Court Of Appeal Summaries (October 5 ' October 9, 2020)

• Published date: 13 October 2020
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Family and Matrimonial, Corporate and Company Law, Contracts and Commercial Law, Family Law, Court Procedure, Trials & Appeals & Compensation, Personal Injury, Professional Negligence
• Law Firm: Blaney McMurtry LLP
• Author: Mr John Polyzogopoulos

Good afternoon.

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

The decisions were all fairly short. Topics covered included prescriptive easements, breach of contract, family law (support) the approval of a settlement and contingency fee agreement in a personal injury matter and security for costs.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

CIVIL DECISIONS

Ballanger v. Ballanger, 2020 ONCA 626

[Juriansz, Hourigan and Thorburn JJ.A.]

Counsel:

S. Beddoe and J. Robinson, for the appellant
G.S. Joseph and A.M. Mastervick, for the respondent
J.J. Neal, for the respondent

Keywords: Family Law, Spousal Support, Child Support, Retroactive Support, Civil Procedure, Appeals, Standard of Review, Hickey v. Hickey, [1999] 2 S.C.R. 518

facts:

This appeal was brought from the trial judge's orders on spousal support, retroactive spousal support and retroactive child support. The appellant claims that the trial judge made palpable and overriding errors in granting insufficient spousal support and failing to order retroactive spousal support and child support.

The parties separated in 2004. In 2006, the parties agreed on amounts for both child support and spousal support, as well as a division of matrimonial assets. In 2008, however, the appellant applied for an increase in support based on an increase in the respondent's income. A temporary order for an increase was made, as well as an order to pay retroactive support.

The parties later contentiously disputed the issue of spousal and child support over the course of an eight day trial. The trial judge fashioned an order based on average income attributed to the respondent, due to the fact that the respondent's income varied greatly from year to year.

issues:

(1) Did the trial judge err in granting insufficient support and failing to order retroactive support?

holding:

Appeal dismissed.

reasoning:

No. The Court pointed out that the Supreme Court of Canada has instructed appellate courts to afford significant deference to trial judges in cases relating to support orders. Firstly, because the discretion involved in making a support order is best exercised by the judge who heard the parties directly. And secondly, because this approach promotes finality in family law matters.

The Court of Appeal therefore concluded that an appellate court can only interfere with a trial judge's decision if there is a material error such as a serious misapprehension of the evidence or an error in law. It is not entitled to overturn a support order simply because it would have made a different decision (Hickey v Hickey, [1999] 2 S.C.R. 518).

The Court ultimately found that, in this case, the trial judge heard evidence over an extensive trial. His reasons were adequate and thoughtful, and it was clear that he had considered all of the relevant factors in arriving at his decision. As such, the Court of Appeal found no reason to interfere with the trial judge's decision.

Estates Associates Inc. v. 1645112 Ontario Ltd., 2020 ONCA 640

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

Counsel:

M. I., acting in person for the appellant/ moving party

D.N.V., for the responding party, B.C.

A.S.D., for the responding parties, 1645112 Ontario Ltd 1793411 Ontario Ltd., and R.M.

Keywords: Civil Procedure, Appeals, Security of Costs, Breach of Contract, Torts, Fraud, Negligent Misrepresentation, Conspiracy, Professional Negligence, Lawyers Rules of Civil Procedure, Rules 61.06(1), Yaiguaje v. Chevron Corporation, 2018 ONCA 827

facts:

The appellant made claims for events that occurred 11 to 12 years ago including fraud, negligent misrepresentation, conspiracy, and breach of contract against the respondent, R.M. and his companies, in connection with the sale of a property. The appellant also claimed against the defendant, B.C., for allegedly negligent legal services. The claim was dismissed and the trial judge subsequently awarded costs to the respondents. The appellant sought to set aside or vary the order of the motion judge requiring that it post security for costs of the appeal in the amount of $100,000 each.

issues:

(1) Should the motion judge's order requiring the appellant to post security for costs in the amount of $100,000 each be set aside or varied?

holding:

Motion dismissed.

reasoning:

No. The Court held that the motion judge's order for security for costs rested on two foundations: first, a finding that the merits of the appeal were very much in doubt; and second, a finding that the respondents failed to establish that, despite its apparent impecuniosity, it did not have access to funds.

The motion judge's order was discretionary and entitled to deference. The Court found that the appellant had demonstrated neither an error of law nor an error in principle in the exercise of the motion judge's discretion. The Court found that, while the appeal may not be frivolous or vexatious, it appeared to have a very low prospect of success. The motion judge properly considered whether the appellant had established that it did not have access to funds and would not have been able to pay security for costs. There was evidence that the appellant had funded its litigation at various times by retaining several different lawyers, retaining an expert witness, and paying for the costs of the trial transcripts. In the face of this evidence, the appellant had an obligation to lead evidence that not only showed that it was without assets, but that it also had no access to funds. The appellant failed to do so, and the motion judge properly considered this failure in concluding that security for costs could be awarded.

Honey Bee (Hong Kong) Limited v. VitaSound Audio Inc., 2020 ONCA 629

[Rouleau, Miller and Zarnett JJ.A.]

Counsel:

M. Chamberlain and G. Ganguli for the appellant

Walter Kravchuk, for the respondent

Keywords: Contracts, Technology, Manufacture and Sale, Fresh Evidence, Admissibility, "Palmer Test", Due Diligence, Relevance, Reliability

facts:

The appellant, VitaSound Audio Inc. ("VitaSound"), is a technology company in the business of developing personal audio devices. The respondent, Honey Bee (Hong Kong) Ltd. ("Honey Bee"), is in the business of manufacturing electronic devices. They entered into three agreements related to the manufacture and sale of audio devices Honey Bee manufactured using technology developed by VitaSound: a Loan Agreement for which the individual appellants executed personal guarantees, as well as an Investment Agreement and a Commercial Agreement.

VitaSound defaulted on the loan agreement. Honey Bee sued VitaSound for non-payment and the individual appellants pursuant to their personal guarantee. The appellants did not contest liability. However, VitaSound counterclaimed on the basis Honey Bee breached the Investment Agreement after the parties orally amended it. The appellants sought to set off Honey Bee's liability against theirs under the Loan Agreement and personal guarantees.

The trial judge rejected VitaSound's claims regarding oral amendment of the Loan Agreement and alleged breach by Honey Bee, and therefore any entitlement to a set-off from Honey Bee's supposed liability. The trial judge found that the Commercial Agreement had no bearing on the matters in issue under the Loan Agreement or Investment Agreement.

In support of the appeal, the appellants sought to introduce fresh evidence. They alleged that Honey Bee sold units of an audio device in the Asian market, which contradicted Honey Bee's evidence at trial. They argued that this evidence showed that Honey Bee not only misled the trial court, but also triggered an obligation under the Commercial Agreement to advance $500,000 to VistaSound. The appellants sought to set off their liability under the Loan Agreement against any damages for breach of the Commercial Agreement.

issues:

(1) Can fresh evidence be introduced on appeal from the trial decision?

(2) Did the trial judge err in not finding that Honey Bee breached the Commercial Agreement?

(3) Did the trial judge err in not finding that Honey Bee breached the Investment Agreement?

holding:

Motion and appeal dismissed.

reasoning:

(1) No. The Court applied the Palmer test and concluded the fresh evidence could not be admitted. The first branch of the Palmer test requires that the evidence not have been discoverable at trial through the exercise of due diligence. Emails that allegedly documented the sale of the device by Honey Bee were found after trial, by accident, when reviewing the spam folder of a departed employee's email. The court found these emails were under the control of VitaSound at all times and were discoverable. Accordingly, the due diligence requirement was not satisfied.

The second branch of the Palmer test requires that the evidence be relevant, bearing upon a decisive or potentially decisive issue. The evidence was tendered to establish a breach of the Commercial Agreement and support a claim of set-off. A breach of the Commercial Agreement was never pleaded by the appellants at trial. Additionally, there was no basis in the evidence, including fresh evidence, to support that VitaSound would have been entitled to keep the entirety of the $500,000 advance payment from Honey...