4. Cheung v. Samra, 2018 ONCA 923 (Watt, Miller and Nordheimer JJ.A.), November 19, 2018 1. Imeson v. Maryvale (Maryvale Adolescent and Family Services), 2018 ONCA 888 (Epstein, van Rensburg and Brown JJ.A.), November 7, 2018
This appeal concerned the treatment of “participant expert” evidence by a trial judge in a civil jury trial and demonstrates the importance of evaluating and limiting such evidence to ensure the participant expert does not exceed his or her proper role.
The appellant, Maryvale Adolescent and Family Services, was found vicariously liable for sexual assaults alleged to have been committed against the respondent, Jesse Imeson, by its former employee. The record before the jury included the summarized notes and opinion evidence of a mental health clinician who treated Imeson later in life (in a correctional institution), and who was permitted by the trial judge to give evidence at trial as a participant expert. The proper role of a participant expert was set out in Westerhof v. Gee Estate, 2015 ONCA 206, including that such an expert is exempted from the requirement to deliver a report compliant with Rule 53.03 of the Rules of Civil Procedure.
The Court of Appeal held that the trial judge erred in admitting the participant expert’s opinion evidence on the issues of liability and causation.
The trial judge noted that the role of a participant expert is restricted, and she gave limiting/clarifying instructions accordingly to the jury. However, she permitted the mental health clinician to exceed his proper role by allowing him to testify about information contained in the summaries of his notes, and in admitting those into evidence, without first carefully examining what opinions were included and the purpose for which it was proposed that the jury consider such opinions. Although the mental health clinician provided therapy to Iveson as an adult, his opinion evidence went to the issues of whether the alleged sexual assaults in Iveson’s childhood actually occurred and whether Iveson suffered any harm as a result. The causal link that the mental health clinician would draw was outside of his role as a participant expert: his role as therapist included accepting Iveson’s accounts of historical trauma, not assessing whether they were true. His observations about survivors of childhood sexual abuse were general, and not based on his observation or treatment of Iveson.
The Court of Appeal further held that the mental health clinician’s opinion evidence on the issues of liability and causation ought to have been excluded, in any event, because the prejudicial effect of such evidence outweighed its probative value. Significantly, the contents of the notes amounted to so-called “oath helping” for the plaintiff, who was in a credibility contest with the former employee as to whether the alleged sexual assaults took place. The mental health clinician recorded the plaintiff’s version of historical events as if he was to be believed, which, even with a “hearsay caution” to the jury, risked being read as corroboration.
The court accordingly allowed the appeal and directed a new trial concerning the alleged assaults.
2. Williams v. Richard, 2018 ONCA 889 (Hourigan, Miller and Trotter JJ.A.), November 7, 2018
This decision of the Court of Appeal may indicate that it will be difficult to have duty of care issues in claims of social host liability determined by way of summary judgment.
Mark Williams and Jake Richard were colleagues and friends who regularly got together for drinks after work. One evening, after drinking heavily with Richard at Richard’s mother’s house, Williams drove home, picked up his three children and their babysitter, and dropped off the sitter. On his way back home, he was involved in a car accident. Williams was killed, and his children injured.
Williams’ children and their mother commenced two actions, one for personal injuries sustained by the children, and the other for damages pursuant to the Family Law Act. Both actions were based on the claim that Richard and his mother breached their duty of care as social hosts.
On the hosts’ motion for summary judgment, the motion judge dismissed both claims. Relying on the decisions in Childs v. Desormeaux, 2006 SCC 18 and John v. Flynn, 2001 CanLII 2985 (ON CA), she concluded that the requisite duty of care had not been established; and that even if it were established, any such duty would have ended once Williams arrived home to pick up his children and their babysitter.
The Court of Appeal allowed the plaintiffs’ appeal, holding that the motion judge erred in her duty of care analysis regarding foreseeability and proximity. A trial was necessary.
Writing for the court, Hourigan J.A. explained that a duty of care analysis in the context of social host liability should consist of three elements: (i) whether the injury was reasonably foreseeable, (ii) whether there was sufficient proximity such that there was a duty to act, and (iii) whether the duty of care is negated by policy considerations. If the first two elements are satisfied, a prima facie duty of care has been established.
Here, with respect to the foreseeability analysis, there was enough conflicting evidence about whether the risk was reasonably foreseeable to send the action to trial. There was conflicting evidence as to whether the mother even knew that Williams would be driving while intoxicated. Regarding proximity, this case was distinguishable from a large social gathering because the two men were engaging in a developed pattern of behaviour, and even apparently had a “pact” between them that one would try to prevent the other from driving with children while drunk. Further, the motion judge failed to consider that a host who continues to serve alcohol to a visibly inebriated person, knowing they will be driving, will owe a prima facie duty of care.
Hourigan J.A. found that the motion judge erred in her reliance on John, above, noting that there is no rule that a duty of care ends when a drunk driver arrives home. The facts of John were not of general application – it was really a case of duties owed in the employee-employer relationship, distinguishable from this case.
Hourigan J.A. accordingly concluded that the motion judge’s duty of care analysis was flawed and incomplete. There was conflicting evidence on many of the key issues, and a trial was required to determine whether Richard or his mother owed a prima facie duty of care to Williams and his children.
The Court of Appeal declined to consider whether any residual policy considerations would negative a prima facie duty of care, noting that such considerations are best addressed after a duty of care has been found to exist. In this case, that would require the machinery of a trial, suggesting that such policy issues may not be amenable to summary judgment.
3. CM Callow Inc. v. Zollinger, 2018 ONCA 896 (Lauwers, Huscroft and Trotter JJ.A.), November 9, 2018
In this elucidation and application of the developing law of the duty of good faith and honest performance of an agreement, the Court of Appeal clarified that a failure to act honourably does not necessarily amount to a breach of the duty of honest performance. Leading the plaintiff to believe that a maintenance services contract would likely be renewed, and even accepting “freebie” services in the meantime, did not obviate a clear contractual right to terminate the agreement on short notice.
The appellants, a group a condominium corporations, entered into two two-year maintenance contracts with the plaintiff maintenance services company, one covering summer maintenance work and the other covering winter maintenance work.
The winter contract contained a provision allowing for early termination by the condo corporations on ten days’ notice. In the spring, the condo corporations decided that they would terminate the winter contract, but they purposely did not provide notice of termination until September of that year. They did not want to provide notice of that intended termination while summer maintenance services were being provided. Indeed, during the summer, the plaintiff, by its own initiative, performed “freebie” landscaping work in hopes that this would act as an incentive for the condo corporations to renew the contracts when their terms expired. Members of the committee responsible for handling the contracts were aware of these services and knew that the plaintiff was under the impression that the contracts were likely to be renewed.
The trial judge concluded that the condo corporations had acted in bad faith and thus breached their duty of honest contractual performance in withholding advice that they intended to terminate the winter contract, and in continuing to represent to the plaintiff that the winter contract was not in danger of non-renewal. The trial judge held that meeting the minimum standard of honesty would have required the condo corporations to address the alleged performance issues with the plaintiff, provide prompt notice, or refrain from any representations in advance of the notice period.
The Court of Appeal found that the trial judge erred, and held that the condo corporations’ actions did not rise to the high level required to establish a breach of the duty of honest performance. The trial judge’s findings regarding the minimum standard of honesty had the effect of substantially modifying the condo corporations’ contractual right to terminate, going beyond what the duty of honest performance requires or permits.
As the Supreme Court of Canada explained in Bhasin v. Hrynew, 2014 SCC 71, the duty of honest performance is not to be applied so as to undermine longstanding contract law principles and create commercial uncertainty. The Court of Appeal noted that the condo corporations were free to terminate the winter contract with the plaintiff provided only that they informed it of their intention to do so and gave the required notice. This is all the plaintiff bargained for, and all it was entitled to receive.
The appeal was allowed.
4. Cheung v. Samra, 2018 ONCA 923 (Watt, Miller and Nordheimer JJ.A.), November 19, 2018
This motion in the Court of Appeal arose out of a medical negligence action concerning obstetrical care. Following a trial on the issues of standard of care and causation, the jury found in favour of the plaintiffs as to a breach of the standard of care, but the answers the jury gave on causation were, as the trial judge found in detailed reasons, “fatally flawed.” The defendants requested that judgment not be entered in accordance with the jury’s verdict pursuant to Rule 52.08 of the Rules of Civil Procedure. The trial judge decided not to enter judgment, concluding that a new trial was necessary.
The plaintiffs appealed, and the defendants moved in the Court of Appeal to quash the plaintiffs’ appeal on the basis that the order in issue was interlocutory and thus only appealable to the Divisional Court with leave, pursuant to s. 19(1)(b) of the Courts of Justice Act. The plaintiffs argued that the order was final, and thus appealable to the Court of Appeal as of right pursuant to s. 6(1)(b) of the Courts of Justice Act.
A three judge panel of the Court of Appeal held that the order was interlocutory, quashed the appeal, and transferred the matter to the Divisional Court for purposes of permitting the plaintiffs to bring a motion for leave to appeal.
The court explained that the impugned order did not decide any substantive right between the parties. Rather, it directed that a new trial be held where those substantive rights would be determined. This conclusion was consistent with a number of other decisions where mistrials had been declared – and consequently a new trial was necessary – and which were held to be interlocutory.
The plaintiffs resisted the comparison to cases where mistrials were declared on the basis that, in this case, the trial was completed and the jury’s verdict received. They asserted that, unlike the mistrial cases, in this case the trial was finally adjudicated and they were being deprived of their right to a judgment in accordance with the jury’s verdict as well as their right to a review of that decision by the Court of Appeal.
The court rejected this submission for two reasons. First, the plaintiffs were not being deprived of their right of review. The only issue to be determined was which court was the appropriate forum for that review. Thus, it was not the “right” of appeal but the forum for the appeal process that was at issue. Second, whether the order was final or interlocutory turned on the order that was granted, not the order that might have been granted. The fact that, had the trial judge reached the opposite conclusion the resulting order would have been final, did not dictate that the order given was final.
5. The Walt Disney Company v. American International Reinsurance Company, Ltd., 2018 ONCA 948 (Strathy C.J.O., Benotto and Roberts JJ.A.), November 23, 2018
This rare appeal in the arbitration context concerned the interpretation of an arbitration clause. On invocation of the arbitration clause, which procedural rules would apply? Those in effect in the jurisdiction of the seat of the arbitration (here, Ontario), or those provided by the Arbitration Act referred to in the contract (here, the UK)? The Court of Appeal held that the Ontario rules did not apply, and that the preliminary, procedural question the parties had was required to be put to the arbitrators appointed pursuant to the UK Arbitration Act.
The arbitration clause at issue provided that the insured, the Walt Disney Company, could select the venue and procedural laws of Bermuda or any one of London, Toronto, or Vancouver under the English Arbitration Act of 1996, which was incorporated by reference into the clause.
The application judge dismissed Disney’s request for a declaration that it had properly commenced an arbitration between the parties by a certain written demand.
Disney argued that the parties incorporated the UK Arbitration Act by reference, but that the procedural provisions of the UK Act were excluded for arbitrations outside the United Kingdom. Disney argued that the UNCITRAL Rules set out in Ontario’s International Commercial Arbitration Act should apply.
The Court of Appeal agreed with the disposition of the application judge.
In a succinct endorsement, the court held that the plain wording of the contract required that where Toronto was the seat chosen for arbitration, the arbitration was still to be conducted in accordance with the procedural laws set out in the UK Arbitration Act. It would not make commercial sense if different procedural laws would apply depending on whether the arbitration took place in Toronto or Vancouver. Further, it made no sense that the parties would agree to have an Ontario court apply specific provisions of the UK Arbitration Act.
The court declined to determine whether the arbitration had been properly commenced, leaving that question for the arbitrators.
The appeal was dismissed.
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