Real Estate Law

The Bank of Montreal sought a declaration that its mortgage on a property in Oshawa was entitled to first priority over a competing mortgage registered by 10655252 Canada Corporation, relying on the doctrine of equitable subrogation.

The court found that BMO’s funds were used to pay out the prior first mortgage (CIBC), and that all parties intended BMO to have first priority.

Due to the solicitor’s negligence, the BMO mortgage was not registered first, but the court exercised its discretion to grant equitable subrogation, giving BMO first priority to the extent of the CIBC mortgage.

This endorsement grants an unopposed application by RioCan Real Estate Investment Trust and related entities for the appointment of FTI Consulting Canada Inc. as receiver over the assets of the RioCan-HBC joint venture entities.

The court reviews the legal test for appointing a receiver under the Bankruptcy and Insolvency Act and the Courts of Justice Act, referencing relevant case law and statutory factors.

The receivership is found to be just and convenient in light of the joint venture’s financial distress, the failure of restructuring efforts, and the need to preserve and maximize value for stakeholders.

The order authorizes the receiver to borrow up to $20 million and provides for allocation of costs and a mechanism for secured lenders to terminate the receivership as to their collateral.

The court granted a motion to strike a third-party claim brought by Roy D’Mello against the plaintiff’s lawyers, Neil Colville-Reeves and Reeves Richarz LLP, in a complex mortgage and property litigation.

The third-party claim sought contribution and indemnity, as well as damages for alleged champerty and maintenance.

The court found that claims against a plaintiff’s lawyer, acting as agent, cannot be sustained where the alleged conduct is attributable to the plaintiff.

The court also held that the facts pleaded did not support a claim for champerty or maintenance.

Leave to amend was denied.

The Court of Appeal for Ontario considered whether a medical office building in Toronto was held as an asset of a partnership or as a tenancy in common.

The appellants, majority owners, sought a declaration of partnership and related relief, while the respondents argued for a sale under the Partition Act.

The Court upheld the motion judge’s finding that no partnership existed, but found error in the order dispensing with the appellants’ consent to the sale of the property.

The Court directed a reference to an associate judge for the sale and denied leave to appeal the costs order.

The plaintiffs, Condoman Developments Inc., 1808176 Ontario Inc., and Howard Youhanan, sought an interlocutory injunction to restrain the defendants, including Cannect International Mortgage Corporation and Marcus Tzaferis, from enforcing mortgage remedies (power of sale) over several Toronto development properties.

The plaintiffs argued the loans were not true loans but equity investments, and that the mortgages were unenforceable.

The court found the evidence and documentation overwhelmingly established the transactions as enforceable loans, not equity investments, and that the plaintiffs were sophisticated parties who knowingly entered into the agreements.

The court dismissed the motion for an injunction, finding no serious issue to be tried, no irreparable harm, and that the balance of convenience favoured the defendants.

The Township of McMurrich Monteith brought a motion for summary judgment seeking to dismiss a negligence claim by the plaintiffs, William and Emily Huether, on the grounds that the limitation period had expired.

The plaintiffs alleged the Township was negligent for failing to continuously monitor an open building permit file and conduct necessary inspections for a house built in 1986, whose foundation was failing.

The Township argued its duty ended with construction or permit closure in 1988, making the claim statute-barred under the Limitations Act, 2002.

The court found that the Township had a continuous duty to monitor its open permit file until the building was substantially complete and met occupancy conditions, which never occurred.

Therefore, the ultimate limitation period under s. 15(2) of the Limitations Act did not apply, and s. 15(6) for continuous omissions applied.

The Township's motion for summary judgment was dismissed, and costs were awarded to the plaintiffs.

The applicant brought a motion seeking to remove a fraudulent charge on a jointly owned rental property, obtain a no-dealings order, and terminate child support payments.

The respondent had a history of non-compliance with court orders regarding the property's sale and had registered a $650,000 charge in favour of her mother without evidence of a legitimate loan, seemingly to frustrate the sale.

The court found the charge to be a fraudulent conveyance, declared it null and void, and ordered its removal.

It also granted a no-dealings order for both the rental property and the matrimonial home and terminated child support retroactively, as the children had primarily resided with the applicant since September 2022, constituting a substantial change in circumstances.

The Applicant sought to amend its Fresh As Amended Statement of Claim in a trial of an issue concerning fraud allegations related to a prior summary judgment.

The court granted leave to amend for clerical errors and some factual expansions, but denied the bulk of the proposed amendments, including new causes of action and irrelevant/evidentiary allegations, finding them beyond the scope of the directed trial of an issue and that the delay caused presumptive prejudice.

The plaintiff, Canadian Imperial Bank of Commerce, brought an ex parte motion for leave to issue a writ of possession for a mortgaged property.

The motion was initially declined due to an occupancy report suggesting the property had been sold.

Upon receiving supplementary evidence confirming the defendants and their adult children still occupied the property and the anticipated sale did not proceed, the court was satisfied that the requirements of Rule 60.10(2) of the Rules of Civil Procedure were met.

The court granted the plaintiff leave to issue the writ of possession.

The Appellants sought an order to vacate Certificates of Pending Litigation (CPLs) and a writ of seizure and sale registered against their properties, pending the determination of their appeals from a judgment and a CPL order.

They proposed paying the judgment amount into court as security to facilitate the sale of the properties to a third party.

The Respondent opposed, arguing that prior agreements required the full sale proceeds to be paid into court and that the Appellants had failed to disclose the sale agreement earlier.

The court found that the prior agreements contemplated a sale before the final determination of damages and that the Appellants' liability was now fixed by the judgment.

The motion was granted, allowing the CPLs and writ to be vacated upon the Appellants paying $1,750,000 into court as reasonable security, balancing the parties' interests.

The moving parties (mortgagees and their principal) brought motions in the Court of Appeal for Ontario seeking security for costs of an appeal, lifting a temporary stay of a writ of possession, further security for costs awarded below, and expediting the appeal.

The responding parties (mortgagors/appellants) had appealed a judgment enforcing minutes of settlement and granting a writ of possession, which had been temporarily stayed conditional on tax payments.

The court found the appeal grounds frivolous and vexatious, and the responding parties had insufficient assets.

The court granted security for costs and lifted the temporary stay, finding the responding parties breached the stay condition and that the writ of possession was not automatically stayed.

The motions for further security for costs below and expediting the appeal were dismissed.

Hazelton Homes Corporation (Plaintiff) claimed beneficial ownership of two properties registered to Morteza Katebian, who had defaulted on mortgages held by Home Trust Company and Ivan Terziev and Elena Mechtcheriakova (Second Mortgagees).

Following the conversion of applications into an action, the defendants (Katebian, Payam, Home Trust, and Second Mortgagees) moved for security for costs against Hazelton.

The court found good reason to believe Hazelton's claim against Home Trust and the Second Mortgagees was frivolous and vexatious, and that Hazelton, a shell corporation, had insufficient assets.

The motion for security for costs was granted for Home Trust and the Second Mortgagees, with specific amounts ordered to be paid into court or credited from existing holdbacks.

Katebian and Payam's motion for security for costs was adjourned pending their delivery of a Statement of Defence.

The appellants appealed a summary judgment dismissing their action against the respondents as statute-barred under the Limitations Act, 2002.

The motion judge found the appellants discovered their potential cause of action in May 2006, but did not commence the action until April 2018, well beyond the applicable limitation periods.

The Court of Appeal found no palpable and overriding error in the motion judge's conclusion regarding the discovery date and dismissed the appeal, affirming the application of the Limitations Act.

The appellant appealed a judgment granting the respondent's application for enforcement of a 2013 settlement agreement concerning the sale of a veterinary clinic property.

The settlement agreement provided that following a five-year lease extension, the appellant would transfer title to the property to the respondent for $1,250,000 plus HST.

The appellant refused to close the sale in 2018, arguing that the application was procedurally improper, that the agreement was frustrated due to a significant increase in property value, and that specific performance was not an appropriate remedy.

The Court of Appeal dismissed the appeal and upheld the order for specific performance.

The applicants sought orders regarding an easement for pedestrian passage over the respondents' property, including the permanent removal or opening of a gate, prevention of blocking the easement, prevention of moving personal property from a public beach, and clarification of guest rights.

The court largely dismissed the application, finding that the gate did not substantially interfere with the easement and that the applicants had no legal right to store chattels on the public beach.

However, the court granted a varied order preventing the respondents from blocking the easement for the applicants and specific categories of guests, and clarified the scope of the easement accordingly.

Costs were presumed in favour of the respondents.

This is a costs endorsement following an appeal from orders of the Superior Court of Justice.

The appeal involved four consolidated actions concerning personal liability of corporate directors and officers in the context of real estate development and mortgage transactions.

The Court of Appeal upheld the motion judge's conclusions on the legal issue of personal liability based on pleaded allegations and legal principles.

The costs decision addresses the appropriate costs awards for the successful and unsuccessful parties across the multiple appeals.

The plaintiff commercial landlord sought summary judgment against an indemnifier for unpaid rent and charges under two commercial leases.

The court determined that the landlord's demand for a fee to consent to a change in corporate control, while unreasonable, did not release the indemnifier from their obligations.

The indemnifier was found liable for the tenant's obligations under both leases, subject to specific reductions in the landlord's claimed damages for historic, unbilled expenses.

The Applicants brought a motion seeking an accounting of loans and a determination regarding the collateral nature of a $650,000 mortgage (the "Castlemore Mortgage") against 4415 Castlemore Road, Brampton, in relation to a $700,000 mortgage (the "Wilson Mortgage") against 1031 Wilson Avenue, Toronto.

While the accounting issue was resolved, the central dispute concerned whether the Castlemore Mortgage was collateral to the Wilson Mortgage, and if an amendment deleting the collateral provision was valid.

The court found that the Castlemore Mortgage was not collateral security for the Wilson Mortgage due to a valid amendment registered in April 2015, and that the Respondent Graff was entitled to rely on this amendment, despite the Applicants' claims of lack of authority by the bare trustee.

The Applicants' motion was dismissed.

The Plaintiffs moved for summary judgment against Ashok and Usha Badhwar on a written guarantee secured by a mortgage, and for default judgment against Rochak Badhwar for an unpaid debt of $938,919.12.

The Badhwars raised the defence of non est factum, claiming they did not know what they were signing and that there was no consideration for the guarantee.

The court found no misrepresentation to support the non est factum defence, as conceded by Badhwar on cross-examination.

The defence of no consideration due to the guarantee being signed after loan monies were advanced was not considered because it was not properly pleaded.

Applying the principles from Hryniak v. Mauldin, the court found no genuine issue requiring a trial and granted judgment against Rochak and the Badhwars, allowing enforcement of the mortgage.

The plaintiff tenant sought a declaration that a restrictive clause in its commercial lease prevented the landlord from leasing space in the plaza to a Tim Hortons franchise.

The court was tasked with interpreting the restrictive clause, specifically whether it should be construed statically (comparing to the tenant's business in 1991 when the clause was introduced) or dynamically (comparing to the current tenant's business).

The court adopted a static interpretation, finding that the proposed Tim Hortons business was not of a similar nature to the original "Corner Restaurant" in terms of menu and eat-in seating facilities.

Even under a dynamic interpretation, Tim Hortons was found not to be similar to the current "Wimpy's" restaurant.

The motion for the declaration was dismissed, and the defendant was awarded costs.