Skip to content

Narrow screen resolution Wide screen resolution Auto adjust screen size Increase font size Decrease font size Default font size default color brick color green color
PRE-CONSTRUCTION buyers lose LOSS OF BARGAIN class action : cancelled MUSEUM FLTS 2020/07/06 23:02  
not legal advice as usual.

As Richard Forster warned here many times, pre-construction condo purchases can be loads of grief . . .

Ontario Superior Court has rejected a loss of bargain / loss of profit etc class action launched by frustrated would-have-been-buyers after the developer cancelled in fall 2017 a 179 unit Toronto residential condo project called Museum FLTS.

The market was soaring . . .

Disappointed would-be unit buyers try to claim the real reason for termination - ostensibly for project financing problems - had really been a failure by developers to take commercially reasonable measures to secure the needed financing.

Winning counsels' article points to a so-called exclusionary or exculpatory escape clause ( recited by the judgment as # 28 ) merrily shielding the cancelling developers from doing more than refunding deposits with interests.

Justice Perell interestingly also traces the evolution of contracted exculpatory shields. The late England & Wales legal superstar Lord Denning had tried to limit the potential for misuse of such clauses to outcomes NOT FUNDAMENTAL between the parties. For good or ill, that line was ( ? unfortunately ? ) not pursued in the legal universe . . .

July 3/20 “Court Enforces Exculpatory Clause Dismissing Condominium Class Action” by Steve J. Tenai, Brian Chung and Martin Henderson ( Aird & Berlis LLP ) dismissing-condominium-class-action

Ritchie et al v Castlepoint Greybrook Sterling Inc. 2020 ONSC 3840 issued June 26/20 (certification-summary-jdt).pdf?sfvrsn=f3745cd5_0
  The administrator has disabled public write access.
PRE-CONSTRUCTION buyers lose LOSS OF BARGAIN class action : cancelled MUSEUM FLTS 2020/07/07 14:45  
late to but with citations & lengthy footnotes :

( Ritchie et al v Castlepoint Greybrook Sterling Inc. 2020 ONSC 3840[/b] issued June 26/20 )
  The administrator has disabled public write access.
Defence costs awarded agqinst CLASS ACTION seekers (would-be buyers-cancelled MUSEUM FLTS condos ) 2020/08/13 16:32  
Not legal advice as usual.

Following up this "Proceeding under the Class Proceedings Act, 1992”, Mr Justice Paul Perell appears to have just hit the three class action seekers personally for most of the defence costs incurred by the winning development-cancellor.

Food for thought . . .

Pre-empted from obtaining a class action status, the three plaintiffs appear to be personally hit by ( boomerang ) COST award.

Against the three applicants after the class action attempt was summarily pre-empted upfront on the developer’s motion, ONSC Justice Perell awards the winning NON- developer $ 52.5 K out of the winning NON-developer’s declared defence costs of $ 68,400.

Mr. Justice Perell notes that the three would-be-buyers’ upfront attempt to establish a class action has been pre-empted upfront : he describes the sought class action attempt as now “moot”. This suggests that the three applicant would-be-buyers will have to personally suck up whatever is awarded to the winning developer without any sharing or public interest sorta shield.

perhaps their own lawyer’s costs have been waived by an out-of sight contingency deal ?

ie : Even if their own lawyer’s costs had been covered by some sort of a contingency arrangement, denied obtaining even a “class” status is there any clear indication they can personally escape sharing the developer’s awarded costs ?

Among the three, will only the 'deepest pocket' suck up the award ?

Xcrpt : “ . . . [4] The outcome of the three motions was that:

[2] (a) the Plaintiffs were granted leave to amend the Statement of Claim;

(b) Castlepoint’s summary judgment motion was granted;

(c) the Plaintiffs action was dismissed; and

(d) because the Plaintiffs’ action was dismissed, their certification motion was dismissed as moot....” – unquote

One more cautionary tale about the risks of buying "pre-construction"

Ritchie et al v Castlepoint Greybrook Sterling Inc. 2020 ONSC 4755 issued Aug 7/20
  The administrator has disabled public write access.
Thinking a LOSS OF BARGAIN class action ? 2020/08/14 18:03  
Again not legal advice

Thinking a loss of bargain / loss of profit class action after a cancelled condo project ? Looks generally like a job for serious skillsets, bucks & patience

Purely for comparison, the same ONSC Justice Perell was concurrently certifying a different class proceeding but in a product liability dispute.

He certified a ( product liability ) class action by 3 car purchasers against BMW on behalf of purchasers of certain older model Mini Cooper cars. BMW vigorously disputes the claims, which have not been tested in a court of law here.

Mr. Justice Perell held in April 2020 that the claimants had met a four part test for the ( first stage ) upfront certification. He next awarded $ 300 K to the class of claimants purely on the disputed certification issue on July 10/20.

Harris v BMW 2020 ONSC 4761 issued Aug 7/20 and

Harris v BMW 2020 ONSC 1647 issued April 2/20

Xcrpted April 2/20 :

". . . [70] For certification, the plaintiff in a proposed class proceeding must show “some basis in fact” for each of the certification requirements, other than the requirement that the pleading discloses a cause of action.[11]

[71] The some-basis-in-fact standard sets a low evidentiary standard for plaintiffs, and a court should not resolve conflicting facts and evidence at the certification stage or opine on the strengths of the plaintiff’s case.[12]

In particular, there must be a basis in the evidence to establish the existence of common issues.[13] To establish commonality, evidence that the alleged misconduct actually occurred is not required; rather, the necessary evidence goes only to establishing whether the questions are common to all the class members.[14]

[72] The some basis in fact standard does not require evidence on a balance of probabilities and does not require that the court resolve conflicting facts and evidence at the certification stage and rather reflects the fact that at the certification stage the court is ill-equipped to resolve conflicts in the evidence or to engage in the finely calibrated assessments of evidentiary weight and that the certification stage does not involve an assessment of the merits of the claim and is not intended to be a pronouncement on the viability or strength of the action.[15]

. . . . [74] Unlike most motions, where there is a level procedural playing field, for a certification motion, the proposed Representative Plaintiff has a downhill bunny hill ski slide to certification and the Defendant has a Mount Everest climb to resist certification.

[75] From an evidentiary perspective, while the rules of evidence remain in place, there is a vast difference between a finding that there is some basis in fact and a finding of a fact.

From an evidentiary perspective, there is a vast difference between an expert having a methodology for an opinion and having an opinion.

[76] These truths are painful for defendants, and sometimes the judge hearing the motion feels the pain of certifying what will turn out to be a meritless class proceeding, but certify he or she must, and defendants just need to get over it and move on to the merits part of the proceeding.

[77] And defendants aggrieved with the low standard for certification have the consolation that after certification, the litigation playing field immediately levels and defendants have the usual opportunities to settle or win the litigation.

After certification, there is equal litigation risks and equalized economies of forensic scale to contest the merits of the action.

[78] Resisting certification is often particularly difficult in in a products liability case. . . .

. . . . [139] There was no serious argument in the immediate case that if the first four certification criteria were satisfied, which they are, then representative plaintiff criterion would also be satisfied.

[140] I conclude that the representative plaintiff criterion is satisfied.” – unquote Justice Perell in Harris v BMW
  The administrator has disabled public write access.
Court of Appeal REJECTS APPEAL ( LOSS OF BARGAIN class action- cancelled MUSEUM FLTS) 2021/04/22 22:16  
Not legal advice, as usual.

ONCA Ontario's Court of Appeal has rejected an appeal by would-be-buyers by class action claims for loss of bargain after the cancellation of Toronto's MUSEUM FLTS project.

The panel agreed with Mr Justice Perell that the 'exculpatory clause' in the Developers' take-it-or-leave-it standard form limited the appellants' rights to anything beyond the statutory refund formula. Their class-action remains a rejected attempt without legislative intervention.

Ritchie et al v Castlepoint Greybrook Sterling Inc. 2021 ONCA 214 issued April 7/21

( The rationale from Ontario's topcourt in its entirety, because some folks may not be listening )


[1] This appeal turns on the interpretation of an exculpatory clause (clause 28) in an agreement of purchase and sale relating to the pre-construction sale of condominium units in a proposed development.

[2] In our view, the appeal cannot succeed.

[3] On a plain reading of clause 28, the plaintiffs (appellants) were limited upon termination of the agreement by the respondent to the recovery of their deposit plus interest.

We agree with the motion judge (paras. 81-85, 91-93), that the “Tarion” provisions incorporated into the agreement, which impose certain good faith obligations on the respondent, do not alter the plain meaning of clause 28.

[4] Clause 28 is concerned with the allocation of risk, as between the parties to the agreement, should the agreement be terminated.

The allocation of risk is achieved through the limitation upon termination of the agreement of the respondent’s potential liability to the plaintiffs (appellants).

As the motion judge held, the limitation on the respondent’s potential liability, agreed upon by the parties in clause 28, is not inconsistent with the letter of the Tarion provisions or the policy underlying those provisions.

[5] The appeal is dismissed.

Costs of the appeal to the respondent in the amount of $25,000, inclusive of disbursements and all relevant taxes." - unquote
  The administrator has disabled public write access.
contact webmaster