Ontario Court Of Appeal Summaries – July 4 – July 7, 2017

Following are the summaries for this week's civil decisions of the Court of Appeal for Ontario. Claims against lawyers were the theme of the week.

In Trillium Motor World Ltd. v. Cassels Brock & Blackwell LLP class action case, the Ontario Court of Appeal dismissed Cassels Brock's appeal from the liability finding against the firm for breach of fiduciary duty, but allowed, in part, the firm's appeal on damages and remitted the matter back to the trial judge for a recalculation of the loss of chance damages suffered by the terminated GM dealers.

In the companion decision in Trillium Motor World Ltd. v. General Motors of Canada Limited, the Court of Appeal upheld the trial judge's judgment dismissing the action against General Motors of Canada ("GMCL"). The Court confirmed that GMCL had not contravened the dealers' rights under the Arthur Wishart Act (Franchise Disclosure), 2000 (the "AWA").

In Goldentuler Estate v. Crosbie, the estate of a deceased lawyer was granted almost $550,000 in damages, plus $80,000 in punitive damages, against lawyers who had left the firm and improperly taken files with them. The trial and the appeal were both unopposed, as the defendant lawyers' defence had been struck.

In John v. Ballingall, the court confirmed that an online version of a newspaper article is covered under the Libel and Slander Act, meaning that a plaintiff must give notice under that Act within six weeks of learning of the publication and must commence suit within three months, otherwise the cause of action for libel is lost.

Other topics covered this week included assessment of lawyers' accounts, breach of contract, breach of trust, real property, commercial leases, crown wardship, employment law, non-share capital corporations, labour law, and SABs.

Table of Contents

Civil Decisions

Trillium Motor World Ltd. v. Cassels Brock & Blackwell LLP, 2017 ONCA 544

Keywords: Contracts, Solicitor and Client, Torts, Professional Negligence, Fiduciary Duties, Duty to Avoid Conflicts of Interest, Duty of Loyalty, , Damages, Loss of Chance, Class Proceedings, Class Proceedings Act, section 24, Aggregate Damages

Limited, 2017 ONCA 545

Keywords: Franchise Law, Arthur Wishart Act (Franchise Disclosure), 2000, section 11, 1518628 Ontario Inc. v. Tutor Time Learning Centres, LLC, 2006 CanLII 25276 (S.C.), Contracts, Enforcability, Public Policy, Class Proceedings, Class Proceedings Act, section 31(2), Costs

Abou-Mansour v. Abou-Mansour, 2017 ONCA 572

Keywords: Family Law, Civil Procedure, Adjournments, Evidence, Cross-Examination

Morriseau v. Sun Life Assurance Company of Canada, 2017 ONCA 567

Keywords: Labour Law, Collective Agreements, Mandatory Arbitration, Insurance Law, Long-Term Disability Benefits, Jurisdiction, Rules of Civil Procedure, Rule 21.01(3)(a)

Aviva Insurance Co. of Canada v. McKeown, 2017 ONCA 563

Keywords: Insurance Law, Insurance Act, Ontario Regulation 34/10, Statutory Accident Benefits Schedule s. 33(4) 3 ("SABS"), Examinations Under Oath, Automobile Insurance Rate Stability Act, Automobile Insurance Rate Stabilization Act, Financial Services Commission of Ontario Act, Statutory Interpretation

6Ares Law Professional Corporation v. Rock, 2017 ONCA 569

Keywords: Contracts, Settlements, Solicitor and Client, Assessment of Accounts, Solicitors Act, s. 3, Cohen v Kealey & Blaney (1985), 10 OAC 344

7Angus v. Port Hope (Municipality), 2017 ONCA 566

Keywords: Contracts, Interpretation, Sattva Capital Corp. v. Creston Molly Corp., 2014 SCC 53, Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19, Trusts, Three Certainties, Certainty of Intention, Charitable and Non-Charitable Purpose Trusts, Perpetuities Act, Schmidt v. Air Products Canada Ltd., [1994] 2 S.C.R. 611

8Canadian Northern Shield Insurance Company v. 2421593 Canada Inc., 2017 ONCA 570

Keywords: Contracts, Interpretation, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633, Inducing Breach of Contract, Summary Judgment

9K.F. v. Family and Children's Services of the Waterloo Region, 2017 ONCA 573

Keywords: Family Law, Access, Child and Family Services Act, R.S.O. 1990, c. C.11, s. 69(6), Fresh Evidence, Catholic Children's Aid Society of Metropolitan Toronto v. C. M., [1994] 2 S.C.R 165

10Polish Alliance of Association of Toronto Limited v. The Polish Alliance of Canada,2017 ONCA 574

Keywords: Corporations, Non-Share Capital Corporations, Corporations Act, R.S.O. 1990, c. C38, Unincorporated Voluntary Associations, Variation of Trusts Act, R.S.O. 1990, c. V. 1

11Couper v. Nu-Life Corp., 2017 ONCA 571

Keywords: Employment Law, Contracts of Employment, Damages

12John v. Ballingall, 2017 ONCA 579

Keywords: Torts, Defamation, Libel, Limitation Periods, Libel and Slander Act, ss. 5(1) and 6, Striking Pleadings, No Reasonable Cause of Action, Rules of Civil Procedures, r. 21

13D'Ascenzo v. Nichols,2017 ONCA 578

Keywords: Real Property, Contracts, Agreements of Purchase and Sale of Land, Repudiation, Remedies for Breach, Specific Performance, Rescission

14Goldentuler Estate v. Crosbie, 2017 ONCA 591

Keywords: Contracts, Lawyers, Breach of Fiduciary Duty, Damages, Punitive Damages

15L'Ouvrier Inc. v. Leung, 2017 ONCA 589

Keywords: Contracts, Real Property, Commercial Leases, Options to Renew, Civil Procedure, Summary Judgment, Adjournments

16Gustafson v. Johnson, 2017 ONCA 581

Keywords:Corporations, Winding Up, Civil Procedure, Appeals, Jurisdiction, Ontario Business Corporations Act, section 255

Civil Decisions

Trillium Motor World Ltd. v. Cassels Brock & Blackwell LLP, 2017 ONCA 544

[Cron, can Rensburg and Pardu JJ.A.]

Counsel:

P.H. Griffin, R. Jones and D. Glatt, for the appellant

  1. Finlay, M. Vermette, M. Statham, D. Sterns, A. Dick and A. Seretis, for the respondent

    Keywords: Contracts, Solictor and Client, Torts, Professional Negligence, Fiduciary Duties, Duty to Avoid Conflicts of Interest, Duty of Loyalty, , Damages, Loss of Chance, Class Proceedings, Class Proceedings Act, section 24, Aggregate Damages

    Facts:

    General Motors Corporation in the United States ("GM") and its Canadian subsidiary, General Motors of Canada Limited ("GMCL"), were among the companies affected by the 2008 global financial crisis. Both companies were on the brink of bankruptcy. Their only hope was financial bailouts from the American and Canadian governments. However, the governments made the bailouts conditional on acceptable restructuring plans. In GMCL's case, this meant cutting ties with hundreds of its dealerships across Canada.

    In late 2008 GMCL had a car dealership network in Canada consisting of 705 franchised dealers, 51 of which were Saturn dealers. One of the ways in which GMCL communicated with its dealers was through the Canadian Automobile Dealers Association ("CADA"). CADA was a long-time Cassel's client and retained Cassels during the relevant time period.

    By the end of 2008, both GM and GMCL were insolvent or close to insolvency. GMCL made many efforts to deal with its potential insolvency. The first was that it proposed a reduction of its dealer network in a revised bailout proposal submitted to the Ontario and federal governments (the "Canadian Governments"). The second was that it informed the Saturn dealers that it would discontinue the Saturn brand at the end of 2011. The third was that it hired financial advisors to begin preparations for a filing under the Companies' Creditors Arrangement Act ("CCAA"). A CCAA filing would have had serious financial consequences for GMCL, as well as others associated with or dependent on it. The dealers were particularly vulnerable because they would rank as unsecured creditors with little, if any, prospect for recovery in the bankruptcy or restructuring.

    By the end of April 2009, Cassels had three existing retainers involving GMCL and GM and one proposed retainer. The first retainer, as mentioned earlier, was the long-standing CADA retainer. The second retainer came in March 2009, when Saturn retained Cassels to provide legal advice about GMCL's potential termination of their dealerships. The third retainer came shortly thereafter, when Cassels also accepted a retainer to represent Canada in a potential commercial financing transaction to support GMCL and Chrysler Canada. The proposed retainer was in April 2009, when GMCL requested that Cassels represent the GMCL dealers in respect of a potential CCAA filing by GMCL.

    A group of Cassels lawyers, including the firm's managing partner, met to discuss any potential conflicts of interest prior to accepting the fourth retainer. They ultimately decided that accepting the GMCL retainer would not create a conflict of interest with the firm's Canada retainer, but agreed that an ethical wall should be erected within the firm and that each client should be informed about the firm's retainer by the other. As such, Cassels accepted the proposed GMCL retainer.

    Six days after Cassels accepted the GMCL retainer, GMCL officially announced that it would be discontinuing its Pontiac brand of cars. This represented 26 percent of GMCL's sales in Canada. GMCL also released a revised restructuring plan that would reduce its dealer network from 705 to between 395 to 425 dealers by the end of 2010.

    GMCL also prepared a plan for winding down some of its dealerships, including a process for identifying dealers who would receive a Wind-Down Agreement ("WDA"). The WDA proposal was intended to terminate the dealers' business relationships and agreements with GMCL and eliminate GMCL's estimated exposure to dealer claims resulting from the restructuring, while providing the dealers with what GMCL considered to be fair treatment in the circumstances.

    CADA subsequently helped organize a formation of GMCL dealers into a national group, whose interests would be well-represented if GMCL were to file for bankruptcy protection. Approximately 400 GMCL dealers agreed to participate in this group. It is important to note that Cassels represented CADA and, in turn, this...

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