The Lawyers Weekly - December 3, 2010

resort. Appellant purchased the property in 1994. Its use, between 1994 and 1999, was governed by a zoning bylaw pursuant to which appellant was required to enter into a restrictive covenant to limit construction on the property to three one-family dwellings and three guest cabins. Appellant personally used one of the dwellings on the property, and operated a commercial resort out of the other structures. Throughout, the property was zoned rural. Commercial guest accommodation was not identified as a permitted use for such property under the former bylaw in force when appellant took ownership. The township sought an injunction to enforce the bylaw. The judge found that the former bylaw did not permit such use of the property, noting that elsewhere in the bylaw such a use was permitted in areas zoned commercial. The prohibition section was repealed by the current bylaw, but no change was made to the section dealing with permitted uses.

HELD: Appeal dismissed. The former bylaw did not intend the lodgings on appellant’s property to be used as commercial lodgings. The guest houses, permitted under the bylaw, were not to be rented out to members of the general public, but were required to be linked to the use by single families of the larger units as single-family dwellings. The repeal of the prohibition on commercial accommodations on property zoned rural in the current bylaw did not change that portion of bylaw permitting only single family dwellings on such property. The judge did not err in granting an injunction to enforce the bylaw.

North Pender Island Local Trust Com-
mittee v. Conconi, [2010] B.C.J. No.
2152, B.C.C.A., per Tysoe J.A. (Rowles
and Bennett JJ. A. concurring), Nov. 5/10.
Digest No. 3029-017 (Approx. 15 pp.)
REAL PROPERTY
CERTIFICATE OF PENDING LITI-
GATION – Court discharged certificate
of pending litigation in the absence of
evidence supporting an agreement to
provide a right of first refusal.

Motion for an order discharging a certificate of pending litigation. Plaintiff claimed a right of first refusal with respect to defendants’ property and had moved, without notice, to obtain the certificate of pending litigation. Three families agreed in the 1960s to buy land and build cottages together. DW took title of the land as trustee for himself, plaintiff and the late SW. The land was severed into three parcels, with each parcel being owned exclusively by one of the three parties. DW maintained that the subject of possible rights of first refusal was raised well after the cottages were built, but that SW had vetoed such an agreement. DM acknowledged that he and plaintiff’s husband, LP, later informally agreed that, in the event they decided to sell their cottage, they would offer the other the opportunity to purchase it before putting it on the market. There was no document evidencing a right of first refusal and defendants took the position that there was no evidence of past performance referable to a right of first refusal.

HELD: Motion allowed. The certificate of pending litigation was vacated. The parties entered into written agreements, so were clearly aware of the importance of a written instrument when dealing with land, but there was no document evidencing a right of first refusal. There was also no evidence of past performance of a nature to support an oral agreement affecting the claim to a right of first refusal.

Prusky v. Warsh, [2010] O.J. No.
4587, Ont. S.C.J., Haberman (Master),
Oct. 28/10. Digest No. 3029-018
(Approx. 17 pp.)
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the controversy surrounding the respondent’s stewardship of the union’s finances, inferring that he was guilty of fraud or misappropriation and that the police investigated the union’s finances. A forensic report subsequently concluded that there was no evidence of fraud or misappropriation by respondent. The trial judge concluded that the inferences flowing from the three articles were false and defamed respondent. Appellants claimed the judge erred in rejecting their defences of statutory qualified privilege and responsible journalism.

HELD: Appeal dismissed. The trial judge did not err in finding that qualified privilege was not made out. The meeting of the union’s governing body was not a public meeting. There was a sufficient factual basis to support a finding that the representative committee did not intend the proceedings of that meeting to be communicated to a wider public. The three articles failed to fairly and accurately report the events. Appellants imported a high and unjustified level of reliability to the auditor’s findings, and falsely implied that the information in the articles had been objectively verified. The judge did not err in concluding that appellants had not demonstrated the level of journalistic responsibility required to avail themselves of the defence of responsible journalism. Appellants failed to demonstrate the required standard of diligence in their attempts to contact respondent and report his side of the story and to verify the reliability and status of their primary sources.

Hansen v. Tilley, [2010] B.C.J. No.
2112, B.C.C.A., per Neilson J.A. (Rowles
and Lowry JJ.A. concurring), Nov. 1/10.
Digest No. 3029-020 (Approx. 17 pp.)
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APPOINTMENT – Board of directors
of housing corporation entitled to legal
costs to advance defence to allegations that
they had mismanaged the corporation.

Appeal by the board of directors of a housing corporation from an award of $15,000 in costs for their legal fees incurred in relation to the corporation’s receivership. The corporation was placed into receivership by the provincial authority which funded it. The board opposed the receivership and retained counsel to assist it in so doing. The board was initially successful in applying for reimbursement of its costs from the receiver, but that decision was ultimately returned to the judge, who then concluded that the board had no right to retain counsel without the approval of the receiver. The judge awarded the board costs of $15,000 anyway, because the province and the city, which had subsequently provided the funding for the corporation, had not objected to the board’s retention of counsel and because the board’s counsel made submissions that were helpful to the court.

HELD: Appeal allowed. The board retained the right to retain counsel despite the appointment of the receiver. Absent that ability, the board would be unable to advance a defence to allegations that it had mismanaged the corporation. The board was entitled to costs on a partial indemnity scale paid by the receiver from the corporation’s funds. It was not entitled to indemnity for legal costs associated with other matters, including strategic planning and corporate restructuring, because it should have consulted with the receiver on those matters.

Peterborough (City) v. Kawartha Native
Housing Society Inc., [2010] O.J. No. 4538,
Ont. C.A., per Armstrong J.A. (Rosenberg
and Juriansz JJ.A. concurring), Oct. 26/10.
Digest No. 3029-019 (Approx. 10 pp.)
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DEFAMATION – Trial judge did not
err by rejecting defences of qualified priv-
ilege and responsible journalism in
respondent’s defamation action.

Appeal from a judgment awarding respondent $30,000 as damages for defamation arising from three articles published in a university student newspaper and on the paper’s website. Respondent was the financial and services co-ordinator of a student union. At the time, two factions of the union’s members were disputing the results of the annual election for members of its governing board. A forensic review of the union’s financial affairs had been critical of respondent’s skills and performance as manager of the union’s finances. Respondent was placed on paid leave and then terminated. The three articles commented on

UNDUE INFLUENCE – Applicant
unable to establish that her mother
lacked testamentary capacity or was
subjected to undue influence when she
executed her will in 1998.

Application challenging a will on the basis that the testator lacked capacity to make it and that it was made under undue influence. In 1998 wills were made by S, a lawyer, on the instructions of the testator and her husband. Each left their estate to the other. When the survivor died, everything was to go to respondent, who was one of their daughters. Respondent was also granted power of attorney. The husband died in 1999 and everything went to the testator. She died in 2005 shortly before her 91st birthday. At that time she had a house worth $400,000, $200,000 in liquid assets and a small amount of personalty. Applicant was another daughter.

HELD: Motion dismissed. The evidence was overwhelming that the testator had testamentary capacity in April 1998, when the wills were made. There were no suspicious circumstances surrounding the making of the will. The testator executed it and knew and approved of its contents. S testified that the testator and her husband came to see him on their own and not with either of their daughters. Their wills reflected what they wanted done. Respondent was unaware of her parents’ visit to S or of their wills until told about them by her father in 1999. There was no undue influence.