Every month, real estate lawyer Donald Lapowich, Q.C. writes brief summaries of some of the most significant legal cases pertaining to real estate in Canada for REM.
In a significant Ontario Court of Appeal decision (Toronto Standard Condominium Corporation No. 2095 v. West Harbour City (I) Residences Corp., 2014 ONCA 724), the court dismissed a condo corporation’s appeal from an agreement limiting liability for condo deficiencies.
The developer entered an agreement with the corporation through the condo’s founding board, limiting the developer’s liability and warranties for the common elements to the minimum mandated by the Ontario New Home Warranties Plan Act.
The agreement barred the condo corporation from suing by restricting it to warranty claims for common elements administered by Tarion. The elected board of directors (it should be kept in mind) replaced the declarant board after the developer turned the building over to the condo purchasers.
This is a very significant decision and obviously lawyers should be vigilant (as well as real estate agents) to see what the declarant agreement is when warning any purchasers of limitations in their purchase of a condominium unit.
A tenant of the owner of an apartment building fell on an outdoor stairway in front of the building. The lease indicated that the tenant was to report to his landlord any “need for repair”.
The tenant’s claim was for negligent failure of the landlord to do repairs. The landlord had to keep the common areas in a “reasonable safe condition”.
The defence that the tenant had not reported the need of the repairs could not be transformed into an exemption clause relieving the landlord of its duty to provide the common areas “reasonably safe”. The court held that the landlord was liable because its inspection program did not meet the standard of care required. However, since the tenant was aware of a gap in the staircase, it was determined she was 25 per cent contributory negligent for failing to exercise a degree of care. (Hickey v. New Brunswick Housing Corporation, 2014 NBCA 36)
Environmental cases are not for the weak at heart.
Canadian Tire Real Estate Ltd. owned property bordering on land owned by Huron Concrete Supply in Goderich, Ont. Canadian Tire issued a claim in negligence, trespass and breach of statutory obligation pursuant to the Environmental Protection Act. It claimed that Huron Concrete is responsible for contamination of the Canadian Tire property by petroleum hydrocarbons.
After a trial the claim was allowed and Canadian Tire was awarded damages of $3.6 million to remediate its property plus $1,115,693 for out of pocket expenses, including monies spent for site investigations, interim remediation and ongoing monitoring by Canadian Tire. (Canadian Tire Real Estate Ltd. v. Huron Concrete Supply Ltd., 2014 ONSC 288)
The plaintiff company retained lawyer Gregory Govedaris in its action against the defendant companies. The defendants were represented by Milton Davis and had a longstanding relationship. Davis was a senior mortgage lawyer.
During the course of the action, Govedaris called Davis and asked him about a mortgage question, to which Davis provided an answer. The plaintiff company then moved to remove Davis as solicitor for the defendants.
On a motion the court refused to remove Davis. Govedaris did not disclose confidential information about his client, the plaintiff company. He did not even identify the litigants in the actions to Davis and the information that Davis gave to Govedaris was contained in the pleadings of public record. In fact, Davis gave general legal information that Govedaris could have found in any textbook “on the law of mortgages,” the court ruled. Davis did not recommend any course of action.
Under all these circumstances, no solicitor/client relationship was created through Govedaris connecting Davis to his client, the plaintiff company. In this initial decision (as it may be appealed) the courts stated that a lawyer receiving a request for legal information from a junior colleague can assume general advice will not give rise to a conflict of interest. The court did not wish to discourage sharing of general information between colleagues with the legal profession and the public. (1623242 Ontario Inc. v. Great Lakes Copper Inc., 2014 ONSC 782)