COURT OF APPEAL FOR ONTARIO

DATE: 20211028 DOCKET: C67414

Strathy C.J.O., Zarnett J.A. and Wilton-Siegel J. (ad hoc)

BETWEEN

Amelia Miragliotta and Francesco Di Nardo Plaintiffs (Appellants)

and

Mark Zanette, Stephen Zanette, and Randy Zanette Defendants (Respondents)

Counsel: Patrick Di Monte, for the appellants Brett D. Moldaver, for the respondents

Heard: October 18, 2021 by video conference

On appeal from the order of Justice Chris de Sa of the Superior Court of Justice, dated August 9, 2019, with reasons reported at 2019 ONSC 4599.

REASONS FOR DECISION

INTRODUCTION

[1] The appellants [^1] appeal from a decision that addressed two matters: (i) the amount the appellants should pay as a result of their having undertaken to be responsible for damages caused by an interim injunction they obtained against the respondents; and (ii) the amount that should be awarded to the appellants for expenditures to perform work that the respondents were obliged to complete under a 2010 court order. The appellants contend that the trial judge erred in his assessment of both amounts. [^2]

[2] For the reasons that follow, we dismiss the appeal.

BACKGROUND

[3] The appellants and the respondents own neighbouring development lands in the City of Vaughan. They have been involved in litigation concerning the lands for more than 10 years.

[4] The 2010 court order provided that the parties would enter into an Agreement of Purchase and Sale under which the respondents would sell a small piece of land known as Block 7 to the appellants. It also provided that the respondents would be responsible for, among other things, completing the final coat of asphalt on a roadway known as the Appian Way by August 31, 2013, and for completing the final curbs for Block 7.

[5] The respondents did not comply with the deadline in the 2010 order. After giving notice to the respondents of their intention to hold them responsible for the cost of doing so, the appellants did the work to complete the curbs and added the final coat of asphalt to the Appian Way in May 2014.

[6] In August 2014, the respondents proposed a plan for their lands that involved creating, by severance, five building lots, two of which would have 50-foot frontages, rather than the 60 feet required under a city by-law. The respondents objected, and in October 2014, moved for an injunction, undertaking to be responsible for any damages flowing from the injunction. In January 2015, an injunction was granted restraining the respondents from proceeding with the development of the two building lots of 50 feet. The injunction was set aside by a further order made on June 2, 2015, which the appellants appealed unsuccessfully. [^3] When the injunction was set aside, a reference was directed to determine the damages for which the appellants were responsible as a result of their undertaking.

The Trial Judge’s Decision

[7] The trial judge heard the reference on damages caused by the injunction, and a motion for summary judgment brought by the appellants to recover their expenditures for work relating to the respondents’ failure to comply with the 2010 order.

[8] With respect to the damages caused by the injunction, the trial judge accepted the evidence of the respondents that they had obtained a commitment for new financing in September 2014, based on a five-lot development (with 50-foot lots). The refinancing would have allowed them to pay out their existing mortgages of $1,650,000, which were accruing interest at 9% and 13.7% in October 2014, with a new rate of 6.85% for an 18-month term. The motion for the injunction and the injunction itself prevented the refinancing from being finalized until May 2015; when it was finalized, it was based on four lots only and at a higher interest rate.

[9] The trial judge awarded the respondents $30,289.58, representing the interest rate differentials as a result of their inability to refinance the property between October 2014 and May 2015; a further $22,252.50, representing higher interest on the eventual refinancing between May 2015 and November 2016; and a further $10,000 for “[l]ender’s amendment fees”. He described these as amounts the appellants did “not seriously contest”.

[10] The trial judge denied the respondents’ claim for a further amount of about $121,000 of “[i]nterest for carrying costs on the project due to … delays”, as he found the delays complained of to support this aspect of the claim were not clearly associated with the injunction. Instead, the trial judge found that these costs were incurred as a result of the respondents’ development choices and natural delays caused by the circumstances surrounding the development.

[11] The appellants’ claim relating to the final coat of asphalt and the curbs was allowed by the trial judge in the amount of $28,172.61, less $25,000 already paid. The trial judge also made an award of interest. He disallowed the higher amounts claimed by the appellants because they included interest calculated at 10%, rather than the Courts of Justice Act, R.S.O. 1990, c. C.43 rate, and because they included amounts not attributable to the final coat of asphalt or the curbs as contemplated by the 2010 order.

ANALYSIS

(i) Damages Flowing from the Injunction

[12] Before this court, the appellants argue that the trial judge ought not to have awarded the interest differential amounts or the lender’s amendment fees. They essentially argue that the respondents did not have any municipal or planning approvals for five lots or four lots at the time of their planned or actual refinancing, and therefore ought not to have been approved for refinancing based on creating either number of lots. Therefore, they say the trial judge erred in finding the interest rate differentials, if there were any, and the lender amendment fees were caused by the injunction. They also argue that the respondents should have gone back to the lender and requested different terms once the injunction was dissolved in June 2015, in essence suggesting that there was a failure to mitigate.

[13] We reject this ground of appeal.

[14] The trial judge made findings of fact that the appellants had a lending commitment at a lower interest rate, that the injunction delayed its finalization, and that the respondents were only able to finalize it at a higher rate while the injunction was in effect. In other words, the respondents were deprived of the benefit of the September 2014 lending commitment by reason of the injunction. The appellants do not argue that the trial judge made a palpable and overriding error in these findings, which are entitled to deference on appeal. These findings support the award of damages he made. It is immaterial whether the respondents, vis-à-vis their own lender, should have been approved for refinancing based on a particular number of lots before planning approvals were obtained. The damages flowing from the injunction were based on what the trial judge found had actually occurred, not what the respondents’ lender should have committed to in the circumstances.

[15] Assuming that it is open to a party obligated to pay damages for obtaining an injunction to argue a failure to mitigate, the appellants would bear the onus of proof on that issue. The appellants pointed us to no evidence to support the argument that if the respondents had tried to renegotiate the refinancing after the injunction was dissolved, they would have succeeded.

(ii) Compensation for Expenditures Under the 2010 Court Order

[16] With respect to the award of compensation in their favour, the appellants argue that the trial judge gave them an inappropriately low sum. They say that the Appian Way road deteriorated due to the failure of the respondents to apply the final coat of asphalt by the deadline for doing so, and therefore they had to do additional work before they could apply the final coat. They say the trial judge took an unduly narrow view of what the 2010 order required.

[17] We reject this ground of appeal as well. The trial judge’s interpretation of the terms of the 2010 order (which the appellants themselves stress was given on consent and was akin to a contract) is entitled to deference in this court. So is his comparison of what the appellants spent relative to what was required of the respondents under the 2010 court order, as that is a matter with a heavily factual component. We see no error in the trial judge’s conclusions that would entitle this court to interfere.

CONCLUSION

[18] The appeal is dismissed. The respondents are entitled to their costs of the appeal, fixed in the agreed amount of $12,500, inclusive of disbursements and applicable taxes.

“G.R. Strathy C.J.O.”

“B. Zarnett J.A.”

“Wilton-Siegel J.”

Footnotes

[^1]: The appellant, Francesco Di Nardo, died while this appeal was pending. An order to continue the appeal under r. 10.02 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 was sought by his wife, Amelia Miragliotta, in the appellants’ factum. [^2]: The matter proceeded below both as a trial of issues on the damages flowing from the injunction and a motion for summary judgment for recovery of the appellants’ expenditures. For ease of reference, all references to the judge below describe him as the trial judge. [^3]: Pirpamer v. Zanette, 2015 ONCA 723.