FREEDIN & ROWELL LLP https://www.freedinrowell.com Practicing outside of the box for over 40 years. Thu, 21 Aug 2025 20:21:57 +0000 en-US hourly 1 https://wordpress.org/?v=5.9.10 https://www.freedinrowell.com/app/uploads/2021/05/cropped-Alicia Robertfreedin-favicon-32x32.png FREEDIN & ROWELL LLP https://www.freedinrowell.com 32 32 Points Taken: Legislative Updates in Rewards Programs https://www.freedinrowell.com/rewards-programs-legislative-updates/ Thu, 21 Aug 2025 14:25:32 +0000 https://www.freedinrowell.com/?p=5891 Under Schedule 5 of Bill 46, Protect Ontario by Cutting Red Tape Act, 2025 (“Bill 46”), the Ontariogovernment plans to introduce legislative amendments to the existing rules under the ConsumerProtection Act, 2002, SO 2002, c 30, Sched A (“CPA”) that govern consumer agreements underwhich rewards points are offered. If your business, directly or through a…

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Under Schedule 5 of Bill 46, Protect Ontario by Cutting Red Tape Act, 2025 (“Bill 46”), the Ontario
government plans to introduce legislative amendments to the existing rules under the Consumer
Protection Act, 2002, SO 2002, c 30, Sched A (“CPA”) that govern consumer agreements under
which rewards points are offered. If your business, directly or through a third-party supplier, offers
rewards points, you should follow this legislative development to prepare better if the proposed
legislative amendments become law.

This is a significant legislative development because, if the proposed amendments become law,
every new or existing consumer agreement under which rewards points are offered will need to
be made, amended or extended in accordance with the new legislative requirements.

If passed, the legislative amendments would come into force on a day to be named by order of
the Lieutenant Governor in Council, except for the technical and consequential amendments,
which would come into force on the day Bill-46 receives Royal Assent.

High-level overview of the proposed legislative amendments:

The CPA safeguards consumer rights in Ontario, with Section 47.1 of the CPA governing
consumer agreements under which rewards points are offered by rewards points suppliers.

Who is a rewards points supplier?

Under the CPA, a supplier is a person who is in the business of selling, leasing or trading in goods
or services or is otherwise in the business of supplying goods or services, including the supply of
rewards points, and includes an agent of the supplier and a person who holds themselves out to
be a supplier or an agent of the supplier.

What constitutes a consumer agreement?

Under the CPA, the consumer agreement is an agreement between a supplier and a consumer in
which:

a. the supplier agrees to supply goods or services for payment, or
b. the supplier agrees to provide rewards points to the consumer, on the supplier’s own behalf or
on behalf of another supplier, when the consumer purchases goods or services or otherwise acts
in a manner specified in the agreement.

The proposed legislative amendments under Bill 46 that may amend Section 47.1 of the
CPA include the following:

a. existing and new consumer agreements under which rewards points are provided shall
be made, amended or extended in accordance with prescribed requirements;
b. rewards points suppliers shall disclose prescribed information to consumers prior to
consumers entering into the consumer agreement;
c. consumer agreements under which rewards points are provided shall not allow for the
expiry, cancellation, or suspension of rewards points, except as permitted by the
regulations;
d. if a consumer is a party to an agreement under which rewards points expire or are
cancelled contrary to regulatory requirements, the consumer may request that the rewards
points supplier credit back any rewards points that were expired, cancelled, or suspended;
e. if there is a dispute, consumers shall submit a written request to the rewards points
supplier within the prescribed time and shall comply with regulatory requirements;
f. rewards points suppliers shall, within the prescribed period, acknowledge the
consumer’s request. If the request meets the prescribed requirements, the rewards points
supplier shall, within the prescribed period, credit back any rewards points to the consumer
or, after an investigation, send a written notice to the consumer explaining why the rewards
points supplier is of the opinion the consumer is not entitled to a credit of rewards points
under the CPA;
g. consumer will be entitled to commence an action against the rewards points supplier to
recover the rewards points to which the consumer is entitled;
h. rewards points supplier or other person shall not be entitled to compensation if
proposed legislative changes become law;
i. failure to act or acting contrary to the CPA or regulations under it will constitute
expropriation or injurious affection under the Expropriations Act; and
j. the Lieutenant Governor in Council will receive additional regulation-making powers to
make regulations governing matters related to consumer agreements under which rewards
points are provided, and if the regulation so provides, it may apply retroactively to existing
consumer agreements under which rewards points are provided.

Practical suggestions to prepare ahead of proposed legislative changes:

  1. If you are a rewards points supplier or use a third party to offer rewards points on behalf of your business, assess how many consumer agreements you have under which rewards points are offered.
  2. Ensure that consumer agreements under which rewards points are offered are readily accessible.
  3. Consult with your legal team at FREEDIN & ROWELL, LLP regarding the next steps.

If you have specific questions or need more information on how to prepare better for the proposed
legislative amendments, please contact your Franchise, Retail, and Distribution team at Keyser
Mason Ball, LLP.

Key contact:
Amy M. Delisle, Partner (Franchise, Retail & Distribution)
adelisle@freedinrowell.com
905.276.0422

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The M&A Team Advantage https://www.freedinrowell.com/the-ma-team-advantage/ Mon, 11 Aug 2025 17:59:54 +0000 https://www.freedinrowell.com/?p=5810 To say that the purchase or sale of an operating business is a fully involved process is an understatement. The potential purchaser juggles the need to diligence the target business, structure the transaction, obtain financing or raise capital as well as maintain their existing business obligations. The potential vendor is often knee deep with managing…

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To say that the purchase or sale of an operating business is a fully involved process is an understatement. The potential purchaser juggles the need to diligence the target business, structure the transaction, obtain financing or raise capital as well as maintain their existing business obligations. The potential vendor is often knee deep with managing diligence requests from the purchaser (and their bank / the accountants who are performing a quality of earnings analysis) and addressing final pre-sale tax matters, all the while trying to operate the business as a going concern. This is not to mention working through the breadth of legal documentation involved to implement the M&A transaction itself.

Having a strong legal team that focuses on M&A transactions is essential (https://open.spotify.com/episode/2LKUE9a33zP5vixfybMypD?si=K75OevURSSu1Z7M2g38uzw), but that team extends further than the M&A lawyers themselves. Working with a team that can provide a full range of services (or who also can integrate well with specialized legal counsel where required or existing advisors, such as chartered business valuators and accountants) can help ensure that a transaction remains on track and closes smoothly. Below are a few examples of how in our experience at FREEDIN & ROWELL that integration plays out over the course of an M&A transaction:

  1. Employment – All M&A transactions have an element of employment law to address. Be it preparing new or revised offers of employment, ensuring that offers of employment are being made on the same or substantially similar terms as employees currently enjoy, termination matters or addressing labour items, lawyers who focus only on these areas can help to provide tailored advice and solutions to manage the transition process effectively.

  2. Intellectual Property – Intellectual property matters often arise during transactions. Be it ensuring that moral rights are appropriately with the target business, conducting Canadian, US or initial intellectual property title searches to ensure that the target business inventories and retains its assets or ensuring that sufficient licensing is addressed, strong intellectual property lawyers can help address these items early to ensure a smooth closing process.

  3. Pre-Closing Reorganization – Often vendors undertake a pre-closing reorganization of their corporate structure to ensure optimal tax treatment of sale proceeds. Lawyers that are able to quickly maneuver to review, advise and implement such structures, working closely with the client’s advisors, can ensure that closing is kept well on track.

  4. Real Estate / Leasing / Secured Lending – Often real property is involved as part of a transaction either as an asset of the target business or a leasehold from which the target business operates. Real estate counsel can help ensure that those interests are protected to ensure business continuity post-closing, by transferring title to real property not being retained post-closing, negotiating with landlords, drafting leases for a lease back of property by the purchaser from the vendor post-closing as well as addressing lending requirements, be it on behalf of the purchaser with their secured acquisition financing or addressing bank subordination requirements on behalf of the vendor, in a specialized way that helps to keep closing expectations aligned.

The examples above are but a few of the ways that our M&A team integrates well with the full team at the firm to ensure that the transaction is well managed. The M&A lawyer is similar to a quarterback on a transaction – addressing the key legal steps and materials required to effect the acquisition or sale of a business – while involving such specialists as required to get the transaction closed for you, the client. If you have any questions regarding this or any aspect of your business, please do not hesitate to get in touch with me at 905.276.0431 or kfernandes@freedinrowell.com. We are here to help.

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Navigating Canada’s Anti-Spam Laws: Key CASL Considerations for Small Businesses https://www.freedinrowell.com/navigating-canadas-anti-spam-laws-key-casl-considerations-for-small-businesses/ https://www.freedinrowell.com/navigating-canadas-anti-spam-laws-key-casl-considerations-for-small-businesses/#respond Tue, 29 Apr 2025 14:54:40 +0000 https://www.freedinrowell.com/?p=5707 For small and medium-sized businesses (SMBs), marketing is essential for growth and customer engagement. However, failing to comply with Canada’s Anti-Spam Legislation (CASL) can lead to costly penalties, reputational damage, and loss of consumer trust. Unlike large corporations with dedicated legal teams, SMBs must navigate these regulations carefully to avoid unintended violations. This guide breaks…

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For small and medium-sized businesses (SMBs), marketing is essential for growth and customer engagement. However, failing to comply with Canada’s Anti-Spam Legislation (CASL) can lead to costly penalties, reputational damage, and loss of consumer trust. Unlike large corporations with dedicated legal teams, SMBs must navigate these regulations carefully to avoid unintended violations. This guide breaks down the major dos and don’ts to help SMBs run effective and legally compliant marketing campaigns.

Why CASL Compliance Matters for SMBs

Many SMBs rely heavily on digital marketing, i.e., emails, text messages, and social media, to connect with customers. However, CASL imposes strict requirements on sending commercial electronic messages (CEMs). A misstep, such as failing to obtain proper consent or using deceptive marketing tactics, can result in fines up to $10 million per violation. More importantly, non-compliance can erode trust, making it harder for businesses to build strong customer relationships.

Understanding CASL and implementing best practices will not only keep your business legally compliant but also help establish credibility and improve customer engagement.

DOs: Best Practices for SMBs

  1. Obtain Express or Implied Consent
    SMBs should always get clear permission before sending marketing messages. Express consent requires an opt-in mechanism, either written or verbal, where customers knowingly agree to receive messages. Implied consent can be inferred to an existing business relationship. Implied consent applies only in limited situations, such as when a customer has made a purchase within the last two years. Additionally, SMBs should be mindful of the time limits on implied consents which may range from 6 months to 2 years following the last transaction between the customer and the business.
  2. Clearly Identify Your Business
    Customers need to know who is contacting them. Each CEM must include the sender’s name, business name, mailing address, and a valid contact method such as an email, phone number, or website.
  3. Include a Simple Unsubscribe Option
    SMBs must ensure that every marketing email or message contains a clear, prominently displayed and functional unsubscribe link. The unsubscribe link or alternative mechanism must be accessible to the recipient for 60 days following receipt of the CEM containing it, and requests to unsubscribe must be honored within 10 business days, without requiring additional steps from the recipient.
  4. Keep Records of Consent
    Document all instances of consent, including when and how customers opted in. Proper record-keeping is crucial in case your business ever faces a CASL compliance investigation.
  5. Ensure Transparency in Marketing Messages
    SMBs must avoid misleading subject lines or deceptive messaging. CASL prohibits false representations in any marketing content, meaning messages should accurately reflect their purpose.

DON’Ts: Mistakes That Can Cost SMBs

  1. Don’t Assume Implied Consent Covers Everything
    Relying too much on implied consent is risky and time-limited. If a customer hasn’t purchased from you in over two years, you need fresh consent before sending promotional emails.
  2. Don’t Use Pre-Checked Consent Boxes
    Customers must actively opt in to receive messages. Using pre-checked boxes or automatic subscriptions violates CASL and could result in penalties.
  3. Don’t Ignore Third-Party Marketing Services
    If your business uses an external agency for email marketing, ensure they follow CASL regulations, including proper identification of your business. SMBs are legally responsible for messages sent on their behalf.
  4. Don’t Hide Your Identity
    Some businesses try to mask their identity to avoid spam filters. This is illegal under CASL. Always be transparent about who is sending the message by including the sender’s name, your business name and contact information.
  5. Don’t Assume CASL Enforcement Won’t Affect SMBs
    While larger companies have received some of the biggest fines, small businesses are not exempt from CASL enforcement. Regulators target all businesses that violate the law, regardless of size.

How SMBs Can Stay Ahead

CASL compliance isn’t just about avoiding fines, it’s about fostering customer trust and engagement. SMBs that follow CASL’s best practices will benefit from a stronger reputation, higher customer retention, and more effective marketing campaigns. By implementing the right policies now, small and medium-sized businesses can avoid legal troubles and build sustainable, long-term relationships with their customers.

If you have any questions about Canada’s anti-spam legislation, or need guidance tailoring your marketing practices to meet regulatory standards, please contact Layla Makhzoumi (lmakhzoumi@freedinrowell.com) or Jonfranco Monaco (jmonaco@freedinrowell.com).

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Voting Time Off for Ontario Employees https://www.freedinrowell.com/voting-time-off-for-ontario-employees-2/ https://www.freedinrowell.com/voting-time-off-for-ontario-employees-2/#respond Tue, 22 Apr 2025 12:41:38 +0000 https://www.freedinrowell.com/?p=5686 Ontario will have an election on Monday, April 28th – less than a week away – so now is as good a time as ever to think about employers’ obligations to employees on Voting Day. Eligible voters are entitled to three consecutive hours off work during the time that their polling stations are open on election day…

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Ontario will have an election on Monday, April 28th – less than a week away – so now is as good a time as ever to think about employers’ obligations to employees on Voting Day.

Eligible voters are entitled to three consecutive hours off work during the time that their polling stations are open on election day (this does not apply to advance polls). 

If an employee’s regular work schedule doesn’t provide them with that time off, the employer must give the employee paid time off work to vote. Yes, this is a very brief but paid leave for the employee.

The timing of the leave is at the discretion of the employer and typically only minor adjustments to schedules are required. If an employee’s polling station is open from 9:00 a.m. to 9:00 p.m. but they are off of work by 6:00pm, the employee is not entitled to any paid time off.  But if the employee’s regular schedule is, for example, 11:00am to 7:00pm, then the Employer can decide whether to allow the employee to come in late at 12:00pm or leave early at 6:00pm, with pay, so that the employee has three consecutive hours to vote. 

If the employee needs other time off for that day unrelated to voting, the employer does not have to provide that employee with paid voting time off at the employee’s requested time. For example, if the employee requests that they need to leave early on election day, but the employee already has 3 consecutive hours off in the morning of election day, that evening leave is not considered voting leave and does not have to be paid as voting leave.

Any employee acting as a Returning Officers or a Poll Official are entitled to an unpaid leave of absence to perform their election duties. The employee must provide the employer with at least 7 days notice of their intention to take a leave.

An employer is prohibited from penalizing an employee for exercising the right to take a leave related to elections, including forcing the employee to take vacation pay or sick pay instead of giving them their paid or unpaid leave as detailed above. The fines for such a contravention of the law bears a maximum fine of $5,000. If a judge finds that the offence was “committed knowingly” or someone assisted in any way the offence being “committed knowingly”, the maximum fine is increased to $25,000 and the offenders could be sent to jail for a maximum of two years less a day.

Reach out to our Employment Law Team if you have any questions.

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Key Issues in Lease and Sublease Agreements – Pinnacle International (One Yonge) v Torstar Corporation https://www.freedinrowell.com/key-issues-in-lease-and-sublease-agreements/ https://www.freedinrowell.com/key-issues-in-lease-and-sublease-agreements/#respond Fri, 28 Mar 2025 15:31:58 +0000 https://www.freedinrowell.com/?p=5472 INTRODUCTION In the landmark 2024 Ontario Court of Appeal case Pinnacle International (One Yonge) Ltd. v. Torstar Corporation (2024 ONCA 755), the Court addressed several important issues regarding contractual rights in lease and sublease agreements. This case provides important guidance for understanding commercial real estate leases, particularly with respect the extent to which the factual…

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INTRODUCTION


In the landmark 2024 Ontario Court of Appeal case Pinnacle International (One Yonge) Ltd. v. Torstar Corporation (2024 ONCA 755), the Court addressed several important issues regarding contractual rights in lease and sublease agreements.

This case provides important guidance for understanding commercial real estate leases, particularly with respect the extent to which the factual matrix should be considered when examining leases and subleases, the importance of defining key terms when drafting contracts, and the applicability of the Limitations Act and the Real Property Limitations Act.

Clarity in Drafting


In commercial real estate leases, it is crucial to define key terms and concepts with precision to avoid ambiguity regarding their meaning. In this case, ambiguity over the terms “profit” and “reasonable costs” were key to the dispute.

The Court’s ruling demonstrates that parties should be crystal clear in the lease agreement about which party benefits from these profits, the timing of such benefits (e.g., throughout the entire lease term, including or excluding applicable fixturing periods), and the specific inclusions or exclusions in the calculation of net profits.

The Importance of the Factual Matrix


The Court reiterated that, when interpreting leases (or other commercial contracts), it is critical to examine the factual background known to the parties at the time the contract was formed. This goes beyond a purely textual analysis and ensures that contractual interpretation reflects the actual circumstances surrounding the contract’s drafting and execution. In this case, the majority emphasized that the factual matrix—including the knowledge that the third-floor open-air space was unusable—was crucial in interpreting the lease provisions.

Applicable Limitation Period


Another important aspect of this case was the application of the appropriate limitation period for claims under the lease. Payments arising from a lease that are not strictly considered “rent” (even if the contract defines them as such) may be governed by the two-year limitation period under the Limitations Act, as opposed to the six-year period under the Real Property Limitations Act. This decision highlighted the risk that, even when payments are labeled as “rent,” courts may classify them differently, affecting the applicable limitation period.

BRIEF OVERVIEW OF THE CASE

Torstar Corporation (“Torstar”) occupied the commercial building at 1 Yonge Street from 1971 to 2022 under a lease agreement with Pinnacle International (One Yonge) Ltd. (“Pinnacle”). The lease required Torstar to pay Pinnacle net “profit” earned from any sublease. The key issue in this case was determining what constituted “profit.”

The building consists of two connected sections: (1) a 25-storey office tower and (2) a six-storey “Podium,” including a three-storey open-space warehouse. The third floor of the warehouse, which was central to the dispute, included both a usable office space (46,707 sq. ft.) and an open-air space (18,827 sq. ft.).

Article 8.1 of the lease permitted Torstar to sublet the space, but any profit from subletting—after deducting “reasonable costs”—was to be passed on to Pinnacle as additional rent.

In July 2011, Torstar entered into a sublease with College Boreal, which terminated in August 2020. The sublease specified a rentable area of approximately 46,707 sq. ft. for the third-floor office space, excluding the open-air portion of the warehouse. However, Torstar continued paying rent on the entire 65,534 sq. ft. of the third floor, including the open-air space, which neither Torstar nor Boreal could use.

Despite Torstar incurring a $2.6 million loss on the sublet premises, Pinnacle alleged that Torstar had profited from the sublease and sought to recover $1.1 million in profit.

This claim was based on the fact that Torstar charged Boreal more per square foot for the usable portion of the space than what was stipulated in the original lease. However, Torstar provided the following chart in its materials, which demonstrates that the total rent Torstar paid to Pinnacle for the entire third floor was always greater than the total rent Torstar received from Boreal. The chart outlines the gross rent (Basic plus Additional Rent) Torstar paid to Pinnacle for the third floor of the building during the Boreal sublease period. The gross rent ranged from $19.15 to $21.89 per square foot, paid on 65,534 square feet, including the third-floor Open Air Space. It also shows the gross rent Boreal paid Torstar, which ranged from $24.91 to $26.99 per square foot, paid on the 46,707 square feet of usable third-floor space. 

The motion judge ruled in favor of Pinnacle, requiring Torstar to pay the $1.1 million. The judge held that article 8.1 of the lease did not allow Torstar to deduct the full rent it paid for the third floor as a “reasonable cost” in determining whether it had profited from the sublease.

The decision was subsequently appealed, with the Ontario Court of Appeal addressing two main issues:

  1. Whether the third-floor open-air space could be included as a reasonable cost deductible from profit in the lease.
  1. Which limitation period applied to the claim for net profits.

THE ONTARIO COURT OF APPEAL’S DECISION

The Court allowed Torstar’s appeal, ruling in favor of the tenant. The Court accepted that the third-floor open-air space was part of the sublease rented to College Boreal and should be included as a reasonable cost deductible from profit under article 8.1 of the lease.

The majority identified three major errors in the motion judge’s decision:

  1. The Factual Matrix: The majority emphasized that when interpreting the lease, courts must look beyond the bare text to consider the factual background known to the parties. When Torstar and Boreal entered into the sublease, it was clear that the third-floor open-air space was inaccessible, and neither Torstar nor Boreal could use it. Despite this, Torstar was obligated to pay rent for the entire third floor. It would not have made commercial sense for Torstar to sublet only the usable portion of the third floor.
  1. The Sublease as a Whole: The majority held that the motion judge erred in not considering the sublease in its entirety. Viewed in light of the factual matrix, the sublease applied to the entire third floor, and the rent should have been calculated based on the usable portion.
  1. Commercial Absurdity: Excluding the full rent paid for the third floor from the calculation of profit created a commercial absurdity. Requiring Torstar to pay Pinnacle $1.1 million when Torstar had incurred a $2.6 million loss on the sublease was unreasonable. The majority maintained that “profit” should be understood in its ordinary and grammatical sense as “the excess of returns over expenditure.”

Additionally, the majority ruled that the Limitations Act applied to the claim for net profit under Article 8.1, overturning the motion judge’s decision.

In Ontario, two primary statutes govern limitation periods: the Limitations Act and the Real Property Limitations Act. The Limitations Act provides general timeframes for most claims, while the Real Property Limitations Act sets specific periods for real property matters.

The Limitations Act has a basic two-year limitation period, starting from the day the claimant discovered, or should have discovered, the claim. An ultimate limitation period of 15 years also applies, regardless of when the claim was discovered.

On the other hand, the Real Property Limitations Act has a six-year limitation period for arrears of rent. However, this does not apply in all cases, such as when there is an action for redemption by a mortgagor or claims involving prior mortgagees in possession of land.

In this case, the claim was “not based on an obligation to pay rent” as defined in the Real Property Limitations Act but for a breach of a lease term. Therefore, the majority determined the two-year limitation period under the Limitations Act should apply, as Torstar was required to pay Pinnacle net “profit,” not rent.

CONCLUSION

In Pinnacle International (One Yonge) Ltd. v. Torstar Corporation, the Ontario Court of Appeal reinforced the significance of clear contract drafting, the role of the factual matrix in interpretation, and the importance of understanding limitation periods in lease disputes. The case serves as a cautionary tale for landlords, tenants, and parties to a sublease to carefully define terms and anticipate potential conflicts, ensuring that commercial agreements reflect the actual circumstances and intentions of the parties involved.

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Behind Schedule, In Court: The Legal Framework for Construction Delays: Insights from Walsh Construction v. Toronto Transit Commission https://www.freedinrowell.com/behind-schedule-in-court-the-legal-framework-for-construction-delays-insights-from-walsh-construction-v-toronto-transit-commission/ https://www.freedinrowell.com/behind-schedule-in-court-the-legal-framework-for-construction-delays-insights-from-walsh-construction-v-toronto-transit-commission/#respond Wed, 19 Feb 2025 15:51:10 +0000 https://www.freedinrowell.com/?p=5438 The Ontario Superior Court’s decision in Walsh Construction Company of Canada v. Toronto Transit Commission, 2024 ONSC 2782, provides crucial insights into the use of expert evidence in defending delay claims and the enforceability of subcontractor flow-through claims by general contractors. This case serves as an instructive precedent for contractors, subcontractors, and owners involved in…

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The Ontario Superior Court’s decision in Walsh Construction Company of Canada v. Toronto Transit Commission, 2024 ONSC 2782, provides crucial insights into the use of expert evidence in defending delay claims and the enforceability of subcontractor flow-through claims by general contractors. This case serves as an instructive precedent for contractors, subcontractors, and owners involved in major infrastructure projects.

Background

In 2011, the Toronto Transit Commission (“TTC”) contracted Walsh Construction Company of Canada (“Walsh”) to construct the Steeles West Subway Station, later renamed Pioneer Village Station, as part of the Toronto-York Spadina Subway Extension. The original contract, valued at approximately $166 million, stipulated a substantial performance date of November 5, 2014. However, the project faced significant delays, with substantial performance achieved on June 15, 2017—953 days late—and final completion on November 7, 2018.

Walsh attributed the delays to TTC’s actions and sought $193 million in damages across 23 categories. TTC acknowledged responsibility for 411 days of delay but disputed liability for the remaining 636 days. Additionally, TTC counterclaimed for $22 million in liquidated damages, arguing that delays are common in projects of this magnitude and that responsibility should be shared.

Legal Principles Governing Delay Claims

The court outlined key legal principles regarding delay claims in paragraphs 89 to 92 of the judgment. These principles provide a framework for how courts assess different types of delays and their compensability.

Types of Delays:

  1. Excusable vs. Non-Excusable Delays:
    • Excusable Delays: Delays beyond the contractor’s control, such as force majeure events, labor strikes, or owner-caused delays. These may entitle the contractor to a time extension and, in some cases, compensation.
    • Non-Excusable Delays: Delays caused by the contractor, such as poor site management or insufficient staffing. These do not warrant time extensions or compensation and may result in liquidated damages.
  2. Compensable vs. Non-Compensable Delays:
    • Compensable Delays: Delays for which the owner is responsible, such as failure to provide design approvals on time. These can lead to both time extensions and monetary compensation.
    • Non-Compensable Delays: Delays resulting from unforeseen circumstances not caused by either party, often entitling the contractor only to a time extension but no monetary relief.
  3. Concurrent Delays:
    • When both the owner and contractor contribute to a delay simultaneously, courts assess the critical path impact of each party’s delay to determine liability.
  4. Critical Path Delays:
    • Delays affecting the project’s critical path, the sequence of tasks determining the overall project duration, are the most scrutinized in delay claims. If a delay impacts the critical path, it is more likely to justify a time extension or compensation.

Justice Hood emphasized that a clear causal link must be established between a delay event and its impact on the critical path for claims to succeed. Contractors must provide thorough delay analyses to substantiate their entitlement to relief.

Expert Evidence in Construction Delay Claims

A central aspect of the case was the evaluation of expert testimony regarding construction delays. Walsh relied on the expert testimony of Richard Ott, a delay analyst who conducted a comprehensive examination of over 780 TTC-related change conditions using the Primavera software. Ott concluded that Walsh was entitled to 1,047 compensable days of delay.

In contrast, TTC did not commission an independent delay analysis. Instead, it presented an expert whose role was primarily to critique Ott’s methodology without offering an alternative assessment. This left the court with a binary choice: either accept Ott’s findings or dismiss them without a competing analysis. Justice Hood emphasized that TTC’s approach was risky, stating: “Without an independent expert analysis, the court was left with a stark decision—to accept the only available expert evidence or to disregard expert testimony altogether.”

The court found Ott’s testimony to be thorough and credible, while TTC’s expert was perceived as overly rigid and unconvincing during cross-examination. Justice Hood noted that Ott “was not dogmatic or stubborn in his opinions,” which enhanced his credibility. Consequently, the court accepted Ott’s analysis, leading to a favorable outcome for Walsh.

TTC’s failure to present its own detailed delay analysis ultimately undermined its position. Justice Hood remarked, “The burden of proof in construction delay claims does not rest solely on the plaintiff; the defendant must also provide a meaningful counter-analysis if it wishes to challenge the findings.” This highlights a critical lesson for construction litigants—merely critiquing an opposing expert’s methodology is insufficient without a substantive counter-analysis.

Key Takeaways on Expert Evidence:

  • Conduct Your Own Analysis: Defendants in construction delay cases should engage their own experts to perform comprehensive analyses rather than merely critiquing opposing expert reports.
  • Avoid a Binary Outcome: By failing to present an alternative expert opinion, a defendant risks forcing the court into an all-or-nothing decision.
  • Burden of Proof Is Shared: Courts expect both parties to provide substantial evidence when disputing construction delays. Without a counter-expert report, the court may be left with little choice but to accept the claimant’s expert testimony.

Flow-Through Claims and Liquidating Agreements

Walsh also attempted to pass subcontractor claims through to TTC via flow-through claims. Flow-through claims, also known as pass-through claims, enable general contractors to seek damages from owners on behalf of subcontractors when the owner’s actions have caused delays or cost overruns. The enforceability of these claims hinges on the general contractor retaining some liability to its subcontractors for the damages in question.

Walsh entered into two types of liquidating agreements with its subcontractors:

  1. Assignment Agreements: Walsh fully compensated subcontractors for their claims, and in return, the subcontractors assigned their claims to Walsh.
  2. Non-Assignment Agreements: Walsh compensated subcontractors with the understanding that if it recovered any funds from TTC, a portion would be shared with the subcontractors.

In both scenarios, Walsh received full releases from the subcontractors, absolving it of any further liability. The court determined that since Walsh had fully settled these claims and was no longer liable to the subcontractors, it could not recover those amounts from TTC. Justice Hood stated: “A general contractor cannot seek to recover amounts it has no obligation to pay,” emphasizing that flow-through claims require actual liability.

Judicial Concerns on Flow-Through Claims

The court raised concerns about the fairness of allowing a contractor to pass along subcontractor claims while being completely insulated from liability. Justice Hood stated: “The fundamental issue here is whether a contractor who has paid and extinguished the subcontractor claims can nonetheless pursue them against the owner. In my view, the answer is no.”

Additionally, the court questioned the incentives created by liquidating agreements, noting that they could lead to claims being passed through without proper vetting. Justice Hood remarked: “There is an inherent risk in these agreements that the contractor merely acts as a conduit, forwarding subcontractor claims without meaningful assessment.”

Comparison Between U.S. and Canadian Law on Liquidating Agreements

The court acknowledged that in the United States, liquidating agreements are commonly accepted as a valid mechanism to maintain liability and flow through both the subcontractor’s claim and the contractor’s liability to the owner. Justice Hood observed: “Caselaw in the United States seems to accept liquidating agreements as being a valid way to maintain liability and to flow through both the subcontractor claim and the contractor’s liability to the subcontractor to the owner.” However, the court expressed reservations about this approach, stating: “While perhaps useful in minimizing litigation, in my view the attempt to place liability upon the owner for the subcontractor’s damages, where the owner has not contracted with the subcontractor and where the contractor has effectively removed itself from the picture, is not right.”

This highlights a key difference between U.S. and Canadian law regarding liquidating agreements. In the U.S., such agreements are more readily accepted as a means to facilitate flow-through claims. In contrast, Canadian courts may scrutinize these agreements more closely, particularly if the contractor has been fully released from liability.

This decision is currently under appeal at the Ontario Court of Appeal. The outcome of the appeal could significantly impact how flow-through claims are handled in Ontario moving forward.

Key Takeaway on Flow-Through Claims:

  • Retain Liability for Flow-Through Claims: General contractors should ensure they maintain some liability to subcontractors before advancing flow-through claims, as courts may reject claims where liability has been fully extinguished. The pending appeal may further clarify this issue.

Conclusion

The Walsh Construction v. TTC decision provides critical guidance on two key issues in construction litigation: the role of expert evidence in substantiating delay claims and the enforceability of subcontractor flow-through claims. The ruling highlights the importance of presenting a well-supported independent expert analysis when defending or advancing delay claims, as courts may reject a party’s arguments if they fail to provide a meaningful counter-analysis.

Additionally, the decision demonstrates that Canadian courts are likely to scrutinize liquidating agreements in subcontractor claims, particularly if the general contractor has fully settled with its subcontractors and no longer retains liability. The case reinforces the need for contractors to carefully structure their agreements and ensure they have a defensible basis for passing claims through to an owner.

Given that the decision is currently under appeal, the legal landscape regarding subcontractor flow-through claims in Ontario remains in flux. Contractors, owners, and subcontractors should closely monitor the outcome, as it may influence how construction claims are advanced and adjudicated in future disputes.

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Breaking Barriers: Key Legal Milestones in Black Canadian History https://www.freedinrowell.com/breaking-barriers-key-legal-milestones-in-black-canadian-history/ https://www.freedinrowell.com/breaking-barriers-key-legal-milestones-in-black-canadian-history/#respond Tue, 11 Feb 2025 19:43:14 +0000 https://www.freedinrowell.com/?p=5422 Black Canadians have played a crucial role in shaping the nation’s legal and civil rights landscape. Through their resilience and advocacy, they have fought systemic discrimination and contributed to landmark legal changes that continue to impact society today. Below are three significant legal milestones that helped shape Canada’s commitment to justice and equality. Viola Desmond…

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Black Canadians have played a crucial role in shaping the nation’s legal and civil rights landscape. Through their resilience and advocacy, they have fought systemic discrimination and contributed to landmark legal changes that continue to impact society today. Below are three significant legal milestones that helped shape Canada’s commitment to justice and equality.

Viola Desmond and the Fight Against Segregation (1946)

One of the most well-known cases of racial discrimination in Canada involved Viola Desmond, a Black businesswoman and civil rights advocate.

The Incident at Roseland Theatre

On November 8, 1946, Desmond was traveling for business when her car broke down in New Glasgow, Nova Scotia. While waiting for repairs, she decided to watch a movie at the Roseland Theatre. Unaware of its segregation policy, she purchased a ticket and sat on the main floor, which was unofficially reserved for white patrons.

When asked to move to the balcony, where Black customers were expected to sit, she refused. As a result, Desmond was forcibly removed, arrested, and jailed overnight.

The Court Case and Aftermath

Rather than being charged with violating segregation laws, Desmond was fined $26 on the grounds of tax evasion—arguing that she had not paid the one-cent difference in tax between balcony and main-floor seating. Though her appeal was unsuccessful, the case sparked national conversations about racial discrimination in Canada.

In 2010, Nova Scotia issued a posthumous pardon, acknowledging the injustice Desmond faced. Her legacy continues, and she became the first Canadian woman to appear alone on a banknote when she was featured on the $10 bill in 2018.

Impact: Desmond’s case exposed racial segregation in Canada and contributed to the eventual dismantling of segregation policies in Nova Scotia.

The Abolition of Slavery in Canada (1834)

Though often overshadowed by the United States’ history with slavery, Canada was once part of the transatlantic slave trade. Enslaved Black people were brought to British North America (now Canada) as early as the 1600s. However, growing abolitionist movements and legal challenges led to a shift toward freedom.

The Role of the 1793 Act to Limit Slavery

In 1793, Lieutenant Governor John Graves Simcoe passed the Act to Limit Slavery in Upper Canada, which prohibited the importation of new enslaved people into the province. However, it did not free those already enslaved. This made Upper Canada the first British territory to take legislative action against slavery, setting the stage for future abolition.

The Slavery Abolition Act of 1833

A significant breakthrough came when the Slavery Abolition Act was passed by the British Parliament in 1833, officially ending slavery in Canada and across the British Empire in 1834. This law granted freedom to all enslaved individuals and marked a turning point in Canada’s history, making it a safe haven for those escaping slavery through the Underground Railroad.

Impact: The abolition of slavery was a critical moment that helped shape Canada’s identity as a nation valuing freedom and human rights. It also laid the foundation for future legal battles against racial discrimination.

The Case of Albertan Black Homesteaders and Housing Discrimination (1950s-1960s)

Despite the abolition of slavery, Black Canadians continued to face systemic racism, including housing discrimination. In the mid-20th century, Black homesteaders in Alberta fought for legal recognition and equal housing rights.

Racially Restrictive Covenants in Property Law

During the 1950s, Black families seeking to buy homes in Alberta faced racial covenants—clauses in property deeds that prohibited non-white individuals from purchasing certain homes or land.

One of the most famous cases was that of Ted King, a civil rights activist from Alberta. Along with other Black Canadians, he fought against these discriminatory housing practices. Their efforts contributed to the landmark 1960 Canadian Bill of Rights, which formally recognized equality before the law.

The Fair Accommodation Practices Act (1959) and The Fair Employment Practices Act (1955)

Legal victories during this period led to the introduction of The Fair Accommodation Practices Act (1959) and The Fair Employment Practices Act (1955) in provinces like Ontario and Alberta, making it illegal to discriminate based on race in housing and employment.

Impact: These legal battles helped lay the groundwork for future human rights legislation in Canada, ultimately leading to the adoption of the Canadian Human Rights Act (1977) and provincial human rights codes that prohibit racial discrimination.


Conclusion

From Viola Desmond’s courageous stand against segregation to the abolition of slavery and the fight for equal housing rights, these legal milestones demonstrate the resilience and determination of Black Canadians in shaping the nation’s justice system. While progress has been made, these cases serve as a reminder of the ongoing need for advocacy, awareness, and legal reform in the pursuit of true equality.

Sources:

https://www.britannica.com/biography/Viola-Desmond/Trial

https://humanrights.ca/story/story-black-slavery-canadian-history

https://www.thecanadianencyclopedia.ca/en/article/slavery-abolition-act-1833

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Court Awards $200,000 in Landmark Intimate Partner Violence Case https://www.freedinrowell.com/court-awards-200000-in-landmark-intimate-partner-violence-case/ https://www.freedinrowell.com/court-awards-200000-in-landmark-intimate-partner-violence-case/#respond Wed, 11 Dec 2024 18:54:32 +0000 https://www.freedinrowell.com/?p=5335 In a recent decision, the Ontario Superior Court of Justice shed light on the persistent issue of intimate partner violence (IPV). In Zunnurain v. Chowdhury, 2024 ONSC 5552, the court found the father liable for multiple tortious acts against the mother, awarding $175,000 in compensatory and aggravated damages and $25,000 in punitive damages—a total of…

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In a recent decision, the Ontario Superior Court of Justice shed light on the persistent issue of intimate partner violence (IPV). In Zunnurain v. Chowdhury, 2024 ONSC 5552, the court found the father liable for multiple tortious acts against the mother, awarding $175,000 in compensatory and aggravated damages and $25,000 in punitive damages—a total of $200,000.

The claims:

The mother made 13 tort claims against the husband, including:

  • Physical and sexual assault,
  • Forcibly confining her in a hospital against her will, and
  • Sharing intimate photos of her with family and friends, violating her privacy.

She sought $325,000 in general and aggravated damages.

The Findings

The court determined that the father had committed battery, assault, and the intentional infliction of mental suffering. His testimony was deemed not credible, and his deliberate lies further undermined his position. The court emphasized that the witness stand cannot be a venue to cause further harm to the victim.

The Decision

In its ruling, the court acknowledged the severe harm caused to the Wife and the need to denounce and deter such behavior. The compensatory and aggravated damages of $175,000 were awarded for the physical, emotional, and psychological harm inflicted. An additional $25,000 in punitive damages was ordered, reflecting the court’s condemnation of the Husband’s actions and his misuse of the judicial process.

Significance

This decision reinforces the recognition of IPV as a pervasive social issue and underscores the viability of pursuing civil tort claims for IPV within family law proceedings. By awarding punitive damages, the court sent a strong message that deliberate lies and efforts to perpetuate harm through litigation will not be tolerated.

This case serves as a stark reminder of the hidden realities that can underlie seemingly “storybook” relationships. Beneath the surface lay a household marked by abuse, violence, intimidation, and fear.

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Safe Holiday Parties: A Primer https://www.freedinrowell.com/safe-holiday-partys-a-primer/ https://www.freedinrowell.com/safe-holiday-partys-a-primer/#respond Tue, 03 Dec 2024 16:10:04 +0000 https://www.freedinrowell.com/?p=5325 As the calendar moves to December, we enter what some call “the most wonderful time of the year,” with workplace holiday parties and celebrations accompanying this festive season. While these events are a time to unwind and celebrate, employers should be mindful to ensure the health and safety of employees who attend holiday parties or…

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As the calendar moves to December, we enter what some call “the most wonderful time of the year,” with workplace holiday parties and celebrations accompanying this festive season. While these events are a time to unwind and celebrate, employers should be mindful to ensure the health and safety of employees who attend holiday parties or other celebrations and gatherings.

Courts have previously found that employers may be partially responsible for negative consequences and damages from their work-related social gatherings. For example, should an intoxicated employee drive home following a workplace party, the employer may face liability for any related injury to the employee or to an innocent third party. Liability may also arise when employees or their guests at a workplace function engage in unacceptable behaviours such as sexual harassment.

Employers should take the following into account to ensure no issues arise at their holiday events:

Before the Event

  • Set consistent expectations for employee and guest behaviour and remind all team members that all workplace rules and policies are still in place during the event.
  • Ensure employees are familiar with the employer’s harassment reporting procedure.
  • Inform employees and guests that impaired driving is prohibited.
  • Offer alternative transportation options for employees and guests before the event and communicate these options to employees.
  • Designate a managerial or another high-level employee to monitor alcohol consumption to ensure no partygoers are ‘overserved.’

During the Event

  • Consider a ticket system to limit the number of alcoholic drinks partygoers can consume.
  • Arrange for a third party with SmartServe (or other training) to tend the bar and serve alcohol to guests.
  • Serve food and alternative non-alcoholic beverages (like mocktails).
  • Do not have games or activities that could encourage inappropriate behaviours or workplace injury, such as games that encourage excessive alcohol consumption.
  • Close the bar an hour or more before the end of the event.

Conclusion

Successful holiday celebrations require employers to plan carefully. By following these guidelines and implementing the above practices, employers can ensure that all attendees enjoy themselves and remain safe.

If you have any questions about safe holiday party practices, feel free to contact a member of FREEDIN & ROWELL LLP’s Labour and Employment team.

We wish you and your families a joyous holiday season!

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New Potential Legislation Supporting Families and Women in the Trades https://www.freedinrowell.com/new-potential-legislation-supporting-families-and-women-in-the-trades/ https://www.freedinrowell.com/new-potential-legislation-supporting-families-and-women-in-the-trades/#respond Thu, 28 Nov 2024 15:55:34 +0000 https://www.freedinrowell.com/?p=5321 Ontario’s provincial government will soon introduce legislation that if passed, will support families and assist women in entering and remaining in the skilled trades. Supporting Families This legislation will propose a new 16-week job-protected leave under the Employment Standards Act, 2000 (“ESA”) for adoptive parents and parents through surrogacy. These amendments would also align with…

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Ontario’s provincial government will soon introduce legislation that if passed, will support families and assist women in entering and remaining in the skilled trades.

Supporting Families

This legislation will propose a new 16-week job-protected leave under the Employment Standards Act, 2000 (“ESA”) for adoptive parents and parents through surrogacy. These amendments would also align with upcoming federal changes to create employment insurance (EI) benefits for adoption. The government also intends to propose a new 27-week long-term illness leave for employees unable to work due to a severe medical condition as defined by a medical practitioner, such as cancer, multiple sclerosis or Crohn’s disease. If passed, this would be one of the longest provincial leaves in Canada.  

Women in the Skilled Trades

In legislation from earlier this year, the government now requires menstrual products on construction sites with 20 or more workers and where the project is expected to last three months. In continuing the trend of supporting women in the skilled trades, this newly proposed legislation will expand the explicit requirement for properly fitting PPE for women in the construction sector that the government included in the Working for Workers Act, 2023 to include all sectors. Recent research published by the Canadian Standards Association (CSA) found that 50% of women said their PPE does not fit properly, 43% said it is uncomfortable to wear and 35% said the selection of women-specific PPE is inadequate.

Ontario is also proposing specific requirements on employers that will increase accountability and transparency with washroom cleaning records to ensure workers have access to clean washrooms. These amendments would build on the new duties for employers and constructors related to clean washrooms passed under the Working for Workers Five Act. Half of the Ontario Building and Construction Tradeswomen 2022 survey respondents cited better washroom facilities as needed to make construction more appealing to women.

Should you or your organization have any questions about these potential amendments and how they may impact your workplace, please get in touch with a member of FREEDIN & ROWELL’s employment law department.

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