Court Of Appeal Summaries (January 23 – 27, 2023)

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Following are our summaries of the civil decisions of the Court
of Appeal for Ontario for the week of January 23, 2023. It was a
very busy week.

The Court in Rabin v. 2490918 Ontario
Inc. considered an appeal from a tenant concerning s.23
of the Commercial Tenancies Act and whether consent to an
assignment had been unreasonably withheld by their landlord. The
application judge had found that the appellant had waived the
requirement under the lease and that the appellant had failed to
show that the respondent had either refused to consent to the
assignment or unreasonably withheld its consent. The Court found
that the application judge had incorrectly addressed and applied
the doctrine of waiver, which was not raised by the parties. In
applying the doctrine, the application judge erred in construing
delay (the landlord’s failure to provide a timely response to
the tenant’s request for consent) as a waiver. Ultimately,
the Court found that the landlord had unreasonably withheld consent
when they failed to provide a response to the request for consent
within the 15-day time period contemplated under the lease.

In Costanza v. Dejardins Financial Security Life
Assurance Company, the appellant insurer appealed from the
judgment of the application judge declaring that the life insurance
policy of which the respondent, as beneficiary, was valid,
subsisting and binding on the insurer. The issues raised in the
appeal concerned the duty of an insured to disclose material facts
to their insurer and incontestability once a policy has been in
force for two years or more during the life of the insured. The
Court dismissed the appeal and declined to admit fresh evidence on
the basis that the fresh evidence could not reasonably be expected
to have affected the result of the application. The Court found
that, while the application judge erred in disregarding admissions
by witnesses that the deceased was convicted of an assault which
could lead to invalidating the policy, the Court found no error in
the application judge’s finding that even if accepting the
conviction had been proven on the application, the insurer had
failed to establish that the deceased had the intent required for
civil fraud at the time he completed the application for insurance.
The Court held that, in absence of palpable and overriding error,
the finding by the application judge was entitled to deference.

In Continental Currency Exchange Canada Inc. v.
Sprott, the Court upheld the motion judge’s decision to
grant the respondents a stay of proceedings due to the
appellants’ access to documents and emails belonging to the
respondents that were confidential and privileged. The Court held
that the motion judge correctly applied the test from Celanese
Canada Inc. v. Murray Demolition Corp., to assess whether
privileged and confidential information attributable to a solicitor
and client relationship will prejudice the party possessing the
privilege. The Court found that the motion judge’s conclusion
that the appellants’ access to privileged information
regarding the litigation was a serious risk to the
respondents’ privilege and the appropriate remedy was a stay
of proceedings.

There were two subsidized housing judicial review appeals
(MacKenzie v. Ottawa Community Housing
Corporation and Ali v. Peel). Both appeals
were dismissed and the initial decisions of the governmental
authorities were upheld.

Other topics covered this week included granting an application for
intervenor status in a case involving habeas corpus, an appeal of a
dismissal of a motion to strike out pleadings, a trial decision
determining issues of civil fraud and conspiracy and a refusal of
leave to amend pleadings.

Wishing everyone an enjoyable weekend.

John
Polyzogopoulos

Blaney McMurtry LLP

416.593.2953 Email

Ines
Ferreira

Blaney McMurtry LLP

416.593.2953 Email

Civil Decisions

Corrigan v.
Ontario, 2023 ONCA 39

Keywords: Crown Liability, Civil Procedure,
Striking Pleadings, Nullity, Notice of Claim, Crown Liability
and Proceedings Act, 2019, S.O. 2019, c. 7, Proceedings
Against the Crown Act, R.S.O. 1990, c. P.27, Human Rights
Code, R.S.O. 1990, c. H.19, Courts of Justice Act,
R.S.O. 1990, c. C.43, s. 6(1)(b), Rules of Civil
Procedure, r. 19.02(1)(b), Ball v. Donais (1993), 13
O.R. (3d) 322 (C.A.), Drywall Acoustic Lathing Insulation Local
675 Pension Fund v. SNC-Lavalin Group Inc., 2020 ONCA 375,
Zeus v. Spick, [2000] O.J. No. 3758 (S.C.), aff’d
[2001] O.J. No. 2848 (C.A.), Beardsley v. Ontario (2001),
57 O.R. (3d) 1 (C.A.), Miguna v. Ontario (Attorney
General) (2005), 262 D.L.R. (4th) 222 (Ont. C.A.), Noddle
v. The Ontario Ministry of Health, 2019 ONSC 7337,
Aba-Alkhail v. University of Ottawa, 2012 HRTO 656,
Grogan v. Ontario (Human Rights Tribunal), 2012 ONSC
319

Wong v. Li, 2023
ONCA 42

Keywords: Torts, Fraud,
Misrepresentation, Breach of Fiduciary Duty, Law Society of
Upper Canada v. Oscar Choi-Wah Wong, 2012 ONLSHP 0180, Law
Society of Upper Canada v. Oscar Choi-Wah Wong, 2013 ONLSAP
0031, Bruno Appliance and Furniture, Inc. v.
Hryniak, 2014 SCC 8, F.H. v. McDougall, 2008 SCC
53, R. v. G.F., 2021 SCC 20, R. v. Dinardo, 2008
SCC 24

Benbella v. The National Dental
Examining Board of Canada , 2023 ONCA
56

Keywords: Administrative Law, Regulated
Professions, Civil Procedure, Appeals, Standard of Review,
Correctness, Striking Pleadings, No Reasonable Cause of Action,
Rules of Civil Procedure, r. 21.01(1)(b), McCreight v.
Canada (Attorney General), 2013 ONCA 483, Potis Holdings
Ltd. v. The Law Society of Upper Canada, 2019 ONCA 618

Ali v. Peel (Regional
Municipality), 2023 ONCA 41

Keywords: Administrative Law, Judicial Review,
Standard of Review, Reasonableness, Remedies, Housing Services
Act, 2011, S.O. 2011, c. 6, Sched. 1, O. Reg. 367/11, s.
1(1)-1(2), s.47, s.48, s.54, s.58, Ontario (Health) v.
Association of Ontario Midwives, 2022 ONCA
458, Agraira v. Canada (Public Safety and Emergency
Preparedness), 2013 SCC 36, Turkiewicz (Tomasz
Turkiewicz Custom Masonry Homes) v. Bricklayers, Masons Independent
Union of Canada, Local 1, 2022 ONCA
780, Briggs v. Durham (Police Services
Board), 2022 ONCA 823, Canada (Minister of
Citizenship and Immigration) v. Vavilov, 2019 SCC
65.

Horani v. Manulife Financial
Corporation, 2023 ONCA 51

Keywords: Torts, Occupier’s Liability, Slip
and Fall, Civil Procedure, Amending Pleadings, Appeals,
Jurisdiction, Final or Interlocutory, Rules of Civil
Procedure, rr. 26.01, 48.04(1), Hendrickson v.
Kallio, [1932] O.R. 675 (C.A), Drywall Acoustic Lathing
Insulation Local 675 Pension Fund v. SNC-Lavalin Group Inc.,
2020 ONCA 375, Denton v. Jones, 13 O.R. (2d) 419 (S.C.),
Ontario (Securities Commission) v. McLaughlin, 2009 ONCA
280, 1588444 Ontario Ltd. v. State Farm Fire and Casualty
Co., 2017 ONCA 42, Trillium Power Wind Corp. v.
Ontario, 2019 ONSC 6905, Hill v. Ortho Pharmaceutical
(Canada) Ltd., [1992] O.J. No. 1740, LML Investments Inc.
v Choi (2007), 85 O.R. (3d) 351 (S.C.), Jetport v Jones Brown
Inc., 2013 ONSC 2740, Lugen Corporation v Starbucks Coffee
Canada Inc., 2014 ONSC 7141, Denis v Lalonde, 2016
ONSC 5960, Secure Solutions Inc. v. Smiths Detection Toronto Ltd.,
2017 ONSC 2401, A.G.C. Mechanical Structural Security Inc. v.
Rizzo, 2013 ONSC 1316, BNL Entertainment Inc. v.
Ricketts, 2015 ONSC 1737, Fruitland Juices Inc. v. Custom
Farm Service Inc. et al., 2012 ONSC 4902, Cromb v.
Bouwmeester, 2014 ONSC 5318, Alofs v. Blake, Cassels &
Graydon LLP, 2017 ONSC 950, Chokler v. FCA Canada
Inc. 2017 ONSC 4494, Conway v. Law Society of Upper
Canada, [2016] O.J. No. 451, Gloucester Organization Inc.
v. Canadian Newsletter Managers Inc. (1995), 21 O.R. (3d) 753,
Ginkel v. East Asia, 2010 ONSC 905, Whiten v Pilot
Insurance Co., [2002] S.C.J. No. 19, Family Delicatessen
Ltd. V. London (City), 2006 CanLII 5135 (Ont. C.A), John
Sopinka, Mark Gelowitz and David W. Rankin, The Conduct of an
Appeal, 5th ed. (Toronto: Lexis Nexis, 2022)

MacKenzie v. Ottawa Community Housing
Corporation, 2023 ONCA 43

Keywords: Administrative
Law, Judicial Review, Standard of Review, Reasonableness, Statutory
Interpretation, Housing Services Act, 2011, S.O. 2011, c.
6, Sched. 1, Part V, s 38, s 42(1), s 43(1), s 45, s 46(1), s
52(1), Ontario Regulation 367/11, made under the Housing
Services Act, 2011, S.O. 2011, c. 6, Sched. 1, Sched. 2,
s 28(1), s 28(2), Ontario (Health) v. Association of
Ontario Midwives, 2022 ONCA 458, Agraira v. Canada
(Public Safety and Emergency Preparedness), 2013 SCC
36Turkiewicz (Tomasz Turkiewicz Custom Masonry
Homes) v. Bricklayers, Masons Independent Union of
Canada, Local 1, 2022 ONCA 780, Briggs v. Durham
(Police Services Board), 2022 ONCA 823, Canada (Minister
of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, Ali v. Peel
(Regional Municipality), 2023 ONCA 41

McGrath v. Joy ,
2023 ONCA 46

Keywords: Wills and Estates, Testamentary
Capacity, Holographic Wills, Codicils, Civil Procedure, Appeals,
Motions, Reconsideration, Succession Law Reform Act,
R.S.O. 1990, c. S.26, s. 6, Rules of Civil Procedure, rr.
37.14(6), 57.03(1) and 59.06(2), Pastore v. Aviva Canada
Inc., 2012 ONCA 887, Mujagic v. Kamps, 2015 ONCA 360,
Meridian Credit Union Limited v. Baig, 2016 ONCA 942,
First Elgin Mills Developments Inc. v. Romandale Farms
Limited, 2015 ONCA 54, Antonyuk v. Antonyuk, 2022
ONCA 145, Midland Resources Holding Limited v. Shtaif,
2018 ONCA 743

Sigma Capital Management Group Inc. v.
Benzer Limited , 2023 ONCA
65

Keywords:Security for Costs, Legal Costs,
Settlement Funds, Contractual Interpretation, Bankruptcy and
Insolvency Act, R.S.C. 1985, c. B-3, Sattva Capital Corp.
v. Creston Moly Corp., 2014 SCC 53, Edelstein v.
Monteleone, 2017 ONSC 2717

Costanza v. Dejardins Financial
Security Life Assurance Company , 2023 ONCA
54

Keywords: Insurance, Duty to Disclose, Civil
Fraud, Evidence, Standard of Review, Insurance Act, R.S.O.
1990, c. I.8, s. 178, s. 183(1), ss. 183(3), s. 184(2), 189.1,
Evidence Act, R.S.O. 1990, c. E.23, s. 22.1, Gregory
v. Jolley (2001), 54 O.R. (3d) 481 (C.A.), Sagl v. Chubb
Insurance Company of Canada, 2009 ONCA 388, Palmer v. The
Queen, [1980] 1 S.C.R. 759, F.(K.) v. White (2001),
53 O.R. (3d) 391 (C.A.), Andreadis v. Pinto (2009), 98
O.R. (3d) 701 (S.C.J.), Bruno Appliance and Furniture, Inc. v.
Hryniak, 2014 SCC 8, Frohlich v. Ferraro, 2017 ONCA
978

Dorsey v. Canada (Attorney
General) , 2023 ONCA 64

Keywords: Constitutional Law, Habeas
Corpus, Deprivation of Liberty, Intervenor Status, Friend of
the Court, Public Importance, Habeas Corpus Act, R.S.O.
1990, c. H.1, Canadian Charter of Rights and Freedoms, ss.
7, 9, 10(c), and 12, Corrections and Conditional Release
Act, S.C. 1992, c. 20, ss. 28, 29, Rules of Civil
Procedure, r. 13, Dumas v. Leclerc Institute, [1986]
2 S.C.R. 459, Peel (Regional Municipality) v. Great Atlantic
& Pacific Co. of Canada Ltd. (1990), 74 O.R. (2d) 164
(C.A.), Chippewas of Nawash Unceded First Nation v. Canada
(AG), 2022 ONCA 755, Reference re Greenhouse Gas Pollution
Pricing Act, 2019 ONCA 29, Public Safety and Emergency
Preparedness) v. Chhina, 2019 SCC 29, Foster v. West,
2021 ONCA 263, Jones v. Tsige (2011), 106 O.R. (3d) 721
(C.A.), Huang v. Fraser Hillary’s Limited, 2018 ONCA
277, R. v. Doering, 2021 ONCA 924, Ontario (Natural
Resources and Forestry) v. South Bruce Peninsula (Town), 2021
ONCA 749

Rabin v. 2490918 Ontario
Inc. , 2023 ONCA 49

Keywords:Contracts, Commercial Leases,
Assignment of Lease, Consent to Assignment, Withholding Consent,
Reasonableness, Landlord and Tenant, Waiver, s. 23, Commercial
Tenancies Act, R.S.O. 1990, c. L.7, Iroquois Falls Power
Corporation v. Ontario Electricity Financial Corporation, 2016
ONCA 271, Labatt Brewing Company Limited v. NHL
Enterprises Canada, L.P., 2011 ONCA 511, Rodaro
v. Royal Bank of Canada (2002), 59 O.R. (3d) 74
(C.A.), Saskatchewan River Bungalows Ltd. v. Maritime Life
Assurance Co., [1994] 2 S.C.R. 490, 1455202 Ontario Inc.
v. Welbow Holdings Ltd. (2003), 33 B.L.R. (3d) 163 (Ont.
S.C.), 2197088 Ontario Limited v. Cadogan Corporation,
2018 ONSC 3070, 6791971 Canada Inc. v. Eli Messica,
2020 ONSC 1642, Zellers Inc. v. Brad-Jay Investments
Ltd., [2002] O.J. No. 4100 (Ont. S.C.), Jo-Emma
Restaurants Ltd. v. A. Merkur and Sons Ltd. (1989), 7
R.P.R. (2d) 298 (Ont. S.C.), Tradedge Inc. (Shoeless
Joe’s) v. Tri-Novo Group Inc., 84 R.P.R. (4th) 84 (Ont.
S.C.), Quickie Convenience Stores Corp. v. Parkland Fuel
Corporation, 2020 ONCA 453, Ruth
Sullivan, Sullivan on the Construction of Statutes,
7th ed. (Toronto: LexisNexis Canada, 2022)

National Industries Inc. v.
Kirkwood , 2023 ONCA 63

Keywords:Civil Procedure, Amending Pleadings,
Motion to Strike, Jurisdiction, Res Judicata, Issue
Estoppel, Abuse of Process, Plain and Obvious Test, Rules of
Civil Procedure, rr. 21.01, 25.11, 26.01, Toronto (City)
v. CUPE., Local 79, 2003 SCC 63, Canam Enterprises Inc. v.
Coles (2000), 51 O.R. (3d) 481 (C.A.), Danyluk v.
Ainsworth Technologies Inc., 2001 SCC 44, McIntosh v.
Parent, [1924] 4 D.L.R. 420 (Ont. C.A.), Transamerica Life
Canada Inc. v. ING Canada Inc. (2003), 68 O.R. (3d) 457
(C.A.), F.H. v. McDougall, 2008 SCC 53

Continental Currency Exchange Canada
Inc. v. Sprott , 2023 ONCA
61

Keywords:Solicitor-Client Privilege, Litigation
Privilege, Breach of Privilege, Stay of Proceedings, Presumed
Prejudice, Rebuttable Presumption, Celanese Canada Inc. v.
Murray Demolition Corp., 2006 SCC 36, MacDonald
Estate v. Martin, [1990] 3 S.C.R. 1235, Etco Financial
Corp. v. Ontario, [1999] O.J. No 3658 (S.C.), R. v.
Babos, 2014 SCC 16, Law Society of Saskatchewan v.
Abrametz, 2022 SCC 29, R. v. Bruce Power Inc., 2009
ONCA 573, Goodis v. Ontario (Ministry of Correctional
Services), 2006 SCC 31, O’Dea v. O’Dea, 2019
NLSC 206, Morneault v. Dynacorp Acquisition Ltd., 2006
ABQB 831, Dixon v. Lindsay, 2021 ONSC 1360

Short Civil Decisions

5000933 Ontario Inc. v. Mahmood ,
2023 ONCA 58

Keywords: Contracts, Real Property, Agreements
of Purchase and Sale of Land, Breach, O. Reg. 332/12 Ontario
Building Code

Bitaxis Estate v. Bitaxis, 2023
ONCA 66

Keywords: Wills and Estates, Certificates of
Appointment of Estate Trustee with a Will, Testamentary Capacity,
Civil Procedure, Notices of Objection, Neuberger v. York,
2016 ONCA 191, Johnson v. Johnson, 2022 ONCA 682

Austin v. House , 2023 ONCA
55

Keywords: Family Law, Custody and Access,
Parenting Time, Decision-Making Responsibility, Variation, Civil
Procedure, Motions to Change, s. 30 Assessment Motions, Costs,
Appeals, Security for Costs, Summary Judgment, Vexatious Litigants,
Fresh Evidence, Children’s Law Reform Act, R.S.O.
1990, c. C.12., s.30, Courts of Justice Act, R.S.O. 1990,
c. C.43, s. 140, Palmer v. The Queen, [1980] 1 S.C.R. 759,
Barendregt v. Grebliunas, 2022 SCC 22, 469 D.L.R. (4th)
1

Lalande v. Lalande, 2023 ONCA
68

Keywords: Family Law, Financial Disclosure,
Duty to Disclose, Non-Compliance, Motion to Strike, Roberts v.
Roberts, 2015 ONCA 450, Family Law Rules, O. Reg. 114/99,
r.1(8).

Hategan v. Frederiksen, 2023 ONCA
57

Keywords: Perfecting Appeal, Extension of Time,
Delay, Setting aside Registrar’s Dismissal, Prejudice,
Oliveira v. Oliveira, 2022 ONCA 218, Issai v.
Rosenzweig, 2011 ONCA 112

Ducharme v. Thibodeau, 2023 ONCA
60

Keywords: Wills and Estate, Notice of
Objection, Withdrawal of Notice of Objection, Standing, Costs,
Substantial Indemnity.

CIVIL DECISIONS

Corrigan v. Ontario , 2023 ONCA
39

[Doherty, Zarnett and Sossin JJ.A]

Counsel:

H. Mackay and H. McIvor, for the appellant

K.C., acting in person

facts:

In May 2020, the respondent commenced an action against the
Crown, including a claim for damages. The respondent did not comply
with the terms of s. 18(1) of the Crown Liability and Proceedings
Act, 2019, S.O. 2019, c. 7 (“CLPA”), which provided that
no proceeding that includes a claim for damages may be brought
against the Crown unless, at least 60 days before the commencement
of the proceeding, the claimant serves a specified form of notice
on the Crown. S. 18(6) of the CLPA provided that an action
commenced without complying with the notice requirements is a
nullity “from the time the proceeding is brought”.

In July 2020, Crown counsel requested the respondent discontinue
her action due to non-compliance, but the respondent could start a
new action 60 days after the discontinuance of the existing one, as
the Crown would treat the service of the claim issued in May 2020
as the prior notice required under the CLPA. In August 2021, the
respondent wrote to Crown counsel advising that she had brought a
motion for default judgment and had been instructed to serve the
motion on the Crown. Crown counsel advised that a motion to strike
the claim would be brought at the same time as the motion for
default judgment.

The motion judge found that the respondent failed to comply with
the CLPA requirements, but dismissed the motion on the ground that
the Crown had delayed in bringing its motion. The Crown appealed
from the dismissal of its motion to have the respondent’s
statement of claim struck out as a nullity due to the failure of
the respondent to comply with provisions of the CLPA.

issues:

Did the motion judge err in not striking the action?

holding:

Appeal allowed.

reasoning:

Yes.

Prior to the enactment of the CLPA, s. 7(1) of the Proceedings
Against the Crown Act, provided that no action could be brought
against the Crown unless prior notice of 60 days was given. It was
consistently held under that legislation that proper notice was a
precondition to a claim in damages against the Crown, that this
requirement could not be abridged, and that an action commenced
without proper prior notice was a nullity. It was also held that
the requirement could not be waived.

The Court stated that the same approach should be followed under
the CLPA. The Court found the motion judge’s conclusion that
the Crown was not entitled to have the action struck as a nullity
for delay rewrites the legislation. It conditions the Crown’s
right to have the action treated as a nullity on the timing of the
motion, a condition not found in the text. The Court further stated
that this reasoning introduces a notion of waiver by delay that is
inconsistent with the judicial interpretation of the prior
legislation, which held that its requirements could not be abridged
or waived.

The respondent argued that the motion judge was right to dismiss
the Crown’s motion because she had noted the Crown in default,
and r. 19.02(1)(b) of the Rules of Civil Procedure prevents a
defendant who has been noted from bringing a motion without leave.
The Court rejected this argument. The procedural rule relied on by
the respondent cannot trump the clear effect of the CLPA provision
that required the Court to treat the action as a nullity. Moreover,
s. 25 of the CLPA states that the Crown may not be noted in default
without leave of the court, obtained on a motion made with notice
to the Crown, and there was no evidence such leave was
obtained.

The respondent also argued that an effect of the noting in default
was that the defendant was deemed to admit the allegations in the
claim. Since r. 21.01(1)(a), under which the Crown moved, is
available only for questions of law that arise from the pleadings,
and the only pleading was the claim, there was no basis to consider
facts surrounding the failure to give notice. The Court disagreed,
stating that a motion under r. 21.01(1)(a) permits evidence to be
admitted at the discretion of the court. The Court concluded that
the motion judge properly exercised his discretion to consider such
evidence.

The respondent also argued that estoppel should operate to prevent
the Crown from asserting that the action is a nullity. The
respondent had brought an application to the Human Rights Tribunal
of Ontario (“HRTO”) which was dismissed because of the
existence of the Superior Court action. Section 34(11) of the Human
Rights Code, bars an HRTO application where there is an existing
civil action dealing with the same alleged rights infringement. The
respondent argued that the Crown got the benefit of the existence
of the action for the purpose of the dismissal of the HRTO
application and should be estopped from claiming the action was a
nullity.

The Court was not satisfied that estoppel could have any effect on
the operation of the CLPA given s. 18(6). Even assuming it could
operate, the Court was not satisfied it would operate here. The
motion judge made no findings that the respondent changed her
position based on anything the Crown said to her or to anyone else,
and he found the Crown acted in good faith throughout. The Court
stated that the record was clear that the Crown unequivocally told
the respondent that it considered the existing action against it to
be a nullity. The Court noted that it was the respondent who not
only persisted in maintaining the action but also commenced
concurrent HRTO proceedings which created the overlap in
proceedings. The Court struck out the statement of claim as against
the Crown as a nullity.

Wong v. Li, 2023 ONCA 42

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

Counsel:

O.C. Wong, acting in person

D. Lawson, for the respondents

Keywords:Torts, Fraud, Misrepresentation,
Breach of Fiduciary Duty, Law Society of Upper Canada v. Oscar
Choi-Wah Wong, 2012 ONLSHP 0180, Law Society of Upper
Canada v. Oscar Choi-Wah Wong, 2013 ONLSAP 0031, Bruno
Appliance and Furniture, Inc. v. Hryniak, 2014 SCC 8,
F.H. v. McDougall, 2008 SCC 53, R. v. G.F., 2021
SCC 20, R. v. Dinardo, 2008 SCC 24

facts:

The appellant OW is a real estate lawyer and the respondents JL
and JY worked for OW as real estate clerks. The respondent RH is
JL’s husband. From about 2003 to 2010, both JL and JY worked
for OW and were paid a percentage of fees collected from each real
estate transaction. In 2007, the Law Society of Upper Canada
(“Law Society”), now the Law Society of Ontario, began
investigating OW’s practice and commenced an application
against OW based on his failure to supervise 24 transactions
involving 12 properties. The transactions contained some
irregularities, including a failure to advise lending institutions
of financing details and a failure to obtain consent when acting
for the lender, vendor, and purchaser on the same
transaction.

OW admitted engaging in professional misconduct, including a
failure to adequately supervise his staff, and the Law Society
Hearing Panel (“Hearing Panel”) initially suspended OW
for four months and ordered $10,000 in costs. Upon the Law
Society’s appeal, the costs award was increased to $50,000 but
the Hearing Panel dismissed the Law Society’s appeal on the
length of the OW’s suspension, finding that although there was
an egregious degree of abdication, which was systemic and
troubling, the abdication was not total.

The appellant commenced an action against JL, JY, and RH alleging
fraud, deceit/fraudulent misrepresentation, conspiracy, and breach
of fiduciary duty relating to 14 transactions pertaining to 6
properties. The appellant alleged that the respondents used his law
office as a platform to promote and facilitate fraudulent schemes
and conspiracies.

At trial, the appellant had no independent recollection of the
events concerning the processing of the impugned transactions. The
respondents presented their interpretation of events and claimed
they had done nothing wrong. The trial judge found for the
respondents and dismissed all OW’s claims against JL, JY, and
RH.

issues:

(1) Did the trial judge err in his application of the test for
civil fraud?

(2) Did the trial judge err in failing to adequately address the
respondent JL’s credibility?

(3) Did the trial judge err in not finding that the appellant was
wronged by JL on the basis of equitable fraud?

holding:

Appeal dismissed.

reasoning:

(1) No.

The Court held that the trial judge correctly applied the test for
civil fraud as set out in Bruno Appliance and Furniture, Inc. v.
Hryniak after reviewing the transactions relating to the six
properties in great detail. The elements of civil fraud are: (i) a
false representation made by the defendant; (ii) some level of
knowledge (or recklessness) of the representation on the part of
the defendant; (iii) the false representation caused the plaintiff
to act; and (iv) the plaintiff’s actions resulted in a
loss.

The Court noted that the trial judge found that some of the
respondents’ actions were disconcerting and their goal appeared
to be inducing lenders to advance funds without full awareness of
the circumstances; however, no false statements or
misrepresentations were made to OW. There was no evidence that the
respondent JL failed to respond to inquiries, lied, failed to
provide information, or provided half-truths to OW. In two of the
more problematic transactions, the respondent RH provided loans to
a purchaser to assist with the purchaser’s deposit obligations
and there was a notation in the client’s ledger that the loan
was a deposit from the purchaser’s lawyer. Though problematic,
there was no evidence connecting the loan to JL and no evidence
that she made a false misrepresentation pertaining to the
transactions and thus the claim failed on this basis.

The Court held that although the transactions each had questionable
features, the trial judge found no direct evidence that the
appellant was defrauded by the respondents and the appellant failed
to identify an overriding and palpable error in the trial
judge’s analysis.

(2) No.

The Court held that although the trial judge could have provided
more detailed reasons on his acceptance of JL’s evidence,
insufficiency in this regard did not compromise the Court’s
ability to meaningfully review the trial judge’s conclusions. A
trial judge’s credibility findings are owed considerable
deference on appeal and any deficiencies in respect of a trial
judge’s credibility findings will rarely merit appellate
intervention.

(3) No.

The Court upheld the trial judge’s finding that JL did not
engage in unconscionable conduct related to the appellant. The
Court’s holding on this issue was based on the appellant’s
failure to identify any legal error or a palpable and overriding
error relating to the claim that the trial judge erred in not
finding that JL engaged in equitable fraud as against OW.

Benbella v. The National Dental Examining
Board of Canada, 2023 ONCA 56

[Gillese, Tulloch and Roberts JJ.A.]

Counsel:

Y. Hameed, for the appellant

M. Song and S. Coutu, for the respondent

facts:

The appellant was a dental school graduate. He was required to
pass the certification process administered by the respondent, the
National Dental Examining Board of Canada, to qualify for admission
to the profession of dentistry in Canada. This certification
process had two components: a written exam and an Objective
Structured Clinical Examination (“OSCE”).

The appellant attempted the certification process in November 2018.
He passed the OSCE but failed the written exam. He re-wrote the
written exam in March 2019 but again failed.

The respondent’s by-laws entitled the appellant to have his
written exams manually remarked. They were, but the results did not
change. The appellant then sought to appeal the results of his
written exam. He cited the respondent’s by-laws in support of
his claim that he was entitled to a “Special Appeal”
before the respondent’s Appeal Committee.

The “Special Appeal” rule provided that “The
Appeals Committee has the power to establish procedures for the
conduct of Appeals or Special Appeals. In making a determination, a
panel will determine that the Appeal be upheld or dismissed, or
make such other determinations that it deems reasonable and
just.” The respondent denied the appellant’s request for a
Special Appeal. It advised him that the only appeal available to
him was the manual rescoring, which had already been done for both
of his written exams. In response, the appellant commenced legal
action against the respondent. The respondent filed a motion to
strike the application, which was subsequently granted. The motion
judge ordered that the application be struck in its entirety
pursuant to r. 21.01(1)(b) of the Rules of Civil Procedure
as it disclosed no reasonable cause of action.

issues:

Did the trial judge err in granting a motion to strike?

holding:

Appeal dismissed.

reasoning:

No.

The Court confirmed that the standard of review is correctness and
held that the motion judge correctly found it was plain and obvious
that the appellant’s application disclosed no reasonable cause
of action.

The Court determined that the provisions of the by-laws must be
read as a whole. The Court found that the appeal mechanisms are
clearly stated in the by-laws. Nowhere within these provisions were
there any stated substantive grounds of appeal from the failure of
a written examination.

Accordingly, the Court agreed with the interpretation of the
motion judge that when the by-laws are read as a whole, the appeal
provisions must be distinguished from the clearly procedural
“Special Appeals” provisions, which led to the ultimate
conclusion that there is no right to a “Special Appeal”.
Thus, the Court held that there was no substantive right of appeal
and the injunctive relief sought was rightly dismissed.

Ali v. Peel (Regional Municipality), 2023
ONCA 41

[Zarnett, Coroza and Favreau JJ.A.]]

Counsel:

A. Rosenbluth and R. Thompson, for the appellant

J. Bruce, for the respondent

facts:

The appellant appealed an order of the Divisional Court
dismissing her application for judicial review of a decision by the
respondent, the Regional Municipality of Peel (the
“Region”). In its decision, the Region denied the
appellant’s request to be given special priority status on the
waitlist for subsidized housing in Peel.

The appellant, who worked as a live-in caregiver, had sought
special priority status because her employer had abused her. The
appellant relied on a regulatory provision, made under the Housing
Services Act, 2011, that gave special priority status for
subsidized housing to people who have been abused. The provision
defined abuse as including controlling behaviour, and included in
the list of possible abusers those on whom people applying for
subsidized housing are financially dependent.

The Region found that the appellant met the criteria for
rent-geared-to-income housing, but denied her request to be placed
on the special priority status list. The Region denied the
appellant’s special priority status because she was not in a
familial relationship with her abuser and because her economic
dependence on her abuser ended with the end of the employment
relationship. The Divisional Court held that the Region’s
decision was reasonable because it was consistent with the relevant
statutory scheme. The Divisional Court also noted that the
Region’s mandate was to allocate scarce resources amongst
people with competing interests.

issues:

(1) What is the appropriate standard of review?

(2) Was the Region’s decision reasonable?

(3) Did the divisional Court err in inserting its own rationale for
denying the appellants request to be placed on the special priority
list?

holding:

Appeal dismissed.

reasoning:

(1) The Reasonableness Standard is appropriate.

On an appeal from a decision of the Divisional Court on judicial
review, the Court stated that it was to decide whether the
Divisional Court identified the appropriate standard of review and
applied it correctly. The Court held that the Divisional Court
applied a reasonableness standard of review to the Region’s
decision. The Court, citing Canada (Minister of Citizenship and
Immigration) v Vavilov, held that there was a presumption that
the reasonableness standard applied unless a statute provided
otherwise or a correctness standard is required by the rule of law.
The Court noted no exceptions applied and the reasonableness
standard was appropriate.

(2) Yes.

Prior to determining whether the Region’s decision was
reasonable, the Court reviewed the statutory scheme under the
Housing Services Act. The Court found that section 47(1) of the
Housing Services Act required the service manager to create “a
system for selecting households from those waiting for
rent-geared-to-income assistance in the housing projects in the
service manager’s service area.” Section 47(2) of the Act
specified that the system is to include “priority rules for
households waiting for rent-geared-to-income
assistance”.

The Court found that the Regulation sets out the provincial
eligibility rules for rent-geared-to income, including for
placement on the special priority list. Section 54(1) of the
Regulation specified that:(1) A household is eligible to be
included in the special priority household category if,

(a) a member of the household has been abused by another
individual;

(b) the abusing individual is or was living with the abused member
or is sponsoring the abused member as an immigrant; and

(c) the abused member intends to live permanently apart from the
abusing individual.

The Court noted that Section 1(2) prescribed the list of people who
can be considered as abusers, and includes a person on whom the
applicant is “financially dependent”:

For the purpose of the definition of “abuse” in
subsection (1), abuse is done by any of the following persons
against an individual: […]

3. A person on whom the individual is emotionally, physically or
financially dependent. [Emphasis added.]

The Court stated that section 54(2) of the Regulation set out the
conditions under which a person no longer living with an abuser can
apply to be placed on the special priority list. This included
where the application was made within three months of the person no
longer living with the abuser.

The appellant argued that the Region’s decision was
unreasonable because 1) the Region improperly stated that the
special priority list was limited to familial relationships; and 2)
there was no basis for excluding employer/employee relationships
from the category of financial dependence in the definition of
abuser in s. 1(2) of the Regulation. The Court rejected these
arguments.

First, the Court held that it was evident that the Region’s
reason for rejecting the appellant’s request to be placed on
the special priority list was not restricted to the fact that she
was not in a familial relationship with her abuser. Rather, the
Court held that the Region also rejected the appellant’s
request because it decided that employer/employee relationships are
not the types of relationships that are meant to be given special
priority status. The Court noted that in both the original decision
and the appeal decision, the Region did refer to the appellant not
being in a familial relationship with her abuser. The Court found
that the Region had explained that the appellant was in an
employee/employer relationship with him, and that this disqualified
her from being placed on the special priority list.

The Court did not accept the appellant’s argument that the
Region’s own policy improperly limits inclusion on the special
priority list to people in a familial relationship with their
abuser. While the title of the Region’s policy refers to
“victims of family violence”, the Court held that the
policy as a whole referred to all categories of potential abusers
listed in s. 1(2) of the Regulation and did not restrict
eligibility to circumstances where the abuser and applicant are in
a familial relationship.

Second, the Court rejected the appellant’s argument that the
reference to financial dependence in s. 1(2) of the Regulation
included employer/employee relationships. The Court held that in
making this argument, the appellant improperly invited the Court to
undertake its own interpretation of the Regulation. The Court noted
that it was not the task of the Court to decide how the terms
“financially dependent” should be interpreted and
applied, but rather whether the Region’s interpretation of
those terms was reasonable in the context of the legislative scheme
and the facts of the case.

The Court held that the terms “financially dependent”
could not be considered in isolation but must be reviewed in the
context of the legislative scheme as a whole. The Region was
responsible for administering subsidized housing, including the
special priority list. The Court held that the Region understood
the historical context and purpose of special priority status.
Thus, the Court found that it was reasonable for the Region to
decide that an employee/employer relationship was not the type of
financial dependence contemplated by the Regulation which would
allow for placement on the special priority list.

(3) No.

The appellant argued that the Divisional Court improperly amplified
the Region’s decision by providing a rationale for the decision
that the Region itself did not provide.

The Court held that the Court’s role is to step into the shoes
of the Divisional Court and review whether the Region’s
decision was reasonable. In light of that, the Court had no
concerns with the Divisional Court’s decision and found that it
correctly applied the reasonableness standard of review in the
circumstances of the case. The Court held that the Divisional Court
did not give a different rationale or arrive at the outcome through
a different analytical route than the Region. Rather, the Court
found that the Divisional Court gave legislative and factual
context to the Region’s reasons for denying the appellant’s
request.

Horani v. Manulife Financial Corporation,
2023 ONCA 51

[Zarnett, Thorburn and Copeland JJ.A]

Counsel:

G.D.E. Adair, for the appellants

D.A. Zuber and N. Searles, for the respondent

facts:

The appellant tripped and fell at his workplace on August 5,
2014. The Statement of Claim was issued on November 20, 2015, and
amended on January 19, 2017 to name a litigation guardian. The
action was set down for trial on April 27, 2018. Pretrial
conferences were held on January 7, 2021 and March 22, 2022. On
both occasions, counsel for the parties advised the pre-trial judge
that “pleadings were in order”. Due to the COVID-19
pandemic, trial was pushed from March 2021 to May 16, 2022.

On April 1, 2022, roughly six and a half years after the action
was commenced, and six weeks before the 32-day trial was to
commence, the appellants sought leave to (1) add a claim for
punitive damages in the amount of $2 million, and (2) increase the
amount of damages claimed from $4 million to $7 million pursuant to
Rule 48.04(1) of the Rules of Civil Procedure. The motion judge
dismissed the appellants’ request, but the trial date was lost
due to the appeal.

The appellant submitted that (1) the motion judge’s order
was a final order that entitled them to bring their appeal to the
Court, and that (2) the motion judge erred in law as “there
was neither prejudice nor presumed prejudice causally related or
flowing from the proposed amendment” that was non-compensable,
as any delay or extra work that would result from the amendment
were matters compensable in costs.

issues:

(1) Was the decision of the motion judge a final order?

(2) Did the motion judge err in refusing leave to amend the
appellants’ pleadings?

holding:

Appeal dismissed.

reasoning:

(1) Yes.

The Court stated that an appeal of the motion judge’s
decision was properly before the Court because the order finally
disposed of the appellants’ substantive right to claim punitive
damages. In particular, orders refusing to permit a party to amend
a pleading to advance an additional substantive claim or defence
are final orders.

(2) No.

The Court stated that rule 48.04(1) provides that a party who
has set an action down for trial shall not initiate or continue any
motion or discovery without leave of the court. Under Rule 26.01,
the court shall grant leave to amend a pleading unless it would
result in prejudice that “could not be compensated for by
costs or an adjournment”. However, after an action has been
set down for trial, some courts have required the moving party to
show “a substantial or unexpected change in circumstances such
that a refusal to make an order under Rule 48.04(1) would be
manifestly unjust”. Others courts have determined that leave
be granted if the moving party can demonstrate that “the
interlocutory step is necessary in the interests of justice”.
Without deciding which test is correct, the Court held that the
appeal must be dismissed because the motion judge properly
determined that allowing the appellants’ proposed amendment
would result in non-compensable prejudice.

The Court noted that, while the onus to prove actual prejudice
lies with the responding party, the onus to rebut presumed
prejudice arising from delay lies with the moving party. At some
point, the delay will be so lengthy and the justification so
inadequate that prejudice will be presumed. The motion judge made
several findings in this regard, including: (1) the new claim
included new facts and legal arguments, (2) responding to the new
claim would require further production, discovery, and preparation,
and (3) the appellants provided no explanation for the inordinate
delay or any change in circumstances since the trial record was
served. Based on these findings, the motion judge held that
prejudice was presumed and that the appellants failed to rebut this
presumption.

The Court found that the motion judge did not err in her
analysis and the appellants offered no clear reason for the delay
at the motion and no explanation was offered on appeal other than
counsel’s inattention. Further, the Court held that the motion
judge correctly found that the prejudice was causally connected to
the proposed amendment and was not compensable in costs because it
would change the respondent’s litigation strategy and
potentially jeopardize an already delayed trial date. Finally, the
Court noted that, although the motion judge did permit the
amendment to the amount of regular damages, she offered a balanced
approach and there was no evidence that she acted arbitrarily or
capriciously in exercising her discretion to deny leave to bring a
motion to add a claim for punitive damages.

MacKenzie v. Ottawa Community Housing
Corporation, 2023 ONCA 43

[Zarnett, Coroza and Favreau JJ.A.]

Counsel:

L. Bisgould, S. Chapman and A. Rosenbluth, for the appellant

G. Langlais, for the respondent City of Ottawa

G. Cormier, for the respondent Ottawa Community Housing
Corporation

J. Esmonde, D. Bisnar and A. Hanif, for the intervener Canadian
Centre for Housing Rights (formerly the Centre for Equality Rights
in Accommodation)

facts:

The appellant, CM, was eligible for rent-geared-to-oncome
pursuant to the Housing Services Act (the “Act”) and
occupied a unit administered by the respondent, Ottawa Community
Housing Corporation, with his two daughters. Recipients of the
rent-geared-to-income subsidy are subject to annual review to
ensure their continued eligibility, one requirement for eligibility
is that recipients must report changes to their household
composition within 31 days of the change and must not be absent
from their unit for more than 60 consecutive days or 90 days in a
year.

In 2018, CM faced criminal charges and his bail conditions
required him to live with his surety, who was his mother, and
prohibited him from having contact with his two daughters or
residing or being alone with anyone under 16 years of age. CM’s
daughters were placed in the case of the Children’s Aid
Society. CM did not inform the respondents of his bail conditions
and the resulting household changes.

In 2019, the respondents terminated CM’s
rent-geared-to-income subsidy because he failed to report the
change to his household composition within 31 days and because his
household had been absent from the unit for more than 60
consecutive days.

CM requested a review of the respondents’ decision and a
hearing was held before a three-member panel, which dismissed
CM’s review request (the “Review Decision”). In the
Review Decision, the Review Panel found that CM failed to report
the household change within the required 31 days and was absent
from the unit for more than 60 consecutive days, contrary to the
eligibility requirements. CM argued that the respondents’
decision was not reasonable because he still resided in the unit
during the day but spent the nights at his surety’s house, and
further that the removal of the children was only temporary. The
Panel concluded that visiting his unit and storing his food and
belongings there did not amount to living there as CM was legally
bound to reside at his surety’s residence. The Panel further
held that a household occupying a unit for non-residential purposes
is contrary to the purpose of the legislation, which is to provide
rent subsidies to eligible households. Finally, there were no
exceptional circumstances that would have justified CM’s
failure to report the change in his household composition or his
extended absence from the unit. As a result, CM was required to pay
full rent for his unit which, at the time of the decision, was an
increase from $222 to $1,279 per month.

CM appealed the Review Decision to the Divisional Court, which
dismissed CM’s application for judicial review, finding that
the respondents’ decision was reasonable as it was based on the
respondents’ interpretation of the relevant statutory and
regulatory provisions and the application of those provisions to
CM’s circumstances.

issues:

(1) What is the applicable standard of review?

(2) What is the statutory and regulatory scheme?

(3) Was the City respondents’ finding that CM failed to report
the change in his household’s composition reasonable?

(4) Was the respondents’ finding that CM was absent from the
unit reasonable?

(5) Was the respondents’ finding that there were no extenuating
circumstances reasonable?

(6) What was the impact of the submissions made by the
intervener?

holding:

Appeal dismissed.

reasoning:

(1)

The Court, citing Canada v. Vavilov, held that the
appropriate standard of review was a reasonableness standard of
review. On an appeal from a Divisional Court decision, the Court
must conduct a de novo review of the administrative decision
maker’s decision and step into the shoes of the Divisional
Court. In doing so, there is a presumption that the reasonableness
standard of review applies unless a statute provides otherwise or a
correctness standard is required by the rule of law. CM and the
respondents agreed that no such exceptions apply. The Court held
that the Divisional Court identified the appropriate standard of
review of reasonableness.

(2)

The Court stated that Part V of the Act addresses the
rent-geared-to-income assistance regime in Ontario. Pursuant to s.
43(1) of the Act, service managers are responsible for establishing
“occupancy standards for determining the size and type of unit
permissible for a household receiving rent-geared-to-income
assistance.” Section 46(1) of the Act also requires service
managers to determine the size and type of unit an eligible
household is entitled to occupy. Section 52(1) of the Act requires
service managers to conduct periodic reviews to ensure that
households receiving rent-geared-to-income assistance remain
eligible for the assistance. Section 53 requires service managers
to provide written notice when they determine that a household is
no longer eligible for rent-geared-to-income assistance. Further,
Ontario Regulation 367/11, under the Act sets out the provincial
eligibility rules for receiving and continuing to receive
rent-geared-to-income assistance (the “Regulation”).

(3) Yes.

The Court held that the respondent City’s determination that CM
failed to report the change in his household composition was
reasonable. CM argued that he did not report the change because he
expected his daughters to be returned to him at the conclusion of
the criminal proceedings and therefore that the change was
temporary.

Section 28(1) of the Regulation provides that a household ceased
to be eligible for rent-geared-to-income assistance if the
household fails to notify the service manager of a change described
in section 28(2), a change relevant to a household’s
eligibility. Pursuant to section 28(3), this change must be
reported within 30 days and the respondents’ rules state that a
notice of change must be provided within 31 days.

The Court noted that a change in household composition is
significant because of the amount of assistance each household
receives is dependent in part on the number of people in the
household. There was no dispute that CM’s children stopped
living with him in June 2018 due to his bail conditions and that he
did not notify the respondents of this change. However, CM argued
that the temporary nature of the change meant that he was not
required to report it. The Court held that the respondent
City’s decision was reasonable as its reasoning and conclusion
was logical and accords with the applicable factual and legal
context of the case. There was no information as to whether or when
the children would return to live with CM, as such the Court found
it was reasonable for the respondent City to treat this as a change
CM was required to report.

(4) Yes.

The Court held that the respondent City’s determination of the
meaning of “absent” in the rule that a resident must not
be absent from their unit for 60 consecutive days or 90 days in a
year was reasonable. CM argued that it was unreasonable for the
City to find that he was absent from the unit given that he was
present in the home throughout the day, and used the unit for all
aspects of his daily life except for sleeping.

The Court held that the respondent City considered these facts
but found that it did not amount to occupying the unit for
residential purposes, which is what the rent-geared-to-income
assistance is meant to assist with. The Court found this to be a
reasonable interpretation as the respondent City considered the
purpose of the legislative scheme and the factual context that
includes: (1) providing housing assistance to people who have a low
income and do not have another residence; and (2) a long waiting
list for a limited number of available units.

The Court held that the benefits conferred under the Act are
different from those conferred by other types of benefit conferring
legislation. Due to the limited number of subsidies available for
public housing and limited number of public housing units, allowing
CM to maintain his unit for an extended period of time while unable
to reside in it deprives another eligible household from residing
at the unit. The Court further held that the respondents’ role
is to make decisions about eligibility and continued eligibility in
the context of these competing interests. As such, the Court found
that the respondent City’s interpretation of the word
“absent” was reasonable, given the circumstances.

(5) Yes.

The Court held that the respondent city’s finding that there
were no extenuating circumstances was reasonable because it
considered whether there were extenuating circumstances and because
CM did not provide any information that would give rise to
extenuating circumstances. The Court further held that it was
evident from the decision that the respondent City was aware of
CM’s criminal proceedings and the impact on his children, but
it was entitled to conclude that these were not extenuating
circumstances that would justify waiving the notice requirement.
The Court stated that the decision was not unreasonable and was
owed deference.

The Court further found that the presence of extenuating
circumstances would have only impacted the issue of notice and not
the issue of CM’s absence from the unit and, in any event,
CM’s absence from the unit for more than the prescribed amount
of time would justify terminating his rent-geared-to-income
assistance.

(6)

The Court rejected the intervener’s arguments. The Court
reiterated that its role is not to interpret the Act afresh, but to
decide whether the respondents’ decisions are reasonable. The
respondents arrived at a defensible interpretation of the Act, and
the decisions were justified based on the factual circumstances of
the case. The Court found that the respondents’ decisions were
reasonable and the international legal instruments relied on by the
intervener did not affect that conclusion.

McGrath v. Joy, 2023 ONCA
46

[Gillese, Trotter and Nordheimer JJ.A.]

Counsel:

O. Niedzviecki, for the moving party D.R.

K.P. Nagrani, for the responding party M.R.M.

facts:

JPJ died by suicide on July 13, 2019. He left a signed two-page
note, wholly in his own handwriting, in the pocket of his shorts
(the “Suicide Note”). JPJ had previously made two wills:
one in 2014 and another in 2016.

MRM is JPJ’s stepson and one of two named beneficiaries in
the Suicide Note. MRM brought an application to have the Suicide
Note declared JPJ’s valid will and admitted to probate (the
“Application”).

DR was a beneficiary under the 2016 will. Under its terms, DR
was to receive JPJ’s shares in two corporations. DR along with
JPJ’s wife, opposed the Application on the basis that MRM had
failed to prove that JPJ had testamentary capacity to make a will
when he wrote the Suicide Note. DR also took the position that, if
the Suicide Note was valid, it should be considered to be a codicil
to the 2016 will and not affect his inheritance.

The application judge noted that there was no dispute that the
Suicide Note met the requirements in s. 6 of the Succession Law
Reform Act (the “SLRA”), for a valid holographic
will – the only issue was whether JPJ had testamentary
capacity to make a will when he wrote the Suicide Note. Based
largely on JPJ’s consumption of alcohol and drugs the day
before his death, the application judge held that MRM, as the
propounder of the will, had not met the evidentiary burden of
establishing JPJ’s testamentary capacity when he wrote the
Suicide Note and dismissed the Application. Consequently, the
application judge said, it was not necessary that he consider
DR’s alternate submission that the Suicide Note should be
considered a codicil to the 2016 will.

MRM appealed, raising two issues: did the application judge err
in (1) determining that JPJ lacked testamentary capacity when he
wrote the Suicide Note; and (2) his costs orders.

DR argued that, if the Suicide Note were found to be valid, it was
“more correctly characterized” as a codicil to the 2016
will. The Court allowed the appeal and held that JPJ had
testamentary capacity because he had a “sound disposing
mind” when he wrote the Suicide Note: he understood the nature
and effect of a will; he recollected the nature and extent of his
property; he understood the extent of what he was giving under the
will; and, he understood the nature of the claims that might be
brought by a person excluded from the will.

Before an order reflecting the Court’s decision had been taken
out, DR brought a Motion asking the Court to re-open the appeal and
re-hear submissions on whether the Suicide Note was a codicil to
the 2016 will, rather than JPJ’s will. He acknowledged that he
had taken the position on the appeal that the Suicide Note could be
a codicil and was “obviously not intending to disinherit
DR” but did so without reference to statute and case law
supporting his position. He also contended that para. 88 of the
reasons implied there is no legal authority for a testator to
create a handwritten codicil and, thus, has thrown this area of law
into disarray.

issues:

(1) Does the Court have jurisdiction to reconsider its decision
before a formal order is issued?

(2) What is the test to meet to reconsider a decision?

(3) Did DR meet the test for a reconsideration of the decision?

holding:

Motion dismissed.

reasoning:

(1) Yes.

The Court held that it had jurisdiction to reconsider its decision
before a formal order had been taken out and, accordingly, the
Court was not functus officio.

(2)

The Court stated that the party seeking to re-open an appeal after
the appeal decision has been rendered faces a “high
hurdle”. Further, the Court stated that it will re-open an
appeal prior to the entering of an order only in rare circumstance
where it is in the interests of justice to withdraw the reasons of
the Court and re-hear the case on the merits.

(3) No.

The Court found that DR had not raised the kind of “rare
circumstance” where the interests of justice would require the
Court to withdraw its reasons and re-hear the issue of whether the
Suicide Note was JPJ’s final will or a codicil to his 2016
will. The Court stated that DR had argued this issue on appeal and
the Court had already expressly addressed the matter in its
reasons.

Further, the Court held it would not be in the interests of
justice to permit the matter to be re-argued. DR argued that para.
88 of the Court’s reasons can be read as implying that,
pursuant to s. 6 of the SLRA, a testator cannot make a holograph
codicil. The Court clarified that para. 88, read in context, did
not do this. The Court stated that in addressing whether the
Suicide Note was more correctly characterized as a codicil, the
Court had already determined that the Suicide Note was JPJ’s
valid will. Having left “everything” to two named
beneficiaries by means of the Suicide Note, the Court determined
that the Suicide Note could not be construed as a codicil to the
2016 will. However, the Court clarified, that it does not mean that
a holograph will could never be construed to be a codicil pursuant
to s. 6 of the SLRA.

Sigma Capital Management Group Inc. v. Benzer
Limited, 2023 ONCA 65

[MacPherson, Hoy and Coroza JJ.A.]

Counsel:

M. Doyle and S. Jamshidimoghadam, for the appellants

C. Statham, for the respondent

facts:

The appellants, Benzer Ltd. (“Benzer”) and its
controlling shareholder, R. M., were ordered to distribute funds
held in trust by Friedman Law Professional Corporation
(“Friedman”) following the settlement of two actions. The
funds were paid to Freidman following the settlement of two related
actions against KPMG for professional negligence: one commenced by
the appellants (the “Benzer Action”), and the second by
Komtech Inc. (“Komtech” and the “Komtech
Action”). The two actions were consolidated.

Shortly before commencing the Komtech Action, Komtech had filed
a notice of intention to make a proposal under the Bankruptcy and
Insolvency Act. In connection with its insolvency, Komtech entered
into an asset purchase agreement with 2279591 Ontario Inc.
(“227”) with respect to Komtech’s assets, including
the Komtech Action. 227 subsequently assigned the Komtech Action to
Sigma Capital Management Group Inc. (“Sigma”) in trust
for the shareholders of Komtech and Sigma agreed “to assume
all of the costs and expenses pertaining to [the Komtech Action]
except for $200,000 of such costs and expenses, which shall be paid
for by [227]” pursuant to s. 2 of an agreement dated April 26,
2011 (the “Assignment Agreement”).

Section 2 of the Assignment Agreement further provided that
“[f]or greater certainty at no time shall [227] have any
liability for payment of any costs and expenses including legal
fees and disbursements exceeding the sum of $200,000, Plus Taxes,
if any.”

The Assignment Agreement also provided, in s. 3, how 227 was to
be compensated for undertaking this funding obligation, where it
stated: “… to a maximum of the amount of the legal costs
awarded, if any, and (ii) in addition to the amount referred to in
paragraph 3(i), to pay to [227] 15% of the net amounts recovered
from, in connection with or out of, the [Komtech] Action, minus the
legal costs awarded to [Sigma].”

In a second agreement (the “Assumption Agreement”),
Benzer assumed 227’s funding obligation under the Assignment
Agreement in consideration of the assignment to it of 227’s
rights under s. 3 of the Assignment Agreement.

In October 2016, KPMG moved for security for costs against Sigma
and Sigma was ordered to pay, and paid, $250,000 into court in
respect of the Komtech Action. It raised this amount from its
shareholders. The appellants were not ordered to pay security for
costs in respect of the Benzer Action; however, Benzer is a
shareholder of Sigma and paid its proportionate share of the
security for costs Sigma was ordered to pay.

In 2019, the appellants and Sigma accepted KPMG’s offer to
settle the Benzer Action and the Komtech Action. The offer was that
1) KPMG would pay to the plaintiffs the all-inclusive sum of
$130,000 and consent to an order in the Komtech Action releasing
the monies posted as security for costs to the plaintiffs, and 2)
the actions would be dismissed on a without costs basis and the
parties would exchange full and final releases.

On May 24, 2019, the appellants, Sigma, and KPMG signed a Mutual
Full and Final Release and the sum of $130,000 (the
“Settlement Funds”) was paid to Friedman. The monies that
had been posted as security for costs in respect of the Komtech
Action, plus accrued interest (the “Security Funds”),
were paid out of court and deposited in trust by Friedman.

No agreement was ever reached by the parties as to how the funds
were to be apportioned. Friedman was paid $44,780.10 on account of
unpaid legal fees with respect to the Benzer Action and the Komtech
Action and Sigma brought the application for an order as to the
distribution of the remaining funds.

The appellants appealed the judgment of the application judge
which found 1) Benzer was not entitled to be reimbursed for the
costs and expenses pertaining to the Komtech Action that it had
paid under s. 3(i) of the Assignment Agreement because no costs had
been awarded and 2) the Security Funds should not be included in
calculating Benzer’s entitlement under s. 3(ii) of the
Assignment Agreement.

issues:

(1) Did the application judge err in concluding that Benzer was
not entitled to be reimbursed for the costs and expenses pertaining
to the Komtech Action that it had paid under s. 3(i) of the
Assignment Agreement?

(2) Did the application judge err in concluding that the Security
Funds should not be included in calculating Benzer’s
entitlement under s. 3(ii) of the Assignment Agreement?

holding:

Appeal dismissed.

reasoning:

(1) No.

The Court held that the application judge carefully instructed
herself as to the applicable principles of contractual
interpretation. Her interpretation was a question of mixed fact and
law subject to appellate review on the deferential standard of
palpable and overriding error, unless there was an extricable error
of law: Sattva Capital Corp. v. Creston Moly Corp. The Court held
that the appellants failed to identify a palpable and overriding
error or an extricable error of law.

The Court held that the application judge did not commit an
extricable error of law by failing to consider the wording of the
Assumption Agreement in concluding that Benzer was not entitled to
reimbursement pursuant to s. 3(i) of the Assignment Agreement.
Pursuant to the Assumption Agreement, 227 assigned to Benzer, all
of 227’s “rights, title and interest in and to the
reimbursement of the Costs […]”. Costs are defined in the
Assumption Agreement as the expenses and costs pertaining to the
Komtech Action. 227’s right to reimbursement of the Costs is
pursuant to the Assignment Agreement between 227 and Sigma. 227
could not assign a greater right of reimbursement to Benzer under
the Assumption Agreement than it had bargained for under the
Assignment Agreement. The Court found that Sigma was not a party to
the Assumption Agreement.

The appellants argued that the phrase “to a maximum of the
legal costs awarded, if any” found in the Assignment agreement
only applies where legal costs are awarded. In other words,
“if any” only modifies “to the maximum of the legal
costs awarded” and has no application if no costs are awarded.
The appellants submitted that application judge’s
interpretation leads to an absurdity because percentage of
compensation in s. 3(ii) does not, in all cases, provide adequate
compensation to a litigation funder required to advance up to
$200,000.

The Court agreed with the application judge stating that the
fact that an agreement provides for different levels of
compensation to a litigation funder depending on whether costs were
awarded was not an absurdity.

(2) No.

The Court held that there was no basis to interfere with the
application judge’s characterization of the security for costs
paid as analogous to a litigation expense. Further, the Court noted
that the application judge had reviewed the cases cited by the
parties, but their usefulness was limited given that the cases were
fact and contract specific and did not provide assistance as to how
the specific agreements were to be interpreted in light of the
circumstances of the case. The Court concluded that there was no
reviewable error.

Costanza v. Dejardins Financial Security Life
Assurance Company, 2023 ONCA 54

[van Rensburg, Sossin and Copeland JJ.A.]

Counsel:

N. Bonder and A. White, for the appellant

A.L. McFadden and J.P. Cavanagh, for the respondent

Keywords:Insurance, Duty to Disclose, Civil
Fraud, Evidence, Standard of Review, Insurance Act, R.S.O.
1990, c. I.8, s. 178, s. 183(1), ss. 183(3), s. 184(2), 189.1,
Evidence Act, R.S.O. 1990, c. E.23, s. 22.1, Gregory
v. Jolley (2001), 54 O.R. (3d) 481 (C.A.), Sagl v. Chubb
Insurance Company of Canada, 2009 ONCA 388, Palmer v. The
Queen, [1980] 1 S.C.R. 759, F.(K.) v. White (2001),
53 O.R. (3d) 391 (C.A.), Andreadis v. Pinto (2009), 98
O.R. (3d) 701 (S.C.J.), Bruno Appliance and Furniture, Inc. v.
Hryniak, 2014 SCC 8, Frohlich v. Ferraro, 2017 ONCA
978

facts:

On January 9, 2012, DC (“the deceased” or “the
insured”) applied for life insurance. Question 21(a) of the
application asked the following question: “In the last 3
years, have you been convicted of or pleaded guilty to any criminal
offence or any moving violations or driving under the influence of
alcohol or drugs?” The deceased answered “no”. On
February 9, 2012, the insurer issued the life insurance policy to
the deceased (“the policy”). The policy contained a life
insurance benefit of $500,000 and designated the respondent, JPC,
as the primary beneficiary. The respondent is the deceased’s
son.

On December 3, 2017, DC was shot and killed. On December 4,
2017, the respondent made a claim under the insurance policy. The
insurer refused the claim and took the position that the deceased
made a material and fraudulent misrepresentation on his application
for life insurance asserting that the deceased’s answer to
Question 21(a) was false. The insurer claimed that the deceased was
convicted of assault causing bodily harm and sentenced to 90 days
imprisonment on March 11, 2009 – 2 years, 9 months, and 29
days prior to the day he submitted the application for
insurance.

The policy contained an incontestability clause, which stated:
“Except for nonpayment of premiums, we will not contest the
Basic Plan after it has been in force during the Insured’s
lifetime for 2 years from the Policy Date.” At the time of the
deceased’s death, the policy had been in effect for more than
five years. The deceased paid all premiums as required on the
policy.

The respondent sought a declaration that the policy was valid,
subsisting, and binding on the insurer. The insurer argued that the
policy was voidable due to fraudulent non-disclosure or
misrepresentation by the deceased in the application for
insurance.

The application judge found that the insurance policy was valid
and concluded that the insurer had not proven on a balance of
probabilities that the deceased obtained the insurance through
fraudulent non-disclosure or misrepresentation.

The application judge noted that an insured has a duty to make
full disclosure of material facts to an insurer and that the duty
is codified under s. 183(1) of the Insurance Act (the
“Act”). She recognized that a failure to disclose or a
misrepresentation of material fact renders the contract voidable
pursuant to ss. 183(3) and 184 of the Act. However, s. 184(2)
establishes that, where a contract has been in effect for two years
during the lifetime of the person whose life is insured, a failure
to disclose a material fact or misrepresentation of fact does not,
in the absence of fraud, render the contract voidable.

The insurer argued that the policy was voidable on two bases.
First, the insurer argued that the deceased had made a fraudulent
material misrepresentation in answering “no” to question
21(a), which asked if he had “been convicted of or pleaded
guilty to any criminal offence or any moving violations or driving
under the influence of alcohol or drugs” in the last three
years. Second, the insurer argued that the deceased was obliged to
disclose the fact that he had a “criminal history” or
“criminal background”, and had failed to do so. The
insurer argued that this was a material non-disclosure.

The insurer had filed a partial printout from the Canadian
Police Information Centre, purporting to list information of
criminal convictions of the deceased (the “CPIC
printout”). The CPIC printout included the following entry:
“2009-03-11. Brampton, ON. Assault CBH, SEC 267 (B) CC, 90
days and mandatory weapons prohibition SEC 109 CC”.

The application judge found that the CPIC printout was not
sufficient evidence to prove that the deceased was convicted of
assault on March 11, 2009, because it was not authenticated in any
way. The application judge found that there was no evidence to
confirm whether the March 11, 2009 date represented a date of
conviction, imposition of sentence, or some other date. She noted
that a CPIC printout is a police record, not a court record and the
insurer had chosen not to file a certified copy of the Information
or Indictment or any other court record.

The application judge was not satisfied on a balance of
probabilities that any misrepresentation by the deceased in his
answer to question 21(a) was made with knowledge that it was false
or with recklessness as to its truth or falsity. The insurer had
argued that the deceased must have known that the conviction was
within three years of the application because he served time in
custody. The application judge found that this argument was based
on a misconception of the criminal process. She found that the
deceased could have been mistaken in calculating when he was
convicted due to multiple court appearances that are part of
criminal proceedings. She found that it was at least as likely, if
not more likely, that the deceased was mistaken or merely negligent
as to the date of conviction when he filled out the application for
insurance.

The application judge then considered the insurer’s argument
that the deceased made a material non-disclosure in failing to
disclose a “criminal history” or “criminal
background”. The insurer relied on two printouts of online
news articles posted days after the deceased was killed.

Based on these news articles, the insurer argued that the
deceased was known to police, that his murder was believed to be
targeted and related to a dispute over money or drugs. The
application judge ruled the news articles to be inadmissible and
unreliable. They were a “dangerous” type of hearsay,
“namely rumour and unsubstantiated innuendo.” She found
that the fact that the news articles asserted that “the
police” said the deceased was involved in criminal activity
was not evidence that the deceased was, in fact, involved in
criminal activity.

As a result of the inadmissibility and unreliability of the news
articles, the application judge was not satisfied that the deceased
had a criminal history or background or that the insurance policy
was voidable for failure to disclose it.

issues:

(1) Should the Court grant the motion to admit fresh
evidence?

(2) Did the application judge err in finding that the insurer had
not proven that the deceased had been convicted of assault causing
bodily harm in the three years preceding his application?

(3) Did the application judge err in law in her application of the
test for civil fraud?

(4) Did the application judge err in finding that the
deceased’s representation that he had not been convicted of a
criminal offence in the three years preceding his application had
not been proven by the insurer to have been made with knowledge
that it was false or with recklessness as to its truth or
falsity?

(5) Did the application judge err in finding that the insurer had
not proven that the deceased had a “criminal history” or
“criminal background” that he failed to disclose?

holding:

Appeal dismissed.

reasoning:

(1) No.

The Court clarified that the four-part test for admissibility of
fresh evidence is well-established: (1) the evidence should
generally not be admitted if, by due diligence, it could have been
adduced at trial; (2) the evidence must be relevant in the sense
that it bears upon a decisive or potentially decisive issue in the
trial; (3) the evidence must be credible in the sense that it is
reasonably capable of belief; and (4) the evidence must be such
that, if believed, it could reasonably, when taken with the other
evidence adduced at trial, be expected to have affected the result
(the “Palmer test”).

The insurer sought to introduce a certified copy of an
Indictment relating to the deceased. The certified copy of the
Indictment establishes the fact that the deceased was convicted of
assault on February 2, 2009, and was sentenced to imprisonment.
February 2, 2009 is over 2 years prior to the submission of the
insurance application by the deceased.

The respondent conceded that the fresh evidence met the second and
third branches of the Palmer test. Thus, the Court only addressed
the first and fourth branches of the test. The Court found that the
first branch of the Palmer test was complicated by admissions made
by BS, the ex-common-law partner of the deceased, and the mother
and litigation guardian of the respondent. The Court noted that in
cross-examination, BS agreed that the deceased was convicted of
assault in March of 2009.

The Court agreed with the insurer that it had satisfied the due
diligence branch of the Palmer inquiry. In her evidence on the
application, BS admitted the fact of the deceased’s assault
conviction, but took the position that any incorrect statement in
the insurance application was made by mistake. It was in the
Court’s view, given BS’s unequivocal admissions about the
conviction, there was no failure of due diligence by the insurer in
not obtaining and filing a certified copy of the Indictment before
the application judge. Based on the admissions made by BS, the
Court found that the insurer was entitled to rely on the admissions
by BS on behalf of the respondent.

In regards to the fourth branch, the Court found that fresh
evidence could not reasonably be expected to affect the result of
the application. The Court found that the fresh evidence would not
materially change the factual basis relied on by the application
judge to find that the insurer failed to meet its burden to prove
that if there was a misrepresentation in the answer to question
21(a) it was made fraudulently.

(2) Yes.

The Court agreed with the insurer that the application judge made a
palpable and overriding error of fact when she did not address
admissions made by BS. However, the Court noted that the error was
more of a fundamental error of procedural unfairness to the
insurer. In the Court’s view, the failure of the application
judge to address the admissions of BS in relation to the conviction
constituted a palpable and overriding error in the application
judge’s conclusion that the insurer had not proven that the
deceased was convicted of a criminal offence in the three years
preceding the insurance.

The Court found it was procedurally unfair to disregard the
clear admissions by BS about the conviction, which the insurer had
relied on, without giving the insurer an opportunity to provide
further evidence on the issue. However, the Court clarified that
their conclusion should not be read as suggesting that a CPIC
printout is sufficient proof of a prior conviction in the absence
of an admission. The Court explained that the proper method to
prove the existence of a criminal conviction, if not admitted, is
with a certified copy of the Indictment or Information. The Court
held that the fresh evidence could not reasonably be expected to
affect the result of the application.

(3) No.

The Court found that the argument raised a question of law and the
standard of review was correctness. The Court found that there can
be no doubt that the application judge applied the correct legal
standard for the intent for civil fraud and held that the fresh
evidence had no bearing on the ground of appeal. Thus, the Court
found that the insurer’s grounds provided no basis to conclude
that the fresh evidence could reasonably be expected to affect the
result of the application.

(4) No.

The Court stated that the issue regarding whether knowledge or
recklessness had been proven by the insurer are questions of fact
or mixed fact and law and are reviewed on a palpable and overriding
error standard. The Court established that the insurer bore the
burden of proof to establish that the deceased made the incorrect
representation in his answer to question 21(a) knowingly or
recklessly. The Court concluded that the insurer failed to show any
palpable and overriding error in the findings of fact and the
application judge’s findings were entitled to deference.

(5) No.

The Court clarified that an appeal is not a forum to advance new
arguments. The Court found that the insurer did not rely on the
CPIC printout or any specific criminal conviction(s) in its
argument before the application judge that the deceased failed to
disclose his “criminal history” or “criminal
background”. Rather, the Court found that insurer chose to
rely only on the news articles. The Court held that it would be
inappropriate to allow the insurer on appeal to fundamentally
change the basis on which their argument was made.

Dorsey v. Canada (Attorney General), 2023
ONCA 64

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

Counsel:

J. Orkin, A. Weaver, S. Borys, and K. Mitchell, for the
appellants

J. Provart and W. Wright, for the respondent

P. Quick, for the intervener John Howard Society of Canada

G. Philipupillai and S. Moyo, for the proposed intervener the Black
Legal Action Centre

J.D. Rose, for the proposed intervener the Canadian Association of
Elizabeth Fry Societies

N.R. Hasan and D. Goudge, for the proposed intervener the Canadian
Civil Liberties Association

A. Craig, for the proposed intervener the Canadian Prison Law
Association

facts:

This case involved a challenge to the application of the law of
habeas corpus. The appellants applied for a writ of habeas corpus
ad subjiciendum for orders that they be transferred to
minimum-security institutions unless the respondent, on behalf of
he Correctional Service of Canada, can justify their continued
detention in a medium-security institution. The Canadian Civil
Liberties Association (the “CCLA”), the Black Legal
Action Centre (the “BLAC”), the Canadian Association of
Elizabeth Fry Societies (the “CAEFS”), and the Canadian
Prison Law Association (the “CPLA”) sought leave to
intervene as friends of the court.

Canada opposed these motions either on the basis that the
interveners would introduce new issues on appeal or that their
proposed submissions are duplicative of the appellants’
argument. The moving parties each argue that the nature of the
issues before the court are of constitutional and public
importance, which transcend the immediate parties.

The CCLA is a well-recognized national organization dedicated to
the furtherance of civil liberties in Canada. One of CCLA’s
major objectives is the protection of the rights of prisoners and
detainees from arbitrary or excessive use of power, with a focus on
issues and cases that result in broad, systemic change. The CCLA
submitted that any state decision, which results in an ongoing
deprivation of liberty and is substantially inconsistent with the
least restrictive option, always triggers habeas corpus.

The BLAC is a not-for-profit legal clinic with the mandate to
address individual and systemic anti-Black racism in Ontario. The
BLAC has specialized knowledge on anti-Black racism in the criminal
system. Given its expertise, the BLAC can provide the court with
the unique perspective of the impact of denying access to habeas
corpus review for a denial of a transfer to a lower security
institution on Black inmates. The BLAC submitted that it would make
a useful contribution by focusing its arguments on the impacts of
denying habeas corpus review on Black inmates, through the lens of
substantive equality and s. 15 Charter values.

CAEFS is the non-profit association of the community-based
Elizabeth Fry Societies. The objective of the CAEFS includes
addressing and promoting the human rights of criminalized women,
trans, non-binary and Two-Spirit people. CAEFS also has significant
involvement with Indigenous women who are disproportionately
represented among the women CAEFS serves. CAEFS submitted that it
will make a useful contribution by submitting that the court should
consider substantive equality as a factor in their determination of
whether a particular continuing deprivation of liberty attracts
Charter protection.

The CPLA is a national organization made up of lawyers,
paralegals, and academics who work on behalf of federal and
provincial inmates in the provision of legal services, research on
prison law issues, and in making representations to legislative and
government bodies. The CPLA submitted that it would make a useful
contribution by contrasting the constitutional and statutory
protection of the liberty interests at stake in transfer decisions,
and why such interests may be disregarded in light of the
asymmetrical, policy-based decision-making structures and the
institutional factors that may often pull against the least
restrictive principle.

issues:

Should intervenor status as friends of the court be granted for
the moving parties?

holding:

Motions granted.

reasoning:

Yes.

The Court noted that there are four criteria in determining
whether to grant intervenor status: (1) the nature of the case, (2)
whether contributions will be useful, (3) potential injustice to
the parties, and (4) the terms of intervention. The Court held that
each of the criteria favour granting intervention in this case.

First, the Court held that the issue before the court is whether
refusal of transfers to a lower security institution amounts to a
deprivation of liberty such that the writ of habeas corpus is
available. Habeas corpus is a constitutional right entrenched in s.
10(c) of the Charter and is a legal remedy that is fundamental to
the protection from unlawful deprivations of liberty. The issue
before the court is of public importance and transcends the
immediate parties. Furthermore, the Court noted that as a dispute
involving the state, the more onerous standard for interventions in
private disputes does not apply. Canada argued that the nature of
this case was not suited for intervenors because habeas corpus
applications are meant to be an expeditious process. The Court
disagreed stating that this is not a standard habeas corpus
application and relates to a threshold issue regarding what
constitutes a “deprivation of liberty” such that that
habeas corpus is available.

Second, the Court stated that each proposed intervenor is
well-positioned to assist the court as they are all established and
reputable organizations with specialized knowledge and expertise.
Third, the Court noted that there is no injustice to the parties
from the positions of the proposed interveners as they do not
inappropriately weigh in on the actual merits of the appeal.
Rather, the proposed interveners are advancing legal arguments that
are properly the subject of an intervention. Canada argued that it
would face injustice because each proposed intervenor is aligned in
interest with the appellants. The Court disagreed for three
reasons: (1) intervenors do not need to be disinterested to obtain
status, (2) it is particularly important in appeals involving the
state and raising issues of public importance that the court hear
from different perspectives, and (3) any potential injustice can be
cured through appropriate terms of intervention.

Rabin v. 2490918 Ontario Inc., 2023 ONCA
49

[Gillese, Tulloch and Roberts JJ.A.]

Counsel:

M. Drudi, for the appellant

P. Gribilas, for the respondent

Keywords: Contracts, Commercial Leases,
Assignment of Lease, Consent to Assignment, Withholding Consent,
Reasonableness, Landlord and Tenant, Waiver, s. 23, Commercial
Tenancies Act, R.S.O. 1990, c. L.7, Iroquois Falls Power
Corporation v. Ontario Electricity Financial Corporation, 2016
ONCA 271, Labatt Brewing Company Limited v. NHL
Enterprises Canada, L.P., 2011 ONCA 511, Rodaro
v. Royal Bank of Canada (2002), 59 O.R. (3d) 74
(C.A.), Saskatchewan River Bungalows Ltd. v. Maritime Life
Assurance Co., [1994] 2 S.C.R. 490, 1455202 Ontario Inc.
v. Welbow Holdings Ltd. (2003), 33 B.L.R. (3d) 163 (Ont.
S.C.), 2197088 Ontario Limited v. Cadogan Corporation,
2018 ONSC 3070, 6791971 Canada Inc. v. Eli Messica,
2020 ONSC 1642, Zellers Inc. v. Brad-Jay Investments
Ltd., [2002] O.J. No. 4100 (Ont. S.C.), Jo-Emma
Restaurants Ltd. v. A. Merkur and Sons Ltd. (1989), 7
R.P.R. (2d) 298 (Ont. S.C.), Tradedge Inc. (Shoeless
Joe’s) v. Tri-Novo Group Inc., 84 R.P.R. (4th) 84 (Ont.
S.C.), Quickie Convenience Stores Corp. v. Parkland Fuel
Corporation, 2020 ONCA 453, Ruth
Sullivan, Sullivan on the Construction of Statutes,
7th ed. (Toronto: LexisNexis Canada, 2022)

facts:

The appellant tenant had run a dentistry practice from the
leased premises throughout his 44-year tenancy. The respondent
acquired the building with the view of demolishing it and
redeveloping the property at some time in the future. The
appellant’s lease expired on December 31, 2025. There was a
five-year option to renew.

The appellant wished to semi-retire, and sought to sell his
business to two dentists. As part of the sale of his practice, the
appellant sought the respondent’s consent, as landlord, to the
assignment of the lease under article 11.1 of the lease. Article
11.1 stated that the respondent shall, within 15 days, notify the
tenant whether or not it consented to the assignment of the lease.
In accordance with the lease, on February 2, 2021, the appellant,
through his real estate lawyer, gave the respondent the requisite
formal written notice of the assignment. The respondent did not
provide any response within the 15-day deadline. The respondent,
several days after the deadline, stated that consent would be
provided if a demolition clause was added to the lease. This was
not accepted by the appellant.

On March 12, 2021, after the respondent had reviewed the
proposed purchaser’s credit application, the respondent
informed the appellant that it was not consenting to the
assignment. The appellant, after several more attempts to secure
consent, commenced an application.

The application judge concluded that the appellant had waived
the requirement under article 11.1(a) of the lease that the
respondent provide its consent within 15 days of receiving the
appellant’s notice of its intent to assign the lease. The
application judge determined that the appellant had failed to show
that the respondent had either refused to consent to the assignment
or unreasonably withheld its consent. As a result, the application
was dismissed without prejudice.

The appellant appealed the dismissal of his application for an
order under s. 23(2) under the Commercial Tenancies Act
(“CTA”) to require the respondent landlord to consent to
the assignment of the lease. The appellant submitted that the
application judge erred in finding that the appellant had waived
the respondent’s neglect or refusal to provide its consent
within the 15-day deadline set out in the lease or at all, and in
failing to find that the respondent had unreasonably withheld its
consent to the requested assignment.

issues:

(1) Did the application judge err in finding that the appellant
had waived the 15-day notice period under article 11.1(a) of the
lease?

(2) Did the application judge err in not focusing his analysis on
s.23 of the CTA?

holding:

Appeal allowed.

reasoning:

(1) Yes

The Court held that the application judge applied the doctrine of
waiver when it was not raised or argued by the parties and had
erred in his application of the doctrine of waiver. The Court held
that the application judge correctly found that the respondent had
failed to respond to the appellant’s request for its consent to
the assignment of the lease, but failed to consider the
consequences of that failure to provide a timely response.

The Court held that it is not open to a judge to dispose of a
material issue in a proceeding on a basis that has not been raised
or argued by the parties. The Court held that the application judge
relied on the doctrine of waiver to dispose of the material issue
of the respondent’s compliance with article 11.1(a) of the
lease without giving the parties the opportunity to make
appropriate submissions. The Court found that this alone warranted
the setting aside of the application judge’s decision.

The Court held that the application judge had erred when he made
no reference to this “stringent test” in determining
whether waiver had occurred. The Court held that he failed to
consider whether the February 18 follow-up email by the
appellant’s real estate lawyer amounted to an unequivocal and
conscious intention to abandon the appellant’s right to insist
on the respondent’s compliance with article 11.1(a) and to rely
on the consequences when the respondent failed to respond. The
Court found that when the doctrine of waiver is correctly applied,
the February 18 email could not be construed as a waiver. The Court
noted that, as the appellant’s real estate lawyer attempted to
resolve the respondent’s failure to respond in order to close
the transaction for his client did not amount, without more, to a
waiver of the appellant’s rights or of the respondent’s
defective performance.

(2) Yes

The Court held that as neither party had raised the issue of
waiver, the application judge’s analysis should have focussed
on the relevant lease provisions and s. 23 of the CTA to determine
whether the respondent had neglected or refused to give its consent
to the requested assignment, and, if so, whether consent was
unreasonably withheld. Subsection 23(1) of the CTA stipulates that
a landlord’s consent to an assignment is not to be unreasonably
withheld, unless the lease expressly provides to the contrary.

The Court held that article 11.1 of the lease provided that the
respondent’s consent to any assignment by the appellant was
required but that the respondent’s consent was not to be
unreasonably withheld, subject only to article 11.1(a), which
required the appellant to provide written notice of the assignment
to the respondent and certain additional information if required by
the respondent, and which required the respondent to advise the
tenant if it would consent or not within 15 days. The Court noted
that, as the CTA did not define refusal, neglect, or consent, those
words were presumed to have their ordinary meaning.

The Court, citing 1455202 Ontario Inc. v. Welbow Holdings Ltd.,
held that there were six principles to be applied in determining
whether a landlord reasonably withheld consent to an
assignment:

i. The burden is on the tenant to satisfy the court that the
refusal to consent was unreasonable.

ii. It is the information available to – and the reasons
given by – the landlord at the time of the refusal –
and not any additional, or different, facts or reasons provided
subsequently to the court – that is material.

iii. The question must be considered in the light of the existing
provisions of the lease that define and delimit the subject matter
of the assignment as well as the right of the tenant to assign and
that of the landlord to withhold consent.

iv. A probability that the proposed assignee will default in its
obligations under the lease may, depending upon the circumstances,
be reasonable ground for withholding consent.

v. The financial position of the assignee may be a relevant
consideration.

vi. The question of reasonableness is essentially one of fact that
must be determined on the circumstances of the particular case,
including the commercial realities of the marketplace and the
economic impact of an assignment on the landlord.

Applying these principles, the Court held that the appellant had
met his burden to satisfy the court that the respondent neglected
and also refused to consent unreasonably. The Court held that this
was evidenced by the respondent’s neglect to respond to the
request for consent within the 15-day time limit.

In determining whether that amounted to an unreasonable
withholding of consent, the Court considered the reasons offered by
the respondent for its failure to respond within the 15-day period
provided for in the lease. The Court found that, given that the
appellant had notified the respondent in December that he was going
to seek the assignment and that time was of the essence, the formal
request in February should have come as no surprise nor should the
necessity of responding within the 15-day period. In the
Court’s view, the neglect to consent within time amounted to an
unreasonable withholding of consent.

The Court also found that the application judge had erred by
failing to find that the respondent had subsequently refused its
consent and that its consent was unreasonably withheld, as
indicated in its real estate lawyer’s emails of February 24 and
March 12 and by its unreasonable and last-minute request for
financial information in its litigation lawyer’s email of March
23. The Court noted that the respondent had sought only the
insertion of a demolition clause within the 15-day response period.
This, the Court held, was a landlord’s attempts to obtain an
amendment to the lease for its own benefit in exchange for
providing consent, which has consistently been characterized as an
unreasonable withholding of consent. As such, the respondent was
not entitled to require a demolition clause as a precondition to
giving consent, and the Court held that this “conditional
consent” amounted to an unreasonable withholding of
consent.

National Industries Inc. v. Kirkwood,
2023 ONCA 6

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

Counsel:

J.R. Morse, D. Trafford and E.A. Cherniak, for the
appellants

R.W. Traves and N.D. Kolos, for the respondents

facts:

In 2007, the appellants decided to build a new plant in Alabama.
In 2013 the appellants’ CEO was indicted on securities fraud
offences in Alabama in connection with the operation of the
project. In 2014, those charges were settled by the payment of USD
$22 million, which the appellants funded. The appellants sought
indemnification for the settlement payment pursuant to Directors
and Officers liability (“D&O”) insurance policies
that the appellants had arranged through their long-standing
insurance broker, the respondent.

In 2016, the appellants issued a statement of claim against the
respondents alleging that the non-disclosure occurred because of
the respondents’ negligence and the breach of their fiduciary
duty. In 2017, the appellants brought a motion to amend their
statement of claim, which was denied because the Master found that
the proposed amendments constituted new causes of action outside of
the limitation period. The appellants’ appeal to the Divisional
Court was denied.

The respondents subsequently consented to certain amendments to
the statement of claim. However, when the appellants served them a
copy, there was an omission that would have made it clear that the
agreed upon timeframe for the claim was limited to 2010 and 2011.
Therefore, the respondents delivered a Demand for Particulars
seeking the time period for allegations of negligence pleaded. In
response, the appellants identified the time frame being 2007 to
2011. The respondents brought a motion to strike out the certain
portions of the Response and Reply based on the doctrines of res
judicata, issue estoppel, and abuse of process. The motion judge
granted the relief sought because the appellants attempted to
relitigate issues resolved by the Master in the pleadings
motion.

issues:

(1) Did the motion judge err in deferring to the Master?

(2) Did the motion judge err by effectively giving the Master’s
decision effect beyond her jurisdiction?

(3) did the motion judge err in a Rule 21 motion by applying res
judicata, issue estoppel, and abuse of process to a pleadings
decision of an associate justice?

(4) Did the motion judge err by applying res judicata, issue
estoppel and abuse of process to the master’s reasoning rather
than to her decision?

(5) Did the motion judge err by failing to apply the “plain
and obvious” test?

(6) Did the motion judge err in failing to find that the pleadings
could be interpreted to include events in 2008 and 2009?

(7) Did the motion judge err by failing to apply the correct
test?

holding:

Motion dismissed.

reasoning:

(1) No.

The appellants argued that the motion judge was obliged, in a
motion to strike hearing, to conduct his own assessment of the
grounds for striking the pleadings. The Court noted that the
appellants mischaracterized the motion judge’s ruling. The
motion judge undertook his own assessment and found as a matter of
law that, given the necessary findings that the Master had made in
resolving the pleadings motion, the causes of action in the
pleadings that were the subject of the motion to strike before him
were prohibited by the re-litigation doctrines. The Court held that
the outcome was not the result of deference but rather the result
of the motion judge’s independent assessment.

(2) No.

The appellants submitted that the motion judge’s reliance on
the Master’s decision gave it the effect of summary judgment,
which a Master does not have the jurisdiction to order. The Court
disagreed, stating that the Master’s decision was not
tantamount to summary judgment because it was about what was not
pleaded, whereas summary judgment is a determination of what was
pleaded.

(3) No.

The appellants argued that a decision of an associate justice in a
Rule 26.1 pleadings motion cannot support the application of the
re-litigation doctrines in a Rule 21 motion. The Court conceded
that there is no case law on whether an associate justice’s
decision can be used to trigger the re-litigation doctrines. To
invoke issue estoppel (1) the issue must be the same as previously
decided, (2) the prior judicial decision must be final, and (3) the
parties to both proceedings must be the same. The Court noted that
there can be no question that the Master acted within her
jurisdiction, as a court of competent jurisdiction and that her
decision denying the pleadings motion was a “prior judicial
decision”. The Court held that to suggest that re-litigation
doctrines cannot be applied to decisions of an associate justice
would make many applications before associate justices
pointless.

The Court stated that abuse of process, on the other hand, is
much more flexible. It can be applied where the litigation before
the court is found to be in essence an attempt to relitigate a
claim in which the court has already determined. The Court held
that nothing in the doctrine of abuse of process precluded its
application to a decision of an associate justice.

The appellants argued that the re-litigation doctrines only apply
to findings of fact. The Court disagreed stating that both
doctrines operate to prevent the improper re-litigation of issues
decided, whether those issues are of fact, mixed fact and law, or
law. Furthermore, the Court noted that if parties could disregard
pleadings rulings in the expectation that they can be re-litigated
later, it would unsettle the efficient and fair administration of
justice and render pleadings rulings and appeals from those rulings
pointless.

(4) No.

The appellants argued that the motion judge erred in applying the
re-litigation doctrines to the “reasoning” of the Master,
when these doctrines only apply to decisions. They argued that the
only thing the Master decided was stated in her formal order,
namely, that leave to amend the statement of claim was dismissed.
The Court disagreed, noting that issue estoppel applies to
determinations that are fundamental to a judicial decision.

(5) No.

The appellants argued that the motion judge erred by failing to
apply the “plain and obvious” test, which applies in
motions to strike pleadings. The Court stated that, although the
motion judge did not articulate this test, it is clear that this is
the standard he applied.

(6) No.

The appellants argued that the motion judge erred because their
pleadings “could be interpreted to plead causes of action in
relation to events in 2008 and 2009”. The Court dismissed this
ground of appeal for two reasons. First, the motion before the
motion judge was not an appeal of the decision of the Master. That
appeal was litigated at the Divisional Court. Second, it was clear
on reading the statement of claim that the pre-2010 facts were only
included to support the negligence claims the appellants made
relating to 2010 and 2011.

(7) No.

The appellants argued that the motion judge erred by striking
pleadings without determining whether “the determination of
law sought under Rule 21.01 would, dispose of all or part of the
action, substantially shorten the trial or result in a substantive
savings of costs”, which “is the applicable test set out
in Rule 21.01(1)”. The Court held that this test only applies
to a motion under Rule 21.01(1)(a), whereas the respondents’
motion was under Rule 21.01(1)(d). The test for Rule 21.01(1)(d) is
whether the action is “otherwise an abuse of process of the
court”, which the motion judge properly applied.

Continental Currency Exchange Canada Inc. v.
Sprott, 2023 ONCA 61

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

Counsel:

M.P. Michell and Z. Naqi, for the appellants

P.L. Vay, S.M. Robinson and S. Aylward, for the respondents

Keywords: Solicitor-Client Privilege,
Litigation Privilege, Breach of Privilege, Stay of Proceedings,
Presumed Prejudice, Rebuttable Presumption, Celanese Canada
Inc. v. Murray Demolition Corp., 2006 SCC
36, MacDonald Estate v. Martin, [1990] 3 S.C.R. 1235,
Etco Financial Corp. v. Ontario, [1999] O.J. No 3658
(S.C.), R. v. Babos, 2014 SCC 16, Law Society of
Saskatchewan v. Abrametz, 2022 SCC 29, R. v. Bruce Power
Inc., 2009 ONCA 573, Goodis v. Ontario (Ministry of
Correctional Services), 2006 SCC 31, O’Dea v.
O’Dea, 2019 NLSC 206, Morneault v. Dynacorp
Acquisition Ltd., 2006 ABQB 831, Dixon v. Lindsay,
2021 ONSC 1360

facts:

In 2015, the respondent ES advised that he no longer wished to
participate in a joint venture to establish a new Schedule I bank.
Litigation ensued when the transaction did not close. While working
to establish the bank, the parties moved into the same office space
and shared the same computer file server (the “File
Server”). Shortly after ES informed the appellant SP of his
intention to stop participating in the project, SP instructed his
assistant to save a back up of all of the respondent Continental
Bank of Canada’s (“Continental”) email accounts in
the File Server to a separate location. Continental emails
consisting of 22 “PST files” were copied onto a hard
drive (the “Email Server Copy”) and each PST file
contained thousands of emails and attachments. The Email Server
Copy contained a copy of every email sent or received up to January
13, 2015.

The parties continued to share office space and the File Server
for nine months after the transaction was terminated. On September
9, 2015, ES applied for a receiver to be appointed. On September
27, 2015, the appellants removed the File Server which at the time
still contained the respondents’ data. On October 8, 2015,
respondents’ counsel wrote to the appellants’ counsel
demanding a copy of the Continental data on the File Server. On
November 6, 2015, the appellants’ IT provider confirmed that no
Continental data was “currently” accessible by
Continental employees. The appellants’ IT confirmed that the
use of the word “currently” was included because up until
that date the Continental data was accessible to the
appellants.

In May 2019, the respondents discovered that the appellants were
in possession of privileged documents belonging to Continental
regarding the joint venture, including: legal opinions and strategy
documents prepared for the respondents by counsel, and all emails
sent or received by anyone with a Continental email address,
including emails from counsel and documents prepared for
litigation. As a result, the respondents brought a motion to stay
the proceedings.

The motion judge held that: (i) the respondents discharged their
burden to demonstrate that the appellants obtained access to their
confidential and privileged information that was relevant to the
issues in this litigation; (ii) the appellants did not rebut the
presumption of prejudice as they led no evidence as to what
documents they reviewed; and (iii) the only appropriate remedy was
a stay of proceedings. The motion judge found that the appellants
had access to the respondents’ relevant and privileged
information and while there was no direct evidence that the
appellants reviewed the documents, the appellants led no evidence
to rebut the presumption of prejudice against the respondents. As a
result, the motion judge stayed the proceedings.

issues:

(1) Did the motion judge make inconsistent findings as to
whether the appellants accessed and reviewed privileged
information?

(2) Did the motion judge conflate the presumption of prejudice to
the respondent with the imposition of the remedy of a stay of the
appellants’ proceeding?

(3) Did the motion judge err in holding that the appellants had the
onus to “show that there is another remedy, short of a stay of
the action, that will cure the problem”?

(4) Did the motion judge err in imposing a stay against all of the
appellants although only SP was presumed to have accessed and
reviewed the documents?

holding:

Appeal dismissed.

reasoning:

(1) No.

The Court found that the motion judge correctly applied the test
set out in Celanese Canada Inc. v. Murray Demolition Corp., noting
that the onus is on the party with unauthorized access to show that
there is no risk that privileged and confidential information
attributable to a solicitor and client relationship will be used to
prejudice the party possessing the privilege. The Court noted that
although the motion judge stated that it was impossible to know
whether the documents were mundane or significant, he found that,
once the PST files from the Email Server Copy and the appropriate
program to access these files were installed, SP asked his
assistant to conduct searches of the emails roughly on a
“weekly” basis. The motion judge concluded that the
appellants had access to privileged communications “for a long
period” and some of the communications were reviewed under
SP’s direction.

The Court held that there was ample evidence to support the motion
judge’s finding and held that the appellants provided no
evidence of what they actually reviewed, and thus, they failed to
rebut the presumption of prejudice.

(2) No.

The Court found that the motion judge did not hold or imply that a
stay is always warranted whenever the presumption of prejudice has
not been rebutted. The motion judge assessed the significance of
the privileged information to the litigation in coming to his
decision to stay the proceedings and found that the privileged
information was relevant to the transaction at issue in the
litigation. The Court noted that the motion judge considered other
possible remedies but noted that the appellants did not discharge
their onus of rebutting the presumption of prejudice. The Court
held that the motion judge did not err in his holding that access
to privileged information, such as legal opinions about the
transaction, risks serious prejudice.

The Court found that the motion judge’s determination of the
appropriate remedy did not conflate presumed prejudice and remedy.
Presumed prejudice is the precondition for imposition of any remedy
and the lack of evidence on the scope of documentary review and the
nature of documents accessed is relevant to fashioning the
appropriate remedy. The Court found that the motion judge correctly
took all of these factors into consideration before addressing
possible remedies.

(3) No.

The Court agreed with the appellants that the motion judge
mistakenly stated that the appellants had the onus of showing that
another remedy would cure the problem, as the onus is on the
respondents to show that a stay was the only appropriate remedy.
However, Court maintained that the motion judge applied the correct
analysis.

The motion judge noted that the appellants had access to the
privileged communications over an extended period, the documents
were about the very transaction at issue, and some of those
documents were searched and reviewed by SP’s assistant under
his direction. Further, the motion judge found that the
appellants’ actions to access the respondents’ privileged
documents were intentional. The Court noted that the motion judge
was entitled to presume that the respondents suffered significant
and ongoing prejudice for a prolonged period. Thus, the Court held
that the motion judge did not err in holding that a stay was
warranted because there was significant presumed ongoing prejudice
to the respondents. Finally, the Court noted that given the serious
prejudice resulting from the breach by the appellants themselves
(not their counsel), the motion judge correctly held that no remedy
short of a stay would cure the problem.

(4) No.

The Court held that because SP was responsible for managing and
conducting the litigation on behalf of all the appellants and on
cross-examination, the discussions surrounding the litigation were
affected by his access to privileged communications, and those
concerns could not be resolved.

SHORT CIVIL DECISIONS

5000933 Ontario Inc. v. Mahmood, 2023
ONCA 58

[MacPherson, Hoy and Coroza JJ.A.]

Counsel:

O. Hoque and F.M. S. B. Hossain, for the appellants

C. D. Neil, for the respondent

Keywords: Contracts, Real Property, Agreements
of Purchase and Sale of Land, Breach, O. Reg. 332/12 Ontario
Building Code

Bitaxis Estate v. Bitaxis, 2023 ONCA
66

[MacPherson, Hoy and Coroza JJ.A.]

Counsel:

D. M. Smith and M. D. Lahn, for the appellant

B. D. Arkin, for the respondent

Austin v. House, 2023 ONCA
55

[Feldman, Lauwers and Roberts JJ.A.]

Counsel:

M. H. Tweyman, for the appellant

N. Wilson, for the respondent

Lalande v. Lalande, 2023 ONCA
68

[MacPherson, Brown and Coroza JJ.A.]

Counsel:

S. M. Fehrle, for the appellant

C. Allen, for the respondent

Keywords: Family Law, Financial Disclosure,
Duty to Disclose, Non-Compliance, Motion to Strike, Roberts v.
Roberts, 2015 ONCA 450, Family Law Rules, O. Reg.
114/99, r.1(8).

Hategan v. Frederiksen, 2023 ONCA
57

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

Counsel:

J. Kary, for the moving party

A. N. Wood and L. Cadieux-Shaw, for the responding party,
E.M.F

M. Freiman, for the responding party B.F.

Keywords: Perfecting Appeal, Extension of Time,
Delay, Setting aside Registrar’s Dismissal, Prejudice,
Oliveira v. Oliveira, 2022 ONCA 218, Issai v.
Rosenzweig, 2011 ONCA 112

Ducharme v. Thibodeau, 2023 ONCA
60

[Feldman, Lauwers and Roberts JJ.A.]

Counsel:

A. Rogerson and C. Dookie, for the appellant

O. D. Thomas, for the respondent

Keywords: Wills and Estate, Notice of
Objection, Withdrawal of Notice of Objection, Standing, Costs,
Substantial Indemnity.

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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