Court of Appeal for Ontario

Date: 2023-01-17 Docket: C70900

Before: Zarnett, Thorburn and Copeland JJ.A.

Between: Thi Phuc Nguyen Plaintiff (Appellant)

And: James Zaza and Tuyet Hanh Truong Defendants (Respondents)

Counsel: Ajay Duggal and Gurnam Singh Dhillon, for the appellant Vito Scalisi, for the respondents

Heard: January 11, 2022

On appeal from the judgment of Justice Heather A. McGee of the Superior Court of Justice, dated July 14, 2022.

Reasons for Decision

[1] This appeal arises out of a residential real estate transaction that did not close. The appellant appeals the judgment of the motion judge granting the respondents’ summary judgment motion, dismissing the appellant’s claim, granting the respondents’ counterclaim, ordering forfeiture of the appellant’s deposit of $50,000 plus interest to the respondents, and removing the caution and certificate of pending litigation on the property at issue.

[2] After hearing oral submissions, we dismissed the appeal, with reasons to follow. These are our reasons.

[3] The appellant raised grounds of appeal which sought to reargue issues raised before the motion judge, and challenge the motion judge’s factual findings. We are not persuaded that the motion judge made any palpable and overriding errors in her findings of fact. The appellant sought to characterize some of her grounds of appeal as errors of law, but we are not persuaded that the motion judge made any errors of law.

[4] The issues raised by the appellant focus on the fact that on December 19, 2020, the date the agreement of purchase and sale was signed, title to the property which was the object of the agreement was held in the name of James Stephen Zaza (“Zaza Senior”), who is the father of the respondent James Zaza (“Zaza Junior”)[1]. The parties listed on the agreement of purchase and sale were the appellant, Phuc Nguyen, as the buyer, and “James Zaza”, as the seller. The closing date in the agreement of purchase and sale was no later than 6:00 p.m. on November 15, 2021. The agreement stated that unless otherwise agreed in writing, time was of the essence in all respects. The agreement was conditional on the appellant arranging financing and a satisfactory home inspection. However, the appellant released both of those conditions by a waiver signed on January 6, 2021.

[5] On January 18, 2021, Zaza Senior transferred title of the property to Zaza Junior and the respondent Ms. Truong (Zaza Junior’s wife) for nominal consideration of $2.00.

[6] On November 15, 2021, the date of closing, the respondents tendered the documents required for closing. The appellant did not tender the purchase price required from her for closing. The motion judge found that at all times the respondents were ready, willing, and able to complete the sale in accordance with the agreement of purchase and sale and the amended agreement of purchase and sale (the latter document is discussed further below).

[7] The appellant argues that because title to the property was in the name of Zaza Senior at the time the agreement of purchase and sale was signed, the agreement must be read to be an agreement between Zaza Senior and the appellant. The appellant further argues that because it was (according to her) an agreement between Zaza Senior and the appellant, the respondent Zaza Junior, was not entitled to require her to complete the agreement of purchase and sale on the closing date. The appellant also argues that the respondents were required to obtain her consent for the January 18, 2021 transfer of title of the property from Zaza Senior to Zaza Junior and his wife. Based on these arguments, it is the appellant’s position that she was not responsible for the failure to close the sale.

[8] We do not accept the appellant’s submissions. There are several difficulties with them.

[9] First, the appellant’s submission that the December 19, 2020 agreement of purchase and sale was entered into by Zaza Senior as the seller is based on a factual assertion that is contrary to the findings of the motion judge. The motion judge made a finding of fact that the December 19, 2020 agreement of purchase and sale was entered into by Zaza Junior, not Zaza Senior. We see no basis to interfere with this finding, which is supported on the record before the motion judge.

[10] Second, the appellant’s argument is based on the premise that in order for Zaza Junior to enter into the agreement of purchase and sale on December 19, 2020, title of the property needed to be in his name at that time. This premise is incorrect. In order for a seller to be entitled to the sale price of a property at closing, the seller must be in a position to ensure that good title is conveyed to the purchaser: see 1854329 Ontario Inc. v. Cairo, 2022 ONCA 744, at para. 12. The motion judge found that Zaza Junior carried out all the obligations of the seller contained in the agreement of purchase and sale, including completing renovations to the satisfaction of the appellant which were a condition of the agreement of purchase and sale. She further found that because the property was transferred to his name and that of his wife in January 2021, he was in a position to pass legal title to the appellant on November 15, 2021, had the appellant tendered the purchase price required on closing.

[11] Third, the appellant was made aware of the change in title to the property and the additional seller prior to closing. With that knowledge, she entered into an amendment to the agreement of purchase and sale which addressed any issues about who held title and whose names were on the agreement of purchase and sale. The amendment corrected the legal description of the property and added the respondent Ms. Truong as a seller. It changed nothing else in the December 19, 2020 agreement of purchase and sale. In particular, time continued to be of the essence and the closing date of November 15, 2021 by 6:00 p.m. was not changed. At the time that the appellant executed the amendment to the agreement of purchase and sale, she had been aware since November 3, 2021 of the change in title of the property in January 2021.

[12] Thus, despite the arguments the appellant raised after the failed closing based on who held title on December 19, 2020, she entered into the amendment to the agreement of purchase and sale knowing that the title to the property had been transferred on January 18, 2021 to the respondents. The amendment maintained the appellant’s obligation to close the sale on November 15, 2021. The respondents tendered the documents required for closing on November 15, 2021. The appellant failed to tender the required purchase price.

[13] The appellant sought to fault the respondents for the signed amendment to the agreement of purchase and sale not being provided earlier than the date of closing. However, the factual findings of the motion judge do not support this argument.

[14] The agreement of purchase and sale gave the buyer until November 2, 2021 to examine title. The motion judge found that it was only after that period was expired, on November 3, 2021, that the lawyer conducting the transaction for the respondents was informed of the lawyer who was acting for the appellant on the sale. The lawyer acting for the appellant on the transaction did not have a copy of the agreement of purchase and sale. The lawyer for the respondents sent him a copy of it. On November 3, 2021, the lawyer acting for the appellant examined the title. On the same date, he requested an amendment to the agreement of purchase and sale to reflect the additional seller (Ms. Truong). The lawyer for the respondents agreed to attend to an amendment to the agreement of purchase and sale at her earliest convenience.

[15] The evidence before the motion judge regarding attempts to follow up on obtaining the amendment to the agreement of purchase and sale between November 4 and 12, 2021 was inconsistent as between the lawyer who acted for the respondents on the transaction and the lawyer who acted for the appellant. The motion judge considered the evidence and preferred the evidence of the lawyer who acted for the respondents. In particular, the motion judge found that the call logs produced by the software used by the lawyer for the respondents to log incoming and outgoing calls from her office corroborated her evidence. We see no palpable and overriding error in the motion judge’s finding that the office of the lawyer for the respondents sought on November 4 and 8, 2021 to follow up on the amendment with the lawyer for the appellant, but no response was received from the office of the lawyer for the appellant. We would not interfere with the motion judge’s finding that to the extent there was delay in finalizing the amendment to the agreement of purchase and sale, the respondents were not responsible for that delay.

[16] The motion judge correctly held that a seller is entitled to refuse an extension of time to close where a buyer seeks an extension because they do not have financing: 1179 Hunt Club Inc. v. Ottawa Medical Square Inc., 2019 ONCA 700, 438 D.L.R. (4th) 566; Domicile Developments Inc. v. MacTavish (1999), 175 D.L.R. (4th) 334 (Ont. C.A.). She also correctly relied on well-established law that in the absence of a specific term in the agreement of purchase and sale for the disposition of the deposit, the deposit is intended as security for the buyer’s performance of the contract, and is forfeited to the seller if the buyer fails to close: Benedetto v. 2453913 Ontario Inc., 2019 ONCA 149, 86 B.L.R. (5th) 1, at paras. 5‑6.

[17] The appellant also argued that the motion judge’s reasons are insufficient. We reject this submission. The motion judge gave extensive reasons which clearly explain her factual findings and legal analysis. Her reasons amply satisfy the three main purposes of reasons – explaining the decision to the parties, providing public accountability, and permitting effective appellate review: R. v. R.E.M., 2008 SCC 51, [2008] 3 S.C.R. 3.

[18] In sum, we see no error in the motion judge’s analysis or in her conclusion that the appellant was responsible for the failure to close the sale when she did not tender the purchase price on the closing date. We see no basis to interfere with the motion judge’s conclusion that as a result of the appellant’s failure to close the transaction, her claim should be dismissed, the respondents’ counterclaim should be granted, and the deposit released to the respondents.

[19] The appellant argued that the motion judge’s finding that the property was not unique was not supported by the evidence before her. This issue related only to the respondents’ request to remove the registered caution and certificate of pending litigation on the property even if their motion to dismiss the action failed. In light of our conclusion that there was no error in the motion judge’s granting of summary judgment in favour of the respondents and dismissing the appellant’s claim, there was no basis for the caution and certificate of pending litigation to remain on title. It is not necessary to address the issues related to uniqueness.

[20] As agreed by the parties, the appellant shall pay costs of the appeal to the respondents in the amount of $7,500, inclusive of disbursements and applicable taxes.

“B. Zarnett J.A.”

“Thorburn J.A.”

“J. Copeland J.A.”

[1] We mean no disrespect in referring to the two Mr. Zaza’s as “Zaza Senior” and “Zaza Junior”. We do so for purposes of clarity.