Good afternoon.

Following are this week's summaries of the Court of Appeal for Ontario for the week of July 3, 2023.

In 9725440 Canada Inc. v. Vijayakumar, the Court considered the remedy of specific performance in failed real estate transaction. The Court had to consider the intentions for purchase of the property and whether the evidence supported a family home rather investment-driven purchase. The evidence of intention relied by the court below was inadmissible hearsay, accordingly, the Court set aside the order for specific performance.

In Falsetto v Falsetto, the Court had the opportunity to consider the presumption of resulting trust for a parent which arises when a parent gratuitously transfer property to their adult child. The appellant had transferred substantial assets to his son, who effected some of the transfers as his father's attorney. The appellant claimed that his son wrongfully misappropriated the monies, and the son claimed that the assets were gifts. The Court agreed with the court below that the appellant's son had rebutted the presumption of resulting trust, and proved that the impugned transfers were gifts made to him by his father. There was therefore breach of fiduciary obligations in making those transfers for his own benefit.

In a family law case, Ahluwalia v Ahluwalia, the Court held that the trial judge's decision to create a new tort, family violence, was unnecessary because the existing intentional torts of assault, battery and intentional infliction of emotional distress, properly applied, addressed the harm suffered by the wife in this case. The Court engaged in a lengthy analysis regarding the importance of addressing the pervasive social problem of intimate partner violence and on the shift away from the adversarial system and towards other forms of dispute resolution to address family disputes.

In Tega Homes (Attika) Inc. v. Spencedale Properties Limited, a case about the quantification of damages arising from the breach by a vendor under an agreement of purchase and sale of commercial land, the Court made some adjustments to the amount of damages awarded by the trial judge, but generally agreed with the trial judge's analysis..

In Primont (Castelmont) Inc. v. Friuli Benevolent Corporation, the Court agreed with the application judge that an easement providing for access did not also provide for parking over the easement lands..

Other topics this week included municipal liability related to a motor vehicle accident and specific performance.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Ines Ferreira
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

9725440 Canada Inc. v. Vijayakumar, 2023 ONCA 466

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Remedies, Specific Performance, Southcott Estates Inc. v. Toronto Catholic District School Board,  2012 SCC 51, Erie Sand & Gravel Limited v. Tri-B Acres Inc., 2009 ONCA 709, John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd. (2001), 56 O.R. (3d) 341 (Sup. Ct.), aff'd (2003) 63 O.R. (3d) 304 (C.A.), leave to appeal refused, [2003] S.C.C.A. No. 145, Lucas v. 1858793 Ontario Inc. (Howard Park), 2021 ONCA 52, Semelhago v. Paramadevan, [1996] 2 S.C.R. 415, Matthew Brady Self Storage Corporation v. InStorage Limited Partnership,  2014 ONCA 858, R. v. Khelawon,  2006 SCC 57,  R. v. Vickers, 2020 ONCA 275, R. v. F.(W.J.), [1999] 3 S.C.R. 569, Guest Tek Interactive Entertainment Ltd. v. Nomadix, Inc., 2020 FC 860, R. v. Belem, 2017 ONSC 2213, Barry J. Reiter and Robert J. Sharpe, Wroth v. Tyler: Must Equity Remedy Contract Damages?, (1978-79) 3 Can. Bus. L.J. 146

Falsetto v. Falsetto, 2023 ONCA 469

Keywords: Wills and Estates, Inter Vivos Transfers, Gifts, Donative Intent, Presumption of Resulting Trust, Powers of Attorney, Breach of Fiduciary Duty, Pecore v Pecore, 2007 SCC 17, Richardson (Estate Trustee of) v Mew, 2009 ONCA 403, Egli v Egli, 2004 BCSC 529, Housen v Nikolaisen, 2002 SCC 33, Farsi v Da Rocha, 2020 ONCA 92, Teixeira v Markgraf Estate, 2017 ONCA 819

Ahluwalia v. Ahluwalia, 2023 ONCA 476

Keywords: Family law, Intentional Torts, Assault, Battery, Intentional Infliction of Emotional Distress, Novel Torts, Family Violence, Coercive Control, Battered Women's Syndrome, Damages, Compensatory Damages, Aggravated Damages, Punitive Damages, Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), ss. 2 and 16, Children's Law Reform Act, R.S.O. 1980, c. 68, Family Law Rules, O. Reg. 114/99, General Recommendation No. 35 (2017), UN Doc. CEDAW/C/GC/35: Convention on the Elimination of All Forms of Discrimination Against Women ("CEDAW"), Schuetze v. Pyper, 2021 BCSC 2209, Michel v. Graydon, 2020 SCC 24, Frame v. Smith, [1987] 2 S.C.R. 99, Leitch v. Novac, 2020 ONCA 257, Leskun v. Leskun, 2006 SCC 25, Lo v. Lo (2009), 70 R.F.L. (6th) 309 (Ont. S.C.), Murray v. Toth, 2012 ONSC 5815, Jones v. Tsige, 2012 ONCA 32, Merrifield v. Canada (Attorney General), 2019 ONCA 205, Watkins v. Olafson, [1989] 2 S.C.R. 750, Non-Marine Underwriters, Lloyd's of London v. Scalera, 2000 SCC 24, Caplan v. Atas, 2021 ONSC 670, Alberta Health Services v. Johnston, 2023 ABKB 209, Nevsun Resources Ltd. v. Araya, 2020 SCC 5, Barker v. Barker, 2022 ONCA 567, Barker v. Barker, 2020 ONSC 3746, Prinzo v. Baycrest Centre for Geriatric Care (2002), 60 O.R. (3d) 474 (C.A.), Saadati v. Moorhead, 2017 SCC 28, N.C. v. W.R.B., [1999] O.J. No. 3633, C.S.F. v. J.F., [2002] O.J. No. 1350, O.O.E. v. A.O.E., 2019 SKQB 48, MacKay v. Buelow (1995), 11 R.F.L. (4th) 403 (Ont. Gen. Div.), Valenti v. Valenti (1996), 21 R.F.L. (4th) 246 (Ont. Gen. Div.), aff'd (1998) 41 R.F.L. (4th) 289 (C.A.), Dhaliwal v. Dhaliwal, [1997] O.J. No. 5964 (Gen. Div.), N.C. v W.R.B., [1999] OJ No 3633 (S.C.), Calin v. Calin, 2019 ONSC 3564, Jane Doe 72511 v. Morgan, 2018 ONSC 6607, Farkas v. Kovacs, [1989] O.J. No. 2387 (Dist. Ct.), S. (L.N.) v. K. (W.M.), 1999 ABQB 478, Van Dusen v. Van Dusen, 2010 ONSC 220, McLean v. Danicic (2009), 95 O.R. (3d) 570 (S.C.), Wandich v. Viele (2002), 24 R.F.L. (5th) 427 (Ont. S.C.), Rezel v. Rezel (2007), 37 R.F.L. (6th) 445 (Ont. S.C.), Warman v. Grosvenor (2008), 92 O.R. (3d) 663 (Sup. Ct), Young v. Borzoni, 2007 BCCA 16, Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, Bothwell v. London Health Sciences Centre, 2023 ONCA 323, Whiten v. Pilot Insurance, 2002 SCC 18, R. v. A.J.K., 2022 ONCA 487, R. v. Cunningham, 2023 ONCA 36, McNamee v. McNamee, 2011 ONCA 533, Martin v. Sansome, 2014 ONCA 14, Halliwell v. Halliwell, 2017 ONCA 349, Hon. Allen M. Linden, et al., Canadian Tort Law, 10th ed. (Toronto: LexisNexis, 2015), Allen M. Linden, Canadian Tort Law, 7th ed. (Markham, Ont.: Butterworths, 2001), Prof. G.H.L. Fridman, The Law of Torts in Canada (Toronto: Carswell, 1989), Diagnostic and Statistical Manual of Mental Disorders

Tega Homes (Attika) Inc. v. Spencedale Properties Limited, 2023 ONCA 475

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Joint Venture Agreements, Expectation Damages, Tega Homes (Attika) Inc. v. Spencedale Properties Ltd., 2018 ONSC 6048, Akelius Canada Ltd. v. 2436196 Ontario Inc., 2022 ONCA 259, 6472047 Ontario Ltd. v. Fleischer (2001), 56 O.R. (3d) 417 (C.A.), 100 Main Street Ltd. v. W.B. Sullivan Construction Ltd. (1978), 20 O.R. (2d) 401 (C.A.), PreMD Inc. v. Ogilvy Renault LLP, 2013 ONCA 412

Primont (Castelmont) Inc. v. Friuli Benevolent Corporation, 2023 ONCA 477

Keywords: Real Property, Easements, Interpretation, Re City of Burlington and Clairton Village, (1979) 24 O.R. (2d) 586 (Ont. C.A.), MacKenzie v. Matthews, [1998] O.J. 5342 (Gen. Div.), [1999] O.J. No. 4602 (C.A.), Moncrief v. Jamieson, [2007] U.K.H.L. 42, Fallowfield v. Bourgault, (2004), 68 O.R. (3d) 417 (C.A.), DeforestBros. v. Tuck, 2020 ONSC 6439

Short Civil Decisions

Wasylyk v. Simcoe (County), 2023 ONCA 473

Keywords: Torts, Negligence, MVA, Municipal Liability, Road Repair, Civil Procedure, Appeals, Appeal Book and Compendium, Evidence, Admissibility, Expert Evidence, Aides Memoire, Rules of Civil Procedure, r. 53.03, Moore v. Getahun, 2015 ONCA 55, 1162740 Ontario Ltd. v. Pingue, 2017 ONCA 52

Gu v. Nothdurft, 2023 ONCA 480

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Remedies, Specific Performance, Mason v. Freedman, [1958] S.C.R. 483, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Chan v. Mangal, 2022 ONSC 2068, 1954294 Ontario Ltd. v. Gracegreen Real Estate Development Ltd., 2017 ONSC 6369, Anne Warner La Forest, Anger & Honsberger Law of Real Property, 3rd ed. (Toronto: Thomson Reuters Canada, 2021) (loose-leaf updated 2022, release 1)

CIVIL DECISIONS

9725440 Canada Inc. v. Vijayakumar, 2023 ONCA 466

[Roberts, Nordheimer and Thorburn JJ.A.]

Counsel:

P. Summers and S. Deak, for the appellants

M. Wortzman and C. E. Allen, for the respondents

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Remedies, Specific Performance, Southcott Estates Inc. v. Toronto Catholic District School Board,  2012 SCC 51, Erie Sand & Gravel Limited v. Tri-B Acres Inc., 2009 ONCA 709, John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd. (2001), 56 O.R. (3d) 341 (Sup. Ct.), aff'd (2003) 63 O.R. (3d) 304 (C.A.), leave to appeal refused, [2003] S.C.C.A. No. 145, Lucas v. 1858793 Ontario Inc. (Howard Park), 2021 ONCA 52, Semelhago v. Paramadevan, [1996] 2 S.C.R. 415, Matthew Brady Self Storage Corporation v. InStorage Limited Partnership,  2014 ONCA 858, R. v. Khelawon,  2006 SCC 57,  R. v. Vickers, 2020 ONCA 275, R. v. F.(W.J.), [1999] 3 S.C.R. 569, Guest Tek Interactive Entertainment Ltd. v. Nomadix, Inc., 2020 FC 860, R. v. Belem, 2017 ONSC 2213, Barry J. Reiter and Robert J. Sharpe, Wroth v. Tyler: Must Equity Remedy Contract Damages?, (1978-79) 3 Can. Bus. L.J. 146

facts:

On June 8, 2017, the respondent's 50% shareholder and then sole director and officer ("Mr. L"), his son, and real estate agent, met with the appellants and their agent. On that day, the parties entered into an Agreement of Purchase and Sale ("APS") for the respondent's purchase of the appellants' family residence for $1,620,000.

Mr. L. signed the APS on behalf of the respondent corporation. The APS became binding on June 10, 2017. That same day, the appellants advised their real estate agent that they decided not to sell the property, and they refused to complete the sale on September 28, 2017, the scheduled closing date.

The respondent brought a motion for summary judgment which was dismissed on May 1, 2018. As framed by the parties, the principal issue was Mr. L's purpose in purchasing the property through the corporate respondent. The motion judge found that there was a significant credibility issue that could only be resolved by a trial. Specifically, he held that the key issue was whether Mr. L wanted the subject property for family purposes or as an investment opportunity. The motion judge dismissed the motion and ordered a trial.

The trial judge granted the respondent specific performance of the APS and awarded the respondent its costs in the all-inclusive amount of $150,000. The appellant appealed the order for specific performance and the respondent sought leave to cross-appeal on the issue of costs.

issues:

  1. Did the trial judge err in concluding that specific performance was available or appropriate in the circumstances of this case?

holding:

Appeal allowed. Cross-appeal dismissed.

reasoning:

  1. Yes

The Court held that a trial judge's determination that specific performance is an appropriate remedy would be subject to appellate deference because it is rooted in the facts of the case. The fundamental difficulty for the Court in this case was the absence of the evidentiary foundation to support the trial judge's conclusion that specific performance was the appropriate remedy. Mr. L. did not testify and there was no basis to accept the hearsay evidence of the son ofMr. L as to Mr. L's intentions with respect to the qualities of the property that supported its uniqueness as a family home.

The Court noted that the respondent's framing of this case drove the outcome on this issue. While the respondent is a corporation, it is a closely held family corporation. As a result, the respondent's intentions for the purpose of determining the uniqueness of the property to the respondent purchaser were the intentions of Mr. L., the sole officer and director and majority shareholder. It was Mr. L's intentions in purchasing the property that also informed the experts' opinions on the property's uniqueness and whether it was especially suitable for Mr. L's proposed use on behalf of the respondent such that it could not be readily duplicated elsewhere. Without Mr. L's evidence about the property's qualities that supported its uniqueness to him and the inadequacy of damages, the expert opinion lacked the necessary evidentiary foundation.

The Court was of the view that there were credibility issues with Mr. L. The appellants' counsel objected at the beginning of the examination in chief of the son of Mr. L to his testifying about "what the family wanted" because those were matters that were hearsay and not within his personal knowledge. The opinions of Mr. L's son about his father's intentions for purchasing the property were inadmissible hearsay and could not sustain a finding that the property was uniquely suited to Mr. L., and by extension, to the respondent's particular needs. Unlike Mr. L., Mr. L's son was not a director, officer or shareholder of the respondent at the time and could not speak to the respondent's intentions at the relevant time.

The Court held that contrary to his ruling and without conducting the necessary hearsay analysis, the trial judge accepted the evidence of Mr. L.'s son with respect to his father's intention to purchase a personal residence in which Mr. L and his wife could live and family members could visit.

By sustaining the appellants' objection, the trial judge accepted that the testimony of Mr. L's son went beyond his own personal knowledge was hearsay. As hearsay evidence, the evidence of Mr. L's son could only be admissible in place of Mr. L's evidence of the respondent's intention at the time of contracting if it were admissible under one of the established exceptions or the principled exception to the hearsay rule.

The Court held that none of the established hearsay exceptions applied. To be admissible under the principled exception to the hearsay rule, the evidence in question had to be necessary and reliable. To satisfy the necessity requirement, Mr. L. had to be truly unavailable to testify at trial either in person or by videoconference or teleconference as permitted under the Rules of Civil Procedure. A mere reluctance to testify does not constitute necessity. The Court concluded that the respondent could not demonstrate that Mr. L. was unavailable to attend trial.

The Court noted that the available admissible evidence of Mr. L's intentions did not support that he intended to purchase the property as a family home and that the particular qualities of the property made the property unique to him and the respondent. The Court concluded that they were left to infer the respondent's intent from its corporate structure and the expert opinion.

The Court held that the respondent's corporate structure supported the proposition that the respondent's intention was to purchase the property for investment purposes. Mr. L's son testified that the purpose of the respondent's incorporation was for estate planning for the family. This purpose was evident from the respondent's structure: it is a closely held corporation whose officers and directors are family members and whose corporate shareholders are wholly owned by the family and various family members.

The Court indicated that as a corporation, the respondent obviously could not live in a family home. It could not "fall in love" with a property. It can purchase and hold assets, including real estate, for estate planning purposes. In particular, the purpose of acquiring and holding onto assets that will increase in value was consonant with the respondent's objectives as a corporate structure. These objectives were investment objectives that can be compensated for by damages.

The Court was of the view that the expert evidence was consistent with the purchase of the property as an investment to earn a profit or capital gain. The expert testimony suggested that the most unique aspect of the property was its commercial development potential over several years' time. This was consistent with the respondent's estate planning objectives, as demonstrated by its corporate structure.

The Court held that the trial judge should have concluded that the respondent failed to demonstrate that specific performance was an appropriate remedy in the circumstances. The property's "particular qualities were only of value due to their ability to further profitability." Given the respondent's investment objectives and availability of funds to close another transaction, damages were an adequate substitute for the respondent's loss.

Falsetto v. Falsetto, 2023 ONCA 469

[Feldman, Gillese and Huscroft JJ.A.]

Counsel:

R. Murray, for the appellant

G. Conway, C. Trivisonno, and A. Barqawi, for, for the respondents

Keywords: Wills and Estates, Inter Vivos Transfers, Gifts, Donative Intent, Presumption of Resulting Trust, Powers of Attorney, Breach of Fiduciary Duty, Pecore v Pecore, 2007 SCC 17, Richardson (Estate Trustee of) v Mew, 2009 ONCA 403, Egli v Egli, 2004 BCSC 529, Housen v Nikolaisen, 2002 SCC 33, Farsi v Da Rocha, 2020 ONCA 92, Teixeira v Markgraf Estate, 2017 ONCA 819

facts:

Over a number of years, the appellant transferred substantial sums of money and some properties to his son, who effected some of the transfers as the appellant's attorney. The appellant's son used the monies to acquire and develop properties in and around Ottawa.

Years later, the appellant sued his son and several of his companies. The appellant claimed that he transferred the monies to his son so that he would acquire properties in trust for the appellant and that his son had wrongfully misappropriated the monies. The appellant also claimed that his son breached his fiduciary duties as the appellant's power of attorney. The appellant sought damages of over $12 million for breach of fiduciary duty, breach of trust, and unjust enrichment, and orders for an accounting, equitable tracing, and disgorgement of profits.

The appellant's son defended the action on the basis that the transferred assets were gifts to him. He said that, before each transfer, he confirmed with the appellant that the appellant intended the transfers to be gifts to him so he could buy properties, renovate them, and sell them. The sole exception was the transfers of funds from the appellant's lines of credit, which the son acknowledged had been loans and which he repaid with interest.

After hearing from 17 witnesses over six weeks of trial, the trial judge found that the transfers were a series of gifts. In making these findings, the trial judge accepted the son's evidence and that of eight independent witnesses, all of whom testified that the appellant had told them he intended to, or had made, the gifts to his son.

issues:

  1. Did the trial judge err in concluding that the appellant's son was not a fiduciary and did not owe fiduciary duties to the appellant?
  2. Did the trial judge err in finding that the transfers were gifts?

holding:

Appeal dismissed.

reasoning:

  1. Yes, in part.

The appellant argued that his son became a fiduciary when he (1) agreed to be added as a joint account holder with the appellant and (2) agreed to be named on the power of attorney over the appellant's property, regardless of whether he understood the ramifications of being the appellant's attorney. The appellant contended that his son breached his fiduciary duty by depleting the appellant's "lifetime wealth".

The Court accepted the appellant's submission in part, explaining that when a parent gratuitously transfers property to their adult child, the law presumes that the child holds the property on resulting trust for the parent. That is, the law presumes the child is a fiduciary. However, the presumption can be rebutted in whole or in part.

The Court agreed with the trial judge that the appellant's son rebutted the presumption of resulting trust in relation to the transfers he made from the bank account to which he held joint title with the appellant. In so doing, the son proved that the impugned transfers were gifts to him. Therefore, the son breached no fiduciary obligations in making those transfers to his own benefit.

The appellant's son also effected transfers from other bank accounts in which the appellant alone was on title. In effecting transfers from these accounts, the son did so as the appellant's attorney. The son knew he had the appellant's permission to exercise power over the appellant's property. In exercising that power, the son was a fiduciary and subject to fiduciary obligations. If the son was unsure of the source of his power, or the nature and type of obligations attendant on his exercise of power over the appellant's property, it was up to the son to take the necessary steps to find out what obligations he was subject to.

The Court held that because the appellant authorized all the impugned transfers, when the appellant's son acted as attorney to transfer assets to himself, he was fulfilling the appellant's instructions. Where a donor has capacity, the attorney is primarily informed by the donor's instructions, and the attorney is not in breach of their obligations if they follow those instructions.

The Court cited Egli v. Egli for a description of the prohibition against using a power of attorney for personal profit: "It is the attorney's duty to use the power only for the benefit of the donor and not for the attorney's own profit, benefit or advantage. The attorney can only use the power for his or her own benefit when it is done with the full knowledge and consent of the donor."

As the trial judge found, the appellant had full capacity and knowledge, and he consented to the impugned transfers. In fact, he instructed his attorney, his son, to make the transfers. The Court held that despite being a fiduciary, the appellant's son was entitled to use his powers as attorney to effect the transfers for his own benefit.

2. No.

The Court stated that the standard of review in this case was palpable and overriding error. A palpable error is one that is "not reasonably supported on the evidence" and it is overriding when it impacts on the trial judge's determination.

Donative Intention

The appellant conceded that the trial judge correctly set out the relevant legal principles. He also conceded that the trial judge found he was not credible, that his son was credible, and that credibility findings warrant "significant deference".

Nonetheless, the appellant asked the Court to set aside the impugned findings of the trial judge and substitute its view of the evidence on donative intent. The Court held that it is not to substitute its findings of fact for those of the trial judge absent palpable and overriding error. The Court found no such errors. The trial judge made detailed factual findings about the timing, circumstances, and nature of the interactions between the appellant and his son to support his finding of donative intent. The Court held that, not only were the impugned findings reasonably available to the trial judge on the evidence, they were inescapable.

Delivery

The Court rejected the appellant's submission that the trial judge failed to properly consider that there was no delivery for transfers carried out by cheque. For the gifts of property, delivery occurred when the appellant's son took title to the properties and, for the gifts of money, as the trial judge stated, "the cashing of the cheques or bank drafts are tangible proof that the gifts were delivered".

Acceptance

The Court also rejected the appellant's submission that the trial judge erred in finding the acceptance requirement to be satisfied. The trial judge was aware of the need to consider "contemporaneous" evidence of donative intention, and correctly relied on Pecore.

The trial judge found the evidence that the appellant's son accepted the gifts from the appellant "overwhelming". The Court agreed, explaining that the appellant's son accepted the gifts and used them as he had promised the appellant he would: to buy, renovate, and sell properties. The trial judge did not have to reconcile the fact that the son initially refused to accept his father's proposed gifts of the settlement monies and proceeds of sale of property with his later acceptance of those gifts. For each transfer, the appellant's son confirmed with his father that he intended to make a gift to him of the asset in question. Although he initially refused to accept those gifts, it did not preclude the appellant's son from later confirming with his father that he still intended to make the gifts. The appellant's confirmation was contemporaneous evidence of continuing donative intention in respect of both transfers and it was open to his son to accept the "new" offers.

Ahluwalia v. Ahluwalia, 2023 ONCA 476

[Benotto, Trotter and Zarnett JJ.A.]

Counsel:

A. Willer, M. A. Roshan and G. Carpenter, for the appellant

K. Hannaford, C. Chande, A. Pagano, A. N. Wood, L. Cadieux-Shaw, B. Mackenzie and N. Kim for the respondent

A. Matas, A. Medhekar and S. Eisen, for the intervener The Barbara Schlifer Commemorative Clinic

K. Mercer and F. Wood, for the intervener Luke's Place

Keywords: Family law, Intentional Torts, Assault, Battery, Intentional Infliction of Emotional Distress, Novel Torts, Family Violence, Coercive Control, Battered Women's Syndrome, Damages, Compensatory Damages, Aggravated Damages, Punitive Damages, Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.), ss. 2 and 16, Children's Law Reform Act, R.S.O. 1980, c. 68, Family Law Rules, O. Reg. 114/99, General Recommendation No. 35 (2017), UN Doc. CEDAW/C/GC/35: Convention on the Elimination of All Forms of Discrimination Against Women ("CEDAW"), Schuetze v. Pyper, 2021 BCSC 2209, Michel v. Graydon, 2020 SCC 24, Frame v. Smith, [1987] 2 S.C.R. 99, Leitch v. Novac, 2020 ONCA 257, Leskun v. Leskun, 2006 SCC 25, Lo v. Lo (2009), 70 R.F.L. (6th) 309 (Ont. S.C.), Murray v. Toth, 2012 ONSC 5815, Jones v. Tsige, 2012 ONCA 32, Merrifield v. Canada (Attorney General), 2019 ONCA 205, Watkins v. Olafson, [1989] 2 S.C.R. 750, Non-Marine Underwriters, Lloyd's of London v. Scalera, 2000 SCC 24, Caplan v. Atas, 2021 ONSC 670, Alberta Health Services v. Johnston, 2023 ABKB 209, Nevsun Resources Ltd. v. Araya, 2020 SCC 5, Barker v. Barker, 2022 ONCA 567, Barker v. Barker, 2020 ONSC 3746, Prinzo v. Baycrest Centre for Geriatric Care (2002), 60 O.R. (3d) 474 (C.A.), Saadati v. Moorhead, 2017 SCC 28, N.C. v. W.R.B., [1999] O.J. No. 3633, C.S.F. v. J.F., [2002] O.J. No. 1350, O.O.E. v. A.O.E., 2019 SKQB 48, MacKay v. Buelow (1995), 11 R.F.L. (4th) 403 (Ont. Gen. Div.), Valenti v. Valenti (1996), 21 R.F.L. (4th) 246 (Ont. Gen. Div.), aff'd (1998) 41 R.F.L. (4th) 289 (C.A.), Dhaliwal v. Dhaliwal, [1997] O.J. No. 5964 (Gen. Div.), N.C. v W.R.B., [1999] OJ No 3633 (S.C.), Calin v. Calin, 2019 ONSC 3564, Jane Doe 72511 v. Morgan, 2018 ONSC 6607, Farkas v. Kovacs, [1989] O.J. No. 2387 (Dist. Ct.), S. (L.N.) v. K. (W.M.), 1999 ABQB 478, Van Dusen v. Van Dusen, 2010 ONSC 220, McLean v. Danicic (2009), 95 O.R. (3d) 570 (S.C.), Wandich v. Viele (2002), 24 R.F.L. (5th) 427 (Ont. S.C.), Rezel v. Rezel (2007), 37 R.F.L. (6th) 445 (Ont. S.C.), Warman v. Grosvenor (2008), 92 O.R. (3d) 663 (Sup. Ct), Young v. Borzoni, 2007 BCCA 16, Mustapha v. Culligan of Canada Ltd., 2008 SCC 27, Bothwell v. London Health Sciences Centre, 2023 ONCA 323, Whiten v. Pilot Insurance, 2002 SCC 18, R. v. A.J.K., 2022 ONCA 487, R. v. Cunningham, 2023 ONCA 36, McNamee v. McNamee, 2011 ONCA 533, Martin v. Sansome, 2014 ONCA 14, Halliwell v. Halliwell, 2017 ONCA 349, Hon. Allen M. Linden, et al., Canadian Tort Law, 10th ed. (Toronto: LexisNexis, 2015), Allen M. Linden, Canadian Tort Law, 7th ed. (Markham, Ont.: Butterworths, 2001), Prof. G.H.L. Fridman, The Law of Torts in Canada (Toronto: Carswell, 1989), Diagnostic and Statistical Manual of Mental Disorders

facts:

The parties were married in 1999 in India. Eighteen months later, their first child was born. The husband immigrated to Canada in September 2001. The wife and the child followed in March 2002. At trial, the judge accepted the wife's evidence that the parties' relationship was characterized by a pattern of emotional and physical abuse and financial control. The husband admitted that the wife was totally financially dependent on him at the time of separation.

The wife brought an action for statutory relief—divorce, child support, spousal support, and property equalization—and also claimed damages for the husband's conduct during the marriage. The trial judge held that the Divorce Act did not create a complete statutory scheme for addressing all the legal issues arising in a situation of alleged family violence. Spousal support awards remained narrowly focused on compensation and economic fallout of the marriage rather than fault and misconduct. Accordingly, the trial judge recognized a new tort of "family violence". She concluded that there were interests worthy of protection and that development in the law was necessary to stay abreast of social change. While that tort overlapped significantly with existing American torts (battered women's syndrome), it was "fundamentally different in terms of the assessment of liability, causation, and damages".

The trial judge awarded $100,000 in compensatory and aggravated damages for the new tort of family violence. She also awarded an additional $50,000 in punitive damages for a total of $150,000 in damages.

issues:

  1. Did the trial judge err by including a tort claim in a family law action?
  2. Did the trial judge err by creating a new tort?
  3. Did the trial judge err in fashioning the tort of family violence?
  4. Should this court recognize the tort of coercive control?
  5. Did the trial judge err in assessing damages?
  6. What is the procedure for a court considering a tort claim in a family law action?

holding:

Appeal allowed, in part.

reasoning:

  1. Did the trial judge err by including a tort claim in a family law action?

No.

The appellant relied on Frame v. Smith to support their position that it is up to the legislature, not the courts, to expand the categories of claims in family law. La Forest J. also made obiter comments in Frame v. Smith about the "undesirability of provoking suits within the family circle". The Court, based on three reasons, concluded that Frame v. Smith did not provide a complete answer to the question before it:

First, in Frame v Smith, the statutory scheme specifically addressed the harm the father had suffered: failure to comply with parenting orders. The legislature could have created a cause of action but did not, instead making provisions for fines and contempt orders. The Court stated that it did not agree that a general legislative intention to preclude tort actions in family law actions could necessarily be so readily inferred.

Second, courts have already recognized the addition of tort claims in a family law proceeding. In Leitch v. Novac, the Court allowed a tort claim for conspiracy to proceed in a family law case where the claim was against family members who allegedly helped a party hide finances.

Third, if non-disclosure is the "cancer" of family law proceedings, intimate partner violence is the cancer of domestic relationships. Those who are victimized do not lose their remedies when they marry or begin a domestic partnership.

When La Forest J. spoke in obiter about not provoking lawsuits within the family, he was speaking of an issue for which there was a direct statutory remedy. More importantly, since Frame was decided, society, the legislature, and the courts have come to recognize the reality of intimate partner violence and the need to condemn it. For these reasons, the trial judge did not err by including a tort claim in a family law proceeding.

  1. Did the trial judge err by creating a new tort?

Yes.

The Court noted that the existence of family violence does not, by itself, justify the creation of a new tort. The creation of a new tort is only appropriate when there is a harm that "cries out" for a legal remedy that does not exist. Here, the respondent relied on Jones v. Tsige, where the Court acknowledged that common law must evolve when faced with evidence that it fails to address a social ill that is recognized as a right worthy of protection. In Nevsun Resources Ltd. v. Araya, the Court summarized Canadian jurisprudence and set out a test for the recognition of new torts:

I. The courts will not recognize a new tort where there are adequate alternative remedies;

II. The courts will not recognize a new tort that does not reflect and address a wrong visited by one person upon another; and

III. The courts will not recognize a new tort where the change wrought upon the legal system would be indeterminate or substantial.

No jurisprudence was relied on by either the trial judge or by the respondent to support the proposition that a pattern of tortious conduct is not captured by the existing torts of battery, assault, and intentional infliction of emotional distress. Similarly, no jurisprudence was cited to support the trial judge's concern that existing torts are too narrowly focused to capture the dynamics in a relationship. Courts have long recognized that patterns of physical and emotional abuse constitute tortious behaviour. Contrary to the trial judge's conclusion, courts have considered the patterns of behaviour that constitute intimate partner violence without limiting their focus to individual incidents. In the context of existing torts, courts have also specifically considered the pattern of abuse as a reason to award higher damages. Further, isolated incidents that are not individually tortious may, when viewed in their repetitive and cumulative nature, become tortious.

The Court found that the facts before the trial judge fell squarely within the existing jurisprudence on battery, assault and intentional infliction of emotional distress, and the trial judge erred by creating a new tort which was not required here.

  1. Did the trial judge err in fashioning the tort of family violence?

Yes.

The Court stated that even if there were a need to create a new tort, the trial judge's approach was misguided in her reliance on the s. 2 definition of "family violence" in the Divorce Act, which has a very specific application. The trial judge adopted a definition of family violence meant for post-separation parenting plans and used it to fashion the new tort. While the Court agreed that the recent addition of family violence considerations reflected Parliament's awareness and concern of the devastating effects of family violence on children, the Court rejected the idea that these sections "formed the starting point" for creating a new tort between the spouses. By adopting the definition of family violence created for the specific purpose of post-separation parenting plans and using it to create a new cause of action, the trial judge ignored the clear intention of the legislature. This was an error.

  1. Should the Court recognize the tort of coercive control?

No.

On appeal the respondent proposed a "more sophisticated recognition of family violence" as embodied in the term "coercive control" which she submitted concerned subordination and control. It includes emotional and psychological harm, financial abuse, social isolation, intentional damage to property, deprivation of necessities of life, or micro-regulation of daily activities. The key is that the controlling tactics are patterned, repeated, and often integrated into everyday life, magnifying and accumulating harms. The respondent submitted that the tort of coercive control would not require proof of harm and would be made out where a person: (a) in the context of an intimate relationship, (b) inflicted a pattern of coercive and controlling behaviour, and (c) that, cumulatively, was reasonably calculated to induce compliance, create conditions of fear and helplessness, or otherwise cause harm.

The Court did not recognize the tort of coercive control because: first, the existing tort of intentional infliction of emotional distress provided an adequate remedy; second, the elimination of the requirement to establish visible and provable injuries did not arise in this case; and third, the elimination of the requirement to prove harm would have a significant impact on family law litigation best left to the legislature.

The Court rejected the respondent's submission that the existing tort of intentional infliction of emotional distress focuses on specific acts and behaviours, not the context, underlying dynamics, and pattern or web of coercion and control. Rather, a proper analysis of the tort of intentional infliction of emotional distress would involve the context of the relationship and the patterns of controlling behaviour causing harm.

The Court also rejected the respondent's submission that the existing tort "risks missing tactics of domination" that may on their own seem minor or trivial, but which function as part of an overarching pattern of coercion and control. Instead, the Court found this as a pattern of behaviour fitting squarely within the existing torts.

The Court was of the view that the proposed tort of coercive control substantially overlaps with the tort of intentional infliction of emotional distress. The major change in the proposed new tort would be to eliminate the requirement that there be visible and provable injuries, which the respondent contended creates a gap in the law that they fall into. However, the facts of this case do not fall into any gap in the law. The trial judge accepted that injuries had been proven and found the appellant here liable for intentional infliction of emotional distress. Due to the nature of family law, which affects not just the parties but their children, extended families and society at large, eliminating the requirement to offer proof of injury may lower the level of impugned conduct and unintentionally encourage allegations of fault in every case, thereby undermining the movement towards a resolution-based system and towards an adversarial system. For these reasons, the Court did not recognize the proposed new tort of coercive control.

  1. Did the trial judge err in assessing damages?

Yes.

The trial judge assessed damages at $150,000: $50,000 for each of compensatory, aggravated, and punitive damages.

While the Court agreed with the appellants that the damage assessment was higher than in many previous cases, it chose not to interfere with the trial judge's award for compensatory and aggravated damages. First, the trial judge's assessment of damages attracted a high level of deference. Second, while the quantum was higher than has been typical in previous jurisprudence, the higher damage award reflects an emerging understanding of the evils of intimate partner violence and its harms. The quantum of damages historically awarded may need to evolve to better reflect the current societal understanding of the extent of these harms.

Regarding the punitive damages award, the trial judge ordered an additional $50,000 for punitive damages for the "strong condemnation" required. While the Court agreed with the trial judge that the appellant's conduct called for condemnation, the Court found that the trial judge failed to address and make a finding that the award of general and aggravated damages was insufficient to achieve the goals of denunciation and deterrence. This was an error. Whiten v. Pilot Insurance sets out principles for an award of punitive damages, of which the Court highlighted two:

(1) Punitive damages are very much the exception rather than the rule; and

(8) Punitive damages are awarded only where compensatory damages, which to some extent are punitive, are insufficient to accomplish these objectives.

Applying these principles in the context of this case, the Court found the facts did not justify an award of punitive damages because the compensatory and aggravated damages (in the amount sought by the respondent) were sufficient to accomplish the objectives of condemnation. It was unreasonable and disproportionate to add punitive damages in the amount of an additional 50% of the total claimed, without any explanation. The Court allowed the appeal with respect to the punitive damage award, thereby reducing the total damages to $100,000.

  1. What is the procedure for a court considering a tort claim in a family law action?

The trial judge began her analysis with the tort claims. She then addressed child support, spousal support, and equalization. The starting point for a determination of financial issues arising from the marriage is the application of the statutory provisions which, in this case are the Divorce Act and the Family Law Act, and only after those determinations are made should the court consider other claims. When claims other than those arising directly from the statute are raised in a family law proceeding, the statutory entitlements may inform those determinations.

The Court found that the principle of first determining statutory entitlements, including equalization and corollary relief under the Divorce Act, is sound. Child support is a right of the child and cannot be set aside for later. A compensatory support award under the Divorce Act may also impact the quantum of damages. In the view of the Court, statutory claims should be complete before assessing liability and damages for tort claims.

Tega Homes (Attika) Inc. v. Spencedale Properties Limited, 2023 ONCA 475

[Feldman, Lauwers and Roberts JJ.A]

Counsel:

T. G. Conway and K. Caron, for the appellants

W. C. McDowell, A. Quinn, and D. Cutler, for the respondent

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Joint Venture Agreements, Expectation Damages, Tega Homes (Attika) Inc. v. Spencedale Properties Ltd., 2018 ONSC 6048, Akelius Canada Ltd. v. 2436196 Ontario Inc., 2022 ONCA 259, 6472047 Ontario Ltd. v. Fleischer (2001), 56 O.R. (3d) 417 (C.A.), 100 Main Street Ltd. v. W.B. Sullivan Construction Ltd. (1978), 20 O.R. (2d) 401 (C.A.), PreMD Inc. v. Ogilvy Renault LLP, 2013 ONCA 412

facts:

The appellants own two adjacent properties in the City of Ottawa. The appellants used the properties for commercial tenancies and a mini-storage business. On May 13, 2011, the parties entered into a joint venture agreement to develop the properties into a two-tower high rise residential condominium ("the JVA"). The JVA provided that the appellants would provide the properties and the respondent would fund the development expenses. Specifically, the respondent would be responsible for all the up-front expenses of approval and development with no risk to the appellants if the respondent was unable to obtain approval within the defined timeframe under the JVA. There was no provision under the JVA for the respondent to recoup its investment in the project. The parties to the JVA would share the profits gleaned from the development. The termination clause in the JVA also provided that if the agreement terminated, the parties would release each other from all claims relating to the project.

The joint venture never came to fruition and the JVA came to an end on April 30, 2013, in accordance with its terms because the respondent had not obtained the necessary governmental approvals in the timeline set out in the JVA. By the terms of the JVA, the parties released each other from all claims relating to the JVA.

The respondent continued to work on approvals and to develop a marketing plan. The parties continued to negotiate with a view to concluding a new agreement. However, the parties did not enter into a new joint venture agreement. Rather, on November 6, 2013, the parties entered into an agreement of purchase and sale with respect to the properties with no provision for a share of future profits and no share of risk if the project failed (the "2013 APS"). The respondent agreed to purchase the properties and starting in November 2013, the respondent also agreed to pay rent to the appellants for a sales office. 

The respondent was ultimately successful in 2014 in obtaining the approval for the rezoning of the lands to allow the project to proceed. The extended closing date was fixed for April 17, 2015. On the eve of closing, the appellants announced that they would not close the transaction, breaching the 2013 APS. The respondent had incurred development expenses after the 2013 APS was signed and prior to the date set for closing.

The respondent brought a claim against the appellants for the losses it incurred from the appellants' breach of the 2013 APS. The appellants brought a counterclaim regarding money they alleged the respondent owed for interest on a loan and for unpaid rent.

The trial judge determined that the respondent was entitled to be put into the position it would have occupied had the transaction closed under the 2013 APS. The trial judge assessed damages as follows: $323,000, as the increase in the value of the land between the date of the agreement of purchase and sale and the date of the failed closing; and 90% of all the respondent's development expenses from 2010 to the date of the respondent's breach on April 16, 2015, in the amount of $1,103,191. Of that sum, $185,707.03 of the development expenses represented the total amount of unpaid invoices from service providers extending back to 2011 that the respondent undertook to pay. The judgment provided that the amount of those unpaid invoices constituted a first charge against any recovery by the respondent on the portion of the damages awarded for development expenses.

issues:

  1. Did the trial judge overcompensate the respondent?
  2. Did the trial judge err in awarding the respondent development expenses incurred since 2010?
  3. Did the trial judge err in his calculation of the respondent's development expenses?
    1. Did the trial judge err in including unrelated rental amounts in the respondent's development expenses?
    2. Did the trial judge err in awarding damages for unpaid service provider invoices?
    3. Did the trial judge err in discounting the respondent's development expenses by only 10%?

holding:

Appeal allowed in part.

reasoning:

  1. No.

The Court agreed that the trial judge erred in his determination of the amount of the damages awarded to the respondent.

However, the Court found that the trial judge made no error in awarding, as categories of damages, the increased value of the properties as at the date of the appellants' breach, as well as the respondent's wasted expenditures. The trial judge applied the correct contractual principles in his assessment of the respondent's damages. He recognized that the ordinary measure of damages for breach of contract in the context of a failed real estate transaction is to put the innocent party in the position it would have occupied had the contract been performed and to assess the damages as at the date of breach.

The court did not agree that the trial judge awarded the respondent "double-recovery" damages for loss of profit and the related expenses incurred to bring about those profits. The Court found that the trial judge expressly rejected the respondent's claim for loss of profits from the failed project because the respondent was unable to prove that the project would have been profitable. Instead, the trial judge accepted the respondent's alternative claim for the increase of the market value of the properties as at the date of breach, as well as its wasted development expenses related to the project.

The Court held that the trial judge's approach to the respondent's wasted development expenses was consistent with the approach where a plaintiff may only recover those expenses that were truly wasted and that would not have been wasted regardless of the breach. The Court stated that if the expense would not have been recouped even if the contract had been performed, then the expense was not recoverable because it was not caused by the breach of contract.

The Court found that the trial judge was therefore obliged to consider, and did consider, whether the claimed development expenses could have been recouped from the increase in the market value of the properties and were therefore truly wasted expenditures. The Court stated that the trial judge found that it was highly probable that the respondent would have recouped its expenses had the transaction closed, not from the future profits of the project, but from the increased market value of the properties.

The Court did not find the appellants' rigid damages characterization as "expectation" or "reliance" damages to be helpful and agreed with the trial judge's observation that the respondent's damages are not properly assessed "by adopting arbitrary categories or airtight silos".

The Court found that the correct question to be asked, as the trial judge correctly did, was: having rejected the claim for future profits, what amount of damages will put the respondent in the position it would have occupied had the 2013 APS closed? The answer, as the trial judge also correctly stated, was to award the respondent the increased value of the properties as well as the respondent's wasted development expenses that the appellants knew the respondent had incurred after entering into the 2013 APS. The Court found that the trial judge did not award the respondent damages for making a bad bargain nor did he make the appellants the insurer of the respondent's project. The award of damages did not place the respondent in a better position than if it had closed the transaction on April 17, 2015.

The Court also found that if the 2013 APS had been performed, the respondent would have owned properties that had appreciated in value to the date of breach, as well as the benefit of the development expenses it had sunk into the project. Without performance, the respondent lost both the increase in value and its development expenses. The Court found that damages awarded at trial restored the respondent to the position it would have occupied had the 2013 APS closed, in which case the development expenses incurred by the respondent would not have been wasted.

The Court found no reversible error in the trial judge's award of the properties' increased market value to the date of breach as well as the respondent's development expenses related to the 2013 APS as categories of damages.

  1. Yes.

The Court held that the difficulty with the trial judge's findings were that they ignored the separate existence and fundamentally different terms of the JVA and the 2013 APS. The Court held that the trial judge erred in two material respects. First, he failed to explain what "exceptional circumstances" existed or the significance that "exceptional circumstances" played in the analysis he was required to undertake. Second, and more important, he failed to give effect to the distinction between the JVA and the 2013 APS in accordance with their distinct terms. The two agreements were completely different.

The Court held that the terms of the JVA did not roll over and become part of the 2013 APS. Rather, the 2013 APS was an entirely separate agreement. It was not a joint venture where the parties shared the losses and profits of the project; it was a simple real estate transaction.

The Court held that the respondent had no entitlement to claim any development expenses incurred prior to the 2013 APS. The Court held that the parties had contracted under the JVA to release all claims on the termination of the JVA. As a result, any claim for any development expenses incurred was therefore released before the parties entered into the 2013 APS. Consequently, unless the parties agreed that the development expenses already incurred would continue as part of the 2013 APS, the respondent's development expenses incurred under the JVA, before the 2013 APS, could not be claimed in relation to the breach of the 2013 APS. The Court found that there was no agreement that any development expenses incurred prior to the 2013 APS could be claimed. To the contrary, as pleaded by the appellants in their statement of defence and counterclaim, the "entire agreement" clause of the 2013 APS was clear that there were no prior representations and warranties.

The Court held that the trial judge overcompensated the respondent in respect of the released expenditures. The Court found that the amount of damages properly awarded to the respondent for its wasted development expenses should be 90% of the amount that was incurred after the 2013 APS was entered into up to the date of the appellants' breach.

  1. Yes, in part.

The Court held that other than a necessary adjustment to limit the quantum of rental costs to those incurred under the 2013 APS, there was no reversible error that warrants appellate intervention.

I. Yes, in part.

The Court held that the trial judge did not misapprehend the parties' agreement with respect to the respondent's chart of expenses. The trial judge's reasons demonstrated that he correctly understood that the parties' agreement was only that the amounts were accurately stated in the chart of expenses and that they were incurred by the respondent so that there was no need to prove individual invoices. The trial judge's reasons showed that he appreciated that while the amount of the expenses claimed was not in issue, the question of whether "the rent for the sales office paid by the [respondent] to the date of intended closing was part of the development expenses to be recovered under the judgment" was a live issue that had to be determined.

The Court held that the award of $226,642.50 in relation to the rental costs must be reduced in light of the determination that the trial judge erred in awarding development expenses from 2010 onwards. Accordingly, the respondent was entitled to recover as part of its wasted development expenses only the rental costs it incurred following the entering into of the 2013 APS.

II. No.

The Court found no error in the trial judge's treatment of the issue. This was not a case where the respondent was claiming damages for services that were not rendered. Moreover, as noted by the trial judge, the parties had agreed on the quantum under the invoices for which the respondent was potentially liable to the unpaid service providers. The Court did not accept the appellants' submission that the passing of the applicable limitation period necessarily meant that those debts were no longer payable. The passing of any limitation period does not extinguish those debts but may affect the service providers' ability to enforce them if they have not been acknowledged by the respondent. The Court held that by its undertaking to pay the unpaid invoices from the judgment, the respondent acknowledged its indebtedness to the unpaid service providers. There was no concern about a windfall to the respondent because the award was subject to the respondent's undertaking to pay and was subject to a first charge in favour of the service providers.

III. No.

The Court found no error in the trial judge's approach. There was no set amount that the trial judge had to apply in reducing the development expenses to take into account the various contingencies that he properly considered.

Primont (Castelmont) Inc. v. Friuli Benevolent Corporation, 2023 ONCA 477

[Fairburn A.C.J.O., Simmons and Zarnett JJ.A.]

Counsel:

P. Stevenson, for the appellant/respondent by way of cross-appeal FLTC

A. Schwartz, S. McGrath and J. DeFilippis, for the respondent/appellant by way of cross-appeal P Inc.

J. Battiston, for the respondent FCB

G.G. Piccin, for the respondent FFT

Keywords: Real Property, Easements, Interpretation, Re City of Burlington and Clairton Village, (1979) 24 O.R. (2d) 586 (Ont. C.A.), MacKenzie v. Matthews, [1998] O.J. 5342 (Gen. Div.), [1999] O.J. No. 4602 (C.A.), Moncrief v. Jamieson, [2007] U.K.H.L. 42, Fallowfield v. Bourgault, (2004), 68 O.R. (3d) 417 (C.A.), Deforest Bros. v. Tuck, 2020 ONSC 6439

facts:

The issues on appeal arose out of an application for a declaration that an easement registered against title to certain land does not include the right to park on the land.

In September 2020, the respondent, P Inc., agreed to purchase real property (the "Property") owned by the respondent, FFT. P Inc. is a residential real estate developer. The agreement of purchase and sale (the "APS") was conditional on FFT obtaining a release of reciprocal easements registered against the Property and the lands of two adjoining landowners, FCB, the owner of an apartment building for seniors, and FLTC, the owner of a long-term care facility.

As a release of the easements was not available, P Inc. commenced an application prior to closing the APS, seeking a declaration that the easements registered against the Property do not include the right to park on the Property and certain other relief. The parties agreed to an expedited hearing. FFT supported P Inc.'s position on the application that the easements do not include parking rights. FBC was not opposed. A primary issue therefore was whether the easement over the Property (the "Easement") included parking rights in favour of FLTC.

The Easement stated it was "for the purposes of vehicular and pedestrian access and egress". The application judge determined that the rights granted by the Easement do not include the right to stationary parking on the Property.

The application judge refused P Inc.'s request to add a further declaration (the "Proposed Additional Declaration") that the Easement did not prevent redevelopment of the Property provided a minimum of one access point to a public highway was maintained. Furthermore, the application judge said the proposed limitation of FLTC's dominant right to use the Property to a singular public access was inconsistent with his reasons for judgment and the words of the Easement.

FLTC submitted that P Inc.'s application should have been dismissed because it was speculative and hypothetical. In the alternative, FLTC submitted that the application judge erred by failing to hold that its rights under the Easement included parking rights. The adjoining landowners had always agreed that parking rights were necessary for the operation of the long-term care facility, therefore the Court should substitute a declaration to that effect or remit the matter for a trial of the issues.

By way of cross-appeal, P Inc. submitted that the application judge erred in law in refusing to include the Proposed Additional Declaration in the formal Judgment.

issues:

  1. Should P Inc.'s application have been dismissed because it was speculative or hypothetical?
  2. Did the application judge err in failing to hold that FLTC's right under the Easement included parking rights?
  3. Did the application judge err in law in refusing to include the Proposed Additional Declaration in the formal Judgment.

holding:

Appeal and cross-appeal dismissed.

reasoning:

  1. Should P Inc.'s application have been dismissed because it was speculative or hypothetical?

No.

The Court discussed how FLTC did not raise any issue in the court below concerning whether proceeding by application was appropriate in this case and did not ask that the application be dismissed as speculative and hypothetical. Instead, it requested a declaration that the Easement conferred parking rights.

The Court held that FLTC appeared to assert that the application judge understood P Inc. to be conceding that the Site Plan Agreement and Tripartite Agreement (collectively, the "Agreements"), conferred a contractual right on FLTC to park in specific parking spaces, or at least in a specific number of parking spaces on the Property, and interpreted the Easement based on that misunderstanding. According to FLTC, had the application judge appreciated P Inc.'s true position, he would have dismissed its application or at least directed a trial of an issue concerning the interpretation of all of the Easement and the Agreements taking account of the planning process.

The Court did not accept this argument. The application judge did notmisunderstand P Inc.'s position. While LTC interpreted the Agreements as conferring on it a right to park on the Property, P Inc. interpreted the Agreements as imposing an obligation to create and maintain parking spaces according to the Schedules attached to the Site Plan Agreement. The Court held that the question of the proper interpretation of the Agreements was not before the application judge and he did not decide on that question.

Lastly the Court rejected LTC's submission that, in the absence of a redevelopment plan, P Inc.'s application to interpret the Easement was hypothetical. The issue before the application judge was whether the Easement conferred on FLTC, the dominant tenement owner, a proprietary right to park on the servient tenement, namely, the Property. P Inc. was entitled to know that before it completed its purchase of the Property. Unlike the City of Burlington case relied on by FLTC, there was no issue on the application concerning whether a redevelopment plan by the dominant tenement owner exceeded the scope of its easement.

  1. Did the application judge err in failing to hold that FLTC's right under the Easement included parking rights?

No.

The Court noted that where an easement is created by express grant, the nature and extent of the easement are to be determined by the wording of the instrument creating the easement, considered in the context of the circumstances that existed when the easement was created. The grant of an express easement includes such ancillary rights as are reasonably necessary to use or enjoy the easement. However, to imply a right ancillary to that which is expressly granted, the right must be necessary for the use or enjoyment of the easement, not just convenient or even reasonable: Fallowfield v. Bourgault.

The Court held that, as the application judge correctly noted, "easements are to be interpreted in accordance with the words used, first and foremost." Here, the purpose of the Easement, as expressly stated in the grant, was for "vehicular and pedestrian access and egress". Without the Easement, the FLTC lands were landlocked. The Easement was necessary to remedy that problem. Moreover, as the application judge observed, the reciprocal easements exchanged among the original owners ensured all could enter on and traverse all of the unencumbered Lands, which had been envisaged as one campus.

The Court discussed how the application judge noted that parking rights were dealt with by the City and the parties "as they wished and to the satisfaction of all at the time." Parking rights could not therefore be construed as reasonably necessary for the enjoyment of the easement when it was created. The fact that the Agreements may not be interpreted in the manner FLTC submitted they should be interpreted did not undermine this conclusion. The Court was not satisfied that the application judge misapprehended P Inc.'s position on this issue.

The Court noted although the long-term care facility had a limited number of parking spaces, it did not lack parking altogether. Accordingly, even in the absence of the other arrangements made for parking by the parties and the City, unlike the cases relied on by FLTC, the Easement, which afforded users the right to access the FLTC lands and, effectively the long-term care facility, was not rendered useless in the absence of ancillary rights to park on the Property.

  1. Did the application judge err in law in refusing to include the Proposed Additional Declaration in the formal Judgment.

No.

While P Inc. acknowledged that the public highway access issue was not addressed in oral argument before the application judge, it asserted that it requested the Proposed Additional Declaration in both its notice of application and in its factum. The issue was not addressed in oral argument only because FLTC did not contest it.

The Court did not accept this position. P Inc. did not ask for the precise relief set out in the Proposed Additional Declaration in its notice of application. Rather than specifying that the Easement does not prevent redevelopment provided that the dominant tenements maintain one access to a public highway as defined in the Highway Traffic Act ("HTA"), in its notice of application, P Inc. asked for the declaration with a condition only that access to a public highway (not defined) be maintained.

The Court held that contrary to P Inc.'s submissions, seeking a declaration that the Easement did not prevent it from redeveloping the Property provided it maintained one access point to a public highway was a significant enlargement of the relief P Inc., requested in its notice of application. It was not entitled to enlarge the relief it originally requested without seeking an amendment to its notice of application. The Court noted that while the application judge undoubtedly had discretion to permit an amendment without a formal application on whatever terms he considered appropriate (such as an adjournment and costs thrown away), P Inc. was not entitled to unilaterally amend its notice of application by inserting a broadened prayer for relief at the conclusion of its factum and without raising the issue in oral submissions. P Inc. was not estopped by the application judge's endorsement from seeking relief in the form of the Proposed Additional Declaration in the future.

SHORT CIVIL DECISIONS

Wasylyk v. Simcoe (County), 2023 ONCA 473

[Zarnett J.A.]

Counsel:

J. Curry and D. Knoke, for the appellant/moving parties

A. Cole and D. Elshourfa, for the respondent/responding party

Keywords: Torts, Negligence, MVA, Municipal Liability, Road Repair, Civil Procedure, Appeals, Appeal Book and Compendium, Evidence, Admissibility, Expert Evidence, Aides Memoire, Rules of Civil Procedure, r. 53.03, Moore v. Getahun, 2015 ONCA 55, 1162740 Ontario Ltd. v. Pingue, 2017 ONCA 52

Gu v. Nothdurft, 2023 ONCA 480

[Huscroft, Miller and Paciocco JJ.A.]

Counsel:

A. McBride and D. Michaud-Shields, for the appellants

F. Otto, for the respondents

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Remedies, Specific Performance, Mason v. Freedman, [1958] S.C.R. 483, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Chan v. Mangal, 2022 ONSC 2068, 1954294 Ontario Ltd. v. Gracegreen Real Estate Development Ltd., 2017 ONSC 6369, Anne Warner La Forest, Anger & Honsberger Law of Real Property, 3rd ed. (Toronto: Thomson Reuters Canada, 2021) (loose-leaf updated 2022, release 1)

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