Civil and Commercial Litigation

To put it simply, Shibley Righton LLP is recognized within the legal community and judiciary in Ontario as having a formidable strength and depth of expertise in litigation. Over one half of our firm's complement of lawyers practice in this area. As a result, we are particularly well-suited to address whatever litigation matters may confront our clients.

Our litigation lawyers advise and represent our clients in a wide and diverse range of matters before all levels of courts and various administrative tribunals, commissions and agencies. More importantly, we provide general counsel to assist our clients in ordering their affairs so that litigation may be avoided whenever reasonably possible. Even where litigation appears unavoidable, we help our clients assess the practicality and viability of alternative dispute mechanisms, such as arbitration and mediation, in order to determine the appropriate strategy in each case.


In addition to its work in specialty areas, including our Education and Public Law Group, Professional Liability Group, Labour and Employment Law Group, Construction Law Group, and Insolvency and Creditors Rights Group, the firm's extensive civil litigation practices includes:

  • all types of negligence actions, from product liability claims and defence, to negligent misstatements, to personal injury, etc.;
  • contractual remedies and enforcement, including damage claims, interpretation, injunctions and specific performance, with a particular expertise in complex or commercial disputes;
  • insurance defence, including defence of professional liability, long term liability and life claims.
  • municipal law, including issues relating to land development, disputes by or with municipalities and their related entities, by-law interpretation and enforcement, etc.;
  • shareholder and corporate disputes, from oppression remedy cases, to enforcement of shareholders agreements, to directors' and officers' liability;
  • mediation and arbitration to reduce the cost and time involved in dispute resolution;
  • enforcement of foreign judgments and orders, particularly through our longstanding relationship with foreign law firms, internationally through Multilaw and in North America through Lexwork International; and
  • appellate proceedings at all levels, right up to the Supreme Court of Canada.

Appellate proceedings at all levels, right up to the Supreme Court of Canada.




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Shibley Righton's Jacqueline King will the Chairing the The 17th Annual Civil Litigator’s Survival Guide To Evidence on January 20th, 2023.  Please click here for more details and here for a copy of the event brochure 


Jonathan Miller HeadShot

A recent judgment in his client’s favour reinforces the right of lawyers to pursue matrimonial assets in family law proceedings when past accounts have not been paid, even when the ownership of that property is in dispute, says Toronto litigator Jonathan Miller.

“The decision echoes previous judgments by the Supreme Court over the past 20 years when dealing with similar issues,” says Miller, an associate with the Toronto office of Shibley Righton LLP.

Appearing before the Superior Court of Ontario, Miller represented a family law firm that was owed money by a woman who was involved in a lengthy and contentious divorce and custody case. The two parties resolved the custody issue, at which time the firm asked for payment of past accounts before continuing the litigation, but instead of settling, the woman retained another lawyer.

A year later, an action was started on behalf of the family law firm, asking the woman to come to the table to help devise a plan to repay what was owed, he says.

“Despite telling her that she needed to defend against that claim, she didn’t, and so my client eventually took default proceedings, and there it sat because once we registered the writ of execution, we waited for the wife to get some proceeds from the matrimonial home,” Miller tells

After the husband found out about the writ of execution against the wife’s interest in the property, Miller says the man argued that it was an invalid encumbrance under s. 21 of the Family Law Act, which states that a spouse cannot encumber the matrimonial property without the consent of the other spouse.

According to court documents, the husband asked the court to lift the writ so his wife could transfer the property to his name only without paying the amount owed to her previous counsel, but that request was denied.

“I find that [the lawyers] were an arm’s-length party to a commercial transaction. In the circumstances of this case, s. 21 (1) of the Act is not engaged and the writ is not an encumbrance,” the judgment states.

When the case went to the Ontario Court of Appeal (OCA), it was dismissed quite quickly, with the court’s reasoning summed up in just over one page, says Miller.

He says it’s crucial that the court agreed a law firm can make claims against the assets of former clients when payment is due, even if the ownership of that property is in dispute.

“The wife did not encumber the matrimonial home,” the OCA ruling reads. “The respondent was an arm’s-length creditor at the time the writ was filed. It was entitled to file the writ. The fact that the wife owned the house was information readily available to any creditor at the time.”

Miller says that part of the judgment reinforces a line of case law established by the Supreme Court.

“This is another step in the direction to clarify when someone may or may not offend s. 21 of the Family Law Act,” he says.

On a personal level, Miller says this was an important case since it took him outside his comfort zone, which is in his firm’s professional liability, commercial litigation and construction law practices.

“I have rarely dealt with family law issues, so the various arguments made in advance of the motion really forced me to get involved in areas of litigation where I was not that familiar,” he says.

“For a young lawyer such as myself, that’s vital, because the decision in my client’s favour was a real confidence booster and showed me that I could take on new challenges outside my usual area of practice,” Miller says.



Thomas McRae

You may think you’re running a company that qualifies for a small business deduction, but Toronto commercial litigator Thomas McRae says a recent decision from the Tax Court of Canada illustrates why failing to follow the statute could put you on the wrong side of the Canada Revenue Agency.

The case involved an incorporated Ontario company that claimed the small business deduction (SBD) for the trailer park it managed. The SBD provides for a reduced corporate tax rate on a private corporation’s active business income but excludes income from a “specified investment business” (SIB) defined as a “business … the principal purpose of which is to derive income from property…” unless it employs, directly or indirectly, more than five full-time employees, according to court documents.

The company was denied the SBD on the basis that it earned its income primarily from the rental of seasonal and extended seasonal campsites and the storage of recreational vehicles and because it didn’t have any employees, except for the son of the principal shareholders, documents state.

“We have a statue that was designed to address one form of possible ‘abuse’ of the tax system and happens to catch people in its net who, in the ordinary course of things, probably should be getting the advantage of the lower tax rate,” says McRae, a partner with Shibley Righton LLP. “They clearly have no problem with it if you employ five people, but his business was so small it didn’t, and so this individual finds himself on the wrong side of the statute.”

The son of the two principal shareholders of the business was employed collecting rent on the campsites, providing recreational vehicle storage and mobile RV sales.

The man argued that the main purpose of the company was not simply to earn income from property, noting he also provided event planning, garbage pickup and on-call availability. However, the court decided that it did not change the character of the income to anything other than rental income, court documents state.

If the business had hired four additional people and had a larger operation, it would have received the benefit of the deduction, McRae explains.

“If he had hired a bookkeeper or maybe someone to mow the lawn — but his misfortune was that the business was so small he couldn’t navigate through the exceptions and get to a better tax result,” McRae tells

He says the SBD is a “labyrinthine” statutory provision with various exemptions that “appear to be policy-driven.”

“If you don’t find yourself with the benefit of the policies inherent in the statute, you’re out of luck,” McRae says. “I understand exactly what he was feeling. He thought, ‘This is my business, this is the way I’m running it, and it is a small business, so why shouldn’t I get the small business tax rate?’ But he had the weight of the statute and precedents — which followed the statute — working against him.”



Christopher Gaytan

Complex economic crimes carried out by insiders are a growing concern for many global businesses — but when fraud has been identified, it is crucial for counsel to act quickly and connect with their counterparts in other jurisdictions, says Toronto commercial litigator Christopher Gaytan.

According to PwC’s 2018 Global Economic Crime and Fraud Survey, 49 per cent of global organizations indicate they have experienced economic crime in the past two years — with just over half of all frauds perpetrated by people working inside the organization.

Gaytan, an associate with Shibley Righton LLP’s Toronto office, says in corporate fraud cases, there are generally three elements, or a ‘fraud triangle’ in place that can explain the reasoning behind the fraud — pressure, opportunity and rationalization.

“Pressure is usually the financial aspect — a person wants to obtain a financial benefit or maintain a lifestyle that they previously had,” he tells

“Opportunity is usually when they are in a position where they can take advantage, such as an insider,” Gaytan says. “If you have the information, you know how the business works, putting you in a privileged position where you have the access and ability to act in secret.

“The third element is the rationalization that most fraudsters don’t see themselves as criminals. They usually believe they are victims of circumstances, or they say, for example, ‘I just did what I was asked to do,’ or they tend to minimize the harm done by the crime,” he adds.

Ultimately, Gaytan says many organizations may not be aware that they have fallen victim to fraud until they implement a significant change to their corporate structure or they go through an audit.

An example of this trend — and of the complexity of fraud cases in general — was recently seen in a global case that spanned a number of jurisdictions, including Ontario, involving a South American pension fund, in which Gaytan recently acted as co-counsel for the plaintiff.

In this case, he says, a number of fraudulent investments in Ontario were in place for years, and a few members of the then board of directors were aware of the fraudulent scheme. These insiders were working together with outsiders to perpetrate the fraud. It wasn’t until the full board underwent a complete changeover and contemplated an audit that the significant problem was discovered and external legal counsel was retained.

“The court, in this case, found that the fraud was committed with the knowledge of the insiders — members of the board of directors. These insiders helped parties to channel investments and divest funds to offshore accounts. Of course, most of these investments were misleading and fraudulent, and they were facilitated by unregulated intermediaries who were here in Ontario, and they paid secret kickbacks to the insiders in South America,” says Gaytan.

“This case clearly shows that there is an opportunity for insiders to commit fraud, and then they find the proper parties elsewhere to commit these fraudulent activities.”

The 2018 Ontario Superior Court decision in the case is currently under appeal.

Gaytan says this type of corporate fraud is complex as it often involves an international network of individuals whose goal is to make it as challenging as possible to detect.

“Once the lawyers come into place, it is really hard to follow the path of these funds and to find out who was involved,” he says.

As such, one of the best ways to tackle this type of fraud case is to have local representation in each applicable jurisdiction, Gaytan says.

“In our case, we had lawyers in Ontario, but we worked together with lawyers in South America, which is where this pension fund is located. We also have lawyers in the United States, Europe and Central America. We know there was some activity in those jurisdictions. So, we basically have lawyers in every country where we know the funds went through,” he says.

While increasing employee awareness of the growing problem of fraud is one key to prevention, Gaytan says companies also need to implement more structure within the organization, boost compliance, ethics, and make legal improvements.

However, once a fraud has been identified, lawyers need to be brought in quickly, he says.

“One of the first things that a lawyer should do is consider putting Mareva injunctions in place, which is to try to freeze all the accounts and assets of the firm and/or individuals that are involved, and also try to consider Anton Piller orders, which basically give you the right to search the premises,” says Gaytan.

“It’s vital to act fast before any potential evidence can be destroyed, and to put all of these orders in place,” he says.



Matthew Urback Head Shot

Those who act as executors and attorneys are generally entitled to compensation for performing their duties, says Toronto litigator Matthew Urback.

In a recent Ontario Superior Court case — described by the judge as a rare “good news story” in an application to pass accounts — two caregivers for a wealthy elderly couple were awarded more than $750,000 as compensation for their role as attorneys for property and personal care, as well as for administering the estate of the husband when he died.

According to the decision, the younger couple were friends and neighbours of the older pair and took on the positions of responsibility without ever seeking a cent in return. It was only on the suggestion of the elderly surviving widow that they brought their application for compensation, the judge added.

Urback, a partner with Shibley Righton LLP, says it’s rare to see a formal written decision approving such expenses in an uncontested case, adding the involvement of an institutional trustee may have necessitated the hearing.

“We’re used to a more adversarial approach, so it was very interesting to see the judgment laid out that way,” he tells

The decision is particularly notable for drawing attention to the legal regime surrounding compensation for attorneys, Urback adds.

“Irrespective of whether the issue has ever been discussed between the parties, statutory and common law make it clear that attorneys for property and personal care are entitled to claim compensation for the work they do,” he says. “Most people know that estate trustees can be compensated for their work administering an estate, but it’s easy to overlook the entitlement of attorneys.”

According to Urback, a rule of thumb employed by practitioners in the area suggests that attorneys for property can claim roughly three per cent of receipts and disbursements, in addition to a management fee of 0.6 per cent for assets under their care.

“That’s not a trivial amount, especially when you’re talking about people handling large amounts of money for people with high-value estates,” he says.

The situation is less straightforward when attorneys for personal care are involved, but the same basic principles apply, says Urback.

“The amounts are harder to quantify because you can’t just take a percentage of assets. But there is a line of cases that says courts can fix an amount for compensation that is reasonable and proportional,” he says.

According to the judgment in the recent case, the younger couple provided assistance and care to the wealthy seniors that went “far beyond what anyone would reasonably expect from a friend and neighbour” for more than 20 years.

Without any next of kin, the older pair turned to the younger couple for help with chores and tasks, including banking, taxes, household repairs, and grocery shopping, before formally appointing them as joint attorneys for both property and personal care.

The decision says the younger man handled the older man’s banking and finances, including his considerable investments until his death in 2017, and that an accounting report confirmed the younger couple acted “conscientiously and scrupulously in this regard.”

In terms of compensation, the judge awarded the younger couple $130,000 for administering the man’s estate, which was worth more than $4 million. He also granted their request for approximately $435,000 in compensation for their work as power of attorney for property, based on a calculation set out in the Substitute Decisions Act. Finally, the younger couple was awarded $135,000 for services carried out during six years as attorney for personal care for the older pair.

“I have no hesitation concluding that the amount sought is reasonable and proportionate in the circumstances,” the judge concluded.



Jonathan Miller HeadShot

People planning to represent themselves in court should take the time to learn about the process and their obligations — and opposing legal counsel should also assist as much as possible in those circumstances, says Toronto litigator Jonathan Miller.

“Some people can’t afford to hire a lawyer, yet still don’t qualify for legal aid, so they often decide to represent themselves,” says Miller, an associate with the Toronto office of Shibley Righton LLP. “But if they don’t have experience with the legal system, these people don’t know what they don’t know.”

He points to a recent case where a self-represented litigant presented what he thought was sound reasoning to the court.

“The judge listened, then called them ‘organized, pseudo-legal commercial arguments,’” Miller tells “He said the reasoning might have sounded good to a layperson, but there was really no legal basis for the argument he was making, so he lost the case.”

He says legal counsel who find themselves facing a self-represented litigant have a duty to give that person every opportunity to have their case heard.

“Lawyers have a responsibility to deal with other parties and the court in a way that upholds the integrity of the system,” Miller says. “However, there is a fine line between being helpful to a self-represented litigant and crossing the line by giving legal advice or saying something that is potentially harmful to your own client’s case.”

He says one way he has helped people navigate the judicial system is to remind them of the 30-day deadline for court filings.

“That is something that I can do to help the person and maintain the integrity of the system, without being offside of my obligations to my client,” Miller says.

Most self-represented cases are in small claims court, he says, which is designed to facilitate that form of representation much more than the Superior Court system.

“I’ve seen some people defend themselves who were very knowledgeable in the law and the processes they were involved in, but I’ve also seen many examples at the opposite end, where people really have no sense of how the process works and what their obligations are,” Miller says.

He recommends that people who can’t afford legal counsel to represent them in court should at least consult a lawyer or paralegal about the process they are about to undertake.

Some lawyers give free consultations, Miller says, though that can also pose a problem.

“It can be difficult to give advice without getting into a kind of client/lawyer relationship, which could pose problems if that advice is misconstrued,” he says.



Christopher Gaytan

While judgments from criminal cases can be considered in related civil matters, they cannot be relied on by themselves to reach a decision, as a full civil trial may be necessary to assess the evidence, says Toronto commercial litigator Christopher Gaytan.

To illustrate his point, Gaytan points to a recent Ontario Court of Appeal decision that overturned a $20-million summary judgment award granted by a motion judge.

According to court documents, a man was convicted of defrauding his former firm out of more than $5,000. The sentencing judge found the appellant’s participation in the fraudulent scheme amounted to a “gross breach of his fiduciary duty.” Relying solely on the criminal verdict and the findings of the sentencing judge, the company moved for summary judgment in its civil action against the man, asking for $20 million.

The motion judge determined that the sentencing judge’s findings were entitled to “very considerable weight” in the civil proceeding, the decision states. He concluded that the appellant was a fiduciary because the sentencing judge described him as such, and accordingly, the motion judge held that the appellant breached his fiduciary duty through his participation in the fraudulent scheme, and granted judgment for $20 million.

“It’s a very interesting decision because a civil summary judgment was overturned when it was based on a criminal conviction, even though the standard of proof required for criminal conviction is beyond reasonable doubt and civil cases are decided on balance of probabilities, which is basically 'more probable than not,'” says Gaytan, an associate with Shibley Righton LLP’s Toronto office.

“Since the burden of proof in criminal proceedings is higher, it may seem the logical thing to allow a summary judgment against him in a related civil action, but this decision shows that is not always the case,” he tells

Court documents note the motion judge “erred in principle by failing to consider relevant factors in determining what weight he could give to the sentencing judge’s finding that the appellant was a fiduciary.” Those factors include similarity of the issues to be decided, the identity of the parties, the nature of the earlier proceedings and the opportunity given to the prejudiced party to contest the previous finding.

“That error infected his analysis as to whether there was a genuine issue requiring a trial on the breach of fiduciary duty claim,” the appeal court ruled.

“There wasn’t a submission made to the sentencing judge that directly addressed whether this man exercised a fiduciary duty in the firm,” Gaytan says.

He says this ruling provides an interesting perspective about the weight of the criminal findings in relation to civil proceedings.

“The court held that the criminal findings were admissible, but that it is very important to be careful about the considerations of the weight given to those findings,” Gaytan says.

He says the main lesson is you can’t just rely on a criminal judgment when you’re dealing with a civil action.

While the standard of proof is higher in the criminal court, he says this case shows that you still have to prove your case in civil court.

“This case sets a really strong precedent,” Gaytan says. “Now they have to go back to square one and do the analysis about what constitutes a fiduciary, which is why this case is being sent back to the Ontario Superior Court for a trial.”



Christopher Gaytan

Toronto commercial litigator Christopher Gaytan brings a personal touch to the practice of law.

Although the legal profession maintains a stuffy reputation in both his native Mexico and his adopted home of Canada, Gaytan, an associate with Shibley Righton LLP’s Toronto office, tells that he likes to dispense with formality as much as possible when meeting clients.

“I want them to feel comfortable and connect with them in a friendly and personal way,” he says, explaining that the approach benefits him professionally as well as personally.

“It makes for a deeper and more rewarding relationship all round,” Gaytan adds. “Lawyers are sometimes too formal, and it can make clients a bit nervous when it comes to talking about their business, which means they don’t want to tell you everything. I find that the personal connection gives me a better understanding of their legal needs.”

Gaytan says he felt destined for a legal career from an early stage, propelled by the recommendations of parents and high school teachers who identified the profession as a strong match for his academic skills.

“They thought I would be a good lawyer, and I took their advice and went for it,” he says.

Initially attracted to criminal law during his studies in Mexico, Gaytan articled with one of the country’s prosecution departments but discovered the area was not for him and switched to commercial litigation with a small law firm.

He explains that it is common practice for Mexican commercial lawyers seeking to broaden their horizons to pursue further legal studies abroad. Gaytan opted for Osgoode Hall Law School, attracted partly by the quality of its international business law master’s program, but also by warm feelings for Canada generated during family vacations.

But his plans changed in 2012 when he met his future wife in Toronto, and then excelled during an internship with Shibley Righton, where he was asked to stay on to work on a major litigation file involving South American investors allegedly defrauded in a $30-millon Canadian scheme.

Gaytan completed the accreditation process to qualify as an Ontario lawyer over the course of four years while working on the fraud case, finally articling with Shibley Righton, before his call to the bar in 2017.

He says the transition from Mexico’s civil law to Ontario’s common law regime has been challenging but rewarding, considering many of his Latin American clients need to have the differences explained to them.

“It’s been interesting to balance both systems and integrate them because my clients are generally based in civil law jurisdictions,” Gaytan says. “At their core, the legal and philosophical principles are basically the same, but the bigger adaptation comes in the new procedures and court systems you have to get used to.”

In addition to his commercial litigation trial and appeal work, Gaytan also operates a smaller professional liability practice, acting for lawyers involved in estate disputes.



Jonathan Miller HeadShot

A new online service should appeal to people who want simple wills at a low cost, but there is still a potential for misuse, says Toronto civil litigator Jonathan Miller.

“This generation spends so much time online, so this is the next logical next step,” says Miller, associate with the Toronto office of Shibley Righton LLP.

He cites an online article about a Toronto-based startup that indicates its programs can help people create three types of wills without utilizing the services of a lawyer.

According to the article, users fill in information about their beneficiaries, how they want to divide up their estate, and who will be the executor.

A basic will can be drawn up for $99, or users can designate a power of attorney for $150, or they can do both for $250, says the article.

“For many people, this service provides a simple way to go about creating a will, especially for those who don’t have complex families,” Miller tells

In the past, he says people could attempt to do the same sort of thing by ordering a home will kit in the mail.

“This is the next step in that evolution, but this utilizes online technology.”

Miller says the service is not currently a threat to traditional estate lawyers since the website is only able to handle very basic wills, such as those where everything goes to the surviving spouse, or where certain gifts are given to specific people.

“Those wanting to do something a little bit more complicated should still see a lawyer,” he says, giving the example of a will that spells out the care and funding for dependent children.

According to the story, the startup “worked with estate lawyers to help create all the legal content and flow of the documents,” and instructions are included “for how to make it legally valid.”

Miller says the Succession Law Reform Act states that wills do not require a lawyer’s signature, but they still need to be witnessed by two people who are not listed as beneficiaries.

His main concern with this service is that it could potentially be misused by those making a will on someone else’s behalf.

“Someone could create a will for mom and dad, and have them sign it without them really knowing where the money is going after they die.”

Miller says preventing that form of financial impropriety is one of the pivotal roles a lawyer plays when drawing up a will in person.

“They make sure the testator’s intentions are truly expressed in their will,” he says.

“Because of the lack of complexity in the wills this service can prepare, at least at this point, I can see the potential for abuse, but it’s not necessarily very high.”

Miller says people intimidated by the idea of going to a lawyer may be drawn to this service, as well as those not willing to pay for regular legal service.

“In simple scenarios, perhaps this is a good way for them to get started, but once the estate starts evolving to include care of dependent children and more complex ways of distributing assets, people will need to get a lawyer involved,” he says.



Marlin Horst head shot

People who put down a deposit for a property on behalf of a company that is not yet incorporated could lose that money if the buyer pulls out of the deal, says Toronto corporate lawyer Marlin Horst.

Horst, partner with Shibley Righton LLP, cites a recent Ontario Court of Appeal case where a man signed an Agreement of Purchase and Sale for three Toronto properties, stipulating that he was signing as a buyer “in trust for a company to be incorporated without any personal liabilities.”

He provided a deposit of $100,000 to secure the purchase, court documents state, but months later he advised the seller that he wanted out of the deal, and requested to have his deposit returned.

When the seller refused, the man sued, the judgment states, and the appeal court judge agreed with a lower court decision that the deposit should be forfeited.

“I think the court was correct in its decision,” Horst tells

“There is a law of deposits, which is separate from what Ontario's Business Corporations Act (OBCA) says about pre-incorporation contracts,” he says.

Horst says the seminal authority on the nature of a deposit is an 1884 decision by the Court of Appeal in England. After referencing Roman law, the judge at that time stated that a deposit was “not merely a part payment, but is then also an earnest to bind the bargain so entered into, and creates by the fear of its forfeiture a motive in the payer to perform the rest of the contract.”

Under the OBCA, Horst says a contract entered into prior to incorporation is personal to the party who enters into the deal until that firm is incorporated, and the new entity assumes the responsibility.

“In this case, it appears the purchaser never incorporated the company and essentially walked away from the transaction,” says Horst.

“There’s a long line of cases that says a deposit stands to secure the performance by the party giving the deposit under the contract unless the contract says something else,” he says.

Horst says it is unrealistic to expect a contract to state that the deposit will be returned if the deal doesn’t go through for any reason.

“No vendor would agree to that,” he says, “though many contracts do stipulate the deposit will be returned because of A, B, C or D, with the agreement spelling out exactly what those conditions are.”

The judgment states that the man putting down the deposit thought his money was protected since he was signing as a buyer “in trust for a company to be incorporated without any personal liabilities.”

Horst says that wording protects the buyer from any damages incurred by the vendor because the deal didn’t go through, but that protection does not apply to the deposit.

“The court is saying the vendor could not go after the purchaser for anything in excess of the deposit when it became clear the purchase was not taking on that contract, but the deposit remains separate from that,” he says.

Horst says this judgment could be a wake-up call for people who aren’t really familiar with the law on deposits.

“There hasn’t been a case specifically about something like this for a very long time,” he says, “and I’m not sure of any other case that dealt with the interplay of s. 21 of the OBCA and the law of deposits.”

The judgment states that the section of the Act allows somebody to enter into an agreement without liability for the contract.

It reads, “If expressly so provided in the oral or written contract ... a person who purported to act in the name of or on behalf of the corporation before it came into existence is not in any event bound by the contract or entitled to the benefits thereof.”

The court referenced the section, noting “the provisions of the OBCA addressing pre-incorporation contracts do not displace the common law rules governing deposits in real estate transactions.”



Megan Mackey Head Shot

Condo buyers who wish to avoid a dispute over construction deficiencies should choose their developer carefully, says Toronto condominium and commercial litigator Megan Mackey.

Mackey, partner with Shibley Righton LLP, says construction issues are a fact of life in the industry.

“I’m not sure that there’s ever been a condo built without some sort of problem,” she tells

“In the first year or two after construction, purchasers will be working with the developer to resolve all those deficiencies, so it’s a bit of a partnership,” Mackey says, adding that potential buyers can get a sense of how the relationship is likely to go by doing a bit of due diligence in advance.

“If a builder has been in the business a long time and people seem generally happy with their product, that could be a pretty safe bet,” she says. “If they’ve been sued a few times by owners, that might be a red flag and you may not want to get involved with them.

“My message to consumers is that when you buy a new condominium unit, one of the more important things to think about is who you’re buying it from and what their reputation is.”

Mackey says only a minority of construction deficiency disputes end up in litigation, thanks in part to the coverage provided to buyers by Tarion’s Ontario New Home Warranties Program.

“Some problems are more complex than others,” she says. “When any kind of water penetration or leak is involved, that can be incredibly frustrating and expensive. Other issues are not such a big deal. In most cases, the condo board can sit down with the developers and engineers to resolve the issues.”

In the past, Mackey says condo conversions — in which builders put pre-existing properties, such as warehouses, churches and office buildings, to new residential use — were more prone to litigation because the warranty did not cover this type of project.

“When buildings are converted from a previous use, purchasers who are buying brand new units might not always understand that distinction.”

Mackey says things changed last year when amendments to the Tarion program extended warranty coverage to “residential condominium conversion projects.”

Mackey’s only construction deficiency case to reach trial involved a condo conversion, and she says it may never have gotten that far had Tarion’s new rules applied back then.

The condo in question was incorporated in the late 1990s following the conversion of a building originally constructed in the 1970s, she explains. The owners took the developers to court over a number of issues, including their alleged failure to repair an underground garage.

While a trial judge sided with the developer, the Ontario Court of Appeal (OCA) reversed the decision, finding among other things that the developers had breached their warranty to buyers to provide a substantially renovated parking garage.

“Doing nothing more than paint the garage fell far short of the parties’ reasonable expectations,” the OCA panel concluded in its 2009 decision.

Mackey says the buyers’ ultimate success in court was tempered by the time it took to get vindication — more than a decade.

“That’s a lot of time and expense,” she says. “What this case reflects is how difficult it can be for a condo corporation to rectify construction deficiencies when a developer is not abiding by the agreement the buyers thought they had.

“There are numerous condo developers in this province, and many of them manage to avoid litigation because they’re able to work with buyers to sort out any issues and come to a compromise,” Mackey says.


Jonathan Miller HeadShot

Having a robot successfully mediate a fee dispute is a great first step in showing how artificial intelligence (AI) can be used in our legal system, says Toronto civil and commercial litigator Jonathan Miller.

“I'm quite an advocate for employing technology to make the legal process more accessible and more efficient,” says Miller, associate with the Toronto office of Shibley Righton LLP.

“This seems like a reasonable tool to help with that,” he tells

According to a recent article, the “online tool, which uses AI algorithms in place of a human mediator,” settled the three-month-long dispute in less than an hour.

“These robotic mediators certainly have their place,” says Miller, “and it's exciting to see that technology is being used in a way to facilitate the legal process.”

The article says the software was developed by a British Columbia company.

“I’ve never used it,” says Miller, “but I think it’s an exciting prospect for the legal profession. Some judges have already said they believe lawyers should be using more AI to reduce costs.”

Miller says this program can only be used in cases where there isn't an issue of who's paying whom, nor of liability.

“It is limited to discrete issues that can be solved by a numerical decision,” he says,

The developer’s website gives the example of a telephone company going after a customer who has $2,400 in outstanding fees. He agrees he is delinquent in his payments but says he cannot afford that amount.

“Each party takes turns making offers using two sliders,” Miller says, explaining the first slider is visible to the other side, and the second one is not, as it indicates the maximum or minimum that party is prepared to offer.

Once the two sides overlap in their offers, he says the software announces a settlement has been reached.

“This will only work for simple cases without complicating issues,” says Miller, “particularly where there isn’t an issue of liability.”

With developments in AI, he expects the software will eventually be able to settle more complex cases.

“I think it can be expanded beyond being a simply a numerical settlement tool,” Miller says, “and be tailored to particular areas of law.”

He gives the example of an employment case, where the mediator must place a value on such factors as years of service, stock ownership and vacation time.

“There are several variables in most lawsuits that will come into play in mediation negotiation before both sides can arrive at a number,” Miller says.

“This program doesn’t account for that yet, but AI firms have to start somewhere.”

He says the reaction to this case will give insight into the legal community's willingness to use robotics in their work.

“When both sides are very practical and look at their dispute as simply a numbers issue, then something like this could be effective,” Miller says.

He predicts robotic settlement will catch on in municipalities such as Toronto or Windsor, where mediation is mandatory.

“A tool like this may be able to help settle simpler issues where a dollar value is being disputed,” Miller says.

“The software can help solve those issues, so the mediator’s time can be spent focusing on more complex problems.”

In a broad context, he says there is a real place for AI across our legal system.

“There are two extremes when it comes to this issue, with some people believing that AI is going to take over the judicial system, while others say it has no place in our courts.”

Miller says he is excited by the potential it offers.



Jonathan Miller HeadShot

Counsel must develop strong communication skills if they hope to keep client expectations in check when it comes to a potential settlement, Toronto civil and commercial litigator Jonathan Miller tells

Miller, associate with the Toronto office of Shibley Righton LLP, says he begins thinking about how to manage a client’s expectations from the very beginning of a file.

“If you don’t promise someone the moon, then hopefully they won’t be expecting it, but managing expectations is very much an ongoing process,” he says. “As things progress, opinions can change, and you might have to revise the advice you’ve given them in terms of recovery or loss. But if you set the stage early, it’s easier to adjust those expectations down the road.”

Miller says crafting a claim can be a particularly challenging time, especially when acting for a plaintiff with little experience in the legal realm. Lawyers may wish to advance claims under certain heads of damages for tactical reasons, even if the chances of success are small, he adds.

Problems can arise when clients allow their beliefs to stand in the way of a potentially favourable settlement, and Miller says lawyers shouldn’t be shy about confronting a skeptical plaintiff who wants to hold out for more.

“As a young lawyer, it can be difficult to wrangle your client a little, especially when you have to tell them that they're being unreasonable,” he says. “But it’s also important and valuable for young lawyers to deal with these kinds of situations early in their career, and learn how to speak with clients to appropriately manage expectations about what they can actually recover as part of a negotiated settlement.

“As you become involved with larger and more sophisticated files, you’re going to come across clients with their own opinions about what they’re entitled to, and it’s your obligation to make sure they’re properly informed about the risks,” Miller says.

In one recent case involving a severance package offered to his client by a former employer, Miller had to explain how a risky additional claim could potentially quadruple the value of the damages.

“But it was one of those cases where the new claim was not a sure thing by any means, and we had to decide whether it was worth pursuing,” he says.

After taking into consideration the risks, stress, cost and time associated with a lawsuit, his client elected to settle the matter with Miller’s help, before resorting to litigation.

“The client was reasonable and had certain expectations about what they wanted to recover,” Miller says. “My job was to help them understand what was beyond the scope of a realistic settlement, what they have to dig in and fight for, and what they’re prepared to risk in order to recover as much as possible.”


Jonathan Miller HeadShot

While more judges are assessing costs in cases where artificial intelligence (AI) could have reduced the number of billable hours, there are still a number of unanswered questions surrounding its use, says Toronto civil and commercial litigator Jonathan Miller.

“Judges are prepared to tell lawyers that AI could have been used in court preparation. They’re saying, ‘You shouldn’t be entitled to all the costs you incurred to do that research,’” Miller tells

He says there are a number of online sources, such as CanLII, that help lawyers find and compile information, but there are also companies developing AI research to make searches more efficient.

“In some cases, you can plug in a set of parameters, and it will look at case law and say, ‘Here’s your answer,’” says Miller, an associate with the Toronto office of Shibley Righton LLP.

He recently explored an AI program focusing on employment law, and while enticing, he says there are still many questions left unanswered about the new technology.

“You input certain information, and it will tell you what case law says about a reasonable notice period, for example,” he explains. “I can definitely see the use of something like that, but I have questions such as, how many variables can you add?”

There are also factual differences in various cases, Miller says.

“I wonder to what extent the facts of a case get incorporated into the research?”

He says judges have been getting more vocal about using technology to improve the speed at which cases proceed and to lessen costs.

In this case, a judge suggested AI would have reduced counsel’s bill, Miller says.

However, this was not a complex case, he says, so it’s fair for a judge to suggest that AI could have done it faster and at less expense.

Miller says there are still many factors left up to the discretion of the court that computer programs can’t take into account.

“There are a variety of things a judge would want to consider, such as the personal circumstance of an individual, or actions taken by a defendant, for example. They all factor into the decision,” he says.

Miller doesn’t believe artificial intelligence will one day replace lawyers, but it could reduce the number of their billable hours.

“The interpretations of risks and liabilities can’t be made by AI, and a layperson would still need legal assistance,” he says.

“Lawyers will still play an important role in translating the information and flagging hazards. The one thing AI can’t account for — at least at this point — is the human factor,” says Miller.

A key concern with the use of artificial intelligence for the legal profession is the confidentiality of information processed, he says.

While recently studying one company’s AI solutions, Miller noted that users were alerted that the system would endeavour to keep the client’s information confidential.

“It’s possible that based on the details you submit, someone could learn information about the user or your client,” he says. “You would then need your client to sign off on AI use or find a way to get the information needed without using someone’s name.”

Miller says there are definite pitfalls with artificial intelligence in legal work, but he believes it’s here to stay.

“I do think it’s a tool that the profession can make use of,” he says. “We’d be foolish to think it’s not going to have an impact on how we practise law.”


Marlin Horst head shot

Executors should make sure beneficiaries are fully informed before taking compensation from the estate according to a recent decision, Toronto corporate lawyer Marlin Horst tells

The case involved a disputed passing of accounts by a lawyer acting as an estate trustee on a $3-million estate.

The lawyer, who spent 10 years without formally passing accounts, argued beneficiaries’ objections to actions more than two years old should be struck out under the Limitations Act.

However, a unanimous panel of appeal court judges, sitting as the Divisional Court, upheld a lower court judge’s ruling in favour of the beneficiaries.

“By filing a notice of objection to accounts in response to an estate trustee’s application to pass accounts, a beneficiary is not commencing a proceeding in respect of a claim within the meaning of s. 4 of the Limitations Act,” Appeal Court Justice David Brown wrote for his colleagues in dismissing the appeal.

Horst, a partner with Shibley Righton LLP, says the court reached a logical conclusion. Had the ruling gone the other way, he explains that estate trustees would be able to defeat legitimate objections by simply delaying their passing of accounts.

“If the trustee was correct in his analysis, all you would have to do is to wait for long enough that any objections would become statute-barred,” says Horst, who did not act in the matter and comments generally. “Often, the passing of accounts is the first time the beneficiaries will see what has been spent, and it’s not possible to object to things that happened when you had no knowledge of them.”

The deceased in the case left a will that named the lawyer as executor and created two testamentary trusts for the benefit of her two children. The will also named her nieces and nephews as contingent beneficiaries should her own children have died before vesting in the trusts.

Although the executor never passed accounts formally for a decade, he regularly updated the testator’s children on his administration of the estate during informal meetings.

However, when a dispute with one of the children forced the lawyer to pass accounts in 2015, one the deceased's children and two of her nieces lodged objections, including over the amount of compensation the executor had taken.

The lawyer argued the regular meetings constituted consent for his conduct, and in any case, claimed the objections were statute-barred under the Limitations Act. However, a motion judge rejected his attempt to have the objections struck, and the appeal court agreed.

“One takeaway from the case is that trustees who are dealing with adult beneficiaries must make clear what the estate accounts are, and exactly what they are consenting to, particularly in terms of the trustee’s compensation,” Horst says. “If a trustee wants to take compensation before formally passing accounts, you need to make sure that you have got all the beneficiaries onside.”


Marlin Horst head shot

A defrauded corporate lender who unsuccessfully tried to sue the government to cover $1.8 million in losses was always facing an uphill struggle, Toronto corporate lawyer Marlin Horst tells

A better strategy for the lender would have been to conduct more stringent due diligence at the outset rather than suing the Crown after the fact, says Horst, partner with Shibley Righton LLP.

The Ontario Court of Appeal matter involved a lender who advanced $1.8 million in mortgages to a man on the grounds he was the sole owner and officer of a company. The loans were advanced after the lender checked the Ministry of Government and Consumer Services' corporate registry and found the man was listed as a director and officer.

However, it transpired that this was a complete fabrication and the man had merely filed a change order to the registration with no authority whatsoever.

The appellant argued that the ministry owed a duty of care to reasonably ensure the accuracy and reliability of the information it collected, maintained and disseminated for a fee when it knew or ought to have known that the appellant would rely upon such information.

“I would advise clients to rely on more than the corporate profiles, which are incorrect a quarter of the time,” says Horst, who was not involved in the matter and comments generally. “This is not because of anything the government has done, it’s simply because corporations don’t always update their profiles.”

This is why due diligence must rely on multiple sources, he says, including the old-fashioned method of picking up the telephone and making a call.

“In this day and age, everyone has an email or a website,” Horst says, adding the registrations branch doesn’t make judgment calls on whatever information they are given and just assumes what is being filed online is correct.

“This is different from getting a certificate under Personal Property Security Act, which is certified by the government and you could litigate if the information was incorrect,” he says of the mechanism by which property and financial instruments are registered to a specific owner.

Horst says the takeaway lesson is that there’s no substitute for multiple layers of due diligence and checking bona fides.

“It’s important to dig deeper and have several sources confirm what you have been told,” he says.


peter murphy headshot

In the first instalment of a two-part series, Toronto business lawyer Peter Murphy looks at the issues facing cannabis store retailers.

Prospective cannabis retailers need to proceed carefully as a new gold rush gets underway in the market for bricks-and-mortar sales of the newly legal drug, Toronto business lawyer Peter Murphy tells

Following the federal government’s recent legalization of cannabis for recreational use, the provincial government unveiled its own framework for licensing retailers in the Cannabis Licence Act (CLA).

And Murphy, partner with Shibley Righton LLP, says the province’s private sector model for retail stores has sparked a scramble for the best locations.

“Cannabis retail in Ontario is the new gold rush,” he says. “There’s a huge potential opportunity here, and many new businesses are going to be getting into this.”

While the former Liberal government had planned a provincial monopoly over the retail sales of cannabis, similar to the LCBO, Premier Doug Ford's Tory administration has established a licensing regime for private retailers overseen by the Alcohol and Gaming Commission of Ontario (AGCO).

However, the AGCO is not yet accepting licence applications and doesn’t expect to be ready to receive any before December. When it is up and running, the CLA's two-stemmed approach will require businesses to obtain a retail operating licence, plus a retail store authorization for every location they plan to operate. A third type of licence, for cannabis retail managers, will also be required for every individual responsible for a store's management and compliance.

Regulations under the CLA provide additional requirements that must be met before licences may be obtained, Murphy says.

“For example, the regulations under the CLA say that retail stores will not be allowed within 150 metres of a school,” he says. “You can bet prospective retailers are looking at Google maps and starting to lock up the best locations.

“Cannabis retail is going to be heavily regulated, and anyone getting into the retail business should be prepared to bear related costs. Advertising and promotion are already heavily restricted at the federal level, and the CLA requires every individual hired to work in a cannabis retail store to complete AGCO-approved training programs,” Murphy says.

He also says the Ontario Cannabis Retail Corporation has the exclusive right to sell cannabis to authorized retailers, which will limit their ability to competitively source inventory.

Another potential problem for retailers is that municipalities still have until Jan. 22 to opt out of cannabis retail sales. Richmond Hill and Markham have already taken advantage of the opportunity, but Murphy says individual retailers could be left exposed if they agree to lease a particular location in a municipality that subsequently joins the list of non-cannabis jurisdictions.

To mitigate their risks, Murphy says cannabis retail hopefuls looking to enter into a lease should consider negotiating for a refundable deposit and the ability to walk away if zoning or licensing permits do not come through.

“You don’t want to be locked into a long-term lease without a viable business, either because of zoning or other surprises,” he says.

Stay tuned for part two, where Murphy will discuss the unique issues facing landlords of cannabis stores.


Jessica Vickerman

Construction lien litigation could be dramatically reduced once new legislation fully kicks into gear, Toronto litigator Jessica Vickerman tells

Bill 142, the Construction Lien Amendment Act, which is designed to bring a “prompt payment” regime to Ontario, has been implemented in stages since its passage at Queen’s Park last year. The amendments, which represent the first major revision to Ontario construction lien law since 1983, will be fully phased in by October 2019, says Vickerman, an associate with the Toronto office of Shibley Righton LLP.

She says Ontario’s Superior Court currently has a specialized system in some jurisdictions for handling construction lien disputes, with a number of masters devoted entirely to hearing them.

However, Vickerman says the amendments will bring Ontario in line with other prompt-payment jurisdictions around the world with the creation of a new mandatory interim adjudication system for construction disputes.

“It remains to be seen what role the court will have once the adjudication process gets underway,” she says. “Judging by the experience in the U.K., there may be a decline in the volume of litigation involving construction disputes. It’s possible the court will take a more limited role than it has previously.”

Still, the court will have some part to play, Vickerman says. Although adjudicators’ payment orders must be satisfied within 10 days and may not be appealed, she says the law makes it clear that orders made under the mandatory process are only interim and not binding on any arbitrator or court subsequently ruling on the same subject matter.

“While litigation or arbitration remains open to the parties, it seems that it rarely happens in practice,” Vickerman says. “That may be a big change, but there is a lot to happen before October next year.”

In the meantime, she says the industry is waiting on the selection of a body designated by the provincial government to run the mandatory adjudication process, known as the Authorized Nominating Authority.

“It’s an important next step to see who that will be and how the roster of adjudicators will be developed,” Vickerman says.

In July, the latest set of Bill 142 regulations came into effect. According to a provincial government release, some of the key changes include:

  • Clarifying language to better reflect large-scale public projects with multiple owners
  • New 60-day deadline for contractors and subcontractors to register a lien, as well as a 90-day limit for court actions
  • New bookkeeping rules to protect subcontractors in the event of bankruptcy
  • Surety bond requirements for public-sector owners on certain contracts
  • Rules allowing condo unit owners to remove liens related to improvements to the common elements
  • A requirement that project owners pay contractors and subcontractors holdbacks once the timeline to file liens has passed.

Heather Paterson Head shot.

A recent ruling that found the city of Calgary liable for the injuries a man suffered during a brutal beating at a rapid transit walkway may not hold much sway over future cases involving duty of care, Toronto civil litigator Heather Paterson tells

Paterson, a partner with Shibley Righton LLP who has an active municipal defence practice, says each case would have to be adjudicated based on its own unique facts.

She says the circumstances in the 2007 case, which involved a 20-minute beating of a man on an aerial walkway linking two Calgary public transit stations, amounted to a "perfect storm of everything that could go wrong."

"And it did, but it's hard to know how that will translate for cases that happen in 2018 because you're going to deal with very different circumstances. Each location will be different, as will the facts and particulars of the incident," Paterson says.

The case, which is being appealed, involves a young man who was attacked Jan. 1, 2007 as he walked through an aerial walkway linking two Light Rail Transit stations. The sustained assault caused significant injuries and was captured by video surveillance.

In a decision released 11 years later, the court held that the City of Calgary was liable to the the plaintiff "due to insufficient lighting, cameras, peace officers, surveillance video monitoring personnel, and the absence of a trespass ban or special events policy, the city failed to the meet the duty and standard of care owed, resulting in or contributing to the severity of the assault and injuries suffered," Justice Johnna Kubik said in her ruling.

She rejected the city's claim that it did not exert control over the walkway, as it was not considered to be an occupier as defined by the Occupiers' Liability Act.

"One of the significant things about this is how long ago the assault occurred," says Paterson, who comments generally and was not involved in the case. "You have to look at this in a time bubble as to the sorts of systems that were in place in 2007. Technologically, we live in a different world than we did then. Even cameras for monitoring have vastly improved over the last 11 years.

"What impact this case will have going forward, we'll have to see," she says. "It fell on a unique set of circumstances, one of which was old technology. There are a number of problems identified in this case that may not exist in today's world."

Part of the ruling dealt with the reduced number of security officials on duty — two patrolling officers compared to the usual 12 — on a day Calgary offered free access to its public transit, Paterson says.

"Manpower was one of the issues identified by the court as problematic. The most significant issue and the turning point in this case was how long the assault took place — about 20 minutes — and no one noticed it, nobody knew about it,” she says.

The case hinged on the Occupiers' Liability Act, which has a requirement that to the best of an organization's ability, patrons or invitees should be kept safe while on its premises, Paterson says.

"The city had a certain amount of control of the people who were coming onto its property, how the site operates, its condition at the time of the event as well as the activities that occur on the premises," she says. "And then one needs to meet a requisite standard of care at that point."

Kubik found the standard of care was not met, she says.

"She found a number of faults — one was the quality of the videos and the placement of the cameras, but also the number of staff on duty to monitor those cameras," Paterson says.

There were only two cameras in the vicinity of the assault, and two officers monitoring more than 40 video screens, "which is how this attack got missed," she says. "One camera was apparently of such poor quality you couldn't make out what was happening.

"The judge faulted the city for failing to notice the assault was happening and not dispatching officers to respond to it. She also found there was insufficient lighting as well as an inadequate number of police or transit officers available, but also that there were not enough officers on duty to act as a deterrent," Paterson says.

According to court documents, Kubik ruled that the city breached its duty on a number of points, including insufficient and poor-quality video surveillance and lighting, inadequate staffing at the Operations Control Room watching 42 monitors linked to 332 cameras throughout the rapid transit system, and not enough officers patrolling the system on a day where riders were offered free access.

In her ruling, the judge stated that the length of the attack showed the stations were not being properly monitored, and that having only two peace officers patrolling on a day where the city urged New Year’s revellers to use transit was a “departure from any reasonable standard of care.”

"There's always a general requirement that you do your best to keep people safe," Paterson says. "You have to have measures in place to protect people."

Had the attack involved a single punch or kick, "we would be looking at a very different case than one where a person is being beaten for 20 minutes. Much will depend on the facts and circumstances. You do what you can to keep people safe. You can't protect them from everything in the world."

Given that the city is appealing the ruling, Paterson says it’s difficult to determine what kind of impact this case might have in the future.

"If this case stood for a proposition in the level or standard of care expected for every small or large municipality, you would have a significant policy and budgetary impact on cities and towns,” she says. "Some may not have the budget for a significant level of security and service.”


Jessica Vickerman

VANCOUVER — A professional association of engineers in British Columbia is alleging negligence or unprofessional conduct against three engineers after the 2014 collapse of a tailings dam at the Mount Polley mine.

Engineers and Geoscientists British Columbia says disciplinary hearings against Laura Fidel, Stephen Rice and Todd Martin will take place next year.

The association's investigation committee alleges that three individuals involved in the design, construction and monitoring of the tailings storage facility demonstrated negligence and or unprofessional conduct in the course of their professional activities.

The allegations have not been heard by a disciplinary panel and are unproven.

The disaster at the gold and copper mine was one of the largest in the province's history and sent 24 million cubic metres of mine waste and sludge into nearby waterways.

In an interview with, Toronto litigator Jessica Vickerman says the case illustrates why professionals shouldn't take on responsibilities beyond their qualifications.

“The allegations serve as a reminder to all professions of the danger in accepting responsibilities for which you are unqualified and conversely, delegating duties to those whom you know are unqualified,” says Vickerman, an associate with the Toronto office of Shibley Righton LLP.

“The allegations of negligence or unprofessional conduct against the three engineers are extensive and run the gamut from claims of poor design and improperly sealing drawings to inadequate monitoring and lack of qualified review,” she says.

Vickerman, who isn’t involved in the case and comments generally, says the association’s authority to initiate the investigation is outlined in s. 30 of the Engineers and Geoscientists Act, although the process usually follows a complaint.

“The association has the ability to enforce various sanctions should the allegations against the engineers be proven, including reprimanding them, imposing conditions on and/or restricting their practice, suspending or revoking their professional membership and licence, and imposing a fine of up to $25,000,” she explains.

A three-year deadline for provincial charges in the case passed last year amid an ongoing investigation by B.C.'s Conservation Officer Service.



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