Court of Appeal for Ontario

Date: 2019-04-03 Docket: C64690

Judges: Feldman, Pepall and Roberts JJ.A.

Between

Pieter Adriaan Vandenberg, Catherine Ann Vandenberg and 1060205 Ontario Inc. Plaintiffs (Respondents)

and

Robert Wilken and Angela Wilken Defendants (Appellants)

Counsel

Michael A. Polvere, for the appellants

David J. Kirwin, for the respondents

Heard: March 21, 2019

On appeal from: the order of Justice Raikes of the Superior Court of Justice, dated November 6, 2017, with reasons reported at 2017 ONSC 6665.

Reasons for Decision

[1] This appeal arises out of a failed commercial farm real estate transaction that the appellant vendors refused to close because of their allegations of unconscionability, non est factum, collusion and conspiracy against the respondent purchasers and third party real estate agents.

[2] The appellants appeal from the order of partial summary judgment granted to the respondents with respect to the validity of the agreement of purchase and sale and its breach by the appellants. The respondents resist the appeal but are content that the order dismissing their claim for specific performance survive.

[3] The respondents brought an action for specific performance of the sale to them of the appellants' farm property, alternatively claiming damages for breach of the agreement. They subsequently moved for judgment enforcing the agreement of purchase and sale and granting specific performance. There was no motion with respect to the appellants' counterclaim or the third party claim against the real estate agents.

[4] Following service of the motion for summary judgment, the appellants delivered a statement of defence and counterclaim, and issued a third party claim against the real estate agents, who represented both the appellants and the respondents on the transaction, claiming that the agents exerted undue pressure on the appellants and forced them to enter into the agreement, making it unconscionable.

[5] The motion judge granted summary judgment declaring the agreement of purchase and sale valid, but denied the remedy of specific performance and ordered a trial regarding damages.

[6] In coming to this determination, the motion judge made a number of adverse findings of credibility against the appellants with respect to their interactions with the real estate agents. The motion judge summarized his conclusions as follows:

I am convinced that the [appellants] simply suffer from a case of sellers' remorse. They were not misled nor were they pressured to sign the offer back. They wanted full price for their properties and that is what they got. In the days after they had the agreement in hand, they had a change of heart. Their story of what happened before and after the agreement was entered into is simply not credible.

[7] The motion judge determined the evidence did not "establish any prospect of a finding of an unconscionable transaction", and "even if a court could find that the agents misrepresented the effect of signing back the counter-offer, the [appellants'] remedy lies against the agents, not the innocent [respondents]".

[8] The appellants submit the motion judge erred in granting partial summary judgment to the respondents in the main action when there are genuine issues of fact and credibility requiring a trial, and a real risk of inconsistent findings being made in the trial of the counterclaim and third party claim.

[9] We agree.

Analysis

[10] We appreciate that the motion judge was endeavouring to give effect to "the shift in culture" directed by the Supreme Court in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, that the enhanced powers under r. 20.04 of the Rules of Civil Procedure be employed to achieve "a proportionate, more expeditious and less expensive means to achieve a just result" (paras. 28, 49). The difficulty, here, however, is that in ordering a partial summary judgment, the motion judge failed to heed the Supreme Court's further instruction and caution at para. 60:

The "interest of justice" inquiry goes further, and also considers the consequences of the motion in the context of the litigation as a whole. For example, if some of the claims against some of the parties will proceed to trial in any event, it may not be in the interest of justice to use the new fact-finding powers to grant summary judgment against a single defendant. Such partial summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice. On the other hand, the resolution of an important claim against a key party could significantly advance access to justice, and be the most proportionate, timely and cost effective approach.

[11] The motion judge was required but failed to consider whether in granting partial summary judgment there was a risk of duplicative or inconsistent findings at the trial of the counterclaim and third party claim, and whether granting partial summary judgment was advisable in the context of the litigation as a whole: Butera v. Chown, Cairns LLP, 2017 ONCA 783, at para. 28. As this court further observed in Butera, at para. 34:

A motion for partial summary judgment should be considered to be a rare procedure that is reserved for an issue or issues that may be readily bifurcated from those in the main action and that may be dealt with expeditiously and in a cost effective manner.

[12] None of these factors was present here.

[13] First, the issues were not readily bifurcated. The appellants' allegations of unconscionability are inextricably intertwined with and therefore affect the determination of the validity of the agreement of purchase and sale. Moreover, the motion judge made numerous findings of credibility concerning the appellants and their relationship with their real estate agents that are at the core of the counterclaim and third party claim. The motion judge's findings will either constrain the trial judge or lead to the risk of inconsistent findings on the same issues at trial.

[14] Further, in the light of the appellants' assertions of Mr. Wilken's disability that in part grounded their allegations of unconscionability, it was incumbent on the motion judge to consider whether in those circumstances, oral evidence was required to determine the issues of credibility on which the decision turned.

[15] Finally, the motion judge's order did not result in the issues ultimately being dealt with in an expeditious and cost effective manner: the partial summary judgment did not dispose of the respondents' damages claim, the counterclaim or the third party claim, which must proceed to trial.

Disposition

[16] As a result, the appeal is allowed and paras. 1 and 3 are set aside.

[17] The appellants are entitled to their partial indemnity costs of the appeal fixed as agreed in the amount of $12,500, and to their partial indemnity costs of the motion below in the amount of $20,000. Both amounts are inclusive of disbursements and HST.

"K. Feldman J.A."

"S.E. Pepall J.A."

"L.B. Roberts J.A."