The intent of the Condominium Act

Yim v.Talon
Ontario Superior Court of Justice
Docket: CV-14-121050-00
Before: Justice Gilmore
Heard: 14 December 2015

This case is important as a purchaser managed to get his deposit back after rescinding a purchase agreement of a hotel unit at the Toronto Trump Hotel.

However, in my view, the most important point is when the judge said that the intend of the Condominium Act is consumer protection and that this must be viewed in a liberal way. The exact wording is:

[40] The Condominium Act is a piece of consumer protection legislation, and as such, should be interpreted liberally and broadly. In the absence of any case law, and keeping in mind the legislature’s goal of protecting purchasers of condominiums, the court should not read in a requirement that all notices of rescission given under s. 74 of the Act include the precise term "rescission."

It continues at paragraph 43.

[43]  Consumer protection legislation must be interpreted generously in favour of the consumer (Seidel v. TELUS Communications Inc., 2011 SCC 15 (CanLII), [2011] 1 S.C.R. 531, at para. 37).  While it is true that the applicants are not unsophisticated parties and had the benefit of legal counsel, in general, the legislation’s policy objective of protecting consumers in an asymmetric contractual relationship would not be well-served by reading in a requirement that the notice of rescission must include the term “rescission”. This is particularly true given the “fundamental confusion” between rescission and repudiation, as noted by the Supreme Court in Guarantee Co. [Guarantee Co. of North America v. Gordon Capital Corp., 1999 CanLII 664 (SCC), [1999] 3 S.C.R. 423, at para. 39).  An interpretation more in line with the policy objectives of the Act would require only that the purchaser’s notice make clear its intention to undo or unmake the contract and restore the parties to the status quo ante, a “crucial aspect of rescission” (Guarantee Co., [supra,] at para. 46).  In this case, that would include the return of the deposit, which is provided for in the Act.

[44]     I find that there are no statutory requirements for the form of the notice of rescission under the Act, other than that it is in writing.

[45]     In the face of an absence of case law on this point, and given that the Act is a piece of consumer protection legislation, as well as the “fundamental confusion” over the meaning of the term rescission purchasers should not have to explicitly use the words “rescission” or “rescind” when giving notice.

[46]     I agree that the notice of rescission provided in Mr. Lee’s letter of February 23, 2012 is imperfect.  However, I also find that the Act does not require perfection, only a certain degree of clarity. As long as the notice fulfills the statutory requirements and makes clear the purchaser’s intention to undo or unmake the agreement, such as by requesting the return of their deposit, the notice should be considered sufficient.

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