COURT FILE NO.: CV-22-1220-0000
DATE: 2023 03 21
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
EVANOV COMMUNICATIONS INC.
Ronald Sleightholm for the Applicant
Applicant
- and -
1093641 ONTARIO LIMITED
No one appearing for the Respondent
Respondent
MAGDA DE LA TORRE
Fraser Dickson for Ms. de la Torre
HEARD: February 28, 2023
REASONS FOR DECISION
C. Chang J.
[1] The applicant brings this application pursuant to s. 50 of the Arbitration Act, 1991, S.O. 1991, c. 7 for enforcement of an arbitral award.
[2] On October 3, 2022, Chozik J. granted judgment enforcing that part of the subject arbitral award respecting costs. Given the respondent’s failed motion to extend time for leave to appeal, the balance of the application had to be heard separately and came before me on February 28, 2023.
[3] That part of the application heard by Chozik J. on October 3, 2022 was not opposed by the respondent. That part of the application heard by me was also not opposed by the respondent, which filed no responding material and did not attend the hearing.
[4] Magda de la Torre is not a party to this application, but delivered a notice of appearance, filed responding materials and purports to bring a “cross-application” as set out in the un-issued “notice of cross-application” included in her responding record. By way of that “cross-application”, Ms. de la Torre seeks a vesting order respecting the assets that form the subject matter of the application herein.
Facts
[5] The facts are not disputed:
a. the applicant and the respondent disagreed on the purchase price of certain shares in CKDX Radio Limited (the “Subject Shares”) that the respondent was obligated to sell to the applicant;
b. the parties agreed to submit their said dispute to arbitration and executed the applicable Submission to Arbitration in July 2017;
c. the arbitrator, retired Superior Court Justice Donald Cameron, released his arbitral award on March 25, 2022 (the “Arbitral Award”), his cost award on May 16, 2022 and his amendment to the cost award on June 9, 2022;
d. the notice of application herein was issued June 16, 2022;
e. Chozik J. rendered judgment enforcing the amended cost award on October 3, 2022;
f. Ms. de La Torre obtained a monetary judgment against the respondent in an unrelated civil proceeding on June 13, 2013, but took no steps to obtain a writ of seizure and sale until 2022;
g. by order dated February 15, 2022, Belobaba J. granted Ms. de la Torre leave to obtain a writ of seizure and sale and notice of garnishment;
h. the said order of Belobaba J. also enjoined the respondent from transferring or otherwise disposing of any of its assets, particularly the Subject Shares, “until Ms. de la Torre has taken steps to obtain the required writ or garnishment…such steps to be taken in a timely fashion”;
i. Ms. de la Torre obtained her writ of seizure and sale on July 19, 2022, but did not obtain a notice of garnishment; and
j. Ms. de la Torre was self-represented in the unrelated civil proceeding until 2020 and has been represented by counsel since then, including before Belobaba J. on February 15, 2022 and in the application herein.
Issue
[6] The sole issue to be decided on this application is whether I should enforce the Arbitral Award.
Law
[7] Sections 50(1), (2), (3), (5) and (8) of the Arbitration Act provide as follows:
50 (1) A person who is entitled to enforcement of an award made in Ontario or elsewhere in Canada may make an application to the court to that effect.
(2) The application shall be made on notice to the person against whom enforcement is sought, in accordance with the rules of court, and shall be supported by the original award or a certified copy.
(3) The court shall give a judgment enforcing an award made in Ontario unless,
(a) the thirty-day period for commencing an appeal or an application to set the award aside has not yet elapsed;
(b) there is a pending appeal, application to set the award aside or application for a declaration of invalidity;
(c) the award has been set aside or the arbitration is the subject of a declaration of invalidity; or
(d) the award is a family arbitration award.
(5) If the period for commencing an appeal, application to set the award aside or application for a declaration of invalidity has not yet elapsed, or if such a proceeding is pending, the court may,
(a) enforce the award; or
(b) order, on such conditions as are just, that enforcement of the award is stayed until the period has elapsed without such a proceeding being commenced, or until the pending proceeding is finally disposed of.
(8) The court has the same powers with respect to the enforcement of awards as with respect to the enforcement of its own judgments.
Decision
[8] I find that the Arbitral Award should be enforced.
Analysis
[9] Section 50(3) of the Arbitration Act is mandatory. It requires the court to grant judgment enforcing an arbitration award made in Ontario unless one or more of the enumerated circumstances applies. As none of those enumerated circumstances applies in the case-at-bar, I have no jurisdiction to refuse the requested enforcement.
[10] Notwithstanding this, Ms. de la Torre argues that I should refuse to enforce the Arbitral Award. She argues that her interest in the Subject Shares attaches to them notwithstanding the Arbitral Award and that she is entitled to an order vesting in her all right, title and interest in those shares.
[11] During oral argument, Ms. de la Torre’s counsel conceded the following:
a. the monetary judgment that she has against the respondent does not create a proprietary interest in the Subject Shares;
b. she has no interest in the Subject Shares other than that of an execution creditor; and
c. the Arbitral Award is equivalent to a court order for the transfer of the Subject Shares from the respondent to the applicant.
[12] However, she submits, the February 16, 2022 order of Belobaba J. had the effect of preventing any vesting of the applicant’s interest in the Subject Shares until such time as Ms. de la Torre’s interest therein could first attach.
[13] Ms. de la Torre’s counsel did not refer me to any authority, in either his written or oral arguments, to support that argument and I was unable to locate any such authority.
[14] There is, however, authority that goes against Ms. de la Torre’s argument.
[15] In Dhatt v. Beer, 2021 ONSC 770, Myers J. was faced with essentially the same argument.
[16] In Dhatt, the plaintiffs/buyers obtained a judgment for specific performance of an agreement of purchase and sale. The previous lawyers for the defendants/sellers obtained monetary judgment against the defendants/sellers and took steps to enforce that judgment by way of writs of seizure and sale. The plaintiffs and the said lawyers brought competing motions related to the issue of whether or not the plaintiffs’ purchase of the subject property was subject to the said writs.
[17] Myers J. defined the applicable issue as follows, at para. 73: “The issue before me is how to understand the relationship between the equitable interest of the plaintiffs as purchasers and subsequent holders of writs of seizure and sale that bind the vendors’ interests as of their dates”.
[18] In determining that the plaintiffs’ interest in the subject property was not subject to the writs of seizure and sale, Myers J. stated, at para. 74,
[i]n my view, the issue was resolved by the Court of Appeal in Kiminiak v Anderson, 1929 CanLII 367 (ON CA). In that case the Court of Appeal held that a vendor against whom a decree of specific performance may lie does not have an ongoing interest sufficient to enable a creditor to sell the land under a subsequent writ of seizure and sale. In other words, the creditor’s writ does not bind the purchaser’s equity.
[19] Myers J., after citing the Court of Appeal for Ontario in Mercado Capital Corporation v. Qureshi, 2018 ONCA 711, concluded his analysis as follows, at para 80,
[t]herefore, regardless of whether the purchaser has paid the full amount of the purchase price or whether a trust has fully formed, on the signing of an agreement of purchase and sale, the vendor conveys equitable title and makes herself amenable to the rules of equity and a decree of specific performance. The vendor no longer has the right to bind the land in a way to interfere with the purchaser’s entitlement to specific performance if later found appropriate by the court. Hence, subsequent writs of execution that bind the vendor’s interest, cannot attach to the purchaser’s equitable title or right to specific performance once the agreement of purchase and sale is signed.
[20] I wholeheartedly agree with the reasoning of Myers J. in Dhatt and adopt same in the case-at-bar.
[21] In the case-at-bar, it is neither disputed nor disputable that the applicant’s contractual right to acquire the Subject Shares arose years before Ms. de la Torre obtained her writ of seizure and sale against the respondent. Therefore, the respondent had no ability to bind the Subject Shares in a way that interfered with the applicant’s entitlement to specific performance of its agreement respecting the Subject Shares.
[22] There was no interest of the respondent in the Subject Shares to which Ms. de la Torre’s writ of seizure and sale could attach.
[23] Ms. de la Torre argues that the February 16, 2022 order of Belobaba J. made the applicant’s interest in the Subject Shares both subject and subordinate to her interest therein. Therefore, she says, she is entitled to a vesting order in the Subject Shares.
[24] I do not accept this argument.
[25] The only order made by Belobaba J. respecting the Subject Shares was the following,
- THIS COURT ORDERS that the Defendant and Judgment Debtor 1093641 Ontario Limited shall not transfer or otherwise dispose of any of its assets, in particular its 30% shareholding in CKDX Radio Limited, until Ms. de la Torre has taken steps to obtain the required writ or garnishment mentioned in paragraph I above, such steps to be taken in a timely fashion.
[26] Contrary to Ms. de la Torre’s argument, Belobaba J. made no orders – either expressly or by way of reasonable inference – respecting any claimed interest in the Subject Shares. To me, this makes perfect sense, as the issues of entitlement to the Subject Shares or the priorities among competing claims respecting them were not before him. In my view, Belobaba J. properly made an interim order preventing the respondent from divesting itself of its assets before Ms. de la Torre could put her order into effect.
[27] In my view, the February 15, 2022 order of Belobaba J. does not, in any way, create or vest in Ms. de la Torre any interest in the Subject Shares. Indeed, it does little more than grant her an indulgence to take long-overdue steps to enforce her monetary judgment against the respondent and a temporary non-dissipation order pending those steps being taken. Whatever enforcement steps that Ms. de la Torre took further to that order and the results thereof must still be in accordance with the law and consistent with applicable legal authority (e.g., Dhatt and Mercado Capital).
[28] There is no evidence or indication that the decision in Dhatt, the decision in Mercado Capital or any other relevant authority was put before Belobaba J. or that the applicable issues were argued before him to any relevant degree.
[29] Ms. de la Torre also argues that Dhatt is distinguishable on its facts and its dicta is therefore inapplicable to the case-at-bar.
[30] I do not accept this argument.
[31] Although Dhatt did deal with an agreement respecting the sale of real property, nothing in the decision expressly or implicitly limits the application of its stated legal principles to only those types of agreements. Furthermore, in my view, the various legal authorities cited by Myers J. and his reasoning apply as much to cases involving agreements for the sale personal property as they do to cases involving agreements for the sale of real property.
[32] In addition, the facts in the case-at-bar render Ms. de la Torre’s claimed interest in the Subject Shares even more remote than the judgment-creditor’s claimed interest in Dhatt, which claim Myers J. rejected.
[33] The final determination of the applicant’s interest in the Subject Shares (i.e., the Arbitral Award and the expiry of the applicable appeal period) was made months before Ms. de la Torre’s writ was issued. Furthermore, the applicant’s payment of the applicable purchase price for the shares (i.e., the setoff from the arbitrator’s costs award) was also effected well before she obtained that writ.
[34] Therefore, not only did the applicant acquire its beneficial interest in the Subject Shares before Ms. de la Torre’s writ of seizure and sale was issued, but it also fully perfected that interest by paying the purchase price before that writ was issued.
[35] Ms. de la Torre further submits that I should order that “this matter be referred back to Justice Edward Belobaba for adjudication, given his prior orders with respect to Ms. de la Torre’s right to enforce against [the Subject Shares]”.
[36] I do not accept this argument.
[37] As outlined above, the issues of entitlement to the Subject Shares or the priorities among competing claims respecting them was not before Belobaba J. on February 15, 2022 or, for that matter, at any time. Those issues were before me and were fully engaged and argued by the applicant and by Ms. de la Torre. In addition, contrary to Ms. de la Torre’s argument, Belobaba J. made no “prior orders with respect to Ms. de la Torre’s right to enforce against” the Subject Shares. Based on the applicable facts and law, I am prepared to make, and have made, the applicable findings in order to determine the matter.
[38] An order granting this alternate relief after I have fully heard and considered the application herein would not only result in a multiplicity of proceedings, which is contrary to the interests of justice (see: Fatahi-Ghandehari v. Wilson, 2022 ONCA 858, at para. 17), but would also create an impermissible risk of inconsistent findings. Indeed, I view Ms. de la Torre’s request to be the height of improper forum shopping.
[39] There is no legitimate basis for granting the alternate relief she has requested.
Summary & Disposition
[40] The provisions of s. 50(3) of the Arbitration Act are mandatory and require that the court shall enforce an arbitral award unless any of the enumerated circumstances applies. None apply in the case-at-bar.
[41] Ms. de la Torre’s writ of seizure and sale does not constitute a sufficient basis to disregard the mandatory wording of s. 50(3) of the Arbitration Act or to otherwise refuse the requested enforcement of the Arbitral Award. Her claimed interest in the Subject Shares could not have bound those shares in any way that interferes with the applicant’s entitlement to them. Indeed, her claimed interest does not attach to the Subject Shares.
[42] Judgment shall therefore issue enforcing the Arbitral Award, except those portions already dealt with by way of the judgment of Chozik J. dated October 3, 2022.
[43] While I sympathize with Ms. de la Torre, her failure to enforce her judgment between 2013 and 2022 cannot be laid at the feet of the applicant and there is no legitimate reason to interfere with the applicant’s rights respecting the Subject Shares.
Costs
[44] The applicant’s costs outline seeks the all-inclusive amount of $13,673.00 on a full indemnity basis. In oral submissions, the applicant’s counsel requested the all-inclusive amount of $8,330.00 on a partial indemnity basis. He assured me that these amounts relate only to the issues raised by Ms. de la Torre; the remaining issues, including the related costs, having been dealt with by Chozik J. on October 3, 2022.
[45] Ms. de la Torre, who did not provide a costs outline, advised that she is seeking no costs for this application and argued that none should be awarded to the applicant either, as the issue raised herein was “novel”. Alternatively, she submits, the all-inclusive amount of $3,000.00 is more appropriate “as a balance between the applicant’s costs entitlement and what she has had to suffer in this whole piece”.
[46] I do not accept Ms. de la Torre’s argument that the applicant should be denied its costs because the application herein dealt with a “novel issue”. The fact that there appear to be no previous court decisions “on point” in the matter does not make the matter analogous to so-called “public interest litigation”, where the court might exercise its discretion to deny a successful party its costs (see: Bilodeau v. Ontario (Minister of Natural Resources), 2022 ONSC 4275, at paras. 4-6).
[47] Further, and in any event, as outlined above, the issues raised in this application were not novel. There is applicable legal precedent.
[48] The applicant was successful on this application and is entitled to its costs. There being absolutely no basis for any elevated scale of costs, the applicant’s costs shall be on a partial indemnity scale.
[49] Respecting quantum, given, among other things, the lack of complexity of the issues in this matter and the fact that there were no out-of-court examinations, I find the claimed amount of $8,330.00 based on 20.2 hours of counsel time to be excessive. However, I do not accept Ms. de la Torre’s argument that $3,000.00 is the appropriate amount. Among other things, as outlined above, “what she has had to suffer in this whole piece” should not be laid at the applicant’s feet.
[50] Taking into consideration the factors set out in rule 57.01(1) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, including, without limitation, the lack of complexity of this application, the experience of counsel, the rates charged, the time spent and the conduct of the parties (particularly, the positions taken on the issues), I find the all-inclusive amount of $6,500.00 to be fair and reasonable in the circumstances.
[51] Therefore, Ms. de la Torre shall pay to the applicant its costs of this application on a partial indemnity basis, which costs are fixed in the all-inclusive amount of $6,500.00 and payable within 30 days of today’s date.
C. Chang J.
Released: March 21, 2023
COURT FILE NO.: CV-22-1220-0000
DATE: 2023 03 21
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
EVANOV COMMUNICATIONS INC.
Applicant
- and -
1093641 ONTARIO LIMITED
Respondent
REASONS FOR DECISION
C. CHANG J.
Released: March 21, 2023