This Week at the Ontario Court of Appeal - January 13, 2012

Each week, Wise Blog looks at recent decisions from the Ontario Court of Appeal.

Tuerr Holdings Inc. v. Vrankovic

The appellant, Peter Vrankovic, appealed from an order granting summary judgment to the respondent, Tuerr Holdings Inc., on the appellant's guarantee of a second mortgage on a commercial property owned by Cambridge Place Commercial Corporation ("Cambridge"). The appellant was the president and director of Cambridge.

The respondent served a Notice of Intention to Enforce Security on Cambridge and a Notice to Attorn Rents on Cambridge's tenants as a consequence of Cambridge being in default on its second mortgage to the respondent. On May 14, 2010, the parties executed a Minutes of Settlement and Forbearance Agreement. The respondent agreed to suspend any further enforcement proceedings on the mortgages until September 5, 2010. This agreement was contingent on Cambridge paying the arrears owing to the respondent and keeping its first mortgage on the property, held by Meridian Credit Union (Meridian), in good standing. Moreover, the Minutes of Settlement and Forbearance Agreement were confirmed by a consent court order.

Contrary to their agreement, Cambridge failed to pay the arrears owing to the respondent and defaulted on its first mortgage to Meridian. As a consequence, Meridian obtained an order appointing a Receiver to sell the property. Furthermore, the respondent commenced an action against the appellant on his guarantee of the second mortgage and obtained summary judgment on the claim.

The Court agreed with the motion judge that Cambridge breached the terms of the Minutes of Settlement and Forbearance Agreement by failing to pay the arrears owing to the respondent and by its default under the first mortgage provided by Meridian. Further, when Vrankovic signed the Minutes of Settlement, the respondent was unaware that Cambridge was already in default in its mortgage payments to Meridian (first mortgagee), and owed over $500,000 in municipal taxes on the property. The Court reaffirmed the motion judge's conclusion that by signing the document in his personal capacity, the appellant waived his right to raise any previous deficiencies in the respondent's enforcement proceedings in response to the motion for summary judgment.

The Court dismissed the appellant's position that Meridian verbally agreed to forbear on enforcement of its first mortgage and to permit Cambridge to pay reduced rent so that it could pursue lease negotiations that would yield increased revenue from existing or potential tenants. The appellant submitted that this evidence served a viable defence to Meridian's assertion that it was entitled to enforce its mortgage security. Additionally, the Court noted that the motion judge correctly rejected the appellant's assertions of an oral forbearance agreement with Meridian, as these assertions were not supported by any documentary evidence, were inconsistent with the terms of the first mortgage and failed to adduce any convincing evidence that Cambridge lost prospective tenants as a result of the respondent's actions.

The Court added that Cambridge was hopelessly in debt, in breach of the terms of the first mortgage and could not be rescued by any extended lease arrangements that were a long ways away from completion. As a result, the Court found that the appellant failed to raise any genuine issues requiring a trial.

Warren Woods Land Corporation v. 1636891 Ontario Inc.

The primary issue on appeal was whether the appellant satisfied the three criteria for the granting of a stay under rule 63.02(1)(b) of the Rules of Civil Procedure.The order sought to be stayed was an order removing all notices filed by the appellant on the land of the respondents (the "Owner"). The application judge held that the appellant did not have an interest in the land in question at the time the notices were registered.

Article 3.14 of the Development Management Agreement between the appellant and respondent contained a provision, which gave the appellant an option to purchase the land. The respondent was disappointed with the appellant's work and advised the appellant that it wished to terminate the Agreement. The respondent did not take the required steps to terminate as contemplated by the Agreement.

The appellant registered the notices in question on October 16 and 28, 2009, claiming entitlement to an unregistered interest in the Owner's property pursuant to s.71(1) of the Land Titles Act. The respondent subsequently sent a Notice of Complaint to the appellant on August 8, 2011, which referred to default on the part of the appellant. The appellant replied to the respondent's Notice of Complaint by letter a two and a half weeks later, providing its understanding of their agreement. Further, the respondent claimed to have formally terminated the Agreement on August 30, 2011 and brought an application to have the notices that the respondent registered on title removed.

Additionally, the appellant claimed that the fact the Agreement created a contingent option to purchase land signified that it had an interest in the land. The respondent submitted that the issue whether an interest in land had been created was a question of mixed law and fact. Moreover, they stated that the appellant only had a right to an "incorporeal hereditament" at common law, which is an intangible right. In Bank of Montreal v. Dynex Petroleum Ltd, the court held, "At common law, an interest in land could issue from a corporeal hereditament but not from an incorporeal hereditament". Therefore, the respondent's position was that since the appellant only had a right to an incorporeal hereditament, it did not have an interest in the land in dispute at the time it registered the notices.

The respondent also argued that Article 3.14 of the Development Management Agreement was void because it contained no time restrictions and thus violated the rule against perpetuities. According to Politzer v. Metropolitan Homes Ltd, an equitable interest is void if it can vest beyond the perpetuity period of twenty-one years.

The Court articulated the three criteria for the granting of a stay:

1. The appeal must raise a serious question; 
2. The appellant must demonstrate that it would suffer irreparable hard if the stay were not granted; 
3. Finally, on a balance of convenience, the appellant must satisfy the court that it would suffer greater harm if the stay were not granted than the respondents would suffer if the stay were granted. 

In dismissing the appeal, the Court held that there was not a serious questioned to be determined. The appellant failed to provide any reasons why the common law prohibition on the creation of an interest in land from an incorporeal hereditament should not apply. Concerning the rule against perpetuities, the Court found that the appellant did not respond to the respondent's claim that the Agreement was void since it was in contravention of the rule.

Additionally, the Court noted that refusing a stay would not result in irreparable harm to the appellant. Irreparable harm is harm that cannot be quantified in monetary terms. The Court found that the appellant would not be able to enforce the Agreement by claiming specific performance, as it intended to sell the lands and it did not put forth evidence that the lands were unique in any fashion.

The appellant failed to satisfy the third criteria as the Court declared that the balance of convenience did not favour granting a stay. If a stay were granted, the respondent would not be able to refinance the lands and sell them pending the outcome of the appeal. On the contrary, if a stay were not granted, the appellant would not be without recourse as it would still be in a position to sue for damages for alleged breach of the Agreement.

Elsegood v. Cambridge Spring Service

One of the primary issues of this appeal was whether the Employment Standards Act ("ESA")could support an employee's claim for common law damages.

The respondent worked for the appellant employer for seven years as a spring technician. There was no written employment contract. The respondent was laid off on two occasions. After the first occasion, he was recalled to work only to be laid off again approximately seven weeks later. The cumulative duration of the layoffs exceeded the statutory maximum of 35 weeks within a 52 week-period, as prescribed by s. 56(1)(c) of the ESA. Once the respondent's layoff period reached 35 weeks, he commenced an action for common law damages for wrongful dismissal rather than claiming termination pay under s.54 of the ESA. Holub Deputy J. awarded him $9,900 in damages reflecting a notice period of six months.

On appeal, the employer argued that an employee's employment status survives a statutory termination by the ESA.  It argued that the ESA and common law were independent regimes so that upon a statutory termination pursuant to the ESA, the employee was entitled only to remedies under the Act.

The Court did not agree. 

It held that the appellants could not rely on s. 56(1) of the Act, which provides that the employee is terminated "for purposes of section 54". The Court disagreed with the employer's position that the respondent was not terminated for all purposes, but only for the purposes of s. 54.  In fact, s. 56(1) prohibits an employer from terminating an employee without notice or payment in lieu of notice. The purpose of s. 54 is to prevent employers from avoiding their liabilities upon termination by pacing employees under a facade of indefinite layoff.

In holding that the ESA provides for the continued application of the common law despite its statutory termination provisions, the Court cited a passage by Iacobucci J. in Machtinger:

Section 4(2) states that a right, benefit, term or condition of employment under a contract that provides a greater benefit to an employee than the standards set out in the Act. I have no difficulty in concluding that the common law presumption of reasonable notice is a benefit...

The Court considered what would transpire if one accepted that the employee's employment at common law survived the operation s. 56(1). At common law, employers do not have a right to layoff employees. Unless there is an agreement to the contrary, a unilateral layoff by an employer is a substantial change in the employee's employment and is considered to be a constructive dismissal.

Employees are entitled to reasonable notice of termination, regardless of what an employment contract states. In Machtinger, one of the employees' contracts allowed his termination without notice, and the contract of the other individual allowed his termination on only two weeks notice. The trial judge found that the termination clauses were invalid because they violated the ESA. He held that the employees were entitled to seven and seven and a half months pay in lieu of notice respectively. On appeal, the Court agreed that the termination provisions were invalid, but held that the termination provisions supported the inference that the employees intended to have very short notice periods. The Supreme Court disagreed and stated, "If a term in null and void, then it is null and void for all purposes, and cannot be used as evidence of the parties' intention". Since the employees' contracts failed to address notice requirements, they were entitled to reasonable notice at common law.

The Court rejected the appellant's claim that an implied term in the employment agreement allowed the employer to place the respondent on indefinite layoff exceeding 35 weeks in a 52-week period. The Court noted that since the indefinite layoff provision failed to meet the ESA's minimum standard, it was void.  As a consequence, the Court declared that the implied term should not be read down but rather excised from the employment agreement.

R. v. Lalumiere

The appellant was convicted of two counts of counselling to commit murder against his ex-wife and her boyfriend. Prior to the convictions under appeal, the appellant accumulated 23 convictions for offences involving his ex-wife and her boyfriend ranging from uttering threats to criminal harassment. Various violence risk assessment tests conducted on the appellant indicated that he had a 70% likelihood of assaulting his ex-wife at least once in the next five years.

In 2007, the appellant was in jail for uttering threats and for breaching his probation order. During his time in jail, a confidential informant divulged to the police that the appellant desired to hire someone to kill his ex-wife and her boyfriend. On June 14, 2007, a police officer posed as a member of the Hells Angels and met the appellant in the visitor's area of the prison and told him that he understood that the appellant wanted to eradicate two individuals. The undercover officer provided the appellant with his phone number and the appellant was agreeable to the arrangement but he stated that he could not pay the officer until after his release at the end of the year. After failing to hear from the appellant over the ensuing two weeks, the officer returned to the jail and raised the issue once again with the appellant about having the two individuals killed. The appellant agreed to pay the officer $5,000 and later telephoned him to provide personal details about the targeted victims.

At trial, the appellant claimed that he knew all along that the undercover officer's intentions were not legitimate. The appellant asserted that he led the undercover officer on and planned to report him to authorities. Furthermore, prior to the undercover officer's meetings with the appellant, the police obtained a judicial authorization, which permitted the officer to secretly record his conversations with the appellant.  Also at trial, the appellant brought an application to exclude the audiotape of the June 27, 2007 telephone conversation under ss. 8 and 24(2) of the Charter. Moreover, the appellant applied to have evidence of his police interview excluded under ss. 10(a), (b) and 24(2) of the Charter. The trial judge found a breach of s.8 but rejected the rest of the appellant's applications.

On appeal, the appellant argued that the trial judge erred by failing to exclude the audiotape under s. 24(2) of the Charter, by failing to exclude the evidence of his police interview under ss. 10(a), (b) and 24(2) of the Charter, in his instructions to the jury and in his ruling on entrapment.

Concerning the ss. 8 and 24(2) Charter issue, the Court noted that the trial judge correctly applied the Collins factors in support of his conclusion that the evidence obtained should not be excluded under s. 24(2) of the Charter. Furthermore, the Court stated that the Grant factors favoured admission of the evidence because the undercover officer's evidence concerning his telephone conversations with the appellant was admissible in any event.

In regards to the appellant's ss. 10(a) and 10(b) claims, the Court reviewed the trial transcripts and concluded that the appellant was advised of his 10(a) and 10(b) Charter rights and the police offered to assist the appellant in contacting counsel. Further, they asserted that the appellant invited the police to continue speaking with him and he declined to answer specific questions when he felt he should not do so without the benefit of counsel present.

Additionally, the Court found no legal errors in the trial judge's instructions to the jury, holding that the trial judge informed the jury that it was their recollection of the evidence that carried the most weight. More importantly, the jury heard the audiotape of the conversation between the undercover officer and the appellant as well as the appellant's explanation.

On the issue of entrapment, the Court saw no error in the trial judge's pronouncement that the police acted on reasonable suspicion and did no more than provide the appellant the opportunity to commit the crime. Also, they noted that the police were justified in giving credence to the tip received from the confidential informant and that the undercover officers' conduct fell short of inducement.

Poole v. Whirlpool Corporation

The appellant terminated the respondent without cause in early March 2010. The respondent brought a motion and was awarded summary judgment for wrongful dismissal, and the motion judge ruled that the respondent was entitled to a bonus in the amount of $5,598.38 per month during the 19-month notice period determined upon the motion.

The appellants challenged the motion judge's decision that the respondent was entitled to a bonus, her calculation of the bonus and her conclusion that no genuine issue requiring a trial arose concerning the respondent's bonus claim.

The appellants argued that in order to qualify for a bonus under the applicable Bonus Plan, the respondent was required to be actively employed on December 31st of the year for which the bonus was claimed. Since the respondent was terminated in March 2010, he was not eligible for a bonus in 2010 or 2011.

The Court found that the motion judge did not err in her rejection of this position. The Court held that the bonus eligibility stipulation relied on by the appellants was not incorporated in the respondent's letter of employment. Moreover, there was no evidence that the stipulation was drawn to the respondent's attention at any time, whether in writing, orally, by means of the appellants' internal intranet communication system, or that he had ever agreed to it. Furthermore, the Court noted that the appellant's failure to cross- examine the respondent on his affidavit material, in which he swore that he never agreed to the stipulation, precluded any reliance by the appellants on the stipulation to defeat the respondent's bonus claim.

In regards to the motion judge's calculation of the bonus, the Court held that the motion judge was correct in her analysis as to the appropriate method for the bonus calculation. Finally, the Court found that the motion judge did not err in her ruling that no genuine issue requiring a trial arose in regards to the respondent's entitlement to a bonus or the method of calculating the bonus.

In dismissing the appeal, the Court concluded that once it was determined that the respondent was wrongfully terminated, the determination of his bonus was straightforward and based on evidence that was mainly uncontested.

 - Alim Ramji, Toronto

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This Week at the Ontario Court of Appeal: 11-10-14

Each Week, Wise Law Blog reviews recent decisions from the Ontario Court of Appeal.

Ireland v. Ireland

This case involved a mother's resistance to the enforcement of a foreign custody order. The Superior Court of Fulton Country in the State of Georgia granted sole legal custody of the parties' children to the respondent father. The appellant failed to attend the Georgia Court but she was given an opportunity to participate via Skype. However, Tuscon J. stated that the appellant neglected to locate a computer to access Skype.  As a result,  she failed to present any evidence establishing that awarding her sole legal and physical custody of her children would be in their best interests.

The following month, the appellant filed an application in the Ontario Superior Court of Justice for custody of the parties' children, child support and a restraining order.  Her position was that the children would suffer serious harm if they were returned to the respondent because they had allegedly previously been subject to physical and emotional abuse during the parties' relationship. The respondent moved to have the order of Tuscon J. of the Georgia Court recognized and enforced in Ontario pursuant to s.41 of the Children's Law Reform Act. The appellant applied for and was granted an adjournment on March 24, 2011 until April 7, 2011, to the motion in order to give her time to retain counsel. During the intervening period, the appellant applied to the Superior Court for another adjournment on the basis that she wanted to change the venue of the hearing from Oshawa to Toronto, which was rejected by the court. 

The motion proceeded on April 7, 2011 and Ferguson J. enforced the Georgia Court's order. The mother was ordered to surrender the parties' children to the father. The mother subsequently appealed Ferguson J.'s enforcement of the Georgia Court's order and her decision not to allow her to present viva voce evidence during the aforementioned motion.

The Court denied the appellant's request for an order that she be permitted to request various organizations to provide her with copies of all documents relating to her, the respondent, or their children. The Court noted that the appellant failed to request the documents at the appropriate stage in the proceeding and her litigation tactics unnecessarily expanded and slowed the proceedings. Moreover, if the Court permitted the documents, the appellant would have to make a fresh evidence application to have them admitted on the appeal.  The Court held that the documents would not meet the test for the introduction of fresh evidence on appeal, set out in R v Palmer.

The Court granted the respondent's motion for security of costs and ordered the appellant to pay the respondent $10,000.00 in costs, holding that her appeal was devoid of any merit and noting her pattern of delaying and expanding litigation.

Canadian Broadcasting Corporation v. Ontario

The Canadian Broadcasting Corporation ("CBC") had applied to the Superior Court for an order granting it access to a video that was entered as an exhibit at the 2008 bail hearing of the appellant Ishak Omar.  The Ontario Court of Justice had custody of the video. The application judge granted CBC access to the video on the condition that it would obscure Mr. Omar's identity in any subsequent use of the video. Mr. Omar appealed the order.

The CBC moved to quash the appeal on the basis that the Court had no jurisdiction and that Mr. Omar's appeal is to the Supreme Court of Canada with leave from that court pursuant to the Supreme Court Act. The appellant submitted that the appropriate forum for this appeal was the Ontario Court of appeal under s.6(1) of the Courts of Justice Act.

The Court dismissed the respondent's motion to quash the appeal. The Court's jurisdiction to hear the appeal turned on the characterization of the proceedings before the application judge. If the appeal was civil in nature then the Court of Appeal has proper jurisdiction.  However, if the proceeding was characterized as criminal, the appellant's only route is to the Supreme Court of Canada with leave of that court. Counsel for the respondents argued that the video came into possession of the Ontario Court of Justice in the course of a criminal proceeding and that this application was treated as a criminal matter in the Superior Court.  The appellant characterized the proceedings as civil, as the CBC sought access to his property. In rejecting the respondent's arguments, the Court noted that that the order under appeal was not made in the course of a criminal proceeding and had no effect on any ongoing criminal proceeding. Moreover, the Court stated that the appellant's fair trial rights were no longer at play and that the order under appeal did not rescind or vary any order made in the appellant's criminal proceedings which concluded in 2009.  Therefore, the Court concluded that the appeal was properly brought to the Court of Appeal pursuant to s. 6(1) of the Courts Justice Act.

Donley Investments Limited v. Canril Corporation

The appellants, Canril Corporation, appealed a judgment of the Superior Court of Justice holding it liable in negligence and nuisance for water damage caused to the neighbouring basement of the respondent Donley Investments Limited.  The appellants submitted that the trial judge erred both law and in fact.  The Court agreed with the appellant's position and set aside the trial judgment and ordered a new trial.

The Court of Appeal held that the trial judge made three significant legal errors. The first  occurred when the trial judge erroneously shifted the burden of proof onto the plaintiffs to rebut the presumption of negligence when in fact there was no scientific confirmation of causation that water flowed from the appellants' building to the respondent's premises.

The Court found that the  trial judge made a further, substantial legal error when she held that the appellants had owed a duty to the respondents to join them in their claim against the City for the water infiltration that occurred in February 2003. Both the appellants and respondents' buildings were infiltrated with water as a result of an open city water main. The appellants made a claim against the City for the damage to their basement and suggested that the respondent follow suit.  The respondent failed to adhere to the appellant's request.  The Court stated that they did not see any legal basis for the trial judge's imposition of a duty to assert its claim.

Additionally, the appeal court ruled that  the trial judge erred in her causation analysis. There was no scientific evidence establishing a causal link between the damage to the respondent's building and any wrong committed by the appellants.  The trial judge made no reference to the "but for" test for causation in her reasons for judgment. Instead, the trial judge applied a more lenient test for causation applied in Athey v. Leonati. The Court asserted that the trial judge's omission in applying the standard "but for" test for causation was not justified.

- Alim Ramji, Toronto

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This Week At The Ontario Court of Appeal: 11-05-20

Each week, Wise Law Blog reviews recent decisions by the Ontario Court of Appeal.

R. v. Roncaioli. An appeal in a manslaughter case where the convicted defendant was accused of killing his ailing wife by injecting her with two different types of anaesthetics in fatal doses. Mr. Roncaioli, at trial, maintained that he had only injected his wife with therapeutic doses of the two drugs, and that his wife had injected herself with the fatal doses. Mr. Roncaioli appealed on a number of grounds.

His first ground of appeal was unreasonable delay; there had been a delay between his arrest and his trial of 48 months, and slightly more than 19 months of that delay was characterized by the trial judge as institutional delay. This was slightly more than the reasonable institutional delay guideline set out in R. v. Morin, but only slightly, and thus the trial judge allowed the case to proceed. Mr. Roncaioli appealed on the grounds that some of the delay had been mistakenly characterized by the trial judge as defense delay instead of institutional delay, as his lawyer had requested an additional delay of six months due to having a murder trial immediately following Mr. Roncaioli's. The Court of Appeal was not impressed with this line of argument, as the gap in between the two trials would likely have been nearly a month, which the Court found was adequate preparation time.

His second ground of appeal was that the judge unfairly agreed with the Crown's position that a guilty count of manslaughter was possible either through criminal negligence or through aggravated assault, and that this confused the jury. The Court of Appeal did not agree with this ground of appeal either; the Court stated that although elements of both types of manslaughter overlapped in this case's facts, it nonetheless remained that proving negligence and proving assault were two different things entirely.

Mr. Roncaioli also appealed on the ground that the trial judge wrongly instructed the jury to consider his potential motive for committing the crime as he was not charged with murder. The Court disagreed again, as the trial judge had expressly told the jury that Mr. Roncaioli was not charged with murder, had marshalled the evidence demonstrating that perhaps his wife had committed suicide, and finally stated that although not necessary to prove manslaughter, evidence of motive could be used in assessing the likelihood of the defendant committing the crime.

His final ground of appeal regarding his conviction was that the judge improperly instructed the jury as regards causation of manslaughter. Initially the trial judge properly instructed the jury as regards intervening cause in this case, but during a second set of instructions the trial judge failed to remind the jury that nothing else - such as action by the appellant's wife - could intervene to cause the death if he were to be found guilty. The jury noticed this omission, and requested further instruction: the judge correctly instructed them the third time around, re-emphasizing her original instructions. The Court pointed out that the judge repeatedly and correctly instructing the jury was the opposite of confusing them and dismissed this ground of appeal.

Mr. Roncaioli also appealed his sentence, arguing that it had been set on the basis of unlawful act manslaughter but the jury's verdict had not been clear as to whether his manslaughter conviction was because of the aggravated assault or because of criminal negligence, and he was therefore entitled to the benefit of the doubt and have his sentence treated as manslaughter via criminal neligence, which he contended was "not as morally blameworthy as unlawful act manslaughter." The Court disagreed, stating that it was open to the trial judge to determine how manslaughter had occurred and that her sentence was reasonable given the nature of the case. Read-the-whole-case rating: 2.

B & M Handelman Investments Ltd. v. Curreri. Mr. Curreri was unemployed and in his sixties when a friend and business advisor suggested that he raise money for a business opportunity overseas by mortgaging properties owned by his father. (Mr. Curreri impersonated his father in order to do this.) The monies raised have since disappeared. The mortgagors commenced an action against Mr. Curreri and obtained a Mareva injunction against him, which included $250,000 Mr. Curreri had won in a Keno lottery. Mr. Curreri did not defend the action and the mortgagors successfully moved for partial default judgement.

Meanwhile, Mr. Curreri was arrested and charged with twenty counts of fraud over $5,000. The mortgagors moved to have Mr. Curreri's lottery winnings be paid to the sheriff so they could collect; Mr. Curreri responded with a cross-motion that about half of the money be paid to his lawyers in trust to defend the action, the criminal proceedings, and for him to live upon. Despite Mr. Curreri successfully demonstrating that aside from the lottery winnings, he had no income beyond $600 a month in CPP payments, and claiming that he intended to defend the civil action and move to set aside the partial judgement, the motion judge granted the mortgagors' motion. Mr. Curreri appealed.

The Court dismissed his appeal. Mr. Curreri had only stated an intention to set aside the partial judgement, and had not brought a motion nor delivered a statement of defence; further, on the record before the Court, there appeared to be no defence available to him, and he continued to affirm that he had no idea where the lent money had gone. The Court noted that Mr. Curreri's counsel had formed an argument that made no reference as to a potential defence for him, because their position was that the money was not proprietary and therefore no merit was needed to be shown; the Court was extremely dismissive of this approach and stated that in light of it they could not grant special consideration to Mr. Curreri. The Court also stated that given the lack of a presented defence of merit, it could not allow Mr. Curreri to access the money for his criminal defence. Read-the-whole-case rating: 2.5.

- Christopher Bird, Toronto

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This Week At The Ontario Court of Appeal: 11-04-21

Each week Wise Law Blog reviews recent decisions from the Ontario Court of Appeal.

Smith v. Casco Inc. An appeal in a case where the plaintiff was suing her husband's employer. Ms. Smith's husband worked for Casco for 39 years and was offered an early retirement with pension in 2000, with a variety of pensions from which to select. The default option would have provided Ms. Smith with survivorship benefits for life; however, her husband selected a different option, which provided greater benefits to him but had no survivorship benefits to his wife beyond 2005. In order to consent to this, Ms. Smith had to sign a spousal waiver, which upon her cursory reading she mistakenly believed provided her with a lifetime survivorship benefit.

Mr. Smith died in 2003, at which time Ms. Smith learned of the actual survivorship clauses and brought action against Casco for negligent misrepresentation. The trial judge found for Ms. Smith and awarded her damages, equivalent what she would have received if her husband had selected the default pension with survivorship benefits for life. Casco appealed to the Divisional Court, which agreed with the trial judge in a split decision.

Casco then appealed to the Court of Appeal.

Casco raised a number of grounds, but the Court apparently considered only one argument to be of import. According to the Pension Benefits Act, survivorship benefits are required to be in every pension unless the persons entitled to those benefits sign a waiver in in the form approved by the Office of the Superintendent.

The Casco waiver form deviated from this form in multiple ways: it did not have a standalone statement in bold type, as per the standard Superintendent-approved waiver, stating that by signing the document entitlement pursuant to the Act was waived, nor was it titled "Waiver of Joint and Survivor Pension" as the approved waiver is, nor did it state in bold type that before signing each person should obtain independent legal advice.

Casco's failure to provide a waiver of the prescribed form was the reason that Ms. Smith was successful both at the trial level and then in her appeal to the Divisional Court, and the Court of Appeal again agreed with Ms. Smith and found for her, awarding costs to her as well. Read-the-whole-case rating: 2.

Whelan v. Ontario Racing Commission. Mr. Whelan took issue with a number of the terms of the Access Agreement of the Woodbine Entertainment Group, which runs horse racing events on its racetracks, and refused to sign the agreement. As a result, he was not permitted to race at WEG racetracks. He was informed by the onsite Ontario Racing Commission judge that he had to sign in order to be allowed to race, so he then appealed that decision to an ORC panel, which dismissed his request for a declaration that he need not sign the agreement. Mr. Whelan then appealed that decision to the Divisional Court, which did not agree that only the ORC's rules (as opposed to WEG's) can regulate racing, but nonetheless agreed with Mr. Whelan in that the ORC decision allowed WEG to arbitrarily exclude him from racing without a hearing, and that this was not acceptable. WEG appealed the Divisional Court's decision.

The Court of Appeal agreed with WEG and allowed its appeal, reversing the Divisional Court's decision. The Court first pointed out that the ORC's decision was not in respect to an agreement that denied him the ability to be heard by the ORC, and further that the agreement did not give WEG the right to arbitrarily exclude him. The Court also found that the Divisional Court did not give due consideration to the public's interest in requiring that Mr. Whelan sign the agreement.

The Court felt that the reasonableness standards set forth in Dunsmuir v. New Brunswick were upheld by the ORC. It held that the ORC's reasons showed that that body had considered all interests and explained its decision sufficiently, and listed the public interest considerations requiring Mr. Whelan's agreement in detail. Read-the-whole-case rating: 2 unless you'd like to read a good example of how administrative law appeals are handled in the post-Dunsmuir era.

R. v. Valovic. Mr. Valovic and his company were summarily convicted of multiple counts of GST and income tax evasion, as well as filing false income tax returns (along with his non-appealing wife, also convicted on similar multiple counts) and sought leave to appeal the decision. The Court of Appeal held that this was a case where leave to appeal should not be granted.

Firstly, the Court disagreed with Mr. Valovic's argument that the appeal would determine what sort of evidence in addition to a discrepancy between return and actual net worth is required to prove actus reus of tax evasion, primarily because the issue was addressed in 2008 in R. v. Hunter, where it was made clear that the discrepancy alone was enough to prove actus reus.

The Court also found that the appeal centred on two statements made by the trial judge, neither of which merited an appeal. In the first of these two statements, the trial judge stated that electricians, as a trade, were "notoriously likely to involve cash transactions more or less depending on the inclination of the tradesman." Mr. Valovic argued that this was a demonstration of bias on the part of the trial judge. The Court disagreed, holding that in context, the statement was addressing the nature of Mr. Valovic's method of operating his business, rather than expressing attitudes towards electricians generally. (The Court did note that the trial judge perhaps ought to have used different language to make this point.)

The second statement Mr. Valovic felt merited appeal referenced a potential deal he was considering with a contact in Nigeria. Mr. Valovic, in his conversation with the Nigerian contact, created a bank account in Slovakia for the purpose of receiving payment from a fraudulent invoice (although this plan was never executed, and the Crown submitted that this in conjunction with his email conversations demonstrated that Mr. Valovic knew that he had to pay income tax and had wilfully attempted to avoid doing so. Mr. Valovic argued that the trial judge's reaffirmation of this argument, especially after stating that he would not use the Nigerian-related evidence, constituted propensity evidence and was therefore inadmissible.

The Court disagreed with this as well, stating that the trial judge's comment was a throwaway, and that the lengthy discussion on-record about the impropriety of using the related evidence made it clear that the trial judge was not using the comment to prove mens rea for the offence. (Again, the Court noted that the trial judge's comment was "unfortunate and gratituous.") Read-the-whole-case rating: 3, because this is an interesting read of appeal grounds being smacked down, albeit politely, by the Court.

- Christopher Bird, Toronto

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This Week At The Ontario Court of Appeal: 11-04-15

Each week, Wise Law Blog will review recent decisions from the Ontario Court of Appeal.

Davis v. Crawford. An appeal regarding a lump sum spousal support award. Mr. Crawford and Ms. Davis had been in a common law relationship for 23 years before separating (he was 64, she 66). Both parties were retired, and their incomes were both solely generated by pensions. However, the sale of a cottage property had generated income, and Ms. Davis' application for support was for a lump sum equal to her share of the net proceeds of that sale.

The trial judge noted that Mr. Crawford's assets were difficult to quantify, due to his remaining part-ownership of his former business from which he had retired, a payment of dividends from his business to his daughter (which the trial judge characterized as him being the beneficial owner thereof), and the likelihood that Mr. Crawford was engaged in a business venture with his new partner of tearing down and rebuilding a cottage. She also noted that Ms. Davis made significantly less than Mr. Crawford, and ultimately awarded Ms. Davis a lump sum of $135,000 for support, which by the judge's figuring if invested would provide approximately $1000 monthly income for fifteen years.

Mr. Crawford appealed, arguing that the trial judge's conclusions about his assets beyond his pensions were speculative, and further that the decision was contrary to the principles set forth in Mannarino v. Mannarino about lump sum decisions only being appropriate in circumstances where there was risk that periodic spousal support payments might not be made, and suggested that the lump sum was an improper distribution of capital by the trial judge. He also pointed out that he had voluntarily paid Ms. Davis' living expenses for a time after the separation, and had also provided for her car payments and medical benefits.

The Court of Appeal dismissed the appeal. In regards to Mr. Crawford's assets, the Court found that the trial judge's findings went to his credibility given his lack of explanation why he gave so much money to his daughter or why he had not produced any recent financial statements of the company in which he retained a fifty-percent interest. (An attempt by Mr. Crawford to produce fresh evidence on appeal was also denied, as the Court determined none of the new evidence could be considered important enough or able enough to change the outcome of the case to overcome the failure to adduce it at trial.)

In regard to the appropriate use of lump sum payments, Justices Simmons and Lang noted that both the Family Law Act and Divorce Act provide authority to order a lump sum support payment as the court considered reasonable, and that the previous leading case, Mannarino, did not appear to fall in line with the legislative intent behind those two statutes. (This effectively overrules much of Mannarino, although the Court did allow that lump sum payments are primarily effective where periodic payments would be risky.)

Further, the Court also pointed out that any lump sum payment would have the effect of distributing capital; the important element would be what the intent of redistributing that capital would be, and in this case the Court felt that the trial judge's intentions were clear: she had both expressed concern that, given her belief as to Mr. Crawford's lack of credibility regarding his financial standing and his failure to make proper financial disclosure, there was a real risk he would fail to make periodic support payments, and had further explained her decision as to the amount by demonstrating - albeit with a lesser amount of detail than the Court would have liked - that it would provide for a monthly income for a defined period of time. Read-the-whole-case rating: 3.

R. v. Yadegari. Mr. Yadegari was tried and convicted of multiple offenses related to the export of two pressure transducers to an individual in Iran. Pressure transducers are instruments capable of measuring absolute pressure of a contained gas, and since they are an essential component of gas centrifuge enrichment of uranium, their sale and export to Iran is thus restricted under the United Nations Act, the Exports and Imports Permits Act, and the Nuclear Safety and Control Act.

Mr. Yadegari appealed on the basis that the trial judge improperly interpreted the portion of the regulations which defined how a pressure transducer would attract restriction under those statutes, and further appealed the reasonableness of his conviction and his sentence.

The Court dismissed the appeal on conviction. Mr. Yadegari's appeal on the technical properness of the conviction, based on his argument that a restricted pressure transducer's three pressure sensing elements would be constructed from sixty percent nickel by weight or greater, and in his case two of the three elements were made of 72 percent nickel by weight. The Court went to the listed Specifications which stated that "pressure sensing elements made of or protected by [a specified metal or metal alloy] with more than 60% nickel by weight," and decided that the trial judge's decision satisfied this requirement; "pressure sensing elements" did not necessarily mean all elements of the transducer. The Court also summarily dismissed an argument that the trial judge's findings as to the accuracy of the transducers was in error by demonstrating that the transducers did not satisfy the area of concern within the specifications.

The appellant also attempted to argue that his conviction on the count of knowingly exporting restricted goods to a person in Iran was improper, as the Crown had not proven the location of the purchaser nor his knowledge of that location, and had not proven that the transducers were to be used for a nuclear-related purpose. The Court agreed that the case against Mr. Yadegari on this count was primarily composed of circumstantial evidence, but pointed out that, viewed cumulatively, there was ample evidence to demonstrate that Mr. Yadegari knowingly attempted to export the transducers to a person in Iran, including emails that suggested that he send the transducers to "an embargoed country," e.g. Iran, and further that he informed one of his suppliers that his client was in Iran, and accordingly dismissed this line of appeal.

Mr. Yadegari also appealed his sentence. Although the Court was not sympathetic to his argument that his overall sentence was too harsh as it was based in part on United States sentence precedents (as Mr. Yadegari had not pled guilty and therefore attracted a higher sentence, and further his conduct was serious enough to merit his sentence), they did agree that since the trial judge had failed to find evidence that the transducers were to be used for a nuclear-related purpose, that his sentence on that count merited a slight reduction. Accordingly, they lowered his sentence on that count by three months. Read-the-whole-case rating: 1. Sounds like a sexy case; is not that thing at all.

R. v. Henry. An appeal by the defendant in a possession of cocaine for purpose of trafficking case. Mr. Henry's appeal was based on the fact that he felt his plea of guilty was not proper.

Mr. Henry pled guilty after his counsel heard a recording of police communications from a surveillance operation where Mr. Henry was not the target but was a person of interest. A police officer had claimed that he had seen Mr. Henry with a cellphone, which Mr. Henry was prohibited from having under an interim judicial release order. On the recording, counsel thought they heard one of the officers say that Mr. Henry had a cellphone, which would have provided the officers with the reasonable and probably grounds to apprehend him, which in turn gave them the opportunity to discover the cocaine he was carrying on his person. Trial counsel felt that this ended the possibility of a constitutional challenge against the apprehension of Mr. Henry and therefore advised their client to plead guilty.

However, Mr. Henry's counsel heard incorrectly: at no point on the recording did police mention that Mr. Henry had a cellphone. (They were not provided with a transcript when they heard the recording.) Upon listening to the recording, the Court of Appeal noted that not only did the police not say anything about seeing a cellphone, but further their utterances indicated that the police were aware that what they had seen did not so far give them reasonable and probable grounds to stop Mr. Henry.

The Crown argued that Mr. Henry did not have an absolute right to review every item of disclosure, and that his experienced counsel reviewed the communications and found that a defense was no longer viable and that therefore the plea should stand. However, the Court of Appeal disagreed, stating that a valid guilty plea demands that the plea be an informed one. As in this case, Mr. Henry was simply not properly informed about his potential options, as his counsel mistakenly told him he had no chance at a constitutional challenge. Therefore they upheld the appeal and ordered a new trial. Read-the-whole-case rating: 2.

- Christopher Bird, Toronto

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This Week At The Ontario Court of Appeal: 11-04-08

Each week Wise Law Blog will review recent decisions by the Ontario Court of Appeal.

Indalex Limited (Re). The Court of Appeal here was reviewing an appeal in a bankruptcy proceeding. Indalex Limited and its associated companies obtained protection from its creditors under the Companies' Creditors Arrangement Act in April 2009. It moved for approval of sale of its assets on a going-concern basis, generating approximately $151 million, and also to distribute proceeds of the sales to its debtor-in-possession (DIP) creditors; a previous court order created a "super-priority" charge for the DIP lenders, obligating that they be paid first in an insolvency situation. The $151 million proceeds were not enough to pay the claims of the DIP lenders. However, Indalex also operated two retirement plans, one for its salaried employees and one for its executive employees, both of which were underfunded by approximately $7 million together.

The United Steelworkers (acting for the salaried employee plan beneficiaries) and a group of former executives (acting for the executive plan beneficiaries) objected to the distribution of the sale of assets on the basis that the deemed trust provisions in the Pension Benefits Act applied to the unpaid amounts owing on their plans and that therefore the priority for monies from the sale should have been directed to the benefit plans first with the remainder then going to the DIP lenders. The CCAA judge hearing their motions dismissed them, finding that no deemed trust under the PBA existed in respect of either plan.

The CCAA judge's reasons for dismissing the motions of the executives and the USW differed with respect to the two plans. In the instance of the executives' plan, he noted that the windup of the plan had not yet taken place and therefore there were no deficiencies in payments to that plan, and thus no basis for a deemed trust. In the instance of the salaried employees' plan, the judge concluded that, since Indalex was permitted under law to make up the deficiency in the plan over five years, the amount of the payments did not actually become due until it was required to be paid, and since a due payment is what potentially created the deemed trust in this instance that therefore there was no trust in this respect either.

They appealed, with the support of the Superintendent of Financial Services and the actuarial firm appointed to administer the plans, both on the grounds that the judge had improperly decided a lack of deemed trust and also on the grounds that Indalex breached its fiduciary obligations. The principal secured creditor of Indalex's parent U.S. company, who was subrogated to the rights of the DIP lenders, requested that the Court of Appeal dismiss the appeals and that the monies be paid to it instead based on the "super-priority" charge.

The Court of Appeal allowed the appeals and declared that the pension claims took precedence over the DIP lenders' claims, and ordered the Monitor to pay amounts to satisfy the deficiency in each of the retirement plans.

s. 57(4) of the PBA deems an employer operating a pension plan to hold in trust an amount equal to the contributions "accrued to the date of windup but not yet due under the plan or regulations." The Court of Appeal agreed with the trial judge that under Ontario's Regulations, the employer had five years to make all of its required contributions, but distinguished amounts that were "accrued" from accounts that were "not yet due," on the basis that Supreme Court precedent makes clear that money is "due" when there is a legal obligation to pay it, whereas payments are "accrued" when they are constituted and the liability to pay exists.
The Court stated that s.57(4)'s intent was clearly meant to apply to all amounts owing to the pension plan, consistent with both its language and the overall intent of the PBA to establish regulatory supervision to protect and safeguard the pension benefits and rights of plan members. On this basis, the Court of Appeal decided that the deficiency owed to the salaried employees' plan was indeed a deemed trust under the PBA.

Regarding the executives' plan, the Court was less firm: they felt that the although the plain wording of the PBA did indeed concur with the judge's decision, that the idea that an insolvent company could avoid its pension obligations simply through inaction (e.g. by not winding up a pension plan) was troubling and potentially a "triumph of form over substance."

The Court also accepted the appellants' argument that Indalex breached its fiduciary obligations to the retirement plans. The Court went to Imperial Oil Ltd. v. Ontario as a precedent to explain how, when an employer is also the administrator of a pension plan, how its roles as administrator and employer differ:

Its role as employer permits it to make the decision to create a pension plan, to amend it and to wind it up. Once the plan and fund are in place, it becomes an administrator for the purposes of management of the fund and administration of the plan. If we were to hold that an employer was an administrator for all purposes once a plan was established, of what use would a power of amendment be? An employer could never use the power to amend the plan in a way that was to its benefit, as opposed to the benefit of the employees.

As regards Indalex, the Court stated that although Indalex had the right as an employer to commence proceedings under the CCAA, this did not make decisions regarding the pension plans strictly corporate ones; it still had the duties of an administrator to fulfill its fiduciary responsibilities to the beneficiaries of the plans, and when it did not make up the deficiencies in the plans while also giving DIP lenders a "super-priority" charge on sales of its assets, it was breaching that responsibility due to a conflict of interest, both under the common law and also as per s.22(4) of the PBA.

The respondents had argued that the appeals should be dismissed because they constituted collateral attacks on the court orders which gave the DIP lenders their "super-priority" rights. The Court disagreed, primarily because of how the CCAA regime operates: it is designed to deal with all matters related to an insolvency, and an Initial Order under the CCAA can varied or amended on an interested party's application. This is of course what the appellants did. Furthermore, the Court noted that there was precedent for collateral attacks being allowable where they did not offend the rule of law or the administration of justice. Read-the-whole-case rating: 4. This is a long and complex case, but the issues at hand are important ones and Justice Gillese lays them out in a comprehensive, explanatory manner.

R. v. Marquardt. This case is one of the Charles Smith cases, and another where the former pediatric forensic pathologist's history of providing evidence provided grounds for the appeal. In this case, the defendant's original appeal to the court was dismissed in 1998, but in 2009 as a result of the ongoing reinvestigation of the various cases where Smith had testified, the Supreme Court granted her application for leave to appeal and remanded the case to the Court of Appeal.

Ms. Marquardt was accused of the second degree murder of her two-year-old son Kenneth. At her trial, Smith testified that her son died of asphyxia and that his findings were consistent with the theory that the child had been suffocated. The Crown also led evidence that after the death Ms. Marquardt had confessed to others that she had killed Kenneth. Defence led evidence that Kenneth had suffered from epileptic seizures, and that Ms. Marquardt's statements after the death were made from guilt at her inability to save her son's life because she had forgotten how to perform CPR.

During the Chief Coroner's review of Smith's cases in 2005, experts consulted provided the opinion that there was insufficient evidence for Smith to have diagnosed asphyxia in Ms. Marquardt's case. In her appeal, Ms. Marquardt retained a forensic pathologist who stated that, in addition to there being insufficient evidence to diagnose asphyxia as cause of death, several other possible causes of death could not be excluded - including sudden unexpected death from epilepsy. The Crown retained a pathologist who agreed with these points, and then at that pathologist's suggestion both the Crown and the defense retained pediatric neurologists to provide opinions on the possibility that Kenneth's epilepsy might have contributed to his death. Both experts agreed that this was possible.

The Court therefore ordered a new trial. They felt, considering that the statements made by Ms. Marquardt and her description of events leading up to Kenneth's death were part of why she had been convicted, that an acquittal was not appropriate. However, regarding the obvious and massed expert disapproval of Smith's evidence, a new trial was absolutely necessary. Read-the-whole-case rating: 3.

- Christopher Bird, Toronto

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This Week At The Court of Appeal: 11-04-01

Each week, Wise Law Blog reviews recent decisions from the Ontario Court of Appeal.

Cleveland v. Whelan. A negligence tort case where a minor, represented by his parents as litigation guardians, sued a doctor for medical malpractice. Tyler Cleveland was born in 1996 and under blood tests, conducted as part of the Ontario Newborn Screening Program, was found on two occasions to have elevated levels of phenylalanine, an amino acid which in excess quantities can indicate potential for developing phenylketonuria ("PKU"), a congenital disorder which can interfere with normal brain development.

Tyler's doctor, Dr. Whelan, ordered a third screening test, which indicated a non-elevated level of phenylalanine, and no further clinical or laboratory followup was ordered at that time. However, these screening tests - the routine tests performed for the Newborn Screening Program - were only semi-quantitative and could not provide entirely accurate results.

Tyler was diagnosed in 1999 with severe PKU: his original screening samples were retested under a more rigorous and accurate test for phenylalanine, and it was found that all three samples had higher levels of phenylalanine than the semi-quantitative nature of the screening tests would have been able to determine. Tyler, through his parents, brought an action in negligence against various parties, including Dr. Whelan.

At trial, Dr. Whelan was found liable for negligence, and appealed.

His appeal was based on the argument that the trial judge had incorrectly failed to apply the principle in ter Nezuen v. Korn, where a medical practitioner will not be found liable for negligence if, despite choosing a treatment not endorsed by the majority of medical practitioners, said treatment was still generally recognized by medical science as a reasonable alternative adhered to by a respectable minority of competent practitioners.

At trial, Dr. Whelan called one expert witness to the plaintiff's three: Dr. Whelan's witness affirmed that his management of the case met the standard of care of a metabolic specialist at the time, while the plaintiff's witnesses obviously disagreed. Dr. Whelan also noted, in his appeal, that one of the plaintiff's expert witnesses admitted that they would respect and rely upon his opinion where it was given.

The Court of Appeal dismissed Dr. Whelan's appeal. Dr. Whelan's expert witness had stated that in 1996, it was common practice to repeat the standard screening test until it was determined whether a high level of phenylalanine was treatable, and that Tyler's results had been "suspicious" but insufficient to require diagnostic investigation, as the levels he had seemed to have were untreatable despite their elevation.

The Court of Appeal, however, agreed with the trial judge, who had felt that the expert witness had essentially characterized a second high-level test result as being both "suspicious" and reassuring enough to not require additional investigation. They also noted that Dr. Whelan, by his own admission, would order diagnostic testing upon three consecutive tests showing an elevated result where they were all untreatable, which belied his assertion that diagnostic testing was not necessary until treatable levels of phenylalanine could be demonstrated to exist.

Dr. Whelan also argued that since there was no protocols in place expressing the standard of care in Tyler's case at the time, that therefore the decision was up to his clinical judgement.

However, Dr. Whelan was being sued as the regional consultant and not Tyler's physician; although he was responsible for Tyler's care, he was not actively making decisions about Tyler's case. The Court characterized Dr. Whelan's actions in this incidence, then, as merely being his routine standard orders and not a conscious decision specifically relating to Tyler's well-being, which would not satisfy the "honest and intelligent exercise of judgement" to take reasonable care which would satisfy the doctor's professional obligations.

Read-the-whole-case rating: 3. The technical jargon takes a bit of plowing through, but once you get to it there's some interesting discussion of what constitutes the standard of care in medical malpractice cases.

Masters' Association of Ontario v. Ontario. This was an action brought by the Masters' Association specifically on behalf of case management masters. When the province of Ontario introduced case management masters in 1996, they were paid less than traditional masters. In 2000, the Masters' Association sued the province to obtain identical salary, benefits, and security for case management masters as existed for traditional masters.

The province settled at pre-trial, agreeing to tie case management masters' salaries to the SMG3 classification of public employees. However, since then, traditional masters' salaries have increased twice as fast as case management masters' salaries have.

The Masters' Association brought an application for a declaration that case management masters are entitled to the same salary, benefits and security as traditional masters. The application judge declared that s.53(1) of the Courts of Justice Act, which provides the Lieutenant Governor of Ontario with the power to address case management masters' renumeration, was unconstitutional as it failed to sufficiently provide judicial independence to case management masters (who might be influenced by public sector pay rate changes, either actual or potential).

The judge also found the requirement in s.86(5.2) of the Act that the Attorney General approve of any case management master's reappointment over the age of 65 to be similarly unconstitutional. However, the application judge refused to sever the provisions and read case management masters into the existing provisions applying to masters' renumeration, as the Masters' Association requested, stating that he felt the choice of remedy for the situation was best left up to the government. The Province appealed the finding on s.53(1); the Masters' Association cross-appealed seeking the severance and reading-in.

The Court of Appeal dismissed both appeals. In regards to the Province's appeal, although it was that the current pay system for case management masters satisfied the requirements for judicial independence of being objective and effective, the requirement of independence was not satisfied since there was no independent body serving as an intermediary between the government and the judiciary.

The SMG3 classification, established and controlled by the government, could not be considered independent in this sense. The Court of Appeal, however, did note that the problem lay not in s.53(1) of the Act, but in the manner by which case management masters' renumeration was determined in Order-in-Council 458/2003.

The Court also made short work of the Assocation's cross-appeal, stating simply that, following Mackin, it was not appropriate for courts to remedy the situation, since there were multiple ways to address the issue and that the choice of method should be left up to the government if possible. Read-the-whole-case rating: 2.5 since this decision mostly just serves to endorse a prior decision at length, but it's still important for the future of jurisprudence in Ontario.

- Christopher Bird, Toronto

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