Court Of Appeal Summaries (July 31 – August 4) - Libel & Defamation

Good afternoon.

Following are our summaries of the civil decisions of the Court of Appeal for Ontario for the week of July 31, 2023.

In Bank of Montreal v. Iskenderov, a five-member panel of the Court determined that the limitation period applicable to fraudulent conveyance actions under the Fraudulent Conveyances Act is two years, not ten years. The Limitations Act, 2002, including the provisions relating to discoverability, applies to such actions. The ten-year limitation period relating to claims to recover land under the Real Property Limitations Act does not apply. In coming to this decision, the Court overruled its own prior decision to the contrary in Anisman v. Drabinsky, 2021 ONCA 120.

In Oliveira v. Oliveira, the appellant had breached the deemed undertaking rule and been found in contempt of court for not obeying various court orders. He was sentenced to 89 days in jail for his contempt. The Court found the sentence too harsh and set it aside. It also reduced the costs ordered against the appellant.

In Froom v Lafontaine, the respondent SL is alleged by her husband to have fraudulently registered a notice of change with the Ministry of Government Services to make herself the sole officer and director of his corporation (the appellant), and subsequently mortgaged a property registered to the appellant corporation. Upon default and enforcement of the mortgage by the mortgagee, the husband attempted to set aside the mortgage based on SL's fraud. The Court dismissed the appeal, holding that whether or not SL was fraudulent in registering a notice of change to make herself the sole officer and director of the corporation did not change the fact that the mortgage executed on behalf of the corporation was itself authentic. This decision places the risk of fraud regarding who is authorized to act for a corporate mortgagor with the corporation and its true principals, and not on lenders who lend to corporations.

Mondal v Kirkconnell is another Anti-SLAPP case. Both defamation actions were dismissed by the Anti-SLAPP motion judge. The Court allowed the appeal in respect of one of the two actions.

In Hiawatha First Nation v. Cowie, the Court considered whether a resolution issued by a band council regarding land-use planning should be considered a by-law and thereby be enforceable by way of injunction. The issues involved a consideration of both municipal law and the aboriginal law. The resolution in this case was found not to be a by-law.

Other topics covered this week included agreements of purchase and sale of land, breach of fiduciary duty and unjust enrichment.

Wishing everyone an enjoyable long weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferreira
Blaney McMurtry LLP
416.593.2953 Email

Civil Decisions

Oliveira v. Oliveira, 2023 ONCA 520

Keywords: Contracts, Employment, Wrongful Dismissal, Torts, Defamation, Civil Procedure, Deemed Undertaking Rule, Contempt, Occupational Health and Safety Act, R.S.O. 1990, c. O.1, Rules of Civil Procedure, r. 30.1.01, Goodman v. Rossi (1995), 24 O.R. (3d) 359 (C.A.), Juman v. Doucette, 2008 SCC 8, Dickie v. Dickie (2006), 78 O.R. (3d) 1 (C.A.), Susin v. Susin, 2014 ONCA 733, R. v. Bird, 2019 SCC 7, Business Development Bank of Canada v. Cavalon Inc., 2017 ONCA 663, Boily v. Carlton Condominium Corp. 145, 2014 ONCA 574, R. v. Proulx, 2000 SCC 5, Poulie v. Johnston, 2022 ONSC 5186, Ontario (Attorney General) v. Paul Madger Furs Ltd. (1993), 12 O.R. (3d) 72 (Gen. Div.)., Astley v. Verdun, 2015 ONCA 543, Ontario (Attorney General) v. Paul Magder Furs Ltd. (1991), 6 O.R. (3d) 188 (C.A.)

Froom v Lafontaine, 2023 ONCA 519

Keywords: Real Property, Land Titles, Fraud, Mortgages, Deferred Indefeasibility, Corporations, Indoor Management Rule, Civil Procedure, Partial Summary Judgment, Land Titles Act, R.S.O. 1990, c. L.5, ss. 1 and 78(4), Legislation Act, 2006, S.O. 2006, c. 21, s. 87, Business Corporations Act, R.S.O. 1990, c. B.16, s. 19, Bills of Exchange Act, R.S.C. 1970, c. B‑5, Land Transfer Act, 1875 (38 & 39 Vict. c. 87), 1168760 Ontario Inc. v. 6706037 Canada Inc., 2019 ONSC 4702, Canada (Minister of Citizenship and Immigration) v. Vavilov, 2019 SCC 65, CIBC Mortgages Inc. v Chan, 2004 CanLII 66351 (Ont. S.C.), Household Realty Corporation Ltd. v. Liu (2005), (4th) 679 (Ont. C.A.), Ontario Securities Commission v. Money Gate Mortgage Investment Corporation, 2020 ONCA 812, Fok Cheong Shing Investments Co. Ltd. v. Bank of Nova Scotia, [1982] 2 S.C.R. 488, 2659954 Ontario Inc. (1 February 2021), Toronto (Director of Land Titles), MacIsaac v. Salo, 2013 ONCA 98, Feltz Design Build Ltd. v. Larson, 2022 ONCA 15, 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, Lawrence v. Maple Trust Company, 2007 ONCA 74, Hryniak v. Mauldin, 2014 SCC 7

Mondal v. Kirkconnell, 2023 ONCA 523

Keywords: Torts, Defamation, Slander, Anti-SLAPP, Defences, Fair Comment, Malice, Public Interest, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 137.1, Bernier v. Kinsella et al., 2021 ONSC 7451, 1704604 Ontario Ltd. v. Pointes Protection Association, 2020 SCC 22, Sokoloff v. Tru-Path Occupational Therapy Services Ltd., 2020 ONCA 730, WIC Radio Ltd. v. Simpson, 2008 SCC 40, Blair v. Ford, 2021 ONCA 841, Bent v. Platnick, 2020 SCC 23, Subway Franchise Systems of Canada, Inc. v. Canadian Broadcasting Corporation, 2021 ONCA 26, Canadian Union of Postal Workers v. B'nai Brith Canada, 2021 ONCA 529, Walsh Energy Inc. v. Better Business Bureau of Ottawa-Hull Incorporated, 2018 ONCA 383, Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130, Lascaris v. B'nai Brith Canada, 2019 ONCA 163, Zoutman v. Graham, 2019 ONSC 2834, Ross v. New Brunswick Teachers' Assn., 2001 NBCA 62, Hansman v. Neufeld, 2023 SCC 14, The Catalyst Capital Group Inc. v. West Face Capital Inc., 2023 ONCA 381, Peter A. Downard, The Law of Libel in Canada, 5th ed. (Toronto: LexisNexis, 2022), Timothy Endicott, "Proportionality and Incommensurability" in Grant Huscroft, Bradley W. Miller & Grégoire Webber, eds., Proportionality and the Rule of Law: Rights, Justification, Reasoning (New York: Cambridge University Press, 2014) 311

Hiawatha First Nation v. Cowie, 2023 ONCA 524

Keywords: Municipal Law, Land-Use Planning, Zoning By-Laws, Aboriginal Law, Indigenous Law, Indian Act, R.S.C. 1985, c. I-5., Hiawatha First Nation Land Code, Indian Advancement Act, 1884, Statutory Instruments Act, R.S.C. 1985, c. S-22, First Nations Fiscal Management Act, S.C. 2005, c. 9, First Nations Land Management Act, S.C. 1999, c. 24, Framework Agreement on First Nation Land Management Act, S.C. 2022, c. 19, s. 121, Indian Act Amendment and Replacement Act, S.C. 2014, c. 38, Knibb Developments Ltd. v. Siksika Nation, 2021 FC 1214, Nowegijick v. The Queen, [1983] 1 S.C.R. 29, Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85, Opetchesaht Indian Band v. Canada, [1997] 2 S.C.R. 119, Osoyoos Indian Band v. Oliver (Town), 2001 SCC 85, Mitchell v. Peguis Indian Band, [1990] 2 S.C.R. 85, Tyendinaga Mohawk Council v. Brant, 2014 ONCA 565, Louie v. Canada (Indigenous Services), 2021 FC 650, Gamblin v. Norway House Cree Nation Band, [2001] 2 C.N.L.R. 57 (F.C.T.D.), Whalen v. Fort McMurray No. 486 First Nation, 2019 FC 732, R. v. Jimmy (1987), 15 B.C.L.R.(2d) 145 (C.A.)

Rahbar v. Parvizi, 2023 ONCA 522

Keywords: Contracts, Repudiation, Real Property, Agreements of Purchase and Sale of Land, Equitable Remedies, Relief from Forfeiture, Courts of Justice Act, R.S.O. 1990, c. C.43, s 98, Ching v. Pier 27 Toronto Inc., 2021 ONCA 551, King v. Urban & Country Transport Ltd. (1973), 1 O.R. (2d) 449 (C.A.), Redstone Enterprises Ltd. v. Simple Technology Inc., 2017 ONCA 282, Benedetto v. 2453912 Ontario Inc., 2019 ONCA 149, HW Liebig Co. v. Leading Investments Ltd., [1986] 1 S.C.R. 70, Jesan Real Estate Ltd. v. Doyle, 2020 ONCA 714, Azzarello v. Shawqi, 2019 ONCA 820

Aiello v. Bleta, 2023 ONCA 525

Keywords: Trusts, Trustees, Fiduciary Duties, Breach, Unjust Enrichment, Inter Vivos, Promissory Estoppel, Trustee Act, R.S.O. 1990, c. T.23, Housen v. Nikolaisen, 2002 SCC 33, Waxman v. Waxman, 44 B.L.R. (3d) 165, 186 O.A.C. 201 (C.A.), Pecore v. Pecore, 2007 SCC 17, Prolink Broker Network Inc. v. Jaitley, 2013 ONSC 4497, Ruparell v. J. H. Cochrane Investments Inc. et al., 2020 ONSC 7466, Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24, Combe v. Combe, [1951] 2 KB 215 (E.W.C.A.), Cowper-Smith v. Morgan, 2017 SCC 61

More v. 1362279 Ontario Ltd. (Seiko Homes), 2023 ONCA 527

Keywords: Contracts, Anticipatory Breach, Real Property, Agreements of Purchase and Sale of Land, Di Millo v. 2099232 Ontario Inc., 2018 ONCA 1051, 1179 Hunt Club Inc. v. Ottawa Medical Square Inc., 2019 ONCA 700, Domicile Developments Inc. v. MacTavish (1999) 45 O.R. (3d) 302 (C.A.), Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, Davies v. Clarington (Municipality), 2009 ONCA 722, Standard Life Assurance Company v. Elliott (2007), 86 O.R. (3d) 221 (SCJ), Osmani v. Universal Structural Restorations Ltd. et al., 2023 ONSC 1041, Best v. Lancaster, 2015 ONSC 6269, Brad-Jay Investments Limited v. Village Developments Limited, 2006 CanLII 42636 (ON CA)

Bank of Montreal v. Iskenderov, 2023 ONCA 528

Keywords: Contracts, Debtor-Creditor, Enforcement, Real Property, Fraudulent Conveyances, Civil Procedure, Limitation Periods, Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, Real Property Limitations Act, R.S.O. 1990, c. L.15, s 4, Bankruptcy and Insolvency Act, R.S.C. 1985, c B-3, s 178, Fraudulent Conveyances Act, R.S.O. 1990, c. F.29, Rules of Civil Procedure, r. 48.14, Anisman v. Drabinsky, 2021 ONCA 120, Grant Thornton LLP v. New Brunswick, 2021 SCC 31, 572383 Ontario Inc. v. Dhunna (1987), 24 C.P.C. (2d) 287 (Ont. S.C.), Trites v. Humphreys (1899), 2 N.B. Eq. 1, Three Towns Banking Co. v. Maddever, (1884) 27 Ch. D. 523 (U.K. C.A.), Brown v. Weil (1927), 61 O.L.R. 55, Perry, Farley & Onyschuk v. Outerbridge Management Ltd. (2001), 54 O.R. (3d) 131 (C.A.), Conde v. Ripley, 2015 ONSC 3342, Toronto Standard Condominium Corporation No. 1703 v. 1 King West Inc., 2010 ONSC 2129, Wilfert v. McCallum, 2017 ONSC 3853, Indcondo Building Corporation v. Sloan, 2010 ONCA 890, Pantziris v. 1529439 Ontario Limited, 2021 ONCA 784, Anisman v. Drabinsky, 2020 ONSC 1197, Anisman v. Drabinsky, 2021 ONCA 120, Elford v. Elford, (1922) 64 S.C.R. 125, Re Lawrason's Chemicals Ltd. (1999), 127 O.A.C. 51 (C.A.), Guthrie v. Abakhan & Associates Inc., 2017 BCCA 102, McConnell v. Huxtable, 2014 ONCA 86, Equitable Trust Co. v. Marsig, 2012 ONCA 235, Zabanah v. Capital Direct Lending Corp., 2014 ONCA 872, Waterstone Properties Corporation v. Caledon (Town), 2017 ONCA 623, Metropolitan Toronto Condominium Corporation No. 1067 v. L. Chung Development Co. Ltd., 2012 ONCA 845, Beniuk v. Leamington (Municipality), 2020 ONCA 238, Scicluna v. Solstice Two Limited, 2018 ONCA 176, Bakhsh v. Merdad, 2022 ONCA 130, Studley v. Studley, 2022 ONCA 810, Duggan v. Durham Region Non-Profit Housing Corporation, 2020 ONCA 788, Harvey v. Talon International Inc., 2017 ONCA 267, 313473 Ontario Ltd. et al. v. Lornal Construction Ltd. et al. (1976), 18 O.R. (2d) 374 (Div. Ct.)., McGuire v. Ottawa Wine Vaults Co. (1913), 48 S.C.R. 44, Frauds on Creditors: Fraudulent Conveyances and Preferences, loose-leaf (Toronto: Thomson Reuters, 2023), The Law of Declaratory Judgments, 4th ed. (Toronto: Thomson Reuters, 2016)

Short Civil Decisions

10720143 Canada Corp. v. 2698874 Ontario Inc., 2023 ONCA 521

Keywords: Civil Procedure, Costs, Substantial Indemnity, Partial Indemnity, Bayford v. Boese, 2021 ONCA 533

Thangavel v. Bowmanville Lakebreeze West Village Ltd., 2023 ONCA 516

Keywords: Contracts, Real Property, Mortgages, Enforcement, Illegality, Interest, Civil Procedure, Appeals, Fresh Evidence, Interest Act, R.S.C. 1985, c. I-15, s. 8, Palmer v. The Queen, [1980] 1 S.C.R. 759

CIVIL DECISIONS

Oliveira v. Oliveira, 2023 ONCA 520

[Feldman, Lauwers and Roberts JJ.A.]

COUNSEL:

M. O., appellant, acting in person

M. D. Wright and Y. Kodsy, for the respondents J.O. and L.C. on their own behalf and on behalf of all members of Labourers International Union of North America, Local 183

M. Dockendorff and C. You, for the respondents All Industries LiUNA CECOF

FACTS:

The appellant commenced a wrongful dismissal action after being terminated from his job as a union organizer for the respondent, LiUNA Central and Eastern Canada Organizing Fund II ("CECOF"). The appellant, a member of the respondent construction union, Local 183, reported he was being physically harassed and threatened by his supervisor. After an investigation and confidential report which substantiated the appellant's allegations, his supervisor was fired. Almost a year later the appellant's employment was terminated.

As part of the document production in the appellant's wrongful dismissal action, he was provided with a copy of the confidential report from his complaint against the supervisor. The appellant sent that report to the Toronto Star and two other non-parties. After refusing to retract the delivery of the report, the respondents brought a motion for breach of the deemed undertaking rule in November 2018. That motion was not heard until September 2021. The motion judge found a serious breach of the deemed undertaking rule and struck the appellant's pleadings with a costs award of over $36,000.

By the time the motion was heard in September, the appellant was involved in two more related matters. The first was a defamation suit brought by the Business Manager for the respondent Local 183 after the appellant widely disseminated allegations he was a pedophile after his membership in the union was terminated. This resulted in summary judgment being granted against the appellant, together with a permanent injunction, and costs of over $51,000.

The second related matter came about after the appellant was asked to pay the judgment from the defamation action. In response, the appellant threatened to send the allegations for which he was sanctioned out to Local 183's over 10,000 members, implying he had a contact list. Local 183 requested interlocutory relief and an order was made that the appellant immediately return the confidential contact information. Prohibition from using or retaining the information and a forensic inspection of all the appellant's devices and email accounts to ensure deletion was also ordered. Despite a further order for compliance the order was not complied with, and the appellant was found in contempt in February of 2021. His sentencing was deferred to allow him an opportunity to purge his contempt. The appellant then destroyed his devices and refused to give his email password for the forensic inspection. The sentencing judge ordered the appellant to serve 89 days in jail intermittently and to pay costs of $75,000.

The appellant appealed the order striking his pleadings and the finding of contempt.

ISSUES:

Did the motion judge err in finding that the report was protected by the deemed undertaking rule?
Did the motion judge err in the exercise of her discretion by striking out the wrongful dismissal action as a remedy?
Did the motion judge err in exercising her discretion in awarding costs in the wrongful dismissal action?
Did the contempt motion judge err in finding that the appellant was in contempt?
Did the sentencing judge err in her approach to imposing an appropriate and fair sentence for the appellant's contempt?
Did the sentencing judge err in awarding costs?

HOLDING:

Appeal allowed in part.

REASONING:

Did the motion judge err in finding that the report was protected by the deemed undertaking rule?

No. The Court held that the finding that the Report was produced as a document on discovery and was subject to the deemed undertaking rule codified in subrule 30.1.01(3) of the Rules of Civil Procedure was irrefutable.

The Court rejected the appellant's argument that the Report was not subject to the deemed undertaking rule because its disclosure was required under the Occupational Health and Safety Act. The Court held that the appellant's employer made it clear that the report was prepared in confidence, and he never sought to use subrule 30.1.01(8) to disclose it. The Court also rejected the appellant's argument that the report was not covered by the deemed undertaking rule because it related to criminal conduct finding that, as Binnie J. stated in Juman: "[t]he rules of discovery were not intended to constitute litigants as private attorneys general."

2. Did the motion judge err in the exercise of her discretion by striking out the wrongful dismissal action as a remedy?

No. The Court found no error in the logic employed by the motion judge in her analysis of the options for a remedy.

The Court held that striking a claim is one of the basic remedy options prescribed by the Supreme Court and the Court for breaches of the deemed undertaking rule. The Court found that the motion judge turned her mind to alternative remedies, and provided reasons why they would not be appropriate.

3. Did the motion judge err in exercising her discretion in awarding costs on the motion to dismiss the wrongful dismissal action?

No. The Court held that Costs are in the discretion of the motion or trial judge.

The motion judge considered the factors in r. 57.01(1) of the Rules of Civil Procedure, the appellant's modest means, his unreasonable litigation conduct that led to his claim being struck, and his partial success in opposing the motion to strike parts of his affidavit. The Court held that the motion judge's costs award of $36,725 was reasonable considering that $64,856.46 was requested as a partial indemnity amount.

4. Did the contempt motion judge err in finding that the appellant was in contempt

No. The Court held that a court order must be obeyed unless stayed by a rule or by another order and the filing of a motion for leave to appeal does not have that effect.

The Court rejected the appellant's argument that the orders were not clear and unequivocal, that he did not understand that he could not send a copy of the confidential list to the Divisional Court when seeking leave to appeal the order, that he was not clear on the date by which he had to destroy the confidential list in his possession and, that he was complying with court orders. The Court found that there was no merit to these arguments because the contempt finding was based on the fact that the appellant had retained a copy of the confidential list when he filed his appeal. Further, he had not delivered his electronic devices for inspection by the date of the contempt hearing. The Court further rejected the appellant's argument that the contempt hearing was premature, and the orders were effectively stayed as they remained subject to adjudication.

5. Did the sentencing judge err in her approach to imposing an appropriate and fair sentence for the appellant's contempt?

Yes. The Court found that the sentencing judge made errors in her decision to incarcerate the appellant and thus the sentence was set aside.

The six relevant factors to determine an appropriate sentence for civil contempt were set out in Boily v. Carlton Condominium Corp. The Court found that the aggravating factors were clear – the appellant had exhibited a disregard for court processes and had been subject to a contempt order for a prolonged period. The mitigating factors were the appellant's financial, health and family responsibility circumstances. Further, the Court took into consideration the unique feature that the appellant had his wrongful dismissal action against the respondents struck out with costs. The Court held that the imposition of a term of incarceration in this case was not a reasonable penalty in the circumstances. The Court imposed a conditional sentence of house arrest for 14 days.

6. Did the sentencing judge err in awarding costs?

Yes. The Court held that the motion judge did not factor in other punitive measures, such as the imposition of a period of incarceration.

The Court found that although an award of costs is a discretionary order, the motion judge's reasons and analysis consisted of the fact that two orders were breached, the costs were high because of the appellant's conduct, and that the appellant did not realize he was in contempt. The Court held that the principle of proportionality must still be a guiding factor in dealing with all aspects of a contempt hearing, including costs. The Court reduced the costs ordered from $75,000 to $50,000, all inclusive.

Froom v Lafontaine, 2023 ONCA 519

[Feldman, Lauwers and Roberts JJ.A.]

COUNSEL:

L. Hansen and G. R. Oddy, for the appellant 1285310 Ontario Limited
J. M. Butson and C. Internicola, for the respondent R. S.
K. Juriansz, for the respondent S. L.
J. Claydon, for the Director of Land Titles
P. Smiley, for the respondent A. F.

FACTS:

In 1992, SL married AF. In 1998, 1285310 Ontario Limited ("128") was incorporated. In 2003, AF arranged for 128 to purchase a condominium in Toronto (the "Property") as the registered owner. In 2006, 128 was cancelled since it failed to file corporate returns, however, 128 remained the Property's registered owner. In 2010, 128 was revived and in 2011 SL registered a change notice with the Ministry of Government Services naming her as sole officer and director of 128.

In August 2013, AF initiated divorce proceedings against SL. On August 8, 2014, SL, on behalf of 128, entered into a mortgage loan agreement with RS that was registered against the Property for $100,000. SL guaranteed the mortgage, which was later increased to $300,000. By March 2019, SL defaulted. In April 2019, RS started a mortgage enforcement action (the "Mortgage Action") against 128 and SL seeking payment of more than $300,000 and possession of the Property.

In August 2021, RS moved for summary judgment in the Mortgage Action. 128, supported by AF, opposed arguing that the mortgage was void because it was a "fraudulent instrument" under the Land Titles Act ("LTA"). 128 alleged that SL was a "fraudulent person" under the LTA because she fraudulently held herself out to RS as an officer and director of 128. 128 alleged that AF was its sole shareholder, officer, and director when the mortgage was granted, and that SL had no authority to act for the corporation.

The motion judge granted summary judgment in RS's favour, ordering 128 and SL to pay RS $303,279.21 plus interest, directing 128 to deliver the Property to RS, and issuing a writ of possession for the Property. In his view, even if SL's actions were in fraud of 128, the operation of the LTA protected RS, not 128.

ISSUES:

Did the motion judge err in finding that the charge was not a "fraudulent instrument" under the LTA?
Did the motion judge err in holding that the doctrine of "deferred indefeasibility" had no application?
Did the motion judge err in granting partial summary judgment to RS?

HOLDING:

Appeal dismissed.

REASONING:

The Court reiterated that the "essential purpose of land titles legislation" like the Act "is to provide the public with security of title and facility of transfer". The Act embodies three basic principles: the mirror principle, i.e., that the register of title reflects accurately and completely the state of title; the curtain principle, i.e., that the register is the sole source of information regarding title such that a person need not search behind the title and investigate the property's history; and the insurance principle, i.e., that the state guarantees the accuracy of the register and compensates any person who suffers loss as the result of an inaccuracy. The LTA does not provide a remedy for all frauds, and the fact that a fraud might have been perpetrated is not in itself enough to invalidate an instrument.

128 relied on s. 1 of the LTA which defines "fraudulent instrument" as an instrument "under which a fraudulent person purports to receive or transfer an estate or interest in land". The Court noted that the issue raised by 128 was about whether a court should invalidate an instrument on the basis that a party fraudulently misappropriated corporate authority.

To the extent 128 contended that it was itself a fraudulent person when SL acted on its behalf, the Court held that this argument assumed that a corporation could be a "fraudulent person". Although the Act occasionally uses the term "person" to refer only to a natural person, the Act overwhelmingly applies the term non-restrictively to include corporations.

The Court noted that "fraudulent instrument" is a "narrowly defined term," and that each of the three definitions of "fraudulent person" should be construed narrowly. The mortgage was purportedly granted by 128, acting through SL, rather than by SL personally. Accordingly, having established that the appellant, as a corporation, could be a "fraudulent person", the question was then whether either 128 or SL was, in fact, a "fraudulent person" at the relevant time.

The Court held that it did not follow that 128 or SL forged the instrument, were fictitious persons, or were persons that held themselves out to be the owner knowing they were not. The Court rejected 128's argument that the "fraudulent person" was 128 acting through SL, or SL herself, because she fraudulently obtained control of the corporation and did not have actual authority.

The Court, citing 1168760 Ontario Inc., noted that a forgery "is an issue of authenticity, not truth". In 1168760 Ontario Inc., the Divisional Court stated that the 2006 amendments to the LTA narrowly targeted certain kinds of fraud and not real estate fraud at large. The Court found that neither 128, acting through SL, nor SL herself, was a "person [who] forged the instrument". SL had apparent authority to act on behalf of the corporation and there was no question as to the authenticity of the documents she executed. While the issue of whether SL fraudulently registered a notice of change with the Ministry of Government Services to make herself the sole officer and director of 128 remained to be determined, the Court found that this did not change the fact that the mortgage executed on behalf of 128 was authentic. Her subsequent action of taking out the mortgage against the Property on behalf of 128 did not constitute a forgery under the LTA.

The Court noted that the expansive approach to the interpretation of "fraudulent person" argued by 128 offended the indoor management rule. Under the indoor management rule, if a corporation holds someone out as a director, officer, or agent to a third party, the corporation cannot deny that the person has the authority usual for the position. The third party is entitled to assume that the corporation's internal procedures have been complied with unless the third party knew or ought to have known otherwise.

If the court treated a document authorized by a director or officer who fraudulently obtained control of a company as a forgery, it would mean that those transacting with corporations would potentially have to look behind the corporate register to ensure that the director or officer was duly appointed and authorized to enter into the transaction contrary to the indoor management rule.

Accordingly, the Court held that SL was authorized to act for 128, even if her control of 128 was obtained through fraudulent means. Accordingly, the mortgage was authentic.

The second avenue for 128 or SL to have been a "fraudulent person" under the LTA was as a "fictitious person" through SL's fraudulent actions. While "fictitious person" is not defined in the LTA, there is no dispute that both 128 and SL do in fact exist. The Court rejected 128's argument that SL assumed a false identity as a director and officer of the corporation, thus creating a fictitious persona attached to 128 and transforming her and the company into a fictitious person.

The Court held that 128, acting through SL, was not a "fictitious person". 128 was a valid and subsisting corporation. It was not posing as a non-existent entity when the mortgage was registered. Even accepting the allegation that SL fraudulently obtained control of the corporation, it did not change the fact that 128 was a real and subsisting corporation and the true owner of the Property and thus not "fictitious". To hold otherwise would be inconsistent with the plain and ordinary meaning of the word "fictitious" and the purpose of the LTA.

Similarly, the Court rejected the proposition that SL herself was a "fictitious person" within the meaning of the LTA. As the motion judge observed, "SL exists and is a real person." The Court noted that this remained true even if 128 were successful in establishing that SL fraudulently obtained control of the corporation.

The third avenue for 128 or SL to have been a "fraudulent person" was under s. 1(c) wherein "the person holds oneself out in the instrument to be, but knows that the person is not, the registered owner of the estate or interest in land affected by the instrument". The Court found that the provision did not apply to SL since she never held herself out to be the registered owner of the Property. Instead, she purported to act for the registered owner, 128.

The Court found that s. 1(c) did not apply to 128, acting through SL. The Court noted that the plain text of the provision refers to a person, not a person who fraudulently obtains control of a person. There was no dispute that 128 was the registered owner of the Property. A person cannot falsely hold itself out as something that it actually is. SL never claimed that she owned the Property. Her claim was that she was a director of the corporate owner.

Under the doctrine of deferred indefeasibility, the mere registration of an instrument that is void because of fraud does not cure the defect for the party who immediately acquires the property by means of that fraudulent instrument, but the next person dealing with the property may rely on the fraudulent document and its registration and takes good title. The Court stated that there was little doubt that the Act incorporated the doctrine of deferred indefeasibility. The Act operates to put the obligation on the party acquiring the interest in land to ensure that it acquires that interest from the true owner.

The Court rejected 128's argument that it would be consistent with the purpose of deferred indefeasibility for the Court to exercise its residual discretion to protect an innocent party like 128 against fraud. First, 128 did not claim that there was a defect in title to the Property and that RS had notice of that defect. To the extent actual notice of a defect may defeat the interest of a bona fide purchaser or encumbrancer for value with notice of the defect, the principle did not apply.

128 argued that since RS was the immediate, instead of deferred, encumbrancer, the mortgage was not valid in her favour. The Court held that the doctrine of deferred indefeasibility concerns fraudulent, and thus invalid, instruments. It is not the case that any instrument is invalid as against the immediate person who registers it simply because that person is the first to deal with it.

The Court noted that applying the doctrine of deferred indefeasibility would have been inconsistent with the doctrine's own underlying principles. The doctrine is premised, in part, on the principle that, as between two innocent parties, the party who, by due diligence, has an opportunity to uncover and possibly prevent the risk of fraud ought to be the one who bears it. While the motion judge's findings of fact were limited, given that his analysis proceeded on the assumption that 128's allegations are true, it was notable that there was no allegation that RS should have been aware of the alleged fraud. To the contrary, RS's evidence was that her counsel conducted a search of the corporation and obtained corporate documents which identified SL as the director and officer of 128 and did not disclose any obvious fraud.

The Court held that the motion judge instructed himself on the correct legal principles for granting or refusing partial summary judgment and made no error. The standard of review of a decision to grant summary judgment is deferential, unless there are extricable errors. The motion judge determined that a trial was required "on the issue of whether AF or SL owns the company." However, he found that RS's motion for summary judgment raised an issue that was "easily bifurcated from the remaining litigation". The Court agreed

Mondal v. Kirkconnell, 2023 ONCA 523

[Simmons, Huscroft and Coroza JJ.A.]

COUNSEL:

N. Tourgis, for the appellants in C70468
K. Sherkin and M. Walwyn, for the appellants in C70482
N. Kolos and L Malatesta, for the respondents R. K. and M. S.
M. McCann, for the respondents S. E.B. and K. E.B

FACTS:

The focus of the defamation action against the first defendant, the respondent E.B., was a June 11, 2021 "tweet". The appellant tweeted a picture in which he posed with the Ontario Premier and Minister of Education. E.B. tweeted in response, criticizing the Premier and Minister as "known homophobic conservative politicians", adding: "If you support them, you are for homophobia."

A series of tweets between the parties followed, culminating in E.B.'s June 11, 2021, tweet referring to the appellant. In response, the appellant tweeted that E.B.'s tweets were unacceptable, malicious, and outrageous, and strongly denied that his clinic discriminated against gay people.

The focus of the defamation action against the second set of defendants, K. & S., was an email message they sent to the members of the Guelph Family Health Team, whose physician members refer patients to the appellant's clinic. The message attached a screenshot of E.B.'s first June 11, 2021 tweet with the screenshots of the appellant's prior tweets.

Both actions were dismissed following motions brought by the respondents under the Anti-SLAPP provisions in s. 137.1 of the Courts of Justice Act ("CJA").

The motion judge found that the respondents' communications were expressions on a matter of public interest. He was therefore required to dismiss the defamation actions unless the appellant met the merits-based and public interest hurdles established by s. 137.1(4)(a) and (b).

The motion judge found there were grounds to believe the communications were defamatory and that the appellant could establish that he had suffered economic harm as a result. However, the motion judge also found that there was "every reason to believe" that the respondents' communications were protected as fair comment. Thus, the appellant failed at the merits-based hurdle of CJA s. 137.1(4)(a)(ii). This was a sufficient basis to grant the respondents' motions to dismiss the proceedings and the motion judge did not go on to consider the public interest hurdle under s. 137.1(4)(b) – specifically, whether the public interest in permitting the appellant's defamation actions to continue outweighed the public interest in protecting the respondents' expression

ISSUES:

Did the motion judge err in ruling that the appellant failed the merits-based hurdle of demonstrating that the respondent E.B. had no valid defence in the proceeding under the CJA 137.1(4)(a)(ii)?
Did the motion judge err in ruling that the appellant failed the merits-based hurdle of demonstrating that the respondents K. & S. had no valid defence in the proceeding under the CJA 137.1(4)(a)(ii)?
Did the appellant meet the burden to establish under s. 137(4)(b) of the CJA that the public interest in permitting a proceeding to continue outweighed the public interest in protecting the respondents' expression?

HOLDING:

Appeal allowed in the E.B. matter. Appeal dismissed in the K. & S. matter.

REASONING:

The Court noted that the bar cannot be set too high at the merits-based hurdle of a s. 137.1 analysis. The plaintiff was not required to establish that the defendant had no valid defence to an action. Section 137.1 required only that the plaintiff establish that there are grounds to believe that the defendant had no valid defence. All that was required to satisfy s. 137.1(4)(a)(ii) was a determination that there was a basis in the record and the law for concluding that the defences asserted would not succeed.

The appellant argued that the motion judge failed to consider whether E.B.'s expression was motivated by malice, and as a result failed to determine whether there were grounds to believe that she had no valid fair comment defence. E.B. argued that the motion judge addressed and rejected malice in his reasons.

The Court held that the motion judge did not explain why the appellant had not established grounds to believe that the respondents' fair comment defences could not succeed. Instead, the Court noted that the motion judge emphasized the rough and tumble nature of Twitter discourse, in essence suggesting that the appellant brought the problem on himself.

The Court disagreed with this emphasis. The appellant was required to establish only, on a standard less than the balance of probabilities, grounds to believe the respondents had no valid defence. He was not required to establish that the respondents' fair comment defence would inevitably fail.

The Court held that when applying the proper test, there were grounds to believe the respondent E.B.'s fair comment defence would not succeed. Her decision to tweet screenshots of tweets the appellant had long since removed supported the argument that her actions were motivated by spite or ill-will. So did her prior tweeting history, which contained extensive personal invective and accusations against the appellant. The appellant often responded in kind. However, the Court noted that a fair comment defence can be defeated by malice if a defendant acts "out of revenge in order to obtain satisfaction for some personal resentment or grudge": Zoutman v. Graham.

The Court held that the appellant cleared the merits-based hurdle by establishing that there were grounds to believe that E.B.'s fair comment defence would not succeed.

The Court noted that the defence of fair comment depends on whether any person could honestly make the comment on the proved facts, and the relevant facts in this matter did not appear to be in dispute. All that mattered was whether the respondents held the view they expressed in their comment. There was no requirement that a comment be considered "fair" in some objective sense.

The Court discussed how the appellant did not allege spite or ill-will, indirect motive, ulterior purpose, or dishonesty. He argued that malice arose from the respondents' reckless actions in sending the impugned email. The Court noted that the argument for recklessness must be understood having regard to the context in which the comments were made: WIC Radio. It may be that in some contexts, a failure to inquire into the truth of a matter may give rise to a finding of recklessness, and hence malice, but it did not in this case. The Court held that the respondents were not required to know the truth of the facts when their email message was sent. It was enough that they had an honest belief in the factual foundation for the email.

The Court noted that K. & S.'s email did not attest to the factual accuracy of the appellant's deleted tweets featured as screenshots in E.B.'s June 11, 2021 tweet. It simply drew them to the attention of those who received the email, leaving it to them to decide how to proceed. The Court held that the appellant had not succeeded in establishing grounds to believe that K. and S.'s fair comment defence would not succeed because of recklessness.

(i) The public interest in permitting the appellant's action to proceed

The Court agreed that the burden was on the plaintiff to establish under s. 137.1(4)(b) that the public interest in permitting a proceeding to continue outweighed the public interest in protecting the defendant's expression.

The Court expressed that the starting point for this analysis was general damages, which were presumed to follow from defamatory expression. The presumption of such damages did not establish their magnitude.

The Court recounted that E.B.'s June 11, 2021 tweet was sent by email to over 90 family physicians and health professionals serving 120,000 patients who were potential referrals. An email from six of those physicians indicated that they were disassociating from the appellant as a result of the tweets, emphasizing that they needed a safe space for their patients. The Court highlighted that the motion judge noted that at least one physician would no longer refer patients to the appellant's clinic. The Court held that in these circumstances, the result was likely significant, rather than nominal, harm to the appellant's reputation.

The Court disagreed with the motion judge's decision to not distinguish the damages suffered having regard to the expression of each respondent. As the appellant's business operates on the basis of referrals from physicians, the Court noted it was reasonable to infer that the appellant had likely suffered harm and that the harm was significant to the appellant's business.

The Court held that the appellant was required only to provide evidence permitting the court "to draw an inference of likelihood in respect of the existence of the harm and the relevant causal link". The Court held that he had succeeded in doing so.

(ii) The public interest in protecting the respondent E.B.'s expression

The Court noted that the public interest in protecting E.B.'s expression required consideration not only of the quality of that expression but the motivation behind it.

The Court held that the public interest in protecting E.B.'s expression must be understood having regard to the context of the tweeting relationship between the parties. The Court highlighted that E.B. and the appellant did not know each other.

The Court held that E.B.'s tweet was provocative behaviour – in essence, a gratuitous personal attack on a stranger. The appellant's earlier tweets were political in nature, but they were not directed at E.B. They were posted by the appellant to his Twitter account in 2019 and deleted not long after, according to the appellant, because he realized they were inappropriate and insensitive.

The Court discussed the respondent E.B.'s argument that Hansman v Neufeld was extremely similar to this case and should govern its outcome. The Court noted that the respondent emphasized that the Court must consider the importance of expression from members of historically marginalized communities and that her speech – not the appellant's – was under threat. The respondent argued that her commentary was "a form of public service announcement" and so attracted the same protection as the expression in Hansman v Neufeld.

The Court disagreed with E.B. This was not a case like Hansman, which involved political debate on a matter of public policy between participants in the political process – a debate conducted in the media involving a union leader and an elected school board official.

(iii) Weighing the public interest of both parties

The Court noted that the history of E.B.'s expression provided important context to assess the motivation behind her tweets. E.B. was a stranger to the appellant but commenced a campaign to denounce him. The Court noted that her expression was characterized by accusations and personal invective. She called the appellant a homophobe simply for posing with conservative politicians, called him a transphobe and a bully, among other things, and suggested that either he or those who work at his clinic will engage in discrimination against members of the LGBTQ community.

The Court held that the appellant had met his burden of demonstrating that the public interest in permitting his action to continue outweighed the public interest in protecting E.B.'s expression.

Hiawatha First Nation v. Cowie, 2023 ONCA 524

[Lauwers, Paciocco and Thornburn JJ.A]

COUNSEL:

M. Henderson and B. Chung for the appellants/respondents by way of cross-appeal
D. Golden and C. Pike, for the respondents/appellant by way of cross-appeal

FACTS:

The respondent, Hiawatha First Nation, is a band under the Indian Act (the "Act"). It is a small community located on the north shore of Rice Lake. On July 17, 2019, Hiawatha First Nation passed BCR 21/19 ("the resolution"), a resolution which imposed a moratorium on land development and the creation of new business without the band council's approval.

On August 2, 2019, the band council became aware that fuel storage tanks were being delivered to the appellant's property. The appellant had intentions of constructing a gas station on the reserve. Citing the resolution, the Chief took the position that the construction was unlawful and asked the appellant to stop all construction activities.

The respondent applied for a permanent injunction to restrain the appellant from continuing with the construction. The appellant then brought a counter-application in which they sought a declaration that the resolution was of no force and effect, and that they were entitled to develop and construct the gas station.

The application judge allowed the respondent's application in part and dismissed the appellant's counter application. On October 1, 2019, an interlocutory injunction stopped the construction of the gas station.

The appellant sought to set aside the injunction and a declaration that the resolution is unenforceable and not a by-law. In their cross-appeal, the respondent sought to challenge other holdings of the application judge in order to maintain the prohibition on further construction outside the current planning rules.

The underlying applications were heard on July 9, 2021. A new Hiawatha First Nation Land Code came into force on August 12, 2021. The appellant conceded that the new Land Code would apply to the gas station project even though it came into force after the application was heard but before the application judge rendered his decision. The application judge issued his decision on May 31, 2022.

The respondent elected not to pursue its cross-appeal on the undertaking that the appellant would not proceed with the project until the process under the Land Code had run its course.

ISSUES:

Did the application judge err in finding that BCR 21/19 was effectively a by-law under the Indian Act and enforceable as such by injunction?

HOLDING:

Appeal allowed. Cross-appeal dismissed.

REASONING:

The Court reviewed four governing principles necessary to determine whether the application judge erred in finding that the resolution was a by-law and thereby enforceable by injunction.

The principles of statutory interpretation respecting the Indian Act

The Court stated that the interpretation of legislation with respect to Indigenous people is to be interpreted broadly and in their favour. However, the Court found that the Act has internal tension between the power of a band to collectively govern and the proprietary rights of individual band members who hold a certificate of possession. The Court found that the rule of construction favours "Indian rights" but how it is to be applied is case specific and depends on relevant rights and interests, both collective and proprietary.

The legislative history of by-law making power and the role of resolutions in First Nations

The Court traced the history of powers assigned through the Act to band councils to create by-laws. The 1951 Act constituted a major reform where by-law making powers were given to band councils. Band councils may not make by-laws inconsistent with the Act or any regulation made by Governor in Council or the Minister.

Amendments to the Act in 2014 granted greater self-governance powers. These changes further relaxed the Minister's role in favour of increasing band council authority and autonomy. The 2014 amendments declared three categories of by-laws: (1) those passed under s 81 which deal with matters on the reserve; (2) those passed under s 83 which concern the raising and spending of money, the licencing of business, the appointment of officials and the appeal of assessments for taxation; and (3) those passed under s 85.1 which relate to intoxicants on the reserve.

The Court found that s 88 of the Act stated that valid by-laws have paramountcy over laws of general application of the province on the reserve. This potential legal effect of a by-law supportted a stricter reading of by-laws and what can constitute a by-law.

The function of resolutions

The Court found that there was a basic and principled distinction between a by-law and a resolution. The term resolution is not explicitly defined in the Act but is generally used in speaking of the actions of assemblies. Dually, the Court asserted that caselaw demonstrated that by-laws and resolutions are different and a band council resolution is not a by-law.

Land management by First Nation bands

The Court cited the Framework Agreement on First Nation Land Management Act as having provided greater autonomy for First Nations respecting reserve lands. It involves the adoption of a Land Code which enables a First Nation to enact "First Nation law" for the reserve with respect to zoning, development, and subdivision control. This code escalated the law-making function beyond the by-law making power under the Act.

The Principles Applied

The Court found that the application judge erred in ruling that the resolution could be considered a by-law enforceable under s 81(3). First, there is a fundamental difference between a by-law and a resolution. Second, a band council's passage of a by-law is an act of law-making, whereas the passage of a resolution is an expression of the band council's will that cannot create rights and duties. Third, this case involved potential legal interference with proprietary rights and as such, the distinction between a by-law and resolution was consistent with maintaining a high standard for substantiating an interference. Last, the fact that the band council might have publicized a resolution as it would a by-law did not have the effect of converting a resolution into a by-law.

Rahbar v. Parvizi, 2023 ONCA 522

[van Rensburg, Paciocco and Thorburn JJ.A.]

COUNSEL:

R. Hettiarachchi and R. Soni, for the appellants
A. Camman and J. Hawn, for the respondents

FACTS:

The appellants, ("the buyers"), entered into an agreement to purchase a residential property in Waterloo, Ontario (the "APS"). The deal did not close by the agreed time because their financing fell through. The respondents ("the sellers"), later sold the property to third parties at a higher price and kept the buyers' deposit monies.

The application judge found that the sellers were ready, willing and able to close at the agreed time, and were entitled to terminate the APS, which contained a "time of the essence" clause. He declined to order relief from forfeiture.

ISSUES:

Did the application judge err in concluding that the sellers were entitled to terminate the APS?
Did the application judge err in refusing to grant relief from forfeiture?

HOLDING:

Appeal Dismissed.

REASONING:

The Court agreed with the application judge's conclusion that the sellers were entitled to terminate the APS. The Court noted that a repudiatory breach does not in itself terminate a contract. The consequences of a repudiation depend on the election of the innocent party. If the innocent party accepts the repudiation, the contract is terminated. Alternatively, if the innocent party treats the contract as subsisting (i.e., affirms the contract), the contract is not terminated. The Court noted that, while the application judge was incorrect in stating that the sellers did not need to show that they were ready, willing and able to close by the closing deadline for the contract to be kept alive, the Court found that this error did not impact the ultimate conclusion.

The Court noted that there were two repudiations, and the sellers had an election to make after each repudiation. After the anticipatory repudiation (the first repudiation), the sellers elected to affirm the contract, and were ready, willing and able to close at the closing deadline. The buyers were unable to close by the closing deadline because they did not have the funds, not because of anything the sellers did. They were in breach when they could not close. The sellers then elected to accept this second repudiation. The Court held that because the sellers elected to accept the second repudiation, there was no breach of the duty of honest performance in contract.

In the Court's view, the application judge did not err in refusing to grant relief from forfeiture. The Court stated that a rationale for forfeiture of a deposit is the need to provide an incentive for the purchaser to complete the purchase. The Court considered the two factors in assessing whether relief from forfeiture pursuant to s. 98 of the Courts of Justice Act is appropriate, namely whether (i) the deposit is "out of all proportion" to the damages suffered by the vendor, and (ii) it would be unconscionable for the vendor to retain the deposit. The Court quoted that "the finding of unconscionability must be an exceptional one, strongly compelled on the facts of the case".

The Court stated that whether to grant or refuse relief from forfeiture is a discretionary decision to which deference was owed. The Court held that the application judge rightly acknowledged that the forfeited deposit was out of proportion to the damages suffered. However, that did not mean that it would be unconscionable for the sellers to retain the deposit. The application judge recognized that other relevant factors for assessing unconscionability include inequality of bargaining power, a substantially unfair bargain, the relative sophistication of the parties, the existence of bona fide negotiations, the nature of the relationship between the parties, the gravity of the breach, and the conduct of the parties. The Court held that the application judge found that there was no evidence to suggest that those factors created unconscionability in this case. This was a standard residential real estate purchase, albeit in a heated real estate market. The sellers' refusal to extend the closing could be described as "hard bargaining" but was not unconscionable. The Court held that the fact that the property was resold at a higher price also did not justify relief from forfeiture.

Aiello v. Bleta, 2023 ONCA 525

[Fairburn A.C.J.O., Thorburn and Coroza JJ.A.]

COUNSEL:

D. M. Lobl and K. Domratchev, for the appellants
E. Peritz and A. S. Graham, for the respondents

FACTS:

A dispute between two siblings, LB and BA, arose over companies bequeathed to them and other family members by their late father. The father owned three companies: Floriri Village Investments Inc. ("Floriri"), Niazi Holdings Inc. ("Niazi"), and Korce Group Ltd. ("Korce"). In 2014, the parties reached an agreement.

The central question before the trial judge was what the terms of that agreement were. At trial, LB, Niazi and Korce ("the appellants"), claimed there was no agreement as to ownership of the companies. BA, Floriri and Bleta Family Trust ("the respondents"), claimed that: (i) there was an agreement as to ownership of the companies such that BA would obtain exclusive ownership of Floriri; (ii) LB breached the terms of the agreement and his fiduciary duty to BA; and (iii) LB was unjustly enriched at BA's expense.

The trial judge granted judgment in favour of the respondents. She held that the parties agreed that BA would own and manage Floriri, while the appellant LB would own and manage Niazi and Korce. She further held that the respondent BA was vulnerable to LB, he owed her a fiduciary duty, and was unjustly enriched at her expense. Lastly, she held that the respondents' promissory estoppel claim was valid and not statute-barred.

ISSUES:

Did the trial judge err in finding that there was an agreement as to ownership of Floriri and was LB unjustly enriched at BA's expense?
Did the trial judge err in finding that LB breached his fiduciary duty to BA?
Was the claim for proprietary estoppel valid and if so, was it statute-barred?

HOLDING:

Appeal dismissed.

REASONING:

Did the trial judge err in finding that there was an agreement as to ownership of Floriri and was LB unjustly enriched at BA's expense?

No.

The appellants argued that the trial judge erred in holding that the agreement was to the ownership of the companies. The appellants also argued that following LB's accusation that BA misappropriated funds, the parties attempted to negotiate a split of management. On December 11, 2014, LB emailed a third party to advise that the siblings were "switching to sole management effective Friday. [BA] will confirm her choice." LB (who is a lawyer) then prepared resolutions wherein LB became a director of Niazi, and BA a director of Floriri. BA also signed an agreement resigning as a trustee of the Bleta Family Trust ("the Renunciation Agreement"). The Renunciation Agreement made no reference to Floriri.

The appellants took the position that the Renunciation Agreement and behaviour of the parties demonstrated that there was no agreement as to significant terms.

The Court reviewed the factual findings of the trial judge and held that an agreement was made and breached. First, the parties were in an acrimonious relationship and were trying to resolve their differences by separating their affairs, with BA resigning as Trustee of the Bleta Family Trust ("BFT"), in exchange for ownership interest in Floriri.

Second, BA did not disagree with the equalization amount when provided with the Draft Share Transfer Agreement. Rather, she asserted that the outstanding loans to Floriri be paid prior to the determination of the equalization amount.

Third, for seven years after signing the Renunciation Agreement, LB and BA had "unimpeded management and control over all aspects of the parties' respective holdings, with neither accounting to the other for any actions or decisions in relation to their respective holdings after 2014. This indicated that it was not likely a "temporary" arrangement.

Fourth, the trial judge accepted BA's evidence that while the Renunciation Agreement makes no reference to Floriri common shares, she did not relinquish her interest in the BFT "for free". The equitable principles in Pecore v Pecore presumes no gift was intended.

Fifth, the trial judge held there were no essential terms missing, and one signed document such as the Renunciation can be sufficient so long as the parties' intentions can be ascertained as to any further terms of the agreement.

The Court agreed with the trial judge's findings that BA and LB agreed that LB would release his interest in his common shares of Floriri in exchange for her whole interest in the BFT to be given to LB. The Court found that since the agreement was breached, the trial judge's finding of unjust enrichment was upheld.

Did the trial judge err in finding that LB breached his fiduciary duty to BA?

No.

The appellants claimed that the trial judge erred in finding that "LB took advantage of his sister's vulnerability and attempted to exercise control by acting in an intimidating manner." They claimed that the trial judge erred in law by failing to establish that there was any undertaking, express or implied, that LB use any discretionary power he had on BA's behalf.

The trial judge noted that a fiduciary duty may be found without an express undertaking where the alleged fiduciary (i) had some scope to exercise discretion or power; (ii) could exercise that power unilaterally to the detriment of the other party's legal or practical interests; and (iii) the other party was vulnerable to the exercise of that power or discretion. For there to be a fiduciary duty, the existence of a fiduciary undertaking on the part of the alleged fiduciary remains a necessary condition. However, "the fiduciary's undertaking may be implied in the particular circumstances of the parties' relationship" (Galambos).

The Court agreed with the trial judge's finding that the relationship had an implied understanding that LB would act in accordance with his duty of loyalty to his sister. Both parties conceded they trusted each other, and LB as a lawyer had scope to exercise his discretion as he drafted the corporate resolutions, the Renunciation Agreement and the Draft Share Transfer Agreement that delineated BA's rights and obligations. Further, LB knew that BA was vulnerable and would not allow her access to company funds to pay a lawyer knowing she could not pay for counsel alone and attempted to exercise emotional control over her.

Was the claim for proprietary estoppel valid and if so, was it statute-barred?

No and yes.

The Court found that the appellants were correct in noting that a promissory estoppel claim cannot be used as the basis of a cause of action to enforce a promise as it is to be used as a shield, not as a sword and means to establish contractual rights in the absence of an agreement. This claim was also statute-barred, as it was added by amendment years after the expiration of the limitation period and was only allowed to proceed subject to LB's limitation period defence.

However, the Court held that the dismissal of the claim did not affect the outcome. The trial judge's finding of an agreement as to ownership between LB and BA and that LB was unjustly enriched upon his breach of the agreement was dispositive of the appeal and sufficient to sustain the claim and relief granted.

More v. 1362279 Ontario Ltd. (Seiko Homes), 2023 ONCA 527

[Roberts, Miller and Coroza JJ.A.]

COUNSEL:

C. Stevenson and W. Jiang, for the appellant
A. Di Battista and S. Chahal, for the respondents

FACTS:

The respondents were purchasers of three adjacent townhomes built and sold by the appellant vendor, 1362279 Ontario Ltd., operating as Seiko Homes. They separately entered into identical Agreements of Purchase and Sale ("APS") with the appellant on December 29, 2019, with a closing date scheduled for October 1, 2020.

The transactions failed to close on October 1, 2020 because the appellant's receipt of the mortgage funds was delayed through no fault of the respondents. At 5:11 p.m., on that day, the appellant's real estate counsel faxed a letter to the respondents' real estate counsel terminating the APS. In the subsequent days, the appellant refused to close the transaction, attempted to return the mortgage funds and retained the deposit amounts that the respondents had provided pursuant to the APS.

The respondents and the appellant brought competing motions for summary judgment. Before the motion judge, the respondents sought specific performance of the three APS and the appellant sought dismissal of the action and forfeiture of the deposits. The appellant claimed that the respondents failed to close on the closing date because of the late delivery of the mortgage funds and thus, it was entitled to terminate the APS. The motion judge determined that there were no genuine issues for trial. He found that the respondents were ready, willing, and able to close the transactions while the appellant was unwilling to close and acted unreasonably in prematurely terminating the transaction. Accordingly, he granted specific performance to the respondents and dismissed the appellant's summary judgment motion. He awarded costs to the respondents on a substantial indemnity basis in the amount of $17,500.

ISSUES:

Did the motion judge err in finding that the appellant was in anticipatory breach of the three APSs?
Should the appellant be granted leave to appeal and should the costs award be set aside because the motion judge erred in principle in granting costs on a substantial indemnity basis?

HOLDING:

Appeal dismissed. Leave to appeal denied.

REASONING:

The Court noted that the appellant argued that the motion judge erred in finding that the proper closing time was midnight on October 1, 2020, and therefore, the appellant anticipatorily breached the APS by faxing a letter to the respondent terminating the transaction shortly after 5:00 p.m. The appellant contended that since the APS contained the "time is of the essence" clause, the timeline for closing was to be strictly enforced and that the respondents repudiated the agreement by failing to deliver the closing funds on the closing day. The appellant also pointed out that because the Teraview System does not permit transfers to be electronically registered past 5:00 p.m. on any business day, closing funds had to be tendered no later than 5:00 p.m.

The Court disagreed with the appellant's submission. The Court noted that as to the 5:00 p.m. deadline, the motion judge held that the appellant's position was contradicted by the Document Registration Agreement the appellant's real estate counsel prepared and delivered to the respondent, which provided that if the APS was silent on the time of closing, the deadline for "release" of funds from escrow would be 6:00 p.m. on closing day. The Court further noted that the motion judge found that the appellant could not rely on the "time is of the essence" clause since there was no specific time set out in the APS. The Court saw no error in that finding.

The Court drew attention to the fact that the motion judge also found that the appellant was not entitled to rely on the clause because it was "clearly not willing to close on the agreed date and terminated the transaction prematurely." The Court held that it was open to the motion judge to make those findings and saw no basis to intervene.

The Court saw no error in the motion judge's conclusion that the appellant acted unreasonably and in bad faith. The Court held it was open to the motion judge to find that purchase transactions would usually be honoured despite minor delays in the delivery of closing funds that the appellant "pounced on" in a "totally unexpected fashion". The Court noted that the motion judge accepted that during the pandemic, it was common practice for lawyers to work together to complete the rest of closing steps after the closing of the Teraview System and before midnight on closing day.

The Court further held that it was not necessary for the Court to decide definitively whether, as a matter of law, a purchaser can rely on the fact that their counsel is in receipt of closing funds in order to cure minor delays in delivering the funds to the vendor and/or the vendor's counsel.

In sum, the Court held that the motion judge did not err in finding that the appellant anticipatorily breached the APS before the midnight closing deadline and there was no basis to disturb the motion judge's finding that the appellant acted unreasonably and in bad faith.

The Court noted that appellate courts are deferential to discretionary costs orders made by first instance judges and would intervene only if the judge "has made an error in principle or if the costs award is plainly wrong": Hamilton v. Open Window Bakery Ltd.

The Court acknowledged that the reasons of the motion judge as to costs were brief and noted that costs are typically payable on a partial indemnity basis unless there are circumstances that justify a higher scale of costs, such as reprehensible, scandalous or outrageous conduct on the part of one of the parties.

The Court held that the test for leave is as follows: "Leave to appeal a costs order will not be granted save in obvious cases where the party seeking leave convinces the court there are 'strong grounds upon which the appellate court could find that the judge erred in exercising his discretion'": Brad-Jay Investments Limited v. Village Developments Limited.

The Court was of the view that this was not one of those "obvious cases". While brief, the motion judge's reasons, read functionally, revealed that he accepted the respondents' argument that an elevated level of costs was required because the appellant had acted unreasonably and in bad faith.

The Court held that ultimately, judges retain the discretion to award reasonable and proportional costs. The Court saw no basis to disturb the amount that the motion judge ultimately awarded to the respondents. $17,500 was a reasonable amount of costs considering that this was less than half of the amount the respondents sought on a substantial indemnity basis before the motion judge.

Bank of Montreal v. Iskenderov, 2023 ONCA 528

[Feldman, Lauwers, Huscroft, Roberts and Copeland JJ.A.]

COUNSEL:

P. Bakos, for the appellants
J. J. Siegel and A. Fox, for the respondent

FACTS:

The respondent bank, a creditor of RI, the appellant, sought to set aside as a fraudulent conveyance, RI's transfer of his residence to his wife, the appellant, EL. The action was commenced more than two years but less than ten years after the transfer. The appellants' position was that the claim was statute-barred under the Limitations Act, 2002 (the "LA") and that the Real Property Limitations Act ("RPLA") ten-year limitation period did not apply.

Pursuant to a separation agreement dated January 10, 2008, RI transferred his interest in their jointly held matrimonial home to EL. On April 28, 2008, RI defaulted on a $400,000 line of credit to the Bank of Montreal (the "Bank"), which he had obtained fraudulently. After the Bank obtained judgment against RI for $483,449.89 on January 14, 2009, he made an assignment into bankruptcy on March 24, 2009. He was discharged on November 22, 2012, at which time the stay of proceedings resulting from the bankruptcy was lifted by Court order to allow the Bank to proceed to enforce its judgment against him under s. 178 of the Bankruptcy and Insolvency Act, ("BIA"). The Bank commenced its action to declare the transfer of the home a fraudulent conveyance and to set it aside on June 18, 2013.

On February 17, 2015, pursuant to an application under s. 38 of the BIA, the Bank acquired from the Trustee the right to commence this action and on March 4, 2015, the Bank obtained an Assignment of the claim from the Trustee. The Bank obtained a certificate of pending litigation against the property on March 11, 2015.

ISSUES:

Did the motion judge err in law by following Anisman for the principle that the RPLA ten-year limitation period rather than the LA two-year limitation period applies to an action to declare a fraudulent conveyance of real property void as against creditors?
If the two-year limitation period applies, did the motion judge err by finding a triable issue regarding when the respondent Bank discovered the claim?
Did the motion judge make palpable and overriding errors with respect to his findings of fact related to the delays in the action?

HOLDING:

Appeal allowed.

REASONING:

The appellants argued that Anisman was not a binding authority of the Court because full reasons were not given and it was wrong in law, and that the Court should find that the two-year limitation period under the LA applied. They argued that Anisman was decided without the benefit of the relevant historical authority. The ten-year limitation period in s. 4 of the Real Property Limitations Act ("RPLA") does not apply to an action to declare a fraudulent conveyance of real property void as against creditors under s. 2 of the Fraudulent Conveyances Act ("FCA"). Instead, the two-year limitation period runs from the date the claim was discovered under s. 4 of the LA applied.

The Court noted that determining the limitation period applicable to fraudulent conveyance actions requires the Court to consider three factors: (1) the historical approach to the limitation period for these actions; (2) the nature of relief sought in a fraudulent conveyance action; and (3) the Court's approach to interpreting s. 4 of the RPLA. In the Court's view, each of these factors supported the same conclusion: the two-year period in the LA, not the ten-year period in the RPLA, applied to fraudulent conveyance actions under the FCA.

The Court noted that the limitation period for actions to "recover any land" did not historically apply to fraudulent conveyance actions, contrary to Anisman. In Anisman, the Superior Court found that s. 4 of the RPLA applied to a fraudulent conveyance action, following Conde. The Court clarified that while the decision was upheld on appeal by the Court, the Court (at the time) did not consider the relevant authority that pre-dated (and followed) Conde which effectively stood for the proposition that if a claim is brought under the FCA to set aside a conveyance of real property, such a claim is on its face a claim to 'recover any land' to which the RPLA applies a 10-year limitation period.

The Court noted that the relief sought in a fraudulent conveyance action under the FCA does not lead to "the recovery of any land". Section 2 of the FCA states: Every conveyance of real property or personal property and every bond, suit, judgment and execution heretofore or hereafter made with intent to defeat, hinder, delay or defraud creditors or others of their just and lawful actions, suits, debts, accounts, damages, penalties or forfeitures are void as against such persons and their assigns.

While some courts have ordered a reconveyance of the property subject of an impugned transaction back to the transferor, the section does not afford that remedy. Because a fraudulent conveyance is void only "as against creditors or others", the case law is clear that the transaction remains valid as between the transferor and the transferee.

The Court noted that the creditor does not recover land, in the sense of obtaining any rights to the land, either to the title or to possession, because a fraudulent conveyance is declared void. Neither does the transferor recover land. No land is obtained by the judgment of the Court. What occurs is that the creditors regain the ability to execute against the land for the payment of the debts owed to them by the transferor. The conveyance is set aside but only as against creditors or others.

The Court considered the applicability of s. 4 of the RPLA and the meaning of "an action to recover any land" in the context of actions other than fraudulent conveyance actions. The Court has interpreted this statutory language to apply to actions where the judgment of a court grants a property right in land or in money that was paid for land. In the Court's view, this did not align with the nature of the relief in a fraudulent conveyance action.

In summary, the Court's jurisprudence on the meaning of s. 4 of the RPLA when it considered actions in relation to real property that were not fraudulent conveyance claims is that "an action to recover any land", within the meaning of s. 4 of the RPLA, is one in which the judgment of the court grants a property right in land or in money that was paid for land.

Accordingly, the Court concluded that Anisman was wrongly decided and that the RPLA does not apply to fraudulent conveyance actions under the FCA. The Court noted that three conclusions flow from the case law interpreting s. 4 of the RPLA, the LA, and s. 2 of the FCA: (1) before the new LA no court applied s. 4 of the old LA (the current RPLA previously formed Part I of the Limitations Act, R.S.O. 1990, c. L.15, now s. 4 of the RPLA) to an action to set aside a fraudulent conveyance of real property. Because no other section of the old LA applied, there was no limitation period for a fraudulent conveyance action; (2) an order declaring a conveyance of real property void as against creditors or others does not return the property to the transferor. The title to the property remains with the transferee but because the transfer is set aside as against creditors or others, they may execute against the property in the hands of the transferee; and (3) in an action to "recover any land", within the meaning of s. 4 of the RPLA, the judgment of the court must grant a property right. It is not enough that the subject matter of the action is real property. These three propositions from the case law compel the conclusion that the ten-year limitation period under s. 4 of the RPLA does not apply to a fraudulent conveyance action under the FCA.

The Court held that the two-year limitation period in the LA applies. The Court noted two provisions of the new LA that could apply to a fraudulent conveyance action were s. 16(1)(a), where there is no limitation period, and s. 4, which provides the two-year limitation period subject to discoverability.

The Court ruled that the two-year limitation period applied, subject to discoverability.

Findings of fact from the evidentiary record are the province of the motion judge and are accorded deference by the Court. The Court stated that the discoverability issue became moot once the motion judge determined that the claim was subject to a ten-year limitation period.

The Court stated that the appellants did not seek the determination of discoverability in their Notice of Appeal and thus it was not properly before the Court. The Court ordered that the discoverability issue be decided at trial.

SHORT CIVIL DECISIONS

10720143 Canada Corp. v. 2698874 Ontario Inc., 2023 ONCA 521

[Doherty, Hoy and Favreau JJ.A.]

COUNSEL:

S. R. Fischhoff, for the appellants

J. Hamilton, for the respondents

Keywords: Civil Procedure, Costs, Substantial Indemnity, Partial Indemnity, Bayford v. Boese, 2021 ONCA 533

Thangavel v. Bowmanville Lakebreeze West Village Ltd., 2023 ONCA 516

[Miller, Harvison Young and Favreau JJ.A.]

COUNSEL:

I. J. Perry, for the appellants
A. Sondhi and R. L. Cons, for the respondent

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be ought about your specific circumstances.

Canada: Court Of Appeal Summaries (July 31 – August 4)
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CIVIL DECISIONS

SHORT CIVIL DECISIONS

Canada: Court Of Appeal Summaries (July 31 – August 4) Blaneys Appeals Blog

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Canada: Court Of Appeal Summaries (July 31 – August 4)
Blaneys Appeals Blog