Court Of Appeal Summaries (July 7 To July 11, 2014)

Hi everyone. Below are this week's Court of Appeal summaries. Topics covered this week included child welfare, executive compensation, MVA, Rule 49, Insurance coverage/exclusions, the intersection between bankruptcy and construction law, defamation, mistake of fact, statutory and contract interpretation, and summary judgment.

Peoples Trust Company v Rose of Sharon (Ontario) Retirement Community, 2014 ONCA 533 [Endorsement]

[Feldman, MacPherson and Cronk JJ.A.] Counsel: J. Baichoo, for the appellant 2383431 Ontario Inc. C. P. Prophet and H. Murray, for the respondent Peoples Trust Company L. Brzezinski (Blaneys), for the respondent Deloitte & Touche Inc. in its capacity as court-appointed Receiver of Rose of Sharon (Ontario) Retirement Community

Keywords: Commercial Litigation, Motion, Adjournment, Discretion

Facts:

The appellant, 2383431 Ontario Inc. ("238"), became the assignee of a second mortgage on the property three months before the scheduled settlement hearing. On the hearing date, 238 wanted an adjournment but the motion judge did not grant one. 238 asserts it had no notice of the hearing and that it only retained counsel a day before.

Issue:

Did the motion judge err by not granting an adjournment on the hearing date to enable 238 to consider its position and file material?

Holding:

Appeal dismissed.

Reasoning:

The motion judge did not err because granting or refusing an adjournment is discretionary and is "entitled to deference on appellate review." There is no basis for interfering with the motion judge's decision.

Peoples Trust Company v Rose of Sharon (Ontario) Retirement Community, 2014 ONCA 534

[Feldman, MacPherson and Cronk JJ.A.] Counsel: J. Baichoo, for the appellant. C. P. Prophet and H. Murray, for the respondent Peoples Trust Company L. Brzezinski (Blaneys), for the respondent Deloitte & Touche in its capacity as court-appointed Receiver of Rose of Sharon (Ontario) Retirement Community

Keywords: Commercial Law, Priority Motion, Lien Reference, Construction Lien, s.243 Bankruptcy and Insolvency Act

Facts:

The appellant, Unimac Group Ltd. appealed an order of the Superior Court which declared that the respondent, Peoples Trust Company, was entitled to priority over all other interests that were claimed in various "Life Lease" units in Toronto's Rose of Sharon (Ontario) Retirement Community, save for all valid and prior construction lien claims. The appellant argued that the motion judge erred in his determination of the Priority Motion, which had been brought by the respondent and was separate from the Lien Reference, in which the appellant was a significant participant. The appellant also argued that the motion judge erred in his decision to not give effect to the appellant's security and equity interests at the Priority Motion.

Issues:

Did the motion judge err in his determination of the Priority Motion? Did the motion judge err in his decision to not give effect to the appellant's security and equity interests at the Priority Motion? Holding:

Appeal dismissed.

Reasoning:

No. The appellant's submission ignored two factors. Initially, the bifurcation of the security and construction lien issues had derived from a prior court order, which was not appealed by either party. In a later component of the priority of the security proceedings, the appellant had made submissions regarding the lien and construction lien component of the proceedings. On these issues, Mesbur J. in her endorsement held that the construction lien in question was being dealt with in a separate construction lien action and that when the quantum of the lien was determined, the issue of priority would then be decided in the greater receivership application. The appellant had not appealed that decision. The motion judge's order preserved the issues surrounding the construction lien and recognized that the two streams would eventually amalgamate. No. The court held that there was no grounds for appeal on this issue and agreed with the motion judge's rejection of these claims. Any concern on the part of the appellant that the receiver would make distributions to Peoples Trust Company and that the appellant would receive nothing was misplaced. The receiver was simply collecting assets at this time and could not make any distribution until all claims, including the appellant's, were dealt with by the court. Foulidis v Baker, 2014 ONCA 529

[MacPherson, Watt and Benotto JJ.A.] Counsel: P. J. Pape and A. M. Bolieiro, for the appellant G. Tighe and S. Thiele, for the respondent

Keywords: City Council, Untendered Lease Contract, Defamatory Letter, Qualified Privilege

Facts:

Tuggs Inc. ("Tuggs") operated the Boardwalk Café in the Beaches area of Toronto under a long-term (20 year) exclusive lease. In 2006, Foulidis prepared a proposal on behalf of Tuggs promising an investment of $20,000,000 in the Boardwalk Café in return for another long-term lease. In 2007, City Council voted to approve the Tuggs proposal and began negotiations. This decision attracted media attention. In 2010, Baker filed his nomination papers as a candidate for City Council in the election, and made the untendered nature of the Tuggs deal an issue in his campaign. On the day that City Council was to vote on the Tuggs lease, Baker delivered a letter marked "confidential" to the City Clerk asking for a full audit of election finance donations and a full investigation by Toronto Police. City Council voted to approve the Tuggs lease. Foulidis brought an action against Baker for defamation. The trial judge concluded that Baker's letter was protected by qualified privilege. The appellant appealed.

Issues:

Did the trial judge err in finding that the statements made in Baker's letter: gave rise to qualified privilege? were not motivated by malice? Did the trial judge err in making a costs order against the plaintiff at trial? Holding:

Appeal dismissed in its entirety. The Baker letter had been delivered to City Council on an occasion of qualified privilege.

Reasoning:

(a) No. There was no palpable and overriding error in the trial judge's finding that the letter was protected by qualified privilege. The timing and manner of the communication were reasonably appropriate. The letter was only sent to a restricted constituency and was treated as "confidential." (b) No. There was no palpable and overriding error in the trial judge's finding that the defendant was not motivated by malice. The trial record was barren of any evidence that Baker directed animosity or ill-will towards Foulidis. No. The trial judge did not err in principle nor make an award that was plainly wrong by refusing to deny the defendant his costs. Baker acted in the public interest, not irresponsibly, abusively or offensively. Foulidis v Ford, 2014 ONCA 530

[MacPherson, Watt and Benotto JJ.A.] Counsel: P. J. Pape and A. M. Bolieiro, for the appellant G. Tighe and S. Thiele, for the respondent

Keywords: Municipal Election Campaign, Media Interview, Libelous Remarks

Facts:

During the municipal election campaign in 2010, Councillor Robert Ford, a candidate for mayor of the City of Toronto, was interviewed by the editorial board of the Toronto Sun newspaper. His platform called for greater accountability and transparency at City Hall. In the interview, Mr. Ford made critical comments about a City contract with the Boardwalk Café, a restaurant owned by Tuggs Inc. ("Tuggs"), located in the Beaches area of Toronto on City property. Foulidis was...