By Donald Lapowich

The plaintiff in an Ontario action asked for a declaration that he was the registered owner of a parcel of land next to the defendants’ property. The plaintiff then made a formal offer to settle, indicating he would give up a significant portion of his property that the defendants were occupying in exchange for the disputed parcel for which the declaration was sought. A counter offer was made by the defendants and the plaintiff agreed to it. It also included a demand that a portion of the disputed parcel would go to the defendants.

Subsequent to that, the defendants wanted a further change and demanded more land. The plaintiff would not agree. The defendants resiled (retracted) from the settlement that had been made and the court ordered the enforcement of that settlement.

As part of their case, the defendants alleged they were mistaken as to the finality of the agreement and yet they had participated in the negotiations leading to the binding agreement. The female defendant claimed duress but the evidence was that the lawyer for the defendants informed them of the full and final settlement agreement and all issues were accepted. The court noted that the settlement was reasonable, particularly since the defendants extracted additional lands (part of the plaintiff’s property). The court determined that the defendants were simply trying after the settlement to obtain more land.

One has to wonder, when defendants try to avoid a settlement, whether they will turn on their lawyers when they say that they did not know that this was “the finality of the agreement” and that they were mistaken and that they were under duress. The defending lawyer had gone over the agreement in full. Obviously the defendants were litigious but perhaps the expense of further claims might prevent further action.

Lack of detrimental reliance

A shoe retailer entered into a 62-month lease for a store in a shopping centre. The principal of the tenant retailer signed an indemnity agreement for the first two years of the lease.

The tenant had financial difficulties within a few months and wanted to expand its offerings and sell different merchandise (giftware and clothing). The tenant then learned for the first time that two other tenants had exclusivity to sell giftware and clothing in the mall, and provisions in their leases prohibiting the landlord owner from allowing others to do so. The tenant abandoned the premises and the landlord sued.

The landlord was awarded $117,246.77 against the tenant corporation and the principal of the corporation was liable for $31,263.47, all subject to the contract interest rate of 24 per cent per year.

There was no negligent misrepresentation by the landlord for not voluntarily disclosing the exclusivity provisions, because the tenant and its principal never indicated they were going to sell giftware or clothing. The court ruled that the tenant and its principal would have entered into the lease and indemnity agreement even if the exclusive use to others had been brought to their attention. (Corydon Village Mall Ltd. v. TEL Management Inc. et al., 2015 MBQB 67)


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