ONTARIO SUPERIOR COURT OF JUSTICE

COURT FILE NO.: CV-17-2261-00 DATE: 2020 08 21

BETWEEN:

Heather Downey and Francesco Marchese a.k.a Frank Marchese Plaintiffs

• and -

Douglas Alexander Arey Defendant

COUNSEL: D. Saverino, for the Plaintiffs J. Marler, for the Defendant

HEARD: July 31st, 2020

REASONS FOR DECISION

LEMAY J

[1] The Plaintiffs Heather Downey and Francesco Marchese are the daughter and son-in-law of the Defendant Douglas Arey. The underlying dispute in this matter concerns the residential property municipally known as 2860 Remea Court. This property is currently owned by Mr. Arey and it is where Ms. Downey and Mr. Marchese currently live. Ms. Downey and Mr. Marchese claim that they are entitled to purchase the house from Mr. Arey at a fixed price, agreed upon some time ago. I understand that Mr. Arey argues that this agreement was not completed for several months after it was supposed to be completed and, as a result, is no longer enforceable.

[2] The underlying dispute will go to trial sometime this fall. A pre-trial is scheduled for September 8th, 2020 at 10:00 a.m. for a half day before me. In the meantime, however, an issue has arisen about whether certain repairs need to be performed to the house prior to the trial this fall. The parties placed this dispute before me by way of both written material and oral argument.

[3] For the reasons that follow, I have determined that the only repair that is in dispute that needs to be completed is the electrical switch in the master bedroom. I have concluded that this repair needs to be completed because it raises a significant safety issue that can only be addressed by completing the repair. The remaining repairs do not need to be completed immediately. Further, requiring Mr. Arey (as the owner of the property) to complete those repairs while allowing the Plaintiffs to claim an entitlement to the property at a fixed price runs a substantial risk of creating an inequity. In the circumstances of this case, the remaining repairs should be deferred until after trial.

Background

a) The Parties and the Underlying Dispute

[4] The dispute between the parties is over the residential property at 2860 Remea Court in Mississauga. The Plaintiff Heather Downey is the daughter of the Defendant Douglas Arey. The Plaintiff Francesco Marchese is Ms. Downey’s partner. Title to the property is currently held by Mr. Arey.

[5] There was allegedly an agreement between the parties that permitted the Plaintiffs to purchase the house from the Defendant at the end of August, 2016. The sale did not close. The Plaintiffs allege that the Defendant agreed to extend the closing date to May 31st, 2017. The Defendant alleges that there was no such agreement. However, when the sale was not completed in August of 2016 or for several months thereafter, the Defendant was allegedly prepared to sell the property to the Plaintiffs at a higher price given the appreciation in value of the property.

[6] The Plaintiffs commenced this action in June of 2017 to force the sale of the property. As part of the interlocutory proceedings, the Plaintiffs were directed to pay a monthly amount of $1,800.00 to the Defendant. While I will refer to this amount as “rent” in these reasons, I should not be taken has having concluded that the Plaintiffs are tenants or the Defendant is a landlord. Indeed, given the history of this case, this remains an open question.

[7] Summary judgment was originally granted to the Plaintiffs (see Downey v. Arey, 2018 ONSC 5832), but was overturned on appeal (see Downey v. Arey, 2019 ONCA 450). The Court of Appeal’s decision was communicated to the parties at the hearing on May 24th, 2020 and was reduced to writing on May 30th, 2019.

[8] After the Court of Appeal’s decision was released, Van Melle J. issued an Order confirming that the rent payments should continue to be paid. There was an issue about whether those payments were actually paid, and a motion was brought to address that issue.

[9] In addition, as a result of the Court of Appeal’s decision, the matter was to proceed to trial. However, no trial date was set in the approximately nine months after the matter was returned by the Court of Appeal. As a result, a motion was brought before Dennison J. returnable on February 28th, 2020. That motion sought an Order for sale of the house, and that the money from the sale be held in trust.

[10] Although Dennison J. did not grant that Order, she did provide relief to the Defendant in an endorsement dated March 2nd, 2020. That relief included a direction that the parties seek case management in this matter. Dennison J. also observed that this matter should proceed to trial this fall, and that a case management judge should be appointed. Ricchetti R.S.J. accepted Dennison J’s recommendation in this regard.

[11] Shortly after Dennison J. released her endorsement, I was appointed the case management judge. Very shortly after that appointment, the Superior Court of Justice ceased regular operations. However, in the late spring of this year as the Court began to resume hearing regular matters, I determined that this matter should be prepared for trial in the fall.

[12] The parties were supposed to attend an assignment Court before Ricchetti R.S.J. on July 27th, 2020. Counsel for the Defendant was present, but Counsel for the Plaintiff was not present. I am advised that this was due to a misunderstanding, and I make no different finding. However, I also adopt Dennison J.’s finding that, in this case, delay only advantages the Plaintiffs. I am also of the view that this matter must proceed to trial this fall.

[13] I have convened a number of case management conferences in this matter. The parties have confirmed that they are, generally speaking, ready for trial. However, there are issues related to the repairs for the property that necessitated this motion. I now turn to those issues.

b) The Repairs

[14] I understand that the parties have been able to agree on a number of repairs that need to be made to the property, and I presume that those repairs will be made. However, the parties have not been able to agree on the following repairs:

a) The roof over the front entrance b) The roof over the house c) Damage to the ceiling in the front hall d) Electrical switch in the master bedroom e) Deck f) The pool bar g) The pool shed, including the removal of the electrical covers h) Tree branch on the fence near the neighbour’s property. i) Backyard gate

[15] The information that I have on the repairs largely comes from the report of Mr. James Clark, a Professional Engineer, which was delivered on June 19th, 2020. There was also an estimate from Host Construction for the repairs outlined in Mr. Clark’s report. There is also some information in the Affidavits that the parties have provided about the repairs. Finally, there were some videotapes that were provided by the Plaintiffs. A significant part of the reason for the delay in releasing these reasons is that I have been having technical difficulties with the videotapes. As will be seen from my reasons, however, the other information has been sufficient for me to make a decision in this matter.

[16] The question of whether the repairs should be completed is a fact-driven question. I now turn to the arguments of the parties.

Argument and Disposition

a) The Parties’ Arguments

[17] The Plaintiffs, Mr. Marchese and Ms. Downey, argue that the repairs should be done because Mr. Arey has the responsibilities of a landlord. They also argue that they have been asking Mr. Arey to complete the repairs for some considerable time, and that they have had to deal with all of the maintenance issues on the property. Finally, they argue that at least some of the repairs must be completed because of safety issues.

[18] The Defendant, Mr. Arey, argues that he should not be required to complete the repairs that are in dispute. In support of that position, he argues that he has not had access to the property for more than three years, that he has been provided with a very minimal payment of $1,800.00 per month to pay the mortgage, home insurance and property taxes on the property, and that the delay in this matter is part of a strategy engaged in by the Plaintiffs. Mr. Arey also argues that it is difficult to know whether the repairs are required by the normal wear and tear on the property or whether they are repairs that are required because the Plaintiffs have not taken care of the property.

b) Disposition

[19] I start with the Plaintiffs’ argument that Mr. Arey is the landlord in this case. There are two problems with that argument:

a) Mr. Arey does not have the authority of a landlord in this case. For example, he cannot enter the property under the Landlord and Tenant Act. Further, the “rent” that he receives in the sum of $1,800.00 has not been increased, and cannot be increased without Court approval. Indeed, the Plaintiffs assert that the $1,800.00 that they are paying should be credited towards the purchase price for the property and that this is an issue to be determined at trial. This position is inconsistent with the Plaintiffs’ argument that Mr. Arey is the landlord. b) The outcome that the Plaintiffs are advocating for in this case is that they should end up with the ownership of the property. Tenants do not normally have the right to sue their landlords for title to the property that they live in.

[20] This second problem, the claim brought by Ms. Downey and Mr. Marchese for title to the property, is a significant issue when the repairs are considered. In essence, Ms. Downey and Mr. Marchese are arguing that title in the property should be passed to them at the conclusion of a trial that will take place in the fall of this year. In the meantime, however, they are seeking to have Mr. Arey complete a significant number of repairs at his expense.

[21] This position has the potential to work a significant inequity on Mr. Arey. Specifically, Mr. Arey could find himself completing a new roof and a new deck for a house that he then does not own. There is no clear indication that, if he made these repairs, Mr. Arey would be compensated in any way by the Plaintiffs for them if Mr. Arey lost title to the property at trial. In other words, Mr. Arey could have all of the obligations of a landlord (to repair the property) without any of the rights of a landlord, including losing the right to ownership of the property.

[22] During reply argument, counsel for the Plaintiffs suggested that the expenses related to these repairs could be split. Even if that suggestion was accepted, the problems that I have identified above would still exist. Therefore, I am not prepared to accept this suggestion either.

[23] Any potential inequity is magnified when the “rent” that Mr. Arey is receiving is considered. As an example, the repairs to the roof were estimated in one of the reports to be approximately $8,000.00. This is more than a third of a year’s rent for this one repair.

[24] Counsel for the Plaintiffs asserts that “Mr. Arey is content to maintain the benefit of monthly payments from Mr. Marchese and Ms. Downey without having to incur any liability or to selectively choose what he wants to maintain.” The previous paragraph illustrates the problem with this statement. Mr. Arey is in a position where the total costs of the repairs that the Plaintiffs want him to undertake may very well approach or even exceed the “rent” that he is receiving. This is to say nothing of the mortgage and other expenses that Mr. Arey is responsible for paying out of the “rent” that he receives from the Plaintiffs.

[25] The potential inequity to Mr. Arey in having him pay repair costs has to be balanced, however, against issues of safety. Most of the repairs can wait until the question of ownership is determined. Given that this question will be determined within the year, it is more reasonable to leave the repairs to be done (or not done) by whoever owns the property after the Court has made its decision. The fact that not completing the required repairs now may result in future damage to the property is something that will be the responsibility of whoever owns the property in the end.

[26] In this regard, I note that Mr. Arey has specifically indicated that he may not complete the repairs if he owns the property. Instead, he may simply sell the property as-is. The Court should not force a repair on Mr. Arey in a circumstance where he would not otherwise make it, merely because it may result in future damage to the property that the Plaintiffs claim to be entitled to purchase. Similarly, merely because Mr. Marchese asserts that there is “no rational reason” not to make the repairs to the property because, inter alia, he would benefit from those repairs does not mean that Mr. Marchese is correct. It may be that, if Mr. Arey wants to sell the property, the repairs will cost more than they add in value to the property. I do not have any evidence on this point either way before me. This brings me back to my previous conclusion that, subject to safety issues, if there is a repair that has to be completed it should await a determination of who owns the property.

[27] However, if there is a dangerous situation that exists at the property, then it needs to be remedied either by a repair or by some other method. This is, however, the only reason I can see for requiring repairs to the property until after the trial of this matter this fall.

[28] When I review most of the repairs, they do not appear to me to engage matters of safety. For example, the reason for conducting the repairs to the roofs is described in the Plaintiffs’ factum as follows: “[t]he roof is overdue to be replaced. It would be less costly to replace it now than wait for leaks and resulting rotting and mold, which would be more costly in the long run.” This is not a safety issue. Instead, it is a question of preventative maintenance. Given that the question of who will own the property will be determined this fall, the roof repairs should be deferred.

[29] There is a suggestion that the damage to the ceiling in the front hall could lead to mould. However, this is not a safety issue, at least at this point.

[30] The electrical switch in the master bedroom was caused by a leak from a skylight. I understand that, when the switch is turned on the bulbs burn out immediately. This suggests that there may be a problem with the electrical wiring in and around this socket. The safety issues with this problem are obvious, and this matter must be fixed immediately. Mr. Arey will be responsible for the initial cost of fixing this matter, but the ultimate question of who should bear the cost of this repair will remain open to the trial judge to determine.

[31] The deck outside the house has some rotten boards on it. However, these appear to be small issues, at least based on Mr. Clark’s report. Given this fact, and the issues surrounding access to the property for Mr. Arey, I am of the view that this repair should be the responsibility of the Plaintiffs.

[32] The repairs around the pool are all repairs that can wait until next year, especially since the summer is nearly over. There is an argument that the pool shed has electrical issues that need to be fixed. However, given that we are almost at the end of summer, and that the ownership of the property will be determined before next spring, this is a matter that can be deferred. Any safety issues with entering the pool house can be managed by the Plaintiffs, as occupiers of the property, ensuring that no one enters it.

[33] The large tree branch either next to or on the neighbour’s fence is also a matter that can wait for two reasons. First, I do not have any direct evidence that this is a concern to the neighbour. Second, it is not clear to me that the white brace attached to the tree is actually holding the tree up. Instead, it appears that this white brace may be being used as a holder for a flowerpot.

[34] Finally, there is the gate. I understand that it is not completely functional. However, that is not an issue of safety and is, again, a repair that can wait until the ownership question is determined.

[35] There are two final matters that I should address. First, there is the issue of the Occupiers' Liability Act. Ms. Downey and Mr. Marchese argue that, under this Act, it is Mr. Arey’s responsibility to ensure the safety of the property because he has claimed to own the property, and has taken the position that Ms. Downey and Mr. Marchese are tenants. Therefore, they argue that the repairs are required to be completed. Even if this argument is correct, it only assists with the repairs where there is a genuine safety issue and I have already addressed any genuine safety issues.

[36] There is also an open question as to whether the Occupiers Liability Act indeed applies in a case where the owner of the property has been excluded from that property and has no authority to enter onto it.

[37] Second, Ms. Downey and Mr. Marchese take the position that Mr. Arey should be responsible for the repairs under the Residential Tenancies Act, 2006, S.O. 2006, c. 17. Section 20 of the Residential Tenancies Act, 2006 requires the landlord to maintain and repair the property. The problem with the Plaintiffs’ position is that they seek to impose the obligations of the Residential Tenancies Act on Mr. Arey while blocking him from exercising the rights of a landlord under the Residential Tenancies Act. The Plaintiffs should not be allowed the benefits of legislation without accepting their responsibilities under that legislation. For these reasons, I reject this argument as well.

Conclusion and Costs

[38] For the foregoing reasons, Mr. Arey is ordered to pay the costs to complete the repair to the electrical switch in the master bedroom. The request of the Plaintiffs to have the remaining repairs completed at Mr. Arey’s expense is dismissed.

[39] The parties are to endeavor to agree on costs. In the event that they cannot agree on the costs of this matter, then they are to serve and file their costs submissions within seven (7) calendar days of the release of these reasons. Those submissions are not to exceed three (3) double-spaced pages, exclusive of bills of costs, case-law and offers to settle.

[40] Any reply submissions are due five (5) calendar days after the original costs submissions are made. Those submissions are not to exceed two (2) double-spaced pages, exclusive of case-law.

[41] The parties are directed to provide an electronic copy of their submissions to my judicial assistant when they are served and filed.

[42] As I am conducting the pre-trial on September 8th, 2020, the parties are advised that the deadline for costs submissions may not be extended, even on agreement, without my leave. Given that I need to make a decision on costs prior to the pre-trial, I am unlikely to grant an extension.

[43] One final matter remains to be addressed, which is the trial date. I have spoken to Ricchetti R.S.J. about setting a trial date and he has confirmed that I will be able to set a trial date at the pre-trial on September 8th, 2020. He has also confirmed that we have considerable availability for a trial in the fall of this year. To that end, I note that the parties are required to be prepared to book a trial date at the pre-trial on September 8th, 2020 and that this matter will proceed to trial this fall with or without counsel.

LEMAY J Released: August 21, 2020