Amid a torrent of intertwining claims and counterclaims, some parties to a commercial dispute may wish to pursue a partial summary judgment in order to tackle the main issues in a dispute.
“Although courts are generally reluctant to grant partial summary judgment, where there exist clear issues that do not raise further issues such as credibility or the like, partial summary judgment remains an option for litigating parties to further narrow the dispute,” Sahil Shoor, partner with Gowling WLG, told the Daily Commercial News. “A partial summary judgment may be appropriate where there is a clear breach of trust obligations as required under the Construction Act.”
Even so, Michael Lesage of boutique law office Michael’s Law Firm, says after granting a partial summary judgment regarding a breach of a commercial contract, a trial may still be necessary in order to determine the amount of damages.
However, partial summary judgments remain unusual in Ontario.
“The Court of Appeal for Ontario has repeatedly held that such motions should be granted only rarely,” write James Little, partner, Evan Rankin, associate, and Kathryn Irwin, student, of Singleton Urquhart Reynolds Vogel LLP, “and only where an issue may be readily bifurcated (divided) from those in the main action and that may be dealt with expeditiously and in a cost-effective manner. Otherwise, there is a risk that findings made in the summary judgment motion will be inconsistent with findings made following the trial of the balance of the action.”
Nevertheless, partial summary judgments do happen.
Learmont Construction Ltd. subcontracted Learmont Roofing Ltd. to perform all work on a specific project. Note: There was no relationship between the two, despite their names.
The project owner would pay Learmont Construction, who in turn would then pay Learmont Roofing 95 per cent of that amount and retain the remaining five per cent.
All appeared well and good until it came to the fourth of five invoices paid by the owner. Learmont Construction did not pay Learmont Roofing anything.
As Little, Rankin and Irwin explain, “The principal of Learmont Construction believed that the contract price had been inflated as part of a corrupt scheme between Learmont Roofing and the lead engineer on the project. It was alleged that the engineer would have a roof installed on his cottage by the subcontractor at no charge.”
Learmont Roofing commenced an action to recover the nearly $140,000 owed and brought a motion for a partial summary judgment. Learmont Construction made several counterclaims that included fraud and conversion. Nevertheless, Learmont Roofing successfully obtained a rare partial summary judgment on its claim.
The motion judge ruled Learmont Construction’s “speculative allegation” did not require a trial. It was ruled to be an issue separate from that of the non-payment.
In fact, the allegation of fraud and conversion was refuted by evidence that showed the engineer had committed to pay for his cottage roof in full.
Furthermore, it was found the money paid by the owner for the fourth invoice had been diverted for the personal use of Learmont Construction’s principal and his company.
Therefore, both the principal and holding company breached the trust obligations under the Construction Act for not paying Learmont Roofing the monies owed and thus “were jointly and severally liable for the full amount owing to the subcontractor,” write Little, Rankin and Irwin.
Upon appeal, Justice Lynne Leitch of the Superior Court of Justice upheld the motion judge’s decision, finding there were no genuine issues requiring a trial and no credibility issues that would interfere with the motion judge’s findings.
“Partial summary judgment is a rare procedure that is reserved for an issue or issues that may be readily bifurcated from those in the main action and that may be dealt with expeditiously and in a cost-effective manner,” she wrote. “The more important credibility disputes are to determining key issues, the harder it will be to fairly adjudicate those issues solely on a partial summary judgment basis.”
John Bleasby is a Coldwater, Ont.-based freelance writer. Send comments and Legal Notes column ideas to editor@dailycommercialnews.com.
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