Legal Blog:

Promises

As every contractor knows (or should know), the Construction Act specifies (now) a 60-day time period to preserve a claim for lien and (now) an additional 90-day time period to perfect the lien by commencing an action and, if applicable, registering a certificate of action. An attempt to preserve or perfect the lien even one day late will mean you are out of luck. Or are you? What if a person higher up on the construction ladder promises payment if a contractor forgoes preserving or perfecting a lien – and then, after the limitation period has passed, reneges on that promise? The concept of promissory estoppel was discussed in J.D. Strachan Construction Limited v. Egan Holdings Inc., a 2019 decision of the Superior Court of Justice.

Guarantee

Business Development Bank of Canada v. VDF Wine Importers 2019 Ont SCJ

When sued by creditor, guarantor claimed that the guarantee was not enforceable because, when he gave the guarantee, he thought that he was a director and officer of the corporate debtor and, actually, was not. He argued that had he received independent legal advice, he would have discovered that he was not a director or officer and would not have signed the guarantee. The court held that the guarantee was not unconscionable and was not conditional upon the guarantor having a control or ownership interest in the corporate debtor. The court held that non est factum did not apply because the guarantor did not sign the guarantee as a result of a bank misrepresentation and, in any event, was careless in signing the guarantee. Finally, the court held that it was irrelevant whether the bank failed to follow its own “know your client” policies.

Stay of Action

Kaye v. Fogler Rubinoff LLP 2019 Ont SCJ

A client sued a lawyer alleging that the lawyer was negligent in preparing a tax plan and noting that CRA had re-assessed the client. The lawyer brought a motion to stay the action pending the client’s appeal of the CRA assessment. The court stated that the tax and civil actions had substantial overlapping issues and shared the same factual background and that a successful appeal in the tax action would render moot the civil action against the lawyer. The court held the benefit of forestalling an unnecessary action, outweighed the prejudice of the plaintiff being delayed for a year if its tax appeal were unsuccessful.

Time of Essence

AgriMarine v. Akvatech 2018 Ont SCJ

A letter agreement, with time of the essence, required the purchaser to pay $2.5 million to the vendor for the designated purpose of retiring all of the vendor’s debt to a particular creditor. The transaction did not close on the targeted closing date because the amount being paid was $100,000 short of the amount necessary to retire the debt. On closing, neither party regarded the other as having breached the contract and there was no acceptance of any breach. One month later, the purchaser purported to unilaterally set a new closing date at 4 days’ hence. The judge noted that there was no breach at the targeted closing date and that, accordingly, the agreement was not terminated, but time was no longer of the essence. The judge held that, when the purchaser attempted to set a new closing date (according to King v. Urban Transport Ont CA), it could not do so because it was still not in a position to close the transaction and, regardless, a closing date 4 days’ hence was not reasonable.

98.1 CHFI’s Darren & Mo’s Work Perk at SNF

Last week, our Law Clerk, Rose Avarino, won 98.1 CHFI’s Darren & Mo’s Work Perk Contest. On Thursday, April 26, 2019, CHFI’s morning show hosts, Darren Lamb and Maureen Holloway (Mo), came to our office along with their effective and cutest stress management team – two adorable Labrador puppies!