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Legal Blog: Civil Litigation

Sep
14
2021

Costs-Disbursements

Charlesfort Developments Limited v. Ottawa 2021 Ont CA

Successful appellant claimed $292,000 for trial costs on a partial indemnity basis plus $566,000 for disbursements, of which $479,000 were for expert fees in delivering a report. The respondents agreed with the fees claimed, but took issue with the disbursements. The court noted that fees of experts are subject to a reasonability test, but are not subject to a further reduction based on the distinction between substantial indemnity costs and partial indemnity costs. The court confirmed that a disbursement for an expert report is reimbursable, regardless whether the expert is called to give evidence, because an expert report may help resolve the issues. In this case, the court held that the fees were not fully reasonable – noting that the respondent’s expert fees were ½ of the appellant’s expert fees and also contrasting the expert fees in comparison to the legal fees. Instead of the claimed amount for fees and disbursements of $771,000, the court awarded $700,000. In effect, the expert fees were reduced from $479,000 to $408,000.

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Sep
14
2021

Release Interpretation

Corner Brook (City) v. Bailey 2021 SCC

Releases are to be interpreted in the same manner as any other contract. The 1870 principle stating that releases are to be limited to occurrences in the contemplation of the parties at the time of the release is no longer good law. Accordingly, a release can cover an unknown claim with sufficient language and does not need to particularize with precision the exact claims that fall within its scope.

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Sep
02
2021

Security for Costs on Appeal

Thrive Capital Management Ltd. v. Noble 1324 Queen Inc. 2021 Ont CA

Plaintiff sued for fraud and breach of fiduciary duty. It obtained a Mareva injunction. The defendant breached the injunction and dealt with its assets. The defendants acknowledged its contempt and, on the sentencing hearing, the motion judge held, as a sanction, that the defendants were to pay the $8.7 million claimed amount to the plaintiff and directed the defendants to attend a judgment debtor exam, even if the defendants appealed the sentencing decision. The defendants appealed and the plaintiff moved for security for costs, both for the appeal and the motion itself. The Court held that, under Rule 61.06(1), there was “good reason” to order the costs. The Court also noted that, normally, after an appeal no JD exam may be conducted. However, in this case the examination being sought was not to support a monetary judgment being appealed, but rather under the terms of the motion judge’s order. This is not akin to an appellant being forced to drop its financial skirts when it may be ultimately exonerated on appeal; it is an examination that the defendants had to undergo because of the Mareva injunction issued against it.

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Sep
02
2021

Limitation Period and Knowledge

Grant Thornton LLP v. New Brunswick 2021 SCC

Province sued accounting firm for negligence resulting in losses to the Province because of an inadequate audit on which the Province relied. The Province knew about the problems with the audit on Feb 4, 2011 when it received an opinion from another auditor. The Province did not commence its action until Jun 23, 2014. Since, seemingly, the two-year limitation period may have expired, the accounting firm brought a motion to dismiss the action. The NB Court of Appeal held that the Province had to have knowledge of each of the constituent elements of the cause of action and dismissed the motion. The Supreme Court reversed; it held that the appropriate test was whether the Province had enough knowledge, actual or constructive, of the material facts to draw a plausible inference of liability. In this case, it did.

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Jul
13
2021

Limitation Acknowledgment

1475182 Ontario Inc. o/a Edges Contracting v. Ghotbi 2021 Ont SCJ

Section 13 of the Limitations Act extends the limitation period if the debtor has acknowledged the debt in writing signed by the debtor or its agent and applies even if the debtor does not promise to pay the balance owing on a liquidated sum. The debtor acknowledged the debt by way of a text message, but indicated he may be setting off expenses he incurred. The judge held that a text message was a digital signature that, in this case, was authentic and that a traditional signature was not necessary. He also noted that it was sufficient for a debtor to acknowledge the debt, even though disputing the precise amount.

Kirloskar Technologies (P) Ltd. v. Best Theratronics Ltd. 2021 Ont SCJ

Same scenario as in Edges Contracting. The debtor acknowledged the debt by ordinary email, which was deemed sufficient to be an acknowledgment in writing signed by the debtor.

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Jul
13
2021

Interest on Damages

Madison Homes v. Shi 2020 Ont SCJ

Purchaser did not close, vendor re-sold, and vendor sued for damages. Aside from a discussion of damages and mitigation, the judge had to decide whether to enforce a clause in the agreement that gave interest on all money that the purchaser was to have paid at 20% per year compounded monthly. The judge noted that even the vendor realised that this clause was onerous, given that it claimed the interest only on the shortfall and not on the full sale price. The judge held that the clause was unreasonable and unenforceable because the clause was not drawn to the purchaser’s attention when he signed the agreement.

Burkshire Holdings Inc. Ngadi 2021 Ont SCJ

Same situation as in Madison; indeed, same interest rate of 20%. The judge realised that the agreement was not in the same category as signing a rental car agreement; there was time to reflect and legal advice involved. However, the judge still held that the clause was “surprisingly onerous,” not brought to the purchaser’s attention, and therefore unenforceable.

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Jul
02
2021

Pretrial & Expert

Sosnov v. J&H Freiberg Ont SCJ (Div Ct)

Over the objections of both parties, the pretrial judge, without reasons, appointed an expert to assist the court in understanding questions of liability. It was a very wide order. The Divisional Court noted that a judge has discretion to appoint an expert, at any time including during a pretrial, but could not appoint an expert to determine the matters in issue as well as issues the parties had not even raised. A court appointed expert is to be appointed to assist the court to understand evidence, not to investigate, advance possible theories, and state, as conclusions of fact, opinions based on matters not advanced in evidence. Doing so usurps the role of the trier of fact and the parties’ right to present the case as they see fit.

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Jun
23
2021

Costs Assessment

1632093 Ontario Inc. v. Condominium Corporation No. 74 2020 Ont CA

The judge was about to order interest at 24% per year in accordance with the terms of an invoice but, after he realised that the statement of claim had requested only Courts of Justice interest, he declined to order the higher interest. Because success was divided on a dollar and cents basis, the judge ordered that no costs be paid – even though he granted the plaintiff a judgment of $62,000. The Court of Appeal dismissed an appeal from the defendant, but allowed the plaintiff’s cross-appeal regarding costs. Costs cannot be awarded on a distributive basis. When the matter was sent back to the trial judge, the trial judge ordered costs in favour of the plaintiff.

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Jun
21
2021

Will Ambiguity

Barsoski v. Wesley 2020 Ont SCJ

A will required the trustees to hold the testator’s house and contents as a “home” for a beneficiary during his lifetime. The will established a $500,000 fund to ensure that the home was professionally maintained. The will provided that if the beneficiary was no longer living in the home, the home was to be sold, but the fund was to be used for the beneficiary’s living expenses. The judge had to decide whether the terms of the will granted a life estate or merely a license to live in the home. This decision was important because the beneficiary was seemingly not living in the home; rather, an acquaintance of his was. The judge held that the will created a license to occupy the home. She then found that the determining event (i.e., no longer living in the home) was void for uncertainty (i.e., What does it mean? Primary residence, stay in the house one or two weekends, intend to live there?) and that the entire gift, being only a license, failed due to the uncertain terms.

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Jun
11
2021

Discovery

Kaushal v. Vasudeva 2021 Ont SCJ

An affiant was being cross-examined on his affidavit in support of his position as a respondent in an oppression application. The cross-examination was being conducted remotely. The examiner affirmed with the affiant and his lawyer that, other than the interpreter and the lawyer, no one else was present in the room. It seems that this was a lie and that the affiant’s wife and son were both present during the cross-examination giving him hand and facial signals. Upon motion, the judge, who noted that this misconduct strikes at the very heart of the integrity of the fact-finding process, struck the affidavit in its entirety.

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