



COURT OF APPEAL FOR ONTARIO

CITATION: Starport Landing Inc. v. Laurel Springs Water
    Corp., 2015 ONCA 772

DATE: 20151112

DOCKET: C59223

Hoy A.C.J.O., MacFarland and Lauwers JJ.A.

BETWEEN

Starport Landing Inc.

Plaintiff

and

Laurel Springs Water Corp. and J. Gordon Ross

Defendants

and

NCG Ventures Inc. and
    Nickolas C. Georghiades, also known as Nick Georghiades

Third Parties

Patrick Bakos, for the appellant, Starport Landing Inc.

Steven Gadbois, for the respondent, Laurel Springs Water
    Corp.

Heard:  November 5, 2015

On appeal from the order of Justice M.A. Sanderson of the
    Superior Court of Justice, dated July 21, 2014, with reasons reported at 2014
    ONSC 4359.

ENDORSEMENT

[1]

This appeal arose out of the aborted sale of an industrial property with
    environmental problems. The appellant, Starport Landing Inc., asserted that it
    was not required to complete the purchase of the property and sued for the
    return of the deposit it paid. The respondent vendor, Laurel Springs Water
    Corp., successfully brought a motion for summary judgment dismissing the
    appellants claim.

[2]

We dismissed the appellants appeal of that judgment, for reasons to
    follow. These are our reasons.

Background

[3]

The respondent offered the property for sale through a tendering
    process. The tender package disclosed the environmental issues with the
    property, including an order (the Order) made by the Ontario Ministry of the
    Environment (the MOE) pursuant to the
Environmental Protection Act
,
    R.S.O. 1990, c. E. 19 (the 
EPA
). The Order required investigation
    and a remedial work plan with respect to the property. Pursuant to s. 197(1) of
    the
EPA
(reproduced below), the Order also prohibited any person with
    an interest in the Property from dealing with the Property in any way without
    first giving a copy of this Order, including any amendments, to each person
    acquiring an interest in the Property. The MOE registered a Certificate of
    Prohibition on title to the property, disclosing this prohibition. The effect
    of this registration was to deem the prohibition in the Order to be directed to
    each person who subsequently acquired an interest in the property: s. 197(2) of
    the
EPA
.

[4]

Under the tendering process, the vendor entered into an agreement of
    purchase and sale (the Agreement) with NCG Ventures Inc. The Agreement
    included the Ontario Real Estate Association standard form and an attached schedule,
    drafted by the parties. Paragraph 2 of Schedule A to the Agreement provided
    that the Agreement was conditional for a period of 30 days upon the Buyer
    being satisfied, in his sole discretion, with the environmental condition of
    the property. If the buyer did not waive this environmental condition within
    the prescribed period, the Agreement would become null and void.

[5]

The conditional period was extended and was to expire on August 14,
    2006.

[6]

NCG had the right to assign the Agreement to any entity financially
    able to complete the purchase at its sole discretion with notice to the Seller.
    The Agreement provided that, once notice was given, [t]he Seller shall agree
    to consent to such assignment.

[7]

On August 11, 2006, NCG assigned the Agreement to the appellant and
    notified the respondent of the assignment. On August 14, 2006, the appellant
    waived the environmental condition and, on August 30, 2006, paid the deposit
    required by the terms of the Agreement. The appellants evidence was that it knew
    about the Order when it paid the deposit.

[8]

The standard form portion of the Agreement included, in s. 10, a
    condition that title to the property is good and free from all registered
    restrictions, charges, liens, and encumbrances except as otherwise specifically
    provided in this Agreement and that, if the buyer makes a valid objection to
    title which the vendor is unable or unwilling to remove, remedy, or satisfy
    and which  Buyer will not waive, the Agreement comes to an end and the buyer
    is entitled to the return of any monies it paid.

[9]

The appellant asserted that, in waiving the environmental condition, it
    did not waive the title condition and, because the Certificate of Prohibition
    was registered on title, it was not required to complete the acquisition of the
    property. It also claimed that it had not been given a copy of the Order before
    it acquired an interest in the property through the assignment and was
    accordingly entitled to void the Agreement pursuant to s. 197(4) of the
EPA
(reproduced below).

[10]

The
    motion judge concluded that there was no genuine issue requiring a trial. She found
    that the appellant was aware that the MOE was insisting on remediation of the
    property when it acquired an assignment of the Agreement and was clearly aware that
    there were serious unresolved environmental issues with respect to the property
    when it waived the environmental condition. She concluded that, having waived
    the environmental condition, the appellant could not demand that the respondent
    remove the Certificate of Prohibition from title. She also found that the
    appellant deposed no evidence that it had not been given a copy of the Order
    before acquiring an interest in the property.

Issues on Appeal

[11]

The
    appellant argues that the motion judge erred by:

1.

finding that the
    waiver of the environmental condition also constituted a waiver of the
    registration of the Certificate of Prohibition on title; and

2.

finding that
    there was no genuine issue requiring a trial with respect to the appellants
    claim that it had not been given a copy of the Order before it acquired an
    interest in the property through the assignment of the Agreement or, at a
    minimum, erred in doing so without exercising her powers under r. 20.04(2.2) of
    the
Rules of Civil Procedure
, R.R.O. 1990, Reg. 194 to obtain oral
    evidence as to whether the appellant received the tender documents or knew
    about the Order.

The Waiver of the Environmental
    Condition was a Waiver of the Title Condition

[12]

We
    agree with the motion judge that, having waived the environmental condition,
    the appellant could not demand that the respondent remove the Certificate of Prohibition
    from title.

[13]

The
    title condition must be construed with regard to the specifically negotiated
    environmental condition and the underlying factual matrix, including that the
    Order  which was made with respect to the very environmental problem at issue
     had been disclosed to NCG. In our view, the motion judge correctly concluded
    that a waiver of the environmental condition effectively constituted a waiver
    of the appellants ability to object to the registration of the Certificate of Prohibition
    on title.

No Evidence that the Appellant was not Given a Copy of the
    Order

[14]

The
    relevant portions of s. 197 of the
EPA
provide as follows:

1)

A person who has
    authority under this Act to make an order or decision affecting real property
    also has authority to make an order requiring any person with an interest in
    the property, before dealing with the property in any way, to give a copy of
    the order or decision affecting the property to every person who will acquire
    an interest in the property as a result of the dealing.

2)

A certificate setting
    out a requirement imposed under subsection (1) may be registered in the proper
    land registry office on the title of the real property to which the requirement
    relates

3)

A requirement imposed
    under subsection (1) that is set out in a certificate registered under
    subsection (2) is, from the time of registration, deemed to be directed to each
    person who subsequently acquires an interest in the real property.

4)

A dealing with real
    property by a person who is subject to a requirement imposed under subsection
    (1) or (3) is voidable at the instance of a person who was not given the copy
    of the order or decision in accordance with the requirement.

[15]

The
    appellant argues that the motion judge erred by requiring the appellant to
    adduce evidence that it had not been given a copy of the Order. It says that
    the respondent was required to prove that the appellant was given a copy of the
    Order before the appellant acquired an interest in the property through the
    assignment of the Agreement. The appellant submits that, had the motion judge
    not made this error, she would have: (1) determined that there was a genuine
    issue requiring a trial with respect to the appellants claim that it had not
    been given a copy of the Order before it acquired an interest in the property
    and was therefore entitled to void the Agreement in accordance with s. 197(4)
    of the
EPA
; or (2) at a minimum, ordered that oral evidence be
    presented pursuant to r. 20.04(2.2) as to whether the appellant had received
    the tender documents or the Order before determining whether there was a
    genuine issue requiring a trial.

[16]

We
    reject this argument.

[17]

The
    respondent was not required to prove that the appellant had not been given a
    copy of the Order. In response to the respondents summary judgment motion seeking
    the dismissal of the appellants claim, the appellant was required to set out,
    in affidavit material or other evidence, specific facts showing that there was a
    genuine issue requiring a trial: r. 20.02(2). The appellant was required to adduce
    evidence that it was not given the Order. It did not do so.

[18]

The
    motion judge wrote, at para. 15 of her reasons:

Significantly no one from [the appellant] deposed either that
    he/she/they did not receive the tender documents from NCG or that no one from
    [the appellant] knew about the [Order] at the time it took the assignment from
    NCG.

[19]

There
    is no basis to interfere with the motion judges finding that there was no
    evidence that NCG did not provide the appellant with a copy of the Order. The
    letter from the appellants counsel to the respondent taking the position that
    s. 197(4) of the
EPA
had not been complied with is not evidence that
    the appellant had not been given the Order.

[20]

We
    agree with the motion judge that, in the absence of evidence from the appellant
    that it was not given a copy of the Order, there was no genuine issue requiring
    a trial with respect to the appellants claim that it could void the Agreement
    pursuant to s. 197(4). The issues of whether the respondent was required to
    provide a copy of the Order to the appellant and whether, if the appellant were
    not given a copy of the Order before it acquired an interest in the property
    through the assignment, it could have voided the Agreement (as opposed to the
    assignment) were not before us and we therefore do not address them.

[21]

Rule
    20.04(2.2) provides that, for the purposes of exercising any of the additional
    powers set out in subrule (2.1) when disposing of a summary judgment motion 
    namely, weighing the evidence, evaluating the credibility of a deponent, and
    drawing any reasonable inference from the evidence  a judge may order that
    oral evidence be presented by one or more parties.

[22]

The
    motion judge wrote, at para. 55 of her reasons:

There are no factual issues requiring a trial. I reach this
    conclusion on the present state of the evidence. It is not necessary to
    consider the additional powers of trial judges granted under Rule 20.

[23]

As
    the motion judge did not exercise the additional powers set out in subrule (2.1),
    there was no basis for her to have ordered that oral evidence be presented.

[24]

While
    the motion judge did not need to draw an inference from the record before her
    that the appellant had been given a copy of the Order in order to conclude that
    there was no genuine issue requiring a trial, the record supported such an
    inference. It is undisputed that the respondent gave a copy of the Order to NCG
    before NCG acquired an interest in the property by entering into the Agreement.
    As noted above, the motion judge found that the appellant was aware that the
    MOE was insisting on remediation of the property when NCG assigned the
    Agreement to it and was clearly aware that there were serious unresolved
    environmental issues with respect to the property when it waived the
    environmental condition. She also noted the appellants evidence that it knew
    about the Order when it paid the deposit.

Disposition and Costs

[25]

This
    appeal was dismissed for these reasons. The respondent is entitled to its costs
    of the appeal fixed at $6,500, inclusive of disbursements and HST.


Alexandra Hoy A.C.J.O.


J.
    MacFarland J.A.

P.
    Lauwers J.A.


