Court File and Parties

PETERBOROUGH COURT FILE NO.: CV-17-231 DATE: 2018-03-05

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 2299445 Ontario Inc., Plaintiff AND: 2174542 Ontario Inc. and Safe Harbour Developments Inc., Defendants

BEFORE: The Honourable Mr. Justice C.F. de Sa

COUNSEL: Brendan Clancy, Counsel for the Plaintiff Trevor Whiffen, Counsel for the Defendants

HEARD: In-Writing

Endorsement

[1] I released my decision in this matter on December 6, 2017. In that decision, I granted leave to the Plaintiff to register a Certificate of Pending Litigation (“CPL”) on the Phase 2 Lots. However, there was some ambiguity in my decision regarding the meaning of “Phase 2 Lots”.

[2] At paragraph 9 of the decision, the “Phase 2 Lots” are defined as being lots 112 to 150 (i.e., the phase 2 lots that were promised to the Plaintiff under the relevant agreement). However, paragraphs 30 and 31 of my decision reads as follows:

[30] The Vendor has advised that it has more than 100 similar lots that are contiguous to the Phase 1B Lots. Those other lots (the Phase 2 Lots) are still in the process of being serviced and placing a CPL on those lands would not cause the same level of prejudice to the parties. It would also permit the Builder to have the contract fulfilled according to its original terms should they succeed in the litigation.

[31] In the circumstances here, I am prepared to grant a CPL in relation to the Phase 2 Lots, in order to secure the claim, and to preserve Builder’s interests in the Property.

[3] The question raised is whether I intended the CPL to apply:

1. Only to lots 112 to 150 (as suggested by paragraph 9 of the decision);
2. To the 100 similar lots contiguous to the Phase 1B Lots (as suggested by paragraph 30);
3. To lots 112 to 150 and an additional 35 Phase 2 Lots in light of the fact that the 35 Phase 1B Lots previously promised to the plaintiff are now being sold to a third party (Cleary Homes).

[4] Counsel for the Respondent has advised that the entire Burnham Meadows, at all material times, has been covered by one legal description (the Existing Legal Description).

[5] The Existing Legal Description originally included Phase 1A, which was sold to the Plaintiff in 2014, and became the subject of a separate Reference-Plan for legal description purposes. It also includes the Phase 1B Lots which have been sold to Cleary Homes and an additional commercial/retail portion of the development. These lots are, of course, not intended to be covered by the Certificate of Pending Litigation.

[6] After receiving my decision, the Respondent obtained a distinct Reference Plan for lots 112-150 which would permit the CPL to be registered on title without unnecessarily encumbering the other lands. In its written submissions of January 15, 2018, the Respondent also advised that if the CPL were to encumber lands beyond lots 112-150, it may jeopardize its financing arrangement with its lender. Counsel explained:

On a related and important note, legal counsel for the Defendants’ lender/financier, Marshall Zehr, has indicated that the Reference-Plan solution we proposed would satisfy their lending, security, and registration requirements, and would allow Marshall Zehr to continue to financially support the Defendants with respect to the development of the Burnham Meadows project. We have been advised by the lender’s legal counsel, however, that any attempt to expand the scope of the Certificate of Pending Litigation beyond the “Phase 3 Lots”, identified as Lots 112-150 inclusive, would jeopardize the financing it its entirety. This would, of course, be catastrophic to all parties.

[7] I will begin by apologizing for the ambiguity. Having reviewed the judgement, I agree it contains the ambiguity identified by the parties.

[8] That being said, I do not want the order to create additional complexity given the steps taken by the Defendant to carry out the terms of the order as understood. Moreover, I am not prepared to construe the judgment in a manner that may jeopardize the Defendant’s existing and ongoing financing arrangements.

[9] I believe the purpose envisioned in the order can be realized by the CPL being registered on lots 112 to 150 only. Any amounts owing beyond that to the Plaintiff can be addressed by way of an order of damages. Should there be a need for additional security, the Plaintiff can always bring the necessary application.

[10] I will entertain costs submissions on the motion of not more than 2 pages in length and in writing, to be filed within 3 weeks of this decision. I do view the Plaintiff to be the successful party on the motion.

Justice C.F. de Sa

Date: March 5, 2018