Defined Terms

[1] The following are defined terms herein:

a) "170", is the plaintiff 1702620 ONTARIO INC.

b) "116", is the plaintiff 11686977 ONTARIO INC.

c) "S-P Agreement", is the share purchase agreement as to the shares of 170 between Mr. Nichols, Delia Charbonneau as vendors and Mr. D’Ascenzo as purchaser;

d) "S-P Amending Agreement", is a signed agreement between Mr. Nichols and Mr. D’Ascenzo dated November 21, 2006 amending the S-P Agreement regarding the sale of 100 Class A common shares and 117,286 Class A special shares of 170 to Mr. D’Ascenzo ;

e) " S-P Transaction", is the transaction related to the S-P Agreement;

f) "511 Land", is vacant land consisting of 1.17 acres being part of lot 12, concession 9 in Bagot Township;

g) "511 Agreement of P-S", is a signed agreement of purchase and sale dated October 26, 2006 in which Mr. D’Ascenzo was to purchase the 511 Land from Mr. Nichols for $20,000 with a closing of November 24, 2006;

h) "Buckhorn Plaza", is a 7,000 square foot commercial plaza consisting of part of lot 18, concession 11 in the Greater Madawaska Township and designated as part 2 on reference plan 49-13397;

i) "Extension Agreement" is an agreement dated November 24, 2006 between Mr. Nichols and Mr. D’Ascenzo extending the closing of the 511 Land purchase agreement from November 14 to November 20, 2006 and the closing of the Agreement to December 20, 2006, or such later date as reasonably required;

j) "Petting Zoo Land", is approximately five acres of vacant land adjoining the Buckhorn Plaza, consisting of part of Lot 18, concession 11 and designated as part 1 on reference plan 49R-13397, in the Township of Greater Madawaska;

k) "Petting Zoo Land Amending Agreement" is dated April 7, 2007 and amends certain terms regarding the purchase and sale of the Petting Zoo Land and the 511 Land.

Transactions Generally

[2] Mr. D’Ascenzo and Mr. Nichols are businessmen. Mr. Nichols, personally or through corporations, owned several businesses and pieces of land which Mr. D’Ascenzo wanted to buy.

[3] Mr. D’Ascenzo wished to purchase:

a) Mr. Nichols’ shares in 170. 170 owned a commercial plaza called Buckhorn Plaza;

b) The Petting Zoo Land; and

c) The 511 Land.

[4] Mr. D’Ascenzo and Mr. Nichols agreed upon the terms of the S-P Agreement in 2006 pursuant to which Mr. Nichols sold the shares in 170 to Mr. D’Ascenzo.

[5] The S-P Transaction included terms by which Mr. Nichols was to sell the Petting Zoo Land and the 511 Land to the plaintiffs.

[6] During argument of this motion, counsel for the parties agreed that this Court should accept and proceed on the basis that:

a) The S-P Agreement was agreed to and signed by the parties thereto;

b) Mr. Nichols at the time of closing of the S-P Agreement owned all of the shares of 170 which he sold to Mr. D’Ascenzo ;

c) The S-P Transaction closed on November 24, 2006 pursuant to which Mr. Nichols was paid $280,000 which payment is separate and apart to the subsequent payment of $168,727 to Mr. Nichols;

d) The plaintiffs since the closing of the S-P Transaction have paid Mr. Nichols an additional $168,727 towards their purchase of the Petting Zoo Land and the 511 Land.

[7] Notwithstanding the $168,727 payments towards the Petting Zoo Land and the 511 Land, title therein has never been transferred to the plaintiffs. Mr. Nichols continues to be the owner of those property.

[8] This proceeding and summary judgment motion primarily concerns the agreed upon sale by Mr. Nichols and the purchase by the plaintiffs of the Petting Zoo Land and the 511 Lands

Present Motion

[9] The Plaintiffs seek summary judgment pursuant to rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, and request:

a) A declaration that Mr. D’Ascenzo is entitled to rescind and treat the agreement for the purchase of the Petting Zoo Land at an end and an order requiring Mr. Nichols to pay Mr. D’Ascenzo $168,727 as reimbursement for the monies paid for that property, together with interest thereon;

b) Damages or restitution in the amount of $1,955.03, representing the amount Mr. D’Ascenzo paid towards municipal property taxes on the Petting Zoo Land;

c) An order of specific performance compelling Mr. Nichols to take all steps necessary to obtain clear title to Lot 511 Land within eighteen (18) months of the date of the summary judgment order and then convey that land to Mr. D’Ascenzo for consideration in the amount of $27,636.42, being the $20,000 purchase price thereof plus interest at 6% for the years 2008 and 2009, 7% for 2010 and 8.5% for 2011 and 2012 and ;

d) Damages or restitution in the amount of $1,995.00 for the cost of the survey of the 511 Land filed in the severance application filed by the plaintiffs;

e) Damages or restitution in the amount of $5,000.00 representing the cost of replacement signage at the Buckhom Plaza; and

f) Pre-judgment and post-judgment interest on all monetary awards granted pursuant to the Courts of Justice Act, R.S.O. 1990, c. C.43.

Defendant Opposition to Summary Judgment

[10] Mr. Nichols in opposing summary judgment alleges:

a) The plaintiffs in February 2013 defaulted in payment of the combined mortgage debt for the purchase of the Petting Zoo Land and the 511 Land;

b) Sale of the 511 Land requires severance from the Township which has never been obtained, severance constitutes a condition precedent which has not been satisfied thereby preventing the plaintiffs ability to seek specific performance as to that transaction;

c) Mr. D’Ascenzo breached, resiled from and is in default of the mortgage agreement thereby preventing the plaintiffs from obtaining the relief sought;

d) The partial payments paid to Mr. Nichols under the mortgage agreement do not constitute part performance of a contract involving land. The partial payments received in the context of the parties’ commercial contracts do not entitle the court to grant equity. The plaintiffs’ misconduct in any event disentitle them to equitable relief;

e) The plaintiffs are not entitled to specific performance as to the 511 Land because damages are an adequate remedy, the plaintiffs intentions from the beginning was to resell the 511 Land and that sale required Township severance which was not obtained; and

f) A just determination of the merits of this proceeding cannot be achieved on a motion for summary judgment.

[11] As will be seen, no mortgage or charge was ever registered against the Petting Zoo Land or the 511 Land in relation to the sale and purchase as between the parties.

Pleadings

[12] This proceeding commenced on February 11, 2014.

[13] The plaintiffs in their Statement of Claim seek:

a) Specific performance of an agreement dated October 24, 2006 between Mr. D’Ascenzo and Mr. Nichols for the purchase of the Petting Zoo Land;

b) In the alternative to a) above, a declaration the plaintiff is entitled to treat the agreement for the purchase of the Petting Zoo Land at an end and Mr. D’Ascenzo’s entitlement to the return of $168,727.74 he paid for conveyance of that property, interest thereon and $100,000 damages for breach of contract for Mr. Nichols’ failure to complete the closing of that transaction;

c) Specific performance of the Agreement of Purchase and Sale dated October 26, 2006 for the purchase of the 511 Land;

d) In the alternative to c) above, a declaration that the plaintiffs are entitled to treat the above Agreement of Purchase and Sale of the 511 Land at an end and that Mr. Nicholas is required to repay all monies paid for the conveyance of that property together with interest and $25,000 damages for breach of contract for his failure to complete the closing of that transaction;

e) $10,000 in damages for money paid by the plaintiffs for municipal taxes and the cost of replacing signage wrongfully removed by the defendants.

[14] In his Statement of Defence, Mr. Nichols alleges that:

a) Pursuant to the S-P Agreement, he granted the option to the plaintiff to purchase the Petting Zoo Land but the plaintiff failed to exercise that option;

b) The plaintiff and the defendant had an agreement regarding the plaintiff’s purchase of the 511 Land, however the parties never completed the transfer;

c) The parties in October, 2007, entered into a verbal agreement involving the defendant’s sale to the plaintiff of the Petting Zoo Land and the 511 Land in exchange for a vendor take back mortgage of $130,000 secured against both properties;

d) The S-P Agreement contemplated that the parties would execute a purchase and sale agreement for the sale and purchase of the Petting Zoo Land and the 511 Land as well as a registered charge securing the mortgage against both properties;

e) Mr. Nichols urged the plaintiffs to complete the paperwork for the Petting Zoo Land and the 511 Land transactions, however the plaintiffs neglected or refused to do so;

f) The mortgage payments made by the plaintiffs to Mr. Nichols were made at their own peril absent the execution of a formal Agreement of Purchase and Sale;

g) The plaintiffs failed to complete the purchase of the Petting Zoo Land within 6 months as stipulated in the S-P Agreement, thereby rendering such option to purchase null and void;

h) The plaintiffs’ failure to complete the purchase of the 511 Land rendered such purchase null and void;

i) The defendant relies upon the Statute of Frauds, RSO 1990, c. S.19;

j) The plaintiffs stopped making payments in February, 2013 towards the ongoing vendor take-back mortgage, are now in default thereunder and have no rights to the subject property;

k) The plaintiffs have no cause of action against Mr Nichols for the recovery of payments made towards the purchase of the Petting Zoo Land and the 511 Land. Any loss suffered by the plaintiff is denied and if incurred, is the result of the plaintiffs’ negligence.

S-P Agreement

[15] The S-P Agreement, as amended by the S-P Amending Agreement, provides that:

a) All of the issued shares of 170 were to be purchased by Mr. D’Ascenzo on November 14, 2006 for a consideration of $280,000. That agreement and the payment of that purchase price are not in issue. 170 owned the Buckhorn Plaza;

b) Mr. D’Ascenzo was granted an option exercisable until April 1, 2007, to purchase the five acre Petting Zoo Land for $150,000;

c) Mr. D’Ascenzo was required to complete his purchase of the 511 Land simultaneously with the closing of the S-P Agreement; and

d) Certain signage including that of the Buckhorn Plaza were owned by and thus included in the assets of 170, the shares of which were sold to Mr. D’Ascenzo.

[16] The S-P Transaction closed on November 24, 2006. Mr. Nichols was paid the full purchase price thereunder of $280,000. The plaintiffs’ option in the S-P Agreement to purchase the Petting Zoo Land accordingly became exercisable until April 7, 2007.

Petting Zoo Land

[17] Mr. Nichols in his affidavit as to the plaintiffs’ purchase of the Petting Zoo Land and payment of the remaining balance of that purchase price, states that;

a) Title of the Petting Zoo Land was to be transferred to Mr. D’Ascenzo upon his purchase of that land however transfer of title never occurred, for reasons Mr. Nichols cannot explain;

b) Mr. Nichols was to receive a vendor take back mortgage registered against the Petting Zoo Land for the unpaid balance of the purchase price however such mortgage or charge was never registered, for reasons Mr. Nichols cannot explain;

c) The parties as to the vendor take-back mortgage initialled the draft Petting Zoo Charge Terms;

d) Mr. Nichols accepted the plaintiffs’ payments without registration of title transfer of the Petting Zoo Lands to the plaintiffs and despite the absence of registration of the vendor take- back mortgage to himself;

e) Mr. Nichols simply assumed in accepting the payments from Mr. D’Ascenzo that "a transfer would be executed and a mortgage registered" pursuant to s. 7.9 of the S-P Agreement.

[18] Mr. Nichols is fully aware that his failure to apply and obtain severance of the 511 Land which is why the plaintiffs stopped making payments. He is also aware of the latter agreement to delay closing of the Petting Zoo transaction until full payment of that purchase price which is why that transfer and vendor take back mortgage were never registered.

[19] The option in the S-P Agreement as to the purchase of the Petting Zoo Land provides that:

a) Such option was exercisable and the sale of the Petting Zoo Lands was to be completed by April 1, 2007, some four months after the November 24, 2006 closing of the S-P Agreement;

b) The $150,000 purchase price was payable by a $10,000 down payment. The remaining $140,000 purchase price was to be secured by a 5 year vendor take-back mortgage, amortized over 5 years, with equal monthly payments from November 1, 2007 to November 1, 2012, together with annual increasing interest of 6% in years one and two, 7% in year three, 8% in year four and 9% in the final year five. Payment of that five year mortgage was to commence November 1, 2007 and continue until November 1, 2012;

c) During the term of that vendor take-back mortgage, Mr. Nichols at his expense was to have the full use of the Petting Zoo Lands pursuant to a lease with an annual $1 rental fee.

[20] In summary, the vendor take-back mortgage of $140,000 to Mr. Nichols was originally to be registered against the Petting Zoo Land, which necessitated transfer of title to the purchaser and despite the sale of such property to the plaintiffs, Mr. Nichols was to retain full use of the Petting Zoo Land until re-payment of the vendor take back mortgage.

[21] Mr. D’Ascenzo on April 7, 2007 exercised his option to purchase the Petting Zoo Land, as evidenced by the April 7, 2007 notes to the solicitor as to that transaction.

[22] Mr. Nichols confirms that his lawyer at some point advised him that Mr. D’Ascenzo "did not want a mortgage because he did not want to pay the land transfer tax", so the Petting Zoo Land transaction therefore did not close.

[23] Land transfer tax would be payable upon registration of the deed of conveyance from Mr. Nichols, which he never provided to the plaintiffs.

[24] The parties in fact agreed to delay registration of the transfer of title of the Petting Zoo Land to the plaintiffs until payment of its full purchase price over time, as was consistent with Mr. Nichols’ retention of the full use of that property until payment of the $140,000 vendor take-back mortgage.

[25] The parties also agreed to "roll in" or add the $20,000 purchase price of the 511 Land to the $140,000 Petting Zoo purchase price balance, and thereby increased the unpaid balance of both properties owed to Mr. Nichols. That extended the ultimate closing date of the Petting Zoo Land sale, as confirmed by Mr. Merla.

[26] Mr. Merla was:

a) Mr. Nichols’ lawyer as to his sale of the 511 Land to the plaintiffs and the S-P Agreement; and

b) Was the lawyer of all parties as to the sale and purchase of the Petting Zoo Land.

[27] The terms of the sale and purchase of the Petting Zoo Land are adequately described in the S-P Agreement, the April 7, 2007 notes from the parties to Mr. Merla, the April 18, 2007 draft and initialled charge terms.

[28] The monthly payments of amortized principle and interest paid by the plaintiffs to Mr. Nichols relate specifically to and constituted payment towards the purchase prices of these two properties, including the Petting Zoo Land.

[29] The Statue of Frauds does not afford a defence to Mr. Nichols as to this transaction: Thompson v. Guaranty Trust Co., 1973 CanLII 161 (SCC), [1974] S.C.R. 1023 (S.C.C.), at p. 1029.

[30] The Statute of Frauds does not prevent the enforcement of or prevent a court granting specific performance of a verbal agreement as to land partially or fully performed: Hill v. Nova Scotia (Attorney General), [1997] 1 S.C.R. 68 (S.C.C.), at p. 74 and 75.

[31] The agreed upon extended closing of the Petting Zoo Land purchase until payment of its full purchase price developed during the parties agreement as to the plaintiffs’ purchase of the 511 Land.

511 Land

[32] Mr. D’Ascenzo as purchaser and Mr. Nichols as vendor signed an Agreement of Purchase and Sale regarding the 511 Lands dated October 26, 2006, namely prior to the November 21, 2006 S-P Amending Agreement and before the November 24, 2006 closing of the S-P Transaction.

[33] Mr. Nichols had the legal obligation under that contract to provide clear title to the 511 Land for closing: Varajao v. Azish, 2014 ONSC 3098, para. 25 (S.C.J.).

[34] The purchase price of the 511 Land pursuant to that Agreement of Purchase and Sale was $20,000. That agreement provides for a deposit of $1 and does not provide for a vendor take-back mortgage. This sale and purchase was to close on November 24, 2006, being the closing date of the S-P Transaction.

[35] Mr. D’Ascenzo on cross-examination stated that in the negotiation of the purchase price for Mr. Nichols’ shares in 170:

a) Mr. Nichols original price for the sale of 170’s shares was $300,000 and he as purchaser of those shares was seeking to reduce the purchase price to $280,000;

b) To bridge the $20,000 gap and conclude an agreement, Mr. D’Ascenzo proposed and Mr. Nichols agreed to include the sale and transfer by Mr. Nichols of an additional property, namely the 511 Land; and

c) The parties therefore agreed upon a total purchase price of $300,000, which was allocated, namely $280,000 for the shares of 170 as reflected in the S-P Agreement and $20,000 for the purchase of the 511 Land.

[36] Mr. D’Ascenzo’s exercise of his option in the S-P Agreement to purchase the Petting Zoo Land and Mr. Nichol’s knowledge as to the exercise thereof is evidenced by the April 7, 2007 amending agreement and the amortized monthly payments made for 6 years to Mr. Nichols of the combined unpaid portions of the purchase prices of the Petting Land Zoo and the 511 Land.

[37] Mr. Nichols retention of title and the plaintiffs’ payment to Mr. Nichols of the amortized principle and interest during 6 years towards the remaining purchase prices for these two properties and the motion documentation filed confirm the above allegations of Mr. D’Ascenzo.

Reasons Why 511 Land Purchase Did Not Close

[38] On November 10, 2006, Mr. Nichols was advised that there were several title defects as to the 511 Land which had to be corrected before closing. That 511 Land closing was accordingly postponed.

[39] Mr. Nichols was made aware that title to the 511 Land could not be transferred without severance approval pursuant to the Planning Act which required the signature of his sister, Irene Nichols, with whom he was not in communication and accordingly the closing of the 511 Land transaction was extended to December 20, 2006.

[40] Mr. Nichols alleges incorrectly that he instructed Mr. Merla in November 2006 to proceed and seek the required severance of the 511 Lands. Mr. Merla was waiting for and did not receive instructions to proceed with the severance application.

[41] In his affidavit which this Court accepts as to the 511 Land, Mr. Merla states that:

a) Mr. Nichols title of the 511 Land was defective under the Planning Act and required a severance of the lot into portions owned by Mr. Nichols and his sister;

b) Such severance required the consent of Mr. Nichols sister;

c) Mr. Nichols however was of the opinion that his title to the 511 Land required no correction or alternatively and that the responsibility and cost thereof was that of his former lawyer who registered his title, but not Mr. Nichols;

d) Mr. Nichols’ sister agreed to consent to the severance but was unwilling to agree to Mr. Nichols request that she pay half of the costs to obtain such severance.

e) Mr. Merla accordingly did not receive instructions from Mr. Nichols to proceed with the severance application.

[42] The parties as to the 511 Land concluded and signed the Extension Agreement on November 24, 2006 ("511 Land Extension Agreement") which:

a) Extended the closing of the sale and purchase of the 511 Land due to the requirement of a severance to December 20, 2006;

b) Confirms their agreement to such further extensions of 511 Land purchase as required, in order to "expeditiously clear title" regarding the 511 Land; and

c) Severed the 511 Land transaction from the S-P Transaction, with each to proceed independent of one another.

[43] Mr. Nichols admitted on his examination for discovery that even though the plaintiffs were making monthly amortized payments of the combined purchase prices of the two properties, with interest, he failed to instruct Mr. Merla to proceed with the severance application as to the 511 Land.

[44] Mr. Nichols 10 years later in October of 2016 has still not obtained the required severance of the 511 Land. As of June 2016, he had only then recently applied for such severance

[45] The allegation in the affidavit of Mr. Nichols’ niece that Mr. Nichols never refused to consent to a severance of the property and never refused to sign a written consent to such severance, misstates the issue. Mr. Nichols in fact never gave Mr. Merla instructions to proceed with the severance application because he did not wish to incur the related costs thereof including legal, survey, registration and severance application fees.

[46] The combination of the affidavit of Irene Nichols, her cross-examination thereon and her past written consent to the severance, confirms her consent to the required severance of the 511 Land. Her consent is not the issue as to that transaction. The issue remained Mr. Nichols refusal to pursue the severance as he contractually agreed and was legally obligated to pursue.

[47] The November 24, 2006 511 Land Extension Agreement undertaking by Mr. Nichols required him to proceed "expeditiously" to obtain the required severance in order to convey 511 Land title to the plaintiffs. Mr. Nichols refusal to honor this legal obligation contradicts his position on this motion in blaming others for his failure to seek the severance. His failure continued from 2007 to present, despite:

a) Mr. Nichols’ receipt in the interim from the plaintiffs of the $280,000 paid for the purchase of shares of 170 on the closing of the S-P Transaction; and

b) The subsequent payment to Mr. Nichols of an additional $168,727 over 6 years towards the purchase price of the 511 Land and the Petting Zoo Land including interest.

[48] Mr. D’Ascenzo and Mr. Fleming took steps to obtain the 511 Land severance which Mr. Nichols had failed to pursue. Mr. Nichols now faults the plaintiffs for taking such action to remedy his default.

[49] Mr. D’Ascenzo prepared an application for severance of the 511 Land. Mr. Nichols refused to sign the severance application because he would not agree to pay the associated costs to obtain a severance.

[50] Mr. D’Ascenzo had the necessary severance reference plan prepared at a cost of $1,995, which Mr. Nichols refused to pay.

[51] Although decided later, the Supreme Court in Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 S.C.R. 494, paras. 33, 63, 65 and 73, confirmed that contractual parties have an obligation;

a) To perform their contractual duties honestly and reasonably, not capriciously or arbitrarily; namely they must have appropriate regard to the legitimate contractual interests of the contracting partner and not seek to undermine the interests of the other party in bad faith; and

b) To act honestly in the performance of contractual obligations; namely not lie or otherwise knowingly mislead each other about matters directly linked to the performance of the contract.

[52] Mr. Nichols lack of intention and his failure to meet his contractual obligation and undertaking to seek severance of the 511 Land for nine or ten years, while he continued to receive and retain substantial payments from the plaintiffs pursuant to those purchase prices, contravened his contractual obligations as to the sale and transfer of the 511 Land.

[53] Mr. Nichols submits that specific performance may not be granted as to the 511 Land as:

a) That transactions was conditional upon obtaining land severance from a third party Township which is beyond the vendor’s control; and

b) Damages are an adequate remedy claimed in the alternative by the plaintiffs.

[54] Mr. Nichols is not legally entitled to elect to default in his obligation to convey proper title and thereby limit this purchaser to their alternative claim for rescission and damages. A defaulting vendor may not force the purchaser to pursue a particular remedy: Lyew v. 418658 Ontario Ltd., (1982), 1982 CanLII 3328 (ON CA), 134 D.L.R. (3d) 384 (Ont. C.A.) and Judricks Enterprises Ltd. v. Northstar (Windsor) Inc., 1996 CarswellOnt 2935 (Gen. Div.), para. 11.

[55] Mr. Nichols alleges that there were no further discussions with the plaintiffs regarding the 511 Lands after the 511 Land Extension Agreement. That is not what occurred.

2007

[56] Mr. D’Ascenzo was out of the country and he and Mr. Nichols agreed to extend the Petting Land Zoo option until his return. He and Mr. Nichols met and agreed on April 7, 2007 to terms as to the purchase of the Petting Zoo Land and the 511 Land purchase price which they jotted down and forwarded to Mr. Merla.

[57] Mr. D’Ascenzo alleges that he agreed at the request of Mr. Nichols to pay Mr. Nichols the $20,000 purchase price for the 511 Land by adding that amount to the remaining $110,000 Petting Zoo Land purchase price balance, resulting in a combined remaining purchase price obligation of $127,874 ($130,000 - $2,126), with $2,530.77 monthly amortized payments of principle and interest payable thereon. Such details are not disputed.

[58] Mr. D’Ascenzo produced the parties’ April 7, 2007 hand written note sent that date to Mr. Merla. Mr. Nichols does not deny this meeting or the agreed upon terms of this note.

[59] The April 7, 2007 Petting Zoo Land Amending Agreement contains terms the court accepts were agreed to by the parties, namely:

a) The plaintiffs as to their purchase of the Petting Zoo Land were to make a down payment of $10,000 to Mr. Nichols by April 13, 2007, which is the amount of the down payment required in the S-P Agreement as to the purchase of the Petting Zoo Land;

b) The plaintiffs would further make six $5,000 monthly payments on the 15th of the month between May 15 and October 15, 2007. That amends and reduces the vendor take-back mortgage amount provided in the S-P Agreement by advancing payment of $30,000 payment of that balance to 6 months without interest; rather than over 5 years with interest. The evidence is that those six $5,000 payments were made as agreed upon in the Petting Zoo Land Amending Agreement;

c) The remaining purchase price balance of $110,000 for the Petting Zoo Land would be amortized and paid with annual interest of 6%, 7%, 8% and 9% which was to be secured by a mortgage;

d) The $20,000 purchase price for the plaintiffs’ purchase of the 511 Lands would be "rolled into" the Petting Zoo Land vendor take-back mortgage, resulting in a combined principle mortgage debt of $130,000, with interest as above indicated.

[60] Mr. Nichols was being "paid" the 511 Land $20,000 purchase price by way of a debt acknowledgement together with interest, with that debt being added to the Petting Zoo Land purchase price balance obligation which the plaintiffs agreed to pay with interest during a fixed term.

[61] Mr. Merla, acting for all parties, wrote a letter to Mr. Nichols as to the sale and purchase of the Petting Zoo Land, the 511 Land purchase price and refers to the "D’Ascenzo Mortgage". That letter provides for payment:

a) Of the remaining $110,000 Petting Zoo Land purchase price, after payment of the $10,000 deposit and six $5,000 monthly payments in 2006;

b) Of the $20,000 purchase price for the 511 Lands which was to close December 20, 2006, making a total debt liability of $130,000; as to which,

c) There would be monthly payments of $2,530.77, beginning December 16, 2007, until November 16, 2012 and payable on the 16th of each month.

[62] Attached to that lawyer’s letter is a December 2007 to November 2012 blended mortgage amortization schedule as to payment of $128,424 with annual increasing interest at the same rates as provided for in the S-P Agreement Petting Zoo Land option terms and the April 18, 2007 draft charge terms.

[63] The evidence is clear that Mr. Nichols agreed to the payment to him of that $128,424 combined purchase price balance on such terms. He acknowledges payment of the initial $40,000, which reduced the original combined total principle purchase liability of $168,727 which he acknowledges has been paid to him as well.

[64] Mr. D’Ascenzo alleges he and Mr. Nichols on April 7, 2007 also agreed verbally that:

a) His option to purchase the Petting Zoo Lands for $150,000 was extended to April 17, 2007;

b) Mr. Nichols would continue to be the registered owner of the Petting Zoo Land until full payment of its purchase price, together with annual Interest of 6% for the first two years and 7%, 8% and 9% annually during years 3 to 5;

c) Mr. D’Ascenzo would be required to pay the remaining balance of the purchase price if Mr. D’Ascenzo wished to build or sell the Petting Zoo Lands.

[65] The closing of the sale and purchase of the Petting Zoo Land would accordingly be delayed until full payment of the purchase prices of the Petting Zoo Land and the 511 Land.

[66] The subsequent actions of the parties evidence their agreement to these additional verbal terms to the April 7, 2007 Petting Zoo Land Amending Agreement in that:

a) The plaintiffs on April 17, 2007 paid Mr. Nichols the $10,000 deposit for their purchase of the Petting Zoo Land as stipulated in the S-P Agreement;

b) The plaintiffs paid the municipal taxes of the Petting Zoo Land from 2007 to 2013; as verbally agreed to; and

c) Mr. Nichols, without objection then or later, remained the owner of the Petting Zoo Land and the 511 Land while he received and retained the initial $40,000 purchase price by October 2007 and the amortized monthly payments of the combined purchase prices with interest; as verbally agreed to.

[67] The evidenced agreement of the parties to the above verbal terms distinguishes this verbal agreement from the facts and conclusions of the Supreme Court in Turney v. Zhilka 1959 CanLII 12 (SCC), [1959] S.C.R. 578, relied upon by Mr. Nichols.

[68] The above agreed upon verbal terms, within the context of the Supreme Court’s decision on Hawrish v. Bank of Montreal 1969 CanLII 2 (SCC), [1969] S.C.R. 515, at 519, did not contradict the provisions of the exercised option clause as subsequently amended in writing, in that the closing date of that purchase was extended by these verbal terms agreed to until payment over time of the full purchase price with interest and until then, Mr. Nichols would retain ownership and use of that land.

[69] Contractual documents as to land does not preclude oral evidence to show that the contract does not contain all of the terms and to establish other unspecified terms of the contract: Turney, supra at p. 582.

[70] The parties initialled and produced a draft "in preparation" charge form dated April 18, 2007 being the proposed vendor take-back mortgage terms to be registered against the Petting Zoo Land which further evidences terms of their agreement.

[71] The signed draft charge form dated April 18, 2007, records agreement to the following terms:

a) Chargor – one of the plaintiffs;

b) Principle - $140,000;

c) Initial $5,000 monthly payments – May 15 to October 15, 2007;

d) $110,000 balance – payable over five years with interest of 6% from October 15, 2007 to October 15 2009, 7% in year 3, 8 % in year 4 and 9% in year 5 to October 15, 2012;

e) Monthly blended payments of principle and interest payable on the 15th of each month. (the "Petting Zoo Charge Terms")

[72] That vendor take back charge of the Petting Zoo Land was not registered because the parties had agreed to delay the closings of the Petting Zoo Land purchase until full payment of the combined purchase prices, together with interest.

[73] The agreed upon charge terms were adopted as the terms of the plaintiffs’ written obligation to pay Mr. Nichols the combined purchase prices with interest over time, independent of a registered charge which was inapplicable due to the agreement to delay closing of the Petting Zoo Land purchase until payment of the full combined purchase price of the two properties, with interest. These agreed upon charge terms, as amended by inclusion of the 511 Land purchase price, became the increased Petting Zoo Land purchase price payment terms.

[74] Mr. D’Ascenzo on cross examination acknowledges that the plaintiffs would not have title to the two properties until payment of the full $130,000 combined purchase price balances; over and above the $40,000 already paid. That acknowledgement by Mr. Nichols refers to the delay in transfer of the Petting Zoo Land until full payment of the combined purchase prices. That acknowledgment by Mr. Nichols does not refer to nor preclude the transfer of title of the 511 Land as to which there is no evidence of terms creating a delay in transferring that title, beyond obtaining a severance.

[75] The delay to transferring title until payment of the combined purchase price applied to the transfer of title of the Petting Zoo Land, against which there was to be a registered mortgage/ charge, which was then converted into a payment obligation and the delay of transfer of the Petting Zoo Land until the combined purchase prices were paid with interest.

[76] Based on the evidence, the payment delay condition as to the transfer of title of the Petting Zoo Land was not applicable to the transfer of title of the 511 Land.

[77] Mr. Nichols has known fully well that the reasons he has not transferred title of the properties is because of his agreement with the plaintiffs that:

a) Title of the Petting Zoo Land would remain in his name until full payment of its purchase price and that of the 511 Land;

b) Title of the 511 Land would remain in his name until its transfer after he obtained a severance thereof which he undertook to pursue "expeditiously"; and

c) The plaintiffs absent his obligation to sell those properties to them would not have paid him $168,727.

[78] The above contractual documents and payment towards these specific purchase prices, met the requirement for a written contractual terms and/or acts of specific performance regarding payment of these two purchase prices, as required by the Statute of Frauds and that such terms constituted the terms for the carrying out of the two purchase contracts; as provided by the Supreme Court in McKenzie v. Walsh, (1920) 1920 CanLII 72 (SCC), 61 S.C.R. 312.

Subsequent Events

[79] After December 2007, the tension between the parties grew as the plaintiffs in the interim made monthly principle and interest payments to Mr. Nichols towards the combined purchase price of the two properties, including the 511 Land which could not be conveyed without Mr. Nichols obtaining the severance.

[80] Mr. D’Ascenzo alleges that in relying upon Mr. Nichols undertaking to severe the 511 Land and correct the title issues, he also paid municipal taxes for the Petting Zoo Land between 2007 and 2012 totalling $1,955, until February, 2013 when the plaintiffs stopped making payments to Mr. Nichols.

[81] The 511 Land severance was neither applied for nor granted by December, 2007 or January 2013, thereby preventing the closing of that transaction.

2011

[82] It is admitted that:

a) The plaintiffs made the $2,530.77 monthly payments to Mr. Nichols of principle and interest from January 2008 until February 2011; whereupon

b) At the request of Mr. D’Ascenzo , he and Mr. Nichols agreed to restructure the then remaining $53,000 balance which was to be paid over 48 months, with 8.5% interest and monthly payments of $1,310;

c) Pursuant to the that liability restructuring, the plaintiffs paid Mr. Nichols $1,310 monthly from January 2011 to January 2013;

d) That as of February, 2013, the plaintiffs stopped paying the Petting Zoo Land municipal taxes which the plaintiffs had paid since 2007. Mr. Nichols faults the plaintiffs for stopping to pay such taxes and;

e) The plaintiffs after January, 2013, stopped their $1,310 monthly payments of principle and interest to Mr. Nichols.

[83] Neither property was transferred to the plaintiffs between 2007 and 2013. Their combined purchase prices with interest were not fully paid by February 2013.

[84] According to the January 2011 to December 2014 amortization schedule produced by Mr. D’Ascenzo, the remaining principal balance of the combined purchase prices for these two properties after the plaintiffs stopped payment in January 2013, was $27,754.

[85] Mr. Nichols on this motion alleges that the plaintiffs’ failure to continue payments after January 2013 constituted "default", was "a breach of our agreement" as "there was still two years left on the mortgage" and, contrary to common commercial logic; led Mr. Nichols to believe that the plaintiffs "did not wish to complete the purchase" and his conclusion that "our deal was at an end".

[86] On August 29, 2013, Mr. D’Ascenzo delivered a letter to Mr. Nichols summarizing the property issues as to the Petting Zoo Land and the 511 Land. Mr. D’Ascenzo’s letter states:

a) Mr. Nichols denied responsibility to remedy the severance title issue of the 511 Land for 7 years, thereby preventing transfer of that property which makes it inappropriate that the plaintiffs should have to continue making payments including interest, until title is legally transferrable;

b) The plaintiffs will resume payments of the remaining $20,000 balance when Mr. Nichols makes title of the 511 Lands legally transferrable;

c) The plaintiffs have paid Mr. Nichols a total of $150,000 which is the purchase price of the Petting Zoo Land. A transfer of that property was requested in January 2013 however Mr. Nichols responded that because the plaintiffs stopped monthly payments, he intended to "foreclose" against the plaintiffs or they could commence proceedings against him;

d) According to their calculations, the plaintiffs believed they made overpayments which as of January 2013 total $1,027; and

e) The plaintiffs sought immediate transfer of title of the Petting Zoo Land from Mr. Nichols.

[87] Mr. D’Ascenzo in his affidavit repeats the above statements in his August 29, 2013 letter that Mr. Nichols refused his request that title of the Petting Zoo Land be conveyed to the plaintiffs when they made their last monthly payment to Mr. Nichols in January, 2013. Mr. Nichols replied that the plaintiffs could sue him.

[88] The plaintiffs in their Statement of Claim as stated, seek specific performance of their purchase of the Petting Zoo Land, or alternatively rescission and damages.

[89] The plaintiffs on this motion however now seek rescission of that Petting Zoo Land purchase agreement and repayment of their principle and interest payments totally $168,727.

2016

[90] On his June, 2016 cross-examination on this motion, Mr. Nichols stated he had recently signed a severance application regarding the 511 Land but then, incredulously, stated he did not know when specifically he signed it or who asked him to sign that application. He further stated that if the severance application is granted he will refuse to convey that title to the plaintiffs.

[91] Mr. Nichols factum attaches correspondence from the County of Renfrew and the Township of Greater Madawaska which indicate that:

a) Severance as to the 511 Land was sought and granted with conditions in December, 2015 and January 2016, which conditions include;

b) A proper plan of survey;

c) Confirmation from the Municipality that Wilson Side Road has been assumed by it; and

d) Notice from the Municipality that it has not accepted the Wilson Farm Road by by-law.

[92] It is unclear whether the Municipality refuses to accept the side road or merely awaits the passage of an assuming by-law.

Payments

[93] It was admitted during argument that the plaintiffs paid Mr. Nichols:

a) The $10,000 down payment as to the Petting Zoo Lands on April 17, 2007;

b) Six $5,000 payments between May and October 15, 2007;

c) $2,126.00 in November 2007;

d) $2,513.26 in December 2007;

e) Monthly payments totalling $30,369.24 in 2008 and in 2009;

f) Monthly payments totalling $30,600 in 2010;

g) Monthly payments totalling $15,720 in 2011 and in 2012; and

h) One monthly payment of $1,310 in January 2013.

[94] The total payments therefore made by the plaintiffs and received by Mr. Nichols are $168,727.74, of which $128,727.74 was paid monthly subsequent to the initial $40,000 paid by October 15, 2007.

[95] In paying Mr. Nichols $168,727.24 to date, the plaintiffs therefore paid just under the combined total purchase price of the two properties, namely $170,000, excluding interest.

[96] The combined unpaid liability as of December 2007, after the initial payments totalling $40,000, was $128,424 pursuant to the amortization schedule produced. $100,670 of that principle balance was repaid by January, 2013 when the plaintiffs stopped paying Mr. Nichols. That left an unpaid principle balance at that point of $27,754. That $100,670 decrease of the principle liability, plus the initial $40,000 payments, is less than the $150,000 purchase price of the Petting Zoo Land.

[97] The parties’ agreement that payment over time of the combined purchase price of these properties included the obligation to pay interest thereon is not in dispute.

[98] The parties’ agreement to pay the combined purchase prices with interest over a fixed term became due and payable if Mr. D’Ascenzo attempted to sell the Petting Zoo Land, in which case the remaining purchase price liability became due and payable. Mr. D’Ascenzo in fact listed the Petting Zoo Land for sale in December 2015. That triggered his obligation to thereupon pay the remaining combined purchase price balance, with interest to that point, whereupon the plaintiffs would be entitled to conveyance of the Petting Zoo Land.

[99] The plaintiffs’ present claim for rescission of the Petting Zoo Land purchase agreement and damages requires consideration of the following factors:

a) The non-payment of the remaining purchase price principle balance with interest after January 2013 prevented the plaintiff’s entitlement to a transfer of the Petting Zoo Land.

b) The damages sought following rescission in the amount of $168,727 are the total of the plaintiffs’ payments to date as to the two purchases. Even if all those payments are allocated solely to the Petting Zoo Land purchase price, that amount includes the agreed upon interest payments, which were the interim cost of delaying the agreed upon closing of that transaction until full payment of the combined purchase price with interest, which has not yet occurred. The plaintiffs received that agreed upon closing delay benefit at the cost of paying interest. They are not now entitled to recover that interest cost as damages.

[100] The plaintiffs accordingly have not proven their entitlement to recession nor the quantum of damages claimed as to the Petting Zoo Land transaction. The calculation of those damages remains an undetermined issue.

Specific Performance and the 511 Land

[101] The plaintiffs have been able and anxious to purchase the 511 Land. They financed that purchase price by agreeing to add the costs thereof to the Petting Zoo Land purchase balance and pay Mr. Nichols the combined cost thereof together with interest.

[102] Payment in full of the increased Petting Zoo liability was not made a condition to the transfer of title of the 511 Land. The purchase price of the 511 Land was effectively paid by credit terms increasing the debt owing with interest for the Petting Zoo Land. The payments to Mr. Nichols years ago in any event exceeded the amount of the purchase price with interest of the 511 Land.

[103] The 511 Land closing was only delayed by:

a) The need for an application of and severance; and

b) Mr. Nichols failure to fulfill his contractual obligation and undertaking to apply for and obtain the necessary severance.

[104] Mr. D’Ascenzo in his affidavit on this motion states that:

a) He had Mr. Fleming in mind as a possible purchaser when Mr. Nichols agreed to the 511 Land sale and purchase in conjunction with settling the price as to the S-P agreement; and

b) Following the 511 Land extension agreement signed on November 24, 2006, he and Mr. Fleming signed an intent to sell agreement which provided that upon conveyance to him, Mr. D’Ascenzo would sell the 511 Land to Mr. Fleming for $30,000 which was then paid in anticipation of Mr. Nichols obtaining the severance he undertook to obtain and the conveyance of the land to Mr. D’Ascenzo.

[105] Beyond the $10,000 increased purchase price agreed to by Mr. Fleming, Mr. D’Ascenzo did not intend to retain ownership of the 511 Land. That fact engages consideration of the availability of the remedy of specific performance or whether, as alleged by Mr. Nichols, the plaintiffs are only entitled to damages.

[106] The court’s rejection of specific performance in Chaulk v. Fairview Const Ltd, (1977) 3 R.P.R 116, (Nfld. C.A.), was because the land, unlike this case, did not have a particular and special value to the purchaser. The plaintiffs valued the 511 Land for the increased value they knew they could obtain from an adjacent owner, as opposed to other land elsewhere located.

[107] Specific performance on a motion of summary judgment was denied in Neighbourhoods of Cornell Inc. v. 1440106 Ontario Inc., (2003) O.J. No. 2919, because there was no genuine triable issue as to whether the purchaser, unlike this case, had performed sufficient acts of part performance to permit it to lead oral evidence to establish the alleged contractual agreement of purchase and sale.

[108] The Court in Neighborhoods relied upon the statements of the Supreme Court in McNeil v. Corbett (1903), 1907 CanLII 45 (SCC), 39 S.C.R. 608 at 612 and Deglman v. Guaranty Trust, 1954 CanLII 2 (SCC), [1954] 3 D.L.R. 785 (S.C.C), at p. 793, that a party who relies upon acts of part performance to excuse the non-production of a note under the Statute of Frauds must first prove the acts relied upon unequivocally relate to the some dealing with the land allegedly being the subject of the transaction. The plaintiffs have met this test.

[109] As previously determined, the six years of monthly payments relates specifically to the purchase of these two properties and the parties’ agreement that Mr. Nichols would retain ownership of the Petting Zoo Land until payment of those combined purchase prices with interest.

[110] Damages were considered an adequate remedy and specific performance was denied in the case of Chaulk v. Fairview Construction Ltd. [1977] N.J. No.35, p.6 (Nfld.C.A.) relied upon by Mr. Nichols. That Court recognized however, that damages on occasion may not be a complete remedy to the purchaser to whom the land may have a peculiar and special value.

[111] The Court in Alvi v. Lai, [1990] 0.J. No. 739, relied upon by Mr. Nichols determined on a motion for summary judgment that the relationship of those parties could be one of several, which the Court could not be accurately determined on the motion. The Court then considered the alternative argument that payments made constituted sufficient performance to overcome the absence of a written agreement as to land and the resulting prohibition to action pursuant to the State of Frauds.

[112] That Court reviewed:

a) The then narrower interpretation of the Supreme Court of Canada that the acts of part performance must be unequivocal and in their nature referable to the agreement alleged, as in this case. The view was that payment of money in that case was an equivocal act and not itself indicative of the alleged contract involving land and if the monies is repaid, the parties pre-contract positions will be restored without either gaining an inequitable advantage; versus.

b) The broader interpretation by the English House of Lords that it is sufficient for the acts of part performance to point, on a balance of probabilities, to some contract which is consistent with the alleged contract, such that the acts of part performance raise equities which render it unjust to not enforce the contract.

[113] The plaintiffs actions including their payments over six years, meet both of these alternative tests.

Conclusion

Specific Performance as to the 511 Land

[114] If severance was granted or forthcoming, I would grant specific performance without hesitation obliging the transfer of this property to the plaintiffs.

[115] Severance status remains unclear at this time, including Mr. Nichol’s capacity to transfer title of this property.

[116] The plaintiffs’ entitlement of specific performance is established except for the defendant’s ability and requirement to obtain the same which will have to be established in a trial as to that issue.

[117] Specific performance as to the 511 Land on this motion is otherwise unavailable.

[118] A Certificate of Pending Litigation as to the 511 Land shall be registered as to the plaintiffs’ interest therein.

511 Land Damages

[119] Mr. D’Ascenzo ’s position is that damages as to the 511 Land, in the alternative to specific performance, are to be determined now, or the date of trial, and not 2007, as alleged by Mr. Nichols.

[120] Damages as to the 511 Land purchase, subject to argument thereof, would include consideration of the evidence that the 511 Land value in 2006 includes the $30,000 value Mr. Fleming agreed to pay Mr. D’Ascenzo and the interest paid on that purchase price.

[121] The plaintiffs’ damages exceed the $27,636 referred to in argument.

[122] The Court is not hereby deciding the quantum of damages as it lacks the evidence to do so.

[123] The quantum of damages and the date thereof will have to be determined in a trial of such issues.

Plaintiff’s Survey Costs of the 511 Land

[124] There is no triable issue as to this claim for damages. These costs were incurred in attempt to overcome Mr. Nichols’ refusal during 9 years to honor his legal obligation to obtain the severance in order to transfer title to the plaintiffs.

[125] Judgment against Mr. Nichols is awarded as to this head of damages in the amount of $1,995, together with prejudgment interest since the date of the surveyor’s invoice.

Damages as to the Recession of the Petting Zoo Land Purchase

[126] The plaintiffs are not entitled to payment of the interest component they paid to delay closing of this transaction. That carrying cost was agreed to as a term for delaying the closing of that Petting Zoo Land transaction, a benefit the plaintiffs have obtained.

[127] The plaintiffs only elected rescission and damages upon filing their factum on this motion.

[128] The plaintiffs are granted recession of this purchase agreement and summary judgment for the principle amount of that purchase, namely $122,246, which is the total principle amount they paid to January 30, 2013 ($150,000-$27,754) pursuant to the amortization schedules filed, together with post judgment interest.

[129] Any other damages sought by the plaintiffs as to this transaction requires evidence and a trial of such issue(s).

Prohibited Sale of 170’s Signage

[130] Mr. D’Ascenzo alleges that Mr. Nichols in July 2007 contrary to the S-P Agreement sold the road signage for Nicholas Plaza to Calabogie Pizzeria. The cost estimate produced on this motion by Mr. D’Ascenzo is for the cost of a new double sided, lighted sign and graphics at a cost of $5,224, as to which the plaintiffs seek summary judgment for $5,000.

[131] There is no evidence whether the original sign was doubled sided, whether it was lighted, the age of the original sign or whether Mr. D’Ascenzo would have retained or altered at a cost the former sign name of "Nicholas Plaza" had this signage not been taken. Such evidence will impact the level of damages incurred.

[132] This issue requires a trial. Summary judgement is denied as to this claim.

Trial of Remaining Issues

[133] This Court will remain seized of the trial of the remaining issues for which summary judgment is not granted.

Costs

[134] The plaintiffs have been materially successful on this motion and are entitled to costs thereof. They have not been successful as to all their heads of relief claimed. A trial of those remains a possibility. The plaintiffs therefore are not entitled to costs of the proceeding.

[135] The Court has not yet received Mr. Nichols costs submissions which were to be filed following argument. Given his conduct since 2008, I would not grant costs to Mr. Nichols in any event.

[136] The level of costs to the plaintiffs based on their partial success on this motion should be on a scale of partial indemnity.

[137] The issues were important to all parties.

[138] The amount awarded herein is proportional to the relief claimed and the relief and amounts in dispute.

[139] The hourly rates charged are appropriate.

[140] The hours expended by the two lawyers for the plaintiffs are appropriate given the number of factual issues, the number of affidavits and the cross-examinations thereon.

[141] The degree of complexity was average and was largely driven by the facts.

[142] Mr. Nichols should have expected the level of costs awarded herein.

[143] Mr. Nichols is required to pay costs to the plaintiffs in the amount of $23,000, inclusive of tax and disbursements.

Mr. Justice Paul Kane

Released: December 6, 2016

D’Ascenzo v. Nichols, 2016 ONSC 7645

Case Summary