Legal Blog

Insurance Coverage in CCDC Contracts

For the GCs among you:

We have a new CCDC41 2020. You may think it applies only to a CCDC2 2020 form of contract, but you would be wrong. For example, section 11.1.1 of CCDC2 2008 states:

… the Contractor shall provide, maintain and pay for the following insurance coverages, the minimum requirements of which are specified in CCDC 41 – CCDC Insurance Requirements in effect at the time of bid closing

Section 11.1.1 of CCDC5B 2010 is identical and, I expect, all the other CCDC contracts are the same or similar. The point is: subject to any supplementary conditions, CCDC41 2020 governs insurance regardless which CCDC form of contract you use.

The insurance coverage in CCDC 41 increases most limits from $5mil to $10mil. The extra premium should be included in your tenders and your insurance coverage should comply.

Omnibus

Most court decisions will deal with one to four issues of law. Some deal with more, but usually those decisions are very long. In University Plumbing v. Solstice Two Limited, a 2019 decision of the Ontario Superior Court of Justice, the judge dealt with eight discrete issues in a mere 31 paragraphs.

Set Stage

A contractor performed mechanical work for a corporate developer and was not fully paid for its work. Notwithstanding the developer’s numerous promises to pay and a request, with which the contractor had initially complied, that the contractor wait until the developer received anticipated funds from Tarion Warranty Corporation, the developer still did not pay. Finally, the contractor commenced a trust action against the developer and its two directors, who were also officers, for $103,000, which, with accrued interest, had ballooned to $345,000.

Costs Self-Represented

Donatelli- Venneri v. Stern Landesman Clark LLP 2020 Ont SCJ

The plaintiffs appealed an assessment officer’s taxation award against them. The judge dismissed the appeal and, in his decision on costs, noted that the plaintiffs behaved appallingly during the hearing and made unsupported allegations against the defendant law firm of misconduct and a lack of ethics. The judge ordered costs on a substantial indemnity basis and did so even though the law firm had acted for itself. He stated, “While they are self represented, all work docketed was counsel work. I also accept that time spent by a service provider who bills based on time is time not spent on billable work.”

Lawyer’s Duty of Care

Nieuwenhuis v. FRP Inc. cob Rico Tech 2020 Ont SCJ

A vendor sued the purchaser for the deposit of $175,000 on an aborted real estate transaction, Because the vendor’s lawyers were holding the deposit, the vendor added its lawyers as party defendants – only to ensure that the money would be paid. The purchaser crossclaimed against the lawyers, claiming that deal did not close because the lawyers improperly inserted conditions in the contract. The judge held that there was no duty of care owed by the vendor’s lawyers to the purchaser and dismissed the crossclaim as showing no reasonable cause of action. Query: why would the vendor have sued its own lawyers? Presumably, a simple undertaking to hold the money in trust pending a decision of the court should have been satisfactory.

Bankruptcy Discharge

RBC v. Kim 2020 Ont SCJ

s. 178(1)(e) of the BIA provides that a bankruptcy discharge does not release the bankrupt from debts resulting from obtaining property or services by false pretences or fraudulent misrepresentation. In this case, the bankrupt had provided a personal statement of affairs that set out incorrect facts. The court had to decide whether they were false representations and, if so, whether RBC relied on them. The judge found that the bankrupt, whom the judge disbelieved in every regard, knew that the representations were false and that the whole purpose of a statement of affairs was to be part of the loan approval process. The judge stated that the false representations were intentional and were the type of socially unacceptable conduct at which the section was aimed.

Summary Judgment Methodology

Royal Bank of Canada v. 1643937 Ontario Inc. 2021 Ont CA

The debtors claimed that the bank had represented that the guarantees that they signed would result in a maximum exposure for all of them of $600,000. The guarantees when added together resulted in an exposure of $1.5 million. The motion judge granted summary judgment. The Court of Appeal reversed and sent to matter to trial. It held that, on a motion for summary judgment, the motion judge must first determine whether there is a genuine issue requiring a trial based solely on the evidence before the judge and, if there appears to be a genuine issue, determine if the need for a trial can be avoided by use of the enhanced powers to weigh evidence, evaluate credibility, and draw reasonable inferences. Because the motion judge did not seem to do this, but rather was more conclusory, and because the motion judge did not fully review all of the evidence and why she decided some evidence was not to be relied upon, the court held that she had not properly analysed the case and the evidence. The court also added that an “entire agreement clause” did not preclude or diminish the defence of misrepresentation.

Frivolous Appeal – Rule 2.1.01

National Bank of Canada v. Guibord 2020 Ont CA

The defendant appealed a timetabling endorsement, clearly an interlocutory order. A single judge of the Court of Appeal dismissed the appeal on grounds that the court lacked jurisdiction. The defendant then appealed that decision to a panel of the Court of Appeal. The plaintiff moved under Rule 2.1.01 for determination that the defendant’s appeal was frivolous, vexatious, and an abuse of process. The Court agreed that Rule 2.1.01 applied and that the defendant’s appeal was frivolous because it was completely devoid of merit. One cannot an appeal interlocutory order to the Court of Appeal without leave.

Leave to Renew Writ

Genworth Financial Mortgage v. Farooqi 2019 Ont SCJ

A writ of seizure and sale was filed in 2010 and expired in 2016. The creditor moved in 2019 for leave to renew the writ. The judge granted the motion, holding that the debtor had not done anything in reliance of the creditor having done nothing to enforce the writ (e.g. the debtor had not purchased any property in his name). Because the debtor had not been prejudiced, the judge exercised his discretion to grant leave to issue the writ; however, because the creditor had done almost nothing after the filing of the writ to collect the judgment debt, the judge limited the amount of the writ to the judgment amount plus interest for only three years.

Settlement & Release

Reid v. Bracebridge 2021 Ont SCJ (Div Ct)

The parties, through their lawyers, had entered into a settlement of one action, leaving a second outstanding. The plaintiff then fired his lawyer, refused to sign the release that the settlement contemplated (taking the position that it was wider than it ought to be), and requested that the settlement not be enforced because it was contingent upon the release. The court noted that if it is not apparent that the wording of the release is an essential term of the settlement, then the settlement is enforceable and the parties have to then resolve the wording of the release by common sense within the framework of the settlement or by application to courts. In this case, the court held that the lawyers had agreed upon the terms of the release and that there was no indication that the plaintiff’s lawyer had acted without authority. The settlement was enforced.

Release

614128 Ontario Ltd (Trisan Construction) v. City of Toronto 2020 Ont CA

Contractor and owner entered into a settlement agreement by which the owner paid a significant sum in exchange for a release stating that there were no further outstanding claims on the projects. At the time, two of the five projects involved had not been completed as to deficiencies and there were contractual completion holdbacks for both projects. The contractor then took the position that it should receive not only the settlement amount, but also the holdback amounts. The court dismissed the claim stating that, at the time of the settlement, the contractor was fully aware of the money the owner had held back and, if it had intended these funds be paid in addition to the settlement amount, it could have stipulated that in the settlement agreement.