Law Times

Page 14 January 7, 2013 Law Times • caselaw CaseLaw is a weekly summary of notable civil and criminal court decisions by the Supreme Court of Canada, the Federal Court of Canada, and all Ontario courts. SUPREME COURT OF CANADA Agency INSURANCE AGENTS Agent breach obligation by not informing plaintiff of vacancy clause Plaintiffs arranged insurance coverage through defendant for building. Building was damaged by vandalism while building was vacant. Defendant denied coverage on basis of vacancy clause in policy. Trial judge found plaintiff was not aware of vacancy provision. Trial judge found plaintiff relied on defendant to ensure coverage and appellant failed to advise about vacant exclusion. Plaintiffs were awarded damages of $16,737 for failure of defendant to provide insurance coverage for loss to dwelling that sustained damages while building was unoccupied. Defendant's appeal was dismissed. Trial judge did not make palpable and overriding error in coming to factual conclusions. Trial judge correctly held that agent breached obligation by not telling plaintiff there would be no coverage when building was vacant. Newbigging v. M. Butler Insurance Brokers Ltd. (Sep. 13, 2012, Ont. S.C.J., Maddalena J., File No. 53369/11) 220 A.C.W.S. (3d) 248. Charter of Rights ENFORCEMENT OF RIGHTS Other means by which issues could be brought before court not absolute bar to public interest standing Organization advocating for female sex workers and individual former sex worker sought to bring constitutional challenge to prostitution provisions of Criminal Code. Application Heydary_LT_Jan7_13.indd 1 judge found that applicants had no standing and rejected their request for public interest standing on basis that other reasonable means existed to bring issues raised before court. Court of Appeal ruled that applicants should be granted public interest standing. Crown appeal dismissed. Courts should consider three factors in determining whether to grant public interest standing: whether case raises serious issue; whether party has real stake in proceedings; and whether proposed suit is reasonable and effective means to bring issues to court. Test should be applied generously and flexibly. Test for standing was satisfied in this case. Applicants were well-organized and engaged with relevant issues and could effectively present their case. Existence of other means by which issues could be brought before court was not absolute bar to public interest standing. Downtown Eastside Sex Workers United Against Violence Society v. Canada (Attorney General) (Sep. 21, 2012, S.C.C., McLachlin C.J.C., LeBel, Deschamps, Fish, Abella, Rothstein, Cromwell, Moldaver and Karakatsanis JJ., File No. 33981) Decision at 90 W.C.B. (2d) 617; 193 A.C.W.S. (3d) 1148 was affirmed. 103 W.C.B. (2d) 625. Contracts DAMAGES Fact that plaintiff single-purpose corporation did not relieve it of duty to mitigate Defendant school board entered into agreement of purchase and sale with plaintiff, singlepurpose company incorporated solely for purpose of land purchase, pursuant to which board agreed to sell and plaintiff agreed to purchase land for proposed residential development. Agreement conditional upon board obtaining severance from committee of adjustment on or These cases may be found online in BestCase and other electronic resources from Canada Law Book. To subscribe, please call 1-800-565-6967. before closing date. Closing date extended to permit board to obtain severance but board's severance application deferred. Plaintiff refused to further extend closing date. Plaintiff, arguing board breached obligation to use best efforts to obtain severance and not entitled to rely on time of essence clause, brought action for specific performance and, alternatively, damages. Trial judge found board breached obligation to use best efforts to obtain severance by failing to advise plaintiff in timely fashion that necessary to file development plan. He found that specific performance not available because land purchased for investment purposes but awarded damages. Court of Appeal reduced damage award to nominal sum. Plaintiff 's appeal and school board's cross-appeal dismissed. Plaintiff not generally able to recover losses he could have avoided by taking reasonable steps. Plaintiff required to make diligent efforts to find substitute property. Fact that plaintiff single-purpose corporation did not relieve it of duty to mitigate. Plaintiff deprived of investment property does not have "fair, real and substantial justification" or "substantial and legitimate interest" in specific performance absent evidence that land has "peculiar and special value". Plaintiff did not demonstrate such claim; it was engaged in commercial transaction for profit. Damages adequate remedy. Trial judge made palpable and overriding error in finding no comparable mitigation opportunities. School board provided expert evidence regarding other suitable development land and absence of evidence to contrary. Southcott Estates Inc. v. Toronto Catholic District School Board (Oct. 17, 2012, S.C.C., McLachlin C.J.C., LeBel, Deschamps, Abella, Rothstein, Cromwell and Karakatsanis JJ., File No. www.lawtimesnews.com 33778) Decision at 319 D.L.R. (4th) 349, 188 A.C.W.S. (3d) 582 was affirmed. 220 A.C.W.S. (3d) 348. ONTARIO CIVIL CASES Civil Procedure COMMENCEMENT OF PROCEEDINGS Claim based on waiver of tort was novel Plaintiff employed defendant. Employment agreement included covenant not to solicit employees when defendant left plaintiff 's employ. Defendant left employment with plaintiff to work with corporate defendant. Each member of personal lines team resigned employment with plaintiff and accepted employment with corporate defendant. Plaintiff claimed defendant breached non-solicitation clause. Defendants brought motion to strike out plaintiff 's statement of claim without leave to amend. In context of factual situation alleged statement of claim was adequate. Material facts with respect to damages should have been pleaded and leave to amend was granted. Allegation that corporate defendant was vicariously responsible was not struck out because it could not be said it had no hope of success. Allegations regarding damages for inducement of defendant by corporate defendant to breach non-solicitation clause and damages for inducement by defendant and corporate defendant on personal lines team were inadequate and was struck out with leave to amend. Claim for misrepresentation was not struck out. Claim based on waiver of tort was novel and it was premature to strike out pleadings. There was no basis to strike out claim for punitive damages. Benson Kearley IFG Insurance Brokers v. Logan (Sep. 7, 2012, Ont. S.C.J., McKelvey J., File No. CV-11-106780-00) 220 A.C.W.S. (3d) 276. SUMMARY JUDGMENT Total liability arose out of fraud while acting in fiduciary capacity Plaintiff hired defendant as its bookkeeper. Bookkeeper forged signature of signing officer on cheques that bookkeeper deposited into individual defendant's bank account. Bookkeeper withdrew most of funds from account and used funds for own purpose. Bookkeeper pled guilty to one count of fraud over $5,000. Plaintiff brought claim for conversion. Bookkeeper was noted in default. Plaintiff 's motion for summary judgment was allowed as against bookkeeper in amount of $27,023 and plaintiff was entitled to declaration that total liability attributable to bookkeeper arose out of fraud while acting in fiduciary capacity. Motion for summary judgment as against individual defendant was allowed. No material facts were in dispute and trial was not necessary. Individual defendant acknowledged innocence and minimal benefit received from funds would not operate as defence to action for conversion. Bookkeeper was to indemnify and save harmless individual defendant in regard to all sums under judgment. Wymor Construction Inc. v. Gray (Sep. 7, 2012, Ont. S.C.J., Aitken J., File No. 12-53360) 220 A.C.W.S. (3d) 305. Contempt Of Court PUNISHMENT No jurisdiction to order spouse to reinstate life insurance Appeal by husband from judgment ordering him to reinstate policy of life insurance and designate his wife as beneficiary. Parties married in 1982, had five 13-01-02 10:58 AM

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