The Ontario Court of Appeal recently confirmed the proper appeal procedure for an arbitrator’s ruling on a preliminary question in an arbitration. Joseph Lebovic Charitable Foundation v. Jewish Foundation of Greater Toronto, 2024 ONCA 933, concerned an appeal of an application decision. The application judge was asked to review a ruling from the parties’ arbitrator on his own jurisdiction to hear the issues before him, which was upheld. We invite you to read our firm’s blog on the application judge’s decision for more information. The applicants sought leave to appeal the application judge’s decision to the Ontario Court of Appeal. The respondents brought a motion to quash this appeal on the basis that the Court of Appeal’s jurisdiction to hear it was precluded by section 17(9) of the Arbitration Act 1991, S.O. 1991, c. 17 (the “Act”). The Court of Appeal agreed with the respondents and quashed the applicants’ … Read More
Superior Court of Justice for Ontario Continues to Clarify the Utility of Summary Judgment in Failed Real Estate Transactions
In Kinariwala v Ruiz, 2024 ONSC 7188, the Superior Court of Justice – Ontario, dealt with yet another summary judgment motion involving a failed purchase agreement for a residential property. In Kinariwala v Ruiz, the defendant had agreed to purchase a piece of property located in Windsor, Ontario for $465,000.0 but failed to close the transaction, citing an inability to secure financing. This breach led the seller/plaintiff to re-list and eventually sell the property at a significantly reduced price of $340,000.00. The plaintiff sought to recover the financial losses incurred, including the difference in sale prices and holding costs. At the hearing of the motion, the Court addressed two primary issues between the parties. First, the court confirmed that the defendant breached the Agreement of Purchase and Sale (“APS”) for the property. Despite her claim that misrepresentations about the property’s income as a successful Airbnb potentially influenced her decision to … Read More
The Role of Summary Judgment in Real Estate Disputes: Reid v. Abass, 2024 ONSC 7083
In Reid v. Abass, 2024 ONSC 7083, the Ontario Superior Court of Justice highlights the efficiency and clarity that summary judgment can bring to disputes arising from complex real estate transactions. This case in Reid v Abass arose from the defendants’ failure to close a real estate transaction under a February 24, 2022, Agreement of Purchase and Sale (“APS”) for $999,000. Following an alleged anticipatory breach by the defendants, the parties renegotiated the terms under a July 7, 2022, Extension Agreement, which set a reduced purchase price of $850,000 and a new closing date of July 28, 2022. The plaintiffs sought summary judgment for damages representing the difference between the original and renegotiated prices, claiming the defendants remained liable under the original APS despite closing under the revised agreement. The defendants argued the extension agreement released them from liability if they closed on the new date. Both parties agreed that … Read More
Krieser v. Seligman, 2024 ONCA 827: Clashes Over Contracts, Claims, and Residential Construction
In Krieser v. Seligman, 2024 ONCA 827, the case revolved around the construction of a luxury home in Forest Hill, Toronto, and a subsequent legal battle involving allegations of contract breaches, construction deficiencies, and claims of fiduciary duty. In 2004, the plaintiffs contracted the defendant to build their home. While construction progressed, disputes emerged, leading the plaintiffs to withhold payments. Litigation ensued in 2007, with both parties asserting significant claims: the plaintiffs sought damages for alleged deficiencies, while defendant pursued payment for outstanding invoices. The case culminated in a trial in 2022-2023, where the trial court largely ruled against the plaintiffs. The appeal focused on two primary issues: the alleged breach of contract and a claim for breach of fiduciary duty. The plaintiffs argued that the trial judge erred in finding their delayed payments constituted a breach that disentitled them from warranty claims. Additionally, they contended the judge failed to … Read More
Lessons from Paracha v. Naqi Construction Ltd.: The Importance of Written Agreements and Credibility in Real Estate Disputes
In the recent Ontario Court of Appeal decision in Paracha v. Naqi Construction Ltd., 2024 ONCA 816, the case involved a dispute over four real estate transactions, contested ownership interests, and allegations of financial misconduct. The case arose from investments made by the in four properties, with funds allegedly advanced to the appellants property acquisition, renovation, and sale. While the respondents claimed ownership interests in the properties, the appellants asserted the funds were loans. The absence of written agreements made the trial judge’s reliance on witness testimony and circumstantial evidence central to resolving the dispute. A critical factor in the trial court’s decision was its assessment of credibility. The trial judge found that the appellants’ testimony lacked reliability and that their arguments were contradicted by other witnesses, including a credible real estate agent. In contrast, the respondents’ evidence was found to be consistent and corroborated by independent inspections and documentation. … Read More
Certainty in Contractual Agreements: Ontario Court of Appeal Emphasizes Importance of Essential Terms
A recent case from the Ontario Court of Appeal highlights that commercial parties must take care to ensure that their contracts are certain on essential terms when dealing with unsophisticated counterparties. In Corridor Transport Inc. v. Vittorio Junior Lentini, 2024 ONCA 773, a corporation was set up to carry on business transporting steel products (the “Venture”). 50% of the shares in the Venture were held by a sophisticated businessman (“JH”), and the other 50% were held by a trucking company that operated a separate business from the Venture (“Lentini”). Lentini’s principal left school after the fifth grade and immigrated to Canada from Italy as a young adult. The Venture claimed that JH would provide its startup and expansion capital , and Lentini would manage its day-to-day operations as an independent contractor. The parties agreed that Lentini could continue to operate its separate trucking business while participating in the Venture. … Read More
Essential Terms of a Contract: Ontario Superior Court of Justice Confirms Agreements Must Be Complete and Concise
In Qureshi v. Zeema Investments Incorporated, 2024 ONSC 5855, the Ontario Superior Court of Justice emphasized the importance of ensuring that the essential terms of contractual agreement are comprehensive and clear. This summary judgment arose from an unpaid commission payment on a real estate transaction. A broker was mediating a purchase and sale of a hotel between a buyer and seller. the broker and buyer had executed a Buyer’s Representation Agreement (the “BRA”) listing the commission owing to the broker by the buyer on closing at “TBD,” and was to be confirmed upon executing an agreement. The BRA required a commission to be paid to the broker in the event of buyer default on any agreement of purchase and sale that is entered. The broker subsequently entered a Commission Agreement with the seller, which included a commission payment of $650,000 that was owed by the seller to the broker on … Read More
Promises vs. Paperwork: Ontario Court Clarifies Limits of Proprietary Estoppel in Share Disputes in Burwell et al v. Wozniak, 2024 ONSC 5851
In the recent Ontario Superior Court of Justice decision Burwell et al v Wozniak, 2024 ONSC 5851, the Court examined complex trust and proprietary estoppel issues between former partners. The decision in Burwell clarifies the boundaries of proprietary estoppel within Ontario law and emphasizes the importance of consistency between preliminary promises and formal agreements in trust disputes. The applicant and respondent were involved in a former relationship, during which time the applicant and their business partner launched a subscriber-based billing management software company (the “Company”). The applicant sought to establish a family trust; however, the pair separated. Wishing to reconcile the relationship, the applicant sent the respondent an email purporting to bequeath her fifty (50) percent of the shares of the Company (the “Email”). Later the pair finalized a trust agreement appointing the applicant and respondent as beneficiaries. However, the trust agreement did not clearly define the ownership of the … Read More
Promissory Estoppel, Part Performance, and Limitation Periods: Ontario Superior Court Refuses to Enforce Mortgage Beyond 10-Year Limit
In Albrecht v 1300880 Ontario Inc., 2024 ONSC 3328, the Ontario Superior Court of Justice examined key legal principles surrounding the extension of limitation periods through promissory estoppel and part performance. The case involved a mortgage that had been in default for over a decade, with the mortgagee seeking enforcement beyond the statutory limitation period (the “Mortgage”). The applicant sought to have the Mortgage discharged, arguing that enforcement was barred under Ontario’s Real Property Limitations Act (“RPLA”) ten-year cutoff. The respondent countered by asserting that an oral agreement between the parties extended the limitation period, relying on promissory estoppel and part performance to justify enforcement despite the expired limitation period. Citing the doctrine of promissory estoppel, which prevents a party from reneging on a promise without formal consideration, the respondent claimed there was an oral agreement to delay the enforcement of the Mortgage until the applicant’s financial condition improved, thereby … Read More
Summary Judgment Granted, Costs Awarded – Ontario Superior Court grants Summary Judgment in FactR Limited v. R.R.I.C.H. Construction, 2024 ONSC 4792
Summary judgment is a powerful procedural mechanism, allowing a party to file a motion to resolve a case early in the proceedings if there are no genuine issues for trial. In FactR Limited v. R.R.I.C.H. Construction, 2024 ONSC 4792, the Ontario Superior Court recently demonstrated the enhanced fact-finding powers afforded to judges when determining summary judgment motions involving contractual breaches and conversion of property. In FactR Limited v. R.R.I.C.H. Construction, the plaintiffs sought to recover money loaned to two defendants (the “Contract Defendants”) through invoicing factoring agreements (the “Agreements”), as well as an additional defendant for their alleged role in improperly converting a cheque payable to the plaintiffs (the “Fraudulent Defendant”). The motion judge ultimately ruled in favour of the plaintiffs, granting summary judgment and concluding there were no genuine issues requiring a trial. At the hearing for the summary judgment motion, the plaintiffs tendered evidence demonstrating the Contract Defendants’ … Read More
Ontario Court of Appeal Orders Payment of Outstanding Costs Order before Appeal is Heard
In Rathod v Chijindu, 2024 ONCA 625, the moving parties brought a motion (the ”Motion”) seeking, among other things, an Order dismissing the appeal brought by the respondents concerning a decision by a lower Court in Rathod v. Chijindu et al, 2024 ONSC 939 (“939”). The moving parties submitted that the appeal should be dismissed due to the respondents’ non-payment of the costs Order in 939. At the Motion hearing, the Court of Appeal agreed, holding that the respondents were required to pay the overdue costs Order in 939 within seven (7) days. As background, the respondents obtained substantial loans from the moving parties to finance mortgages on two properties. Following their default on these mortgages, the properties were sold via a power of sale and the net proceeds from these transactions were paid into the Court. The funds were then ordered to be distributed to the moving parties to … Read More
Jurisdiction of Arbitrator Through Parties’ Conduct Affirmed by Ontario Divisional Court: Actions Speak Louder than Words
In The Joseph Lebovic Charitable Foundation et al. v. Jewish Foundation of Greater Toronto, 2024 ONSC 4400, the Ontario Court of Appeal affirmed the authority of an arbitrator to find his own jurisdiction over issues in dispute between parties in an arbitration, and reminded parties that their conduct can imply their approval of an arbitrator’s jurisdiction. The applicants entered a donor agreement to make a sizable charitable donation to the respondent, payable in installments. In return, the respondent would name its campus in Vaughan after the applicants. The donor agreement included an arbitration clause, where parties would submit to arbitrations for “a dispute arising out of, or in connection with, the agreement.” A dispute indeed arose between the parties over a proposed sale of part of the campus named after the applicants, as well as the applicants’ payment schedule of their donation. Both parties filed Notices of Arbitration under the … Read More
Notice, a Condition Precedent to Coverage – Ontario Court of Appeal says no Relief of Forfeiture for Late Notice of Claim
In the recent case of Furtado v Underwriters, 2024 ONCA 579, the Ontario Court of Appeal reviewed an appeal from an insured party challenging an application judge’s decision denying coverage under a Directors and Officers policy (the “Policy”). The Court upheld the application judge’s ruling, determining that the insured had reported its loss beyond the specified notice period outlined in the contract, as well as affirming the recent legal precedents concerning the doctrine of relief from forfeiture in the insurance context. While the Policy was in effect, the Ontario Securities Commission (“OSC“) initiated inquiries into the business dealings of Go-To, a company in which the insured held a directorial position. Following this, the OSC issued an Order for the insured to produce certain documents related to the investigation into Go-To. As part of the process, the insured was cautioned by the OSC that section 16(1) of the Securities Act prohibited … Read More
Time is of the Essence – Court-Imposed Deadline for Contractual Performance Upheld by Ontario Court of Appeal
In 2533619 Ontario Inc. (Calibrex Development Group) v. Lucadamo, 2024 ONCA 536, the Ontario Court of Appeal upheld a court-imposed deadline for a party’s performance of its obligations under an agreement of purchase and sale. The appellant was the purchaser of three residential lots under an Agreement of Purchase and Sale that it had entered into with the respondent vendor in 2017 (the “APS”). The APS included a clause that allowed any deadline in the agreement to be extended or abridged by agreement. The closing of the APS was originally stipulated as a a fixed date, but the parties consented to a new closing date of “30 days following the appellant’s receipt of severance approval for the lots.” Five years elapsed between the amendment date and the appellant’s commencement of its severance application. When the application got underway in 2022, the appellant was told by the respondent that the APS … Read More
Full and Frank Disclosure, Material Misrepresentations, and the availability of Directors’ and Officers’ Liability Coverage
The Ontario Court of Appeal’s (the “Court“) recent decision in Davies v AIG Insurance Company of Canada, 2024 ONCA 509 (“Davies“), deals with an insurance coverage dispute related to the defense of a Ponzi scheme fraud claim. Notably, the Court’s decisions underscores the significance of full and frank disclosure by insureds when applying for coverage. In Davies, the subject Applicants acted as the principals of related Ontario real estate development companies (the “Companies”). AIG Insurance Company of Canada (“AIG”) issued directors’ and officers’ liability insurance policies (the “Policies”) to the Companies. As part of this action, the Applicants were named as defendants in two separate lawsuits alleging that they used the Companies to conduct a Ponzi scheme and that the Companies’ alleged real estate developments were funded by millions of dollars in syndicated mortgages (the “Underlying Actions”). Soon after being named as defendants in the Underlying Actions, the Applicants sought … Read More
Ontario Court of Appeal upholds Partial Summary Judgment Decision in VP Auto Sales & Service Ltd v Ahmed2 Inc.
VP Auto Sales & Service Ltd. v Ahmed2 Inc., 2024 ONCA 507, saw the Ontario Court of Appeal (the “Court”) address a motion judge’s grant of partial summary judgment, with damages being reserved for trial. The Court, in one of its rare decisions on partial summary judgment, agreed with Motion judge’s ruling. The respondent entered an Agreement of Purchase and Sale (the “Agreement”) with the appellant. Before the closing, the appellant raised concerns about the price being too high and requested a discount, which was refused by the respondent. On the scheduled closing date, the appellant did not proceed with the transaction, citing a breach of the Agreement by the respondent. This resulted in the property remaining unsold, prompting the respondent to seek summary judgment against the appellant for the purchase price of $4,750,000. The motion judge granted summary judgment on liability, finding the appellant accountable for the failure to … Read More