Court of Appeal Decision of the Week

Appealing a Summary Judgment

Case: Canadian Language Leadership Centre – CLLC Inc. v. 20 Eglinton Commercial Centre Inc., 2018 ONCA 604 (CanLII)

Keywords: Summary Judgment Motion; Lease Agreement; Water Leak

Synopsis:

The Appellant, Canadian Language Leadership Centre – CLLC Inc., sues its commercial landlord, 20 Eglinton Commercial Centre Inc. (the “Respondent”) for damages flowing from water leaks. These leaks originate from the building’s roof, and from a non-functioning gas line. The Respondent sought and obtained summary judgment dismissing the Appellant’s action as disclosing no genuine issue for trial.

The Court of Appeal sets the summary judgment aside, finding the Motion Judge failed to adequately consider whether the Appellant assumed the risk of damage, if sustained. The Court of Appeal finds there are “material factual contests” between the parties which produce genuine issues left unresolved by the Motion Judge.

Importance:

An essential issue in this case was whether the Appellant had insurance at the relevant time – the time the leaks caused the damage. For the Court of Appeal, the reasons of the Motion Judge inadequately examined the Appellant’s obligation to insure pursuant to the lease. Clause 9.02 provided as follows:

9.02 Tenant’s Insurance

(a) The Tenant shall, throughout the period that the Tenant is given possession of the Premises and during the entire Term, at its sole cost and expense, take out and keep in full force and effect and in the names of the Tenant, the Landlord, and the Landlord’s mortgagee (if required), as their respective interests may appear, the following insurance…

Although the Motion Judge noted this was not a case in which “intensely fact-specific matters” were at issue, the Court of Appeal noted a number of significant factual issues were left unresolved in his decision, including:

  • when the Appellant took possession;
  • when the water leaks caused damage to the Appellant; and
  • whether the premises were insurable in light of the water leaks. (See para. 6).

The Court of Appeal also took issue with what the Motion Judge did say with respect to whether the Appellant had obtained insurance:

It is not clear whether, in para. 13, the motion judge was summarizing arguments made by 20 Eglinton or making his own determinations. Given the organization of his reasons, it would appear that these were the submissions advanced by 20 Eglinton rather than the motion judge’s factual findings. (See para. 10).

The Court of Appeal found the Motions Judge failed to clearly distinguish between findings of fact, and a summary of arguments made. (See para. 12). The Court of Appeal was also critical of the Motion Judge’s failure to invoke his fact-finding powers pursuant to rr. 20.04(2.1) and (2.2) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 to resolve the factual disputes which arose on summary judgment. (See para. 13).

Finally, the Court of Appeal noted a number of extricable errors of law in the Motion Judge’s interpretation of the contract as it related to leaks associated with the gas line. (See paras. 14-19).

This decision is significant because it provides a quick summary of appeal-able issues arising from a summary judgment decision. There are lessons here for Motions Judges and litigators alike. For Motion Judges in particular, it appears the Court of Appeal requires a degree of precision in the structure of reasons, and one should carefully distinguish between what is a summary of the arguments and what is a finding.

For litigators, the Court of Appeal has provided an appellate “checklist” to consider when reviewing an unfavourable summary judgment decision, but should you require a second set of eyes, feel free to contact Supreme Advocacy LLP at emeehan@supremeadvocacy.ca. We’re always happy to take a look!

Counsel for the Appellant: Jerome Morse and David Trafford (Morse Shannon LLP, Toronto)

Counsel for the Respondent: Alanna Brogan (Stieber Berlach LLP, Toronto)

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Posted: Wednesday, July 04, 2018