inc
., 2020 ONCA 235, Roderick J.
Wood, Bankruptcy and Insolvency Law  (Toronto:
Irwin Law, 2009)

FACTS:

On April 9, 2019, Mundo Media Ltd. (“Mundo) was placed in
receivership by the Ontario Superior Court of Justice pursuant to
s. 243 of the Bankruptcy and Insolvency Act 
(“BIA“). The responding party, Ernst & Young
Inc. (“E&Y”), is the court-appointed receiver and
manager of all assets belonging to Mundo and its subsidiaries.

E&Y brought a motion for an order directing the moving
party, SPay Inc. (“SPay”), to pay US$4,124,000 to Mundo
for several unpaid invoices, pursuant to contractual agreements
that were signed prior to the receivership between Mundo and SPay
or its predecessor. SPay sought to stay E&Y’s motion on the
basis that the agreements contained an international commercial
arbitration clause which required all disputes to be resolved by
arbitration in New York pursuant to New York law. The motion judge
refused SPay’s request, holding that the arbitration provisions
in the agreements were rendered inoperative by the “single
proceeding model” in Ontario.

The motion judge also held that SPay was not a
“stranger” to the insolvency proceeding, as it sought to
set off some or all the monies owing to Mundo. SPay claimed that
the appeal should be allowed to proceed as it met the three-prong
test for granting leave to appeal: (i) there was a real prospect of
success, as the moving party was a stranger to the bankruptcy and
its set-off did not render it an interested party to the
proceeding; (ii) the proposed appeal involved an issue of public
importance that would provide guidance to receivers, third parties
and insolvency courts in addressing the enforceability of
international arbitration agreements with third parties where a
defence of set-off was raised by the third party; and (iii) the
short time required to hear the appeal would not prejudice
E&Y.

E&Y submitted that the chances of success were unlikely as
SPay’s claim should be contemplated by the single proceeding
model. E&Y also claimed that the appeal did not involve a
matter of general importance and allowing the motion for leave to
appeal would result in undue delay and additional costs.

ISSUES:

(1) Should the moving party be granted leave to appeal the
motion judge’s decision not to stay the receiver’s motion
for judgment?

HOLDING:

Motion dismissed.

REASONING:

(1) No.

On a motion for leave to appeal under s. 193(e) of
the BIA, the moving party must satisfy three
criteria. First, the proposed appeal must be prima
facie
 meritorious and must raise legitimately arguable
points, to create a realistic possibility of success on the appeal.
This assessment needs to be conducted against the backdrop of s.
243 of the BIA, which has been interpreted to give
supervising judges a broad mandate to resolve issues in bankruptcy.
Second, the proposed appeal must raise an issue or issues of
general importance. Third, the proposed appeal must not unduly
delay the progress of the proceedings.

The Court found the first ground of the proposed appeal was
not prima facie meritorious. SPay claimed that
mandatory arbitration provisions should apply absent “very
clear language” to the contrary. The Court held that the
receiver was appointed by the court and its authority emanated
solely from court order, thus, only the court can determine the
receiver’s powers and obligations. Moreover, although article 8
of Schedule 2 to the International Commercial Arbitration
Act
, 2017, S.O. 2017, c. 2, Sch. 5 (“ICAA“)
required a stay in favour of an arbitration agreement, the
legislation expressly provided room for courts to “find that
the agreement is … inoperative”. This express carve-out,
read in conjunction with the broad discretion that courts exercise
under s. 243 of the BIA in supervising
bankruptcy matters, enables bankruptcy courts to preclude the
operation of the ICAA by virtue of the operation
of the single proceeding model.

Next, the Court found that the proposed ground of appeal was
not prima facie meritorious. SPay claimed that
it was a stranger to the proceeding because (i) it had not filed a
claim against the responding party; and (ii) it proposed to assert
a set-off rather than make a claim. The Court held that SPay was a
third party to the insolvency proceeding and was also the
responding party’s largest debtor. Thus, SPay was not a
stranger to the bankruptcy because the outcome of its proposed set
off would determine both the amount of the responding party’s
single biggest account receivable and the size of the
bankrupt’s estate, thereby affecting all other creditors. The
Court cited Sam Lévy, at para. 49, noting that
the most significant debtor of a bankrupt estate is “[f]ar
from being a ‘stranger’ to the bankruptcy”.

The Court found the motion judge’s decision was in keeping
with the purpose of the single proceeding model as outlined by the
Supreme Court – to promote efficiency and maximize returns
for creditors – and accords with the jurisprudence that
parties should not be allowed to contract out of the single
proceeding model where one party may make claims that will
seriously adversely affect all creditors. The Court found the
motion judge’s conclusions rested on findings of fact about the
specific situation in which these parties found themselves.

The Court found that the issues of concern raised by the moving
party were about the application of the law to the specific facts
of the case and were not issues of more general importance. The
Court also found that allowing the appeal to proceed would result
in undue delay, additional litigation costs and deterioration of
the assets of the receivership.


MacDonald v. Wentworth Condominium Corporation No. 96,
2022 ONCA 606

[Huscroft, Harvison Young and Sossin JJ.A.]

COUNSEL:

S. Pulver and E. Jair, for the appellant

M. Mackey and L. Hernandez, for the respondent

Keywords:  Real Property, Condominium,
Declarations, Reserve Funds, Special Assessments,
Oppression, Enforcement, Lien, Condominium Act,
1998, S.O. 1998, c. 19, s. 97(1) and s.97(4), Humphrey v.
Mene Inc.
, 2022 ONCA 531, Doyle v. Zochem Inc.,
2017 ONCA 130

FACTS:

The respondent Condominium corporation is the owner of a
condominium building in Hamilton, Ontario and the appellant is the
owner of one of the twelve building units. Due to the severely
deficient reserve fund, as well as the significant structural
repairs required to the building, the Condominium levied an
additional special assessment of $181,666 on December 29, 2016.
These expenditures were required to repair the balcony floors,
masonry walls, and the elevator. The appellant’s share of this
total was $21,765.40. This special assessment was levied without
consulting the owners or holding a vote. The Condominium’s
Declaration provides the Condominium Board with wide discretion,
and in particular, Article III 4(a) provides that “[t]he
Corporation may by a vote of members” make substantial
alterations. The motion judge relied on this provision to conclude
that the Declaration was permissive of holding a vote to undertake
the proposed repairs but did not require one. The appellant is the
only owner who has refused to pay her share of the special
assessment. The Condominium sought an order for summary judgment to
enforce its lien against the appellant, which was granted by the
motion judge. The appellant unit owner appealed.

ISSUES:

(1) Did the motion judge err in finding that the repair work to
the balcony floors, masonry, and elevator was remedial in nature,
thus falling under the ambit of s. 97(1) of
the Condominium Act 
(“Act“)?

(2) Did the motion judge err in his oppression analysis
regarding the Condominium’s conduct toward the appellant?

(3) Did the motion judge err in failing to require a separate
hearing in order to determine the outcome of the summary judgment
motion?

HOLDING:

Appeal dismissed.

REASONING:

(1) No.

The Court found no error in the motion judge’s finding that
the restoration work fell within the scope of remedial work within
the meaning of s. 97(1) of the Act. The motion judge
correctly identified that s. 97 of the Act must
be read harmoniously and that the “substantial additions or
alterations” provision found in s. 97(4) is circumscribed by
s. 97(1) of the Act. In effect, s. 97(1) provides
that remedial work will not trigger s. 97(4). Accordingly, the
Condominium had a duty to manage, maintain, and administer the
common elements, and that the motion judge’s decision not to
apply a restrictive interpretation of the terms “repair and
maintenance” was not in error. The Court further stated that
it is trite law that a motion judge’s reasons must be read as a
whole and in context; therefore, the motion’s judge’s
decision to rely on the 2018 Engineering Report, which determined
the restoration work that was needed, was valid in consideration of
the totality of the evidence.

(2) No.

The motion judge stated that the test for oppression requires
evidence to support the claimant’s reasonable expectations and
to support the claims that the conduct violating the reasonable
expectations was “oppressive”. The test centered on the
arrangement between the parties and whether the impugned conduct
violates an applicant’s reasonable expectations of that
arrangement.

The Court held that the motion judge did not fall into palpable
and overriding error in his application of the law of oppression to
the set of facts. The motion judge agreed that the appellant had a
reasonable expectation that 1) a reserve fund study be completed
prior to the levying of a special assessment, and 2) the Board keep
minutes from all meetings and more importantly, to keep detailed
minutes from meetings where punitive action is sought to lien a
unit owner’s property knowing full well the hardship and
restriction this action can have on a property owner’s
rights.

However, the motion judge found that the Condominium’s
conduct failed to rise to the required level of oppressive conduct.
First, the motion judge found that the decision to delay a reserve
fund study to ensure the special assessment did not evince bad
faith, unfairly prejudice, or unfairly disregard sufficient to
warrant an oppression remedy. Second, the motion judge found as a
matter of fact that the Board minutes were later drafted and
provided to the parties. Thus, the question remained whether the
lack of minutes rose to the level to grant an oppression remedy.
The motion judge rejected this argument. The reasoning and outcome
of the Board’s decision to seek a lien was obvious, as the
appellant remained the only unit owner who refused to contribute
funds for the remedial work.

(3) No.

The motion judge correctly concluded that after his finding that
the levying of the special assessment was valid, the Board’s
right and obligation to assess the appellant’s unit
crystalized. Importantly, the appellant raised no argument at first
instance alleging any errors with the lien or Notice of Sale.


FS Partnership/UPI Energy FS v. Mr. Refuel Inc., 2022 ONCA
612

[Huscroft, Harvison Young and Sossin JJ.A.]

COUNSEL:

M. Kersten, for the appellant

M. McMahon, for the respondent

Keywords:  Breach of Contract, Civil
Procedure, Default Judgments, Setting Aside, Orders, Settling
Terms, Varying, Fresh Evidence, Rules of Civil 
Procedure, r. 3.02(1) and r. 59.04(10), Duffin v. NBY
Enterprises Inc
., 2010 ONCA 765, Beard Winter LLP v.
Shekhdar
, 2015 ONSC 4517, R. v. Palmer and
Palmer
, [1980] 1 S.C.R. 759, Brown v. The Municipal
Property Assessment Corp
., 2014 ONSC 7137 (Div. Ct.)

FACTS:

In January 2020, the respondent, FS Partnership, commenced an
action against the appellants for breach of contract seeking
$1,065,713.32 in damages. None of the appellants filed a Notice of
Intent to Defend or a Statement of Defence. The appellants were
noted in default and the respondents were granted default judgment
against the appellants for $1,013,430.60 in damages, plus interest
and costs. The appellants received a copy of the judgment, but did
not respond to any of the proceedings until months later. The
appellants claimed they were unaware of the default judgment and
filed a motion to set it aside. The motion was granted on the terms
that an appellant pay the respondent costs within thirty days. The
appellant paid the costs six days after the deadline. During an
appointment with the motion judge to settle the terms of the order,
the appellant asked for an extension of the deadline in the order,
however, no formal motion to vary the terms of the order was
brought. The motion judge refused to change the deadline set by her
initial order.

ISSUES:

(1) Can the appellants bring a motion for fresh evidence?

(2) Did the motion judge act unreasonably in settling the
order?

HOLDING:

Appeal dismissed.

REASONING:

(1) No.

The principles which should be applied to determine the
admissibility of fresh evidence are set out in R. v.
Palmer and Palmer
 at p. 775, as follows: (1) the evidence
should generally not be admitted if, by due diligence, it could
have been adduced at the earlier proceeding; (2) the evidence must
be relevant in the sense that it bears upon a decisive or
potentially decisive issue in the decision; (3) the evidence must
be credible in the sense that it is reasonably capable of belief;
and (4) it must be such that if believed it could reasonably, when
taken with the other evidence before the decision-maker, be
expected to have affected the result (the
Palmer  standard”).

The appellant’s proposed fresh evidence (i.e., that they
were never informed of the obligation to pay costs) did not meet
the Palmer  standard. There was no basis to
conclude that the motion judge would have settled her order
differently if she had been made aware that the appellant had not
been informed of the costs order.

(2) No.

The motion judge’s decision was entitled to deference. She
properly instructed herself on her narrow authority to change an
order. She did not act unreasonably in determining that those
narrow grounds did not arise in this case, and in particular that
there would be no miscarriage of justice, as other avenues of
recourse were open to the appellant (such as moving to vary the
terms of the order).


2264052 Ontario Inc. (Louch & Louch) v. Brockville Centre
Development Corp.
, 2022 ONCA 610

[Huscroft, Nordheimer and Copeland JJ.A.]

COUNSEL:

J.W.L. Griffiths and M.G.T. Glass, for the appellants

J.L. McDonald, for the respondents

Keywords:  Contracts, Real Property,
Mortgages, Duty of Honest Performance, Land Development, Torts,
Negligent Misrepresentation, Civil Conspiracy, Fiduciary Duty,
Civil Procedure, Reasons for Decision, Reasonable Apprehension of
Bias, Rules of Civil Procedure, R.R.O. 1990, Reg.
194, r. 25.06(8), Hodgkinson v. Simms, [1994] 3
S.C.R. 377, Knoch Estate v. Jon Picken Ltd., [1991]
O.J. No. 1394 (C.A.), Wawrzkiewicz v. Integrated
Distribution Systems Limited Partnership
, 2017 ONSC
1664, Bhasin v. Hrynew, 2014 SCC 71

FACTS:

This case arises out of a mutual land development project in
Brockville between the appellants and the respondents. The project
involved the sale and transfer of parcels of land from the
respondents to the appellants, which were financed with vendor take
back mortgages that were personally guaranteed by the principal of
the appellant, L&L. L&L also financed the project through
construction loans in priority to the vendor take back mortgages.
In total, the appellants purchased three blocks of land from one
respondent, B, to build triplexes on the property. The parties
signed an agreement on July 11, 2011, which was subsequently
amended on May 18, 2012. The amendment deleted a restriction on
subsequent transfers that was present in the initial agreement and
thereby allowed the respondents to freely sell lots to other
builders from May 2012 onwards. It did so, and sold Block #2 to S,
one of the respondents. Unbeknownst to the appellants, S was owned
by B; this led to the first issue between them. In January and
March 2013, flooding occurred on the land next to Block #2, which
led to another issue between the parties and litigation ensued. The
respondents had initially framed their action as one based in
negligent misrepresentation, then later added a civil conspiracy
claim that alleged a fiduciary duty as a particular of that
claim.

The trial judge found in favour of the respondents, awarding a
variety of relief including damages and an accounting of monies
owing on the mortgages. In doing so, the trial judge found the
appellants liable for failing to construct the drainage ditch in a
timely manner. The trial judge also found the sale to the
appellant, S to be a breach of fiduciary duty. In reaching his
conclusions, the trial judge clearly favoured the respondents’
evidence over the appellants’.

ISSUES:

(1) Did the trial judge err in his application of the law to the
issues between the parties?

HOLDING:

Appeal allowed.

REASONING:

(1) Yes. The trial judge’s analysis was lacking with respect
to almost all of the issues raised.

The trial judge failed to set out the factors to be considered
in deciding whether a fiduciary duty arose between the parties. The
factors to be examined in deciding whether a fiduciary duty arises
are: (1) the scope for the exercise of some discretion or power;
(2) that the power or discretion can be exercised unilaterally so
as to affect the beneficiary’s legal or practical interests;
and (3) a peculiar vulnerability to the exercise of that discretion
or power. The trial judge never identified the discretion or power
that the appellants exercised over the respondents that would
establish the proper foundation for fiduciary duty. The trial judge
also never identified the power or discretion that the appellants
could unilaterally exercise over the respondents that would affect
the respondent’s interests. In addition, the trial judge failed
to address the fact that a breach of fiduciary duty was never
pleaded in the statement of claim as a separate cause of action. It
was insufficient that an alleged breach of fiduciary duty was
pleaded as a particular of a civil conspiracy claim because breach
of fiduciary duty is a stand-alone cause of action and must be
pleaded as such.

The trial judge cited the factors in Wawrzkiewicz v.
Integrated Distribution Systems Limited Partnership
, 2017 ONSC
1664, to find that civil conspiracy was engaged. However, the trial
judge failed to engage in an analysis of those factors. Similarly,
the trial judge referred to the duty of honest performance
established in Bhasin v. Hrynew, 2014 SCC 71.
However, his application of the principle was problematic. Although
the trial judge stated that the duty of honest performance is not a
separate cause of action, he appeared to treat it as one. The trial
judge also never directly identified the contract to which the duty
of honest performance would relate or how that contract was
breached.

The trial judge also referred to a number of additional causes
of action including intentional infliction of economic harm and
breach of a duty of care. Once again, the trial judge failed to
analyze the component parts of these causes of action and how the
evidence would sustain any finding in relation them.

In addition, the trial judge essentially bifurcated the trial
when he directed counsel to call their evidence on the specific
issue of the flooding. As a general proposition, trial judges
should leave the presentation of the case to counsel. While trial
judges may intervene to ensure that only relevant evidence is being
presented and to ensure that trial time is effectively used, those
interventions should be rare. It is counsel’s responsibility to
present their client’s case and they should be left to decide
how they will best fulfill that responsibility. Bifurcating a
trial, especially on the motion of the trial judge alone, is a
risky strategy, one that is likely, as this trial demonstrated, to
complicate the issues rather than simplify them.

There were also unnecessary comments made during the course of
the trial that could be seen to give rise to a reasonable
apprehension of bias, although it was unnecessary for the Court to
conclude that the comments rose to that level.

In the end result, given the lack of analysis of the various
causes of action that were advanced, the failure to relate the
evidence to them, and certain factual findings that were made by
the trial judge but were not borne out the evidence, the reasons of
the trial judge did not allow for appellate review. The trial
judge’s reasons simply failed to properly explain to the
parties the basis upon which the trial judge fixed liability on the
appellants. A new trial was required to properly address the issues
between the parties.

SHORT CIVIL DECISIONS


Divitaris v. Gerstel, 2022 ONCA 605

[Huscroft, Harvison Young and Sossin JJ.A.]

COUNSEL:

M.L. Solmon and N. Tourgis, for the appellants

J. Zibarras, for the respondents

Keywords:  Civil Procedure, Litigation
Guardians, Appeals, Jurisdiction, Final or Interlocutory, Leave to
Appeal, Rules of Civil Procedure, r.
7.06(2), Willmot v. Benton, 2011 ONCA
104, Must v. Shkuryna, 2015 ONCA 665, Huang
v. Pan
, 2017 ONCA 268


Mondal v. Kirkconnell, 2022 ONCA 609

[[Lauwers J.A. (Case Management Judge)]]

COUNSEL:

N.J. Tourgis, for the appellants (C70468)

K. Sherkin, for the appellants (C70482)

N.D. Kolos and L. Malatesta, for the respondents (C70468)

M. McMann, for the respondents (C70482)

Keywords:  Torts, Defamation, Anti-SLAPP,
Civil Procedure, Appeals, Hearing Together, Courts of
Justice Act
, R.S.O. 1990 c. C.43, s. 137.1, Ontario Civil
Appeals Practice Direction, s. 11.9, Williams v. Canada
(AG)
, 2007 CarswellOnt 9967 (C.A.), Fairview Donut
Inc. v. TDL Group Corp
., 2010 ONSC
2845, Moshinsky-Helm v. Helm, 2022 ABCA 32

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be ought
about your specific circumstances.



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