Court of Appeal for Ontario

Date: 2025-06-03
Docket: COA-24-CV-1265
Coram: J.C. Copeland, P.J. Monahan, M. Rahman

Between:
Christine Yui and Michelle Yui
Applicants (Respondents)

and

Sa Yan and Royal LePage Signature Realty
Respondents (Appellants)

Appearances:
Jizi Chen, for the appellant
David Myers, for the respondents

Heard: May 30, 2025

On appeal from the order of Justice Annette Casullo of the Superior Court of Justice, dated November 29, 2024, with reasons at 2024 ONSC 6674.

Reasons for Decision

I. Overview

[1] This dispute arises out of the termination of an assignment of an agreement of purchase and sale. At the conclusion of the hearing, we dismissed the appeal with reasons to follow. These are our reasons.

[2] On August 29, 2023, the respondents entered into the agreement with the appellant to take over the purchase of a property. Under the agreement, the respondents were required to provide a $60,000 deposit, which they did. The agreement was conditional. The respondents were entitled to terminate the agreement if the terms were not acceptable to the respondents’ lawyer based on the lawyer’s “own and absolut[e] opinion”. The respondents were required to deliver any such notice of termination in writing within 17 banking days after accepting the offer. There is no issue that the respondents, through their real estate agent, advised the appellant’s agent, Ms Picard, that they were terminating the agreement within the required time period. The appellant took the position that the respondents’ termination was not a valid exercise of the lawyer approval condition. The appellant refused to return the respondents’ deposit.

[3] The respondents brought an application seeking the return of their deposit. The respondents argued that they had properly exercised their right to terminate the agreement and were therefore entitled to a return of their deposit. The appellant opposed the application for three reasons. First, there was no evidence to suggest that the respondents’ lawyer did not approve the terms of the agreement. Second, the condition could not be waived at the respondents’ sole discretion. Third, the termination notice was not valid because it did not say that the agreement was unacceptable to the respondents’ lawyer, but simply advised that they were “backing out”.

[4] The application judge rejected the appellant’s submissions. The application judge found that the respondents provided adequate notice. She accepted the respondent Christine Yui’s evidence that she consulted with a lawyer before terminating the agreement. She found that the respondents were not required to disclose their rationale for the termination because such communications were protected by solicitor-client privilege. Moreover, the application judge found that the agreement did not require written notice to be accompanied by a lawyer’s explanation for termination. The application judge ordered the return of the deposit.

II. Issues on Appeal

[5] The appellant alleges that the application judge erred in concluding that the respondents properly exercised the termination condition. The appellant also argues that the application judge erred in finding that solicitor-client privilege applied and that the email the respondents’ agent sent to the appellant’s agent was sufficient to exercise the termination condition. In particular, the appellant contends that solicitor-client privilege is impliedly waived when a party is exercising a termination condition that hinges on their lawyer’s approval. Finally, the appellant argues that the application judge failed to consider the appellant’s real estate agent’s evidence that the respondents backed out of the agreement because of their living arrangements and not because of advice from their lawyer.

III. Analysis

[6] We do not agree that the application judge committed any errors in finding that the respondents properly exercised the termination condition. Nor do we find that she improperly failed to consider the appellant’s real estate agent’s evidence.

[7] We agree with the application judge that there was nothing in the termination condition that required the respondents to specifically disclose that their lawyer did not approve the agreement or any reasons why it was not approved. The inclusion of the lawyer approval condition does not imply any waiver of solicitor-client privilege. The wording of the condition refers to the “Assignee’s Solicitor’s own and absolut[e] opinion”. This phrase makes clear that the termination is within the lawyer’s sole discretion. There is no requirement to disclose what the opinion is. Nor is there any requirement that the lawyer send the communication. The application judge was satisfied, based on the evidence before her, that the respondents complied with the termination condition. That finding was open to her and her reasons do not disclose any palpable or overriding error.

[8] Finally, we do not accept that the application judge failed to consider Ms Picard’s evidence about the reason she believed the respondents were terminating the agreement. Ms Picard’s evidence, at its highest, conveyed her understanding of the respondents’ reasons for terminating the agreement. That understanding was based on Ms Picard’s discussions with the respondents’ agent, and because the respondents’ agent had never mentioned the respondents’ lawyer. The application judge’s failure to refer to Ms Picard’s evidence is neither surprising nor of any consequence.

IV. Additional Issues

[9] The respondents raised an additional issue in their factum. They ask this court to vary the application judge’s order to include a provision dealing with pre‑ and post-judgment interest regarding the $60,000 deposit. The respondents say that they included a claim for pre- and post-judgment interest in their notice of application and addressed it before the application judge. The appellant opposes varying the order.

[10] We decline to vary the order to include a provision about pre- and post-judgment interest because it is not properly before this court. The respondents did not bring a cross-appeal to vary the order, which they were required to do according to r. 61.07(1)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[11] The parties are encouraged to reach an agreement on costs of the appeal. If they cannot, they may file written submissions limited to two pages, plus a bill of costs. The respondents’ submissions shall be filed within 10 days of the release of these reasons. The appellant’s submissions shall be filed within 10 days of the filing of the respondents’ submissions.

V. Disposition

[12] The appeal is dismissed.

“J.C. Copeland”
“P.J. Monahan”
“M. Rahman”