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Jul
30
2018
Deposit – Time of the Essence Clause – No Waiver
Mikmada Development Group Inc. v. Conlon 2018 Ont SCJ
The purchaser wanted a declaration that an agreement of purchase and sale was still in effect. The agreement, modified by subsequent amendments, stated that a condition had to be waived by 5 PM on May 30, 2016 and a 2nd deposit cheque of $130,000 be paid “upon” waiver. The purchaser waived the condition, but did not send the deposit cheque until June 1 to arrive on June 2. The seller had terminated the agreement on June 1. Further, the deposit cheque was uncertified – contrary to the terms of the agreement. Although the judge interpreted “upon” as meaning “as shortly afterwards as practical”, the sending of the cheque the next day by overnight delivery did not meet this criterion. The judge held that the seller had not waived the time of the essence clause by subsequent negotiation and gave 10 reasons for that decision. The most important reason was that, by the time of the subsequent negotiations, there was no agreement or clause to waive.
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30
2018
Agency – Inducing Breach of Contract – Summary Judgment
Maggiacomo v. Yumusak 2018 Ont SCJ
Son paid $100,000 as a deposit for the purchase of his first house. Father planned to sell his house to help son with the financing for the son’s house. Father’s sale did not take place because of a drop in real estate values. Accordingly, son defaulted in his purchase. His vendor claimed the $100,000 deposit and sued for additional damages against both son and father. The vendor acknowledged that neither father nor son had made pre-agreement representations that son was acting as father’s agent, but still claimed that son was the agent of father and claimed that, additionally, father induced son to breach his contract with the vendor. The judge dismissed the action by way of summary judgment. Father’s actions fell well short of what would be required to imply agency and father never intended to cause son to breach his contract. He was simply unable to provide the financing he had hoped to provide.
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30
2018
Court of Appeal Upholds Award of Substantial Indemnity Costs
Mars Canada Inc. v. Bemco Cash & Carry Inc. 2018 Ont CA
By way of minutes of settlement entered into before the plaintiff was to commence a threatened action for breach of its trademark, the defendant agreed that it would desist in further breaches of the trademark. The defendant resiled from that agreement and the plaintiff brought an action to enforce the settlement agreement. The defendant argued that enforcement of the agreement would be improper because the settlement was in restraint of trade. The court noted that the plaintiff had legitimate interests tied to its trademark rights. Further, the settlement of possible litigation was reasonable. It was in the interests of the parties, because it resolved their dispute and defined the scope of their trading rights, and in the public interest because it prevented confusion. The court agreed with the motions judge that the defendant’s duplicitous breach of the agreement, litigating a technical slip, altering a document, and engaging in tactics that increased costs were worthy of an award of substantial indemnity costs.
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27
2018
Off the Record: Court of Appeal Sets Aside Order Dismissing Action
Cunningham v. Hutchings 2018 Ont CA
Lawyers for the plaintiff got off the record. The order did not have the usual text set out in Rule 15.04 (8) & (9) warning the plaintiff that she had to appoint a new lawyer or indicate she would be acting in person. The plaintiff did not appear at the motion, possibly because she was not properly served. The motions judge dismissed her action. The plaintiff then moved to set aside the order, but the second motions judge concluded that he had no authority to do so. The Court of Appeal reversed. First, it held that the second motions judge did have authority. Second, it held that the deficiency in the order by which the lawyers got off the record and the lack of reasons given by the first motions judge in dismissing the action were sufficient to set aside his order.
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27
2018
Court Provides Analysis of s. 17(1) of the Mortgages Act
2468390 Ontario Inc. v. 5F Investment Group Inc. 2017 Ont SCJ
A mortgagor failed to pay principal after maturity. The mortgagee issued a notice of sale, claiming principal and interest plus an additional 3 months interest as bonus. The mortgagee had to rely upon section 17(1) of the Mortgages Act because the mortgage documents made no provision for this bonus. The judge held that section 17 gives a mortgagor an option to pay 3 months interest or to give 3 months’ notice of its request to pay arrears of principal. It does not give a mortgagee the right to make that decision. Once the mortgagee issued notice of sale, the mortgagor had a right to pay the appropriate amount to redeem the mortgage without the bonus. The decision would probably have been different had the mortgage documents required payment of 3 months interest.
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27
2018
Limitations & Expert Evidence in a Motion
T. Hamilton and Son Roofing Inc. v. Markham (City) 2018 Ont SCJ
A roofing contractor had waited more than 2 years after the contract had been completed before commencing its action for non-payment of $77,000. It argued that the limitation period has been extended because it had expected money to be paid once insurance issues were resolved involving a flood in the building upon which it had been doing its roofing work. The judge held that the time started to run when, after the roofer had issued its final invoice, the owner only provided partial payment. However, the owner ultimately did pay the deficiency holdback of $9,000 at a later date. The judge noted that this payment related to the contract price; it was not a payment of a different or additional contract and the fact that it was made in response to a new invoice for the deficiency holdback was irrelevant. The judge held that this was a partial payment, acting as an acknowledgement of liability and made pursuant to section 13(11) of the Limitations Act, 2002, which re-started the entire limitation period. This matter was dealt with on a summary judgment motion. The owner also defended the motion on the merits; it claimed that the roofing contractor caused the flood. Unfortunately, its only evidence came from its lawyer alluding to, but not even attaching, an expert report. The judge ignored the affidavit. Expert evidence on a motion must be tendered by way of an affidavit from the expert witness.
Continue Reading >Jul
27
2018
Damages – Minimum Performance Principle
Atos IT Solutions v. Sapient Canada Inc. 2018 Ont CA
A technology subcontract was comprised of different rushes of work. The contractor was allowed to terminate one of those tranches for convenience upon payment of an amount as set out in a formula in the contract. The contractor purported to terminate the entire subcontract for cause. The trial judge held that there was no cause and allowed full damages. The Court of Appeal reduced the damages for the portion of the contract for which the contractor could have terminated for convenience. The minimum performance principle was articulated by the SCC in Hamilton v. Open Window Bakery Ltd. Under that principle, a wrongdoer is liable for damages in accordance with the minimum or least expensive contract performance. The trial judge had also allowed damages for lost profits in the face of a clause that stated that there would be no liability for “indirect, special, consequential or punitive damages or for lost profits.” The trial judge interpreted loss of profits to mean loss of profits from other work foregone as a result of the breach. Relying on Satva and the principle of deference to a trial judge’s contract interpretation, the court refused to set aside this interpretation – even though it may have come to a different interpretation.
Continue Reading >Jul
24
2018
Rolling Limitation
Beccarea v. CNR 2018 Ont SCJ
A disability insurer refused an insurance claim for monthly benefits made by the survivor of a spouse. The survivor made claims in 2003, 2005, and 2010 and was rejected each time. The survivor commenced an action in 2012. The survivor claimed that her cause of action arose each time a benefit became due so that it could claim for 2 years previous and for subsequent monthly payments. In effect, the survivor stated that there were rolling limitation periods, each one being set when a new monthly payment should have been paid. The court noted that rolling limitation periods arise when the issue is whether specific payments being claimed have been made. It does not arise where the issue is settled at the start and the monthly payments depend upon the issue. Accordingly, once the claim was rejected the first time, the survivor had the right to sue and that right did not roll each time a monthly payment was due. Contrast this to a promissory note, with periodic payments, that does not have an acceleration provision. A cause of action arises each time a periodic payment is not made.
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24
2018
Court Refuses to Allow Materials to be Filed Late and in Breach of a Court Order
Royal Bank of Canada v. Sanders 2017 Ont SCJ
A case management judge had set a timetable, including a deadline for filing of responding motion material. The respondent did not comply with the deadline and sought leave to file a 2-volume motion record, factum, and book of authorities on the very day of the hearing. The motions judge refused to allow the material to be filed late, stating that “court orders must mean something. The evidence before me does not satisfy the test for leave to deliver materials late and in breach of a court order.”
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24
2018
Fundamental breach & damages
Cornelis Grey Construction Inc. v. Folz 2018 Ont SCJ
Home construction gone bad. Everything depended upon whether the owner or the contractor was in breach of the contract. The judge noted that, absent specific contractual provisions, most construction deficiencies and reasonable delays are to be treated as breaches of warranty and not as breaches of contract justifying termination. In this case, however, the judge held that, at the time of termination of the contract, there were significant construction defects. Adding to this problem, the contractor purported to bill for the balance of the contract price and to demand release of holdback when, under the Construction Lien Act, it was not yet due. When the owners did not pay the amount requested, the contractor cancelled the kitchen counters and cabinetry and pulled off the job. The judge held that the contractor breached its contract and was therefore liable for the amount the owners paid to the contractor plus the amount the owners paid to complete the work less the amount the owners were to have been paid under the contract. The judge disallowed the owners’ request for a markup on the amount they paid and for general damages for mental distress, annoyance, and disappointment. The judge did allow $10,000 in general damages for delay.
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