Legal Blog

Condominium Collection Costs

Amlani v. YYC 473 2020 Ont SCJ (Div Ct)

Section 85 of the Condominium Act allows a condominium to register a lien in respect of common expense arrears and the legal costs in connection with their collection. Section 144 of the Act allows for a condominium corporation to apply to the Superior Court to enforce compliance with the Act, declaration, bylaws etc. and, once it has a compliance order, may then add the amount of damages in that order and the costs to obtain the order to the common expenses for the unit. Section 144 does not allow the condominium to add compliance legal fees to common expenses without a compliance order.

Exaggerated Lien

GTA Restoration Group Inc. v. Baillie 2020 Ont SCJ (MC)

Homeowner was able to show that the claim for lien was exaggerated by approximately $48,000 on a $163,000 lien. It attempted to have the lien discharged based on the amended provisions relating to exaggerated liens and section 47 of the Construction Act, which allows the court to discharge a lien on the basis that the claim for lien is frivolous, vexatious, or an abuse of process. The Master noted that, in a motion under section 47, each party had to submit its best evidence. He also noted that on a cross-examination on a claim for lien, an examining party is entitled to full disclosure from the lien claimant regarding all evidence relied upon to substantiate the quantum and validity of the lien. The only difference between a cross-examination and an examination for discovery is one of scope. Some questions may be relevant on a discovery that are not relevant on the cross-examination. Although the Master held that the lien was wilfully exaggerated, the evidence did not support a determination that the lien claimant was acting in the absence of good faith when preserving the lien. The Master refused to discharge the lien, but did reduce the quantum of it.

Fraudulent Conveyance

Bank of Montreal v. Bibi 2020 Ont SCJ

Debtor transferred her residence to her mother while owing money to a financial institution. Debtor and mother had concocted, upon the transfer of the land, documentation to show that mother was actually paying for the land because she was cancelling a debt owed on another transaction. There was a complete lack of documentation regarding the debt and the other transaction and the judge simply did not believe mother and daughter. The judge concluded that mother knew exactly what daughter was doing and, after reviewing the badges of fraud, concluded that there had been a fraudulent conveyance and a fraudulent preference.

Warranty

2099082 Ontario Limited v. Varcon Construction Corporation 2020 Ont CA

The trial judge held that a subcontractor was not liable to the general contractor for allegedly deficient work. The trial judge held that the sub’s work was not deficient and that evidence of the general’s expert, who had opined on soil compaction without reviewing compaction reports, was of no use. The Court of Appeal held that this decision was unassailable and that it was the obligation of the general, not the sub, to obtain the compaction reports. The Court of Appeal then interpreted the warranty clause in the subcontract, which also referenced a warranty clause in the prime contract. It interpreted the clause to make the sub liable for its deficient work only and not the guarantor of all defects on the project, whether its own work has been defective or not. Accordingly, the court dismissed the general’s warranty counterclaim.

Allison Speigel’s 2020 RMA Conference Presentation

Expert

Willem Vander Meer Holdings Inc. v. Thomas Terry Richardson 2019 Ont SCJ

A contractor and owner had a dispute about extras to the contract, in particular the quantum of those extras. The pretrial judge, on his own initiative, ordered that the parties jointly retain an expert in construction costs and for the expert to prepare a report and send it to the court and to the parties.

Contract Formation

Alkin Corporation v 3D imaging Partners Inc. 2020 Ont CA

Vendor of shares wished to sell his shares to the corporation. The parties negotiated a purchase price for the shares and the corporation sent an unexecuted share purchase agreement to the vendor. The vendor signed and returned it to the corporation, but the corporation never signed it. The agreement contained a clause that specified it would become effective only when executed by both parties. The Court of Appeal confirmed the motion judge’s dismissal of the vendor’s action. The motion judge had found that it was the parties’ clear intention that obligations were to be deferred until a formal contract had been approved and executed. That finding of fact was supported by the terms of the draft agreement and was fatal to the vendor’s action. There was no contract.

Costs

Stikeman v. Gottlieb 2020 Ont SCJ

An impecunious plaintiff, who resoundingly lost his action that was intended to harm the reputation of the defendants, was held liable for costs – regardless of his inability to pay them.

Undue Influence

JGB Collateral v. Rochon 2020 Ont CA

The trial judge concluded that a mortgage was not enforceable against wife because it was the product of presumed undue influence from husband, the mortgagee had constructive notice of the undue influence, and the mortgagee did not adequately ensure that wife received independent legal advice. The Court of Appeal reversed. The presumption of undue influence is rebuttable. It arises if the relationship between the debtor and guarantor, coupled with the nature of the transaction between them, justifies an inference that the transaction was the result of undue influence. If the presumption applies, then the lender is put on notice and must take reasonable steps to try to ensure that the guarantor understands the transaction and is entering into it voluntarily by encouraging the guarantor to seek independent legal advice. If the lender does not take these steps, then the lender has the evidentiary onus to adduce sufficient evidence to rebut the presumption of undue influence. In this case, there was evidence from the mortgagee that it had obtained an oral confirmation from the two lawyers who acted for the corporate debtor, husband, and wife that they had explained the transaction to both husband and wife. Further, wife had a financial interest in the debtor corporation. More importantly, wife admitted that she signed the documents of her own free will and that husband did not threaten or force her to sign any of the documents. She merely said that she signed the documents because husband asked her to so. Wilful blindness is not proof of undue influence.

Costs Outline

Kossay El-Khodr v. Northbridge Commercial Insurance Company 2020 Ont SCJ

Successful party wanted to obtain more costs than was set out in its costs outline. That amount was lower than it should have been due to inadvertence. The judge refused to do so. The purpose of a costs outline is to force a party to commit to an amount it will be seeking in costs so that, if it is unsuccessful, it cannot be heard to say that the motion was simple or unimportant in order to diminish the costs that otherwise would be payable to the opposite party. Allowing the party to then increase the costs, when successful, would give it the benefit of potentially driving down the costs it would be required to pay if unsuccessful without any corresponding detriment if successful.