Ontario Court Of Appeal Summaries (October 2 – October 6, 2017)

Good evening.

Below are the summaries of this week's civil decisions of the Court of Appeal for Ontario.

In an insurance coverage decision in Reeb v. The Guarantee Company of North America, the Court held that there was a conflict of interest on the part of counsel for the insured who had been appointed by the insurer because the insurer would have benefited financially if the decision below was affirmed and the appeal was dismissed. Independent counsel was therefore required who did not take instructions from the insurer. On that ground alone, the appeal was allowed. The court appointed amicus curiae to assist with submissions on having new counsel appointed for the insured and on the issue of the costs of the appeal.

In a lengthy and important decision in Sacks v. Ross, the Court reviewed the test for causation involving multiple tortfeasors in delayed diagnosis medmal cases. In addition, the court detailed the process regarding the formulation of jury instructions and questions.

The Court also released four family law decisions. In Smith v. Smith and Moses Estate v. Metzer, the issue was the enforceability of cohabitation agreements.

In Fiorito v. Wiggins, the Court affirmed the lifting of the automatic stay of proceedings arising out of the wife's bankruptcy under section 69.4 of the Bankruptcy and Insolvency Act in order to allow a father to enforce a significant cost award against her RRSPs, even though RRSPs are exempt property and do not form part of a bankrupt's estate available to unsecured creditors. While there were compelling facts in support of the father in this case based on the conduct of the mother, this might be an example of "bad facts making bad law". The decision opens the door to unsecured creditors getting around the BIA exemption of RRSPs as property available to creditors of a bankrupt estate. In support of its decision, the court noted that while RRSPs are exempt property in bankruptcy, they are not exempt from seizure under the Execution Act. Following this line of reasoning, it may be open to any unsecured judgment creditor with sympathetic facts to attempt to move to lift the stay in order to pursue RRSPs.

In Slate Management Corporation v. Canada (Attorney General), the court dismissed an appeal from a rectification order that unwound a tax driven amalgamation as moot because CRA had not sought leave to stay the rectification order pending appeal.

Other topics covered included contracts and adverse possession.

Happy Thanksgiving.

Civil Decisions

Patel v. Borges, 2017 ONCA 761

[Hourigan, Brown and Roberts JJ.A]

Counsel:

L Menon and D Paul, for the appellant

R Piehler, for the respondent

Keywords: Real Property, Mortgages, Enforceability, Spousal Consent, Consideration

Facts:

The appellant brought an action to enforce a mortgage registered against a residential property solely owned by the respondent. The respondent's spouse, who had been borrowing large sums of money from the appellant, signed a promissory note agreeing to register a mortgage against the property in the appellant's favour as security for the loans. However, the respondent testified that she understood that the mortgage was to replace an existing second mortgage and not as a third mortgage to secure her husband's debts. She submitted that the mortgage was unenforceable as she received no consideration. The trial judge dismissed the appellant's action, finding that the respondent received no consideration for the mortgage and that the purpose of the mortgage was to pay off the existing second mortgage and not to secure the loans made to the respondent's spouse. The appellant submits that the trial judge erred in finding that the respondent received no consideration for the mortgage and that the purpose of the mortgage was to pay off the existing second mortgage.

Issues:

(1) Did the trial judge err in finding that the respondent received no consideration for the mortgage?

(2) Did the trial judge err in finding that the purpose of the mortgage was to pay off the existing second mortgage?

Holding: Appeal dismissed.

Reasoning:

(1) No. The trial judge conducted a thorough review of the evidence and his findings were open to him on the record. The mortgage commitment stated that the security sought was a second mortgage and the respondent signed an acknowledgment and a solemn declaration to that effect.

(2) No. The new mortgage was only in the amount of $165,000 and the existing second mortgage had a balance of $203,000. The trial judge specifically considered this issue. He accepted the respondent's evidence that she believed that the amount advanced would be sufficient to discharge the existing second mortgage once certain unreasonable charges in the discharge statement were resolved and removed.

Smith v Smith, 2017 ONCA 759

[MacFarland, Watt and Benotto JJ.A.]

Counsel:

P D Marshall, for the appellant

S Klotz and J Klotz, for the respondents

Keywords: Family Law, Cohabitation Agreements, Setting Aside, Divorce Act R.S.C., 1985, c. 3 (2nd Supp.), Miglin v. Miglin, 2003 SCC 24

Facts:

The parties are husband and wife. Before their marriage, they signed a cohabitation agreement whereby the wife released her claims to spousal support. Upon separation, the wife sought to claim spousal support. The trial judge upheld the cohabitation agreement and dismissed her claim. The wife alleges that the trial judge erred in upholding the cohabitation agreement because the release of support does not meet the provisions of the Divorce Act R.S.C., 1985, c. 3 (2nd Supp.).

Issue:

Did the trial judge err in upholding the cohabitation agreement?

Holding:

Appeal dismissed.

Reasons:

No. In Miglin v. Miglin, 2003 SCC 24, the Supreme Court set out a two-stage analysis to be applied in dealing with initial applications for spousal support in the face of a release. The first stage is subdivided into two parts and considers: (1) the circumstances surrounding the negotiation and execution of the agreement to determine whether there is any reason to discount it; and (2) a consideration of the substance of the agreement to determine whether it is in substantial compliance with the general objectives of the Divorce Act. The second stage requires the court to consider whether, at the time of the application, the applicant has established that the agreement no longer reflects the original intention of the parties and whether the agreement is still in substantial compliance with the objectives of the Divorce Act.

The objectives of the Divorce Act include "certainty, finality and autonomy." Subsection 15.2(6) of the Divorce Act provides that a spousal support order should: (a) recognize any economic advantages or disadvantages to the spouses arising from the marriage or its breakdown; (b) apportion between the spouses financial consequences arising from childcare over and above any obligation for the support of the child; (c) relieve any economic hardship of the spouse arising from the breakdown of the marriage; and (d) in so far as practicable, promote economic self-sufficiency of each spouse.

The wife argues that there was a power imbalance between her and the husband, she had not discussed spousal support with the husband, the financial disclosure was incomplete, the trial judge misconstrued the evidence when he said that her income at the date of the agreement was $70,000, and she did not have independent legal advice.

The Court found that the trial judge properly considered the Miglin test, there was no error of law or misapprehension of fact on the part of the trial judge, and therefore the appeal was dismissed.

Sickinger v. Sickinger, 2017 ONCA 7640

[Brown J.A.]

Counsel:

B Ludmer, for the moving party G Smith, for the responding party

Keywords: Family Law, Civil Procedure, Appeals, Administrative Dismissal, Setting Aside

Facts:

The moving party husband and the responding party wife married in 1991 and entered into a separation agreement in 2007. Divorce was granted in 2008. They have three children, now ranging in age from 17 to 23 years old.

In 2009 the husband brought a motion to change which ultimately resulted in the March 20, 2012 final order of Perkins J that all three children reside with the wife.

In April 2014 the husband commenced the present motion to change. Extensive case conferencing ensued.

After multiple adjournments, the motion to change initiated by the moving party in April 2014 finally was heard almost three years later in February 2017 by McWatt J. The husband was in serious default in payment of support and in making financial disclosure. The motion to change was dismissed.

The husband appealed but failed to perfect the appeal on time, even after being notified by the Court of Appeal that it would be summarily dismissed if he did not perfect on time. As a result, the appeal was administratively dismissed. The husband moved to set aside the administrative dismissal.

Issues:

(1) Should the motion to set aside an order dismissing the appeal be granted?

Holding:

Motion denied.

Reasoning:

(1) No. The overriding consideration on a motion to set aside an order dismissing an appeal is the justice of the case, which entails a consideration of the merits of the appeal: Akagi v. Synergy Group (2000) Inc., 2014 ONCA 731, at para. 8. In addition, factors analogous to those typically considered on a motion to extend the time to appeal inform a request to set aside the administrative dismissal of an appeal: (i) the explanation for not perfecting the appeal within the time stipulated by the rules; (ii) the length of and explanation for the delay in moving to set aside the administrative dismissal; and (iii) prejudice to the respondent.

More justification must be shown by a party moving to aside an administrative dismissal of an appeal than would have been required had the party earlier availed itself of its rights to move for an extension of time to perfect the appeal: Langer v. Yorkton Securities Inc. (1986), 57 O.R. (2d) 555...