Court File and Parties

COURT FILE NO.: Cv-17-586497 MOTION HEARD: 20180601 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Kavaskar Thiyagarajah, Plaintiff AND: Abhivaman Paranirupasigam, Suganya Parantrupasingam, also known as Suganya Kamal, Pradeep Shokeen, Homelife Superstars Real Estate Agent Limited, Milborne Real Estate Inc., Monarch Waterview Development Limited, and Mattamy Homes, Defendants

BEFORE: Master P. T. Sugunasiri

COUNSEL: C. Muccilli, Counsel for the Plaintiff/Moving Party L. Brazil, Counsel for the Defendants Monarch Waterview Developments Limited and Mattamy Homes Limited, Defendants/Responding Parties R. Ahmed, Counsel for Abhi and Suganya Paranirupasingam

HEARD: June 1, 2018

Reasons for Decision

[1] The Plaintiff seeks a certificate of pending litigation (“CPL”) against a condominium unit that he intended to purchase. Due to potential fraud, the transaction failed to close and the Plaintiff has brought the within action. The main defendant to the motion is Monarch. Counsel for the Paranirupasingams attended on a watch brief and made no submissions other than to caution the court not to make findings of fact on the merits of the case.

[2] For the reasons that follow, I dismiss the Plaintiff’s motion with costs to the Monarch and Mattamy defendants. While I am sympathetic to the Plaintiff, It is not in the interest of justice to grant leave to issue the CPL.

Facts:

[3] The Plaintiff, Kavaskar Thiyagarajah (“Kava”), and the Defendant, Abhivaman Paranirupasigam (“Abhi”) have known each other since university. In the summer of 2010, Abhi and Kava discussed Abhi’s business.

[4] Kava and Abhi agreed that Kava would assist Abhi with his business goals for approximately two years in exchange for payment of $100,000 plus expenses. There was no written agreement documenting this arrangement.

[5] During this time, Kava was looking to purchase his own home. Abhi told him about a condominium project at 56 Anne Craig Drive in the City of Toronto (“Condo”). Kava hired Abhi’s contact Pradeep Shokeen (“Pradeep”), as his real estate agent.

[6] On August 2, 2011, Kava entered into an agreement of purchase and sale (“APS”) for the Condo with Monarch Waterview Development Limited (“Monarch”). The purchase price of the Condo was $403,990 and Kava was required to pay a deposit of $80,800 amortized over four equal installments.

[7] Upon signing the APS, Kava provided the first installment of $20,200 but the cheque was returned NSF. According to Kava, he was expecting funds from Abhi for the work on his business goals.

[8] On October 28, 2011, Monarch received a replacement cheque from Abhi. There is no dispute that Abhi paid the entire deposit either personally or through corporations. On the same day that Abhi paid the first deposit, Monarch received an amendment to the APS (“amended APS”) adding Abhi’s sister, Suganya Parantrupasingam (“Suganya”) as a co-purchaser of the Condo.

[9] As far as Monarch knew, the amended APS was signed by Kava in the presence of his real estate agent, Pradeep. In turn, Monarch signed the amended APS when it received it on October 28, 2011.

[10] The first stage of the purchase transaction was set to close on May 3, 2017. In the meantime, Kava was involved in choosing the finishes and upgrades to the Condo. In March of 2017, the Condo’s building manager contacted Kava to register him as the unit’s owner, arrange his parking spot and provide him with his FOB. Kava also paid the land transfer tax associated with the Condo and voted at the Condo’s board meetings. He paid common element fees from June to September of 2017.

[11] On March 21, 2017, Monarch mentioned to Kava that it had written to Suganya regarding the closing. According to Kava, this was a surprise. As far as he was concerned, he was to be the sole owner and his signature had been forged.

[12] As a result of this issue, Monarch extended the closing date from May 3, 2017 to May 25, 2017. Kava retained counsel in April and attempted to resolve the dispute. However, Kava and Suganya failed to close on May 25, 2017. Monarch could not provide closing documents without knowing the rightful purchaser and it did not receive any direction from Kava nor Suganya on the issue.

[13] Despite this default, Monarch further extended the closing date to June 16, 2017. Having received no further clarification or resolution with respect to the rightful purchaser, on August 17, 2017 Monarch advised both Kava and Suganya that it was treating the amended APS as terminated and were taking steps to sell the Condo.

[14] On September 20, 2017 Kava registered a caution on title. On September 20, 2017 Monarch’s counsel advised that Monarch would be willing to enter into a new agreement of purchase and sale if Kava and Suganya could resolve the issue of who the rightful purchaser was.

[15] On November 14, 2017, the plaintiff began this action claiming specific performance and an alternative claim for damages.

Law and Analysis:

[16] The parties agree that the test for a CPL when sought on notice is the same as the test for the discharge of a CPL. I agree with Monarch however that unlike in motions to discharge a CPL, the onus on this motion is on the Plaintiff as the moving party. [1]

[17] My colleague, Master McAfee, succinctly outlines the requisite principles that are to apply in contested motions to obtain a CPL: [2]

1. The threshold in respect of the "interest in land" issue in a motion respecting a CPL (as that factor is set out at section 103(6) of the Courts of Justice Act, R.S.O. 1990, c.C.43) is whether there is a triable issue as to such interest, not whether the plaintiff will likely succeed;
2. On a motion for a CPL, it is not appropriate to make findings of credibility or to conclusively determine the question of liability. The court considers whether on the whole of the evidence, a reasonable claim to an interest in land has been made out.
3. Where the plaintiff seeks specific performance, the court will review all of the evidence put forward by both parties and determine on the totality of evidence before it whether or not there is a triable issue;
4. In making this determination the court need not accept the pleadings or the affidavit evidence uncritically but will examine all of the evidence after cross examination to determine whether or not the claim has a reasonable prospect of success;
5. If there is a triable issue with respect to an interest in land, the court must look at all of the relevant factors including (i) whether the plaintiff is a shell corporation, (ii) whether the land is unique, (iii) the intent of the parties in acquiring the land, (iv) whether there is an alternative claim for damages, (v) the ease or difficulty in calculating damages, (vi) whether the damages would be a satisfactory remedy, (vii) the presence or absence of a willing purchaser, and (viii) the harm to each party if the CPL is or is not removed with or without security (“Dhunna factors”); and
6. The court’s overall goal is to consider the equities as between the parties and arrive at the just result.

[18] First, I am not persuaded that there is a triable issue with respect to Kava’s interest in the Condo. Kava argues that he has demonstrated a triable issue as he has provided evidence of an agreement which gave rise to the funds used to pay the deposit and that he “signed multiple agreements.” Those multiple agreements, however, clearly provide that Kava does not have an interest in the Condo until the Transfer/Deed is registered. Kava argued in reply that the APS was a “contract of adhesion” and that he had no bargaining power with respect to it. I was not provided with any case law or analysis on the point.

[19] In any event, even if Kava did have an interest as a prospective purchaser, that interest was lost when Kava failed to close the transaction. I find that Monarch provided multiple opportunities for Kava and/or Suganya to close. It was not for Monarch to resolve the dispute between them. I reject Kava’s argument that Monarch ought to have conducted further due diligence to ascertain the rightful purchaser. On the record before me, Monarch is an innocent party and had no such obligation. As noted by the Ontario Court of Appeal in Konjevic v. Horvat Properties Ltd., a purchaser cannot take advantage of his own default to the detriment of an innocent vendor. Kava attests in his reply affidavit that he was willing and able to close several times. However, Monarch could not have closed without the authorization of Suganya who, as far as Monarch was concerned, was a signatory to the amended APS. On the evidence, Monarch did not receive a direction from either Kava or Suganya to close exclusively with one or the other, or to close with both on title. This put Monarch in an untenable position.

[20] Kava also argued that Konjevic can be distinguished because the vendor did not know about the assignment of the agreement of purchase and sale to a third party. In the present case, there is a triable issue as to the extent of Monarch’s knowledge. In my view, for the purposes of this motion, Monarch is still an innocent vendor in the sense that it received an amended document that was purportedly signed by Kava, in front of his real estate agent. There is no evidence on the record that Monarch knows Suganya or participated in getting her name on the agreement other than to agree that a name could be added if the parties so desired.

[21] Having concluded that Kava has not raised at triable issue with respect to an interest in land, I need not consider the Dhunna factors. If I were to apply those factors and consider the overall equities as between the parties, I would still deny the CPL. I am, for example, not persuaded that the Condo is unique as it is understood in this context. The evidence is clear from both Kava and Monarch that there are other similar properties in the same location and an adjacent building that could have the same finishes and upgrades. Kava attests that he prefers to be on the 20th floor or higher in order to get the view. This is may be preferred but does not make the Condo unique. There may not be units currently available in the building that provide such a view but that does not mean that no such unit exists or will ever exist in the near future in the surrounding area or adjacent building. All of Kava’s explanations speak to desirability of the Condo rather than its uniqueness. [3] This case is readily distinguishable from McGrath v. BG Schickedanz Homes Inc. [4] in which the upgrades involved the installation of skylights, wiring for a stereo system throughout the two-storey unit, the addition of a smaller closet and the construction of a four-piece bathroom en-suite.

[22] Uniqueness is also not established by Kava’s argument that a comparable unit would now be significantly more expensive. Rather, it supports Monarch’s argument that damages would be an adequate remedy because Kava could recover the loss of the increase in value of the Condo. The fact that such a claim has not been made against Monarch is irrelevant. If Kava is successful in proving that the deposit monies were his, for example, he would have a claim of $80,800. He could also have a quantifiable claim for the loss of the increase in property value he would have enjoyed had the transaction closed. These are not difficult calculations and would compensate Kava for his loss of the Condo and allow him to purchase another. On the other hand, an order of specific performance could be unfair to Monarch who would be forced to sell a unit now worth over $500,000 for $403,990, through no fault of its own.

[23] I need not consider in detail, the effect of the “no-registration” clause. Even if I were to find that it is ambiguous or does not apply after the Condo obtained a PIN, it would be the only factor weighing in favour of the CPL. The overall justice of the case weighs against granting the CPL. I agree with Monarch that it will suffer greater prejudice if I grant the CPL. Monarch is currently unable to sell the Condo due to the caution and now the CPL motion. If I were to grant the CPL, it would have to continue to carry the cost of the unit pending the resolution of the action. In my view, this would be an unjust burden on Monarch given the circumstances of the case.

[24] The prejudice to Kava would be that his “dream” to own the Condo will not be fulfilled and he will have to pay a larger deposit give the increase in price of a comparable unit since 2011. He also states that his ability to come up with such a deposit is compromised because Abhi has not paid him for his services. While I am sympathetic to Kava and that he may be a victim of fraud, his issues with Abhi, Suganya and Pradeep have nothing to do with Monarch. It is also curious that he claims Abhi has not paid him. This runs contrary to the basis for his claim to an interest in the Condo. Kava alleges that even though Abhi paid the deposits, they were funds owing from Abhi to him and therefore amounted to being his own money.

Disposition:

[25] In any event, the fact that Kava may have been a victim of fraud does not justify tying Monarch’s hands and forcing it to hold a unit pending resolution of the action. There are other remedies available to Kava. For these reasons, I decline to exercise my discretion to grant leave to issue a CPL. Motion dismissed with costs.

[26] The parties also noted that there needs to be amendments to the names of Mattamy and Suganya in the title of proceedings and the Claim. I allow the amendment to change “Mattamy” to “Mattamy Homes Inc.” and “Suganya Parantrupasingam” to “Suganya Paranirupasingam”. I note that Abhi’s name may also be misspelled in the title of proceedings and in the Claim. I believe it should be “”Abhivaman Paranirupas ing am”. If I am correct, the parties may amend their pleadings to reflect the proper spelling.

Costs:

[27] Both parties provided me with costs outlines and made submissions at the hearing. Kava claims partial indemnity costs of $11,129.29. Monarch claims $18,852.23. The difference in amounts appears to be largely due to the difference in the volume of material and time spent by counsel on those materials. I find that Monarch’s more extensive materials were warranted as they greatly assisted the court in providing recent jurisprudence and fulsome argument. However, I take Kava’s point that there is some overlap between the two counsel involved and the summer student that warrants a discount. Taking into account the factors set out in Rule 57.01 and the reasonable expectation of the parties, I order Kava to pays costs to Monarch in the all-inclusive amount of $15,000 payable within 60 days of today’s date.

Original Signed Master P.T. Sugunasiri

Release Date: September 4, 2018

[1] See also 2511899 Ontario Inc. v. 221465 Ontario Inc., 2017 ONSC 5363 at para. 5 (Master McAfee) [hereainafter “2511”]. [2] Ibid. at paras. 5-8. [3] See for example 180 University Residential Limited Partnership v. Yours Asia Corp., 2014 ONSC 1761. [4] McGrath v. BG Schickedanz Homes Inc..