Court File and Parties

CITATION: Tarkmeel v Kurien, 2017 ONSC 6404

COURT FILE NO.: CV-15-538294

DATE: 2017-10-26

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: ALLAN TARKMEEL., Plaintiff – AND – HEIDI KURIEN, Defendant

BEFORE: Justice E.M. Morgan

COUNSEL: Darryl Singer and Nadia Condotta, for the Plaintiff Jamie Helm, for the Defendant

HEARD: October 25, 2017

ENDORSEMENT

[1] The parties are former partners in the real estate business that have had an acrimonious breakup of their business relationship. The action entails a wide range of incriminations and counter-incriminations levelled by each against the other.

[2] This motion originally addressed a portion of the overall dispute involving a condominium unit located at 51 East Liberty Street, Unit #2413, Toronto, which is co-owned by the parties. It also addresses another portion of the overall dispute involving three parking spaces in a commercial condominium complex located at 100 Western Battery Road, Toronto. The issue with respect to the condominium unit has now settled. Counsel advise me that the parties have agreed to sell it and divide the proceeds. They have agreed that if they have any trouble coming up with a mutually agreeable listing agent to sell the unit, they will address that in a reference to a Master.

[3] What remains to be decided is the fate of the three parking spaces at 100 Western Battery Road. These parking spaces are designated as #C14, #C15, and #C16 (the “Parking Spaces”). The Parking Spaces are situated within a wider development known as Liberty Village.

[4] Counsel for both parties agree that although there are other issues that remain outstanding in this action, the issues with respect to the Parking Spaces are discrete and can appropriately be dealt with by way of summary judgment. They have indicated that they are aware of the courts’ general caution with respect to the granting of partial summary judgment, but both sides are of the view that there is no overlap between these issues and other findings of fact that will be made at trial on the remaining issues between them. They are each content to have the ownership of the Parking Spaces determined on this motion.

[5] The Defendant purchased the Parking Spaces on November 30, 2012. She paid $15,000 to the Plaintiff for them; correspondence from the Plaintiff to the Defendant confirms that the Defendant paid the entire purchase price for the three Parking Spaces. Upon being purchased, the Parking Spaces were registered in the name of the Plaintiff’s corporation, 2274092 Ontario Limited (“Number Co.”). This was apparently done because the parties were at the time under the impression that one could not be a registered parking space owner unless one were also a commercial condominium unit owner in the Liberty Village complex. The Defendant does not own a commercial unit in the complex, but Number Co. does.

[6] As a result, the Defendant advanced all of the money for the Parking Spaces but title is held in the name of a corporation controlled by the Plaintiff. As Cromwell J. observed in Kerr v Baranow, 2011 SCC 10, [2011] 1 SCR 269, at para 12, it has been “settled law since at least 1788 in England (and likely long before) that the trust of a legal estate, whether in the names of the purchaser or others, ‘results’ to the person who advances the purchase money” [citations omitted]. There is no indication in the evidence that the beneficial ownership was intended by the parties to accrue to the Plaintiff or Number Co., and there is every indication that the parties have treated the Parking Spaces as if they belong to the Defendant. She has leased them out, collected the rents, paid the relevant maintenance costs and taxes, etc. I have no hesitation in concluding that Number Co. is a bare trustee of the three Parking Spaces and that the Defendant is the 100% beneficial owner of them.

[7] Now that the parties’ business relationship is a thing of the past, something needs to be done about the Parking Spaces. Their relationship is so acrimonious that it does not make sense for them to have to continue dealing with each other over three small Parking Spaces. As counsel for the Plaintiff explains it, there are three conceivable alternatives: a) the Defendant conveys her beneficial interest to the Plaintiff or to Number Co. for an agreed upon price; b) the Plaintiff causes Number Co. to convey legal title to the Defendant since she is already sole beneficial owner; or c) the parties cooperate in selling the Parking Spaces to a third party. In the event that the parties opted to sell the Parking Spaces, it is evident that the proceeds would go to the Defendant as beneficial owner and sole contributor to the initial purchase of them.

[8] It is the Plaintiff’s position that the Parking Spaces should be conveyed to him or his company. He contends that there was an agreement to this effect between the Defendant and him, and that the proper remedy on this motion is to order specific performance of the terms of that agreement. Plaintiff’s counsel goes on to submit that the agreement between them was for the Plaintiff to pay the Defendant $15,000 – in other words, to reimburse her the amount that she initially paid for the Parking Spaces – and for the Defendant to transfer full beneficial title to him.

[9] It is the Defendant’s position that there is no such agreement between them. She concedes that she at one point several years ago offered to sell the Parking Spaces to the Plaintiff, but that he did not respond or do anything to accept that offer. Counsel for the Defendant submits that since there is no agreement to sell the Parking Spaces, the Plaintiff should be compelled to transfer legal title to the Defendant so that she owns both the legal and the beneficial title.

[10] Counsel for the Plaintiff concedes that there is no written agreement for the Defendant to sell her interest in the Parking Spaces to the Plaintiff, but he submits that there was an oral agreement between the parties to that effect. As evidence, he points to a number of paragraphs in the Plaintiff’s supporting affidavit. I will set those paragraphs out in full, as follows:

Through my company, 227, I own three commercial parking spaces, municipally known as #C14, #C15, and #C16 (hereinafter the ‘spaces’), where my office was located at #4 and #5 Western Battery Road, in Toronto. These spaces can only be owned by commercial tenants of the building. Attached hereto as Exhibit ‘J’ are photos of the spaces.

While Heidi [i.e. the Defendant] was working out of my office, we entered into a verbal agreement whereby I purchased the abovementioned three commercial parking spaces, though [sic] my company, on her behalf, for the sum of $15,000.00, which she could then use. The spaces would remain under the ownership of 227 [i.e. Number Co.], but Heidi agreed to pay all maintenance fees and taxes.

At some point while she was still working out of my office, I became aware that Heidi was renting the spaces to third parties, and has continued to do so.

I am willing to honour the verbal agreement and give Heidi $15,000.00 for her beneficial interest in the spaces, as originally agreed upon. Attached hereto as Exhibit ‘K’ are emails dated September 17, 2015 which confirm the agreement.

[11] That is the entire description of the “agreement” in the evidence. As far as I can tell, it is not a description of an agreement for the Defendant to sell the Parking Spaces. Rather, it is a description of the agreement under which the Defendant bought the Parking Spaces, followed by an assertion that there was an agreement for her to sell them to the Plaintiff. The details of that agreement to sell – when it was entered into, when is the closing date, what the terms of sale are (other than the $15,000 sale price), who made the offer and who accepted it, etc. – are all missing from the description provided by the Plaintiff.

[12] The email correspondence found at Exhibit ‘K’ of the Plaintiff’s affidavit is not much help in filling in these details. The emails mention the Defendant’s old offer to sell, but, as indicated, do not contain any acceptance of that offer. Counsel for the Plaintiff points to a single sentence in an email dated September 23, 2015 from the Plaintiff to the Defendant which he says sums up the agreement to sell the parking spaces. That email states:

As for the 3 Parking Spots, the arrangement was that we were taking care of this on either October 1st or Nov 1st. We can take care of this on Oct 1st.

[13] In my view, there is no enforceable agreement for the Defendant to sell the beneficial interest in the Parking Spaces to the Plaintiff or to Number Co. Not only is the email relied on by the Plaintiff vague, it is unilateral; there is no evidence that the Defendant ever acknowledged or agreed to whatever “arrangement” the Plaintiff refers to in his email.

[14] Moreover, except in certain circumstances an agreement to sell real property must be in writing: see Statute of Frauds, RSO 1990, c s.19, s. 4. The facts in the record here suggest that there is no part performance or any other factor which would make this case an exception to that long established rule: Erie Sand and Gravel Ltd. v. Seres’ Farms Ltd., 2009 ONCA 709. The Plaintiff in his affidavit refers to this as a “verbal agreement”, but this verbal agreement, whose existence in any case is not established to my satisfaction, would be unenforceable.

[15] Counsel for the Defendant explains that, as it turns out, the parties were mistaken that the by-laws of the condominium in which the Parking Spaces are situated permit only an owner of a commercial condominium unit to own parking spaces. The applicable provision is found at art. 4.7(c) of the Condominium Declaration, which states, in relevant part:

Any or all of the Commercial Parking Units may at any time be sold, leased, charged, transferred or otherwise conveyed, either separately or in combination with any other Units, provided however, any sale, transfer, assignment or other conveyance of any commercial Parking Unit shall be made only to the Declarant, to the Corporation or any of the other Monarch Liberty Village Condominiums, or to any Owner of a Commercial Unit in the Corporation or an owner of any similar type unit in any of the other Monarch Liberty Village Condominiums [emphasis added].

[16] The Defendant owns a residential condominium in one of “the other Monarch Liberty Village Condominiums”. I agree with counsel for the Defendant that the parties were under a mistaken understanding that the Parking Spaces could not be transferred to her, but rather had to be held by Number Co. as it is an owner of a commercial condominium unit. While perhaps not drafted with linguistic perfection, I read art. 4.7(c) as permitting any Monarch Liberty Village Condominium owner to be the transferee of a parking space. As owner of a residential condominium in the development, the Defendant can be the legal title holder of the three Parking Spaces at issue here without being in violation of the terms of art. 4.7.

[17] The Plaintiff is hereby ordered to compel Number Co. to convey legal title to Parking Spaces #C14, #C15, and #C16 to the Defendant.

[18] As the successful party in the motion, the Defendant is entitled to her costs. Both counsel have indicated that their costs are somewhere just over $9,000, including disbursements and HST. Accordingly, the Defendant’s costs request reflects roughly the same “amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed”: R. 57.01(1)(k) of the Rules of Civil Procedure.

[19] The Plaintiff shall pay the Defendant costs in the amount of $9,000, all inclusive.

Morgan J.

Date: October 26, 2017