THE LAWYERS WEEKLY
June 3, 2011 | 17
DIGEST
OF RECENT DECISIONS FROM CANADA’S COURTS
Michael Hamilton, LL.B. E-mail: jandm@hfx.eastlink.ca
AGENCY
DUTIES OF PRINCIPAL - Defendant
did not hold moneys raised for mock
federal election project in trust for
plaintiff.
Motion for summary judgment dismissing plaintiff’s action. Plaintiff for-profit
partnership sued defendant for breaching
an alleged oral agreement and converting
funds. Plaintiff was developed to conduct
mock elections at schools. The parties had
an informal arrangement from 2002 until
2006 under which defendant held moneys
raised by donors. In 2006 the parties
entered into a written agreement under
which plaintiff was the agent and defendant was the principal. Defendant was to
hold moneys and pay plaintiff partners
$5,200 monthly, plus expenses. $1.27 million was raised for the 2006 mock federal
election project. Defendant terminated the
contract in 2006. At the time of termination, $95,408 remained in the account.
Plaintiff alleged the parties’ oral agreement
required defendant to return unspent
moneys to them. Plaintiff further claimed
that defendant converted $10,050 in 2004
by failing to credit them for costs absorbed
by a supplier.
HELD: Motion allowed. The 2006 project was over, so plaintiff’s claim that the
funds were being held in trust for that project failed. Only one of the partners claimed
to be present for the oral agreement yet she
did not swear an affidavit, so an adverse
inference was drawn. Furthermore, principals typically did not hold property in trust
for agents and the parties’ agreement was
so detailed that such an important term
would have surely been included. The
2006 agreement released defendant from
liability for all previous acts and omissions,
so the claim for 2004 conversion failed.
Student Vote v. Learning Support
Council of Canada, [2011] O. J. No. 1883,
Ont. S.C.J., Belobaba J., Apr. 27/11.
Digest No. 3105-001 (Approx. 8 pp.)
ASSIGNMENTS
& PREFERENCES
LEGALITY OF ASSIGNMENT -
Assignment of mortgages in default to
respondent valid and supported cause of
action in solicitor’s negligence.
Appeal from a finding that a claim for
solicitor’s negligence was assigned to
respondents. In 1990 Royal Trust advanced
$21,500,000 to the lessee of an apartment
complex. The moneys were secured by
second and third mortgages which were
prepared by appellant solicitor who was a
partner at appellant law firm. In 1992,
after the mortgages went into default,
appellants advised Royal Trust of certain
problems including the insufficiency of
enforcement protection provided in the
mortgage documentation. In 1993
respondent G Inc. entered into an agree-
ment with the parent company of Royal
Trust. As part of the transaction the mort-
gages in issue were assigned to G Inc. on an
“as is” basis. In 2000 G Inc. commenced an
action for damages against appellants for
negligence and breach of contract.
Respondent numbered company claimed
damages for loss of profits. Respondents
moved for partial summary judgment
seeking confirmation of the right to pursue
the action and that all necessary plaintiffs
had been named. Appellants brought a
cross-motion to dismiss the action on the
grounds that the alleged cause of action
had not been assigned to G Inc. and that it
had not sustained any damages. With
respect to the numbered company, appel-
lants alleged that it was not an assignee
and had no status in the action at all. The
motions judge granted partial summary
judgment to respondents and dismissed
appellants’ motion.
ASSOCIATIONS, CLUBS
& NON-PROFIT
ORGANIZATIONS
BYLAWS - Alternative dispute reso-
lution bylaw of club did not apply to
plaintiff’s action for damages in def-
amation.
Motion by defendant for an order staying the action in favour of mediation and
arbitration. During January 2010 both
parties were members of a boardsailing
club, which was a non-profit federally
incorporated club. Differences of opinion
arose relating to the governance of the club
and each party became a declared candidate for election to the club’s board of directors at an election to take place at the
annual general members meeting. At that
meeting defendant was elected and plaintiff was not. Plaintiff commenced this
action in June 2010 alleging that defendant sent two emails that were defamatory
to the members of the club and claiming
damages. The club’s board of directors had
approved an alternative dispute resolution
bylaw which required that certain kinds of
disputes be determined by arbitration. The
bylaw was approved in November 2010.
HELD: Motion dismissed. The dispute
did not relate to club activities and there-
fore did not fall within the scope of the
bylaw. Regardless of whether the email
messages sent by defendant were or were
not defamatory, their distribution was not
related to windsurfing or a social event, the
only activities offered by the club. They
contained personal attacks on plaintiff
which may well have had some relation-
ship to the governance of the club and the
voting that was to take place at the annual
general meeting, but was not sufficient to
bring the parties’ dispute within the scope
of the bylaw.
CIVIL PROCEDURE
COSTS – Trial judge erred in award-
ing respondent costs of personal injury
action despite rejection of offer to settle
which was more than amount awarded.
Appeal from the costs awarded in
respondent’s personal injury action.
Respondent sued for damages arising out
of a motor vehicle accident. The accident
was a minor one, involving no significant
impact. Respondent alleged she was a passenger in the car operated by her husband
at the time of the accident. She had an
extensive clinical history, including a diagnosis of fibromyalgia. She visited her doctor 14 times after the accident, complaining
of soft tissue injuries and other problems
which she had also reported prior to the
accident. Appellant admitted responsibility for the accident and alleged that
respondent was not in the car. Long before
the trial, appellant made a formal offer to
settle the action for $22,000. Respondent
rejected the claim and made an informal
counter-offer for $173,146. The jury ultimately awarded respondent $13,486, which
was within the monetary limit of the Provincial Court. In awarding costs, the judge
did not consider appellant’s submission
that respondent should have brought her
action in Provincial Court and could have
sought to have it transferred to the Supreme
Court if it later appeared that the value of
her claim would exceed $25,000. The
judge found that it was reasonable for
respondent to have refused appellant’s
offer to settle, given that appellant had
made what amounted to allegations of
fraud against her. The judge awarded
respondent costs of the entire proceeding.
HELD: Appeal allowed. The judge erred
in failing to address appellant’s argument
that respondent’s action should have been
commenced in Provincial Court. When she
commenced her action, respondent was
aware that the accident was very minor
and that she would be entitled to no more
than very modest non-pecuniary damages
for her injuries. Because respondent lacked
a compelling reason for bringing her action
in the Supreme Court, appellant was only
required to pay her disbursements to the
date of his settlement offer. Appellant’s
offer to settle was one that ought to have
been accepted. Respondent was ordered to
pay appellant’s costs and disbursements
from the date of the offer to settle.
Gehlen v. Rana, [2011] B.C.J. No.
828, B.C.C. A., per Kirkpatrick J. A. (Hall
and Smith JJ.A. concurring), May 4/11.
Digest No. 3105-004 (Approx. 10 pp.)
DISCOVERY - Appellant did not
have to answer two questions on his
examination for discovery related to his
sexual orientation.
Appeal from a Master’s order that
appellant, a police officer, answer two
questions refused at his examination for
discovery, both related to his sexual orientation. The action arose from three arrests
of respondent by appellant. Two related
to charges for unlawful possession of
motor vehicle permits and the third for
failing to appear for fingerprinting.
Respondent alleged that on each occasion
appellant handcuffed him and took him
to the police station where appellant strip
searched respondent for his personal sexual satisfaction or gratification.
HELD: Appeal allowed. In the absence
of more particularity in the allegation, the
relevance of appellant’s sexual orientation
would be based solely on presumption and
stereotype. There were no material facts
pleaded or particulars in support of the
allegation that would make appellant’s sexual orientation relevant. The questions
were not probative of the bald allegation.
Nasr v. Ruffino, [2011] O.J. No. 1942,
Ont. S.C.J., Hainey J., Apr. 28/11. Digest
No. 3105-005 (Approx. 5 pp.)
PUBLICATION BANS – Court dismissed motion by applicant to permit
her to use pseudonym in application for
leave to appeal to Supreme Court of
Canada.
Motion for an order permitting applicant to use a pseudonym in her application for leave to appeal to the Supreme
Court of Canada and for an extension of a
publication ban. Applicant was the victim
of a hoax involving the creation of a false
Facebook profile using her photo and a
slightly modified version of her name.
The profile contained juvenile and disparaging remarks. The IP address that
created the page was traced to a customer
of respondent B Inc. Applicant and her
litigation guardian sought a production
order requiring B Inc. to disclose the
identity of the customer. They also sought
permission to use pseudonyms and a publication ban. Those requests for additional relief were dismissed. A Court of
Appeal judge ordered that applicant
could proceed with an appeal from this
decision by the use of her initials and
imposed a publication ban on the actual
words in the Facebook profile. The appeal
was ultimately dismissed, but the court
ordered the publication ban to continue
for 60 days, or such further period as the
Supreme Court of Canada might direct,
to preserve applicant’s rights of appeal.
HELD: Motion dismissed. The Court
of Appeal did not obtain jurisdiction to
make the order sought simply because it
was the common practice of the Supreme
Court of Canada to respect publication
bans. Applicant failed to provide evidence
to show that she would suffer prejudice if
the order sought was not granted. It was
apparent from the record that no publication ban had been in place between March
and June 2010, but no harm was alleged
to have resulted. The order issued by the
Court of Appeal judge did not give
another Court of Appeal judge authority
to extend the publication ban or to permit
the use of pseudonyms.
