Ontario Court Of Appeal Summaries (April 6-10, 2015)

Hello everyone. We apologize for the delay in posting last week's Ontario Court of Appeal Summaries, but the Court's website was down on Friday afternoon and over the weekend and therefore the links to the decisions were not functioning. Below are summaries of last week's OCA civil decisions (non-criminal). Topics include the recovery by an insurer of overpayments of Long-Term Disability benefits, constructive dismissal, occupiers' liability and bank fraud. There is also an interesting summary judgment decision on the rescission of a Franchise Agreement in accordance with the Arthur Wishart Act (Franchise Disclosure), 2000.

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Bunan v. Toronto-Dominion Bank, 2015 ONCA 226

[Sharpe, Pepall and van Rensburg JJ.A]

Counsel:

L. Rosenstein, for the appellant

3. Boswell, for the respondent

   Keywords: Banking Law, Fraud, Breach of Contract, Negligence, Account Verification Agreement, Insufficiency of Reasons, Costs

   Facts:

   The appellant was defrauded by his cousins when he lent over $1 million to a partnership owned and controlled by them. They were able to make withdrawals from a bank account the appellant had established with the respondent bank. The appellant sued his cousins on personal guarantees and promissory notes they signed guaranteeing the debts of the partnership. He sued the respondent for breach of contract and negligence arising from withdrawals from his account, among other things. The respondent asserted the Financial Services Agreement signed by the appellant barred the appellant's claim. The Financial Services Agreement contained an account-verification provision which, in the absence of 30 days' written notice of errors, released the respondent from liability.

   At trial, the judge found in favor of the appellant in his action against his cousins but dismissed the action against the respondent bank on the basis of the verification agreement. The judge awarded costs in favour of the respondent bank in the amount of $22,000 payable by the cousins, not the appellant.

   The appellant appealed from the dismissal of his action against the respondent bank and submits that the judgment should be set aside on the basis of insufficiency of reasons and argued that the Financial Services Agreement did not provide the respondent with a defence in this case. The respondent bank sought leave to cross-appeal on the issue of costs.

   Issues:

   (1) Should the judgment in favour of the respondent bank be set aside due to an insufficiency of reasons from the trial judge?

   (2) Did the trial judge err in finding that the verification agreement relieved the respondent bank of liability?

   (3) Should the respondent bank be granted leave to cross-appeal the trial judge's costs order?

   Holding:

   Appeal dismissed. Leave to appeal the costs award granted and the cross-appeal on the issue of costs allowed.

   Reasoning:

   (1) No. The trial judge made an express finding of fact that the respondent bank's Customer Services Manager recalled the signing of the Financial Services Agreement. Although more elaborate reasons for his findings would have been preferable, the test on appeal on insufficiency of reasons is whether any deficiency "has occasioned prejudice to the exercise of [the appellant's] legal right to an appeal (R v Sheppard). The court held that there was ample evidence in the record to support the trial judge's conclusion that the agreement was executed.

   (2) No. The court held that the trial judge was correct in dismissing the appellant's claim against the respondent. Courts have repeatedly held that verification agreements may constitute a complete defence to a claim of unauthorized transactions. In the absence of written notification within 30 days, the appellant accepted the transaction information as valid and correct and provided a release to the respondent in regards to those transactions. This was not varied by any reasonableness requirement in the agreement. Despite the fact that the account was a savings account, the appellant still had a responsibility to examine the account. The court held that even if a reasonableness requirement was imported into the agreement, the appellant's conduct would not have reflected reasonable care.

   (3) Yes. The court held that the costs award made by the trial judge should be set aside and replaced with that proposed by the appellant in his costs submissions. The trial judge erred in his exercise of discretion as he did not consider all of the parties' submissions on costs despite writing that he had done so, as they had not yet all been filed by the parties. The appellant was ordered to pay the respondent bank costs in the amount of $39,000.

   Tags: Banking Law, Fraud, Breach of Contract, Negligence, Account Verification Agreement, Insufficiency of Reasons, Costs

   href="http://www.ontariocourts.ca/decisions/2015/2015ONCA0223.htm"target=_blank> Sioux Lookout (Municipality) v. Goodfellow, 2015 ONCA 223

   [Sharpe, van Rensburg and Pardu JJ.A.]

   Counsel:

   Alfred J. Esterbauer and Demetrios Yiokaris, for the appellant

   Allan D. McKitrick, for the respondent

   Keywords: Civil Procedure, Dismissal for Delay, Rules of Civil Procedure, Rule 48.14

   Facts: The appellant commenced ten separate Small Claims Court actions against the respondent municipality. The municipality commenced an action in the Superior Court against the appellant, that he defended with a counterclaim. Pursuant to an order in 2010, the actions were consolidated, and the appellants' claims against the municipality were all required to be asserted as part of his counterclaim in the Superior Court action.

   At a later date, the Court issued a status notice and the appellant requested a status hearing. A consent timetable order was issued requiring a Discovery Plan to be prepared by the parties and requiring affidavits of documents to be served. The appellant's counsel in the counterclaim did not deliver an affidavit of documents and did not respond to requests for his position. The municipality brought a motion to dismiss the appellant's claims for delay, which was granted.

   Issue(s): Did the motion judge err in dismissing the appellant's claim for delay under rule 48.14, rather than putting the onus on the municipality as would have been the case under Rule 24?

   Held: Appeal dismissed.

   Reasoning:

   The court found that the motion judge did not err in requiring the appellant to provide some reasonable explanation for his delay in complying with the order made on consent at the status hearing held at his request. The motion judge found that the appellant ignored the timetable and observed that there was merit to the municipality's submission that the flood and property damage claims from 2007 as set out in the appellant's claim were now "much more difficult, if not impossible to investigate and defend against in 2014".

   The court also noted that although rule 48.14 does not contain an express provision dealing with the consequences of failure to comply with an order made at a status hearing, rule 60.12 provides that where a party fails to comply with an interlocutory order, the court may, in addition to any other sanction provided by the rules: (a) stay the party's proceeding; (b) dismiss the party's proceeding or strike out the party's defence; or (c) make such other order as is just.

   Tags: Civil Procedure, Dismissal for Delay, Rules of Civil Procedure, Rule 48.14

   Wilkes v. Deep Foundations Contractors Inc., 2015 ONCA 231

   [Feldman, Benotto and Brown JJ.A.]

   Counsel:

20. A. Stefanik, for the appellant

16. McKeever, for the respondent

    Keywords: Employment Law, Endorsement, Wrongful Dismissal, Just Cause

    Facts:

    The respondent's wrongful dismissal action was successful at trial. The appellant's alleged just cause for termination was that the respondent continued to perform outside consulting work after the parties agreed this practice would stop. The trial judge weighed conflicting evidence on this issue and found that the respondent did not perform any consulting work after this agreement.

    The appellant asked the court to set aside the judgment on the basis that the reasons do not address an important issue of credibility and therefore do not tell the parties why the respondent won and the appellant lost.

    Holding: Appeal dismissed.

    Reasoning:

    There is no basis to interfere with the decision of the trial judge. Although he did not address the discrepancies in the evidence directly, his finding that the appellant's evidence did not substantiate its allegations that the respondent continued to perform consulting services after the parties' agreement effectively dealt with the issue.

    Tags: Employment Law, Endorsement, Wrongful Dismissal, Just Cause

    Chand v. Chand, 2015 ONCA 228

    [Feldman, Benotto and Brown JJ.A.]

    Counsel:

18. Chand, in person

11. Nathens and G. Schwartz, for the respondent

    Keywords: Family Law, Endorsement, Net Family Property, Equalization Payment

    Facts: The appellant appealed the amount of the equalization payment he was ordered to pay to the respondent by Herman J. of the Superior Court of Justice. The appellant argued that Herman J. erred in calculating the equalization payment in four ways: (1) by including in his net family property (NFP) money in his bank account that he said belonged to his sister; (2) by including in his NFP proceeds from his share of the sale of a Florida property where the proceeds of the sale had already been divided with the respondent; (3) by not including in the respondent's NFP approximately $60,000 which he said was in her ING bank account as well as income he said she earned from her rental property in Holland; and (4) in the valuation of the contents of his home and his artwork.

    Issues:

    (1) Did Herman J. err in calculating the amount of the equalization payment?

    Holding: The appeal was dismissed, and costs fixed at $15,000 were payable to the respondent.

    Reasoning:

    (1) No...