2020 QCCA 1520, 2020 QCCA 1520

Entreprises Nowlan inc. c. Peyrow 2020 QCCA 1520 COURT OF APPEAL CANADA PROVINCE OF QUEBEC REGISTRY OF MONTREAL No: 500-09-029203-205 ( 500-17-113140-209 ) MINUTES OF HEARING DATE: November 16, 2020 THE HONOURABLE STEPHEN W. HAMILTON, J.A. APPLICANT COUNSEL Entreprises nowlan inc.

Mtre Charles Daviault ( Gowling WLG (Canada ) Absent RESPONDENTS COUNSEL Mehrzad peyrow Mtre Paul Dery-Goldberg M tre filipe costa ( Spiegel, Sohmer, inc. ) Absent SEPIDEH LATIFKAR Mtre LINDA SCHACHTER ( Devine Schachter Polak ) Absent IMPLEADED PARTIES COUNSEL FIDUCIE DE CRÉDIT MELLON TRUST Mtre ANNIE-CLAUDE AUTHIER ( Osler, Hoskin & Harcourt ) Absent l'officier de la publicité des droits de la circonscription foncière de montréal ROYAL BANK OF CANADA ABSENT AND UNREPRESENTED

DESCRIPTION: Application for leave to appeal from a judgment rendered in the course of the proceeding on September 28, 2020 by the Honourable Michel A. Pinsonnault of the Superior Court , District of Montréal (Art.30, para.2 and 357 C.C.P. ) . Application to suspend provisional execution of a judgment nonwithstanding appeal (Art.660 C.C.P. ) . Clerk at the hearing : Mélahelle Sicotte Courtroom: RC-18 HEARING 9:30 Continuation of the hearing held on November 13, 2020. The parties were excused from appearing in Court. BY THE JUDGE : Judgment – see page 3. Conclusion of the hearing.

Mélahelle Sicotte, Clerk at the hearing JUDGMENT [ 1 ] The Petitioner seeks leave to appeal from the judgment rendered on September 28, 2020, by the Superior Court, District of Montreal (the Honourable Michel A.

Pinsonnault), which dismissed his action for forced surrender of a property and declared it to be abusive. [1] In the event that leave to appeal is granted, the Petitioner asks for suspension of the judge’s order of provisional execution notwithstanding appeal. [ 2 ] It is useful to briefly summarize the facts. [ 3 ] On July 25, 2020, the Petitioner made an offer to purchase the property in question from the Respondents. The Respondents made a counter-offer on July 26, 2020, which was accepted the same day. Pursuant to the accepted offer, the purchase price was $18,000,000 payable at closing.

In addition, the accepted offer provided that the Petitioner was to provide on or before August 3, 2020, “any document demonstrating that he has the necessary funds to cover the purchase price” and was to pay on or before August 4, 2020, a deposit of $500,000 to its notary or its lawyer. The Respondents received a second offer of $18,000,000 from the Intervenor, which they accepted, subject to the first offer. [ 4 ] On August 3, 2020, at 11:23 pm, the Petitioner provided a letter from a Florida lawyer to meet the condition as to proof of funds: Dear Mr.

Larocque; This letter is to confirm that Nowlan Enterprises Inc (Quebec Incorporated company) is our client and that they have available funds ready for the purchase of the above aforementioned property in the amount on deposit in excess of $18,000,000 USD. These funds are available and are of good, clean, clear and free of non-criminal origin, and are free and clear of all liens, encumbrances and third-party interest. These funds will be transferred to our client's designated Canadian Notary Trust Account seven (7) business days prior to closing date to conclude the purchase.

If you have any question, please feel free to contact me Frederick Morgenstern at 305-587-4850, who the Chief Compliance and Diligence Officer of our firm. Sincerely,

James L. Bearden, Attorney at Law [ 5 ] The Respondents were not satisfied with this letter and advised the Petitioner the next morning that they considered the offer null and void, but added that they were willing to consider a new offer if it was submitted before noon with a proof of funds letter from a recognized Canadian financial institution. The Petitioner did not submit any new offer or proof of funds and did not pay the deposit the next day. Instead, on August 6, 2020, the Petitioner sued, asking that the Respondents be ordered to sign a deed of sale (not annexed to the proceeding) in default of which the judgment would be equivalent to their signature (an action in passation de

titre , despite its title). The Respondents made a motion to dismiss this action, which the judge granted. [ 6 ] The judge found that the letter from the Florida attorney was insufficient, that the Petitioner was bound to pay the deposit despite the Respondents’ position that the offer was null and void, that the Petitioner did not send a demand letter before suing and that the Petitioner failed to annex a draft deed of sale to its proceeding, with the result that only one of the five conditions for an action in passation de

titre was met. He concluded that, even with the flexible approach adopted by the Court in Houlachi , [2] the action was clearly unfounded and abusive. He found that the Petitioner’s purpose in instituting the action was to block any sale to the Intervenor and force the Respondents to negotiate with the Petitioner. [ 7 ] Because the judge declared the action abusive, the Petitioner requires leave to appeal under

Article 30, subparagraph 2(3) C.C.P. Under paragraph 3 of

Article 30 C.C.P. , the Petitioner must therefore demonstrate that “the matter at issue is one that should be submitted to that Court, for example because it involves a question of principle, a new issue or an issue of law that has given rise to conflicting judicial decisions.” Granting leave must also be consistent with the best interests of justice (Article 9 C.C.P. ) and the principle of proportionality (Article 18 C.C.P. ). [ 8 ] The Petitioner fails to satisfy me that these tests are met. [ 9 ] As colleagues have recently pointed out in dismissing motions for leave to appeal in matters of passation de

titre , there is abundant caselaw of the Court on these matters and not many new issues that should be submitted to the Court. [3] The Petitioner fails to satisfy me that this case raises any such issues. [ 10 ] Moreover, I am not satisfied that the Petitioner has demonstrated any error in the judgment. The judge was entitled to conclude at a preliminary stage, without the need for further evidence as to the actual availability of funds, that the letter from the Florida lawyer was insufficient to demonstrate the availability of funds, given its vague language and the surrounding circumstances.

The judge was also entitled to conclude that, if the Petitioner wished to ask for the passing of title pursuant to the offer, it needed to act as if the offer was valid notwithstanding the Respondents’ position that it was null and void and it therefore was required to comply with its conditions. The failure to attach a draft deed of sale could have been corrected under Halouchi , but three months later it has not been. I am not convinced that a demand letter was necessary given the quick institution of proceedings, but the Petitioner still missed three of the five conditions for an action in passation de

titre . FOR THESE REASONS, THE UNDERSIGNED: [ 11 ] DISMISSES the motion for leave to appeal, with costs; [ 12 ] DISMISSES the motion for suspension of the judge’s order of provisional execution notwithstanding appeal without costs. STEPHEN W. HAMILTON, J.A.