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Civil Litigation - Vesting Orders. Hussein v. Qazi
In Hussein v. Qazi (Ont CA, 2026) the Ontario Court of Appeal considers a moot appeal from a vesting order, here made in a family law-Partitition Act context:[1] The appellant, Madiha Hussain, and the respondent, Salik Javed Qazi, jointly purchased a residential property in Mississauga as tenants in common. The respondent contributed the initial capital outlay and received a 99 percent interest. The appellant undertook to make “contributions” to the housing costs through “sweat equity” and by making payments to a share of the carrying costs, including a share of the monthly mortgage payments. In return he received a one percent interest in the property as well as the right to 50 percent of the increase in the property’s value after contributing for five years. The relationship soon failed, and the appellant moved out and stopped paying, but not before contributing a meaningful amount to housing costs.
[2] The respondent brought an application seeking an order under the Partition Act, R.S.O. 1990, c. P.4, that would direct the appellant to sell his one percent interest to the respondent at a value determined by the court. Among other relief that is not material to this appeal, she also sought payment of amounts the appellant failed to pay pursuant to their agreement.
[3] The application judge determined that the Partition Act did not authorize a buy-out order, only an order of partition and sale. After respondent’s counsel produced the authority of Newton v. Newton, 2014 ONSC 2757 at the hearing, the application judge made an equitable vesting order pursuant to s. 100 of the Courts of Justice Act, R.S.O. 1990, c. C.43, as had been done in Newton. Although this relief had not been pleaded and the suggestion of an equitable vesting order had not been raised before the hearing, the application judge engaged in two exchanges with the appellant prior to making that order in which the appellant communicated that he did not disagree with transferring his one percent interest if he was to be compensated fairly. The appellant claimed to be owed $65,976.19. The application judge determined his compensation to be $16,357.61 by quantifying his share of the home’s equity ($2,500) and his contributions ($33,816.91 plus $5,122.53) and then subtracting funds the respondent had to contribute after the appellant ceased making payments ($25,081.83). She therefore made the vesting order and ordered that the appellant be paid $16,357.61.
[4] The appellant now appeals the decision. He has raised multiple grounds of appeal relating to the fairness and legality of the vesting order, arguing in substance that it was based on an inapplicable precedent and a misapprehension of his position after an unfair hearing in which he was not given a meaningful opportunity to respond. He also argues that the application judge lacked the evidentiary record to declare the value of the property. Should his appeal of the vesting order not succeed, the appellant also seeks leave to appeal the application judge’s costs award, arguing generally that it was made without proper regard for the relevant principles and in a procedurally unfair manner.
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[6] The respondent also argues that the appeal is moot. In support of this submission, she offers fresh evidence confirming that in the absence of an application for a stay of proceedings pending appeal by the appellant, she registered the vesting order with the Land Registry Office on October 22, 2025, making her the sole owner of the property.[1] It is acknowledged before us that the respondent took this action knowing that an appeal was pending and that the appellant was taking steps to perfect a motion for a stay pending appeal.
[7] The respondent is correct that once a vesting order is registered on title, the change in title has been effected and the appeal rights are spent, such that disputes respecting the registered title must be resolved under the rubric and within the scheme of the Land Titles Act, R.S.O. 1990, c. L.5: Regal Constellation Hotel Ltd. (Re) (2004), 2004 CanLII 206 (ON CA), 71 O.R. (3d) 355 (C.A.), at paras. 39-40. The appellant did not seek relief before us under the Land Titles Act as the appellant appeared to do, in the alternative, in Third Eye Capital Corporation v. Ressources Dianor Inc./Dianor Resources Inc., 2018 ONCA 253, 141 O.R. (3d) 192. Since this court cannot grant the relief requested relating to the vesting order, on its face the appeal of the vesting order is moot: Regal Constellation, at paras. 33, 39. The appellant nonetheless asks us, in substance, to exercise our discretion, recognized in Borowski v. Canada (Attorney-General), 1989 CanLII 123 (SCC), [1989] 1 S.C.R. 342, at p. 353, to rule on the issues he raises.
[8] It is exceptional for the court to hear moot issues in an appeal. The onus lies with the party seeking a determination on the merits to show “why the court should depart from its usual practice of refusing to hear moot appeals”: Tamil Co-Operative Homes Inc. v. Arulappah (2000), 2000 CanLII 5726 (ON CA), 49 O.R. (3d) 566 (C.A.), at para. 17. In deciding whether to exercise this discretion, the court will be guided by such factors as the presence of an ongoing adversarial context, concerns for judicial economy, and the need for the court to be sensitive to its proper adjudicative role: Doucet-Boudreau v. Nova Scotia (Minister of Education), 2003 SCC 62, [2003] 3 S.C.R. 3, at para. 18. These factors are neither rigid nor exhaustive, and discretion must be exercised with a view to the circumstances of each case: Tamil Co-Operative Homes, at para. 17. With respect to judicial economy, it may be necessary to devote scarce judicial resources to a moot question, for example, where there is a sufficiently high “social cost in leaving the matter undecided”: Borowski, at p. 362. This may occur where the issues in dispute are of significant public importance, or where they are “recurring in nature, but of brief duration” and therefore evade review: Taylor v. Newfoundland and Labrador, 2026 SCC 5, 510 D.L.R. (4th) 195, at paras. 55-56.
[9] The appellant bases his request on the fact that the mootness problem has arisen because of a tactic used by the respondent to make it so; because a ruling by this court relating to the vesting order may be of assistance in an application by him for rectification of the Land Titles Act registration; and on his submissions about the strength of the appeal.
[10] Without in any way suggesting that the conduct of respondent’s counsel was unethical, we do agree with the appellant that there is unfairness in registering a judicial vesting order knowing that the appellant was not only seeking to exercise their right of appeal but was also taking steps to stay the vesting order pending appeal. After Blair J.A. recognized in Regal Constellation, at para. 45, that given the sanctity of title, remedies after registration are limited to the remedies provided under the Land Titles Act, he commented 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”.
Notably, Blair J.A. did not suggest that this court should purport to resolve a moot vesting issue where this has occurred but called instead for consideration of legislative reform: Regal Constellation, at para. 49. In our view, the unfairness that occurred does not provide us with a basis for adjudicating an issue that must now be resolved using the Land Titles Act. It is, however, a matter that can affect the costs award on this appeal. [11] We are not prepared to address the merits of the grounds of appeal relating to the granting of the vesting order based on the remaining considerations raised before us. In the circumstances of this case, it is not in the interests of justice or judicial economy to rule with a view to facilitating a possible Land Titles Act application, or to even adjourn the appeal to accommodate such an application. There can be no realistic suggestion that substantive injustice would occur if rectification of title is not ultimately made. The material grounds of appeal raised focused on the procedural fairness of the hearing and the technical foundation for the order. On its face, the outcome is eminently fair. The respondent, who now has title to the entire property, previously owned a 99 percent interest in that title. She is the one who alone provided the entire initial, substantial sum needed to fund its acquisition. She is also the one who has assumed responsibility for the ongoing carrying costs. Joint ownership was agreed upon to provide a joint residence, but that relationship is over. Meanwhile, the appellant expressed his agreement with the application judge during the hearing to the very order he now impugns. So long as the appellant is fairly compensated for his interest and the contributions he made, the appellant is in no position to challenge the fairness of a vesting order. Further, we can consider his appeal relating to the fairness of the compensation without hearing a moot appeal of the vesting order. In short, this is not the kind of moot issue where expending scarce judicial resources to consider its merits is justified. Finally, we note that the issues relating to the vesting order are not matters of public interest. Indeed, the public interest is often best served by finality in matters arising from domestic relationships, as is the case here. We do not serve anyone’s interest by facilitating the perpetuation of litigation between the parties.
[12] We therefore decline to hear the moot appeal relating to the vesting order. We do note, however, that we should not be understood by doing so as endorsing the application judge’s decision relating to the use of s. 100 of the Courts of Justice Act to make a vesting order. The appeal of the vesting order is denied, as moot. . Skymark Finance Corporation v. Mahal Venture Capital Inc.
In Skymark Finance Corporation v. Mahal Venture Capital Inc. (Ont CA, 2025) the Ontario Court of Appeal allowed an appeal, here relating to "the issue of who, as between the vendor and the purchaser, is liable for the payment of outstanding municipal taxes in the context of a sale by a receiver of assets in respect of which an approval and vesting order was granted".
Here the court considered the coming into being of an insolvency 'claim provable in bankruptcy', and it's relation to the function of vesting orders:[34] It is a fundamental principle of insolvency law that a claim may be said to exist or have arisen even though the quantum of the claim has not yet been determined: Schreyer v. Schreyer, 2011 SCC 35, [2011] 2 S.C.R. 605, at paras. 26-27; Lloyd W. Houlden, Geoffrey B. Morawetz and Janis P. Sarra, Bankruptcy and Insolvency Law of Canada, loose-leaf (2025-Rel. 2), 4th ed. (Toronto: Thomson Reuters, 2009), at §6:106. This principle is reflected in the BIA itself, which expressly provides that a debt or liability is deemed to be a provable claim if the obligation giving rise to the claim has been incurred, even though the quantum of the claim is unknown as of the date of the bankruptcy.[2] The BIA sets out a process for a trustee in bankruptcy to determine whether a “contingent or unliquidated claim” is a provable claim.[3]
[35] This principle was the basis for the court’s holding in Heritage Property [SS: Credit Union Central of Ontario Limited v. Heritage Property Holdings Inc. (Ont CA, 2008)] that liability for a tax reassessment existed as of the closing even though the relevant tax bills had not yet been issued and thus the quantum of the liability was at that time unknown. As Moldaver J.A. (as he then was) explained at para. 27:Those taxes are properly characterized as a future claim for realty taxes that existed at the time of closing but remained to be quantified. As such, it cannot be said to be “contingent” because liability for the increased taxes to the date of closing had crystallized prior to the date of closing.[4] ....
[41] In short, the motion judge erred in finding that liability for the Omit Tax Claim arose only when the relevant tax bills were issued on November 25, 2022, rather than on January 1 of the relevant taxation years. Accordingly, the liability arose prior to the Closing Date and was not assumed by the Purchaser, in accordance with s. 2.2 of the APA.
[42] Not only is this result consistent with Heritage Property, but it also reflects the significance and purpose of approval and vesting orders in the context of insolvency proceedings. As Pepall J.A. emphasized in Third Eye Capital Corporation v. Ressources Dianor Inc./Dianor Resources Inc., 2019 ONCA 508, 70 C.B.R. (6th) 181, at para. 73, the purpose of a receivership is to enhance and facilitate the preservation of a debtor’s assets for the benefit of creditors. Approval and vesting orders play a critical role in that context by serving as a “vital legal bridge” that facilitates a receiver giving good and undisputed title to a purchaser. This is the “holy grail” sought by purchasers in insolvency proceedings and facilitates the maximization of proceeds in realization of the debtor’s assets: Third Eye, at paras. 80-81.
[43] These purposes would be undermined if purchasers who acquire assets pursuant to court-approved vesting orders were to later find themselves subject to claims that arose prior to closing but had not yet been quantified or liquidated. Faced with such uncertainty, a purchaser would discount the purchase price to make provision for the as-yet-unquantified risk: Grant Thornton, at para. 51. Indeed, in this case the lender that provided financing for the transaction indicated that it would not have proceeded with the financing if it was aware that the Omit Tax Claim was a continued liability as against the Purchaser and the purchased assets. . KingSett Mortgage Corporation v. 30 Roe Investments Corp.
In KingSett Mortgage Corporation v. 30 Roe Investments Corp. (Ont CA, 2023) the Court of Appeal, in the course of mucky and tumultuous bankruptcy appeal litigation (here, a successful motion to quash by the receiver), illustrated some bankruptcy real estate vesting procedures:[26] The Approval Orders follow the form of standard Commercial List approval and vesting orders: they approve the sale transactions; authorize the Receiver to execute the sale agreements “with such minor amendments as the Receiver may deem necessary” and to “execute such additional documents as may be necessary or desirable for the completion” of the transactions; and provide that upon the delivery of a Receiver’s Certificate all of the debtor’s right, title, and interest in the purchased units shall vest absolutely in the purchaser free and clear from all security interests. The Approval Orders make no provision for the distribution of the sale proceeds. Pursuant to para. 12 of the initial Receivership Order, the Receiver must deposit those funds into an account and hold the monies “to be paid in accordance with the terms of this Order or any further Order of this Court.” . Third Eye Capital Corporation v. Ressources Dianor Inc./Dianor Resources Inc.
In Third Eye Capital Corporation v. Ressources Dianor Inc./Dianor Resources Inc. (Ont CA, 2019) the Court of Appeal discusses the nature of vesting orders:[33] This brings me to the CJA. In Ontario, the power to grant a vesting order is conferred by s. 100 of the CJA which states that:A court may by order vest in any person an interest in real or personal property that the court has authority to order be disposed of, encumbered or conveyed. [34] The roots of s. 100 and vesting orders more generally, can be traced to the courts of equity. Vesting orders originated as a means to enforce an order of the Court of Chancery which was a court of equity. In 1857, An Act for further increasing the efficiency and simplifying the proceedings of the Court of Chancery, c. 1857, c. 56, s. VIII was enacted. It provided that where the court had power to order the execution of a deed or conveyance of a property, it now also had the power to make a vesting order for such property.[5] In other words, it is a power to vest property from one party to another in order to implement the order of the court. As explained by this court in Chippewas of Sarnia Band v. Canada (Attorney General) (2000), 2000 CanLII 16991 (ON CA), 51 O.R. (3d) 641 (C.A.), at para. 281, leave to appeal refused, [2001] S.C.C.A. No. 63, the court’s statutory power to make a vesting order supplemented its contempt power by allowing the court to effect a change of title in circumstances where the parties had been directed to deal with property in a certain manner but had failed to do so. Vesting orders are equitable in origin and discretionary in nature: Chippewas, at para. 281.
[35] Blair J.A. elaborated on the nature of vesting orders in Re Regal Constellation Hotel Ltd. (2004), 2004 CanLII 206 (ON CA), 71 O.R. (3d) 355 (C.A.), at para. 33:A vesting order, then, had a dual character. It is on the one hand a court order (“allowing the court to effect the change of title directly”), and on the other hand a conveyance of title (vesting “an interest in real or personal property” in the party entitled thereto under the order). [36] Frequently vesting orders would arise in the context of real property, family law and wills and estates. Trick v. Trick (2006), 2006 CanLII 22926 (ON CA), 81 O.R. (3d) 241 (C.A.), leave to appeal refused, [2006] S.C.C.A. No. 388, involved a family law dispute over the enforcement of support orders made under the Divorce Act, R.S.C. 1985, c. 3 (2nd Supp.). The motion judge in Trick had vested 100 per cent of the appellant’s private pension in the respondent in order to enforce a support order. In granting the vesting order, the motion judge relied in part on s. 100 of the CJA. On appeal, the appellant argued that the vesting order contravened s. 66(4) of the Pension Benefits Act, R.S.O. 1990, c. P. 8 which permitted execution against a pension benefit to enforce a support order only up to a maximum of 50 per cent of the benefit. This court allowed the appeal and held that a vesting order under s. 100 of the CJA could not be granted where to do so would contravene a specific provision of the Pension Benefits Act: at para. 16. Lang J.A. stated at para. 16 that even if a vesting order was available in equity, that relief should be refused where it would conflict with the specific provisions of the Pension Benefits Act. In obiter, she observed that s. 100 of the CJA “does not provide a free standing right to property simply because the court considers that result equitable”: at para. 19.
[37] The motion judge in the case under appeal rejected the applicability of Trick stating, at para. 37:That case [Trick] i[s] not the same as this case. In that case, there was no right to order the CPP and OAS benefits to be paid to the wife. In this case, the BIA and the Courts of Justice Act give the Court that jurisdiction to order the property to be sold and on what terms. Under the receivership in this case, Third Eye is entitled to be the purchaser of the assets pursuant to the bid process authorized by the Court. [38] It is unclear whether the motion judge was concluding that either statute provided jurisdiction or that together they did so.
[39] Based on the obiter in Trick, absent an independent basis for jurisdiction, the CJA could not be the sole basis on which to grant a vesting order. There had to be some other root for jurisdiction in addition to or in place of the CJA.
[40] In their article “Vesting Orders Part 1”, Bish and Cassey write at p. 49:Section 100 of the CJA is silent as to any transfer being on a free and clear basis. There appears to be very little written on this subject, but, presumably, the power would flow from the court being a court of equity and from the very practical notion that it, pursuant to its equitable powers, can issue a vesting order transferring assets and should, correspondingly, have the power to set the terms of such transfer so long as such terms accord with the principles of equity. [Emphasis in original.] [41] This would suggest that provided there is a basis on which to grant an order vesting property in a purchaser, there is a power to vest out interests on a free and clear basis so long as the terms of the order are appropriate and accord with the principles of equity.
[42] This leads me to consider whether jurisdiction exists under s. 243 of the BIA both to sell assets and to set the terms of the sale including the granting of a vesting order.
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