Court File and Parties
COURT FILE NO.: CV-16-5569-00 DATE: 2017 04 12
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: MIRNA NAVARRO and MARIA HERNANDEZ VILLAFANA - and – ROSA ISELA PEREZ MARTINEZ
BEFORE: LEMAY J.
COUNSEL: R. Martin, Counsel for the Plaintiff J. Macdonald, Counsel for the Respondent
ENDORSEMENT
[1] The parties are disputing the ownership of a property located at 99 Baffin Crescent in Brampton. The Plaintiffs allege that the Defendant agreed to sell the property to them. The Defendant disputes this claim.
[2] The Plaintiffs and the Defendant in this case are related. Specifically, the Defendant, Rosa Martinez, is the cousin of the Plaintiff Mirna Navarro and the niece of the Plaintiff Maria Villafana.
[3] The Plaintiffs obtained an ex-parte injunction from Wein J. on March 14th, 2017, as well as a Certificate of Pending Litigation that was registered against the property. The Defendant seeks to set these Orders aside.
[4] At the hearing of the motion and after hearing arguments from Plaintiff’s counsel, I dissolved the injunction without calling on the Defendant’s counsel. I provided brief oral reasons and advised the parties that I would set out my reasons in more detail in a written decision. I reserved my decision on the question of whether the CPL should remain registered against the property.
[5] For the reasons that follow, I am of the view that the injunction should be dissolved and lifted, and that the CPL should also be removed from the property.
Facts
a) The Alleged Agreement Between the Parties
[6] The Defendant immigrated to Canada from Mexico in 2009. She is married to a gentleman who currently lives in Montreal. The Defendant expects that her husband will be moving to Brampton.
[7] The Defendant purchased the property at 99 Baffin Crescent by way of an agreement of purchase and sale in 2014. She then had to arrange financing for the property, and used the services of a mortgage broker.
[8] As part of the mortgage, the Defendant obtained the last piece of financing from her mortgage broker at a very high rate of interest. In early 2016, she borrowed $40,000.00 from the Plaintiff Villifana to repay the loan to her mortgage broker.
[9] At the same time, the Plaintiff Navarro was looking to move back to Ontario, and wanted to live on her own rather than with her mother. As a result, an arrangement was made whereby the defendant would live at the Plaintiff Villifana’s home and pay rent of $800.00. The Plaintiff Navarro would live in a portion of the Defendant’s home and make payments of $2,000.00 per month. The Defendant viewed this as a temporary, month-to-month arrangement, pending her husband’s move to Brampton.
[10] The Plaintiff Villafana purchased appliances for 99 Baffin Crescent, and these appliances were moved into the house at the end of May, 2016, which was the same time that the Plaintiff Navarro moved into the house.
[11] The Plaintiffs allege that, in the spring of 2016, the parties entered into an agreement whereby the Defendant would sell 99 Baffin Crescent to the Plaintiffs. The only documentation that they were able to point to in this regard is a text message that reads as follows:
2016-10-15, 7:45 AM- Let: I now agree to sell it to you What I want you to understand is that business affairs need to be clear
- You were the one who made me the offer To be partners in the house I told you that I didn’t like partnerships for this specific reason. One party never agrees with the other
- I told you that I would give you 40dlls as a deposit for the purchase/sale of that house, and that when we settle the paperwork, which the bank said couldn’t happen until around this time of the year In April, the sale price for the house was around 550dlls and I offered you 540 + 5 of the appliances 545 dlls
- I told you that the equity generated by that house prior to giving you the money was for you alone. My profit or loss would be after giving you the money in April.
- I have been telling you, Isela, that you need to have show, so that when the house sells you can buy another. But I think that what you need is to put aside your conflicting emotions and use your reasoning. Understand that in business you win some and you lose some. And give thanks to God for what you were able to get from that house no matter how much or how little. Don’t get stuck on longing for or complaining about what more you could have gotten, because you could have also lost more than what you got now. So, I invite you to settle this business the same way we started it. Now you understand why I kept turning you down through all your persistence. Because partnerships and business arrangements always lead to frustration I’ve lost many friends because of the mighty lord called Money. For me, money comes and goes. It’s important but it always destroys [emoji] [emoji]
[12] The Defendant denies that there was any agreement between her and the Plaintiffs to sell the property at 99 Baffin Crescent although she agrees that there was a discussion about a potential purchase and that the Plaintiffs were interested in buying the property.
[13] In October of 2016, the Plaintiff Villafana followed up on her desire to purchase the property. The Defendant advised them that she was not interested in selling. As a result, two things happened. First, the Plaintiff Villafana removed the Defendant from her house, and refused to allow her to continue to live there. Second, the Plaintiff Navarro stopped making payments to the Defendant. Since October of 2016, the Defendant has been staying with different friends, and has no permanent accommodation.
[14] In the meantime, it became clear that the Plaintiff Navarro had signed leases with tenants for the property at 99 Baffin Crescent, and was collecting the rent on these leases.
[15] At the same time that the Plaintiff Navarro stopped paying the $2000.00 per month to the Defendant, she also stopped paying the utilities bills. Throughout the period from October of 2016 to March 14th, 2017, when Wein J. issued her Order, the Defendant paid all of the property taxes and mortgage payments. She also paid all of the utilities bills. However, the Plaintiff Navarro continued to collect the rents on the leases that she had signed.
b) The Litigation History
[16] The Defendant brought a Landlord and Tenant Board proceeding against the Plaintiff Navarro, seeking to evict her from the property. On January 16th, 2017, the Landlord and Tenant Board issued a decision evicting the Plaintiff Navarro from the property.
[17] The Plaintiff Navarro asked for a reconsideration of this decision, and the Landlord and Tenant Board determined that there was no landlord and tenant relationship between the Plaintiff Navarro and the Defendant. The Landlord and tenant board also concluded that the Plaintiff Navarro had no right to occupy the property.
[18] On March 9th, 2017, the Defendant went to the house and changed the locks, while the Plaintiff Navarro was in the process of moving the appliances that she had purchased out of the property.
[19] The Plaintiffs then commenced this action, and brought an ex-parte motion for an injunction before Wein J. That motion was heard on March 14th, 2017 and was granted. However, Wein J. directed that notice of her Order had to be given to the Defendant this matter should return to Court on April 4th, 2017.
Issues
[20] There are two issues in this case:
a) Should an injunction have been granted to the Plaintiffs in this case? b) Should a CPL be registered against the property?
Issue #1- The Injunction
[21] An injunction prohibiting the Defendant from attending the property pending the return of this motion was granted by Wein J. on March 14th, 2017. As noted by Corbett J. in Robert Half v. Jeewan (2004), 71 O.R. (3d) 650, the hearing before me is a hearing de novo.
[22] This brings me to the test for granting an injunction, which is set out in RJR MacDonald Inc. v. Canada (Attorney General) (, [1994] 1 S.C.R. 311 at 48). The test generally requires that a judge consider the following three criteria:
a) Is there a serious issue to be tried? b) Will the party seeking the injunction suffer irreparable harm? c) Which party will suffer the greater harm if the injunction is granted? This is referred to as the balance of convenience test.
a) Serious Issue to be Tried
[23] I acknowledge that the Plaintiffs have a low threshold to meet in order to satisfy the serious issue to be tried branch of the test. The Plaintiff argues that they have a serious issue to be tried in that they have a basis for claiming that there is an agreement of purchase and sale in this case, and that they should be the rightful owners of the property.
[24] However, in this case I have some serious doubts about whether they can meet this test for the following reasons:
a) The Plaintiffs have to demonstrate that there was an agreement to transfer the property. Given that it is an interest in land, the Statute of Frauds would appear to govern. As a result, it would appear that the Plaintiffs’ agreement of purchase and sale has to be in writing. Certainly, as a general matter, agreements for the sale of land must be in writing to be enforceable (see Hunter v. Square Developments Ltd. ((2002), 60 O.R. (3d) 264)). It is not clear from the evidence what agreement in writing there is in this case. b) As discussed below, in order to obtain actual possession of the property, the Plaintiffs must establish that they should be granted specific performance. In the record before me, there is very limited evidence to support a claim for specific performance.
[25] Given that the Plaintiffs appear to be pursuing their claim, I am not going to make any final findings on whether they meet the test of a serious issue to be tried. However, as I note below, on a prima facie basis, it does not appear that the Plaintiffs have sufficient evidence to obtain specific performance.
b) Irreparable Harm
[26] Counsel for the Plaintiffs argued that the irreparable harm that his clients would suffer flowed from the potential loss of personal effects in the house if the Defendant was given possession, as well as the fact that the tenants would not be able to continue to live in the property and might bring an action against the Plaintiff Navarro. Finally, the Plaintiff Navarro claimed in her affidavit that the Defendant might sell the property, thereby causing irreparable harm.
[27] In my view, the Plaintiffs will not suffer any irreparable harm in this case for three reasons:
a) The Plaintiffs have access to all of the chattels that they had at 99 Baffin, and there is now no chance that these chattels will disappear. The fear that the Plaintiff Navarro describes in her Affidavit is no longer present. b) There was no evidence before me that the Plaintiffs would be without a roof over their heads, other than the Plaintiff Navarro’s bald statement that “I do not have a roof over my shoulders”. This statement needs to be read against the fact that, on the Defendant’s evidence, the Plaintiff Navarro did not stay in the house between March 14th, 2017 and the date this motion was argued in spite of the fact that she had sole possession of it during that time. c) The Plaintiff Navarro claims that she may be sued and suffer damages if the tenants are not able to live in the home. As a result, if the tenants sue the Plaintiff Navarro as a result of breaches of their leases, then she may be able to claim for damages against the Defendant. I also note that there is an open question of whether the Plaintiff Navarro could enter into these leases, and whether the property is even zoned for multiple tenants.
[28] As a result, the Plaintiffs do not meet the second branch of the test.
c) Balance of Convenience
[29] Ultimately, one side or the other will have possession of this property pending the disposition of this case. As a result, the question under the balance of convenience portion of the test is which side would be less inconvenienced by being excluded from the property.
[30] In reviewing the factual matrix in this case, I am of the view that the Plaintiffs’ request for an injunction also fails on the balance of convenience for two reasons as follows:
a) The Defendant has the obligation to make all of the payments on account of the property as she is on title. As a result, if she is excluded from the property, then she will be required to make the payments for the property while not having any of the benefits of the property. b) The Defendant has had nowhere to live since October of 2016, and if she was paying the mortgage without being able to live in the house, would have to pay twice for accommodations.
[31] As a result, the Plaintiffs do not meet this branch of the test either.
Issue #2- The Certificate of Pending Litigation
a) The Law
[32] Section 103 of the Courts of Justice Act permits the Court to direct that a Certificate of Pending Litigation be registered against land when a proceeding has been commenced claiming an interest in that land. Section 103(6)(a) sets out some of the statutory factors that a Court will consider in determining whether a CPL should be discharged, as follows:
Order discharging certificate
(6) The court may make an order discharging a certificate,
(a) where the party at whose instance it was issued, (i) claims a sum of money in place of or as an alternative to the interest in the land claimed, (ii) does not have a reasonable claim to the interest in the land claimed, or (iii) does not prosecute the proceeding with reasonable diligence; (b) where the interests of the party at whose instance it was issued can be adequately protected by another form of security; or (c) on any other ground that is considered just,
and the court may, in making the order, impose such terms as to the giving of security or otherwise as the court considers just.
[33] There are also common-law factors that apply when considering CPL’s. Master MacLeod (as he then was) distilled a number of these factors in his decision in Interrent v. 1167750 Ontario Inc (2013 ONSC 4746) where he stated, at paragraph 15:
The following principles may be distilled from the caselaw:
o The first question is whether or not the claim for specific performance has merit. On an ex parte motion the threshold is low. The court must simply be satisfied that the claim is plausible and there is sufficient evidence to show that there is a serious issue. o On a contested motion, the court will review all of the evidence put forward by both parties and determine on the totality of the evidence before it whether or not there is a triable issue. o In making this determination the court need not accept the pleadings or the affidavit evidence uncritically but will examine all of the evidence after cross examination to determine whether or not the claim has a reasonable prospect of success. o Reasonable prospect of success means not only a reasonable prospect of proving breach of contract but also succeeding in obtaining the equitable remedy of specific performance. Thus the court must be satisfied that damages would not be an appropriate remedy. o Even if the plaintiff has a potential case for specific performance the court may still refuse the CPL if it would be unjust to order it. The court must consider the equities of granting this form of interim relief. This is not a mechanical application of a test but an exercise of discretion to achieve a just result. o Factors the court may consider include the strength of the case, the uniqueness of the land, the adequacy of damages as a remedy, whether the CPL appears to be for an improper purpose, and the balance of convenience. o The court may impose terms whether it grants or withholds a CPL.
b) Analysis
[34] I start with the question of whether the Plaintiffs’ claim has merit. Based on the evidence before me, I am of the view that the Plaintiffs’ claim for specific performance does not have much merit. There are two hurdles that the Plaintiffs will have to cross in order to obtain specific performance. First, as I have noted above, the Plaintiffs will have to demonstrate that the alleged agreement of purchase and sale meets the Statute of Frauds or that the alleged agreement of purchase and sale is of a type that is not required to comply with the Statute of Frauds. This will be a difficult test for the Plaintiffs to meet.
[35] Second, the Plaintiffs will have to demonstrate that this is a case where specific performance should be met. In order to establish that specific performance should be granted, evidence will be required to show that the property is unique, and a substitute property with similar characteristics would not be readily available. (see Semelhago v. Paramadevan, [1996] 2 S.C.R. 415, at para. 22, and Hunter’s Square Developments Inc. v. 351658 Ontario Ltd. (2002), 60 O.R. (3d) 264)).
[36] On this motion, the Plaintiffs have not provided any evidence to show the uniqueness of this property. The Defendant has responded, however, and provided the Court with evidence that there are thousands of semi-detached houses in Brampton. In addition, the Plaintiff Villafana owns a 7 bedroom home. As a result, it is arguable that she was intending to use the 99 Baffin property as an investment property, which makes it less likely that the Court will order specific performance. Losses from an investment are easily compensable in damages.
[37] Even if there were some merit to the Plaintiffs’ claim for specific performance, the equities of the case must still be considered. In this case, the Defendant is responsible for continuing to maintain the property, including maintaining the financing on the property. Granting a CPL in this case would interfere with the Defendant’s ability to maintain and refinance the property.
[38] Conversely, the Plaintiffs cannot point to any compelling reason as to why the CPL should remain on the property. The Plaintiffs point to concerns about loss of tenants, damages, and loss of chattels to justify both the injunction and the granting of the CPL. These are all items that can be compensated for in damages.
[39] In the circumstances, therefore, the Plaintiffs cannot demonstrate that their claim for specific performance has a reasonable prospect of success. As a result, the CPL is to be removed from the property.
Disposition and Costs
[40] As a result, the injunction was dissolved by my Order of April 4th, 2017. The CPL is also to be removed from the title of the property at 99 Baffin Crescent forthwith.
[41] This brings me to the subject of costs. I received each party’s cost outline in Court at the hearing of the motion. However, I did not receive written submissions on costs. The Defendant is to provide her written submissions on costs by April 20th, 2017. Those submissions are not to exceed two (2) double-spaced pages, exclusive of case-law.
[42] The Plaintiffs will have until April 28th, 2017 to provide their submissions in reply. Those submissions are also not to exceed two double-spaced pages, exclusive of case-law.
[43] There will be no reply submissions without leave of the Court.
LeMay J.