Law Times

Law Times • December 4, 2017 Page 15 www.lawtimesnews.com CASELAW and HST. Plaintiffs made seri- ous allegations without standing to have 1993 transfer set aside although they had no claim at time of impugned transfer. Plaintiffs' serious and failed al- legations of misconduct consti- tuted reprehensible, scandalous or outrageous conduct attract- ing substantial indemnity cost consequences. Wilfert v. McCallum (2017), 2017 CarswellOnt 11078, 2017 ONSC 4431, M.D. Faieta J. (Ont. S.C.J.); additional reasons (2017), 2017 CarswellOnt 9686, 2017 ONSC 3853, M.D. Faieta J. (Ont. S.C.J.). Civil Practice and Procedure CLASS AND REPRESENTATIVE PROCEEDINGS Representative or class proceedings under class proceedings legislation Proof of actual loss not element of intrusion upon seclusion After plaintiff nurse, D, received visits from hospital co-workers who should not have known of her admission to hospital, hospital learned that 14 mem- bers of staff, including M, im- properly accessed D's health records(records), and that M improperly accessed records of 5,803 other patients. D brought action against hospital in negli- gence, breach of fiduciary duty, breach of contract, and intru- sion upon seclusion. D and K and brought motion to certify action as class proceeding. Issue arose as to which common is- sues plaintiffs proposed could be certified. Issues of whether com- pensatory damages could be as- sessed in aggregate and whether punitive damages should be awarded could be certified, sub- ject to further submissions. Re- maining common issues should be reframed to ref lect pleadings, for clarity, and to accord with Class Proceedings Act (CPA). Based on recent appellate deci- sion, issue of whether damages could be assessed in aggregate should be certified. Common issues judge could probably as- sess at least part of defendants' liability to class members on aggregate basis with respect to claims in negligence, breach of fiduciary duty, and breach of contract, although individual assessments may also be neces- sary. It was possible to assess in aggregate at least part of dam- ages with respect intrusion on seclusion claim. Section 24(1) (c) of CPA allowed aggregate as- sessment where no proof of loss by individual class members was required and proof of actual loss was not element of intru- sion upon seclusion. Evidence in support of punitive damages claim was weak, but certifica- tion motion was not assessment of merits and claim for damages was based on systemic short- comings, so claim was certi- fied. Knowledge and conduct of those in charge of maintaining privacy of patients' records re- quired assessment by trial judge to determine whether punitive damages were justified. Issues not pleaded as separate causes of action should not be certified as proposed. Issues which plain- tiffs proposed to frame alleging breaches by both defendants without alleging both defen- dants had corresponding obliga- tions were to be reframed. Issues regarding separate duties and types of damages were to be re- framed separately. Breach of pri- vacy was not certified as it was not pleaded as separate cause of action. Entitlement to pre- and post-judgment interest did not need to be certified. Daniells v. McLellan (2017), 2017 CarswellOnt 14307, 2017 ONSC 3466, Ellies J. (Ont. S.C.J.). Contracts FORMATION OF CONTRACT Miscellaneous Pursuit of written contract not basis to infer written contract was precondition to contractual obligations Defendant credit union owned defendant insurance broker (collectively V Inc.) that was party to non-exclusive broker agreements with two insurers, plaintiffs C Co. and R Co.. Bro- ker and insurers entered into discussions about developing exclusive supplier arrangement. Prior to written agreement be- ing prepared and executed, credit union decided to sell broker's shares through auction process. Defendant purchaser CG Ltd. was successful bidder. Insurers brought action against purchaser and two subsidiaries for damages for inducing breach of contract and against V Inc. for breach of contract. V Inc. and CG Ltd. brought motion for summary judgment dismissing action. Motion granted; action dismissed. Motion judge con- cluded that parties expected and required there to be signed writ- ten agreement in order for there to be binding contractual agree- ment ("precondition"). This disposed of claims for breach of contract and for inducing breach of contract. Appeal granted in part. Motion judge was tasked with answering two separate questions: did parties agree that they would set out their contrac- tual arrangements in writing, and if so, did parties agree that execution of written contract was precondition to creation of legal obligations between them. It was not in dispute that answer to first question was "yes". None- theless, motion judge appeared to have treated evidence provid- ing answer to first question as dispositive of second question. Motion judge's conclusion did not take into account evidence of parties' conduct that pointed to existence of some type of con- tractual relationship between parties, while they negotiated a formal contract. Motion judge discounted that conduct on ba- sis that it "ignores the need for a signed written contract that the parties pursued for many months". Parties' pursuit of writ- ten contract could not furnish basis to infer intention that exe- cution of written agreement was to be precondition to contrac- tual obligations. Evidence mo- tion judge adverted to was not capable of supporting inference for which it was relied upon. It also could not be basis for disre- garding evidence that had clear bearing on very question he had to consider. Motion judge erred in concluding that there was no issue requiring trial on question of precondition, and that there- fore this permitted him to dis- miss action against V Inc.. Dis- missal of action against G Ltd. was upheld. Canadian Northern Shield Insurance Company v. 2421593 Canada Inc. (2017), 2017 Car- swellOnt 10616, 2017 ONCA 570, H.S. LaForme J.A., K. van Rensburg J.A., and Grant Hu- scroft J.A. (Ont. C.A.); reversed (2016), 2016 CarswellOnt 14802, 2016 ONSC 5843, Newbould J. (Ont. S.C.J. [Commercial List]). REMEDIES FOR BREACH Specific performance Vendor not legally entitled to elect to default in obligation to convey proper title Vendor owned shares in com- pany that owned commercial plaza, petting zoo land and other land. Purchasers bought vendor's shares, had option to purchase petting zoo land us- ing vendor take back mortgage (take back mortgage), and were supposed to buy other land for which vendor was supposed to obtain severance. Purchasers made payments towards petting zoo land, although no title was transferred and take back mort- gage was never registered. Par- ties agreed that title would not be transferred until take back mortgage and amount owing for other land was paid in full. Vendor never applied for sever- ance of other land, so purchas- ers stopped making payments. Purchasers and company com- menced action against vendor for, among other things, rescis- sion of agreement for purchase of petting zoo and specific per- formance of agreement for pur- chase of other land. Purchasers and company brought motion for summary judgment. Motion granted in part. Motion judge held that vendor's ability and requirement to obtain severance would have to be established at trial, but certificate of pending litigation was to be registered as to purchasers' interest, and purchasers were awarded sur- vey costs paid to facilitate sever- ance. Motion judge concluded that specific performance would have been granted without hesi- tation if severance was granted or forthcoming since vendor had refused to honour his un- dertaking to proceed expedi- tiously to obtain required sever- ance while continuing to receive and retain substantial payments from purchasers. Motion judge ruled that vendor was not legal- ly entitled to elect to default in his obligation to convey proper title and thereby avoid specific performance, though severance status remained unclear at this time, including vendor's capac- ity to transfer title. Motion judge found evidence was lacking to determine date and quantum of damages as alternative remedy, though there was no triable issue as to survey costs. Vendor ap- pealed. Appeal dismissed. It was clearly open to motion judge, on question of remedy, to treat two properties separately and to determine that purchaser, after spending so much money over many years towards purchase of petting zoo, was entitled to treat contract as at end and to obtain damages as restitution of monies paid. Motion judge did not order specific performance. He found that purchaser's entitlement to specific performance of Lot 511 was established except for cru- cial issue of severance, which he determined "will have to be established in a trial as to that issue". Accordingly, he directed that Certificate of Pending Liti- gation be registered on title to Lot 511. D'Ascenzo v. Nichols (2017), 2017 CarswellOnt 10617, 2017 ONCA 578, J.C. MacPherson J.A., E.A. Cronk J.A., and M.L. Benotto J.A. (Ont. C.A.); af- firmed (2016), 2016 CarswellOnt 19154, 2016 ONSC 7645, Paul Kane J. (Ont. S.C.J.). Insurance ACTIONS ON POLICIES Practice and procedure Passenger on bus causing accident not entitled to coverage by bus company's insurer Passenger on bus grabbed steer- ing wheel, forcing it across high- way where it rolled onto its side in ditch. There were several injuries and one death, which resulted in tort action against passenger, driver of bus, bus company, province and police officers. Passenger did not de- fend claims against him and did not participate in litigation. Plaintiff brought action to re- cover damages from passenger in tort action against insurer, al- leging that it was insurer at time of crash by virtue of fact that passenger was occupant on bus and therefore entitled to cover- age by insurer of bus company. Insurer denied that plaintiff was insured under policy. Plaintiffs brought motion for summary judgment against insurer; in- surer brought cross-motion to dismiss action on basis of limi- tation period. Plaintiffs' mo- tion dismissed; insurer's cross- motion granted. There was no attempt by passenger to seek to have insurer defend him on basis that he was covered by insurance policy as occupant. There was no evidence demon- strating that in tort action judge was asked to make findings with respect to passenger's status on bus at time of crash for purposes of determining if he was insured under policy. Plaintiffs missed limitation period as it was up to plaintiffs to prove case against passenger in original trial and what they now seek appeared to be form of collateral attack on findings that trial judge did and did not make regarding passen- ger. It was always apparent that bus company was insured and it was disingenuous to suggest that plaintiffs could not have discovered who insurer was un- til sometime in 2016. C. Tapak, et al v. Non-Ma- rine Underwriters, et al (2017), 2017 CarswellOnt 10937, 2017 ONSC 4304, B.R. Warkentin R.S.J. (Ont. S.C.J.). Real Property LANDLORD AND TENANT Assignment of lease Commercial Tenancies Act not applicable to relieve against failure to obtain consent to assignment Leased premises were owned by respondent numbered com- panies (landlord). Applicants SF Corp. and U (tenant) were in possession of leased premises, allegedly as assignee of right of original tenant 244 Ontario Inc. (244) pursuant to assignment of lease. Landlord gave notice of termination of leasehold in- terest on basis that tenant was month-to-month tenant and its leasehold interest was subject to termination on 30 days' notice. Tenant brought application for declaration that assignment of lease was binding and enforce- able against landlord. Applica- tion dismissed. There was no valid and effective assignment by 244 to tenant pursuant to as- signment of lease. Commercial Tenancies Act did not apply to relieve against failure of 244 to obtain consent of landlord to as- signment of lease, as called for by terms of assignment. Condition to assignment of lease was not fulfilled because landlord's con- sent was never obtained, and so there could be no assignment of lease. Requirements in lease for valid assignment were not satis- fied because 244 was in default of lease for failing to pay rent, and landlord was not provided with written notice of assignment. Landlord did not intend that assignment of lease was valid by accepting rent and allowing tenant to remain in possession of leased premises. Since land- lord did not intend to consent to assignment of lease, it could not be said that recognition of as- signment as valid assignment in equity would give effect to par- ties' intention. Landlord was not estopped from denying that as- signment of lease was valid and effective. Landlord did not waive any of its rights under lease or at law. Tenant was not entitled to relief against forfeiture. Smiles First Corporation v. 2377087 Ontario Ltd. (2017), 2017 CarswellOnt 10871, 2017 ONSC 4306, Cavanagh J. (Ont. S.C.J.).

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