Legal Blog: Civil Litigation

Aug
14
2017

Tender

Graillen Holdings Inc. v. Orangeville (Town) 2017 Ont CA

A disappointed tenderer is not awarded damages as of right merely because an owner accepts a non-compliant tender. The tenderer must still demonstrate that it would have been awarded the contract and lost profit because of the non-award. In this case, the trial judge decided that had the owner realised that the tender it accepted was non-compliant, it would not have accepted the bid of the disappointed tenderer (which used a process that the Town preferred not to use); rather, it would have re-tendered the project and the disappointed tenderer would still have lost. The Court of Appeal dismissed the appeal of the disappointed tenderer.

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Aug
14
2017

Settlement and Costs

Muskala v. Sitarski 2017 Ont SCJ

The plaintiff brought a motion for production of information by the corporate defendants. The parties settled the motion other than costs. The parties then submitted their costs requests to a motions judge. The judge held that costs normally should not be awarded when parties settle; such a settlement is usually a settlement without costs. The main reason for the refusal was that it was difficult, if not impossible, to balance the factors under Rule 57.01 without having heard the facts and made a decision on the actual dispute. Further, costs are an incident to the determination of the rights of the parties and are not themselves supposed to be the subject matter of litigation. There might be exceptional cases in which costs would be justified, but this case was not one of them. Accordingly, if costs are important, an attendance is necessary and the parties cannot indicate that the matter has been “settled”. Note: this decision seems to apply just as much for a settlement of the action itself as it would for a motion.

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Jul
28
2017

Costs

Huang v. The Personal Insurance Co. 2017 Ont SCJ

An action to obtain coverage from an insurer is not like any other action, in which a successful party would recover only partial indemnity costs unless there was some sort of wrongdoing that would result in substantial or full indemnity costs. An insurance company that denies coverage, and is then found to have done so wrongfully, should compensate its insured, and by extension those to whom the insured is found liable, for the full costs of enforcing that coverage.

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Jul
28
2017

Estate

Mayer v. Rubin 2017 Ont SCJ

When beneficiaries or aggrieved non-beneficiaries of an estate are battling and its trustees are also involved as beneficiaries, it is usual for another trustee, possibly in institutional trustee, to be appointed as an estate trustee pending litigation, whether under sections 5 & 28 of the Estates Act or under Rule 75.06(3)(f) and the court’s inherent jurisdiction to supervise the management of estates and control its own processes. The purpose of doing so is to level the playing field such that neither side is able to use its control over the estate to benefit itself or prejudice the other side. In this case, the trustees were starting to play fast and loose so that it was an easy decision for the court to appoint an estate trustee pending litigation.

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Jul
28
2017

Affidavits

Airex Inc. v. Ben Air System Inc., 2017 Ont CA

On a summary judgment motion, if a party delivers its affidavit late, in non-compliance with the timetable established for the motion, that party is not able to complain that the other party failed to cross-examine on the late -delivered affidavit and an adverse inference should be drawn from the failure to cross-examine. In this case, the affidavit was insufficient in any case to demonstrate that a contractor did not breach its trust liabilities. There were bald assertions that payments to other subcontractors and suppliers were made without appropriate documentary evidence to back up those assertions.

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Jul
20
2017

Condominium Priority

CIBC Mortgages Inc. v. York Condominium Corp. No. 385 2016 Ont SCJ

The condominium obtained a costs award against a unit owner for $15,000 in its application against the unit owner to obtain compliance with the unit owner’s duties; the unit owner had been harassing the condominium staff and other residents. Section 134(5) of the Condominium Act allows a condominium to add to the common expenses not only the damages and costs that the court awards (which may only be partial indemnity costs), but also the difference between the actual costs and partial indemnity costs. The order noted that the owner was to pay the condominium by March 17. The condominium did not register a notice of lien until December 12. By the time that the property was sold by agreement of the condominium corporation and the mortgagee, the costs had ballooned to $113,000, far more than the sale price. The judge held that the three-month requirement for registration of a lien (section 85 (2)) applies equally to orders of compliance as it does to normal common expenses. Although the condominium has the right under section 134(5) to postpone payment of the amount due under the order, it must do so before the three-month period has passed. The judge held that the lien was invalid and that the mortgagee had priority to the proceeds of sale.

CIBC Mortgages Inc. v. York Condominium Corp. No. 385 2017 Ont CA

The condominium corporation appealed the decision and the Court of Appeal dismissed the appeal, agreeing with the application judge’s decision in all respects.

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Jul
13
2017

Costs Against a Non-Party

Quest Management Services Inc. v Quest Management Systems 2017 SCJ

Costs can be awarded against a non-party (the “NP”) on two grounds. First, the actual plaintiff is a straw man. Under this principle, three criteria must be met: i) the NP must have standing to bring the action himself, ii) the actual plaintiff (the straw man) is not the true plaintiff, and iii) the straw man has been put forward to protect the NP from costs liability. Second, the plaintiff’s conduct of the litigation is based on fraud or is an abuse of court process. In this case, the corporate plaintiff was the proper plaintiff. The sole shareholder would not have had a cause of action himself. However, because the plaintiff had given an undertaking to the court to pay damages if the injunction were improper and had no funds to do so, the judge concluded that the representations to the court were fraudulent and the sole shareholder was liable on this basis alone. The court also concluded that the injunction request itself was brought for the sole purpose of a fishing expedition to cross-examine the defendant to determine whether there was a basis for an injunction and that this was an abuse of process sufficient to ground personal liability. Note: the request for costs personally came from after-acquired information based on a judgment debtor examination. The costs award was amended under Rule 59.06(2)(a).

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Jul
13
2017

Limitations

Cleland Metal Products Ltd. v. Proctor 2017 Ont Div Ct

Corporation and principal entered into a settlement agreement by which the corporation agreed to pay the plaintiff $37,000 over time and the principal guaranteed those payments. The guarantee was not a demand guarantee; it was a guarantee of each payment as it arose. By 2007, all payments ought to have been made, but were not. The plaintiff commenced its action on April 22, 2010, after the expiry of the usual two-year limitation period. However, the limitation period commencement date against the corporation was extended to April 22, 2008, the last date that the corporation made a payment towards the debt. The action was therefore commenced within time against the corporation. The judge held that the payment by the corporation was not an acknowledgment in writing of the debt made by the guarantor and was not a payment made by the guarantor – as required under s.13 (10) and 13(11) of the Limitations Act, 2002. Accordingly, the action against the guarantor was statute barred.

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