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May 2013

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INSIDE THIS ISSUE: Featured Cases: 03 Real Estate; Condominiums; Lien Registration - With 2 Counsel Comments 07 Class Proceedings; Fixing Costs 09 International Law; Hague Convention; Service 11 Medical Malpractice; Negligence; Causation; Brain Injury Prior to Birth 13 Jurisdiction; Assessment Officer; Contingency Fee Agreements - With 1 Counsel Comment


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York Condominium Corporation No. 82 v. Bujold, 2013 ONCA 209 Areas of Law: Real Estate; Condominiums; Lien Registration CLICK HERE TO ACCESS THE JUDGMENT

~Separate lien arises upon each default~

BACKGROUND

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he Appellant is a condominium corporation (the “Corporation”) in which the Respondent, Ms. Bujold, owns a condominium unit. Beginning in December 31, 2006, arrears began to accumulate each month owed by Ms. Bujold for failure to pay common area expenses. On June 22, 2007, the Corporation served a Notice of Lien on Ms. Bujold stating the amount of arrears owing to that date. On September 25, 2007, a Certificate of Lien was registered against Ms. Bujold’s unit for the total amount of arrears owed by Ms. Bujold. In 2009, the Corporation served Ms. Bujold with a Notice of Sale and commenced proceedings to gain possession of her unit. During the proceedings, a motion for summary judgment brought by the Corporation was dismissed on the basis that the lien was registered three days after the three-month period for registration had expired.

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York Condominium Corporation No. 82 v. Bujold, (cont.) APPELLATE DECISION

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n appeal, the Corporation argued that its lien had not expired and that the Corporation had complied with the notice requirement in s. 85(4) of the Condominium Act, 1998, S.O. 1998, c. 19 (the “Act”). The Court of Appeal agreed that the motion judge had erred in finding that the Corporation had no valid lien against Ms. Bujold. Pursuant to s. 85(1) of the Act, a lien arises on the date of default, not the date that notice was provided. Further, on its interpretation of the Act, the Court of Appeal found that the plural use of “liens” in s. 85(3)(a) indicates that a corporation can have multiple liens against a single unit. Therefore a new lien arises upon each default. The common area expenses were due at the start of each month. Since Ms. Bujold defaulted on each of these payments, a new lien arose upon each default. Registration consolidates only those liens that arise within the three-month period prior to registration and therefore late registration did not invalidate all lien rights of the Corporation; it merely invalidated those liens that had expired. Despite this conclusion, the appeal was dismissed on the basis that each lien required proper notice and the Corporation had only provided notice once, on June 22, 2007. This was not sufficient to cover the subsequent liens that arose between that date and the date of registration on September 25, 2007 as no notice was provided for these. May 2013

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COUNSEL COMMENTS, Cont. York Condominium Corp No.82 v. Marie Lillian Bujold, 2013 ONCA 209 Counsel Comments provided by Derrick Fulton, Counsel for the Appellant, York Condominium Corporation No.82

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he Bujold decision The second reason this represents the first decision is important is time the Courts have been that it highlights that asked to consider one of corporations and counsel the most important areas must be careful when serving under the Condominium the required Notice of Lien Act, that being the under the Act. Before a mechanism available corporation can proceed to Derrick Fulton to the Corporation in register its certificate of lien securing and collecting one must, in accordance common element arrears from unit with s.85 (4), provide the unit owner owners (section 85). The Court of with at least 10 days notice of the Appeal decision is important for two corporations intention to register its main reasons. First, it has confirmed certificate. With clarification from the that a Condominium Corporation has Court of Appeal, however, it is now a lien against a unit upon each and clear that such notice must relate to a every default; therefore, a new lien lien that has certainly not expired. Now arises every month if the unit owner corporations are going to need to be fails to pay their common element fees. careful to ensure that their notice to the Once a certificate of lien is registered, unit owner does not relate to a lien that such registration will only secure those has expired or a lien that may expire liens that arose within the three month prior to the registration of the certificate period prior to registration but will also of lien. But most importantly, the secured those liens arising subsequent Court of Appeal appears to now suggest to the registration. The condominium that the corporation must now provide industry has been operating under notice of each default before registering this interpretation in any event, the certificate of lien. Corporations notwithstanding the lack of treatment to and counsel must implement a practice this provision by the courts. that ensures this compliance otherwise

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COUNSEL COMMENTS, Cont. you may be faced with the argument that your lien may not have expired but your certificate of lien may be invalid. The Court of Appeal noted that having to provide notice to the unit owner of each default should not cause hardship to the corporation; and finally, once the registration is achieved in a “timely fashion”, s.85(3)(b) makes it clear that all future defaults are secured and no further notice of defaults are required.”

Counsel Comments provided by Sidney Klotz, Counsel for the Respondent, Marie Lillian Bujold

“T

his decision may be of interest to other counsel, as the case appears to set out the lien rights under the Condominium Act will be strictly enforced against the condo if they do not follow the timelines for registration and correct figures in their written notice of default. The condominium corporation does not lose their rights civilly for any default, only their statutory right to register the lien and obtain the rights as a mortgagee.”

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Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City), 2013 ONCA 254 Areas of Law: Class Proceedings; Fixing Costs ~Costs of appeal should be awarded to successful appellant and not be contingent on outcome of re-hearing~

CLICK HERE TO ACCESS THE JUDGMENT

BACKGROUND

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he Appellants are three charitable organizations that ran activities, such as bingo and lotteries, as part of its fundraising campaign. The municipalities in which these activities were held had imposed licensing and administrative fees on the Appellants that far exceeded their costs of regulation. The Appellants initiated class action proceedings alleging that the fees were essentially a tax imposed without legislative authority and thus ultra vires the municipalities. The proposed class consisted of persons who had paid these fees to the municipalities between 1990 and the present. On the certification motion, the respondent municipalities successfully argued that

the limitation period began to run on the date fees were paid and the motions judge reduced the scope of the class to reflect those not time-barred. The Appellants had the limitations ruling set aside by the Divisional Court and the matter was remitted back to the motions judge for a determination on certification. However, the Divisional Court refused to award costs to the Appellants despite their success on the limitations issue. The Divisional Court felt that success was divided as it had not obtained an order certifying the class proceeding, and therefore ordered that costs of the appeal were to be determined by the motions judge as part of the overall costs of certification.

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Amyotrophic Lateral Sclerosis Society of Essex v. Windsor (City), (cont.) APPELLATE DECISION

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he Appellants succeeded and were granted costs. Costs matters are discretionary, but in this case the Divisional Court was in the best position to award the Appellants their costs of the appeal. Even though the certification issue was remitted back to the motions judge, the Appellants were substantially successful on their appeal as they effectively set aside the motion judge’s decision to limit the scope of the class. The general rule, which the Divisional Court erred in failing to apply, is when an appeal is granted and the matter is sent back for a re-hearing, the costs of the appeal should be awarded to the successful appellant and not be contingent on the outcome of the re-hearing. The Court of Appeal considered that the appeal was a discrete

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procedural step in the proceeding where costs are distinguishable from those on the certification motion. Further, one of the goals of the Class Proceedings Act, 1992, S.O. 1992, c. 6 is to promote access to justice, and delaying recovery of costs until the determination of the certification motion works against this goal. The Court of Appeal also interpreted s. 131(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 to imply that the court hearing a step in a proceeding will fix those costs. Based on all of these considerations, the Court of Appeal concluded that the Divisional Court was in the best position to make a costs award, and granted an award of costs of the appeals and the motions for leave to appeal to the Appellants.


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Khan Resources Inc. v. Atomredmetzoloto JSC, 2013 ONCA 189 Areas of Law: International Law; Hague Convention; Service CLICK HERE TO ACCESS THE JUDGMENT

~The Hague Convention is complete code for service in contracting state~

BACKGROUND

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he Appellants are an Ontario corporation and its subsidiaries, and the Respondents are companies in Russia. The Appellants, Respondents, and other companies entered into a joint venture to develop a uranium mining property in Mongolia. In August 2010, the Appellants sought to commence proceedings against the Respondents in Ontario based on allegations that the Russian government, acting through the Respondents, were attempting to deprive the Appellants of their interest in the Mongolian property. The Appellants sought to serve the Respondents in accordance with the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, 15 November 1965, Can. T.S. 1989 No. 2 (entered into force 1 May 1989) (the

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“Hague Convention”), but service was refused by the Russian government based on reasons of sovereignty and national security. Under the Hague Convention, the Appellants had a right to appeal the Russian government in Russia, but instead chose to bring a motion in Ontario to dispose of or validate service under the Ontario Rules of Civil Procedure. The master granted the motion ordering that service was validated, which was subsequently set aside by the Superior Court judge on appeal on the basis that the Hague Convention, “incorporated into Ontario law through rule 17.05(3), is a complete code for service on parties in contracting states”. The Appellants sought to restore the motion judge’s decision on this appeal.

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Khan Resources Inc. v. Atomredmetzoloto JSC, (cont.) APPELLATE DECISION

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he Appellants attempted to argue that the Hague Convention was a prima facie means of service in a contracting state, but that it did not do away with the court’s discretion to substitute, dispense with or validate service under the Ontario Rules of Civil Procedure. However, the Court of Appeal could not agree with this approach. The purpose of the Hague Convention is not only to give notice of a legal proceeding to a defendant in another jurisdiction, but also to establish a uniform system

of notice amongst contracting states. Rule 17.05(3) was added to the Rules of Civil Procedure the same year that Canada became a party to the Hague Convention, providing the method of service to parties outside Ontario in contracting states to the Hague Convention. The Court of Appeal held that the language of Rule 17.05(3) was mandatory and that it clearly intended to provide a complete code of service in contracting states. Further, the Court of Appeal noted that this interpretation was consistent with Canada’s international legal obligations.

OnPoint Success Story: Trial 911 Our client requested research assistance on substantive breach of trust issues in advance of trial. As the trial proceeded, we provided additional research on evidentiary, damages and costs issues when they arose. Because we were requested in advance to remain available that week, we were able to provide answers to questions posed after a day of trial before the next day’s hearing began. While our client was arguing in court, we were able to work behind the scenes to prepare the trial brief on all issues raised during trial. Our client succeeded in obtaining both a punitive damages award and special costs for his client.

May 2013

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Goodwin v. Olupona, 2013 ONCA 259 Areas of Law: Medical Malpractice; Negligence; Causation; Brain Injury Prior to Birth CLICK HERE TO ACCESS THE JUDGMENT

~Direct evidence of causation not necessary~

BACKGROUND

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s. Goodwin was pregnant with twins and had been admitted to the Orillia Soldier’s Memorial Hospital (the “Hospital”) for an elective induction. The day began as expected with Ms. Goodwin receiving an ultrasound at 4:30pm and having labour induced at 4:45pm. Dr. Olupona, the physician in charge of her delivery, noted from the ultrasound that one of the twins, Adam, was in the footling breech position, which meant that an epidural was required for vaginal delivery of Adam. He placed an order on her chart to receive an epidural if needed or at the patient’s request, and returned to his office three minutes away from the Hospital. Nurse Burhanpurkar was the nurse primarily responsibility for Ms. Goodwin. Ms. Goodwin went into active labour shortly after 5:00pm. Twice, once at 6:00pm and again 3045 minutes later, she asked an unidentified nurse for an epidural but did not receive one. Once in active labour, Nurse Burhanpurkar did not continuously monitor the twins’ heart rates using an electronic monitor, but only used a device that measures the foetal heart rate (“FHR”) at a single point in time, measuring their FHRs only twice, at 4:45pm and 6:00pm. At 7:00pm Nurse Thibedeau took over from Nurse Burhanpurkar where she was improperly advised that both twins were in the headdown position. Nurse Thibedeau prepared an epidural but by this time the anaesthetist was busy with another patient in the O.R. and could not administer the epidural. Ms. Goodwin’s family physician checked up on her and came to the Hospital to perform a vaginal delivery of Jessica without an epidural. Following Jessica’s delivery, Dr. Olupona was advised that Ms. Goodwin had not been given an epidural and he rushed to the Hospital, confirmed that Adam was still in the breech position, and performed an emergency C-section. The case room that was available was poorly lit with the anaesthesia machine not functioning well, so the C-section had to be delayed in order to properly prepare the O.R. When Adam was finally delivered, he required resuscitation and was subsequently diagnosed with spastic quadriplegia. A few days into the trial, the Plaintiffs settled with Dr. Olopuna and the remaining jury trial proceeded as a cross-claim by Dr. Olopuna against Nurse Burhanpurkar and the Hospital. The jury concluded that Nurse Burhanpurkar was 75 percent liable and the Hospital was 25 percent liable for Adam’s injuries. Nurse Burhanpurkar and the Hospital appealed the decision focusing on issues of causation and the allegation that the trial judge had improperly charged the jury.

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Goodwin v. Olupona, (cont.) APPELLATE DECISION

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he appeal was dismissed. The negligence of Nurse Burhanpurkar and the Hospital were established. The fact that the Respondents had not called expert evidence on the requisite standard of care was acceptable to the Court of Appeal on the principle that the jury could determine the standard of care as it was within their ordinary knowledge and did not require expert evidence. However, the main issue in contention was causation. Two highly qualified experts provided competing theories as to the cause of Adam’s brain injury. The Appellant’s expert theorized that hypoxic events causing his injury (lack of oxygen to Adam’s brain) only took place in the last 20-30 minutes prior to his birth and thus continuous FHR monitoring would not have revealed any problems that would have changed the course of action. The Respondent’s expert, on the other hand, theorized that minor hypoxic events took place time to time from the point

May 2013

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Ms. Goodwin had gone into labour, which would have been revealed with continuous FHR monitoring alerting health care providers to deliver Adam at a much earlier time, likely prior to receiving his brain injury. It was the latter expert opinion that was accepted by the jury. The Appellants argued that the theory was insufficient evidence of causation as it did not directly prove a causal link. The Court of Appeal concluded that direct evidence of causation is not necessary to establish a causal link. It was reasonable for the jury to infer, based on the expert evidence, that but for the negligence of Nurse Burhanpurkar and the Hospital, Adam’s brain injury would likely not have occurred. The Court of Appeal added that “accepting the appellant’s argument would effectively immunize nurses in similar circumstances from liability, despite an acknowledgement departure from the standard of care.”


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Cookish v. Paul Lee Associates Professional Corporation, 2013 ONCA 278 Areas of Law: Jurisdiction; Assessment Officer; Contingency Fee Agreements ~Disputes that concern nature, validity and terms of retainer agreement should be dealt with by judge and not assessment officer~

BACKGROUND

M

s. Cookish had retained the law firm, Paul Lee Associates Professional Corporation (the “Appellants”), to pursue a claim against her insurer for denial of longterm disability benefits. She signed an agreement which the Appellants referred to as their “standard contingency fee retainer agreement” for such claims. The claim was settled at mediation for a total of $329,000, including costs and disbursements, and Ms. Cookish received a net payment of $237,120. Ms. Cookish disputed the amount of the account nearly a year later and sought an assessment. On the belief that Ms. Cookish only disputed the quantum of the account,

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CLICK HERE TO ACCESS THE JUDGMENT

the Appellants agreed to an order directing the assessment. However, prior to the scheduled assessment, counsel retained by the Appellants raised the argument that Ms. Cookish also disputed the validity of the retainer agreement and therefore the assessment officer did not have jurisdiction to deal with the matter. This was based on the argument of Ms. Cookish that she was entitled to a quantum meruit assessment of that account whereas a quantum meruit assessment is not applicable for contingency fee agreements. Ms. Cookish refused to have the matter sent back to the Superior Court of Justice. The assessment officer adjourned the hearing but the Appellants were unsuccessful in having the original consent order directing assessment set aside. The Appellants appealed.

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Cookish v. Paul Lee Associates Professional Corporation, (cont.) APPELLATE DECISION

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ithout going so far as to conclude that an assessment officer never has jurisdiction to determine a dispute concerning a retainer agreement in general, the Court of Appeal held that having a judge determine such issues was the preferred procedure. The general principle was that disputes relating to the nature, validity or effect of a retainer agreement ought to be resolved by judges and there may be even stronger arguments for such in the case of contingency fee agreements. This led to the previous orders being set aside. The motions judge, who was asked to set aside the consent order, had failed to recognize that the issue on the retainer itself had to be settled before quantum could be determined and the consent order made by Justice Corrick was set aside in the interests of justice as she may have well made a different order had she known that the retainer was in dispute.

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May 2013

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COUNSEL COMMENTS, Cont. Cookish v. Paul Lee Professional Corporation, 2013 ONCA 194 Comments provided by Tanya Pagliaroli, Counsel for the Appellant, Paul Lee Associates Professional Corporation

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he issue before the mechanism provided for Court of Appeal in the Act. The Court in Cookish v. Paul Lee of Appeal accepted that Professional Corporation the legislature intended was whether an assessment as general rule that officer has jurisdiction to questions regarding the assess a solicitor’s account validity and effect of Tanya Pagliaroli where there is a dispute retainer agreement (and regarding the nature of the retainer any issue other that the amount owing agreement. In the context of an under the agreement) should be decided assessment obtained on requisition by a judge or court and not by an from the registrar pursuant to s.3 of assessment officer. However, the Court the Solicitors Act, the jurisprudence of Appeal stopped short of deciding an answers that question clearly and in assessment officer does not have or may the negative. The question before not be given that jurisdiction. the Court of Appeal was whether that same principle applies to an Rather, the Court of Appeal expressly assessment ordered on reference by a contemplated that in rare cases, it may be judge. appropriate for a judge, when referring a solicitor’s bill for assessment pursuant The appellant argued there to the reference powers under Rule 54 was no principled reason to of the Rules of Civil Procedure, to refer draw a distinction between the a dispute other than quantum of the jurisdiction of an assessment retainer to the assessment officer. No officer on assessment obtained guidance was given, however, as to when by requisition and an assessment it would be appropriate to do so. officer’s jurisdiction on an assessment obtained through any other The practical effect of the decision should

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COUNSEL COMMENTS, Cont. be that decisions regarding the nature or validity of the retainer will continue to be decided by judges and not assessment officers. Counsel taking the position that there is such a dispute should raise the issue before the judge hearing the application for assessment as it is that judge who is charged with determining whether the referral to the assessment officer of a dispute dealing with other an issue other than quantum is appropriate. A second issue before the Court of Appeal was whether an assessment officer has jurisdiction to assess a solicitor’s account based on a contingency fee agreement. Again, the Court of Appeal stopped short of deciding there was no such jurisdiction but decided as a general rule, questions involving the nature, validity or effect of a contingency fee agreement should be resolved by judges. In so deciding, the Court of Appeal noted that an assessment officer is deprived of the authority to determine whether a contingency fee agreement is fair and reasonable, and therefore enforceable, by virtue of s.28.1(10) of the Act. Flowing from that was the Court’s observation that … “there would be little point in delegating to an assessment officer, by means of the reference power, the authority to determine disputes involving the nature of the agreement itself or the scope of its terms (except to the extent they may relate to quantum alone), as these disputes would most often go to issues of reasonableness and fairness in any event.” Again, the practical effect of the Court of Appeal’s decision should be that when a contingency fee agreement is involved, a judge, and not an assessment officer, will determine issues regarding its validity and enforceability. ”

May 2013

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