Legal Blog: Five Liners

Oct
05
2017

Super Priority to CRA

Manitoba Housing and Renewal Corp. v. Able Eavestroughing Ltd. 2017 Man QB

This was a priority fight between the surety and subs of a general against CRA. The owner had held back $463,000 from the general and wanted to pay that amount into court. Before the owner’s application, CRA issued a third party demand against the owner for payment of $712,000 relating to the general’s payroll source deduction arrears. GCNA and the subs attempted to argue that the owner had a duty to pay them directly, rather than the general, so that the third party demand was irrelevant. The judge held that (i) there was no obligation of the owner to mitigate the losses of GCNA and the unpaid subcontractors, (ii) the prime contract and the bonds created no legal obligation on the part of the owner to pay subcontractors; it merely had a right to do so; (iii) even if there were something in the contract that said this, the contract could not displace the rights of CRA. Accordingly, since the owner had no obligation to pay the funds to the surety or the subcontractors, the funds had to be paid to the general and, pursuant to the third party demand, were to be paid to CRA. Although those funds were subject to the liens and trust claims of the subs, they ranked behind CRA’s claim in priority and the subs and GCNA got nothing.

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Oct
05
2017

Incorporation by Reference

Trenchline Construction Inc. v. Unimac-United Mgmt Corp. 2017 Ont SCJ (MC)

Subcontractor claimed for standby charges for delay. There were 3 types: arrival at site without work to do; told not to attend site because there was no work to do; and working after the original substantial performance date. The subcontract documents were barebones but stated “Standard CCDC Contract applies.” This was enough for the Master to incorporate by reference the provisions in the CCDC documents dealing with delays. The Master refused to award the standby costs for a number of reasons, including (i) there was no evidence that the general promised in the subcontract to make the site available on every day of the subcontractor’s schedule for completing the work, (ii) there was no corroboration of payment of the claimed standby charges: no cheques, pay stubs, timesheets, or affidavits from the sub’s workers, and (iii) the claim for standby charges while the subcontractor was still working was, in reality, damages for lost revenue on other projects and nothing was proven in that regard.

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Oct
05
2017

Costs Construction

2283624 Ontario Limited v. Performance Heating & Floor Coating Ltd. 2017 Ont SCJ

The judge awarded costs of $45,000 to the defendant on an unsuccessful construction lien action for payment of $59,000. He dismissed arguments of proportionality because, he stated, it was the plaintiff who made the decision to use the Construction Lien Act process rather than sue in Small Claims Court or use the Simplified Rules.

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Oct
05
2017

Limitations

Waterstone Properties Corporation v. Caledon (Town) 2017 Ont CA

Developer was held to have agreed, in a 1973 subdivision agreement, to transfer land to the Town for a park. The developer did so, but the Town failed to register, and then lost, the transfer. In the meantime, the Town used the land as a park. Over 40 years later, the new, and related to the old, owner of the land and the Town each moved for a declaration of ownership of the land. The Court held that the Real Property Limitations Act governed. The words “to recover any land” was held to mean “to obtain any land by judgment of the Court.” This encompassed claims for a declaration in respect of land and claims to the ownership of land advanced by way of resulting or constructive trust. The Court, however, held that the limitation period did not start running because, pursuant to section 5 (1) of the Act, the Town had never been dispossessed from its possession of the land. The Court agreed that the land was that of the Town.

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Oct
05
2017

Specific Performance

Xiong Zhang v. Meng Zhang 2017 Ont SCJ (MC)

Case of a convoluted real estate transaction that went bad. Purchaser obtained and registered a certificate of pending litigation without notice. The vendor and mortgagee moved to set it aside. The Master held that the property was unique (a key finding for purposes of an action for specific performance) because, due to the quickly rising prices at the time and the tying up of his $40,000 deposit, the purchaser had no equivalent property to be found at the agreed upon purchase price in the neighbourhood he had selected. The Master indicated that the calculation of damages at trial, years down the road, would be highly speculative and inadequate compared to an order for specific performance. This decision expands the definition of “unique”, which previously referenced only the property itself.

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Sep
28
2017

Duress & Practical Compulsion

Ekum-Sekum Inc. v. Bel-Air Excavating & Grading Ltd. 2017 Ont SCJ

Specifications stated that paving could not take place unless the road surface was at least 2°C and could not be done after November 30 without permission. Through no fault of the paving contractor, the construction was delayed. The general wanted the paving done before winter. The paving contractor insisted that, if the work were not postponed until the spring, then it could not perform the paving unless the general released it from liability for a possible faulty product. The general signed the release, the work was done, the temperature was too cold, and, ultimately, the paving had to be redone. The paving contractor relied on the release. The general alleged that the release was given under duress. The court held in favour of the paving contractor. Alternative courses were open to the general, the general was independently advised that it should not sign the release, and the general did nothing to ensure that the paving did not take place when the temperature was too cold. In addition, the pressure that the paving contractor exerted was for a legitimate reason (i.e. to be absolved from non-compliance with specifications about which the general was warned).

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Sep
28
2017

Time of Essence

Deangelis v. Weldan Properties Inc. 2017 Ont SCJ

Closing set for August 23. Time was of the essence in the agreement. On the date of closing, purchaser’s lawyer contacted the developer vendor’s lawyer indicating that, although the mortgage was approved on August 22, it could not be advanced in time for the closing; the lawyer requested a 3-day extension. Later that day, the vendor’s lawyer responded noting that there was an anticipatory breach, terminating the agreement, and claiming forfeiture of the $20,000 deposit. In effect, the purchaser repudiated the agreement and the vendor accepted that repudiation or before the closing date to terminate the agreement. The purchaser moved for specific performance and the vendor moved to obtain the deposit. On a summary judgment motion, the judge held for the vendor. Good faith was not relevant and the inability of the purchaser to close the transaction had nothing to do with the vendor. Parties must be allowed to insist on strict compliance with the terms of an agreement; otherwise there is uncertainty.

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Sep
28
2017

Costs Thrown Away

Furr v. Duhamel 2017 Ont SCJ

The judge granted an adjournment of an application hearing, an adjournment made necessary because of the illness of the applicant’s lawyer. The judge awarded costs thrown away of $23,500 to the respondents, noting that costs thrown away are still awarded against the party applying for an adjournment, notwithstanding lack of fault. It is only when the court proceeding is adjourned because of the court’s scheduling problems that no costs are awarded.

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