Ontario Court Of Appeal Summaries (April 20 – 24, 2015)

Hello everyone. It was a busy week for the Court of Appeal.

This week, the court dealt with the appropriate treatment of financial assistance, statutory accident benefits and various other settlement allocations in the context of a bankruptcy following a motor vehicle accident. It upheld an Environmental Review Tribunal decision that found serious and irreversible harm to the Blanding's turtle and put the brakes on plans to develop a wind farm in Prince Edward County.

In the area of civil procedure, there was a forum non conveniens decision which found that England was a more appropriate forum than Ontario to litigate a matter dealing with abduction, incarceration and torture in Iran. The court also dealt with whether summary judgement was an efficient and proportionate way to deal with an action commenced as a simplified proceeding under Rule 76.

The court dealt with various contract disputes. One case dealt with liability for road resurfacing work; a second dealt with whether the terms of various agreements allowed a party to withhold funds owing under a promissory note; a third dealt with whether Alberta's ultimate limitation period of 10 years or Ontario's ultimate limitation of 15 years applied in a particular context; and a fourth dealt with the applicability of an entire agreement clause in a real estate agreement of purchase and sale.

With regard to damages, the court clarified whether punitive damages could be joint and several, and whether punitive damages could be made against, rather than in favor, of a deceased's estate.

In family law, the court decided whether allowing overnight visits by a parent in a custody dispute would be in the child's best interest.

There were also several reviews of Ontario Review Board decisions.

Conforti (Re), 2015 ONCA 268

[Laskin, Blair and Pepall JJ.A.]

Counsel:

Robert A. Klotz, for the appellant, Vincenzo Francesco Conforti

Howard F. Manis and Debora Miller-Lichtenstein, for the respondent Trustee in Bankruptcy, Pat Robinson Inc.

Keywords: Bankruptcy Law, Bankruptcy and Insolvency Act, Motor Vehicle Accident, Calculation of Total Income, Surplus Income for Distribution to Creditors, Financial Assistance, Statutory Accident Benefits

Facts:

The appellant, Vincenzo Francesco Conforti, was permanently disabled as a result of a motor vehicle accident and was unable to continue to work in his previous employment as a truck driver. He claimed statutory accident benefits ("SABs") and also commenced an action for damages. Two and a half years after the accident, he filed an assignment in bankruptcy. While bankrupt, he received financial assistance from the Ontario Ministry of Community and Social Services (the "Government"). He also received proceeds from the settlements of his SABs claim and his action. The appellant failed to disclose either of the settlements to his Trustee in Bankruptcy.

As part of the bankruptcy proceedings, the Trustee was required to calculate the appellant's total and surplus income under s. 68 of the Bankruptcy and Insolvency Act to ascertain if any amount was available for distribution to the appellant's creditors. The Trustee sought directions from the court on the appropriate treatment to be accorded the financial assistance and the settlement payments received by the appellant. At the same time, the appellant asked the court for a discharge from bankruptcy.

The motion judge provided directions and included all of the financial assistance, all of the SABs settlement, and a pro-rated portion of the settlement of the action proceeds in the appellant's total income calculation. This resulted in surplus income of $27,986.28 available for creditors. He also imposed a $15,000 penalty on the appellant due to his non-disclosure. The appellant was granted a discharge upon payment of these two sums.

The appellant appealed certain parts of the motion judge's order. He submitted that the motion judge erred in his treatment of the financial assistance and settlement payments and in his pro-rating methodology. He argued that no surplus income was owed to the Trustee for distribution to creditors. He accepted that he should be admonished for his conduct, but submitted that a penalty of $15,000 was only appropriate if no surplus income was payable.

Issues:

(1) Did the motion judge err in including the financial assistance payments in the appellant's total income calculation?

(2) Did the motion judge err in including the settlement allocations for future care, housekeeping and costs, disbursements and HST, less an additional amount in legal fees, in the total income calculation?

(3) Did the motion judge err in including all of the SABs settlement proceeds of approximately $21,000 in the appellant's total income calculation?

(4) Did the motion judge err in pro-rating the funds allocated to future loss of competitive advantage over the applicant's years in bankruptcy relative to his estimated remaining working life of 15 years?

(5) Did the motion judge err in ordering a penalty of $15,000?

Decision: Appeal allowed, in part

Reasoning:

(1) Yes. Following the accident, the appellant received SABs at the rate of $1,600 per month after tax until December 31, 2008. He then claimed additional SABs payments and also applied for financial assistance from the Government. The Government agreed to pay the fees for his assignment into bankruptcy and to provide him with monthly financial assistance. In return, the appellant agreed to reimburse the Government from the proceeds of his personal injury action. The repayment obligation was secured by an assignment of those proceeds. The agreement and the assignment are signed and dated February 2009. Thereafter, the appellant received financial assistance payments monthly. The appellant was not bankrupt in February 2009 when he signed the agreement and gave the assignment to the Government. The assignment was security to ensure repayment of the loan made by the Government to the appellant. At the time, it was open to him to give an assignment of the fruits of his personal injury action.

The Trustee never challenged the assignment, nor put the Government on notice of an issue with it. The Government did not file a proof of claim in the bankruptcy and there was no evidence before the court on the issue of perfection. The Government loan cannot be described as a substitution for income, akin to income, in the nature of income or to have retained its (previous) character of income. Subject to the issue of perfection, it would appear to be a secured debt. The motion judge's decision left the appellant exposed to an obligation to repay 100 per cent of the debt to the Government, while the inclusion of this amount in the appellant's total income calculation effectively imposed an additional payment obligation on him. The motion judge erred in including approximately $38,000 on account of the financial assistance payments in the appellant's total income calculation

(2) Yes. The motion judge erred in treating any part of the amount received for legal costs, disbursements and HST as income received by the appellant. The court found that the payments for future care and housekeeping were personal to the appellant and akin to damages on account of pain and suffering. They should not be included in the total income calculation.

(3) No. The appellant paid all of the SABs settlement proceeds to a Mr. Crupi. He did not disclose any debt owed to Mr. Crupi in his statement of affairs; he did not disclose the debt to his Trustee; and he did not disclose to the Trustee that he had paid the full sum of $21,892.59 to Mr. Crupi. In these circumstances and based on the record before him, it was open to the motion judge to treat this lump sum payment as income in the year of receipt.

(4) Yes. Before the motion judge, the appellant argued that all of the funds allocated to future loss of competitive advantage should be pro-rated over the appellant's years in bankruptcy relative to his estimated remaining work life of 15 years. The motion judge acceded to the appellant's submissions but applied a fraction of 4/15. Before the Court of Appeal, the appellant argued that the numerator was in error and that the pro-rating fraction should have been 2/15 reflecting the two years between the settlement of the personal injury action on February 10, 2010 and the appellant's discharge in May 2012 and not the 4/15 applied by the motion judge. The allocation on account of future loss of competitive advantage is in the nature of a general damages payment and, as such, the date of the settlement is the proper commencement date for the calculation. The motion judge correctly pro-rated the settlement payment of $100,000 over 15 years but used the September 24, 2009 date of the assignment into bankruptcy and the May 2012 date of discharge as the relevant dates for the purpose of calculating the appellant's total income. Instead, the relevant dates were February 10, 2010 and May 2012. These dates result in a fraction of 2/15.

(5) No. In the event that the appeal on surplus income was allowed, the appellant had no objection to the penalty of $15,000, The penalty of $15,000 was therefore affirmed.

Kalra v. (Re), 2015 ONCA 262

[Doherty, Cronk and Hourigan JJ.A.]

Counsel:

Andrew Menchynski, for the appellant

Kevin Rawluk, for the Crown respondent

Michelle O'Bonsawin, for the Brockville Mental Health Centre

Keywords: Endorsement, Administrative Law, Mental Health, Conditional Discharge

Holding: Appeal dismissed.

Reasoning: The Board's order continuing the conditional discharge was not unreasonable and it did not reflect a failure to approach its task in accordance with the binding authorities. The Court did not read Winko v. British Columbia (Forensic Psychiatric Institute), [1999] 2 S.C.R. 625 as requiring that the Board identify a specific risk or harm in its assessment.

The Board dealt with the attitude of the appellant's parents toward his illness as opposed to...