Court File and Parties

COURT FILE NO.: CV-21-00665433-0000.

DATE: 20210621

ONTARIO SUPERIOR COURT OF JUSTICE

RE: SUSAN NICHOLAS and JOAN POTTINGER, in their capacities as Estate Trustees of the Estate of John Bedford Gillespie, Applicants

-and-

CONRAD OGNIEWICZ, Respondent

BEFORE: F.L. Myers J.

COUNSEL: Adam Stephens and Karen Phung, for the applicants

READ: June 21, 2021

ENDORSEMENT

[1] Self-induced urgency is not “urgent”.

[2] The applicant asks to schedule a one-hour, urgent application under the Vendors and Purchasers Act, RSO 1990, c V.2 to determine the validity of requisitions submitted on behalf of a purchaser in a real estate transaction.

[3] The agreement of purchase and sale is dated March 23, 2021.

[4] The agreed closing date is June 25, 2021.

[5] The agreement form has blank spaces into which the parties inserted a date by which the purchaser must submit title requisitions.

[6] The parties agreed that the purchaser would submit his requisitions by June 11, 2021 – two weeks before closing.

[7] On June 11, 2021, the purchaser’s lawyer submitted 21 requisitions including the following:

Requisition #17: On June 3, 2021, our client received notice from the City of Toronto that the Toronto Preservation Board will be meeting on June 16, 2021 (the “TPB Meeting”) to discuss the inclusion of 55 St. Edmunds Drive on the City of Toronto Heritage Register (the “Notice of Intention”). The Seller would have received prior notice of the intentionof the Toronto Preservation Board to include the property on the City of Toronto Heritage Register and failed so disclose this information to the Buyer. In this regard:

(A) The Notice of Intention is a latent defect which the Seller had an obligation to disclose; and

(B) In accordance with the principals [sic] set out in Armitage v. Liptay, 1977 1190 (ON CA), the Notice of Intention exposes the Buyer to litigation or hazard such that the Buyer is not required to accept title.

REQUIRED: Withdrawal of the application by the Toronto Preservation Board to include the property on the City of Toronto Heritage Register.

Requisition #18: Paragraph 8 of the Purchase Agreement states that “the Buyer shall be allowed until 6:00 p.m. on the 11th day of June, 2021…to satisfy the Buyer that… the principal building may be insured against risk of fire”. A recent inspection of the Property determined that the electrical system has predominantly knob and tube wiring such that the Property cannot be insured against fire.

REQUIRED: Replacement of the electrical system such that the Property can be insured against fire.

Requisition #19: A recent inspection of the property determined the existence of an unused underground oil storage tank. Applicable governmental regulations and the Technical Standards & Safety Authority (the “TSSA”) require that once use of an underground fuel oil storage tank has been discontinued, the fuel oil storage tank must be removed by a qualified TSSA registered Petroleum Mechanic 2.

REQUIRED: The removal of the underground storage tank in accordance with applicable governmental regulations and the requirements of the TSSA.

[8] On June 18, 2021, the vendors asked for an urgent date for a one-hour hearing to resolve the validity of these requisitions. The request is made under the Notice to Profession – Toronto, Toronto Expansion Protocol for Court Hearings during Covid-19 Pandemic, Part C.1.8.

[9] The vendors say that the deal is “as-is where-is” and does not require them to fulfill the requisitions made.

[10] It is apparent that none of the three quoted requisitions can likely be accomplished physically before the closing date. If the purchaser actually wants them done for closing, he has waited until a time when that is not possible. The closing will either have to be deferred or the transaction terminated.

[11] If the purchaser is not going to close, then there is a longer term legal battle that should not and cannot fairly be determined in a one-hour hearing brought on in haste.

[12] If, however, the purchaser actually just wants an abatement of the purchase price, then that issue is monetary and is not urgent.

[13] The civil list in Toronto is building a backlog of motion and application hearings. It is currently suffering unacceptably long timeouts for civil motions and applications due to the effects of the pandemic and a lack of resources. Truly urgent matters are being heard on an urgent basis. But no judge is sitting around waiting for them to come in. They are heard at a cost to other cases waiting in the queue or to case conferences that the judge may have to defer, or to parties waiting for the release of the judge’s reserved decisions that the judge was writing in her non-sitting time.

[14] The time-sensitivity to the proposed motion was self-induced by both sides. The vendors agreed to a requisition date that left them insufficient time to come to court. They agreed to give the purchaser two-and-a-half months to submit requisitions on the eve of closing. For his part, the purchaser waited too long to obtain the relief he says he requires (assuming he truly wants it).

[15] No one is at risk of physical injury. The property is not about to suffer irremediable waste. No confidential information is at risk of disclosure or misuse. No business is at risk of imminent failure or irreparable harm unless prima facie unlawful misconduct is urgently prevented.

[16] The foregoing list is not exhaustive of urgency. But here, a real estate deal is at risk of collapse or renegotiation. The court is not available to help the parties understand their negotiation positions by determining their rights on an urgent basis.

[17] I do not know if the parties’ real estate agent(s) advised them on the requisition date or if they consulted lawyers before they entered into an important legal transaction. I do not know if the parties or their agents knew that the requisition date matters. It does. It is deferred at the parties’ own risk.

[18] The proposed hearing is not a one-hour hearing and the matter is not one that can be brought on properly in a couple of days. There are legal issues about the scope of valid requisitions under this agreement of purchase and sale,. The contract seems to allow for requisitions beyond those that go to title. Then, as a matter of interpretation, what is the effect of the “as-is where-is clause”. There are factual issues. For example, is the property insurable with knob and tube wiring? Is it just a matter of cost? Was the possibility of the heritage designation known or reasonably discoverable? Then there are issues of mixed fact and law, like: is the possible designation a latent defect? Is it covered by the requisition clause in the agreement?

[19] I note that the statute provides an appeal as of right to the Divisional Court. If either side appeals, the parties will not have a final answer before the scheduled closing date even if this court heard the matter urgently and the Divisional Court did too.

[20] The parties have their rights under their agreement and can assert them as they deem appropriate. The court is available to determine the issues in the ordinary course.

[21] The transaction can play out and close or settle or not. Each party is capable of asserting their rights and negotiating a resolution if they wish to do so.

[22] This proposed application is not urgent in the sense used in the Notice to the Profession. I see no basis for it to jump the queue.

F.L. Myers J.

Date: June 21, 2021