Recently an action was commenced in Eastern Canada by an individual who was injured subsequent to manipulation (chiropractic treatment) received from the defendant chiropractor.

A medical doctor gave expert opinion in court that was found to be admissible and convincing. The trial court ruled that the cervical manipulation performed by the chiropractor resulted in (causation) the plaintiff’s injury. Moreover, the chiropractor was negligent in not obtaining “informed consent to the treatment”, since the patient had not been properly informed of the “risks of that type of treatment”.

It is essential for any professional in any profession, including real estate agents and brokers, to advise clients of the material risks involved, so that the client can make an educated decision on whether to go forward.

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Another recent decision, although also not a real estate case, involves a class action and certification by the British Columbia Court of Appeal and the concept involved is important to all professionals.

The case surrounded the taking of hormone therapy relating to menopause. Lee, the plaintiff in the class action, was diagnosed with breast cancer and the issue was causation and casual connection between the hormone therapy and breast cancer.

The class action was certified, although the court noted the challenges of a duty of care over a period of 26 years. More important was the issue of failure to disclose, which constituted a cause of action itself.

As some of our articles have pointed out in the past, often it is difficult to prove negligence on behalf of professionals but the added feature is that there must be full disclosure. This concept has recently hit the newspapers concerning stigmatization of homes, when properties were sold to purchasers without disclosure of horrific events that took place on the property. (Stanway v. Wyeth Canada Inc., 2013 BCSC 1585)

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Here is one of those few cases where a private mortgage company did not properly exercise its sale rights under its mortgage and paid as a result.

The plaintiff was a corporation that owned land, intending to develop it. The plaintiff loaned money by giving a mortgage to the defendant. The mortgage contained a clause preventing a sale of the land for less than $150,000 per acre.

When the plaintiff defaulted on the mortgage, the mortgagee sold the 125 acres allegedly at less than market value. The plaintiff sued for damages.

The court held:

1. $3.5 million, interest and costs were awarded to the plaintiff;

2. The mortgagee breached its duty so that fair market value was not received and damages were the fair market value less the sale price;

3. The default by the mortgagee included:

a) listing at too low a price;

b) using an inexperienced Realtor (broker) without national connections;

(c) inadequate marketing efforts;

(d) no due diligence and failure to use the escape clause noted above;

(e) in too much of a hurry and accepting a lowball offer;

(f) not dealing reasonably with three potential buyers and not adequately exposing

the lands to the market. (1427814 Ontario Limited v. 3697584 Canada Inc., 2013 ONCA 597)

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In another case, a debtor to the credit union executed two collateral mortgages as “additional security” for “existing loans”. The debtor’s mother, however, had an interest in those properties. Of the two mortgages, the first mortgage was found to be unenforceable because there was “no new consideration”.

The second mortgage was enforceable against the debtor but not the mother. Obviously the credit union was on notice that there was a relationship between the debtor and his mother and that this could give rise to undue influence. The credit union however did not advise the mother to obtain independent legal advice. (Lewis v. Central Credit Union Limited, 2012 PECA 9)

Full decisions can be found at www.canlii.org.

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.