Court Of Appeal Summaries (January 25 ' 29, 2021)

• Published date: 02 February 2021
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Real Estate and Construction, Criminal Law, Coronavirus (COVID-19), Compliance, Corporate and Company Law, Court Procedure, Trials & Appeals & Compensation, Landlord & Tenant - Leases, White Collar Crime, Anti-Corruption & Fraud, Shareholders, Contracts and Force Majeure
• Law Firm: Blaney McMurtry LLP
• Author: Mr John Polyzogopoulos

Good afternoon.

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

Topics covered this week included striking jury notices, oppression in the context of a public company, specific performance of an agreement of purchase and sale of property condo, quantum meruit where a contingency fee agreement is found unenforceable under the Solicitors Act, and appeal routes in class proceedings.

In a decision that was telegraphed from its earlier decision in Louis v. Poitras just before Christmas, the Court allowed the appeal from the Divisional Court decision which had set aside the motion judge's decision to strike a jury notice in a personal injury case in order to permit the case to go to trial during the pandemic.

In Lucas, the builder of a new condo development terminated an agreement of purchase and sale because the purchaser had rented the unit during occupancy and prior to closing without the builder's consent. The builder then sold the unit under value to relatives of the builder's principal. The application judge granted relief and forfeiture and specific performance. The Court rightly upheld that decision. The decision illustrates that even in cases involving the purchase of condos in Toronto, which are a dime a dozen, a purchaser can still get specific performance.

In Beaudoin Estate, the Court allowed an appeal from a motion judge's decision under Rule 21.02(1)(a) striking an action as being statute-barred under s. 38(3) of the Trustee Act, R.S.O. 1990, c. T.23. The plaintiff alleged fraudulent concealment as a basis to extend the hard two-year limitation period under the Trustee Act. The Court confirmed that the factual findings necessary to determine the fraudulent concealment issue should not have been made under Rule 21 in the absence of any evidence.

Please mark down April 27, 2021, from 5:30-7:45pm in your calendars for our fifth annual "Top Appeals" CLE, which will take place via Zoom. Justice Benjamin Zarnett will be co-chairing the event with myself and Chloe Snider of Dentons. Following is our excellent slate of decisions and speakers:

2020 Update from the Bench

The Honourable Benjamin Zarnett, Court of Appeal for Ontario

Panel 1 - Advocacy Practice Tips from the Court

Girao v. Cunningham, 2020 ONCA 260

OZ Merchandising Inc. v. Canadian Professional Soccer League Inc., 2020 ONCA 532

Welton v. United Lands Corporation Limited, 2020 ONCA 322

Jordan Goldblatt, Adair Goldblatt Bieber LLP

Sara Erskine, Rueters LLP

Panel 2 - Negligently Designed Financial Products - A New Age in Product Liability?

Wright v. Horizons ETFS Management (Canada) Inc., 2020 ONCA 337

Seumas Woods, Blake, Cassels & Graydon LLP

Alistair Crawley, Crawley MacKewn Brush LLP

Elizabeth Bowker, Stieber Berlach LLP

Panel 3 - Developments in Insolvency Law - Priority of Construction Trust Claims and Landlord Claims in Bankruptcy

Urbancorp Cumberland 2 GP Inc. (Re), 2020 ONCA 197

7636156 Canada Inc. (Re), 2020 ONCA 681

Ken Kraft, Dentons LLP

Kevin Sherkin, Levine, Sherkin, Boussidan

D.J. Miller, Thornton Grout Finnigan LLP

In the meantime, please register for the program by visiting the OBA's website.

Wishing everyone an enjoyable weekend.

CIVIL DECISIONS

Louis v. Poitras, 2021 ONCA 49

[Watt, Lauwers and Hourigan JJ.A.]

Counsel:

J. Y. Obagi and E. A. Quigley, for the moving parties/ appellants

B. Marta, for the responding party/ respondent Security National Insurance Company

J. Griffiths, for the responding parties/ respondents TD Insurance Meloche Monnex and Security National Insurance Company

Keywords: Civil Procedure, Striking Jury Notices, COVID-19, Hryniak v. Mauldin, 2014 SCC 7, Re Sault Dock Co. Ltd. and City of Sault Ste. Marie, [1973] 2 O.R. 479 (C.A.), Kostopoulos v. Jesshope (1985), 50 O.R. (2d) 54 (C.A.), Louis v. Poitras, 2020 ONCA 815, Girao v. Cunningham, 2020 ONCA 260, MacLeod v. Canadian Road Management Company, 2018 ONSC 2186, Belton v. Spencer, 2020 ONSC 5327, Belton v. Spencer, 2020 ONCA 623, Passero v. Doornkempt, 2020 ONSC 6384, MacDougall v. Sisley, 2020 ONSC 6632, Higashi v. Chiarot, 2020 ONSC 5523

facts:

The appellants were involved in a motor vehicle collision in 2013. Jury notices were filed but COVID-19 intervened and the trial date was lost. But for the pandemic, the trial would have proceeded in Ottawa in April 2020 but civil jury trials were not being scheduled. In July 2020, the plaintiff moved for an order striking the jury notices, which the motion judge granted. The defendant insurers appealed to the Divisional Court. The Divisional Court allowed the appeal and held the motion judge's decision was arbitrary because it was attributed solely to the presence of delay but lacked sufficient evidence of actual prejudice to the parties. It set aside the motion judge's order and restored the jury notices.

The plaintiffs moved to stay the Divisional Court's order pending appeal to the Court of Appeal. In granting the stay, the Court found the Divisional Court misapprehended relevant facts, particularly regarding uncertainty in Ottawa as to when or how a jury trial might proceed. Further, it was noted that pandemic-related delay affecting civil jury trial scheduling had been raised in several cases and would require consideration by the Court of Appeal. Upon granting the stay, the Court ordered that the motion for leave to appeal be expedited and heard together with the appeal if the panel entertained submissions on the appeal, as it did.

issues:

1. Should leave to appeal be granted?
2. Did the Divisional Court err in its analysis?

holding:

Leave to appeal granted.

reasoning:

1. Should leave to appeal be granted?

Yes, the Court held that the decision below was flawed on its face, and the approach taken by the Divisional Court had to be discouraged if courts were going to properly manage their civil lists during the pandemic and beyond.

The Court will consider cases where special circumstances would make the matter sought to be brought before the Court a matter of public importance or would appear to require that in the interest of justice leave should be granted. The plaintiffs submitted that there were two grounds upon which leave to appeal ought to be granted: (i) the Divisional Court decision disclosed an obvious misapprehension of the relevant facts considered by the motion judge in granting the order to strike the jury notices; and (ii) there was a serious question raised by the appeal that engaged a matter of public importance that the court should consider in the interests of justice.

The Court was satisfied that the Divisional Court's analysis showed an obvious misapprehension of the relevant facts. The Court noted that an obvious error was made in concluding that the motion judge made his decision without regard to evidence of the local conditions. The motion judge was explicit regarding the evidence he was relying on in making that order, evidence that went to the specifics of the situation then extant regarding jury trials in Ottawa and its impact on these proceedings. The Court also found that the appeal raised a matter of public importance regarding the administration of civil justice. Guidance was necessary regarding civil case management during the current pandemic crisis. The Court explained that guidance was necessary for intermediate courts of appeal to remind them of the minimal role they play in reviewing discretionary case management decisions.

2. Did the Divisional Court err in its analysis?

Yes, its conclusion that the motion judge's decision was arbitrary finds no support in the motion judge's reasons or the record before him. While a court should not interfere with the right to a jury trial in a civil case without just cause or compelling reasons, a judge considering a motion to strike a jury notice has a broad discretion to determine the mode of trial. The Court also noted that an appellate court reviewing a decision to strike a jury notice has a very limited scope of review. It may only interfere where the decision to strike was exercised arbitrarily or capriciously or was based upon a wrong or inapplicable principle of law. An appeal court should not merely pay lip service to the concept of deference and then proceed to substitute its own view as to what the proper result should be for that of the lower court. With those principles in mind, the Court found that the Divisional Court's findings were erroneous and reflected a fundamental misunderstanding of the role of appellate courts in considering appeals from orders striking jury notices.

First, the Divisional Court found that delay alone was not enough to strike a jury notice, as there must also be proof of some additional prejudice. The Court disagreed. The motion judge had found that the real and substantial prejudice arose simply by reason of delay as a result of the pandemic. The Court agreed with the statement of Brown J.A. in his decision on the stay motion that delay in obtaining a date of a civil jury trial can, by itself, constitute prejudice. Implicit in the Divisional Court's reasoning is that delay is to be expected and tolerated; it is the ordinary course. That is precisely the type of complacency that has led to the civil justice system's systemic delay and was subject to criticism by the Supreme Court of Canada in Hryniak v. Mauldin.

Second, in considering a request to strike a jury notice, the court may look beyond the parties' interests and consider the broader interests of the administration of justice. While the Divisional Court purported to consider the administration of justice, the importance of the administration of justice in its analysis was almost totally discounted. A proper consideration of the administration of justice would recognize that local judges are best positioned to understand the availability of resources and the appropriate approach in the circumstances of a given case. An appeal court must respect the reasonable exercise of that discretion. It impedes...