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eLaw - Property and Succession Law Update
February 2015 - No. 73
ISSN 1916-3916
In This Issue
Trial Needed to Determine Property Dispute: MBCA
Interest in Land Required to Sustain Caveat: MBCA
Assisting Creditors Victimized by Dishonest Bankrupt: MBQB
Court Declines to Interfere Retrospectively in "Tax Avoidance Structure Gone Wrong": MBQB
Option to Purchase Land Valid: MBQB
Legislative Update
Major Changes at the Property Registry
Recommended Reading
Continuing Professional Development: LSM
MBA Programs

Trial Needed to Determine Property Dispute: MBCA

 

The appeal court upheld the lower court decision declining to grant specific performance and a vesting order with respect to real property in Vend-All Marketing Inc. v. Hunter et al., 2015 MBCA 10. The dispute concerned a 2008 land transaction which failed to close when the vendor discovered that it had inadvertently accepted an offer to purchase which included additional residential lots it had never intended to sell. The purchaser sued for specific performance and the vendor defended and counterclaimed, seeking specific performance of what it argued was an agreement to sell the commercial lots only. After some time the purchaser announced that it was prepared to proceed to purchase the commercial lots only as per the vendor's counterclaim, but when this offer was rejected the parties returned to court, both seeking to amend their original pleadings. The judge allowed the amendments, dismissed the purchaser's claim for specific performance with respect to the commercial lots, and directed that the matter proceed to trial. The appeal court upheld this order, rejecting the purchaser's argument that the vendor's proposed amendments (including removal of its counterclaim for specific performance) constituted a withdrawal of admissions that would require grounds for leave to be established under QB Rule 51.05. In the court's view, the statements made by the vendor in its defence and counterclaim were clearly not "admissions contemplated under Queen's Bench Rule 51.06(2)"...but "simply denials of allegations and claims for relief and, therefore,...subject to amendment under Queen's Bench Rule 26.01." (para.66).

Interest in Land Required to Sustain Caveat: MBCA

 

The appeal court ordered discharge of a caveat in Laba et al. v. 4027183 Manitoba Ltd. et al., 2014 MBCA 107, finding that it was not open to the motion judge to uphold the caveat on a basis not set out in the caveat itself. Manitoba law is clear, said the court, that if "a claimant has no interest in the land, the caveat cannot be sustained." Given the motion judge's finding that no agreement existed between the parties, the requisite interest in land had not been demonstrated.

Assisting Creditors Victimized by Dishonest Bankrupt: MBQB

 

In Grewal et al. v. Brar, 2015 MBQB 3, the court granted four declarations confirming that an earlier judgment and order for costs against the respondent were validly filed against his land and had not been discharged by his assignment into bankruptcy. The court was satisfied that the respondent had used fraudulently obtained powers of attorney to gain control over the applicants' property in India, and that, pursuant to s.178(1)(e) of the Bankruptcy and Insolvency Act, his bankruptcy discharge order did not release him from the liability resulting from this fraudulent misrepresentation. The court also found that the solicitor/client costs awarded against the respondent arose from his misconduct and were also a debt and liability within the meaning of s. 178(1)(e).

Court Declines to Interfere Retrospectively in "Tax Avoidance Structure Gone Wrong": MBQB

 

In Shinewald v. Putter et al, 2014 MBQB 254, the court agreed to prospectively vary a trust by adding the son of the settlor as an income beneficiary as of the date of the application, but declined to make its order retroactive to the date when the son's wife (an income beneficiary along with their children) died. The trust was intended to benefit the family unit, but had been structured in a tax advantageous way such that the son was not an income beneficiary. The fact that the son had been receiving unauthorized income payments from the trust since his wife's death came to light when the CRA audited his business. The court agreed that the variation was "justifiable" under s.59(7)(b), but only prospectively, since it is not the function of the court to help taxpayers "rewrite history." This TDS article discusses the decision.

 

Option to Purchase Land Valid: MBQB

 

The court granted a tenant summary judgment to exercise a 17 year old option to purchase land in Sturgeon Tire (1993) Ltd v Burron, 2014 MBQB 240, rejecting the landlord's argument that the option had expired when the first of several tenancy terms ended without formal evidence of renewal. Although the landlord accepted rent through three renewal terms, it argued that the tenant had not provided evidence of appropriate renewal and was an over-holding tenant. The court disagreed, finding that all parties had treated the lease as if it was appropriately continued and that it would be unfair to allow the landlord to now take the position that the lease was never continued.

 

Legislative Update

 

The new Condominium Act and Regulation M.R. 164/2014 came into force February 1, 2015, significantly changing condominium practice in Manitoba. Details of the new regime can be found in the Manitoba government's Guide to The Condominium Act (especially the highlights section), in the explanatory note to Bill 40, and in this article by Albina Moran from the February 2013 CBA National Real Property section newsletter. This Property Registry notice describes the additional forms which have been approved for use under the new act (in addition to Forms 1-15 as prescribed by the regulation).

 

The government has introduced two new bills pertaining to real property issues this session:

Bill 10,The Municipal Amendment Act - introduced December 3, 2015, this bill provides that council may not repeal or amend a French language services by-law in a manner that reduces the availability of municipal services or documents in the French language without the approval of the majority of council members, plus one, and the minister.

Bill 13, The Planning Amendment Act (Special Planning Areas) - this bill replaces the provisions of The Planning Act that deal with special planning areas, establishes the Inland Port Special Planning Area, and enables other special planning areas to be established by regulation. See the explanatory note for further details.

Bill 70, The Real Estate Services Act, introduced last spring, is currently at the report stage. As noted in the explanatory note, it replaces The Real Estate Brokers Act and makes consequential amendments to several other acts to address concerns about the regulation of real estate services.

Major Changes at the Property Registry

 

Titles Online, a new enhanced online search for titles, will be launched effective April 26, 2015, replacing and ending access to the existing Manitoba land titles system. Step by step guides and training sessions will be provided to facilitate access to the new system. This notice provides further details of the change and advises of the title search fee increase effective on the date the new system launches.

 

The Property Registry has changed its website and online services addresses effective February 1, 2015. The Registry is also transitioning to provide in-house technical support, and security application forms can be downloaded from the website. For further details see this TPR notice.

The Property Registry is also implementing a new accounting system this month, as described in this notice. As a result, clients doing business with the Registry are required to complete deposit account information and firm information forms, available on the Registry website.

Recommended Reading

Continuing Professional Development: LSM

 

Wills that Work: Practical and Proficient Drafting - Note: this program is full, but you may add your name to the waiting list by completing this form. Presenters Eleanor Wiebe and Caroline Kiva will review common issues in will drafting and discuss how to avoid falling prey to the kind of errors made by both experienced practitioners and neophytes at this afternoon program on February 24, 2015. Registrants will receive a copy of Drafting Wills in Canada: A Lawyer's Practical Guide, a CCH publication that includes line-by-line drafting analysis and a DVD containing hundreds of precedents.

 

Estate Administration for Paralegals and Support Staff - Presenters Cynthia Hiebert-Simkin and Angela Bowman will discuss the processes they follow in working as a team on estate files at this February 27, 2015 lunch program for support staff. Register your staff to attend in person or by teleconference (group discount available).

Hot Topics in Real Estate 2015 (2 Program Dates Available) - Two dates have been set aside for this popular annual program, which will take place from 1:00 to 4:00 pm on May 6 and May 7, 2015 in the Law Society classroom. Experienced practitioners, representatives from the WLTO, and a mortgage brokerage will discuss the new condominium legislation, powers of attorney, mortgage issues, municipal subdivisions and more. Register early to confirm your preferred date.

Lawyers and Governing Boards: Avoiding Common Pitfalls - Presenters Bruce King, Doug Finkbeiner, QC, and Tana Christianson will discuss the risks and responsibilities that come with board directorships and suggest strategies to minimize potential liabilities at this lunch program on June 10, 2015.  Register now to attend in person or by tele-presentation.

Everyday Ethics Series - There is one remaining session in this lecture series on ethics issues featuring Allan Fineblit, Q.C.: Glass 1/2 Full (Little Things that Cause Big Problems), on March 11, 2015. Register now to attend in person or by teleconference.

MBA Programs

 

Upcoming professional development programs offered by the Manitoba Bar Association include:

 

Leases and Other Big Real Estate: Danger Zones and Hidden Hazards - the CCCA section is hosting a dinner on March 11, 2015 with guest speaker Kenneth Beallor of Torkin Manes LLP,
who will discuss the essential elements of a variety of complex real estate transactions.

City of Winnipeg Zoning and Subdivision Matters - Martin Grady, Zoning & Permits Administrator for the City of Winnipeg, is the guest speaker at the March 12, 2015 meeting of the Real Property Law section.
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