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Caselaw is a weekly summary of notable civil and criminal court decisions by the Supreme Court of Canada, the Federal Court of Canada and all Ontario courts.

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Corporations

WINDING UP

Behaviour was not so serious as to justify winding up of company

Parties were all family and extended family members. Parties were shareholders of numbered company that was incorporated in 1990 to enable acquisition of investment property by original investors. Applicants were majority shareholders of company. Since 2003, relations among parties began to become more difficult as regards operation of business and other matters. Applicants alleged that they had now been precluded from obtaining any information about business, that respondent individual had failed to disclose financial and other information about operation of business, had failed to call shareholders meetings since 2006, had obtained and used pre-signed blank cheques from applicant, had misused them and had misappropriated funds. Applicants sought orders, including removal of respondent individual as director, repayment by respondent individual of misappropriated funds, full disclosure of all financial and corporate books and records, accounting of all finances of company, and winding up of company with sale or court imposed buy-sell process. Application allowed in part. Evidence did not support applicants’ assertions that their reasonable expectations were violated by conduct falling within terms oppression, unfair prejudice or unfair disregard of relevant interests. While court was satisfied that that there had been disaccord, mistrust and some unco-operative and unbusiness-like behavior on parts of various shareholders, it was not of view, that such behaviour was so oppressive, unfairly prejudicial or so serious as to justify winding up of company. However, there was to be full disclosure of all business records, financial statements, banking records from all banks used by company from 2008 to present, within 30 days. Thereafter, shareholders meeting was to be held on annual basis.
Papais v. Moretto (Mar. 27, 2014, Ont. S.C.J., Carole J. Brown J., File No. CV-13-480434) 239 A.C.W.S. (3d) 639.

Civil Procedure

DEFAULT

To move from finding arguable defence to final determination was not just result

For years plaintiff provided crop services to defendant. When defendant did not fully pay for services, plaintiff had him sign invoice to acknowledge outstanding amount of $49,862.82. Pre-printed words at bottom of invoice stated that interest would be charged on overdue accounts at annual rate of 24%. Plaintiff sued defendant for unpaid amount plus interest and obtained default judgment. Six years later defendant brought motion to have default judgment set aside. Motion judge concluded that defendant had arguable defence on merits of applicable interest rate. Motion judge varied default judgment by substituting annual interest rate of 5%. Plaintiff appealed. Appeal allowed. Motion judge considered relevant factors. There was evidence before motion judge that called into question whether defendant had agreed to pay interest at rate of 24% per annum. Having found that there was arguable defence, it was open to motion judge to find that interests of justice favoured setting aside default judgment. Motion judge did not fail to give adequate weight to unexplained delay and prejudice to plaintiff. Motion judge made no error in law or principle, no palpable or overriding error of fact and decision was not so clearly wrong as to amount to injustice. However, motion judge erred in making final determination of merits of defendant’s defence. Defendant’s motion sought to set aside default judgment. Motion did not seek determination of whether defence should succeed if there was arguable defence. To move from finding arguable defence to final determination was not just result. Appropriate remedy was to set aside default judgment in part and order that matter proceed on issue of interest.
Mountain View Farms Ltd. v. McQueen (Mar. 14, 2014, Ont. C.A., E.E. Gillese J.A., Paul Rouleau J.A., and M. Tulloch J.A., File No. CA C56832) Decision at 227 A.C.W.S. (3d) 969 was reversed.  239 A.C.W.S. (3d) 635.

Immigration

INADMISSIBLE AND REMOVABLE CLASSES

No true and clear picture of existing and future humanitarian and compassionate concerns

Family member not declared as dependent upon arrival of sponsor in Canada. Foreign national, who was citizen of China born in May 1994 and living in China, was sponsored to Canada in November 2011 by her mother, citizen of Canada who came to Canada in 2005 with her husband and older daughter. Sponsorship application was refused because foreign national was not declared as dependent by her mother upon arrival in Canada. During interview officer questioned foreign national about past and impact of being left behind in China by mother, rather than about present and future best interests. Officer refused permanent residence application after making finding of inadmissibility. Foreign national applied for judicial review. Application granted. Although foreign national was not child at time decision under review was made, officer’s conclusion was required to display fundamental understanding of present and future impact on foreign national of being separated from her mother, both practically and emotionally. Officer did investigate practicalities in interview of foreign national, but did not ask questions that would illicit answers that would provide true and clear picture of existing and future humanitarian and compassionate concerns. Because this line of investigation was required to be engaged, and since it was not engaged, officer’s decision was unreasonable.
Liao v. Canada (Minister of Citizenship and Immigration) (Apr. 8, 2014, F.C., Douglas R. Campbell J., File No. IMM-12150-12) 239 A.C.W.S. (3d) 737.

Immigration

EXCLUSION AND EXPULSION

Officer almost certainly wrong when he described situation as unchanged

Applicant’s underlying judicial review application sought deferral of removal in face of new risks facing homosexuals and bisexuals in Nigeria. Applicant claimed he was bisexual and feared his sexual orientation would put him at serious risk of death, extreme sanction and inhumane treatment in Nigeria. Motion by applicant for stay of removal pending outcome of judicial review application. Motion granted. Officer was given country condition reports, which demonstrated situation in Nigeria had worsened. In applicant’s refugee application, board did not accept applicant had personalized risk, but did not make any finding on his sexual orientation or generalized risk. As such, officer had no basis to conclude risk considered by board was same generalized risk presented in support of deferral request. While officer did not have authority to look behind board decision, he had duty to consider generalized risk faced by applicant as purported bisexual returning to Nigeria. Nigerian government had begun campaign against homosexuals and bisexuals, with round ups and inhumane punishment, which had been condemned by Canada and other countries. Officer was almost certainly wrong when he described situation in Nigeria as unchanged and found that board had appropriately assessed generalized risk. Irreparable harm was established and Canada clearly should not be deporting homosexuals and bisexuals to Nigeria in current conditions. Balance of convenience favoured applicant’s interest over Minister’s desire to deport him.
Abioye v. Canada (Minister of Public Safety and Emergency Preparedness) (Apr. 10, 2014, F.C., R.L. Barnes J., File No. IMM-1828-14) 239 A.C.W.S. (3d) 718.

Employment Insurance

DECISIONS OF UMPIRE

Complete, whole day did not necessarily mean calendar day

Claimant became entitled to employment insurance benefits effective July 3, 2011. For short period of time claimant was outside Canada and unavailable for work. Claimant left Canada on morning of first day and returned during evening of second day. Pursuant to s. 37(b) of Employment Insurance Act (Can.), claimant was not entitled to receive employment benefits for any period she was not in Canada. Umpire found that first day did not count in calculation of period claimant was outside Canada, but second day did. Attorney General applied for judicial review of umpire’s decision. Application dismissed. Interpretation that would disentitle person from benefits for fractions of days would not further administrative efficiency. Express words, design and architecture of Act supported view that “period” in s. 37(b) was to be expressed only in whole days, not fractions of days. Person who was outside Canada for fraction of complete day was not counted as “period” outside of Canada under s. 37(b). Claimant was away for total of one day, but on each calendar day she was away for only fraction of day. Absence on each calendar day should not be disregarded. “Period” in s. 37(b) was period, expressed in complete, whole days, during which claimant was outside of Canada. Complete, whole day did not necessarily mean calendar day and it could include continuous 24-hour period that straddled two calendar days. Claimant was outside of Canada for one complete whole day and she was not entitled to receive one day of benefits.
Canada (Attorney General) v. Picard (Feb. 17, 2014, F.C.A., K. Sharlow J.A., David Stratas J.A., and D.G. Near J.A., File No. A-3-13) 239 A.C.W.S. (3d) 659.

Charter of Rights

ARBITRARY DETENTION OR IMPRISONMENT

Lack of reliability concerning initial tip increased obligation of officers

Accused sought to exclude evidence regarding his arrest for cocaine trafficking. Police received anonymous tip and put accused under surveillance and observed him have four meetings which police suspected were drug transactions. Accused was long term resident of community, knew lots of people and was observed to meet in place such as department store and hockey game. Application granted, evidence excluded. Court did not find reasonable and probable grounds for arrest, various meetings could be accounted for by other explanations and all of them appeared to be neutral in nature. Lack of any reliability concerning initial tip and accused’s lack of criminal record increased obligation of officers in their investigation to at least observe hand to hand transaction or, where drugs were later found, face to face meeting. It was especially necessary considering fact that accused appeared to have been long time resident of community who knew many people with meetings having possible innocent explanation.
R. v. Biadi (Apr. 22, 2014, Ont. S.C.J., McDermot J., File No. CR-12-00004914-0000) 112 W.C.B. (2d) 771.

Appeal

GROUNDS

Misapprehended evidence relied on to make crucial credibility assessments at trial

Trial judge convicted accused of sexual assault of neighbour’s five-year-old daughter. Complainant testified during horseplay where accused blew on children’s stomachs he performed oral sex on her. Accused denied sexual contact but admitting to nature of horseplay with children. Forensic expert testified deposits of accused’s DNA found in complainant’s underwear but not from external vaginal swab. Forensic expert testified secondary transference of DNA to underwear could not be ruled out. Trial judge stated in reasons she agreed with expert DNA could not have been deposited to underwear other than through oral sex on complainant. Trial judge using finding concerning forensic evidence to bolster credibility of complainant and reject evidence of accused. Appeal allowed and new trial ordered. Trial judge critically misapprehended forensic evidence by stating deposit could only have been through oral sex and wholly ignored negative result of vaginal swab. Misapprehended evidence relied on to make crucial credibility assessments at trial. Correctly apprehended forensic evidence tended to bolster accused’s admission to non-sexual oral contact with children. Forensic evidence tended to undermine complainant’s evidence oral sex occurred.
R. v. C. (M.M.) (Apr. 23, 2014, Ont. C.A., Alexandra Hoy A.C.J.O., H.S. LaForme J.A., and G. Pardu J.A., File No. CA C54917) 112 W.C.B. (2d) 788.

Corporations

CORPORATE IDENTITY

Corporate defendants were alter egos of each other and acted as single business

Plaintiff delivered electrical equipment to defendant companies. Plaintiff claimed it was owed $150,950.16. Defendants did not dispute receiving goods from plaintiff for which they had not paid, but disputed amount owing. Plaintiff brought motion for summary judgment for breach of contract and breach of trust under Construction Lien Act (Ont.). Motion granted in part. Plaintiff’s documents were sufficient to establish account balance and were accepted in absence of any probative evidence to contrary. Plaintiff was awarded judgment of $150,950.16 plus interest. Defendant companies were iterations of same business. It was not clear which company ordered and used goods purchased from plaintiff. It was within defendants’ knowledge which company had benefit of supply of plaintiff’s goods. Defendants were deliberately misdirecting liability among themselves. For purposes of supply contracts at issue, corporate defendants were alter egos of each other and acted as single business and were jointly and severally liable. Individual defendant was operating mind of companies and was person plaintiff dealt with. If there was breach of trust then individual would be liable for it. It was for plaintiff to show that there were trust funds and that funds had been disbursed in breach. Information that was relevant to establishing propositions would be in defendants’ possession and had not yet been produced. Individual defendant failed to attend for cross-examination, but there was evidence that failure was inadvertent and individual defendant was given another chance to discharge his obligation before drawing adverse interference of breach of trust. Individual defendant was to provide list of documents.
Rexel Canada Electrical Inc. v. Tron Electric Inc. (Mar. 31, 2014, Ont. S.C.J., D.L. Corbett J., File No. CV-11-433830) 239 A.C.W.S. (3d) 361.

Civil Procedure

SUMMARY JUDGMENT

No evidence of economic loss or damage as result of sigma of haunted property

Plaintiff purchased commercial property from defendant. Article appeared in newspaper in which director of defendant was quoted as saying that property was haunted. Plaintiff commenced action on basis that there was latent defect in property that defendant knew about and concealed or failed to disclose, namely, death or murder at property. Defendant successfully brought motion for summary judgment and claim was dismissed. Plaintiff appealed. Appeal dismissed. There was no direct evidence of economic loss or damage as result of stigma of haunted property. There was no direct evidence from anyone who observed any strange occurrences at property. Motion judge did not err in concluding that case was proper one for dismissal on summary judgment.
1784773 Ontario Inc. v. K-W Labour Assn. Inc. (Apr. 14, 2014, Ont. C.A., Feldman J.A., Rouleau J.A., and Hourigan J.A., File No. CA C57674) Decision at 234 A.C.W.S. (3d) 1067 was affirmed.  239 A.C.W.S. (3d) 529.

Immigration

REFUGEE STATUS

Analysis and reasons so inadequate that they could not be considered reasonable

Refugee claimants were citizens of Croatia of Serbian ethnicity who alleged fear of persecution by reason of their ethnicity. Claimants alleged that they had difficulty in obtaining work, suffered discrimination in workplace, and were verbally harassed. Board found that incessant and repeated acts of discrimination suffered by all members of family by reason of their nationality, particularly their son being beaten and discrimination suffered by female claimant in finding employment, amounted to persecution. Board found that state protection would not be forthcoming as claimants had made several attempts to obtain protection from police authorities and although police responded on every occasion, they consistently failed to provide adequate level of protection to family. Board found that documentary evidence confirmed that discrimination against ethnic Serbs existed throughout Croatia, and that claimants would not likely be able to find gainful employment in all of Croatia. Board concluded that claimants were Convention Refugees and Minister applied for judicial review. Application granted. Board failed to properly consider evidence before it, and its analysis and reasons were so inadequate that they could not be considered reasonable. Board’s finding that incessant and repeated number of acts of discrimination suffered by all members of family amounted to persecution did not accord with evidence before it. Board’s finding that police consistently failed to provide adequate level of protection was not grounded in evidence as board recognized that police responded on every occasion that they were called by claimants and there was no evidence that police failed to follow through on any investigations or failed to provide any services. Board’s treatment of existence of internal flight alternative was deficient and not grounded in evidence before it. Board failed to properly consider evidence before it, and its analysis and reasons were so inadequate that they could not be considered reasonable.
Canada (Minister of Citizenship and Immigration) v. Viljanac (Mar. 21, 2014, F.C., Daniele Tremblay-Lamer J., File No. IMM-3807-13) 239 A.C.W.S. (3d) 458.
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