Court File and Parties

COURT FILE NO.: CV-20-00641777 MOTION HEARD: 20200708 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Shuanghuai Gong, Plaintiff AND: Neuhaus Management Ltd. and Regent Street Developments Ltd., Defendants

BEFORE: Master B. McAfee

COUNSEL: M. J. Panacci, Counsel, for the Moving Parties, the Defendants M. Simaan and R. Gandotra, Counsel, for the Responding Party, the Plaintiff

HEARD: July 8, 2020

Reasons for Decision

[1] The defendants bring a motion on an urgent basis seeking an order discharging a certificate of pending litigation (CPL).

[2] Pursuant to the short motion triage directions of Administrative Master Muir dated June 19, 2020, the urgent motion was assigned to me. On June 26, 2020, a telephone case conference was convened to schedule the urgent motion. The motion proceeded on July 8, 2020.

[3] On July 9, 2020, my decision was released with reasons to follow. The motion was dismissed. What follows are my reasons.

[4] The CPL was registered by the plaintiff pursuant to an order granted by me on June 1, 2020, obtained on a motion brought by the plaintiff without notice and in writing.

[5] The main issue on this motion, as confirmed by the parties, is whether there was full and fair disclosure of all material facts on the part of the plaintiff in obtaining the order for a CPL. The defendants argue that the failure of the plaintiff to draw the court’s attention to section 41 of the Agreement of Purchase and Sale (APS) being a clause with the heading “No Registration” (NRC) constitutes a breach of the obligation of full and fair disclosure of all material facts. The plaintiff argues that although the APS was contained in the motion record, there was no obligation to draw the court’s attention to the NRC because it was not relevant or material.

[6] The court’s authority to discharge a CPL is found under rule 42.02 of the Rules of Civil Procedure and section 103(6) of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[7] The onus is on the defendants to satisfy the court that the CPL should be discharged (*McGrath v. B.G. Schickendanz Homes Inc.* at para. 70).

[8] As stated by Justice DiTomaso in *JDM Developments Inc. v. J. Stollar Construction Ltd.* at para. 41: “…Rule 39.01(6) provides that where a motion or application is made without notice, the moving party or applicant shall make full and fair disclosure of all material facts, and failure to do so is in itself sufficient ground for setting aside any order obtained on the motion or application.” See also JDM at para. 34 and McGrath at para. 34.

[9] A failure to draw the court’s attention to an NRC will not necessarily constitute a failure to provide full and fair disclosure of all material facts in every case.

[10] In the circumstances of this case, the failure to draw the court’s attention to the NRC does not constitute a failure to provide full and fair disclosure of all material facts. The NRC was not material. The vendor terminated the APS that contained the NRC prior to the motion being brought. As stated by Justice Campbell in McGrath at para. 67: “…in this case it is the vendor Schickedanz which seeks the protection of a clause in a contract which it chose to terminate. It cannot have its cake and eat it too.”

[11] In addition, unlike the circumstances in *Chiu v. Pacific Mall Developments Inc.* and *Lariat Land Development Inc. v. Loukras* both cited in *2033363 Ontario Limited v. Georgetown Estates Corp.* at paras. 21-24, the NRC does not specifically and clearly prohibit the registration of a CPL in any event.

[12] I disagree with the defendants’ position that credibility is relevant to a determination of this issue. There is no issue that the NRC was not drawn to the court’s attention. There is also no issue that the vendor terminated the APS containing the NRC.

[13] Limited time was spent in argument addressing the Dhunna factors as an alternative basis for an order discharging the CPL (see *572383 Ontario Inc. v. Dhunna* at paras. 10-18). Having regard to the relevant Dhunna factors, I am not satisfied that they favour the granting of the relief sought on this motion. The plaintiff is not a shell corporation. The land is unique given the surrounding community and schools. The plaintiff intends to live in the property. Damages would not be a satisfactory remedy in the circumstances. Specific performance is sought. There is no alternative claim for damages. There is no evidence of another willing purchaser. Discharging the CPL would eliminate the plaintiff’s ability to seek the relief sought in the action. To the extent that the defendants take the position that refinancing of the second mortgage is at risk if the CPL remains on title, there was no evidence before me that the defendants provided any supporting documentation concerning that refinancing as requested on cross-examination. In balancing the harm to the plaintiff if the CPL is discharged against the harm to the defendants if the CPL remains on title, justice favours that the CPL remains on title in all the circumstances.

[14] The motion is dismissed.

[15] With respect to costs of the motion, if successful, the defendants sought costs on a full indemnity basis in the amount of $25,000.00. If successful, the plaintiff sought costs on a partial indemnity basis in the amount of $12,300.00.

[16] The plaintiff was successful on the motion. In my view the amount claimed for costs on a partial indemnity basis is a fair and reasonable amount that the defendants could expect to pay for costs in the all the circumstances. However, I am also of the view, having regard to the nature of this motion and this action, that an order that costs be payable other than within 30 days would be more just. Costs of the motion are fixed in the all-inclusive amount of $12,300.00, payable by the defendants to the plaintiff in the cause.

Master B. McAfee Date: July 21, 2020