Court Of Appeal Summaries (October 23 – October 27) - Civil Law

In 2177546 Ontario Inc. v. 2177545 Ontario Inc., the appellants deliberately accessed solicitor-client and litigation privileged information of their opponent regarding a dispute over the severance of jointly owned land. The Court dismissed the appeal, affirming the application judge's decision to strike the appellant's responding materials.

In Harjee v. Ontario, the Court dismissed as moot an appeal concerning COVID-19 vaccination mandates.

In Zarei v. Iran (Islamic Republic of), the Court concluded that appellants' default judgment against Iran arising out of the shooting down of Ukrainian Airlines flight PS752 could not be enforced against certain Iranian state property in Canada. It was immune by virtue of state immunity, which the Canadian government had specifically continued to confer on that property, even though diplomatic ties with Iran have been severed since 2012.

Other topics covered this week included two wrongful dismissal cases where the notice period awarded was greater than 24 months, a contractual interpretation case involving land and the extension of time to appeal in a lawyer's professional discipline matter.

Civil Decisions

Milwid v. IBM Canada Ltd. , 2023 ONCA 702

Keywords: Contracts, Employment, Wrongful Dismissal, Notice Period, Bardal Factors, Exceptional Circumstances, Dawe v. The Equitable Life Insurance Company of Canada, 2019 ONCA 512, Bardal v. The Globe & Mail Ltd. (1960), 24 D.L.R. (2d) 140 (Ont. H.C.), Currie v. Nylene Canada Inc., 2022 ONCA 209, Matthews v. Ocean Nutrition Canada Ltd., 2020 SCC 26, Amberber v. IBM Canada Ltd., 2018 ONCA 571

Lynch v. Avaya Canada Corporation , 2023 ONCA 696

Keywords: Contracts, Employment, Wrongful Dismissal, Notice Period, Exceptional Circumstances, Bardal Factors, Damages, Mitigation, Bardal v The Globe & Mail Ltd (1960), 24 D.L.R. (2d) 140 (Ont HC), Dawe v The Equitable Life Insurance Company of Canada, 2019 ONCA 512, Currie v Nylene Canada Inc, 2022 ONCA 209, Wallace v United Grain Growers Ltd, [1997] 3 SCR 701, Lowndes v Summit Ford Sales Ltd (2006), 206 OAC 55 (CA)

Chhom v. Green , 2023 ONCA 692

Keywords: Family Law, Property, Equalization of Net Family Property, Matrimonial Home, Pension, Occupation Rent, Civil Procedure, Procedural and Natural Justice, Self-represented Litigants, Family Law Rules, O. Reg. 114/99, r. 22(4), Griffiths v Zambosco, 2001 CanLII 24097 (ON CA)

2177546 Ontario Inc. v. 2177545 Ontario Inc., 2023 ONCA 693

Keywords: Real Property, Partition and Sale, Civil Procedure, Abuse of Process, Breach of Privilege, Stay of Proceedings, Partition Act, R.S.O. 1990, c. P.4, O'Dea v. O'Dea, 2019 NLSC 206, Morneault v. Dynacorp Acquisition Ltd., 2006 ABQB 831, Dixon v. Lindsay, 2021 ONSC 1360, R. v. Bruce Power Inc., 2009 ONCA 573, Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61, National Organized Workers Union v. Sinai Health System, 2022 ONCA 802, 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

Robson v. Law Society of Ontario , 2023 ONCA 709

Keywords: Administrative Law, Regulated Professions, Lawyers, Professional Misconduct, Civil Procedure, Appeals, Extension of Time, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6, Law Society Act, R.S.O. 1990, c. L.8, s.49, Statutory Powers Procedure Act, RSO 1990, c. S.22, s. 15, Rules of Civil Procedure, r. 61, Enbridge Gas Distribution Inc. v. Froese,2013 ONCA 131, Reid v. College of Chiropractors of Ontario, 2016 ONCA 779, Krawczynski v. Ralph Culp and Associates Inc., 2019 ONCA 399, Paulsson v. University of Illinois, 2010 ONCA 2, Law Society of Upper Canada v. Robert Boyd Statton, 2004 ONLSAP 8, Law Society of Upper Canada v. Rita Anne Hartmann, 2012 ONLSHP 177

Toronto-Dominion Bank v. Strathcona Energy FIT 2 LP , 2023 ONCA 710

Keywords: Civil Procedure, Orders, Interpretation

Harjee v. Ontario , 2023 ONCA 716

Keywords: Constitutional Law, Human Rights, Freedom of Religion, COVID-19, Civil Procedure, Appeals, Public Interest Litigation, Mootness, Canadian Charter of Rights and Freedoms, ss. 1, Reopening Ontario (A Flexible Response to COVID-19) Act, 2020, S.O. 2020, c. 17, Borowski v. Canada (Attorney General), [1989] 1 S.C.R. 342, Alberta v. Hutterian Brethren of Wilson Colony, 2009 SCC 37, Ontario (Attorney General) v. Trinity Bible Chapel, 2023 ONCA 134

Zarei v. Iran (Islamic Republic of), 2023 ONCA 713

Keywords: Public International Law, Constitutional Law, Crown Prerogative, Civil Procedure, Justiciability, Judgments, Enforcement, Execution, State Immunity, Diplomatic Immunity, Immunity from Execution, Canadian Charter of Rights and Freedoms, s.7 and s.15, Foreign Missions and International Organizations Act, S.C. 1991, c. 41, s. 11, Vienna Convention on Diplomatic Relations, 18 April 1961, 50 U.N.T.S. 95, Article 1, State Immunity Act, R.S.C. 1985, c. S-18, Justice for Victims of Terrorism Act, S.C. 2010, c. 1, s. 2, Interpretation Act, R.S.C. 1985, c. I-21, s. 25, Tracy v. Iran (Information and Security), 2017 ONCA 549, 415 D.L.R. (4th) 314, Black v. Canada (Prime Minister) (2001), 54 O.R. (3d) 215 (C.A.), Maduro Board" of the Central Bank of Venezuela v. "Guaido Board" of the Central Bank of Venezuela, [2021] UKSC 57, Daly v. Ontario Secondary School Teachers' Federation (1999), 124 O.A.C. 152 (Ont. C.A.)

Obolus Ltd. v. International Seniors Community Care Inc. , 2023 ONCA 708

Keywords: Contracts, Interpretation, Agreements of Purchase and Sale of Land, Civil Procedure, Applications, Conversion to Action, Rules of Civil Procedure, r. 14.05(3), Genstar Development Partnership v The Roman Catholic Episcopal Corporation of the Diocese of Hamilton in Ontario, 2019 ONCA 506, Pennyfeather v Timminco Limited, 2017 ONCA 369, Penner v Niagara Regional Police Services Board, 2013 SCC 19, Fort William Indian Band v Canada (2005), 76 OR (3d) 228 (SC), Deslaurier Custom Cabinets Inc. v 1728106 Ontario Inc, 2017 ONCA 293, Sattva Capital Corp v Creston Moly Corp, 2014 SCC 53, Estate of William Albin Herold v Attorney General of Canada et al, 2021 ONCA 579, 1079268 Ontario Inc v Goodlife Fitness Centres Inc, 2017 ONCA 12, Horn Ventures International Inc v Xylem Canada Company (ITT Canada Ltd), 2021 ONCA 341

Short Civil Decisions

2137073 Ontario Inc. v. Furney , 2023 ONCA 703

Keywords: Civil Procedure, Appeals, Adjournments

Gamma Construction Ltd. v. Graham , 2023 ONCA 722

Keywords: Torts, MVA, Causation, Vicarious Liability, Insurance Act, Amos v. The Insurance Corp. of British Columbia, [1995] 3 S.C.R. 405

CIVIL DECISIONS

Milwid v. IBM Canada Ltd., 2023 ONCA 702

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

Counsel:

J.A. MacDonald and A.E. Reid, for the appellant

C. Foulon and B. Hassibi, for the respondent

facts:

IBM Canada Inc. appealed the summary judgment order granted against it in the respondent's wrongful dismissal claim. It asserted two grounds of appeal: (i) the motion judge erred in finding that there were exceptional circumstances that would justify fixing the reasonable notice period at more than 24 months; and (ii) the motion judge erred in finding that the respondent was entitled to damages for the value of Restricted Stock Units ("RSUs") that would have vested within the reasonable notice period.

The employee worked for the employer for a considerable amount of time and developed specialized skills geared towards the defendant's business. The motion judge found that there were exceptional circumstances which led to the employee being entitled to 26 months' reasonable notice. The employee was also granted the RSUs pursuant to an Equity Award Agreement. He was to receive 888 RSUs, half of which were to vest on November 14, 2020, and the other half of which were to vest on November 14, 2022. On August 14, 2020, the RSUs were cancelled.

issues:

Did the motion judge err in finding that there were exceptional circumstances that would justify fixing the reasonable notice period at more than 24 months?
Did the motion judge err in finding that the respondent was entitled to damages for the value of the RSUs that would have vested within the reasonable notice period?

holding:

Appeal dismissed.

reasoning:

There was nothing impermissible in the motion judge relying on the factors from Bardal v. The Globe & Mail Ltd., along with other exceptional circumstances, to find a notice period that exceeded 24 months. The motion judge relied on the respondent's age, length of service with the same employer, managerial position, his compensation in an uncertain economy, and "the technical/skilled nature of his skills geared towards the defendant's business." The evidence established that the respondent's skills were not transferrable because they related, almost exclusively, to the appellant's products. This was an exceptional circumstance not covered by the Bardal factors, which could warrant a notice period exceeding 24 months.

The motion judge found that the wording of the Termination of Employment provision was ambiguous. The inclusion of the phrase "regardless of whether such date" in subsection (a) created uncertainty about when an employee became ineligible to participate in the Equity Award and left a reasonable interpretation that eligibility is not extinguished until the end of the notice period at common law. Counsel for the appellant had conceded that if there was an ambiguity in the provision, it was not operative to extinguish the respondent's right to participate in the Equity Award.

Lynch v. Avaya Canada Corporation , 2023 ONCA 696

[Doherty, Brown and George JJ.A.]

Counsel:

S. Lorquet and B. Subara, for the appellant

K. Kahn, for the respondent

facts:

The appellant, Avaya Canada Corporation ("Avaya"), terminated the employment of the respondent, JL, a professional engineer, in 2021 due to a company restructuring. JL had worked for Avaya and the predecessor owner of the business since May 1982. The parties unsuccessfully attempted to reach a termination settlement. JL sued for wrongful dismissal. JL moved for summary judgment on his wrongful dismissal claim; both parties agreed that summary judgment was appropriate to determine the action. The motion judge found that a 30-month notice period was appropriate in all the circumstances; as well, she was not persuaded JL failed to mitigate his damages. Avaya appealed.

issues:

Did the motion judge err by awarding JL a notice period that exceeded the relief sought in his Statement of Claim?
Did the motion judge err by misapplying the factors set out in Bardal v The Globe & Mail Ltd. in determining the period of reasonable notice?
Did the motion judge err by concluding JL took reasonable steps to mitigate his damages?

holding:

Appeal dismissed.

reasoning:

1. No.

In his Statement of Claim, JL claimed damages for wrongful dismissal representing 26 months' notice; the motion judge awarded 30 months' reasonable notice. Avaya submitted that the motion judge erred by awarding JL a notice period that exceeded the relief sought in the Statement of Claim. The Court saw no merit in this argument. As Avaya acknowledged in its factum, at the hearing of the summary judgment motion, JL sought an award of damages based on 36 months' notice and the motion was argued on that basis. Avaya conceded at the hearing of the appeal that it suffered no litigation prejudice. Avaya also acknowledged that had JL sought an amendment of his claim before the motion judge, she probably would have granted one. Thus, the Court gave no effect to this ground of appeal.

2. No.

Avaya alleged that the motion judge erred in fixing a notice period of 30 months because she wrongly held that the circumstances of the case placed it within the "exceptional circumstances" category. Avaya placed particular emphasis on the fact that JL did not hold a management position in the company. The Court disagreed. The Bardal approach determines the applicable period of reasonable notice by employing a case-by-case consideration of factors that regard to the character of the employment, the length of service, age, and the availability of similar employment. In Lowndes v Summit Ford Sales Ltd, the Court recognized that "generally only exceptional circumstances will support a base notice period in excess of 24 months". The motion judge concluded that "the plaintiff's circumstances were exceptional". Avaya contended her failure to identify separately the Bardal factors amounting to "exceptional circumstances" requires a reduction of the period of notice awarded. The "exceptional circumstances" factors the motion judge relied on were JL's specialization, his unique job and skills, his development of patents, being identified as a "key performer", and the scarcity of similar jobs in his residence area. Those factors supported the determination that JL's circumstances were "exceptional".

3. No.

Avaya submitted that the motion judge erred in failing to find that JL had not taken reasonable steps to mitigate his damages by seeking alternative employment. Avaya contended his failure to mitigate should result in a reduction of the notice period to 16 months. The motion judge summarized the law: JL had a duty to mitigate by looking for work; Avaya had the ultimate onus of showing JL did not take reasonable steps and, had he done so, he would have found comparable employment. The motion judge accepted the employee's evidence about his efforts to find employment. Those factual findings were entitled to deference. The Court saw no error in the motion judge's treatment of the mitigation issue.

Chhom v. Green , 2023 ONCA 692

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

Counsel:

A.Sandhir, for the appellant

J.V. Grant, for the respondent

Keywords:Family Law, Property, Equalization of Net Family Property, Matrimonial Home, Pension, Occupation Rent, Civil Procedure, Procedural and Natural Justice, Self-represented Litigants, Family Law Rules, O. Reg. 114/99, r. 22(4), Griffiths v Zambosco, 2001 CanLII 24097 (ON CA)

facts:

The appellant's wife appealed several orders made after a half-day trial. The issues were spousal support, equalization, and the disposition of the matrimonial home. The parties cohabited for nineteen years. The main assets were the matrimonial home and the husband's McMaster University pension. The respondent husband was ordered to pay spousal support at specified rates and periods and $238,851.17 to equalize their net family properties, largely from the husband's pension. The matrimonial home was owned in common. The trial judge ordered its sale, with the proceeds to be paid into court. The trial judge ordered that the appellant wife pay the respondent husband occupation rent of $31,500.00.

issues:

Did the trial judge err in ordering that the appellant pay the respondent occupation rent?
Did the trial judge err in failing to assist the appellant in the course of the trial as a self-represented litigant?
Did the trial judge err in failing to find that the respondent's Alberta pension value had increased for equalization purposes?

holding:

Appeal dismissed.

reasoning:

1. No.

The trial judge made no reversible error in ordering the occupation rent. While it is settled law in Ontario that an order for occupation rent be reasonable, it need not be exceptional: Griffiths v Zambosco. The appellant was unable to refer the Court to any Ontario authority in support of the argument to the contrary. The trial judge's reasons concerning the occupation rent were adequate. The relevant factors to be considered when occupation rent was in issue in a family law context were highlighted. It was evident from his reasons that he considered the relevant factors in concluding that an order for occupation rent was reasonable. The trial judge acknowledged the respondent's voluntary payments to the appellant and the corresponding tax advantage to the appellant, all while the appellant had exclusive use of the matrimonial home for 63 months. The trial judge considered and applied the Griffiths factors, and the amount ordered was based on the record before him.

2. No.

The appellant submitted that the trial judge had a trial fairness duty to assist her as a self-represented litigant more than he did. The appellant submitted that the trial judge should have ensured that she understood the consequences which followed from a failure to respond to a Request to Admit. The Court disagreed, finding that the Request to Admit set out r. 22(4) clearly on the form with which the appellant was served. The trial judge specifically found that she "was fully able to concentrate to the extent that she wanted" in the courtroom. A review of the transcript showed that the trial judge did provide the appellant with assistance during the trial.

3. No.

The Court held that the value of the Alberta pension as a capital asset crystallized before the marriage. The respondent was already in receipt of that pension when the parties married. Any increases in the amounts he received did not affect the capitalized value of his pension as at the valuation date.

2177546 Ontario Inc. v. 2177545 Ontario Inc., 2023 ONCA 693

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

Counsel:

T. Curry, D. Knoke and N.D. Stefano, for the appellants

C. Paliare, D. Rosenbluth and J. Song, for the respondents

facts:

PH was the principal of the appellant, 2177545 Ontario Inc. His former brother-in-law and business partner, PL, was the principal of the respondent, 2177546 Ontario Inc.

In July 2008, PH and PL's companies acquired, as tenants in common, a vacant piece of development land located in Simcoe, Ontario (the "Property"). When their relationship broke down in 2021, an application was brought before the Committee of Adjustment (the "Committee") to sever the Property into two equal 51-acre parcels. The Partition Application contained the signatures of both PL and PH. Both PL and his colleague CC swore that they witnessed PH sign the Partition Application.

PH claimed that he did not sign the Partition Application and that his signature was a "forgery". He claimed he would not have sought this relief as the value of the Property would be much greater if it were sold as a single unsevered parcel and that if the Property was partitioned, he would not receive the same amount of developable land.

In April 2021, the Committee approved the Partition Application and issued its consent under the Planning Act to sever the Property (the "Consent to Sever"). PH initially appealed but withdrew his appeal, and refused to implement the Consent to Sever. The respondent brought an application under the Partition Act to sever the Property. During the course of litigation, PH gained access to PL's privileged emails, read some, and retained copies of privileged communications that pertained to this litigation. They included PL's proposed settlement terms and discussions with counsel as to how to negotiate with PH in this litigation to try and resolve matters, and strategic advice such as whether the affidavits contained conflicts.

In March 2023, PL suspected that PH might be acting on confidential information. He therefore contacted K, a technician who had provided IT services to the Zitia Group. K advised that he had granted PH full access to PL's email account in April of 2021 when he attended PH's house to set up his new home office.

issues:

Did the application judge err by finding that the appellant deliberately accessed privileged information relevant to litigation?
Did the application judge err by failing to consider that lesser remedies such as appointing another director or officer of the appellant to instruct counsel, or appointing a litigation trustee to act on behalf of the appellant, could cure the prejudice?

holding:

Appeal dismissed.

reasoning:

The Court noted that a breach of privilege "creates a serious risk to the integrity of the administration of justice" and, to prevent this, the courts must act "swiftly and decisively": Celanese. The Court cited a three-part test for resolving issues of unauthorized access to privileged documents: Continental Currency.

The burden on the respondent at the first stage was only to demonstrate that "the opposing party obtained access to the privileged material", which was not disputed. The Court saw no error in the application judge's finding that the decision to read, download and print these privileged documents was deliberate, as the appellant could not have genuinely believed he had licence to read PL's privileged emails after the parties were engaged in litigation. Accordingly, the application judge had made no error in finding that the first part of the test was met.

Second, although PH produced hard copies of four email threads in the application, he had not stated in his affidavit or on cross-examination that these were the only four emails he reviewed. Nor had PH explained what happened, why, or what he did with the documents he printed. The application judge rightly presumed that the extent of review of the privileged material, the content of the solicitor-client communications and the degree to which they were prejudicial, weighed against the appellant.

The Court found that the appellant could have rebutted the presumption of prejudice by disclosing what documents they accessed, what was done with them and when. The appellant did not do so. Accordingly, the application judge made no error in finding the second part of the test, the presumption of prejudice, was also met.

On the application, PH did not address the issue of what remedy was appropriate, except to say that no remedy was warranted. The respondent took the position that the appropriate remedy was that judgment be granted on its application. The application judge recognized that granting judgment without giving the appellant a right to respond should be limited to the most exceptional cases and was mindful of the risk of granting judgment without a full record. Accordingly, he held that granting judgment was not the only appropriate remedy. He noted, however, that it would be inappropriate to order a remedy that would allow PH to "use to his benefit any confidential and prejudicial information he may have accessed." To do so would give the appellant an advantage in the litigation and reward him for accessing and reading emails that he would have known were privileged communications not intended for him.

The Court determined that the application judge correctly found that to require the respondent to adduce evidence that the privileged documents reviewed contained prejudicial content, would require them to disclose further confidential or privileged materials. As the application judge correctly noted, relying on the adverse presumption is proper, "even though the burden at the remedy stage shifts to the respondents" to show the appropriate remedy.

The Court noted that while lesser remedies were ordered in some cases cited by the appellant, in all of those cases, the person who accessed the confidential information disclosed what documents were reviewed such that the court was able "to consider the documents inappropriately accessed in the context of the issues in the litigation, to assess the potential harm" and tailor an appropriate remedy.

The Court stated that courts may presume that "if the [party in receipt of privileged material] had been able to lead evidence to rebut the presumption of prejudice, it would have done so": Bruce Power Inc. In the absence of such evidence, the appellant must "shoulder the consequences" at the remedy stage.

The Court stated that the appointment of a litigation trustee would not have obviated the fact that the appellant's affidavits have already been prepared in the context of the appellant knowing the respondent's litigation strategy, including his instructions to his expert witness and negotiation positions, which prejudice could not have been cured by the appointment of a litigation trustee. Moreover, even if the affidavits were struck, PH and his experts could have prepared new affidavits without which the trustee would have no witnesses to oppose the application. Accordingly, there were ample grounds to support the application judge's decision to strike PH's response to the application.

The Court concluded that deference was owed to the application judge's exercise of discretion and such a remedy was fitting where a party appropriated privileged communications and failed to address the wrongdoing.

Robson v. Law Society of Ontario, [CASE CITATION]

[Thorburn J.A. (Motion Judge)]

Counsel:

P.R., acting in person

R. Cookhorn, for the responding party

facts:

The Law Society began an investigation into Mr. R after receiving a complaint from a former client alleging Mr. R denied receiving funds, did not do the legal work, and refused to return the funds. The complainant also alleged that Mr. R borrowed money from him, performed legal work while suspended, and was uncivil.

Mr. R failed to provide financial documents and records as part of the Law Society's investigation. He took the position that the Law Society had no authority to order him to produce records, as it had not demonstrated that there was "reasonable suspicion" to justify its investigation and consequent requests for documentation.

The matter proceeded to a hearing, at which the hearing panel rejected Mr. R's position. Notably, the panel rejected the submission that the Law Society was required to establish a reasonable suspicion using only legally admissible evidence. The panel concluded that a summary of a client complaint can properly be the basis on which the designated office holder can reasonably suspect that a licensee may have engaged in professional misconduct, and there was no requirement that the designated office holder review the complaint.

Mr. R appealed the Panel decision to the Law Society Tribunal Appeal Division, which found that his appeal was meritless and that "there was more than sufficient evidence" for the hearing panel to conclude that the Law Society had reasonable suspicion to investigate.

Mr. R appealed the decision to the Divisional court, which also held that the appeal was meritless, as he failed to identify any factual or legal errors in the Appeal Panel's decision justifying the court's intervention. He further appealed the decision to the Court and sought to extend the time to file his appeal.

issues:

Was there any merit to the proposed appeal and the motion for leave to extend the time to file the appeal?

holding:

Motion dismissed.

reasoning:

No.

A notice of motion for leave to appeal must be served within 15 days of making the order from which leave to appeal is sought. In this case, the 15-day period expired. Pursuant to r. 3.02(1) of the Rules of Civil Procedure, the court may extend the time to seek leave to appeal "on such terms as are just". The overarching principle is whether the "justice of the case" requires that an extension be given. The court must take into account (i) whether the moving party formed an intention to appeal within the relevant period, (ii) the length of, and explanation for, the delay, (iii) any prejudice to the responding party, and (iv) the merits of the proposed appeal. The merits of the proposed appeal is the most important factor.

Mr. R claimed that there was merit to his appeal, as there was an important issue to be decided: whether the Law Society had "reasonable suspicion" that he may have been engaged in behaviour unbecoming a lawyer. However, the Court held that the Law Society is required to have information that a member may have engaged, not has engaged, in professional misconduct in order to conduct an investigation. This must be viewed in the context of the overall regulatory responsibility of the Law Society and its obligation to assure the public that the lawyers it supervises are, in fact, at all times acting properly. For these reasons, the Court saw no merit to the appeal. The motion for leave to extend the time to file the appeal was therefore dismissed.

Toronto-Dominion Bank v. Strathcona Energy FIT 2 LP , 2023 ONCA 710

[MacPherson, Lauwers and Copeland JJ.A.]

Counsel:

J. Levine, for the appellants

S.M. Woods and I. Alame, for the respondents

Keywords: Civil Procedure, Orders, Interpretation

facts:

Six companies were under the control of Blackstone Solar Financial Holdings Ltd. and Blackstone Energy Solutions Inc. (collectively, the "Blackstone Companies"). 2397591 Ontario Inc. ("591") owned Hay Bay Solar LP.

The Blackstone Companies and 591 held interests in a number of rooftop solar projects across Ontario that generated electricity into Ontario's power grid under feed-in-tariff ("FIT") contracts.

In 2015, the respondents agreed to sell their shares in the Blackstone Companies and 591 (the "FIT 2 entities") to Lavender Glen Holdings Inc. ("Lavender Glen"), a company owned by KH and SH, for $3.8 million. The terms were set out in a share purchase agreement, with most of the funds due after closing. To provide some assurance to the respondents, a share pledge agreement was signed, which prohibited Lavender Glen from entering into certain transactions without the respondents' consent.

In 2015, Lavender Glen reorganized and transferred the assets of the FIT 2 entities and the Hay Bay Solar LP to Strathcona Energy FIT 2 LP, another limited partnership owned by KH and SH. This was done without the respondents' knowledge or consent. As a result, Lavender Glen acquired direct ownership of the FIT 2 entities.

Six of the FIT 2 entities banked with The Toronto-Dominion Bank ("TD"). The seventh, Hay Bay, used the Bank of Montreal. TD interpleaded the money it held into court. The respondents brought a motion for judgment, which concerned who owned the FIT 2 entities. In granting summary judgment, Gilmore J recorded that "they no longer wish to involve themselves in this proceeding and do not oppose the motion for judgment."

The appellants had taken the position that Gilmore J's judgment applied to only the six entities previously controlled by the Blackstone Companies; it did not apply to Hay Bay. The respondents brought a motion seeking clarification on this issue. The motion judge, Osborne J, found in favour of the respondents.

issues:

Did the motion judge err in his interpretation of the application judge's summary judgment?

holding:

Appeal dismissed.

reasoning:

No.

The Court found that the motion judge did not err. He carefully reviewed the history of the parties' relationships and the precise words of the application judge's judgment. His conclusion, namely, that it would make no sense to conclude that the unwinding of the Reorganization applied to only six of the seven entities – only those controlled by the Blackstone Companies – was entirely sound. The Court concluded that the record, the application judge's and motion judge's analyses clearly supported the motion judge's conclusion that the Blackstone Companies included 591, the parent of Hay Bay.

Harjee v. Ontario , 2023 ONCA 716

[MacPherson, Lauwers and Copeland JJ.A.]

Counsel:

D. Leung and A. Pejovic, for the appellants

S. Hanley, E. Owens, and S. Kissick, for the respondent

facts:

The appellants brought a constitutional challenge to public health measures enacted by the Ontario government in the fall of 2021 which required proof of vaccination for COVID-19 to enter business establishments. On March 1, 2022, the provincial government ceased enforcement of the requirement and ultimately revoked the regulation on April 27, 2022. The legal issues raised were fact specific, such as whether the health measures enacted by the Ontario government surrounding COVID-19 interfered in a more than trivial manner with the appellants' ability to act in accordance with their religious beliefs.

issues:

Is there an issue justifying judicial guidance?

holding:

Appeal dismissed.

reasoning:

No.

The appeal was moot. The Court held that it would be unwise to use limited judicial resources to decide issues that required fact-specific analysis of a Regulation that had been revoked and was no longer a live controversy for the Court to resolve.

Further, the Court did not find it necessary to provide additional guidance on the legal principles of assessing Charter rights and limitations in the context of public health responses to the COVID-19 pandemic. Courts across the country provided guidance on the constitutionality of government public health measures in response to the pandemic, finding that in each case public health restrictions either did not breach Charter rights or were justified under s.1 of the Charter.

Zarei v. Iran (Islamic Republic of) , 2023 ONCA 713

[Pepall, van Rensburg and Monahan JJ.A.]

Counsel:

M. H. Arnold and J. A. Arnold, for the appellants

No one appearing for the respondents

C. Mohr and J. Blackwell, for the intervener Attorney General of Canada

facts:

The appellants are the estates and family members of victims who were killed when Ukrainian Airlines flight PS752 ("flight 752") was shot down by the Islamic Republic of Iran ("Iran"). Having obtained a default judgment against Iran, the appellants moved to enforce that judgment against certain properties and bank accounts of Iran in Canada (the "Iranian Property").

The motion judge dismissed the motion, finding that the Iranian Property continues to enjoy diplomatic immunity under Canadian law. The appellants appealed from that judgment on the basis that diplomatic relations between Canada and Iran were severed on September 7, 2012, due to Iran's involvement in terrorist activity. The appellants argued that Iran no longer had any diplomatic property in Canada that was immune from execution.

The appellant's position was that because Iran has not operated a diplomatic mission in Canada since 2012, it no longer had any diplomatic property in Canada to which diplomatic immunity could extend. The appellants relied on Article 1 of the Vienna Convention on Diplomatic Relations, (the "VCDR"), which had been incorporated into Canadian law by virtue of s. 3 of the Foreign Missions and International Organizations Act (the "FMIOA"). According to the appellants, given the fact that Article 1 of the VCDR defines "premises of the mission" as property used for diplomatic purposes, Iran no longer had any diplomatic property in Canada. The appellants also pointed out that article 45 of the VCDR, which obligates a receiving state to continue to protect diplomatic premises of a sending state even after diplomatic relations have been broken off, had not been incorporated into Canadian law.

With regards to the statements in the Certificate that the Iranian Property continues to enjoy diplomatic privileges and immunities in Canada, the appellants argued that such statements of fact in a certificate issued pursuant to s. 11 of the FMIOA are subject to evidence to the contrary. Therefore, pursuant to s. 25 of the Interpretation Act, facts in a s. 11 certificate are "deemed to be established in the absence of any evidence to the contrary". Since there was evidence to the contrary, the Certificate was not conclusive on the issue of whether the Iranian Property continues to enjoy diplomatic immunity.

Finally, the appellants argued that permitting execution against the Iranian Property is consistent with an October 4, 2022 statement of the Prime Minister, in which he described the downing of flight 752 as a "crime".

The Attorney General ("AG") took the position that the motion judge correctly found that diplomatic property subject to a s. 11 certificate was immune from execution. Whether or not the Iranian Property had been "used" for diplomatic purposes since 2012, the Minister's decision to accord diplomatic status to that Property was not justiciable except in relation to its constitutionality. The AG further argued that the fact that the Iranian Property was immune from execution was not inconsistent with public statements of the Prime Minister, or the purposes of the Justice for Victims of Terrorism Act (the "JVTA").

issues:

Did the motion judge err in finding that the Iranian Property continues to be immune from execution?
Does the decision of the motion judge violate the appellants s.7 and s.15 Charter rights?

holding:

Appeal dismissed.

reasoning:

Despite the 2012 amendments to the State Immunity Act and the enactment of the JVTA restricting state immunity in respect of states supporting terrorism, the diplomatic property of such states may continue to be immune from execution in Canada. That issue will turn on whether Canada has decided that it will continue to accord diplomatic status to the property of such a foreign state. The determination of whether Canada will accord diplomatic status to the property of a foreign state in Canada is one made exclusively by the Executive, through the exercise of the Crown's prerogative to conduct international affairs as well as the authority set out in the FMIOA. Such a determination is judicially reviewable only in cases where it implicates constitutionally protected rights or freedoms, or other legal rights or legitimate expectations of individuals.

There may in some cases be some uncertainty as to whether Canada has in fact accorded diplomatic status to the property of a foreign state in Canada. However, any such uncertainty will be conclusively resolved where Canada issues a s. 11 certificate under the FMIOA certifying that at the relevant time, identifiable property of a foreign state in Canada enjoys diplomatic immunity. What matters was the intention of the Executive, of which the s. 11 certificate is the authoritative source, and which must therefore be treated as conclusive.

The Court held that this conclusion was entirely consistent with the Court's decision in Tracy, which held that, in determining whether Iranian property has diplomatic status, "the question becomes whether on the evidence the Minister had conferred diplomatic status on the Iranian Assets". To be sure, the Court in Tracy also held that it was appropriate for the motion judge in that case to have considered other relevant sources in determining whether Iranian property not referenced in a s. 11 certificate was entitled to diplomatic status. But Tracy affirmed that where Iranian property has been expressly identified in a s. 11 certificate as entitled to diplomatic immunity, such property is immune from execution or legal process.

It followed that, contrary to the submissions of the appellants, the issue of whether the Iranian Property was being "used" for diplomatic purposes did not arise. The Certificate established conclusively that Canada continues to extend diplomatic immunity to the Iranian Property.

The decision of the motion judge was legally correct. The Court held that a mere violation of the law, without more, does not engage Charter-protected interests.

Obolus Ltd. v. International Seniors Community Care Inc. , 2023 ONCA 708

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

Counsel:

D. Mylonopoulos, for the appellant

M. W. Shulgan, K.C., for the respondents

facts:

In November 2020, the appellant, International Seniors Community Care Inc. ("ISSC"), and the respondents, Obolus Ltd. and Composite Investments Ltd. ("Obolus"), entered into negotiations concerning the purchase of Obolus Technology Park, a large property in the municipality of Lakeshore. The parties signed an agreement of purchase and sale in March 2021. The agreement contained a Milestone Termination Option giving Obolus the right to terminate the agreement if ISSC did not complete a pre-consultation meeting with Lakeshore municipality within a set period of time. On February 26, 2021, before the agreement was executed, representatives from the municipality and ISSC met. Obolus terminated the APS in April 2021, just over four weeks after it was signed. The application judge refused to convert the application to an action. The application judge interpreted the contract to require that the pre-consultation meeting must have taken place after the agreement was signed.

issues:

Did the application judge err in not converting the application to an action given key evidentiary questions in dispute?
Did the application judge err in her interpretation of the Milestone Termination Option in the APS?

holding:

Appeal dismissed.

reasoning:

Majority Decision:

1. No.

The application judge's decision with respect to converting an application to an action under r. 14.05(3) of the Rules of Civil Procedure was entitled to deference. An appellate court will only interfere with such a determination if the "lower court misdirected itself, came to a decision that was so clearly wrong so as to amount to an injustice, or gave no or insufficient weight to a relevant consideration". The application judge referred to these principles, properly considered the reasons for conversion, and found them to be insufficient. The application judge resolved the matter entirely though an interpretation of that clause – finding that the clause required that the pre-consultation meeting take place after the APS was executed. In doing so, the application judge's approach avoided the need to address the February 26, 2021 meeting.

2. No.

The appellant argued that the pre-consultation meeting condition was met by the meeting held in February 26, 2021, and therefore that the application judge committed a palpable and overriding error in finding that the respondent could trigger the Milestone Termination Option in the APS. The application judge referred to the language in the Milestone Termination Option as "grammatically awkward," but concluded that the "clear intention of the parties" was to hold the pre-consultation meeting within four weeks after executing the APS. Therefore, the application judge was able to resolve the dispute based on the wording of the Milestone Termination Option alone, which reflected an intent to hold a pre-consultation meeting within four weeks after executing the APS. The application judge's finding that the condition in the APS had not been met and her interpretation were entitled to deference.

Dissenting Decision:

1. No.

Feldman J.A. addressed the proper approach to contract interpretation from Sattva Capital Corp. v Creston Moly Corp. At para. 47, Rothstein J. explained the modern approach to the interpretation of contracts including the importance of the words used and the surrounding circumstances. The starting point for the application judge's interpretation was the respondent's argument that if the pre-consultation meeting had already been held prior to signing the APS, that would render the inclusion of condition (i) in the March 14 APS meaningless. The first error with this logic is that it fails to consider and give effect to the actual words of the condition. The condition requires that a pre-consultation meeting be "completed", not that it "take place", within the designated time period. The broader approach of interpreting the factual circumstances to match a preferred interpretation of the contract, rather than interpreting the contract to match the factual circumstances, as instructed by the Supreme Court in Sattva at para. 47, is an error of law.

2. Yes.

The application judge concluded that the meeting already held on February 26 was not a pre-consultation meeting but "simply an initial or introductory meeting." This finding ran counter to all contemporaneous documentary evidence, which was unequivocal in referring to the meeting as a pre-consultation meeting. It was not open to the application judge to ignore the evidence from the parties and from Lakeshore that the meeting held on February 26 was a pre-consultation meeting.

SHORT CIVIL DECISIONS

2137073 Ontario Inc. v. Furney, 2023 ONCA 703

[Doherty, Lauwers and George JJ.A.]

Counsel:

M.F., acting in person

D. Campoli, for the respondents

Keywords: Civil Procedure, Appeals, Adjournments

Gamma Construction Ltd. v. Graham, 2023 ONCA 722

[Doherty, Nordheimer and George JJ.A.]

Counsel:

D. Ong and C. Prins, for the appellant

H. J. Hickman, for the respondents

Keywords: Torts, MVA, Causation, Vicarious Liability, Insurance Act, Amos v. The Insurance Corp. of British Columbia, [1995] 3 S.C.R. 405

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.

Canada: Court Of Appeal Summaries (October 23 – October 27) Blaney's Appeals

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Canada: Court Of Appeal Summaries (October 23 – October 27)
Blaney's Appeals