CERTIFICATE OF PENDING LITIGATION GRANTED ON PROPERTY OF A VENDOR TRYING TO RESILE FROM A SALE DURING A HOT REAL ESTATE MARKET
The court granted a Certificate of Pending Litigation against the Vendor who accepted a “bully-offer” from a Purchaser who wanted to avoid a bidding war during an upcoming “offer date.” A few days after the Vendor accepted the offer, they took the position that the Purchaser was in default because the Purchaser did not tender a certified cheque for the $100,000.00 deposit. The problem for the Vendor, however, was that the Agreement of Purchase and Sale (“APS”) did not require the Purchaser to tender the deposit through a certified cheque, notwithstanding the many assurances from their real estate agent that any deposit they received would be backed by a certified cheque. A classic case of where the “representations” made by the agent were not ultimately codified in the wording of the APS.
As such, on the face it did not appear to the motion’s judge that the Purchaser was in any default, and hence there was a good argument that the Purchasers were entitled to have the APS honoured.
The test for the court thereafter was whether the equities of the case warranted the title to the subject property being encumbered while the case remained ongoing. Based on historical case law, the court highlighted the various factors taken into account when making such a decision, none of which in isolation is determinative, as follows:
- whether the plaintiff is a shell corporation;
- whether the land is unique;
- the intent of the parties in acquiring the land;
- whether there is an alternative claim for damages;
- the ease or difficulty in calculating damages;
- whether damages would be a satisfactory remedy;
- the presence or absence of a willing purchaser; and
- the harm to each party.
The court considered the property to be relatively unique (wide lot and backing onto a park), which was a significant factor in granting the Certificate of Pending Litigation. As such, the property will now, for all intents and purposes, be off-the-market until this litigation is resolved, either on consent or through a court ruling.
Cannon v. Gerrits, 2022 ONSC 851
https://www.canlii.org/en/on/onsc/doc/2022/2022onsc851/2022onsc851.html