Court Of Appeal Summaries (December 1 – 5, 2014)

Hello again to everyone. Below are summaries of this week's Ontario Court of Appeal civil decisions (non-criminal). In an interesting Charter decision this week, Tanudjaja v Canada, the Court (2-1) rejected on the basis of justiciability a Charter challenge on whether the Charter guarantees the right to affordable housing. Among other grounds for dismissing the application on a preliminary basis and without hearing the merits was a determination by the Court that the matters complained of were matters of policy that are not justiciable. Justice Feldman dissented, so it will be interesting to see if the decision is appealed to the Supreme Court and whether leave is granted. Other topics covered this week included class actions (costs), dismissals for delay, insolvency (approving professional and legal fees of court-appointed receivers), condominium law (solicitor's negligence and negligent misrepresentation), real property (specific performance, leases, adverse possession, mortgages, title insurance), banking law (cheques, Bills of Exchange Act and conversion), summary judgment and more.

Wishing everyone a nice weekend.

Holley v. Northern Trust Company, Canada, 2014 ONCA 857

[Strathy C.J.O, Rouleau and Hourigan JJ.A.]

Counsel: Joel Rochon, for the appellant Jeff Galway, for the respondent The Northern Trust Company, Canada Christine Lonsdale, for the respondent The Royal Trust Company

Keywords: Costs, Class Proceedings Act 1991

Facts: The appellant's appeal was dismissed on the basis that the proposed class action was statute-barred. Both respondents were seeking costs of the appeal. The appellant submitted that there should be no order as to costs because the class action was brought in the public interest and raised a new point of law; thus, engaging s. 31(1) of the Class Proceedings Act, 1991. The appellant also argued that the appeal was reasonably brought and was founded on the improper conduct by the respondents in their administration of trust assets. Despite the above, the appellant submitted that the appeal was relatively straight forward and therefore no costs should be awarded.

Issue: Should the respondents be awarded costs?

Holding: Costs awarded. The amount of costs sought by the respondents was reasonable.

Reasoning: Yes. The Court agreed with the trial judge and rejected the appellant's submission of s. 31(1) of the Class Proceedings Act, 1991 and ordered costs in the ordinary course. The respondents had to deal with all the issues raised in the appeal which were significant and the time spent by the respondents was warranted. Furthermore, there was no finding of improper conduct by the respondents, as the appeal was dismissed simply on the basis that the claim was statute-barred.

Bank of Nova Scotia v. Diemer, 2014 ONCA 851

[Hoy A.C.J.O., Cronk and Pepall JJ.A.]

Counsel: Peter H. Griffin, for the appellant PricewaterhouseCoopers Inc. James H. Cooke, for the respondent Daniel A. Diemer No one appearing for the respondent The Bank of Nova Scotia

Keywords: Bankruptcy and Insolvency Law, Receiverships, Approval of Fees, Fairness and Reasonableness

Facts: This is an appeal of a motion judge's refusal to approve legal costs of $255,955 requested by a court appointed receiver on behalf of its counsel in a Southwestern Ontario cattle farm receivership. The farm and much of the cattle were ultimately sold for an amount sufficient to discharge the debt owed to The Bank of Nova Scotia. The receivership appointment order stated that the receiver and its counsel would be paid at their standard rates and charges, but it did not specify what the standard rates and charges were. The receiver asked the motion judge to approve receiver's fees of $138,297 plus disbursements for 408.7 hours spent — an average hourly rate of $338.38. It also asked the motion judge to approve the legal fees of the receiver's counsel of $255,995 plus disbursements. These rates reflected 397.6 hours spent at an average hourly rate of $643.75 by a downtown Toronto law firm. The motion judge found that counsel's efforts and the work involved were disproportionate to the size of the receivership, holding that after the size of the estate became known, the usual or standard rates were too high. The motion judge also took issue with the need for, and excessive work done by, senior counsel on routine matters. He rejected the receiver's opinion endorsing its counsel's fees, found that the number of hours reflected a significant degree of inefficiency, and that some of the work could have been performed at a lower hourly rate. He adopted the average London, Ontario rate of $475 per hour for lawyers of similar experience and expertise. He also expressly limited this case to the facts at hand, noting that his reasons should not be construed as saying that Toronto rates have no application in matters in the Southwest Region. He assessed legal fees at $157,500. The receiver appealed.

Issues: (1) Did the motion judge err by failing to apply the clear provisions of the appointment order which entitled the receiver's counsel to charge fees at its standard rates?

(2) Did the motion judge err by reducing the fees of the receiver's counsel in the absence of evidence that the fees were not fair and reasonable?

(3) Did the motion judge err by making unfair and unsupported criticisms of counsel?

Decision: Appeal dismissed.

Reasoning: (1) No. The Court endorsed the factors applicable to receiver's compensation in Re Bakemates International Inc. (2002), 164 O.A.C. 84 (C.A.). These include: the nature, extent and value of the assets; the complications and difficulties encountered; the degree of assistance provided by the debtor; the time spent; the receiver's knowledge, experience and skill; the diligence and thoroughness displayed; the responsibilities assumed; the results of the receiver's efforts; and the cost of comparable services when performed in a prudent and economical manner. The factors are not exhaustive and the fairness and reasonableness of the fees are the lynchpins of this analysis. Value provided should predominate over the mathematical calculation reflected in the hours times hourly rate equation.

The Court held that the initial appointment order stating that the compensation of counsel was to be paid at standard rates and the subsequent approval of the receiver's reports did not oust the need for the court to consider whether the fees claimed are fair and reasonable.

(2) No. The Court held that there were cases in which the fees generated by the hourly rates charged by a receiver will be reduced if the application of one or more of the Bakemates factors so requires. It also noted that there was no evidence before the Court that the standard rates were disclosed prior to the appointment of the receiver. The Court held that the motion judge properly considered the factors in Bakemates, it was open to him to reduce the legal fees, and that the motion judge's decision was owed deference.

(3) Yes. The Court found that motion judge made unfair criticisms of counsel. However, this was not fatal because the motion judge's decision was informed by the Bakemates factors.

Tanudjaja v Canada (Attorney General), 2014 ONCA 582

[Feldman, Srathy and Pardu JJ.A.]

Counsel: T. Heffernan, F. Faraday and P. Rosenthal, for the appellants J.E. Minor and S. Chace, for the respondent the Attorney General of Ontario M. H. Morris and G. Sinclair, for the respondent the Attorney General of Canada A. D. Griffin, for the intervener the Ontario Human Rights Commission A. Go and M. Eberts, for the intervener the Colour of Poverty/Colour of Change Network C. Milne, for the intervener the David Asper Centre for Constitutional Rights M. Chen and J. Esmonde, for the intervener the coalition of the Income Security and Advocacy Centre, the ODSP Action Coalition and the Steering Committee on Social Assistance V. Sinha, R. Agarwal and L. Posloski, for the intervener the Women's Legal Education and Action Fund M. Reynolds and R. Lax, for the intervener the coalition of Amnesty International Canada and the International Network for Economic, Social and Cultural Rights L. Letheren and R. Lang, for the intervener the coalition of ARCH Disability Law Centre, the Dream Team, Canadian HIV/AIDS Legal Network and HIV/AIDS Legal Clinic Ontario M. Jackman and B. Ries, for the intervener the coalition of the Charter Committee on Poverty, Pivot Legal Society and Justice for Girls

Keywords: Constitutional Law, Charter of Rights and Freedoms, sections 1, 7 and 15; Rules of Civil Procedure, Rule 21.01(1)(b), Motion to Strike Pleading, No Reasonable Cause of Action, Justiciability, Social and Economic Rights

Facts: The applicants-appellants brought a challenge under the Charter of Rights and Freedoms, alleging that actions and inaction on the part of Canada and Ontario have resulted in homelessness and inadequate housing. They submitted that the respondent governments have taken an approach that violates their s. 7 and s. 15 rights under the Charter. The core of their application provided: "Canada and Ontario have instituted changes to legislation, policies, programs and services which have resulted in homelessness and inadequate housing. Canada and Ontario have either taken no measures, and/or have taken inadequate measures, to address the impact of these changes on groups most vulnerable to, and at risk of, becoming homeless. Canada and Ontario have failed to undertake appropriate strategic coordination to ensure that government programs effectively protect those who are homeless or most at risk of homelessness. As a result, they have created and sustained conditions which lead to, support and sustain homelessness and inadequate housing." (Amended Notice of Application, para 14)

The appellants did not expressly challenge any particular law or state action which they asserted violated s. 7 and/or s. 15 of the Charter. Rather, they submitted that the social conditions by the...