ontario take five april 2011 edition
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The April 2011 Ontario edtion of OnPoint Legal Research's monthly newsletter, summarizing the top five cases from the Ontario Court of Appeal from the previous month.TRANSCRIPT
April 2011
Inside this Issue:
This month we have summarized what we feel are the five most interesting cases from the Ontario C.A. in March 2011.
We highlight cases from the following areas of law:
Landlord and Tenant- p.3
Family; Separation Agreements- p.5
Conflicts of Laws; Jurisdiction- p.7
Family; Maintenance and Support-p..8
Civil Procedure; Pleadings- p.10
We are pleased to announce that our first edition of Alberta Take Five, summarizing top cases from the Alta. C.A., will be coming out in May. You are currently signed up to receive the Ontario edition. If you would also like to receive the Alberta edition, please contact us to sign up.
Ontario Edition
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April 2011
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Caledonia Service Station Inc. v. Cango Inc., 2011 ONCA 184Areas of Law: Landlord and Tenant Law; Commercial Tenancies; Tenant’s Obligations Under Appeal: Justice Price
The appellant in this case operated a gas bar on premises that it leased from the respondent in Mississauga, Ontario. In the spring of 2008, the appellant discovered a failure in one of the underground fuel lines on the premises. It capped the line, discontinued its use and notified the respondent in April 2008. Subsequently, in June 2008, the appellant terminated the lease and vacated the premises, leaving behind the underground tanks and lines, including the capped line. The respondent then brought an application seeking a declaration that the appellant was the owner of the underground storage tanks and fuel lines, and an order requiring the appellant to remove them.
The application judge dismissed this request. The respondent did not appeal from this order. Rather, the respondent sought an order declaring that the lease required the appellant to repair the underground storage tanks and fuel lines. The application judge granted this order, together with an order declaring that the appellant had breached its duty of repair. The appellant appealed, arguing that its lease imposed no such repair obligation.
BACKGROUND
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Caledonia Service Station Inc. v. Cango Inc. (cont.)
The appeal was allowed. The Court
of Appeal determined that the application judge erred in finding that the duty to repair applied to the underground storage tanks and fuel lines. The application judge also had no basis to conclude that the capping of the failed fuel line constituted a breach of the duty to repair. The Court found that the lease clearly distinguished between the tenant’s trade fixtures and improvements. While the duty of care applied to improvements, it did not refer to the tenant’s trade fixtures. Having found the underground storage
tanks and fuel lines to be trade fixtures, the application judge erred in concluding that they were improvements for the purposes of the tenant’s repair obligation.
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The appellant in this case was the husband, Mr. Ward. The respondent was the wife, Mrs. Ward. The husband appealed from a decision in which the parties’ handwritten memorandum of agreement dealing with their matrimonial dispute was declared invalid. The parties married in 1988 and had two children. At the time of the marriage, the husband practiced medicine and owned significant assets. Immediately prior to the marriage, the parties signed a marriage contract, which excluded the husband’s pre-marriage property, valued at $1,600,000, from equalization in the event of separation. After the parties separated, they executed a memorandum of agreement. The memorandum indicated that the parties agreed to the essential terms and that their lawyers were to work out satisfactory language for the separation agreement. Pursuant to the memorandum, the wife was to receive child and spousal support, the husband was to pay $250,000 to the wife, and the matrimonial home and cottage would be conveyed to the husband. A week after the memorandum was signed, the husband made the payment to the wife, which she used to purchase a new home. In April 2007, the wife began a family law proceeding and, in response, the husband sought a declaration that the memorandum of agreement was a settlement and a domestic contract. The trial judge declared the memorandum of agreement invalid, concluding that, at best, it was an outline to arrive at an agreement, and that more information was required to create a binding document. In arriving at his conclusion, the trial judge took into consideration the wife’s depression and indicated that he was disturbed that the parties used the husband’s business partner rather than an independent accountant.
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Ward v. Ward, 2011 ONCA 178Areas of Law: Family Law; Domestic Contracts and Separation AgreementsUnder Appeal: Justice Matheson
BACKGROUND
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Ward v. Ward (cont).
The appeal was allowed. The Court of Appeal
determined that the trial judge was entitled to consider the issues pertinent to Family Law Act, s. 56(4)(a) and (b). However, the evidence did not support his conclusions on those issues. The memorandum of agreement was binding and the proposed separation agreement that was to follow was not a condition precedent to its binding nature. Firstly, the plain language of the preamble said that the memorandum of agreement was binding. Secondly,
the parties reached an agreement on all essential terms and the subsequent points of contention were merely incidental to or were implicit in the final agreement already reached. Thirdly, the parties’ conduct at the time supported the conclusion that they reached a final and binding settlement with the execution of the memorandum of agreement.
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The appeal was dismissed. The Court determined there was evidence before the motions judge which, if proven at trial, was capable of establishing the appellants’ participation in tortious conduct in Ontario. There was a reasonable evidentiary basis to conclude that, on a regular basis over a period of more than four years, the trustee used the Trust’s funds in the province of Ontario. The appellants failed to rebut the presumptive connection between the trustee and Ontario. The Court therefore concluded that it was open to the motions judge, on the basis of the evidence, to hold that the requisite connection between the trustee and Ontario had been established.
The appellant in this case was Appleby
Services (Bermuda) Ltd., the Bermuda-based corporate trustee of the Bermuda Long Tail Trust (the “Trust”). The respondent was Mr. Cannon. The appeal concerned the issue whether Ontario courts should assume jurisdiction over the appellant. In the Court below, the motions judge found that there was an arguable case that the Bermuda trustee participated in the commission of torts in Ontario by knowingly using the Trust’s funds in furtherance of the gifting program at issue. The motions judge concluded that the evidence of the nature and frequency of the appellant’s activity regarding the use of the Trust’s funds in Ontario spoke both to the
Cannon v. Funds for Canada Foundation, 2011 ONCA 185Areas of Law: Conflict of Laws; Jurisdiction Under Appeal: Justice Strathy
real and the substantial quality of the appellants’ connection to Ontario in this matter. .
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BACKGROUND
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April 2011
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Gagne v. Gagne, 2011 ONCA 188
Areas of Law: Family Law; Maintenance and Support; Calculation of Income Under Appeal: Justice Paisley
BACKGROUND
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The appellant in this case was the husband, Mr. Gagne. The respondent was the wife, Ms. Gagne. The parties cohabited for 19 years, 18 of which they spent married. They separated in January 2005 and divorced in September 2007. They had three children for whom the respondent had always assumed primary care-giving responsibilities. The appellant was the primary breadwinner and the respondent stayed at home. They enjoyed a very comfortable lifestyle. The parties’ separation agreement provided that the appellant was to pay undifferentiated child and spousal support of $10,000 per month for 24 months, to be reviewed after the 24-month period expired. The agreement provided for support based on the needs
of the respondent and the children as opposed to the appellant’s total declared income of $69,377, which clearly did not include all his disposable income. The support amount was intended to cover extraor-dinary expenses. A fund was established from the sale of the parties’ former matrimonial home for the children’s private school expenses and the appellant maintained an RESP account for post-secondary expenses. The matrimonial home was sold for $1,564,100 and the net proceeds divided equally. The parties waived any claim to equalization. The respondent initiated the review process in March 2008. After three unsuccessful attempts at mediation, a trial was held. The judge held that the appellant misled the
respondent about his income at the time the separation agreement was concluded and that he failed to make adequate disclosure of his income and resources in relation to the review. He made no finding about the appellant’s income and did not impute him with income, instead continuing support at the agreed-upon level, attributing $2,000 to child support and $8,000 to spousal support. He further varied the agreement to require the respondent to pay tax on the spousal amount and to allow the appellant to claim a deduction. He ordered the parties to share extraor-dinary expenses on a 50-50 basis. Finally, he awarded the respondent arrears of spousal and child support, expenses of $76,084, and costs of $52,370.
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The appeal was allowed in part. The Court of Appeal found that the judge failed to provide adequate reasons for the low child support award and the generous spousal support award. He further provided no reason for his departure from the Child Support Guidelines or for declining to consider the Spousal Support Advisory Guidelines. Based on the evidence on the record, the court concluded that the appellant’s annual income between 2003 and 2008 was in the range of $230,000. It was appropriate to attribute a higher income to him of $250,000 based on his failure to maintain the level of income he was capable of earning and his failure to make proper disclosure. Based on the Guidelines and the Advisory Guidelines, the appellant was ordered to pay $4,071 per month in child support and $4,597 per month in spousal support. No termination date was imposed because this was a long-term traditional marriage. The respondent was entitled to long-term
support to reflect her lost or diminished earning capacity. The children’s expenses were to be shared proportionally. The judgment was retroactive to September 2008 as per the terms of the separation agreement. The appellant was ordered to provide financial disclosure annually and the costs award was confirmed.
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Gagne v. Gagne, (cont.)
APPELLATE DECISIONRecords and DocumentationIf you are carrying on a business, you are required to keep adequate records that provide sufficient details and support to determine how much tax you owe. Estimates and incomplete information are not acceptable to CRA. In this regard, I refer you to CRA’s Guide RC4409 Keeping Records, which can be found on CRA’s Website.
A CompanyAnother way to do business is through a company. A company is a separate legal entity that can undertake to do business and own property in its own name. A company has its own requirements to file tax returns, pay taxes, and meet other obligations. A company pays tax at different rates than does an individual proprietor.
There may be circumstances where it is tax-efficient to do business through a company or where liability issues make incorporation a prudent choice.
There are costs associated with incorporation, however. Before making a decision, you should carefully consider the costs of incorporating and carrying on an incorporated business and compare them to the benefits that would be gained by doing so.
Professional advice is recommended to assist you in making this assessment.
CautionThis article is not intended to provide a complete summary of issues and requirements relating to individuals in business; it highlights a few preliminary considerations. The comments provided herein are based on information available at the time of writing and are general in nature. We recommend that individuals consult their own tax advisors before acting on information contained in this article, to ensure that their own specific circumstances and current tax legislation are taken into account. s
Kathryn G. Edwards, CA, is a Partner with Pagnanini Edwards Lam Chartered Accountants.
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52 The Society of Notaries Public of British Columbia Volume 19 Number 2 Summer 2010
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The appellants were all residents of Ecuador.
The respondent company was a junior mining corporation incorporated under the laws of British Columbia. The respondent carried on a mining exploration and development business in Ecuador through various subsidiaries, and its shares were listed for trading on the Toronto Stock Exchange, another named respondent. The appellants opposed a proposed mining project, and claimed they were subjected to a campaign of intimidation and harassment by security forces controlled by the mining company. The appellants commenced negligence actions in Ontario against the respondent corporation, two of its non-management directors who resided in Ontario, and the Toronto Stock Exchange. They claimed damages for the alleged human rights violations and abuses they
Piedra v. Copper Mesa Mining Corp., 2010 ONCA 191Areas of Law: Civil Litigation; Civil Procedure; Pleadings Under Appeal: Justice Campbell
suffered in connection with their opposition of the mining project. They alleged that the Stock Exchange was liable for listing the mining company and providing access to equity funding when it knew the funds could be used to harm individuals such as the appellants. They further argued that the mining company was vicariously liable for the wrongs committed by the directors, and that the directors were liable for failing to prevent the risk of harm to the appellants. The respondent sought to strike the statements of claim on grounds that they disclosed no reasonable cause of action. The motions judge found that a duty of care could not be imposed on the Stock Exchange as there was no connection between it and the appellants, since the appellants did not participate in the stock market and were not shareholders in the mining company. He also
found the directors could not be personally liable, as they were new to the company and not in management roles, and there was no connection between them and the appellants. Since the appellants’ claims against the mining company were based solely on vicarious liability, they also failed to disclose a reasonable cause of action. Accordingly, the judge concluded the statements of claim did not disclose any reasonable cause of action.
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BACKGROUND
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The appeal was dismissed. The Court of Appeal determined that the motions judge correctly concluded the appellants’ claims disclosed no reasonable cause of action. The facts pleaded against the Toronto Stock Exchange fell short of establishing that the appellants were so closely and directly affected by its impugned conduct that it ought reasonably to have had the appellants in its contemplation when listing the mining company’s shares on the stock exchange. The appellants were not investors or shareholders of the mining company and did not otherwise participate in the stock exchange. Furthermore, the Stock Exchange could not be said to have had knowledge of any serious risk that funds raised by the mining company as a result of the listing would be used to harm the appellants. With respect to the claims against the mining corporation and the directors, the appellants failed to plead the material facts necessary to anchor the imposition of private law duties of care or to establish a breach of those duties by the directors and, consequently, neither the foreseeability nor the proximity requirements were met. Furthermore, leave to amend the claims was properly denied as the appellants had already availed themselves of several opportunities to amend their pleadings, the pleadings contained radical defects, and the addition of facts would not affect the key question in dispute.
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Piedra v. Copper Mesa Mining Corp, (cont.)
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