Good afternoon.

Following are this week's summaries of the Court of Appeal for Ontario for the week of August 16, 2021.

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In Advanced Farm Technologies-JA v. Yung Soon Farm Inc, the appellant was sued under simplified procedure for failure to pay. The appellant appealed an order striking their defence and counterclaim for failure to comply with a court order to pay costs and deliver an affidavit of documents. The pleading was struck even though the appellant had complied with the order at the last moment, right before the motion to strike was heard. The Court dismissed the appeal, meaning that a party is still at risk of having their pleading struck for failure to comply with a court order even if they cure the non-compliance prior to the motion to strike.

Other topics covered included an addendum to an insurance/collateral benefits decision released by the Court back in April, and extension of time to appeal/stay pending appeal.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos

Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Advanced Farm Technologies- JA v. Yung Soon Farm Inc. , 2021 ONCA 569

Keywords: Contracts, Sale of Goods, Civil Procedure, Orders, Enforcement, Striking Pleadings, Setting Aside, Rules of Civil Procedure, Rules 30.08(2), 60.12, Dew Point Insulation Systems Incorporated v. JV Mechanical Limited, 259 O.A.C 179, Falcon Lumber Limited v. 2480375 Ontario Inc. (GN Mouldings and Doors), 2020 ONCA 310

Nemchin v. Green , 2021 ONCA 573

Keywords: Insurance, Subrogation, Collateral Benefits, Long-term Disability, Statutory Assignment of Rights and Benefits, Statutory Trusts, Civil Procedure, Procedural and Natural Justice, Insurance Act, R.S.O. 1990, c. I.8, Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 267.8, Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.), Kant v. The Queen, [2001] 2 C.T.C. 2703 (T.C.C.), Bapoo v. Co-Operators General Insurance Co. (1997), 154 D.L.R. (4th) 385 (Ont. C.A.), leave to appeal refused, [1998] S.C.C.A. No. 62, Cadieux v. Cloutier, 2018 ONCA 903, leave to appeal refused [2019] S.C.C.A. No. 63, Carroll v. McEwen, 2018 ONCA 902, Cobb v. Long Estate, 2017 ONCA 717, El-Khodr v. Lackie, 2017 ONCA 716, leave to appeal refused, [2017] S.C.C.A. No. 461, Re Scott, [1948] SASR 193, Frederick v. Aviation & Gen. Ins. Co., [1966] O.J. No. 1064 (C.A.), Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Pugh v. Canada, [2000] T.C.J. No. 585, Bouchard v. Canada, 2008 TCC 408, Lewin on Trusts, 19th ed. (London: Sweet & Maxwell, 2015)

Teitler v Dale, 2021 ONCA 577

Keywords: Family Law, Civil Procedure, Vexatious Litigants, Appeals, Extension of Time, Stay Pending Appeal, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 140, Rules of Civil Procedure, Rule 3.02, Howard v. Martin, 2014 ONCA 309, Denomme v. McArthur, 2013 ONCA 694, Byers (Litigation Guardian of) v. Pentex Print Master Industries Inc. (2003), 62 O.R. (3d) 647 (C.A.), Kallaba v. Bylykbashi (2006), 265 D.L.R. (4th) 320, Lukezic v. Royal Bank of Canada, 2012 ONCA 350, Dale v. Teitler, 2018 ONSC 6861 (Div. Ct.), BTR Global Opportunity Trading Limited v. RBC Dexia Investor Services Trust, 2011 ONCA 620

Short Civil Decisions

Asghar v. Toronto (City), 2021 ONCA 571

Keywords: Civil Procedure, Appeals, Perfection, Extension of Time, Machado v. Ontario Hockey Association, 2019 ONCA 210, Yaiguaje v. Chevron Corporation, 2017 ONCA 827

CIVIL DECISIONS

Advanced Farm Technologies- JA v. Yung Soon Farm Inc., 2021 ONCA 569

[Feldman, Paciocco and Coroza JJ.A]

Counsel:

J. Chow, for the appellant
M. Hussein, for the respondent

Keywords: Contracts, Sale of Goods, Civil Procedure, Orders, Enforcement, Striking Pleadings, Setting Aside, Rules of Civil Procedure, Rules 30.08(2), 60.12, Dew Point Insulation Systems Incorporated v. JV Mechanical Limited, 259 O.A.C 179, Falcon Lumber Limited v. 2480375 Ontario Inc. (GN Mouldings and Doors), 2020 ONCA 310

facts:

The appellant was sued under the simplified procedure for failing to pay the agreed price of US$48,238.49 for papayas ordered and delivered. After having default judgment set aside, the appellant defended the action and instituted a counterclaim for $5,000,000 in damages for breach of contract and $1,000,000 in punitive damages, taking the action out of the simplified procedure. After that, the appellant effectively absented itself from the litigation and failed to comply with a master's order requiring the payment of costs and delivery of an affidavit of documents, with the result that its defence and counterclaim were eventually struck out by the motion judge without leave to amend. The appellant appealed that decision.

issues:

1. Did the motion judge err by failing to give the appellant a last chance to comply with court orders?
2. Did the motion judge err by failing to acknowledge that by the return of the motion the appellant was no longer in breach of a master's order?
3. Did the motion judge err by failing to consider the merits of the appellant's defence?
4. Did the motion judge err by failing to consider that the action was at the early stages and should have been decided on its merits?
5. Did the motion judge err by failing to consider that there was no evidence of prejudice to the plaintiff?

holding:

Appeal dismissed.

reasoning:

(1) No.

If all the circumstances warrant the remedy of striking out a pleading, the court is authorized to do so if the party has had a reasonable opportunity to cure any non-compliance. The appellant in this case did not attend the chambers appointment with Myers J where they would have had their last chance to comply with the master's order. Additionally, the appellant did not answer any of the attempts by plaintiff's counsel to move the litigation forward.

(2) No.

The motion judge considered the appellant's compliance with the master's order "on the last possible day". In consideration of the timing, all of the circumstances and the responses of the appellant "in the overall context", the motion judge concluded the remedy was appropriate. The Court of Appeal saw no error in this approach.

(3) No.

The potential merit of the appellant's defence played a limited role in the court's analysis. If a party has a strong position on the merits, they would be expected to produce their documents to demonstrate that strength.

(4) No.

A court should consider a number of common sense factors when deciding whether to strike a pleading, including: (i) whether the party's failure is deliberate or inadvertent; (ii) whether the failure is clear and unequivocal; (iii) whether the defaulting party can provide a reasonable explanation for its defaults, coupled with a credible commitment to cure the default quickly; (iv) whether the substance of the default is material or minimal; (v) the extent to which the party remains in default at the time of the request to strike out its pleading; and (vi) the impact of the default on the ability of the court to do justice in the particular case.

In this case, the factors did not point in the appellant's favour. There was a clear and deliberate breach of a court order after many chances to comply with no explanation for the prior inaction, the default was significant and prevented the action from proceeding, and compliance with the order was mere days before the motion to strike.

(5) No.

There was clear prejudice to the plaintiff. The ongoing cost of chasing the appellant to respond, fulfill its procedural obligation and to participate in the litigation caused prejudice.

Overall, the Court was of the view that the motion judge did not err in granting the extreme remedy of striking the appellant's statement of defence and counterclaim notwithstanding the appellant's eventual delivery of the costs and affidavit of documents ordered by the master.

Nemchin v. Green, 2021 ONCA 573

[Roberts, Trotter, and Thorburn JJ.A.]

Counsel:

J.Y. Obagi and E.A. Quigley, for the Appellant
S.G. Ross, T.M. Macmillan and M. Rodrigues, for the Respondent

Keywords: Insurance, Subrogation, Collateral Benefits, Long-term Disability, Statutory Assignment of Rights and Benefits, Statutory Trusts, Civil Procedure, Procedural and Natural Justice, Insurance Act, R.S.O. 1990, c. I.8, Income Tax Act, R.S.C. 1985, c. 1 (5th Supp.), s. 267.8, Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.), Kant v. The Queen, [2001] 2 C.T.C. 2703 (T.C.C.), Bapoo v. Co-Operators General Insurance Co. (1997), 154 D.L.R. (4th) 385 (Ont. C.A.), leave to appeal refused, [1998] S.C.C.A. No. 62, Cadieux v. Cloutier, 2018 ONCA 903, leave to appeal refused [2019] S.C.C.A. No. 63, Carroll v. McEwen, 2018 ONCA 902, Cobb v. Long Estate, 2017 ONCA 717, El-Khodr v. Lackie, 2017 ONCA 716, leave to appeal refused, [2017] S.C.C.A. No. 461, Re Scott, [1948] SASR 193, Frederick v. Aviation & Gen. Ins. Co., [1966] O.J. No. 1064 (C.A.), Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Pugh v. Canada, [2000] T.C.J. No. 585, Bouchard v. Canada, 2008 TCC 408, Lewin on Trusts, 19th ed. (London: Sweet & Maxwell, 2015)

facts:

This case is an addendum to the reasons given by the Court on April 16, 2021 in Nemchin v. Green, 2021 ONCA 238.

The appellant and respondent were involved in a motor vehicle accident in which the appellant suffered serious injuries and became totally disabled. As a result, the appellant was awarded substantial damages against the respondent at trial. The appellant's injuries also triggered coverage for long-term disability income continuation benefits from Sun Life Assurance Company of Canada ("Sun Life"), her employer's group benefits insurer. Both the appellant and her employer had contributed to the plan. As a result, Sun Life deducted and remitted income taxes for its payments to the appellant under the plan.

Following the trial, the respondent brought a motion under s. 267.8(12) of the Insurance Act (the "Act") to require the appellant to assign her rights to the Sun Life benefits to the respondent's insurer from the date of the judgment. The trial judge granted the respondent's request and included an additional order that the appellant "top up" any amount paid from Sun Life to the respondent's insurer to account for the fact that Sun Life deducted applicable income taxes from its payments to the appellant.

The appellant appealed the trial judge's order. The appellant did not contest the assignment of her benefits to the respondent's insurer. Rather, the appellant argued that the trial judge's order was contrary to the principles of natural justice and exceeded her jurisdiction because neither party sought the top up ordered. Further, the appellant argued that the trial judge erred in her interpretation of s. 267.8 of the Act.

The appeal was allowed. The Court found that the trial judge's top up order was procedurally unfair as neither party had requested the top up order, nor did the trial judge request submissions from the parties on the issue. Further, the Court found that the trial judge erred in her interpretation and application of s. 267.8 of the Insurance Act, as she applied the trust and assignment provisions in a manner that was contrary to the plain meaning of the legislative text and its purposes and failed to account for the effect that Sun Life's withholding and remittance of income tax was having on the appellant.

In the April 16 reasons, the Court invited the parties to make submissions if they required further direction concerning the treatment of any tax refund they may obtain with respect to the tax remittances and the wording of the amended formal order. The parties made further submissions for directions, resulting in this addendum to the Court's prior reasons for decision.

issues:

(1) Does the Court's order compel the respondent's insurer to contest Sun Life's remittances or seek a tax refund with respect to those remittances from the CRA?

(2) If the respondent's insurer chooses not to request that Sun Life cease deducting taxes from the plan payments, is the appellant entitled to independently contest Sun Life's deduction?

(3) Is the appellant entitled to be reimbursed by the defendant's insurer for any additional expenses she is incurring relating to responding to the T4A slips?

(4) If the respondent's insurer chooses not to apply for a tax refund of the Sun Life tax remittances made during the assignment, is the appellant entitled to apply for any tax refund at the insurer's expense?

holding:

Appeal previously allowed.

reasoning:

(1) No.

The Court found that its order did not compel the respondent's insurer to request that Sun Life cease deducting taxes and seek a refund of tax remittance from the CRA. While not compelled, the defendant's insurer is entitled to make any claim to Sun Life that the appellant would have been entitled to make in relation to her rights under the plan. This claim would be made at the defendant insurer's expense.

(2) The Court declined to decide this issue. The Court was not in a position to make an order that may affect a non-party, particularly given that the parties were likely in a position to work out this issue on consent with Sun Life.

(3) Yes.

The Court stated that to the extent that the appellant was incurring additional expenses relating to responding to the T4A slip, she is entitled to be reimbursed by the defendant's insurer. These expenses relate to the assignment which was already determined to be the defendant insurer's responsibility. However, the Court found that there was no evidence that the appellant was incurring or will incur any additional expenses in the future related to responding to the T4A slips.

(4) Yes.

The Court stated that the appellant is entitled to apply for a tax refund of the Sun Life remittances. Applications to the CRA are likely required to be in the name of the taxpayer. Additionally, the Court stated that the defendant's insurer should pay the expense. The insurer would receive the greater benefit of the tax refunds as part of the assignment.

Teitler v Dale,, 2021 ONCA 577

[van Rensburg J.A. (Motion Judge)]

Counsel:

L.D, in person
M. McCarthy, for the responding party

Keywords: Family Law, Civil Procedure, Vexatious Litigants, Appeals, Extension of Time, Stay Pending Appeal, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 140, Rules of Civil Procedure, Rule 3.02, Howard v. Martin, 2014 ONCA 309, Denomme v. McArthur, 2013 ONCA 694, Byers (Litigation Guardian of) v. Pentex Print Master Industries Inc. (2003), 62 O.R. (3d) 647 (C.A.), Kallaba v. Bylykbashi (2006), 265 D.L.R. (4th) 320, Lukezic v. Royal Bank of Canada, 2012 ONCA 350, Dale v. Teitler, 2018 ONSC 6861 (Div. Ct.), BTR Global Opportunity Trading Limited v. RBC Dexia Investor Services Trust, 2011 ONCA 620

facts:

The moving party sought an extension of time to appeal the vexatious litigant order of Diamond J. in connection with two proceedings: a family law proceeding, and a proceeding commenced by an application pursuant to s.140 of the Courts of Justice Act. The motion was brought over two years after the order the moving party sought to appeal. The moving party also sought a stay pending appeal if the extension was granted.

issues:

(1) Should the moving party be granted an extension of time to appeal?

(2) Should the order be stayed pending appeal?

holding:

Motion dismissed.

reasoning:

(1) No.

The moving party failed to demonstrate the relevant factors to establish grounds for an extension to appeal. First, the Court was not persuaded that the moving party had a bona fide intention to appeal within the relevant period, as there was no notice of appeal or contemporaneous communication with opposing counsel to advise that he was seeking to appeal the vexatious litigant order. Second, the Court rejected the moving party's explanation for the delay, since there was nothing to substantiate the moving party's assertions that the court staff prevented him from bringing the motion. The moving party also relied on the COVID-19 pandemic to explain his delay, but there was nothing in the court's COVID Practice Direction that would have prevented the moving party from pursuing the motion. Third, in ruling that the moving party was afforded all the due process protections and that Diamond J.'s reasons revealed no reversible error, the Court concluded that the proposed appeal had no arguable merit. Finally, the Court reasoned that to permit the moving party to proceed at this stage with his appeal would severely prejudice the responding party's interests and those of the children.

The Court further noted that the moving party failed to put proper evidence before the Court when he submitted unsworn affidavits and could have dismissed his motion on that basis alone.

(2) No.

Even if the extension of time to appeal had been granted, a stay of proceedings would have been denied on the grounds that the moving party's proposed appeal was without merit, there was no evidence persuading the Court that there would be irreparable harm if the stay were refused, and the balance of convenience weighed heavily against a stay.

SHORT CIVIL DECISIONS

Asghar v. Toronto (City), 2021 ONCA 571

[Strathy C.J.O., Feldman and Sossin JJ.A.]

Counsel:

S. A., acting in-person
N. Salafia, for the responding parties

Keywords: Civil Procedure, Appeals, Perfection, Extension of Time, Machado v. Ontario Hockey Association, 2019 ONCA 210, Yaiguaje v. Chevron Corporation, 2017 ONCA 827

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