Ontario Court Of Appeal Summaries (May 7- May 11)

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

The most significant decision of the week was easily Mega International Commercial Bank (Canada). In that case, the Court confirmed that the limitation period to bring claims for contribution and indemnity are not hard-capped at two years from the date a defendant was served with the plaintiff's claim. Rather, section 18 of the Limitations Act, 2002 only creates a rebuttable presumption. The discoverability test set out in section 5 still applies, and if met, can extend the limitation period for bringing claims for contribution and indemnity.

Other topics covered this week included another decision in the residential schools class action, damages for breach of a fixed term personal services contract, breach of a non-solicitation covenant, an unpleasant dispute between neighbours, medical negligence, coverage for a mortgagor under a property insurance policy taken out by a mortgagee, a claim for damage to cargo under a marine insurance policy, leave to appeal and extension of time to appeal.

Civil Decisions

Fontaine v. Canada (Attorney General), 2018 ONCA 421

[Hoy A.C.J.O., Juriansz and Miller JJ.A.]

Counsel:

Margaret L. Waddell and Fay K. Brunning, for the appellants Claimant H15019, Claimant K-10106 and M.

Catherine A. Coughlan and Brent Thompson, for the respondent Attorney General of Canada

Peter C. Wardle, for the intervenor

Diane Soroka, David Schulze and Maryse Décarie-Daigneault, for the Independent Counsel

Keywords: Civil Procedure, Class Actions, Jurisdiction, Mootness, Standing, Deemed Undertaking, Evidence, Privilege, Rules of Civil Procedure, Rules 30.1.01 and 31.11(8)

Facts: These appeals arise out of the implementation of the Indian Residential Schools Settlement Agreement (2006) (the "IRSSA"). The IRSSA is a settlement agreement that resolved class actions and pending individual actions across Canada against the Attorney General of Canada and other parties implicated in the tragic history of abuse perpetrated on indigenous children at residential schools. Among other things, the IRSSA provides for financial compensation to these victims. All eligible class members who had resided in a residential school are entitled to payment of a minimum amount, called a "Common Experience Payment". The IRSSA also provides that class members who allege they suffered serious physical, sexual or psychological harm at a residential school may apply for additional compensation through the Independent Assessment Process ("IAP").

This appeal involves St. Anne's Indian Residential School in Fort Albany, Ontario. The appellants sought a declaration that Canada had breached its disclosure obligations under the IRSSA by refusing to produce transcripts of examinations for discovery from a related action (the Cochrane action). The administrative judge dismissed H-15019's Request for Directions ("RFD"). He concluded that Canada had not breached its disclosure obligations under the IRSSA by refusing to produce the Cochrane Transcripts.

K-10106 and M sought extensive, far-reaching relief in their RFD. The administrative judge considered two preliminary issues: did they satisfy the test to obtain legal standing to bring their RFD and, if so, did the court have jurisdiction to provide the broad relief requested? The administrative judge concluded that K-10106 and M did not satisfy the test to obtain standing, the court did not have jurisdiction to grant most of the relief they sought, and, of the remaining items, there was no good reason for the court to exercise its jurisdiction. The appellants appeal the orders dismissing their RFDs.

Issues:

(1) Is H-15019's appeal moot, and, if so, should the court exercise its discretion to hear his appeal?

(2) Does the deemed undertaking rule apply to the Cochrane transcripts?

(3) Was the administrative judge's interpretation of the Order and the IRSSA unreasonable?

(4) Did the administrative judge err by failing to lift the deemed undertaking?

(5) Are the Cochrane Transcripts protected by settlement privilege?

(6) Did the administrative judge err in finding K-10106 and M did not have standing?

Held: Appeal dismissed.

Reasoning:

(1) Yes, the appeal is moot, but should still be heard by the court. Further disclosure could not impact him, because he has already been awarded the highest amount available, but the circumstances warrant the court hearing H15019's appeal. Unquestionably, an adversarial relationship continues to prevail between the appellants and Canada. All appear, represented by counsel. Further, judicial economy favours determining these issues.

(2) No. The discovery evidence at issue was obtained in 62 distinct civil actions instituted in Cochrane by 154 survivors of St. Anne's. H-15019 was not a plaintiff in any of the Cochrane Actions. He argues that the evidence of a survivor obtained in a civil proceeding commenced by that survivor can be used for the purpose of an IAP of a different survivor because they are the same proceeding. They are clearly not the same proceeding, and they involve different claimants. Rule 31.11(8) is inapplicable. Most of the Cochrane Actions settled before the advent of the IRSSA. No other actions could be or were subsequently brought in relation to the subject-matter of those settled actions.

(3) No. The interpretation of the IRSSA is a question of mixed fact and law reviewable for palpable and overriding error. There is no basis to interfere with the administrative judge's conclusions that Canada did not breach its disclosure obligations in refusing to produce the Cochrane Transcripts. The deemed undertaking rule was not displaced by the IRSSA or the Applications Judge's Order.

(4) No. While the administrative judge did not specifically address this argument in the reasons that are the subject of this appeal, he rejected it in an earlier decision regarding the disposition of documents created within the IAP. The administrative judge was entitled to consider the fact that considerable information was already available to Claimant H-15019 in determining whether the interests of justice outweighed the prejudice to the examinees of setting aside the deemed undertaking and providing further disclosure to him. His assessment of the interests of justice was not infected by a palpable and overriding error.

(5) No. The administrative judge agreed with Canada that the Cochrane Transcripts were covered by settlement privilege and disagreed with Claimant H-15019 that Canada had not met the evidentiary burden of showing that the discoveries were communications made with a view to settlement. Given the findings above, it was not necessary to determine whether there was an adequate basis for the administrative judge's finding.

(6) Yes. Given the broad scope of their RFD, the administrative judge's standing analysis was tainted by his focus on their complaints regarding the lawyers. The Court would have granted K-10106 and possibly M standing. However, this point is irrelevant, as there is no basis to interfere with the administrative judge's conclusion that the court does not have, or should not exercise, its jurisdiction to order the broad entitlement to re-hearings that K-10106 and M seek, or to order a re-hearing of K-10106's claim. There is also no basis to interfere with the administrative judge's conclusion that the court should not exercise its case-by-case jurisdiction in the case of K-10106.

Mohamed v. Information Systems Architects Inc., 2018 ONCA 428

[Feldman, Watt, Paciocco JJ.A.]

Counsel:

J A LeNoury and R MacKinnon, for the appellant

L Sabsay, for the respondent

Keywords: Contracts, Personal Services, Interpretation, Standard of Review, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Termination, Duty of Good Faith Performance, Damages, Mitigation, Howard v. Benson Group Inc. (The Benson Group Inc.), 2016 ONCA 256

Facts:

The appellant engaged the respondent to provide technological consulting services under an Independent Consulting Agreement ("ICA") for a six-month project that had an anticipated start date of November 2, 2015, and an anticipated end date of May 31, 2016. In the ICA, the parties agreed that the respondent would be an independent contractor. The project was with Canadian Tire, whose agreement with the appellant included a term that the appellant would not send any consultant who had a criminal record, except with Canadian Tire's consent. After agreeing to work full-time under the ICA, the respondent resigned from his permanent, full-time employment.

Around November 2, 2015, the respondent told the appellant - before he signed the ICA and before he was assigned to the Canadian Tire project - that he had a dated criminal record from high school. He also agreed to a background security check. On November 4, he again disclosed his criminal record to the appellant in a declaration of criminal record form. On November 5, he began work at Canadian Tire, but when the security check report came back one month later disclosing the criminal record, Canadian Tire received a copy and, as a result, asked the appellant to replace the respondent. Although the respondent asked the appellant to consider him for other roles, the appellant terminated the respondent's engagement on December 10, 2015, relying on para. 11.III of the ICA.

The respondent sued the appellant for breach of the ICA, claiming six months' remuneration, that is, the full amount that would have been paid had the contract been completed, on the basis that the ICA was a fixed term contract where the respondent had no duty to mitigate his damages. Both parties moved for summary judgment, where the respondent asked the court to award damages for breach of contract, and the appellant asked the court to dismiss the action. Neither side took the position that a trial of any issue was required. The motion judge awarded judgment to the respondent in the full amount.

Issues...