Legal Blog:
Additional Mortgage Charges
NRD Management Services Ltd. v. Litwin 2021 Ont SCJ
The defendant had obtained financing to refinance a mortgage in default, but took issue with the additional charges that the mortgagee was demanding to discharge the mortgage. In this case, the mortgagee had charged a three-month termination bonus after issuing power of sale. By removing the option from the mortgagor to redeem the mortgage, that interest would be a penalty and was disallowed. The judge also reduced some of the legal fees, deciding they were excessive, and some of the other fees, deciding that they were not necessarily applicable to the actual administrative costs incurred even though they were allowed under the mortgage document. Given that the motion success was divided, the judge did not award any costs of the motion.
Continue Reading >Stay of Judgment Awaiting Counterclaim
Heliotrope Investment Corporation v. 1324789 Ontario Inc. 2021 Ont CA
When a plaintiff is able to obtain judgment on its claim and a counterclaim still awaits trial, then, under Rule 20.08, judges still have the discretion to stay enforcement of the judgment until the counterclaim has been decided. The Court of Appeal has decided to use a multi factor test when deciding whether to exercise that discretion. The five factors are: the merits of the counterclaim; the relationship between the judgment and the counterclaim; conduct of the defendant and its litigation strategy; prejudice to the parties; and whether the terms that may be imposed for the stay can mitigate the negative effects on the plaintiff of being unable to enforce its judgment.
Continue Reading >Legally Appropriate-Limitation
Dass v. Kay 2021 Ont CA
Plaintiff was suing the defendant for fraudulently using the plaintiff’s name in an attempt to secure financing. The plaintiff knew about the fraud in August 2015, but did not commence its action until April 2018. It held off commencing the action because it was only in 2018 that it realised that it could not obtain financing on its own from a particular financial institution after being tarred with the improper actions of the defendant. The plaintiff relied on a condition in the Limitations Act that stipulated that the time for the limitation period did not start to run until it was appropriate to commence an action. The court noted that appropriate means legally appropriate, which is not the same as “practically advantageous.” There are many practical and technical reasons (e.g. a belief that the claim might be difficult to prove) a claimant may have for not commencing a proceeding at an earlier time although it is legally appropriate to do so. Legally appropriate does not include an evaluation of whether a civil action will succeed. It is sufficient that the plaintiff know that it has suffered some damage. It is not necessary to know the quantification of the damages (i.e. the sum of money payable to compensate for the actual damage).
Continue Reading >Evidence at Trial by Affidavit
Schindler Elevator Corporation v. Walsh Construction Company of Canada 2020 Ont SCJ
Evidence-in-chief was being adduced by way of affidavit. The Master noted that if a witness is not permitted by the rules of evidence to make particular statements during oral testimony at trial, the witness could not make those statements in affidavits tendered in lieu of that oral evidence-in-chief.
Continue Reading >Conditions for Substantial Performance
1838120 Ontario Inc. v. Township of East Zorra- Tavistock 2021 Ont SCJ
The contractor issued a number of invoices for extras. The judge noted that a limitation period for each invoice would commence within a reasonable period of time for the invoice to be issued and a reasonable period of time for the invoice to be paid. What is reasonable is context-dependent and circumstance-dependent and follows the parties’ contract and past practices regarding the issuance of invoices and when payments were made. The court also noted that postponement of a limitation period from the date when it is legally appropriate will not allow a party to delay the commencement for some tactical or other reason beyond two years from the date the claim is fully ripened. Using these criteria, the judge noted that claimed extra work done in July should have been paid by August 6 and work done in August should have been paid by September 18 and that the limitation periods commenced on the next day after each. The judge also noted that a clause in the contract stipulated that the contractor had to provide a statutory declaration indicating all liability incurred by the contractor and the subcontractors in carrying out the contract had been discharged. Since the contractor never did so (because subcontractors had not been paid), the contract administrator was not obliged to issue a certificate of substantial performance.
Continue Reading >House Area
Lamba v. Mitchell 2021 Ont SCJ
An MLS listing stated that the interior of the house was approximately 2,500 to 3,000 ft.² The property brochure noted a main floor area of 2155 ft.² and a lower floor area of 665 ft.² The purchaser, who was a real estate agent, gave evidence that, on an MLS listing, only the above grade area of the house should be referenced and that, since he did not have the property brochure when he and his spouse signed the agreement of purchase and sale, he expected that he was buying a house that had a main floor area of at least 2,500 ft.² After the agreement, he was given the brochure. He then refused to close, stating that the area of the house was not as advertised. The judge agreed that the error in the listing exceeded a fair and reasonable approximation of the proper main floor area, but, in this case, he decided that the purchasers, who had inspected the house and were sophisticated, were well aware of the actual size and layout of the house and were not misled about the area. Accordingly, he decided that the discrepancy between the actual and the misstated area did not constitute a material misrepresentation that would have affected the purchasers’ decision to enter into the agreement. The purchasers’ $20,000 deposit was forfeited.
Continue Reading >Evidence-Information & Belief
Premanathan v. Kandasamy 2021 Ont SCJ
On a motion, one party filed an affidavit of another lawyer in the firm. It contained statements on contentious matters without identifying the source of the information or the fact of his belief and statements otherwise inadmissible as hearsay and arguments more appropriate for a factum. The other party relied on the affidavit of a law clerk who provided double hearsay evidence at times without disclosing the source of the information and without specifying her belief in the information. The judge took issue with each of these affidavits.
Continue Reading >Extension (2)
In our September 2007 newsletter, we discussed the tests to extend the time to renew a writ of seizure and sale if the creditor failed to renew the writ as of right within the 6-year period allowed to do so. While most of the basic tests remain the same, the interpretation of them has changed. This change is apparent from the Ontario Court of Appeal’s 2021 decision in Achtem v. Boese.
Preliminary Info
A writ of seizure and sale (a “Writ“) is the primary method by which a creditor can seize the assets of a debtor. Within 6 years after a judgment, a creditor may, as of right, request the court to issue a Writ. The creditor then files the Writ with the sheriff of the geographical area in which the debtor owns or may be assumed to own land. Once filed, the Writ binds the lands that the debtor owns in the sheriff’s jurisdiction and, if the debtor is stupid enough, binds any lands that the debtor subsequently acquires. A Writ is valid for 6 years from the date of its issue. Upon paying a fee, a creditor may renew a Writ by requisition to the sheriff before the Writ’s expiry.
Continue Reading >Overreach
Over the years, agreements to purchase new homes and condos have become far lengthier than they used to be. Every additional provision usually shifts risk to and hurts the purchaser and protects and benefits the builder. The latest provision that has popped up deals with interest. It says, for example: “Any monies owing by the Purchaser not paid when due, shall accrue interest at the rate of x% per annum compounded monthly until paid.” x% was set at 20% in the two cases that we are about to discuss: Burkshire Holdings Inc. v. Ngadi 2021 ONSC 2550 and Madison Homes v. Shi 2020 ONSC 7810.
Breach
In each case, the purchasers did not close and the builder re-sold the property and sued for damages. In each case, the purchasers put up a spirited defence as to why they should not be held liable for the failures to close. As expected, given the track record of defaulting purchasers, these defences were unsuccessful; they were simply worn out defences that have been shot down in flames over recent years.
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