Legal Blog:

Real Estate Misrep

The headline to the Toronto Star story started with: “A century of Canadian legal precedents dealing with listings describing homes for sale were reversed late last year by an Ontario Court of Appeal decision that is being seen as one of the year’s most significant real estate law rulings.” The case is Issa v. Wilson 2020 ONCA 756. Aside from the bad grammar (can you spot it?), the problem with the headline is that its main premise is not correct; further, we doubt that the decision is overly significant, much less the most significant. The article’s other problem was a lack of depth of analysis (485 words, probably all that the editor allowed).

What Happened

The purchaser retained a real estate agent to find him a suitable house in which he could live with his parents and three sisters. The agent showed many houses to the purchaser and all were larger than 2,000 square feet, the minimum size that the purchaser felt could accommodate his family. Finally, the agent showed the purchaser a house (the “House“), for which the agent was also the listing agent. The agent told him that the House was 2,100 square feet and, in doing so, the agent relied on information from the vendor and information contained in a previous listing for the House. The listing agreement that the agent drafted for the House noted that its size was between 2,000 square feet and 2,500 square feet. The agent did not conduct his own measurements and admitted that he was negligent in failing to measure or verify the size of the House.

Reasonable

Courts in British Columbia have consistently held that, to determine the start date for a limitation period, it is unreasonable to expect a claimant to commence a fraudulent conveyance action until the claimant has obtained judgment based on the underlying contract or tort action. Just because the fraudulent conveyance action is technically available before the claimant has obtained a judgment in the underlying action, does not make it a reasonable manner in which to proceed.

Jasmur Holdings Ltd. v. Callaghan, a 2019 decision of the British Columbia Supreme Court is the latest case in this line of decisions.

Backdate

No, we are not talking about some commercial document. We are talking about an order of the court and whether the order is to be effective on the date it is made or an earlier date. If effective as of an earlier date, it is said to be effective nunc pro tunc. This, of course, is a Latin phrase (one of the few times that Latin still rears its ugly head in legal parlance) and means “now for then.” The applicability of the use of this concept was the main issue in Thistle v. Schumilas, a 2020 decision of the Ontario Court of Appeal.

Bankrupt

The ability to assign into bankruptcy is wonderful for unfortunate debtors who have no way to claw themselves out of debt. But it is a double-edged sword. All of the bankrupt’s property, whether owned as of the date of the bankruptcy or subsequently acquired before the bankrupt’s discharge, passes to and vests in the bankrupt’s trustee in bankruptcy. The Bankruptcy and Insolvency Act defines property very widely. On occasion, this passing of property has unintended consequences. The Thistle case illustrates one of them.