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Legal Blog: Five Liners

Oct
13
2020

Contract Termination – Significant Deficiencies

Mastracci v. 1882877 Ontario Inc. 2019 Ont SCJ

While roofing work was ongoing, leaks became apparent. The owner retained an expert whose report savaged the contractor’s work. Rather than allow the contractor to fix the deficiencies, the owner retained another roofing contractor to apply the appropriate fix. The judge held that the deficient work was a fundamental breach of the contract and therefore the owner did not have to give the contractor a reasonable opportunity to correct the deficiencies. The court allowed the owner to set off its cost to complete the work against any amount otherwise owed to the contractor.

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Oct
13
2020

Extra Labour Cost – Excessive Lien

McLarty v. 2210961 Ontario Limited 2020 Ont SCJ

A contractor charged extra labour based on a “shop rate” of $60 an hour (a rate that it applied to all customers) rather than the actual rate plus burden. The judge held that the rate was standard in the industry and that, because the contractor included in his quote, an estimate for labour at the same rate, he had a right to that rate. The court analogized the claim to an auto repair shop charging the same rate to every customer, regardless of the wage cost of the individual actually performing the work. Using the same logic, the court held that the plaintiff was not allowed to claim an enhanced rate for overtime work. The amount awarded was $124,000 but the lien claim was $203,000. The judge concluded that the lien claim was exaggerated. However, because the defendant filed no evidence to prove it suffered damages, the judge gave nothing as compensation.

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Oct
13
2020

Costs – Modest Judgment

Brophy v. Harrison 2019 Ont SCJ

The plaintiff, in a personal injury matter, received a net award of $17,000. The defendant claimed that the costs should be based on Small Claims Court costs and that the amount being claimed had to be proportionate to the amount at stake. The judge held that the costs would be regular costs; the plaintiff’s case had merit and her decision to continue to trial was reasonable in the absence of any offers from the defendant. The court also held that declining to make realistic costs awards in modest cases would send a message to litigants that is not worth one’s while to pursue legitimate claims in court because one cannot possibly make it cost-effective to do so. Finally, the defendant could not complain about the quantum because it chose not to submit its own costs outline. The judge awarded $210,000 in costs plus disbursements of $65,000.

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Oct
13
2020

Privacy

Yenovkian v. Gulian 2019 Ont SCJ

Matrimonial matter in which one of the issues related to the right to privacy. Father, who was represented throughout but not at trial, was a nasty piece of work. He engaged in a continuing process of online bullying, attacks on the administration of justice, and false reports to childcare services and police. The court recognized the final tort in the American four-tort catalogue: publicity that places a plaintiff in a false light in the public eye. The other 3 torts had been previously recognized in Ontario. The wrong is in publicly representing someone, not as worse than they are, but as other than they are. Although facts being adduced for this cause of action will often be sufficient to prove defamation, defamation is not required. The judge ordered damages of $100,000 in this category.

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Sep
25
2020

Master – Summary Judgment Jurisdiction

R&V Construction Management Inc. v. Baradaran 2020 Ont SCJ (Div Ct)

Although, on a motion for summary judgment in the normal course, Masters do not have the enhanced powers given to judges, they do have jurisdiction to use the enhanced powers in their capacity as referees under the Construction Act. The motion judge was overruled on this issue. However, the court set aside the Master’s dismissal of the action because of a lack of natural justice. The defendant, who was not represented, had brought a motion to discharge the plaintiff’s lien or reduce lien security. Instead, the Master granted summary judgment against him for a motion that neither he nor the plaintiff had brought.

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Sep
25
2020

Limitation – Debt Acknowledgement

Michel v. Spirit Financial Inc. 2020 Ont CA

When a limitation period expires, it cannot be revived by an acknowledgement of the debt. The acknowledgement must be made before expiry of the limitation period.

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Sep
25
2020

Delay Dismissal

Samuels v. Mai 2020 Ont CA

2011 action for $50,000 under the Simplified Procedure Rules. Nothing happened for four years after pleadings closed; both parties obtain new counsel by 2017. A Master, at a status hearing, extended the time for the action to be set down for trial to June 1, 2018. The plaintiff did nothing. In January 2018 the defendants moved to dismiss the action for delay. Between January and August 2018, the parties delivered affidavits of documents. Ultimately, the motion was adjourned to July 2019 and both parties delivered materials. The motion judge dismissed the plaintiff’s action for delay, but the counterclaim remained. The Court of Appeal set aside the decision because the motion judge failed to consider “a critical contextual factor: the dismissal of the appellant’s claim left the respondents’ counterclaim alive.” The court held that it was not in the interests of justice to dismiss a plaintiff’s claim while permitting the defendants to litigate the same issues in their counterclaim.

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Sep
25
2020

Costs – Offer to Settle

Welton v. United Lands Corporation Limited 2020 Ont CA

A plaintiff had been successful at trial, obtaining an award of $182,000 (although she claimed millions). The defendants had submitted an offer in May 2019, four days before the trial of the 2012 action, at $190,000 plus costs. Its previous offer had been submitted in 2012 for $15,000. Although the 2019 offer did not comply with Rule 49, the trial judge used his residual discretion to allow the plaintiff her costs to the date of the 2019 offer at $33,000 and the defendants their costs after the date of the offer of $41,000. The Court of Appeal held that it was unreasonable to make a last-minute settlement offer after the Rule 49 deadline had expired, following a previous offer that could only be described as contemptuous. The court overturned the costs award and allowed the plaintiff $84,000 in costs.

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Aug
24
2020

Knowing Assistance/Knowing Receipt

Caja Paraguaya de Jubilaciones y Pensiones del Personal de Itaipu Binacional v. Garcia 2020 Ont CA

The issue was whether the wife, who was also a sole shareholder of a corporation involved in the transfer of funds, was liable either for knowing receipt or knowing assistance of the fraud that husband carried on. In effect, when is a stranger to a fiduciary relationship made liable to the beneficiary of that relationship? As to knowing assistance, the stranger needs to have actual knowledge of the fiduciary relationship and the fraudulent and dishonest conduct and assist in that conduct. Actual knowledge would encompass wilful blindness or recklessness. Wilful blindness is a subjective standard that depends upon the stranger’s actual state of mind; it is not an objective standard as to what the stranger ought to have known. Mere carelessness or negligence is not sufficient. Knowing receipt requires that the stranger receive trust property with actual or constructive knowledge that the trust property is being misapplied. Unlike knowing assistance, the requirement of actual knowledge includes knowledge of facts that would put a reasonable person on inquiry and that inquiry is not made.

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Aug
24
2020

Inspection

Pordell v. Crowther 2020 Ont SCJ

A fire occurred in a house before the closing of an agreement for sale. The agreement was based on the standard OREA form of contract. It stated that the buildings remain at the risk of the seller and that the seller holds all insurance policies in trust for the parties as their interests may appear. It gives buyer the right to terminate the agreement or complete it and take the insurance. Notwithstanding the agreement, no insurance was available because seller had left the property empty for more in 30 days. Buyer attempted to view the damage and obtain information regarding the repairs that seller made. Seller stonewalled buyer and, accordingly, buyer refused to close. The judge ordered the return of buyer’s deposit.

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