COURT FILE NO.: 12-53280

DATE: 2012-02-21

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

2628 ST-JOSEPH BOULEVARD INC.

Applicant

– and –

FONDATION OLANGI-WOSHO

Respondent

Douglas G. Menzies, and Richard Nishimura, for the Applicant

Ronald Caza, for the Respondent

Francois Kabemba, for the Respondent

HEARD: January 20, 2012

AMENDED REASONS FOR JUDGMENT

This is an amendment to the Reasons for Judgment released January 24, 2012. The amendment occurs at paragraph 88 and is marked in bold.

kANE j.

[1] This application was argued as an emergency motion. The emergency arises as:

1. There is a disputed extension of a purchase and sale of real property owned by the respondent scheduled to close February 1, 2012;

2. The respondent alleges there was no extension of the contracted closing date of December 29, 2011 when the applicant purchaser was unable to close the transaction;

3. The respondent took measures to re-list the property for sale at the beginning of January, 2012, but is currently prevented from selling the land due to the registration of a Certificate of Pending Litigation obtained herein on January 6, 2012;

4. There are two mortgages register on title to the property from the respondent to lenders, the second of which is currently some four months in arrears. That lender has retained counsel which may lead to power of sale or foreclosure proceedings; and

5. There is an internal dispute within the respondent corporation as to who were and are the current Directors and which of those alleged Directors may instruct solicitors as to the agreement of purchase and sale transaction between these parties.

[2] The applicant negotiated throughout 2011 to purchase this property. It invested considerable time and resources in this purchase transaction because of the property’s location on the main street of a suburban area of Ottawa, its size and parking capacity permit the operation of a proposed restaurant business. I am satisfied that the property is sufficiently unique that specific performance is an available remedy.

[3] The first agreement of purchase and sale between these parties was signed in March, 2011. For some reason that transaction did not proceed. The purchaser persisted in negotiations which resulted in the latest contract of purchase and sale dated September 20, 2011 (the “Contract”).

[4] The applicant after signing the Contract has conducted considerable work towards completing this transaction, including:

1. Obtaining an agreement to lease the basement of the property to the current occupier;

2. Negotiating terms of possession with the vendor to permit it to remain in the property as tenant for several months after closing;

3. Obtaining a mortgage commitment in the amount of $1,800,000 against a purchase price of $2,270,000; and

4. Obtaining a Phase 1 environmental audit of the property.

[5] The original closing date in the Contract is December 28, 2011. At the request of the purchaser, the parties on or about December 5, 2011 extended the closing to December 29, 2011. The purchaser expressed the necessity of an additional day due to office closures during the holidays of its mortgagor, Alterna, and the lawyers of such lender on December 27 and 28, 2011.

[6] The Contract states that time is of the essence in this transaction.

[7] The applicant argues that:

1. The respondent failed to perform its obligations under the Contract prior to December 29, 2011;

2. The respondent demonstrated an early intention to avoid closing the transaction amounting to anticipatory repudiation of the contract which it argues is now scheduled to close on February 1, 2012; and

3. The purchaser seeks judicial recognition of the February 1, 2012 closing date, as extended by 2 weeks to match the loss of time resulting from the adjournment granted to the respondent to file responding materials and conduct cross- examinations.

[8] The respondent, as represented by Mr. Kabemba, supports the applicant and seeks an order that his office be permitted to act for the vendor and close this sale on February 1, 2012 pursuant to the Contract as amended to include such extended closing date. He further seeks an order that on closing, the vendor is to pay off the first two mortgages and all creditors of the respondent, including some $249,000 indebtedness claimed owing to Mr. and Mrs. Kabelu (Kabelu Debt). They are two directors or former directors of the respondent from whom he receives instructions. The Kabelus argue that prevention of the closing on these terms will result in the imminent subsequent sale of this property with the residual proceeds of sale going to the Democratic Republic of Congo to avoid payment of the Kabelu Debt or, will result in the seizure and sale of the property by its secured lenders for payment default.

[9] The respondent, as represented by Mr. Caza, submits that;

1. The applicant did not have its mortgage advance in hand and was therefore unable to close this transaction on December 29, 2011;

2. The applicant communicated to the respondent that it had not received the mortgage funds on December 29, 2011, failed to tender on the vendor and for these reasons relieved the vendor of any obligation to tender or demonstrate its ability to close;

3. The Contract accordingly terminated December 29, 2011 due to the purchaser’s inability to complete the transaction;

4. An extension of the December 29, 2011 closing date was requested but denied by the respondent;

5. Because of the sudden alleged change of lawyers by the respondent to Mr. Kabemba, who shortly before issued a Statement of Claim on behalf of the Kabelus against the respondent, the applicant had reason to but failed to make inquiry as to the alleged change of solicitors and the extension agreement February 1, 2012 was made without the respondent’s authority and is not binding on the respondent.

VENDOR AND PURCHASER OBLIGATIONS UNDER THE CONTRACT

[10] Both the vendor and the purchaser pursuant to the Contract have a legal obligation to sell and buy, respectively. That obligation obliges each of them to perform all that is legally and procedurally required to effect that stated and underlying purpose of the contract, see Phinny v. MaCauley, [2009] O. J. No. 1260 (S.C.J.). The actions of each party are reviewable in determining how this Contract failed to conclude.

[11] In LeMesurier et al. v. Andrus (1986), 54 O.R. (2d) l, the Court of Appeal stated:

Vendors and purchasers owe a duty to each other honestly to perform a contract honestly made. As Middleton J. put it in Hurley v. Roy (1921), 1921 CanLII 522 (ON CA), 50 O.L.R. 281 at p. 286, 64 D.L.R. 375 at p. 377: ‘The policy of the Court ought to be in favour of the enforcement of honest bargains.’

[12] In Suntract Holdings Ltd. v. Chassis Service & Hydraulics Ltd. (1997), 36 O.R. (3d), p. 328, Justice Lax stated:

The very broad language of rescission clauses, such as the one here, has been qualified by judicial consideration of their purpose and effect in circumstances of the particular transaction under consideration by the court.

[13] Lax J. in Suntract, supra, further stated that the vendors conduct are to be carefully scrutinized for the reason expressed by Middleton J. (as he then was) in Hurley v. Roy (1921), 1921 CanLII 522 (ON CA), 50 O.L.R. 281 at p. 285, 64 D.L.R. 375 (C.A.), namely:

This provision was not intended to make the contract one which the vendor can repudiate at his sweet will. The policy of the Court ought to be in favour of the enforcement of honest bargains, and it should be remembered that, of the enforcement of honest bargains. And it should be remembered that, when a contract deliberately made is not enforced because of some hardship the misfortune to the shoulders of the other party, though he is admittedly entirely innocent.

[14] What was the position of the parties to the above legal obligation to implement the sale and purchase as of December 29, 2011?

[15] The applicant throughout 2011 wanted and acted in a manner consistent with its stated position that it wanted to buy this property. Upon signing the Contract, it carried out the actions above mentioned.

[16] The applicant paid up front fees to obtain and maintain its Alterna mortgage commitment in place. Due to the holidays between December 27 and 31, Alterna made special arrangements to have staff present to have the mortgage advanced for December 28 but not December 29, 2011.

[17] The applicant submitted its letter of 19 requisitions on October 21, 2011. The respondent never replied in correspondence to 17 of the 19 requisitions.

[18] Several of the 17 remaining requisitions are customarily answered by directing the purchaser to satisfy itself. There are other requirements as requisitioned which the respondent ignored.

[19] The respondent’s original solicitor in his affidavit does not deny the allegation that he failed to prepare and provide the purchaser with a statement of adjustments which specifies the amount payable on closing.

[20] The vendor’s solicitor does not allege that he had obtained by December 29, 2011, instructions from and a signed discharge of mortgage from the two secured lenders on title.

[21] He does not allege that he had requisitioned or obtained a discharge statement from each mortgagee or that the vendor agreed with the amounts claimed to discharge. Nor does he state that such statements had or could be provided to the purchaser which is required as certified cheques in those amounts normally would be obtained by the purchaser payable to such mortgagees on closing.

[22] He does not allege that the transfer deed or Assignment of Rent document was prepared and signed as of December 29, 2011.

[23] The vendor responds that the above points are irrelevant as the applicant advised on approximately December 14, 2011 that it would not have the mortgage advance by December 29, 2011 due to outstanding conditions in the Alterna mortgage commitment. The purchaser’s solicitor, Mr. Coulson, in his affidavit denies this statement.

[24] The Kabelus on October 4, 2011 in writing resigned their positions as Directors, officers and their responsibilities within the respondent. Mr. Kabemba, as their counsel, advised the vendor on December 14, 2011 that he had instructions to recover the Kabelu Debt from the respondent.

[25] The Kabelus on December 12, 2011 issued a Statement of Claim against the vendor claiming $249,000 and sought a Certificate of Pending Litigation to be registered against the property. No certificate was subsequently registered. The action was withdrawn on December 23, 2011.

[26] Mr. Coulson acknowledges that he and vendor’s lawyer spoke via telephone on December 14, 2011. He states Mr. Kilongozi advised that the Kabelu Claim had been communicated to the vendor including their intention to seek a Certificate of Pending Litigation which would be registered against title. Mr. Coulson acknowledges that as of that date there were certain things the purchaser had to complete under their commitment to Alterna but he did not say that that could not be completed or that he could not be in mortgage funds for the 29th. The respondent did not during its cross-examination challenge Mr. Coulson as to this statement.

[27] The Kabelus’ attempted on December 15, 2011 by written notice to the respondent to withdraw their resignations and resume their positions as Directors. They wanted this sale to proceed and stated that the balance of the proceeds of sale must remain in trust pending the outcome of their action. Counsel for the Kabelus stated new solicitors for the vendor should be appointed to complete the sale transaction unless Mr. Kilongozi agreed to take instructions as to the closing from Mr. Kabelu.

[28] The notice to resume their position as Directors is not legally effective. Election to the Board requires a vote by members of the corporation. Resignation of Directors under the Letters Patent of the respondent are effective immediately and do not require acceptance by the respondent. The respondent on November 30, 2011 notified Corporate Affairs of these two resignations and provided a list of the then current Directors of the corporation.

[29] The purchaser’s real estate agent sent to the purchaser on December 16, 2011 a copy of a revocation of a power of attorney. In this, Mr. Kabelu because of his return from the DR of Congo to Ottawa, revokes his February 2011 power of attorney to Mr. Kandolo and the other Directors of the respondent. Mr. Kabelu states therein that he will resume his role as Director. It is not disputed that Mr. Kabelu had been the senior representative and Director of the respondent for a number of years until he left for several months in 2011 to spend time in the DR of Congo.

[30] The vendor’s lawyer sent a copy of the Kabelu statement of claim to Mr. Coulson on December 16, 2011, and stated that the claim was disputed by the vendor, a certificate against title was anticipated shortly and resolution of the action would take considerable time. The vendor therefore asked the purchaser to consent to termination of the Contract.

[31] The purchaser on December 16, 2011 responded to the anticipated registration by the Kabelus of a certificate against title by suggesting that the closing be extended to February 29, 2012. The purchaser wanted to purchase.

[32] If Mr. Coulson had in fact told Mr. Kilongozi on December 14 that the purchaser could not be in mortgage funds by December 29 as alleged, Mr. Kilongozi could have simply replied to the purchaser on December 16 and refused its extension request. Instead, this extension request was ignored and not replied to.

[33] The purchaser’s real estate agent on December 16, 2011, sent the purchaser a copy of Mr. Kabelus notice to the vendor withdrawing his resignation as Director, as head of the vendor corporation and their resumption of those positions.

[34] On December 17, 2011, the vendor notified the Kabelus that they could not resume their positions as Directors.

[35] Faced with silence from the vendor to the purchaser’s December 16th request for an extension of closing to February 29, 2012, the purchaser repeated its request for an extension of the closing in writing to the vendor’s Mr. Kilongozi, on December 21, 2011, but did not receive a reply thereto until December 23, 2011.

[36] On Friday, December 23, 2011:

1. Counsel for the Kabelus, Mr. Kabemba, sent a Notice of Change of Lawyer to the purchaser’s solicitor stating that he was appointed to replace Mr. Kilongozi as solicitor of the vendor. This notice is signed by the Kabelus;

2. Mr. Kabemba, being instructed by the Kabelus, spoke to Mr. Coulson and advised that the vendor would agree to extend the closing to January 16, 2012, and that the Kabelu Statement of Claim had been withdrawn, including the request for a certificate of litigation;

[37] Mr. Kilongozi, wrote to Mr. Coulson just before 3 p.m. on Friday, December 23, and advised that the vendor refused the extension request to February 29 and that the closing date would remain December 29, 2011.

[38] Mr. Coulson alleges that it was virtually impossible by the afternoon on Friday, December 23, to close on December 29, 2011, given what remained to be done and the intervention of a holiday weekend followed by two statutory holidays and the absence of people at work between then and Thursday, December 29, 2011.

[39] On December 23 or December 24, Mr. Kilongozi received from the vendor’s agent, a copy of the notice terminating him as solicitor of the vendor and appointing Mr. Kabemba.

[40] On Saturday, December 24, 2011, Mr. Kilongozi advised Mr. Kabemba that the notice of change of solicitor was invalid.

[41] On Wednesday, December 28, 2011, Mr. Kilongozi received written notice from Messrs. Kabemba and Coulson that the purchaser and vendor had agreed to extend the closing to February 1, 2012.

[42] Mr. Kilongozi telephoned Mr. Coulson on Thursday, December 29, and told him that Mr. Kabemba had no instructions from the vendor to negotiate an extension and that the alleged extension agreement to February 1 was not binding on the vendor.

[43] Mr. Coulson in his affidavit states his belief that there was nothing in the transaction preventing a mortgage advance for December 29. In fact, there was.

[44] The purchaser, Mr. Pearson, attaches to his affidavit emails from Alterna and its real estate agent. I am conscious that these emails are not sworn allegations in an affidavit. Mr. Pearson however was also present at one or more meetings referred to in one email and his affidavit generally confirms the information as to several meetings with respondent’s representatives after the signing of the Contract as to the terms of the vendor occupying the space after closing and an attitude expressed by the vendor that it had flexibility whether to proceed with the closing pursuant to the Contract. The agents repeated advised the vendor that closing was not optional.

[45] The email exhibit from Alterna however states that that lender had arranged interruption of holidays to come to work to ensure the mortgage funds would be advanced on December 28, 2011, but that Alterna, upon learning about that extended closing date on Friday, December 29, 2011, could not advance on Thursday, December 29 as its offices were closed from December 23 until December 28, 2011. This email indicates that Alterna had not been notified in time of the December 5th amendment to the 29 in order to accommodate that latter date.

[46] Neither party tendered on the other on December 29, 2011.

[47] The vendor was required to present a full evidentiary basis on this application to demonstrate that it had taken the requisite steps and was prepared to convey title on the closing date. It failed to present evidence it was in a position to close this transaction and had things such as a transfer, statement of adjustments, mortgage statements and discharges prepared or signed for the closing. Suggesting as it does that the remaining work and exchange of documents could, after December 23, be accomplished between Wednesday, December 28 and Thursday, December 29, at this time of the year, is inaccurate given the relative size of the transaction between two corporations and involving the parties and multiple lenders.

[48] The vendor cannot use its default to frustrate the purchaser’s preparedness for closing and then successfully rely on the latter.

[49] The evidence on the other hand is that Alterna under its loan commitment was in a position to advance the funds on December 28, but not December 29, 2011.

[50] The conclusion therefore is that neither party was in a position to close on December 29 but that does not decide this matter. The questions remain whether time on December 29 remained of the essence and whether the extension to February1 is enforceable.

[51] The vendor put forth no reason for delaying its response to the purchaser’s requests of December 16 and 21 to extend the closing. That response sent December 23, 2011 only came in after notice that Mr. Kilongozi was replaced by a new solicitor. Silence to those extension requests appears intentional by the vendor to expend the little time left to complete the steps necessary to close the transaction by December 29.

[52] The purchaser was not responsible for the internal dispute within the vendor corporation which surfaced on December 14, 2011 with notice of a pending request in the Kabelu action for a certificate of litigation. Rather than acknowledging that dispute as its internal responsibility, the vendor seized upon its internal difficult as a reason to terminate the Contract with an arm’s length purchaser.

[53] Upon learning that the Kabelu claim was withdrawn, the vendor maintained its inaction and accepted no responsibility for the resulting time and disruption to the purchaser.

[54] Upon learning that the former head of the foundation had taken matters into his own hands in order to complete the sale, the vendor pushed him aside and refused an extension.

[55] The affidavit of Mr. Coulson coupled with the email from Alterna satisfies me that the purchaser was in a position to obtain the mortgage advance for December 28, 2011, and was otherwise ready to close but for the lack of work and information not yet provided to it by the vendor. The unavailability of those funds for December 29 is not surprising given the time of year involved.

[56] What the vendor should have done as early as December 14, as a party obligated to work effectively to close the transaction, was to propose a shorter closing date to get beyond the January 1st weekend or propose to place the residue of the proceeds of sale in trust until the Kabelu claim was dealt with consensually or by the courts. The difficulty is the lack of evidence of efforts of the vendor to preserve and complete its obligations in the Contract.

[57] Based on this evidence, I am satisfied that the vendor failed to perform its responsibilities to place itself in a position to be able to close this transaction pursuant to the Contract. The vendor impliedly communicated to this purchaser before December 29 that it was seeking to avoid closing this sale. Refusing to respond to requisitions and requests to extend the closing date communicated an implied renunciation of the Contract, see McCallum et al. v. Zivojinovic, [2007] O.J No. 2341(C.A.), para 9.

[58] This implied renunciation by the vendor relieved any requirement of the purchaser to tender, see Williston on Contracts, 3rd ed., para. 1819, at p. 447 and Jones et al. v. Barkley (1781), 2 Dougl. 684, 99 E.R. (H. L.) 434 694.

[59] As soon as the vendor repudiated this contract, the purchaser was entitled to bring an action for a declaration that the contract is binding and enforceable and for specific performance thereof, see Kloepfer Wholesale Hardware & Automotive Ca Ltd., v. Roy, 1952 CanLII 8 (SCC), [1952] 2 S.C.R. 465 and McCallum, supra, para 15.

[60] It is a principle of law that no one can take advantage of their own act or default to avoid closing a contract and then rely upon those acts to avoid their contractual obligation or responsibility, see New Zealand Shipping Co. v. Société des Ateliers et Chantiers de France, [1919] A.C.1 at 8 and McCallum, supra at para 19.

[61] The resignation and the re-introduction of the Kabelus as Directors etc. are a side issue owned by the vendor and do not alter my above conclusion.

[62] The purchaser, while having access to the mortgage funds for December 28, did not have them on the agreed upon closing of December 29. The vendor is not responsible for that.

[63] Where parties act so as to indicate that the contractual term of time being of the essence is not so, the courts will not allow one party thereafter to insist on that term as a defence to its inaction and as a sword to get out of the contract. The vendor agreed to a one day extension due to availability of parties in the holiday period. It delayed responding to a further requested extension.

[64] Dwards-Decoito v. Maple View Building Corp., [2005] O.J. No. 5486, (S.C.), is an example of the court not enforcing a time of the essence term and closing date against the interest of an purchaser acting bona fide and requiring a reasonable extension to permit its performance.

[65] Matthews v. McVeigh, 1954 CanLII 118 (ON CA), [1954] O.R. 278 (Ont. C.A.), is a further example of the court considering a time of the essence clause and comparing it to the actions of the party seeking its enforcement. The court in that case granted an extension of time to allow the other party to remedy a default.

[66] Where one party to the transaction has been diligent in its attempt to perform its obligations in the contract, the court will not allow interference of the other party delaying completion of the contract to rely on time of the essence to avoid the contract, see Salama Enterprises (1988) Inc. v. Grewal, 1992 CanLII 4035 (BC CA), [1992] B.CJ. No.703, (B.C.C.A.) p.5.

[67] The vendor’s lack of performance in this case of its obligations under the Contract prevents its reliance and refusal on December 29 to a short extension beyond the holiday week to permit closing to occur. Equity prevents this vendor from its reliance on the absence of an extension beyond December 29.

[68] There is the further issue of the alleged extension to February1, 2012.

[69] The vendor argues that the purchaser should have made inquiries after being served with the notice of change of solicitors on December 23, 2011 which would have disclosed that Mr. Coulson could not rely on dealings with Mr. Kabemba as agent of the vendor. That ignores that Mr. Coulson’s second request for an extension on December 21 was not responded to until December 23. Faced with the continuing silence from Mr. Kilongozi, the vendor then faults the purchaser for accepting an extension offer from the former head of the vendor who announced his return as head of the vendor community.

[70] The vendor argues that the purchaser did not inquire behind the notice changing vendor’s solicitor seen to the purchaser on December 23, 2011 but instead relied upon that notice of change in an attempt to salvage the transaction during this holiday period. The vendor’s inaction is to blame for creating this situation regarding its affairs. Faced with the vendor’s silence, the purchaser did what it could to save the transaction with the returning head, apparently of the vendor organization.

[71] The vendor’s complaint on this issue lacks credibility as it failed to demonstrate its intention to complete the transaction and now faults others for trying to do so.

[72] The vendor’s internal management of its affairs, before and after the resignation of Mr. Kabelu, is not in accordance with the Articles of the vendor corporation or the governing legislation. There is no evidence the purchaser was aware of that. The purchaser dealt with the representatives of the vendor which that corporation allowed to be presented for years as its directing mind.

[73] The notice of change of solicitors sent to the purchaser’s lawyer accompanied the notice that the Kabelu action and the request for a certificate had been withdrawn thereby removing the suggestion of a possible conflict if Mr. Kabemba continued to act for the Kabelus in a law suit against the vendor and for the vendor in the sale of its land.

[74] The notice of change had a signed direction to Mr. Kabemba attached to it. It was signed by the Kabelus as Pastors and legal representatives of the respondent. Mr. Kabelu had been the pastor or religious leader of this faith community for years. Mr. Pearson during negotiations knew that several of the community leaders had been in the Congo for several months.

[75] What must not be forgotten is that normally a notice of change of a lawyer is important to the lawyer being taken off the file and his or her client who made the decision to change lawyers. That change notice normally however is of considerably less or of no importance to the lawyer on the other side of the file who is retained to implement the Contract for the purchaser whose mandate is to close the purchase of the land for his client. To that extent, the purchaser’s lawyer receiving this notice of change had common purpose with the vendor’s new lawyer which previously had not been the case.

[76] There is no evidence that Mr. Coulson as solicitor to the purchase had any information as to the power struggle then occurring internally within the vendor corporation. Given the notice of withdrawal of the lawsuit coupled with the representation that Mr. Kabelu had assumed the position as pastor of this community, Mr. Coulson had no reason to doubt the validity of the notice of change of lawyers sent to him on December 23, 2011. A change of lawyers is not a foreign event in commercial transactions. Such a change is a welcomed signal when the previous lawyer failed to answer requisitions, failed to respond to requests for extensions, failed to forward repair estimates provided for in the Contract and needed to close the sale and failed to provide mortgage discharge statements.

[77] The above notice of change sent to Mr. Coulson on Friday, December 23, 2011, is to be compared to the Thursday, December 15 notice from Mr. Kabemba to Mr. Kilongozi that the latter is from that point to take vendor instructions from Mr. Kabelu or he will be replaced as solicitor.

[78] Mr. Kilongozi states that he only call Mr. Kabemba to object to the change of lawyers on December 24 and never contacted Mr. Coulson until December 29 about the change of lawyer notice, after Mr. Kilongozi received notice that he had been replaced as solicitor.

[79] From December 15 until December 24, Mr. Kilongozi does not object to the direction that he take instructions as to the closing of the transaction from Mr. Kabelu. If such change of the instructing representative within the respondent to Mr. Kabelu, was not objectionable to Mr. Kilongozi for 10 days, namely until December 24, the vendor cannot now blame the purchaser in the person or its lawyer, for accepting a notice of change and acting upon it in the form of agreeing to an extension date.

[80] Mr. Kilongozi does not object to Mr. Kabemba until December 23, or to Mr. Coulson until December 29; namely, not until after he was replaced as the vendors’ lawyer. The issue was and is the closing of this transaction, not Mr. Kilongozi’s retention of the file.

[81] The vendor submits that Mr. Coulson should have been on notice that he needed to inquire behind the representations made to him as to the change of the vendor’s solicitor but asks not one question on this subject during its cross-examination of this lawyer. The vendor strategically decided to simply make this argument on the background facts and not confront the witness thereby avoiding what he understood at the time.

[82] For the above reasons, I find that the purchaser had no reason to question the ostensible authority of the representations made to Mr. Coulson that the vendor had changed its lawyer and was agreeable to an extension of the closing date to February 1, 2012. Mr. Kabelu’s representations to the purchaser, as conducted through lawyers, communicated ostensible apparent authority by the vendor allowing Mr. Kabelu to agree on its behalf to an extension of the closing date.

[83] Had Mr. Kabelu in fact resumed his position as the head of the respondent and as a Director, he would in dealings with third parties, have appeared to have the requisite authority to authorize an extension of the closing date, particularly at this time of the year. No lawyer in Mr. Coulson’s position in a commercial transaction would ask for written authority from the respondent’s Board of Directors authorizing that extension before agreeing to one.

[84] For these reason, I do not accept the respondent’s position that the purchaser failed to conduct an inquiry behind the notice of change of lawyers to Mr. Kabemba and that the extension to February 1, 2012 is invalid. The vendor’s delayed reaction to the representations being made by or on behalf of Mr. Kabelu until after the extension was agreed to in the name of the vendor is an issue between the respondent and Mr. Kabelu. The extension is an amended term of the Contract enforceable by the purchaser.

[85] The respondent corporation therefore is ordered to complete the sale of this property to the purchaser under the terms in the Contract subject to the closing date as hereafter provided.

[86] Time has been lost since December 29 as a result of holidays and within this proceeding. The Notice of Application was returned ex parte on January 6, 2012, adjourned to January 12 and then adjourned until January 20, 2012 to permit the filing of responding affidavits and to complete cross-examinations. The applicant did not cause these delays and is as of January 24, 2012, left with an unreasonably short period to obtain mortgage funds deal with the remaining work to be done.

[87] The vendor will need a solicitor to assist it in the closing of this transaction. Due to the differences between the members of the vendor community who previously instructed Mr. Kilongozi nor Mr. Kabemba, I am not going to order that either of them will be the vendor’s solicitor to complete this transaction. The parties shall agree upon the selection of the lawyer to represent the vendor in the completion of this sale by 17:00 on Wednesday, January 25, 2012, failing which counsel may meet with me at 13:00 hours on January 26, 2012 and I will select the vendor’s solicitor.

[88] The closing date under the Contract will be Friday, February 17, 2012.

[89] On closing, the vendor’s solicitor shall use the proceeds of sale and pay:

1. All registered encumbrances on title;

2. All outstanding utilities charges and property taxes of the property, and

3. Adjustments as reflected on the statement of adjustments, real estate commission and legal fees related to this sale of property.

[90] Any remaining balance of the proceeds of sale shall be paid into court until consent to the release thereof is obtained from the respondent corporation and the Kabelus, or court order.

[91] The purchaser has been successful on the application and would normally be entitled to its costs on a partial indemnity basis. Subject to submissions, I would not, given the evidence, think that the Kabelus are entitled to costs in this action, nor would be subject to a cost award against them in favour of the vendor or the purchaser. I am not prejudging these questions but simply sharing my initial reaction without the benefit of submissions from counsel. Counsel may make brief written cost submissions by February 10, 2012.

Kane J.

Communicated to counsel: February 17, 2012

Released: ** February 21, 2012**

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

2628 ST-JOSEPH BOULEVARD INC.

Applicant

– and –

FONDATION OLANGI-WOSHO

Respondent

AMENDED REASONS FOR JUDGMENT

Kane J.

Released: ** February 21, 2012**