Court Of Appeal Summaries (October 6 To 10, 2014)

Good afternoon. This week's OCA Summaries include an interesting decision for our corporate/commercial followers on when a guarantor has a right to seek contribution from his or her co-surety when the first guarantor made payment even though there was no default by the borrower nor demand for payment by the bank. Other subjects include oppression in the context of day to day operators overpaying themselves for more than two decades to the detriment of a silent partner, summary judgment in the discoverability and med-mal contexts, vexatious litigants, fraudulent conveyances, setting aside administrative dismissals for delay, a priority dispute between a condo corporation and a mortgagee with respect to common expense arrears, and child welfare, one of which is very rare, in that the CAS was found to have been overzealous in seeking the protection of the children when it was not warranted. This week, the Court also dismissed the appeal from the Superior Court's refusal to certify as a class action an overtime pay claim against CIBC.

Wishing everyone an enjoyable Thanksgiving long weekend.

Brown v Canadian Imperial Bank of Commerce, 2014 ONCA 677

[Doherty, Epstein and Benotto JJ.A.]

Counsel: J. Ptak, E. Karp and J. Brown, for the appellants P.D.S. Jackson, L.M. Plumpton, S.E. Whitmore, J.C. Field and E.C. Jamieson, for the respondents

Keywords: Class Actions, Class Proceedings Act, 1992, ss. 5(1)(c), Certification Motion, Common Issue, Overtime Pay

Facts: This was an appeal from the dismissal of a motion to certify a class action claiming overtime pay.

At the certification motion, the plaintiffs proposed a class definition consisting of employees who had worked for the respondents after 1996 and who held the job titles of Analyst, Investment Advisor ("IA") or Associate Investment Advisor ("AIA"). The motion judge dismissed the motion, concluding that eligibility for overtime pay could not be determined on a common basis for all members of the proposed class. Absent a common issue on the question of eligibility for overtime pay, the claim could not be certified under s. 5 of the Class Proceedings Act, 1992 ("CPA").

On appeal to the Divisional Court, the plaintiffs narrowed the proposed class, excluding Analysts as well as IAs and AIAs who had supervisory or managerial responsibilities. The Divisional Court dismissed the appeal. The Court placed considerable reliance on the analysis in McCracken v Canadian National Railway Co., 2012 ONCA 445 ("McCracken"), holding that despite the considerable narrowing of the proposed class, the determination of eligibility for overtime pay remained an employee-specific inquiry that was not amenable to resolution as a common issue. The Court agreed with the motion judge that none of the other proposed common issues rendered the claims suitable for certification.

Issue: Should this action be certified as a class proceeding?

Decision: No. Appeal dismissed.

Reasoning: The outcome of the certification motion turned on ss. 5(1)(c) of the CPA and, specifically, whether eligibility for overtime pay could be certified as a common issue. The appellants argued that eligibility for overtime pay raised a common issue. They argued that the job level designations and job titles used by CIBC were sufficient to distinguish between those with significant autonomy and/or managerial and supervisory responsibility (i.e. employees who were not entitled to overtime pay) from those who had no such autonomy or responsibilities (i.e. employees who were entitled to overtime pay).

In considering the above argument, there was no material misapprehension of the evidence by the motion judge or by the Divisional Court. The motion judge's findings were consistent with and supported by the evidentiary record. There was no evidence to support the appellants' position that CIBC used its employees' job level designations and job titles as bright line rules governing their eligibility for overtime pay. The CIBC guidelines made plain that a final determination of eligibility was based on the employment functions, duties and responsibilities of the particular employee and not his or her job title or classification.

Nor did the motion judge or the Divisional Court err in the legal analysis relevant to whether eligibility for overtime pay was a common issue. Doherty J.A. reviewed the case law that has developed and the principles to be applied in determining whether an issue satisfies the "common issue" requirement of ss. 5(1)(c) of the CPA. The Court in McCracken emphasized that the common issue inquiries under ss. 5(1)(c) will be evidence-driven. Sufficient commonality exists only where the evidence establishes some basis in fact to find that the functions, responsibilities and duties of all of the employees in the putative class are sufficiently similar that the classification of those employees as eligible or ineligible for overtime pay could be made for the class as a whole and without regard to the specific circumstances of individual employees. As in McCracken and in this case, the evidence showed a wide variability in the autonomy, duties and responsibilities of employees having the same job title or classification. The decision in Rosen v BMO Nesbitt Burns Inc., 2013 ONSC 2144 was distinguishable.

The motion judge and Divisional Court properly focused the common issue inquiry on the degree of variability of those job characteristics that were germane to the characterization of the employee as managerial/supervisory for the purposes of overtime pay eligibility. The common issue inquiry did not require identification of the "similarity of the primary functions" of the proposed class members.

Furthermore, the Divisional Court did not err in holding that the motion judge had not improperly engaged in an assessment of the ultimate merits of the plaintiffs' claim. The motion judge engaged in a factual inquiry to the extent required by ss. 5(1)(c) of the CPA and went no further than that.

Finally, the courts below did not err in failing to certify any of the other proposed common issues. Following the analysis in McCracken, it was clear that without a common issue of eligibility for overtime pay, the resolution of the other proposed common issues involving the terms of the employment contract would only minimally advance the litigation. In addition, two of the other proposed common issues were necessarily tied to the common issue of eligibility for overtime pay, and thus were also incapable of resolution on a class-wide basis.

Children's Aid Society of the Region of Halton v. E.M., 2014 ONCA 688

[Cronk, MacFarland and LaForme JJ.A]

Counsel: Diane B. Skrow, for the respondent Children's Aid Society of the Region of Halton Elizabeth McCarty and Kristin Knoepfli, for the respondent the Office of the Children's Lawyer

Keywords: Family Law, Adoption, Openness Order, Crown Wardship, Child and Family Services Act

Facts: The appellant appeals from the order of Trimble J. of the Superior Court of Justice dated July 18, 2014, quashing the appellant's appeal from the openness order granted by Zisman J. of the Ontario Court of Justice dated March 28, 2014, under the Child and Family Services Act (the "Act"), pertaining to the appellant's biological daughter, S.K. S.K. is now almost 15 years of age and has been in protection under the Act since 2008 – a period of approximately 6 years. The appellant argues that S.K.'s placement for adoption and, inferentially, her prior Crown wardship, are illegal and should be set aside and that S.K. should be placed with members of her extended maternal family.

Issue: Did the appellate judge err in quashing the appellant's appeal from the openness order?

Decision: No. Appeal dismissed.

Reasoning: The court noted that placement cannot be determined at an openness hearing. In addition, nothing on the record established any defect in S.K.'s adoption proceedings.

The appellant's arguments in support of her challenge to S.K.'s adoption and the openness order have already been considered on several occasions by various judges of the Ontario Court of Justice and the Superior Court of Justice. She has been unsuccessful throughout. The court believed that the appellant was attempting to relitigate core issues concerning her daughter's placement already determined by the courts.

The appeal judge of first instance carefully considered the background to this litigation and the grounds advanced by the appellant for reversal of the openness order and S.K.'s placement for adoption. The appeal judge also correctly concluded that there appears to be no statutory authority under the Act for an appeal of an openness order. In any event S.K. was believed by the court to be unprepared to consent to a more expansive openness order. In contrast, she did consent to her adoption by her adoptive parents and to the terms of the openness order. Contrary to her submission, the appellant's consent to the openness order was not required. The court determined that these considerations were fatal to the appeal.

Furthermore, the appeal judge referred expressly to the test for quashing an appeal and undertook an assessment of the merits of the appellant's appeal. Although he stated that it was "plain and obvious" that the appellant's appeal could not succeed, his reasons, read as a whole, confirm that he directed himself to the governing test for quashing an appeal and applied it properly to the facts before him.

Economopoulos (Re), 2014 ONCA 687

[Hoy A.C.J.O., Gillese and Lauwers JJ.A]

Counsel: Montgomery Shillington, for the appellants Constantine (Gus) Economopoulos and 1551666 Ontario Inc. Sean Flaherty, for the respondent Vida Prijic

Keywords: Leases, Mortgages, Estates, s. 2 of the Fraudulent Conveyances Act, Encumbrancers, Partition Act, Rule 66.02 Rules of Civil Procedure, Form 66A

Facts: This is an appeal from a decision granting a motion for a declaration that a lease was fraudulent within the meaning of...