Vito S. Scalisi

The appellant seller appealed from a Court of Appeal decision that held exclusion clauses in a contract for the sale of topsoil were insufficient to oust the implied condition under s. 14 of the Sale of Goods Act that goods must correspond with their description.

The buyer had waived its right to test the topsoil before shipment, and the contract contained clauses providing that the seller would not be responsible for the quality of the material if the buyer waived those rights.

The Supreme Court held that the exclusion clauses constituted an express agreement under s. 53 of the Sale of Goods Act, applying modern contractual interpretation principles from Sattva and Tercon.

The majority restored the trial judge's judgment, finding the objective intention of the parties was for the buyer to accept the risk that the topsoil would not meet the previously supplied specifications if it failed to test the soil.

Côté J. dissented, concluding the word 'quality' in the exclusion clauses could not be expanded to cover defects in description or identity.

Vertical Horizons Contracting Inc. appealed a trial judgment that ordered it to pay the City of Markham $22,291.25 after a set-off, stemming from a breached contract for sanitary sewer system replacement.

The appellant argued that issues with water and soil caused additional expenses and challenged the trial judge's finding of contractual breach.

The Court of Appeal dismissed the appeal, finding no palpable and overriding error in the trial judge's factual findings or interpretation of the contract, which held the appellant responsible for the work methodology and the impacts of site conditions beyond the initial 30 metres of pipe installation.

The respondent corporation, 1819472 Ontario Corp. ("9472"), alleged fraud by its former principal and others, leading to an action to recover funds.

The appellants sought summary judgment, arguing the action was statute-barred due to the limitation period.

The motion judge dismissed the summary judgment motion, finding the action was not statute-barred.

The Court of Appeal dismissed the appeal, affirming that the limitation period began when the respondent gained control and knowledge of the claim, which was after the PPSA foreclosure process was completed, not when initial suspicions arose.

The court also confirmed its jurisdiction to hear the appeal as a final order.

This decision concerns a re-assessment of damages in a breach of contract action, remitted by the Court of Appeal due to insufficient evidence in the initial trial.

The plaintiff, Fermar Paving Limited, sought damages from the defendant, 567723 Ontario Limited, for increased costs of aggregate and out-of-pocket expenses after the defendant repudiated a supply agreement.

The court found the plaintiff's evidence regarding the increased cost of aggregate to be largely inadmissible and unproven, particularly concerning cost estimates and missing source documents.

However, the court awarded damages for certain out-of-pocket costs that were adequately substantiated.

The plaintiff corporation alleged it was defrauded by its former principal, Zaza, who caused it to loan funds to another corporation he controlled, which then distributed the funds to family and friends before bankruptcy.

The defendants (excluding the bankrupt corporation) moved for judgment dismissing the action, arguing it was statute-barred by the Limitations Act, 2002.

The court dismissed the defendants' motion, finding that the limitation period did not begin until January 6, 2021, when Susan Barrett took control of the plaintiff corporation.

Prior to that date, the plaintiff corporation had no officers or directors whose knowledge could be attributed to it, and thus it was not capable of discovering the claim or exercising reasonable diligence.

Trac Developments Inc. ("Trac") moved for an order declaring DNR Restoration Inc.'s ("DNR") construction lien expired due to untimely preservation or, alternatively, reducing the posted security.

The court first determined that the "old" Construction Act applied based on the project's earliest contract date.

Regarding timeliness, the court found genuine issues requiring a trial, as Trac failed to prove DNR abandoned the contract before the lien registration period expired.

On the security reduction, while DNR conceded a significant reduction from its initial claim, Trac's further requested reductions for work orders, May-August work, and rebar accessories were also found to involve triable issues.

Consequently, the motion to declare the lien expired was dismissed, and the security was reduced only to the amount DNR had already conceded plus security for costs.

No costs were awarded due to the mixed success and DNR's initial inflated lien claim.

The appellant appealed a summary judgment dismissing her claim and granting the respondents' counterclaim in a failed residential real estate transaction.

The Court of Appeal dismissed the appeal, finding no palpable and overriding errors in the motion judge's factual findings or errors of law.

The appellant's arguments regarding title ownership at the time of contract signing and the need for consent for title transfer were rejected, as the seller was able to convey good title at closing and the appellant had entered into an amendment with knowledge of the title change.

The appellant failed to tender the purchase price, justifying the forfeiture of the deposit.

The applicant sought leave to appeal an arbitrator's award that dismissed its claim for $19.7 million and allowed the respondent's counterclaim for $1,048,351.93 arising from a terminated construction contract.

The applicant alleged the arbitrator made 524 categorical errors of law in interpreting the contract.

The court dismissed the application, finding that the alleged errors were questions of mixed fact and law regarding the arbitrator's use of the factual matrix and subsequent conduct to determine if the contract was breached, and that the applicant failed to identify any extricable errors of pure law.

The appellant, Pine Valley Enterprises Inc., appealed a trial decision that dismissed its action against Earthco Soil Mixtures Inc. for breach of contract.

Pine Valley had purchased topsoil from Earthco for a City of Toronto project, but the soil did not meet specifications, requiring costly removal and replacement.

The trial judge found that Earthco breached the implied condition under s. 14 of the Sale of Goods Act (SGA) that goods correspond to their description, but dismissed the action based on exclusionary clauses in the contract.

The Court of Appeal allowed the appeal, holding that the exclusionary clauses, which disclaimed responsibility only for the "quality" of the material, were not explicit, clear, and direct enough to exclude liability for a breach of the s. 14 implied condition, which relates to the "identity" of the goods, not merely their quality.

The court emphasized that the factual matrix cannot be used to expand the meaning of such clauses beyond their express wording.

The plaintiff contractor purchased topsoil from the defendant supplier for a municipal project.

Due to project delays, the plaintiff waived its right to test the soil before delivery and signed a contract containing an exclusionary clause stating the defendant would not be responsible for the quality of the material once it left the facility.

The delivered soil did not drain properly and had to be replaced.

The plaintiff sued for breach of contract, relying on the implied condition under s. 14 of the Sale of Goods Act that goods must correspond with their description.

The court dismissed the action, finding that the exclusionary clause was clear and unambiguous, and that the plaintiff had knowingly assumed the risk by waiving the testing to avoid further project delays.

In a construction lien action, the plaintiff subcontractor claimed damages for breach of contract against the defendant contractor.

The court determined that the contract between the parties was a fixed-price contract that did not incorporate the payment terms of the prime contract.

The defendant breached the contract by failing to pay the plaintiff's invoices and attempting to impose additional terms.

The court found the plaintiff was justified in terminating the contract and that its second lien was valid, directing the matter to an accounting phase to determine the quantum.

The defendants brought a motion to release $114,000 held in trust as security in place of a discharged Certificate of Pending Litigation (CPL).

The plaintiffs had originally obtained the CPL ex parte to secure a disputed $150,000 loan related to a real estate development project.

The defendants argued the plaintiffs had no reasonable interest in the property because the mortgage was discharged and replaced by an unsecured promissory note, and that the plaintiffs failed to make full and fair disclosure on the ex parte motion.

The Master dismissed the motion, finding a triable issue regarding the validity of the promissory note and mortgage discharge, and accepting the plaintiffs' explanation for not disclosing certain documents they did not possess or recall signing.

Donset Construction Limited moved to withdraw admissions regarding the quantification of lien claims and to vary summary judgment orders previously granted in favour of MGI Construction Group and Venture Excavating & Contracting Ltd. Donset argued its failure to appear at the original summary judgment motions was due to mistake.

The court denied the motion to vary, finding Donset's non-attendance was not due to accident or mistake but deliberate avoidance.

Although leave to withdraw admissions was granted for expediency, the court found that even if the new evidence had been considered, it would not have changed the original summary judgment amounts.

The motions were dismissed with costs awarded to MGI, Venture, and Strela Trucking Ltd.

The defendant corporate officer brought a Rule 21.01(1)(b) motion to strike a claim against him personally for inducing breach of contract.

The plaintiff alleged that the officer caused the corporate defendant to improperly draw on a letter of credit without the contractually required notice.

The court held that corporate officers are generally protected from personal liability unless the pleading alleges facts showing conduct outside the scope of authority or an independently actionable wrong.

The amended statement of claim contained only conclusory allegations and failed to plead sufficient material facts to establish a personal cause of action.

The claim against the officer was struck, but the plaintiff was granted leave to amend its pleading.

The applicant lawyer sought a declaration that he had priority to non-forfeited cash bail funds based on an alleged assignment from the accused client, and an order setting aside or circumventing an estreatment order that had directed the balance to the respondent who had posted the bail money.

The court held that it had no jurisdiction to review, vary, or reconsider the criminal estreatment order under the Criminal Code, and that the proceeding was in substance an impermissible collateral attack.

In any event, the court found the applicant had no enforceable security interest under the Personal Property Security Act because the debtor had no rights in the collateral to assign after previously relinquishing all claims to the funds to the respondent.

The application was dismissed and the clerk was directed to release the funds to the respondent.

The applicant sought an order appointing an arbitrator to resolve a construction subcontract payment and delay dispute.

The respondent argued that notice provisions in the prime contract barred the claim and that arbitration risked multiplicity of proceedings and inconsistent results.

The court held the subcontract plainly required arbitration of disputes arising from the subcontract and that, because no appointment procedure was provided, s. 10 of the Arbitration Act, 1991 authorized the court to appoint a single arbitrator.

The court further held the notice provisions had not been breached and that any concern about parallel proceedings was speculative.

The requested arbitrator was appointed.

A contractor sought payment for remedial road repairs following settlement of municipal sewer trench backfill completed under contract with a municipality.

The contractor alleged the work was extra to the contract and alternatively claimed compensation on a quantum meruit or unjust enrichment basis, asserting that native soil specified for backfill was too wet to compact properly.

The municipality maintained that settlement resulted from insufficient compaction at the lower levels of the trench and that the contractor was contractually responsible for remediation at no additional cost.

The court accepted expert evidence that settlement was caused by poorly compacted backfill and found the contractor failed to prove unsuitable soil or any oral agreement for additional compensation.

The court held the remedial work was required due to deficiencies in the contractor’s work.

Following a proceeding in which the defendant was entirely successful, the court addressed the issue of costs.

Applying the factors under Rule 57 of the Rules of Civil Procedure, the court emphasized that cost awards should reflect the reasonable expectations of the parties and remain proportionate to the dispute.

Given the defendant’s complete success, the court determined that the defendant was entitled to recover costs.

Costs were fixed in a lump sum inclusive of taxes and disbursements.

The plaintiff corporation sued multiple defendants, including a lawyer who held sale proceeds in trust, alleging breach of trust and conversion arising from the sale of a motor vehicle.

The plaintiff argued the lawyer became a constructive trustee through knowing assistance or willful blindness when he released escrow funds on the direction of the plaintiff’s alleged agent.

The court found the plaintiff’s directing mind had authorized the agent to handle the sale and related arrangements, including the handling of proceeds through counsel.

There was no evidence the lawyer had actual knowledge, recklessness, or willful blindness to any wrongdoing, and the funds were handled in accordance with the agent’s instructions.

As a result, neither constructive trust nor conversion was established.

The appellant, who was found not criminally responsible (NCR) for the second-degree murder of his wife, applied to receive the proceeds of her life insurance policy.

The application judge dismissed the claim, applying the public policy rule that a person cannot profit from their own criminal act.

On appeal, the Court of Appeal held that the public policy rule does not apply to an NCR accused, as they are not morally responsible for their actions.

The Court also found that the Civil Remedies Act, 2001 does not supplant the common law rule, though it leaves open the possibility for the Attorney General to seek forfeiture.

The appeal was allowed and the proceeds were ordered payable to the appellant.