Harvey et al. v. Talon International Inc. Yim et al. v. Talon International Inc.

[Indexed as: Harvey v. Talon International Inc.]

Ontario Reports

Court of Appeal for Ontario

Blair, G.J. Epstein and Huscroft JJ.A.

March 31, 2017

137 O.R. (3d) 184 | 2017 ONCA 267

Case Summary

Limitations — Real property — Application for return of deposit paid toward purchase of condominium unit falling within definition of action for recovery of land under Real Property Limitations Act — Applicable limitation period being ten years — Real Property Limitations Act, R.S.O. 1990, c. L.15.

Real property — Condominiums — Rescission — Notice of rescission — Technical approach to interpretation of requirements for rescission of agreement of purchase and sale under s. 74(7) of Condominium Act inappropriate as Act is consumer protection legislation — Applicants complying with requirements of s. 74(7) when they advised respondent in writing of their intention to "terminate" transaction based on material changes to revised disclosure statement provided by respondent and requested return of their deposits — Condominium Act, 1998, S.O. 1998, c. 19, s. 74(7).

Facts

Several years after entering into their respective agreements of purchase and sale ("APS") for condominium units, the applicants each provided the respondent with a written notice of their intention to "terminate" the transaction based on material changes to the revised disclosure statement that the respondent had provided to them. Both requested the return of their deposits. The next day, Y had her lawyer send a follow-up e-mail to the respondent indicating that she was exercising her right to rescind the APS. The respondent did nothing in response to those communications. Both applicants brought applications for an order that the respondent return their deposits. As a preliminary matter, Y moved to amend her notice of application to add a request that the court declare that the APS had been rescinded. The respondent defended on the basis that the applicants' purported notices of rescission did not meet the requirements in s. 74(7) of the Condominium Act, 1998. In Y's case, the respondent also argued that she was seeking the amendment more than two years after the date on which her claim for statutory rescission was discovered, so that the amendment was statute-barred under s. 4 of the Limitations Act, 2002. The application judge found that the ten-year limitation period in the Real Property Limitations Act, 1998 ("RPLA") applied. She permitted the amendment. Taking into account the fact that the Condominium Act is consumer protection legislation, she held that the notices sufficiently complied with the requirements of s. 74(7) of the Act. The applications were allowed. The respondent appealed.

Decision

Held, the appeal should be dismissed.

An application for the return of a deposit under the Condominium Act is an action to recover land under s. 4 of the RPLA. The definition of "land" in s. 1 of the RPLA includes "money to be laid out in the purchase of land". A deposit under the Condominium Act is "money laid out in the purchase of land". The application judge did not err in finding that the ten-year limitation period in the RPLA applied, and that Y's application was not statute-barred.

The application judge correctly took into account the fact that the Condominium Act is consumer protection legislation when considering the issue of the requirements for a notice of rescission under s. 74 of the Act. Consumer protection legislation must be interpreted generously in favour of the consumer. It is not necessary that a notice under s. 74 use the word "rescind" or "rescission". As long as the purchaser's intention to undo the transaction based on a material change is clear, that is sufficient. The application judge did not make any palpable and overriding errors in concluding that both applicants complied with the notice requirements of s. 74(7). While both applicants used the word "terminate" rather than "rescind", both requested the return of their deposits, which is a remedy consistent with rescission and not with repudiation. As well, both notices referred to the materially different terms contained in the revised disclosure statement. The respondent had ten days to apply for a determination as to whether the alleged material changes were in fact material. Having failed to do so, it was now too late for the respondent to argue that the changes were not material.

Authorities Considered

Cases considered:

779975 Ontario Ltd. v. Mmmuffins Canada Corp., [2009] O.J. No. 2357, 62 B.L.R. (4th) 137, 2009 CarswellOnt 3262 (S.C.J.); Abdool v. Somerset Place Developments of Georgetown Ltd. (1992), 10 O.R. (3d) 120, [1992] O.J. No. 2115, 96 D.L.R. (4th) 449, 58 O.A.C. 176, 27 R.P.R. (2d) 157, 35 A.C.W.S. (3d) 1139 (C.A.), considered.

Other cases referred to:

2240802 Ontario Inc. v. Springdale Pizza Depot Ltd., [2015] O.J. No. 1736, 2015 ONCA 236, 331 O.A.C. 282, 252 A.C.W.S. (3d) 456; Canadian National Railway Co. v. Canada (Attorney General), [2014] 2 S.C.R. 135, [2014] S.C.J. No. 40, 2014 SCC 40, 371 D.L.R. (4th) 219, 67 Admin. L.R. (5th) 220, 458 N.R. 150; Canson Enterprises Ltd. v. Boughton & Co., [1991] 3 S.C.R. 534, [1991] S.C.J. No. 91, 85 D.L.R. (4th) 129, 131 N.R. 321; Casa Blanca Homes Ltd. v. Canada, [2013] T.C.J. No. 306, 2013 TCC 338; Celgene Corp. v. Canada (Attorney General), [2011] 1 S.C.R. 3, [2011] S.C.J. No. 1, 2011 SCC 1, 410 N.R. 127, 14 Admin L.R. (5th) 1, 327 D.L.R. (4th) 513, 89 C.P.R. (4th) 1; Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 2002 SCC 33, 211 D.L.R. (4th) 577, 286 N.R. 1; Lexington on the Green Inc. v. Toronto Standard Condominium Corp. No. 1930 (2010), 102 O.R. (3d) 737, [2010] O.J. No. 4853, 2010 ONCA 751, 327 D.L.R. (4th) 498, 270 O.A.C. 130, 97 R.P.R. (4th) 171; Lozcal Holdings Ltd. v. Brassos Developments Ltd., 1980 ABCA 72, [1980] A.J. No. 857, 111 D.L.R. (3d) 598, 12 Alta. L.R. (2d) 227, 22 A.R. 131, 15 R.P.R. 8; McConnell v. Huxtable (2014), 118 O.R. (3d) 561, [2014] O.J. No. 477, 2014 ONCA 86, 41 R.P.R. (5th) 1, 42 R.F.L. (7th) 157, 370 D.L.R. (4th) 554, 315 O.A.C. 3; Metropolitan Toronto Condominium Corp. No. 1067 v. L. Chung Development Co., [2012] O.J. No. 5684, 2012 ONCA 845; Rizzo & Rizzo Shoes Ltd. (Re) (1998), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, 154 D.L.R. (4th) 193, 221 N.R. 241, 106 O.A.C. 1; Seidel v. Telus Communications Inc., [2011] 1 S.C.R. 531, [2011] S.C.J. No. 15, 2011 SCC 15, 301 B.C.A.C. 1, 412 N.R. 195, 329 D.L.R. (4th) 577; Toronto Standard Condominium Corp. No. 1487 v. Market Lofts Inc., [2015] O.J. No. 815, 2015 ONSC 1067, 53 R.P.R. (5th) 67; Toronto Standard Condominium Corp. No. 2095 v. West Harbour City (I) Residences Corp., [2014] O.J. No. 4947, 46 R.P.R. (5th) 1, 2014 ONCA 724, 328 O.A.C. 255; Ward-Price v. Mariners Haven Inc. (2001), 57 O.R. (3d) 410, [2001] O.J. No. 1711, 199 D.L.R. (4th) 68, 42 R.P.R. (3d) 39; Weller v. Reliance Home Comfort Limited Partnership (2012), 110 O.R. (3d) 743, [2012] O.J. No. 2415, 2012 ONCA 360, 291 O.A.C. 388, 350 D.L.R. (4th) 301; Wilson v. Semon, [2012] O.J. No. 3969, 2012 ONCA 558.

Statutes Referred To

Arthur Wishart Act (Franchise Disclosure) 2000, S.O. 2000, c. 3, ss. 6(3), (6)

Business Practices and Consumer Protection Act, S.B.C. 2004, c. 2

Condominium Act, R.S.O. 1990, c. C.26 [rep.], s. 52

Condominium Act, S.O. 1967, c. 12 [rep.]

Condominium Act, S.O. 1974, c. 133 [rep.], s. 14

Condominium Act 1978, S.O. 1978, c. 84 [rep.]

Condominium Act, 1998, S.O. 1998, c. 19, s. 74 [as am.], (6) [as am.], (7), (8) [as am.], (9), (10)

Limitations Act, 2002, S.O. 2002, c. 24, Sch. B, s. 4, Sch. [as am.]

Patent Act, R.S.C. 1985, c. P-4

Real Property Limitations Act, R.S.O. 1990, c. L.15, ss. 1, 4

Rules of Civil Procedure, R.R.O. 1990, Reg. 194, Rule 1

Judgment

APPEAL from the judgments of C.A. Gilmore J., [2016] O.J. No. 305, 2016 ONSC 371 (S.C.J.) and [2016] O.J. No. 292, 2016 ONSC 370 (S.C.J.) allowing applications for the return of deposits.

Counsel:

Symon Zucker and Nancy Tourgis, for appellant.

Michael W. Carlson, for respondents.

The judgment of the court was delivered by

G.J. EPSTEIN J.A.

[1] Introduction

This appeal involves the interpretation of provisions in two statutes -- the Condominium Act, 1998, S.O. 1998, c. 19 (the "Act") and the Real Property Limitations Act, R.S.O. 1990, c. L.15 (the "RPLA"). This interpretive exercise arises out of two separate applications that were heard together. The applications concern the obligation of the appellant, Talon International Inc., to return deposits that the respondents -- Young Sook Yim and Paul Chung-Kyu Kim (collectively, "Ms. Yim") in one application and Adrian B. Harvey and Harvey Legacy Holdings Ltd. (collectively, "Mr. Harvey") in the other -- paid toward the purchase of condominium units in Talon's development known as Trump Tower.

[2] Background

Several years after entering into their respective agreements of purchase and sale (an "APS") with Talon, Ms. Yim and Mr. Harvey each provided written notices to Talon, advising of their intention to "terminate" the transaction. Both stated their basis for doing so as being, in part, what they viewed as material changes to the revised disclosure statement Talon had provided to them. Both requested the return of their deposits. The respondents take the position that their communications constituted valid notices to rescind their respective APS under s. 74(6) and (7) of the Act. Because Talon had not challenged, within the time the Act allows, either Ms. Yim's or Mr. Harvey's right to rescind, the respondents applied to the court for an order that Talon return their deposits. Talon defended on the basis that the respondents' purported notices to rescind did not meet the requirements of the Act.

[3] Application Judge's Decision

The application judge allowed both applications. She held that the notices sufficiently complied with the requirements of s. 74(7) of the Act. Each notice therefore triggered Talon's obligation to challenge the alleged material change set out within ten days of receipt, or to accept the claim for rescission. Because Talon did not challenge the respondents' claims for rescission, the application judge ordered Talon to refund Ms. Yim's and Mr. Harvey's deposits, with interest.

[4] Limitation Period Issue

In Ms. Yim's case, Talon also argued that she was seeking to amend her notice of application to claim statutory rescission more than two years after the date on which such a claim was discovered. Her amendment was therefore statute-barred, pursuant to s. 4 of the Limitations Act, 2002, S.O. 2002, c. 24, Sch. B. The application judge disagreed. She held that the ten-year limitation period in s. 4 of the RPLA governed claims for the refund of deposits advanced toward the purchase of condominium units. Ms. Yim's claim was, therefore, not out of time.

[5] Grounds of Appeal

In this appeal, Talon submits that the application judge erred in over-emphasizing the fact that the Act is consumer-protection legislation, and consequently provided an overbroad interpretation of s. 74(7) of the Act. And, in the case of Ms. Yim, Talon argues that the application judge erred in holding that her claim for the return of her deposit fell within the provisions of the RPLA. It further submits that Ms. Yim's application as a whole is statute-barred, as it was brought more than two years after discovery of the claim.

[6] Court's Position

I would dismiss both appeals. I agree with the application judge that it would be contrary to the purpose of the Act, as consumer protection legislation, to adopt a technical approach in interpreting what a purchaser must do to notify the declarant of an intention to rescind under s. 74(7). The section requires that "notice of rescission" be in writing, and that it be delivered to the declarant or his or her solicitor. By implication, the notice also must make it clear that the purchaser seeks to set aside the APS based on an identified material change. In my view, there is no reason to interfere with the application judge's conclusion that the notices delivered by Ms. Yim and Mr. Harvey satisfied these requirements.

[7] Limitation Period Conclusion

I also agree with the application judge that Ms. Yim's claim to recover her deposit fits within the definition of an action for the recovery of land under the RPLA. The applicable limitation period is therefore ten years, and Ms. Yim's application is not statute-barred.

Statutory Provisions

[8] Section 74 of the Condominium Act, 1998

The main issue in these appeals involves the interpretation of the provisions in the Act that give a purchaser the right to rescind his or her APS. These provisions are found in s. 74 of the Act, which provides that within ten days of receipt of a revised disclosure statement containing a material change or notice of change that is material, a purchaser has the right to rescind the APS. If the declarant takes the position that no material change has occurred, the declarant may bring an application to the Superior Court under s. 74(8) for a declaration on the question of materiality. Section 74(9) and (10) require that the declarant refund the purchaser's money with interest within ten days of receipt of the notice of rescission if no application has been made to the court on the issue of materiality, or if an application is made, within ten days of a determination that the change is material. The requirements of the notice of rescission are set out in s. 74(7), which provides:

74(7) To rescind an agreement of purchase and sale under this section, a purchaser or the purchaser's solicitor shall give a written notice of rescission to the declarant or to the declarant's solicitor.

Background to the Respondents' Notices

Ms. Yim v. Talon

[9] Initial Agreement

On May 4, 2007, Ms. Yim signed an APS to purchase from Talon suite 1702 at Trump Tower for $860,000. Pursuant to the terms of the APS, Ms. Yim provided deposits totalling $172,000 to Talon. She received the required disclosure from Talon.

[10] HUMA Disclosure

On February 18, 2012, a representative for Talon sent a letter to Ms. Yim and to her solicitor advising that the hotel unit maintenance agreement ("HUMA") was now available online.

[11] Notice of Termination

On February 23, 2012, after reviewing the HUMA, Ms. Yim had her solicitor send a letter to Talon's solicitor. This letter provided as follows:

Further to the letter dated February 9, 2012 received from your client, Talon International Inc., regarding the extension of the proposed occupancy date from February 14, 2012, for above-noted suite, my clients hereby give notice to terminate the [APS] dated May 4, 2007 and all amendments made thereto, effective immediately, and to request the return of the deposits forthwith to our firm made payable to Lee & Ma LLP in trust.

The basis of this notice is premised on paragraph 13 of the underlying [APS], which provides that the Vendor's right to extend the closing date shall not "exceed twenty-four (24) months" in the aggregate. Given that the original occupancy closing date was scheduled to be March 20, 2009 (paragraph 2(a) in the [APS]), the Vendor's right to extend the closing date has expired on March 20, 2011, and is therefore no longer applicable.

In the alternative, the [HUMA], the full copy of which was provided at the last-minute, contains terms that are materially different from that indicated in the Disclosure, not to mention the substantive differences in the projected expenses.

Given that the condominium prices have surged in the past 4-5 years, I trust that your client is not in any way prejudiced by this notice. Your prompt response and return of deposits is respectfully requested and expected. Thank you.

[12] Follow-up Email

On February 24, 2012, Ms. Yim had her counsel send a follow-up e-mail to Talon's representative, indicating that she was exercising her right to rescind the APS. This e-mail specifically referenced s. 74 of the Act, as well as the change in the HUMA.

[13] Application

Talon took no steps in response to these communications. Ms. Yim issued her notice of application in this proceeding on December 10, 2014. By the time the application was heard, on December 14, 2015, Ms. Yim no longer relied upon the expiration of the vendor's right to extend the closing date, as mentioned in her February 23, 2012 letter. She now relied solely on the alternative position advanced in the letter, with respect to the HUMA's containing materially different terms from the disclosure.

Mr. Harvey v. Talon

[14] Initial Agreement

By way of an APS dated March 7, 2005, Mr. Harvey agreed to purchase a hotel condominium unit from Talon in Trump Tower for $727,000. Mr. Harvey provided deposits to Talon totalling $145,400. He received the required disclosure from Talon.

[15] HUMA Disclosure

On February 17, 2012, Talon's solicitor sent a letter to Mr. Harvey's solicitor. This letter made reference to the HUMA now being available on the Internet.

[16] Notice of Termination

On February 24, 2012, Mr. Harvey's solicitor faxed a note to Talon's solicitors, indicating that he had been instructed not to proceed with the interim closing. The solicitor noted that he was no longer acting for Mr. Harvey in any capacity. That evening, Mr. Harvey sent a letter to Talon's representative via e-mail. The letter stated as follows:

Further to the letter dated February 9, 2012 received from your client, Talon International regarding proposed delivery of possession of the Hotel Unit on February 24, 2012 for the above mentioned Suite, I hereby give notice to terminate the [APS] dated March 4, 2005 and all amendments effective immediately, and to request the return of deposits forthwith to the firm of Groll & Groll LLP payable in trust.

The request is being made on the basis of [Mr.] Harvey never receiving a fully executed, accepted and initialled [APS].

In the alternative, the [HUMA], the full copy of which was provided at the last minute contains terms that are materially different from that indicated in the Disclosure and substantially different in the projected expenses.

Given the per square foot selling price achieved in today's market for this development is far in excess of this Unit, I trust Talon International is not in any way prejudiced by this notice.

Your prompt response and return of deposits is respectfully requested and expected.

[17] Application

Talon took no steps in response. On February 13, 2014, Mr. Harvey issued a notice of application in this proceeding. By the time of the hearing of the application on December 14, 2015, Mr. Harvey no longer relied upon not having received a fully executed, accepted and initialled APS, as mentioned in his February 24, 2012 letter. Instead, he relied solely on the alternative position advanced in the letter, with respect to the HUMA's containing material different terms from those indicated in the disclosure.

The Application Judge's Reasons

Ms. Yim v. Talon

[18] Motion to Amend

As a preliminary matter, Ms. Yim moved to amend her notice of application to add a request that the court declare that the APS had been rescinded.

[19] Original Application

Ms. Yim's notice of application, issued on December 10, 2014 made no mention of a claim based on rescission under the Act. Instead, she sought a declaration that Talon was in breach of the APS, a declaration that the APS was terminated and of no force and effect, and an order that Talon return the deposit. In the alternative, she sought an order granting relief from forfeiture of the deposit, and return of the deposit. Before the application judge, Ms. Yim brought a motion to amend her notice of application to add a claim for statutory rescission. Among the arguments raised by Talon in opposing the amendment was that the claim for rescission was statute-barred.

[20] Application Judge's Ruling on Amendment

The application judge allowed the amendment. She held that Ms. Yim's claim for rescission fell within s. 4 of the RPLA, which provides for a limitation period of ten years. The claim for the return of a deposit pursuant to the Act fell within the RPLA as "an action to recover land". In the alternative, the application judge held that the proposed amendment to claim statutory rescission was not a new cause of action, but an alternative remedy based on the exact same facts set out by Ms. Yim in the original notice of application. Additionally, Ms. Yim's e-mail sent on February 24, 2012 had specifically mentioned rescission under the Act. In these circumstances, allowing the amendment would cause Talon no prejudice.

[21] Notice Requirements

The application judge then turned to whether the fact that Ms. Yim's failure to use the word "rescission" in her February 23 letter was fatal to her claim for the return of her deposit.

[22] Consumer Protection Interpretation

The application judge started her analysis by noting that the Act was consumer protection legislation, and therefore should be interpreted liberally. The application judge reasoned that "keeping in mind the legislature's goal of protecting purchasers of condominiums, the court should not read in a requirement that all notices of rescission given under s. 74 of the Act include the precise term 'rescission'".

[23] Statutory Requirements

The application judge went on to hold that all s. 74(7) requires is that the notice of rescission be in writing, delivered to the declarant or its solicitor, and that it contain a ground of material change upon which rescission is based. Accordingly, the application judge concluded that "[a]s long as the notice fulfills the statutory requirements and makes clear the purchaser's intention to undo or unmake the agreement, such as by requesting the return of their deposit, the notice should be considered sufficient". There is no requirement that notice be worded perfectly, or that it include the word "rescission".

[24] Evidence of Intention to Rescind

The application judge then addressed whether Ms. Yim's February 23, 2012 letter complied with this interpretation of s. 74 of the Act. She held that given Ms. Yim's use of the word "terminate" in the letter, there must be "strong evidence" indicating that Ms. Yim's intention in sending the letter was to rescind her APS. The application judge found three indications of the required "strong evidence" of Ms. Yim's intention to rescind. First, the letter referenced a material change, namely, the HUMA being "materially different" and containing "substantial differences" from projected expenses. Second, the application judge highlighted Ms. Yim's request for the return of her deposit, a request that would restore the parties to their original positions. Such a remedy was consistent with rescission, and not with repudiation of the contract.

[25] Follow-up Communication

Third, the application judge also looked at the e-mail sent by Ms. Yim to Talon on February 24, 2012, the day after the initial letter. This e-mail had specifically referenced s. 74 of the Act. The application judge concluded that Ms. Yim's communications of February 23 and 24, read together, provided sufficient notice under the Act. Finally, in accordance with the requirements of s. 74(7), the letter had been in writing, and sent to the proper person. Given that Talon had not challenged Ms. Yim's right to rescind within ten days of receipt of her notice of rescission, Talon was required to return her deposit, with interest.

Mr. Harvey v. Talon

[26] Deficiency in Relief Sought

The first issue the application judge addressed was whether the application was deficient with respect to relief sought. In his notice of application dated February 13, 2014, Mr. Harvey sought a declaration that Talon was in breach of the APS, a declaration that the APS was terminated and of no force and effect, and an order that Talon return the deposit. In the alternative, he sought an order granting relief from forfeiture of the deposit under the APS and the return of his deposit. Talon argued that the application was fatally flawed because it did not claim the relief of rescission, and therefore the court could not conclude that Mr. Harvey's letter of February 24, 2012 had been a notice of rescission.

[27] Implicit Pleading of Rescission

The application judge held that it would defeat the purpose of Rule 1 of the Rules of Civil Procedure if Mr. Harvey were precluded from pursuing relief on the basis that the notice of application was not framed exactly in accordance with the legislation or the rules. For nearly a year, Talon had been in possession of Mr. Harvey's affidavit, in which he had explicitly taken the position that his February 24, 2012 letter rescinded the APS. Further, Mr. Harvey had sought return of the deposit in his notice of application -- relief consistent with the remedy of rescission and not termination. The application judge reasoned that in such circumstances rescission was implicitly pleaded.

[28] Notice of Rescission Analysis

The application judge then addressed whether Mr. Harvey's February 24, 2012 letter could be a proper notice of rescission, despite not using the word "rescind" or "rescission". Relying on the same reasoning as in Ms. Yim's case, the application judge concluded that "[a]s long as the notice fulfills the statutory requirements and makes clear the purchaser's intention to undo or unmake the agreement, such as by requesting the return of their deposit, the notice should be considered sufficient".

[29] Sufficiency of Notice

Next, the application judge held that Mr. Harvey's February 24, 2012 letter sufficiently conveyed his intention to rescind his APS. As Mr. Harvey had used the word "terminate" in his letter, the application judge looked for and found "strong evidence" of an intention to rescind. First, the letter made specific reference to the fact that the terms of the HUMA were materially different from the disclosure and substantially different from the projected expenses. Second, the request for a return of the deposit made it clear that Mr. Harvey sought to restore both parties to their original positions, and that he sought rescission rather than repudiation. Finally, the letter was in writing and was addressed to the proper person. It therefore complied with the requirements under s. 74 of the Act.

[30] Failure to Challenge

Because Talon had not challenged Mr. Harvey's right to rescind within ten days as required under s. 74(8) of the Act, Mr. Harvey was entitled to the return of his deposit, with interest.

Issues

[31] Issues on Appeal

The issues on these appeals can be characterized as follows:

1. What is the standard of review?
2. What is the applicable limitation period?
3. Did Ms. Yim's and Mr. Harvey's communication to Talon constitute notices to rescind for the purposes of s. 74 of the Act?

Analysis

Issue 1 -- Standard of Review

[32] Statutory Interpretation

What s. 74(7) of the Act means by the words "notice of rescission" is a question of law, and accordingly is reviewed on the correctness standard. Answering this question requires the interpretation of the Act, and it is well established that questions of statutory interpretation are questions of law (Canadian National Railway Co. v. Canada (Attorney General), [2014] 2 S.C.R. 135, [2014] S.C.J. No. 40, 2014 SCC 40, at para. 33). As stated in Housen v. Nikolaisen, [2002] 2 S.C.R. 235, [2002] S.C.J. No. 31, 2002 SCC 33, at paras. 8-9, when there is a question of law, an appellate court is free to replace the opinion of the application judge with its own.

[33] Mixed Fact and Law

The question of whether the actual notices provided by the respondents met the requirements of the Act is one of mixed fact and law, and reviewed on the palpable and overriding error standard. In her reasons, the application judge termed this question as one of fact. However, the application judge was applying the legal standard under s. 74(7) of the Act to the facts in front of her, and thus was dealing with a question of mixed fact and law (Housen, at para. 26).

[34] Deference to Application Judge

In answering this question, the application judge considered all the evidence the law required her to consider. In my view, she did not apply an incorrect standard or make an error in principle. Accordingly, her determination that the notices provided in this case were sufficient is entitled to deference, and should not be overturned absent palpable and overriding error (Housen, at paras. 26-37).

[35] Statute-Barred Issue

Whether Yim's application was statute-barred is also a question of law, and thus reviewed by this court on the correctness standard. Leaving aside her alternative analysis, the application judge essentially held that the application as a whole was not brought out of time, as the ten-year limitation period in s. 4 of the RPLA applied, and not the two-year period from the Limitations Act, 2002.

[36] Factual Component

Here, there is no factual component to the dispute about whether the application is statute-barred. As analyzed below, I have concluded that the notice provided to Talon by Ms. Yim on February 23, 2012 was a notice of rescission under s. 74(7). Accordingly, the limitation period began to run ten days later, when Talon failed to return the deposit or make an application to Superior Court. Ms. Yim's application was launched more than two years later. The sole issue is thus whether an application for the return of a deposit is covered by the RPLA, in which case the application was not brought out of time, or by the Limitations Act, 2002, in which case the application was brought out of time. Answering this question requires the interpretation of s. 4 of the RPLA in order to determine whether an application for return of deposit pursuant to s. 74 of the Act fits within the definition of an action for the return of land.

[37] No Deference

Accordingly, the limitation period issue is a question of law, without a factual component. If Ms. Yim's application for the return of her deposit fits within the ten-year limitation period in s. 4 of the RPLA, the same would be true of other applications for statutory rescission pursuant to the Act. Thus, the application judge's determination on this issue is not entitled to deference.

Issue 2: What is the Applicable Limitation Period?

The Parties' Submissions

[38] Talon's Position

Talon submits that Ms. Yim's notice of application was issued nearly three years after her cause of action arose. Regardless of whether her communication to Talon was one of termination or one of rescission, Ms. Yim's application was brought out of time. Talon submits that the Act is not one of the statutes listed in the Schedule to the Limitations Act, 2002 as retaining specific statutory limitation periods. Therefore, s. 4 of the Limitations Act, 2002 applies and Ms. Yim's claim is statute-barred for being brought more than two years after the discovery of the claim.

[39] Ms. Yim's Position

Ms. Yim argues that the application judge correctly held that her claim for rescission was one that fell within the provisions of the RPLA. The action was to recover her deposit -- a claim for "money to be laid out in the purchase of land", which is part of the definition of "land" within the RPLA. The claim therefore fell within the RPLA. Given the ten-year limitation period set out in s. 4 of the RPLA, the action was not statute-barred.

Applicable Legal Principles

[40] Statutory Interpretation

This is a matter of statutory interpretation. Statutory interpretation is governed by the approach described in Elmer Driedger, Construction of Statutes, 2nd ed. (Toronto: Butterworths, 1983), at p. 87; and adopted by the Supreme Court of Canada in Rizzo & Rizzo Shoes Ltd. (Re) (1998), 36 O.R. (3d) 418, [1998] 1 S.C.R. 27, [1998] S.C.J. No. 2, at para. 21:

Today there is only one principle or approach, namely, the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament.

Principles Applied

[41] Section 4 of the RPLA

Section 4 of the RPLA provides as follows:

4. No person shall make an entry or distress, or bring an action to recover any land or rent, but within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to some person through whom the person making or bringing it claims, or if the right did not accrue to any person through whom that person claims, then within ten years next after the time at which the right to make such entry or distress, or to bring such action, first accrued to the person making or bringing it.

[42] Simplified Version

When those aspects of s. 4 of the RPLA that do not apply to this case are removed, it provides that

No person shall bring an action to recover any land, but within ten years after the time at which the right to bring any such action first accrued to the person bringing it.

[43] Three Requirements

Thus, there are three requirements in s. 4: an "action", to "recover", and what must be recovered is "land".

[44] Definition of Action

An action is defined in s. 1 of the RPLA to include "any civil proceeding".

[45] Definition of Recover

"Recover" is defined in legal dictionaries as "gaining through a judgment or order". This was the definition adopted for the use of "recover" in s. 4 in McConnell v. Huxtable (2014), 118 O.R. (3d) 561, [2014] O.J. No. 477, 2014 ONCA 86, at paras. 16-20, specifically, at para. 17, where this court noted that the English Court of Appeal has held that the expression "to recover any land" in comparable legislation "is not limited to obtaining possession of the land, nor does it mean to regain something that the plaintiff had and lost. Rather, 'recover' means to 'obtain any land by judgment of the Court'".

[46] Application to This Case

I agree with the application judge's approach on this point. This is clearly an action to recover.

[47] Definition of Land

The remaining question is whether what Ms. Yim seeks to recover -- her deposit -- is "land". The definition of land in s. 1 of the RPLA is as follows:

"land" includes messuages and all other hereditaments, whether corporeal or incorporeal, chattels and other personal property transmissible to heirs, money to be laid out in the purchase of land, and any share of the same hereditaments and properties or any of them, any estate of inheritance, or estate for any life or lives, or other estate transmissible to heirs, any possibility, right or title of entry or action, and any other interest capable of being inherited, whether the same estates, possibilities, rights, titles and interest or any of them, are in possession, reversion, remainder or contingency[.]

[48] Deposit as Money Laid Out in Purchase of Land

In my view, the application judge was also correct in concluding that an application for the return of the deposit was an action for the recovery of "land"; specifically, the recovery of "money to be laid out in the purchase of land".

[49] McConnell Precedent

In coming to this conclusion, the application judge relied primarily upon McConnell. In that case, a former common-law spouse sought a constructive trust giving her joint ownership of the home she had once shared with her former spouse, with an alternative claim for damages based on unjust enrichment. Rosenberg J.A., at para. 38, explained his conclusion that the RPLA applied: "the respondent is making a claim for recovery of land in the sense that she seeks to obtain land by judgment of the court. That the court might provide her with the alternative remedy of a monetary award does not take away from the fact that her claim is for a share of the property."

[50] Application Judge's Reasoning

Here, the application judge reasoned as follows:

Ms. Yim paid her deposit to secure an interest in land. She seeks to recover the money which represents that interest. I find that such an interest is more easily identified than a constructive trust interest (as in McConnell, supra), where the court must intervene and declare such an interest to exist based on certain legally accepted principles. The fact that the remedy is a monetary award should not preclude the court from finding that it is a recovery of land, as in McConnell, supra.

[51] Damages vs. Recovery of Land

In support of this conclusion, I note that several cases have clarified the relationship between claims for damages and claims covered by the RPLA. The Supreme Court in Canson Enterprises Ltd. v. Boughton & Co., [1991] 3 S.C.R. 534, [1991] S.C.J. No. 91, defined damages as "a monetary payment awarded for the invasion of a right at common law". In Toronto Standard Condominium Corp. No. 1487 v. Market Lofts Inc., [2015] O.J. No. 815, 2015 ONSC 1067 (S.C.J.), the plaintiff sought damages based off the defendant's failure to meet its obligations under a shared services agreement. Perell J., beginning at para. 49, noted that the fact that real property is incidentally involved in an action does not necessarily mean that the action is governed by the RPLA. Among the cases he cited was Metropolitan Toronto Condominium Corp. No. 1067 v. L. Chung Development Co., [2012] O.J. No. 5684, 2012 ONCA 845. In that case, this Court made the following comment, at para. 7:

Finally, we do not think that the [RPLA] applies to the case as framed by the appellant. In its Statement of Claim, the appellant frames its action as one for damages flowing from the respondents' negligence, breach of contract, conflict of interest, and breach of duty of care, fiduciary duty and statutory duty. None of these relates to the categories of actions encompassed by the [RPLA].

[52] Damages Claims Distinguished

Thus, had Ms. Yim's claim been one primarily seeking damages, for example, breach of contract, her application would be statute-barred. This would be true even if the claim for damages incidentally related to real property, specifically the condominium that was the subject of her APS. Claims for damages do not fit within the definition of "land" in the RPLA.

[53] Deposit Distinguished from Damages

However, Ms. Yim is not seeking damages. She advances a specific claim under a provision in the Act, a provision that only allows for the return of her deposit and interest, not damages. The Tax Court defined a deposit in Casa Blanca Homes Ltd. v. Canada, [2013] T.C.J. No. 306, 2013 TCC 338 as "a pool of money retained until such time as it is applied in partial payment or forfeited". As noted by the Alberta Court of Appeal in Lozcal Holdings Ltd. v. Brassos Developments Ltd., 1980 ABCA 72, [1980] A.J. No. 857, 111 D.L.R. (3d) 598 (C.A.), "[a] genuine deposit ordinarily has nothing to do with damages, except that credit must be given for the amount of the deposit in calculating damages".

[54] Plain Meaning

This leads me to the consideration of "money to be laid out in the purchase of land", a phrase on which there is scant jurisprudence. However, in my view an action for the return of a deposit fits comfortably within its plain meaning. Frankly, I struggle to understand what would fit within this phrase if not an action such as this.

[55] Conclusion on Limitation Period

On the basis of the foregoing analysis, I conclude that Ms. Yim's application is not statute-barred. This is also true of the amendment of her initial application to specifically claim statutory rescission. As her application is covered by s. 4 of the RPLA, the applicable limitation period is ten years. The application is an action, which is defined as any civil action. She seeks "recovery", which has been defined as "gaining through a judgment or order". And the recovery she seeks is of "land", namely, her deposit, which is money laid out in the purchase of land.

[56] Disposition

I would therefore not give effect to this ground of appeal.

Issue 3: Did Ms. Yim's and Mr. Harvey's Communications to Talon Constitute Notices to Rescind for the Purposes of s. 74 of the Act?

The Parties' Submissions

[57] Talon's Position

Talon submits that the application judge ignored the clear wording of the communications sent by Ms. Yim and Mr. Harvey, which both reference "termination" of the APS. In finding that the Act does not prescribe a statutory form of a notice of rescission, the application judge failed to recognize that the Act specifically refers only and repeatedly to a "notice of rescission". There is an important legal distinction between termination and rescission. A party cannot assert inconsistent rights and having terminated the APS, the respondents cannot claim rescission of an agreement they have already terminated. Talon submits that the respondents themselves were in breach of the APS by terminating.

[58] Respondents' Position

Ms. Yim and Mr. Harvey argue that the application judge correctly interpreted the requirements for rescission under the Act. An examination of the object of the Act and the intention of the legislature supports a liberal interpretation of the phrase "notice of rescission". As long as the notice is in writing, sent to the right person, sets out a ground of material change upon which rescission is based, and makes clear the intention of a purchaser to unmake a transaction, it should be sufficient. A purchaser should not be required to explicitly use the term "rescission", if the notice nonetheless makes it sufficiently clear that this is what is sought.

A. What is Required for Notice of Rescission Under s. 74 of the Act?

[59] Issue

The next issue to be addressed is what is meant by the term "written notice of rescission" in s. 74(7) of the Act.

Applicable Legal Principles

[60] Statutory Interpretation

As in the case of the issue over the appropriate limitation period, this issue is one of statutory interpretation. The principles set out above apply with equal force to this issue.

Principles Applied

[61] Consumer Protection Lens

The application judge correctly considered this issue through the lens that the Act is consumer protection legislation.

[62] Consumer Protection Legislation

The fact that the Act is consumer protection legislation is well established. In Ward-Price v. Mariners Haven Inc. (2001), 57 O.R. (3d) 410, [2001] O.J. No. 1711 (C.A.), at para. 25, Borins J.A. stated that "it is well recognized that the Act is consumer protection legislation". More recently, in Lexington on the Green Inc. v. Toronto Standard Condominium Corp. No. 1930 (2010), 102 O.R. (3d) 737, [2010] O.J. No. 4853, 2010 ONCA 751, at para. 49, O'Connor A.C.J.O. stated that "[a] significant purpose of the Act is consumer protection". Rouleau J.A. cited this case in Toronto Standard Condominium Corp. No. 2095 v. West Harbour City (I) Residences Corp., [2014] O.J. No. 4947, 2014 ONCA 724 when he acknowledged at para. 44 that "consumer protection is a significant purpose of the Condominium Act".

[63] Consumer Protection Principles

The goal of consumer protection laws is to place consumers, who are average citizens engaging in business deals, on par with companies or citizens who regularly engage in business. This court and the Supreme Court have identified guidelines for how consumer protection legislation is to be interpreted. The application judge referred to Seidel v. Telus Communications Inc., [2011] 1 S.C.R. 531, [2011] S.C.J. No. 15, 2011 SCC 15 for the proposition that consumer protection legislation must be interpreted generously in favour of the consumer. This proposition comes directly from Binnie J., who was considering the British Columbia Business Practices and Consumer Protection Act, S.B.C. 2004, c. 2 (the "BCPCA"). At para. 37, he noted that the statutory purpose of the BCPCA was all about consumer protection. As such, its terms should be interpreted generously in favour of consumers. Another relevant Supreme Court case is Celgene Corp. v. Canada (Attorney General), [2011] 1 S.C.R. 3, [2011] S.C.J. No. 1, 2011 SCC 1. In that case, the court was considering the Federal Court's interpretation of a price-regulating provision in the Patent Act, R.S.C. 1985, c. P-4. Abella J. adopted the majority view of Evans J.A., who had held that because the provision could be interpreted in different ways, the one that best implemented the consumer protection objectives of such price-regulating provisions was the correct interpretation.

[64] Ontario Authority

There is similar authority emanating from Ontario courts. In Weller v. Reliance Home Comfort Limited Partnership (2012), 110 O.R. (3d) 743, [2012] O.J. No. 2415, 2012 ONCA 360, at para. 15, Rosenberg J.A. noted that "[t]he main objective of consumer protection legislation . . . is to protect consumers". In Wilson v. Semon, 2011 CarswellOnt 15953 (S.C.J.), affd Wilson v. Semon, [2012] O.J. No. 3969, 2012 ONCA 558, Lederer J. noted that "consumer protection legislation, as its name implies, is designed to protect consumers".

[65] Legislative History

The legislative history of s. 74 of the Act provides further support for the identification of the statutory scheme dealing with rescission as consumer protection legislation. In Abdool v. Somerset Place Developments of Georgetown Ltd. (1992), 10 O.R. (3d) 120, [1992] O.J. No. 2115 (C.A.), Robins J.A. discussed s. 52 of the Condominium Act, R.S.O. 1990, c. C.26, which was roughly equivalent to s. 74 under the current Act. This provision allowed a purchaser to rescind an APS within ten days of receiving a material amendment to a disclosure statement, by giving "written notice of rescission" to the declarant or his or her solicitor.

[66] Evolution of Consumer Protection

Robins J.A. noted that when the Condominium Act was initially enacted in 1967 (S.O. 1967, c. 12), it imposed no disclosure requirements on developers, and provided little protection to purchasers. The predecessor to s. 52 (and thus the ultimate predecessor of the current s. 74) was first enacted as part of the 1974 amendments to the Condominium Act (S.O. 1974, c. 133, s. 14). This provision introduced the concept of full disclosure into the Act. However, consumers apparently continued to experience problems. This led to further amendments in 1978 (S.O. 1978, c. 84), introducing s. 52, which was later carried over into the 1990 Act. In introducing the 1978 Act in the legislature on June 1, 1978, Larry Grossman, the Minister of Consumer and Commercial Relations, described it as a "form of consumer protection legislation". He stated that the Act would provide purchaser protection to consumers by requiring "tighter standards of disclosure between sellers and purchasers; allowing time for purchasers to become informed of their responsibilities; and clarifying purchasers' rights during the interim occupancy period".

[67] Broad and Flexible Approach

Later in Abdool, in discussing what was required in the disclosure from the declarant, Robins J.A. made the following comments: "the vagueness of the requirements and the absence of statutory guidelines mandate a broad and flexible approach -- not a rigid or stringent one -- in determining whether a given disclosure statement is adequate". In my view, there is no reason why this reasoning about disclosure required from the vendor should not also be applied to the purchaser, in determining whether a given notice of rescission is adequate.

[68] Arthur Wishart Act Analogy

Further support for the application judge's approach to interpreting what is required for notice of rescission under s. 74 of the Act can be found in how a right to rescind has been interpreted in another statute that has been identified as consumer protection legislation -- the Arthur Wishart Act (Franchise Disclosure) 2000, S.O. 2000, c. 3 (the "AWA").

[69] AWA as Consumer Protection

To start, it is clear that the AWA is consumer protection legislation. In 2240802 Ontario Inc. v. Springdale Pizza Depot Ltd., [2015] O.J. No. 1736, 2015 ONCA 236, at paras. 49-50, I adopted the comments of the motion judge that "The [AWA] itself is in many ways consumer protection legislation. . . It is remedial legislation, which the Court may broadly apply."

[70] AWA Rescission Provision

Section 6 of the AWA provides franchisees with the right to rescission via a statutory provision not dissimilar to that found in the Act. The franchisee can exercise its right to rescind by providing the franchisor with a "notice of rescission" within specified timeframes, where the franchisor provides late disclosure, or no disclosure. Following reception of such a notice, the franchisor has certain obligations towards the franchisee, which must be fulfilled within 60 days.

[71] Similarity to Condominium Act

Pursuant to s. 6(3) of the AWA, the only requirements for the franchisee's notice of rescission is the following: "Notice of rescission shall be in writing and shall be delivered to the franchisor, personally, by registered mail, by fax or by any other prescribed method, at the franchisor's address for service or to any other person designated for that purpose in the franchise agreement." This provision is substantially similar to the rescission provision found in s. 74(7) of the Act.

[72] Mmmuffins Case

The issue of what constitutes a "notice of rescission" under s. 6(3) of the AWA was considered in detail in 779975 Ontario Ltd. v. Mmmuffins Canada Corp., [2009] O.J. No. 2357, 2009 CarswellOnt 3262 (S.C.J.) by Strathy J. (as he then was). In that case, the franchisee started an action for common law rescission, based on alleged pre-contractual misrepresentations made by the franchisor. The statement of claim made no mention of the AWA or of the statutory rescission remedy. More than two years later, the franchisee commenced a second action, asking for a declaration that service of the statement of claim in the earlier action had been a "notice of rescission" under the AWA, thus interrupting the limitation period. At para. 45, Strathy J reasoned as follows:

While s. 6 of the AWA does not specify the contents of the notice of rescission, it seems to me that the notice must at least be sufficient to bring home to the franchisor that the franchisee is exercising its statutory rights of rescission under the AWA, and to inform the franchisor that the clock has begun to run on the 60-day period in s. 6(6). In light of the very substantial obligations on franchisors to compensate franchisees for breach of the disclosure duty, the franchisor is entitled to know whether a violation of the AWA is being alleged and whether the franchisee is claiming remedies under that statute. The franchisor is not able to fulfill its statutory obligations unless the notice is at least adequate to inform it that the franchisee has rescinded the agreement. The notice does not have to be in specific language, but it must at least make it clear that the franchisee is exercising its statutory right to rescind the franchise agreement and demanding the compensation to which it is entitled.

[73] Mmmuffins Conclusion

Ultimately, at paras. 49-50, Strathy J. concluded that the statement of claim in the first action was not sufficient to constitute "notice of rescission" to the franchisor within the meaning of the AWA. The statement of claim made no reference to the AWA, nor to the franchisor's failure to provide a disclosure document or statement of material change in time or at all, and there was nothing to indicate to the franchisor that the franchisee was claiming the relief set out in s. 6(6). The statement of claim did not purport to be an exercise of a statutory right by the franchisee -- on the contrary, it was simply an action for rescission and damages that had nothing to do with the AWA.

[74] Application to Condominium Act

The Mmmuffins case provides support for the application judge's conclusion that a notice of rescission under the Act does not need to include the word "rescind" or "rescission", or reference the relevant section of the Act. As Strathy J. made clear at para. 45, the notice "does not have to be in specific language". What is required is that the notice indicates that the purchaser is exercising his or her statutory authority to "rescind" or "unmake" the APS based on a material change. Where the notice achieves this, the declarant can decide whether to apply to the Superior Court for a determination of the materiality of the change set out.

[75] Generous Interpretation

I agree with the application judge's interpretation that a notice of rescission pursuant to s. 74(7) of the Act does not require the use of the words "rescind" or "rescission". As previously indicated, the Act is well established to be consumer protection legislation. It therefore must be interpreted generously in a manner that protects consumers. Consumers will not always be represented by counsel. Consumers will not always be familiar with words such as rescission and rescind. For consumers to be on a level playing field with developers in accessing the respective rights afforded them under the Act, they must be given considerable leeway in their use of language. As long as the purchaser's intention to undo the transaction based on a material change is clear, that is sufficient. That is all the declarant needs to understand in order to take advantage of the statutory rights then available to it.

B. Did the Respondents' Correspondence Constitute Notice of Rescission?

[76] Analysis

Given I agree with the application judge's view of the requirements of s. 74(7) of the Act, the final question to be asked is whether there is any reason to interfere with her conclusion that Ms. Yim's and Mr. Harvey's correspondence met these requirements. For the reasons that follow, I see no reason to interfere with the application judge's determination that the notices provided were sufficient to qualify as "notices of rescission".

[77] Use of "Terminate"

It is true that both notices utilized the word "terminate". However, both also included repeated requests that the deposit be returned. As the application judge noted, return of deposit is a remedy consistent with rescission, and not with repudiation. As well, both notices referred to the materially different terms contained in the HUMA as a basis for undoing the transaction. The HUMA had just been disclosed to Ms. Yim and Mr. Harvey a few days before their respective notices. They were well within the window to claim rescission based on a material change.

[78] Ms. Yim's Notice

Turning first to Ms. Yim, although it is true that she was represented by counsel, I do not see how this factor is relevant to a determination of whether the notice was sufficiently clear that Ms. Yim wanted to undo the transaction based on a material change. Regardless, Ms. Yim's counsel wrote a follow-up e-mail to Talon the day after the initial notice, making it clear that rescission pursuant to s. 74(7) of the Act was being sought. In my view, considering these factors as a whole, it was reasonable for the application judge to conclude that the notice provided in the case of Ms. Yim was sufficient to meet the requirements of the Act.

[79] Materiality Not at Issue

I also agree with the application judge that the issue here is not whether the change to the HUMA actually was a material change. That issue does not come into play. Talon received valid notices of rescission under the Act, based on an alleged material change in the HUMA. Talon had ten days to make an application to Superior Court for a determination as to whether the alleged material change was in fact material. Having failed to do so, it is now too late for Talon to argue that the change was not material.

[80] Ms. Yim's Notice Valid

I would therefore not give effect to this argument in the appeal involving Ms. Yim. Her notice was a valid notice of rescission under the Act.

[81] Mr. Harvey's Notice

The case of Mr. Harvey warrants a similar analysis and the same conclusion.

[82] Mr. Harvey's Notice Valid

Mr. Harvey's letter of February 24 did not contain the word rescind, and did not reference s. 74 of the Act. Nor did he provide a follow-up communication the next day, unlike Ms. Yim. However, his letter did contain information sufficient to bring home to the declarant that s. 74 was being engaged. As noted by the application judge, Mr. Harvey both asked for the return of his deposit, and relied on the material differences in the HUMA. Given this, I see no error in the application judge's conclusion that Mr. Harvey's letter met the requirements under s. 74 of the Act. It was a valid notice of rescission.

Conclusion

[83] Summary

I have concluded that the application judge committed no errors of law in interpreting the Act, nor palpable and overriding errors in applying the law to the facts of this case. Accordingly, her conclusion that the notices provided were sufficient should not be disturbed on appeal. Given that both applications were commenced within the time required, Ms. Yim and Mr. Harvey are both entitled to an order requiring Talon to refund their deposits with interest, in accordance with s. 74(9) of the Act.

Disposition

[84] Order

For these reasons, I would dismiss both appeals. I would order Talon to pay the cost of each respondent -- $15,000 in the Yim appeal and $10,000 in the Harvey appeal. These amounts include disbursements and applicable taxes.

Appeal dismissed.

Notes

1 Ms. Yim's husband, Mr. Kim, was added as an applicant subsequent to Ms. Yim's commencing her application. For ease of reference, the respondents are referred to jointly as Ms. Yim.

2 From the record, it appears that Talon did not take the position, which it now advocates on appeal, that the application as a whole had been brought out of time in the first place.