Court File and Parties

COURT FILE NO.: CV-16-553339 DATE: 2018-01-30

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Lisa He, Plaintiff AND: Alex Furney and Maryam Furney, Defendants

BEFORE: P. J. Monahan J.

COUNSEL: Anna Wong and Samuel Marr, for the Plaintiff Irving Marks and Jonathan Preece, for the Defendants / Moving Parties

HEARD: January 30, 2018

Endorsement

[1] The Defendants appeal the August 22, 2017 decision of Master Sugunasiri, in which she refused to discharge a certificate of pending litigation that had been issued by Master Wiebe on August 31, 2016. They allege that Master Sugunasiri made errors of law, and that the CPL should be set aside.

[2] The litigation arises out of an action for specific performance commenced by the Plaintiff, seeking to enforce an agreement of purchase and sale (“APS”) for the sale of the Defendants’ property at 27 Suncrest Drive in Toronto. The Plaintiff successfully brought the motion for a CPL before Master Wiebe in August 2016, and no appeal was taken from that order. The Defendants brought a motion to discharge the CPL in 2017 based on new evidence, namely, the fact that the Plaintiff had subsequently purchased a second property at 23 Suncrest Drive, which is 2 doors down from the Defendants’ property. The Defendants argued before Master Sugunasiri that the property at 23 Suncrest Drive was, in effect, a “replacement property”, thereby negating the Plaintiff’s claim that the Defendants’ property was unique.

[3] The Plaintiff provided evidence to rebut this argument in the form of an affidavit from her ex-husband, Johnny Fei. Fei explained that, although he and the Plaintiff were no longer married, they remain on amicable terms and their finances remain commingled. Fei indicated that he and his ex-wife wish to live close together, so that their children could easily visit and spend time with both of them. They therefore decided to purchase properties close to each other, ideally on the same street. Following the signing of the APS for 27 Suncrest, Fei and the Plaintiff began searching for a second property in the same area, in order that they could live close by each other, as they had planned. Although there were very few listings of properties for sale in that area at the time, through a real estate agent they were able to negotiate an agreement whereby the Plaintiff purchased 23 Suncrest. Unlike 27 Suncrest, which is in “move in” condition, 23 Suncrest was a two-bedroom bungalow that was not then suitable for the Plaintiff or Fei’s use. They therefore planned to demolish the building on 23 Suncrest and are building a new, customized home where Fei will live, and which can also accommodate the couple’s adult children. Their plan is for the Plaintiff to move into 27 Suncrest and for Fei to move into 23 Suncrest, so that their children can visit them in the two homes.

[4] Master Sugunasiri refused to vacate the CPL, rejecting the argument that the purchase of 23 Suncrest meant that 27 Suncrest no longer had “uniqueness” needed to support the CPL. The Learned Master acknowledged that there was conflicting evidence on the issue of uniqueness, but that the Fei affidavit was uncontradicted in indicating that 27 Suncrest was unique for the Plaintiff regardless of the acquisition of 23 Suncrest. The Master indicated that even if she was wrong on the issue of whether the property remained subjectively unique, the evidence warranted resolution by a trier of fact with the benefit of a full record and viva voce evidence.

[5] The Defendants argue that Master Sugunasiri made two errors of law: (i) she applied an entirely subjective test for determining uniqueness, rather than a combined subjective/objective test, as is required; and (ii) she should not have admitted or relied on the Fei affidavit because it is hearsay evidence, is irrelevant to the issues, and contradicts or is inconsistent with other evidence.

[6] The parties agree on the following: (i) the standard of review respecting Master Sugunasiri’s decision is whether she made an error of law, or misapprehended the evidence such that there is a palpable and overriding error; and (ii) the test for vacating a CPL is that set out by Master Glustein (as he then was) in Perruzza v. Spatone 2010 ONSC 841, where it is held, inter alia, that a CPL should not be vacated where there is a “triable issue as between the parties as to an interest in the lands in question.”

[7] Turning to the two errors alleged by the Defendants, I would note that the issue of whether the property at 27 Suncrest is unique remains a live one. Master Wiebe found that the property met the criteria of uniqueness, and no appeal was taken from his decision. The only issue, then, is whether the purchase of 23 Suncrest means that the property at 27 Suncrest is no longer sufficiently unique. The affidavit from Fei, upon which the Defendants did not seek to cross-examine, explains why 23 Suncrest is not a “replacement” for 27 Suncrest. It was purchased to complement and augment the value of 27 Suncrest, and will be used for a different purpose, namely, as Fei’s house.

[8] It is true that Master Sugunasiri, in her comments on this aspect of the matter, referred to the fact that the property remained subjectively unique to the Plaintiff. I do not read this reference in her endorsement as negating or ignoring the objective aspect of the test for determining uniqueness; she was merely indicating that the property continued to be unique for the Plaintiff and her ex-husband, despite the purchase of 23 Suncrest. She also noted, in any event, that there continued to be a triable issue on whether the Plaintiff had an interest in the land in question.

[9] I agree that there continues to be a triable issue on whether the Plaintiff has an interest in 27 Suncrest. I would not interfere with Master Sugunasiri’s decision on this point.

[10] With respect to the Fei affidavit, no objection was taken to its admissibility before Master Sugunasiri. In any event, Fei’s affidavit is not hearsay. He attested to the plans made between him and his ex-wife as to their plans for their living arrangements. He was not simply reporting on what the Plaintiff had told him but, rather, was describing a plan that he and his ex-wife had come to, together. As for the argument that the Fei affidavit is irrelevant, the opposite is the case. The affidavit responds directly to the argument of the Defendants that 27 Suncrest is no longer unique because of the acquisition of an apparent “replacement property”. Fei provides an explanation as to why the Defendants’ characterization of 23 Suncrest as a replacement property is inaccurate. Whether, in fact, the property remains unique is a matter for the trier of fact to determine. But it is clear that there remains a triable issue. As for the argument that the Fei affidavit makes statements that are inconsistent with other emails or statements on the record, that is no basis to exclude, or ignore it. Rather, it is precisely because of the differences between the parties that there is a triable issue, to be determined at trial.

[11] With respect to balance of convenience, since I have held that the purchase of the property at 23 Suncrest does not eliminate the need for a determination at trial, the conclusions of Masters Wiebe and Sugunasiri on balance of convenience must also stand. As the reasons below indicate, there is a real risk to the Plaintiff if the CPL is vacated. The Defendants intend to refinance the property by adding significantly to their mortgage. There is also evidence that the Defendants are experiencing severe financial difficulties. If the Defendants were to default on that further or additional encumbrance, it might diminish the Plaintiff’s ability to obtain specific performance at a cost close to the price she was willing to pay for the property. There is no error in Master Sugunasiri’s findings on balance of convenience.

[12] I therefore dismiss the Defendants’ motion with costs to the Plaintiff. Having reviewed costs outlines and submissions of counsel, I award the Plaintiff costs in the amount of $8,000.00, inclusive of disbursements and HST.

P. J. Monahan J.

Date: January 30, 2018