councillor was therefore reasonable. That
bylaw was valid. The application was moot
with respect to H’s defamation action
expenses because H had refused to accept
any reimbursement from the City.
Holyday v. Toronto (City), [2010] O.J.
No. 3083, Ont. C.A., per Swinton J.
(McCombs and Wilton-Siegel JJ. concur-
ring), July 19/10. Digest No. 3014-016
(Approx. 10 pp.)
LIABILITY – Plaintiff unable to estab-
lish that the failure by defendant city to
inspect a culvert prior to a winter storm
led to flooding in plaintiff’s basement.
Action against defendant city for damages arising from a flood. The forces of
weather combined with spring melt to
block a large culvert used to channel drainage coming down an escarpment and under
a highway, creating a huge triangular area
of ponding. On the same day, April 4, 2005,
the basement of plaintiff’s home was
flooded. Her home had three rental apartments in the basement. All were extensively
damaged by the flood. Plaintiff alleged that
the city’s lack of regular inspection and
maintenance caused the culvert to become
and remain blocked resulting in the ponding of water and ultimately the flooding to
plaintiff ’s property.
HELD: Action dismissed. The last docu-
mented inspection prior to the flood was
Feb. 8, 2005. There were no records bearing
on the frequency, timing and steps taken.
The city’s pre-printed drainage inspection
reports stated that priority locations must be
checked once per month and during rain/
storm conditions. The city fell short of com-
pletion of its own guidelines. Each of the
experts called by the parties agreed that the
flood in plaintiff’s basement was caused by
the seepage of water through the foundation
of the house and not water running through
windows or doors. There was no evidence of
blockage or water accumulation in the days
before the flood The only evidence presented
detailed a significant water flow complete
with significant debris in the form of mud,
rocks, wood and even broken trees. There
was very little the city could have done to
prevent or control that result, even if they
had been on site to inspect the box culvert
either in the days or months before or even
during the winter storm and then thaw con-
ditions. The city’s failure to inspect the cul-
vert was not the cause of plaintiff’s flooding.
PARTNERSHIPS
HELD: Appeal allowed. H had no duty to
disclose all his marketing efforts to respondent. He was duty-bound only to advise
respondent of information that could have
influenced the decision of whether or not to
sell the property to K. Given that respondent
had made it clear it wanted to sell the property immediately and was willing to reduce
its price to do so, H acted reasonably in finding an immediate buyer. H should have disclosed the Keg deal, however, when he
sought a time extension for K to complete
the purchase. However, despite that breach
of H’s duty to respondent, respondent failed
to establish it sustained damages. There was
insufficient evidence that respondent would
have been able to sell to the Keg or that it
could have obtained a higher price from the
alternate buyer.
Crescent Restaurants Ltd. v. ICR
Brokerage Inc. (c.o.b. ICR Ashford Com-
mercial Real Estate), [2010] S.J. No. 418,
Sask. C.A., per Smith J.A. (Lane J.A. con-
curring), reasons dissenting by Jackson
J.A., July 21/10. Digest No. 3014-019
(Approx. 21 pp.)
LIMITED PARTNERSHIPS – Appel-
lants were not entitled to repayment of
cash flow loans from investors in a limited
partnership.
Appeal by the promoters of a limited
partnership tax shelter from a judgment
dismissing their action for repayment of
loans. The business of the partnership
involved the ownership and management of
a condominium complex. Respondents
TORTS
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invested in the partnership. Pursuant to the
terms of the offering memorandum, the subscription price for each unit was to be paid
through a combination of a cash deposit and
various loans. Appellants argued that the
second loans and the cash flow loan were
due and payable by respondents. The trial
judge accepted that by virtue of the subscription documents, the second loans and cash
flow loans were secured by respondents’
individual promises to pay. However, she
concluded that the payment terms of those
loans, as set out in the offering memorandum, were ambiguous and confusing and
that the memorandum should be construed
against appellants, the authors of the document. The judge held that since the terms of
the second notes did not accord with the
payment terms for the second loans set out
in the memorandum, the second notes were
not authorized by the powers of attorney
granted by respondents to the general partner. Consequently, respondents were not
bound by the second notes.
HELD: Appeal dismissed. The payment
clause in the offering memorandum was not
ambiguous and the principle of contra pro-ferentem was not engaged. Properly read,
the memorandum contemplated payment of
accrued interest and outstanding principal
on the second loans when a refinancing of
the first loans acceptable to the parties was
achieved. The promoters marketed the partnership investment on that basis, but that
did not occur. The trial judge was correct to
hold that respondents were not contractually liable to pay the cash flow loans. The
memorandum indicated that those loans
were to be paid from the partnership’s operating cash flow or from the proceeds of any
refinancing of the property. The subscription
form did not contain any promise or commitment by the investors to pay the cash
flow loans. In the absence of such a covenant
by the limited partners, the powers of attorney granted to the general partner did not
extend to the creation of new or different
investor liability.
Skye Properties Ltd. v. Wu, [2010] O.J. No.
2933, Ont. C.A., per Cronk J.A. (Doherty and
Watt JJ.A. concurring), July 12/10. Digest
No. 3014-018 (Approx. 16 pp.)
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REAL ESTATE BROKERS – Real
estate agent had no duty to disclose all his
marketing efforts to a vendor.
Appeal from a judgment finding breaches
of appellant’s duties as real estate agent.
Appellant H was for a time the exclusive listing agent for respondent restaurant, but did
not find a buyer within the term of his
engagement. He then found a buyer, K, and
a deal was struck. H knew, but did not disclose to respondent, that K intended to sell
the restaurant property immediately upon
obtaining ownership to the Keg, a national
restaurant chain, for a profit. H had
requested an extension of time to close the
deal on behalf of K to facilitate that sale. The
judge found H liable to respondent for the
difference between the sale price to K and
the sale price to the Keg, less the commission
H would have received on the sale had it
been conducted between respondent and
the Keg. The judge found that H owed a
fiduciary duty to respondent, which encompassed a duty to disclose K’s planned sale of
the property to the Keg, as well as another
potential buyer for the property with whom
H had been in contact.
DEFAMATION – Appellant was
awarded $1,000 for a defamation con-
tained in an e-mail.
Appeal from the dismissal of appellant’s
action for wrongful dismissal and defamation. Appellant was dismissed in August
2004, after 16 years of employment with
respondent insurer. She brought proceedings for wrongful dismissal. In the course of
the proceedings, respondent produced an
e-mail from appellant’s supervisor, which
included as reasons for termination that she
was “dissatisfied with change”, “dissatisfied
with work environment”, and “inadequate
performance”. In addition, the supervisor
advised that he considered appellant as “not
re-hireable” and rated her as “
unsatisfactory”. The parties agreed to a period of severance of 16 months in lieu of notice and
cause for appellant’s dismissal. The balance
of her claims for compensatory or aggravated damages and defamation were dismissed at trial. The trial judge found the
comments in the e-mail were not defamatory, but concluded that it was a moot issue,
as the report was protected by the defence of
qualified privilege.
HELD: Appeal allowed in part. The term
“inadequate performance”, which the supervisor used in the report, was not supported
by the evidence and was defamatory. However, the supervisor honestly and in good
faith believed that appellant’s performance
was inadequate. There was no evidence of
malice. He clearly had an interest in making
the statements in question, and respondent’s human resources personnel had an
interest in the receipt of the report. That
established qualified privilege. However, the
e-mail was also sent to an individual about
whom no evidence was presented as to position or status with respondent, and who
therefore had no duty to receive the report.
In her case, qualified privilege had not been
made out, although the evidence of injury to
appellant from the publication of the report
to that one individual was so minimal that it
only supported an award of nominal damages of $1,000.
Dawydiuk v. Insurance Corp. of
British Columbia, [2010] B.C.J. No.
1431, B.C.C.A., per Hinkson J.A. (New-
bury and Groberman JJ.A. concur-
ring), July 20/10. Digest No. 3014-020
(Approx. 7 pp.)
