CITATION: Weston on the Humber v. Kelly, 2016 ONSC 376
DIVISIONAL COURT FILE NO.: 11/16
TNL-75451-15 DATE: 20160114
ONTARIO SUPERIOR COURT OF JUSTICE DIVISIONAL COURT
BETWEEN:
WESTON ON THE HUMBER Landlord (Respondent in Appeal)
– and –
DONOVAN KELLY Tenant (Appellant in Appeal)
Ryan Wozniak, for the Landlord (Respondent in Appeal)
Mathew Tubie, for the Appellant
HEARD at Toronto: January 14, 2016
J. WILSON J. (ORALLY)
The Motion
[1] On an urgent basis the Respondent, Weston On The Humber, brings this motion to quash the appeal, or alternatively seeks a stay of the decision of the Landlord and Tenant Board Order dated December 31, 2015 (the “Board Decision”).
[2] The Board Decision confirmed that the Appellant was a tenant, terminated the tenancy and made an order for vacant possession of the premises.
[3] The Appellant disputes the finding in the Board Decision that he is a tenant governed by the Residential Tenancies Act, 2006, S.O. 2006, c. 17, and hence challenges the jurisdiction of the Board. The Appellant argues that, since 2007, he has been a purchaser with interim occupancy pursuant to an Agreement of Purchase and Sale signed between the parties in 2007.
[4] The Respondent brings this motion on an urgent basis, as there is a closing for the premises with a third party. The material filed on this urgent motion was deficient. There was no credible evidence before me that the Agreement of Purchase and Sale entered into by the Respondent and a third party was in fact proceeding to a closing scheduled for January 14, 2016. The Agreement of Purchase and Sale was conditional upon financing and there was no evidence that the condition had been waived and that the parties were ready to close. I brought this deficiency to the attention of counsel for the Respondent, and he seeks to rectify the deficient record by filing an affidavit confirming that conditions have been waived, and that the closing is in fact scheduled for today. Counsel arranged for a further affidavit to be filed during the argument.
[5] Since 2007, the Appellant has on three occasions signed or attempted to sign an agreement of Purchase and Sale with the Respondent for the purchase of the premises. There have been issues with respect to the Appellant’s ability to raise the necessary financing. Meanwhile, the condo in question is the Appellant’s home, and he has paid $1000 per month for close to eight years.
[6] The receipts prepared each month by the Appellant characterizes the monthly payments as “Interim Occupancy Payments”.
[7] The Respondent characterizes the relationship as a tenancy and characterizes any payments made, notwithstanding the receipts, as rent.
[8] The Board confirmed the Respondent’s position.
The Appeal
[9] An appeal lies to the Divisional Court from an order of the Landlord and Tenant Board only on a question of law: see s. 210(1) of the Residential Tenancies Act.
[10] The Appellant challenges the jurisdiction of the Board arguing that he was not a tenant, but was rather a purchaser in possession of the premises by way of interim occupancy.
[11] At issue in this appeal is the legal effect of the document signed by the parties on September 22, 2008, which stipulates that the Appellant and the Respondent were to “sign an interim agreement”. The document further states: “We the builder are willing at this time, subject to the terms above to enter into an Interim Lease Agreement on a month-to-month basis” to allow the Appellant to arrange for financing.
[12] No further Interim Lease Agreement was entered into between the parties.
[13] The Appellant argues the September 22, 2008 Agreement is not an interim lease agreement, but rather is an agreement to enter into such a document: an agreement to agree. Until a formal interim lease agreement is entered into, the Appellant argues that he maintains his status as a purchaser with interim occupancy.
[14] The Respondent argues that the September 22 Agreement constitutes an interim lease agreement.
[15] The Board’s Decision did not specifically address the legal effect of the September 22, 2008 Agreement in its reasons, but concluded—somewhat summarily—that the Appellant was a tenant not a purchaser in interim possession.
Conclusion on the Motion to Quash
[16] I decline to find that the appeal is devoid of all merit justifying quashing of the appeal. Obviously the Appellant has an uphill battle, but he does have an arguable question in law that he was not a tenant at the time the Board Decision was made, and that the Board Decision was without jurisdiction.
Alternative Relief for a Stay
[17] In the alternative, the Respondent seeks that the automatic stay associated with the appeal launched by the Appellant be lifted.
[18] To assess the question of lifting the stay, I adopt the test for lifting a stay outlined in Cambridge Place Apartments Ltd. v. Mugeni, 2013 ONSC 5844. Sachs J. confirmed at para. 9:
The stay of eviction orders is automatic upon delivery of a Notice of Appeal from an eviction decision of the Landlord and Tenant Board. Pursuant to s.134(2) of the Courts of Justice Act, R.S.O. 1990, c. C.43, the court has the power to make “any interim order that is considered just to prevent prejudice to a party pending the appeal.” Lifting a stay pending appeal is “restricted to cases of demonstrable and unusual hardship to the respondent and where a reasonable measure of protection can be afforded to the appellant.” (Ryan v. Laidlaw Transportation Ltd. 1994 616 (ON CA), [1994] O.J. No. 1883 (C.A.), paras. 12 and 13).
[19] I turn then to look at the facts of this case.
[20] In 2007, and twice during 2015, the parties attempted to finalize an Agreement of Purchase and Sale for the premises. The Respondent understandably increased the price from the original Agreement of Purchase and Sale dated 2007, but increased the price well beyond the price negotiated with the third party.
[21] The attempts in 2015 were in April and again in August. When the August 2015 attempt to resolve matters failed, the Respondent then signed the Agreement of Purchase and Sale for the sale of the premises with a third party. An Agreement of Purchase and Sale dated in September 2015 is before this Court and is scheduled to close today. The Respondent then brought before the Board a termination of the tenancy and vacant possession.
[22] In his affidavit, the Appellant asserts that he had the necessary financing arranged to complete the purchase in 2015, but argues certain documentation was required to be produced by the Respondent to the lender that was not forthcoming, thus blocking his mortgage application. This may or may not have been the case. Perhaps he did not have his financing.
[23] Lifting a stay pending appeal is restricted to cases of demonstrable and unusual hardship to the Respondent and where a reasonable measure of protection can be afforded to the Appellant.
[24] On one hand, the Respondent has entered into a third party sale to an innocent purchaser who awaits a closing. On the other hand, this is the Appellant’s home. Although the Appellant seems to have delayed the purchase for years, he has paid the $1000 per month without fail, and has made two unsuccessful attempts to finalize matters with the Respondent in 2015.
Conclusions on the Stay
[25] In the circumstances of this case, I find that the Appellant should be given one final opportunity to complete the purchase of the premises, before the stay is lifted.
[26] I have made it clear to counsel for the Appellant that his only viable option to solve the impasse is to come up with the required financing to close the transaction once and for all on the same terms and conditions of the Agreement of Purchase and Sale that is before the Court that is acceptable to the Respondent.
[27] If the Appellant is in interim occupancy, as a potential purchaser, and is not a tenant, as he argues, this temporary relationship cannot go on indefinitely. He must purchase or move out.
[28] Balancing the interests of the parties in applying this test for lifting a stay, I decline to order immediate stay to provide to the Appellant one final opportunity to come up with the required financing. However the timelines must be short.
[29] If the Appellant is unable to come up with credible proof of financing equivalent to the Agreement of Purchase and Sale before the court in the amount of $207,000.00, then the stay will be lifted effective Wednesday, January 20, 2016 at 5:00 pm.
[30] The matter will be spoken to before Swinton J. on Wednesday, January 20, 2016 on the Divisional Court motions list.
[31] I have spoken to Her Honour. I made it clear to the parties that Her Honour is not deciding the matter or hearing any new arguments. She will simply confirm whether the Appellant has in fact come up with the requisite financing in the amount of $207,000 to purchase the premises with no conditions, in which case the stay will not be lifted.
[32] If the Appellant fails to provide confirmation to the motion judge next week that he has arranged the required financing with no conditions, then the stay is lifted effective 5:00 p.m. on Wednesday, January 20, 2016.
[33] If the stay is lifted, the Board order may be enforced immediately requiring the Appellant to vacate the premises.
Costs
[34] I have heard oral submissions from counsel as to costs. Success has been divided. Each side seeks partial indemnity costs in amounts larger than I think are appropriate.
[35] Costs will be fixed in the amount of $1,500, payable dependent upon what happens next Wednesday.
[36] If the Appellant comes up with unconditional financing to match the outstanding offer made by a third party, then the Respondent will pay $1,500 to the Appellant and the stay will not be lifted.
[37] If the Appellant is not able to come up with the requisite financing, then the Appellant will pay to the Respondent costs in the amount of $1,500, and the stay will be lifted.
___________________________ J. WILSON J.
Date of Reasons for Judgment: January 14, 2016
Date of Release: January 15, 2016
CITATION: Weston on the Humber v. Kelly, 2016 ONSC 376
DIVISIONAL COURT FILE NO.: 11/16
TNL-75451-15 DATE: 20160114
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
J. WILSON J.
BETWEEN:
WESTON ON THE HUMBER Landlord (Respondent in Appeal)
– and –
DONOVAN KELLY Tenant (Appellant in Appeal)
ORAL REASONS FOR JUDGMENT
J. WILSON J.
Date of Reasons for Judgment: January 14, 2016
Date of Release: January 15, 2016