Dominique Michaud

This addendum to a prior summary judgment decision (2018 ONSC 4978) corrects the amount owing on a mortgage and clarifies the post-judgment interest rate.

The court had previously misstated the amount owing.

The corrected mortgage debt as of August 16, 2018, is $2,841,580.55, and post-judgment interest is to accrue at the rate specified in the mortgage.

The defendant agreed to the corrected amount and took no position on the interest rate.

The plaintiffs, Trez Capital, brought a summary judgment motion to enforce a Guarantee and Postponement of Claim against Ontario International College Inc. (OIC).

OIC resisted, arguing lack of genuine independent legal advice, undue influence, unconscionability, and non est factum, claiming its liability was limited to $1 million.

The court found no genuine issue requiring a trial, determining that OIC was adequately advised by its lawyer, Mr. Shapiro, and understood the nature and consequences of the guarantee.

The court reiterated that the absence of independent legal advice alone is not a defence to a guarantee claim, especially when the guarantor is a direct beneficiary of the loan transaction.

Summary judgment was granted to the plaintiffs.

The appellants appealed the dismissal of their motion for summary judgment seeking to have the respondents' action declared statute-barred under the Limitations Act, 2002.

The critical issue was whether the respondent lender, Trez Capital, had knowledge of the appellants' ownership interest in the project corporations prior to the expiration of the two-year limitation period.

The motion judge conducted a mini-trial on the disputed question of what was disclosed during a September 13, 2013 telephone call between the respondent's representative and Trez's representative.

The motion judge preferred the evidence of Trez's representative and found that the appellants' ownership interest was not disclosed during that call, thereby rejecting the limitation defence.

The appellants appealed on multiple grounds, including that the motion judge made findings beyond what was necessary to determine the motion, made palpable and overriding errors of fact, and erred in law regarding the limitations period analysis.

The applicants sought a temporary injunction to prevent a power of sale, an order to assign a first mortgage, and a vesting order for three lots, aiming to extinguish a second mortgage held by one of the respondents.

The court dismissed all requests, finding the applicants' attempt to "cut out" the second mortgage was not bona fide.

The court held that the assignment, even if granted, would not extinguish the second mortgage due to contractual subordination and the subsequent mortgagee's right to redeem.

The court also found no serious issue to be tried for the injunction, no irreparable harm, and that the balance of convenience favored the respondents, noting the applicants did not come with clean hands.

This endorsement corrects factual errors in a previous endorsement dated May 24, 2017, regarding specific dates of telephone calls and property management appointments.

It also grants the plaintiffs' request for an order dismissing the limitations defence of the Bernstein defendants, which was an oversight in the prior decision.

Dr. Stanley Bernstein and his companies moved for summary judgment to dismiss claims of fraud, conspiracy, and oppression brought by Trez Capital Limited Partnership and others, arguing the action was statute-barred under the Limitations Act, 2002.

The central issue was whether a telephone call on September 13, 2013, provided Trez with sufficient notice of a claim to start the limitation period.

The court conducted a mini-trial on the limitation issue, weighing conflicting evidence regarding the content of the call.

The court found that Trez was not put on sufficient notice and that, even if it had been, a proceeding would not have been an appropriate means to seek remedy until the extent of loss from property sales by a receiver was known.

The motion for summary judgment was dismissed.

The applicant, CVC Ardellini Investments Inc., sought leave to file a second supplementary application record, or alternatively, a supplementary affidavit from Robert A. Izsak and an affidavit from Elio Monaco.

The application aimed to obtain an order assigning the respondent's mortgage on the basis of default.

The court applied Rule 39.02(2) of the Rules of Civil Procedure, which governs the filing of affidavits after cross-examination.

Leave was granted only for paragraph 8 of Mr. Izsak's supplementary affidavit, which attached the mortgage amending agreement, as it responded to information previously refused during cross-examination due to a misinterpretation of PIPEDA.

All other parts of Mr. Izsak's affidavit and Mr. Monaco's affidavit were deemed inadmissible as they contained information known prior to cross-examination, did not respond to matters raised on cross-examination, or were irrelevant.

The applicant's motion was dismissed in part, and the respondent was awarded substantial indemnity costs.

The applicants commenced an application seeking a compulsory purchase of their shares or winding up of the companies, along with an initial motion for an interim receiver.

After receiving financial disclosure, the applicants abandoned the initial motion and brought an amended motion for an inspector, which they later also abandoned in favour of different relief.

The respondents sought costs thrown away for the abandoned initial motion and costs for the amended motion.

The court awarded the respondents costs thrown away 'on account' and costs of the amended motion on a partial indemnity basis, noting the applicants' approach of seeking draconian relief only to abandon it caused unnecessary legal work.

The moving party brought a motion to vary a prior judgment to permit a company to accept a new, higher offer to purchase a commercial property.

The parties had previously signed minutes of settlement agreeing to sell the property to a tenant based on a revived earlier offer.

The moving party argued the new offer constituted new facts discovered after the judgment under Rule 59.06(2)(a).

The court dismissed the motion, finding the new offer was solicited before the settlement became binding and did not constitute new facts.

The court emphasized the finality principle and held the parties to their freely negotiated bargain.

A condominium corporation sought an equitable lien and priority over a registered mortgage for substantial unpaid common expense arrears relating to numerous units.

The corporation argued that the unit owner had been unjustly enriched by failing to pay common expenses and that the court should grant equitable relief or revive the statutory condominium lien that had expired.

The court held that the Condominium Act, 1998 provides a comprehensive statutory scheme governing liens for common expenses and that courts cannot create an equitable lien where the statute occupies the field.

Even if such a lien existed, it would not take priority over the previously registered mortgage under the Land Titles Act.

The court further held that a purchaser or mortgagee is entitled to rely on the representations contained in a status certificate and is not required to investigate beyond it.

The motion seeking priority or revival of the lien was dismissed.

Following a successful summary judgment motion enforcing an indemnity agreement relating to a Tarion bond, the plaintiff sought substantial indemnity costs and supplementary damages for additional bond payments and insurance premiums incurred after judgment.

The defendants argued that costs should be limited to partial indemnity and significantly reduced.

Applying the principle that costs should reflect a fair and reasonable amount rather than exact reimbursement, the court fixed costs at $20,427.52 inclusive of HST and disbursements, payable jointly and severally by three individual defendants.

The court also granted supplementary partial summary judgment for additional indemnity obligations arising after the earlier judgment.

The defendants were ordered to pay $26,050.50 for additional bond payments, premiums, and contractual interest.

The plaintiff purchaser brought a motion for summary judgment seeking return of deposits and due diligence costs arising from a failed real estate transaction for development land.

The purchaser alleged the vendor breached an environmental provision in the agreement of purchase and sale relating to hazardous substances and noise contamination guidelines.

The vendor argued the provision constituted a warranty rather than a condition and that the purchaser’s refusal to close constituted default resulting in forfeiture of the deposits.

The court held that several genuine issues requiring a trial remained, including interpretation of the contractual provision, the meaning of municipal correspondence concerning application of environmental noise guidelines, proof of damages, and the availability of relief from forfeiture.

Summary judgment was therefore inappropriate.

Following dismissal of the plaintiff’s $4.5 million action alleging that corporate sponsors of a soccer association owed a duty to ensure adequate insurance coverage for players, the court determined the issue of costs.

The successful defendants sought substantial partial indemnity costs following a Rule 21 motion that terminated the claim at an early stage.

The court held that while the defendants were entitled to significant costs, the hours claimed by counsel were excessive and involved duplication of work.

Considering the factors under Rule 57.01 of the Rules of Civil Procedure, the court reduced the requested amounts and fixed reasonable costs payable to the successful defendants.

Following a motion in which the plaintiffs were completely successful, the court determined the appropriate costs award.

The court considered the defendants’ extensive submissions that went beyond the jurisdictional issues raised by the motion and addressed the merits of the case.

Applying the principles governing costs awards and recognizing the additional time and materials used by the defendants, the court held that costs somewhat above the partial indemnity scale were appropriate.

The plaintiffs were awarded a fixed all-inclusive costs amount payable within 30 days.

The defendant landlord brought a Rule 21.01(b) motion to strike portions of an amended statement of claim alleging breach of an implied contractual duty of good faith in relation to the termination of a commercial lease.

The plaintiff tenant alleged it was promised 18 months’ notice to vacate but received significantly less, asserting that the landlord’s conduct breached an implied duty of honest and good faith performance.

The court held that Canadian jurisprudence does not recognize an implied duty of good faith that would impose additional obligations inconsistent with the express terms of a commercial lease.

Accepting the pleaded facts as true, the alleged conduct did not defeat the purpose of the lease and could not sustain a claim for breach of an implied duty of good faith.

The impugned paragraphs were struck for disclosing no reasonable cause of action, with leave to amend.

The defendants brought a motion to stay the plaintiffs' action based on a lack of jurisdiction, forum non conveniens, and abuse of process.

The plaintiffs alleged they released their interest in Ontario lands based on fraudulent misrepresentations regarding real estate and escrow funds in Dubai.

The court found a real and substantial connection to Ontario, noting the alleged fraud occurred in Ontario, the contract was governed by Ontario law, and the defendants attorned to the jurisdiction by arguing the merits of the claim.

The court dismissed the motion, finding Ontario was the appropriate forum and the claim was not an abuse of process.

The defendants, corporate sponsors of a soccer organization, brought a motion under rules 21.01(1)(b) and 25.11 of the Rules of Civil Procedure to strike a negligence claim arising from a catastrophic soccer injury.

The plaintiff alleged the sponsors had a duty of care to ensure that the organization maintained adequate insurance coverage for players.

The court held that mere financial sponsorship and advertising relationships do not create a proximate relationship giving rise to a duty of care to participants.

The pleadings failed to establish reliance, proximity, or control over the event or insurance arrangements.

The statement of claim disclosed no reasonable cause of action and was struck.