Court File and Parties

COURT FILE NO.: CV-23-1200 DATE: 20231005 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Sheyar Ahmad, Applicant AND: Robert John Estacio Marques, Respondent

BEFORE: The Honourable Madam Justice M.E. Vallee

COUNSEL: Amanpreet Nagpal, Counsel for the Applicant Greg Weedon, Counsel for the Respondent

HEARD: October 5, 2023

Ruling

[1] The applicant (purchaser) brings this motion for an order granting leave to register a certificate of pending litigation (CPL) against a property municipally known as 360 King Street, King, Ontario. The respondent (seller) opposes the motion for a number of reasons, one of which is that the purchaser failed to close the transaction because he did not have financing. Therefore, he does not have an interest in the land.

The Legal Test

[2] There is no disagreement about the applicable test. In order to obtain a certificate of pending litigation, the requesting party must have a triable claim to an interest in the land. He does not have to show that he will succeed. Certain equitable considerations also apply.

[3] In this matter, they are:

a. whether the property is unique; b. the ease or difficulty in calculating damages; c. whether damages would be satisfactory compensation; d. the presence or absence of a willing purchaser; and e. the harm to both parties if the certificate is or is not granted.

[4] The onus is on the respondent to show that there is no triable issue.

Background

[5] The parties entered into an agreement of purchase and sale on August 26, 2022. Schedule C sets out some terms including this one:

In any case, if this transaction is not gone through because of Seller’s lack of documents or any reason, then seller will return the money back immediately or within 3 days. In the case, if the seller will fail to return the money back then the buyer can put lean/claim [sic] back on this property. [Emphasis added]

[6] There is no dispute that the purchaser waived all of the conditions, including financing.

[7] The purchaser had difficulty obtaining financing. The seller granted four extensions. Additional deposits were paid. The ultimate closing date was February 3, 2023. On that date, the purchaser still did not have financing. The seller treated the agreement as having been breached. The seller kept the deposits totaling $255,000.

The Purchaser’s Position

[8] The purchaser states that the threshold for granting a CPL is low. He states that the language in Schedule C entitles him to the return of the deposits because it refers to the transaction’s having not been completed for any reason. The reason can be related to him or the seller.

[9] The purchaser states that the property is unique to him for his personal use.

[10] The purchaser states that the seller breached the agreement because although the seller signed the agreement, the spousal consent part of the agreement was not signed. Accordingly, there was no spousal consent.

[11] The purchaser states that the seller refused to cooperate in good faith with the last extension request.

[12] The purchaser relies on Peppe’s, The Pizza Factory Ltd. v. Stacey et al., 1979 Can LII 1682 for his assertion that a claim for a deposit can be the basis for an interest in land. Should the court find that the buyer is entitled to specific performance and if the land is subject to an agreement of purchase and sale with a different buyer, there will be great prejudice.

Analysis

[13] Pepe’s concerned a lease and deposits that were made regarding a lease. It can be distinguished from this matter.

[14] The closing date was February 3, 2023. The purchaser delayed in bringing this motion. It was served over six months later, on August 25, 2023.

[15] A blank line on an agreement of purchase and sale under the heading “Spousal Consent” is not evidence that consent was required but was not given. There is no evidence that spousal consent was required for this transaction. The seller states that it is a rental property, not a matrimonial home.

[16] The seller extended the closing date several times. The agreement does not require him to continue to offer extensions.

[17] Interpretation of the clause in Schedule C is not before the court. It is not well drafted; however, a requirement that a seller refund deposits if the purchaser breaches an agreement would be unusual.

[18] The buyer has not provided any specific information about the property to support his position that it is unique. Simply stating that it is unique to him for his purposes is not adequate.

[19] The seller states that he is in debt and cannot pay the carrying costs for the property. This was his reason for selling the property. If it is subject to a CPL, he will be prejudiced because he needs to sell it.

[20] Aside from specific performance, the buyer’s claim is for an ascertainable amount, being the amount of the deposits. At examination, he stated that he would be satisfied if he received the deposits plus interest. The amount would be easy to calculate. The seller stated that this amount could be held back from future sale proceeds.

[21] There is no willing purchaser who is ready, willing and able to complete the transaction. The buyer could not close the transaction. There is no evidence that he can close the transaction now.

Conclusion

[22] Taking all of the above into consideration, the purchaser’s motion for a CPL is dismissed; however, the total amount of the deposits together with pre-judgment interest from February 3, 2023 to the date of a future sale shall be held back from the sale proceeds by the solicitor for the seller. The solicitor shall invest the funds so that they continue to earn interest. The type of investment shall be at the solicitor’s discretion.

Costs

[23] Only the seller’s counsel provided a costs outline as required by the rules.

[24] If the parties are unable to agree on costs, they may file brief written submissions, no more than 3 pages of text (14 pt. font size, regular 1” margins, 1.5 spacing) exclusive of a costs outline and any offers to settle. The seller’s submissions are due within 2 weeks of the release date of this decision and the buyer’s within a further week. The costs outline shall identify all lawyers on the file, their respective years of call and rates actually charged to the client. It shall also provide calculations on a costs rate including the rate applied, and if sought, the same on a full recovery costs basis. A breakdown of the hours spent on specific aspects of the work shall be provided. A breakdown of disbursements shall be provided with copies of receipts if applicable. If the parties intend to rely on caselaw, copies or hyperlinks shall be provided.

[25] All costs submissions shall be uploaded to Caselines. Counsel shall advise my judicial assistant when the submissions are uploaded. If no submissions are uploaded after the buyer’s submissions are due, costs will be deemed to have been settled between the parties.

VALLEE J. Date: October 5, 2023