CITATION: Bassi v. Chowdhry, 2016 ONSC 691
COURT FILE NO.: CV-15-2770-00
DATE: 2016 02 01
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Harjinder Bassi and Parmjit Bassi v. Paul Virinder Chowdhry, Nirmal Chowdhry, Sonia Chowdhry and Hope Marion Chowdhry also known as Hope Chowdhry-Bhagrath
BEFORE: Lemon J.
COUNSEL: Y. S. Chhina, Counsel for Plaintiffs
H. Rosenberg, Counsel for Defendants
HEARD: December 23, 2015
E N D O R S E M E N T
The Issue
[1] The defendants move to set aside three certificates of pending litigation registered against their properties on an ex-parte basis. They also seek to dismiss an injunction that was obtained by the plaintiffs on an ex-parte motion. The defendants seek an order with respect to $50,000 provided by the plaintiffs for the purchase of one of the properties in question. Finally, they seek an order ejecting the plaintiffs from the property in which the plaintiffs reside.
[2] On June 16, 2015, Justice LeMay granted an ex-parte order against the defendants for a certificate of pending litigation on the three properties in issue. Justice LeMay also granted an order enjoining the defendants from taking possession of, or evicting the plaintiffs from, one of the pieces of property.
Plaintiff's Materials
[3] As is often the case in ex-parte motions, Justice LeMay did not have both sides of the evidence. The chronology as set out in the plaintiffs' material was as follows:
[4] On December 18, 2003, the plaintiff, Harjinder Bassi, purchased the property at 25 Flower Trail, in the city of Brampton, for approximately $360,000.
[5] On August 30, 2005, both plaintiffs purchased a property at 4 Flower Trail, in the city of Brampton, for approximately $315,000. Parmjit Bassi is Mr. Bassi's wife.
[6] On October 6, 2005, the plaintiffs purchased 60 Huntspoint Drive, in the city of Brampton, for approximately $427,000. They did and still do reside in that property.
[7] On April 5, 2012, the Huntspoint Drive property was transferred to the defendants Paul Virinder Chowdhry and Nirmal Chowdhry. It was and remains the position of the plaintiffs that this property was transferred in trust to those defendants.
[8] On April 16, 2012, 4 Flower Trail was transferred to the defendants Paul Virinder Chowdhry and Sonia Chowdhry for $2.00. It is the position of the plaintiffs that it too was transferred in trust.
[9] Also on April 16, 2012, Harjinder Bassi transferred 25 Flower Trail to Paul Virinder Chowdhry and Hope Marion Chowdhry-Bhagrath for $2.00. It is the position of the plaintiffs that it too was transferred in trust.
[10] All of the defendants are related to Mr. Charanjit Bassi. Charanjit Bassi was a close friend and business partner to the plaintiff, Harjinder Bassi. It is Harjinder Bassi's position that Charanjit Bassi wished him to return to India to consider some business possibilities. Harjinder Bassi deposed that pursuant to terms of a verbal understanding between him and Charanjit Bassi (in the presence of the defendant, Paul Virinder Chowdhry), the plaintiffs would transfer the three properties in trust to the defendants. Those defendants would then service the mortgages on the three properties, including 60 Huntspoint. While Harjinder Bassi was in India, Parmjit Bassi would continue to reside at the 60 Huntspoint property. Harjinder Bassi would inspect a project undertaken by Charanjit Bassi in India; if he was interested in a 50 per cent share in the project, he would accept it in exchange for the properties in Ontario. If he did not agree, the properties would be returned to him upon his return.
[11] Harjinder Bassi spent time in India from July 18, 2012 to December of 2013. While he was there, he continued to pay all of the utility expenses on the Huntspoint property. Harjinder Bassi did not agree to continue with the business in India and therefore requested that the properties be returned to him. Charanjit Bassi, however, passed away in March of 2014 before the transaction could be completed.
[12] The surviving defendants initially refused to transfer the properties back to Harjinder Bassi. Eventually, however, they agreed that all of the properties would be returned to the plaintiffs for the purchase price of $700,000. Although the plaintiffs provided a $50,000 deposit toward that purchase, the transaction did not close. One of the reasons that it failed to close was that the Agreement of Purchase and Sale only referred to the Huntspoint property and not to the other two properties.
[13] When there was no further agreement with respect to the properties, in June of 2015, the defendants served a Notice of Trespass on the plaintiffs with respect to the Huntspoint property.
[14] At the time of the first hearing of the motion before LeMay J., it was the position of the plaintiff that all three of the properties were theirs and should be transferred back to them. Without such an order, they were at risk of being evicted from the property of which they were the true owners.
Defendants' Materials
[15] Upon being served with the materials, the defendants were able to set out the information that the plaintiffs had not provided to Justice LeMay:
Prior to the transfers of the properties to the defendants in April 2012, the plaintiffs were in arrears on their mortgages and had been served with notices of Powers of Sale.
Both parties had lawyers with respect to the properties transferred in April of 2012. Although no Agreements of Purchase and Sale were signed, there were Acknowledgements and Consents signed. Those documents confirm that the consideration was for $2.00 along with the various defendants assuming the mortgages. The mortgages on the three properties were just less than $1,200,000 in total.
The first Notice of Trespass was dated May 3, 2015 which was before the proposed sale of Huntspoint for $700,000.
Although the Agreement of Purchase and Sale with respect to Huntspoint was for $700,000, the plaintiffs were not in funds on the date of closing.
Paul Chowdhry has been paying the mortgage on the Huntspoint property at approximately $1,200 per month. He also pays the realty taxes and the property insurance on that property. He continues to pay these fees despite the fact that the plaintiffs reside in that property.
There is nothing in writing that supports a trust relationship; rather, the documents all support a transfer of legal title.
Plaintiffs' Reply
[16] Harjinder Bassi's affidavit, among other things, sets out the following in response to the defendants affidavits:
I have been advised by Counsel and do verily believe:
a) that we are not legally liable to pay the defendants $700,000.00 or any other sums of monies for the return of our three properties the subject matter of this action;
b) the defendants will be unjustly enriched if we pay them monies to re-acquire our properties since they were in occupation of the two Flower Trail properties for which they paid nothing; and
c) the ex parte order obtained by me on June 16, 2015 was properly obtained.
[17] Further, in his cross-examination, Harjinder Bassi made the following statement in answer to defendants' counsel, Mr. Rosenberg's question:
Q. MR. ROSENBERG: Neither you nor your wife have since April 5th 2012 paid any money to Mr. Chowdhry or Nirmal Chowdhry for the use or occupation of the house at 60 Hunts Point?
A. It was mine why I should be paying for that, I just wanted to have it back.
Positions of the Parties
[18] The plaintiffs state that in exchange for Harjinder Bassi's services rendered to Charanjit Bassi in India, the defendants made the mortgage payments on Huntspoint where his wife resided alone until his return from India, where they both continued to reside.
[19] Pursuant to the terms of the Trust Agreement, the plaintiffs have complied with their part performance of the Agreement. There is, therefore, no need for written documents, pursuant to the Statute of Frauds R.S.O. 1990, c. S.19. If they are evicted from the property, they will suffer irreparable harm.
[20] In response, the defendants submit that the alleged trust is inconsistent with any of the documents that had been provided. In any event, the plaintiffs' failure to provide those documents to Justice LeMay is such a breach of the obligation of full disclosure that neither order should stand.
[21] The defendants further submit that because the plaintiffs failed to complete the 2015 Agreement of Purchase and Sale, their $50,000 deposit should be forfeited and they should be evicted from the Huntspoint property.
Analysis
[22] The plaintiffs' failure to disclose, as set out above by the defendants, is, indeed, shocking. Counsel for the plaintiffs, in argument, suggested that perhaps it was time for the plaintiffs to pay on the mortgage on the Huntspoint property. But that is contrary to the evidence put forward by the plaintiffs. It is the position of the plaintiffs that, despite the defendants taking over more than a million dollars in mortgage financing, the properties should be transferred back to them free of those mortgages.
[23] Regardless of the plaintiffs' belief in the strength of that argument, the documents directly opposed to that argument should have been provided to Justice LeMay. Failure to make full and fair disclosure of all material facts is in itself sufficient grounds to set aside an order obtained on an ex-parte basis. See Petersen v. Petersen, 2010 ONSC 2525, Regalcraft Homes v. Salvadori, 2014 ONSC 6990 [2014] O.J. No. 5972, and Rule 39.01(6) of the Rules of Civil Procedure, RRO 1990, Reg. 194.
[24] On that basis, the certificate of pending litigation is discharged.
[25] While the injunction order can also be discharged for that reason, I can also consider the three part test applicable to injunctions.
[26] The plaintiffs' submit the following in their factum:
In furtherance of their trust agreement the plaintiffs and the defendants signed documents in all three transactions titled "acknowledgement and consent" where the terms of the trust agreement is clearly stated that the consideration for the transfers was $2.00 and the assumption of the existing mortgage.
[27] That may be the position in the factum, but as set out above, the position of the plaintiffs, on the evidence, is that no money is to be paid to the plaintiffs upon the transfer of the property. For some unidentified reason, the defendants were to take over the mortgages despite transferring the property back to the plaintiffs. I do not find that the trust argument is a serious question to be tried.
[28] The plaintiffs submit that they will suffer irreparable harm if they are evicted from their property. Other than utilities, they have not been paying for the home in which they reside since, apparently, July of 2012. Their eviction from the property will not be the cause of irreparable harm; rather, it will bring an end to an unexplained benefit.
[29] Finally, with respect to the balance of convenience, I see no basis why the defendants should continue to pay for the mortgage on the plaintiffs' residence.
[30] The injunction is therefore dismissed.
[31] If the defendants wish to evict the plaintiffs, they should do so on further evidence. I am not satisfied that such an order should be made on these materials. I am hopeful that, in view of the plaintiffs' counsel's submission that the mortgage should now be paid by the plaintiffs, the parties can resolve that issue on an interim basis without the need for a further order.
[32] The defendants' request to return the plaintiffs' $50,000 deposit is effectively a motion for summary judgment. I am not prepared to grant that order on these materials. At the request of the defendants' counsel and the real estate solicitor holding the funds, I am satisfied that those funds should be paid into court pending further order of this court.
Costs
[33] If the parties cannot agree on costs, written submissions may be made to me. The defendants shall make their submissions within the next 15 days and the plaintiffs shall respond within 15 days thereafter. Each submission shall be no more than three pages not including any bills of costs or offers to settle.
Lemon J.
DATE: February 1, 2016
CITATION: Bassi v. Chowdhry, 2016 ONSC 691
COURT FILE NO.: CV-15-2770-00
DATE: 2016 02 01
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Harjinder Bassi and Parmjit Bassi v. Paul Virinder Chowdhry, Nirmal Chowdhry, Sonia Chowdhry and Hope Marion Chowdhry also known as Hope Chowdhry-Bhagrath
BEFORE: Lemon J.
COUNSEL: Y. S. Chhina, Counsel for Plaintiffs
H. Rosenberg, Counsel for the Defendants
ENDORSEMENT
Lemon J.
DATE: February 1, 2016