Legal Blog

Upset

In theory, judges make findings of fact, apply the law, and make a decision. In practice, that may happen on occasion. However, we feel that, in other cases, it may be more likely that judges listen to the evidence, determine whether there is an injustice, and apply the law to support the decision they wish to make, a decision that rights a perceived wrong.

We review two cases in which the presiding judge was obviously not pleased with the conduct of some of the parties: Laski v. Chan [2003] O.J. No. 3003 (S.C.J.) and Lingg v. Mills [2003] O.J. No. 3358 (S.C.J.).

Missing Chattels

It was supposed to be a simple real estate transaction. The purchaser in the Laski case bought a house with specified chattels to be included, chattels that, in the agreement, were to be the “same as viewed January 15, 2000.” Also, the property was supposed to be “in clean condition.” Although not specifically warranted in the agreement, the vendors assured the purchasers that the systems of the house were of good quality and worked.

The purchasers had the right to inspect the house a number of times before closing and exercised that right. They had their contractor view the house for possible major deficiencies. They went in to take measurements. They attempted to video the house during one inspection so that they could determine the colour scheme for decoration purposes, but the vendors refused to allow it.

The transaction closed and the purchasers found that not everything was as it should have been. The judge found as a fact that:

1.   The comparatively new stove, oven, washer, dryer, and downstairs refrigerator had been replaced with older, poor-quality models.

2.   The draperies had been switched.

3.   The sprinkler system did not work. One control was cut and welded shut so that it could not be turned on.

4.   The “working” sauna, which the purchasers were not able to view at the time of the agreement because it was filled with boxes, had no heating system; at best, it was a big cedar closet.

5.   The central vacuum system needed repair.

There were other minor irritants (e.g. the place was left in a deplorable state) but no damages were awarded for these, so we will not comment upon them.

You Lie

It is not often that a trial judge calls a witness a liar. It happened here.

It seems that the male vendor and his real estate agent prepared a list of chattels that were set out in the agreement and described them in the same manner as the chattels that were ultimately left in the house on closing. Each of the male defendant and real estate agent testified that they prepared and dated that list on January 22, 2000, one day after the parties signed the agreement. The problem was that the list was drafted on the back of a multiple listing record for the property in dispute. The date of the record was March 4, 2000 and it referred to the contract date as February 9, 2000. The judge therefore concluded that the list was concocted after March 4, 2000 for “ulterior purposes.”

The female defendant stated that she used the sprinkler system in the summer before the sale; all she had to do was push a button and it worked. The purchasers testified that there were seven switches to operate the system and had the bills for the repairs to the control system and the split pipes.

The judge made some choice comments about the vendors and their witnesses:

“The most egregious and shocking misrepresentation, however, is that of the List, a document prepared by (the male vendor and the real estate agent), the execution date about which they both lied to the Court.”

The female vendor “was untruthful in her evidence about the draperies and … her operation of the Sprinkler System.”

Fraud

The judge found that the conduct of the vendors was deliberately dishonest.

She assessed at $14,300 the damages for repairs to the systems and for new chattels, less a 15% discount because the included chattels were not supposed to have been brand new.

The vendors had to try very hard to rack up those damages for something as minor as switched chattels. However, in the greater scheme of things, for an action requiring a 7-day trial, that amount is chicken feed. Accordingly, the judge sweetened the pot a bit by imposing punitive damages of $10,000. She stated, “In my view the conduct of (the vendors and their agent) is so extreme in its nature that it is deserving of full condemnation and punishment.” We expect that when it comes to costs, the judge will not be charitable to the vendors.

Accounts

In the Mills case, the lawyer had failed to deliver an account for quite a while, like 22 years. When he did deliver an account, it was for over a million dollars and included interest from 1979 of $533,000.

The lawyer was acting as a trustee, solicitor, and, in his own mind, property manager for a group of non-resident German investors on a property development that ultimately never came to fruition. The only asset of value was the land.

The solicitor had his closest working relationship with one main investor. Unfortunately, that investor died in 1992. After that, the other investors started requesting an accounting and an account; the solicitor became antsy about payment of an account that he had never rendered and attempted to gain security over the land.

Ultimately, the matter was dealt with in a 6-day trial. The judge noted that “the trial was conducted as if it were designed to demonstrate which of the parties behaved more inappropriately… The issue of the behaviour may be interesting but not material.”

The judge had some choice comments regarding the account ultimately rendered.

“Frankly (the solicitor) does not know exactly how much his firm is owed. The reason he does not know is because he never took the time and trouble to carefully prepare and submit to all interested parties comprehensive statements of account showing balances owing on a regular basis and in a timely fashion.”

“Even in the preparation of the January 2003 account, it is clear that no effort was made to provide to these foreign applicants and the court an intelligible and well-documented statement of account.”

“Even the January 2003 statement of account is submitted apparently on the basis that the Court ought to do its own research of interest rates under the Solicitors Act for the last twenty-two years and ‘do the math’ itself.”

Award

The judge did the best he could. He agreed that the solicitor had continually been providing legal services and had done some high quality legal work. His criticisms had much more to do with process than with the quality of work. He awarded $450,000 for the full amount of the work over the period, deducted $240,000 that had already been paid, and added GST for post-1990 work. He awarded nothing for interest.

As an aside, he removed the solicitor as trustee for the property.