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Legal Blog:
Dec
22
2021
Good Faith
2161907 Alberta Ltd. v. 1180673 Canada Inc. 2021 Ont CA
Good faith requires that parties generally must perform their contractual duties honestly and reasonably and not capriciously or arbitrarily. A party must have appropriate regard to the legitimate contractual interests of the other contracting party and not attempt to undermine those interests in bad faith. However, good faith does not require contracting parties to serve each other’s interests. Accordingly, the breach of a license agreement and a lease that was not made dishonestly, but rather was simply made in error, does not constitute bad faith.
Continue Reading >Dec
22
2021
Agreement by Computer Click
Battiston v. Microsoft Canada Inc. 2021 Ont CA
An employee who was terminated and was claiming compensation for unvested stock claimed that he did not know that his stock was unvested as it was being issued. However, for 16 years the employee had confirmed by computer click that he had received emails that notified him about the vesting provisions for the stock awards and accepted their terms. The fact that he did not read the emails or the vesting provisions disentitled him from claiming that he had no notice of the vesting provisions.
Continue Reading >Dec
22
2021
Non Est Factum
Spiridakis v. Li 2021 Ont CA
Vendor terminated agreement before closing when purchasers admitted that they did not have funds to close the purchase. Time of the essence clause meant that the parties agreed that the time limit manifested by the fixed closing date was an essential term, such that breach of it would permit the innocent party to terminate the agreement. The notification of purchasers’ inability to close was an anticipatory breach and had been accepted. The motion judge properly granted summary judgment for its damages. Purchasers were not mistaken, as a result of a misrepresentation or otherwise, as to the nature or character of the transaction. The only assertion of a mistake related to the consequences of the breach. It was not a partial summary judgment; it was a complete summary judgment. The judge did consider whether the issues in the main action and the third party action against purchasers’ lawyer and real estate agent were so intertwined that there was potential for inconsistent findings and concluded there were not. The Court of Appeal agreed.
Continue Reading >Dec
17
2021
Interest Act & Increased Interest Rate
Alleghe Mortgage Fund Ltd. v. 1988758 Ontario Inc. 2021 Ont SCJ
Section 8 of the Mortgages Act proscribes an increased interest rate on arrears beyond the rate set out when the mortgage is not in arrears. An interest rate that increases during the term (e.g. the 12th month of a one year mortgage) does not run afoul of this section. The interest rate is increasing solely as a result of the passage of time and while the mortgage is still in good standing.
Continue Reading >Dec
17
2021
Payment of Trust Money
Clearwater Structures v. 614128 Ontario Ltd. o/a Trisura Construction, 2021 Ont SCJ
Although the Construction Act does not provide a timeframe within which a contractor must pay trust funds, the court found that a contractor who has failed to turn over trust funds within a reasonable time will have breached its trust obligations. Since, in this case, the judge held that there was no valid set off (i.e. the costs of a bond and to post a bond to vacate a lien are not valid costs for setoff), there was no reason for the contractor not to have paid the trust funds.
Continue Reading >Dec
03
2021
Costs – Hardball
Przyk v. Hamilton Retirement Group Ltd. 2021 Ont CA
The jury held against the plaintiff on a slip and fall action. However, the judge refused to grant costs to the defendant (in effect its insurer) for three reasons: (i) the insurer was big and the plaintiff was small; it was a David and Goliath situation, (ii) the insurer had refused to make any offer at all to settle the action and was therefore arrogant, and (iii) the action, which had required expert evidence illustrated the need that the law of negligence had to adapt to the growing area of elder care. The insurer appealed, not because it did not get its costs. Rather, it could not let the first two reasons stand as precedents. The Court of Appeal dismissed the appeal because it held that the judge had the discretion to refuse costs when it involved a novel issue of public interest. However, the court held that the first two reasons were improper. First, the plaintiff was not denied access to justice; she took her case to trial and was represented by experienced counsel. Nothing supported the view that her case was prejudiced by a mismatch of resources. Second, it is an error in principle to rely on the failure of a successful defendant to have offered a payment to an unsuccessful plaintiff as a ground to deny costs.
Continue Reading >Dec
03
2021
Mortgage Statement
2544176 Ontario Inc. v. 2394762 Ontario Inc. 2021 Ont SCJ
A mortgagor, who was attempting to sell the mortgaged land at the same time as the mortgagee was attempting to do so under power of sale, requested a discharge statement pursuant to section 22(1)(a) of the Mortgages Act. The mortgagee refused to supply it for reasons of its own, which were not acceptable to the judge. The mortgagee then sold the land and the mortgagor moved to set aside the sale. Under section 22(3), if a mortgagee does not give the requested mortgage statement, its rights to enforce the mortgage are suspended until the mortgagee complies with its obligations. The real consideration for the trial judge was not whether the mortgagee would be prejudiced if the sale were set aside, but whether its unknowing purchaser should have its purchase taken from it through no fault of its own. Ultimately, the judge decided that the purchaser had to take title subject to the Mortgages Act and had to accept the risk of the breach that occurred.
Continue Reading >Dec
03
2021
Breach of Court Order
Smith v. GCAT Group Inc. 2021 Ont CA
Homeowners had sued a building supplier for allegedly supplying improper limestone The owners had done all they could to refuse to allow the supplier to test the limestone, notwithstanding court orders to do so. Ultimately the motion judge dismissed the action because of the owner’s breach of the various orders. On appeal, the owners blamed everything on their lawyer and sought leave to file fresh evidence demonstrating that the lawyer gave erroneous advice on which they relied. The Court of Appeal refused to do so, stating that there was ample evidence in the record to the contrary and, in any case, the owners could pursue a negligence action against their lawyer if they thought he provided erroneous advice.
Continue Reading >Dec
01
2021
Honour
Let’s discuss writs of seizure and sale aka writs of execution, formerly known – if you have been around far too long – as writs of fi fa (short for fieri facias – translated from Latin as “cause to be done”). A creditor may enforce a monetary court order by requesting the court to issue a writ of seizure and sale. Once the court has done so and the creditor files the writ with a sheriff of any jurisdiction in Ontario, that writ binds the debtor’s lands in that jurisdiction. For example, a writ filed with the Sheriff of Peel binds the lands in Peel, but does not bind lands in Toronto. In essence, the debtor is not able to sell or mortgage lands that a writ binds until the court order is fully paid.
We now have an electronic land registration system. Writs are filed with a sheriff and subsequent purchasers or mortgagees need only rely upon specified statements – depending on the circumstances and, particularly, the writ amount. One of these statements is a “a law statement” of a lawyer. That statement attests that, if a writ has been filed that would otherwise bind the land, the debtor has obtained a complete, unconditional, and unqualified release from the judgment creditor for the writ. “It is an honour system largely dependant (sic) on lawyers’ honesty.”
Continue Reading >Dec
01
2021
Registrar’s Dismissal for Delay
Grillo Barristers P.C. v. Kagan Law Firm P.C. 2021 Ont SCJ
The associate judge had allowed a motion setting aside a registrar’s dismissal under Rule 48.14 for a five year delay. The motion judge, to whom the appeal was taken, savaged the decision of the associate judge, reviewed the Reid factors, and concluded that although the plaintiff explained the delay for some periods of the five years, many other periods were not. As to the final Reid factor, prejudice, the judge noted that it was not an error for the associate judge to consider the defendant’s conduct, but it was an error to place the burden on the defendant to complain of the delay, to warn of the impending dismissal, or to move the action to trial. A defendant does not have a burden to do so and the primary responsibility for the progress of an action lies with the plaintiff. The action remained dismissed.
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