Covedale Developments Inc. v. 1589380 Ontario Limited

CITATION: Covedale Developments Inc. v. 1589380 Ontario Limited, 2010 ONCA 16

DATE: 20100112

DOCKET: C50645

COURT OF APPEAL FOR ONTARIO

Laskin, MacPherson and Rouleau JJ.A.

BETWEEN:

Covedale Developments Inc.

Plaintiff (Appellant)

and

1589380 Ontario Limited

Defendant (Respondent)

BETWEEN:

1029500 Ontario Limited

Plaintiff (Appellant)

and

Dominic Mesiano, Annina Mesiano, 1529737 Ontario Limited and 1527619 Ontario Limited

Defendants (Respondents)

BETWEEN:

1589380 Ontario Limited, 1529737 Ontario Limited and 1527619 Ontario Limited

Plaintiffs (Respondents)

and

Peter Heasty, Covedale Developments Inc. and 1029500 Ontario Limited

Defendants (Appellant)

Richard Mazar, for the appellants

Young Park and Jeremy Millard, for the respondents

Heard and released orally: January 8, 2010

On appeal from the order of Justice Jane Ferguson of the Superior Court of Justice dated May 22, 2009.

ENDORSEMENT

[1] The appellants Peter Heasty and several numbered companies appeal from the order of Ferguson J. dated May 22, 2009 granting the respondents Dominic Mesiano and several other corporations an order for specific performance. The order required the appellants to cooperate in the severance of a parcel of land and the sale of half of the parcel to a corporation owned by Mesiano.

[2] Peter Heasty and Dominic Mesiano operated a Mazda dealership together (Whitby Mazda, 1529737 Ontario Ltd.). Mesiano was president and director of Whitby Mazda. Heasty was manager, secretary-treasurer, and director. Each worked through various numbered corporations. Whitby Mazda was owned jointly by MesianoMazdaCo (1527619) and HeastyMazdaCo (1029500).

[3] On April 8, 2008, Mazda Canada notified Whitby Mazda that it would have to relocate by April 12, 2009 or lose its franchise. Heasty and Mesiano found an appropriate location. The lot was six acres, and the two agreed to divide it into two parcels with one half to become the new home of Whitby Mazda. Heasty took steps to parcel the land, including engaging Tunney Planning Inc. as agent to work on matters relating to its development and severance.

[4] The property was purchased by HeastyLandCo (Covedale Developments), and MesianoLandCo (1589380). The day before the closing of the purchase, HeastyLandCo and MesianoLandCo entered into an agreement (“Sunray Agreement”) whereby the land would be parcelled. MesianoLandCo would take title to parcel 1, be responsible for costs of constructing a Mazda dealership, and use the parcel as the new home of Whitby Mazda. HeastyLandCo and MesianoLandCo would hold title to parcel 2 jointly and share maintenance costs.

[5] In the spring of 2008, before the severance was completed, a dispute arose between Heasty and Mesiano. Whitby Mazda brought a claim against Heasty for misappropriation of funds. Heasty resigned as manager, officer, and director of Whitby Mazda in July 2008. He then refused to complete the parcelling and sale of the lot. In April 2009, Mesiano brought an urgent motion for specific performance compelling Heasty to complete the severance of the land, in conformity with the Sunray Agreement. The motion judge granted the motion.

[6] The appellants appeal, contending that the motion judge erred in three respects.

[7] First, the appellants contend that there was no consideration for the Sunray Agreement. We disagree. There were clearly worded mutual promises to develop the property. In particular, the respondents’ agreement to build a new Mazda dealership and pay the expenses of doing so was consideration flowing to the appellants.

[8] Second, the appellants submit that the motion judge erred in concluding that the Sunray Agreement was sufficiently certain to meet the qualifications of s. 4 of the Statute of Frauds and be an enforceable contract.

[9] We disagree. The motion judge’s analysis of the structure and contents of the document and the subsequent conduct of the parties support her conclusion that the description of the lands, details relating to the lot to be severed, and time frames for severance and conveyance set out in the document are all clear and ascertainable.

[10] Third, the appellants contend that the motion judge erred in ordering a remedy of specific performance on a summary hearing basis.

[11] We do not accept this submission. The case law is clear that specific performance may be awarded on a motion for summary judgment: see Irving Ungerman Ltd. v. Galanis, 1991 7275 (ON CA), [1991] O.J. No. 1478 (C.A.), at para. 38. Moreover, on the merits, we agree that this was an appropriate case for ordering specific performance. As expressed by the motion judge, “Heasty has flagrantly and deliberately inflicted risk and loss after being extensively involved in the process.”

[12] The appeal is dismissed. The respondents are entitled to costs fixed at $10,000 inclusive of disbursements and G.S.T.

“J.I Laskin J.A.”

“J.C. MacPherson J.A.”

“Paul Rouleau J.A.”