Law Times

Page 2 April 3, 2017 • lAw Times www.lawtimesnews.com NEWS In a split decision, the Court of Appeal overturned the mo- tion judge's decision, arguing that he had inappropriately re- lied on the concept of equitable assignment, which is a mecha- nism by which rights are con- veyed by one party to another. The court found that the judge erred in relying on equi- table assignment, as it was not argued in the pleadings. A two-judge majority also argued that the Insurance Act, under which Sweet had been designated the irrevocable ben- eficiary, provided a valid juristic reason for Sweet's enrichment. Therefore, there could be no finding of unjust enrichment. David Smith, the lawyer who represented Sweet on the appeal, says the majority's decision ac- curately ref lects what he thinks the laws surrounding unjust en- richment and constructive costs should be. "Justice Blair has a very crisp and clean way of cutting to the core of what unjust enrichment is supposed to be and how to distinguish between when and when not to apply the doctrine," he says. The lawyer represent- ing Moore, Jeremy Opolsky, says he intends to seek leave from the Supreme Court of Canada to appeal the Court of Appeal's decision. He says one of the takeaways from the decision is that irrevocable insurance ben- eficiary designations can be very tough to set aside. "These are very tough cases. Once somebody makes an ir- revocable beneficiary designa- tion, the insurance act treats that as basically being airtight, and the circumstances in which that can be set aside are rare but not insurmountable," he says. LT complicated in the ruling issued by McIsaac after a 23-day-long trial in Oshawa. "The trial judge made a num- ber of serious, erroneous and unnecessary findings of fraud against the defendants," argue lawyers Matthew Milne-Smith and Bryan McLeese in written submissions filed with the Court of Appeal. McIsaac found that the de- fendants at trial engaged in the tort of deceit, without requiring the plaintiffs to prove the ele- ments of the tort, argues Milne- Smith, a partner at Davies Ward Phillips & Vineberg LLP and McLeese, counsel at Chernos Flaherty Svonkin LLP. The appellants also argue that McIsaac's findings that two business documents were forged by Gardiner was contradicted by three witnesses in one case and never alleged by the plaintiff in the other. McIsaac served on the Su- perior Court for several years, presiding primarily in Barrie, Ont. On occasion, his court- room decisions attracted broad- er public attention. The Ontario Court of Ap- peal concluded in 2012 that the judge raised a reasonable appre- hension of bias and should have complied with a request to re- cuse himself in a civil proceed- ing over a property dispute in a township where McIsaac's wife was a real estate agent and they owned a cottage. On another occasion, in 2003, the Court of Appeal re- duced the $375-per-hour rate that McIsaac had granted a lawyer to prosecute a contempt proceeding that the Superi- or Court judge had launched against the province's public safety minister and two other public officials. McIsaac initiated the con- tempt case because of repeated delays in bringing accused in a murder trial from jail to court each day. In the current case before the appellate court, the lawyer act- ing for Todd and his company dispute the claims by Gardiner's lawyers that there were errors made by the trial judge. "Justice McIsaac conducted a thorough review of the evi- dence, made correct findings of fact and properly outlined and applied the law," writes David MacKenzie, a partner at Sze- menyei MacKenzie Group LLP in London, Ont. The conclusion that Todd was deceived when investing in Gardiner's company is "care- fully, clearly and correctly de- scribed" by the trial judge, states MacKenzie in written submis- sions filed with the appeal court. As well, one of the docu- ments found to be a forgery fits the legal definition of that act, because Gardiner admitted he tried to recreate the original re- cord, states Todd's lawyer. Among the issues that re- main unclear in the legal action is whether Todd and his com- pany made any profit after it was granted a court order in 2009 to exploit the insole patent. At trial, an accounting ex- pert for Gardiner estimated that Todd's company earned a gross profit of at least US$4.3 million between 2009 and 2014 from the use of the patent. McIsaac stated in his ruling that Gardiner's expert presented "impressive analysis and calcu- lations" and was very profession- al. However, the judge explained that he preferred the testimony of Todd, despite his having been "soundly chastised" by other judges presiding over earlier motions in the case for failing to provide adequate financial dis- closure. "Having excavated the re- lationship of these parties far deeper than my associates," McIsaac explained that he had a different conclusion about Todd's finances and was satis- fied the businessman was a "vir- tual pauper." Todd was represented at trial by lawyers David Taub and Robert Choi at Robins Appleby LLP in Toronto. The lawyers for both sides in the appeal declined comment. Taub also declined comment as the case is before the Court of Appeal. 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