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Solicitor’s Charging Order

Dalcor v. Unimac Group Ltd. 2017 Ont SCJ

Lawyers were instrumental in obtaining money for a contractor from an owner. However, the bonding company, whose security was perfected under the PPSA, claimed priority over a subsequent charging order. The judge noted that a charging order arises by virtue of section 34 of the Solicitors Act and at common law. He interpreted the PPSA to be inapplicable to a charging order and held that the “first in time” rule could not apply because a solicitor’s charging order cannot be registered. The charging order had priority over the security.

Solicitor’s Charging Order

Fancy Barristers, P.C. v. Morse Shannon, LLP 2017 Ont CA

Lawyer #1 retained lawyer #2 to assist in pursuing a personal injury matter that lawyer #1 took on a contingency basis. Lawyer #1 fired lawyer #2 without payment to lawyer #2 for its time and disbursements and without an undertaking to pay lawyer #2 once funds were received from the action. Section 34 of the Solicitors Act provides for a charge on property recovered or preserved through the instrumentality of a lawyer. The court held that it was not necessary that lawyer #1 had actually received the funds; it was sufficient that there was a chose in action for the funds. The court allowed the charging order to ensure that the fees and disbursements of lawyer #2 would be paid out of the eventual proceeds from the action.

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Retainer Disputed

Meehan v. Good 2017 Ont CA

Lawyer retained to assess account of another lawyer; lawyer not retained to advise client regarding commencement of a legal action against other lawyer for negligence; lawyer advised to client to seek legal advice elsewhere regarding negligence claim. Motions judge did not make a finding of fact as to whether lawyer had advised client of the appropriate limitation period. Court of Appeal stated that a written retainer is important to define the relationship between lawyer and client; however, if the client alleges that the lawyer’s duty of care arises out of and extends beyond the retainer, the court must examine all relevant surrounding circumstances, including the form and nature of the client’s instructions and the client’s sophistication, to determine whether a duty is owed beyond the 4 corners of the retainer. Court determined that there was a genuine issue for trial.

Mortgage-Lien Priority

Jade-Kennedy Development Corp (Re) 2016 Ont SCJ

Priority dispute between mortgagees of a bankrupt developer and lien claimants. The lien claimants had priority over the sale proceeds of land for the usual 10% of mortgage advances. The issue was whether they had priority in excess of that amount (i.e. was their initial priority under s.78(1) of the Construction Lien Act reversed if the mortgages fell within the provisions of s.78(6) of the CLA). S. 78(6) deals with a “subsequent mortgage,” which is a mortgage registered after the first lien arises (i.e. in essence, as soon as the 1^st work is performed on the land). Under s.78(6), a subsequent mortgage has priority if the advance under it is made before registration or notice of a claim for lien. The court held that these are the only conditions a mortgage must meet for priority; there is no need for due diligence. Further, an advance includes deductions for all other amounts that the mortgagor is contractually liable to pay, such as legal fees and interest. However, a mortgage given to secure a prior debt is not an advance and does not qualify for priority.

Trust Fund

620369 Ontario Inc. v. Alumpro Building Products Plus Inc. 2014 Ont SCJ

Plaintiff supplier provided defendant contractor with roofing materials that the contractor used either in its contracts with owners or re-sold to roofers and others. The supplier did not have information as to the improvements for which its products were used. The supplier relied on the criteria set out in Sunview Doors 2010 Ont CA to prove a breach of trust: a) contractor was a general or sub; b) supplier supplied materials to projects on which the contractor was a general or sub; c) contractor received money for the projects; and d) contractor owed the supplier for those materials. On a summary judgment motion, the contractor provided little evidence to rebut the plaintiff’s scant, but more fulsome, evidence. The contractor’s inability to put its best foot forward was sufficient for the judge to find that the 4 elements were proven. The sole director was also held liable under s.13 of the CLA.

Specific Performance

Gillespie v. 1766998 Ontario Inc. 2014 Ont SCJ

Vendor backed out of sale of farmland/residential/commercial property for no good reason. Purchasers sued for specific performance. Judge had to be satisfied that a) Property was unique (both subjectively and objectively) and that no substitute was readily available; (b) damages would be comparatively inadequate to do justice; and (c) the purchasers had established that, from the start, they had a fair, real, and substantial justification to claim specific performance and not be required to purchase a replacement property to mitigate their damages. Because of the nature of the property, the judge held that the property was unique both subjectively and objectively and that the claim for specific performance was reasonable. He also held that, since the property had not increased much in value, an award of damages to the purchasers would be minimal, enabling the vendors to back out of the transaction without any real loss. The judge granted specific performance.

Summary Judgment – Not Always the Best Answer in Employment Cases

Summary judgment motions can be a valuable tool in the arsenal of an employee seeking a quick resolution of a wrongful dismissal claim. If successful, the employee will have substantially reduced the time and expense associated with his claim. At the very least, since the Supreme Court of Canada’s decision in Hyrniak v. Mauldin, Courts have shown themselves increasingly willing to resolve some if not all of the issues in an employment case by way of summary judgment. However, employees need to take heed: not all wrongful dismissal claims are conducive to summary judgment, even with the Court’s expanded powers under Rule 20. The decision in Dawson v. Colt Food Services Limited is a case in point.

Mr. Dawson was the food and beverage manager for the defendant employer, had been employed for almost 13 years and was 56 years old. Following a meeting with the employer’s owner to discuss ongoing performance issues, Mr. Dawson believed that his employment had been terminated. The day following the meeting, Mr. Dawson called in sick and then sent an email requesting the terms and conditions of his termination. Shortly thereafter, Mr. Dawson provided an ambiguous medical note to the employer indicating that he was off work for medical reasons and would be reassessed in the near future. Mr. Dawson never returned to work and the employer took the position that he had abandoned his job.

Limitations Act

Conde v. Ripley 2015 SCJ

Wife attacked husband’s transfer of property so that there would be assets to satisfy a support award. The judge held that a claim under the Fraudulent Conveyances Act is a claim for the recovery of land. It is a 10 year limitation governed by the Real Property Limitations Act and not the Limitations Act, 2002. The judge stated: “It would be inconsistent in the extreme if a two year Limitations Act, 2002 limitation period were to be applied to an FCA action seeking to invalidate a subsequent transfer of an interest in land while the claim to the land itself is subject to a ten year limitation period. The action to set aside the subsequent transfer of the land would be barred before the action to claim the interest is barred, a result which appears contrary to common sense.” There is still a problem, pursuant to Stone v. Stone 2001 Ont C.A. to fit within “creditors or others”, particularly when the plaintiff is not a creditor at the time of the transfer. In this case, however, the claimant was involved in litigation with the transferor at the time of the transfer and was therefore a creditor. This case was decided shortly after Stravino, but no mention was made of it.

Limitations Act

Stravino v. Buttinelli 2015 Ont SCJ

Husband attempting to join children in Family Law Act application against wife, claiming that wife fraudulently conveyed land to children. Judge stated that the fraudulent conveyance claim was, unlike a claim for a constructive trust, not a claim seeking entitlement to ownership in land, as was the case in McConnell v. Huxtable, but rather a claim, in this case, to have the value of property available for equalisation. Accordingly, the basic 2 year limitation period governed, rather than the 10 year limitation period under the Real Property Limitations Act. We can understand why husband would want the property in wife’s name so that property would be available to him to satisfy a support award. We cannot understand why it would be relevant to equalisation of net family property. The separation date occurred long before the impugned transfer of the property and equalisation is calculated as of the separation date. We would distinguish this case from the non-family law scenario in which there is not merely a request that property be transferred back for purposes of an accounting, but a request that property be re-transferred so that it can be seized by creditors.