COURT FILE NO.: CV-15-0236-SR
DATE: 2018-04-12
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
YVETTE ROSE KWANDIBENS
B. Smith, for the Plaintiff
Plaintiff
- and -
WHITESAND FIRST NATION, AS REPRESENTED BY ALLAN GUSTAFSON, RAYMOND KWANDIBENS, RENE WILSON, JERMAINE NODIN, ALEX
S. Crowe, for the Defendant
WANAKAMIK AND PAUL MATINET
Defendants
HEARD: January 22, 23, 24 and March 27, 2018, at Thunder Bay, Ontario
FITZPATRICK J.
Reasons For Judgment
[1] The plaintiff, Yvette Kwandibens (“Yvette”), brings a claim for specific performance of a rent-to-own agreement with the defendant, Whitesand First Nation (“the First Nation”). Even though Raymond Kwandibens, Rene Wilson, Jermaine Nodin, Alex Wanakamik and Paul Matinet were named as personal defendants in the style of cause, plaintiff’s counsel indicated in his opening statement that no relief was being sought against them.
[2] The plaintiff abandoned a number of claims contained in her pleading at the opening of trial, such as the claim for aggravated and punitive damages and the claim for damages for having to obtain alternative housing and having to incur travel expenses to travel between Thunder Bay and the First Nation reserve at times relevant to this proceeding. There was also a mid-trial amendment to the pleadings by the defendant which was allowed further to my judgment reported at Kwandibens v. Whitesand First Nation et al., 2018 ONSC 1375.
Agreed Facts
[3] The parties agreed to certain facts. They are as follows.
[4] Yvette resides in the City of Thunder Bay in the Province of Ontario. The First Nation is a band as defined under the Indian Act, R.S.C. 1985, c. I-5. The individuals named as representatives of the defendant were the elected representatives of the Whitesand First Nation as at June 5, 2015.
[5] On or about October 1, 1989, Yvette and the First Nation entered into a Rental/Purchase Agreement (the “Agreement”) with respect to the home and property located at the home of the Whitesand Reserve (the “home”).
[6] The Agreement stated (among other things):
(a) The First Nation leases to Yvette for use and occupation as a residential dwelling all those certain premises more particularly known and described as The home Whitesand Reserve;
(b) This agreement shall commence on October 1, 1989 and continue thereafter from month to month;
(c) Yvette shall pay the First Nation the rent in the sum of Three Hundred and Fifty Dollars ($350.00) per month payable on the first day of each and every month;
(d) If Yvette has paid in full consecutive monthly rental payments as prescribed for a period of twenty five (25) years, Yvette has the option upon a further payment of $1.00 to purchase the home and may exercise this option in writing addressed to the First Nation within 365 days of making the last rent payment. If Yvette exercises the option to purchase, the First Nation will issue to Yvette a Certificate of Possession;
(e) Upon issuance of the Certificate of Possession the Agreement shall end;
(f) The First Nation grants Yvette quiet enjoyment of the home;
(g) The Policy and Procedure Manual of Whitesand First Nation Housing Authority sets out the policies and procedures the First Nation follows in administering Housing. Yvette agrees to be bound by the terms of the Policy and Procedure Manual in force from time to time.
[7] The First Nation enacted and is bound by the Whitesand First Nation Housing Authority Policy and Procedure Manual revised on July 21, 2013 (the “Manual”). The Manual states:
(a) Prior to eviction the First Nation shall send a letter to Yvette requesting payment within 10 working days.
(b) If rent is not paid a final notice will be hand delivered or sent by registered mail stating that Yvette has to vacate the home within five days.
(c) If Yvette has paid in full consecutive monthly rental payments for a period of twenty five years, she has the option upon a further payment of $1.00 to purchase the home. If Yvette exercises the option to purchase the First Nation will issue a Certificate of Possession to Yvette.
[8] Yvette Kwandibens and Henry Toset (her common law spouse who was not a party to these proceedings and did not testify) together paid $70,000.00 in rent pursuant to the Agreement. During their period of joint occupancy of the property, Yvette and Henry Toset fell into arrears for rent payments on more than one occasion.
[9] The First Nation sent correspondence addressed to Yvette Kwandibens with respect to non-payment of the rent or mortgage. The correspondence was dated:
(a) August 31, 1994;
(b) February 1, 1995;
(c) August 17, 1995;
(d) December 8, 2003; and
(e) January 6, 2004.
[10] In or about May 2006, Yvette and Henry Toset separated and Yvette no longer resided at the home. On December 5, 2006, Yvette wrote to the First Nation advising she was separated from Henry Toset and stated her intention to regain possession and ownership of the home.
[11] From May 2006 to approximately August 2012, Henry Toset continued to reside in the home. Mr. Toset fell into arrears for rent payments during this period of his sole occupancy of the home.
[12] From May 2006 up to September 2014, Yvette periodically had contact with representatives of the First Nation and stated her continuing intent to regain possession and ownership of the home.
[13] The First Nation sent correspondence addressed to Henry Toset with respect to non-payment of rent or arrears dated May 26, 2011 and September 20, 2012.
[14] The First Nation sent correspondence addressed to Henry Toset with respect to removal of his personal belongings from the home dated August 20, 2014.
[15] In or about December 2014, the First Nation granted possession of the home to another member of the First Nation. The First Nation took no steps to return possession of the home to Yvette after Henry Toset vacated the home in or about August 2012.
[16] Yvette wrote to the First Nation on several occasions including February 25, 2013, October 28, 2013, November 8, 2013 and August 26, 2014 stating her intention and desire to pay the rent and arrears and assume possession of the home. The First Nation received correspondence from Yvette dated December 5, 2006, December 13, 2012, February 25, 2013 and November 8, 2013.
[17] Yvette did not receive confirmation or a new or amended Agreement.
[18] In or about August 2014, Yvette identified a notice that was placed on the door of the home. Yvette attempted to contact the First Nation and attend at the home.
[19] Yvette was advised by the Ontario Provincial Police on August 27, 2014, when she was escorted from the home, that she would be arrested and charged with trespass if she attended at the home. The First Nation advised and directed the Ontario Provincial Police to prohibit Yvette from attending at the premises and to arrest Yvette if she attempted to attend the home.
[20] At all relevant times from May 2006 onwards, the First Nation had contact information and the ability to contact Yvette.
[21] Yvette had contact with Chief Allan Gustafson (“the Chief”) many times from May 2006 to August 2014 including when Chief Gustafson attended Yvette’s home in Thunder Bay in December 2010, when Yvette and Chief Gustafson hunted together in October 2011, when Chief Gustafson attended Yvette’s home in Thunder Bay in March 2013, and when Yvette spoke with Chief Gustafson in May 2013. Yvette was in contact with Chief Gustafson from May 2006 to August 2014 on an intermittent basis.
[22] At all relevant times, the First Nation had the right of possession of all adjoining property.
[23] The First Nation knew at all relevant times that Yvette wanted possession of the home. The First Nation took no steps to remove or evict Henry Toset until August 2012. The First Nation took no steps to return possession of the home to Yvette after Henry Toset vacated the home in or about August 2012.
[24] As of November 2015, the registered population of the First Nation is 1,224 members and 351 live on the reserve territory. The First Nation has 70 houses and six housing complexes.
[25] The First Nation has the duty and authority to allocate possession of homes and lots within its reserve territory.
[26] The number of members of the First Nation and the demand for homes or lots within the reserve territory exceeds the availability of the homes and lots within the reserve territory. The waiting list for a home or lot within the reserve territory is very lengthy.
[27] Yvette is presently 55 years of age. She is a person of Aboriginal ancestry and status. Yvette’s great-grandparents, grandparents and parents are members of the First Nation. Yvette raised her four children and a granddaughter in the home. Yvette’s mother and sibling continue to live on the First Nation reserve land.
[28] At the completion of the Agreement, Yvette had the right to purchase the home and obtain a Certificate of Possession by payment of one dollar ($1.00). The purchase of the home and receiving the Certificate of Possession would have entitled Yvette to remain in the home indefinitely.
[29] The First Nation periodically receives funding from the Government of Canada which includes capital improvements to homes on the reserve lands of the First Nation. The First Nation provides water and road maintenance and other services without cost to members who are in possession of a home or who have a Certificate of Possession.
Evidence of the Parties
[30] The Court heard evidence from two witnesses on behalf of the plaintiff and three witnesses for the defendant First Nation. In the main, the evidence was given in a straightforward manner. In my view, there are only two significant areas of dispute between the parties. First, there is the issue of whether or not Yvette actually abandoned the home. Second, if Yvette did not abandon the home, the next issue is whether the actions of the First Nation in dealing with her requests to be restored to possession were in breach of the Agreement. There were competing versions of the evidence on these points. I will address my findings of credibility under the title “disposition”.
[31] In order to understand the findings I have made on the evidence, a brief recitation of the salient aspects of the testimony of the various witnesses is required. I have confined the recitation to those areas of the evidence which were not expressly covered by the agreed statement of facts.
Evidence on Behalf of Yvette
Raymond Kwandibens
[32] The court heard first from Raymond Kwandibens (“Raymond”). Raymond is Yvette’s brother. Even though Raymond was named as a personal defendant in the style of cause, as noted previously, plaintiff’s counsel indicated in his opening statement that no relief was being sought against Raymond or any of the other members of the Band Council who were named in the style of cause as representing the defendant First Nation.
[33] Raymond was a councillor for the First Nation from 2007 until 2015. In that capacity, he was given the housing portfolio. The councillor with the housing portfolio was responsible for reporting to Chief and Council on the activities and decisions of the Housing Committee and the Housing Manager. The Housing Committee was composed of three members of the First Nation. The Housing Manager was an employee of the First Nation.
[34] Raymond confirmed that the home on Lot 2 was built in 1989. It is in an area the First Nation identifies as “Phase 1”.
[35] Raymond testified about circumstances related to the home that occurred in the period between 2011 and 2015. He said the Housing Committee was not always active at that time. He confirmed Yvette made it known to the Housing Committee that she wanted to be returned to possession of the home. However the Housing Committee did not act upon her request. He said there were no minutes or writings from the Housing Committee concerning Yvette’s request.
[36] Raymond testified it was the Chief and Council who decided which members of the First Nation would receive the opportunity to occupy newly built homes that were being made available on the “rent-to-own” model.
[37] Raymond said in the early 1990’s the Chief of the First Nation at the time had encouraged all members of the First Nation who had entered into the rent-to-own style of agreements not to pay their monthly rent for a two year period. This was done to further a political agenda of the First Nation vis à vis the federal government.
[38] In cross-examination Raymond admitted that it appeared from rent records related to the home produced by the parties on agreement that Mr. Toset was in arrears of rent at the time he left the home in 2012 and that no rent was paid for 2012, 2013 or 2014 in respect of the home. He testified it was his understanding the First Nation was paid rent directly by the “government” for those members of the First Nation who were on Ontario Works. In addition, the First Nation made arrangements to deduct rent monies directly from members who were employees and were involved in rent-to-own arrangements. Henry Toset was employed at some times as a medical driver for the First Nation while he was in possession of the home.
Yvette Kwandibens
[39] Yvette testified and was cross-examined. In addition to verifying many of the facts which had been previously agreed to, Yvette testified about her background and why the home was so important to her. Yvette grew up in various places around Northwest Ontario. This is because the traditional territory of the First Nation had been flooded in the 1930’s and band members had been moving around from place to place ever since. A new reserve was established in the early 1980’s. Yvette had grown up living in one-room shacks with no electricity or running water. The home was special to her because it was the first place that she had lived that had these amenities. It had three bedrooms. It was a significant improvement on places she had lived before. She moved in with her two children.
[40] Tragically, one of her children was struck by a car in front of the house a year after the family took occupancy in 1989. The young child died as a result of the accident.
[41] Yvette detailed her work history with the First Nation and then later with a child protection agency in Thunder Bay. She testified that initially only she had executed the “rent‑to‑own” agreement with the First Nation. Initially, Henry Toset did not do so as he was not a member of the First Nation. He became a member through a band transfer in 2003.
[42] She acknowledged in cross-examination that she was significantly in arrears at various times while she was occupying the home. She explained some of the arrears were due to her being directed to withhold payments by the Chief of the First Nation.
[43] She testified about the abusive relationship she had with Henry. She explained her fears of him kept her from attempting to return to claim the home once the couple split permanently in late 2006. She acknowledged that she had given up the right to possess the home as between herself and Henry as the result of a property settlement the couple made in 2008, that was reflected in an order of the Superior Court. The Superior Court order of Pierce J. dated December 4, 2008 provided that Yvette would take over ownership of Henry’s home in Thunder Bay located on Mark Street.
[44] Yvette testified that it was her expectation that the First Nation would give her written notice of their decision to treat the home as abandoned. She confirmed the agreed facts of her attempts to continue to place before the First Nation her claim to be returned to possession of the home, despite the fact she was not physically living there and was not paying rent.
[45] She had been a member of the Band Council for one term from 2007 to 2009. She was also a member of the Housing Committee in 2002 to 2003. However, she did not see fit to raise her personal circumstances regarding the home during the times she held these positions as she felt it was improper for her to use her position to put forward her personal interest.
[46] It was her evidence that ultimately the decision about who was going to live where on the reserve was the decision of the Chief and Council.
[47] She testified about her claim for payment for personal property that was left at the home. She admitted she had no photographs of the personal property. She had no written documentation as to the value of any of the personal property. She testified that her written estimates filed as an exhibit were based on values that were “as new” for some items and “used” for others.
Evidence on Behalf of the First Nation
[48] Three witnesses were called for the defendant.
Mary Day
[49] The first witness called on behalf of the defendant was Mary Day (“Mary”). Mary is a member of the First Nation. She is currently an employee of the First Nation. She has been employed by the First Nation in various positions for the past fifteen years. She was the Housing Manager in 2011 and 2012.
[50] Mary described her duties as Housing Manager. Mary confirmed that the First Nation did not strictly enforce any of the rent-to-own agreements with regard to the payment of monthly rent for any of its tenants. She confirmed most times the majority of the tenants were in arrears and the arrears were significant. Mary confirmed the practice of the First Nation to extend the periods of time the tenants were allowed to make payments in order to ultimately obtain a Certificate of Possession for their respective lots. The arrears would be simply “added on” and the ultimate term of the agreement would be extended.
[51] Mary confirmed that the First Nation had actually evicted tenants when they were not continuously living in the home. However, she verified that the First Nation never took eviction procedures against tenants who were actually occupying their units despite the fact that they were in significant arrears.
[52] She testified as to the state of the home after Henry had left it for an extended period of time. The hydro could not be reconnected without a special, and expensive, re-inspection. Pipes had burst in the unit. The unit had to be repainted. However, it appeared there were significant amounts of personal items remaining in the unit.
[53] Mary testified the unit had been abandoned by Henry. However, she claimed the decision to declare it as such was made by the Housing Committee. She authored the letters to Henry dated May 26, 2011 and September 20, 2012. The second letter stated “the unit is deemed abandoned” and advised the locks would be changed as of October 1, 2012. Mary said that in her view, the reference to a permanently vacated dwelling in the housing policy was the equivalent of an abandoned property.
Chief Allan Gustafson
[54] Chief Gustafson testified on behalf of the First Nation. He was a councillor from 2000 to 2003. He has been Chief of the First Nation since 2005.
[55] The Chief was questioned about the background facts to which the parties have agreed. He was adamant that the decision to deem the home as abandoned was made by the Housing Committee and the Housing Manager. The Chief was also adamant he did not make any express promises at any time to Yvette that she would be returned to possession of the home once Henry had vacated the home.
[56] The Chief was cross-examined about the decision to put Amanda Doblej (“Amanda”) into possession of the home in December 2014. He maintained that it was the decision of the Housing Committee and not his decision nor the decision of Council.
Diana Nayanookeesic
[57] Diana Nayanookeesic (“Diana”) was the final witness for the defendant. She is employed by the First Nation. She is a current member of the Housing Committee and has been since 2008. She confirmed the zero-vacancy situation presently being experienced by the First Nation. There are ten unique tenant groups (singles, couples or families) awaiting housing at present on the First Nation.
[58] Diana also testified it was the view of the Housing Committee that the reference to “permanently vacated dwelling” in the housing policy Manual was the equivalent to an “abandoned property”. She was questioned about events relating to the home in July and August 2014. She was able to refresh her memory with notes that had been made contemporaneously. Jordan Charlie was the Housing Manager at the time. The issue of the allocation of the home was being brought to the attention of the Housing Committee by Yvette. Diana told Yvette she would put the issue on an agenda for a Band Council meeting. Diana admitted that ultimately she did not do so. The meeting where the issue of the home could have been discussed could not be held because of difficulties with quorum.
[59] Ultimately, in cross-examination, Diana admitted it was Chief Gustafson who had directed that Amanda be allocated the home. According to Diana, the Chief had told her there was “no issue” of Yvette when it came to the home.
Positions of the Parties
Position of Yvette
[60] Yvette seeks a declaration that she is entitled to immediately possess the home. She seeks an order for specific performance of the rental agreement between herself and the First Nation.
[61] Yvette admits that she had failed to pay rent for a considerable period of time. However, she argues this conduct was condoned by the First Nation and therefore she was not in breach of her obligations under the Agreement.
[62] Yvette submits the First Nation waived its reliance upon the termination provisions in the Agreement for failure to maintain rental payments. Yvette relies upon the decision of the Ontario Court of Appeal in North Elgin Centre Inc. v. McDonald's Restaurants of Canada Limited, 2018 ONCA 71. That case stands for the proposition that the principle of waiver provides that if one party leads another party to believe that its strict legal rights under a contract will not be insisted upon, intending that the other party will act upon that belief and the other does so, then the first party may not afterwards insist on its strict legal rights when it would be inequitable to do so.
[63] Yvette did not tender rent while she was out of possession relying upon the past conduct of the First Nation with respect to herself and other tenants. The practice had been for a tenant to simply pay what they could and any arrears would serve to extend the term of the contract rather than be used as a cause for termination.
[64] Further relying on the North Elgin Centre decision, Yvette acknowledges a party may revoke a contractual waiver. However, that revocation must provide reasonable notice to the receiving party. To qualify as reasonable, the notice must make clear that the party who granted the waiver will insist upon the strict enforcement of its legal rights. The notice must also afford the opposite party an opportunity to cure any defect resulting from its reliance on the waiver.
[65] Yvette points to the various letters she sent the First Nation, all unanswered, that nevertheless clearly stated her intention to return to possession of the home. As such, she argues she did not abandon the home.
[66] Yvette submits the decision to place another member of the First Nation in The home cannot be used as an excuse to deny her the remedy of specific performance.
[67] According to Yvette, damages are an insufficient remedy in this case. She is entitled to specific performance as there is evidence the property is unique as a substitute property is not readily available. Yvette argues the actions of the First Nation are a flagrant and deliberate infliction of risk and loss and there is a fair, real, and substantial justification for specific performance.
[68] She justifies her request for specific performance on several bases. The home is on reserve territory. It is obviously quite different from a freehold property off-reserve. She was in possession of the property for a considerable period of time. She and her partner paid more than 75% of what would have been expected to have been paid over the course of the Agreement to ultimately obtain a Certificate of Possession. The ability to obtain a Certificate of Possession for any property on reserve is unique and represents the granting of a significant bundle of rights.
[69] Yvette has sentimental attachments to the home. She did not leave the home voluntarily as she did so only to escape an abusive relationship. There is no comparable market alternative for being allocated a lot on reserve.
[70] On the independent issue of the value of her personal property that was left at The home and apparently destroyed by the First Nation, she asks for judgment in the amount of $15,600.00.
Position of the First Nation
[71] The First Nation asks the claim be dismissed. The First Nation argues that Yvette abandoned the home and therefore is not entitled to any relief in respect of it. The First Nation points to Yvette’s lengthy absence from the home and her admission that she permitted Henry to remain at the home in consideration of his transferring his fee simple interest of a house in Thunder Bay to her. The contract at issue was not designed so that the First Nation would be some kind of arbiter of any domestic disputes between the parties. The First Nation admits it knew Yvette had left the home. However, it was unaware of the order of Pierce J. of 2008 but nevertheless it was entitled to deal with Henry as he remained in the home.
[72] The First Nation argues it acted in accordance with the terms of the Agreement and the housing policy Manual when it notified Henry that he had abandoned the home in May 2011. Further, it argues it did not breach the Agreement by changing the locks in October 2012. The First Nation argues Yvette’s correspondence about the home after October 2012 was of no effect. She did not re-attend to attempt to regain possession until August 2014 at which time the unit had been allocated to Amanda.
[73] The First Nation argues that specific performance should not be granted as the First Nation was not in breach of its obligations, and such remedy would unnecessarily dispossess a third party who is now rightfully occupying the home.
[74] Counsel for the First Nation admitted there really was no defence to the claim for the return of the personal property. However, counsel argued that Yvette had failed to prove the quantum claimed and instead suggested the goods at issue were worth no more than $5,000.00.
[75] When pressed by the Court, counsel for the First Nation suggested that if liability was found, an award of equitable damages would be the only permissible remedy. To that end, and completely in the alternative to its main position, counsel argued that all Yvette has lost is the opportunity to complete the contract and obtain a Certificate of Possession. As $70,000.00 has been paid, and the total required to ultimately complete the contract was $90,000.00, damages in the range of $20,000.00 would be reasonable in the alternative.
Disposition
Disposition of the Claim for Personal Property
[76] The First Nation had no defence to the manner it dealt with Yvette’s personal property left in the home. Having said that, I agree with the submissions of counsel for the First Nation that the evidence tendered in support of the value of the personal property was insufficient to support the quantum requested by Yvette. The goods were worth something. However, they were used and no receipts were tendered in support of the claim for their value. In my view, a generous assessment of their value was given by the First Nation. Accordingly, Yvette shall have judgment against the First Nation for $5,000.00, plus prejudgment interest, in respect of the claim for personal property contained at paragraph 1 (g) of the statement of claim in this matter.
The Claim for Specific Performance
[77] I agree with counsel for Yvette that the first issue that requires determination in this matter is whether or not Yvette abandoned the home. Clearly, the rent-to-own contract was between Yvette and the First Nation. If she abandoned the home there is no basis to provide her any relief.
[78] If she did not abandon, and was not otherwise in breach of the Agreement, the next issue is whether the steps taken by the First Nation in dealing with her requests to be returned to possession, including putting another person in possession of the home, represent a breach of the Agreement that would entitle Yvette to either specific performance, some other equitable remedy or simple damages for breach of contract.
Findings of Fact
[79] In order to resolve these issues I make the following findings of facts in addition to the ones agreed by the parties.
[80] The rent-to-own contract was not strictly enforced by the First Nation. Yvette was often in arrears. So were most of the other tenants of the First Nation. Some efforts were made in 1994, 1995, 2003 and 2004 by the First Nation to have Yvette catch up on arrears. However, no steps were taken to commence eviction proceedings despite the fact that Yvette was almost continually in arrears of rent. Therefore I find the First Nation waived strict compliance with Yvette’s contractual obligation to keep the rent current.
[81] There is no question Yvette and Henry had let the home fall into disrepair. In 2011, Hydro One disconnected the home from the power grid. The First Nation had to pay a special expense of $2,000.00 to have the Electrical Standards Association prepare a report to permit Hydro One to reconnect the power to the home.
[82] Yvette had moved away from the home on what became a permanent basis in 2006. At this time she had separated from Henry. However, she did write on December 5, 2006 to the First Nation asking for their assistance in putting her back into possession of the home. She received no response of any kind from the First Nation concerning this letter. However, she did not pay any rent for the home from that time to the date of trial.
[83] Yvette commenced matrimonial litigation against Henry. In 2008, Pierce J. of the Superior Court of Justice at Thunder Bay made a consent order regarding Henry and Yvette. Justice Pierce ordered Henry to transfer his interest in a matrimonial home located at 209 Marks Street, Thunder Bay to Yvette. I find the consideration for this transfer was that Yvette agreed that Henry was allowed to stay in the house on the home. The First Nation was unaware of this arrangement at the time. I find that while this exchange of consideration was effective as between Henry and Yvette regarding the home, it did not terminate any contractual obligations as between Yvette and the First Nation. I do not accept the First Nation’s submission that this was a “superseding event”.
[84] In 2012, by chance, Henry told Yvette that he had vacated the home as the result of the First Nation determining the home was “deemed abandoned”. As a result, Yvette wrote to the First Nation on December 13, 2012. In that letter she set out her intentions to return to possession of the home and asked for a response. No response was given by the First Nation to this letter.
[85] Yvette wrote again to the First Nation on February 25, 2013 and October 28, 2013.
[86] In my view, these letters were appropriate assertions of an intention to regain possession of the home. The First Nation should have responded formally to these letters. They had an acknowledged duty to house members of the First Nation. I heard no evidence why this duty did not extend to Yvette, a member of the First Nation.
[87] Ultimately, Yvette attempted to physically regain possession of the home on or about August 18, 2014. The Ontario Provincial Police were called. Not wanting to risk being arrested, Yvette left the home.
[88] She has not returned to the home since. In fact, the First Nation entered into a lease agreement with respect to the house in December 2014. As at the date of trial, Amanda was in possession of the home.
Disposition of the Claim for Specific Performance
[89] I agree with counsel for Yvette that the first issue to be determined is whether or not Yvette abandoned the home. I find that despite the fact she was in arrears of rent, the rent‑to‑own agreement and the housing policy Manual of the First Nation that was incorporated into the Agreement by reference contemplated that the contract could be terminated if the tenant permanently vacated the dwelling. In my view, this language in the Manual is synonymous with the word “abandonment” used in correspondence between the First Nation and Henry and Yvette.
[90] This case is unique when contrasted with the factual underpinnings of the various cases counsel relied upon in support of their position as to whether or not Yvette had proved she was entitled to an order for specific performance. The nature of the contract between the parties was unique when contrasted with the jurisprudence involving disputes about leased premises. The lands were on reserve. They are not subject to provincial landlord and tenant legislation. They are subject to federal legislation, primarily the Indian Act. Ultimately, the federal government owns the lands, but the First Nation is clearly in control of how the lands are to be used, at least in so far as housing First Nation members.
[91] The Agreement was styled “rent-to-own”. It required that Yvette pay monies monthly to the First Nation styled “rent/mortgage” over a period of 25 years. Yvette covenanted to keep the home in “repair”. If Yvette kept her covenants contained in the Agreement for 25 years, in consideration of payment of $1.00, she would receive a Certificate of Possession and the provisions of the Agreement would come to an end.
[92] The bundle of rights that accompany a Certificate of Possession are clearly different than possessory rights for land off-reserve. The nature of a Certificate of Possession was described by Laforme J.A. in the decision Tyendinaga Mohawk Council v. Brant, 2014 ONCA 565. In that decision Laforme J.A. stated:
81 As I mentioned above, a Certificate of Possession is only evidence of the fact that an Indian band member has been allotted possession of reserve land. The band member then has control of the land for his or her use and benefit within the limitations provided for under the Indian Act. Anne Warner La Forest, Anger & Honsberger Law of Real Property, 3d ed., looseleaf (Toronto: Canada Law Book, 2013), describes it this way, at 1-4:
While band members may be allotted plots of land for their own use, this does not denote any individual interest in the reserve land other than the privilege of occupying their land to the exclusion of other band members. An individual Indian is not permitted to alienate any portion of reserve land. [Citations omitted, emphasis added.]
82 I would also point out that Jack Woodward in his text, Native Law, at p. 279, adds to the passage relied on by Miracle - and set out above - with the following: “[a]n individual Indian in possession of reserve land has all incidents of ownership in the allotted part of the reserve, with the exception of legal title to the land itself, which remains with the Crown.”
[93] The Schedule A to the rent-to-own agreement titled “Rules and Regulations” also provided that the First Nation had the ability to request Yvette to move if the number of persons occupying the unit increased or decreased. Further, at article 12.4 the Manual provided:
12.4 Permanently vacated dwelling shall be reallocated according to the priority list as established by the Housing Authority/Committee on an immediate basis. This may be excepted where the dwelling is kept vacant by the Housing Authority/Committee in order to carry out repairs or painting within the dwelling
[94] I find that the admitted duty by the First Nation to house members of the First Nation created an obligation upon the First Nation to deal with Yvette’s request to be placed back in possession following December 13, 2012. Their failure to respond to her, and her continued assertions to possession made in writing are sufficient evidence that she did not abandon the home as the First Nation asserts. In that regard, I find at times material to this litigation Yvette was not in breach of her obligations under the Agreement or that the breaches were waived by the First Nation.
[95] Having found that Yvette did not abandon the home, and was not in breach of the contract, I find the next issue to be determined is whether the steps taken by the First Nation in response to Yvette’s requests to be returned to possession, including putting another person in possession of the home, represent a breach of the Agreement that would entitle Yvette to either specific performance, some other equitable remedy or simple contract damages.
[96] Based on all the evidence, I find that the First Nation was in breach of their obligation to Yvette to allow her to remain in possession of the home. I say this for the following reasons.
[97] In considering the contractual relationship of the parties, I am mindful of the recent decision of the Supreme Court of Canada in Bhasin v. Hrynew, 2014 SCC 71. This decision discussed basic organizational principles of contractual interpretation that are applicable to commercial contracts in Canada. In particular I noted the organizing principle set out in Bhasin, that parties generally must perform their contractual duties honestly and reasonably and not capriciously or arbitrarily (Bhasin, para. 63). In my view, the relationship created in this case is closer or more intimate than the usual commercial situation being considered in Bhasin. Therefore, I see this organizing principle as applicable in this matter because of the closeness of the relationship. If it applies to commercial parties clearly it should apply in the matter where a First Nation has entered into a housing agreement with one of its members where it has a duty to house them.
[98] There was no evidence given at this trial that reasonably explains the failure of the First Nation to respond to Yvette’s requests to be placed back in possession. I do not see it as productive to speculate why this was not done. It simply was not. However, it is clear that providing housing to members is an important function of this First Nation. In July 2014, Diana promised Yvette her requests would be placed on an agenda of a meeting of Council in August. This was not done. I do not find bad faith on Diana’s part. However, overall, I find the failure to specifically deal with Yvette, short of telling her on July 23, 2014 that the unit would be reallocated, represented a breach of the Agreement on the part of the First Nation.
[99] I also find the decision to allocate the unit to Amanda was made by the Chief alone. There was conflicting evidence on the part of the witnesses for the First Nation on this point.
[100] The evidence of Chief Gustafson was that the Housing Committee made the decision. Diana’s evidence was that the Chief made the decision. I prefer Diana’s evidence on this point.
[101] I prefer Diana’s evidence because she gave her evidence in a forthright and convincing manner. Her demeanor changed when asked about the decision to allocate to Amanda. She appeared to be somewhat sheepish or reluctant to answer the question as to who made the decision. However, she did answer directly. For me, this indicated she was uncomfortable giving the answer because the proper procedure was for the Housing Committee in conjunction with the Housing Manager to make these decisions. She testified “you do as you are told”. She swore to tell the truth and I believe she was doing so when she testified that the Chief and not the Housing Committee made the decision to allocate to Amanda.
[102] Also supporting Diana’s evidence on this point is the letter of July 23, 2014. In that letter, the Housing Manager of the First Nation plainly states it was the Chief and Council who had made the decision regarding the home.
[103] There is no doubt the First Nation had a problem to deal with when it came to the home as of the summer of 2014. An important scarce resource was sitting empty. It had been allowed to fall into disrepair by Henry. There were waiting lists. However, Yvette had a contract with the First Nation in respect of the home and she wished to return to the property. She had been in occupation for a considerable period of time. She was clear in her intention to be placed back in possession. Dealing honestly with Yvette required the First Nation to give her the opportunity to return to possession by making some arrangement to recommence paying rent, deal with the costs to reconnect the power, and assure the First Nation she would actually occupy the home on a regular basis. This was not done.
[104] For all these reasons, I find Yvette is entitled to a remedy for the breach of contract by the First Nation. However, I am not convinced that equity demands she be returned to possession and be granted an order for specific performance.
Remedy
[105] The remedy sought by Yvette is one that arises in equity. She seeks specific performance of the contract between the parties. She asks the court to order the First Nation to put her back in possession of the home. In my view, based on all the evidence, this is an unrealistic and unreasonable expectation. My reasons for this are as follows.
[106] The object of a remedy for breach of contract is to put an innocent party in the position they would have been had the contract been performed. Historically, specific performance was most often ordered in disputes regarding the purchase of land. The preference for an order for specific performance in land cases was modified following the decision of the Supreme Court of Canada in Semelhago v. Paramadevan, 1996 CanLII 209. In that decision, the Supreme Court held at para. 22 that specific performance would not be granted as a matter of course absent evidence that the property is unique to the extent that its substitute would not be readily available.
[107] Yvette argues that the home is unique. I disagree that it is “unique” in the way that courts have looked at this issue in situations involving lands off-reserve. In the jurisprudence, the question of whether or not land was unique focused on the qualities of the specific property at issue, such as the location of the lands or the design of buildings placed upon the lands. The jurisprudence also focuses on whether damages are an inadequate remedy having regard to the nature of the property.
[108] In this case, there is no doubt that the home had unique characteristics particular to Yvette. A very tragic accident occurred on the lands. It was the first “modern property” in which Yvette had lived for her whole life.
[109] However, in my view, its uniqueness to her is also tempered and impacted by other realities. Yvette’s right to continue to possess the land, short of having a Certificate of Possession, was subject to the right of the First Nation to substitute the Lot with other property on the reserve in the event her family makeup changed and the Housing Committee needed to move her and her family unit to other locations. The home was communal property for the First Nation. Yvette could not have exclusive control of it until she was granted a Certificate of Possession. After Henry left the home, Yvette was far from being able to claim this. The right of the First Nation to do this had been expressly acknowledged by the parties in Schedule A to the contract.
[110] Also, the jurisprudence placed before the court by the parties makes it clear that in granting an equitable remedy, the court must have regard to the facts of the case. In the decision of the Ontario Court of Appeal in Matthew Brady Self Storage Corporation v. InStorage Limited Partnership, 2014 ONCA 858, at para. 32, the court in considering whether or not specific performance was appropriate, relied on its earlier decision Landmark of Thornhill v. Jacobson, 1995 CanLII 1004 (ON CA), 25 O.R. (3d) 628, to hold that a trial court must look at (i) the nature of the property involved; (ii) the related question of the inadequacy of damages as a remedy; and (iii) the behaviour of the parties, having regard to the equitable nature of the remedy.
[111] The relationship between Yvette and the First Nation is unique when compared with litigants in the usual sale or lease of land case. These parties are at arms-length but it is a different kind of arms-length relationship. Yvette is a member of the First Nation. The parties have agreed that the First Nation has a duty to house Yvette. However, it is clear that the First Nation also has obligations to all other members of the First Nation.
[112] In this case, as a very scarce and important resource had been left vacant for two years, ultimately the First Nation decided to house one of its members, just not Yvette. Yvette had housing in Thunder Bay. There is a waiting list for housing for this First Nation. To this day, the First Nation remains unable to provide housing to all members of the First Nation who want to live on reserve. This is not a criticism. It is a statement of fact.
[113] As of the last day of trial, Diana testified there was a need for the construction of at least ten new housing units in order to fulfill this obligation. Amanda, a member of the First Nation, is in possession of the home and has been so for more than three years. Counsel for Yvette argues this is not an impediment to granting an order for specific performance. The First Nation will have to make changes, but that is not Yvette’s problem.
[114] I disagree.
[115] I cannot ignore the fact of Amanda’s occupation and the events leading to it. I also cannot ignore Yvette’s conduct. She asks the Court to do equity. Those who seek equity must come with clean hands. In my view, Yvette’s request for specific performance must be considered in light of her conduct.
[116] First and foremost is Yvette’s delay in seeking to be returned to possession of the home. Her reasons for leaving the home in the first place are understandable. She was in an abusive relationship. She did seek the assistance of the First Nation to return her to possession in 2006. The contract did not contemplate such an event. I think it unreasonable to consider that somehow Yvette could expect the Chief and Council to be able to interfere with the domestic relationship that was going on in property located on the reserve. However, she took no overt steps to be returned to possession until 2012. Henry had left the property. The impediment to her physically returning to possess the home had been removed.
[117] Her decision not to move back in is understandable given her own personal housing situation. Since 2008, she was the owner of a home in Thunder Bay. I have found that the consideration for him transferring the home to her was her agreeing not to seek to dispossess him from the home.
[118] I find the First Nation was aware of the separation. Awareness, however, did not create an obligation to intervene in the domestic situation. Henry clearly abandoned the home in 2012. There is no other way to describe this. He stopped paying rent. He did not pay the hydro. The electric power was physically cut off from the building. Ultimately it required a physical reconnect to allow the home to be habitable. Yvette was aware of what was going on with the home.
[119] I agree with Yvette that the decision to put the current tenant in possession of the home was done in a manner that was inconsistent with the contract. While I have found Yvette was not technically in breach of the contract at that time, her efforts to return to possession were not sufficient to force the issue. She did not carry through with her stated intent to return to possession until August 2014. At that time, she had been notified by the First Nation that Chief and Council had already decided to put Amanda in possession of the home. This was not something the First Nation could do immediately. The power had to be restored. Renovations to the unit were required. Nevertheless, the First Nation asserted its right to direct possession to the band member they determined should be in possession. It was Amanda, not Yvette.
[120] I find the actions taken by the First Nation in reallocating the home to be reasonable in all the circumstances based on the evidence I heard at trial. Amanda and Yvette stand in equal position to each other as members of the First Nation. The First Nation has an equal obligation to house both of them if requested. The First Nation had to make a difficult decision. It chose Amanda over Yvette. It is a fundamental principle that equity will not award specific performance if a third party bona fide purchaser for value without notice intervenes to obtain the property.
[121] Specific performance would have the effect of displacing an innocent third party. Practically speaking, the decision of the Chief in this case will be allowed to stand. However, as I have found, this decision was a breach of the provisions of the Agreement. Yvette is entitled to relief. However, I cannot say that equity would be done by displacing one member of the First Nation to house another. In my view, specific performance is simply not an available because it would be inequitable to make the award in all the circumstances of the case.
[122] On the other hand damages for breach of contract are available to Yvette. They are difficult to determine in light of the nature of the property at issue and the circumstances of the case. However I have done my best on the evidence to come to an appropriate award.
[123] There was no evidence that Yvette will be precluded from obtaining a reserve lot in future. I heard no evidence that Yvette will be unable in future to put her name on the waiting list to obtain another Lot, or indeed be returned to the home at some future date. As a member of the First Nation, Yvette can legitimately expect from the Chief and Council and the Housing Committee that she may obtain housing in the future. She will not be able to obtain it immediately, but in my view, her actions disentitle her to such immediate relief.
[124] Yvette at no time had anything approaching the right to security of tenure that is present in off-reserve residential accommodation in Ontario. She did however have an expectation that she would be treated fairly. In my view, having the monies she put into the home while she occupied the unit returned to her by way of an award of damages will compensate her as closely as possible for the loss of the bundle of rights she had when she left the home in 2006. It is the best she can reasonably expect had the contract been performed in light of the decision of the First Nation to house someone else in the unit and her own actions or lack of action in seeking to be returned to the unit.
[125] She had not kept the rent current. She did not tender any monies or physically present herself on reserve to try and deal with the situation. The home was in disrepair. She was still on the lease and had an obligation to keep the home in a state of repair. I do not see it as reasonable for her to expect to be able to allow a scarce resource to be kept vacant and falling into a state of disrepair while she is housed off-reserve, pending her whim to return to possession after being absent for eight years. In my view, this conduct cannot be ignored in fashioning a remedy for the breach of the Agreement.
[126] In this case, based on all the evidence, I find it appropriate to award contract damages to Yvette for the First Nation’s breach of contract.
[127] In addition to an award of damages, I have considered the possibility of making an express declaration that Yvette be returned to possession of the home at some time in future when the home is no longer required by Amanda or when the First Nation determines it can make that arrangement. I have rejected this option as viable for a number of reasons. First and foremost, Yvette did not seek this relief. She sought a declaration to be returned to the home forthwith. I find this is impossible given Amanda is in possession, the home is not sufficiently unique, and damages are the appropriate remedy in light of the conduct of the parties.
[128] Secondly, I see it as the court’s role to finally adjudicate this dispute in a practical time frame. Ordering that Yvette have some future right of possession of the specific lot could lead to more problems and litigation. Thirdly, I see making this kind of order as an unnecessary intrusion on the authority of the leadership of the First Nation to make decisions it sees fit in the interest of its people. Fourth, it would involve interfering with the rights of persons who were not parties to this proceeding. This matter was commenced as a Simplified Rules case. None of the named parties sought to add Amanda or anybody else on the waiting list as interested parties to this trial despite this matter being raised at the opening of trial. I am not prepared to make a ruling that would adversely impact the rights of persons who were not given the opportunity to be heard at this trial.
[129] The parties agreed that both Yvette and Henry paid a grand total of $70,000.00 as “rent” over the time they were in possession. Henry was not a party to these proceedings. I find it would be unjust for Yvette to recover monies that Henry paid to the First Nation when Yvette was not in actual possession of the home. On the evidence, Yvette and Henry together paid rent from 1989 to 2006. In that time, the records tendered as evidence indicate together they paid a total of $20,800.00 in rent.
[130] In my view, an award of damages in the amount of $18,000.00 sufficiently and adequately compensates Yvette for the damages she has suffered as the result of the breach of contract by the First Nation. Because the evidence of actual loss was scant, these damages are essentially nominal damages for the First Nation’s breach of contract and my best estimate of her damages.
[131] In addition, there is the matter of costs. Yvette is entitled to costs of this action. The quantum and scale of costs is to be agreed to by the parties. I note that her recovery, contract damages plus damages for property loss, is within the limit of the jurisdiction of the Small Claims Court. If no agreement can be reached within 30 days of the release of this decision, the parties shall schedule a brief case conference to set a timetable for costs submissions. If no case conference has been requested by either party within 45 days of the release of this decision, the matter of costs will be deemed to have been settled.
[132] There was no evidence led about any demands for payment or specific performance short of the commencement of the claim. I note the claim was issued June 5, 2015 and the first defence was dated July 9, 2015. Therefore, I find that the prejudgment interest is to be calculated at 1.0%, the third quarter rate for 2015.
[133] Order to go as follows:
The First Nation shall pay Yvette damages in the amount of $5,000.00 (inclusive of HST) as damages for the loss of personal property;
The First Nation shall pay Yvette further damages for breach of contract in the amount of $18,000.00;
The First Nation shall pay prejudgment interest on the above amounts calculated at 1.0% commencing July 9, 2015;
This judgment shall bear interest at the post-judgment rate for the first quarter of 2018;
The First Nation shall pay Yvette costs in an amount agreed by the parties or fixed by the court;
The time for appeal of this decision shall run from the date costs are agreed or fixed by the court.
_______”original signed by”
FITZPATRICK J.
Released: April 12, 2018
COURT FILE NO.: CV-15-0236-SR
DATE: 2018-04-12
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
YVETTE ROSE KWANDIBENS
Plaintiff
- and -
WHITESAND FIRST NATION, AS REPRESENTED BY ALLAN GUSTAFSON, RAYMOND KWANDIBENS, RENE WILSON, JERMAINE NODIN, ALEX
WANAKAMIK AND PAUL MATINET
Defendant
REASONS FOR JUDGMENT
FITZPATRICK J.
Released: April 12, 2018
/sab