Several weeks ago, the Ontario Superior Court of Justice issued a ruling on a case entitled In the Matter of the Sandra Thompson Family Trust dealing with a private dispute and an associated complaint to the Law Society of Upper Canada. 

The case involved the administration of a family trust set up by one Elizabeth Thompson who subsequently died.  The beneficiaries of the trust were her daughters, Sandra and Nancy.  After her mother’s death, Sandra Thompson filed a complaint with the Law Society concerning what she believed to be serious mismanagement of the trust by one of the trustees, a lawyer. 

Before the complaint to the Law Society could be the dealt with, litigation arose between the lawyer/trustee and his co-trustee on the one hand, and the Thompson daughters on the other.  The essence of the dispute had to do with the fees being charged by the two trustees.  Continue reading →

Courts are normally very careful about preventing Plaintiffs from obtaining anything that looks like a double recovery.  However, a case decided by the Ontario Court of Appeal a few months ago called Krawchuk v. Scherbak is a rare example of exactly that. 

In this case, Mrs. Krawchuk bought a house in Sudbury in 2004 for about $110,000.  At the time that she completed the transaction, as was frequently done at that time and as is almost always done today, she purchased title insurance. 

Soon after she moved in, she discovered serious structural problems.  The City of Sudbury was contacted and it issued a work order requiring the rectification of the structural problems which were discovered.  The work to be done was extensive.  It required the removal of the house from its foundation, the excavation of its cement floor, the replacement of the subsoil and installation of new footings, foundation and cement floor, and then the replacement of the house on its new foundation.  Additional repair work was required because of the damage caused by moving the house to the extent necessary to make the repairs.  In fact, the cost of rectifying the problem amounted to over $191,000, almost double the amount she had paid for the house.

This represents yet another excellent reason to purchase title insurance whenever it is available.

Continue reading →

or
Why I am happy I do not practice real estate law…

One of the more stressful situations that arises for people buying or selling real estate, and their lawyers, is the one where an Agreement of Purchase and Sale contains an inaccurate statement and a purchaser threatens to terminate the transaction unless he gets an abatement in the purchase price. 

Unfortunately, decisions about closing often have to be made very quickly and often without a fully developed set of facts to consider.

At this point, it could well be a matter of who blinks first.  If the transaction aborts, a lawsuit ensues, and the matter goes to trial, the party considered by the court to have been in the wrong could face a massive damages award.  Unfortunately, decisions about closing often have to be made very quickly and often without a fully developed set of facts to consider. 

Many of these circumstances come down to an interpretation as to whether the statement in dispute is to be considered a “condition” or a “warranty”.  Continue reading →

Arbitration is becoming an increasingly popular way of resolving disputes.  This trend is probably due, in large measure, to the increasingly common practice of including arbitration clauses in contracts.  Nevertheless, misunderstandings about arbitration continue to be prevalent, even among the most sophisticated business people.  My previous post consisted of a video in which I discussed two of these myths.  Here are some more.  This article will attempt to identify and explain a number of common myths about arbitration.

Myth #3:  Arbitration is not available in commercial disputes in the absence of an arbitration clause

Where a contract provides that disputes under the contract are to be resolved by arbitration, the parties have no choice but to arbitrate such disputes unless they agree to amend the contract, in effect, by deleting that clause.

However, even in the absence of an arbitration clause, or a written contract, for that matter, it is always open to parties to agree to arbitrate their dispute.  All that is required is for both parties to agree on the scope of the arbitration and the identity of an arbitrator.  Most of the other procedural details, even if not determined at the outset, can be worked out during the course of the matter, with or without the participation of the arbitrator.  Continue reading →

I have developed a list of commonly held myths about arbitration which I would like to share with you.  I have prepared a video in which I discuss a few of these myths.  Please click on the link below.

http://www.youtube.com/watch?v=Y_mZnOUmnhs

On November 8, 2011, the Ontario Court of Appeal released its decision in the case of Schneeberg v. Talon International Development Inc. (2011 ONCA 687), a case involving the sale of a condominium unit to be built in the Trump International Towers development in downtown Toronto, Ontario. 

Mr. Schneeberg bought the unit to be built under an agreement made in 2004.  The agreement provided that the closing would take place on March 20, 2009, assuming that it was ready for occupancy.  It was not ready on that date, and the vendor attempted to unilaterally extend the closing date to give itself more time to finish it.  Eventually, Mr. Schneeberg decided to terminate the transaction and brought an application to the court for the return of his deposits.  The application judge granted that relief, and the vendor appealed to the Court of Appeal.

Purchasers must be given some reasonable opportunity to terminate transactions if delays are excessive.

The fact that newly constructed condominium units are frequently not ready for occupancy on the date originally contemplated by the parties and reflected in the Agreement of Purchase and Sale is well known to anyone who has ever been involved in this type of transaction.  The Court of Appeal made the following observations:

“There is no dispute over the fact that purchases and sales of condominiums are commercial transactions within an industry uniquely plagued by delays.  These delays are caused by the market, as the sale of units in a new development dictates the availability of financing, by the vagaries in the construction process, and by the complexities associated with the registration process required by the Condominium Act.  Delays in the closing of condominium units are expected.  They are part of the business of developing condominium projects and, it follows, part of purchasing a newly-constructed unit.”

Continue reading →