Recent court decisions

By Donald Lapowich

A 79-year-old woman agreed to sell farm land by means of a lease “option agreement”.  The price was divided between the value of the land and house. The purchase price would be paid over seven years, with no interest and most of the monies payable in the final year only.

The woman was to be allowed to live in the house for her lifetime, and it was her obligation to pay taxes and utilities.

When the plaintiff sued to set aside the transaction and added her solicitor (for negligence), the Saskatchewan court held:

(a) The contract was in simple terms; easily understood by a lay person;

(b) The woman signed the agreement before she met with lawyer;

(c) The woman understood all aspects.

The claim was dismissed based simply on the woman’s comprehension of all the terms and risks involved.

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I previously reported the case of the purchaser, a dentist, buying property for a practice that by bylaw required eight parking spaces. No practice could be run without such spaces, and it turned out that the eight spaces could not be physically accommodated on the site.

The plaintiff previously sued his lawyer and settled for an amount of damages. He then sued the selling agent, buying agent and vendor.

The Ontario Court of Appeal confirmed apportioned liability to each of the defendants, which is often the case when “things go wrong”.

1. The lawyer (although he settled) was found 50 per cent liable for not identifying that on a Boulevard Parking Agreement, only one parking spot was available on the east side because of a private agreement.

2. The purchasing agent was liable 20 per cent for failure to make his own inquiries to confirm “use” as a dental office and by simply relying on the vendor’s agent. He was also liable for the failure to note the difference in surveys and go to city hall to investigate, and for failing to draft a “conditional” purchase agreement.

3. The listing agent was 20 per cent liable for failing to inquire with the owner and city hall about actual lot size, and review survey data sufficiently to conclude further inquiries were needed from city hall files.

4. The vendor was 10 per cent liable for the cavalier, careless, wanton failure to ask rudimentary questions of his lawyer when noting conflicting information about on-site parking.

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Courts are very cognizant that proper settlements should not be easily set aside.

The owner of a cottage signed papers conveying that property to the appellant. But the owner had second thoughts and sued to set aside the conveyance and then orally agreed to take a deed back, in exchange for $10,000.  The owner then reneged from settlement, attempting to rely on Statute of Frauds requiring transfers (agreements) for land to be in writing.

The New Brunswick Court of Appeal held that the oral settlement fell outside of the Statute and was therefore enforceable as a “settlement” for value.

Donald H. Lapowich, Q.C. Hon. FRGD is a partner at the law firm of Koskie, Minsky LLP where he practices civil litigation, with a particular emphasis on real estate litigation. He acts for professionals including lawyers, real estate agents, insurance brokers/agents and dentists.