Ontario Take Five October 2010

October 2010

Inside this Issue:This month we have summarized what we consider to be the five most interesting cases from the Ontario C.A. in October.

We highlight cases from the following areas of law:

Contracts; Remedies; Damages- p.3

Civil Litigation; Estoppel- p.4

Government; Social Assistance; Entitlement- p.6

Occupiers’ Liability; Landlord and Tenant- p.8

Civil Litigation; Intervenors; Family- p.9

In honour of events occurring in Canada this

month, I thought including this inukshuk would be appropriate, particularly since this one looks like it just landed a perfect “10” in an aerial skiing competition...

Ontario Edition

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Barber v. Molson Sport & Entertainment Inc. , 2010 ONCA 570Areas of Law: Contracts; Remedies; Damages Under Appeal: Justice Borkovich

This action arose from various agreements between a number of parties in respect of the supply of water at an outdoor concert in Toronto in 2003. Molson Sport & Entertainment Inc. (“Molson”) was the primary sponsor of the event and held the rights for all food and beverage for the concert. Among other agreements entered with Molson, Jonathan Vrozos (“Vrozos”) bought the exclusive right to supply water. Vrozos then sold his water rights to Stephen Barber, who assigned them to Wahta Natural Spring Water (“Wahta”). At the concert, it turned out that not every bottle of water sold was Wahta water, with Wahta supplying over 3 million bottles, but selling only 250,000. Wahta commenced actions against Molson and Vrozos, who both cross-claimed against each other, and Vrozos counterclaimed against Wahta. The trial judge ordered, among other things, that Vrozos pay $50,000 in punitive damages to Wahta. therefore reviewable.

The appeal on the issue of punitive damages was dismissed. The Court set out the two requirements for a plaintiff to succeed in a claim for punitive damages in an action for a breach of contract, as set out by the Supreme Court in Whiten v. Pilot Insurance Co., [2002] 1 S.C.R. 595. The first requirement is that there must be an independently actionable wrong; in this case, the trial judge’s finding that Vrozos committed fraud. The second requirement is that the defendant’s conduct was “malicious, oppressive, and high-handed”. A power imbalance between parties is not required for a finding of punitive damages, although such an imbalance is often present in cases where punitive damages are awarded. The Court stated that the focus of the analysis in assessing the conduct of the defendant is whether the conduct engages the policy goals underlying damages: retribution, deterrence, and denunciation. The conduct must be so severe that it deserves condemnation and punishment. The Court found that the trial judge was aware of the goals of punitive damage awards and had ample evidence of the severity of Vrozos’s conduct to make such an award. The appellant’s argument that punitive damages are rarely awarded in commercial contracts did not sway the Court and it concluded that his conduct evidenced “flagrant disregard for the basic legal principles” governing contractual relationships, that he violated the trust of Wahata, and that he was dishonest with Wahata for his own personal gain.

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BACKGROUND APPELLATE DECISION

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http://www.ontariocourts.on.ca/decisions/2010/september/2010ONCA0570.htm


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Penner v. Niagara (Police Services Board) , 2010 ONCA 616Area of Law: Civil Litigation; Estoppel Under Appeal: Justice Fedak

The appellant made a complaint against two police officers pursuant to the Police Services Act (the “Act”), alleging that the officers used excessive and unnecessary force during his arrest and that the arrest was unlawful. The officers were subject to disciplinary proceedings, but ultimately the appellant’s complaint was dismissed. The appellant successfully appealed to the Ontario Civilian Commission on Police Services, but the Divisional Court overturned the ruling and restored the initial decision of the hearing officer. The appellant commenced a civil action against the officers as well as the Niagara

Regional Police Services Board. The respondents successfully moved to strike the civil statement of claim on the ground of issue estoppel, pursuant to Rule 21.01(1) of the Rules of Civil Procedure.

[continued on the next page]

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Penner v. Niagara (Police Services Board) (cont.)

The appeal was dismissed. The Court

reviewed the jurisprudence governing issue estoppel. The moving party must show that the same question was previously determined, that such determination was final, and that the parties to the prior determination were the same as those to the action in question. Even where all three requirements are satisfied, the court retains discretion to refuse to apply issue estoppel where the result would create an injustice. The Court considered the three requirements for estoppel, agreeing with the determination of the motions judge that the initial hearing officer at the disciplinary hearing made a finding adverse to the appellant as to whether the arrest was unlawful

or unreasonable force was used. The Court also agreed that the parties to the disciplinary hearing were the same as those in the proposed civil action because the appellant was a party to the disciplinary hearing. As to the two claims raised in the civil action that were not part of the disciplinary hearing- false imprisonment and malicious prosecution- the Court agreed with the motions judge that the findings in the disciplinary hearing foreclosed success on these two causes of action. First, the hearing officer found the arrest lawful, so a claim of false imprisonment could not succeed. Second, the hearing officer found that the officers had reasonable and probable cause for the appellant’s arrest, so the malicious prosecution claim was bound to fail because lack of reasonable

and probable cause is an essential element of that tort. On the issue of whether the motions judge appropriately exercised his discretion in applying estoppel, the Court found that the motions judge erred in principle by not adequately addressing the relevant considerations. On this matter, the Court considered the evidence afresh and determined that although both proceedings had a different purpose and there was no financial issue in the disciplinary hearing, there were significant factors to mitigate in favor of the application of estoppel. Those factors include the expertise of the decision maker, the appellant’s active participation in the disciplinary proceeding, the procedural safeguards in place for the disciplinary hearing, and the appellant’s right of appeal.

APPELLATE DECISION

This case examines whether a provision of the Ontario Disability Support Program Act (the “ODSPA”) violates the Human Rights Code (the “Code”) by discriminating against people with a disability on the ground that the disability is solely the result of dependence on alcohol or other substances. The respondents applied for benefits pursuant to the ODSPA, but the appellant denied their claims on the basis that s.5(2) of the ODSPA denies disability benefits to people whose sole reason for disability is alcohol or other substance dependence. The respondents instead obtained welfare benefits, which are short–term, impose employment-training requirements and provide several hundred dollars less per month than disability benefits. The respondents appealed the denial of disability benefits to the Social Benefits Tribunal (the “SBT”) and were successful in obtaining a finding that s.5(2) violates s.1 of the Code. The SBT applied the test for establishing discrimination under s.15 of the Charter as set out by the Supreme Court of Canada in Law v. Canada (Minister of Employment and Immigration), [1999] 1 S.C.R. 497, although found it unnecessary to make a finding that a violation of human dignity had occurred. The appellant appealed the SBT’s decision to the Divisional Court. The Divisional Court offered a reformulated test for considering discrimination claims brought under the Code and dismissed the appeal. [continued on the next page]



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Ontario (Disability Support Program) v. Trachemontagne, 2010 ONCA 593Area of Law: Government Law; Social Assistance; Entitlement Under Appeal: Justices Cunningham, Bellamy & Gray

BACKGROUND





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Ontario (Disability Support Program) v. Trachemontagne (cont.)

The appeal was dismissed, although

the Court disagreed with the reformulated test pronounced by the Divisional Court. The Divisional Court based its reformulated test on the Supreme Court’s decision in R. v. Kapp, [2008] 2 S.C.R. 483, which was released after the decision of the SBT in this matter. The Court found that the approach of the SBT was consistent with both Law and Kapp, and stated the appropriate test for discrimination cases brought under the Code. First, the claimant must establish that the conduct creates a distinction on a prohibited ground, and second, the claimant must show that the distinction creates a disadvantage by perpetuating prejudice or

stereotyping. The Court confirmed the approach of the SBT in not stringently applying the third step of the Law analysis- assessing whether the conduct violates the human dignity of the claimant. Unlike the Divisional Court’s proposed test, the Court held that the burden rests with the claimant throughout the two-stage test to show a disadvantage, and only where the respondent is attempting to justify the conduct through a statutory defence or otherwise will the burden shift to the respondent. In discussing the evidentiary requirements for a discrimination claim, the Court stated that the nature of the case will drive the extent to which the evidence will lead to an

inference of stereotyping or perpetuating disadvantage or prejudice. The Court confirmed that the essence of discrimination claims is the nexus between the distinction on a prohibited ground and a disadvantage that actually engages the substantive equality protection secured by the Code.

APPELLATE DECISION

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The appeal was allowed. The trial judge did not properly consider the respondent’s own admission that he was an occupier of the premises in finding that he owed no duty of care to the appellant. This admission, along with the finding by the trial judge that the cinder block ring around the fire pit constituted a danger, ought to have been sufficient to find liability under s.3(1) of the OLA. Further, the trial judge did not properly consider the role of the LTA in holding that the respondent owed no duty of care to the appellant. Although the OLA makes tenants responsible for dangers they create on leased properties, s.8(1) also imposes a duty on landlords for maintenance and repair of the property. This section deems landlords occupiers where their failure to maintain and repair property creates a danger to guests of the premises. Sections 94(1) and 80(1) of the LTA impose statutory responsibilities on landlords to repair and maintain residential premises and state that a tenancy agreement cannot absolve a landlord of such obligations, as the tenancy agreement in this case purported to do. The Court determined that the respondent was responsible for half of the reduced damage award to the appellant.

The appellant attended a party at the

respondent’s property and sustained serious burns when he tripped over a cinder block ring around a fire pit and fell into the recently extinguished but very hot pit. At the time of the accident, the respondent was leasing the property to his mother and another defendant, not parties to the appeal. Part of the lease agreement, which was governed by the Landlord & Tenant

Taylor v. Allen, 2010 ONCA 596Areas of Law: Occupiers’ Liability; Landlord and Tenant Judge Under Appeal: Justice Marchand

Act (the “LTA”) because it was a residential tenancy, contemplated the tenants undertaking the maintenance and repair of the property in lieu of paying rent. The appellant’s action for damages centered on the Occupier’s Liability Act (the “OLA”). The trial judge held that the tenant defendants were “occupiers” for the purposes of the OLA, and as such, were liable for damages, reduced by half for the contributory

negligence on the part of the appellant. The cinder block ring around the fire pit, constructed prior to the tenancy, constituted a danger within the meaning of the OLA.


BACKGROUND

APPELLATE DECISION





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The Court allowed the application to intervene. Rule 13.01(1) of the Rules of Civil Procedure sets out the requirements for a person who is not a party to apply for leave to intervene. Satisfying any one of the three requirements is sufficient for a court to grant leave to intervene. According to the Rule, the intervening party must have an interest in the subject matter of the proceeding, or the party may be adversely affected by the consequences of the hearing, or there may exist a question of law or fact between the intervening party and one

The parties had been litigating matters in

relation to the breakdown of their marriage for a number of years. The parties have two sons, L.B. and J.B.. L.B. is 19 and lives with his father. J.B. is 16, and his custody was the issue in this appeal. J.B. had been living with his father since 2006. His mother sought an order for his custody, claiming the father was attempting to alienate the boys from her. The trial judge granted the custody order to the mother and also prohibited contact between J.B. and his father for a period of three months. Days after the trial judge’s order was released, J.B. brought a motion to stay the order pending appeal even though he was not party to the action. One justice of the Court in chambers granted the stay. The issue on appeal was J.B.’s subsequent application for leave to intervene as a party to the appeal.

S.G.B. v. S.J.L.., 2010 ONCA 578

Areas of Law: Civil Litigation; Intervenors; Family Law Under Appeal: Justice Mesbur


BACKGROUND APPELLATE DECISION

of the litigating parties that is in common with an issue in the proceeding. The Court concluded that J.B. satisfied all three requirements. Although the Court retains discretion to refuse an intervention order even where the intervening party has satisfied the requirements in Rule 13.01(1), it declined to exercise such discretion in this case. The Court commented that it is unusual to allow a child who is the subject of a dispute to be added as a party, but in this case, J.B. is 16 years old, intelligent, and old enough to participate in the proceeding because of the significance the result will have on his life. The Court stated that the panel hearing the appeal would benefit from hearing J.B.’s thoughts on the issues. The Court imposed two terms on the intervention to ensure a timely resolution of the case. First, J.B. must accept the trial record and not seek to adduce fresh evidence on appeal and second, J.B. is not allowed to advance the constitutional arguments contained in his factum because they were not raised at trial and have little merit considering the private nature of the litigation.




Ontario Take Five October 2010

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