Brar v. Harbour, 2025 ONCA 362
Introduction
Many real estate lawyers have faced this scenario: a client with Canada Revenue Agency (“CRA”) liens on title who won’t authorize direct access to their CRA account. You’re left relying on discharge statements the client provides, hoping they’re complete and accurate. The recent Ontario Court of Appeal decision in Brar v. Harbour offers a masterclass in protecting yourself when clients limit your ability to verify critical information.
The Facts
Puneet Brar, a real estate lawyer at Realtus Law Professional Corporation, was retained to close the sale of Stephen Harbour’s property. The property had seven CRA liens registered on title. When Harbour refused to authorize Brar to directly access his CRA account, he instead provided six discharge statements and assured her that two of the seven liens were duplicates.
Facing a requisition from the buyers for discharge of all CRA liens, Brar gave a personal undertaking to obtain discharges after closing. Recognizing the risk she was taking, Brar drafted a Declaration and Indemnity Agreement that Harbour signed on November 30, 2020.
The Agreement contained three key provisions. First, it confirmed that Harbour had not provided CRA account access and understood that Brar was relying on the discharge statements he provided. Second, it required Harbour to indemnify Brar and her firm for “any liability arising from any inaccuracies and/or discrepancies” resulting from reliance on those statements. Third, it required Harbour to pay any outstanding amounts if errors existed in the discharge statements.
The sale closed on December 1, 2020. Brar arranged payment to the CRA based on the six discharge statements. However, in August 2021, when the buyers’ counsel requested confirmation of discharge, Brar discovered that one lien—the seventh lien Harbour had identified as a duplicate—remained registered. The CRA provided a discharge statement showing $562,854.07 plus interest was outstanding. After Harbour failed to respond to communications, Brar’s insurer paid the amount and discharged the lien in December 2021.
The Application Decision
Brar and her firm brought an application seeking indemnification under the Agreement, alternatively claiming unjust enrichment. Harbour opposed the application on several grounds.
The application judge found in favour of Brar on both the contract and unjust enrichment claims, ordering Harbour to reimburse the amounts paid to discharge the lien.
The Appeal
Harbour appealed, raising three arguments that the Court of Appeal swiftly dismissed.
First, Harbour argued the application should have been converted to an action because material facts were in dispute, including which discharge statements were provided and his health status. The Court found no error, noting that it was agreed Harbour didn’t obtain a discharge statement for the seventh lien, there was no evidence presented to the application judge of health issues affecting his capacity, and the CRA correspondence clearly established an outstanding lien that Brar’s insurer paid to discharge.
Second, Harbour claimed the application judge erred in interpreting the Agreement to require indemnification for the final lien. The Court rejected this argument decisively. The Agreement unambiguously provided that Brar was relying on Harbour’s discharge statements and that Harbour agreed to indemnify her for liability resulting from that reliance. Harbour argued the contra proferentem rule (interpreting ambiguities against the drafter) should apply, but the Court found no ambiguity. The discharge statements Harbour provided were purported to be complete, but one was missing. There was no evidence Harbour didn’t understand he could be liable for Brar’s reliance on the indemnity.
Third, Harbour challenged the alternative finding of unjust enrichment. Again, the Court found no error. The CRA letter clearly evidenced the remaining lien. Brar’s insurer indisputably paid to discharge it. The discharge benefited solely Harbour. The respondents had no interest in the property, and Mr. Harbour would have been enriched if the respondents had to bear the cost of discharging his tax debt.
Key Takeaways for Transactional Lawyers
This case offers several critical lessons for real estate practitioners:
Draft protective agreements when clients limit information access. When clients won’t authorize you to verify information directly, document their refusal and have them acknowledge the risks. A well-drafted indemnity agreement can be enforceable even when you’re the drafter, provided it’s clear and unambiguous.
Clear language defeats ambiguity arguments. The indemnity in Brar survived appeal because it explicitly stated the lawyer was relying on the client’s discharge statements and the client would indemnify for “any inaccuracies and/or discrepancies” arising from that reliance. Vague language invites litigation; specificity protects you.
Document all communications and instructions. Brar’s contemporaneous documentation of Harbour’s refusal to provide CRA access and his representation that two liens were duplicates proved crucial. Your file notes may be your best evidence if a client later disputes what they told you.
Consider unjust enrichment as an alternative claim. Even if a contract claim faces interpretation challenges, unjust enrichment may provide an independent basis for recovery when you’ve conferred a benefit on a client at your expense.
Personal undertakings carry personal risk. Brar gave a personal undertaking to discharge the liens. While her indemnity agreement ultimately protected her, this case underscores why such undertakings should only be given with robust safeguards in place.
Conclusion
Brar v. Harbour validates a pragmatic approach to risk management when clients restrict your ability to verify information. A carefully drafted indemnity agreement, coupled with clear documentation of the client’s limitations on your retainer, can provide effective protection when things go wrong. For transactional lawyers navigating similar situations, this decision offers both a template and reassurance that courts will enforce properly drafted protective agreements.
