Court File and Parties
COURT FILE NO.: CV-16-552915 & CV-16-552915-A1 DATE: 2020-05-01 ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Mandeep Dhatt and Kulwinder Dhatt Plaintiffs – and – Derek Beer and Indira Beer Defendants – and – Jay Brijpaul and Re/Max West Realty Inc., Brokerage Third Parties
COUNSEL: A. Herschorn and S. Nassabi, for the Plaintiffs D. Beer and I. Beer, self-represented Defendants, not in attendance at trial S. Rosenberg, for the Third Parties
HEARD: March 2-6, 2020
BEFORE: C. J. BROWN J.
REASONS FOR DECISION
[1] This action arises from the sale of residential property by the defendants to the plaintiffs, which transaction did not close on the agreed upon date or thereafter. The plaintiffs bring their action for a declaration that the sale of the subject property, 9 Valley Ridge Crescent, Brampton, Ontario was valid and binding, and for specific performance or, in the alternative, damages.
[2] The defendants, in their Statement of Defence, deny that the agreement was valid and binding, on the ground that the Agreement of Purchase and Sale (“APS”) was fatally flawed in that the purchase documents were only in the name of the wife, Indira Beer, and should have been in the names of both husband and wife.
[3] The defendants further brought a third-party action against their real estate broker, Jay Brijpaul, and their real estate brokerage, Re/Max West Realty Inc., for collusion with the plaintiff. Despite numerous Court Orders requiring them to do so, the defendants never filed their third-party trial record with the Court prior to trial.
[4] This action has had a long history prior to reaching trial, with adjournments sought by the defendants, who for much of the recent past have not been represented by a lawyer, after their lawyer removed himself from the record.
[5] At the commencement of the trial, the defendants, Derek Beer and Indira Beer, had retained counsel solely for the limited purpose of seeking an adjournment. That counsel was not retained to represent them at the trial itself. I did not grant the adjournment for the reasons given in my Endorsement of March 2, 2020.
[6] On Tuesday, March 3, the trial commenced. At the commencement of trial, Mrs. Beer indicated that she sought an adjournment because she had a lengthy medical appointment, a stress test, on March 4. She further indicated that if necessary she would have it rescheduled. I indicated to her that she could attend her medical appointment in the morning, as scheduled and her husband could attend the trial on behalf of both of them. She could join the trial in the afternoon. Alternatively, she could reschedule her appointment. She chose to attend her appointment. She indicated that she would attend the appointment on Wednesday and attend Court on Thursday. Her husband would attend for them both on Wednesday.
[7] The trial commenced. While the plaintiff was giving opening submissions, Mrs. Beer began to hyperventilate. She was invited to go to the back of the courtroom, to relax and to take a glass of water. She subsequently began to moan and wail loudly and was taken into the hall to calm down. While in the hallway, she apparently requested an ambulance and demanded of her husband that he attend at hospital with her. Neither party returned that day. Mr. Beer was contacted and told that he was to attend at Court for the trial the following day, March 4, and that the trial would proceed with or without him. He indicated that he would be in Court. My decision as regards the incident of March 3 is found in my written Endorsement of that date.
[8] On March 4, the trial office received the Admission and Discharge notes and records from the hospital, but no doctors’ report indicating the defendants’ diagnoses, prognoses or that the defendants, or either of them, were unable to attend their trial due to medical reasons and the reasons therefor. The defendants were advised that the trial would proceed with or without them on the following day.
[9] On March 5, Mrs. Beer attended at trial, again seeking an adjournment. She stated that she did not want her husband to attend at trial, as she did not trust him with the house, and stated that she could not stay. I denied the request for an adjournment for reasons given in my oral Endorsement, and indicated that the trial would proceed with or without the defendants.
[10] The defendant, Mrs. Beer left the Court and the defendants failed to attend the trial further. The trial proceeded without them.
The Action
[11] The action involves a property, municipally known as 9 Valley Ridge Crescent, Brampton, Ontario, listed for sale by the defendants. It is the position of the plaintiffs that they entered into an APS with the Beers, that just prior to closing, Mrs. Beer had “buyer’s remorse”, and would not close. She felt that they should have gotten a higher price, and refused to close. The defendants also sued the real estate agent and broker, and claimed that the real estate agent and buyer had colluded.
[12] It is the position of the buyers, Mandeep and Kulwinder Dhatt that the parties agreed on the purchase price, that there is no issue of collusion on the parts of the buyer or real estate agent and the only issue is whether specific performance should be granted.
[13] The APS dated January 22, 2016 and signed by the plaintiffs that day was signed by Mrs. Beer on January 25, 2016, with Mr. Beer signing on the spousal consent line also on January 25. The agreed-upon purchase price was $835,000 with a deposit of $10,000, and the closing was stipulated to be May 31, 2016. The financing conditions were fulfilled on February 1, 2016, making the APS a complete and binding agreement as at that date.
[14] The plaintiffs had sold their home in reliance on the closing of the transaction, and had to move, and live in rental accommodation until they could purchase another house. Given the situation, and the fact that the issues were not resolved quickly, they were forced to enter into an APS on July 11, 2016 for the purchase of another house located at 82 Sleightholme Crescent, Brampton. They had to pay $961,585 for what was considered a comparable property. However, this property did not have the specific features that they were looking for and had found in 9 Valley Ridge Crescent.
[15] The plaintiffs continue to seek specific performance of 9 Valley Ridge Crescent. They registered a caution on 9 Valley Ridge Crescent dated May 16, which expired. No other caution, certificate of pending litigation (“CPL”) or notice was registered on title, as it became clear that the Beers had no intention of selling their home to anyone.
The Evidence
The Plaintiffs’ Case
Witnesses
Mandeep Dhatt
[16] Mandeep Dhatt, age 42, has been a licensed real estate agent for 10 years in the Brampton area. He is married to Kulwinder Dhatt and they have two children.
[17] They were in the market for a new home, as the family was growing and they wanted four bedrooms. He explained that his parents also live with them, and they wanted a second master bedroom with en-suite bath for the parents. There was also an office on the main floor of 9 Valley Ridge Crescent, which he intended to have converted to another bedroom for his grandparents, so that they did not have to walk upstairs.
[18] The subject property, at 9 Valley Ridge Crescent, was unique in that it had the two master bedrooms with en-suite baths, the other bedrooms and the office downstairs which could be converted to another bedroom for his extended family. It also had a three-car garage, which they need as they have three cars (his, his wife’s and a car for his parents, which they use to drive the children to and from school). The house was 4300 sq., which would accommodate the extended family and was in a unique location, which he described as residential, with big lot houses, no high-rises, no townhouses, less traffic and very peaceful. There were also two schools nearby, so his parents did not have to drive far to take the children to school and pick them up.
[19] They entered into an APS with the defendants on January 25, 2016, with the closing date of May 31, 2016. The purchase price was $835,000 with a $10,000 deposit, which is still in account with the real estate brokerage.
[20] Mr. Dhatt confirmed that they are still seeking specific performance. They are interested in and ready to purchase 9 Valley Ridge Crescent.
[21] Approximately one month prior to closing, Mrs. Beer called him and requested to see him on the property. He went after work. Mrs. Beer said she was not able to close. She had not been able to find another property. Mr. Dhatt advised her that he would agree to an extension so that she could locate another home. She then began to state that they should not buy the house, that the property was not suitable for them, that they would not be happy there, would get sick, would fight and that they should stay away.
[22] They had already sold their home on Bordeaux Crescent, which was closing June 30, 2016.
[23] The plaintiffs’ real estate agent, Mr. Weisleder tendered on the Beers. However, the transaction did not close.
[24] The Dhatts were required to rent property. They located temporary rental accommodation, with four bedrooms, for $2500 a month, and remained there for two months until they were able to locate another home. They transferred their property to the rental accommodation by U-Haul.
[25] They started looking for accommodation to purchase right after Bordeaux Crescent closed. Prices were going up and there were bidding wars and multiple offers on each property. He had a budget of $840,000-$850,000. He was finally successful in locating 82 Sleightholme Crescent and entered into an APS on August 12, 2016, with a purchase price of $961,585, with a deposit of $20,000. They had to compromise with the Sleightholme property. There were four bedrooms, but not two master bedrooms with en-suite baths. There was only a two-car garage and the property was only 3000 sq. ft. and not 4300 sq.ft. like 9 Valley Ridge Crescent.
[26] Mr. Dhatt testified that both properties have now gone up in value, Sleightholme to approximately $1.1 million and Valley Ridge to approximately $1.5 million, due to its larger square footage and unique features including the property and the quiet, large lot residential area.
Raghbar Chauhan
[27] Raghbar Chauhan was called as an expert witness in property valuation. Mr. Chauhan is 40 years of age. He has resided in Brampton since 2005. He has a Masters of Science Degree from Guru Nanak Dev University in India.
[28] He has been a registered real estate broker for two and half years and prior to that was a real estate agent for four years with Century 21 President Realty Brokerage Inc. He has dealt with residential properties for over 6½ years, mainly in Peel, but also in the London and Brantford areas on request. He had met the plaintiff, Mr. Dhatt, through work.
[29] He authored reports with respect to 9 Valley Ridge Crescent and 82 Sleightholme regarding market evaluations of the properties, which have been made exhibits in this action. He explained that his evaluations were based on conservative estimates of the properties’ values and, inter alia, on comparables. His conservative estimate of the fair market value for 9 Valley Ridge Crescent as at August 2, 2019 was an estimated conservative selling price of $1,430,000. For 82 Sleightholme, the estimated conservative selling price was $1,035,000. He testified that the values today would have increased by proximally 5% such that 9 Valley Ridge would have a selling price of approximately $1,501,500 and 82 Sleightholme would have an estimated selling price of $1,086,750.
Read-ins
[30] Mr. Beer had testified in his Examination for Discovery that when they listed 9 Valley Ridge Crescent for sale, they wanted to sell it to clear up debts and to find something reasonable. He testified that he left most of the decisions to his wife and she made the decisions regarding sale of the property to the Dhatts. He stated that they were agreeable to selling the property for $835,000. However, his wife was unable to find a replacement property. It was her idea not to close on the deal because the price was too low.
[31] Mrs. Beer testified in Examination for Discovery that they were looking for a home with four bedrooms, but with a smaller square footage than 9 Valley Ridge Crescent and in the range of $600,000 to $700,000 so that they could pay off their debts and have some money to buy another house. She stated that all decisions with respect to sale of the property were made together. She stated that she began to think that the plaintiffs were extremely eager to purchase the property and thought they saw it as a “steal of a deal”. She testified that she understood that by signing the listing agreement she was authorizing Re/Max to list the property for sale and also testified that she understood that by signing the APS, she was entering into an agreement with the Dhatts to sell her home for $835,000 and that it was a binding agreement.
[32] The evidence indicated that the defendants had transferred 9 Valley Ridge Crescent from both of their names into Mrs. Beer’s name alone on October 7, 2013, due to the fact that Mr. Beer was facing a lawsuit as a result of a failed business venture. An action for fraudulent conveyance was brought and Trimble J. found on July 14, 2014 that the conveyance was fraudulent and declared it void. He ordered the transfer and conveyance reversed and the title restored to the names of both Mr. and Mrs. Beer. He further ordered that his decision be placed on the Register. Due to an error on the part of the Registrar, the title was never transferred back into both names. At the time the parties entered into the APS, the property was still registered in Mrs. Beer’s name only.
Credibility
[33] I am satisfied that Mr. Dhatt was a credible witness. He was candid, straightforward and complete in his testimony. There was no reason to doubt his credibility.
[34] I am further satisfied with the credibility of the expert witness, Mr. Chauhan. He is well qualified to give the evaluations he did, and his evaluations were conservative and well documented.
The Law and Analysis
[35] I am satisfied, based on all of the evidence adduced and the testimony given; that the Agreement of Purchase and Sale entered into between the plaintiffs and defendants on January 25, 2016 was valid and binding. Mrs. Beer in her in Examination, which was read into the record, testified that she understood when she signed the Agreement of Purchase and Sale that it was a valid and binding agreement. Both she and her husband signed the Agreement of Purchase and Sale, she as seller and Mr. Beer as spouse giving consent. There was nothing which would have invalidated the Agreement. It remained and remains to this day valid and binding. The Beers’ defence has no merit.
[36] As regards the remedies, the plaintiffs have argued two alternative remedies, namely specific performance and, in the alternative, damages.
Specific Performance
[37] The applicable legal principles, as set forth in UBS Securities Canada Inc v. Sands Brothers Canada Limited (2009), 2009 ONCA 328, 95 O.R. (3d) 93 at para. 96 are as follows.
When fashioning a remedy for a breach of contract, the object is to place the injured party in the position that he or she would have been had the contract been performed. Typically, damages are ordered. However, where damages are inadequate to compensate an injured party for its losses, specific performance may be ordered. Accordingly, specific performance may be ordered where the subject matter of a bargain is unique or irreplaceable because, in those circumstances, damages may be inadequate.
[38] Specific performance is an equitable remedy. It is awarded where the property in question is unique to the buyer, in that it has a quality that cannot be readily duplicated elsewhere. The time to determine whether a property is unique is the date on which the breach takes place, in this case on May 31, 2016, the date the defendants refused to close the transaction: See Yan v. Nadarajah, 2015 ONSC 7614, para. 49; 2017 ONCA 196.
[39] In the present case, Mr. Dhatt explained the unique qualities of the property, which are found at paragraphs 17 and 18, above. The Dhatts live in a four-generation extended family, with his nuclear family, his parents and his grandparents. The property had four bedrooms, including two master bedrooms, each with its own en-suite bath, which would be used for himself and his wife, with the second master bedroom used for his parents who live with them. There was also an office on the first floor, which could be converted to a bedroom for his grandparents, so that they would not have to climb the stairs to the second floor. It also had a three-car garage, for their three cars. It was in a unique area of residential properties, all large lot, no high-rises, no townhouses and no condominiums, so that it was a quiet property. Further, it was near two schools, such that his parents, who drive the children to school, did not have to drive far.
[40] I am satisfied, given all of the evidence, that this was a residential property that the plaintiffs attached particular significance to, given all of the features and qualities that are above-indicated that made it especially suitable for the proposed use by the Dhatt extended family of four generations. In my view, this evidence, and all of the features of the property described, combined, meet the test of uniqueness contemplated by Semelhago v. Paramadevan, [1996] 2 SCR 415; see also Yan, supra; Trepiano v. Stonevalley Estates Inc..
Would Damages Be an Adequate Remedy?
[41] While the plaintiffs argue that specific performance is appropriate, given the uniqueness of the property to them and the fact that it satisfies all of their needs and specifications, it is further the position of the plaintiffs that, in the circumstances of this case, damages would be an inadequate remedy.
[42] Damages in lieu of specific performance are assessed as at the date of trial: Semelhago, supra; Sivasubramaniam v. Mohammad, 2018 ONSC 3073.
[43] If the defendant is unable to pay the damages award, then however accurate the assessment of the plaintiffs’ losses may have been, the remedy of damages can hardly be described as adequate: Injunctions and Specific Performance, R. J. Sharpe J., Loose Leaf Edition, Canada Law Book, November 2015, ss. 7.260; UBS Securities Canada Inc v. Sands Brothers Canada Limited (2009), 2009 ONCA 328, 95 O.R. (3d) 93 at para. 103; Mylonas Enterprises Limited v. Foundation Place Inc., 2013 ABQB 385, paras. 44, 45, 49.
[44] In the present case, there is sufficient evidence to conclude that the Beers do not have sufficient funds to pay a damages award. The evidence indicates that the defendants were selling 9 Valley Ridge Crescent in order to pay off debts. Mrs. Beer indicated that she cannot work. Her husband’s salary is being garnished. The Read-ins from the Beers’ Examinations for Discovery, which were conducted when they still had a lawyer, indicated that they wanted to sell the property to clear off debts. There are numerous writs and executions filed against them pursuant to the evidence of Mr. Rogers regarding the stay of proceedings application. Mrs. Beer indicated that they could not afford a lawyer.
[45] In this case, the plaintiffs have calculated the damages award to be $505,335, being the difference between the fair market value today of 9 Valley Ridge and 82 Sleightholme. In addition, damages would also include the two months rent they paid in the amount of $5000 plus rental of a U-Haul used to transport their possessions during their move in the amount of $66.97, for a total of $510,401.97. Documentation for these two additional expenses was also adduced in evidence. I have accepted this calculation of damages.
[46] Based on the foregoing, and the caselaw regarding inadequacy of remedies, I find that damages would not be an adequate remedy. Awarding damages would leave the plaintiffs with a meaningless remedy. They would be forced to pursue the defendants for damages and, based on the evidence, would be very unlikely to be successful in collecting on or recovering the damages awarded.
[47] In conclusion, because I have found the property to be unique in any event and in the alternative, I have found that damages would be an inadequate remedy; I award specific performance to the plaintiffs.
[48] I declare that the Agreement of Purchase and Sale between the plaintiffs and the defendants, executed January 25, 2016 is valid and binding. I award the plaintiffs specific performance of the Agreement. While in the normal course, I would give the defendants 30 to 45 days to vacate the premises, due to the COVID-19 pandemic, the defendants will be given 120 days from the date of this decision within which to vacate the premises, municipally known as 9 Valley Ridge Crescent, Brampton Ontario.
[49] In the event that there are any issues arising from this judgment, the parties may return before me.
The Third-Party Claim
[50] The Beers claimed over against their real estate agent and real estate brokerage on the ground that the real estate agent, Jay Birjpaul, and plaintiffs colluded as regards the sale of 9 Valley Ridge Crescent to the plaintiffs. The Beers failed to attend their trial and thus there was no evidence adduced as regards the third-party claim.
[51] The defendants to the third-party claim attended at the first day of trial, fully prepared to defend the third-party action against them. There was, of course, nothing to defend, as the defendants did not attend the trial.
[52] I note that Mr. Dhatt, in his testimony in chief, stated that he had not had any previous dealings with the Beers’ real estate agent. There was no evidence of any collusion or any other nefarious dealing that would give any merit to said claim advanced by the Beers in their third-party claim.
[53] Pursuant to Rule 52.01(2)(c) and (d) of the Rules of Civil Procedure, where the defendant attends the trial and the plaintiff fails to attend, the trial judge may dismiss the action and may make such other order as is just.
The Beers were ordered to attend and were told that if they did not attend Court on the scheduled day, the trial would proceed with or without them. They failed to attend, although the defendants attended to defend the Beers’ action against them. In these circumstances, I dismiss the third-party action brought against Jay Brijpaul and Re/Max West Realty Inc., Brokerage, CV-16-552915-A1.
Costs
[54] Based on all of the evidence, I find that the defendants persisted in defending this lawsuit, despite the fact that there was no merit to their defence or third-party claim. It would appear from the history of this case and all of the evidence, that they simply attempted to delay or prolong the inevitable as long as possible, to the point of failing to attend the trial, although ordered to do so.
[55] The plaintiffs and third-parties were required to fully prepare for trial, obtaining the evidence, conducting examinations for discovery, preparing for and attending pre-trial motions, obtaining witnesses, including an expert witness for the plaintiffs’ case, attending pre-trial conferences and case conferences and preparing for, attending and conducting the trial.
[56] In a case such as this, where the defendants refused to close the transaction, and thereafter failed to appear at trial, despite being given several indulgences, these failures all without justification and all, in my view, egregious, the plaintiffs are entitled to their costs on a substantial indemnity scale. Further, the third-party defendants are also entitled to their costs on the same substantial indemnity scale.
[57] Each party has provided their Bill of Costs. I have reviewed them and find them reasonable. The plaintiffs are entitled to their costs on a substantial indemnity basis in the amount of $112,347.63 and the third-party defendants are entitled to their costs of the action on a substantial indemnity bases in the amount of $88,178.52. All costs awarded are inclusive of disbursements and HST.
Given all of the circumstances, and the lack of funds on the part of the defendants, all costs awarded are to be paid from the purchase price. I make this Order pursuant to Rule 52.01(2)(d) of the Rules of Civil Procedure.
Dispensing with approval of the order to be issued and entered
[58] I dispense with the requirement to have the defendants approve the Order to be issued and entered in this matter.
[59] Notwithstanding Rule 59.05, this Order is effective from the date it is made, and is enforceable without any need for entry or filing in accordance with Rules 77.07(6) and 1.04. No formal Order need be entered and filed unless an appeal or a motion for leave to appeal is brought to an appellate court. Any party to this Order may nonetheless submit a formal Order for original signing, entry and filing when the Court returns to regular operations.
Released: 2020-05-01
