
Legal Blog:
Irving Fox Speaking at Restaurants Canada’s Rapid Recovery Series Webinar: Navigating Landlord and Tenant Agreements
On June 10, 2020, Irving Fox, the head of our business law and commercial real estate groups, spoke at Restaurants Canada’s Rapid Recovery Series: Navigating Landlord and Tenant Agreements. Irving discussed issues concerning termination of a commercial lease and distress. More specifically, he addressed applicable legislation, types of defaults, landlords’ remedies, and tenants’ options.
You may find the presentation here.
Continue Reading >Security for Costs
Prasher Steel v. Gateman-Milloy Inc. 2020 Ont SCJ
In a construction case, with a bond, the defendant moved for security for costs. The defendant demonstrated that the plaintiff had insufficient assets to pay costs. The shareholders of the plaintiffs did have equity in their house, but were unable to obtain financing to unlock any of that equity. The judge ruled that the plaintiff had a real possibility of success against the defendant and that the plaintiff was impecunious. The judge refused the order for security, holding that such an order would preclude the impecunious plaintiff from pursuing what appeared to be a meritorious claim.
Continue Reading >Quantum Meruit
Nijjar v. Feldman 2020 Ont SCJ
A real estate salesperson had been acting for his broker to obtain financing for a corporation. The salesperson left the employ of the broker, after he had obtained the initial letter of intent from the prospective mortgagee, and the broker and the corporation agreed to terminate the listing. The salesperson continued to assist the corporation in closing the transaction, but was not able to enter into another agreement with the corporation; they disagreed as to its terms. The judge held that there was no contract, but that the salesperson should be paid for his work after he had left the broker. Since, at one point, the corporation had offered to pay the salesperson $65,000, rather than the claimed $100,000, that was enough to quantify the services at $65,000. The reasons did not indicate why the settlement discussions were admitted into evidence.
Continue Reading >Document Production
Falcon Lumber Limited v. 2480375 Ontario Inc. cob GN Mouldings 2020 Ont CA
The defendant continually breached orders requiring production of documents. The motion judge struck out its statement of defence and ordered costs of the motion against the defendant’s lawyers. The Court of Appeal upheld the decision and set out a number of factors when considering whether to strike out a party’s pleadings and indicated that these factors should include the extent to which the defaulting party’s conduct has increased the other party’s cost of litigating the action and delayed the final adjudication of the case on its merits. The court noted that the moment to make the order to strike will come much earlier in a simple claim for a modest amount than in a more complex one. In that regard, the court referenced the claim of $131,000 as modest. The Court also upheld the costs decision against the lawyers. They requested and received and adjournment ultimately determined to be no more than a delay tactic, provided final production of documents that were improperly redacted, and were complicit in the flagrant disregard of the Rules. Further, the Court noted that the lawyers were in a conflict of interest by acting for both the client and themselves on the appeal.
Continue Reading >Susanne Balpataky’s Article: “COVID-19 – The Black Swan” on MBOT Magazine
Susanne Balpataky, as MBOT Chair 2020, wrote MBOT Magazine’s opening message for its spring 2020 edition. In a hopeful tone, Susanne reminds Mississauga’s thriving business community of their resilience and MBOT’s role in supporting them through this difficult time. In her message, Susanne also highlights that COVID-19 might have come unexpectedly, but we must remain positive that we will emerge stronger than ever.
Read Susanne’s article here.
Continue Reading >Realty Default
Real estate default cases keep coming. The issues are often the same: who breached, who was ready willing and able to close, was repudiation accepted, what happens to the deposit?
Azzarello
The case of Azzarello v. Shawqi 2019ONCA820 had all of the issues, as well as an unusual one dealing with the deposit. Purchaser was unable to close the transaction and requested an extension, which was given. On the extended closing date, purchaser requested a further extension. Vendors agreed, but on terms that, if not met, purchaser would be in default of the agreement. Purchaser did not respond. Vendors did not tender. Ultimately, vendors re-sold the property at a significant loss.
Continue Reading >Comma (2)
In our February 2020 newsletter, we commented on the Ontario Superior Court of Justice decision in Austin v. Bell Canada. In that case, an interpretation of a pension plan revolved around the placement of a comma. After a thorough review of grammatical rules of interpretation, the motion judge decided that the terms of one section, on its face, would indicate a construction that would result in a rounding to one decimal point, as set out in the Consumer Price Index. However, the judge then reviewed another provision of the plan and, based on the evidence he received, decided that a one-decimal rounding policy would render that section meaningless. He therefore decided that there should be 2-decimal rounding. This decision, deciding between a 1.49% or 1.5% interpretation, was not trivial. The plan went on to note that whatever the percentage, it would be rounded to the next whole number (i.e. 1% or 2%). A 1% difference in an annual increase of payments in a pension plan for 35,000 pensioners would, according to the Ontario Court of Appeal, result in an increase in the first year of over $10 million and, for the long term, over $100 million.
In our newsletter, setting out the facts, the interpretation, and the decision, our main complaint lay with the drafting of the pension plan and our contention “that many agreements are simply drafted improperly.” In this case, Bell Canada was successful at the motion level and disaster was averted.
Continue Reading >PJI
Prejudgment and post-judgment interest are set in accordance with the Courts of Justice Act. These interest rates are relatively low. Often, in loan agreements and other contracts, the parties set an interest rate that is higher than the rates set under the Act. These are referred to as contractual rates. The Act gives a judge discretion to allow a rate higher or lower than that provided in the Act – but there has to be good reason to do so.
In Capital One Bank v. Carroll, a 2019 decision of the Ontario Divisional Court, a deputy judge of the Small Claims Court, without giving any reasons, refused to award interest at 19.8% as set out in the contract for a MasterCard credit card.
Didn’t Know
We always enjoy reading collection action decisions in which the defence is somewhat unique or, in some cases, utterly ridiculous. These decisions have usually been decided on a summary judgment basis. In this regard, we report on Business Development Bank of Canada v. VDF Wine Importers, a 2019 decision of the Ontario Superior Court of Justice.
Guarantee
The initial facts were not at all unusual. The bank loaned $100,000 to a corporation and the sole shareholder of the corporation guaranteed the loan. The corporation defaulted and the bank sued the guarantor for payment. By the time of the motion for summary judgment, the amount outstanding was only $25,000.
Continue Reading >