Legal Blog: Civil Litigation

Jan
30
2018

Release

Pomeroy v. Couprie 2017 Ont SCJ

Plaintiff commenced an action for $3 million against the main defendant and others, including a lawyer. The plaintiff settled the action against the lawyer for payment of $3,000. The plaintiff was to make a payment “in return for a comprehensive mutual release (lawpro standard form) and … a Notice of Discontinuance.” In accepting the settlement, the plaintiff requested the draft release “in the form proposed for my review.” The parties agreed that there was a settlement regardless of the form of the release, but disagreed on the form of the release. The lawyer wanted the unchanged standard LawPro release. The plaintiff wanted to amend the no claims over clause to ensure that it would be able to continue its action against the remaining defendants and to ensure that a separate claim, not referenced in the statement of claim, could be made against the lawyer for breach of an alleged duty as bare trustee holding a disputed share certificate. The judge used commercial interpretation rules to decide that the plaintiff’s position was the better one.

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Jan
26
2018

Interest

Solar Power Network Inc. v. ClearFlow Energy Finance Corp. 2017 Ont SCJ

Section 4 of the Canada Interest Act specifies that, on all portions of non-mortgage loans, the yearly rates or percentages must be specified; otherwise, the interest rate will be 5% per year. The loan documents specified a base rate at 12% per year compounded and calculated monthly, an administration fee of between 1.81% and 3.55% of the principal at the start and any renewal of the loan, and a discount fee of 0.003% per day for every day that the loan was outstanding. The judge held that: (i) the administration fee was not interest because there were significant administrative tasks being covered by this fee; (ii) the discount fee had nothing to do with administration was categorised as interest; it was not linked to the creation of a new loan document or renewal, was not tied to risk, was calculated at a daily rate, and was not tied to a specific event, such as a renewal; (iii) since the discount fee was held to be interest and an annual rate was not given, this fee ran afoul of the Interest Act; (iv) since one of the components of the loan did not comply with the Interest Act, all of the interest provisions (even the proper provision at 12% per year) were tainted and all were subject to an interest rate at 5% per year – even those that complied with the Act.

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Jan
26
2018

Gift

Texieira v. Markgraf Estate 2017 Ont CA

Claimant was the deceased’s neighbour who helped her during the last years of her life solely out of goodwill and without expectation of any compensation. 6 days before her death, the deceased gave the claimant a cheque for $100,000. He attempted to cash it, but there were insufficient funds in that account – even though there were sufficient funds in other accounts. Before the claimant could sort out the problems, the deceased died. The motions judge held, and the Court of Appeal agreed, that a gift by cheque is not complete when the cheque is given; only when the cheque has been cashed or has cleared. An incomplete gift is no gift all. The claimant had other arguments, none of which were successful. There was no contract because there was no consideration. There is no claim on a bill of exchange because there was no consideration. Equity by estoppel did not apply because the claimant did not act in reliance on a shared assumption. For example, the claimant would have suffered no reliance detriment if the deceased had stopped payment on the cheque.

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Jan
18
2018

Lease Damages

1714959 Ontario Inc v. Goldenshtein 2017 Ont SCJ

Guarantor of the corporate tenant under a lease that had been terminated by the landlord was held to be liable for all damages that the landlord had incurred. The judge noted that once the premises had been re-let, mitigation had taken place and must be accounted for in any damages calculation. The judge assessed damages including arrears, pre-mitigation rental loss, rental shortfall, and the present value of the rental loss from the date of trial to the end of the lease term.

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Jan
18
2018

Undertakings, Settlement, Costs

Pullano v. Hinder 2017 Ont SCJ

An undertakings and refusals motion was settled. The only issue remaining was costs. The judge noted that undertakings had to be fulfilled and if a party does not answer them the party could anticipate a costs award against it. The judge assessed costs at $3,500 and had no qualms about doing so even though the only issue before him was costs.

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Jan
15
2018

Summary Judgment

Holmes v. Hatch 2017 Ont CA

In a wrongful dismissal matter, the motions judge decided that the employer’s failure to take into account some of the specific factors set out for termination in the employment agreement constituted a fundamental breach of that contract. Accordingly, she awarded damages at common law. The Court of Appeal set aside that decision because the employee never pleaded this type of breach of contract and never pleaded repudiation of the contract. Further, the employee did not advance those claims in his motion or in his factum. It was only when the motions judge raised the notion of this type of breach that the parties made oral and subsequent written submissions. Accordingly, the employer was denied the opportunity to adduce evidence on the precise breach allegation on which the judge decided the motion. A party must know the evidentiary burden it has to meet in a motion for summary judgment.

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Jan
08
2018

Settlement and Costs

MTCC 596 v. Best View Dining Ltd 2017 Ont SCJ

Condominium commenced an application to enforce the declaration and rules regarding noise that the restaurant tenant/owner in a commercial condominium complex was creating for the residential owners. The parties agreed on a consent order to deal with the means by which the noise could be reduced or eliminated, but could not agree on the costs to be paid to the condominium for the problems created and the legal fees incurred. Unlike in Muskala v. Sitarski 2017 Ont SCJ, the judge was quite willing to determine the costs award even after the parties had resolved all other aspects of the application. She held as follows: (1) the fact that the tenant/owner had dealt with the problems in good faith was irrelevant; (2) the condominium did not need to mediate the dispute because a tenant was involved; and (3) the condominium should be compensated for all of its costs, except those that were not reasonable.

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Jan
08
2018

Proprietary Estoppel

Cowper-Smith v. Morgan 2017 SCC

Family: mother, 2 brothers, and one sister. Mother’s main asset was the family house. The will that ultimately governed distributed all assets to the 3 children equally. Sister previously promised brother that she would sell her interest in the house to him at fair market value if he would return to Canada from England to look after their ailing mother. He did so, mother ultimately died, and sister reneged on her promise and proposed to sell the house even though brother was currently living in it. Proprietary estoppel prevents the inequity of a detriment that occurs when a claimant has reasonably relied on an expectation that the claimant will enjoy a right or benefit over property. The court extended the protection even when the party responsible for the expectation did not own the interest in the property at the time of the claimant’s reliance. The court left open the question whether proprietary estoppel could attach to an interest in property other than land. The court held that the brother’s reliance on the sister’s promise was reasonable under all the circumstances. There were 2 other questions: (1) Did the sister obtain an interest in the land? As executor, she wanted to sell the land and divide the proceeds. The court got around this by ordering an in specie distribution. (2) What was the date on which fair market value would be calculated? The court held that the FMV would be calculated as of the date that the claimant would reasonably have expected to be able to purchase the land (i.e. when the estate could have been wound up in the normal course were it not for the litigation). The court did not want to give brother a benefit on the money that he did not have to pay immediately and therefore ordered that he pay pre-judgment interest on that amount and any expenses that the estate incurred in maintaining the property from the FMV date.

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Dec
11
2017

Default Judgment Set Aside

Redabe Holdings Inc. v. ICI Construction Corp 2017 Ont CA

As a general rule, a defendant is entitled to an order setting aside a default judgment if it is irregularly obtained – without imposition of terms other than, perhaps, costs. In this case, the appellant thought that there was an irregularity until discovering at the appeal hearing itself that the judgment was obtained with an appropriate affidavit that demonstrated sufficient evidence to warrant judgment. The appeal was dismissed, but without costs.

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Dec
07
2017

Pierringer Agreement

Gendron v. Thompson Fuels 2017 Ont SCJ

Owner, fuel company, and fuel tank manufacturer were litigating over the responsibility of an oil spill. Owner entered into a Pierringer Agreement with the manufacturer. As a result of this agreement, the manufacturer paid a settlement amount to the owner and was no longer a party to the action. Usually, under this type of agreement, there is a provision that should the manufacturer be held to be liable at trial for an amount that is more than it was to pay the plaintiff under the agreement, then the plaintiff would reduce the amount that it received so that the manufacturer would pay only the settlement amount. With this type of agreement, the plaintiff assures itself of a minimum amount and then looks for more from the non-settling defendant, in this case the fuel company. As a basic rule, after the liability proportions have been determined, the plaintiff cannot end up with more than its actual assessed damages. As an example, assume that the plaintiff settles with the settling defendant for $7, its damages are assessed at $10, and the non-settling defendant is held to be 80% liable for the damages. Under this scenario, the plaintiff could receive no more than $3 from the non-settling defendant. Conversely, if the non-settling defendant was held to be 20% liable for the damages, then the plaintiff would receive its $7 from the settling defendant and $2 from the non-settling defendant for a total of $9. The Gendron case dealt with a scenario in which the plaintiff was held to be 60% contributorily negligent for the damages. The non-settling defendant wanted to pay an amount that, when added to the amount that the settling defendant had paid, would equal 40% of the actual damages. Of course, if the settling defendant had paid more than 40% of the actual damages, the non-settling defendant would pay nothing. The judge held that the concept of a plaintiff not receiving more in aggregate then the total amount of its damages applied to its damages before deduction for contributory negligence.

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