Condo Law Digest – March 2018

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Scicluna v. Solstice Two Limited, 2018 ONCA 176
Decision Kate: February 23, 2018
http://canlii.ca/t/hqktm

This is an appeal by two parties against the decision made by Justice Brown in Scicluna v Solstice. Ms. Scicluna agreed to purchase a condominium from Solstice Two and advanced just over $293,000. She lost her job and was unable to pay the remaining $78,000. At first, Solstice Two agreed to return to Ms. Scicluna all of the money she had advanced, less $30,000, provided that the condominium was resold. It was indeed resold (for $435,000). However Ms. Scicluna refused to sign the release document, mistakenly believing that Solstice would keep $60,000 rather than $30,000. She commenced a claim, and in response Solstice invoked the forfeiture provision in their original agreement, demanding to retain every cent that Ms. Scicluna had paid. Justice Brown granted Ms. Scicluna relief from forfeiture but instead of giving the money to Ms. Scicluna, she gave it to Ms. Scicluna’s trustee in bankruptcy, Keven Thatcher and Associates (KTL).

In this action, Ms. Scicluna argues that Justice Brown erred in giving the money to KTL, and Solstice argues that Ms. Scicluna should not have been granted relief from forfeiture. The appeal judges upheld Justice Brown’s decision. Regarding the claim by Solstice, it would be a “grossly disproportionate windfall” for them to retain the full amount paid by Ms. Scicluna. Regarding Ms. Scicluna’s appeal, she did not fully disclose to KTL her claim to the deposit on the condo, or her lawsuits against Solstice. It would not advance the principles of the Bankruptcy and Insolvency Act for her to retain the funds.

Comment: Costs of $5000 each from Ms. Scicluna and Solstice were granted to KTL. The trial judge had declined to order costs, saying that the matter should have settled. (For anyone keeping track, there has now been a full trial and an appeal over a matter that “should have settled.”)

Axess Law Professional Corporation v. Sood
Decision Date: February 1, 2018
http://canlii.ca/t/hq5ln

This is an appeal of a small claims court decision. Mr. Sood purchased a condominium in 2015 and was represented in the transaction by Axess. Two different taxes were due on the purchase: Ontario Land Transfer Tax and Municipal Land Transfer Tax. As it happened, on the very day that Mr. Sood’s transaction closed, an automatic software update in the system at Axess introduced an additional step in order to have both taxes included on the Trust Ledger Statement. When the transaction closed, the Transfer document included both taxes, but Axess never received the funds for the Municipal Transfer tax from Mr. Sood. Instead the funds were automatically paid out to the tax authority from the law firm’s own accounts.

Three months later, when Axess noticed the error, they requested payment from Mr. Sood. He refused, and Axess commenced a small claims court action. Mr. Sood’s appeal relies on Subsection 2(1) of the Solicitor’s Act. The legal arguments turned on whether or not the tax payment should be considered a “disbursement.” In the end, Justice Matheson denied the appeal.

Comment: Liability for tax goes to the purchaser, not their lawyers.

Brief Notices

An appeal has been denied in White Snow and Sunshine Holdings Inc. v. Metropolitan Toronto Condominium Corporation No. 561. Costs of $10,000 were awarded to the respondent. I summarized this dispute over access to condominium amenities in September 2017.

Manorama Sennek’s appeal from the judgment declaring her to be a “vexatious litigant” has been dismissed. Carleton Condominium Corporation No. 116 has spent “well over” $100,000 on disputes with her.

About the image: Lobby of the Old Commercial Appeal Building, Memphis, 1961 by ZeamaysOwn work, CC BY-SA 3.0, Link

Posted in Condo Disputes.