Royal Bank of Canada v. Trang 2016 SCC
RBC had a $30K judgment against husband and wife. The debtors owned their own property subject to a mortgage in favour of bank of Nova Scotia that they kept in good standing. The debtors failed to show up to 2 judgment debtor examinations, BNS would not issue a mortgage statement without the debtors’ consent or a court order, the sheriff would not conduct a sheriff’s sale without the mortgage statement, and RBC was stalled. It brought an application against BNS and lost because of the Court of Appeal decision in Citibank v. Pleasance. It appealed the decision to the Court of Appeal and lost by a 2-1 decision. The Supreme Court of Canada recognised the business realities and overturned. The Court expressly overruled Citibank. It held that (i) the debtors impliedly had given BNS consent to provide the mortgage statement and therefore BNS had the right to provide it without running afoul of privacy legislation; and (ii) if a mortgagee does not voluntarily provide a mortgage statement, then a court should order the mortgagee to provide the statement if the creditor either requested the debtors to give consent to the release of a mortgage statement or the creditor scheduled one failed judgment debtor examination.Continue Reading >
Investor breached the contract in which it was to invest in corporation and continue a business arrangement with the corporation for the benefit of both the investor and the corporation. The corporation, which had been in a precarious financial situation, almost immediately went bankrupt. The plaintiff, one of the creditors, bought the cause of action against the investor from the trustee in bankruptcy for $5,000. The trial judge awarded $11 million in damages on the assumption that the joint 5-year business plan would have been successful. The Court of Appeal reduced the damages to $1.3 million, holding the damages should be calculated as of the date of the breach, not as of some date years hence. Calculation of damages at the date of the breach meant that the corporation had to be placed in the position in which it would have been if the contract had been performed – and this meant accounting for costs as well as the benefits of the new business venture and discounting that amount as a result of the financial uncertainty of the new venture. Ultimately, the plaintiff did not get the bonanza it had hoped for, but $1.3 million was a good return for a $5,000 investment.Continue Reading >
Benhaim v. St-Germain 2016 SCC
Doctors were negligent because they failed to properly review a chest x-ray and therefore failed to catch lung cancer at an earlier stage. The patient died and the estate sued. The trial judge agreed that there was negligence, but was not convinced that, but for the delay in diagnosing the cancer, the patient would have survived. The trial judge found that, based on the evidence, even at the earlier stage, the cancer was likely incurable and the patient would have died regardless. The Québec Court of Appeal overturned. The Supreme Court reinstated. It held that causation was a question of fact, which needed a palpable and overriding error to be reversed. Palpable means that the error is obvious; overriding means that it goes to the very core of the outcome of the case. Put another way, the error is not “a needle in a haystack, but a beam in the eye”. The Supreme Court agreed that a trial judge “may”, but was not forced to, make an adverse inference when causation was in doubt because of the actions of the defendant precluded proof of causation with certainty. The trial judge was alive to that discretion, but did not wish to make the adverse inference. The Court noted that statistics were probative, but their value would vary according to factors such as methodology, trends revealed, and the resemblance between their underlying conditions and the position of the plaintiff.Continue Reading >
Boyadjian v. Durham (Regional Municipality) 2016 Ont SCJ
Personal injury action languished for 3 years. Plaintiff’s counsel attended at a status hearing that was very much contested by the defendants. The lawyer was successful in obtaining leave to continue the action on behalf of the plaintiff (rather than having the action dismissed) after demonstrating his own personal problems that caused the action not to be prosecuted diligently. In doing so, the lawyer assured the judge that there was no damages claim for loss of income and that the case was relatively minor that could be tried within the simplified procedure rules. The plaintiff then obtained a new lawyer who moved to amend the statement of claim and increase the damages past the simplified rules monetary claims and claim for loss of income. The judge refused the amendment noting that the defendants had lost their right to appeal the decision of the judge in the status hearing and that the plaintiff was bound by statements made by her counsel as an officer of the court and as her representative.Continue Reading >
Calls for tender more often than not demand that bidders submit a list of their proposed subcontractors. Sometimes they are requested to supply them after the tender, sometimes as part of the tender. What happens when those instructions are not followed to the letter? That question was answered in True Construction Ltd v. Kamloops, a 2016 decision of the British Columbia Court of Appeal.
An invitation to tender called for tenderers to submit a sealed tender, including an appendix containing a list of subcontractors. The contractor submitted its sealed tender, but forgot to include the appendix. Before the bid submission deadline, the contractor, who realised its mistake, sent the appendix to the owner by way of fax. The contractor was the low bidder, but the owner disqualified the bid because, in its view, the bid did not comply, strictly or substantially, with the instructions to bidders.
The court held that the appendix formed part of the bid and was required to be submitted along with the bid and, as such, the bid was not strictly compliant. However, the owner had a clause allowing it the right to accept the bid if it were substantially compliant. Regardless, the court held that the bid was not substantially compliant because (i) the irregularity was not minor or technical in the sense that it would not be insignificant to the owner’s deliberation as to which tender to accept; (ii) the invitation contained a clause saying that the owner could reject a bid based on the bidder’s qualifications and previous experience on similar work and, since most of the work would be done by subcontractors, the identity of the subcontractors was important to the owner; and (iii) listing the subcontractors meant that the contractor had properly priced its bid and lined up the subcontractors necessary to support that price.Continue Reading >
In our March 2016 newsletter, we reported on Elan Construction v. South Fish Recreational Association, dealing with damages awarded (or not awarded) for breach of tender contract A. Both the owner and the general appealed the trial judge’s decision. The general wanted the damages increased and the owner wanted a finding that it did not breach the tender contract. The Alberta Court of Appeal recently dismissed the owner’s appeal; that decision is unremarkable. It also, however, granted the general’s appeal; that decision is interesting.
The trial judge agreed the general had proved, based on its typical lost profit margin and historical profit margin, that it anticipated a profit of $705,000 for the project. The judge then reduced that amount for contingencies, basing his contingency analysis solely on the testimony of a representative of the replacement contractor. That contractor was the successful bidder and actually constructed the project. The representative testified to a litany of ills that adversely affected the replacement contractor’s project construction costs.Continue Reading >
Trenchline Construction Inc. v. Unimac 2016 Ont SCJ (MC)
If a claimant provides a “written notice of a lien” up the construction ladder, then the payor receiving the notice must hold back the amount set out in the notice from any person immediately below on the construction ladder. This holdback is in addition to statutory holdbacks. A written notice of a lien, which should not be confused with a registered claim for lien, may be given informally. In addition to identifying the claimant, the contractor that owes the money, the amount owed, and the premises, the notice must also warn the payor that either (i) the flow of funds is to be interrupted immediately or (ii) the claimant has a present intention to register a claim for lien.Continue Reading >
Sub alleged that general could no longer make a claim against sub because it had not met the conditions of the contract as to notice. The subcontract stated that the contractor waived and released the sub from all claims except (a) those made in writing before the date of the final certificate for payment and still unsettled. This type of clause is similar to an owner waiving claims against a general pursuant to GC 12.2.3 of CCDC2. The general had given a very detailed letter to the sub within the appropriate time period noting that the sub had caused significant delays to the project, that the owner had assessed liquidated damages, and that the general was assessing the financial impact of the delays and intended to recover the costs from the sub. The arbitrator acknowledged that the letter met the criteria necessary for written notice (i.e. goes beyond mere grumblings, give some particulars as to the complaint, and is timely), but was merely an intention to make a claim rather than making a claim. The judge held that this distinction was improper and that the letter was sufficient to meet the conditions of the contract.
Note: This decision has been overturned. Our summary of the decision rendered by the Court of Appeal can be found HERE.Continue Reading >
Limen Structures Ltd v. Brookfield Multiplex Construction Canada Ltd. 2016 Ont SCJ (MC)
Subcontractor and general contractor were claiming millions of dollars in delay claims against each other. The general brought a motion under section 67 of the Construction Lien Act for leave to bring a summary judgment motion on the basis that the subcontractor failed to give proper notice of delay and notice of particulars of its delay claim as required by the contract. The general claimed that the motion would expedite the resolution of the issues in dispute. The Master agreed. The motion would resolve the issue of notice in advance of the trial, reducing the issues for trial, and confining damage quantification to the period for which proper notice was given. The Master noted that the quantum in issue was irrelevant to the test for leave, as was evidence on the merits of the motion. As an aside, the Master noted that, as a result of the reference to her, she had all the powers of a judge to determine the summary judgment motion, including the powers conferred by rules 20.04(2.1) and (2.2).Continue Reading >