Law Times

PAGE 14 unpaid employment insurance and Canada Pension Plan pre- miums, individual took steps to ensure that company paid them. Minister assessed individual for unremitted GST of company in amount of $20,158.29 for period from July 1, 2003 to March 31, 2004, on basis that individual was either de jure or de facto direc- tor during relevant period. Appeal allowed. For purposes of s. 323(1) Act, directors were considered as being such either de jure or de facto. Documentary evidence, consisting of unsigned directors and shareholders' resolutions, cor- roborated individual's testimony. On balance it seemed more likely than not that individual was not de jure director of company. Evidence suggested that individual's involve- ment with company during rel- evant period was motivated solely by desire to ensure that he could fully realize value of debt owed to him. Individual's actions were undertaken by him not as faithful director of company, but rather as self-interested creditor seeking to realize value of his receivable. McKay v. Canada (Nov. 23, 2011, T.C.C., Hogan J., File No. 2010- 3831(GST)I) 209 A.C.W.S. (3d) 965 (8 pp.). INCOME TAX Taxpayer failed to establish that all of sales deposited in bank accounts Appeal by taxpayer from reas- sessments under Income Tax Act (Can.), in respect of 2003 and 2004 taxation years. Taxpayer operated as sole owner a con- struction and renovation busi- ness. Minister added to taxpay- er's income business income of $45,293 for 2003 and $97,296 for 2004. In his income tax returns, taxpayer reported total income of $32,305 for 2003 and $44,749 for 2004. Taxpayer's spouse reported total income of $14,382 for 2003 and $12,816 for 2004. Minister imposed penalties under s. 163(2) of Act totalling $4,225.57 for 2003 and $10,241.33 for 2004. Appeal allowed. Reassessments were referred back to Minister for reconsideration and reassess- ment on basis that unreported business income determined by net worth method was $28,561.69 for 2003 and $22,478.24 for 2004. Penalties were upheld and adjust- ed. Evidence indicated that tax- payer failed to discharge his bur- den of proof regarding Minister's assumptions of fact. Audit appeared to me to have been well done and all of representa- tions by taxpayer and his advisors were given serious consideration. Taxpayer failed to establish that all of his sales were deposited in his bank accounts and that all of his clients paid by cheque. Gagnon v. Canada (Nov. 16, 2011, T.C.C., Favreau J., File No. 2008-2700(IT)G) 209 A.C.W.S. (3d) 980 (15 pp.). ONTARIO CIVIL CASES Appeal LEAVE TO APPEAL Not possible for motions judge to perform balancing of competing interests in absence of complete record Parties were involved in fam- ily law proceedings that resulted in divorce judgment. Applicant relocated and brought motion to change seeking financial dis- closure and revised child sup- port. Applicant brought ex parte motion for order authorizing substituted service on respon- dent's mother. Order was grant- ed. Judge made further ex parte order on own initiative barring respondent's mother from rep- resenting respondent in family court proceedings. Respondent's motion to have order set aside was dismissed. Respondent sought leave to appeal interlocu- tory order. Leave was granted. It was not possible for motions judge to perform requisite bal- ancing of competing interests in absence of complete record. Without request to remove counsel and without affording respondent opportunity to make submissions, correctness of orig- inal ex parte order was open to serious debate. Procedural flaws relating to both ex parte motion and hearing opened up correct- ness of decision to serious debate. Rule of motions judge went fur- ther than Rules of Professional Conduct and represented signifi- cant extension of existing com- mon law with respect to prohibi- tion of lawyers acting in Family Court for close family members. Proposed appeal raised issues of procedural fairness that tran- scended interests of litigants. Limitation on counsel represent- ing family members was matter of general public interest. Judson v. Mitchele (Nov. 4, 2011, Ont. S.C.J., Boswell J., File No. FC-10-37042-00) 209 A.C.W.S. (3d) 750 (10 pp.). Arbitration JURISDICTION Procedural order not "award" for purposes of Arbitration Act, 1991 Arbitration involved appli- cants, respondents and condo- minium. Applicants, respon- dents and condominium were parties to agreement relating to multi-use and multi-owner com- plex. Applicants spent $8 mil- lion to repair parking garage. Applicants sought determination as to appropriate allocation of repair costs. Arbitrator appor- tioned costs 50/50 as between capital costs and non-capital costs. Respondents brought motion to have arbitrator revive part I of arbitration. Arbitrator ordered revived hearing be held. Applicant sought to set aside procedural order made by arbi- trator. Applicants sought dec- laration that after having made award arbitrator was without jurisdiction to revive part I of arbitration, and to receive addi- tional evidence and submissions on basis there was denial of pro- cedural fairness in earlier hear- ing. Application was dismissed. Court did not have jurisdiction to hear application. Procedural order did not fall within s. 17(1) of Arbitration Act, 1991 (Ont.). Arbitrator's decision to revive arbitration was not rul- ing over entire substance of case. Procedural order was not ruling that on its own affected subject CASELAW matter of part I. Procedural order was procedural or interlocutory order. Procedural order was not "award" for purposes of s. 46(1) of Act. Arbitrator had jurisdic- tion under ss. 43(4) and 44(1) (b) of Act. 1210558 Ontario Inc. v. 1464255 Ontario Ltd. (Nov. 28, 2011, Ont. S.C.J., Wilton-Siegel J., File No. CD-11-9302-00CL) 209 A.C.W.S. (3d) 940 (11 pp.). Civil Procedure CLASS ACTIONS No evidence that error message displayed by cameras caused by defect Motion by plaintiffs for certi- fication of action as class pro- ceeding. Defendants designed, manufactured, and sold digital cameras. Plaintiffs were purchas- ers of defendants' digital cam- eras. These cameras had screens that displayed images, function settings, and messages relating to operation of camera. Particular error called "E18 error" was trig- gered when camera sensed prob- lem with movement of lens bar- rel. E18 errors caused cameras to shut down to avoid perma- nent damage to lens mechanism. Plaintiffs alleged their cameras developed E18 errors and became unusable for no apparent reason. Plaintiffs commenced action against defendants for damages arising from design or manu- facturing defect. Defendants' records indicated E18 error repairs had been performed in only 0.6% of all impugned cam- eras sold. Defendants examined plaintiffs' cameras and con- cluded their problems related to abuse or misuse. Motion dis- missed. Action was not appro- priate for certification, primar- ily because there was no factual basis for assertion that plaintiffs' cameras shared defect common to all impugned cameras. Expert evidence tendered by plaintiffs was inadmissible due to lack of relevant expertise on part of purported experts. There was no evidence that E18 error messages displayed by plaintiffs' cameras was caused by defect. Product was designed to shut down in certain conditions. Defendants' expert indicated plaintiffs' cam- eras probably experienced E-18 error messages due to conditions unique to each camera. Plaintiffs had not explained why they had included 20 of possible 136 mod- els of defendants' digital cameras in claim. There was no evidence that liability for any defect in 20 models could be determined on common basis. Defendants' expert indicated there were some differences in their design and construction. Certain causes of action in statement of claim would not have even applied in this case. Williams v. Canon Canada Inc. (Nov. 8, 2011, Ont. S.C.J., Strathy J., File No. 07-CV-335257CP) 209 A.C.W.S. (3d) 760 (72 pp.). Contempt Of Court GROUNDS Respondent in contempt of requests for information and documentation Application by commission for www.lawtimesnews.com CONDOMINIUMS Dog was nuisance and interfered with use and enjoyment of unit and common elements Respondent allowed dog on bal- cony of condominium unit. Dog order finding respondent in contempt for failing to provide proper answers to questions put to him by representatives of commission and for failing to provide answers to undertak- ings given by him. Commission issued order pursuant to s. 11(1) (a) of Securities Act (Ont.), to investigate and inquire into respondent and corporations relating to possible breaches of Act by respondent and corpo- rations, including fraud, illegal distribution of securities and unregistered trading of secu- rities. Respondent had been examined three times by staff of commission and on each occa- sion had given undertakings to provide further information and documents. Application grant- ed. Applicant was afforded one chance to purge his contempt. Respondent was in contempt of requests by commission for information and documenta- tion regarding alleged transfer of approximately $400,000. Ontario Securities Commission v. Hibbert (Nov. 2, 2011, Ont. S.C.J. (Comm. List), Newbould J., File No. CV 11-9350-00CL) 209 A.C.W.S. (3d) 824 (12 pp.). Family Law PROPERTY Unjust to allow respondent to benefit from applicant's initial investment Parties cohabited in domes- tic relationship for six years. Parties had two children. Funds for Hagersville purchase came solely from applicant's savings. Hagersville property was sold. Funds were invested in Jarvis property which was held jointly. Jarvis property was sold and net proceeds were deposited into solicitor's trust account pend- ing termination of issues in case. Applicant claimed result- ing trust and unjust enrichment. Applicant claimed applicant's intention was to share equally save initial investment. There was no evidence to suggest applicant intended to gift half of applicant's investment to respon- dent. Respondent held title to Jarvis property as joint tenant in trust for applicant as to first $39,302. Same conclusion was reached with respect to unjust enrichment. It was unjust to allow respondent to benefit from applicant's initial investment. Respondent was credited with half value of vehicle. $15,000 of line of credit was joint debt. Respondent was entitled to cred- it for half of excess which was $2,183. From amount remaining in trust respondent was entitled to $1,715 and applicant was entitled to $3,661. Respondent's share was to be paid to applicant for child support arrears. Mitchell v. Misener (Nov. 10, 2011, Ont. S.C.J., Gordon J., File No. FS/154/2005) 209 A.C.W.S. (3d) 922 (18 pp.). Real Property March 19, 2012 • Law TiMes barked at passers-by and relieved itself. Urine flowed down to unit below and onto common ele- ments. Condominium corpora- tion sought order for respondent to permanently remove dog from unit and premises. Respondent refused to participate in dis- pute resolution process under Condominium Act, 1998 (Ont.). Corporation sought cleaning and legal costs be charged to respondent's common expense account. Dog was nuisance and interfered with use and enjoy- ment of unit below and with common elements. Respondent failed to respond appropriately to corporation's reasonable requests. Corporation's rules pro- hibiting nuisance were reason- able. Corporation was entitled to enforce rules. Respondent was ordered to remove dog from unit and from condominium proper- ty. Corporation was permitted to post-cleaning costs of $1,384 and legal costs in amount of $803 to respondent's common expenses. York Condominium Corp. No. 26 v. Ramadani (Nov. 15, 2011, Ont. S.C.J., Strathy J., File No. CV-11- 420416) 209 A.C.W.S. (3d) 956 (14 pp.). Public Utilities ELECTRICITY Pamphlets wholly inadequate way of warning customers of risk that might affect livelihoods Action by farmers against hydro company for damages for negli- gence. Farmers purchased their farm in 1991. Hydro line that entered farmer's property was connected to transformer that reduced voltage from 7.2kV to 120V. One 120V hydro line went to farmer's home while another went to barn. Farmers began dairy farming in 1992. Milk quantity and quality started to meet expectations by 1995 but started to decline in 1997. Farmers were unable to improve milk quantity and qual- ity. In December 2000, one cow was found dead and another was found unresponsive for no apparent reason. Veterinarian suspected cows had been elec- trocuted. Testing revealed small voltages called "tingle voltage" between water bowls and con- crete floor. Farmers were unable to overcome their productivity problems and had to shut down dairy farm in 2002. Farmers alleged presence of stray tingle voltage from hydro system had led to poor milk production. Action dismissed. Farmers estab- lished breach of standard of care relating to notification about tingle voltage but failed to estab- lish that tingle voltage adversely affected milk production. Hydro company had been aware of risk of harm to dairy cows arising from tingle voltage. Hydro com- pany had duty to advise its dairy customers of existence of system conditions that might have made existence of tingle voltage more likely. Hydro company's efforts at bringing this issue to atten- tion of dairy farmers had not been sufficient. Hydro company had merely included pamphlets with hydro bills while know- ing many people did not bother reading such pamphlets. Such

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