Court Of Appeal Summaries (July 4 ' 8, 2022)

• Published date: 12 July 2022
• Law Firm: Blaney McMurtry LLP
• Author: Mr John Polyzogopoulos

Good afternoon.

Please find our summaries of the civil decision of the Court of Appeal for Ontario for the week of July 4, 2022.

Golden Oaks Enterprises Inc. v. Scott is a bankruptcy case in which the trustee successfully sued to set aside payments made to certain investors in a Ponzi scheme. The appeal was dismissed. The Court made it clear that claims initiated by trustees to set aside transfers under value under the Bankruptcy and Insolvency Act arise, for limitation period purposes, when the trustee is appointed, and not before. The knowledge and acts of the fraudster operating the bankrupt corporation are not to attributed to the bankrupt corporation for the purpose of having the limitation period running earlier than the date of bankruptcy. To do otherwise would be to defeat the purpose of the transfer under value sections in the BIA and would permit fraudsters to get away with their actions.

In Karkhanechi v Connor, Clark & Lunn Financial Group Ltd, another limitation period case, the Court found that the motion judge did not err in finding that the appellant's request for declaratory relief was statute-barred, as it was tied to consequential relief. The Court also agreed with the motion judge that there was no "rolling" limitation period in this case just because the disputed payments to the retired partner were being made over time.

Other topics included two insurance coverage decisions and stay pending appeal in the residential tenancies context.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Golden Oaks Enterprises Inc. v. Scott , 2022 ONCA 509

Keywords:Bankruptcy and Insolvency, Transactions Under Value, Ponzi Schemes, Corporation Attribution Doctrine, Piercing of Corporate Veil, Unjust Enrichment, Set-off, Civil Procedure, Limitation Periods, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s 95(1), s 96, s 97, s 178 (1) Criminal Code, R.S.C. 1985, c. C-46, s 347, Limitations Act, 2002, s 5, s 12, Securities Act, R.S.O. 1990, c. S.5, Doyle Salewski Inc. v. Scott, 2019 ONSC 5108, Housen v. Nikolaisen, 2002 SCC 33, Canada v. McLarty, 2008 SCC 26, Montor Business Corporation v. Goldfinger, 2016 ONCA 406, Canadian Dredge & Dock Co. v. The Queen, [1985] 1 S.C.R. 662, ChristineDeJong Medicine Professional Corp. v. DBDC Spadina Ltd., 2019 SCC 30, Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, R. v. McNamara, [1985] 1 S.C.R. 662 (S.C.C.), Singularis Holdings Ltd. v. Daiwa Capital Markets Europe Ltd., [2019] UKSC 50, Holt v. Telford, [1987] 2 S.C.R. 193, Youyi Group Holdings (Canada) Ltd. v. Brentwood Lanes Canada Ltd., 2020 BCCA 130, Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 28 O.R. (3d) 423 (Gen. Div.)

Pannone v. Peacock, 2022 ONCA 520

Keywords:Real Property, Residential Tenancies, Eviction, Sale of Property, Administrative Law, Landlord and Tenant Board, Civil Procedure, Appeals, Stay Pending Appeal, Residential Tenancies Act, 2006, SO 2006 c. 17,Courts of Justice Act, RSO 1990, c. C.43, Belton v. Spencer, 2020 ONCA 623; Bernard Property Maintenance v. Taylor, 2019 ONCA 830; and Bernard v. Fuhgeh, 2020 ONCA 529, RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, Circuit World Corp. v. Lesperance (1997), 33 O.R. (3d) 674 (C.A.), BTR Global Opportunity Trading Ltd. v. RBC Dexia Investor Services Trust, 2011 ONCA 620, Overseas Missionary Fellowship v. 578369 Ontario Ltd. (1990), 73 O.R. (2d) 73 (C.A.),Coote v. Ontario (Human Rights Commission), 2010 ONCA 580, Alliance to Protect Prince Edward County v. wpd White Pines Inc., 2018 ONCA 576, Fontaine v. Canada (Attorney General), 2018 ONCA 749, Bernard v. Fuhgeh, 2020 ONCA 529, Gill v. Laframboise, Board file CEL-00894-21

EPCOR Electricity Distribution Ontario Inc. v. Municipal Electric Association Reciprocal Insurance Exchange, 2022 ONCA 514

Keywords: Contracts, Insurance, Commercial General Liability, Coverage, Interpretation, Contra Proferentem, Municipal Act, 2001, S.O. 2001, c. 25, s 274(1), Business Corporations Act, R.S.O. 1990, c. B.16, s 136(5), Insurance Act, R.S.O. 1990, c. I.8, Rules of Civil Procedure, Rules 14.05(3)(d),(h), Le Treport Wedding & Convention Centre Ltd. v. Co-operators General Insurance Company, 2020 ONCA 487, Markevich v. Canada, 2003 SCC 9, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Progressive Homes Ltd. v. Lombard General Insurance Co. of Canada, 2010 SCC 33, Non-Marine Underwriters, Lloyd's of London v. Scalera, 2000 SCC 24, Douglas v. Stan Fergusson Fuels Ltd., 2018 ONCA 192, Godonoaga (Litigation guardian of) v. Khatambakhsh (2000), 50 O.R. (3d) 417 (C.A.), M.(E.) v. Reed (2003), 49 C.C.L.I. (3d) 57 (Ont. C.A.), Insurance Law in Canada, 2nd ed. (Scarborough: Carswell, 1991), John Birds, Ben Lynch and Simon Milnes, MacGillivray on Insurance Law, 13th ed. (London: Thomson Reuters (Professional) UK Ltd., 2015)

Northbridge General Insurance Company v. Aviva Insurance, 2022 ONCA 519

Keywords: Contracts, Insurance, Interpretation, Professional Liability Insurance, Commercial General Liability Policy, Primary Coverage, Excess Coverage, Equitable Contribution, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Family Insurance Corp. v. Lombard Canada Ltd., 2002 SCC 48, McKenzie v. Dominion of Canada General Insurance Company, 2007 ONCA 480, Lawyers' Professional Indemnity Company (LPIC) v. Lloyd's Underwriters, 2016 ONSC 6196

Karkhanechi v. Connor, Clark & Lunn Financial Group Ltd., 2022 ONCA 518

Keywords: Contracts, Partnership Agreements, Civil Procedure, Limitation Periods, Rolling Limitation Periods, Declarations, Limitations Act, 2002, S.O. 2002, c. 24, s. 16(1)(a), Marvelous Mario's Inc v St Paul Fire and Marine Insurance Co, 2019 ONCA 635, Pedersen v Soyka, 2014 ABCA 179, Pickering Square Inc v Trillium College Inc, 2016 ONCA 179, Richards v Sun Life Assurance Company of Canada, 2016 ONSC 5492, York Condominium Corp No 382 v Jay-M Holdings Ltd et al, 2007 ONCA 49, Fram Elgin Mills 90 Inc v Romandale Farms Limited, 2021 ONCA 201, Hamilton (City) v Metcalfe & Mansfield Capital Corporation, 2012 ONCA 156, Bonilla v Preszler, 2016 ONCA 759, Beccarea v Canadian National Railway Company, 2018 ONSC 630, Kyle v Atwill, 2020 ONCA 476, Alguire v The Manufacturers Life Insurance Company (Manulife Financial), 2018 ONCA 202

Short Civil Decisions

Salehi v. Association of Professional Engineers of Ontario, 2022 ONCA 511

Keywords: Civil Procedure, Orders, Varying or Setting Aside, Rules of Civil Procedure, s. 59.06(2)(a), R. v. Moura, 172 C.C.C. (3d) 340 (Ont. C.A.), Aristocrat v. Aristocrat (2004), 73 O.R. (3d) 275 (C.A.), leave to appeal to S.C.C. refused (2005), 207 O.A.C. 399, Mehedi v. 2057161 Ontario Inc.(Job Success), 2014 ONCA 604

Render v. ThyssenKrupp Elevator (Canada) Limited, 2022 ONCA 512

Keywords: Civil Procedure, Orders, Varying or Setting Aside, Rules of Civil Procedure, s. 59.06, Employment Standards Act, 2000, S.O. 2000, c. 41, s. 8(2), McDowell v. Barker, [2014] O.J. No. 2363 (C.A.), Hoang v. Mann Engineering Ltd., 2015 ONCA 838

Capone v. Fotak, 2022 ONCA 521

Keywords: Family Law, Appeals, Costs, Family Law Rules, Rule 24(12), Selznick v. Selznick, 2013 ONCA 35, Beaver v. Hill, 2018 ONCA 840

CIVIL DECISIONS

Golden Oaks Enterprises Inc. v. Scott, 2022 ONCA 509

[Strathy C.J.O., Roberts and Sossin JJ.A.]

Counsel:

A. Tomkins, for the appellants/respondents by way of cross-appeal

H. Chaiton and D. Bourassa, for the respondent/appellant by way of cross-appeal

Keywords: Bankruptcy and Insolvency, Transactions Under Value, Ponzi Schemes, Corporation Attribution Doctrine, Piercing of Corporate Veil, Unjust Enrichment, Set-off, Civil Procedure, Limitation Periods, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s 95(1), s 96, s 97, s 178 (1) Criminal Code, R.S.C. 1985, c. C-46, s 347, Limitations Act, 2002, s 5, s 12, Securities Act, R.S.O. 1990, c. S.5, Doyle Salewski Inc. v. Scott, 2019 ONSC 5108, Housen v. Nikolaisen, 2002 SCC 33, Canada v. McLarty, 2008 SCC 26, Montor Business Corporation v. Goldfinger, 2016 ONCA 406, Canadian Dredge & Dock Co. v. The Queen, [1985] 1 S.C.R. 662, Christine DeJong Medicine Professional Corp. v. DBDC Spadina Ltd., 2019 SCC 30, Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, R. v. McNamara, [1985] 1 S.C.R. 662 (S.C.C.), Singularis Holdings Ltd. v. Daiwa Capital Markets Europe Ltd., [2019] UKSC 50, Holt v. Telford, [1987] 2 S.C.R. 193, Youyi Group Holdings (Canada) Ltd. v. Brentwood Lanes Canada Ltd., 2020 BCCA 130, Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 28 O.R. (3d) 423 (Gen. Div.)

facts:

This appeal arose out of a failed financial company and the attempt of a trustee in bankruptcy to recover the funds lost to a Ponzi scheme called Golden Oaks Enterprises Inc. ("Golden Oaks"), founded by JL. The scheme operated in Ottawa from 2009 and 2013, during which Golden Oaks issued 504 promissory notes to 153 investors. The company charged interest rates in excess of 60%, which is considered usurious and criminal: s. 347 of the Criminal Code. Both Golden Oaks and JL, Golden Oaks' principal and directing mind, went into receivership and had made assignments in bankruptcy.

Doyle Salewski Inc. was appointed as trustee in bankruptcy (the "Trustee"). It began over 80 separate legal actions against creditors in 2015. Seventeen of these actions were brought against individuals and companies who received payments from Golden Oaks in 2012 and 2013, which included commission payments and interest on promissory notes. The 17 actions were heard together in a summary trial. The trial judge granted a claim under s. 95(1)(b) of the Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3 ("BIA") against the appellant LS for repayment of $72,575 in preferences ("LS Action").

With respect to the other...