Siegel's Family Court Calendar

“At common law, minority shareholders in corporations had very little protection in the face of conduct by the majority (or by directors controlled by the majority) that negatively affected either the corporation itself or their interests as minority shareholders.  This handicap was due to two well-entrenched common law principles of corporate law: the notion of a “corporate personality” and the “indoor management rule”.  Both of these principles can be traced back to a decision of now almost mythical stature – that of Vice-Chancellor Wigram in Foss v. Harbottle (1843), 67 E.R.189, 2 Hare 461 (Eng. V.C.).

In law, a corporation is a legal entity distinct from its shareholders.  It followed from this that shareholders were precluded from bringing their own action in respect of a wrong done to the corporation.  Except as modified by the derivative action, the oppression remedy, and winding-up proceedings, this remains a governing principle in Canadian corporate law: see Hercules Management Ltd. v. Ernst & Young, 1997 CanLII 345 (SCC), [1997] 2 S.C.R. 165, at para. 59; Meditrust Healthcare Inc. v. Shoppers Drug Mart (2002), 2002 CanLII 41710 (ON CA), 61 O.R. (3d) 786 (C.A.).  As Laskin J.A. put it, in Meditrust, at paras. 12-14:

The rule in Foss v. Harbottle provides simply that a shareholder of a corporation — even a controlling shareholder or the sole shareholder — does not have a personal cause of action for a wrong done to the corporation. The rule respects a basic principle of corporate law: a corporation has a legal existence separate from that of its shareholders. See Salomon v. Salomon & Co. (1896), [1897] A.C. 22, 66 L.J. Ch. 35 (U.K. H.L.) A shareholder cannot be sued for the liabilities of the corporation and, equally, a shareholder cannot sue for the losses suffered by the corporation.

The rule in Foss v. Harbottle also avoids multiple lawsuits. Indeed, without the rule, a shareholder would always be able to sue for harm to the corporation because any harm to the corporation indirectly harms the shareholders.

Foss v. Harbottle was decided nearly 160 years ago but its continuing validity in Canada has recently been affirmed by the Supreme Court of Canada in Hercules Management Ltd. v. Ernst & Young, 1997 CanLII 345 (SCC), [1997] 2 S.C.R. 165 (S.C.C.) and by this court in Martin v. Goldfarb (1998), 1998 CanLII 4150 (ON CA), 163 D.L.R. (4th) 639 (Ont. C.A.).

The companion indoor management rule has also played a significant role in restricting minority shareholders’ rights to redress.  At common law, if an act that was claimed to be wrongful could be ratified by the majority at a general meeting of shareholders, neither the corporation nor an individual shareholder could sue to redress the wrong.  The rationale for this was that courts were reluctant to interfere in the internal management affairs of the corporation.

It took over a century for legislative reforms to be put in place to temper the restrictive effect of these principles on minority shareholder rights.  In the latter part of the 20^th century, however, the two statutory forms of relief that are at the heart of this appeal – the derivative action and the oppression remedy – were created for this purpose.  It is noteworthy that they approached the problem in two different, although potentially overlapping, ways.

The derivative action was designed to counteract the impact of Foss v. Harbottle by providing a “complainant” – broadly defined to include more than minority shareholders – with the right to apply to the court for leave to bring an action “in the name of or on behalf of a corporation … for the purpose of prosecuting, defending or discontinuing the action on behalf of the body corporate”: Business Corporations Act, R.S.O. 1990, c. B.16, s. 246 (“OBCA”).  It is an action for “corporate” relief, in the sense that the goal is to recover for wrongs done to the company itself.  As Professor Welling has colourfully put it in his text, Corporate Law in Canada: The Governing Principles, 3^rd ed. (Mudgeeraba: Scribblers Publishing, 2006), at p. 509, “[a] statutory representative action is the minority shareholder’s sword to the majority’s twin shields of corporate personality and majority rule.”

The oppression remedy, on the other hand, is designed to counteract the impact of Foss v. Harbottle by providing a “complainant” – the same definition – with the right to apply to the court, without obtaining leave, in order to recover for wrongs done to the individual complainant by the company or as a result of the affairs of the company being conducted in a manner that is oppressive or unfairly prejudicial to or that unfairly disregards the interests of the complainant.  The oppression remedy is a personal claim: Ford Motor Co. of Canada v. Ontario (Municipal Employees Retirement Board) (2006), 2006 CanLII 15 (ON CA), 79 O.R. (3d) 81 (C.A.), at para. 112, leave to appeal refused, [2006] S.C.C.A. No. 77; Hoet v. Vogel, [1995] B.C.J. No. 621 (S.C.), at paras. 18-19.

These two forms of redress frequently intersect, as might be expected.  A wrongful act may be harmful to both the corporation and the personal interests of a complainant and, as a result, there has been considerable debate in the authorities and amongst legal commentators about the nature and utility of the distinction between the two.  In the words of one commentator, “the distinction between derivative actions and oppression remedy claims remains murky”: Markus Koehnen, Oppression and Related Remedies (Toronto: Thomson Canada Limited, 2004), at p. 443.

Yet the statutory distinctions remain in effect.”

         Rea v. Wildeboer, 2015 ONCA 373 (CanLII) at 14-21

“Numerous cases have confirmed that police enforcement orders should be granted sparingly and should be limited to exceptional circumstances and as a last resort when other judicial enforcement tools have been unsuccessful. Police enforcement should be ordered only when it is shown to be in the best interests of the child, after considering the risk of trauma that police enforcement might cause to the child. Police enforcement is not available “as a long-term, multiple-use, open-ended, on-demand enforcement tool”: Patterson v. Powell, 2014 ONSC 1419, at paras. 13-35; Multani v. Rana, 2020 ONSC 2433 at paras. 131-132; Medu v. Medu, 2020 ONSC 2582, at para. 22; Tessier v. Rick, 2020 ONSC 1886, at para. 17.”

         Skinner v. Skinner, 2020 ONSC 3226 (CanLII) at 28

“Currently, the Divorce Act does not include a list of criteria for courts to consider in applying the “best interests of the child” test, apart from the general requirement to refer to “the condition, means, needs and other circumstances” of the child and to give effect to the principle of maximum contact with both parents. The absence of specific criteria in the Divorce Act explains why this court frequently looks to the factors listed in s. 24 of the CLRA in divorce cases.

One of the amendments to the Divorce Act that will be introduced by Bill C-78 is the following non-exhaustive list of criteria for the court to consider when applying the “best interests of the child” test in parenting disputes:

(a) the child’s needs, given the child’s age and stage of development, such as the child’s need for stability;

(b) the nature and strength of the child’s relationship with each spouse, each of the child’s siblings and grandparents and any other person who plays an important role in the child’s life;

(c) each spouse’s willingness to support the development and maintenance of the child’s relationship with the other spouse;

(d) the history of care of the child;

(e) the child’s views and preferences, giving due weight to the child’s age and maturity, unless they cannot be ascertained;

(f) the child’s cultural, linguistic, religious and spiritual upbringing and heritage, including Indigenous upbringing and heritage;

(g) any plans for the child’s care;

(h) the ability and willingness of each person in respect of whom the order would apply to care for and meet the needs of the child;

(i) the ability and willingness of each person in respect of whom the order would apply to communicate and cooperate, in particular with one another, on matters affecting the child;

(j) any family violence and its impact on, among other things,

(i) the ability and willingness of any person who engaged in the family violence to care for and meet the needs of the child, and

(ii) the appropriateness of making an order that would require persons in respect of whom the order would apply to cooperate on issues affecting the child; and

(k) any civil or criminal proceeding, order, condition, or measure that is relevant to the safety, security and well-being of the child.

Although Bill C-78 is not yet in effect, this list of criteria enacted by Parliament is nevertheless relevant and useful in deciding the issues before me because the criteria are drawn from the jurisprudence. The list effectively summarizes the case-law to date. I will therefore take the Bill C-78 list of criteria into consideration.

It is important to note that not every criterion listed in s. 24 of the CLRA or in Bill C-78 will be relevant in every case. Moreover, the lists are not exhaustive. There may be additional relevant criteria that should be considered, depending on the specific circumstances of each case.

No single criterion should be given priority in determining a child’s best interests. The weighing of each criterion when making parenting orders will always depend on the individual circumstances of the child.”

         Bazinet v. Bazinet, 2020 ONSC 3187 (CanLII) at 27-31

“In the motion for summary judgment, the position of the CCAST was that the children should have a relationship with their parents and the parents should have access, but the Society sought to retain the authority to impose conditions including supervision. The position of the Appellant was that the children wanted to see their parents more frequently than the status quo of two hours per week but she did not propose a timetable for increasing the access. The position of the OCL was that the children wanted to see their parents and the children said that the duration of each visit was too short. The issue before the motion judge was not whether there would be access but the circumstances under which it occurred including duration, frequency, and supervision.

In Kawartha-Haliburton, 2019 ONCA 316, the issue on the summary judgment motion was whether access should occur. In that case, after articulating the framework the court must apply given the changes brought about by the CYFSA, the Court of Appeal set aside the decision but concluded that the record was insufficient to permit it to apply the correct test, and referred the matter back to the Superior Court. In L.M., 2019 ONCA 841, the Court of Appeal concluded that the record was a sufficient basis on which it set aside the no access order and ordered that the Appellant have access. The Court had granted leave to the OCL to filed fresh evidence in the form of an affidavit addressing the issue of access in the context of adoption. The Court noted that that evidence suggests that some form of access would be in the children’s best interests, that it was the preference of one of the children, and that all the children appeared to have strong emotional ties to the Appellant.  Furthermore, the Peel CAS conceded that an access order would be appropriate as being in the children’s best interest. The Court remanded the issues of the nature and extent of access to the OCJ for determination.

Pursuant to s. 105(4) of the CYFSA, an existing access order terminates when an order is made for extended society care. Section 105(5) provides that a court shall not make or vary an access order under s. 104 with respect to a child who is in extended society care unless the court is satisfied that the order or variation would be in the child’s best interests. As a result of s. 105(6) in considering whether an order or variation would be in the child’s best interests under subsection (5), the court must consider whether the relationship between the person and the child is beneficial and meaningful to the child.

As the Court of Appeal emphasized in Kawartha-Haliburton at paras. 48-49, the change reflected in s. 104(5) and (6) represented

a significant shift in the approach to access for children in extended care.

The burden is no longer on the person requesting access to demonstrate that the relationship is beneficial and meaningful to the child and will in no way impair the child’s future adoption opportunities. Instead, the court is to undertake a best interests analysis, assess whether the relationship is beneficial and meaningful to the child, and consider impairment to future adoption opportunities only as part of this assessment and only where relevant. This means that it is no longer the case that a parent who puts forward no evidence will not gain access.”

Catholic Children’s Aid Society of Toronto v. O.P., 2020 ONSC 3011 (CanLII) at 72-75

“Justice Pazaratz, who during the short period of time that the family courts have been faced with COVID-19 related custody and access issues has written extensively on the topic, directly advised the Applicant and Respondent in his triage endorsement in this proceeding of the general expectation on parents to honour parenting arrangements during the COVID-19 Health Crisis:

While COVID-19 is a relatively new and unheard of issue in our lives, during the past weeks our court system has devoted a lot of attention to parenting arrangements during these difficult times.  The caselaw is overwhelmingly clear in saying that there is a presumption that parenting and timesharing arrangements will continue – to be modified only as may be required to address health or safety issues in relation to the children and their households.  A complete suspension of timesharing is not the starting point – it is the last resort, to be considered only after every possible option has been thoroughly considered.   Every case that I’ve seen says that the objecting parent has to do a lot more than just say “I’m afraid of COVID-19” or “my child is afraid of COVID-19”.  We’re all afraid.  Fear is no excuse to abdicate parental responsibility.  Parents have an obligation to not only obey court orders but to facilitate and encourage children to accept and comply with arrangements which adults have determined to be appropriate. This is especially true in cases like this where the parties have joint custody.  That’s not an empty label.  It means both parents have been entrusted with an equal responsibility to work together in a mature, creative and child-focused manner: 2020 ONSC 2843 at para. 15.”

         Brazeau v. Lejambe, 2020 ONSC 3117 (CanLII) at 23

“Section 2 of the Divorce Act defines a child of the marriage to mean:

a child of two spouses or former spouses, who, at the material time, (a) is under the age of majority and who has not withdrawn from their charge, or (b) is the age of majority or over and under their charge but unable, by reason of illness, disability or other cause, to withdraw from their charge or to obtain the necessaries of life.

The law is well-settled that an adult child under the age of 24 who is regularly attending school and pursuing an education in the ordinary course designed to fit the child for the future constitutes an “other cause”: Tapson v. Tapson, 1969 CanLII 541 (ON CA), [1969] O.J. No. 1490 (ON CA).  See also Giorno v. Giorno, 1992 CanLII 2592 (NS CA), [1992] N.S.J. No. 94, 39 R.F.L. (3d) 345 (NS CA).”

         Gagne v. Mendoza, 2018 ONSC 3141 (CanLII) at 39-40

“Leave to appeal costs is granted rarely and only in “obvious cases where the party seeking leave convinces the court there are ‘strong grounds upon which the appellate court could find that the judge erred in exercising his discretion’”: Brad-Jay Investments Ltd. v. Szijjarto (2006), 2006 CanLII 42636 (ON CA), 218 O.A.C. 315 (C.A.), at para. 21, leave to appeal refused, [2007] S.C.C.A. No. 92.”

         Dancy v. Mason, 2019 ONCA 410 (CanLII) at 20

“A trial judge should consider the conduct of the proceedings and delays attributable to particular parties to those proceedings in determining the rate of prejudgment interest.  Prejudgment interest is not, however, intended as a means of punishing or rewarding parties for the manner in which they have conducted the proceedings.  Its role is compensatory.  I see no basis to interfere with the trial judge’s finding that Mr. Novakovic’s conduct of the claim should not deprive him of the compensation due him under the Courts of Justice Act provisions relating to prejudgment interest.

The appellant also argues that the rate of prejudgment interest should be modified to reflect the change in the rate between December 2000 and September 2005.  The rate fluctuated between a high of six percent in December 2000 and a low of 2.3 percent in 2002.  The average for the time period would appear to be about 3.4 percent.

Trial judges sometimes average prejudgment interest rates over the time period between the commencement of the action and the obtaining of judgment.  This is particularly appropriate where the prejudgment interest rates fluctuate widely.  The onus is, however, on the parties seeking a different rate than that imposed by the statute to justify the imposition of that different rate.  I do not think the fluctuations in issue in this case are sufficient to hold that some averaging of the prejudgment interest rates was essential.  Clearly, the trial judge could have averaged the rate but, in my view, she did not err in not doing so.”

         Novakovic v. Kapusniak, 2008 ONCA 381 (CanLII) at 42-44

“It is clear that since COVID-19 the court has found that there is no presumptive authority extended to the Society to suspend all in-person access to parents without formulating some alternative measures. See: DCAS v. Quinn, 2020 ONSC 1761; and Children’s Aid Society of Toronto v. T.F., 2020 ONCJ 169, at para. 10.

In Ribeiro v. Wright, 2020 ONSC 1829, Justice Pazaratz set out the following:

a)    In most situations there should be a presumption that existing parenting arrangements and schedules should continue, subject to whatever modifications may be necessary to ensure that all COVID-19 precautions are adhered to — including strict social distancing.

b)    A blanket policy that children should never leave their primary residence — even to visit their other parent — is inconsistent with a comprehensive analysis of the best interests of the child. In troubling and disorienting times, children need the love, guidance and emotional support of both parents, now more than ever.

c)     In some cases, custodial or access parents may have to forego their times with a child, if the parent is subject to some specific personal restriction (for example, under self-isolation for a 14-day-period as a result of recent travel; personal illness; or exposure to illness).

d)    In some cases, a parent’s lifestyle or behaviour in the face of COVID-19 (for example, failing to comply with social distancing; or failing to take reasonable health-precautions) may raise sufficient concerns about parental judgment that direct parent-child contact will have to be reconsidered. There will be zero tolerance for any parent who recklessly exposes a child (or members of the child’s household) to any COVID-19 risk.

e)     The parent initiating an urgent motion on this topic will be required to provide specific evidence or examples of behavior or plans by the other parent which are inconsistent with COVID-19 protocols.

f)     The parent responding to such an urgent motion will be required to provide specific and absolute reassurance that COVID-19 safety measures will be meticulously adhered to — including social distancing; use of disinfectants; compliance with public safety directives; etc.

g)    Both parents will be required to provide very specific and realistic time-sharing proposals which fully address all COVID-19 considerations, in a child-focused manner.

h)    Judges will likely take judicial notice of the fact that social distancing is now becoming both commonplace and accepted, given the number of public facilities which have now been closed. This is a very good time for both custodial and access parents to spend time with their child at home.

Although Ribeiro is not a child protection matter, the guidelines are applicable. See: Simcoe Muskoka Child and Youth Family Services v. JH, 2020 ONSC 1941, at para. 6.”

         C.A.S. v. J.N., 2020 ONSC 2999 (CanLII) at 61-63

“The Supreme Court of Canada and this court have consistently held that joint or parallel custody should only be ordered where the parents can co‑operate and communicate effectively: see, for example, Young v. Young, 1993 CanLII 34 (SCC), [1993] 4 S.C.R. 3 at para. 44; Kaplanis v. Kaplanis, 2005 CanLII 1625 (ON CA), [2005] O.J. No. 275 at 4 (C.A.).”

Roy v. Roy, 2006 CanLII 15619 (ON CA) at 4