COURT FILE NO.: CV-20-04-00 DATE: April 16, 2024
ONTARIO SUPERIOR COURT OF JUSTICE
B E T W E E N:
CAVASINNI, Claudio Applicant
P. Kuye, for the Applicant Email: phil@kuyelaw.com
- and -
CAVASINNI, Nazzareno, CAVASINNI, Maria, Respondents
S. Toole, for the Respondents Email: stoole@lddclawyers.com
HEARD: April 10, 2024
REASONS ON APPLICATION
MANDHANE J.
1On April 29, 2005, the Respondents, a couple, bought a residential property at 2594 Privet Court in Mississauga (“the Property”). They made a downpayment of $100,000 and financed the remainder through a mortgage registered on title. As of now, the Respondents are the registered owners of the Property but have never lived in it.
2The Applicant is the Respondent’s adult son. He moved into the Property in May 2005 when he was 38 years old and continues to live there with his family today. He says that the Respondents promised to transfer title to him if he made the monthly mortgage payments and repaid the $100,000 down-payment. The Applicant says that the Respondents never set a deadline for him to transfer the $100,000, so long as he continued to pay the mortgage. He said he tried to finalize the deal a number of times over the years but that the Respondents blew him off. He notes that he was paying the Respondents an amount roughly equal to what they pay for the mortgage and property taxes, while also paying for utilities and occupier’s insurance. He believes that the Respondents’ promise to transfer title to him remains in full force and effect. He asks me to award him a fifty percent beneficial interest in the Property.
3The Respondents admit that they entered into the oral agreement with the Applicant in 2005 but say that the agreement “expired” in 2007. As of 2007, the Applicant was unable to fulfill the terms of the agreement and the transfer of title never took place. They say that the Applicant has never paid them the $100,000, and that they have treated the Property as owners would. On September 3, 2019, the Respondents sent the Applicant a letter advising him that that they would be listing the Property for sale and offering to sell it to him for fair market value.
4The Applicant now brings this Application claiming a beneficial interest in the Property pursuant to the equitable doctrines of proprietary estoppel and unjust enrichment.
5The Respondents ask me to dismiss the Application and lift the Certificate of Pending Litigation on the Property so that they can sell it. They say that the Applicant was nothing more than a long-term tenant. They also rely on the Statute of Frauds, R.S.O. 1990, c. S.19, and the Limitations Act, 2002, S.O. 2002, c. 24, which they say act as a bar to the relief the Applicant seeks.
ISSUES
6What is my jurisdiction on an application under Rule 14 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194?
7Has the Applicant established that the doctrine of proprietary estoppel applies to the facts of this case such that he has a beneficial interest in the Property?
8Has the Applicant established that the Respondents have been unjustly enriched by his payments towards the Property?
9Are there any statutory bars to the claim?
10What is the appropriate remedy?
SHORT CONCLUSION
11The Applicant has not proven proprietary estoppel or unjust enrichment on a balance of probabilities. The Applicant was a tenant with no beneficial interest in the Property. The Application is dismissed, and the Certificate of Pending Litigation is lifted effective immediately.
ANALYSIS
What is my jurisdiction on an application under Rule 14?
12Rule 14.05(3)(e) states that a proceeding may be commenced by way of an application if the relief claimed is for “the declaration of an interest in or charge on land, including the nature and extent of the interest…” Here, the claim is for a declaration of an interest in law based on the operation of the equitable doctrines of proprietary estoppel and unjust enrichment (rather than through operation of a written contract, for example).
13It is well-established that an application should generally be used as the originating process when there are no factual matters that require the court to engage in findings of credibility: Chilian v. Augdome Corp (1991), 2 O.R. (3d) 696 (C.A.). Rule 38.10 states that, on hearing an application, I may grant the relief sought, dismiss the application, or “order that the whole application or any issue proceed to trial.” However, an application is not converted to an action simply because there is a factual dispute; rather, the factual dispute must be materials to the issues to be determined and be such that the dispute cannot be fairly resolved by affidavits and cross-examinations on affidavits: Yen Pin v. Wang, 2019 ONSC 1497, ref’ing to Metropolitan Toronto Condominium Corp. No. 747 v. Korolekh, 2010 ONSC 4448, 95 R.P.R. (4th) 198, at paras. 54-57.
14In Rubner v. Bistricer, 2018 ONSC 1934 (reversed on other grounds at 2019 ONCA 733), Myers J. found that it was appropriate for a judge hearing an application to apply their advanced fact-finding powers as set out in Rule 20 and confirmed in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87. If the materials permit the court to resolve factual disputes in issue under Hryniak, then the court should dispose of the issues in a summary fashion without a trial of the issues: Rubner, at paras. 104-108.
15In accordance with Hryniak, the judge should first determine if there is a genuine issue requiring a trial based only on the evidence before them, without using their enhanced fact-finding powers: at para. 66. In so doing, the court will assume that all necessary evidence has been tendered as parties are expected to put their best foot forward. A motion judge is entitled to presume that the evidentiary record is complete and there will be nothing further if the issue were to go to trial: Broadgrain Commodities Inc. v. Continental Casualty Company, 2018 ONCA 438, at para. 7.
16Next, if there appears to be a genuine issue requiring a trial, the judge should determine if the need for a trial can be avoided by using the new fact-finding powers under Rule 20.04(2.1) and (2.2). These rules allow me to weigh the evidence, evaluate the credibility of a deponent, and draw reasonable inferences from the evidence “unless it is in the interest of justice for such powers to be exercised only at trial.” These powers may be used as long as it is not against the interest of justice. Their use will not be against the interest of justice if their use leads to a fair and just result and serves the goals of timeliness, affordability, and proportionality in light of the litigation as a whole: Hryniak, at para. 66. A motion judge is not required to resort to the summary judgment enhanced powers to remedy a party’s evidentiary shortcomings: Broadgrain, at para. 7.
17As will be discussed below, I find that the record before me is sufficient to resolve the key factual dispute before me.
Has the Applicant established that the doctrine of proprietary estoppel applies?
18The parties agree that the Applicant must establish the following on a balance of probabilities to be entitled to a remedy under the equitable doctrine of proprietary estoppel: (1) a representation or assurance on the basis of which the claimant expects to enjoy a right or benefit over property; (2) reasonable reliance on that expectation; and (3) detriment as a result of that reliance: Cowper-Smith v. Morgan, 2017 SCC 61, 2 S.C.R. 754, at para. 15.
19Here, the parties agree that, as of 2006, they had an oral agreement that the Applicant would acquire the Respondents’ interest in the property if he made the mortgage payments and repaid the $100,000 deposit—though the exact terms are in dispute. They also agree that the Applicant remitted cash to the Respondents in an amount roughly equal to the mortgage and applicable property taxes.
20In his Affidavit, Applicant does not refer to the parties’ oral agreement being time-limited in any way. When asked in cross-examination whether there was a particular date by which he needed to reimburse his father for the downpayment, the Applicant said that “there was no date set to that” and accused his father of fabricating his evidence in that regard.
21The Applicant’s affidavit states that he offered to pay the Respondents $100,000 in 2007, but the Respondents did not want to do the deal at that time because they did not want to incur pre-payment penalties on the mortgage. In cross-examination, the Applicant could not remember exactly when he first approached the Respondents to complete the deal but maintained that “every time I approached them [to reimburse the down payment], there was a song and dance regarding what had to be done.” When asked to describe the various excuses the Respondents provided for refusing to do the deal over the course of 17 years, the Applicant testified that the Respondents would simply tell him that “the mortgage was just renewed,” or “it’s not the time,” or “I have three children, not just one.” He said that these conversations took place at the Property, at the Respondent’s residence, and at coffee shops like Tim Hortons. He said that he approached his parents some 15 times to finalize the deal but that the Respondents continued to offer him various excuses to delay.
22The Applicant’s brother, Fernando, states in his affidavit that he heard his father “give various reasons to my brother [the Applicant] for the delay in the transfer.” Because Fernando’s affidavit is devoid of particulars and Fernando was not cross-examined, I cannot give it much weight.
23The first Respondent, Nazzareno Cavasinni, also swore an affidavit outlining his understanding of the oral agreement. He states that, in or around the Spring of 2006, the Respondents offered to transfer the Property to the Respondent if the Respondent assumed the mortgage and repaid the $100,000 downpayment on or before May 2007. Nazzareno stated that the May 2007 deadline came and went without the Applicant ever repaying the $100,000 downpayment, while continuing to live in the Property. He says that the Applicant refused to signed tenancy agreements that were presented to him in 2005 and 2014 He says that the matter of the Applicant purchasing the Property never came up again, and that the Applicant continued to pay his rent in cash, and only claimed a beneficial interest in the property after he learned that it was going to be sold. Under cross-examination, Nazzareno testified that the Applicant never approached him with $100,000 to finalize the deal, whether in 2007 or at any other time.
24The second Respondent, Maria Cavasinni, also swore an affidavit wherein she states that the facts set out in Nazzareno’s affidavit are “true.” Again, she was not cross-examined, and her bald assertion adds little to the evidentiary record.
25Determining the precise terms of the oral agreement between the parties requires a credibility assessment. Both parties argued the issue of credibility at length before me. They encouraged me to weigh the evidence, evaluate the credibility of each deponent, and draw reasonable inferences from the evidence.
26In my view, the Applicant was not a credible witness. His affidavit evidence was completely devoid of particulars and was conclusory. During his cross-examination, he was unable to provide any particulars regarding where key conversations took place, who was present, or what specifically was said and by whom. While the Applicant points to the fact that he made repairs to the home as powerful indicia of his beneficial interest, the supporting evidence is scant. The Applicant offers a table summarizing the $30,000 he says he has paid in cash to people he knew from the construction industry to do work on the Property. There are no receipts, photographs or contemporary record keeping regarding these improvements. In cross-examination, the Applicant said that he came up with the values in the table from memory. In his cross-examination, Nazzareno could not confirm or deny whether such repairs were made because the Applicant has never given him access to the Property and would not give him a key.
27On the whole, I prefer Nazzareno’s evidence over the Applicant’s. I find that the terms of the parties’ oral agreement required the Applicant to continue to pay monthly rent, to pay the Respondents $100,000 on or before May 2007, and to assume the mortgage obligation upon closing of the transaction. I accept that the Applicant never fulfilled his side of the bargain because he did not pay the Respondents $100,000 before May 2007. I specifically reject the Applicant’s evidence that he approached the Respondents in 2007 to finalize the deal. The Applicant admitted that he has never made a serious effort to obtain financing and that he never had the $100,000 “in hand.”
28Nazzareno’s evidence makes the most sense in light of the Respondents’ relationship with and knowledge of the Applicant, past experiences as property owners, knowledge of the real estate market and real estate transactions, and their interest in making a return on their investment. Given their sophistication and knowledge, it is highly unlikely that the Respondents would have made a real estate deal that required them to sell an appreciating asset for $100,000 at any time in the future and at the buyer’s sole discretion, It makes more sense that the Respondents made a time-limited and favourable offer that would have allowed their adult son to enter the real estate market despite his poor credit. This is precisely what they said they did.
29Nazzareno’s evidence was also consistent with the reliable business records before me. The Respondents declared rental income on their taxes roughly equal to the Applicant’s cash payments from 2008 onwards, paid for a new roof on the Property in April 2019, carried homeowners’ insurance, paid the mortgage and property taxes, and took out an additional mortgage on the Property in 2015. Contrary to his claims of ownership, the Applicant’s own evidence is consistent with him being a longstanding tenant who paid rent that was roughly equal to the carrying costs of the Property. The Applicant admitted that he never saw a mortgage statement or property tax bill, did not know the exact amount that was being paid, and that he just paid what his father asked. He admitted that he held occupier’s insurance, and that the allowed Nazzareno to do work on the Property.
30Finally, this case is distinguishable from Warraich v. Choudhry, 2019 ONSC 2656 at paras. 82-88. In that case, Sossin J. (as he then was) found that being a tenant and a beneficial owner were not mutually exclusive. Sossin J. found that the plaintiff was a tenant who paid rent to live in the property, while also being an investor in the property who made improvements to it pursuant to the parties’ oral agreement. Here, the Applicant and Respondents were never involved in a joint business venture: see also Pimenta v. Jaggernauth, 2021 ONSC 6810 at para. 52-54.
31Overall, the Applicant has not established on a balance of probabilities that the Respondents represented to him, or assured him, that he would enjoy a right or benefit over the Property. Any promise has long-since elapsed because of the Applicant’s failure to uphold his end of the deal by paying the Respondents $100,000 by May 2007. For these reasons, the Applicant’s claim for promissory estoppel must fail.
Were the Respondents unjustly enriched?
32The test for unjust enrichment is whether: (1) there was an enrichment of the Defendants; (2) a corresponding deprivation to the Plaintiffs; and (3) no juristic reason for the benefit and corresponding detriment: Moore v. Sweet, 2018 SCC 52, [2018] 3 S.C.R. 303, at paras. 35 to 59, 63, and 83; Kerr v. Baranow, 2011 SCC 10, [2011] 1 S.C.R. 269, at paras. 30-31.
33Having found that the Applicant was always a tenant, I find that there has been no unjust enrichment to the Respondents. The Applicant was not deprived of anything because he received the benefit of living in a detached, single-family home for a reasonable rent for nearly twenty years, without the financial, legal, or other obligations of home ownership. The Respondents were entitled to the Applicant’s rent because they were the legal owners who bore all the risks related to the Property. The Respondents were not unjustly enriched.
Is there a statutory bar to the claim?
34Given my findings above, I need not go on to consider whether there is a statutory bar to the claim.
What is the appropriate remedy?
35The Application is dismissed. The Certificate of Pending Litigation shall be removed from title effectively immediately.
36The Respondents are prima facie entitled to costs on a partial indemnity basis. The parties shall try to agree on the matter of costs, and on the terms of a final order. If they are unable to agree on or before April 26, 2023, the parties shall contact the trial office to book an appearance before me at 9:00 a.m. for 30 minutes. Seven days in advance of the return date, they shall serve and file their draft orders, bill of costs and any formal offers to settle that were exchanged.
MANDHANE J. Released: April 16, 2024