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Category Archives: Litigation

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BCSC Considers the Organizing Principle of Good Faith in the Context of Lawyer’s Approval Clauses

Posted in Litigation


In 2014, the Supreme Court of Canada in Bhasin v. Hrynew[1] formally recognized the “organizing principle of good faith” in Canadian contract law. Since then, many Canadian courts have had occasion to interpret and apply this principle in the context of real estate transactions. A recent decision of the B.C. Supreme Court, Zhang v. Amaral-Gurgel,[2] adds to this line of authority, offering insight into the application of the principle of good faith in the context of lawyer’s approval clauses.… Continue Reading

Is a Developer Liable for A Buyer’s Losses from Changes in the Market? A BC Court Says No

Posted in Commercial, Litigation

Where there has been a misrepresentation by a developer in a real estate transaction, who is responsible for the losses suffered solely as a result of a change in market conditions? On September 15, 2016, in The Owners, Strata Plan LMS 3851 v. Homer Street Development Limited Partnership, 2016 BCCA 371, the BC Court of Appeal held that for a statutory misrepresentation under the Real Estate Act, a developer is not liable to compensate an investor for losses suffered as a result of external causes, such as changes in the market, which do not result from the inaccuracy … Continue Reading

How long is the builders’ lien registration period for drilling and/or servicing a well or well site on an oil sands project? Spoiler Alert – it’s 90 Days!

Posted in Construction, Land Use, Litigation

In the recent decision of Davidson Well Drilling Limited (Re), 2016 ABQB 416 (“Davidson”) the Court of Queen’s Bench of Alberta held that the 90-day lien period to register a lien against an “oil or gas well” or “oil or gas well site” applies to drilling on oil sands mines. The Court also concluded that the costs of trucking equipment away from a project site after it is completed may, in certain circumstances, be properly included in a builders’ lien.… Continue Reading

Operating Cost Statements – How Much Information is Enough?

Posted in Commercial, Litigation

Operating Costs – they are discussed endlessly during the lease negotiations and then often become the most contentious ongoing issue between landlord and tenant.

The almost universal practice is that at the beginning of each year landlord estimates operating costs and tenant pays in instalments based on that estimate.  Shortly after the end of the year the landlord delivers a statement of operating costs for the past year which may be certified or audited depending on the provisions of the lease. … Continue Reading

Can you put lipstick on a pig and call it rent?

Posted in Commercial, Litigation

Until recently, there has been some confusion over the limitation period in respect of rent. This is largely due to the fact that there are two references to the term “rent” in the Real Property Limitations Act (with one section referring to a ten-year limitation period[1] and the other section referring to a six year limitation period[2]), which governs claims for rent. This differs from the Limitations Act which governs damages claims (and has a limitation period of two years).… Continue Reading

Charlie and the Foosball Table: A Lesson in Good Faith and ROFR

Posted in Litigation, Policy, Residential

On a recent hot summer-like day, my neighbours’ pre-school boy, Charlie (pseudonym), sauntered over the front lawn in his pajamas to peek into my garage. Charlie had his gaze fixed on the foosball table, once a crown jewel of my college days and now just collecting dust in a corner. Charlie asked in the sweetest manner “can I play with that”? Normally, this would not be an issue. However, in an attempt to preserve all of Charlie’s limbs until at least adolescence, I replied that he could play only after I had vacated the menacing and precariously-balanced machines surrounding the … Continue Reading

To market, to market (rent), to renew a commercial lease

Posted in Commercial, Litigation

How can landlord and tenant successfully negotiate renewals of their lease at market rent? What happens when the landlord and tenant disagree about the appropriate rental rate for the renewal term? Many commercial leases provide that, on renewal, rent will be charged at “market rent”, being the rental rate prevailing in the local market at the time for similar properties in similar locations. But a market rent renewal provision can leave many questions unanswered and as “market rent” can mean different things to different people, this can lead to disagreements between landlord and tenant.… Continue Reading

Can a Developer Limit its Liability for Construction Defects?

Posted in Construction, Litigation

Lawyers representing strata lot purchasers in British Columbia have, to date, made considerable hay by emphasizing that the Real Estate Development Marketing Act (British Columbia) is “consumer protection” legislation to be interpreted in favour of purchasers. The bias in favour of the consumer has arguably lost some of its lustre in the past year or so (see, for example, the decision in Woo v. Onni, discussed here), but there is still concern that, when in doubt, the courts will invoke the consumer protection nature of the legislation to justify a decision in favour of the proverbial “little guy”, … Continue Reading

The Second Opinion: “Use it or Lose it” — The BCCA Warns Parties to Act Quickly in Response to a Fundamental Breach (or Suffer the Consequences)

A Commentary on Recent Legal Developments by the Opinions Group of McCarthy Tétrault LLP

Posted in Litigation

The following post on the Canadian Appeals Monitor blog written by Anthony Alexander on November 14, 2014, may be of interest to readers of this blog:

The Second Opinion: “Use it or Lose it” — The BCCA Warns Parties to Act Quickly in Response to a Fundamental Breach (or Suffer the Consequences)

A recent ruling of the British Columbia Court of Appeal, A & G Investments Inc. v. 0915630 B.C. Ltd., 2014 BCCA 425, provides a useful primer on the available mechanisms for bringing a contract to an end.  These include:

  1. the committing of a fundamental breach (leading
Continue Reading

SCC Delivers Ground-Breaking Decision in Canadian Contract Law.

Posted in Litigation

The following post on the Canadian Appeals Monitor blog written by Neil Finkelstein and Brandon Kain on November 14, 2014, may be of interest to readers of this blog:

SCC Delivers Ground-Breaking Decision in Canadian Contract Law

The Supreme Court of Canada has released a precedent-setting judgment in which it recognized, for the first time, that there is a general organizing principle of good faith in the performance of contracts throughout Canada: Bhasin v. Hrynew, 2014 SCC 71.  The Bhasin case, which was successfully argued by Neil Finkelstein and Brandon Kain of McCarthy Tétrault’s Toronto litigation group, will be … Continue Reading

The Challenges of Putting Humpty Dumpty Back Together Again

Posted in Awards and Recognitions, Litigation

A recent order of the Ontario Superior Court illustrates the complexities of the right of rescission in real estate transactions.  The purpose of the remedy of rescission is to restore the parties to the position they were in prior to the entering into of the transaction in question.  When there has been a conveyance of interests in real property and consequently, the transfer of legal ownership of those interests, which often triggers tax consequences, restoring the parties to their pre-contractual position and unwinding the transaction can be complicated and is akin to “putting Humpty Dumpty back together again.”

The recent … Continue Reading

No Parking

Posted in Litigation

The Supreme Court dismissed an appeal this week from the Quebec Court of Appeal in Immeubles Jacques Robitaille inc. v. Québec (City), 2014 SCC 34. The appellant developer had challenged an offence notice issued by the municipality for permitting or tolerating non-conforming parking use contrary to the municipality’s zoning and planning by-law. The developer, in challenging the notice, relied in part on acquired rights based on the use of the parking lot. The question that was raised was whether the doctrine of estoppel could be pleaded by a defendant in penal proceedings dealing with an application of … Continue Reading

Dealing with Non-Resident Companies

Posted in Litigation, Municipal

In a topsy-turvy world, the relative strength and stability of Canada’s economy continues to attract foreign investment, including our commercial and residential real estate sectors.

Since it may not always be advantageous for foreign companies to incorporate a Canadian entity, Canadian businesses are more likely today than ever to have dealings with non-resident companies, whether as buyers, sellers, landlords, tenants or financiers.

Transacting with a foreign company raises a host of issues that need to be thought about. To illustrate just one, consider a situation where a Canadian landlord wants to enforce a covenant in a lease – say a … Continue Reading

BCCA Overturns Decision Allowing Post-Closing Rescission Of Pre-Sale Condo Contracts

Posted in Litigation

On March 4, 2014, the B.C. Court of Appeal released its judgment in Woo v. Onni 2014 BCCA 76, reversing the decision of the court below which was the first to allow purchasers to rescind their contracts under the Real Estate Development Marketing Act (“REDMA”) postclosing.

The case involved 10 purchasers in a residential condominium project who had entered into contracts on a pre-sale basis.  The contracts were completed and the purchasers took possession of their units but, 16 months later, after discovering that the developer had failed to deliver to them the amendment to the … Continue Reading

The SCC Rules that Interfering with the Sale of a Property is not “Unlawful”

Posted in Litigation

The contours of the tort of unlawful interference with economic relations have, heretofore, been “unsettled”, “confusing” and “inconsistent”. The tort essentially provides redress when party “A” intentionally inflicts economic injury on party “B” by use of unlawful means against party “C”. What is the nature of the “unlawful” activity that can ground the tort? What degree of intentionality is required to give rise to the tort? Is the tort available concurrently with other causes of action? These are the central questions that the Supreme Court of Canada grappled with in its recent decision in A.I. Enterprises Ltd. v. Bram Enterprises Continue Reading

Builder’s Risk Policies: Scope of the Faulty Design/Work Exclusion

Posted in Litigation

What is the scope of the exclusion for making good faulty workmanship under a builders risk insurance policy? If cleaners scratch the windows during the construction process, does making good just mean a repeat cleaning or does it also include repairs to the windows?

This was the issue that the Alberta Court of Queen’s Bench grappled with in Ledcor Construction Limited v. Northbridge Indemnity Insurance Company, 2013 ABQB 585.

Station Lands Ltd. is the owner of the newly constructed EPCOR Tower. Ledcor Construction Limited was the general contractor responsible for building the new office tower. As the building neared … Continue Reading

Distressing Decision for Landlords

Posted in Commercial, Litigation

Landlords that exercise the remedy of distress rarely recover sufficient funds to satisfy the arrears of rent owing by the tenant.  A recent decision of the BC Supreme Court held that, in such a case, a landlord cannot immediately terminate the lease without first giving the tenant any required written notice of default and allowing the applicable cure period to expire.

In Delane Industry Co. Ltd. v. PCI Properties Corp., 2013 BCSC 1397, the tenant fell into arrears and, after giving a written demand letter specifying the amount owing and providing a five day cure period as required by … Continue Reading

Playing Fair (or not) when Determining Fair Market Value

Posted in Commercial, Litigation

When parties are unable to establish the future value of property in an agreement – for example, options to purchase or lease renewal options – they typically agree that the transaction will be based on the property’s fair market value (“FMV”) at the time, then set out a process for determining FMV should they fail to see eye-to-eye on what’s “fair” when the time comes.

Such provisions, which range from simple to very complex, often involve appraisal of the property by an accredited real estate appraiser – in other words, someone who will be neutral and knows what he or … Continue Reading

Strata Property Act Amendment Offers Remedy for Deadlocks on Special Levies

Posted in Commercial, Litigation

On December 12, 2013, amendments to section 173 of B.C.’s Strata Property Act, SBC 1998, c 43, came into force that allow strata corporations with majority support to apply to the BC Supreme Court to require strata owners to pay for certain repairs.

Prior to the amendment, strata corporations required a ¾ vote in favour to impose a special levy to raise money for needed repairs to common property. This could result in deadlock and delay when owner opinion was divided, exacerbating damage and unsafe conditions.

On application by a strata corporation within 90 days of it receiving at least … Continue Reading

What the heck did the Ontario Court of Appeal mean when it spoke of an “Implied Statutory Duty of Care”?

Posted in Land Use, Litigation

The following Canadian Appeals Monitor blog post by Anthony Alexander may be of interest to readers of this blog:

The Second Opinion:  What the heck did the Ontario Court of Appeal mean when it spoke of an “Implied Statutory Duty of Care”?

In the past decade, the staid law of negligence has undergone a number of interesting developments in Canada, focusing particularly on the threshold question of whether a duty of care is or is not owed by a particular plaintiff to a particular defendant in novel circumstances.

A recent ruling of the Ontario Court of Appeal, Rausch v. The Continue Reading

For Repudiating a Salon’s Lease, the BCCA Gives the Landlord a Haircut

Posted in Litigation

The following Canadian Appeals Monitor blog post by Anthony Alexander may be of interest to readers of this blog:

The Second Opinion: For Repudiating a Salon’s Lease, the BCCA Gives the Landlord a Haircut

Interesting issues of contractual repudiation and landlord-tenant law were recently addressed by the British Columbia Court of Appeal in Abraham v. Coblenz Holdings Ltd., 2013 BCCA 512. The tenant utilized the rented premises as a hair salon specializing in “African hairstyling.” The lease contained no express restriction on the business that could be conducted, and the tenant decided to begin offering additional (non-African) hair … Continue Reading

Interest is not Interest … When it is a Penalty

Posted in Litigation

The following Canadian Appeals Monitor post by Martin Boodman be of interest to readers of this blog:

Interest is not Interest … When it is a Penalty

In Diamantopoulos v. Construction Dompat Inc., 2013 QCCA 929, a construction contract specified a late payment interest rate of 24% per annum and a legal/collection fees charge of 20% on the amount due. The Québec Court of Appeal characterized these clauses jointly as “penal”, excessive and abusive, and reduced the charges to a single, global interest rate of 15%. The court exercised its discretion under article 1623 C.C.Q., which permits judicial … Continue Reading