Court File and Parties
COURT FILE NO.: CV-13-0221-00 DATE: 2016 04 27
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Mohanjit Singh Jassal Plaintiff R. Swaine, Counsel for the Plaintiff
- and -
Pawan Kaith, Bibi Kaith and Kundan Kaith Defendants R. Thapar, Counsel for the Defendants
HEARD: September 14, 15 and 16, 2015 and March 7 and April 4, 2016
Reasons for Judgment
LEMAY J
[1] The Plaintiff, Mohanjit Singh Jassal (“Mr. Jassal”) and the Defendants, Pawan Kaith, Bibi Kaith and Kundan Kaith, were neighbours on the same street, Goreway Road, in Malton. They lived approximately four houses apart on the same side of the street. The Defendants bought one of the houses between their house and the Plaintiff’s house in early November of 2012. The Plaintiff and his wife were interested in buying a larger house, and offered to repurchase the house from the Defendants. The parties entered into an Agreement of Purchase and Sale (“APS”) on November 4th, 2012, with a closing date of January 4th, 2013.
[2] The agreement never closed. The Plaintiff claims that the agreement was never rescinded, and that he was always ready, willing and able to close the deal. In fact he says that he tendered the full purchase price to the Defendants on January 4th 2013.
[3] The Defendants claim that they told the Plaintiff that they were cancelling the APS approximately ten (10) days after they signed it, and that there was no agreement to close. The Defendants also claim that the only reason the Plaintiff wants to complete this transaction was because the Defendants spent a great deal of money renovating the house.
[4] The issues at trial in this case were:
a) Whether the parties executed a binding Agreement of Purchase and Sale (“APS”) on November 4th, 2012 and, if so, what its terms were?
b) If the APS that was signed on November 4th, 2012 was binding, did the parties subsequently agree to rescind it?
c) If the parties did not have an agreement to rescind the APS, can the Kaiths claim promissory estoppel to prevent the Jassals from enforcing the APS?
d) If the Jassals have a binding contract with the Kaiths, what damages should the Jassals be awarded?
[5] In the sections that follow, I will set out the background facts and analyze the relevant issues.
Background Facts
[6] At trial, the Plaintiff testified, and called his wife, Ms. Jaswinder Jassal, as a witness. In addition, certain facts that the Plaintiff’s counsel on the real estate transaction, a Mr. Nanda, would have provided were agreed to. The Defendants called Mr. Kundan Kaith and his son Mr. Pawan Kaith.
[7] However, during the course of Mr. Pawan Kaith’s evidence, it became clear that there were some documents that had not been exchanged. As a result, the parties agreed on an adjournment, and that additional documents relating to the MLS listings for similar properties in the area would be provided. The Plaintiffs were entitled to provide reply evidence on this point. Therefore, Mr. Mohanjit Jassal testified a second time in reply.
a) The Events Up to the Time the APS Was Signed
[8] The Jassals and the Kaiths were neighbours in Bramalea. Both families lived on Goreway Drive. They would meet each other from time to time, but I heard no evidence that they were close or visited each other regularly.
[9] On November 2nd, 2011, the Kaiths bought the house at 7086 Goreway Drive in Bramalea.
[10] The Jassals expressed an interest in purchasing this house almost immediately. As a result, both Mr. and Ms. Jassal went and had tea with all three of the Defendants on November 4th, 2012.
[11] During the course of that discussion, the parties agreed that the Kaiths would sell the house at 7086 Goreway Drive to the Jassals. During the course of the discussions, Mr. Kundan Kaith and Mr. Jassal discussed the terms of the sale. Mr. Kundan Kaith told his son, Pawan Kaith, what the terms of the transaction were to be. The discussion over the terms took place in the Kaiths living room. During the course of his testimony, Mr. Jassal referred to this area as an office. It was not.
[12] Mr. Pawan Kaith went upstairs and obtained the standard form terms for an APS from the Internet. He filled in the price, and some other details, and brought the APS downstairs for the parties to review it. They reviewed and signed the APS. The closing date on the APS was January 4th, 2013.
[13] There was some discussion between the parties about the renovations that were to take place on the property prior to the closing date. However, nothing was reduced to writing about these renovations. In addition, the APS includes the following term:
- If there is a conflict or discrepancy between any provision added to this Agreement (including any Schedule attached hereto) and any provision in the standard preset portion hereof, the added provision shall supersede the standard preset provision to the extent of such conflict or discrepancy. This Agreement, including any Schedules 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. For the purposes of this Agreement, Seller means vendor and Buyer means purchaser. This agreement shall be read with all changes of gender or number required by the context.
b) The Events After the APS Was Signed
[14] Approximately two days after the APS was signed, a deposit cheque in the amount of $5,000.00 was provided by Mr. Jassal to the Defendants. The name on the cheque was not filled in, as Mr. Jassal was not sure who would be cashing the cheque, and who the lawyer for the Kaiths would be.
[15] Then, on or about November 9th or 10th, 2012, the Kaiths had a family meeting. Pawan testified that he was not really involved in this meeting. However, the discussion was the fact that Ms. Bibi Kaith had become ill and could no longer perform her job as a machine operator. As a result, the Kaiths stated that they wanted to cancel the APS so that they could earn income by renting out the property at 7086 Goreway Drive.
[16] On Mr. Kaith’s evidence, he told Mr. Jassal about this decision twice, and Mr. Jassal took no issue with rescinding the APS. Mr. Jassal denies that this conversation ever took place. Mr. Jassal’s evidence was that he was intending to proceed with the transaction all the way along, and that he did not know anything about the Kaiths cancelling it. This factual dispute will be analyzed and resolved below.
[17] In any event, the Kaiths had started some renovations prior to signing the APS, and they continued with these renovations as well as other renovations that they had decided to perform. The extent of the renovations will be discussed below.
[18] The requisition date under the APS was November 11th, 2012. Nothing was done by the Plaintiff about requisitions, or any other issues related to this transaction, until he had his lawyer, Mr. Nanda, contact a lawyer that the Defendant had used in the past sometime in mid-December, 2012.
[19] This lawyer, a Mr. Saini, advised by facsimile that “We do not have the Agreement of Purchase and sale and our client has advised us that the sale of the property did not went [sic] through.” There was then some correspondence between the lawyers.
[20] In late December of 2012, Mr. Jassal asked Mr. Nanda to help him arrange financing for the property. On the evidence I had, financing was available to close the transaction. Indeed, the parties stipulated to that fact in their summary of Mr. Nanda’s accepted evidence. I acknowledge that Mr. Thapar, in his argument, raised issues about the failure of Mr. Jassal to answer questions about the financing on discovery. While this type of refusal would have been of concern to the Court, the parties agreement on the facts means that I do not have to consider this issue further.
[21] The Jassals attempted to close the transaction on January 4th, 2013. The Kaiths refused to close the transaction, and the property remained in the possession of the Kaiths.
[22] Mr. Jassal commenced a legal action, claiming specific performance. He obtained a Certificate of Pending Litigation against the property. The Kaiths brought a motion to set aside the CPL in July of 2013, and Skarica J. granted their motion on the basis that the Jassals had misled the Court about material facts when they brought the ex-parte motion seeking the CPL.
[23] Ultimately, the Kaiths sold 7086 Goreway Drive on September 29th, 2014 for the sum of $655,000.00. Mr. Jassal claims as damages the difference between the agreed-to price for the property of $530,000.00 and the selling price as his damages.
c) Other Evidence
[24] In addition to the evidence relating to the transaction, I heard evidence about the reasons the Jassals wanted to move to a new property. Primarily, the Jassals wanted a double storey house on the same street. There was other evidence from Mr. Jassal in particular about why he wanted to purchase this house. That evidence, and the inconsistencies that exist in it, will be discussed below.
[25] I also heard testimony that the Jassals bought a bungalow on a different street, and are in the process of tearing it down and renovating it, while they continue to live in their current house.
[26] Finally, I also heard evidence about other homes in the area that were for sale around the time period that this transaction took place.
Issue #1- What Were the Terms of the APS?
[27] The parties are agreed that, on November 4th, 2015, they signed an Agreement of Purchase and Sale for the transfer of the property at 7086 Goreway Drive from the Kaiths to the Jassals. It is clear from the APS that there is nothing in it about the requirement for the Jassals to do any renovations to the property.
[28] However, it is also clear that the parties had some discussion about painting the property, and about removing garbage. Mr. Kaith testified that they had discussed the renovations that he was prepared to do to the home. All he recalled agreeing to do was to paint the house and remove the debris from it.
[29] Mr. Jassal testified that there was a verbal understanding that the Kaiths would undertake work on the property. He also testified that the Kaiths would do whatever work needed to be done on the house.
[30] I cannot accept Mr. Jassal’s testimony on what was agreed to about the renovations. There are a number of striking inconsistencies and problems with Mr. Jassal’s testimony both as it relates to the renovations and as it relates to the rescinding of the APS. Some of these are as follows:
a) Mr. Jassal could not identify what renovations were to be completed by the Kaiths. During his examination in chief, all he could remember was that the Kaiths had agreed to paint the house and to make sure it was clean. He then mentioned the garage door being fixed. On cross examination, however, he could not remember what work was going to be done, and he could not remember the discussions about the garage or the painting. In short, he could not keep his story straight.
b) Mr. Jassal took no steps to consult with Mr. Kaith about the renovations after the APS was signed. This suggests that the renovations were to be of a limited scope. It also suggests that the parties agreed to rescind the APS very shortly after it was signed.
c) Mr. Jassal stated that he trusted the Kaiths to do the work that was necessary, without it being supervised by him or members of his family. His explanation for why he trusted the Kaiths does not make any sense to me. He testified that he trusted them because they were neighbours and that they were Punjabi. Indeed, he testified that he would have extended this level of trust to anyone who was Punjabi. However, he also testified that he checked the price on the APS. In my view, this explanation was inconsistent. A person with this level of trust would not feel the need to check any of the terms of the APS. It was also not logical, as Mr. Jassal had no reason to trust the Kaiths, as he had never done business with them before.
d) Mr Jassal’s explanation for how the price of the house was agreed upon was inconsistent to the point of incoherence. In his evidence in chief, Mr. Jassal testified that the price was increased from $495,000.00 to $530,000 because of the work that was being done on the house. However, in cross-examination, Mr. Jassal testified that the price was to be increased 10% over the $450,000.00 the Kaiths paid for it, and then the price for the renovations was to be taken into account. When I reviewed this testimony, I could not determine what rationale Mr. Jassal was advancing for having paid $530,000.00 for the house.
e) Mr. Jassal had a number of inconsistent statements in both his Affidavits and his various examinations. He testified that the reason that he had given inconsistent sworn statements was that he was examined in English, and did not understand the questions. There are two fundamental flaws with this explanation. First, his lawyers have the right to correct any answers given on cross-examination or on discovery. Second, there is no evidence in any of the excerpts that I was taken to that Mr. Jassal was having any significant difficulties in understanding the questions.
[31] When I review all of the evidence, it is clear to me that the only renovations that the parties had agreed to were some paint and some cleaning. I reject Mr. Jassal’s evidence that any of the other renovations were either agreed to or part of the purchase price. More generally, for the reasons set out above (and others that I will come to), I did not find Mr. Jassal to be a credible witness. As a result, I have generally rejected his testimony where it differs from the evidence given by others, or the documentary evidence that I have.
[32] At this point, it is also appropriate to comment on Ms. Jassal’s testimony. She testified that in the two months between the date that the APS was signed and the date that the transaction was supposed to close, she did not go to the new house that she and her husband had purchased once, in spite of the fact that she was excited both about buying the new house and about the renovations.
[33] In addition, Ms. Jassal was in the courtroom when her husband testified. Although Ms. Jassal testified that she does not speak English very well, her husband provided his testimony in Punjabi and it was interpreted. On cross-examination, Ms. Jassal testified that she would support her husband’s testimony and “whatever he is saying is right.” When asked on re-examination if she could hear her husband from the back of the Courtroom, she confirmed that she could hear him, and she could hear his testimony in Punjabi.
[34] There are also inconsistencies between Ms. Jassal’s will say statement and what she actually testified to in Court. Mr. Swaine, counsel for the Plaintiff, provided counsel for the Defendant with a will-say statement on July 28th, 2015. In that will-say statement, which is not signed, Mr. Swaine advises that Ms. Jassal will say that she has no knowledge of any discussions regarding repairs or improvements in the property. At trial, she stated that the price for the house was to be $530,000.00 after the work was done, and that she was excited about the renovations that were being done on the house. Ms. Jassal advised that she had never said anything to Mr. Swaine other than “hello hello”.
[35] I reject Ms. Jassal’s evidence as being unreliable. She admitted under cross-examination that whatever her husband said was right, and she was not going to disagree with him. In those circumstances, her evidence is neither independent nor reliable. It will have been tailored to fit the evidence of Mr. Jassal, which I have also found to be unreliable in several instances. While the will-say statement is also troubling, it is the admission that her husband is always right that is the most troubling feature of her testimony.
[36] The only part of Ms. Jassal’s evidence that I am accepting is the fact that she did not attend at the property once between the date the APS was signed and the date the closing was supposed to take place. I am only accepting this evidence because it was confirmed by the testimony of Mr. Jassal, and because it is a fact that does not support the Plaintiff’s case.
[37] This brings me to what was agreed to between the parties. I find that the only discussions the parties had respecting renovations was about painting the house and having it cleaned.
[38] However, the Kaiths had planned on doing renovations to the house, including windows, and had ordered some materials before they sold the house to the Jassals. As a result, I find that the Kaiths were going to do additional renovations to the house, including the windows. Although the Jassals were not aware of all of the renovations, the Kaiths signed the APS with the clear knowledge that the previously planned renovations would be completed before the transaction closed. These unilateral actions, which would have been to the benefit of the Jassal’s do not constitute an agreement, as they were unilateral and undertaken without the knowledge of the Jassals.
[39] As a result, the parties agreed that there would be some work done to the house beyond what was in the APS. The agreed upon work was, however, limited to some painting and some cleaning.
Issue #2- Did the Parties Rescind the Agreement?
a) The Different Versions of Events
[40] Mr. Jassal testified that he never had a conversation about rescinding the APS with Mr. Kundan Kaith. He testifies that he visited the house he was purchasing once while the renovations were going on, said hello and walked off. He also testified that he telephoned the Kaiths on a number of occasions, but did not get an answer at any time.
[41] Mr. Kundan Kaith, on the other hand, testified that his family circumstances changed on November 9th or 10th, 2012. At that time, his wife had become ill and could not continue in her job. As a result, the Kaiths had decided that they needed to continue to hold the property, and that they should rent it out.
[42] Mr. Kundan Kaith testified that he telephoned Mr. Jassal to tell him that he no longer wanted to go through with the APS because of this change in circumstances. This telephone call took place within a few days of the Kaiths receiving the news about Ms. Kaith’s job. He also testified that he followed this telephone conversation up with an in-person discussion at the 7086 Goreway Drive house. In both conversations, on Mr. Kaith’s version of events, Mr. Jassal accepted that the APS would be rescinded, and the transaction would not go through.
b) Analyzing the Different Versions of Events
[43] These two versions of events are diametrically opposed. One witness testified that the conversation never happened and the agreement was never ended. The other witness testified that the conversation happened twice and the agreement was ended. Only one of these versions can be correct.
[44] Choosing between these two versions of events requires an analysis of both the testimony of the two principal witnesses, and the surrounding circumstances.
[45] Mr. Jassal’s testimony has a number of significant credibility problems that I identified in the previous section. Those credibility problems affect whether I can accept his testimony on any issue. I am of the view that I cannot accept his testimony without some independent corroboration.
[46] One of the key factors in the surrounding circumstances is the date for requisitions under the APS. This date was November 11th, 2012. However, the Jassals did not do anything about these requisitions until more than six weeks later, and less than three weeks before the closing. This is a factor that supports Mr. Kaith’s version of events.
[47] A further factor is that, in spite of the closing date being on January 4th, 2013, Mr. Jassal did not retain Mr. Nanda to help close this transaction until the end of November or the beginning of December. This suggests to me that Mr. Jassal had decided not to pursue this transaction until he saw the very substantial renovations being performed on the house. It was only at that point that Mr. Jassal retained Mr. Nanda to attempt to close the transaction.
[48] When Mr. Nanda was retained as counsel, he sent a letter to Mr. Saini, who has performed legal work for the Kaiths in the past. This resulted in Mr. Saini contacting Mr. Kundan Kaith on December 19th, 2012. Mr. Kaith advised Mr. Saini that the transaction was not proceeding. Mr. Saini in turn advised Mr. Nanda that the transaction was not proceeding.
[49] During the course of cross-examination and argument, Mr. Swaine made much of the fact that Mr. Kaith did not explain all of the ins and outs of the transaction to his lawyer. In my view, nothing turns on this fact because there was nothing inconsistent between what Mr. Kaith said under oath and what he told his counsel.
[50] This brings me to the efforts that Mr. Jassal made to contact the Kaiths in the time period between when the APS was signed and when the transaction closed. He testified that he only went and visited the house once, and only said hello on this visit. He also testified that he made a number of telephone calls to the Kaiths to follow up on the status of the renovations. He also testified that the purpose of these telephone calls was to find out why his deposit cheque had not been cashed.
[51] There are three problems with Mr. Jassal’s evidence about the telephone calls:
a) The explanation for why the calls were made varied. Sometimes in his testimony, Mr. Jassal was calling to follow up on the deposit cheque, and sometimes it was to follow up on the status of the renovations.
b) Mr. Jassal was not prepared to produce his cell phone records, or his work records, so it could be established where he was when these calls were made, or whether there was any record of them being made. This refusal is a particular concern, especially when combined with Mr. Jassal’s testimony that he made at least ten (10) calls, and could not remember any details about either when he made the calls or where he was when he made the calls.
c) Mr. Jassal blames his lawyer for his failure to disclose these records. I did not find this explanation to be credible.
d) Mr. Jassal lives four doors away from the Kaiths. If he had an issue that was important enough to telephone the Kaiths ten times and he did not get an answer, then it defies logic to believe that he would not have walked down the street to find out what was going on, or raise the issues through his lawyer. Neither happened, as far as I am aware.
[52] Mr. Swaine argued that these telephone calls were never answered by the Kaiths. I find, as a fact, that these telephone calls never took place.
[53] This brings me to Mr. Jassal’s efforts to close the transaction. As I have noted above, the parties have agreed that Mr. Jassal had the funds necessary to close the transaction. As a result, there is no issue about whether he was ready, willing and able to close the transaction.
[54] However, the closing documents that Mr. Jassal signed in preparation for the closing demonstrate a problem with his testimony. In particular, he signed a solemn declaration that contained the following paragraph:
- To the best of my knowledge and belief there is not currently and nor has there been within the past 45 days, any construction, alterations, renovations improvements or building materials supplied to the subject property.
[55] This is a sworn statement that completely contradicts Mr. Jassal’s testimony to this Court. He testified to this Court that he knew that renovations were being performed, and that Mr. Kaith was going to perform the renovations that were necessary to get the house ready. However, in order to obtain financing, he swore a statement that was untrue. This fact, along with the other issues I have laid out above, demonstrates that Mr. Jassal’s evidence was tailored so that it fit the outcome he was trying to achieve. It means his evidence is unreliable and must be disregarded.
[56] Ms. Jassal’s testimony also supports the conclusion that the APS was rescinded. Her testimony was that, although she was excited about the purchase of this new house, she did not visit it once between the date that the APS was signed and the closing date.
[57] As noted above, this is a fact that is not helpful to the Plaintiffs’ case. If the Jassals had really expected the transaction to close, they would have been interested in seeing the house, providing input on the renovations and preparing to move in. The fact that Ms. Jassal did not visit the house once suggests that the Jassals knew that the transaction would not close, and had accepted that outcome.
[58] Finally, there are the renovations that were performed by the Kaiths on the property. The uncontradicted evidence before me was that those renovations were very significant, and included the following:
a) A separate entrance to the basement.
b) Upgrading the kitchens.
c) Changing the garage door.
d) Replacing the furnace with a high efficiency furnace.
e) Replacing tiles, and sanding and refinishing flooring.
[59] There were other renovations as well. However, the ones on the list above were all renovations that would likely not have been necessary to ensure that the house was in good working order if it was being sold to the Jassals. Mr. Swaine argued that the only evidence that I have of some of these renovations is the testimony of Mr. Kaith. I disagree. A number of receipts were provided to support some of these transactions. In addition, one of the facts that the parties both agree on is that some renovations were taking place at the property.
[60] However, I did not include the replacement of the windows on the list of renovations because the windows had been ordered before the APS was signed. It was, therefore, in the contemplation of the Kaiths that this renovation would be completed when they signed the APS.
[61] Although I have rejected Mr. Jassal’s evidence, in deciding whether the APS was rescinded, I must also consider the frailties in the testimony provided by the Kaiths. There are two specific concerns that must be considered.
[62] First, there is the question of why the Jassal’s deposit cheque was never returned by the Kaiths. Mr. Kundan Kaith testified that, when he spoke to Mr. Jassal about cancelling the APS, he was actually working at the 7086 Goreway property, and did not have the cheque. He also testified that Mr. Jassal was not concerned about the cheque. Finally, he testified that when he found out the Jassals were going to try and complete the transaction he tore up the cheque in anger. I accept this explanation as to why the cheque was not returned immediately, and why it no longer exists.
[63] Another issue with the Defendant’s version of events is the fact that everyone acknowledged that the Jassals were “eager buyers” in Mr. Swaine’s words. Mr. Swaine is quite correct in his characterization of the Jassal’s behaviour at the outset of these events. However, once the discussion about rescinding the transaction took place in mid-November, the Jassals did not demonstrate any further interest in the property. If the Jassals had remained “eager buyers”, they would have attempted to visit the property or discuss the renovations with the Kaiths. They did neither, which suggests that they had agreed that this transaction was not proceeding.
[64] In my view, the conversation that Mr. Jassal described took place, and both of the parties knew that they were rescinding this agreement. Both parties accepted this outcome. As a result, the contract was cancelled by mutual agreement, and the Plaintiff’s claim must be dismissed.
[65] It follows that I accept the Defendant’s theory of the case. Based on the evidence that I heard, I find as a fact that the Jassals rescinded the APS, and stood idly by while the renovations took place. Once they saw those renovations taking place, they decided to try and enforce the APS and obtain the benefit of the renovations.
[66] However, in the event that I am wrong in this conclusion, I will address the other two issues that presented themselves in this case.
Issue #3- Does the Doctrine of Promissory Estoppel Apply?
[67] The Kaiths argue that, if the transaction was going to proceed, the doctrine of promissory estoppel would apply. They take this position on the basis that the Kaiths detrimentally relied on the promise from the Jassals not to enforce this agreement.
[68] Ultimately, this case turns on whether the agreement was rescinded or not. If the agreement was not rescinded, then the doctrine of promissory estoppel would not preclude the Plaintiffs from seeking enforcement of the agreement, as there was no promise that the Kaiths could rely upon.
[69] However, since I have found that the agreement was rescinded, the doctrine of promissory estoppel is not relevant to this case.
Issue #4- What is the Quantum of Damages?
[70] Counsel for the Plaintiff argues that specific performance was an appropriate remedy in this case. As a result, he argues that his client had a substantially reduced obligation to mitigate. The Plaintiff is claiming damages in the amount of the difference between the $530,000.00 he offered to pay for the house and the $655,000.00 it actually sold for in the fall of 2014.
[71] Even if I had found that the APS had not been rescinded, I would not be prepared to award the Jassals any damages beyond nominal damages in this case. To understand the reasons for my conclusion, some background on the facts and the law is necessary.
a) The Law Governing Specific Performance
[72] In his submissions, Mr. Swaine argued that this was an appropriate case for specific performance. He advances that argument on the basis that this was a residential real estate transaction, and that specific performance is generally awarded in this type of transaction. He also argued that the house at 7086 Goreway Drive was a unique house to the Jassals because of its location and size. Uniqueness is not singularity in Mr. Swaine’s view. He does not need to show that the property was incomparable, merely close to the various things that the purchasers wanted. Finally, he argues that specific performance is appropriate in this case because of the fact that the Defendants were warned the Plaintiff would be seeking specific performance.
[73] The law of specific performance as it relates to real estate transactions has evolved in Canada since the decision in Semelhago v. Paramadevan (, [1996] 2 S.C.R. 415). That case was argued on the assumption that specific performance was an appropriate remedy for the parties in Semelhago. However, in speaking about specific performance generally, Sopinka J. stated:
It is no longer appropriate, therefore, to maintain distinction in the approach to specific performance as between realty and personalty. It cannot be assumed that damages for breach of contract for the purchase of the sale of real estate will be an inadequate remedy in all cases. The common law recognized that the distinction might not be valid when the land had no peculiar or special value…
Courts have tended, however, to simply treat all real estate as being unique and to degree specific performance unless there was some other reason for refusing equitable relief… Some courts, however, have begun to question the assumption that damages will afford an inadequate remedy for breach of contract for the purchase of land…
[74] These comments were obiter. However, they have been followed in numerous subsequent decisions. In de Franco v. Khatri ([2005 O.J. No. 1890), Pepall J. (as she then was), considered both this obiter and the decision of Lax J. in John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd. ((2001), 56 O.R. (3d) 341). She then extracted the following principles from the cases:
Specific performance should not be granted absent evidence that the property is unique to the extent that its substitute is not readily availability: Semelhago v. Paramadevan, supra.
There must be some fair, real and substantial justification for the claim: Baud Corp., N.V v. Brook, supra.
The plaintiff must show that an order for the property, rather than its monetary equivalent better serves justice between the parties: John E. Dodge Holdings Ltd., supra.
The burden of proof to establish that property is unique and that damages are inadequate to do justice should be on the plaintiff: John E. Dodge Holdings Ltd. and Semelhago v. Paramadevan.
There is a subjective and objective aspect to uniqueness: John E. Dodge Ltd. supra. In that case Justice Lax stated at page 356, “While it is difficult to be precise about this, it strikes me that normally the subjective aspect will be less significant in commercial transactions and more significant in residential purchase, unless the motivation in the latter case is principally to earn profit. In terms of the subjective aspect, the court should examine this from the point of view of the plaintiff at the time of contracting. In some cases, there may be a single feature of the property that is significant, but where there are a number of factors, the property should be viewed as a whole. The court will determine objectively whether the plaintiff has demonstrated that the property has characteristics that make an award of damages inadequate for that particular plaintiff. Obviously investment properties are candidates for damages and not specific performance.
[75] It is these principles that I intend to apply to the case at bar.
b) The Events in this Litigation
[76] There are a number of facts that are relevant to determining whether Mr. Jassal is entitled to damages for specific performance. The most significant is the uniqueness of the house, which I will return to below. However, there are other issues that must be addressed.
[77] First, there is the decision of Skarica J. to lift the Certificate of Pending Litigation on July 22nd, 2013. In that decision, Skarica J. set aside the CPL on the basis that Mr. Jassal had made material misrepresentations to the Court, and on the basis that, given Mr. Jassal’s reasons for wanting to purchase this house, damages would be a sufficient remedy.
[78] Skarica J.’s decision raises real questions about whether the second and third principles I have set out above could be established by Mr. Jassal in this case. Skarica J. has also raised significant questions about Mr. Jassal’s credibility. I have not considered the portions of Skarica J.’s reasons relating to credibility in my analysis, as I had the advantage of having viva voce evidence from Mr. Jassal.
[79] Second, there is the fact that the Jassals did not purchase this property when the Kaiths put it up for sale in 2014. Although it is not completely clear to me that the Jassals were aware that the property was up for sale, I am surprised that they did not try and purchase it when the Kaiths sold it.
[80] Again, this fact raises questions about whether Mr. Jassal can satisfy the test for specific performance I have set out above. However, the most significant issue is whether Mr. Jassal can prove that the house is sufficiently unique. I now turn to that issue.
c) The Uniqueness of this House
[81] In their original testimony, the Jassals both testified that this house was unique to them because it was a “double storey” house in their neighbourhood. I also heard mention that this property was along the route followed by the Kirtan, which is an annual parade.
[82] However, Mr. Jassal, in his reply evidence, advanced a couple of other reasons that this house was unique, as follows:
a) It was near his doctors and the shopping mall, and he could walk to both of these locations.
b) He could walk to work from this house.
c) He wanted two separate garage doors on his house.
[83] When the evidence as a whole is reviewed, none of these explanations are supported.
[84] First, in his reply evidence, Mr. Jassal conceded that many of these explanations for the uniqueness of 7086 Goreway Road had not been advanced at any time on discovery, in his examination at trial, or in his cross-examinations on his Affidavits. If Mr. Jassal had really wanted the Goreway property for these reasons, he would have advanced them consistently from the beginning of the litigation. His lack of consistency makes his evidence unreliable on this point. I reject these explanations for this reason alone.
[85] Second, there is the “double storey” position. In the course of Mr. Jassal’s reply evidence, it became clear that he had bought and demolished a different home in the area. It was not a two storey house. It is clear that the Jassals were prepared to renovate any home that they purchased, and that a double storey home was not necessary. Again, their explanations for the “uniqueness” of the Goreway home do not stand up to the evidence that was tendered.
[86] Third, Mr. Jassal asserted that he was seeking a larger property. However, in his cross-examination during his reply evidence, he acknowledged that he put offers in on smaller properties, and that he was prepared to purchase a smaller property.
[87] Finally, in terms of the parade route, the house on Justine Street that the Jassals did purchase is not on the parade route. If this was a significant concern for them, they would not have purchased this property.
[88] When all of this evidence is reviewed, it is clear that the Jassals were prepared to accept a different property in their neighbourhood. There is nothing unique about the 7086 Goreway property that the Kaiths owned to justify specific performance. There is no justification, much less a fair real and substantial one, for specific performance in this case.
[89] The claim for specific performance would have been dismissed for the foregoing reasons, even if I had found that the APS had not been rescinded by the parties.
d) Damages in Lieu of Specific Performance
[90] The last question that remains is whether there should have been an award of damages in lieu of specific performance. While this question does not arise on the facts I have found, I will answer it in the event that I am wrong about my conclusions that the APS had been rescinded by the parties.
[91] In their evidence, the Defendants provided a package of Multiple Listing Services (“MLS”) listings for properties. These listings showed that there were broadly similar properties available, all within one to three miles of the Goreway property. Mr. Pawan Kaith testified about the similarities in these properties and the Goreway property.
[92] Mr. Jassal testified that none of these houses were suitable for him, and he would not have considered any of these houses as a substitute for 7086 Goreway Road. Neither party actually went inside any of these houses. I am left to review the listings and the testimony that has been provided.
[93] I reject Mr. Jassal’s evidence on the basis of my analysis of his credibility. He was a witness that was prepared to say whatever was necessary to support his case, and his testimony is entirely unreliable. Further, there was a specific example of the unreliability of his testimony in his evidence about these properties.
[94] He testified that he did not like a number of these properties because he did not want the garage in front of the house. He stated that that having a garage in front of the house destroys the overall appearance of the house. However, when confronted with the photographs of the house that he is building on Justine Avenue, he was forced to admit that the garage in his new house will be at the front of the house, with living space overtop of it. He explained this inconsistency by saying that, in the case of his house, the garage is on the inside of the house. Again, this explanation made no sense to me, and I reject it.
[95] In the circumstances, then, I am left with a series of MLS listings that show similar properties were available in the neighbourhood for a similar price at about the same time that this transaction was supposed to close. I find as a fact that a similar property would have been available in the neighbourhood for the same price. Therefore, even if I am wrong in my conclusion that the APS was rescinded, the Plaintiff would still not have been entitled to any damages.
Disposition
[96] The parties entered into an APS for the property at 7086 Goreway Drive on November 4th, 2012. Approximately ten days later, they orally agreed to rescind this APS. Once the Plaintiff saw a considerable amount of renovation work being performed on the house, he sought to enforce the rescinded APS by attempting to close the transaction, and by bringing this lawsuit.
[97] For the reasons set out above, the Plaintiff’s claim is dismissed.
[98] In the event that the parties are unable to agree on costs for this action, I will receive costs submissions from the Defendant within fourteen (14) days of the release of these reasons. These submissions are to be no more than three (3) single spaced pages exclusive of bills of costs, case law and offers to settle.
[99] The Plaintiff will have fourteen (14) days from receipt of the Defendant’s costs submissions to provide their responding costs submissions. Again, these submissions are to be no more than three (3) single spaced pages, exclusive of bills of costs, case law and offers to settle.
[100] There will be no reply submissions on costs without leave of the Court.
LEMAY J