Law Times

Page 14 May 16, 2016 • Law TiMes www.lawtimesnews.com full contents of one report. Pro- ceeding with hearing in absence of N and H was inappropriate, as was reliance on undisclosed oral statement of H. CG had not been given notice that Twitter postings would be considered, and they were mischaracterized as occurring over several days rather than just one. No expla- nation was provided as to how length of sanctions was arrived at. Given seriousness of some of these errors, appellate process was not sufficient to cure proce- dural defects in original hearing. Gymnopoulos v. Ontario Assn. of Basketball Officials (March 2, 2016, Ont. S.C.J., L. Bird J., DC-15-898-00) 264 A.C.W.S. (3d) 281. Assessment EXEMPTIONS Tax authority not entitled to assess portions of build- ing in which school operated Applicant owned single build- ing complex that housed both church and school. School was operated by corporation incor- porated by church for insurance and liability purposes, but was fully controlled by and finan- cially dependent on church. Respondent tax authority con- ceded that both church and school would likely be tax-ex- empt if they operated separately, or church would be tax-exempt if it operated school itself, but submitted school had to be considered separate entity in circumstances, and was taxable because it did not own land or have exclusive lease of it. As a re- sult, respondent sought to assess portions of building in which school operated. Application for judicial review. Application granted. School and church were part of single patrimony, and respondent's position frustrated operation of Assessment Act (Ont.). There was no dispute that church was church or religious organization within meaning of s. 3(1)(3), and school was non- profit philanthropic, religious or educational seminary of learn- ing with meaning of s. 3(1)(5). Idea that exemptions were to be narrowly construed no lon- ger applied. No doubt primary purpose of occupation of land by church was to house place of worship, and "school" sections, such as classrooms and gym, were also integral part of church. That they were used by school in off hours did not detract from their purpose, so all parts except school administrative areas fell under s. 3(1)(3)(i) exemption. Ex- emption in s. 3(1)(5) applied to all contested school use areas since they shared common patrimony with church. Decision did not deal with church book store and supply shop, but church could re-apply with better evi- dence, or to daycare housed in separate area of building. St. George and St. Rueiss Cop- tic Orthodox Church v. Mu- nicipal Property Assessment Corp. (March 9, 2016, Ont. S.C.J., S.F. Dunphy J., CV-11- 442880) 264 A.C.W.S. (3d) 302. Guarantee and Suretyship GENERAL Language of guarantee was clear and unambiguous In November 2012, plaintiff bank provided line of credit and corporate credit card to company. Plaintiff required defendant, director, CEO and majority shareholder, to provide personal guarantee of indebted- ness. In December 2013, plain- tiff provided further credit to company in form of fixed term loan. Line of credit and credit card continued with all lending incorporated in loan agreement secured by general security and subordination agreements. Al- lowable credit limit on line of credit was defined as percentage of accounts receivable to maxi- mum of $800,000. Company required to maintain tangible net worth of $1.25 million at all times. Company also required to provide information relevant to those terms at regular intervals. Defendant provided unlimited and continuing guarantee of all present and future indebtedness. In April 2014, plaintiff deter- mined company overdrawn on line of credit and maintaining insufficient tangible net worth. In September 2014, plaintiff de- termined company in breach of obligation to provide informa- tion. Plaintiff alleged company diverting receivables and issued notice that all future deposits would be used to pay down in- debtedness and not be made available as working capital. In November 2014, plaintiff sent simultaneous demands for re- payment to company and to de- fendant as guarantor. Company filed notice of intent to make proposal under Bankruptcy and Insolvency Act (Can.). Plain- tiff notified court it held 51 per cent of debt and, therefore, veto over any proposal. It support- ed motion by trustee to annul proposal. Plaintiff took no fur- ther steps against company but commenced action to enforce guarantee and brought mo- tion for summary judgment for $1,098,646.22. Motion granted. Language of guarantee clear and unambiguous. Plaintiff not required to exhaust recourse against company or any other security prior to making de- mand under guarantee. It had, between April 2014 and Novem- ber 2014, made numerous good faith attempts to allow company to remedy defaults under loan agreement. Company's failure to do so crystallized plaintiff 's right to demand repayment. Absent provision in loan agree- ment, plaintiff had not been required to provide additional notice to defendant. Plaintiff had not been required to pro- vide reasonable time to obtain alternate financing. Plaintiff had done nothing improper to entitle guarantor to discharge. Toronto-Dominion Bank v. Konga (March 10, 2016, Ont. S.C.J., Patrick Smith J., 15- 63692) 264 A.C.W.S. (3d) 358. Insurance AUTOMOBILE INSURANCE Defendant met onus of proof for reduction of jury award for pecuniary losses Plaintiff was injured in motor vehicle accident. Jury awarded plaintiff damages, including $55,000 for cost of past care, medical/rehabilitation and housekeeping and $50,000 for cost of future care, medical/re- habilitation and housekeeping. Pursuant to s. 267.8 of Insurance Act (Ont.), trial judge reduced jury's awards for past and fu- ture care, medical/rehabilitation and housekeeping costs from $105,000 to nil. Plaintiff ap- pealed. Appeal dismissed. De- fendant had onus of proving en- titlement to reduction and quan- tum of reduction. Jury questions were negotiated between coun- sel and were accepted by trial judge. Jury questions did not require jury to structure dam- ages award to ref lect require- ments of s. 267.8 of Act. Jury lumped together damages for care, medical/rehabilitation and housekeeping costs and it was not possible for trial judge to an- alyze award to make necessary statutory reductions on benefit- by-benefit basis but trial judge had mandatory statutory direc- tion to deduct collateral benefits plaintiff received under s. 267.8 of Act. By comparing quantum of benefits awarded to plaintiff by jury to benefits received, trial judge was reasonably assured that plaintiff had been fully com- pensated for applicable heads of damages even though they were lumped together, as plaintiff had received approximately $40,000 more than jury awarded. It was reasonable for trial judge to find that defendant had met onus of proof for reduction of jury award for pecuniary losses. Trial judge reasonably determined that if she had not made reduction then plaintiff would have been over- compensated. Trial judge did not err in reducing jury's awards for past and future care, medi- cal/rehabilitation and house- keeping costs to nil in absence of clear evidence about quan- tum for each collateral benefit. Basandra v. Sforza (Apr. 6, 2016, Ont. C.A., G.R. Strathy C.J.O., P. Lauwers J.A., and M.L. Benotto J.A., CA C60979) Deci- sion at 257 A.C.W.S. (3d) 41 was affirmed. 264 A.C.W.S. (3d) 485. VICARIOUS LIABILITY Law firm was not vicariously liable for actions of lawyer Plaintiff was dentist who be- came involved in investment scheme orchestrated by third party. Plaintiff claimed third party demanded they use de- fendant W as their solicitor. W provided legal services to plain- tiff, including handling sale of plaintiff 's practice and loan agreements used in investment scheme. Plaintiff invested ap- proximately $14 million to $16 million of his own money and that of friends and family in in- vestment. It was not disputed that third party operated Ponzi scheme. Third party commit- ted suicide when scam was dis- covered. Plaintiff issued action claiming W was negligent in his provision of legal services. Plaintiff claimed W held him- self out as member of defendant law firm, which gave W and investment scheme air of cred- ibility. Plaintiff brought motion for summary judgment for order that law firm was vicariously lia- ble for actions of W. Motion dis- missed. W was sole practitioner who occasionally did counsel work for law firm. W would use his own letterhead, send out his own accounts, maintain his own dockets. Law firm had no knowl- edge of who W's clients were or what work was being done by W on their files. All accounts sent to plaintiff were sent on W's let- terhead and all payments were made to W. Law firm's trust ac- count was used to hold funds from sale of plaintiff 's dental practice for brief time, until they were paid out. However, there was no legal work done at law firm for sale of dental business and no account rendered by law firm. Law firm was not vicari- ously liable for actions of W in relation to plaintiff 's investment. Amato v. Welsh (March 4, 2016, Ont. S.C.J., Darla A. Wilson J., CV-10-410760) 264 A.C.W.S. (3d) 546. Ontario Criminal Cases Abduction CHILD UNDER 14 YEARS Accused not permitted to intro- duce evidence regarding valid- ity of apprehension warrant It was alleged that accused, with- out lawful authority, took child out of possession of and against will of children's aid society, guardian of child, contrary to s. 280 of Criminal Code. Accused were charged with abducting person under age of 16. Ac- cused brought application to be permitted to ask questions and introduce evidence regarding validity of apprehension war- rant, to argue that apprehen- sion warrant should be found invalid, and to argue that, if ap- prehension warrant was found invalid, accused were lawfully entitled to take child. Applica- tion dismissed. Child and Fam- ily Services Act (Ont.) provided adequate remedial mechanism to party seeking to "undo" on- going effects of apprehension warrant that was sufficient to validate society's demand for interim compliance with such judicial order to promote and ensure rule of law. There was no basis for relaxing rule barring collateral attacks on such judi- cial orders. Doing so in circum- stances of this case would be de- structive of rule of law insofar as it would jeopardize orderly and functioning administration of justice in relation to child pro- tection matters and bring that system of justice into disrepute. R. v. Plumstead (Feb. 19, 2016, Ont. S.C.J., I.F. Leach J., 15-552) 128 W.C.B. (2d) 311. Appeal GROUNDS Judge's incomplete and unhelp- ful response to jury's question compromised trial fairness Ac cused was charged with pos- session of cocaine for purpose of trafficking, and for import- ing and trafficking cocaine. Ac- cused's first trial before judge and jury ended in mistrial when jury could not arrive at verdict. Crown re-prosecuted again be- fore judge and jury. At second trial jury convicted accused on possession and importing charges but it failed to arrive at verdict on trafficking charge. During deliberations jury asked, if they found accused guilty of importing cocaine, if they had to find him guilty of traffick- ing. Trial judge discussed ques- tion with both counsel and he then told jury that if they found accused guilty of importing they did not have to find him guilty of trafficking. Jury was entitled to take different views of evidence so that they could convict accused on one charge but not on other charge. Ac- cused appealed conviction. Ap- peal allowed. Effect of answer was to tell jury, for first time, that evidence could support different verdicts on importing and traf- ficking charges. This conf licted with judge's earlier repeated instructions regarding central issue in this case and legal con- sequences that would f low from jury's determination of that is- sue. Judge provided no elabora- tion or guidance to jury on this alternate and late-breaking the- ory of case and he did not relate it to evidence or to parties' posi- tions at trial. Judge also failed to caution jury against engaging in impermissible verdict com- promise based on expediency, frustration or desire to resolve case. It was dangerous and inap- propriate to leave jury entirely adrift to assess alternate and conf licting bases of culpability on its own, without any refer- ence to evidence and parties' positions. Of particular con- cern, judge failed to provide any explanation to jury for conf lict between his earlier instructions and his response to their ques- tion. New trial was necessary because judge's incomplete and unhelpful response to question compromised trial fairness and may have led to unsafe verdicts. R. v. Lapps (Feb. 23, 2016, Ont. C.A., Doherty J.A., E.A. Cronk J.A., and H.S. LaForme J.A., CA C59288) 128 W.C.B. (2d) 315. SENTENCE APPEAL Aggravating circumstances clearly called for sentence outside of exist- ing range for manslaughter Accused was sentenced to 20 years' incarceration upon con- viction for manslaughter. Ac- cused was originally charged with second degree murder CASELAW

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