Court File and Parties

Court of Appeal for Ontario Date: 20210218 Docket: C68078

Strathy C.J.O., Brown and Miller JJ.A.

Between: Il-Jung Joo and Hae-Sun Joo Plaintiffs (Respondents)

And: Hong Phat Tran and Thu Thuy Thi Dinh Defendants (Appellants)

And Between: Hong Phat Tran and Thu Thuy Thi Dinh Plaintiffs by Counterclaim

And: Il-Jung Joo, Hae-Sun Joo, Rocky Chow, Living Realty Inc., Brokerage, Bonnie Wan and Daniel Wan Defendants by Counterclaim

Counsel: Domenic Saverino, for the appellants Jonathan M. Friedman, for the respondents

Heard: February 11, 2021 by video conference

On appeal from the judgment of Justice Gregory M. Mulligan of the Superior Court of Justice, dated January 23, 2020, with reasons reported at 2020 ONSC 806.

Reasons for Decision

[1] The appellant purchasers entered into an agreement of purchase and sale (“APS”) with the respondent vendors to purchase the respondents’ home for $2.1 million. The respondents accepted the offer on April 30, 2017.

[2] Through para. 10 of the standard form agreement, the vendors warranted that the property was free from all encumbrances, save and except for minor utility easements and other enumerated exceptions. Schedule A to the APS added a term stating that the vendors would discharge any encumbrances on or before closing, either through sale proceeds or by way of solicitor’s undertaking. Schedule A did not include the express qualification contained in para. 10, which excluded minor utility easements.

[3] On May 4, 2017, the APS was amended by the addition of Schedule C, which contained a building survey showing four easements registered against the property. Three of these were utility easements concerning electricity and telecommunications. A fourth notation was granted to a municipality and concerned water mains, sanitary sewers, and stormwater drains.

[4] On August 14, 2017, the appellants took the position that the respondents had failed to disclose easements of “material significance”. On August 31, 2017, the appellants requisitioned their removal. The respondents refused, on the basis that the easements were expressly contemplated by para. 10 of the APS. The appellants refused to close.

[5] The respondents subsequently resold the property at a substantial loss. They brought an action for breach of contract and were granted summary judgment in the amount of $430,000.

[6] On appeal, the appellants argue that the motion judge erred by: (1) not finding that Schedule A imposed an unqualified duty on the vendor to provide clear title; (2) finding the appellants were not entitled to terminate the APS despite the respondents’ failure to remove the easements; (3) finding the easements were minor rather than material; and (4) resolving the main dispute on a motion for summary judgment.

[7] We do not agree that the motion judge erred in any respect.

[8] There was no evidence that the easements would actually interfere with the use or enjoyment of the property.

[9] The appellants’ argument on appeal is that the respondents were obligated to discharge all easements, come what may, regardless of whether such an obligation was possible to fulfill or would make any commercial sense if it were. The appellants do not explain how the respondents could have discharged the easements, what the practical consequences would be for the appellants or the residents of any neighbouring properties, or how it would make commercial sense for a vendor of a residential property to remove electricity, water, and sewer services prior to conveying title. In response to the apparent absurdity of this position, the appellants fall back on the argument that, absurd or not, this was the agreement that the respondents made.

[10] The motion judge did not accept the appellants’ characterization of the APS as requiring the vendors to discharge standard easements. Although para. 26 of the APS required that in the event of conflict between an added provision and a standard provision, the added provision would supersede, the motion judge did not read para. 10 and Schedule A as being in conflict. The purpose of Schedule A, on the reading of the motion judge, was not to modify the obligations contained in para. 10, but to allow the obligations in para. 10 to be fulfilled by way of solicitor’s undertaking. Not only was this interpretation available to the motion judge, the alternative reading proposed by the appellants would have resulted in absurdity.

[11] We do not see any reviewable error in the motion judge’s interpretation of the APS.