Law Times

Law Times • august 10, 2015 Page 15 www.lawtimesnews.com of home was gift mortis causa. Application dismissed. Family home was not transferred by M as gift mortis causa as that term was used in s. 72(1)(a) of Act. Transfer of home was complete and absolute. No form of trust in favour of donor in event of recovery was expressed when gift was made and mortgage was assumed. Application judge could not simply create one out of whole cloth at instance of W who wished to have larger target for his support application than was otherwise available to him. Proceeds of its sale of home were not accordingly to be deemed part of estate of M for purposes of application for support under Act by W. Snitzler v. Snitzler (Apr. 21, 2015, Ont. S.C.J., Sean F. Dunphy J., File No. 05-131/14) 254 A.C.W.S. (3d) 226. Restitution UNJUST ENRICHMENT Financial advisors unjustly enriched by conversion of book of business C started financial services busi- ness with J. C funded business, incorporated numbered com- pany 135 and acquired franchise to sell financial products. J, and eventually O and Q, worked for business as financial advisors. Business grew as advisors de- veloped clientele. Revenues were split 80/20, respectively, between advisors and 135. Advisors be- came dissatisfied, left premises with client files and office staff and carried on business under new name in different location. J tried to buy business from C but negotiations failed. C received no compensation and lost stock options in franchisee. C and 135 brought action against advisors and their companies and of- fice staff, for damages on sev- eral grounds. Action allowed in part. J and O were employees of 135, not independent contrac- tors. J and O were fiduciaries, having total management of day to day business and do- ing all client development. Full trust was placed in J and O by C, who was entirely vulnerable to conduct by managers that would divert clients away from business. C had no means to service clients without advisors. J and O breached employment contract, fiduciary duty and duty to give notice. Excuses for departure from business unper- suasive. Not established that Q was employee but Q liable for difference in value of business caused by revenue stream from his book. Advisors unjustly en- riched by conversion of book of business owned by 135 and used thereafter as basis for their own profit. C and 135 were deprived of book of business and 20 per cent of revenues generated by advisors. No juristic reason for enrichment. No basis to impose liability on office assistants who acted under direction of J and O and had no autonomy or con- trol. 1350369 Ontario Inc. v. O'Halloran (Apr. 29, 2015, Ont. S.C.J., Eberhard J., File No. Bar- rie CV-05-0880) 254 A.C.W.S. (3d) 107. Torts NEGLIGENCE No genuine issue requiring trial in respect of claims against security companies arising from flood Several f loors of high-rise office tower damaged by f looding in early morning hours. Plaintiffs commenced three actions alleg- ing f lood caused by defendant plumbing company's failure to properly solder water line of heating system while conduct- ing repair on previous evening. Certain parties, including plumbing company, also alleged building automation system ("BAS"), computer system that controlled and monitored vari- ous building systems, including heating and ventilations system, had either failed to function as intended or not been properly monitored, and named defen- dant security companies as either defendants, third par- ties or fourth parties. Security companies moved for summary judgment dismissing actions as against them. All parties except plumbing company agreed. On evidence, if loss of pressure in water pipes feeding heating sys- tem occurred, BAS supposed to trigger low pressure alarm audi- ble in operations office, staffed by defendant building manager employees, located in parking garage. Since operations office not staffed at all times, BAS also supposed to send audible alarm to security office, staffed by security company employ- ees, located on concourse level. Plumbing company claimed that on morning of f lood, BAS alarm received in security office at 1:06 am but security com- pany employees failed to record it or to notify building man- ager employees. Security com- pany claimed alarm unrelated to f lood and would have been recorded if of any significance. Second BAS alarm received in operations office at 1:24 am, al- most certainly related to f lood- ing, but no one there to see it. Second alarm not sent to secu- rity office because alarm system had frozen. Flood discovered by security company employees on patrol at 1:55 am. Motions granted. There was no evidence concerning purpose of 1:06 am alarm. It was not enough to say it "must have had" something to do with f lood. Video surveil- lance recording of f lood occur- ring in one of plaintiff tenant's offices, in which time stamp "estimated" to be six hours wrong, could not be relied on. Tenant's alleged expert had not taken opportunity to examine BAS computer system for any logs that might explain 1:06 am alarm despite having been retained since August 2010 and examining system on two previous occasions. According to answer to undertaking pro- vided by building manager, 1:06 am and 1:24 am alarms likely unrelated. Assuming plumb- ing company had tendered all available evidence, as obligated, there was no genuine issue re- quiring trial. Conundrum Capital Corp. v. Century Plumbing and Heating (May. 11, 2015, Ont. S.C.J., Dia- mond J., File No. CV-11-419548, CV-11-419637-00A1, CV-11- 419637 B1, CV-14-419636- 00A1, CV-14-419636 B1) 254 A.C.W.S. (3d) 238. ONTARIO CRIMINAL CASES Charter of Rights CRUEL AND UNUSUAL TREATMENT OR PUNISHMENT Section 745.51 of Criminal Code did not contravene ss. 12 and 7 of Charter Accused was convicted of two counts of second degree murder. Accused applied for constitu- tional declaration that s. 745.51 of Criminal Code was null and void because it contravened ss. 12 and 7 of Charter. Applica- tion dismissed. Judicial power to impose consecutive periods of parole ineligibility for subse- quent murder or murders was discretionary, not mandatory. Judge's order as to parole ineligi- bility for multiple murders had to be guided by fundamental principle that sentence had to be proportionate to gravity of offence and degree of respon- sibility of offender, as well as principle of totality. Assuming that parole ineligibility order was fit and just, by definition, it could not constitute cruel and unusual punishment, which required that order be grossly disproportionate to particular circumstances of offence and offender. It was open to Par- liament to arm judiciary with discretionary power to impose consecutive periods of parole ineligibility for multiple mur- ders beyond period of twenty- five years of imprisonment in cases where circumstances of offences and offender merited enhanced period of parole in- eligibility. Number of murdered victims was most relevant fac- tor in determining what was fit and just length of imprisonment prior to right to have parole hearing. Issue before court was not whether Parliament made wise policy choice in investing discretionary power with ju- diciary, but whether legislative provision passed constitutional muster. If order of parole in- eligibility for multiple murders was unduly long or harsh, it would have constituted error in sentencing principle subject to correction by appellate court. It was undoubted that period of forty years of parole ineligibil- ity sought by Crown would not have constituted cruel and un- usual punishment. Accused had criminal record, was long-time drug dealer, and was facilitator of illegal handguns. Accused ex- ecuted two victims in discharg- ing 14 shots at them in crowded public food court, and wounded four other victims, including young teenager shot in head. Accused failed to establish s. 12 Charter breach. Question fell to be determined under s. 12 of Charter, which dealt specifically with cruel and unusual punish- ment, real constitutional issue at hearing, whereas s. 7 of Charter was general provision. Accused failed to establish s. 7 Charter breach. R. v. Husbands (Apr. 16, 2015, Ont. S.C.J., Ewaschuk J., File No. null) 122 W.C.B. (2d) 21. Mental Illness DEFENCE Accused proved defence of not criminally responsible on balance of probabilities Accused appealed conviction on two counts of second degree murder. Accused stabbed to death two strangers in parking lot of shopping plaza. Accused was 28 years old, lived with his mother, and had been unem- ployed for three years. Accused testified that on day in question, he left his house with two knives with intention of committing suicide. Accused engaged in problematic behaviours at men- tal health institution, including muteness, atrocious personal hygiene, and deliberate collect- ing and spreading of urine and feces, and, although initially found to be unfit to stand trial, he was eventually found to be fit. Accused was assessed sec- ond time just prior to trial to determine whether he qualified for defence of not criminally responsible and, while he dis- played negative symptoms, he did not describe any positive symptoms, such as hallucina- tions. Psychiatrist determined that accused was most likely suffering from schizophrenia, but that there was nothing in his history that would have led to conclusion that accused had s. 16(1) Criminal Code defence available to him. Psychiatrist testified that he could not opine on balance of probabilities that accused's major mental ill- ness had been so severe and his thought processes so disorga- nized as to displace presump- tion of sanity. Defence counsel visited accused at penitentiary to prepare for appeal and formed lay opinion that he was suffer- ing from mental disorder. Fo- rensic psychiatrist subsequently concluded that accused was seriously mentally ill, suffering from schizophrenia, catatonic type. Accused was transferred to mental health centre for 60- day post-conviction assessment. Psychiatrist concluded that ac- cused currently suffered from schizophrenia and that he was severely mentally ill prior to in- dex offences and at time of in- dex offences. Psychiatrists con- cluded that accused did meet test for s. 16 of Code at time of offences, and that presump- tion of criminal responsibility at time of offences could have reasonably been displaced. Ac- cused argued that he was not criminally responsible at time of killings, and sought to intro- duce fresh evidence on appeal. Appeal allowed, convictions set aside, verdict of not criminally responsible substituted. Fresh evidence met Palmer criteria. Evidence was not available prior to trial, bore on accused's not criminally responsible defence, was credible, cogent, and reli- able, and it could reasonably have affected outcome of trial. Although circumstances of of- fence were horrific, evidentiary record was complete. Evidence of all three psychiatrists was strong, uncontradicted, and consistent. Accused had proved defence of not criminally re- sponsible on balance of prob- abilities. R. v. Palmer (May. 12, 2015, Ont. C.A., K. Feldman J.A., Janet Simmons J.A., and S.E. Pepall J.A., File No. CA C53234) 122 W.C.B. (2d) 46. TAX COURT OF CANADA Taxation INCOME TAX Taxpayer had predominant intention to make profit Taxpayer had been sports jour- nalist who had written sports blogs as part of his employ- ment. After taxpayer's employ- ment ended in 2011, he started his own sports blog on profes- sional website with view to ob- taining advertisement revenue from sponsors. Taxpayer con- tinued to travel to sports team's games and deducted travel ex- penses. Taxpayer claimed no gross income and business loss of $26,540 in 2011, and gross income of $7,500 but net busi- ness loss of $33,366 in 2012. Minister of National Revenue denied taxpayer's business losses on ground that taxpayer did not conduct any business activities. Taxpayer appealed. Appeals allowed. While there was commercial aspect of tax- payer's venture, there was also personal element for sports fan to travel to watch sports team play and blog about it. Taxpayer had over 20 years' experience as sportswriter but no experience in selling advertising or run- ning media business. Taxpayer did nothing to solicit sponsors but was able to obtain one spon- sor. While taxpayer's intended course of action was poor busi- ness judgment, it was not so de- void of commercial reasoning to conclude venture was per- sonal. Taxpayer did not provide evidence to assess venture's ca- pability to make profit. Given early stage of venture, it was found to go beyond hobby. Tax- payer had predominant inten- tion to make profit and behaved in reasonable businesslike man- ner to pursue that end, while in start-up phase. Berger v. R. (Jun. 19, 2015, T.C.C. [Informal Procedure], Campbell J. Miller J., File No. 2014-4251(IT)I) 254 A.C.W.S. (3d) 232. LT CASELAW

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