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Dec
21
2019

Allison Speigel Quoted on CTV News Article on the Difficulty of Collecting Judgment Debts

Allison Speigel, partner at Speigel Nichols Fox LLP, with experience in litigating civil fraud and collection-related claims, addresses some of the difficulties of collecting judgment debts. Allison highlights that legal problems do not end simply because a judgment creditor has won in court. One of the most uncomfortable truths is that many judgment debtors engage in fraud to avoid paying their debts.

Read the full article here.

Screenshot of CTV News website with article quoting Allison Speigel.

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Dec
21
2019

Allison Speigel – Guest Speaker on NewsTalk1010 on the Challenges Around Collecting Debt

On December 12, 2019, Allison Speigel, partner at Speigel Nichols Fox LLP, was invited as a guest speaker on NewsTalk1010 to discuss the difficulties of collecting a judgment debt.

You can find the podcast here.

Screenshot of the Newstalk1010 website with Allison Speigel's interview.

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Dec
10
2019

Tender

Reaction Distributing Inc. v. Algonquin Highlands (Township) 2019 Ont CA

City disqualified the contractor’s tender because of non-compliance with a contract requirement that all tenders be submitted in a sealed envelope that had been marked, on the outside, with the tenderer’s name and return address. The contractor had submitted its tender in a three-ring binder contained in a box and the box did not have a name and address on its outside. The City had the power to waive the non-compliance, but did not do so and awarded the contract to the only other tenderer. The trial judge found that the City’s disqualification constituted a breach of tender contract A and awarded the contractor its lost profit of $71,000. The Court of Appeal agreed with the trial judge that substantial compliance was the test to be applied in considering tender requirements; it noted that the trial judge’s finding, that the City’s disqualification resulted in the contractor not being treated fairly, was a finding of fact that would not be interfered with without palpable and overriding errors, which were not present in this case.

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Dec
10
2019

Punitive Damages & Fiduciary Duty

6071376 Canada Inc. v. 3966305 Canada Inc. 2019 Ont SCJ

The corporate defendant obtained a 40% investment from the plaintiffs for a down payment involved in the purchase of a commercial property. The corporate defendant was wholly owned by its principal. The defendants incorporated another corporation solely for the purpose of holding title to the property and 3 years later caused that corporation to sell the property for a profit. The corporate defendant used the sale proceeds to buy a 2nd property and ultimately sold that property for an even bigger profit. All the while, the principal was actively lying to the plaintiffs, who believed that the first property was still being held in trust for them. The judge held that the corporate defendant breached its fiduciary duty and that the principal was liable as the corporate defendant’s alter ego; the principal directed, and caused, the misappropriation of the trust funds for his own purpose. The judge calculated the damages to be (i) 40% of the profit on the sale of the first property (ii) 40% of the net income produced while owning the first property, and (iii) punitive damages of $200,000 resulting from the outrageous and reprehensible activities of the defendants. The judge did not award 40% of the profit on the sale of the 2nd property; rather, he merely awarded prejudgment interest on the damages relating to the first property. He did so because he found that the parties’ original agreement did not reach beyond the plaintiffs’ participation as a 40% owner in the first property.

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Dec
10
2019

Bylaw Validity & Procedural Fairness

Cote & Son Excavating Ltd. v. Burnaby (City) 2019 BCCA

Bylaw noted that any contractor engaged in litigation with the City, during any period 2 years before the tender was to be given, was not allowed to tender a project. The plaintiff, who was involved with ongoing litigation with the City, moved to set aside the bylaw. The contractor argued that the bylaw improperly limited its access to the courts, contravening section 96 of the Constitution Act, 1867, the Charter of Rights and Freedoms, and the common law. The main attack was based on section 96, which has been interpreted to guarantee the core jurisdiction of provincial superior courts. The court held that (i) section 96 applied only if the legislation denied access in general to the courts and therefore impinged on the core jurisdiction of the superior courts; (ii) no specific section of the Charter of Rights and Freedoms protected the right of access to the civil superior courts; and (iii) the rule of law did not independently protect a right of access to the civil superior courts. The court noted that the bylaw was, in effect, a contractual clause that did not fall within section 96 and that there was no absolute right of access to the courts. Many contractual provisions, including mandatory arbitration clauses, discouraged access to the courts. The clause in the bylaw applied only to a small number of corporations bidding on public works contracts and they had a choice: litigate with the City and do no further business with it or do not litigate with the City.

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Dec
10
2019

Bylaw Validity & Procedural Fairness

Interpaving Limited v. City of Greater Sudbury 2018 Ont SCJ

City passed a bylaw stating that a bidder could be excluded from eligibility to submit quotations to the City if the bidder were involved in litigation with the City, documented evidence of poor performance existed, or the bidder had demonstrated abusive or threatening behaviour to City employees. Based on the bylaw, the City banned the plaintiff from tendering City projects for 4 years. The contractor contested the ban and the City reconsidered its decision. In the reconsideration, the City referenced and re-confirmed its prior reasons and added a few more. The plaintiff claimed that it was denied procedural fairness. The court held that the bylaw was valid; the City had essentially the same right as a business person to decide with whom it would do business. Further, the procedural unfairness involved in the original decision (because the plaintiff was not given a chance to make any submissions) was cured by the reconsideration process in which the plaintiff was allowed to make submissions.

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Dec
10
2019

Limitations

Zeppa v. Woodbridge Heating & Air-Conditioning Ltd. 2019 Ont CA

Mechanical contractor installed HVAC system in 2007; problems with the system arose immediately and were ongoing. By 2009, the owners were no longer relying on the contractor to remedy the problems. The action, commenced in 2012, was statute barred under the Limitations Act. It was irrelevant that the owners did not definitively know until 2010 that the problem arose from improper installation. Discovery means reasonable discovery rather than the mere possibility of discovery. The owners had sufficient facts in 2007 (subject to the contractor’s efforts to rectify the problems) to have prima facie grounds to infer that the contractor’s acts or omissions caused or contributed to the problems. The court held that the concept of fraudulent concealment did not apply, even if the contractor knew that its installation was improper, because, for fraudulent concealment to apply, the owners had to be ignorant of the cause of action that arose due to the contractor’s misconduct. In this case, the owners were not ignorant of the cause of action.

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Dec
01
2019

Unconscionable

Posted in Lawyers' Issues

We often read about agreements or portions of them that are unconscionable and should therefore be set aside. Most lawyers used to consider unconscionability in the same manner as some judges considered pornography (i.e. I cannot define it, but I know it when I see it). Unconscionability has been defined and that definition was applied in Heller v. Uber Technologies Inc. 2019 ONCA 1.

Two pieces of paper with the words "Bad" and "Good" written on them.

Class Action

The plaintiff driver was the representative in a class action claiming that Uber drivers were employees and that, in its treatment of them, Uber had breached the Employment Standards Act (ESA). Uber moved to dismiss the action, arguing that the drivers’ agreements mandated arbitration only. The driver argued that the drivers’ agreement was ineffective to preclude the class action because (i) the arbitration clause breached the ESA and, therefore, was an exception, under s. 7(2) of the Arbitration Act, to the mandatory nature of an arbitration clause and (ii) even if it were fully effective, it was unconscionable and ought not be enforced.

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Dec
01
2019

Sublease

Posted in Lawyers' Issues

How does a sublease differ from an assignment of lease? The answer to this question informs the final question: if a sublease ends at the same time as the head lease, rather than some time (even a day) before, does the tenant who subleased the premises retain any rights in the lease, in particular the right, granted in the lease itself, to exercise a renewal of the term. These questions were answered in V Hazelton Limited v. Perfect Smile Dental Inc. 2019 ONCA 423.

Keys in the palm of an outstretched hand.

Dispute

The lease had a term of seven years with a five year right of renewal. With about one year left in the original term, the tenant subleased the premises for the entire remainder of the term (no reversion for a day). The sublease specifically stated that the tenant had no right to the benefit of the renewal rights in the lease. The tenant attempted to renew the lease, with appropriate notice, but the landlord, who wanted the premises back, took the position that the tenant, having subleased the premises for the entire term, had assigned the lease and, therefore, had no right to extend the term.

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Dec
01
2019

Back Door

Posted in Collections

As a general rule, a creditor applying for a bankruptcy order will not be permitted to establish its case by compelling the respondent debtor to give evidence. May the creditor cross-examine the debtor on an affidavit that the defendant filed in a motion in a civil action and then use the transcript in the bankruptcy application? This question was answered in In re Gagnon, a 2019 decision of a Master of the Ontario Superior Court of Justice.

Scrabble tiles spelling out the word "bankrupt".

Proceedings

A creditor commenced an action for judgment on a debt and for a declaration for a fraudulent conveyance. On the same day, it also commenced an application for bankruptcy alleging the same fraudulent conveyance and the debtor’s alleged inability to pay his debts as they came due. The debtor defended both the application and the action. The creditor then brought a motion in the action for a certificate of pending litigation (CPL). When the debtor filed an affidavit in order to resist the motion, the creditor wanted to cross-examine on the affidavit. The creditor fully expected to use the transcript in the application, but, it explained, only for purposes of impeaching credibility, not to provide evidence to support its application for bankruptcy.

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