Ontario Court Of Appeal Summaries (January 29 – February 2)

Good afternoon,

Following are summaries of all civil decisions released this week by the Court of Appeal for Ontario.

In Rutman v. Rabinowitz, 2018 ONCA 80, the Court canvassed the law of internet defamation and damages.

In Phoenix Interactive Design Inc. v. Alterinvest II Fund L.P., 2018 ONCA 98, the Court confirmed that the four-part test test set out in Titus v. William F. Cooke Enterprises Inc., 2007 ONCA 573, rather than the two-part test set out in Morrison v. Coast Finance Ltd. (1965), 55 D.L.R. (2d) 710 (B.C. C.A.) is the applicable test in Ontario.

In The Dominion of Canada General Insurance Company v. State Farm Mutual Automobile Insurance Company, 2018 ONCA 101, the Court held that the standard of review applicable of SAB arbitral decisions is reasonableness.

Additional topics covered this week included relief from forfeiture in the commercial leasing context, the scope of the OMB's authority to vary Official Plans passed by municipalities, and breach of contract in the RFP context.

I would like to invite all of our readers to attend the Top Appeals of 2017 CLE that my partner, Lea Nebel and I will be co-chairing with Justice Epstein of the Court of Appeal. The CLE has been scheduled as a casual evening/dinner program at the OBA offices on Toronto Street to take place on Monday, February 26, 2018. In-person registration will be at 5:30, dinner will be served at 6, and the formal program will run from 6:30 to 8pm. For those who cannot attend in person, you can participate via live webcast. Please see the program agenda for further details and to register.

There are three decisions being featured. The first is Moore v Sweet, 2017 ONCA 182, which relates to the remedy of constructive trust. That case will be heard by the Supreme Court on February 8. Counsel on that matter, David M. Smith and Jeremy Opolsky, have agreed to participate in our panel discussion. The second case is Presidential MSH Corporation v. Marr Foster & Co. LLP, 2017 ONCA. That case canvassed, summarized and clarified the law regarding when the "appropriate means" analysis under s. 5(1)(a)(iv) of the Limitation Act, 2002, can be applied to delay the start of the running of the basic two-year limitation period. Counsel for the parties on that matter, Allan Sternberg, Daniella Murynka and Michael Girard, will be our panelists. The law in this area is continuing to evolve. The third decision featured is Hodge v Neinstein, 2017 ONCA 494. That case has certainly received the attention of the plaintiffs' personal injury bar and the media and has, no doubt, been a catalyst behind the Law Society's efforts to develop a standard form contingency fee agreement and disclosure obligations aimed at providing better information to clients. Counsel for the class plaintiffs, Peter Waldmann, will be joined on our panel by Bevin Shores and Audrey P. Ramsay, who are involved with the OBA and the Law Society working groups looking at this issue.

Wishing everyone a nice weekend.

John Polyzogopoulos

Blaney McMurtry LLP

jpolyzogopoulos@blaney.com

Tel: 416 593 2953

Civil Decisions

Houle v. St. Jude Medical Inc., 2018 ONCA 88

[Simmons, Roberts and Nordheimer JJ.A.]

Counsel:

Brandon Kain and Vladimira Ivanov, for the moving parties/respondents

Margaret Waddell, for the responding parties/appellants and proposed class counsel

Benjamin Zarnett and David Lederman, for Bentham IMF Capital Limited

Keywords: Civil Procedure, Appeals, Jurisdiction, Final or Interlocutory Orders, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 6(1)(b), s. 19(1)(b), Class Actions, Funding Agreements

Facts:

The appellants, Shirley and Roland Houle, appealed from the order of Justice Paul Perrell of the Superior Court of Justice dated August 29, 2017. The moving parties, St. Jude Medical Inc. and St. Jude Medical Canada, Inc., brought this motion to quash the appeal on the basis that the order in issue was an interlocutory, not final, order and thus was only appealable to the Divisional Court with leave.

The plaintiffs were proposed representative plaintiffs in a proposed class action. The proposed representative plaintiffs and proposed class counsel sought third party litigation funding from Bentham IMF Capital Limited ("Bentham"). The proposed representative plaintiffs, proposed class counsel and Bentham entered into a funding agreement dated August 6, 2017 (the "Funding Agreement") under which Bentham agreed to pay a portion of the legal fees and disbursements for the proposed class action on certain terms.

The proposed representative plaintiffs brought a motion seeking approval of the Funding Agreement and for an order that would make the Funding Agreement binding on all putative class members. The motion judge conditionally approved the Funding Agreement, subject to certain changes being made to certain of its terms, failing which the approval motion would be dismissed. The proposed representative plaintiffs, proposed class counsel and Bentham all objected to the required changes. As a result, rather than make the changes to the Funding Agreement, they appealed the conditional approval order. In apparent recognition that there might be an issue over jurisdiction, appeals were taken both to the Court of Appeal and by way of a motion for leave to appeal to the Divisional Court.

The moving parties contended that the order in issue was an interlocutory order, therefore any appeal lies to the Divisional Court with leave (Courts of Justice Act, R.S.O. 1990, c. C.43, s. 19(1)(b)), and should be quashed. The responding parties contended that the order was final and thus the appeal lies to the Court of Appeal (Courts of Justice Act, s. 6(1)(b)).

Issues:

(1) Should the appeal be quashed on the basis that the order in issue is an interlocutory order, and not final order, and thus is only appealable to the Divisional Court with leave?

Holding: Motion granted.

Reasoning:

(1) Yes. The court explained that there is no definition in the Courts of Justice Act as to what constitutes a final order and decisions on this issue have not always followed a consistent approach for determining whether an order is final or interlocutory.

In support of their position, the moving parties pointed to various decisions that have dealt with this issue and which have held that the following are all interlocutory orders in the context of class proceedings: orders for security for costs, carriage orders, and orders denying approval of a settlement.

However, the court explained that the issue in this case is complicated by the fact that two of the parties appealing the conditional approval order are not, strictly speaking, parties to the proceeding. Where "non-parties" are involved, the question of whether an order is final or interlocutory is made more difficult.

Nonetheless, the court held that the order in issue here did not finally dispose of the rights of proposed class counsel and Bentham. The motion judge did not dismiss the approval motion. Rather, his order conditionally approved the Funding Agreement, subject to certain revisions being made to it. Subject to making the required revisions, the proposed representative plaintiffs, proposed class counsel and Bentham got what they had asked the motion judge for - approval of the Funding Agreement.

However, the responding parties decided not to revise the Funding Agreement, and, as a result, their motion for approval was dismissed. In that respect, the order here is akin to other forms of conditional orders, such as an order for security for costs. Where security for costs is ordered, if the security is not posted, the proceeding may come to an end. Nevertheless, the order requiring that security be posted is still an interlocutory order.

Thus, the court held that the order in issue was an interlocutory order, only appealable to the Divisional Court with leave. The appeal was therefore quashed.

North Elgin Centre Inc. v. McDonald's Restaurants of Canada Limited, 2018 ONCA 71

[Pepall, Hourigan and Brown JJ.A.]

Counsel:

Ronald G Slaght, Andrew Parley and Margaret Robbins, for the appellant

Martin P Zarnett, for the respondent

Keywords: Real Property, Commercial Leases, Options to Renew, Waiver, Petridis v. Shabinsky, 35 O.R. (2d) 215 (H.C.)

Facts:

On March 11, 1997, the appellant, McDonald's Restaurants of Canada Ltd. ("McDonald's"), as tenant, and North Elgin Centre Inc. ("North Elgin"), as landlord, entered into a twenty-year commercial lease (the "Lease"), which was a ground lease in respect of lands in Richmond Hill, Ontario upon which McDonald's built and renovated a restaurant. The parties agreed that the original term of the Lease would end on March 10, 2017.

The Lease included an option to renew for two consecutive additional terms of ten years each. There was no dispute that McDonald's gave proper notice of its intention to renew the Lease prior to the expiry of the original term. However, the application judge held that the renewal provision required McDonald's to do more than simply provide notice of its intention to renew. She found that because the parties had not agreed on a rental rate at least nine months before the end of the original term, McDonald's was obliged under the Lease to either refer the issue to arbitration or revoke its intention to renew.

McDonald's failed to take either action. The application judge found, therefore, that the Lease was uncertain as to a material term — the rental rate. Accordingly, the parties were left without an enforceable agreement. She went on to find that because the parties were engaged in negotiations, North Elgin waived its right to insist on strict compliance with the terms of the renewal provision. However, she also found that North Elgin later revoked its waiver and reverted to its strict legal rights. As a result, the application judge held the doctrine of waiver did not apply and the Lease was at an end. McDonald's appealed.

Issues:

(1) Did the application judge err in finding that North...