Court Of Appeal Summaries (April 12 ' April 16, 2021)

• Published date: 19 April 2021
• Subject Matter: Finance and Banking, Corporate/Commercial Law, Insurance, Litigation, Mediation & Arbitration, Tax, Family and Matrimonial, Insolvency/Bankruptcy/Re-structuring, Financial Services, Fund Management/ REITs, Corporate and Company Law, Insolvency/Bankruptcy, Family Law, Insurance Laws and Products, Arbitration & Dispute Resolution, Court Procedure, Trials & Appeals & Compensation, Income Tax, Trusts
• Law Firm: Blaney McMurtry LLP
• Author: Mr John Polyzogopoulos

Good evening.

Please find below our summaries of the civil decisions of the Court of Appeal for the week of April 12, 2021.

Continue Reading

Marshallzehr Group Inc. v. Ideal (BC) Developments Inc. addressed the interpretation of a commitment letter for a commercial loan cancelled by the lender as a result of the borrower's failure to satisfy the conditions of financing (the postponement of a pre-existing mortgage). At trial, the respondent was awarded certain amounts for its fees and expenses, including the lender's fee, which was payable out of the amount advanced. The Court of Appeal found for the lender on most issues, including its right to cancel the financing, but it sided with the borrower and determined the lender's fee had not been earned because no funds were advanced. The result turned on the specific wording of the commitment letter.

Nemchin v. Green dealt with the statutory assignment and trust provisions of section 267.8 of the Insurance Act which required a plaintiff who had been compensated for their injuries by a defendant to assign collateral benefits they received to the defendant's insurer. The purpose of these provisions is to avoid double-recovery.

Makeeva v. Makeev is a family law decision. The Court allowed the cross-appeal because the trial judge failed to deduct the value of the respondent's date of marriage assets (a condo that was not a matrimonial home) when calculating the equalization payment to be made.

Please join us on April 27, 2021, from 5:30-7:45pm for our fifth annual "Top Appeals" CLE, which will take place via Zoom. We are set to have a great turnout. Justice Benjamin Zarnett will be co-chairing the event with myself and Chloe Snider of Dentons. Following is our excellent slate of decisions and panelists:

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, Weintraub Erskine Huang 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, Miller Thomson LLP

D.J. Miller, Thornton Grout Finnigan LLP

There is still plenty of time to register for the program by visiting the OBA's website.

Wishing everyone a safe and pleasant weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Marshallzehr Group Inc. v. Ideal (BC) Developments Inc., 2021 ONCA 229

Keywords: Contracts, Breach, Interpretation, Commercial Reasonableness, Duty of Good Faith and Fair Dealing, Debtor-Creditor, Commercial Lending, Commitment Letters, Conditions, Termination, Damages, Lender's Fees, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Ventas, Inc. v. Sunrise Senior Living Real Estate Investment Trust (2007), 85 O.R. (3d) 254 (C.A.), Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2017 ONCA 293, Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7, Chijindu v. Prudential Property Management, 2014 ONSC 4759

Makeeva v. Makeev , 2021 ONCA 232

Keywords: Family Law, Spousal Support, Child Support, Lump Sum Payments, Imputed Income, Equalization of Net Family Property, Date of Marriage Assets, Reopening of Case, Fresh Evidence, Divorce Act, section 15.3(1), Family Law Act, section 38.1(1)

Nemchin v. Green , 2021 ONCA 238

Keywords: Insurance, Subrogation, Collateral Benefits, Long-term Disability, Statutory Assignment of Rights and Benefits, Statutory Trusts, Civil Procedure, Procedural and Natural Justice, Insurance Act, R.S.O. 1990, c. I.8, Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 267.8, Lewin on Trusts, 19th ed. (London: Sweet & Maxwell, 2015), Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.), Kant v. The Queen, [2001] 2 C.T.C. 2703 (T.C.C.), Bapoo v. Co-Operators General Insurance Co. (1997), 154 D.L.R. (4th) 385 (Ont. C.A.), leave to appeal refused, [1998] S.C.C.A. No. 62, Cadieux v. Cloutier, 2018 ONCA 903, leave to appeal refused [2019] S.C.C.A. No. 63, Carroll v. McEwen, 2018 ONCA 902, Cobb v. Long Estate, 2017 ONCA 717, El-Khodr v. Lackie, 2017 ONCA 716, leave to appeal refused, [2017] S.C.C.A. No. 461, Re Scott, [1948] SASR 193, Frederick v. Aviation & Gen. Ins. Co., [1966] O.J. No. 1064 (C.A.), Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Pugh v. Canada, [2000] T.C.J. No. 585, Bouchard v. Canada, 2008 TCC 408.

Short Civil Decisions

Lengyel v. TD Home and Auto Insurance, 2021 ONCA 237

Keywords: Torts, Negligence, MVA, Civil Procedure, Settlements, Court Approval, Litigation Guardians, Appeals, Jurisdiction, Kavuru (Litigation guardian of) v. Heselden, 2014 ONSC 6718.

CIVIL DECISIONS

Marshallzehr Group Inc. v. Ideal (BC) Developments Inc., 2021 ONCA 229

[Rouleau, Brown and Miller JJ.A.]

Counsel:

M.A. Russell, for the appellants

S. Schwartz, for the respondents

Keywords: Contracts, Breach, Interpretation, Commercial Reasonableness, Duty of Good Faith and Fair Dealing, Debtor-Creditor, Commercial Lending, Commitment Letters, Conditions, Termination, Damages, Lender's Fees, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Ventas, Inc. v. Sunrise Senior Living Real Estate Investment Trust (2007), 85 O.R. (3d) 254 (C.A.), Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2017 ONCA 293, Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7, Chijindu v. Prudential Property Management, 2014 ONSC 4759

facts:

The respondents, Marshallzehr Group Inc. ("MZ"), agreed to advance funds to the appellants, Ideal (BC) Developments Inc. ("Ideal"), for a residential development project under a commitment letter (the "CL"). Under the terms of the CL, MZ was going to syndicate the loan but was not required to advance any funds to Ideal until Ideal had satisfied certain preconditions. Shortly after the CL was executed, the syndicated lenders began to advance funds, but because Ideal had not satisfied the preconditions, MZ transferred the funds to its counsel to be held in trust pending the satisfaction of the preconditions. MZ informed Ideal that interest was beginning to accrue on the funds.

Roughly one month later, MZ notified Ideal that it was terminating the CL because the funding conditions had not been met. One of the predominant issues was that MZ and Ideal could not agree on a postponement and standstill agreement for a pre-existing first mortgage. The pre-funding conditions required the execution of all ancillary agreements including postponements in a form satisfactory to MZ (the "Subordinate Financing Clause"). The parties could never agree on the form of these postponements. No funds were ever advanced to Ideal.

MZ brought this action to recover its fees and expenses and Ideal counter-claimed for damages caused by a wrongful termination of the CL by MZ. MZ moved for summary judgment which was granted in favour of MZ both on the main action and the counter-claim.

issues:

(1) Did the motion judge err in determining that MZ had the...