Ontario Court Of Appeal Summaries (June 1 – 5, 2015)

Hello everyone. Below are the summaries of this week's Ontario Court of Appeal decisions. There were not very many decisions released this week. Topics covered include the duty to defend in insurance law, real estate, bankruptcy and insolvency, unjust enrichment, medical negligence, landlord and tenant, and family law.

Keys v. Intact Insurance Company, 2015 ONCA 400

[Juriansz, Lauwers, Huscroft JJ.A.]

Counsel:

O. Bourns, for the appellants.

C. Reil, for the respondents.

Keywords: Insurance Law, Duty to Defend, Cross-Claims, Third Party Claims

Facts:

The appellants appeal a decision that the respondent insurance company did not have the duty to defend them in a defamation action arising out of a video posted on the internet. The question before the judge was whether there was a "mere possibility" that the appellants were acting in the course of their employment when they made the video and posted it on the internet. The judge erred in the facts, believing that there was no cross-claim or third party claim against the applicants, when in fact there were both. As a result of this error, the application judge ruled that the substance of the claim in no way implicated the appellants as employees, making the video in the course of their employment.

Issue:

Is there a mere possibility that the appellants were employed by CASA and acting in the course of their employment when they made the video?

Holding:

Appeal allowed.

Reasoning:

Yes. All pleadings must be considered, with the most weight placed on pleadings against the potential insured, as the object of the exercise is to ascertain the "substance" and the "true nature" of the claims. This includes cross-claims and third party claims.

Nanne v. 3011650 Nova Scotia Limited (Michipicoten Forest Resources), 2015 ONCA 391

[Feldman, Benotto and Brown JJ.A.]

Counsel:

W. J. Earle and M. Furrow, for the appellant.

R. G. Doumani and P. Harrington, for the respondents.

B. A. Blumenthal, for the intervener Landlord and Tenant Board.

Keywords: Real Estate Law, Landlord and Tenant Law, Matthews v. Algoma Timberlakes Corp., Residential Tenancies Act, ss. 135(1) and ss. 38(1), The Planning Act, ss. 50(3), Rent Rebate

Facts:

During the 1970s and 1980s, the Algoma Central Railway leased out a large number of one-acre cottage sites on property it owned north of Sault Ste. Marie. In 1997, the Railway sold the land to the appellant, 3011650 Nova Scotia Limited c.o.b. as Michipicoten Forest Resources (the "Landlord"). In 2005, the Landlord sold part of the land and cottage sites to Algoma Timberlakes Corp., retaining for itself a tract of land on which 435 cottage sites are located.

In its 2010 decision in Matthews v. Algoma Timberlakes Corp., the court held that the Residential Tenancies Act, 2006 (the "RTA") applied to the cottage sites on the Timberlakes land.

The respondents are the tenants of three cottage sites located on the Landlord's property. The respondents lease the cottage sites from the Landlord and they own the structures that they have built on the sites. The leases are each for a term of one year but renewable for 20 years. (The leased sites and the cottages built thereon collectively will be referred to as the "Cottages".) In their Agreed Statement of Facts, the parties agreed that the Cottages on the Landlord's property are similar to those located on the Timberlakes land considered by this court in Matthews.

In 2012, the respondents applied to the Landlord and Tenant Board for rent rebates subject to ss. 135(1) of the RTA.

Although the Landlord acknowledged that the Matthews decision applied to the respondents' Cottages, it argued that the RTA could not apply to them without rendering those tenancies void. The Landlord based its argument on the subdivision control provisions of the Planning Act (the "PA"). Specifically, the Landlord contended that although the leases were at most 20 years in duration, the security of tenure provisions of the RTA would extend the tenancy agreements for the Cottages beyond 21 years, thereby contravening the subdivision control provisions of the PA, with the result that the tenancy agreements would not "create or convey any interest in land": PA s. 50(21). In order to avoid that result, the Landlord submitted that the Board should find that the respondents' Cottages were not subject to the RTA, but to the Commercial Tenancies Act, and dismiss their rent rebate applications.

The Board rejected the Landlord's argument, holding that the respondents' tenancies were subject to the RTA and, based on its interpretation of ss. 50(3) of the PA, their leases were not void under the PA. It ordered the Landlord to rebate to the respondents part of the rent they had paid for 2011 and 2012. The Divisional Court dismissed the Landlord's appeal. Leave to...