2024 ONSC 343, 2024 ONSC 343

CITATION : Jones v. Keay, 2024 ONSC 343 LINDSAY COURT FILE NO.: CV-13-44 DATE: 20240116 SUPERIOR COURT OF JUSTICE - ONTARIO RE: Doug Jones and Beverley Jones, Plaintiffs AND: C. Ian Keay, Defendant BEFORE: Justice V.

Christie COUNSEL: Don Rollo and Kateryna Borodenko, Counsel for the Plaintiffs Robert Macdonald, Counsel for the Defendant HEARD: December 6, 7, 8, 12, 2023 REASONS FOR DECISION Overview [ 1 ] This action involves clients suing their lawyer for faulty advice the lawyer gave in relation to a piece of property they were in the process of buying. [ 2 ] It is admitted that the lawyer owed a duty of care to the clients, the Plaintiffs.

It is admitted that the lawyer fell below the standard of care required of a prudent lawyer in the circumstances , specifically, in the faulty advice given in relation to Planning Act consent stamps and the bearing this may have on the ability to sever a cottage property that they were interested in purchasing, and did in fact purchase, in 2010. The focus of this litigation is on whether there has been any loss resulting from the actions of the lawyer. [ 3 ] To answer this question, it is necessary to complete a careful examination of the factual circumstances and leading legal authorities.

To a great extent, neither the facts nor the law is in serious dispute. Facts [ 4 ] The Plaintiffs, Doug and Beverley Jones, have been married for 47 years. They live at a home in Whitby, where they have resided for over 35 years. Doug Jones was a long-time employee of Ontario Power Generation (“OPG”). He started as a technician and worked his way up. He retired as a department manager with OPG, at the Pickering Nuclear Station, in the Scheduling and Planning Department.

After retiring from OPG in 2013, he was recruited and hired as a Site Manager Representative for the construction company, Black & McDonald, acting as a liaison between OPG and Black & McDonald, as well as running the site. Beverley Jones had a lengthy career in banking and retired in 2018. [ 5 ] At the relevant time, 2010-2011, the Plaintiffs were unsophisticated in real estate. They had no experience buying and selling real estate as a commercial venture.

They had only modest history buying and selling real estate, having purchased their current matrimonial home, and one prior matrimonial home, prior to this cottage property. [ 6 ] The Plaintiffs have been active cottagers their whole lives. Prior to purchasing the subject cottage property, they had been going to and spending time on Chandos Lake. Chandos Lake is said to be a “premier” location in which to own a cottage property, as compared to many other lakes in the Lake of Bays region.

Friends of theirs, who were neighbours on their street in Whitby, had purchased a cottage on Chandos Lake a few years prior, 8 or 10 years prior to 2010, and they would invite the Plaintiffs to come up and enjoy the lake with them. The Plaintiffs went to Chandos Lake on many occasions throughout those years and even trailered their own boat up to Chandos on occasion. The Plaintiffs had also helped their friends with some ongoing cottage association things. The Plaintiffs had become quite familiar with Chandos Lake.

Whenever the Plaintiffs would go up to Chandos Lake, they would grab a local real estate paper and always kept an eye on the local market, thinking it would be nice to buy there one day. [ 7 ] At the same time, Doug Jones explained that his parents had a camp in Sudbury. As his parents became older, it would be him and his son who would go up to open and close the camp and use it for a couple of weeks. However, as he and his son became older, this became more and more unworkable. Mr. Jones had a conversation with his father to express to him that this was becoming too much. Mr.

Jones suggested that it might be best for his father to sell the camp so that his father would not have to worry about it anymore and Mr. Jones would then look for a cottage in Southern Ontario, closer to where they lived. The camp in Sudbury was ultimately sold, at which time the Plaintiffs decided to get more serious about looking for cottage property, with their focus on Chandos Lake. [ 8 ] In the spring of 2010, the Plaintiffs were actively seeking to purchase a cottage on Chandos Lake.

They looked through real estate papers, looked on the internet, and chose a real estate agent in the local area in Apsley, Rick French of Bowes & Cocks, and asked him to take them out to view some cottages. The Plaintiffs told the agent what they were looking for, including something in the $250,000 to $300,000 range, with lake front, indoor plumbing, and preferably with four bedrooms to accommodate them and their three children.

As for location on Chandos Lake, they advised their agent that they were more interested in being on the main part of the lake, where the water was deeper, as they were boaters and wanted boat access onto the lake from their cottage. Chandos Lake is a large open

body of water, but also has a lot of smaller bays, where the water is shallower. [ 9 ] Through email exchange and phone calls, the Plaintiffs set up a meeting with Rick French in early April 2010. The Plaintiffs went to the area. Mr. French had a number of cottages – approximately 6 – to show them. Although they were more interested in the deeper water portions of Chandos Lake, they looked at what was available. One of the listings that they went to see, in fact a listing of Rick French, was the property at 385 Haggis Cove Lane, Apsley, in the County of Peterborough, located on Chandos Lake.

The recreational cottage property featured 300 feet of shoreline along Chandos Lake. [ 10 ] According to the listing, the property had originally been listed for sale in the amount of $449,000, but had been reduced to $399,900. The property was said to be a total of 1.43 acres. The overview description stated: CHANDOS LAKE: SUPER PRIVACY- 300 FT OF WATERFRONT. THIS PROPERTY HAS SEVERANCE POTENTIAL. (WAS 3 SEPARATE PROPERTIES). FACING SOUTH IN SHELTERED BAY, THE THREE BEDROOM, 2 BATH COTTAGE SHOW PRIDE OF OWNERSHIP WITH AN ATTACHED GARAGE TO STORE THE COTTAGE TOYS. APPLIANCE & MOST FURNITURE INCLUDED.

The sale was also said to include an aluminum boat, canoe, and paddleboat. The property was reported to be assessed at $269,750. [ 11 ] After seeing Haggis and other properties, the Plaintiffs went home and chatted about what they had seen. They discussed Haggis. They agreed that Haggis was over their budget, but considered that the vendors, Bruce and Beverley Adams, had the property listed for over a year, and the price had dropped over the time it had been on the market. Mr.

Jones suggested that if they could sever the property back to the original state of three nearly equal lots (each with approximately 100’ of waterfront), they could sell the properties, making money off the sales, and then take the profit and look for a nicer place on the main part of the lake. Mrs. Jones was not sold on the idea, but they agreed they had nothing to lose so decided to pursue the idea.

They continued to keep an eye out for other properties. [ 12 ] Before making any offer on Haggis, Doug Jones started to investigate his chances of obtaining severance and building permits for the severed properties. [ 13 ] On April 5, 2010, Doug Jones sent an email to Tim Powell, the Chief Building Official at the Township of North Kawartha. He explained that he was looking to purchase the cottage on Haggis Cove Lane on Chandos Lake and that he had “been told that the property has severance potential as it used to be 3 separate properties that are now one”. Mr.

Jones stated that he “would like to know if it is possible to re-instate the properties back to their original state without going through the formal severance process and if so what would need to be done” asking whether there was any way to “get confirmation that the property can be severed back into 3 properties with the potential to sell 2 of the 3 for future cottage building prior to purchasing the property.” [ 14 ] On April 6, 2010, Tim Powell responded that he was “not aware of the property” but “if these are properties that merged due to common ownership the owner at the time of merging is the only person who can recreate them through the Consent process (this is an Official Plan Provision)”.

Mr. Powell advised that he was not aware that there was ever a formal plan of Sub-Division for the creation of this property or properties, therefore, he could not really provide any information on what may be possible. Mr. Powell stated, “I do know that no one has inquired at this office about severance potential at this property, so I am just a little curious as to how someone could advise you that there is severance potential.” [ 15 ] On the same day, April 6, 2010, Mr. Jones responded to Tim Powell to provide more information about his understanding of how the properties were merged. Mr.

Jones indicated that he wanted to be “sure” about this issue before putting in an offer. Mr. Jones expressed his understanding as follows: Am I to understand that only the present owner can recreate the 3 properties through the Consent process? Is this easier to recreate the 3 properties by the existing owner than what I would have to go through if I were to purchase the property then try to sub-divide through the consent process?

If I were to purchase the cottage and then apply for the sub-division through the consent process, is your confidence low or high that I would be able to sub-divide into 3 properties through the normal Official Plan Provision based on what you have experienced. I understand if you are not allowed to make that type of comment. I am not surprised that no-one has inquired about the severance potential of this property as a lot of people trust what they are told but don't verify or have not been interested. [ 16 ] On April 7, 2010, Mr.

Powell responded, and repeated that, under provisions of the Official Plan, “the only person who can recreate properties that merged on title is the person who owned the property when they merged on title due to common ownership.” Mr. Powell stated that he had “reviewed all Municipal files in respect to this property and can find no information that it was ever several properties that may have merged.” Mr.

Powell went on to explain: For the creation of properties under provisions of the Zoning By-Laws in a Recreation Residential Zone each created property and the retained property must be 1.2 acres in area with 150 feet of Lake Frontage, if the proposed properties do not conform to that minimum standard then my thought is that you will not be successful with Severance Applications.

You may wish to have the County of Peterborough Planning Department complete a preliminary Severance review in respect to your proposal and this may give you a better idea of potential problems and issues with the creation of additional lots at this location. Mr. Jones acknowledged this response. [ 17 ] That evening, April 7, 2010, Mr. Jones sent an email to Rick French to advise him of the information he had received, including that “under provisions of the Official Plan, the only person who can recreate properties merged on title is the person who owned the property when they merged…” Mr.

Jones asked whether it was possible that the present owner “was not the person that merged the property but maybe the owner prior…” Mr. Jones also pointed out to Mr. French that, for him to subdivide the properties under provisions of the Zoning By-Laws, each created property must be a minimum of 1.2 acres with 150 feet of waterfront, which “would be difficult with the cottage built across the middle…of the property.” Mr. Jones asked Mr. French to shed some light on the severance potential. Later that night, Mr. French responded in an email to say he was also having discussions with Tim Powell. Mr.

French provided his understanding of the history of the property and confirmed that “Yes, there were 3 separate lots according to the present owner”. Mr. French also referred to a property in Gilmour Bay, for which a new owner was able to achieve severance but had to go to the Ontario Municipal Board to do it. Mr. French stated that he had contacted a local lawyer to get clarification; in fact, the lawyer, the Defendant, Ian Keay, was copied on the email. Mr. Jones testified that the email was somewhat confusing to him and did not give him a whole lot of information – “just some hope maybe”. Mr.

Jones had not spoken to Mr. Keay and had no knowledge of him prior to this. [ 18 ] On April 8, 2010, the Defendant, Ian Keay, sent an email to Rick French and Doug Jones, in response to an inquiry made by Rick French, indicating that he was going to do a “little research on this matter to see if this is a hill worth dying on.” Mr. Jones testified that he understood by this that there were some challenges that they needed to overcome, and that Mr. Keay was inquiring as to whether this was important to them. Mr. Jones had not asked Mr. Keay to do any research but he assumed Mr.

French asked him to do this and this was why Mr. Keay was coming back with these comments. In the email, the Defendant questioned whether, even if separated, would the Township issue building permits for those vacant lots. Mr. Keay stated: Typically, municipalities would allow land owners to restore historic lots of record with a severance application. The rationale being, we're not creating new lots, just restoring the status quo. This was known as a "technical severance". Under the Planning Act, there is no such thing as a "technical severance". It was more of a practical way of treating this type of matter.

It seems now that the municipalities aren't interested in treating these as favourably as they had treated the technical severances of previous years. That seems to be the kind of answer that Rick has gotten from Tim Powell at the Township. So our only hope is to find some jurisprudence that supports our position and take a rejection of the application by North Kawartha to the OMB. Mr.

Keay then asked the question: “Do we know whether we could even get building permits for those lots?” and, if yes, he would try to find some support for their position through case law, and then they could determine whether to proceed with an application. Mr. Jones testified that, when he first started all of this, he had no idea of legal terminology or real estate terminology, as it was all new to him. As for his understanding of what part Mr. Keay was going to play, Mr. Jones testified that his perspective was that this was a lawyer that worked with Mr.

French and that he was going to help with his opinion to clear some of the challenges that they had come across in trying to understand how to go about severing this property. It sounded to Mr. Jones that the municipalities were not as open to doing this type of severance as they had been in the past and there were going to be some challenges. Mr. Jones did not discuss or clarify what research Mr. Keay would be doing and there was no discussion about who would pay Mr. Keay. Mr. Jones believed that Mr. Keay would be doing it “out of the goodness of his heart”. Mr. Jones did not hear back about the research. Mr.

Jones testified that this email from Mr. Keay introduced him to the idea that he needed to consider whether building permits would be possible. Mr. Jones stated that this was important to him because, if they severed, the lots would not be worth anything if a person could not build on them. At this point, Mr. Jones had not retained Mr. Keay. Mr. Jones understood that Mr. Keay had not yet investigated title to the property. Mr. Jones agreed that in this email Mr. Keay suggested that severance may or may not be possible. [ 19 ] Later that evening, Mr. French asked Mr.

Jones, by email, whether this issue, of being able to sever and obtain building permits for those vacant lots, would be important to him and, if so, Mr. French would make inquiries of Tim Powell. Doug Jones responded a couple of hours later, “This would be a condition of considering the property.” Mr. French acknowledged the response and said he would advise as he knew more. Mr. Jones testified that he understood that Mr.

French was going to speak to Tim Powell to try to get further information. [ 20 ] On April 14, 2010, the Defendant followed up with Rick French and Doug Jones to see if there was any further information, as he was “curious whether N. Kawartha would issue building permits for these lots in the event they were still separate.” [ 21 ] On April 15, 2010, Doug Jones sent an email to Rick French, copied to the Defendant, indicating that he “did not fully understand” Mr.

French’s email from April 7, 2010, specifically, whether the information about the history of the property was obtained from the owner or from Tim Powell. Mr. Jones asked Mr. French if he had had a chance to speak to Tim Powell yet. On the same day, Rick French responded in part: If I understand the complete situation - I would say that there is still a small chance that the lots could be taken back to there original form BUT I would not buy the property and count on this!! I have been doing quite a bit of email discussion with a lawyer that I know and this is his response.

I really think that if the township try's to stop an existing lot from being developed then the township will be in for a lot of legal problem. Essentially they are making some lots worthless - through no fault of the owners! Mr. French provided the text of a message he received from the Defendant, stating that Mr. Powell was suggesting that there would have to be an application for an Official Plan Amendment in order to excuse the violation of the Official Plan. The Defendant had further advised Mr.

French that the “client” would need to apply for a severance and an Official Plan Amendment at the same time, both of which may be refused. The Defendant suggested contacting a private planner to produce an opinion on the new Official Plan and the likelihood of success. The Defendant stated, “I still think the first step is to determine whether there is any supporting case law for a severance app. when we're just trying to restore lots of record.” Mr. French also relayed information he received from the property owner and from Tim Powell.

As for Tim Powell, the information received was: A property with 100 feet of frontage and a depth of 130 feet would not be able to support a new cottage as it exists ie. a 100 ft. water yard setback and a rear yard setback, planning relief would be required to be able to place a cottage on a property such as you have described. Mr. Jones did not feel that this was a good example because the property at Haggis was 300 feet wide by 200 feet deep. Therefore, if divided into three properties, each would be around 100 foot of water frontage with 200-foot depth.

Therefore, with his understanding of the rules, that a person could only build 100 feet back from the waterline, it would still leave a lot of room within the setback rules to build a cottage. [ 22 ] On April 16, 2010, Doug Jones sent an email to Rick French in response to the information received. He stated in part: It sounds to me that Ian is saying that we could take the first step to determine in there is precedence of restoring lots of record. I find it

insufficient that Tim Powell can't find records of the three lots merged into one regardless of the Polaris system. I am going to see if I can find any information regarding records prior to the Polaris system. If we can't resolve this then it will be time to move on. As an FYI here is the North Kawartha Building Information wrt how close to the property boundaries one can build. I don't have the lot size other then 1.43 Acres (1.43 acre = 62290.8 ft2), but based on the frontage being 300' the depth should be ~ 200'.

Therefore a building could fit on a 100' x 200' lot as long as it's 100' from the water, 15' from the sides, and 20 from the rear. The owner stated that he did purchase the shore lines. Mr. Jones testified that he was surprised and disappointed that Tim Powell, an official at the Township, was not able to find any record of the property on the lake. At that time, Mr. Jones had a very limited understanding that the Polaris system had caused the properties to merge as they were all under the same ownership. Mr.

Jones stated that by “if we can’t resolve this” he meant that, if he could not get supporting information that demonstrated “fully” that he could sever the lots, there was no point in pursuing this any further, as he was only interested in the purchase if he could sever the lots. As for the availability of building permits on the three lots, based on the information he had come across, Mr.

Jones was confident that, indeed, they should be able to get a building permit to ensure the lots they were looking to sever were “buildable”. [ 23 ] On April 22, 2010, Doug Jones reached out to Tim Powell by email, quoting from the Official Plan that “existing lots that inadvertently merged due to common ownership may be separated to reflect the original lot configuration provided the subject property is still in the same ownership as when such merging occurred and it is permissible in local official plans.

The above technical severances do not necessarily represent the creation of a new lot when considering the number of new lots that can be created by consent from a land holding." Mr. Jones provided information about the history of the lots that had been received by the owner and then asked Mr. Powell a number of questions. Mr. Jones offered to meet the following week if it would be more convenient. [ 24 ] On April 23, 2010, Mr. Powell answered some specific questions from Mr. Jones, including where to possibly find evidence that the property was originally three separate lots.

The email stated: 1) If this information is available it will be at the registry office in Peterborough, as well it would appear that the current owner should be in possession of 3 deeds and plans to reflect 3 separate properties? 2) The Official Plan does recognize the ability of the owner as long as that person/persons were the owners when the property merged to recreate the subject property, based on O.P.

Provisions. 3) This process would be through the County of Peterborough Land Division process, if the property was 3 separate properties they would be eligible for Consent, they would have to comply with Health Unit requirements and if they did not comply with the minimum frontages and areas required under provisions of the Zoning By-Laws the owner would have to be successful with an amendment to the Zoning By-Laws to recognize any deficiencies. 4) If the properties were not capable of supporting buildings/cottages they will not be created /re-created so to answer your question a Building Permit would be available on an undersized property as long as all setbacks can be adhered to and you have other approvals as required and of course they are separate properties. [ 25 ] Based on this information, Doug Jones called the County of Peterborough and explained his situation. [ 26 ] On April 26, 2010, Doug Jones received a Severance Proposal Form and Land Severance Guide from a Planner at the County.

This provided him with the contact name at the County – Laura Jackson. Later the same day, he submitted a severance proposal to Laura Jackson, Planning Technician at the County of Peterborough, to inquire whether severance was possible from the County’s perspective. This was the first contact Mr. Jones had had with Laura Jackson.

In the cover email, he stated that, as a potential purchaser, he would “like to determine if the proposal will conform to the County Official Plan, Local Official Plan and any Local Zoning By-Laws prior to purchasing the property.” He also stated: …I would like to fully understand if the property can be returned to its original state of 3 individual properties and comply with the current requirements, including any minimum frontages, under the present owner prior to me purchasing the property(3 lots merger into1). … I will need to understand that the 2 vacant lots will be capable of supporting buildings/cottages so they will comply with all requirements when applying for a Building Permit potentially in the future.

I understand the North Kawartha setback requirements of a building being 100' from the water, 15' from the sides, and 20 from the rear. The proposal attached an aerial view of the property with lines drawn where the severance was proposed. [ 27 ] On April 27, 2010, Ms. Jackson responded that she was having some trouble with the attachments to the email. On April 28, 2010, Mr. Jones re-sent the proposal, including reference in his email to the County of Peterborough Official Plan and the Land Severance (Consent) Guide.

He asked the following: The question I have, is since the present owner did not ask for the 3 properties under their common ownership to be merged, but was merged through the use of the Polaris application, does this request not fall under the technical severances criteria? We are not asking for the creation of new properties but only to separate "to reflect the original lot configuration provided the subject property is still in the same ownership as when such merging occurred and it is permissible in local official plans". Does this request not fall under a technical severance?

How does one apply for a technical severance? Who has the authority to

determine whether this is a technical severance requesting a correction of title or not and under what basis? What does "technical severances.....shall be evaluated based on site specific considerations established in local official plans" mean? Mr. Jones testified that he included extensive narrative in his email because he was trying to understand the rules and regulations. He stated that the term “technical severance” came from documentation on the County’s website, but he now understands that this may have been outdated terminology.

His understanding of the merger process at that time was that, when the property was in the same name and abutted, the new Polaris system would merge the property into one, regardless of whether the owner agreed or disagreed. He understood that the properties were automatically merged. He wanted to explain in this email that he was not creating new lots, but rather simply wanting to revert them back to what they were. He was asking whether he needed to go through the whole process as this “seemed pretty straight forward”. Mr.

Jones explained in his testimony that the lots were merged under a process with no opportunity to agree or disagree, and he found it hard to believe that a person could not “turn them back if you so choose”. [ 28 ] On May 3, 2010, Laura Jackson responded by email that the “proposal may fall under a technical severance but I won't be sure until I get looking at it.” She asked if Mr. Jones could provide proof that the parcels were still in the same ownership as when they merged. Mr.

Jones obtained the various deeds from the owner through Rick French and forwarded those to Laura Jackson on May 10, 2010 and May 16, 2010. [ 29 ] On May 20, 2010, Mr. French sent an email to Mr. Jones stating that he had spoken to “the Adams…the other day and I really think that they are motivated to sell – why not try an offer – you might get a deal!” [ 30 ] On May 27, 2010, Mr. Jones responded that they were interested in putting in an offer, but that one of the conditions would have to be the severance and another viewing. Mr. Jones asked for Mr.

French’s recommendation on putting in an offer with this condition or waiting for feedback from the planning department. Mr. Jones also stated that they were interested in other “good listings” in the meantime. Mr. French responded within a few minutes asking for more information about the proposed severance condition, such as whether Mr. Jones would want the severance before closing or just conditional upon determining that severance can happen. On May 28, 2010, Mr.

Jones responded: I am thinking that we would need a condition for ~ 2-3 weeks which should provide the planning department the time to complete their initial review and tell us what will be required to severe the property. I sense that the severance will need to occur in the Adams' name; otherwise I think it could get lengthy and costly but I'm only speculating at this time. [ 31 ] On May 29, 2010, Mr. French sent an email to Mr. Jones stating: Heads up! A rep just showed the property and is showing it for the second time tomorrow!!

I think that we should pull the trigger on an offer as soon as possible!! [ 32 ] It had now been a number of weeks since the Plaintiffs viewed the property. Mr. Jones explained that properties were being bought up in the area, so there were other people looking to buy on the lake – in other words, there was a market. He was aware that someone could come along and put an offer on Haggis, therefore, he thought the best thing he could do would be to put a conditional offer in, to tie up the property, so that he could continue with the application and get the information he needed about being able to sever.

Therefore, a few hours later, on May 29, 2010, Mr. Jones responded to Mr. French and stated: Ok, let's put an offer in for $349,000 conditional on finance, cottage inspection, property severance, including furniture, appliances, & window covering as well as any of the other conditions you mentioned when we talked last time we were up. Later that night, Mr. French sent Mr. Jones a “first draft” of the offer. [ 33 ] While the proposal with the County was still pending, the Plaintiffs finalized and made an offer to buy 385 Haggis Cove from Bruce and Beverley Adams on May 30, 2010 in the early afternoon.

The offer was for $349,000, with a $25,000 deposit, irrevocable by the Buyer until 11:59 a.m. on May 31, 2010, and with a completion date of August 13, 2010. The offer included the following conditions: This Offer is conditional upon the Buyer obtaining, at the Seller’s expense, a consent to sever the property as follows: to return the property to the original 3 lots that have merged on title. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any

Schedule thereto not later than 6:00 p.m. on July 30, 2010 that this condition is fulfilled, this Offer shall become null and void and the deposit shall be returned to the Buyer in full without deduction. The Seller agrees to sign any requisite documents required for the above condition and do all things reasonably necessary in support of the satisfaction of the condition.

The Seller understands and acknowledges that the Seller shall be responsible for satisfying any conditions imposed for approval of the severance, and if such conditions give the Seller options in the manner of compliance, the Buyer shall determine which option will be selected. The Seller shall obtain a reference plan prepared by an Ontario Land Surveyor suitable for registration purposes in the Land Registry Office in which the said property is located.

The offer was also conditional upon arranging financing and inspection. [ 34 ] On May 31, 2010, at 10:45 a.m., Rick French sent an email to Doug Jones stating as follows: No competing offers yet!! The Adam's are on their way to Apsley now so I will be presenting the offer to them directly and will advise as soon as I know the response. Just wanted to keep you in the loop here!! [ 35 ] On May 31, 2010, at 4:51 p.m., Rick French sent a signed back offer from the Adams’ to Doug Jones. The purchase price was changed to $385,000, irrevocable by the buyer until 11:59 a.m. on June 1, 2010.

The severance conditions were changed as follows:

This Offer is conditional upon the Buyer obtaining, at the Buyer’s expense, a consent to sever the property as follows: to return the property to the original 3 lots that have merged on title. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any

Schedule thereto not later than 6:00 p.m. on July 30, 2010 that this condition is fulfilled, this Offer shall become null and void and the deposit shall be returned to the Buyer in full without deduction. The Seller agrees to sign any requisite documents required for the above condition and do all things reasonably necessary in support of the satisfaction of the condition.

The Seller understands and acknowledges that the Buyer shall be responsible for satisfying any conditions imposed for approval of the severance, and if such conditions give the Seller options in the manner of compliance, the Buyer shall determine which option will be selected . The Buyer shall obtain a reference plan prepared by an Ontario Land Surveyor suitable for registration purposes in the Land Registry Office in which the said property is located. The seller also added a proposed condition: The Buyer and Seller hereby agree that this property will remain on the market and for sale.

In the event that the Sellers receive another offer that they wish to accept, the buyer as indicated herein will be given 48 hours to waive all conditions to make this agreement firm. Failure to waive the within conditions by the 48 hours will make this Agreement null and void and the Seller will be at liberty to sell the property to the new Buyer. In this event the Buyer (Douglas Jones) will have his deposit returned in full. [ 36 ] The Plaintiffs made a further counteroffer on May 31, 2010 at 10:37 p.m., which was irrevocable until 5:00 p.m. the following day.

The only change to the offer the Adams had made was to reduce the purchase price to $380,000. This became the final Agreement of Purchase and Sale. The deposit was paid within the next few days. Mr. Jones explained that the real important condition was that they would be able to sever the property back to the three original building lots. They set a closing date of August 13, 2010, believing this would give enough time to get a response from Laura Jackson at the County. [ 37 ] On June 1, 2010, Mr.

Jones advised Laura Jackson that he had placed a conditional offer on the property and would appreciate anything she could do to help progress the review. On June 2, 2010, Laura Jackson indicated that she hoped to have a response by the following week but asked whether the current owner would be retaining ownership for the duration of the formal application process or would Mr. Jones be intending to purchase the property and then undergo the severance. On the same day, Mr. Jones responded in an email: I am not familiar with the planning process other than reading the county plan.

I think you could help me understand what the process is moving forward as I was hoping that this request would not have go through a formal application process as we are only requesting the property to be return to what is shown on the owners deeds. He referred to the Official Plan and then stated, “So to answer your question, it will be based on what process we apply and how long it will take to complete it. I have built time into the offer on the property, but if someone puts an offer in I could lose the deal.” The next morning, Mr. Jones responded to Ms.

Jackson again, stating, “To better answer your question, the current owner will be retaining ownership for the duration of the formal application process. This of course is dependent on how long it will take.” [ 38 ] Also on June 3, 2010, Ms. Jackson responded to Mr. Jones and stated in part: The formal application process can take anywhere from 3-6 months and, in the event of any objectors, could possibly take a bit longer than that. I tell people to expect probably at least six months.

Even a technical severance, such as the separation of merged parcels, would still need to go through the formal application process. The accuracy of my review depends on how you and the current owner are going to apply for the property. Should the property change hands and you become the owner, than the subject property would no longer be considered the separation of merged parcels, as it would no longer be under the same ownership as it was when the merger occurred. At that point, I would have to review the proposal as the creation of two new lots.

I am just concerned about reviewing the proposal under a set of policies if they will not be the same ones that apply when the time for formal severance application comes. I want to make sure that I am giving you accurate information based on your situation. Mr. Jones responded on the same day and told Ms. Jackson to “continue to proceed with the separation of merged parcels.” [ 39 ] It appears that, on June 10, 2010, the Plaintiffs waived the condition for inspection and finance. [ 40 ] On June 14, 2010, the County responded to the Plaintiffs, providing a “Preliminary Severance Review” dated June 4, 2010.

This Review is not a formal order of the County, but rather an indication of hurdles an applicant might face if they decided to apply to have a particular piece of property severed. The covering email stated in part: The review, attached, indicates that the Severance Proposal does not appear to conform to the Official Plans until such time that the Municipality has indicated that there is support for the size of the lots proposed.

Additionally, the applicant should be aware that the Township, in consultation with the Ministry of the Environment (MOE), may require a lake capacity study for new development on Chandos Lake.

Should the applicant proceed with a formal application for consent, please be aware that the applicant should provide legal documentation outlining how the properties became merged and evidence that the merger happened under the current owner . [ 41 ] The attached Review stated that the “Intent” was to “separate merged parcels” and stated in part as follows: County Official Plan Policy Review : The subject property is described as Shoreland area in the County Official Plan. Although there

are policies specific to those areas described as Shoreland,

Section 2.6.3.1 of the Plan states that "existing lots which inadvertently merged due to common ownership may be separated to reflect the original lot configuration provided the subject property is still in the same ownership as when such merging occurred and it is permissible in local official plans." Along with the 'Application for Consent', the applicant should provide legal documentation (ie. a lawyer's letter) outlining how the properties became merged and evidence that the merger happened under the current owner ….

However, since the subject parcel is to be divided and the severed parcels will not have existed as of this date, they will be required to conform to the 30 metre setback requirement. Municipal Official Plan Policy Review :…

Section 7.12.21 of the Plan state that "existing lots that merged inadvertently due to common ownership may be separated to reflect the original lot configuration provided that the subject property is still in the same ownership as when such merging occurred." Along with the 'Application for Consent' the applicant should provide legal documentation outlining how the properties became merged and evidence that the merger happened under the current owner .

However, since the severed and retained parcels are half the size required by the Township's Zoning By-Law, the Proposal should be discussed with the Municipality to determine if there is support for the size of the lots proposed. Municipal Zoning By-Law Review : … The severed parcels appear to be deficient with an approximate lot area of 0.23 hectares (0.56 acres) and a lot frontage of 30.48 metres (100 feet); therefore a rezoning or minor variance will be required…. (S.6.2.1.1).

The retained parcel appears to be deficient with an approximate lot area of 0.22 hectares (0.54 acres) and a lot frontage of 30.48 metres (100 feet); therefore a rezoning or minor variance will be required. Additional Notes: MNR Special Features Mapping indicates the subject parcel has environmental sensitivity of provincial significance…. The County of Peterborough Planning Department has contacted the Ministry of Natural Resources (MNR) to determine what species, if any, are located on or adjacent to the subject property.

Future correspondence from the Planning Department will indicate whether a Species at Risk Assessment will be required…. The Township, in consultation with the Ministry of the Environment (MOE), may require a lake capacity study for new development on Chandos Lake. … Application requires confirmation from the Township or identified agency regarding policy conformity. **Please note that the landowner should be aware that members of the local council may not support a rezoning or minor variance to create a lot that is not in compliance with the provisions of the zoning by-law .** [ 42 ] Mr.

Jones testified that Laura Jackson had mentioned in her email and in the Review, with bold and underlining, that severance had to be done in the original owner’s name. He believed that Laura Jackson wanted to make sure he was clear on that point. Mr. Jones read the Review, but stated he remained unclear on whether he would be able to sever the lots. [ 43 ] On June 15, 2010, Mr. Jones asked Ms. Jackson some follow up questions relating to the need for legal documents.

On June 17, 2010, she stated: In response to your question indicating the need for legal documentation, we would need a letter from a lawyer explaining when and why the lots merged. Unfortunately, being able to produce the deeds for each of the parcels does not necessarily indicate that the merging was inadvertent. The letter will confirm that these parcels merged under the new system and will provide us with the appropriate background and information necessary to write our report. [ 44 ] On June 18, 2010, Mr. Jones reached out to Kevin Duguay, a planning consultant based in Peterborough, for assistance. Mr.

Jones testified that he got to a point where it was not clear to him how this process truly worked because the Municipality was telling him one thing and the County was telling him another. He understood that Mr. Duguay was an expert in the field of property planning. Mr. Jones had not received a clear indication of what was required between the Municipality and the County, so he wanted to get an expert involved, someone who knew the language, to be able to guide him through how this all came together. Mr. Jones expected that Mr. Duguay knew how and who to talk to at the County and Township. Mr.

Jones also stated that Mr. Keay had identified this in his April email as something Mr. Jones might want to consider. Mr. Jones searched on the internet and found someone who looked like he would fit the needs. Mr. Jones’ introductory email to Mr. Duguay was extensive, providing all of the information that Mr. Jones believed was required for Mr. Duguay to understand the request. The email stated in part as follows: I would like to purchase the cottage with the criteria that the properties be severed or returned to the original 3 - 100' lots prior to the property being sold to me.

I have submitted a conditional offer based on this and the owner has agreed with time restrictions. I understand that the Municipal zoning by-laws call for a minimum lot area of 1.2 acres and frontage of 150'. This would not work well in this case because by dividing the property into 2 - 150' frontage lots would divide the cottage, which is located in the center, in half. Before committing to anything formal with Mr. Duguay, Mr. Jones asked Mr. Duguay whether he could “support this” and to advise of the cost and duration. [ 45 ] On June 21, 2010, Mr.

Jones sent an email to Kevin Duguay stating that he “would like to move forward on this issue” but then asked a number of questions. He stated, “So Kevin, lets get started with the caveat that some issues need to be resolved before we get into any significant costs.” [ 46 ] On June 23, 2010, Mr. Duguay sent Mr. Jones a fee proposal for his review, authorization and return. He indicated that he could commence work on June 28, 2010. Mr. Jones then asked whether Mr. Duguay would be providing the legal documentation outlining how the properties became merged, to which Mr.

Duguay responded and clarified that this would be produced by Mr. Jones’ lawyer. [ 47 ] On June 25, 2010, Mr. Jones sent an email to Mr. Duguay stating that they were waiting for the owner to get back to them

with a decision regarding an extension of the condition on the offer, which they expected to come the following week. He also asked for clarification on some issues, specifically, relating to the size of the proposed lots not being in compliance with zoning by-laws. Mr. Jones stated: Also, one item that has not been identified is that I not only want to return the property back to its original 3 x 100' frontage lots, but want to be assured the the municipality will support a building permit on the vacant lots if requested.

Understanding that the criteria is 100' from the water, 15' from the sides, and 20' from the rear. Mr. Jones asked Mr. Duguay to “break out” the costs for addressing these issues out of the estimate given. [ 48 ] On the same day, June 25, 2010, Mr. Duguay responded in an email to say that he would meet with the Township Staff to discuss the issue of lot size and building feasibility prior to moving forward with the preparation of the severance application. He stated: “If the meeting result is positive then you should proceed with the application.

If however, the result is negative, then you would have to decide whether or not to proceed.” He explained that the cost for the meeting would be $300 plus disbursements and tax. [ 49 ] Around this same time, toward the end of June 2010, Mr. French advised Mr. Jones that Mr. Adams, the owner of the property, was observing all of this go on, felt this was a simple process, and had indicated that he (Adams) would like to pursue severance on his own and list the properties for sale individually. Mr.

Jones was surprised by this and decided to seek more information and advice. [ 50 ] On June 28, 2010, at 10:34 a.m., Mr. Jones made contact with the Defendant, to whom he had been referred by his real estate agent. Mr. Jones sought to retain the Defendant for the explicit purpose of “acquiring a title search on the 3 lots as the review identified that we will need legal documentation (ie. a lawyer's letter) outlining how the properties became merged.” Mr. Jones explained to Mr.

Keay that he was also working with Kevin Duguay, a community planner, who was looking into the position the North Kawartha Township would take on severance to see whether they should progress into the formal severance application. Mr. Jones stated: “If the information we receive from yourself and Kevin are positive then I will progress with waving the condition on the property and purchase it, however if the information is not positive then I will have time to back out of the deal.” Mr. Jones stated that he would need this “turned around quickly”, asked Mr.

Keay to let him know whether he could support this and what the fee would be, and stated that if the information was positive he would “progress the purchase” and use Mr. Keay’s services. [ 51 ] Also on June 28, 2010, at 10:43 a.m., Mr. Jones sent an email to Mr. Duguay stating in part as follows: The owner of the property at 385 Haggis Cove Lane on Chandos Lake has advised me that he would like to pursue the severing of his property on his own and then, if he is successful, he will list the 3 lots separately. As you can imagine, I am displeased with his change of mind.

However, there is still an option for me to purchase the 300' frontage property without the severing prior to July 30th, 2010 as the conditional offer I made with him to serve the property does not expire until July 30th, 2010. If I wave the condition prior to July 30, I can still make the purchase. I assume that the risk to severe the property into 3 - 100' lots in my name has now increased.

With this change in mind I would like you to let me know what my options, risks, and costs, if any in addition to the File 2010-37 are, if I was to purchase the property prior to July 30th, 2010 and then purse severing the 300' frontage into 3 - 100' lots or does not process not change much? Mr. Jones seemed to be fully aware of an increased risk, and stated he assumed Mr. Duguay would know the extent of the risk and have the answer. [ 52 ] On June 29, 2010, Mr. Keay responded to Mr. Jones by email advising that he did recall talking to Mr. French and Mr. Jones about this issue earlier. Mr.

Keay stated: From my perspective, the work you're asking me to do is very simple and will not take a great amount of my time (presumably) and therefore won't cost you a pile of money. I will have my conveyancer attend at the Registry Office in Peterborough and perform a title search for the original (centre) lot. That will provide me the history of the centre lot and the adjacent lots. It will be obvious when title to the adjacent lots was taken and when/if they merged in title. Upon my review of the title search, I will be happy to provide you with my written opinion based upon what I find in the search.

The Defendant estimated that his cost would be around $750.00 and asked: “Has the Township advised that they want my opinion that the three lots were previously existing lots of record?” Mr. Jones responded to Mr. Keay that he assumed the township would want the written opinion and asked that the Defendant support Mr. Dugay as required. Mr. Jones testified that he understood they would have to identify that there were three separate properties and how they had been merged. Mr. Jones told the Defendant to “progress the request”. Clearly, by the time that Mr. Jones retained Mr.

Keay in late June 2010, the Agreement of Purchase and Sale for the Property had already been entered into and remained conditional on severance. There was no written retainer at this time or, frankly, at any time. In his Examination for Discovery, as read in at the trial, Ian Keay stated that he was being retained to search title, review it, and then arrive at some type of conclusion whether a severance would be possible. Mr. Jones did not speak to Mr. Keay in person – only through email. [ 53 ] In the mind of Mr. Jones, he, Mr. Keay and Mr. Duguay were all working together. Mr.

Duguay needed to go and get a commitment from the Township on whether or not they would be able to get building permits on the undersized lots, and Mr. Keay would go and do a title search to determine the reason the property got merged.

[ 54 ] On July 5, 2010, Mr. Jones followed up with the Defendant and Kevin Duguay to see if they had any information regarding his previous emails from June 28, 2010. On the same day, Mr. Duguay responded to both Doug Jones and Ian Keay that he had spoken with County staff and advised Mr. Jones that his purchase of the property would “void the forgoing policy provisions even though the net effect of the severance application would be identical if initiated by the current owner of land”. Mr.

Duguay indicated that the County had recommended that he speak with Tim Powell with the Township of North Kawartha, and he was endeavouring to do so. [ 55 ] On July 6, 2010, the Defendant responded to Mr. Duguay and Mr. Jones stating in an email as follows: I prepared a memo to my conveyancer to search title to the subject property so that we can provide you with an opinion relating to the details of the merger. That was last week. I'm expecting the title search back any day now. Upon receipt of same, I will produce my opinion to you.

Kevin: If the current owner commences the severance application, can we inherit the application and continue on or would the current owner have to see it through to the end and THEN Mr. Jones could complete the purchase of three separate lots? On July 6, 2010, Mr. Duguay responded “that is possible”, but that he was still trying to speak to the Township and would keep pressing them for a reply. On the same day, Mr. Jones asked Mr. Keay to hold off on the title search until they heard back from Kevin Duguay. On July 7, 2010, Mr.

Keay confirmed that his conveyancer had not completed the title search and they would hold off until there was word from the Township about whether “we can purchase the severance application without prejudice from the current owners”. By July 9, 2010, Mr. Duguay had still not received a response from the Township and indicated that he would try again that day, failing which, he would call a “Township Councilor to exert some pressure for a response”. Mr. Jones advised Mr.

Duguay that he had asked the Defendant to hold off on the title search until they heard from him and reminded him that the conditional offer was due to expire on July 30, 2010. [ 56 ] On July 12, 2010, Mr. Duguay emailed Mr. Jones and Mr. Keay to advise that he had chatted with Tim Powell, Chief Building Official of the Township, and learned the following information: 1. The Township has no record of the subject lands being three individual lots.

If satisfactory evidence can be produced confirming same, the Township would likely approve a severance application to re-establish the lots, subject to setbacks and other planning regulatory provisions. 2. If no evidence can be produced regarding the former lot configuration, then the Township and County would not support a severance application to create three lots. However an application to create two lots, each having the required 150 feet of lot frontage along the waterline, may be possible. No outcome can be assured at this time. [ 57 ] On July 13, 2010, the Defendant asked Mr. Jones, copying Mr.

Duguay, if he would like to proceed with the title search and Mr. Jones confirmed that this should proceed. [ 58 ] Also on July 13, 2010, Mr. Jones followed up with Kevin Duguay, not copied to Mr. Keay, to ask whether there were any concerns flowing from the fact that they would now be seeking severance with the property ownership changing to his hands. Mr. Duguay responded, again not copied to Mr. Keay, “The only issue I can foresee is the policy relating to ownership.” [ 59 ] On July 15, 2010, Mr. Jones advised Mr.

Keay that he was going to go ahead and ask his bank to begin the preparation of the paperwork to purchase the cottage while the Defendant worked on the title search. Mr. Jones stated in the email, “I see the title search as a risk, but a low risk.” Mr. Keay responded that he hoped to be able to advise Mr.

Jones of the results that day but would let him know as soon as he could. [ 60 ] The Defendant admits in the Statement of Defence that he obtained a parcel register for the property which disclosed a transfer, dated January 13, 1987, which appended a Planning Act approval of the creation of separate lots from the main property, indicating to him the availability of severance. In other words, in Mr. Keay’s view at the time, the transfer included a consent under the Planning Act to the creation of separate lots from the main property. In Mr.

Keay’s view, the Planning Act consent indicated the availability of severance. Based upon the title search, and in particular the attachments to the January 13, 1987 transfer registered on title to the property, Mr. Keay was prepared to advise the Plaintiff that it was possible that the property was severable. [ 61 ] Mr. Keay first provided his opinion to Mr. Jones verbally during a telephone call on Friday July 16, 2010. Up to this point, there had been no contact other than through email between the Plaintiffs and Defendant. The particulars of precisely what Mr. Keay said to Mr.

Jones during that call are disputed. However, there does not appear to be any dispute that such a call took place. [ 62 ] According to Mr. Jones, he was on Highway 401 driving home from work on a Friday and received a phone call from Mr. Keay on his cell phone. Mr. Jones stated that this was an important call. He put it on speaker. In describing the conversation, he stated: He said something to the effect of ‘I’ve got some good news for you…I’ve done my title search and I can confirm that we can go ahead and there would be no problem, we can sever the properties’…. Mr.

Jones agreed this was not the complete content of the conversation. Mr. Jones stated that he was surprised to have Mr. Keay call, as they had been only talking over email up to that point. Mr. Jones testified that Mr. Keay “jumped right to ‘we can do the severance’”, although he was expecting to hear from him that he did the title search and that he had evidence that they could now demonstrate that the lots were merged under common ownership as a result of the new program. Mr.

Jones stated he was “a little excited to hear this news that we could go ahead and sever.” [ 63 ] Given that they had been told by the County, Tim Powell, and Kevin Duguay that they had to be careful and make sure this was severed in the owner’s name, Mr. Jones testified that he stated to Mr. Keay, “You’re telling me that I can go ahead and purchase this property….I can remove the conditional offer, purchase the property, and we can sever later…like we can go right to the severance?” Mr. Jones stated that Mr. Key’s response was, “Absolutely, no problem.” Mr.

Jones then said that he stated, “Well are we…are you not

concerned about what everybody has been telling us about that it has to be severed under the current ownership?” According to Mr. Jones, Mr. Keay said, “Well I’ve reviewed the documents and there’s a stamp on lot 7 and the stamp tells me that it’s a stand alone….or something to that effect….a stand alone piece of property that will always be stand alone. It doesn’t have to be severed. So it’s a stand alone building property. You can go ahead and close the deal.” [ 64 ] Mr.

Jones explained that, in his line of work, he would always ask a couple of different ways to ensure he was clear on what was being said, so he did that on this occasion to make sure he was clear. Mr. Jones then repeated what he recalled about the conversation. Mr. Jones stated that he then said, “Well what about the County saying that you have to have severance in the owner’s name?” According to Mr. Jones, Mr. Keay then said what he had just explained. Mr.

Jones then said again, “So you’re saying that I can purchase the property, close the deal…in my name, and then after we’re going to sever the property.” According to Mr. Jones, Mr. Keay stated, “Yep. Absolutely. No problem. Listen, I know you’ve been looking to get this thing solved and you want to get this closed and you want to bring closure to this….I am telling you to go ahead and close the deal and we’ll work through the severance later.” They agreed to talk in the future and that was the end of the call. [ 65 ] In cross-examination, Mr.

Jones admitted that he was not reciting this conversation word for word, and acknowledged this conversation was more than 13 years ago. Mr. Jones acknowledged that this was a

summary of what he recalled and understood Mr. Keay said to him. Mr. Jones acknowledged that this was a conversation a long time ago with a lawyer about a legal issue, and it was possible, in fact likely, that he did not recall every single word said during that discussion. Mr. Jones acknowledged his limitations of his understanding about the technical aspects of severance at that time. Mr. Jones acknowledged that there were words used at the time by the County, Mr. Duguay, and Mr. Keay that he did not fully understand and was unfamiliar with.

At that time, he was unfamiliar with how land merges under the Planning Act , unfamiliar with the legal descriptions for different pieces of property, unfamiliar with how land can be severed in Ontario, and unfamiliar with the Planning Act itself. During the call, Mr. Jones acknowledged that it was likely that Mr. Keay used words with which he was unfamiliar. Mr. Jones acknowledged that he was driving at the time of the conversation and so his attention was divided between driving and the call. Mr.

Jones estimated that the call was no more than five minutes, just a quick call, to say “I’ve got this and we’re good to go.” [ 66 ] With that information in mind, Mr. Jones went home and told his wife what had occurred. He explained they could now close the deal and sever later, based on Mr. Keay’s advice. Mr. Jones stated that it “was good news all around”. [ 67 ] In his Examination for Discovery on April 5, 2017, Mr. Keay testified that he did not have any independent recollection of having any telephone conversations with Doug Jones about the severance issue.

He specifically did not remember calling Doug Jones at this time and giving him a verbal opinion. He did not recall anything that might have been said during that conversation. [ 68 ] According to Beverley Jones, her husband came home on that Friday and told her that there was some good news, that he had just been in touch with Mr. Keay on a phone call, and Mr. Keay said there was good news, they could sever the property, and should go ahead remove the conditions and buy it. [ 69 ] That weekend, Mr. Jones emailed Rick French and let him know that Mr.

Keay advised that they could sever the property and he wanted to remove the condition on the offer and close the deal. Specifically, the Plaintiffs waived the severance condition in the Agreement of Purchase and Sale on July 17, 2010, notably prior to any written correspondence from Mr. Keay – obviously on the strength of what was said during this conversation. Doug Jones was prepared to close the deal and apply for severance afterward. At that time, Mr. Jones testified that he assumed that Mr.

Keay would be acting for them on the closing. [ 70 ] As previously stated, while there is some debate over exactly what was said during that phone call, there does not appear to be any dispute that a conversation occurred on July 16, 2010 between Mr. Keay and Mr. Jones, and that based on that conversation, and with reliance on the professional advice provided, the Plaintiffs waived the severance conditions in the Agreement of Purchase and Sale. The dispute lies in how strongly Mr. Keay conveyed the likelihood of severance. In closing submissions, counsel for the Plaintiffs asserted that Mr. Keay told Mr.

Jones that severance was a “certainty”. This court notes that Mr. Jones never used the word “certainty” when describing this conversation. Having said that, Mr. Jones did say that Mr. Keay stated it would be “no problem”. This court does find it a bit curious that Mr. Jones would be willing to waive the condition on the basis of this one short phone call, given the consistent information he had been provided for months about the fact that this severance would need to be done by the person who owned the property at the time of the merger. However, perhaps this speaks to how strongly Mr.

Keay conveyed his opinion on the likelihood of severance. Quite frankly, in this court’s view, nothing really turns on this, as Mr. Keay admits that he fell below the standard of care required of a prudent lawyer in the circumstances, specifically, in the faulty advice given in relation to Planning Act consent stamps and the bearing this may have on the ability to sever the cottage property. [ 71 ] On July 18, 2010, Mr. French provided Mr. Jones with the acknowledged waiver. Mr. Jones then asked Mr.

French whether he asked about a closing date of August 6, 2010, and whether he could ask if the owners had a copy of the WETT certificate for the wood stove and if they could consider leaving the lawn mower. Mr. French confirmed that the owners were agreeable with the closing date and that he would ask about the lawnmower and WETT certificate. [ 72 ] On July 20, 2010, Mr. Jones emailed the Defendant as follows: Thanks for getting back to me Friday regarding the title search. We have waved the final condition on the offer and will work towards a closing of Aug 6.

My wife and I are going on vacation from July 23 - August 9 but will be available via email or phone to close the deal. Is this ok? If I understood our conversation correctly on Friday, we can put the 2 outside properties in one name and the middle property in another name along with the water front. Will we be able to put the properties in different names on the closing of this offer or will we have to wait until the severing is complete?

I don't know if we can do the following in the future but since I intend on selling off the 2 adjacent properties once we finalise the severance issue, would there be an advantage to creating a numbered company and putting some or all of the property in the companies

name? I have never owned or run a business, but I can retire from my current job in about 2 years and believe I'll find something to get into to show some activity in the company. Mr. Jones testified in cross-examination that his assumption was that severance was going to happen after closing, but the process was still not clear to him. He then clarified that he did not understand on closing whether he would have three separate properties or one – which was the reason he was asking the questions of Mr. Keay in this email. [ 73 ] Mr.

Keay confirmed his opinion about the severability of the property in an email to Mr. Jones dated July 20, 2010, and in a formal opinion letter dated July 19, 2010 (but received some days after the email). [ 74 ] In the email of July 20, 2010, which was received first, the Defendant responded to Mr. Jones’ email of the same date, set out above, and stated as follows: I've completed my opinion letter to you. It will be getting mailed shortly. The closing of the transaction requires you to sign up in my office. So long as you can make it in to my office a day or two prior to closing, then we will be fine.

If you would like your spouse to go on title, then I will need her full name and date of birth. As for a corporation, it certainly isn't necessary from my perspective. You may want to get an opinion from your accountant. If there is an advantage to be had, it would be in delaying tax payable. The accountant is the guy for that question. Upon reviewing the title search, there is only one property that has Planning Act Consent stamped in the deed, and that's (what you and I referred to as) Lot 1. So the merger that has taken place is 2-6.

However, 1 & 3 are both lots of record and only merged once title was taken identically by Mr. & Mrs. Adams. So the argument remains the same: this is a technical severance to restore previously existing lots of record. Lot 1 can continue to be dealt with as a separate lot. Mr. Jones felt that this email was “more good news”, as Mr. Keay was not taking any exception with anything Mr. Jones had said in his email summarizing what they talked about. Mr. Jones stated that he did not fully understand the terminology, but understood that they could sever the lots. In cross-examination, Mr.

Jones acknowledged that many of the terms used in this email were part of Mr. Keay’s expertise, not Mr. Jones’ expertise. Mr. Jones acknowledged in cross-examination that he understood that getting the property severed was not automatic. Mr. Jones agreed that he did not respond to Mr. Keay to say this information was different from what he had said on the phone. According to Mr. Jones, while this email was more in depth than what was discussed on the call, he agreed that this email was generally consistent with what Mr.

Keay said on the phone on July 16, 2010. [ 75 ] In his Examination for Discovery on April 5, 2017, read in at this trial, Mr. Keay explained that in this email he was suggesting to Mr. Jones that if there was Planning Act consent stamped, then they could treat that as a re-severable lot without going through the consent application process through the municipality.

He went on to say: But that there are other lots that are merged and do not have Planning Act consent stamped in their deed, so there is a merger and the only way to create independent lots then would be to go through a consent application process with the municipality having jurisdiction, save and except for what I believe at the time was a lot that would not need to be subject to an application. [ 76 ] The opinion letter from Mr. Keay to Mr. Jones dated July 19, 2010 was not received by Doug Jones until a few days after it was mailed, and after the email.

It stated in part as follows: You had previously advised me of your interest in purchasing the above-noted property. However, your interest was contingent upon the likelihood of success of restoring the lots of record to their original state, since the current owners' ownership of the subject lands have resulted in a merger. You instructed me to proceed with a title search to determine whether we can establish that the merged lots were, previously, lots of record (notwithstanding that the Township of North Kawartha does not have records that these were separate cottage lots on Chandos Lake). ….

The next transaction, the Adams' purchased the two adjoining cottage lots. Instrument No. 460373 was registered on January 13, 1987. These two lots flank either side of the centre lot. These lots are more particularly identified as Parts 7 and 8 on Plan 45R-2823. The interesting part of this conveyance is that the deed to

Part 7 has Planning Act Consent stamped on it. What this means is that in order for the sellers to sell

Part 7 (the lot to the West of the centre lot) to the Adams, the Township had to consent to a severance. Once the stamp is placed in the deed,

Part 7 can forever be dealt with as a separate and individual building lot. … Taking title to each of the six (6) parcels has led to a merger in title pursuant to the Planning Act . However, as I was mentioning previously, the fact that there is Planning Act Consent stamped on the deed for

Part 7 means that

Part 7 can forever after be conveyed as a stand- alone lot. However, the three Shore Road Allowance parcels, as well as the centre lot and

Part 8 have all merged in title. This means that a severance will absolutely be required in order to re-establish the three building lots. What I would propose is for you to apply for an Application for Consent for the Shore Road Allowance that is located directly in front of the centre lot and for

Part 8 on Plan 45R-2823. By obtaining severances for these two lots, you will effectively sever each parcel from every other parcel. The added benefit of applying for a severance for these lots is that there are already pre- existing reference plans in place:

1)

Part 8 on Plan 45R-2823; and, 2)

Part 2 on Plan 45R-9194. By relying on previously registered reference plans, you are effectively saving yourself approximately $2,000-$2,500 in fees relating to the commissioning of a new reference plan (which is always needed to complete and finalize a severance application). Once a severance is obtained for these two lots, you will then have separated the three Shore Road Allowance lots from each other as well as from the centre lot and

Part 8. It may be a condition of the Municipality that the Shore Road Allowance parcels be re- merged to the adjacent cottage lots, but that should not pose a problem. CONCLUSION It is my office's position that

Part 7 has Planning Act Consent stamped in the deed and is an original lot of record.

Part 8 is also an original lot of record and but for Mr. & Mrs. Adams taking title identically to the abutting properties, would remain as such. The merger in title is as follows: 1) The original, centre lot; 2)

Part 8 on Plan 45R-2823; 3)

Part 1 on Plan 45R-4978; 4)

Part 1 on Plan 45R-9194; and, 5)

Part 2 on Plan 45R-9194. A severance of

Part 8 on Plan 45R-2823 and

Part 1 on Plan 45R-4978 will effectively sever every parcel from every other parcel. As for whether there was any substantial difference between this written opinion and the conversation on July 16, 2010, Mr. Jones testified that the conversation on the phone was “lighter, to the point”. This letter had more detail about the history of the property. Mr. Jones agreed that he did not write to Mr. Keay to say that the information in the letter was different from the phone call because it was generally consistent with what he said on the phone on July 16, 2010. [ 77 ] On July 20, 2010, on the basis of Mr.

Jones’ email, Mr. Keay was aware that the severance condition had been waived by the Plaintiffs. Mr. Keay did not question Mr. Jones about why he had done this or express any potential difficulties or complications with proceeding to sever under new ownership. He provided his written opinion knowing that the condition was waived. [ 78 ] On their face, the written opinions, either in the email or letter, do not go as far as Mr. Jones suggested Mr. Keay’s opinion went on the phone call on July 16, 2010. At one point in cross-examination, Mr. Jones agreed that if one wants to get the best evidence of what Mr.

Keay’s opinion was to him, one would look at the July 20 email and July 19 letter. This causes this court to question the strength in which Mr. Keay expressed his opinion on July 16, 2010. However, as earlier discussed, nothing really turns on this, as Mr. Keay admits that he fell below the standard of care required of a prudent lawyer in the circumstances, specifically, in the faulty advice given in relation to Planning Act consent stamps and the bearing this may have on the ability to sever the cottage property. Something was clearly said during that phone call which caused Mr.

Jones to ignore all earlier advice and guidance and to immediately waive the severance condition. Clearly severance was important to the Plaintiffs, as acknowledged by Mr. Keay during his Examination for Discovery on April 5, 2017, as read in at the trial. Regardless of the strength of which it was expressed, or the precise language used, the message from Mr. Keay to Mr. Jones was the same on all occasions – that due to the Planning Act consent stamp, severance would be easily achievable, and upon that advice, Mr. Jones waived the condition. [ 79 ] On July 22, 2010, Mr. Jones confirmed with Mr.

Keay that he would like his wife’s name on title and provided her information. He also advised Mr. Keay that he should have the financial information from TD Bank, as they had already signed the paperwork. In response to some inquiries from Mr. Keay, Mr. Jones confirmed that they were using some equity from their Whitby residence in addition to a mortgage against the cottage for the purchase, which he stated was all approved. In

summary, the mortgage on the cottage was $228,000 and the remainder came from a home line of credit. Mr. Jones also obtained insurance on the cottage on July 22, 2010. [ 80 ] There were various emails between Mr. Jones and Mr. Keay leading up to closing. [ 81 ] On August 9, 2010, the Plaintiffs, Doug and Beverley Jones, attended at the Defendant's office to finalize all paperwork for the closing. At the pre-closing meeting, after signing everything, Mr. Jones testified that he said to Mr. Keay that they needed to talk about severance and that he asked Mr. Keay what they should do. Mr. Keay knew that Mr.

Jones was using the planner, Kevin Duguay. Mr. Jones testified that Mr. Keay then stated, “Well you know, I’m pretty much an expert in this field. I did this when I practiced down in Toronto. I did a number of these activities…the severances and the consent…and this is all pretty simple straightforward stuff. I can help you out with this.” Mr. Jones stated this was good to know, asked what he would charge, and whether he was confident he could do this because Mr. Jones thought they needed a planner. According to Mr. Jones, Mr.

Keay responded, “No, no…in fact…I can do this a whole lot cheaper than what your planner was going to charge you.” At that time, Mr. Jones testified that the rough estimate from the planner was about $9000. Mr. Keay claimed he could do it for around $3000. Mr. Jones thought this was a “no-brainer”, given that Mr. Keay said this is simple and he stood out as an expert in the field who knew his stuff. According to Mr. Jones, Mr. Keay told Mr. Jones he practically grew up on Chandos Lake, had family on the lake, and knew the area well. Mr. Jones said that Mr. Keay was “really promoting himself”. Mr.

Jones then said, “I guess I don’t need a planner” to which Mr. Keay is said to have responded, “No, if you

want to use me, I can do it a whole lot cheaper”. Mr. Jones agreed and understood that Mr. Keay was speaking about having the lots severed back to three individual lots, including a formal application to the County of Peterborough. [ 82 ] According to Beverley Jones, at this meeting, Mr. Keay assured them that he could take care of the severance, he could do it a lot cheaper than the planner, and he assured them he knew Chandos Lake very well. She understood that Mr.

Keay would be dealing with the severance. [ 83 ] The purchase of the property successfully closed on August 13, 2010 for the purchase price of $380,000.00. Under cross- examination, Mr. Jones acknowledged that the purchase of the property was successful and that they acquired exactly what they had contracted for in the Agreement of Purchase and Sale – the entire property at 385 Haggis Cove Lane as it was described in the Agreement of Purchase and Sale. In cross-examination, Mr. Jones confirmed that Mr. Keay had completed the tasks for his retainer.

The Parcel Register demonstrates the transfer. [ 84 ] Ultimately, Mr. Jones did not retain Mr. Duguay. He stated that, as they were going through the process, Mr. Duguay was not making much progress, as it seemed to take him forever to get a hold of Tim Powell, and he was simply not being as effective as Mr. Jones expected. On September 1, 2010, Mr. Duguay sent an invoice for service to Mr. Jones and stated, “I am assuming you are not proceeding with the property purchase-severance”. The total cost was $409.50 for work performed from June 12 to July 15, 2010. [ 85 ] On September 2, 2010, Mr.

Jones emailed the Defendant to ask whether he would be “interested in taking on the severance of the 3 lots + lake front”, referring to the fact that at the closing of the property, Mr. Keay had mentioned that land severance was part of his “area of expertise”. Mr. Jones also asked for a break down of costs for this exercise. This email suggests that things had not been finalized on August 9, 2010 for Mr. Keay to take on this work. In cross-examination, Mr. Jones agreed that taking on the work to have the property severed was not something he had previously formally asked Mr.

Keay to undertake, but he explained that there was a discussion at the pre-closing meeting about this, during which Mr. Keay had explained this was an area of his expertise, this was a fairly simple process, and he would be cheaper than the planner. Mr. Jones agreed that there was no agreement on a retainer at that meeting, but there was a “good discussion around a path forward.” Mr. Jones agreed that these conversations occurred over 13 years ago, memories fade with time, and he had no contemporaneous notes of the conv

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