Court of Appeal for Ontario

Date: 2018-12-19 Docket: C65058

Judges: Rouleau, van Rensburg and Roberts JJ.A.

Between

Shahnaz Hatami Applicant (Appellant)

and

1237144 Ontario Inc. Respondent (Respondent)

Counsel

Elena E. Mazinani, for the appellant

J. Anthony Caldwell, for the respondent

Heard and released orally: December 12, 2018

On appeal from: the judgment of Justice P.J. Monahan of the Superior Court of Justice dated January 26, 2018, with reasons reported at 2018 ONSC 668.

Reasons for Decision

[1] The appellant appeals a summary judgment dismissing her claim for recovery of a $200,000 deposit she paid for the purchase of a property at 291 Eglinton Avenue East in Toronto. The property was zoned R4 Az4, a residential zoning in which office space is permitted, and had been used by the respondent as commercial office space.

[2] These proceedings were commenced as an application. Pursuant to interlocutory orders, the matter proceeded to a hearing by way of summary judgment with the motion judge hearing oral evidence from three witnesses. The motion judge dismissed the appellant's claim that the respondent had misrepresented the zoning of the property. He further concluded that there was no breach of agreement by the respondent and he also found that there had been anticipatory breach by the appellant that entitled the respondent to retain the deposit. Finally, he rejected the appellant's argument that it was unconscionable for the respondent to retain the deposit.

[3] On appeal, the appellant does not take issue with the motion judge's conclusion on unconscionability. The appellant argues first that the motion judge erred in failing to find that the respondent's agent negligently represented that the property was zoned commercial when in fact it was zoned residential. In her submission, the negligent misrepresentation was such that the respondent could not rely on the agreement of purchase and sale and could not therefore retain the deposit. We disagree.

[4] The motion judge found as a fact that the agent never represented the property as being zoned commercial. This finding was available on the record before the motion judge. We do not accept that the motion judge committed a palpable and overriding error in so finding. In making his finding, he considered all of the relevant evidence, including the text message that the appellant seeks to rely on in her argument before this court.

[5] The appellant further argues that the motion judge erred in failing to find that the respondent was not ready, willing and able to close the transaction, which is a requirement in order for the respondent to retain the deposit. We disagree.

[6] At the motion for summary judgment, the appellant argued that the respondent was in breach of the agreement of purchase and sale by failing to respond to its requisitions to certify on or before closing that the transaction was not subject to HST and to provide a survey. The motion judge rejected this argument. He concluded that the agreement of purchase and sale did not impose such obligations and that the failure to respond to the requisitions in respect of these matters would not have relieved the appellant of its obligation to close the transaction.

[7] In any event, the motion judge was satisfied on the evidence that the respondent had provided a survey and that it had properly refused to sign a certificate that HST was not applicable. He found that due to the use of the property, the respondent believed that HST was payable on the sale. These findings and conclusions are fully supported by the evidence. The motion judge's analysis at paragraphs 43-50 of his reasons explain his findings and conclusions. These are unassailable.

[8] Finally, the appellant argues that the motion judge erred in finding that the appellant's anticipatory breach entitled the respondent to retain the deposit. She maintains that the respondent chose to keep the agreement alive and, thereafter, breached the agreement by failing to set a new closing date and by making a defective tender. We disagree.

[9] Contrary to the appellant's submissions, the motion judge found that in response to the appellant's repudiation, the respondent clearly elected to terminate the agreement for breach of contract, retain the deposit and preserve its right to sue for damages. This was clear from the email sent late on the day of closing by the respondent's counsel. The respondent's tender the next day was, as found by the motion judge, simply done out of an abundance of caution and was not necessary.

[10] For these reasons, the appeal is dismissed. Costs to the respondent fixed in the amount of $9,000 inclusive of disbursements and HST.

"Paul Rouleau J.A."

"K. van Rensburg J.A."

"L.B. Roberts J.A."