COURT FILE NO.: CV-672008-0000 DATE: 2023/02/22 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

AQEEL ZAIDI also known as AQEEL ABBAS ZAIDI Applicant

• and –

ESTATE OF ASIM RAZA SYED and RABAB FATIMA NAQVI, TRUSTEE Respondents

Counsel: Karanpaul Randhawa for the Applicant Ranbir S. Mann for the Respondents

HEARD: February 9, 2023

PERELL, J.

REASONS FOR DECISION

A. Introduction

[1] The Applicant, Aqueel Zaidi (Mr. Zaidi), sues the Estate of Asim Raza Syed (Mr. Syed) and its trustee, Rabab Fatima Naqvi (Ms. Naqvi), who is the late Mr. Syed’s widow, to enforce a Settlement Agreement dated April 7, 2021. Brought by application, this is a sad family-dispute about $109,283 of an Estate’s property that the deceased’s widow, who is the Estate Trustee, wants to keep. However, the deceased’s nephew says the money belongs to him pursuant to a Settlement Agreement with the widow, who is his aunt by marriage to his deceased uncle.

[2] The paradox in the immediate case is that the $109,283, which has been paid into court, is tied up by the litigation, and while both sides want and need the money, the return from the litigation does not justify the time, money, or effort required. The paradoxical sad truth is that very much of the $109,283 will disappear or already has disappeared in the expense of pursuing access to justice. At the commencement of the hearing, I told the parties that they each had considerable litigation risk. While I would hear the matter, I implored them first to try to settle and avoid a hearing and a court ruling. There was a recess for settlement negotiations, but after the recess, I was advised that the parties wished the application to proceed.

[3] During the argument of the application, I queried whether Mr. Zaidi’s proceeding was an appropriate one to be proceed by application, and I asked whether I should instead direct a trial. As it happens, the test for a summary judgment applies to a motion to enforce a settlement, [77 Charles Street Ltd. v. Aspen Ridge Homes Ltd., 2021 ONSC 2732; Hashemi-Sabet Estate v. Oak Ridges Pharmasave Inc., 2018 ONCA 839] and Mr. Zaidi’s position was that the application was the equivalent to a motion to enforce a settlement pursuant to Rule 49 or the court’s common law jurisdiction and that I should and could decide the application in his favour. Mr. Zaidi’s counsel indicated that no more evidence would be called if the matter was tried. Each party had presented the case that would be presented if the matter proceeded to trial.

[4] In response to my question about directing a trial, Ms. Naqvi’s initial position, as set out in her factum, was that Mr. Zaidi’s case was inappropriate for an application. However, in her responding material, she asked to court to set aside the Settlement Agreement and by the end of his argument, Ms. Naqvi’s counsel stated that what both parties needed was a prompt resolution of the dispute about the $109,283. Ms. Naqvi’s counsel agreed that no more evidence would be called at a trial or for a summary judgment motion and that the application could be resolved as if Mr. Zaidi had brought a motion for a summary action after the action had been converted to a trial of an issue.

[5] On an application, where there are material facts in dispute that require a trial, as a matter of discretion, the judge may order that the application proceed to trial. [Rule 38.10(1)(b). Collins v. Canada (Attorney General) (2005), 2005 ONSC 28533, 76 O.R. (3d) 228 (S.C.J.); Keewatin v. Ontario (Ministry of Natural Resources) (2003), 2003 ONSCDC 43991, 66 O.R. (3d) 370 at para. 46 (Div. Ct.); Moyle v. Palmerston Police Services Board (1995), 1995 ONSC 10659, 25 O.R. (3d) 127 at 131 (Div. Ct.). Burlington (City) v. Clairton (Village) (1979), 1979 ONCA 2059, 24 O.R. (2d) 586 at 589 (C.A.)] In determining whether to convert an application into a trial of an issue, the court should consider whether if the proceeding had already been commenced as an action and the moving party had brought a motion for a summary judgment would the court be satisfied that there is no genuine issue requiring a trial in which case a trial would not be necessary. [A.M. Machining Inc. v. Silverstone Marble & Granite Inc., 2010 ONSC 71] An order for the trial of an issue does not preclude either party from later moving for a summary judgment, [PIXIU Solutions Inc. v. Canadian General-Tower Ltd., 2015 ONSC 1669] which is, in effect, what is occurring in the immediate case. Thus, in the circumstances of the immediate case, I have decided to proceed as if the application was a motion for a summary judgment.

[6] Therefore, for the reasons that follow, I award the money paid into court ($109,283 plus any interest) to Ms. Naqvi.

[7] By way of an overview of my reasons for this judgment, for Mr. Zaidi to succeed to obtain the $109,283, he had to establish that there was a valid and enforceable Settlement Agreement and that there was no genuine issue requiring a trial about the validity of the agreement. Mr. Zaidi, however, failed to prove that that there was no genuine issue about the validity of the Settlement Agreement. Rather, it was Ms. Naqvi, who based on the evidence presented to this court, met the onus of establishing that there was no genuine issue requiring a trial. She established that there is no genuine issue requiring a trial to determine that she is entitled to rescind the Settlement Agreement. I am satisfied that the alleged Settlement Agreement was unenforceable on the grounds of misrepresentation, unconscionability, and, or undue influence. Ms. Naqvi met the onus of establishing that the alleged Settlement Agreement is unenforceable, which means that the money belongs to her as Estate Trustee.

B. Procedural and Evidentiary Background

[8] Mr. Zaidi commenced this application by Notice of Application issued on November 12, 2021. He supported his application, with his affidavits dated July 29, 2022 and September 16, 2022 and the affidavit of his brother Raffay dated July 28, 2022.

[9] Ms. Naqvi opposed the application. She relied on her affidavit dated August 30, 2022.

[10] Mr. Zaidi and Ms. Naqvi were cross-examined on November 18, 2022. Raffay Zaidi was not cross-examined.

C. Legal Background

[11] The legal background to resolving the issues in the immediate case is an aspect of the law of contract.

[12] The law associated with the enforcement of settlement agreements, which is an aspect of the well-settled law of contract, is also well settled, and the parties in the immediate case did not dispute the applicable law. The dispute was about how that law applied to the facts of the immediate case.

[13] A settlement agreement is a contract, [Hodaie v. RBC Dominion Securities, 2011 ONSC 6881 at para. 17, aff’d [2012] O.J. No. 5428 (C.A.); Donaghy v. Scotia Capital Inc./Scotia Capitaux Inc., 2009 ONCA 40, [2009] O.J. No. 178 at para. 41 (C.A.)] and the court has jurisdiction at common law and under rule 49.09 to enforce settlements. [Donaghy v. Scotia Capital Inc./Scotia Capitaux Inc., 2009 ONCA 40, [2009] O.J. No. 178 (C.A.); Chytros v. Standard Life Insurance Co. (2006), 2006 ONSC 34419, 83 O.R. (3d) 237 (S.C.J.); U.S. Billiards Inc. v. Carr (1983), 1983 ONSC 1853, 44 O.R. (2d) 591 (Div. Ct.); Polavarapu v. North American Trust Co., [1996] O.J. No. 3223 (Gen. Div.); Childs v. Childs Estate, 1987 SKCA 205, [1987] S.J. No. 654 (C.A.); Marlin-Watson Home Corp. v. Taylor, [1991] O.J. No. 1888 (Gen. Div.); Fretz v. Roman Catholic Episcopal Corp. of Diocese of Hamilton, [1991] O.J. No. 1504 (Gen. Div.); Toronto-Dominion Bank v. Pasternak, 1990 SCC 93, 74 O.R. (2d) 763 (H.C.J.); Lunardi v. Lunardi, [1988] O.J. No. 1882 (H.C.J.); Davis v. Kalkhoust, [1986] O.J. No. 1464 (H.C.J.); Sylman v. Sylman, [1986] O.J. No. 613 (H.C.J.); Rodic v. Rodic, [1985] O.J. No. 1701 (Dist. Ct.)] A motion to enforce a settlement involves two elements. The first element is whether or not there is any genuine issue about the existence of an agreement to settle, and the second is to determine whether there is any reason not to enforce the settlement. [Daehn v. Lalonde, 2021 ONSC 301; Lumsden v. The Toronto Police Services Board et al., 2019 ONSC 5052; Wilson v. Johnston, 2015 ONSC 3016 (Master); Exponents Canada Inc. v. Sharma, 2015 ONSC 2940; Hashemi-Sabet Estate v. Oak Ridges Pharmasave Inc., 2018 ONCA 839; Capital Gains Income Streams Corp. v. Merrill Lynch Canada Inc. (2007), 2007 ONSCDC 39604, 87 O.R. (3d) 464 (Div. Ct.); Bayerische Landesbank Girozentrale v. R.S.W.H. Vegetable Farmers Inc. (2001), 2001 ONSC 28050, 53 O.R. (3d) 374 (S.C.J.)]

[14] For there to be a binding settlement agreement, there must be a mutual intention to create a legally binding agreement and the essential terms of the agreement must have been agreed upon. [Daehn v. Lalonde, 2021 ONSC 301; Wilson v. BKK Enterprises Inc., 2015 ONSC 4394; Hodaie v. RBC Dominion Securities, 2011 ONSC 6881 at para. 17, aff’d [2012] O.J. No. 5428 (C.A.); Ferron v. Avotus Corp., 2005 ONSC 29655, [2005] O.J. No. 3511 (S.C.J.); Cellular Rental Systems Inc. v. Bell Mobility Cellular Inc., [1995] O.J. No. 721 (Gen. Div.), aff’d [1995] O.J. No. 3773 (C.A.)] However, it is not necessary to have reached agreement on incidental matters, such as the method of payment or the exchange of releases. [H. (J.) v. Smith, [2007] O.J. No. 269 (S.C.J.); Perri v. Concordian Chesterfield Co., [2003] O.J. No. 5852 (S.C.J.)]

[15] There is a strong presumption in favour of the finality of settlements; [Deschenes v. Lalonde, 2020 ONCA 304 at para. 27; Mohammed v. York Fire & Casualty Insurance Co. (2006), 2006 ONCA 3954, 79 O.R. (3d) 354 at para. 34 (C.A.), leave to appeal to S.C.C. ref’d, [2006] S.C.C.A. No. 269; (1998), 1998 ONCA 5454, 41 O.R. (3d) 257 (C.A.), leave to appeal to S.C.C. ref’d [1998] S.C.C.A. No. 518.] however, a settlement agreement is a contract and is subject to the law of contract formation, and a settlement agreement can be set aside in the same way that a contract may be rescinded for mistake, fraud, innocent misrepresentation, duress, undue influence, or unconscionability. [Daehn v. Lalonde, 2021 ONSC 301; Deschenes v. Lalonde, 2020 ONCA 304 at para. 27; Radhakrishnan v. University of Calgary Faculty Ass'n, 2002 ABCA 182; Teitelbaum v. Dyson, [2000] O.J. No. 4583 (S.C.J.), aff’d 2001 ONCA 32771, [2001] O.J. No. 3483 (C.A.), leave to appeal to S.C.C. ref’d [2001] S.C.C.A. No. 532.] Below, I shall discuss the law associated with innocent misrepresentation, unconscionability, and undue influence.

[16] As a matter of contract formation, contracts may be oral or in writing. However, although a valid contract, to be enforceable a contract for the conveyance of real property (land) must be in writing. Subject to the doctrine of part performance agreements, for the sale of land, must be in writing. The purpose of s. 4 of the [Statute of Frauds, R.S.O. 1990, c. S. 19] is to prevent fraudulent dealings in land based on perjured evidence, [Erie Sand & Gravel Limited v. Seres’ Farms Ltd., 2009 ONCA 707 at para. 49] and thus the Statute makes oral contracts for the sale of land unenforceable.

D. Facts and Discussion and Analysis

1. Introduction

[17] Mr. Zaidi and Ms. Naqvi have very different accounts of the events leading up to the Settlement Agreement that Mr. Zaidi seeks to have enforced. In the immediate case, while there are some uncontroverted or uncontestable facts, which I shall describe below, and while there are some contentious issues that can be fairly decided without making findings of credibility, there are many contentious facts and some significant credibility issues about the events that typically could only be resolved by way of a trial and not summarily.

[18] With these many contentious issues of fact and of credibility, a case like the case at bar typically would be both inappropriate for an application and also inappropriate for a motion for a summary judgment. However, as it turns out, in the immediate case, on the major issues, it is not necessary to have to make findings of credibility or to choose between the competing versions of the events in order to decide this case.

[19] In the immediate case, I agree with the parties that this case can be fairly resolved summarily. I say this because as I will explain below, in many instances what is critical to the resolution of the case is what the parties believed to be true regardless of whether or not it was true. Thus, as will appear from the narrative, Mr. Zaidi believed that the late Mr. Syed had promised to convey to him condominium unit 1219, at 551 The West Mall, Etobicoke, Ontario for $420,000. With Mr. Syed’s death and the agreement not being put in writing, there is no way of knowing the truth but what is knowable and what I can find to be true is that Mr. Zaidi believed there was such an agreement and that is what he and his brother Raffay told Ms. Naqvi and that is the information Mr. Zaidi represented to her in the run up to the Settlement Agreement.

[20] Thus, I agree with Mr. Zaidi that in some instances it is not necessary for this court to make findings of fact or of mixed fact and law about certain controversial events that occurred before Ms. Naqvi signed the Settlement Agreement. What is important is to describe the subjective states of mind of Mr. Zaidi and Ms. Naqvi when they entered into the Settlement Agreement. What is most important in the immediate case is to understand the individual perspectives of both parties and to understand the circumstances of their bargaining that led to the Settlement Agreement.

[21] Also important to the resolution of the immediate case is to combine my findings of fact and the legal analysis rather than to set out the facts in separate part of the decision and then to discuss the law and the application of the law in another section. This approach is preferable and necessary because the legal analysis bears directly upon Ms. Naqvi’s arguments that the Settlement Agreement should be set aside on the grounds of innocent misrepresentation, unconscionability, and, or undue influence.

[22] My combined findings of fact and legal analysis of those facts follows.

2. The Facts and the Enforceability of the Settlement Agreement

[23] The discussion of the facts may begin with some family history. In 1993, the late Mr. Syed married Ms. Naqvi. There are three children of the marriage, Mesum-Raza Mohammad Syed (age 25), Rida Fatima Syed (age 24), and Mohammad Ali Syed (age 12).

[24] The Applicant, Mr. Zaidi is the blood relative nephew of the late Mr. Syed. Mr. Zaidi immigrated to Canada from Pakistan to go to school and eventually to make Canada his home. In Canada, Mr. Zaidi initially lived at a house owned jointly by his brother Raffay and Mr Syed. The occupants of the home were Mr. Zaidi and his brother Raffay, Mr. Syed and his family, described above, and Mr. Syed’s sister Amina Shah. (Ms. Amina Shah) and her two children Masooma Zhara Shah and Noorezahra Shah. Ms. Amina Shah is the sister of Irum Zahra Shah (Ms. Irum Shah), who is married to real estate agent Syed Aqeel Abbas. As the story shall enfold, Ms. Abbas has a prominent role to play.

[25] On February 3, 2017, the late Mr. Syed purchased a three-bedroom condominium unit, unit 1219, at 551 The West Mall, Etobicoke, Ontario. Ms. Naqvi deposed that the family plan was to eventually settle the property to the children. The purchase price was $332,000. The first mortgage on the property was $305,971.20 from Street Capital Financial Corporation, with a maturity date of March 1, 2022. The money for the downpayment and legal expenses came from Mr. Syed, Ms. Naqvi, and from money borrowed from Ms. Naqvi’s brother. Mr. Zaidi made no contribution to the purchase of the condominium unit.

[26] Mr. Syed agreed to lease the condominium unit to Mr. Zaidi for himself and for Ms. Amina Shah and her two children. In the initial phase of the rental, Ms. Amina Shah paid the majority of the monthly rental. Mr. Zaidi contributed $300 per month. Initially, there was a two-year lease and for the period between February 2017 to January 2019 the monthly rent was $1,450 to $1,500 per month. and then it increased to $1,600.00 from February 2019 to May 2019.

[27] In November 2018, Mr. Syed lent Mr. Zaidi $10,000.

[28] Around the late spring or early summer of 2019, the parties are in agreement that Mr. Syed was experiencing financial difficulties and he was having problems carrying the mortgage on the condominium unit. It is at this juncture that the stories of the parties diverge.

[29] Ms. Naqvi deposed in light of the family’s financial difficulties that she and Mr. Syed planned to sell the condominium unit. She says that Mr. Syed told her that when he told Mr. Zaidi about their plans, he said he wanted to buy the unit by the end of the year. Ms. Naqvi deposed that Mr. Syed told her that in the meantime pending Mr. Naqvi’s buying the property, Mr. Syed and Mr. Zaidi had agreed that Mr. Zaidi would increase his monthly rental payments to $2,450, which would be sufficient to cover the mortgage. The $2,450 would include the $1,600 monthly rent and the excess would be used to pay back the $10,000 loan. The late Mr. Syed told Ms. Naqvi that if Mr. Zaidi did not buy the property by year end, then the rent would be increased to $2,000 per month. In Ms. Naqvi’s version of the events, Mr. Zaidi did not purchase the property by year end and continued to make the monthly payments. It was Ms. Naqvi’s position that the result was that Mr. Zaidi was overpaying for rent. In the discussions later that led to the Settlement Agreement, she calculated that the Estate owed Mr. Zaidi $7,750 for overpaying for rent.

[30] Mr. Zaidi’s account of the events is different. Although he agrees that Mr. Syed was experiencing financial difficulties in the late spring or early summer of 2019, his version of the subsequent events is different. Mr. Zaidi deposed that at some time, between April and June 2019, Mr. Syed agreed to sell the condominium unit to him for $420,000.

[31] Mr. Zaidi deposed that this agreement was reached because Mr. Syed was no longer able to carry the mortgage on the property. Mr. Zaidi deposed that the sale was to be completed when his application for permanent residence in Canada was approved. Mr. Zaidi deposed that in the meantime, he would assume responsibility for the mortgage payments on the condominium unit. Mr. Zaidi deposed that he and Mr. Syed agreed to postpone the closing of the purchase and sale of the condominium unit to avoid the payment of a 15% non-resident speculation tax ($63,000). They also agreed to proceed by private sale to avoid the payment of a real estate commission. This alleged agreement between Mr. Zaidi and the late Mr. Syed was not committed to writing.

[32] Mr. Zaidi deposed that after this oral agreement with the late Mr. Syed was reached, although he continuing to make payments to Mr. Syed’s account, Mr. Zaidi stopped paying rent, and he deposed that he began paying the mortgage on the unit and he paid the property taxes and for maintenance. He deposed that he made some renovations to the property.

[33] There is no dispute that from July 2019, Mr. Zaidi paid $2,450.00 for two months and then with an increase in the common expense charges of the condominium, he $2,495.00 per month until April 2021 into the bank account that was being used by the late Mr. Syed to pay for the mortgage.

[34] I pause to note here that these payments, which undoubtedly were made, were viewed differently from the different perspectives of Mr. Zaidi and Ms. Naqvi, each believing their own version of why Mr. Zaidi was making the payments. Mr. Zaidi viewed these payments as part payment of the purchase price and Ms. Naqvi viewed them as rent payments and loan repayments.

[35] It is demonstrably true that Mr. Zaidi painted the doors, renovated one of the washrooms, repaired the refrigerator, the dishwasher, the air conditioner, and a faulty light switch. There was a dispute about the quality of repairs and the state of repair of the unit when it was vacated by Mr. Zaidi. Nothing ultimately turns on this dispute, but on this issue the photographic evidence favours Mr. Zaidi’s description of the state of repair.

[36] Pausing here in the narrative, apart from his evidence being self-serving, I have no reason to disbelieve that Mr. Zaidi believed he had made an oral contract with Mr. Syed to purchase the condominium unit, and I have no reason to disbelieve that Mr. Zaidi believed that he could stop paying rent and assume responsibility to pay the mortgage in anticipation of closing a real estate transaction with Mr. Syed. As a legal matter, however, this oral agreement, if it existed, was unenforceable because of the [Statute of Frauds, R.S.O. 1990, c. S. 19]. As events occurred, it is now unknowable whether Mr. Syed would have honoured his promise to convey title to the condominium unit. Apart again from the circumstance that it is self-serving, I also have no reason to disbelieve that Ms. Naqvi did not believe that there was an agreement to sell the condominium unit to Mr. Zaidi for $420,000 or that she honestly believed that Mr. Zaidi was overpaying for rent once the loan was repaid.

[37] Returning to the narrative, on January 4, 2020, Mr. Zaidi did become a permanent resident, but unfortunately on January 9, 2020, while driving on the highway, Mr. Syed had a fatal heart attack and the ownership of the condominium unit passed by operation of law to his Estate.

[38] After her husband’s death, in February 2020, Ms. Naqvi moved her family for temporary rent-free accommodation in the basement apartment in the house of her sister, who is the wife of real estate agent, Mr. Abbas. Pausing here, it should be recalled that Mr. Abbas is not blood kin to either Mr. Zaidi or Ms. Naqvi. He is married to Ms. Naqvi’s sister, Ms. Irum Zahra Shah who is blood kin to Mr. Zaidi but not Ms. Naqvi.

[39] Sometime in the year after Mr. Syed’s death, Mr. Zaidi told Ms. Naqvi about the late Mr. Syed’s promise to sell him the condominium unit. Mr. Zaidi deposes that Ms. Naqvi agreed to honour her late husband’s wish to sell him the property at $420,000 once she had been appointed Estate Trustee. Ms. Naqvi’s version, however, is that she simply agreed to have the Estate sell the condominium unit to Mr. Zaidi without agreeing what should be the purchase price. She was apparently prepared to sell the condominium unit to him for its fair market value.

[40] On March 4, 2021, Ms. Naqvi obtained a Certificate of Appointment as Estate Trustee.

[41] On March 24, 2021, Mr. Zaidi and Ms. Naqvi retained Mr. Abbas to act on a joint retainer as real estate agent for the sale of the condominium unit. The parties executed a Confirmation of Co-operation and Representation consenting to Mr. Abbas having a joint retainer. As I shall shortly explain, a joint retainer was an unfortunate and troublesome decision. What the situation called for was that Ms. Naqvi receive the assistance of her own real estate agent and also a lawyer to give her independent legal advice. It is to be noted that Mr. Abbas was not acting altruistically; he would have received a commission from both sides.

[42] Pausing here in the narrative, I observe that as solicitous and as helpful as Mr. Abbas may have attempted to be, his client, Ms. Naqvi, she was in a very vulnerable situation, and she needed the protection of a fiduciary with undivided interests. She was a middle aged widow who had relied on her husband to sustain the family. She had dependents. She was under cultural pressures.

[43] Ms. Naqvi’s evidence was that as a matter of her culture, she felt intimidated and threatened of shame should she not comply with her late husband’s wishes and the demands of Mr. Zaidi. She deposed:

I had religious and social barriers to speak to the male party …. If I would have debated or spoken in front of family male persons, then I would be seen in low ethics; I was fearful of backlash from my husband’s family members and [Mr. Zaidi’s] family … back home Pakistan. ….. [Mr. Zaidi] had insulted me on various occasions including when [he] and I were present beside the body of my deceased husband at the hospital in Ajax, on January 9, 2020.

[44] Ms. Naqvi had to deal with her husband’s debts, and she had to find a new home for herself and her children. She needed money for a planned marriage of her daughter. Ms. Naqvi needed the assistance of someone who would ensure that she properly carried out her duties as Estate Trustee and that she was not taken advantage of in her personal capacity. I have no reasons to doubt Mr. Abbas’s good intentions, but he was not in a position to act for her and that is true regardless of the fact that she consented to a joint retainer.

[45] Returning to the narrative, with Mr. Abbas’ involvement, the parties signed a standard form agreement of purchase and sale dated March 24, 2021. Mr. Zaidi paid a deposit of $10,000. The written agreement provided for a closing date on April 30, 2021. The expressed purchase price was $550,000, which Ms. Naqvi believed was the fair value for the property based on the advice she received from Mr. Abbas.

[46] Although Ms. Naqvi either did not understand it or did not agree to it, it was Mr. Zaidi’s evidence that the purchase price was only notionally set at $550,000. The genuine and unexpressed purchase price was to be the $420,000 that had been agreed to by the late Mr. Syed, three years earlier. The notional price was set at $550,000 so that Mr. Zaidi could obtain a $420,000 mortgage and pay only that sum to the Estate. Mr. Abbas’s idea was that the Estate would be paid only the mortgage funds on closing, which would satisfy the price originally agreed to by the late Mr. Syed.

[47] This side agreement to an apparent agreement to pay $550,000 exemplifies why Ms. Naqvi needed independent legal advice and a real estate agent with undivided loyalties. Depending upon the actual fair market value of the property and depending upon what Mr. Zaidi would disclose to the mortgage lender, Ms. Naqvi was potentially participating in a mortgage fraud. As events unfolded, this agreement of sale was rescinded and so no harm was caused. That said, the circumstances surrounding this agreement are relevant to whether the Settlement Agreement also should be rescinded on the grounds of misrepresentation, unconscionability, and, or undue influence.

[48] I will return to those topics below, but I pause here to note that the misrepresentations in the immediate case are misrepresentations by omission. Whatever the moral obligations may have been, Ms. Naqvi was not told that Mr. Zaidi did not have an unenforceable contract with the late Mr. Syed. Ms. Naqvi was never told that the Estate was under no obligation to sell the property to Mr. Zaidi. Ms. Naqvi was never told that she had no obligation to make a possibly suspicious side deal with Mr. Zaidi. She did not receive advice about the propriety of a notional purchase price of $550,000.

[49] Returning to the narrative, it was not until late March 2021 and early April 2021, that Ms. Naqvi appreciated that the Estate was only going to receive $420,000 from an illusory $550,000 real estate transaction. At this time, the parties agree that Ms. Naqvi objected to the insistences of Mr. Zaidi and his brother Raffay about the actual purchase price. Ms. Naqvi said that she expected to receive $550,000 from the closing of the transaction, but Mr. Zaidi said that the deal was that he pay only $420,000. The parties were at an impasse, and it was clear that the agreement of purchase and sale with the Estate would not close as scheduled on April 30, 2021.

[50] There is no difference in the evidence that in order to resolve the impasse, on April 5, 6, and 7, 2021, there were family meetings on Zoom arranged by Raffay Zaidi, Mr. Zaidi’s brother. The participants were Mr. Zaidi, his brother Raffay, Ms. Naqvi, her daughter Fatima (except for the April 6, 2021 call), Mr. Abbas, and his wife Ms. Irum Shah. Each meeting lasted approximately 1.5 hours. During the meetings, Mr. Zaidi was at the condominium unit. Raffay Zaidi was in Cleveland, Ohio, and Ms. Naqvi, her daughter, Mr. Abbas, and Irum Shah were together in Mr. Abbas’s home.

[51] Once again, a family conclave to persuade Ms. Naqvi to sell the property or to settle with Mr. Zaidi was not what the situation called for. Ms. Naqvi’s only genuine uncompromised advocate was her twenty-four year old daughter, who while loyal, cannot be considered an adequate representative to advise Ms. Naqvi. As explained above, Mr. Abbas had an irreconcilable conflict of interest, and his wife cannot be taken as being an advocate to protect Ms. Naqvi. As I explained above, Ms. Naqvi was in a vulnerable and weak bargaining position.

[52] The settlement negotiations apparently focused on what it would take for Mr. Zaidi to abandon the written agreement to purchase the condominium unit. He was seeking to be repaid for the payments he made for the mortgage on the property and for the repairs he made for the property. He was seeking something in consideration of the property having appreciated in value. To settle the dispute and to secure Mr. Zaidi’s agreement to vacate the unit so that it could be sold, the parties ultimately settled on the all-inclusive sum of $94,283 to be paid to Mr. Zaidi.

[53] In these negotiations, Ms. Naqvi did not receive the legal advice that she needed to responsibly act for the Estate and for her own self-interest.

[54] The settlement was prepared by Mr. Abbas, and using his e-signing software Authentisign, the parties signed the settlement agreement. Ms. Naqvi signed on April 7, 2021. Raffay Zaidi signed on April 8, 2021. Mr. Zaidi, Mr. Abbas, and Ms. Fatima signed on April 9, 2021, and Ms. Irum Shah signed on April 10, 2021.

[55] Ms. Naqvi says that she felt coerced to sign the agreement by the family. Once again, apart from the testimony being self-serving, I have no reason not to believe her evidence. The fact that family members from both sides were involved is actually evidence that Ms. Naqvi was under family pressure to resolve the impasse that had emerged about closing the sale with Mr. Zaidi. This was contract bargaining and Mr. Zaidi was entitled to hard bargain in his own self-interest but Ms. Naqvi was not in a position to hard bargain in return.

[56] There are no issues about the interpretation of the Settlement Agreement. It was a simple and straightforward agreement to pay, what in the circumstances can fairly be said to be the ransom being demanded by Mr. Zaidi. The Settlement Agreement stated:

April 7, 2021

As per today’s conversation, below are the details of our agreement as discussed earlier.

Parties Involved:

1. Aqeel Zaidi
2. Raffay Zaidi
3. Rabab Naqvi
4. Rida Fatima
5. Irum Zahra Shah
6. Syed Aqeel Abbas

Agreement Details:

1. 1219-551 The West Mall will be vacated on or prior to July 15th, 2021.
2. For the months of May and June, the rent will be $1,600 and the half month of July; $800.00.
3. The deadline for the payment of the $94,283 is July 15th, 2021.
4. This amount ($94,283) will be paid by Rabab Fatima to Aqeel Zaidi.
5. The deposit of $10,000 made by Aqeel Zaidi will be returned within a week through the listing brokerage (Remax Gold).
6. The credit card amount of $7,300.00 owed by Aqeel Zaidi has been waived

Signatures:

Rabab Naqvi Raffay Zaidi Aqeel Zaidi Rida Fatima Syed Aqeel Abbas Irum Zahra Shah

[57] Pausing here in the narrative of the facts, in my opinion, this Settlement Agreement can be set aside on the grounds of misrepresentation, unconscionability, and undue influence.

[58] As a legal doctrine the elements of a claim for rescission for innocent misrepresentation are: (1) the defendant makes a false statement; (2) the statement is material, which is to say it is of a type that would influence a contracting party’s decision to enter into a contract; (3) the statement induced the plaintiff to enter into the contract; and, (4) the plaintiff sought to rescind the contract before the closing of the transaction. [Deschenes v. Lalonde, 2020 ONCA 304; Guarantee Co. of North America v. Gordon Capital Corp., 1999 SCC 664, [1999] 3 S.C.R. 423; Kingu and Kingu Holdings Inc. v. Walmar Ventures Ltd. (1986), 1986 BCCA 142, 10 B.C.L.R. (2d) 15 (B.C.C.A.); Jorian Properties Ltd. v. Zellenrath (1984), 1984 ONCA 2178, 46 O.R. (2d) 775 (C.A.)] The court may set aside or not enforce a settlement agreement if the court finds that there was fraud or material misrepresentations inducing the litigant to enter into the settlement. [Deschenes v. Lalonde, 2020 ONCA 304; Agg v. Watson, 2021 ONSC 3068; 375 Lakeshore Developments Inc. v. Tong, 2021 ONSC 1820; York University v. Markicevic, 2018 ONCA 893, leave to appeal to S.C.C. ref’d [2019] S.C.C.A. No. 134; Risalsdar v. Ali, 2014 ONCA 59; Buccilli v. Pillitteri, 2012 ONSC 6624, aff'd 2014 ONCA 432]

[59] In my opinion, the elements for rescission for innocent misrepresentation are satisfied in the immediate case. Mr. Zaidi by his conduct and by his silence represented to Ms. Naqvi that the late Mr. Syed had committed to selling the condominium unit to Mr. Zaidi pursuant to an oral contract. Mr. Zaidi by his conduct and silence represented to Ms. Naqvi that he had a right to be repaid what he had paid while living in the condominium unit because of the promise made by the late Mr. Syed. These false material representations induced Ms. Naqvi to enter into the transaction.

In my opinion, the elements for rescission for unconscionability are satisfied in the immediate case. As a legal doctrine, unconscionability traditionally had three elements. The traditional elements of unconscionability were: (1) pronounced inequality of bargaining power; (2) substantially improvident or unfair bargain; and (3) the defendant knowingly taking advantage of the vulnerable plaintiff. [Birch v. Union of Taxation Employees, Local 70030 (2008), 2008 ONCA 809, 93 O.R. (3d) 1 (C.A.); Titus v. William F. Cooke Enterprises Ltd. (2007), 2007 ONCA 573, 284 D.L.R. (4th) 734 (Ont. C.A.); Black v. Wilcox (1976), 1976 ONCA 555, 12 O.R. (2d) 759 (C.A.); Mundinger v. Mundinger, 1968 ONCA 250, [1969] 1 O.R. 606 (C.A.); affd. [1970] S.C.R. vi; Vanzant v. Coates (1917), 1917 ONCA 573, 40 O.L.R. 556 (C.A.); Waters v. Donnelly (1884), 9 O.R. 391 (Ch. Div.)] Recently, the Supreme Court of Canada in [Uber Technologies Inc. v. Heller, 2020 SCC 16], revised and, in effect, broadened the scope of equity’s and the common law’s capability to intervene on the grounds of unconscionability. In Uber, the Supreme Court held that unconscionability requires proof of only two elements, namely: (a) an inequality of bargaining power; and (b) a resulting improvident bargain. [Uber Technologies Inc. v. Heller, 2020 SCC 16] Inequality of bargaining power exists whenever a party cannot adequately protect their interests in the contracting process and the inequality may relate to personal attributes or characteristics of the weaker party (e.g. illiteracy) or the stronger party (e.g. wealth, knowledge and experience), or it may arise from situational circumstances that impair the weaker party's ability to contract freely and autonomously. [Sanders (Litigation guardian of) v. Jain, 2023 ONSC 195; Techlantic Ltd. v. Modellista Auto Accessories Inc., 2021 ONSC 746; Uber Technologies Inc. v. Heller, 2020 SCC 16]

[60] In my opinion, all of these elements of traditional and contemporary unconscionability are present in the facts of the immediate case. Ms. Naqvi was in a vulnerable position. She was being taken advantage of. She ought to have received independent legal advice and representation. The bargain was certainly improvident or unfair from Ms. Naqvi’s perspective. The agreement reached with the late Mr. Syed for Mr. Zaidi to purchase the condominium unit, was unenforceable and she was under no obligation to have the Estate sell the condominium unit to Mr. Zaidi and no obligation to sell it at historic values that did not reflect the property’s fair market value. Even if Mr. Zaidi had paid the mortgage on the property, he did not pay rent. The purport of the Settlement Agreement was that Mr. Zaidi would get a refund of his mortgage payments and for the repairs he made to the unit plus something for the appreciation of the property. The end result would be that he would have lived rent free in the condominium for five years. A very nice deal for him but a miserable one for the widow.

[61] In my opinion, the elements for rescission for undue influence are satisfied in the immediate case. Undue influence focuses on a person's dominance over another person's will by exercising a pervasive influence on him or her, whether through manipulation, coercion, or outright abuse of power. [Kavanagh v. Lajoie, 2014 ONCA 187; Bank of Montreal v. Duguid (2000), 2000 ONCA 5710, 47 O.R. (3d) 737 (C.A.); Geffen v. Goodman Estate, 1991 SCC 69, [1991] 2 S.C.R. 353; Bank of Montreal v. Stuart, 1909 SCC 3, [1911] A.C. 120; Vanzant v. Coates (1917), 40 O.L.R. 556 (C.A.); Hutchinson v. Standard Bank (1917), 1917 ONCA 546, 39 O.L.R. 286 (C.A.)] Whether a person's free will was overborne by an act of coercion or fraud is a question of fact to be proven by the person alleging undue influence. [Morreale v. Romanino, 2017 ONCA 359; Keljanovic Estate v. Sanseverino, 2000 ONCA 5711, [2000] O.J. No. 1364 (C.A.)] In some cases, depending on the relationship between the parties, there is a presumption of undue influence to be rebutted. [Geffen v. Goodman Estate, 1991 SCC 69, [1991] 2 S.C.R. 353] In the immediate case, there is no presumption of undue influence and there was no outright abuse of power in the immediate case; there was, however, manipulation, cultural pressure, and coercion that compelled Ms. Naqvi to agree to the Settlement Agreement. I find as a fact that there was undue influence in the immediate case.

[62] I conclude that the Settlement Agreement should be rescinded. Although these findings are sufficient to decide this application, I shall resume the narrative and complete the story of this unfortunate family dispute.

[63] Returning to the narrative, pursuant to the Settlement Agreement, in order to secure the release of the $10,000 deposit with respect to the March 24, 2021 agreement of purchase and sale, Mr. Zaidi signed a mutual release on April 9, 2021. Ms. Naqvi signed on April 12, 2021 at 12:37 p.m. As specified in the agreement, Mr. Zaidi paid the rent for May, June, and half of July.

[64] On June 16, 2021, with Mr. Abbas acting as her real estate agent, Ms. Naqvi entered into an agreement of purchase and sale to sell the condominium unit at a sale price of $518,000. Mr. Abbas was now only acting for Ms. Naqvi, but once again, he was not acting altruistically, he would share the commission with the other real estate agent involved for the purchaser.

[65] In June 2021, insofar as the Settlement Agreement was concerned, it appeared that the family dispute had been resolved. However, the dispute reemerged when on July 6, 2021, Mr. Zaidi sent Ms. Naqvi the following somewhat threatening email message:

This email is regarding the West Mall Agreement, dated April 7, 2021. The agreement is attached to this email as a PDF. I contacted you, Rabab Fatima Naqvi, numerous times to discuss when and how you will pay me the agreed settlement amount of $94,283.00 CAD, which must be paid in full by July 15, 2021. This amount was settled towards 1219-551 The West Mall, Toronto, Ontario M9C 1G7 [“the unit”] The following is a list of dates when you were contacted by me: I messaged you on June 27, 2021. I called you twice on July 2, 2021, and followed up with a message. I called you July 3, 2021. I called you July 5, 2021. I called Syed Aqeel Abbas, your listing agent, on July 2, 2021, and followed up with a text message. Neither of you have answered nor followed up with me.

The unit will only be vacated upon receiving complete payment from you on our agreed date. I have made arrangements to move out, but must receive confirmation of payment before moving forward. Please provide me with a written confirmation by 11:59 PM on July 6, 2021, explaining how you plan to proceed with payment. Without this explanation, there will be a delay in moving out of the unit. If this deadline is not met, I will register a caution on against the unit. Please govern yourself accordingly. Regards, Aqeel Zaidi

[66] Ms. Naqvi’s response was to obtain the legal advice that she had desperately been missing. She retained Ranbir Mann of RS Mann Professional Corporation. On July 7, 2021, Mr. Zaidi received the following letter from Mr. Mann based on the instructions he had received from Ms. Naqvi:

Dear Mr. Zaidi:

RE: Agreement dated April 7, 2021, Sale 1219-551 The West Mall Rd, Sale closing: July 30, 2021

1. We are fully retained solicitor by Rabab Fatima Naqvi, the Estate Trustee of Asim Raza Syed in the subject matters above-mentioned.
2. We have reviewed the alleged agreement dated April 7, 2021, (the “Agreement”) and the Agreement of Purchase and Sale dated June 16, 2021, executed between The Estate of Asim Raza Syed (seller) and Sonia Higgins (buyer) relating to resale of the condominium municipally addressed 1219-551 The West Mall Rd, Etobicoke (the “Property”). The Property is set to close for sale on July 30, 2021.
3. We have also reviewed your email dated July 6, 2021, delivered to our client.
4. Our client disputes the alleged Agreement on various grounds, more particularly that the Agreement was executed involuntarily by our client.
5. We are advised that you along with Amina Jabeen Shah and her daughter Noorezahra Shah are occupying the Property.
6. We are asking that you and all other occupants currently residing at the Property handover the peaceful complete possession to our client by no later than 5 PM, Wednesday, July 28, 2021. You already have a notice to vacate since April 2021.
7. On a without prejudice basis, our client has provided us the directions and authorization to receive from her real estate closing lawyer, the entire subject amount of the alleged Agreement in the sum of $94,283.00 (the “Agreement Amount”) into our trust account upon closing.
8. The Agreement Amount will be kept in our trust account until there is a mutual settlement between our client and you within a 14-day period from its receipt by us. If our client and you cannot reach to a mutual settlement respecting the disbursement of the Agreement Amount, then the parties will be free to seek the appropriate legal remedy by way of a Court Order and pending litigation amount can be deposited to the Accountant of the Superior Court of Justice to the outcome of the litigation.
9. We look forward to having your written undertaking by no later than 5 PM, Wednesday, July 7, 2021, that you and all other occupants of the Property will vacate the Property by the deadline stated above.
10. Having not heard from you accordingly, we then have the instructions to file appropriate application before the Superior Court of Justice and an urgent motion for possession of the Property, with legal costs against you on the Substantial Indemnity basis.
11. We recommend that if needed should all communications only be through the lawyers as our client was uncomfortable and intimidated, by you.
12. We note that you have advised our client that you would like to register a caution against the Property. Please be advised that if you register a caution against the Property, then our client will move before the court, forthwith, without any further discussions with you and will seek additional monetary damages against you, as the Property is set to sale on July 30, 2021.
13. Further, please be advised that our client is extremely uncomfortable and have felt harassed on account of your ongoing communications with her and her all children, including the communications from Amina Shah and Noorezahra, going forward on this matter.
14. Our client has asked us to instruct you and your relatives to seize [sic] immediately communicating with our client and her immediate family members directly or indirectly respecting the above subject matter and you must address all of your concerns directly to my office relating to the above matter.
15. We look forward to hearing from you in the forgoing by no later than 5 PM, Wednesday, July 7, 2021, or we have full instructions to file litigation soon after with costs.

Yours very truly,

RS Mann Professional Corporation.

[67] In response to Mr. Mann’s letter, Mr. Zaidi retained a lawyer of his own, and the parties entered into a without prejudice agreement, which would require the payment of $109,283.00 being paid into court until disposition of these proceedings. Mr. Zaidi agreed to vacate the property and to allow the sale of the property to close. Mr. Zaidi vacated the condominium on July 28, 2021.

[68] The sale to the third party closed on July 30, 3021. The Estate received net sale proceeds of $230,669.54. Out of this amount, $109,293.00 was held back by the realtor and it was eventually deposited into court. Ms. Navqi used the remaining sale funds ($121,376.54) to pay Estate debts.

[69] On November 12, 2021, Mr. Zaidi commenced this application.

[70] This application is what was envisioned by Mr. Mann’s letter to resolve the dispute between the parties.

[71] Mr. Mann’s letter itself adds little to the narrative apart from confirming that Ms. Naqvi felt intimidated by Mr. Zaidi. In the circumstances, it is understandable that she would feel that way, but more significant from a legal perspective is that Mr. Zaidi overreached when he induced Ms. Navqi to initially agree to transfer title to her late husband’s condominium and when he induced her to enter into the Settlement Agreement. Mr. Zaidi was entitled to bargain for the unit, and he was entitled to disclose the oral agreement that he had with the late Mr. Syed, but the law of contract sets boundaries, and for the reasons described above, none of the agreements that the late Mr. Syed entered into were enforceable and Ms. Naqvi is entitled to rescission of the Settlement Agreement that she signed in the unfortunate circumstances of this family dispute.

E. Conclusion

[72] For the above reasons, Ms. Naqvi shall have a judgment for the money that was paid into court and the money should be paid out to her.

[73] If the parties cannot agree about the matter of costs, they may make submissions in writing beginning with Ms. Naqvi’s submissions within twenty days from the release of these Reasons for Decision followed by Mr. Zaidi’s submissions within a further twenty days.

Perell, J.

Released: February 22, 2022