Court File and Parties
COURT FILE NO.: CV-16-565971 DATE: 20190403 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Brenda King, Applicant AND: 2397043 Ontario Inc. O/A Bindas Capital, Respondent
BEFORE: Madam Justice O’Brien
COUNSEL: Brenda King, Self-Represented Amandeep Sidhu, Counsel for the Respondent
HEARD: March 27, 2019
Judgment
[1] This was a motion brought by Brenda King with respect to property from which she was recently evicted. Ms. King was not represented by counsel at the hearing, and has not framed her request in precise legal terms, but it is clear she is seeking relief from forfeiture. Ms. King and her children had been the occupants of 59 Leameadow Way, Toronto, Ontario (the “Property”), until they were evicted as a result of the matters in dispute before me. The Defendant is the owner of the Property. Ms. King would like the opportunity to purchase the Property pursuant to an earlier agreement she had with the Defendant.
[2] Ms. King’s situation is sympathetic. She has invested her savings into making a down payment on the Property. She is a single mother living with two sons, while her daughter also lives with her on some weekends. However, for the reasons set out below, I do not consider it appropriate to exercise my discretion to grant her relief from forfeiture.
Facts
[3] Ms. King was a tenant of the Property when, on April 9, 2013, she entered into an option to purchase agreement with a former owner of the property, MTM Investment Group (“MTM”). By the option to purchase agreement, Ms. King would be entitled to purchase the Property at the end of the occupancy agreement, which was on April 8, 2017. Ms. King provided a down payment in the amount of $32,775.00, which was non-refundable. Ms. King advises that she made a further payment of $5,000. By this agreement, she was entitled to purchase the Property for a sum of $388,300.54.
[4] On February 3, 2016, the Defendant, Bindaas Capital, purchased the Property from MTM. A term of the Agreement of Purchase and Sale was that the contract remained in place with Ms. King, such that she maintained the option to purchase the Property.
[5] On February 10, 2016, Ms. King and the Defendant entered into an agreement amending the lease to own (“Amending Agreement”), which varied some of the terms of the option to purchase agreement, including by increasing the purchase price, decreasing the monthly lease payments, and changing the maturity date to July 1, 2016.
[6] Ms. King agrees that during a period of approximately five months after entering into the Amending Agreement, she did not make her monthly lease payments. This was because Ms. King’s mother was ill with cancer and Ms. King took some time off work.
[7] There is a dispute between the parties as to whether Ms. King subsequently provided notice and/or had funds to purchase the Property. It is clear that the Defendant considered Ms. King to be in default of her occupancy agreement and attempted to have her evicted on September 10, 2016. This resulted in proceedings at the Landlord and Tenant Board, though these did not cause Ms. King to be evicted.
[8] The parties subsequently entered into Minutes of Settlement, which were incorporated into a court order. The court order, dated July 17, 2018 (the “Order”), provided that Ms. King had the option to purchase the Property on September 26, 2018 for $450,000. By the terms of the Order, Ms. King also was responsible for any arrears of rent, property taxes, and utilities.
[9] On the closing date of September 26, 2018, Ms. King did not provide the funds for the Property. Ms. King claims that there was a dispute about the Statement of Adjustments. However, as discussed below, it is clear she did not have the funds available in any event. Accordingly, the Defendant subsequently exercised a right under the Order, which provided that if Ms. King did not purchase the Property on September 26, 2018, she released all interest to the Property. The Defendant then had Ms. King evicted from the Property.
[10] Needless to say, this has been extremely difficult for Ms. King, who invested savings into the Property. She wishes to regain occupancy and the opportunity to purchase the Property.
Law
[11] Section 98 of the Courts of Justice Act, R.S.O. 1990, c. C.43 authorizes a court to grant relief against forfeiture, on such terms as are just. However, relief from forfeiture is to be granted sparingly and the party seeking the relief bears the onus of making the case for it. (Ontario (Attorney General) v. 8477 Darlington Crescent, 2011 ONCA 363, at para 87).
[12] In exercising its discretion to grant relief from forfeiture, a court must consider three factors: (i) the conduct of the Applicant; (ii) the gravity of the breach; and (iii) the disparity between the value of the property forfeited and the damage caused by the breach: Kozel v. The Personal Insurance Company, 2014 ONCA 130, at para. 31; Shah v. Southdown Towns Ltd, 2017 ONSC 5391 (“Shah”), at para. 31.
Application to this Case
[13] It is not appropriate, in my view, to grant Ms. King relief from forfeiture in this case.
[14] I accept the Defendant’s argument that Ms. King breached the terms of the Minutes of Settlement and Order by not providing funds on the date of closing on September 26, 2018. Although Ms. King says that her inability to provide funds related, in part, to what she considered to be incorrect information in the Statement of Adjustments, the Defendant has pointed out that, in any event, Ms. King did not have a real estate lawyer in place to close the deal on September 26, 2018. In mid-September, counsel for the Defendant contacted Trent Morris, a lawyer who previously had been representing Ms. King, to provide the Statement of Adjustments. Mr. Morris advised that he was not a real estate lawyer and that the Defendant should not try to “tender the transaction upon him.” The Defendant was not advised of any other lawyer representing Ms. King and was not contacted by anybody on behalf of Ms. King on or before September 26, 2018.
[15] In addition, on October 9, 2018, almost two weeks after closing, counsel for the Defendant received a telephone call from City Can Financial, advising that they were seeking information on the purchase of the Property. In other words, Ms. King was still trying to but had not arranged financing almost two weeks later. Ms. King also admitted on cross-examination that she would not have been in a position to pay the land transfer taxes, nor the arrears in property taxes (as required by the Order) on closing.
[16] Given that Ms. King was self-represented at the hearing before me, I gave her some leeway to provide the court with further information about her current ability to complete the purchase, should she be provided with the opportunity. Although it appears Ms. King has contacted lenders, there is no clear evidence that she is in a position to obtain the appropriate financing, nor is there anything to suggest that she would have the ability to pay the lender’s fee, a real estate lawyer, property tax arrears, etc. Any relief provided by the court at this point is likely to prolong Ms. King’s attempts to reclaim the Property without success.
[17] I will turn now to the test for relief from forfeiture. In terms of the first aspect of the test, the Applicant’s conduct, it appears Ms. King made some efforts to comply with the terms of the Order, but she was not able to do so. She did not have a real estate lawyer in place and was not able to provide the funds required to purchase the Property. She clearly was in breach of her obligations. On the second aspect of the test, her breach was significant. She did not comply with her key obligation under the Order, which was to provide the funds on September 26, 2018. This was not an error or oversight that she subsequently sought to remedy. She did not have the funds. On the third part of the test, the value of the property forfeited is not insignificant. It consists of Ms. King’s down payment in the amount of $37,775.00 and perhaps some increase in the value of the Property, although this has not been proven. (See Shah, supra, at para. 75). However, on the other side, the Defendant has been prevented from selling the Property pending a determination of this motion and has been required to continue to make the mortgage payments. Most importantly, though, based on the evidence, I am not satisfied that Ms. King has the funds to complete the transaction now or at any time in the near future if given a reasonable chance to do so. In other words, granting Ms. King relief from forfeiture will not assist, as she does not appear to be able to afford to complete the purchase.
[18] Therefore, this motion is denied. If the Defendant seeks costs, it may provide a costs outline and submissions on costs of no more than two pages within 14 days of the release of this decision. The Plaintiff then will have 14 days to respond. After serving on the opposite party, cost submissions can be sent to my judicial assistant, Anna Maria Tiberio, at annamaria.tiberio@ontario.ca.