Court Of Appeal Summaries (August 29, 2022 ' September 2, 2022)

• Published date: 06 September 2022
• Subject Matter: Finance and Banking, Corporate/Commercial Law, Employment and HR, Litigation, Mediation & Arbitration, Insolvency/Bankruptcy/Re-structuring, Charges, Mortgages, Indemnities, Financial Services, Corporate and Company Law, Insolvency/Bankruptcy, Contracts and Commercial Law, Contract of Employment, Employee Rights/ Labour Relations, Arbitration & Dispute Resolution, Trials & Appeals & Compensation, Civil Law
• Law Firm: Blaney McMurtry LLP
• Author: Mr John Polyzogopoulos and Ines Ferreira

Good afternoon,

Following are this week's summaries of the Court of Appeal for Ontario for the week of August 29, 2022.

In Breen v. Lake of Bays (Township), the Township was found liable to the current owners for negligent inspection of their cottage back in 1989-91.

In First National Financial GP Corporation v Golden Dragon Ho 10 Inc., the Court determined that a mortgagee of a closed mortgage does not have a common law right to accelerated interest. The terms of the mortgage govern, and the terms of this mortgage did not provide for accelerated interest in the event of a default by the mortgagor.

Other topics included two wrongful dismissal cases and security for costs.

We hope everyone had a wonderful Labour Day long weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferriera
Blaney McMurtry LLP
416.597.4895 Email

Table of Contents

Civil Decisions

Shedletsky v. EQ Advertising Group Ltd. , 2022 ONCA 619

Keywords: Contracts, Commercial, Share Purchase Agreement, Employment, Interpretation, Wrongful Dismissal, Termination Without Cause, Civil Procedure, Summary Judgment, Constructive Dismissal, Extricable Error, Commercial Reasonableness, Rules of Civil Procedure, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

Bowen v. JC Clark Ltd. , 2022 ONCA 614

Keywords: Contracts, Employment, Interpretation, Implied Terms, Wrongful Dismissal, Termination Without Cause, Damages, Discretionary Bonus, Performance Bonus, Bain v. UBS, 2016 ONSC 5362, aff'd 2018 ONCA 190, Greenberg v. Meffert (1985), 18 D.L.R. (4th) 548 (Ont. C.A.), Chann v. RBC Dominion Securities Inc. (2004), 34 C.C.E.L. (3d) 244 (Ont. S.C.)

Di Nunzio v. Di Nunzio , 2022 ONCA 618

Keywords: Civil Procedure, Appeals, Security for Costs, Rules of Civil Procedure, r.61.06(1)(a) and (c), Vout v. Hay, [1995] 2 S.C.R. 876, Pickard v. London Police Services Board, 2010 ONCA 643, York University v. Markicevic, 2015 ONCA 651, Health Genetic Center Corp. (Health Genetic Center) v. New Scientist Magazine, 2019 ONCA 576, Tucker v. Jones, [1916] 53 S.C.R. 431, Politzer v. Metropolitan Homes Ltd., [1976] 1 S.C.R. 363

First National Financial GP Corporation v. Golden Dragon Ho 10 Inc., 2022 ONCA 621

Keywords: Bankruptcy and Insolvency, Receiverships, Vesting Orders, Priority Dispute, Anti-Deprivation, Contracts, Real Property, Mortgages, Interpretation, Accelerated Interest, Civil Procedure, Default Judgments, Costs, Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3., s. s.244, First National Financial GP Corporation v. Golden Dragon Ho 10 Inc.and Golden Dragon Ho 11 Inc., 2019 ONSC 6127, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Re Belyon Properties Ltd. and Kelcey, [1968] 2 O.R. 257 (C.A.), Salah v. Timothy's Coffees of the World Inc., 2010 ONCA 673, Saperstein v. Royal Trust Corporation of Canada (1988), 24 B.C.L.R. (2d) 114 (C.A.), Bankruptcy of CAF +, 2013 ONSC 2749, 3 C.B.R. (6th) 123, NJS Midtown Portfolio Inc. v. CMLS Financial Ltd., 2020 ONSC 3973, 1186708 Ontario Inc. v. Attara Developments Limited, 2013 ONSC 3137, 1951584 Ontario Inc. v. Northern Bear Golf Club Inc., 2021 ABCA 91, Re Shankman and Mutual Life Assurance Co. of Canada (1985), 52 O.R. (2d) 65 (C.A.), Energy Fundamentals Group Inc. v. Veresen Inc., 2015 ONCA 514, Ford Homes Ltd. v. Draft Masonry (York) Co. Ltd. (1984), 43 O.R. (2d) 401 (C.A.), M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., [1999] 1 S.C.R. 619

Breen v. Lake of Bays (Township), 2022 ONCA 626

Keywords: Torts, Duty of Care, Proximity, Anns/Cooper Test, Standard of Care, Reasonableness, Causation, Damages, Liability of Public Authorities, Building Inspections, Property Law, Latent Defects, Building Code Act, 1992, S.O. 1992, c. 23, Building Code, O. Reg. 419/86, Anns v. London Borough of Merton, [1977] 2 All E.R. 492 (H.L.), Cooper v. Hobart, 2001 SCC 79, Ingles v. Tutkaluk Construction, 2000 SCC 12, Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63, 1688782 Ontario Inc. v. Maple Leaf Foods Inc., 2020 SCC 35, Charlesfort Developments Limited v. Ottawa (City), 2021 ONCA 410, Housen v. Nikolaisen, 2002 SCC 33, Ingles and Rothfield v. Manolakos, [1989] 2 S.C.R. 1259, Galaske v. O'Donnell, [1994] 1 S.C.R. 670, The Queen v. Saskatchewan Wheat Pool, [1983] 1 S.C.R. 205, Clements v. Clements, 2012 SCC 32, Allen M. Linden et al, Canadian Tort Law, 12th ed. (Markham, Ont.: LexisNexis, 2022)

H.M.B. Holdings Limited v. Antigua and Barbuda, 2022 ONCA 630

Keywords: Civil Procedure, Private International Law, Conflict of Laws, Jurisdiction, Foreign Judgment, Default Judgments, Ricochet Judgments, Enforcement, Comity, Real and Substantial Connection, Limitation Periods, Reciprocal Enforcement of Judgments Act, R.S.O. 1990, c. R.5, s.3(b), s. 3(g), Land Acquisition Act, 1958, c. 233, Jurisdiction and Proceedings Transfer Act, S.B.C. 2003, c. 28, Limitation Act, S.B.C. 2012, c. 13, s. 7, Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, s. 4, H.M.B. Holdings Ltd. v. Antigua and Barbuda, 2021 SCC 44, Morguard Investments Ltd. v. De Savoye, [1990] 3 S.C.R. 1077, Beals v. Saldanha, 2003 SCC 72, Chevron Corp. v. Yaiguaje, Spencer v. The Queen, [1985] 2 S.C.R. 278, Janet Walker, Castel & Walker: Canadian Conflict of Law, loose-leaf (2020-Rel. 82-9), 6th ed., Vol. 1 (Toronto: LexisNexis Canada Inc., 2021)

Short Civil Decisions

Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 620

Keywords: Appeal, Civil Procedure, Costs

Wilkshire v. 2055495 Ontario Inc. (Miska Trailers), 2022 ONCA 624

Keywords: Appeal, Civil Procedure, Costs

Leigh v. Rubio, 2022 ONCA 627

Keywords: Order, Appeal, Costs, Delay, Rules of Civil Procedure, r. 24(1)

Aylmer Meat Packers Inc. v. Ontario, 2022 ONCA 629

Keywords: Appeal, Costs, Prejudgment Interest, Compound Interest, Allocation of Trial Costs, Delay, Enbridge Gas Distribution Inc. v. Marinaccio, 2012 ONCA 650, 355 D.L.R. (4th) 333

LIV Communities v. Kasi, 2022 ONCA 631

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Damages, Civil Procedure, Default Judgments, Setting Aside, Business Name Act, R.S.O. 1990, c. B. 17

Iris Technologies Inc. v. Rogers Communications Canada Inc., 2022 ONCA 634

Keywords: Contracts, Arbitration Agreements, Civil Procedure, Jurisdiction, Leave to Appeal, Arbitration Act, 1991, S.O. 1991, c. 17. ss.17(7), 17(8), 17(9), and 45-50.1, International Commercial Arbitration Act, 2017, S.O. 2017, c. 2, Sched. 5, United Mexican States v. Burr, 2021 ONCA 64

CIVIL DECISIONS

Shedletsky v. EQ Advertising Group Ltd., 2022 ONCA 619

[Huscroft, Harvison Young and Sossin JJ.A.]

Counsel:

M.P. Gottlieb and P. Underwood, for the appellants

K. Prehogan and M. Skrow, for the respondents

Keywords: Contracts, Commercial, Share Purchase Agreement, Employment, Interpretation, Wrongful Dismissal, Termination Without Cause, Civil Procedure, Summary Judgment, Constructive Dismissal, Extricable Error, Commercial Reasonableness, Rules of Civil Procedure, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

facts:

The respondents sold all shares of their business, Tapped Network, to the appellants with the price paid partly in shares of the appellants and partly through an earnout mechanism which provided for the payment of up to $1.4 million over the following two years. The appellants agreed to employ two of the respondents for two years to help with the integration of the purchased business into the appellants' existing business. In turn, the respondents were able to continue to manage the operations and maximize their earnout payments. The respondents' employment agreements formed a part of the share purchase agreement ("SPA"). The SPA contained two pertinent provisions to this dispute: 1) an accelerated capital provision which stipulated that if the respondents were terminated without cause after the first anniversary of the closing but before the second, one half of the $1.4 million capital payment would become payable; and 2) where there was an unprofitable quarter, a termination for cause event would be triggered and the respondents could be terminated with cause and without any penalty or impact on the capital payments. On March 31, 2020, the respondents were furloughed due to the COVID-19 pandemic. Respondent E, alleged constructive dismissal on April 14, 2020 and two months later the appellants terminated E, claiming it was pursuant to the Unprofitable Quarter Provision. The motion judge granted the respondents' motion for summary judgment. The appellants raised several grounds of appeal.

issues:

(1) Did the motion judge err in his interpretation of the Unprofitable Quarter Provision in accordance with the "win-win" or "lose-lose" intention of the parties?

(2) Did the motion judge err in his interpretation of the Unprofitable Quarter Provision by reading in a provision which required the appellants to explicitly state that it was terminating E's employment for cause?

(3) Did the motion judge err by failing to consider whether his interpretation of the SPA was commercially reasonable or gave rise to a commercial absurdity?

holding:

Appeal dismissed.

reasoning:

(1) No.

The Court did not give effect to any of the appellants' grounds of appeal. The motion judge's interpretation of a contract was entitled to deference in the absence of an extricable error, and there was no such error. The motion judge emphasized that giving effect to the "win-win" purpose of the provision would nullify the clear wording of the contract, which stated "if [the respondents] are terminated without cause..." As the Unprofitable Quarter Provision was not exercised within E's termination, he was not terminated with cause under that provision. Although the appellants attempted to rely on the Unprofitable Quarter Provision to terminate E's employment with cause in June 2020, the motion judge found that E was, as a matter of fact, terminated without cause on March 31, 2020.

(2) No.

There was no extricable error in the motion judge's interpretation of the...