Court File and Parties

OSHAWA COURT FILE NO.: CV-21-692

DATE: 20210806

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Stephanie Hobbs-Godina and Roger Godina, Applicants

AND:

Gerald Willard Layng and Mary Lou Imeson, Respondents

BEFORE: The Honourable Mr. Justice R.E. Charney

COUNSEL: Charles Morison, Counsel for the Applicants Michael Hunter, Counsel for the Respondent, Gerald Willard Layng Bradley J. Zochodne, Counsel for the Respondent, Mary Lou Imeson

HEARD: August 5, 2021

ENDORSEMENT

[1] The Applicants bring this Application for a declaration that they are each 25% equitable owners of a property located on Stevenson Road in Oshawa, Ontario.

[2] The Applicants are husband and wife. The Applicant Stephanie Hobbs-Godina is the daughter of the Respondent Mary Lou Imeson. Mary Lou Imeson is the former (until 2010) common law spouse of the Respondent Gerald Willard Layng.

[3] The Applicants allege that in 1999 they made an oral agreement with the Respondents to collectively purchase a new house where all four would reside. The Respondents would pay the deposit, but the parties would divide the mortgage payments. When the house was sold, the Respondents would be repaid their deposit and the profits would be equally shared among the four parties.

[4] The property was purchased in 2000. Only the Respondents names were included on the deed and mortgage.

[5] The Applicants rely on the affidavit jointly sworn by the Applicants in support of their position.

[6] The Respondent, Gerald Willard Layng, has sworn an affidavit denying the existence of any such oral agreement with the Applicants. He takes the position that he and his former common law spouse, Ms. Imeson, were the sole owners of the property. The Applicants lived in the home as tenants, and any payments made by the Applicants were rental payments, not contribution to mortgage payments.

[7] Neither affidavit was cross-examined on.

[8] This Application was scheduled for August 5, 2021. At the commencement of the hearing the parties jointly requested an adjournment to permit cross-examination on the affidavits before the Application is heard.

[9] At the outset, I inquired whether the parties agreed that this matter should proceed by way of application rather than by action. Given the fundamental factual dispute between the parties – the existence of an alleged oral agreement – I questioned whether the court hearing the application will be able to resolve this dispute on the basis of a written record comprised of affidavits and transcripts of cross-examinations on the affidavits.

[10] The Applicants took the position that this Application was expressly permitted by Rule 14.05(3)(e), which permits a proceeding to be commenced by an application where “the relief claimed is a declaration of an interest in or charge on land, including the nature and extent of the interest or charge…”. The Applicants seeks a declaration that they are each 25% equitable owners of the property at issue.

[11] The Respondents indicated that they agreed that this matter should proceed by way of application since the parties have limited financial resources and did not want the expense of a full trial if this could be avoided.

[12] The parties note that the property at issue has already been the subject of an Application between the same parties: Layng v. Imeson, Hobbs-Godina and Godina, 2021 ONSC 2265. In that Application, which was heard on March, 25, 2021, Mr. Layng was the Applicant. He brought an Application for an Order for the sale of the property pursuant to s. 3 of the Partition Act, R.S.O. 1990, c. P.4. Healy J. held that, as a registered owner, Mr. Layng was entitled to an order to sell the property, and, at para. 20, declined to deal with the respondents’ argument that there was an oral agreement between the parties, and, at para. 21, declined to convert the application to an action. The Court ordered that the property be sold and the monies paid into court.

[13] Returning to the present Application, I am not certain that Rule 14.05(3)(e) is intended to cover situations where the very existence of the agreement is at issue. As a general proposition, applications are better suited to situations where the dispute involves the interpretation of a written contract or other instrument, and the material facts are not in dispute. In circumstances where there are material facts in dispute, one or the other party may prefer the procedural safeguards (exchange of pleadings, affidavit of documents, discovery) associated with an action.

[14] That said, proceeding by way of application is functionally identical to proceeding by way of motion for summary judgment under Rule 20. In either case the court may be asked to resolve factual disputes on the basis of affidavit evidence and cross-examination on the affidavits. In my view, if all parties to the proceeding are content to proceed by way of application, there is no reason, at this stage of the proceedings, for the court to convert the application to an action. Consistent with Rule 1.04(1) of the Rules of Civil Procedure, parties should be permitted to proceed on the basis of the “most expeditious and least expensive” process available, provided it is on consent and neither party is prejudiced by missing the additional procedural steps included in an action: Sivasubramaniam v. Mohammad, 2018 ONSC 3073, at paras. 42-47, aff’d. 2019 ONCA 242. See also: Lucas v. 1858793 Ontario Inc. (Howard Park), 2021 ONCA 52, at paras. 8-14.

[15] There are certain procedural advantages to proceeding by way of application. For example, although the respondent does not have the benefit of pleadings and discovery, all of the Applicant’s evidence must be disclosed in the Application Record before the application is argued in court. Depending on the nature of the case, this may be a more efficient way to proceed and nothing is lost by skipping the discovery stage of an action.

[16] As in a motion for summary judgment, the court hearing the application must be satisfied that it can resolve factual disputes fairly on the basis of the record provided: Hryniak v. Mauldin, 2014 SCC 7, at para. 50; Eastwood Square Kitchener Inc. v. Value Village Stores, Inc., 2017 ONSC 832, at paras. 3-6 (and cases cited therein).

[17] To this end, Rule 38.10 provides:

38.10 (1) On the hearing of an application the presiding judge may,

(a) grant the relief sought or dismiss or adjourn the application, in whole or in part and with or without terms; or

(b) order that the whole application or any issue proceed to trial and give such directions as are just.

(2) Where a trial of the whole application is directed, the proceeding shall thereafter be treated as an action, subject to the directions in the order directing the trial.

(3) Where a trial of an issue in the application is directed, the order directing the trial may provide that the proceeding be treated as an action in respect of the issue to be tried, subject to any directions in the order, and shall provide that the application be adjourned to be disposed of by the trial judge.

[18] In Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, at para. 44, the Ontario Court of Appeal cautioned the trial courts about the care that must be taken in assessing credibility on the basis of a written record:

Evidence by affidavit, prepared by a party’s legal counsel, which may include voluminous exhibits, can obscure the affiant’s authentic voice. This makes the motion judge’s task of assessing credibility and reliability especially difficult in a summary judgment and mini-trial context. Great care must be taken by the motion judge to ensure that decontextualized affidavit and transcript evidence does not become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial where the trial judge sees and hears it all.

[19] It may also be that some legal issues in this Application can be resolved without the need to make factual findings: see, for example, s. 4 of the Statute of Frauds, R.S.O. 1990, c. 19, which provides that there shall be “no action… brought… to charge any person upon any contract or sale of lands… or any interest in or concerning them, unless the agreement upon which the action is brought, or some memorandum or note thereof is in writing and signed by the party to be charged therewith”. Whether the court hearing this Application will be able to make the necessary factual findings to apply the relevant legal principles and resolve the dispute is a matter best left to the judge hearing the Application.

[20] The parties have advised me that they will be able to agree on a schedule for filing any additional affidavits, conducting cross-examinations on affidavits and filing factums.

[21] Accordingly, this Application is adjourned to permit the parties to complete the Application Record. The parties may contact the Trial Coordinator’s office to schedule a 2 hour Application when the Application Records are complete. I am not seized.

Justice R.E. Charney

Date: August 6, 2021