We are still waiting for the decision.  Here is what the case is about:

My client’s adult son, in the course of matrimonial proceedings is charged criminally as a result of allegations made by his estranged spouse.  The son retains a criminal defence lawyer who, after about $80,000.00 successfully obtains an acquittal.

Some time passes, and my client receives a letter from a lawyer hired by the criminal defence lawyer alleging that my client entered into a verbal contract to guarantee that his accounts to the son would be paid.

The son entered into a written retainer agreement with his criminal defence lawyer.  The son signed a written promissory note in favor of the criminal defence lawyer.  The criminal defence lawyer sent all accounts in writing to only the son.  Not one piece of paper, not an agreement, not a letter, was ever signed or received by the client.

A demand letter is sent.  The client comes to see me.  I write back telling them to “go pound salt” (a phrase that I am actually unsure as to its origins or meanings… but I digress).

I assume that is the end of it.  What self respecting lawyer would try to sue someone on a verbal agreement?  It’s not worth the paper it’s written on!

Well, the lawyer sues (so much for my powers of prediction!).

More to follow…….

John Barzo

Litigation can be high risk.  No matter how right a lawyer thinks he or she is, if you go to a Judge, there is an element of the rolling of the dice.

Often, after making the argument, the Judge “reserves” his/her decision.  Sometimes it takes a couple of days, sometimes weeks, sometimes longer.

The wait can be, and usually is, excruciating for client and lawyer alike.

That is the situation on one matter I am dealing with.  The client is anxiously awaiting a decision that we hope will summarily put an end to the lawsuit against her.  I am anxiously awaiting confirmation that my view of the law was sound and that I obtained the result I strongly believe is the right one.

More to follow…….

John Barzo

The Construction Lien Act was intended to provide an economical way for contractors to ensure they get paid for their work on construction projects.

Unfortunately that isn’t how it has worked out, and contractors often complain that the Construction Lien Act process is an ineffective and far too expensive tool to enforce payment.  It should come as no surprise that those who owe the money often delay and frustrate contractors from getting paid.

Recent experience has shown me that this abuse can also come from the other direction.

I acted for a mortgagee who was owed money on a sale of development property.  My client took a significant “vendor take back” mortgage.  Things went south (why else would I be involved?) and foreclosure proceedings were commenced.

We then found that a contractor had filed a $1.7 million lien against numerous properties, including those my client’s mortgages were on, thereby impeding my client’s goal of foreclosing.  This was a particular type of lien, called a “General Lien”.

A General Lien allows a contractor to file a lien against multiple properties where the work was done under a single contract, and the properties are all owned by the same owner.

From the outset the existence of this General Lien seemed suspect, both in terms of amounts and validity.

We fought it.  Ultimately, the general contractor (and his lawyers) finally realized the “jig was up.”  They dropped the lien and title was cleared.

It was obvious that the lien was slapped onto title for the sole purpose of leveraging some sort of payout.  It was improper, and an abuse of the Act.  The contractor did not get a dime.

So, for all those who complain about the failures of the Act, I respond by saying it is often not the Act that is the problem, but the unscrupulous people who use it for improper purposes.

It amazes me how often people seek legal advice and then just simply disregard it.  Sometimes it is because business or personal realities trump the niceties of legal perfection.  I understand that.  Especially when the questions I get are not usually things like “if some jerk in a BMW cuts me off, am I legally justified in taking a tire iron to his head?” (just in case you are wondering – no!).

But sometimes, one has to wonder why they come ask in the first place, unless they are hoping we will simply tell them what they want to hear.

One lawyer I know summed it up as follows:  “people don’t want advice, they want vindication!”

But let’s keep it in perspective:  Would you go to a car dealer, plop down 40 grand for a car, then park it never to be driven?  Not likely. 

Sometimes we are the bearer of bad news.  In litigation, it is usually after the disaster has struck.  The most frustrating situations are where the person enters into a significant business deal, but does not want to pay for legal advice before signing on the dotted line.  The whole thing blows up and now the person is sitting across the table from a litigation lawyer  who is explaining the costs of going to court and the uncertainty of result.

Everyone, like Humpty Dumpty, will, at some time find themselves sitting on a ledge.   But if he had sought advice in advance, he would have at least been told to wear a tether and a harness, and then he might not have needed all of the King’s horses and all the King’s men….

In Ontario, there is a little known piece of legislation (at least to those who do not specialize in that field) called the Boundaries Act.  Its function is to address disputed property boundaries as surveyed.  It does not address issues such as adverse possession.

Ownership of property can be the source of extreme emotion.  Waterfront/recreational properties, as you can imagine, can become hotly contested, especially in those areas where the location of the water’s edge may have changed over time by changes in water levels or build up of soils.

In representing a municipality recently, I had the pleasure (or pain) of being involved in such a war.  The municipality has an unopened road allowance that goes to the water’s edge of a certain bay.  Historically, local residents have used this road allowance.

It was the position of the waterfront landowners on one side that the water levels had receded since the original survey ( back in the 1830’s!) and therefore the road allowance at that point had to be adjusted to accommodate the current reality.  Fair enough.  The debate was in relation to the extent of the adjustment.  Of course the landowner on the other side of the road allowance got into the debate.

A proceeding under the Boundaries Act was commenced by the first set of landowners.  We proceeded and obtained evidence that undermined their expert’s opinion as to where the original water’s edge was.  So at the eleventh hour, they withdrew their proceedings.

They then sued the municipality claiming all sorts of nasty things.  It was our position that the property issues needed to be determined by the specialized tribunal under the Boundaries Act.  So we all agreed to go back, and the landowners would start a new proceeding.

They did so, but presented an entirely different theory that called into question the location of the entire portion of the road allowance, not just at the water’s edge.

The implications were far broader, impacting properties all along down the line.

As luck would have it, I came across a provision in another piece of legislation called the Surveys Act.  This provision allows a municipality to make application to the Minister of Natural Resources to, in effect, re-survey the area in dispute, hold a public hearing and then make a binding determination.

As it turns out, this provision has not been used since the 1960’s.  Even the Ministry was confused when we submitted the application.

Ultimately the Boundaries Act tribunal has held its proceeding in abeyance pending the results of this long forgotten process under the Surveys Act .  The Boundaries Act process was trumped!.

The moral?

Sometimes if you do not like how the chess pieces are lined up, you have to change the entire board (apologies for mixing the metaphors).

I recently acted for a landlord concerning commercial premises it had leased to a tenant.  The tenant’s business was failing. The tenant made it clear that it was not going to be able to meet its obligations.  With the full knowledge of the landlord, the tenant packed up its goods and vacated the leased premises.  The tenant then dropped off the keys to the leased premises to the Landlord.

Since there were personal guarantees to the lease, I commenced an action against the tenant corporation and the guarantors.  I subsequently brought a motion for Summary Judgment for both the arrears in rent and for the ongoing rent that would come due up to the point that the landlord was able to re-let the premises and mitigate the potential loss.

The guarantors defended on numerous grounds (which the court ultimately referred to as ‘limp defences’), including the defence that the landlord had agreed to the ‘surrender’ of the leased premises and that the landlord agreed to resume possession.  The guarantors based their argument on the fact that the landlord was aware of their impending departure, allowed them to take chattels and did not complain when the keys were dropped off.

The issue of ‘surrender’ in connection with the lease actually became problematic in the conduct of the litigation.  So what legally is meant by the term ‘surrender’ and what are its implications for a landlord?

Firstly, a surrender occurs  where there is an agreement that the tenant will abandon the premises and the landlord will resume possession.  This can be done in writing where the parties explicitly document there agreement.  Alternatively, the actions of a landlord and tenant may amount to a surrender.  The net effect of surrender is that the landlord cannot claim for damages based upon an ongoing loss of rentals after the departure date of the tenant even though the lease may have several years to go before expiry.  Obviously, this could be very costly to the landlord who may have difficulty in finding a new tenant to lease the premises.

Ensuring that the intent of the parties regarding a proposed surrender is documented can be critical to the outcome of litigation if a dispute on the issue arises.  However, and as in the case discussed above, a tenant can attempt to establish surrender in the absence of such a documented agreement.  Where there is no documented agreement explicitly dealing with the proposed surrender, the party relying on surrender may try pointing to the conduct of the parties (and in particular, the conduct of the landlord) to set up a surrender ‘at law’.  Essentially the tenant is pointing to evidence that the landlord agreed to retake possession of the lease premises and, as a result, the tenant conducted itself in such a way as to effect its legal position that the landlord had through its actions accepted the surrender.  In other words, the tenant’s position was this:  ‘but for’ the landlord’s actions, the tenant would have taken other steps to try to mitigate the loss (i.e.: find a sublettor).

Fortunately in this case, my client prudently delivered correspondence both before and after the tenant’s departure making it clear that the tenant remained responsible for the ongoing rent.  The tenant’s argument that the landlord had, through its actions, accepted the surrender was refuted by clear documentary evidence.

The morale of this story is that landlords need to be careful when a tenant is departing to ensure that they do not forego their legal rights inadvertently.  More importantly, always take steps to clearly document your intent.