COURT FILE NO.: CV-21-597 DATE: 2021 03 12
Ontario Superior Court of Justice
B E T W E E N:
JACK DUTTON, by his litigation guardian, THE PUBLIC GUARDIAN AND TRUSTEE
Gosia Bawolska, for the Applicant
Applicant
- and -
MABEL LILLIAN DUTTON
Tiffani Frederick, for the Respondent
Respondent
HEARD: March 4, 9, 11, 2021
Reasons for Judgment
MANDHANE J.
[1] The Applicant, Jack Dutton (“Jack”), and the Respondent, Mabel Dutton (“Mabel”) are married. They are both 90 years old.
[2] The couple jointly own a condominium at 2304-4460 Tucana Court, Mississauga (“the condo”). They lived there from 1995 until the events at issue in this matter. After sustaining separate falls that required hospitalization, the parties were transferred to a long-term care home. They now live together in a private nursing home in Mississauga.
[3] Jack has dementia and needs around-the-clock care. Mabel uses a mobility device but is capable of managing her own property. The couple cannot afford to pay for the nursing home and maintain their condo.
[4] On Jack’s behalf, the Public Guardian and Trustee (“the PGT”) seeks an order allowing it to sell the condo to Nitin Garg and Rinky Goyal (“the Buyers”), without Mabel’s consent. Mabel opposes the sale and has launched a related proceeding in Toronto.
Disposition
[5] For reasons that follow, I order that the condo be sold, without Mabel’s consent, and that the proceeds of sale be deposited and held in trust by the Superior Court of Justice (Toronto Region), pending further order of that Court.
Facts
[6] Jack and Mabel are owners and joint tenants of the condo. The couple live in a nursing home and the condo is currently vacant. The mortgagee is in a position to foreclose, the condominium corporation has registered several liens on the property for unpaid fees, and the taxes have been outstanding since 2018.
[7] Jack’s monthly pension income is not sufficient to pay for his care at the nursing home and the carrying costs of the condo. His nursing home fees have not been paid since October 2020.
Events leading up to the sale of the condo
[8] Jack was hospitalized in January 2018 after a fall in his home. The PGT became Jack’s statutory guardian on May 10, 2019, pursuant to a Certificate of Incapacity issued under s. 16 of the Substitute Decisions Act, 1992, S.O. 1992, Ch.30.
[9] Throughout May and June 2019, the PGT reached out to Mabel to ask her if she wanted to take over Jack’s care and to explore how the couple would be handling the carrying costs of the condo. Mabel refused to have a substantive discussion or provide a concrete financial plan, maintaining that Jack would be coming home soon.
[10] On July 25, 2019, Dr. Sameer Syed recommended that Jack be admitted to a nursing home unless there was 24-hour support available to him at home.
[11] On August 15, 2019, the PGT reached out to Mabel once again to explore her plans for the condo. She insisted that Jack would be coming home soon.
[12] There is a Continuing Power of Attorney for Property (POA) dated September 15, 2019, signed by Mabel and witnessed by her two nieces, appointing Mabel’s adult son, David Robson (“David”), to be her attorney. The POA was standard and did not include any conditions or restrictions.
[13] On or about October 17, 2019, the PGT spoke with David who advised them that Mabel had sustained a fall, was admitted to hospital and would eventually be transferred to a nursing home in or around January 2020.
[14] On December 2, 2019, the PGT called David to inquire into Mabel’s plans for the condo. David told the PGT that he had a POA over Mabel’s property and that she did not have sufficient funds to carry the condo.
[15] On or around March 26, 2020, after Jack was transferred to the same nursing home as Mabel, David, pursuant to his authority under the POA, gave the PGT permission to clear and dispose of the contents of the condo in preparation for sale.
[16] On July 9, 2020, after obtaining separate valuations from three realtors, the PGT approved a listing price of $630,000. An independent property assessor retained by the PGT prepared a report dated July 10, 2020 which valued the condo at $650,000 to $750,000. He recommended that it be listed for $650,000 for a period of 50-90 days.
[17] On September 3, 2020, David, through his counsel, wrote to the PGT to provide them with a copy of the POA and to confirm that he agreed to the sale of the condo on Mabel’s behalf.
The listing and sale of the condo to the Buyers
[18] The PGT signed the Listing Agreement on behalf of Jack on September 8, 2020. On September 12, David signed it on behalf of Mabel pursuant to his POA. The Listing Agreement does not identify Mabel as a joint owner.
[19] There were no offers on the condo between September or October 2020.
[20] Mabel says that she learned from nursing home staff that the condo had been listed for sale and that her contents had been disposed of. Mabel confronted the PGT on November 2, 2020, and their staff confirmed that indeed the condo was being sold. Mabel was upset, and again the PGT advised her that she could apply to take over Jack’s care if she was unhappy.
[21] Mabel immediately called David to plead with him not to sell the condo. However, during this time period, she did not take any further steps to revoke the POA or launch a legal proceeding to challenge the proposed sale.
[22] On November 8, 2020, the Buyers, who were strangers to the sellers, offered to purchase the condo for $565,000. This was the only offer made on the condo.
[23] The PGT and David, on behalf of Jack and Mabel, accepted the offer on November 17, 2020. The transaction was set out in a standard Agreement of Purchase and Sale, and listed the sellers as Jack Dutton and Mabel Lillian Dutton (“the APS”). The Buyers provided a deposit of $56,500, and a closing date was set for December 16, 2020.
[24] The Buyers were not aware that one of the sellers was acting according to a POA, and the APS is silent on this point.
Events prior to closing
[25] After the APS had been signed, on November 20, 2020, Mabel formally revoked David’s POA. A week later, on November 27, David wrote the PGT to advise them of these developments, stating: “I was surprised to hear that you had mentioned to my mother our plans to sell the condo. When I talked to her on the phone afterwards, she was furious. I tried to explain to her that the sale of the condo was the only sensible thing to do but she was adamant that it should not happen…”
[26] On November 30, 2020, the Buyers conducted a title search and sent a letter of Requisition to PGT counsel.
[27] Given that the POA was revoked by Mabel after the APS was signed, the APS was a valid contract and Mabel was now legally required to execute the necessary closing documents. On November 30, PGT counsel wrote Mabel to inform her that there could be serious legal and financial consequences if the transaction did not close, including that “the PGT will take legal action against you for any damages that are incurred by our client as a result of your failure to close on this transaction.” Mabel did not respond; she felt that she was being “bullied” into cooperating with a deal that undervalued the couple’s only asset. It was around this time that Mabel retained counsel.
[28] On December 2, 2020, the PGT called Mabel to reiterate and explain the possible legal consequences of failing to sign the closing documents. Mabel’s counsel attended and advised the PGT that her client continued to oppose the sale.
[29] Despite Mabel’s stated intention not to cooperate with the closing, during November and December, the PGT did not take any legal steps to enforce its rights under the APS and Mabel did not take any steps for judicial intervention to invalidate the agreement.
[30] On December 10, 2020, the Buyers signed an “Amendment to the Agreement of Purchase and Sale” to allow the sale to close on December 18 rather than December 16. They say that they requested a delay in the closing of two days “only due to the reason of the current pandemic situation and to keep safe side for our closing.” However, as neither Seller signed the amendment, the closing date of the APS remained December 16. The Buyers say they remained ready, willing and able to close the deal on December 16 and there is no evidence to suggest otherwise.
[31] On December 15, 2020, PGT counsel informed the Buyers’ counsel that the transaction may not close because the co-owner of the property was not cooperative.
[32] On December 16, 2020, PGT counsel wrote to Mabel again to warn her about the potential consequences of not closing the transaction. Again, Mabel did not respond.
[33] At 1:07 p.m. on December 16, 2020, PGT counsel wrote Buyers’ counsel to confirm that the APS would not be closing that day, explaining that:
While the PGT is ready, willing and able to sign on behalf of its client, we are unable to obtain the co operation of the other owner, and therefore cannot close. We are prepared to extend the transaction for 90 days so that we may bring an application for partition and sale.
[34] By way of reply email at 3:54 p.m., the Buyers wrote back as follows:
Without prejudice to any rights our Purchaser client under the Agreement of Purchase and Sale dated November 8, 2020, the Purchaser agrees to extend/amend the closing date for a period of three (3) months with a closing date of March 15, 2021 with all other terms of the Agreement of Purchase and Sale to remain same.
[35] Neither Mabel nor her counsel were included in the conversations or copied on the December 16, 2020 email correspondence between the PGT and the Buyers. Mabel did not agree, consent or acquiesce to an extension of the closing date.
[36] The APS did not close on December 16, 2020.
Events after the closing date
[37] On January 6, 2021, PGT counsel wrote Mabel to advise that “the Buyers have agreed to extend the closing date until March 15, 2021” and that the PGT would be commencing a legal application to force the sale the condo to the Buyers.
[38] Before me, the PGT relied on a letter from the Buyers’ real estate lawyer dated December 17, 2020 as further evidence of the Buyers’ extension. The letter states, in its entirety:
Further to our respective emails, we on behalf of our respective clients, do confirm that the closing date has been amended to March 15, 2021 with all other terms of the Agreement and Purchase and Sale dated November 8, 2020 to remain the same.
Below the letter-portion of the document, PGT counsel signed an acknowledgement the same day confirming “the above noted amendment to the Agreement of Purchase and Sale.” Neither Mabel nor her counsel were addressed or copied on this correspondence.
[39] At this point, only one seller had accepted the extension, namely the PGT on behalf of Jack. The other seller, Mabel, did not execute the amendment to the APS.
Mabel’s claim before the Toronto court
[40] Mabel issued a Statement of Claim in Toronto on February 4, 2021, naming David, Jack (as represented by the PGT), the PGT, and the Buyers as defendants (“Mabel’s Claim”). Mabel challenges the validity of the POA and David’s actions taken pursuant to it, including and specifically, him signing the APS on her behalf. She asks that the condo not be sold or, in the alternative, for damages.
[41] The PGT was served with Mabel’s Claim on February 5, 2020, and they advised the Buyers’ real estate lawyer about it on February 8. This was the first time the Buyers became aware that one of the sellers was acting pursuant to a POA. (They were properly served later in February.)
The Proceedings
[42] On February 16, 2021, the PGT brought an application to allow it to sell the condo to the Buyers without Mabel’s consent. On February 22, 2021, Bielby J. agreed that the matter was urgent, and adjourned it to allow the PGT to serve Mabel and her counsel. On February 26, 2021, Mabel’s counsel confirmed that she would be opposing the application, and it was adjourned to allow her to file a Response.
[43] On March 4, 2021, the parties appeared before me for a hearing on the merits. At that appearance, the PGT made submissions and was asked to have the Buyers’ real estate lawyer attend at the next appearance.
[44] On March 9, the hearing continued, and I heard submissions from the Buyers’ real estate lawyer and the Respondent. I added the Buyers as a party to this matter pursuant to Rule 13.01(1) of the Rules of Civil Procedure, R.S.O 1990, Reg. 194, and the matter was adjourned to allow them to be served, retain counsel, and prepare a Response.
[45] On March 11, the Buyers appeared and were represented by counsel. They filed an affidavit and Nitin Garg was cross-examined on the same. I heard final submissions from all three parties.
Analysis
[46] The PGT and the Buyers asks for the following substantive relief:
a) an order dispensing with Mabel’s consent and signature with respect to all documents required to complete the sale of the condo to the Buyers on March 15, 2021; and
b) in the alternative, for an order for the partition and sale of the condo on the terms set out in the APS, and that Mabel’s consent and signature for the sale of the condo be dispensed with.
[47] Mabel opposes the application.
There is no longer a valid agreement between the parties
[48] For the purposes of this application, the parties agree that both the PGT (acting for Jack) and the Buyers could rely on the POA for the purposes of negotiating the APS: Datta v. Eze, 2020 ONSC 1240. They agree that the APS executed on November 17, 2020 was binding and enforceable as of the closing date.
[49] But the APS did not close on December 16, 2020.
[50] Before me, the PGT and the Buyers argue that the APS remains valid because the closing date was properly extended to March 15, 2021. I reject this argument.
[51] The APS contemplates the possibility of extending timelines, but only with the consent of both “the Seller and Buyer”:
- Time shall in all respects be of the essence hereof provided that the time for doing or completing of any matter provided for herein may be extended or abridged by an agreement in writing signed by the Seller and Buyer or by their respective lawyer who may be specifically authorized in that regard.
Here, despite being listed as one of the sellers on the APS, neither Mabel nor any duly authorized attorney under a Power of Attorney, agreed to the extension of the closing date to March 15.
[52] The clear evidence is that, as soon as she found out about the sale, Mabel voiced her strong opposition and eventually retained counsel to fight it. Accordingly, the PGT did not have the express or implicit authority to extend the APS on Mabel’s behalf. There is no basis in law to conclude that the APS was to close on reasonable notice. The absence of any evidence indicating that Mabel agreed to the extension of the closing date past December 16, 2020 is fatal.
[53] The APS terminated on December 16, 2020 and there is currently no enforceable agreement between the Sellers and Buyers.
Ordering the sale of the home to the Buyers
[54] Having found that there is no valid APS, I now consider the PGT and the Buyers’ alternative argument that I order the sale of the condo to the Buyers pursuant to the s. 2 of the Partition Act, R.S.O. 1990, c. P.4.
[55] The parties agree that it would not be feasible or desirable for the Court to order partition of the condo prior to its sale. Therefore, if I order the sale of the condo, the parties agree that they each have a fifty percent interest in the proceeds.
[56] The parties also agree that I have limited discretion to refuse Jack’s request to sell the condo. Section 2 of the Partition Act unequivocally states that “joint tenants…may be compelled to make or suffer partition or sale of the land, or any part thereof…” As Jack’s legal guardian, the PGT is permitted to bring an application for sale pursuant to s. 3.
[57] The Partition Act reflects and reinforces the common law right to dispose of one’s real property. It is in this context that I note that David’s actions taken pursuant to the POA are irrelevant to my determination of whether to grant relief under the Partition Act. The Partition Act allows a joint-owner to apply to the court to force the sale of the property; my jurisdiction is not conditional on the existence of a prior purchase and sale agreement or consent of the respondent. Indeed, the Partition Act functions as a remedy of last resort, to force the sale when the respondent refuses to cooperate with the same.
[58] In the leading case of Davis v. Davis, [1954] O.R. 23 at para. 9, Laidlaw J.A., writing for the Court of Appeal for Ontario, reflected as follows:
In my opinion, the change made in the legislation in 1913, whereby the Court obtained the discretionary power to allow or refuse an application for partition or sale of lands, did not alter the policy of the law therefore existing or the fundamental considerations which ought to prevail in reaching a decision in the matter. There continues to be a prima facie right of a joint tenant to partition or sale of lands. There is a corresponding obligation on a joint tenant to permit partition and sale of lands, and finally the Court should compel such partition or sale if no sufficient reason appears why such an order should not be made. I do not attempt to enumerate or describe what reasons would be sufficient to justify refusal of an order for partition or sale. I am content to say that each case must be considered in the light of the particular facts and circumstances and the court must then exercise the discretion vested in it in a judicial manner having due regard to those particular facts and circumstances as well as to the matter which I have said are, in my opinion, fundamental.
[59] Before me, the parties agree that I can refuse the sale of the condo if I am satisfied that applicant’s conduct has been malicious, vexatious or oppressive: Greenabanktree Power Corp. v. Coinamatic Canada Inc. (2004), 75 O.R. (3d) 478 (Ont. C.A.); Latcham v Latchum, 2002 CarswellOnt 1757 (Ont. C.A.).
[60] In MacDonald v. MacDonald (1976), 14 O.R. (2d) 249, the Divisional Court said that the discretion to refuse the sale should only be exercised on a preponderance of evidence to indicate that serious hardship would result to the respondent if the order was granted.
[61] Mabel says that I should refuse the sale based on the PGT’s conduct. I agree with Mabel that the PGT must aspire to the highest professional standards given its unique status as a government agency with fiduciary responsibilities, wide-ranging powers, and a nearly limitless capacity to support this and related litigation. I also agree that the PGT fell short of these high professional standards when it acted unilaterally to extend the APS without Mabel’s knowledge or consent.
[62] However, that all being said, I am not prepared to find that the PGT’s actions were so unconscionable that they justify this court denying Jack his right to sell the condo. Foremost, I find that the PGT acted in Jack’s best interests throughout. The evidence before me is clear: the time has come for Jack to access the equity in his only remaining asset – the condo he shared with his loving wife. There is simply no other way for him to satisfy his debts and secure his future.
[63] Second, I find that any prejudice to Mabel from the PGT’s attempt to unilaterally extend the closing date is adequately remedied by my finding that there is no valid APS between the parties.
[64] Finally, I find that the PGT’s attempts to unilaterally extend the closing date were the direct result of Mabel’s inaction at key conjunctures which, in turn put the PGT in a difficult position in terms of meeting its legal responsibilities to Jack. Throughout 2019, Mabel largely rebuffed the PGT’s efforts to engage her in productive and realistic discussions about the couple’s finances and future. She also refused repeated offers to take over Jack’s guardianship. When it came time to sign the APS, she simply refused to do so rather than challenging its validity before the courts.
[65] Indeed, in the background to this entire dispute is Mabel’s steadfast refusal to accept that she and Jack will not be returning to live in the condo together. Her plans to refinance the condo are not realistic given the parties’ debts and extensive health needs.
[66] So, while seeing a partner lose their capacity and be admitted into long-term care is certainly difficult, the Court cannot condone a head-in-the-sand approach from an individual that is legally capable of managing her own affairs. To do so would risk perpetuating negative stereotypes about the capacity of older persons to make timely decisions on matters of importance to their well-being.
[67] On the whole, I find that both Mabel and the PGT bear some responsibility for the difficult situation in which the parties now find themselves.
[68] I now turn to the PGT and the Buyers’ submission that I order the condo be sold to the Buyers on the terms originally agreed to in the APS. The PGT and the Buyers admitted that there was no specific legal authority allowing me to make such an order but suggest that I have inherent jurisdiction to do so.
[69] The Buyers say that they are ready, willing, and able to close next week, that they have clean hands insofar as they did not know about the POA prior to this litigation, and that it would not be fair to embroil them further in a messy and expensive family feud. The PGT further cautions that, if I do not order sale to the Buyers specifically, Jack (and Mabel) could be exposed to legal liability for failing to close the APS on December 16, 2020.
[70] While I sympathize with the parties’ positions, I refuse to order that the condo be sold the Buyers. It would be improper to use my authority under the Partition Act to, in effect, order specific performance of an APS that is no longer valid.
[71] Given that Mabel’s Claim is outstanding in Toronto and names all the parties to this proceeding as defendants, any claim that the Buyers may have for breach of contract can be properly dealt with by the Toronto Court.
Order
[72] The Buyers’ deposit of $56,500 provided pursuant to the APS, shall be returned to them forthwith by any brokerage holding these funds, including but not limited to Accsell Realty Brokerage and Tri-City Professional Realty Inc.
[73] The condominium located at 2304-4460 Tucana Court, Mississauga shall be listed for sale within 30 days.
[74] Counsel for Jack Dutton and counsel for Mabel Dutton shall agree on a real estate agent to list the property. Both counsels shall agree to list the condo at a reasonable price, as recommended by the real estate agent.
[75] Both parties shall cooperate fully with the listing and sale of the condominium.
[76] Mabel Dutton’s consent to sell the condominium is hereby dispensed with.
[77] The Buyers shall be free to make an offer on the condo after it is listed.
[78] The proceeds of sale, net of encumbrances, shall be divided equally between the parties, and paid into the Superior Court of Justice (Toronto Region) pending further court order.
[79] Nothing in my decision or order shall be read as precluding the Buyers from enforcing their rights under the APS.
Costs
[80] The parties shall endeavour to agree on the matter of costs. However, if they are unable to do so, the parties shall serve and file with this Court their Bills of Costs and short submissions (3 pages maximum, double-spaced) on or before March 25, 2021.
Mandhane J. Released: March 12, 2021