Ontario Court Of Appeal Summaries (May 6 – 10, 2019)

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

In Donovan v. Sherman Estate, the Court briefly reviewed the test for granting a sealing order. The Court observed that although the desire for privacy in this case was understandable, by itself, the desire for privacy without a public interest component is insufficient to justify the granting of a sealing order.

In Ruffolo v. David, the Court addressed the contempt power, stressing that contempt is an enforcement power of last resort and should be employed sparingly in order to preserve the judicial authority it is intended to protect. The Court additionally noted that appeals from contempt findings should typically only be made after the court of first instance has levied a sanction against the contemnor. In this case, though, the Court set aside the finding of contempt even before the court below had imposed a sanction.

In Service Mold + Aerospace Inc v. Khalaf, the Court examined the different principles to be applied between summary judgment and partial summary judgment. Partial summary judgments may increase the risk of duplicative proceedings or inconsistent findings and can frustrate the Hryniak objective of using summary judgment to achieve proportionate, timely and affordable justice. The Court held that a partial summary judgment should not proceed unless the issues can be bifurcated without causing overlap that could lead to duplication or inconsistent findings.

In Curley v. Taafe, the Court reviewed the test for malicious prosecution, confirming that in certain circumstances, the complainant may be treated as the prosecutor for the purposes of alleging the tort. The Court additionally clarified the application of the rule in Browne v Dunn, and reviewed the test for judicial notice of facts.

Other topics covered this week included whether a corporation should be liquidated with or without the court's supervision, vexatious litigants, and forum selection clauses/forum non conveniens.

Finally, I wanted to take this opportunity to thank all of the participants and panelists who attended our Top Appeals of 2018 CLE that was held yesterday evening at the OBA. Lea and I enjoyed chairing the proceedings and hope that everyone in attendance found the program as interesting as we did. Our insider panelists shared interesting insights into some of the top appeals that were decided by the court last year.

Our first panel discussed the continuing expansion of the "appropriate means" test contained in ss. 5(1)(a)(iv) of the Limitations Act, 2002. The limitation period can be delayed if there is a different procedure available to remedy the damage besides a court proceeding, a professional has undertaken to rectify the damage, and now also if the damage is so trivial that it would be appropriate to take a "wait and see" approach to determine if the damage rises to a non-trivial level.

In addition, claims over for contribution and indemnity are now subject to the same discoverability principles of all other claims, so there is no hard two-year limitation period for claims over (Mega International Commercial Bank (Canada) v. Yung, one of the other decisions we discussed yesterday). As was pointed out during the panel discussion, the determination that discoverability applies to claims for contribution and indemnity is problematic, given the wording of section 5. Section 18 deems a defendant served with a claim as having knowledge that damage has been suffered on the date the defendant is served with a statement of claim (ss. 5(1)(a)(i)). However, by virtue of ss. 5(2), that deemed fact is only a presumption, which can be rebutted. Claims over for contribution or indemnity do not typically crystallize until a defendant suffers judgment or settles (unless a contractual indemnity says otherwise, as was the case in the prior leading authority on the limitation period applicable to claims for contribution and indemnity - Canaccord Capital Corporation v. Roscoe, 2013 ONCA 378). Therefore, for most claims over, the presumption that damage has been suffered is automatically rebutted. The consequence of the Court's decision in Mega International may therefore be that defendants may have until two years after they suffer judgment or settle to bring a claim for contribution and indemnity. This result is obviously not in accordance with the intention of section 18 of the Limitations Act, 2002. It remains to be seen whether the Court will be asked to decide this issue directly in the future.

Two of the other appeals featured last night, Pointes Protection and Platnick v. Bent, were recently granted leave by the Supreme Court. We therefore await the SCC's pronouncements on the anti-SLAPP provisions contained in sections 137.1 to 137.5 of the Courts of Justice Act.

Finally, one of the other decisions featured (which was a decision on a stay motion pending appeal), City of Toronto v Attorney-General (reduction of wards from 47 to 25), is going to a full hearing of the appeal before a five-member panel next month, even though the election went ahead with the reduced number of wards. In January, the new City Council of 25 confirmed the prior Council's instructions to oppose the Attorney-General's appeal, and to even seek leave to the Supreme Court in the event that MAG is successful on its appeal. There will therefore be more to come on this case in a future blog post.

CIVIL DECISIONS

Growthworks Commercialization Fund Ltd. v. Growthworks WV Management Ltd., 2019 ONCA 371

[Doherty, Rouleau and Brown JJ.A.]

Counsel:

M.L. Solmon and C. Wetmore, for the appellant

G.R. Hall and E.M. MacKinnon, for the respondent

Keywords: Corporations, Dissolution, Voluntary Liquidation, Canada Business Corporations Act, R.S.C. 1985, c. C-44, ss. 211(7), 217(a)

FACTS:

The corporate appellant (the "Manager") was the manager of the related respondent (the "Fund"), a Canada Business Corporations Act ("CBCA") corporation. The parties agreed that the Fund should be liquidated and dissolved, but disagreed over the liquidation process. The Manager sought liquidation under the court's supervision, while the Fund requested to use the voluntary liquidation process set out in the CBCA, s 211(7). The motion judge ordered the Fund's liquidation using the latter process, which did not involve a court-appointed liquidator.

ISSUES:

(1) Did the application judge err by relying on the CBCA, s 217(a) to grant the Fund an order for the liquidation and dissolution of the Fund?

(2) Did the application judge err by ordering the liquidation without appointing a liquidator?

HOLDING:

Appeal dismissed.

REASONING:

(1) No. The Manager's challenge to the application judge's order was overly technical and without any practical consequence. There was no dispute that the Fund should be liquidated, that the Fund should be dissolved and that the motion judge had the jurisdiction to make a liquidation order. No error can lie where the application judge ordered the relief sought by both parties.

(2) No. Section 217 grants an application judge the power to make a wide range of orders in connection with dissolution and liquidation. A court may make any fit order and there is no limit on the court's power to make any fit order. Section 217 does not mandate the appointment of a liquidator when a court orders liquidation. In this case, the application judge found that the Fund's process without a court-appointed liquidator was appropriate due to the modest size of the Fund, the unique nature of the Fund's illiquid securities, and the greater efficiency achieved by allowing the Fund's expert to continue versus a court-appointed liquidator starting anew.

Peoples Trust Company v. Atas, 2019 ONCA 359

[Tulloch, Huscroft and Harvison Young JJ.A.]

Counsel:

N.A., in person

C.J. Wallis, for the corporate respondent

Y. Gulia, for the individual respondents

G. Caplan, for the remaining respondents

Keywords: Civil Procedure, Vexatious Litigants, Self-Represented Litigants, Case Management, Pre-Screening Chavali Orders, Functus Officio, Courts of Justice Act, R.S.O. 1990, c. C. 43, s. 140, Chavali v. Law Society of Upper Canada, [2006] O.J. No. 2036 (SC), Housen v. Nikolaisen, 2002 SCC 33, R. v. Jordan, 2016 SCC 27, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9

FACTS:

The appellants were declared vexatious litigants under the Courts of Justice Act, s. 140 ("CJA"). The application judge who heard the s. 140 application was also the case management judge for the underlying litigation.

ISSUES:

(1) Did the application judge have jurisdiction to hear the s. 140 application?

(2) Did the application judge err in finding that the appellants had acted in a vexatious manner in defending proceedings brought against them, or in requiring the appellants to seek leave prior to taking further steps in defending such proceedings?

(3) Did the application judge err in finding that the court had jurisdiction to make a pre-screening Chavali Order or in writing the terms thereof?

(4) Is the continuation of case management and the Chavali Order unfair to the individual appellant as a self-represented litigant?

HOLDING:

Appeal dismissed.

REASONING:

(1) Yes. In the four-year process of case managing the underlying litigation, the application judge did not conduct any settlement discussions or hold a pre-trial in respect of the underlying litigation or the s. 140 application. In addition, the appellants did not appeal from the application judge's ruling in 2015, made when this issue was first raised by the appellants, that he had jurisdiction to hear the s. 140 application.

(2) No. The court has broad discretion to control its process and to make appropriate orders where vexatious proceedings have been instituted or proceedings have been conducted in a vexatious manner, pursuant to the...