COURT OF APPEAL FOR ONTARIO

CITATION: Dexter Road Development Corp. v. Itkine, 2015 ONCA 81

DATE: 20150204

DOCKET: C59049 C59050

Feldman, Cronk and Hourigan JJ.A.

BETWEEN

Dexter Road Development Corp.

Applicant

(Respondent in Appeal)

and

Victor Itkine and Rina Itkina and Canadian Imperial Bank of Commerce

Respondents

(Appellant)

AND BETWEEN

Victor Itkine and Rina Itkina

Plaintiffs (Appellants)

and

Frederick Joseph Leach and Frederick Joseph Leach and Arleen Jane Podohordeski Estate Trustees of the Estate of Elsie Jane Leach, Deceased

Defendants (Respondents)

Douglas Christie, for the appellants

Howard D. Gerson, for the respondents in the Leach Proceedings

Marco Drudi, for the respondent Dexter Road Development Corp.

Heard and released orally: January 22, 2015

On appeal from the judgments of Justice Kelly P. Wright of the Superior Court of Justice, dated June 4, 2014.

ENDORSEMENT

[1] This is a consolidated appeal of two judgments following a Rule 21 motion. The appellants sought a determination that an option agreement (the “Option Agreement”) was invalid because it failed to comply with the provisions of s. 50(21) of the Planning Act, R.S.O. 1990, c.P.13 (the “Act”). The motion judge declared that the Option Agreement was valid.

[2] The underlying action arose from the sale, approximately 20 years ago, of 107 Pemberton Road, in Richmond Hill, Ontario (the “Property”). The Property represents the whole of a lot on a plan of a subdivision. The purchasers, the Montesanos, acquired the Property from Frederick and Elsie Leach and granted the Leaches an option to repurchase a portion of the Property within 21 years, less 10 days from the date of closing. The Option Agreement was conditional on compliance with the Act and the Leaches were made responsible for all costs related to the severance. The Option Agreement did not specifically reference s. 50 of the Act.

[3] The Option Agreement has been assigned twice since the original purchase. The first assignment was made to a numbered company. The second assignment was made to the respondent Dexter Road Development Corp. (“Dexter”). The appellants acquired the Property from a successor in title to the Montesanos.

[4] The appellants brought a motion pursuant to rule 21.01 for a determination that the Option Agreement did not comply with the Act because it failed to expressly refer to s. 50 of the Act, as they say was required by s. 50(21). The Leaches brought a cross-motion for summary judgment pursuant to Rule 20, seeking to validate the Option Agreement. Dexter commenced an application seeking the same relief.

[5] The motion judge held that the Option Agreement is compliant with the Act and that the respondents have a valid and enforceable interest in the Property.

[6] The appellants advanced two principal arguments on appeal. First, they submit that for the Option Agreement to be valid, it must refer on its face to compliance with s. 50 and not merely the Act in general. Second, the motion judge erred in relying on the Legislation Act, 2006, S.O. 2006, c. 21, in coming to her conclusion that the Option Agreement was valid.

[7] We would not give effect to either ground of appeal.

[8] We do not accept the submission that the case law supports the proposition that s. 50 must be specifically referenced. To the contrary, in our view, by making the Option Agreement conditional upon compliance with the Act, the Option Agreement satisfied the statutory requirement that there be an express condition that it would only be effective if the requirements of s. 50 were satisfied. Reference to the Act in general is sufficient to meet the obligation imposed by s. 50(21) because it is impossible to effect a severance that is in compliance with the Act, but not s. 50 of the Act.

[9] The motion judge did not improperly apply the Legislation Act 2006. She noted that the legislation was not in force at the time of the execution of the Option Agreement and, in any event, it does not apply to private contracts. The motion judge simply referred to that legislation by analogy, as she was entitled to do, in her analysis whether a general reference to the Act constitutes a reference to the provisions of the Act.

[10] The appeal is, therefore, dismissed with costs fixed in the amount of $7,500 to the Leach respondents and $4,000 to Dexter, inclusive of disbursements and HST.

“K. Feldman J.A.”

“E. A. Cronk J.A.”

“C. W. Hourigan J.A.”