OSHAWA COURT FILE NO.: CV-21-1217
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
ANDY PERSAUD
Plaintiff
– and –
SHARMILA RAMAWAD, KALICHARAN RAMAWAD, DRUSILLA BAKSH, NADIM SAYED and FOROZAN SAYED
Defendants
Obaidul Hoque, Taheratul Haque and Zaheed Moral for the Plaintiff
John Annen for the Defendants, Ramawad
Jasdeep Bal for the Added Defendants, Sayed
Drusilla Baksh in person
HEARD: August 26 and 30 and September 2 and 7, 2021 by Zoom Videoconference
Ruling on motions involving the sale of
1375 ferncliff circle, pickering
C. boswell j.
1Ferncliff Circle is a quiet residential street located near the intersection of Liverpool Road and Finch Avenue in Pickering, Ontario. The peaceful appearance of the neighbourhood offers no clues about the turmoil surrounding the ownership and occupation of number 1375 (the “Property”).
2The current registered owners of the Property are the defendants, Kalicharan and Sharmila Ramawad. The plaintiff, Andy Persaud, and the defendant, Drusilla Baksh both assert a beneficial ownership interest in it. The Ramawads acknowledge those interests.
3On June 10, 2021 the Ramawads sold the Property to the defendants, Nadim and Forozan Sayed, with a scheduled closing date of August 31, 2021.
4On July 30, 2021 Mr. Persaud obtained leave to issue and register a certificate of pending litigation (“CPL”) against the Property. On August 31, 2021, on a motion brought by the Sayeds, I made an order discharging the CPL. I undertook to provide written reasons for my decision.
5Despite the discharge of the CPL, the sale of the Property from the Ramawads to the Sayeds did not close as scheduled. The Sayeds tendered on the Ramawads. Amongst other things, they transferred the adjusted purchase price of roughly $1.13 million to the trust account of the Ramawads’ solicitor. When the transaction did not close, the Sayeds demanded their money back. The Ramawads refused to return it. On September 8, 2021 I ordered the Ramawads’ counsel to immediately return the purchase proceeds to the Sayeds’ counsel. Again, I undertook to provide written reasons for my decision.
6The following are my reasons for the orders I made on August 31 and September 8, 2021.
HISTORY OF THE PROCEEDINGS
The Acquisition of the Property
7The Property is a single-family residence located at the circular end of Ferncliff Circle. It is occupied by Ms. Baksh, her mother and her two adult daughters. They have lived there since December 2015.
8Ms. Baksh is not the registered owner of the Property. But she is a beneficial owner pursuant to an undated Declaration of Trust between her and the Ramawads.
9Ms. Baksh and Mr. Persaud were once common law spouses. When they separated, Mr. Persaud agreed to purchase a house for Ms. Baksh and her daughters to live in. He ran into difficulty, however, when it became apparent that he was not able to qualify for the financing he needed to acquire a property.
10Mr. Persuad had a personal relationship with the Ramawads. They agreed to assist him by purchasing the property and taking out the necessary mortgage to do so. Mr. Persaud agreed to be wholly responsible for the mortgage and all other carrying costs.
The Corkery J. Order
11The Declaration of Trust between the Ramawads and Ms. Baksh includes a provision that if there are disagreements between the parties that cannot be resolved, the Property will be listed for sale and sold at fair market value.
12Disagreements did arise between the parties and they led to an application being commenced by the Ramawads in 2018. The application was resolved by way of a consent order, signed by Corkery J., on June 15, 2018. The order provided that the Property was to be listed for sale on September 1, 2018. The Ramawads were given leave to obtain a writ of possession, provided it was not enforceable prior to October 15, 2018.
The Sale of the Property
13For reasons best known to the Ramawads, they did not take any steps to list the Property for sale in 2018 or even 2019. In August 2020, they gave notice that they wanted to terminate their trusteeship and, to that end, intended to sell the Property. On December 22, 2020 they took out the writ of possession provided for in the Corkery J. order.
14Fruitless negotiations ensued. The property was listed for sale on June 3, 2021 and sold to the Sayeds on June 10, 2021. The scheduled closing date was August 31, 2021.
15The Agreement of Purchase and Sale was amended on June 13, 2021 to include a provision that the house was to be vacant on the closing date.
The Certificate of Pending Litigation
16Mr. Persaud commenced this action on July 22, 2021. He seeks relief including a declaration that the trust agreement between him and the Ramawads is a binding agreement and remains in full force and effect; leave to issue a CPL; and an order vesting title to the Property in him.
17On July 30, 2021 Mr. Persaud moved, on two days’ notice, for a CPL and an order staying enforcement of the Ramawads’ writ of possession. Verner J. granted temporary orders for the relief sought and provided that both the CPL and the stay of the enforcement of the writ would expire September 15, 2021. She noted that the intention of the parties was to return to court before then “to properly litigate whether the CPL should stay in place and whether the writ of possession should continue to be removed.”
The Motion to Discharge the CPL
18The Sayeds moved, on August 26, 2021, for an order adding them as party defendants, together with an order discharging the CPL and lifting the stay of enforcement of the writ of possession. The motion was short-served. I adjourned it to August 30, 2021 so that all affected parties could file materials. Prior to the return date on August 30, 2021 I received affidavit evidence from Mr. Persaud, Ms. Baksh and the Ramawads.
19I released a bottom-line decision to the parties on the morning of August 31, 2021. It provided that the Sayeds would be added as party defendants on an unopposed basis. It further provided that Mr. Persaud’s CPL was to be discharged, as was a Caution that he registered on title to the Property on July 21, 2021. Moreover, the stay on the Ramawads’ writ of possession was to be lifted.
The Failed Closing
20The Sayeds were in a position to close the purchase transaction on August 31, 2021. They tendered all of their closing documents on Mr. Annen, who was acting as the Ramawads’ real estate solicitor on the transaction and they transferred the closing funds of roughly $1.13 million to Mr. Annen’s trust account.
21Title to the Property never passed, however, on August 31, 2021. The Ramawads were unable to deliver vacant possession of the Property to the Sayeds because Ms. Baksh continues to occupy the Property. Furthermore, Mr. Annen failed to provide discharge statements for existing encumbrances and his personal undertaking to discharge any such encumbrances from the purchase proceeds.
22Notwithstanding the fact that the purchase transaction appears not to have been successfully concluded, Mr. Annen refused to return the purchase proceeds to the Sayeds’ real estate solicitor. The Ramawads’ position is that they are entitled to keep the funds because they did everything they needed to do to complete the transaction. With respect to their failure to provide vacant possession on closing, they take the position that the Sayeds, by their conduct, impliedly waived that condition.
The Motion for a Return of the Purchase Proceeds
23On September 2, 2021 the Sayeds moved on short notice for an urgent order compelling Mr. Annen to return the purchase proceeds to them. That motion was set before me and adjourned to September 8, 2021 to allow the Ramawads sufficient time to file responding materials. On September 8, 2021, after hearing the parties’ submissions, I gave a bottom-line order, with written reasons to follow, directing Mr. Annen to return the purchase proceeds by 5:00 p.m. that same day.
THE LIVE ISSUES
24The positions taken by the parties on the motions raise the following issues for determination:
(i) Should the temporary CPL be discharged on account of a failure to make full and frank disclosure or for any other reason in law or equity?
(ii) Should the Ramawads be permitted to enforce their writ of possession against the Property?
(iii) Was the sale of the Property completed and, if not, should Mr. Annen be compelled to return the purchase proceeds to the Sayeds?
DISCUSSION
25There are a number of odd features to the evidentiary record that tend to hinder any attempt to sort out the true state of affairs and which render decision-making more difficult. Before I tackle the issues raised on the motions, I will take a moment to identify some of these oddities.
Oddities
The Declaration of Trust
26I begin with the Declaration of Trust. It is undated. It’s draftsperson undisclosed. The first numbered paragraph appears to commence partway through a sentence. To wit:
- hold in trust as the registered owner of those lands known as Lot 3, Plan 40M-1600, Parcel 3-1, Section 40M-1600 Pickering, Regional Municipality of Durham and Municipally known as 1375 Ferncliff Circle, Pickering, Ontario L1X 2N9.
27The Declaration of Trust is between the Ramawads and Ms. Baksh. There is no mention of Mr. Persaud anywhere in the document. Nevertheless, Mr. Persaud conducts himself as though he is a party to it. To wit:
(a) He filed a caution against title to the Property on July 21, 2021. In support of the caution he swore a declaration which included the following statement, at para. 2:
- There exists a firm and binding Trust Agreement for the subject-property, in which I am the Beneficiary of the property and Ramawad, Sharmila and Ramawad, Kalicharan are the Trustee. A copy of the Trust Agreement is attached to this declaration as Schedule A.
The document attached as Schedule A to Mr. Persaud’s declaration was the Declaration of Trust between the Ramawads and Ms. Baksh. His declaration was demonstrably false.
(b) On July 27, 2021 Mr. Persuad swore an affidavit in support of his motion for leave to issue a CPL. At para. 3 of his affidavit he deposed that the Ramawads have, at all material times, held title to the Property in trust for his benefit. In the next para. he referred to Ms. Baksh as “the occupant of the Property”. Subsequently, at para. 8, he made the following demonstrably false statement:
- The arrangement was that the Ramawads would take legal title of the Property and hold it in trust for myself and Ms. Baksh. Based on this agreement, a Trust Agreement was executed by the parties.
28Notwithstanding the clear wording of the Declaration of Trust – and the absence of any reference to Mr. Persaud in it – the Ramawads undoubtedly take the position that they hold title to the Property in trust for both Mr. Persaud and Ms. Baksh. For instance, in their application commenced in April 2018 to determine the trust and sell the Property, the Ramawads named both Mr. Persaud and Ms. Baksh as respondents. They said, by way of their grounds for the application, that they entered into an agreement with the respondents that contained terms of trust for the Property.
29Ms. Baksh, on the other hand, appears to take the position that she is the sole beneficial owner of the Property. In response to the Ramawads’ application in April 2018, she filed an affidavit sworn June 14, 2018. At para. 1 of that affidavit she described herself as “the sole beneficiary of a certain Declaration of Trust executed between the applicants and myself…” She repeated that position more recently in her affidavit sworn August 30, 2021. She deposed, again at para. 1, “I am the defendant and beneficial owner of 1375 Ferncliff Circle, Pickering…as evidenced from the original Declaration of Trust.”
Additional Financial Dealings Between the Parties
30Mr. Persaud and the Ramawads appear to have financial dealings with one another that go well beyond the trust arrangement with respect to the Property. There are a number of references to monies owing one way or the other as a result of these dealings. It is, on the current record, impossible to determine how these additional dealings impact on the Property and the Ramawads’ decision to sell it.
31Mr. Persaud deposed in his affidavit sworn August 27, 2021 that he was attempting to secure a mortgage in September 2020 to take over title to the Property. He said he was unable to do so because Mr. Ramawad asked for his assistance in paying off a small business loan of $364,000 owed by Mr. Ramawad to the Royal Bank of Canada. Mr. Persaud said he agreed to include this amount in the mortgage financing he was seeking. His agreement to do so made it difficult to get financing and impeded his ability to take title to the Property.
32The Property was acquired by the Ramawads on December 7, 2015 for $725,000. A mortgage was registered against title in the amount of $600,000. The balance was apparently funded by the Ramawads’ line of credit. I understand that Mr. Persaud has been making the monthly mortgage payments and that he has paid down or paid off the amounts borrowed on the Ramawads’ credit line.
33I infer from Mr. Persaud’s August 27, 2021 affidavit that he expected that he would be able to take title from the Ramawads provided he could obtain financing to pay out the balance owing on the mortgage to the Royal Bank.
34Subsequent to September 2020, however, Mr. Persaud began making offers to the Ramawads that involved much more than paying out the Royal Bank mortgage.
35On January 13, 2021, for instance, Mr. Persaud offered to pay the Ramawads $130,000 by February 26, 2021, another $130,000 by May 28, 2021, assume the balance of the mortgage to the Royal Bank and to pay $250,000 to the Ramawads as a “trustee fee”.
36Subsequently, on February 5, 2021, Mr. Persaud revised his proposal. He offered to pay the Ramawads $30,000 by February 26, 2021, $130,000 by May 28, 2021 and $350,000 by June 30, 2021. He would also assume the balance of the mortgage to the Royal Bank.
37Neither of the foregoing offers appears to have been accepted and certainly neither came to fruition. Viewed in the context of the evidentiary record presently before the court, neither offer makes any sense.
38In the meantime, however, the Ramawads placed a further $400,000 mortgage on title to the Property on January 18, 2021. What exactly that mortgage was for and whether it was placed with the knowledge and consent of the beneficial owner(s) are live questions.
39To some extent, some of the vague and confusing references made by Mr. Persaud to his various financial dealings with Mr. Ramawad are clarified by an agreement dated March 22, 2021 filed as Exhibit “C” to Mr. Ramawad’s affidavit of August 27, 2021. The agreement is between Mr. Persaud and his company, Liberty Financial Group Inc. (“LFG”) and Mr. Ramawad. It reflects that the Small Business Loan acquired by Mr. Ramawad from the Royal Bank, in the amount of $350,000, was in fact a loan taken out for the benefit of LFG. It also appears that Mr. Ramawad provided additional loans to LFG.
40The March 22, 2021 agreement provides that Mr. Ramawad wants his money back and he wants out of his role as a trustee over the Property. Mr. Persaud therefore agreed to find a buyer for the Property by May 15, 2021. Mr. Persaud deposed that by “buyer” he meant another person to step into the Ramawads’ shoes as trustee. That is certainly one possibility.
The Lease
41On November 28, 2020, at a time when Mr. Persaud said he was attempting to negotiate the transfer of title to him from the Ramawads, he and Ms. Baksh signed a tenancy agreement with the Ramawads in relation to the Property. The tenancy agreement is for one year – from December 1, 2020 to December 1, 2021. It calls for the payment of $3,000 per month in rent.
42No explanation is offered by the Ramawads as to why the beneficial owner(s) of the Property would require a lease to occupy it, or why they would be paying $3,000 a month in rent for a property they own.
43It appears, in fact, that no rent was ever paid, save perhaps for $3,000 in December 2020. Mr. Persaud attached a series of cheques paid by him to the Ramawads between February 2020 and May 2021 as an exhibit to his August 27, 2021 Affidavit. One is a cheque dated December 8, 2020 for $3,000. The “re line” on the front of the cheque says, “Drusilla Mortgage”. No explanation was offered for what that means. In any event, in a ham-fisted attempt to get vacant possession of the Property for the purpose of selling it, Mr. Ramawad served a notice to end the tenancy for non-payment of rent. The notice is dated May 3, 2021 and it indicates that there were, at that time, $15,000 in rental arrears. Obviously, no attempt was being made to pay the purported “rent”.
44Even more odd is the fact that less than a month after executing the lease, the Ramawads finally got around to taking out the writ of possession that they were granted leave to obtain by the Corkery J. order. The writ is dated December 22, 2020.
45Mr. Persaud, in his affidavit sworn August 27, 2021, referred to the lease as “a sham”. He said the allegation that he and Ms. Baksh became tenants is not true. According to him, the purported lease was put together by the Ramawads for the sole purpose of submitting it to a financial institution as support for a loan they were applying for.
46Ms. Baksh did not refer to the purported lease at all in her affidavit filed in opposition to the motion to discharge the CPL and lift the stay on the writ of possession.
47I turn now to an analysis of the live issues raised by the motions.
Issue One: The Discharge of the CPL
Overview
48The Ramawads attempted, in June 2021, to obtain an expedited hearing date from the Landlord and Tenant Board regarding their purported termination of the purported tenancy with Mr. Persaud and Ms. Baksh. That attempt failed. They then attempted to enforce their writ of possession and arranged for the Sheriff to attend the Property to evict Ms. Baksh on August 4, 2021. Those efforts were foiled by Verner J.’s stay of the writ.
49Following the Verner J. Order, the Ramawads appear to have fallen into a sort of paralysis. They did not tell the Sayeds about the motion brought by Mr. Persaud for a CPL. They did not inform the Sayeds of the dispute regarding ownership of the Property until August 17, 2021. Though the Verner J. Order was temporary in nature, the Ramawads did nothing to bring the matter back to court on a more fulsome evidentiary record to discharge the CPL and lift the stay of enforcement of the writ of possession. In short, they appear to have run out of ideas as to how they might deliver up vacant possession to the Sayeds on August 31, 2021.
50The Sayeds, on the other hand, were acutely concerned about the existence of the CPL and of the fact that vacant possession of the Property was in jeopardy. Nadim Sayed and his partner had given up their leased home in Ottawa and arranged for movers on the expectation that they would be moving into the Property on August 31, 2021. Forozan Sayed and her husband had sold their home in Kingston, closing August 31, 2021, on the expectation that they too would be moving into the Property on August 31, 2021. The purchasers had nowhere else to go in the event their purchase of the Property failed to close.
51The Sayeds moved to discharge the CPL and lift the stay of enforcement of the Ramawads’ writ. I heard their motion on August 30, 2021. They advanced two positions as to why the CPL should be set aside. First, because there was a lack of full and frank disclosure when Mr. Persaud moved, essentially ex parte, for the order before Verner J. Second, because, in any event, the equities favour the discharge.
52The Ramawads supported the Sayeds’ position with respect to discharging the CPL.
53Mr. Persaud and Ms. Baksh opposed the motion for obvious reasons. Ms. Baksh filed an affidavit in which she essentially pleaded with the court to permit her to remain in the Property.
54Mr. Persaud took the position that if there were any shortcomings in the disclosure he made on the motion before Verner J., they were attenuated by the attendance at the motion by Mr. Annen, who made submissions on behalf of the Ramawads. Mr. Persaud urged the court to conclude, in any event, that the equities favour him and Ms. Baksh. He said he has mortgage financing in place and he will be able to acquire the legal title from the Ramawads if only given the reasonable opportunity to do so.
55In my view, the CPL cannot stand. Not only was there a failure on Mr. Persaud’s part to make full and frank disclosure on the motion before Verner J., but the equities ultimately favour the discharge of the certificate.
The Failure to Make Full and Frank Disclosure
56Canada is a liberal democracy, one which observes and is governed by the rule of law. Our justice system aspires to get at the truth. We have settled on the adversarial model of litigation as the one best suited to achieve that aspiration.
57The adversarial model is based on the premise that the truth is most likely to be revealed when self-interested opponents are left to define the issues to be determined and to zealously pursue their interests in relation to those issues. In the adversarial system, each litigant is afforded an opportunity to be heard – to present his or her own case and to vigorously challenge his or her opponents, principally through cross-examination.
58The adversarial model breaks down, however, when proceedings are heard on an ex parte basis. In those circumstances, the court typically hears the unchallenged position of only one of the parties. The safeguard of mutual competitive advocacy disappears. See Moses v. Metro Hardware and Maintenance Inc., 2020 ONSC 6684. In the result, the likelihood of the court discovering the truth of the matter decreases. The odds of the court getting it wrong or working an injustice correspondingly increase. See United States v. Friedland, [1996] O.J. No. 4399 (Gen. Div.), at para. 26.
59It is for the foregoing reasons, as well as the appearance of justice and fairness, that ex parte proceedings are generally discouraged. There are instances, however, where the rules of the court expressly permit proceedings to be brought on an ex parte basis. One such instance is where a party seeks a CPL. See r. 42.01(3) of the Rules of Civil Procedure, R.R.O. 1190, Reg. 194.
60To attenuate concerns about justice and fairness associated with ex parte proceedings, our law imposes a duty on litigants proceeding on a without notice basis to be fair and frank in the materials they file with the court. A party proceeding ex parte must disclose to the court not only the evidence that tends to favour its own case, but also the evidence that might reasonably be expected to be raised by the opposing side.
61Justice Sharpe’s decision in United States v. Friedland, as above, is often cited when issues of material non-disclosure are raised. He described the duty on a party moving without notice in the following terms, at paras. 27-28:
[…] the law imposes an exceptional duty on the party who seeks ex parte relief. That party is not entitled to present only its side of the case in the best possible light, as it would if the other side were present. Rather, it is incumbent on the moving party to make a balanced presentation of the facts in law. The moving party must state its own case fairly and must inform the Court of any points of fact or law known to it which favour the other side. The duty of full and frank disclosure is required to mitigate the obvious risk of injustice inherent in any situation where a Judge is asked to grant an order without hearing from the other side.
If the party seeking ex parte relief fails to abide by this duty to make full and frank disclosure by omitting or misrepresenting material facts, the opposite party is entitled to have the injunction set aside. That is the price the Plaintiff must pay for failure to live up to the duty imposed by the law. Were it otherwise, the duty would be empty and the law would be powerless to protect the absent party.
62The obligation to make full and frank disclosure is not just a common law duty. It is also expressed in Rule 39.01(6) of the Rules of Civil Procedure, which provides as follows:
Where a motion or application is made without notice, the moving party or applicant shall make full and fair disclosure of all material facts, and failure to do so is in itself sufficient grounds for setting aside any order obtained on the motion or application.
63To be clear, the phrase “all material facts” means all those facts that might reasonably affect the outcome. See Fox v. Fox, 2014 ONSC 1135 (Div. Ct.), at para. 12. The test is an objective one.
64Mr. Persaud technically moved for his CPL on notice. But his materials were served at some point during the day on July 28, 2021, giving the Ramawads less than 2 days to respond. They did not have sufficient time to file any responding materials. The Sayeds were not served at all.
65In my view, the motion before Verner J. was functionally equivalent to an ex parte proceeding. In the result, I find that Mr. Persaud had a duty to be frank with the court and to provide full disclosure of all of the material facts known to him at the time the motion was put before Verner J. And I find that he failed miserably.
66In support of his motion for a CPL, Mr. Persaud filed his own four-page affidavit. In it he described himself and Ms. Baksh as the beneficial owners of the Property. He said that a Trust Agreement was executed “by the parties”. He knew at the time he made that statement that it was demonstrably false. He was never a party to the Trust Agreement. He attached the Trust Declaration at Exhibit “B” to his affidavit but his doing so gives me little comfort. He still misled the court in the body of his affidavit. I cannot be certain that Justice Verner’s attention was sufficiently drawn to the instrument to overcome the misdirection.
67Remarkably, Mr. Persaud failed to mention in his affidavit the proceedings before Corkery J. in June 2018 or the order that resulted from those proceedings.
68At para. 13 of his affidavit he deposed that the “Ramawads threatened to list the Property for sale on or around September 1, 2018.” This statement is grossly misleading. The Ramawads did not just threaten to list the Property for sale. As he well knew, the Ramawads obtained an order that the Property would be listed for sale on September 1, 2018. Moreover, they obtained leave to issue a writ of possession on or after October 15, 2018. The failure to mention the June 15, 2018 order was not just a failure to make full and frank disclosure. I find that Mr. Persaud actively misled the court.
69Mr. Persaud also failed to mention in the materials filed before Verner J. that he had entered an agreement with Mr. Ramawad on March 22, 2021 which required him to find another buyer for the property and have the sale completed by May 15, 2021.
70Finally, Mr. Persaud failed to advise Verner J. that the Property had been sold to a third party. This is a factor that she would undoubtedly have been very interested in.
71Mr. Persaud says he was not aware that there was a third-party purchaser until August 23, 2021. I do not accept that evidence. A “For Sale” sign was placed on the front lawn of the Property in early June 2021. The agreement of purchase and sale with the Sayeds was entered into on June 10, 2021. A “SOLD” sign was affixed to the “For Sale” sign shortly thereafter. Nadim Sayed swore an affidavit on August 30, 2021 which attached, as Exhibit “A”, a photograph of the front of the Property taken June 22, 2021 which clearly shows the SOLD sign.
72While it is possible that no one, including Ms. Baksh, mentioned to Mr. Persaud that the Property had been sold at any point between June 22, 2021 and July 30, 2021, I find that prospect to be so highly unlikely as to not be worthy of serious consideration. He may not have known the identity of the third-party purchaser until August 23, 2021, but I find that Mr. Persaud must have known by the time of the motion before Verner J. that there was a third-party purchaser. His interests and those of Ms. Baksh align on this motion. Based on her materials, and common sense inferential reasoning, I find that Ms. Baksh was acutely concerned about the status of the home she and her children have lived in for the past six years. And she was, and is, relying on Mr. Persaud to sort things out. She undoubtedly would have promptly informed Mr. Persaud of the presence of a “SOLD” sign on her front lawn.
73Mr. Persaud argued that any failure to make full and frank disclosure was attenuated by the fact that Mr. Annen was present at the hearing of the motion and made submissions on behalf of the Ramawads. I am not persuaded by this argument. I have no transcript of the proceedings before Verner J. and have no sense of the quantity nor quality of the submissions made to her. At any rate, the obligation to make full and frank disclosure is that of the party seeking the CPL. It is not acceptable for that party to try to shift the burden of disclosure to an opposing side who has no evidence before the court.
74In my view, the material non-disclosure and the misleading nature of Mr. Persaud’s evidence should, in and of themselves, result in the discharge of the CPL. As Justice Sharpe observed in United States v. Friedland, as above, the price to be paid for material non-disclosure is the setting aside of the order obtained on a without notice basis.
75Having said that, in my view, the present state of the law in Ontario is that while material non-disclosure may be a stand-alone ground to discharge a CPL, it does not automatically result in the loss of the CPL. Material non-disclosure is an important factor to be considered in the balance. The overarching concern remains, however, whether in all the circumstances – considering all of the equities – the interests of justice favour the discharge. See K.A. v. Mitchell, [2013] O.J. No. 2889 at para. 19. In this instance, I find that they do.
The Equities Favour a Discharge
76A CPL is a discretionary remedy. The court has a discretion to grant certificates and a similar discretion to discharge them. See s. 103(6) of the Courts of Justice Act, R.S.O. 1990, c. C.43. Similar factors are considered when exercising the discretion to grant or to discharge a CPL.
77To obtain and maintain a CPL, a plaintiff must be able to establish that he or she has a reasonable claim to an interest in the subject lands. This threshold question requires the plaintiff to establish only that there is a triable issue with respect to the claimed interest. See 1152939 Ontario Ltd. v. 2055835 Ontario Inc., [2007] O.J. No. 488, at para. 17. Provided this threshold is met, the court may consider a broad range of factors to determine whether it is in the interests of justice that a CPL should issue or, alternatively, should be discharged. The court’s overarching task is to exercise its discretion in the interests of justice, having regard to all of the equities between the parties. See 2526716 Ontario Inc. v. 2014036 Ontario Ltd., 2017 ONSC 1762, at para. 48.
78Mr. Persaud easily meets the preliminary threshold. I am satisfied that he and Ms. Baksh each have a reasonable claim to an interest in the lands. I will go on to consider other applicable factors.
79Some of the factors regularly considered by the court in connection with the entitlement to or sustainability of a CPL are set out in Master Donkin’s ruling in 572383 Ontario Inc. v. Dhunna, [1987] O.J. No. 1073. Often referred to as the “Dhunna Factors”, they include:
(a) Whether the plaintiff is a shell corporation;
(b) Whether the land is unique;
(c) The intent of the parties in acquiring the land;
(d) Whether there is an alternative claim to damages;
(e) The ease of calculating damages;
(f) Whether damages would be a satisfactory remedy;
(g) The presence, or absence, of another willing purchaser; and,
(h) The balance of convenience.
80It is readily apparent that many of the Dhunna Factors have no application to the unique circumstances of this case. Others are neutral. Overall, a consideration of the Dhunna Factors offers little assistance in resolving the equities here.
81In my view, the balancing of the equities that are relevant to this case favours the discharge of the motion. In reaching this conclusion, I have considered the following:
(a) Mr. Persaud’s failure to make full and frank disclosure on the motion before Verner J. This factor strongly points towards discharge;
(b) The lands are not unique to any of the parties in the sense that they are a relatively common example of a two story, single family subdivision home in the suburbs. Having said that, they are unique to Ms. Baksh in the sense that she and her children have lived at the Property for the past six years. They are similarly unique to the Sayeds in the sense that they are ideally laid out for the multiple family occupancy that they intend to use them for. They are also ideally geographically situated to the Sayeds’ needs in terms of employment and education. On balance, I consider the uniqueness issue to be a neutral factor;
(c) Whether damages might be an adequate remedy is a tricky question in this case. For starters, one must ask, “an adequate remedy for whom”? The plaintiff here – the one seeking the CPL – is Mr. Persaud. Damages would be an adequate remedy for him. He does not occupy the Property. He arguably has a beneficial interest in its equity. Damages would not be an adequate remedy for Ms. Baksh. Her principal interest is possessory. Similarly, they would not be an adequate remedy for the Sayeds. I say that because I have no means, on the current record, of ascertaining the true nature of the Ramawads’ financial affairs. I can have no confidence that they would be able to satisfy a damages award against them. They certainly should not have recourse to the equity in the Property to satisfy any damages award. Again, on balance, I view the damages issue as a neutral factor;
(d) I have considered the Declaration of Trust. It includes an express provision that the Property is to be sold if there are disagreements between the parties. There are definitely disagreements. According to the Declaration, the Property should be sold;
(e) I have also considered the Corkery J. Order. It provides for the sale of the Property and includes detailed conditions of sale. It further grants the Ramawads leave to issue a writ of possession. Mr. Persaud claims that he has successfully avoided the sale of the property, pursuant to the terms of the Order, by bringing arrears on the mortgage into good standing. Once again, however, his evidence is misleading. Paragraph 7 of the Order provides that the Property will not be sold “if the Respondents can pay out the existing mortgage and the debt to the Applicants as described in the Notice of Application.” The terms of the Order required to be met in order to stave off a sale have not been met. No one sought to appeal, vary or set aside the Corkery J. Order. Its terms appear to remain in force and effect;
(f) I have further considered the March 22, 2021 agreement between Mr. Persaud and Mr. Ramawad that provided that Mr. Persaud was to find another buyer for the Property by May 15, 2021. He failed to do so.
(g) Finally, I have considered Mr. Persaud’s evidence that he had a firm mortgage commitment in place as of May 21, 2021 to refinance the Property and end the Ramawads’ trusteeship. I put no weight on this evidence even though he produced a signed mortgage commitment from a private lender, 2822122 Ontario Inc.
I do not trust Mr. Persaud to be candid. I find his evidence to be vague, at times demonstrably false, at other times misleading, and always self-serving. In the affidavit filed before Verner J. he said that in early June 2021 he was negotiating the refinancing of the Property. Yet he presumably would have known about the fact that he had actually concluded a refinancing agreement, if indeed he had one, as of May 21, 2021. It was not until he filed his affidavit sworn August 27, 2021 that the May 21, 2021 commitment appeared.
The purported commitment provides for substantial refinancing of lands beneficially owned by both Mr. Persaud and Ms. Baksh. There is no evidence, however, that she agreed with the refinancing of the Property to pay out not only the encumbrances on the Property but also other debts of Mr. Persaud.
Finally, the purported commitment was for an $850,000 mortgage with a three-month term. It included an upfront lending fee of $17,000 plus a $500 processing fee and three months’ interest paid in advance. Even if the commitment was valid it would stave off Mr. Persaud’s financial problems for only three months.
82The prospect of evicting Ms. Baksh, her mother and her daughters from their home is a bleak one. But so is the prospect of leaving the Sayeds – innocent, third-party purchasers for value – with no home to move into and no homes to go back to. The difference between Ms. Baksh and the Sayeds is that Ms. Baksh has known for months that the Ramawads intended to sell the Property and she consented to an Order for the sale in June 2018. Moreover, in my view, it is only a matter of time before the Property has to be sold, either to end the trusteeship, or because of Mr. Persaud’s mounting financial problems.
83I do not like the way the Ramawads have gone about selling the Property to the Sayeds. I think at best their efforts might be described as inept. Having said that, I do not believe the CPL can stand in the face of the serious material non-disclosure on the motion before Verner J. And I do not believe the equities of the case can overcome that non-disclosure. If anything, I believe they tend to favour the sale of the Property to the Sayeds.
84The discharge of the CPL turned out to be something of a non-issue, since Mr. Persaud never actually registered it on title. Nevertheless, for what it is worth, I made the order discharging it.
Issue Two: Lifting the Stay on Enforcement of the Writ
85Whether the stay should be lifted is, for me, a more difficult issue to wrestle with than the discharge of the CPL. That said, the same reasoning that supports the discharge of the CPL goes a long way to supporting the decision to lift the stay of enforcement of the writ of possession.
86There are two issues that, in my view, may have had an impact on the enforceability of the writ, had they been advanced. Neither was.
87First is the issue of whether the writ ought to have been issued in the first place. Rule 60.10(3) provides that a writ of possession remains in force for one year from the date of the order authorizing its issue, though it may be renewed by order on a yearly basis thereafter.
88The Corkery J. Order granting leave to issue the writ is dated June 15, 2018. It strikes me as highly unusual for a party to wait two-and-a-half years to issue a writ. The Rule is silent about what happens if the party waits more than a year after the date of the authorizing order to actually issue the writ. Is the order granting leave spent after a year? Or does the writ expire one year after it is actually issued pursuant to the authorizing order? These questions were not raised by counsel in argument and accordingly I will not address them in this ruling.
89Similarly, no one raised an argument that the principle of promissory estoppel ought to apply to prevent the Ramawads from enforcing the writ of possession or the terms of the Corkery J. Order more generally.
90Promissory estoppel may arise when four elements are established:
(a) an existing legal relationship between the parties;
(b) a clear and unambiguous promise or representation by statement or conduct, made by the party against whom the estoppel is raised establishing the party’s intent to be bound by the statement or conduct;
(c) reliance by the party raising the estoppel upon the statement or conduct of the party against whom the estoppel is raised; and
(d) the party to whom the representation was made must have acted upon it to his or her detriment.
See Mercedes-Benz Financial Services Canada Corp. v. Zhang, 2015 ONSC 986 (Div. Ct.) at para. 17.
91The Ramawads did not enforce the Corkery J. Order in accordance with its clear terms. They did nothing to list the Property for sale for the better part of three years. They chose not to issue the writ of possession for roughly thirty months. In the meantime, they entered what appears to be a sham lease with Ms. Baksh and Mr. Persaud, which purportedly runs until December 2021.
92Mr. Persaud did not assert that the doctrine of promissory estoppel is engaged in the circumstances of this case. Neither did Ms. Baksh. In the result, the court did not receive submissions from any party on the issue. In the absence of such submissions it would be inappropriate, in my view, to make any finding about whether the Ramawads ought to be prevented from relying on the Corkery J. Order on the basis of promissory estoppel. The Order otherwise remains in force and effect.
93The most significant factors impacting my decision to lift the stay on enforcement of the writ are as follows:
(a) The Verner J. Order was always meant to be temporary and subject to a further hearing on a more fulsome evidentiary record. That evidentiary record revealed serious shortcomings in Mr. Persaud’s duty to make full and frank disclosure to the court, as I have referred to earlier;
(b) The Declaration of Trust provides for a sale of the Property in the event of disagreements, which is clearly the case here;
(c) The Corkery J. Order provides unequivocally for a sale of the Property by the Ramawads. It grants them carriage of the sale. That Order has not been appealed, varied or amended. It remains in force and effect;
(d) Mr. Persaud further agreed, in March 2021, that he would find another buyer for the Property by May 15, 2021; and,
(e) The sale to the Sayeds is a valid and binding agreement with a third-party purchaser for value conducted in accordance with the terms of the Declaration of Trust and the Corkery J. Order. In the circumstances, it ought to be facilitated. Its facilitation will go a long way to bringing an end to a long-term difficult relationship between the Ramawads and Mr. Persaud and Ms. Baksh. In my view, the sale of the Property is all but inevitable.
Issue Three: The Return of the Purchase Proceeds
94The Sayeds were ready, willing and able to complete their purchase of the Property on August 31, 2021. The Ramawads were not, for three reasons.
95First, they were in no position to deliver vacant possession of the Property on the closing date.
96Second, they did not produce discharge statements for the two mortgages that are encumbering title to the Property.
97Finally, Mr. Annen did not provide his personal undertaking to pay off the outstanding mortgages from the purchase proceeds.
98Remarkably, the Ramawads take the position that they were ready, willing and able to complete the transaction on the scheduled closing date. They say the Sayeds improperly refused to take title and to register the transfer.
99The Ramawads’ position is utterly disingenuous. What they thought they might accomplish by hanging onto the purchase proceeds, despite their inability to complete the transfer, is a mystery. They have no answer for why the Sayeds ought to be compelled to complete the transaction without the provision of mortgage discharge statements and a solicitor’s undertaking to pay out those mortgages, such that they can be confident they will receive clear title.
100In terms of the contractual obligation to provide vacant possession on closing, Mr. Ramawad made the following arrestingly audacious statement in his affidavit sworn September 4, 2021:
I believe by the Purchasers (sic) express conduct, including their requisition letter, their urgent motion, their being added as parties to the litigation, and by taking the positions that they did on August 30 and 31 and (sic) 2021, include release (sic) the purchase funds, that they waived the condition of vacant possession as part of the sale.
101The suggestion that the Sayeds somehow implicitly waived the requirement of vacant possession on closing is nothing short of inane.
102The law is clear. Waiver of a contractual right will be found only where the evidence demonstrates that the party waiving had (1) a full knowledge of rights; and (2) an unequivocal and conscious intention to abandon them. See Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 CanLII 100 (SCC), [1994] 2 S.C.R. 490 at para. 20 and Campbell v. 1493951 Ontario Inc., 2021 ONCA 169 at para. 12.
103Absolutely nothing in the factual context of this motion supports a finding of a clear and unequivocal waiver on the part of the Sayeds of their right to vacant possession on closing. Nothing. In fact, the opposite is true.
104The fact that the Sayeds brought an urgent motion to discharge Mr. Persaud’s CPL and to lift the stay on the enforcement of the Ramawads’ writ of possession supports at least two inferences. First, that they believed they needed to act in the face of the Ramawads’ failure to do so. Second, that they were acutely concerned about the risk that the Verner J. Order posed to their ability to close the purchase transaction and obtain vacant possession on August 31, 2021.
105Moreover, as part of their closing documents, the Ramawads signed, on August 31, 2021, both an undertaking to deliver up vacant possession of the Property and a Vendors’ Closing Certificate certifying that they would deliver up vacant possession of the Property as of the completion date.
106Mr. Annen made the wholly unsustainable argument before me that no one ever specified when vacant possession was to be provided. In other words, the Ramawads were undertaking to provide vacant possession, just not on any date in particular. Without hesitation I find that the Ramawads were contractually required to and furthermore undertook to provide vacant possession on closing. To make any other finding would be patently nonsensical.
107Mr. Ramawad’s so-called “belief” that the Sayeds waived their right to vacant possession is mere fantasy.
108In the result, I ordered the immediate return of the Sayeds’ purchase funds.
Steps Going Forward
109It is unclear how or whether the Sayeds’ agreement to purchase the Property will be resurrected. It should be clear, however, that any sale of the Property must comply with the terms of the Corkery J. Order which remains in effect.
Costs
110The parties are encouraged to reach an agreement on the issue of costs. Failing such an agreement, they may make written submissions on the following schedule. The Sayeds’ submission are to be served and filed by September 30, 2021. The submissions of Ms. Baksh and Mr. Persaud are to be served and filed by October 7, 2021. The submissions of the Ramawads are to be served and filed by October 14, 2021. Any reply submissions by the Sayeds are to be served and filed by October 21, 2021. Submissions are not to exceed two pages in length, not including cost outlines.
C. Boswell J.
Released: September 16, 2021