Court of Appeal for Ontario

Date: 20220223 Docket: M53161

Thorburn J.A. (Motions Judge)

BETWEEN

Amarjot Lamba and Chand Lamba Moving Parties

and

Michael Mitchell and Richard Bowring Responding Parties

Counsel: James R. D. Clark, for the appellants Monica Unger Peters, for the respondents

Heard: in writing

Endorsement

Relief Sought

[1] The moving party, Amarjot Lamba, is a real estate agent; the moving party, Chand Lamba, is his spouse. They seek an order to extend the time to seek leave to appeal by additional ten days.

The Dispute Between the Parties

[2] The moving parties put an offer on a house and entered into an agreement of purchase and sale but failed to close the transaction. They sought an extension of the closing date.

[3] The responding parties refused to extend the closing and instead, delivered their closing documents.

[4] Following the aborted closing, the moving parties commenced an action claiming specific performance with an abatement and moved unsuccessfully for a certificate of pending litigation.

[5] The responding parties counterclaimed for damages and an order that the purchasers’ deposit be forfeited. The responding parties re-sold the home and moved for summary judgment, requesting forfeiture of the moving parties’ deposit.

[6] The moving parties argued that they were entitled to rescission of the agreement of purchase and sale and damages, because of the “misrepresentation with respect to the square footage of the home” and because the responding parties had not satisfied them that the renovation had been completed in accordance with the applicable building permit.

The Decision on the Responding Parties’ Motion for Summary Judgment

[7] On May 18, 2021, the motion judge granted the responding parties’ motion for summary judgment and declared the moving parties’ $20,000 deposit forfeited to the responding parties.

[8] The motion judge acknowledged that the Multiple Listing Service (“MLS”) listing for the home misstated the main floor area of the home to be 2,500 – 3,000 sq. ft., when in fact the main floor area was 2,155 sq. ft. However, he found that the moving parties had personally attended the property to view the house and “were well-aware of its actual size and layout before they decided to buy what they had seen.” Further, he found that “Mr. Lamba could access materials with the correct area” as he had “access to a brochure and floor plan with the home’s correct area” which accompanied the MLS listing for the property.

[9] As such, the motion judge concluded that the discrepancy between the actual and misstated area in the MLS listing did not constitute a material misrepresentation that would have affected the moving parties’ decision to make an offer, and did not entitle the moving parties to rescind the agreement. He also held that the moving parties did not requisition a valid objection to title in respect of their concern with a building permit, and were not entitled to rescind the agreement on that basis. Finally, he held that the $20,000 deposit was not disproportionate to the purchase price, and it would not be unconscionable for the responding parties to keep the deposit given that the moving parties breached the agreement.

[10] The motion judge ordered that the moving parties’ $20,000 deposit be forfeited to the responding parties and he ordered costs against the moving parties in the amount of $10,856.48 inclusive of HST and disbursements, bearing interest of 2 percent per annum commencing April 1, 2021.

The Decision of the Divisional Court on Appeal

[11] The moving parties appealed to the Divisional Court on the issue of rescission for misrepresentation. On December 7, 2021, the Divisional Court dismissed their appeal. The Divisional Court held that,

The purchasers accept that the motion judge correctly set out the legal test with respect to rescission for misrepresentation. However, they take issue with the findings of fact, and application of the law to the facts, on the issue of reliance on the misrepresentation, as an inducement to purchase.

[T]he issue on this appeal is whether the purchasers … relied upon the square footage set out in the MLS listing, as they argue; or whether, as found by the motion judge, they relied upon the area and size of the home gleaned from their inspection. The latter was an inference of fact.

[T]he purchasers, through their solicitor, repeatedly affirmed their intention to complete the transaction, notwithstanding their discovery of the actual square footage of the home. While they evidently felt entitled to some compensation for the deficiency, the fact that they were intent on completing the purchase suggests that they based their decision to purchase on their satisfaction with the area and layout of the home, as observed during their inspection, and not on the representation of square footage contained in the listing agreement.

[12] The Divisional Court further held that,

The purchasers were aware of the actual square footage of the home at the time the affidavit was sworn. If their satisfaction with the area of the home at the time of purchase was based upon the represented square footage rather than the area and size of the home gleaned from their inspection, it is a reasonable inference that they would not have tried to prevent the home from being sold to others, and that Mr. Lamba would not have sworn that the property was “unique and exactly what we were looking for [in his affidavit sworn in support of the motion for a certificate of pending litigation]”

[13] The Divisional Court concluded that “the findings of the motion judge were reasonable and available to him on the evidence”.

[14] The Divisional Court dismissed the appeal and ordered costs against the moving parties in the amount of $8,000.

[15] The Notice of Motion for Leave to Appeal must be filed within 15 days of the decision of the Divisional Court on December 7, 2021. In light of the holiday period, the deadline for submitting a notice for leave to appeal was December 30, 2021. The moving parties failed to meet that deadline despite being represented by counsel. The moving parties claim that they intended to appeal within the requisite period and “thought they had more time than they did.” They claim they contacted three or four law offices before meeting their current counsel via Zoom on January 7, 2022 and signing a retainer agreement on January 11, 2022.

[16] The moving parties seek an order to extend the time to seek leave to appeal the Divisional Court decision.

The Test for Leave to Appeal

[17] An appeal lies to this court, with leave, from an order of the Divisional Court: Courts of Justice Act, R.S.O., c. C.43, s. 6(1)(a). A notice of motion for leave to appeal must be served within 15 days after the making of the order from which leave to appeal is sought: Rules of Civil Procedure, R.R.O. 1990, Reg. 194, r. 61.03.1(3).

[18] Pursuant to r. 3.02(1) of the Rules of Civil Procedure, this court may extend the time to seek leave to appeal “on such terms as are just”. The overarching principle is whether the “justice of the case” requires that an extension be given: Enbridge Gas Distribution Inc. v. Froese, 2013 ONCA 131, 114 O.R. (3d) 636, at para. 15. The court must take into account (i) whether the moving party formed an intention to appeal within the relevant period, (ii) the length of, and explanation for, the delay, (iii) any prejudice to the responding party, and (iv) the merits of the proposed appeal: Enbridge, at para. 15; Reid v. College of Chiropractors of Ontario, 2016 ONCA 779, at para. 14; and Krawczynski v. Ralph Culp and Associates Inc., 2019 ONCA 399, 69 C.B.R. (6th) 163, at para 9.

[19] The proposed appeal arises out of a decision of the Divisional Court exercising its appellate jurisdiction. I am mindful that appellate decisions of the Divisional Court are intended to be final: Sault Dock Co. v. Sault Ste. Marie (City) (1973), 1972 572 (ON CA), 34 D.L.R. (3d) 327 (Ont. C.A.), at p. 328. A further appeal to this court is exceptional: Enbridge, at para. 19.

Analysis and Conclusion

[20] Before granting leave, this court must be satisfied that the proposed appeal presents an arguable question of law, or mixed fact and law, requiring consideration of matters such as the interpretation of legislation; the interpretation, clarification or propounding of some general rule or principle of law; or the interpretation of an agreement or by-law where the point in issue involves a question of public importance. This court will also grant leave when the interests of justice require it, for matters of public importance, and to correct clear errors in a judgment below: Sault Dock Co., at p. 329; Enbridge, at paras. 20-22.

[21] The only issue on appeal to the Divisional Court was whether the purchasers relied on the square footage in the MLS listing or whether, as the motion judge found, they relied on the square footage gleaned from their inspection. That, as noted by the Divisional Court was an inference of fact. As noted by the Divisional Court,

The purchasers accept that the motion judge correctly set out the legal test with respect to rescission for misrepresentation. However, they take issue with the findings of fact, and application of the law to the facts, on the issue of reliance on the misrepresentation, as an inducement to purchase.

[22] Given that the moving parties reaffirmed their intention to complete the transaction after discovering the actual square footage, the Divisional Court found no error in the motion judge’s finding of fact that this was demonstrative of their decision to purchase knowing the actual square footage. Instead, the Divisional Court concluded that “the findings of the motion judge were reasonable and available to him on the evidence”.

[23] Like the motion judge, the Divisional Court concluded that,

The purchasers were aware of the actual square footage of the home at the time the affidavit was sworn. If their satisfaction with the area of the home at the time of purchase was based upon the represented square footage rather than the area and size of the home gleaned from their inspection, it is a reasonable inference that they would not have tried to prevent the home from being sold to others, and that Mr. Lamba would not have sworn that the property was “unique and exactly what we were looking for [in his affidavit sworn in support of the motion for a certificate of pending litigation]”

[24] The moving parties concede that the Divisional Court did not make an error of law. There was no apparent palpable and overriding factual error, and there was no error of law given the other factual findings. There is no reasonable possibility of success on appeal: Ravelston Corp. (Re) (2005), 2005 63802 (ON CA), 24 C.B.R. (5th) 256, (Ont. C.A.) at paras. 29-31. Moreover, there is no issue of public importance.

[25] A lack of merit alone is sufficient to dispose of a motion for an extension: Enbridge, at para. 16. For the above reasons, I conclude that the proposed appeal is highly unlikely to be granted if I allow an extension of time to file the leave application.

[26] However, some other relevant considerations outlined in Enbridge also militate in favour of dismissing the motion. I find that the moving parties did not form an intention to appeal within the relevant period. The moving parties were represented by counsel throughout the fifteen day period to seek leave to appeal. While the moving parties’ counsel communicated with the responding party during the fifteen-day period, counsel did not communicate any intention to seek leave to appeal. The moving parties acknowledge that they did not do so but claim they intended to appeal within the requisite period and “thought they had more time than they did.”

[27] I note that the moving parties have also failed to comply with two cost orders, without explanation: the costs ordered by the motion judge in the amount of $10,856.48 and the costs ordered by the Divisional Court in the amount of $8,000. There is no suggestion they are unable to pay. The responding parties note that they extended an offer to the moving parties to enable them to extend the time if the cost orders are paid, which offer was rejected by the moving parties. The moving parties’ failure to abide by two court orders without explanation is a consideration relevant to the justice of this case.

[28] For these reasons, the request to extend the time to seek leave to appeal is denied.

“J.A. Thorburn J.A.”