The plaintiffs in a recent case owned a number of residential properties in Ontario.
They rented one of the houses to a woman whose son used special equipment to turn marijuana into cannabis resin. In the process, the son caused an explosion and fire that destroyed the premises.
The landlords (plaintiffs) claimed under their householder insurance policy, but the claim was denied based on the Marijuana Exclusion in the policy.
The higher courts upheld the dismissal of the landlord’s action against the insurance company based on the exclusion, stating that the clause was absolute. (Pietrangelo v. Gore Mutual Insurance Company, 2011)
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In another recent case, a mortgagee sought to recover from the owner/mortgagor the deficiency owing on the mortgage after the sale of some cottage lots. The owner/mortgagor was not successful in raising a lack of independent legal advice as defence. The court ruled that the owner/mortgagor had ample time to engage a lawyer for such advice and chose not to do so.
It appears more often than not that courts are evaluating not only the position, knowledge and fairness of the commercial transaction, but also the opportunities “available” for a party to educate him/herself. Failure to do so is no longer an automatic excuse to overturn the transaction (mortgage deal). (Batdorf v. MacLean, 2010)
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A bookkeeper worked for the real estate brokerage for many years and was a trusted employee. The bookkeeper, over the years, changed the name of payees on cheques from the broker to herself. This led to misappropriation over a number of years of over $400,000.
The banking documents applicable to the brokerage required its two principals to sign all cheques. The bookkeeper had only one principal sign a cheque, then changed the payee to herself and deposited the cheque in her own account.
The brokerage sued its bank for its losses, since the bank accepted the cheque with only one principal signature. The bank’s defence was that its financial service agreement with the brokerage stated that the broker had to report errors within 30 days of its monthly statement. Otherwise, the bank had no liability.
The court upheld the agreement. Only cheques pointed out by the broker within 30 days of receipt of a bank statement were subject to bank indemnification. (Manor Windsor v. Bank of Nova Scotia, 2011)
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 rediation, acting for builders, real estate agents and lawyers.
