Ontario Court of Appeal: Paterson v Stilton Property Title Transfer Affirmed

• The Ontario Court of Appeal affirmed an order for Stilton Corp. Ltd. to transfer property title to Paterson Veterinary Professional Corporation after multiple refusals to close.
• Stilton had twice refused to close the $1.25 million property sale, leading to orders for specific performance and an Ontario real estate vesting order.
• Stilton's attempts to appeal the vesting order, including an application to the Supreme Court of Canada, were ultimately unsuccessful.
• The Court of Appeal rejected Stilton's motion to review the enforcement order, citing Stilton's repeated breaches of contractual obligations.
• Stilton was ordered to pay Paterson $10,000 in motion costs, and the court clarified Paterson was not in default for unpaid rent.

The Ontario Court of Appeal's rejection of Stilton's review motion, citing its repeated breaches, reinforces the judiciary's resolve to ensure that agreements of purchase and sale are honored.

The Ontario Court of Appeal recently affirmed a decision compelling the transfer of real property title in a long-running dispute, `Paterson Veterinary Professional Corporation v. Stilton Corp. Ltd., 2026 ONCA 590`. This ruling marks a significant development in a case that saw the prospective seller, Stilton Corp. Ltd., repeatedly fail to honor its contractual commitments under an agreement of purchase and sale (APS) with Paterson Veterinary Professional Corporation.

The initial APS included a lease arrangement for Paterson, coupled with an option to purchase the property for $1.25 million plus harmonized sales tax. When Paterson tendered to close the transaction in 2018, Stilton refused to transfer the title. This refusal prompted Paterson to seek legal recourse, resulting in a court order for specific performance of a prior settlement agreement and an `Ontario real estate vesting order` to facilitate the transfer.

Stilton subsequently appealed this decision and sought a stay of the judgment. While an interim motion for a stay was settled by consent, requiring Paterson to pay $1,719.51 monthly for taxes, maintenance, and insurance (TMI) without prejudice to its right to dispute these payments, Stilton's demand for $7,300 per month in rent was rejected by Paterson. This initial `agreement of purchase and sale refusal to close` set the stage for years of litigation.

The `Ontario Court of Appeal specific performance` order was first affirmed when the court dismissed Stilton's initial appeal on September 24, 2019. This ruling stipulated that if Stilton did not transfer the property title within 30 days, ownership would vest in Paterson within 90 days, provided Paterson fulfilled its contractual obligations. Despite this clear directive, Stilton again declined to close when Paterson tendered on October 21, 2019.

Following this second refusal, Paterson moved to have the title vested upon depositing the purchase price with the court. Stilton, however, successfully sought a stay of proceedings while it pursued an application for leave to appeal to the Supreme Court of Canada. During this period, Paterson continued to make monthly TMI payments, maintaining its position without prejudice. Stilton's efforts to appeal to the highest court ultimately failed on April 2, 2020, clearing the path for the enforcement of the Court of Appeal's original order.

After six years of protracted legal battles, Paterson moved to schedule a hearing for its adjourned motion to vest the property title, aiming to enforce the September 2019 `Ontario real estate vesting order`. Stilton responded with a cross-motion, seeking dismissal of Paterson's request or, alternatively, a set-off for rent and other relief.

In a decisive ruling on May 7, 2026, Justice Steve Coroza of the Ontario Court of Appeal granted Paterson's motion to enforce the title transfer. The motion judge acknowledged the consensual adjournment of the vesting motion and the interim steps taken by Paterson as a valid explanation for the delay in renewing the motion. Stilton then sought a review of Justice Coroza's decision, but the `Ontario Court of Appeal` rejected this request, finding no basis to overturn the motion judge's order or any error in the exercise of his discretion.

The appellate court specifically highlighted Stilton's disadvantaged position, citing its repeated `breach of contractual obligations real estate`. The court also clarified that Paterson was not in default for failing to pay rent, as no such payment had been ordered. While the current motion did not address the rent issue, the court noted that Stilton could pursue this matter in its separate, outstanding action before the Ontario Superior Court of Justice. As part of the ruling, Stilton was ordered to pay Paterson $10,000 in all-inclusive motion costs, in accordance with an agreement between the parties.

This decision in `Paterson v Stilton property title transfer` underscores the Ontario Court of Appeal's firm commitment to enforcing contractual obligations in real estate transactions. The court's willingness to uphold specific performance and `Ontario real estate vesting order`s, even after multiple breaches and extensive litigation, sends a clear message to parties who attempt to evade their agreements.

**The Ontario Court of Appeal's rejection of Stilton's review motion, citing its repeated breaches, reinforces the judiciary's resolve to ensure that agreements of purchase and sale are honored.** This outcome serves as a critical reminder that courts will compel title transfer when a seller repeatedly refuses to close, and that such breaches can lead to significant costs and adverse rulings against the defaulting party.

This ruling reinforces the Ontario Court of Appeal's commitment to enforcing specific performance and vesting orders in real estate transactions, even after repeated breaches and protracted litigation. Lawyers should advise clients on the strong likelihood of courts compelling title transfer when a seller repeatedly refuses to close, and the potential for significant costs and adverse rulings against parties who breach contractual obligations.

Source: Original reporting via Canadian Lawyer