Hunter's Square Development Inc. v. 351658 Ontario Ltd.

[Indexed as: Hunter's Square Development v. 351658 Ontario Ltd.]

62 O.R. (3d) 302

[2002] O.J. No. 4694

Docket Nos. C38523

Court of Appeal for Ontario,

Doherty, Austin and Charron JJ.A.

December 9, 2002

Contracts -- Formation of contract -- Statute of Frauds -- Memorandum in writing -- Part performance -- Developer suing to enforce alleged agreement in writing -- Part performance -- Developer suing to enforce alleged agreement for purchase of building lots -- Action dismissed on motion for summary judgment -- Plaintiff failing to show formation of contract -- Statute of Frauds not satisfied -- Statute of Frauds, R.S.O. 1990, c. S.19, s. 4.

Sale of land -- Agreement of purchase and sale -- Formation of contract -- Statute of Frauds -- Memorandum in writing -- Part performance -- Developer suing to enforce alleged agreement in writing -- Part performance -- Developer suing to enforce alleged agreement for purchase of building lots -- Action dismissed on motion for summary judgment -- Plaintiff failing to show formation of contract -- Statute of Frauds not satisfied -- No part performance -- Statute of Frauds, R.S.O. 1990, c. S.19, s. 4.

Sale of land -- Specific performance -- Uniqueness -- Developer suing for specific performance of alleged agreement for purchase of lands -- [page303] Claim for specific performance dismissed on motion for summary judgment -- Lands not unique -- Plaintiff not entitled to specific performance.

Sale of land -- Specific performance -- Certificate of pending litigation -- Developer suing for specific performance of alleged agreement for purchase of lands -- Court exercising discretion to discharge certificate of pending litigation -- Courts of Justice Act, R.S.O. 1990, c. C.43, s. 103(6).

NOTE: An appeal of the judgment of the Superior Court of Justice (Pepall J.), reported at 2002 49491 (ON SC), 60 O.R. (3d) 264, to the Court of Appeal for Ontario was dismissed on December 9, 2002. The endorsement of the court is as follows:

Martin Teplitsky, Q.C., and Stephen A. Brunswick, for appellant. Kenneth Prehogan and John O'Sullivan, for respondent 351658 Ontario Ltd. W. Andrew McLauchlin and Jody K. Becker, for respondent 795208 Ontario Ltd.

[1] Hunter's Square ("Hunter") appeals from a summary judgment dismissing a claim for specific performance of an alleged agreement for the sale of land by the respondents to Hunter. The central issue is whether such an agreement existed.

[2] The property was land ready for development near Brampton, Ontario, having a value in excess of $40 million. There is no doubt the respondents wanted to sell it. They prepared a draft agreement for the purpose and distributed it to real estate agents in the area.

[3] Although a real estate agent participated in the negotiations, no agreement signed by the parties resulted, as required by the Real Estate and Business Brokers Act, R.S.O. 1990, c. R.4, s. 36. Nor was the signature requirement of the Statute of Frauds of Ontario met. It is common ground however, that extensive negotiations took place on October 18 and 23, 2001.

[4] Vital to the appellant's case is the answer to the question whether those involved in the negotiations on behalf of the vendors were authorized to conclude an agreement with the buyer or whether their authority was limited to simply negotiating the many aspects of the transaction subject to final acceptance by the principals of the vendor companies. Hunter says the negotiators representing the respondent corporations had authority to conclude an agreement. The respondents deny this.

[5] The principal of 351658 was Kaneff and of 795208, Graham. There is no suggestion that either ever indicated expressly to Hunter that their negotiators had authority to conclude any transaction. In fact, the first item of business was the price. Neither Kaneff nor Graham was present at the October 18 meeting but McKnight, a vice-president of 351658, left the negotiations from time to time to consult with them. Eventually agreement was reached on the price. McKnight then returned to the negotiations. He was authorized by both principals to continue the discussions. [page304]

[6] Kaneff and Graham took no further part in that meeting or the subsequent one on October 23. McKnight participated on behalf of the respondents together with Pina Grella. Hunter was represented by Libfeld and Cymbalista, its principals.

[7] The transaction was not simple or straightforward. The price tendered was $44 million. The price agreed upon was $45,155,650, with a take-back mortgage for a substantial portion of that price. The vendors were not simply to sell the land and then disappear from the scene, but were to have a continuing relationship with the purchaser. The relationship was to include installation of services. The offer as drafted by the vendors contained provisions respecting soil conditions, as much of the area was filled land.

[8] The parties therefore had a good deal to discuss. In the result, negotiations which had begun on October 18, 2001, continued on the 23rd. The respondents then abruptly terminated the discussions. This action was brought and a certificate of pending litigation was secured ex parte and registered against the title.

[9] In our view, Hunter can succeed only if McKnight or Grella had actual or, alternatively, ostensible authority to represent both vendors and to conclude an agreement. This "ostensible authority", if it exists, must arise by way of representations from the principals, in this case Kaneff and Graham, to Hunter. This is made clear by the decision in this court in CMLQ Investors Co. v. Cajary Building Corp., [1998] O.J. No. 5455 (Quicklaw) (Gen. Div.) at para. 15 per Cullity J.:

It follows that, before agency by estoppel can arise, the conduct of the alleged principal must be such as to give rise to an implied representation that another person has authority to do acts, make agreements or enter into transactions on his or her behalf. The representation of authority must, of course, extend to the kind of acts, agreements or transactions that are in question. It is also clear that the implied representation must be that of the principal and not merely that of the alleged agent.

This decision and that principle was affirmed by this court ((1999), 1999 3797 (ON CA), 127 O.A.C. 284 at pp. 285-86).

[10] Hunter argues that both McKnight, the vice-president of 351658, and Grella, an outsider in the sense that she was not an officer, director or employee of either vendor, had both actual and ostensible authority to conclude a deal with Hunter. The evidence is crystal clear that there was no such actual authority. It is also clear that there were no representations or communications of any sort by Kaneff or Graham or their companies to Hunter, to provide any foundation for a finding of ostensible authority.

[11] Hunter lists 17 matters in para. 10 of its factum, on which it relies for the proof of ostensible authority. None of [page305] them, either individually or collectively, supports a finding of ostensible authority.

[12] In our view, the motion judge was correct in concluding that there was no triable issue. She made many other findings but this conclusion is sufficient to dispose of this appeal. It was within the discretion of the motion judge to grant partial summary judgment. We are not persuaded that she erred in doing so.

[13] The appeal is therefore dismissed with costs payable by the appellant to the respondents. Such costs are fixed, on the consent of the parties, at $20,000 each, including fees, disbursements and GST.