Court File and Parties

COURT FILE NO.: CV-23-00690126-0000 DATE: 2024-06-03 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: MARK ELEOFF, Plaintiff AND: DAVE ADAMCZYK, ZBIEGNEW ADAMCZYK, MALGORZATA ADAMCZYK and NATALIE ADAMCZYK, Defendants

BEFORE: VERMETTE J.

COUNSEL: Chris Maggirias, for the Plaintiff R. Christopher M. Belsito, for the Defendants

HEARD: December 4, 2023

Endorsement

[1] The Defendants brings this motion for summary judgment to dismiss the action.

[2] The dispute between the parties relates to a property in Toronto which, at the relevant time, was owned by the Defendants Zbiegnew, Malgorzata and Natalie Adamczyk (“Property”). The Plaintiff, Mark Eleoff, alleges that a binding agreement for the purchase of the Property was concluded in September 2022. This is denied by the Defendants.

[3] I conclude that the Defendants’ motion should be granted. Based on the evidence before me, the conditions for contract formation were not met in this case and there is no genuine issue requiring a trial.

[4] All excerpts from e-mails and documents reproduced in this Endorsement are quoted verbatim. For reasons of readability, I have not inserted “[sic]” when there were spelling or grammatical errors in the quoted text.

A. Factual Background

1. The parties

[5] The Defendants Zbiegnew and Malgorzata Adamczyk are the parents of the Defendants Natalie and Dave Adamczyk.

[6] Mr. Eleoff’s discussions with respect to the Property were with Zbiegnew Adamczyk and/or Dave Adamczyk. All written communications were between Mr. Eleoff and Dave Adamczyk (“Mr. Adamczyk”). While Malgorzata and Natalie Adamczyk were registered owners of the Property, they never met Mr. Eleoff and they never had any interactions or dealings with him.

[7] Mr. Adamczyk is a registered real estate agent. However, he was not retained to act as a real estate agent by any party with respect to the Property.

[8] The only parties who provided affidavit evidence on this motion are Mr. Eleoff and Mr. Adamczyk.

2. First contact and Letter of Intent

[9] In early September 2022, Mr. Eleoff was interested in purchasing a property for his daughter who had recently gotten married. On September 4, 2022, he saw the Property as he was driving with his wife looking at various communities and properties. The Property was in the process of being completed. Zbiegnew Adamczyk was outside and Mr. Eleoff went to speak to him. According to Mr. Eleoff, Zbiegnew Adamczyk told him that he was the builder of the Property and one of the owners, and while he was not actively looking to sell, he would do so at the right price. Zbiegnew Adamczyk showed the Property to Mr. Eleoff and his wife. Mr. Eleoff told him that he was interested and would be in touch to enter into negotiations.

[10] Mr. Eleoff states in his affidavit that on September 7, 2022, he and his interior designer met with Zbiegnew Adamczyk at the Property, and they did a walkthrough of the Property. According to Mr. Eleoff, they had extensive discussions regarding the proposed finishes for the yet to be completed house.

[11] On September 10, 2022, Mr. Eleoff went to the Property again and gave a letter of intent dated September 9, 2022 (“Letter of Intent”) to Zbiegnew Adamczyk who was working at the Property. The Letter of Intent was expressly non-binding. It included the following clauses:

This Document will establish the basic terms to be used in a future real estate contract for sale (the “Contract”) between the Seller and the Purchaser. The terms contained in this Document are not comprehensive and it is expected that additional terms may be added, and existing terms may be changed or deleted. The basic terms are as follows:

Non-Binding

1. This Document does not create a binding agreement between the Purchaser and the Seller and will not be enforceable. Only the Contract, duly executed by the Purchaser and the Seller, will be enforceable. The terms and conditions of the Contract will supersede any terms and conditions contained in this Document. The Purchaser and the Seller are not prevented from entering into negotiations with third parties with regard to the subject matter of this Document.

[12] The Letter of Intent mentioned a purchase price in the amount of $3.6 million, including a deposit in the amount of $150,000.000 to be paid on or before September 14, 2022. It contemplated that the purchaser would take possession of the Property on October 31, 2022. It also included the following a clause entitled “Terms and Conditions”:

9. The Purchaser will accept the Property once a) the construction has been completed, b) all property inspections have been completed and approved, c) all deficiencies identified by inspection pre-close have been completed and d) all additional features specified in a schedule to the purchase agreement have been delivered and installed.

• Completion of construction and features as agreed to between buyer and seller.

[13] Mr. Eleoff gave a handwritten note to Zbiegnew Adamczyk at the same time as the Letter of Intent. The note ended with the following statement: “Once we agree on terms, I will have my lawyer create the offer.”

[14] Zbiegnew Adamczyk asked Mr. Eleoff to direct future communications to Mr. Adamczyk. Mr. Eleoff’s evidence is that he was told that Mr. Adamczyk had full authority to negotiate the terms of the purchase of the Property on behalf of the owners.

3. Alleged oral agreement of September 14, 2022 and subsequent communications

[15] In his affidavit, Mr. Eleoff takes the position that the terms of an agreement to purchase the Property were agreed to orally on September 14, 2022, and reduced in writing by the exchange of e-mails from September 25 to 27, 2022.

[16] Mr. Eleoff states the following in his affidavit regarding the meeting on September 14, 2022:

On or about September 14, 2022, I met with Dave and Zbiegnew Adamczyk at the Property to negotiate the sale. At this meeting we agreed that the purchase price would be $3,900,000, a deposit of $150,000 would be held in trust by my lawyer, and paid when the parties had finalized the terms giving effect to the Agreement, and the closing date would be set for December 15, 2022, although we could have some flexibility in the event that there was some delay to obtaining City approval for occupancy. The delay was possible because the Defendants were awaiting final approval for the rear canopy. At the meeting, I discussed with Dave and Zbiegnew Adamczyk that the agreement was not conditional on approval by the City of the rear canopy as I would accept the original approved design. We further discussed that we would work cooperatively with respect to finishes to the Property as it was being completed.

[17] On September 16, 2022, Mr. Adamczyk and Mr. Eleoff exchanged e-mails regarding the stone selections for the kitchen and fireplace. On September 20, 2022, Mr. Eleoff went to the stone supplier in Mississauga to see the stone. Later that day, he sent an e-mail to Mr. Adamczyk stating: “saw the stone today and we agree that this is a great selection.”

[18] According to Mr. Eleoff, there was another meeting at the Property on September 19, 2022. His evidence on this point is as follows:

On or about September 19, 2022, I along with my designer had a site visit with Zbiegnew and Dave Adamczyk at the Property to review the work and to discuss the cosmetic work and finishes that remained. Given our agreement to purchase the Property, Zbiegnew and Dave agreed that for the remaining finishes they would provide my designer and I with what finishes they were contemplating, and we would provide our approval or specify any alternate selections. I also agreed that my designer would be available to provide any drawings and would be available for consultation at any time during the finishing process at my expense.

[19] On September 21, 2022, Mr. Eleoff sent the following e-mail to Mr. Adamczyk:

Hi Dave – I get the sense you and Ziggy are not that interested in selling since you are delaying getting this deal done. I’ve spent a lot of time on this, I have tabled a stellar offer with tons of flexibility for you, and I have incurred costs with my designer to help you figure out some important details. I’ve been completely transparent and forthcoming even with market conditions deteriorating by the minute and I have not involved my agent. If you think there will be a line up of buyers even if I disappear, then I wish you all the best. So here is my final position. We either agree on a deal today or I’m afraid I need to move on another property I’m interested in. If I don’t hear back from you today, our dealings are over. Best wishes.

[20] Mr. Adamczyk responded on the same day. His e-mail read as follows:

Hi Mark,

We appreciate your interest and time spent meeting with us and yes as discussed last week on site together we are very interested and serious in making a deal with you. We went through and reviewed together your initial letter of intent offer, and like we discussed there are factors that have to be finalized and put on paper so both sides are comfortable including the price, timing of closing, and etc. We went through the house earlier this week and we presented to you most of the finishing details that are done and/or to be done still (interior and exterior landscaping) and looks like we are mostly on the same page with all parties involved. On the private deal side without agency, we would like to get our lawyers involved for both parties to review and revise any changes that are to be made to your draft offer and real estate contract. We would like to work this out together and let me know next steps to finalize this preliminary agreement deal.

[21] Mr. Eleoff sent the following e-mail later on September 21, 2022:

Dave – I would like to get my lawyer drafting a formal offer. To do this we need to agree on a few things.

Closing:

• I am flexible on closing and we can make this contingent on all the work concluding.

• I understand the city may have some issue with the overhang so we can add this to the work concluding

Remaining work and selections:

• We can create a list together agreeing on the items that are to be completed and attach as a schedule, for example the mirror that Farid will spec etc

Post-closing support:

• I would like to have some level of comfort that anything that needs repairs etc over the next, say, 6-9 months post-closing will get done so my daughter doesn’t have to worry about it including the post-inspection work like burying the downpours and completing the driveway widening,

Price:

• I believe we agreed on a number?

There could be other items from your perspective so feel free to add/change/delete from above.

I’m sure the lawyers will add more but we can manage this process. I’m a fair guy looking for a win-win outcome. We won’t let the lawyers get too crazy – but that will take work!

[22] On September 22, 2022, Mr. Adamczyk sent an e-mail to Mr. Eleoff regarding light fixtures, “with links for the items that are ordered and ready”.

[23] On September 24, 2022, Mr. Eleoff, his wife, daughter and son-in-law met with Zbiegnew Adamczyk at the Property. Zbiegnew Adamczyk gave them a tour of the property to show its features. Mr. Eleoff states the following about what was discussed during the meeting:

Zbiegnew advised us that if there were any changes that he could reasonably accommodate that he would do so and complete any repairs after Samantha and Cordero [Mr. Eleoff’s daughter and son-in-law] moved in. We also discussed that the timing of occupancy may be an issue and I, along with my daughter and son in law, advised Zbiegnew that we were fine with the rear overhang being approved by the City as built or for it to be modified in accordance with the original approved City drawings. Zbiegnew commented to my daughter that she and her husband were very lucky to have such a beautiful home. Zbiegnew throughout this meeting referred to the Property as being owned by us.

[24] Mr. Eleoff denies that the purpose of the meeting was to see if his daughter liked the Property. According to Mr. Eleoff, the decision had already been made and the meeting was to show his daughter the Property and its features as it would be where she would be living with her husband.

[25] Also on September 24, 2022, Mr. Adamczyk met with Mr. Eleoff and his designer at the Property to walk through the house and all the finishes to be done or to be changed at their request. Mr. Eleoff states that the selection of the interior fixtures was confirmed at the meeting.

4. E-mails exchanged between September 25-29, 2022

[26] Between September 25 and 29, 2022, Mr. Eleoff and Mr. Adamczyk exchanged a number of e-mails.

[27] On September 25, 2022, Mr. Eleoff sent the following e-mail to Mr. Adamczyk:

Hi Dave – thank you to you and Ziggy for accommodating us yesterday. I enjoy working with you guys! Here is the list of terms I would like to give to my lawyer tomorrow to draft the offer. Call me today if you would like to discuss or clarify.

List of special items:

[Various terms regarding basement kitchenette, upper laundry room, cabinetry hardware, internal and external light fixtures, stone and finish, security system, sound system, rear overhang, driveway widening and downspout burial.]

Price $3.9M

Closing Dec 15/22 or sooner if mutually agreed to by buyer and seller

Deposit $200K held in trust for seller by buyers solicitor – $150k paid at closing with S50K warranty holdback (see below)

Warranty period 1 year – $50K down payment holdback – $25K released after 6 months – held in trust with buyers solicitor in favour of seller

Thanks Dave – call me to discuss and finalize…Mark

[28] Mr. Adamczyk sent the following e-mail in response:

I am confirming that I received your email earlier this morning outlining your special line items terms and conditions. I will have to go over all of those detailed terms with Ziggy and try to get back to you with an detailed email response with any of our thoughts/ revisions by tomorrow the latest. In the meantime please see attached exterior lighting fixtures sconces for the elevation walls at front and back of house. I have 5 of these in total and they were a special order to get as I waited a couple good months. The outstanding item like I mentioned is the ceiling mounted light fixture right above the front door in the canopy. I think it should be also something with matte black and led involved that can be still discussed and chosen,

[29] Mr. Eleoff responded: “Thanks Dave – I like that fixture a lot – let’s go with it.”

[30] Mr. Adamczyk sent his detailed response on September 26, 2022. He stated that he had reviewed the proposed terms with Zbiegnew Adamczyk and he inserted comments in red in Mr. Eleoff’s original e-mail. On September 27, 2022, Mr. Eleoff responded and inserted his comments in blue. He wrote “I think we are down to the final few items”. While the parties appeared to have agreed on most points, there was no agreement with respect to the upper laundry room, the warranty holdback, and the rear overhang. With respect to the latter, the parties agreed to consult their lawyers regarding this term and its potential impact on the closing date.

[31] There was also uncertainty in relation to the closing date. Mr. Eleoff had proposed the following in his first e-mail: “Closing Dec 15/22 or sooner if mutually agreed to by buyer and seller”. Mr. Adamczyk added the following comment in his response:

(We can add to this closing contingent on all the work concluding including the rear canopy issue? To have some flexibility with this closing date? Again might have to ask lawyers on this)

Mr. Eleoff wrote “Agreed” next to this comment in his next e-mail.

[32] On September 27, 2022, Mr. Adamczyk sent another e-mail to Mr. Eleoff in which he proposed terms with respect to the upper laundry room and the warranty holdback. He also wrote the following with respect to the rear overhang:

The rear canopy city revision issue has to be treated as an open line item we feel that may go beyond the closing date that has to be considered as a possibility (I saw your text will try to send you that just have to look for it)

[33] Mr. Eleoff responded on the same day. He agreed with what Mr. Adamczyk was proposing regarding the upper laundry room and the warranty holdback, and he stated as follows regarding the rear overhang:

I have my lawyer thinking about this – it is messy but we will find a way – I just don’t want this to somehow become my problem only as you can understand – we need to collaborate on a way forward – let’s see what the lawyers come up with – you should ask yours too

[34] Mr. Adamczyk responded that he would speak to his lawyer the following day.

[35] On September 28, 2022, Mr. Adamczyk sent to Mr. Eleoff “the rear canopy revision drawing as per request that has been submitted to the city for the revision approval.” Mr. Eleoff replied and wrote that his lawyer was “working on the offer”.

[36] On September 29, 2022, Mr. Adamczyk, Mr. Eleoff and Mr. Eleoff’s designer, Farid Hassani, exchanged e-mails regarding mirror drawings and cabinet hardware.

[37] On September 29, 2022, Mr. Adamczyk and Mr. Eleoff exchanged further e-mails about light fixtures. Mr. Adamczyk asked Mr. Eleoff for an update as to whether he could “make it out to check out the lighting fixtures at Union Lighting this weekend perhaps?” Mr. Eleoff responded as follows:

Hi Dave – yes we reviewed the lighting and Farid is consolidating our recommendations for the interior and we also selected the main hanging fixture – but I will show him these – the budget should not be impacted. My lawyer is drafting the offer but he is killing me with his pace! Should be done shortly – we’ve agreed to most everything so no surprises. Thanks for your patience. I will call you to discuss the timing for fixtures rather than emails. Talk shortly.

[38] Additional e-mails were exchanged regarding lighting options between Mr. Adamczyk, Mr. Eleoff and Mr. Hassani from September 30 to October 2, 2022. Mr. Adamczyk’s evidence during his cross-examination was that he was getting the buyer’s approval for the purpose of the presentation of an offer, not as part of any agreement.

[39] On September 30, 2022, Mr. Eleoff sent the following e-mail to Mr. Adamczyk:

Dave – what time can we meet tomorrow? I’d like to deliver the draft offer and we can discuss it – it aligns with what we have discussed so no surprises.

5. Offer delivered on October 1, 2022

[40] Mr. Eleoff, Mr. Adamczyk and Zbiegnew Adamzyk met on October 1, 2022 at the Property to review Mr. Eleoff’s offer. Mr. Eleoff went through and presented his terms and conditions.

[41] On the same date, Mr. Eleoff sent an e-mail to Mr. Adamczyk that attached the offer to purchase the Property on the OREA (Ontario Real Estate Association) standard Form 100 “Agreement of Purchase and Sale” (“Offer”). The Offer was irrevocable until 5 p.m. on October 7, 2023, and was to become null and void if not accepted by that time. The proposed purchase price was $3.9 million, and the proposed closing date was December 1, 2022, not December 15, 2022, as previously discussed. A deposit in the amount of $150,000 was payable upon acceptance by cheque payable to the vendors’ solicitor in trust.

[42] Schedule A to the Offer included a handwritten note that read as follows:

If COA [Committee of Adjustment] does not approve overhang, then seller will change overhang to reflect originally approved design at sellers expense. Buyer acknowledges that COA approval and rework may not occur until after closing. Seller will use commercially reasonable efforts to seek approval including by way of appeal process with COA.

Buyer Sellers solicitors will discuss above language and add/change/delete language as appropriate to reflect spirit and intent

Originally approved by COA design to be attached here as Schedule E.

[43] Schedule C to the Offer included terms that were not previously discussed by the parties (e.g., bathroom mirrors, glass surround on backyard deck).

[44] Mr. Adamczyk and Zbiegnew Adamczyk informed Mr. Eleoff that their lawyer would have to review the Offer.

6. Communications in October and November 2022

[45] On October 2, 2022, Mr. Eleoff sent the following e-mail to Mr. Adamczyk:

Hi Dave – I’ve communicated with my lawyer (copied here) and he is on standby awaiting a time to connect with your lawyer to discuss how best to handle the overhang issue. Gerry’s contact information is also available in the draft offer. Thanks, Mark

[46] On October 3, 2022, Mr. Adamczyk sent an e-mail to Mr. Hassani asking him to consult with Mr. Eleoff regarding cabinet hardware as Mr. Adamczyk was going to place the order on that day.

[47] Also on October 3, 2022, Mr. Adamczyk forwarded Mr. Eleoff’s e-mail and the Offer to the Defendants’ real estate lawyer. His e-mail to the Defendants’ lawyer also provided information regarding the rear overhang issue. Mr. Adamczyk’s e-mail read as follows:

Please see attached the draft offer as we discussed for the [Property] presented by the buyer Mark Eleoff and prepared by his lawyer Gerald Wise, which are both cc’d on this email. If we refer to schedule A the main issue we have still here is with Clause term #2 which is dependant on clause term #9. In regards to clause term #9, we have applied for the rear canopy overhang revision to the building department of the city of Toronto and not the Committee of Adjustment. From my understanding with discussion with my architect is Once the building department examiner reviews this revision drawing he can either accept it or turn it over to the Committee of Adjustment for approval with a scheduled future hearing date assigned. Both Parties agree that the rear canopy overhang has to simply remain as is if approved by the city building department or be revised back to the original permit drawings to be done by the seller which is just smaller In the overall width size. Once we get this issue resolved with the city then we can pass our structural faming inspection and have the final interior/exterior inspections completed along with the occupancy.

The unknown factor here is the time we may or may not need that may go past the closing date in regards to the items noted above. As discussed with Mark, we can propose lets say 30 day extension increments that we revisit after each cycle if we don’t get the response or approval from city along with the final inspections done by the closing date? If Jeremy [Defendants’ real estate lawyer] you can review these terms and come up with some additional term in regards to this or communicate along with Gerald [Mr. Eleoff’s real estate lawyer] on this topic so were all on the same page to get this resolved that would be great.

[48] On October 6, 2022, Mr. Eleoff sent an e-mail to Mr. Adamczyk stating: “Are we getting any closer to getting this done?” Mr. Adamczyk responded as follows on the same day:

I am still waiting on my lawyers review response of the draft offer hopefully this gets done today and sent over to you. Will be in touch later today.

[49] On October 6 and 7, 2022, Mr. Eleoff and Mr. Adamczyk exchanged e-mails about the terms concerning the rear overhang and the warranty holdback. They also agreed to change the closing date to December 19, 2022. Mr. Eleoff stated the following in the last e-mail in the chain:

That’s good news Dave that the city is reviewing the overhang issue. Hopefully this gets resolved quickly. Gerry and I reviewed the revisions from your lawyer. Apart from some minor changes it looks like we are good. Expect from Gerry the Schedule and assuming you’re all good we can move to get the agreement finalized. Dec 19 closing is still good. I look forward to hearing back from you.

[50] On October 11, 2022, Mr. Eleoff’s lawyer sent revised terms to the Defendants’ lawyer. Mr. Eleoff forwarded the e-mail to Mr. Adamczyk and wrote as follows:

Dave – see attached ... hopefully this gets us there – I’ve worked on this with Gerry and I believe this is exactly what we discussed. Call me to discuss if there are any questions. Hopefully we can get the transaction done in the next day or two ... Mark

[51] Mr. Adamczyk responded that he was in the process of reviewing the terms and would be in touch the following day.

[52] On October 17, 2022, the City of Toronto approved the rear overhang as built. Mr. Adamczyk told Mr. Eleoff about the City’s decision during a subsequent telephone conversation.

[53] Mr. Adamczyk states in his affidavit that on October 26, 2022, he told Mr. Eleoff during a telephone call that it did not appear that they were going to be able to reach an agreement regarding the purchase of the Property and he informed Mr. Eleoff that other parties were interested. Mr. Eleoff denies that this conversation occurred. His position is that the parties had reached an agreement for the purchase of the Property and were conducting themselves accordingly.

[54] On October 27, 2022, Mr. Eleoff sent revised terms to Mr. Adamczyk. He stated as follows in his e-mail:

Dave – see the attached and let me know if this works so we can update the offer. Also, let’s schedule some time on Saturday or Sunday (let me know what works for you guys) to create the updated schedule C – based on what we discussed the items in this sched should be minimal.

[55] Mr. Adamczyk’s evidence is that the revised terms and conditions sent by Mr. Eleoff were still unacceptable. In his affidavit, he states that he called Mr. Eleoff on October 28, 2022 to let him know that. According to Mr. Adamczyk, Mr. Eleoff said that this was the best he could do. This is denied by Mr. Eleoff.

[56] Mr. Eleoff states the following in his affidavit with respect to his conversation with Mr. Adamczyk on October 28, 2022:

The parties were operating in good faith and in accordance with the Agreement until on or about October 28, 2022, whereby the Defendants improperly terminated the Agreement. I received a telephone call from Dave Adamczyk who advised that the Defendants had received an offer for $600,000 more than our agreed price for the purchase of the Property and that, if I was not prepared to meet it, they would no longer close the transaction as we had agreed upon. I advised Mr. Adamczyk that we had an Agreement and that I was prepared to honour the terms of the Agreement and that any attempt to resile from their obligations were improper.

[57] Mr. Adamczyk denies ever telling Mr. Eleoff that the Defendants sold the Property for more than $600,000.00 over what Mr. Eleoff was offering. However, Mr. Adamczyk acknowledges having disclosed the existence of a competing offer to Mr. Eleoff, “out of fairness”.

[58] The Defendants accepted another offer for the Property on October 28, 2022 for $4.35 million. The transaction closed on December 15, 2022.

[59] Mr. Eleoff never paid a deposit. His position is that the deposit was to be deposited in his lawyer’s trust account only upon finalizing the wording giving effect to the terms of the agreement. I note that this is not what the Offer states.

[60] On October 31, 2022, Mr. Eleoff’s litigation counsel sent a letter to the Defendants, which read as follows:

I am litigation counsel for Mark Eleoff and I have been provided with the communications between the parties with respect to the purchase of the Property.

As you are aware, on September 26, 2022, by written communication via e-mail the parties agreed to the fundamental terms of the agreement of purchase and sale for the Property for a purchase price of $3,900,000 with a closing date of December 15, 2022. (“Agreement”).

Subsequent to the Agreement, the buyer and seller proceeded on a good faith basis to give effect to the September 26 2022 Agreement by exchanging drafts of a formal Agreement of Purchase and Sale which were finalized by their respective Solicitors and awaiting execution. In reliance on the Agreement and the parties good faith efforts to give effect to the Agreement, Mr. Eleoff retained a designer and expended significant resources in contemplation of the closing of the Agreement.

I have been advised by my client that, on or about October 28, 2022, he received a telephone call from David Adamczyk who advised that another offer had been received for a higher purchase price and that the Vendors of the Property would be dealing with that offer.

You may accept this letter as formal notice that Mr. Eleoff is demanding that the parties complete the Agreement. In the event that the Vendors breach the Agreement, my instructions are to commence litigation and my client will avail itself of all of his rights and remedies available in law and/or equity including, but not limited to, obtaining a certificate of pending litigation preventing the sale of the Property to any third party.

Under the circumstances, I require your immediate confirmation that the Vendors are prepared to complete the Agreement of Purchase and Sale by the closing date.

Govern yourselves accordingly,

[61] The Defendants’ lawyer responded on November 1, 2022. Among other things, he stated that: (a) the e-mail communications did not form a valid and binding agreement; (b) Mr. Adamczyk did not have the authority to accept any agreement on behalf of the registered owners; (c) the parties did not agree as to which party would be responsible for paying the HST; and (d) Mr. Eleoff had failed to deliver meaningful consideration.

[62] On November 8, 2022, Mr. Eleoff’s daughter and her husband purchased another property for the sum of $3,290,000.00, which is $610,000.00 less than the price offered to purchase the Property.

7. The action

[63] This action was commenced on November 14, 2022. In the Statement of Claim, Mr. Eleoff claims damages in the amount of $1 million. Paragraphs 8-10 of the Statement of Claim read as follows:

8. After extensive negotiations, on or about September 26 and 27, 2022 by exchange of e-mails, the Plaintiff and the Vendors, through their Agent Dave Adamczyk, entered into an Agreement for the sale of the Property (“Agreement”). The Agreement contained express and implied terms including, but not limited to, the following: (a) The purchase price was $3,900,000.00; (b) The closing date would be December 15, 2022 or amended as necessary for occupancy to be granted; (c) The parties would cooperate in having their respective lawyers develop language to deal with the rear overhang canopy that was awaiting City of Toronto approval; (d) The parties would act in good faith and deal fairly to complete the terms of the Agreement; (e) The basement kitchenette and upper laundry room would be completed as a builder upgrade; (f) The Plaintiff would be able to select cabinetry hardware, light fixtures, countertops, driveway widening, downspout burying and certain design items that had yet not been completed; (g) The parties would have their solicitors draft a formal agreement giving effect to the terms of the Agreement acting honestly and in good faith; (h) Upon completion of formalizing the Agreement, the Plaintiff would provide his solicitor with a deposit of $200,000.00 to be released partially upon closing and the remainder after the expiration of a warranty period.

9. By e-mail on or about October 3, 2022, Dave Adamczyk on behalf of the Vendors confirmed the Agreement among the Parties for the sale of the Property. Mr. Adamczyk confirmed that all of the terms have been agreed to and with respect to City of Toronto approval of the rear canopy it would either be approved as is or the Vendors would revert it back to the approved City of Toronto drawings so that the necessary inspections could be undertaken by the City to have occupancy issued.

10. Immediately after the parties entered into the Agreement on September 26 and 27, 2022, they took various actions to perform their obligations under the Agreement including, but not limited to, the following: (a) The Plaintiff retained a designer to provide drawings and specifications and selection of materials; (b) The Plaintiff provided the mirror requirements for all 5 bathrooms; (c) The Plaintiff provided the drawings for the completion of the master bathroom and had his designer on site to meet with the Vendors to confirm the design and specifications; (d) The Plaintiff’s designer attended on site to modify structural elements for the shared bathroom design; (e) The Plaintiff selected all of the lighting and fixtures; (f) The Plaintiff selected various paint colours; (g) The Plaintiff selected the hardware for doors, panelled fridge and cabinetry: (h) The Vendors had the Plaintiff attend at the supplier to select stone for the counters which were installed at the Property; (i) The Vendors constructed the driveway using concrete in accordance with the Plaintiff’s request and the Plaintiff provided the exterior colour and positioning of interlock; (j) The Plaintiff provided the final location of the birch tree in the rear yard; (k) The Vendors applied to the City for approval of the rear canopy to meet the scheduled closing date; (l) The parties retained lawyers; (m) Such further and other acts as will be disclosed in the course of the action and disclosed prior to trial.

[64] Mr. Eleoff pleads that he has suffered damages, but no particulars are given. He also makes the general allegation that “the Defendants have been unjustly enriched with a corresponding deprivation to the Plaintiff and without juristic reason.”

[65] The Defendants’ Statement of Defence is dated December 22, 2022. Among other things, the Defendants deny that a binding agreement was ever reached, and they rely on the Statute of Frauds, R.S.O. 1990, c. S.19 as a complete defence.

8. Damages

[66] Counsel for the parties exchanged e-mails in January 2023. In response to a question asked by the Defendants’ lawyer regarding the damages claimed by Mr. Eleoff, Mr. Eleoff’s lawyer stated the following:

My client is claiming damages, in part, for the value of the property in excess to the agreed upon purchase price. The last communication between our respective clients is that the Defendants received an offer to purchase the Property for approximately $600,000 more which led to your clients breaching the Agreement.

[67] In his affidavit, Mr. Eleoff states that as a result of the termination by the Defendants, he had to find and purchase another property on an expedited basis to close in December 2022. His evidence is that given the rush, he “purchased a property in a less desirable area and paid an amount greater than market value by approximately $400,000.00.”

[68] During his cross-examination, Mr. Eleoff stated that in addition to the above, he was also seeking damages with respect to the expenses incurred in relation to the Property, including designer expenses.

[69] The last two claims (overpayment for the property that was purchased after the termination of the alleged agreement to purchase the Property and expenses) are in the alternative to the first claim (difference between the value of the Property – or the price at which the Property was sold – and the price that Mr. Eleoff had offered).

[70] Given my conclusions below, I do not need to deal with the issue of damages. However, I note that there is no admissible evidence before me with respect to: (a) Mr. Eleoff’s claim of overpayment for the property that was purchased after the negotiations regarding the Property ended; and (b) Mr. Eleoff’s expenses, including designer-related expenses. With respect to (a), I also note that none of the affiants are qualified to provide opinion evidence regarding the value of the property that was purchased. Further, the record before me suggests that Mr. Eleoff was not the buyer of the other property and that, instead, his daughter and her husband were. As for Mr. Eleoff’s main claim for damages, there is no admissible evidence before me regarding the value of the Property, and there are a number of issues with Mr. Eleoff’s position that he should receive damages – or disgorgement – in the amount representing the difference between the price at which the Property was sold to a third party and the price that Mr. Eleoff had offered. However, as stated above, I do not have to deal with these issues.

B. Discussion

1. General principles applicable on a motion for summary judgment

[71] 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: (a) provides the court with the evidence required to adjudicate the dispute fairly and justly, and (b) is a timely, affordable and proportionate procedure. See Hryniak v. Mauldin, 2014 SCC 7 at para. 66 (“Hryniak”).

[72] 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.

[73] 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.

[74] 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 (“Sanzone”) and Kinectrics Inc. v. FCL Fisker Customs & Logistics Inc., 2020 ONSC 6748 at para. 35.

[75] Each party must put its best foot forward to establish whether or not there is a genuine issue requiring a trial: see Ramdial v. Davis, 2015 ONCA 726 at para. 27 (“Ramdial”). The court is entitled to assume that the record contains all the evidence that the parties would present at trial: see Toronto-Dominion Bank v. Hylton, 2012 ONCA 614 at para. 5 and Broadgrain Commodities Inc. v. Continental Casualty Company, 2018 ONCA 438 at para. 7. Thus, if the moving party meets the evidentiary burden of producing evidence on which the court could conclude that there is no genuine issue of material fact requiring a trial, the responding party must either refute or counter the moving party’s evidence or risk a summary judgment: see Soliman v. Bordman, 2021 ONSC 7023 at para. 133. A responding party has an obligation to “lead trump or risk losing” and cannot rely on allegations or denials in the pleadings; it must present evidence of specific facts demonstrating that there is a genuine issue requiring a trial: see Ramdial at paras. 28 and 30, and Sylvite v. Parkes, 2020 ONSC 5569 at para. 16. A self-serving affidavit is not sufficient in itself to create a triable issue in the absence of detailed facts and supporting evidence: see Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 432 at para. 31 (“Gordon Capital”).

[76] The principles governing the admissibility of evidence on a summary judgment motion are the same as those that apply at trial, save for the limited exception of permitting an affidavit made on information and belief found in rule 20.02(1) of the Rules of Civil Procedure. See Sanzone at para. 15.

2. General principles regarding formation of contract

[77] A contract is formed where there is an offer by one party accepted by the other with the intention of creating a legal relationship, and supported by consideration. Contract formation is determined objectively. This means that in determining whether the parties’ conduct met the conditions for contract formation, the court is to examine how each party’s conduct would appear to a reasonable person in the position of the other party. See Ethiopian Orthodox Tewahedo Church of Canada St. Mary Cathedral v. Aga, 2021 SCC 22 at para. 35 (“Aga”).

[78] The requirement of intention to create legal relations is met when parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract. This requirement can be understood as an aspect of valid offer and acceptance, in the sense that a valid offer and acceptance must objectively manifest an intention to be legally bound. See Aga at para. 36.

[79] Where the understanding or intention of the parties is that their obligations are to be deferred until a formal contract has been approved and executed, any preliminary agreement as to the terms of the contract is not enforceable because the parties do not have an intention to be legally bound at that stage. See Alkin Corporation v. 3D Imaging Partners Inc., 2020 ONCA 441 at paras. 5-10.

[80] Like the test for contract formation, the test for an intention to create legal relations is objective. The question is not what the parties subjectively had in mind but whether their conduct was such that a reasonable person would conclude that they intended to be bound. In answering this question, courts are not limited to the four corners of the purported agreement but may consider the surrounding circumstances. See Aga at para. 37.

[81] To have an enforceable contract, the parties must have reached an agreement as to all essential terms. Whether terms will be considered essential depends on the nature of the transaction, the context in which the agreement is made, and the parties’ interest. See United Gulf Developments Ltd. v. Iskandar, 2008 NSCA 71 at para. 14 and Ruparell v. J.H. Cochrane Investments Inc., 2020 ONSC 7466 at paras. 24-25; aff’d by 2021 ONCA 880.

3. Application to this case

i. Whether this is an appropriate case for summary judgment

[82] I find that this is an appropriate case for summary judgment. The documentary evidence, including the e-mails exchanged by the parties, is objective and reliable and, in large part, establishes what happened. As noted above, contract formation is determined objectively and based on how each party’s conduct would appear to a reasonable person in the position of the other party. Therefore, the parties’ subjective beliefs and uncommunicated thoughts are irrelevant.

[83] While the parties had communications that were oral and undocumented (e.g., telephone conversations and meetings at the Property), and while the evidence of the parties is not always consistent as to the contents of such communications, I find that any inconsistency is insufficient to create a genuine issue requiring a trial. For instance, what was actually said at the end of the parties’ “relationship” in late October 2022 does not matter if no contract had been previously concluded and if the Defendants were not bound to sell the Property to Mr. Eleoff. See J.M.B. Cattle v Kaufman, 2015 ONSC 7372 at para. 98 (“J.M.B.”). As for the earlier meetings and conversations, they are followed by communications in writing that objectively show whether the parties conducted themselves as if they had concluded a binding agreement or not. Unsupported allegations about what was said during an oral conversation that are inconsistent with multiple subsequent written communications constitute self-serving allegations that are insufficient in themselves to create a triable issue: see Gordon Capital at para. 31.

[84] Thus, I conclude that there is sufficient evidence before the court to adjudicate fairly and justly the dispute between the parties, and that it is appropriate to make dispositive findings on this motion. Providing a timely, affordable and proportionate procedure to the parties is also an important consideration in this case.

ii. Whether a binding agreement was concluded

[85] I reject Mr. Eleoff’s position that the terms of an agreement of purchase and sale were agreed to orally on September 14, 2022. This position is not pleaded in the Statement of Claim. Further, and in any event, it is clearly contradicted by the written communications between the parties.

[86] Mr. Eleoff’s e-mail dated September 21, 2022 clearly shows that no binding agreement had been reached at that time. In this e-mail, Mr. Eleoff states the following, among other things:

a. “I get the sense you and Ziggy are not that interested in selling since you are delaying getting this deal done.”

b. “I have tabled a stellar offer with tons of flexibility for you”. [Emphasis added.]

c. “We either agree on a deal today or I’m afraid I need to move on another property I’m interested in.”

d. “If I don’t hear back from you today, our dealings are over.”

[87] These statements show that as of September 21, 2022, Mr. Eleoff was not conducting himself as if a deal had already been reached between the parties. It is equally clear from Mr. Adamczyk’s response of the same date that a deal had not yet been reached. Among other things, Mr. Adamczyk wrote the following:

a. “[W]e are very interested and serious in making a deal with you.”

b. “We went through and reviewed together your initial letter of intent offer, and like we discussed there are factors that have to be finalized and put on paper so both sides are comfortable including the price, timing of closing, and etc.”

c. “On the private deal side without agency, we would like to get our lawyers involved for both parties to review and revise any changes that are to be made to your draft offer and real estate contract.”

d. “We would like to work this out together and let me know next steps to finalize this preliminary agreement deal.”

[88] This e-mail does not suggest in any way that the parties considered that they had already made a deal or that they had created binding legal obligations. Among other things, the parties repeatedly referred to an offer, not to an agreement.

[89] The fact that no agreement was reached on September 14, 2022 is further confirmed by the second e-mail sent by Mr. Eleoff on September 21, 2022. Among other things, he wrote the following:

a. “I would like to get my lawyer drafting a formal offer.” [Emphasis added.]

b. “To do this we need to agree on a few things.”

c. The “few things” that needed to be agreed upon included closing.

d. With respect to price, Mr. Eleoff wrote: “I believe we agreed on a number?” If in fact a binding deal had been reached, there would be no need for a question mark in relation to the purchase price.

[90] The statements allegedly made by Zbiegnew Adamczyk on September 24, 2022 during the walkthrough of the Property are general and not related to specific terms. They cannot, by themselves, create a binding contract, which is not supported by any of the written communications between the parties.

[91] I note as well that Mr. Eleoff stated the following in the first paragraph of his e-mail dated September 25, 2022: “Here is the list of terms I would like to give to my lawyer tomorrow to draft the offer.” Again, Mr. Eleoff was referring to an offer, not an agreed-upon and binding deal. Moreover, it is noteworthy that in his letter dated October 31, 2022 to the Defendants, Mr. Eleoff’s lawyer took the position that the parties had agreed to the fundamental terms of an agreement on September 26, 2022, not on September 14, 2022, which is consistent with what is pleaded in the Statement of Claim.

[92] I also reject Mr. Eleoff’s position that any binding agreement was reached in the e-mails exchanged from September 25 to 27, 2022. Among other things, there was no agreement reached with respect to the closing date, which issue was closely related to the issue of the rear overhang. It is clear from Mr. Adamczyk’s e-mails and Mr. Eleoff’s response that the parties wanted to have the input of their lawyers on this issue.

[93] I agree with the Defendants that since the Property was still under construction, a more detailed contract, with more essential terms, was required compared to a more typical agreement of purchase and sale of a completed property. I do not need to decide in this case which terms were essential in light of the nature of the transaction, the context in which the agreement was made, and the parties’ interests. However, at a minimum, the closing date was an essential term, and the parties in this case never reached an agreement on terms that were sufficiently certain regarding the closing date. See J.M.B. at para. 39. This is clear from the comments inserted by Mr. Adamczyk in his e-mail dated September 26, 2022 and his e-mail dated October 3, 2022 to the Defendants’ lawyer.

[94] The conduct of the parties after the exchange of e-mails of September 25-27, 2022 does not support the conclusion that the parties considered that they had reached a binding agreement. This is confirmed by the fact that Mr. Eleoff continued to refer to the presentation of an offer in the days following the exchange of e-mails. He did so in his e-mails dated September 29 and 30, 2022.

[95] In his reply affidavit, Mr. Eleoff purports to explain what he meant when he used the word “offer” in his various communications. This evidence is irrelevant and inadmissible. As stated above, the test for contract formation and the intention to create legal relations is objective. What Mr. Eleoff may have thought is irrelevant if it was not shared with the vendors.

[96] The Offer also confirms that there was no agreed-upon binding deal as of October 1, 2022. If Mr. Eleoff believed that the parties had reached a binding agreement, there would have been no need for the term that the Offer was to become null and void if it was not accepted before 5 p.m. on October 7, 2022. Further, the terms included in the Offer were not the same as the terms previously discussed between the parties. Among other things, the closing date set out in the Offer was December 1, 2022, not December 15, 2022. The term regarding the deposit was also different.

[97] In addition to the foregoing, I find that, more generally, the communications of the parties do not show an intention to create a legally binding relationship. It is my view, based on the evidence, that the understanding and intention of the parties in this case was, from the beginning of their interactions, that their obligations were to be deferred until a formal contract had been approved and executed, and that any preliminary agreement as to the terms of the contract was not enforceable because the parties did not have an intention to be legally bound at that stage.

[98] This conclusion is supported by the following:

a. The Letter of Intent that Mr. Eleoff gave to Zbiegnew Adamczyk on September 10, 2022 stated that it was non-binding and it provided that only the future real estate contract for sale, duly executed by the purchaser and the sellers, would be enforceable.

b. The handwritten note that Mr. Eleoff gave to Zbiegnew at the same time as the Letter of Intent stated that Mr. Eleoff would have his lawyer create an offer once they agreed on terms.

c. In his e-mail dated September 21, 2022, Mr. Adamczyk stated: “We went through and reviewed together your initial letter of intent offer, and like we discussed there are factors that have to be finalized and put on paper so both sides are comfortable including the price, timing of closing, and etc.” [Emphasis added.]

d. Mr. Adamczyk also wrote the following in the same e-mail: “On the private deal side without agency, we would like to get our lawyers involved for both parties to review and revise any changes that are to be made to your draft offer and real estate contract.” [Emphasis added.]

e. The Offer provided by Mr. Eleoff on October 1, 2022 included a handwritten note stating that the lawyers “will discuss above language and add/change/delete language as appropriate to reflect spirit and intent”. The fact that the vendors did not want to be bound before getting their lawyers’ input is confirmed by Mr. Adamczyk’s e-mail dated October 3, 2022 to the Defendants’ real estate lawyer in which Mr. Adamczyk was asking for the lawyer’s assistance with respect to the issue of the closing date.

f. In his e-mail dated October 6, 2022, Mr. Adamczyk referred to the Offer as the “draft offer” and stated that he was waiting on his lawyer’s review and response.

g. In his e-mail dated October 27, 2022, more than two weeks after Mr. Eleoff sent revised terms to which the Adamczyks had yet to respond in writing, Mr. Eleoff sent further revised terms to Mr. Adamczyk and stated: “let me know if this works so that we can update the offer.” [Emphasis added.] Again, in the face of the Adamczyk’s silence and delay, Mr. Eleoff did not take the position that there already was a binding agreement and kept referring to an “offer”.

h. Not once during all of the exchanges and communications about the draft terms did Mr. Eleoff took the position that there was already an agreement in place between the parties. He only did so in writing through his lawyer after the Defendants decided not to sell the Property to him. He also alleges having done so orally on the phone on October 28, 2022 after Mr. Adamczyk informed him that the Defendants had received another offer.

[99] I also note that in his e-mail dated October 11, 2022, Mr. Eleoff expressed his hope that the parties could “get the transaction done in the next day or two”. Since he could not have been talking about the closing of the transaction, he had to be referring to an agreement being entered into, which shows again that no transaction/deal had been entered into. This is consistent with Mr. Eleoff’s repeated use of the word “offer”, instead of agreement, throughout the parties’ relationship.

[100] Mr. Eleoff argues that he would not have incurred expenses with respect to the Property had a binding agreement not been in place. Among other things, he states the following in his affidavit:

In anticipation of closing on the sale for the purchase of the Property, Dave, Zbiegnew and I agreed that I would retain a designer at my expense to provide material selections, complete designs and develop drawings in order to complete the Property. I would not have done so absent the Agreement.

[101] Mr. Eleoff does not specify when exactly he retained the designer. However, he also states earlier in his affidavit that he did a walkthrough of the Property with his designer and Zbiegnew Adamczyk on September 7, 2022, just a few days after seeing the Property for the first time and at least one week before any agreement is alleged to have been reached. Thus, it is clear from Mr. Eleoff’s own evidence that he had retained a designer prior to any alleged agreement.

[102] Further, and in any event, I generally agree with the Defendants’ submission that all documented efforts that Mr. Eleoff alleges were in part performance of a binding agreement were in fact attempts by Mr. Eleoff to prepare a final offer. Again, because the Property was still under construction, a more detailed contract/offer was required, especially if the buyer wanted to have input with respect to the items that remained to be completed at the Property. The fact that the Adamczyks were having discussions with Mr. Eleoff about finishes and other issues while they were trying to agree on contractual terms simply shows that the Adamczyks were negotiating in good faith and trying to accommodate Mr. Eleoff’s preferences in the anticipation that a binding agreement would be reached.

[103] Given my conclusion that the conditions for contract formation were not met in this case, I find that there is no genuine issue requiring a trial as to whether a binding contract was formed, and I do not need to consider the issues raised under the Statute of Frauds.

iii. Unjust enrichment

[104] In my view, there is no merit to the Plaintiff’s claim of unjust enrichment.

[105] To establish unjust enrichment, a claimant must show an enrichment, a corresponding deprivation, and the absence of a juristic reason: see Sirius Concrete Inc. (Re), 2022 ONCA 524 at para. 18 and Moore v. Sweet, 2018 SCC 52 at para. 37 (“Moore”).

[106] In this case, Mr. Eleoff’s position with respect to unjust enrichment is premised on the existence of an agreement of purchase and sale which, as set out above, has not been established. Further, there is no evidence that something of value, i.e., a tangible benefit, passed from Mr. Eleoff to the Defendants. See Moore at para. 41.

[107] Therefore, there is no genuine issue requiring a trial with respect to the Plaintiff’s claim for unjust enrichment.

C. Conclusion

[108] In light of the foregoing, the Defendants’ motion for summary judgment is granted and the action is dismissed.

[109] If costs cannot be agreed upon, the Defendants shall deliver submissions of not more than three pages (double-spaced), excluding the costs outline, by June 17, 2024. The Plaintiff shall deliver his responding submissions (with the same page limit) by June 28, 2024. The submissions of all parties shall also be sent to my assistant by e-mail and uploaded onto CaseLines.

Vermette J. Date: June 3, 2024