In Panasonic Canada Inc. v. XL Specialty Insurance Company, the Court allowed the appeal in a cyber insurance coverage dispute. The Court applied a correctness standard of review, in light of Ledcor and the principle that standard form contracts whose interpretation would have precedential value in other cases should be interpreted on the that stricter standard. In this case, there was a special endorsement to the policy that covered ransomware attacks with a higher retention limit (US$3M) than the rest of the policy (US$1.5M). The Court agreed with the insurer that the endorsement applied to this ransomware claim and therefore the higher retention limit applied.

In Leendertse v. Ontario, the Court dismissed an appeal from the dismissal of a personal injury and Charter damages claim arising from a 2012 collision between the appellant cyclist and a police vehicle. The Court found no reasonable apprehension of bias from an ex parte appearance by the respondent’s lawyers before the trial judge during a scheduling disruption caused by the illness of the appellant’s lawyer. The Court also held that the trial judge’s decision to proceed was a matter of judicial discretion. On the Charter damages claim, although the Court commented that the trial judge may have erred in finding that the appellant had not be detained by the police following the accident, it declined to resolve the detention issue. Charter damages would not have been awarded even if there had been an unlawful detention, given the trial judge’s findings that the police had acted professionally and had not significantly restrained the appellant.

In Ayuba v. Erhunmwun, which involved three separate appeals that were heard together, the principal dispute revolved around whether commissions were payable to real estate brokers, The Court confirmed that the common law provides that commissions in real estate transactions are not earned by a brokerage if the transaction is not completed through no fault of the purchasers, unless the listing agreement with the brokerage clearly and explicitly provides otherwise. In this case, it was the builder, Stateview Homes, that defaulted in completing the sale of new build homes when it was put into receivership and the receiver terminated the agreements of purchase and sale. The brokerages were required to return the commissions because the transactions failed through no default or neglect of the purchasers, and the listing agreements and related agreements entered into by the various parties did not clearly provide that the brokerages could retain their commissions in those circumstances.

In Kondaj v. Crossbridge Condominium Services Ltd., the Court dismissed an appeal and cross-appeal arising from a wrongful dismissal claim by a building manager whose employment did not continue when a new building services provider took over. The Court upheld the motion judge’s interpretation of ss. 56 and 75 of the Employment Standards Act, 2000, holding that when a new building services provider decides not to continue an old provider’s employee, the new provider is responsible for the employee’s common law notice entitlements. The Court held that the Act deems the new provider to have been the employee’s employer for the purposes of termination, and that statutory and common law entitlements are intertwined. The Court also upheld the substantial indemnity costs award against the new provider and dismissed the old provider’s cross-appeal on costs.

In Clark v. Walker the Court allowed an appeal in part but dismissed the main part of the appeal in a breach of contract/breach of fiduciary duty/breach of confidence case relating to a Netflix Angry Birds TV series.

In Nanda v. Oakville (Joint Compliance Audit Committee), the Court allowed an appeal and reinstated a compliance audit committee’s decision to proceed with a campaign finance audit. The Court held that s. 88.33(1) of the Municipal Elections Act, 1996 permits any elector eligible to vote in a municipal election to apply for a compliance audit, regardless of the ward in which the elector resides. The Court held that the narrower ward-based interpretation of the application judge unduly restricted public scrutiny of municipal campaign finances and was inconsistent with the MEA‘s remedial public welfare purpose of promoting transparency and electoral integrity.

Wishing everyone an enjoyable weekend.

John Polyzogopoulos
Blaney McMurtry LLP
416.593.2953 Email

Table of Contents

Civil Decisions

Panasonic Canada Inc. v. XL Specialty Insurance Company, 2026 ONCA 633

Keywords: Contracts, Interpretation, Insurance, Cyber Insurance, Business Interruption, Civil Procedure, Appeals, Standard of Review, Correctness, Extricable Error of Law, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, 908593 Ontario Limited v. Atradius, 2023 ONCA 156, Tien Lung Taekwon-Do Club v. Lloyd’s, 2015 ABCA 46, Emond v. Trillium Mutual Insurance Company, 2026 SCC 3

Leendertse v. Ontario, 2026 ONCA 629

Keywords: Torts, Negligence, False Imprisonment, Constitutional Law, Charter Rights, Freedom from Arbitrary Detention, Charter Damages, Civil Procedure, Procedural and Natural Justice, Reasonable Apprehension of Bias, Canadian Charter of Rights and Freedoms, s. 9, Highway Traffic Act, R.S.O. 1990, c. H.8, s. 200, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134(6), Vancouver (City) v. Ward, 2010 SCC 27, Henry v. British Columbia (Attorney General), 2015 SCC 24

Ayuba v. Erhunmwun, 2026 ONCA 635

Keywords: Contracts, Interpretation, Real Property, Agreements of Purchase and Sale of Land, Assignments, Tarion Warranty, Pre-Construction Homes, Receivership, Non-Completion, Final Closing, Repayment, Deposits, Vendor Consents, Standard of Review, Standard Form Contracts, Correctness, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Lambton (County) v. Canadian Comstock Co. Ltd., [1960] S.C.R. 86, Wei v. Meng, 2024 ONSC 3975, Eo v. Chen, 2025 ONSC 6977, SS&C Technologies Canada Corp. v. The Bank of New York Mellon Corporation, 2024 ONCA 675, BG Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 S.C.R. 12, Weyerhaeuser Company Limited v. Ontario (Attorney General), 2017 ONCA 1007, Baffinland Iron Mines LP v. Tower-EBC G.P./S.E.N.C., 2023 ONCA 245, Luxor (Eastbourne) Ltd. v. Cooper, [1941] AC 108, Gladstone v. Catena, [1948] OR 182 (CA), H.W. Liebig & Co. v. Leading Investments Ltd., [1986] 1 SCR 70, Windsor Italian Village Restaurant Ltd. v. Remo Valente Real Estate Ltd. (1992), 27 RPR (2d) 221 (Ont. Gen. Div.), Bird v. Ireland (2005), 205 O.A.C. 1 (Div. Ct.), Shapiro v. 1086891 Ontario Inc. (2006), 39 R.P.R. (4th) 246 (Ont. S.C.), Green v. Shamash, 2018 ONSC 1810, Real Estate Professionals Inc. v. Castel Homes Inc. et al., 2023 ONSC 4099, Devani v. Wells, [2019] UKSC 4, Midgley Estates Ltd. v. Hand, [1952] 2 Q.B. 432 (C.A.), Leading Investments Ltd. v. New Forest Investments Ltd. (1981), 34 O.R. (2d) 175 (C.A.), Ariston Realty Corp. v. Elcarim Inc., 2014 ONCA 737, Burns Fry Ltd. v. Khurana (1985), 51 O.R. (2d) 257 (H.C.)

Kondaj v. Crossbridge Condominium Services Ltd., 2026 ONCA 636

Keywords: Contracts, Employment, Termination, Wrongful Dismissal, Successor Employers, Building Services Providers, Statutory Interpretation, Civil Procedure, Costs, Settlement Offers, Sanderson Orders, Employment Standards Act, 2000, S.O. 2000, c. 41, ss. 56, 57, 75, Labour Relations and Employment Statute Law Amendment Act, 1992, SO 1992, c 21, ss. 58-59, Labour Relations and Employment Statute Law Amendment Act, 1995, SO 1995, c 1, ss. 71-73, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 131, 133(b), Rules of Civil Procedure, rr. 49.10, 49.11, 49.13, 61.03(17), Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Mazur v. Elias Estate (2005), 75 O.R. (3d) 299 (C.A.), Housen v. Nikolaisen, 2002 SCC 33, Elsegood v. Cambridge Spring Service 2001 Ltd., 2011 ONCA 831, Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986, Parry Sound (District) Welfare Administration Board v. O.P.S.E.U., Local 324, 2003 SCC 42, Supreme General Services v. Klean U Services Inc., 2015 CanLII 58346 (ON LRB), Northwood Mortgage Ltd. v. Gensol Solutions Inc. (2005), 3 B.L.R. (4th) 322 (Ont. C.A.), Canadian Tire Corporation, Limited v. Eaton Equipment Ltd., 2024 ONCA 25, Greta Energy v. Pembina Pipeline Corporation, 2023 ONCA 9, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, Davies v. Clarington, 2009 ONCA 722, Konig v. Hobza, 2015 ONCA 885, Lawson v. Viersen, 2012 ONCA 25, Firth v. O’Brien, 2013 CanLII 7009 (Ont. S.C.), Moore v. Wienecke, 2008 ONCA 162, Universal Stainless Steel & Alloys Inc. v. J.P. Morgan Chase Bank, 2009 ONCA 801

Clark v. Walker, 2026 ONCA 634

Keywords: Contracts, Employment, Joint Ventures, Duty of Good Faith and Fair Dealing, Torts, Negligent Misrepresentation, Breach of Fiduciary Duty, Breach of Confidence, Civil Procedure, Procedural and Natural Justice, Sufficiency of Reasons, Counterclaims, Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24, F.H. v. McDougall, 2008 SCC 53, Dovbush v. Mouzitchka, 2016 ONCA 381, Tar Heel Investments Inc. v. H.L. Staebler Company Limited, 2022 ONCA 842, R. v. Walker, 2008 SCC 34, R. v. Sheppard, 2002 SCC 26, Housen v. Nikolaisen, 2002 SCC 33, Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 79 D.L.R. (4th) 97 (Ont. C.A.), UBS Securities Canada, Inc. v. Sands Brothers Canada, Ltd., 2009 ONCA 328, Oak Tree Auto Centre Inc. v. UAP Inc. (1997), 149 Nfld. & P.E.I.R. 313 (P.E.I. C.A.), Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574, Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.), Hamilton v. Open Window Bakery Ltd., 2004 SCC 9

Nanda v. Oakville (Joint Compliance Audit Committee), 2026 ONCA 638

Keywords: Municipal Law, Elections, Compliance Audits, Standing, Statutory Interpretation, Public Welfare Legislation, Municipal Elections Act, 1996, S.O. 1996, c. 32, Sched., s. 17(2), 17(3), 19(7), 88.33(1), Housen v. Nikolaisen, 2002 SCC 33, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Québec (Commission des droits de la personne et des droits de la jeunesse) v. Directrice de la protection de la jeunesse du CISSS A, 2024 SCC 43, R. v. Breault, 2023 SCC 9, Blue Mountain Resorts Limited v. Ontario (Labour), 2013 ONCA 75, Ontario (Ministry of Labour) v. Hamilton (City) (2002), 58 O.R. (3d) 37 (C.A.), Harper v. Canada (Attorney General), 2004 SCC 33, Figueroa v. Canada (Attorney General), 2003 SCC 37, R. v. Del Mastro, 2017 ONCA 711, French v. Township of Springwater, 2018 ONSC 94 (Div. Ct.)

Short Civil Decisions

Bharath-Kerr v. Kerr, 2026 ONCA 646

Keywords: Family Law, Property, Matrimonial Home, Civil Procedure, Orders, Enforcement, Striking Pleadings

Tudor v. Tudor, 2026 ONCA 640

Keywords: Family Law, Property, Matrimonial Home, Equalization of Net Family Property, Spousal Support, Family Law Act, R.S.O. 1990, c. F.3, s. 5(6)

CIVIL DECISIONS

Panasonic Canada Inc. v. XL Specialty Insurance Company, 2026 ONCA 633

[Gillese, Madsen and Pomerance JJ.A.]

Counsel:

M. B. Snowden and D. P. Barlett, for the appellant
J. A. Brown and D. Cox, for the respondent

Keywords: Contracts, Interpretation, Insurance, Cyber Insurance, Business Interruption, Civil Procedure, Appeals, Standard of Review, Correctness, Extricable Error of Law, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, 908593 Ontario Limited v. Atradius, 2023 ONCA 156, Tien Lung Taekwon-Do Club v. Lloyd’s, 2015 ABCA 46, Emond v. Trillium Mutual Insurance Company, 2026 SCC 3

facts:

Panasonic Canada Inc. (“Panasonic”) was insured by XL Specialty Insurance Company (“XL”) under its cyber risk policy (the “Base Policy”). In February 2022, Panasonic suffered a cyber security incident when malware was sent to a Panasonic employee who downloaded and opened the infected file, allowing the virus entry to Panasonic’s system network. The attackers downloaded confidential and sensitive files. They then posted a message asking Panasonic to contact them, warning that data had been encrypted and implying a ransom was required to release the balance. Panasonic did not respond to the demand. Panasonic hired several companies and individuals to assist it in responding to the breach, repaired its network, purchased replacement laptops to prevent reinfection, and paid significant amounts in employee overtime required to manage the fallout from the attack.

Panasonic sought indemnity under the Base Policy provisions governing first party coverages, third party liability coverages, and data breach response and crisis management coverage under its insurance policy with XL. The Base Policy was subject to a retention, which functions as a deductible, of US$1.5M. The parties agreed that the Panasonic Claim was for approximately US$2 million. Panasonic did not seek coverage under Endorsement #023, the “Ransomware Sublimit Endorsement”, which amended the Base Policy to address coverage for cyber-extortion reimbursement and ransomware events. Coverage for each was subject to a retention of US$3M.

The parties disagreed over which retention applied to the Claim. Panasonic maintained that it had established its Claim under the Base Policy and was therefore subject to the US$1.5M retention. XL maintained that the US$3M retention applied because Endorsement #023 governs ransomware events and the Claim was connected to a ransomware event. Panasonic sought a declaration that its Claim was subject to the US$1.5M retention. The application judge found in Panasonic’s favour, declaring the applicable retention was US$1.5M, and ordered XL to indemnify Panasonic the agreed-on amount that exceeded that retention. XL appealed.

issues:

Does endorsement #023 apply to Panasonic’s insurance claim?

holding:

Appeal allowed.

reasoning:

Yes.

Standard of Review is Correctness
The Court first addressed the standard of review. In Ledcor, the Supreme Court held that the correctness standard of review applies to contract interpretation where two factors are met: (1) the interpretation of a standard form contract is of precedential value, and (2) there is no meaningful factual matrix specific to the parties that assists in the interpretive process.

On the first factor, XL satisfied its burden to prove the policy was a standard form contract. XL copyrighted both the Base Policy and Endorsement #023 and used those forms throughout the United States and Canada, and a comparison of Endorsement #023 with Endorsement #027 of the Panasonic North America policy confirmed they are identical. The Court then addressed whether the interpretation carries precedential value, pointing to the mandate of appellate courts to ensure consistency in the law, a mandate best served by reviewing standard form contract interpretations for correctness. Consistency, the Court stressed, is especially important for standard form insurance contracts, where both insurers and policyholders benefit from certainty and predictability. Because this was the first case to interpret Endorsement #023, applying a correctness standard would help ensure that future courts do not arrive at different results on the same or similar language.

On the second factor, the Court considered whether anything in the factual matrix specific to these parties bore on the interpretation process and concluded there was not. Citing Ledcor, the Court acknowledged that surrounding circumstances such as the purpose of the contract, the nature of the relationship it creates, and the market or industry in which it operates, remain relevant even under a correctness standard. However, those circumstances play a lesser role, tend not to be specific to the particular parties, and are usually the same for everyone who may be party to a given standard form contract. Cybersecurity breach events and self-insured retentions are not unique to these parties, further underscoring the need for consistent interpretation of Endorsement #023. The second Ledcor factor therefore also supported a correctness standard.

Accordingly, the Court applied the correctness standard in reviewing the application judge’s interpretation of the policy provisions.

The Court found that Endorsement #023 and its US$3M retention applied to Panasonic’s insurance claim. Additionally, the application judge erred in law by interpreting clause 5 of Endorsement #023 without considering its full terms within the context of the Base Policy as a whole.

In Emond v. Trillium Mutual Insurance Company, the Supreme Court reiterated that endorsements must be read in conjunction with the policy. Endorsement #023 stated: “THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY.” Endorsement #023 goes on to explain that it “changes” the Base Policy by amending it.
Clause 1 addressed the overriding purpose stating that the “Endorsement Schedule is added to the Base Policy. The Endorsement Schedule showed that coverage for cyber-extortion reimbursement and ransomware events had been changed, making each subject to a US$3M retention. Clause 2 deleted the portion of the Base Policy that defined First Party Coverage for Cyber-Extortion and Ransomware and replaced it with the following: The Insurer will reimburse the Insured for cyber-extortion expenses in excess of the applicable retention that the Insured incurs directly resulting from and in response to a cyber-extortion threat. Clause 3 deleted the definition of Cyber-extortion Expenses in the Base Policy and replaced it with the following:

Cyber-extortion Threat
Any threat communication from a third party or rogue employee related in any way to an actual or potential threat to start or continue to:
(1) Disrupt the network to impair business operations of the Insured Company; (2) Alter, damage, or destroy data stored on the network; (3) Use the network to transmit malware to third parties; (4)Deface the website; (5) Access, release, or otherwise misuse data, including personally identifiable information, protected health information, or confidential business information, stored or previously stored on the network; (6) Refuse to return data stolen from the network; (7) Prevent access to the network or data by using encryption and withholding the decryption key; or (8) Disclose any fact relating to the foregoing to the public or to any third party.

Clause 5 of Endorsement #023 contained new definitions of “Threat Communication” and “Ransomware Event Loss” and stated that the definitions shall apply “Solely for the purposes of this Endorsement”. The application judge interpreted the words “Solely for the purposes of this Endorsement” in clause 5 as meaning that the definitions in clause 5 apply only to claims brought under Endorsement #023. The Court concluded that this interpretation was incorrect for three reasons.

First, the application judge interpreted clause 5 without considering the clear and unambiguous meaning of clauses 1, 2, 3, and 4 of Endorsement #023. Clause 1 changed coverage for cyber-extortion reimbursement and ransomware events from that which is in the Base Policy to that which is in the Endorsement Schedule. Clauses 2 through 4 changed the definitions in the Base Policy relating to cyber-extortion, ransomware, and cyber-extortion threat. Read together, it was clear that Endorsement #023 governed all claims for cyber-extortion and ransomware events.

Second, the definition of “Threat Communication” in clause 5 included a threat made in connection with the removal of a threat against the insured, and “Ransomware Event Loss” is defined to include “Any and all loss… in connection with, or in any way involving a cyber-extortion threat”. That reference to cyber-extortion threat required that clause 5 be read in conjunction with clause 4, where “cyber-extortion threat” was defined as “any threat communication from a third party … related in any way to an actual or potential threat to start or continue to” perform actions from an enumerated list.

The attackers’ communication to Panasonic fell within the meaning of threat communication and ransomware event loss in clause 5. It also fell within a number of the cyber-extortion threats listed in clause 4. Accordingly, while Panasonic did not pay a ransom nor claim for costs directly incurred in relation to the ransom demand, its Claim was for ransomware event loss. Since the Claim fell within the meaning of Ransomware Event Loss in Endorsement #023, it was governed by Endorsement #023.
Third, the application judge erred in failing to consider clause 15 of Endorsement #023. Clause 15 states that “To the extent any provision contained in this Endorsement is deemed inconsistent with any other provision of this Policy, the provisions of this Endorsement shall control”. In short, clause 15 dictates that the provisions of Endorsement #023 govern all claims arising from a cyber-extortion threat or ransomware event loss, even if they conflict with provisions in the Base Policy.

Consequently, because the Claim was a ransomware event loss within the definition of clause 5, it was subject to a retention of US$3M.

Leendertse v. Ontario, 2026 ONCA 629

[Paciocco, Sossin, and Madsen JJ.A.]

Counsel:

T. Liu, for the appellant
S.G. Ross and S. Marston, for the respondent

Keywords: Torts, Negligence, False Imprisonment, Constitutional Law, Charter Rights, Freedom from Arbitrary Detention, Charter Damages, Civil Procedure, Procedural and Natural Justice, Reasonable Apprehension of Bias, Canadian Charter of Rights and Freedoms, s. 9, Highway Traffic Act, R.S.O. 1990, c. H.8, s. 200, Courts of Justice Act, R.S.O. 1990, c. C.43, s. 134(6), Vancouver (City) v. Ward, 2010 SCC 27, Henry v. British Columbia (Attorney General), 2015 SCC 24

facts:

In 2012, a passing police vehicle’s mirror struck the appellant while he was riding his bicycle. He brought a negligence action claiming damages for personal injuries and sought Charter damages for detention-related breaches he alleged occurred during the police investigation in the immediate aftermath of the collision.

A two-week trial was scheduled to begin on February 10, 2020. It was adjourned to February 18, 2020, because the appellant’s lawyer had fallen ill, probably as a result of the COVID-19 virus. On February 11, 2020, the respondent’s lawyers appeared before the trial judge ex parte to advise her that the matter would not be proceeding that day. A conference call with the appellant’s lawyer followed on February 12, 2020.

The trial proceeded on February 18, 2020, after the appellant’s lawyer advised the trial judge that she was ready to proceed despite still being unwell. The COVID-19 lockdown then delayed continuation of the trial. Before the trial resumed, the appellant sought a mistrial on the basis that the delay and his lawyer’s illness had impeded his proper and fair representation. The mistrial motion was denied, and the trial was completed in 2022. The trial judge dismissed the action.

issues:

1. Did a reasonable apprehension of bias arise from the ex parte meeting and the trial judge’s decision to proceed, and did the illness of the appellant’s lawyer render the trial unfair?

2. Did the trial judge err in finding that the appellant was not detained during the post-accident investigation, and should Charter damages be awarded?

holding:

Appeal dismissed.

reasoning:

1. No.

The Court found no basis on the appeal record or the fresh evidence admitted on consent for a reasonable apprehension of bias or any unfairness in the trial. The Court held that the appearance by the respondent’s lawyers before the trial judge was a simple matter of case management directed by the pretrial judge. The trial judge had attended the courthouse from out of town and deserved to be informed at the earliest opportunity that the trial would not be proceeding. The available evidence was that the respondent’s lawyers fairly conveyed the material information that the appellant’s lawyer had already shared with the trial coordinator. The Court also noted that arrangements were undertaken for a subsequent conference call directly with the appellant’s lawyer, and there was no need, other than courtesy, for an agent to be present to advise the court.

The Court also found no basis for concluding that the trial judge acted unfairly in dealing with the illness of the appellant’s lawyer. The record disclosed that whenever the appellant’s lawyer said she was too unwell to proceed, the trial judge adjourned the proceeding. On February 17, 2020, the appellant’s lawyer notified opposing counsel that she was ready to proceed. Despite still being unwell, she told the trial judge the next morning she was feeling much better. The Court acknowledged that other judges may have suggested a further adjournment. However, it held that the decision whether to proceed was a matter of judicial discretion, particularly given that the matter had already taken approximately eight years to get to trial and was the only matter on the trial list.

The issue of whether the illness of the appellant’s lawyer impaired her performance had been litigated during the mistrial application, and the trial judge found that impairment had not been established. The decision to deny the mistrial had not been appealed.

2. No.

The Court held that the trial judge may have erred in failing to find that the appellant was detained when the police officer told him he could be arrested for leaving the scene if he did not remain during the investigation, given s. 200 of the Highway Traffic Act. However, the Court held that it was not in the interests of justice to resolve this detention issue because it was not fully argued before the Court and because resolving the issue would have no effect on the outcome.

The Court would not have awarded Charter damages (the sole remedy sought by the appellant) if it had decided the detention issue. Charter damages are to be awarded only if they fulfil one or more of the related functions of compensation, vindication of rights, and deterrence of future breaches. The appellant provided no evidence of having sustained a loss requiring compensation. The trial judge, having had the benefit of the testimony of the officers whom she found to be credible, concluded that the police had acted professionally and in the usual and ordinary course of their employment and had not subjected the appellant to any significant physical or psychological restraint.

The Court held that there was accordingly no basis for awarding damages to vindicate the appellant’s Charter rights or to deter the police. The Court also held that it would not order a new trial given that any error relating to whether the appellant was detained would not have caused a substantial wrong or miscarriage of justice under s. 134(6) of the Courts of Justice Act.

Ayuba v. Erhunmwun, 2026 ONCA 635

[Tulloch C.J.O, Rouleau and Lauwers JJ.A]

Counsel:

E. Hanxhari, for the appellant (COA-25-CV-0912)/respondent (COA-25-CV-1493), IBE, and for the appellant (COA-25-CV-1330), BCO
A. Jarvis, for the appellants (COA-25-CV-1493), Hometon Inc. operating as Hometon Group Realty Point and CHCC
J.S. Klein, for the respondents (COA-25-CV-0912), MA and AAA
M. W. Mulholland and T. Thirukkumar, for the respondent (COA-25-CV-1330), HS
D. Miller and J. Cook, for the respondents (COA-25-CV-1330), Hometon Inc. operating as Hometon Group Realty Point and CHCC

Keywords:Contracts, Interpretation, Real Property, Agreements of Purchase and Sale of Land, Assignments, Tarion Warranty, Pre-Construction Homes, Receivership, Non-Completion, Final Closing, Repayment, Deposits, Vendor Consents, Standard of Review, Standard Form Contracts, Correctness, Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, Lambton (County) v. Canadian Comstock Co. Ltd., [1960] S.C.R. 86, Wei v. Meng, 2024 ONSC 3975, Eo v. Chen, 2025 ONSC 6977, SS&C Technologies Canada Corp. v. The Bank of New York Mellon Corporation, 2024 ONCA 675, BG Checo International Ltd. v. British Columbia Hydro and Power Authority, [1993] 1 S.C.R. 12, Weyerhaeuser Company Limited v. Ontario (Attorney General), 2017 ONCA 1007, Baffinland Iron Mines LP v. Tower-EBC G.P./S.E.N.C., 2023 ONCA 245, Luxor (Eastbourne) Ltd. v. Cooper, [1941] AC 108, Gladstone v. Catena, [1948] OR 182 (CA), H.W. Liebig & Co. v. Leading Investments Ltd., [1986] 1 SCR 70, Windsor Italian Village Restaurant Ltd. v. Remo Valente Real Estate Ltd. (1992), 27 RPR (2d) 221 (Ont. Gen. Div.), Bird v. Ireland (2005), 205 O.A.C. 1 (Div. Ct.), Shapiro v. 1086891 Ontario Inc. (2006), 39 R.P.R. (4th) 246 (Ont. S.C.), Green v. Shamash, 2018 ONSC 1810, Real Estate Professionals Inc. v. Castel Homes Inc. et al., 2023 ONSC 4099, Devani v. Wells, [2019] UKSC 4, Midgley Estates Ltd. v. Hand, [1952] 2 Q.B. 432 (C.A.), Leading Investments Ltd. v. New Forest Investments Ltd. (1981), 34 O.R. (2d) 175 (C.A.), Ariston Realty Corp. v. Elcarim Inc., 2014 ONCA 737, Burns Fry Ltd. v. Khurana (1985), 51 O.R. (2d) 257 (H.C.)

facts:

The Court addressed three appeals that arose from two failed transactions involving the assignment of agreements to purchase pre-construction homes. In each case, the original purchaser had entered into an agreement of purchase and sale with Stateview Homes (Hampton Heights) Inc. (“Stateview”), the builder and vendor of the homes, and later agreed to assign the right to complete that purchase to someone else. In the first transaction, IBE assigned her purchase rights to MA and AAA. In the second, BCO assigned her purchase rights to HS.

The MA/AAA and HS (the “assignees”) paid substantial amounts to IBE and BCO (the “assignors”) under their respective assignment agreements. The assignors, in turn, paid commissions to Hometon Inc. (“Hometon”), the real estate brokerage they had retained to arrange the assignments. IBE and BCO each agreed to purchase a pre-construction home from the homebuilder, Stateview, and each paid deposits totaling $80,000. Both retained a realtor, CHCC, and her brokerage, Hometon, signing an Ontario Real Estate Association (“OREA”) Form 200 listing agreement providing for a commission of 4.5% of the home’s total sale price. The assignment agreements used OREA Form 145 and contemplated payments at signing, on the “assignment closing date”, and on the later “final closing”, when the assignees would take title from Stateview. Article 17 of both assignment agreements addressed builder default:

17. DEFAULT BY SELLER:The Assignee and Assignor acknowledge and agree that if this Assignment Agreement is not completed due to the default of the seller for the Agreement of Purchase and Sale [Schedule C] that is the subject of this Assignment, the Assignor shall not be liable for any expenses, losses or damages incurred by the Assignee and this Assignment Agreement shall become null and void and all monies paid by the Assignee under this Assignment Agreement shall be returned to the Assignee in full without interest.

Stateview, the assignors, and the assignees later executed vendor consents. Article 6 contained a broad reciprocal indemnity for breaches. The consents also recognized the separate financial arrangements between assignor and assignee. They provided that the assignment agreements formed part of the entire agreement between those parties. BCO’s consent expressly provided that it would prevail in the event of a conflict; IBE’s did not contain that precedence language. In BCO’s transaction, an amendment and the vendor consent also required HS to pay an additional $50,000 deposit to Stateview. The assignees made substantial payments before final closing. Hometon received commissions from both assignors.

Before either home reached final closing. Stateview entered receivership and the underlying agreements of purchase and sale were terminated by the receiver. The assignees never took title. The Tarion Warranty Corporation later indemnified MA/AAA  and HS for their deposits made to Stateview. The assignees sued the assignors for repayment. The litigation produced two decisions of the Superior Court. In short, both judges held the assignors were required to repay the assignees but reached different conclusions about Hometon’s entitlement to retain its commissions. Justice Charney granted judgment to MA/AAA and required Hometon to repay IBE’s commission. Justice Lack held BCO liable to HS, including for the $50,000 Stateview deposit, but held that Hometon was entitled to retain its commission.

issues:

1. Must the assignors repay the assignees?
2. Is BCO liable for the deposit?
3. Must Hometon repay the commissions?

holding:

Appeals by IBE, Hometon and CHCC dismissed. Appeal by BCO allowed in part.

reasoning:

1. Yes.

Article 17 Applied
Article 17 was engaged where the assignment agreement “is not completed due to the default” of Stateview. Both conditions were met. “Completion” in this context meant full performance of the transaction contemplated by the agreement. Here, neither title nor the final assignment payments changed hands because Stateview’s receiver terminated the underlying agreements of purchase and sale before final closing. The assignment agreements were not completed, and their non-completion resulted from Stateview’s default. Article 17 accordingly required the assignors to return the monies paid to them by the assignees under the assignment agreements.

The Vendor Consents Did Not Displace Article 17
The assignors argued that Article 6 of the later vendor consents superseded Article 17 of the assignment agreements. They submitted that Article 6 required the assignees to indemnify them for liabilities arising from Stateview’s default after the execution of the vendor consents, including the liability created by Article 17.

The Court disagreed. The assignment agreements and vendor consents formed part of the same overall transaction and should be read harmoniously: SS&C Technologies Canada Corp. v. The Bank of New York Mellon Corporation. The vendor consents preserved rather than extinguished the separate financial bargain between assignor and assignee. Articles 6 and 17 addressed different risks. Article 17 specifically allocated the risk that Stateview itself would default and prevent completion of the assignment. Article 6, read in the context of the vendor consent as a whole, allocated responsibility between assignor and assignee for breaches of the purchaser’s obligations under the underlying agreement of purchase and sale. The specific allocation of Stateview-default risk in Article 17 was not displaced by the general indemnity in Article 6: BG Checo International Ltd. v. British Columbia Hydro and Power Authority. Articles 6 and 17 were capable of simultaneous performance and addressed different sources of default.

2. No.

Article 17 provided that “all monies paid by the Assignee under this Assignment Agreement shall be returned to the Assignee”. Read in context, that repayment obligation concerned monies received by the assignor as part of the assignor-assignee exchange. It did not make the assignor responsible for returning a separate deposit payable to Stateview. A party cannot “return” funds it never received beneficially. The amendment and vendor consent required HS to pay the additional $50,000 deposit to Stateview. He delivered the funds to BCO’s lawyer in trust for that purpose. BCO did not receive the money beneficially and had no contractual right to retain it. Article 17 does not clearly impose liability on her for funds payable to, and held for the benefit of, Stateview. Justice Lack thus erred in including that $50,000 in BCO’s liability. Once that amount is excluded, the Tarion credit must also be adjusted.

3. Yes.

Hometon relied on the provision requiring payment of a 4.5% commission for a “valid offer” and submitted that its commissions were earned when the assignments were accepted.

The Court found that interpretation gave insufficient effect to the remainder of the commission clause. The same clause expressly provided that the seller must pay the commission even where the contemplated transaction is not completed if the non-completion is owing or attributable to the seller’s default or neglect. Read as a whole, that language identified the circumstances in which commission remained payable despite non-completion. It concerned entitlement to the commission, not merely the date on which an already unconditional entitlement became payable: Luxor (Eastbourne) Ltd. v. Cooper. The Court noted that even though this was settled law, real estate brokerages persisted in pursuing commission claims based on the at-best ambiguous language of standard form contracts they use. It was time for this practice to end.

Where the contemplated transaction failed through no default or neglect of the seller, the brokerage is not entitled to retain the commission unless the agreement clearly provides otherwise. These listing agreements did not. The transactions failed because Stateview defaulted and the underlying agreements of purchase and sale were terminated. Neither assignor was responsible for that non-completion. The “valid offer” language did not change that conclusion. It could not be read in isolation from the express provision governing non-completion. The listing agreements contemplated that an accepted transaction might nevertheless fail and expressly preserved the brokerage’s entitlement where that failure resulted from its client’s default or neglect. They contain no comparable provision assigning to the client the risk that the builder will default before the transaction is completed. This interpretation accords with the established law governing brokerage commissions. In Luxor, the House of Lords held that, absent sufficiently clear contractual language to the contrary, commission is not payable where the contemplated transaction fails through no fault of the client. The Supreme Court of Canada later confirmed its continuing authority in H.W. Liebig & Co. v. Leading Investments Ltd. Courts have ruled that similar “valid offer” language is not clear enough to meet the test in Luxor.

The same principle has continued to be applied in the real estate context. The contractual language must make clear that commission is payable notwithstanding the failure of the contemplated transaction through no fault of the client. That approach promotes commercial certainty. The parties are free to agree that a brokerage will earn its commission despite the later failure of the transaction, but an obligation of that kind must emerge clearly from the agreement. It should not be inferred from language that can equally be read consistently with the ordinary rule that commission depends upon completion of the transaction the brokerage was retained to facilitate: Devani v. Wells.

The commercial structure of these agreements reinforced that interpretation. Hometon’s commission was calculated as a percentage of the full sale price, rather than merely the assignment mark-up. The full purchase prices were never paid because the transactions failed before final closing. That structure did not support an interpretation requiring the clients to pay a percentage commission on a purchase price that was never fully paid. The assignment agreements governed the relationship between assignor and assignee; the listing agreements governed the relationship between the assignors and Hometon. The former could authorize release of funds at an intermediate stage without altering the conditions under which the commissions were ultimately earned under the latter. The agreements should be read harmoniously in the absence of clear language producing a different result. A payment made before the contractual contingency is resolved may have to be returned if the entitlement to retain it never crystallizes.

Hometon’s performance of substantial work likewise did not create an independent entitlement to the commissions. The parties agreed to a contingent commission, not compensation calculated according to the time or effort expended. The brokerage, therefore, assumed the ordinary risk that the contemplated transaction might fail for reasons not attributable to its client: Société en commandite Place Mullins v. Services immobiliers Diane Bisson inc.

Kondaj v. Crossbridge Condominium Services Ltd., 2026 ONCA 636

[Paciocco, Thorburn, and Dawe JJ.A.]

Counsel:

A. Kassam and G. McGinnis, for the appellant/respondent by way of cross-appeal Duka Property Management Inc.
I.D. Hurley, for the respondent/respondent by way of cross-appeal GK
M.R. Vella and C. DeBruin, for the respondent/appellant by way of cross-appeal Crossbridge Condominium Services Ltd.

Keywords:Contracts, Employment, Termination, Wrongful Dismissal, Successor Employers, Building Services Providers, Statutory Interpretation, Civil Procedure, Costs, Settlement Offers, Sanderson Orders, Employment Standards Act, 2000, S.O. 2000, c. 41, ss. 56, 57, 75, Labour Relations and Employment Statute Law Amendment Act, 1992, SO 1992, c 21, ss. 58-59, Labour Relations and Employment Statute Law Amendment Act, 1995, SO 1995, c 1, ss. 71-73, Courts of Justice Act, R.S.O. 1990, c. C.43, ss. 131, 133(b), Rules of Civil Procedure, rr. 49.10, 49.11, 49.13, 61.03(17), Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Mazur v. Elias Estate (2005), 75 O.R. (3d) 299 (C.A.), Housen v. Nikolaisen, 2002 SCC 33, Elsegood v. Cambridge Spring Service 2001 Ltd., 2011 ONCA 831, Machtinger v. HOJ Industries Ltd., [1992] 1 S.C.R. 986, Parry Sound (District) Welfare Administration Board v. O.P.S.E.U., Local 324, 2003 SCC 42, Supreme General Services v. Klean U Services Inc., 2015 CanLII 58346 (ON LRB), Northwood Mortgage Ltd. v. Gensol Solutions Inc. (2005), 3 B.L.R. (4th) 322 (Ont. C.A.), Canadian Tire Corporation, Limited v. Eaton Equipment Ltd., 2024 ONCA 25, Greta Energy v. Pembina Pipeline Corporation, 2023 ONCA 9, Hamilton v. Open Window Bakery Ltd., 2004 SCC 9, Davies v. Clarington, 2009 ONCA 722, Konig v. Hobza, 2015 ONCA 885, Lawson v. Viersen, 2012 ONCA 25, Firth v. O’Brien, 2013 CanLII 7009 (Ont. S.C.), Moore v. Wienecke, 2008 ONCA 162, Universal Stainless Steel & Alloys Inc. v. J.P. Morgan Chase Bank, 2009 ONCA 801

facts:

The respondent was employed by Crossbridge Condominium Services Ltd. (“Crossbridge”) as a building manager for the SoHo Hotel & Residences (“SoHo”). After SoHo retendered its property management contract, it replaced Crossbridge with the appellant, Duka Property Management Inc. (“Duka”). Upon taking over management of SoHo, the appellant chose not to continue the respondent’s employment. Crossbridge also chose not to reassign him.

The appellant paid the respondent his statutory termination entitlements pursuant to ss. 75(2) and 57 of the Employment Standards Act, 2000 (the “Act”), enrolled him in its benefits program, and issued him a T4. However, neither the appellant nor Crossbridge paid the respondent any common law notice entitlements. Each took the position that the other was responsible.

The respondent brought a motion for summary judgment seeking damages in lieu of common law reasonable notice. The motion judge held that the appellant, as the incoming building services provider, was legally obligated to pay the respondent’s common law reasonable notice entitlements. The motion judge also granted summary judgment against the appellant in the amount of $78,925 (the equivalent of 10 months’ common law notice), as well as damages in lieu of lost benefits. The respondent received partial indemnity costs up to the date of his settlement offers and substantial indemnity costs thereafter. The appellant appealed the merits and the costs award. Crossbridge cross-appealed on costs.

issues:

1. Did the motion judge err in his interpretation of the Act?

a. Was the motion judge’s decision consistent with the intention of the legislature?
b. Was the motion judge’s order consistent with the scheme of the Act?
c. Was the motion judge’s conclusion consistent with the wording of ss. 56 and 75 of the Act?

2. Did the motion judge err in awarding substantial indemnity costs against the appellant?
3. Did the motion judge err in declining to award Crossbridge its costs against the appellant?

holding:

Appeal and cross-appeal dismissed.

reasoning:

1. No.

The Court held that the motion judge’s interpretation of the Act was correct, applying the principles of statutory interpretation set out in Rizzo & Rizzo Shoes Ltd. (Re).

a. Yes

On legislative intent, the motion judge correctly found that the appellant’s interpretation would incentivize new providers to terminate the old provider’s employees. The new provider could accordingly avoid common law notice obligations by simply paying the lower statutory termination and severance amounts. The Court also held that such an arrangement could be exploited to harm competitors by forcing the old provider to bear common law notice costs even when the contract was lost through no fault of its own. The Court found that assigning common law notice liability to the new provider did not defeat the legislature’s intention in the 1995 amendments to offer employers more flexibility. The 1995 amendments removed the obligation on new providers to offer employment to the predecessor’s employees and eliminated the requirement to pay lost wages and benefits. This flexibility existed regardless of who must pay common law reasonable notice entitlements.

b. Yes

On the scheme of the Act, the Court held that employees’ statutory and common law entitlements are intertwined, relying on Elsegood v. Cambridge Spring Service (2001) Ltd. and Machtinger v. HOJ Industries Ltd. The Court held that s. 75(3) of the Act deemed the appellant to have been the respondent’s employer from the commencement of his employment for the purposes of termination. The Court also noted that s. 77 of the Act provides sufficient information to enable prospective new providers to assess their common law obligations before taking on a building services provider contract.

c. Yes

On the wording of the Act, the Court held that s. 56 operates to terminate an employee’s employment in law so that the employee may claim common law wrongful dismissal damages. Since s. 75(2) requires the new provider to comply with Part XV of the Act, which includes s. 56(1), “as if the new provider had terminated and severed the employee’s employment”, the appellant was responsible for paying the respondent’s common law entitlements.

2. No.

The Court held that r. 49.11 of the Rules of Civil Procedure applies only where defendants are alleged to be jointly or jointly and severally liable and rights of contribution or indemnity may exist between them. Since only either the appellant or Crossbridge could be liable for the respondent’s common law entitlements, the condition precedent to the application of r. 49.11 was not met. The respondent’s settlement offers therefore attracted the favourable cost consequences of r. 49.10(1). The Court also held that the motion judge properly exercised his discretion pursuant to r. 49.13 in adopting a holistic approach to the costs award. The motion judge had found that the respondent’s ultimate entitlement to damages was clear, his settlement offers were reasonable, and he had been “held hostage” to a dispute between the defendants.

3. No.

The Court held that although the appellant’s failure to file a crossclaim against Crossbridge was not dispositive, the motion judge made no error of law in declining to award Crossbridge its costs against the appellant. The Court based this on the novelty of the issue, Crossbridge’s failure to request a Sanderson order at first instance, and Crossbridge’s importance to the underlying litigation irrespective of the appellant’s conduct.

Clark v. Walker, 2026 ONCA 634

[George, Copeland and Gomery JJ.A.]

Counsel:

C. Davies and M. Anderson, for the appellants/responding parties
M. Edwards and I. Harris, for the respondents/moving parties

Keywords: Contracts, Employment, Joint Ventures, Duty of Good Faith and Fair Dealing, Torts, Negligent Misrepresentation, Breach of Fiduciary Duty, Breach of Confidence, Civil Procedure, Procedural and Natural Justice, Sufficiency of Reasons, Counterclaims, Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24, F.H. v. McDougall, 2008 SCC 53, Dovbush v. Mouzitchka, 2016 ONCA 381, Tar Heel Investments Inc. v. H.L. Staebler Company Limited, 2022 ONCA 842, R. v. Walker, 2008 SCC 34, R. v. Sheppard, 2002 SCC 26, Housen v. Nikolaisen, 2002 SCC 33, Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 79 D.L.R. (4th) 97 (Ont. C.A.), UBS Securities Canada, Inc. v. Sands Brothers Canada, Ltd., 2009 ONCA 328, Oak Tree Auto Centre Inc. v. UAP Inc. (1997), 149 Nfld. & P.E.I.R. 313 (P.E.I. C.A.), Lac Minerals Ltd. v. International Corona Resources Ltd., [1989] 2 S.C.R. 574, Rodaro v. Royal Bank of Canada (2002), 59 O.R. (3d) 74 (C.A.), Hamilton v. Open Window Bakery Ltd., 2004 SCC 9

facts:

The appellant D.C developed a process that made two-dimensional images appear three dimensional. Although the basic concept was not new, his process was unique in its use of gaming engine technology and its potential to be used on a commercial scale. D.C sought access to a government research grant to advance the project, but his studio, the appellant Moonray Studios Inc., did not meet the eligibility requirements. He turned to the respondent Yowza Animation Corp., which did meet the criteria for government funding. The respondent H.W is Yowza’s chief executive officer.

The parties agreed that Yowza would receive the grant funds and that it would be used to carry out a research and development project. The plan was for D.C and Moonray to develop the technology, later branded as “Toonlight”, and for H.W and Yowza to use their existing goodwill to market Toonlight to prospective clients. Yowza ultimately secured the grant funding, which was used to develop Toonlight and create samples for sales pitches.

D.C signed an employment contract with Yowza. Part of the grant funding was used to pay D.C and Moonray’s employees, who also signed employment contracts with Yowza but worked out of Moonray’s studio in Hamilton.

Toonlight was pitched to prospective clients which ultimately led to a contract with Cake Entertainment to develop an animated television series for Netflix based on the game Angry Birds. Around that time, the relationship between Yowza and D.C began to deteriorate over the continued employment of the Moonray team in Hamilton and the sharing of profits from the Angry Birds contract. D.C resigned from Yowza, and the parties went their separate ways. Yowza produced the series without D.C or the Moonray team in Hamilton, and retained all revenue from the production.

The appellants then commenced the underlying action, seeking damages and/or disgorgement for breach of confidence, breach of fiduciary duty, breach of a joint venture agreement, and breach of the duty of good faith and fair dealing (the “main action”). The respondents brought a counterclaim seeking damages for negligent misrepresentation in tort and contract.

The trial judge dismissed the appellants’ action and granted judgment to the respondents on their counterclaim.

issues:

1. Did the trial judge err by failing to give reasons that permit meaningful appellate review?

2. Did the trial judge err by applying the wrong legal test in determining whether the parties had entered into a joint venture or contemplated joint venture?

3. Did the trial judge err by failing to consider whether that contemplated joint venture gave rise to fiduciary duties or duties of confidence owed by the respondents to the appellants?

4. Did the trial judge err by finding that the appellants suffered no damages and failed to mitigate their losses?

5. Did the trial judge err by granting a judgment on the counterclaim based on a cause of action that had not been pleaded?

holding:

Appeal allowed in part.

reasoning:

1. No.

Reasons for judgment are meant to justify and explain the result, tell the losing party why they lost, foster public confidence in the administration of justice, and permit effective appellate review: F.H. v. McDougall. Brevity alone does not make reasons insufficient; they are adequate where they address the live issues and key arguments. The Court distinguished this from instances such as that in Tar Heel Investments Inc. v. H.L. Staebler Company Limited, where the trial judge’s reasons were inadequate because they failed to address several pleaded causes of action. In that case, the concern was not that the reasons were brief, but that they provided no reasons at all on material issues. In this case, contrastingly, the trial judge addressed the appellants’ issues and explained the basis for his conclusions. His reasons, though brief, disclosed a clear path to the result and dealt with the material issues. The fact that he did not refer to every argument did not render the reasons inadequate.

Further, the Court held that inadequate reasons did not create a free-standing right of appeal. The duty to give reasons must be assessed in relation to the substance of the appeal: R. v. Walker; R. v. Sheppard. Viewed in that context, the Court found the trial judge’s reasons were adequate: they addressed the material issues, explained the basis for his conclusions, and permitted meaningful appellate review.

2. No.

Whether a joint venture exists is a question of mixed fact and law and is therefore reviewable on a deferential standard; it will not be overturned absent palpable and overriding error: Housen v. Nikolaisen. Because a joint venture is contractual in nature, its existence requires proof that the parties intended to create legally binding obligations and agreed on all essential terms: Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991) (“Bawitko”); UBS Securities Canada, Inc. v. Sands Brothers Canada, Ltd. Where essential terms are absent, unsettled, or yet to be decided, there is no enforceable agreement to pursue a joint venture: Bawitko. When determining whether the parties entered into a joint venture, courts consider indicia such as joint ownership, mutual control, and the sharing of profits and losses.

Ultimately, the Court held that the record supported the trial judge’s observation that the appellants appeared to have abandoned their joint venture argument at trial. In their closing submissions, the appellants framed their claim in equitable terms. Although they referenced an oral contract, their submissions described the alleged joint venture as something the parties were “pursuing”, “plan[ning]”, “discussing”, “working towards” and “contemplat[ing]”. This language indeed suggested that the joint venture argument had been abandoned. The record did not contain evidence from which the trial judge could have concluded that the parties had agreed on the essential terms required to create an enforceable joint venture. As the trial judge found, the parties’ discussions never advanced beyond a broad proposal to divide profits equally. They did not agree on the essential terms necessary to create a joint venture. At most, they had an “agreement to agree”, which, without more, is not an enforceable contract: Bawitko.

The Court also rejected the appellants’ submission that, despite the absence of a formal agreement, the alleged joint venture was “operationalized”, finding that such a submission would dispense with the need for agreement on essential terms whenever parties act as though an arrangement was reached, and was not supported by the jurisprudence.

3. No.

a. Breach of Fiduciary Duty

An ad hoc fiduciary relationship requires proof of three elements: i) an undertaking by the alleged fiduciary to act in the beneficiary’s best interests; ii) a defined person or class of persons vulnerable to the fiduciary’s control (the beneficiary or beneficiaries); and iii) a legal or substantial practical interest of the beneficiary that may be adversely affected by the fiduciary’s exercise of discretion or control: Alberta v. Elder Advocates of Alberta Society.

Accordingly, the Court found that there was no basis to interfere with the trial judge’s factual findings underlying his conclusion that no fiduciary relationship existed. Rather, that was the only conclusion available on this record. The evidence clearly established that the parties had an employment relationship. It also established that Moonray and Yowza were commercial entities pursuing a mutually beneficial commercial arrangement. In those circumstances, no special duties arose. Nor was there evidence capable of supporting a finding that the respondents had undertaken to act in the appellants’ best interests.

The Court rejected the appellants’ submission that they were vulnerable because Ms. W and Yowza “controlled the customer contracts and submitted bids”. These were arm’s-length commercial parties capable of protecting their own interests. The Court clarified that Lac Minerals Ltd. v. International Corona Resources Ltd. stood for the proposition that arm’s length negotiations toward a mutually beneficial commercial contract do not, by themselves, give rise to a fiduciary relationship. Thus, the Court did not find that the requisite form of vulnerability to establish a fiduciary duty was present in this case. Nor was there evidence of an undertaking to act in the appellants’ best interests or of any exercise of discretionary power to their detriment. There was no basis to find that Yowza exercised discretion by “keeping contracts” or excluding D.C from an “agreement to share profits”. The Angry Birds contract was secured only after D.C resigned. As the trial judge found, there was “nothing approaching” an undertaking to act in D.C’s or Moonray’s best interests.

b. Duty of Confidence

On this point, the Court found that the trial judge identified the governing test for breach of confidence, properly applied it to the evidence, and reasonably concluded that the respondents had not misused confidential information.

4. No.

At trial, the appellants relied on a “Justification of Damages” report to establish their damages. Ultimately, the expert who had done the calculations did not testify, and the report was not admitted as expert evidence. The Court held that the trial judge was entitled to reach the conclusion that the underlying assumptions of the report had not been proven.

Further, the remaining evidence showed that Angry Birds was produced at a loss of $480,953, which Yowza’s internal accountant said understated the actual loss. In these circumstances, the appellants could not be entitled to the $1,562,610 they claimed. If there had been a 50/50 profit-sharing agreement, they would have been required to share in any losses.

Regarding the mitigation of damages, after leaving Yowza, D.C took no meaningful steps to commercialize the process. Apart from trademarking the “Toonlight” name, he used the process only to seek and obtain a second government grant. Accordingly, the Court agreed with the trial judge that D.C failed to mitigate his alleged damages.

5. Yes.

The Court agreed with the appellants’ submission that the trial judge imposed liability on a cause of action that was not pleaded. It was fundamental that lawsuits be decided within the boundaries of the pleadings: Rodaro v. Royal Bank of Canada (2002). The trial judge erred in allowing the counterclaim for breach of D.C’s employment contract on the basis that he “kept or took with him whatever work product on the process that had been achieved while he and the Hamilton based staff were Yowza employees”. The only pleaded basis for breach of contract was D.C’s alleged misrepresentation, which the trial judge rejected. The respondents did not plead that D.C took anything from Yowza. Accordingly, liability could therefore not be imposed on that basis.

The Court further agreed that in the absence of evidence identifying what was taken, there was no basis to find that D.C took anything from Yowza, let alone anything of value.

Due to the foregoing, the Court allowed this ground of appeal and dismissed the counterclaim.

Nanda v. Oakville (Joint Compliance Audit Committee), 2026 ONCA 638

[Paciocco, Thorburn, and George JJ.A]

Counsel:

D.S. Reiter and J.G. Pappas, for the appellant
R. Agarwal and A. Haighton, for the respondent

Keywords: Municipal Law, Elections, Compliance Audits, Standing, Statutory Interpretation, Public Welfare Legislation, Municipal Elections Act, 1996, S.O. 1996, c. 32, Sched., s. 17(2), 17(3), 19(7), 88.33(1), Housen v. Nikolaisen, 2002 SCC 33, Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27, Québec (Commission des droits de la personne et des droits de la jeunesse) v. Directrice de la protection de la jeunesse du CISSS A, 2024 SCC 43, R. v. Breault, 2023 SCC 9, Blue Mountain Resorts Limited v. Ontario (Labour), 2013 ONCA 75, Ontario (Ministry of Labour) v. Hamilton (City) (2002), 58 O.R. (3d) 37 (C.A.), Harper v. Canada (Attorney General), 2004 SCC 33, Figueroa v. Canada (Attorney General), 2003 SCC 37, R. v. Del Mastro, 2017 ONCA 711, French v. Township of Springwater, 2018 ONSC 94 (Div. Ct.)

facts:

The respondent successfully ran for Oakville Ward 7 Councillor in the October 2022 municipal election. Mr. R., a resident of Oakville but not of Ward 7, applied to the Joint Compliance Audit Committee for the Town of Oakville (the “Committee”) to conduct a compliance audit of the respondent’s campaign. He alleged six campaign finance violations.

Since Mr. R. was not an elector in Ward 7, the respondent objected that the Committee lacked jurisdiction because he did not have standing under s. 88.33(1) of the Municipal Elections Act, 1996 (the “MEA”) to bring the complaint. The Committee rejected this objection, finding that any elector within the municipality could apply for a compliance audit, and ordered an audit. The Superior Court appeal judge set aside the Committee’s decision. The appeal judge held that an elector had standing to seek an audit only in respect of a candidate for whom the elector was entitled to vote; that is, a candidate running in the elector’s ward. The Committee appealed.

issues:

Did the appeal judge err in holding that s. 88.33(1) of the MEA limits standing to apply for a compliance audit to electors in the ward in which the candidate ran?

holding:

Appeal allowed.

reasoning:

The standard of review on a question of statutory interpretation was correctness: Housen v. Nikolaisen. The Court derived statutory meaning by considering text, context, and purpose together, as set out in Rizzo & Rizzo Shoes Ltd. (Re).

The Court held that s. 88.33(1) of the MEA permits any elector eligible to vote in the municipal election to apply for a compliance audit, regardless of the ward in which the elector resides. Section 88.33(1) permits two plausible textual interpretations as to who could invoke the compliance audit process. The issue was therefore not which interpretation was textually available, but which better accorded with the MEA‘s scheme and advanced its public welfare objective of promoting confidence in municipal elections.

The Court held that the appeal judge’s narrow interpretation unduly restricted scrutiny of municipal campaign finances. The MEA is remedial public welfare legislation that must be interpreted generously and in a way that furthers its public welfare purpose of promoting confidence in the electoral process. The Court noted that the compliance audit regime served two public interest functions: ensuring that campaign finances are open to public scrutiny and permitting electors to seek independent third-party review of a candidate’s campaign finances.

The Court rejected the respondent’s submission that the broader interpretation would invite “officious intermeddlers” with no legitimate interest. Instead, the Court held that the text of s. 88.33(1) already addressed the risk of the abuse of process by such individuals because the Committee must be satisfied there were objectively reasonable grounds to believe the campaign finance rules had been breached. Since the Committee based its decision to direct an audit on compelling and credible information, this was a meaningful statutory safeguard. The Court also held that the broader interpretation did not extend standing to every elector in Ontario; it merely permitted an elector entitled to vote in a municipal election to apply for a compliance audit of a candidate in that same election.

The Court also noted that councillors elected from individual wards sit as members of a single council and exercise authority over matters affecting the municipality as a whole. An elector in one ward therefore had a legitimate interest in the campaign finances of candidates running in another ward within the same municipality.

The Court held that the appeal judge mistakenly relied on s. 19(7) of the MEA, which spoke to where an elector may vote in wards. The Court read the provision in the context of the broader scheme to capture its objective of promoting transparency, accountability, and public confidence in municipal elections. The Court found the better anchor for interpreting s. 88.33(1) in s. 17(2) (to which the appeal judge did not refer). The Committee’s interpretation fit better with a purposive reading of the MEA’s text, context, and purpose by giving meaningful effect to the phrase “entitled to vote in an election” without importing restrictions on ward that the legislation did not express.

The Court reinstated the Committee’s decision to proceed with the audit.

SHORT CIVIL DECISIONS

Bharath-Kerr v. Kerr, 2026 ONCA 646

[Miller, Trotter, and Copeland JJ.A.]

Counsel:

B. Bharath-Kerr, acting in person
A. Cohen, for the responding party/respondent

Keywords: Family Law, Property, Matrimonial Home, Civil Procedure, Orders, Enforcement, Striking Pleadings

Tudor v. Tudor, 2026 ONCA 640

[Paciocco, Sossin, and Madsen JJ.A.]

Counsel:

C. Tudor, acting in person
L. Tudor, acting in person

Keywords: Family Law, Property, Matrimonial Home, Equalization of Net Family Property, Spousal Support, Family Law Act, R.S.O. 1990, c. F.3, s. 5(6)