CAUTION: We have been advised that fraudulent emails with a modified domain name have been sent by a source purporting to be from Aird & Berlis LLP. These communications are not legitimate and are not from Aird & Berlis LLP. Disregard any such emails and do not engage with the sender or the email in any way. Please report the attempted fraud by contacting the Canadian Anti-Fraud Centre and by emailing Aird & Berlis LLP at help@airdberlis.com.

Back to all publications
Apr 8, 2021

Court of Appeal Upholds Dismissal of Condominium Class Action Based on a Limitation of Liability Clause

By Brian Chung and Steve J. Tenai

This is an update to our July 3, 2020 bulletin summarizing Justice Perell’s decision in Ritchie et al. v. Castlepoint Greybrook Sterling Inc., 2020 ONSC 3840. In that decision, he dismissed a proposed class action seeking damages on behalf of purchasers under purchase agreements to a cancelled pre-development condominium on the basis of an exclusion clause limiting damages in the agreement.

On appeal, the appellants argued that the Tarion addendum, which prescribes a compulsory framework for closings imposed under the Ontario New Home Warranties Plan Act, does not allow parties to limit their obligations under the addendum, including the duty to exercise reasonable efforts to satisfy a financing condition and bring the development to completion.

The Court of Appeal unanimously dismissed the appeal and upheld Justice Perell’s decision holding that the Tarion addendum does not alter the clear and unambiguous exclusion clause limiting claims for damages: 2021 ONCA 214. The Tarion addendum expressly provides for parties to be able to enter into termination agreements and releases provided that they do not exclude the rights of purchasers to the return of their deposits plus prescribed interest.

This is an important decision for many developers involved in pre-construction developments as most pre-construction condominium agreements include comparable exclusion clauses. The decision affirms that including exclusion clauses in pre-construction agreements limiting damages is a proper risk allocation strategy.

Related Publications

Publications Article
Ontario Government Announces Plan to Introduce Legislation Providing for Three Paid Sick Days By Michael F. Horvat and Meghan A. Cowan Apr 29, 2021 On April 29, 2021, the Government of Ontario announced that it would introduce new legislation th... On April 29, 2021, the Government of Ontario announced that it would introduce new legislation that would provide for three paid sick days for employees impacted by COVID-19.
Publications Article
Vaccinations and the Workplace: Update By Alex Kagan and Daria (Dasha) Peregoudova Apr 27, 2021 Since our last article on workplace vaccinations, the pandemic has significantly worsened, requir... Since our last article on workplace vaccinations, the pandemic has significantly worsened, requiring the dramatic reallocation of hospital resources, school closures and an extended “Stay-at-Home” order in Ontario. Employers are obligated under the Occupational Health and Safety Act to take every...
Publications Article
New “Go Public” Platform for Mid-Market Growth Companies: NEO Exchange Unveils G-Corp™ Pilot Program By Melanie Cole, Russell J. Sanders and Emily Chittick Apr 20, 2021 The NEO Exchange Inc. has introduced a new pilot program for a publicly-traded vehicle known as a... The NEO Exchange Inc. has introduced a new pilot program for a publicly-traded vehicle known as a Growth Acquisition Corporation™.