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Indexed as:
Gibb v. Jiwan

Between
John Howard Gibb, applicant, and
Imitiaz Jiwan and Iona Avalon Inc., respondent

[1996] O.J. No. 1370
DRS 96-10546
Court File No. 38165/95

Ontario Court of Justice (General Division)
D.S. Ferguson J.

Heard: December 14, 1995.
Judgment: April 10, 1996.
(17 pp.)

   Real property — Title, registration of instruments — Land titles system — Effect of agreement to convey being subject to a prior unregistered interest.

   This was an application for a declaration as to the priority of claims against land registered under the Land Titles Act. The applicant, Gibb, purchased a house and lot from a developer. Unknown to Gibb, the property that Gibb and the developer intended to transfer included a strip of land that was registered under a different plan of subdivision.  As this was not known, the agreement of purchase and sale did not mention the strip of land.  On closing, the transfer of the strip was not registered.  The strip was subsequently sold to the respondent, Jiwan.  Jiwan then had a writ of seizure and sale delivered to the land registrar.

   HELD:  Gibb had priority.   Jiwan's writ of seizure and sale did not give him a claim to the property because the property had been sold to Gibb before the writ was filed.  An unregistered purchaser had priority.

      D.S. FERGUSON J.:—

NATURE OF PROCEEDING

¶ 1      This is an Application for a declaration as to the priority of claims  against land registered under the Land Titles Act [See Note 1 below].  The contest is between the purchaser under an unregistered transfer and an execution creditor who filed a writ of execution against the registered owner.

THE FACTS

¶ 2      The material background facts are these:

¶ 3      Counsel advised me that Iona did not wish to participate on this Application and did not oppose the relief sought.

ANALYSIS

The application of the Statute of Frauds

¶ 4      During oral argument Mr. Di Monte agreed with these facts but in his written submissions he took an entirely different position and contended that the strip was never sold because of a failure to comply with s. 1 of the Statute of Frauds [See Note 3 below].  I reject this contention.   On the uncontradicted evidence of the solicitor for Iona I find that the parties intended to convey the strip which was included within the municipal description.  The land titles description of the strip was inadvertently omitted from the  agreement of purchase and sale but this does not contravene the Statute of Frauds.

To what interest does a writ of execution attach?

¶ 5      Mr. Di Monte relies on s. 86 of the Land Titles Act which states:

¶ 6      The provisions of sections 10 and 11 of the Execution Act [See Note 4 below] and s. 136 of the Land Titles Act provide that the writ binds the land from the time the required documentation is delivered to the land registrar.

¶ 7      Mr. Di Monte contends that since Iona was deemed to be the owner until the registration of the transfer to Gibb, Iona was the owner when the writ was registered and therefore the writ attaches in priority to Gibb's transfer.

¶ 8      In my view Mr. Di Monte mistakenly assumes that the statutory scheme of assured title determines the rights of an execution creditor.  [See Note 5 below]

Note 5:  This misapprehension was addressed in Re Dominion Lumber Winnipeg Ltd. and District Registrar (1963), 37 D.L.R. (2d) 283 (Man. C.A.) at 286.  Also see Young v. Le Mon (1985), 3 C.P.C. (2d) 163 (Ont. Co. Ct.) at pp. 166-7.

¶ 9      It has been long established by case law that an execution creditor may  claim only the interest  of the debtor in the land.  In Jellett v. Wilkie [See Note 6 below] the Supreme Court of Canada stated:

¶ 10      This position has been adopted in numerous subsequent cases [See Note 8 below].  The principle has been specifically held to apply to land titles systems [See Note 9 below].

Note 8:  Eg. Robinson v. Moffatt (1916), 37 O.L.R. 52 (C.A.); McDonald v. The Royal Bank of Canada [1933] O.R. 418 (C.A.) at pp. 421-2;  St. Mary's Parish Credit Union Ltd. v. T.M. Ball Lumber Co. [1961] S.C.R. 310.

Note 9:  St. Mary's Parish Credit Union Ltd v. T.M. Ball Lumber Co., op.cit.

¶ 11      Mr. Di Monte  relies on Bank of Hamilton v. Hartery [See Note 10 below] but that case is clearly distinguishable because there the court found that the British Columbia statute under consideration contained a provision which overrode the case law.  [See Note 11 below]

Note 11:  See the analysis in Re Dominion Lumber, op.cit., at p. 287 ff.

¶ 12      The Ontario Land Titles Act must then be examined to determine whether the statute alters this rule.  It does not.

¶ 13      In Guest v. Cochlin [See Note 12 below]  two judges of our Court of Appeal considered our Land Titles Act and noted that while the Act did not permit the registration of an equitable interest in land, s. 68 confirmed the right of the registered owner to create various unregistered interests including equitable interests in persons who have purchased the property but not registered a transfer.  [See Note 13 below]

¶ 14      In Robinson v. Moffatt [See Note 14 below] our Court of Appeal unanimously held that under the Land Titles system  a judgment creditor could only acquire an interest which the debtor had.  It confirmed that where the unregistered purchaser had purchased the property and paid the price before the registration of the writ of execution, then the judgment creditor could not  enforce any claim under the writ because the vendor as registered owner was only a trustee for the purchaser.  [See Note 15 below]  In that case the purchaser had paid only part of the purchase price before the writ was registered and so the writ applied only to the registered owner's interest in the unpaid portion of the price.  The same result was reached in Re Zimmerman [See Note 16 below].  In G. Grossi Plumbing & Heating Inc. v. North American Life Assurance Company [See Note 17 below] the same reasoning and result was reached with respect to the entitlement to rents which came due after the assignment of the rents but before the assignment was registered.

¶ 15      The very issue before me was also dealt with in La Rose v. White Packing Co. Ltd. et al. [See Note 18 below] There MacKay J. cited several of the cases already mentioned and concluded that not only the unregistered purchaser but also the unregistered mortgagee of that purchaser had priority to the writ filed after their contracts were completed but before the documents  were registered in Land Titles.

¶ 16      The law on this issue is the same with respect to both the Land Titles Act and the Registry Act [See Note 19 below].  [See Note 20 below]

Note 20:  With respect to the Registry Act see:   McDonald v. The Royal Bank of Canada op.cit.; Davidson v. Davidson [1946] 2 D.L.R. 289 (S.C.C.); Young v. LeMon (1985), 3 C.P.C. (2d) 163 (Ont.Co.Ct.).

Conclusion

¶ 17      The writ of seizure and sale gives the execution creditor no right to claim against the property because before the writ was filed the registered owner sold the property to the Applicant.

¶ 18      I understand that I have jurisdiction to provide a remedy by virtue of the provisions of the Land Titles Act and in particular s. 160.

¶ 19      I declare that the writ of seizure and sale filed by Jiwan as Execution No. 1818N90 on July 12, 1990 has not affected and does not affect the lands described as Parcel 181-1, Section 65M-2522 being Block 181, Plan 65M 2522 in the Town of Markham, in the Regional Municipality of York, Land Titles Division of York Region.

¶ 20      I order the Land Registrar, Land Titles Division at Newmarket, Ontario to rectify the title abstract with respect to the above-described land by deleting any reference to Execution No. 1818N90 filed by Jiwan.

COSTS

¶ 21      The issue of costs in this matter raises a matter of significant public importance.

Was the relevant authority difficult to find?

¶ 22      When this matter was argued before me counsel advised that they could not find any authority directly on point.  Not one of the authorities cited in these reasons was mentioned in the factums or oral argument.  Indeed, Mr. Di Monte cited no authority at all and relied only on the provisions of the Land Titles Act.

¶ 23      I was uncomfortable that counsel could find no case law on point.  Following the hearing I looked in the text, Anger and Honsberger Real Property, which was in the law association library in the Newmarket courthouse where the Application was heard.  The text summarized the law [See Note 21 below] exactly as I have found it to be in these reasons (although of the cases I have cited in these reasons the authors cited only  Re Dominion Lumber and Jellett).   I wrote to counsel drawing their attention to the passage in Anger and Honsberger and asked for written submissions.

Note 21:  Anger and Honsberger Real Property, 2nd ed., Canada Law Book, vol. 2, at pp. 1614-15.

¶ 24      Both counsel then submitted written argument in which they mentioned some cases which they presumably found by reading the authorities cited in Anger and Honsberger. However, neither counsel mentioned any of the five Ontario cases discussed in my reasons which generally and specifically determined the issue before me with respect to Ontario's Land Titles Act.  Mr. Silverberg did cite the Davidson case which dealt with the Registry Act.  The cases cited in these reasons were turned up by the court's law clerk who researched the issue at my request.

¶ 25      I am quite aware of the unhappy state of legal indexing and the problems of doing legal research on Canadian law.   I was concerned that I not unfairly criticize counsel for not finding cases on point so I researched the issue in this case myself.  I made no reference to any computer service such as Quicklaw.

¶ 26      Although my research did not reveal all the cases cited in these reasons, I had no difficulty finding Ontario cases directly on point by independent manual reference to basic reference books [See Note 22 below].  It appears that counsel  made reference to none of these.

Note 22:  Authorities directly on point came to light in each of the following searches:

1.  By looking in the index to the volume on Executions in
Carswell's Canadian Abridgment.
2.  By looking in the section on Executions in Carswell's
Canadian Encyclopedic Digest.
3.  By looking up the point in Bennett on Creditors and
Debtors, 4th ed.,Carswell, 1994.
4.  By looking up the subject of executions in Anger and
Honsberger Real Property, and then reading the first case they
cite, Re Dominion Lumber Winnipeg, which contains a passage
directly on point from the Supreme Court of Canada in St.
Mary's Parish Credit Union Ltd.  By citing up the leading
case, Jellett,  mentioned in Re Dominion Lumber, by reference
to the Cases Judicially Noticed volume of Carswell's Canadian
Abridgment many of the other cases on point could be found.

      I am confident that at least the first two references are available in every county law library in the Province.

The duty of counsel to advise the client of the law

¶ 27      Rule 2 of the Law Society's Rules of Professional Conduct states:

Note 23:  Professional Conduct Handbook, The Law Society of Upper Canada, 1995.

¶ 28      The following commentary states in part:

It continues:

Rule 3 states:

¶ 29      The commentary states:

¶ 30      It seems clear that  counsel have a duty to ascertain the law at the outset of the litigation as otherwise they could not fulfil the duty of giving advice.

The duty of counsel to advise the court of the law

¶ 31      Counsel have a duty to inform the court of relevant material authorities regardless of whether they support or contradict the position they advocate.  [See Note 24 below]

Note 24:  CIVIL LITIGATION Reference Materials, Law Society of Upper Canada, March 1990, p. 2-9.

¶ 32      The classic statement of the duty was expressed by Lord Chancellor Birkenhead:

Note 25:  Glebe Sugar Refining Company Limited et al. v. Trustees of the Port and Harbours of Greenock (1921), 37 T.L.R. 436 (H.L.).

¶ 33      It seems a necessary corollary that counsel have a duty to look up the law if they do not know it.

The duty of counsel to research the law

¶ 34      Counsel cannot fulfil their duties to the client or the court unless they conduct reasonable research on points of law which are known in advance to be contentious.  The court must rely on counsel to conduct reasonably complete research on points of law they raise.  That is part of counsel's professional duty. It is desirable that counsel look up difficult or important points on Quicklaw but I can appreciate that this may not be economical in many cases. However, in my view  it is not acceptable for any counsel or articling student to come to court intending to argue a contentious point of law without first researching the point at least to the extent of looking up the issue in basic reference books.

¶ 35      In a case like this where counsel know there is a contest as to which cases may be authoritative, I think they also have a duty to cite up cases they rely on  to determine whether they are still good law.  (I recall that citing up a case was one of the first things I learned in law school and its importance in litigation was emphasized repeatedly during articles.)

¶ 36      The judicial system cannot function effectively unless counsel fulfil this duty because judges cannot possibly know the law on all issues which come before them.  Counsel must bear in mind that most justices in the General Division are generalists and hear cases of all kinds.

The consequences of counsel not doing research

¶ 37      Instead of being done by counsel, the research and analysis in this case were done by me and the court's law clerk.  This is particularly annoying in view of the court's scarce and dwindling resources.  The court's only law clerk in this Region is responsible for assisting over twenty justices who preside in seven widespread centres.

¶ 38      Another result of counsel not fulfilling their duty is that this matter which might have been reserved for two or three weeks has been reserved for an additional three months.  This delay may well have caused frustration and hardship to the parties.

¶ 39      In addition, the issue here is one of some importance for conveyancers and if I had accepted the position so vigorously and confidently urged on me by Mr. Di Monte I would have inadvertently contradicted a rule of law that has been established in Ontario for over half a century.  Counsel must be alert to the fact that a court's ruling in a case will determine not only the dispute between the parties (which, as here, may involve only a modest sum) but  also may create a precedent which could have great impact on all other members of the public.

What is the appropriate penalty for not doing research?

¶ 40      If the lack of preparation and research in this case  were unique or unusual I would let it pass; however, unfortunately it is not.  In my experience this lack of preparation and research is commonplace on civil motions and at civil  trials although this is a particularly egregious example.  Indeed, based on the cases I have heard, it is my firm belief that a significant number of civil trials would never reach the courtroom door if counsel had looked up the law on the principal issues in the case.  In my view this standard of practice is unacceptable.  It appears to me that the practice will not change until counsel appreciate that the court will impose sanctions for such conduct.

¶ 41      I direct both counsel to forthwith deliver to their respective clients a copy of these reasons and a copy of rules 57.01,57.03, 57.07 and s. 131 of the Courts of Justice Act [See Note 26 below].  This matter will come on before me on April 25, 1996 at 4 pm. in Newmarket at which time both counsel must attend.  They  or other counsel on their behalf may make submissions concerning costs.  The parties in this matter may also make submissions in person or through counsel if they wish.  I propose to fix costs, if costs are awarded, and counsel should therefore produce at that time all necessary information concerning time dockets and disbursements.

¶ 42      I trust counsel will research the caselaw relating to  costs under provisions of the  statute and rules cited above and as to my inherent jurisdiction to award costs.

¶ 43      If that date is not convenient for counsel they may arrange another date convenient to me through the Newmarket trial co-ordinator.  If the date is changed counsel shall forthwith advise their clients.   When this matter is heard both counsel shall file affidavits confirming that their clients were sent the materials and date of hearing.

D.S. FERGUSON J.