Law Times

Page 14 lower back pain and second accident. Permanence of injury to right shoulder was same permanence found in connection with first accident. Jury verdict made it clear jury did not accept plaintiff 's injuries were of great consequence. Jury accepted there was minor exacerbation of plaintiff 's medical condition as it stood immediately prior to second accident. Shepstone v. Cook (Feb. 20, 2013, Ont. S.C.J., M.L. Edwards J., File No. CV-07-086123-00) 225 A.C.W.S. (3d) 1109. Landlord and Tenant FORFEITURE OF LEASE Landlord failed to take earlier opportunity to terminate lease for late payment Application by tenant pursuant to s. 20 of Commercial Tenancies Act (Ont.), for relief from forfeiture. Tenant and property owner entered into lease for restaurant. Property was subsequently transferred to landlord. Landlord entered into agreement of purchase and sale for property with intervener, which provided for purchaser assuming lease. Landlord agreed to provide vacant possession on date of closing. Bailiff took possession of restaurant. Application granted. Forfeiture was removed and tenant was entitled to immediate possession under lease following payment of rent arrears. There were no grounds for denying application for relief. Landlord failed to take earlier opportunity to terminate lease for late payment of rent, nor did it at any time put tenant upon notice that future late payment of rent would result in forfeiture. McLean v. 1833216 Ontario Ltd. (Feb. 25, 2013, Ont. S.C.J., J. deP. Wright J., File No. Thunder Bay CV-13-0034) 225 A.C.W.S. (3d) 1126. Respondent had legitimate business reason for terminating lease Applicant sought relief from forfeiture of commercial tenancy. Applicant was in pallet recovery business. Parties signed agreement where applicant was permitted to occupy space within Ontario Food Terminal premises. Applicant's business grew rapidly and its space requirements had outgrown its leased space. Respondent notified applicant of decision to terminate applicant's lease on basis that applicant had stored pallets on space it had not rented for extended periods of time. Applicant sought order requiring respondent to permit it to re-occupy premises. Application dismissed. Lease was not forfeited, but was terminated in accordance with its terms. There was no express or implied term that required existence of any condition as justification for termination of lease by either party. Unambiguous language of lease between parties did not require existence of any condition precedent for exercise June 10, 2013 Law Times • caselaw of termination rights of either party. In any event, respondent had legitimate business reason for terminating lease. Downtown Pallets Ltd. v. Ontario Food Terminal Board (Jan. 22, 2013, Ont. S.C.J., Low J., File No. CV-12-458462) 225 A.C.W.S. (3d) 1125. RESIDENTIAL TENANCIES Municipality's right to recover rents more akin to assignment of rents When owner/landlord defaulted on obligation to pay for supply of natural gas to tenants in residential apartment complex, city, pursuant to Vital Services Bylaw, took over payments. City then sought to enforce claim for recovery of payments, pursuant to Residential Tenancies Act, 2006 (Ont.), by registering lien against property and directing tenants to pay rent to city. Property subsequently sold by first mortgagee under power of sale to bona fide purchaser for value. Proceeds of sale insufficient to satisfy city's claim. City brought application for determination of claim to continue to direct tenants to pay rent to it instead of owner/ landlord to recover remaining shortfall. Motion judge ruled in favour of city, but first mortgagee's appeal allowed. City's right to direct tenants to pay rent to it did not survive sale of premises to bona fide purchaser for value. Purpose of Act is generally to protect tenants and shields residential tenants from disruptions of vital services by encouraging municipalities to "bridge the gap" when owner or landlord defaults. Act gives municipality two distinct and independent means of recovering expenses incurred when it intervenes: lien against lands; and right to collect rents from tenants to defray expenses. Act does not grant municipality super-priority claim to interest in land. Section 219(2) and (3) of Act specifically stated that municipality's lien not "special" lien and that provisions of Municipal Act, 2001 (Ont.), and City of Toronto Act, 2006 (Ont.), relating to recovery of municipal taxes, which establish special lien or claim against land which survive transfer, do not apply. When legislature has intended to give municipality super priority that overrides land claim interests and survives transfer of property to bona fide purchaser for value, it has done so expressly; in this case, legislature expressly disavowed such intention. New owner's proprietary right to rents was "real property" right flowing from interest in lands but municipality's right to recover rents more akin to assignment of rents or rights of garnishment, neither of which gave rise to interest in land. Hamilton (City) v. Equitable Trust Co. (Mar. 11, 2013, Ont. C.A., John Laskin J.A., R.A. Blair J.A., and Gloria J. Epstein J.A., File No. CA C54762) Decision at 210 A.C.W.S. (3d) 783 was reversed. 225 A.C.W.S. (3d) 1132. Limitations MUNICIPALITIES Agreement imposed perpetual obligation to maintain drainage system Municipality and farmer entered agreement whereby municipality agreed to perpetually maintain sewer drainage system it constructed on farmer's lands. Municipality ceased all maintenance and repair work on drainage system. After farmer's death, lands sold to third parties who sought to enforce agreement, but municipality unilaterally repudiated agreement. As result of corporate amalgamation, city stepped into shoes of municipality under agreement. Lands sold to plaintiffs and when they requested city to honour agreement, city unilaterally repudiated agreement. Plaintiffs commenced action for specific performance, or alternatively, damages. Parties stated special case seeking court's opinion on number of questions. Motion judge granted various declarations of right in favour of plaintiffs. City appealed, arguing motion judge erred in holding there was no statutory limitation period that barred plaintiffs' action. Appeal dismissed. Motion judge did not err in finding no statutory limitation period. City agreed that agreement imposed perpetual obligation to maintain drainage system and to make good any damage caused to property owner, whoever that may be from time-to-time, and acknowledged it was bound, significantly undermining its limitation period arguments. City argued that repudiation "accepted" by owners' failure to take enforcement steps but their conduct merely silence of "inactivity" which fell far short of satisfying requirement of clear and unequivocal communication for acceptance of repudiation. Nor was there any evidence that owners conducted themselves in manner inconsistent with obligation under agreement to provide municipality with access for purpose of maintaining drainage system. Brown v. Belleville (City) (Mar. 12, 2013, Ont. C.A., E.A. Cronk J.A., Robert P. Armstrong J.A., and Gloria Epstein J.A., File No. CA C55618) Decision at 215 A.C.W.S. (3d) 752 was affirmed. 225 A.C.W.S. (3d) 1140. Trusts and Trustees CONSTRUCITON OF TRUST INSTRUMENT Omission of evidence from lawyers was significant Application by settlor and children for order rectifying trust indenture. Applicant set up Family Trust in 1992 and deposed it was intended to allow wealth to pass to children in tax efficient manner in future. Applicant read trust indenture and discussed terms with lawyers. Trust acquired property in 2004 www.lawtimesnews.com and applicant was aware of 21year rule and discussed it with lawyers. Applicant consulted other lawyers in 2009, and was advised that, because he was settlor, one of the trustees and capital beneficiary, s. 75(2) of Income Tax Act (Can.), would apply to initial $5,000 contribution, and that trust would not be able to distribute property on roll over basis to other beneficiaries during his lifetime without tax consequences. In subsequent memo, lawyer advised s. 104(4) of Act provided property owned by trust was deemed to be disposed of on trust's 21st anniversary. Applicant commenced action against lawyers who established trust and commenced these proceedings. Applicant deposed that if he had to distribute capital assets to himself to avoid capital gains, it would frustrate his intent to transfer assets to his children on tax deferred basis. Application dismissed. Only evidence adduced by applicant was his testimony. Omission of evidence from lawyers who advised him of his file with firm was significant. No expert evidence was filed. Onus was on applicant to establish he intended to structure trust to allow tax-deferred transfer of assets to children and mistake was made resulting in indenture failing to give effect to that intention. Notwithstanding this alleged intention, applicant was designated beneficiary and eligible to receive capital from trust, and neither beneficiary designation or distribution date clauses referred to tax deferral or roll over. On crossexamination, applicant admitted he did not recall specifics of discussions with lawyers. Most taxpayers wanted to minimize tax paid, so court could not rely solely on evidence from taxpayer about intentions 21 years before. There were different reasons to establish trusts and court could not infer what applicant's intention was. Only contemporaneous evidence produced was memo and letter from firm, which did not establish what instructions applicant gave and did not refer to an estate freeze. Kanji v. Canada (Attorney General) (Feb. 5, 2013, Ont. S.C.J. [Commercial List], D.M. Brown J., File No. CV-12-9950-00CL) 225 A.C.W.S. (3d) 992. ONTARIO CRIMINAL CASES Appeal CROWN APPEAL First officer did not give evidence substantially different from second officer Crown application for leave to appeal. Accused convicted on two charges after lengthy trial. Summary Conviction Appeal Court ("SCAC") ordered new trial. Leave to appeal granted, appeal allowed, order directing new trial set aside, and convictions entered at trial restored. SCAC judge erred in law in concluding that miscarriage of justice had occurred by virtue of trial judge's failure to take into account evidence given by police officer on what was referred to as "zipper issue". SCAC judge and not trial judge misapprehended some evidence relating to "zipper issue". Contrary to SCAC judge's review of evidence, first police officer at scene did not give evidence substantially different from evidence given by second officer. "Zipper issue" was far from central to trial judge's analysis of evidence. This was simply an overwhelming circumstantial evidence case against accused and trial judge saw it as such. There were several weaknesses in alibi evidence which fully justified trial judge's conclusion. R. v. Jack (Feb. 1, 2013, Ont. C.A., Doherty J.A., Janet Simmons J.A., and M. Tulloch J.A., File No. CA C55039) 106 W.C.B. (2d) 3. GROUNDS Traffic stop turned into unjustified investigative detention Appeal by Crown from ruling of trial judge that excluded evidence obtained on warrantless search of accused and his vehicle after vehicle was stopped. Two police officers saw accused's vehicle exit parking lot of strip bar and it then failed to come to complete stop before it made turn at red light. On basis of Highway Traffic Act (Ont.) violation officers pulled vehicle over some distance after red light and asked accused for his documentation. Officers conducted computer search on accused and discovered that he had criminal record, he was subject to two firearm prohibitions and he was associated with street gang. Officer saw accused reach into back seat and he grabbed small bag and appeared to go through it and remove something from it. Officers feared for their safety because of accused's movement, he was patron of bar and because of his record. Accused cooperated with police when he was asked to undergo pat-down search to make sure he did not have weapon. No weapon was found but officer felt what he thought was large wad of cash. Vehicle was searched and marijuana was discovered. On basis of this evidence and based on what he thought was wad of cash accused was arrested for drug offence. Search was continued and officer found two loaded guns were found in locked glove compartment. Two bags of crack cocaine were later discovered on accused. Judge concluded that once police obtained computer information, stop turned into unjustified investigative detention. He did not accept officer's reliance on officer safety and he felt that police were on fishing trip. Pat-down search and subsequent search

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