Stephen Schwartz

Subsequent mortgagees challenged the validity of a first mortgagee’s power of sale of a Toronto property, alleging they were never served with the required notice and that the notice misstated the amount owing under the mortgage.

The court found the notice of sale had not been served on the subsequent encumbrancers due to a mailing error and that the amount claimed owing was materially overstated through the improper inclusion of pre‑assignment expenses.

As a result, the statutory requirements of the Mortgages Act were not satisfied and the power of sale was invalid.

The purchaser was a bona fide purchaser for value but had actual notice that the validity of the sale was being challenged and therefore could not rely on statutory protections for “professed compliance.” The purchaser and related subsequent mortgagees did not obtain valid title or charges as against the applicants, though the independent first mortgagee lender retained a valid interest.

The moving defendants sought leave to amend their statement of defence to add a counterclaim, crossclaim, and a third party claim in a mortgage enforcement action brought by trustees for syndicated mortgage investors.

The court held that several proposed amendments attempted to withdraw admissions deemed under a Request to Admit, which could not be done indirectly through amended pleadings.

The court further found that proposed claims for an accounting and set-off were not proper defences to the mortgage claim.

The proposed third party claim relating to an alleged improvident sale of a separate property was unrelated to the main mortgage dispute and appeared designed to delay the proceedings.

Leave to amend the defence and counterclaim and to commence the third party claim was dismissed, but leave to add the crossclaim was granted on an unopposed basis.

A systems integration contractor sued an electrical subcontractor for breach of contract on two correctional facility projects involving integrated security systems.

The dispute concerned the scope of work, including responsibility for supplying and installing wiring and terminating field devices.

The court found the subcontractor breached the contracts by refusing to perform required work and drew an adverse inference due to spoliation of electronic evidence and fabricated quotes.

The subcontractor’s counterclaim for unpaid work was dismissed.

The court also held the company’s principal personally liable for breach of the statutory trust under the Construction Lien Act but declined to declare the debt non‑dischargeable in bankruptcy.

The applicant condominium corporations sought declarations of ownership, breach of trust, and oppression against the developer regarding a community clubhouse.

The developer had retained ownership of the clubhouse, subject to a mortgage, pending the sale of all remaining units and lands in the project, as set out in the disclosure statements.

The court dismissed the application, finding no trust relationship, no breach of the obligation to convey the clubhouse since the condition precedent had not been met, and no oppressive conduct by the developer in its management, mortgaging, or fee-charging for the clubhouse.

The moving defendants sought dismissal of the action on the basis that the parties had reached a binding settlement agreement in May 2007.

The court considered whether the correspondence and negotiations between the parties constituted a legally binding settlement, applying the two-step analysis for determining intention to create legal relations and agreement on essential terms.

The court found the evidence vague and concluded that the parties’ discussions amounted only to an attempt to reach an agreement, with essential terms unresolved.

However, the court held that an earlier unequivocal offer to discontinue the action against one individual defendant personally had been accepted.

The motion was therefore granted only to the extent of discontinuing the claim against that defendant personally, with the remainder of the motion dismissed.

At a Rule 48.14 status hearing, the court considered whether a civil action should be dismissed for delay.

The plaintiffs were required to show cause why the action should not be dismissed by providing an acceptable explanation for the delay and demonstrating the absence of non‑compensable prejudice to the defendants.

The court accepted that the individual driving the litigation for the corporate plaintiffs had been preoccupied with related criminal proceedings and bankruptcy examinations, which reasonably explained the delay in advancing the action.

The court also found no evidence that witnesses or documents had become unavailable due to the delay.

Balancing the interests of fairness and the policy against litigation delay, the court permitted the action to proceed.

In an oppression application under the Ontario Business Corporations Act, the applicants sought interim relief authorizing a corporation to proceed with litigation against a third party and to amend an earlier order to permit them to sign corporate cheques to fund litigation and reimburse certain expenses.

The respondent opposed the motion and brought a cross‑motion seeking payment or preservation of alleged shareholder allowances and corporate expense reimbursements.

The court held that only limited interim relief was appropriate because the substantive issues in the oppression proceeding could not be determined at this stage.

The court authorized a $65,000 corporate payment to fund independent counsel for the litigation but preserved the existing order requiring dual signatures for other corporate payments.

Other reimbursement claims were deferred to the hearing of the oppression application.

Following dismissal of a civil action alleging negligence and defamation against a credit reporting agency, the court addressed the issue of costs.

The successful defendant sought recovery of trial and preparation costs after a two-and-a-half-day trial involving a self-represented plaintiff.

The court considered the importance of the proceeding, its moderate complexity, the absence of wasted time, and a prior settlement offer proposing dismissal without costs.

The defendant was awarded partial indemnity costs, including counsel fees and disbursements, fixed at $17,301.45 payable within 30 days.