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Allison Speigel’s TLOMA Today Article

Allison‘s article has been featured in the March issue of TLOMA Today. Click here to read: Calling millennials lazy is just an excuse not to change

Another Termination Clause Found to be Unenforceable

The long-awaited decision in Wood v. Fred Deeley Imports Ltd., 2017 ONCA 158 has now been released and could have far-reaching implications for employers.

Facts

In April 2015, Wood’s employer, Fred Deeley Imports Ltd. (“Deeley”), sold its assets to Harley-Davidson and therefore gave notice to all its employees, effective May 1, 2015, that their employment would terminate on August 4, 2015. As at the date of termination, Wood was 48 years old and had been employed for 8 years and four months. In addition to being paid her salary and benefits for the 13 weeks of working notice, Wood was paid a lump sum amount equivalent to 8 weeks’ pay. Accordingly, Wood received a total of 21 weeks’ combined notice and pay in lieu thereof. During the 13 weeks’ working notice, Deeley also made the required contributions to Wood’s health and dental plan.

The day after she had commenced her employment, Wood signed an employment contract (the “Contract”) containing a termination clause as follows:

“(The company) is entitled to terminate your employment at any time without cause by providing you with two weeks’ notice of termination or pay in lieu thereof for each completed or partial year of employment with the company. If the company terminates your employment without cause, the company shall not be obliged to make any payments to you other than those provided for in this paragraph… The payments and notice provided for in this paragraph are inclusive of your entitlements to notice, pay in lieu of notice and severance pay pursuant to the Employment Standards Act, 2000.”

Following her termination Wood sued Deeley alleging that the Contract was unenforceable and that she was entitled to 12 months’ pay in lieu of notice. Wood brought a summary judgment motion that was dismissed. Wood then appealed the motion judge’s decision.

Solicitor’s Negligence

Jarbeau v. McLean 2017 Ont CA

Homeowners purchased a leaky house and sued the builder, but did not sue the engineer who negligently certified the design. The lawyer acting for the homeowners was negligent in that regard when the limitation period proscribed the action against the engineer. The homeowners settled against the builder for $75,000 (because they were worried that the builder had no money), which amount barely covered the costs of the action. The homeowners sued the negligent lawyer for their damages for failure to sue the engineer, who ultimately admitted that he was negligent. The court held that the proper measure of damages was not based on a loss of chance; that would be appropriate only if practically impossible to determine what would have happened but for the negligent conduct. In this case, they had a trial within a trial to prove, on balance of probabilities, that the engineer would have been held liable. As soon as the homeowners passed the “but for” test, they were entitled to 100% of their damages, not reduced by any percentage when the degree of probability was between 50% and 100%. The Court awarded the damages based on the cost of repair rather than the diminution of value of the property. The court did not reduce the award by the amount received from the builder.

Damages – Punitive

Craig v. Dubin 2016 Ont SCJ

Son-in-law defrauded the father-in-law’s accounting practice by setting up a dummy name and style almost identical to father-in-law’s name and style and diverting clients’ cheques into a dummy bank account. Father-in-law was alerted when a client had a problem with an account. The judge awarded the full amount taken plus an additional $50,000 in punitive costs plus full indemnity costs, subject to offers to settle. The judge noted that if son-in-law were charged criminally, he could apply to seek relief from the $50,000 punitive costs award.

Costs – Joint and Several Liability

Girgis-Boktor v. Reddy 2016 Ont SCJ

Four defendants brought a motion to have the plaintiff’s lawyer disqualified. The motion was dismissed with $50,000 awarded in costs. One defendant wanted the costs awarded to be on a several basis so that he was only liable for 25%. The general rule is that liability for costs is imposed on a joint and several basis unless there is a reason why the court, in exercise of its discretion, should order otherwise. The judge held that the liability should be joint and several; he felt that the risk of non-collection should lie with each defendant rather than the plaintiff.

Section 39 Request for Information

Valard Construction Ltd. v Bird Construction Co. 2016 Alta CA

Same situation as in Dolvin Mechanical v. Trisura 2014 Ont SCJ only the bond was taken out by the electrical subcontractor (the principal) in which the obligee was the general contractor. The bond surety denied coverage because the subsub applied for payment on the bond past the time limitations set out in the bond. The subsub sued the general contractor claiming that it should have notified the subsub of the bond’s existence. As in Dolvin, the majority held that an obligee had no duty to inform the bond beneficiaries of the bond’s existence. The minority held that the principal had a fiduciary duty to post the bond at the construction trailer so that subsubs would know about it.

Offer to Settle

Hydrastone Inc. v. Clearway Construction Inc. 2015 Ont SCJ

Defendant offered to settle for $75,000 plus interest. Offer was given 8 days before trial. Master awarded $39,000 after trial and assessed the plaintiff’s costs throughout at $33,000. Master awarded all costs to the plaintiff, stating that rule 49.10 did not apply. She felt that the all-in settlement amount rendered the amount vague. The judge overturned that decision. The award of $72,000, even assuming that the plaintiff should receive its costs of trial, was still $3,000 less than the defendant’s offer. The plaintiff was given its costs to the date of the offer and the defendant was given its cost from the date of the offer. Note: the Court of Appeal in Rooney v. Graham (2001) opined that, when comparing an all-in offer plaintiff offer to the actual award, there should be a mini assessment of costs to the date of the offer to determine whether the offer beat the award.

Tim Morgan’s NOW Toronto Article

Tim‘s newest article was published in NOW Toronto. Click here to read: Frequently asked questions about legalizing marijuana edibles

Allison Speigel’s News Talk 770 Interview

Allison was recently interviewed on Danielle Smith’s radio show on News Talk 770. Click here to listen to: Calling millennials lazy

One Rung

No. We are not talking about a bell. We are referring to rungs of a construction ladder. The Construction Lien Act trust provisions are set up to ensure that a beneficiary of a trust, one rung down the ladder, has a right of action against the trustee, with whom that beneficiary contracted, one rung up the ladder. That has not stopped subcontractors, two rungs down the ladder, from taking a run at an owner or subsubs from taking a run at a general. One such run was taken in Robert Nicholson Construction Co. v. Edgecon Construction Inc., a 2016 decision of the Ontario Divisional Court.

Unusual

An owner owed its general $1.3 million. For reasons of its own, the general directed the owner to pay those funds to a corporation associated with the general who had acted as a construction manager for the project. A sub, whom the general had failed to pay $141,000, was not pleased to learn of the “misdirected” revenue.

For purposes of the general’s trust liability to its unpaid subs, it mattered not that the general directed the owner to pay money to its associated corporation. The general would still be deemed to have received that money and would still be deemed to have held that money in trust for its subs. However, this did not satisfy the sub, who, after obtaining default judgment against the general, was unable to collect the judgment debt.