Court Of Appeal Summaries (March 16-20, 2015)

Hello everyone. Below are summaries of this week's Ontario Court of Appeal civil decisions (non-criminal). Topics include motions to strike, family law, undisclosed material changes in condominium construction plans, and judicial review of a Toronto Chief of Police Order. As noted on the Court of Appeal website, Osgoode Hall was closed today due to an electrical fire and no Friday decisions were released. Hope everyone has a good weekend.

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465519 Ontario Limited v Sacks, 2015 ONCA 175

[Cronk, Gillese and Brown JJ.A.]

Counsel: F.S. Turton, for the appellants O.Strawczynski, for the respondent

Keywords: Civil Litigation, Rules of Civil Procedure, Rule 21.01(b), Motion to Strike, Limitation Period, Dissolved Corporation, Post-Ruling Communications with Judge, Rule 1.09, Fundamental Fairness

Facts: Cliffwood Plaza Corp. moved under rule 21.01(b) of the Rules of Civil Procedure to strike the appellants' entire pleading on the basis that it disclosed no reasonable cause of action. Cliffwood Plaza Corp. argued that although the appellants' action was commenced prior to the expiry of the two-year limitation period, 465519 Ontario Limited's claim was a nullity because its corporate charter has been revoked and it was a dissolved company when the action was initiated. Since 465519 Ontario Limited's corporate status was not revived until after the expiry of the limitation period, Cliffwood Plaza Corp. argued that its claim, and the derivative claims of the remaining appellants, could not succeed. Cliffwood Plaza Corp. also maintained that the appellants' pleading of the only claim against Cliffwood, that of civil conspiracy, was fatally deficient and incapable of success.

The motion judge accepted the limitation period argument and struck the claim on the ground that it was statute-barred. At the request of Cliffwood's counsel the motion judge subsequently amended her ruling to also strike the entire action, including the claims of the individual appellants, as against Cliffwood. The appellants appealed from this order striking the claim of 465519 Ontario Limited and the "entire action" as against the respondent, Cliffwood Plaza Corp.

Issues: (1) Did the motion judge err in holding that 465519 Ontario Limited's claim against Cliffwood Plaza Corp. was statute-barred due to the expiry of the applicable limitation period and, hence, that it could not succeed?

(2) Did the motion judge err in striking the entire action against Cliffwood, including the claims of the individual appellants?

Holding: Appeal allowed in part, by striking the words "and the entire action" from paragraph one of the motion judge's order without prejudice to Cliffwood renewing its motion to strike the individual appellants' claims against Cliffwood. In all other respects, the appeal is dismissed.

Reasoning: (1) No, 465519 Ontario Limited had no legal status to commence an action while it was dissolved. The court agreed with the motion judge that the action commenced in its name on February 8, 2012 was a nullity. The limitation period ran its course prior to the date of the corporation's revival. 602533 Ontario Inc v Shell Canada Ltd., had direct application and was dispositive of 465519 Ontario Limited's claim against Cliffwood.

(2) Yes, the motion judge's ruling striking the entire action as against Cliffwood could not stand and needed to be set aside. The court held that the post-hearing communication with the motions judge was inadvisable and contrary to rule 1.09. The delivery of the letter, without consent of the appellants' counsel and in the face of his opposition to its delivery to the motions judge was an issue. The court did not agree that the letter was inconsequential to the change in the motion judge's ruling. The court held that the letter precipitated a significant amendment to the motion judge's ruling, whereby the individual appellants' claims were struck without explanation and without the motion judge having had the benefit of submissions from counsel for the individual appellants. The change in her ruling should not have been made without providing the appellants' counsel with an opportunity to challenge the requested change and to make further submissions if so advised. Fundamental fairness required that this part of the decision be set aside.

Mroz v. Mroz, 2015 ONCA 171

[Doherty, Gillese and Lauwers JJ.A.]

Counsel: M.T. Hyde, for the appellant M. Czuma, for the respondents

Keywords: Estates Law, Wills, Joint Tenants, Resulting Trust, Right of Survivorship

Facts: An aging mother ("Kay") transferred title to the family home (the "Property") to herself and her daughter ("Helen"), as joint tenants. The family home was the mother's only significant asset. At the same time as she directed that the transfer be made, the mother executed a will in which she referred to the family home and made bequests to a number of family members.

In the 2004 Will, Kay named Helen and her nephew, Richard, as her executors and bequeathed $50,000 to Richard and his family. She also stipulated that her "share of the [P]roperty" was to go to Helen, on the condition that within a year of her death, Helen paid $70,000 to each of Martin and Adrianna, Kay's grandchildren.

Shortly after Kay's death, Helen sold the Property for approximately $476,000. She used the sale proceeds for herself. All of this was done without notifying Richard, her co-executor under the 2004 Will. As a result of Helen's actions, the Property did not pass through Kay's estate. Apart from the Property, the value of Kay's estate was approximately $3,200.

Martin and Adrianna started legal proceedings in which they challenged the validity of the 2004 Will and Helen's conduct in relation to the Property. The trial judge found that the 2004 Will was valid and the presumption of resulting trust in respect of the Property had been rebutted, stating that when Kay transferred the Property into joint tenancy with Helen, Kay "wished to gift Helen full title to the house upon Kay's death and specific bequests, including the monies for the grandchildren, were to be paid from the proceeds of sale".

However, the trial judge also found that Helen's failure to pay $70,000 to each of Martin and Adrianna was declared to be a breach of trust and Helen was ordered to pay them those sums, plus pre-judgment interest. Helen appealed. The essence of her appeal was that once the trial judge found that the presumption of resulting trust had been rebutted, the Property passed to her by right of survivorship and, therefore, she had no legal obligation to pay the legacies to Martin and Adrianna.

Martin and Adrianna cross-appealed. The essence of their cross-appeal was that the trial judge erred in finding that the presumption of resulting trust had been rebutted and, accordingly, the Property formed part of Kay's estate.

Issue(s): 1) Did the trial judge err in finding the 2004 Will valid?

2) Did the trial judge err in finding that Helen is obliged to pay Martin and Adrianna the amount of their bequests under the 2004 Will?

Holding: Appeal and cross-appeal dismissed.

Reasoning: 1) No. On appeal, the court found that the trial judge's findings, that Kay had testamentary capacity and that Helen did not exert undue influence on her, were fully available on the record. Therefore, the court did not interfere with the...