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 →

My partner, Arnie Herschorn, recently won a summary judgment motion in an interesting case involving a latent defect in a house.  At one time, the law permitted a person to sell a house that was deficient in some way, and even in a significant way, without disclosing the defect.  This fell under the framework of the term “caveat emptor” or “buyer beware”. 

It is possible for a court to recognize a disclosure obligation where certain types of convicted criminals live in the area, or there may be some other attribute that might impact a purchaser generally or a particular purchaser specifically, i.e. one with young children.

The law has come some distance since those days and now may well recognize an obligation not only to disclose latent defects affecting the structure of the dwelling, in some circumstances, but even defects having nothing to do with the integrity of the building itself but relating only to other circumstances affecting the property that might influence a purchaser.

In Arnie’s case, our clients purchased a home north ofTorontoin the summer of 2010.  They were a young couple with two young children.  After closing but before they moved in, they discovered that a man convicted of possession of child pornography resided across the street.  As a result, they did not consider that the house they had just purchased would be a safe place to live and they took action against the vendor and the vendor’s real estate agent, arguing that this information should have been disclosed to them.  Apparently, this fact was common knowledge in the neighbourhood.

The vendor brought a motion for summary judgment to dismiss the action on the basis that it could not possibly succeed based on the law ofOntarioas it present stands.  Arnie opposed the motion and won.  The judge ruled that an obligation to disclose this information, which might reasonably be seen as making the house uninhabitable by a purchaser with young children, might well exist in law and certainly deserved to be reviewed at a trial. 

Continue reading →

I don’t do criminal work, but I do enjoy reading and talking about criminal law cases.  I find that people generally get a charge out of it (no pun intended).  Mention O.J. Simpson at a cocktail party, and you’ll see what I mean.  This is particularly true when the discussion turns to the topic of plea bargains.

As difficult as it may be to accept, the fact is that our system could not possibly function without the use of plea bargains.

 Several months ago, the Supreme Court of Canada decided the case of R. v. Nixon ([2011] S.C.J. No. 34).  In that case, Ms. Nixon was charged with dangerous driving causing death, impaired driving and other related offences.  Her lawyer signed a written agreement with the Crown providing for a plea bargain:  Nixon would plead guilty to a charge of careless driving, and all other charges would be dropped. 

 When the agreement came to the attention of the Assistant Deputy Minister (ADM), the ADM decided that this deal was not in the interests of justice and instructed the Crown to disregard the agreement and proceed to trial.  Nixon then brought an application under the Charter of Rights to have the Court require the Crown to adhere to the agreement.  The judge hearing the application agreed with Nixon and found that the Crown’s withdrawal from the agreement was an abuse of process.  The case ended up in the Supreme Court of Canada. Continue reading →

Defamation is an intentional tort that involves a false communication harming a person’s reputation or tending to lower the regard in which a person is held. 

For the tort to arise, the defamatory statement must be communicated or published.  To prove publication, a Plaintiff has to establish that the Defendant has conveyed the defamatory meaning to at least one third party, who has received it.

Defamation is tricky at the best of times. The internet has made defamation cases even trickier.

There are now a number of cases that have been decided at a reasonably high level of court dealing with defamatory remarks made on the internet, both in articles and on blogs.  Most of these decisions raise the same issues as are raised in the context of newspaper articles.  One unique feature of the internet as compared to newspapers, however, is the ubiquitous hyperlink.  Where does that fit in?

Continue reading →

A decision released on October 12, 2011 in Ontario Superior Court shows the dangers involved in ignoring a lawsuit brought against an Ontario resident in a foreign jurisdiction.

In Monte Cristo Investments LLC v. Hydroslotter Corporation et al., Mr. Justice Campbell dealt with a case in which an Ontario resident, Jean-Claude Bonhomme, was sued by Monte Cristo Investments LLC in California for breach of contract and various torts. The lawsuit related to money that Monte Cristo had invested in the operation of certain oil and gas wells in California.

Monte Cristo sued a number of local entities and individuals as well as Mr. Bonhomme.

If you are sued in a foreign jurisdiction, you are taking an enormous risk if you don’t hire a lawyer in that jurisdiction and defend yourself there.

Mr. Bonhomme did not defend the claim against him and, ultimately, Monte Cristo obtained a sizeable default judgment against all of the Defendants including him.

At that point, it appears that Mr. Bonhomme began to take the case seriously. He retained a California lawyer to bring a motion to try to set aside the judgment against him. He was not successful.

Continue reading →

The recent case of Rainville vs. MTCC No. 1056 et al. provides a useful reminder about how important it is to be careful when naming defendants in a lawsuit.

It is not uncommon for a plaintiff who feels that he has a complaint to sue everyone he can think of who might possibly have had some role to play in the events that gave rise to the complaint.

Sometimes you simply do not have a choice. You know that someone has done something wrong to you but you cannot be sure as to who is actually responsible.

Sometimes you simply do not have a choice. You know that someone has done something wrong to you but you cannot be sure as to who is actually responsible.

Sometimes this is a tactic to bring as many cheque books to the bargaining table as possible in the hope that the more people contribute, the more easily one’s objective in terms of a financial recovery can be met.

Unfortunately, all of this will backfire if the case is one of those few that actually does get to trial and the claim is dismissed as against one or more of the various defendants.

In 1997, Ms. Rainville purchased a condominium townhouse in Etobicoke near Lake Ontario. On inspection and based on the description of the townhouse in the real estate listing, it seemed to have three floors of living space.

After she closed the deal, she discovered that in fact, the townhouse only consisted of two floors.  The third floor, which the previous owner had used as living space, was actually part of a common area.

This meant not only that she had overpaid for the property but also that she had considerably less living space than she had thought.

To make matters worse, she found that the roof of the unit leaked and that water was damaging not only the items she had moved into the third floor (which didn’t actually belong to her) but also other floors.

She sued her lawyer, the property management company, various individuals employed by the property manager, the Condominium Corporation, and members of the Board of Directors of the Condominium Corporation. Initially, she also sued the vendor of the unit although fairly early on, for reasons which were never explained, she abandoned that lawsuit.

Continue reading →

The current volatility in the equity markets has led to a number of enquiries from people dissatisfied with the services provided by their investment advisors. In particular, I have been asked a number of times about the possible liability of investment advisors for investor losses.

This issue is not new. It seems to arise every time the stock markets take a dip, especially if the dip is prolonged.

Obviously, every case is different but there are some general principles that can be gleaned from the jurisprudence.

The cases differentiate between the type of broker who simply makes purchases and sales on the instructions of clients, and the type of broker who appears to be offering guidance and advice on which an investor can rely.

A broker who acts basically as an order taker probably does not have any responsibility for the wisdom of the transactions involved.

A broker who acts basically as an order taker probably does not have any responsibility for the wisdom of the transactions involved. If that broker is asked to give an opinion and does so but makes it clear to the client that the opinion is merely a personal opinion and is not the result of extensive research by the broker or his brokerage, it is going to be difficult to pin liability on the broker.

However, these days, most brokers try to develop business by offering guidance using phrases like “growing and managing retirement wealth” or “keeping investments safe”. Sometimes brokers characterize themselves as financial advisors with extensive investment experience.

The cases are clear that such brokers have to expect that their advice is going to be relied upon, and will have to accept responsibilities well beyond that of the order taker. They take on a duty to provide competent professional advice upon which clients, especially experienced ones, can rely completely.

In those circumstances, a broker or any financial advisor will be treated like any other professional advisor, including doctors, accountants and lawyers. The broker will be expected to take reasonable steps to ensure that investors are aware of the available options and of the potential benefits and risks associated with each one.

Continue reading →