Law Times

Law Times • November 3, 2014 Page 15 www.lawtimesnews.com Applicant received letter asking for her to provide updated proof of settlement funds. Letter did not specify amount. Applicant made bank draft for amount specified on website. Officer determined that principal appli- cant did not meet requirements for permanent residence visa as skilled worker because she did not submit satisfactory proof of settlement funds as she submit- ted only bank draft. Applicant sought judicial review. Appli- cation granted. Decision was unreasonable. There was no evi- dence that applicants borrowed money from someone else to purchase bank draft. Officer's concerns with respect to bank draft were based on pure spec- ulations. Principal applicant's credibility was on line. Officer had duty to give applicant op- portunity to disabuse her of her concerns, as was done on two previous occasions with re- spect to other issues. Applicant had no way to know bank draft would raise suspicion. Kaur v. Canada (Minister of Citizenship and Immigration) (Jul. 10, 2014, F.C., Yves de Mon- tigny J., File No. IMM-3152-13) 242 A.C.W.S. (3d) 926. ONTARIO CIVIL DECISIONS Contempt of Court GROUNDS No defence that order was improper and should not have been granted Defendant's employment was terminated for refusing to un- dergo background check. De- fendant then embarked on e- mail campaign with former em- ployer that culminated in threats and conduct akin to extortion. Defendant told plaintiffs that if they did not pay her significant amount of money, she would issue press release disclosing plaintiffs' confidential business methods and disparaging their business reputation. Plaintiffs obtained ex parte injunction that prohibited defendant from publishing press release. Defen- dant did not comply with order and issued press release. Plain- tiffs' confidential information was widely disclosed over inter- net. Plaintiffs brought motion to find defendant in contempt of court order. Motion granted. Court was satisfied beyond rea- sonable doubt that defendant breached court order. It was no defence to motion for con- tempt to argue that order was improper and should not have been granted. Defendant had full knowledge of court order. Court order was clear and was ongoing. Defendant's actions were deliberate and intentional. Defendant took no steps to stop press release. Defendant know- ingly and willingly breached let- ter and spirit of court order. Ceridian Canada Ltd. v. Azeezodeen (Jun. 24, 2014, Ont. S.C.J., E.P. Belobaba J., File No. CV-14-10552-CL) 242 A.C.W.S. (3d) 800. Damages MALICIOUS PROSECUTION Defendant lied to police to cover up his own negligence Plaintiff drove to gas station to fill his tire and saw area marked off by cones for fuel truck. Plaintiff drove through what he saw was open lane and de- fendant fuel truck driver waved plaintiff to a stop, put his legs in contact with plaintiff 's bum- per and then reported plaintiff to police for striking him. As a result, plaintiff was charged with mischief and dangerous driving and commenced ac- tion against defendant alleging malicious prosecution to which defendant did not respond. Mo- tion by plaintiff for default judg- ment for legal fees and rent for accommodation for six months because charges prevented him from entering United States where he had bought home. Motion granted. Defendant ini- tiated and was instrumental in criminal proceedings against plaintiff, and plaintiff was ac- quitted so proceedings were clearly terminated in his favour. Plaintiff established defendant lacked subjective basis for mak- ing complaint and evidence described man who was angry and vindictive at what he saw as plaintiff 's disregard for his cones. Defendant lied to police to cover up his own negligent cone placement and plaintiff did nothing more than drive through what he saw as open lane and stop to avoid defendant. Improper purpose and malice established. Plaintiff granted judgment for $23,866.37. Drainville v. Vilchez (Jul. 4, 2014, Ont. S.C.J., P.H. Howden J., File No. Newmarket CV-12- 110766-00) 242 A.C.W.S. (3d) 986. Family Law PROPERTY Reasonable steps should be taken to protect business During relationship parties oper- ated cleaning business together. After they separated, parties en- tered into agreement about how they would deal with business on interim basis. Wife claimed that husband improperly took $19,000 from business bank ac- count, but husband accounted for use of funds. Wife alleged that husband cancelled credit cards, removed equipment and inventory from business and re- moved licence plates from busi- ness vehicles. Parties entered into consent order. Husband claimed that wife failed to pay draw he was entitled to receive pursuant to order. Husband claimed wife was taking money from business bank account for her personal use. Wife terminated employ- ment of husband's son based on allegations of theft. Situa- tion between parties continued to deteriorate. Wife applied for order transferring ownership of vehicles from husband's name to her name. Application granted. Husband's objective appeared to be to frustrate wife's ability to manage business by cancelling automobile insurance policies on business vehicles. Reasonable steps should be taken to protect business. Vehicles were vested in wife's name. Wife was not permitted to dispose of vehicles without agreement of husband or court order. Hackett v. Hackett (Jul. 14, 2014, Ont. S.C.J., Martin James J., File No. FS-13-0121) 242 A.C.W.S. (3d) 881. Professions GENERAL Auditor owed duty of care for ultimate benefit of shareholders Large-scale fraud arose from en- tertainment productions venture set up by two individuals. Defen- dant was engaged as auditor for plaintiff from 1992 until plaintiff sought protection under Com- panies' Creditors Arrangement Act (Can.), in 1998. Plaintiff al- leged that audits were not carried out in accordance with gener- ally accepted auditing standards (GAAS) and should not have resulted in clean audit opinions. Plaintiff brought action against defendant auditor for negligence and breach of contract. Action allowed. Auditor owed duty of care to plaintiff for ultimate ben- efit of its shareholders. In period to end of 1995, auditor staff han- dling audits was reasonably com- petent. Auditor would have been able to discharge obligations of knowing and understanding operation of client as mandated by Canadian Institute of Char- tered Accountants handbook. Although auditor did not con- duct 1996 audit in accordance with GAAS in certain respects, it was not established that negli- gence caused any compensable harm. As to 1997 audit, audi- tor should have ended relation- ship with plaintiff in 1997, when warning signs were evident. As to tort claim, had matters come to head on relevant dates, audi- tor would have been obliged to make full and frank disclosure to audit committee and regula- tors. Also, auditor's investiga- tion of "Put" issue fell well short of generally accepted auditing standards and its legal standard of care. Auditor knew that man- agement was involved in fraud, and therefore assumption of management's good faith was, by definition, contradicted. Auditor did not collect all relevant papers for review, did not review with professional skepticism, never determined when Put was alleg- edly destroyed, and apparently performed audit by conversa- tion, giving rise to all manner of GAAS deficiencies. Auditor would also have been obliged to withhold clean audit opinion for year-end 1997 in respect of pre- production costs, revenue trans- actions, and ancillary issues. Ac- tion in contract succeeded simi- larly, and no distinction was to be made on elements of contract and its breaches, all of which were incorporated by reference to finding of "negligence". Livent Inc. (Receiver of) v. Deloitte & Touche (Apr. 4, 2014, Ont. S.C.J. [Commer- cial List], Gans J., File No. 04- CL-5321, 02-CV-225823) 242 A.C.W.S. (3d) 964. ONTARIO CRIMINAL DECISIONS Assault ASSAULTING PEACE OFFICER 12 months illegal sentence where Crown proceeded sum- marily but conviction upheld Accused appealed his convic- tion and concurrent 12 month sentences for assault police of- ficer and breach of probation. Police were called after accused was causing disturbance at hos- pital but let him go until they discovered that their computer showed he needed permission letter to be away from house ar- rest. Police sought out accused who was abusive and spat on po- lice and he was initially arrested for breach of recognizance. It was subsequently discovered that police computer was not up to date as accused no longer needed letter and was just on probation. Appeal against sen- tence only allowed. Sentence was changed to six months as 12 months was illegal sentence where Crown proceeded sum- marily but conviction was up- held. Information relied on to make arrest may turn out to be inaccurate or unreliable, after further investigation. Where police rely on information that turned out to be false or unre- liable, lawfulness of antecedent arrest depended on whether it was reasonable, in circumstanc- es that existed at time. Police reasonably believed accused was in default of his recognizance which justified arrest and spit- ting on police was assault. R. v. Boston (Jul. 28, 2014, Ont. S.C.J., M.A. Code J., File No. CR-13-30000-112AP) 115 W.C.B. (2d) 9. Defences ENTRAPMENT Opportunity to commit offence was given in context of reasonable suspicion Accused was found guilty of in- ternet luring. Accused applied for stay of proceedings on basis of entrapment by police. Male police officer pretending to be female communicated electroni- cally over several months with accused in response to two ad- vertisements which he had placed in "casual encounters" section of Craigslist. Accused had sought females over age of 18 with whom he proposed to smoke marijuana and have sex. "Female" stated very early on in electronic exchanges that "she" was 14 years old, but accused asserted that he believed she was 16 or older. Accused ar- gued that what was communicat- ed to him by officer in his guise as "female" amounted to providing of opportunity to commit offence in circumstances where there was neither reasonable suspicion that he was already engaged in crimi- nal activity nor making of bona fide inquiry. Accused argued that there was inducement. Ap- plication dismissed. Court was not persuaded that "words" of "female" took what was commu- nicated by officer over line from mere neutral investigation into territory of providing opportuni- ty commit offence. After "female" indicated that she was 14, accused made explicit reference to oral sex and, at that point, reasonable sus- picion that accused was already engaged in criminal activity had come into existence. Communi- cations between accused and "fe- male" went on for months. Pro- viding of opportunity to commit offence took place in context of reasonable suspicion, and entrap- ment was not made out. Internet was considered to be universal and investigation was not done in anything other than bona fide context. Police did not induce crime, as average person would likely have ended communica- tion moment that "female" stated her age to be 14. R. v. Argent (Jul. 17, 2014, Ont. S.C.J., Parayeski J., File No. CR- 4301) 115 W.C.B. (2d) 33. Disobeying Court Order Conduct was in realm of peace- ful leafleting, which was consti- tutionally protected activity Appeal by accused from her conviction for disobeying court order, contrary to s. 127 of Crim- inal Code. Order prohibited cer- tain activities outside of abortion clinic. Accused carried sign and silently walked back and forth on sidewalk in front of clinic and she was as close as 15 feet from front door. At one point accused walked across street and engaged man and woman in conversa- tion. Sherriff 's officer read or- der to accused and he informed her that because she was within 500 metres of clinic she was re- quired to leave. Accused refused to leave and she was arrested. There was confusion about man- ner in which accused breached order. Accused was convicted because, by her silent protest- ing behaviour, she was alleged to have attempted to intimidate patients from using services of clinic. Appeal allowed. Convic- tion set aside and accused was acquitted. There was nothing unlawful or intimidating in what accused did as she walked back and forth in front of clinic. Short of causing nuisance, which trial judge found that she did not do, accused was entitled to engage in this conduct so close to clinic. It was only when accused spoke to couple across street that sher- iff 's officers believed that she breached order. However, there was no evidence as to what she said to them. Accused's conduct was in realm of peaceful leaf let- ing, which was constitutionally protected activity. R. v. Gibbons (Jul. 23, 2014, Ont. S.C.J., Trotter J., File No. 79/11) 115 W.C.B. (2d) 37. LT CASELAW

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