ONTARIO
SUPERIOR COURT OF JUSTICE
COURT FILE NO.: 12-54605
DATE: 2013/11/22
BETWEEN:
SIMON JAMES BODGER and HOLLY JEANNE BODGER
Plaintiffs
– and –
DANICA POULIN and CHARLES DEPONTE
Defendants
Christopher Clermont, for the Plaintiffs
Miriam Vale Peters, for the Defendants
HEARD: November 21, 2013
REASONS FOR JUDGMENT
belch j.
[1] The plaintiffs bring this motion for summary judgment. The defendants agree that the plaintiffs’ claim for damages is appropriately addressed by summary judgment but while counsel have narrowed the issue on damages, three issues remain in dispute. Firstly, whether painting touch-ups and housecleaning in the amount of $1,423.96, secondly, whether bridge financing in the amount of $7,355.66 are proper damages, and thirdly, how to calculate the loss of the bargain (i.e. the difference in proceeds between the aborted sale and the eventual sale).
[2] For the reasons that follow it is my decision that painting and housecleaning are not proper damages, bridge financing in the amount of $7,355.66 is appropriate and $7,113.61 is proper for the loss of the bargain.
Background
[3] The plaintiffs listed their property for sale and accepted a purchase price from the defendants of $525,000. When the defendants waived all conditions in their agreement of purchase and sale on September 23, 2011, the plaintiffs pursued their own purchase of another property for $605,000. On December 23, 2011 the defendants advised the plaintiffs they would not be completing the purchase as planned. The plaintiffs remained ready to complete the transaction but the purchase did not proceed on January 3, 2012, the designated closing day.
[4] On January 5, 2012 the plaintiffs relisted the property and accepted a new offer of $512,000 reduced to 510,000 before the closing date of April 30, 2012. It was the only offer the plaintiffs received for the property.
[5] The plaintiffs submit that if the first sale at $525,000 closed and after payment of real estate commission in the amount of $25,566.26, their proceeds would have been $499,433.74. By accepting and closing on the second offer of $510,000 the real estate commission was reduced to $24,803.50 resulting in proceeds of $485,196.50.
[6] Counsel for the parties and the parties themselves have worked diligently and have been able to agree on the defendants’ responsibility for legal fees on the aborted sale, additional interest paid on a first and second mortgage, municipal taxes, house insurance, utilities, and snow removal. Expenses for painting and housecleaning while not abandoned by the plaintiffs were not aggressively pursued during this motion. Even if they had been I would have found that these expenses were payable by the plaintiffs in the event of either the first or second sale and therefore were not a proper head of damages for this motion.
Position of the Parties
[7] On bridge financing the plaintiffs submit when the first sale aborted and they were already committed to purchase another residence ,the loss of the proceeds from their sale meant it was reasonably foreseeable that bridge financing would be required to complete their new purchase. There was no dispute with the quantum of the bridge financing in the amount of $7355.66.
[8] The defendants disagree with the plaintiffs’ submission on bridge financing submitting bridge financing is not a proper head of damages relying upon the decision of the Ontario Court of Appeal in Chang v. Dyment 1994 Carswell Ont 4018. In particular, they refer the court to the question the Court of Appeal addressed, namely, “did the trial judge err in allowing the vendors to recover interest in carrying charges on an investment property which they purchased in reliance that the sale to the appellant would close?” At para. 11 the court provided the following answer:
There is nothing in the evidence which indicates that at the time the agreement of purchase and sale with the appellant was entered into, it was in the contemplation of the parties that the vendors would need the money from the sale of their property to the appellant to apply to the purchase of an investment property. Bearing in mind that the onus was on the vendors to prove their damages, the trial judge erred in allowing them damages for interest on the “bridge financing” for their investment property.
[9] Counsel for the defendants argues in order for the plaintiffs to be successful they should have given notice to the defendants that they required bridge financing to replace the proceeds of sale to complete the purchase of their new home.
[10] Counsel for the plaintiffs distinguishes Chang from the case at bar by pointing out the court was dealing with vacant property in Chang whereas the plaintiffs’ sale was of their personal residence. While it might not be foreseeable the plaintiffs in Chang were counting on the sale proceeds of vacant property to fund a new investment, it is certainly reasonable for the plaintiffs in this case who, without the benefit of proceeds from the sale of their own home, needed bridge financing to purchase their new residence.
[11] I favor the argument advanced by the plaintiffs. I accept the difference in selling vacant land as opposed to one’s own residence is an important factor for the court to consider. I realize it is possible a vendor of vacant land could well have earmarked the proceeds to purchase a residence, and had entered into a binding sale, and bridge financing was required. However, the plaintiff in Chang would appear to already be living elsewhere. In our case this was the sale of the plaintiffs’ household and it is reasonably foreseeable the plaintiffs would need another residence, and entered into a binding contract to purchase that residence. Without the proceeds from their own sale bridge financing was required. Accordingly, I find the expense of $7,355.66 for bridge financing is a proper head of damages.
[12] Is it proper to calculate the plaintiffs’ loss of the bargain by examining the difference between the selling prices of the two offers as proposed by counsel for the plaintiffs? Counsel for the defendants submits it is not and again relies on the Chang decision. At para. 8 the Court of Appeal notes “the appropriate starting point for the calculation of damages would be the difference between the net amounts the vendors would receive from each sale.”
[13] If the defendants are correct, the loss incurred by the plaintiffs of the first sale would be $7,113.61 not the $14,237.24 claimed by the plaintiffs. Again, counsel for the plaintiffs takes issue with Chang drawing to the court’s attention the Court’s decision was on consent, not one reached by considering the issue of difference in selling price versus net amounts.
[14] The motion material presented by the defendants uses lower amounts because the balances owing on the first and second mortgages were reduced by payments made by the plaintiffs for those months between the original closing date and the final closing date of the second transaction. Counsel for the plaintiffs submits this would be allowing the defendants to reap the benefits of payments made by the plaintiffs in the interval between the two closing dates.
[15] The plaintiffs have already been allowed damages for the additional interest paid on the mortgages for the interval between the two closing dates. The issue is whether they should also be credited with the principal paid. Had the original transaction been completed, there would be more of the principal remaining unpaid and therefore owing by the plaintiffs to the mortgagees and less net proceeds available to the plaintiffs. By continuing with their principal payments, the mortgages are reduced so that the plaintiffs would realize a greater net profit, but at the expense of having been required to pay the monthly payments.
[16] I am satisfied the decision in Chang was correct despite having been reached on consent without the benefit of adjudication.
Costs
[17] Both sides seek costs. Given success is divided, usually each should be responsible for payment of their own fees and disbursements, however, upon opening the cost envelopes I learned the defendants made an offer to settle and remind the court the amounts awarded may be within Small Claims Court limits. By my calculations, the plaintiffs, being entitled to bridge financing ($7,355.66), net proceeds ($7,113.61) the agreed upon expenses set out in para. 6 and they may be entitled to the deposit of $2,500 forfeited by the defendants, they have beaten the defendants’ offer. Despite falling within the limits of Small Claims Court I would not penalize them and it is still my decision that each pay their own costs as success in the matters argued was divided.
Belch J.
Released: November 22, 2013
COURT FILE NO.: 12-54605
DATE: 2013/11/22
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
SIMON JAMES BODGER and HOLLY JEANNE BODGER
Plaintiffs
– and –
DANICA POULIN and CHARLES DEPONTE
Defendants
REASONS FOR JUDGMENT
Belch J.
Released: November 22, 2013