CITATION: Fram Elgin Mills 90 Inc. v. Romandale Farms Ltd., 2016 ONSC 3067

DIVISIONAL COURT FILE NO.: 661/15

COURT FILE NO.: CV-07-336058PD3

DATE: 20160517

SUPERIOR COURT OF JUSTICE – ONTARIO

DIVISIONAL COURT

RE: Fram Elgin Mills 90 Inc., Plaintiff/Moving Party

AND:

Jeffrey Kerbel, 2001251 Ontario Inc. and First Elgin Developments, Defendants/Moving Parties

AND:

Romandale Farms Ltd., Defendant/Responding Party

BEFORE: Thorburn J.

COUNSEL: Sara Erskine, Robert Reuter and Janet Lunau, for the Plaintiff/Moving Party, Fram Elgin Mills 90 Inc.

Martin Henderson and Miranda Spence, for the Defendants/ Moving Parties, Jeffrey Kerbel, 2001251 Ontario Inc. and First Elgin Developments

Sarit Batner and Kosta Kalogiros, for the Defendant/Respondent, Romandale Farms Ltd.

HEARD: In writing

ENDORSEMENT

OVERVIEW

[1] This is a motion for leave to appeal the Order of Dunphy J.

[2] In the underlying action between Fram Elgin Mills 90 Inc. (“Fram”) and Romandale Farms Ltd. (“Romandale”), Fram claims an interest in a 275 acre parcel of land in Markham, Ontario. All of the land was at one time owned by Romandale.

[3] Romandale denies that Fram has any right to the land.

[4] Through this action, the court has been asked by Fram and Romandale to decide whether Fram has an interest in the land and if so, what that interest is.

[5] Fram and Romandale’s respective interest in and disposition of their interest in the land is set out in three agreements:

i. Co-Owners Agreements between Fram and Romandale which divide ownership of the land between them on certain terms;

ii. an Agreement between Romandale and a third party, 2001251 Ontario Inc. (“2001251”), by which Romandale agreed to sell all of its interest in the land to 2001251 on certain terms; and

iii. a Settlement Agreement between Fram and 2001251 and its related entities by which Fram agreed to purchase 50% of 2001251’s interest in the land on certain terms.

[6] Interpretation of the terms of these agreements, whether the parties fulfilled the terms in these agreements, and the behaviour of Fram, Romandale and 2001251 are all hotly contested issues. They may be determinative of the issue of Fram’s ownership and/or interest in the property which is the central issue in this action between Fram and Romandale.

[7] Dunphy J. held that Romandale should be permitted to file its proposed Amended Defence, and 2001251 should be joined as a necessary party to the Claim commenced by Fram “for the limited purpose of being bound by the determination of the court” as to whether:

i. the Settlement Agreement should be approved by the court and on what terms,

ii. the 2001251 Agreement remains enforceable as against Romandale, and/or

iii. Romandale can repudiate the 2001251 Agreement unilaterally.

[8] Dunphy J. further ordered that the injunction preventing Romandale from disposing of the land before trial be dissolved.

[9] Fram and 2001251 seek leave to appeal Dunphy J.’s decision to the Divisional Court on the basis that it constitutes a collateral attack on previous court orders and, in the alternative, there is good reason to doubt the correctness of the Order and the issue involves a matter of general importance.

[10] The motions by Fram and 2001251 and its related entities (each of which is in writing) are to be decided together.

[11] For the reasons that follow, leave to appeal to the Divisional Court is granted.

THE COURT’S JURISDICTION

[12] Under s. 19(1)(b) of the Courts of Justice Act, R.S.O. 1990, c. C. 43, an appeal of an interlocutory order of a judge of the Superior Court of Justice lies to the Divisional Court with leave as provided in the Rules of Court. Motions for leave to appeal are brought before a single judge of the Divisional Court.

STANDARD OF REVIEW

[13] Fram and the Kerbel companies (“Kerbel”) seek leave to appeal the Order of Dunphy J. Rule 62.02 (4) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides that leave to appeal shall not be granted unless,

(a) there is a conflicting decision by another judge or court in Ontario or elsewhere on the matter involved in the proposed appeal and it is, in the opinion of the judge hearing the motion, desirable that leave to appeal be granted; or

(b) there appears to the judge hearing the motion good reason to doubt the correctness of the order in question and the proposed appeal involves matters of such importance that, in his or her opinion, leave to appeal should be granted.

[14] Under Rule 62.02(4)(a), a “conflicting decision” must be with respect to a matter of principle, not merely a situation in which a different result was reached in respect of particular facts. (Comtrade Petroleum Inc. v. 490300 Ontario Ltd. (1992), 1992 7405 (ON SC), 7 O.R. (3d) 542 (Div. Ct.).)

[15] Under Rule 62.02(4)(b), it is not necessary that the judge granting leave be satisfied that the decision in question was actually wrong – the correctness of the order must simply be open to “very serious debate”. (Nazari v. OTIP/RAEO Insurance Co., 2003 40868 (ON SC), [2003] O.J. No. 3442 (S.C.J.); Ash v. Lloyd’s Corp. (1992), 1992 7652 (ON SC), 8 O.R. (3d) 282 (Gen. Div.).) In addition, the moving party must demonstrate matters of importance that go beyond the interests of the immediate parties and involve questions of general or public importance relevant to the development of the law and administration of justice. (Rankin v. McLeod, Young, Weir Ltd. (1986), 1986 2749 (ON SC), 57 O.R. (2d) 569 (H.C.J.); Greslik v. Ontario Legal Aid Plan (1988), 1988 4842 (ON SCDC), 65 O.R. (2d) 110 (Div. Ct.).)

THE ISSUES

[16] The two issues raised by the moving parties, Fram and Kerbel, are:

i. Does the Order of Dunphy J. constitute a collateral attack on previous orders of Spence J., Master Graham and/or Kiteley J., thereby conflicting with other decisions of the court such that it is desirable that leave be granted in accordance with Rule 62.02(4)(a)? and

ii. Is there good reason to doubt the correctness of Dunphy J.’s Order and if so, does the proposed appeal involve matters of such importance that leave is warranted? The moving parties assert that,

a. Romandale’s proposed amendments would cause prejudice to Fram;

b. Romandale’s amendments are not legally tenable;

c. Romandale’s amendments are seeking to withdraw admissions, and

d. The doctrines of res judicata, abuse of process and/or the Limitations Act, 2002 apply.

THE RELEVANT TERMS OF THE AGREEMENTS AND COURT ORDERS

The Co-Owners Agreements

[17] Romandale owned a 275 acre parcel of land near Toronto. Romandale sought Fram’s assistance to develop the land. They entered into Co-Ownership and Co-Management agreements.

[18] The two separate but identical Co-Owner Agreements provide that a 95% interest in the land belongs to Romandale and 5% belongs to Fram.

[19] The Co-Owners Agreement restricts the parties’ ability to make dispositions respecting the land unless there is either express consent of the other co-owner or in the following circumstances:

a. The “buy-sell” provisions of Article 5.07: These provisions permit a co-owner to offer to buy the other co-owner’s entire interest and sell its entire interest to the other co-owner. The “buy-sell” provisions may not be exercised by a co-owner in default. Further, the “buy-sell” provision may only be exercised in two situations: (1) where Secondary Plan Approval has been obtained for the lands; or (2) where the Development Management Agreement is terminated. Secondary Plan Approval refers to the Town of Markham approvals process that would be necessary to develop the lands.

b. Authorization to permit Romandale to sell up to 39% of the lands to another party (Article 5.10): Subject to a series of notice and administrative requirements, Article 5.10 provides that if Romandale exercises this right, Fram can “tag-along” and sell Romandale its interest on the same terms.

[20] In May 2003, Romandale sold a 5% interest in the lands to Fram.

[21] Fram and Romandale had a disagreement.

The 2001251 Agreement

[22] In 2005, Romandale entered into an agreement with 2001251 Ontario Inc. (a company owned by Jeffrey Kerbel).

[23] Pursuant to the terms of the 2001251 Agreement, Romandale agreed to sell all of its interest in the land to 2001251 for $160,000 per acre.

[24] The sale would take place in two parts: the first part was the sale of 5% of Romandale’s interest in the land to 2001251 effective January 31, 2006; the second part was to sell Romandale’s remaining interest in the land to 2001251 conditional on Romandale validly exercising its “buy-sell” rights under the Co-Owners Agreement or by obtaining Fram’s consent which it undertook to make reasonable efforts to secure.

[25] Title to the 5% interest was taken by First Elgin Developments (another company owned by Jeffrey Kerbel).

[26] Article 5 of the 2001251 Agreement provides that Romandale irrevocably appoints 2001251 as its exclusive agent in connection with the exercise of the buy-sell rights in the Co-Owners Agreement. Article 5 further provides that this right is intended “without limitation” to cause Romandale to trigger the buy-sell rights “following Secondary Plan Approval”.

[27] On February 26, 2007, Romandale sold another 7% of its interest to 2001251.

Fram’s Action against Romandale and the Kerbel Companies

[28] In July 2007, after Fram discovered that Romandale had entered into the 2001251 Agreement and “irrevocably” appointed 2001251 to act on behalf of Romandale in respect of the buy-sell provisions in the Co-Owners Agreements, Fram issued a Statement of Claim against Romandale and Jeffrey Kerbel, 2001251 Ontario Inc., and First Elgin Developments (the Kerbel companies).

[29] Fram claimed that in signing the 2001251 Agreement, Romandale breached the Co-Owners Agreement, as (a) the conditional sale to 2001251 represented a disposition of the land greater than the 39% allowed under Article 5.10 of the Co-Owners Agreement and (b) Romandale failed to provide notice of the sale of the land. Fram also sought a declaration that the Co-Owners Agreement was void, an Order requiring Romandale to sell its interest in the land to Fram, and damages from the Kerbel companies.

[30] On July 26, 2007, Forestell J. issued an injunction against Romandale restraining further disposition of the lands. She held that “the original intent of the 2001251 Agreement was that the sale to Kerbel of the remaining interest of Romandale in the Land would not occur until sometime after the Secondary Plan Approval.”

The Settlement Agreement

[31] In December 2010, Fram entered into a Settlement Agreement with the Kerbel companies whereby Fram was granted an option to purchase 50% of the lands acquired by Kerbel and releasing Kerbel from any claims by Fram. The Agreement further provides that, “It is the intention of the parties that the purchase and sale of Romandale’s Remaining Interest in the Lands pursuant to these Minutes of Settlement will take place after Secondary Plan Approval for the Lands has been obtained.”

[32] In exchange, Fram agreed to discontinue its claim as against the Kerbel companies. One of the conditions of the Settlement Agreement is that Fram would not challenge the validity of the 2001251 Agreement or seek any relief against any of the Kerbel companies.

[33] Fram agreed not to seek a declaration that the 2001251 Agreement with Romandale was void.

[34] Romandale was not a party to the Settlement Agreement.

Spence J.’s Order

[35] Fram moved for leave to file an Amended Statement of Claim to take into account the fact that Fram had settled its claims against the Kerbel companies. Romandale opposed the motion.

[36] On November 29, 2011, Spence J. held that Fram had the right to discontinue its claims against Kerbel as,

The test is whether the order sought will prejudice the defendants which would remain: Romandale. It wants to keep Kerbel defendants but it can do that by way of moving to do so by way of a cross-claim or a third party claim or a counterclaim whichever would be applicable in the circumstances.

For greater certainty, the order granted below, provides that the order is without prejudice to the rights of Romandale in that regard and also without prejudice to its rights to seek further documentary production in discoveries in order to respond to the amendments.

Amended Claim Filed by Fram

[37] In 2012, Fram issued Notices of Discontinuance to the Kerbel parties and issued an Amended Claim against Romandale only. In that claim, Fram sought damages against Romandale and court approval of the Settlement Agreement (whereby it would acquire land once owned by Romandale and sold to 2001251). Fram did not seek specific performance in view of the Settlement Agreement.

Master Graham’s Order

[38] In October 2012, Romandale brought a motion to file an Amended Statement of Defence and join the Kerbel companies as defendants to Fram’s claim.

[39] Romandale pleaded that the Settlement Agreement between Fram and the Kerbel companies breached the Co-Owners Agreement as it significantly delayed the payment Romandale would have received for the land had Fram provided immediate and unconditional consent to the transaction under the Co-Owners Agreement. In addition, Romandale pleaded that there was no bona fide exercise of the buy-sell provision under the Co-Owners Agreement.

[40] On December 21, 2012, Master Graham denied Romandale’s motion to amend on the grounds that the amendments were not tenable at law:

I accept that the settlement between the plaintiff [Fram] and the Kerbel defendants does not amount to a breach of the August 29, 2005 Agreement [the 2001251 Agreement], because whatever the Kerbel defendants do with the lands once Romandale’s interest in them is conveyed pursuant to that agreement is none of Romandale’s concern. The plaintiff is free to abandon its claim for specific performance under its co-owners agreements with Romandale, mitigate its damages to the extent of the 50% interest to be conveyed to it by the Kerbel Defendants and claim damages from Romandale in respect of the remaining 50%. (Emphasis added.)

Accordingly, as the plaintiff’s settlement with the Kerbel defendants does not constitute a breach of any agreement or agreements between any of the parties, it does not give rise to any cause of action or defence in favour of Romandale. Romandale’s proposed amendments are therefore not tenable at law.

[41] Romandale appealed.

Kiteley J’s Decision

[42] Kiteley J. dismissed the appeal of Master Graham’s Order on March 31, 2014. She noted that the Settlement Agreement was before the Master who properly assumed the facts as pleaded and applied the appropriate test which is, whether the proposed amendments were tenable at law. She noted that,

[8] In an endorsement that dismissed the motion, the Master found that the settlement between the plaintiff and the Kerbel defendants did not amount to a breach of [the 2001251 Agreement] and therefore the proposed amendments and proposed cross-claim and counterclaim were not tenable in law.

[13]… a complete copy of the settlement agreement was in the material before the Master. Leaving aside the 6 paragraphs of preamble, there are 6 operative paragraphs in the settlement agreement. It is clear that the essential element of the agreement was that (one of) the Kerbel defendants granted an option to the plaintiff [Fram] to purchase a 50% interest under certain conditions. The Master did not find as a fact that that was the case. Rather, he assumed the facts as pleaded, which included the settlement agreement.

[14] As he indicated, the Master was required to scrutinize the proposed amendments and to refuse them if they are not tenable in law and he must not conduct a detailed examination of the merits. A review of the settlement agreement demonstrated that it was plain and obvious that the proposed pleading would not survive rule 21. Furthermore, the Master correctly held that the plaintiff was not estopped from pursuing a claim for damages even though it had earlier pursued specific performance.

[15] The Master focused on the settlement agreement because it was the foundation of the motion. However, that did not mean that he erred by failing to consider the other causes of action proposed. His conclusion with respect to the settlement agreement meant that it was unnecessary to deal with the other proposed causes of action. The Master could readily conclude that the proposed amendments were not tenable, nor was the proposed cross-claim and counterclaim since both depended on the asserted interpretation of the settlement agreement. (Emphasis added.)

[43] Kiteley J.’s decision was not appealed.

Romandale’s Action against 2001251

[44] On August 29, 2014, after the motion before Kiteley J. was heard but before she rendered her decision, Romandale issued a claim against 2001251. Romandale claimed that 2001251 breached its fiduciary duty to Romandale because 2001251 had conflicting interests in neighbouring tracts of land and the 2001251 Agreement was therefore terminated.

Romandale’s Motion to Amend its Pleading before Dunphy J.

[45] In 2015, after retaining new counsel, Romandale brought a motion for leave to:

i. file a Further Amended Statement of Defence,

ii. add the Kerbel companies as party defendants to Fram’s action, for the purpose of determining whether the Settlement Agreement with the Kerbel companies should be approved and whether the 2001251 Agreement is enforceable,

iii. consolidate this action with Romandale’s 2014 Claim against 2001251, and

iv. set aside the injunction restraining Romandale from disposing of the lands.

[46] Romandale claims:

i. the two underlying agreements contain conditions precedent to the rights and obligations of the parties to the Settlement Agreement that were not fulfilled;

ii. in any event, the agreements were repudiated by Romandale,

iii. Fram and the Kerbel companies should be prohibited from benefitting from their wrongdoing, and

iv. the court would not be able to determine Fram and Romandale’s respective right to the land and approve orders regarding the disposition of the land without regard to all agreements that purport to dispose of portions of the land on certain terms and conditions and to have all parties to those agreements before the court.

[47] In November 2015, Dunphy J. granted Romandale’s request to file the proposed new Amended Defence and to add 2001251 (but not the other Kerbel companies) as a co-defendant for the sole purpose of determining whether the Settlement Agreement between Fram and the Kerbel companies should be approved, and whether to enforce the terms of the 2001251 Agreement. He held that,

[115] In my view, if the court is asked by [Fram] in the 2007 action to approve a Settlement Agreement to which 2001251 is a party and thereby to require completion of the 2001251 Agreement by Romandale, it will be plainly necessary to assess any and all objections Romandale has to the completion of the [2001251] Agreement including any claim that the Settlement Agreement itself breached fiduciary duties owed to it by 2001251. It is equally plain that doing so in circumstances where 2001251 would not be bound by the outcome would simply open the door to a multiplicity of proceedings on the same issues and conflicting findings of fact and law by different courts.

[48] Dunphy J. held that Romandale’s amendments and joinder of Kerbel does not constitute a “claim” within the meaning of the Limitations Act, 2002; rather, this is a defence to Fram’s Claim that the Court should approve the Settlement Agreement.

[49] In addition, he dissolved the injunction that prevented Romandale from disposing of the lands.

ANALYSIS OF THE ISSUES AND CONCLUSION

Whether the Decision of Dunphy J. is a Collateral Attack on Prior Orders

[50] The essence of the dispute between Fram and Romandale is the ownership interest in 275 acres of land. Three different agreements were signed regarding disposition of the land and the terms in the Settlement Agreement depend on the fulfillment of certain conditions in those Agreements.

[51] In its Amended Statement of Claim, Fram seeks (among other things) “directions approving Minutes of Settlement” by which Fram seeks to take ownership of the lands conditionally sold by Romandale to 2001251.

[52] In the proposed Amended Defence, Romandale denies that Fram has any interest in the land.

[53] Romandale seeks to join 2001251 and the other Kerbel companies as Defendants so that the Kerbel companies are bound by the court’s decision regarding the disposition of the land or damages in lieu.

[54] The Orders of Spence J., Master Graham and Kiteley J. were decided in respect of Romandale’s earlier proposed Amended Defence which provides that:

i. the Settlement Agreement is a breach of the Co-Owners agreement;

ii. in the alternative, if the settlement is an immediate and unconditional consent, the Kerbel defendants must pay $160,000 per acre to Romandale under the terms of the 2001251 agreement; and

iii. as a result of the settlement:

• neither Romandale nor Fram will be required to, or be able to exercise the buy-sell provision in the Co-Owners Agreements and therefore the buy-sell provisions can be and should be initiated immediately;

• Fram interfered with Romandale’s contractual relations by entering into the Settlement Agreement;

• by encouraging Fram to enter into the settlement, the Kerbel defendants interfered with Romandale’s contractual relations;

• pursuant to the Co-Owners Agreements, Fram made an election in which it sought specific performance not damages and is therefore estopped from pursuing a claim for damages. By entering into the settlement, Fram has demonstrated that the election was a sham although Fram had relied on the election to obtain the injunction;

• the terms of the Settlement Agreement are unenforceable.

[55] The focus of the earlier proposed amendments is on the legal effect of the terms in the Co-Owners Agreement on the Settlement Agreement.

[56] Master Graham concluded that “whatever the Kerbel defendants do with the lands once Romandale’s interest in them is conveyed pursuant to that [2001251] agreement is none of Romandale’s concern.” (Emphasis added.)

[57] Master Graham did not address the issue of whether Romandale conveyed its interest to 2001251 (a Kerbel company) pursuant to the 2001251 Agreement. Unless 2001251 acquired the right to Romandale’s interest in the land, it cannot transfer that land to Fram as it purported to do, by entering into the Settlement Agreement.

[58] As such Dunphy J’s order is not a collateral attack on the decision of Master Graham.

Whether there is good reason to doubt Dunphy J.’s Order and the issue involves a matter of public importance

[59] Fram claims it acquired land directly from Romandale pursuant to the Co-Owners Agreement and indirectly from 2001251 pursuant to the 2001251 Agreement. Romandale claims both the Co-Owners Agreements and the 2001251 Agreement are terminated and therefore Fram has no right to any of the land.

[60] Fram’s right to the land is the central issue in dispute between Fram and Romandale.

[61] In order to decide the central issue in dispute: what rights, if any, Fram has to the land and/or damages in lieu, the court must consider the effect of the underlying agreements by which Fram claims to have acquired rights to the land as set out in the Settlement Agreement.

[62] Rule 5.03 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 provides that, “Every person whose presence is necessary to enable the court to adjudicate effectively and completely on the issues in a proceeding shall be joined as a party to the proceeding.”

[63] Partial settlements have potentially serious consequences on non-settling defendants and courts should therefore give non-settling parties an opportunity to respond. (Rains v. Molea, 2012 ONSC 4906, [2012] O.J. No. 4073.)

[64] In this case, 2001251 does not wish to be added as a party. 2001251 claims Romandale should not be permitted to amend its Defence to plead for the first time that the earlier agreements are repudiated and the Buy-Sell provisions in the Co-Owners Agreement could have been exercised before the 2001251 Agreement was executed.

[65] Fram does not wish to add 2001251 as a Defendant and takes the position that “directions for approval of the Minutes of Settlement seek no more than declaratory relief, are not binding on Romandale and do not require the Court to make any finding of fact that would affect Romandale’s rights respecting the underlying agreements”.

[66] The fact that Fram is seeking court approval of the Settlement Agreement was central to Dunphy J.’s decision to join 2001251 “for a limited purpose”.

[67] Dunphy J. held that,

[76] This pleading by the plaintiff has opened Pandora’s Box and necessarily made relevant the present and future enforceability of both [the Co-Owners and 2001251] agreements. If, as Romandale now pleads, the [2001251] Agreement has now been repudiated, the alleged default arising from having entered into it would not be continuing. Romandale would potentially be in a position immediately to trigger the buy-sell provisions of s. 5.07 (given termination of the Management Agreements) and purchase all of the plaintiff’s current interest in the Land; it may be in a position to exercise s. 6.02(d) in its own right and purchase the plaintiff’s interest at a discount to current value if the breaches of the COA [Co-Owners Agreement] it alleges were proved or it might seek to exercise its rights under 6.10 to sell a portion of its interest to a third party. If the August Agreement is repudiated, 2001251 has no right to acquire Romandale’s remaining interest and the option granted to the plaintiff by the Settlement Agreement has no object.

[68] Dunphy J. only consented to add 2001251 (and not the other Kerbel companies) as Defendants to Fram’s claim because only 2001251 is a party to the Agreement with Romandale.

[69] It would be impossible for the court to determine Fram’s rights and obligations as set out in the Settlement Agreement, without considering whether 2001251 had the right to acquire land from Romandale in the first place. Court approval will permit Fram to enforce its rights, if any, to the land and will thereby affect the rights of 2001251.

[70] Adding 2001251 as a party solely for the purpose of determining Fram’s right to the land if any, and its ability to enforce those rights if any, will avoid a multiplicity of proceedings as 2001251 will be bound by the decision of the court regarding ownership rights to the property in question after hearing from all parties to all of the underlying agreements. Unless 2001251 is bound by the decision of this court, Fram could obtain damages from Romandale, 2001251 would not be bound by the decision of the court, and thereafter Romandale could face the prospect of another claim from 2001251.

[71] Finally, it should be noted that Rule 26.01 of the Rules of Civil Procedure provides that, “On motion at any stage of an action the court shall grant leave to amend a pleading on such terms as are just, unless prejudice would result that could not be compensated for by costs or an adjournment.”

[72] Dunphy J. exercised his discretion to allow Romandale to amend its pleading.

[73] For these reasons, there is no good reason to doubt Dunphy J.’s decision to add 2001251 as a party solely for the purpose of determining Fram’s rights to the land. Leave to appeal on this ground is therefore denied.

The Injunction

[74] On the issue of lifting the injunction, the courts have held that in order to dissolve an injunction that prevents Romandale from disposing of the land, the factual circumstances must have changed such that the injunction “no longer bears a relationship to reality”. (R.W. Blacktop Ltd. v. Artec Equipment Co., 1991 CarswellNat 182 (F.C.).)

[75] Master Graham held that,

The plaintiff is free to abandon its claim for specific performance under its co-owners agreements with Romandale, mitigate its damages to the extent of the 50% interest to be conveyed to it by the Kerbel Defendants and claim damages from Romandale in respect of the remaining 50%.

[76] Dunphy J. noted that Fram is no longer seeking to rely on the specific performance provisions of the Co-Owners Agreement between Fram and Romandale (that permit a party to force a defaulting party to sell its entire interest at 95% of fair market value). As a result, Fram’s claim against Romandale is in damages rather than specific performance. Dunphy J. therefore lifted the injunction that prevents Romandale from disposing of its property.

[77] While Fram no longer seeks to acquire land from Romandale and instead only seeks damages, this is in part because it asserts that it is entitled to specific performance by acquiring 50% of the land sold by Romandale to 2001251.

[78] Fram has an ongoing proprietary interest in this 50% of the land it says was acquired by 2001251 by virtue of the Settlement Agreement. If 2001251 is held to have purchased Romandale’s interest in the land and Fram is successful in obtaining court approval of the Settlement Agreement such that half of 2001251’s interest in the land is transferred to Fram, Fram’s victory would be hollow if in the meantime, Romandale is allowed to sell some or all of its interest in the land.

[79] Fram will suffer irreparable harm if Romandale can sell some or all of the land before determination by the court as to what portion of the land if any, belongs to Fram.

[80] For the very reasons set out by Dunphy J. (that all parties to the three agreements regarding the disposition of the land should be before the court in order for the court to determine the respective interests of the parties to the land), there is good reason to doubt the correctness of the decision to lift the order for injunctive relief and the expanded terms under which injunctions may be lifted are matters of general importance. As such, leave to appeal should be granted on this ground.

[81] For the reasons set out above, the motion for leave to appeal is granted.

[82] All parties filed written submissions on costs. I have considered the factors set out in Boucher v. Public Accountants Council (2004), 2004 14579 (ON CA), 71 O.R. (3d) 291 (C.A.), especially the governing principles of reasonableness and proportionality, the reasonable expectations of the parties, the voluminous material, the complexity of the matter, and the fact that these issues are of great importance to the parties. I have also considered that the partial indemnity rate of each of the three parties is slightly more or less than $20,000.

[83] However, given the divided success on this motion for leave to appeal, costs of this motion are reserved to the panel hearing the appeal.

Thorburn J.

Date: May 17, 2016