Court File and Parties
Court File No.: CV-23-697033 Motion Heard: 2023-08-22 Reasons Released: 2023-11-29 Superior Court of Justice – Ontario
Between: MASSIMO CONTI, Plaintiff - and - JOHN DUCA, JOSEPH DUCA and DAYTONA AUTO CENTRE LTD., Defendants
Before: Associate Justice McGraw
Counsel: G. Grycuc, for the Plaintiff Joseph Duca, Defendant, Self-Represented S. Grillone, Proposed Intervener, Self-Represented
Reasons For Endorsement
Introduction
1This is a motion by the Defendants to discharge the Certificate of Pending of Litigation (“CPL”) registered on title to the property at 53 Grampian Crescent, Toronto (the “Property”) granted pursuant to my Order (the “Order”) and Endorsement dated April 3, 2023 (the “April 3 Endorsement”). The non-party Sergio Grillone brings a motion seeking leave to intervene as an added party.
Background
2The Plaintiff moved from Italy to Canada in April 2009 to take a job as a shop foreman and mechanic with the Defendant Daytona Auto Centre Ltd. (“DACL”). The Defendant John Duca (“John”) is the principal of DACL. The Defendant Joseph Duca (“Joseph”) is John’s son, an employee of DACL and the registered owner of the Property.
3The Plaintiff states that he was unable to purchase his own property when he first moved to Canada because he was on a work Visa and that John offered to assist him. The Plaintiff alleges that he entered into a verbal agreement with John and Joseph by which John would purchase the Property in Joseph’s name or would transfer it into Joseph’s name, the Plaintiff would live there and pay all related costs and the Property would eventually be transferred to the Plaintiff. There is no written agreement, correspondence or other documentation setting out these terms. The Plaintiff alleges in his Statement of Claim that this was part of his compensation package. The Plaintiff claims that after the Property was purchased on December 12, 2011, John advised DACL’s other employees that the Plaintiff had purchased a home and that one of DACL’s principals helped put services like utilities in his name. The Plaintiff claims that he paid $1,700 monthly to John and Joseph for mortgage payments, insurance and property taxes plus monthly household expenses and that he made many improvements to the Property.
4Joseph states that he and his father purchased the Property as a long-term investment. At the time of purchase, the Property had a home equity line of approximately $295,000 attached to it with a monthly payment of $1,184.19, not a mortgage of $92,911 as claimed by the Plaintiff. Joseph states that John offered to let the Plaintiff rent the Property in December 2011 after he advised that his previous landlord was going to evict him for rental arrears and damage. Joseph claims that the Plaintiff was a valued and trusted employee of DACL and John wanted to assist him by offering him a rental property at below market rent. There is no lease, rental agreement or other documentation. At that time, Joseph was employed at RBC as an Accounts Manager and claims he assisted the Plaintiff in obtaining a VISA so that he could build his credit and purchase his own property. The Defendants deny that there was any agreement or discussions with respect to transferring the Property to the Plaintiff or giving him an ownership interest. Joseph also alleges that the improvements were made without his permission or knowledge and that the Plaintiff improperly transferred accounts into Joseph’s name. Joseph also states that in mid-2017, after the Plaintiff advised that he was having difficulty paying his living expenses, John added free rent to his compensation package. Joseph also claims that John paid certain personal expenses for the Plaintiff which have not been reimbursed. The Plaintiff denies all of these claims.
5The Plaintiff left DACL in 2023 to take another job. In mid-March 2023, Joseph advised the Plaintiff of his intention to sell the Property. Joseph also advised that he intended to purchase his own property with the proceeds but might move into the Property with his wife and 2 children. He offered that the Plaintiff could purchase it at the proposed list price or enter into an interim rental agreement. The Plaintiff initially responded to Joseph’s messages but did not contact Joseph to discuss the Property. On March 22, 2023, Joseph received correspondence from Plaintiff’s counsel advising him that the Plaintiff asserted an ownership interest in the Property. Joseph commenced proceedings to terminate the Plaintiff’s tenancy on March 29, 2023 by delivering a Notice to End Tenancy (with a termination date of June 2, 2023) and a separate Eviction Notice requesting the Plaintiff to vacate the Property within 7 days.
6As a result of the eviction proceedings, the Plaintiff brought an urgent motion on March 29, 2023 seeking the CPL (the “Motion”). The Plaintiff also commenced this action by Statement of Claim issued on March 29, 2023, claiming, among other things, that Joseph holds title as the Plaintiff’s trustee subject to the Plaintiff’s proprietary interest, a resulting trust, constructive trust and unjust enrichment and general, compensatory and special damages. The Plaintiff served the Defendants with his original Motion Record on Thursday, March 30, 2023 with a Notice of Motion indicating that the Motion was proceeding in writing because it was without notice.
7I received the Plaintiff’s Motion Record as Duty Associate Judge for urgent motions on Friday, March 31, 2023. After my review, I asked Plaintiff’s counsel through the court office if the Motion was being brought on notice and if they had canvassed dates with the Defendants. Counsel replied: “the motion will be brought on notice, however, there has been no response from the opposing party and they do not have counsel at this time so effectively it is without notice.” I directed that the Motion be added to my Regular Motions list on April 3, 2023 for 20 minutes on notice to the Defendants. Plaintiff’s counsel uploaded an amended Motion Record and a draft Order into CaseLines on March 31, 2023. The Notice of Motion in the amended Motion Record indicated that the Motion was proceeding by video conference on Monday, April 2, 2023 (the correct date was April 3) and the draft Order indicated that the motion was proceeding on notice. As set out below, the Plaintiff did not serve the Defendants with this second, amended Motion Record indicating that the Motion was proceeding by virtual hearing. The only notice of the hearing which the Defendants received was a CaseLines invitation sent by Plaintiff’s counsel to Joseph on April 1, 2023 with the Zoom details for April 3 and access to the materials.
8Plaintiff’s counsel and Joseph appeared before me at a telephone case conference on April 11, 2023. Joseph advised that the Defendants would be bringing a motion to discharge the CPL and that they intended to retain counsel. The case conference was adjourned to April 21, 2023 at which time Joseph advised that the Defendants would not be retaining counsel and Mr. Grillone requested that his intervener motion proceed at the same time. The motions were scheduled for June 1, 2023 however, at a telephone case conference on May 31, 2023 they were adjourned to July 26, 2023 at the request of the parties as cross-examination transcripts were not ready. In light of ongoing settlement discussions, another telephone case conference was scheduled for July 19, 2023. In the interim, an additional telephone case conference was held on June 23, 2023 to speak to the Plaintiff’s refusal to be examined by Mr. Grillone. Mr. Grillone elected not to bring a motion to compel the Plaintiff to be examined and requested that the court draw a negative inference.
9The motions did not proceed on July 26, 2023 as I was unable to access the motion materials until counsel sent me a third CaseLines link at the court attendance which I did not have. The motion was adjourned to August 10, 2023, however, Plaintiff’s counsel requested an adjournment to attend on an urgent estates matter in Oshawa. Joseph initially opposed the adjournment, however, the parties ultimately agreed that the motion would proceed on August 22, 2023 peremptory on the Plaintiff.
The Law and Analysis
The Intervener Motion
10For the reasons that follow, Mr. Grillone is granted leave to intervene in this action.
11Mr. Grillone is former legal counsel to the Defendants and some DACL-related parties. Due to a medical leave of absence, Mr. Grillone executed an undertaking not to practice law in April 2019. The Law Society of Ontario, on consent, subsequently commenced a trusteeship over Mr. Grillone’s files. The trusteeship does not apply to the administration of Mr. Grillone’s practice, therefore, Mr. Grillone is responsible for collecting his outstanding accounts. When Mr. Grillone first attended before me he was responding to a bankruptcy application. He advised that as of April 2019, the Defendants owed him approximately $250,000 for legal fees and disbursements. Joseph confirms that approximately $200,000-$250,000 is owing and that he advised Mr. Grillone in late March 2023 that he would pay the outstanding accounts in April or May 2023 using the proceeds of sale of the Property or the home equity line of credit. However, given the registration of the CPL on title to the Property on April 3, 2023, Joseph has been unable to do so.
12Rule 13.01(1) of the Rules of Civil Procedure states:
“A person who is not a party to a proceeding may move for leave to intervene as an added party if the person claims,
(a) an interest in the subject matter of the proceeding;
(b) that the person may be adversely affected by a judgment in the proceeding; or
(c) that there exists between the person and one or more of the parties to the proceeding a question of law or fact in common with one or more of the questions in issue in the proceeding.
(2) On the motion, the court shall consider whether the intervention will unduly delay or prejudice the determination of the rights of the parties to the proceeding and the court may add the person as a party to the proceeding and may make such order as is just.”
13In determining whether a motion for intervention should be granted the court should consider the nature of the case, the issues which arise and the likelihood that the proposed intervener can make a useful contribution without causing injustice to the immediate parties (Peel (Regional Municipality) v. Great Atlantic and Pacific Company of Canada (1990), 74 O.R. (2d) 164). In Finlayson v. GMAC Leasco Ltd/ GMAC Location Ltee, 2007 ONSC 4317, [2007] O.J. No. 597, Quinn J. expanded upon the factors set out in Rule 13.01(1):
“27. Clause 13.01(1)(a) describes the first test as requiring the proposed intervenor to have "an interest in the subject matter of the proceeding." An interest in the subject matter of the proceeding is to be distinguished from an interest in the outcome of the proceeding. Clause 13.01(1)(a) would include cases where, as an obvious example, two parties are engaged in litigation over a piece of real property and the person seeking to intervene as an added party purports to have an interest in the property (through deed, lien or mortgage). Mr. Graham does not have an interest in the subject matter of the 2002 action. His interest is in the outcome of that action. ”
14Mr. Grillone is only required to satisfy one of the 3 tests in Rule 13.01(1) (Finlayson at para. 31). I conclude that Mr. Grillone has satisfied the requirement in Rule 13.01(1)(a). The subject matter of this proceeding is the Property. Mr. Grillone has an interest in the Property based on Joseph’s agreement that he would use the sale proceeds or equity line to pay Mr. Grillone’s outstanding fees in or April or May 2023. Joseph has been unable to do so because the CPL is registered on title to the Property. My conclusion may have been different had Joseph agreed that he would pay the fees generally or if the Property was one of numerous properties or assets which he might use to do so. However, the uncontroverted evidence is that Joseph advised Mr. Grillone that he would pay him using the proceeds of sale of this Property or the line of credit on this Property. While, depending on the outcome of this motion, it could be that Mr. Grillone may have an interest in the outcome of these proceedings overall, Mr. Grillone has advised the court that his involvement in this action is limited to whether the CPL is discharged which will determine whether he can be paid. This therefore limits the extent to which Mr. Grillone’s participation could cause any delay or prejudice to the parties as his involvement is limited to making submissions in support of discharging the CPL.
15Accordingly, I am satisfied that it is just for Mr. Grillone to be granted leave to intervene as an added party. Even if I had dismissed Mr. Grillone’s motion and not considered his submissions it would not have altered my conclusions and disposition set out below particularly given my findings on material non-disclosures. I also decline Mr. Grillone’s request to draw a negative inference due to the Plaintiff’s refusal to be cross-examined by him.
CPL Discharge Motion Generally
16For the reasons set out below, I conclude that the CPL should be discharged on the basis of material non-disclosure by the Plaintiff on the Motion. Although it is not necessary for me to do so, I would also discharge the CPL on the grounds that the Plaintiff has not satisfied the applicable test to maintain the CPL.
17The court’s jurisdiction to grant leave to issue a CPL is set out in section 103(1) of the Courts of Justice Act (Ontario) (the “CJA”). With respect to the discharge of a CPL, s. 103(6) of the CJA states:
“(6) The court may make an order discharging a certificate,
(a) where the party at whose instance it was issued,
(i) claims a sum of money in place of or as an alternative to the interest in the land claimed,
(ii) does not have a reasonable claim to the interest in the land claimed, or
(iii) does not prosecute the proceeding with reasonable diligence;
(b) where the interests of the party at whose instance it was issued can be adequately protected by another form of security; or
(c) on any other ground that is considered just,
and the court may, in making the order, impose such terms as to the giving of security or otherwise as the court considers just.”
18Rule 42.02(1) of the Rules of Civil Procedure provides that an order discharging a certificate of pending litigation under subsection 103(6) of the CJA may be obtained on motion to the court. Master Glustein (as he then was) summarized the factors which the court must consider on a motion to grant or discharge a CPL in Perruzza v. Spatone, 2010 ONSC 841 at para. 20:
“(i)The test on a motion for leave to issue a CPL made on notice to the defendants is the same as the test on a motion to discharge a CPL (Homebuilder Inc. v. Man-Sonic Industries Inc., 1987 CarswellOnt 499 (S.C. - Mast.) ("Homebuilder") at para. 1);
(ii)The threshold in respect of the "interest in land" issue in a motion respecting a CPL (as that factor is set out at section 103(6) of the Courts of Justice Act, R.S.O. 1990, c. C.43) is whether there is a triable issue as to such interest, not whether the plaintiff will likely succeed (1152939 Ontario Ltd. v. 2055835 Ontario Ltd., 2007 CarswellOnt 756 (S.C.J.), as per van Rensburg J., citing Transmaris Farms Ltd. v. Sieber, [1999] O.J. No. 300 (Gen. Div. - Comm. List) at para. 62);
(iii)The onus is on the party opposing the CPL to demonstrate that there is no triable issue in respect to whether the party seeking the CPL has "a reasonable claim to the interest in the land claimed" (G.P.I. Greenfield Pioneer Inc. v. Moore, 2002 ONCA 219, 2002 CarswellOnt 219 (C.A.) at para. 20);
(iv)Factors the court can consider on a motion to discharge a CPL include (i) whether the plaintiff is a shell corporation, (ii) whether the land is unique, (iii) the intent of the parties in acquiring the land, (iv) whether there is an alternative claim for damages, (v) the ease or difficulty in calculating damages, (vi) whether damages would be a satisfactory remedy, (vii) the presence or absence of a willing purchaser, and (viii) the harm to each party if the CPL is or is not removed with or without security (572383 Ontario Inc. v. Dhunna, 1987 CarswellOnt 551 (S.C. - Mast.) at paras. 10-18); and
(v)The governing test is that the court must exercise its discretion in equity and look at all relevant matters between the parties in determining whether a CPL should be granted or vacated (931473 Ontario Ltd. v. Coldwell Banker Canada Inc., 1991 CarswellOnt 460 (Gen. Div.); Clock Investments Ltd. v. Hardwood Estates Ltd., 1977 CarswellOnt 1026 (Div. Ct.) at para. 9).”
Full and Fair Disclosure
19I am satisfied that the CPL should be discharged due to the Plaintiff’s failure to make full and fair disclosure on the Motion.
20Rule 39.01(6) of the Rules of Civil Procedure provides that where a motion is made without notice, the moving party must make full and fair disclosure of all material facts, and failure to do so is in and of itself sufficient ground for setting aside any order obtained on the motion. This Rule does not require that an order obtained in the absence of full and fair disclosure be set aside, rather, it provides only that it may be set aside solely on that basis (Gong v. Neuhaus Management Ltd., 2021 ONSC 531 at para. 51). A court still has the discretion to consider whether a CPL should be continued or discharged under s. 103(6) of the CJA even where there has been material non-disclosure (Gong at para. 51).
21In Henein v. Alala, 2021 ONSC 5871, LaHorey A.J. summarized the law with respect to the disclosure of material facts under Rule 39.01(6) in the context of a CPL discharge motion:
43 "Material facts" are those facts which must be drawn to the attention of the court and which may affect the outcome of the motion. The question is not whether the order would or would not have been granted; rather the issue is whether the omissions might have had an impact. The test for materiality is an objective one.
44 The rationale for this rule has been eloquently expressed by Justice Myers in Moses v. Metro Hardware Maintenance, Inc., 2019 ONSC 6900, a case involving a CPL obtained without notice. In that decision Justice Myers wrote:
20Our system of civil justice is adversarial. It is premised upon parties each putting forward their own case and challenging each others' cases. A dispassionate trier of fact and law is charged with the task of determining the outcome based on the idea that the parties and their professional advocates are best able to establish the truth through their own industry and self-interest.
21However, the adversarial system operates within the rule of law. Despite the system being adversarial, we do not have trial by battle in which the spoils go to the strongest or to the richest combatant. The rule of law requires that above all else, the resolution of civil disputes must be fair and just. Hryniak v. Mauldin, 2014 SCC 7, at para. 23.
22Although lawyers are duty-bound to advocate for their clients zealously and fearlessly, they too are required to do so "in a way that promotes the parties' right to a fair hearing in which justice can be done." See: Rules of Professional Conduct, Law Society of Ontario, Commentary 5.1-1.
23Court proceedings without notice to one side or the other are an exception to the underlying premise of the adversarial system. When only one side is heard, the assurances of mutual self-interest and mutual, competitive advocacy by professionals committed to the fairness of the process are missing.
24To protect the rule of law and the fundamental assurance of a fair civil justice system, Rule 39.01(6) of the Rules of Civil Procedure imposes vital, extra burdens on parties who seek relief before the court without notice to their adversary. They are required to make "full and fair disclosure of all material facts." The rule provides that the failure to make "full and fair disclosure of all material facts" is itself a basis to set aside an order obtained without notice regardless of the merits of the request for relief.
25Rule 39.01(6) of the Rules of Civil Procedure is not just speaking to witnesses' testimony. It applies to the party who brings a motion without notice.
26The party who moves without notice must be fair. The regular zeal that is perfectly appropriate in face of an equally zealous adversary does not apply when a party chooses to go before a judicial officer without anyone else present to keep his or her zealousness in check.
27In United States v. Friedland, [1996] O.J. No. 4399 (Ont Gen Div) Sharpe J. (as he then was) described the issue as follows: The rationale for this rule is obvious. The Judge hearing an ex parte motion and the absent party are literally at the mercy of the party seeking injunctive relief. The ordinary checks and balances of the adversary system are not operative. The opposite party is deprived of the opportunity to challenge the factual and legal contentions advanced by the moving party in support of the injunction. The situation is rife with the danger that an injustice will be done to the absent party. As a British Columbia judge noted recently:
There is no situation more fraught with potential injustice and abuse of the Court's powers than an application for an ex parte injunction. (Watson v. Slavik, [1996] B.C.J. No. 1885, August 23rd, 1996, paragraph 10.)
28The duties to make full and fair disclosure replace the checks and balances of the adversarial system. The court has no choice but to trust the moving party when he or she says they are fully disclosing and fairly presenting all material facts and the applicable law. It is the need to trust an otherwise zealously adversarial party that makes the situation so fraught with risk and renders justice so vulnerable to abuse.
29Justice Sharpe described the duty on a party who moves without notice in this way:
27 ...That party is not entitled to present only its side of the case in the best possible light, as it would if the other side were present. Rather, it is incumbent on the moving party to make a balanced presentation of the facts and law. The moving party must state its own case fairly and must inform the Court of any points of fact or law known to it which favour the other side. The duty of full and frank disclosure is required to mitigate the obvious risk of injustice inherent in any situation where a Judge is asked to grant an order without hearing from the other side.
28 If the party seeking ex parte relief fails to abide by this duty to make full and frank disclosure by omitting or misrepresenting material facts, the opposite party is entitled to have the injunction set aside. That is the price the Plaintiff must pay for failure to live up to the duty imposed by the law. Were it otherwise, the duty would be empty and the law would be powerless to protect the absent party. [Emphasis added.]
30Justice Sharpe also discussed the scope of the obligation to disclose all material facts. Materiality is determined objectively. He held that a party cannot be heard to say that she or he (or their lawyer) did not believe a point was relevant to the case. He adopted the following expression of the rule:
... The duty extends to placing before the court all matters which are relevant to the court's assessment of the application, and it is no answer to a complaint of non-disclosure that if the relevant matters had been placed before the court, the decision would have been the same. The test as to materiality is an objective one, and it is not for the applicant or his advisers to decide the question; hence it is no excuse for the applicant subsequently to say that he was genuinely unaware, or did not believe, that the facts were relevant or important. All matters which are relevant to the 'weighing operation' that the court has to make in deciding whether or not to grant the order must be disclosed. [Emphasis added.]
31The question then is whether the plaintiffs presented their case fairly and made full disclosure of all material facts. Did they recognize that they could not just present their own case in the best possible light, but that they were duty-bound to make a balanced presentation of both sides' cases? Did they fulfil their obligation to inform the court of all material facts known to them that favour the other side? Did they disclose all facts that the Master might consider relevant as part in her "weighing operation"?
45 Even if I conclude that the CPL was obtained without full and fair disclosure, the CPL may still be maintained. The court has a continuing discretion to act in the interests of justice having regard to the totality of the evidence.
46 In Moses, 2019 ONSC 6900, Justice Myers held:
“...on a finding being made that a plaintiff has breached the duties of full disclosure and fair disclosure, the presumptive remedy should be to set aside the order. The plaintiff should have to bear a real burden to show why it is just and equitable for the court to exercise its discretion to maintain or reissue the order on all the facts. I agree with Sharpe J. that were it otherwise, the duties would be empty and the law would be powerless to protect the absent party.”
22I find that there were two instances of material non-disclosure on the Motion.
23The first was with respect to the Plaintiff’s representations regarding the notice provided to the Defendants. In the April 3 Endorsement I stated: “The Defendants are on notice of this motion and this attendance, were short served and have not responded.” This was based on representations by Plaintiff’s counsel in email correspondence to the court on March 31 that the Motion would proceed on notice and counsel advising the court at the April 3 hearing that the Defendants had been provided with notice of the virtual hearing. However, counsel did not disclose that the only form of notice the Defendants had received was a CaseLines invitation sent to Joseph on Saturday, April 1, 2023. Although Plaintiff’s counsel uploaded an amended Motion Record, Notice of Motion and a draft order on March 31 indicating that the hearing was proceeding virtually on April 3, these materials were not served on or provided directly to the Defendants. Joseph confirms that he received the CaseLines invitation by email on Saturday, April 1, 2023 providing him with particulars for the hearing and access to the materials. However, the Plaintiff did not take any steps to advise Joseph or any of the Defendants directly after being advised by the court that the Motion would proceed by virtual hearing on April 3. When Joseph received the CaseLines invitation, he was preparing to respond to the in-writing motion.
24While I was hearing the Motion and the other matters on my list, Joseph was making inquiries with the court to determine the status of the Motion and was advised to respond in writing. Based on the Plaintiff’s representations, I was under the impression that the Defendants had received both the original and amended Motion Record, had notice of the hearing and were simply not responding or attending. The Motion proceeded in Joseph’s absence and he received the Order and the April 3 Endorsement later on April 3.
25In my view, the Plaintiff’s failure to disclose that the Defendants had only received a CaseLines invitation and had not been sent a copy of the amended Motion Record or other form of notice and that the Plaintiff had not made any attempts to contact Joseph directly constitutes a material non-disclosure which may have affected the outcome of the Motion. If there had been full disclosure, it may have resulted in an adjournment so that counsel could make direct contact with the Defendants to ensure that they had an opportunity to attend and make submissions. Joseph’s presence at the Motion would have likely avoided the Motion proceeding based on a record with incorrect material facts as set out below. The court would also not have been under the impression that the Defendants were unresponsive and/or disinterested.
26I reject the Plaintiff’s submission that it was sufficient that Joseph was sent a CaseLines invitation. Under the Rules, the Plaintiff is not entitled to rely on sending a CaseLines invitation to satisfy their notice obligations nor was it full and fair disclosure to advise the court that the Defendants had been provided with notice (albeit short notice) in these circumstances. While my conclusions would be the same if the Defendants were represented by counsel, the issues with only sending a CaseLines invitation are more pronounced where, as here, the Defendants are self-represented and unfamiliar with how to navigate the court process. It is not sufficient for the Plaintiff to send a CaseLines invitation without making any other efforts to deliver the amended Motion Record or attempt to make direct contact particularly where the Motion was proceeding urgently and on short notice.
27The failure to not fully advise the court of what efforts were actually made to provide the Defendants with notice is contrary to the caution and fairness required of a party moving on short notice for urgent relief without the participation of the opposing party. As here, in accommodating urgent matters, the court relies heavily on the moving party and full disclosure is paramount even if it might militate against or delay the moving party from obtaining the relief they seek.
28I make no finding as to whether or not this non-disclosure is sufficient, on its own, to set aside the CPL. However, I am satisfied that, together with the more substantive material non-disclosure set out below, the CPL must be discharged. I also make no finding as to whether this non-disclosure was intentional, and in fact, it may well have been inadvertent and a miscommunication of what counsel meant by “notice”. Regardless, it would not change my disposition on this motion.
29The second material non-disclosure relates to incorrect statements of fact in the Plaintiff Affidavit sworn March 29, 2023 (the “Affidavit”) and the Statement of Claim dated March 29, 2023 filed on the Motion. At paragraph 2 of the Affidavit, the Plaintiff incorrectly states: “…the Defendant Daytona Auto Centre, and the Defendant Joseph Duca, the President, an Officer and Director, of, offered to bring me to Canada to work for them.” Further, at paragraph 3 of the Affidavit, the Plaintiff states:
“…I entered into an agreement with Joseph Duca and his son the Defendant, John Duca for him to purchase the Property in his name for me, on the understanding I will be satisfying all associated costs and eventually the property would be transferred back to me [“Agreement”].”
30At paragraph 4 of the Statement of Claim, Joseph, though correctly referred to as John’s son, is again incorrectly referred to as “the President (Officer/Shareholder) and Director of Defendant Daytona”.
31There is no dispute that these statements are incorrect. Joseph is not the President of DACL and John is not his son. John is the President of DACL and Joseph is his son. Joseph is currently an employee of DACL. He has been an employee of DACL since 2018-2019 and was working at RBC at the time the Plaintiff was hired. He had no involvement in the Plaintiff’s hiring and was the Plaintiff’s co-worker at DACL. It was Joseph’s father John who hired the Plaintiff and negotiated the terms of his employment.
32The Plaintiff’s responding affidavit sworn May 5, 2023 filed on this motion does not correct these misstatements and states that he repeats and adopts the evidence set out in the Affidavit, however, it correctly identifies John as one of the controlling minds of DACL and Joseph’s father. The Plaintiff subsequently filed an affidavit sworn August 9, 2023 by Enio Zeppieri, Principal of the Law Firm representing the Plaintiff which addressed the incorrect statements:
“3. I confirm with regards to the Affidavit of Massimo Conti sworn March 29, 2023, it was established at the Cross-Examination, that through inadvertence, the Affidavit mistakenly referred to Joseph’s Duca’s father John Duca as “Joseph Duca”. I further confirm other than the foregoing, the substance/facts as set out in the Affidavit are correct.”
33As the purpose of Mr. Zeppieiri’s affidavit is to correct the Plaintiff’s evidence in the Affidavit, it should have been sworn by the Plaintiff, not his counsel. It also does not fully correct all of the incorrect information in the Affidavit and makes no reference to the misstatements in the Statement of Claim.
34The greater issue is that the court relied on the incorrect evidence and information in the Affidavit and the Statement of Claim in granting the CPL. Even accepting that the incorrect statements were made out of mistake or inadvertence (I make no finding in this regard), they were material to the consideration of the Motion. The Affidavit incorrectly states that Joseph is both the principal of DACL and the owner of the Property who entered into an oral agreement with the Plaintiff to transfer ownership of the Property to the Plaintiff. However, Joseph is not the principal of DACL, he did not hire the Plaintiff and there is no evidence that he had any discussions with the Plaintiff with respect to his employment terms and offering the Plaintiff an ownership interest in the Property. There is only a bald allegation that the agreement was made with both John and Joseph.
35The Plaintiff’s allegation that John, the principal of DACL agreed to transfer him ownership of the Property as a term of this employment and not Joseph, the owner of the Property, it is material to weighing whether there was a triable issue with respect to an interest in the Property. Specifically, it is material to considering any connection between the Plaintiff, the alleged agreement, payments and the owner of the Property to establish the trusts, including constructive and resulting trusts, being asserted by the Plaintiff (Saggi v. Grillone, 2020 ONSC 4140 at paras. 61-65). Had the court been accurately advised that John was the principal of DACL and Joseph was the owner of the Property it may have affected the outcome of the Motion and the weighing exercise to determine whether to grant the CPL particularly in the absence of a written agreement or any documentation regarding the alleged terms. I am satisfied that this is sufficient grounds on its own to discharge the CPL and especially when considered together with the material non-disclosure regarding notice. Moreover, it would be unjust, inequitable and contrary to the fair and proper administration of justice to maintain a CPL obtained with inaccurate information on an ex parte basis.
Triable Issue
36Although I have concluded that the CPL should be discharged on the basis of material non-disclosure, I also conclude that the Defendants have met their onus that there is no triable issue with respect to whether the Plaintiff’s claim to an interest in the Property.
37The court must first determine if there is a triable issue with respect to the Plaintiff’s claim to an interest in the CPL Properties which would support the granting of the CPL (Saggi at paras. 31, 55 and 67; Zhao v. 8657181, 2020 ONSC 2864 at paras. 9 and 11; G.P.I. Greenfield Pioneer Inc. at para. 20; Boal v. International Capital Management Inc., [2018] O.J. No. 1954 at para. 64). This threshold, which requires there to be a triable issue as to a reasonable interest in land and is a gateway requirement for a CPL, has been described as whether the remedy sought by the plaintiff, including a constructive or resulting trust and tracing remedies, are possible remedies at trial (Sun Rise Elephant Property Investment Corporation v. Luu, 2018 ONSC 5247 at paras. 10-12). The party opposing the CPL bears the onus to show that there is no triable issue (Boal at para. 64).
38It is not the court’s role to determine whether the plaintiff’s claim will likely succeed at trial (HarbourEdge Mortgage Investment Corp. v. Timbercreek Mortgage Investment Corp. (Trustee of), [2016] O.J. No. 265 at para. 56; Sun Rise at para. 10). In determining if there is a triable issue, the evidentiary bar is low and the court is not to assess credibility or decide disputed issues of fact (Huntjens v. Obradovic, 2019 ONSC 4343; Sunrise at para. 10; Saggi at paras. 45 and 62; Bains v. Katri, 2019 ONSC 1401 at para. 36). The court must examine the whole of the evidence and, without deciding disputed issues of fact and credibility, consider whether the plaintiff’s case constitutes a reasonable claim to the interest in land claimed in the action (Huntjens at para. 21; Boal at para. 64).
39I am satisfied that the Defendants have discharged their onus to demonstrate that there is no triable issue with respect to whether the Plaintiff has a reasonable claim to an interest in the Property. Even on the low threshold which applies, I cannot conclude on the record before me that there is a sufficient basis to establish some connection between the Plaintiff and the Property with respect to the trusts he asserts including a constructive or resulting trust (Saggi at paras. 64-65). There is no evidence before me of an agreement generally with respect to an ownership interest, including between the Plaintiff and Joseph, and only a bald allegation that there was an agreement with both John and Joseph. However, it was John, not Joseph who negotiated the Plaintiff’s employment terms which the Plaintiff alleges gave rise to his ownership interest. While the record on this point may evolve as the litigation proceeds, it is not for this court to make the findings of fact and credibility at this stage which the conclusions urged by the Plaintiff would require.
The Equities
40Even if I had concluded that there is a triable issue, a consideration of the equities also supports discharge of the CPL. If the gateway requirement of a triable issue threshold is met, the court must then consider whether it is just and equitable based on all of the circumstances to exercise its discretion to grant or maintain a CPL by considering and balancing the equities including the list of factors set out in 572383 Ontario Inc. v. Dhunna, [1987] O.J. No. 1073 (Sun Rise at para. 12; Tribecca Development Corp. v. Danieli, 2015 ONSC 7638; Huntjens at para. 48).
41In considering the equities as between the parties the court may consider the non-exhaustive list set out in Dhunna: (a) whether the plaintiff is, or is not, a shell corporation; (b) whether the land is, or is not, unique; (c) the intent of the parties in acquiring the land; (d) whether there is an alternative claim for damages; (e) the ease or difficulty of calculating damages; (f) whether damages would be a satisfactory remedy; (g) the presence or absence of another willing purchaser; and (h) the harm done to the defendant if the certificate is allowed to remain, or to the plaintiff if the certificate is removed, with or without the requirements of alternative security (Dhunna at paras. 10-18; Saggi at para. 28; Sun Rise at paras 12-17; Huntjens at para. 49; Bat-Amy v. Zribi, 2010 ONSC 1272 at paras 21-22).
42While the Plaintiff is claiming general and compensatory and/or special damages, this is not determinative as to whether damages would be a sufficient remedy especially since the Plaintiff also claims an ownership interest so that he can continue to reside at the Property. However, the greater issue in considering the equities is the manner in which the CPL was obtained, particularly the material non-disclosures. A CPL is an equitable remedy and it would be inconsistent with the exercise of this court’s equitable discretion to permit a CPL to be maintained where it was granted ex parte based on incorrect material facts. Further, the notice issue, though less of a factor, is also relevant given that it resulted in the court misunderstanding that the Defendants were not responding and the Defendants being deprived of an opportunity to attend on the Motion. I have also considered the balance of harm and convenience, in particular, the fact that the Plaintiff is facing eviction as against Joseph’s right to deal with the Property. In my view, this is more of a neutral factor when considered in the context of how the CPL was obtained and the parties will have the opportunity to assert their positions in the proceedings before the Landlord Tenant Board which I am advised are ongoing.
Disposition and Costs
43Order to go discharging the CPL.
44If the parties cannot agree on the costs of this motion they may file written costs submissions with me, not to exceed 3 pages (excluding Costs Outlines) on a timetable to be agreed upon by the parties. If the parties cannot agree on a timetable, they may schedule a telephone case conference to speak to one.
Released: November 29, 2023
Associate Justice McGraw