Court of Appeal for Ontario

Citation: Maraschiello v. Shellrock Developments Ltd., 2013 ONCA 167

Date: 2013-03-19

Docket: C55156

Before: Doherty, MacPherson and Watt JJ.A.

Between:

James Maraschiello and Nina Maraschiello Plaintiffs (Respondents)

and

Shellrock Developments Ltd. Defendant (Appellant)

Counsel: Theodore B. Rotenberg, for the appellant J. Diamond and M. Gertner, for the respondents

Heard: March 14, 2013

On appeal from the judgment of Justice Kendra Coats of the Superior Court of Justice, dated February 8, 2012.

Endorsement

[1] The appellant Shellrock Developments Ltd. appeals the judgment of Coats J. of the Superior Court of Justice dated February 8, 2012 holding that the respondents James and Nina Maraschiello were entitled to elect specific performance and obtain title to Block 151 of a residential development.

[2] In March 2004, the respondents sold 51.5 acres of land, where they had lived and worked since 1978, to the appellant. One of the terms of the Agreement of Purchase and Sale (‘APS’) was an undertaking to use “best efforts” within 12 months after the closing date (May 20, 2004) to obtain a severance of, inter alia, the “house lands”, a parcel of one acre around the respondents’ home. Following an eight day trial, the trial judge found that the appellant had breached this contractual obligation and ordered specific performance of transfer of title of this parcel of land to the respondent.

[3] The appellant advances three principal grounds of appeal, two factual and the other legal.

[4] First, the appellant submits that the reasons of the trial judge on the ‘best efforts’ component of Shellrock’s contractual obligation “are flawed by palpable and overriding errors”, including a misunderstanding of the evidence of the respondent’s expert, a misplaced emphasis on the appellant’s delay in preparing the severance application, and, especially, improper criticism of the evidence of Julius De Ruyter, a planning and development consultant retained by the appellant.

[5] We do not accept this submission. The trial judge engaged in a comprehensive and, in our view, balanced review of the evidence. Her conclusion was that:

Shellrock failed to use best efforts in the Committee of Adjustment application to obtain a severance for house lands within 12 months of the closing date of May 20, 2004 and that if they had used best efforts, it was highly likely that the final consent from the Committee of Adjustment would have been granted.

[6] Having reviewed the record, we see no basis for interfering with this conclusion. We cite but one example (of many) that demonstrates how ineffectual (the trial judge used the word ‘lackadaisical’) were the appellant’s efforts in pursuing the agreed-upon severance. Mr. De Ruyter prepared the severance application and represented the appellant at the hearing held by the Committee of Adjustment. The minutes of the meeting of the committee record:

(a) De Ruyter explained that one of the “conditions of approval” of the APS was to apply for a consent application in an attempt to sever the existing home from the subject lands;

(b) De Ruyter advised that the only reason the Defendant applied for severance was to meet its legal requirements under the APS;

(c) De Ruyter confirmed that he was in agreement with the staff report’s recommended refusal of the consent application as the proposal does not meet the intent of the Town’s Official Plan or zoning by-law;

(d) De Ruyter agreed that the consent application was not an example of good planning;

(e) De Ruyter stated that once the consent application is ruled upon, whether approved or not, the Defendant would have met its legal obligations to apply for severance. (Emphasis added.)

[7] We note that in his testimony Mr. De Ruyter did not accept the comments attributed to him in the emphasized paragraphs in the minutes. However, the trial judge explicitly stated that his testimony about the accuracy of the minutes lacked credibility. In our view, the minutes establish that the appellant’s conduct was far removed from a ‘best efforts’ attempt to obtain a severance; indeed, these minutes appear to document a ‘worst efforts’ attempt.

[8] Second, the appellant contends that even if the trial judge did not err in her treatment of the evidence led by the appellant, she did err by relying on the expert evidence of the respondent’s witness Colin Chung to conclude that, if the appellant had made genuine ‘best efforts’, the requested consent severance would probably have been obtained from the Committee of Adjustment.

[9] We disagree. In our view, Mr. Chung’s testimony about his experience in this domain and his description of the steps he would have taken supports the trial judge’s conclusion that “had the Defendant made best efforts, the severance would have been granted and the Committee of Adjustment decision made final within the 12-month period in the APS.”

[10] Third, the appellant contends that the trial judge erred by awarding specific performance to the respondents.

[11] The appellant’s first point is to assert, as it did at trial, that specific performance was not a possible remedy in this case.

[12] We disagree. As the trial judge said: “Block 151 was created, from the Plaintiffs’ perspective, to preserve the Plaintiffs’ rights, including the right to specific performance. The Plaintiffs acted diligently to protect this claim.”

[13] The appellant’s alternative submission is that if specific performance was in play as a potential remedy, the trial judge erred in the exercise of her discretion by ordering this remedy.

[14] We do not accept this submission. The trial judge reasoned:

In the case before me, I find that the remedy of damages is inadequate to do justice and that the Plaintiffs have established a fair, real and substantial justification for their claim to specific performance.

It is hard to imagine a more unique property. The property was their home since 1978. From 1978 to 1989 the Plaintiffs worked the property as a farm and in 1989 built a golf course. On Block 151 is the building that was the Plaintiffs’ home for many years. They resided in the home for many years. A substitute is not readily available.

The Plaintiffs’ request for the house lands was born of their desire to stay on the property and be part of whatever subdivision was built. As previously stated, they did not want to stand in the Defendant’s way, and simply wanted their home to remain among the new development.

[15] Against the backdrop of this factual description, which we accept, the trial judge’s decision to order the remedy of specific performance was entirely reasonable.

[16] In light of this conclusion, the other issues raised by the appellant, which relate to damages, do not arise.

[17] The appeal is dismissed. The respondents are entitled to their costs of the appeal, fixed in the agreed amount of $23,500 inclusive of disbursements and HST.

“Doherty J.A.”

“J.C. MacPherson J.A.”

“David Watt J.A.”