Williams v. Ontario, 2012 ONSC 5780

Williams v. Ontario, 2012 ONSC 5780

CITATION: Williams v. Ontario, 2012 ONSC 5780

COURT FILE NO.: 420/12

DATE: 20121009

ONTARIO

SUPERIOR COURT OF JUSTICE

DIVISIONAL COURT

LAX, HAMBLY and LEDERER JJ.

B E T W E E N :

KRYSTAL SUMMER WILLIAMS

Applicant

– and –

HER MAJESTY THE QUEEN IN RIGHT OF ONTARIO

Respondent

Peter T. Fallis, for the Applicant

Eunice Machado, for the Respondent

HEARD AT TORONTO: October 9, 2012

ORAL REASONS FOR JUDGMENT

LAX J. (orally):

1This is an application for judicial review of the decision of the Director of Land Titles and Senior Deputy Director of Land Registration in Ontario (“Director”) to place a freeze on the land records for a particular piece of property in the land registry system. The Applicant submits that the Director acted ultra vires her authority under the Registry Act, R.S.O. 1990, ch. R. 20 (“the Act”) in placing such a freeze, or, in the alternative, that the Director exercised her discretion to place this freeze in an incorrect or unreasonable manner.

2Ontario operates two land registration systems. In the land titles system, a statement of title confirming ownership is provided for each registered property and the Ontario government guarantees that the owner is the party named on the register. In the registry system, the government does not provide a guarantee of ownership and a purchaser must search title to satisfy himself or herself that a potential vendor has valid property to convey. Ontario has converted most properties registered in the registry system to the land titles system; however approximately 36,000 properties remain in the registry system.

3Section 112 of the Registry Act provides that a person dealing with land in the registry system only has to trace the chain of title back for forty years to receive good title. This is commonly referred to as the “forty year rule.”

4The property in question is a portion of land that was severed into many parcels below the Niagara escarpment along Georgian Bay. The property contains the land occupying the face of the escarpment. The Abstract of Title indicates that there have been no dealings with the property since May 1, 1936. The property is a “remnant” property which adjoins several regular lots.

5On April 11, 2011 the Applicant presented a transfer/deed of land in respect of the property for registration at the Land Registry Office in Bruce County. Around the time of this transaction the Applicant had registered 13 transfers of properties at various Land Registry Offices. In each instance, she listed herself as both the transferor and the transferee. She admits she did not own or have any interest in this property prior to registration. The Respondent submits that the Applicant was involved in a scheme to convey title to property that she does not own.

6The property was registered by the Bruce Land Registrar as Instrument No. R419098 in the registry system.

7On May 11, 2011, the Director wrote to the Applicant asking her to contact her staff to discuss concerns regarding the self-to-self transfers. She did not get a response from the Applicant.

8On June 15, 2011, the Director sent a Notice letter to the Applicant setting out s. 97.1(c) of the Act and stating that she “[has] become aware of the registration of [the self-to-self transfer of the property] in respect of which there does not appear to be any legal right in the grantor named in the transfers to transfer the properties described therein, and therefore finds that something is amiss”. The Director`s letter then provided that she had instructed the Land Registrar to freeze the land records for the property to provide an opportunity to investigate the matter. The practical effect of such a freeze is that it blocks the Instrument from view by the public through the Land Registry System. The Director also asked the Applicant to submit evidence of her authority to transfer the property within ten days, and stated she would delete the Instrument if she did not receive such submissions within that timeframe.

9On June 24, 2011, the Applicant responded to the Director by letter from her Solicitor. This letter indicated that the Applicant took the position that the Director does not have the authority to remove or question the validity of the Instrument, or to put a freeze on the property. In response, the Director left the freeze in place. On July 3, 2012, the Applicant entered into an agreement to sell the property. The Applicant acknowledges that she knows the Purchaser. The Purchaser attempted to search title on the property and received a notification indicating “[n]o dealings with this property – Please contact the Land Registrar”.

10The Applicant`s position is that the Director does not have the authority under the Act to remove or question the validity of the Instrument or to put a freeze on the property in the registry system.

11The Respondent takes the position that the Director had this authority and relies on sections 23(a)(ii), 97(f) and 97.1(c) of the Act which are set out below.

23. The land registrar may,

(a) refuse to accept for registration an instrument,

(ii) that contains or has attached to it material that does not in the land registrar`s opinion affect or relate to an interest in land,

97. The Director shall,

(f) direct the land registrar how and in what manner to do any particular Act or amend or correct whatever the Director may find amiss if the directions relate to the powers and duties of the Director.

97.1 The Director of Titles shall,

(c) direct the land registrar how and in what manner to do any particular act or amend or correct whatever the Director of Titles may find amiss, if the directions relate to the powers and duties of the Director of Titles and …

12On the issue of jurisdiction, the parties agree that the standard of review is correctness. We agree.

13The Applicant submits that section 97.1 must be interpreted in light of the purpose of the Act and the other provisions in the statutory scheme. She submits that the purpose of the Act in the registry system is to provide the public with the information necessary to assess the quality of title on specific parcels of land. The Directors power should thus be interpreted in a way that promotes public access to registry information. She further submits that taken as a whole the Directors duties and powers under the Act relate to the technical administration of the data that the Land Registry Offices accept, record, organize and make available to the public. We do not agree.

14The registry system exists for the purposes of ensuring efficiency, reduction of wrongful dealings and fair risk distribution. It follows that the Directors authority includes the power to investigate and take preventative action when suspicious registrations are made or noticed. [Section 23](https://www.canlii.org/en/on/laws/stat/rso-1990-c-r20/latest/rso-1990-c-r20.html) of the [Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-r20/latest/rso-1990-c-r20.html) permits a land registrar to refuse to accept instruments that do not affect or relate to an interest in land. The Applicant acknowledged she had no interest in the land. Section 97(f) and section 97.1(c) set out the authority to direct a land registrar to do “any particular act”. The Directors authority to amend or correct “whatever the Director may find amiss” is expansive and grants the Director the authority to correct a registration that should have been refused under s.23. We conclude that the Director acted within her jurisdiction.

15The remaining question is with respect to the exercise of this jurisdiction. We agree with the respondent that the standard of review is reasonableness. Faced with a suspicious situation the Director acted reasonably in freezing the land records in order to determine the propriety of the self-to-self transfer. Moreover, even if the applicant would otherwise be entitled to a remedy in this case (which in our view she is not), we would exercise our inherent jurisdiction to deny relief. In our view this was merely a scheme to create an interest in land where none exists. As the Federal Court stated in Basu v. Canada, [1992] 2 S.C. 38 at para. 11-12: “it would be manifestly unacceptable to fair minded or right thinking persons that a Court would assist a plaintiff who has defied the law”.

16The application is therefore dismissed.

17We have endorsed the record “for reasons given orally the application is dismissed with costs agreed in the amount of $20,000”.