Clarke v. Daley, 2006 CanLII 7506 (ON SCDC)

SUPERIOR COURT OF JUSTICE - DIVISIONAL COURT

COURT FILE NO.: DC-05-076061-00 ONTARIO

BEFORE: DURNO, ASTON and WILSON, JJ.

BETWEEN:

FAYE CLARKE Applicant / Respondent on the Appeal

• AND -

IVYLIN DALEY Appellant on the Appeal

COUNSEL: Salvatore Mannella for the Respondent Paul Feldman for the Appellant

HEARD AT NEWMARKET: March 8, 2006

REASONS

WILSON, J.:

1This is an appeal from the decision of Boyko J. dated June 7th, 2005. She ordered that the property municipally known as 1335 Weston Road be sold, pursuant to the Partition Act, R.S.O 1990, c. P.4 (the Property).

2The Appellant, Ivylin Daley, is a registered owner of fifty percent interest in the Property. She appeals from the decision of Boyko J. for three reasons. She alleges that the learned judge erred by:

(1) failing to adjourn to permit further cross-examinations of the Respondent; (2) by refusing leave to file a further Affidavit of the Appellant; and (3) for failing to order the trial of an issue with respect to ownership of the property.

3The Appellant and Respondent are the registered owners of the Property. It was acquired in 1985 and was originally registered in the name of Faye Clarke and Patrick Daley. In 1994 Patrick Daley transferred a fifty percent undivided interest in the Property to his spouse, Ivylin Daley, the Appellant in this appeal.

4The Property is a commercial property. It was run originally largely by Faye Clarke until 1991. In 1991 Patrick Daley and the Appellant assumed responsibility for the Property.

5The Appellant asserts that there was an oral agreement in 1991 that the interest of Faye Clarke would be relinquished by transferring to her the inventory in the grocery store, which was being operated from the Property at that time. The Respondent, Faye Clarke, denies these allegations and asserts an interest in the Property today.

6There is no document in writing supporting the position of the Appellant.

7Boyko J. in her Reasons provides as follows:

"The Affidavit tendered by the Respondent, sworn last night, offends Rule 39.02 – he has already chosen to cross-examine on an earlier Affidavit without waiting for reply Affidavit. It is no answer to say he was unaware there would be further Affidavits before he sought to cross-examine.

The Respondent’s motion to convert the Application into an action or to order the trial of an issue on the question of ownership is denied. Primarily the evidence alleging the ownership was transferred is not in writing and wouldn’t meet the Statue of Frauds. Also the evidence relied on by the Respondent, namely the transfer of inventory in satisfaction, doesn’t go to the issue of ownership. Further, a person with an interest may apply under the Partition Act. All of the cases cited by the Respondent are distinguishable: Ostler v Rogers [1978] O.J. No. 491; Blackhall v Jardine [1958] O.L. No. 457; Kulczycki v Kulczycki (1949). Issue of compensation is distinguishable from ownership.

No further cross-examination shall take place. They are completed."

ISSUE 1: FAIL TO ADJOURN

8We are not satisfied that the failure to adjourn to allow cross-examinations was a reviewable error. The Appellant’s counsel had an opportunity between June 2nd and June 7th, 2005 to proceed with a cross-examination had he wished to do so.

ISSUE 2: FAILURE TO ALLOW FILING OF FURTHER AFFIDAVIT

9The Statute of Frauds may be defeated if the stringent test of part performance is met as outlined in a recent decision in Neighbourhood of Cornell Inc. v 1440106 Ontario Inc. [2003] O.J. No. 2919 (S.C.J.) Unless this test is met, the Appellant cannot succeed.

10The second Affidavit of the Appellant was presented to Justice Boyko the morning of the hearing. She did not accept it as part of the record. There is a dispute between counsel as to whether Justice Boyko read the Affidavit before rejecting it. Counsel have agreed, however, that we may read the second Affidavit to determine its relevance, if any, on this appeal. Its contents are relevant to the third issue; that is, should there be a trial of an issue.

11In our view, perhaps the Affidavit of the Appellant should have been allowed to be filed, given that a second Affidavit was filed by Faye Clarke; to allow the record to be complete with respect to the part performance issue. We note, however, that the case alleging part performance, that was cited by us this morning, was not before Boyko J., and was not previously argued. This may well have influenced her decision on this issue.

ISSUE 3: TRIAL OF AN ISSUE

12The law with respect to defeating a registered title to property is outlined in the recent comprehensive decision of Spiegel J., in Neighbourhood of Cornell Inc. Spiegel J. outlines the law applicable in paragraphs 59 and 63 as follows:

"It is clear from the authorities that it is first necessary to prove the acts of part performance before evidence can be led as to the existence of an oral agreement."

13The court then goes on to consider the decision in Deglman v Guaranty Trust 1954 2 (SCC), [1954] 3 D.L.R. 785 (S.C.C.), where Cartwright J. confirms that these acts of part performance must be:

"…unequivocally referable in their own nature to some dealing with the land, which is alleged to have been the subject of the agreement sued upon."

14Justice Spiegel, at paragraph 63, outlines the test for part performance as follows:

"The Plaintiff refers to Starlite Variety Stores Ltd. V Cloverlawn Investments Ltd. (1978), 92 D.L.R (3d) 270 at 275 (H.C.J.) where Stark J. lists the essential elements as follows:

(1) The acts of part performance must be such as to not only be referable to the contract such as that alleged, to be referable to no other title; (2) They must be such as to render it a fraud and allow the Defendant to take advantage of the contract not being in writing; (3) The contract to which they refer must be one that is enforceable by the Court."

15We note that the Neighbourhood of Cornell Inc. decision deals with s.4 of the Statute of Frauds as opposed to s.2, which was what was argued before Justice Boyko.

16We have carefully reviewed both of the Affidavits of the Appellant. We have grave doubts whether the contents of the Appellant’s Affidavits, even if accepted by a trial judge as being true, constitute sufficient acts of unequivocal part performance to meet the threshold faced by the Appellant. In our view, however, the issue should be determined by a Court with the benefit of cross-examination before a judge.

17This is an Application. In our view there should be a trial of an issue as to whether Faye Clarke has surrendered her interest in the Property.

18The record shall consist of the record before us. It should also include the Affidavit of the Appellant, which was signed June 6th, 2005, which was filed as an exhibit before us.

19We are concerned about the issue of costs and delay. The simplified procedure may be adapted as agreed to between the parties to ensure that costs are kept to a reasonable level.