Causation and specific performance cases

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As readers of REM will know, causation and proof of same against professionals is one of my favourite defences to malpractice.

An oral maxillofacial surgeon leased space in a hospital that was being renovated.  A patient complained of disorientation and dizziness. The patient sued, alleging a disability caused by hazardous materials that were released into surgeon’s work environment during renovations. 

The Court of Appeal in Eastern Canada applied the standard that the patient must show (prove) that “but for” the renovations (causation), she would not be ill. The patient was not able to prove that heavy metals were released into the air during the renovations, causing the illness.

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An owner of a ranch was being foreclosed and sought the help of a friend, L. That friend contacted D who took title in trust, paid off the mortgage and therefore saved the owner’s equity in the property.

L then dealt with a real estate company as the agent for the owner and signed, “through D”, an MLS contract. The owners then sold the property to a purchaser, but they refused to pay commissions to the real estate company.

The company brought a motion, in British Columbia, for judgment of its commission. 

The court held that the plaintiff realty company knew that D, as the registered title holder, was not the seller of the ranch but was simply “agents” for the owner and signed for the purpose of binding the owner to an MLS contract.  Therefore, the owners were liable to the real estate company for the commission of sale. 

The court also ruled that it was obvious in this circumstance that the real estate company was acting for the person holding in trust “for the owner”.  The owner wished to sell the property.  The real estate company was successful in achieving the sale and therefore it earned that commission.

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Another case involves very interesting principles of equity. A borrower of funds had an existing loan and the lender had called the loan in. The new lender approved the borrower “without a guarantor.”  However, knowing the spot the borrower was in, the new lender demanded that the borrower’s principal co-sign. 

The court held that the “personal officer” of the corporate borrower was coerced in obtaining his signing for the loan because of economic duress and that the new lender was taking advantage of the situation. The new lender was not “entitled” to the principal’s “covenant” and it was not enforceable.

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A plaintiff agreed to buy a new home from a builder. It was to be constructed in a new subdivision.

The completion date was set but an extension of 90 days was given to accommodate delays.

By the construction date completion, actual construction had barely begun. No one took any steps to enforce the contract.

The house was not completed and the plaintiff bought a smaller house in the same subdivision on another street. The plaintiff then sued for “specific performance” by the builder for not completing the original home.

The court refused specific performance. It ruled the plaintiff had bought another home that was also new, in the same subdivision that was similar though somewhat smaller. The second house cost more (due to the passage of time) but it was demonstrated to the court that it was a suitable alternative. The court ruled that where the plaintiff can lead no evidence that damages would not be adequate, specific performance is not a proper remedy.

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.

1 COMMENT

  1. Question: If specific performance is not a proper remedy in the case quoted using the builder as an example, according to the court's findings — So, who advised the plaintiff (his lawyer?) to sue using specific performance as the vehicle? What would have been the proper vehicle under which the plaintiff should have sued? Did the judge in the case comment as to what would have been a better vehicle for the plaintiff to have used?

    In any case, having hired a lawyer to act on a client's behalf, would it not be prudent for a plaintiff or a defendant to consider his lawyer the expert on the topic? and rely upon the choice through which the lawyer elected to proceed on behalf of the client?

    If so, then, in this case, is the plaintiff's lawyer at fault? If so, is that a sueable offence (for a lawyer to choose the wrong method of remedy through which an action passes through the courts – according to the judge's findings)? Would the plaintiff have been knowledgeable enough to have known otherwise and suggested to his own counsel a better route to take?

    How would the lawyer defend his choice of action on behalf of his client, in this case the plaintiff? and would the answer to that question throw back to the decision the court found, perhaps permitting the topic to be tried under a different premise? Presuming all the above – answers in the affirmative would lead to what?

    Back to court under a process using a different remedy? Make some sort of settlement with plaintiff's lawyer, for error in judgement of choice of remedy under which to pursue in the courts? Does the lawyer's insurance cover such a situation? or is the lawyer left to his own devices to fend off the outcome results?

    Cordially,
    Carolyne L http://www.Carolyne.com
    Serving Burlington and Brampton ON CA

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