Sep 1, 2020

COURT OF APPEAL SUMMARIES (August 24 – 28, 2020)

Dhatt v. Beer, 2020 ONCA 545 (CanLII)

[Zarnett J.A. (Motion Judge)]

Counsel:

David P. Lees and Zachary Silverberg, for the moving parties

Arnie Herschorn and Sepideh K. Nassabi, for the responding parties Mandeep Dhatt and Kulwinder Dhatt

Serena L. Rosenberg, for the responding parties Jay Brijpaul and Re/Max West Realty Inc., Brokerage

Keywords: Breach of Contract, Real Property, Agreements of Purchase and Sale of Land, Remedies, Specific Performance, Civil Procedure, Stay Pending Appeal, Rules of Civil Procedure, Rule 63.02, M & M Homes Inc. v. 2088556 Ontario Inc., 2020 ONCA 134, Zafar v. Saiyid, 2017 ONCA 919, Khimji v. Dhanani (2004), 69 O.R. (3d) 790 (C.A.), Circuit World Corp. v. Lesperance (1997), 33 O.R. (3d) 674 (C.A.)

Facts:

The trial judgment declared that an Agreement of Purchase and Sale of land between the appellants as vendors and the respondents as purchasers was valid and binding. It awarded the respondent purchasers specific performance of the Agreement, gave the appellant vendors 120 days from the date of the decision to vacate the Property, and dismissed a third party claim that the appellants had brought against their real estate agent.

The trial judgment awarded costs of the action to the purchasers and agent, to be paid (deducted) from the purchase price.

A subsequent order of the trial judge gave directions concerning the carrying out of the trial judgment. Among other things, it appointed a lawyer for the appellants with respect to the sale of the Property and gave him authority to take certain steps relating to their obligations to complete the sale, ordered the appellants to forthwith deliver up vacant possession of the Property, and granted leave to a firm of bailiffs to secure vacant possession of the premises by August 31, 2020. The appellant vendors appealed from the trial judgment and the subsequent order and moved to stay the orders pending appeal.

Issues:

Should the judgment ordering specific performance be stayed pending appeal?

Holding:

Motion dismissed.

Reasoning:

No. The overarching consideration in whether to grant an application for a stay pending appeal is whether doing so is in the interests of justice. Three factors are considered: (1) whether, on a preliminary assessment, the appeal raises a serious question, recognizing that this is a “low threshold”; (2) whether the applicant would suffer irreparable harm if the application were refused; and (3) the balance of convenience, namely which of the parties would suffer greater harm from the granting or refusal of the remedy pending a decision on the merits. The factors are not watertight; the strength of one may compensate for weakness on another.

A trial judge enjoys a wide discretion as to whether to grant an adjournment of a civil trial, a discretion that is to be exercised judiciously, taking into account relevant factors. On appeal that exercise of discretion is reviewed on a deferential standard. Moreover, findings of fact are subject to a deferential standard of review on appeal.

While accepting that the appeal, which focussed on the trial judge’s refusal to grant an adjournment of the trial, does not fall below the low merits threshold, it cannot be considered as having the strength necessary to overcome the weakness on the irreparable harm and balance of convenience factors. The appellants’ case for a stay is weak on both of those factors.

Regarding irreparable harm, the costs awards are automatically stayed and may not be enforced, pending the disposition of the appeal. The respondents have not sought a lifting of the automatic stay. Therefore, the appellants are already protected from this form of harm. The respondents gave an undertaking to the Court that they “will not deal with the property pending disposition of the appeal”. The right to effective relief as a result of a successful appeal will therefore not be lost, as the Property will remain in the ownership of parties who are before the court.

Turning to the balance of convenience, the appellants argued that if the stay is not granted they will incur “transaction costs” in having to move out of the Property and in finding another place to live, and then, if the appeal is allowed, in moving back into the Property. In the interim they will be without their home during the COVID-19 pandemic. No estimate of the “transaction costs” was provided. The Court agreed that there would be inconvenience to the appellants in this scenario, but the inconvenience would be temporary, and the length of it is, in some measure, within the power of the appellants to minimize, in that they were free to take steps to expedite the perfection of their appeal, and thus advance the potential hearing date of the appeal.

More importantly, the inconvenience of moving out and finding alternate accommodations flows directly from the result of the trial, which on a motion for a stay pending appeal is to be treated as prima facie correct. The appellants were aware of that result from the time of the trial judge’s decision of May 1, 2020, and have had the opportunity to plan accordingly.

On the other hand, granting the stay would delay the respondents in obtaining ownership of a property the trial judge found to be uniquely suited to their purposes. The evidence discloses that the respondents have arranged financing to close the purchase conditioned on the closing occurring on August 31, 2020. There was no evidence about whether or not the financing commitment could be extended to a new closing date if a stay were granted and the appeal ultimately dismissed; that new date would be uncertain given that the appeal is at a very early stage. The appellants offered their undertaking to be responsible for any damages caused by the stay, but the trial judge noted that they have other creditors. The balance of convenience did not favour the granting of a stay.