Court Of Appeal Summaries (June 27-30, 2022)

• Published date: 05 July 2022
• Subject Matter: Finance and Banking, Corporate/Commercial Law, Insurance, Litigation, Mediation & Arbitration, Criminal Law, Insolvency/Bankruptcy/Re-structuring, Charges, Mortgages, Indemnities, Financial Services, Corporate and Company Law, Insolvency/Bankruptcy, Insurance Laws and Products, Trials & Appeals & Compensation, Personal Injury, White Collar Crime, Anti-Corruption & Fraud, Crime, Civil Law
• Law Firm: Blaney McMurtry LLP
• Author: Mr John Polyzogopoulos

Good afternoon.

We hope everyone is enjoying this Canada Day long weekend.

Please find below our summaries of the civil decisions of the Court of Appeal for Ontario for the week of June 27, 2022.

In Sakab Saudi Holding Company v Jabri, the respondents characterized their claim as an action in conspiracy to defraud. The appellants, who had no presence in Ontario, contested the jurisdiction over them and moved to have the action permanently stayed or dismissed against them. The Court upheld the dismissal of that motion by the motion judge, finding that the motion judge did not err in applying the Van Breda test for jurisdiction.

In Deemme v Healthcare Insurance Reciprocal of Canada, the appellant was fired as a nurse upon the Hospital discovering that she had misused an automatic medication dispensing unit to obtain Percocet tablets. The respondent insured the Hospital and their employees, however did not appoint counsel to represent the appellant due to a lack of coverage under the Policy. The appellant argued that the insurer had a duty to defend her, and that she was entitled to liability coverage, however, the motion judge found to the contrary. The appellant's appeal was dismissed by the Court. The Court agreed with the motion judge and found that the true nature of the claims against the appellant were the intentinal tort of intrusion against seclusion, which was not covered by the policy.

In Leaf Homes Limited v. Khan, the appellants were parties to an agreement of purchase and sale of a new home. When the appellants could not close on the purchase, the respondent obtained a default judgment against the appellants for the difference between the sale price to the appellants and the ultimate sale price. Gillese J.A. held that the motion judge, who had dismissed the appellants' motion to set aside the default judgment, made palpable and overriding errors in her assessment of the merits of the appellants' defence, relying on the Mountain View test. The Court set aside the default judgment and the costs order made against the appellants and their lawyer personally.

In 2257573 Ontario Inc. v. Furney, the motion judge granted judgment on certain mortgages, including some interest, even though criminal rates of interest were being charged. The Court dismissed the appeal. The appellants had argued on the motion that interest should be lowered, not eliminated. The motion judge could therefore hardly be faulted for granting some interest.

In Caledon (Town) v. Darzi Holdings Ltd., Justice Brown in chambers granted the appellant's former lawyer the right to intervene in the upcoming appeal. The appellant appeals a $1 million fine imposed on it as the sentence for contempt in failing to abide by an injunction order made against it in favour of the Town of Caledon. One ground of appeal the appellant will be raising will be ineffective assistance of counsel. There will also be an issue of fresh evidence on appeal regarding that issue. Apparently, former counsel had recorded conversations with their client, which recordings may or may not be admitted into the record. That issue will be determined by the panel on the appeal. Stay tuned.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Sakab Saudi Holding Company v. Jabri, 2022 ONCA 496

Keywords: Torts, Fraud, Conspiracy, Fraudulent Misappropriation, Solloway v Klondex Mines Ltd, 2014 ONSC 391, Club Resorts Ltd v Van Breda, 2012 SCC 17, Knowles v Lindstrom, 2014 ONCA 116, Canada v South Yukon Forest Corporation, 2012 FCA 165, Vahle v Global Work & Travel Co Inc, 2020 ONCA 224, Ontario v Rothmans Inc, 2013 ONCA 353, Boyd v Cook, 2016 BCCA 424, Lapointe Rosenstein Marchand Melançon LLP v Cassels Brock & Blackwell LLP, 2016 SCC 30

Demme v. Healthcare Insurance Reciprocal of Canada, 2022 ONCA 503

Keywords: Contracts, Insurance, Commercial and General Liability Insurance, Coverage, Duty to Defend, Exclusions, Torts, Intrusion Upon Seclusion, Bodily Injury, Personal Health Information Protection Act, 2004, S.O. 2004, c. 3, Sched. A, Class Proceedings Act, 1992, S.O. 1992, c. 6, s. 5(1)(a), Stewart v. Demme, 2022 ONSC 1790 (Div. Ct.), Stewart v. Demme, 2020 ONSC 83, Jones v. Tsige, 2012 ONCA 32 , Non-Marine Underwriters, Lloyd's of London v. Scalera, 2000 SCC 24, Monenco Ltd. v. Commonwealth Insurance Co., 2001 SCC 49, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, Panasonic Eco Solutions Canada Inc. v. XL Specialty Insurance Company, 2021 ONCA 612, Tedford v. TD Insurance Meloche Monnex, 2012 ONCA 429, Oliveira v. Aviva Canada Inc., 2018 ONCA 321, Keys v. Intact Insurance Company, 2015 ONCA 400, Martin v. American International Assurance Life Co., 2003 SCC 16, Mutual of Omaha v. Stats, [1978] 2 S.C.R. 1153, Sansregret v. The Queen, [1985] 1 S.C.R. 570, Consolidated-Bathurst v. Mutual Boiler, [1980] 1 S.C.R. 888, Barbara Billingsley, General Principles of Canadian Insurance Law, 3rd ed. (LexisNexis Canada, 2020)

Leaf Homes Limited v. Khan, 2022 ONCA 504

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Civil Procedure, Default Judgments, Setting Aside, Procedural and Natural Justice, Reasonable Apprehension of Bias, Costs, Personal Liability, Lawyers, Fresh Evidence, Rules of Civil Procedure, Rule 19.09, 57.07(1), (2), Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, Palmer v. The Queen, [1980] 1 S.C.R. 759, HSBC Securities (Canada) Inc. v. Firestar Capital Management Corporation, 2008 ONCA 894, BHL Capital v. 2281165 Ontario Ltd., 2018 ONSC 7289, Zeifman Partners Inc. v. Aiello, 2020 ONCA 33, Peterbilt of Ontario Inc. v. 1565627 Ontario Ltd., 2007 ONCA 333, Techlantic v. Modellista, 2021 ONSC 746, Dentons Canada LLP v. Khan, 2021 ONSC 5261, Ross v. Filip, 2021 ONSC 1496, Yukon Francophone School Board, Education Area #23 v. Yukon (Attorney General), 2015 SCC 25, Galganov v. Russell (Township), 2012 ONCA 410, Rutman v. Rabinowitz, 2018 ONCA 279, Niagara Structural Steel (St. Catharines) Ltd. v. W.D. Laflamme Ltd. (1987), 58 O.R. (2d) 773 (C.A.)

2257573 Ontario Inc. v. Furney, June 30, 2022

Keywords: Contracts, Real Property, Mortgages, Damages, Interest, Usury, Canadian Charter of Rights and Freedoms, ss. 7, 12 and 15, Criminal Code, R.S.C., 1985, c. C-46, s. 347, Mortgages Act, R.S.O. 1990, c. M.40, Housen v. Nikolaisen, [2002] 2 S.C.R. 235, Transport North American Express Inc. v. New Solutions Financial Corp., [2004] 1 S.C.R. 249, Cheung v. Moskowitz Capital Mortgage, 2018 ONSC 1322

Caledon (Town) v. Darzi Holdings Ltd., 2022 ONCA 513

Keywords: Civil Procedure, Orders, Contempt, Sentencing, Fines, Appeals, Interveners, Ineffective Assistance of Counsel, Professional Conduct, Recording Clients, Fresh Evidence, Rules of Civil Procedure, Rule 13.01(2), Rules of Professional Conduct, Rule 4.03(2), Caledon (Town) v. Darzi Holdings Ltd., 2022 ONCA 455, Cowles v. Balac (2006), 83 O.R. (3d) 660 (C.A.), Gagnon v. Pritchard (2002), 58 O.R. (3d) 557 (S.C.), Dumais v. Zarnett (1996), 30 O.R. (3d) 431 (S.C.), John Sopinka, Sidney N. Lederman & Alan W. Bryant, The Law of Evidence in Canada, 6th ed. (Lederman, Fuerst, Stewart) (LexisNexis, 2022)

Short Civil Decisions

Marmer Penner Inc. v. Vacaru, 2022 ONCA 506

Keywords: Civil Procedure, Appeals, Costs

Just Energy Group Inc. (Re), 2022 ONCA 498

Keywords: Bankruptcy and Insolvency, Civil Procedure, Appeals, Leave to Appeal, Costs, Companies' Creditors Arrangement Act, R.S.C. 1985, c. C-36, Stelco Inc. (Re) (2005), 2005 CanLII 8671 (ON CA), Timminco Ltd. (Re), 2012 ONCA 552 Nortel Networks Corp. (Re), 2016 ONCA 332, 9354-9186 Québec inc. v. Callidus Capital Corp., 2020 SCC 10, Laurentian University of Sudbury (Re), 2021 ONCA 199

CIVIL DECISIONS

Sakab Saudi Holding Company v. Jabri, 2022 ONCA 496

[Pardu, Roberts and Miller JJ.A.]

Counsel:

H. Underwood, A. Max, E. Young and E. Fraser, for the appellants

M. Mohamed, QC, D. Fenton, A. McLachlan and J. Bell, for the respondents

Keywords: Torts, Fraud, Conspiracy, Fraudulent Misappropriation, Solloway v Klondex Mines Ltd, 2014 ONSC 391, Club Resorts Ltd v Van Breda, 2012 SCC 17, Knowles v Lindstrom, 2014 ONCA 116, Canada v South Yukon Forest Corporation, 2012 FCA 165, Vahle v Global Work & Travel Co Inc, 2020 ONCA 224, Ontario v Rothmans Inc, 2013 ONCA 353, Boyd v Cook, 2016 BCCA 424, Lapointe Rosenstein Marchand Melançon LLP v Cassels Brock & Blackwell LLP, 2016 SCC 30

facts:

The respondents alleged a massive international fraud in which billions of dollars were misappropriated from corporations in Saudi Arabia and dissipated around the world. They sued the S.K.A., Toronto resident, the alleged chief architect of that fraud, along with his son, M.A., and several companies alleged to have conspired with S.K.A. The appellants, who had no presence in Ontario, contested the Superior Court of Justice's jurisdiction over them. They moved to have the action permanently stayed or dismissed against them. The motion judge dismissed the appellants' motion. The appellants contended that in coming to her decision, the motion judge made factual errors, as well as multiple errors of mixed fact and law in applying the test for jurisdiction set out in Club Resorts Ltd v Van Breda.

The motion judge dismissed the appellants' motion. The appellants contended that in coming to her decision, the motion judge made palpable and overriding factual errors, as well as multiple errors of mixed fact and law in applying the test for jurisdiction set out in Club Resorts Ltd v Van Breda.

There were two competing characterizations of the claim. The respondents characterized their claim as an action in conspiracy to defraud, which began with a misappropriation of assets in Saudi Arabia and continued with manipulation of assets from Toronto by S.K.A, with the assistance and cooperation of others, particularly M.A. The appellants argued that the tort alleged is simply fraudulent misappropriation, and the tort would have been...