Court of Appeal for Ontario

Date: 2018-08-29 Docket: C65010

Judges: Lauwers, Miller and Nordheimer JJ.A.

Between

Shaun Developments Inc. Plaintiff (Respondent)

and

Ali Reza Shamsipour, Mohsen Zadegan and Mansour Shamsipour Defendants (Appellants)

Counsel

David Taub and Ellad Gersh, for the appellants

Michael Kestenberg and Thomas Slahta, for the respondent

Heard: August 27, 2018

On Appeal

On appeal from the judgment of Justice Peter Cavanagh of the Superior Court of Justice, dated January 18, 2018, with reasons reported at 2018 ONSC 440.

Reasons for Decision

[1] The defendants appeal from the judgment of the motion judge who dismissed the defendants' motion for summary judgment to dismiss the plaintiff's action but granted the plaintiff's motion for summary judgment for a declaration that three agreements of purchase and sale between the parties were valid and enforceable. At the conclusion of the hearing, we dismissed the appeal with reasons to follow. We now provide those reasons.

[2] This case concerns three inter-connected agreements of purchase and sale (the "Agreements"), that were made between the respondent, as purchaser, and one of each of the appellants, as vendors, in respect of three contiguous properties, all located in the City of Toronto.

[3] The Agreements were conditional upon the respondent receiving in writing the "final, unappealable and official Order" made by the Ontario Municipal Board ("OMB") granting an appeal heard on August 26, 2015 (the "OMB Appeal") and approving a proposed development of the three properties, defined in the Agreements as the "OMB Decision". This condition was contained in the section of the Agreements entitled "OMB Condition".

[4] Handwritten changes were made to the Agreements that required the respondent to either deliver notice in writing that the OMB Condition was fulfilled, or to waive the OMB Condition, within 7 days of the "verdict" (the term used in two of the Agreements) or the "official verdict" (the term used in the third Agreement). The terms "verdict" and "official verdict" were not defined in the Agreements.

[5] The OMB released its decision on March 15, 2016, in which it granted the appeal and approved the proposed development. The formal Order was withheld pending completion of both the site plan process and approval of the form of zoning by-law amendment by the City Solicitor.

[6] Thereafter, the City of Toronto requested a reconsideration of that approval which was dismissed by the Board in written reasons issued on June 28, 2016 (the "OMB Dismissal").

[7] The parties agree that the "OMB Decision", within the meaning of the Agreements, was not issued because there was not, as yet, a final, unappealable and official Order.

[8] The issue on appeal is the correct interpretation of the handwritten terms "verdict" and "official verdict" in the Agreements, more specifically, whether those terms have the same meaning as the defined term "OMB Decision". If the meaning is the same, then this appeal must fail and the motion judge's conclusion that the Agreements are valid and enforceable is to be upheld. If the meaning of those terms is different, then the appeal must succeed.

[9] The motion judge, in careful and detailed reasons, determined that the terms "verdict" and "official verdict" had the same meaning as the term "OMB Decision". The appellants contend that the motion judge erred in that conclusion. In particular, they contend that the fact that different terms were used presumptively suggests that different meanings were intended by the parties.

[10] We agree with the conclusion reached by the motion judge. We agree with his conclusion that, on a fair and purposive reading of the Agreements, the parties intended that these terms have the same meaning. The whole purpose of the Agreements was to permit the respondent to make a final decision on whether to be bound by the Agreements depending on the final conclusion reached by the OMB regarding the proposed development. The respondent required a final order in that regard before making its decision.

[11] The appellants rely on certain authorities, notably Heritage Capital Corp. v. Equitable Trust Co., 2016 SCC 19, [2016] 1 S.C.R. 306, that "[m]eaning must be given to the choice to use one term in one clause and a different term in a different clause of the same agreement" (para. 47).

[12] That principle is not inviolate. Its application depends on the circumstances of the case, the nature of the differences between the terms, and any possible reason for the use of different terms. In this case, it is of particular significance that the terms "verdict" and "official verdict" were made in handwritten changes to the formal agreements. The changes were made by the parties, without the assistance of their lawyers, who had drafted the formal agreements. In those circumstances, the fact that different terms were used is not surprising. It does not change the reality, as found by the motion judge, that the intention of the parties was clear. What was central to the Agreements was the receipt of a final decision of the OMB, and the parties agree that no such final decision was ever received before this dispute arose.

[13] In the end result, we agree with the motion judge when he said, at para. 69:

In my view, the provisions in the agreements with respect to the closing dates which specifically provide that closing is "subject to the Buyer accepting the OMB Decision" are consistent with an interpretation of the agreements under which the terms "verdict" and "official verdict" of the OMB are given the same meaning as the term "OMB Decision".

[14] We do not accept the appellants' submission that this conclusion leads to a commercial absurdity. To the contrary, the interpretation accords with the clear intention of the parties through the Agreements.

Conclusion

[15] The appeal from the judgment of the motion judge is dismissed. In accordance with the agreement of the parties, the appellants will pay to the respondent costs of the appeal fixed at $20,000 plus disbursements and HST.

P. Lauwers J.A.

B.W. Miller J.A.

I.V.B. Nordheimer J.A.