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May 2011

Ontario Edition

op O N P O I N T LEGA L R E S EA RCH

Inside this Issue: This month we have summarized what we feel are the five most interesting cases from the Ontario C.A. in April 2011. We highlight cases from the following areas of law: Civil Procedure - p.3 Family Law: Maintenance and Support - p.5 Bankruptcy and Insolvency - p.7 Government Law; Government Assistance Programs -p..8 Damages; Physical and Psychological Injuries - p.10

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Marks v. Ottawa (City), 2011 ONCA 248 Areas of Law: Civil Procedure; Amendment of Pleadings

BACKGROUND

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he appellants in this case were Mr. Marks, Mrs. Marks, and the infant Julia Marks by her litigation guardian. The respondents were Mr. Maheux, Ms. Natividad, Mr. Petch, and the City of Ottawa. The appellants and the respondents were neighbors. The respondents obtained a right-of-entry permit allowing them to enter on the appellants’ property in order to waterproof a basement wall. The appellants contested the validity of the permit and obtained an interim injunction against the respondents. When the injunction was lifted, the respondents proceeded with the work. The appellants then commenced the present action for damages against their neighbors, the May 2011

City of Ottawa, and a bylaw officer. The also sought to amend the pleadings to add claims against the City and the bylaw officer for misfeasance in public office, negligent misrepresentation, intentional causation of mental suffering, distress and malicious prosecution. The motion judge denied the proposed amendment and concluded there was no possible cause of action for negligent misrepresentation or breach of fiduciary duty against a municipality or its bylaw officer. The motion judge further found that part of the proposed amendments amounted to a collateral attack on the earlier judgment denying the appellants the continuation of their interim injunction. CLICK HERE TO ACCESS THE JUDGMENT

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Under Appeal: Justice Power

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1.888.894.4280 | info@onpointlaw.com Marks v. Ottawa (cont.) APPELLATE DECISION

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he appeal was allowed in part. The Court of Appeal held that the motion judge erred in concluding that the amended statement of claim represented a collateral attack on the order denying the injunction. The Court further found that the claims for negligent misrepresentation and breach of fiduciary duty were properly disallowed. The facts alleged fell so far outside of what had been established as negligent misrepresentation that there was no realistic prospect the claim would succeed. The Court confirmed the motion judge’s holding that the facts pleaded could not reasonably support a finding that the

City or the bylaw officer owed a fiduciary duty to the appellants. Moreover, the Court confirmed the motion judge’s conclusion that even if an officer could be found to owe such a duty, a breach of fiduciary duty could not be found in this case, since the essential element of vulnerability or dependence of the appellants was clearly not present. Finally, the Court held that the earlier judgment refusing to continue the interim injunction simply removed a previous court-ordered impediment to their proceeding. It did not resolve the issues in the main action and was without prejudice to the parties.

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Davis v. Crawford, 2011 ONCA 294 Areas of Law: Family Law: Maintenance and Support; Common Law Under Appeal: Justice Marshman CLICK HERE TO ACCESS THE JUDGMENT

BACKGROUND

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he appellant in this case was the spouse Mr. Crawford. The respondent was the spouse, Ms. Davis. The parties were common law spouses. They began residing together in 1982 when the appellant was 41 years of age and the respondent was 42 years of age. Both parties had been previously married and had children from their former marriages. The parties cohabited for 23 years, during which they enjoyed a comfortable lifestyle and contributed to the household expenses from their respective incomes. After separation, the respondent continued to reside in the matrimonial home until it was sold. At trial, her sole request was for lump sum spousal support in an amount equal to the appellant’s share of the net proceeds of the sale of the matrimonial home. The appellant argued that the respondent was not entitled to any spousal support. The trial judge found that the respondent was entitled to lump sum spousal support, in light of evidence that the appellant diverted monies from the sale of the matrimonial properties to his own use, that the respondent had considerably fewer assets than the appellant, and that the respondent was deprived of a property claim because the parties were not married. The trial judge awarded the respondent a lump sum support of $135,000. The appellant appealed the award on the basis that the trial judge erred because the parties’ assets and means were approximately equal and it amounted to a redistribution of capital. On appeal, he sought to adduce fresh evidence consisting mainly of affidavits from his daughter and the person to whom he sold his business and exhibits.

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1.888.894.4280 | info@onpointlaw.com Davis v. Crawford (cont). APPELLATE DECISION

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he appeal was dismissed, and the appellant’s application to adduce fresh evidence denied. The Court of Appeal held that the appellant’s “fresh evidence” could have been produced at trial. Since the appellant provided no explanation as to why it was not, there was no justification to produce the evidence on appeal. The Court further held that the trial judge made no palpable and overriding error in awarding the respondent a lump sum payment and had not engaged

in speculation in her consideration of the parties’ assets. Although the trial judge did not offer a detailed explanation for her award, she clearly awarded lump sum support based on a concern that the appellant would not pay periodic support and in order to effect a clean break between the parties. While the Court noted that a more detailed explanation of the trial judge’s calculations would have been desirable, it concluded the award was not clearly wrong, and therefore could not be overturned.

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D’Alimonte v. Porretta, 2011 ONCA 307 Areas of Law: Bankruptcy and Insolvency Law; Practice and Procedure Under Appeal: Justice Corbett

BACKGROUND

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he appellants in this case were Ms. D’Alimonte and 1398740 Ontario Limited, carrying on business as Dalco Dental Studios. The respondents were Ms. Porretta and 1398471 Ontario Limited, carrying on business as Bolton Dental. The appellant Ms. D’Alimonte claimed she entered into a joint venture agreement with the respondent Ms. Porretta in February 2000 to establish a dental clinic. She alleged that the respondent terminated her employment in February 2002 in breach of the parties’ joint venture agreement. She therefore sought a declaration that she was the beneficial owner of 50 per cent of the respondent

company Bolton Dental. In November 2000, the appellant Ms. D’Alimonte made an assignment in bankruptcy. Her sworn statement made no mention of her alleged interest in Bolton Dental and did not disclose her interest in Dalco Dental. Instead, she claimed she was an employee of Dalco Dental, and declared that her financial difficulties stemmed from the failure of a bar business. She was discharged from bankruptcy in August 2001. In 2006, the trustee in bankruptcy learned of her action and her alleged interest in Bolton Dental. The trustee expressed the possibility of pursuing that interest on behalf of the creditors. The respondent Ms. Porretta took the position that the appellant did not have standing to bring the joint venture action

because whatever action she claimed remained vested in the trustee. The matter went into abeyance for three years. In June 2009, the appellant obtained an ex parte order regularizing her action, stating that her action could continue in her own capacity and/or by the trustee in bankruptcy. The order was set aside four months later on consent. The respondent subsequently obtained an order dismissing the action on the basis that the claim was a nullity from the outset due to the appellant’s failure to report her assets to the trustee in bankruptcy.

CLICK HERE TO ACCESS THE JUDGMENT

APPELLATE DECISION

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he appeal was dismissed. The Court of Appeal held that even if the motion judge was wrong in finding that the claim was a nullity, he recognized his discretion to validate the claim and regularize the proceedings and chose not to do so. It was open to the motion judge to find that the appellant knowingly failed to disclose her purported interest in Bolton Dental, which he accurately described as her only asset of potential substance. The appellant did not advise her trustee of the non-disclosure when she retained counsel and commenced the joint venture action that she now sought to resurrect. The Court found the motion judge did not view the irregularities as mere formalities deserving of remedy through equitable relief, and did not err in the exercise of this discretion. May 2011

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Ontario (Director, Disability Support Program) v. Ansell, 2011 ONCA 309 Areas of Law: Government Law; Government Assistance Programs; Appeals and Judicial Review Under Appeal: Justice Harper

BACKGROUND

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he appellant in this case was the Director of the Ontario Disability Support Program at the Ministry of Community and Social Services. The respondent was Ms. Ansell. The respondent was 21 years old and had Asperger’s Syndrome. She lived with her mother, who spent significant sums of money on her various therapies. The respondent’s mother received $800 per month in child support from the respondent’s father. The father’s obligation to pay child support was contingent on the respondent attending school full-time and living with her mother. The support payments were also set to terminate if the respondent’s mother died. The respondent’s

mother no longer worked and relied on the child support payments to fund the respondent’s programs. When the respondent turned 18, she made a claim for income support before the appellant. The appellant denied her claim on the basis that the child support payments she received from her father exceeded her budgetary requirements.

The respondent then appealed to the Social Benefits Tribunal. The Tribunal reversed this decision, on grounds that the support payments were not income attributable to the respondent. The Divisional Court upheld the Tribunal’s decision. CLICK HERE TO ACCESS THE JUDGMENT

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Ontario (Director, Disability Support Program) v. Ansell, (cont.)

APPELLATE DECISION

The appeal was dismissed. The Court of Appeal upheld the Divisional Court’s finding that “income”, for the purposes of family law and the Ontario Disability Support Program, did not include child support. The Court found that to consider child support payments as “income” would produce a result that unfairly discriminated against disabled children of separated parents. Whatever income the respondent’s mother received as child support was not income received by the respondent, especially considering the terms of her parents’ support agreement. Because the respondent’s mother used the support payments to fund the respondent’s therapies, they were exempt from the calculation of her income in any event. The child support payments were not made on behalf of the respondent, but were properly characterized as payments made on behalf of her father, who himself May 2011

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Degennaro v. Oakville Trafalgar Memorial Hospital, 2011 ONCA 319 Areas of Law: Damages; Physical and Psychological Injuries

Under Appeal: Justice Gray

CLICK HERE TO ACCESS THE JUDGMENT

BACKGROUND

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he appellants in this case were the Oakville Trafalgar Memorial Hospital and Halton Heathcare Services. The respondents were members of the Degennaro family. The principle respondent, Mrs. Degennaro, age 40, was married with two children. She earned $33,500 per year in a customer service job. Prior to 1999, she had no significant health problems and enjoyed an active lifestyle. In 1999, her child was admitted to the appellant hospital. The respondent fell and cracked her sacrum when a fold-out bed provided by

the appellant collapsed. In 2002, the respondent was involved in an automobile accident. Shortly after that, in 2003, she developed debilitating chronic pain diagnosed as fibromyalgia. She tried to return to work after the accident, but was unsuccessful. At trial, each side adduced expert witnesses who presented divergent opinions as to whether the fibromyalgia was caused by the hospital bed incident or the motor vehicle accident. The trial judge ultimately found in favour of the respondent. He found that the appellant

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hospital breached its duty of care to the respondent by supplying a bed that was obviously dangerous, and that the sacrum injury was the cause of the respondent’s fibromyalgia. The respondent was awarded $175,000 for non-pecuniary loss, $308,100 for lost income, $793,900 for future lost income, and $1,680,000 for future costs of care. In respect of claims under the Family Law Act, the respondent’s husband was awarded $65,000 and her two sons were each awarded $25,000. The appellants appealed both liability and the award for costs of future care.

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Degennaro v. Oakville Trafalgar, (cont.) APPELLATE DECISION

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he appeal was allowed in part. The Court of Appeal found that the trial judge did not err in preferring the expert evidence of the respondent’s treating physicians over the independent medical experts. The trial judge did not reject the evidence of the independent experts out of hand, but instead based his assessment on their qualifications and the fact that the independent experts were unaware of some of the symptoms the respondent experienced prior to the automobile accident. The trial judge did not err in ruling that the respondent’s fibromyalgia, diagnosed four years after the hospital bed incident, was a foreseeable injury. He concluded that the respondent suffered debilitating pain immediately following the incident and that her subsequent development of chronic pain was a classic “thin-skulled plaintiff” situation. The Court of Appeal did, however, find that the trial judge erred by relying on the respondent’s reports in determining the damages for costs of future care. The cost of future care award was accordingly reduced by $374,640 to reflect the goods and services that the respondent had not proven as necessary.

May 2011

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Ontario Take Five May 2011  

The May 2011 Ontario edtion of OnPoint Legal Research's monthly newsletter, summarizing the top five cases from the Ontario Court of Appeal...

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