COURT FILE NO.: CV-22-152
DATE: 20220211
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Matthew Riddell, Plaintiff (Defendant by Counterclaim)
AND:
Huu Ty Huynh, Defendant (Plaintiff by Counterclaim)
BEFORE: The Honourable Justice Woollcombe
COUNSEL: Matthew Riddell, Moving party, Self-represented
Helen Richards and Avi Bourassa, for the Responding party
HEARD: February 10, 2022
E N D O R S E M E N T
[1] The moving party, Mr. Riddell, brings a motion for an order granting leave to issue a Certificate of Pending Litigation (“CPL”) against the property at 4401 Violet Road, Mississauga, Ontario.
[2] Initially, this motion was made on February 3, 2022, without notice to the responding party, Mr. Huynh. In an endorsement of February 3, 2022, Bloom J. directed that the matter be put on the short motions list for February 10, 2022 and that the moving party serve a copy of his endorsement, along with the motion materials, on the respondent by February 4, 2022. The respondent was permitted to serve and file materials by February 9, 2022. Responding materials were served and filed and have been provided to me. The respondent opposes the motion on the basis that Mr. Riddell does not meet the applicable test.
[3] At the outset of the motion, Mr. Riddell, who represents himself, asked for further time to prepare his response to the defendant’s motion. I gave him that time indicating that in my view, the critical matter for him to focus on was whether he met the test for a CPL under s. 103 of the Courts of Justice Act “CJA”). I begin the hearing of this motion at 11:50 a.m.
[4] The relevant background to the motion is not complicated. The plaintiff in the action, Mr. Riddell, is a tenant on the property and has been since August 6, 2016. The defendant owns the property.
[5] There has been a difficult relationship between the plaintiff and the defendant for some considerable time. In July 2021, the defendant decided to sell the property. In his affidavit, he sets out various efforts made by Mr. Riddell to frustrate that process.
[6] It is Mr. Riddell’s position that on October 19, 2021, he and the defendant entered into a written and oral agreement respecting his interest in the property. He says that it was agreed that the property would be sold by the defendant for fair market value, between $1,100,000 and $1,200,000, and that after the defendant received $950,000 from the proceeds, he (the plaintiff) would receive the rest. He offers an email said to be proof of this contract.
[7] The defendant disputes ever having entered into the contract alleged and disputes the authenticity of the document relied on by the plaintiff, stating in his affidavit that he never sent this email.
[8] In December 2021, the defendant entered into an agreement to sell the property. The sale is scheduled to close on February 14, 2022.
[9] The plaintiff says that the defendant has breached their agreement by entering into this agreement of purchase and sale. Mr. Riddell claims to have an equitable or beneficial interest of at least 20.93% in the property’s value and submits that that there is a triable issue in respect to his claim to have an interest in the property.
[10] There is clearly a significant factual dispute between the parties as to whether or not they reached any agreement. Mr. Riddell says that they did and offers email evidence as proof. The defendant alleges that these emails are falsified and that when the entire context is considered, this becomes obvious. This motion is not the forum in which to resolve this issue.
[11] On January 14, 2022, Mr. Riddell commenced an action against the defendant. He claims general damages for breach of contract and negligent misrepresentation in the amount of $250,000. He also claims punitive and aggravated damages in the amount of $50,000. He seeks leave to issue a CPL against the property.
[12] The materials filed by both sides are voluminous. Mr. Riddell’s motion record is two volumes and 164 pages. The respondent’s materials are 316 pages. Each side has filed a factum and book of authorities. Much of the material, including that related to the acrimonious history between the parties, may be relevant to the issues in the action. It has significantly less relevance on the CPL motion.
[13] The issue to be decided is whether the plaintiff has satisfied me that leave should be granted to issue a CPL.
[14] Section 103(1) of the Courts of Justice Act, R.S.O. 1990, c. C.43 provides that:
The commencement of a proceeding in which an interest in land is in question is not notice of the proceeding to a person who is not a party until a certificate of pending litigation is issued by the court and the certificate is registered in the proper land registry office under subsection (2).
[15] In his decision in Singh v. Gouveia, 2018 ONSC 6059, Andre J. provided a helpful summary of the test for the issuance of a CPL at paras. 9-11:
[9] In the 2017 Ontario Superior Court Practice, T. Archibald et al. eds. (Toronto: LexisNexis 2017), at page 332, the authors note that:
For a CPL to be granted, there is a two-step test. The first prong of that test is whether there is sufficient evidence to establish a reasonable claim to an interest in the land based on facts upon which the plaintiff could succeed at trial. The threshold for demonstrating whether there is a triable issue is low. Where reasonable claims are made for a constructive trust or a fraudulent conveyance in respect of a property, a CPL may be issued pending trial. The second prong is if so, what are the equities between the parties as to the appropriateness of granting the order?
[10] In Perruzza v. Spatone, 2010 ONSC 841, [2010] O.J. No. 493, the court noted at para. 20 that:
(i) The test on a motion for leave to issue a CPL made on notice to the defendants is the same as the test on a motion to discharge a CPL (Homebuilder Inc. v. Man-Sonic Industries Inc., 1987 CarswellOnt 499 (S.C. - Mast.) ("Homebuilder") at para. 1);
(ii) The threshold in respect of the "interest in land" issue in a motion respecting a CPL (as that factor is set out at section 103(6) of the Courts of Justice Act, R.S.O. 1990, c. C.43) is whether there is a triable issue as to such interest, not whether the plaintiff will likely succeed (1152939 Ontario Ltd. v. 2055835 Ontario Ltd., 2007 CarswellOnt 756 (S.C.J.), as per van Rensburg J., citing Transmaris Farms Ltd. v. Sieber, [1999] O.J. No. 300 (Gen. Div. - Comm. List) at para. 62);
(iii) The onus is on the party opposing the CPL to demonstrate that there is no triable issue in respect to whether the party seeking the CPL has "a reasonable claim to the interest in the land claimed" (G.P.I. Greenfield Pioneer Inc. v. Moore, 2002 6832 (ON CA), 2002 CarswellOnt 219 (C.A.) at para. 20);
(iv) Factors the court can consider on a motion to discharge a CPL include (i) whether the plaintiff is a shell corporation, (ii) whether the land is unique, (iii) the intent of the parties in acquiring the land, (iv) whether there is an alternative claim for damages, (v) the ease or difficulty in calculating damages, (vi) whether damages would be a satisfactory remedy, (vii) the presence or absence of a willing purchaser, and (viii) the harm to each party if the CPL is or is not removed with or without security (572383 Ontario Inc. v. Dhunna, 1987 CarswellOnt 551 (S.C. - Mast.) at paras. 10-18); and
(v) The governing test is that the court must exercise its discretion in equity and look at all relevant matters between the parties in determining whether a CPL should be granted or vacated (931473 Ontario Ltd. v. Coldwell Banker Canada Inc., 1991 CarswellOnt 460 (Gen. Div.); Clock Investments Ltd. v. Hardwood Estates Ltd., 1977 1414 (ON SC), 1977 CarswellOnt 1026 (Div. Ct.) at para. 9).
[11] In Lancorp Construction Co. v. Royal Vista Homes (Weston) Ltd., [2008] O.J. No. 4698, the court noted at para. 19 that “a CPL should be available only in limited circumstances and should generally not be used as a form of execution before judgment.” Similar sentiments have been expressed in Bowbriar Investments Inc. v. Wellesley Community Homes Inc., [1977] O.J. No. 66 (H.C.J.) and Waxman v. Waxman, [1991] O.J. No. 89 (Gen. Div).
[16] The test was put more succinctly by Petersen J. in 2254069 Ontario Inc. v. Kim, 2017 ONSC 5003 at para. 21 where she said that the question is: “Is there a triable issue in respect of the moving party’s claim to an interest in land?”. See also: Pacione v. Pacione, 2019 ONSC 813 at para. 20.
[17] In my view, Mr. Riddell has not met the test for an order granting leave to issue a CPL.
[18] First, and most significantly, while he submits that he has an interest in land because he says he is entitled to proceeds from the sale of the property, I cannot conclude from the evidence before me that he has any interest in land as that term is properly understood. I am satisfied that the defendant has shown that Mr. Riddell has no triable issue in respect of a reasonable claim to an interest in land.
[19] An interest in land means a proprietary interest : Bajada v. Bajada, 1991 CarswellOnt 252 at para 14. It requires more than a “connection to land” or that the claim relates to property: Shaw Communications Inc. v. Young, 2021 ONSC 7918 at para 59. See also: Jacobs v. Yehia, 2015 BCSC 267 at para. 24.
[20] Mr. Riddell has no ownership interest in the property. He has not challenged the defendant’s title to the property. He is not a creditor of the defendant, such as a mortgagor. These factors all support a conclusion that there is no triable issue respecting whether Mr. Riddell has a reasonable interest in the defendant’s property: Singh v. Gouveia, at para. 14.
[21] Furthermore, it is significant that Mr. Riddell has not pleaded that he has an interest in the land. In his statement of claim, he pleads that he is entitled to monetary damages for breach of contract and negligent misrepresentation.
[22] In support of his claim that he has an interest in land, Mr. Riddell relies on a number of authorities that he says support his position. A careful review of them reveals that they do not advance his argument.
[23] For instance, Mr. Riddell relies on the decision of Conlan J. in Pacione v. Pacione, 2019 ONSC 813 in support of his claim that he has an interest in land. In that case, the plaintiff seeking the CPL relied on the fact that his brother had given him a promissory note that expressly said that if the debt owed to him was not re-paid, he was entitled to a third mortgage over the subject property. When his brother failed to re-pay the debt, the plaintiff sought a CPL. The defendant brother responded that the plaintiff had no interest in land. Conlan J. held that the promissory note spoke for itself and established an interest in land. The promissory note, of course, authorized a mortgage over the property (an obvious interest in land) in the event of a default on the loan payment. This case does not assist Mr. Riddell as the alleged breach of contract in this case did not purport to give him an interest in the property. At its highest, it entitled him to the damages he seeks.
[24] Mr. Riddell also relies on the decision of Petrela v. Denney, [1989] O.J. No. 1234, which he submits is factually similar in that there was an agreement reached, which was then breached, and the court granted a CPL. The facts in that case are very different. The plaintiff made an offer to purchase a property and was told verbally that his offer had been accepted. The defendant then accepted another offer. The plaintiff was granted a CPL because the court found that his belief that his offer to purchase had been accepted grounded his claim of an interest in the land. This is fundamentally different from Mr. Riddell’s case. While he says that there was a contract that was accepted, the contract was not to sell the property to him. It was, at its highest, for him to have a share in the proceeds of the sale of the property. Again, this case does not assist his claim to have an interest in land.
[25] The conclusion that Mr. Riddell does not have or claim an interest in land, is a powerful and sufficient basis for his motion to be dismissed.
[26] Moreover, even if I had decided that the applicant had a reasonable claim for an interest in land, other factors point strongly against granting a CPL. These include:
- In keeping with s. 106(6)(a)(i) of the CJA, a CPL is not appropriate when a claim of money is made in place of or as an alternative to the interest in land claimed. This is not a case in which there is an alternative claim for damages. It is a case in which the only claim made is for damages. Damages would clearly be a sufficient remedy. These factors not only reinforce that the claim is not one of an interest in land, but also support a conclusion that leave to issue a CPL should not be granted;
- This is a case in which were the plaintiff to be successful in his claims, it would be an easy and straight-forward process to calculate damages;
- Section 103(6)(b) of the CJA makes clear that a CPL should not be granted when the interests of the party seeking it can be adequately protected by another form of security. A CPL should not be used to achieve “pre-judgment execution on what is fundamentally a damages claim it the extraordinary remedy of a Mareva injunction would not be available”. In my view, pre-judgment execution of a damages claim is precisely what the plaintiff is trying to obtain: Shaw Communications, at para. 62; Sachkov v. Inlitskaya, 2021, ONSC 5495 at paras 28-29.
[27] I recognize that the determination of whether to grant leave to issue a CPL requires an exercise of discretion in equity and examination of all of the relevant matters between the parties.
[28] The defendant has wanted to sell this property for some time. He has an agreement of purchase and sale that will enable him to do so. The plaintiff has sought to frustrate the sale of the property in a number of ways. Bringing this motion on the eve of the sale closing appears to me to be a final attempt to prevent the sale he desperately wants to stop, particularly because he knows that the purchaser plans to move into the property.
[29] There is no doubt that were the plaintiff permitted to issue a CPL, the upcoming sale will not close. The CPL would put up a roadblock in the defendant’s legitimate attempt to dispose of property that he owns. I do not think that preventing the sale would actually accomplish what the plaintiff says he wants. It would not require the defendant to accept the contract that the plaintiff asserts was entered into, which the plaintiff seems to think would be the outcome.
[30] In all these circumstances, where the plaintiff has no reasonable interest in land, his motion for leave to issue a CPL must be dismissed.
Costs:
[31] At the conclusion of the hearing, the parties made submissions respecting costs.
[32] Mr. Riddell’s position is that regardless of who is successful, costs should be reserved to the trial judge.
[33] The defendant’s position is that this motion relates to a discrete issue and that there is no basis to reserve costs for the trial judge. Counsel provided a costs outline at the hearing. In it, counsel seeks costs of $26,015.54 on a substantial indemnity basis. In the alternative, on a partial indemnity basis, counsel seeks $17,606.64.
[34] I agree with the defendant that this motion relates to a discrete step taken by the plaintiff in the litigation. The plaintiff was unsuccessful. Even if the plaintiff were to succeed at trial, and to be awarded the damages he seeks, that will not, in my view, justify him having brought this motion in the manner that he did and having sought an order that I have concluded should not be granted. There is no reason to delay ordering costs for this unsuccessful motion.
[35] As the successful party, the defendant is presumptively entitled to costs. In exercising the discretion to award costs under s. 131 of the CJA, the court may consider, in addition to the result of the motion, the factors set out in Rule 57.01(1).
[36] I consider the following factors to be significant:
- Mr. Riddell’s motion had virtually no chance for success given the fact that he has not plead and does not claim any proprietary interest in property, the threshold for obtaining a CPL;
- The motion was of great significance to the defendant. He has wanted to sell the property for some time and has been undermined by the plaintiff in his efforts. Had the CPL been granted, he would not have been able to close the sale on February 14, 2022. It was vital that the defendant respond to this important issue fully;
- Mr. Riddell’s motion was, in my view, motivated by a desire to gain a strategic and tactical advantage. He wanted to thwart the sale of the property. He also wanted to use the CPL to leverage a resolution that would have him receiving a cut of the sale proceeds. He made the submission that he expects that a CPL would lead to the sale not closing and the defendant then reverting to the agreement that he says they reached in October 2021. There can be little question that this motion is to try to gain a tactical advantage in obtaining that result;
- The manner in which the plaintiff brought this motion is concerning. He has known since December 18, 2021, that the property had been sold and was to close on February 14, 2022. Yet, he brought his motion (ex parte initially), on February 3, 2022, 11 days before the closing, forcing the matter to be dealt with on an expedited basis. While Bloom J. wisely decided that as a matter of fairness the defendant needed to be served and afforded an opportunity to participate in this motion, I view it as telling, that the plaintiff continued to try to deprive the defendant of procedural fairness. By way of example, while the plaintiff was advised at 2:48 p.m. on February 3, 2022, that he was to serve the defendant with his motion materials by February 4, 2022, he did not send his first email with volume 1 of the motion record until 10:54 p.m. on February 4, 2022, well after the close of business and the end of the juridical day. This demonstrates the plaintiff’s efforts first, to foreclose the defendant’s participation in this motion and, second, having lost that advantage, to deprive the defendant of even the limited time the court had ruled he was entitled to in order to respond to the motion;
- As a result of the timing the plaintiff chose to follow, the defendant had from late evening of Friday, February 4 until February 9, 2022 to retain counsel to respond to the motion and for counsel to prepare, serve, and file responding materials;
- The plaintiff has significantly increased the costs of this motion by including in his materials very serious allegations about the defendant that have no bearing on the issues respecting the CPL. For instance, the facts in paragraphs 21 through 34 of the plaintiff’s affidavit in support of the motion are largely irrelevant to the motion. Further increasing the costs of this motion is the fact that the plaintiff chose to include in his motion materials a significant number of serious allegations against the defendant. Not surprisingly, counsel for the defendant felt an obligation not to leave these allegations unanswered, thereby necessitating a much longer affidavit than should have been necessary;
- At the same time, the legal issue that was resolved on this motion was not a complicated one and involved the application of well-established legal principles to the facts; and
- I have reviewed the costs outline of counsel for the defendants and think the hours spent by counsel are, while high, not unreasonable in all of the circumstances.
[37] I conclude that the plaintiff could reasonably have expected, were he unsuccessful on this motion as he brought it, to pay significant costs. I fix reasonable costs on partial indemnity basis at $17,606.64, inclusive of disbursements and HST.
[38] To be clear, this order is enforceable immediately as if it were an issued and entered order.
Woollcombe J.
DATE: February 11, 2022
COURT FILE NO.: CV-22-152
DATE: 20220211
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Matthew Riddell, Plaintiff (Defendant by Counterclaim)
AND
Huu Ty Huynh, Defendant (Plaintiff by Counterclaim)
BEFORE: The Honourable Justice Woollcombe
COUNSEL: Matthew Riddell, Moving party, Self-represented
Helen Richards and Avi Bourassa, for the Responding party
ENDORSEMENT
Woollcombe J.
DATE: February 11, 2022