Legal Blog

Partial Summary Judgment: Action By Subcontractor

1526806 Ontario Inc. v. EllisDon Corporation 2018 Ont SCJ

General contractor backcharged a subcontractor for work that general performed, which sub ought to have performed. Sub commenced an action, not just for breach of contract, but also for negligent and fraudulent misrepresentation, punitive damages, and aggravated damages. General brought a motion for partial summary judgment to dismiss all claims other than the breach of contract claim. Sub’s claim for misrepresentation relied on the allegation that general informed sub that general would make up for the backcharges by giving sub two more projects and did not. The judge dismissed the fraudulent and negligent misrepresentation claims because there was no evidence of loss; the sub ultimately commenced its action for breach of contract and lost nothing as a result of the alleged misrepresentation. The judge dismissed the claim for aggravated damages. Aggravated damages compensate an individual for intangible injuries (i.e. those in addition to financial loss). A corporation cannot be injured in its feelings, only in its pocketbook. The judge allowed the claim for punitive damages to continue because the validity of the backcharges was at the heart of the breach of contract claim; whether there was a fraudulent scheme, which might support punitive damages, regarding the backcharges would have to be assessed by the trial judge. The motions judge did not want to have inconsistent findings.

Written by Jonathan Speigel, the founding partner of Speigel Nichols Fox LLP, leads the litigation and construction practices.