Court File and Parties

COURT FILE NO.: CV-18-3357-00 DATE: 20180820 SUPERIOR COURT OF JUSTICE – ONTARIO

RE: AMAR ARIF and MAIRA KHALID Applicants

AND: DAISY MWEBI Respondent

BEFORE: Ricchetti, J.

COUNSEL: O. Chaudhry for the Applicants L. Campbell and T. Moum for the Respondent

HEARD: August 17, 2018

ENDORSEMENT

The Motion

[1] This is a motion by the Respondent to set aside a CPL granted by Master Jolley on August 13, 2018 (“Order”) with regards to 5050 Intrepid Drive, Unit 03, Mississauga (“Property”).

[2] The motion was heard on August 17, 2018. At the conclusion of the motion, this court granted the order sought on this motion (discharging the CPL) and costs to the Respondent in the amount of $4,000 plus HST for fees and $406 (all inclusive) for disbursements, payable forthwith. This court advised that reasons would follow. These are those reasons.

Background

[3] The Respondent, Daisy Mwebi (“Vendor”) is the owner of the Property.

[4] The Property is a condominium townhome in a townhome complex in the Churchill Meadows area of Mississauga. It is a two-bedroom, three washroom, upper-level, stacked townhouse in a complex of 80 or 90 units.

[5] On June 26, 2018, the Applicants, Amar Arif and Maira Khalid (“Purchasers”) entered into an Agreement of Purchase and Sale (“APS”) for the purchase of the Property. The APS was to close on August 3, 2018.

[6] There were a number of conditions for the completion of the APS.

[7] On July 11, 2018, there was an amendment to the APS extending the time for the delivery of a status certificate. This amendment provided that, upon receipt of the status certificate, the Purchasers had two days, upon being satisfied, to waive this condition, failing which, the APS became null and void.

[8] The status certificate was delivered on July 13, 2018.

[9] On July 16, 2018, after having received the status certificate, the Purchasers submitted a further amendment to the APS which provided that the status certificate condition be deleted and inserting a term requiring the Vendor to clear all maintenance and common expense before closing.

[10] The Vendor refused to agree to the amendment.

[11] At the end of the day on July 16, 2018, the two days for waiver of the condition had expired.

[12] The Vendor took the position the APS had been terminated (i.e. become null and void) in accordance with the terms of the APS as amended since the Purchasers had not waived the status certificate condition. The Vendor proposed to return the deposit.

[13] The Purchasers took the position the APS remained valid and binding despite the lack of a waiver of the status certificate.

[14] The Vendor proceeded to re-list the Property.

[15] On approximately July 19, 2018, the Vendor resold the Property.

[16] The Purchasers did not tender on August 3, 2018 despite taking the position the APS remained valid and binding.

[17] On August 13, 2018, the Purchasers being aware that the “new” sale was going to close on August 17, 2018, the Purchasers brought an ex parte motion seeking a CPL. The motion was granted by Master Jolley.

[18] The “new” sale of the Property is scheduled to close this day (August 17, 2018) to a bona fide third arm’s length third party.

Analysis

[19] The Order must be set aside. There are a number of reasons for coming to this conclusion and they include:

1. Lack of Full and Frank Disclosure on the Ex Parte Motion

[20] The materials in the ex parte motion failed to fully disclose that the Purchasers had proposed an amendment to the APS which amendment was rejected by the Vendor. While the motion materials do reference an “amendment”, it is fundamental to the exercise of the court’s discretion to grant the CPL that there was a proposed amendment by the Purchasers not only relating to the status certificate but also seeking to insert a new term into the APS. The amendment was not included in the ex parte motion materials.

[21] I am not prepared to state this was deliberate non-disclosure, but it was nevertheless disclosure which was deficient on a material point.

2. Uniqueness of the Property

[22] The ex parte motion materials fail to establish that the Property is “unique”. The fact is that it is a townhouse in a townhouse complex. There are many townhouse complexes in Mississauga and this area. The Purchasers state that it was purchased for a good price and has lots of light, does not mean that Property is unique. I am not persuaded that there was sufficient evidence to establish this critical factor on the ex parte motion.

[23] In any event, the evidence before this court demonstrates that the Property is not unique. There are townhouse units available in the same complex and in the general area. It was agreed by the Purchasers' counsel at the motion that, at the right price, similar townhomes (including upper stacked townhomes) are available in the same general area. The fact that the price in the APS is a “good price” has never been sufficient to constitute “uniqueness” entitling a purchaser to specific performance. If the Purchasers are correct, they will have a claim for damages against the Vendor.

[24] I have serious doubt that specific performance would be available at trial or would be the only fair and just remedy in these circumstances.

3. Delay in seeking the CPL

[25] Between July 18 and July 20, 2018, the Purchasers became aware of the Vendor’s relisting of the Property. At least as early as July 20, 2018, the Purchasers knew that the Vendor had re-sold the Property to another buyer.

[26] Why would the Purchasers wait to seek a CPL knowing the Property was for sale or shortly after they became aware it was sold? No reasonable explanation was provided by counsel. Why not advise the Vendor on July 16, 2018 that the Purchasers were seeking a CPL to prevent any further sale of the Property.

[27] There is clearly a significant, unexplained delay in seeking the CPL which favours granting the motion to vacate the CPL.

[28] What is more troubling is that the Purchasers moved ex parte for a CPL on August 13, 2018 when they knew that the Property was to close on August 17, 2018. This smacks of waiting until maximum leverage could be exacted by the Purchasers since the Purchasers knew 24 days earlier that the Property had been resold but waited until the eve of closing the “new” sale. I note that the fact the “new sale” was to close on August 17, 2018 was not disclosed on the ex parte motion.

[29] Essentially, the Purchasers did nothing, let the Vendor sell the Property and on the eve of the closing obtained a CPL to disrupt the “new sale”. There is no doubt that the Purchasers would know that this put the Vendor at risk for damages to the new purchaser if the Vendor failed to close the “new sale”. This factor also favours granting the motion to vacate the CPL.

4. A bona fide third party purchaser

[30] There is a bona fide third party purchaser who is scheduled to close today. Permitting the CPL to remain on title would no doubt prejudice this purchaser. Moreover, the failure to close the “new sale” will likely result in legal proceedings involving the Vendor and the third party purchaser.

[31] Therefore, the balance of harm if the CPL is allowed to remain will be much greater on the Vendor than on the Purchasers whose claim in damages will remain.

[32] All of these factors strongly favour granting the motion to vacate the CPL.

Other Issues Raised in the Motion

[33] The Purchasers submit that the Vendor is impecunious because the net equity will not be significant, after paying outstanding condo fees and an outstanding judgment on title. As a result, the Purchasers are concerned a successful claim for damages will not be recoverable. The difficulty with this submission is that there is no other evidence as to other assets or liabilities of the Vendor. Impecuniosity is therefore a speculative submission. Further, to grant execution (the effect of permitting the CPL to remain) prior to the determination of the merits of the competing positions, is not appropriate or just given these circumstances and evidence.

[34] I reject the submission that because the Vendor’s agent is now the buyer and seller agent that the circumstances suggest some impropriety which should be considered. Without more evidence, this fact is neutral.

CONCLUSION

[35] The motion is granted with costs as set out above.

Ricchetti, J. Date: August 20, 2018