I had written a previous blog on the “time is of the essence” clause in real estate agreements where it was discussed that the strict adherence to any agreed upon time limits was generally the case. A recent Ontario Court of Appeal case, Fortress Carlyle Peter St. Inc. v. Ricki’s Construction and Painting Inc., serves as a reminder that the “time is of the essence” clause is not absolute and unfettered, and there are preconditions that must be satisfied for a party to rely upon and insist on time being of the essence. The facts are not overly complicated in this case. The respondent was a condominium developer in the process of acquiring properties for a proposed project in downtown Toronto. The developer entered into an Agreement of Purchase and Sale (“APS”) with the vendor to acquire the subject property. Although the APS required the vendor to provide estoppel certificates five days prior … Read More
Latent Defects or Hidden Damage in Real Property Transactions
What Are Latent Defects Or Hidden Damages? Latent defects or Hidden Damage are defects to a property that are not generally discoverable by a prospective purchaser on a reasonable inspection and ordinary vigilance. This can include issues such as, faulty electrical wiring hiding behind the walls or a well-hidden termite or mold problem. Many real estate purchases include a buyer’s right to inspect the property to be purchased. However, these inspections are not exhaustive, and may not reveal latent defects or hidden problems with the property that are not readily visible. Why Do Participants In A Real Estate Transaction Need To Be Concerned About Latent Defects Or Hidden Damage? The problem latent defects or hidden damage can pose for a prospective real estate purchaser is that no amount of vigilance on a visual inspection can uncover such a defect, even one conducted with a home inspector (who’s inspections are typically … Read More
Maryland judgment domesticated in Ontario
In Kaveh v Kaveh Semnani 2019 ONSC 996, the Ontario Superior Court of Justice was asked to determine whether the Maryland Court had jurisdiction and if the judgment could be recognized and enforced in Ontario. The Plaintiff alleged that the Defendant owed him money and the Defendant argued that the Maryland Court did not have proper jurisdiction to hear the case. The Defendants did not defend the case before the Maryland Court and a default judgment was granted in their absence. Subsequently, the Plaintiff sought to have the Maryland judgment recognized in Ontario. Real and substantial connection test The Court applied the ‘real and substantial connection test’ which functions only to test whether the Maryland Court correctly assumed jurisdiction over the matter. The Ontario Court did not consider the facts of the original matter before the Maryland Court, except to consider if the facts would relate to any potential defence … Read More
Fork In the Road: Critical Considerations by Condominium Corporations in Anticipatory Failed Closings
In 1179 Hunt Club Inc. v. Ottawa Medical Square Inc., 2019 ONCA 700, the purchasers, Ottawa Medical Square Group, entered into an Agreement for Purchase and Sale to purchase condominium units owned by the vendor, 1179 Hunt Club Inc. The value of the commercial condominium units in the Hunt Club Project was $5.6 million dollars. Five days before closing, the purchasers, sent a request to the vendor, requesting an extension of time as the purchasers had not yet finalized their arrangements for financing. Three days before closing, the vendor advised that it would insist on closing, and if the purchaser could not close, it would exercise its rights and remedies under the Agreement for Purchase and Sale. On the date of closing, the vendor learned that the Land Registry Office had made an error in assigning parcel identification numbers. Although this error was ameliorated later that day, this mishap, prevented … Read More
Obiter or Not? A Refresher from the Ontario Court of Appeal
The recent case of The Catalyst Capital Group Inc. v VimpelCom Ltd., 2019 ONCA 354 [Catalyst], serves as a reminder that a court’s finding will not be considered obiter simply because there was another sufficient basis for the court’s decision. The Rule of Precedent The rule of precedent requires that courts render decisions that are consistent with the previous decisions of higher courts [Canada (AG) v Bedford, 2012 ONCA 186]. There are several well-known rationales for the rule: it promotes consistency, certainty and practicability in the law, sound judicial administration, and it enhances the legitimacy and acceptability of the common law [David Polowin Real Estate Ltd. v Dominion of Canada General Insurance Co., 2005 ONCA 21093]. Ratio vs Obiter The traditional dichotomy of ratio decidendi (“ratio”) and obiter dicta (“obiter”) is important for the scope of the rule. Only the ratio is binding on a subsequent court. Ratio refers to … Read More
Prescriptive Easements in Ontario Cottage Country
The Ontario Superior Court of Justice decision in Arcon Property Holdings Ltd. v. Nelson, 2019 ONSC 2267, involved a dispute between cottage owners over easement rights related to a 15 foot wide strip of land near Grand Bend. The right-of-way was mainly a paved road used by the cottage owners to access their properties from the road but it also extended past the pavement to the waterfront. The applicant complained that the respondents parked their vehicles on the right-of-way which prevented them from accessing the beach, launching their boat, building ramps and structures to facilitate launching their boat and parking a trailer in their driveway. The applicant sought an order prohibiting the respondents from parking on the right-of-way and interfering with their easement rights. The Court found that the applicant’s easement was merely for “ingress and egress, in, over and upon” the property and did not provide the applicant with the right to access … Read More
Ontario Court of Appeal: There is No Common Law Tort of Harassment
Merrifield v Canada (Attorney General), 2019 ONCA 205 is the first case in which a Canadian appellate court has been required to determine whether a common law tort of harassment exists. The Ontario Court of Appeal has decided that it does not. Ontario Superior Court of Justice Relying on four trial-level decisions, the trial judge held that the tort of harassment exists as a cause-of-action in Ontario and that the elements of the tort are: Outrageous conduct; Intention to cause, or reckless disregard for causing, emotional distress; Suffering of severe or extreme emotional distress; and The outrageous conduct is the actual and proximate cause of the emotional distress. Ontario Court of Appeal The Ontario Court of Appeal held that, in sum, the four trial-level decisions assume rather than establish the existence of the tort or its elements. Contrasting the case at bar with Jones v Tsige, which recognized a new … Read More
Andrew Ottaway Writes Article on CISG for Law Times
The Law Times recently published an article by Andrew Ottaway on the United Nations Convention on Contracts for the International Sale of Goods (the “CISG”). The article includes: a discussion of the recent case of Solea International BVBA v. Bassett & Walker International Inc., 2018 ONSC 4261 (CanLII), in which the Ontario Court applied the CISG; a discussion of the near total obscurity of the CISG in Ontario; examples of the notable differences between the CISG and the Ontario common law / Sale of Goods Act. The article can be read in its entirety here. The lawyers at Gilbertson Davis LLP have experience in commercial litigation, including cross-border litigation involving the CISG. Contact us for an initial consultation.
Tests for Intentional Infliction of Mental Suffering and Constructive Dismissal clarified by the Ontario Court of Appeal in Colistro v Tbaytel
In Colistro v Tbaytel, 2019 ONCA 197, the Ontario Court of Appeal recently dismissed an appeal and cross-appeal in an employment dispute. Appeal: Intentional Infliction of Emotional Suffering In the appeal, the Ontario Court of Appeal confirmed that three elements comprise the tort of intentional infliction of mental suffering: Flagrant or outrageous conduct; Calculated to produce harm; and Resulting in a visible and provable illness. Objective vs Subjective Following its earlier decisions in Prinzo v Baycrest Centre for Geriatric Care and Piresferreira v Ayotte, the Ontario Court of Appeal held that the first and third element are objective, while the second is subjective. The Court held that the second element requires the plaintiff to prove that “the defendant must have intended to produce the kind of harm that occurred or have known that it was almost certain to occur” [Boucher v Wal-Mart Canada Corp.]. It is insufficient to show only … Read More
Employee or Not? An Uber Problem to be Decided by Ontario Courts: Arbitration Not the Route
In its first reported decision of the year, the Ontario Court of Appeal has allowed a proposed class action against Uber to proceed in Ontario court. Facts The Appellant commenced a proposed class action in January 2017. They sought, among other things, a declaration that Uber drivers are employees of Uber and governed by Ontario’s Employment Standards Act [“ESA”], as well as $400 million in damages payable to the class for alleged Uber violations of ESA provisions. Prior to certification, Uber brought a motion to stay the proceeding, requesting the court to enforce a clause in the agreement that requires all disputes to be arbitrated in Amsterdam according to the law of the Netherlands. Ontario Superior Court of Justice The motion judge held that the arbitration clause was enforceable and stayed the action. Applying the Supreme Court of Canada’s Seidel decision and the Ontario Court of Appeal’s TELUS ruling, the motion … Read More
Gilbertson Davis LLP Successfully Defends Against Appeal of Decision Enforcing Liquidated Damages in Settlement Contract
In Haas v. Viscardi, 2019 ONCA 133, Andrew Ottaway of Gilbertson Davis LLP assisted the plaintiff in securing his settlement agreement with a defendant (in an earlier investment fraud litigation) with a liquidated damages clause. Specifically, the defendant was required to pay $60,000 if he failed to make prompt payments under the subject settlement agreement. The defendant, after defaulting, refused to honour the liquidated damages clause. However, on the plaintiff’s motion for summary judgment, the motion judge upheld the liquidated damages clause and granted judgment. Our blog post on the motion decision can be found here. On appeal, in Haas v. Viscardi, 2019 ONCA 133, the Court of Appeal rejected the defendant’s argument that the liquidated damages clause was an unenforceable penalty clause, and upheld the motion judge’s decision granting summary judgment. The Court of Appeal also enforced the provision in the settlement agreement requiring that the defendant pay the plaintiff’s … Read More
Court of Appeal Upholds Dismissal of Recognition Action Based on Limitation Period
In Grayson Consulting Inc. v. Lloyd, 2019 ONCA 79, the plaintiff obtained default judgment in South Carolina dated August 20, 2014 default judgment in the amount of US $451,435,577.37 against the defendant. The plaintiff sought a Mareva injunction (i.e. a freezing order). Although the Court initially granted the injunction, the Court later set aside the injunction in response to the defendant’s motion arguing that the Ontario proceedings were commenced outside the limitation period. See our blog on the motion decision here. On appeal, the Court of Appeal reiterated the applicable test from Independence Plaza 1 Associates, L.L.C. v. Figliolini, 2017 ONCA 44, being: (i) the basic two-year limitation period applies to a proceeding on a foreign judgment; and (ii) the limitation period begins to run when the time to appeal the foreign judgment has expired or, if an appeal is taken, the date of the appeal decision, unless the claim … Read More
Ontario Court Considers United Nations Convention on Contracts for the International Sale of Goods on Summary Judgment Motion
In Solea International BVBA v. Bassett & Walker International Inc., 2018 ONSC 4261, the Ontario Court of Appeal had directed the Superior Court to rehear a motion for summary judgment applying the provisions of the United Nations Convention on Contracts for the International Sale of Goods (“CISG”), representing a rare instance of the Ontario Court explicitly considering the CISG. The case involved the sale of shrimp by the plaintiff to the defendant. The defendant argued, among other things, that it was not required to pay for the shrimp because the plaintiff breached a fundamental term of the contract, being provision of a Health Certificate with a statement guaranteeing that the shrimp was free of certain diseases. The defendant argued that as a result of breach of a fundamental term, it was entitled to declare the contract avoided (pursuant to Article 49 of the CISG). In rejecting that defence, the … Read More
Court Stays Injunction Claim in Favour of Arbitration / Refuses to Consolidate Arbitration Proceedings Without Consent of All Parties
In Loan Away Inc. v. Western Life Assurance Company, 2018 ONSC 7229, the plaintiff had an agreement with the defendant by which the plaintiff sold the defendant’s insurance policies in return for payments by the defendant. The defendant ceased making payments and the plaintiff commenced an action against the defendant for an injunction to require the defendant to make the payments to the plaintiff and to prevent the defendant from terminating the insurance policies that the plaintiff had sold on the defendant’s behalf. The defendant relied upon an arbitration clause in its agreement with the plaintiff to stay the action. The plaintiff argued, among other things, that the claim should not be stayed because the arbitration clause contained arbitration clause contained an exception for requests for a temporary restraining order or other forms of injunctive relief. The plaintiff argued that its request for a permanent injunction fell under the category … Read More
Renewal time for professional liability insurance? Mind the gap!
How can a policyholder who purchased consecutive policies of professional liability insurance lose the benefit of insurance? On October 29, 2018, the Ontario Superior Court released its judgment in Cronnox Inc. v. Lloyd’s Underwriters, 2018 ONSC 6437 (CanLII), holding that the professional liability insurer did not owe the policyholder a duty to defend or to indemnify it in respect of a subrogated law suit. It was the second part of an insurance coverage dispute among an engineering company, two insurers and a law firm. In the first instalment, the same court also held earlier this year that the second insurer in the sequence was also not liable: Liberty Mutual Insurance Company v. Cronnox Inc., 2018 ONSC 1578 (CanLII). In September, 2013, the policyholder chose not to act on letters and emails from counsel for subrogating insurers who had paid to repair damage to a Toronto-area hotel, allegedly in the millions … Read More
Supreme Court Considers an ISP’s Right to Costs in Norwich Orders for Copyright Infringement
Norwich Orders have become a common tool to detect wrongdoers hiding behind the elusive veil of the internet. Whether the matter is with respect to defamation, intellectual property infringement, or fraud, the equitable remedy of pre-action discovery to compel Internet Service Providers (“ISPs”) to disclose a wrongdoer’s identity can help claimants determine their causes of action before they commence litigation. A question that has been raised, however, is who bears the costs of the Norwich Order? Is it the claimant seeking the Norwich Order or the ISP subject to the equitable remedy? To complicate the matter further, how does this interact with an ISP’s obligations under the “notice and notice” regime pursuant to Canada’s Copyright Act? By way of background, ss. 41.25 and 41.26 of the Copyright Act govern the statutory “notice and notice” regime for alerting alleged copyright infringers in Canada. These sections under the Copyright Act state that … Read More
Andrew Ottaway Co-Chairs Continuing Legal Education Program for Ontario Bar Association
Andrew Ottaway was the co-chair of a legal education program on pleadings for the Ontario Bar Association. The topics covered included: Pleadings basics; Pleading complex causes of action, including fraud, misrepresentation, breach of trust, malice, conspiracy, oppression and defamation; Pleading Foreign Law; Pleading Motions, including striking the opposing party’s pleadings; and Amending Pleadings. See the complete agenda and the panel of speakers here. The lawyers at Gilbertson Davis are regularly asked to contribute to professional development programs, as chairs and speakers.