Court of Appeal for Ontario

Date: 2019-05-21 Docket: C66184

Justices: Doherty, Benotto and Huscroft JJ.A.

Between

Birchcliffe Core-Harbour Inc. Plaintiff (Appellant)

and

Stella Pinnock, Stainton Pinnock and Homelife/Romano Realty Ltd. Defendants (Respondents)

Counsel

David Taub and Jonathan Preece, for the appellant

Osborne G. Barnwell, for the respondents

Heard and released orally: May 15, 2019

On appeal from the judgment of Justice Dietrich of the Superior Court of Justice, dated October 26, 2018.

Reasons for Decision

The Main Appeal

[1] The motion judge found that the respondents ("Vendors") could not deliver unencumbered title as they had promised in the Agreement of Purchase and Sale, and were therefore in breach of the agreement with the appellant ("Purchaser"): see reasons, para. 46. We see no error in that finding.

[2] The motion judge acknowledged that the respondent Vendors' breach gave rise to a claim for damages. She, however, limited the damages to the amount of the deposit ($25,000). She refused to award damages to the appellant for loss of bargain, indicating:

The remedy of damages for a breach of contract causing a loss of bargain presupposes that there was a bargain to be had and that it was wrongfully withheld from the innocent party. For Birchcliffe, the economic consequences of this failed agreement of purchase and sale caused the illusion of a loss of bargain but no actual loss of bargain.

In summary, there was no wrongful appropriation of a benefit by the Pinnocks. The benefit that Birchcliffe assumed it was denied was illusory and did not in fact exist. Accordingly, the Pinnocks have no liability to Birchcliffe for loss of bargain.

[3] With respect, there was no "illusion" of a bargain between the appellant and the respondents. There was a real bargain. There was an agreement to sell the property at an agreed-upon price. When the respondents did not close the transaction, despite several extensions, the appellant lost the benefit of that agreement.

[4] We do not agree with the motion judge that, as a condition of recovering damages for the difference in the price agreed upon with the respondents and the higher price eventually paid to the mortgagee, the appellant was required to show that the respondents "appropriated the benefit" otherwise available to the appellant. The damages for the loss of benefit are measured by the higher price paid by the appellant for the property and are not dependent on any benefit that may have flowed to, or been bestowed upon, the respondent Vendors.

[5] The appellant was entitled to judgment for the difference between the purchase price agreed upon and the price eventually paid for the same property. That amount is $187,500. The appeal is allowed by deleting para. 2 of the judgment as it presently stands and adding a provision awarding damages to the appellant for the amount of $187,500. The provision in para. 1, in respect of the $25,000, remains in place.

Cross-Appeal

[6] We do not accept the arguments advanced by the cross-appeal. Those arguments are all premised on the assertion that the appellant's conduct, especially in respect of its dealings with the mortgagee in the months prior to the eventual termination of the agreement, was improper and caused the respondents to be unable to close the transaction with the appellant under the terms of the Agreement of Purchase and Sale. All of these arguments run aground on the motion judge's finding of fact, at para. 70:

The Pinnocks were never realistically in a position to provide clear title to Birchcliffe. The actions of the solicitors for Birchcliffe and the mortgagee respectively, while deceptive, were not the cause of the Pinnocks' failure to close the transaction. Given the Pinnocks' negative equity in the property and the mortgagee's desire to ensure the property was sold at its fair market value, the true vendor of the property was going to be the mortgagee.

[7] The appellant on the cross-appeal submits that this finding demonstrates a clear and palpable error. We do not agree. The finding is fully justified on the record and we must defer to that finding.

[8] The cross-appeal is dismissed.

The Application for Leave to Appeal Costs

[9] The respondents have sought leave to appeal the costs order made by the motion judge. As we would allow the main appeal and vary the judgment below, the issue of costs of the motion must be addressed in light of our disposition of the main appeal. Consequently, the motion for leave to appeal the costs order by the motion judge is moot and need not be addressed on the merits.

Costs

[10] We are satisfied that the appellant is now the successful party and should have its costs on the summary judgment motion. In the circumstances, and having regard to the limited material we have, we think the quantum of costs awarded by the motion judge offers a good barometer of the appropriate amount. We award costs to the appellant of the motion in the amount of $20,000, inclusive of disbursements and all relevant taxes.

[11] Insofar as the appeal is concerned, the appellant is entitled to costs on a partial indemnity basis. The appeal was relatively straightforward. However, there was a cross-appeal, on which the appellant was also successful. It was somewhat more factually difficult than the appeal itself. In our view, an award of costs on a partial indemnity basis in respect of the appeal and the cross-appeal to the appellant in the amount of $20,000, inclusive of disbursements and all relevant taxes, is appropriate.

"Doherty J.A."

"M.L. Benotto J.A."

"Grant Huscroft J.A."