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S.H. v. D.H., 2019 ONCA 454 (Pepall, Hourigan and Fairburn JJ.A.), May 31, 2019
Donovan v. Sherman Estate, 2019 ONCA 376 (Doherty, Rouleau and Hourigan JJ.A.), May 8, 2019
This appeal, which arose in respect of the administration of the Sherman estates, required the Court of Appeal to review the test for granting a sealing order. The court held that while the desire to grieve with privacy was understandable, such a personal concern did not have a public interest component to justify the granting of a sealing order.
On June 29, 2018, the motion judge made ex parte orders sealing certain court files relating to applications brought for the appointment of estate trustees in respect of the estates of Bernard and Honey Sherman. In July 2018, the Toronto Star Newspapers Ltd. and one of its reporters, Kevin Donovan, brought a motion to terminate or vary the sealing orders. The motion judge dismissed the motion and preserved the sealing orders for two years in an August 2, 2018 order.
The motion judge acknowledged in his reasons that orders restricting public access are very much the exception and that the party seeking a sealing order has the burden of demonstrating the need for the order. He pointed to two concerns which satisfied him that sealing orders were necessary in this case: (i) the need to protect the privacy and dignity of the victims of violent crime and their loved ones, and (ii) the reasonable apprehension of risk to those who have an interest in receiving or administering the assets. The motion judge reasoned that anyone with an “interest in receiving or administering the assets” was under a reasonable apprehension of harm from the murderers because the perpetrators and motive of the murderers remained unknown.
In a succinct decision, the Court of Appeal held that the motion judge erred.
The court confirmed that the motion judge correctly identified the two-part test to be applied when deciding whether to grant a sealing order. First, the party seeking the order must demonstrate that the order is necessary to prevent a serious risk to an important public interest which cannot be protected by alternative methods. Second, the moving party must establish that the benefits of the sealing order outweigh its harm, including the negative effects on the right to freedom of expression and other public interests served by open and accessible court proceedings. If the party seeking the order cannot show the requisite necessity required of the first stage of the inquiry, then there is no need to move on to the balancing or proportionality component of the test. A sealing order simply cannot be granted.
The court emphasized that the kind of interest that is properly protected by a sealing order must have a public interest component. Although persons close to the estate administration understandably wanted to keep matters private, given the horrors of a sudden and violent death of loved ones, those concerns were of a personal nature. Concerns of a personal nature, without more, are relevant only if the second stage of the inquiry is reached.
While the second interest identified by the motion judge, the personal safety of individuals or an identifiable group of individuals, is an important public interest that can warrant a sealing order, the evidence before the court must justifying a finding of real risk. In the court’s view, there was no evidence that could warrant a finding that disclosure of the content of the estate files posed a real risk to anyone’s personal safety. The affidavit contained only conclusory assertions. The court found that the motion judge’s analysis turned on the proposition that because the Shermans were murdered by an unknown person and for unknown motive, individuals named as beneficiaries or administrators of the estate were at risk of serious harm. In the court’s view, this was not an available inference, but mere speculation, and provides no basis for a sealing order.
The appeal was allowed and the order of the motion judge set aside. Of note, the court has subsequently heard a motion for a stay of this order pending filing and disposition application to the Supreme Court of Canada. A stay was granted.
Drummond v. Cadillac Fairview Corporation Limited, 2019 ONCA 447 (Doherty, Rouleau and Brown JJ.A.), May 30, 2019
In this appeal, the court addressed concerns about the fairness of “boomerang summary judgment”.
On August 23, 2015, the respondent, Stephen Drummond, visited the Fairview Mall in Toronto with his fiancé and two daughters. While in the Mall’s food court, Drummond tripped over a skateboard which a twelve year old boy had brought into the mall. Drummond suffered injuries and sued the property manager, Cadillac Fairview Corporation Limited in September 2016. Cadillac Fairview defended the occupier’s liability action by denying that it was negligent and asserting a defence of contributory negligence.
Following the examination for discovery of Drummond, Cadillac Fairview moved for summary judgment dismissing the action, in part on the basis that there was no genuine issue for trial with respect to the liability. There was no cross-motion. The motion judge dismissed the motion, but then granted Drummond judgment and directed a trial of the assessment of damages in the event the parties could not settle that issue.
The Court of Appeal allowed Cadillac Fairview’s appeal from that decision, holding that the motion judge erred by granting a judgment not requested by the plaintiff by way of a cross-motion, colloquially known as “boomerang summary judgment”.
Writing for the court, Justice Brown held that the judgment was tainted by procedural unfairness because Drummond did not bring a cross-motion for judgment, Drummond had argued that further evidence was required from additional witnesses, the motion judge had failed to considering the defence of contributory negligence, and the motion judge failed to put Cadillac Fairview on notice that he might grant judgment against it, thereby denying it the opportunity to address that risk. The Supreme Court emphasized in the landmark case of Hryniak v. Mauldin, 2014 SCC 7 that the fundamental principle of summary judgment is that the result must be a “fair and just” one. In this case, the boomerang summary judgment was neither fair nor just.
In addition to the lack of procedural fairness, Brown J.A. found that the motion judge further erred by impermissibly relying on hearsay evidence. In his responding affidavit, Drummond deposed that while he had not seen the skateboard prior to the incident, his daughter had informed him that she had seen the owner of the skateboard playing with it. Drummond also deposed that his fiancé had informed him of conversations she had with two members of the mall’s cleaning staff, one of whom had told her that she had also been struck by the skateboard about an hour before his fall. Drummond also tendered an affidavit from a security expert, attached to which were unsworn, handwritten statements given by Drummond’s daughter and fiancé, containing the information from the cleaners.
Pursuant to Rule 20.02(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, an affidavit made on information and belief must specify the source of the information and the fact of the belief; however, the court may draw an adverse inference from the failure of a party to provide the evidence of any person having personal knowledge of contested facts. If the evidence on information and belief goes to a fundamental contested aspect of the motion, then the motion judge should first consider whether the evidence would be admissible at a trial. If not, the onus falls on the party proffering the evidence to justify some expansion of the rules governing admissibility in the context of a motion.
The information that Drummond relayed from his daughter and fiancé went to the heart of the negligence claim and yet he provided no explanation as to why they or the members of the cleaning staff could not provide their own affidavits. When accepting the evidence, the motion judge concluded that it would have been admissible pursuant to the business records exception and the reliability and necessity exception to the rule against hearsay. However, the handwritten statements were not business records. Nor were the statements from Drummond’s daughter or fiancé admissible under the principled exception because there was no evidence about the need to admit that evidence or its reliability.
Finally, Brown J.A. accepted Cadillac Fairview’s submission that the court should grant it summary judgment dismissing the action pursuant to section 134(1)(a) of the Courts of Justice Act, R.S.O. 1990, c. C.43.
Drummond’s negligence claim against Cadillac Fairview turned on whether the appellant had breached its statutory duty by failing to take reasonable care to see that visitors to the Mall were reasonably protected against the hazard of others using skateboards. In Justice Brown’s view, when the inadmissible hearsay evidence was removed from the negligence analysis, the remaining material evidence on whether the occupier met the standard of care came from Cadillac Fairview. The admissible evidence showed that the appellant had in place reasonable policies to ensure the safety of those entering the mall and implemented those policies in a reasonable manner on the day of the incident. With this evidence, there was no genuine issue requiring a trial regarding Cadillac Fairview’s liability to Drummond for the injuries he suffered.
The court allowed the appeal, set aside the judgment, and dismissed the action.
Klassen v. Beausoleil, 2019 ONCA 407 (van Rensburg, Benotto and Harvison Young JJ.A), May 17, 2019
In this decision, the Court of Appeal considered an appeal from an order denying the appellant leave to amend his claim. The appeal turned on whether the appellant’s proposed amendments constituted a new cause of action or whether the amendments sought alternate relief based on material facts that already formed part of the claim.
The appellant Henry Klassen was a thirty-three percent shareholder of the respondent corporation. He agreed to sell his shares pursuant to a 1996 Share Purchase Agreement (SPA) in exchange for the repayment of specified back wages owing and amounts owed pursuant to a promissory note. The 1996 SPA provided that the appellant’s shares would be held in escrow pursuant to an Escrow Agreement pending repayment of the back wages and the amounts owing under the promissory note.
The personal respondent Robert Beausoleil was the ultimate purchaser of the shares sold by the appellant in 1996 when Beausoleil purchased all of the outstanding shares in 1997. The Share Purchase Agreement entered into at that time provided that, in purchasing the shares, Beausoleil also assumed responsibility for payment of the back wages and amounts owing on the promissory note. Klassen and Beausoleil executed an Amended Escrow Agreement in 1997 which continued the terms of the 1996 Escrow Agreement.
Klassen claimed that shortly after Beausoleil purchased the shares in 1997, they entered into an oral agreement under which they would each become fifty percent co-equal shareholders in the corporation. Klassen also alleged that Beausoleil and the corporation did not pay the back wages owing or the amounts owed under the promissory note. Beausoleil denied that Klassen was a shareholder of the corporation. Klassen commenced an action against the corporation and against Beausoleil for breach of contract, breach of trust, unjust enrichment and seeking relief under section 248 of the Business Corporations Act, R.S.O., c. B.16 for allegedly oppressive conduct.
In August 2017, the respondents brought a motion for summary judgment, seeking the dismissal of the appellant’s action in its entirety or, in the alternative, dismissing Klassen’s claim to a fifty percent ownership interest, his claim for amounts owing on the promissory note, and his claim for back wages.
The motion judge granted summary judgment to the respondents on the promissory note, based on their payment of the amount owing. However, he declined to grant summary judgment with respect to the appellant’s claims relating to the back wages and oral agreement for a fifty percent ownership interest in the corporation, concluding that it was necessary for those claims to proceed to trial.
Following the motion, Klassen’s counsel requested the return of his shares; the escrow agent refused to release them, however, in light of the ongoing litigation between the parties.
The appellant then brought a motion pursuant to Rule 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 for leave to amend his Statement of Claim to plead, in the alternative to his request for a declaration of a fifty percent ownership interest, a request for a declaration that he had a thirty-three percent ownership interest in the corporation. This alternative relief was premised on the theory that the escrow release conditions in the 1996 and 1997 Escrow Agreements remained unsatisfied, and the appellant’s shares remained in escrow.
The motion judge granted leave to the appellant to make most of the amendments sought, but refused to grant leave for him to assert the alternative claim for a thirty-three percent ownership.
The Court of Appeal allowed Klassen’s appeal from this refusal.
Harvison Young J.A. held that the proposed amendments to assert a claim to a thirty-three percent ownership interest did not constitute the assertion of a “new cause of action”. The motion judge suggested that the 1996 SPA, 1996 Escrow Agreement and 1997 SPA were pleaded solely as “background” to the fifty percent ownership interest claim, which showed, according to Harvison Young J.A., that the motion judge failed to appreciate that the appellant had explicitly asserted claims for breach of contract and breach of trust in relation to those agreements. Reading the Statement of Claim generously, the alternative claim to a thirty-three percent ownership interest was an alternative claim for relief flowing from the material facts as originally pleaded.
As Justice Harvison Young explained, the factual matrix giving rise to the appellant’s action was his decision to sell his shares in 1996, the respondents’ failure to pay him for his shares, and the alleged oral agreements between the parties, including that Klassen would become a fifty percent shareholder. In the pleadings, these issues were all interwoven. The original Statement of Claim involved more than just the claim of fifty percent ownership and included breach of contract claims relating to the oral agreement and the three written agreements setting out material terms in respect of the 1996 agreements. In light of the material facts set out in the original Statement of Claim, the amendments did not assert a new cause of action, but rather request alternative relief flowing from alleged breaches of the 1996 SPA, 1997 Escrow Agreement and 1997 SPA.
Harvison Young J.A. also noted that the proposed amendments did not seek to introduce any new material facts. The amendments were simply meant to introduce, wherever a pleading of a fifty percent ownership interest was particularized, language to the effect of seeking a thirty-three percent ownership interest in the alternative. The proposed amendments represented a request for additional forms of relief, or a clarification of the relief sought, based on the same facts as originally pleaded.
Justice Harvison Young further held that this was not a case where non-compensable prejudice would arise as a consequence of the amendments. The delay in seeking leave to amend did not raise a presumption of prejudice, and the respondents failed to establish that they would have otherwise suffered actual, non-compensable prejudice as a result of the amendments.
Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369 (Doherty, Paciocco and Zarnett JJ.A.), May 7, 2019
In this decision, the Court of Appeal considered the principles to be applied on summary judgment and partial summary judgment. The court cautioned that partial summary judgment may increase the risk of duplicative proceedings or inconsistent findings and may also frustrate key objectives of summary judgment.
The respondent corporations, Service Mold + Aerospace Inc., and SMI Ventilation Products Inc., were defrauded by their bookkeeper, Nada Khalaf, who committed the fraud by using forged cheques and making unauthorized payroll payments into her bank account. The respondent corporations sued the appellant, the Toronto-Dominion Bank, claiming that it was strictly liable and liable in negligence for the cheque fraud, and liable in negligence for the payroll fraud.
The bank defended both claims based on (i) a Business Banking Agreement containing a verification clause and a limited liability clause that it claimed the respondent corporations had signed (BBA defence), and (ii) the Limitations Act, 2002, S.O. 2002, c. 24, Sched. B.
The respondents brought a successful motion for partial summary judgment based on its strict liability claim relating to the cheque fraud. The motion judge found that there was no genuine issue to be tried on the appellant bank’s BBA defence or its limitation defence to the cheque fraud because there was no evidence that the respondents had signed a BBA. She also held that she could not determine the discoverability issue without a mini-trial. After the mini-trial, she granted partial summary judgment, finding that the limitation period did not begin to run until early 2015 and it had not passed when the statement of claim was issued.
The court allowed the appeal, holding that the motion judge erred in ordering partial summary judgment in the circumstances of the case, committing an extricable error in principle as well as palpable and overriding error.
Writing for the Court of Appeal, Paciocco J.A. explained that the principles guiding partial summary judgment are more complex than summary judgment motions because partial judgment may increase the risk of duplicative proceedings or inconsistent findings. Further, partial judgment can frustrate the Hryniak v. Mauldin, 2014 SCC 7 objective of using summary judgment to achieve “proportionate, timely and affordable justice”. Justice Paciocco cautioned that, if used improperly, partial judgment can cause delay, increase expense, and increase the danger of inconsistent findings at trial made on a more complete record. He emphasized that partial judgment is a rare procedure reserved for issues that may be readily bifurcated from those in the main action and that may be dealt with expeditiously and in a cost effective manner.
In Paciocco J.A.’s view, the motion judge erred in principle when evaluating the risk of overlap in the evidence. Her orientation was wrong as, in effect, she looked to see whether overlap had been demonstrated. She should not have proceeded to partial summary judgment unless she was satisfied affirmatively that the issues before her could readily be bifurcated without causing overlap that could lead to inefficient duplication or a material risk of inconsistent findings or outcomes. This case was described as illustrative of the delay that partial summary judgment motion entails, with the motion delaying the trial by close to two years.
Justice Paciocco also found that the motion judge made palpable errors in her reasoning, gave insufficient weight to the risk of overlap in the evidence relating to the respective limitations defences, and failed to recognize that the BBA defence was pleaded in response to both claims, not just the cheque fraud.
Although that conclusion was sufficient to determine the appeal, Paciocco J.A. also noted that the motion judge misapplied the test for discoverability. Specifically, she erred in applying the modified objective test by conducting a purely subjective inquiry. Instead of imbuing the hypothetical person with the abilities and circumstances of the respondents’ owner, she imparted on that person the attitudes and practices of the respondents’ owner. This served to defeat the objective reasonableness inquiry. The motion judge erred in assuming that the reasonable person would conduct himself in the same way that the respondent did. Justice Paciocco pointed out that if the hypothetical person is imbued with unreasonable imprudence or inattention, the objective component of the test is defeated.
S.H. v. D.H., 2019 ONCA 454 (Pepall, Hourigan and Fairburn JJ.A.), May 31, 2019
In this decision, the Court of Appeal weighed in on the laws surrounding assisted human reproduction.
The parties used in vitro fertilization in their efforts to have a child while they were still married. They contracted with a lab in the United States to create embryos using the reproductive material from two anonymous individuals. Two viable embryos were then frozen and sent to a lab in Canada. One was implanted into the respondent who later delivered the couple’s only child.
After the parties’ divorce, the respondent wished to use the second embryo to attempt to have a full biological sibling for the parties’ child. The respondent said that if a child was born, then she would not seek any form of child support from the appellant.
Although the appellant consented to the respondent’s use of the embryo when it was created, he since changed his mind and wished to withdraw his consent. In light of his withdrawal of consent, the lab storing the embryo would not release the embryo to the respondent without a court order. The respondent brought a motion seeking such an order. Applying principles of contract and property law, the motion judge concluded that the embryo should be released to the respondent for her use.
Writing for the Court of Appeal, Fairburn J.A. held that neither contract nor property law principles govern in this case, but rather statutory interpretation and application of the relevant legislative framework determined the result.
Justice Fairburn found that the parties together remain the disputed embryo’s “donor” under section 10(1)(b) of the Assisted Human Reproduction (Section 8 Consent) Regulations, S.O.R./2007-137, despite their separation and divorce. Because the parties have the same genetic status in relation to the embryo, their donor couple status remains intact, and they together remain the embryo’s donor. Had the embryo been created from the reproductive material of one of the parties and an anonymous donor, the individual genetically connected to the embryo would have moved from donor couple status to single donor status, with the non-genetically contributing individual losing his or her donor status. In this case, however, neither of the parties was genetically connected to the embryo.
Fairburn J.A. went on to find that even though they are no longer married, section 14(3) of the Consent Regulations allows the appellant to withdraw his consent to the respondent’s use of the embryo. Moreover, parties cannot contract out of the right to withdraw consent. A contract signed by the parties could not preclude the appellant from using the protections available to him from the statute and regulations. The deliberate decision of Parliament to criminalize the use of reproductive material and in vitro embryos in the absence of written donor consent reflects deep moral concerns about human reproduction and its intersection with human autonomy. To avoid criminal conduct through embryo use, s.8(3) of the AHRA requires written consent of the donor. Where the “donor” is a couple, the consent of each spouse or common-law partner must be compatible – there must be a meeting of the minds on how the embryo will be used. The regulations make it clear that donors must be informed when initially giving consent how they can withdraw the consent. As Justice Fairburn explained, consent in the legislative context involving reproductive technology is fundamentally at odds with contract law. The essence of section 8(3) of the Assisted Human Reproduction Act, S.C. 2004, c. 2 and the Consent Regulations is to allow for an individual’s right to consent, a right that is inherently linked to respect for the consenter’s state of mind. It would undermine the notion of consent embodied in the AHRA and the Consent Regulations to freeze it at a specific moment in time and preclude changes of mind or to undermine the advice that they can withdraw consent by removing that option if their marital status changes.
The court held that the respondent is not permitted to use the embryo absent her ex-husband’s consent and allowed the appeal.
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