Executive Summary: Key Legal and Evidentiary Issues

• Stilton Corp. Ltd. sought review of a motion judge's order enforcing a vesting order in favour of Paterson Veterinary Professional Corporation.
   
• Paterson had obtained specific performance of a settlement agreement requiring Stilton to transfer title to real property for $1,250,000 plus HST.
   
• Delay of six years in renewing the vesting motion was found to have been adequately explained given the prior adjournment sine die on consent.
   
• Stilton claimed prejudice from being denied rent during the delay and argued the motion judge failed to weigh Paterson's alleged breaches of court orders.
   
• No order had ever required Paterson to pay rent, so Paterson was not found to be in default of any court order.
   
• Costs of $10,000 were ordered payable to Paterson as agreed between the parties.
   

Facts of the case

Paterson Veterinary Professional Corporation ("Paterson") brought an action for specific performance of an agreement of purchase and sale of real property, under which it held a lease with an option to purchase. That action settled in December 2013, with terms providing that following a five-year lease extension, Stilton Corp. Ltd. ("Stilton") would transfer title to Paterson in exchange for a purchase price of $1,250,000 plus HST. Paterson tendered payment in 2018, but Stilton refused to close. Paterson was then granted an order for specific performance of the settlement agreement, along with a vesting order. Stilton appealed and sought a stay pending appeal; that motion was resolved by consent order, staying the judgment on terms requiring Paterson to make monthly payments of $1,719.51 for taxes, maintenance, and insurance ("TMI"), without prejudice to Paterson's position that no TMI was owed. Paterson did not agree to Stilton's separate demand for monthly rent of $7,300. Stilton's appeal was dismissed on September 24, 2019, with an order that Stilton transfer title within 30 days, failing which title would vest in Paterson within 90 days of Paterson fulfilling its contractual obligations. Paterson tendered again on October 21, 2019, and was again refused, prompting a motion to vest title upon payment of the purchase monies into court. Stilton then obtained a stay pending an application for leave to appeal to the Supreme Court of Canada, and the vesting motion was adjourned sine die, with Paterson continuing to pay monthly TMI without prejudice. Leave to appeal to the Supreme Court was refused on April 2, 2020. Six years later, Paterson scheduled a hearing of the adjourned vesting motion to give effect to the September 24, 2019 order. Stilton responded with a cross-motion to dismiss and sought various alternative relief, including a set-off for rent. The motion judge found the delay in renewing the motion had been satisfactorily explained and granted Paterson's motion to enforce the order. Stilton then sought review of that decision.

Policy and legislative provisions at issue

The dispute centred on the terms of the December 2013 settlement agreement and the September 24, 2019 appellate order, rather than on any statute or regulatory provision. The settlement agreement obliged Stilton to transfer title to Paterson following the five-year lease extension in exchange for the $1,250,000 purchase price plus HST. The interim consent order staying the 2019 judgment required Paterson to pay monthly TMI of $1,719.51, expressly without prejudice to its right to dispute that obligation, while withholding consent to the separate $7,300 monthly rent demanded by Stilton. The September 24, 2019 order itself set the mechanics for closing: transfer of title within 30 days, or vesting in Paterson within 90 days of Paterson performing its contractual obligations.

Reasoning and analysis

The panel found no basis to set aside the motion judge's order. It noted that Stilton had repeatedly breached its own contractual obligations and was accordingly not well positioned to complain about Paterson's conduct. Contrary to Stilton's submissions, Paterson had never been ordered by the court to pay rent and so could not be found in default of any such order. The panel held that the motion judge did not err in the exercise of his discretion to enforce the vesting order despite the lapse of time. It further held that the question of whether rent was owed to Stilton was not a matter to be resolved on this motion, noting that Stilton had a separate action outstanding in the Superior Court, which was the appropriate venue for that claim.

Ruling and overall outcome

The motion for review was dismissed, upholding the motion judge's order enforcing Paterson's vesting order. Costs of the motion were awarded to Paterson, the responding party, in the amount of $10,000 all-inclusive, as agreed between the parties.