Court File and Parties

COURT FILE NO.: 22-0084 DATE: July 12, 2023 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: ESTATE OF HAROLD JAMES SAUNDERS GERALD ANDREW SAUNDERS, Applicants – and – DAVID GRANT ISAAC, Respondent

Counsel: Charles Hammond, for the Applicants Self Represented, for the Respondent

Reasons for decision

ABRAMS, J

Introduction

[1] The Estate of Harold James Saunders (“Harold’s Estate”) and Gerald Andrew Saunders (“Mr. Saunders”) (collectively the “applicants”) bring this application for a declaration that David Grant Isaac (the “respondent”) has no claim to an interest in the property legally described as LOT 16-17 BLK 19 PLAN 67; PART LOT 15, A BLK 19 AS IN 43B2405; Brockville (the “property”).

[2] This application arises out of the respondent’s alleged failure to close a real estate transaction for the purchase and sale of the property.

[3] The property was the subject of an agreement of purchase and sale dated July 20, 2021 (the “agreement of purchase and sale”), in which Mr. Saunders was the seller and the respondent was the purchaser.

[4] The respondent allegedly failed to close the transaction on the agreed upon closing date of September 30, 2021.

[5] The applicants contend that a declaration that the respondent has no interest in the property is necessary so that Mr. Saunders can proceed with its sale unencumbered to a third party.

Background

[6] The property was previously owned by Margaret Lillian Saunders. Ms. Saunders passed away testate in July 2014. Her two sons, Harold James Saunders (“Harold”) and Mr. Saunders were the beneficiaries under her Will dated November 9, 1988. [1]

[7] The property was then transferred and held in the name of the Estate of Margaret Lillian Saunders, deceased. Harold died intestate in April 2021. Mr. Saunders was the sole beneficiary under Harold’s Estate by virtue of the intestacy.

[8] The property was listed for sale on the MLS in or about July 2021. Offers were held and reviewed on July 20, 2021. The respondent’s offer was accepted that day. [2]

[9] Originally, the respondent was represented by legal counsel on the purchase and sale of the property. [3]

[10] The respondent, through counsel, took the position that the property would have vested in the two beneficiaries (Harold and Mr. Saunders) under the Estates Administration Act, 3 years after the death of Margaret Lillian Saunders, deceased. [4]

[11] To address the potential vesting of the property, the solicitor for the seller, Ms. Trea Tuck (“Ms. Tuck”), and the solicitor acting for the respondent at the time, discussed obtaining a Vesting Order to vest title in the surviving beneficiary, being Mr. Saunders. [5]

[12] On August 20, 2021, the respondent’s solicitor requisitioned a Vesting Order in Mr. Saunders’ name. [6]

[13] Mr. Saunders complied with the requisition. Thus, a Vesting Order was obtained from Johnston J. of the Superior Court of Justice, Brockville, dated August 25, 2021 (the “Vesting Order”). The Vesting Order vested ownership of the property in Mr. Saunders name.

[14] The Vesting Order was then registered on title to the property. [7]

[15] At that stage, any issue with respect to the ability of Mr. Saunders to transfer the property had been resolved.

[16] However, after the Vesting Order was obtained, the respondent advised that he was no longer represented by counsel and that he would be representing himself on the purchase and sale. The respondent identified himself as a lawyer and advised that he was in the process of securing the Real Estate Rider on his LAWPRO coverage. [8]

[17] In emails from the respondent to Mr. Saunders’ solicitor, the respondent asserted that Mr. Saunders had no authority to enter into the agreement of purchase and sale or to convey title to the property, and that the Vesting Order was “invalid”. [9] The respondent proceeded to serve a Notice of Appeal with respect to the Vesting Order. Notably, the appeal was never perfected.

[18] The parties had agreed to a closing date of September 30, 2021. On that date, Mr. Saunders was ready, willing, and able to close the transfer of the property. The property was vacant, available for immediate possession, and the keys were available in a lockbox attached to the property. Mr. Saunders’ solicitor emailed to the respondent the executed closing documents along with her firm’s void trust cheque. [10]

[19] Upon attempting to register the transfer in the electronic Land Titles System (“Teraview”), Ms. Tuck discovered that the respondent had failed to enter his information into Teraview. Further, he failed to submit his signed closing documents and pay the balance of the purchase price. [11]

[20] The purchase and sale did not close, and no extension was given. [12]

[21] Since the failed closing on September 30, 2021, Mr. Saunders has made attempts to alleviate the respondent’s concerns and complete the sale. All these attempts have been unsuccessful. For example, on October 13, 2021, Mr. Saunders presented a proposal to the respondent wherein the property would be sold to him pursuant to a new agreement of purchase and sale on the same terms. Moreover, numerous efforts were undertaken by Mr. Saunders to alleviate any concerns the respondent had with Mr. Saunders’ legal standing to transfer the property, including:

(a) Applying to the Court to amend the Vesting Order to the respondent’s satisfaction; specifically:

i. Including Harold’s interest in the property as an asset of his estate for the purposes of calculating probate fees;

ii. Providing a personal undertaking from Ms. Tuck that the requisite probate fees for Harold’s estate be paid;

iii. Obtaining title insurance, at Mr. Saunders’ expenses; and

iv. Holding the sale proceeds in trust until probate is granted.

[22] The respondent refused to accept these solutions. [13] Rather, the respondent insisted that a Certificate of Appointment of Estate Trustee without a Will in the Estate of Harold James Saunders, deceased, was required in order to transfer the undivided one-half interest of his interest in the property. [14]

[23] Once the Certificate of Appointment was issued, the solicitor for Mr. Saunders contacted the Respondent and once again offered the property for sale to him on the same terms as the original agreement of purchase and sale. [15] The respondent rejected the proposed closing date and did not offer an alternative. [16]

[24] When a reasonable deadline for the respondent to set a closing date had passed, the property was re-listed for sale on the MLS. [17]

[25] An unconditional third party offer to purchase the property was accepted on or about July 11, 2022, with a closing date of September 1, 2022 (the “July 2022 agreement”). [18]

[26] Subsequently, the respondent emailed a Statement of Claim, filed in the Superior Court of Justice, Toronto, as CV-22-00684146-000, in relation to the property (the “Toronto Action”) to Ms. Tuck and the realtors. [19]

[27] As a consequence of receiving notice of the Statement of Claim in the Toronto action, the parties to the July 2022 Agreement entered into a mutual release, terminating the July 2022 Agreement. [20]

[28] Subsequent to the mutual release being executed and delivered, Ms. Tuck sent a letter to the respondent advising him that the seller was again in a position to complete the purchase and sale of the property to him. This was the third time that Mr. Saunders attempted a sale to the respondent after the failed closing on September 30, 2021.

[29] Enclosed with the letter was a draft order for the respondent to consider and a request that if the terms of the order were not acceptable, that he propose terms acceptable to him. To date, there has been no response to the letter by the respondent. [21]

[30] In the circumstances, the property has been vacant since the death of Harold James Saunders, deceased. Insuring the vacant property has been difficult and costly. Mr. Saunders lives in Nova Scotia and desires the property to be sold. [22] [23]

Issue

[31] The sole issue for the Court to determine on this application is whether the respondent has a claim to an interest in the property.

Parties Positions

[32] The applicants contend that the respondent failed to close the transaction and in doing so, breached the agreement of purchase and sale. Further, his failure to close the transaction was a fundamental breach of the agreement of purchase and sale, amounting to a repudiation of the contract, which allows Mr. Saunders, being the innocent party, the right to treat the contract as at an end.

[33] The respondent argues that he never failed to close the real estate transaction. Rather, he contends that Mr. Saunders was never in a position to convey title in accordance with the agreement of purchase and sale. The respondent’s factum repeats this contention. Otherwise, the balance of his factum is not responsive to the issue.

Analysis

[34] I would grant the relief requested by the applicants, for the following reasons.

[35] Mr. Saunders was ready, willing, and able to close the transaction on the mutually agreed upon date of September 30, 2021. To that end, Mr. Saunders tendered on the respondent and provided copies of the requisite executed documents.

[36] The respondent; however, was not ready, willing, and able to close the transaction. First, the solicitor for Mr. Saunders was unable to register the transfer in Teraview as the respondent had failed to enter his information into the system. Second, the respondent also failed to submit his signed closing documents and pay the balance of the purchase price.

[37] In my view, the respondent’s rationale for failing to close the transaction was not warranted: That Mr. Saunders did not have the legal right to transfer full legal title to the property. This even though Mr. Saunders obtained the Vesting Order, vesting title in the property to him, in response to the respondent’s solicitor’s requisition. Remarkably, the respondent subsequently challenged the validity of the Vesting Order.

[38] Johnston J. exercised his discretion pursuant to Section 100 of the Courts of Justice Act to vest the property in the name of Mr. Saunders. Vesting orders may be granted where a separate, valid claim to ownership is made out. Our Court of Appeal has held that a vesting order is a discretionary order that may properly be issued where a party can establish a separate, valid claim to possession or ownership by virtue of statute, common law, or equity. [24]

[39] What is clear is that ownership of the property rests solely with Mr. Saunders, as the sole beneficiary of the Harold’s estate. In these circumstances, Johnston J. was well within his discretion to vest ownership of the property in Mr. Saunders.

[40] Further, while the respondent served a Notice of Appeal concerning the Vesting Order, the appeal was never perfected. Accordingly, there is no juridical basis for the respondent’s argument that the Vesting Order should not have been granted.

[41] In summary, the respondent had no right not to close on the date fixed for closing. Given that the respondent failed to close, Mr. Saunders was entitled to terminate the agreement of purchase and sale.

[42] In the alternative, in the event the agreement of purchase and sale was not repudiated, which it clearly was, the respondent would nevertheless not be entitled to an award for specific performance, for two reasons.

[43] First, in Semelhago v. Paramadevan, the Supreme Court of Canada established the contemporary principle that specific performance should not be granted as a matter of course absent evidence that the property is unique to the extent that its substitute would not be readily available. [25] In this case, the record before me discloses no evidence that the property is somehow unique.

[44] Second, to award specific performance, a purchaser must be ready, willing, and able to close the purchase. [26] For those reasons set out above, the respondent was not ready, willing, and able to close the purchase.

[45] For these reasons, the respondent would, at best, have a claim for damages, but not an Order requiring the transfer of the property to him. He is free to pursue his claim for damages in the Toronto action, if he chooses to do so.

Conclusion

[46] While it is unclear what the respondent’s motivations are, the Toronto action and his continued efforts will, in my view, frustrate the sale of the property.

[47] In the result, an Order shall issue that the respondent has no interest in the property.

[48] If the parties are unable to agree on the issue of costs, written submission shall be filed within 30 days consisting of no more than 10 pages, double spaced, one side of the page, 12-point font or larger, along with any bill of costs and offers to settle.

The Honourable Mr. Justice B. W. Abrams Released: July 12, 2023

Footnotes

[1] Affidavit of Dorothy June Wade, sworn August 23, 2021, Tab 2 of the Application Record (“Wade Affidavit”), PDF pp.14-15, at paras 5-8.

[2] Wade Affidavit, PDF p.13, at para 4.

[3] Wade Affidavit, PDF pp.14-15, at paras 12-19.

[4] Wade Affidavit, PDF pp.14-15, at paras 8 and 12-13.

[5] Wade Affidavit, PDF pp.14-15, at paras 12-13.

[6] Wade Affidavit, PDF p.15, at para 13.

[7] Wade Affidavit, PDF p.15, at para 17.

[8] Wade Affidavit, PDF p.15, at para 19.

[9] Wade Affidavit, PDF p.18, at para 43.

[10] Wade Affidavit, PDF p.16, at paras 23-24.

[11] Wade Affidavit, PDF p.16, at paras 25-26.

[12] Wade Affidavit, PDF p.16, at para 27.

[13] Exhibits “T”, “U” and “S” to the Wade Affidavit.

[14] Wade Affidavit, PDF p. 17, at para 28.

[15] Wade Affidavit, PDF p.17, at paras 34-35.

[16] Wade Affidavit, PDF p.18, at para 36.

[17] Wade Affidavit, PDF p.18, at para 38.

[18] Wade Affidavit, PDF p.18, at para 38.

[19] Wade Affidavit, PDF p.18, at paras 39-40.

[20] Affidavit of Jamie MacPhee, sworn September 22, 2022, Tab 2 of the Supplemental Application Record (“MacPhee Affidavit”) PDF p.9, at para 4.

[21] MacPhee Affidavit, PDF p.10, at paras 6-10.

[22] Wade Affidavit, PDF p.18, at para 42.

[23] MacPhee Affidavit, PDF p.10, at para 12.

[24] Chippewas of Sarnia Band v. Canada (Attorney General), [2000] O.J. No. 4804 (C.A.), at para. 281

[25] Semelhago v. Paramadevan, [1996] 2 S.C.R. 415, at para. 22.

[26] Time Development Group Inc (In trust) v Bitton, 2018 ONSC 4384 at para.53.