Court Of Appeal Summaries (July 27-31, 2015)

Below are the summaries of this week's Ontario Court of Appeal decisions. Topics covered include summary judgment, new issues on appeal, child and spousal support payment calculations, appeal rights under the Bankruptcy Act, and priority of creditors in garnishments proceedings.

Table of Contents

Civil Cases

Menzies Lawyers Professional Corporation et al. v. Morton, 2015 ONCA 553 (click on the case name to read the summary)

Keywords: Bankruptcy and Insolvency General Rules, s. 31(1), Bankruptcy and Insolvency Act, Extension of Time, Leave to Appeal, Re Tots and Teens Sault Ste. Marie, Thomas Gold Pettingill LLP v. Ani-Wall Concrete Forming Inc.

790668 Ontario Inc. v D'Andrea Management Inc., 2015 ONCA 557 (click on the case name to read the summary)

Keywords: Summary Judgment, Hyrniak

Abuzour v. Heydary, 2015 ONCA 565 (click on the case name to read the summary)

Keywords: Insurance Law, Liability Insurance Policy, Garnishment, Enforcement of Garnishment Order, Setting Aside or Varying Garnishment Order

Richter LLP v. Big Truck TV Productions Inc., 2015 ONCA 567 (click on the case name to read the summary)

Keywords: Garnishment Hearings, Debtors and Creditors, Garnishable Debts, Irrevocable Directions, Priority of Creditors, Rules of Civil Procedure, Taxation Act, Corporations Tax Act, Personal Property Security Act, Costs.

Maple Leaf Foods Inc. v. Ryanview Farms, 2015 ONCA 566 (click on the case name to read the summary)

Keywords: Damages, Implied Warranty, Agriculture, Diseases Animals, Sale of Goods Act

Whiteman v. Iamkhong, 2015 ONCA 564 (click on the case name to read the summary)

Keywords: New Issues on Appeal, Summary Judgment, Sponsorship Undertaking, Permanent Resident status, HIV status, Limitations Act, ss.4, 5, 10 and 16(1)(h), Kaiman v. Graham

Holman v. Holman, 2015 ONCA 552 (click on the case name to read the summary)

Keywords: Child Support Payment Calculation, Spousal Support Payment Calculation, Divorce Act, Federal Child Support Guidelines, Spousal Support Advisory Guidelines, Standard of Review, Hickey v. Hickey, Material Change in Circumstances

For a list of Criminal Law decisions, click here.

Menzies Lawyers Professional Corporation et al. v. Morton, 2015 ONCA 553

[Lauwers J.A.] (In Chambers)

Counsel:

4. G. Menzies, acting in person.

19. Lauriault, for the Attorney General of Canada.

    Keywords: Bankruptcy and Insolvency General Rules, s. 31(1), Bankruptcy and Insolvency Act, Extension of Time, Leave to Appeal, Re Tots and Teens Sault Ste. Marie, Thomas Gold Pettingill LLP v. Ani-Wall Concrete Forming Inc.

    Facts:

    The applicants, Menzies Lawyers Professional Corporation and Douglas Menzies, represented the bankrupt, Edwin Morton, in complicated matrimonial proceedings that eventually settled on terms which required the wife to pay to the husband amounts exceeding $250,000.00. Mr. Morton was unable to pay as a result of the financial constraints of the multiple proceedings initiated by the wife and the retainer agreement between Menzies and Morton provided that interest would be charged on the outstanding balance at 10% with the amounts paid from the proceeds of the matrimonial home. The applicant law firm applied for a solicitor's lien for about $133,000 and a charging order to protect its accounts out of Morton's estate. The applicant, Menziesbank, also applied for a salvage lien, the amount it paid two execution creditors' interests so that the sale of the matrimonial home could close. The application judge refused to grant the solicitors a charging order or to grant Menziesbank a salvage lien. The applicants seek an extension of time to file a notice of appeal and for leave to appeal the order of the application judge.

    Issues:

    (1) Do the applicants require an extension of time to serve the notice of appeal?

    (2) Is leave required for the appeal itself under s. 193 of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 (the "BIA")?

    Holding:

    Appeal allowed. Extension of time for the applicants to file the notice of appeal to October 30, 2014 to validate its filing nunc pro tunc, and application granted for leave to appeal under s. 193(e) of the BIA. Since the applicants are seeking an indulgence, it is reasonable to make a costs award in favour of the respondent, fixed at $1,500.

    Reasoning:

    (1) The applicants were under the mistaken impression that the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the "Rules") applied to this appeal so they had 30 days to appeal. Since this was a decision of the Bankruptcy Court, they only had 10 days "or within such further time as a judge of the Court of Appeal stipulates" under rule 31(1) of the Bankruptcy and Insolvency General Rules, C.R.C., c. 368. The following factors must be considered in exercising discretion to extend the time for filing the notice of appeal:

    whether the applicant had a bona fide intention to appeal before the expiration of the appeal period; any explanation for the delay in filing; any prejudice to the responding parties caused by the delay; and the merits of the proposed appeal. The first three factors were satisfied and the fourth factor dovetails with the applicants' appeal rights under s. 193 of the BIA.

    (2) Section 193 of the BIA governs appeal rights. The relevant grounds for this motion are found in paragraphs (c) and (e):

    Unless otherwise expressly provided, an appeal lies to the Court of Appeal from any order or decision of a judge of the court in the following cases: (c) if the property involved in the appeal exceeds in value ten thousand dollars;

    (e) in any other case by leave of a judge of the Court of Appeal.

    There are two legal issues to be decided with respect to the appeal rights under s. 193 of the BIA. The first is whether a solicitor's lien and a charging order is a form of property for the purpose of s. 193(c) of the BIA. The second is whether this proposed appeal meets the test for leave, assuming that it must proceed under s. 193(e). The three points to note from Justice Henry's decision in the bankruptcy case of Re Tots and Teens and as summarized in Thomas Gold Pettingill LLP v. Ani-Wall Concrete Forming Inc., 2012 ONSC 2182 about a charging lien made under the court's inherent jurisdiction are: first, the charging lien creates the proprietary interest of a secured creditor; second, subject to being declared, the charging lien is an inchoate interest that pre-dates the court's declaration; and third, the charging lien is intrinsically declaratory in nature. Consistent with Re Tots and Teens, it is more than arguable that s. 193(c) is the basis for the court's appeal jurisdiction; the appellants would not have required the court's leave if the appeal had been brought in time. However, the Court of Appeal would have granted leave to appeal under s. 193(e) of the BIA.

    The test for leave to appeal under s. 193(e) of the BIA was set by this court in Canada (Superintendent of Bankruptcy) v. 407 ETR Concession Co., 2012 ONCA 569:

    whether the point of appeal is of significance to the practice; whether the point raised is of significance to the action itself; whether the appeal is prima facie meritorious or, on the other hand, whether it is frivolous; and whether the appeal will unduly hinder the progress of the action. The question is whether the appeal raises an issue or issues of general importance to the practice in bankruptcy/insolvency matters and to the action itself, and whether the appeal is prima facie meritorious. The proposed appeal is not in any sense frivolous, and it is of significance both to the parties and in respect of the proceeding. It would be helpful to the practice to identify the circumstances in which a salvage lien is properly obtained and the discretionary factors that would lead a court to deny a salvage lien. Also, it is arguable that the application judge did not set out a principled basis for refusing to grant a charging order in favour of the solicitors, having found a valid solicitor's lien. The solicitors were working with the bankrupt to assist him and decided not take a second mortgage securing their legal fees. It is not clear why this should prejudice them when, had they taken out the second mortgage, the amount of money represented thereby would not have fallen into the estate. The Court took a similar view of his refusal to grant a salvage lien to Menziesbank. The application judge simply asserted that he was applying the equities...