BARRIE COURT FILE NO.: CV 19-1276

DATE: 20190815

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

CHRIS DAVID FORGET

Plaintiff/Responding Party

– and –

DAVID JOHN MCLEAN

Defendant/Moving Party

Martin Prost, Counsel for the Plaintiff/Responding Party

Christopher Salazar, Counsel for the Defendant/Moving Party

HEARD: August 14, 2019

HEALEY J.:

[1] This is the motion by the defendant to discharge a Certificate of Pending Litigation dated July 19, 2019. The motion is granted for the reasons that follow.

[2] There was material non-disclosure in the affidavit filed in support of the motion to obtain leave to register the Certificate of Pending Litigation. The information in question, had it been provided to the motions judge, is likely to have changed the outcome of the motion. Furthermore, the evidence that was provided was misleading in significant ways, and would have materially impacted upon the motion judge’s consideration of this matter.

[3] The motion record presented in support of the Certificate of Pending Litigation contains the affidavit of Catherine Bernard, a legal assistant, but does not include an affidavit from the plaintiff. She deposed at paragraph 2 of her affidavit that the parties had, by Agreement of Purchase and Sale (“APS”) dated April 18, 2019 as amended on July 2, 2019, reached an agreement for the sale of the subject lands. The APS referenced by Catherine Bernard was attached as Exhibit A to her affidavit.

[4] What was not disclosed was that the APS dated April 18, 2019 had lapsed, as it had a closing date of June 14, 2019 but was not signed by the plaintiff until June 28, 2019. That purported contract lapsed and was of no force and effect.

[5] This material omission has further significance because the Statement of Claim, the contents of which Catherine Bernard stated in her affidavit as true and which was made an exhibit to her affidavit, alleges that the plaintiff signed back the offer on April 28, 2019, as opposed to the true date of June 28, 2019.

[6] The plaintiff’s original material did not disclose that he took the lapsed APS to his lawyer’s office, where changes were made on its face. The plaintiff initialed those changes. However, in her affidavit Catherine Bernard fails to draw the motion judge’s attention to the fact that, on the purported agreement submitted to him, the initials of the defendant are missing by several of those changes. The purported APS was a standard form OREA document. The defendant did not place his initials by the completion date, the requisition date, one of the terms in respect of the vendor take back mortgage set out in a schedule, or on the mortgage commitment letter for that mortgage. On the face of the document there are hand-drawn circles intended for the insertion of the defendant’s initials, which remain blank in the areas indicated. There is no objective confirmation of this alleged “meeting of the minds”. The defendant’s initials are the only way in which the defendant could confirm his acceptance of the terms of the new offer being presented by the plaintiff on July 2, 2019.

[7] In response to this motion, the plaintiff has now filed an affidavit in which he alleges communications with the defendant that were never put before the motion judge. These allegations include that on July 2, 2009 the parties met, which is not disputed, to review the handwritten changes made on the OREA form. The plaintiff deposed that the defendant “confirmed his agreement to those terms…” and that the party shook hands as acknowledgement that they had concluded their agreement.

[8] Again, there is nothing in the original material before the motion judge that alleged this version of events.

[9] Most egregiously, the plaintiff failed to place before the motion judge a letter written to his lawyer, Mr. Prost, from the defendant’s real estate solicitor, David Northcott, dated July 16, 2019. This letter was written in response to an earlier letter from Mr. Prost, in which he indicated his client’s intention to commence a Claim and register the Certificate in question. In his return correspondence, Mr. Northcott set out why it was his client’s view that no binding agreement had been reached by the parties. This included the lack of acceptance of the new terms inserted by the plaintiff, and the fact that no consideration had been provided with the offer presented on July 2, 2019. The plaintiff had provided the defendant with an uncertified cheque without a payee’s name endorsed. This too was a fact omitted from the version of events submitted to the motion judge.

[10] Mr. Northcott’s correspondence of July 16, 2019, and the defendant’s position set out therein, became even more crucial evidence because of a further misleading statement in the affidavit of Catherine Bernard. This was to allege that the defendant had repudiated the APS. Repudiation requires a contract, the very existence of which the defendant denied. But the motion judge was never alerted to the defendant’s denial.

[11] When he chose to move on an ex parte a basis even after receiving Mr. Northcott’s position as to why the plaintiff was not entitled to such relief, the plaintiff had a duty to provide all evidence with absolute candour. The court relies on the moving party for full and frank disclosure of all relevant facts in support of an ex parte order. Rule 39.01(6) is clear in this requirement. There is a heavy onus on counsel to make sure all relevant facts are before the court: McGrath v. B.G. Schickendanz Homes Inc., 2000 in CarswellOnt 3990 (S.C.J.), at para. 34.

[12] These omissions and inaccuracies are material, meaning that they could have affected the deliberations of the motion judge and his decision in this matter. I would go further to say that, had the full evidence been placed before the motion judge, a denial of the request for a Certificate of Pending Litigation is almost a certainty.

[13] This conclusion is based upon the fact that the complete evidentiary record available at this time does not establish that the plaintiff has an interest in the land.

[14] First, any oral representations alleged and relied on by the plaintiff are excluded by s. 26 of the standard OREA contract. That clause provides that “there is no representation, warranty, collateral agreement or condition which affects this Agreement other than as expressed herein”. Given that the plaintiff alleges a binding agreement based on the contents of the OREA form presented to the defendant on July 2, 2019, this provision would operate to exclude any of the discussions referenced by the plaintiff in his affidavit.

[15] Second, the absence of the defendant’s initials beside the changes made is determinative; the defendant did not signal his acceptance of the terms offered, and thus there cannot be said to be an agreement as there was no meeting of the minds on key terms. The case law relied upon by Mr. Prost on this motion is not applicable to OREA standard form contracts and is distinguishable on that basis.

[16] Third, there is no evidence of any part performance to avoid the effect of s. 4 of the Statute of Frauds, R.S.O. 1990, c. S. 19. Delivery of a deposit cheque, even if it had been made payable to the defendant’s lawyer as required by the “agreement”, is not performance: Smith v. Vankoughnet and Rasmussen, 2017 ONSC 4293 (S.C.J.), at para. 46.

[17] Even if I am incorrect and the plaintiff’s case has merit, the material non-disclosure that exists in this case would be sufficient on its own to set aside the Certificate: Cimaroli v. Pugliese, 1987 CarswellOnt 2530 (Ont. S.C.), at paras. 7 and 8.

[18] Costs are payable by the plaintiff to the defendant on a partial indemnity basis fixed in the sum of $10,000 inclusive of HST and disbursements. Although the non-disclosure could justify an award of substantial indemnity costs, I take into account that the content of the affidavit provided on the motion was not drafted by the plaintiff and was not his sworn evidence.

Justice S.E. Healey

Released: August 15, 2019