Court Of Appeal Summaries (December 5, 2022 ' December 9, 2022)

• Published date: 13 December 2022
• Subject Matter: Corporate/Commercial Law, Government, Public Sector, Litigation, Mediation & Arbitration, Media, Telecoms, IT, Entertainment, Family and Matrimonial, Corporate and Company Law, Contracts and Commercial Law, Family Law, Constitutional & Administrative Law, Arbitration & Dispute Resolution, Trials & Appeals & Compensation, Hotels & Hospitality, Civil Law, Wills/ Intestacy/ Estate Planning
• Law Firm: Blaney McMurtry LLP
• Author: Mr John Polyzogopoulos

Following are this week's summaries of the civil decisions of the Court of Appeal for Ontario for the week of December 5, 2022.

In Tar Heel Investments Inc. v. H.L. Staebler Company Limited, the Court considered whether the tort of conversion could be applied to intangible property such as the information in a book of business alleged by an employer to have been stolen by a departing employee. The Court held that it was not settled law that conversion could be applied to such property, finding that even if it were applicable, the trial judge had not made the necessary factual findings to satisfy the elements of the tort. The Court ordered a new trial on this and the other causes of action.

2505243 Ontario Limited (ByPeterandPaul.com) v. Princes Gates Hotel Limited Partnership is a contractual dispute between a commercial landlord ("PG") and respondent tenant ("250"). In early 2020, 250, which operated two hotel restaurants at the new Hotel X at Exhibition Place, sought to dissolve its contracts with PG, as traffic in the hotel was low and the restaurants were not doing well. PG ignored these requests. In March 2020, due to COVID, PG shut down its hotel without consulting 250 while also entering into discussions with another food provider. PG also refused to work with 250 to apply for COVID relief. PG terminated its contract with 250 for failure to pay rent and 250 brought an action for breach of contract. The trial judge found that the lease contracts had been terminated by PG in bad faith and awarded the trustee of 250 (which had since gone bankrupt), over $7 million dollars in reliance damages and over $2 million in employee compensation damages. PG appealed the trial judge's analysis and damages award. The Court held that the trial judge's analysis and conclusion were consistent with the law and determined that there was no error in awarding reliance (tort) damages for breach of contract rather than expectation (contract) damages. An injured party may elect to claim reliance damages rather than expectation damages when expectation damages cannot be proven.

Jonas v. Jonas, is a dispute about the interpretation of a Will, and in particular, with the meaning and application of Latin term 'per stripes'. The Court agreed with the application judge's finding that the testator's intention was to create two classes of beneficiaries (children and grandchildren).

There were also two family law cases, one dealing with the enforcement of letters of request/letters rogatory to obtain financial information about the husband's Ontario corporations, and the other an extension of time to appeal from a judgment granted at an uncontested trial after the husband's pleading had been struck for non-compliance with court orders.

Table of Contents

Civil Decisions

Adler v. Deloitte Touche Tohamtsu, 2022 ONCA 855

Keywords: Family Law, Civil Procedure, Documentary Discovery, Financial Disclosure, Private International Law, Conflict of Laws, Foreign Orders, Enforcement, Letters Rogatory, Canada Evidence Act, R.S.C. 1995, c. C-5, s. 46(1), Evidence Act, R.S.O. 1990, c. E.23, s. 60(1), Actava TV, Inc. v. Matvil Corp, 2021 ONCA 105, Presbytarian Church of Sudan v. Rybiak, [2006] 275 D.L.R. (4th) 512 (Ont. C.A.), Perlmutter v. Smith, 2020 ONCA 570, Michel v. Graydon, 2020 SCC 24

Tar Heel Investments Inc. v. H.L. Staebler Company Limited, 2022 ONCA 842

Keywords: Employment Law, Breach of Fiduciary Duty, Departing Employees, Unfair Competition, Property Law, Intangible Property, Client Lists, Ownership, Torts, Conversion, King v. Merrill Lynch Canada Inc., 2005 CanLII 43679 (Ont. S.C.), Boma Manufacturing Ltd. v. Canadian Imperial Bank of Commerce, [1996] 3 S.C.R. 727, Del Giudice v. Thompson, 2021 ONSC 5379, Mann Engineering Ltd. v. Desai, 2021 ONSC 7580, Utilebill Credit Corporation v. Exit It Contract Consulting Inc., 2022 ONSC 2307, Brant Avenue Manor Ltd. Partnership v. Transamerica Life Insurance Co. of Canada (2000), 48 O.R. (3d) 363 (S.C.), Canivate Growing Systems Ltd. v. Brazier, 2020 BCSC 232, Lac Minerals v. International Corona Resources Ltd., [1989] 2 S.C.R. 574

Jonas v. Jonas, 2022 ONCA 845

Keywords: Wills and Estates, Wills, Interpretation, Civil Procedure, Appeals, Costs, Courts of Justice Act, R.S.O. 1990, c. C.43, Rules of Civil Procedure, r. 57, Saunders v. Vautier (1841), 41 E.R. 482 (Eng. Ch. Div.), Housen v. Nikolaisen, 2002 SCC 33, Trezzi v. Trezzi, 2019 ONCA 978, Dice v. Dice Estate, 2012 ONCA 468, Re Harrington, [1985] O.J. No. 1046 (H.C.)

Fatahi-Ghandehari v. Wilson, 2022 ONCA 858

Keywords: Family Law, Spousal Support, Equalization of Net Family Property, Civil Procedure, Appeals, Extension of Time, Rules of Civil Procedure, r. 59.06(2), r. 61.04(1), Fatahi-Ghandehari v. Wilson, 2022 ONSC 4799, Enbridge Gas Distribution Inc. v. Froese, 2013 ONCA 131, Lamothe v. Ellis, 2022 ONCA 789, Peerenboom v. Peerenboom, 2020 ONCA 240, Hilton v. Hilton, 2021 ONCA 29

2505243 Ontario Limited (ByPeterandPaul.com) v. Princes Gates Hotel Limited Partnership, 2022 ONCA 859

Keywords: Contracts, Commercial Leases, Duty of Good Faith and Honest Performance, Damages, Reliance Damages, Expectation Damages, Civil Procedure, Trials, Witnesses, Exclusion Orders, Commercial Tenancies Act, R.S.O. 1990, c. L.7, s. 82., Callow Inc. v. Zollinger, 2020 SCC 45, PreMD Inc. v. Ogilvy Renault LLP, 2013 ONCA 412

Short Civil Decisions

Ash v. Ontario (Chief Medical Officer), 2022 ONCA 849

Keywords: Administrative Law, Judicial Review, Mandamus, Civil Procedure, Appeals, Directions, Requests to Admit, Rules of Civil Procedure, r. 51.02, Orlan Karigan & Associate Ltd. v. Hoffman (2000), 52 O.R. (3d) 235 (S.C.)

Nader v. University Health Network, 2022 ONCA 835

Keywords: Contracts, Interpretation, Employment, Severance, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53

MBM Intellectual Property Law LLP v. Drizen, 2022 ONCA 847

Keywords: Costs, Substantial Indemnity

CIVIL DECISIONS

Adler v. Deloitte Touche Tohamtsu, 2022 ONCA 855

[Simmons, Benotto and Favreau JJ.A.]

COUNSEL:

1. Cowling and A. Boissonneau-Lehner, for the appellants
2. Wadden and J. Manger, for the appellants
   S. Laubman and C. Pizzo, for the respondent

Keywords: Family Law, Civil Procedure, Documentary Discovery, Financial Disclosure, Private International Law, Conflict of Laws, Foreign Orders, Enforcement, Letters Rogatory, Canada Evidence Act, R.S.C. 1995, c. C-5, s. 46(1), Evidence Act, R.S.O. 1990, c. E.23, s. 60(1), Actava TV, Inc. v. Matvil Corp, 2021 ONCA 105, Presbytarian Church of Sudan v. Rybiak, [2006] 275 D.L.R. (4th) 512 (Ont. C.A.), Perlmutter v. Smith, 2020 ONCA 570, Michel v. Graydon, 2020 SCC 24

FACTS:

K.A and the respondent were engaged in divorce proceedings in California. K.A alleged that the respondent had a complex web of corporations that he used to shield his substantial income. Several of these corporations were located in Canada. The respondent was a sole or majority shareholder in four of the corporate appellants. He also had a 33% interest in SkyPower, a corporation based in Toronto.

The respondent had failed to comply with court orders requiring disclosure. K.A sought Letters Rogatory to obtain information required for her claims for property, spousal support and child support. Accordingly, the California court issued two Requests for International Judicial Assistance. The respondent delivered materials on behalf of several corporations and himself, and most of the corporate respondents entered into agreements with K.A or did not oppose the relief sought in the application.

K.A issued an application in Ontario to enforce the letters rogatory issued in California, which required production from the corporate appellants and the respondent's assistant. The application judge ordered the letters be recognized. The respondent sought to appeal on behalf of the four corporate appellants as well as SkyPower.

ISSUES:

(1) Did the application judge err in hearing the application because the respondent and SkyPower were not served?

(2) Did the application judge apply the incorrect test in recognizing the letters rogatory?

HOLDING:

Appeal dismissed.

REASONING:

(1) No

The Court held that even though the respondent was not a formal respondent in the underlying application, he was given standing in both California and Ontario to make submissions on behalf of himself and the corporate entities. Further, the Court held that the application material had been properly served on SkyPower as it had been served on the respondent, the CEO of SkyPower.

(2) No

The Court noted that a letter rogatory is a request from a judge to the judiciary of a foreign country for the performance of an act which, if done without the sanction of the foreign court, would constitute a violation of that country's sovereignty. In this case, the request is for production of documents from corporations in Canada. The Court stated that the decision to grant or refuse such a request is a matter of judicial discretion, entitled to deference, with the appropriate standard of...