Legal Blog:

Limitations

Winmill v. Woodstock (Police Services Board) 2017 Ont CA

The plaintiff claimed he had been assaulted by the police. More than 2 years after the assault but less than 2 years after the plaintiff had been acquitted for assaulting the police and resisting arrest, the plaintiff commenced his action against the police. A limitation period does not start to run until “having regard to the nature of the injury, loss or damage, a proceeding would be an appropriate means to seek to remedy it.” “Appropriate” means legally appropriate, not subjectively appropriate for delay or other tactical reasons. The majority held that it made sense for the plaintiff to postpone deciding whether to make a battery claim against the police until his criminal charges had been resolved. The majority noted that the charges of assault and resisting arrest and his tort claim of battery were 2 sides of the same coin. The majority noted that, notwithstanding the “legally appropriate” test, one still had to view the factual setting in light of the abilities and circumstances of the person with the claim and that a plaintiff’s individual circumstances may mean that the plaintiff cannot reasonably bring an action at the time it first materialises. Based on that, the majority held that the discoverability date was the date upon which the plaintiff had been acquitted of the charges against him.

Certificate of Pending Litigation

Jodi Feldman Professional Corporation v. Foulidis 2018 Ont SCJ

A lawyer was suing her client for unpaid fees. Shortly after pleadings were closed, the lawyer learned that the client had granted her former brother-in-law a mortgage against title to the client’s property. The lawyer moved to amend the pleadings claiming a CPL and a declaration that the mortgage was fraudulent. Given that the lawyer did not already have a judgment against the client, the lawyer had to show (using the Grefford test) (a) there was a high probability that the lawyer would successfully recover judgment in the main action, (b) evidence to demonstrate that the impugned transaction was made with the intent to defeat or delay creditors, and (c) that the balance of convenience favoured the issuance of a CPL. The Master had refused the CPL. The motion judge overturned that decision. The Master had used the high probability test regarding the success of the action to the 2^nd criterion relating to evidence and this was improper. The lawyer only needed to prove that there were triable issues as to whether the impugned transaction was carried out with the intent to defeat or delay creditors.

Garnishment on Indemnity

Alharayeri v. Wilson 2018 Ont SCJ

A director had an indemnification from a corporation for damages that the director might suffer while acting as a director as long as the director was not negligent or dishonest and had not committed a fraudulent act. The director was held liable to another shareholder for the director’s machinations in diluting the shareholder’s stake in the corporation. The director was judgment proof. The plaintiff then garnished the corporation, even though the plaintiff had not obtained a judgment against the corporation in his first action against the director and others. The judge allowed the garnishment and held the corporation liable to pay the judgment amount. The judge noted that the debt owing by the corporation to the director did not have to be a judgment debt, just a debt, and, based on the indemnification, the judge held that there was such a debt.

Uncooperative

Garnishment is a relatively simple concept. A debtor does not pay its judgment debt to a creditor; the creditor issues a notice of garnishment to a third party (the garnishee) who owes a debt to the debtor; and the garnishee pays to the Sheriff that debt. The Sheriff then distributes that amount rateably to all execution creditors. Garnishment works well until the garnishee balks at paying the money. A garnishee will not pay for many reasons: the garnishee does not actually owe the money to the debtor or at least believes that it does not; the garnishee owes the money, but does not have it readily available; the garnishee owes the money, but is in cahoots with the debtor and does not want to pay, etc.

What does the creditor do when the garnishee gives a negative response or no response? That question was answered in Couper v. Vitaquest International, a 2017 decision of the Ontario Superior Court of Justice.

Adjournments

Adjournments are requested too often and granted too easily. Sometimes adjournments are granted without costs to the other party; sometimes they are granted with costs thrown away. Rarely are they refused. Judges do not like to see a party prejudiced because of a problem in attending a court date.

Now and then, however, adjournments are refused. Such was the case in Royal Bank of Canada v. Puzzolanti, a 2018 decision of the Ontario Court of Appeal.

Good Faith

The concept of good faith (Bhasin v. Hrynew [2014] 3 SCR 494) is a lifeline to litigants whose position is otherwise tenuous. When in doubt, allege that the other party did not act in good faith. We have already commented on the use, usually misuse, of the concept of good faith (see newsletters: June 2018 and February 2017). Purchasers, or their counsel, seem to think that, even when time is of the essence, a vendor must, upon demand, extend the closing time and to do otherwise is bad faith. The courts disagree with this proposition. The latest case is Time Development Group Inc. v. Bitton 2018 ONSC 4384. In accordance with his usual methodology, Justice Paul Perell sets out the facts and then analyses all facets of the law in the area, even those that are not necessarily crucial to the decision. Sometimes, his decisions are the equivalent to written materials submitted in conjunction with a continuing professional development lecture.

Background

The vendor had assembled three contiguous properties. The purchaser wanted to buy those properties and develop them. The parties entered into an agreement of purchase and sale, which was subject to the purchaser successfully obtaining a zoning minor variance and a road allowance. The agreement was amended three times for various reasons. At the end of these amendments, the vendor had agreed to take back a two-year $3 million second mortgage and a six-month $2 million third mortgage and the closing had been extended from October 31, 2016 to July 31, 2017.