Law Times

Page 14 September 28, 2015 • Law timeS www.lawtimesnews.com be demonstrably justified. To be justified, objective of legisla- tion must be pressing and sub- stantial, means used to further objective must be proportion- ate i.e. rationally connected to objective and minimally im- pairing and proportionate in effect. Preserving connection between citizens' obligations to obey law and right to elect law- makers, strengthening social contract, is pressing and sub- stantial, promoting faith in po- litical institutions that enhance participation. By strengthening public confidence in laws, the legislation is consistent with principles and values of free and democratic society. Canadian citizens non-resident for five years largely not governed by Canadian legal system. Exclud- ing them from franchise helps to strengthen social contract and enhance legitimacy of laws. Res- idence of elector provides sub- jective and objective connection between electorate and lawmak- ers, providing rational connec- tion between maintenance of social contract in constituency- based system of representation and limit on rights of long-term non-resident Canadians to vote. Duration of absence is reason- able means by which to dif- ferentiate between temporary non-residents and longer-term non-residents who voluntarily removed themselves from social contract. Five years falls within reasonable range. Means cho- sen were minimally impairing. Salutary effects of legislation, solidification of bond between electorate and elected, are out- weighed by deleterious effects. Impugned provisions violate s. 3 of charter but are saved by s. 1. Frank v. Canada (Attorney Gen- eral) (Jul. 20, 2015, Ont. C.A., G.R. Strathy C.J.O., John Laskin J.A., and D.M. Brown J.A., File No. CA C58876) Decision at 239 A.C.W.S. (3d) 909 was reversed. 255 A.C.W.S. (3d) 109. Contracts INTERPRETATION Motion judge's finding that sec- tion in agreement was valid and enforceable guarantee was upheld on appeal GFT sold its trademarks and customer base to LAFI pursu- ant to purchase agreement. FM was sole officer, director and controlling mind of LAFI and executed agreement on behalf of LAFI. FM personally signed below statement that agreement was executed solely in connec- tion with his obligations as set out in section of agreement. LAFI post dated cheques were not honoured and GFT sued. LAFI was in receivership. GFT was granted partial summary judgment against FM. Motion judge found that section in agreement was personal guaran- tee from FM that was valid and enforceable. FM appealed. Ap- peal dismissed. Motion judge's reasons were not inadequate. Reasons conveyed reasoning as to meaning of section in agree- ment. Argument that without finding of liability against LAFI, there could be no finding of lia- bility on personal guarantee was rejected. LAFI was in receiver- ship, and there could be no find- ing of its liability absent leave of court or consent of receiver. Personal guarantee provided contracting party with recourse if principal debtor was unable to pay, even where principal debtor went bankrupt. While word "guarantee" was not used in of agreement, it was clear that section contained FM's personal guarantee of LAFI's payment obligations under agreement. Global Food Traders Inc. v. Mas- salin (May. 21, 2015, Ont. C.A., J.C. MacPherson J.A., E.E. Gil- lese J.A., and K. van Rensburg J.A., File No. CA C59862) 255 A.C.W.S. (3d) 81. Courts ABUSE OF PROCESS Application for declara- tions of breaches of statutes was abuse of process Applicant was insured under her mother's contract of insur- ance with respondent insurer. Applicant was in car accident. Respondent paid for damages to applicant's car and some medi- cal expenses. Respondent told applicant it would stop paying for some treatments and asked her for some medical assess- ments. Applicant objected to demand and applied for decla- rations that respondent was in breach of Personal Information Protection and Electronic Doc- uments Act and Insurance Act. She had brought separate action against respondent for payment of accident benefits. Respondent brought motion to strike out application. Motion granted. Declaratory relief would not re- solve dispute between parties. Acts provided their own man- datory procedures for dealing with alleged breaches of person- al information act, entitlement to statutory accident benefits, and unfair practices by insur- ers. Application was abuse of process. Hordo v. State Farm Mutual Automobile Insurance Co. (Jun. 15, 2015, Ont. S.C.J., Pollak J., File No. CV-13-485342) 255 A.C.W.S. (3d) 94. Insurance LIABILITY INSURANCE Insurer had no duty to defend insureds' minor daughter Action was brought against parents relating to alleged bul- lying and harassment by minor daughter. Claim against minor daughter was that she verbally threatened and physically as- saulted plaintiff. Application judge declared that insurer had duty to defend and indemnify parents in underlying action. In- surer appealed. Appeal allowed. Application judge erred in in- terpretation of exclusion clause of insurance policy. Insurer did not have duty to defend and indemnify parents in under- lying action. Minor daughter was party to proceeding and application judge gave no sepa- rate consideration to daughter's position. Claim against minor daughter was strictly one for intentional torts of assault and battery. Based on exclusion clause in policy, it was clear that there was no possibility that ob- ligation to indemnify would be triggered and there was no duty to defend minor daughter. S. (C.) v. TD Home and Auto In- surance Co. (Jun. 11, 2015, Ont. C.A., J.C. MacPherson J.A., E.A. Cronk J.A., and E.E. Gillese J.A., File No. CA C59887) 255 A.C.W.S. (3d) 194. International Law SOVEREIGN IMMUNITY Ambassador under no obliga- tion to give evidence but required to submit to cross-examination In hospital management agree- ment parties agreed that dis- putes would be settled at In- ternational Chamber of Com- merce International Court of Arbitration. Dispute arose and parties submitted to jurisdic- tion of court of arbitration. Court ordered respondent to pay damages to applicant for lost profits. Respondent failed to pay judgment. Applicant made monetary claim against respon- dent for breach of contract. Ap- plicant issued notice of applica- tion seeking order to permit it to enforce court of arbitration judgment in Canada. Respon- dent objected to application on grounds of state immunity and sought to dismiss action. Respondent's motion was not heard by time of application hearing. No one appeared on application for respondent. Re- spondent's solicitor of records was removed. Recognition and enforcement order was issued. Respondent's appeal was dis- missed. Respondent brought motion to set aside order. Re- spondent's ambassador swore affidavit in support of motion. Issue was raised whether am- bassador should be produced for cross-examination. Unless ambassador withdrew his af- fidavit, he has waived his state immunity by filing affidavit and was to make himself available for cross-examination. Ambas- sador was under no obligation to give evidence, but analysis changed once he voluntarily submitted evidence by affidavit or otherwise. It was basic rule of evidence that voluntary wit- ness who provided affidavit was required to submit to cross- examination because right to cross-examine was essential to give any weight to affidavit. Canadian Planning and Design Consultants Inc. v. Libya (State) (Mar. 13, 2015, Ont. S.C.J., C. Braid J., File No. Hamilton CV- 13-44192-00) 255 A.C.W.S. (3d) 195. Judgments and Orders REASONS FOR JUDGMENT Appellate consideration must recognize informal nature of Small Claims Court Peel Condominium Corpora- tion and Maple Ridge Commu- nity Management entered into condominium management agreement which provided that either party could terminate on 60-days' notice or immediately for cause. Peel terminated agree- ment pursuant to provision which permits immediate ter- mination where manager "in- subordinate, reckless or grossly negligent". Peel complained that Maple Ridge engaged in roof replacement project with- out contracting engineering professional, accepted contrac- tor's contract without submit- ting it for legal review, provided "inconclusive" information to roofing contractor, resulting in incorrect replacement, pro- vided erroneous information to Peel regarding potential impact of deferring roof replacement, issued incorrect status cer- tificates, delayed in providing banking documents and failed to provide requested reports re- lated to roofing contract. Maple Ridge commenced action in Small Claims Court. Trial judge dismissed action, finding that grounds, while not sufficient individually to constitute in- subordination, recklessness or gross negligence, did so when taken together. On appeal to single judge of Divisional Court, court held that trial judge's rea- sons were insufficient to allow for meaningful appellate re- view. Judge set aside trial judge's judgment and returned matter to Small Claims Court. Peel's appeal allowed. Trial judge re- viewed each ground and stated whether it could individually meet tests for insubordination, recklessness or gross negligence. He found that "in some cases" grounds were, as matter of fact, sufficient to meet those tests on individual basis. He also explic- itly recognized that in assessing whether Maple Ridge's conduct constituted gross negligence, he was required to determine cu- mulative effect of acts and omis- sions. "What" and "why" were clear in trial judge's reasons. In terms of "what", trial judge found that grounds relied on by Peel cumulatively constituted insubordination, recklessness or gross negligence. In terms of "why", he cited supportive legal commentary requiring him to consider aggregate effect of all factors or conduct. There was ample evidence in trial record to establish that Maple Ridge was insubordinate, grossly negligent and/or reckless. Appeal judge should have considered that evi- dence before concluding reasons of trial judge were inadequate. Reasons from Small Claims Court must be sufficiently clear to permit judicial review on ap- peal but appellate consideration must recognize informal nature of Small Claims Court. Judg- ment of Small Claims Court re- instated. Maple Ridge Community Man- agement Ltd. v. Peel Condomin- ium Corp. No. 231 (Jul. 9, 2015, Ont. C.A., John Laskin J.A., P. Lauwers J.A., and C.W. Hou- rigan J.A., File No. CA C59661) Decision at 241 A.C.W.S. (3d) 262 and 246 A.C.W.S. (3d) 52 were reversed. 255 A.C.W.S. (3d) 196. Professions BARRISTERS AND SOLICITORS Order regarding client materials from deceased lawyer's practice was authorized by Law Society Act Order appointed respondent as trustee of 35 boxes of client ma- terial and six computers from professional legal practice of de- ceased lawyer. Order permitted respondent to examine contents of boxes and computers, provide information to clients where ap- propriate, and destroy material to protect confidential client in- formation. Husband of deceased appealed. Appeal dismissed. Order was authorized by Law Society Act. There was nothing in record to suggest that respon- dent would not return personal information in boxes and com- puters to appellant or other ap- propriate relatives. There was no need to appoint neutral third party to perform role. Law Society of Upper Canada v. Fuerst Estate (Jun. 10, 2015, Ont. C.A., J.C. MacPherson J.A., Grant Huscroft J.A., and L.B. Roberts J.A., File No. CA C59611) 255 A.C.W.S. (3d) 222. Lawyer took reasonable steps to verify identity of plaintiffs Plaintiffs held mortgages on property owned by their friend's wife in Toronto. Plain- tiffs' mortgages were dis- charged so that friend could obtain new mortgage from defendant company. Plaintiffs said that they did not learn that their mortgages had been discharged until after prop- erty was sold under power of sale proceedings. They asserted that they had never instructed defendant lawyer to discharge their mortgages. Lawyer said he met with plaintiffs in his office, advised them of ramifications of discharging their mortgages, and provided authorizations to discharge mortgages. Lawyer did not have specific recollec- tion of meeting with plaintiffs but testified to his usual prac- tice regarding identification of new clients. He had photocop- ies of plaintiffs' actual citizen- ship cards and their driver's licences as well as signed and witnessed authorizations. Plain- tiffs brought action in negli- gence against lawyer. Action dismissed. Plaintiffs had failed to provide credible account of what transpired. Lawyer's evi- dence was consistent with his practice and contemporaneous documentation in his file. He took reasonable steps to verify identity of plaintiffs using their original identification. Lawyer met standard of practice. Negli- gence was not established. Baskaran v. Doshi (Jun. 9, 2015, Ont. S.C.J., W. Matheson J., File No. CV-10-406104) 255 A.C.W.S. (3d) 223. CASELAW

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