Court File and Parties

Court of Appeal for Ontario Date: 20220929 Docket: C69452

Before: Feldman, Hoy and Lauwers JJ.A.

Between: Heather Downey and Francesco Marchese a.k.a. Frank Marchese Plaintiffs (Appellants)

And: Douglas Alexander Arey Defendant (Respondent)

Counsel: Peter H. Griffin and Lauren Mills Taylor, for the appellants Robert B. Cohen, for the respondent

Heard: September 13, 2022

On appeal from the judgment of Justice Jamie K. Trimble of the Superior Court of Justice, dated April 16, 2021.

Reasons for Decision

[1] The trial judge dismissed the action of the appellants, Ms. Downey and her partner, Mr. Marchese, against Ms. Downey’s father, Mr. Arey, seeking enforcement of an alleged oral agreement to sell them the Arey family home at 2860 Remea Court, Mississauga, Ontario.

[2] The trial judge found that there was no enforceable agreement to transfer the home because one fundamental term – the price – was not agreed to. And even if the price were agreed on, there would be no agreement to extend the closing date. Moreover, even assuming that there were both an agreement to transfer and an agreement to extend closing, the appellants would not be entitled to specific performance.

[3] The appellants argue that each of these findings is tainted by reviewable error.

[4] They say that the trial judge’s finding that the purchase price of the home had not been agreed to is a palpable and overriding error: the parties had agreed to a purchase price of $850,000. They argue that the trial judge discounted the fact that the appellants pled that the purchase price was $850,000, in his statement of defence Mr. Arey admitted that the oral agreement was for a sale price of $850,000, and in his response to the appellants’ request to admit Mr. Arey states that the parties agreed on a price of $850,000. They characterize the dispute between the appellants and Mr. Arey as being about a potential $100,000 adjustment on closing based on a gift Mr. Arey intended to give his children, which they say is not a material or essential term of the contract, and not about the purchase price.

[5] The appellants also argue that while the trial judge properly directed himself that whether there has been a meeting of the minds is an objective determination, he erred in law by in fact considering whether the parties were subjectively ad idem on the issue of price.

[6] We reject these arguments.

[7] At paras. 98 to 100 of his reasons, the trial judge explained why, regardless of what the parties thought, he found that there was no agreement on the purchase price:

Notwithstanding that the oral agreement was for $850,000.00, the disagreement was over when and how the “family discount” was to be applied. Ms. Downey and Mr. Marchese said that the price was effectively $750,000.00 because shortly before closing Mr. Arey would forgive $100,000.00 of that price. It is unclear when Mr. Arey would do that.

Mr. Arey also said that the price was $850,000.00. [He] said, however, that this price had already been discounted by $100,000.00. He said that the fair market value of the house was $950,000.00….

Mr. Arey says that he used this fair market value and deducted from it the “family discount” to arrive at the price of $850,000.00. Notwithstanding determined cross-examination of the point he did not budge from his evidence that the $850,000.00 price agreed upon was after deducting the “family discount”.

[8] The trial judge’s finding that the purchase price had not been agreed to is supported by the record. Despite having pled that the price was $850,000, the appellants also pled that Mr. Arey agreed to reduce the agreed price on closing by a gift of $100,000. Ms. Downey’s evidence on her cross-examination was that the price was to be discounted at closing to $750,000:

Q, So, is it correct that in May of ’16 from your understanding you had an agreed upon oral agreement to purchase [the family home] for $850,000 with a closing date of August 31st, 2016?

A. Inclusive of $100,000 gift, so $750,000 Mr. Shah would have been the amount.

Q. Would you agree that your father did not expressly say to you: I will gift you $100,000 at the time of closing?

A. My father’s words were: We will discount the price of the house at the time of closing.

[9] Nor did the trial judge err by failing to consider whether an objective, reasonable bystander would conclude, in all the circumstances, that the parties were agreed on the issue of price. He wrote this, at para. 101 of his reasons:

I accept that each of the parties honestly believed their version of the price of the home. Thus, I find that an objective, reasonable bystander would conclude that, in all the circumstances, the parties were not agreed on price, a fundamental term to any contract. [Emphasis in Original.]

[10] The $100,000 difference is material. We agree that an objective, reasonable bystander would conclude, in all the circumstances, that the parties were not agreed on the purchase price.

[11] Because we conclude that there is no basis to interfere with the trial judge’s threshold finding that there was no enforceable agreement for the purchase and sale of the family home because the price was not agreed to, it is unnecessary to consider the appellants’ arguments with respect to the trial judge’s alternative findings.

[12] Accordingly, the appeal is dismissed. Counsel advised that Mr. Arey is now deceased. His estate shall be entitled to costs in the agreed upon amount of $30,000, inclusive of HST and disbursements.

“K. Feldman J.A.”

“Alexandra Hoy J.A.”

“P. Lauwers J.A.”