Legal Blog

HUDAC (ONHWP) Revisited

In our October 1996 newsletter, we reported on the case of Beer v. Townsgate I Limited, a 1995 decision of Madam Justice Chapnik. She had decided that if a developer had not registered a property under HUDAC prior to sale, the subsequent agreement to sell the property was unenforceable because it was illegal. The fact that the property had been registered under HUDAC after the agreement and before closing did not save the contract.

This decision was contrary to a previous 1994 decision of Madam Justice Gotlib and was not followed in a 1996 decision of Mr. Justice Davidson. The Beer case was appealed by the developer. The Court of Appeal (at 1997, 36 O.R. (3d) 136) allowed the appeal and held that the agreement was enforceable.  The court stated as follows: “I think public policy favours that contracts should not be rendered unenforceable merely because of technical deficiencies”.