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Disclaimer of Liability: The Speigel Nichols Fox LLP Blog is intended to provide helpful general information; however, it is not legal advice. You must consult a lawyer if you have a specific legal question or issue that requires an answer.

Nov
17
2023

Costs Against Non-party & Increased Costs

Prasher Steel v. BWK Construction Company 2023 Ont SCJ

The general was wholly successful against the sub. The general tried to get costs awarded against the sub’s principal, but was unsuccessful because the principal had done nothing improper during the proceedings and had not acted fraudulently or deceitfully. The judge did award substantial indemnity costs against the sub; the general had beaten its offer to settle and the sub’s lien was excessive.

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Nov
15
2023

Unlienable Items

Chesney v. Malamis 2023 Ont SCJ

Contractor liened for the amount specified in his invoice. It was apparent that all but $15,000 of the invoice had nothing to do with actual work being valued; it was, in essence, a claim for an equitable interest in the property being renovated. The judge noted that the damages such as loss of profits, lost opportunity costs, property management fees, and head office overhead were not improvements and were not lienable. The judge reduced the security from $173,000 to $15,000.

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Nov
15
2023

Adjudication and Payment into Court

Arad Incorporated v. Rejali 2023 Ont SCJ

Contractor liened for money owed. In the meantime, the parties had two adjudications: one by the contractor for money owed and the other by the owner for money overpaid to someone associated with the contractor. We gather that the adjudicator had little evidence to go on and ultimately dismissed both adjudications. He held that the contractor had been paid everything to which it was entitled and that any overpayment was made to someone other than the contractor. The owner, who had paid money into court to vacate the contractor’s claim for lien moved for the return of that money. The judge refused. He held that an adjudicator’s decision was an interim decision and that it did not bind the court; it was merely one piece of evidence. The adjudicator’s decision alone was therefore insufficient to justify the loss of the contractor’s security.

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Nov
01
2023

Data Dump

Posted in Construction

The Gowing/Walsh litigants in the previous case were also involved in another action dealing with another construction project. This matter had progressed beyond the pleadings stage when issues arose about the productions of documents, resulting in a 2023 motion.

A large stack of binders.

Discovery

In the documentary discovery phase of litigation, parties must generally provide each other with all relevant, non-privileged documents. On a large-scale construction project, productions can involve hundreds of thousands of documents, particularly when emails informing the progression of the project are included. Before documentary discovery occurs, parties are required to agree on a discovery plan, which sets out the scope of production, including how electronic evidence is to be searched to eliminate production of irrelevant documents.

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Nov
01
2023

Holdback & Costs

Posted in Construction

A motion for security for costs allows a defendant to respond to a claim brought by an impecunious or out-of-jurisdiction plaintiff. A successful motion essentially establishes a pay-to-litigate system in which the plaintiff is required to proactively pay money into court to account for any adverse costs award that might eventually be awarded if it were to lose the case.

A safe.

On a motion for security for costs, the defendant must first meet the initial burden of establishing that it appears that there is good reason to doubt that the plaintiff has sufficient assets in Ontario to satisfy an adverse costs award. If the defendant does so, then the onus shifts to the plaintiff to demonstrate that the order for security for costs would be unjust in the circumstances.

In Gowing Contractors Ltd. v. Walsh Construction Company Canada, a 2022 decision of the Ontario Superior Court of Justice (Associate Judge), a general contractor brought a seemingly textbook motion for security for costs. The general was sued by its sub for over $3 million. The sub was no longer in business: it had ceased operations, tendered no evidence of what happened to its assets, transferred property to a numbered company with no apparent connection, changed its registered business address, held no real property, no longer had a website, and was even named as a defendant in several other actions in Ontario. Yet, the associate judge denied security for costs, finding that the general had not even met its initial burden. The reason for this seemingly incongruous result is all in the holdback.

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Oct
11
2023

Case Conference Judicial Powers

Miller v. Ledra 2023 Ont SCJ

At a case conference for leave to schedule a motion or application or an appeal from an associate judge, the presiding judge may, instead of scheduling the interim proceeding for resolution, actually resolve the issue at hand if the prejudice allowing an adjournment or moving the issue forward would outweigh the prejudice to the losing party of deciding the issue. In this case, the only issue was the production of financial statements for 3 years – even though the respondent denied that the applicant was a shareholder. The judge held that the prejudice to the respondent would be minimal.

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Oct
11
2023

Real Property Limitations Act

Bank of Montreal v. Iskenderov et al 2023 Ont CA

A 5-judge panel of the court overruled Anisman v. Drabinsky 2021 Ont CA and decided that an action for a fraudulent conveyance is governed by the 2-year limitation period of the Limitations Act, 2002 rather than the 10-year limitation period of the RPLA. The court also noted that the relief available under the FCA was not the return of title to the name of the fraudulent transferor; rather, it was a declaration that the creditor could treat the transferred property as exigible for the debts that the transferor debtor owed to the creditor.

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Oct
01
2023

Damages Not Presumed

Posted in Lawyers' Issues

In the 2014 decision in Bhasin v. Hrynew, the Supreme Court of Canada recognized a general organizing principle of good faith and the duty of honest performance in contract law. Recognizing the duty, however, was only the first step. Subsequent caselaw has delineated the scope of the duty.

The recent decision of the Ontario Court of Appeal in Bhatnagar v. Cresco Labs Inc. 2023 ONCA 401 clarifies how a court should normally assess damages for breach of the duty. The Court of Appeal confirmed that damages for breach of the duty of honest performance will not ordinarily be merely presumed. Instead, aside from exceptional circumstances, the plaintiff must show that the alleged breach actually caused damages and must lead evidence to prove what those damages are. This is in keeping with the normal approach of expectation damages for contractual breach.

Two hands holding magnifying glasses examining money.

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Oct
01
2023

Resulting Trust

Posted in Collections

When a purchaser gratuitously places another person on title, the law presumes that this person, who has contributed nothing, holds the property in trust for the purchaser who paid everything. In the case of Costa v. Costa, a 2022 decision of the British Columbia Supreme Court, the judge dealt with types of contribution required to ground an ownership interest.

A person holding a model house in their hands.

On-Again Off-Again

Between 2008 to 2018, a woman and her common law spouse had a classic on-again off-again relationship. Over the years they would live together for some time and then split-up – with the spouse moving into his houseboat. The two would then reconcile and the cycle would continue. No doubt the fact that the two had a child perpetuated this cycle.

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Oct
01
2023

Bankruptcy Rescission

Posted in Collections

In Tran v. Royal Bank of Canada, a 2022 decision of the Ontario Superior Court of Justice, the Court refused to allow a bankrupt to make her bankruptcy vanish without a trace.

An eraser.

Save Me

The case involved a debtor who owed a bank over $480,000. After the debtor ignored the bank’s demands, the bank obtained judgment and successfully petitioned her into bankruptcy. As is often the case, the bankrupt’s parents came to the rescue. The debtor’s father paid the bank $400,000 (less than 83% of the judgment debt) and took an assignment of the bank’s judgment and claim in bankruptcy.

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