Court of Appeal for Ontario

Citation: Kapy v. Hwang, 2010 ONCA 740

Date: 2010-11-05

Docket: C51886

Between:

George L. Kapy

Plaintiff (Respondent)

and

Young Ho Hwang

Defendant (Appellant)

Before: Laskin, Armstrong and Juriansz JJ.A.

Counsel:

Rebecca Huang, for the appellant

Angelo S. Callegari, for the respondent

Heard: October 28, 2010

On appeal from the order of Justice Anne Mullins of the Superior Court of Appeal dated December 1, 2009.

Reasons for Decision

Juriansz J.A.:

[1] The appellant appeals from the summary judgment awarded against him. He entered into an agreement to purchase real estate property but failed to close the transaction. The vendor, the respondent, brought an action against him for damages. The motion judge granted summary judgment to the vendor and awarded him damages of $282,476.09 and costs of $14,063.44 on a substantial indemnity scale.

[2] On appeal, the appellant takes the position that the reason he refused to close the transaction was his discovery that property nearby had been or was used as a landfill site. His solicitor’s search of title revealed certificates filed by the Ministry of Environment, but arrangements to remove these had been made by the closing date. The appellant says that the law places a duty on the vendor of residential property to disclose to prospective purchasers any health and safety hazards the property poses. In this case, the vendor did not disclose the existence of the landfill site. The appellant submits that the motion judge should have refused summary judgment because whether the landfill site posed a risk to health and safety was a genuine issue for trial.

[3] The appellant recognizes that he did not place before the court any evidence to show that the landfill site posed a health risk. However, he submits the burden was on the vendor to file evidence to establish that it did not pose a health risk. This is because, he says, the vendor, as the moving party, bore the initial burden of showing there is no genuine issue for trial. He relied on the Supreme Court of Canada decision, Papaschase Indian Band No. 136 v Canada (A.G.), 2008 SCC 14, [2008] 1 S.C.R. 372, for the proposition that each side to a summary judgment motion, not just the respondent, must put its best foot forward.

[4] The appellant is correct that the vendor, as the moving party, bore the legal or persuasive burden to satisfy the court that there is no genuine issue for trial. The vendor accomplished that by affidavit evidence before the court that was sufficient to establish, prima facie, that the real reason the appellant failed to close the transaction was his inability to arrange the necessary financing. In fact, para. 26 of the appellant’s statement of defence constitutes an admission that this is so. In para. 26, the appellant pleaded that notwithstanding the certificates that were on title he was still willing to complete the purchase when he obtained the necessary funds.

[5] Once the vendor established financing was the reason the appellant failed to close the transaction, the evidentiary burden was on the appellant to lead evidence to show the landfill site raised a genuine issue for trial. He filed evidence that he refused to close the transaction because of his discovery of the nearby landfill site, but failed to lead any evidence that it posed a health and safety risk. Absent such evidence, it could not be said that the existence of the landfill site raised a genuine issue for trial.

[6] We see no error in the motion judge’s conclusion that he had not raised a genuine issue for trial. The appeal of the judgment granted on the summary judgment motion is dismissed.

[7] The appellant sought leave to appeal the motion judge’s costs order. We grant leave to appeal and allow the appeal for two reasons.

[8] First, the motion judge seems to have proceeded on the erroneous understanding “that on a successful motion for summary judgment, full indemnity costs are warranted”. She made no finding that the appellant acted unreasonably in responding to the motion or in bad faith for the purpose of delay, so rule 20.06 had no application. Second, the motion judge did not allow the appellant the opportunity of making any submissions before she imposed costs.

[9] The motion judge’s costs order is set aside and replaced with an order of costs on a partial indemnity basis in the amount of $7,500 all inclusive.

[10] Though the results are mixed, the respondent has achieved greater success. We fix costs in favour of the respondent on a partial indemnity scale in the amount of $5000.00 all inclusive.

“R.G. Juriansz J.A.”

“I agree John Laskin J.A.”

“I agree R.P. Armstrong J.A.”

RELEASED: November 5, 2010