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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

Trials

Jury trial

New trial was not justified


Appellant S was driving on two-lane road, when respondent N’s car in opposite lane was struck and pushed into S’s lane. S struck N’s vehicle. N brought action against S for negligence. At trial, N had settled claim against other driver and damages were agreed upon with S. Jury found S to be liable for accident. S claimed that jury’s verdict was unreasonable, as they held S to standard of perfection. S claimed that specifically inappropriate instruction was given, as to S’s speed while driving. S finally claimed that N’s counsel made inappropriate remarks, given that damages were not in issue. S appealed from finding of liability. Appeal dismissed. N’s trial counsel’s comments as to effects of accident on N and family were clearly improper. Trial judge charged jury, and explained that sympathy for N and family were not to play role in verdict. New trial was not justified based on any or all of grounds of appeal. 

Norman (Litigation guardian of) v. van Meppelen Scheppink (2017), 2017 CarswellOnt 3209, 2017 ONCA 192, R.G. Juriansz J.A., David Brown J.A., and B.W. Miller J.A. (Ont. C.A.).

Bankruptcy and Insolvency

Avoidance of transactions prior to bankruptcy

Recovery of proceeds or property

Bankrupt was engaged in effort to defraud


Bankrupt re-sold telephone equipment. In May 2012, bankrupt began paying consultant, C, and C’s company $10,000 per month. In November 2013, bankrupt began receiving loans from new lender it reported as revenue. In March 2015, bankrupt’s old lender brought application for bankrupt’s receivership. In April 2015, receiver and manager were appointed. In July 2015, bankrupt was assigned into bankruptcy. At October 2015 examination under s. 163 of BIA, C testified he had no contact with and could not name any of bankrupt’s customers or suppliers. Trustee in bankruptcy brought motion for order requiring C and C’s company to repay $159,330 transferred during year prior to March 2014 (relevant period) to estate of bankrupt under s. 96 of Bankruptcy and Insolvency Act (BIA). Motion granted; C and C’s company ordered to pay estate $159,330. Payments to numbered company during relevant period fell within s. 96(1)(b)(i) of BIA. Although applications were generally to be brought as motions, judge had discretion to order trial or use summary process if it would yield fair result. No trial was necessary as issue was narrow, parties’ complete evidence was before court, protagonists had been cross-examined, and there was relatively small amount of money in issue. Section 96 did not require trustee to prove bankrupt was engaged in scheme to defeat its creditors generally or as group. C’s affidavit evidence from his knowledge of bankrupt’s customers to how he brought bankrupt millions of dollars in sales was contradictory. Value of consideration C and C’s company gave to bankrupt were presumptively what trustee opined, which was zero. There was no legal or persuasive burden on C or C’s company but, in absence of credible evidence to contrary, trustee proved on balance of probabilities that C and C’s company provided no services of any value to bankrupt during relevant period and that all payments bankrupt made to C or C’s company from that date were “payments at undervalue.” It was clear and undisputed that during relevant period, bankrupt was engaged in effort to defraud and delay bank from learning it was insolvent and borrowing from different lender. Three badges of fraud were found and gave rise to presumption that bankrupt intended to defraud, defeat, or delay old lender. There was no evidence of bona fide value flowing from C or C’s company to bankrupt even before relevant period. While solvent company was entitled to make payments for non-commercial or uneconomic motivations, insolvent company making such payments for no consideration while actively defrauding its principal lender could not be said to be acting in ordinary course of business.
National Telecommunications Inc., Re (2017), 2017 CarswellOnt 3184, 2017 ONSC 1475, F.L. Myers J. (Ont. S.C.J. [Commercial List]).

Civil Practice and Procedure

Limitation of actions
Real property

Plaintiff failed to show that their predecessor in title established adverse possession

Defendant owned vacant lot adjacent to plaintiffs’ lot. Both lots were converted to land titles in 2001. Defendant listed its lot for sale. Plaintiffs brought action for declaration that they owned portion of defendant’s lot (“disputed lands”) through adverse possession. Action was dismissed. Plaintiffs failed to show that their predecessors in title (H) established adverse possession over disputed lands prior to conversion to land titles, or that H’s acts of possession had intention of and effectively excluded true owner from possession. Trial judge found that use of defendant’s lot by H was seasonal and intermittent at best, which did not meet requirement of being constant and continuous, so there was no actual possession of disputed lands. Plaintiffs appealed. Appeal dismissed. It was clearly arguable that H’s use of disputed lands was sufficient to establish actual possession. However, plaintiffs’ claim failed on second branch of test for adverse possession, as they failed to show that H intended to use disputed lands in manner inconsistent with right of true owner to possession. H testified that he completed fence that enclosed disputed lands in belief that they were part of his property, and that he built concrete steps and two sheds on disputed lands. Mutual mistake could not be established on record; nor could argument of unilateral mistake by H be supported. It was open to trial judge to consider agreement of purchase and sale and statutory declaration when plaintiffs purchased their lot in rejecting H’s evidence that he believed he owned disputed lands. Trial judge’s conclusion that H knew he had no claim to defendant’s lot was not palpable and overriding error.
Sipsas v. 1299781 Ontario Inc. (2017), 2017 CarswellOnt 4409, 2017 ONCA 265, Alexandra Hoy A.C.J.O., M.L. Benotto J.A., and Grant Huscroft J.A. (Ont. C.A.); affirmed (2016), 2016 CarswellOnt 1572, 2016 ONSC 212, Hood J. (Ont. S.C.J.).

Civil Practice and Procedure

Costs

Costs of appeals

Quantum of costs had to reflect divided success

Applicant owners purchased lakefront property, across which ran above-ground pipe drawing water from lake for respondent neighbours’ property pursuant to “water pipe easement” document executed by predecessors in title. Neighbours entered into owners’ property without permission on basis that pipe was leaking and had to be repaired. Owners’ application for declaration that easement was invalid was dismissed and neighbours’ counter-application for declaration of subsisting easement was granted on terms allowing them to bury new water line within boundaries of easement. Owners’ appeal was allowed in part, to vary declaration to limit easement to leaving existing pipeline in present position and allowing neighbours to make only those repairs to which owners agreed in advance. Costs submissions received. Owners awarded costs in amount of $8,000. There were no unusual circumstances justifying departure from usual approach of setting aside order for costs below. As appeal was allowed only in part, it did not automatically follow that owners were entitled to full costs of proceedings below. Quantum of costs had to reflect that there was divided success. Owners enjoyed greater success as they succeeded on issues that drove proceedings below, namely whether neighbours could enter onto their lands without their prior permission to repair pipeline and whether neighbours had right to replace existing pipeline. Owners’ suggestion about neighbours’ conduct, namely that there was no leak in pipeline, was based on correspondence that arose after conclusion of proceedings and which had not been tested in crucible of litigation. Meaning to be taken from correspondence was disputed and record would not support credibility findings necessary to resolve dispute so as to find reprehensible behaviour warranting sanction of costs.
Mihaylov v. 1165996 Ontario Inc. (2017), 2017 CarswellOnt 3741, 2017 ONCA 218, Eileen E. Gillese J.A., M.L. Benotto J.A., and L.B. Roberts J.A. (Ont. C.A.); additional reasons (2017), 2017 CarswellOnt 1653, 2017 ONCA 116, E.E. Gillese J.A., M.L. Benotto J.A., and L.B. Roberts J.A. (Ont. C.A.).

Aboriginal Law

Reserves and real property

Leases

Plaintiff and Band entered into private leasing contract regarding hunting grounds

Plaintiff was member of defendant Band and he agreed to lease hunting grounds from Band for purposes of operating hunt club business pursuant to series of lease or land use agreements between plaintiff and Band. Plaintiff sought approval from Band to make capital improvements to buildings and lands of hunt club, and he sought credit for cost of capital improvements against rent he was required to pay. Plaintiff claimed that credit of $532,500 was agreed upon, and plaintiff did not pay rent for five years on the basis that he was drawing down capital improvement credit. There was change in Band council and plaintiff was evicted after 15 years of leasing land, right at start of hunting season, and plaintiff lost money, he was humiliated and his reputation suffered greatly. When council voted to evict plaintiff, they refused to count vote of one council member because they did not want there to be tie. Plaintiff brought action seeking damages, claiming that eviction constituted breach of agreement he had with Band; Band counterclaimed for unpaid rent due and owing. Action allowed; counterclaim allowed. Parties agreed that plaintiff would lease land from Band for $84,000 per year. Plaintiff and Band had agreement that plaintiff could proceed with construction and renovations, Band agreed to reimburse plaintiff for improvements by way of capital improvement credit to his rent, and plaintiff was entitled to capital improvement credit of $532,500. Band allowed and encouraged work to be completed knowing that plaintiff expected to be reimbursed. Band took no steps to collect rent for five years that plaintiff did not pay. Band knew that plaintiff did not keep receipts for cost of improvements, as much of work was done by plaintiff and his men on cash basis and receipts were not available. Procedure followed by Band council at meeting where they voted to evict plaintiff was completely improper. Parties entered into private contract and it could not be said that Band owed duty of fairness to plaintiff, but giving effect to intention of parties, justice required plaintiff to be given capital improvement credit of $532,500 against rent. Taking into account capital improvement credit, rent owing, and deposit plaintiff had paid, plaintiff was entitled to judgment of $142,500.
Sands v. Walpole Island First Nations Band Council (2016), 2016 CarswellOnt 21492, 2016 ONSC 7983, Pamela L. Hebner J. (Ont. S.C.J.).

Aboriginal Law

Family law

Children in need of protection

Canada failed to take reasonable steps to prevent loss of aboriginal identity in post-placement

Plaintiff brought class action against Canada, with respect to “scoop” of aboriginal children who were removed from their families on reserves in Ontario by child welfare authorities and were placed with or adopted by non-aboriginal parents. Plaintiff brought motion for summary judgment on certified common issue of whether Canada breached fiduciary or common law duties to take reasonable steps to prevent class members’ loss of aboriginal identity after they were placed in foster and adoptive parents. Motion granted. While rudimentary child welfare services were extended to some reserves, with minimal federal funding, Canada’s agreement with Ontario extended whole range of child welfare services and other provincial welfare programs to Indians with significant federal funding. Key component of agreement was Canada’s obligation to consult with Indian Bands, which plainly and unambiguously applied to each of 18 extended programs including child welfare services. No Indian Bands were ever consulted before child welfare services were extended and no Bands provided their concurrence. Language and context of provision at issue implicitly obligated Canada to actually undertake referred-to consultations and so, as Canada failed to consult with Indian Bands as it had undertaken to do, it breached agreement. If Canada had consulted with Bands, they clearly would have provided ideas and advice that could have prevented thousands of scooped children from losing their aboriginal identity. Canada failed to take reasonable steps to prevent loss of aboriginal identity in post-placement by, at minimum, failing to provide parents with information on apprehended children’s aboriginal heritage and entitlement to various federal benefits. Obligation to consult under agreement created common law duty of care that provided basis in tort for class members’ claims. Agreement was analogous to third-party beneficiary agreement as Canada undertook obligation to consult to benefit Indian Bands who were not parties to agreement.
Brown v. Canada (Attorney General) (2017), 2017 CarswellOnt 1758, 2017 ONSC 251, Edward P. Belobaba J. (Ont. S.C.J.).

Civil Practice and Procedure

Disposition without trial

Stay or dismissal of action

Collective agreement made matter arbitrable

Insured received long-term disability (LTD) benefits from insurer under group policy through her employment on basis of collective agreement. When benefits were terminated, insured brought action against insurer. Insurer brought motion to dismiss action on basis that court lacked jurisdiction. Motion judge granted motion and dismissed action on ground of lack of jurisdiction. Judge held that collective agreement made matter arbitrable. Insured appealed. Appeal dismissed. Fact that LTD benefits were paid under insurance policy did not change fact that insured’s entitlement to LTD benefits was provided by collective agreement. Collective agreement established insured’s rights to LTD benefits and covered terms, amount, definition of total disability, and referred to policy. Jurisdiction over dispute belonged to arbitrator.
Barber v. Manufacturers Life Insurance Co. (2017), 2017 CarswellOnt 2631, 2017 ONCA 164, H.S. LaForme J.A., S.E. Pepall J.A., and G. Pardu J.A. (Ont. C.A.).
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