Top 5 Civil Appeals From The Court Of Appeal (July 2014)

Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450 (Rouleau, Lauwers and van Rensburg JJ.A.), June 9, 2014 Harris v. Leikin Group Inc., 2014 ONCA 479 (Hoy A.C.J.O. and Sharpe and van Rensburg JJ.A.), June 18, 2014 Simpson Wigle Law LLP v. Lawyers' Professional Indemnity Company, 2014 ONCA 492 (Gillese, van Rensburg and Hourigan JJ.A.), June 25, 2014 Hincks v. Gallardo, 2014 ONCA 494 (Gillese, van Rensburg and Hourigan JJ.A.), June 26, 2014 Trillium Motor World Ltd. v. General Motors of Canada Limited, 2014 ONCA 497 (Doherty, LaForme and Lauwers JJ.A.), June 27, 2014 1. Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450 (Rouleau, Lauwers and van Rensburg JJ.A.), June 9, 2014 In this decision, the Court of Appeal considered the recent decision of the Supreme Court in Hryniak v. Mauldin. Ralph Canonaco, a home-builder, entered into a series of transactions with Alex Haditaghi, a mortgage broker, with respect to a property in Barrie. Disputes arose, and litigation followed. Alex first sued Ralph on two promissory notes which Ralph had signed personally and Alex believed were due and owing. Ralph responded with his own claim, accusing Alex and other parties of fraud and breaches of agreement. The lawsuits were consolidated into a single proceeding comprised of Ralph's action and Alex's counterclaim on the promissory notes. The motions judge granted summary judgment dismissing the action on the basis that it was precluded by the terms of a release which was authentic and valid. He did not, however, grant summary judgment on the counterclaim, instead ordering a half-day mini-trial pursuant to Rule 20.04(2.2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, to assess conflicting evidence about the promissory notes. After hearing from Alex, Ralph and Ralph's brother Frank, the motions judge concluded that the enforceability of the notes could not be determined summarily and that a full trial was necessary. Noting that the promissory notes and the release were signed at the same time and in the context of the same series of transactions, the appellants submitted that any uncertainty about the reliability of the evidence on the promissory notes, which led the motions judge to order the mini-trial, ought to have similarly influenced his conclusion about the validity of the release. If the evidence on the promissory notes was unreliable, the appellants argued that so too was that with respect to the release. The respondents countered that the procedure directed by the motions judge was consistent with the decision in Hryniak v. Mauldin, in which the Supreme Court encouraged motion judges to utilize the mini-trial procedure referred to in Rule 20.04(2.2) Writing for the Court, Lauwers J.A. acknowledged that the Supreme Court rejected the "full appreciation" test for summary judgment in Combined Air Mechanical Services v. Flesch, 2011 ONCA 764, finding that the Court of Appeal placed "too high a premium on the 'full appreciation' of evidence that can be gained at a conventional trial." Karakatsanis J. encouraged motion judges to utilize the powers granted under Rule 20.04(2.2) where they will allow the judge to reach a fair and just adjudication on the merits and will serve the objectives of timeliness, affordability and proportionality. Lauwers J.A., found, however, that the motions judge made a material error in principle, failing to assess the advisability of the summary judgment process in the context of the litigation as a whole. As Karakatsanis J. explained in Hryniak v. Mauldin, it might not be in the interests of justice for a motion judge to use the new fact-finding powers to grant summary judgment in all cases, such as against a single defendant, where such partial summary judgment might cause duplicative proceedings or inconsistent findings of fact. Because the release and the promissory notes were part of the same series of transactions, it was an error for the motions judge to refer the enforceability of the promissory notes to trial while summarily determining the enforceability of the release. The motions judge questioned the promissory notes because the parties "fabricated and executed documents that did not reflect the true state of affairs", and determined that they were therefore not amenable to enforcement on a motion for summary judgment. The release ought to have been treated in the same manner. Lauwers J.A. further noted that if the matter of the promissory notes went to trial, where a judge would have the opportunity to develop a deeper understanding of the case, it could result in a decision that would be inconsistent with the motions judge's binding conclusion that the release was valid and effective. Key to the motions judge's decision to determine the issue of the release were certain admissions made by Ralph during cross-examination on his affidavit. Lauwers J.A. noted that these statements came before the motions judge by way of a transcript; Ralph was not given an opportunity to address the admissions - which were not, in fact, made in relation to the release - at the mini-trial. Lauwers J.A. held that the motions judge erred in distinguishing between the promissory notes and the release on the basis of de-contextualized transcript evidence, and cautioned that in actions where credibility is a significant factor, judges must take great care in considering evidence without the benefit of the affiant's "authentic voice". The Court allowed the appeal, set aside the judgment and directed both the claim and counterclaim to proceed to trial. 2. Harris v. Leikin Group Inc., 2014 ONCA 479 (Hoy A.C.J.O. and Sharpe and van Rensburg JJ.A.), June 18, 2014 This appeal arose from a rift between the shareholders in a family business. Founded by the late Harry Leikin, the Leikin Group is a collection of real estate and property development companies, whose primary asset is College Square, a shopping centre in Ottawa. The Leikin Group was designed to remain a family business, with shareholders prevented from selling or transferring their shares to anyone other than the issue of Harry Leikin. Each of Leikin's eleven grandchildren held an equal number of common shares. When the relationship between them began to deteriorate, eight shareholders decided to sell their shares to the remaining three. Extensive negotiations ensued, central to which was the value of College Square. The parties acknowledged that the value attributed to the shopping centre would determine the amount the selling shareholders would receive. Ultimately, they agreed on a value of $60 million and executed a share redemption agreement whereby each member of the selling group received $3.395 million. A week later, the non-selling shareholders entered into an agreement with First Capital...