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Real Property - Statute of Frauds. Paracha v. Naqi Construction Ltd.
In Paracha v. Naqi Construction Ltd. (Ont CA, 2024) the Ontario Court of Appeal dismissed an appeal, here commenting on aspects of the Statute of Frauds:[22] .... They argue that pursuant to ss. 4 and 9 of the Statute of Frauds, R.S.O. 1990, c. S.19, agreements concerning an interest in land must be evidenced in writing and signed by the parties and, if not, are void and unenforceable at law. The appellants submit that the trial judge erred in rendering his decision regarding the CedarOaks Property when he accepted the formation of an oral contract for an interest in the property.
[23] We reject this argument. .... the absence of a written contract would be no answer to the trial judge’s decision with regard to the CedarOaks Property as s. 10 of the Statute of Frauds carves out an exception to s. 9 to permit the recognition of trusts that arise out of implication or construction of law, .... . Fuamba et al. v. Irving et al.
In Fuamba et al. v. Irving et al. (Div Court, 2024) the Divisional Court allowed an appeal is a messy real estate transaction that in part had a fresh tenancy aspect (though rent amount was ambiguous) and ended up before the LTB on non-payment issues. The case is interesting as this court 'kicked' it all back to the Superior Court under the RTA s.202(1) ['Real Substance of Transaction'] and s.207(2) ['Superior Court Jurisdiction'] provisions.
Here the court touches on the interaction between the RTA and the Statute of Frauds:[13] A valid tenancy agreement must contain certain basic elements. In 3670490 Canada Inc. v. Charles Boushey Limited, [2000] O.J. No. 4861 (S.C.), that court stated that a formal written lease agreement is not required under the Statute of Frauds, ....
....
Issue 2: Did the Board Members err in relying on evidence which pursuant to the Statute of Frauds has no force and effect?
[23] It is trite law that a tenancy agreement may be in writing, oral or implied: see RTA, s. 2(1).
[24] While the Statute of Frauds requires that an agreement which purports to create an interest in land be in writing, this does not trump the specific statutory provision under the RTA that allows for oral or implied leases that are not in writing. As previously stated, the real issue is if the parties reached an agreement on the essential terms of a tenancy agreement: see 3670490 Canada Inc. above.
[25] I do not agree that because the draft lease included provisions about an option to purchase or a right of first refusal, that this somehow invalidated the draft lease prepared to by the landlords.
[26] In my view, it is more significant that the tenants never agreed to the draft lease, that they clearly objected to the proposed rent and that the essential disputed terms of the bargain between the parties was never properly reduced to writing and not put in evidence at the Board hearing.
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