Court Of Appeal Summaries (February 8-12, 2016)

Hello for another week.

Civil law topics covered by the Court of Appeal this week included the assignment of leases and whether a landlord was reasonable in refusing to consent because the assignee was affiliated with a competitor, family law, real property, municipal law and, as usual, several appeals from summary judgment.

I hope everyone has a safe and fun Family Day long weekend.

Civil Decisions

8150184 Canada Corporation v. Rotisseries Mom's Express (Les Rotisseries Mom's Express Limitée), 2016 ONCA 115

[Feldman, MacPherson and Miller JJ.A.]

Counsel:

Ashraf Ahmad, acting in person

David Fogel, for the respondent

Facts:

The appellant was the manager of a food franchise business, The Rotisseries Mom's Express Limited. The respondent was a franchisee that entered into a franchise agreement with the franchisor. This contract was governed by the Arthur Wishart Act ("AWA"). The franchisee brought an action against the corporate franchisor and two personal "franchisor's associates", the appellant and Pierre McLean. The defendants, through their counsel Mr. Cadieux, stated that they wanted to comply with the AWA and that they would pay any amounts properly owing to the franchisee. Unfortunately, the parties were unable to settle their dispute as they could not agree on the amount, and a trial date was set. The defendants did not respond to a Request to Admit, and, by virtue of rule 51.03 of the Rules of Civil Procedure, they were deemed to admit the truth of the facts set out in the Request to Admit and the authenticity of the documents listed in it.

The defendants' instructions to their counsel was that they intended to settle with the plaintiff and that they did not want to run up legal fees preparing for a trial that would not take place. As the trial date approached, Mr. Cadieux grew concerned that he was unable to contact his clients, and eventually informed the defendants that he could no longer represent them based on a serious conflict of interest that had arisen between them. Mr. Cadieux brought a motion to be removed as counsel of record for the defendants and also sought an adjournment of the trial so that the defendants could seek new counsel. Counsel for the plaintiff opposed the adjournment request and moved for judgment on the basis of the unanswered Request to Admit. The trial judge refused to grant the adjournment. The motion for judgment based on the Request to Admit then proceeded. Mr. Cadieux stayed in the courtroom and represented the defendants, who were not present. The trial judge rendered partial judgment in favour of the plaintiff.

Issues:

(1) Did the trial judge err by not permitting defendants' counsel to get off the record at the commencement of the trial and by not granting the appellant's request for an adjournment to enable him to retain and instruct new counsel?

(2) Did the appellant receive ineffective assistance from his counsel in the proceedings that culminated in the partial judgment against him?

Holding: Appeal dismissed.

Reasoning:

(1) No. Based on Khimji v. Dhanani, the decision to adjourn a hearing is a discretionary one. There was no reason to interfere with the trial judge's exercise of discretion in this case. The trial date was well-known to the appellant. The day before the hearing, his counsel advised him to attend in person and described the various scenarios. The appellant chose not to attend his own trial with his eyes wide open. In addition, the appellant's counsel remained in court and represented his client on the plaintiff's motion in reliance on the Request to Admit despite his desire to be removed from the record. Finally, the result of the motion was a fair result. The trial judge ordered recovery for the plaintiff based on the unanswered Request to Admit only on what he called "hard" expenses, namely, those expenses corroborated by appropriate documentation.

(2) No. Under D.W. v. White, ineffective assistance of counsel claims in civil cases are unusual and only available in the "rarest of cases." The appellant did not meet this high burden. Mr. Cadieux represented his clients faithfully and in accordance with their instructions. He also stayed and represented them on the motion for judgment before he was removed from the record. The problem in the run-up to the trial date was not created by Mr. Cadieux's efforts. Rather, the problem was the appellant's unwillingness to communicate with his counsel at a crucial time, coupled with an apparent late-breaking falling out between the appellant and Mr. McLean.

Hudson's Bay Company v. OMERS Realty Corporation, 2016 ONCA 113

[Gillese, MacFarland and van Rensburg JJ.A.]

Counsel:

Sheila Block and Molly Reynolds, for the appellants

Jonathan Lisus and James Renihan, for the respondents

Facts:

The respondents leased space in three shopping malls: Yorkdale, Square One and Scarborough Town Centre, where they operated Hudson's Bay stores as anchor tenants. The malls are owned and operated by the landlord appellants (the "Landlords"), represented by Oxford Properties Group ("Oxford"). The respondents sought to transfer the lease holdings to their joint venture with RioCan Real Estate Investment Trust ("RioCan"), including the leases at Yorkdale, Square One and Scarborough Town Centre (the "Leases"). The respondents sought consent from Oxford to assign and sublease the Leases, however, Oxford refused for fear of the degree of control that one of its competitors, RioCan, would have over Oxford's properties.

The respondents then proposed a revised joint venture which would consist of two limited partnerships, the second being formed to hold the Leases. The Leases would be assigned to Hudson's Bay Company ("HBC") in its capacity as general partner of the second limited partnership, rather than the company jointly controlled by HBC and RioCan. Oxford refused to consent and the respondents brought an application under ss. 23(2) of the Commercial Tenancies Act for a declaration that the Landlords' consents were not required for assignment and sublease of the Leases, or, alternatively, that the Landlords were unreasonably withholding their consent.

The application judge found in favour of the respondents. She noted that the Leases contained provisions that restrict their transfer or assignment. However, each of the Leases also contained an exception for an assignment to an affiliate of the existing tenant (the "affiliate exception"). As the Leases were to be...