Court File and Parties
COURT FILE NO.: CV-21-00000131-0000 DATE: 20220421 SUPERIOR COURT OF JUSTICE – ONTARIO
RE: Kandlproperties Inc., Plaintiff AND Big Bang Consulting Inc., Defendant
BEFORE: Justice Spencer Nicholson
COUNSEL: A. Gabriele for the Plaintiff C. Hubley for the Defendant
HEARD: January 7, 2022
REASONS ON MOTION FOR SUMMARY JUDGMENT
1The parties have agreed that this is an appropriate case to be resolved by way of motion for summary judgment in accordance with Rule 20.04(2)(b) of the Rules of Civil Procedure.
Facts
2On September 11, 2020, 1982559 Ontario Inc. and the Defendant, Big Bang Consulting Inc. (hereinafter “Big Bang”), entered into an agreement of purchase and sale (the “Agreement”) in respect of a multi-unit residential property located at 1272 Grammercy Park Place in London, Ontario (the “Property”). The agreed upon purchase price was $715,000.00.
3The closing date was agreed upon as December 1, 2020. 1982559 Ontario Inc. was permitted to assign its rights under the Agreement to any person or corporation and it could advance or extend the closing date by 30 calendar days by providing Big Bang with two weeks’ notice. The extension could only be made once.
4The Agreement provided as follows with respect to notice:
- Any notice relating hereto or provided for herein shall be in writing. In addition to any provision contained herein and in any Schedule hereto this offer, any counter-offer, notice of acceptance thereof or any notice to be given or received pursuant to this Agreement or any Schedule hereto (any of them, “Document”) shall be deemed given and received when delivered personally or hand delivered to the Address of Service provided in the Acknowledgment below, or where a facsimile number or email address is provided herein, when transmitted electronically to that facsimile number or email address, respectively, in which case the signature(s) of the party (parties) shall be deemed to be original.
5The Plaintiff, Kandlproperties Inc. (“Kandlproperties”) acquired 1982559 Ontario Inc.’s rights under the Agreement by assignment dated September 11, 2020, the same day as the Agreement was entered into. Under the assignment, Kandlproperties agreed to pay $755,000.00, with $40,000.00 being paid to 1982559 Ontario Inc.
6Kandlproperties wished to extend the closing date. Accordingly, on October 20, 2020, Irfan Khan, who was a principal of 1982559 Ontario Inc., sent a text message to Bang Hoa Ha, an officer and director of Big Bang. It stated as follows:
“hi Bang, just spoke to my partner Lee and confirmed that we will be requesting a 1-month extension (as agreed in our contract). We will also be ordering a phase 1 environment assessment for the mortgage. 100% committed and full plans to go with this transaction. Our lawyer will reach out to your lawyer directly.”
7In response, Bang Hoa Ha replied “OK Np”. A screenshot of the exchange of texts is in evidence. It is not seriously contested that “Np” means “no problem”.
8Kandlproperties’ principal, Zhiliang Xing (“Lee”), instructed their counsel (not the counsel appearing on this motion) on October 20, 2020 to notify Big Bang that the closing date would be extended to the “end of December” in accordance with the Agreement. An email dated October 20, 2020 from Lee to Kandlproperties’ counsel providing those instructions is appended to the motion material as an exhibit. That email indicates that the “seller” had already been informed and agreed. Counsel confirmed receipt of those instructions.
9Counsel, as instructed, prepared a letter to extend the closing but through inadvertence, the letter was never delivered. The letter, dated October 27, 2020, is also an exhibit. The letter is addressed to counsel for Big Bang and refers to an extended closing date of December 29, 2020. The letter asks for confirmation of its receipt.
10Notwithstanding the exchange of texts, the solicitor for Big Bang (not counsel on this motion) contacted the solicitor for 1982559 Ontario Inc. on November 26, 2020 and again on November 30, 2020 and advised that the transaction was scheduled to close on December 1, 2020 and that he had not yet received the necessary closing documents from the purchaser. Big Bang’s solicitor warned that if the documents were not provided immediately, the vendor would treat the lack of communication as repudiation of the Agreement. Two emails are appended evidencing these communications.
11The solicitor for Big Bang again reached out to the solicitor for 1982559 Ontario Inc. on December 1, 2020 inquiring as to whether the matter was going to close that day. It was on that occasion that the solicitor learned that the Agreement had been assigned to Kandlproperties and that Big Bang should have received a letter from new counsel seeking to extend the date for closing. It was subsequently determined that the October 27, 2020 letter had not actually gone out and a copy was provided to Big Bang’s solicitor.
12There is no dispute that if the closing date was not extended, the buyer was not in position to close on December 1, 2020. An email from Kandlproperties dated December 1, 2020 confirms that it was not in position to close on that date.
13On December 2, 2020, there were a series of emails between Irfan Khan and Bang Hoa Ho, the last one copied to Lee. The emails depict Irfan Khan trying to proceed with the deal, with the December 29, 2020 closing date and Bang Hoa Ho advising that his lawyer advised that the buyer was in breach. The last email reads as follows:
I’m not here to argue semantic—only that my lawyer said it’s in breach. I mean he called and emailed your lawyer a few times with no reply. He also said sms is not proper notification and that extension letter have no email address or fax# and looked like something your lawyer draft up last minute. Your lawyer also ask him for account on Dec 1 to deposit so seems like if it’s not in breach, why would your lawyer ask to deposit now?
Anyway, with all the issues going on, I don’t really want to close the deal. Main reason is my personal crisis. I don’t want to sell and have cash value on hand (if u know what I mean). So what does it take to leave the contract amicably? Maybe I can give you some incentive and u can make a few quick easy $. I mean if u want to back out, I would have been happy with the 5k deposit. Can we do something like that? What penalty will make u happy so we both can put this behind us?
14On December 29, 2020, Big Bang refused to complete the transaction.
15Kandlproperties commenced this action and obtained a certificate of pending litigation in respect of the Property on February 28, 2021.
16Kandlproperties has adduced evidence that Big Bang has attempted to re-sell the Property through a “wholesale” property vendor for $820,000.00 plus a $25,000.00 fee. An advertisement was found on January 28, 2021 listing the property through Waypoint Properties. The proposed closing date was March 1, 2021.
17Kandlproperties asserts that as of the closing date, the Property was worth at least $840,000.00. As of the date of its material, October 4, 2021, it asserted that the Property was worth $900,000.00. Additionally, it incurred $15,920.00 in lender fees to reimburse the lender for their legal costs, broker fees and interest accrued from the closing date.
18Finally, Kandlproperties asserts that there is good reason to believe that Big Bang does not have sufficient assets to satisfy a judgment for damages. Accordingly, Kandlproperties seeks specific performance rather than damages.
Positions of the Parties
19As noted, both parties believe that the record is sufficient for this dispute to be determined via summary judgment motion.
20Kandlproperties argues that the text message validly extended the closing date and that when Big Bang failed to close on December 29, 2020, it breached the Agreement of Purchase and Sale.
21Big Bang takes the position that the Agreement was not validly extended and that by failing to close on December 1, 2020, it is Kandlproperties who breached the Agreement. Even if the text messages did extend the closing date, the parties did not set a new closing date and thus, there was no valid Agreement. Big Bang takes the position that it is entitled to retain ownership of the Property.
22In the event that I find Big Bang breached the Agreement of purchase and sale, Kandlproperties takes the position that it is entitled to a declaration of ownership in respect of the Property, given that Big Bang does not have assets available to pay a judgment and because the Property is unique. It advances the following argument in support of the Property being unique:
(a) It is an investment property, which will provide Kandlproperties with a good rate of return; and
(b) It cannot be replaced for the same price.
23Kandlproperties has retained Suzanne DeJong of Metrix Southwest Inc. to appraise the Property. It is her opinion that the Property had a value of $840,000.00 as of December 29, 2020. She is further of the opinion that as of August 23, 2021, the value of the property was $900,000.00. She does not believe that a similar property could be purchased for the sum of $755,000 as of August 23, 2021.
24Big Bang argues that the property is not unique and Kandlproperties’ remedy is in damages. Big Bang retained an appraiser, Andy Levers, who provided a report dated December 16, 2021 in which he opines that the Property had a value of $700,000 as of December 29, 2020.
Analysis
Rule 20.04(2)
25Rule 20.04(2) of the Rules of Civil Procedure, provides as follows:
(2) The court shall grant summary judgment if,
(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or
(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.
26The seminal case of Hryniak v. Mauldin, 2014 SCC 7, 366 D.L.R. (4th) 641, 46 C.P.C. (7th) 217 (S.C.C.) sets out the test under Rule 20.04(2)(a), where the parties do not agree whether it is appropriate to grant summary judgment. Hryniak enunciates the test to determine whether there is a genuine issue for trial.
27Subrule 20.04(2)(b) addresses the situation where the parties agree to have all or part of the claim determined by a summary judgment. The test is not whether there is a genuine issue for trial, but simply whether the court is satisfied that it is appropriate to grant summary judgment. I am of the view that the court must be satisfied that it is able to reach a fair and just determination on the merits, to borrow from the language of Hyrniak.
28In this particular case, I agree that the narrow issues in this case can be dealt with on the evidence provided in this motion. Determining this matter in this fashion is expeditious and cost effective for both parties. Accordingly, I am satisfied that it is appropriate to grant summary judgment.
Notice in Writing
29As noted above, Schedule A to the Agreement provided as follows:
“Seller agrees that buyer is allowed to advance or extend closing date by a maximum 30 calendar days once by providing the seller with a 2 week’s notice.”
30I set out again the provision of the Agreement dealing with notices, as follows:
Any notice relating hereto or provided for herein shall be in writing. In addition to any provision contained herein and in any Schedule hereto this offer, any counter-offer, notice of acceptance thereof or any notice to be given or received pursuant to this Agreement or any Schedule hereto (any of them, “Document”) shall be deemed given and received when delivered personally or hand delivered to the Address of Service provided in the Acknowledgment below, or where a facsimile number or email address is provided herein, when transmitted electronically to that facsimile number or email address, respectively, in which case the signature(s) of the party (parties) shall be deemed to be original.
31I note that there were no fax numbers or email addresses provided in the Agreement, although there were spaces for that information located directly under the notice provision. The Acknowledgement at the end of the Agreement does contain addresses and email addresses for each of the solicitors for Big Bang and 1982559 Ontario Inc.
32Kandlproperties relies upon the decision of F.L. Myers J., in Chairman’s Brands Corp. v Assn. of Danube-Swabians, 2014 ONSC 6722. That case involved the identical notice provision. Myers J. interpreted that provision not as mandating that notice be provided by personal or hand delivery, or by fax or email, but instead as permitting other modes of communication. He stated as follows at para. 18,
Furthermore, even if article 13 required notice to be given in non-electric form, sections 4 through 7 of the Electronic Commerce Act, 2000, S.O. 2000, c. 17, authorize email communication in these circumstances. Moreover, in Lanca Contracting Ltd. v. Brant (County) Board of Education (1986), 54 O.R. (2d) 414, 1986 CarswellOnt 1030 (Ont. C.A.), the majority of the Court of Appeal held:
It has been held that even if written notification was required by the language of the contract documents, communication by any other method no less advantageous to the offeror would be sufficient. This seems to be an eminently reasonable approach to the notice requirement that is fair to both the offeror and offeree.
33In L’Ouvrier Inc. v. Leung, 2016 ONSC 6993, Lederer J., in the context of the renewal of a lease, accepted that an SMS message, or text-messaging, is a form of written communication. It is in written form, it simply does not arrive on paper. This decision was upheld by the Court of Appeal (L’Ouvrier Inc. v. Leung, 2017 ONCA 589).
34I agree with the approaches taken in Chairman’s Brands and L’Ouvrier. They are commercially reasonable and in keeping with the technology currently available. Indeed, counsel for Big Bang conceded in oral argument that a text message could constitute proper written notice.
35The exchange of text messages makes it clear that Bang Hao Ho, the principal of Big Bang, was clearly content as of October 20, 2020 to extend the closing date as requested. These texts are in writing and are at least two weeks prior to December 1, 2020. Most important, because they are preserved in writing, they are available to serve as evidence that the buyer gave notice of its desire for an extension and Bang Hao Ho was amenable to the extension.
36Big Bang takes the position that for the notice to be effective, all the requisite terms of the new arrangement had to be agreed upon. It is argued that since no new specific closing date was effectively communicated to Big Bang, there could be no meeting of the minds and the notice was ineffective to amend the Agreement and the closing date of December 1, 2020.
37I disagree with that argument. Perhaps had no closing date ever been submitted by Kandlproperties, it would not have validly exercised its right to extend the closing date. However, Bang Hao Ho, the principal of Big Bang, knew that the buyer wished to extend the closing date by one month. Although it was not sent, the October 27, 2020 letter makes it clear what the intended date was—December 29, 2020. That date is within the 30 calendar days required by the Agreement. It would still give sufficient time to complete the necessary steps to close, given that the parties clearly contemplated only needing two weeks’ notice to do so. Otherwise, the Agreement, in my view, gave the buyer rather unfettered right to choose a new closing date, once, so long as it was within 30 calendar days of the original closing date. When it did finally arrive, the October 27, 2020 letter was not in any way at odds with what Bang Hao Ho could have been expecting.
38The assertion that the October 27, 2020 letter was not sent owing to lawyers’ inadvertence was not rigorously challenged. I wish to be clear, in the absence of the text messages, the failure to deliver the October 27, 2020 letter would have likely been fatal to Kandlproperties’ position. There would have been no written notice.
39It was obviously unfortunate that counsel for Kandlproperties did not send out the October 27, 2020 letter. It is also unfortunate that Bang Hao Ho did not tell his own lawyers that the closing date was being extended by a month. Had either of these things transpired, the closing date would have been moved to December 29, 2020.
40In my view, it would be grossly unfair to allow Big Bang to rescind this agreement when there is clear evidence that Bang Ho Hao was, as of October 20, 2020, content to extend the closing deal and that the buyer had the unilateral right to do so, one time. There is no indication of any prejudice to Big Bang, other than it perhaps had a different view of the price it could obtain in relation to the Property.
41Accordingly, I find that the closing date was validly extended by written notice sent at least two weeks prior to the original closing date. This deal ought to have closed on December 29, 2020 and the seller is therefore in breach of the Agreement.
42It is apparent that Big Bang understood that by December 1, 2020, the Property’s value was greater than what they had agreed to sell it for. Bang Hao Ho refers to not wanting to close the deal due to a “personal crisis” but the evidence demonstrates that by mid-January, 2021, the property had been re-listed at a substantially higher price. This case is simply an example of “seller’s remorse”.
Appropriate Remedy
Specific Performance
43Both parties rely upon the Court of Appeal decision in Matthew Brady Self Storage Corporation v. InStorage Limited Partnership, 2014 ONCA 858. Therein, the Court refers to Semelhago v. Paramadevan, [1996] 2 S. C.R. 415, [1996] S.C.J. No. 71, in which the Supreme Court of Canada confirmed that specific performance was not to be available automatically as the default remedy for breach of a contract for the sale of lands, “absent evidence that the property is unique to the extent that its substitute would not be readily available” or absent a fair, real and substantial justification for the claim to specific performance.
44The Court of Appeal further noted Landmark of Thornhill Ltd. v. Jacobson (1995), 25 O.R. (3d) 628, [1995] O.J. No. 2819 (C.A) which identified three factors bearing on the exercise of discretion in favour of specific performance:
(i) the nature of the property involved;
(ii) the related question of the inadequacy of damages as a remedy; and
(iii) the behaviour of the parties, having regard to the equitable nature of the remedy.
45The Plaintiff takes the position that there are no other similar investment properties that can be purchased for the sum of $755,000.00 and their appraiser has included a statement in her report to that effect. However, I disagree that $755,000 is the appropriate price to use as a comparison. In the event that specific performance is not ordered, the Plaintiff will be entitled to damages. On Kandlproperties’ evidence, which I have not yet accepted, the value of the property on the date of breach was $840,000. Thus, from a “uniqueness” perspective, it seems to me that the relevant consideration would be whether an income earning property could be purchased at that price. There is no evidence on that point available. The onus in that respect is upon the Plaintiff.
46Otherwise, no other evidence is offered in respect of uniqueness. I doubt that such evidence could be forthcoming. Other than a “good deal” there would not appear to be anything particularly unique about the Property. Damages can fairly account for the loss of this good deal.
47In terms of the Plaintiff’s concern about whether it will be able to collect on any judgment, I think that can easily be answered. While Kandlproperties has had a search done throughout Ontario to determine whether Big Bang owns any other properties and has concluded that it does not, it ignores the fact that Big Bang owns this property. This property remains available owing to the CPL and the Plaintiff can take the necessary steps to execute its judgment upon the subject Property.
48Other than refusing to close the transaction, in circumstances in which Big Bang was not notified of the assignment, Kandlproperties’ lawyer neglected to send the October 27, 2020 letter and there was an arguable position with respect to whether the closing date had been properly extended, there is nothing about Big Bang’s behaviour that would justify imposing specific performance.
49Accordingly, I am not persuaded by Kandlproperties that specific performance is the appropriate remedy in this case. Justice in this case is better served by an award of damages, not specific performance.
Damages
50In 642947 Ontario Ltd. v. Fleischer, the Court of Appeal reviewed the principles involved in determining the appropriate date by which to assess damages in a failed real estate transaction. Laskin J.A. stated as follows, at paras 41-42:
41The judgment of Morden J.A. in 100 Main Street Ltd. v. W.B. Sullivan Construction Ltd. (1978), 20 O.R. (2d) 401, 88 D.L. R. (3d) 1 (C.A) is the principal authority in this court on the assessment of damages for breach of an agreement of purchase and sale. In that case, the purchaser agreed to buy an apartment building but repudiated the contract before closing. The vendor sued for damages and both the trial judge and this court held the purchaser liable. The main issue in this court was when the damages should have been assessed. At the risk of doing a disservice to the thorough and thoughtful reasons of my colleague, I summarize what he wrote about the choice of the date for assessing damages for breach of an agreement to buy land in the following six propositions, which are relevant to this appeal:
(1) The basic principle for assessing damages for breach of contract applies: the award of damages should put the injured party as nearly as possible in the position it would have been in had the contract been performed.
(2) Ordinarily courts give effect to this principle by assessing damages at the date the contract was to be performed, the date of closing.
(3) The court, however, may choose a date different from the date of closing depending on the context. Three important contextual considerations are the plaintiff’s duty to take reasonable steps to avoid its loss, the nature of the property and the nature of the market.
(4) Assessing damages at the date of closing may not fairly compensate an innocent vendor who makes reasonable efforts to resell in a falling market. In some cases, the nature of the property—for example an apartment building—hampers the vendor’s ability to resell quickly. Thus, if the vendor takes reasonable steps to sell from the date of breach and resells the property in some reasonable time after the breach, the court may award the vendor damages equal to the difference between the contract price and the resale price, instead of the difference between the contract price and the fair market value on the date of closing.
(5) Therefore, as a general rule, in a falling market the court should award the vendor damages equal to the difference between the contract price and the “highest price obtainable within a reasonable time after the contractual date for completion following the making of reasonable efforts to sell the property commencing on that date” (at p. 421 O.R.).
(6) Where, however, the vendor retains the property in order to speculate on the market, damages will be assessed at the date of closing.
42Underlying these propositions is the simple notion of fairness. As Professor S. M. Waddams wrote in his text, The Law of Contracts, 4th ed. (Toronto: Canada Law Book, 1999), at p. 518, “[i]t is on general considerations of justice, therefore, that the choice of date must depend.” The date for the assessment of damages is determined by what is fair on the facts of each case. See Rice v. Rawluk (1992), 8 O.R. (3d) 696 (Gen.Div.); Bitton v. Jakovljevic (1990), 75 O.R. (2d) 143, 13 R.P.R. (2d) 48 (H.C.J.).
51In Fleischer, it was a vendor that was the innocent party, in a falling market. Big Bang also relies on Akelius Canada Inc. v. 2436196 Ontario Inc., 2020 ONSC 6182, a decision of Morgan J., where the purchaser was the innocent party and the market was rising. Morgan J. relied upon Fleischer and assessed damages as of the closing date.
52Subsequent to the argument in the case before me, the Ontario Court of Appeal, in Akelius Canada Ltd. v. 2436196 Ontario Inc., 2022 ONCA 259, upheld the decision of Morgan J. Harvison Young J.A., stated as follows, at paras. 27-29:
27In all these cases, the date of breach remains a starting point for the assessment of loss, modified only to the extent that the innocent party satisfies the court that a later date is appropriate on the grounds that it is the first date upon which the party could reasonably have been expected to re-enter the market and mitigate its damages.
28The appellant argues that the motion judge misapplied Fleischer because, in that case, the vendor was innocent. It further argues that when a vendor defaults on a real estate transaction in a rising market, the date of assessment of damages should be varied from the date of breach because an innocent purchaser such as the appellant may have difficulty attempting to purchase a comparable portfolio of properties in a rising real estate market. It relies on the case of Domowicz as authority for the proposition that assessing damages as at the date of breach would not satisfy the general principle that the non-breaching party should be put in a position in which he or she would have been in had the contract been performed.
29I do not agree with the appellant’s interpretation of these cases. First, in Fleischer, the innocent vendors had retained the property and re-leased it, speculating that the market would eventually go back up. Laskin J.A. rejected the argument that because the vendors were innocent, they were entitled to deviate from the usual measure of damages as of the date of the breach. He found that the appropriate date was the date of breach. I see no principled reason for the suggestion that the date should be different when the purchaser is the innocent party. Put another way, the fact that a party is innocent does not displace the date of breach as the presumptive date for the measure of damages in a real estate case. (emphasis added by me).
53I am obviously bound by the Court of Appeal. The presumptive date for assessing damages is the date of the breach. No satisfactory evidence or argument by either party persuaded me that another date was more appropriate. Given my conclusion that the closing date was extended, I find that the date of the breach was December 29, 2020.
54Keeping in mind that both parties expressly consented to this matter being dealt with by a judge in a summary fashion, I have concluded that they must have both contemplated that a court would weigh their competing expert reports, and any other relevant evidence, to determine the appropriate measure of damages. Had the parties wished to cross-examine each other’s experts, they could have done so in advance of the hearing.
55I note that there are cases supporting judges on summary judgment motions under Rule 20.04 (2)(b) utilizing the fact-finding powers in Rule 20.04(2.1) and (2.2) (see, for example, 2249740 Ontario Inc. v. Morguard Elgin Ltd., 2015 ONSC 299 and Lagani v. Lagani Estate, 2013 ONCA 159). Again, it seems to me that the question is whether the damages can be assessed in a fair and just manner. I am satisfied that they can be.
56As noted, Big Bang’s expert assesses the fair market value of the property as of December 29, 2020 at $700,000. The Direct Comparison Approach resulted in a range from $670,000 to $730,000 and the Income Approach suggested a range from $670,000 to $740,000.
57Big Bang points out that its appraiser had access to information that Kandlproperties’ appraiser did not. This includes:
(a) The ability to enter upon the premises and inspect every unit, meter and common fixture;
(b) Review tenant leases;
(c) Review financial statements;
(d) Consider the operating costs; and
(e) Examine required repairs.
58Big Bang’s appraiser was of the view that the Property required renovations and decorating to bring them up to current general standards. It was considered to be in below average overall condition.
59In reviewing the Big Bang appraiser report, it notes that in the summer and fall of 2020 there was a “strong rebound” in residential housing prices. Six comparables were noted, also MURBs, that were sold between May 2019 and December 2020. Recognizing that the properties would not all be in the same condition, same location and they were not all 6-unit comparables, the range was still from $805,000 (6 units in May 2019) to $1,310,000 (6 units in December 2020). The appraiser does explain how he viewed the various factors in evaluating the comparables at some length in the narrative of the report.
60Kandlproperties’ appraiser concluded that the property had a value of $840,000 as of December 29, 2020, based on the Direct Comparison Approach. Using the Income Approach, the property had an appraised valued of $555,000. Admittedly, the Plaintiff’s appraiser only inspected the exterior of the property and assumed that the interior and exterior condition of the property was in a reasonable state of repair.
61Kandlproperties’ appraiser used nine comparables, covering from March 4, 2019 to June 8, 2021. I note that three of the comparables were the same as Big Bang’s appraiser’s comparables. The range in price, again keeping in mind the variability of these comparables, was from $675,000 (6-unit on March 4, 2019) to $1,310,000 (6-unit on December 11, 2020). The comparables used by the Kandlproperties’ appraiser were located closer to the subject Property than many of the comparables used by the Big Bang appraiser.
62The Kandlproperties’ appraisal report notes five comparables in very close proximity to the subject Property. One of these is also a comparable in the Big Bang appraisal report. Four of the five are 6-unit buildings. They sold between May 9, 2019 and June 21, 2019 for the prices of $750,000, $750,000, $755,000 and $805,000. It is clear that each of these four buildings are in better condition than the subject Property. Having said that, there is no question that the real estate market significantly heated up from May 2019 onward. That is made clear by both reports. The Big Bang report notes that average home sale prices increased by 28% over the prior year. This included single detached homes to high rise apartment condominiums.
63This court must do its best to assess damages. I cannot accept that the fair market value of the Property as of December 29, 2020 was $700,000. If that were true, I have no doubt that Big Bang would have closed this deal. Instead, it offered the property on the market a month later for $820,000 plus a $25,000 fee. While it is clear that asking price does not necessarily equate with fair market value, this is clearly strong evidence of how Big Bang valued the property. The facts of this case undermine Big Bang’s appraiser’s report. The $700,000 number, respectfully, ignores the substantial increase in prices that occurred between 2019 and 2020.
64I fix a fair market value of $820,000 on the Property as of December 29, 2020. This appears in line with Kandlproperties’ appraisal and the subsequent listing by Big Bang. It accords with the comparables, accounting for their superiority plus an increase in the real estate market generally.
65Big Bang did not assert any failure to mitigate.
66Kandlproperties’ damages are measured by the difference between $820,000 and $715,000, or $105,000, plus the $15,920.00 incurred for lender fees. This totals $120,920.00 and includes the $40,000 fee that Kandlproperties paid for the assignment.
Disposition
67For the foregoing reasons, the Plaintiff shall have judgment against the Defendant, in the amount of $120,920.00 plus pre- and post-judgment interest. If the parties are unable to agree on the appropriate rate of pre-judgment interest, written submissions can be included on that issue when costs submissions are made.
68In its factum, the Plaintiff suggested that this court should force the sale of the Property so that the Plaintiff could receive its judgment. That, in my view, is an enforcement issue. It is certainly possible that the Defendant is capable of paying this judgment.
69As specific performance was not awarded, the certificate of pending litigation should be removed from the Property, unless either party appeals from this decision. Accordingly, absent an appeal, the certificate of pending litigation should be discharged thirty days following the expiration of the period by which a notice of appeal is due. This extra 30 days will allow for the Plaintiff to take any necessary steps to protect its judgment. If an appeal is filed, the certificate of pending litigation shall remain in place pending the disposition of the appeal, or further court order.
70If the parties are unable to agree on costs, or the applicable pre-judgment interest rate, the Plaintiff may provide written submissions, no longer than 3 pages double spaced, along with a Bill of Costs and any relevant offers no later than May 10, 2022. The Defendant shall file responding submissions, within the same parameters, no later than May 20, 2022.
“Justice S. Nicholson” Justice Spencer Nicholson Date: April 21, 2022