Legal Blog:

Third Party Action Leave

Tadiem v. Allied Properties Management LP 2019 Ont SCJ

The defendant by counterclaim wanted to add a third party to that counterclaim, but, because of rule 29.02 and the fact that the third party claim had not been issued within 10 days after the reply, the defendant by counterclaim needed to seek leave of the court. The plaintiff by counterclaim resisted the motion, alleging that the proposed third party claim did not disclose a reasonable cause of action. The Master and the judge on appeal noted that the third party claim did provide a proper cause of action, both in contract and in tort. The judge noted that, in deciding whether to grant leave, the court could consider whether the proposed third party claim was tenable, but that the threshold for establishing that was very low and akin to the test applicable in motions to strike. The third party claim was allowed.

Dora Konomi’s Article on Attorney at Work, “How to Stay Productive While Working from Home: 10 Tips that Work for Me”

As a young associate who is constantly learning to navigate the law, I am living in a brave new world with no precedent to guide me. The courts are closed. Our physical office is semi-closed. My dedication to work and my desire to continue serving our clients, however, are unchanged and remain wide open. The question becomes: How to stay productive in these unpredictable and tumultuous times?

Allison Speigel’s Open Letter to the Legal Profession & the Ministry of the Attorney General: How Courts Can Step up to Save Drowning Civil Justice System

Our civil justice system was drowning before the COVID-19 crisis hit. It was being pushed under by the weight of our overly complicated rules; a scarcity of resources; and, perhaps most importantly, a lack of innovation and willingness to change. It costs far too much and takes far too long to litigate a claim. Most Ontarians have been priced out of accessing civil justice.

COVID-19 UPDATE

Speigel Nichols Fox LLP remains open for business and is operating at full capacity. We are committed to helping our clients navigate this new ever-changing unwelcome reality. Our firm’s commitment to operating in a mostly paperless environment and our long-standing use of technology has made the transition to a remote environment fairly seamless. We will continue to provide our clients with the same high quality advice we always have.

Susanne Balpataky Discusses the “Top 5 Things Employers Need to Know During COVID-19” – Podcast

On April 12, 2020, Susanne Balpataky, a partner at SNF and employment expert, appeared on the radio show, the Doralicious Show for Agape Greek Radio, which aired in Toronto on 1690AM and in Ottawa on 97.9FM. She and Dora Konomi, an associate of SNF and the host of the show, discussed legal considerations for employers during COVID-19, including issues surrounding the laying off of employees, the 75% wage subsidy, constructive dismissals, and much more.

You can find the podcast here.

If you have any questions please contact Susanne at susanne@ontlaw.com.

Holdback Payment and Limitation – Updated

On April 2, 2020, I notified you that the Ontario government enacted a regulation (73/20) suspending any limitation period for the duration of the emergency (commencing March 16, 2020). This created major problems regarding claims for lien, perfection of actions, and the distribution of holdback funds. I advised: “Accordingly, for the moment, payors cannot safely pay holdback – even assuming that the payors have received the holdback from other payors one rung above them on the construction ladder.”

By order in Council made April 9, 2020, the Ontario government amended O Reg 73/20 by removing its applicability to the Construction Act and its regulations on and after April 16, 2020. By doing so, the government implicitly recognised that O Reg 73/20 did apply to the Construction Act to extend times to preserve and perfect a claim for lien. Accordingly:

Holdback Payment and Limitation

On March 20, 2020, the Ontario government suspended any limitation period for the duration of the emergency. A copy of that regulation can be found here. This is an example of the law of unintended consequences.

It makes perfect sense for the usual run-of-the-mill limitation period (i.e. commence an action within 2 years of the day that the cause of action arose, subject to discoverability). It does not make sense for the provision of the Construction Act mandating the date upon which a claim for lien must be preserved. This date is crucial to the flow of money on a construction project. Holdback cannot safely be released until after the basic preservation dates for all liens have passed, be it 45 days or 60 days depending on whether the old Act or the new Act applies. If a payor cannot safely pay the holdback – because a construction lien could be registered far beyond the basic preservation date (relying on the extension of that date in accordance with the limitation period suspension), then payors will not pay that holdback; similarly, construction financing will not be forthcoming for the holdback.

Time to Pay

A creditor and debtor hammer out a deal as to how much the debtor is going to pay. This could be done through negotiation or at mediation or pre-trial. The debtor and creditor paper that deal, but do not discuss what happens if the debtor then defaults. Big mistake. As in every agreement, the party who is getting a benefit from another’s actions in the future should always consider what happens in the event of a default.

For example, assume that the claim is $50,000. The creditor agrees to accept $20,000. If the agreement is silent as to default, then, if the debtor does not pay all or part of the $20,000, what are the creditor’s remedies? The creditor can certainly bring a motion for judgment based on the settlement and probably obtain a judgment for $20,000. However, a judgment is not payment and when the creditor made the deal to accept less than the amount originally claimed, no doubt the creditor probably wanted to be paid the reduced amount, not just receive a judgment for it. Depending on the wording of the agreement, the creditor might be able to ignore the deal and bring or continue an action based on the original claim – but that outcome is not guaranteed.

Lies, Damn Lies

At times, one reads a case and wonders “Why did the defendant not settle?” We asked ourselves this question while reading the decision in 6071376 Canada Inc. v. 3966305 Canada Inc., 2019 ONSC 3947 (SCJ). As we describe some of the lies of the defendant, remember: the defendant admitted almost all of the facts and, for those it disputed, it provided no documents to support its position.

Investment

An individual (“BadGuy”), through his one-man corporation, entered into an agreement of purchase and sale for a commercial Ottawa property. He arranged financing and agreed to guarantee the mortgage. BadGuy required a $584,000 down payment to close the transaction. He had 60% of it and needed an additional 40% (i.e. $233,600).