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Limitations cases, under the Limitations Act, 2002, just keep coming. Limitations issues abound: when did the period start, how long was the period, was it reasonable to commence an action, when was the cause of action discovered, etc.? Consequently, we have written about limitations issues in the construction context many times. Three of our newsletters have had the word “limitations” in the heading; hence, we entitle this newsletter, Limitations (4).
We now have two more cases to discuss: Weinbaum v. Weidberg, a 2017 decision of the Ontario Divisional Court and Employment Professionals Canada Inc. v. Steel Design and Fabricators (SDF) Ltd., a 2016 decision of the Ontario Superior Court of Justice.
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Deavitt v. Greenly 2017 Ont Div Ct
Farmers brought an action against neighbouring land owners and the City alleging that, because there was a run-off of bio solids, presumably obtained from a wastewater treatment plant, onto the farmers’ lands, the neighbours and the City were liable for trespass, negligence, and nuisance. The motions judge dismissed a motion for summary judgment that the defendants brought. He decided that he was unable to have a full appreciation of the evidence and therefore the matter had to go to trial. The Divisional Court allowed the appeal and dismissed the farmers’ action. The “full appreciation” test was long gone as a result of the Hyrniak Supreme Court of Canada decision. Now, a motions judge must first determine, based only on the evidence, whether there is a genuine issue requiring a trial. If the judge concludes that there is such a genuine issue, the judge must then determine if the trial can be avoided by using fact-finding powers available to the judge under the Rules. In this case, the farmers had put forward almost no evidence to support their allegations – other than their own observations. Assuming that they had put their “best foot forward”, as they were required to do, they had no evidence to show that there was a genuine issue for trial.Continue Reading >
North v. Metaswitch Networks Corporation 2017 Ont CA
Employer terminated employment pursuant to a termination clause in an employment agreement. Court found that that termination clause was initially void because it contravened the Employment Standards Act. The issue was whether the employer could rely on a clause stating that any part of the agreement found to be illegal would be severed from the agreement. The Court held that the severability clause was unenforceable relating to a termination clause. To hold otherwise would incentivize employers to draft contracts contrary to the ESA provisions, but include a severability clause to save the offending provision if the employee had the time and money to challenge the contract in court.Continue Reading >
The issue was whether a severability clause could save a restrictive covenant from being too wide so as to be unenforceable. There are two types of severance: blue pencil and notional. Blue pencil severance means that the judge can take a blue pencil, draw a line through the offending provisions, and continue to apply the remainder of the words. Notional severance means reading down an illegal feature of the contract so as to render the contract to be in compliance with law. The Court rejected notional severance outright. It held that blue pencil severance should be resorted to sparingly and only if the part being removed was clearly severable, trivial, and not the main purport of the restrictive covenant.Continue Reading >
Nodel v. Stewart Title Guaranty Co. 2017 Ont SCJ
Identity fraud took place resulting in the Director of Titles voiding a mortgage that had been title insured by Stewart Title. The policy covered the mortgagee for mortgage fraud, but had an exception: the proceeds of the mortgage had to be paid to the registered title holder. In this case, the lawyer for the mortgagee made the funds payable, on direction, to the mortgagor’s lawyer in trust and, it seems, the mortgagor’s lawyer paid the money to people other than the registered title holder. The motions judge decided that the exception was ambiguous. It did not bear the interpretation that the insurer was attempting to put on it (i.e. money being paid means that the cheque must be made payable to title holder or wired to his bank account directly). The insurer argued that a direction to pay to the mortgagor’s lawyer would be acceptable only if that lawyer undertook to disburse the funds directly to the title holder. The motions judge disagreed and held that, because the insurer did not express the manner of payment, the exception permitted multiple payment methods, including disbursing the funds in trust to the mortgagor’s lawyer.Continue Reading >
CS v. NS 2017 2017 Ont Div Ct.
Rule 30.1.01(1) of the Rules of Civil Procedure states that all parties and their lawyers are deemed to undertake not to use evidence (documents or information) obtained in discovery for any purposes other than the proceedings in which they are obtained. The theory is that the law forces disclosure so that the disclosing individual should at least retain a modicum of privacy over the information. There are exceptions to the Rule. It does not prohibit the use of evidence filed with the court or given at a hearing; the use of evidence to impeach the testimony of a witness in another hearing; or the use of the evidence in a subsequent action. In this case, the counsel for the defendant in a civil action gave the discovery information to counsel for the defendant in the corresponding criminal proceeding for impeachment purposes – without notice to the plaintiff and without seeking directions from the court. The civil motions judge held that this was improper and that the court had to be involved any time an exception was being relied upon.
The appeal of this decision attracted a number of intervenors. The Divisional Court allowed the appeal noting that the Rule provided a prohibition regarding use, but with exceptions. “There is nothing in the Rule that establishes any requirement that a party must seek the approval of the court before (the party) relies on one of the exceptions. If there had been an intention to require such approval, the Rule could have so provided.”Continue Reading >
The trial judge awarded costs on a full indemnity basis because the defendant sold and encumbered properties during the course of the proceedings, fabricated evidence, and conducted herself in other ways that were not set out in the Court of Appeal decision. The Court noted that elevated costs (beyond partial indemnity) are justified in narrow circumstances only: where an offer to settle is engaged or when the losing party has behaved in a manner that is worthy of sanction. Once costs are elevated, substantial indemnity costs are the norm and full indemnity is applicable only if the conduct worthy of sanction is especially bad. The court allowed the full indemnity costs award to stand, noting that it was one of the rare and exceptional cases where this type of award was justified.Continue Reading >
Butera v. Chown Cairns LLP 2017 Ont CA
Client’s action against franchisor was dismissed by way of a summary judgment motion after an adverse limitations finding. The motions judge also noted, in obiter (i.e. discussions that were not germane to the final result), that the defendant’s alleged representations were not misrepresentations. The motions judge did not deal with other causes of action alleged in the claim, such as negligence, breach of contract, and breach of the Arthur Wishart Act. The client appealed that decision; the Court of Appeal dismissed the appeal on the limitation grounds. The client then sued his lawyer claiming that the lawyer argued his case negligently. The lawyer brought a summary judgment motion, ultimately relating only to the misrepresentation issue, arguing that this issue was res judicata (i.e. already decided by the motions judge). The lawyer was initially successful in the partial summary judgment motion.
The Court of Appeal reversed the decision for 2 reasons. (i) the original motion judge’s decision was based on a limitation problem, not his findings relating to misrepresentation; therefore the issue was not res judicata; (ii) the matter was not suitable for a partial summary judgment.Continue Reading >