Ontario Court Of Appeal Summaries (November 20 – November, 24 2017)

Good evening,

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

Congratulations to our very own Bill Anderson for succeeding on our client's appeal in Holmes v. Hatch Ltd., 2017 ONCA 880. In this Employment law decision, the Court of Appeal allowed the appeal from the motion judge's decision granting summary judgment against our client on the basis that the motion judge was not at liberty to find liability on a legal theory that was not pleaded by the plaintiff and which our client did not have an opportunity to properly address in the evidence.

Other topics covered included contractual liability, both in the construction context and in the auctioning of real property context, municipal liability for failure to repair a road in the MVA context, child support, child custody, access, Freedom of Religion under section 2(b) of the Charter, choice of law in the sale of goods context, striking third party claims in the class action context, determining a contract claim by way of application rather than by way of action, and setting aside fraudulent conveyances of real property.

Enjoy the weekend,

Civil Decisions:

Bassett & Walker International Inc. v. Soleau International BVBA, 2017 ONCA 886

[Cronk, Pardu and Huscroft JJ.A.]

Counsel:

G R Hall and A Lewis, for the appellant

T J Law and A Mazzotta, for the respondent

Keywords: Sale of Goods, Conflict of Laws, International Sale of Goods Act, Summary Judgment, Appeal Allowed

Facts:

The respondent, a trader of seafood products, purchased shrimp from an Ecuadorian supplier for shipment to the appellant, a Toronto-based company, via an Ecuadorian shipping line for delivery to a port in Mexico. Some of the documents pertaining to the sale stipulated that Belgian law applied to disputes arising out of the contract. Other documents contained no governing law provisions. The appellant appealed from a summary judgment holding it liable to the respondent for the full unpaid purchase price for the shrimp. The motion judge determined the appellant's liability as if it was governed by the law of Ontario.

Issues:

(1) Should summary judgment be set aside on the basis that the motion judge applied the wrong governing law?

Holding: Appeal allowed.

Reasoning:

(1) Yes. The parties appeared to have assumed that the contract was governed by domestic Ontario law. No issue as to the law governing the contract was raised before the motion judge. The question of the proper law of the contract is a threshold issue. The matter not having been raised before or considered by the motion judge, it is uncertain that her analysis of the issues in contention and her conclusions on those issues might not have been different had the proper law of the contract and its application here been fully argued before her. Summary judgment was set aside, and the matter was remitted to the motion judge for a new hearing on the parties' competing summary judgment motions.

Collins Barrow Toronto LLP v. Augusta Industries Inc., 2017 ONCA 883

[Cronk, Huscroft and Nordheimer JJ.A.]

Counsel:

L Klug, for the appellant

E S Birnboim and B Xue Griffin, for the respondent

Keywords: Contracts, Debtor-Creditor, Limitation Periods, Applications, Determination of Rights Dependent on Interpretation of Contract, Rules of Civil Procedure, r. 14.05(3)(d)

Facts:

Augusta Industries Inc. appeals from the judgment awarded in favour of Collins Barrow Toronto LLP on invoices delivered for services rendered as the auditors for Augusta Industries Inc.

Issues:

(1) Did the application judge err in failing to convert the application into an action, since the appellant alleged that the respondent had been negligent in the provision of its services?

(2) Are any of the outstanding invoices barred through expiration of the applicable two-year limitation period?

Holding: Appeal dismissed.

Reasoning:

(1) No. The application judge concluded that it was open to her to determine the respondent's claim under r. 14.05(3)(d) of the Rules of Civil Procedure on the basis that the claim arose from the determination of rights that depend on the interpretation of a contract. While the formal Notice of Application refers to r. 14.05(3)(h), the court held that this did not preclude the application judge from relying on the sub-rule that she did to determine the matter.

Furthermore, the application judge was correct in concluding that there was no reason to postpone the determination of whether the appellant was liable to the respondent on the unpaid invoices. In support, the application judge noted that the appellant had not adduced any expert evidence supporting its allegation of negligence, much of the appellant's evidence was hearsay (or double hearsay), and there was no reliable evidence that the appellant had suffered any damages.

(2) No. The application was commenced on April 14, 2016. The application judge concluded that the first two invoices in dispute were the subject of an express agreement in the January 2014 engagement letter that they would be "settled" by April 15, 2014. As a consequence, claims on those two invoices were not barred by the two-year limitation period. The Court held that this interpretation was both available and reasonable on the language of the engagement letter and that the application judge's interpretation of the engagement letter was owed deference.

The Court also agreed with the application judge that in the interests of expediency, there was no reason to delay the determination of liability on the unpaid invoices pending any determination of a negligence claim.

Mabe Canada Inc. v. United Floor Ltd., 2017 ONCA 879

[Cronk, Huscroft and Nordheimer JJ.A.]

Counsel:

P Pengelley and R Sottile, for the appellant P J Monaghan and C Lui, for the respondent

Keywords: Torts, Negligence, Standard of Care, Industry Standards, ter Neuzen v. Korn, [1995] 3 S.C.R. 674, Foreseeability, Contractual Duties

Facts:

The Appellant, Mabe Canada Inc., sustained damages of approximately $1 million when a drainage pipe, running underneath a floor installed by the respondent, United Floor Ltd., caused a flood in its warehouse. The appellant's claim in negligence was dismissed by the trial judge.

Issues:

(1) Did the trial judge err in not taking into account the respondent's contractual duties in determining the standard of care?

(2) Did the trial judge err in his foreseeability analysis?

(3) Did the trial judge err in failing to determine whether relevant industry practice was itself negligent and should not have been followed?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The trial judge accepted expert evidence that the respondent had no reason to foresee that the pipe would be at a shallow depth. As a result, the respondent's duty under the contract to notify the builder of the warehouse if subsurface conditions differ significantly from those indicated in the Contract Documents, was not triggered.

(2) No. The trial judge accepted expert evidence that there was no reason for the respondent to not put a stake in the ground at the location it did. This finding was open to the trial judge on the record before him.

(3) No. Although conformity with standard practice in an industry does not necessarily insulate a defendant from a finding of negligence, as the Supreme Court explained in ter Neuzen v. Korn, a practice will be determined negligent only if it does not conform with basic care easily understood by the ordinary person who has no expertise in the practices of the profession. In other words, only where it is "fraught with danger".

Fenwick v. Concierge Auctions, ULC, 2017 ONCA 889

[Doherty, LaForme and Paciocco JJ.A.]

Counsel:

R G Slaght and P Healy, for the appellant

J E Schatz and S Azzopardi, for the respondent

Keywords: Contract Law, Contractual Interpretation, Standard of Review, Standard Form Contracts, Correctness, Mixed Fact and Law, Reasonableness, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Real Estate, Auctions, Fees, Real Estate Commissions, Glendinning v. Cavanagh (1908), 40 S.C.R. 414, McBrayne v. Imperial Loan Co. (1913), 28 O.L.R. 653 (C.A.), William Allan Real Estate Co. v. Robichaud (1990), 72 O.R. (2d) 595 (H.C.)

Facts:

In 2016 the Weilands decided to try selling their cottage by auction and contracted with Concierge Auctions, ULC, a luxury real estate auction company, under an Auction Marketing Agreement (the "Seller's Contract"). The Seller's Contract contemplated that the ultimate buyer would likely be responsible for paying the auction fee (the "Buyer's Premium"), but there were exceptions. Most notably, the Weilands would have to pay the Buyer's Premium if they refused to close after the auction produced an agreement of purchase and sale.

The Fenwicks saw an ad posted by Concierge and decided to bid (the "Bid"). In order to do so the Fenwicks had to sign a Bidder Registration Agreement (the "Bidder's Contract"). In the Bidder's Contract they agreed to pay a Buyer's Premium to Concierge if they proved to be the high bidder, unless the sale was not "consummated" because of a default by the Weilands. The Fenwicks paid a total deposit of $430,000 into escrow to secure the Buyer's Premium, should they have to pay it. The Bid was the highest bid and Fenwick executed an agreement of purchase and sale (the "First Purchase and Sale Contract") that the Weilands had pre-signed. When the Weilands learned what the Bid was - $4,300,000 minus a rebate of $350,000 - they were not happy. They claimed that the sale price was too low to enable them to pay off the encumbrances on the cottage, and to grant clear title. When the closing date came, the Weilands refused to close.

After the Weilands defaulted, the Fenwicks registered a caution and paid land transfer tax on the contracted amount.

The Fenwicks immediately demanded the return of their $430,000 deposit from the escrow agent. They also threatened the...