Law Times

Law Times • December 14, 2015 Page 5 www.lawtimesnews.com storey home in 2006. In 2013, they learned that a load-bearing wall had been removed during reno- vation work undertaken by the previous owner without a build- ing permit. at made the second floor unsafe. e city issued a remedia- tion order, requiring the couple to temporarily support the floor and they claimed under their title policy. e couple brought a sum- mary judgment motion, but the lower court judge ruled that their title policy did not cover the situation and held their title was unaffected by the unpermitted construction because the house still remained marketable, albeit not worth what it was before the defect was discovered. e judge noted that the city work order was not registered on title, and he granted summary judgment in favour of Chicago Title. On appeal, however, Justice C. William Hourigan disagreed with the motion judge's interpretation of the contract. Hourigan said the judge acted on his "own volition" when he held that for a municipal work order to affect an owner's interest in his or her property it must be registered on title. Hourigan wrote that's not how the process works and the find- ing was "not supported by any evidence." Rather, he wrote, "they are a defect that can only be discovered by what are commonly known as 'off-title searches.'" LAWPRO, which intervened in the case, provided evidence involving a 2005 agreement between it and the major title insurers, where the real estate transaction levy would be waived in exchange for title insurers re- leasing Ontario lawyers for any claims arising under a policy and indemnifying lawyers against any settlements or judgments involv- ing title-insured transactions. LAWPRO's affidavit stated it understood the definition of title meant more than claims and im- pediments registered against title but included defects that could only be discovered through off- title searches. LAWPRO argued that if the lower court ruling wasn't over- turned, then its agreement with title insurers would not cover claims that arose off-title and LAWPRO would bear the re- sponsibility even though it waived the transaction levy. Hourigan agreed, noting that "the restrictive scope of title in- surance contemplated by the motion judge would cause chaos in the real estate bar as, no doubt, purchasers of title insurance throughout the province have instructed their solicitors not to conduct the off-title searches on the understanding that such de- fects were covered by their title insurance." e result, he said, was an "un- duly restrictive" interpretation of the coverage, and that amounted to an error of law. Hourigan cited the section of the policy dealing with unmar- ketable title and disagreed with the motion judge's finding that the homeowners' title was not af- fected, because they could still sell their house. "e fact that someone might be willing to purchase a danger- ously defective building does not mean that it is marketable under the title policy." He noted that the marketability provision needed to be construed broadly under insurance contract interpretation principles. Hourigan said the danger flowed directly from the previous owner's failure to obtain the nec- essary municipal approval for the changes, and that failure made the property unmarketable within the definition of the title policy. He awarded the couple their costs for the appeal and the earlier motion application. When reached, Robert Dow- han, counsel for Chicago Title, had yet to discuss the case with his cli- ent and declined to comment. In addressing the scope of ap- pellate review of a lower court ruling involving a contract, Hou- rigan noted that the Sattva case has been the topic of much discussion among legal commentators. In distinguishing the situation from Sattva, which dealt with an arbitration award and review, Hourigan noted that "standard- form contracts are oen highly specialized contracts that are sold widely to customers without ne- gotiation of terms" and applies equally to everyone who buys one. Such a policy, he wrote, "is of general importance and has prec- edential value in a way that the interpretation of other contracts may not. "e rationales in Sattva that support adopting a deferential standard of review do not apply to contracts of this type, as the factual matrix does not mean- ingfully assist in interpreting them and their construction has broad application," Hourigan wrote. So the "correctness stan- dard of review" applies to ensure that "appellate courts are able to fulfill their responsibility of en- suring consistency in the law. LT NEWS Sattva doesn't apply to standard form contracts Continued from page 1 The Canadian Lawyer InHouse 2016 Innovatio Awards is the pre-eminent award program recognizing innovation by members of the in-house bar within the Canadian legal market. The third annual awards celebrate in-house counsel, both individuals and teams, who have found ways to show leadership by becoming more effi cient, innovative and creative in meeting the needs of their organizations. For more information, please contact Jennifer Brown Email: jen.brown@thomsonreuters.com | Phone: 416-649-8867 NOMINATIONS ARE OPEN! We are looking for Canada's most innovative in-house counsel NOMINATE YOURSELF OR YOUR DEPARTMENT IN THE FOLLOWING CATEGORIES: • Law department management • Diversity • Best practices in compliance systems • In-house M&A/Dealmakers • Working with external counsel • Litigation management • Risk management • Tomorrow's leader in innovation • New this year: Law department leadship NOMINATIONS CLOSE FEBRUARY 15, 2016 Nomination forms and more information can be found at: www.innovatio-awards.com Constitution Act challenges. With the Charter of Rights and Freedoms replacing the Constitution Act and the eventual addition of the Charter's s. 15 equality rights in 1985, the program's mandate was expanded to support Charter challenges based on equality and multiculturalism rights. "e reason it's so important is that the way our system is set up, our democracy, constitutional rights are enforced by the courts and it's the courts that hold the government accountable for those rights," Lugtig says. She says the challenges program recognizes that some people are more vulnerable than others within a society and because "there's certain basic rights that we as a society want to protect to have a flourishing community. "ese two kinds of rights [equality and language] are ones where if people aren't given financial means and other supports, they won't be able to go to court, and if nobody is holding government accountable, it's quickly obvious that the rights aren't meaningful," Lugtig says. Canadian Defence Lawyers president David Bertschi says his organization also welcomes a re-in- vented challenges program created with a clear man- date and operated by independent oversight. He says some of the opposition to the previous versions were based on concerns of governmental bias toward or- ganizations that supported the political wills of the governments in charge at the time. "ere was a lot of discussion [in 2006] about the government funding providing unequal access to justice for certain groups and the alleged bias and I think that's why the mandate will be very im- portant," he says. "When you're dealing with a pro- gram that is predicated on assisting and providing access to justice and essentially a review or testing of federal legislation, there has to be a balanced ap- proach to it and, lastly, it has to be independent." Prior to the its 2006 demise, the CBA had been lobbying for additional funding for it and for an increased mandate on the equality rights side to in- clude challenges to provincial and territorial laws. Lugtig says that if reintroduced, the CBA would hope the increased mandate proposal would be re- considered as well. "e program was really innovative and seen as a model around the world because it had at its base the involvement and voices of the very communi- ties whose rights were being advanced," she adds. It also assisted by providing case research, edu- cational assistance for people to better understand their language or equality rights, and how to access the program to advance those, and she hopes those aspects remain if not expand. Bertschi says he, too, hopes the new version in- cludes the opportunity to "enhance the role of pro- vincial and territorial governments" in a co-opera- tive, equally accessible forum for all. "When you look at it, it had its shortcomings in the past; a lot of the poverty and social access to justice is- sues relate to provincial matters," he says. "Society is enhanced by it [providing funding for provincial chal- lenges] as opposed to restricted by it." Just before the program was revoked, it ex- panded funding for equality rights negotiations to build policy and law through dialogue, rather than through the court, says Lugtig — an important el- ement to ensure continues in a new vision of the program. Law Society of Upper Canada Treasurer Janet Minor says her organization welcomes any policy that increases access to justice. "I'm quite aware of the expenses involved in com- plicated constitutional cases and the difficulty pres- ent for individual litigants," she says. "We anticipate that it'll be an important contribution in enhancing access to justice and a positive step; we're looking for- ward to hearing about the details ourselves." Minor says it will be up to the government to de- cide what, if any, new elements or focus the challenges program may take, but adds that in determining what matters to fund, there must be "at least some degree of independence in the assessment." Lugtig notes "there continues to exist all manner of equality issues that arise with respect to government policies and practices. If you don't have an effective mechanism for people to raise these questions in the courts, then when government is setting policy they are not necessarily as strongly tuned to the potential impact." She adds there are ample opportunities for the program to be effective in dealing with burgeoning refugee and immigration issues, racism, sexual equal- ity rights, and indigenous community rights. "I wish I could say we're a completely just and equal society in Canada, but we're not and no one is around the world." LT A chance to address social justice Continued from page 1

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