Gregory N. Hemsworth

The plaintiff's construction lien action was dismissed, and the defendants' counterclaim was allowed.

This decision addresses the defendants' request for full indemnity costs against the plaintiff corporation and its principals due to egregious conduct during litigation.

The court awarded full indemnity costs against the plaintiff corporation and one principal jointly and severally, finding that principal engaged in fraud, fabricated evidence, and repeatedly lied.

Costs were not awarded against another principal, as their misconduct was not directly related to the litigation.

The plaintiff contractor sued the defendant homeowners for over $523,000 allegedly owing on a custom home construction project, claiming the project evolved without a fixed price.

The defendants argued they had an all-inclusive contract for $540,000, which they had fully paid, and counterclaimed for construction deficiencies.

The court found the plaintiff's principal deliberately lied, fabricated documents, and created false paper trails.

The court dismissed the plaintiff's claim entirely, ordered the construction lien discharged, and allowed the defendants' counterclaim for $65,112.86 to repair deficiencies.

The appellant appealed a trial judgment awarding damages for wrongful termination of a promotional contract.

The trial judge found that the contract required the respondent to promote the appellant's product, not serve as a brand ambassador, and that the morals clause was not violated by the private transmission of nude photographs within an intimate relationship, particularly where the act occurred before the contract was executed.

The trial judge awarded $162,500 in damages representing outstanding periodic payments over the four-year contract term.

The appeal was dismissed.

The defendants in a construction dispute moved for leave to amend their Response to the plaintiff's Request to Admit.

The court granted leave under s. 67(2) of the Construction Lien Act, finding the step necessary to resolve ambiguities and expedite the trial.

Applying the three-part test for withdrawing admissions, the court allowed the amendments, noting they raised triable issues regarding the validity and authenticity of the alleged contracts, there was a reasonable explanation for the initial deficient responses by former counsel, and the plaintiff suffered no non-compensable prejudice.

The plaintiff, a professional hockey player, sued the defendant for wrongful termination of a promotional contract.

The defendant had terminated the agreement citing the plaintiff's demotion to a minor league team and the circulation of nude photographs of the plaintiff on the internet.

The court found that the defendant was not entitled to rescind the contract as it had received much of what it bargained for, and the morals clause did not apply retrospectively to the private sharing of intimate photos.

The plaintiff was awarded $162,500 in damages for the remainder of the contract term and its renewal.

The appellants appealed a Master's decision refusing to add a proposed defendant to their counterclaim due to an expired limitation period.

The Divisional Court allowed the appeal, finding that the date of performance or when the oppression claim arose could not be determined from the pleadings.

The court held it was an error in principle to refuse leave to amend at this stage, without prejudice to the respondents' right to plead the Limitations Act.

The appellant appealed a decision confirming a Master's Report which found that a contract for the supply of light fixtures was between the respondent distributor and the respondent electrical contractor, rather than the appellant.

The Divisional Court dismissed the appeal, finding ample evidence to support the Master's factual findings regarding the identity of the contracting parties.

Leave to appeal the costs order was also denied.

The plaintiff brought an ex parte motion seeking a Mareva injunction and a certificate of pending litigation against the residential property of the individual defendants in relation to an alleged unpaid debt exceeding $24,000.

The plaintiff alleged diversion of trust funds under Part 2 of the Construction Lien Act and relied primarily on an affidavit asserting belief that the defendants were liquidating assets and leaving the jurisdiction.

The court held that a Mareva injunction is an extraordinary remedy requiring a strong prima facie case and evidence of a real risk of asset dissipation.

The affidavit evidence amounted only to unsupported belief and did not meet the required threshold.

The court also found no reasonable claim to an interest in land sufficient to justify a certificate of pending litigation.

The defendants moved for a stay of a civil action on the basis of an arbitration clause contained in a later energy supply agreement, or alternatively sought an extension of time to deliver a statement of defence.

The plaintiff alleged that the agreements were void and sought damages for negligent or fraudulent misrepresentation relating to the formation of the contracts, asserting that the agreements were not authorized and were based on misrepresentations regarding energy savings.

The court held that the arbitration clause applied only to disputes “under” the agreement and did not encompass a challenge to the existence or validity of the agreement itself.

As the dispute concerned the validity of the agreements rather than performance under them, it fell outside the scope of the arbitration clause.

The motion to stay the action was therefore dismissed, though the defendants were granted additional time to deliver their statements of defence.

Following a reference determining entitlement to contract funds under the Construction Lien Act, the court addressed costs between the parties.

An added party supplier who succeeded at the trial of an issue sought substantial indemnity costs against the plaintiff lien claimant.

The court found the claimant engaged in misleading and reprehensible conduct, including misrepresenting contractual arrangements, misappropriating deposit funds, and pursuing a lien claim despite alternative dispute mechanisms.

Substantial indemnity costs were awarded to the successful supplier and partial indemnity costs were awarded to the contractor defendant against the claimant.

The court also confirmed distribution of funds paid into court and declared the plaintiff’s construction lien invalid.

The plaintiff, operating as Neptun Light, registered a construction lien claiming entitlement to $147,776.60 owed by the defendant contractor for the supply of lighting fixtures.

An added party, Neptun Distributors, also claimed entitlement to the funds, asserting it was the true contracting party.

The court held a trial of an issue to determine who contracted with the defendant.

Applying an objective standard for contract formation, the court found that the contract was formed between the defendant and Neptun Distributors, and that the plaintiff acted as an agent for Neptun Distributors.

The court directed that the funds be paid to Neptun Distributors.

Following a motion concerning the vacating of construction liens upon posting reduced security, the moving parties sought partial indemnity costs of approximately $7,700.

The court considered the circumstances of the motion, including short service of the original motion, the fact that the ultimate relief ordered differed from the relief originally sought, and the novelty of the reduced-security structure proposed under the Construction Lien Act.

The court found the responding lien claimants’ opposition to be reasonable and noted that alternative statutory mechanisms were available to the moving parties without requiring the motion.

Given the mixed success and the conduct of the moving parties, the court declined to award costs.

Mortgagees brought a motion under ss. 44(2) and 78 of the Construction Lien Act seeking to vacate five construction liens from title to condominium units by posting alternative security.

The development consisted of 26 commercial condominium units, most of which had already been sold, while five units remained unsold.

Lien claimants argued that security equal to nearly the full amount of the liens should be posted in cash from sale proceeds.

The court held that the mortgagees’ proposal—posting partial cash security while leaving the liens on title to the remaining unsold units—provided more than adequate combined land and cash security and better preserved potential equity by reducing mortgage debt and accumulating interest.

The court ordered the liens vacated from the sold units upon posting security while remaining on the unsold units pending further order.

Following a construction lien trial involving landscaping services, the successful plaintiff sought costs exceeding $100,000 based largely on an offer to settle that it had bettered at trial.

The court considered Rule 49.10 of the Rules of Civil Procedure and the principles of fairness, reasonableness, and proportionality governing costs awards.

Although the plaintiff obtained judgment and had made a favourable settlement offer, the court found the claimed hours and total costs excessive relative to the amount recovered.

Taking into account the defendant’s unsuccessful counterclaim and litigation conduct but emphasizing proportionality, the court fixed costs at a reduced amount.

A contractor brought a construction lien action seeking payment for landscaping work performed at a residential property.

The property owner argued the parties had agreed to a fixed lump‑sum contract and counterclaimed for the cost of correcting deficiencies and completing the work.

The court found no lump‑sum contract existed and instead concluded the arrangement was an open‑ended design‑build project where costs increased as the owner selected upgraded materials and features.

After reviewing a Scott Schedule and evidence of work performed, the court determined the contractor was entitled to payment for completed work subject to deductions for deficiencies.

Judgment was granted enforcing the construction lien for the net amount owed after deducting remediation costs.

The moving party sought an order requiring production of a solicitor’s reporting letter and account relating to the purchase of a condominium allegedly funded through misappropriated construction trust funds.

The responding parties resisted production on the basis of solicitor-client privilege.

The court held that reporting letters and solicitor accounts arising from real estate transactions are generally privileged as communications directly related to legal advice and services.

The court further held that allegations of fraud alone are insufficient to displace privilege without a prima facie evidentiary basis.

As the moving party failed to establish a prima facie case of fraud, the privilege remained intact and production was refused.

Following dismissal of the plaintiff’s claim after trial under the Simplified Procedure Rules, the successful defendant sought costs on a partial indemnity basis.

The plaintiff acknowledged entitlement to costs but argued for a reduced amount.

Applying the factors under Rule 57.01 of the Rules of Civil Procedure and relevant cost principles, the court determined that a reduced all-inclusive costs award was fair and reasonable.

The court also granted additional costs against a defendant by counterclaim who had been noted in default in connection with the counterclaim judgment.

The appellant owner appealed a trial judgment awarding the respondent contractor $62,983.84 for unpaid construction work.

The appellant argued the trial judge erred by refusing to allow documentary evidence for its counterclaim for lost rental income and by finding the contract was a unit price contract rather than a fixed price contract.

The Divisional Court dismissed the appeal, finding the appellant had not sought to introduce the documentary evidence at trial and the trial judge properly interpreted the contract documents.

The judgment was varied only to add post-judgment interest.

The appellant brought a motion to interfere with the lower court's costs order and the date on which pre-judgment interest should commence to run.

The Court of Appeal found no basis to interfere with the orders below and dismissed the motion.

The appellant subcontractor caused a fire while using an acetylene torch on an apartment building.

The trial judge found the appellant negligent but also found the respondent general contractor had instructed him to proceed despite the danger, apportioning fault 50-50.

On appeal, the Court of Appeal upheld the dismissal of the volenti non fit injuria defence but reapportioned fault 75% to the respondent and 25% to the appellant, citing the power imbalance between the parties.

The Court also reduced the damages award, finding that legal fees incurred by the respondent in litigation with its insurer were too remote to be recoverable.