COURT OF APPEAL FOR ONTARIO

CITATION: Hosseinzadeh v. Pringle, 2018 ONCA 1020

DATE: 20181212

DOCKET: C65330

Feldman, van Rensburg and Nordheimer JJ.A.

BETWEEN

Daryoush Hosseinzadeh

Plaintiff (Appellant)

and

Nancy Ann Pringle and Century 21 Leading Edge Realty Inc.

Defendants (Respondent)

Robert Hine and Maryam Shahidi, for the appellant

Jordan Potasky, for the respondent

Heard: November 29, 2018

On appeal from the judgment of Justice Patrick J. Monahan of the Superior Court of Justice, dated March 29, 2018, with reasons reported at 2018 ONSC 1947.

REASONS FOR DECISION

[1] The appellant appeals from the summary judgment order that dismissed his action for the return of the $100,000 deposit he paid on a real estate agreement and ordered that the deposit be forfeited to the respondent.

[2] The respondent owned 38 Alder Road, Toronto, Ontario (the "Property"). The Property comprises a detached two-story residential home on an irregular corner lot. On or about January 9, 2017, the Property was listed for sale on the Multiple Listing Service ("MLS") at a price of $1,288,888. In order to list a property on the MLS, the lot dimensions must be included in the listing.

[3] The respondent did not have a survey of the Property. Consequently, the respondent’s real estate agent consulted the Municipal Property Assessment Corporation's ("MPAC") database to obtain the lot dimensions. The MPAC database had a frontage for the Property but not a depth. The real estate agent therefore attended at the Property and did his own measurement of the depth. Both this measurement and the frontage from the MPAC database were placed into the MLS listing.

[4] The appellant made an offer for the Property at about 9 p.m. on January 26, 2017. In the offer, he included the dimensions from the MLS listing, namely, he described the Property as “having a frontage of 87.64 feet more or less by a depth of 100 feet more or less”. At 12:03 a.m. on January 27, 2017, the respondent signed back the appellant’s offer. Included in the changes made to the offer was the addition of the words “To be verified”, manually inserted into the offer above the depth of 100 feet.

[5] At 12:45 a.m. on January 27, 2017, the appellant accepted the respondent’s counteroffer and subsequently provided the respondent’s real estate agent with a deposit in the amount of $100,000.00.

[6] Thereafter the appellant investigated the actual dimensions of the Property since he intended to subdivide the Property. The appellant became concerned about the dimensions of the Property when he consulted a program called “GEOwarehouse”, which showed the Property as having dimensions of 78.3 feet x 69.17 feet x 145.17 feet.

[7] On February 14, 2017, the appellant took the position that because of the discrepancy between the lot dimensions as described in the Agreement of Purchase and Sale and those contained in the GEOwarehouse program, he would only close the transaction if the purchase price were reduced to $1,050,000. The respondent refused to abate the purchase price and the transaction failed to close on February 15, 2017.

[8] The appellant then brought this action for return of the deposit. The matter proceeded for determination by summary judgment, with the agreement of both parties.

[9] The motion judge made a number of findings. First, he found that there was a significant inaccuracy in the description of the Property’s dimensions in the Agreement of Purchase and Sale. Second, he found that a discrepancy of that magnitude fell well outside the “more or less” language in the standard form agreement.

[10] In Bouskill v. Campea (1976), 1976 CanLII 776 (ON CA), 12 O.R. (2d) 265 (C.A.), at p. 266, this court held that a discrepancy too substantial to be encompassed by the words “more or less” will allow a purchaser to resile from the transaction and obtain the return of their deposit.

[11] Third, the motion judge found that only the addition of the phrase “To be verified”, which he referred to as the “proviso”, distinguished the case from other cases referred to by the parties, including Bouskill.

[12] Here, the motion judge identified the issue as the interpretation and effect of the proviso. He found that the proviso put the purchaser on notice that it was his responsibility to verify the accuracy of the lot dimensions, and that if he was unwilling to accept that responsibility, he should not have accepted the contract. Finally, the motion judge found that the effect of the proviso was to put the risk of any inaccuracy in the lot dimensions on the purchaser.

[13] The motion judge was interpreting a manual addition to a standard form contract. While the standard of review of the interpretation of the parties’ addition would normally be the deferential standard, following Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] S.C.R. 633, the fact that the alteration was to the standard form real estate board form of agreement of purchase and sale imports the principle from Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, [2016] 2 S.C.R. 23, at para. 21, which suggests that the correctness standard would apply. Because we conclude that the decision must be set aside, either on the basis that the motion judge’s interpretation is incorrect or tainted by palpable and overriding error, it is not necessary to decide the applicable standard of review in this case.

[14] In our view the motion judge erred in his interpretation of the proviso by finding that it imposed an obligation on the purchaser, before the agreement was signed by both parties and became binding, to verify the dimensions of the property to his satisfaction.

[15] The proviso did not become a term of the contract until it was signed by both parties. Nor did the proviso say “To be verified by the purchaser.” Therefore, the proviso could not be interpreted as imposing an obligation on the purchaser to verify the dimensions before the agreement was signed and accepted. Rather, the proviso must be interpreted as simply saying that the depth dimension of 100 ft., which all parties knew had not been taken from a survey, had to be verified. Its accuracy was not to be taken as a representation by the vendor (or the agent).

[16] Further, there is nothing in the phrase which says that its intent or effect was to transfer the risk of the inaccuracy of the depth dimension to the purchaser, or to remove the effect of the words “more or less”, which remained in the agreement.

[17] Based on the finding of the motion judge that without the proviso the discrepancy was outside the “more or less” flexibility of the contract, the purchaser is allowed to resile from the agreement and receive the return of his deposit.

[18] Therefore the appeal is allowed. The order granting summary judgment to the respondent is set aside and in its place judgment will issue in favour of the appellant for $100,000, that is, the return of the deposit, along with applicable interest.

[19] The respondent will pay to the appellant the costs of the appeal fixed in the agreed amount of $10,000, inclusive of disbursements and HST. The appellant is also entitled to the costs of the motion for summary judgment that the motion judge fixed at $27,015.68, also inclusive of disbursements and HST.

“K. Feldman J.A.”

“K. van Rensburg J.A.”

“I.V.B. Nordheimer J.A.”