Legally Speaking with Michael Mulligan
Legally Speaking with Michael Mulligan
Legal Fixtures and Your Home Purchase
Navigating the legal maze of property transactions and civil judgments requires understanding nuances that aren't always obvious. Michael Mulligan, barrister and solicitor with Mulligan Defence Lawyers, unpacks two fascinating cases that illuminate these complexities.
First, Mulligan explores a cautionary tale about what constitutes a "fixture" in home purchases. When buyers discovered a beloved dresser missing after taking possession—revealing holes in the wall behind it—they sued for $7,430 in damages. The case hinged on whether the dresser qualified as a fixture that should remain with the property. The legal test? If an item is attached to the property in a way that removal would cause damage, it's likely a fixture. Those IKEA bookshelves you've secured to walls? They might legally transfer with your home unless specifically excluded in the sale contract.
The same dispute involved "conversation sets" on patios—a vague term that led to confusion when the sellers removed chairs and a large wicker sectional. Despite going to court, the buyers received just $100 for their trouble, demonstrating how ambiguous contract language and litigation costs can result in pyrrhic victories. Mulligan's advice is crystal clear: be specific in contracts about what stays and what goes when selling or buying property.
The conversation shifts to a disturbing case involving a disbarred lawyer convicted of sexually assaulting a potential client in his office. When sued civilly, he claimed any judgment would be pointless as he'd simply declare bankruptcy again. This reveals a common misconception about bankruptcy protection. While bankruptcy can discharge many debts, Section 178 of the Bankruptcy and Insolvency Act specifically excludes sexual assault damages, intentional torts, fraud, and court fines from discharge. The $270,000 judgment against him would survive bankruptcy—though collecting from someone without assets remains challenging regardless.
These cases illustrate critical principles: precise language prevents expensive disputes, bankruptcy won't erase obligations from intentional wrongdoing, and winning a judgment doesn't guarantee collection. Whether you're buying a home or seeking justice through civil courts, understanding these legal realities can save you significant time, money, and heartache.
Follow this link for a transcript of the show and links to the cases discussed.
And we're going to be talking now and hearing some sage advice from one, mike Mulligan barrister and solicitor, with Mulligan Defence Lawyers. Mike, welcome to the program. Hey, thanks so much. It's always great to be here, yeah, and great to chat with you. It's been a little while since I've had the chance to do that. You've got a bunch of issues you've been digging into to talk to our listeners about. Today, one of the things I think that you'd highlighted was this idea of fixtures what today? One of the things I think that you'd highlighted was this idea of fixtures what are so-called fixtures and what comes with a house when you buy it? This is the kind of time of year when people are looking at selling or buying their house or homes. Rather so they might well be interested in what comes with the house when you look at it and you see something that you're not sure if that actually is included with the purchase of the house, but you really like it. What can you tell us about this?
Michael Mulligan:Sure, I think it's a good cautionary tale for people to be aware of when they're doing exactly that buying or selling. And this was a case that wound up in court, I guess, as all my tales of woe do. And it was a case involving a contract to buy and sell a home and ultimately there was a back and forth exchange of contracts and offers and so on that were finally agreed upon and, as is commonly the case, the contract to buy and sell the house indicated that fixtures would be included with the house. So the first question is what's a fixture? And then the specific contract in this case specified something. So that's not uncommon, you know. If somebody goes through a house and says, gee, I really love that, you know chair or something, you could write that into the contract. And here, in addition to specifying that fixtures would be included with the house, it specified that a conversation sets on the patios would be included.
Michael Mulligan:Well, you can just imagine what happened the purchasers showed up and they took possession of it and a few things that they had expected to be present were gone.
Michael Mulligan:And it wasn't controversial that they were taken.
Michael Mulligan:The issue was whether they should have remained or not, and that's how the case wound up in court.
Michael Mulligan:The first item in question was what was described variously as a dresser in a bedroom, but was also referred to by different people as perhaps it was a cabinet or maybe a vanity, somebody else called it a desk, any case a big wooden thing, and the issue arose because it was present when the purchasers walked through the house and when they took possession of the house, that item the judge referred to as the dresser was gone and behind it there were a couple of holes in the wall. And the significance of the holes in the wall is because what the definition of a fixture is. And so there was nothing in the contract that specified whether you got this dresser or not. But the contract did specify you got the fixtures. And so there's been a long history of litigation over what is a fixture, because, you know, human affairs are endlessly variable. But one of the starting points for determining whether a particular thing in a home is a fixture is to determine whether it's attached to the property in some way.
Rob Buffam:That's one of the definitions. Result of damage.
Michael Mulligan:Okay, interesting that's one of the criteria Okay yeah, so you start with. If the thing's attached to the property by something other than its own weight, one of the first things to be looked at is can you remove it without damaging the property? And that's important, because some things might be attached to the property, like, let's say, your television set. If it's just sitting on the floor and plugged in. If you could just unplug it without causing any damage, it presumptively won't be a fixture, right? But what do you do with the in this case, where there are holes? And the purchaser's theory of it was well, the dresser thing was quite large, and so they concluded it must have been affixed to the wall. And sometimes you'll see that, right. You know, if you buy a piece of furniture, there'll be something saying well, you'll bolt this to the wall. In case of earthquakes, Screw it in. And if you do screw it in, you may turn that thing into, in fact, a fixture.
Rob Buffam:Can I stop you there for a second? That's what they were arguing, okay, well, that's interesting because I'm thinking of our own den, where we've got some Ikea bookshelves that I think we've probably attached so that the top of them doesn't extend out a bit more than the bottom. I guess it would depend on judgment on this, but are we setting ourselves up to be selling those bookshelves with our house if we ever sell it and we've attached them in some even modest way to the room?
Michael Mulligan:Yes, that's a common term, right, it's sort of these contracts will often use that term fixtures. And so if you've done what IKEA recommended and screwed the top of the bookshelf in so it doesn't topple over on you in the event of an earthquake, presumptively you've turned that into a fixture. And so if you don't want that going with the house and you sell it, you should specify that in the contract, not including the bookshelves in the den, for example. If you don't, the starting point is going to be those are a fixture. And that's what was claimed here. That, exactly that.
Michael Mulligan:Now the challenge for the plaintiff buyer was that the seller defendant also testified. They agreed they took the dresser with them, but their evidence was that, no, the holes in the wall weren't caused by that dresser being screwed into it, despite the fact that it was tall. Their evidence was that was caused by a shelf that used to be there and the dresser was put there to stage the home and hide the holes. And the trouble is that in a case where you're suing somebody, the person doing the suing making the claim, they're the one who has the burden of proof. Now, in a civil case, you only have to prove it on the basis of probability right, not like a criminal case where it's got to be beyond a reasonable doubt. But the judge accepted what the defendant had to say and there was no really contrary evidence from the buyers. They hadn't looked back there or seen the back of the dresser, and so on that basis the dresser wasn't a fixture and so their claim for they were trying to get $7,430 for this thing, that was dismissed.
Michael Mulligan:And the judge that had to move on to this issue of the and this was written in specifically in the contract written in was that the purchasers would get the conversation sets. And here's what happened with those. When they looked at the home, in the front there was a table with four chairs around it and in the back there was a big wicker item of some kind that could seat capable of seating nine people was the description. The problem for the plaintiffs here was what is a conversation set, and so the judge was struggling with that and obviously there are inquiries made, including looking online by, I guess, one of the parties about like what is a conversation set? And the sellers left behind a table and two of the four chairs in the front, but not the other two chairs. So Is that enough for a conversation? Two people? What about this wicker thing? Is that a conversation?
Rob Buffam:An intimate conversation. So it's not a term of art then it's not a legal term of art a conversation set. This was just a phrase that had been inserted into the contract.
Michael Mulligan:Yeah, one of the real estate agents had written in that term, conversation sets, and so the judge was struggling with well, what do you make of that?
Michael Mulligan:And like one of the principles that the judge was struggling with. Well, what do you make of that? And like, one of the principles that the judge at least considered was this there's a concept called contra preferendum, and the concept there is if one party drafts the contract and the contract is ambiguous, it can be interpreted in favor of the other party. But that wasn't really the case here, because if there wasn't an unequal power relationship, there were two real estate agents who drafted these things, and so the judge didn't use that to try to settle it, but ultimately concluded that just that term conversation set was vague, and the judge couldn't determine whether this big wicker thing in the back, which was described by some people as a sectional furniture, constituted a quote conversation set. Was a sectional furniture constituted a quote conversation set? But the judge was prepared to go as far as to say that the table with four chairs around it did meet the definition of a conversation set, which then led to the question of well, they got two of the chairs and the table. What are your damages, and the plaintiffs had tried to. They found, I guess online from Home Depot or someplace, what was described as a luxury five-piece patio furniture set, and so they were trying to get $1,117.76 for the missing two chairs. That didn't fly. The judge found it's just not appropriate damages here, and so ultimately they were awarded $100 for the two chairs from the conversation set at the front.
Michael Mulligan:The other thing which, interestingly, was dismissed and this is something people should know about is that the sellers they had set a counterclaim when they got sued for the conversation set and the dresser, and they had made a counterclaim asking for things like 23 and a half hours of their own time for $100 an hour and stress, not enjoying a weekend away for $1,000 and losing a day of work for another $1,000. Now, you can't get any of those things anywhere, frankly, but you're certainly not getting them in small claims court, and so all of those things were dismissed. You can't bill for your time or for not enjoying your weekend as a result of being sued, and so the successful buyer, for all of their effort in going to court, wound up with $100, and they wound up with a small amount of money like the filing fees you pay when you go to a small claims court and so at the end of the day, no doubt if their time was worth anything, this entire exercise in litigation was not worthwhile. But what is worthwhile if either you're buying or selling a home and you're particularly keen on the big wicker thing in the backyard or you want to make sure you get what might be a dresser it might be a vanity or could be a desk in the other room?
Michael Mulligan:Carefully describe it in the contract and you will avoid spending a day or more in provincial court trying to litigate whether something is a conversation set, whether you get the wicker and whether the bookshelf was screwed into the wall. So I guess the takeaway is be clear. But the starting point of whether something's a fixture and usually fixtures are going to go with the house the starting point is going to be is it attached in some way that you're going to cause damage getting it out, as opposed to just like unplugging the toaster and taking that away, even though I guess in some theoretical way the toaster is attached to the wall. It's just attached in a way you could unplug it without doing any damage. So that's what a fixture is and that's why you should be careful and specific so you don't wind up spending your time in provincial court for $100.
Rob Buffam:Interesting and this group that are a family that purchased the house ended up with a hole in the wall as well. They didn't anticipate. I wonder, if you can, just before we go to commercial I mean, I guess it would depend on each case, but you you know. Should you be vigilant about asking what's behind that dress? Or is there a hole?
Michael Mulligan:Well, that's interesting too. What's often done and this contract did this is often contracts for purchase and sale will specify that the property would be in the condition that it was viewed when the person went in and viewed it. Right about, you know, it's going to be in the condition. I saw it when I came through the open house or came and viewed it with my real estate agent and somebody the seller punches a hole in the wall, you know, while getting their bookcase out of the house or something. That's something that the seller is going to be responsible for. But here there's no disagreement. There definitely was a hole in the wall, but the evidence from the seller was that, yeah, that was there already and the plaintiff, I guess, didn't look by or didn't look behind the bookcase. So no compensation for the hole.
Rob Buffam:Interesting. But just before I let you go I wonder is there a reasonableness threshold there that you know? You reasonably ought to have known there was a hole in the wall, or is that? Are we getting too far into? You know a negligence standard. You know a negligence standard. I mean, it does seem. In some sense it seems a little bit unfair to have somebody assume that there is a hole in the wall behind a bookcase or something like that.
Michael Mulligan:Sure, yeah, there, probably there would be a reasonable consideration. And this wasn't some gaping hole in the wall that you can see through the next room. What it sounded like from the judgment was a couple of screw holes, like somebody had screwed something into the wall. In this case it was a screwed-in shelf on the evidence of the seller, rather than the earthquake-preventing strap from the then-missing dresser. And so, yeah, there is going to be always an element of reasonableness.
Michael Mulligan:And the other thing about that is that sometimes, of course, in a contract to buy and sell a house, you'll have a clause which would involve a home inspection. Those are interesting things in their own right, because usually the home inspectors usually say their only liability are for things that they could reasonably see walking through it, and so the really tough cases get into things. Like you know, should you have noticed the hole behind the wallpaper or the, you know, the mirror that was left hanging in the hallway, that sort of thing? But here it wasn't a gaping chasm, it sounds like it was a couple of screw holes that they assumed was used to hold the missing dresser up.
Rob Buffam:Interesting. We've got to take a quick break. We're speaking with Michael Mulligan from Mulligan Defenselers. When we come back, we're going to hear about a case involving sexual assault, damages and bankruptcy. We will be right back. Welcome back to the program. I'm Rob Buffum filling in today for Adam Sterling. Our guest at the moment is Michael Mulligan from Mulligan Defense Lawyers. Welcome back, Mike. Hey, always good to be back. Sorry I interrupted you, but there's a case coming up that sounds like it's quite interesting that you were going to tell our listeners about.
Michael Mulligan:Yes, it's a case that troublingly involves a former lawyer, now disbarred, who was charged criminally and in fact convicted, of sexually assaulting a woman in his office when she came to hire him. And obviously there's something seriously wrong with this person. He apparently was wearing socks and disheveled and came around his desk, sat by the woman and put his head on her chest and then rubbed her leg that was the nature of the sexual assault while she was in a vulnerable state trying to hire him. He was convicted and disbarred over that but then most recently sued for damages resulting from that. That experience had a long-term negative effect on the person who he did that to and one of the interesting elements to it is that the civil case got to the point of discussing what the damages should be for that activity and the the plaintiff made counsel for.
Michael Mulligan:The plaintiff, made submissions about various heads of damages and suggested an amount of $270,000. And the former lawyer indicated that he had already gone bankrupt, that he was dealing with health issues, including a cancer diagnosis, and that he had no submissions to make in terms of the amount because the plaintiff would not even get a dollar because another $270,000 award would make no difference since he would just declare bankruptcy again. Now here's. The judge quite properly said well, you're not really making any submissions about how much the award should be, so I guess it's going to be $270,000 and awarded that. And first of all going to be $270,000 and awarded that, and first of all, that's appropriate.
Michael Mulligan:The ability to pay a judgment is not a consideration in determining what the judgment should be right. If you sue somebody successfully and the judge determines what the appropriate award would be to put you back in the position you would have been in, but for what happened, ability to pay is not a consideration, but you do that, have to go about getting the money. And so what's to be made about this fellow's claim that he would just declare bankruptcy again? Well, what people should know about is that you can, of course you can declare bankruptcy. It's not like Michael from the Office where you just stand up and yell and I declare bankruptcy before that's required, but you could in fact declare bankruptcy more than once.
Michael Mulligan:The trouble, and the reason why that submission that he made demonstrates a lack of understanding about how the Bankruptcy and Insolvency Act works is that, while you can declare bankruptcy, various kinds of debts are not what's called discharged as a result of bankruptcy, and there's a whole list of things. You can look them up in Section 178 of the Bankruptcy and Insolvency Act for those playing at home, and there's a whole list of things including things like fines and penalties imposed by a court. That kind of makes sense, right? Otherwise you could just be fined for something and declare bankruptcy and not have to pay it, right? Otherwise you could just be fined for something and declare bankruptcy and not have to pay it. But other things listed include awards made for intentional torts or things like sexual assault.
Michael Mulligan:Also things like alimony payments, debts as a result of fraud or embezzlement various things of that are excluded from discharge, and so even if you go through the bankruptcy process, you still owe that money. And so if if you go through the bankruptcy process, you still owe that money, and so if you think you could avoid paying the sexual assault judgment or the debt for your fine, or the money you got by embezzling it from somebody. You're going to be very unhappy at the end of your bankruptcy process when you're told that you no longer have to pay your Canadian Tire credit card debt but you're still on the hook for the $270,000. Thanks, so much Now, with that being said, and so that was just completely mistaken.
Michael Mulligan:This is a lawyer himself who made that error in understanding and even more ironically, on the criminal trial for the same conduct. He was convicted and then he appealed it on the basis that he had inadequate, poor representation by his lawyer at the first trial. That went absolutely nowhere. Pointing out in part he was a lawyer, but I suppose that has some additional resonance given his misleading or misinformed submission to the judge about the damages award here. Now, all that being said, it's not smooth sailing for the successful plaintiff here.
Michael Mulligan:Bankruptcy won't help at all. But the fact that this person has already gone bankrupt virtually by definition means he won't have any assets. And if he's got cancer and no assets, whether a second bankruptcy would do anything about the $270,000 judgment may be neither here nor there, because when you're a judgment creditor you can do various things to try to collect on that, but that's up to you. You could do things like getting an application of the person's property sold or have their car sold or garnish money from their bank account. But if they have no car, no home and no money and no job his fellow's been disbarred. You're probably going to have a pretty tough time collecting your $270,000.
Rob Buffam:Interesting. If somebody is considering the impact of somebody not having much financial means, I guess that would be a factor to weigh in and something you might get advice on if you're contemplating bringing a court action or a lawsuit against somebody who may declare bankruptcy. But it would not be a factor involved in the judgment of what any damages would be if you succeed in your lawsuit.
Michael Mulligan:That's absolutely the case. When somebody's making a decision about whether you want to pursue litigation, that can be expensive and time-consuming. One of the things to remember is that in a civil case, really at the end of the day, the only thing you may walk away with that from if you succeed is an order that the person pay you money, and if they have no money, there's going to be nothing to collect from. Now, the other side of it, I guess in that consideration and people should know this too is when you have, like in this case, a criminal conviction for what amounts to the same conduct, that you're suing somebody for, that part is not going to be controversial, right, because in the criminal context, the sexual assault he he was convicted, that was upheld on appeal and for that it would be required to be proven beyond all reasonable doubt and that was established at the criminal trial. And when that happens, if there's then a civil claim made for what amounts to the same conduct and sexual assault is one of those things that has both a criminal and civil element to it you're not going to have any issue at all proving that that occurred. You're going to basically move right on to. Well, okay, what are the appropriate damages for that, and that's what happened here and that's the context in which that exchange occurred.
Michael Mulligan:Now also remember, of course and people will remember this from OJ Simpson, you know, even if you're acquitted criminally of something, you could be successfully sued for the very same conduct. Right, because there's a lower standard of proof in the criminal in the civil case. Right, the fact that the glove doesn't fit doesn't mean that you couldn't persuade a judge or a jury that you probably committed the murder or probably committed the sexual assault. And so this is the opposite of that, where, if there's a criminal conviction, at least there isn't going to be any issue of proof that the tort occurred. It's just going to be on to what are the appropriate damages for that? And now I suppose for this person, whether she will be able to collect the $270,000 from the now disbarred, convicted and bankrupt former lawyer Interesting.
Rob Buffam:Well, there's different standards of proof. Well, thank you very much, Michael. We've been speaking with Michael Mulligan from Mulligan Defense Lawyers. Thank you so much.
Michael Mulligan:It's always great to be here.