Court File and Parties

COURT FILE NO.: CV-16-563338 DATE: 2019-04-29 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: SARFRAZ WARRAICH, Plaintiff AND: AFTAB CHOUDHRY and NUZHA YASMIN, Defendants

BEFORE: Sossin J.

COUNSEL: Syed Abid Hussain, Counsel, for the Plaintiff Arnold Zweig, Counsel, for the Defendants

HEARD: January 21-25, 2019

Reasons for Judgment

Overview

[1] The plaintiff, Sarfraz Warraich (“Warraich”), brings this action against the defendants, Aftab Choudhry (“Choudhry”) and Nuzha Yasmin (collectively the “defendants”) for a declaration of an equitable interest in a residential property on Machockie Road in Toronto (the “Machockie Property”).

[2] The defendants hold legal title to the Machockie Property, which they purchased in 2012.

[3] Warraich relies on a purported arrangement, agreed upon shortly after the purchase of the Machockie Property, by which he invested funds to offset a portion of the defendants’ acquisition cost in exchange for a 50% share of the property. Under this alleged agreement, Warraich also would live in the property and pay 50% of the ongoing carrying costs, including a portion attributable to “rent”, until the requisite permits were obtained to renovate or rebuild the house so it could be sold at a profit.

[4] Choudhry denies the existence of such an arrangement and states that Warraich was a tenant in the Machockie Property, and nothing more.

[5] In their counterclaim, the defendants seek rental arrears, in addition to damages for losses flowing from the delay in redeveloping the property as a result of Warraich’s actions.

[6] In addition to this litigation, Choudhry separately brought two applications to the Landlord and Tenant Board (“LTB”) relating to this dispute, each of which subsequently was confirmed on judicial review by the Divisional Court.

[7] This case turns on how certain conversations, conduct and documents are interpreted. As the analysis of the evidence below confirms, there are elements of the accounts of both Warraich and Choudhry that are persuasive, and supported by the documentary evidence and testimony of other participants in the transactions at issue, while other aspects lack this foundation.

[8] For the reasons set out below, I find on a balance of probabilities that Warraich acquired an equitable interest in the Machockie Property in the Spring of 2012.

[9] I also find that Warraich was a tenant in the Machockie Property commencing in the Spring of 2012, at which time he began paying rent, as subsequently formalized through a rental tenancy agreement which Warraich and Choudhry entered into on March 1, 2013.

[10] Finally, I find that Warraich and Choudhry reached an agreement in writing in September 2016, to resolve the dispute. Under the terms of that agreement, Warraich agreed to give up his equitable interest in the Machockie Property to Choudhry for a payment of $184,500.00, which included a set-off for rental arrears, which Warraich acknowledged he owed Choudhry.

Factual and Procedural Background

[11] Warraich and Choudhry were friends. They both came to Canada from the same region of Pakistan. They met in 2009. Warraich was a contractor who was involved in renovating several properties for resale. Choudhry had a salaried position, but also worked as an electrician on several construction projects, including some where Warraich was an investor.

[12] Choudhry purchased the Machockie Property in March of 2012 for $519,000.00 and took out a mortgage in the amount of $415,200.00, and an additional bridge loan of $85,000.00.

[13] Choudhry had planned to sell his home in Richmond Hill and move with his family into the Machockie Property. When the Richmond Hill sale transaction fell through, Choudhry remained in his Richmond Hill home.

[14] In April, 2012, Warraich and his family moved into the Machockie Property. Warraich’s evidence is that his payments of rent from this period of time reflect an agreement by which he obtained a 50% equitable interest in the Machockie Property. Choudhry’s evidence is that his tenancy began at this time.

[15] A rental tenancy agreement was signed by Warraich and Choudhry and dated March 1, 2013.

[16] Between 2013 and 2015, Warraich and Choudhry engaged in a range of financial transactions outside the Machockie Property based on verbal agreements. In 2016, however, the relationship deteriorated, and the arrangements with respect to the Machockie Property became contentious.

[17] On September 2, 2016, in an effort to clarify their arrangements, Warraich and Choudhry signed a hand-written document, entitled “Trust Agreement.” Each party’s characterization of this agreement differs starkly.

[18] Subsequent to the “Trust Agreement”, Warraich instructed counsel to prepare a mortgage charge agreement based on his understanding of the Trust Agreement and provided it to Choudhry to sign. Choudhry refused to sign the document.

[19] On October 4, 2016, Choudhry initiated a process at the LTB, and a Notice of Termination of Tenancy was sent to Warraich.

[20] On November 1, 2016, Warraich initiated this action, seeking a range of remedies, including a declaration that Warraich is a one-half owner in the Machockie Property, compensatory damages of $270,000.00, damages for consequential losses of $75,000.00, and aggravated, punitive and exemplary damages of $100,000.00, in addition to pre-judgment interest and costs.

[21] On that same date, November 1, 2016, Choudhry brought two applications to the LTB – one for the payment of rent in arrears and eviction for non-payment of rent; and one for an eviction pursuant to demolition of the property.

[22] On November 7, 2016, Choudhry delivered a defence to the claim in this action, and a counterclaim.

[23] On December 14, 2016, the LTB granted the relief sought by Choudhry and ordered the eviction of Warraich from the Machockie Property, and the payment of rental arrears (LTB#1). On February 28, 2018, this decision was upheld by the Ontario Divisional Court.

[24] On December 4, 2017, the LTB granted the relief sought by Choudhry and ordered the eviction of Warraich from the Machockie Property for purposes of its demolition (LTB#2). On February 28, 2018, this decision also was upheld by the Divisional Court.

[25] On June 6, 2018, Justice Matheson of the Ontario Superior Court stayed the eviction of Warraich from the Machockie Property and made consequential arrangements between the parties pending the outcome of the action before this Court.

[26] At some point in December 2018, Warraich vacated the Machockie Property. In January 2019, Choudhry took possession of the Machockie Property.

[27] The trial of this action took place January 21-25, 2019.

[28] At the outset of the trial, Choudhry brought a motion for a declaration that some or all of the issues at trial were subject to issue estoppel given the findings of the LTB. That motion was dismissed (Warraich v. Choudhry et al., 2019 ONSC 629).

The Relationship between this action and the Decisions of the LTB and Divisional Court

[29] While I determined on the prior motion that the issues in this action are not subject to issue estoppel based on the findings of the LTB, the LTB’s analysis, the analysis of the Divisional Court reviewing LTB#1 and LTB#2 remains relevant both to the claim and counterclaim in this action.

[30] The LTB Member Anna Solomon (“Solomon”) found in favour of Choudhry in two separate decisions dealing with the two applications brought to the LTB:

a. the first decision, LTB#1, was issued on December 14, 2016, for eviction based on rental arrears; and b. the second decision, LTB#2, was issued on December 4, 2017, in which the LTB terminated the rental tenancy agreement and evicted Warraich on the basis that he was a tenant and the landlord, Choudhry, intended to demolish the premises and redevelop the Machockie Property.

[31] As part of her analysis in LBT#2, Solomon found that Warraich was not a co-owner under the Residential Tenancy Act, 2006, S.O. 2006, c. 17 (“RTA”).

[32] The interpretation of a “tenant” under the RTA is set out in s. 2(1) and reads as follows:

“tenant” includes a person who pays rent in return for the right to occupy a rental unit and includes the tenant’s heirs, assigns and personal representatives, but “tenant” does not include a person who has the right to occupy a rental unit by virtue of being,

(a) a co-owner of the residential complex in which the rental unit is located, or (b) a shareholder of a corporation that owns the residential complex; (“locataire”)

[33] In other words, if Solomon had found Warraich to be a co-owner of the Machockie Property for the purposes of the RTA, then pursuant to the RTA, Warraich could not also be a tenant.

[34] Put differently, if Warraich was a co-owner of the Machockie Property, the LTB would lose its jurisdiction over Choudhry’s applications.

[35] This decision on LTB#1 was judicially reviewed by the Divisional Court in Warraich v. Choudhry, 2018 ONSC 1275. The court upheld the findings of the LTB as reasonable. Writing for the court, Justice Wilton-Siegel specifically held that the question of equitable co-ownership was raised in the action before this Court but was not properly before the LTB (at paras. 17-21):

[17] These are very separate proceedings that can proceed without any risk of conflicting decisions. In particular, a finding that the appellant is a lessee under the Lease does not in any way affect, much less determine, his claim that he has an equitable interest in the property as a co-owner.

[18] For this issue, the definition of a “tenant” under the Act is relevant:

“ tenant” includes a person who pays rent in return for the right to occupy a rental unit and includes the tenant’s heirs, assigns and personal representatives, but “tenant” does not include a person who has the right to occupy a rental unit by virtue of being,…(a) a co-owner of the residential complex in which the rental unit is located …

[19] Given this definition, the Board had jurisdiction unless it had notice that the appellant was occupying the premises pursuant to a “right to occupy a rental unit by virtue of being… a co-owner of the residential complex in which the rental unit is located …” In this case, the appellant was not registered on title as a co-owner of the property and there was no final determination in the Superior Court action that he was a co-owner. Accordingly, the Board had no notice that the appellant was in occupation by virtue of a right to occupy the premises as a co-owner. Consistent with the decision in the companion action under court file #732/17, the Board therefore had jurisdiction in this matter. The only jurisdictional issue before it was whether the appellant was a “person who pays rent in return for the right to occupy a rental unit.” Given the evidence before the Board, the Board decision that the appellant was a tenant for the purposes of the Act was not only reasonable but correct.

[20] The appellant argues that, having been apprised of the existence of the Superior Court action, the Board should have gone on to inquire into the nature of that action. I do not agree. In order to address its jurisdiction, the Board is required to establish whether or not an alleged tenant is a registered co-owner or has been found to be a co-owner in a final judgement of the Superior Court. The nature of the appellant’s claim, and any view of the merits of that claim, are matters that are beyond the jurisdiction of the Board.

[21] Further, to the extent that the appellant seeks to avoid the eviction order on some basis arising out of his alleged ownership, he can seek a stay in the Superior Court action. Similarly, if he has been wrongly found to owe money to the respondent by the Board because he is found to be a co-owner in the Superior Court action, he can make a claim for damages in that proceeding or otherwise. There is, however, no basis for indefinitely deferring the Board proceeding merely because he asserts an equitable ownership interest that has not been proven. In this regard, it is also relevant that the appellant’s request before the Board was for an adjournment rather than for a stay of the proceeding before the Board.

[36] In the course of her reasons on LTB#2, Solomon addressed Warraich’s claims of ownership. She concluded (at para. 6):

Based on the evidence presented at the hearing, I am satisfied on a balance of probabilities that the Landlord and his wife are the only owners of the residential complex. There was insufficient evidence before me to establish that the Tenant has any ownership rights or interest in the property.

[37] This decision of Solomon in LTB#2 also was judicially reviewed by Warraich in the Divisional Court in Warraich v. Choudhry, 2018 ONSC 1267.

[38] Once again, the Divisional Court upheld the finding of the LTB as reasonable. And once again, the Divisional Court emphasized that the question of equitable co-ownership was not properly before the LTB. Writing for the Court, Thorburn J. held (at paras. 36-43):

[36] The only evidence adduced by the Appellant to support his claim that he was a co-owner was the payment of $62,000.00, the monthly payments from 2012 to 2016 and the draft agreement that the Respondent refused to sign.

[37] The Board held that the unsigned mortgage agreement the Appellant had drafted was insufficient to establish that he was a co-owner and that the cheques he provided the Respondent, were “insufficient evidence to prefer one party’s explanation for … the other.”

[38] The Board found that, “There is no convincing evidence before me to establish that the Tenant is an owner of the residential complex, which would exclude him from the definition of ‘tenant’”. The Board therefore concluded that the Appellant was not a co-owner occupying the premises but was a tenant occupying the premises within the meaning of the Act.

[39] The decision of an expert tribunal interpreting the provisions of its home statute is entitled to deference. However, the rights of landlords and tenants are restricted by statute, and there is no recourse to the equitable jurisdiction of the Superior Courts. (Metro Housing Corp v. Ganitano, 2014 BCCA 10).

[40] In this case, the Appellant was not registered on title as a co-owner nor had the Superior Court determined that he had an equitable interest in the property. However, whether or not the Board considered legal ownership only or both legal and equitable ownership in this context, the result would not have been different.

[41] If the Board could consider only legal title, it is clear that the Appellant had no legal title to the property. If the Board made a determination that the Appellant had no legal or equitable ownership interest, the Board decided that it was not satisfied on the evidence before it that there was any ownership interest. Moreover, the Board made it clear that its determination that the Appellant was not a “co-owner” was made only for the purpose of determining whether the Appellant was a “tenant” within the meaning of section 2 of the Act, not to address any rights or obligations flowing from an ownership interest.

[42] The Board’s decision was therefore reasonable even if it erred in also taking into account indicia of equitable ownership in reaching its decision that the Appellant was not a co-owner.

[43] On the basis of the tenancy agreement and other evidence of tenancy set out above, and the uncontroverted evidence that there was no legal ownership interest, we find the Board’s decision that the Appellant was a “tenant” within the meaning of the Act was reasonable.

[39] In light of the fact that the Divisional Court twice indicated that the issue of equitable co-ownership was not resolved by the LTB, and my finding on the preliminary motion that this issue was not subject to issue estoppel, Warraich’s alleged purchase of an equitable interest in the Machockie Property remained a central issue at trial.

Analysis

[40] There are three key questions to be addressed in this case:

a. Did Warraich and Choudhry enter into an oral agreement in 2012 for Warraich to purchase a 50% (or other) interest in the Machockie Property?; b. Did Warraich and Choudhry enter into a valid rental tenancy agreement in 2013?; and c. Did the written Trust Agreement of September 2, 2016 resolve Warraich’s interest in the Machockie Property?

[41] I address each question in turn.

(a) Did Warraich and Choudhry enter into an oral agreement in 2012 for Warraich to purchase a 50% (or other) interest in the ownership of the Machockie Property?

[42] Subsequent to the purchase of the Machockie Property, Choudhry received $47,000.00 in two cheques from Warraich’s business partner, Shahid Awan (“Awan”). Warraich testified that Awan owed him money and rather than receiving payment directly, he directed Awan, with whom he had several real estate investments, to make these payments to Choudhry as a portion of his $62,000.00 investment in the Machockie Property.

[43] The evidence is uncontroverted that Choudhry received two cheques totalling $47,000.00 from Awan, dated August 13, 2012 (for $10,000.00) and April 16, 2013 (for $37,000.00).

[44] Awan’s testimony is that the two cheques from him to Choudhry (totalling $47,000.00) were provided on behalf of Warraich as an investment in the Machockie Property.

[45] Warraich testified he made a further investment of $15,000.00 in the Machockie Property by contributing that amount as part of a down payment on a property located at 177 Waterloo Rd. (the “Waterloo Property”) which purchased a share in the Waterloo Property for Choudhry. Warraich himself was a one-third partner in that project with Awan. Warraich gave evidence that, based on the $15,000.00, Choudhry obtained a 24% interest in Warraich’s share of the Waterloo Property.

[46] This payment appears to be reflected in a summary document of Choudhry’s, dated October 18, 2014, which refers to a “$15,000.00” down payment.

[47] Warraich testified that he directed or paid a total of $62,000.00 through these three payments in exchange for a 50% share in the Machockie Property.

[48] Choudhry testified that these two cheques were payment for electrical services on properties that Awan was redeveloping. While it is not contested that Choudhry provided services on those projects, Warraich and Awan assert this was for the purpose of enabling Choudhry to gain experience towards certification. There is no corroborating evidence of any contract for these services, or that the cheques were related to services performed.

[49] There is evidence that Warraich and Choudhry were engaged in a number of business and financial transactions over this period, including investments in another property and personal loans. Some of these transactions are disputed, while others are not. These transactions appear to be the result of oral agreements, consistent with the assertion by Warraich that he and Choudhry entered into an oral agreement that Warraich was purchasing a share in the Machockie Property with a view to acting as partners with Choudhry for the property’s redevelopment, and sale.

[50] I find that these three payments in the amount of $62,000.00, which were made after Choudhry’s acquisition of the Machockie Property, represented funds directed by Warraich to Choudhry for the purpose of investing in a share of the Machockie Property.

[51] Lemcad is a business operated by Leo Mastrandrea (“Mastrandrea”) which provides planning, survey, design and consulting services relating to the redevelopment of real estate. It is not disputed that Warraich paid Lemcad $20,025.88 for consulting services in relation to obtaining permits for the redevelopment of the Machockie Property. Not only did Warraich retain the services of Lemcad for the Machockie Property, but Warraich remained the principal contact for Lemcad with respect to the Committee of Adjustments process. Warraich testified that retaining Lemcad was directly related to his equitable interest in the Machockie Property.

[52] Mastrandrea testified that he was engaged by Warraich as a “co-owner” in the Machockie Property. He had worked with Warraich on other properties in which there was a single person registered as the owner of the property and one or more partners who were investors in the property.

[53] Mastrandrea’s testimony makes clear that his understanding of Warraich’s interest in the Machockie Property, however, primarily came from Warraich himself.

[54] Choudhry gave evidence that Warraich knew Mastrandrea from other projects and so it made sense for Warraich to retain Lemcad on Choudhry’s behalf. This role was also consistent with Choudhry’s testimony that he expected Warraich would play the role of general contractor in the redevelopment of the Machockie Property.

[55] Mastrandrea prepared materials and attended two unsuccessful City of Toronto Committee of Adjustment hearings in 2014 and 2015. Finally, after a successful appeal to the Ontario Municipal Board in June of 2016, building permits for the Machockie Property were obtained in September 2016.

[56] Lemcad’s invoices for this work on the Machockie Property list Choudhry as the party retaining his services.

[57] I view the fact that Warraich was Mastrandrea’s contact and invoices were sent to Choudhry at the Machockie Property address (where he did not live, but Warraich did) as further indication of Warraich and Choudhry’s collaboration in developing the Machockie Property. Additionally, Mastrandrea’s email on August 18, 2016, enclosing the final architectural drawings and invoice for the Machockie Property, was sent to them both. Mastrandrea wrote, “Dear Aftab [Choudhry] and Sarfraz [Warraich], See attached drawings submitted for permit and final invoice…”

[58] In light of the evidence, I find that Warraich undertook extended efforts to retain and work with a planner in order to obtain permits for the renovation and development of the Machockie Property because he had an interest in the property, not simply as a tenant living in the property, or in the capacity as a potential contractor for Choudhry on the redevelopment project, or purely as a friend of Choudhry.

[59] As the Ontario Court of Appeal has held, the issue of whether a valid and binding oral agreement exists does not depend on the existence of a formal written document between the contracting parties (see for e.g., Mountain v. TD Canada Trust Company, 2012 ONCA 806, 112 O.R. (3d) 721 (“Mountain”) at para. 66, citing Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 79 D.L.R. (4th) 97 (Ont. C.A.), at pp. 103-104).

[60] I find that Warraich and Choudhry entered into a valid and binding oral agreement in March 2012, shortly after Choudhry’s purchase of the Machockie Property, and after his unsuccessful effort to sell his home in Richmond Hill created a need for an investor to provide additional capital.

[61] This transaction fits within the scope of a “purchase money resulting trust,” which is described by Rothstein J., in Nishi v. Rascal Trucking Ltd., 2013 SCC 33, [2013] 2 S.C.R. 438 at 441 in the following terms:

A purchase money resulting trust arises when a person advances funds to contribute to the purchase price of property, but does not take legal title to that property. Where the person advancing the funds is unrelated to the person taking title, the law presumes that the parties intended for the person who advanced the funds to hold a beneficial interest in the property in proportion to that person’s contribution. This is called the presumption of resulting trust.

[62] While Warraich’s contribution to the purchase of the Machockie Property took place after the actual sale of the property and after the defendants had taken legal title to the property does not alter the presumption that the parties intended for Warraich to hold a beneficial interest in the Machockie Property.

[63] I do not find a sufficient basis, however, for Warraich’s argument that these funds purchased a 50% share in the Machockie Property.

[64] While Awan and Mastrandrea support the fact that Warraich was an investor and the holder of an interest in this property, only Warraich asserts that his share was 50%. There is no documentary support for this assertion.

[65] Because the oral agreement of Spring 2012, which created Warraich’s equitable interest in the Machockie Property was superseded by the written Trust Agreement of 2016, which ascribed a specific value to Warraich’s interest in the Machockie Property, it is not necessary to reach a conclusion on the question of Warraich’s specific share in the Machockie Property through this initial $62,000.00 contribution.

[66] I also do not find a basis for Warraich’s argument that his ongoing rental payments were in fact designed to offset carrying costs of the property. There is no evidence that Warraich knew the carrying costs, or that Choudhry calculated these costs with a view to Warraich’s contribution. Rather, as set out below, both parties understood these monthly payments as “rent.”

[67] To conclude, I find that Warraich and Choudhry entered into an oral agreement in March 2012, under which Warraich agreed to pay Choudhry $62,000.00 for an interest in the Machockie Property (the “2012 Oral Agreement”). Warraich and Choudhry also agreed that Warraich would retain Lemcad for assistance in obtaining permits for the redevelopment of the property, and that at least initially, Warraich would cover the costs of these services. At the same time, for the reasons below, Warraich agreed to pay rent and a portion of the utilities to Choudhry as a tenant in the Machockie Property.

(b) Did Warraich and Choudhry enter into a valid rental tenancy agreement in 2013?

[68] The rental tenancy agreement was signed by Warraich and Choudhry on March 1, 2013 and there is no dispute that it was signed by both parties. There is a dispute, however, as to the meaning of the agreement.

[69] Choudhry’s evidence is that he proposed that he and Warraich sign the rental tenancy agreement when it became clear that the permits for the demolition or renovation of the Machockie Property would take time, and he wanted to clarify rights and responsibilities as between himself and Warraich. He denies that Warraich contributed to the carrying costs of the Machockie Property and instead characterizes the additional contributions by Warraich as fulfilling a commitment to a share of the utility costs.

[70] On its face, the rental tenancy agreement signed by Warraich and Choudhry reflects a mutual understanding that Warraich was the tenant and Choudhry the landlord of the Machockie Property.

[71] Warraich testified that he was misled and only agreed to sign the rental tenancy agreement on Choudhry’s request as a favour in order to provide Choudhry with a tax advantage. Warraich further gave evidence that the parts of the form to be filled in by the landlord and tenant were blank when he signed it, and that Choudhry filled those parts in afterwards.

[72] Zaheer Ahmed (“Ahmed”) testified that in April 2013, he sent a blank rental tenancy agreement to Choudhry, which supports the assertion by Warraich that the document was not actually signed on March 1, 2013.

[73] By contrast, Choudhry’s brother, Ashfaq Choudhry, testified that the rental tenancy agreement was not blank when Warraich signed it, and that Warraich signed it in his presence in the basement of the Machockie Property.

[74] Warraich may well have believed there was some ulterior purpose to the rental tenancy agreement. Further, the document may not have actually been signed on March 1, 2013. Nonetheless, I am satisfied Warraich understood that he was formalizing his status as a tenant in the Machockie Property. I do not find any basis to conclude that this rental tenancy agreement was invalid.

[75] I find that prior to the execution of a written rental tenancy agreement, for the period between April 2012 and February 2013, Choudhry and Warraich were parties to an oral agreement providing for the rental of the Machockie Property. After March 1, 2013, that agreement was superseded by the rental tenancy agreement.

[76] In addition to signing the rental tenancy agreement, Warraich himself referred to the monthly amounts he provided to Choudhry as “rent,” including in a text from September 1, 2016, and he never challenged Choudhry’s characterization of these payments as rent in several text exchanges in this same period.

[77] Choudhry claimed the monthly amounts paid by Warraich as “rental income” on his tax returns.

[78] On a number of occasions in his testimony at trial, Warraich reiterated his understanding that he did not expect to live in the Machockie Property “for free”.

[79] There were also additional amounts paid by Warraich to Choudhry relating to the rental of the Machockie Property. In a text message from April 2016, Choudhry referred to an “end of year 50% bills share” of $1,531.00.

[80] Warraich asserts these payments were contributions to the carrying costs of the property, and relate to his ongoing 50% interest in the property. Choudhry asserts these payments reflected a reconciliation of the estimated cost of utilities with the actual costs of utilities, which were to be shared on a 50/50 basis.

[81] I am satisfied that the evidence is more consistent with the characterization of these costs as a reconciliation of utilities than as a portion of the carrying costs of the Machockie Property.

The Relationship Between Tenancy and an Equitable Property Interest

[82] I do not view the finding that Choudhry and Warraich were in a landlord-tenant relationship to be inconsistent with the above conclusion that Warraich also had an equitable interest in the Machockie Property.

[83] While the RTA makes clear that the definition of a “tenant” for purposes of that legislation excludes co-owners, I am not concerned here with the enforcement of the RTA. Section 2(1) of the RTA defines “tenant” in the following terms:

“tenant” includes a person who pays rent in return for the right to occupy a rental unit and includes the tenant’s heirs, assigns and personal representatives, but “tenant” does not include a person who has the right to occupy a rental unit by virtue of being,

(a) a co-owner of the residential complex in which the rental unit is located, or (b) a shareholder of a corporation that owns the residential complex; (“locataire”)

[84] Recognizing a party’s equitable interest in a property does not preclude that party from also being a tenant. Possessing an equitable interest in a property does not necessarily provide any right of occupancy. The implications of a tenant also possessing an equitable interest in a rental property was not a question that the LTB faced, as the Divisional Court decisions in the judicial reviews of LTB#1 and LTB#2 clarified that issues of equitable ownership lay outside the LTB’s jurisdiction.

[85] In other settings, courts have recognized that a party may be both a tenant and have an equitable interest in the same property.

[86] In Palmer v. Ampersand Investments Ltd. et al. (1984), 47 O.R. (2d) 275 (Ont. H.C.), aff’d Palmer v. Ampersand Investments Ltd. et al. (1986), 54 O.R. (2d) 339 (C.A.) (“Palmer”), Krever J. (as he then was) recognized two distinct agreements operating between the parties in that case. The first agreement created a landlord-tenant relationship, and the second agreement granted the plaintiff a right to purchase the property from the defendant at a specified price, which was held to create an equitable interest in the property at issue.

[87] In Humphrey v. Faulds and Schramek, 2012 YKTC 12, the court, relying in part on Palmer, found the tenants and landlord were party to both a Tenancy Agreement, as well as a Contract for Purchase and Sale of the rental property at a fixed price, and that, as a statutory court, the Yukon Territorial Court could take jurisdiction over the landlord-tenant aspects of the dispute but could not provide equitable remedies in relation to the tenant’s interest in the property. Cozens C.J.T.C. explained the interaction between these two contractual relationships at paras. 23-26:

[23] While it is possible to draft a contract that ties the terms of the option to the terms of the tenancy in such a way that the termination of one means the termination of the other, I do not find that this is the case here: see e.g. Rafael v. Crystal, [1966] 2 O.R. 733 (H.C.) per Gale C.J.O.

[24] The Contract for Purchase and Sale portion of the Contract sets out a definite closing date of September 1, 2012, subject to a one-time extension to September 1, 2013. There is nothing in the Tenancy Agreement portion or the Schedule that affects this. In fact, clause 15 of the Contract anticipates the possibility that the tenancy will be terminated before the closing date on event of a breach of the tenancy agreement. It does not purport to alter the terms of the sale of the property.

[25] As well, although separate consideration for each of the option and the tenancy contracts is not necessary in a rent-to-own agreement, the tenants here have nonetheless given separate consideration for the purchase and sale option and the tenancy agreement. The non-refundable initial deposit of $10,000.00 and the subsequent non-refundable payments of $500.00 per month are consideration that is linked only to the option to buy the property: per clause 7 of the Contract, it is not refundable in event of a failure to close. The tenants have given this monetary consideration in exchange for the landlord’s foregoing his opportunity to sell the property during the three-to-four year term of the contract. This consideration is separate and distinct from the rent paid in the tenancy agreement.

[26] I find that the Tenancy Agreement was intended to be, and is, severable from the Contract for Purchase and Sale, and that the Territorial Court has the jurisdiction to hear the landlord’s application to terminate the tenancy.

[88] As the courts’ interpretation of lease-to-own and rent-to-own agreements demonstrate, parties simultaneously may be subject to contractual relationships as landlord and tenant, and as parties who share equitable interests in a property. In my view, that is the situation in this case. Pursuant to oral and written agreements, Warraich and Choudhry entered into a relationship as landlord and tenant, as well as a relationship sharing equitable interests in the Machockie Property.

(c) Did the written Trust Agreement of September 2, 2016 resolve Warraich’s interest in the Machockie Property?

[89] The relationship between Warraich and Choudhry both as business associates and as landlord-tenant established in 2012 and 2013, continued through 2014 and 2015 without incident.

[90] Warraich gave evidence that, in April of 2016, Choudhry expressed a desire to buy out Warraich’s 50% share of the property, in order to renovate and resell the Machockie Property himself. Warraich testified that he and Choudhry entered into an oral agreement to this effect, but that Choudhry lacked the funds to complete the transaction at that time.

[91] Choudhry denies any oral agreement was reached in April of 2016. Rather, his testimony is that, after the obstacles to a building permit were removed by the OMB decision, he was finally ready to move forward with the redevelopment of the property.

[92] In April, 2016, Warraich testified that Choudhry approached him to indicate that he wanted to assume full ownership of the Machockie Property. Warraich said he agreed to sell his share in the Machockie Property to Choudhry, and after some back and forth, they agreed on a valuation of $780,000.00 for the property.

[93] This alleged oral agreement included other terms, including Choudhry repaying Warraich for the approximately $20,000.00 which Warraich had paid Lemcad, Warraich paying Choudhry market rent for the remainder of his tenancy in the Machockie Property, and an additional deduction for the real estate commission on the envisioned sale of the Machockie Property. Warraich testified that after these various calculations, Choudhry was to pay him a total sum of $184,500.00.

[94] Waheed Akhtar (“Akhtar”), a mutual business associate of both Warraich and Choudhry, gave evidence that he helped broker this oral agreement in April, 2016.

[95] After April 2016, with a view to this transaction taking place, Warraich ceased paying monthly rent on the Machockie Property. According to his testimony, Warraich expected that rent arrears accumulated after April 2016 would be set off against the funds Choudhry now owed Warraich to buy out Warraich’s share of the property.

[96] While Warraich testified an oral agreement had been reached in April 2016, the transaction did not take place at that time. Warraich testified that Choudhry had some difficulty obtaining funds, and Warraich expected the transaction would take place in August 2016.

[97] Text changes between Warraich and Choudhry during this period, however, reveal growing tensions in their relationship over the Machockie Property:

Choudhry (April 3, 2016): Reminder for rent deposit plus end of year 50% bills share 1531.00 Warraich (April 3, 2016): I gave to Waheed [Akhtar] 2400 deposit on Monday I am not in Toronto tomorrow when met me I give you cash 1531 Choudhry (April 5, 2016): WTF, no call back, send me $1531 and I am filling tax 1600 monthly rent Thank You

[98] In June of 2016, the Ontario Municipal Board reversed the Committee of Adjustment’s refusal to issue building permits for the redevelopment of the Machockie Property, and the building permits finally were obtained.

[99] By the end of the summer, the relationship had soured further. On September 1, 2016, in the face of rising acrimony, Warraich and Choudhry had the following exchange of test messages:

Warraich: Yesterday you disconnect my call you want keep the house so please pay my share please let me know when I get my money Choudhry: What share you talking? You did not paid rent from last two month Warraich: 50 percent of investment on 29 machockie Rd that I am talking about which promise to pay me on August 10 what you talking know. Rent I told you deduct my money Plus 20025.88 I paid lemcad consultant for Survey and permit drawing Know you hopefully understand which share I am talking about I pay my share late but paid interest on down payment … Choudhry: Ask Leo to put hold on permit, how low can u go?

[100] On September 2, 2016, Mastrandrea brought together Warraich and Choudhry for a meeting to resolve the dispute. As a result of this discussion, Warraich and Choudhry signed a handwritten document drafted by Mastrandrea entitled “Trust Agreement”. The content of the handwritten agreement was the following:

September 2, 2016 Call Romeo trust agreement lien on property by interest rate 3.5% $204,500 - $20,000 – 7200 Less – 3 months – 2400 (184,500.00) Agreed Amount For 1 year only 20,000 Not renewable – 7200 Sarfraz – 12,800 Saffraz will move out by Oct 4/16 7375

• 1000 Leo 6375

[101] The parties agree that the Trust Agreement was intended to resolve the dispute between them, and pave the way both for Warraich to move out of the Machockie Property, and for the redevelopment of the Machockie Property to begin.

[102] Warraich asserts that this document formalized the agreement for Choudhry to buy out Warraich’s 50% share of the equity in the Machockie Property for $204,500.00, less certain set-offs, for a total of $184,500.00. The payment of this amount was to be by the mechanism of a mortgage for a term of 1 year, bearing interest at 3.5%. This is how Warraich interprets the reference in the Trust Agreement to “lien on property by interest rate 3.5%.”

[103] By contrast, Choudhry asserts that this document reflects an agreement for Warraich to work for Choudhry as the general contractor on the Machockie Property redevelopment, and the amount of $184,500.00 reflected payment to have the property partially constructed, and the payment was to be secured through a construction lien on the property. This is how Choudhry interprets the reference in the Trust Agreement to “lien on the property by interest rate 3.5%”

[104] Mastrandrea’s evidence is that he understood the Trust Agreement as a resolution to the dispute over the Machockie Property under which Choudhry agreed to buy out Warraich’s interest in the property. Mastrandrea’s evidence also confirms that the agreement provided for payment to his own company, Lemcad, for planning work relating to the Machockie Property in the amount of $6,375.00 (reflecting a $1,000.00 discount on the cost of his services).

[105] The terms of the Trust Agreement are difficult to discern without the context of the testimony and evidence provided by those who signed the agreement, and their prior actions and agreements, including the prior 2012 Oral Agreement.

[106] Both Warraich and Choudhry agree the document subsequently was to be converted into a formal agreement and the reference at the top to “Call Romeo” referred to Choudhry’s lawyer who was to undertake this follow up step.

[107] In the end, no document from Romeo was provided. Warraich’s counsel did send Choudhry a draft, mortgage agreement, dated September 21, 2016, under which Choudhry would have agreed to provide to Warraich a mortgage charge on the Machockie Property in the amount of $184,500.00. Choudhry did not sign this agreement.

[108] I find that the Trust Agreement was an agreement between Warraich and Choudhry to settle their dispute over the Machockie Property, by Choudhry buying out Warraich’s equitable interest in the Machockie Property, with certain set-offs, for $184,500.00.

[109] Therefore, in light of the September 2016 Trust Agreement, I find that Warraich is entitled to the agreed upon buy-out of his equitable interest in the Machockie Property.

The Statute of Frauds and Parol Evidence Rule

[110] While I have found that the September 2016 Trust Agreement resolves Warraich’s claim, my interpretation of that agreement rests on the proposition that, though the 2012 Oral Agreement, Warraich obtained an enforceable, equitable interest in the Machockie Property. This determination, in turn, requires that Warraich overcome the threshold for enforcing oral agreements in relation to property contained in the Statute of Frauds, R.S.O. 1990, c. S.19 (“Statute of Frauds”), s. 4 of which states:

Writing required for certain contracts

4. No action shall be brought to charge any executor or administrator upon any special promise to answer damages out of the executor’s or administrator’s own estate, or to charge any person upon any special promise to answer for the debt, default or miscarriage of any other person, or to charge any person upon any contract or sale of lands, tenements or hereditaments, or any interest in or concerning them, unless the agreement upon which the action is brought, or some memorandum or note thereof is in writing and signed by the party to be charged therewith or some person thereunto lawfully authorized by the party.

[111] Therefore, under s.4 of the Statute of Frauds, contracts for the sale of land are to be in writing. Failure to comply with this statutory requirement makes the agreement unenforceable.

[112] As John McCamus sets out in The Law of Contracts, 2nd ed. (Toronto: Irwin, 2012), at p. 177, relief from the effect of the Statute of Frauds may be found in:

a. The doctrine of part performance, b. The doctrine that the Statute of Frauds cannot be employed to commit a fraud, or c. The doctrine of restitution.

[113] Choudhry submits that s.4 of the Statute of Frauds would render any purported oral agreement with respect to an interest in the Machockie Property unenforceable.

[114] Warraich argues that s.4 of the Statute of Frauds is not a bar to the enforcement of the 2012 Oral Agreement due to the doctrine of part performance.

[115] In Mountain, Winkler C.J.O. reviews the applicable test for part performance under the Statute of Frauds (at paras. 80-82, 86-87):

[80] In Erie Sand and Gravel Ltd. v. Seres' Farms Ltd. (2009), 97 O.R. (3d) 241, 2009 ONCA 709, Gillese J.A. clarified the legal principles that apply when determining whether there is an oral agreement respecting land and if so, whether there are sufficient acts of part performance to take the oral agreement outside s. 4 of the Statute of Frauds. As explained in Erie Sand & Gravel Ltd., at para. 49, the doctrine of part performance is a creation of equity. The doctrine was created

. . . to prevent the Statute of Frauds from being used as a variant of the unconscionable dealing which it was designed to remedy: see Hill v. Nova Scotia (Attorney General), [1997] 1 S.C.R. 69, 1997 SCC 401, at para. 10. The requirements in s. 4 of the Statute of Frauds must give way in the face of part performance because the acts of part performance fulfill the very purpose of the written document – that is, they diminish the opportunity for fraudulent dealings with land based on perjured evidence.

[81] Gillese J.A. made it clear, at para. 75, that the doctrine of part performance is not limited to a consideration of the acts of the plaintiff:

In sum, it appears to me that given the decision of the Supreme Court in Hill, it is now settled law in Canada that the acts of both parties to an alleged oral agreement may be considered when a court is called on to determine if sufficient acts of part performance take an alleged agreement outside the operation of the Statute of Frauds.

[82] Gillese J.A. also made it clear that the acts of part performance need not be "referable only to the contract alleged". Rather, the test as established by the majority judgment of Cartwright J. in Deglman v. Guaranty Trust Co. of Canada, [1954] S.C.R. 725, 1954 SCC 2 (S.C.C.), at p. 733, is that it is sufficient if the acts are "unequivocally referable in their own nature to some dealing with the land".

[86] In Erie Sand & Gravel Ltd., Gillese J.A. explained, at para. 94, that the proper approach to determining whether acts of part performance are referable to some dealing with the land is to begin by determining the context or, in other words, the relevant circumstances. The court is to "[t]hen consider the acts of part performance having regard to the way in which reasonable people carry on their affairs".

[87] The need for a contextual approach follows from the purpose of the doctrine of part performance. At para. 79 of Erie Sand & Gravel Ltd., Gillese J.A. discussed the two underlying aspects of the doctrine:

The first aspect is detrimental reliance which, as has been noted, requires a party to prove Its acts of part performance. Without detrimental reliance there can be no inequity in relying on the Statute of Frauds, thus, it is the first hurdle to be met. The second aspect of the doctrine, however, relates to Equity's requirement that the acts of part performance sufficiently indicate the existence of the alleged contract such that the party alleging the agreement is permitted to adduce evidence of the oral agreement. . . . The former is a matter of substantive law based on the rationale for the doctrine of part performance, whereas the latter is primarily evidentiary in nature.

[116] In light of this approach to part performance, I find that the conduct of Warraich meets the threshold of part performance of the 2012 Oral Agreement with Choudhry to purchase an equitable interest in the Machockie Property. This conduct includes:

a. Warraich’s efforts to retain and work with Mastrandrea (Lemcad) to obtain permits for the redevelopment of the Machockie Property, expending approximately $20,000.00; b. Warraich’s attendance of the Committee of Adjustment hearings with Mastrandrea to obtain approval for the redevelopment of the Machockie Property; and c. Warraich’s act of directing cheques from Awan to Choudhry to meet the financial terms of the oral agreement for Warraich’s share in the Machockie Property.

[117] These acts by Warraich, to his detriment, were directly referable to the arrangements between Warraich and Choudhry to take the necessary steps to redevelop and sell the property, and demonstrate the existence of the 2012 Oral Agreement.

[118] The 2012 Oral Agreement was then superseded by the written Trust Agreement of September 2, 2016.

[119] In Hamelin v. Mousseau, 2018 ONSC 276, 92 R.P.R. (5th) 106, the court considered an alleged oral agreement which preceded a written lease-to-own agreement. The lease-to-own agreement included a provision by which the plaintiffs could exercise a right to purchase the property, but this was not exercised by the deadline. Instead, the plaintiffs relied on a prior oral agreement pursuant to which the plaintiffs exercised the option to purchase. Wilcox J., after considering the impact of s. 4 of the Statute of Frauds, held as follows (at paras. 48-52):

[48] The written agreement postdated the oral one of October, 2002. It was drafted by Leon Mousseau’s lawyer and sent to Hachey for signing. Hachey’s evidence was to the effect that he was not knowledgeable or sophisticated about property deals, did not read well, and signed the agreement because it looked good, without legal advice.

[49] However, I note in this regard that there are two page ones in the agreement Exhibit. They are labelled in handwriting, as compared to the typing of the agreement, “1st” and “2nd”. The 1st provided for a lease term of 30 months, from December 1, 2002 to May 31, 2005, with an option to renew for another 30 months. The 2nd, as we have seen, provided for a term of three years from December 1, 2002 to November 30, 2005, with an option to renew for another 3 years. Hachey’s evidence is that he initiated this change and, further, that Hamelin read the agreement to him. He said that he was upset by it, as the draft agreement did not reflect the oral agreement, although he did not say in what ways specifically.

[50] This indicates that, whether or not the terms of the draft agreement reflect those of the oral agreement, Hachey was aware of them, even to the point that he had some changed from the first draft to the second. The fact that he had some terms changed, but not others, suggests that the written agreement, with those changes, did in fact reflect the terms of the oral agreement. If they did not, it is reasonable to think that Hachey would have requested more changes than the ones he did.

[51] Furthermore, “(i)f an agreement is entered into on the basis of a document preferred [sic] by one party and signed by the other, it is clearly established that the agreement between the parties contains the terms expressed in the document, whether or not the signing party has read the documents.

[52] Having found that the parties’ agreement is contained in the written agreement, that there is no other oral agreement, and that the option to purchase was not exercised, this is not a case where there appears to have been an unwritten agreement which the Statute of Frauds prevents the plaintiffs from suing on to enforce. Therefore, there is no scope here to deal with the doctrines (listed above) that exist to provide relief from the Statute of Frauds, or with proprietary estoppel as put forth by the plaintiffs. (Emphasis added.)

[120] Because I have found that the 2012 Oral Agreement is relevant to the interpretation of the Trust Agreement of September 2016, I must also canvass the operation of the parol evidence rule and its applicability in this case.

[121] The parol evidence rule applies to the question of whether the written document is the exclusive source of the terms of the agreement between the parties, or whether some terms are to be found in a prior agreement between them. The party that tries to include the prior terms may be prevented from introducing evidence of them by the parol evidence rule. Does this rule affect Warraich’s right to rely on evidence of the 2012 Oral Agreement in interpreting the Trust Agreement?

[122] The rule and its exception for relevant “surrounding circumstances” to a written agreement was discussed by the Supreme Court of Canada in Sattva Capital Corp. v. Creston Moly Corp., [2014] 2 S.C.R. 633, 2014 SCC 53 (at paras. 56-60):

(b) The Role and Nature of the "Surrounding Circumstances"

[56] I now turn to the role of the surrounding circumstances in contractual interpretation and the nature of the evidence that can be considered. The discussion here is limited to the common law approach to contractual interpretation; it does not seek to apply to or alter the law of contractual interpretation governed by the Civil Code of Quebec.

[57] While the surrounding circumstances will be considered in interpreting the terms of a contract, they must never be allowed to overwhelm the words of that agreement (Hayes Forest Services, at para. 14; and Hall, at p. 30). The goal of examining such evidence is to deepen a decision-maker's understanding of the mutual and objective intentions of the parties as expressed in the words of the contract. The interpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract (Hall, at pp. 15 and 30-32). While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviate from the text such that the court effectively creates a new agreement (Glaswegian Enterprises Inc. v. B.C. Tel Mobility Cellular Inc. (1997), 101 B.C.A.C. 62).

[58] The nature of the evidence that can be relied upon under the rubric of "surrounding circumstances" will necessarily vary from case to case. It does, however, have its limits. It should consist only of objective evidence of the background facts at the time of the execution of the contract (King, at paras. 66 and 70), that is, knowledge that was or reasonably ought to have been within the knowledge of both parties at or before the date of contracting. Subject to these requirements and the parol evidence rule discussed below, this includes, in the words of Lord Hoffmann, "absolutely anything which would have affected the way in which the language of the document would have been understood by a reasonable man" (Investors Compensation Scheme, at p. 114). Whether something was or reasonably ought to have been within the common knowledge of the parties at the time of execution of the contract is a question of fact.

(c) Considering the Surrounding Circumstances Does Not Offend the Parol Evidence Rule

[59] It is necessary to say a word about consideration of the surrounding circumstances and the parol evidence rule. The parol evidence rule precludes admission of evidence outside the words of the written contract that would add to, subtract from, vary, or contradict a contract that has been wholly reduced to writing (King, at para. 35; and Hall, at p. 53). To this end, the rule precludes, among other things, evidence of the subjective intentions of the parties (Hall, at pp. 64-65; and Eli Lilly & Co. v. Novopharm Ltd., [1998] 2 S.C.R. 129, 1998 SCC 791, at paras. 54-59, per Iacobucci J.). The purpose of the parol evidence rule is primarily to achieve finality and certainty in contractual obligations, and secondarily to hamper a party's ability to use fabricated or unreliable evidence to attack a written contract (United Brotherhood of Carpenters and Joiners of America, Local 579 v. Bradco Construction Ltd., [1993] 2 S.C.R. 316, 1993 SCC 88, at pp. 341-42, per Sopinka J.).

[60] The parol evidence rule does not apply to preclude evidence of the surrounding circumstances. Such evidence is consistent with the objectives of finality and certainty because it is used as an interpretive aid for determining the meaning of the written words chosen by the parties, not to change or overrule the meaning of those words. The surrounding circumstances are facts known or facts that reasonably ought to have been known to both parties at or before the date of contracting; therefore, the concern of unreliability does not arise.

[123] In light of this approach, I find the 2012 Oral Agreement, and Warraich’s part performance under that agreement to be surrounding circumstances which assist in the interpretation of the Trust Agreement of September 2016.

[124] When read in the context of the surrounding circumstances of the 2012 Oral Agreement, I am satisfied on a balance of probabilities that the Trust Agreement sets set out the terms by which Warraich and Choudhry agreed that Choudhry would buy out Warraich’s equitable interest in the Machockie Property.

[125] The Trust Agreement also included a provision, “Less – 3 months – 2400”, which both parties accept constituted Warraich’s arrears in rent of $2,400.00 per month.

[126] Therefore, I find that neither the Statute of Frauds nor the parol evidence rule precludes reliance on the 2012 Oral Agreement in interpreting the Trust Agreement of September 2016.

The Defendants’ Counterclaim

[127] In their counterclaim, the Defendants’ seek damages of $500,000.00.

[128] Choudhry sought the eviction of Warraich and arrears for unpaid rent and utilities. Choudhry based his claim on the parties’ landlord-tenant relationship. The remedy of eviction is moot as Warraich vacated the Machockie property in December, 2018.

[129] The LTB also found that Choudhry established that he was owed rental arrears.

[130] However, in light of my finding above, that the Trust Agreement of September 2016 resolved the liabilities between Warraich and Choudhry as of that date, which included a set-off for rental arrears for three months of unpaid rent (in the amount of $7,200.00), the counterclaim is dismissed to the extent it claims rental arrears for the period covered by the Trust Agreement of September, 2016.

[131] The counterclaim is granted with respect to the additional period of time for which rent was owed by Warraich but not paid. Choudhry is also entitled to recover utility payments in accordance with the rental tenancy agreement, and pre-judgment interest on these remaining arrears and utility payments.

[132] The defendants also seek damages which reflect the increased costs of the redevelopment of the Machockie Property due to the delay caused by Warraich and this litigation, along with increased costs to renew permits and reconnect utilities, and related costs. In closing arguments, Choudhry estimated that sum to be approximately $150,000.00.

[133] The counterclaim does not address any specific evidence of an increase or decrease in the value of the property over the period of the delay.

[134] I find that the delay arising from this dispute is due to the conduct of both parties. Warraich resisted the payment of rental arrears and eviction in the LTB process, while Choudhry resisted any recognition of Warraich’s equitable interest in the property arising from their oral agreement and partial performance of that agreement. Each party adopted a position which prolonged this dispute.

[135] Therefore, Choudhry is not entitled to damages relating to any change in the value of the Machockie Property during the period of this dispute, and this aspect of the counterclaim is dismissed.

Conclusions

[136] At trial, Warraich revised the remedies he is seeking to include a declaration that he has an ongoing interest in the Machockie Property as a co-owner, and should share on a 50/50 basis in any eventual sale of the property.

[137] I find Warraich is entitled to $184,500.00 as the agreed upon amount in the September 2, 2016 Trust Agreement, representing the value of his equitable interest in the Machockie Property, after set-offs, with pre-judgment interest of 3.5% calculated from September 2, 2016. To this extent, Warraich’s claim is granted.

[138] I further find Warraich’s entitlement to the amount Choudhry agreed to pay through the Trust Agreement of September, 2016, brings his interest in the Machockie Property to an end. As a result, Warraich is not entitled to a declaration that he has a continuing 50% interest in the Machockie Property, or a right to share in the proceeds of any eventual sale of the Machockie Property.

[139] The defendants’ counterclaim is granted in part, to the extent of Warraich’s rental arrears and utility payments not addressed by set-off in the Trust Agreement of September, 2016.

[140] If the parties cannot agree on the amounts owing in accordance with these reasons, they may provide draft orders within 30 days of this judgment.

Costs

[141] In the result, both parties have had some success in this litigation. Warraich’s success was more substantial, and he is entitled to a portion of his costs.

[142] If the parties cannot come to an agreement with respect to costs of this action, including costs of the motion for issue estoppel at the outset of the trial, I will accept brief written submissions from Warraich (of no more than five pages) within 15 days of this judgment, with written submissions from Choudhry (of no more than five pages) within 15 days of the receipt of Warraich’s costs’ submissions, and a reply from Warraich (of no more than two pages), if necessary, within 10 days of the receipt of Choudhry’s costs’ submission.

Sossin J. Released: April 29, 2019