Executive Summary: Key Legal and Evidentiary Issues

• Dispute arises from a 2015 rent-to-own agreement involving a residential property in Port Stanley, Ontario.

• The legality of the plaintiff’s eviction and the subsequent transfer of the property is challenged.

• Plaintiff’s non-residency in Ontario and asset sufficiency are central to the motion for security for costs.

• Timing and justification for the defendants’ motion for security for costs are questioned.

• Plaintiff’s claims of financial hardship and alleged impecuniosity are considered.

• The court evaluates whether the plaintiff’s claim is plainly without merit or should proceed to trial.

Facts of the case

Kamil Dragancik, the plaintiff, commenced an action concerning a 2015 “rent-to-own” agreement with JAAG Rentals Inc. and JAAG Properties Inc. for a residential property in Port Stanley, Ontario. The agreement consisted of a purchase option contract and a tenant lease agreement, under which the defendants would hold title to the property for five years while the plaintiff made monthly payments, combining rent, fees, and deposits toward a down payment. The plaintiff was granted an option to purchase the property at the end of the term by paying any remaining balance, after which the title would be transferred to him.

The plaintiff’s claim, issued in December 2021, seeks declaratory relief, general damages of $500,000 for breach of the duty of good faith and fair dealing, civil conspiracy or unjust enrichment, damages for breach of contract, disgorgement of sums paid under the agreement, and additional aggravated and punitive damages. He alleges that despite his substantial performance under the agreement, the defendants unlawfully breached the contract by claiming defaults, denying his purchase option, and demanding an “early buy out fee.” The plaintiff also alleges that he was unlawfully evicted in May 2020 based on the defendants’ misrepresentation that he had abandoned the property, as evidenced by a consent order from the Landlord and Tenant Board acknowledging the eviction was unlawful. In May 2020, the property was transferred to McTavish Real Estate Investing Inc.

The defendants deny liability, asserting the contracts were separate and unilateral, and claim the plaintiff was in frequent default and intended to return to the European Union. They state the property was sold due to prohibitive carrying costs.

Outcome and analysis

The defendants moved under rule 56.01 for an order requiring the plaintiff to post security for costs, citing his non-residency in Ontario and insufficient assets to satisfy a potential adverse cost award. The plaintiff admitted he was not ordinarily resident in Ontario but argued it would be unjust to require security, stating the defendants’ conduct forced him to leave Ontario and caused his impecuniosity. He also claimed to have personal property in Ontario that could satisfy a cost award.

Justice Tranquilli dismissed the defendants’ motion for security for costs. The court found that the defendants delayed unreasonably in bringing the motion, as they were aware of the plaintiff’s residency status since at least 2021. The judge noted that the trial had been adjourned due to the defendants’ failure to answer undertakings, not the plaintiff’s conduct. The court accepted there was some evidence of prejudice to the plaintiff and found that the defendants failed to provide particulars to support their assertion that the plaintiff’s claim was without merit. The plaintiff provided sworn evidence regarding the agreement and the defendants’ acknowledgment of the unlawful eviction. The court concluded that requiring the plaintiff to post security for costs would be unjust in the circumstances and that the motion appeared to be a litigation tactic.

No monetary award, costs, or damages were granted or ordered in this decision. The successful party on the motion was the plaintiff, Kamil Dragancik. The court directed that if the parties could not resolve costs, the plaintiff was to deliver written cost submissions by December 1, 2025, and the defendants by December 8, 2025. The total amount to be awarded, if any, has not yet been determined.