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Legal Blog:
Jun
23
2021
Costs Assessment
1632093 Ontario Inc. v. Condominium Corporation No. 74 2020 Ont CA
The judge was about to order interest at 24% per year in accordance with the terms of an invoice but, after he realised that the statement of claim had requested only Courts of Justice interest, he declined to order the higher interest. Because success was divided on a dollar and cents basis, the judge ordered that no costs be paid – even though he granted the plaintiff a judgment of $62,000. The Court of Appeal dismissed an appeal from the defendant, but allowed the plaintiff’s cross-appeal regarding costs. Costs cannot be awarded on a distributive basis. When the matter was sent back to the trial judge, the trial judge ordered costs in favour of the plaintiff.
Continue Reading >Jun
23
2021
Breach of Trust
Electro-Works Ltd. v. Fogler, Rubinoff LLP 2021 Ont SCJ
Lawyers had received settlement funds on behalf of a contractor who ultimately went bankrupt. Some of these funds were paid to subcontractors, some went to the contractor, and some were used to pay the lawyers’ account for work that it had performed for the contractor. The plaintiff subcontractor had not been paid because the contractor had informed the lawyers that no money was owed to that subcontractor. The plaintiff subcontractor successfully sued the lawyers for the amount they applied towards their account based on the lawyers being in knowing receipt of trust funds.
Continue Reading >Jun
21
2021
Will Ambiguity
Barsoski v. Wesley 2020 Ont SCJ
A will required the trustees to hold the testator’s house and contents as a “home” for a beneficiary during his lifetime. The will established a $500,000 fund to ensure that the home was professionally maintained. The will provided that if the beneficiary was no longer living in the home, the home was to be sold, but the fund was to be used for the beneficiary’s living expenses. The judge had to decide whether the terms of the will granted a life estate or merely a license to live in the home. This decision was important because the beneficiary was seemingly not living in the home; rather, an acquaintance of his was. The judge held that the will created a license to occupy the home. She then found that the determining event (i.e., no longer living in the home) was void for uncertainty (i.e., What does it mean? Primary residence, stay in the house one or two weekends, intend to live there?) and that the entire gift, being only a license, failed due to the uncertain terms.
Continue Reading >Jun
21
2021
Cost Plus
Infinity Construction Inc. v. Skyline Executive Acquisitions Inc. 2020 Ont SCJ
A cost plus, CCDC 3 contract does not grant an unlimited right to the contractor to perform any work it wishes. It still has an obligation to exercise a degree of diligence in carrying out work so as to not incur costs significantly higher than the estimate without prior approval. Courts will imply a term preventing payment for wasteful and uneconomic use of labour and materials and, if there is an estimate providing a guidepost, the final price should fall somewhere near the estimate – unless the contractor promptly notifies the owner of an expected overrun. In this case, the contractor’s work and invoices were satisfactory. Contractual interest did not run until the invoices were provided, but there was no reason to eliminate interest in its entirety.
Continue Reading >Jun
17
2021
Assessment of Damages
Akelius Canada Inc. v 2436196 Ontario Inc. 2020 Ont SCJ
The vendor improperly refused to close a transaction involving seven residential apartment buildings and, two years later, sold the properties at a substantially higher price. The judge granted judgment for $775,000 for the purchaser’s costs thrown away on the aborted transaction. However, the judge ordered nothing for the increase in the value of the land. The evidence indicated that, as of the day of closing, there was no difference between the purchase price and the value of the properties. The judge also refused to grant damages based on lost profit because the money that was to have been used to purchase the properties was used by the purchaser to purchase other properties and the purchaser was unable to provide evidence to set out the return that the purchaser had received from the purchase of the new properties. Accordingly, the purchaser had either not mitigated or had fully mitigated its damages in that regard.
Continue Reading >Jun
17
2021
Limitations
Canning Construction Limited v. Dhillon 2021 Ont SCJ
A lawyer had failed to perfect the plaintiff’s claim for lien. Ultimately, the defendant went bankrupt and the plaintiff was unable to collect any money. The plaintiff waited until 2019 to commence its action, even after being told by the lawyer in 2014 that the lawyer had failed to perfect the lien. The plaintiff claimed that it had not discovered its cause of action against the lawyer until it finally realised that it would receive no monies under the bankruptcy. The judge disagreed and held that, subjectively, after receiving a statement of affairs of the bankrupt, a reasonable corporation represented by counsel ought to have known that there would not be full recovery. The judge noted that the plaintiff could not say that it was legally inappropriate to bring the action because (i) the plaintiff had not relied on the superior knowledge of the lawyer regarding an attempt to ameliorate the loss, and (ii) although the plaintiff had pursued an alternative remedy to obtain its money, that alternative remedy was not sought against the lawyer, but against a third party.
Continue Reading >Jun
14
2021
Setting Down Delay
Tarion v. Dunhill Development 2019 Ont SCJ
The plaintiff brought a motion under Rule 48.14, just before the five-year deadline, for an extension to set the matter down for trial. The Master refused to grant the extension because (i) the plaintiff was not able to account for 3½ years of the 5 years of delay and (ii) did not adduce sufficient evidence to rebut the presumption that the defendant would be prejudiced if there were an extension. Although the plaintiff noted that its engineering firm was still active, it did not address whether the engineering witness were still available nor did it reference the evidence of the contractors who had performed the remedial work.
Continue Reading >Jun
14
2021
False Pretences
Shaver-Kudell Manufacturing Inc. v. Knight Manufacturing Inc. 2020 Ont SCJ
In a prior action, the defendant been held liable for substantial damages for committing a breach of confidence and misappropriating the plaintiff’s trade secrets. The defendant then assigned into bankruptcy. The plaintiff brought a motion seeking a declaration that, upon discharge from bankruptcy, the defendant was not released from the debt owed to the plaintiff because that debt arose from the defendant obtaining property by false pretences as set out in section 178(1)(e) of the Bankruptcy and Insolvency Act (BIA). The plaintiff also requested a declaration that the automatic stay under section 69(1) of the BIA be lifted. The judge gave a complete list of considerations and granted both requests. The judge found that the defendant was a deceitful wrongdoer who should be precluded from benefiting from his dishonesty. He found that, because s. 178(1)(e) applied, the plaintiff would be materially prejudiced if the stay continued to operate.
Continue Reading >Jun
11
2021
Scott Schedule
One Source Fire and Life Safety Inc. v. Prica Group Construction Management Inc. 2021 Ont SCJ
The parties were ordered to produce Scott Schedules. A Scott Schedule performs the function of particulars, giving definition to the pleadings and therefore to the relevance of questions on discovery. The order specified that the defendant had to identify separately all deficiencies, incomplete work, and work omitted by agreement with a detailed description of each item. The defendant stated that it was unable to fully comply with the order because it had hired a replacement contractor to correct all deficiencies and complete the work and did not get a breakdown of the various deficiencies and completion items. The plaintiff requested an order, upon which the judge agreed, prohibiting the defendant from advancing any new claims for deficiencies without leave. That order could have been far more stringent.
Continue Reading >Jun
11
2021
Discovery
Kaushal v. Vasudeva 2021 Ont SCJ
An affiant was being cross-examined on his affidavit in support of his position as a respondent in an oppression application. The cross-examination was being conducted remotely. The examiner affirmed with the affiant and his lawyer that, other than the interpreter and the lawyer, no one else was present in the room. It seems that this was a lie and that the affiant’s wife and son were both present during the cross-examination giving him hand and facial signals. Upon motion, the judge, who noted that this misconduct strikes at the very heart of the integrity of the fact-finding process, struck the affidavit in its entirety.
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