Don Lapowich 2007By Don Lapowich

The plaintiff builder agreed to buy a number of lots to build structures on.

The defendant misrepresented that it had financial difficulty and said the plaintiff had to give up some lots or pay a higher price. This allegedly would allow the defendant to proceed with developing the project (creating serviceable lots).

The plaintiff believed the defendant and gave up four lots. It did not wish to lose its substantial deposit and wanted the project to proceed.

The plaintiff sued the defendant for damages for misrepresentation after learning that the defendant only represented what it did because lots had greatly increased in value since the plaintiff’s agreement to buy them.

The court held that the defendant’s representations were false. The plaintiff relied on them and because the value of four lots given up had increased in value, the plaintiff was awarded $858,000 in damages. (W.E. Industries Ltd. v. 618061 B.C. Ltd., 2012 BCSC 248)

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The New Brunswick Court of Appeal has come up with a looser test with regard to establishing arson in civil actions. Initially the insurance company had to establish each of three elements:

(a)  that the fire started from an incendiary origin;

(b)  that the insured had the opportunity to set the fire;

(c)  the insured had a motive on the balance of probabilities.

In New Brunswick at least, the court has indicated that all the evidence is to be assessed and established on the balance of probabilities that the insured set the fire or caused it to be set. In other words, all three elements are not absolutely necessary if the evidence points to arson. In this case, proof of motive was absent. Nevertheless, arson was proven in a civil manner. (Richardson v. Smith and State Farm Mutual Automobile Insurance Company et al, 2012 NBCA 75)

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In the sale of 18 lots by a developer to a builder, the agreement used the not uncommon phrase: 18 “fully serviced lots”.

The sale closed and it took the developer a whole year after closing to complete the sewage disposal system. This delayed the builder’s program as a result.

The British Columbia Court held that the contract should be construed with “a good business sense”. Therefore the builder must be able to build homes without delay. “Fully serviced lots” meant completed for purposes of building.

Important words in an Agreement to Purchase between educated business land dealers rule the day. (W.E. Industries Ltd. v. 618061 B.C. Ltd., 2012 BCSC 248)

Donald Lapowich, Q.C. is a partner at the law firm of Koskie, Minsky in Toronto, where he practices civil litigation, with a particular emphasis on real estate litigation and mediation, acting for builders, real estate agents and lawyers.

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