Real Estate Law - SCJ

This summary trial decision concerns a failed real estate transaction.

The court found that the defendant, Qura Tul Ain, breached a binding agreement to purchase the plaintiff Ammar Ahmad’s home.

The court rejected the defendant’s arguments and crossclaim against her real estate brokerage, finding no evidence of bad faith, concealment, or breach of fiduciary duty.

Damages were awarded to the plaintiff for the difference in sale price, carrying costs, repairs, legal fees, and rental costs, but not for moving expenses or real estate commission.

The total damages awarded were $386,460.60.

The plaintiff mortgage broker, OMJ Mortgage Capital Inc. (OMJ), sued the defendant, King Square Limited (KSL), for commissions on three loans extended by Firm Capital Corporation (FCC).

OMJ claimed commissions on two loans to KSL and one loan to King Square Hotel Corporation (KSHC), arguing they were further advances under an original loan commitment or covered by the holdover period of their commission agreement.

KSL contended the loans were new and outside the agreement's terms, and that it was not liable for a loan to KSHC, a separate entity.

The court found the two loans to KSL were further advances under the original commitment, entitling OMJ to commissions, and that KSL breached its duty of good faith by not disclosing these advances.

However, the court dismissed OMJ's claim for commission on the KSHC loan, finding it was a distinct loan not covered by the agreement's terms or the definition of "Borrower."

The plaintiff, an untitled spouse, sought partial summary judgment to declare a condominium corporation's lien and power of sale proceedings null and void against her, arguing she was not properly notified as required by the Family Law Act.

The court found that the condominium corporation failed to make reasonable inquiries to determine if the unit was a matrimonial home and to provide notice to the untitled spouse at her registered address before initiating lien and power of sale proceedings.

Consequently, the lien was deemed invalid against the plaintiff, and associated legal and collection costs were not recoverable from her.

Ontario corporations sought to discharge notices of unsecured interests registered on title to their Toronto properties by an individual who was engaged in family law litigation in California against the corporations’ owner.

The respondent sought a stay of the application, arguing forum non conveniens and requesting that the Ontario court decline jurisdiction in favour of the California proceedings.

The court held that by filing a Notice of Appearance the respondent had attorned to the jurisdiction of the Ontario court, rendering forum non conveniens inapplicable.

The respondent had not obtained recognition or enforcement of any foreign order and the corporate applicants were not parties to the foreign litigation.

The court dismissed the motion to stay and granted the application discharging the notices from title.

A condominium corporation applied for declarations and compliance orders requiring a unit owner to pay longstanding common expense arrears and sought to characterize the arrears as damages under s. 134 of the Condominium Act, 1998 so they could be added to common expenses and enforced by a priority lien.

The owner did not dispute that arrears were owed, but a mortgagee intervened, arguing the corporation could not revive expired lien rights after failing to register liens within the three‑month period required by s. 85(2).

The court held that s. 134 cannot be used to circumvent the statutory lien regime or revive expired lien rights in a manner that would prejudice prior mortgagees who had received no notice.

While the owner was ordered to pay the arrears with interest, the court refused to declare the arrears as damages capable of being added to common expenses and enforced by a new priority lien.

The equities favored the mortgagee because the condominium corporation failed to preserve its statutory lien rights.

In complex litigation arising from a MURB real estate investment and foreclosure action, investor defendants sought a preliminary determination that the development had never achieved a cash flow positive position before the foreclosure proceeding was commenced.

They argued that accounting adjustments relied upon by the developer improperly imputed notional rental income and altered expenses, which if rejected would demonstrate that the mortgage was never in default.

The court held that the competing accounting methodologies, contractual interpretation of the offering memorandum and cash flow guarantee, and disputed factual issues regarding market conditions, vacancies, and management could not be resolved summarily.

These matters required full examination through the reference previously ordered in the case management process.

A commercial tenant sought relief from forfeiture after the landlord terminated the lease and changed the locks due to rent arrears exceeding $44,000.

The tenant argued it withheld base rent because it expected a credit for overpaid additional rent and had not received an accounting.

The court held that the lease permitted immediate re-entry for non‑payment and that the tenant was a serial defaulter with significant arrears.

Relief from forfeiture is discretionary and only granted where forfeiture would be inequitable or unjust.

The court found nothing inequitable in allowing the landlord to enforce its contractual rights and dismissed the application.

Following a successful application for damages arising from the wrongful termination of a commercial lease, the court determined the appropriate costs award.

The successful tenant sought substantial indemnity costs exceeding $28,000 after obtaining damages and return of a security deposit totaling $49,735 following adjustment by the Court of Appeal.

The court reviewed the factors under Rule 57.01 of the Rules of Civil Procedure, including proportionality, reasonable expectations of the parties, and the effect of a prior offer to settle.

Although the tenant’s offer did not meet the strict requirements of Rule 49.10, the court considered it under Rule 49.13 and found the landlord should have reasonably accepted it.

Costs were awarded partly on a substantial indemnity scale for the hearing and partially on a partial indemnity basis for the remaining work.

A law firm sought default judgment for unpaid legal fees arising from representation of the defendant and related corporations in environmental regulatory appeals.

The defendants were noted in default and the allegations in the pleadings were deemed admitted.

Evidence established that the defendants owed substantial unpaid accounts and had engaged in asset transfers through corporations and a spouse to shield property from creditors.

The court found the transactions constituted fraudulent conveyances and that the corporations functioned as alter egos of the individual defendant.

The court pierced the corporate veil in reverse, voided the impugned conveyance and mortgage, and allowed judgment to be enforced against the properties.

A real estate brokerage and agent sought summary judgment for unpaid commission arising from a listing agreement containing a 60‑day holdover clause.

The homeowners cancelled the listing and shortly thereafter re‑listed with another agent at a substantially lower commission, later selling the property to purchasers who had previously made an offer during the original listing period.

The court assessed credibility on the summary judgment record and found the homeowners’ explanations for cancelling and re‑listing inconsistent and lacking credibility.

The court concluded there was no genuine issue requiring a trial and granted judgment for the commission amount plus interest.

The request for punitive damages based on alleged civil conspiracy with the purchasers was rejected for lack of evidence of an independent actionable wrong.

The plaintiffs brought certification motions under the Class Proceedings Act, 1992 relating to falling balcony glass panels from three condominium developments in Toronto.

Owners and residents alleged negligence, nuisance, and breach of contract against developers, builders, and related entities after balconies were sealed and glass panels replaced following safety concerns.

The defendants consented to certification subject to three caveats regarding class definition wording, certification of an aggregate damages issue, and the viability of a collateral contract claim against a developer.

The court certified the actions as class proceedings, rejecting the proposed change to the class definition and permitting the collateral contract claim to proceed as a common issue.

However, the court declined to certify a proposed aggregate damages issue due to appellate authority interpreting s. 24(1)(c) of the Class Proceedings Act as prohibiting random sampling of class members to determine damages.

Following a nine‑day trial concerning a neighbour dispute involving alleged flooding, trespass, and harassment, the defendants to the counterclaim successfully defended the counterclaim and obtained no damages against them.

The court found that flooding on the neighbouring property had not been exacerbated by the construction of a private golf course and that the counterclaimants failed to prove liability.

On the subsequent costs decision, the successful parties relied on a Rule 49 offer to settle which they had beaten at trial.

The court concluded the matter should never have proceeded to a lengthy trial and that the counterclaimants’ conduct made the litigation unnecessarily protracted and complex.

Costs were awarded largely in accordance with the successful parties’ proposal, including substantial indemnity costs after the offer date.

The defendant moved for security for costs against the plaintiff based on outstanding cost awards and an allegation that the action was frivolous and vexatious.

The plaintiff alleged a beneficial ownership interest in family lands and resisted the motion by asserting impecuniosity and that the claim was not plainly devoid of merit.

The court held that while unpaid cost awards satisfied the threshold under Rule 56.01(1)(c), the plaintiff established genuine impecuniosity and the claim met the low threshold of not being plainly devoid of merit.

Accordingly, ordering security would unjustly terminate a potentially meritorious claim.

The court also addressed costs following the discontinuance of a corporate co‑plaintiff and awarded costs of the action and motion against that entity.

At a status hearing under Rule 48.14(13) of the Rules of Civil Procedure, the defendants sought dismissal of the plaintiffs’ action for delay arising from a 2007 lawsuit relating to the purchase of a retirement home and alleged wrongdoing by vendors, real estate agents, and the plaintiffs’ former solicitor.

The court reviewed the procedural history, including delays in scheduling examinations for discovery and counsel availability, and applied the two‑part test requiring the plaintiffs to explain the delay and demonstrate an absence of prejudice to the defendants.

Although the litigation had progressed slowly and one plaintiff was medically incapable of discovery, the court found this was the first status hearing, the plaintiffs were not in breach of court orders, and a litigation timetable had been proposed.

The court concluded the plaintiffs should be given a “lifeline” to proceed.

A timetable was ordered requiring the trial record to be passed within twelve months.

The defendant moved to vacate Certificates of Pending Litigation obtained by the plaintiff on an ex parte basis over two properties.

The court held that a party seeking ex parte relief must make full and frank disclosure of all material facts.

The plaintiff failed to disclose a prior divorce settlement in which he had disclaimed any trust interest in the properties and misrepresented the contents of a lawyer’s letter regarding potential sale of the land.

These omissions and misrepresentations were material and could have influenced the original ex parte decision.

The court therefore set aside the order permitting the certificates, but required that 50% of the gross sale proceeds of the properties be paid into court as security pending resolution of the ownership dispute.

The plaintiff sought specific performance of an agreement of purchase and sale for a gas station property after the vendor forcibly repossessed the property while the purchaser was in possession pending final closing.

The defendant argued the agreement was unenforceable due to misidentification of the vendor, non‑payment of deposits, unpaid supplier accounts, lack of readiness to close, and absence of uniqueness of the property.

The court found the misidentification of the vendor was an inadvertent drafting error, that the plaintiff had substantially paid the required deposits and complied with the agreement, and that the vendor had no justification to retake possession.

The property was sufficiently unique to justify specific performance and the equities favoured the purchaser.

The court ordered specific performance and directed a reference to account for deposits, operating profits, and inventory values prior to closing.

The defendants brought a motion to dismiss or stay an action concerning alleged construction deficiencies in a new home.

The plaintiff had previously pursued warranty claims through the statutory regime under the Ontario New Home Warranties Plan Act and unsuccessfully litigated the issues before the Licence Appeal Tribunal and on appeal.

The court held that the action attempted to relitigate the same warranty issues and was barred by issue estoppel, res judicata, abuse of process, and collateral attack on tribunal decisions.

In addition, the defendants applied for an order declaring the plaintiff a vexatious litigant based on a long history of repetitive and abusive litigation conduct.

The court granted the application and imposed restrictions requiring leave of the court before the plaintiff could commence further proceedings against the defendants.

The plaintiffs brought a motion seeking a stay of an order that had discharged a certificate of pending litigation obtained ex parte, pending determination of their motion for leave to appeal.

The prior order discharged the certificate on the basis that the plaintiffs failed to provide full, fair, and frank disclosure, including failing to disclose earlier related proceedings.

Applying the test analogous to an interlocutory injunction—serious issue, irreparable harm, and balance of convenience—the court considered the procedural history and an existing consent order preserving the status quo.

The court concluded that maintaining the status quo pending the leave to appeal motion was appropriate to avoid prejudice to either side.

The order discharging the certificate was stayed, subject to limited exceptions allowing the defendants to deal with specified properties, and a scheduled summary judgment motion was adjourned pending the leave motion.

A dispute arose from a homemade commercial farm lease containing inconsistent provisions regarding the lease term.

The tenants sought declarations regarding the lease term, access to the property, and injunctions relating to interference with their farming operations, while the landlords counter‑applied for a declaration that the lease had ended or was properly terminated for cause.

The court applied principles of contractual interpretation, including the dominant purpose of the agreement and consideration of surrounding circumstances, to resolve ambiguity between a clause stating a two‑year term and another describing the lease as a “one year lease.” The court concluded that the lease term ran from December 1, 2011 to November 1, 2013.

However, the tenants’ deliberate non‑payment of rent for several months constituted a breach entitling the landlords to terminate the lease, and the tenants were ordered to pay arrears and vacate the premises within a defined period.

The plaintiff brought a motion to certify a proposed class action for settlement purposes arising from allegations that condominium purchasers were overcharged for development charges by the developers.

The parties negotiated a settlement establishing a $578,000 fund to compensate class members, with refunds representing approximately 52–73 per cent of the disputed charges.

The court held that the certification criteria under the Class Proceedings Act, 1992 were satisfied even in the settlement context.

The court further found that the negotiated settlement was fair, reasonable, and in the best interests of the class despite a single objection seeking full restitution.

Class counsel’s contingency fee of $144,500 (25 per cent of the settlement fund) was approved as reasonable given the work performed, litigation risks, and results achieved.