COURT FILE NO.: 01-4621-08

DATE: 20131114

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: JOHN VEIGA, Applicant/Moving Party

AND:

MARGARET VEIGA, in her personal capacity and in her capacity as estate trustee of the estate of Rita De Jesus Bernardo, deceased, LUCY VEIGA and IRENE VEIGA, Respondents/Responding Parties

BEFORE: Stinson J.

COUNSEL:
Brendan Donovan, for the applicant

Margaret Veiga, acting in person

Michael Cooper, for the respondent Lucy Veiga

No one appearing for the respondent Irene Veiga

HEARD: October 23, 2013

ENDORSEMENT

Endorsement

1This endorsement contains my decision on a motion for summary judgment brought by the applicant, John Veiga. The motion was brought to enforce a settlement agreement. One provision of the settlement agreement provided for the transfer to the applicant of a house, on terms. The transfer never occurred. The applicant seeks an order for specific performance of the agreement, and, in particular, the transfer of the house.

2The applicant John Veiga ("John"), the respondent Margaret Veiga ("Margaret") and the respondent Lucy Veiga ("Lucy") are siblings. All three are children of the respondent Irene Veiga ("Irene”). Their father was Joao Veiga ("Joao"). Joao died in October 2008.

3Irene is the daughter and only child of Manuel Bernardo and Rita Bernardo. Rita died in August 2008. Manuel is still alive. At the heart of this dispute is the house that Rita owned on Dovercourt Road in Toronto (the "Dovercourt Property"). The Dovercourt Property was Rita’s principal asset and formed the bulk of her estate.

4In her will, Rita appointed Margaret as executor. Rita's three grandchildren, Margaret, Lucy and John were named the residuary beneficiaries, each entitled to an equal share. The three children also had an interest in the estate of their late father, Joao. The principal asset in that estate was property in Portugal.

5Before Rita died, there were disagreements among the siblings regarding care for Rita, her finances, the maintenance of the Dovercourt Property and occupancy of the Dovercourt Property. Among the issues was the fact that John remained an occupant of the house but, from his sisters' perspective, he did not contribute sufficiently to the expenses associated with the upkeep of the property, by paying rent or otherwise. In addition, there were disputes among the siblings about their mother Irene’s care and her finances, and the administration of their father Joao's estate and the division of his assets. Additionally, Margaret was concerned that John was relying on financial support from their mother, Irene, rather than earning income and paying his own way.

6Following Rita’s death, the disagreements among the siblings continued and increased. John wished to continue to occupy in the Dovercourt Property and he ultimately proposed to his sisters an arrangement by which he would, in effect, buy them out. Discussions and negotiations regarding the resolution of that proposal and numerous other issues among the siblings extended over many months. John sought bank financing to enable him to proceed with the buyout. Margaret was represented in these negotiations through a lawyer, Jordan Atin.

7The negotiations reached a conclusion in November 2010. On behalf of Margaret, Mr. Atin prepared a detailed, formal document to be executed by all three siblings (the "Atin Document"). In essence, the Atin Document contemplated an arrangement by which John would purchase the Dovercourt Property from Rita's estate for $340,000 in cash; the sale of the Dovercourt Property to him would represent his full entitlement to Rita's estate; John waived any interest in Joao’s estate in Portugal; and John agreed that he was not receiving and would not receive in the future any financial assistance from his mother, Irene, and that he would be solely responsible for financial obligations for the acquisition of the Dovercourt Property.

8By letter dated November 18, 2010 sent via email, Mr. Atin sent to John and Lucy a copy of the Atin Document. His covering letter provided as follows:

In an effort to resolve the outstanding issues relating to Mr. Veiga’s claim in respect of the above noted estate, my client proposes a resolution as outlined in the attached agreement.

As a show of good faith, my client has signed the attached agreement. The deadline for all parties to sign the agreement is November 30, 2010, failing which the proposal is hereby withdrawn.

9The copy of the Atin Document circulated by Mr. Atin on November 18, 2010 was fully executed by Margaret. In addition to the November 30, 2010 deadline for all parties to sign it, the Atin Document included a provision in paragraph 5 as follows:

The Dovercourt Property Transfer and John’s Payment must occur by November 30, 2010 failing which this Agreement shall be null and void.

10On November 22, 2010, John communicated to Mr. Atin requesting an extension of time in order to allow him to complete the necessary work at his end, including dealing with his bank to finalize his loan and with his real estate lawyer (Barry Fish) to complete the transaction. On November 23, 2010, Mr. Atin replied indicating that Margaret was agreeable to extending the closing date in paragraph 5 of their agreement from November 30 to December 20, 2010. Lucy was copied on these email exchanges.

11On November 30, 2010, Lucy signed the Atin Document and returned it to Mr. Atin. On the same date, John (who was acting on his own behalf in negotiations with Mr. Atin) followed up with Mr. Atin to request paperwork that was required by Mr. Fish to advance the matter. He invited Mr. Atin to contact Mr. Fish directly to clear up any problems. On December 1, Mr. Atin provided to John a copy of the Atin Document that had been signed by Lucy on November 30.

12On December 8, John wrote again to Mr. Atin explaining that he needed a formal agreement of purchase and sale for his bank loan and that the Atin Document was not sufficient. Mr. Atin responded that John’s lawyer was preparing the agreement of purchase and sale. That draft document was prepared on December 8 and forwarded to Mr. Atin.

13On December 13, 2010, John signed and delivered to Mr. Atin his copy of the Atin Document. Accordingly, by this date, all three siblings had signed the Atin Document, confirming their agreement to settle all their issues on the terms therein set forth. I will henceforth refer to that fully executed document as the "Settlement Agreement".

14By December 16 (four days prior to the December 20 deadline) no response had been received from Mr. Atin's office, despite follow-up by Mr. Fish’s office for the purpose of pressing to receive Margaret's signature on the agreement of purchase and sale.

15According to Margaret’s evidence, on December 16, for the first time, she approached a real estate lawyer (Mr. Ferreira) to represent her on the real estate transaction. This was Margaret's first contact with Mr. Ferreira, whom she had never previously met. She presented him with copies of the Settlement Agreement and the draft agreement of purchase and sale. The Settlement Agreement was in the form of the Atin Document that had been prepared one month previously. The draft agreement of purchase and sale had been provided to Mr. Atin eight days previously, on December 8.

16According to Margaret’s evidence, when she took the Settlement Agreement and the agreement of purchase and sale to Mr. Ferreira, he was not prepared to act for her. According to her, Mr. Ferreira indicated that there were many complications and conditions that were not satisfied in the Settlement Agreement. He asked for more time, indicated that this was not a simple transfer, and declined to act. There is no evidence that Margaret sought further advice or assistance, whether from her own lawyer, Mr. Atin, or otherwise. There is also no evidence of any communication from Margaret or anyone on her behalf to John or anyone on his behalf (or to Lucy) regarding any concerns on the part of Margaret regarding the time necessary to complete the transaction or any problems with the contents of the Settlement Agreement or the draft agreement of purchase and sale, in advance of the December 20, 2010 deadline. Margaret made no request or proposal to extend the deadline that she had put in place. The December 20, 2010 date came and went without the transaction proceeding.

17Unhappily, around the same time, the three siblings' mother, Irene, suffered some serious health problems. There was some suggestion before me that this may have distracted Margaret and preoccupied her at this time. For his part, on January 10, 2011, John again wrote to Mr. Atin requesting completion of the purchase and sale agreement. The next day, January 11, 2011, Margaret sent an email to John about the Settlement Agreement and the agreement of purchase and sale. She reported that the real estate lawyer whom she had consulted with regards to completing the paperwork prepared by Mr. Atin and Mr. Fish had advised that the documents "needed to be reviewed and that there were serious concerns with regards to the conditions that were drawn up in the two documents."

18The concerns raised by Margaret in her email of January 11, 2011 were not resolved and the Settlement Agreement was never performed. In due course, John commenced this application seeking, among other relief, an order requiring Margaret to perform her obligations under the Settlement Agreement, including conveying the Dovercourt Property to him.

positions of the parties

Positions of the Parties

19John asserts that all parties had agreed to the Settlement Agreement and that Margaret failed to perform her obligations, because she decided she was no longer satisfied with the terms that had been negotiated on her behalf by Mr. Atin and to which she agreed when she signed the Atin Document in November 2010. By her conduct in failing to sign the agreement of purchase and sale and in proceeding with the other steps necessary to convey the property, the argument continues, she repudiated the Settlement Agreement. Her repudiation was further confirmed by her email of January 11, 2011.

20Margaret’s position is that the Settlement Agreement never came into force, because it was not signed by and completed by the original deadline of November 30, 2010. She argues that Lucy did not agree to any extension and thus any separate arrangement that may have been made between Margaret and John could not have extended the life of the deal. In the alternative, Margaret argues that if the Settlement Agreement deadline was extended to December 20, 2010, by its own terms it became null and void since the transaction was not completed on that date. She argues that there was insufficient time to complete the transaction due to the lateness by John of his execution of the Atin Document. She further denies that the contents of her letter dated January 11, 2011 amounted to repudiation. She therefore asserts that there was no repudiation on her part by words or conduct.

21Through an affidavit filed by her and through counsel representing her, Lucy has informed the Court that she takes no position and that she is submitting her rights to the Court, subject to one proviso. She has indicated that, in the event the Court grants specific performance, she wants to receive the full amount that was allocated to her under the Settlement Agreement, namely, $150,000.

analysis

Analysis

22The first question to address is whether the Settlement Agreement ever came into force. John argues that the deadline for execution and performance was extended to December 20. Margaret contends that Lucy never agreed to that extension. She submits that, absent a three-way consensus to extend that deadline, the deal lapsed. Lucy takes no position.

23The record reveals that the exchange of email communications between John and Mr. Atin regarding the request for an extension, was copied to Lucy. Thus, on November 23, Lucy was aware that Margaret had agreed to extend the closing date to December 20. One week later, on November 30, Lucy signed and returned the Atin Document to Mr. Atin. It is therefore apparent that, by the time she signed and returned the document, Lucy was aware that the deadline had been extended to December 20.

24Although in the affidavit filed by her Lucy stated that "she was not involved in any amendment to the agreement to extend [the November 30, 2010] deadline", she nowhere deposes that she was unaware of the extension or that she disagreed with it. Indeed, in the face of her having signed and returned the Atin Document after she was aware that the deadline had been extended from November 30 to December 20, it would be difficult for her to say that she disagreed with the extension. The words in her affidavit were carefully chosen. I therefore do not accept that she disagreed with the new deadline; to the contrary, I infer that she was content to go along with the new date that Margaret had proposed in response to John's request for extra time. Indeed, on cross-examination Margaret testified that she believed that Lucy agreed to the extension.

25Margaret's position is also difficult to reconcile with her testimony on cross-examination in which she stated: "Yes, I've always been willing to abide by [the Settlement Agreement]." Indeed, in her factum, Margaret stated (at para. 51) as follows:

The Respondent [Margaret] believed up until December 20, 2013 [sic – should be 2010] that the [Settlement Agreement] was valid and enforceable and that [Margaret] has always said that if this Agreement was still binding and enforceable in all that it was intended to accomplish then [Margaret] was willing to abide by the Agreement.

The foregoing testimony and submission are at odds with Margaret's oral submissions before me that the Settlement Agreement was never binding.

26It follows that I do not accept Margaret's submission that there was no settlement because the Settlement Agreement was not signed and the deal was not concluded by November 30, 2010. Rather, I conclude that Margaret’s offer remained open for acceptance following that date. I am supported in that conclusion by the fact that Mr. Atin continued to deal with John following November 30 on the basis that they were working towards consummation of the settlement by December 20. Had there been no effective extension, they would not have continued to do so past November 30.

27It further follows that, once John’s signature was affixed to the Atin Document, all three siblings had agreed upon terms to settle all their disputes, whereupon the Settlement Agreement came into effect. As I have noted, the terms that John accepted by his signature were the very terms that had been set out by Mr. Atin in the Atin Document that had been circulated by him (as signed by Margaret) on November 18. With the exception of the date for closing, John made no changes. I therefore conclude that the Settlement Agreement was binding and enforceable among all three parties.

28Margaret next argues that the Settlement Agreement ceased to have effect by its own terms, which called for the transaction to be completed and the purchase money paid by John on the closing date, December 20, 2010. Since that did not occur, the argument continues, by its own terms the Settlement Agreement became null and void. John counters, however, that it was inaction on the part of Margaret that prevented the transaction from closing. Margaret replies that she cannot be faulted, because John left it until December 13 to sign the Atin Document, thus creating the Settlement Agreement. This left insufficient time to complete the transaction by the designated date.

29Evaluation of the merits of the foregoing arguments requires a review of the contents of the Atin Document and the various steps taken by the parties in furtherance of the settlement.

30To begin with, as drafted, the Atin Document included a so-called "further assurances" clause (paragraph 14). Pursuant to that clause, the parties agreed that they would do such acts and execute such further documents as may be required to consummate the transactions contemplated under the agreement. By signing the Atin Document as she did in mid-November 2010, Margaret committed to doing so. Mr. Atin forwarded the Atin Document signed by Margaret to John on November 18. On November 22 John wrote back, requesting the extension and informing Mr. Atin and that he required an agreement of purchase and sale in order to finalize his bank loan to carry forward the purchase. Thus, almost a month before the extended deadline of December 20, John was requesting a formal agreement of purchase and sale. In my view, such a document falls within the scope of the "further assurances” clause and would be a document that Margaret would be required to sign once all parties executed the Atin Document, creating the Settlement Agreement. In other words, the requirement of a signed agreement of purchase and sale for purposes of John's lender was well known at an early stage, even before the extension to December 20 was agreed upon.

31On November 23, Mr. Atin responded stating "the agreement of purchase and sale can be finalized once the agreement has been signed by all parties." This was an acknowledgment that an agreement of purchase and sale would be required and would be forthcoming. Logically (and as argued by Margaret) that document would not be signed until all parties had executed the Atin Document, creating the binding Settlement Agreement. Nevertheless, this did not prevent anyone from preparing it so that it could be executed when required. The December 20 deadline was known at this time.

32On December 8, John wrote again to Mr. Atin in relation to the agreement of purchase and sale. On the same day Mr. Atin responded saying that John’s lawyer (Mr. Fish) was preparing the agreement. It was prepared that day. This was 12 days prior to the December 20 deadline. Despite follow-up by Mr. Fish’s office requesting the signed version of the agreement of purchase and sale, there was no communication and no signed agreement of purchase and sale forthcoming from Mr. Atin and Margaret.

33On December 13, John signed and delivered his copy of the Atin Document, thus creating the binding Settlement Agreement. This was a full week prior to the anticipated closing date of December 20. According to her evidence, it was not until December 16 that Margaret approached a real estate lawyer – by way of a "cold call" – to act for her on the real estate transaction. By that time, she or her lawyer had been aware of the need for a formal agreement of purchase and sale for several weeks, and they had had Mr. Fish's draft agreement of purchase and sale in hand for some eight days – since December 8. She or her lawyer knew that John and his lawyer were pressing to settle the terms of the agreement of purchase and sale and to obtain her signature on it.

34While I acknowledge that John only executed the Atin Document creating the binding Settlement Agreement on December 13, the foregoing review of the facts and events indicates that, on his side, he was trying to press forward to put in place the elements required to consummate the transaction on December 20. This included early identification of the need for a formal agreement of purchase and sale, the initial requests to Mr. Atin in this regard, preparation of the formal agreement of purchase and sale by John’s lawyer, and multiple requests of Mr. Atin regarding same, to which there was no response. It was only on December 16, just four days prior to the December 20 deadline, that for the first time Margaret sought advice from a real estate lawyer. Thus, when comparing the respective efforts of the parties to advance the matter towards completion, the record discloses that John was attempting to advance the matter; by contrast Margaret was doing little, if anything.

35It is also significant, in my view, that once she met with Mr. Ferreira and he indicated that he was unable to assist her, Margaret did nothing to seek another lawyer, to communicate to John that she was encountering difficulty in light of the upcoming deadline, or otherwise. In view of the advice she got from Mr. Ferreira she more or less "downed tools”.

36Of even greater significance is Margaret’s evidence regarding what she was told by Mr. Ferreira. According to her affidavit, he "indicated to her that there are many complications and conditions that were not satisfied in the agreement", referring to the Settlement Agreement. "He asked for more time and indicated that this is not a simple transfer and declined the service." In the face of that advice Margaret did nothing. On cross examination Margaret stated that Mr. Ferreira "put doubt in my mind as to whether the agreement [the Settlement Agreement] could be enforced.” The following exchange also took place during her cross examination:

Q. … So, the reason why you didn’t carry on with the November Agreement [the Settlement Agreement] is because you were worried that you weren’t going to be able to enforce that part of the agreement? [referring to paragraph 8, the provision that required John to have no further financial support from their mother.] Is that correct?

A. That was one concern. The deadline was another concern.

37Further insight into Margaret’s motivations can be found in her email to John dated January 11, 2011. In that email she referenced the advice from her real estate lawyer "that there were serious concerns with regards to the conditions that were drawn up in the two documents" (i.e. the Settlement Agreement and the agreement of purchase and sale). She went on to state as follows:

These agreements do not seem to make things completely clear and could involve further issues in the matter. I feel that I have to include the finalizing of the estate with mom's care and well-being. The limited information I have with regard's [sic] to mom's finances and her continued providing of money to you in relation to the Estate has continually caused me to be unable to finalize the matter. I have had all these same concerns since our grandmother’s passing away and since the matter was probated in order to resolve and finalize the estate. Also, the way our father’s estate was dealt with by you causes me to feel that I cannot leave anything that appears contradictory or unable to enforce with the hope of you showing good faith.

38In view of the foregoing, I find as a fact that once Margaret got the advice from Mr. Ferreira, she got "cold feet" and decided that she did not wish to proceed with the Settlement Agreement. Having left it to the last minute to get advice from a real estate lawyer and then being told by Mr. Ferreira about his concerns regarding the agreement and the available time, Margaret simply did nothing further. In my view, by leaving it so late and by taking no further steps and simply allowing the December 20 deadline to pass without any further effort on her part and no communication to John, Margaret breached her obligations under paragraph 14 of the Settlement Agreement, the further assurances clause.

39Returning, then, to Margaret’s argument that the Settlement Agreement ceased to have effect and became null and void because the transaction was not consummated on December 20, in view of the facts I have just described and the findings I have made, it does not lie in Margaret’s mouth to advance that argument. In essence, she seeks to avoid the obligations that she assumed under the Settlement Agreement by reason of that agreement becoming null and void due to the non-consummation of the transaction, for which she must bear responsibility. It is apparent that following her discussion with Mr. Ferreira, she had second thoughts about proceeding and undoubtedly this is why she took no further steps. To permit her to assert that the Settlement Agreement became null and void because it was not concluded by December 20, would be, in these circumstances, to allow her to take advantage of her own default to avoid her legal obligations. A party cannot reply on a condition it brought upon itself to avoid its contractual obligations. Put another way, "a party cannot rely on his own wrongdoing to excuse him from liability." G.H.L. Fridman, The Law of Contract in Canada, (Toronto: Thomson Reuters, 2011) at 263. See also Atlantic Paper Stock Ltd. v. St. Anne-Nackawic Pulp & Paper Co. Ltd., 1975 170 (SCC), [1976] 1 S.C.R. 580; Maritime National Fish Ltd. v. Ocean Trawlers Ltd., 1935 323 (UK JCPC), [1935] 3 D.L.R. 12 (P.C.).

40I therefore conclude that, by her inaction and her failure to proceed with the transaction, Margaret repudiated her obligations under the Settlement Agreement. Her repudiation was further confirmed by the contents of her email of January 11, in which she expressed her unwillingness to proceed with the two agreements.

41In all the circumstances, I conclude that Margaret failed to honor her obligations under the Settlement Agreement and thus was in breach of that agreement.

remedy and disposition

Remedy and Disposition

42The case law is clear that specific performance may be awarded on a motion for summary judgment. Covedale Developments Inc. v. 1589380 Ontario Limited, 2010 ONCA 16; Irving Ungerman Ltd. v. Galanis, 1991 7275 (ON CA), [1991] O.J. No. 1478 (C.A.) at para. 38.

43It is necessary for a party who seeks specific performance to show that the property has a quality that could not be readily duplicated elsewhere. John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd. (2003), 2003 52131 (ON CA), 63 O.R. (3d) 304 (C.A.) at para 39. Based on the evidence presented by John, I accept that the Dovercourt Property is unique, and the remedy of damages would be inadequate. The Dovercourt Property has been John’s home since 2000 and he has invested his own funds, labor and skill into repairing, renovating and maintaining the property. The house was his grandparents' first home when they immigrated to Canada. John has many friends around the neighborhood and he is actively involved there. On this basis, a decree of specific performance of the Settlement Agreement would be in the interest of justice.

44Having reached that conclusion, I further observe that there are various aspects of the Settlement Agreement that must be performed. In addition to declaring it binding and enforceable among the parties, I direct each of the parties to perform their respective obligations thereunder. This will include (if necessary) execution by Margaret of the requisite agreement of purchase and sale so that John may proceed to obtain financing. Additionally, in view of the fact that John has enjoyed occupancy of the Dovercourt Property over the past several years, but has not yet paid the purchase price and in view of the fact that expenses associated with maintaining the property (e.g. taxes, insurance, maintenance, etc.) have been incurred by various parties, some sort of accounting will be necessary.

45To the extent the parties are unable to agree upon a suitable process for resolving these accounting issues, or for clarification or resolution of any related relief, they may make arrangements to appear before me for directions. It may be that, in due course, a reference to the Master at Toronto may be required to resolve any monetary issues or to supervise the sale; ideally, the parties would avoid that further expense. As well, if the parties are unable to agree upon a suitable closing date for the purchase of the Dovercourt Property by John, they may attend before me to make such submissions as may be necessary.

46In relation to costs, I encourage the parties to resolve that issue. If they cannot, they may make written submissions as follows:

(a) John shall serve his bill of costs on Margaret, accompanied by written submissions within 30 days of the release of these reasons. If Lucy seeks costs she shall follow the same timetable.

(b) Margaret shall serve her response on the other parties within 15 days thereafter.

(c) John (and Lucy, if applicable) shall serve their reply, if any, within ten days thereafter.

(d) In all cases, the written submissions shall be limited to three pages, plus bills of costs.

(e) I direct that counsel for John shall collect copies of all parties' submissions and arrange to have that package delivered to me in care of Judges' Administration, Room 170 at 361 University as soon as the final exchange of materials has been completed. To be clear, no materials should be filed individually: rather, counsel for John will assemble a single package for delivery as described above.

Stinson J.