Court File and Parties

COURT FILE NO.: CV-15-00520443-0000 DATE: 20230828 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: J.M.L. HOLDING CORPORATION and GARY MUCHULA, Plaintiffs AND: DAVID RYAN and THE ESTATE OF WILLIAM COLVIN, Defendants

BEFORE: VERMETTE J.

COUNSEL: David S. Altshuller and Jacob Svirsky, for the Plaintiffs Eric O. Gionet and Sabrina A. Lucenti, for the Defendant David Ryan

HEARD: March 14, 2023

Endorsement

[1] The Plaintiffs have brought this action against their former real estate solicitor, the Defendant David Ryan. They allege that they sold certain real property that they did not intend to sell as a result of Mr. Ryan’s negligent conduct.

[2] The Plaintiffs now move for an order granting them summary judgment as against Mr. Ryan. They seek damages in the amount of $550,000.00, which they allege is the current value of the property that they erroneously sold.

[3] In my view, this is not an appropriate case for summary judgment. This motion for summary judgment does not provide the court with the evidence required to adjudicate the dispute between the parties fairly and justly. Among other things, there are credibility and reliability issues, conflicting expert opinions and incomplete evidence Consequently, the Plaintiffs’ motion is dismissed.

A. Factual Background

1. The parties

[4] The Plaintiff J.M.L. Holding Corporation (“JML”) is a corporation incorporated under the laws of British Columbia.

[5] The Plaintiff Gary Muchula is the President and sole shareholder of JML.

[6] Mr. Ryan is a lawyer who practices primarily in the area of real estate law in the districts of Muskoka and Parry Sound, Ontario. He acted as JML’s real estate solicitor on the real estate transaction in issue in this action.

[7] Mr. Muchula and Mr. Ryan have never met in person. All of their communications at the relevant time were by telephone or e-mail because Mr. Muchula was then in North Vancouver, British Columbia.

[8] The claim has not proceeded against the Defendant Estate of William Colvin as it appears that the Plaintiffs’ former litigation counsel did not serve the Estate with a copy of the Statement of Claim. Mr. Colvin had also acted as JML’s real estate solicitor on a prior real estate transaction.

2. The properties

[9] This case involves three different properties:

a. A property with a cottage municipally known as 932 Jones Lane in the Town of Huntsville (“Cottage Property”), which was owned by Mr. Muchula and his wife at the relevant time, Jill Muchula.

b. A farm property with a farmhouse and barn municipally known as 959 Jones Lane in the Town of Huntsville (“Farm Property”), which was owned by JML at the relevant time.

c. A vacant waterfront lot in the Town of Huntsville (“Waterfront Property”) which was owned by JML at the relevant time.

[10] The Cottage Property and the Waterfront Property both about the Farm Property. The Farm Property is approximately 48 acres and the Waterfront Property is approximately 2 acres.

3. Purchase of the Farm Property and the Waterfront Property in 1997

[11] JML purchased the Farm Property and the Waterfront Property in 1997 from Kenneth and Edith Jones. Mr. and Mrs. Muchula already owned the Cottage Property at that time, and the Joneses were the Muchulas’ neighbours. The Joneses informed Mr. Muchula that they had previously severed the Waterfront Property from the Farm Property. The severance of the Waterfront Property from the Farm Property was registered on title on April 1, 1987. However, despite the severance, there were a number of conveyances between 1989 and 1996 that dealt with both properties together under one legal description under common ownership. [1]

[12] Mr. Muchula states in his affidavit that he informed his real estate lawyer at the time, William Colvin, about the severance and he instructed Mr. Colvin to register the Waterfront Property in his name and the Farm Property in the name of JML. This did not occur. The transaction closed in October 1997. The properties were dealt with together under one legal description, and Mr. Colvin registered title to both properties in JML’s name. Mr. Muchula’s evidence is that this was unknown to him at the time.

[13] On October 23, 1997, Mr. Colvin sent a reporting letter to JML, Mr. Muchula and Mrs. Muchula detailing his actions regarding the transaction with the Joneses. A copy of the Transfer/Deed of Land registered on title was enclosed. There is no mention by Mr. Colvin anywhere of separate dealings with the Waterfront Property. According to Mr. Muchula:

At the time, I believed title to the Farm Property had been put in the name of my corporation and title to the Severed Waterfront Property had been put in either my own name or in both mine and my then wife’s name, Jill Muchula. Since we were married at the time it did not matter to me either way.

As these were my instructions to my lawyer, I had no reason to believe otherwise and thought no more about it.

[14] In 2006, the Waterfront Property and the Farm Property were converted from the old Registry System into the Land Titles System. The properties were given only one Property Identification Number (PIN) by Land Titles at the time of the conversion: PIN 48082-0202.

4. Appraisal and MLS listings of the Farm Property and the Waterfront Property

[15] In 2011, Mr. Muchula retained an appraisal company to do an appraisal of both the Farm Property and the Waterfront Property. One of the assumptions listed in the report is that “the 1.91-acre shoreline lot fronting on the canal is severed from the main acreage.” The appraiser determined that the market value of the Farm Property was $840,000.00 and the market value of the Waterfront Property was $250,000.00. One of the documents attached to the appraisal report contains a handwritten note that states as follows: “See Deed DM 206017 which is a severance for Parts 16 & 17 on Plan 35R-10841. A full title search should be performed to ascertain if the consent still stands allowing for this parcel of land to be dealt with as a separate lot.”

[16] On November 23, 2012, the Farm Property and the Waterfront Property were listed for sale on MLS as one property at an asking price of $999,900. The properties were listed in both the “Commercial Sale” and the “Land” sections of the MLS system. The listings stated the following:

List Price: $999,900

Seller: J.M.L. HOLDING CORP. / MUCHULA, JILL AND GARY

Banner: 49.91 AC DEVELOPMENT PROPERTY WITH 501’ WATERFRONT

Public Remarks: Prime development property 49.91 acres includes a separately deeded 501’ waterfront lot on the mouth of the canal at Fairy Lake connecting to Peninsula Lake and Huntsville’s 4 lake system providing 40 miles of boating into downtown Huntsville. Land is mostly level and cleared, previously a farm ‘Jones Farm’, an older bungalow and barn are still on property. Located in the SPA-1 Special Policy Area One designation on Huntsville’s official plan for resort use, low to medium density compatible with a recreational focus. See attached documents. Municipal water and gas at property. Waterfront lot is level and dry with a short slope to the water. Old boathouse on waterfront.

[17] Six documents were attached to the MLS listings, including an excerpt from the 2011 appraisal obtained by Mr. Muchula.

[18] The listing in the “Land” section was cancelled on December 6, 2012, and the listing in the “Commercial Sale” section was cancelled on December 6, 2013. The listing agent for both listings was Sue Burke.

[19] I note that the Plaintiffs did not disclose the MLS listings in their evidence. The listings were first referred to in the expert report of the appraiser retained by Mr. Ryan. Because this expert report was prepared after the cross-examination of Mr. Muchula, Mr. Muchula was not asked questions about the listings during his cross-examination.

5. Aborted sale of the Cottage Property

[20] In June 2013, Mr. Muchula and his wife entered into an agreement to sell the Cottage Property to Helen Spillette. Their real estate salesperson on this transaction was Sue Burke. In early July 2013, Mr. Muchula retained Mr. Ryan to act as the vendors’ solicitor on the transaction. There were discussions about the need for an easement over the Farm Property to ensure continuation of water and gas services to the Cottage Property. Ultimately, the sale transaction to Ms. Spillette did not close and was terminated by a mutual release dated July 16, 2013. No easement was applied for.

6. Sale of the Farm Property and the Waterfront Property

[21] Mr. Muchula’s evidence is that in July 2013, he was approached by Elie Moussaed, the President of Marketing and Promotional Team Inc., who was interested in purchasing the Farm Property. Mr. Muchula told Mr. Ryan about this proposal and instructed him to draft an agreement of purchase and sale for the Farm Property. According to Mr. Muchula, he informed Mr. Ryan that: (a) in addition to the Cottage Property, he owned a second property that also bordered the Farm Property, i.e., the Waterfront Property; and (b) a past severance had occurred regarding the Waterfront Property.

[22] Mr. Ryan mentioned the need to apply for an easement over the Farm Property to ensure continuation of services to the Cottage Property. Mr. Muchula states in his affidavit that he and Mr. Ryan did not discuss an easement in favour of the Waterfront Property as it did not receive water and gas services via utility lines crossing the Farm Property.

[23] Mr. Ryan describes as follows the information that he received from Mr. Muchula:

However, the day that I received the said Mutual Release in relation to the aborted cottage sale, July 16, 2013, I opened another file at Mr. Muchula’s request. Mr. Muchula retained me to act for his company, JML, on whose behalf Mr. Muchula had agreed to sell a farm property owned by JML and which abutted his aforesaid cottage property. Mr. Muchula told me that municipal address of JML’s farm property was 959 Jones Lane. Mr. Muchula also told me that the purchaser was one Elie Moussaed, the sale price was $950,000, the deposit was $50,000.00, closing was August 15, 2013 and that he believed that HST was not payable. I told him to confirm with his accountant whether or not HST was payable. Mr. Muchula said that the property included a farmhouse, a small barn and a “lean-to” that were being sold on an “as is where is” basis with no warranty. […] I also recall, but did not note, that Mr. Muchula told me that JML was selling all the land that it owned and that there was a two-acre lot that was to have the benefit of a hydro and water easement.

[24] On July 9, 2013, Mr. Muchula sent an e-mail to Mr. Ryan that contained the contact information for the purchaser’s lawyer. Mr. Ryan responded on July 10, 2013 and stated as follows in his e-mail: “I am in the office today and will call you mid-day (my time) to discuss my findings at the Registry Office.”

[25] On July 16, 2013, Mr. Ryan sent the following e-mail to Mr. Muchula asking for some information:

Gary,

I need you to provide me with the following information so that I can complete your Agreement of Purchase and Sale (APS) with Elie.

1. Are there any chattels INCLUDED in the sale price (fridge, stove, washer, dryer, etc.)?
2. Are there any fixtures EXCLUDED from the sale price (dining room chandelier)?
3. Are there any rental items that stay with the property (such as a hot water tank)?
4. Are YOU the president of JML Holding Corporation? If not who is?
5. Do you have the authority to bind that corporation (enter into contracts such as this APS)?
6. What is the property zoned (single family residence? Seasonal?)?
7. Exactly who owns the 2nd lot to have the benefit of the easement to be registered (not the “Spillette lands” – you indicated that there is a 2 acre lot to also get the benefit of the right of way – who owns that land (you, Jill, both of you, JML Holding Corp, other # Co)?
8. What is the legal description of that 2nd piece of land to benefit from the easement?

With respect to the application for the permanent easement – if it can be submitted by Friday July 19, there is a chance that it will make it on to the next agenda meeting, being August 14. Are you taking care of preparing and submitting chat application to the Town of Huntsville or do you want me to do it? If you want me to do it, please deposit $3,500.00 to my bank account by Thursday July 18. My fee for preparing and submitting the application will be $950 plus HST. I attach my bank account information. Please let me know when the funds have been deposited.

Please call me in Parry Sound after Noon my time.

[26] Mr. Muchula responded on the same day:

Hi David

Please find the following regarding your request for info to complete the agreement of purchase and sale of 959 Jones Lane Huntsville.

1. chattels included
2. fixtures included
3. no rental items
4. I am the president of JML Holdings Corp
5. yes
6. farm/residential
7. Lot of benift [sic] from easement is legally owned by Gary Muchula of 932 Jones Lane Huntsville
8. Legal description is CON1 PT Lot 27 RP 35R15165 Parts 1 & 2

Hope this is helpfully [sic]; Any questions call me

[27] The information provided by Mr. Muchula in response to question 8 above (legal description) appears to relate to the Cottage Property, not the Waterfront Property. In addition, the address mentioned in the answer to question 7 is the Cottage Property’s address. Mr. Muchula states the following in his affidavit regarding this exchange of e-mails:

In my responses to questions 7 & 8 I provided the details of the Cottage Property when the question in fact appears to be in regards to the Severed Waterfront Property.

On review, it appears to me that I misunderstood the question. In the question Ryan identifies the property being asked about as not the “Spillette lands” (i.e. not the Cottage Property) rather, and presumably, the Severed Waterfront Property.

However, Ryan also identifies the subject property of the question, as requiring an easement over the Farm Property. This presumption was incorrect as only the Cottage Property required the easement. As a result, it appears that because of this easement comment, I mistook the questions to be about the Cottage Property and answered accordingly.

Ryan never asked me for clarifications on my responses nor did he ever clarify that he was specifically not asking about the Cottage Property.

Ryan never inquired further as to the location and details of my Severed Waterfront Property.

[28] Mr. Ryan states the following in his affidavit regarding what he was told by Mr. Muchula with respect to the Waterfront Property:

I recall that Mr. Muchula said that he also owned vacant land. He may have mentioned that it was “waterfront” – I cannot recall. I asked him for a description of this land. He responded that it was Parts 1 and 2 on Plan 35R-15165, which is the legal description for the Muchulas’ cottage property at 932 Jones Lane in Huntsville. This land is described in PIN 38082- 0191 as owned by Jill and Gary Muchula. I obtained a copy of this PIN, and subsequently confirmed to Mr. Muchula that he and Jill owned this property.

[29] During his cross-examination, Mr. Ryan stated that Mr. Muchula had indicated during a telephone conversation that he owned a second lot south of the farm. According to Mr. Ryan, while he was initially told that both the Cottage Property and that other property were going to get the benefit of the easement, he later received instructions from Mr. Muchula during a telephone conversation to apply for an easement only in relation to the Cottage Property.

[30] Later on July 16, 2013, Mr. Ryan sent a draft agreement of purchase and sale to Mr. Muchula by e-mail. Schedule B to the draft agreement of purchase and sale included a marked-up reference plan with a line showing the approximate location of the proposed easement. Mr. Ryan asked Mr. Muchula to read the draft agreement of purchase and sale very carefully and to call him the following day so that they could discuss. The agreement was between Elie Moussaed (later changed to Marketing and Promotional Team Inc.) and JML for a purchase price of $950,000. Mr. Muchula states in his affidavit that he was unaware that the description of the Farm Property in the draft agreement of purchase and sale included the description of the Waterfront Property, and that he did not intend to sell the Waterfront Property.

[31] In the following weeks, Mr. Ryan prepared and submitted an easement application and continued to work on the agreement of purchase and sale. During this period, Mr. Muchula continued to correspond with Mr. Ryan via e-mail regarding the easement application and the drafting of the agreement of purchase and sale. At the request of the purchaser, the following price allocation was agreed upon and added to the agreement of purchase and sale:

(i) House, Barn, Shed, and One and ¼ acres (1.25 acres) = $900,000.00 (ii) remaining acreage of approximately 48 acres = $50,000.00

[32] Mr. Muchula states the following in his affidavit:

a. Mr. Ryan never asked Mr. Muchula to confirm the parameters of the property being sold or to identify the location of his adjacent properties. b. Mr. Ryan never informed Mr. Muchula whether his title search of Mr. Muchula’s properties reflected what Mr. Muchula had told Mr. Ryan, i.e., that he owned three separate parcels of land. c. Mr. Ryan never explained the legal description of the property depicted in the agreement of purchase and sale.

[33] On September 4, 2013, Mr. Ryan sent the final version of the agreement of purchase and sale to Mr. Muchula by e-mail. The agreement was between JML as seller and Marketing Promotional Team Inc. (“Buyer”) as buyer. The price and the legal description of the property being sold remained unchanged. On September 13, 2013, Mr. Ryan sent a number of closing documents by e-mail to a lawyer in British Columbia for Mr. Muchula to have notarized. Mr. Muchula visited the offices of the lawyer on September 16, 2013 and signed the various closing documents provided to him. The transaction closed late on September 16, 2013.

[34] According to Mr. Ryan, he reported to Mr. Muchula by letter dated December 4, 2013 and he heard nothing from Mr. Muchula until August 2014.

7. Mr. Muchula “discovers” that the Waterfront Property was sold

[35] Mr. Ryan’s evidence is that Mr. Muchula informed him in August 2014 that he had discovered that the Waterfront Property had been included in the land sold by JML in 2013, and he had not intended to sell this property.

[36] Mr. Muchula’s evidence on this point is similar. He states that in August 2014, he contacted a real estate agent, Chuck Adams, for his advice and assistance because he was considering what he wanted to do with the Waterfront Property. After visiting the Land Registry Office, Mr. Adams informed Mr. Muchula that the Waterfront Property was included in the transfer to the Buyer. Mr. Muchula then brought this to the attention of Mr. Ryan. Mr. Ryan and Mr. Muchula subsequently exchanged a few e-mails in early August 2014.

[37] On August 5, 2014, Mr. Ryan sent the following e-mail to Mr. Muchula:

Hello Gary,

I tried calling you several times today, but did not hear back from you. I left a message on your voice mail. I think that it is quite important that we meet in the Bracebridge Land Registry Office (LRO) sooner than later. I attended at LRO Friday afternoon even though you could not make it, and I searched the historical records for the property owned by the Jones. I could not find any Deed registered in your name and Jill’s name, other than for the cottage property. Further, during our discussion Friday mid-day, you had referenced Parts 16 & 17 & 18 on Plan 35R10841 as being the vacant land that you thought would be in your name and Jill’s name. Those pieces were part of the 1997 Transfer/Deed to JML Holding Corporation (see the seventhly described lands at the bottom of page two of that Deed 301485). These lands (Parts 16 & 17 & 18 on Plan 35R10841) were not in your name or Jill’s name and were transferred by JML Holding Corporation to Eli’s company when the sale occurred on September 16, 2013. We need to review that survey 35R10841 to determine if that is property that you thought belonged to yourself and Jill. If so, this is a very serious matter, as JML Holding Corporation sold that land. I can meet with you Wednesday late in the afternoon at the LRO (at 3:30 pm) or Thursday at 1:30 pm. Do either of these times work for you?

I have not heard back from Eli’s lawyer with respect to the Hydro easement. The water easement cannot be registered until the Hydro easement is registered. The Hydro easement being registered is a condition of the severance approval for the water easement. This is why it is so important for Eli to get into his lawyer and execute those Hydro Easement documents. There is a deadline approaching, after which a new application for the water easement will have to be submitted. I think it important that we meet at the LRO as soon as possible, because my next correspondence to Eli’s lawyer should set out our position about Parts 16 & 17 & 18 on Plan 35R10841 if indeed you did not intend to sell those lands. As a further matter in that correspondence we can push to have the hydro easement documents executed and registered.

[38] On August 12, 2014, Mr. Ryan sent a letter to Mr. Muchula recommending that Mr. Muchula seek legal advice with respect to the sale of the Farm Property.

[39] This action was commenced on January 23, 2015. Mr. Ryan delivered a Statement of Defence on August 24, 2015.

8. Expert evidence on the issue of the standard of care

[40] Robert Aaron, a real estate lawyer in Toronto, was retained by the Plaintiffs to provide an expert opinion regarding the adequacy of the duties performed by Mr. Ryan when acting as the Plaintiffs’ real estate solicitor. It is Mr. Aaron’s opinion that Mr. Ryan fell below the applicable standard of care required of him when performing his duties to the Plaintiffs. Mr. Aaron summarized his opinion as follows in his report:

It is my opinion that Ryan failed to follow his client’s instructions by failing to take the necessary steps to verify what land the client intended to sell and to incorporate that in the Agreement of Purchase and Sale and in the closing documents including the Transfer/Deed of Land.

It is my opinion that a solicitor has an obligation to consult with his or her client to confirm the land being dealt with and in the event there are any doubts as to the instructions received.

It is clear from the correspondence detailed below that Ryan had been informed of his client’s ownership of the two-acre Waterfront Property which abutted the property his client intended to sell. It is also apparent that Ryan was unable to locate this property and made one failed attempt via email to ascertain certain details of this property from the client.

As set out below, the client misunderstood Ryan’s email, and responded with an answer that clearly demonstrated that he had misunderstood it. Ryan failed to verify the client’s response against the title searches and registered Reference Plans. Had he done so he would have understood that the Agreement he created would sell more land than the client intended.

In my opinion, Ryan’s duty required him to follow up and satisfy himself that his client understood the question and understood that Ryan had doubts as to the details and location of the second property/Waterfront Property.

By failing to follow up and verify the boundaries of the land being sold, Ryan erroneously included an additional two acres of land in the Agreement of Purchase and Sale. In my opinion this error was a result of Ryan’s failure to perform the duty of care he owed to the client.

[41] Mr. Ryan has raised an issue regarding Mr. Aaron’s independence as an expert witness. On September 19, 2014, Mr. Aaron registered a Notice pursuant to section 71 of the Land Titles Act, R.S.O. 1990, c. L.5 on title to the Waterfront Property on behalf of JML. The Notice states, in part:

I Robert Aaron am the solicitor for the applicant. I confirm that the applicant has an unregistered estate right interest or equity in the lands described as that part of PIN 48082-0202 noted above. The land is registered in the name of Marketing and Promotional Team Inc. and I hereby apply under section 71 of the Land Titles Act for the entry of a Notice in the register for the said parcel. […]

[42] Mr. Ryan does not seek a determination as to the admissibility of Mr. Aaron’s expert evidence on this motion for summary judgment. His position is that the admissibility and/or weight to be given to Mr. Aaron’s evidence should be determined at a full trial. He also submits that the issue of Mr. Aaron’s independence should go to the weight to be given to Mr. Aaron’s evidence on this motion.

[43] Donald V. Thomson, a real estate lawyer in Toronto, was retained by Mr. Ryan to provide an expert opinion with respect to whether Mr. Ryan complied with his professional duties and met the standard of care expected of a prudent lawyer when acting on behalf of a corporate vendor of a property zoned farm/residential.

[44] Mr. Thomson opined that Mr. Ryan met the standard of care in this case. He summarized his opinion as follows in the conclusion of his report:

1. [Mr. Ryan] was only required to conduct a sub-search of title to obtain the proper legal description and to determine the registered owner of the property in preparing the Agreement;
2. He was not required to conduct a full title search or to review Transfers/Deeds registered prior to the PIN creation date;
3. He confirmed the legal description in the Agreement by comparing the legal descriptions in the Parcel Register and in the Transfer in favour of JML before he sent three drafts and a fourth and final version of the Agreement to Muchula for his review and prior to Muchula accepting the Agreement;
4. He was not required to review either the Reference Plans noted in the legal descriptions or any instruments referred to in a surveyor’s notation in the legend on the Reference Plan in preparing the legal description for the Agreement; and
5. He was not required to conduct an abutting land search by reason of the fact that the Farm Parcel and the Waterfront Parcel had been converted into an LTCQ parcel which guaranteed against Planning Act contravention up to March 21, 2005.

[45] In Mr. Thomson’s opinion: (a) Mr. Aaron’s criticism that Mr. Ryan failed to confirm the legal description in the agreement of purchase and sale with Mr. Muchula is unjustified; and (b) it is not possible to impute Mr. Muchula’s knowledge of his intention to take title to the Waterfront Property in his own name in 1997 to Mr. Ryan. Mr. Thomson states the following in his report regarding the July 16, 2013 e-mails:

Prior to drafting the Agreement, Ryan sought Muchula’s clarification as to who owned the second parcel and the legal description of the second parcel to receive the benefit of the permanent casement but “not the ‘Spillette lands.”

Muchula advised Ryan that the Cottage Property which abutted the Farm Parcel was the beneficiary of the permanent easement. Ryan’s sub-search confirmed that JML owned both the Farm Parcel and the Waterfront Parcel. Once Ryan completed his sub-search of title, he would have had no reason to believe that Muchula, Jill or JML owned any other properties that abutted the Farm Parcel or the Waterfront Parcel other than the Cottage Property.

Muchula’s reply to Ryan was clear and direct. Ryan had no way of knowing that Muchula misunderstood Ryan’s questions. Ryan had no obligation to question or clarify Muchuta’s reply.

When Muchula received the drafts of the Agreement which set out the legal description on page 1, he should have been attuned to reviewing Schedule B and to identifying that the Waterfront Parcel was shown on Schedule B and part of the legal description.

In reviewing Schedule B to the Agreement, Muchula should have noticed that Parts 16 and 17, Plan 35R 10641 which formed part of the legal description in the Agreement, abutted the canal and that the Waterfront Parcel was therefore a part of the legal description.

It was Muchula’s responsibility to point out to Ryan that the Waterfront Parcel was not being sold and to compare the legal description included in the Agreement with the lands shown on Schedule B.

9. Expert evidence on damages

[46] The parties have also filed expert reports of a number of different appraisers regarding the value of the Waterfront Property and/or the Farm Property.

[47] The Plaintiffs filed two expert reports prepared by Kimberly Dickinson. In her first report, she opines that the value of the Waterfront Property as of September 16, 2013 was $335,000. In her second report, she opines that the value of the Waterfront Property as of October 23, 2020 was $550,000.

[48] Mr. Ryan relies on the evidence of Robin Jones whose opines that the retrospective value of the Farm Property and the Waterfront Property together as of September 16, 2013 was $930,000.

[49] The Plaintiffs also filed an expert report prepared by Larry Brewer who performed a “Technical Review” of Mr. Jones’ report. In addition to performing a technical review, Mr. Brewer conducted an appraisal utilizing the work product contained in Mr. Jones’ report. Mr. Brewer concluded that the retrospective value of the Waterfront Property as of September 16, 2013 was $230,000 and the retrospective value of the Farm Property as of September 16, 2013 was $891,000.

B. The Positions of the Parties

1. Position of the Plaintiffs

[50] The Plaintiffs’ position is that this is an appropriate case for summary judgment. They state that JML has put before the court a complete evidentiary record of the events surrounding the transfer of the Waterfront Property, including a fulsome affidavit from Mr. Muchula. They note that they have put before the court expert reports going to the standard of care that a real estate solicitor must adhere to in the context of a real estate transaction and the appropriate measure of damages.

[51] The Plaintiffs submit that the issue of whether a solicitor’s provision of legal services was negligent can be determined by way of summary judgment. They argue that doing so on this motion is the most proportionate, expeditious, and least expensive means of resolving the issues in dispute. According to the Plaintiffs, there are few contested facts between the parties that could turn the matter one way or the other and would require the fact-finding process of a trial.

[52] The Plaintiffs argue that there were three critical errors of solicitor-client communication in this case:

a. Mr. Ryan’s failure to ensure that the Plaintiffs fully understood what was being sold in the complex legal description in the agreement of purchase and sale and the attached Schedule “B” which, they argue, was a reduced and largely illegible reference plan; b. Mr. Ryan’s failure to seek further clarity regarding the whereabouts of the Waterfront Property following the two questions on that issue that were sent by e-mail to Mr. Muchula on July 16, 2013, which prompted replies from Mr. Muchula that clearly indicated that Mr. Muchula had misunderstood the questions; and c. Mr. Ryan’s failure to follow up with Mr. Muchula about the historical severance of the Waterfront Property from the Farm Property.

[53] The Plaintiffs submit that but for Mr. Ryan’s negligence, JML would not have transferred the Waterfront Property away with the Farm Property for no additional consideration. They further submit that it is reasonably foreseeable that JML would have held onto the Waterfront Property until 2023 and that damages should be measured accordingly. In the alternative, they ask that the loss be measured as the value of the Waterfront Property at the time of the sale or in August 2014, when Mr. Muchula found out about the transfer of the Waterfront Property.

2. Position of Mr. Ryan

[54] Mr. Ryan’s primary position is that this claim is not appropriate for determination on a summary judgment motion. In the alternative, if the Court is prepared to determine the issues on this motion for summary judgment, it is Mr. Ryan’s position that he was not professionally negligent and, in any event, the Plaintiffs have suffered no damages as JML received fair market value for the property that was sold.

[55] Mr. Ryan points out that the Plaintiffs have failed to provide any evidence in relation to the Buyer’s perspective, including:

a. what the Buyer believed it was acquiring when it agreed to pay $950,000 to JML in the agreement of purchase and sale; b. whether the Buyer would have agreed to close the purchase transaction for the Farm Property alone, without the Waterfront Property included; and c. whether the Buyer would have still agreed to pay the full $950,000 for the Farm Property alone, without the Waterfront Property included.

[56] Mr. Ryan submits that there are significant material facts in dispute, and that many of them require an assessment of credibility as between Mr. Muchula and Mr. Ryan. Mr. Ryan provides a list of ten examples in his Factum, including the following:

a. Did Mr. Muchula tell Mr. Ryan about the historical severance of the Waterfront Property from the Farm Property? b. Did Mr. Muchula know from the 2011 appraisal report (or otherwise) that the Waterfront Property was not being shown as a separate lot? c. Did Mr. Muchula know from the MLS listings and his dealings with his own real estate agent that JML was listing for sale both the Farm Property and the Waterfront Property? d. Did Mr. Muchula in fact know and appreciate from the multiple versions of the draft agreement of purchase and sale that he reviewed – including the price allocation clause which showed that JML was selling more than just the 48 acres of the Farm Property alone – that JML was selling both the Farm Property and the Waterfront Property? e. Did Mr. Muchula honestly believe that he personally owned the Waterfront Property separate and apart from JML owning the Farm Property for 16 years when, among other things, he has not produced a single tax bill in support of this belief?

[57] Mr. Ryan also argues that where there are conflicting expert opinions, the admissibility of the expert evidence and the determination of the weight to be given to it should be decided in the context of a full trial.

[58] Given the existence of material facts in dispute, the credibility issues, the incomplete nature of the record and conflicting expert opinions, Mr. Ryan submits that there is a genuine issue requiring a trial and the summary judgment motion ought to be dismissed.

[59] In the alternative, Mr. Ryan argues that Mr. Jones’ evidence shows that JML has not suffered any damages as it received an amount equal to the fair market value of the Farm Property and the Waterfront Property at the time of the sale. Mr. Ryan further argues that the Plaintiffs have failed to prove the assumptions on which their claim for damages is based (i.e., claim for the current value of the Waterfront Property). Mr. Ryan states the following in his Factum:

In other words, essentially the Plaintiffs want to have their cake and to eat it too. They essentially want to retain the full $950,000 that they received on closing for both the Farmland and Waterfront properties, but then also on top of that, they want to recover an additional $550,000 in damages for the Waterfront property alone. Recall that JML had listed its property for sale on the MLS for $999,000 [sic], which listing included both the Farmland and the Waterfront portions.

Given that there is no evidence whatsoever as to what the Buyer would have done if the Waterfront property was excluded from the sale, and given that JML did in fact receive fair market value for the subject property (both Farmland and Waterfront), there ought to be no damages found owing to the Plaintiffs.

C. Discussion

1. General principles applicable on a motion for summary judgment

[60] On a motion for summary judgment, the court must first determine if there is a genuine issue requiring a trial based only on the evidence in the motion record, without using the fact-finding powers set out in Rules 20.04(2.1) and (2.2) of the Rules of Civil Procedure. There will be no genuine issue requiring a trial if the summary judgment process provides the court with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure. See Hryniak v. Mauldin, 2014 SCC 7 at para. 66 (“Hryniak”).

[61] If there appears to be a genuine issue requiring a trial, the court should then determine if the need for a trial can be avoided by using the powers under Rules 20.04(2.1) and (2.2), i.e., weighing the evidence, evaluating the credibility of deponents, drawing any reasonable inference from the evidence or ordering that oral evidence be presented. The court may, at its discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole. See Hryniak at para. 66.

[62] While summary judgment must be granted if there is no genuine issue requiring a trial, the decision to use either of the expanded fact-finding powers or to call oral evidence is discretionary. See Hryniak at para. 68 and Rules 20.04(2), 20.04(2.1) and 20.04(2.2) of the Rules of Civil Procedure.

[63] A party moving for summary judgment has the evidentiary burden of showing that there is no genuine issue requiring a trial with respect to a claim or defence: Rule 20.04(2)(a). The burden shifts to the responding party to prove that its claim or defence has a real chance of success only after the moving party has discharged its evidentiary burden of establishing that there is no genuine issue requiring a trial. See Sanzone v. Schechter, 2016 ONCA 566 at para. 30 and Kinectrics Inc. v. FCL Fisker Customs & Logistics Inc., 2020 ONSC 6748 at para. 35.

2. This is not an appropriate case for summary judgment

[64] Based only on the evidence in the record before me, I find that there are genuine issues requiring a trial, including the issues identified by Mr. Ryan set out in paragraph 56 above. These issues all require an assessment of the credibility and/or reliability of the evidence of Mr. Muchula. Some of these issues also require an assessment of the credibility and/or reliability of the evidence of Mr. Ryan and likely require the evidence of additional witnesses (e.g., Mr. Muchula’s real estate agent, Sue Burke).

[65] In addition, the evidence is incomplete and unsatisfactory on a number of issues:

a. It is unclear from the evidence – including Mr. Muchula’s own affidavit (see the excerpt reproduced in paragraph 13 above) – whether title to the Waterfront Property was intended to be in Mr. Muchula’s name only or in both Mr. Muchula and Mrs. Muchula’s names. If Mr. Muchula’s intention and instructions to Mr. Colvin were that the Waterfront Property was to be owned by both he and his wife, this could have an impact on the damages that the current Plaintiffs may be entitled to and/or Mrs. Muchula may need to be added as a Plaintiff. b. I agree with Mr. Ryan that some evidence regarding the Buyer’s perspective is required. This evidence is highly relevant to the issue of damages because Mr. Muchula’s position on damages is based on the unproven assumption that he would have sold the Farm Property to the Buyer without the Waterfront Property for the same price, i.e., $950,000. This assumption is not supported by any cogent evidence. Based on the evidence before me, it is unclear whether the Plaintiffs have suffered any damages. c. Despite the fact that the Plaintiffs are seeking damages based on the current value of the Waterfront Property, there is no evidence supporting the proposition that JML and/or Mr. Muchula were planning to keep the Waterfront Property for that long. In fact, there is no cogent evidence regarding the Plaintiffs’ intentions and plans for the Waterfront Property.The extent of the evidence on this point is a statement in Mr. Muchula’s affidavit that he was considering what to do with the Waterfront Property in August 2014 and he contacted a real estate agent at that time.

[66] Further, the conflicting expert evidence on the issue of the standard of care requires the court to determine the weight to be given to this evidence. The issue of Mr. Aaron’s independence has also been raised. While Mr. Ryan’s arguments on this point may be insufficient to exclude Mr. Aaron’s report, Mr. Aaron’s prior involvement in registering a Notice on title and his close professional relationship with the Plaintiffs’ original litigation counsel are relevant factors that would need to be taken into consideration when weighing his evidence. I am also concerned by the manner in which Mr. Aaron answered certain questions during his cross-examination, which could call into question his ability to give evidence in an objective and non-partisan way.

[67] In light of the foregoing, I conclude that there are genuine issues requiring a trial and that record before the court does not provide the court with the evidence required to adjudicate the dispute fairly and justly.

[68] I also conclude that the need for a trial cannot be avoided by using the powers under Rules 20.04(2.1) and (2.2). The issues of credibility, reliability and incomplete evidence are not restricted to a narrow issue in the case. Rather, they apply to a number of issues, including liability, damages and the very premises and assumptions on which the Plaintiffs built their case. In my view, credibility and reliability cannot be fairly and justly determined based on the paper record before me. The affidavit evidence raises many unanswered questions which the affiants should be required to answer directly, with their “authentic voice”: see Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450 at para. 44. As noted by the Court of Appeal, “[t]he more important credibility disputes are to determining key issues, the harder it will be to fairly adjudicate those issues solely on a paper record”: see Cook v. Joyce, 2017 ONCA 49 at para. 92. Further, given the breadth of the issues, the incomplete record and the need to assess credibility and reliability in light of all the evidence (which will be particularly important in this case, in my view), I find that this is not an appropriate case to exercise the court’s powers under Rule 20.04(2.2).

[69] I also find that it is in the interest of justice that the conflict between the expert opinions regarding the standard of care be resolved in the context of a full trial, where the weight of the expert evidence can be determined in light of all the admissible evidence of the events in question and the court’s findings of fact and credibility.

D. Conclusion

[70] The Plaintiffs’ motion for summary judgment is dismissed. In accordance with Hryniak at para. 78, I seize myself of this matter subject to my availability on the civil list, which may be determined through the Toronto civil motion/trial office.

[71] If costs cannot be agreed upon, Mr. Ryan shall deliver submissions of not more than three pages (double-spaced), excluding the costs outline, by September 11, 2023. The Plaintiffs shall deliver their responding submissions (with the same page limit) by September 25, 2023. The submissions of all parties shall also be sent to my assistant by e-mail and uploaded onto CaseLines.

Vermette J. Date: August 28, 2023

[1] It is unnecessary to review the conveyances in detail for the purpose of this endorsement. However, I note that while the Joneses conveyed both the Farm Property and the Waterfront Property in 1989, both properties ultimately reverted back to the Joneses in 1996 as a result of an order of foreclosure.