Lerners' Monthly Lists
October 2018
 
Top 5 Civil Appeals from the Court of Appeal
 
1. Lavender v. Miller Bernstein LLP, 2018 ONCA 729 (Epstein, van Rensburg and Brown JJ.A.), September 5, 2018
 
2. Kunuthur v. Govindareddigari, 2018 ONCA 730 (Sharpe, Juriansz and Roberts JJ.A.), September 10, 2018
 
3. Wood v. CTS of Canada Co., 2018 ONCA 758 (Hoy A.C.J.O., Brown and Trotter JJ.A.), September 19, 2018
 
4. Smith v. Safranyos, 2018 ONCA 760 (Strathy C.J.O., Roberts and Paciocco JJ.A.), September 19, 2018; Chiocchio v. Hamilton (City), 2018 ONCA 762 (Simmons, Huscroft and Miller JJ.A.), September 19, 2018
 
5. Toronto (City) v. Ontario (Attorney General), 2018 ONCA 761 (Hoy A.C.J.O., Sharpe and Trotter JJ.A.), September 19, 2018
 
 
1. Lavender v. Miller Bernstein LLP, 2018 ONCA 729 (Epstein, van Rensburg and Brown JJ.A.), September 5, 2018

In this appeal, which arose from a class action brought on behalf of shareholders in a public company against the company’s auditors for allegedly failing to properly audit the corporation’s OSC filings, the Court of Appeal considered the issue of the duty of care owed by auditors to shareholders. 
 
In 2001, the Ontario Securities Commission suspended Buckingham Securities’ registration and an order was made placing it into receivership because it breached regulatory requirements by failing to segregate investor assets and maintain a minimum level of net free capital. 
 
Its clients, who held investment accounts with the firm, lost millions. 
 
One such client was the respondent, Barry Lavender, who commenced a class action on behalf of every person who had an investment account with Buckingham when Buckingham was placed into receivership. Lavender alleged that in each of fiscal years 1998 to 2000, Buckingham’s auditor, the appellant, Miller Bernstein LLP, negligently audited the company’s annual registration renewal requirement filed with the OSC that confirmed compliance with segregation and minimum capital requirements. The respondent specifically alleged that the appellant negligently audited Buckingham’s Form 9 Reports – submitted to the OSC to assist it in monitoring securities dealers and protecting investors – which falsely stated that the company was in compliance with the regulatory segregation and minimum capital requirements. 
 
The respondent took the position that the auditor owed a duty of care to the class, as clients of Buckingham, and that in negligently performing its audit of Buckingham’s Form 9 Reports, it breached that duty. 
 
In 2010, the parties consented to certification of the class proceeding and agreed to certification on six common issues. In 2016, the class moved for summary judgment on five of these common issues. 
 
The motion judge granted summary judgment in favour of the class on the certified common issues relevant to liability, holding that the auditor owed the class members a duty of care in conducting the audit and fell below the requisite standard of care. 
 
The Court of Appeal disagreed, allowing Miller Bernstein’s appeal.
 
The appeal turned on whether the appellant owed the class a duty of care in relation to its audit of Buckingham’s Form 9 Reports. 
 
Writing for the court, Epstein J.A. held that it did not. 
 
Notwithstanding that auditors have been found liable to shareholders in other cases –most recently in the Supreme Court decision in Deloitte & Touche v. Livent Inc. (Receiver of), 2017 SCC 63 – Epstein J.A. explained that the finding of a duty of care of auditors to shareholders is not automatic. Courts must still conduct an Anns/Cooper analysis to determine whether there is proximity and a duty of care in light of the specific nature of the auditor’s undertaking and the reliance by the plaintiff. 
 
In this case, the auditors owed no duty of care to the shareholders in respect of the failure to properly audit OSC filings made by the corporation.
 
The majority of the Supreme Court in Livent – which was released after the motion for summary judgment in this case – reaffirmed the principle that there is a prima facie duty of care where there exists a “sufficiently close relationship between the plaintiff and the defendant”. This stage of the analysis involves establishing both reasonable foreseeability and proximity which, the Supreme Court explained, are distinct concepts which must be considered separately. 
 
While the relationship at issue may fall within – or be analogous to – a previously established category of relationship in which proximity has already been found to exist, the Supreme Court emphasized that courts should take care to avoid treating established categories of duty of care in an overly broad manner: the mere fact that proximity has been recognized as existing between an auditor and its client for one purpose is insufficient to conclude that proximity exists between the same parties for all purposes. A finding of proximity based on a previously established or analogous category must be grounded not merely upon the identity of the parties, but on an examination of the unique relationship in each case. 
 
Where an established proximate relationship cannot be found, the court must then undertake a full examination of the relationship between the parties in order to determine whether there exists a sufficiently proximate relationship to ground a duty of care. As the Supreme Court explained in Livent, the court may consider the parties’ expectations, representations, reliance, and the property or other interests involved, as well as any statutory obligations. In cases of pure economic loss arising from negligent misrepresentation or performance of a service, two factors are “determinative” of the proximity analysis: the defendant’s undertaking and the plaintiff’s reliance. Where the defendant undertakes to provide a representation or service in circumstances that invite the plaintiff’s reasonable reliance, the defendant becomes obligated to take reasonable care, and the plaintiff has a right to rely on the defendant’s undertaking to do so. The Supreme Court noted, however, that the plaintiff’s reliance must be within the scope of the defendant’s undertaking, or the purpose for which the representation was made or the service was undertaken. Anything outside that scope will fall outside the scope of the proximate relationship and the defendant’s duty of care.
 
In Epstein J.A.’s view, while the harm to the respondent might have been foreseeable to the appellant in this case, there was insufficient proximity between the two parties to ground a duty of care.   
 
Undertaking a full proximity analysis, Epstein J.A. found that there was an insufficient connection between the appellant’s undertaking and the respondent’s loss. She noted that the appellant made no representations to members of the class, most of whom never knew of the respondent’s existence. The interposition of Buckingham and the OSC between the appellant and the respondent rendered the relationship between them too remote to ground a duty of care. Epstein J.A. also noted that the respondent did not rely on or even review any of the Form 9 Reports; accordingly, there was a total absence of reliance on the relevant documents. She further found that the motion judge committed several palpable and overriding errors of fact that mistakenly gave him the impression that there was a greater connection between the parties than was actually the case. Moreover, the relevant statutory scheme did not create a proximate relationship. Finally,
Epstein J.A. acknowledged the Supreme Court’s caution that significant scrutiny is warranted when deciding whether to recognize a duty of care in a claim for pure economic loss. 
 
Epstein J.A. concluded that, taken together, these factors weighed against finding the requisite proximity. 
 
The court allowed the appeal and set aside the judgment below. The court granted summary judgment to Miller Bernstein, dismissing the class’ claim for negligence. 
 
2. Kunuthur v. Govindareddigari, 2018 ONCA 730 (Sharpe, Juriansz and Roberts JJ.A.), September 10, 2018
 
This custody dispute concerning the parties’ thirteen year old son raises an interesting jurisdictional issue. 
 
Srichand Reddy Kunuthur and Deepti Govindareddigari married in 2004. They relocated to the United States shortly thereafter, and had a son while living there. The family moved to Brampton, Ontario in 2011 and became permanent residents of Canada. In April 2013, while the respondent father was away on business, the appellant mother took their son to India to visit her mother. When the father returned home, all of their son’s personal belongings were gone. 
 
Soon after, the mother brought petitions for divorce and custody in India. 
 
In October 2014, on the father’s ex parte motion, Sproat J. granted an order that the mother return the child to Ontario and that the father be granted temporary custody. The mother did not appeal or move to set aside that order, nor did she return the child to Ontario. The father brought a motion to have the mother found in contempt of Sproat J.’s order. When the motion came before the motion judge in March 2018, the mother appeared, admitted that she took the child, and stated that she wanted to return to Ontario to address custody and access but had been unable to return the parties’ son to Ontario because his passport had expired. 
 
The motion judge found that the child’s habitual residence was Ontario and proceeded on the basis that the Ontario courts have jurisdiction. In light of the mother’s submissions, he did not find her in contempt. He ordered that she surrender any passports she held until she returned the child to Ontario, however, and made a final order granting the father sole custody. 

The Court of Appeal allowed the mother’s appeal from that decision, holding that the motion judge erred both in finding that Ontario has jurisdiction and in granting sole custody to the father. 
 
The court accepted the appellant’s submission that the Ontario court should decline jurisdiction because the respondent has attorned to the courts in India. Citing its decision in Van Damme v. Gelber, 2013 ONCA 388, the court noted that a party attorns to a court’s jurisdiction when it goes beyond simply challenging the jurisdiction of that court and “litigates a claim on the merits”. 

After the mother commenced her custody petition in the Family Court in India, the father also filed a petition in that court disputing its jurisdiction. The respondent also brought a Civil Revision Petition before the High Court in India for a stay of the Family Court proceeding relating to custody. The High Court made an interim order refusing to grant the stay, stating the Family Court could deal with the issue of jurisdiction if raised by the father. As of June 2018, the father had not obtained a final ruling on his request for a stay. Meanwhile, the custody petition has been proceeding in the Family Court. 

Although not entirely clear as to what has occurred in the Indian courts and the respondent’s present position in the custody proceedings in India, the court found that, by seeking a final order of custody on the basis of Indian law in the divorce proceeding in India, the father has attorned to the courts in that country. 

On that basis, the Court of Appeal concluded that the Ontario court should have declined jurisdiction.

Turning to the issue of custody, the court held that the motion judge erred by making a final custody order in the respondent’s favour in a summary manner. Section 24(1) of the Children’s Law Reform Act, R.S.O. 1990, c. C.12 states that the merits of a custody application shall be determined on the basis of a number of factors, including the overarching consideration of “the best interests of the child”. The court found nothing in the record to indicate that the motion judge did so. 

3. Wood v. CTS of Canada Co., 2018 ONCA 758 (Hoy A.C.J.O., Brown and Trotter JJ.A.), September 19, 2018

This appeal arose from the closure of a manufacturing plant operated by CTS of Canada Co. 

On April 17, 2014, CTS gave written notice to its employees that it was closing its Streetsville, Ontario plant and that their employment would terminate on March 27, 2015. It subsequently extended the termination date for most employees to June 26, 2015.

The closure of the plant resulted in a “mass termination” for the purposes of the Employment Standards Act, 2000, S.O. 2000, c. 41. 

The Employment Standards Act imposes a number of requirements in the case of mass terminations. An employer that terminates fifty or more employees in a four-week period must provide at least eight weeks’ notice of termination. An employer required to give notice under the statute must also serve the ESA Director with the prescribed information in Form 1, and post the Form 1 in the employer’s establishment on the first day of the notice period. Notice is not deemed to have been given until the Director receives the Form 1 information. 

CTS did not serve and post the Form 1 information until May 12, 2015, twelve days into the mandatory eight-week notice period, and more than a year after it gave notice to its employees.

A class action was brought on behalf of former employees, the respondents, against the appellants, their common employers, CTS of Canada Co. and its parent corporation, CTS Corporation. The class consisted of seventy-four former active employees who did not sign a release with the appellants and were not dismissed for cause. 

The parties agreed to resolve common issues on a motion for summary judgment.

The motion judge found that section 58(2) of the Employment Standards Act required the appellants to serve and post the Form 1 information when it gave notice to employees on April 17, 2014, and that, pursuant to section 58(4) of that statute, its notice was not effective until it did so on May 12, 2015. The appellants’ failure to complete the Form 1 Notice invalidated the thirteen months of working notice CTS provided prior to filing and posting the Form 1 information. 

The motion judge also held that the appellants were not entitled to credit for working notice for any week in which an employee worked overtime contrary to the ESA or in which the employee was forced to work overtime that had a significant adverse effect on the ability of the employee to look for new employment. Further, in the case of the five employees who worked more than thirteen weeks beyond their original separation date, the appellants were only entitled to credit for common law working notice from the date of the letter providing them with notice of their actual termination date. 

The Court of Appeal allowed CTS’ appeal from this decision in part. 

Writing for the court, Hoy A.C.J.O. agreed with the appellants that the motion judge erred in finding that they were required to serve and post the Form 1 Notice on April 17, 2014. In Hoy A.C.J.O.’s view, CTS was only required to serve and post the Form 1 information at the beginning of the eight-week notice period and, since it was twelve days late in doing so, the class members are entitled to a further twelve days’ pay in lieu of notice.

Citing the decision of the Supreme Court in Machtinger v. HOJ Industries, [1992] 1 S.C.R. 986, Hoy A.C.J.O. explained that the purpose of the Employment Standards Act is to protect the interests of employees by requiring employers to comply with certain minimum standards, including minimum periods of notice of termination, as opposed to imposing requirements on employers in excess of statutory minimums. Tying the requirement to provide Form 1 Notice when an employer gives what it intends to be common law reasonable notice in excess of the statutorily-required minimum notice period is not consistent with the object of the statute, which requires compliance with only certain minimum standards.

Hoy A.C.J.O. held that the appellants were not required to comply with section 58(1) of the ESA on April 17, 2014 because, based on a textual reading of that provision, it does not require an employer to give notice to its employees as soon as it decides that it will effect what would be a mass termination. All the appellants were required to do was give notice “for the prescribed period” of eight weeks prior to the date of termination, and were therefore only required to give notice by the first day of this statutory notice period. As the Supreme Court explained in Rizzo & Rizzo Shoes Ltd (Re), [1998] 1 S.C.R. 27, a statute’s words are to be read in their entire context and in their grammatical and ordinary sense, harmoniously with the scheme of the statute, the object of the statute, and the intention of the legislature. Guided by this principle, Hoy A.C.J.O. found that, due to references to the “required notice period” elsewhere in section 58 meaning only the eight-week notice period, the notice period referred to in section 58(2) also referred to the required eight-week notice period as opposed to the entire period where notice was given. 

In Hoy A.C.J.O.’s view, section 58 is not ambiguous. Even if there is any doubt arising from difficulties in the language of the provision, however, she emphasized that Rizzo does not direct that such doubt should be resolved in favour of employees where to do so would be inconsistent with the scheme of the statute, its object, and the intention of the legislature. 

Hoy A.C.J.O. rejected the appellants’ submission that the motion judge erred in finding that they were not entitled to credit for working notice in any week in which an employee worked overtime contrary to the ESA or in which the employee was forced to work overtime that had a significant adverse effect on the ability of the employee to look for new employment. As the Supreme Court explained in Evans v. Teamsters Local Union No 31, 2008 SCC 20, in determining whether an employer is entitled to credit for working notice, it is relevant to consider the quality of the opportunity given to the employee to find new employment. The primary objective of reasonable notice is, after all, to provide the dismissed employee with an opportunity to obtain alternate employment. Exceptional workplace demands on an employee during the notice period may warrant disentitling an employer to credit for some or all of the working notice and, in Hoy A.C.J.O.’s view, the overtime worked in violation of the ESA in this case was such an exceptional demand. Moreover, an employee’s consent to work overtime in violation of the ESA is not effective, as section 5(1) of the statute voids any contracting out of an employment standard. 

Hoy A.C.J.O. also disagreed with the appellants that the motion judge erred in finding that, in the case of five employees who worked more than thirteen weeks beyond their original separation date, the appellants were only entitled to credit for common law working notice from the date of the letter providing them with notice of their actual termination date. Section 6(1) of the Termination and Severance of Employment, O. Reg. 288/01 permits an employer to continue to provide temporary work to employees for up to thirteen weeks after the termination date specified in the notice of termination given to an employee without giving a further notice of termination, and if temporary work exceeds that duration fresh notice is required. Here, the employees received a series of letters asking for their agreement to continue to work during and then beyond the thirteen-week period, before being given a “final extension” of their termination dates in a letter. The appellants were only entitled to credit for providing working notice in the case of the employees who worked more than thirteen weeks from the date of this letter which provided them with notice of their actual termination date, and accordingly their April 17, 2014 notice was ineffective. 

4. Smith v. Safranyos, 2018 ONCA 760 (Strathy C.J.O., Roberts and Paciocco JJ.A.), September 19, 2018; Chiocchio v. Hamilton (City), 2018 ONCA 762 (Simmons, Huscroft and Miller JJ.A.), September 19, 2018

Last month, the Court of Appeal decided two cases involving motor vehicle accidents in the City of Hamilton. In both cases, the plaintiffs claimed against the City for non-repair of a highway. 

Chiocchio v. Hamilton (City) arose from a collision which occurred when a westbound vehicle driven by Richard Ellis accelerated away from a stop sign on the 5th Concession West and T-boned the minivan northbound on Brock Road in which Michael Chiocchio Sr. was a passenger. 

Chiocchio was tragically rendered a quadriplegic as a result of the collision. 

The trial judge found that the Corporation of the City of Hamilton breached its duty to keep the roadway in a reasonable state of repair by failing to repaint a faded stop line that was no longer effective in guiding drivers concerning where to stop, and accordingly concluded that the City was fifty percent responsible for the accident. 

Smith v. Safranyos arose from a collision which occurred when a vehicle operated by Dawn Safranyos failed to yield the right of way upon entering Upper Centennial Parkway and was T-boned by a vehicle operated by Daryl McHugh, who was impaired and speeding. 

The passengers in Safranyos’ vehicle – all children – were seriously injured.

The trial judge found that there was no stop line at the corner where Safranyos was turning, contrary to the City’s design for the intersection, and that a steel guardrail leading up to the intersection was positioned such that it prevented Safranyos from seeing McHugh’s car as it approached. She found that the conditions of the intersection fell below the standard for a reasonable state of repair and concluded that the City was twenty-five percent responsible for the accident. 

In Chiocchio v. Hamilton (City), the Court of Appeal allowed the City of Hamilton’s appeal, holding that the trial judge erred in finding that it failed to keep the roadway in a reasonable state of repair. Meanwhile, in Smith v. Safranyos, the court dismissed the City’s appeal, holding that the trial judge applied the correct legal test in finding it liable for non-repair under the Municipal Act, 2001, S.O. 2001, c.25, s. 44, and that she was entitled, on the evidence before her, to find that this particular intersection was in a state of non-repair. 

Section 44 of the Municipal Act requires a municipality to keep highways under its jurisdiction “in a state of repair that is reasonable in the circumstances, including the character and location of the highway”. As the Court of Appeal explained in Fordham v. Dutton-Dunwich (Municipality), 2014 ONCA 891, a municipality is required to prevent or remedy conditions on its roads that create an unreasonable risk of harm for ordinary drivers exercising reasonable care. However, a municipality’s duty does not extend to remedying conditions that pose a risk of harm only because of negligent driving.

In Chiocchio v. Hamilton (City), the City of Hamilton argued that the trial judge erred in applying the ordinary reasonable driver standard. The City claimed that although the trial judge recognized that an ordinary reasonable driver would be aware of his obligations under section 136(1) of the Highway Traffic Act – which governs what a driver must do when he approaches a stop sign at an intersection where there is no stop line or crosswalk-- he proceeded with his analysis on the erroneous premise that an ordinary reasonable driver would not comply with that provision. The court rejected this submission because, as it explained in Fordham, the ordinary reasonable driver standard is that of ordinary drivers exercising reasonable care who nevertheless sometimes make mistakes. 

Nonetheless, the court held that the trial judge erred in applying the ordinary reasonable driver standard.

As the court explained, the question is not whether an ordinary reasonable driver could be expected to know the exact length of the safe stopping distance in relation to northbound traffic, but rather whether, in the absence of a stop line, the intersection posed an unreasonable risk of harm for ordinary drivers exercising reasonable care who sometimes make mistakes. 

In the court’s view, it did not. 

The court held that the trial judge erred by ignoring the fact that although drivers stopped at or near the stop sign would have had a 150-metre view of northbound traffic, their view of southbound traffic would have been completely obscured. The court stated that ordinary reasonable drivers would not stop in a location where their view of oncoming traffic from one direction would be completely obscured and then proceed into the intersection without stopping again. They would know to come closer to the intersection before stopping initially or before stopping again, in order to have a clear view of traffic from both directions.

The court explained that drivers who fail to comply with the rules of the road established under the HTA and who also act in a manner that is contrary to common sense cannot meet the ordinary reasonable driver standard. The court held that the trial judge erred in failing to recognize that and in failing to recognize that the evidence did not fully address the sightlines for southbound traffic – a necessary component to applying the ordinary reasonable driver standard to the facts of the case. 

In Smith v. Safranyos, the City argued that the trial judge erred in law by misapplying the reasonable driver standard when determining whether the intersection was in a state of non-repair. In Fordham, the court outlined a four-step test for determining whether a municipality is liable under section 44 of the Municipal Act. The first two steps – proof of non-repair and proof that the non-repair caused the accident – determine whether there is a prima facie case of liability, while the third and fourth steps – statutory defences and contributory negligence – determine the extent to which a municipality can be absolved of liability. The City challenged the trial judge’s findings with respect to steps one through three.

The Court of Appeal found that notwithstanding that Safranyos was a negligent driver and contravened sections of the HTA, the trial judge understood and applied the law correctly. She properly stated the law and did not modify it to accommodate Safranyos’ negligence. The court emphasized that drivers’ duties under the HTA cannot absolve municipalities of liability even where drivers have been negligent. And, to the extent that the trial judge did exhibit any confusion about the ordinary standard of care for drivers, it was of no prejudice to the City.

The court rejected the City’s submission that the trial judge erred in law in finding that the absence of a stop line constituted non-repair by treating Ontario Traffic Manual guidelines as legally enforceable standards of civil liability and improperly drawing adverse inferences and using its policies in finding non-repair. The court noted that the trial judge did not rely on the Ontario Traffic Manual guidelines as if they established the City’s standard of care. In fact, she expressly stated the contrary, recognizing that the guidelines were simply one item combined with other evidence that guided the court to its conclusion on the standard of care. The court also found that the trial judge’s drawing of adverse inferences against the City to support her finding of non-repair was without error. 

The court also found no error in the trial judge’s finding that the sightlines constituted non-repair or in her finding that there was a causal link between the intersection’s non-repair and the accident. 

5. Toronto (City) v. Ontario (Attorney General), 2018 ONCA 761 (Hoy A.C.J.O., Sharpe and Trotter JJ.A.), September 19, 2018

The Court of Appeal was tasked with determining – in great haste – whether to grant the Attorney General of Ontario’s motion for a stay pending an appeal of the order of the Superior Court of Justice that Premier Doug Ford’s Better Local Government Act is in violation of the Charter and therefore of no force and effect. 

The election period for the 2018 City of Toronto municipal elections, based on the City’s by-laws providing for a forty-seven ward structure, began on May 1, 2018. Bill 5, the Better Local Government Act, 2018, S.O. 2018, c. 11, which was introduced on July 30, 2018 and given Royal Assent on August 14, 2018, changed the course of the elections by imposing a twenty-five ward structure. 

Proceedings were quickly brought to challenge the constitutionality of Bill 5. 

The constitutional challenge raised several grounds, but the basis for the application judge’s decision was that Bill 5 infringed the freedom of expression rights of both candidates and voters under section 2(b) of the Canadian Charter of Rights and Freedoms. The application judge found that by changing the ward structure mid-election, Bill 5 “substantially interfered with the candidate’s ability to effectively communicate his or her political message to the relevant voters” and “undermined an otherwise fair and equitable election process”. He further found that Bill 5 infringed municipal voters’ rights to freedom of expression by interfering with their right to vote. Characterizing the right to vote as an “expressive activity” falling within the protection of section 2(b) of the Charter, the application judge held that this right includes the right to “effective representation”. Increasing the population size of the wards would interfere with “voters’ right to cast a vote that can result in effective representation.” 

The application judge went on to reject the Attorney General’s assertion that any infringement of section 2(b) of the Charter could be justified as a reasonable limit under section 1, and declared provisions of Bill 5 to be of no force and effect. 

The Attorney General appealed this order, and sought a stay of the order pending its appeal. The effect of a stay would be to leave Bill 5 in place and require Toronto’s municipal election to proceed on the basis of a twenty-five ward structure. 

With the election mere weeks away, the court released urgent and relatively brief reasons for its decision. 

In RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, the Supreme Court set out a three-part test for when an appellate court should grant a stay of a lower court decision pending appeal. In order for a stay to be granted, the applicant must demonstrate that: 
 
(i) there is a serious issue to be tried, 
 
(ii) it will suffer irreparable harm if the stay is not granted, and 
 
(iii) the balance of convenience favours a stay pending the disposition of the appeal.

The court held that the first part of the RJR-MacDonald test is satisfied because there is a serious issue to be tried. Because the rights of the parties would be determined by the motion, the court explained that it was necessary to consider whether there is a strong likelihood that the appeal will succeed. 

In the court’s view, it is likely that the appeal will succeed because the application judge erred in law when interpreting section 2(b) of the Charter

The court identified four errors in the application judge’s decision. 

First, the application judge erred by conflating the protection of expression in section 2(b) of the Charter and the guarantee of democratic rights of citizens to vote enshrined in section 3. The rights protected in these two provisions are distinct and, while they can overlap, it does not follow that doctrines pertaining to section 3 can expand the scope of section 2(b). The application judge next erred in finding that the decrease in the number of wards interfered with the candidates’ freedom of expression by making the conveyance of their messages less effective. Despite the decrease in number of wards, the candidates are still able to express themselves to voters and their communications are not restricted. Third, the candidates’ expectations that the wards would be a certain size are not constitutionally guaranteed. Lastly, the increase in the population of each ward does not substantially interfere with voters’ rights under s 2(b) of the Charter. The size of the wards is a matter of policy to be determined by the legislature and in light of other provisions of the Charter, including section 15(1) – which, the application judge determined, would not be infringed by the new ward sizes. 

The court held that the second part of the RJR-MacDonald test is satisfied because the appellant will suffer irreparable harm if the stay is not granted. Its determination that the appellant is likely to succeed on appeal because the application was wrongly decided is a strong indication that irreparable harm will result if the stay is not granted. 

The court held that the third part of the RJR-MacDonald test is satisfied because the balance of convenience favours granting the stay. Since it determined that a constitutional review of Bill 5 is likely to show that the bill is constitutional, the balance of convenience favours granting a stay. The court further noted that the timeline that the City Clerk faces in making necessary preparations for the election does not tip the balance of convenience against the granting of a stay because, despite the confusion caused by the litigation, an election with either twenty-five or forty-seven wards is still possible. 

The order of the Superior Court was stayed, leaving Bill 5 intact. Toronto’s municipal election will accordingly proceed on October 22, 2018 on the basis of a twenty-five ward structure.


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