Balagula v. Ontario Consumers Home Services Inc. (Small Claims trial)
2017 CanLII 152558 (ON SCSM)
Court
Ontario Small Claims Court
Year
2017
Citation
2017 CanLII 152558 (ON SCSM)
Topic
Onerous lien-registration and buyout clauses unenforceable against unwary consumer (trial decision)
The facts
Balagula signed two rental contracts with OCHS — a carbon filter at $49.99/month and an air conditioner at $79.99/month, each on 10-year terms. When he sold his home, OCHS demanded a $17,334.09 buyout to discharge NOSIs registered against title for equipment with a retail value of approximately $2,500. He paid under closing pressure and sued.
The holding
Deputy Judge Gannage found the lien-registration and buyout clauses were onerous terms in adhesion contracts, were never specifically pointed out to the consumer, and were therefore unenforceable. The Court ordered the full $17,334.09 to be refunded.
Why this matters for Ontario homeowners
This is the underlying Small Claims trial decision later upheld by the Divisional Court in 2018 ONSC 5398. It shows that Small Claims judges will rescind onerous undisclosed buyout and lien clauses on contracts-of-adhesion principles even before reaching CPA arguments — a foundation that any Small Claims defence can build on.
Read the full reasons on CanLII: https://www.canlii.org/en/on/onscsm/doc/2017/2017canlii152558/2017canlii152558.html
This case summary is for general information only. It is not legal advice. Outcomes in your situation depend on the specific facts of your case.
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