Legal Blog:

Release Terms Implied

Haider v. Rizvi 2023 Ont CA

The parties entered into minutes of settlement at a pre-trial. The minutes called for a full and final release, but went no further than that to describe it. The release was also subject to an undertaking of the releasor to indemnify the releasee against claims being made as a consequence of personal guarantees of the releasor’s corporation. The Court of Appeal analysed the circumstances of the settlement and held that (i) the parties were agreeing to extinguish each other’s full underlying liability relating to the subject matter of the settlement; and (ii) a no claims over clause was a natural extension of the agreement and was consistent with the parties’ goal of providing a full and final release.

Joinder – Trust and Lien Claims

Devlan Construction Ltd. v. SRK Woodworking Inc. 2023 Ont SCJ (Div Ct)

The old Construction Lien Act had a provision (s. 50(2)) that prohibited a trust claim being joined with a lien claim. Another provision (s. 55(1)) provided that a plaintiff could join a lien claim with a claim for breach of contract. The Construction Act changes deleted these two provisions and enacted the equivalent of old s. 55(1) in the regulations. The Divisional Court held that had the legislature wanted to allow for the joinder of trust and lien claims, it would have said so in the Act or the regulations; it did not. The court held that a trust claim could therefore not be joined with an action enforcing a lien claim.

Revocation of Beneficiary Designation in RSP, RIF, TFSA

Alger v. Crumb 2023 Ont CA

A will had the usual opening clause that revoked all prior wills and testamentary dispositions. The issue was whether that clause was sufficient to revoke beneficiary designations under a RIF (or RSP) and TFSA. Section 52(1) of the Succession Law Reform Act provides that a revocation in a will revokes a designation in an “instrument” (e.g., RIF) only if the revocation relates expressly to the designation, whether generally or specifically. The court held that the general revocation clause did not relate expressly to the existing designation by instrument for the RIF or the TFSA and was therefore ineffective to revoke those designations.

Arbitrator Chosen

Van Doorn v. Loopstra Nixon 2023 Ont SCJ

Usual clause in which the dispute was to be dealt with arbitration with one arbitrator. The parties could not agree on an arbitrator so a judge had to parse the resumes of each candidate and pick what seemed to be the best one for the dispute.

Settlement Disclosure

Skymark Finance Corporation v. Ontario, 2023 Ont CA

In a multi-defendant situation, the plaintiff may have a duty to immediately disclose a settlement agreement with one of the defendants to the others who have not yet settled with the plaintiff. The duty arises if the agreement with one defendant changes the litigation landscape with the others. A settlement that changes an adversarial position to a co-operative position changes the litigation landscape. Both the agreement and its terms must be disclosed, not just the agreement’s existence. A failure to disclose under these circumstances is an abuse of process and, consequently, that failure will result in the plaintiff’s action being dismissed.

Liability for Caution

225753 Ontario Inc. v. Mifsud and Hunt, 2023 Ont SCJ

Mortgagee was selling a property in the exercise of its power of sale. Lawyer acted for a person who was not the owner of the property, but seemingly had some other claim to the property. Lawyer registered a caution. Mortgagee alleged that the caution prevented the mortgagee from closing its sale of the property and sued the lawyer and the claimant under s. 132 of the Land Titles Act. That section makes a person who registers a caution without reasonable cause liable for any damages the caution causes. The judge held that “person” in the section was a claimant, not the lawyer who registers a caution on behalf of a client.

Arbitration (3)

Arbitration clauses are becoming more and more prevalent. Unless changed by supplementary conditions, they are incorporated into every CCDC contract. Can a party simply ignore an arbitration clause and proceed with litigation in court to deal with a claim? If one party does this, can the other party, at any time, have the action stayed because the issues should be decided by arbitration? These questions were dealt with in Bombino v. Serendipity Homes, a 2022 decision of the Ontario Superior Court of Justice.

Dispute

The dispute between the parties related to a residential home project and alleged deficiencies. The contract between the parties contained a relatively wide arbitration clause. In essence, all disputes relating to the interpretation, application, or administration of the contract were to be determined by arbitration. Notwithstanding this clause, the owners commenced an action in court against the contractor.