Michael L. Shell

The Kriesers appealed a trial judgment that dismissed their claims for construction deficiencies and breach of fiduciary duty, and granted judgment to the respondents for outstanding invoices.

The Court of Appeal dismissed the appeal, finding no error in the trial judge's determination that the Kriesers breached the contract by withholding payments, which disentitled them to warranty claims, and that there was insufficient evidence for the remaining deficiency claims.

The court also upheld the finding that no fiduciary relationship existed between the parties, and affirmed the trial judge's cost award.

This decision addresses the issue of costs and pre-judgment interest following a 29-day trial concerning a dispute over the construction of a luxury custom home.

The court's prior reasons (2023 ONSC 2015) found the owners (the Kriesers) breached contracts with the builder/landscaper (the GES defendants), dismissing the Kriesers' claims and awarding outstanding amounts to the GES defendants on their counterclaim.

The GES defendants sought substantial indemnity costs and pre-judgment interest.

The court fixed pre-judgment interest, reducing it for periods of delay attributable to the GES defendants and the COVID-19 pandemic.

For costs, the court awarded the GES defendants partial indemnity costs up to their Rule 49 Offer to Settle date (November 22, 2016) and then blended costs thereafter, reflecting their complete success in the action and counterclaim.

The court declined to award substantial indemnity costs throughout, finding the Kriesers' allegations did not warrant it, and made minor adjustments for costs related to mid-trial adjournments and new counsel familiarization.

The Kriesers sued Gregory Evan Seligman and his companies (G.E.S. Construction Limited, Greenstone Gardens Inc., etc.) for breach of contract, breach of fiduciary duty, breach of duty of good faith, punitive damages, trespass, and intimidation related to the construction of a luxury custom home.

The defendants counterclaimed for unpaid accounts.

The court found that the Kriesers breached the construction and landscaping contracts by failing to make timely and sufficient payments.

All claims brought by the Kriesers were dismissed, and the counterclaims by G.E.S. Construction Limited and Greenstone Gardens Inc. for outstanding amounts were granted.

The appellant owner appealed a summary judgment decision awarding the respondent construction manager its share of cost savings under a construction management contract.

The appellant argued the motion judge erred in her interpretation of the contract, her refusal to strike an affidavit, and her finding that the cost savings were lienable under the Construction Lien Act.

The Divisional Court dismissed the appeal, finding no palpable and overriding error in the motion judge's contractual interpretation or her conclusion that cost savings constitute a lienable service.

The plaintiff construction manager brought a motion for summary judgment for its share of cost savings realized on a condominium project.

The defendant owner argued there were no cost savings and counterclaimed for damages.

The court interpreted the construction management contract, determining the Gross Liveable Area and finding that only construction costs managed by the plaintiff should be included in the actual total cost calculation.

The court granted summary judgment, finding no genuine issue for trial, and ordered a reference to determine the exact quantum of cost savings.

The defendant owner brought a motion to discharge the plaintiff construction manager's claims for lien.

The plaintiff had registered a lien for over $7.5 million, representing its 50% share of cost savings realized on the construction project pursuant to the contract.

The defendant argued that cost savings are akin to profit-sharing and are not lienable under section 14 of the Construction Act.

The court dismissed the motion, finding that cost savings provisions are integrally linked to the services provided by a construction manager and are therefore properly lienable.

The appellants appealed a summary judgment enforcing a Consulting Agreement and a Letter of Credit Agreement, and the dismissal of their motion to consolidate two related actions.

The appellants argued the agreements were unenforceable as illegal loans under the Criminal Code and were procured in breach of fiduciary duty.

The Court of Appeal dismissed the appeal, upholding the motion judge's findings that the case was document-driven, appropriate for summary judgment, the agreements were not loans, and no fiduciary duty existed.

The applicant, HMI, brought a motion to refer a consolidated construction lien action, involving seventeen liens totaling over $42 million, to a single private arbitration and to stay the court proceedings.

The consolidated action was divided into three streams (A, B, C) based on contractual relationships.

The motion was opposed by various lien claimants and other parties.

The court dismissed the motion, finding that a consolidated arbitration could not be ordered due to significant conflicts in arbitration clauses across the different contracts, the inclusion of third parties who had not consented to arbitration, the failure to follow contractual dispute resolution protocols (including mediation), and potential for increased costs and delays for some parties.

The court emphasized the consensual nature of arbitration and declined to impose non-consensual amendments to contracts or stay the court action.

Following a successful summary judgment motion and a related failed consolidation motion across two related civil actions, the court determined the appropriate costs awards.

The successful plaintiffs sought substantial costs exceeding $670,000 based on partial indemnity prior to an offer to settle and substantial indemnity thereafter under Rule 49 of the Rules of Civil Procedure.

The court accepted that the offer to settle triggered substantial indemnity costs but found the overall request disproportionate to the complexity and expectations of the losing party.

The requested amount was reduced by half while still recognizing the Rule 49 consequences.

In the related action, defendants resisting consolidation were awarded substantial indemnity costs due to litigation tactics that unnecessarily increased complexity.

The plaintiffs brought a motion for summary judgment to recover unpaid fees under a consulting agreement and returns under a letter of credit agreement related to a wind power project.

The defendants resisted, arguing there were credibility issues requiring a trial and challenging the constitutionality of Rule 20 of the Rules of Civil Procedure.

The court found no genuine issues of credibility, as the defendants' assertions contradicted the clear documentary evidence.

The court also dismissed the constitutional challenge, holding that Rule 20 does not violate section 7 of the Charter or unwritten constitutional principles of judicial independence.

Summary judgment was granted in favour of the plaintiffs.

The moving party sought leave to add two entities as respondents to an application challenging the validity of a municipal by-law alleged to constitute illegal bonusing.

The proposed parties argued the claim was out of time and that they were not proper or necessary parties to the threshold issue concerning the validity of the by-law.

The court held that the proposed entities were not necessary to determine the legality of the by-law, which primarily concerned the municipality and an existing municipal corporation.

In any event, the limitation period to add them had expired, and the moving party could not rely on discoverability because public records and earlier correspondence put it on notice of the transfer of interests.

The motion to add the parties was therefore dismissed.

The moving party sought leave to add two entities as respondents to an application challenging the validity of a municipal by-law authorizing financial arrangements related to a film studio project.

The proposed respondents argued that the limitation period for adding parties had expired and that they were neither proper nor necessary parties to the threshold issue concerning the by-law’s validity.

The court held that the proposed entities had no role in the enactment or validity of the by-law and would only potentially be relevant if the application succeeded and issues of repayment or accounting arose.

The court further found that the moving party had actual or constructive knowledge of the entities’ involvement well before the expiry of the limitation period and could not rely on discoverability.

The motion to add the parties was dismissed.

The moving party brought a motion to stay an employer’s application seeking declaratory relief that an employee’s termination following maternity leave occurred for valid business reasons.

The employee had already filed a human rights complaint alleging discrimination based on sex and pregnancy arising from the same termination.

The court held that the employer’s Rule 14 application constituted a pre‑emptive collateral attack and an abuse of process because it forced the employee to litigate identical issues in parallel proceedings and effectively attempted to circumvent the Human Rights Tribunal of Ontario process.

The court emphasized that the tribunal had jurisdiction and expertise to determine whether the termination violated the Human Rights Code and that permitting the court application would encourage forum shopping and inconsistent results.

The application was permanently stayed.

The respondents brought a motion to strike portions of an affidavit filed by the applicant in an application seeking to quash a municipal by-law under the City of Toronto Act.

The court had previously struck portions of an earlier affidavit for containing irrelevant historical allegations and improper innuendo about prior municipal actions.

On the renewed motion, the respondents argued the revised affidavit continued to include irrelevant references to earlier by-laws and municipal initiatives.

The court held that most of the objectionable material had been sufficiently sanitized and could remain as factual background potentially relevant to the issues, including whether the impugned by-law conferred a prohibited bonus.

However, one paragraph expressing the deponent’s concerns about public funds used in 2000 was struck as irrelevant.

The appellant appealed from a judgment striking its pleadings for failing to disclose a cause of action relating to a breach of a duty of good faith.

The Court of Appeal agreed with the motion judge that the pleadings did not disclose a cause of action and noted that leave to amend had been granted.

The appeal was dismissed with costs.

The appellants appealed the trial judge's assessment of damages and dismissal of claims regarding a fraudulent kick-back scheme perpetrated by two officers of the appellant company and its suppliers.

The Court of Appeal found the trial judge erred in deducting advances made by the officers from the damages awarded for secret commissions, as the officers had no authority to borrow money from the bank to repay themselves.

The damages against the officers and their company were increased to $73,641.45.

The court also set aside a counterclaim judgment in favour of a supplier, finding he had already been fully paid.

The remainder of the appeal, including claims against the bank for unauthorized withdrawals and altered documents, and claims for punitive damages, was dismissed.

The appellant appealed a summary judgment decision.

The Court of Appeal dismissed the appeal, finding no evidence that the respondents initiated the proceedings and no issue requiring a trial.

Costs were fixed at $5,000.

Appeal from a summary judgment decision in a dispute involving a former senior employee who joined a competitor after signing a Canada-wide non-competition covenant and allegedly soliciting customers and employees.

The court held the evidentiary record was insufficient to declare the restrictive covenant enforceable on summary judgment, but equally insufficient to declare it unenforceable where the responding parties had not moved for that relief and genuine issues remained regarding customer relationships and geographic scope.

The court further held that the solicitation record disclosed genuine issues for trial concerning two groups of dentist customers, but not a third group.

The costs order was varied in light of the appellant's partial success, with each side to bear its own costs of the summary judgment motions and the appeal.