Businessman loses battle to keep Winnipeg couple's home

A Winnipeg couple can buy back their home after the businessman who tried to sell it lost his court case.

Shawn and Roxanne Brown financed their home through a complicated arrangement with Winnipeg businessman Richard Boon in 2002. After they were late with some payments, he tried to sell the house while they were still living in it, prompting a court battle that Boon lost in 2015 and that was upheld by the Manitoba Court of Appeal last month.

The judge made no mistakes in granting the Browns the right to regain title to their home by paying off their loan to Boon, who had helped them stave off foreclosure and paid their mortgage for nine months in 2002, the appeal court ruled.

The Browns entered the deal with Boon the day before their house was to be auctioned for failure to make their mortgage payments.

In return for title to the house and a $1,000 monthly payment from the Browns, Boon paid $8,695 of their debt (they paid $2,500), stopping the foreclosure, and agreed to make their $988 monthly mortgage payments. Under the deal, the Browns had an option to buy their house back by paying off their loan from Boon plus a $1,500 fee.

Boon, who tried to sell the house to a third party in 2003, argued in court that the Browns lost the right to buy their home back when they did not make all of their $1,000 payments on time.

However, the courts said he lost the right to pursue that option by, among other things, continuing to accept the Browns' payments, including the $1,500 fee, and by allowing the Browns to renegotiate their bank mortgage and start making payments directly to the bank in October 2002.

"They were neither informed nor made aware of the consequences of missing a payment and they certainly did not agree to forego their option as a result of a missed or late payment," said the judge in the original court case.

"By the time Daylight claimed forfeiture, the plaintiffs had already paid the $1,500 service fee and were ready, willing and able to pay the outstanding loan balance. In these circumstances, I conclude that Daylight is not entitled to rely on the forfeiture provision contained in the option."

Boon and his corporation Daylight Capital Corporation have been at the centre of several disputed real-estate deals over the years involving homeowners in debt and on the verge of losing their homes to foreclosure.

"Daylight Capital Corporation … and its directing mind, Richard Boon, engage in the business of seeking out residential homeowners in distress and offering financial assistance through a transaction consisting of a conveyance of land, leaseback and option to repurchase," the appeal court decision says.

Boon previously described Daylight's business model as giving people "a second chance to be able to keep their house," the court decision says.

The Browns in part financed the purchase of their $80,000 Winnipeg home in 1990 with a mortgage. That mortgage fell into arrears after they experienced financial troubles in 2001 and owed thousands to the bank.

Lost right to repurchase title: Boon

The deal they negotiated with Boon staved off foreclosure and kept the Browns in their home.

Boon said the deal stipulated that the Browns lost their right to buy back the title to their home if they ever missed one of their monthly payment deadlines.

Though in the end the Browns paid Boon what they owed in rent from February to September 2002, they missed some of the payment deadlines laid out in the agreement, court documents say.

Roxanne Brown negotiated a lower mortgage payment of $585 a month with the bank in fall 2002. She informed Boon, who gave the Browns the green light to start making their mortgage payments directly to the bank in October 2002. (The Browns paid off the bank mortgage nearly 10 years ago.) 

The Browns stopped paying Boon the previous $1,000 monthly instalments after that and Boon didn't object.

'He wanted the house'

But when the Browns tried to pay off their loan and the $1,500 fee to reacquire the title to their home in 2003, Boon refused and said "he would not accept any money from them because he wanted the house," the court decision says.

Boon accepted a $1,500 payment from the Browns a month later, which a judge previously said represented the Browns exercising their right to buy back the title under the original agreement.

That summer, Boon told the Browns he was selling their home for $102,000 and they would have to leave. That never happened, because the Browns refused to go and an attempt to get them evicted under the Residential Tenancies Branch failed. 

The Browns took Boon and Daylight to court and last April, a judge granted them the right to buy back title to their home. Boon was ordered to let the Browns pay down their outstanding balanced to Daylight (about $8,000), plus 2.5 per cent interest, in exchange for the title to the home.

Richard and Arthur Boon, Daylight and a numbered company fought that ruling through the appeal, but it was dismissed on Feb. 5, 2018.