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Case Law is a sample selection from the weekly summaries of notable unreported civil and criminal court decisions published in Law Times newspaper.

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Civil Practice and Procedure

Class and representative proceedings

Representative or class proceedings under class proceedings legislation

Class proceeding was preferable procedure

Plaintiff commenced class action alleging defendants controlled supply of gem grade diamonds in order to increase price, which in turn resulted in sales in retail market at inflated prices. Proceedings were commenced in Ontario, British Columbia, Quebec and Saskatchewan. Plaintiffs reached resolution with defendants. Parties brought motion for order on consent certifying class for settlement purposes and for approval of notices of hearing for court approval of settlement. Motion granted. Cause of action was clearly and plainly disclosed in pleadings, arising from alleged breach of Competition Act and tort of conspiracy. Proposed class was defined objectively and its membership was readily discernible. Claim raised common legal and factual issues about existence, extent and effect of alleged conspiracy. Class proceeding was preferable procedure. Proposed notices and plan of dissemination were acceptable.
Brant v. De Beers Canada Inc. (2016), 2016 CarswellOnt 18869, 2016 ONSC 7515, H.A. Rady J. (Ont. S.C.J.).

Civil Practice and Procedure

Actions involving parties under disability

Mental incompetents

Proposed settlement was approved by court

Court approval of settlement. Insured was elderly man who suffered significant head injury when struck by vehicle while walking across roadway. Insurers paid more than $1.3 million for statutory accident benefits (SABs). Insurers offered to settle insured’s SAB claim by payment of $180,000 for future attendant care, $180,000 for future medical and rehabilitation benefits, $10,000 for costs, and $3,000 for assessable disbursements. Insured’s solicitors would receive total of $53,680 from settlement amount. Insured, through his litigation guardian, applied for order approving proposed full and final settlement of his SAB claim. Application granted. Insured’s solicitors had obtained settlement that was in best interests of insured and that would adequately look after his needs. Resolution of SAB claim on full and final basis would bring end to claim and negate need to participate in dispute resolution process regarding any future denial of benefits requested. Proposed settlement represented fair and appropriate resolution of insured’s claims for SABs having regard to complete factual matrix of case. Proposed legal fees were fair and reasonable.
Kwok (Litigation guardian of) v. State Farm Mutual Automobile Insurance Co. (2016), 2016 CarswellOnt 19083, 2016 ONSC 7339, Firestone J. (Ont. S.C.J.).

Business Associations

Legal proceedings involving business associations

Practice and procedure in proceedings involving corporations

Appeal was transferred to Divisional Court

Shareholders commenced action against corporations in negligence for failing to prevent or detect fraud. Corporations moved to strike portions as amended statement of claim. In response, shareholders moved under s. 246 of Ontario Business Corporations Act (Act) for leave to commence derivative action. Motion judge found shareholders’ motion was statute-barred by virtue of s. 4 of Limitations Act, 2002. Shareholders appealed to Ontario Court of Appeal. Appeal transferred to Divisional Court. Order under appeal was order within meaning of s. 255 of Act, and appeal lay to Divisional Court.
1186708 Ontario Inc. v. Gerstein (2016), 2016 CarswellOnt 18627, 2016 ONCA 905, E.E. Gillese J.A., M.L. Benotto J.A., and L.B. Roberts J.A. (Ont. C.A.).

Bankruptcy and Insolvency

Discharge of bankrupt

Conditional discharge

Condition imposed was not unreasonable

Bankrupt misappropriated over $5 million from clients while employed as investment advisor by creditor. Bankrupt was ordered to pay restitution to creditor but did not do so. Creditor petitioned bankrupt into bankruptcy and filed proof of claim for amount it had reimbursed its clients. During bankruptcy, bankrupt received disability payments of $13,000 to $15,000 per month but paid no surplus income. Master ordered that, as condition of discharge, bankrupt was to pay $284,346 to Trustee as surplus income up to certain date, payable at $5,000 per month. Master also ordered bankrupt to pay additional $5,000 per month to Trustee for further six years, referring to amounts as surplus income payments. Master suspended discharge from bankruptcy for two years, subject to payment of surplus income. Bankrupt appealed, alleging Master erred in ordering him to pay further $5,000 per month of “surplus income” for six years as condition of discharge. Appeal dismissed. When viewed in their entirety, Master’s reasons did not refer to surplus income within meaning in s. 68 of Bankruptcy and Insolvency Act but instead referred to income which is available for payment pursuant to condition of bankrupt’s discharge under s. 172 of Act. Master was clear that further payment was imposed as condition of bankrupt’s discharge without any reference to surplus income under s. 68. Condition imposed was not unreasonable. Duration of payments was not unduly long. Circumstances of case were exceptional, both in terms of breach of trust and fraud that gave rise to creditor’s claim and in terms of amount of claim.
Cole v. RBC Dominion Securities Inc. (2016), 2016 CarswellOnt 19513, 2016 ONSC 7110, H.J. Wilton-Siegel J. (Ont. S.C.J.).

Bankruptcy and Insolvency

Practice and procedure in courts

Appeals

Leave to appeal order approving sale process was dismissed

Company in which G was shareholder went bankrupt. Estate trustee sought offers for company’s assets and arranged auction. Only bidders were G and brother of another shareholder. Auction was unsuccessful. Trustee sought court approval to conduct second auction. G’s request to adjourn motion for approval was denied and order approving sale process granted. G did not participate in second auction and company’s assets were sold to other bidder. G brought motion for leave to appeal order approving sale process. Motion dismissed. Proposed appeal did not satisfy test for leave. Issues raised by G were not of general importance to practice of bankruptcy and insolvency matters or to administration of justice as whole. Motion judge’s decision not to adjourn proceeding and decision to approve sale process were highly fact-specific and were exercise of judge’s discretion. Neither ground of appeal was prima facie meritorious. There was nothing to suggest error in principle or improper exercise of discretion. Proposed appeal would unduly hinder progress of bankruptcy proceedings.
IceGen Inc., Re (2016), 2016 CarswellOnt 18630, 2016 ONCA 907, E.E. Gillese J.A., M.L. Benotto J.A., and L.B. Roberts J.A. (Ont. C.A.).

Administrative Law

Requirements of natural justice

Right to hearing

Reasons of municipal police services board were inadequate

Applicant taxi company had license to run accessible taxi service revoked, by decision of municipal police services board. Taxi company claimed that decision was made without sufficient reasons. Taxi company applied for judicial review of board’s decision. Application granted. New hearing ordered. There was conflicting evidence as to whether taxi company had vehicles on road without insurance, and whether they had office open at all times. Board’s decision did not resolve conflicts. Reasons were inadequate as whole. Revocation had to remain in interim, before new hearing took place.
Guelph Taxi Inc. v. Guelph Police Service (2016), 2016 CarswellOnt 18684, 2016 ONSC 7383, Dambrot J., Hambly J., and Mew J. (Ont. Div. Ct.).

Family Law

Domestic contracts and settlements

Effect of contract

Trial judge did not err in interpreting final separation agreement

Parties were married in 1983 and adopted daughter at birth in 1995. Wife left work to become full time homemaker. Parties separated in 2009. In July 2011 parties entered into partial separation agreement under which husband was to pay periodic spousal support of $4,000 per month. In January 2013 parties entered into final separation agreement. Daughter continued to live primarily with husband. Husband, who had been terminated from his employment, agreed to make final spousal support payment of $4,000 for December 2012. Husband began new employment in July 2013. In 2014, wife applied for retroactive spousal support to July 2013 on basis of material change under agreement, also submitting that daughter was no longer child of marriage. Trial judge found husband’s income to be $152,000 and wife’s income to initially be $3,760. Trial judge ordered spousal support of $5,400 monthly retroactive to July 2013; $1,900 monthly from May 2015 to April 2016; $1,930 monthly from May 2016 to April 2017; then $2,068 monthly, indefinitely. Three latter amounts were based on wife making withdrawals from Locked-In Retirement Account ($66,250, $65,221, and $62,167, respectively). Husband appealed. Appeal dismissed. Trial judge did not err in interpreting final separation agreement. Trial judge was entitled to conclude that agreement was not bar to wife’s application for support based on change in circumstances. Agreement acknowledged husband had lost job, effected an equalization of property, stipulated that cessation of spousal support was subject to future material change, required husband to notify wife in event of obtaining future employment, and lacked extensive releases of spousal support. Husband’s argument that his continuing support of daughter meant that he did not have to support wife had to be rejected. Trial judge did not err in concluding that daughter was no longer child of marriage and that wife had no continuing obligation to support her.
Berger v. Berger (2016), 2016 CarswellOnt 18305, 2016 ONCA 884, K.M. Weiler J.A., David Watt J.A., and Grant Huscroft J.A. (Ont. C.A.).


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Law Times poll

The recent passing of a provincial act removed the courts’ progressive approach to enforcing surrogacy agreements, say some lawyers, and has led to fears it could leave the area open to exploitation. Do you think this is true?
Yes, the bill represents an opportunity lost for the development of surrogacy law in Ontario.
No, the bill creates enhanced clarity and more clear guidelines for surrogacy and those who participate in it.