Mueller v. Stanic, 2022 ONSC 858

COURT FILE NO.: 13820/22

DATE: 2022-02-07

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: Melanie Mueller, plaintiff

AND: Ivo Stanic and Mirjana Stanic, defendants

BEFORE: Mr Justice Ramsay

COUNSEL: Sumit Judge for the plaintiff; Ceili N. Boer for the defendants

HEARD: February 7, 2022 at Welland by teleconference

ENDORSEMENT

[1] The plaintiff is suing for specific performance of an agreement for the purchase and sale of real property. Before me today is her motion for a certificate of pending litigation. An interim certificate was issued by Edwards J. on consent on January 26, 2022.

[2] The property in question is a semi-detached bungalow in Thorold in a neighbourhood of semi-detached bungalows.

[3] In the spring of 2021 the defendants decided to sell the property. It had turned out to be a bad investment because the tenant did not pay rent. They got an eviction order from the Landlord and Tenant Board, but the tenant applied for a review. The defendants were waiting for the decision of the Landlord and Tenant Board on the review.

[4] The agreement of purchase and sale was signed on June 14, 2021. The agreement acknowledges that a tenant occupies the premises. The parties agreed that the sellers would give the tenant a notice to vacate for the purchaser under section 49 of the Residential Tenancies Act and that if the tenant did not vacate, the closing date would be delayed 30 days. If by then the tenant had still not vacated, the purchaser would have the option to decline to close and get her deposit back, or to close the transaction and take the property with the tenant. The defendants gave the notice and continued to await the decision of the Landlord and Tenant Board on the review.

[5] On September 22, 2021 the parties extended the closing date to November 1, 2021.

[6] The defendants had been locked out of the properties by the tenant in contravention of the Residential Tenancies Act. Their only information about the property came from neighbours. On October 20, 2021 the defendants were told that the tenant had moved out a few days earlier and that the property was still being occupied by several other people. On October 22, 2021 the defendants posted a Trespass to Property Act notice at the premises ordering all present to leave. That might not have sufficed. If it had not been for a later police investigation it might have been necessary to apply for their eviction under section 100 of the Residential Tenancies Act.

[7] On November 1, 2021, the premises were still occupied. The plaintiff asked the defendants to put off the closing date to December 10, without mentioning vacant possession. The defendants declined. They took the position that the plaintiff should close the transaction and accept the tenant or terminate the agreement and ask for her deposit back. The plaintiff did not close the transaction.

[8] After the close of business on November 1, the Niagara Regional Police contacted the defendants and told them to secure their property. Earlier that day, unbeknownst to the defendants, the police had raided the property and for their own reasons removed whoever was present. The defendants boarded up the property and finally regained possession of it. On November 3, 2021, the plaintiff, now aware of this circumstance, asked for her deposit back. On December 6, 2021 the Landlord and Tenant Board issued an eviction order against the original tenant. The defendants have since spent $80,000 repairing damage caused by the occupants and the police.

[9] The plaintiff pleads that she declined to close because of misrepresentations by the defendants about the status of the original tenant. She claims an interest in the property.

[10] As set out by Master Glustein in Perruzza v. Spatone, 2010 ONSC 841, I can decline to issue a certificate on the same grounds on which I could discharge a certificate under s.103(6) of the Courts of Justice Act:

(6) The court may make an order discharging a certificate,

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

(ii) does not have a reasonable claim to the interest in the land claimed … .

[11] 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 CanLII 6832 (ON CA), [2002] O.J. No. 282, (C.A.) at para. 20).

[12] The defendants were ready and willing to convey the property on the closing date. It was the plaintiff who chose not to close. However, the even if the defendants had reneged on the deal, the plaintiff would have been obliged to make one of two choices: to accept the repudiation and sue for damages or decline to accept the repudiation and seek specific performance: Paramadevan v. Semelhago, 1996 CanLII 209 (SCC), [1996] 2 SCR 415, paragraph 15. Her position should not be better when it is she who terminated the contract. She lost any claim to an interest in the land when she chose to terminate the agreement. Her claim, that she declined to close because of misrepresentations made by the plaintiffs, would give right to a claim for damages, not an interest in the property. There is no triable issue as to whether she has a reasonable claim to an interest in the property.

[13] In the alternative, even if a claim based on misrepresentation could give rise to an interest in the property, there is still no triable issue. The communications between the defendants and the plaintiff are documented. The defendants never misled the plaintiff. The original tenant’s status had not changed by November 1. Her tenancy was not terminated until the Landlord and Tenant Board issued its order on December 6. Her possible vacation of the premises did not terminate the tenancy. It would only have given the defendants the right to bring another application to terminate, this time under section 79 of the Residential Tenancies Act. The situation was still uncertain. For all the defendants knew, the tenant could have been away temporarily. It is questionable whether the defendants would have been legally entitled to prevent her return. Furthermore, as far as the defendants knew, there were other people occupying the premises. What the defendants told the plaintiff did not constitute misrepresentation.

[14] Moreover, on November 3, 2021, by which time all parties knew about the police raid and the original tenant’s apparent departure, the plaintiff asked for her deposit back. That is not consistent with her contention that she would have closed if she had known the true state of affairs.

[15] I dismiss the motion to issue a certificate of pending litigation and order the discharge of the interim certificate that was issued on January 22, 2022.

[16] The defendants were successful and should have partial indemnity for costs. Having heard from the parties after giving my decision in open court, I order the plaintiff to pay costs to the defendants fixed at $7,000 payable within 31 days.

J.A. Ramsay J.

Date: 2022-02-07