Court of Appeal for Ontario
Date: 20220112 Docket: C68798
Rouleau, van Rensburg and Roberts JJ.A.
Between:
Michele Amatuzio and Magdalena Amatuzio Applicants (Appellants)
And:
650 Atwater Avenue Ltd. Respondent (Respondent)
Counsel: Obaidul Hoque, Zaheed Moral and Taheratul Haque, for the appellants Micheal Simaan, for the respondent
Heard: January 4, 2022 by video conference
On appeal from the order of Justice Heather A. McGee of the Superior Court of Justice, dated October 13, 2020.
Reasons for Decision
[1] The appellants contracted with the respondent to purchase a new condominium unit in a residential development that the respondent was building in Mississauga. After the respondent required a number of extensions, the interim occupancy date was set for June 27, 2019. The appellants were concerned that the unit was not in fact ready for occupancy, and there were communications between legal counsel for the parties. Ultimately, the appellants’ purchase was not completed and eventually the unit was sold to another purchaser.
[2] The appellants brought an application seeking a declaration that the respondent had breached the agreement of purchase and sale (the “APS”) and for a reference to determine damages.
[3] The central issue in the application was whether the respondent complied with its obligations under a Tarion Warranty Corporation Addendum that formed part of the APS. Section 9(a) of the Tarion Addendum provides as follows:
- Ontario Building Code – Conditions of Occupancy (a) On or before the Occupancy Date, the Vendor shall deliver to the Purchaser: (i) an Occupancy Permit (as defined in paragraph (d)) for the home; or (ii) if an Occupancy Permit is not required under the Building Code, a signed written confirmation by the Vendor that all conditions of occupancy under the Building Code have been fulfilled and Occupancy is permitted under the Building Code.
“Occupancy Permit” is defined as “any written or electronic document, however styled, whether final, provisional or temporary, provided by the chief building official (as defined in the Building Code Act ) or a person designated by the chief building official, that evidences that permission to occupy the home under the Building Code has been granted”.
[4] The application judge concluded that, notwithstanding that an Occupancy Permit dated June 27, 2019 was in fact provided for the unit by the respondent’s lawyer to the appellants’ lawyer on July 9, 2019, on a plain reading of the Building Code, an occupancy permit was not required for the purchasers’ unit “because a condominium development with multiple floors does not fall within the definition of a residential building that requires an occupancy permit”. She concluded that the June 27, 2019 letter from the builder’s representative was sufficient: at para. 28.
[5] The appellants assert that there was no evidence to support the application judge’s conclusion that no occupancy permit was required under s. 1.3.3.4 of Part C of the Building Code [1], which was based on statements of the respondent’s counsel during oral argument, and that the application judge erred in failing to consider s. 1.3.3.4 in the context of the other provisions of s. 1.3.3. During oral argument on the appeal we asked the respondent’s counsel to take us to the evidence that supported this conclusion. He referred to photos of the buildings under construction and drawings in the record to assert that no occupancy permit was required, but suggested at the same time that the evidence was not as clear as the application judge suggested.
[6] It is unnecessary for the disposition of this appeal to determine whether an occupancy permit was required. Even if the application judge was correct in concluding that no occupancy permit was required, we agree with the appellants that she made a palpable and overriding error in her conclusion that the June 27 letter was delivered before closing, on June 26, along with the pre-delivery inspection form, and that this satisfied the requirement under s. 9(a) of the Tarion Addendum.
[7] There is no evidence that the letter was “delivered” to the purchasers as required by the terms of the Tarion Addendum on June 26, or at any time until the responding materials were delivered in these proceedings. Rather, the evidence of the builder’s representative was that the letter, together with the key to the appellants’ unit, was placed in an envelope that was available for pick up on closing. The respondent’s counsel refers to an answer to an undertaking with respect to evidence that the letter had been delivered, which simply states that, according to the respondent’s real estate solicitor, all purchasers’ solicitors were informed that the key and “any final instructions” would be available “upon receipt of all closing documents” and funds. At no time during the exchange between the parties’ counsel with respect to whether an occupancy permit was required did the respondent’s counsel indicate that such a letter existed or ensure that it was delivered. To the contrary, he took the position that the unit was cleared for occupancy by the City and that the appellants’ lawyer should satisfy himself that occupancy was permitted.
[8] Accordingly, we allow the appeal. The respondent failed to comply with s. 9(a) of the Tarion Addendum until July 9, 2019, and the appellants were entitled to set a new date for the interim closing. The evidence is that they attempted to do so, and had provided evidence that they were in funds and ready to close once the occupancy permit was provided.
[9] The order below and the order for costs against the appellants are set aside. The appellants are entitled to an order declaring that the respondent breached the APS by failing to close the interim purchase and sale of their unit, with a reference to determine damages.
[10] The appellants are entitled to their costs of the appeal, which we fix at $7,500, inclusive of HST and disbursements, and costs of the proceedings in the court below fixed at $15,000 plus HST.
“Paul Rouleau J.A.”
“K. van Rensburg J.A.”
“L.B. Roberts J.A.”
[1] The application judge referred to s. 1.3.3.3, which the parties agree was in fact a reference to s. 1.3.3.4, which was relied on by the respondent at the hearing of the application.