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COURT OF APPEAL SUMMARIES (JULY 25, 2022 – JULY 29, 2022)


Good morning.

Following are this week’s summaries of the Court of Appeal for Ontario for the week of July 25, 2022.

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Good morning.

Following are this week’s summaries of the decisions released from the Court of Appeal for Ontario for the week of July 25, 2022. The Court was busy before its long weekend including one lengthy substantive case released.

Barker v Barker involved an action brought by 28 respondents against the Government of Ontario and the Physicians who were the Clinical Directors of Oak Ridge maximum security psychiatric facility. The 28 respondents were involuntarily admitted to Oak Ridge and held in the Social Therapy Unit (“STU”) during the periods between 1966 and 1983. Their claims included being subjected to inhumane treatment such as psychological and physical abuse as a result of three STU programs. The Court found that: 1) the trial judge did not err in finding that Ontario and the Physicians were liable for breach of fiduciary duty; 2) the trial judge erred in holding that the Physicians were liable for the tort of assault and battery; 3) the trial judge did not err in concluding that the respondent’s claims were not statute barred; and 4) the trial judge made a palpable and overriding factual error in his assessment of four respondents’ claims. The Court declined to disturb the quantum of damages but varied the treatment of pre-judgment interest, noting the sui generis nature of the case.

In Stevenhaagen Estate v Kingston General Hospital two doctors were found liable for not consulting a cardiovascular surgeon after a complication had occurred during heart surgery of the respondent patient, who suffered extensive injuries as a result. The Court dismissed the appeal and found that the trial judge did not err in its standard of care and causation analysis. The Court agreed that by failing to consult with a cardiovascular surgeon in a timelier manner, the appellants breached their duty to the respondent and were liable for the resulting injuries.

In Yanic Dufresne Excavation Inc v Saint Joseph Developments Ltd, the appellant appealed an order varying a default judgment to include a declaration that the judgment debt survived bankruptcy pursuant to s. 178(1)(d) of the BIA because it arose out of fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity. The Court found that the motion judge did not err in relying upon extrinsic evidence to make a fresh finding of fact, and that the statement of claim was sufficiently particularized to ground a claim for misappropriation while acting in a fiduciary capacity.

MOS MortgageOne Solutions Ltd v Heidary was another case under s. 178.

In Sorbam Investments Ltd v Litwack, the Court considered the appeal of 1129292 Ontario Limited, a company which owned a property that was found to have leaked contaminants to a neighbouring property at trial. On appeal, the Court found the appellant had not pleaded or led evidence to support novel arguments raised. The Court ultimately dismissed the appeal and found that the appellant advanced a fundamentally different case on appeal to that which was advanced at trial.

In Cheng v Grigoras, the Court determined that the motion judge did not err in concluding that the debt in the subscription agreement could only be paid by recourse to the assets listed in Appendix A of the agreement.

In Dominion of Canada General Insurance Company v Ridi¸ the issue of whether HST can be included in the computation of the maximum amounts of attendant care benefits payable by the respondent was addressed. The Court found that the HST payable for attendant care services was an “attendant care benefit” which was subject to the maximum limits in s. 19 of the Statutory Accident Benefits Schedule.

We wish everyone a fun and safe long weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 

jpolyzogopoulos@blaney.com

Ines Ferreira
Blaney McMurtry LLP
416.
416.597.4895

iferreira@blaney.com


Table of Contents

Civil Decisions

Sorbam Investments Ltd v Litwack, 2022 ONCA 551

Keywords: Real Property, Environmental Law, Negligence, Nuisance, Damages, Environmental Protection Act, R.S.O. 1990, c. E.19, s 99, Courts of Justice Act, R.S.O. 1990, c. C.43, s 130, Kaiman v. Graham, 2009 ONCA 77, Frohlich v. Ferraro, 2017 ONCA 978, Stellarbridge Management Inc. v. Magna International (Canada) Inc. (2004), 71 O.R. (3d) 263 (C.A.), Sorbam Investments Ltd. v. Litwack, 2017 ONSC 706

Yanic Dufresne Excavation Inc v Saint Joseph Developments Ltd, 2022 ONCA 556

Keywords: Bankruptcy and Insolvency, Claims Surviving Bankruptcy, “Fraud, Embezzlement, Misappropriation or Defalcation while Acting in a Fiduciary Capacity”, Breach of Contract, Breach of Trust, Unjust Enrichment, Civil Procedure, Default Judgments, Setting Aside, Evidence, Admissibility, Extrinsic Evidence, Fresh Evidence, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 178(1)(d), Rules of Civil Procedure, Rules 59.06(2) & 25.06(8), Simone v. Daley (1999), 43 O.R. (3d) 511 (C.A.), Lawyers’ Professional Indemnity Company v. Rodriguez, 2018 ONCA 171, H.Y. Louie Co. Limited v. Bowick, 2015 BCCA 256, Cruise Connections Canada v. Szeto, 2015 BCCA 363, Royal Bank of Canada v. Korman, 2010 ONCA 63, Korea Data Systems (USA), Inc. v. Aamazing Technologies Inc., 2015 ONCA 465, Dugas v. Gaudet et al., 2016 NBCA 19

MOS MortgageOne Solutions Ltd v Heidary, 2022 ONCA 561

Keywords: Bankruptcy and Insolvency, Claims Surviving Bankruptcy, Default Judgement, “Fraud, Embezzlement, Misappropriation or Defalcation while Acting in a Fiduciary Capacity”, Fraud, Breach of Trust, Breach of Contract, Unjust Enrichment, Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, s. 178(1)(e), Rules of Civil Procedure, Rule 25.06(8), F. Williams Logging Co. v. Roethel (1995), 58 B.C.A.C. 84, Lawyers’ Professional Indemnity Company v. Rodriguez, 2018 ONCA 178, McAteer v. Billes, 2007 ABCA 137, H.Y. Louie Co. Limited v. Bowick, 2015 BCCA 256, Garlicki (Bankrupt), Re, 2010 MBCA 73, Bannerman Lumber Ltd. v. Goodman, 2021 MBCA 13

Stevenhaagen Estate v Kingston General Hospital, 2022 ONCA 560

Keywords: Torts, Negligence, Medmal, Standard of Care, Duty to Consult, Causation, Clements v Clements, 2012 SCC 32, Sacks v Ross, 2017 ONCA 773, Salter v Hirst, 2011 ONCA 609, Uribe v Tsandelis, 2021 ONCA 377

Cheng v Grigoras, 2022 ONCA 557

Keywords: Contracts, Interpretation, Debtor-Creditor, Guarantees, Civil Procedure, Summary Judgment, Breach, Rules of Civil Procedure, Rule 59.03(4), Courts of Justice Act, R.S.O. 1990, c. C.43, s 134(1), Hamilton v. Open Window Bakery, 2004 SCC 9, Duong v. NN Life Insurance Company of Canada (2001), 141 O.A.C. 307 (C.A.)

Dominion of Canada General Insurance Company v Ridi, 2022 ONCA 564

Keywords: Administrative Law, Standard of Review, Correctness, Contracts, Interpretation, Insurance, Accident Benefits, Statutory Interpretation, Statutory Accident Benefits Schedule, O. Reg. 34/10, Part III, Insurance Act, R.S.O. 1990, c. I.8. s. 268, Legislation Act, 2006, S.O. 2006 c. 21, Sched. F, s. 56, Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, Rizzo & Rizzo Shoes Ltd, (Re), [1998] 1 SCR 27, Tomec v Economical Mutual Insurance Company, 2019 ONCA 882, Bell ExpressVu Ltd Partnership v Rex, 2002 SCC 42, Westminster Bank Ltd v Zang, [1966] AC 182 (HL), CanadianOxy Chemicals Ltd v Canada (Attorney General), [1999] 1 SCR, R v Zeolkowski, [1989] 1 SCR 1378, Thomson v Canada, [1992] 1 SCR 385

Barker v Barker, 2022 ONCA 567

Keywords: Breach of Fiduciary Duty, Torts, Assault, Battery, and Intentional Infliction of Emotional Distress, Crown Liability, Crown Immunity, Breach of Statutory Duty, Statutory Interpretation, Damages, General and Aggravated Damages, Punitive Damages, Pre-judgement Interest, Defences, Ex Turpi Causa, Civil Procedure, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, s 24, s 16, Mental Health Act, R.S.O. 1970, c. 269, Mental Hospitals Act, R.S.O. 1960, c. 236; R.S.O. 1970, c. 270; and R.S.O. 1980, c. 263, Class Proceedings Act, 1992, S.O. 1992, c. 6, s 28(1), Criminal Code, s. 672.11, Courts of Justice Act, R.S.O. 1990, c. C.43, s 128(3), s 130(1), Crown Liability and Proceedings Act, 2019, S.O. 2019, c. 7, Sched. 17, s 11, Fenton v North York Hydro Electric Commission (1996), 29 OR (3d) 481, Bell ExpressVu Limited Partnership v Rex, 2002 SCC 42, Rooney v ArcelorMittal S.A, 2016 ONCA 630, Andrews v Grand & Toy Alberta Ltd, [1978] 2 SCR 229, Joanisse v Barker (2003), 38 CPC, Barker v Barker, 2018 ONCA 255, Alberta v Elder Advocates of Alberta Society, 2011 SCC 24, Hodgkinson v Simms, [1994] 3 SCR 377, Galambos v Perez, 2009 SCC 48, Dolmage v Ontario, 2010 ONSC 1726, M(K) v M(H), [1992] 3 SCR 6, Guerin v The Queen, [1984] 2 SCR 335, (Attorney General) v Thouin, 2017 SCC 46, Kenny v Lockwood, [1932] OR 141 (CA), McInerney v MacDonald, [1992] 2 SCR 138, R v Sheppard, 2002 SCC 26, Champoux v Jefremova, 2021 ONCA 92, Lac Minerals Ltd v International Corona Resources Ltd, [1989] 2 SCR 574, Royal Bank of Canada v Fogler Rubinoff (1991), 5 OR (3d) 734 (CA), Inglis v Beaty (1878), 2 OAR 453 (CA), Prinzo v Baycrest Centre for Geriatric Care (2002), 60 OR (3d) 474 (CA), Collins v Wilcock, [1984] 3 All ER 374 (UK QB), Hurley v Moore (1993), 107 DLR, Fawley v Moslenko, 2017 MBCA 47, Sirois v Gustafson, 2002 SKQB 452, Reibl v Hughes, [1980] 2 SCR 880, McLean v McLean, 2019 SKCA 15, Warman v Grosvenor (2008), 92 OR (3d) 663 (SC), Dunne v Gauthier, 2000 BCSC 1603, Bruce v Dyer, [1966] 2 OR 705 (HC), Rougemount Capital Inc v Computer Associates International Inc, 2016 ONCA 847, McMaster v The Queen, 2009 FC 937, B(V) v Carins (2003), 65 OR (3d) 343 (SC), Demers v Everson, 2013 ONSC 6134, Weafer (Litigation Guardian of) v Vancouver Coastal Health Authority, 2007 BCSC 481, Nagy v Canada, 2006 ABCA 227, Plester v Wawanesa Mutual Insurance Co (2006), 213 OAC 241 (CA), McIntyre v Grigg (2006), 83 OR (3d) 161, Hill v Church of Scientology of Toronto, [1995] 2 SCR 1130, SY v FGC (1996), 26 BCLR (3d) 155 (CA), Cinar Corporation v Robinson, 2013 SCC 73, Honda Canada Inc v Keays, 2008 SCC 39, British Columbia v Zastowny, 2008 SCC 4, Dhingra v Dhingra Estate, 2012 ONCA 261, Randhawa v 420413 BC Ltd, 2009 BCCA 602, Borland v Muttersbach (1985), 53 OR (2d) 129 (CA), Prinzo v Baycrest Centre for Geriatric Care (2002), 60 OR (3d) 474 (CA), Non-Marine Underwriters, Lloyd’s of London v Scalera, 2000 SCC 24, Sirois v Gustafson, 2002 SKQB 452, Reibl v Hughes, [1980] 2 SCR 880, McLean v McLean, 2019 SKCA 15, [2019] 5 WWR 67, Warman v Grosvenor (2008), 92 OR (3d) 663 (SC), Dunne v Gauthier, 2000 BCSC 1603, Bruce v Dyer, [1966] 2 OR 705 (HC)

Short Civil Decisions

Efthymiadis v G4S Secure Solutions (Canada) Ltd, 2022 ONCA 554

Keywords: Administrative Law, Human Rights Tribunal, Civil Procedure, Appeals, Jurisdiction, Orders, Interlocutory or Final, Paulpillai Estate v Yusuf, 2020 ONCA 655

Golden Oaks Enterprises Inc v Scott, 2022 ONCA 568

Keywords: Bankruptcy and Insolvency, Civil Procedure, Costs, Boucher v Public Accountants Council for the Province of Ontario (2004), 71 OR (3d) 291 (CA)


CIVIL DECISIONS

Sorbam Investments Ltd v Litwack, 2022 ONCA 551

[Huscroft, Nordheimer and Copeland JJ.A.]

Counsel:

T. Farber and M. A. De Sanctis, for the appellant

M. S. Hebert and C. G. McLuckie, for the respondent

Keywords: Real Property, Environmental Law, Negligence, Nuisance, Damages, Environmental Protection Act, R.S.O. 1990, c. E.19, s 99, Courts of Justice Act, R.S.O. 1990, c. C.43, s 130, Kaiman v. Graham, 2009 ONCA 77, Frohlich v. Ferraro, 2017 ONCA 978, Stellarbridge Management Inc. v. Magna International (Canada) Inc. (2004), 71 O.R. (3d) 263 (C.A.), Sorbam Investments Ltd. v. Litwack, 2017 ONSC 706

facts:

The appellant, 1129292 Ontario Limited, appealed from the trial judge’s judgment finding it liable in nuisance and negligence in relation to the migration of chemical contaminants from its land to the respondent’s land.

The appellant and the respondent owned neighbouring properties. The appellant purchased its property from the Litwacks in 2007. The Litwacks’ former tenants had operated a dry-cleaning business on the property. The central issues at trial were whether contaminants had migrated from the appellant’s property to the respondent’s property (as alleged by the respondent) or vice versa (as alleged by the appellant), and when the appellant received notice of the contaminant migration issue. The trial judge found that the contaminants on the respondent’s property had migrated from the appellant’s property through permeable material in the soil (silty, sandy material).

With respect to nuisance, the trial judge found that the migration of contaminants from the appellant’s property caused physical damage to the respondent’s property, prolonged the sale process for the respondent’s property and, ultimately, decreased the price for which the property sold. She found that this damage met the threshold of being a substantial and unreasonable interference with the respondent’s use or enjoyment of its property, and thus constituted a nuisance.

With respect to negligence, the trial judge found that as an adjoining landowner, the appellant owed a duty of care to avoid acts or omissions that would cause harm to the respondent. She found that rather than following the direction of the Ministry, the appellant made a calculated decision to ignore the Ministry’s requests that the appellant investigate and address the migration of contaminants to the respondent’s property.

issues:

(1) Did the trial judge err in her application of the law of nuisance by failing to assess incremental interference with the respondent’s property by the appellant after the appellant had knowledge of the contaminant migration issue?

(2) Did the trial judge err in her application of the law of negligence by failing to assess incremental damage to the respondent’s property by the appellant after the appellant had knowledge of the contaminant migration issue?

(3) Did the trial judge improperly assess damages by not considering incremental damages after the appellant had knowledge of the contaminant migration issue?

holding:

Appeal dismissed.

reasoning:

1, 2, 3 No.

The Court stated that in substance, all 3 grounds of appeal raised the same issue. The appellants had faulted the trial judge for failing to approach the legal and factual issues from the perspective of whether some or all of the damage to the respondent’s property was caused before the appellant received notice of the contaminant migration issue in 2011.

The Court noted that the appellant’s defence had not included a pleading in the alternative, to support the arguments raised on appeal. Nor was there a pleading that to the extent that some of the damage was done before the appellant had knowledge, the appellant should only have been responsible for incremental damage done after it had knowledge of the contaminant migration issue.

Since the issue of incremental damage was not raised in the appellant’s statement of defence, it was also not pursued by the appellant at trial. Trial counsel for the appellant (not counsel on appeal) had not raised the incremental damage theory in the trial evidence, either by way of cross-examination of the respondent’s witnesses or through the appellant’s own witnesses.
Similarly, when evidence was led at trial with respect to damages, trial counsel for the appellant had not raised the theory of incremental damage with some or all of the damage to the respondent’s property occurring before the appellant had knowledge of the contaminant migration issue.

The Court noted that the appellant had directed the court to a brief passage in its closing submissions at trial, along with several points in its written submissions, where its counsel argued that if the trial judge were to find that the contamination came from the appellant’s property, the appellant should not be held responsible for all of it. The Court stated that this was too little, too late, as the appellant did not plead this position in the statement of defence and laid no evidentiary foundation for apportioning its responsibility to incremental damage once it was on notice of the contaminant migration issue.

The Court emphasized that an appeal is not a forum for an appellant to advance a fundamentally different case than was advanced at trial. In the circumstances of this case, where the appellant had not pleaded or led evidence at trial to support the arguments raised on appeal, it was not appropriate to exercise its discretion to allow the appellant to raise the new theory on appeal. This would be unfair to the respondent, and further, the evidentiary record from the trial was wholly inadequate to consider the issues: Kaiman v. Graham at paras 18-24; Frohlich v. Ferraro at para 5.


Yanic Dufresne Excavation Inc v Saint Joseph Developments Ltd, 2022 ONCA 556

[Tulloch, Lauwers and Paciocco JJ.A.]

Counsel:

Nigel McKechnie, for the appellant

J.F. Lalonde and Andrew Donaldson, for the respondent

Keywords: Bankruptcy and Insolvency, Claims Surviving Bankruptcy, “Fraud, Embezzlement, Misappropriation or Defalcation while Acting in a Fiduciary Capacity”, Breach of Contract, Breach of Trust, Unjust Enrichment, Civil Procedure, Default Judgments, Setting Aside, Evidence, Admissibility, Extrinsic Evidence, Fresh Evidence, Bankruptcy and Insolvency Act, R.S.C. 1985, c. B-3, s. 178(1)(d), Rules of Civil Procedure, Rules 59.06(2) & 25.06(8), Simone v. Daley (1999), 43 O.R. (3d) 511 (C.A.), Lawyers’ Professional Indemnity Company v. Rodriguez, 2018 ONCA 171, H.Y. Louie Co. Limited v. Bowick, 2015 BCCA 256, Cruise Connections Canada v. Szeto, 2015 BCCA 363, Royal Bank of Canada v. Korman, 2010 ONCA 63, Korea Data Systems (USA), Inc. v. Aamazing Technologies Inc., 2015 ONCA 465, Dugas v. Gaudet et al., 2016 NBCA 19

facts:

The respondent supplied excavation and landscaping services to the appellant’s company. The respondent sued the appellant for an outstanding balance, alleging breach of contract, breach of trust and unjust enrichment. The respondent secured an order varying a default judgment it had obtained against the appellant to include a declaration that the judgment debt survives bankruptcy. The appellant appealed that order, arguing that the motion judge erred by admitting and considering fresh evidence, and by making the order in the absence of a proper pleading and proof that the debt arose out of fraud, embezzlement, misappropriation or defalcation while the appellant was acting in a fiduciary capacity within the meaning of s. 178(1)(d) of the Bankruptcy and Insolvency Act (BIA).

issues:

(1) Did the motion judge err by admitting and relying upon extrinsic evidence to make fresh findings of fact?

(2) Did the motion judge err in finding that the statement of claim was sufficiently particularized to ground a claim for misappropriation while acting in a fiduciary capacity?

(3) Did the motion judge err in finding that the appellant engaged in morally unacceptable misconduct in his fiduciary breach of trust?

holding:

Appeal dismissed.

reasoning:

(1) No.

The appellant contended that the motion judge erred by admitting and relying upon the extrinsic evidence produced on the appellant’s motion to set aside the default judgment, months after the default judgement was secured. The Court rejected this submission.

The Court held that the application judge may look to the entire context of the proceeding in the action that produced the judgment to determine whether the judgment debt can be characterized as one falling within s. 178(1) of the BIA. This includes the material filed that led to the obtaining of the judgment debt, including the facts pleaded in support of the action that led to the judgment debt, any evidence that was presented at the time to secure that judgment debt, and any reasons that might have been given. Any other evidence is “extrinsic” and inadmissible, as it is irrelevant in showing the nature of the judgment debt.

Further, the Court held that fresh evidence is admissible at a Rule 59.06(2) hearing. In order to secure a variation under Rule 59.06(2), the moving party must prove, with evidence, either that the order was obtained by fraud, or that material facts supporting the variation arose or were discovered after the order was obtained. Moreover, given the implicit finding by the motion judge that the new evidence could not have been discovered with reasonable diligence, no question of res judicata concepts, such as cause of action estoppel or merger in the judgment, arises.

(2) No.

The appellant argued that the motion judge erred in this case by failing to determine whether, based on the record that was before the Default Judgment judge, the statement of claim was sufficiently particularized to ground allegations of fraud, misrepresentation, or breach of trust that would allow the default judgment to survive bankruptcy. The motion judge simply found that the pleadings provided a sufficient allegation of misappropriation by the appellant while acting in a fiduciary capacity to enable the nature of the judgment debt to be characterized as falling within s. 178(1)(d) of the BIA, and that the respondent became aware of specific evidence that could support that allegation after the appellant produced that evidence in support of his motion to set aside the Default Judgment.

The Court concluded that the motion judge was correct in admitting the extrinsic evidence, and even if the motion judge had erred by relying on the sufficiency of the pleadings as a basis for admitting extrinsic evidence, that error would not be overriding.

(3) No.

Case law makes it clear that a mere breach of trust, or even a negligent or an incompetent breach of trust, is insufficient to enable an order to be made that the debt survives bankruptcy pursuant to s. 178(1)(d) of the BIA. The judgment debt, whether it arises from fraud, embezzlement, misappropriation or defalcation while acting in a fiduciary capacity, must arise from conduct that displays at least some element of wrongdoing or improper conduct that would be unacceptable to society because of its moral turpitude or dishonesty.

In the appellant’s factum, the appellant argued that the pleadings did not support the requisite level of wrongdoing. However, in the course of oral submissions, the appellant conceded that if the extrinsic evidence was properly admitted, there should be deference to the motion judge’s determination that this level of wrongdoing was met. The Court held that given this concession, it was not necessary to examine this ground of appeal further.


MOS MortgageOne Solutions Ltd v Heidary, 2022 ONCA 561

[Strathy, C.J.O., Roberts and Sossin JJ.A.]

Counsel:

A. Assuras, for the appellant

I. Klaiman, for the respondent

Keywords: Bankruptcy and Insolvency, Claims Surviving Bankruptcy, Default Judgement, “Fraud, Embezzlement, Misappropriation or Defalcation while Acting in a Fiduciary Capacity”, Fraud, Breach of Trust, Breach of Contract, Unjust Enrichment, Bankruptcy and Insolvency Act, R.S.C., 1985, c. B-3, s. 178(1)(e), Rules of Civil Procedure, Rule 25.06(8), F. Williams Logging Co. v. Roethel (1995), 58 B.C.A.C. 84, Lawyers’ Professional Indemnity Company v. Rodriguez, 2018 ONCA 178, McAteer v. Billes, 2007 ABCA 137, H.Y. Louie Co. Limited v. Bowick, 2015 BCCA 256, Garlicki (Bankrupt), Re, 2010 MBCA 73, Bannerman Lumber Ltd. v. Goodman, 2021 MBCA 13

facts:

The appellant debtor appealed from the motion judge’s declaration that his debt to the respondent mortgagee was not released by his discharge from bankruptcy because of his fraud, pursuant to s. 178(1)(e) of the Bankruptcy and Insolvency Act (“BIA”).

The mortgage that the respondent granted to the appellant was third in priority. At the request of the appellant, the respondent advanced further funds to the appellant to assist in the payment and consolidation of his debts on the agreement that the appellant would use the funds to discharge the liens so that the respondent’s mortgage would rank second in priority. Prior to the respondent making any advances under the priority agreement, the appellant directed the respondent to an individual, D.E., whom the appellant represented was his Canada Revenue Agency (“CRA”) agent, so that the respondent could ascertain the exact amount of the liens and arrange for their payment. The respondent spoke and corresponded in writing with the appellant’s “CRA agent” who advised that the amount of $296,418.73 would discharge the outstanding liens. After the respondent advanced the funds, it discovered that the “CRA agent” was an imposter and that an additional amount of $316,566.36 was required to discharge all the liens. As a result, contrary to the priority agreement, the respondent’s mortgage remained in third position.

The respondent subsequently issued a statement of claim against the appellant, alleging that he breached the priority agreement. The respondent claimed payment of the amounts due under the mortgage, and alternatively damages for unjust enrichment and a declaration that the appellant was a constructive trustee of the funds received and liable to the respondent as a beneficiary of those funds. The respondent also sought possession of the property secured by the mortgage. Finally, the respondent requested that any judgment against the appellant for breach of trust should survive any subsequent assignment in bankruptcy and shall not be released by a discharge of the appellant as such liability falls within the provisions of s. 178(1)(d) of the arising out of fraud, embezzlement, misappropriation, or defalcation.

The motion judge found that the respondent’s pleadings raised the issue of fraud. He allowed the respondent’s motion and ordered the appellant to pay costs.

issues:

(1) Did the motion err in declaring that the appellant’s judgment debt was not released pursuant to s. 178(1)(e) of the BIA?

(2) Did the motion judge err in determining that in consenting to judgment, the appellant had admitted to fraud, especially as the judgment did not contain any reference to fraud or to the survival of the judgment following the appellant’s discharge from bankruptcy?

holding:

Appeal dismissed.

reasoning:

(1) No.

The Court held that the motion judge was entitled to examine the circumstances leading to the consent judgement to determine whether the consent constituted an admission of anything mentioned in s. 178(1)(e). In concluding that the scope of the consent judgment was broad enough to encompass fraud, the motion judge was required to examine the allegations in the statement of claim. Whether or not the actions of the appellant as alleged in the statement of claim constituted fraudulent misrepresentation is a question of mixed fact and law and therefore is entitled to deference absent palpable and overriding error.

The Court held that the motion judge made no error in granting relief under s. 178(1)(e). His discretion was amply supported by the pleadings and consent judgement.

(2) No.

To obtain a declaration under s. 178(1) of the BIA that a judgment survives a bankrupt’s discharge, it is unnecessary for the claimant to specifically refer to s. 178 in its pleadings on which the judgment is based. Nor is there any requirement that fraud be specifically pleaded or particularized. In determining whether a consent judgment falls within the scope o f s. 178(1), the court is concerned not so much with the cause of action that was pleaded but with whether the pleadings as a whole suggest fraudulent or otherwise unacceptable conduct.

In this case, the motion judge carried out the requisite analysis of the nature and substance of the pleadings and consent judgment and determined that they supported the criteria under s. 178(1)(e) of a debt resulting from obtaining property by false pretenses or fraudulent misrepresentation.

The Court found no error in the motion judge’s analysis or findings. It was open to him based on the pleaded factual allegations to conclude that the appellant’s impugned conduct fell within s. 178(1) of the BIA.


Stevenhaagen Estate v Kingston General Hospital, 2022 ONCA 560

[Trotter, Coroza and Favreau JJ.A.]

Counsel:

D. A. Cruz, A. S. Lewis and A. Robert, for the appellants

P. J. Pape and M. McGowan, for the respondents

Keywords: Torts, Negligence, Medmal, Standard of Care, Duty to Consult, Causation, Clements v Clements, 2012 SCC 32, Sacks v Ross, 2017 ONCA 773, Salter v Hirst, 2011 ONCA 609, Uribe v Tsandelis, 2021 ONCA 377

facts:

J.S had a congenital heart condition. On October 18, 2002, when she was 46 years old, she underwent an angioplasty procedure at the Toronto General Hospital (“TGH”). J.S’s aorta ruptured during the procedure. Instead of consulting the cardiovascular surgery service at TGH, Dr. P.R.M (an interventional cardiologist) and Dr. Y.S (a vascular surgeon) responded to the situation by themselves. They contained J.S’s bleeding to a degree by inserting a covered stent, but her condition remained precarious.

Hours passed before a cardiovascular surgeon was finally brought into the picture. J.S suffered serious injuries: paraplegia, paralysis of the left vocal cord, brain ischemia, left arm pain syndrome, and bladder and bowel dysfunction. At trial, Dr. P.R.M and Dr. Y.S were found liable for J.S’s injuries. Damages were settled between the parties.

Dr. P.R.M and Dr. Y.S appealed the trial judge’s judgment. Their principal submission was that the trial judge erred in finding that causation had been established. The appellants further submitted that the trial judge erred in finding that they failed to meet the standard of care by failing to consult with a cardiovascular surgeon in a timelier manner, resulting in a lengthy delay in getting J.S to the operating room. Finally, Dr. Y.S contended that he should not have been found liable at all because Dr. P.R.M made the critical decisions about J.S’s care.

issues:

(1) Did the trial judge err in concluding that Drs. P.R.M and Y.S did not meet the standard of care by failing to obtain an immediate cardiac surgery consult after the endovascular repair?

(2) Did the trial judge err in finding that, even if the appellants failed to meet the standard of care, this breach was the cause of J.S’s injuries?

(3) Did the trial judge err in finding Dr. Y.S liable for having merely “supported” the decision to not arrange for a consultation with a cardiovascular surgeon?

holding:

Appeal dismissed.

reasoning:

(1) No.

The appellants submitted that the trial judge erred by misapplying the “robust and pragmatic” approach to causation. They submitted that it was not proven that the delay in performing the surgery caused J.S’s injuries. The Court analyzed causation in light of the trial judge’s findings on the standard of care.

Critical to the trial judge’s conclusion on the standard of care was what he described as “antiquity.” That is, he accepted the uncontradicted evidence at trial that, in 2002, the “gold standard” for the treatment of an aortic tear was open heart surgery. Yet, in the face of a catastrophic mishap during an angioplasty procedure, no thought was given to consulting with a cardiovascular surgeon. The trial judge ultimately found that the standard was breached by the failure to consult with cardiac surgeons much sooner in the aftermath of the aortic tear. As soon as he realized that J.S’s aorta had ruptured, Dr. P.R.M did not immediately page cardiac surgery. Dr. P.R.M testified that he needed another doctor’s opinion about the feasibility of stemming the bleeding with a covered stent. The Court agreed that it was inexcusable that such a consultation did not occur given the vast resources available at TGH. Once the Cook stent was in place, and then properly adjusted, the failure to consult remained below the requisite standard of care. On the preponderance of evidence, the trial judge found that the need for cardiovascular surgery was both inevitable and imminent.
The trial judge gave careful and considered reasons on the issue of the standard of care being breached in the circumstances. His conclusions rested on ample evidence that, on a balance of probabilities, the standard of care had been breached.

(2) No.

The appellants submitted that the trial judge failed to make findings about when J.S’s injuries occurred. This was compounded by the trial judge’s failure to make findings on whether she would have been taken to the operating room any earlier if a consultation had taken place earlier, and whether J.S’s unfortunate outcome would have been prevented had she received surgery sooner.

The Court found that the trial judge properly identified the test for causation established in Clements v Clements. For causation purposes, the important time was 12:35 p.m. (when the Cook stent was properly in place), or 1:05 p.m. at the latest (when the entire procedure was noted as being complete). In order to be found liable, the plaintiffs were required to prove that J.S’s injuries happened after these time markers. The trial judge addressed his mind to this very issue. It is true that he referred to the “possibility” of injury at an earlier time, but he rejected that conclusion and applied the proper standard of proof.

The appellants submitted that the trial judge did not properly apply the “but for” test and that he unduly focused on medical causation, as opposed to factual causation. The trial judge’s causation analysis was firmly focused on what happened to J.S after the deployment of the Cook stent. He realized that any injury occurring before this event would not have been caused by any negligent act of the appellants. Moreover, the trial judge was satisfied that, had the appellants made the appropriate consultation and arranged to move J.S directly from the Cath Lab to the operating room, she would not have suffered her neurological injuries.

The trial judge concluded on a balance of probabilities that J.S’s injuries could have been prevented had the doctors consulted with a cardiovascular surgeon promptly after the Cook stent was in place. The trial judge’s conclusion involved two main components: first, that surgery would have actually occurred had cardiac surgery been consulted earlier; second, had the surgery occurred earlier, J.S would not have incurred the injuries that she did. The trial judge resolved both inquiries in favour of the plaintiffs. He was entitled to do so on the record.

(3) No.

The trial judge found that Dr. Y.S joined Dr. P.R.M in the critical decision, once the Cook stent was properly in place and adjusted by 12:35 p.m., that J.S should not be referred to a cardiovascular surgeon. As he was leaving the Cath Lab, Dr. Y.S suggested to Dr. P.R.M that a thoracic surgeon ought to be consulted because of an accumulation of blood in J.S’s chest. A cardiovascular consult still did not appear to be on the radar of either doctor at the time. As his suggestion regarding thoracic surgery indicated, Dr. Y.S did not advise Dr. P.R.M to seek cardiac surgery, nor did he view it as necessary.
It was both possible for the trial judge to find Dr. P.R.M in charge of the situation while also determining that Dr. Y.S was sufficiently involved in the negligent treatment of J.S to warrant a finding of liability.


Cheng v Grigoras, 2022 ONCA 557

[Trotter, Coroza and Favreau JJ.A.]

Counsel:

P. Starkman, for the appellant

J. Kaufman, for the respondent

Keywords: Contracts, Interpretation, Debtor-Creditor, Guarantees, Civil Procedure, Summary Judgment, Breach, Rules of Civil Procedure, Rule 59.03(4), Courts of Justice Act, R.S.O. 1990, c. C.43, s 134(1), Hamilton v. Open Window Bakery, 2004 SCC 9, Duong v. NN Life Insurance Company of Canada (2001), 141 O.A.C. 307 (C.A.)

facts:

On January 16, 2014, the appellant entered into a subscription agreement with Atlas (Richmond Hill) Limited Partnership. The subscription agreement required the appellant to invest $1,000,000 in exchange for 1,000 units of Atlas. The guarantee agreement stated that the appellant would be repaid within three years, with interest, for a total repayment of $1,200,000. The respondent signed the guarantee agreement as the guarantor of the debt.

Following the appellant’s investment, three years came and went. The appellant was owed $1,200,000 under the agreement, but he remained unpaid. When the appellant demanded repayment in August of 2018, the respondent told the appellant that his investment would again be delayed for half a year. In October of 2019, the appellant brought an action to recover his outstanding debt, as well as a motion for summary judgment asserting that there was no genuine issue for trial.

The motion judge agreed that the case was appropriate for summary judgment, but dismissed the motion and held that the appellant’s recourse was limited to the assets outlined in Appendix A of the guarantee agreement.

The appellant appealed on the basis that the motion judge erred in concluding that the debt could only be repaid by recourse to the assets listed in Appendix A and instead, asserted that the agreement unconditionally guaranteed his investment. The appellant also sought leave to appeal the motion judge’s decision not to award costs notwithstanding his perceived success on the motion for summary judgment.

issues:

(1) Did the motion judge err in interpreting the guarantee agreement?

(2) Did the motion judge err by limiting the recourse in the guarantee agreement to assets listed in Appendix A of the contract?

(3) Did the motion judge fail to render operative orders, contrary to r. 59.03(4) of the Rules of Civil Procedure?

holding:

Appeal dismissed (except to correct error in order).

reasoning:

(1) No

There was no ambiguity in the contract. The motion judge interpreted the contract by examining the entire text of the guarantee agreement and the decision was rooted in the words used in the various subsections of the agreement. Section 2.09 of the agreement clearly, expressly, and plainly limited the recovery of the appellant to the assets listed in Appendix A of the agreement.

(2) No

A fair reading of the respondent’s evidence during cross-examination was that he did own the assets in Appendix A at the time the guarantee was entered. However, subsequent events caused the respondent to face receivership in 2019 and, by the time he was cross-examined in 2020, he no longer owned those assets. However, this did not detract from the fact that Appendix A listed the only personal assets of the respondent, as they existed in 2014, upon which the parties agreed the debt could be realized. Moreover, the appellant could have moved to enforce the agreement in 2017 when the guarantee became due.

(3) Yes

The order should have explicitly stated the disposition of the proceeding, not only the motion judge’s conclusion regarding the agreement. However, on its own, this error did not affect the substantive outcome of the appeal. The appellant sought a personal judgment against the respondent claiming that the guarantee was unlimited and that Appendix A was illusory. The motion judge found that the guarantee was limited to the collateral in Appendix A. Accordingly, while the appellant was successful on some of the peripheral issues on the motion, the result was that the motion for summary judgment was dismissed.
The Court amended the motion judge’s order pursuant to s. 134(1)(a) of the Courts of Justice Act to reflect that the appellant’s summary judgment motion was dismissed, and declaring that the guarantee was limited to the collateral identified in Appendix A to the guarantee agreement dated January 16, 2014.


Dominion of Canada General Insurance Company v Ridi, 2022 ONCA 564

[Benotto, Zarnett and Thorburn JJ.A.]

Counsel:

L. L. Dickson and E. J. Lamont, for the appellant

K. B. Schultz and J. Frost, for the respondent

J.Y. Obagi, for the intervener Ontario Trial Lawyers Association

J. Galway, for the intervener Insurance Bureau of Canada

Keywords: Administrative Law, Standard of Review, Correctness, Contracts, Interpretation, Insurance, Accident Benefits, Statutory Interpretation, Statutory Accident Benefits Schedule, O. Reg. 34/10, Part III, Insurance Act, R.S.O. 1990, c. I.8. s. 268, Legislation Act, 2006, S.O. 2006 c. 21, Sched. F, s. 56, Canada (Minister of Citizenship and Immigration) v Vavilov, 2019 SCC 65, Rizzo & Rizzo Shoes Ltd, (Re), [1998] 1 SCR 27, Tomec v Economical Mutual Insurance Company, 2019 ONCA 882, Bell ExpressVu Ltd Partnership v Rex, 2002 SCC 42, Westminster Bank Ltd v Zang, [1966] AC 182 (HL), CanadianOxy Chemicals Ltd v Canada (Attorney General), [1999] 1 SCR, R v Zeolkowski, [1989] 1 SCR 1378, Thomson v Canada, [1992] 1 SCR 385

facts:

The appellant insured, F.R, was catastrophically impaired as a result of a car accident on March 21, 2014 and became eligible for attendant care benefits pursuant to Part III of the Statutory Accident Benefits Schedule (“SABS”). F.R was awarded the maximum benefit for attendant care provided in s. 19 of the SABS, that was $6,000 a month, with a total maximum payout of $1,000,000.

The respondent insurer, The Dominion of Canada General Insurance Company (Travelers), was the insurer responsible for paying F.R’s attendant care benefits. The respondent insurer interpreted s. 19 to mean that the HST paid to attendants was included in the monthly $6,000 monthly maximum and the $1,000,000 maximum policy limit. The respondent claimed that HST was an attendant care benefit because it was a “reasonable and necessary” expense incurred by the insured per s. 19(1), and as such, was subject to the $6,000 and $1,000,000 maximums like any other reasonable expense.

The appellant disagreed and therefore applied to the Licence Appeal Tribunal (“LAT”) for an order that HST was payable in addition to the s. 19 maximum limits. The Adjudicator decided that HST was not included as a “reasonable and necessary” expense and therefore was not subject to the $6,000 monthly limit in s.19(3) of the SABS or the policy limit of $1,000,000. He concluded that the insurer therefore had to pay HST as a tax, which was distinct from the payment of accident benefit expenses.

LAT rejected the insurer’s application for reconsideration. The respondent insurer then successfully appealed to the Divisional Court. The Divisional Court held that the adjudicator’s decision was incorrect as s. 19 of the SABS was clear and unambiguous and incorporated the guidelines by reference only to the hourly rates for services. It said nothing about HST and did not purport to authorize payment in excess of the limits in s.19(3) of the Schedule. For accidents that occurred before June 3, 2019, amounts of HST payable for taxable attendant care services were to be paid as part of the attendant care benefit, in addition to the hourly rate set by the Guideline, but only to the extent of $6,000 a month and $1,000.000 in total.

The appellant insured appealed to the Court. The appellant argued that he was entitled to $6,000 per month and $1,000,000 total for his attendant care services, plus the amount of HST owing for those services.

issues:

Was HST paid or payable on the goods and services supplied to the appellant for his attendant care included in the maximum amounts of attendant care benefits payable by the respondent?

holding:

Appeal dismissed.

reasoning:

No.

The appellant claimed the wording in s. 19 of the SABS was ambiguous and did not explicitly refer to HST. He further claimed that, as the SABS was a consumer protection regulation, the ambiguity should have been resolved in his favour such that HST payable on attendant care benefits should not have been included in calculating the maximum amount payable.

A provision is not “ambiguous” simply because it is difficult to interpret or causes confusion. To be “ambiguous”, there must be two or more plausible interpretations. In deciding whether the words in s. 19 were subject to two plausible interpretations and therefore ambiguous, the words regarding payment for attendant care benefits must be read in the context of the SABS regulation as a whole.

Sections 14 and 19 together established the statutory basis upon which an insurer was obliged to pay for an insured’s attendant care.

Section 14 imposed liability on the insurer to pay “attendant care benefits under section 19” to an insured who sustained a non-minor impairment as a result of an accident. Section 19(1) specified that the “attendant care benefits under section 19” are the “reasonable and necessary expenses” incurred by or on behalf of an insured, for services provided by an aide or attendant, a long-term care facility or a chronic care hospital. Section 19(3) imposed $6,000 and $1,000,000 limits to those “attendant care benefits.”

The phrase “attendant care benefits” must have been given the same meaning when used in s. 14, imposing an obligation on the insured to pay them, and in s. 19, specifying that they consisted only of “reasonable and necessary expenses” and were subject to maximum amounts.

The appellant’s argument was premised on the faulty proposition that the identical term “attendant care benefits” when used in s. 14 included amounts paid in respect of HST (that is, requiring the insurer to pay the HST amounts for attendant care), but did not include amounts paid in respect of HST when calculating the maximum benefits payable in s. 19(3).

The same words in ss. 14 and 19 could not be interpreted to require the insurer to pay HST for attendant care services but at the same time, exclude HST for the purpose of establishing the maximum amount payable by the insurer for those same attendant care benefits based on the identical wording. Treating amounts required to be paid for attendant care benefits as inclusive of HST but excluding HST from the maximum amount payable for attendant care benefits would have been contrary to the principle of statutory interpretation to give, “the same words the same meaning throughout a statute.”

Accordingly, the words in s. 19 were not reasonably capable of supporting more than one meaning. The only meaning supportable was the one advanced by the respondent insurer and the intervenor Insurance Bureau of Canada: that HST was an “attendant care benefit” within the meaning of ss. 14 and 19, as it was a “reasonable and necessary expense,” and as with any other reasonable and necessary expense comprising attendant care benefits it was included in the total that was subject to the $6,000 and $1,000,000 maximum limits specified in s. 19(3).

The Divisional Court therefore correctly determined that HST payable for attendant care services was an “attendant care benefit” which was subject to the maximum limits in s. 19.


Barker v Barker, 2022 ONCA 567

[Hourigan, Trotter and Zarnett JJ.A.]

Counsel:

S. Blake and A. Christian-Brown, for the appellant her Majesty the Queen in Right of Ontario

F. McLaughlin, S. Rogers, M.S. Bridges and B. Greenaway, for the appellants E.T.B. and G.J.M.

J. P. Rochon, P.R. Jervis, G. Nayerahmadi, M.W. Taylor and K. Bédard, for the respondents

Keywords: Breach of Fiduciary Duty, Torts, Assault, Battery, and Intentional Infliction of Emotional Distress, Crown Liability, Crown Immunity, Breach of Statutory Duty, Statutory Interpretation, Damages, General and Aggravated Damages, Punitive Damages, Pre-judgement Interest, Defences, Ex Turpi Causa, Civil Procedure, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, s 24, s 16, Mental Health Act, R.S.O. 1970, c. 269, Mental Hospitals Act, R.S.O. 1960, c. 236; R.S.O. 1970, c. 270; and R.S.O. 1980, c. 263, Class Proceedings Act, 1992, S.O. 1992, c. 6, s 28(1), Criminal Code, s. 672.11, Courts of Justice Act, R.S.O. 1990, c. C.43, s 128(3), s 130(1), Crown Liability and Proceedings Act, 2019, S.O. 2019, c. 7, Sched. 17, s 11, Fenton v North York Hydro Electric Commission (1996), 29 OR (3d) 481, Bell ExpressVu Limited Partnership v Rex, 2002 SCC 42, Rooney v ArcelorMittal S.A, 2016 ONCA 630, Andrews v Grand & Toy Alberta Ltd, [1978] 2 SCR 229, Joanisse v Barker (2003), 38 CPC, Barker v Barker, 2018 ONCA 255, Alberta v Elder Advocates of Alberta Society, 2011 SCC 24, Hodgkinson v Simms, [1994] 3 SCR 377, Galambos v Perez, 2009 SCC 48, Dolmage v Ontario, 2010 ONSC 1726, M(K) v M(H), [1992] 3 SCR 6, Guerin v The Queen, [1984] 2 SCR 335, (Attorney General) v Thouin, 2017 SCC 46, Kenny v Lockwood, [1932] OR 141 (CA), McInerney v MacDonald, [1992] 2 SCR 138, R v Sheppard, 2002 SCC 26, Champoux v Jefremova, 2021 ONCA 92, Lac Minerals Ltd v International Corona Resources Ltd, [1989] 2 SCR 574, Royal Bank of Canada v Fogler Rubinoff (1991), 5 OR (3d) 734 (CA), Inglis v Beaty (1878), 2 OAR 453 (CA), Prinzo v Baycrest Centre for Geriatric Care (2002), 60 OR (3d) 474 (CA), Collins v Wilcock, [1984] 3 All ER 374 (UK QB), Hurley v Moore (1993), 107 DLR, Fawley v Moslenko, 2017 MBCA 47, Sirois v Gustafson, 2002 SKQB 452, Reibl v Hughes, [1980] 2 SCR 880, McLean v McLean, 2019 SKCA 15, Warman v Grosvenor (2008), 92 OR (3d) 663 (SC), Dunne v Gauthier, 2000 BCSC 1603, Bruce v Dyer, [1966] 2 OR 705 (HC), Rougemount Capital Inc v Computer Associates International Inc, 2016 ONCA 847, McMaster v The Queen, 2009 FC 937, B(V) v Carins (2003), 65 OR (3d) 343 (SC), Demers v Everson, 2013 ONSC 6134, Weafer (Litigation Guardian of) v Vancouver Coastal Health Authority, 2007 BCSC 481, Nagy v Canada, 2006 ABCA 227, Plester v Wawanesa Mutual Insurance Co (2006), 213 OAC 241 (CA), McIntyre v Grigg (2006), 83 OR (3d) 161, Hill v Church of Scientology of Toronto, [1995] 2 SCR 1130, SY v FGC (1996), 26 BCLR (3d) 155 (CA), Cinar Corporation v Robinson, 2013 SCC 73, Honda Canada Inc v Keays, 2008 SCC 39, British Columbia v Zastowny, 2008 SCC 4, Dhingra v Dhingra Estate, 2012 ONCA 261, Randhawa v 420413 BC Ltd, 2009 BCCA 602, Borland v Muttersbach (1985), 53 OR (2d) 129 (CA), Prinzo v Baycrest Centre for Geriatric Care (2002), 60 OR (3d) 474 (CA), Non-Marine Underwriters, Lloyd’s of London v Scalera, 2000 SCC 24, Sirois v Gustafson, 2002 SKQB 452, Reibl v Hughes, [1980] 2 SCR 880, McLean v McLean, 2019 SKCA 15, [2019] 5 WWR 67, Warman v Grosvenor (2008), 92 OR (3d) 663 (SC), Dunne v Gauthier, 2000 BCSC 1603, Bruce v Dyer, [1966] 2 OR 705 (HC)

facts:

28 respondents sued Oak Ridge, a maximum-security psychiatric facility, the Government of Ontario and two doctors who served as Clinical Directors of the Social Therapy Unit (“STU”), Dr. B and Dr. M (the “Physicians”) for events that took place between 1966 and 1983. The 28 respondents were involuntarily admitted to Oak Ridge and held in the STU. They alleged that they were subjected to inhumane treatment, including psychological and physical abuse, as a result of three STU programs: 1) Defence Disruptive Therapy (“DDT”) where patients were subjected to mind-altering drugs; 2) The Total Encounter Capsule (“Capsule”) where patients were placed naked in cells under harsh conditions for many days; and 3) The Motivation, Attitude, Participation Program (“MAPP”) employing a physical disciplinary program. The respondents sought damages for breach of fiduciary duty, assault, battery, and intentional infliction of emotional distress.

In 2018, the case was set down for trial. The trial was scheduled in two parts, the first covering liability, causation, and defences, including limitation period issues, and the second part covering the quantification of damages.

The trial judge found that Ontario and the Physicians (the “appellants”), in various combinations, were liable to each of the respondents “for having caused them varying degrees of harm by breaching their fiduciary duties and by perpetrating assault and battery.”

The trial judge held the appellants were liable for breach of fiduciary duty, including subjecting the respondents to harmful procedures without a reasonable prospect of benefit and without informed consent. The trial judge found that all STU programs amounted to a non-consensual, non-trivial invasion of the respondents’ bodily integrity, or in other words, battery.

The trial judge assessed each respondent’s damages claim separately. In doing so, he declined to apply the damages cap set out in Andrews v. Grand & Toy Alberta Ltd. The damages awarded ranged, from under $10,000 to over $2 million, depending on the particular facts. The trial judge awarded punitive damages to some of the respondents. He applied the ex turpi causa doctrine to preclude damages for some past lost income claims. He awarded pre-judgment interest on the general damages awards but declined to award any pre-judgment interest on past income losses.

The appellants appealed on liability and damages. The respondents cross-appealed. The appellants challenged the trial judge’s findings on breach of fiduciary duty, battery, and assault. They also raised Crown immunity issues and limitation period issues. They submitted that the trial judge made factual and legal errors and challenged the sufficiency of his reasons. They also challenged his damages awards. The respondents, in turn, also raised a number of damages issues.

issues:

(1) Did the trial judge err in holding that appellants were liable for breach of fiduciary duty?

(2) Did the trial judge err in holding that the Physicians were liable for the tort of battery and assault?

(3) Did the trial judge err in concluding that the respondent’s claims were not statute-barred?

(4) Did the trial judge make palpable and overriding factual errors in his assessment of four respondents’ claim?

(5) Did the trial judge err in assessing damages?

holding:

Appeal allowed in part. Cross-appeal allowed in part.

reasoning:

In the result, the Court upheld the trial judge’s conclusion that the appellants are liable for breach of fiduciary duty to all respondents except Mr. K. The Court upheld the trial judge’s finding of battery, but only in relation to specified respondents. The Court reversed the trial judge’s findings on assault. The Court set aside the judgment in favour of Mr. K and modified the judgments in favour of Mr. P, Mr. McC, and Mr. LP. For the other respondents, the Court upheld the damages awards as the variations made to the bases of liability do not affect their damages entitlements and the awards were free of reversible error. The Court also varied the trial judge’s treatment of pre-judgment interest.

(1) Did the trial judge err in holding that appellants were liable for breach of fiduciary duty?

No.

A. Ontario owed fiduciary duties to the respondents.

Ontario argued that the trial judge had erred in finding it owed a fiduciary because: 1) the finding was based on a misinterpretation of the Mental Health Act (“MHA”); 2) the trial judge failed to find that to impose a fiduciary duty would put Ontario in a conflict of interest, given its public interest and other statutory duties; and 3) the trial judge relied on the vulnerability of the respondents that pre-existed their relationship with Ontario at Oak Ridge, when the issue was whether there was vulnerability that arose from that relationship.

Ontario argued that the trial judge was wrong to conclude that the MHA imposed any duty at all on Oak Ridge to the respondents. The Court rejected this argument. Ontario’s argument that the MHA provides only an authorization to observe, care for, and treat patients, but no duty to do so, sailed against settled law.

Ontario argued that the trial judge conducted his own flawed analysis of the MHA from which he drew the same flawed conclusion as Perez did about the statutory duty imposed by the MHA. The Court disagreed that each provision should have been examined in isolation. The Court held that the Act is read together and as a whole and determined that the statutory duty that was imposed on a psychiatric facility in the MHA – of observation, care, and treatment of persons suffering from mental disorders – is the type of “imposition of responsibility by statute” that constitutes an undertaking by the psychiatric facility to act in the best interests of the beneficiaries of the duty (the patients).

Ontario argued that a fiduciary duty would put it in a conflict of interest. It argued that the Court’s decision in Phaneuf showed how that consideration should have led to a finding that there was no fiduciary duty. In Phaneuf, the plaintiff was ordered assessed at a psychiatric facility pursuant the Criminal Code and detained in that facility or a detention centre during the term of the assessment order. The trial judge distinguished Phaneuf and found that no conflict existed between the fiduciary duty to the respondents and Ontario’s other duties. The Court saw no error in the trial judge’s analysis. Where there is a finding of a fiduciary duty, its existence cannot be negated by concerns about conflicts of interest that depend on overstating the reach of the fiduciary duty or the reach of the government’s other duties.

Ontario also argued that the trial judge found a fiduciary duty solely on the basis of the respondents’ vulnerability and on the basis of vulnerability that pre-existed their relationship with Ontario at Oak Ridge. It argued that some of the respondents had pre-existing vulnerabilities that could not give rise to a fiduciary duty. The Court rejected this argument. The trial judge did not find a fiduciary duty solely by considering vulnerability and could not be faulted for having considered the respondents’ pre-existing vulnerabilities, as they were relevant to understanding the vulnerability that would arise from the relationship with Ontario at Oak Ridge.

Ontario also argued that it was immune from a breach of fiduciary duty claim. In Guerin, the Supreme Court restored a damages award against the Crown. Wilson J. held that the Crown was, with respect to the uses to which reserve land could be put, subject to “a fiduciary obligation to the Indian Bands … and that s. 18 [of the Indian Act] is a statutory acknowledgment of that obligation”. In Guerin, the legislation contained no express waiver of Crown immunity. The MHA imposed a duty on Ontario, which constituted an undertaking to act in the best interests of the respondents from which a fiduciary obligation was derived.

B. The Physicians owed and breached fiduciary duties to the respondents

The Physicians raised three key issues concerning the trial judge’s finding that they owed and breached a fiduciary duty to the respondents: (i) the trial judge erred in finding that the Physicians were in a fiduciary relationship with the respondents because he did not address whether the Physicians undertook to act in the best interests of the respondents; (ii) the trial judge did not address the defence of whether the Physicians’ care met the applicable standard at the time; and (iii) the trial judge erred by conflating ethical duties with fiduciary duties. The Court rejected these arguments.

First, the requirements for an undertaking were met: Physicians were per se fiduciaries. The trial judge considered the relationship to be per se a fiduciary relationship. In the Court’s view, the trial judge was correct to proceed on that basis. A doctor-patient relationship has been described by the Court as one of “trust and confidence” and as one to which the principles applicable to cases of breach of a confidential or fiduciary relationship extend.

Second, the reasons of the trial judge were sufficient: the standard of care argument was addressed. The trial judge addressed, and rejected, the proposition that the Physicians had followed the applicable standard of care.

Third, there was no conflation of ethical and fiduciary duties or failure to resolve conflicting evidence regarding ethical duties. Although a profession’s adoption of an ethical rule did not automatically make that rule a fiduciary obligation, it was not correct to say that because something was an ethical obligation it cannot be a fiduciary one.

C. Lack of informed consent was relevant to breach of fiduciary duties

The appellants argued that the trial judge erroneously imposed a requirement for informed consent. The trial judge held that informed consent was necessary to the treatments administered and that consent was not properly obtained. There was no error in the trial judge’s reliance on a lack of informed consent. As between a fiduciary and beneficiary, the only type of effective consent was informed consent.

(2) Did the trial judge err in holding that the Physicians were liable for the tort of battery and assault?

Yes

The Respondents asserted that the Physicians committed several intentional torts: battery, assault, and the intentional infliction of emotional distress. The trial judge held that the respondents failed to establish liability for intentional infliction of emotional distress, but found the Physicians liable in battery and assault.

A. Battery

The Court reiterated the leading Canadian case on battery, and the requirement of direct interference with the person. Direct interference was defined as the immediate consequences of a force set in motion by an act of the defendant: Scalera, para 8. The Court noted that directness is an essential requirement for liability. But, not every physical touching will constitute battery: the interference must be “harmful or offensive”, or contact that is “nontrivial”: Scalera, at para. 16.

The trial judge held that although consent could negate the tort, any semblance of consent on the part of the respondents was inauthentic in the coercive environment of Oak Ridge.

The Physicians submitted that the trial judge failed to properly apply the elements of battery to the evidence in that the evidence did not permit a finding that either of them had direct contact with the respondents. The respondents submitted that the trial judge’s conclusions were supportable on the extended definition from Scalera.

The Court held that the requirements of battery were not established except for the respondents to whom the Physicians directly administered DDT drugs. The Court stated that the trial judge’s analysis was correct insofar as he found that the STU programs constituted a non-trivial invasion of the respondents’ bodily integrity. However, with respect to the Capsule and MAPP, he made no specific finding that the Physicians had direct contact with any of the respondents. Nor did he find that interference with the respondents’ bodily integrity was the “immediate consequence of a force set in motion” by either of them. While he also approached battery based on DDT treatment broadly, he did, in the course of his reasons, refer to evidence indicating that the Physicians directly administered DDT drugs to nine of the respondents.

With the exception of nine respondents who received DDT drugs, it could not be said that anything done directly by the Physicians was the immediate cause of the harm that befell the respondents. The respondents’ submission that the violation of the other respondents’ bodily integrity was the “immediate consequence of a force set in motion by an act of the defendant[s]” failed on the modifier “immediate”. The Court concluded that the requirements of battery were not established for either the Capsule or MAPP.

With respect to the DDT program, evidence of direct, non-trivial physical contact was established. On the issue of consent, the Court concluded that even on a standard lower than informed consent, consent to “participate” in the STU programs, including DDT treatment, was not possible in the coercive environment of the STU. The STU programs were, as noted by the trial judge, “degrading”, “inhumane” and an “anomaly done to a number of individuals in a single institution.”

B. Assault

The trial judge noted that the respondents identified four “varieties of assault”: (a) threat of pharmacological restraints; (b) threat of cuffs and other physical restraints; (c) threat of being coerced into taking DDT drugs; and (d) threat of being placed in MAPP or solitary confinement. The trial judge had focused his analysis on (d).

The Court emphasized that imminence is a critical component of the tort of assault. In finding that the tort had been established, the trial judge did not properly apply the immediacy requirement.

The respondents’ stories proved that there was a fear of future harm, but not an apprehension of imminent harm and concluded that this was insufficient to establish the tort of assault.

(3) Did the trial judge err in concluding that the respondent’s claims were not statute- barred?

No.

The trial judge held that when the claim was issued, there was no limitation period applicable to equitable claims. He held that the commencement of the action in 2000 as a proposed class action had the effect of tolling the limitation period for putative class members whose individual claims were continued in 2006 after certification of the class action was refused. Subsection 16(1)(h.1) of the Limitations Act, 2002 provides that in a proceeding based on an assault, there is no limitation period if, at the time of the assault, the person with the claim was a minor or was financially, emotionally, physically, or otherwise dependent on the person against whom the claim is made. The trial judge also rejected the application of the six-month limitation periods contained in the historic MHA and Mental Hospitals Act on the basis that they were ambiguous.

The appellants submitted that given that the trial judge found that they treated the respondents pursuant to the MHA and the Mental Hospitals Act, he erred in law by failing to apply the six-month limitation periods contained in those statutes.
The Court held that the appellants could not rely on historic limitation periods. The Court did not accept the appellants’ interpretation of the special historic limitation periods in the MHA and the Mental Hospitals Act. It was contrary to the modern principle of statutory interpretation, which holds that the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme, object and intention of the Act.

Given the Court’s conclusion that the appellants could not rely on the historic limitation periods, it was unnecessary to address the appellants’ submission that the trial judge erred in finding that the claims were not statute barred by virtue of s 16(1)(h.2) of the Limitations Act, 2002.

(4) Did the trial judge make palpable and overriding factual errors in his assessment of four respondents’ claim?

Yes.

The Physicians submitted that the trial judge made palpable and overriding factual errors in his assessment of four respondents’ claims. The Court gave effect to this ground of appeal.

The trial judge found that S.K. suffered short-term pain from the fear of being placed into MAPP. There was no documentary evidence that S.K. had ever been in any of the three STU programs. The Court agreed with the Physicians that the trial judge committed a palpable and overriding error in awarding damages to this respondent. Given his finding that S.K. was never subjected to any of the STU programs, the trial judge ought to have dismissed the claim because there was no causal connection.

The trial judge also committed a palpable and overriding error in finding Dr. B liable for having caused D.L. moderate long-term harm and substantial short-term harm. Although Dr. B assessed and diagnosed D.L during the 60-day period in 1977, the evidentiary record was clear that Dr. B was not involved in the subsequent decisions between 1978 and 1982 to admit D.L. to MAPP.

The trial judge found the appellants liable for having caused M.P. substantial long-term harm and moderate short-term harm. According to the trial judge, when M.P was discharged in 1972, he emerged as a rapist and mass murderer. The trial judge found that the DDT treatment caused this transformation. The trial judge committed a palpable and overriding error in finding that the DDT treatment during the first period caused M.P to commit violent crimes after his release. The evidence was that M.P had engaged in dangerous, sexualized crimes before his admission to Oak Ridge.

The trial judge made palpable and overriding errors in finding the Physicians liable for having caused D.M. moderate long-term and short-term harm. The trial judge found that Dr. M should not have authorized D.M.’s Alcohol-Ritalin treatments, given a background of alcohol abuse. The evidence showed that it was not Dr. M who authorized D.M.’s second Alcohol-Ritalin treatment in March 1978. With respect to Dr. B, there was no evidence that he was involved in any of D.M.’s experiences in the STU programs.

There were no other palpable and overriding errors.

(5) Did the trial judge err in assessing damages?

No, with the exception of pre-judgment interest.

Standard of review

In concluding that the damages awards should be upheld, the Court was guided by Rougemount Capital Inc. v. Computer Associates International Inc: Damages awards attract considerable deference. It is common ground that the Court of Appeal was not entitled to substitute its own view of a proper award unless it could be shown that the trial judge had made an error of principle of law, or misapprehended the evidence, or it could be shown there was no evidence on which the trial judge could have reached his or her conclusion, or the trial judge failed to consider relevant factors in the assessment of damages, or considered irrelevant factors, or otherwise, in the result, made “a palpably incorrect” or “wholly erroneous” assessment of the damages. Where one or more of these conditions are met, however, the appellate court is obliged to interfere.

General and aggravated damages

The Court rejected the respondent’s submissions that the trial judge erred in failing to give effect to his findings about the harm suffered by these respondents in assessing their damages.

The Court agreed with the trial judge’s approach, which recognized that the assessment of damages is a comparative exercise. In his search for “horizontal comparisons” with the type of suffering experienced by the respondents, the trial judge considered the comparisons proposed by the parties. The trial judge explained how and the extent to which various cases were comparable to the harm suffered by the individual respondents. The Court held it was open to the trial judge to use these cases as comparators in assessing damages.

The trial judge did not err in failing to assess compensatory damages with regard to the aggravating aspects of the Physicians’ conduct. The trial judge properly identified the principles to be applied in determining whether aggravated damages were warranted. He recognized that aggravated damages are compensatory in nature and that they are awarded “when the reprehensible or outrageous nature of the defendant’s conduct causes a loss of dignity, humiliation, additional psychological injury, or harm to the plaintiff’s feelings”. The trial judge’s findings about the Physicians’ conduct were entitled to deference.

The trial judge explained that the sui generis nature of the STU programs, which ended in the early 1980s and have never been repeated, do not compare with the ubiquitous nature of motor vehicle accidents, however catastrophic the results may be. The trial judge gave two further reasons: (1) there was no concern about double recovery since the claim for general damages did not overlap with any cost of care awards and (2) appellate courts have not applied the Andrews cap in cases involving intentional wrongdoing or breach of fiduciary duty. The Court agreed with the trial judge’s conclusion. The Court rejected the submission that the amounts awarded to the respondents were grossly disproportionate. The trial judge was cautious in his award of general damages exceeding the cap, awarding such damages to only 4 of the 28 respondents.

Punitive damages

The Court declined to interfere with the trial judge’s decision to award punitive damages to some of the respondents. For the respondents who were not awarded punitive damages, the Court indicated that the trial judge’s approach was rational.

The court declined to interfere with the quantum of punitive damages and rejected the submission that the awards made were disproportionately high. The trial judge approached all aspects of his damage awards, including punitive damages, on an individual basis.

Ex turpi causa and loss of income claims

The Court rejected the respondents’ submission that the trial judge erred in applying the ex turpi causa doctrine to preclude five respondents from recovering damages for income loss while they were institutionalized pursuant to an NGRI verdict (not guilty by reason of insanity – the terminology used in that era) and under the jurisdiction of the Ontario Review Board (“ORB”).
The Court looked to Zastowny to take away three key points about the ex turpi doctrine. First, the doctrine is not limited to cases of criminal conduct but applies as well to “wrongful conduct.” The appellants argued that the conduct leading to the respondents’ institutionalization was wrongful. On this basis, the Court accepted that there was no principled reason why the doctrine should not apply. Second, the application of the ex turpi causa doctrine is justified to preserve the integrity of the legal system. Allowing income loss claims for extra time spent in a custodial institution would be inconsistent with the ORB’s exclusive jurisdiction over the respondents and would run the risk of creating an inconsistency in the law. Third, the Zastowny reasoning about not second-guessing Parole Board decisions applies equally to ORB decisions. The Court did not accept that the decision in Dhingra bars the ex turpi causa doctrine from applying to NGRI individuals due to very different policy concerns considered in Dhingra form the case at bar.

Pre-judgment interest

The Court allowed the respondents’ cross-appeal from the trial judge’s refusal to award pre-judgment interest on awards for past income loss. The Court held that denial of pre-judgment interest on past income losses was based on the trial judge’s erroneous interpretation of the experts’ damages reports.

Contrary to the trial judge’s finding, the parties’ experts did not incorporate the time value of money into their calculations. Therefore, the trial judge’s decision not to award pre-judgment interest on past loss of income awards was not entitled to deference. The Court ordered that pre-judgment interest be awarded on past income losses at a rate equal to half the rate otherwise ordered by the trial judge, which was 1.3 percent.


SHORT CIVIL DECISIONS

Efthymiadis v G4S Secure Solutions (Canada) Ltd, 2022 ONCA 554

[Benotto, Zarnett and Thorburn JJ.A.]

Counsel:

I. B. Andriessen and M. H. Shin, for the moving parties G4S Secure Solutions (Canada) Ltd., T.B and R.S

E. E and G. E acting in person

Keywords: Administrative Law, Human Rights Tribunal, Civil Procedure, Appeals, Jurisdiction, Orders, Interlocutory or Final, Paulpillai Estate v Yusuf, 2020 ONCA 655

Golden Oaks Enterprises Inc v Scott, 2022 ONCA 568

[Strathy C.J.O., Roberts and Sossin JJ.A.]

Counsel:

A. Tomkins, for the appellants/respondents by way of cross-appeal

H. Chaiton and D. Bourassa, for the respondent/appellant by way of cross-appeal

Keywords: Bankruptcy and Insolvency, Civil Procedure, Costs, Boucher v Public Accountants Council for the Province of Ontario (2004), 71 OR (3d) 291 (CA)


The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.



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