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Legal Blog: Lawyers’ Issues

Aug
01
2022

Uncertainty

Posted in Lawyers' Issues

The Mortgages Act contains many provisions governing the relationship between mortgagors and mortgagees and, additionally, some provisions protecting purchasers of property under power of sale. Sometimes, a breach of a provision protecting a mortgagor can create havoc with what would normally seem to be an ordinary real estate transaction. This was demonstrated in 2544176 Ontario Limited v. 2394762 Ontario Inc. 2021 ONSC 3067.

However, the application judge’s decision in 2544176 Ontario Limited v. 2394762 Ontario Inc. 2021 ONSC 3067 was overturned by the Ontario Court of Appeal, after this case comment was written, holding that the mere fact that a mortgagee’s rights are suspended, does not eliminate its ability to provide good title. An amended discussion of the case will be available in early October 2022 under the collection category.

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Jun
01
2022

Holograph Will

Posted in Lawyers' Issues

A holograph will is referenced in section 6 of the Succession Law Reform Act. Unlike a normal will, which has specific formalities such as the signatures of two witnesses, a holograph will may be valid without any formalities if it is made wholly in the testator’s own handwriting and the testator signs it. A holograph will, however, is no different from an ordinary will in that the testator must have a sound disposing mind (i.e., have testamentary capacity to make the will) and must not be signing the will as a result of undue influence by another person. Some of these issues were dealt with in Re Lacroix Estate 2021 ONSC 2919 and Joy Estate v. McGrath, 2022 ONCA 119.

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Apr
01
2022

Writs Bind

Before closing a land transaction, real estate lawyers search for writs of execution that may be filed against the vendor. Why? Because writs against a debtor will bind the lands of that debtor and a purchaser will take title subject to those writs. But do all writs bind the land? That question, which most real estate lawyers assumed had an affirmative answer, was dealt with in Dhatt v Beer 2021 ONSC 770 (SCJ).

A knot tied with a rope.

Mess

It started as a simple real estate transaction and turned into the case from hell. The vendors decided in their wisdom not to close the transaction. The purchasers sued and obtained a judgment for specific performance and an order for costs to be paid from the purchasers’ purchase price. The vendors did not like this decision and appealed it. The previous lawyers for the vendors were also not pleased with this decision and, more importantly, were not pleased that the vendors had not paid their fees.

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Feb
01
2022

Hardball

Posted in Lawyers' Issues

A trial judge has discretion to award costs of the litigation process. Usually, that award would be to the successful party, but not always. May a trial judge refuse to award costs to a successful defendant because that defendant was insured, refused to accept any settlement before trial, or was “known” to generally play hardball in its defences?  This question was answered in Przyk v. Hamilton Retirement Group Ltd. 2021 ONCA 267.

A baseball on a baseball field.

Merits

The plaintiff had slipped and fallen on a sidewalk on the grounds of a retirement home where she resided. She sued the owner of the retirement home for negligence and breach of the Occupiers’ Liability Act. The parties agreed on damages and the trial proceeded before a judge and jury on liability alone. The jury found no liability on the part of the defendant and the action was dismissed against it. The defendant requested an award of costs against the plaintiff. Actually, to be more specific, it requested its costs only to the extent of an insurance policy that the plaintiff had taken out for the very purpose of indemnifying her against an award of costs if she were unsuccessful in the action. The defendant was not seeking any award of costs against the plaintiff personally.

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Dec
01
2021

Honour

Let’s discuss writs of seizure and sale aka writs of execution, formerly known – if you have been around far too long – as writs of fi fa (short for fieri facias – translated from Latin as “cause to be done”). A creditor may enforce a monetary court order by requesting the court to issue a writ of seizure and sale. Once the court has done so and the creditor files the writ with a sheriff of any jurisdiction in Ontario, that writ binds the debtor’s lands in that jurisdiction. For example, a writ filed with the Sheriff of Peel binds the lands in Peel, but does not bind lands in Toronto. In essence, the debtor is not able to sell or mortgage lands that a writ binds until the court order is fully paid.

A pair of handcuffs and a key.

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Oct
01
2021

Overreach

Over the years, agreements to purchase new homes and condos have become far lengthier than they used to be. Every additional provision usually shifts risk to and hurts the purchaser and protects and benefits the builder. The latest provision that has popped up deals with interest. It says, for example: “Any monies owing by the Purchaser not paid when due, shall accrue interest at the rate of x% per annum compounded monthly until paid.” x% was set at 20% in the two cases that we are about to discuss: Burkshire Holdings Inc. v. Ngadi 2021 ONSC 2550 and Madison Homes v. Shi 2020 ONSC 7810.

An open house sign on a lawn.

Breach

In each case, the purchasers did not close and the builder re-sold the property and sued for damages. In each case, the purchasers put up a spirited defence as to why they should not be held liable for the failures to close. As expected, given the track record of defaulting purchasers, these defences were unsuccessful; they were simply worn out defences that have been shot down in flames over recent years.

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Aug
01
2021

Frustration (2)

The COVID pandemic has spawned a number of cases in which one of the parties to a contract claims that the contract has been frustrated so that the party is no longer bound by its contractual obligations. From what we have read, this argument has not had much success. One such case is FSC (Annex) LP v. Adi 64 Prince Arthur LP 2020 ONSC 5055.

A pile of shredded documents.

Buy-Sell

A developer and a private equity investor firm entered into a joint venture to rezone and redevelop a Toronto property into condominiums. The developer had a 20% interest; the investor had an 80% interest. The deal was not unusual for the developer; it tended to take minority positions in projects in which it was also able to receive a management and development fee.

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Jun
01
2021

Presumptions

Posted in Lawyers' Issues

How important are beneficiary designations found in insurance policies and registered plans such as RSPs, RIFs, and TFSAs? In one regard, they are very important. They form a contract between the owner and the insurer/plan trustee allowing the insurer/trustee to pay the proceeds directly to the beneficiary with impunity. But does that mean that another frustrated beneficiary cannot claim that the designation itself was not meant to be a gift to the beneficiary, but, instead, was to be held by the beneficiary in trust on behalf of the estate? That was the issue discussed in Calmusky v. Calmusky 2020 ONSC 1506 (SCJ).

Two puppies pulling on a rope.

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Apr
01
2021

Discretion

Posted in Lawyers' Issues

Contracts often give one party discretion to make decisions that will affect the other party. For example, employment contracts can give the employer a discretion as to the quantum of a bonus. A lease can give the landlord discretion as to whether to accept a tenant’s request to sublease the premises. Often, one sees the words “absolute discretion” or “absolute and sole discretion.” Do these words mean that the party with discretion can exercise that discretion in any manner the party sees fit? The answer, in prior jurisprudence and according to the Supreme Court of Canada in Wastech Services Limited v. Greater Vancouver Sewerage and Drainage District 2021 SCC 7, is no.

A chess piece knocking another chess piece off the board.

Contract

Wastech, a contractor engaged in waste transportation and disposal, contracted with Metro, the entity administering waste disposal in Metro Vancouver Regional District. The parties entered into a long-term contract that discussed, among many other things, which waste disposal sites would be used and who would determine the quantity of waste going to those disposal sites. The contract gave Metro the “absolute discretion” to determine the minimum amount of waste that would be transported to one particular waste site in a given period.

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Feb
01
2021

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).

A folded newspaper on a table.

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.

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