Smith v Vankoughnet and Rasmussen, 2017 ONSC 4293

COURT FILE NO.: CV-17-574682-OT DATE: 20170712 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

Steve Smith Applicant – and – Terry Richard Vankoughnet and Jeremy Rasmussen Respondents

COUNSEL: Dara Khoem, for the Applicant Andrew Mae and Christopher Deevy, for the Respondents

HEARD: July 5, 2017

REASONS FOR DECISION

DiTOMASO J.

INTRODUCTION

[1] The Respondents, Terry Richard Vankoughnet (“Vankoughnet”) and Jeremy Rasmussen (“Rasmussen”) own property located in Gravenhurst, Ontario. It is described as a beautiful lakefront property. So beautiful was this property in cottage country that the Applicant, Steve Smith (“Smith”) decided that he wanted to purchase this property for the purposes of creating a recreational and “generational” family compound.

[2] Mr. Smith claims that Mr. Vankoughnet and Mr. Rasmussen agreed to sell him the property after Mr. Smith viewed the property and made an offer to purchase. Mr. Smith claims that he had an oral agreement to purchase the property from Mr. Vankoughnet and Mr. Rasmussen further supported by part performance and the written agreement of purchase and sale.

[3] Mr. Vankoughnet and Mr. Rasmussen deny that there was any oral or any other agreement between either or both of them and Mr. Smith. While it is true that Mr. Smith viewed the property and made an offer to purchase, this offer was not accepted by Mr. Vankoughnet and Mr. Rasmussen. Rather, they entered into an agreement to sell the property to another party, Xirong Zhou (“Zhou”). The closing of the Zhou transaction was to take place on June 15, 2017. That closing date has been extended to July 15, 2017. Mr. Zhou has notified Mr. Vankoughnet and Mr. Rasmussen that he reserves his right to sue them for damages for breach of contract if the closing does not take place on July 15, 2017.

[4] In the meantime, Mr. Smith commenced an Application for specific performance to compel Mr. Vankoughnet and Mr. Rasmussen to complete the transaction with him as originally intended. Further, on June 9, 2017, a Certificate of Pending Litigation was granted by Justice McEwen against the property.

[5] The parties agree that this matter comes before the court with some sense of urgency. Mr. Vankoughnet and Mr. Rasmussen bring a motion to discharge and vacate the Certificate of Pending Litigation. It is opposed. Both parties agree that the application should be heard at the same time as the motion to discharge and vacate the Certificate of Pending Litigation as the Zhou transaction closing date has been extended to July 15, 2017, as Mr. Zhou has put Mr. Vankoughnet and Mr. Rasmussen on notice of a damages claim should the Zhou transaction fail to close.

OVERVIEW

[6] In early March, 2017, Mr. Smith was seeking an estate property with water, approximately 500-1000 acres and 1.5 hours away from Cookstown. In late 2017, his real estate agent found a property that met his criteria. That property municipally known as 155 Lewisham Road, Gravenhurst, consisted of 960 acres of rural land. On this property is located a farmhouse, separate garage and small bunkie. The remaining land is undeveloped and consists of heavy bush and forest. The property fronts on South Longford Lake and was listed on the Multiple Listing Service (“MLS”) for a price of 2.7 million dollars. He further alleges the property fronts on two lakes and has an exquisite view.

[7] The property is owned by the Respondents as tenants in common (one third Vankoughnet and two-thirds Rasmussen) and has been owned by them since 2006.

[8] Mr. Smith claims that the property is unique and is one of a kind which cannot be duplicated by any means, or, “of the very few that exist in Ontario”. Mr. Vankoughnet and Mr. Rasmussen say the property is not unique.

[9] The parties do not disagree that during the month of March 2017 and up to the end of April 2017, Mr. Smith and Mr. Vankoughnet and Mr. Rasmussen met a few times, were shown the property by air and communicated regarding the possible sale of the property to Mr. Smith.

[10] There is some disagreement as to the purpose for which Mr. Smith wished to purchase the property. Mr. Smith maintains he did not wish to purchase the property for development. Rather, he wished to establish a generational family compound for personal use. Mr. Vankoughnet and Mr. Rasmussen allege that while Mr. Smith did express his interest in establishing a family compound, they allege that Mr. Smith also expressed that as the property consists of 10 lots he could build 10 buildings on it. Mr. Smith commented it was a lot of property and asked if Mr. Vankoughnet and Mr. Rasmussen would be interested in retaining half or some of it.

[11] Mr. Vankoughnet addressed Mr. Smith’s interest in the property by advising that Mr. Smith should make an offer which would be considered.

[12] To the contrary, Mr. Smith submits that he and Mr. Vankoughnet and Mr. Rasmussen had an oral agreement that they would sell the property to him. Mr. Smith asserts that he and Mr. Vankoughnet and Mr. Rasmussen agreed on a price and terms verbally, dictated by Mr. Vankoughnet and Mr. Rasmussen. Mr. Smith alleges that this oral agreement was further substantiated in writing and with witnesses.

[13] Mr. Smith allegedly incorporated the dictated terms by Mr. Vankoughnet and Mr. Rasmussen into an Agreement of Purchase and Sale. It is alleged that Mr. Vankoughnet and Mr. Rasmussen requested Mr. Smith to provide a completed Agreement of Purchase and Sale (“APS”) by April 30, 2017, which is what Mr. Smith did. Mr. Smith also delivered a deposit of $50,000 held in trust by his own lawyer.

[14] On May 1, 2017, Mr. Smith was informed that Mr. Vankoughnet and Mr. Rasmussen decided to sell the property to another buyer. Mr. Smith maintains that at all times he intended to complete the purchase. In furtherance of the oral agreement, Mr. Smith also maintains that he took certain steps establishing part performance. He asserts on the basis of the existing record, it should be found that the parties have a contract and that specific performance should be ordered.

[15] For their part, Mr. Vankoughnet and Mr. Rasmussen allege that there never was an oral agreement or any agreement at all. There had been discussions which did not result in an accepted APS. They categorically deny that they made any offer to Mr. Smith to sell him the property which was capable of being accepted by Mr. Smith. Neither did they reach an agreement with him to do so. They deny that there is any part performance. They rely upon Section 4 of the Statute of Frauds to support their position that there was no written agreement.

[16] Further, Mr. Vankoughnet and Mr. Rasmussen allege that they were wholly entitled to sell the property to Mr. Zhou which is what they did.

[17] Mr. Smith’s Application was issued on May 5, 2017. He brought a motion to obtain a Certificate of Pending Litigation on June 6, 2017. The order of Justice McEwen granting the Certificate of Pending Litigation was dated June 9, 2017.

[18] The motion to discharge and vacate the Certificate of Pending Litigation and the Application for specific performance were both heard by this court on this record on an urgent basis.

MOTION TO DISCHARGE AND VACATE CERTIFICATE OF PENDING LITIGATION

[19] Mr. Vankoughnet and Mr. Rasmussen bring this motion to discharge and vacate a Certificate of Pending Litigation pursuant to s. 103(6) of the Courts of Justice Act, RSO 1990 Chap. 43, issued pursuant to an ex parte order issued by Justice McEwen on June 9, 2017, registered against the disputed property also known as the “Gravenhurst” property.

[20] Mr. Smith has also commenced an Application for specific performance of an agreement for the sale of the Gravenhurst property to him. Mr. Vankoughnet and Mr. Rasmussen seek an order discharging and vacating the Certificate of Pending Litigation in order to close the sale of the property to Mr. Zhou which closing has been extended to July 15, 2017.

ISSUE

[21] The issue to be determined is whether Mr. Vankoughnet and Mr. Rasmussen are entitled to an order discharging and vacating the Certificate of Pending Litigation.

POSITION OF THE PARTIES

Position of Mr. Vankoughnet and Mr. Rasmussen

[22] The Respondents submit that Mr. Smith does not have a reasonable claim to an interest in the property. He is not the “true applicant”. Rather, he brings these proceedings on behalf of an unnamed and/or non-existent corporation. Further, they assert that he has not demonstrated that in respect of the subject property that:

(a) there was an agreement;

(b) that part performance has taken place; and,

(c) that damages are an inadequate remedy.

[23] Further, on consideration of the eight equitable factors set out in Dhunna [^1], Mr. Smith has not satisfied these factors.

[24] Mr. Vankoughnet and Mr. Rasmussen submit that the Certificate of Pending Litigation ought to be discharged and vacated.

Position of Mr. Smith

[25] Mr. Smith submits that the property is unique and was the subject of an oral contract, which was further put in writing, where Mr. Vankoughnet and Mr. Rasmussen agreed to sell the property to him. Whether the APS falls under s. 4 of the Statute of Frauds or not, Mr. Smith asserts that his claim can stand on either as part performance was also exercised by him. He submits that the property is unique for which there is no substitute. He intends to develop a family retreat and compound to be used for his family generationally, never to be sold to anyone else. The further and potential value of this property is of sentimental value to Mr. Smith and to his family for generations to come. Mr. Smith submits that the quantum of that value cannot be replaced with respect to damages. He submits that damages would not be a satisfactory remedy.

[26] Mr. Smith contends that the Certificate of Pending Litigation ought to remain in place, and that he should be granted his Application for specific performance.

ANALYSIS

[27] For the following reasons, I find that Mr. Smith’s Certificate of Pending Litigation ought to be discharged and vacated from title to the Gravenhurst property.

Law Applicable to Discharging the Certificate of Pending Litigation

[28] Section 103(6) of the Courts of Justice Act confers discretion on a court to discharge a certificate,

(a) where the party at whose instance it was issued,

(i) claims the sum of money in place of or as an alternative to the interest in the land claimed,

(ii) does not have a reasonable claim to the interest in the land claimed, or

(iii) does not prosecute the proceeding with reasonable diligence;

(b) where the interests of the party at whose instance it was issued can be adequately protected by another form of security; or

(c) on any other grounds that are considered just, and that the court may, in making the order, impose such terms as to the giving of security or otherwise as the court considers is just.

[29] The court may discharge a Certificate of Pending Litigation, when the applicant has no reasonable claim to an interest in the land claimed. In the case at bar, the “true applicant” is not Mr. Smith. Rather, Mr. Smith brings these proceedings “in trust for an Ontario numbered corporation”. There is no evidence that that numbered Ontario corporation was ever incorporated or registered. There is no evidence that there were any discussions between that parties that Mr. Smith would be purchasing the property in trust for a numbered corporation. Mr. Smith has not personally demonstrated that he has a reasonable claim to an interest in the property. I further reject his claims that he had an oral agreement with Mr. Vankoughnet and Mr. Rasmussen to sell the property to him and that the oral agreement is further supported by part performance which does not offend the Statute of Frauds and that damages are an inadequate remedy. I will provide further reasons when determining Mr. Smith’s Application for specific performance. Those reasons shall be read in support of my finding that Mr. Smith does not have a reasonable claim to the interest in the Gravenhurst property.

[30] The onus is on the moving party, Mr. Vankoughnet and Mr. Rasmussen to persuade the court to discharge the Certificate of Pending Litigation. [^2] Mr. Vankoughnet and Mr. Rasmussen also contend that not only does Mr. Smith not have a reasonable claim to an interest in the Gravenhurst property, but also a number of equitable factors ought to be taken into account when deciding whether to discharge and vacate the Certificate of Pending Litigation.

[31] In 572383 Ontario Inc. v. Dhunna, 1987 CarswellOnt 551, the court enunciated the following non-exhaustive list of factors where s. 103(6)(c) is engaged:

1. Whether the plaintiff is, or is not, a shell corporation:
2. Whether the land is, or is not, unique;
3. The intent of the parties in acquiring the land;
4. Whether there is an alternative claim for damages;
5. The ease or difficulty of calculating damages;
6. Whether damages would be a satisfactory remedy;
7. The presence or absence of another willing purchaser;
8. The harm done to the defendant if the certificate is allowed to remain, or to the plaintiff if the certificate is removed, with or without the requirements of alternative security.

[32] These factors have been referred to in a number of subsequent cases: Coldwell Banker, supra, at pp. 13-14; McGrath v. B.G. Schickendanz Homes Inc., [2002] O.J. No, 4161 (Ont. S.C.J.), at p. 12; JDM Developments Inc. v. J. Stollar Construction Ltd., [2004] CarswellOnt 4502 (Ont. S.C.J.) ], at para. 33.

[33] The onus is on the party seeking to discharge and the Certificate of Pending Litigation to persuade the court that its discretion should be exercised in favour of the discharge. 931473 Ontario Ltd. v. Coldwell Banker Inc., supra, at p. 11.

[34] I find that having considered the evidence, the law and the arguments presented by counsel, the motion is granted on the basis that Mr. Vankoughnet and Mr. Rasmussen have met their onus of demonstrating that Mr. Smith does not have a reasonable claim to the Gravenhurst property. I further find for additional reasons that they have shown that a trial is unnecessary to prove that Mr. Smith is not entitled to the Certificate of Pending Litigation. Accordingly, the Certificate of Pending Litigation must be discharged. I am able to come to this conclusion on the whole of the evidence.

[35] Even if a party can demonstrate a reasonable claim to an interest in land, the court may nevertheless discharge and vacate the Certificate of Pending Litigation if damages were to provide an adequate remedy. [^3]

[36] In deciding whether to discharge and vacate a Certificate of Pending Litigation, the central issue is whether the court believes it is just to do so. [^4]

[37] Further, the court has broad discretion when weighing the relevant factors in determining whether to discharge and vacate the Certificate of Pending Litigation. [^5]

Shell Corporation

[38] In considering the Dhunna factors, Mr. Vankoughnet and Mr. Rasmussen submit that there are numerous reasons as to why equity favours the discharge of the Certificate of Pending Litigation. In this case, Mr. Smith seeks to purchase the property “in trust for an Ontario numbered corporation”. There is no evidence that a shell corporation even exists in our case as opposed to other cases where such a corporation does exist. Rather, the deposit monies in the amount of $50,000, came from Vespra Country Estate Ltd., a company in which Mr. Smith has an interest. There is no evidence that he ever discussed with Mr. Vankoughnet and Mr. Rasmussen that the he would purchase the property in the name of an Ontario numbered corporation. To the contrary, I accept the evidence of Mr. Vankoughnet and Mr. Rasmussen that at all material times they thought they were dealing with Mr. Smith personally. A background search in respect of Mr. Smith by counsel for Mr. Vankoughnet and Mr. Rasmussen disclosed that Mr. Smith has been involved in a number of properties not owned by him or owned by a corporation in which he has some interest. I find that the identity of the true owner informs the inquiry about whether he has a reasonable interest in the land. Certainly, there is no evidence that there was ever an Ontario corporation incorporated for the sole purpose of completing the purchase of the Gravenhurst property from Mr. Vankoughnet and Mr. Rasmussen. There was no evidence as to who is the “true” purchaser. Mr. Smith brings these proceedings “in trust for an Ontario numbered corporation” that does not exist nor is there any evidence that it existed at all. I find this factor favours the discharge of the Certificate of Pending Litigation.

Part Performance

[39] In Elliott v. Grand Shores Realty Development Corp. [^6], the court defined specific performance as “an equitable remedy available when a person has an interest in land through a valid agreement of purchase and sale. If there is not a valid agreement of purchase and sale, the remedy cannot follow.”

[40] I find, that in our case, the documentary evidence supports that there was no valid agreement of purchase and sale between Mr. Smith and Mr. Vankoughnet and Mr. Rasmussen, either oral or written.

[41] Mr. Smith alleges that there was an oral agreement with respect to the sale of the property. Assuming that there was (which I have not found), part performance has to be present to avoid the operation of s. 4 of the Statute of Frauds, RSO 1990, Chap. S.19, s. 4. [^7]

[42] In Starlite Variety Stores Ltd. v. Cloverland Investments Ltd., 1978 CarswellOnt at 145, at para. 190, the court considered the test for part performance:

…(1) the acts of part performance must be such as not only to be referable to a contract such as that alleged, but to be referable to no other title; (2) they must be such as to render it a fraud in the defendant to take advantage of the contract not being in writing; (3) the contract to which they refer must be such that as in its own nature is enforceable by the court; (4) there must be proper parol evidence of the contract which is let in by the acts of part performance. The part performance, in order to take the case out of the operation of the statute, must be made by the person seeking to enforce the parol agreement.

[43] In Taylor v. Rawana [^8], the court examines in detail the requirements for part performance, clarifying that the acts must be part of the performance, not actions in preparation for the performance.

[44] In our case, there was no contract entered into and accordingly, whatever steps Mr. Smith claims that he took or indeed did take, is of no consequence.

[45] In Erie Sand and Gravel Limited, supra, the court commented on the effect of one party proffering an agreement of purchase and sale:

I accept that delivery of an offer to purchase land, with a deposit, will not normally amount to part performance. It happens every day and is not suggestive of a pre-existing agreement in respect of the land. In fact, it suggests the opposite – namely, that the offeror is hoping to be able to enter into an agreement to purchase the property.

[46] The court in Erie Sand expressly recognized that an offer to purchase land coupled with a deposit is a common occurrence and does not amount to part performance. In Erie Sand, the Court of Appeal also dealt specifically with the critical nature of the right of first refusal in that particular case. [^9]

[47] I also find that there is no part performance for the following reasons:

a. The bald and unsupported assertion that Mr. Smith had apparently arranged to sell other property “in anticipation of the completed agreement” is merely preparatory. (See paragraphs 23, 24 and 32 of Mr. Smith’s affidavit sworn May 4, 2017);

b. Delivery of the Smith offer is not part performance; and,

c. Delivery of the deposit to Mr. Smith’s solicitor is also not part performance.

[48] I also note the contents of Mr. Smith’s text of April 29, 2017, which states “Terry, I will not be coming to see you today. Jeremy is right. I have way too much to do if I am to try and put an offer together no matter what the deal is”. [Emphasis mine] (See Exhibit ‘C’ of Mr. Smith’s affidavit sworn May 4, 2017).

Uniqueness of the Disputed Land/Damages are the Appropriate Remedy

[49] In Semelhago v. Paramadevan [^10], the court held there would no longer be a presumption that land is inherently unique. To satisfy the court that specific performance is an appropriate remedy, the parties would need to be able to provide evidence that the land is unique to the extent that its substitute would not be readily available. [^11]

[50] The Court of Appeal in Erie Sand [^12] confirmed that the remedy of specific performance is only available if damages are inadequate to compensate the applicant for their loss.

[51] A purchaser of land making a claim for specific performance will have the onus of demonstrating that damages would be an inadequate remedy. [^13]

[52] To determine whether or not damages are an adequate remedy, the court will have to assess if the property in question is “unique”. [^14]

[53] Once again, the court in Erie Sand stated that “Land is unique if there is no readily available substitute property.” [^15]

[54] A determination of uniqueness requires “a critical inquiry, on a case by case basis, as to the nature and function of the property in relation to a prospective buyer.” [^16]

[55] The court uses a subjective-objective test in determining whether the land has unique value to the purchaser. [^17]

[56] The objective component looks at whether “objectively, a reasonable person familiar with the facts surrounding the agreement of purchase and sale would conclude that the property is unique”. [^18]

[57] In 1252668 Ontario Inc. v. Wyndham Street Investments Inc., [1999] O.J. No. 3188, Justice Lamek defined uniqueness, saying he “does not consider that the plaintiff has to demonstrate that the Premises are unique in a strict dictionary sense that they are entirely different from any other piece of property. It is enough, in my view, for the plaintiff to demonstrate that the Premises have a quality that makes them especially suitable for the proposed use and that they cannot be reasonably duplicated elsewhere.”

[58] I find that the Gravenhurst property is not unique for the following reasons.

[59] In his affidavit at paragraph one, Mr. Smith provides an exceptionally broad criteria for the type of property he was looking to purchase as being; “estate property with water on it, between 500 to 1000 acres and 1 hour and a half distance from Cookstown.” There is no evidence that the property is unique to the extent that its substitute would not be readily available or the property has a quality that makes it especially suitable for the proposed use and it cannot be reasonably duplicated elsewhere.

[60] Mr. Smith has no sympathetic link to the property. He appears to be a total stranger to the property. There is no evidence as to the lack of comparable properties. Mr. Smith has not searched for comparable properties and has not deposed that none are available. Further, there is some suggestion that Mr. Smith may be looking for a property with a view to developing it to make a profit. There are 10 lots on the property. In his discussions with Mr. Vankoughnet, Mr. Smith referenced these 10 lots and the ability to construct 10 buildings. The intended purchase of the property through a corporation is also suggestive of a purchase with business/development purposes in mind which is contrary to Mr. Smith’s intention to create a generational family compound to enjoy what he described as a unique property.

[61] Even Mr. Smith’s factum refers to the property as having; “(i) further potential value and (ii) being one of a kind or very few that are equally comparable.” I find such descriptors are not consistent with a property that is unique.

[62] Further, Mr. Smith in his affidavit of May 4, 2017, at paragraph 32 deposes that in anticipation of the completed agreement, he arranged to sell a very valuable property for a considerably lower amount than it was worth.

[63] In his second affidavit sworn June 29, 2017, at paragraph 40, Mr. Smith further puts in issue the question of damages. He states that he will not have any issues with proving what losses he and his family have incurred by selling properties early before zoning had been completed on them. He goes on to state that losses would be substantial and easily justifiable into the millions of dollars. However, he goes on to say that this was a decision that he made for the sake of his family and because he believed the Gravenhurst property was so unique. Although Mr. Smith does not ask for damages, he puts damages in issue. Mr. Vankoughnet and Mr. Rasmussen contend that these allegations are totally unfounded and further assert if Mr. Smith could establish that there was a contract between the parties and part performance, damages would be an adequate remedy.

[64] I find that the property is not unique and as for damages, Mr. Smith deposes that damages can be easily proven. Again, whether damages are a satisfactory remedy, we return to the inquiry as to whether or not the property is unique. In this regard, I have found that it is not.

The Presence or Absence of Another Willing Purchaser

[65] In our case, there is another willing purchaser, Mr. Zhou, who not only intends to close his purchase of the Gravenhurst property but has also put Mr. Vankoughnet and Mr. Rasmussen on notice of his claim for damages if they fail to close. Also, he has registered a caution on title. This factor would weigh in favour of discharging the Certificate of Pending Litigation.

Harm Caused to Mr. Vankoughnet and Mr. Rasmussen by the Certificate of Pending Litigation

[66] This factor favours the discharge of the Certificate of Pending Litigation. As I have indicated, Mr. Vankoughnet and Mr. Rasmussen have been put on notice of Mr. Zhou’s claim if they fail to close the Zhou transaction on July 15, 2017. Further, Mr. Zhou has registered a caution on title.

[67] I conclude that a consideration of all of these equitable factors would favour the discharge of the Certificate of Pending Litigation.

[68] I do not agree with the submissions by counsel for Mr. Smith that the Dhunna factors are not neatly checked off. A consideration of the overall context of the dealings between the parties would suggest otherwise. The name used by Mr. Smith and the uniqueness of the property ought to be considered within such a contextual matrix. I have done so.

[69] Undertaking a contextual analysis, I reject the submissions made by counsel for Mr. Smith.

CONCLUSION

[70] For these reasons, the Certificate of Pending Litigation granted by Justice McEwen on June 9, 2017 is discharged and vacated from title to the property municipally known as 155 Lewisham Road, Gravenhurst, Ontario. That property is legally described as follows:

PCL 13367 SEC MUSKOKA; LOT 5 CON 6 RYDE; PCL 7649 SEC MUSKOKA; PT LOT 1 CON 6 RYDE AS IN LT16178; LT 1-2 CON5 RYDE, PCL 13366 SEC MUSKOKA; LT 2 CON 6 RYDE; PCL 13367 SEC MUSKOKA; PT LT 1 CON 6 RYDE AS IN LT27334; PCL 20869 SEC MUSKOKA; LT 4 CON 5 RYDE; PCL 27083 SEC MUSKOKA; LT 3 CON 5 RYDE; PCL 13194 SEC MUSKOKA; LT 3 CON 6 RYDE; PT LT 5 CON 5 RYDE AS IN DM223520; LT 4 CON 6 RYDE; GRAVENHURST; THE DISTRICT MUNICIPALITY OF MUSKOKA.

THE APPLICANT’S APPLICATION FOR SPECIFIC PERFORMANCE

[71] Mr. Smith asserts that the parties initially entered into an oral contract for the disputed Gravenhurst property. He contends that the contract was then substantiated in writing with the terms dictated and directed by Mr. Vankoughnet and Mr. Rasmussen by using an agreement of purchase and sale. Mr. Smith returned the APS with a deposit to his lawyer allegedly as instructed by Mr. Vankoughnet and Mr. Rasmussen. Mr. Smith asserts that he relied on the APS between the parties and decided to sell his own property in order to satisfy the APS within the stipulated time and terms. Mr. Smith contends that he exercised part performance. He alleges that Mr. Vankoughnet and Mr. Rasmussen reneged on their agreement and chose to sell to another buyer, Mr. Zhou, thereby causing detriment to Mr. Smith. Mr. Smith asserts that there was a binding agreement and specific performance should be ordered to allow the transaction for the Gravenhurst property to be completed between Mr. Smith and Mr. Vankoughnet and Mr. Rasmussen.

[72] Mr. Vankoughnet and Mr. Rasmussen have a completely different version and position regarding the dealings between Mr. Smith and themselves. They assert that there was no oral agreement for the sale of the Gravenhurst property. At all material times, they invited Mr. Smith to deliver an offer for consideration. He did so together with a deposit. Mr. Vankoughnet and Mr. Rasmussen considered Mr. Smith’s offer and decided not to engage in any further discussions with Mr. Smith regarding the sale of the Gravenhurst property to him. Instead, they sold the property to Mr. Zhou for exactly the same amount of money offered by Mr. Smith but on terms which Mr. Vankoughnet and Mr. Rasmussen considered more favourable.

[73] As far as Mr. Vankoughnet and Mr. Rasmussen are concerned, it is their position that there was no oral agreement, there was no part performance, and there was no agreement of purchase and sale to sell the property to Mr. Smith. Mr. Vankoughnet and Mr. Rasmussen assert that in all of the circumstances, they were perfectly entitled to sell their property to anyone. They did so by selling the property to Mr. Zhou.

ISSUES

[74] The issues to be determined in respect of specific performance are as follows:

1. Did an oral contract exist between the parties?
2. Was there an agreement between Mr. Smith and the Respondents?
3. Were there sufficient acts of part performance?
4. Is the property unique? And are damages inadequate?
5. Is it unconscionable to allow for the Respondents to sell the property to another party?

POSITIONS OF THE PARTIES

Position of the Applicant Mr. Smith

[75] Mr. Smith asserts that he entered into an oral contract to purchase the disputed Gravenhurst property from Mr. Vankoughnet and Mr. Rasmussen. The oral agreement was substantiated in writing evidenced by an agreement of purchase and sale and deposit. The APS was not executed by Mr. Vankoughnet and Mr. Rasmussen. Mr. Smith asserts that he established part performance and that Mr. Vankoughnet and Mr. Rasmussen reneged on their agreement and chose to sell the property to Mr. Zhou. Mr. Smith asserts that there was a binding agreement and that specific performance should be ordered to allow the transaction of the property to be completed between the parties.

Position of the Respondents Vankoughnet and Rasmussen

[76] Mr. Vankoughnet and Mr. Rasmussen deny that there was any oral agreement with Mr. Smith. They also deny that there was any part performance by Mr. Smith. Mr. Smith’s APS and deposit is not evidence of part performance establishing or supporting any oral contract. Mr. Smith’s APS was returned to him without acceptance by Mr. Vankoughnet and Mr. Rasmussen. They chose not to have any further dealings with Mr. Smith. Instead, they assert they were free to sell their property to whomever they chose. In this regard, they sold the property to Mr. Zhou for the same amount of money offered by Mr. Smith, namely $2.3 million, but on more favourable terms. Mr. Vankoughnet and Mr. Rasmussen assert that Mr. Smith`s claim for specific performance is unfounded and ought to be dismissed.

ANALYSIS

[77] The following is a summary of Mr. Smith`s view of the facts.

[78] He states that the Gravenhurst property is a beautiful lakefront property and is unique as it is one of a kind, or “very few that are equally comparable and available”. The property fronts on two lakes with an exquisite view and “has further potential value”. As such, Mr. Smith seeks to purchase the property as a generational family property.

[79] During the month of March, 2017 and up to the end of April, 2017, Mr. Smith and Mr. Vankoughnet met a few times, was shown the property by air and communicated extensively regarding the sale of the property to him.

[80] According to Mr. Smith, Mr. Vankoughnet and Mr. Rasmussen sought to sell this property to Mr. Smith and continually pursued him to purchase the property as stated in Mr. Smith’s pleadings.

[81] Mr. Smith asserts that he and Mr. Vankoughnet and Mr. Rasmussen agreed on a price and terms verbally that was dictated by the Respondents and was told that the property was his. According to Mr. Smith, it was further substantiated heavily in writing and with witnesses.

[82] Mr. Smith goes on to contend that Mr. Vankoughnet and Mr. Rasmussen dictated the terms of the sale were put into the APS. They requested that Mr. Smith provide a completed APS by April 30, 2017. Further, Mr. Smith was to deliver a deposit of $50,000 which he did. Mr. Smith asserts that he provided the APS by the requested date to Mr. Vankoughnet and Mr. Rasmussen.

[83] On May 1st, 2017, Mr. Smith went to his lawyer to deliver funds in trust to be transferred to the Respondents’ lawyer and it is further asserted that the following day Mr. Vankoughnet and Mr. Rasmussen reneged on their agreement and Mr. Smith was informed that they decided to sell the property to another buyer. The property sold for $2.3 million, the same amount which Mr. Smith contends was accepted and discussed between the parties. Mr. Smith immediately instructed counsel to start an application for specific performance on May 5, 2017. A Certificate of Pending Litigation was obtained on June 9, 2017.

[84] Mr. Vankoughnet and Mr. Rasmussen have a much different version of the dealings with Mr. Smith. While they agree that the property was shown to Mr. Smith and his son, Jason Smith, there was no oral agreement. There was no part performance. There was no contract with Mr. Smith by Mr. Vankoughnet and Mr. Rasmussen to sell him the Gravenhurst property. Instead, what transpired between the parties was nothing more than an offer to purchase extended by Mr. Smith on terms which were not accepted by Mr. Vankoughnet and Mr. Rasmussen. The agreement of purchase and sale which was only an offer to purchase was returned to Mr. Smith. Mr. Vankoughnet and Mr. Rasmussen did not wish to have any further dealings with Mr. Smith. In turn, they sold the property for the same purpose price of $2.3 million to Mr. Zhou.

[85] I accept the evidence of Mr. Vankoughnet and Mr. Rasmussen in respect of their dealings with Mr. Smith. In doing so, I have reviewed all of the affidavit material coming from all deponents in respect of this Application.

[86] The following is a summary of the dealings between the parties which I do accept from a consideration of Mr. Smith’s affidavit sworn May 4, 2017 and affidavits sworn by Mr. Vankoughnet, his realtor Mr. Van Bodegom and Mr. Rasmussen:

MARCH 29, 2017

[87] On March 29, 2017, Mr. Vankoughnet along with a neighbour, Blake Tavener showed the property to Mr. Smith and his son, Jason Smith. No realtors were present during this event. However, the viewing was essentially arranged through realtors acting for the parties. The property was covered with snow and it would have been impossible to continue with the showing. However, as Mr. Smith indicated that he was a serious buyer and given the fact that he had travelled from Toronto, Mr. Vankoughnet arranged for a neighbour who owned a helicopter to show the property on that day from the air.

[88] The discussions on that day primarily consisted of:

a) Mr. Smith advising that he was a successful property developer and businessman;

b) Mr. Smith advising Mr. Vankoughnet that he had “already owned and sold half of Muskoka”;

c) Mr. Smith advising that he was looking at properties “around 500 acres” in order to “bring his family back together”;

d) Mr. Smith expressing that as the property consisted of 10 lots, he could build 10 buildings on it;

e) Questions and answers concerning the property generally;

f) Mr. Smith asking “what will it take to sell the property? Two million dollars?” and being advised by Mr. Vankoughnet that he should make an offer which would be considered;

g) Mr. Smith commenting that “it was a lot of property” and asking if the respondent would be interested in keeping half or some of it with Mr. Vankoughnet responding that he should put forward an offer which would be considered by the Respondents.

[89] While Mr. Smith had made comments about wanting to purchase the area for family to enjoy, Mr. Vankoughnet, based upon other general comments made by Mr. Smith to him was of the view that Mr. Smith was looking at property to develop for profit. The Application record and the Certificate of Pending Litigation motion refer to the property as having “further potential value”.

[90] Mr. Vankoughnet made Mr. Smith aware that there was another party who was interested in the property. The viewing was left that when the property could be inspected on the ground, Mr. Smith could view it.

March 30, 2017

[91] On March 30, 2017, Mr. Smith’s realtor sent the realtor for the Respondents a text message advising that Mr. Smith liked the property and wanted to return in the next few weeks. The Respondents’ realtor, Kris Van Bodegom, advised that Mr. Vankoughnet and Mr. Rasmussen had received the revised offer for the property from another interested purchaser and it was being reviewed the next day.

April 4, 2017

[92] On April 4, 2017, Mr. Golko, Mr.Smith’s realtor, advised Mr. Van Bodegom that Mr. Smith was interested in the property but he was not sure of Mr. Smith’s timeframe. He was also asked about the offer and was advised that it was not coming together.

April 20, 2017

[93] After not hearing anything from Mr. Golko for a few weeks, on April 20, 2017 Mr. Vankoughnet and Mr. Rasmussen asked if Mr. Smith would want to visit the property. Mr. Golko replied that his client “wants to get another family member to see it, hopefully soon”.

April 24, 2017

[94] On April 24, 2017, an offer from another real estate brokerage was received and Mr. Van Bodegom notified Mr. Golko of it.

April 25, 2017

[95] On this date, arrangements were made for Mr. Smith to view the property again on April 28, 2017. During those discussions of April 25, 2017, Mr. Smith inquired again what it would take for him to purchase the property. He was advised to put in an offer which would be considered.

[96] Mr. Smith was advised that he was already aware that the property was listed for over $2.7 million and as he had previously suggested a purchase price of $2 million, he might wish to start with an offer in the middle between those figures as a good start to any discussion.

[97] An amount of $2.3 million came up in discussion. However, no agreement was reached and Mr. Smith was advised to put an offer to Mr. Vankoughnet and Mr. Rasmussen in writing through his realtor. Mr. Van Bodegom asked Mr. Golko if Mr. Smith would consider placing a conditional offer on the property. Mr. Golko replied by advising that he would connect with Mr. Smith and then Mr. Smith was hoping to see the property on Saturday.

April 28, 2017

[98] Mr. Smith and his son inspected the property again. On this occasion both Mr. Vankoughnet and Mr. Rasmussen were present as well as their realtor, Mr. Van Bodegom.

[99] No offer was made in respect of the property. Moreover, at no stage was it suggested by Mr. Smith that he had already agreed to purchase the property. Neither was there any discussion that the property had been offered to him. Mr. Smith had made it absolutely clear that he was looking at the property and making a decision about making an offer.

[100] The property was not completely toured due to the time of day as daylight was disappearing. Mr. Smith wanted to view the property again the following day to enable him to decide whether he wanted to make an offer to purchase it.

[101] After the viewing of the property, there was a telephone discussion between Steve Smith and the Respondents, during which Mr. Rasmussen made it clear to Mr. Smith that if he (Mr. Smith) was interested in purchasing the property, Mr. Smith had to make an offer quickly.

[102] There was no discussion as to how much Mr. Smith was going to offer. However, Mr. Rasmussen asked Mr. Smith how he would be able to come up with money to purchase the property given the listing price. Mr. Smith advised that he would have to sell some properties to raise the funds to which Mr. Rasmussen replied: “I am not telling you how to do business, however, if you need to sell properties to raise the purchase price then you need to do that quickly”.

[103] There was also a discussion between the realtors, during which the Applicant’s realtor advised the Respondents’ realtor that the Applicant was going to offer to purchase the property at a purchase price between $2.3 million and $2.4 million, in cash, with a 60 day closing and a $150,000 deposit.

April 29, 2017

[104] Mr. Smith sent a text to Mr. Vankoughnet stating “Terry, I will not be coming to see you today. Jeremy is right. I have way too much to do if I am to try and put an offer together no matter what the deal is”. (Emphasis added).

[105] Mr. Vankoughnet responded stating “I am good for the tours and to provide knowledge after the sale but I am not the guy to be going back and forth with. Don’t want to offend you, but this is not my comfort area. Hopefully some things gets (sic) worked out, and then we both more than look forward to spending time with you. But please coordinate with our agent or Jeremy on anything else. He will loop me in”.

[106] The Respondents received a telephone call from Blake Taverner advising that he had been contacted by Mr. Smith who had asked him to meet for coffee to discuss the property. The Respondents were not happy with Mr. Smith’s approach. However, not wishing to put Mr. Taverner in an awkward situation, they agreed that he could show Mr. Smith the property again.

[107] On April 29, 2017, at 1:57 P.M. Mr. Smith’s realtor, Mr. Golko, sent a text to the Respondents’ realtor advising “I am preparing an offer but I am not a member of the local board so I don’t have the full brokers (sic) listing. Do you have a Schedule B?” On that same day, Mr. Golko also sent a text asking how much would be required “on the irrevocable” (meaning the time the Respondents required to respond to the offer). (Emphasis added).

[108] Further again on April 29, 2017, Mr. Golko advised the Respondents’ realtor “I look forward to making a deal tomorrow, yes! Chris (sic) do you have a fax # we can send the offer to?” (Emphasis added).

[109] Mr. Vankoughnet and Mr. Rasmussen categorically deny that they made any offer to Mr. Smith to sell him the property which was capable of being accepted by him. They further state that neither did they reach an agreement with him to do so.

Comparison between Smith’s offer and agreement with Zhou

[110] Both offers have a purchase price of 2.3 million dollars. However:

(a) Mr. Zhou’s offer is made personally by him;

(b) Mr. Zhou’s offer had an earlier closing date;

(c) Mr. Zhou’s deposit exceeds the deposit offered by Mr. Smith;

(d) Mr. Zhou’s deposit was to be placed with the Respondents’ realtor and Smith’s was to be place with his lawyer;

(e) Mr. Zhou’s offer contained a request for a vendor take back mortgage.

[111] Mr. Zhou’s offer was not ideal to Mr. Vankoughnet and Mr. Rasmussen in view of the vendor take back mortgage. However, the closing date, the larger deposit and the fact that he dealt with the Respondents in good faith, as opposed to Mr. Smith’s manner of dealings, lead Mr. Vankoughnet and Mr. Rasmussen to accept Mr. Zhou’s offer.

[112] In order to succeed with this application, Mr. Smith must establish the following that:

a) he had a binding contract with Mr. Vankoughnet and Mr. Rasmussen; and

b) as the alleged contract is oral, part performance has occurred; and,

c) the property is unique and that damages are not an adequate remedy.

[113] Mr. Vankoughnet and Mr. Rasmussen take the position that Mr. Smith fails on all three elements. Even if Mr. Smith can satisfy that there was a binding agreement, he fails on the second and third branches which failure is fatal to his Application.

Did an Oral Contract Exist Between the Parties?

[114] At the outset, there is an issue in respect to the identity/existence of the Applicant. Mr. Smith in the APS found at Exhibit E of Mr. Smith’s affidavit, identifies as the buyer “Steve Smith in trust for a company to be registered”. The Application is expressly brought by “Steve Smith in trust for an Ontario Numbered Corporation”. There is no evidence before the court that such a corporation exists. I find that Mr. Smith did not advise Mr. Vankoughnet and Mr. Rasmussen that he was acting as an agent for a corporation. However, both the agreement of purchase and sale or the offer that Mr. Smith made and this Application are based on the premise that he is or was acting as an agent for such an entity. I accept the evidence of Mr. Vankoughnet that he and Mr. Rasmussen could not accept an offer from the corporation which did not exist. I am persuaded that the “true Applicant”, for want of a better expression, does not exist. It is submitted that on this basis alone, the Application should fail.

Contract Formation

[115] Section 4 of the Statute of Frauds Act, R.S.O. 1990, provides;

Writing required to create certain estates or interests

4. No action shall be brought to charge any executor or administrator upon any special promise to answer damages out of the executor’s or administrator’s own estate, or to charge any person upon any special promise to answer for the debt, default of miscarriage of any other person, or to charge any person upon any contract or sale of lands, tenements or hereditaments, or any interest in or concerning them, unless the agreement upon which the action is brought, or some memorandum or note thereof is in writing and signed by the party to be charged therewith or some person thereunto lawfully authorized by the party.

[116] Based on all the materials filed in respect of this Application, there is no agreement, memorandum or note signed by Mr. Vankoughnet and Mr. Rasmussen in relation to the sale of the property to Mr. Smith. Indeed, Mr. Smith asserts that the written document supplied to them, namely the APS is Mr. Smith’s acceptance of an offer made by Mr. Vankoughnet.

[117] Mr. Smith bears the onus of establishing that an agreement existed between the parties. It is evident that there is no written agreement or memorandum signed by the Respondents in this case. I find The Statute of Frauds has not been satisfied.

[118] Further, in instances where there is a written agreement, or memorandum between the parties, that document must set forth all material terms of the contract. That general premise is equally applicable to an alleged oral agreement. For a contract to be formed between the parties, they must be ad idem on the essential terms.

[119] In McKenzie v. Walsh [^19], the Supreme Court of Canada held that in a contract for the sale of land, the essential terms of “the parties, the property and the price”

[120] The parties to the contract, in this case, is an essential term. The alleged acceptance of the offer made by Mr. Smith supposedly made by Mr. Vankoughnet is expressly made as being “in trust for a company to be registered”. There is no evidence from Mr. Smith that he was interested in the property on behalf of a non-existent, or yet to exist, corporation. If the written document supplied by Mr. Smith was an acceptance of an offer made by the Respondents, according to what is being advanced by Mr. Smith, the offer was accepted by a non-existent party and not by Mr. Smith personally. I find that at no time did Mr. Vankoughnet and Mr. Rasmussen agree to sell the property to a non-existent company and not Mr. Smith, personally.

[121] Further, Mr. Vankoughnet is a minority owner of the property. His evidence is that he had no agreement with and made no offer to Mr. Smith. I find this is supported by the text messages Mr. Smith and his realtor which referred to an “offer” being put together by Mr. Smith. Mr. Vankoughnet did not have the authority without the agreement of Mr. Rasmussen to accept, or make or agree to any offer to sell the property.

[122] Mr. Smith in his affidavit does say that he had any discussion with Mr. Rasmussen about the alleged offer made by Mr. Vankoughnet or his alleged acceptance of it. Indeed, at paragraph 21 of Mr. Smith’s affidavit he states that when he saw the property on April 28, 2017. Mr. Rasmussen was present.

[123] Mr. Smith states “I did not discuss any further specifics with them”. He does not say that there was any discussion about the alleged offer or his acceptance of that offer with Mr. Rasmussen. Mr. Smith in his affidavit says nothing about telling Mr. Rasmussen or Mr. Van Bodegom that he had already accepted Mr. Vankoughnet’s alleged offer. This would have seemed a logical and appropriate thing to do in time and place, especially, when he knew that Mr. Vankoughnet and Mr. Rasmussen both held an interest in this property.

[124] As for the agreement of purchase and sale submitted by Mr. Smith, I find that it is ambiguous. If it is put forward to evidence an agreement between the parties, as allegedly dictated by Mr. Vankoughnet and Mr. Rasmussen, it fails to do so. In support of my finding, I have considered the following:

(a) On page 1 of the document it provides “this offer shall be irrevocable by the buyer until 5:00 p.m. on the 30 day of April, 2017, after which time, if not accepted, this offer shall be null and void and the deposit shall be returned to the buyer in full without interest”’

(b) At schedule A of the document, it purports both to be an acceptance of an offer by the Respondents but also an offer for a reduced sale price and speedier closing date;

(c) The deposit is not distinguished between the alleged acceptance or offer;

(d) At schedule A of the document it provides “The buyer’s lawyer has received $100.00 as a deposit towards the formalization of this agreement, and the buyer agrees to deposit with his lawyer ….the sum of ….$49,000 within 48 hours of acceptance by the seller. The buyer agrees to further deposit…$110,000 with the same lawyer, within 45 days of acceptance”; (emphasis added). It will be borne in mind that the preceding language was not pre-printed on the document, but inserted by either the Applicant’s realtor or solicitor.

[125] I find the APS is clearly an offer. It was not accepted by Mr. Vankoughnet and Mr. Rasmussen.

[126] Further with respect to paragraph d) above:

(a) The use of the past tense “has” with respect to the deposit is not credible, given that the written document was presented on a Sunday, April 30, 2017;

(b) Further, Mr. Smith confirms that on May 1, 2017, he went to his lawyer to deliver funds in trust to be transferred to the lawyer for the Respondents;

(c) The suggestion by Mr. Smith in his affidavit that funds were to be transferred to the Respondents’ lawyer also makes no sense as Mr. Smith intended that further deposit monies would be held in trust by his own lawyer.

[127] In the case of an alleged oral agreement, there will have to exist satisfactory evidence from the party claiming the contract exists. I find the application materials do not address that a deposit let alone a staggered deposit was ever discussed.

[128] The court has found an alleged oral agreement in respect of the sale of land to be void for uncertainty in the face of insufficient evidence as to when the alleged agreement for sale was made, its terms of payment, or when the sale was to be completed.

[129] Unless the terms of the agreement are certain or ascertainable, no agreement will have been made between the parties. [^20] [^21]

[130] The absence of agreement on basic terms will preclude reliance on acts which might otherwise have sufficed as “part performance” if the agreement had been sufficiently certain. [^22]

[131] To determine whether the parties reached a meeting of the minds as to the essential terms of the contract, or consensus ad idem, the court applies an objective test. The court considers whether a reasonable person, apprised of all the circumstances would believe that the parties had reached an agreement. In the case at bar, Mr. Smith alleges that the terms set out in his APS constitute the terms of the agreement allegedly reached. It must follow that all of the terms in that document are considered by Mr. Smith to be essential. However, there is no tangible evidence of any agreement between Mr. Smith and Mr. Vankoughnet on those terms.

[132] I find there is no evidence of an offer or agreement by Mr. Vankoughnet or Mr. Rasmussen to Mr. Smith:

(a) To sell the property for $2.3 million with a closing date on October 30, 2017;

(b) To accept a deposit in the sum set out in the document;

(c) To accept an initial deposit of $100 upon acceptance of the alleged offer;

(d) To accept a staggered deposit;

(e) To have the deposit sit with the Applicant’s solicitor;

(f) To sell “all equipment, presently located on the property on the offer date” (emphasis added);

(g) For the Applicant to have until September 30, 2017 to complete its title search;

(h) To permit the Applicant the rights to visit the property 3 further times (for unspecified purposes).

[133] I find that Mr. Vankoughnet and Mr. Rasmussen deny that there was any offer made by them to Mr. Smith at all which was capable of acceptance. Their affidavits and in particular the affidavit of Mr. Vankoughnet are clear on that point. However, the affidavits in support of the Application are devoid of reference to any alleged discussions/offers/acceptance of anything more than the alleged sale price and closing date. I find that there was no oral contract which existed between the parties.

Was there an Agreement Between Mr. Smith and the Respondents?

[134] Further, for the above reasons, I find that there was no agreement between Mr. Smith and Mr. Vankoughnet and Mr. Rasmussen. When having discussions with Mr. Smith, Mr. Vankoughnet made it clear that he was not the sole owner of the property and that any offers would have to be considered by both him and Mr. Rasmussen. In fact, Mr. Vankoughnet is the minority owner of the property. The fact that Mr. Smith advanced an APS where both Respondents were named as sellers, as well as his dealings with both of them, evidences his knowledge that he needed to have an agreement with both of them.

[135] Further, the text messages which preceded the written APS prepared by Mr. Smith all refer to it as being an “offer”. The offer expressly provided on its face that “this offer shall be irrevocable by the buyer until 5:00 p.m. on the 30 day of April, 2017, after which time, if not accepted, this offer shall be null and void….” The offer was not accepted by Mr. Vankoughnet and Mr. Rasmussen.

[136] I find the written APS prepared by Mr. Smith is not and cannot be regarded as an acceptance of any alleged offer made by the Respondents. It is vague and uncertain in many respects. Mr. Smith’s position that it reflects exactly what the Respondents required when they accepted his offer is rejected. I find that the written APS is not an acceptance of an alleged oral offer. The written APS from Mr. Smith contains an offer for a reduced sale price, accelerated closing but no amendment for any other dates in the document.

[137] Mr. Smith submits that there are four apparent similarities between his agreement in this instance and the agreement in Erie Sand. However, his comparison falls short and overlooks the following:

(a) a comparison between the Applicant’s offer and the agreement Zhou;

(b) the terms of the alleged sale were not all agreed upon;

(c) there was no agreement at all in this case, however to expand upon that;

(i) there was no agreement or discussion about the closing date;

(ii) there was no agreement concerning the sale price;

(iii) there was no discussion or agreement concerning the Applicant’s lawyer holding the deposit;

(iv) there was no discussion or agreement about the staggered deposit;

(v) there was no discussion or agreement as to the amount of the deposit;

(vi) there was no discussion or agreement concerning “all equipment” situated on the property.

(d) The factum states “the “offer”, the acceptance of the Respondent (sic) offer was for the same price but difference (sic) closing date”. It is unclear what is meant in the preceding comment, however the offer contained two offers:

a) one for a sale of $2.3 million with a closing in 6 months; and

b) one for a sale at $2 million with a closing in 2 months.

[138] For these reasons, I conclude that there was no agreement between Mr. Smith and the Respondents.

Were There Sufficient Acts of Part Performance?

[139] This question is answered in the negative.

[140] Mr. Smith asserts that in anticipation of the completed agreement, he arranged to sell a very valuable property for a considerably lower amount than it was worth. There was no evidence to support this bald assertion. Further, in his subsequent affidavit, sworn June 29, 2017, Mr. Smith deposes that he would have to take a loss to sell properties to obtain money to purchase this property. He goes on to say that he was very clear with Mr. Vankoughnet about properties Mr. Smith was going to sell. Mr. Smith deposes that he gave Mr. Vankoughnet the exact locations and how long it would take Mr. Smith to sell those properties. Further, Mr. Smith deposes that he made it very clear to Mr. Vankoughnet that he would be incurring a substantial loss by selling those properties prior to the final zoning taking place. There is no evidence as to what properties were going to be sold by Mr. Smith and what properties would be sold at a substantial loss by him.

[141] I accept the evidence of Mr. Vankoughnet that Mr. Rasmussen made it clear to Mr. Smith that if he was interested in purchasing the property, he had to make an offer quickly. There was no discussion about the amount Mr. Smith was going to offer. If Mr. Smith needed to sell some properties to raise funds, Mr. Rasmussen replied “I am not telling you how to do business, however, if you need to sell properties to raise the purchase, then you need to do that quickly”. When Mr. Smith indicated that if he were to sell some property, quickly, he would probably have to take a loss, Mr. Rasmussen repeated “I’m not telling you how to do your business” and the conversation was left that Mr. Smith would contact the Respondents to set up a time to view the property if he was interested in making an offer.

[142] Mr. Smith alleges that there was an oral agreement with respect to the sale of the property and that part performance existed to avoid the operation of section 4 of the Statute of Frauds. It is clear that Mr. Smith bears the onus to prove part performance thereby avoiding the applicability of this statute. He is the party that seeks to enforce the oral agreement.

[143] I find that the proffering of the agreement of purchase and sale is nothing more than an offer to purchase land with a deposit and in this case it did not amount to part performance. As stated in Erie Sand, it happens every day and is not evidence of a pre-existing agreement in respect of land. In fact, it suggests the opposite – namely, that the offeror is hoping to be able to enter into an agreement to purchase the property.

[144] I find that is all that happened in our case. I cite the text from Mr. Smith on April 29, 2017 which states “Terry I will not be coming to see you today. Jeremy is right. I have way too much to do if I am to try and put an offer together no matter what the deal is”. See Exhibit C, Steve Smith’s affidavit sworn May 4, 2017.

[145] I further find that if Mr. Smith decided to sell properties to raise purchase monies, his doing so amounted to actions in preparation for performance but not acts of part performance.

[146] When viewed in the overall context of what was happening between the parties, I have found there was no oral agreement that existed between them and neither was there any agreement between Mr. Smith and the Respondents. Further, I find there were no sufficient acts of part performance to avoid the operation of section 4 of the Statute of Frauds.

Is the Property Unique? And are the Damages Inadequate?

[147] I have already considered these questions when considering whether the Certificate of Pending Litigation should be discharged and vacated.

[148] For reasons given, I have found that the disputed property is not unique to the extent that its substitute would not be readily available. Mr. Smith has not established that the disputed property has a quality that makes it especially suitable for the proposed use and that it cannot be reasonably duplicated elsewhere. As for damages, Mr. Smith has not established that damages would be inadequate. While he has put the question of damages in issue, he has at the same time asserted that damages are easily calculable. Yet he has been vague in respect of what damages he has incurred.

[149] I find that Mr. Smith not only has failed to establish the disputed property is unique but also has failed to establish that damages are an inadequate remedy.

Is it Unconscionable to Allow the Respondents to Sell the Property to Another Party?

[150] The answer to this question is no.

[151] Before Mr. Vankoughnet and Mr. Rasmussen met Mr. Smith, Mr. Zhou had already delivered an agreement of purchase and sale for $2.1 million which was increased to $2.3 million. Mr. Zhou was not a party to these proceeding. The only evidence for the court is a copy of the Zhou offer. The purchase price contained in the Zhou offer is $2.3 million. From the standpoint of purchase price, the Smith offer and the Zhou offer are the same. However, Mr. Vankoughnet and Mr. Rasmussen found the Zhou offer to be an offer that was more advantageous and as such, they accepted his offer as they were perfectly entitled to do.

[152] I find it was not unconscionable to respond to Mr. Smith that Mr. Vankoughnet and Mr. Rasmussen did now wish to entertain Mr. Smith’s offer per his APS and that, in turn, they agreed to accept the Zhou offer. They entered into a binding agreement to sell the property to Mr. Zhou. They did not enter into any agreement to sell the property to Mr. Smith.

[153] In summary, Mr. Smith has failed to show:

(a) that there was a binding agreement of purchase and sale between the parties;

(b) that there is part performance of any alleged oral agreement that has taken place;

(c) that there is any evidence that the property is unique;

(d) that there is any basis as to why damages would not be an adequate remedy; and,

(e) otherwise demonstrate that Mr. Smith has a reasonable claim for an interest in the property.

CONCLUSION

[154] For these reasons, it is ordered that the Certificate of Pending Litigation granted pursuant to the order of Justice McEwen on June 9, 2017 is hereby discharged and vacated. Further, Mr. Smith has failed to establish that he is entitled to the remedy of specific performance. Accordingly, his Application is dismissed.

[155] As for costs, the parties have agreed that costs will be determined by way of written submissions. Mr. Vankoughnet and Mr. Rasmussen shall serve and file with my judicial assistant their cost submissions within the next 10 days from the date of these reasons. Those cost submissions shall consist of a short and concise summary no longer than two pages, a costs outline, a draft bill of costs and supporting documentation and any relevant authorities. Within 10 days thereafter, Mr. Smith shall serve and file with my judicial assistant, the same documents.

[156] If any reply is required, counsel for Mr. Vankoughnet and Mr. Rasmussen shall serve and file reply materials within five days thereafter.

DiTOMASO J.

Released: July 12, 2017

[^1]: 572383 Ontario Inc. v. Dhunna, (1987), 24 C.P.C. (2d) 287 (Ont. Master), at pp. 290-291 [^2]: 931473 Ontario Ltd. v. Coldwell Banker Canada Inc., (1991) O.J. No. 1150, 5 C.P.C. (3d) 238 (Ont. Gen. Div.) [^3]: Pete and Marty’s (Front) Ltd. v. Market Block Toronto Properties Ltd. (1985), 5 C.R.C. (2d) 97, 37 R.P.R. 157 (Ont. H.C.) [^4]: Queen’s Court Developments Ltd. v. Duquette, [1989] 36 C.P.C. (2d) 297 at para. 23 [^5]: Chiu v. Pacific Mall Developments Inc., 1998 CarswellOnt 3035, at para. 40 [^6]: Elliott v. Grand Shores Realty Development Corp., at para. 22 [^7]: Erie Sand and Gravel Limited v. Tri-B Acres Inc., 2009 ONCA 709 at para. 64 [^8]: Taylor v. Rawana, 1990 CarswellOnt 554 at para. 23 [^9]: Erie Sand and Gravel, supra at para. 97 [^10]: Semelhago v. Paramadevan, [1996] 2 S.C.R. 415 (S.C.C.) at para. 22 [^11]: Asamera Oil Corp. v. Sea Oil & General Corp., [1979] 1 S.C.R. 633 (S.C.C.) at para. 68 [^12]: Erie Sand, supra, at para. 118 [^13]: 1244034 Alberta Ltd. v. Walton International Group Inc., 2007 ABCA 372, 63 R.P.R. (4th) 8 (Alta. C.A.) [^14]: Erie Sand, supra at para. 118 [^15]: Erie Sand, supra at para. 118 [^16]: 904060 Ontario Ltd. v. 5295666 Ontario Ltd., 1999 CarswellOnt 378 (Ont. Gen. Div.) at para. 14 [^17]: Silverberg v. 1054384 Ontario Ltd., 2009 ONCA 698, 84 R.P.R. (4th) 185 (Ont. C.A.) at para. 19 [^18]: Canamed (Stamford) Ltd. v. Masterwood Doors Ltd., (2006), 41 R.P.R. (4th) 90 (Ont. S.C.J.) at para. 104 [^19]: McKenzie v. Walsh, 1920 CarswellNS 53, [1921] W.W.R. 1017 [^20]: Sotiropoulou v. Beaudin, 2014 CarswellOnt 2434, 2014 ONCA 168, 237 A.C.W.S. (3d) 1064 [^21]: Szwec v. Karfilis, 1997 CarswellOnt 2083, [1997] O.J. No 2685, 72 A.C.W.S. (3d) 775 [^22]: Deacon v. Adams, 1982 Carswell NS 418, 114 A.P.R. 218, 55 N.S.R. (2d) 218