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PAGE 14 of "dosage form" too narrowly when he concluded that pat- ent claimed "a product package comprising a transdermal drug delivery device and dessicant compartment containing des- sicant" rather then a dosage form. Applicant contended that Minister relied on reference to "patch" in relevant NOCs to de- cide that approved dosage form for purpose of s. 4(3)could only be transdermal patch and noth- ing more. Applicant conceded hat patch was integral compo- nent of transdermal delivery device but contended that de- livery device was not limited to patch. Application for judicial review dismissed. SNDS at is- sue did not represent change in dosage form in sense intended by s. 4(3) of Regulations. In- vention was product packaging that enhanced stability and per- formance of drug and was not "dosage form" or "novel deliv- ery system" in sense intended by NOC regulations and as ex- plained in RIAS. References to "non-aqueous carrier" in claims of Patent were incidental to invention claimed in patent as whole and were not "claim for dosage form" in sense intend- ed by Regulations. Patent was therefore ineligible for listing. Bayer Inc. v. Canada (Minister of Health) (July 10, 2008, F.C., Russell J., File No. T-1517- 07; T-1518-07) Order No. 008/224/095 (37 pp.). TAX COURT OF CANADA Taxation INCOME TAX Liability arose from debtor-creditor relationship between bank and account holder Appeal from assessments made under s. 224(4) of Income Tax Act (Can.). Lawyer, M., had signing authority in relation to lawyer's trust account at branch of appellant financial institu- tion and had joint account within another individual at same branch of appellant. M. had tax liability of $305,613 re- lating to his personal tax debts for 1997 to 2002 taxation years. Minister of National Revenue had knowledge that cheques were being drawn on trust ac- count identifying M. as payee, which were being deposited into joint account. Minister is- sued requirements to pay to ap- pellant in amount of $305,613 with respect to tax liability of M. pursuant to s. 224(1) of Act. Appellant issued Notices of Ob- jection, which were rejected by CRA. Appellant contended that it had no legal obligation to po- lice trust accounts to ensure law- yers complied with Law Society Rules. Issue whether appellant was liable to pay respondent amount equal to proceeds of 81 cheques drawn from lawyer's trust account because appellant failed to pay those proceeds to Receiver General in accordance with two requirements issued pursuant to s. 224(1) of Act. Appeal dismissed. Appellant should have paid money to Re- ceiver General pursuant to spe- cific wording contained in Re- quirements to Pay. Liability for payment did not arise because of Bills of Exchange Act (Can.), but because of debtor creditor relationship that existed be- tween bank and account holder. It was M. who owned funds in trust account. Only require- ment that was necessary in this situation was for appellant bank to be liable to make payment to M. and that happened when someone presented bank with cheques. Respondent made as- sumption that cheques in issue were for payment of legal fees and nothing was submitted by appellant to opposite. Legal analysis does not need to go to fact that moneys were moved from trust account to joint ac- count but should end where there was demand for pay- ment from trust account to M.. Analysis should not concern itself where money went after that. Money was not supposed to go anywhere other than to Receiver General pursuant to requirements. At that moment appellant should have followed requirement. Fact that bank ac- count was trust account did not change anything with respect to fact that appellant had con- tractual relationship and debtor creditor relationship with M.. Appellant still owed money to account holder, M.. It was still direct relationship. Canada Trustco Mortgage Co. v. Canada (Aug. 29, 2008, T.C.C., Little J.T.C.C., File No. 2006-2572 (IT)G) Order No. 008/266/021 (17 pp.). ONTARIO CIVIL CASES Administrative Law JUDICIAL REVIEW Jurisdiction of single judge to dismiss application summarily was power that should be used only in very clear cases Motion by respondent be- fore single judge of Divisional Court to dismiss application. Respondent's motion arose di- rectly from Supreme Court decision in New Brunswick (Board of Management) v. Dunsmuir (2008), 291 D.L.R. (4th) 577, 164 A.C.W.S. (3d) 727 (S.C.C.), where court stated that distinction between office holder and contractual employee for purposes of public law duty of fairness was prob- lematic and should be done away with. Applicant contend- ed that only Town Council had authority to discharge him but that he was discharged by mem- bers of town's management who had no power to do so. Motion dismissed. When and by whom applicant was dismissed was question of mixed fact and law and should be decided on full record. Jurisdiction of single judge to dismiss application summarily was akin to exercis- ing jurisdiction to strike, not claim for failing to disclose rea- sonable cause or action. It was power that should be used only in very clear cases. As point was novel motion was dismissed and issue was deferred to panel. Prowse v. Richmond Hill (Town) (Aug. 11, 2008, Ont. S.C.J. (Div. Ct.), Low J., File No. 575/07) Handwritten endorse- CASELAW ment. Order No. 008/261/058 (2 pp.). Agency APPARENT AUTHORITY Agent had ostensible authority to act on behalf of plaintiff Plaintiff delivered to defendant product to be marketed by lat- ter to end users. Defendant was invoiced by plaintiff for product delivered. There was no written distributor agreement between parties. Defendant had no prior experience or knowledge of type of product plaintiff was offering. Plaintiff employed services of W. to assist defendant in market- ing product. Plaintiff brought action to recover on outstand- ing invoices. Plaintiff claimed W. had no authority to negoti- ate with defendant on its behalf. Action dismissed. By conduct of parties, there was agreement that defendant would not pay in- voices until product was actually sold to end user. W. held himself out to defendant's employees as plaintiff 's representative. It was under W.'s ostensible authority to act on behalf of plaintiff that agreement between parties as ex- plained by defendant was culmi- nated and acted upon. Diamond Products Sales Ltd. v. Cleaning House (Oct. 2, 2008, Ont. S.C.J., Stayshyn J., File No. 05-21211 SR) Order No. 008/280/277 (16 pp.). Arbitration JURISDICTION Limitation period could be determined by arbitrator This was to determine whether arbitrator could decide if one- year limitation period in s. 7(2) of Disputes Between Insurers Regulation (Ont.), precluded re- sort to arbitral process. Dispute arose between two insurance companies over who was liable to pay statutory accident bene- fits under Insurance Act (Ont.). Application granted. Nothing in Regulation suggested that limi- tation period in s. 7(2) could not be determined by arbitrator. Whether timely, appropriate notice was given under Regula- tion was decision that arbitrator was well-suited to make. Rely- ing on wording of Regulation and applicable legislation and having regard to principles ex- pressed in case law, arbitrator had jurisdiction to determine whether, on facts of case, there had been compliance with s. 7(2) of Regulation. ING Insurance Co. of Canada v. Insurance Corp. of British Co- lumbia (Sep. 17, 2008, Ont. S.C.J., Trotter J.) Order No. 008/275/069 (4 pp.). Civil Procedure Appellants applied for leave to appeal from costs orders in re- spect of several class action pro- ceedings. This court released its judgment in McNaughton Auto- motive Ltd. v. Co-operators Gen- eral Insurance Co. (2001), 200 D.L.R. (4th) 449, 106 A.C.W.S. (3d) 331 (Ont. C.A.) ("Mc- Naughton I"), which decided that practice of automobile in- surers charging deductible on CLASS ACTIONS Leave to appeal costs orders in several class action proceedings was refused www.lawtimesnews.com total loss claims, where insurer took title to salvage, breached s. 6(7) of Statutory Conditions. Automobile Insurance, O. Reg 777/93. McNaughton I judg- ment was catalyst for proposed class actions in 37 different cases all case managed by mo- tions judge. Respondent insur- ers successful on a number of motions. Appellants unsuccess- fully argued that costs should be awarded in their favour be- cause various matters brought by insurers raised novel points of law. Motions judge held that motions may have involved novel facts but were decided us- ing settled law. He agreed that interpretation of statutory con- dition s. 6(7) raised novel issue concerning matter of public interest but concluded that is- sue had already been decided in McNaughton I. Costs awarded to insurers on partial indemnity scale. Plaintiff in Giuliano v. Allstate Insurance Co. actually reimbursed for his deductible. When defendant insurer moved for judgment, plaintiff's counsel applied to add Japetco Corp. and Barash as plaintiffs. Separate action commenced in style of same parties. Japetco and Barash v. Allstate some months later. Motion judge declined to add Japetco and Barash as plaintiffs and granted motion to dismiss second action as abuse of pro- cess. Motions judge found no justification for second action and ordered substantial indem- nity costs in favour of insurer. In Lupsor v. Middlesex Mutual In- surance Co. action dismissed be- cause plaintiff's personal claim caught by limitation period and defendant insurer not appropri- ate party to be certified as rep- resentative defendant. Insurer awarded substantial indemnity costs on plaintiff's personal claim and partial indemnity costs on balance of issues. Application for leave to appeal dismissed. Motions judge aware of under- lying goals of Class Proceedings Act, 1992 (Ont.) ("CPA"), and, in particular, objects of access to justice and judicial economy. No issue that McNaughton I was test case but motions judge properly found that various motions in is- sue here could not be collectively characterized as test case nor did they raise novel points of law. Is- sues raised did not engage public interest in broader sense meant by CPA. Motions judge alive to exceptional nature of substantial indemnity costs. Although alle- gations of fraud and improper conduct solely in support of punitive damages appeared to be extreme and would probably have not succeeded at trial, they could not support award of sub- stantial indemnity costs since issue of punitive damages never resolved. No reason to disagree with motions judge's award of substantial indemnity costs in Japetco and Barash action. Com- mencement of second action in absence of any justification con- stituted scandalous conduct. No strong grounds upon which to grant leave to appeal. Motions judge entitled to exercise discre- tion by awarding costs to suc- cessful parties and to award sub- stantial indemnity costs in cases he deemed appropriate. McNaughton Automotive Ltd. v. Co-Operators General Insurance Co. (Aug. 29, 2008, Ont. C.A., November 24, 2008 • Law Times Laskin, Simmons and Arm- strong JJ.A., File No. M34895; C40376) Leave to appeal from 136 A.C.W.S. (3d) 420; [2005] I.L.R. ¶1-4378; 74 O.R. (3d) 216; 9 C.P.C. (6th) 186 was re- fused. Order No. 008/266/066 (24 pp.). COMMENCEMENT OF PROCEEDINGS Plaintiff had not pleaded facts that, in law, would constitute cause of action against fund counsel Plaintiff suffered Hepatitis C she attributed to blood transfusion received during birth of her first child. Her request for compen- sation under 1986-1990 Hepati- tis C Settlement Agreement was denied by administrator. Plain- tiff commenced action against administrator claiming damages for negligence. Judgment ap- proving Settlement precluded such action unless leave had been obtained from Supreme Court of British Columbia, Su- perior Court of Ontario and Su- perior Court of Quebec. Leave was denied by Supreme Court of British Columbia. Notwith- standing that decision, plaintiff commenced this action against defendants fund counsel and court appointed monitor with- out requesting leave. Leave was required to commence proceed- ing against fund counsel. Plain- tiff 's motion for leave in connec- tion with claims against fund counsel was dismissed. Even on most generous reading of state- ment of claim, plaintiff had not pleaded facts that, in law, would constitute cause of action against fund counsel. Leave granted to amend statement of claim for purposes of continuing action against monitor alone. Musyka v. Callaghan (Sep. 11, 2008, Ont. S.C.J., Cullity J., File No. CV-08-750-00) Order No. 008/267/030 (5 pp.). Contracts FORMATION No unconditional, clear and absolute acceptance was communicated by defendant Defendants brought motion to enforce terms of purported set- tlement agreement with plain- tiff. Plaintiff was employed with Defendant D. Inc.. Defendant B., president of defendant D. Inc., informed plaintiff of termi- nation of latter's employment. After negotiation, plaintiff pre- sented to defendant B. signed settlement agreement containing severance terms. After exchange of e-mails and correspondence on matter, agreement remained unsigned on part of defendant B on account of condition that plaintiff sign release first. De- fendant also sought amendment regarding forgiveness of com- pany loan of plaintiff. Plaintiff brought action for damages for wrongful dismissal. Motion dis- missed. Parties did not reach an agreement to settle. Plaintiff 's signature on agreement was evi- dence of offer. Plaintiff indicated in emails and correspondence that defendant B.'s signature on draft agreement was method of acceptance. Defendant B. did not sign agreement, instead he established conditions for accep- tance. No unconditional, clear and absolute acceptance was communicated by defendant B. Hemingway v. Desire2Learn Inc.