



COURT OF APPEAL FOR ONTARIO

CITATION: Harvey v. Talon International Inc., 2017 ONCA 267

DATE: 20170331

DOCKET: C61696 & C61697

Blair, Epstein and Huscroft JJ.A.

DOCKET:
    C61696

BETWEEN

Adrian B. Harvey and Harvey Legacy Holdings Ltd.

Applicants (Respondents)

and

Talon International Inc.

Respondent (Appellant)

DOCKET: C61697

AND BETWEEN

Young Sook Yim and Paul
    Chung-Kyu Kim

Applicants (Respondents)

and

Talon International Inc.

Respondent (Appellant)

Symon Zucker and Nancy Tourgis, for the appellant

Michael W. Carlson, for the respondents

Heard: October 31, 2016

On appeal from the judgments of Justice Cory A. Gilmore of
    the Superior Court of Justice, dated January 15, 2016, with reasons reported at
    2016 ONSC 371 and 2016 ONSC 370.

Epstein J.A.:

[1]

This appeal involves the
    interpretation of provisions in two statutes  the
Condominium Act, 1998
,
    S.O. 1998, c. 19 (the Act), and the
Real Property Limitations Act,
R.S.O. 1990, c. L.15 (the 
RPLA
).
    This interpretive exercise arises out of two separate applications that were
    heard together. The applications concern the obligation of the appellant, Talon
    International Inc., to return deposits that the respondents  Young Sook Yim
    and Paul Chung-Kyu Kim (collectively Ms. Yim),
[1]
in one application and Adrian B. Harvey and Harvey Legacy Holdings Ltd. (collectively,
    Mr. Harvey), in the other  paid toward the purchase of condominium units in
    Talons development known as Trump Tower.

[2]

Several years after entering into
    their respective agreements of purchase and sale (an APS) with Talon, Ms. Yim
    and Mr. Harvey each provided written notices to Talon, advising of their
    intention to terminate the transaction. Both stated their basis for doing so
    as being, in part, what they viewed as material changes to the revised
    disclosure statement Talon had provided to them. Both requested the return of
    their deposits. The respondents take the position that their communications constituted
    valid notices to rescind their respective APS under s. 74(6) and (7) of the Act.
    Because Talon had not challenged, within the time the Act allows, either Ms.
    Yims or Mr. Harveys right to rescind, the respondents applied to the court
    for an order that Talon return their deposits. Talon defended on the basis that
    the respondents purported notices to rescind did not meet the requirements of
    the Act.

[3]

The application judge allowed both
    applications. She held that the notices sufficiently complied with the
    requirements of s. 74(7) of the Act. Each notice therefore triggered Talons
    obligation to challenge the alleged material change set out within ten days of
    receipt, or to accept the claim for rescission. Because Talon did not challenge
    the respondents claims for rescission, the application judge ordered Talon to
    refund Ms. Yims and Mr. Harveys deposits, with interest.

[4]

In Ms. Yims case, Talon also
    argued that she was seeking to amend her notice of application to claim
    statutory rescission more than two years after the date on which such a claim
    was discovered. Her amendment was therefore statute-barred, pursuant to s. 4 of
    the
Limitation Act
, 2002
, S.O. 2002, c. 24, Schedule B. The application judge disagreed.
    She held that the ten-year limitation period in s. 4 of the
RPLA
governed claims for the refund of deposits advanced
    toward the purchase of condominium units. Ms. Yims claim was, therefore, not out
    of time.

[5]

In this appeal, Talon submits that
    the application judge erred in over-emphasizing the fact that the Act is
    consumer-protection legislation, and consequently provided an overbroad interpretation
    of s. 74(7) of the Act. And, in the case of Ms. Yim, Talon argues that the
    application judge erred in holding that her claim for the return of her deposit
    fell within the provisions of the
RPLA
. It further submits that Ms. Yims application as a whole is
    statute-barred, as it was brought more than two years after discovery of the
    claim.

[6]

I would dismiss both appeals.
I agree with the application judge that it would be
    contrary to the purpose of the Act, as consumer protection legislation, to
    adopt a technical approach in interpreting what a purchaser must do to notify
    the declarant of an intention to rescind under s. 74(7). The section requires
    that notice of rescission be in writing, and that it be delivered to the
    declarant or his or her solicitor. By implication, the notice also must make it
    clear that the purchaser seeks to set aside the APS based on an identified
    material change. In my view, there is no reason to interfere with the
    application judges conclusion that the notices delivered by Ms. Yim and Mr.
    Harvey satisfied these requirements.

[7]

I also agree with the application
    judge that Ms. Yims claim to recover her deposit fits within the definition of
    an action for the recovery of land under the
RPLA
. The applicable
    limitation period is therefore ten years, and Ms. Yims application is not statute-barred.

STATUTORY
    PROVISIONS

[8]

The main issue in these appeals
    involves the interpretation of the provisions in the Act that give a purchaser
    the right to rescind his or her APS. These provisions are found in s. 74 of the
    Act, which provides that within ten days of receipt of a revised disclosure
    statement containing a material change or notice of change that is material, a
    purchaser has the right to rescind the APS. If the declarant takes the position
    that no material change has occurred, the declarant may bring an application to
    the Superior Court under s. 74(8) for a declaration on the question of
    materiality. Sections 74(9) and (10) require that the declarant refund the
    purchasers money with interest within ten days of receipt of the notice of rescission
    if no application has been made to the court on the issue of materiality, or if
    an application is made, within ten days of a determination that the change is
    material. The requirements of the notice of rescission are set out in s. 74(7),
    which provides:

(7) To rescind an agreement of purchase and sale under this
    section, a purchaser or the purchasers solicitor shall give a written notice
    of rescission to the declarant or to the declarants solicitor. 1998, c. 19, s.
    74 (7).

BACKGROUND
    TO THE RESPONDENTS' NOTICES

Ms. Yim v. Talon

[9]

On May 4, 2007, Ms. Yim signed an
    APS to purchase from Talon suite 1702 at Trump Tower for $860,000. Pursuant to
    the terms of the APS, Ms. Yim provided deposits totalling $172,000 to Talon. She
    received the required disclosure from Talon.

[10]

On February 18, 2012, a
    representative for Talon sent a letter to Ms. Yim and to her solicitor advising
    that the Hotel Unit Maintenance Agreement (HUMA) was now available online.

[11]

On February 23, 2012, after
    reviewing the HUMA, Ms. Yim had her solicitor send a letter to Talons solicitor.
    This letter provided as follows:

Further to the letter dated February 9, 2012 received from your
    client, Talon International Inc., regarding the extension of the proposed
    occupancy date from February 14, 2012, for above-noted suite,
my clients
    hereby give notice to terminate the [APS] dated May 4, 2007
and all
    amendments made thereto, effective immediately,
and to request the return of
    the deposits forthwith
to our firm made payable to Lee & Ma LLP in
    trust.

The basis of this notice is premised on paragraph 13 of the
    underlying [APS], which provides that the Vendor's right to extend the closing
    date shall not "exceed twenty-four (24) months" in the aggregate.
    Given that the original occupancy closing date was scheduled to be March 20,
    2009 (paragraph 2(a) in the [APS]), the Vendor's right to extend the closing
    date has expired on March 20, 2011, and is therefore no longer applicable.

In the alternative, the [HUMA], the full copy of which was
    provided at the last-minute, contains terms that are materially different from
    that indicated in the Disclosure, not to mention the substantive differences in
    the projected expenses.

Given that the condominium prices have surged in the past 4-5
    years, I trust that your client is not in any way prejudiced by this notice.
Your
    prompt response and return of deposits is respectfully requested and expected
.
    Thank you. [Emphasis added.]

[12]

On February 24, 2012, Ms. Yim had
    her counsel send a follow-up email to Talons representative, indicating that
    she was exercising her right to rescind the APS. This email specifically referenced
    s. 74 of the Act, as well as the change in the HUMA.

[13]

Talon took no steps in response to
    these communications. Ms. Yim issued her notice of application in this
    proceeding on December 10, 2014. By the time the application was heard, on
    December 14, 2015, Ms. Yim no longer relied upon the expiration of the vendors
    right to extend the closing date, as mentioned in her February 23, 2012 letter.
    She now relied solely on the alternative position advanced in the letter, with
    respect to the HUMAs containing materially different terms from the
    disclosure.

Mr. Harvey v. Talon

[14]

By way of an APS dated March 7,
    2005, Mr. Harvey agreed to purchase a hotel condominium unit from Talon in
    Trump Tower for $727, 000. Mr. Harvey provided deposits to Talon totalling
    $145,400. He received the required disclosure from Talon.

[15]

On February 17, 2012, Talons
    solicitor sent a letter to Mr. Harveys solicitor. This letter made reference
    to the HUMA now being available on the internet.

[16]

On February 24, 2012, Mr. Harveys
    solicitor faxed a note to Talons solicitors, indicating that he had been
    instructed not to proceed with the interim closing. The solicitor noted that he
    was no longer acting for Mr. Harvey in any capacity. That evening, Mr. Harvey
    sent a letter to Talons representative via email. The letter stated as
    follows:

Further to the letter dated February 9, 2012 received from your
    client, Talon International regarding proposed delivery of possession of the
    Hotel Unit on February 24, 2012 for the above mentioned Suite,
I hereby give
    notice to terminate the [APS] dated March 4, 2005
and all amendments
    effective immediately
,
and to request the return of deposits
    forthwith
to the firm of Groll & Groll LLP payable in trust.

The request is being made on the basis of [Mr.] Harvey never
    receiving a fully executed, accepted and initialled [APS].

In the alternative, the [HUMA], the full copy of which was
    provided at the last minute contains terms that are materially different from
    that indicated in the Disclosure and substantially different in the projected
    expenses.

Given the per square foot selling price achieved in todays
    market for this development is far in excess of this Unit, I trust Talon
    International is not in any way prejudiced by this notice.

Your prompt response and return of deposits is respectfully
    requested and expected.
[Emphasis added.]

[17]

Talon took no steps in response. On
    February 13, 2014, Mr. Harvey issued a notice of application in this proceeding.
    By the time of the hearing of the application on December 14, 2015, Mr. Harvey
    no longer relied upon not having received a fully executed, accepted and initialled
    APS, as mentioned in his February 24, 2012 letter. Instead, he relied solely on
    the alternative position advanced in the letter, with respect to the HUMAs
    containing material different terms from those indicated in the disclosure.

THE
    APPLICATION JUDGE'S REASONS

Ms. Yim v. Talon

[18]

As a preliminary matter, Ms. Yim
    moved to amend her notice of application to add a request that the court
    declare that the APS had been rescinded.

[19]

Ms. Yims notice of application,
    issued on December 10, 2014, made no mention of a claim based on rescission
    under the Act. Instead, she sought a declaration that Talon was in breach of
    the APS, a declaration that the APS was terminated and of no force and effect,
    and an order that Talon return the deposit. In the alternative, she sought an
    order granting relief from forfeiture of the deposit, and return of the
    deposit. Before the application judge, Ms. Yim brought a motion to amend her
    notice of application to add a claim for statutory rescission. Among the
    arguments raised by Talon in opposing the amendment was that the claim for
    rescission was statute-barred.
[2]


[20]

The application judge allowed the
    amendment. She held that Ms. Yims claim for rescission fell within s. 4 of the

RPLA
,

which
    provides for a limitation period of ten years. The claim for the return of a
    deposit pursuant to the Act fell within the
RPLA

as an
    action to recover land. In the alternative, the application judge held that
    the proposed amendment to claim statutory rescission was not a new cause of
    action, but an alternative remedy based on the exact same facts set out by Ms.
    Yim in the original notice of application. Additionally, Ms. Yims e-mail sent
    on February 24, 2012 had specifically mentioned rescission under the Act. In
    these circumstances allowing the amendment would cause Talon no prejudice.

[21]

The application judge then turned
    to whether the fact that Ms. Yims failure to use the word rescission in her
    February 23 letter was fatal to her claim for the return of her deposit.

[22]

The application judge started her
    analysis by noting that the Act was consumer protection legislation, and
    therefore should be interpreted liberally. The application judge reasoned, at
    para. 40, that keeping in mind the legislatures goal of protecting purchasers
    of condominiums, the court should not read in a requirement that all notices of
    rescission given under s. 74 of the Act include the precise term rescission.

[23]

The application judge went on to
    hold that all s. 74(7) requires is that the notice of rescission be in writing,
    delivered to the declarant or its solicitor, and that it contain a ground of
    material change upon which rescission is based. Accordingly, the application
    judge concluded, at para. 46, that as long as the notice fulfills the
    statutory requirements and makes clear the purchasers intention to undo or
    unmake the agreement, such as by requesting the return of their deposit, the
    notice should be considered sufficient. There is no requirement that notice be
    worded perfectly, or that it include the word rescission.

[24]

The application judge then
    addressed whether Ms. Yims February 23, 2012 letter complied with this interpretation
    of s. 74 of the Act. She held that given Ms. Yims use of the word terminate
    in the letter, there must be strong evidence indicating that Ms. Yims
    intention in sending the letter was to rescind her APS. The application judge
    found three indications of the required strong evidence of Ms. Yims
    intention to rescind. First, the letter referenced a material change, namely
    the HUMA being materially different and containing substantial differences
    from projected expenses. Secondly, the application judge highlighted Ms. Yims
    request for the return of her deposit, a request that would restore the parties
    to their original positions. Such a remedy was consistent with rescission, and
    not with repudiation of the contract.

[25]

Thirdly, the application judge also
    looked at the e-mail sent by Ms. Yim to Talon on February 24, 2012, the day
    after the initial letter. This email had specifically referenced s. 74 of the
    Act. The application judge concluded that Ms. Yims communications of February
    23 and 24, read together, provided sufficient notice under the Act. Finally, in
    accordance with the requirements of s. 74(7), the letter had been in writing,
    and sent to the proper person. Given that Talon had not challenged Ms. Yims
    right to rescind within ten days of receipt of her notice of rescission, Talon
    was required to return her deposit, with interest.

Mr. Harvey v. Talon

[26]

The first issue the application
    judge addressed was whether the application was deficient with respect to
    relief sought. In his notice of application dated February 13, 2014, Mr. Harvey
    sought a declaration that Talon was in breach of the APS, a declaration that
    the APS was terminated and of no force and effect, and an order that Talon
    return the deposit. In the alternative, he sought an order granting relief from
    forfeiture of the deposit under the APS and the return of his deposit. Talon
    argued that the application was fatally flawed because it did not claim the relief
    of rescission, and therefore the court could not conclude that Mr. Harveys letter
    of February 24, 2012 had been a notice of rescission.

[27]

The application judge held that it
    would defeat the purpose of r. 1 of the
Rules of Civil Procedure
,
    R.R.O. 1990, Reg. 194,

if Mr. Harvey were precluded from pursuing relief
    on the basis that the notice of application was not framed exactly in
    accordance with the legislation or the rules. For nearly a year Talon had been
    in possession of Mr. Harveys affidavit, in which he had explicitly taken the
    position that his February 24, 2012 letter rescinded the APS. Further, Mr.
    Harvey had sought return of the deposit in his notice of application  relief
    consistent with the remedy of rescission, and not termination. The application
    judge reasoned that in such circumstances rescission was implicitly pleaded.

[28]

The application judge then
    addressed whether Mr. Harveys February 24, 2012 letter could be a proper
    notice of rescission, despite not using the word rescind or rescission. Relying
    on the same reasoning as in Ms. Yims case, the application judge concluded, at
    para. 43, that as long as the notice fulfills the statutory requirements and
    makes clear the purchasers intention to undo or unmake the agreement, such as
    by requesting the return of their deposit, the notice should be considered
    sufficient.

[29]

Next, the application judge held
    that Mr. Harveys February 24, 2012 letter sufficiently conveyed his intention
    to rescind his APS. As Mr. Harvey had used the word terminate in his letter,
    the application judge looked for and found strong evidence of an intention to
    rescind. First, the letter made specific reference to the fact that the terms
    of the HUMA were materially different from the disclosure and substantially
    different from the projected expenses. Secondly, the request for a return of
    the deposit made it clear that Mr. Harvey sought to restore both parties to their
    original positions, and that he sought rescission rather than repudiation. Finally,
    the letter was in writing and was addressed to the proper person. It therefore
    complied with the requirements under s. 74 of the Act.

[30]

Because Talon had not challenged
    Mr. Harveys right to rescind within ten days as required under s. 74(8) of the
    Act, Mr. Harvey was entitled to the return of his deposit, with interest.

ISSUES

[31]

The issues on these appeals can be
    characterized as follows:

1.

What is the standard of review?

2.

What is the applicable limitation
    period?

3.

Did Ms. Yims and Mr. Harveys
    communication to Talon constitute notices to rescind for the purposes of s. 74
    of the Act?

ANALYSIS

Issue 1  What is the Standard of Review?

[32]

What
    s. 74(7) of the Act means by the words notice of rescission is a question of
    law, and accordingly is reviewed on the correctness standard. Answering this
    question requires the interpretation of the Act, and it is well established
    that questions of statutory interpretation are questions of law (
Canada
    National Railway v. Canada (Attorney General)
, 2014 SCC 40, [2014] 2 S.C.R. 135, at para. 33). As
    stated in
Housen v. Nikolaisen
, 2002 SCC 33, [2002] 2 S.C.R. 235, at paras. 8-9,
    when there is a question of law, an appellate court is free to replace the
    opinion of the application judge with its own.

[33]

The
    question of whether the actual notices provided by the respondents met the
    requirements of the Act

is one of mixed fact and law, and reviewed on
    the palpable and overriding error standard. In her reasons, the application
    judge termed this question as one of fact. However, the application judge was
    applying the legal standard under s. 74(7) of the Act to the facts in front of her,
    and thus was dealing with a question of mixed fact and law (
Housen
, at para. 26).

[34]

In
    answering this question, the application judge considered all the evidence the
    law required her to consider. In my view she did not apply an incorrect
    standard or make an error in principle. Accordingly, her determination that the
    notices provided in this case were sufficient is entitled to deference, and
    should not be overturned absent palpable and overriding error (
Housen
, at paras. 26-37).

[35]

Whether
    Yims application was statute-barred is also a question of law, and thus
    reviewed by this court on the correctness standard. Leaving aside her alternative
    analysis, the application judge essentially held that the application as a
    whole was not brought out of time, as the 10-year limitation period in s. 4 of
    the
RPLA

applied, and not the 2-year period from the
Limitation
    Act
, 2002
.

[36]

Here, there
    is no factual component to the dispute about whether the application is statute-barred.
    As analyzed below, I have concluded that the notice provided to Talon by Ms. Yim
    on February 23, 2012 was a notice of rescission under s. 74(7). Accordingly,
    the limitation period began to run ten days later, when Talon failed to return
    the deposit or make an application to Superior Court. Ms. Yims application was
    launched more than two years later. The sole issue is thus whether an
    application for the return of a deposit is covered by the
RPLA
, in which case the
    application was not brought out of time,

or by the
Limitation
    Act
,
2002
, in which case the application was brought out of
    time. Answering this question requires the interpretation of s. 4 of the
RPLA
, in order to determine whether an application for
    return of deposit pursuant to s. 74 of the Act fits within the definition of an
    action for the return of land.

[37]

Accordingly,
    the limitation period issue is a question of law, without a factual component.
    If Ms. Yims application for the return of her deposit fits within the ten-year
    limitation period in s. 4 of the
RPLA
, the same would be true of other
    applications for statutory rescission pursuant to the Act. Thus, the
    application judges determination on this issue is not entitled to deference.

Issue 2: What is the Applicable Limitation Period?

The Parties Submissions

[38]

Talon submits that Ms. Yims
    notice of application was issued nearly three years after her cause of action
    arose. Regardless of whether her communication to Talon was one of termination
    or one of rescission, Ms. Yims application was brought out of time. Talon
    submits that the Act is not one of the statutes listed in Schedule A to the
Limitations
    Act
, 2002
, as retaining specific statutory limitation periods. Therefore,
    s. 4 of the
Limitations Act, 2002
applies and Ms. Yims claim is
    statute-barred for being brought more than two years after the discovery of the
    claim.

[39]

Ms. Yim argues that the
    application judge correctly held that her claim for rescission was one that
    fell within the provisions of the
RPLA
.
The action
    was to recover her deposit  a claim for money laid out in the purchase of
    land, which is part of the definition of land within the
RPLA
. The claim therefore fell within the
RPLA
.
Given the
    ten-year limitation period set out in s. 4 of the
RPLA
, the action was not statute-barred.

Applicable Legal Principles

[40]

This is a matter of statutory
    interpretation.
Statutory
    interpretation is governed by the approach described in Elmer Driedger,
Construction
    of Statutes
, 2nd ed.
    (Toronto: Butterworths, 1983), at p. 87, and adopted by the Supreme Court of
    Canada in
Re Rizzo & Rizzo Shoes Ltd
.
, [1998] 1 S.C.R. 27, at para. 21:

Today there is only one principle or approach, namely, the
    words of an Act are to be read in their entire context and in their grammatical
    and ordinary sense harmoniously with the scheme of the Act, the object of the
    Act, and the intention of Parliament.

Principles Applied

[41]

Section 4 of the
RPLA
provides as follows:

No person shall make an entry or distress, or bring an action
    to recover any land or rent, but within ten years next after the time at which
    the right to make such entry or distress, or to bring such action, first
    accrued to some person through whom the person making or bringing it claims, or
    if the right did not accrue to any person through whom that person claims, then
    within ten years next after the time at which the right to make such entry or
    distress, or to bring such action, first accrued to the person making or
    bringing it.

[42]

When those aspects of s. 4 of the
RPLA
that do not apply to this case are removed, it
    provides that:

No person shall bring an action to recover any land, but within
    ten years after the time at which the right to bring any such action first
    accrued to the person bringing it

[43]

Thus, there are 3 requirements in
    s. 4: an action, to recover and what must be recovered is land.

[44]

An action is defined in s. 1 of
    the
RPLA
to include any civil proceeding.

[45]

Recover is defined in legal
    dictionaries as gaining through a judgment or order. This was the definition
    adopted for the use of recover in s. 4 in
McConnell v. Huxtable
,
    2014 ONCA 86, 118 O.R. (3d) 561, at paras. 16-20, specifically, at para. 17, where
    this Court noted that the English Court of Appeal has held that the expression
    to recover any land in comparable legislation is not limited to obtaining
    possession of the land, nor does it mean to regain something that the plaintiff
    had and lost. Rather, recover means to obtain any land by judgment of the
    Court

[46]

I agree with the application
    judges approach on this point. This is clearly an action to recover.

[47]

The remaining question is whether what
    Ms. Yim seeks to recover  her deposit  is land. The definition of land in
    s. 1 of the
RPLA
is as follows:

land includes messuages and all other hereditaments, whether
    corporeal or incorporeal, chattels and other personal property transmissible to
    heirs, money to be laid out in the purchase of land, and any share of the same
    hereditaments and properties or any of them, any estate of inheritance, or
    estate for any life or lives, or other estate transmissible to heirs, any
    possibility, right or title of entry or action, and any other interest capable
    of being inherited, whether the same estates, possibilities, rights, titles and
    interest or any of them, are in possession, reversion, remainder or
    contingency;

[48]

In my view, the application judge
    was also correct in concluding that an application for the return of the
    deposit was an action for the recovery of land; specifically the recovery of
    money to be laid out in the purchase of land.

[49]

In coming to this conclusion, the
    application judge relied primarily upon
McConnell
. In that case, a former common-law spouse sought a
    constructive trust giving her joint ownership of the home she had once shared
    with her former spouse, with an alternative claim for damages based on unjust
    enrichment. Rosenberg J.A., at para. 38, explained his conclusion that the
RPLA

applied: the respondent is making a claim for recovery of land in the
    sense that she seeks to obtain land by judgment of the court. That the claim
    might provide her with the alternative remedy of a monetary award does not take
    away from the fact that her claim is for a share of the property.

[50]

Here, the application judge reasoned
    as follows at para. 12 [Yim]:

Ms. Yim paid her deposit to secure an interest in land. She
    seeks to recover the money which represents that interest. I find that such an
    interest is more easily identified than a constructive trust interest (as in
McConnell,

supra
), where the court must intervene and declare such an interest to
    exist based on certain legally accepted principles The fact that the remedy is
    a monetary award should not preclude the court from finding that it is a
    recovery of land, as in
McConnell,
supra.

[51]

In support of this conclusion, I
    note that several cases have clarified the relationship between claims for
    damages and claims covered by the
RPLA
. The Supreme Court in
Canson
    Enterprises Ltd. v. Boughton & Co.
, [1991] 3 S.C.R. 534, defined
    damages as a monetary payment for the invasion of a right at common law. In
Toronto
    Standard Condominium Corp. No. 1487 v. Market Lofts Inc.
, 2015 ONSC 1067,
    the plaintiff sought damages based off the defendants failure to meet its
    obligations under a Shared Services Agreement. Perell J., beginning at para.
    49, noted that the fact that real property is incidentally involved in an
    action does not necessarily mean that the action is governed by the
RPLA
.
    Among the cases he cited was
Metropolitan Toronto Condominium Corp. No.
    1067 v. L. Chung Development Co.
, 2012 ONCA 845. In that case, this Court
    made the following comment, at para. 7:

Finally, we do not think that the [
RPLA
] applies to the
    case as framed by the appellant. In its Statement of Claim, the appellant frames
    its action as one for damages flowing from the respondents' negligence, breach
    of contract, conflict of interest, and breach of duty of care, fiduciary duty
    and statutory duty. None of these relates to the categories of actions
    encompassed by the [
RPLA
].

[52]

Thus, had Ms. Yims claim been one
    primarily seeking damages, for example breach of contract, her application would
    be statute-barred. This would be true even if the claim for damages
    incidentally related to real property, specifically the condominium that was
    the subject of her APS. Claims for damages do not fit within the definition of
    land in the
RPLA
.


[53]

However, Ms. Yim is not seeking
    damages. She advances a specific claim under a provision in the Act, a
    provision that only allows for the return of her deposit and interest, not
    damages. The Tax Court defined a deposit in
Casa Blanca Homes Ltd.
    v. R.
, 2013 TCC 338, as a pool of money
    retained until such time as it is applied in partial payment or forfeited. As
    noted by the Alberta Court of Appeal in
Lozcal Holdings Ltd. v. Brassos
    Development Ltd
.
(1980), 111 D.L.R. (3d) 598, a genuine deposit
    ordinarily has nothing to do with damages, except that credit must be given for
    the amount of the deposit in calculating damages.

[54]

This leads me to the consideration
    of money to be laid out in the purchase of land, a phrase on which there is
    scant jurisprudence. However, in my view an action for the return of a deposit
    fits comfortably within its plain meaning. Frankly, I struggle to understand
    what would fit within this phrase if not an action such as this.

[55]

On the basis of the foregoing
    analysis, I conclude that Ms. Yims application is not statute-barred. This is
    also true of the amendment of her initial application to specifically claim
    statutory rescission. As her application is covered by s. 4 of the
RPLA
,
    the applicable limitation period is ten years. The application is an action,
    which is defined as any civil action. She seeks recovery, which has been
    defined as gaining through a judgment or order. And the recovery she seeks is
    of land; namely, her deposit, which is money laid out in the purchase of
    land.

[56]

I would therefore not give effect
    to this ground of appeal.

Issue 3: Did Ms. Yims and Mr. Harveys communications to Talon constitute
    notices to rescind for the purposes of s. 74 of the Act?

The Parties Submissions

[57]

Talon submits that the application
    judge ignored the clear wording of the communications sent by Ms. Yim and Mr.
    Harvey, which both reference termination of the APS. In finding that the Act
    does not prescribe a statutory form of a notice of rescission, the application
    judge failed to recognize that the Act specifically refers only and repeatedly
    to a notice of rescission. There is an important legal distinction between
    termination and rescission. A party cannot assert inconsistent rights and
    having terminated the APS, the respondents cannot claim rescission of an
    agreement they have already terminated. Talon submits that the respondents themselves
    were in breach of the APS by terminating.

[58]

Ms. Yim and Mr. Harvey argue that the
    application judge correctly interpreted the requirements for rescission under
    the Act. An examination of the object of the Act and the intention of the
    legislature supports a liberal interpretation of the phrase notice of
    rescission. As long as the notice is in writing, sent to the right person,
    sets out a ground of material change upon which rescission is based, and makes
    clear the intention of a purchaser to unmake a transaction, it should be
    sufficient. A purchaser should not be required to explicitly use the term
    rescission, if the notice nonetheless makes it sufficiently clear that this
    is what is sought.

A.

What is required for notice of rescission under s. 74 of the Act?

[59]

The next issue to be addressed is
    what is meant by the term written notice of rescission in s. 74(7) of the
    Act.

Applicable Legal Principles

[60]

As in the case of the issue over
    the appropriate limitation period, this issue is one of statutory
    interpretation. The principles set out above apply with equal force to this
    issue.

Principles Applied

[61]

The application judge correctly
    considered this issue through the lens that the Act is consumer protection
    legislation.

[62]

The fact that the Act is consumer
    protection legislation is well established. In
Ward-Price v. Mariners
    Havens Inc
.
(2001), 57
    O.R. (3d) 410 (C.A.), at para. 53, Borins J.A. stated that it is well
    recognized that the Act is consumer protection legislation. More recently, in
Lexington
    on the Green Inc. v. Toronto Standard Condominium Corp. No. 1930
, 2010
    ONCA 751, 102 O.R. (3d) 737, at para. 49, OConnor A.C.J.O. stated that a
    significant purpose of the Act is consumer protection. Rouleau J.A. cited this
    case in
Toronto Standard Condominium Corp. No. 2095 v. West Harbour
    City (I) Residences Corp.
, 2014 ONCA 724,
    when he acknowledged that consumer protection is a significant purpose of the
Condominium
    Act
.

[63]

The

goal
of
consumer

protection

laws
is to
place

consumers,

who

are

average

citizens

engaging
in
business

deals,
on
par

with

companies
or
citizens

who

regularly

engage
in
business.

This
    Court and the Supreme Court have identified guidelines for how consumer
    protection legislation is to be interpreted. The application judge referred to
Seidel
    v. Telus Communications Inc.
, 2011 SCC 15, [2011] 1 S.C.R. 531, for the
    proposition that consumer protection legislation must be interpreted generously
    in favour of the consumer. This proposition comes directly from Binnie J., who
    was considering the British Columbia
Business Practices and Consumer
    Protection Act

(the 
BCPCA
). At para. 37, he noted that
    the statutory purpose of the
BCPCA

was all about consumer
    protection. As such, its terms should be interpreted generously in favour of
    consumers. Another relevant Supreme Court case is
Celgane Corp v. Canada (Attorney
    General)
, 2011 SCC 1, [2011] 1 S.C.R. 3. In that case, the Court was considering
    the Federal Courts interpretation of a price-regulating provision in the
Patent
    Act
. Abella J. adopted the majority view of Evans J.A., who had held that
    because the provision could be interpreted in different ways, the one that best
    implemented the consumer protection objectives of such price-regulating
    provisions was the correct interpretation.

[64]

There is similar authority
    emanating from Ontario courts. In
Weller v. Reliance Home Comfort Ltd.
    Partnership
, 2012 ONCA 360, 110 O.R. (3d) 743, at para. 15, Rosenberg J.A.
    noted that the main objective of consumer protection legislation is to
    protect consumers. In
Wilson v. Semon
, 2011 CarswellOnt 15953 (S.C.),
    affd
Wilson v. Semon
, 2012 ONCA
    558, Lederer J. noted that consumer protection legislation, as its name
    implies, is designed to protect consumers.

[65]

The legislative history of s. 74
    of the Act provides further support for the identification of the statutory
    scheme dealing with rescission as consumer protection legislation. In
Abdool
    v. Somerset Place Developments of Georgetown Ltd.
(1992), 10 O.R. (3d) 120
    (C.A.), Robins J.A. discussed s. 52 of the
Condominium Act
, R.S.O. 1990,
    c. C. 26, which was roughly equivalent to s. 74 under the current Act. This
    provision allowed a purchaser to rescind an APS within ten days of receiving a
    material amendment to a disclosure statement, by giving written notice of
    rescission to the declarant or his or her solicitor.

[66]

Robins J.A. noted that when the
Condominium
    Act

was initially enacted in 1967 (S.O. 1967, c. 12), it imposed no
    disclosure requirements on developers, and provided little protection to
    purchasers. The predecessor to s. 52 (and thus the ultimate predecessor of the
    current s. 74) was first enacted as part of the 1974 amendments to the
Condominium
    Act
(S.O. 1974, c. 133, s. 14). This provision introduced the concept of
    full disclosure into the Act. However, consumers apparently continued to
    experience problems. This led to further amendments in 1978 (S.O. 1978, c. 84),
    introducing s. 52, which was later carried over into the 1990 Act. In
    introducing the 1978 Act in the Legislature on June 1, 1978, Larry Grossman,
    the Minister of Consumer and Commercial Relations, described it as a form of
    consumer protection legislation. He stated that the Act would provide
    purchaser protection to consumers by requiring "tighter standards of
    disclosure between sellers and purchasers; allowing time for purchasers to
    become informed of their responsibilities; and clarifying purchasers' rights
    during the interim occupancy period.

[67]

Later in
Abdool
, in
    discussing what was required in the disclosure from the declarant, Robins J.A.
    made the following comments: the vagueness of the requirements and the absence
    of statutory guidelines mandate a broad and flexible approach  not a rigid or
    stringent one  in determining whether a given disclosure statement is
    adequate. In my view, there is no reason why this reasoning about disclosure
    required from the vendor should not also be applied to the purchaser, in
    determining whether a given notice of rescission is adequate.

[68]

Further support for the
    application judges approach to interpreting what is required for notice of
    rescission under s. 74 of the Act can be found in how a right to rescind has
    been interpreted in another statute that has been identified as consumer
    protection legislation  the
Arthur Wishart Act
, S.O. 2000, c. 3 (the 
AWA
).

[69]

To start, it is clear that the
AWA
is consumer protection legislation. In
2240802 Ontario Inc. v. Springdale
    Pizza Depot Ltd
.
, 2015 ONCA 236, at paras. 49-50, I adopted the
    comments of the motion judge that The [
AWA
] itself is in many ways
    consumer protection legislation It is remedial legislation, which the Court
    may broadly apply.

[70]

Section 6 of the
AWA
provides franchisees with the right to rescission via a statutory provision not
    dissimilar to that found in the Act. The franchisee can exercise its right to
    rescind by providing the franchisor with a notice of rescission within specified
    timeframes, where the franchisor provides late disclosure, or no disclosure.
    Following reception of such a notice, the franchisor has certain obligations
    towards the franchisee, which must be fulfilled within 60 days.

[71]

Pursuant to s. 6(3), the only
    requirements for the franchisees notice of rescission is the following:
    Notice of rescission shall be in writing and shall be delivered to the
    franchisor, personally, by registered mail, by fax or by any other prescribed
    method, at the franchisors address for service, or to any other person
    designated for that purposes in the franchise agreement. This provision is
    substantially similar to the rescission provision found in s. 74(7) of the Act.

[72]

The issue of what constitutes a
    notice of rescission under s. 6(3) of the
AWA

was considered
    in detail in
779975 Ontario Ltd. v. Mmmuffins Canada Corp.
, 2009
    CarswellOnt 3262 (S.C.), by Strathy J. (as he then was). In that case, the
    franchisee started an action for common law rescission, based on alleged
    pre-contractual misrepresentations made by the franchisor. The statement of
    claim made no mention of the
AWA

or of the statutory rescission
    remedy. More than two years later the franchisee commenced a second action,
    asking for a declaration that service of the statement of claim in the earlier
    action had been a notice of rescission under the
AWA
, thus
    interrupting the limitation period. At para. 45, Strathy J reasoned as follows:

While s. 6 of the
AWA
does not specify the contents of
    the notice of rescission, it seems to me that the notice must at least be
    sufficient to bring home to the franchisor that the franchisee is exercising
    its statutory rights of rescission under the
AWA
, and to inform the
    franchisor that the clock has begun to run on the 60-day period in s. 6(6). In
    light of the very substantial obligations on franchisors to compensate
    franchisees for breach of the disclosure duty, the franchisor is entitled to
    know whether a violation of the
AWA
is being alleged and
    whether the franchisee is claiming remedies under that statute. The franchisor
    is not able to fulfill its statutory obligations unless the notice is at least
    adequate to inform it that the franchisee has rescinded the agreement.
The
    notice does not have to be in specific language, but it must at least make it
    clear that the franchisee is exercising its statutory right to rescind the
    franchise agreement and demanding the compensation to which it is entitled.
[Emphasis added.]

[73]

Ultimately, at paras. 49-50,
    Strathy J. concluded that the statement of claim in the first action was not
    sufficient to constitute notice of rescission to the franchisor within the
    meaning of the
AWA
. The statement of claim made no reference to the
AWA
,
    nor to the franchisors failure to provide a disclosure document or statement
    of material change in time or at all, and there was nothing to indicate to the
    franchisor that the franchisee was claiming the relief set out in s. 6(6). The
    statement of claim did not purport to be an exercise of a statutory right by
    the franchisee  on the contrary, it was simply an action for rescission and
    damages that had nothing to do with the
AWA
.

[74]

The
Mmmuffins
case
    provides support for the application judges conclusion that a notice of
    rescission under the Act does not need to include the word rescind or
    rescission, or reference the relevant section of the Act. As Strathy J. made
    clear, the notice does not have to be in specific language. What is required
    is that the notice indicates that the purchaser is exercising his or her statutory
    authority to rescind or unmake the APS based on a material change. Where
    the notice achieves this, the declarant can decide whether to apply to the
    Superior Court for a determination of the materiality of the change set out.

[75]

I agree with the application
    judges interpretation that a notice of rescission pursuant to s. 74(7) of the
    Act does not require the use of the words rescind or rescission. As
    previously indicated, the Act is well established to be consumer protection
    legislation. It therefore must be interpreted generously in a manner that
    protects consumers. Consumers will not always be represented by counsel.
    Consumers will not always be familiar with words such as rescission and rescind.
    For consumers to be on a level playing field with developers in accessing the
    respective rights afforded them under the Act, they must be given considerable leeway
    in their use of language. As long as the purchasers intention to undo the
    transaction based on a material change is clear, that is sufficient. That is
    all the declarant needs to understand in order to take advantage of the
    statutory rights then available to it.

A.

Did the respondents' correspondence constitute notice of
    rescission?

[76]

Given I agree with the application
    judges view of the requirements of s. 74(7) of the Act, the final question to
    be asked is whether there is any reason to interfere with her conclusion that
    Ms. Yims and Mr. Harveys correspondence met these requirements. For the
    reasons that follow, I see no reason to interfere with the application judges
    determination that the notices provided were sufficient to qualify as notices
    of rescission.

[77]

It is true that both notices utilized
    the word terminate. However, both also included repeated requests that the
    deposit be returned. As the application judge noted (para. 56 of Mr. Harvey, 54
    of Ms. Yim), return of deposit is a remedy consistent with rescission, and not
    with repudiation. As well, both notices referred to the materially different
    terms contained in the HUMA as a basis for undoing the transaction. The HUMA had
    just been disclosed to Ms. Yim and Mr. Harvey a few days before their
    respective notices. They were well within the window to claim rescission based
    on a material change.

[78]

Turning first to Ms. Yim, although
    it is true that she was represented by counsel, I do not see how this factor is
    relevant to a determination of whether the notice was sufficiently clear that
    Ms. Yim wanted to undo the transaction based on a material change. Regardless,
    Ms. Yims counsel wrote a follow-up email to Talon the day after the initial
    notice, making it clear that rescission pursuant to s. 74(7) of the Act was
    being sought. In my view, considering these factors as a whole, it was
    reasonable for the application judge to conclude that the notice provided in
    the case of Ms. Yim was sufficient to meet the requirements of the Act.

[79]

I also agree with the application
    judge (para. 53 of Ms. Yim appeal) that the issue here is not whether the
    change to the HUMA actually was a material change. That issue does not come
    into play. Talon received valid notices of rescission under the Act, based on
    an alleged material change in the HUMA. Talon had ten days to make an
    application to Superior Court for a determination as to whether the alleged
    material change was in fact material. Having failed to do so, it is now too
    late for Talon to argue that the change was not material.

[80]

I would therefore not give effect
    to this argument in the appeal involving Ms. Yim. Her notice was a valid notice
    of rescission under the Act.

[81]

The case of Mr. Harvey warrants a
    similar analysis and the same conclusion.

[82]

Mr. Harveys letter of February 24
    did not contain the word rescind, and did not reference s. 74 of the Act. Nor
    did he provide a follow-up communication the next day, unlike Ms. Yim. However,
    his letter did contain information sufficient to bring home to the declarant
    that s. 74 was being engaged. As noted by the application judge, Mr. Harvey
    both asked for the return of his deposit, and relied on the material differences
    in the HUMA. Given this, I see no error in the application judges conclusion that
    Mr. Harveys letter met the requirements under s. 74 of the Act. It was a valid
    notice of rescission.

CONCLUSION

[83]

I
    have concluded that the application judge committed no errors of law in
    interpreting the Act, nor palpable and overriding errors in applying the law to
    the facts of this case. Accordingly, her conclusion that the notices provided
    were sufficient should not be disturbed on appeal. Given that both applications
    were commenced within the time required, Ms. Yim and Mr. Harvey are both entitled
    to an order requiring Talon to refund their deposits with interest, in
    accordance with s. 74(9) of the Act.

DISPOSITION

[84]

For these reasons, I would dismiss
    both appeals. I would order Talon to pay the cost of each respondent  $15,000 in
    the Yim appeal and $10,000 in the Harvey appeal. These amounts include disbursements
    and applicable taxes.

Released: March 31, 2017
    ("RAB")

"Gloria Epstein J.A."

"I agree. R.A. Blair J.A."

"I agree. Grant Huscroft J.A."





[1]

Ms. Yims husband Mr. Kim was added as an applicant subsequent
    to Ms. Yims commencing her application. For ease of reference, I will refer to
    the applicants jointly as Ms. Yim.



[2]

From the record, it appears that Talon did not
    take the position, which it now advocates on appeal, that the application as a
    whole had been brought out of time in the first place.


