Court Of Appeal Summaries (November 29 ' December 3)

• Published date: 08 December 2021
• Subject Matter: Finance and Banking, Corporate/Commercial Law, Insurance, Litigation, Mediation & Arbitration, Family and Matrimonial, Insolvency/Bankruptcy/Re-structuring, Charges, Mortgages, Indemnities, Financial Services, Fund Management/ REITs, Corporate and Company Law, Directors and Officers, Insolvency/Bankruptcy, Contracts and Commercial Law, Family Law, Insurance Laws and Products, Court Procedure, Trials & Appeals & Compensation, Civil Law
• Law Firm: Blaney McMurtry LLP
• Author: Mr John Polyzogopoulos

Good afternoon.

Following are this week's summaries of the Court of Appeal for Ontario for the week of November 29 to December 3, 2021.

On December 1, 2021, the Court released what is sure to be one of this year's top appeals, not only because of the myriad of corporate legal issues considered, but because of its high-stakes, high-profile nature. In Extreme Venture Partners Fund I LP v. Varma, the Court considered claims of conspiracy, breach of contract, breach of fiduciary duty, and knowing assistance in breach of fiduciary duty arising from the underhanded business dealings of two of the directors of the corporate general partner of a limited partnership carrying on business in the tech sector. The limited partnership invested in start-up tech companies, including in the company that initially developed and launched the well-known dating App, Tinder. The directors who were operating the target business conspired with a prominent Silicon Valley tech billionaire, who was an original founding executive of Facebook, to sell him the business at a grossly suppressed price. In the process, they hid the limited partnership's ownership interest in the company that owned Tinder, rid themselves of their original partners, with whom they were not getting along, and increased their stake in the business. In an expansion of the categories of fiduciary relationships, the Court held that directors of a corporate general partner of a limited partnership owe a fiduciary duty not just to the corporate general partner, but also to the underlying limited partnership. The Court also allowed the cross-appeal, resulting in a prophylactic disgorgement award in the amount of $29.5 million (U.S.), representing the entirety of the profits reaped by the faithless fiduciaries, and more than doubling the disgorgement award made by the trial judge. The tech billionaire who knowingly assisted in the breach of fiduciary duty and was the primary beneficiary of that breach, was found jointly and severally liable for the full disgorgement award. Apologies in advance for the length of the summary, but I wanted to make sure that I gave our readers a full flavour of most, if not all, of the interesting and complicated factual and legal issues canvassed in this 55-page decision.

In Kumarasamy v. Western Life Assurance Company, the Court held that the respondent's long-term disability claim was statute-barred. The Court held that a clear and unequivocal denial of the respondent's long-term disability claim was not required to start the limitations clock. Having a disability claim and not receiving payment from the insurer on that claim was enough to start the running of the limitation period.

In Bianco v. Deem Management Services Limited, the Court held that the motion judge made no error in determining that the construction lien claimants in the matter had priority over the appellant's registered mortgage, the advances under which had been made years prior the mortgage was registered.

For our readers who are not yet aware of it, I would like to introduce them to a new online publication, Civil Procedure & Practice in Ontario (CPPO). The CPPO is a new free online resource jointly published by the University of Windsor and CanLII. CanLII is a not-for-profit organization operated by the Federation of Law Societies of Canada and is dedicated to assisting with access to justice through the free and open dissemination of the laws of Canada to all members of the public. The CPPO was written by a team of 135 leading litigators and experts in Ontario civil procedure, led by Professor Noel Semple of Windsor Law School. I had the privileged of co-writing two chapters to CPPO dealing with Rules 54 and 55 (Directing a Reference and Procedure on a Reference).

CPPO will serve as a guide to Ontario's Rules of Civil Procedure, Courts of Justice Act, and Limitations Act, and will be accessible not only to practitioners, but to members of the public. It contains not only the text of all these rules and statutory provisions, but also commentary and annotations to all the relevant case law applying and interpreting each rule and section. To access Civil Procedure & Practice in Ontario, please click here, and make sure to bookmark the site for easy access.

I would encourage all of our readers to consult CPPO in their daily practice, to spread the word among colleagues, and to provide any feedback they may have.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Kumarasamy v. Western Life Assurance Company, 2021 ONCA 851

Keywords: Contracts, Insurance, MVA, Long-Term Disability, Civil Procedure, Limitations Periods, Discoverability, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, Clarke v. Sun Life Assurance Company of Canada, 2020 ONCA 11, Longo v. MacLaren Art Centre Inc., 2014 ONCA 526, Thompson v. Sun Life Assurance Company of Canada, 2015 ONCA 162, Markel Insurance Company of Canada v. ING Insurance Company of Canada, 2012 ONCA 218, 407 ETR Concession Co. v. Day, 2016 ONCA 709, leave to appeal refused, [2016] S.C.C.A. No. 509, Nasr Hospitality Services Inc. v. Intact Insurance, 2018 ONCA 725, Presidential MSH Corp. v. Marr, Foster & Co. LLP, 2017 ONCA 325

Csizmazia v. Csizmazia, 2021 ONCA 865

Keywords: Family Law, Equalization of Net Family Property, Bankruptcy and Insolvency, Property of the Bankrupt, Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, ss 21, 69.3, 71, Family Law Rules, Rules 1(8.4) and 25(19)

Bianco v. Deem Management Services Limited, 2021 ONCA 859

Keywords: Real Property, Construction law, Construction liens, Contracts, Mortgages, Priority, Bankruptcy and Insolvency, Construction Act, R.S.O. 1990, c. C.30, ss. 71(1), 78, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3.3, ss. 193, 249, The Mechanics' Lien Act, R.S.O. 1970, c. 267, ss. 14(1), Boehmers v. 794561 Ontario Inc. (1993), 14 O.R. (3d) 781 (Gen. Div.), aff'd. (1995), 21 O.R. (3d) 771 (C.A.), Dorbern Investments Ltd. v. Provincial Bank of Canada, [1981] 1 S.C.R. 459, Jade-Kennedy Development Corp. (Re), 2016 ONSC 7125, XDG Ltd. v. 1099606 Ontario Ltd. (2014), 186 O.A.C. 33 (Div. Ct.)

Extreme Venture Partners Fund I LP v. Varma, 2021 ONCA 853

Keywords: Torts, Conspiracy, Inducing Breach of Contract, Breach of Contract, Limited Partnerships, Corporations, Piercing Corporate Veil, Group Enterprise Theory of Liability, Breach of Fiduciary Duty, Knowing Assistance of Breach of Fiduciary Duty, Damages, Joint and Several Liability, Disgorgement, Punitive Damages, Prejudgment Interest, Foreign Currency Exchange Rate, Civil Procedure, Trials, Amending Pleadings, Evidence, Credibility, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 121(1), Business Corporations Act, R.S.O. 1990, c. B. 16, s 135(4), Partnership Act, R.S.O. 1990, c. P.5, Rules of Civil Procedure, Rule 26.06, Penvidic v. International Nickel, [1976] 1 S.C.R. 267, Whitefish Lake Band of Indians v. Canada (Attorney General), 2007 ONCA 744, 1758704 Ontario Inc. v. Priest, 2021 ONCA 588, Southwind v. Canada, 2021 SCC 28, Hodgkinson v. Simms, [1994] 3 S.C.R. 377, Air Canada v. M & L Travel Ltd., [1993] 3 S.C.R. 787, Ultraframe (UK) Ltd. v. Fielding, [2005] EWHC 1638 (Ch.), Vyse v. Foster (1872) LR 8 Ch App 309, Enbridge Gas Distribution Inc. v. Marinaccio, 2012 ONCA 650, Imperial Parking Canada Corporation v. Anderson, 2015 BCSC 2221, McGrail v. Phillips, 2018 ONSC 3571, ScotiaMcLeod Inc. v. Peoples Jewellers Ltd. (1995), 26 O.R. (3d) 481, Frame v. Smith, [1987] 2 S.C.R. 99, Guerin v. R., [1984] 2 S.C.R. 335, Galambos v. Perez, 2009 SCC 48, In re Harwood, 637 F (3d) 615 at 622 (5th Cir 2011), In re USACafes, L.P. Litig., 600 A (2d) 43 (Del Ch 1991), Olson v. Gullo, (1994), 17 O.R. (3d) 790, Rochwerg v. Truster (2002), 58 O.R. (3d) 687, Strother v. 3464920 Canada Inc., 2007 SCC 24, Warman International Ltd v. Dwyer, [1995] HCA 18

Short Civil Decisions

Grand River Conservation Authority v. Geil, 2021 ONCA 861

Keywords: Civil Procedure, Contempt, Consent Orders, Evidence, Hearsay

Hamza v. Law Society of Ontario, 2021 ONCA 852

Keywords: Civil Procedure, Vexatious Litigants, Scaduto v. The Law Society of Upper Canada, 2015 ONCA 733

National Bank of Canada v. Guibord, 2021 ONCA 864

Keywords: Civil Procedure, Stay Pending Appeal, Writs of Possession, Summary Judgment, Rules of Civil Procedure, Rules 15.01(3) & 63.01(1), RJR-MacDonald Inc. v. Canada (Attorney General),[1994] 1 S.C.R. 311

CIVIL DECISIONS

Kumarasamy v. Western Life Assurance Company, 2021 ONCA 851

[MacPherson, Simmons and Nordheimer JJ.A.]

Counsel:

E. Bennet-Martin and H.M. Gastle, for the appellant
A.B. Kuciej, for the respondent

Keywords: Contracts, Insurance, MVA, Long-Term Disability, Civil Procedure, Limitations Periods, Discoverability, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, Clarke v. Sun Life Assurance Company of Canada, 2020 ONCA 11, Longo v. MacLaren Art Centre Inc., 2014 ONCA 526, Thompson v. Sun Life Assurance Company of Canada, 2015 ONCA 162, Markel Insurance Company of Canada v. ING Insurance Company of Canada, 2012 ONCA 218, 407 ETR Concession Co. v. Day, 2016 ONCA 709, leave to appeal refused, [2016] S.C.C.A. No. 509, Nasr Hospitality Services Inc. v. Intact Insurance, 2018 ONCA 725, Presidential MSH Corp. v. Marr, Foster & Co. LLP, 2017 ONCA 325

facts:

The respondent was injured in a car accident on August 25, 2014. At the time of the accident, the respondent was employed by Morris National Inc. ("Morris"), and was covered under Morris' group long-term disability ("LTD") policy with the appellant (the "Policy"). Under the terms of the Policy, the deadline for the respondent to provide a Notice of Claim to the appellant, and the first day that LTD benefits would become payable to the respondent, was February 26, 2015. The Policy also provided that a claimant waived their right to claim benefits if they did not provide notice within the prescribed time.

On August 26...