Court Of Appeal Summaries (July 25 – July 29)

Good afternoon.

For the end of July, this was a fairly busy week for the Court of Appeal. Topics covered included family law, professional negligence, professional misconduct, vexatious litigants, dismissal for delay, unjust enrichment (office pool lottery winnings), breach of contract and construction law. The Kaynes v BP decision is perhaps the most noteworthy, as it is the first time I can recall seeing a court lift a stay of proceedings granted for want of jurisdiction/forum non conveniens as a result of the foreign court refusing to hear the case that had been stayed in Ontario in favour of that foreign court. Of further note is the court's decision to grant Constable Forcillo bail pending the appeal from his conviction.

Have a great long weekend.

Civil Decisions

Southwestern Sales Corporation Limited v. Spurr Bros. Ltd., 2016 ONCA 590

[Hoy A.C.J.O., Brown and Huscroft JJ.A]

Counsel: J. Cooke, for the appellant G. Morga, for the respondent

Keywords: Construction Law, Civil Procedure, Dismissal for Delay, Rules of Civil Procedure, Rule 48.14(7), Setting Aside, Status Hearings, Faris v. Eftimovski

Facts:

In December 2000, the appellant registered six claims for lien against properties owned by the respondents. To obtain an order vacating the claims for lien, the respondents paid into court approximately $330,000. In January 2001, the appellant commenced six lien actions on its lien claims. In January 2003, the appellant filed its trial record. However, it then commenced the breach of trust action. Periods of activity were followed by long periods of inactivity. Status hearings were scheduled, only to be adjourned by the appellant or to have the appellant fail to meet the deadlines set. The trial was set for September 2009, but did not proceed. In 2012, the actions were struck from the trial list. More status hearings were scheduled, only to be adjourned at the appellant's request. Throughout, the appellant was represented by counsel.

Eventually a status hearing was scheduled for October 6, 2014, peremptory to the appellant. No one appeared for the appellant; the actions were dismissed by

Master Pope. It transpired that counsel for the appellant had surrendered his licence to the Law Society of Upper Canada about two months before the October 2014 status hearing.

The respondents then secured payment of the monies out of court. When the respondents sought to garnish the appellant's bank account to satisfy unpaid cost orders, that galvanized the appellant and it sprang into action. It retained new counsel, and there is no dispute new counsel moved expeditiously to set aside the dismissal order of Master Pope. The motion judge dismissed the appellant's motion.

Issues:

1) Did the motion judge apply the wrong test for a motion to set aside a dismissal order made at a status hearing pursuant to rule 48.14(7)?

2) Did the motion judge err in failing to accept the appellant's explanation for its delay?

Holding:

Appeal dismissed.

Reasoning:

No. Although the motion judge did not cite the case that sets out the applicable test, Faris v. Eftimovski, 2013 ONCA 360, her reasons disclose her analysis focused on and applied the correct legal principles. Under the Faris test, a plaintiff seeking to set aside a dismissal order made at a status hearing must demonstrate two things: (i) there was an acceptable explanation for its delay and (ii) if the action were allowed to proceed, the defendant will suffer no non-compensable prejudice. The analysis of the motion judge addressed both these matters; she did not fail to apply the proper legal principles. 2. No. The motion judge was correct to conclude that the appellant had not provided a reasonable explanation for its delay. A lien claim and breach of trust claim are onerous for defendants and it causes the defendants prejudice if there is lengthy delay. The fact that the (i) the appellant did not know about the status hearing; (ii) its former counsel represented the respondents were delaying the actions or the matter was progressing or it would soon settle; and (iii) it did not know its counsel had surrendered his licence to practice law, is not sufficient to amount to an adequate explanation for the delay as they raise more questions than they answer. Also, being misled by counsel about the status of the action is not an excuse for such delay, especially where the party is a commercial entity. The appellant bore primary responsibility for the progress of the actions they commenced. Retaining a lawyer to represent it in the actions does not lessen this obligation. This obligation requires a party to take reasonable steps to supervise its counsel's work to ensure there would be an expeditious determination of the actions on their merits. Also, the appellant failed to meet the expectation that a commercial plaintiff would produce concrete evidence describing the steps it had taken to supervise its counsel's handling of its actions.

Spiro v Koc, 2016 ONCA 592

[Hoy A.C.J.O., Brown and Huscroft JJ.A.]

Counsel:

Marek Z. Tufman and Eleonora Izmaylov, for the appellant, Tania Cam

Saul I. Glober, Q.C., for the respondent, Paul Spiro

Robert L. Jerkins, for the respondents, Elizabeth Koc, Bonnie Strapp, Valentine Skribane and Marija Cavdamova

Keywords: Endorsement, Unjust Enrichment, Lottery Winnings, Partnerships, Partnerships Act, R.S.O. 1990, C. P-5, Co-Ownership

Facts: Tania Cam appeals the trial judge's determination that she was unjustly enriched by receiving $200,000 (a one-fifth share of the proceeds of a winning lottery ticket) and that Paul Spiro, a respondent, was entitled to this amount instead. Spiro worked at a bank in Milton. Spiro and other employees would contribute money to a lottery pool. Spiro contributed to a ticket purchased on June 25th 2010, but left his job at the bank on July 16th of that same year. Cam started working on July 19th. On August 25th she took 25 tickets to a local vendor. She discovered that the June 25th ticket had resulted in a "free play." That free play ticket won $1,000,000. Cam and the other employees split the proceeds five ways, but Spiro was not given any proceeds nor was he notified about the winning ticket. Trial judge found that Spiro and the other employees were entitled to a share of the winnings and Cam had been unjustly enriched. On appeal Cam argues that the lottery pool was a partnership governed by the Partnerships Act and that the winning ticket was an asset of the partnership to which she was entitled.

Issues:

Was Cam entitled to the proceeds of the June 25 ticket? Holding: Appeal Dismissed.

Reasoning:

The trial judge properly categorized Spiro and the other employees as co-owners of the June 25 ticket; as such Cam was not entitled to a share of the winning. Even if the lottery pool was a partnership, Cam would still not be entitled to a share of the winnings, as it would have been a partnership comprised of Spiro and the other employees only for the limited purpose of purchasing the June 25 ticket, and not an ongoing partnership. Zenex Enterprises Limited v. Pioneer Balloon Canada Limited, 2016 ONCA 594

[Hoy A.C.J.O., Brown and Huscroft JJ.A]

Counsel: D. Collins, for the appellant M. S. Deverett, for the respondent

Keywords: Endorsement, Breach of Contract, Commissions, Costs in the Cause, Costs in Any Event of the Cause

Facts:

The appellant, Pioneer Balloon Canada Ltd. is a balloon manufacturer. Zenex Enterprises is a wholesaler and distributor of consumer goods. Dollarama, a retail chain store, was a customer of Zenex for several years, during which it purchased various goods including balloons Zenex had purchased from Pioneer.

In 2005, Pioneer entered into an agreement to sell balloons to Dollarama directly. Several million dollars in balloons were sold by Pioneer to Dollarama over the next five years. Zenex claimed that it was entitled to a 5% commission on Pioneer's sales to Dollarama, pursuant to an agreement it made to introduce Pioneer to Dollarama and to assist in obtaining Dollarama's business. Pioneer contended that it secured the Dollarama business on its own and that it owed only $5,000 as a fee for Zenex president Howard Starr's services.

Pioneer appeals the trial judge's determination that it owes Zenex $266,725.08 for breaching an oral contract to pay a commission on its balloon sales to Dollarama. Zenex cross-appeals the trial judge's decision that it pay...