Court Of Appeal Summaries (June 18 – 22)

Good evening.

Following are the summaries of this week's civil decisions of the Court of Appeal for Ontario.

In Canada Life Insurance Company of Canada v Canada (Attorney General), Canada Life and some of its affiliates carried out a series of purely tax-driven transactions. The purpose of the Transactions was to realize a $168 million tax loss (without having suffered an economic loss in that amount) to offset unrealized foreign exchange gains accrued in the same taxation year. This would avoid paying millions of dollars in tax to CRA. The CRA disallowed the claimed loss in a reassessment. Asserting that it had proceeded on the basis of erroneous advice from its tax advisor, Canada Life applied to the Superior Court for an order setting aside the Transactions and replacing them with other steps that would permit it to enjoy the intended tax benefit, retroactive to the date of the original Transaction. The application was opposed by the CRA, represented by the Attorney General. The application judge, Pattillo J., granted the order requested by Canada Life. The Court of Appeal allowed CRA's appeal and dismissed Canada Life's cross-appeal for alternative relief. The Court followed the Supreme Court's decision in Fairmont Hotels, which restated the test for rectification, and this situation did not meet that test, as there was no "agreement" to be rectified. The Court dismissed the alternative relief sought by Canada Life, stating that it will not exercise inherent or equitable jurisdiction to undo tax-driven transactions just because they do not yield the desired tax consequences. It was noted that Canada Life had alternative remedies available, including a tax appeal and possible E&O claim against its tax advisers.

In Ontario (Children's Lawyer) v. Ontario (Information and Privacy Commissioner), a father sought access to the files of the Children's Lawyer in relation to its representation of his children in a custody and access case. He sought such files from the Attorney General under Freedom of Information and Protection and Privacy Act. The Privacy Commissioner ordered the files, which were subject to solicitor-client and litigation privilege, disclosed to the father. The Divisional Court had upheld the Privacy Commissioner's decision, having applied a reasonableness standard of review. The Court of Appeal, applying a correctness standard of review, set aside the Privacy Commissioner's decision, primarily on the basis that the records were not within the custody of the Attorney General and were therefore not compellable. While the Children's Lawyer is a branch of the office of the Attorney General, it operates independently of the AG, does not take instructions from, or report to, the AG, and does not provide access to its records to the AG. To provide access to the records would seriously undermine the role of the Children's Lawyer as advocate for the rights of children.

In Ontario (Finance) v Traders General Insurance (Aviva Traders), the Motor Vehicle Accident Claims Fund paid out a claim to MVA victims and then pursued the insurer of the owner of the vehicle for reimbursement. The insurer had denied coverage, claiming it had validly cancelled the policy for non-payment of premium. The Court of Appeal upheld the trial judge's decision that had found that the policy had not been cancelled in accordance with the applicable Statutory Condition. It also upheld the trial judge's decision declining to find that the Fund's claim was out of time, permitting the Fund to sue by way of unjust enrichment rather than pursuant to the Insurance Act, which provided for a one-year limitation period.

Other topics covered this week included the breach of an agreement of purchase and sale of land, whether a termination clause in an employment contract violated the Employment Standards Act, and the appeal route when seeking to review an order of a single judge of the Divisional Court (to a panel of that court, not to the Court of Appeal).

Wishing everyone an enjoyable weekend.

Civil Decisions

Kennelly v Hashemi, 2018 ONCA 558

[Hoy A.C.J.O., Rouleau and Benotto JJ.A.]

Counsel:

HH, self-represented

Scott W Beattie, for the respondents

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Breach, Deposits, Civil Procedure, Adjournments, Self-Represented Litigants

Facts:

This is an appeal from the judgment of the application judge declaring that the appellant, HH, was in breach of an agreement of purchase and sale of land dated January 26, 2017 (the "Agreement") and that the respondent, JE, was entitled to the return of the deposit paid under the Agreement.

The Agreement provided that the closing date was February 14, 2017 (the "Original Closing Date") but that the seller had the option to delay the closing up to two weeks. The seller exercised this option, as she was not in a position to close on the Original Closing Date. The closing date was thus revised to February 23, 2017. However, the parties agreed to further extend the closing time to 2:30 p.m. on February 24, 2017 (the "Closing Time") after the appellant was assigned the seller's rights under the Agreement. Nevertheless, the transaction did not close at the Closing Time.

On the day before the appeal was heard, the appellant advised that he would seek a 60-day adjournment of the appeal to obtain transcripts and hire counsel. He renewed this request at the opening of the hearing. However, the respondents opposed his request for an adjournment.

Issues:

(1) Was the appellant entitled to an adjournment?

(2) Did the application judge err in finding that the appellant breached the Agreement?

Holding: Appeal dismissed.

Reasoning:

(1) No. After hearing the parties' submissions, the court declined to grant the adjournment sought. The court found that the appellant was aware since at least March 14, 2018, that his counsel would seek to be removed from the record if he were not paid forthwith. Moreover, the appeal was originally scheduled to be heard on April 25, 2018. However, before removing himself from the record, the appellant's counsel secured an adjournment to provide the appellant with time to retain new counsel or prepare to be self-represented. Nevertheless, there was no evidence provided that he took any steps to retain counsel.

(2) No. The court found that while the Agreement gave the seller the option to delay the closing for up to two weeks beyond the Original Closing Date, it did not give the seller the right to extend the closing a number of times within that period at the seller's discretion. Accordingly, the Agreement provided that time was of the essence and it was clear that the appellant was not ready, willing or able to close at the Closing Time. Moreover, the appellant did not attempt to further extend the closing date before the Closing Time. The court therefore held that the appellant was not entitled to unilaterally extend the closing date under the Agreement after he failed to complete the transaction at the Closing Time. Consequently, the respondents were entitled to the return of their deposit as the respondents ceased to be obligated to complete the transaction.

Ontario (Children's Lawyer) v Ontario (Information and Privacy Commissioner), 2018 ONCA 559

[Rouleau, Benotto and Roberts JJ A]

Counsel:

I Ross and S Scott, for the appellant, Children's Lawyer for Ontario

S Blake and S Kromkamp, for the respondent, Attorney General for Ontario

L Rothstein and J Martin, for the respondent, Information and Privacy Commissioner of Ontario

J Mark and M Birdsell, for the intervener, Justice for Children and Youth

Keywords: Administrative Law, Privacy Law, Freedom of Information, Solicitor-Client Privilege, Litigation Privilege, Standard of Review, Issue of Central Importance to Legal System, Correctness, Freedom of Information and Protection of Privacy Act, RSO 1990, c F 31, Family Law, Custody and Access, Children's Lawyer, Courts of Justice Act, RSO 1990, c C 43, United Nations Convention on the Rights of the Child, Can. T.S. 1992 No. 3, Dunsmuir v. New Brunswick, 2008 SCC 9

Facts:

Two children were the subject of a custody and access dispute between their parents. In 2008, when the children were nine and eleven years old, McCartney J appointed the Children's Lawyer. The Children's Lawyer determined that she would provide legal representation to the children pursuant to s. 89(3.1) of the Courts of Justice Act, RSO 1990, c C 43 (the "CJA").

In May, 2010 Warkentin J made a final order terminating the father's access to the children as well as all forms of verbal communication. On January 23, 2014, the father requested access to information from the Ministry of Attorney General ("MAG") pursuant to the Freedom of Information and Protection of Privacy Act, RSO 1990, c F 31 ("FIPPA "). He sought records in the Children's Lawyer's litigation files, including both privileged and non-privileged reports, notes, and information. MAG advised the father that it does not have custody or control of the records and FIPPA does not apply because the office of the Children's Lawyer represents the independent legal interests of children and does not act on behalf of MAG or the Crown.

The father appealed MAG's decision to the Information and Privacy Commissioner of Ontario (the "IPC"). The Adjudicator concluded that the records at issue are in MAG's custody or control. She identified two "overriding considerations" leading to this conclusion: "the undisputed fact that the [Children's Lawyer] is a branch of [MAG]"; and that "the records at issue were generated in the course of the [Children's Lawyer] fulfilling its core mandate." The Adjudicator ordered MAG to issue an access decision to the father, which could be made by the Children's Lawyer.

The Children's Lawyer, supported by MAG, applied to the Divisional Court for a judicial review of the Adjudicator's order. The Divisional Court identified reasonableness as the appropriate standard of...