Ontario Court Of Appeal Summaries (April 2- April 6)

Good evening,

PQ Licensing S.A. v. LPQ Central Canada Inc., a franchise rescission case, was the most interesting decision of the week for several of reasons, none of which have to do with rescission.

First, the decision is the latest in a series of recent examples where the "appropriate means" branch of the discoverability test in section 5(1)(a)(iv) of the Limitations Act, 2002, was employed to delay the discoverability of a claim. In this case, the fact that the franchise agreement required mediation before the arbitration could proceed, resulted in a determination that the commencement of arbitration was not the "appropriate means" to seek a remedy until the completion of the mediation. This resulted in the suspension of the commencement of the limitation period for four years, while the mediation was outstanding.

Second, the Court determined that the standard of review from an arbitrator's decision on the applicability of the Limitations Act, 2002, was reasonableness, not correctness, even though it involved the application of a statute of general application (the Limitations Act, 2002).

Finally, the decision confirms an arbitrator's ability to use the "blue pencil" method of severing unenforceable portions of clauses, while keeping the remainder of the clause intact. In this case, the franchise agreement provided for mediation in Delaware. Rather than finding the whole mediation clause unenforceable, the arbitrator simply severed the requirement to mediate in Delaware and enforced the remainder of the clause.

Other topics covered this week included liability for wrongful patent enforcement, the duty to defend in the MVA context, family law (custody and access and breach of court orders), securities class actions, and mortgage enforcement.

Wishing everyone a nice weekend and a Happy Eastern Orthodox Easter to everyone celebrating.

Del Vecchio v. Del Vecchio, 2018 ONCA 334

[MacFarland, Huscroft and Nordheimer JJ.A.]

Counsel:

M S Balz, for the appellant

K Ballantyne, for the respondent

Keywords: Family Law, Divorce, Support Orders, Orders of the Court, Refusal to Obey, Arrears of Support, Introducing Affidavit Evidence after Expiry of Timelines

Facts:

This contentious and lengthy family law litigation is the result of the appellant's (Mark Del Vecchio) refusal to obey orders of the court.

The appellant appeals the order of Paisley J. dated October 13, 2017, striking his pleadings and permitting the respondent to proceed to an uncontested trial. At issue was whether the judge failed to consider the affidavit of Karen Pritchard (the appellant's assistant), filed by the appellant in response to the motion made in writing.

Issues:

(1) Was Paisley J.'s order made in error for failing to consider the evidence contained in the affidavit of Karen Pritchard?

Holding: Appeal dismissed.

Reasoning:

(1) No. The continuing record, which was before Paisley J. for this motion in writing, records the fact that the affidavit was filed with the court and was therefore very likely before the judge when he made his order. While the preamble in the order does not refer to the affidavit, the draft order was prepared by the moving party's lawyer before she was aware that any responding materials would be filed. By the terms of the July 27, 2017 Horkins J. order, the appellant had no right to notice of this procedural motion, and was served merely as a courtesy. The moving party would have no reason to expect the appellant would be filing materials - particularly in view of his history of non-compliance.

The content of the Pritchard affidavit was highly contentious - much of the content on its face could not be considered support related. There was no opportunity given to cross-examine on its contents and perhaps most importantly, it was nothing more than an attempted collateral attack on previous support orders. It was also noted that the appellant unilaterally reduced his monthly support payments to $1400 per month, in breach of a previous order. In these circumstances, Paisley J. did not err by proceeding as he did. The appellant was given numerous chances to comply with and meet his obligations. He simply refused to do so. Not until the very last minute did he take any steps to attempt to show he was not in arrears in respect of the support orders. He still had not complied with the obligations requiring financial production, and unilaterally reduced his support payments. He remained in serious violation of a number of court orders.

Andreevskaia v. Satanovski, 2018 ONCA 330

[Doherty, van Rensburg and Nordheimer JJ.A.]

Counsel:

Robert C. Dunford & Sarah Wouters, for the appellants

R. Adam J. Pyne-Hilton, for the respondent

Keywords: Contracts, Real Property, Mortgages, Defences, Non Est Factum, Duress, Unconscionability, Gifts, Summary Judgment

Facts:

The defendants appeal from summary judgment granted by the motion judge to the plaintiff of the sum of $247,247.93 together with interest and costs under a mortgage. The judgment also required the appellants to deliver possession of the property against which the mortgage was secured. The evidence established that the respondent advanced monies to the appellants to assist them in running a charitable organization. Four different advances were made. The first two were repaid but the latter two were not. Eventually, the appellants gave a mortgage to the respondent to secure the amount that was outstanding. They also signed a promissory note for the outstanding amount.

The motion judge concluded that there was no genuine issue requiring a trial. Specifically, she rejected the appellants' contention that the monies advanced were a gift and not a loan and that they were interest-free. The motion judge also rejected arguments advanced by the appellants that they did not understand the mortgage that they signed (even though they received independent legal advice before signing it), that they signed under duress, and that the mortgage was an unconscionable transaction.

Issues:

(1) Did the motion judge err in granting summary judgment?

Holding:

Appeal dismissed.

Reasoning:

(1) No. The appellants have failed to establish that the motion judge made any palpable and overriding error in the conclusions that she reached. Generally, the various defences advanced by the appellants were untenable and...

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