CITATION: Bianchini v. 1670948 Ontario Inc., 2016 ONSC 7367
COURT FILE NO.: CV-13-116437-SR
DATE: 20161128
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Magaly Bianchini
Plaintiff
– and –
1670948 Ontario Inc. and Homelife Woodbridge Realty Inc.
Defendants
AND BETWEEN:
1670948 Ontario Inc.
Plaintiff by Counterlcaim
– and –
Magaly Bianchini
Defendant by Counterclaim
Gregory W. Roberts, for the Plaintiff/Defendant by Counterlcaim
Brad Teplitsky, for the Defendant/Plaintiff by Counterclaim, 1670948 Ontario Inc.
HEARD: November 18, 2016
JUDGMENT
Gilmore J.:
Overview
[1] This summary procedure trial related to an $80,000 deposit on a failed real estate transaction. The issues were narrow and can be summarized as requiring the court to decide whether or not the vendor gave clear and unequivocal acceptance of the purchaser’s anticipatory breach.
[2] If such acceptance is not found to be clear and unequivocal, the deposit will be returned to the purchaser. If it was, the vendor receives the deposit as the damages claimed.
[3] The matter proceeded by way of submissions and affidavit evidence as most of the background facts in this matter are not contested. No witnesses were called and therefore no cross-examination took place. The defendant, Homelife Woodbine Realty Inc. (“Woodbine”), is the real estate office where the deposit remains. Woodbine was not represented at trial but has indicated it will release the deposit in accordance with the terms of this judgment.
[4] The defendant purchaser is not pursuing its counterclaim for $500,000, only the return of the deposit.
Background
[5] The plaintiff, Ms. Bianchini (the “Vendor”) owns the subject property (the “Property”) in King City jointly with her brother Robert Bianchini. Ms. Bianchini entered into an agreement of purchase and sale with the defendant 1670948 Ontario Inc. (the “Purchaser”) on October 6, 2012. Reza Nezami (“Mr. Nezami”) is the President and Director of the Purchaser.
[6] The Purchaser paid an initial deposit of $10,000 to Woodbine. The Purchaser waived the financing condition on November 14, 2012 and paid a further $70,000 deposit to Woodbine thereby making the agreement firm and binding. It was agreed that closing would take place on April 3, 2013.
[7] On April 3, 2013 at 2:17 p.m., the Purchaser’s lawyer, Steven Pottins (“Mr. Pottins”) sent an email to the Vendor’s lawyer, Rod Bush (“Mr. Bush”) stating “Our client has not yet received confirmation of the financing and will not be able to close today.”
[8] On April 3, 2013 at 4:34 p.m. Mr. Bush sent a letter to Mr. Pottins by way of email attachment. The content of that letter is important to the underlying issue in this case and as such is set out below:
We acknowledge receipt of your email correspondence of April 3, 2013 wherein you advised that your client is not in a position to complete this transaction. Our clients are ready, willing and able to complete this transaction and are not willing to extend closing. It is therefore our position that your client is in breach of the Agreement of Purchase and Sale, the deposits are forfeited and our clients reserve the right to sue for any additional damages which they may sustain.
Our clients have made no misrepresentation whatsoever and the property is as it was when viewed by the Buyer.
We enclose copies of the following originally executed documentation in accordance with your instructions:
Vendors’ Warranty
Vendors’ Undertaking
Vendors’ Bill of Sale
Vendors’ Statutory Declaration
Seller’s Closing Certificate
Mortgage Statement from Royal Bank of Canada
Solicitor’s Undertaking
Seller’s Lawyer Re Direction and Undertaking
Transfer as prepared.
We are unable to execute the Teraview Transfer as you have not completed the particulars with respect to the Transferee.
We have advised our client to relist the property for sale and will look to your client for all damages.
[9] The parties do not dispute that the email notification by Mr. Pottins to Mr. Bush on the day of closing was an anticipatory breach and tender is thereby made futile by the conduct of the Purchaser.
[10] The Purchaser contends that the letter from Mr. Bush was not an unequivocal termination of the deal when read in context with the affidavit of the real estate agent, Michael Zullo. Mr. Zullo deposes in his affidavit of November 7, 2016 as follows:
“On the day of the aborted closing (being April 3, 2013), I had discussions with the Plaintiff about further extending the closing date so that the issues between the parties could be hopefully resolved. During my discussions with the Plaintiff (which took place during the afternoon and evening of April 3rd), she advised me that she was willing to extend the closing date but was concerned about giving the Defendant a vendor take-back mortgage. The Plaintiff informed me that she wanted to take a day to think about how long she was prepared to further extend the closing however she made it clear to me that she still wanted to close the transaction with the Defendant if possible.”
“I did not hear back from the Plaintiff until April 6th. She advised that she preferred to close immediately if possible but was prepared to wait two weeks to close if that would facilitate the closing. She also made it clear that she would not agree to a vendor take-back mortgage. Attached hereto and marked as Exhibit “A” is a true copy of an email from me to Mr. Nezami regarding these matters dated April 6, 2016.”
[11] Mr. Zullo attaches as Exhibit “A” to his affidavit a copy of an email he sent to Mr. Nezami on April 6, 2013 indicating that the Purchaser was willing to close and give him a week or two to get financing, but she would not take back a mortgage.
[12] The Purchaser in response to Mr. Zullo’s affidavit swore a supplementary affidavit on November 10, 2016. She has a different recollection of events. The Purchaser deposed as follows:
“I recall telling Mr. Zullo sometime on April 6, 2013 that I would be willing to consider entering a new agreement of purchase and sale scheduling a new closing date a week or two from April 3, 2013, provided Mr. Nezami showed me evidence of having arranged the financing he needed to close within a few days, which he never did.”
“The reason I recall specifically telling Mr. Zullo that Mr. Nezami (or his company) would be a new closing date is because my lawyer, Rod Bush, advised me clearly and I verily believe that the transaction had terminated on April 3, 2013, and that a new written agreement was required…”
The Position of the Vendor/Plaintiff
[13] The Vendor submits that following its clear and unequivocal acceptance of the anticipatory breach by way of Mr. Bush’s April 3rd letter the agreement was at an end. The wording of the letter could not be clearer as it states that the Vendor was not willing to extend closing, the deposits would be forfeited and his client would sue for damages.
[14] There can be no waiver as a result of any discussions between Mr. Zullo and Ms. Bianchini. Any discussions did not take place until two days after April 3rd. In any event, the Purchaser has never proved (despite giving undertakings on discovery) that he had the money to close. The fact that Ms. Bianchini indicated that she would have entered into a new deal does not revive the old agreement.
The Position of the Defendant/Purchaser
[15] Counsel for the Purchaser concedes that the law is clear that where an anticipatory breach occurs, the Vendor need not go through the formality of tendering. However, the acceptance of the anticipatory breach must be clear and unequivocal. The Purchaser submits that Mr. Bush’s April 3rd letter was neither clear nor unequivocal that the agreement was at an end. As such one must look to the conduct of the parties at the relevant time to corroborate the Vendor’s intentions.
[16] The Purchaser argues that the Vendor’s discussions with Mr. Zullo result in the acceptance of the anticipatory breach being less than unequivocal. That is, the discussions of extending the agreement on April 3rd between Mr. Zullo and Ms. Bianchini and Mr. Bush’s letter of the same date cannot co-exist.
[17] In Ms. Bianchini’s affidavit of November 10, 2016 she does not deny that she spoke to Mr. Zullo on April 3rd. Further, Ms. Bianchini’s evidence on discovery (taken on November 3, 2016) was that she was willing to close on April 3, 2013 and that she did not see Mr. Bush’s April 3rd letter before it went out. She could not recall when she first saw it. Ms. Bianchini’s evidence that she was ready to close at any time on April 3rd is in direct contradiction to Mr. Bush’s letter in which it clearly states that the Vendor would not extend the closing.
[18] With respect to the Mr. Bush’s letter of April 3rd, the Vendor submits that it was wrong for him to use wording such as “ready, willing and able to close” and to talk about signing the transfer while at the same time treating the deal as at an end. This combined with Ms. Bianchini’s discussions with Mr. Zullo result in ambiguity about the agreement being at an end. Time was no longer of the essence.
Analysis and Conclusion
[19] The law is clear that where a vendor has committed an anticipatory breach, tender is not required, the purchaser is relieved of his/her obligations under the contract and entitled to damages.[^1]
[20] The parties agree that anticipatory breach occurred in this case based on the email sent by Mr. Pottins informing Mr. Bush that his client was unable to close as he did not have the required funds. Given that the financing condition had been waived, an anticipatory breach occurred in the relaying of that information to Mr. Bush.
[21] The issue to be determined by this court is as follows; did the actions of Ms. Bianchini on April 3, 2013 negate or contradict the terms of Mr. Bush’s letter to the point where acceptance of the anticipatory breach is less than clear and unequivocal?
[22] The answer to that question must be no, for the following reasons;
(a) The April 3, 2013 letter is clear on its face that the deal would not be extended and that damages would be sought. The fact that Mr. Bush included copies of the signed closing documents and indicated he was “ready, willing and able to close” is simply superfluous in my view. He provided additional and unnecessary information in the letter but nothing that would take away from his clear acceptance of the anticipatory breach.
(b) Mr. Zullo’s affidavit does not make it clear exactly when he spoke to Ms. Bianchini on April 3, 2013. If it was before Mr. Bush’s letter at 4:35 p.m., it is irrelevant as the letter would clarify and finalize the Vendor’s position. If it was after 4:35 p.m. and even if that conversation could be viewed as a waiver, there was no tender by the Purchaser nor has there ever been proof he has or had the funds to close.
(c) There are also some credibility issues to be addressed in terms of what weight to give to Mr. Zullo’s affidavit. It cannot be ignored that he was acting on both sides of this deal. He clearly wanted it to be completed. It is uncertain what gloss this may have put on his recollection or the form of his communication with his clients. Further, the only real proof he provides of the conversation with Ms. Bianchini is an email to the Purchaser dated April 6, 2013 in which he states that that Ms. Bianchini was willing to close if the Purchaser had the financing but would not take back a mortgage. He does not provide any email confirming a conversation on April 3, 2013. I am unable to give the weight to Mr. Zullo’s affidavit that the Purchaser requests.
(d) I do not view Ms. Bianchini’s alleged contact with Mr. Zullo on April 3, 2013 as one which created a waiver or made Mr. Bush’s letter less than unequivocal. I accept Ms. Binachini’s affidavit evidence that she would have entered into a new agreement if the Purchaser had the funding based on her lawyer’s advice. There is no evidence the Purchaser was ever in receipt of funds so no steps were taken.
[23] Given all of the above I find that there was clear and unequivocal acceptance by the Vendor of the anticipatory breach of the Purchaser. The deposit shall be paid as the claimed damages to the Vendor. The counterclaim is dismissed.
[24] Counsel agreed that $15,000 in costs was appropriate. Those costs shall be paid to the Vendor by the Purchaser forthwith.
Madam Justice C.A. Gilmore
Released: November 28, 2016
CITATION: Bianchini v. 1670948 Ontario Inc., 2016 ONSC 7367
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Magaly Bianchini
Plaintiff
– and –
1670948 Ontario Inc. and Homelife Woodbridge Realty Inc.
Defendants
AND BETWEEN:
1670948 Ontario Inc.
Plaintiff by Counterlcaim
– and –
Magaly Bianchini
Defendant by Counterclaim
JUDGMENT
Madam Justice C.A. Gilmore
Released: November 28, 2016
[^1]: It’s About “Time,” R. Rosenblatt, 4th Annual Real Estate Law Summit, April 18, 2007, p. 7.