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Assignment - General. Infinite Construction Development Ltd. v Chen
In Infinite Construction Development Ltd. v Chen (Div Court, 2023) the Divisional Court considered factors that militated against a contractual assignment, here in a Construction Act (CA) case where the appellant claimed to have taken an assignment from a contractor and thus taken on a contractor's CA lien rights:[15] The “contractor” in this case was 10305391 Canada Inc. The plaintiff alleges that it is a “contractor” because it took an assignment of the contract from 10305391 Canada Inc. The issue before the Associate Justice was whether this claim should go to trial. In concluding that it should not, the associate Justice found as follows:(a) the plaintiff did not plead assignment of the contract;
(b) the plaintiff variously characterized its relationship with 10305391 Canada Inc. as one of “agency” or “representation”;
(c) from October 2019 to February 2021, the Contractor invoiced Chen, and Chen paid the Contractor, for contract work;
(d) the alleged assignment agreement was not reduced to writing until September 2021, after the liens were registered and after Chen requested a copy of the agreement between Infinite and the Contractor;
(e) notice of the alleged assignment was not provided to Chen until September 2021.
(f) no evidence was led from the Contractor as to its role in the project, and whether or when its role changed. [16] Findings (a) to (d) were sufficient to ground the Associate Justice’s decision. I agree with the appellant that the Associate Justice’s scrutiny of the record in respect to ground (e) – upon which the Associate Justice placed some weight in his analysis – should have led to a conclusion that there was a triable issue in respect to whether the Contractor had really agreed to an assignment at any point, and how the Contractor viewed the arrangements at various points during the contract performance. However, this does not mean that there was a triable issue as to whether there was an effective assignment of the contract.
[17] Two issues were raised that were not decided by the Associate Justice – alternative arguments advanced by Chen: (a) that the alleged assignment was void as contrary to the Statute of Frauds; and (b) that the alleged assignment was ineffective in any event, by reason of the failure to give notice of the assignment to Chen and the effect of s. 53(1) of the Conveyancing and Law of Property Act, RSO 1990, c. C.34. Both arguments are tenable, but I do not find it necessary to decide them in light of my conclusion that the basis for decision grounding the judgment of the Associate Justice discloses no reversible error. . Attorney General of Ontario v. Hazout
In Attorney General of Ontario v. Hazout (Div Court, 2023) the Divisional Court, in considering the merits element of a motion to extend time to commence an appeal, considers whether an assignment to the Crown was effective to avoid an otherwise expired limitation period (this case involved the old Limitations Act, the new one binds the Crown):[13] Counsel for Hazout submits that the appeal has merit as there are at least arguable errors in the Merits decision. One asserted error is the Deputy Judge’s rejection of the application of the Limitations Act 2002, S.O. 2002, c. 24, or its predecessor, the Limitations Act, R.S.O. 1990, c. L.15, to bar the action. This action would have been statute-barred for being out of time if it had been brought by the Bank of Montreal; however, the debt was assigned to the Crown which was not subject to the limitation period in s. 45(1)(g) of the old Limitations Act: Attorney-General for Ontario v. Watkins, 1975 CanLII 375 (ON CA). Similarly, as the Deputy Judge found in this case, s. 16 of the current legislation, which came into force in 2004, exempts the Crown from limitation periods in claims relating to “the administration of social, health or economic programs” which include the recovery of “economic development loans.”
[14] A fundamental maxim of the law relating to assignments is that “you cannot assign what you do not have”: First City Capital Ltd. v. Petrosar Ltd.,; Casselman Financial Underwriters Ltd. et al., Third Parties, 1987 CanLII 4434 (ON SC), 1987, 61 O.R. (2d) 193 (H.C.) In the context of arbitration clauses, this Court has stated that “a party seeking to enforce assigned rights under an agreement can only do so subject to the terms and conditions embodied therein”, citing a long line of authority: ABN Ambro Bank Canada v. Krupp Mak Maschihnenbau GmbH, 1996, 135 D.R.L. (4th) 130 (Div. Ct.). I have not been provided with any authority that addresses whether the Crown, as an assignee of a debt, may then avoid the limitation period that otherwise would have applied to a private lender. Thus, I conclude that there is at least one arguable issue and therefore Hazout has satisfied me that the appeal has merit. . Peace River Hydro Partners v. Petrowest Corp.
In Peace River Hydro Partners v. Petrowest Corp. (SCC, 2022) the Supreme Court of Canada, in the course of making an example in a case about insolvency and arbitration, states a fundamental feature of assignment:[106] .... It is a “fundamental” and “universal commercial legal principle” that an assignor may not assign contractual rights in such a way as to “convey the benefits and nullify the burdens”. Stated differently, a party seeking to enforce assigned rights under an agreement “can only do so subject to the terms and conditions therein”, including the condition that disputes are to be resolved by arbitration (ABN Amro Bank Canada v. Krupp Mak Maschinenbau GmbH (1996), 1996 CanLII 12449 (ON SCDC), 135 D.L.R. (4th) 130 (Ont. C.J. (Gen. Div.)); see also Casey, at ch. 3.5.1; Petro‑Canada v. 366084 Ontario Ltd. (1995), 1995 CanLII 7418 (ON SC), 25 B.L.R. (2d) 19 (Ont. C.J. (Gen. Div.)), at para. 55). . Urmila Holding, Inc. v. Anand Holdings Inc.
In Urmila Holding, Inc. v. Anand Holdings Inc. (Ont CA, 2021) the Court of Appeal considered nemo dat, the obvious legal principle that one cannot assign an interest that one does not have:[32] The application judge bolstered his conclusion through his reliance on the nemo dat principle. In Green v. Green, 2015 ONCA 541, 387 D.L.R. (4th) 512, in the family law context, this court said, at para. 53: “at common law, an assignor may not assign more than it has, or put differently, nemo dat quod non habet, no one gives who does not possess.” Applying this principle, the application judge held that, although the exclusive usage right belonged to Urmila as the owner of Unit 20, as a tenant, Dr. Anand had a limited right to assign the exclusive usage for as long as he was entitled to the benefit of the exclusive use under the lease.
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