Court Of Appeal Summaries (December 22 – 26, 2014 And December 29, 2014 – January 2, 2015 )

Hello again. I hope everyone enjoyed the holidays and wish you all the best for 2015. Following are the Ontario Court of Appeal Summaries for the weeks of December 22 and 29, 2014. We will resume our regularly scheduled Friday afternoon postings commencing this Friday. Topics covered below include defamation, family law, assessment of lawyers' accounts, insurance law, limitation periods, summary judgment, enforcement of international arbitral awards, medical malpractice and complaints to the Chief Justice under section 86.2 of the Courts of Justice Act with respect to alleged judicial misconduct. Perhaps the most significant decision released in the last two weeks was the decision in PS v Ontario, in which a five member panel of the Court of Appeal declared certain provisions of the Mental Health Act unconstitutional for not providing the Consent and Capacity Board with enough powers to appropriately deal with involuntarily detained persons suffering from disabilities.

Ariston Realty Corp. v. Elcarim Inc., 2014 ONCA 925

[Juriansz, LaForme and Lauwers JJ.A.] Counsel: D. A. Taub and E. Gersh for the appellants/respondents by way of cross-appeal B. B. Skolnik, for the respondent/appellants by way of cross-appeal

Keywords: Costs

Facts: The appellants realized substantial success on appeal. The central issue at both levels was the respondents' claim of commission earned. An additional issue on appeal was the personal liability of Ms. Mascall.

Holding: Costs of the appeal in favour of the appellants are fixed in the amount of $20,000 all inclusive. Costs order of the trial judge set aside and trial costs fixed in favour of the appellants in the amount of $130,000 all inclusive.

Reasoning: The appellants are entitled costs at trial and on appeal, subject to some reduction to recognize the subsidiary success of the respondents on their claim of quantum meruit.

Kassburg v Sun Life Assurance Company of Canada, 2014 ONCA 922

[Watt, van Rensburg and Pardu JJ.A.] Counsel: D. McDuff, for the appellant G. Larmer, A. Wray and N. Simmonds, for the respondent

Keywords: Insurance Law, Civil Litigation, Summary Judgment, Rules of Civil Procedure - Rule 20, Hryniak v Mauldin; Limitation Periods; Limitations Act, 2002 - ss. 22(5), 22(6), Consumer Protection Act, 2002 - s. 1; Contract Interpretation, Sattva Capital Corp. v Creston Moly Corp

Facts: The respondent Karen Kassburg, an employee of the North Bay Police Service, was insured under a group policy issued by the appellant Sun Life Assurance Company of Canada to the North Bay Police Association ("NBPA"), of which she was a member. The respondent's claim for long-term disability benefits, submitted to the appellant in 2008, was denied.

The respondent started an action claiming entitlement to the disability benefits in February 2012. The appellant brought a motion for summary judgment, asserting that the action was out of time, as both of the potentially applicable limitation periods, either under the insurance contract or the Limitations Act, 2002, S.O. 2002, c. 23, Sched. B, had expired.

The appellant relied on the one year limitation period under the insurance contract, which it contended had been grandfathered as a pre-January 1, 2004 contract limitation period (s. 22(2) of the Limitations Act, 2002) or as a limitation period provided under a "business agreement" (s. 22(5) of the Limitations Act, 2002). If the contractual limitation period was unenforceable, the appellant relied on the general two year limitation period under the Limitations Act, 2002.

The appellant's motion was dismissed, and the motion judge granted a declaration that the respondent's action was commenced within the applicable limitation period.

Issues: (1) Did the motion judge err in finding that the contractual limitation period was ambiguous and therefore unenforceable?

(2) Did the motion judge err in concluding that the statutory limitation period did not begin to run until after the respondent had exhausted the appellant's internal appeal process?

(3) If the motion judge did not err in dismissing the summary judgment motion, did he err in granting judgment in favour of the respondent on the limitation period issue, and not directing that issue to trial?

Holding: Appeal dismissed.

Reasoning: (1) No. The insurance policy consisted of the Contract Document and the Booklet, which was incorporated by reference into the contract. The limitation period was expressed in different terms in each. The motion judge properly considered the entire contract, and found that because the limitation period was not clear, as required under Boyce v The Co-Operators General Insurance Co., 2013 ONCA 298 ("Boyce"), it was not capable of being enforced against the respondent. The interpretation of a contract involves questions of mixed fact and law and an appellate court should not interfere with the interpretation of a contract by a lower court, in the absence of a palpable and overriding error of fact or an extricable legal error, including the application of an incorrect principle, the failure to consider a required element of a legal test or the failure to consider a relevant factor: Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53, at para 53.

(2) No. Whether a limitation period "expired prior to the issuance of a statement of claim is a question of mixed fact and law": Longo v MacLaren Art Centre Inc., 2014 ONCA 526. The question of when the respondent "discovered" her claim for the purposes of s. 5 of the Limitations Act, 2002 was, in the circumstances here, essentially a question of fact. The motion judge determined that the claim was discovered on February 24, 2011, the date of the letter in which the appellant advised the respondent that her final appeal had failed (as opposed to the appellant's contention that the claim was discovered by the respondent on December 4, 2008, when her claim for LTD benefits was initially denied). In arriving at this determination, the motion judge considered the correspondence between the parties where the appellant communicated that the respondent's claim had been denied and where the former reserved its rights to rely on limitation defences. The fact that the motion judge extracted certain passages from the correspondence and included them in his reasons does not mean that he disregarded or ignored other parts.

The appellant was inviting the Court of Appeal to reweigh the evidence considered by the motion judge to arrive at a different factual conclusion. This was not the Court's function. On a Rule 20 motion, the motion judge's exercise of discretion in making factual determinations is entitled to considerable deference.

Finally, the three cases relied on by the appellant on the motion and on the appeal did not assist the appellant, either because in those cases the date from which the limitation period ran was not at issue, or because they involved different factual findings.

(3) No. Consistent with Hryniak v Mauldin, 2014 SCC 7 and the clear wording and purpose of the summary judgment rule, it was open to the motion judge to determine the issue of the limitation defence on a final basis on the record before him in this case. The parties put a comprehensive record before the court, which the appellant considered sufficient for the limitation period issues to be able to be determined. The appellant could have cross-examined on the respondent's affidavit filed on the motion, but chose not to do so. It is in the interests of justice that the issue was determined on a final basis by the motion judge at this stage.

The Court of Appeal also addressed the respondent's cross-appeal. While it was dismissed as being moot, the Court held that the motion judge erred in concluding that the disability policy constituted a "business agreement" for the purpose of ss. 22(5) and (6) of the Limitations Act, 2002. The clear wording of ss. 22(5), 22(6) and s. 1 of the Consumer Protection Act, 2002 (incorporated by ss. 22(6)) permits contracting out of the statutory limitation period, unless the parties to the contract include an individual, and the contract was for "personal, family or household purposes". The word "parties" in ss. 22(6) should be given a broader, purposive reading to accord with the objective of s. 22, which is to restrict the circumstances in which the statutory limitation periods under the Limitations Act can be altered by contract. Although the group insurance contract under which she was making her claim was entered into between the NBPA and the appellant, the appellant relied on a limitation...