Court File and Parties

COURT OF APPEAL FOR ONTARIO DATE: 20210520 DOCKET: C68638

Juriansz, van Rensburg and Sossin JJ.A.

BETWEEN

Parag Datta and Tandra Acharjee Plaintiffs (Respondents)

and

Okey Fabian Eze and Zachary Eze as Litigation Administrator for the Estate of Okey Eze Defendants (Appellants)

Counsel: Sam Presvelos and Evan Presvelos, for the appellants Sukh Jagpal, for the respondents

Heard: May 3, 2021 by video conference

On appeal from the judgment of Regional Senior Justice Leonard Ricchetti of the Superior Court of Justice dated August 13, 2020, with reasons reported at 2020 ONSC 4796.

Reasons for Decision

[1] The appellants, as vendors, failed to close a transaction for the sale of residential real estate at 6 Lonetree Court in Brampton for $940,000. The transaction was scheduled to close on September 28, 2016. On September 7, the appellants’ solicitor wrote to the respondents’ solicitor, purporting to rescind the transaction. The respondents commenced an action on September 27, 2016, suing for breach of the agreement of purchase and sale, and, taking the position the property was unique, claimed specific performance.

[2] The respondents accepted the return of their $45,000 deposit and, because of their fear of being priced out of the rising market, purchased another smaller property at 10 Solstice Street in December 2016 for the price of $945,000.

[3] The respondents brought a motion for summary judgment returnable on May 1, 2019. In the affidavit supporting the motion, they advised they were no longer seeking specific performance, but rather “damages in lieu of specific performance as the subject property has increased significantly in value”. In February 2020 the motion judge granted the respondents partial summary judgment, finding that the appellants had breached the agreement and that the respondents were entitled to certain expenses resulting from the failed transaction (which are not an issue on appeal), and ordered a reference as to the respondents’ claim for additional damages, based on the increased value of 6 Lonetree less the increased value of 10 Solstice.

[4] The reference was heard on July 16, 2020. The motion judge granted the respondents their claim for the increased value of 6 Lonetree less the increased value of 10 Solstice calculated on the basis of appraisals conducted in March 2020. This amounted to $150,000.

[5] On appeal, the appellants advance two arguments:

1. The respondents had no entitlement to claim specific performance or damages in lieu of specific performance as they had accepted the return of their deposit on the 6 Lonetree property; and
2. The motion judge should not have used the March 2020 appraisals. Rather, he should have used later appraisals from July 2020 or the actual sale price of the 10 Solstice property, which the respondent sold in July 2020.

[6] The respondents submit that the effect of the return of the deposit was not raised in the proceedings below and is a new issue that should not be entertained on appeal. They submit the motion judge had discretion to choose the appraisals on which he would rely. The respondents contend that using the later appraisals would reward the appellants for their shocking and outrageous delay in the proceedings.

The Effect of the Return of Deposit

[7] Before the motion judge, the appellants never raised that the respondents were not entitled to specific performance on the basis that the deposit had been returned. In his reasons, the motion judge observed only in passing that the deposit had been returned.

[8] The appellants urge the court to exercise its discretion to entertain the new argument, submitting that by refusing to do so the court would accept an error of law. We do not accept that is the case. In Semelhago v. Paramadevan, [1996] 2 S.C.R. 415, the Supreme Court doubted that specific performance was available as a matter of law, but dealt with the appeal on the basis it was available as that was how the parties had proceeded in the courts below.

[9] As this court observed recently in 7550111 Canada Inc. v. Charles, 2020 ONCA 386, at para. 14, “the introduction of a new issue on appeal is usually prejudicial to the respondent and runs counter to the societal interest in finality and the expectation that cases will be disposed of fairly, fully and expediently at first instance.”

[10] We decline to entertain argument about the effect of the return of the deposit. Rather, we consider it fair and appropriate to deal with the calculation of damages upon the basis the parties proceeded before the motion judge.

Calculation of Damages

[11] The next question is to what damages are the respondents entitled. The parties disagree about which appraisals the motion judge should have relied upon in calculating damages based on the difference in the increased values of the two properties.

[12] An appraiser jointly retained by the parties provided appraisals of the two properties as of July 2019. The respondents filed updated appraisals prepared by the same appraiser estimating the value of the two properties as of March 2020 and as of July 2020. The appellants filed additional appraisal reports in advance of the reference, but the motion judge identified concerns about the appraisals and gave them “no weight”, as the appraiser was not made available for cross-examination. The motion judge used the March 2020 appraisals to calculate the damages.

[13] The appellants submit the motion judge should have used the July 2020 appraisals as these are the closest to the date of judgment. In Semelhago, Sopinka J. said, in speaking of damages in lieu of specific performance, that “[t]echnically speaking, the date of assessment should be the date of judgment”: at para. 18. However, he went on to explain that it is not usually possible to predict the date of judgment when the evidence is given, and so for “practical purposes” damages will usually be assessed as of the date of trial.

[14] The appellants put forward a more telling reason why the motion judge should have used the July 2020 appraisals – 10 Solstice was sold in July and the appraised value corresponded with the sale price.

[15] We agree with the respondents that as a general proposition a trial judge has discretion to choose which appraisals are to be used in the calculation of damages. However, the appraisals of 10 Solstice were estimates of the property’s value. The sale price of the property was the best indication of its value. For that reason, we are of the view the motion judge should have provided an explanation for why the sale price was not used to calculate damages. As he gave no explanation, we would recalculate damages using the July 2020 figures.

[16] The parties are agreed that the difference in the increased values of the two properties using the July 2020 figures reduces this head of damages to $56,000.

[17] In oral submissions the appellants did not address the argument in their factum that the amount of the damages should be reduced by the amount of the deposit returned to the respondents. If not abandoned, we regard the argument to lack merit. Since there was no finding in the court below on this issue, which was apparently not raised before the motion judge, it is inappropriate to determine this issue on appeal.

Conclusion

[18] We allow the appeal and order that the respondents shall have judgment for this head of damages in the amount of $56,000.

[19] Counsel have agreed on costs.

“R.G. Juriansz J.A.” “K. van Rensburg J.A.” “L. Sossin J.A.”