Court of Appeal for Ontario

Date: 2022-10-27 Docket: C70273

Judges: Simmons, Benotto and Favreau, JJ.A.

Between:

1854329 Ontario Inc., Bernard Boutet, Jean Boutet, John Shobridge and Lynne Shobridge Plaintiffs (Respondent)

And:

Angelo Cairo, Stouffville Glass Mirror and Aluminum 2012 Inc., also known as Stouffville Glass Mirrors & Aluminum (2012) Ltd. Defendants (Appellants)

Counsel: N. Cameron Murkar, for the respondent Barry S. Greenberg, for the appellants

Heard: October 24, 2022

On appeal from the judgment of Justice Jonathan Dawe of the Superior Court of Justice, dated January 5, 2022.

Reasons for Decision

[1] At the conclusion of the oral hearing, we dismissed this appeal for reasons to follow. These are our reasons.

[2] The appellant, Angelo Cairo (on behalf of the corporate appellant) [^1], failed to close the purchase of a property. He seeks to set aside the motion judge’s assessment of damages and obtain relief from forfeiture of the $400,000 deposit.

[3] Mr. Cairo agreed to buy a commercial building from the corporate respondent 1854329 Ontario Inc. (“185”) for $7.25 million. The respondents [^2], the Boutets and Shobridges, co-owners of the property, had executed powers of attorney allowing 185’s co-owner and president to sell their ownership interests for them.

[4] The appellant provided a $200,000 deposit. The agreement of purchase and sale (“APS”) was conditional upon financing, but also provided that, if the appellant waived the financing condition or gave notice that it had been fulfilled, he would have to provide another $200,000 deposit, for a total deposit of $400,000.

[5] Mr. Cairo received a term sheet from the Business Development Bank of Canada, setting out the terms on which the bank was prepared to loan him $6.65 million to fund his purchase. The term sheet specified it was “not a loan offer”. Upon receiving the term sheet, he waived the condition and provided the additional $200,000.

[6] The sale was set to close on April 7, 2020. On April 2, 2020, the bank changed the terms on which it was willing to loan the money. Mr. Cairo believed that the change was because the bank thought the pandemic would affect his business. In any event, the appellant, through his lawyer, informed 185’s counsel of the revised financing offer and requested a six-month extension of the closing date. 185’s counsel declined.

[7] The appellant then advised that he would not be able to close on April 7, 2020. 185 tendered and then sold the property six months later, for $75,000 less than the price the appellant had agreed to pay.

[8] 185 moved by way of summary judgment for an amount equal to the $400,000 deposit. The motion judge heard the motion in two stages: the breach of contract and then the assessment of damages. He assessed damages at $234,849.18. The motion judge also denied the appellant’s request for relief from forfeiture, finding that 185 was entitled to the full $400,000 deposit.

[9] No issue is taken on appeal with respect to the liability of the appellant for breach of contract. The issue is the quantum of damages and relief from forfeiture.

[10] The appellant submits that damages should have been reduced by two-thirds because 185 was a one-third owner only, and one-third of the damages represents the amount of 185’s loss.

[11] We do not agree.

[12] While the individual owners were not parties to the APS (and their claims were dismissed), 185 had the ability to deliver title to the appellant and would receive the entirety of the funds. That the motion judge left it to 185 to arrange payment to the Boutets and Shobridges is not the business of the appellant. If the sale had gone through, 185 would have been entitled to the full purchase price, not one-third of it. All that is necessary for a vendor to be entitled to the sale price is that they be in a position to ensure that good title is conveyed to the purchaser, even if they do not technically hold that title themselves. This is a full answer to the appellant’s submission: see Towne Meadow Development Corporation v. William Choo Chong (1993), 30 R.P.R. (2d) 228, at para. 6.

[13] With respect to relief from forfeiture, the motion judge considered the issues of proportionality and unconscionability as articulated in each of Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., [1994] 2 S.C.R. 490 and Stockloser v. Johnson, [1954] 1 Q.B. 476 (C.A. (Eng)). He determined that the deposit, at about 5.5% of the sale price, was commercially reasonable, not disproportionate to the respondent’s actual damages and that there was no evidence of inequality of bargaining power or of a substantially unfair bargain. Nor did the vendors act unreasonably.

[14] The appellant submits that the motion judge erred by concluding that the appellant should have foreseen the risks of the pandemic when the condition was waived and that there was no evidence to support this finding. Read as a whole, the motion judge’s reasons reveal that, by waiving the financing condition without cash in hand, the appellant assumed the risk of the transaction falling through. This was a risk not limited to the pandemic.

[15] The appellant also claims that the motion judge erred in holding that neither side had adduced evidence in regard to negotiations to salvage the transaction, when, in fact, there was evidence of negotiations and his position before the court. However, the motion judge’s actual finding was that the appellant “had adduced virtually no information about any negotiations”. Moreover, the motion judge found it significant that the appellant’s lawyer had not offered any compensation to 185 for the extension that the appellant sought.

[16] We see no error in the motion judge’s analysis and conclusion that the appellant has not met the burden of showing that this was an exceptional case where relief from forfeiture should be granted.

[17] The appeal is dismissed with costs in the amount of $15,000, inclusive of applicable taxes and disbursements.

“Janet Simmons J.A.”

“M.L. Benotto J.A.”

“L. Favreau J.A.”

[^1]: Mr. Cairo signed the agreement of purchase and sale at issue in trust for the corporate appellant. For the sake of simplicity, throughout these reasons, we refer to him as the main actor and appellant. [^2]: The motion judge dismissed claims advanced by the Boutets and Shobridges because they were not parties to the agreement of purchase and sale. Although named as respondents by the appellant, they did not participate in the appeal and are not respondents. We adopted the terminology for ease of reference.