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Appeals - Real Estate. Airport Business Park Inc. v. Huszti Holdings Inc.
In Airport Business Park Inc. v. Huszti Holdings Inc. (Ont CA, 2023) the Court of Appeal considered that the failure to seek and obtain a stay pending appeal of an order effecting title to real estate, where that order is subsequently registered on title, prejudice appeal rights. This case suggests that when appealing such order, a stay pending appeal would be prudent:[50] The importance of the City of Windsor not seeking a stay of the discharge order cannot be overstated. Rule 63 of Ontario’s Rules of Civil Procedure, R.R.O. 1990, Reg. 194, no longer provides for an automatic stay pending appeal, except in certain enumerated cases, unlike the previous iteration of the rule engaged in Smith. As this court has previously noted, there is no requirement under the Land Titles Act to show that no appeal is pending, or appeal rights have not terminated. Appeal rights may be protected by obtaining a stay, which precludes registration of the order, but where a losing party does not seek such a stay, their rights of appeal might well be prejudiced: Regal Constellation Hotel Ltd., Re (2004), 2004 CanLII 206 (ON CA), 71 O.R. (3d) 355 (C.A.), at paras. 33 and 49; Third Eye Capital Corporation v. Ressources Dianor Inc./Dianor Resources Inc., 2019 ONCA 508, 435 D.L.R. (4th) 416, at para. 41.
[51] This court’s comments in Regal Constellation fortify Huszti’s submission that the unexpired right to appeal held by the City as of the deadline did not affect title without a stay. In Regal Constellation, the owner of the hotel sought to set aside a vesting order of the Superior Court of the property following its approval of the sale of the property in the receivership process. Blair J.A. quashed the appeal brought by the owner on the basis that it was moot because the appellant had not sought a stay of the vesting order. Blair J.A. explained at para. 33 that once a vesting order is registered on title, the change of title has been effected.
[52] He went on to add:[38] Upon registration, then, a vesting order is deemed "to be embodied in the register and to be effective according to its nature and intent". Here the nature and effect of Sachs J.' s vesting order is to transfer absolute title in the hotel to 203, free and clear of encumbrances. When it is "embodied in the register" it becomes a creature of the land titles system and subject to the dictates of that regime.
[39] Once a vesting order that has not been stayed is registered on title, therefore, it is effective as a registered instrument and its characteristics as an order are, in my view, overtaken by its characteristics as a registered conveyance on title. In a way somewhat analogous to the merger of an agreement of purchase and sale into the deed on the closing of a real estate transaction, the character of a vesting order as an "order" is merged into the instrument of conveyance it becomes on registration. It cannot be attacked except by means that apply to any other instrument transferring absolute title and registered under the land titles system. Those means no longer include an attempt to impeach the vesting order by way of appeal from the order granting it because, as an order, its effect is spent. Any such appeal would accordingly be moot.
[40] This interpretation of the effect of registration of a vesting order is consistent with the purpose of the land titles regime and the philosophy lying behind it. It ensures that disputes respecting the registered title are resolved under the rubric of that regime and within the scheme provided by the Land Titles Act. This promotes confidence in the system and enhances the certainty required in commercial and real estate transactions that must be able to rely upon the integrity of the register. [Footnote omitted.] [53] Blair J.A. emphasized the importance of seeking a stay to protect an appellant’s remedies, at para. 49:I do not mean to suggest by this analysis that a litigant's legitimate rights of appeal from a vesting order should be prejudiced simply because the successful party is able to run to the land titles office and register faster than the losing party can run to the appeal court, file a notice of appeal and a stay motion and obtain a stay. These matters ought not to be determined on the basis that "the race is to the swiftest". However, there is no automatic stay of such an order in this province, and a losing party might be well advised to seek a stay pending appeal from the judge granting the order, or at least seek terms that would enable a speedy but proper appeal and motion for a stay to be launched. Whether the provisions of s. 57 of the Land Titles Act (Remedy of person wrongfully deprived of land), or the rules of professional conduct, would provide a remedy in situations where a successful party registers a vesting order immediately and in the face of knowledge that the unsuccessful party is launching an appeal and seeking a timely stay, is something that will require consideration should the occasion arise. It may be that the appropriate authorities should consider whether the Act should be amended to bring its provisions in line with those contained in the Alberta legislation, and referred to in footnote 2 above. [54] Although Heeney R.S.J.’s discharge order in this appeal is not a vesting order, it operated in the same way by discharging the Easement immediately from title. There was no stay of this order. The fact that the effect of the discharge order when registered was the equivalent in all respects of the release of the Easement required under the VTB Mortgage is a complete answer to the Divisional Court’s concern about title being uncertain or contingent. There is no basis to find that the City’s appeal rights impacted on ABP’s good and marketable title in any meaningful way and the Divisional Court was wrong to find that the Application Judge erred in failing to consider the City’s appeal rights without first considering the significance of those appeal rights in the context of this case.[4]
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