Ontario Court Of Appeal Summaries (July 23 – July 27, 2018)

Good afternoon.

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

In Gillham v. Lake of Bays (Township), a negligent construction case, the Court appears to have expanded the meaning of the "Appropriate Means" aspect of the discoverability test under section 5 of the Limitations Act, 2002. Up until now, the Court had interpreted "appropriate means" as "legally appropriate means" - if there is an alternative legal proceeding that can effectively determine the matter, the limitation period is suspended until the alternative legal proceeding runs its course. In this case, however, the Court appears to have interpreted "appropriate means" as permitting a plaintiff to take a "wait and see" approach before suing. It was not initially clear that there was anything more than trivial damage, and the plaintiff was entitled to "wait and see" by conducting further investigations to determine the extent of the damage before suing. This seems to conflate the issues of whether there is knowledge of damage with the issue of the appropriate means for seeking redress for that damage.

In 2212886 Ontario Inc. v. Obsidian Group Inc., a franchise rescission case, the Court set aside summary judgment granting the franchisee rescission damages of almost $1 million. While the motion judge properly identified the key factual issue, having found that the paper record was inadequate to resolve that issue because findings of credibility were required, the motion judge erred in deciding the credibility issue using the fact-finding powers under r. 20.04(2.1) without resorting to oral evidence. The Court confirmed that a motion judge's discretion to use their fact-finding powers is entitled to deference, and reviewable on a standard of whether it would be contrary to the interests of justice to have used those powers. This seems analogous to the cases that look at whether there has been a denial of procedural or natural justice. If so, then the appeal is allowed and the normal standards of review (correctness or reasonableness/palpable and overriding error) are not applicable.

Other topics covered this week included mortgage enforcement, the enforcement of an indemnity under a commercial lease, jurisdiction and limitation periods in the labour law context, vexatious litigants, adjournments, settling orders, and extensions of time to appeal.

I hope everyone is enjoying the weekend.

John Polyzogopoulos

Blaney McMurtry LLP


Tel: 416 593 2953


Table of Contents

Gillham v. Lake of Bays (Township), 2018 ONCA 667

Keywords: Breach of Contract, Construction, Negligence, Civil Procedure, Summary Judgment, Limitation Periods, Discoverability, "Appropriate Means", Limitations Act, 2002, SO 2002, c 24, Sched B, s 4, s 5(1)(a)(iv), Kudwah v Centennial Apartments, 2012 ONCA 777, 407 ETR Concession Company Limited v Day, 2016 ONCA 709, Markel Insurance Company of Canada v. ING Insurance Company of Canada, 2012 ONCA 218

2212886 Ontario Inc. v. Obsidian Group Inc., 2018 ONCA 670

Keywords: Franchise Law, Rescission, Arthur Wishart Act (Franchise Disclosure), 2000, S.O. 2000 ss 6(2), Civil Procedure, Summary Judgment, Genuine Issue Requiring Trial, Credibility, Fact-Finding Powers, Oral Evidence, Standard of Review, "Contrary to the Interests of Justice", Hryniak v Mauldin, 2014 SCC 7, Baywood Homes Partnership v Haditaghi, 2014 ONCA 450, Choquette v Viczko, 2016 SKCA 52, Trotter Estate, 2014 ONCA 841, 1615540 Ontario Inc. (c.o.b. Healing Hands Massage Therapy Clinic) v Simon, 2016 ONCA 966, Rules of Civil Procedure, Rule 20.04(2.1), 20.04(2.2)

Carby-Samuels II v. Carby-Samuels, 2018 ONCA 664

Keywords: Civil Procedure, Vexatious Litigants, Summary Judgment, Reasonable Apprehension of Bias, Courts of Justice Act, R.S.O. 1990, c. C.43., s 140(3), Children's Aid Society of the Regional Municipality of Waterloo v. C.T., 2017 ONCA 931

Derakhshan v. Narula, 2018 ONCA 658

Keywords: Civil Procedure, Appeals, Extension of Time, Rules of Civil Procedure, Rule 3.02

Romanko v. Aviva Canada Inc., 2018 ONCA 663

Keywords: Civil Procedure, Trials, Adjournments, Estrada v Estrada, 2016 ONCA 697

Schnarr v. Blue Mountain Resorts Limited, 2018 ONCA 668

Keywords: Civil Procedure, Orders

Parc Downsview Park Inc. v. Penguin Properties Inc., 2018 ONCA 666

Keywords: Contracts, Real Property, Commercial Leases, Guarantees, Indemnities, Enforceability, Misrepresentation, Contractual Interpretation, Standard of Review, Teal Cedar Products Ltd v British Columbia, 2017 SCC 32, Atos IT Solutions v Sapient Canada Inc, 2018 ONCA 374, Damages, Mitigation, Civil Procedure, Applications

1173928 Ontario Inc. v. 1463096 Ontario Inc., 2018 ONCA 669

Keywords: Real Property, Mortgages, Power of Sale, Notices of Sale, Conveyancing, Mortgages Act, RSO 1990, c M 40, s. 22 and 31, Conveyancing and Law of Property Act, RSO 1990, c C 34, s 41, Farrar v Farrars Ltd. (1888), 40 Ch D 395 (Eng C), Ostrander v. Niagara Helicopters Ltd. (1973), 1 O. (2d) 281 (HC), Commercial Leases, Commercial Tenancies Act, RSO 1990, c L7

United Food and Commercial Workers Canada, Local 175, Region 6 v. Quality Meat Packers Holdings Limited, 2018 ONCA 671

Keywords: Employment Law, Labour Law, Civil Procedure, Jurisdiction, Limitation Periods, Representative Actions, Class Actions, Orders, Nunc Pro Tunc, Rules of Civil Procedure, Rules 10.01(f), 12.08, 21.01(1)(a), 21.01(1)(b), 21.01(3)(a), Weber v Ontario Hydro, [1995] 2 SCR 929, Ritchie v Canadian Airlines International Ltd (2001), 13 CPC (5th) 368, Logue Mechanical Services Ltd v UA, Local 787, [2016] OLRB Rep July/August 691, Class Proceedings Act, 2002, SO 1992 c 6,Canadian Imperial Bank of Commerce v Green, 2015 SCC 60, 1100997 Ontario Limited v North Elgin Centre Inc., 2016 ONCA 848, Lawrence v International Brotherhood of Electrical Workers, 2017 ONCA 321

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Civil Decisions

Gillham v. Lake of Bays (Township), 2018 ONCA 667

[Rouleau, Roberts and Fairburn JJ.A.]


David A Morin, for the appellants Stuart Zacharias, for the respondent, The Corporation of the Township of Lake of Bays

David Thompson, for the respondent, Royal Homes Limited

Keywords: Breach of Contract, Construction, Negligence, Civil Procedure, Summary Judgment, Limitation Periods, Discoverability, "Appropriate Means", Limitations Act, 2002, SO 2002, c 24, Sched B, s 4, s 5(1)(a)(iv), Kudwah v Centennial Apartments, 2012 ONCA 777, 407 ETR Concession Company Limited v Day, 2016 ONCA 709, Markel Insurance Company of Canada v. ING Insurance Company of Canada, 2012 ONCA 218


The appellants' action against the respondents arose out of alleged deficiencies in the construction of their prefabricated cottage. The appellants first noticed a problem with one of the deck piers in the summer of 2009. The appellants approached Royal Homes seeking warranty assistance. On Royal Homes' recommendation, the appellants subsequently retained Trow Associates Inc., a structural engineering firm, to investigate. Trow did not suggest that the stone retaining wall was failing, nor that there were any construction issues with the stone retaining wall or the cottage foundation. JM, who built the retaining wall, told the appellants that they should just monitor the situation and "wait and see" if the stone retaining wall found its own level over the next year or two. As a result, the appellants took no further steps at that time.

The problems continued and the appellants retained Fowler Construction Company Ltd. to inspect the property in 2012. On July 30, 2012, Terraprobe delivered a report concluding that the stone retaining wall was failing and recommended that it be removed and reconstructed. When Fowler commenced the remedial work in 2013, it discovered that the cottage foundation and footings had also been constructed on loose soil.

The appellants commenced their action on October 21, 2013. The appellants alleged that the construction of the foundation of the cottage and the stone retaining wall was negligent because they were built on loose soil, which caused them to migrate down the slope of the property. The appellants pleaded that the Corporation of the Township of Lake of Bays was negligent in its oversight and approval of the construction of the cottage foundation and the stone retaining wall.

The respondents successfully moved for summary judgment of the appellants' action against them on the basis that the applicable two-year limitation period under s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B, (the "Act"), had expired. The motion judge concluded that the appellants knew or should have known in 2009 that there were some problems with the construction of their cottage, with or without the Trow report. The appellants appeal from the dismissal of their action.


(1) Did the motion judge err by finding that the appellants' claims were statute-barred because they were discoverable more than two years before the appellants issued their statement of claim?

Holding: Appeal allowed.


(1) Yes. The motion judge erred in his approach to the question of discoverability of the appellants' claims and made palpable and overriding errors in his consideration of the evidence related to that question.

The motion judge was required to consider the provisions of s. 5(1) of the Act, in the light of the governing principles regarding discoverability. The overarching question in the discoverability analysis under s. 5 of the Act is whether the claimant knew or reasonably should have known, exercising reasonable diligence, the material facts stipulated under s. 5(1)(a) that give rise to a claim. Knowledge of the claim includes knowledge of the identity of a potential defendant, although it is not necessary for a claimant to know with certainty a potential...

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