Court File and Parties
COURT FILE NO.: CV-20-390
DATE: 2021/10/19
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: 873091 ONTARIO LTD., Applicant
AND
9695443 CANADA INC., Respondent
BEFORE: Justice Sylvia Corthorn
COUNSEL: Lynne Watt and Carolina Campos, for the Applicant
Ronald Peterson and Chelsea Packman, for the Respondent
HEARD: August 27, 2021 (By Zoom)
ENDORSEMENT
Introduction
[1] This application is one of two proceedings involving these parties. Both proceedings relate to a parcel of land on Bath Road, in the City of Kingston (“the Property”). The Applicant is the owner of the Property. Between August 2017 and April 2018, the Applicant entered into two agreements of purchase and sale with the Respondent, a developer, for the purchase of the Property. I refer to the second such agreement as “the APS”.
[2] The notice of application in this proceeding was issued on December 17, 2020. The relief sought includes a declaration that the APS is null and void because of the Respondent’s failure to meet a condition of closing.
[3] The Applicant brings this motion for leave to amend the notice of application. The proposed amendments relate primarily to factual matters that arose subsequent to the date on which the notice of application was issued. For example, the proposed amendments reflect corrections made after an error was discovered in the description of the lot lines for the Property included in the APS.
[4] The proposed amendments also include two additional forms of relief: (a) as an alternative to the declaration sought, an order providing for a fixed closing date (para. a.1); and (b) an order directing that the certificate of pending litigation registered by the Respondent on the title to the Property (“the CPL”) be discharged (para. b.1 and “the Amendment”).
[5] The CPL was not obtained on a motion in this proceeding; it was obtained on a motion in the action commenced by the Respondent (“the Action”). The statement of claim in that action was issued on December 17, 2020 – the same date on which the notice of application in this proceeding was issued. The parties to the Action are the same as the parties to this application. The relief sought by the Respondent, in its capacity as the plaintiff in the Action, includes an order for specific performance of the APS.
[6] The Respondent’s motion for the CPL was heard and the relief sought was granted on December 17, 2020. The statement of claim and the order granting the CPL (“the Order”) were served on the Applicant several days later.
[7] In the spring of 2021, the Respondent served a motion, within this application, for an order (a) converting the application to an action, and (b) consolidating that action with the Action. Thereafter, the Applicant served its motion for leave to amend the notice of application. Ultimately, both motions were returnable on August 27, 2021. The court exercised its discretion to control the process and heard the Applicant’s motion first. The hearing of the Respondent’s motion was commenced, could not be completed, and is scheduled to be completed on October 29, 2021.
[8] At the outset of his submissions in response to the Applicant’s motion, the Respondent’s counsel informed the court that the Respondent consents to all of the proposed amendments with the exception of the two additional forms of relief.
The Proposed Amendments
[9] The Respondent consents to the amendments to the notice of application set out in paragraphs 2g, 2h, 2h.1 (two sub-paragraphs bear that number), 2h.2 to 2 h.6, 2i, 2k, 2r, 2r.1, 2r.2, and 2s of the amended notice of application attached to the notice of motion (“the Proposed Pleading”).
[10] The proposed amendments in dispute are to the two additional forms of relief set out in sub-paragraphs a.1 and b.1 of the Proposed Pleading. The former reads as follows: “In the alternative, a declaration that the APS shall be subject to a fixed closing date of October 2, 2021, failing which the APS shall be null and void for failure to close”.
[11] From the submissions made by the Respondent’s counsel, it became clear that the Respondent’s opposition to paragraph a.1 is based on an alleged lack of substantive merit to the Applicant’s request for a fixed closing date. The Respondent does not allege any form of prejudice arising from paragraph a.1.
[12] I find that the grounds upon which the Respondent relies in opposing the request for leave to add paragraph a.1 to the prayer for relief are not sufficient to support an order dismissing that aspect of the Applicant’s motion. That aspect of the relief requested is granted without further consideration in the Analysis section of this endorsement.
[13] As a result, the only issue to be determined on this motion is whether the Applicant is entitled to leave to amend the notice of application to include the Amendment? It reads as follows (bold font as in original):
THE APPLICANT MAKES APPLICATION FOR: …
b.1. An order lifting the Certificate of Pending Litigation (“CPL”) associated with Court File No. CV-20-00000386-00, and directing the registrar to delete the CPL registered as Instrument FC317698 from the title of the Subject Property.
[14] The analysis which follows addresses that singular issue.
Positions of the Parties
[15] The Applicant describes the request for an order discharging the CPL as ancillary to the primary relief sought of a declaration that the APS is null and void because of the Respondent’s failure to close. The Applicant relies on the mandatory wording of r. 26.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 with respect to the test on a motion for leave to amend. The Applicant submits that the Respondent has not established that it will be prejudiced, in a manner that cannot be compensated by costs or an adjournment, if leave to make the Amendment is granted.
[16] The Respondent describes the Amendment as a collateral attack on the Order. The Respondent submits that such attacks are improper. The Respondent’s position is that, as a result, the Amendment is untenable in law and, in that regard, leave to amend should be refused.
[17] In reply, the Applicant asks the court to grant leave to make the Amendment, with the substantive issue of whether the request for an order discharging the CPL amounts to a collateral attack on the Order to be determined by the applications judge.
Analysis
[18] A notice of application may be amended in the same manner as a pleading: r. 14.09. Subrule 26.01 is clear in mandating that leave to amend shall be granted on a motion at any stage of a proceeding unless the opposing party demonstrates that it will suffer prejudice which cannot be compensated for in costs or an adjournment.
[19] The mandatory wording of r. 26.01 does not mean that the court will grant leave to make any proposed amendment in the absence of demonstrable prejudice. The proposed amendment must disclose a reasonable cause of action: 158844 Ontario Ltd. v. State Farm Fire and Casualty Co., 2017 ONCA 42, 135 O.R. (3d) 681, at para. 25.
[20] The Applicant emphasized the lack of demonstrable prejudice to the Respondent if the Amendment is made. The Applicant did not in any way address whether the Amendment discloses a reasonable cause of action. For the following reasons, I find that it does not do so.
[21] First, I consider the manner in which the Amendment is presented. The only reference to the CPL in the Proposed Pleading is in paragraph b.1. The grounds set out in the Proposed Pleading make no mention of the CPL. The Applicant does not set out any grounds that would, if established, support granting an order discharging the CPL. In the absence of any such grounds, the court is left to conclude that the Amendment does not disclose a reasonable cause of action.
[22] In another circumstance, the court might consider adjourning the Applicant’s motion to permit the Applicant to deliver a revised amended notice of application, addressing the deficiencies in the grounds. That indulgence is not granted in this instance because the request for leave to make the Amendment is, in any event, denied for other reasons.
[23] I turn next to consider s. 103 of the Courts of Justice Act, R.S.O. 1990, c. C.43. The potential entitlement to a certificate of pending litigation is triggered by “the commencement of a proceeding in which an interest in land is in question”: s. 106(1). It was the commencement of the Action that gave rise to the Respondent’s potential entitlement, as the plaintiff claiming an interest in the Property, to the CPL.
[24] Section 103 does not set out the test to be met for a certificate of pending litigation to be granted. The case law establishes that the test to be met by a party seeking a certificate of pending litigation is the same as the test to be met by a party seeking an order discharging a certificate: Perruzza v. Spatone, 2010 ONSC 841, at para. 20.
[25] The test to be met to obtain an order discharging a certificate of pending litigation is set out in s.103(6). That subsection provides that the court may make an order discharging a certificate of pending litigation,
(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.
[26] The Applicant has not provided any authority to support a finding that a judge presiding over this application, or even an interim motion within it, has the authority to consider the test set out in s. 106(3) and grant a discharge of a certificate of pending litigation granted in an entirely separate proceeding. For example, how is a judge presiding over an event in this proceeding to consider matters such as the following issues identified in Perruzza, at para. 20, item (iv):
• Is the Respondent, in its capacity as the plaintiff in the Action, advancing an alternative claim for damages?
• What is the relative ease or difficulty in calculating damages, as an alternative form of relief that might be awarded to the Respondent in its capacity as a plaintiff in the Action?
• Would damages be a satisfactory remedy for the Respondent in its capacity as a plaintiff in the Action?
[27] The motions judge who granted the Order was required to consider whether the Respondent, in its capacity as the plaintiff in the Action, has, in their statement of claim, raised a triable issue as to their alleged interest in the Property: Perruzza, at para. 20. What authority would a judge presiding over an event in this proceeding have to determine that issue if faced with a request for an order discharging the CPL?
[28] Last, the Respondent raises the issue of a collateral attack on the Order. In Wilson v. The Queen, 1983 CanLII 35 (SCC), [1983] 2 S.C.R. 594, at p. 599, McIntyre J. defined a collateral attack as “an attack made in proceedings other than those whose specific object is the reversal, variation, or nullification of the order or judgement.” The specific object of this application is a declaration that the APS is null and void because of the Respondent’s failure to close; it is not the reversal, variation, or nullification of the Order.
[29] McIntyre J. also referred at p. 599 to the requirement to exhaust appeals and to pursue “other means of direct attack upon a judgment or order”. The Applicant, in its capacity as the defendant in the Action, has a means of direct attack available to it – a motion, brought within the Action, for an order discharging the CPL. At no time since being served with the CPL has the Applicant pursued such a motion. There is no evidence before the court to suggest that there is any reason why the Applicant could not, in its capacity as a defendant in the Action, pursue such a motion in the future.
[30] For the reasons set out above, the request for leave to make the Amendment is refused.
Summary
[31] The court makes the following order:
On the consent of the parties, the Applicant is granted leave to amend the notice of application by adding paragraphs 2g, 2h, 2h.1 (both sub-paragraphs bearing that number), 2h.2 to 2h.6, 2i, 2k, 2r, 2r.1, 2r.2, and 2s as set out in the Proposed Pleading.
The Applicant is granted leave to amend the notice of application by adding paragraph a.1 set out in the Proposed Pleading.
The request for leave to amend the notice of application by adding paragraph b.1 set out in the Proposed Pleading is refused.
Costs of the Motion
[32] If the parties are unable to resolve the issue of costs of the motion, they will be addressed at the same time as costs of the Respondent’s motion.
Madam Justice Sylvia Corthorn
Date: October 19, 2021
COURT FILE NO.: CV-20-390
DATE: 2021/10/19
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: 8673091 ONTARIO LTD., Applicant
AND
9695443 CANADA INC., Respondent
BEFORE: Justice Sylvia Corthorn
COUNSEL: Lynne Watt and Carolina Campos, for the Applicant
Ronald Peterson and Chelsea Packman, for the Respondent
ENDORSEMENT
Corthorn J.
Released: October 19, 2021