Court Of Appeal Summaries (June 26 ' 30, 2023)

• Published date: 06 July 2023
• Subject Matter: Litigation, Mediation & Arbitration, Trials & Appeals & Compensation, Professional Negligence, Civil Law
• Law Firm: Blaney McMurtry LLP
• Author: Mr John Polyzogopoulos and Ines Ferreira

Good evening.

Please find below our summaries of the civil decisions of the Ontario Court of Appeal for the week of June 26, 2023.

In 10720143 Canada Corp. v. 2698874 Ontario Inc., a default judgment was obtained against a business partner and his lawyer for fraud. The lawyer's appeal was dismissed. While the motion judge had erred in finding negligence, he did not err in finding that the lawyer had knowingly assisted his client in perpetrating the fraud against the respondent.

Other topics covered included vexatious litigants, plans of arrangement under the CBCA and the removal of trustees.

Wishing our readers a Happy Canada Day long weekend!

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferreira
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

10720143 Canada Corp. v. 2698874 Ontario Inc., 2023 ONCA 463

Keywords: Torts, Fraud, Knowing Assistance, Negligence, Civil Procedure, Noting in Default, Default Judgments, Appeals, Jurisdiction, Final or Interlocutory, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 6(1)(b), 19(1)(a) and (1.2), Rules of Civil Procedure, r. 19.08, National Bank of Canada v. Royal Bank of Canada (1999), 44 O.R. (3d) 533 (C.A.), Laurentian Bank of Canada v. Goldshmidt, 2013 ONCA 122, Laurentian Plaza Corp. v. Martin (1992), 7 O.R. (3d) 111 (C.A.), Roblin v. Drake, [1938] O.R. 711 (C.A.), Marcus Direct Marketing Inc. v. M & K Plastic Products Ltd., [1989] O.J. No. 467 (C.A.), Laredo Construction Inc. v. Sinnadurai (2005), 78 O.R. (3d) 321 (C.A.), Elekta Ltd. v. Rodkin, 2012 ONSC 2062

Di Santo v. Di Santo Estate, 2023 ONCA 464

Keywords: Wills and Estates, Trusts, Trustees, Removal, Succession Law Reform Act, R.S.O. 1990 c. S. 26, Part V, Virk v Brar Estate, 2014 ONSC 4611

NexJ Systems Inc. (Re), 2023 ONCA 451

Keywords: Corporations, Plans of Arrangement, Fair and Reasonable, Canada Business Corporations Act, R.S.C. 1985, C. C-44, s. 192, Rules of Civil Procedure, rr. 14.05(2) and 14.05(3), Hryniak v Mauldin, 2014 SCC 7, Re: Mid-Bowline Group Corp., 2016 ONSC 669, BCE Inc. v 1976 Debentureholders, 2008 SCC 79, Sattva Capital Corp. v Creston Moly Corp., 2014 SCC 53, Weyerhaeuser Company Limited v Ontario (Attorney General), 2017 ONCA 1007

Williams v. Tuck, 2023 ONCA 452

Keywords: Civil Procedure, Vexatious Litigants, Inherent Jurisdiction, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 140, Rules of Civil Procedure, Rule 2.1.01, Balanyk v. Dutton Brock LLP, 2014 ONCA 122, Lukezic v. Royal Bank of Canada, 2012 ONCA 350, Foy v. Foy (No. 2) (1979), 26 O.R. (2d) 220 (C.A.), 102 D.L.R. (3d) 342n, Kallaba v. Bylykbashi (2006), 207 O.A.C. 60, [2006] S.C.C.A. No. 144, Peoples Trust Company v. Atas, 2019 ONCA 359

Short Civil Decisions

Ferraro v. Neilas, 2023 ONCA 456

Keywords: Contracts, Interpretation, Interest

Caroti v. Kegalj, 2023 ONCA 455

Keywords: Fraud, Civil Procedure, Appeals, Dismissal for Delay, Lifting of Stay Pending Appeal, Evidence, Hearsay, Certified Translations, Courts of Justice Act, R.S.O. 1990, c. C.43 section 125(2)

Janzen v. Cook, 2023 ONCA 457

Keywords: Family Law, Child Support, Separation Agreements, Civil Procedure, Evidence, Child Support Guidelines, O. Reg. 391/97, Palmer v. The Queen, [1980] 1 S.C.R. 759, Barendregt v. Grebliunas, 2022 SCC 22, Roberts v. Roberts, 2015 ONCA 450

CIVIL DECISIONS

10720143 Canada Corp. v. 2698874 Ontario Inc., 2023 ONCA 463

[Doherty, Hoy and Favreau JJ.A.]

COUNSEL:

S. R. Fischhoff, for the appellants

J. Hamilton for the respondents

Keywords: Torts, Fraud, Knowing Assistance, Negligence, Civil Procedure, Noting in Default, Default Judgments, Appeals, Jurisdiction, Final or Interlocutory, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 6(1)(b), 19(1)(a) and (1.2), Rules of Civil Procedure, r. 19.08, National Bank of Canada v. Royal Bank of Canada (1999), 44 O.R. (3d) 533 (C.A.), Laurentian Bank of Canada v. Goldshmidt, 2013 ONCA 122, Laurentian Plaza Corp. v. Martin (1992), 7 O.R. (3d) 111 (C.A.), Roblin v. Drake, [1938] O.R. 711 (C.A.), Marcus Direct Marketing Inc. v. M & K Plastic Products Ltd., [1989] O.J. No. 467 (C.A.), Laredo Construction Inc. v. Sinnadurai (2005), 78 O.R. (3d) 321 (C.A.), Elekta Ltd. v. Rodkin, 2012 ONSC 2062

FACTS:

M.H. discussed the possibility of the respondent investing in his growing business. The respondent advanced $386,000 to M.H. Most of the money was supposedly for the purchase of a valuable farm property referred to as the "Keele property". The proposed investment never transpired and the respondent lost all of the money he had given to M.H.

The respondents brought their initial action against M.H., his companies, his counsel and his counsel's professional corporation. Counsel and his professional corporation are the appellants.

The respondents alleged that the appellants knowingly assisted their client, M.H. in defrauding the respondent. The respondents alleged that on the initiative of M.H., the respondents deposited $300,000 into the appellants' trust account ostensibly to find the purchase of the Keele property.

By October 2019, the respondent was concerned about his investment and inquired about his investment to the appellants. In early October, the respondent had received a letter authorized by the appellants which indicated that the purchase of the Keele property remained imminent and that a meeting would occur in the near future. Nothing in the letter suggested that the $300,000 earmarked for the purchase of the property was not still in the appellants' trust account. Subsequent investigation revealed the Keele property had been sold several months before the letter was sent and that the appellants had acted for the purchaser.

The respondents maintained that the appellants' deception with respect to the Keele property supported an inference that the appellants were a party to M.H.'s fraud and had knowingly assisted in the perpetration of that fraud. The appellants were also found liable in negligence.

The respondents successfully obtained default judgment against M.H., his companies, and the appellants. The respondent obtained judgment for $428,319.15 and punitive damages in the amount of $20,000 against M.H. alone.

ISSUES:

1. Does the court have jurisdiction to hear the appeal?
2. Did the motion judge err in refusing to set aside the noting in default of the appellants?
3. Did the motion judge err in granting judgment against the appellants?

HOLDING:

Appeal dismissed.

REASONING:

1. Yes.

The respondents did not raise any challenge to the court's jurisdiction in their factum. In correspondence from the Executive Legal Officer, the court raised with the parties the possibility that it did not have jurisdiction to hear the appeal.

The appellants challenged both the order refusing to set aside the noting in default of the defendants and the order granting default judgment. An order refusing to set aside a noting in default is not on its own, a final order. The motions to set aside the noting in default and the default judgment were heard together. The motion judge's decision to grant default...