COURT FILE NO.: CV-10-400070
DATE: 20121105
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
SUNNYDENE HOMES INC.
Plaintiff
- and -
GLYNN SHOULDICE and CANDICE SHOULDICE
Defendants
Evan L. Tingley, for the Plaintiff
Glynn Shouldice, Appearing in Person and on behalf of the Defendant Candice Shouldice
HEARD: October 31, 2012
STEVENSON J.
REASONS FOR DECISION
Introduction
[1] This is a motion for summary judgment brought by the Plaintiff, Sunnydene Homes Inc. (“Sunnydene”). Sunnydene submits that there is no genuine issue requiring a trial as there is no valid defence put forward by the Defendants, Glynn Shouldice (“Mr. Shouldice”) and Candice Shouldice (“Mrs. Shouldice”).
Factual Background
[2] Sunnydene was the owner of a property known municipally as 25 Sunnydene Crescent, Toronto, Ontario (the “Property”).
[3] Mrs. and Mrs. Shouldice, as purchasers, entered into an Agreement of Purchase and Sale (the “Agreement”), dated December 31, 2007 with Sunnydene as vendor, to purchase the Property for $4,785,000.00 The purchase price was inclusive of 6% GST, therefore the actual purchase price was $4,514,150.94.
[4] The Agreement originally provided for a closing date of January 30, 2008; however, the Agreement was amended further on January 4, 2008, January 17, 2008, February 4, 2008 and March 5, 2008. Pursuant to the March 5, 2008 amendment, the parties agreed that the transaction would be completed on March 30, 2008
[5] The final amendment to the Agreement, dated March 5, 2008, added the following paragraph:
The Buyers hereby confirm that instructions have been given to their respective bankers and appropriate banking arrangements have been made providing for the balance of the purchase price to be remitted to: Sotheby’s International Realty Canada, Brokerage [in trust], Royal Bank of Canada, Bloor and Yonge Branch in Toronto.
[6] The Agreement did not require that the Defendants pay a deposit and one was never paid.
[7] On or about March 28, 2008 (two days prior to the scheduled closing), the Defendants advised Sunnydene’s principal that they had not been able to secure financing and that they would not be able to close the transaction.
Sunnydene’s Position
[8] Sunnydene’s evidence, as set out in the Affidavit of Jurij Sennecke, President of Sunnydene, sworn July 28, 2011, is that Sunnydene was ready, willing and able to close the transaction as per the Agreement. Sunnydene had executed the required documentation to effect the closing with its real estate lawyer.
[9] The Defendants did not pay the purchase price under the Agreement and no attempt to close the transaction on March 30, 2008, or at a later date, was made. This evidence is not disputed by the Defendants.
[10] Sunnydene sold the Property to another purchaser for $4,475,000.00, inclusive of 5% GST, on June 27, 2008. The actual sale price was therefore $4,261,904.76, which was $252,246.18 less than the sale price agreed to by the Defendants.
[11] Sunnydene is seeking damages in the total amount of $297,093.83 based on the following:
(i) the $252,246.18 difference in the sale price;
(ii) realty taxes of $3,432.62 based on 2008 realty taxes of $14,401.23 and the retention of the property by Sunnydene for an additional 87 days;
(iii) carrying costs of a first interest-only mortgage with Priesenhammer Investments Inc. for $1,200,000.00 at 9% interest for a per diem rate of $295.89 multiplied by 87 days for a total of $25,742.43;
(iv) carrying costs of a second interest-only mortgage with Karncorp Inc. for $850,000.00 at 10.25% interest, for a per diem rate of $238.70 multiplied by 87 days, for a total of $20,766.90;
(v) carrying costs of a third interest-only mortgage with Priesenhammer Investments Inc. for $350,000.00 at 9.5% interest, for a per diem rate of $91.10 multiplied by 87 days, for a total of $7,925.70; less
(vi) a difference in commission of $13,020.00, based on 4% commission (total commission based on the Agreement with the Defendants for an amount of $200,970.00 and commission paid by the subsequent purchasers of $187,950.00) which is to be credited to the Defendants.
[12] Sunnydene’s evidence is that had the Defendants closed the transaction on March 30, 2008, all three mortgages would have been discharged on that date, realty taxes would have been paid as of that date and Sunnydene would not have had to incur additional realty taxes for the 87 days it took to sell the Property to different purchasers.
Mr. and Mrs. Shouldice’s Position
[13] The Defendants’ defence centers around their allegation that there was an oral agreement collateral to the written Agreement that the closing of the transaction was conditional upon the Defendants obtaining the necessary financing.
[14] The Defendants set out in the Affidavit of Mr Shouldice, sworn January 31, 2012 and the Affidavit of Mrs. Shouldice, sworn January 31, 2012, that Sunnydene was aware all along that the Defendants were unable to pay a deposit as their funds were tied up and that they wished to include a clause stating that the purchase was subject to securing financing ‑ also because their funds were tied up.
[15] The Defendants contend that these concerns were raised on a number of occasions in meetings and e-mails and that they suggested that Sunnydene re-list the Property if this was a concern. They depose that these concerns were raised with the real estate agent, Ms. Trelawny Howell (“Ms. Howell”), who was acting as a co-broker, and to Mr. Sennecke himself. They further depose that during a meeting with Mr. Sennecke he stated that he “personally wanted to work with us and see his and our vision for the property come to a reality and was willing to wait”.
Relevant Statutory Provisions
[16] Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 governs motions for summary judgment. Rule 20.01(1) prescribes when a plaintiff may bring a motion for summary judgment:
A plaintiff may, after the defendant has delivered a statement of defence or served a notice of motion, move with supporting affidavit material or other evidence for summary judgment on all or part of the claim in the statement of claim.
[17] Rule 20.04(2.1) prescribes the court’s powers on a motion for summary judgment:
In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:
Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence.
The Law on Summary Judgment
[18] In the recent Ontario Court of Appeal decision of Combined Air Mechanical Services Inc. v. Flesch, 2011 ONCA 764, at paras. 37 and 38, the Court of Appeal stated:
¶37 The amended rule permits the motion judge to decide the action where he or she is satisfied that by exercising the powers that are now available on a motion for summary judgment, there is no factual or legal issue raised by the parties that requires a trial for its fair and just resolution.
¶38 However, we emphasize that the purpose of the new rule is to eliminate unnecessary trials, not to eliminate all trials. The guiding consideration is whether the summary judgment process, in the circumstances of a given case, will provide an appropriate means for effecting a fair and just resolution of the dispute before the court.
[Footnote omitted.] [Emphasis original]
[19] The Court of Appeal went on to state at paras. 41 to 44 of the Combined Air decision, that there are three types of cases amenable to summary judgment: where parties agree that it is appropriate to determine an action by way of a motion for summary judgment; those claims or defences that are shown to be without merit and the disposition of cases on the merits where the trial process is not required in the “interest of justice”.
[20] The Court stated, at para. 50:
[I]n deciding if these powers should be used to weed out a claim as having no chance of success or be used to resolve all or part of an action, the motion judge must ask the following question: can the full appreciation of the evidence and issues that is required to make dispositive findings be achieved by way of summary judgment, or can this full appreciation only be achieved by way of a trial?
[21] There remains the requirement that all parties put their "best foot forward" on a motion for summary judgment, as was confirmed in Combined Air at para. 56:
By adopting the full appreciation test, we continue to recognize the established principles regarding the evidentiary obligations on a summary judgment motion. The Supreme Court of Canada addressed this point in Lameman [Canada (A.G.) v. Lameman, 2008 SCC 14, 2008 SCC 14, [2008] 1 S.C.R. 372], at para. 11, where the court cited Sharpe J.'s reasons in Transamerica Life Insurance Co. of Canada v. Canada Life Assurance Co. (1996), 1996 CanLII 7979 (ON SC), 28 O.R. (3d) 423 (Gen. Div.), at p. 434, in support of the proposition that ‘[e]ach side must 'put its best foot forward' with respect to the existence or non-existence of material issues to be tried.’ This obligation continues to apply under the amended Rule 20. On a motion for summary judgment, a party is not ‘entitled to sit back and rely on the possibility that more favourable facts may develop at trial’: Transamerica, at p. 434.
[22] Additionally, it is also well established that a party responding to a motion for summary judgment must adduce evidence showing there is a real issue to be tried on admissible evidence. The responding party must “lead trump or risk losing”: see 1061590 Ontario Ltd. v. Ontario Jockey Club (1995), 1995 CanLII 1686 (ON CA), 21 O.R. (3d) 547 (C.A.), at p. 557, and Guarantee Co. of North America v. Gordon Capital Corp., 1999 CanLII 664 (SCC), [1999] 3 S.C.R. 423, 178 D.L.R. (4th) 1 (S.C.C.), at para. 31.
Disposition
[23] I find that this is a type of case amenable to summary judgment as the defences of the Defendants are without merit.
[24] In this case the full appreciation of the evidence and issues that is required to make dispositive findings can be achieved by way of summary judgment. I am able to weigh and draw inferences from the evidence without the benefit of the trial narrative, without the ability to hear the witnesses speak in their own words and without the assistance of counsel.
[25] The Defendants are obligated to put their "best foot forward" on this summary judgment motion and based on the evidence before me, I find that the Defendants’ claims have no chance for success.
[26] Most of the evidence set out in Mr. Sennecke’s Affidavit was not contradicted by the Defendants. There is no dispute that Sunnydene was ready, able and willing to close the transaction on March 30, 2008, but the Defendants failed to close. The contract was breached by the Defendants.
[27] While it may be true that the Defendants had previously expressed a concern regarding a deposit and financing, there were several amendments made in writing to the Agreement and these concerns, regarding financing, were not outlined in any of these amendments. In fact, in the last amendment of March 5, 2008, the Defendants confirmed that instructions had been given to their bankers and appropriate banking arrangements had been made allowing for the balance of the purchase price to be provided to the real estate broker.
[28] I accept the evidence of Mr. Sennecke that there was no collateral oral agreement as any amendments to the Agreement were made in writing and the issue of financing was addressed in the March 5, 2008 amendment where the closing was scheduled for March 30, 2008. If the issue of the Agreement being contingent on financing was crucial to the Defendants, they should not have agreed to the amendment of March 5, 2008 that appropriate banking arrangements had been made. Additionally, in paragraph 24 of the Agreement, it is clearly stated that there are no collateral agreements:
This Agreement including any Schedule attached hereto, shall constitute the entire Agreement between Buyer and Seller. There is no representation, warranty, collateral agreement or condition, which affects this Agreement other than as expressed herein.
[29] I also note that the evidence contained in both Mr. and Mrs. Shouldice’s separate Affidavits, is that their discussions regarding financing pre-dates the March 5, 2008 amendment. Additionally, on February 29, 2008 the Defendants wrote a letter to the real estate agent, Ms. Howell, advising that they would be able to provide a confirmation letter regarding the availability of funds early in the week of March 3, 2008. This was prior to the amendment of March 5, 2008.
[30] On May 18, 2012, I made an order that as the Defendants were purporting to rely on a tape recording of conversations which may be relevant to this motion (i.e. with Ms. Howell) and the recordings were not properly before the Court, the Defendants were to provide a copy of the audio recordings to the Plaintiff’s counsel no later than May 25, 2012 and they were to file further Affidavits with an attached professional transcription of the audio recordings on or before June 4, 2012. A copy of the recording was provided to counsel for Sunnydene, but I understand that neither party was able to play the recording due to technical difficulties. Further, Mr. Shouldice advised the Court that he did not have the recording professionally transcribed as it was too costly and he would not be providing a transcription of the recording.
[31] I note that the Defendants did not provide an Affidavit from Ms. Howell on this very important issue of an alleged collateral Agreement, nor did they cross-examine Mr. Sennecke on his Affidavit. They rely on hearsay evidence in their Affidavits concerning their conversations with Ms. Howell which is clearly not “putting their best foot forward”.
[32] Mr. Shouldice also admitted liability in his oral submissions. He stated that he and Mrs. Shouldice had signed the Agreement and the amendments and it was a mistake not to insert in the amendments to the Agreements that the Agreement was conditional on financing. Mr. Shouldice, however, did submit that he was disputing the quantum of damages.
[33] Given the lack of a valid defence for the reasons set out above, I find that there is no genuine issue requiring a trial as clearly based on the evidence, there was a breach of contract by the Defendants.
[34] With respect to the issue of damages, Mr. Shouldice submits that $125,000.00 should be deducted due to the fact that certain work regarding deficiencies was not completed on the home when sold to the new purchasers. The Defendants made no reference to the amount of damages sought and this issue in their sworn Affidavits, but reference is made in their Statement of Defence. However, given that the Defendants did not cross-examine Mr. Sennecke, there is no way of determining the effect this would have had on the sale price. There is no evidence upon which to determine this issue raised by Mr. Shouldice and I note that the Defendants had over 15 months to cross-examine Mr. Sennecke when these issues could have been canvassed, but they chose not to do so.
[35] I find that the damages claimed by the Plaintiff are fully supported by the documentary evidence provided due to the breach of contract by the Defendants in their failure to close the transaction.
Costs
[36] Sunnydene seeks costs on a partial indemnity basis in the amount of $9,815.86, inclusive of HST and disbursements, but acknowledges that counsel’s time for the attendance at the hearing of the motion should be reduced.
[37] Mr. Shouldice, on behalf of the Defendants, submits that he takes no issue with Plaintiff’s counsel’s hourly rate or time spent on the file. However, he does take issue with fees charged for the May 18, 2012 and June 13, 2012 attendances given the matter was adjourned on May 18, 2012 and there was a scheduling issue on June 13, 2012. I agree that the Defendants should not bear the costs for the June 13, 2012 attendance, nor for the time claimed for the hearing of the motion, given it took less time than estimated by counsel. However, the May 18, 2012 adjournment was solely due to the Defendants.
[38] Taking into consideration Rule 57 of the Rules of Civil Procedure and the decision of Boucher v. Public Accountants Council for the Province of Ontario, 2004 CanLII 14579 (ON CA), [2004] O.J. No. 2634 (C.A.) at para. 26, where it is stated with respect to costs: “…the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay in the particular proceeding, rather than an amount fixed by the actual costs incurred by the successful litigant” and that the fixing of costs is not a mechanical exercise and does not begin and end with the calculation of hours times rates, I find that the Defendants would have reasonably expected to pay $8,500.00 if unsuccessful on this motion.
Order
[39] I order the following:
(i) the Plaintiff’s motion for summary judgment against the Defendants is granted;
(ii) the Defendants shall pay to the Plaintiff the sum of $297,093.83; and
(iii) the Defendants shall pay costs to the Plaintiff in the amount of $8,500.00, inclusive of HST and disbursements.
Stevenson J.
Released: November 5, 2012
COURT FILE NO.: CV-10-400070
DATE: 20121105
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
SUNNYDENE HOMES INC.
Plaintiff
- and -
GLYNN SHOULDICE and CANDICE SHOULDICE
Defendants
REASONS FOR DECISION
Stevenson J.
Released: November 5, 2012