Ross v. Naicken, 2011 ABQB 45

Court of Queen ’ s Bench of Alberta Citation: Ross v. Naicken, 2011 ABQB 45 Date: 20110127 Docket: 0703 09438 Registry: Edmonton Between: James Ross Plaintiff/Defendant by Counterclaim - and - Manie Naicken, Collin Naicken, Ravinder Naicken and Vidya Naicken Defendants/Plaintiffs by Counterclaim _______________________________________________________ Memorandum of Decision of the Honourable Mr. Justice Sterling Sanderman _______________________________________________________ [ 1 ] James Ross and Manie Naicken became acquainted with one another when Mr.

Naicken purchased a condominium located at 1253 Hooke Road in Edmonton, Alberta, owned by Mr. Ross. Mr. Ross received slightly in excess of $18,000 from the sale of this condominium after two mortgages were discharged and a lawyer’s account was paid. Mr. Ross was in need of alternative accommodation. He asked Mr. Naicken to help him finance this acquisition.

[ 2 ] The two of them determined that Mr. Ross would not qualify for a mortgage because of his financial situation and earning capacity. Mr. Naicken suggested that his son Collin and Collin’s wife Ravinder purchase the condominium Mr. Ross was interested in obtaining. They could qualify for a mortgage and would enter into an agreement to sell this residence to Mr. Ross. This residence was located at #211, 14004-26th Street in Edmonton, Alberta. Collin and Ravinder arranged financing with National Trust Mortgage and acquired the property.

On February 10, 1993, Collin and Ravinder entered into a purchase agreement with Mr. Ross in relation to this condominium. The purchase price of $39,500 was the same that the Naickens paid for it. Mr. Ross paid a deposit of $10,000 to Manie Naicken towards the total purchase price. He used some of the funds from the sale of the Hooke Road property for this purpose. [ 3 ] The closing date for the purchase of the condominium by Mr. Ross from Collin and Ravinder was set for December 1, 1993. This lengthy period of time was agreed upon in order to give Mr. Ross the opportunity to qualify for a mortgage on his own.

He claimed he would receive sufficient funds from an active Workers’ Compensation claim that would allow him to complete the transaction. [ 4 ] To cover the period of time between February and December of 1993, Manie Naicken prepared a rental agreement for the property. Mr. Ross signed it as tenant and Manie Naicken signed it as an agent for the landlord, Collin Naicken. This agreement was signed March 4, 1993. Mr. Ross agreed to pay rent in the sum of $400 a month starting on April 1, 1993. It was anticipated that this tenancy would end when Mr.

Ross qualified for a mortgage and could complete the transaction. [ 5 ] One of the terms of the agreement stated that if Mr. Ross failed to pay for two months rent, the purchase agreement would come to an end and Mr. Ross would lose 50 percent of the deposit he made pursuant to the Real Estate Purchase Contract signed in February of 1993. [ 6 ] Over the years, ownership of the condominium located on 26th Street has changed. Collin and Ravinder sold it to Manie on July 26, 1998. In April of 2001, Manie sold it to Ravinder and Vidya Naicken, his daughters-in-law. Mr.

Ross continues to live in the condominium and title has never been transferred to him. Since he moved into the condominium in early 1993, Mr. Ross has signed additional tenancy agreements with Manie Naicken. He signed them as a tenant. Mr. Naicken either signed as a landlord or property manager. Mr. Naicken either dealt with the condominium as the owner when he occupied that status or as the agent of the other Defendants. [ 7 ] Mr. Ross continued to pay rent during the time he occupied the condominium until recently.

When he stopped paying rent, monies were deposited in trust to be held until the issues raised by the lawsuit are settled. [ 8 ] Mr. Ross never qualified for a mortgage. He claims that he expected to assume the mortgage that Collin and Ravinder obtained in 1993. Mr. Ross petitioned for bankruptcy in December of 1994. In the summer of 2007, he started this lawsuit against the Defendants. Mr. Ross claims specific performance of the purchase agreement. In the alternative, he claims damages for the failure of the Defendants to transfer title to him pursuant to the agreement. [ 9 ] The Defendants allege that Mr.

Ross was repaid his $10,000 deposit and surrendered any interest he had in the condominium unit. They claim that he has remained a renter ever since he was unable to qualify for a mortgage and take title of the unit. The Defendants seek judgment for the outstanding rental arrears and a Writ of Possession forcing Mr. Ross to leave the unit. These are the issues that were explored during this trial. [ 10 ] Mr. Ross claims that he has been treated unfairly by Manie Naicken. He believes that Mr. Naicken has used his superior knowledge in the area of conveyancing to deprive him of property that is rightly his.

There is no doubt that Mr. Naicken’s knowledge in this area is superior to Mr. Ross’. Mr. Ross takes the position that because of this, Mr. Naicken should have suggested that Mr. Ross obtain independent legal advice whenever he was required to sign a document that bound him to a course of action. [ 11 ] Mr. Ross claims that the understanding he had with the Naickens was that he would rent the property for a period of time to prove to them that he was capable of making the required mortgage payments. He would then assume the mortgage obtained by Collin and Ravinder and take title to the property.

He claims that Manie Naicken falsely represented to him that he could not assume the mortgage and that he would never qualify for one on his own. He claims that he believed these false representations and never attempted to obtain his own mortgage to his detriment. He claims that the Naickens have been unjustly enriched and he asks the Court to give him the appropriate relief.

[ 12 ] Manie Naicken disagrees vehemently with the suggestions made by Mr. Ross. He agrees that he befriended Mr. Ross and wanted to give him an opportunity to purchase another residence after he sold the Hooke Road property. He devised this scheme with Mr. Ross and his son Collin in order to provide Mr. Ross with financing until his Workers’ Compensation Claim was settled. Mr. Naicken takes the position that Mr. Ross claimed that he would be able to take over the obligation of paying for the condominium or servicing the mortgage once his claim for between $20,000 to $30,000 was finally processed. Mr.

Ross was to obtain his own mortgage once he was in a position to qualify for it. [ 13 ] The purchase price of $39,500 had been reduced by the $10,000 deposit. A recovery in the amount anticipated would have made it a certainty that Mr. Ross would have been able to fulfill his obligations in relation to the purchase of the property. [ 14 ] There was no Workers’ Compensation Claim payable to Mr. Ross. This was either a false hope entertained by him or a blatant misrepresentation to the Naickens. Mr. Ross was never gainfully employed. He survived on Social Assistance or AISH payments.

He was never in a position to qualify for a mortgage. His financial situation made it necessary for him to ask for the return of his down payment. Mr. Naicken claims he complied with this request. From then on, there was no realistic possibility that Mr. Ross would ever be able to qualify for a mortgage and the original rental agreement was reworked on a couple of occasions to reflect changing realities. [ 15 ] The Defendants take the position that Mr. Ross was unable to take advantage of the position they placed him in to acquire title to this property and has remained a tenant since he moved in.

They desire to end that relationship and want to be paid for the outstanding arrears. [ 16 ] The Statute of Frauds is applicable to this case. The purpose of the Statute of Frauds is to prevent false allegations being made in relation to the terms of an agreement for the transfer of land. The Statute of Frauds requires that the terms of an agreement for the sale of land be reduced to writing.

There must either be a written contract for the sale of the land or a finding of an oral agreement that is confirmed in writing that clearly establishes the essential terms of the contract and that the parties have agreed to those terms. This written memorandum must contain the material terms of the agreement. It must clearly identify the parties, the property to be transferred and the consideration flowing between the parties. [ 17 ] As Mr. Ross and Manie Naicken offer differing versions about their relationship, it is necessary to see what the documents prepared by the parties reveal.

The vast majority of the documents entered as exhibits in this trial have been created by Manie Naicken. Very few were created by Mr. Ross. Both signed the documents. [ 18 ] Mr. Naicken created the receipt dated January 22, 1993 indicating that Mr. Ross received $1500 from him in relation to the purchase of the Hooke Road property. Mr. Naicken used a blank form entitled “Real Estate Purchase Contract” to set out the terms for the purchase of the 26 th Street property. Mr. Naicken created the rental agreement dated March 1, 1993 in relation to this property. The rent was set at $400 a month.

The next rental agreement was dated May 1, 2002. It was prepared by Mr. Naicken. It set the rent at $500 a month. A rental agreement dated October 5, 2004 was prepared by Mr. Naicken. In this agreement, Mr. Ross agreed to pay rent in the sum of $650 a month. All of these documents were signed by Mr. Ross as tenant. He clearly acknowledged this status. [ 19 ] Mr. Ross did prepare one document that sets out a rental agreement. It was entered as Exhibit 3 in this trial. It refers to the lease agreement dated October 5, 2004 that was to take effect on November 1, 2004 for a period of one year. Mr.

Ross agreed that he was a tenant and agreed to pay rent of $650 a month from November 1, 2004 to November 2, 2005. [ 20 ] A critical document dated July 29, 1996 was prepared by Mr. Naicken but signed by Mr. Ross.

This document states, “I, Jim Ross, hereby surrender all my right, title and interest in and to the one-bedroom condo situate at #211-14004-26th Street, Edmonton, Alberta, in favour of Manie Naicken as of July 8, 1994, having received the balance of $5,000 being the balance of $10,000 deposited on the real estate purchase agreement between Collin Naicken and myself dated February 20, 1993.” [ 21 ] This document acknowledged the return of Mr. Ross’ $10,000 deposit and his surrender of any interest in this property. It is a document that, if accepted as being valid, is fatal to Mr. Ross’ position.

[ 22 ] These are the only documents entered in the trial that refer to this property and how it was viewed by the parties. These are the documents that set out the relationship between Mr. Ross and Mr. Naicken in relation to the condominium at 26 th Street. None of them are supportive of Mr. Ross’ position. Quite the contrary, they are supportive of the position of Manie Naicken. They clearly indicate that Mr. Ross signed documents where he acknowledged that he was a tenant and that Mr. Naicken or members of his family were landlords. They are supportive of the claim that Mr.

Ross could not close the deal as originally contemplated and was given his deposit back and that he remained a renter of this property. None of the written documentation before the Court supports the oral testimony of Mr. Ross. In fact, it contradicts a lot of the viva voce evidence that he gave in this trial. [ 23 ] A close examination of Mr. Ross’ oral evidence creates further problems for his position. The problems have nothing to do with his inability to remember fine detail. One cannot be expected to recreate the events covering a period in excess of 15 years with precision. The problems with Mr.

Ross’ inherent credibility arise from the fact that his oral testimony differs to a significant extent from documents that he was instrumental in creating when he had an obligation to provide truthful information. The documents include a statement of his affairs provided to the Receiver in Bankruptcy appointed to administer his bankruptcy, an Asset Report submitted in order to qualify for Assured Income for the Severely Handicapped and information provided in order to qualify for Social Assistance. Information in the first of these documents was provided as if it was under oath.

The second two did not have this requirement, but implicit in providing information to these government agencies, was the need to be candid and truthful with the recipient of the information. [ 24 ] Mr. Ross clearly misrepresented the state of affairs to his Receiver in Bankruptcy and gave information inconsistent with his trial testimony. In a statement dated December 21, 1994, he claimed to have no interest in any real property. This was at a time he claimed he was actively seeking to take over the mortgage responsibilities for the 26 th Street property.

Furthermore, in this statement he lists Manie Naicken as a creditor. He claims to owe Manie $800. During this time period he was making payments of $400 a month to Mr. Naicken in order to remain in the property. Lastly, he claims that he only received $10,000 for the sale of the Hooke Road property. He claims that he used those funds to pay outstanding debts. He did not provide any information that he used $10,000 as a deposit in relation to his attempt to acquire the 26 th Street property. This was a document sworn as being true before a Commissioner for Oaths. The position taken by Mr.

Ross in December of 1994 was markedly different than that taken at this trial. [ 25 ] The information that Mr. Ross provided to government agencies in order to qualify for AISH in 1999 was similarly deficient. He portrayed himself as a renter of property. He did not claim to have any interests in real property. Mr. Ross’ credibility suffers substantially because of the casual way he deals with the necessity of being truthful. [ 26 ] The manner in which he dealt with a significant issue at this trial has had a tremendous impact upon his credibility. Mr.

Ross took the position that the document referred to earlier in this decision dated July 29, 1996 where he gave up any interest in the 26 th Street condominium was never signed by him. He was adamant in this denial. In order to determine whether his signature was forged, a document examiner was retained to assist the parties. The document examiner concluded that it was probable that Mr. Ross did sign the surrender agreement prepared by Manie Naicken. [ 27 ] When supplied with the report from the document examiner, Mr. Ross accepted it.

At trial, he introduced, for the first time, a completely different reason why this document should not be considered by the Court. He suggested that at the time he signed this document he was drunk. He suggested that Mr. Naicken provided him with alcohol in order to overcome his reluctance to sign the document. This assertion was advanced when confronted with the document at trial. It is apparent that Mr. Ross will change his testimony if it is convenient to do so in order to support his position. This has a tremendous adverse affect upon his credibility. [ 28 ] A common theme advanced by Mr.

Ross at trial was that he could not effectively resist the control that Mr. Naicken had over him. He claimed to feel threatened by Mr. Naicken and did his bidding at all times. He claimed to be unable to stand up to him. This suggestion is preposterous. When Mr. Ross first dealt with Mr. Naicken, the latter was 66 years of age. Mr. Ross was 39. By the time this matter came to trial, Mr. Naicken was in his mid eighties. He is a diminutive man who is far from physically imposing. Mr. Ross is a much more robust individual and it is inconceivable that he could be forced to do Mr. Naicken’s bidding.

This is a further example of how Mr. Ross grasps at straws in order to support an untenable position. [ 29 ] None of the documents entered as exhibits at this trial support Mr. Ross’ position. They support the position taken by the Defendants. For reasons already outlined, Mr. Ross’ credibility has been severely compromised. There is another reason for rejecting his evidence. He suggests that he was in a position to assume the mortgage payments in relation to the condominium located at 26 th Street and that the Defendants frustrated his attempts to do so. This suggestion is patently false.

He was never in a position to assume responsibility for servicing this mortgage. A close examination of Mr. Ross’ earning capacity reveals that he would not qualify for

funding from any financial institution. [ 30 ] An examination of the income tax returns filed by Mr. Ross between 1991 and 2000 is instructive. In 1991 his total income was $4,062. Over three-quarters of this income was derived from Employment Insurance. In 1992 his total income was $7,213. Over $6,000 of this sum came from Social Assistance. In the year he was to assume the mortgage, his total income was $11,313. [ 31 ] The following year he declared bankruptcy. His total income was $15,615. This was comprised of Employment Insurance and Social Assistance payments. In 1995 his total income was $18,341.

This was the year after he declared bankruptcy. None of this was employment income. It was income derived from Employment Insurance and Workers’ Compensation payments. From 1996 until 2000, he did not have total income in excess of $13,000 a year. The sums he declared were received from Workers’ Compensation or Social Assistance payments. By the year 2000, he was receiving AISH. [ 32 ] During the decade of the 1990's, Mr. Ross was not gainfully employed. If he was receiving any employment income, he was not declaring it on his income tax returns.

The vast majority of the monies he received during that decade came from Social Assistance, the Workers’ Compensation Board or Employment Insurance. The anticipated lump sum settlement from Workers’ Compensation was a figment of his imagination. His suggestion that he was in a position to assume the mortgage, and make all of the condominium fee payments is improbable. To suggest that he was prevented from doing so by the actions of the Defendants is fanciful in the extreme. He could not fulfill the terms of the purchase agreement.

Never once did he attempt to obtain a mortgage on his own and he never took steps to assume the mortgage obtained by Collin and Ravinder Naicken. He asked for his money back and defaulted on his obligation. [ 33 ] To suggest that Manie Naicken had an obligation to see that Mr. Ross received independent legal advice is without merit. The parties reached a simple agreement. Mr. Ross breached it losing any right to purchase the property. [ 34 ] For all these reasons, I cannot accept Mr. Ross’ evidence as worthy of belief. Quite frankly, I reject it. I accept the evidence offered by the Naickens during this trial.

It is supported by the documentary evidence entered as exhibits at this trial. [ 35 ] Mr. Ross started this action. He has failed to meet the evidentiary burden placed upon him to prove his case on a balance of probabilities. He falls far short of that mark. [ 36 ] Consequently, it is unnecessary to consider two technical defences placed before the Court by the Naickens. The limitation argument advanced and the loss of the right to pursue any action because of the bankruptcy proceedings need not be considered by the Court.

In a case such as this where the plaintiff does not come anywhere close to satisfying his evidentiary burden, it is superfluous to consider any other defences. [ 37 ] The trial process imposes an evidentiary burden upon the plaintiff. Where his evidence is rejected as being incapable of belief and shown to be entirely unreliable, the action must fail. That is the situation in this lawsuit. [ 38 ] Conversely, the documents support the position of the Naickens. They attempted to put Mr. Ross in a position where he could acquire a smaller condominium.

He could not live up to the terms of the agreement the parties reached. His down payment was returned. He surrendered any interest in the property. He signed rental agreements in order to remain in the property. That has been his status for well over a decade. [ 39 ] The Defendants are entitled to the relief they request. They are entitled to an unencumbered title to this property. They are a entitled to a Writ of Possession effective 60 days after the release of this decision.

They are entitled to the outstanding rental arrears that are payable pursuant to the last rental agreement signed. [ 40 ] If the parties cannot come to an agreement in relation to costs, they can

schedule an appointment to settle them within 30 days of the release of this decision.

Heard on the 12 th , 13 th and 14 th days of December, 2010. Dated at the City of Edmonton, Alberta this 27 th day of January, 2011. Sterling Sanderman J.C.Q.B.A. Appearances: Mr. Oliver J. Ryffel, Heritage Law Offices for the Plaintiff/Defendant by Counterclaim Mr. John C. Bilsland, Weir Bowen LLP for the Defendants/Plaintiffs by Counterclaim