COURT OF APPEAL FOR ONTARIO

CITATION: Dhatt v. Beer, 2020 ONCA 545

DATE: 20200828

DOCKET: M51719 (C68375 & C68539)

Zarnett J.A. (Motion Judge)

BETWEEN

Mandeep Dhatt and Kulwinder Dhatt

Plaintiffs

(Respondents/Responding Parties)

and

Derek Beer and Indira Beer

Defendants

(Appellants/Moving Parties)

and

Jay Brijpaul and Re/Max West Realty Inc., Brokerage

Third Parties

(Respondents/Responding Parties)

David P. Lees and Zachary Silverberg, for the moving parties

Arnie Herschorn and Sepideh K. Nassabi, for the responding parties Mandeep Dhatt and Kulwinder Dhatt

Serena L. Rosenberg, for the responding parties Jay Brijpaul and Re/Max West Realty Inc., Brokerage

Heard: August 25, 2020 by video conference

REASONS FOR DECISION

Introduction

[1] The appellants (the “Beers”) move, under r. 63.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, for a stay of the trial judgment dated May 1, 2020 and of an order made by the trial judge on July 30, 2020.

Background and Context

[2] The trial judgment declared that an Agreement of Purchase and Sale dated January 22, 2016 (the “Agreement”), between the Beers as vendors and the respondents Mandeep and Kulwinder Dhatt (the “Dhatts”) as purchasers, for the sale of 9 Valley Ridge Crescent, Brampton, Ontario (the “Property”) at a price of $835,000, was valid and binding. It awarded the Dhatts specific performance of the Agreement, gave the Beers 120 days from the date of the decision (i.e. until August 31, 2020) to vacate the Property, and dismissed a third party claim that the Beers had brought against their real estate agent and real estate brokerage, the respondents Jay Brijpaul and Re/Max West Realty Inc., Brokerage (collectively “Re/Max”). The trial judgment awarded costs of the action to the Dhatts and Re/Max, to be paid (deducted) from the purchase price.

[3] The July 30 order of the trial judge gave directions concerning the carrying out of the trial judgment. Among other things, it appointed a lawyer for the Beers with respect to the sale of the Property and gave him authority to take certain steps relating to the Beers’ obligations to complete the sale, ordered the Beers to forthwith deliver up vacant possession of the Property, and granted leave to a firm of bailiffs to secure vacant possession of the premises by August 31, 2020.

[4] The Beers have appealed from the trial judgment and the July 30 order.

[5] For the purpose of this motion, the parties did not distinguish, as to appeal routes or the applicable principles regarding a stay, between the trial judgment and the July 30 order. It was implicitly conceded that if the provisions of the trial judgment awarding specific performance and directing the Beers to vacate the Property should be stayed, the July 30 order, which provides for how those aspects of the trial judgment will be carried into force, would be stayed as well.

[6] Although the motion seeks to stay the entire trial judgment, part of the trial judgment is already subject to an automatic stay under r. 63.01, which provides:

63.01(1) The delivery of a notice of appeal from an interlocutory or final order stays, until the disposition of the appeal, any provision of the order for the payment of money, except a provision that awards support or enforces a support order.

[7] The costs awards, to the Dhatts and to Re/Max, are provisions of the trial judgment for the payment of money. Their character does not change because, in the case of the Dhatts, the costs were ordered to be deducted from the purchase price they must pay on the completion of the sale and, in the case of Re/Max, the costs were ordered to be paid out of the purchase price: M & M Homes Inc. v. 2088556 Ontario Inc., 2020 ONCA 134, at paras. 21-23.

[8] Accordingly, the focus of the stay motion is, instead, on the provisions of the trial judgment and July 30 order that are not subject to the automatic stay, primarily those that provide for ownership of the Property to be transferred to the Dhatts in return for payment of the purchase price and require the Beers to permanently vacate the Property.

[9] The trial judgment was given after a trial from which the Beers were largely absent. In her reasons for judgment, the trial judge described how this occurred:

[4] This action has had a long history prior to reaching trial, with adjournments sought by the defendants, who for much of the recent past have not been represented by a lawyer, after their lawyer removed himself from the record.

[5] At the commencement of the trial, the defendants, Derek Beer and Indira Beer, had retained counsel solely for the limited purpose of seeking an adjournment. That counsel was not retained to represent them at the trial itself. I did not grant the adjournment for the reasons given in my Endorsement of March 2, 2020.

[6] On Tuesday, March 3, the trial commenced. At the commencement of trial, Mrs. Beer indicated that she sought an adjournment because she had a lengthy medical appointment, a stress test, on March 4. She further indicated that if necessary she would have it rescheduled. I indicated to her that she could attend her medical appointment in the morning, as scheduled and her husband could attend the trial on behalf of both of them. She could join the trial in the afternoon. Alternatively, she could reschedule her appointment. She chose to attend her appointment. She indicated that she would attend the appointment on Wednesday and attend Court on Thursday. Her husband would attend for them both on Wednesday.

[7] The trial commenced. While the plaintiff was giving opening submissions, Mrs. Beer began to hyperventilate. She was invited to go to the back of the courtroom, to relax and to take a glass of water. She subsequently began to moan and wail loudly and was taken into the hall to calm down. While in the hallway, she apparently requested an ambulance and demanded of her husband that he attend at hospital with her. Neither party returned that day. Mr. Beer was contacted and told that he was to attend at Court for the trial the following day, March 4, and that the trial would proceed with or without him. He indicated that he would be in Court. My decision as regards the incident of March 3 is found in my written Endorsement of that date.

[8] On March 4, the trial office received the Admission and Discharge notes and records from the hospital, but no doctors’ report indicating the defendants’ diagnoses, prognoses or that the defendants, or either of them, were unable to attend their trial due to medical reasons and the reasons therefor. The defendants were advised that the trial would proceed with or without them on the following day.

[9] On March 5, Mrs. Beer attended at trial, again seeking an adjournment. She stated that she did not want her husband to attend at trial, as she did not trust him with the house, and stated that she could not stay. I denied the request for an adjournment for reasons given in my oral Endorsement, and indicated that the trial would proceed with or without the defendants.

[10] The defendant, Mrs. Beer left the Court and the defendants failed to attend the trial further. The trial proceeded without them.

[10] Based on the evidence she heard, the trial judge found that the Agreement, was valid and binding. She referred to evidence read-in from the Beers’ examinations for discovery that Mrs. Beer understood, when she signed the Agreement, that it was a valid and binding agreement, and that she had signed the Agreement as seller and Mr. Beer had signed as spouse giving consent.

[11] The trial judge noted that when the Beers refused to close the Agreement, the Dhatts, who had sold their home in reliance on this transaction and had intended to move into the Property, first rented alternative premises and then purchased a different home, incurring damages which she assessed at $510,410.97.

[12] Nonetheless, the trial judge awarded specific performance to the Dhatts, finding that the Property was unique, with features to which the Dhatts ascribed particular significance, making it especially suitable for their proposed use. She held that damages would not be an adequate remedy, given the uniqueness of the property for the Dhatts, and given that the Beers could not pay a damages award. In the latter regard, she stated:

The evidence indicates that the defendants were selling 9 Valley Ridge Crescent in order to pay off debts. Mrs. Beer indicated that she cannot work. Her husband’s salary is being garnished. The Read-ins from the Beers’ Examinations for Discovery, which were conducted when they still had a lawyer, indicated that they wanted to sell the property to clear off debts. There are numerous writs and executions filed against them pursuant to the evidence of Mr. Rogers regarding the stay of proceedings application. Mrs. Beer indicated that they could not afford a lawyer.

[13] The Beers had brought third party proceedings against Re/Max, alleging collusion with the Dhatts. As they failed to attend trial to prove that claim, and as the evidence in the main action did not show any collusion, the trial judge dismissed the third party claim.

[14] The Beers filed a notice of appeal from the trial judgment on June 5, 2020. They retained their current counsel after the July 30 order was made, and filed a notice of appeal from it on August 12, 2020. Counsel for the Beers advised during argument of the motion that the transcripts were ordered on August 19, 2020.

The Test for a Stay

[15] The overarching consideration in whether to grant an application for a stay pending appeal is whether doing so is in the interests of justice. Three factors are considered: (1) whether, on a preliminary assessment, the appeal raises a serious question, recognizing that this is a “low threshold”; (2) whether the applicant would suffer irreparable harm if the application were refused; and (3) the balance of convenience, namely which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits. The factors are not watertight; the strength of one may compensate for weakness on another: Zafar v. Saiyid, 2017 ONCA 919, at paras. 17-19.

Application of the Test

[16] In my view, the interests of justice do not favour granting a stay.

[17] On the merits, the main focus of the appeal is on the trial judge’s refusal to adjourn the trial. Counsel for the Beers submitted that the trial judge paid insufficient attention to the fact that this would be a first adjournment of the trial, and that the Beers were self-represented litigants who were not appropriately guided by the trial judge as to what medical information would be needed to obtain an adjournment.

[18] A trial judge enjoys a wide discretion as to whether to grant an adjournment of a civil trial, a discretion that is to be exercised judiciously, taking into account relevant factors: Khimji v. Dhanani (2004), 2004 CanLII 12037 (ON CA), 69 O.R. (3d) 790 (C.A.), per Laskin J.A. (dissenting, but not on this point). On appeal that exercise of discretion is reviewed on a deferential standard. Moreover, findings of fact are subject to a deferential standard of review on appeal.

[19] The trial judge considered the fact that the trial date had been set for over a year, that delays had already occurred in the action, and that the Beers had not followed prior judicial advice to retain counsel for the trial, in rejecting the request for an adjournment of the trial date to allow further time to retain a lawyer. In rejecting the request for an adjournment based on medical reasons, the trial judge considered the medical evidence that was put forward and made findings of fact as to what it did and did not show.

[20] On a preliminary basis, therefore, while accepting that the appeal does not fall below the low merits threshold, it cannot be considered as having the strength necessary to overcome the weakness on the irreparable harm and balance of convenience factors. The appellants’ case for a stay is weak on both of those factors.

[21] The Beers submitted that there were two types of irreparable harm that they would suffer if the stay were refused.

[22] First, they say that the way the trial judge structured the costs awards – as being recoverable from the purchase price – means that when the sale to the Dhatts is completed before the appeal is heard, the Dhatts and Re/Max will receive their costs and no recourse will be available if the appeal is allowed.

[23] I reject that argument. As I have noted, the costs awards are automatically stayed and may not be enforced, pending the disposition of the appeal. The respondents have not sought a lifting of the automatic stay. Therefore, the Beers are already protected from this form of harm.

[24] Second, they say that if the stay is not granted, the Dhatts, after ownership has been transferred to them, may sell the Property, “which would potentially render any successful appeal moot, because the Property would now be owned by a third party”.

[25] I reject that argument based on the undertaking given to the court, by the Dhatts through their counsel, that they “will not deal with the property pending disposition of the appeal”. The right to effective relief as a result of a successful appeal will not be lost, as the Property will remain in the ownership of parties who are before the court.

[26] Turning to the balance of convenience, the Beers argue that if the stay is not granted they will incur “transaction costs” in having to move out of the Property and in finding another place to live, and then, if the appeal is allowed, in moving back into the Property. In the interim they will be without their home during the COVID-19 pandemic.

[27] No estimate of the “transaction costs” was provided. I agree that there would be inconvenience to the Beers in this scenario, but the inconvenience would be temporary, and the length of it is, in some measure, within the power of the Beers to minimize, in that they are free to take steps to expedite the perfection of their appeal, and thus advance the potential hearing date of the appeal.

[28] More importantly, the inconvenience of moving out and finding alternate accommodations flows directly from the result of the trial, which on a motion for a stay pending appeal is to be treated as prima facie correct: Circuit World Corp. v. Lesperance (1997), 1997 CanLII 1385 (ON CA), 33 O.R. (3d) 674 (C.A.), at para. 13. The Beers were aware of that result from the time of the trial judge’s decision of May 1, 2020 and have had the opportunity to plan accordingly.

[29] On the other hand, granting the stay would delay the Dhatts in obtaining ownership of a property the trial judge found to be uniquely suited to their purposes. The evidence discloses that the Dhatts have arranged financing to close the purchase conditioned on the closing occurring on August 31, 2020. There is no evidence about whether or not the financing commitment could be extended to a new closing date if a stay were granted and the appeal ultimately dismissed; that new date would be uncertain given that the appeal is at a very early stage. As noted, although the trial judgment is dated May 1, 2020, the transcripts were only ordered on August 19, 2020. The Beers offer their undertaking to be responsible for any damages caused by the stay, but the trial judge noted that they have other creditors.

[30] In my view the balance of convenience does not favour the granting of a stay.

Conclusion

[31] For these reasons, upon the undertaking of the Dhatts through their counsel not to deal with the Property pending the disposition of the appeal, the motion to stay those portions of the trial judgment and the July 30 order that are not subject to the automatic stay as set out above, is dismissed.

[32] The parties may make written submissions on the costs of the motion, limited to two pages each. The respondents’ submissions shall be delivered within ten days of the date of these reasons. The submissions of the Beers shall be delivered within five days thereafter.

“B. Zarnett J.A.”