Legal Blog: Lawyers’ Issues
On occasion we read of, and sometimes experience, a litigant (usually the defendant) or its lawyer or both doing everything in their power to either stall the litigation or to increase the other party’s costs. When we read a decision in which the malefactors get a well-deserved comeuppance, we experience a wave of satisfaction. One such decision is set out in Falcon Lumber Limited v. 2480375 Ontario Inc. (GN Mouldings and Doors) 2020 ONCA 310. Ritchie Linton was counsel for the aggrieved plaintiff.
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Once the COVID-19 dust settles, we are going to hear a lot more about the frustration concept. However, like all court cases, it takes one to three years before we start seeing some decisions. Given that the courts are operating at a significantly reduced capacity, even this time estimate could be optimistic. Accordingly, for the moment, we will have to make do with cases arising out of circumstances that took place three years ago. One such case is Perkins v. Sheikhtavi, 2019 ONCA 925.
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The Supreme Court of Canada has rendered its decision in Uber Technologies Inc. v. Heller 2020 SCC 16 and, by a 6-1 majority, upheld the decision of the Ontario Court of Appeal. We discussed that decision in our December 2019 newsletter.
Uber forced its drivers to agree to an arbitration provision by which all disputes had to be arbitrated in the Netherlands pursuant to the International Commercial Arbitrations Act. This was all very nice, but the cost to an Uber driver to do so would have involved up-front administration fees of $14,000 USD plus travel and legal costs. Had this arbitration provision been held to be effective, it would have been a powerful disincentive to have any dispute tried and would have effectively precluded any action by any driver.
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Real estate default cases keep coming. The issues are often the same: who breached, who was ready willing and able to close, was repudiation accepted, what happens to the deposit?
The case of Azzarello v. Shawqi 2019ONCA820 had all of the issues, as well as an unusual one dealing with the deposit. Purchaser was unable to close the transaction and requested an extension, which was given. On the extended closing date, purchaser requested a further extension. Vendors agreed, but on terms that, if not met, purchaser would be in default of the agreement. Purchaser did not respond. Vendors did not tender. Ultimately, vendors re-sold the property at a significant loss.Continue Reading >
In our February 2020 newsletter, we commented on the Ontario Superior Court of Justice decision in Austin v. Bell Canada. In that case, an interpretation of a pension plan revolved around the placement of a comma. After a thorough review of grammatical rules of interpretation, the motion judge decided that the terms of one section, on its face, would indicate a construction that would result in a rounding to one decimal point, as set out in the Consumer Price Index. However, the judge then reviewed another provision of the plan and, based on the evidence he received, decided that a one-decimal rounding policy would render that section meaningless. He therefore decided that there should be 2-decimal rounding. This decision, deciding between a 1.49% or 1.5% interpretation, was not trivial. The plan went on to note that whatever the percentage, it would be rounded to the next whole number (i.e. 1% or 2%). A 1% difference in an annual increase of payments in a pension plan for 35,000 pensioners would, according to the Ontario Court of Appeal, result in an increase in the first year of over $10 million and, for the long term, over $100 million.
In our newsletter, setting out the facts, the interpretation, and the decision, our main complaint lay with the drafting of the pension plan and our contention “that many agreements are simply drafted improperly.” In this case, Bell Canada was successful at the motion level and disaster was averted.Continue Reading >
At times, one reads a case and wonders “Why did the defendant not settle?” We asked ourselves this question while reading the decision in 6071376 Canada Inc. v. 3966305 Canada Inc., 2019 ONSC 3947 (SCJ). As we describe some of the lies of the defendant, remember: the defendant admitted almost all of the facts and, for those it disputed, it provided no documents to support its position.
An individual (“BadGuy”), through his one-man corporation, entered into an agreement of purchase and sale for a commercial Ottawa property. He arranged financing and agreed to guarantee the mortgage. BadGuy required a $584,000 down payment to close the transaction. He had 60% of it and needed an additional 40% (i.e. $233,600).Continue Reading >
Grammar seems to be a lost art these days. Rules of grammar and drafting often do not mean anything, if only because neither the writer nor the reader knows what the rules are. This writer is often asked to opine on various clauses in an agreement and, in some cases, throws up his hands in disgust, noting that the clauses are so badly drafted that no one would know what they mean. This can be a problem when an agreement is being interpreted in court, particularly if a lot of money rides on the interpretation. This is exactly what happened in Austin v. Bell Canada 2019 ONSC 4757. The entire decision revolved around the insertion of a comma.
A Bell Canada (“Bell“) retiree was the representative plaintiff in a class action. He claimed that his pension, and those of 35,000 other pensioners, should be calculated for 2017 with a 2%, rather than a 1%, increase over the 2016 pension. Of course, this difference would affect the 2018 and subsequent pension amounts because each increase is piggybacked on the previous year’s pension amount. That lowly 1% difference could have cost the Bell pension plan up to $130 million. The dispute revolved around the interpretation of one clause in the pension plan’s constating documents (the “Plan“).Continue Reading >
We often read about agreements or portions of them that are unconscionable and should therefore be set aside. Most lawyers used to consider unconscionability in the same manner as some judges considered pornography (i.e. I cannot define it, but I know it when I see it). Unconscionability has been defined and that definition was applied in Heller v. Uber Technologies Inc. 2019 ONCA 1.
The plaintiff driver was the representative in a class action claiming that Uber drivers were employees and that, in its treatment of them, Uber had breached the Employment Standards Act (ESA). Uber moved to dismiss the action, arguing that the drivers’ agreements mandated arbitration only. The driver argued that the drivers’ agreement was ineffective to preclude the class action because (i) the arbitration clause breached the ESA and, therefore, was an exception, under s. 7(2) of the Arbitration Act, to the mandatory nature of an arbitration clause and (ii) even if it were fully effective, it was unconscionable and ought not be enforced.Continue Reading >
How does a sublease differ from an assignment of lease? The answer to this question informs the final question: if a sublease ends at the same time as the head lease, rather than some time (even a day) before, does the tenant who subleased the premises retain any rights in the lease, in particular the right, granted in the lease itself, to exercise a renewal of the term. These questions were answered in V Hazelton Limited v. Perfect Smile Dental Inc. 2019 ONCA 423.
The lease had a term of seven years with a five year right of renewal. With about one year left in the original term, the tenant subleased the premises for the entire remainder of the term (no reversion for a day). The sublease specifically stated that the tenant had no right to the benefit of the renewal rights in the lease. The tenant attempted to renew the lease, with appropriate notice, but the landlord, who wanted the premises back, took the position that the tenant, having subleased the premises for the entire term, had assigned the lease and, therefore, had no right to extend the term.Continue Reading >
The Limitations Act, 2002 was proclaimed in force as of January 1, 2004. Subject to some other qualifications, the Act has a basic limitation period of two years from discovery and an absolute limitation period of 15 years regardless of discovery. However, not every request for a court order is caught by the Act. This was made apparent in Armitage v. Salvation Army, 2016 ONCA 971.
The deceased appointed a realtor as his attorney for property as far back as 1990. The deceased died in 2013. In the same year, the realtor submitted her claim for attorney compensation and, within two years of the date of death, issued a notice of application for the passing of accounts, both under her power of attorney and for the estate accounts.Continue Reading >