Ontario Superior Court of Justice - Divisional Court
CITATION: Thompson Centres Inc. v. Hyde Park 1980 Ltd., 2010 ONSC 1764
DIVISIONAL COURT FILE NO.: 138/10
DATE: 20100323
BETWEEN:
THOMPSON CENTRES INC.
Plaintiff
– and –
HYDE PARK 1980 LIMITED PARTNERSHIP, HYDE PARK 1980 GP INC., HYDE PARK PANATTONI, INC., WADEPAN INC., 1306910 ONTARIO LIMITED and KOFFMAN ENTERPRISES LIMITED
Defendants
Counsel:
Kevin W. Fisher, for the Plaintiff
H. Richard Bennett, for the Defendant, Hyde Park 1980 GP Inc.
Moses Muyal, for the Defendant, Koffman Enterprises Limited
HEARD at Toronto: March 23, 2010
ORAL REASONS FOR JUDGMENT
DAMBROT J. (ORALLY)
[1] The defendant, Hyde Park 1980 GP Inc. (“Hyde Park”) seeks leave to appeal a decision of Cumming J., dated January 29, 2010, in which he refused to set aside a certificate of pending litigation (“CPL”) in favour of the plaintiff in respect of certain lands owned by Hyde Park.
[2] The evidence before Cumming J. is set out in detail in his endorsement and need not be repeated. Based on the evidence, he concluded at paragraph 36:
[36] On the facts (uncontested to this point given the limited record) as I have outlined them, I am satisfied that there is sufficient evidence established in this case to demonstrate that the plaintiff has a reasonable claim to an interest in the property and has raised a triable issue in that respect, in order to justify the granting of the certificate of pending litigation on any one or more of the grounds of bad faith bargaining, unconscionable conduct and breach of fiduciary obligations asserted by the Plaintiffs. With the imposition of a constructive trust ultimately being a possible remedy, I do not think it would be just to leave Thompson to a remedy in damages in the circumstances.
[3] The primary ground upon which leave to appeal is sought is the failure of Cumming J. to adopt the defendants’ argument that as a limited partner the plaintiff is not capable as a matter of law of holding an interest in property within the ambit of s.103 of the Courts of Justice Act (“CJA”).
[4] Pursuant to s.103(6) of the CJA, the Court may make an order discharging a CPL where the party at whose instance it was issued does not have a reasonable claim to an interest in the land claimed. As a result, on an application for leave to appeal from the refusal to order the discharge of a CPL, the applicant has a formidable obstacle. The granting of an order of discharge is discretionary and is not as of right even if the prerequisites to the making of an order of discharge are established.
[5] With that in mind, I turn to the issues raised by the applicant before me. The applicant argued that Cumming J. made four errors, two of which were of particular importance. The first important error relates to the meaning of a partnership interest within the meaning of the partnership agreement entered into by the parties and the other important error relates to constructive trusts.
[6] In respect of the first alleged error, Cumming J. concluded:
It is arguable that where the GP seeks to dispose of the property, the sole substantial asset of the partnership and the development, leasing and operating of which asset is the central purpose of the partnership, that the GP is in effect seeking to dispose of each “Partner’s Economic Interest” and hence, requires the consent of the partners.
[7] In respect of the second alleged error, Cumming J. stated:
This expanded view of constructive trust could arguably extend to create an interest on the part of Thompson, given the overall nature of the relationship between the parties in this case, and given the circumstances that the property has not been offered publicly for sale by the GP so as to ensure the limited partnership receives the highest price possible in the open market. During the course of submissions, Thompson stated he was agreeable to the CPL being vacated provided the property was put up for sale for a 30 day period with Thompson and the general public at large being able to bid. The GP and Koffman were not agreeable to this suggestion. One aspect of relief sought by Thompson is the appointment of a Receiver/Manager to take over the affairs of HPLP and, if successful, a public sale would seem to be a probable result.
[8] The applicant before me argues that there is good reason to doubt the correctness of the decision of Cumming J. in respect of these two issues and that the proposed appeal involves matters of such importance that leave to appeal should be granted.
[9] There is no question that both of these conclusions are open to serious debate. Cumming J. says no more than that each of the two propositions is arguable. In respect of the second proposition he recognizes that he is hypothesizing an extension of the law with respect to constructive trusts. The first branch of the test for leave to appeal is readily met.
[10] It is on the second branch that the argument founders. The applicant argues that if left to stand the decision of Cumming J. will have serious and wide ranging ramifications. It will alter the law of limited partnership. It will allow investors to interfere with the operation of the vehicle of limited partnership, a vehicle widely used in land development in Ontario. What is raised here, he said, relates to the rights and obligations of limited partnership and their activity.
[11] This is a heavy burden to place on a judgment refusing as a matter of discretion to lift a CPL. Cumming J. made no new law. He merely said that an extension of the law to cover the circumstances of this case is arguable. If leave were granted and the appeal dismissed, the Divisional Court would likely say no more than that Cumming J. did not err in concluding that the extension of the law was arguable. If this issue is important, this may be a very inapt vehicle to settle it. In my view, the proposed appeal does not involve matters of such importance that leave to appeal should be granted.
[12] Accordingly, I refuse leave to appeal.
[13] The parties will have fifteen days to determine whether they can agree on costs, failing which they may each make brief written submissions on the issue of cost within seven days of that date.
DAMBROT J.
Date of Reasons for Judgment: March 23, 2010
Date of Release: March 31, 2010
CITATION: Thompson Centres Inc. v. Hyde Park 1980 Ltd., 2010 ONSC 1764
DIVISIONAL COURT FILE NO.: 138/10
DATE: 20100323
ONTARIO
SUPERIOR COURT OF JUSTICE
DIVISIONAL COURT
BETWEEN:
THOMPSON CENTRES INC.
Plaintiff
– and –
HYDE PARK 1980 LIMITED PARTNERSHIP, HYDE PARK 1980 GP INC., HYDE PARK PANATTONI, INC., WADEPAN INC., 1306910 ONTARIO LIMITED and KOFFMAN ENTERPRISES LIMITED
Defendants
ORAL REASONS FOR JUDGMENT
DAMBROT J.
Date of Reasons for Judgment: March 23, 2010
Date of Release: March 31, 2010