Real Estate Law

The appellants appealed a Small Claims Court decision dismissing an action for damages arising from a failed real estate transaction.

The seller sought damages beyond forfeiture of a $500 deposit after the purchaser backed out of an agreement of purchase and sale due to loss of employment.

The appellate court held that the deputy judge correctly interpreted Schedule “C” of the agreement as limiting the seller’s recovery to forfeiture of the deposit.

The court also found no error in declining to consider affidavit opinion evidence or settlement conference material.

The appeal was dismissed.

Following reasons for decision after a trial of specific issues concerning alleged smoke migration into a condominium unit and alleged breaches of repair and maintenance obligations under the Condominium Act, the court addressed the appropriate costs award.

Although the substantive issues had been decided in favour of the respondents, the court had provisionally awarded costs to the applicants and invited submissions regarding scale and quantum.

The applicants sought substantial indemnity costs exceeding $64,000, while the respondents argued either for no costs or for limited partial indemnity costs.

The court held that substantial indemnity costs are reserved for rare and exceptional circumstances involving reprehensible conduct and that such circumstances were not present.

Applying proportionality and Rule 57.01 factors, the court fixed partial indemnity costs at $32,500 inclusive of disbursements and HST.

The applicant school board appealed decisions of the City’s Chief Building Official concluding that a proposed refurbishment of school sports facilities with a private operator did not fall within a zoning by‑law exemption for land used only for teaching or instructional purposes.

The proposal would allow a private company to operate the facilities commercially for the majority of the time.

The court held that while incidental non‑school uses of school facilities may fall within the exemption, intensive commercial exploitation does not.

Given the scale and commercial nature of the proposed use, the project did not qualify for the exemption and required a zoning variance through the municipal planning process.

Mortgagees obtained summary judgment in a mortgage action and subsequently obtained an order permitting the issuance of writs of possession.

The corporate mortgagor defendants brought a motion to set aside or vary the order granting leave to issue the writs, alleging the order was obtained without notice and based on misleading facts.

The court held that the motion without notice was permitted under the Rules of Civil Procedure and that there was no evidentiary basis supporting the allegations of misrepresentation.

The defendants admitted the mortgage debt but provided no evidence demonstrating the ability to repay the amounts owing.

The court found no basis to interfere with the master's order and dismissed the motion.

The defendants brought a motion for summary judgment seeking dismissal of a claim by a warranty administrator to recover amounts paid from a statutory guarantee fund for condominium common element defects.

The motion raised issues of statutory interpretation under the Ontario New Home Warranties Plan Act concerning whether a condominium corporation is entitled to enforce warranty rights relating to common elements.

The court held that the statute deems a condominium corporation to be the owner of common elements for warranty purposes and therefore entitled to enforce such warranties.

Alternatively, the warranty administrator was entitled to pursue recovery through statutory subrogation after paying claims from the guarantee fund.

The defendants’ motion was dismissed and the indemnitor was declared personally liable for any deficiency once the amount is quantified.

The moving defendants sought partial summary judgment dismissing the landlord’s claim for prospective rent damages following an alleged repudiation of a commercial lease.

The motion raised legal questions concerning the fourth remedy identified in Highway Properties Ltd. v. Kelly, Douglas and Co., including whether notice of a claim for prospective damages must be provided and whether the issuance of a statement of claim can satisfy that notice requirement.

The court found that the law on these issues was unclear and therefore constituted a genuine issue of law.

Pursuant to Rule 20.04(4) of the Rules of Civil Procedure, a master must adjourn such motions to a judge where the issue may be determined on summary judgment.

The motion was therefore adjourned to a judge, with limited costs awarded to the responding party for the adjournment issue.

A municipality applied for court confirmation of emergency building orders relating to a failed residential septic system and sought recovery of remediation costs to be added to the property tax roll under the Building Code Act and Municipal Act.

The court held it lacked jurisdiction to confirm the municipality’s orders because statutory service and procedural requirements under the Building Code Act had not been complied with.

The court nevertheless found the septic system had failed and that the municipality reasonably incurred pumping costs to mitigate sewage seepage.

Fees related to an engineering report were not recoverable because the municipality unreasonably delayed disclosing the report to the homeowner.

Judgment was granted only for the septic pumping costs, which were ordered to be added to the property’s tax roll as a priority lien.

The judgment creditor brought a motion for directions regarding enforcement of a writ of seizure and sale and related garnishment proceedings against the judgment debtor.

A mortgagee who was not a party to the action sought an adjournment to permit filing further materials and cross‑examinations, while opposing the judgment creditor’s request that any proceeds of sale of the debtor’s property be paid into court pending determination of mortgage priority issues.

The court found several concerning circumstances surrounding the mortgage assignment, including its timing after registration of the writ and the non‑arm’s‑length relationship between the mortgagor and mortgagee.

To preserve the rights of all parties while related family law, power of sale, and enforcement proceedings continued, the court granted the adjournment but imposed a condition that sale proceeds be paid into court if the property sold.

Following a successful motion for declaratory and injunctive relief concerning a mutual driveway right-of-way, the successful party sought costs on a substantial indemnity basis.

The court considered the factors under Rule 57.01 of the Rules of Civil Procedure and the effect of settlement offers under Rule 49.10.

The evidence showed repeated reasonable settlement attempts by the successful party and an inflexible litigation position by the opposing party, which contributed to the need for the motion.

The court found that the result obtained was at least as favourable as the formal offer to settle and awarded partial indemnity costs to the date of the offer and substantial indemnity costs thereafter.

Costs were fixed at $20,336.52 plus HST.

A real estate brokerage sued a homeowner seeking recovery of commission following the sale of the homeowner’s property.

The brokerage argued its agent introduced the eventual buyers and performed services leading to the sale.

The court found the agent merely forwarded an MLS listing and prepared an offer that was never accepted, while the final agreement of purchase and sale was prepared independently without any commission clause.

Because the agent did not produce an accepted offer meeting the seller’s commission conditions and did not complete the transaction, no contractual entitlement to commission arose.

The claim was dismissed.

A municipality brought a motion seeking directions regarding service of a notice of application for a declaration under the Beds of Navigable Waters Act concerning whether a stream crossing the respondents’ property was navigable at the time of the original Crown grant in 1831.

The respondents asserted that the stream created a natural severance of their land and that the stream bed was unpatented Crown land.

The court held that the only issue in the application was whether the waterway was navigable at the time of the Crown grant, which affected only the parties to the proceeding.

Upstream and downstream landowners would need to litigate the issue independently based on their own Crown grants.

Accordingly, no additional parties were required to be served, and directions were provided regarding the order of proof at trial.

Following disposition of an application concerning condominium governance and alleged oppression, the court determined costs.

Although the applicant obtained a remedial order requiring the condominium corporation to comply with governance requirements under the Condominium Act, 1998, the central oppression claim concerning outdoor storage in common elements was unsuccessful.

The court found the respondents were largely successful and entitled to partial indemnity costs.

However, their costs were reduced to reflect the remedial governance order obtained at the instance of the applicant.

Costs were fixed at $12,288.48 inclusive of fees, disbursements, and HST.

The plaintiff sought an order setting aside two certificates of pending litigation registered against title to residential property in Vaughan to allow completion of a pending sale.

The court found that the certificates had been obtained on the basis of affidavit evidence that was misleading and false in material respects, including failure to disclose that the registered owner had died.

The court held that the plaintiff should not benefit from such misrepresentations but permitted the certificates to be vacated only on strict conditions.

The plaintiff was required to pay into court an amount representing the difference between the sale proceeds and the court‑determined fair market value of the property, less specified deductions.

If the payment was not made, the certificates would remain and the court would consider appointing a receiver.

The plaintiff sought enforcement of a written agreement entitling her to 50% of the net proceeds from the sale of a residential property in exchange for assisting with the sale.

The court held that the agreement was unenforceable because it constituted remuneration for services connected with a trade in real estate while the plaintiff was not registered under the Real Estate and Business Brokers Act, 2002.

In the alternative, the court found the agreement unconscionable due to the defendant’s vulnerability and the grossly improvident bargain.

The plaintiff had taken advantage of the defendant’s severe depression and unequal bargaining position to obtain half the equity of the property for relatively minor work.

The plaintiff’s claim was dismissed and she was ordered to repay funds previously garnished under a default judgment, subject to limited offsets.

Following dismissal of the plaintiff’s summary judgment motion in a real estate misrepresentation action arising from the purchase of a house, the court addressed the defendants’ request for costs.

The defendants sought more than $7,000 for the motion.

The court held that the amount claimed was disproportionate to the modest damages sought and the simplicity of the proceeding, and noted that the plaintiff had reasonably commenced the claim against both vendors and had resorted to summary judgment after waiting years for a trial date.

Costs were reduced and fixed at a lower amount.

The court also ordered that the costs be payable only at the conclusion of the trial due to fairness considerations arising from the plaintiff’s circumstances.

The purchaser brought a motion for summary judgment seeking return of a $100,000 deposit paid under an agreement of purchase and sale for residential property after the transaction failed to close.

The vendor refused to close unless the purchaser agreed to additional conditions concerning demolition or renovation that were not contained in the agreement.

The court found the vendor’s conduct constituted anticipatory breach and repudiation of the agreement.

The purchaser was therefore entitled to recover the deposit.

In any event, even if the purchaser had repudiated the agreement, the court would grant equitable relief from forfeiture because the vendor resold the property at a significantly higher price and suffered no financial loss.

The plaintiff mortgagee brought proceedings arising from a default under a mortgage registered against a commercial property.

The mortgage secured a principal amount of $1.2 million and had matured without any payments being made.

The defendant mortgagor and related parties challenged enforcement steps following the issuance of a notice of sale under the Mortgages Act.

The court found there was no viable defence to the enforcement proceedings and granted possession and ancillary relief, including orders directing tenants and government agencies to pay rents directly to the mortgagee.

On a Rule 20 summary judgment motion, moving defendants sought dismissal of claims as statute-barred under ss. 4 and 5 of the Limitations Act, 2002.

The court heard affidavit and oral evidence on discoverability and due diligence, and found the responding parties knew by 2005-2006 of the impugned transfer and related litigation but chose not to investigate potential claims against additional actors.

Applying the objective branch of discoverability and diligence principles, the court held that a reasonable person in their circumstances ought to have known the material facts in 2006.

The court concluded there was no genuine issue requiring trial on the limitations defence and dismissed the action against the moving defendants.