Ontario Court Of Appeal Summaries (May 15 – 19, 2017)

Good Afternoon,

Following are the summaries of civil decisions for the week.

In Biancaniello v. DMCT LLP, the Court of Appeal reversed the Divisional Court and the original motion judge, and held that a full and final release is just that, a full and final release. The fact that the plaintiff may not have discovered the claim until after giving the release did not mean that the claim had not been released.

In Bollman v. Soenen, a medical negligence case, the court discussed the principles surrounding informed consent, which contain subjective and objective aspects

In Black v. Owen, the Court reaffirmed its decision in Amberwood Investments Ltd. v. Durham Condominium Corp. No. 123, which held that the common law rule that positive covenants do not run with freehold land is settled law in Ontario.

Finally, in Usanovic v. Penncorp Life Insurance Company (La Capitale Financial Security Insurance Company), an insured missed the normal two-year limitation period to sue his insurer for the alleged wrongful termination of disability benefits. The plaintiff argued that when it wrote to him to terminate his benefits, the insurer should have advised him of the limitation period and that the failure to do so was a breach of the insurer's duty of good faith. Although acknowledging the commentary of our partner, Rod Winsor, in his book, Good Faith in Canadian Insurance Law, suggesting that good faith or other principles might support a duty to advise of a limitation period in some circumstances, notwithstanding authority to the contrary, the court was not prepared to create a duty on an insurer to inform an insured of the limitation period. The legislature had created such a duty in certain circumstances, and could choose to expand that duty to other circumstances if it wanted to do so.

Other topics covered include dismissal for delay, family law (setting aside domestic contracts), wrongful dismissal and construction law (breach of trust).

Have a great weekend.

Civil Decisions:

De Jesus v. Linamar Holdings Inc. (Camcor Manufacturing), 2017 ONCA 384

[Rouleau, Pardu and Roberts JJ.A.]

Counsel: R. A. Konduros, for the appellant M. MacKillop and Todd Weisberg, for the respondent

Keywords: Employment Law, Wrongful Dismissal, Just Cause, Burden of Proof, McKinley v. BC Tel, 2001 SCC 38, Reasonable Apprehension of Bias

Facts:

The appellant was employed as a production supervisor with the respondent. On October 8, 2013, his employment was terminated for cause after approximately 19.5 years of continuous employment, without notice or compensation in lieu of notice. The respondent terminated the appellant's employment because of a series of incidents that culminated in his having allowed 1,500 defective camshafts to be processed with "roping" marks during his shift and then in his having lied to the respondent about what had happened.

The trial judge accepted the respondent's evidence that 1,500 defective camshafts had been produced during the appellant's shift and that, if the appellant and his team had in fact been carrying out the mandated checks as often as they said they had, it would have been impossible for the appellant or his team members not to have discovered the defective camshafts. Indeed, the trial judge accepted the evidence of one of the packers that she and other packers had brought the roping issue to the appellant's attention on three occasions during their shift. The trial judge concluded that the appellant had lied about the roping issues that had occurred during his shift.

The trial judge held that the appellant's failure to supervise and to take any remedial steps once the roping problem was brought to his attention, combined with his dishonesty about what had happened, went to the heart of the employment relationship. Accordingly, the trial judge concluded that these facts, when taken together with the appellant's earlier disciplinary incidents, established on a balance of probabilities that the respondent had just cause to terminate the appellant's employment.

The employee appealed the trial judge's dismissal of his wrongful dismissal action.

Issues:

Did the trial judge reverse the onus that the respondent had to meet, erroneously requiring the appellant to prove that his employment had not been terminated for cause? Is there a reasonable apprehension of bias? Holding:

Appeal dismissed.

Reasoning:

The appellant submits that an improper reversal of the employer's onus resulted in the trial judge erroneously accepting the respondent's "impossibly exaggerated" evidence that 1,500 defective camshafts were produced during the appellant's shift and the respondent's hearsay evidence that 604 of those defective camshafts had to be scrapped. In support of his allegation of the trial judge's error, the appellant points to the following sentence near the end of the trial judge's conclusion, at para. 163: "On all of the evidence, the plaintiff has not met his onus that he was wrongfully terminated from his employment with the defendant." This concluding sentence referring to "onus" must be read in the context of the entirety of the trial judge's reasons. From the respondent's written and oral submissions at trial, it is apparent that the respondent accepted that it had the onus to demonstrate, on a balance of probabilities, that it had just cause to terminate the appellant's employment without notice or compensation in lieu of notice. Moreover, the trial judge applied the correct analysis for determining whether just cause has been established, as set out by the Supreme Court of Canada in McKinley v. BC Tel, 2001 SCC 38. Taken in this context, the trial judge's above-noted sentence at para. 163 of her reasons merely alludes to the fact that the appellant was unsuccessful at trial. Her analysis itself does not reflect a reversal of the employer's onus The trial judge did err in accepting the hearsay evidence about the 604 scrapped defective camshafts. However, this was not a palpable and overriding error because it did not affect the trial judge's assessment of the evidence or her ultimate determination of the issues. As the trial judge stated several times in her reasons, the key factual issue that she had to decide was whether 1,500 defective camshafts had been produced during the appellant's shift. Whether or not 604 of those camshafts were ultimately scrapped was immaterial to the trial judge's determination of the total number of defective camshafts.

Judges are afforded a strong presumption of impartiality that is not easily displaced, although that presumption can be rebutted by the trial judge's conduct. In support of his allegation of bias, the appellant places particular emphasis on the trial judge's negative reaction to counsel's failure to bring to the court's attention a decision of the Court of Appeal that questioned a procedural ruling that the trial judge had made earlier. The trial judge initially chastised appellant's counsel, describing his failure to bring the case to the court's attention as "bad advocacy". However, once counsel for both parties apologized and explained that the failure was unintentional, the trial judge's initial annoyance immediately disappeared. This exchange and the other concerns raised by the appellant do not demonstrate bias on the part of the trial judge. There is no evidence of inappropriate treatment by the trial judge of the appellant and his counsel. Criticism of counsel by the trial judge, as occurred here, or disagreement with the findings urged upon her by counsel, does not amount to bias or give rise to a reasonable apprehension of bias.

Biancaniello v. DMCT LLP, 2017 ONCA 386

[Feldman, Epstein and Miller JJ.A.]

Counsel:

T. Galligan, for the appellants

A. Pantel, for the respondents

Keywords: Torts, Professional Negligence, Accountants, Contracts, Settlements, Releases, Standard of Review, Correctness, Sattva Capital Corp. v. Creston Moly Corp.

Facts:

The respondent, Prinova Technologies, was incorporated in 1998 as a consulting business offering advice on document automation. It also developed a software business. From 2004 to 2007, the appellant, DMCT LLP, acted as Prinova's accountant. DMCT billed Prinova a total of $66,632.45 for services rendered on three separate matters, including a butterfly transaction. Prinova objected to paying the fees. Prinova alleged that it obtained little value for the services rendered and incurred damages as a result of some of the advice provided by DMCT. DMCT sued for its fees. Before a statement of defence was delivered, the parties agreed to settle the litigation for a total payment by Prinova of $35,000. As part of the settlement, the parties executed a mutual release dated March 31, 2008 (the "2008 Release").

In late 2011, in the course of a restructuring, Prinova learned that far from being tax-free, the butterfly transaction DMCT had structured could be subject to an income tax liability of approximately $1.24 million. As a result, Prinova obtained a court order dated January 23, 2013, rescinding the steps taken to implement the butterfly transaction. As part of the rescission application, Prinova included an affidavit from Enzo Testa, the DMCT partner who had advised Prinova on the butterfly transaction. In that affidavit, Testa acknowledged, without explanation, that the transactions as designed by DMCT did not comply with the relevant provisions of the Income Tax Act, and therefore were contrary to Prinova's intentions. Prinova incurred over $250,000 in legal and accounting fees in the process of obtaining the rescission order.

In May 2012, Prinova filed a notice of action against DMCT seeking an order setting aside the 2008 Release and claiming damages for negligence, breach of contract, misrepresentation and breach of fiduciary duty. DMCT moved for summary judgment to dismiss the action on the basis that Prinova's claim was barred by the 2008 Release.

The motion judge dismissed DMCT's motion for summary...