Court of Appeal for Ontario

Date: 2018-12-04 Docket: C62236

Judges: Feldman, van Rensburg and Nordheimer JJ.A.

Between

Michael Savo Plaintiff (Appellant)

and

Rasheed Moursalien Defendant (Respondent)

Counsel

Doug LaFramboise, for the appellant

Brent Cumming, for the respondent

Heard: November 29, 2018

On appeal from: The judgment of Justice Robert Charney of the Superior Court of Justice, dated May 19, 2016 with reasons reported at 2016 ONSC 3326.

Reasons for Decision

[1] The plaintiff appeals from the summary judgment awarded by the motion judge in favour of the defendant for the return of a deposit of $50,000 together with interest. At the conclusion of the hearing, we dismissed the appeal with reasons to follow. We now provide our reasons.

[2] Michael Savo and Vera Robichaud were the owners of a property located at 76 Forest Heights Blvd. in Kleinberg, Ontario. They listed the property for sale in June 2014. The respondent agreed to purchase the property for $1,685,000 pursuant to an Agreement of Purchase and Sale, dated August 25, 2014 (the "APS"). The property had a pool, a cabana and a patio in the backyard. The sale was scheduled to close on November 28, 2014.

[3] The APS stated that the purchaser was aware "that there is existing easement of TransCanada Gas Line on the property" and stated that he agreed to "take the TransCanada easements as applicable".

[4] Before closing the transaction, the respondent discovered that, in addition to a known easement in favour of TransCanada Pipeline ("TCPL"), there was a second TCPL easement in the backyard that ran directly under the pool, cabana and patio. This easement, along with a letter agreement, were both registered on title. The letter agreement arose from the fact that the pool, cabana and patio had been constructed without the consent of TCPL. The letter agreement required the appellant to enter into a formal agreement with TCPL by which he and TCPL would share the costs of removing the pool, cabana and patio, if that became necessary. However, the formal agreement by which TCPL had the right to remove the pool and cabana, if necessary, was not registered on title because the appellant had refused to sign that agreement. That refusal led to a lawsuit between the appellant and TCPL. There was no reference in the APS to either the unsigned agreement or to the litigation arising out of these events.

[5] All of these matters came to the attention of the respondent when, on November 6, 2014, the appellant contacted the respondent to request that he sign the formal TCPL agreement. On November 7, 2014, the respondent advised the appellant that he would not close the deal. He requested the return of the $50,000 deposit.

[6] The appellant refused to return the deposit and brought this action for damages resulting from the respondent's refusal to close the purchase. The respondent commenced a counterclaim for the return of the $50,000 deposit. The parties agreed to have the claim and counterclaim determined by way of a summary judgment motion.

[7] As noted, there are two TCPL easements relating to the property. The motion judge found, as a fact, that the respondent had only been told of one of the two easements before he entered into the APS, and that the appellant was in breach of the APS, which required title to the property to be free from all restrictions except those specifically provided for in the APS. The motion judge also found, as a fact, that the respondent had not been told of the outstanding litigation between the appellant and TCPL arising out of the second easement. The motion judge further found that this second easement could have a significant effect on the respondent's use and enjoyment of the property. The motion judge gave detailed reasons for his conclusions.

[8] In order to succeed on his appeal, the appellant must show that the motion judge made palpable and overriding errors in reaching the factual conclusions that he did. The appellant has failed to do so. The record amply supports the factual findings that the motion judge made.

[9] The appellant's failure to disclose the second easement and the obligations arising from that easement, given the requirement to convey title subject only to restrictions specifically listed in the APS, justified the respondent's refusal to complete the transaction. Further, and in any event, there was nothing in the APS that required the respondent to sign the agreement with TCPL, which the appellant had contracted to do. This also justified the respondent's refusal to complete the transaction. On either basis, the respondent was entitled to the return of the deposit and the motion judge was correct in granting summary judgment to that effect.

[10] It is for these reasons that the appeal was dismissed. The appellant will pay to the respondent the costs of the appeal fixed in the agreed amount of $6,000 inclusive of disbursements and HST.

"K. Feldman J.A."

"K. van Rensburg J.A."

"I.V.B. Nordheimer J.A."