COURT FILE NO.: CV-20-00641777-0000

DATE: 2021/02/12

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

SHUANGHUAI GONG

Plaintiff

– and –

NEUHAUS MANAGEMENT LTD. and REGENT STREET DEVELOPMENTS LTD.

Defendants

A. Pilkington and A. Murphy for the Plaintiff

M. Simaan, for the Defendants

HEARD: January 11, 2021

ellies R.S.j.

REASONS FOR DECISION

OVERVIEW

[1] The defendants, Neuhaus Management Ltd. (“Neuhaus”) and Regent Street Developments Ltd. (“Regent Street”), appeal the decision of Master McAfee of July 8, 2020 in which she dismissed their request to discharge a certificate of pending litigation (“CPL”) registered against property owned by Regent Street. The property consists of a lot on a plan of subdivision in Richmond Hill on which Neuhaus had agreed to build a new home for the plaintiff, Shuanghuai Gong.

[2] The CPL was registered pursuant to an order granted by the same master following an ex parte (without notice) motion brought by the plaintiff.

[3] The defendants submit that the master erred in law by failing to discharge the CPL due to the plaintiff’s failure to make full and fair disclosure on the ex parte motion and that she misapprehended the evidence when she applied the test for whether a CPL should issue in the circumstances of this case.

[4] For the following reasons, the appeal is dismissed.

FACTS

[5] The plaintiff is a retired lady in her 60s who immigrated to Toronto from her native China in 2016. She has a daughter living in Toronto, Wei (Emily) Ding, to whom she provided a power of attorney for property and with whose assistance she found the Richmond Hill property.

[6] The property is situated in a development known as The Enclave at Mill Pond. It is owned by Regent Street and was being developed by Neuhaus, two companies that share a common officer and director, Khalid Yusuf.

[7] On November 11, 2016, the plaintiff entered into an agreement of purchase and sale (the “APS”) to purchase a home to be built by Neuhaus on the property for the sum of $1,900,000. She paid a deposit over four months in the total amount of $200,000. The deal was originally scheduled to close on September 6, 2018. The closing date was moved three times by Neuhaus under the APS, eventually being set for January 6, 2020. However, on November 20, 2019, the partially constructed home caught fire.

[8] Neuhaus gave notice to the plaintiff on November 28, 2019 that the fire constituted an “unavoidable delay” within the meaning of the APS. As defined in the APS, an unavoidable delay permitted Neuhaus to set yet another new closing date.

[9] The news about the fire sparked a series of messages between the lawyers for Neuhaus and the plaintiff. The plaintiff was concerned about both the cause and the effect of the fire. Pursuant to the terms of the APS, where the fire was within the control of, caused or contributed to by the negligence of Neuhaus, the APS could be terminated, the plaintiff would be entitled to the return of her deposit, and there would be no further delay. The plaintiff took the position that she was not required to accept Neuhaus’s characterization of the fire as an unavoidable delay. She sought information from Neuhaus so she could make her own determination in that regard.

[10] With respect to the effect of the fire, the plaintiff was concerned about the possibility that the structure might be repaired, as opposed to being completely replaced.

[11] Until January 16, 2020, the communications between the parties had been through their lawyers. But on that date, the plaintiff wrote to everyone via Ms. Ding to say that she was terminating the APS given the lack of evidence as to the cause of the fire. However, Neuhaus did not accept Ms. Ding’s correspondence as constituting a termination of the agreement. Its lawyer wrote to the plaintiff’s lawyer, seeking clarification. The plaintiff’s lawyer eventually wrote back, advising that his client did not intend to repudiate the agreement, but only to get information. This was accepted by Neuhaus, whose lawyer wrote on January 22, 2020 to advise that Neuhaus’s insurers were demolishing the existing structure and restoring the site so that new construction could begin.

[12] This, however, did not satisfy the plaintiff, who continued to insist on receiving information regarding the cause of the fire. On February 11, 2020, Neuhaus provided the plaintiff with a copy of an incident report regarding the fire, which indicated that the fire department was unable to determine the cause of the fire. That report seems to have mollified the plaintiff, who stopped asking for more information.

[13] On March 16, 2020, Neuhaus wrote to the plaintiff to advise that the new closing date would be October 27, 2020.

[14] About one month later, on April 20, Neuhaus wrote to the plaintiff to request further financial information from her. Neuhaus purported to rely on clause 61 of the APS, which allowed it to insist that the plaintiff provide it with additional financial information. The clause reads (the capitalized words are defined in the APS):

61 PURCHASER’S FINANCING

The Purchaser hereby covenants and agrees to provide to Neuhaus such financial information regarding the Purchaser forthwith after the Purchaser signing this Agreement, and thereafter as the Vendor may require from time to time prior to the Closing Date for the purpose of confirming that the Purchaser has the financial capability of completing the transaction of purchase and sale contemplated by this Agreement. If the Purchaser fails to provide such information within ten days of the request for same by the Vendor, then the Purchaser shall be considered to be in default pursuant to this Agreement. In the event that the Vendor is not satisfied, in its sole and absolute discretion with the financial strength of the Purchaser or with the completeness and accuracy of the information provided by the Purchaser, the Purchaser hereby acknowledges and agrees that the Vendor shall have the right, in its sole, absolute and arbitrary discretion to:

(a) require the Purchaser to pay an additional deposit in such amount as may be determined by the Vendor, in its sole and absolute discretion, which amount shall immediately become due and shall be paid by the Purchaser to the Vendor by certified cheque within five days of written notice given by the Vendor to the Purchaser in this regard, failing payment the Purchaser shall be in default pursuant to this Agreement; or

(b) terminate this agreement. Upon such termination, the Deposit paid by the Purchaser to such date shall be returned to the Purchaser without interest or deduction and the Vendor shall not be liable for any losses, costs or damages incurred by the Purchaser whatsoever as a result of such termination.

In the event that the Purchaser is arranging mortgage financing for the purpose of completing the transaction of purchase and sale on the Closing Date the Purchaser hereby covenants and agrees to apply for such mortgage financing within 10 days from the date of acceptance of this Agreement by the Vendor and forthwith provide the Vendor with evidence of said application and a copy of approval or rejection. In the event that the Purchaser fails to diligently comply with this provision, the Purchaser acknowledges and agrees that the Vendor shall have the right, in its sole, absolute and arbitrary discretion to:

(a) require the Purchaser to pay an additional deposit in such amount as may be determined by the Vendor, in its sole and absolute discretion which amount shall immediately become due and shall be paid by the Purchaser to the Vendor by certified cheque within five days of written notice given by the Vendor to the Purchaser in this regard, failing payment the Purchaser shall be in default pursuant to this Agreement; or

(b) terminate this Agreement. Upon such termination, the Deposit paid by the Purchaser to such date shall be returned to the Purchaser without interest or deduction and the Vendor shall not be liable for any losses, costs or damages incurred by the Purchaser whatsoever as a result of such termination.

[15] In its letter, Neuhaus requested that the plaintiff provide a firm mortgage commitment from a Canadian chartered bank and that she provide “proof of down payment”. This request set off another cascade of correspondence between the parties. Ms. Ding advised Neuhaus that the previous mortgage approval had expired due to the delayed closing and that her mother was back in China and was unable to return due to COVID-related travel restrictions to obtain another approval. This did not satisfy Neuhaus, who continued to insist on the additional financial information.

[16] On May 1, 2020, Mr. Yusuf wrote to Ms. Ding to advise her that the plaintiff would be given an extension to provide the required information, but only if the plaintiff paid a further deposit of $200,000 within 10 days, failing which Neuhaus would consider the plaintiff in breach of the APS and the original $200,000 deposit would be forfeited.

[17] In response, Ms. Ding provided a mortgage commitment letter and also provided copies of the plaintiff’s bank statement, confirming the source of the original down payment. Neuhaus was not satisfied with the commitment letter because it failed to identify the bank branch involved or to provide contact information for it. Neuhaus also continued to insist on the additional deposit.

[18] Eventually, the plaintiff provided a mortgage commitment in the form required by Neuhaus. However, she refused to pay the further deposit on the basis that it was an unreasonable request and, therefore, outside the scope of s. 61 of the APS.

[19] On May 20, 2020, Neuhaus advised that the APS was being terminated because of the plaintiff’s refusal to pay the further deposit and that the original $200,000 deposit was being kept as forfeited under the terms of the APS.

[20] The plaintiff commenced an action and moved without notice before Master McAfee for a CPL. The motion was granted by the master on June 1, 2020. When the CPL came to the attention of the defendants, they moved before Master McAfee to set it aside. Their motion was heard on July 8, 2020. The master released her decision on July 9, dismissing the motion, for reasons to follow. Those reasons were released on July 21, 2020 (2020 ONSC 4430).

[21] The defendants made two main arguments before the master. First, they argued that the plaintiff had failed to make full and fair disclosure of all material facts when she brought the ex parte motion for a CPL, as she was required to do. They submitted that the plaintiff ought to have brought to the court’s attention the provisions of s. 41 of the APS (the “no registration clause”) which reads:

41 NO REGISTRATION

The Purchaser agrees not to register nor allow or caused [sic] to be registered against title to the Land any notice, lien, execution, encumbrance or caution or other reference to this Agreement or his interest in or against the Land. If any such registration occurs, the Vendor may terminate this Agreement forthwith and the Vendor shall be entitled to retain the Deposit and all other amounts paid by the Purchaser to the Vendor hereunder as liquidated damages and not as a penalty (in addition to any other remedy available to it) and the Purchaser shall have no further right to or interest in this Agreement or the Real Property. Further, the Purchaser hereby irrevocably consents to a court order removing such registration and agrees to pay all costs of obtaining such order.

[22] A copy of the APS had been appended to an affidavit sworn by Ms. Ding in support of the relief requested in the ex parte motion. However, Neuhaus maintained that the plaintiff was obliged to bring the provisions of clause 41 to the attention of the master, rather than simply filing a copy of the APS as an attachment. Neuhaus relied on cases that held that a no registration clause is always material, regardless of whether it is operative at the time of the motion.

[23] There was no issue that the plaintiff had failed to bring the no registration clause to the master’s attention in the ex parte motion. However, relying on the decision in McGrath v. B.G. Shickedanz Homes Inc. (2000), 56 O.R. (3d) 34 (Ont. S.C.), the master held that this did not amount to material non-disclosure because Neuhaus had terminated the agreement prior to the motion being brought and the clause was therefore no longer operative. She distinguished the cases relied upon by the defendants on the basis that the no registration clause in this case did not clearly prohibit the registration of a CPL.

[24] The defendants also argued, in the alternative, that the plaintiff had failed to satisfy the criteria necessary to obtain a CPL as set out in 572383 Ontario Inc. v. Dhunna, 1987 CarswellOnt 551 (Ont. S.C. – Master). The master disagreed. She held, among other things, that the land in question was unique and pointed out that the plaintiff was claiming specific performance only and had not advanced an alternative claim for damages.

ISSUES

[25] As they did before the master, the defendants make two principal arguments in this appeal.

[26] First, they argue that the master erred in law by failing to find as material three things that they allege the plaintiff failed to disclose:

(1) her repeated attempts to repudiate the APS;

(2) Neuhaus’s reasons for wanting further financial information and a further down payment under clause 61 of the APS; and

(3) the provisions of the no registration clause of the APS.

[27] Second, the defendants argue that the master committed a palpable and overriding factual error by misapprehending the evidence as it related to the Dhunna factors.

[28] The parties agree that the master’s decision may only be interfered with if she made an error of law, exercised her discretion based on the wrong principles, or misapprehended the evidence such that there was a palpable and overriding error: Zeitoun v. Economical Insurance Group, 2009 ONCA 415, affirming Zeitoun v. Economical Insurance Group (2008), 2008 CanLII 20996 (ON SCDC), 91 O.R. (3d) 131 (Div. Ct.). However, as I hope to demonstrate below, this standard is more difficult to apply to the defendants’ first argument than it is to their second.

ANALYSIS

Material Non-disclosure

[29] No authority need be cited in support of the well-settled principle that a party moving for an order that will affect the rights of a party to whom no notice has been given must make full and fair disclosure of all material facts. The reason for imposing such an onus on the moving party was articulated by Sharpe J. (as he then was) in United States of America v. Friedland, 1996 CarswellOnt 5566, at para. 26:

The Judge hearing an ex parte motion and the absent party are literally at the mercy of the party seeking injunctive relief. The ordinary checks and balances of the adversary system are not operative. The opposite party is deprived of the opportunity to challenge the factual and legal contentions advanced by the moving party in support of the injunction. The situation is rife with the danger that an injustice will be done to the absent party.

[30] This long-standing principle is codified in r. 39.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, which also provides that the failure to make such disclosure is itself a sufficient reason to set aside an order obtained where that has occurred.

[31] As the defendants correctly submit, and as the master in this case appears to have accepted, the duty to make full and fair disclosure requires a party moving without notice to do more than just append a copy of an agreement containing an important term to an affidavit filed in support of the motion. The duty requires that the moving party bring the term to the attention of the court, preferably in the body of the affidavit, but certainly in its written or oral submissions: Cimaroli v. Pugliese. 1987 CarswellOnt 2530 (Ont. S.C. – Master), at para. 5, citing Farrachi v. Polo, 6 W.D.C., Nov. 12, 1986 (Ont. S.C. – Master); McGrath, at para. 36; Allen v. Process Matters, 2006 CanLII 7500 (Ont. S.C. – Master), at p. 5.

[32] The issue in this appeal is not the scope of the duty of full and fair disclosure, but whether it was fulfilled. With respect to the no registration clause, that issue turns on whether the clause was material. With respect to the other two alleged failures to disclose, the primary issue is a different one.

The Alleged Repudiation and Clause 61

[33] The defendants contend that the plaintiff failed to make full and fair disclosure of more than just the no registration clause. They submit that the plaintiff also failed to fully disclose her own efforts at repudiating the APS and failed to put forward Neuhaus’s reasons for wanting a further deposit.

[34] However, the plaintiff submits that the defendants never raised these additional allegations before the master. I accept that submission. There is no reference in the master’s reasons of July 21 to the allegations the defendants now make that the plaintiff failed to make full and fair disclosure relating to her alleged efforts at repudiating the APS or to clause 61 of that agreement. Nor do the defendants contend that they raised these arguments before the master and that she failed to deal with them in her reasons. I conclude, therefore, that they did not. The fact that the defendants are raising these issues for the first time on appeal is enough to dispose of them on that basis alone: Kaiman v. Graham, 2009 ONCA 77, 245 O.A.C. 130, at para. 18. However, even if it were not, I would dismiss these arguments on their merits.

[35] Contrary to the submissions of the defendants, the plaintiff did make full and fair disclosure of the events leading up to the termination of the APS by the defendants. Ms. Ding’s affidavit supporting the request for a CPL was 19 pages long and comprised 103 paragraphs. The motion record of which it formed a part was 188 pages thick. In addition to appending the APS and most, if not all, of the correspondence between the parties, Ms. Ding traced in significant detail the events that occurred both prior to and after the fire. She also brought the existence of clause 61 to the attention of the master by quoting from it in the body of her affidavit. What Ms. Ding did not do, and was not obliged to do in my view, was to characterize those events and that clause in the way that the defendants tried to characterize them before me.

[36] The defendants submit that the duty to make full and fair disclosure required the plaintiff “in effect, to argue why the relief [sought] should not be granted”: factum, para. 78. In support of their submission, they rely on the decision of Master Haberman in Allen, at p. 7. I do not view the Allen decision as going so far as to require argument on behalf of an opponent. The duty is to bring the opposing party’s position to the attention of the judicial official, not to attempt to persuade her to favour it.

[37] Even if the law supported the defendants’ contention that the plaintiff was required to argue their side, I would hold that she was not obliged to characterize what she did as an attempted repudiation, nor was she obliged to characterize Neuhaus’s demand for a further deposit as coming within clause 61 of the APS. Neither characterization would be accurate.

[38] The plaintiff’s only efforts to terminate the APS were made after the fire. They stopped once she was assured that the fire was not caused or contributed to by Neuhaus. It must be remembered that the completion date under the APS had already been delayed by more than a year before the fire happened and was going to be delayed yet again afterwards. The plaintiff was entitled to take the position she did without being accused of repudiation. I would add that Neuhaus accepted the plaintiff’s position that she was not trying to repudiate the APS in its lawyer’s letter of January 22, 2020.

[39] As for the validity of Neuhaus’s demands under clause 61, I can find nothing in that clause that justifies a demand for proof of down payment. The $200,000 down payment had been made to Neuhaus years before it demanded such proof in 2020. If, by “proof of down payment”, Neuhaus meant disclosure of the source of the down payment, Ms. Ding’s affidavit made it clear that the plaintiff did that by providing copies of bank statements showing that she had plenty of money in the bank. It would have been a mischaracterization for the plaintiff to have argued before the master, as the defendants contend she should have, that clause 61 permitted Neuhaus to demand a further $200,000 deposit once this had been done. Clause 61 permits Neuhaus to demand a further deposit where it has concerns about the purchaser’s ability to make another deposit, not where the purchaser demonstrates that she can easily afford to do so.

[40] For these reasons, I would dismiss the defendants’ arguments about material non-disclosure relating to the plaintiff’s alleged efforts at repudiation and Neuhaus’s allegedly legitimate demand for a further deposit. I turn now to the only argument about non-disclosure that was made before the master: the argument about clause 41, the no registration clause.

The No Registration Clause

[41] The defendants make two related submissions about the no registration clause. First, they submit that, as a matter of law, the existence of a no registration clause is always material and that the master erred in law by concluding otherwise. Second, they submit that failing to bring the clause to the court’s attention automatically requires that the CPL be set aside. I am unable to agree with either submission.

[42] In making their first submission, the defendants rely on the decision of Master Sandler in Cimaroli, in which he wrote (at para. 1):

The cases of Resnick v. Kumar, 25 R.P.R. 43 and Greenbaum v. 619908 Ontario Limited [11 C.P.C. (2d) 26] at pages 42-43 show that clauses in an agreement of purchase and sale that deal with the subject of the purchaser being restricted or prohibited from registering notice of the agreement or a caution or a certificate of pending litigation against title are highly significant and important clauses. Sometimes they will operate so as to eliminate the right of a purchaser to obtain a certificate, as was the case in Resnick and in my own judgment in Bay Towers v St. Andrews Land SCO #19147/87 (May 1, 1987, unreported). Sometimes they will not so operate as in the Greenbaum case. But, nonetheless, they are important clauses.

[43] Based on this excerpt and the decision in Cimaroli, the defendants seem to submit that materiality must be assessed from the point of view of the absent party. With respect, that is incorrect. Materiality is determined by considering what might be important to the judicial official hearing the ex parte motion, not by what might be important to the party affected by the order. Often, these are the same, but not always.

[44] In the context of the duty to make full and fair disclosure, materiality has been given a very broad definition. In this context, a material fact has been defined as meaning any fact that “might have had an impact on the original granting of the order”: Chiu v. Pacific Mall Developments Inc., 1998 CarswellOnt 3035, at para. 36, citing 830356 Ontario Inc. v. 156170 Canada Ltd., 1995 CarswellOnt 4360 (Ont. Ct. (Gen. Div.)), at para. 17. Other courts have defined the duty the same way, but used the word “may”, rather than “might”: Access Self Storage Inc. v. 1321645 Ontario Ltd. et a., 2017 ONSC 6037 (Ont. Div. Ct.), at para. 19; Bell ExpressVu Ltd. Partnership v. Rodgers, 2007 CarswellOnt 7551, at para. 8, citing Pazner v. Ontario (1990), 1990 CanLII 6649 (ON SC), 74 O.R. (2d) 130, 1990 CarswellOnt 766, at para. 16. Regardless of the choice of words used, materiality under r. 39.01(6) extends to facts which could impact the way a court decides a matter.

[45] The breadth of the definition of materiality ensures that the party moving without notice for a CPL under r. 42.01 errs on the side of disclosing too much, rather than too little. However, in the context of a motion to set aside a CPL under r. 42.02, determining materiality moves from being a prospective exercise to being a retrospective one. The question is no longer what could impact the decision, but what could have impacted the decision. The ease with which that question can be answered by the judicial official asked to set the CPL aside depends on the nature of the undisclosed information.

[46] In some cases, whether an undisclosed fact could have affected the decision to issue a CPL will be a more subjective call than in others. Take, for example, the alleged non-disclosure in this case relating to the plaintiff’s efforts to repudiate the APS. The defendants argue that this evidence might have undermined the plaintiff’s claim for specific performance. That is possible. However, whether it could have depended very much on the impact of the fact upon the particular decision maker. It cannot be said that it necessarily should have had an impact.

[47] In this case, the judicial official being asked to set aside the CPL was the same one who had issued it. Had the argument about the plaintiff’s efforts to repudiate been advanced before the master when she was asked to set the CPL aside, her conclusion as to whether that fact could have impacted her decision to issue the CPL would have been owed a great deal of deference on appeal, in my view. A similar view was taken by the appeal judge in 1376273 Ontario Inc. v. Woods Property Development Inc., 2001 CarswellOnt 4412 (Ont. S.C.), at para. 6.

[48] In other cases, whether an undisclosed fact could have affected the decision to issue a CPL is a more objective call. This will be true where the materiality of the undisclosed fact turns on whether it has legal significance, which was precisely the situation with respect to the allegation of material non-disclosure relating to the no registration clause in this case. The issue with respect to that clause was whether it continued to operate where the agreement was terminated by Neuhaus. If it did not, it was not material. It was not a question that turned on the impact of the undisclosed fact on the particular decision maker. In those circumstances, less deference is owed to the master’s determination that the fact was not material. On appeal, the question with respect to this type of missing fact is whether it should have had an impact on the decision maker. In my view, it cannot be said that it should.

[49] It was open to the master in this case to distinguish the cases relied upon by the defendants and to follow the decision in McGrath. As the master correctly held, McGrath and other cases have held that clauses of the type involved in this case only operate to prevent the registration of a CPL following termination of the agreement by the vendor where the clause unambiguously prohibits such registration: Chiu, at para. 35; 2033363 Ontario Ltd. v. Georgetown Estates Corp., 2006 CarswellOnt 1029 (Ont. S.C.), at para. 23. The no registration clause in this case does not do that. It mentions practically every type of caution that could be registered against title except for a CPL. Therefore, it cannot be said that the master erred in law, as the defendants submit.

[50] Having found that the master committed no legal error in reaching the conclusion she did, I need not deal with the defendants’ second submission that non-disclosure of a material fact always requires that the CPL be set aside. However, in case I am wrong on this issue, I will deal briefly with it.

[51] Rule 39.01(6) does not require that an order obtained in the absence of full and fair disclosure be set aside. It provides only that it may be set aside solely on that basis. A court still has the discretion to consider whether the CPL should be continued or discharged under s. 103(6) of the Courts of Justice Act, R.S.O. 1990, c. C.43 even where there has been material non-disclosure: Chiu, at para. 38.

[52] If I am wrong in my conclusion that the law did not require the plaintiff to treat the no registration clause as being material, I would still not set the CPL aside. In Boal v. International Capital Management Inc., 2018 ONSC 2275, Perell J. summarized the factors to be considered when a court is being asked to set aside an ex parte order based on material non-disclosure, at para. 62:

The court has some discretion and may continue the interlocutory injunction if the undisclosed facts were not material or the non-disclosure was not intentional. In exercising its discretion to continue the injunction in circumstances of non-disclosure, the court should consider: (a) the practical realities that there is often urgency or an emergency that explains why the motion is made without notice; (b) whether facts were intentionally suppressed or whether simple carelessness or ignorance was the cause of the non-disclosure; (c) the pervasiveness of the non-disclosure; (d) the difficulty of determining what is a material or an immaterial non-disclosure; and (e) the significance to the outcome of the motion of the matters that were not disclosed to the court.

[53] In this case, I would exercise my discretion to continue the CPL based on the difficulty of determining whether the no registration clause was material given the line of cases referred to by the master.

[54] For these reasons, this ground of appeal fails.

The Dhunna Factors

[55] The plaintiff’s onus on the substantive issues in the ex parte motion was not as heavy as the onus to make full and fair disclosure. To obtain a CPL, the plaintiff needed only to show that she had “an interest” in the land in question: Courts of Justice Act, R.S.O. 1990, c. C.43, (the “CJA”), s. 103(1). The evidence of the APS was enough to do that, in my opinion.

[56] The circumstances in which a court may discharge a CPL are set out in s. 103(6) of the CJA, which provides that a CPL may be discharged:

(a) where the party at whose instance it was issued,

(i) claims a sum of money in place of or as an alternative to the interest in the land claimed,

(ii) does not have a reasonable claim to the interest in the land claimed, or

(iii) does not prosecute the proceeding with reasonable diligence;

(b) where the interests of the party at whose instance it was issued can be adequately protected by another form of security; or

(c) on any other ground that is considered just,

and the court may, in making the order, impose such terms as to the giving of security or otherwise as the court considers just.

[57] A non-exhaustive list of factors to be considered by a court in exercising its discretion under s. 103(6) were set out by Master Donkin in Dhunna, and have been considered by many courts since:

(1) whether the plaintiff is a shell corporation;

(2) whether the land is unique;

(3) the intent of the parties in acquiring the land;

(4) whether there is an alternative claim for damages;

(5) the ease or difficulty of calculating damages;

(6) whether damages would be a satisfactory remedy;

(7) the presence or absence of another willing purchaser; and

(8) the harm done to the plaintiff if the certificate is allowed to remain, or to the plaintiff if the certificate is removed, with or without security.

[58] The defendants submit that the master erred in law by misapprehending the evidence as it related to the second, fifth, and eighth factors listed above. They submit that the evidence failed to show that the property was unique, that it was easy to calculate damages should the plaintiff succeed, and that the balance of convenience favoured the defendants. In my view, there was no such error.

[59] The defendants argue that the property in question is nothing but a cookie-cutter type residential property of the type referred to by Sopinka J. in Semelhago v. Paramadevan, 1996 CanLII 209 (SCC), [1996] 2 S.C.R. 415, at para. 20:

Residential, business and industrial properties are all mass produced much in the same way as other consumer products. If a deal falls through for one property, another is frequently, though not always, readily available.

[60] However, as Lax J. recognized in John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd. (2001), 2001 CanLII 28012 (ON SC), 56 O.R. (3d) 341 (Ont. S.C.J.), affirmed (2003) 2003 CanLII 52131 (ON CA), 63 O.R. (3d) 304 (Ont. C.A.), there is both a subjective and an objective aspect to uniqueness. She wrote (at paras. 59 - 60):

While it is difficult to be precise about this, it strikes me that normally, the subjective aspect will be less significant in commercial transactions and more significant in residential purchases, unless the motivation in the latter case is principally to earn profit. In terms of the subjective aspect, the court should examine this from the point of view of the plaintiff at the time of contracting. In some cases, there may be a single feature of the property that is significant, but where there are a number of factors, the property should be viewed as a whole. The court will determine objectively whether the plaintiff has demonstrated that the property has characteristics that make an award of damages inadequate for that particular plaintiff. Obviously, investment properties are candidates for damages and not specific performance.

It is important to keep in mind that uniqueness does not mean singularity. It means that the property has a quality (or qualities) that makes it especially suitable for the proposed use that cannot be reasonably duplicated elsewhere. To put this another way, the plaintiff must show that the property has distinctive features that make an award of damages inadequate. The plaintiff need not show that the property is incomparable. [Citations omitted.]

[61] There was ample evidence before the master to support her finding of uniqueness in this case. This included the evidence that the plaintiff and her daughter had looked at 20-30 different properties before agreeing to buy this one, that there is a large Chinese community in the area, and that the plaintiff had a number of friends living very close to the property. That evidence was enough, in my opinion, to demonstrate uniqueness.

[62] The ease with which damages might be calculated had no bearing on the master’s decision because, as she pointed out, the plaintiff’s only claim was for specific performance.

[63] Finally, the evidence before the master did not support the defendants’ claim that the balance of convenience was in favour of discharging the CPL. The defendants contend that the evidence showed that financing for the development would be in jeopardy if the CPL was allowed to remain on title. However, the master found that the defendants had failed to provide any documents supporting this position, as they had been asked to do during the cross-examination of Mr. Yusuf on his affidavit.

[64] I can see no misapprehension of the evidence on the part of the master. Therefore, this ground of appeal must also fail.

CONCLUSION

[65] The master committed no error in law by concluding that the no registration clause was not material in the circumstances of this case. Her conclusion that the clause was ambiguous is supported by the evidence and it was open to her to follow the McGrath decision in concluding that only unambiguous such clauses survive termination by the vendor.

[66] Nor did the master commit a palpable and overriding factual error in her assessment of the Dhunna factors. Her decision in favour of the plaintiff was amply supported by the evidence.

COSTS

[67] The plaintiff was successful on the motion. I see no reason why she should not be awarded her costs.

[68] During argument, I asked counsel what their clients would seek for costs in the event of success. Counsel for the defendants answered that her clients would seek $30,000 by way of substantial indemnity costs or, in the alternative, $20,000 by way of partial indemnity costs. Counsel for the plaintiff answered that he would seek $18,000 by way of partial indemnity costs. Given the range of costs that the defendants would have sought if successful, I find $18,000 all-inclusive to be reasonable and order that the defendants pay this amount forthwith.

M.G. Ellies R.S.J.

Date: February 12, 2021

COURT FILE NO.: CV-20-00641777-0000

DATE: 2021/02/12

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

SHUANGHUAI GONG

Plaintiff

– and –

NEUHAUS MANAGEMENT LTD. and REGENT STREET DEVELOPMENTS LTD.

Defendant

REASONS FOR DECISION

M.G. Ellies R.S.J.

Released:February 12, 2021