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Criminal Law

CIVIL FORFEITURE

Despite errors, still manifestly harsh and inequitable to order forfeiture

Civil Remedies Act, 2001 (Ont.), establishes civil forfeiture scheme providing for forfeiture of property used to engage in unlawful activity (s. 8(1)). Forfeiture subject to “Responsible Owner Exception”, where party seeking to avoid forfeiture establishes he is “responsible owner”, and “Interest of Justice Exception”, which grants courts discretion to relieve against forfeiture if order clearly not in interest of justice. Attorney General of Ontario applied for s. 8(1) forfeiture of single-family, private residence used to engage in unlawful activity. Owner rented residence to son who had long-standing and serious addiction to drugs and lengthy criminal record. While son lived in residence, he was convicted of various drug and trafficking offences. Application judge dismissed application, finding that Responsible Owner Exception did not apply, but that Interest of Justice Exception did apply because Attorney General inexplicably delayed, thereby prejudicing owner and rendering forfeiture order unfair. Attorney General’s appeal dismissed. Evidentiary record did not support finding of delay attributable to Attorney General. Forfeiture proceeding commenced within five months of initial police referral and three months of submission to Attorney General. Application judge erred by failing to assess undue delay claim in context of full record and by failing to give effect to s. 8(5) Act which provides there is no limitation period for s. 8(1) forfeiture proceeding. Application judge improperly substituted own discretion. Despite errors, still manifestly harsh and inequitable and clearly not in interests of justice to order forfeiture. Connection between property and son’s illegal activities neither consistent nor overwhelming; forfeiture order would not promote deterrence and crime prevention goals. Application judge failed to consider evidence as whole regarding reasonableness of owner’s conduct in relation to property and son’s activities when addressing Interest of Justice Exception. Owner entirely innocent of any involvement in and derived no benefit from unlawful activities and attempted to assist son in overcoming drug addiction. Owner made diligent efforts to monitor activities at property. Court justified in exercising discretion to refuse forfeiture.
Ontario (Attorney General) v. 20 Strike Avenue (May. 16, 2014, Ont. C.A., J.C. MacPherson J.A., E.A. Cronk J.A., and E.E. Gillese J.A., File No. CA C57014) Decision at 228 A.C.W.S. (3d) 420 was affirmed.  240 A.C.W.S. (3d) 378.

Civil Procedure

DISCOVERY

Names of students not privileged when they originated in other documents

Plaintiff was teacher at defendant school. It was alleged that plaintiff assaulted one of students who was son of another teacher and her husband. Parents complained to school and reported incident to police. Police contacted Children’s Aid Society. Police and society conducted separate investigations. School held meeting of parents and others in community. It was alleged that husband defamed plaintiff at meeting. Plaintiff was not present at meeting. Society and police found that allegations were unfounded. Plaintiff’s employed was ended. Plaintiff sued school and parents. Plaintiff brought motion for order that representative of defendant answer certain questions put to him on examination for discovery. School claimed it was prevented from answering outstanding questions and making related production by virtue of privilege established by s. 266(2) of Education Act (Ont.). Motion was dismissed. Plaintiff appealed. Appeal allowed. Information as to who was invited and attended meeting reflected on whether there was defamation or libel and if so, how damaging it might have been to plaintiff. Name of parent who had some information as to society’s investigation indicated possibility that there was someone who could contribute some understanding as to how investigation was undertaken and substance behind its conclusions. Nothing in material suggested that any of this would or could improve instruction or education of any student. None of information belonged in Ontario Student Record (OSR) and was not subject of privilege. Question as to who attended meeting was about parents, not students. To disallow information from other sources to be released because it also happened to be in OSR, particularly information that reflected nothing more than identity of student, would extend privilege in manner that was contrary to public interest. Names of students were in OSR to assist individuals referred to in s. 266(2) of Act for improvement of instruction and other education of pupil. Names of students were not privileged when they originated in other documents where they were used for other purposes.
Robinson v. Northmount School for Boys (May. 2, 2014, Ont. S.C.J., Lederer J., File No. CV-09-378776) Decision at 226 A.C.W.S. (3d) 76 was reversed.  240 A.C.W.S. (3d) 328.

Conflict of Laws

SERVICE EX JURIS

Mother permitted to proceed with undefended trial as father properly served

Parties were married on March 7, 1987, and separated on May 13, 1995. Parties had two children born on Jan. 15, 1990, and Feb. 16, 1993. Court issued final order on Dec. 18, 2008, which terminated child support for oldest child, adjusted child support payable for youngest child, and addressed outstanding arrears. Mother now brought motion to change final order. Father lived in state of Georgia. Motion to change was served on father in Georgia. Father failed to respond within 30 days required under Family Law Rules (Ont.). Motion proceeded on undefended basis. Motion granted. Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters applied to case. Convention must be complied with for service of family law proceedings within contracting states. Process server employed by mother was authorized, within State of Georgia, to serve court documents anywhere in Georgia. Father was served in manner that was authorized by Convention, and service in that way was permissible in Ontario. Service was acceptable. Since father was properly served with motion to change and appropriate documents, and had not responded, mother was permitted to proceed with undefended trial. Based on her affidavit material, court was persuaded mother was entitled to order sought.
Pitman v. Mol (Apr. 24, 2014, Ont. S.C.J., Gray J., File No. 4060/08) 240 A.C.W.S. (3d) 63.

Administrative Law

BIAS

Judge’s comments indicated partiality to evidence given by police officers

Applicant brought application for declaration that certain moneys that she had advanced to daughter and respondent, who was daughter’s common law husband, towards purchase of house were not gift, but loan that constituted unregistered mortgage on home. Although application was supported by one document, meaning and intent of that document was in dispute, as were the facts that had to be found in order to determine whether declaration should be granted. Trial judge dismissed application. Trial judge accepted respondent’s contention that loan had been gift, which was made in return for free room and board. Daughter and respondent were police officer. Trial judge expressed concern about making finding that police officer was untruthful. Applicant appealed on basis that application judge erred in failing to find that trial was necessary in circumstances, and on basis that impugned comments by application judge created reasonable apprehension of bias. Appeal allowed. Applying test for reasonable apprehension of bias, it was clear that reasonable observer would conclude that it was more likely than not that, consciously or unconsciously, application judge would not impartially decide whom to believe. Application judge’s comments indicated partiality to evidence given by police officers. Even though he gave other reasons for deciding whose evidence he believed, those reasons were tainted by comments. Decision was set aside and new trial ordered.
Laver v. Swrjeski (Apr. 17, 2014, Ont. C.A., K. Feldman J.A., J.C. MacPherson J.A., and Gloria Epstein J.A., File No. C57052) 240 A.C.W.S. (3d) 2.

Family Law

DOMESTIC CONTRACTS

Absence of witness to husband’s signature did not preclude wife from relying on contract

Parties cohabited from 2007 to 2012 in wife’s home and had one child. Wife had significantly greater assets and income than husband. In 2008, wife asked husband to sign domestic contract. Husband took contract to lawyer for legal advice. Husband claimed he signed contract without witness. After parties separated, husband brought application alleging that wife had been unjustly enriched as result of contributions he made to her home. Motion judge concluded that husband’s claims were prohibited by domestic contract and claims were dismissed. Husband appealed motion judge’s decision. Appeal dismissed. Section 55(1) of Family Law Act (Ont.), provided that domestic contract was unenforceable unless it was made in writing, signed by parties and witnessed. Strict requirements of s. 55(1) may be relaxed where court was satisfied that contract was executed by parties, terms were reasonable and there was no oppression or unfairness in circumstances that surrounded negotiation and execution of agreement. Both parties signed contract and wife’s signature was witnessed. Both parties certified that they received independent legal advice before they signed contract. There was full financial disclosure before contract was executed. Both parties were educated and sophisticated and there was no duress, lack of capacity, vulnerability or other circumstance that would vitiate contract. Absence of witness to husband’s signature did not preclude wife from relying on domestic contract as defence to husband’s claims. Domestic contract was clear and unambiguous when it was read as whole and parties contracted for separate property regime. Wife was entitled to do what she wanted with husband’s rent payments and her acceptance and use of them did not repudiate contract.
Gallacher v. Friesen (May. 15, 2014, Ont. C.A., S.T. Goudge J.A., E.A. Cronk J.A., and G.R. Strathy J.A., File No. CA C57663) 239 A.C.W.S. (3d) 967.

Arbitration

AWARD

Nothing about award was contrary to principles of contract law

Applicant ordered seeds from respondent and made partial payment of $62,460.80. Respondent delivered seeds, but applicant complained about quality and respondent took them back and re-cleaned them and sought $51,330.25 balance owing. When payment was not made, respondent marketed and sold seeds to company in China without applicant’s knowledge. Applicant applied for arbitration as provided for by contract and parties agreed to be bound by decision. Arbitrator found application for arbitration was made within 30 days of breaking of negotiations, so was on time under the Normaseed Rules, which parties agreed applied to their contract. Arbitrator found both parties breached contract as applicant only paid for part of crop and respondent sold seeds without authorization. Arbitrator ordered respondent to refund money paid by applicant with interest and parties to share costs of arbitration. Application for order recognizing arbitration award, which respondent had refused to comply with on the basis arbitrator exceeded his jurisdiction in ordering return of partial payment after finding both parties breached contract. Application granted. Contract provided any breach would be settled by arbitration in accordance with Rules, so it was clearly not the case that the arbitrator exceeded his jurisdiction by arriving at decision upon finding breaches occurred. Contract did not impose limits on arbitrator beyond Rules, and Rule VIII(2)(b) stipulated equitable solution would be determined where there was dispute over quality, which was exactly what had occurred. Parties did not waive contract and nothing about award was contrary to principles of contract law. Award recognized pursuant to Article 36(a)(iii) of International Commercial Arbitration Act (Ont.).
Proseeds Marketing Inc. v. Power Seed Inc. (Apr. 11, 2014, Ont. S.C.J., Andre J., File No. Guelph 918/13) 239 A.C.W.S. (3d) 844.

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.
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