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April 23, 2018

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PM #40762529 $5.00 • Vol. 29, No. 14 April 23, 2018 L AW TIMES C O V E R I N G O N T A R I O ' S L E G A L S C E N E • W W W . L A W T I M E S N E W S . C O M OCA rules title insurance exception did not apply Camille Dunbar says that when contracts around title insurance are ambiguous, courts have to go down a certain interpretive path. Photo: Robin Kuniski AMEND LEGISLATION Money-laundering laws need to be cleaned up P4 END STIGMA ON HIV Discrimination remains pervasive P7 FOCUS ON Professional Regulation & Discipline Law P9 Follow BY ALEX ROBINSON Law Times T he Court of Appeal has found that an exclusion barring a victim of a mortgage fraud from col- lecting insurance coverage did not apply when the funds in the trans- action were transferred through lawyers' trust accounts. In Nodel v. Stewart Title Guaranty Company, insurer Stewart Title refused to pay Karl Nodel, a private mortgage lender, for a loss he suffered from a mort- gage fraud. The insurance com- pany cited an exception in Nodel's policy that applies if mortgage proceeds are paid to anyone other than the registered titleholder. As the funds went through Nodel's lawyer's trust account and that of the borrower's lawyer, Stewart Ti- tle argued that the exception had been triggered. Nodel brought civil action against both Stewart Title and his lawyer, Isaac Singer, in the trans- action, which was settled. Singer then commenced a third-party claim against Stewart Title, taking an assignment of Nodel's rights under the policy, including his claim against Stewart. An application judge found exception did not apply and that Nodel was covered, as the regis- tered titleholder was paid when the borrower's lawyer received the funds in trust. The Court of Appeal agreed in a 2-1 decision, finding that, in law, Nodel's payment was to the borrower. The court rejected an argument that trust payments to lawyers do not provide a "com- mercially reasonable mode of pay- ing mortgage advances given the risks of mortgage fraud." Lawyers say the Court of Ap- peal's decision solidifies the on- going role of lawyers in real estate transactions in Ontario. Gavin Tighe, one of the lawyers repre- senting Nodel and Singer in the application, says that, if the deci- sion had gone the other way, it would significantly diminish law- yers' roles in private lending trans- actions as it would remove the bor- rower's lawyer from the financial aspect of the transaction. "Given the number of law- yers who practise real estate, they might be concerned about that," says Tighe, a partner with Gardin- er Roberts LLP. See Decision, page 2 Judge orders punitive damages to be paid BY ALEX ROBINSON Law Times A small claims deputy judge has ordered a law- yer to pay punitive dam- ages after he threatened criminal charges against a physio- therapist who was bringing a civil action against him. Deputy Judge Roderick Mc- Dowell found that Hamilton law- yer Girolamo Falletta's conduct in a dispute over $1,300 was "wrong and deserving of condemnation." The matter started as a simple contract case involving an unpaid account the physiotherapist had charged a personal injury client of Falletta. As the client did not have the ability to pay for physiother- apy, the lawyer and his firm took an undertaking to protect the ac- count. When the physiotherapist con- tacted Falletta about the unpaid account, the lawyer responded by threatening criminal charges, which he continued to do when the physiotherapist said he would pursue a civil claim, according to the decision. McDowell found Falletta's conduct "astound- ing and reprehensible" as well as "wrong and deserving of condem- nation." Thomas Mathews, the lawyer representing the plaintiff, says the decision serves as a reminder for lawyers that they have to answer to the courts for their own actions at all times. "It's a privilege to practise law and sometimes it's easy to get car- ried away with our own capabili- ties and powers," he says. In March 2017, the physio- therapist sent an email to Falletta demanding payment of the out- standing invoice. In response, Falletta said, "Go ahead. My client states that the amounts you charged were not what was agreed upon. In my opinion that constitutes fraud. If you want to proceed with that I will be attending at the local pros- ecutors office to lay charges for See Physiotherapist, page 2 Thomas Mathews says a recent Small Claims Court decision sends a clear message as to the kind of conduct courts expect from lawyers. FULL DAY IN-CLASS & LIVE ONLINE ACCESS CHAIRED BY Donald B. Johnston, Aird & Berlis LLP | Natasha Ell Saunders, Vice President, Legal Affairs, TekSavvy Solutions Inc. WWW.TECHLAW-CONFERENCE.CA 2018 TECHNOLOGY LAW SPRING FORUM MAY 28-29, 2018 Powered by REGISTER NOW Save 10% before April 30, 2018 Untitled-2 1 2018-04-17 12:33 PM Legal News at Your Fingertips Sign up for Canadian Legal Newswire today for free and enjoy great content. Visit newswire-subscribe ntitled-1 1 2018-04-17 12:27 PM

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