Ruling notes would-be seller repeatedly breached contractual obligations
In a proceeding arising from an agreement of purchase and sale of real property (APS), the Ontario Court of Appeal denied a motion to review a decision granting a motion to enforce a Sept. 24, 2019, order to transfer title.
Paterson Veterinary Professional Corporation v. Stilton Corp. Ltd., 2026 ONCA 590, involved an APS that granted Paterson Veterinary Professional Corporation a lease with an option to purchase.
Under the APS, Stilton Corp Ltd. would transfer title to Paterson, which would pay a $1.25m purchase price, plus harmonized sales tax.
Paterson filed an action for specific performance of the APS. In December 2013, the parties settled this action.
Tender in 2018 refused
Though Paterson tendered in 2018, Stilton refused to close. A court granted Paterson an order for specific performance of the settlement agreement, as well as a vesting order.
Appeal of specific performance order
Before the Ontario Court of Appeal, Stilton appealed and moved for a stay pending appeal. The parties settled the interim motion by consenting to an order staying the judgment on certain terms.
Under these terms, Paterson would pay $1,719.51 monthly for taxes, maintenance, and insurance (TMI), without prejudice to Paterson’s right to argue that TMI was not payable. Paterson refused to pay $7,300 per month for rent, as demanded by Stilton.
On Sept. 24, 2019, the Ontario Court of Appeal dismissed Stilton’s appeal. If Stilton failed to transfer the property title within 30 days, the title would vest in Paterson within 90 days of its performance of its contractual obligations.
Tender in 2019 refused
Though Paterson tendered on Oct. 21, 2019, Stilton declined to close. Paterson moved to vest title upon its payment of the purchase price into court.
Supreme Court of Canada proceeding
Stilton successfully sought a stay pending an application for leave to appeal to the Supreme Court of Canada. While its motion to vest remained adjourned, Paterson had to keep paying monthly TMI, without prejudice.
Ultimately, on Apr. 2, 2020, Stilton’s leave application to the Supreme Court failed.
Motion to enforce order to transfer title
After six years, Paterson scheduled a hearing of the adjourned motion to vest, in an effort to enforce the Ontario Court of Appeal’s Sept. 24, 2019, order. In a cross-motion, Stilton requested dismissal and alternatively sought a set-off of rent and other relief.
Last May 7, Justice Steve Coroza of the Ontario Court of Appeal granted Paterson’s motion to enforce the order. Noting the motion to vest’s adjournment on consent, the motion judge saw a satisfying explanation for the delay in renewing the motion and acknowledged the steps taken in the interim.
Review motion denied
Stilton moved for a review of the motion judge’s decision. The Ontario Court of Appeal rejected this motion upon finding no basis to set aside the motion judge’s order and no error in the judge’s exercise of his discretion.
The appeal court noted that Stilton was not in a strong position to complain about Paterson, given its repeated breaches of its contractual obligations.
The appeal court ordered Stilton to pay Paterson all-inclusive motion costs of $10,000, as the parties had agreed.
No obligation to pay rent
The Ontario Court of Appeal held that Paterson was not in default because it had not ordered it to pay rent.
The appeal court added that the current motion was not addressing whether Paterson should pay rent, an issue that Stilton could raise in its outstanding action before the Ontario Superior Court of Justice.
Ontario Court of Appeal’s previous real estate cases
Here are some other recent real estate-related decisions by the Court of Appeal for Ontario.
In a case arising from a failed real estate transaction, the Ontario Court of Appeal issued a July 7 order for a new trial before another judge to determine whether a real estate agent had breached the standard of care by contributing to his clients’ misunderstanding of a purchase agreement.
In a proceeding involving premises within a shopping plaza leased by McDonald's Restaurants of Canada Limited, the Ontario Court of Appeal issued a Feb. 20 decision upholding the dismissal of the plaza owner’s application for a declaration that the commercial lease had expired.
On Jan. 16, the Ontario Court of Appeal refused to extend the time to file a leave application sought by a real estate broker who requested the reinstatement of his licence, which the Real Estate Council of Ontario had revoked in 2022.
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