Court of Appeal for Ontario

Date: 2021-03-29 Docket: C68465

Judges: Lauwers, Trotter and Zarnett JJ.A.

Parties

BETWEEN: Mohmmad Danesh, Plaintiff (Respondent)

AND: Elahe Vahed and Remax Crossroads Realty Inc., Defendants (Appellant/Respondent)

AND: Elahe Vahed, Plaintiff by Counterclaim (Appellant)

AND: Remax Crossroads Realty Inc., Mohmmad Danesh, and Michael Bury, Defendants to the Counterclaim (Respondents)

Counsel

For the appellant Elahe Vahed: Shahzad Siddiqui For the respondent Mohmmad Danesh: Esmaeil Mehrabi For the respondent Remax Crossroads Realty Inc.: Amanda Gibson For the respondent Michael Bury: Michael Kestenberg

Heard: March 19, 2021 by videoconference

On appeal from the order of Justice Mario D. Faieta of the Superior Court of Justice, dated June 5, 2020 with reasons reported at 2020 ONSC 3525.

REASONS FOR DECISION

I. Introduction

[1] The appellant, Elahe Vahed, was found by the motion judge to have breached an agreement to sell her condominium unit to the respondent, Mohammad Danesh. The motion judge ordered that the deposits Mr. Danesh had paid be returned to him, that Ms. Vahed pay damages to Mr. Danesh, and that Ms. Vahed’s counterclaim against Mr. Danesh and the respondents, Michael Bury and Remax Crossroads Realty Inc. (“Re/Max”) (her lawyer and the realtor, respectively, on the transaction) be dismissed.

[2] Ms. Vahed appeals each of the dispositions except the dismissal of the counterclaim against Re/Max; however, she seeks leave to appeal the costs award made against her in favour of Re/Max.

[3] The dispositions by the motion judge were made on motions for summary judgment brought by Mr. Danesh, Mr. Bury, and Re/Max. Ms. Vahed submits that the motion judge erred in granting summary judgment because there were genuine issues requiring a trial, and that he erred in principle in making a cost award against her in favour of Re/Max. She seeks to support her argument, in part, with fresh evidence, which she requests that this court consider.

[4] For the reasons that follow, we dismiss the motion to admit fresh evidence, deny leave to appeal costs and dismiss the appeal.

II. Background

[5] In May 2018, Ms. Vahed entered into an agreement of purchase and sale (the “APS”) to sell a condominium unit in Markham, Ontario to Mr. Danesh. Mr. Danesh paid a $20,000 deposit to be held by Re/Max. Closing was originally agreed to occur on July 28, 2018, but was later extended, by a signed agreement between the parties, to September 6, 2018 on payment of a further $20,000 deposit by Mr. Danesh to Ms. Vahed.

[6] On September 5, 2018, Ms. Vahed retained Mr. Bury to act for her on the sale. On that date, Mr. Danesh’s lawyer told Mr. Bury that Mr. Danesh would not be able to close on September 6 due to a problem in obtaining financing. On September 6, Mr. Danesh’s lawyer asked Mr. Bury for an extension of the closing date to September 25, 2018. Mr. Bury asked Ms. Vahed for instructions.

[7] On September 6, by two emails, Ms. Vahed instructed Mr. Bury to agree to an extension to September 25, 2018, on two conditions. The first was that Mr. Danesh pay the carrying costs—mortgage payments, maintenance fees and taxes—on the property until September 25. The second was that if Mr. Danesh “won’t close by 25th September I need the undertakings from the lawyers that he acknowledge that he is going to [lose] $40,000 deposits to me automatically”.

[8] Mr. Bury’s evidence was that on September 6, he relayed Ms. Vahed’s terms to Mr. Danesh’s lawyer and obtained his agreement to the terms. Mr. Bury then signed and hand-delivered a letter to Mr. Danesh’s lawyer, which stated:

Further to the email exchange with your office today and telephone discussions, I am writing to confirm that Ms. Vahed has agreed to an extension of the closing in the above matter to September 25th, 2018 with conditions (i.e. payment by your client of the carrying costs (Mortgage $1338.16, Maintenance Fee $347.20, Taxes $173 until closing, forfeiture of deposit if the deal does not close) and you have agreed to these terms.

The carrying cost amounts in the letter were those provided by Ms. Vahed to Mr. Bury.

[9] It does not appear that Mr. Bury provided a copy of this letter to Ms. Vahed. She emailed him on September 7, pointing out that the closing date had passed and she had received no reply. He advised her by email on September 8 that he had been told by Mr. Danesh’s lawyer that Mr. Danesh would be ready to close “early next week” and had agreed to “carry any costs as discussed”.

[10] Mr. Bury gave evidence that he spoke to Ms. Vahed on September 11. She expressed doubt about whether the deal would go ahead. He told her that the purchaser had already agreed to her terms and that the closing had been extended to September 25. On the same date, Mr. Bury sent her a copy of an email from Mr. Danesh’s lawyer confirming that Mr. Danesh was “ready to close”, asking for a statement of adjustments and closing package, and stating, “I must bring your attention to this fact that [your] client agreed to extend the closing date to the 25th day of September, 2018”.

[11] Ms. Vahed responded that Mr. Bury had not told her anything about an extended closing until two days after the September 6 date, and pointed out that his September 8 email did not talk about a September 25 closing or confirm that there had been agreement to her condition that there be an undertaking that Mr. Danesh would lose the deposit if he did not close on September 25. On the same date, Ms. Vahed’s listing agent emailed Mr. Bury asserting that the purchaser had defaulted in closing on September 6, that there was no agreement to extend on that date, and suggesting that Mr. Bury was helping the purchaser to bully Ms. Vahed.

[12] After sending further unanswered emails to Ms. Vahed, Mr. Bury emailed her on September 14 stating that, as he was not hearing back from her, he assumed that his services were no longer required.

[13] Ms. Vahed engaged another lawyer, Mr. Vakili, who corresponded with Mr. Danesh’s lawyer. Ultimately, on September 25, 2018, Mr. Danesh, through his lawyer, advised that he was ready, willing, and able to close. On the same date, Ms. Vahed, through Mr. Vakili, advised that the APS had expired on September 6, and that no valid extension agreement had been made.

[14] The deal did not close. Re/Max returned the first $20,000 deposit to Mr. Danesh. This litigation ensued. Mr. Danesh claimed that Ms. Vahed had breached the agreement by not closing on September 25, and that he was entitled to return of the deposits and damages. Ms. Vahed claimed that there was no extension beyond September 6, and that she was entitled to the deposits and damages. She also claimed against Mr. Bury for not following her instructions and against Re/Max for releasing the deposit to Mr. Danesh.

III. The Motion Judge’s Decision

[15] The motion judge was satisfied that the case was appropriate for summary judgment, as the facts could be efficiently and fairly determined on the basis of the affidavits, cross-examinations, and “extensive documentary record” before him.

[16] The motion judge’s pivotal finding was that the letter dated September 6, 2018 from Mr. Bury to Mr. Danesh’s lawyer recorded the agreement they made and was signed and delivered by Mr. Bury on September 6. He rejected Ms. Vahed’s argument that there was a genuine issue requiring a trial about whether the letter was a fabrication created sometime after September 6.

[17] The motion judge therefore concluded that the closing date under the APS had been extended until September 25, when it was breached by Ms. Vahed refusing to close. Accordingly, Mr. Danesh was entitled to the return of the deposits he paid and to his out of pocket expenses concerning the aborted transaction. Ms. Vahed’s counterclaim against Mr. Danesh for breach of the APS failed. Her counterclaim against Re/Max concerning its release to Mr. Danesh of the deposit it held similarly failed. Finally, her counterclaim against Mr. Bury failed. The motion judge was satisfied that Mr. Bury acted in accordance with her instructions in extending the closing to September 25, there was no evidence of any damage caused by any wrongdoing by Mr. Bury, and although punitive damages had been claimed, that was not a stand alone cause of action.

[18] The motion judge awarded costs to each of Mr. Danesh, Mr. Bury, and Re/Max.

IV. The Fresh Evidence Motion

[19] Ms. Vahed seeks to introduce fresh evidence on appeal. She argues that it shows that Mr. Bury was provided, by Re/Max, with documents concerning the transaction before September 5, 2018 and that this would be relevant to his credibility.

[20] The fresh evidence is not admissible. It could have been discovered with reasonable diligence before the hearing below. As well, in our view, it is not germane to the central issues and therefore could not have affected the result.

V. The Appeal

[21] Ms. Vahed argues that the motion judge erred in deciding the claims between her and Mr. Danesh, and between her and Mr. Bury, by summary judgment. She argues that there are genuine issues requiring a trial.

[22] We disagree. As between Ms. Vahed and Mr. Danesh, whether there was any genuine issue requiring a trial turned on the September 6 letter confirming an agreement to extend the closing from September 6, when Mr. Danesh was not ready to close, to September 25, when Mr. Danesh was ready to close and Ms. Vahed was not. Ms. Vahed’s position was that the September 6 letter was an after the fact fabrication, and that therefore there was nothing in writing agreeing to an extension of the closing date made on September 6.

[23] The motion judge was entitled to find that there was no genuine issue requiring a trial about whether the letter was a fabrication, rather than a letter written and signed as it purported to be that was delivered to Mr. Danesh’s lawyer on September 6. Although Ms. Vahed says there were “red flags” concerning the letter — primarily the lack of its timely provision to Ms. Vahed and the absence of specific reference to it in certain subsequent emails, the motion judge’s reasons show that he was alive to the relevant considerations. He gave cogent reasons for the conclusion he reached:

I find that Vahed’s allegation that the Extension Letter was fabricated does not raise a triable issue. First, it would require this Court to find that both Bury and McKee, being officers of the Court, had lied about the existence of the Extension Letter and its delivery. Second, it ignores Vahed’s own evidence that she was told by Bury on September 8, 2018 that Danesh had agreed to carry the additional costs of the Condominium. Third, it ignores McKee’s letter to Bury dated September 11, 2018 where he acknowledges that Vahed had agreed to extend the closing date. Fourth, it ignores Bury’s email to Vahed on September 11, 2018 where he told her that Danesh had agreed to the extension with penalties.

[24] The decision of a motion judge about whether there is a genuine issue for trial is entitled to deference on appeal: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 at para. 81. We are not persuaded that the motion judge committed a palpable and overriding error that would justify appellate intervention.

[25] Ms. Vahed also argues that there is a genuine issue requiring a trial about whether Mr. Bury breached his duties by not following Ms. Vahed’s instructions in recording the terms on which the closing would be extended in his September 6 letter. She says there is a difference between a lawyer’s undertaking regarding forfeiture of deposits, which she instructed him to obtain, and the language of the September 6 letter. We disagree.

[26] First, the issue is irrelevant as far as Mr. Danesh is concerned, as there is no suggestion that he or his lawyer were aware of any limitation on Mr. Bury’s authority to agree to an extension on the terms set forth in the September 6 letter.

[27] Second, as it pertains to the claim against Mr. Bury, we see no material, operative difference between what Mr. Bury was told to obtain — “undertakings from the lawyers that he acknowledge that he is going to [lose] $40,000 deposits to me automatically” — and the language of the September 6 letter —“…forfeiture of deposit if the deal does not close and you have agreed to these terms”. Accordingly, there is no error in the motion judge’s finding that in obtaining the agreement recorded in the September 6 letter, “Bury acted in accordance with Vahed’s instructions”.

[28] However, even if there were a difference, there was no evidence that it caused any loss to Ms. Vahed. A difference about who was responsible to ensure Ms. Vahed received the deposits would matter only if she became entitled to the them because Mr. Danesh breached the APS and failed to close on September 25. However, it was Ms. Vahed who failed to close — thus she never obtained an entitlement to the deposits.

[29] Ms. Vahed does not appeal the dismissal of her claim against Re/Max. But she argues that Re/Max should not have been awarded costs against her because Re/Max prematurely released the deposit to Mr. Danesh without a court order or a mutual release. We see no merit in this argument.

[30] Ms. Vahed advanced a substantial damages claim against Re/Max for its alleged wrongful release of the deposit, which the motion judge dismissed. Ms. Vahed was never prejudiced by the premature release of the deposit. The motion judge found that Re/Max had replaced the funds it prematurely released to Mr. Danesh — if Ms. Vahed had been found to be entitled to the deposit, she would have been paid. In any event, since she was not entitled to it, she suffered no loss due to Re/Max’s conduct.

[31] In these circumstances, we see no error in principle in the motion judge having made a costs award in favour of Re/Max in light of its successful defence of the claim against it.

VI. Conclusion

[32] The motion to introduce fresh evidence is dismissed. Leave to appeal the costs award in favour of Re/Max is denied. The appeal is dismissed.

[33] The respondents are entitled to costs payable by Ms. Vahed as follows: to Mr. Danesh, $7,500; to Mr. Bury, $7,500; and to Re/Max, $5,000. These amounts are inclusive of disbursements and applicable taxes.

“P. Lauwers J.A.”

“Gary Trotter J.A.”

“B. Zarnett J.A.”