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Case Law is a sample selection from the weekly summaries of notable unreported civil and criminal court decisions published in Law Times newspaper.

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Construction Law

Statutory regulation

Building permits

Municipality was liable for damages for negligence and negligent misrepresentation

Plaintiffs purchased former group home in defendant municipality with intention of opening tourist oufitting business serving Algonquin Park. Plaintiffs intended to convert home into business with overnight residential space for tourists using their services. Municipality was supportive and Chief Building Officer (“CBO”) S issued building permit requiring new windows, doors, and fire escape signage. New CBO H replaced S and made substantial additional demands for upgrades and lowered permitted occupancy rates to below economically viable level. Plaintiffs attempted to list property for sale but H’s replacement was told by municipality not to inspect property so it could not be sold. Plaintiffs successfully brought action for damages for negligence and negligent misrepresentation. Municipality appealed. Appeal dismissed. Duty to mitigate required that plaintiffs take reasonable steps to mitigate damages. Duty to mitigate, however, did not require injured party to spend money that it did not have, especially when it was conduct of tortfeasor that has left injured party without funds. Court would not interfere with damages award.
Carson v. Kearney (Town) (2016), 2016 CarswellOnt 20128, 2016 ONCA 975, Doherty J.A., E.E. Gillese J.A., and Grant Huscroft J.A. (Ont. C.A.); leave to appeal refused (2016), 2016 CarswellOnt 6693, 2016 ONSC 2836, E.J. Koke J. (Ont. S.C.J.). (Ont. C.A.); affirmed (2016), 2016 CarswellOnt 6694, 2016 ONSC 1940, E.J. Koke J. (Ont. S.C.J.).

Business Associations

Specific matters of corporate organization

Shares

Application to enforce arbitral awards against shares was dismissed

Applicants holding foreign arbitral awards against respondent Kyrgyz Republic, and claiming Republic owning shares in respondent Canadian company, registered in name of respondent Kyrgyz corporation, which was wholly owned by Republic. Applicants seeking to enforce arbitral awards against shares in Canadian company, and applying for declaration that Republic owned shares. Applications judge focusing on agreement on new terms between Republic, Kyrgyz corporation, Canadian company and subsidiaries (“ANT”) to find that Republic did not own shares. Applicants appealed. Appeal dismissed. Applications judge’s decision to focus on ANT was entirely reasonable, as it was only document capable of proving that there had been transfer. ANT did not establish that Republic had any ownership interest in shares. Restated shareholders’ agreement was expressly contemplated by ANT, Republic was not party to it, and it explicitly referred to Kyrgyz corporation as registered and beneficial owner of shares. All parties intended Kyrgyz corporation to be beneficial owner of shares.
Belokon v. Kyrgyz Republic (2016), 2016 CarswellOnt 20453, 2016 ONCA 981, E.A. Cronk J.A., R.G. Juriansz J.A., and L.B. Roberts J.A. (Ont. C.A.); affirmed (2016), 2016 CarswellOnt 10918, 2016 ONSC 4506, Conway J. (Ont. S.C.J. [Commercial List]).

Civil Practice and Procedure

Actions involving parties under disability

Mental incompetents

Proposed settlement was approved by court

Court approval of settlement. Insured was elderly man who suffered significant head injury when struck by vehicle while walking across roadway. Insurers paid more than $1.3 million for statutory accident benefits (SABs). Insurers offered to settle insured’s SAB claim by payment of $180,000 for future attendant care, $180,000 for future medical and rehabilitation benefits, $10,000 for costs, and $3,000 for assessable disbursements. Insured’s solicitors would receive total of $53,680 from settlement amount. Insured, through his litigation guardian, applied for order approving proposed full and final settlement of his SAB claim. Application granted. Insured’s solicitors had obtained settlement that was in best interests of insured and that would adequately look after his needs. Resolution of SAB claim on full and final basis would bring end to claim and negate need to participate in dispute resolution process regarding any future denial of benefits requested. Proposed settlement represented fair and appropriate resolution of insured’s claims for SABs having regard to complete factual matrix of case. Proposed legal fees were fair and reasonable.
Kwok (Litigation guardian of) v. State Farm Mutual Automobile Insurance Co. (2016), 2016 CarswellOnt 19083, 2016 ONSC 7339, Firestone J. (Ont. S.C.J.).

Civil Practice and Procedure

Class and representative proceedings

Representative or class proceedings under class proceedings legislation

Class proceeding was preferable procedure

Plaintiff commenced class action alleging defendants controlled supply of gem grade diamonds in order to increase price, which in turn resulted in sales in retail market at inflated prices. Proceedings were commenced in Ontario, British Columbia, Quebec and Saskatchewan. Plaintiffs reached resolution with defendants. Parties brought motion for order on consent certifying class for settlement purposes and for approval of notices of hearing for court approval of settlement. Motion granted. Cause of action was clearly and plainly disclosed in pleadings, arising from alleged breach of Competition Act and tort of conspiracy. Proposed class was defined objectively and its membership was readily discernible. Claim raised common legal and factual issues about existence, extent and effect of alleged conspiracy. Class proceeding was preferable procedure. Proposed notices and plan of dissemination were acceptable.
Brant v. De Beers Canada Inc. (2016), 2016 CarswellOnt 18869, 2016 ONSC 7515, H.A. Rady J. (Ont. S.C.J.).

Business Associations

Legal proceedings involving business associations

Practice and procedure in proceedings involving corporations

Appeal was transferred to Divisional Court

Shareholders commenced action against corporations in negligence for failing to prevent or detect fraud. Corporations moved to strike portions as amended statement of claim. In response, shareholders moved under s. 246 of Ontario Business Corporations Act (Act) for leave to commence derivative action. Motion judge found shareholders’ motion was statute-barred by virtue of s. 4 of Limitations Act, 2002. Shareholders appealed to Ontario Court of Appeal. Appeal transferred to Divisional Court. Order under appeal was order within meaning of s. 255 of Act, and appeal lay to Divisional Court.
1186708 Ontario Inc. v. Gerstein (2016), 2016 CarswellOnt 18627, 2016 ONCA 905, E.E. Gillese J.A., M.L. Benotto J.A., and L.B. Roberts J.A. (Ont. C.A.).

Bankruptcy and Insolvency

Discharge of bankrupt

Conditional discharge

Condition imposed was not unreasonable

Bankrupt misappropriated over $5 million from clients while employed as investment advisor by creditor. Bankrupt was ordered to pay restitution to creditor but did not do so. Creditor petitioned bankrupt into bankruptcy and filed proof of claim for amount it had reimbursed its clients. During bankruptcy, bankrupt received disability payments of $13,000 to $15,000 per month but paid no surplus income. Master ordered that, as condition of discharge, bankrupt was to pay $284,346 to Trustee as surplus income up to certain date, payable at $5,000 per month. Master also ordered bankrupt to pay additional $5,000 per month to Trustee for further six years, referring to amounts as surplus income payments. Master suspended discharge from bankruptcy for two years, subject to payment of surplus income. Bankrupt appealed, alleging Master erred in ordering him to pay further $5,000 per month of “surplus income” for six years as condition of discharge. Appeal dismissed. When viewed in their entirety, Master’s reasons did not refer to surplus income within meaning in s. 68 of Bankruptcy and Insolvency Act but instead referred to income which is available for payment pursuant to condition of bankrupt’s discharge under s. 172 of Act. Master was clear that further payment was imposed as condition of bankrupt’s discharge without any reference to surplus income under s. 68. Condition imposed was not unreasonable. Duration of payments was not unduly long. Circumstances of case were exceptional, both in terms of breach of trust and fraud that gave rise to creditor’s claim and in terms of amount of claim.
Cole v. RBC Dominion Securities Inc. (2016), 2016 CarswellOnt 19513, 2016 ONSC 7110, H.J. Wilton-Siegel J. (Ont. S.C.J.).

Administrative Law

Requirements of natural justice

Right to hearing

Reasons of municipal police services board were inadequate

Applicant taxi company had license to run accessible taxi service revoked, by decision of municipal police services board. Taxi company claimed that decision was made without sufficient reasons. Taxi company applied for judicial review of board’s decision. Application granted. New hearing ordered. There was conflicting evidence as to whether taxi company had vehicles on road without insurance, and whether they had office open at all times. Board’s decision did not resolve conflicts. Reasons were inadequate as whole. Revocation had to remain in interim, before new hearing took place.
Guelph Taxi Inc. v. Guelph Police Service (2016), 2016 CarswellOnt 18684, 2016 ONSC 7383, Dambrot J., Hambly J., and Mew J. (Ont. Div. Ct.).
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An estate trustee who took an ‘egregious' position in litigation has been ordered to personally pay more than $140,000 in costs. Will this ruling serve as an appropriate caution to executors on how they conduct themselves in litigation?
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