ONSC Enforces Oral Agreement for Purchase and Sale of Real Estate Property, Grants Specific Performance Remedy to Purchaser Overview In 2730453 Ont Inc. v 2380673 Ont Inc., 2022 ONSC 6660, the plaintiff, 2730453 Ontario Inc. (the “Purchaser”), sought specific performance to enforce an oral agreement for the purchase of land. The defendant, 2380673 Ont. Inc. (the “Vendor”), was the seller and owner of the property in question, who had initially agreed to the terms but later attempted to back out of the deal. Facts The Purchaser was represented by a project-specific company established specifically to acquire the disputed land. The Vendor was a corporation led by a sole individual. Over several months, negotiations were conducted through intermediaries for the sale and purchase of the Vendor’s 32-acre property, which directly adjoined land already owned by the Purchaser. The Purchaser’s objective was to consolidate land for future industrial development. These negotiations eventually led to the Purchaser making an offer, which the Vendor seemingly accepted and provided some necessary documentation for the closing process. Notably, the Vendor had a unique preference, which the Purchaser accommodated, regarding the postponement of formalizing the deal in writing until just prior to the closing date. Consequently, beyond initial drafts and exchanged documents, there existed no finalized, signed agreement encapsulating all agreed-upon terms. Despite this absence of a formalized contract, the Purchaser continued preparations for the transaction, affirming their readiness to proceed with funding and tendering. However, the Vendor raised unforeseen objections at the brink of the scheduled closing, conveyed via a 4 a.m. email to their agent. The email stated: “There will be no closing.” The Vendor refused to move forward with the transaction, relying upon section 4 of the Statute of Frauds, RSO 1990, c S.19, which states that a contract for the sale of land must be in writing. The Purchaser subsequently brought an action against the Vendor for beaching the agreement and sought specific performance for the property. Specific performance is a declaration by the court compelling a party to perform its contractual obligations. In the context of real estate, specific performance is typically granted when the prevailing party proves the property’s uniqueness, indicating that a substitute is not readily available and that monetary damages would be insufficient to remedy the harm suffered by the innocent party. Analysis Nature of the Property The Purchaser relied upon an expert report from a land use planner, which concluded that the disputed land was unique due to a number of features, such as: it is situated within Protected Future Employment Land; it has extensive visibility and exposure from Highway 407; it is in very close proximity to the future 407 Transitway; it has proximity to access to ON-403 and ON-407 Expressways Via Trafalgar Rd Interchange; it has contiguity to the adjacent westerly property owned by 2730453 Ontario Inc.; and it facilitates improved opportunity to master plan an employment/business Park. In this instance, the court concluded that the contested property possessed uniqueness due to its immediate adjacency to the Purchaser’s property, with the Purchaser intending to develop both lots as part of a unified development. Given that other adjacent properties were not available for sale at the time, the contested property was deemed ‘unique’ as there was no suitable substitute available. Part Performance Despite the absence of a written contract, the court found that the following acts constituted part performance of the oral agreement by the Purchaser: obtaining an environmental assessment of the property; obtaining survey and title searches on the property; conducting other due diligence related to the property; negotiating and preparing the commission agreement among the purchaser and the brokers; retaining legal counsel to close the agreement; drafting, revising, and negotiating the written agreement of purchase and sale for the property; delivering the documents required on closing; and obtaining, delivering and tendering the certified cheque for the full amount of the purchase price. Furthermore, the court determined that the Vendor’s following actions related to the sale of the disputed property and constituted part performance of the oral contract: retaining legal counsel to close the agreement for the purchase and sale of the property; negotiating over the status of the easement on the property; reviewing and revising the draft agreement of purchase and sale, including providing a revised version of Schedule A to that agreement to the purchaser and obtaining the consent of the purchaser to the revisions; providing draft copies of the vendor’s closing certificate and statutory declaration and the owner executing those documents; and negotiating the method by which the purchaser would deliver the agreed-upon purchase price on closing. Conclusion The court ultimately found that there was sufficient written evidence to prove the existence of an oral agreement, supported by numerous acts of part performance. Through correspondence, all the essential terms of the deal were agreed to, which included: the identity of the parties; the description of the property; and the purchase price. Having concluded that there was a valid oral agreement breached by the Vendor without justification, the court then turned its attention to the appropriate remedy. Given the inadequacy of damages, particularly in light of the Purchaser’s future development goals which would be challenging to quantify, the court deemed specific performance to be the more suitable recourse. For more information, assistance, or any other questions regarding real estate litigation, or real estate transactions, please contact Kelli Preston at Devry Smith Frank LLP at (416) 446-3344 or at kelli.preston@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” This blog was co-authored by Articling Student, Owais Hashmi. By AlyssaBlog, Real EstateApril 8, 2024March 26, 2024
Insuring Your Condo: Exploring Insurance and Subrogation in Condominium Ownership Insurance policies protect our various interests such as our homes, vehicles, and personal property where there is potential damage, loss, and/or liability. Insurance policies vary and are available to purchase at different prices and different levels of coverage. Insurance is often a necessary condition for acquiring a variety of things, such as owning a vehicle or obtaining a mortgage. In the context of a condominium and pursuant to Ontario’s Condominium Act, individual unit owners are subject to the rules of their condominium’s declaration and bylaws, which together make up the governing documents.[1] How are condominiums operated and organized? Essentially, all condominiums have a corporation number which creates the condominium corporation. The condominium corporation is a legal entity. A condominium corporation will designate a Board of Directors to make major decisions, such as what renovations should be made to common elements and managing the flow of money in and out of the condominium’s reserve fund. A condominium corporation is created by filing, among other things, a declaration to the Land Registry Office. A unit owner must abide by the declaration, which will set out a list of rules, including rules for insurance. Ontario’s Condominium Act requires that a condominium corporation obtain insurance on its own behalf and on behalf of the owners for damage to the units and common elements that is caused by major perils or the other perils that the declaration or the by-laws specify.[2] Major perils covered by a condominium corporation’s insurance include fire, lightning, smoke, windstorm, hail, explosion, water escape, strikes, riots or civil commotion, impact by aircraft or vehicles, vandalism or malicious acts.[3] Oftentimes, condominium corporations will get “all risk” insurance policies that are usually more comprehensive and suitable for the purposes of the Condominium Act. Although the province of Ontario does not require individual unit owners to purchase an insurance policy, unit owners may nevertheless be required to do so pursuant to the condominium’s governing documents to cover for things such as improvements to their units or personal property. What is subrogation? Subrogation is a legal concept that allows one party, typically an insurance company, to step into the shoes of another party and seek reimbursement or recovery for a loss or damages they have already paid. It commonly occurs when an insurer compensates its policyholder for a covered loss and then seeks to recover the amount paid from a third party who may be responsible for causing the loss. By exercising the right of subrogation, the insurance company essentially assumes the legal rights of its policyholder to pursue a claim against the responsible party, aiming to recoup the expenses it has incurred. This principle helps prevent the policyholder from benefiting twice for the same loss and promotes fairness and cost-sharing among parties involved in an incident or accident. It is important to note that the insurer cannot subrogate against its own insured. How do subrogated claims apply to condominiums? A condominium corporation would likely contain a provision in their governing documents which imposes an obligation on all unit owners to purchase their own insurance policies for their units that would exist separately from the condominium corporation’s all-risk insurance policy. This provision would contain a mandatory condition barring any claim of subrogation between its corporation, employees, agents, unit owners, and other stakeholders. This is called a waiver of subrogation. This means that in the event a unit owner suffers from damages to its property from a source beyond itself but within the same building, and after receiving coverage for the damages, that unit owner’s own insurance company cannot make a claim of subrogation against the insured’s neighbours or the condominium corporation if there is a waiver of subrogation requirement in the condominium’s governing documents, subject to exceptions provided for in the documents. Another way of understanding the waiver of subrogation rights is to consider it an “allocation of risk between the condominium corporation (which assumes responsibilities for insuring the building), and the owner of the unit (which is responsible for insuring the contents/equipment of the unit). The intention in allocating those risks is that there will not be subrogation between the two parties for a loss to the other’s property even if caused by the negligence of the other party.”[4] Conclusion In conclusion, insurance plays a crucial role in safeguarding our interests, whether it’s our homes, vehicles, or personal property, from potential risks and liabilities. In the realm of condominium living, understanding the organization and operation of condominium corporations is paramount. In essence, the purpose of insurance and subrogation mechanisms are to mitigate risks and promote financial security in condominium living. By adhering to these principles, both condominium corporations and unit owners can navigate potential challenges with confidence. If you have questions about property-related litigation or title insurance, please contact Graeme R. Oddy, lawyer at Devry Smith Frank LLP at 416-446-5810 or Graeme.oddy@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” This blog was co-authored by Articling Student, Toni Pascale, and Summer Law Student, Sanaz Sakhapour. [1] Condominium Act, 1998, S.O. 1998, c. 19 [2] Ibid at s. 99. [3] Ibid at s. 99(2). [4] Elite Vertical Blinds, Mfg. Co. v. YRCC No. 696, 2018 ONSC 1000 (CanLII) at para 25. By AlyssaBlog, Condo LawApril 1, 2024March 26, 2024
Minority Shareholder Rights Conflicts: Insights from Wilfred v. Dare The rights of minority shareholders are frequently in conflict with those of majority shareholders and directors. One case that delves into this closely is Wilfred v Dare, 2018 which examines the concept of reasonable expectation of liquidity and its intersection with the law of oppression and corporations. The case revolves around Carolyn Dare, a minority shareholder in Serad Holdings Limited, a family-owned business. Carolyn argued that her inability to sell her shares due to the lack of a third-party market amounted to oppression, which raised questions about the fair treatment of minority shareholders and the responsibilities of those in control of the corporation. The court’s analysis in Wilfred v Dare provides important insights into the concept of reasonable expectation of liquidity. It considered various factors, including the capital needs of the family business and the lack of a third-party market for the shares, Carolyn’s financial difficulties – which were not caused by her brothers – and the fact that she had received her interest in Serad Holdings Limited as a gift as part of an estate freeze. This demonstrates that the law of oppression requires courts to balance the interests of minority shareholders with the legitimate business interests of the corporation. While minority shareholders are entitled to fair treatment and protection from oppressive conduct, they must also consider the broader context of the corporation’s operations and the impact of their actions on the business as a whole. Key Regulations In this case, the court decided that simply not being able to sell shares wasn’t enough to be considered oppression. To understand why, it’s important to look at the basic principles and how they apply in situations like this: Reasonable Expectation of Liquidity: The court evaluated whether Carolyn could reasonably expect to sell her shares. This assessment considered factors like the company’s financial needs, her understanding at the time she acquired the shares, whether there were other ways for her to get value from her shares, and how she got her shares in the first place. Oppression and Fair Treatment: The law of oppression aims to protect minority shareholders from unfair treatment by the majority. The court must balance the rights of minority shareholders with the company’s legitimate interests. In the Wilfred case, the court emphasized that the oppression remedy doesn’t entitle a shareholder to avoid restrictions on the liquidity of their shares unless there is clear evidence of unfair or oppressive behaviour. Establishing Oppression: To prove oppression, a shareholder must show that they have been treated unfairly or ignored. This requires presenting evidence of a consistent pattern of behaviour or actions that unfairly disadvantage the minority shareholder. These principles highlight the complexity of oppression claims and the need for a thorough understanding of the facts and circumstances of each case. They also emphasize the importance of balancing the rights of minority shareholders with the legitimate business interests of the corporation in applying the law of oppression. Successor cases, such as Noble v. North Halton Golf, 2018 and Corber v. Henry, 2023 reaffirmed the findings in Wilfred v Dare. They emphasized that the oppression remedy is not designed to relieve a minority shareholder from the limited liquidity attached to their shares or to provide a means of exiting the corporation, in the absence of any oppressive or unfair conduct. Individuals in a similar situation should be aware of these principles. Understanding the aspects of liquidity expectations, oppression, and fair treatment is crucial for protecting minority shareholder rights and ensuring fair corporate governance practices. When faced with issues related to reasonable expectations of liquidity, seeking legal advice and understanding one’s rights as a shareholder are essential steps in navigating these complex legal matters. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By AlyssaBlog, Commercial LitigationMarch 22, 2024March 26, 2024
Dispute Over Real Estate Transaction Deadline: Ontario Court of Appeal Affirms Vendor’s Termination of Contract In a recent appeal before the Ontario Court of Appeal, the Court showcased once again the significance of the “time is of the essence” clause. In, 3 Gill Homes Inc. v. 5009796 Ontario Inc. (Kassar Homes), 2024 ONCA 6, the parties entered into an Agreement of Purchase and Sale (APS) with 3:00 pm being the closing time specified on the completion date. The purchasing party missed the closing time by a mere 35 minutes and despite having delivered the purchase price, the Vendor terminated the contract. The appellant, 3 Gill Homes Inc., contested the application judge’s ruling in favour of the respondent vendor, 5009796 Ontario Inc., trading as Kassar Homes (“Kassar Homes”). In rendering its decision the Ontario Court of Appeal had to balance well-established rules of contractual interpretation and strict reading of the contract negotiated and entered into by the parties. Key Issues Did the application judge err in finding that: the payment closing time was 3:00 pm; time was of the essence in relation to the payment closing time; the 3:00 pm closing time was not unconscionable; damages could not be fairly determined on a written record; and Are the application judge’s reasons sufficient for appellate review? Court’s Decision The Court of Appeal dismissed the appeal, upholding the application judge’s ruling. Here’s the breakdown of the court’s reasoning: Payment Deadline: The court affirmed the application judge’s determination that the payment deadline of 3:00 p.m. was clearly stipulated in the APS. This timeframe was essential, and failure to adhere to it justified the vendor’s termination of the contract. “Time is of the Essence” Clause: The court agreed with the application judge’s interpretation of the “time is of the essence” clause. This clause made it clear that adhering to the closing date and time was crucial, empowering the innocent party to terminate the contract upon breach. Unconscionability: The court found no basis to interfere with the application judge’s conclusion regarding the absence of unconscionability. The parties’ familiarity with real estate transactions and the terms of the APS weighed against the appellant’s claim of unfairness. Sufficiency of Reasons: The court determined that the application judge’s reasons were adequate for appellate review. The judge’s analysis of relevant case law, the APS terms, and factual circumstances provided a clear rationale for the decision. Damages Determination: Since the court upheld the application judge’s ruling on the merits, it deemed the issue of damages determination unnecessary for consideration. Opinion Many commentators would describe the Ontario Court of Appeal’s decision as harsh, given the fact that the Purchaser missed the closing payment deadline by a mere 35 minutes. This case underscores the significance of honouring contractual agreements in real estate transactions. The court’s decision not to interfere with the contractual deadline reflects a commitment to upholding the parties’ bargained-for terms. In essence, if parties agree that funds must be provided by a specific time, irrespective of other deadlines, the court will honour that agreement. In this instance, the vendor was within their rights to terminate the contract when the funds were not deposited into their lawyer’s trust account by 3:00 p.m., as specified in the APS. It is a common practice for such clauses to be included in pre-construction agreements. Upon entering into an APS, purchasers would do well to insert a solicitor review condition to ensure they are advised of all contractual timelines. While the transfer deed, the document in which ownership is transferred from vendor to purchaser, can occur on or prior to 5:00 pm, the parties could insert additional timelines for certain deliveries in the APS. Conclusion The Ontario Court of Appeal’s decision in 3 Gill Homes Inc. v. 5009796 Ontario Inc. (Kassar Homes), 2024 ONCA 6 reaffirms the importance of respecting contractual obligations in real estate transactions. By upholding the parties’ bargained-for terms, the court ensures clarity and fairness in contractual dealings. This case serves as a reminder for parties to carefully review and negotiate their agreements to avoid disputes over contractual deadlines in the future. If you have questions about real estate transactions, please contact Louis Gasbarre, lawyer at Devry Smith Frank LLP at 416-446-5853 or louis.gasbarre@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” This blog was co-authored by Mohadeseh Bakhtiari. By AlyssaBlog, Real EstateMarch 11, 2024March 11, 2024
Permanent Residents of Canada – The Repercussions of a DUI Conviction A change in 2018 that now allows a maximum penalty of 10 years imprisonment for impaired driving has impacted the eligibility of those who have been convicted of an impaired driving charge and are seeking or have permanent resident status in Canada. In 2018, Bill C-46 became law and cracked down on drivers under the influence. This change means that an impaired driving charge may now result in 10 years imprisonment. This has had a significant impact on those seeking, and those who have obtained permanent resident status in Canada. The Immigration and Refugee Protection Act (“IRPA”) lays out the inadmissible conduct that falls under “serious criminality”. Section 36(1) reads as follows: 36 (1) A permanent resident or a foreign national is inadmissible on grounds of serious criminality for (a) having been convicted in Canada of an offence under an Act of Parliament punishable by a maximum term of imprisonment of at least 10 years, or of an offence under an Act of Parliament for which a term of imprisonment of more than six months has been imposed; (b) having been convicted of an offence outside Canada that, if committed in Canada, would constitute an offence under an Act of Parliament punishable by a maximum term of imprisonment of at least 10 years; or (c) committing an act outside Canada that is an offence in the place where it was committed and that, if committed in Canada, would constitute an offence under an Act of Parliament punishable by a maximum term of imprisonment of at least 10 years. As laid out above, there are a number of offences under this section of IRPA that would deem an individual “inadmissible” to Canada. With the changes that came into force with Bill C-46, impaired driving is now one of them. The result is that it does not matter whether you were sentenced to the maximum penalty. If you were convicted of an act that is punishable by a maximum term of imprisonment of at least 10 years, you are inadmissible to Canada on grounds of serious criminality. For foreign nationals seeking entry into Canada, the repercussion of being deemed inadmissible means that they would likely be refused entry into Canada even for a short visit. For permanent residents of Canada, being deemed inadmissible means that they may lose their permanent resident status and are at risk of facing deportation. Whether convicted of a DUI in Canada or another country, the risk remains the same. After a DUI conviction, Canada Border Services Agency (“CBSA”) will notify the offender that the offence is considered a “serious criminality” offence. The offender would then have an opportunity to respond and CBSA would determine whether or not to prepare a Section 44 report to commence the deportation process and hold an admissibility hearing. The admissibility hearing is held before the Immigration Division of the Immigration and Refugee Board of Canada (IRB). This hearing is to determine whether CBSA was correct in labelling the offender as someone who meets the definition of “Serious Criminality” under the Act. If the Board determines that the offender meets the “Serious Criminality” definition, the offender is now inadmissible to Canada, and the Board will issue a removal order. It is important to note that there is no appeal option for permanent resident DUI offenders who were sentenced to 6 months or more of prison time. It is imperative that permanent residents of Canada fully understand the immigration repercussions of a DUI conviction before entering a guilty plea to a DUI charge. Criminal lawyers will often wisely advise their client to plead guilty (often when presented with multiple charges being dropped in exchange for a guilty plea to the DUI), but without fully considering or understanding the effect this will have on their client’s permanent resident status in Canada. If you are currently a permanent resident in Canada and have been charged with impaired driving, or are seeking permanent resident status in Canada, you may have options. If this is the case, an experienced lawyer, knowledgeable in the complex intricacies of Canadian immigration law, is essential in solving your immigration needs. If you are interested in seeking further guidance on this topic, please contact Benjamin Grubner, immigration lawyer at Devry Smith Frank LLP at 416-446-3328 or Benjamin.grubner@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” This blog was co-authored by articling student Samantha Lawr. By AlyssaBlog, ImmigrationFebruary 22, 2024February 22, 2024
Can I Inherit My Spouse’s Estate if They Died Without a Will While We Were Separated? In an effort to modernize estate law practice, several amendments to Ontario’s inheritance laws have recently been implemented. These changes were largely prompted by the enactment of the Accelerating Access to Justice Act, 2021, which introduced significant amendments to the Succession Law Reform Act (“SLRA”), the legislation governing inheritance matters in Ontario. Traditionally, under intestacy rules, if a married couple lived separately and one died without a will, leaving behind only a spouse, the spouse would inherit the deceased’s property outright. However, if the deceased left a spouse and one child, the spouse’s entitlement would be half of the estate remaining after the payment of the spousal preferential share, currently set at $350,000. In cases with multiple children, the spouse would still receive their preferential share, with the remaining estate divided between the spouse and the deceased’s children. However, on January 1, 2022, an amendment to section 43.1 of the SLRA introduced significant changes regarding separated spouses in intestacy matters. This amendment not only exempts separated spouses from intestacy rules but also provides a comprehensive definition of what constitutes a “separated” spouse. The aim is to bring clarity and fairness to estate distribution in situations where marital relationships have broken down. Who qualifies as a “spouse” under the SLRA? Under the SLRA, “spouse” has the same meaning as in section 1 of the Family Law Act (“FLA”). Section 1 of the FLA defines “spouse” as two persons who: (a) are married to each other, or (b) have together entered into a marriage that is voidable or void, in good faith on the part of a person relying on this clause to assert any right. According to section 43.1 of the SLRA, a spouse is considered “separated” from the deceased person at the time of their death if: (a) Before the person’s death, i. they lived separate and apart as a result of the breakdown of their marriage for a period of three years, if the period immediately preceded the death, ii. they entered into an agreement that is a valid separation agreement under Part IV of the Family Law Act, iii. a court made an order with respect to their rights and obligations in the settlement of their affairs arising from the breakdown of their marriage, or iv. a family arbitration award was made under the Arbitration Act, 1991with respect to their rights and obligations in the settlement of their affairs arising from the breakdown of their marriage; and (b) at the time of the person’s death, they were living separate and apart as a result of the breakdown of their marriage. It’s essential to note the difference between common-law spouses and married spouses regarding property rights. Unlike married spouses, common-law partners do not have the same legal treatment and do not automatically possess equivalent property rights. By providing clarity on the treatment of separated spouses in intestacy cases and defining the term “separated” spouse, the amendment aims to promote fairness and equity in estate distribution practices. However, it also underscores the ongoing need for individuals to be aware of their legal rights and obligations, particularly in the realm of family law and estate planning. The experienced legal team at Devry Smith Frank LLP is here to assist you in navigating the intricacies of Ontario’s legal landscape. For more information regarding Estates and Estates-related topics, please contact Kelli Preston at Devry Smith Frank LLP at (416) 446-3344 or kelli.preston@devrylaw.ca. This post was co-authored by Kelli Preston and Articling Student, Owais Hashmi. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” By AlyssaBlog, Wills and EstatesFebruary 14, 2024
Title Insurance 101 You just moved into your new property. You go to install a new fence, and you discover that it’s not on the property line – 6 inches of your land has been on your neighbor’s side of the fence for years! Uh oh… now what? Title insurance might save the day! What is Title Insurance? Title insurance is a type of insurance policy that protects property owners and lenders from losses associated with title issues or other covered risks. “Title” describes your legal right of ownership to the land. Effectively, title insurance allows purchasers to insure against future potential title issues, rather than conducting additional due diligence at the outset of the transaction. Title insurance requires one-time payment, with the policy being effective for as long as you own the property. Common Coverage Offered by Title Insurance The following is a non-exhaustive list of potential issues that a standard title insurance policy may cover: Title defects Unmarketability of title Legal issues involving access Encroachment issues, adverse possession, property line disputes Easements over the property (i.e. Someone has a legal right of way over the property) Liens or charges on title Work orders from a municipality Tax or utility arrears from previous owner Certain violations of municipal regulations Title fraud or forgery Title insurance policies also usually contain a litigation provision in which the insurer undertakes to defend your title and other insured risks in any court case that is based on the provisions in your policy. For example, if a neighbour was to build a structure that encroached onto your land, if covered under the policy, the title insurer may assist in retaining counsel on your behalf, commencing a proceeding, and may pay for all legal fees and expenses incurred to rectify the issue. What is Not Covered? Title insurance policies often contain numerous exemptions or restrictions that are not typically afforded under a standard policy. Some title insurers will provide additional endorsements, depending on the circumstances at hand, to meet your specific needs. If title insurance does not insure over an issue, you will need to speak with your lawyer for further direction on how to proceed. The following is a non-exhaustive list of issues that are not usually covered by a standard title insurance policy: Physical and structural defects to the property Certain governmental powers/intervention (i.e. expropriation, violation of by-law etc.) Environmental risks Risks that are created by, allowed by, known to, or agreed to by the insured A common area of confusion lies in the distinction between title insurance and home insurance. While home insurance protects an insured from unexpected loss or damage to the physical property, title insurance protects the insured from loss or defects relating to the legal title of the property. It is imperative to note that title insurance is not an alternative to home insurance. Is Title Insurance Mandatory? It is not mandatory to purchase title insurance when acquiring a property in Ontario. Nevertheless, a lender may refuse to provide financing if a title insurance policy is not taken out on their behalf (i.e. a lender policy). The most common alternative to title insurance is to obtain a solicitor’s opinion on title. This alternative requires your lawyer to conduct numerous “off-title” searches that can be costly and time consuming. You would also need to provide your lawyer with, or obtain, an up-to-date survey of the property. The cost to obtain an up-to-date survey alone would likely exceed the cost of a standard title insurance policy, which is why many mortgagors opt to obtain title insurance. Furthermore, the only recourse that a purchaser may have in relation to a missed title defect would be against the lawyer who provided the opinion, which may be further limited given the circumstances and conduct of the parties. Given the potential liability for giving a solicitor’s opinion on title, many lawyers refuse to act on transactions that are not title insured. Working with your Lawyer While title insurance may provide coverage for certain losses, it is not an alternative to retaining a lawyer on your transaction, and there is no replacement for sound legal advice and competent representation. Title insurance and lawyers work in conjunction to provide maximum protection to homeowners. For example, if you do find yourself needing to commence litigation against a neighbor, it is often worth first checking if your issue is covered by title insurance. If you have questions about property-related litigation or title insurance, please contact Graeme R. Oddy, lawyer at Devry Smith Frank LLP at 416-446-5810 or Graeme.oddy@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” This blog was co-authored by Articling Student Jaimin Panesar* By AlyssaBlog, LitigationJanuary 31, 2024
My ex-spouse’s income has increased substantially since separation. Am I entitled to more spousal support? If you find yourself in a situation where your ex-spouse has experienced a substantial increase in income since the time of your separation, you may be wondering whether you are entitled to a reassessment of spousal support. What is Spousal Support? Spousal support is financial assistance that one spouse may be required to pay to the other spouse after a separation or divorce, ensuring the recipient’s financial stability. Spousal support is usually paid on a monthly basis; however, it can also be paid as a lump sum. According to section 15.2 of the Divorce Act and further discussed in the Supreme Court of Canada case, Bracklow v. Bracklow, there are three reasons a spouse would be entitled to spousal support: Compensatory spousal support, which is meant to compensate the lower-income earning spouse for sacrifices and contributions made during the marriage; Non-compensatory spousal support, which is meant to allow the recipient spouse to enjoy a similar lifestyle as they did while married; and, Contractual. In determining whether to award spousal support, a judge must consider many factors, including: The parties’ financial situations; The length of time the spouses cohabited; The roles of each spouse during the marriage; The impact of the breakdown of the marriage on each party’s financial situation; The ongoing responsibilities for the care of children; and, Any previous arrangements made regarding spousal support. The Spousal Support Advisory Guidelines provide parties and the Court with some guidance in determining the quantum and duration of when calculating reasonable spousal support. It is important to remember, however, that the Court retains discretion and the Guidelines are advisory only – they are not law. Are you entitled to increased spousal support if your former partner’s income increases? If one party experiences a significant change in their income after a spousal support arrangement has been made, it may constitute grounds for seeking a variation in spousal support, and the receiving party may be eligible for a reassessment of spousal support amounts. Whether you are entitled to an increase in spousal support if your former partner’s income increases is largely discretionary and is dependent on the circumstances and basis of the entitlement to spousal support. A spousal support order would not change automatically, and it is the responsibility of the recipient spouse to apply to vary the order. According to section 17(4.1) of the Divorce Act, before the court varies a spousal support order, it must be satisfied that a change in the condition, means, needs, or other circumstances of either former spouse has occurred since the making of the spousal support order. For example, since non-compensatory spousal support is intended to allow the lower-income earning spouse to enjoy a similar lifestyle as they did while married, an increase in income would usually not be relevant. A recipient’s entitlement to post-separation increases in income is more likely to be found in cases of compensatory support. Chapter 14.3 of the Spousal Support Advisory Guidelines discusses that “a rough notion” of causation is applied to post-separation income increases for the payor when determining if the income increase should impact spousal support entitlements. As such, it will depend on the length of the marriage, the roles adopted during the marriage, the time elapsed between the date of separation and the income increase, and the reason for the income increase. The likelihood of full or substantial sharing becomes more likely with child support cases, given the fact that there is a strong compensatory nature of the claim. If there is no child support in question, the Court will consider the following: long traditional marriages; medium-length and longer marriages; strong compensatory claims where there is primary responsibility for child-rearing; strong compensatory claims in longer marriages; prior agreements discussing future increases in income; support/cohabitation while in school; payor spouse continuing in the same job or area of work post-separation claims that were impacted by an inability to pay; and, income increases shortly post-separation. Varying the Spousal Support Order If the payor spouse does not consent to vary the spousal support order, it may be necessary to commence a Motion to Change. If applying for a variation, the applicant must meet the threshold to prove that there is a material change in the circumstances. The material change must be substantial and continuing, and if known at the time of the initial order, would likely have resulted in a different order. Determining what constitutes a material change is up to the court’s discretion. Conclusion Navigating the complexities of spousal support in the face of a significant increase in your ex-spouse’s income requires a careful understanding of the legal framework due to its highly discretionary nature. For more information regarding spousal support and/or family law-related topics, please contact Laura Dyke at Devry Smith Frank LLP at (416) 446-3327 or laura.dyke@devrylaw.ca This blog was co-authored by Articling Student, Toni Pascale. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” By AlyssaBlog, Family LawJanuary 25, 2024
Wealth and Estate Planning Resolutions for the New Year As you embark on a new year filled with possibilities, consider prioritizing resolutions that ensure lasting financial security and peace of mind for you and your loved ones. Take these proactive steps in wealth and estate planning to safeguard your legacy and make certain that your wishes are honoured: Make or update your Will Assets: Provide a comprehensive inventory of your assets, including real estate, investments, and personal property. Beneficiaries: Clearly outline who will inherit your assets, specifying individuals or groups of individuals. Guardians: For parents of minor children, appoint guardians who will provide care and support in your absence. Executorship: Choose a reliable executor to oversee the distribution of your assets in accordance with your wishes. Funeral Wishes: Communicate your preferences for funeral arrangements, alleviating the burden on your loved ones during a challenging time. Charitable Donations: If philanthropy is close to your heart, include provisions for charitable donations in your will. Powers of Attorney POA for Personal Care: Appoint an individual responsible for making determinations regarding your healthcare, nutrition, living arrangements, clothing, hygiene, and safety in the event you lack the capacity to make these decisions independently. POA for Property: Appoint an individual to manage your financial affairs, covering everything from bill payments and managing debt to handling investments and property transactions in the event you lack the capacity to make these decisions independently. Managing Assets outside of your Will (not included in your Estate) Life Insurance: Review and update life insurance policies to align with your current financial situation and protect your loved ones. Designate beneficiaries to ensure the life insurance proceeds can be distributed without the need for Probate. TFSA and RRSPs: Strategically manage Tax-Free Savings Accounts (TFSAs) and Registered Retirement Savings Plans (RRSPs) to maximize tax advantages. Designate beneficiaries to ensure the life insurance proceeds can be distributed without the need for Probate. Joint Accounts: With a joint bank account comes the right of survivorship. This means that when one of the account owners passes away, the surviving owner will take full ownership of the account. In theory, the bank account will not form part of the deceased’s estate since the surviving owner has full legal title to the account through the right of survivorship. Joint Tenancy: A joint tenancy creates a right of survivorship, which means that if one party dies, their interest is automatically transferred to the surviving tenant(s). Digital Assets Social Media Accounts: Develop a plan for the management or closure of social media accounts, preserving your digital legacy. Financial Accounts: Safeguard access information for online financial accounts to facilitate a smooth transition for your loved ones. Cryptocurrency: Provide clear instructions on how to access and manage cryptocurrency holdings, addressing a frequently overlooked aspect of estate planning. Password Management: Implement secure password practices and communicate access details to trusted individuals. Business Succession Planning Sole Proprietorships: If the business is a sole proprietorship, it ceases to operate upon the owner’s death. Develop a comprehensive plan for the seamless transfer of ownership and management responsibilities. Partnerships: Partnerships may or may not dissolve upon the death of a partner depending on the partnership agreement. Alternatively, a deceased partner’s interest may be transferred to a designated party such as a spouse. It is important to make provisions for transfer of ownership upon the death of a partner to determine whether the business will continue to operate and if so, with whom at its helm. Corporations and Shareholder Agreements: A Shareholders’ Agreement typically covers crucial business transition matters such as ownership of shares, the transfer or sale of shares, procedures in the event of a shareholder’s death, and the resolution of disputes among shareholders. Ownership of voting and preferred shares for a corporation can become a heavily contested matter if adequate provisions are not made. Creditor Protection Transferring Assets inter-vivos: Explore strategies for transferring assets to spouses or children during your lifetime as a gift to avoid complications with Probate. Bankruptcy Protection: Bankruptcy protections are afforded to certain assets, such as PRDSPs, RRSPs, RRIFs, and DPSPs. Contribution to these plans over an individual’s lifetime can ensure their family and dependants are guaranteed to receive some amount from their estate, especially if beneficiaries are designated from the outset. Timing Considerations: Be mindful that contributions to the aforementioned assets (as PRDSPs, RRSPs, RRIFs, and DPSPs) and inter-vivos transfers made within 12 months of declaring bankruptcy may not receive the same level of protection. By taking these proactive steps and deliberate measures, you can be confident that your loved ones will be well-provided for in the future. The experienced legal team at Devry Smith Frank LLP is here to assist you in navigating the intricacies of Ontario’s legal landscape. For more information regarding Estates and Estates-related topics, please contact Kelli Preston at Devry Smith Frank LLP at (416) 446-3344 or kelli.preston@devrylaw.ca. “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique, and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situations and needs.” This blog was co-authored by Articling Student, Owais Hashmi. By AlyssaBlog, Wills and EstatesJanuary 3, 2024
Demystifying the Confusion – Maintaining PR Status in Canada Residency Requirements to Maintain Canadian Permanent Resident Status If you are seeking to maintain your permanent resident status in Canada, you must meet the residency requirements set by Immigration Refugees and Citizenship Canada (IRCC). As a general rule, to keep your permanent resident status, you must have been in Canada for at least 730 days over the course of the last five (5) year period. It is important to note that these 730 days do not need to be continuous. A permanent resident is generally free to leave and enter Canada at any time with a valid permanent residence card. Most permanent resident cards expire after five years. There are some exceptions in relation to this residency requirement, as some of the time you spend outside of Canada may count towards your permanent resident status. The following are three exceptions to the permanent residency requirement: You are sent to work outside of Canada full-time by a Canadian employer with the expectation that you will return and resume your employment in Canada You accompany your spouse, common-law partner or parent who is a permanent resident and who is sent to work full-time outside Canada by a Canadian employer with the expectation that they will return and resume their employment in Canada. You live outside of Canada with your spouse, common-law partner or parent who is a Canadian citizen. If you meet any of the above-noted exceptions, the time spent in a foreign country during these activities may be credited as time spent in Canada, towards the 730-day requirement. These exceptions only apply to maintaining your permanent resident status. Residency Requirements to Apply for Canadian Citizenship When applying for Canadian citizenship, you must meet distinct residency requirements, in addition to the other eligibility criteria as outlined by Immigration Refugees and Citizenship Canada (IRCC). To meet the residency requirements for citizenship, you must have been physically present in Canada, as a permanent resident, for at least 1095 days in the preceding five (5) years from the date you sign the application. There are two (2) counting exceptions that may allow for time spent outside of Canada, or time spent in Canada prior to becoming a permanent resident, to be credited toward the 1095-day citizenship requirement. The following exceptions are only applicable to citizenship applications: You are legally in Canada as a “temporary resident” or a “protected person” You are outside of Canada as a Crown servant or are accompanying a family member who is a crown servant. It is important to note that each day spent in Canada as a temporary resident or protected person only counts as one-half day when calculating the number of days for your citizenship application, to a maximum of 365 days. For example, if you were a student legally studying at a Canadian university for 500 days (i.e. a temporary resident), only 250 of those days would be credited as time spent in Canada for your application. Furthermore, if you studied in Canada for 800 days, you would only be credited with 365 days, as this is the maximum number of days that can be credited as a temporary resident or protected person. Time That Does Not Count Towards Any Residency Requirements If you are incarcerated, under a probation order, a paroled inmate, or illegally present in Canada (i.e overstaying your visa), this time will not count towards any of the above-noted residency requirements. Failing to Meet the Residency Requirements A failure to meet the residency requirements does not automatically result in the loss of your permanent residence status. Even if your permanent resident card expires, you do not lose your status. Permanent resident status can only be lost in certain circumstances, such as voluntarily renouncing your status or having a removal order made against you. If you wish to maintain your permanent residence status but have not met the residency requirements in the preceding five (5) years, you have the option of waiting to apply until you meet the above-noted criteria. However, during the time that your permanent resident card is expired, it is not advisable to travel outside of Canada. If you are outside of Canada when your permanent resident card expires, you will need to apply for a “Permanent Resident Travel Document”, which may delay your return to Canada. In any event, you must be in Canada to apply for a new PR card. Likewise, if you are seeking to become a Canadian citizen and have not met the residency requirements in the previous five (5) years, you can simply wait to apply until you have met the 1095-day requirement in the preceding five (5) years from your application date. An experienced lawyer, knowledgeable in the complex intricacies of Canadian immigration law, is essential in solving your immigration needs. If you are looking to submit an application to Immigration Refugees and Citizenship Canada or are interested in seeking further guidance in US or Canadian immigration law, please contact Benjamin Grubner, lawyer at Devry Smith Frank LLP at 416-446-3328 or at Benjamin.grubner@devrylaw.ca “This article is intended to inform. Its content does not constitute legal advice and should not be relied upon by readers as such. If you require legal assistance, please see a lawyer. Each case is unique and a lawyer with good training and sound judgment can provide you with advice tailored to your specific situation and needs.” This blog was co-authored by Articling Student Jaimin Panesar* By AlyssaBlog, ImmigrationDecember 26, 2023December 22, 2023
