Law Times

Law Times • November 7, 2016 Page 15 www.lawtimesnews.com CASELAW Ontario Civil Cases Bankruptcy and Insolvency ARRANGEMENTS Debtors obtained protection under Companies' Creditors Arrangement Act (Can.) Creditor was telecommunica- tions company from whom debtors purchased telecom- munication services for resale. While experiencing financial difficulty, debtors entered into asset purchase agreement (APA), conditional on court approval, with purchaser that was success- ful bidder under privately struc- tured and supervised sales and investor solicitation process. APA contemplated purchaser might have to pay arrears owing under contracts to be assigned, and any arrears ultimately paid were al- located between purchasers and debtors. Debtors obtained protec- tion under Companies' Creditors Arrangement Act (Can.). Creditor consented to assignment without understanding that it would not be paid arrears or that it should have demanded payment of ar- rears. Creditor brought motion for order that court-appointed monitor pay creditor arrears ow- ing from proceeds of sale of debt- ors' assets. Motion dismissed. Discretion afforded court under s. 11 of Act did not encompass order for payment of creditor's ar- rears. Consent request letters were neither unfair nor lacking trans- parency, and no advantage was taken of creditor's mistaken un- derstanding. Creditor had been made aware that APA would be posted on monitor's website, and it was subsequently posted there. Because creditor had consented to assignment of its contracts and had not asked to be placed on e- service list, creditor had not been entitled to service of assignment motion. With respect to prejudice arising from creditor's requested relief, this was situation where proverbial egg could not be un- scrambled. Primus Telecommunica- tions Canada Inc., Re (Aug. 18, 2016, Ont. S.C.J. [Commercial List], Penny J., CV-16-11257- 00CL) 270 A.C.W.S. (3d) 244. Contempt of Court GROUNDS Contempt motion with respect to access orders was dismissed Parties married in 2000, had two children, and separated in August 2012. Final consent order issued in 2013 provided for joint cus- tody of children and that access would be shared in accordance with schedule. Parties returned to court requesting variation of joint custody order. Father alleged that mother was in contempt of court because she knowingly pre- vented his access with daughter. Contempt motion was dismissed, however, mother was to carefully consider Court of Appeal deci- sion regarding contempt with respect to access orders. Mother clearly knew about consent order and that order was clear and un- ambiguous in terms of weekend access that it provided to father. It was not shown beyond reason- able doubt that mother intention- ally did or failed to do something provided by that order. Mother believed that daughter could chart her own access terms once she reached certain age. Although this belief was not reasonable, it was not shown beyond reasonable doubt that mother's belief was not reasonable. Father contributed in substantial way to problems in his relationship with daughter. There were complexities in custody and access issues relating to daughter and this was not clear cut case of parental alienation. Father con- tributed to problems by unilater- ally changing access. Mother did not intend to completely remove access, and some attempts were made to try and restore access. De Matos v. De Matos (Aug. 15, 2016, Ont. S.C.J., Lemay J., FS-12-76328-99) 270 A.C.W.S. (3d) 352. Contracts PERFORMANCE AND BREACH Agreement of purchase and sale should be rectified to correct closing date Parties operated restaurants in same building, and respondent agreed to take over applicant's premises by way of assignment of lease and to buy assets of ap- plicant's restaurant business for $125,000. Parties did not even sign agreement of purchase and sale until after closing date, and sale was conditional on landlord's consent to assignment. Applicant alleged that respondent agreed to pay rent for premises pending landlord's consent to assignment. Landlord provided consent but respondent did not proceed with purchase of applicant's assets or assignment of lease. Applicant applied to enforce agreement be- tween parties. Application grant- ed. Agreement of purchase and sale should be rectified to cor- rect closing date given common intention of parties. Respondent could not argue that agreement of purchase and sale was invalid on basis that landlord's consent was not provided by closing date, because respondent waived strict compliance with deadline as demonstrated by his commu- nication with landlord and with applicant. Waiver could also be inferred by respondent's con- duct. Respondent agreed to pay interim rent for premises. Ap- plicant delivered assignment of lease as required by agreement of purchase and sale. Respondent could not rely on fact that assign- ment was conditional on rent being paid because respondent was responsible for paying rent. Agreement of purchase and sale between parties was binding, and respondent repudiated agree- ment by deciding not to complete it. Applicant was awarded dam- ages in amount of $129,338.17 plus interest and costs. 2316796 Ontario Inc. v. Chetti (Aug. 17, 2016, Ont. S.C.J., M.D. Faieta J., CV-14- 518681) 270 A.C.W.S. (3d) 297. UNJUST ENRICHMENT Application amended to include constructive trust claim Parties cohabited two years and were married for at least addi- tional eight years. Wife was sta- tus Indian but husband was not. Husband was aware at all times that property had to be placed in wife's name because it was on re- serve. Wife received $45,000 gift, partly loan from Band Council. Husband's claim for equalization of net family property was dis- missed as being statute-barred. Husband obtained permission to amend application to include constructive trust claim. Hus- band asserted all of money to keep household operating came from his employment. Husband brought action claiming con- structive trust in wife's property. Action dismissed. Wife was not enriched by any corresponding deprivation suffered by husband. Husband did some work on con- struction of home but there was no evidence to quantify value of work he did. No financial records such as bank records, cancelled checks or receipts were produced to show money f lowing from husband to either Band or wife in monthly amount due under fi- nancing. Although husband may have played part in initial financ- ing for construction of home by showing his earnings, he did not produce any evidence other than his own verbal testimony that he purchased construction mate- rial for home or made signifi- cant payments on financing for home. Wife maintained home and children with minimal as- sistance from husband. Webb v. Laforme (Sep. 9, 2016, Ont. S.C.J., J.W. Sloan J., 2010-94) 270 A.C.W.S. (3d) 369. Police LIABILITY IN TORT Claim could not succeed without egregious police conduct being proven Plaintiff M owned auto parts recycling business. Investiga- tion into business led to charges against M of possession of stolen property. Charges were eventu- ally withdrawn or resulted in ac- quittals. M and business brought action against defendant police board and officer, for negligent investigation. Both M and busi- ness were successful at trial, and were awarded $200,000 in non-pecuniary damages and $1,042,179 in economic dam- ages. Police board claimed that standard of care was improp- erly determined. Police board claimed that improper findings resulted from standard of care that was imposed. Police board claimed that evidence was mis- apprehended, and that damages were improperly awarded. Police board and officer appealed from judgment. Appeal allowed. Trial judgment set aside, except for agreed-upon amount of $70,000 awarded to business. Expert evi- dence was needed to determine standard of care, which was not presented in this case. Officer's apologies were not indication of liability or egregious police conduct. Without egregious po- lice conduct being proven, claim could not succeed. Appeal was allowed on this basis. 495793 Ontario Ltd. v. Bar- clay (Sep. 2, 2016, Ont. C.A., Juriansz J.A., Epstein J.A., and Pepall J.A., CA C59053) Deci- sion at 242 A.C.W.S. (3d) 995 was reversed. 270 A.C.W.S. (3d) 415. Professions BARRISTERS AND SOLICITORS Action against lawyer and paralegal ordered to proceed to trial Client settled tort action for per- sonal injuries arising out of mo- tor vehicle accident, and paral- lel action for statutory accident benefits. Client brought action against lawyer and paralegal al- leging they settled actions for amounts greater than they dis- closed and pocketed difference. Client's motion for summary judgment was dismissed and leave to appeal order was re- fused. Client brought motion to set aside or vary order, and mo- tion for order that lawyer attend for examination for discovery in Mississauga. Motions granted in part. Client discovered evidence after order was made which dis- closed payment of over $9,000 from lawyer to paralegal. While circumstances of non-disclosure and ultimate disclosure were sus- picious, there was not enough in new evidence to tip balance in favour of canvassing anew entire motion for summary judgment and granting judgment to client. Matter should proceed to trial so that trial judge could make neces- sary credibility findings on basis of oral evidence that was subject to cross-examination. Lawyer was sole practitioner in Winni- peg. It would be more efficient for lawyer to attend for examina- tion in Mississauga than for three lawyers to travel to Winnipeg for lawyer's examination. Lawyer was ordered to attend for exami- nation in Mississauga. Sawah v. Warren (Aug. 25, 2016, Ont. S.C.J., Gray J., 309/13) 270 A.C.W.S. (3d) 285. Ontario Criminal Cases Charter of Rights TRIAL WITHIN REASONABLE TIME Crown did not rebut presumption that delay was unreasonable In 2016, Supreme Court of Can- ada issued decision creating new regime for unreasonable pre-trial delay under s. 11(b) of Canadian Charter of Rights and Freedoms ("new s. 11(b) regime"). New s. 11(b) regime established rebut- table presumption that delay over 30 months in Superior Court was unreasonable. For transitional cases involving charges brought prior to new 11(b) regime, Su- preme Court of Canada made allowance for account to be taken of previous 11(b) regime. Accused was charged prior to new s. 11(b) regime, and total delay until trial date in Superior Court was ap- proximately 36 months. Accused brought application seeking stay of proceedings based on pre-trial delay. Application granted. Sub- ject delay remained at 36 months, well above 30-month ceiling un- der new s. 11(b) regime, and was therefore presumptively unrea- sonable. Twelve-month delay dur- ing preliminary hearing was not deducted from subject delay as it could not be attributed to defence. Fact that it was defence witnesses that were being examined dur- ing this 12-month delay did not mean delay was attributable to defence. Examinations of defence witnesses covered legitimate top- ics and were not frivolous, exces- sive or irrelevant. Crown did not rebut presumption that subject delay was unreasonable by show- ing exceptional circumstances under new s. 11(b) regime. Crown did not prove that subject delay was justified based on previous s. 11(b) regime. Case at bar was simple and straightforward, with preliminary hearing that took only two days and trial that was expected to take no more than five days. R. v. Zammit (Aug. 10, 2016, Ont. S.C.J., K.P. Wright J., CR- 16-9227) 132 W.C.B. (2d) 331. Drug Offences GENERAL Food and Drugs Act (Can.) supported inclusive interpretation of definition of " drug" Between March 2008 and January 2010, accused marketed and sold products that contained 1-Ben- zyl-Piperazine ("BZP"), substance similar to amphetamine. Dur- ing that time, BZP was not listed under any schedule in Food and Drugs Act (Can.) ("FDA") or Con- trolled Drugs and Substances Act (Can.). Health Canada warned accused that it considered BZP to be drug, and requested that he apply for necessary approvals and licences. Accused was eventually charged with regulatory offences under FDA and regulations. Ac- cused's application for directed verdict was dismissed. Accused was convicted. Accused appealed. Appeal dismissed. Definition of "drug" in FDA applies to all sub- stances manufactured, sold, or represented for use in modifying organic functions, regardless of whether substance is intended for medicinal, therapeutic or rec- reational use. Legislative history and relevant Hansard evidence suggested that intention of legisla- ture was that definition of "drug" would extend beyond merely therapeutic or medicinal uses. Greater statutory context and its legislative history did not support accused's restrictive interpreta- tion. FDA supported inclusive, rather than restrictive interpreta- tion of definition of "drug". BZP was advertised as preventing ad- diction to other more harmful substances, and statement fell squarely within offence set out in s. 3 of FDA. R. v. Wookey (Aug. 5, 2016, Ont. C.A., E.E. Gillese J.A., David Watt J.A., and M. Tulloch J.A., CA C58019) Decision at 105 W.C.B. (2d) 94 was affirmed. 132 W.C.B. (2d) 336.

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