



COURT OF APPEAL FOR ONTARIO

CITATION: Billimoria v. Mistry, 2022 ONCA 276

DATE: 20220406

DOCKET: C69330

Pardu, Paciocco and Thorburn
    JJ.A.

BETWEEN

Homi Billimoria

Plaintiff (Appellant)

and

Maharukh Mistry and Firoze
    Mistry

Defendants (Respondents)

Michael S. Deverett, for
    the appellant

Ted Evangelidis and Eric
    Blay, for the respondents

Heard: March 23, 2022, by
    videoconference

On appeal from
    the judgment of Justice Jennifer Woollcombe of the Superior Court of Justice,
    dated March 24, 2021, with reasons at 2021 ONSC 1939.

REASONS FOR DECISION

OVERVIEW

[1]

This appeal arises from a dispute between two
    owners of a residential property located at 347 Glenn Hawthorne Boulevard,
    Mississauga (the property).

[2]

At the summary trial, the appellant Homi
    Billimoria sought a declaration that he is the sole owner of the property by
    virtue of ss. 4, 5, and 15 of the
Real Property Limitations Act
,
    R.S.O. 1980, c. L.15 (
RPLA
).

[3]

The appellant pointed to his exclusive possession
    of the property for more than ten years, the fact that he paid the expenses
    throughout, the respondents had not inspected the property for more than ten
    years, and that the respondents had done nothing to protect their property
    interest in more than ten years. He denied that there was a verbal agreement
    allowing him to stay in the home in exchange for paying carrying costs, with
    the expectation that the property would eventually be sold. He said that this
    alleged verbal agreement was incomplete, missing essential terms, and
    unenforceable.

[4]

The trial judge held that the appellant had a
    65% interest in the property, the respondents had a 35% interest in it, and
    that it should be sold.

[5]

The appellant claims the trial judge erred by
    holding that (i) the respondents could recover possession of the property
    despite ss. 4, 5, and 15 of the
RPLA
; and (ii) the property should be
    sold pursuant to the
Partition Act
, R.S.O. 1990, c. P.4. The appellant
    claims he is the sole owner of the property and that the respondents are
    dispossessed of their interest in the home as he has been in exclusive
    possession of the home for over ten years.

[6]

The respondents raise a third issue for the
    first time on appeal, which is that title to the property was registered under
    the
Land Titles Act,
R.S.O. 1990, c. L.5 before it was purchased by
    the parties, and consequently their interest could not be extinguished by the
    appellants exclusive possession because his possessory interest would have
    been adverse to or in derogation of the title of the registered owner,
    contrary to s. 51(1) of the
LTA
.

[7]

For the reasons that follow, the appeal is
    dismissed.

FACTUAL BACKGROUND

[8]

The history of the parties involvement with the
    property is set out below.

[9]

In the 1980s, the parties began buying properties
    to sell for profit. In 1988, the parties jointly purchased the property for
    $171,900 and paid a $30,000 deposit. At the time of purchase, the property was
    registered in Land Titles.

[10]

The parties took title as tenants in common,
    with 50% owned by the appellant and 50% by the respondent Ms. Maharukh Mistry.
    The appellant paid half of the $15,000 deposit and the parties disagree as to
    who paid the other $15,000. Until 1991, the property was rented for $7,800 per
    annum.

[11]

In 1991, when the parties were unable to rent or
    sell the property, they agreed that the appellant would move into it.

[12]

The appellant claims he became the sole owner of
    the property. He claims he paid all costs to maintain it including property
    taxes, mortgage, insurance and repairs. The respondents claim that when the
    appellant moved in, they had a verbal agreement that although the appellant
    would live there, make mortgage and property tax payments in lieu of paying
    rent, he and Ms. Mistry would remain joint owners and that the property would
    eventually be sold. The mortgage was paid off by May 1, 2004.

[13]

In January 1992, Ms. Mistry transferred her
    ownership interest to one of joint interest with her husband who is the other
    respondent, Mr. Firoze Mistry. In July 2016, the appellants interest in the
    property was transferred to Armin Mistry (unrelated to the respondents). The
    respondents did not know of and did not consent to the transfer. In May 2018,
    all the parties signed a document to restore the appellants and the
    respondents names on title.

[14]

In September 2018, counsel for the respondents
    advised that, given what had transpired, they wished to sell the property. In
    January 2019, counsel for the appellant registered a charge against it without
    the respondents knowledge or consent.

[15]

The appellant commenced an action seeking a
    declaration that he was the sole owner of the property because he was in
    exclusive possession of it for more than ten years and paid the carrying costs.
    The respondents brought a counterclaim asking that the property be sold
    pursuant to the
Partition Act
.


THE JUDGMENT

[16]

The trial judge held that the appellant had not
    established exclusive possession of the property under the
RPLA
because:

a.

The business history suggested that the parties
    bought six properties together including this one and they were jointly
    purchased as investment properties;

b.

The trial judge accepted Ms. Mistrys evidence
    that the respondents paid 50% of the deposit. This was consistent with their
    other business arrangements and with the fact that Ms. Mistry was registered on
    title as a 50% owner;

c.

The trial judge found that they had a well
    established trusting friendship and that in 1991, there was a verbal agreement
    that the appellant would live at the property without paying rent as long as he
    carried the major costs, and at some point, the property would be sold;

d.

After the appellant moved into the property, the
    parties did not conduct themselves as though the respondents had been
    dispossessed.

[17]

The trial judge also dismissed the appellants
    claim of proprietary estoppel, as there was never an express or implied
    representation that the appellant was to become sole owner, and there was no
    basis to find the respondents behaviour had been unconscionable.

[18]

However, the trial judge found that there was a
    proper basis, grounded in unjust enrichment, for an unequal division of the
    property. The trial judge found that the agreed arrangement lasted longer than
    was expected and that a constructive trust should be imposed to recognize the
    extent of the appellants contribution. She ordered that the appellant should
    receive 65% of the value of the property because the appellants contribution
    to the property was significantly more than the value of rent a tenant would
    have paid, which payments enabled the property value to increase. She held that
    if the proceeds of the sale were shared equally, the respondents would be
    enriched and the appellant would suffer a corresponding deprivation.

[19]

The trial judge therefore ordered that the
    property be partitioned and sold pursuant to the
Partition Act
. While
    she recognized that there may have been an agreement to sell the property only
    upon the agreement of all parties in 1991, the respondents decision to seek to
    sell the property now was reasonable in light of the appellants conduct from
    2016 to 2018.

ANALYSIS AND CONCLUSION

Jurisdiction

[20]

The appellant raises three issues on this
    appeal: the first is whether s. 51 of the
Land Titles Act
bars the
    appellants claim, the second is whether the trial judge erred in assessing the
    appellants actual possession of the property under the
RPLA
, and the
    third is whether the trial judge erred in ordering the sale of the property
    pursuant to the
Partition Act
.
The issues are
    interconnected and the interests of justice favour joinder:
Cavanaugh v.
    Grenville Christian College
, 2013 ONCA 139, 360 D.L.R. (4th) 670, at
    para. 86.

[21]

Although appeals from orders made under the
Partition
    Act
lie to the Divisional Court, the appeal from the final judgment
    determining the ownership of the property lies to this court, and this court
    has jurisdiction to deal with all the issues on appeal pursuant to s. 6(2) of
    the Courts of Justice Act.

Standard of
    Review

[22]

The issues raised by the appellant are issues of
    mixed fact and law which are subject to the standard of review of palpable and
    overriding error, absent an extricable legal error:
Housen v. Nikolaisen,
2002
    SCC 33, [2002] 2 S.C.R. 262,

at paras. 26-36. The trial judges
    factual findings are also subject to the standard of review of palpable and
    overriding error:
Housen,
at para. 10. A palpable and overriding error
    includes a finding that is clearly wrong, unreasonable or unsupported by the
    evidence:
H.L. v. Canada (Attorney General)
, 2005 SCC 25, [2005] 1
    S.C.R. 401, at para 4.

The
Land Titles Act
Issue

[23]

In our view, the new issue the respondents raise
    on appeal, that s. 51 of the
Land Titles Act
bars the appellants
    claim, is properly before us and is dispositive.

[24]

Appellate courts will generally not entertain
    new issues on appeal, because of the unfairness of requiring a party to argue
    an issue on appeal that it had no chance to adduce evidence on at trial:
Whitby
    (Town) v. G & G 878996 LM Ltd.
, 2020 ONCA 654, 5 M.P.L.R. (6th) 174,
    at para. 9. The burden is on the appellant to persuade the court that all the
    facts necessary to address the new issue are already before the court, and the
    decision as to whether to grant leave to allow a new argument is a
    discretionary decision to be guided by balancing the interests of justice:
Kaiman
    v. Graham,
2009 ONCA 77, 75 R.P.R. (4th) 157, at para. 18.

[25]

While the effect of s. 51 of the
Land Titles
    Act
was not raised at trial by different counsel for the respondents, this
    is a legal issue which does not depend on findings of fact, nor is there any
    suggestion that prior counsel failed to raise it for tactical reasons or that
    the interests of justice weigh in favour of not considering it. As such, and
    with the consent of the appellant, the respondents have satisfied their burden
    and we exercise our discretion to allow this issue to be raised on appeal:
Kaiman
.

[26]

The appellant claims that he is the sole owner
    of the property because his long physical occupation of the property
    dispossessed the respondents of their interest, within the meaning of s. 5 of
    the
RPLA
, and the respondents are now statute-barred pursuant to s.4
    of the
RPLA
, from bringing an action to recover the property. He
    argues that reliance on the
RPLA
is not a claim for adverse
    possession and is not governed by the principles of adverse possession, but
    instead rests on a finding that the person entitled to the property has been
    dispossessed or had discontinued  possession more than 10 years before
    attempting to make entry or distress or bringing an action. He argues that the
    trial judge erred in applying the principles of adverse possession. He also
    argues that his claim falls outside of s.51 of the
Land Titles Act
. We
    do not accept the distinction the appellant is attempting to make. In essence,
    his claim is for adverse possession under the
RPLA
. Nor do we accept
    his argument that his claim is not caught by s. 51 of the
Land Titles Act
.

[27]

Adverse possession is established where that
    claimant had actual open, notorious, constant, continuous, [and] peaceful
    possession for the statutory period of ten years in accordance with s. 4 of the
RPLA
, as well as an intention to exclude the true owner from
    possession, and effective exclusion of the true owner for the entire ten-year statutory
    period:
Vivekanandan v. Terzian,
2020 ONCA 110, 443 D.L.R. (4th) 678,
    at para. 21.

[28]

However, land that is registered in Land
    Titles cannot be obtained by adverse possession unless the ten-year exclusion
    period ran before the land was registered:
Sipsas v. 1299781 Ontario Inc.
,
    2017 ONCA 265, 85 R.P.R. (5th) 24, at para. 18. Section 51(1) is worded broadly
    and clearly embraces the claim the appellant is making. It provides, in
    relevant part:


Despite any provision of  the
Real
    Property Limitations Act
no title to and
no right or interest
in registered lands under this Act
that is adverse to or in derogation of
    the title of the registered owner shall be acquired
hereafter or deemed to
    have been acquired heretofore
by any length of possession or by prescription

    (emphasis added).

[29]

In this case, the property was already
    registered in Land Titles at the time it was purchased by the parties, and
    thus, the appellant could not have obtained title to it by adverse possession.
    The appellant cannot make out a claim of adverse possession regardless of how
    long the appellant actually occupied the home.

[30]

This alone is sufficient ground to dismiss
    the appeal.

The
RPLA
Issue

[31]

Second, even if a limitation claim under the
RPLA
had been available, we see no error in the trial judges conclusion that
    the appellant had not established actual possession of the property for the
    requisite ten-year period under the
RPLA.

[32]

She correctly articulated the law in respect of
    adverse possession as set out by this court in
Vivekanandan
.

[33]

She then provided comprehensive reasons for
    finding that the appellant had never established actual possession sufficient
    to dispossess the respondents. In particular, she noted that the appellant was
    occupying the property pursuant to a verbal agreement with the respondents.
    Given her finding that that the respondent co-owners permitted his occupation,
    the adversity element of adverse possession could not have been made out:
Teis
    v. Ancaster (Town)
(1997), 35 O.R. (3d) 216 (C.A.), at p. 221.

[34]

She cited the fact that the property was an
    investment property, the informality of their relationship due to their
    friendship, the joint deposit on the property, the agreement that the appellant
    should live at the property rent-free in exchange for paying carrying costs
    with the idea that one day the property would be sold, the mortgage, insurance
    and tax documents which were sent to the respondents, two mortgage payments
    which were paid by the respondents and other ownership obligations which were
    assumed by the respondents.

[35]

She also noted that the appellant had never told
    the respondents that the property was his alone. In fact, as recently as 2018,
    the parties jointly retained counsel to rectify the title issues to reflect the
    fact that they were all registered owners as tenants in common. She concluded
    that this evidence is inconsistent with the appellants intention to exclude
    the respondents from possession of the property.

[36]

For all these reasons, the trial judge held that
    as a factual matter, the respondents never lost possession of the property,
    either by dispossession or discontinuance of possession. She held that the
    appellant therefore failed to meet his burden of showing that he had
    successfully
dispossessed
the respondents of their interest in the property or that the
    respondents had discontinued their possessory interest in the property such
    that their rights in the property were extinguished.

[37]

We see no error in the trial judges conclusion
    that the appellant had failed to establish his claim under the
RPLA
.

The
Partition Act
Issue

[38]

Section 2 of the
Partition Act
provides
    that a joint tenant or tenant in common may be compelled to make partition or
    sale. The onus is on the party resisting sale to demonstrate reasons why it
    ought not to be sold. There must be malicious, vexatious or oppressive conduct
    to justify the refusal to sell:
Brienza v. Brienza
, 2014 ONSC 6942, at
    paras 24-27.

[39]

The appellant claims the trial judge erred in
    ordering the sale of the property having found that there was an agreement that
    the appellant could continue to live in the property on condition that he pay
    the carrying costs.

[40]

We disagree. While the trial judge accepted that
    there was an agreement among the parties in 1991, she also accepted that,
    there was an expectation on the [respondents] part that the [appellant] would
    move into the property for a much shorter period than ended up happening. There
    was an expectation that the property would be sold much earlier. Moreover,
    there was evidence that the agreement changed when the respondents discovered
    that they had been removed from title without being told, and steps had to be
    taken to rectify this. She found that there was no evidence that the
    respondents actions were malicious, oppressive or vexatious.

[41]

For these reasons and given the deference
    accorded to the trial judges exercise of discretion in ordering sale under the
Partition Act
, we see no error in the trial judges decision to allow
    the sale of the property.

[42]

The appeal is therefore dismissed. Costs of this
    appeal are awarded to the respondents in the amount of $25,000 as agreed by the
    parties.

G. Pardu J.A.

David
    M. Paciocco J.A.

J.A.
    Thorburn J.A.


