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Legal Blog: Civil Litigation

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
05
2020

Waiver of Tort

Atlantic Lottery Corp. Inc. v. Babstock 2020 SCC 19

Class action in which the class plaintiffs alleged that video lottery terminal machines were so deceptive that they contravened the Criminal Code and that, based on three causes of action, the lottery corporation had to return to the class all profit that the corporation earned from the machines. The lottery corporation moved to dismiss the action on the basis that it had no reasonable chance of success.

What is waiver of tort?

When a tort was made out, but the plaintiffs chose to pursue a claim to recover the defendant’s ill-gotten gains, the plaintiff was said to “waive the tort.” This term was a misnomer. The plaintiff was not waiving the wrongfulness of the defendant’s conduct, it was electing to pursue an alternative, gain-based, remedy. The court stated that the term “waiver of tort” generates confusion and should be abandoned. It also noted that, in order to make out a claim for disgorgement, which is exactly what the plaintiffs wanted, a plaintiff must first establish actionable misconduct.

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Jul
27
2020

Unconscionable

Uber Technologies Inc. v. Heller 2020 SCC

The SCC upheld the decision of the Ontario Court of Appeal, which struck down an arbitration clause as unconscionable. The SCC postulated a two-part test for unconscionability: an inequality of bargaining power and an improvident transaction.

  • An inequality of bargaining power exists when one party cannot protect its interests in the bargaining process. This inequality can arise out of knowledge, experience, or vulnerabilities peculiar to individual situations. It can include cognitive asymmetry (i.e. only one party can appreciate and understand the full impact of the contractual terms). In essence, it arises in the context of a bargaining context in which the law’s normal assumptions about free bargaining resulting in a fair transaction no longer hold.
  • A transaction is improvident if it unduly advantages the stronger party and disadvantages the more vulnerable. Again, improvidence has to be assessed contextually, reading the terms of the contract in light of the surrounding circumstances at the time of contract formation. These include the market price, commercial setting, and position of the parties.
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Jul
27
2020

Pleadings Amend

YRCECC No 1210 v. 7 Brighton Place Inc. 2019 Ont SCJ

A defendant moved to amend its crossclaim against its co-defendant. It asserted that its amendment was not a new cause of action; rather it merely set out particulars to its existing breach of contact allegation. The Master noted that a “generic pleading cannot stand as a ‘perpetual placeholder’ for future claims which may arise or be contemplated by the parties.” The Master noted that the Rules mandated leave be granted for an amendment of pleadings unless a party would suffer prejudice from the amendment not compensable by costs. The passage of a limitation period is an example of prejudice. In this case, the Master held that the limitation period had passed for the new action and refused leave to amend.

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Jul
27
2020

Service of Claim

Ero-Oriri & Sidney v. Carsen 2020 Ont SCJ (MC)

The plaintiffs, in a medical negligence action, commenced the action by way of a notice of action, presumably because a limitation period was fast approaching. Under the Rules of Civil Procedure the plaintiffs had 6 months to serve their statement of claim. Two weeks before the statement of claim had to be served, the plaintiffs moved for leave to extend the time for service, claiming that they needed more time to obtain an expert opinion. The Master refused that leave, holding that the plaintiff had sufficient time to have investigated their claim.

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Jul
07
2020

Discovery Plan

Concord Adex Inc. v. 20/20 Management Limited 2020 Ont SCJ (MC)

The plaintiff and defendant proposed very different discovery plans. The Master noted that the principles in setting a discovery plan were as follows: (i) common sense and proportionality are important; (ii) the settling of a discovery plan is not meant to be a speculative motion on refusals or for a better affidavit of documents; (iii) a discovery plan is not meant to be a form of advance ruling on scope and propriety of questions; and (iv) proportionality and litigation culture shift require “want” to be replaced with “need”. The Master chose the defendants’ plan because it covered the appropriate time period, provided for delivery of supplementary affidavits of documents, and noted that the parties reserved their rights to seek broader production at a later date. The Master noted that the plaintiff’s plan was overly broad and was attempt to obtain an advance ruling on scope and relevance that ought not to have been put into a discovery plan.

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Jul
07
2020

Limitations

Beniuk v. Leamington (Municipality) 2020 Ont CA

Owners complained that use of a roadway caused damage to their house. They commenced a proceeding against the municipality before the Ontario Municipal Board and were unsuccessful. After that decision, they commenced a civil action claiming damages for nuisance and negligence, but did so more than 2 years after they commenced their proceeding before the OMB. The court first ruled that the regular 2-year limitation period applied rather than the 10-year limitation period under the Real Property Limitations Act. The court held that a negligence claim involving real property was very different from a claim to an interest in land and therefore the RPLA did not apply. The Court did reference cases in which a constructive trust claim and a fraudulent conveyance claim were held to fall within the RPLA. The court also held that, just because alternative processes were available, this did not, in itself, suspend the running of the limitation period. Although under some circumstances, it is appropriate to extend the limitation period, s5(a)(a)(iv) of the Limitations Act 2002, dealing with whether it is appropriate to commence a proceeding, does not necessarily permit a party to engage in litigation in stages for the same wrong. It is incumbent upon the claimant to explain why its approach was reasonable.

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Jun
09
2020

Quantum Meruit

Nijjar v. Feldman 2020 Ont SCJ

A real estate salesperson had been acting for his broker to obtain financing for a corporation. The salesperson left the employ of the broker, after he had obtained the initial letter of intent from the prospective mortgagee, and the broker and the corporation agreed to terminate the listing. The salesperson continued to assist the corporation in closing the transaction, but was not able to enter into another agreement with the corporation; they disagreed as to its terms. The judge held that there was no contract, but that the salesperson should be paid for his work after he had left the broker. Since, at one point, the corporation had offered to pay the salesperson $65,000, rather than the claimed $100,000, that was enough to quantify the services at $65,000. The reasons did not indicate why the settlement discussions were admitted into evidence.

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