Court of Appeal Summaries (June 16-20)

In James Bay Resources Limited v. Mak Mera Nigeria Limited, the Court set aside an award of damages for breach of contract and defamation. The trial judge had awarded damages for the reimbursement of payments made under agreements to assist James Bay in securing oil and gas contracts in Nigeria, after James Bay was unsuccessful in securing such contracts. The Court held that the payments were not contingent on business success. The trial judge had also awarded substantial damages for defamation after the appellant had made negative comments about James Bay to the Nigerian government. The Court set aside those damages (other than a nominal amount), finding that they were unsupported and excessive.

K.K. v. M.M. was a high-conflict family case culminating in a dispute over trial and pre-trial cost awards, as well as the rare use of a discretionary stay under s. 106 of the Courts of Justice Act. The Court of Appeal was split in its decision. It upheld the full recovery trial costs awarded to the wife due to the husband’s “extreme bad faith”. However, the Court diverged on the trial judge’s order staying prior pre-trial costs awards that had been made in the husband’s favour and had remained unpaid by the time of trial. The majority set aside the stay of the pre-trial cost orders. It did not wish to encourage litigants to defer paying costs orders in the hopes that they would be stayed at a later date. In dissent, MacPherson J.A. would have upheld the trial judge’s stay of the pre-trial costs orders.

In a rare event, in Stamford Kiwanis Non-Profit Homes Inc. v. Municipal Property Assessment Corporation, a five-member panel of the Court set aside the Court’s previous 1998 decision in Religious Hospitallers of St. Joseph Housing Corp. v. Regional Assessment Commissioner as having been wrongly decided. The issue was whether the appellant was entitled to a property tax exemption of s. 3(1)12(iii) of the Assessment Act, on the basis that it served the poor by offering rent-geared-to-income at below market rent. Under Religious Hospitallers, the appellant did not qualify for the exemption. The Court reviewed other case law and determined that Religious Hospitallers had, itself, failed to follow precedent and had since been largely ignored by the courts and had never been affirmed again by the Court. These, among other reasons, justified in setting it aside.

In 100 Bloor Street West Corporation v. Barry’s Bootcamp Canada Inc., the Court dismissed 100 Bloor’s main appeal on the issue of calculating its tenant’s realty tax allocation, but allowed the appeal on costs.

In Dunford v. Hamilton-Wentworth District School Board, the Court dismissed the appeal from a trial judge’s dismissal of a claim against a hospital for vicarious liability for sexual abuse by a doctor affiliated with the hospital who had operated his own school. The Court agreed with the trial judge’s finding that the hospital did not have a sufficiently close relationship with the tortfeasor doctor, who was not employed by the hospital, and therefore the two-pronged test for vicarious liability was not met, and the policy considerations behind imposing such liability were absent.

In McIlwain v Len’s Cove Marina Ltd., the Court allowed the Marina’s appeal and set aside the default judgment against it. The Court emphasized that the factors in the Mountain View test are not to be weighed equally, but rather, that the central issue on such motions is whether the interests of justice favour granting the order, even if some factors are completely absent. Courts are also not to delve into the factual merits of any defence on such motions or make factual findings.

In Ritson Division Retail GP Limited v. 2562583 Ontario Inc. (Meltwich Food Co.), the Court dismissed an appeal from summary judgment against a franchisee that had defaulted on its lease with the landlord. The franchisor had guaranteed the lease, settled with the landlord and then successfully obtained summary judgment against the franchisee on its crossclaim for the amounts owing to the landlord under the settlement.

In Farmer v. Farmer, the Court dismissed an appeal from an application for an estate trustee and attorney for property to pass accounts and repay improperly taken compensation to the estate.

Other topics included the striking of documents from an Appeal Book and Compendium that were not before the court below.

Civil Decisions

James Bay Resources Limited v. Mak Mera Nigeria Limited, 2025 ONCA 448

Keywords: Contract, Interpretation, Torts, Defamation, Libel, Damages, 101100002 Saskatchewan Ltd. v. Saskatoon Co-operative Association Limited, 2022 SKCA 12, Anglo-Cyprian Trade Agencies Ltd. v. Paphos Wine Industries Ltd., [1951] 1 All E.R. 873 (K.B.), Callidus Capital Corporation v. McFarlane, 2017 ONCA 626, Barrick Gold Corporation v. Lopehandia (2004), 71 O.R. (3d) 416 (C.A.), Canadian Pacific Hotels Ltd. v. Bank of Montreal, [1987] 1 S.C.R. 711, Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20, First National Financial GP Corporation v. Golden Dragon Ho 10 Inc. and Golden Dragon Ho 11 Inc., 2022 ONCA 621, Grossman v. CFTO-TV Ltd. (1982), 39 O.R. (2d) 498 (C.A.), Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130, John v. MGN Ltd., [1997] Q.B. 586 (Eng. C.A.), King v. Operating Engineers Training Institute of Manitoba Inc., 2011 MBCA, Lewis v. Daily Telegraph Ltd., [1963] 2 All E.R. 151 (H.L.), Malak v. Hanna, 2023 BCSC 1337, M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., [1999] 1 S.C.R. 619, Langille v. McGrath (2001), 243 N.B.R. (2d) 360 (C.A.), Rai v. Bholowasia, [2015] EWHC 382 (Eng. Q.B.), Ratzen v. Mirror Group Newspapers (1986) Ltd., [1994] Q.B. 670 (Eng. C.A.), Reardon Smith Line v. Hansen-Tangen, [1976] 3 All E.R. 570 (H.L.), Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Second Cup Ltd. v. Eftoda, 2006 CanLII 26174 (ON SC), Singh v. Doad, [1990] A.J. No. 240 (Alta. Q.B.), Skafco Ltd. v. Abdalla, 2020 ONSC 136, United Soils Management Ltd. v. Mohammed, 2019 ONCA 128, Valley Traffic Systems Inc. v. Malak, 2024 BCCA 370, Walker v. CFTO Ltd. (1987), 59 O.R. (2d) 104 (C.A.), Carter-Ruck, Libel and Slander, 3rd ed., London: Butterworths, 1985, Jamie Cassels, Remedies: The Law of Damages, Toronto, Irwin Law, 2000

K.K. v. M.M., 2025 ONCA 446

Keywords: Family Law, Civil Procedure, Orders, Costs, Full Recovery, Bad Faith, Stay of Proceedings, Procedural and Natural Justice, Reasonable Apprehension of Bias, Leave to Appeal, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 106, Family Law Rules, O. Reg. 114/99, rr. 24 and 25, Yukon Francophone School Board, Education Area #23 v. Yukon (Attorney General), 2015 SCC 25, Canadian Tire Corporation, Limited v. Eaton Equipment Ltd., 2024 ONCA 25, Mobile Mini Inc. v. Centreline Equipment Rentals Ltd. (2004), 190 O.A.C. 149 (C.A.), Cao v. Monkhouse Law Professional Corporation, 2024 ONSC 196, Peerenboom v. Peerenboom, 2020 ONCA 240, Buttarazzi v. Buttarazzi (2009), 84 R.F.L. (6th) 240 (Ont. S.C.), RJR-MacDonald Inc. v. Canada (Attorney General), [1994] 1 S.C.R. 311, 1247902 Ontario Inc. v. Carlisle Power Systems Ltd., [2003] O.J. No. 6300 (Div. Ct.), Rushton v. Cuff, 2020 ONSC 490, Armstrong v. Armstrong, 2016 ONSC 126, Manabat v. Smith, 2018 ONSC 4181, Cameron v. Cameron, 2018 ONSC 6823

Stamford Kiwanis Non-Profit Homes Inc. v. Municipal Property Assessment Corporation, 2025 ONCA 450

Keywords: Municipal Law, Statutory Interpretation, Property Tax, Assessments, Exemptions, Charities and Non-profit Philanthropic Corporations, Civil Procedure, Stare Decisis, Assessment Act, R.S.O. 1990, c. A.31, s. 46, s. 3(1)12(iii), Housing Services Act, 2011, S.O. 2011, c. 6, Sched.1, Taxation Act, 2007, S.O. 2007, c. 11, Sched. A , Religious Hospitallers of St. Joseph Housing Corp. v. Regional Assessment Commissioner (1998), 42 O.R. (3d) 532 (C.A.), Commissioners for Special Purposes of Income Tax v. Pemsel, [1891] A.C. 531, Stouffville (Village) (Assessment Commissioner) v. Mennonite Home Assn. of York County, [1973] S.C.R. 189, Stamford Kiwanis Non-Profit Homes Inc. v. Municipal Property Assessment Corporation, 2022 ONSC 6392, Stamford Kiwanis Non-Profit Homes Inc. v. Municipal Property Assessment Corp., 2023 ONSC 6625 (Div. Ct.), Canada (Attorney General) v. Bedford, 2013 SCC 72, Québec (Communauté urbaine) v. Notre-Dame de Bon-Secours, [1994] 3 S.C.R. 3, City of London v. Byron Optimist Sports Complex Inc. (1983), 23 M.P.L.R. 10 (Ont. C.A.), R. v. Kirkpatrick, 2022 SCC 33, David Polowin Real Estate Ltd. v. Dominion of Canada General Insurance Company (2005), 76 O.R. (3d) 161 (C.A.), Canada (Attorney General) v. Power, 2024 SCC 26, John Howard Society of Saskatchewan v. Saskatchewan (Attorney General), 2025 SCC 6, Toronto Standard Condominium Corporation No. 1628 v. Toronto Standard Condominium Corporation No. 1636, 2020 ONCA 612, Stubart Investments Ltd. v. The Queen, [1984] 1 S.C.R. 536, Golden v. The Queen, [1986] 1 S.C.R. 209, Ottawa Salus Corp. v. Municipal Property Assessment Corp. (2004), 69 O.R. (3d) 417 (C.A.), Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Bell ExpressVu Limited Partnership v. Rex, 2002 SCC 42, Religious Hospitallers of St. Joseph of Cornwall Corp. v. Regional Assessment Commissioner (1998), 42 O.R. (3d) 539 (C.A.), Joie de Vivre” Inc. v. Niagara Falls (City) (1988), 41 M.P.L.R. 90 (Ont. Dist. Ct.), Fernandes v. Araujo, 2015 ONCA 571, Causeway Foundation v. Ontario Property Assessment Corp., Region No. 3 (2004), 235 D.L.R. (4th) 754 (Ont. C.A.), Mackay Homes v. North Bay (City) (2005), 6 M.P.L.R. (4th) 44 (Ont. S.C.), St. Catherines Seniors Apartments Phase Three Inc. v. Municipal Property Assessment Corporation, 2015 ONSC 3896, London Jewish Community Village v. The Municipal Property Assessment Corporation, Region 23 et al., 2020 ONSC 6794, Causeway Foundation v. Ontario Property Assessment Corp., Region No. 3, 2002 CarswellOnt 2064 (S.C.), The Chelsea Green Home Society v. MPAC, et al. (1 August 2023), London, CV-16-00003013 (Ont. S.C.), Canadian Centre for Torture Victims (Toronto) Inc. v. Regional Assessment Commissioner, Region No. 9 (1998), 36 O.R. (3d) 743 (Gen. Div.), Buenavista on the Rideau v. Ontario Regional Assessment Commissioner, Region No. 2 (1996), 28 O.R. (3d) 272 (Div. Ct.), The Diocese of Toronto Camps (Anglican Church of Canada) v. Municipal Property Assessment Corp. (2004), 246 D.L.R. (4th) 170 (Ont. C.A.), Fung Loy Kok Institute of Taoism v. Municipal Property Assessment Corporation, 2024 ONCA 415, Elmer A. Driedger, The Construction of Statutes, 2nd ed., Toronto: Butterworths, 1983

100 Bloor Street West Corporation v. Barry’s Bootcamp Canada Inc. , 2025 ONCA 447

Keywords: Contracts, Interpretation, Real Property, Commercial Leases, Additional Rent, Realty Taxes, Civil Procedure, Substantial Indemnity Costs, Leave to Appeal, Legislation Act, 2006, S.O. 2006 c. 21, ss. 46, 47 and 67, Courts of Justice Act, R.S.O. 1990, c. C-43, ss. 131 and 134, Rules of Civil Procedure, , r. 57.01, Sattva Capital Corp. v. Creston Moly Corp, 2014 SCC 53, McLeod v. General Motors of Canada Limited et al., 2014 ONSC 134, Wastech Services Ltd. v. Greater Vancouver Sewerage and Drainage District, 2021 SCC 7, Apotex Inc. v. Eli Lilly Canada Inc., 2022 ONCA 587, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, McNaughton Automobiles Limited v. Co-operators General Insurance Company, 2008 ONCA 597, Bayford v. Boese, 2021 ONCA 442, Savage v. Belecque, 2012 ONCA 426, Restoule v. Canada (Attorney General), 2021 ONCA 779, Sky Clean Energy Ltd. (Sky Solar (Canada) Ltd.) v. Economical Mutual Insurance Company, 2020 ONCA 558, Lewis v. Lewis, 2019 ONCA 690, 1588444 Ontario Ltd. v. State Farm Fire and Casualty Company, 2017 ONCA 42

Dunford v. Hamilton-Wentworth District School Board, 2025 ONCA 438

Keywords: Torts, Battery, Vicarious Liability, E.B. v. Order of the Oblates of Mary Immaculate in the Province of British Columbia, 2005 SCC 60, K.L.B. v. British Columbia, 2003 SCC 51, Bazley v. Curry, [1999] 2 S.C.R. 534, John Doe v. Bennett, 2004 SCC 17

McIlwain v. Len’s Cove Marina Ltd., 2025 ONCA 434

Keywords: Contracts, Sale of Goods, Warranties, Civil Procedure, Default Judgments, Setting Aside, Rules of Civil Procedure, r. 19.08(1), Intact Insurance Company v. Kisel, 2015 ONCA 205, Mountain View Farms Ltd. v. McQueen, 2014 ONCA 194, Zeifman Partners Inc. v. Aiello, 2020 ONCA 33, Elekta Ltd. v. Rodkin, 2012 ONSC 2062

Ritson Division Retail GP Limited v. 2562583 Ontario Inc. (Meltwich Food Co.), 2025 ONCA 435

Keywords: Contracts, Real Property, Commercial Leases, Guarantees, Franchise Agreements, Indemnities, Settlements, Mary Carter Agreements, Damages, Civil Procedure, Summary Judgment, Abuse of Process, Laudon v. Roberts, 2009 ONCA 383

Farmer v. Farmer, 2025 ONCA 442

Keywords: Wills and Estates, Estate Administration, Estate Trustees, Powers of Attorney for Property and Personal Care, Civil Procedure, Passing of Accounts, Procedural and Natural Justice, Sufficiency of Reasons for Decision, Estates Act, R.S.O. 1990, c. E.21, Trustee Act, R.S.O. 1990, c. T.23, Substitute Decisions Act, 1992, S.O. 1992, c. 30, Accounts of Records of Attorneys and Guardians, O. Reg. 100/96, Re Jeffery Estate (1990), 39 E.T.R. 173 (Ont. Surr. Ct.), Laing Estate v. Hines, 41 O.R. (3d) 571 (C.A), Farej v. Fellows, 2022 ONCA 254

Alyange Holdings Inc. v. Dewdney Mountain Farms Ltd. , 2025 ONCA 440

Keywords: Contracts, Real Property, Mortgages, Civil Procedure, Settlements, Enforcement, Appeals, Evidence, Appeal Book and Compendium, Fresh Evidence, Striking Documents, Rules of Civil Procedure, rr. 25.06, 38.04, 49.09, 61.10(1), Pollon v. American Home Assurance Co. (1991), 3 O.R. (3d) 59 (C.A.), Barendregt v. Grebliunas, 2022 SCC 22

Short Civil Decisions

Hendriks v. Hendriks, 2025 ONCA 453

Keywords: Family Law, Civil Procedure, Costs, Family Law Rules, rr. 24(3), 24(4), 24(13), Berta v. Berta, 2015 ONCA 918, Selznick v. Selznick, 2013 ONCA 35, H.C. v. J.S., 2023 ONSC 4171, Climans v. Latner, 2020 ONCA 554, Jahn-Cartwright v. Cartwright, 2010 ONSC 2263, Browne v. Cerasa, 2018 ONSC 2242

Mamaghani v. Hlynski, 2025 ONCA 455

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Civil Procedure, Evidence, Witnesses, Credibility, 642947 Ontario Limited v. Fleischer et al. (2001), 56 O.R. (3d) 417 (C.A.), Arista Homes (Richmond Hill) Inc. v. Rahnama, 2022 ONCA 759

Bank of Nova Scotia v. Reed, 2025 ONCA 445

Keywords: Contracts, Debtor-Creditor, Civil Procedure, Summary Judgment, Consumer Protection Act, 2002, S.O. 2002, c. 30, Farm Debt Mediation Act, S.C. 1997, c. 21, ss. 5, 7, 12, Limitations Act, 2002, S.O. 2002, c. 24, s. 13

Pendlebury v. Pendlebury Estate, 2025 ONCA 443

Keywords: Wills and Estates, Real Property, Agreements of Purchase and Sale of Land, Jones v. Quinn, 2024 ONCA 315

Baumgarten v. Kemp, 2025 ONCA 456

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Trusts

CIVIL DECISIONS

James Bay Resources Limited v. Mak Mera Nigeria Limited, 2025 ONCA 448

[Gillese, Roberts and Coroza JJ.A.]

Counsel:

D.A. Cruz and A. Delage, for the appellants H. Book and W. McLennan, for the respondent

Keywords: Contract, Interpretation, Torts, Defamation, Libel, Damages, 101100002 Saskatchewan Ltd. v. Saskatoon Co-operative Association Limited, 2022 SKCA 12, Anglo-Cyprian Trade Agencies Ltd. v. Paphos Wine Industries Ltd., [1951] 1 All E.R. 873 (K.B.), Callidus Capital Corporation v. McFarlane, 2017 ONCA 626, Barrick Gold Corporation v. Lopehandia (2004), 71 O.R. (3d) 416 (C.A.), Canadian Pacific Hotels Ltd. v. Bank of Montreal, [1987] 1 S.C.R. 711, Earthco Soil Mixtures Inc. v. Pine Valley Enterprises Inc., 2024 SCC 20, First National Financial GP Corporation v. Golden Dragon Ho 10 Inc. and Golden Dragon Ho 11 Inc., 2022 ONCA 621, Grossman v. CFTO-TV Ltd. (1982), 39 O.R. (2d) 498 (C.A.), Hill v. Church of Scientology of Toronto, [1995] 2 S.C.R. 1130, John v. MGN Ltd., [1997] Q.B. 586 (Eng. C.A.), King v. Operating Engineers Training Institute of Manitoba Inc., 2011 MBCA, Lewis v. Daily Telegraph Ltd., [1963] 2 All E.R. 151 (H.L.), Malak v. Hanna, 2023 BCSC 1337, M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd., [1999] 1 S.C.R. 619, Langille v. McGrath (2001), 243 N.B.R. (2d) 360 (C.A.), Rai v. Bholowasia, [2015] EWHC 382 (Eng. Q.B.), Ratzen v. Mirror Group Newspapers (1986) Ltd., [1994] Q.B. 670 (Eng. C.A.), Reardon Smith Line v. Hansen-Tangen, [1976] 3 All E.R. 570 (H.L.), Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Second Cup Ltd. v. Eftoda, 2006 CanLII 26174 (ON SC), Singh v. Doad, [1990] A.J. No. 240 (Alta. Q.B.), Skafco Ltd. v. Abdalla, 2020 ONSC 136, United Soils Management Ltd. v. Mohammed, 2019 ONCA 128, Valley Traffic Systems Inc. v. Malak, 2024 BCCA 370, Walker v. CFTO Ltd. (1987), 59 O.R. (2d) 104 (C.A.), Carter-Ruck, Libel and Slander, 3rd ed., London: Butterworths, 1985, Jamie Cassels, Remedies: The Law of Damages, Toronto, Irwin Law, 2000

Facts:

The respondent is an Ontario corporation that sought to acquire oil and gas contracts in Nigeria. The individual appellant is the president and business development manager of the corporate appellant, a Nigerian company who interfaced with foreign companies seeking to do business in Nigeria’s oil and gas industry. The parties entered into two agreements, which both provided that the appellants would receive monetary compensation and shares for providing services to the respondent in pursuing business opportunities in Nigeria’s oil and gas industry. The respondent paid the appellants for their services, however, as the conditions in the Agreements for the issuance of the shares were not met, the respondents did not issue shares to the appellants.

They initially discussed the oil mining lease (“OML”)-11 and its potential acquisition. Later, the parties entered into the first agreement, which broadly covered “the acquisition of Nigerian oil and gas assets”. Later, the respondent sought to acquire a new Oil Mining Lease (“OML”)-25 and did not include the appellants. The appellants felt that this breached the intention of the second agreement and wrote a letter to the department of petroleum resources of the Nigerian government (the DPR), the department responsible for approving oil and gas contracts. They asserted that if they were to receive no benefit from the respondent’s acquisition, they would consider themselves to have been “defrauded by misrepresentations and deceptive conduct” (bolded type in the original). They asked the DPR to suspend the award of the OML-25 to the respondent to allow them to resolve the matter. The respondents sent the appellants a cease-and-desist letter through its lawyers. The appellants’ counsel replied advising the respondents that if they did not comply with their demands, the appellants would commence a number of legal proceedings that would threaten their reputation world-wide. The respondent did not succeed in obtaining any oil and gas contracts in Nigeria and decided to abandon its efforts. It commenced an action against the appellants seeking repayment of the amounts paid under the Agreements and damages for defamation because of the complaint letter.

The trial judge ordered the appellants to pay the respondents the amount of US$405,000, which she characterized as “advances”. She found that the appellants had defamed the respondents by the publication of the complaint letter and ordered the appellants to pay damages for defamation in the amount of $200,000. She also awarded the respondent costs of the action of $304,401.91, plus interest.

Issues:

(1) Did the trial judge err by finding that monetary payments for services rendered under the first agreement were contingent on the respondent acquiring an interest in an oil mining lease?

(2) Did the trial judge err by implying that monetary payments for services rendered under the agreement should be repaid?

(3) Did the trial judge err in awarding a substantial award of compensatory damages for defamation?

Holding:

Appeal allowed.

Reasoning:

(1) Did the trial judge err by finding that monetary payments for services rendered under the first agreement were contingent on the respondent acquiring an interest in an oil mining lease?

Yes.

The Court held that the trial judge erred by finding that monetary payments for services rendered in the first agreement were contingent on the respondent acquiring an interest in the oil mining lease. The agreements explicitly set out that the consideration for the payments was for services rendered and did not impose any conditions related to the acquisition of the oil block. The Court found that the trial judge’s interpretation that the payments were contingent on the respondent’s success in acquiring the interest in OML-11 was therefore inconsistent with the plain, unambiguous contractual language. The Court emphasized the principle that contractual terms should be interpreted based on their plain meaning, and in this case, the language was clear that the payments were unconditional. The trial judge’s decision effectively rewrote the terms of the contract without sufficient grounds, and such a reinterpretation was deemed an error. Accordingly, the Court found that the payments were not contingent on the success of the respondent’s efforts to obtain the oil interest.

(2) Did the trial judge err by implying that monetary payments for services rendered under the agreement should be repaid?

Yes.

The Court found that the trial judge’s imposition of implied repayment obligations was based on an inference that the payments were advances, which the Court found to be unsupported by the contractual language. The explicit language of the agreements clarified that these payments were for services already provided and did not create any conditional or repayable obligations. The Court explained that the principle of interpreting contracts by their expressed terms precludes such implied terms unless there is compelling evidence or necessity, which was absent here. The Court further emphasized that contractual rights and obligations should be derived from the actual contractual text, and the insertion of unwritten repayment obligations constitutes a judicial rewriting of the contract, which the courts generally avoid. Accordingly, the Court held that the trial judge erred in implying repayment terms, and the sums paid to the appellants for services rendered were not repayable under the terms of the agreements.

(3) Did the trial judge err in awarding a substantial amount of damages for defamation?

Yes.

The Court found that the evidence did not substantiate the large damages awarded by the trial judge. The Court highlighted that damages for defamation must be supported by concrete evidence of injury or harm, such as loss of reputation, economic loss, or other tangible impacts. The trial judge, however, relied heavily on the absence of an apology and the general defamatory nature of the letter, without sufficient evidence to show that the respondent’s reputation was seriously harmed to justify the amount awarded. The Court emphasized that the law generally requires a showing of actual damage before awarding substantial damages, and in this case, such evidence was lacking. The Court noted that in this case, the allegations that the complaint letter undermined the respondent’s reputation lacked admissible evidence demonstrating actual harm or impact. The publications of the letter were limited, and not shown to have caused measurable damage. As a result, the court concluded that the large damages awarded were unjustified and that a nominal award of $1,000 was appropriate to compensate for any harm, but not the substantial sum awarded by the trial judge.

K.K. v. M.M., 2025 ONCA 446

[MacPherson, Huscroft and Coroza JJ.A.]

Counsel:

B. Ludmer, for the appellant A. Pasha, for the respondent

Facts:

K.K. (husband) and M.M. (wife) engaged in lengthy and acrimonious family law litigation following their 2012 separation. The litigation, spanning from 2013 to 2022, involved approximately 40 pre-trial court appearances. These addressed decision-making responsibility for children, child and spousal support obligations and parental alienation issues.

During the proceedings, there were various interim costs ordered against both parties at different times. Five significant costs orders totaling over $100,000 were made in the husband’s favour between 2013-2020, which remained unpaid by the wife.

Following a nearly 19-day trial, the trial judge made extensive findings of “extreme bad faith” on the part of the husband throughout the litigation, including: fraudulent hospital records, falsified affidavits, unauthorized medical record requisitions, breaches of court orders, lying to the courts and agencies, and systematic psychological abuse. The trial judge found the wife successful on all major issues and awarded her $146,027 in trial costs on a full recovery basis and $65,414 in pre-trial costs. The trial judge also stayed enforcement of the five historical interim costs orders against the wife under s. 106 of the Courts of Justice Act (CJA), finding that it would be “oppressive” to permit enforcement given the husband’s “extreme bad faith [that] infected the entire litigation proceeding.”

The husband appealed both the costs orders and the stay, and sought leave to appeal the trial costs.

Issues:

1. Should leave to appeal the trial judge’s costs order be granted? If so, did the trial judge err in:

a. Awarding the wife full recovery costs on all issues?

b. In her application of r. 24 of the Family Law Rules?

2. Did the trial judge err in permanently staying pre-trial costs orders made by other judges?

3. Did the trial judge’s conduct and decision give rise to a reasonable apprehension of bias?

Holding:

Appeal allowed in part.

Reasoning:

1. No.

The Court denied leave to appeal the trial judge’s decision to award costs to the wife after her success at trial. The stringent test for leave to appeal costs is set out in Canadian Tire Corporation, Limited v. Eaton Equipment Ltd. The trial judge was in the best position to assess a party’s success at trial because she directly presided over the nearly 19-day trial. The wife’s success at trial presumptively entitled her to costs under subrule 24(3) in the Family Law Rules (FLRs).

a. No

The trial judge appropriately awarded the wife full recovery costs. Rule 24(10) of the FLRs allows awarding full recovery costs if a party has acted in bad faith. The trial judge also considered the reasonableness and proportionality of the husband’s behaviour in determining the amount. The evidence of the husband’s conduct sufficiently established bad faith to justify full recovery costs.

b. No.

The trial judge adequately considered the mandatory factors under r. 24 of the FLRs These included the parties’ behaviour, offers to settle, court expenses and other relevant matters. The Court agreed with the trial judge’s assessment that the husband’s bad behaviour was sufficient evidence to establish bad faith.

2. Did the trial judge err in permanently staying the pre-trial costs orders made by other judges?

Majority: Yes.

The majority (Huscroft J.A. and Coroza J.A.) reversed the trial judge’s stay of the pre-trial costs orders in favour of the husband. The trial judge could not stay the costs orders against the wife without ignoring the FLRs. Specifically, the trial judge erred in equating bad faith to fraud. Despite the husband’s deplorable behaviour, the majority did not, in reference to r. 25(19) of the FLRs, establish fraud (as the dissent held). Staying previous costs orders undermines civil procedure and the FLRs because it encourages the deferral of the payment of costs orders. This would unnecessarily and unacceptably prolong litigation.

MacPherson J.A. (dissenting in part): No.

In dissent, MacPherson J.A. was of the view that the trial judge’s stay of the pre-trial costs orders was within her discretion. The trial judge did not fail to consider the appropriate factors when she viewed the husband’s conduct as evidence of “extreme bad faith”. The dissent also viewed this case as sufficiently exceptional to justify the stay of the costs orders under s. 106 of the CJA rather than setting them aside under r. 25(19) of the FLRs. The dissent agreed with the trial judge that withholding costs payment would serve the interests of justice and cause no injustice to the husband. The trial judge’s exercise of discretion was appropriate, given the findings that the husband’s conduct was oppressive, vexatious or an abuse of process.

3. No.

The Court found no reasonable apprehension of bias on the part of the trial judge. It followed the Supreme Court’s objective test set out in Yukon Francophone School Board, Education Area #23 v. Yukon (Attorney General), which requires that a “reasonable and informed person viewing the matter realistically and practically” would need to conclude that the judge would not decide fairly before a finding of reasonable apprehension of bias could be made. The Court saw nothing in the trial judge’s approach that raised a reasonable apprehension of bias, or the appearance of it.

Stamford Kiwanis Non-Profit Homes Inc. v. Municipal Property Assessment Corporation, 2025 ONCA 450

[Pepall, Roberts, Sossin, Wilson and Madsen JJ.A.]

Counsel:

J. Jebreen and S. McAnsh, for the appellant J. Feiner and R. Chan, for the respondent Municipal Property Assessment Corporation J. O’Kane, for the respondent Corporation of the City of Niagara Falls

Facts:

The appellant is a charitable, non-profit philanthropic corporation that provides affordable housing to low-income residents in Niagara Falls. The appellant owns three properties where residents pay rent-geared-to-income (“RGI”), which is affordable rent below market value. Niagara Regional Housing has given the appellant grants, so it can provide low-income housing. The appellant also has staff on one of the properties who provides care for some of the tenants, a board of directors who serve without remuneration, and a for-profit management company for property management.

The issue of whether the appellant is entitled to an exemption from municipal taxation was brought to the court below. It was decided that they were not exempt from the tax, based on the Court’s 1998 decision in Religious Hospitallers. In the Religious Hospitallers case, a corporation converted a hospital into an apartment complex, with the majority of tenants paying RGI. The corporation was provided funding and government subsidies, but the court did not find that the corporation provided relief. Religious Hospitallers interpreted s. 3(1)(12) of the Assessment Act (the “Act”) and limited the parameters for eligibility for exemption from municipal tax for a charitable, non-profit philanthropic corporation.

Both the application judge and the Divisional Court considered themselves bound by the interpretation of the requirements for an exemption as described in Religious Hospitallers. In particular, the courts followed the need for a tax exemption applicant to establish that “by some form of endeavour” the applicant itself would provide relief.

Issues:

1. Was Religious Hospitallers wrongly decided?

a. Did Religious Hospitallers err in its interpretation of s. 3(1)12(iii) of the Act?

b. Did Religious Hospitallers fail to adhere to precedents?

c. Did Religious Hospitallers undermine the legislative intent of the Act?

d. Is the “endeavour” requirement in Religious Hospitallers unworkable?

2. Should Religious Hospitallers be overruled?

a. Does Religious Hospitallers rest on an unstable foundation?

b. What should the applicable test be?

c. Does the Act shift the financial burden from the province to the City?

d. Should the respondents Tax Credit argument succeed?

3. Should the appellant qualify for an exemption under s. 3(1)12(iii) of the Act?

Holding:

Appeal allowed.

Reasoning:

1. Yes.

Each of these four factors identify the shortcomings of Religious Hospitallers, leading the Court to determine that its prior decision in Religious Hospitallers was wrongly decided and must be overturned.

a. Yes.

The Court considered the interpretation of the Act which states “(a) the land must be ‘owned, used and occupied by’ a ‘charitable, non-profit philanthropic corporation’, (b) the corporation must be ‘organized for the relief of the poor’, and (c) the corporation must in part be supported by public funds.” In Notre-Dame, the Supreme Court adopted the dual-purpose approach, which is that the purpose of tax legislation is not only to raise funds to cover government expenditure, but also for social and economic purposes. It is evident that this approach was not applied in Religious Hospitallers, as the Court in that case stated that the only purpose in a Taxing Act was to raise money. This limited the ambit of the inquiry.

b. Yes.

The appellant argued that the court should have considered Mennonite Home, however, there was little distinction between that case and Religious Hospitallers other than the result. The appellant further submitted that Religious Hospitallers failed to cite or apply the decision in Byron Optimist, which applied a different test. The Court agreed with the appellant that had the Court in Religious Hospitallers applied the dictates of Byron Optimist and Mennonite Home, it was unlikely that the same result would have ensued.

c. Yes.

The Court determined that Religious Hospitallers misconstrued and undermined the legislative intent of the subsection of the Act. The language of focus in this appeal was “organized for the relief of the poor if the corporation is supported in part by public funds”. The Court followed Mennonite Home, which interprets “public funds” as government funding. As for “organized for the relief of the poor”, Religious Hospitallers imposed a requirement of “some other endeavour”, which is not found in the wording or apparent purpose of the Act. The Religious Hospitallers in Religious Hospitallers contributed to the social purpose of relieving poverty by providing affordable housing, which, in essence, is relieving poverty. These characteristics reflected the legislative intent of the Act and supported the argument that Religious Hospitallers was wrongly decided.

d. Yes.

An unworkable precedent is one that is unduly complex or difficult to put into practice. The “endeavour” requirement is, therefore, unworkable.

2. Yes.

The Supreme Court recently determined that a court can overturn its own precedents where the court rendering the decision failed to have regard to a binding authority or relevant statute, the decision has proven unworkable, or the decision’s rationale has been eroded by significant societal or legal change. To determine whether Religious Hospitallers should be overruled, the court must weigh the advantages and disadvantages of correcting the error reflected in that precedent.

a. Yes.

The “endeavour” requirement in Religious Hospitallers was disconnected from any requirement in the legislation. Additionally, other cases have not treated the decision as authoritative and it has not been affirmed by the Court. When examining jurisprudence that mentioned the finding of Religious Hospitallers on s. 3(1)12(iii), it is clear that Religious Hospitallers has largely been ignored and its soundness has been questioned by lower courts. Religious Hospitallers impedes the humanitarian objective of the Act, and the Court needed to correct the error and provide clarity and consistency in the law.

b. The applicable test should be the Byron Optimist test, and the primary purpose test as set out in Buenavista, which complement each other in preserving revenue generation through property taxes while enabling the social purpose embodied in the exemption. The Byron Optimist test is, “there must be an element of economic deprivation or need, the relief from which is a part of the purpose of the institution claiming the exemption.” The primary purpose test requires “an objective determination of the principal purpose for which the land is used and occupied.”

c. No.

The burden of any exemption will fall on a municipality, and this is not a basis to refuse to grant an exemption to a deserving applicant. Entitlement to an exemption should not depend on jurisdictional responsibility.

d. No.

The respondents raised issues related to the Taxation Act, however, neither party sought leave to introduce fresh evidence to assist in this argument. The respondents argued that no fresh evidence was necessary because tax credits arise under the Taxation Act. However, the Court stated that this was unclear based on the provisions the respondents relied on and there was nothing in the evidence that supported this submission.

3. Yes.

To qualify for an exemption under s. 3(1)12(iii) of the Act, an applicant must “(i) own, use and occupy the land; (ii) be a charitable, non-profit philanthropic corporation, and (iii) be organized for the relief of the poor. This means (a) the primary purpose or use of the subject property is relief of the poor, and (b) the corporation operates at least in part for the relief of the poor. The corporate objects may inform (a) and (b) but are not determinative. There must be an element of economic deprivation or need on the part of the corporation’s intended beneficiaries; and (iv) the applicant must be supported in part by public funds.” There was no issue that the appellant was an organization for serving the poor.

100 Bloor Street West Corporation v. Barry’s Bootcamp Canada Inc., 2025 ONCA 447

[Paciocco, Monahan and Wilson JJ.A.]

Counsel:

C. Kuehl and G. Cherniak, for the appellant M. Dunn and J. Martschenko, for the respondents

Facts:

In 100 Bloor Street West Corporation v. Barry’s Bootcamp Canada Inc., the appellant 100 Bloor Street West Corporation (“100 Bloor”) appealed a motion decision and associated costs order. The motion judge granted a declaration that the appellant must use the same method to calculate the realty taxes attributable the underground parking garage as it uses to calculate those attributable to the leased premises. The respondent, Barry’s Bootcamp Canada Inc. (“Barry’s”), had argued that the appellant was “mixing-and-matching” between calculation methods by using “proportionate share” and “current value” when it benefitted the landlord. The motion judge agreed, finding this approach to be unreasonable and inconsistent with their lease.

The lease allowed for the landlord to determine the portion of realty taxes “using such method of determination which the landlord shall choose”. The motion judge interpreted this as requiring the use of a single method in all parts of the tax calculation. Using different methods for different components such as the leased retail space vs. the parking garage would distort the tax allocation and impose a disproportionate burden on the tenant, attributing more tax to Barry’s than was justified by the value of its premises.

The motion judge held the mix-and-match approach was an unreasonable exercise of discretion, especially because 100 Bloor had resisted the current value method during earlier proceedings only to later rely on it to reduce its own burden. He emphasized that the lease required the landlord to make determinations on a reasonable basis.

Issues:

1. Did the motion judge reverse the burden of proof or apply the wrong lease standard?

2. Did the motion judge err in interpreting the lease?

3. Did the motion judge err in finding that 100 Bloor exercised its discretion unreasonably?

4. Should leave to appeal the costs award be granted and did the motion judge err in awarding substantial indemnity costs?

Holding:

Appeal allowed in part.

Reasoning:

1. No.

The motion judge did not reverse the burden or apply an incorrect lease standard.

The motion judges’ comments about requiring a “crisp, clear explanation” were part of a “preliminary view” shared during a case conference to encourage settlement, not a reversal of the onus. Barry’s, as the moving party, bore the burden of proof, and nothing in the decision suggested that the judge imposed that burden on 100 Bloor. The motion judge was presumed to know the law, and his conclusion that “the landlord’s calculations of taxes is not reasonable” confirms that he was satisfied that Barry’s met its burden.

The Court also rejected the claim that the motion judge applied the wrong lease requirements. The motion judge understood the lease required a “reasonable exercise of the discretion to allocate reality taxes”, and nothing in his reasoning contradicted that standard.

2. No.

The motion judge correctly found that the lease required 100 Bloor to use a single method of determination to allocate realty taxes. The lease provides that if taxes are not separately assessed, the landlord shall determine the portion of realty taxes attributable to the leased premises “using such method of determination which the landlord shall choose”. The Court emphasized that the term “method” is singular, and nothing in the surrounding circumstances altered that interpretation.

Accordingly, the Court rejected 100 Bloor’s argument that it could use different methods for the retail space and parking garage. The motion judge found that calculating Barry’s taxes required “a single calculation exercise”, including both the garage and the retail space. The Court agreed that this interpretation was open to the motion judge and found no extricable error of law.

3. No.

The motion judge did not err in finding that 100 Bloor exercised its discretion unreasonably. The motion judge fully considered 100 Bloor’s explanation, including its three-step method, and rejected it. He concluded that 100 Bloor’s valuation of the parking garage was derived from the Municipal Property Assessment Corporation’s current value assessment and that Barry’s never agreed to mixing-and-matching valuation methods.

The motion judge also rejected the argument that the lease definition “leased premises” precluded a single calculation method. He considered and dismissed the substance of 100 Bloor’s expert evidence. Finally, while commercial parties may pursue profit, the Court held that 100 Bloor failed to determine Barry’s “portion” of the taxes as required by the lease and instead attempted to maximize what Barry’s would pay, which was not what the parties reasonably intended.

4. Yes.

The Court granted leave to appeal the costs order and allowed the appeal on costs. The motion judge made material errors in awarding 100 Bloor’s costs on a substantial indemnity basis, totaling $709,017.39. The motion judge’s finding that 100 Bloor’s conduct was “reprehensible,” that it failed to disclose its position, and that the motion was “pointless” were not supported by the record or legal standards and therefore costs on a substantial indemnity scale were not warranted. The Court emphasized that even if substantial indemnity costs had been warranted, the amount awarded was disproportionate to the nature of the proceedings. The Court reduced the costs award to $300,000 in legal fees plus $125,706.30 in disbursements.

Dunford v. Hamilton-Wentworth District School Board, 2025 ONCA 438

[Copeland, Monahan and Rahman JJ.A.]

Counsel:

M. Wilchesky and N. Atrchin, for the appellant D. Berlach and L. Peleikis, for the respondent

Facts:

The appellant, J.D., attended an alternative education program called Cool School as a student in 1982 and 1983. The Cool School was launched as a pilot project by Dr. J.E.A., operating on hospital grounds from late 1973 to 1983. The respondent, Hamilton Health Services Corporation (“HHSC”), assumed the liabilities of Chedoke Hospital(s), its predecessor.

J.D. alleged that Dr. J.E.A., who had privileges at the hospital, sexually abused him and sued HHSC, claiming that the hospital was vicariously liable for the abuse. HHSC did not employ Dr. J.E.A., and the doctor’s privileges were independent of his involvement with the Cool School.

The trial judge dismissed J.D.’s claim for damages against HHSC. The trial judge found that Dr. J.E.A. committed the tort of sexual battery against J.D., which was not an issue on appeal. However, the trial judge concluded that HHSC was not vicariously liable for the doctor’s sexual abuse because its relationship to the doctor was not sufficiently close to make imposing vicarious liability appropriate.

J.D. appealed.

Issue:

Did the trial judge err in dismissing J.D.’s claim for damages against the HHSC?

Holding:

Appeal dismissed.

Reasoning:

No.

A trial judge’s findings respecting vicarious liability are questions of mixed fact and law. Accordingly, the Court will not interfere with such findings absent an extricable error in principle or a palpable and overriding error. The Court found that J.D. did not establish that such errors were present.

The Court held that the trial judge correctly stated and applied the test for vicarious liability. The trial judge correctly set out the two-pronged test that the plaintiff had to satisfy to bring a successful vicarious liability claim: 1) a sufficiently close relationship between the tortfeasor and the person against whom liability is sought; and 2) a sufficient connection between the tort and the tortfeasor’s assigned tasks such that the tort can be regarded as a materialization of the risks created by the enterprise.

The trial judge correctly reviewed all the relevant factors in concluding that HSSC’s relationship was not sufficiently close to Dr. J.E.A. to make imposing vicarious liability appropriate. Dr. J.E.A had sole authority over all major aspects of the Cool School program, he was not HSSC’s agent, and HSSC had minimal control over his activities. The Court rejected J.D.’s argument that the trial judge failed to consider the totality of the evidence. The trial judge properly addressed each factor individually in coming to her decision to not impose vicarious liability.

The trial judge correctly observed the two policy considerations behind vicarious liability: 1) fair and effective compensation; and 2) deterrence of future harm. There was no reason to interfere with the trial judge’s conclusion that imposing vicarious liability in this case would not further these two policy goals of vicarious liability, because HSSC and Dr. J.E.A.’s relationship was not sufficiently close. The trial judge was not required to consider these policy goals separately in her analysis.

The trial judge correctly concluded that imposing vicarious liability on HSSC would be unfair, because the hospital was too remote from Dr. J.E.A. to consider that he had acted on the hospital’s behalf. For the same reason, his misconduct could not be regarded as a materialization of the risks of the hospital’s own activities. As for the deterrent effect, Dr. J.E.A. was too independent for the hospital to have taken any measures regarding his conduct.

McIlwain v. Len’s Cove Marina Ltd., 2025 ONCA 434

[Rouleau, van Rensburg and Gomery JJ.A.]

Counsel:

D.M. Adams, for the appellant R. Larson, for the respondent

Facts:

The respondent, T.M., purchased a new boat and trailer from the appellant, Len’s Cove Marina Ltd. (the “Marina”) in 2022. After T.M. used the boat in the 2022 season, he complained to the Marina about its condition, citing structural issues in its hull. The Marina consulted with the boat manufacturer, NauticStar, which believed that the defects were cosmetic. The Marina proposed having NauticStar assess and repair the boat under warranty. T.M. rejected this, as he was unwilling to assume the cost of transporting the boat from Thunder Bay to the Marina in Portland, Ontario, which was a condition of the warranty.

T.M. then commenced an action on August 1, 2023, seeking damages relating to the Marina selling him the allegedly defective boat. He sought damages for the down payment he had made, the balance of the purchase price owed to the financing company, the costs of delivery and return of the boat and general damages. The Marina did not deliver a defence and there were no communications between the parties. T.M.’s counsel noted the Marina in default on September 8, 2023, without notice to the Marina, and obtained a default judgment without notice by motion on December 21, 2023. The judgment was served on the Marina in January 2024.

T.M.’s counsel then took steps to enforce the judgment. The Marina then retained counsel who brought a motion under rule 19.08(1) of the Rules of Civil Procedure to set aside the default judgment, which T.M. opposed.

The motion judge dismissed the Marina’s motion, applying the test to set aside default judgments set out in Mountain View Farms Ltd. v McQueen: 1) whether the motion was brought promptly after the defendant learned of the default judgment; 2) whether the defendant has a plausible excuse or explanation for the default; 3) whether the defendant has an arguable defence on the merits; 4) the potential prejudice to the defendant should the motion be dismissed, and the potential prejudice to the plaintiff should the motion be allowed; and 5) the effect of any order the Court might make on the overall integrity of the administration of justice. The motion judge was of the view that none of the elements of the Mountain View test were met. The Marina appealed.

Issue:

Did the motion judge err in refusing to set aside the default judgment?

Holding:

Appeal allowed.

Reasoning:

Yes.

Regarding the standard of review, the Court confirmed that a default judgment will not be interfered with absent an error in law or principle, a palpable and overriding error of fact, or unless it is so clearly wrong as to amount to an injustice. In this case, the Court agreed with the Marina that the motion judge committed reversible errors and that it was in the interests of justice that the default judgment and noting in default be set aside.

The motion judge made several errors in his articulation and application of the Mountain View factors.

Regarding the articulation of the test, while the motion judge correctly identified the Mountain View factors, he incorrectly observed that each factor should be given equal consideration and weight, and then proceeded to improperly weigh each factor equally. This approach was incorrect. The correct approach is an exercise in discretion, informed by the relevant factors, which does not require each factor to be weighed equally and will depend on the particular circumstances of the case. The Court emphasized Justice Gilese’s view in Mountain View that the factors are not to be treated as rigid rules, and the presence of an arguable defence on the merits may justify the court exercising its discretion to set aside the default judgment, even if the other factors are unsatisfied in whole or in part.

Regarding the motion judge’s application of the Mountain View test, the most compelling factors supporting setting aside the default judgment were the Marina’s arguable defence on the merits and plausible explanation for not having defended the action. The Court noted that this was not a case of a defendant deliberately causing delay by refusing to respond to legal proceedings or avoiding the enforcement of a judgment by advancing a weak defence. The Court found that the Marina believed that the boat’s manufacturer, NauticStar, had responded with a solution pursuant to its warranty, and when it learned of the default judgment, the Marina sought to advance a defence. The Court was of the view that the Marina’s defence was arguable.

A defendant need not show that the defence will inevitably succeed, but only that it has an “air of reality”, and it is not the motion judge’s role to make findings of fact and assess the merits of the defence. The motion judge observed that whether the boat was repairable would be something to be determined on a full evidentiary record. However, he then erred by reviewing the evidence and making findings of fact, in particular finding that the boat’s damage was not cosmetic, and that it may not have been repairable. The motion judge concluded that this was the only proposed defence having potential merit but that it was not supported by the evidence on the motion. In drawing this conclusion, the motion judge erred by weighing the evidence of the parties with respect to the extent of the alleged deficiencies with the boat.

The Court also disagreed with the motion judge’s rejection of the Marina’s defence based on NauticStar’s warranty. The motion judge concluded that reliance on the warranty was not a viable defence because T.M. was suing the Marina for the return of monies he paid for a materially deficient boat, and was not suing NauticStar. The Court held that this was an error, as the existence of a manufacturer’s warranty and the parties’ dealings with NauticStar before and after the action’s commencement may well be relevant to the Marina’s liability and T.M.’s damages, whether or not NauticStar was a party to the action. The Court found that the Marina’s draft statement of defence and the evidence demonstrated an arguable defence regarding the nature and extent of the boat’s deficiencies and that the boat was not worthless and the deficiencies could be addressed by the manufacturer’s warranty.

Finally, the motion judge erred in finding that the Marina had not provided a plausible explanation for not defending the action: the belief, rightly or wrongly, that NauticStar was undertaking a plan of action directly with T.M. to settle the claim. The evidence revealed that the Marina and NauticStar frequently communicated about the ongoing warranty issue from September to December 2023 (right before the claim was served), and the Marina believed a solution was forthcoming. There was also evidence that NauticStar contacted T.M. It therefore would not have been surprising for NauticStar to have been part of a solution once legal proceedings were commenced. Lastly, neither T.M. nor his counsel contacted the Marina before noting it in default or obtaining a default judgment. While this was not required by the Rules of Civil Procedure, the Court emphasized that it is “by far the better practice” to serve default judgment motion materials on a defendant.

Ritson Division Retail GP Limited v. 2562583 Ontario Inc. (Meltwich Food Co.), 2025 ONCA 435

[Rouleau, van Rensburg and Gomery JJ.A.]

Counsel:

C. Handapangoda, for the appellants M. Peters and D. Baker, for the respondents

Keywords: Contracts, Real Property, Commercial Leases, Guarantees, Franchise Agreements, Indemnities, Settlements, Mary Carter Agreements, Damages, Civil Procedure, Summary Judgment, Abuse of Process, Laudon v. Roberts, 2009 ONCA 383

Facts:

This is an appeal of a summary judgment granted in favor of the respondents, Meltwich Hospitality Group Inc. (the “Franchisor”) on its crossclaim against the appellants, Meltwich Food Co. (the “Franchisee”) and its principal.

The Franchisee operated a restaurant under a franchise agreement and occupied a unit leased from Ritson Division Retail (the “Landlord”). The lease was assigned to the Franchisee. The Franchisor terminated the Franchise Agreement after the Franchisee stopped paying rent and abandoned the business.

The Landlord commenced an action against the appellants and Franchisor for breach of lease. The Franchisor defended the action and crossclaimed against the appellants. After settling with the Landlord, the Franchisor moved for summary judgment on the crossclaim.

The motion judge found that the principal had personally guaranteed the Franchisee’s obligations, and that the Franchisee had breached the Franchise agreement by failing to comply with the lease. The franchise agreement required indemnification for any losses incurred due to the Franchisee’s conduct. The motion judge granted relief in favour of the Franchisor.

Issues:

1. Were the appellants correct to assert that the Franchisor had no liability to the Landlord and therefore, there was no basis for the Landlord to seek contribution and indemnity?

2. Were the appellants correct to assert that the guarantee and indemnity provision of the Franchise Agreement did not cover the liabilities assumed by the Franchisor under the settlement agreement?

3. Did the motion judge err in granting judgment for the full amount of the Franchisor’s settlement with the Landlord?

4. Did the summary judgment procedure amount to an abuse of process?

Holding:

Appeal dismissed.

Reasoning:

1. No

The Court disagreed with the appellants claim that the Franchisor had no liability to the Landlord. The Franchisor signed the assignment agreement, in which it agreed that it would indemnify the Landlord for the Franchisee’s performance of its obligations under the Lease pursuant to the indemnity. The Indemnity and the assignment agreement were therefore properly relied on by the Landlord when it sued the Franchisor as guarantor of the Franchisee’s obligations under the Lease.

2. No

The Franchisor was named as a defendant to the Landlord’s action based on its guarantee of the Franchisee’s obligations under the Lease. In light of the Landlord’s claim, the Court found the Franchisor was entitled to minimize expenses and settle because it was a party to the litigation. There was no basis for interpreting the franchise agreement to require a judicial determination in each case where litigation is commenced before the Franchisor “becomes liable” for the default of the Franchisee. Further, the Franchisor would arguably have been liable to the Landlord for the Franchisee’s default under the Lease pursuant to the Indemnity, even without a court proceeding by the Landlord.

3. No

This argument was not raised at first instance and did not assist the appellants. The Franchisor was not required to sue for the full amount only after making all instalment payments. Damages awarded in an action can include future amounts.

4. No.

First, the Settlement Agreement was disclosed to the appellants. Second, in response to the summary judgment motion on the crossclaim, the appellants put forward their defences to the crossclaim, which were rejected. Third, the motion judge confirmed that there was no issue as to the amount of the settlement. Lastly, should the Landlord choose to pursue its claim against the appellants, the amount of its settlement with the Franchisor will be taken into account, so there will be no double recovery for the Landlord (see Laudon v. Roberts at para 55).

Farmer v. Farmer, 2025 ONCA 442

[Lauwers, Miller and George JJ.A.]

Counsel:

J. Collings, for the appellant A.N. Winicki, for the respondents

Keywords: Wills and Estates, Estate Administration, Estate Trustees, Powers of Attorney for Property and Personal Care, Civil Procedure, Passing of Accounts, Procedural and Natural Justice, Sufficiency of Reasons for Decision, Estates Act, R.S.O. 1990, c. E.21, Trustee Act, R.S.O. 1990, c. T.23, Substitute Decisions Act, 1992, S.O. 1992, c. 30, Accounts of Records of Attorneys and Guardians, O. Reg. 100/96, Re Jeffery Estate (1990), 39 E.T.R. 173 (Ont. Surr. Ct.), Laing Estate v. Hines, 41 O.R. (3d) 571 (C.A), Farej v. Fellows, 2022 ONCA 254

Facts:

The appellant served as both estate trustee and attorney for property for his aunt following her severe brain injury in a car accident. Her estate proceeds were to be equally shared by the appellant and his two brothers.

The aunt’s condition deteriorated after the accident, when she was diagnosed with major neurocognitive disorder and vascular dementia. The appellant claimed his aunt gave him instructions to preserve her house and compensate him for the care he was providing to her. In doing so, the appellant collected statutory compensation, together with alleged negotiated compensation. The appellant then distributed the proceeds of selling his aunt’s home to himself, his wife and one of his brothers, but not the other.

The appellant’s brothers took issue with the appellant’s estate management. They brought a successful application for an accounting and relief relating to the appellant’s activities as estate trustee and attorney for property. The appellant appealed.

Issues:

1. Were the application judge’s reasons for granting relief adequate?

2. Did the application judge err in finding that the aunt lacked capacity to provide instructions?

a. Did the application judge err in questioning the appellant’s credibility?

3. Did the application err in finding the appellant’s compensation excessive?

4. Did the application judge err in finding that the appellant failed to act reasonably as attorney for property?

5. Did the application judge err in finding the will did not provide for advance compensation?

6. Did the application judge err in ordering the appellant to repay the estate?

Holding:

Appeal dismissed.

Reasoning:

1. Yes.

The Court held that the application judge gave adequate reasons in his decision. The application judge spent an appropriate amount of time reviewing the record. Despite its volume, the application judge overlooked nothing material. The reasons addressed the live issues and permitted appellate review.

2. No.

The Court deferred to the application judge’s assessment that the appellant’s aunt lacked capacity to provide instructions on the management of her property. The application judge considered medical evidence that showed the aunt could not understand relevant information or appreciate foreseeable consequences of decisions. Despite periods of lucidity after the aunt’s hospital admission, her case manager testified that she could not manage her finances at all in that time.

a. No.

The Court also deferred to application judge’s credibility assessment of the appellant. The application judge questioned the appellant’s estate administration approach because it was “rapacious” and not particularly honest. The Court found the application judge’s credibility assessment adequate because it was based on contradictory medical evidence, with no palpable and overriding error or error in principle.

3. No.

The Court reiterated the appellant’s excessive compensation. The application judge rejected the minimum wage calculation because it was inconsistent; minimum wage was $11/hour at time of alleged negotiation, not $14 as claimed. Further, the appellant later paid himself $16-18/hour without explanation. The appellant did not need reimbursements because he charged his aunt’s insurer nearly $50,000 for “visitor expenses”, notwithstanding the fact that the aunt’s insurance company paid for all her needs for the last four years.

4. No.

The Court agreed that the appellant failed to act reasonably as attorney for property and executor. The application judge held that he “did not come close” to keeping proper accounts as required because he produced incomplete reports only when ordered. This fell below the requirements to retain accounts as attorney of property and executor and trustee according to s. 6 of the Accounts of Records of Attorneys and Guardians regulation and s. 48 of the Estates Act.

5. No.

The Court upheld that there was no justification for the appellant’s advance compensation. The appellant paid himself advance compensation without any provision in the will allowing for it. Advance compensation requires such a provision, as set out in Re Jeffery Estate and Laing Estate v. Hines. The appellant also had few duties after his aunt died because his aunt had prearranged for her funeral. Nevertheless, he failed to follow the will’s instructions in making payments to charity and residuary heirs–except for one of his brothers, his wife, and himself to avoid probate and estate tax.

6. No.

The Court upheld the application judge’s order for the appellant to repay the estate. The appellant disentitled himself to compensation because of his plain misconduct. Out of the over $160,000 in compensation, gifts, and fees charged to the estate, the application judge found only about $5,500 to be legitimate. The Court saw no error in the application judge’s order to redistribute the estate money among the brothers, which accounted for the preliminary distribution excluded from one of the brothers originally. The Court agreed with the application judge that partial indemnity costs were appropriate, and would not come from the estate.

Alyange Holdings Inc. v. Dewdney Mountain Farms Ltd., 2025 ONCA 440

[Monahan J.A.]

Counsel:

E. Turkienicz, for the moving party R. Mazar, for the responding parties

Facts:

In 2014, a property owned by Dewdney Mountain Farms Ltd (“Dewdney”) was split into two parcels. Dewdney mortgaged the property to Alyange Holdings Inc (“Alyange”), which is a second mortgagee of the property. Alyange claimed that Dewdney did not make any payments on its second mortgage, which went in default. Alyange issued a notice of application against Dewendy (later converted into an action), seeking a declaration that Alyange was entitled to vacant possession of the property and for leave to issue a writ of possession.

The parties then settled in 2022, but after Alyange refused to consent to judgment in accordance with the settlement, the motion judge enforced the 2022 settlement and granted judgment in favour of Alyange. Dewdney then served a notice of appeal and the Appeal Book and Compendium. On this motion, Alyange sought to strike out some of the documents in the Appeal Book and Compendium on the basis that they were not part of the motion record before the motion judge who had enforced the settlement.

Issues:

Should the impugned documents be struck?

Holding:

Motion granted.

Reasoning:

Yes.

The impugned documents should be expunged from the Appeal Book and Compendium. If parties can expand the record on appeal beyond what was before the lower court, the appeal would cease to be from the judgment of the court below. Rules 61.10(f) and (i) (which prescribe the contents of an Appeal Book and Compendium) did not have the effect of expanding the appeal record beyond what was before the court below.

SHORT CIVIL DECISIONS

Hendriks v. Hendriks, 2025 ONCA 453

[Tulloch C.J.O. and Roberts JJ.A.]

Counsel:

M. Ruhl and A. Timm, for the appellant M. Stangarone and S. Kirby, for the respondent

Mamaghani v. Hlynski, 2025 ONCA 455

[Simmons, Rouleau and Pepall JJ.A.]

Counsel:

H. Scher, for the appellants R. Leck, for the respondent

Bank of Nova Scotia v. Reed, 2025 ONCA 445

[Lauwers, Miller and George JJ.A.]

Counsel:

J. B.R. Palmer, for the appellant K. D. Reason, for the respondent

Pendlebury v. Pendlebury Estate, 2025 ONCA 443

[Lauwers, Miller and George JJ.A.]

Counsel:

D. N. Delagran and G. Madill, for the appellants J. E. Sirdevan and L. Cardiff, for the respondent

Keywords: Wills and Estates, Real Property, Agreements of Purchase and Sale of Land, Jones v. Quinn, 2024 ONCA 315

Baumgarten v. Kemp, 2025 ONCA 456

[Simmons, Rouleau and Pepall JJ.A.]

Counsel:

G. F. Stewart, for the appellants R. W. Scriven, for the respondent

Keywords: Contracts, Real Property, Agreements of Purchase and Sale of Land, Trusts

The information contained in our summaries of the decisions is not intended to provide legal advice and does not necessarily cover every matter raised in a decision. For complete information or for specific advice, please read the decision or contact us.

Any article or other information or content expressed or made available in this Section is that of the respective author(s) and not of the OBA.

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