Legal Blog: Lawyers’ Issues
Contracts often give one party discretion to make decisions that will affect the other party. For example, employment contracts can give the employer a discretion as to the quantum of a bonus. A lease can give the landlord discretion as to whether to accept a tenant’s request to sublease the premises. Often, one sees the words “absolute discretion” or “absolute and sole discretion.” Do these words mean that the party with discretion can exercise that discretion in any manner the party sees fit? The answer, in prior jurisprudence and according to the Supreme Court of Canada in Wastech Services Limited v. Greater Vancouver Sewerage and Drainage District 2021 SCC 7, is no.
Wastech, a contractor engaged in waste transportation and disposal, contracted with Metro, the entity administering waste disposal in Metro Vancouver Regional District. The parties entered into a long-term contract that discussed, among many other things, which waste disposal sites would be used and who would determine the quantity of waste going to those disposal sites. The contract gave Metro the “absolute discretion” to determine the minimum amount of waste that would be transported to one particular waste site in a given period.Continue Reading >
The headline to the Toronto Star story started with: “A century of Canadian legal precedents dealing with listings describing homes for sale were reversed late last year by an Ontario Court of Appeal decision that is being seen as one of the year’s most significant real estate law rulings.” The case is Issa v. Wilson 2020 ONCA 756. Aside from the bad grammar (can you spot it?), the problem with the headline is that its main premise is not correct; further, we doubt that the decision is overly significant, much less the most significant. The article’s other problem was a lack of depth of analysis (485 words, probably all that the editor allowed).
The purchaser retained a real estate agent to find him a suitable house in which he could live with his parents and three sisters. The agent showed many houses to the purchaser and all were larger than 2,000 square feet, the minimum size that the purchaser felt could accommodate his family. Finally, the agent showed the purchaser a house (the “House“), for which the agent was also the listing agent. The agent told him that the House was 2,100 square feet and, in doing so, the agent relied on information from the vendor and information contained in a previous listing for the House. The listing agreement that the agent drafted for the House noted that its size was between 2,000 square feet and 2,500 square feet. The agent did not conduct his own measurements and admitted that he was negligent in failing to measure or verify the size of the House.Continue Reading >
Some 60 years ago, American writers argued that the law ought to recognize the right to privacy. This argument generated many court decisions, ultimately culminating in an article by Professor Prosser, and adopted by the Restatement (Second) of Torts (2010), delineating a four-tort catalogue of privacy torts:
1. Intrusion upon the plaintiff’s seclusion or solitude, or into his or her private affairs.
2. Public disclosure of embarrassing private facts about the plaintiff.
3. Publicity which places the plaintiff in a false light in the public eye.
4. Appropriation, for the defendant’s advantage, of the plaintiff’s name or likeness.
Ontario law followed along, but of course more slowly. Three of the four torts have already been recognized and the fourth, “false light publicity”, was front and centre in Yenovkian v. Gulian 2019 ONSC 7279.Continue Reading >
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 >