Court File and Parties

COURT FILE NOs.: 11475/17 & 11485/17 DATE: 2017/05/19

ONTARIO

SUPERIOR COURT OF JUSTICE

COURT FILE NO. 11475/17

B E T W E E N:

Claude St. Amand, Applicant Duncan M. Macfarlane, Q.C., for the Applicant

- and -

Lynn Tisi, Respondent Derek A. Schmuck, for the Respondent

COURT FILE NO. 11485/17

A N D B E T W E E N:

Lynn Tisi, Applicant Derek A. Schmuck, for the Applicant

- and -

Claude St. Amand, Respondent Duncan M. Macfarlane, Q.C., for the Respondent

APPLICATIONS HEARD at ST. CATHARINES, Ontario: April 21, 2017

The Honourable Justice T. Maddalena

DECISION ON APPLICATIONS

Preliminary Matters

[1] As a preliminary matter, counsel for Lynn Tisi (“Tisi”) requested that I recuse myself from hearing the applications based on a reasonable apprehension of bias.

[2] For oral reasons provided on the 21st of April 2017, I declined to do so.

[3] On the second preliminary matter raised, I ruled that counsel could make submissions on both applications 11475/17 and 11485/17. I would permit each counsel the opportunity for proper reply.

[4] The third preliminary issue was raised by counsel for Claude St. Amand (“St. Amand”). Counsel advised that he had received, via facsimile, two days prior to the hearing, a lengthy facsimile comprised of some 50 to 60 pages consisting of an appraisal report prepared by David Ridley dated March 29, 2017, together with a Form 53 affidavit of David Ridley sworn 18th April 2017. This document was not filed with the court. Counsel for St. Amand objected to its use in this hearing.

[5] For oral reasons provided on the 21st of April 2017, I did not permit use of the Ridley document at the application hearing. However, I determined that at the hearing I would only hear submissions pertaining to the validity of the Agreement of Purchase and Sale. Once I have ruled on the issue of the validity of the agreement, I would then provide further directions as necessary.

The Issues

[6] The application of St. Amand seeks the following relief:

• A declaration that the Agreement of Purchase and Sale, dated November 2, 2016, is null and void;
• An injunction or mandatory order prohibiting Tisi from encumbering the title to the property at 10 Birchmount Avenue, Welland, Ontario. (The Agreement of Purchase and Sale references 8 Birchwood, however at the hearing counsel confirmed that the correct municipal address is 10 Birchmount.)

[7] The application of Tisi seeks the following relief:

• An order for specific performance of the Agreement of Purchase and Sale dated November 2, 2016;
• In the alternative, damages for breach of contract;
• An order for the issuance of a Certificate of Pending Litigation against the property municipally described as 10 Birchmount Avenue, Welland.

[8] Tisi implicitly seeks a declaration that the Agreement of Purchase and Sale is a valid contract between these parties.

The Agreement of Purchase and Sale

[9] The document at issue is the Agreement of Purchase and Sale prepared by the real estate agent Alain Raby.

[10] It was agreed that the realtor, Alain Raby, was acting for both builder (St. Amand) and the purchaser (Tisi).

[11] The agreement was executed firstly by St. Amand electronically. It was executed in full as required and initialed at the bottom of all relevant pages. The signature of St. Amand is dated November 2, 2016.

[12] The agreement was then, according to evidence, forwarded to Tisi for execution.

[13] Tisi initialed all the relevant pages on the bottom of the agreement, however did not execute as “buyer” on page 5 of the agreement. Her signature appears under the acknowledgment section and is dated November 4, 2016.

[14] Further, Tisi made changes to Schedule “D” of the agreement by crossing out and initialing six changes to Schedule “D”. However, there is no corresponding initialing by St. Amand to the changes made by Tisi on Schedule “D”.

[15] The deficiencies with the agreement first became known to St. Amand after the parties had reached an impasse with respect to the kitchen cabinetry and only after Tisi had registered a notice of option to purchase on title on or about January 24, 2017.

[16] It is clear on all of the evidence that the realtor who ought to have checked the agreement to see if all was properly executed did not do so, otherwise the agreement would not have been left as is.

[17] Further, St. Amand did not immediately request to see the agreement to determine if all had been properly executed.

[18] Finally Tisi, while a school principal, is not a lawyer and was unaware that she had not properly executed the agreement. However, Tisi had legal counsel who completed the form, Notice of Fulfillment of Condition(s), dated November 21, 2016. However, no one was alerted that the Agreement of Purchase and Sale was not properly executed.

[19] For a short period of time the parties acted as if they had a valid agreement. The builder applied for a building permit, the builder cashed the $10,000 deposit cheque provided by Tisi, and Tisi was requested to choose flooring and to order kitchen cabinetry.

[20] However, the issue is whether there was consensus ad idem, or meeting of the minds, with respect to this agreement. St. Amand thought the parties had an agreement as executed by him. Tisi thought she had an agreement with St. Amand incorporating her interlineations and amendments to Schedule “D”.

Statute of Frauds

[21] The Statute of Frauds, R.S.O. 1990, c. S.19, states as follows:

Writing required for certain contracts

4. No action shall be brought to charge any executor or administrator upon any special promise to answer damages out of the executor’s or administrator’s own estate, or to charge any person upon any special promise to answer for the debt, default or miscarriage of any other person, or to charge any person upon any contract or sale of lands, tenements or hereditaments, or any interest in or concerning them, unless the agreement upon which the action is brought, or some memorandum or note thereof is in writing and signed by the party to be charged therewith or some person thereunto lawfully authorized by the party.

[22] As basic contract law, the Statute of Frauds requires that an agreement dealing with purchase and sale of land must be in writing. Generally, a contract dealing with land will be unenforceable if it does not comply with the terms of the Statute of Frauds. [1]

[23] The agreement in writing must also contain all the essential terms of the contract.

Kitchen Impasse

[24] According to the evidence, the kitchen order had to be placed before Christmas 2016 in order to maintain the timeline for the construction of the home. Three meetings had occurred in December 2016 between Tisi and St. Amand’s kitchen contractor, Innovative Kitchen Design.

[25] Ultimately, Tisi advised St. Amand that she had obtained her own kitchen supplier, being Mission Cabinetry, and preferred to utilize Mission Cabinetry for the installation of the kitchen.

[26] Tisi, therefore, requested that St. Amand pay a deposit of $20,000 to Mission Cabinetry. This had not been discussed and St. Amand was not agreeable, as he did not know this kitchen supplier and stated he could not warrant its work as required by the Tarion Home Warranty Program.

[27] St. Amand advised Tisi that she would have to contract the kitchen cabinets directly with Mission Cabinetry and he would not warrant work performed by this contractor. St. Amand further advised Tisi that her costs for Mission Cabinetry would come out of the agreed selling allowance and that there would be adjustments to her kitchen allowances accordingly.

[28] Notwithstanding, Tisi demanded that St. Amand pay the $20,000 deposit for the kitchen cabinets to the supplier of her choice, i.e. Mission Cabinetry.

[29] At this point, St. Amand and Tisi had reached an impasse. St. Amand took the position that the home was to be built by him and warranted by him pursuant to the Tarion warranty. If Tisi wished another contractor for the kitchen then she would receive credit as specified in Schedule “D”. (He had at this time not yet become aware of Tisi’s amendments to Schedule “D”.)

[30] Tisi stated that the Agreement of Purchase and Sale did not require her to use Innovative Kitchen Design. Tisi stated that St. Amand had agreed to pay her choice of Mission Cabinetry.

[31] At this stage, the changes in Schedule “D” made by Tisi became significant. Tisi stated in submissions that the changes made by her to delete “builder’s samples” in Schedule “D” were insignificant and should have no impact. She stated the changes to Schedule “D” did not go to the root of the contract and should be ignored by the court. Tisi stated that the builder had no “builder’s samples” and, further, that the builder agreed to the removal of “builder’s samples”. The builder disagreed that he consented to the removal of “builder samples” in Schedule “D”. I do not accept Tisi’s evidence that the builder agreed to the removal of “builder’s samples” in Schedule “D”. There is no evidence to support this. The interlineations and amendments to Schedule “D” were not initialed by St. Amand.

[32] Further, in Schedule “D” under the heading of “Cabinetry Package”, the agreement states, “Supplier can vary based on purchaser’s preference. Could be a Lowes Cabinet or from upper Kitchen Cabinet Supplier.” Tisi interpreted this as permission to pick her own supplier.

[33] However, the agreement does not state Tisi could attend to a cabinetmaker of her sole choice.

[34] By her interpretation, I find Tisi made a fundamental change to the Agreement of Purchase and Sale. St. Amand expected, in accordance with Schedule “D”, that what would be used would be his builder’s samples in accordance with his suppliers. Based on his suppliers, he would then be able to provide the Tarion Home Warranty as required by him by the Province of Ontario.

[35] On the other hand, Tisi believed that her amendments to Schedule “D” permitted her to use whatever supplier she wished and compel St. Amand to pay for the kitchen design of her choice. These are not just insignificant amendments.

[36] It is clear here that both St. Amand and Tisi have different perspectives of what is in this contract and differing versions of what it is intended to say. I find no evidence to support that St. Amand had agreed to pay Mission Cabinetry or that Tisi could attend to the kitchen supplier of her choice and completely disregard “builder samples” as per Schedule “D”.

[37] These parties were not on the same page with respect to this contract from the very beginning. There was no joint participation of these parties in the making of this contract. Each thought the contract was in accordance with what he or she had executed. There was never a true meeting of the minds.

Attempt to Salvage the Agreement of Purchase and Sale

[38] Tisi requested that St. Amand put together a proposal for her to buy the home on an “as is” basis and she would then become her own builder.

[39] According to the evidence of Tisi, by January 13, 2017 she “began talks with the builder to take over the build”.

[40] The evidence is undisputed that St. Amand did put together a proposal for her to take over the building of the home and to purchase it on an “as is” basis. This proposal was presented to Tisi who did not respond to the proposal, except to register an encumbrance on the title to the property on January 24, 2017.

[41] According to the evidence of Tisi, she advised the realtor that she was not in agreement with the proposal.

[42] Query, why would Tisi specifically advise the realtor of this when she had spoken directly to St. Amand with respect to taking over the build and St. Amand had provided the proposal directly to her?

Repudiation of the Contract

[43] Both parties suggest the other repudiated the contract.

[44] Repudiation is defined as occurring “where a party intimates by words or conduct that he does not intend to honour his obligations when they fall due in the future.” [2]

[45] Tisi submitted repudiation occurred by St. Amand when he offered to return to her the deposit of $10,000 as outlined in St. Amand’s correspondence to Tisi on January 16, 2017.

[46] St. Amand submitted Tisi repudiated the contract when she requested he provide her with a proposed cost to take over the project and Tisi did not respond other than to register an encumbrance on title.

[47] St. Amand also stated repudiation occurred when Tisi demanded that he pay a $20,000 deposit to the kitchen supplier of her choice. St. Amand stated Tisi was attempting to dictate her own unilateral terms.

[48] In the case of Wile v. Cook, [1986] 2 S.C.R. 137, at para. 14 the court noted:

“… But the right claimed by the declaration went far beyond what he was entitled to require under the agreement. Indeed he went beyond requiring that the insurance be collectible, but elected to complete the purchase once the premises were restored to the condition they were in when he signed the agreement, or it was determined that insurance proceeds sufficient for this purpose would be paid within a reasonable time. In a word, he was not making the election provided for under clause 5 of the agreement, but was in effect dictating different terms. This, as McKeigan C.J.N.S. points out, amounted to a refusal to complete the agreement as written; it constituted a repudiation of the agreement. The vendor was then entitled to accept this repudiation, which he did, originally by a telephone call in late March of 1981 and then formally by letter dated April 3, 1981.…”

[49] Repudiation presupposes a valid contract. Here, there is no valid Agreement of Purchase and Sale. There is absence of any mutual consent. These parties never had a meeting of the minds necessary for a valid Agreement of Purchase and Sale. These parties did not agree on material terms as each had their own varying interpretations of material terms. Therefore, the court must be careful not to make a contract for the parties if they have not agreed on material terms. [3]

Part Performance

[50] Tisi submits that even if this court should conclude there is no written agreement, part performance of the contract by St. Amand, after the defect was known, renders the Agreement of Purchase and Sale enforceable as against St. Amand.

[51] Tisi relies, in part, on the case of Hill v. Nova Scotia Attorney General, [1997] 1 S.C.R. 69. In para. 9 of Hill, the court stated:

“… In the present case, for example, it does not matter so much what was said. What is critical is what was done; and what was done was the construction and maintenance of access ramps. There is no mistaking the purpose for which those ramps were constructed: it was to allow Mr. Hill a way of reaching and crossing the highway. Accordingly, in this instance strict adherence to the literal terms of the writing requirement would not serve the purpose for which it was devised. Fraud would not be prevented; rather, the appellants would be defrauded.”

[52] However, it is notable that in Hill, the Nova Scotia Department of Transport had maintained and improved the ramps for over 27 years [emphasis added], and thus the court concluded “the actions of the province speak louder than any written document”. [4]

[53] In the instant case, St. Amand only learned of Tisi’s interlineations and amendments to Schedule “D” some two and a half months after he had executed the agreement. Prior to this time, the amendments and interlineations were neither disclosed to him nor agreed to by him.

[54] In Kelly v. Watson (1921), 61 S.C.R. 482, the court noted as follows at p. 483:

“It is one thing, and no doubt commendable, for a court in cases where there has been part performance of an agreement to struggle against the difficulty ensuing from vagueness in the terms of the agreement and, if possible, without creating a new agreement, to spell out one which they conclude from the evidence represents the real intention of the parties. It is quite another thing, however, to make a new agreement for the parties as to which they themselves were never ad idem.

With great respect for the Appellate Division, I cannot help concluding after reading over the evidence that they have done the latter in this case and have made an agreement for the parties which they themselves never intended. It may be, I do not doubt it, a very fair agreement and one calculated to do justice to both parties, but it is not the agreement the parties themselves reached or intended.”

[55] And at pp. 491-492:

“We have therefore this result that the parties by their testimony contradict each other as to the material terms of their contract and that the terms contained in the judgment of the Appellate Division are inconsistent with either of their versions. It follows that the judgment really makes a contract for the parties, and, unless I do the same, I find it impossible, on my consideration of the evidence, to state what the agreement between Raymer and Watson really was. Under these circumstances, the conclusion of the learned trial judge that the parties were never ad idem in respect of the terms of payment seems inevitable.”

[56] In the instant case, I find it is also impossible to conclude these parties were ever ad idem on material terms.

[57] Part performance by St. Amand prior to discovering amendments and interlineations by Tisi cannot entitle her to state that the Agreement of Purchase and Sale is valid and enforceable unless the terms of the agreement are clear and agreed upon. Here, they were neither clear nor agreed upon.

Doctrine of Contra Proferentem

[58] Counsel for Tisi submitted that this doctrine should apply in favour of Tisi. [5]

[59] I am not persuaded that this doctrine is applicable in the case at bar. Firstly, Tisi had her own legal counsel. More importantly, this is not principally a case of interpreting ambiguity with respect to the contract, but more a case dealing with disagreement on the substantial elements of the contract.

Conclusions

[60] These parties were not ad idem on the essential elements of the contract.

[61] Therefore, there is a declaration that there is no valid Agreement of Purchase and Sale between St. Amand and Tisi.

[62] St. Amand shall return the $10,000 deposit to Tisi within 10 days of receipt of the decision herein, together with interest pursuant to the Courts of Justice Act, R.S.O. 1990, c. C.43.

[63] Tisi shall discharge the Certificate of Pending Litigation, at her own expense, registered on title to 10 Birchmount, Welland, Ontario within 10 days of receipt of this decision.

Costs

[64] Costs submissions may be made in writing and are limited to two pages, plus a bill of costs and any applicable offers to settle. St. Amand’s submissions are due by June 2, 2017. Tisi’s submissions are due by June 16, 2017.

Maddalena J.

Released: May 19, 2017

COURT FILE NOs.: 11475/17 & 11485/17 DATE: 2017/05/19 ONTARIO SUPERIOR COURT OF JUSTICE B E T W E E N: 11475/17 Claude St. Amand Applicant - and – Lynn Tisi Respondent A N D B E T W E E N: 11485/17 Lynn Tisi Applicant - and – Claude St. Amand Respondent DECISION ON APPLICATIONS Maddalena J. Released: May 19, 2017

[1] Fridman’s Law of Contract, p. 217 [2] Cheshire and Fifoots Law of Contract, 8th Ed., p. 563 [3] Kelly v. Watson (1921), 61 S.C.R. 482 [4] Hill, para. 5 [5] (In interpreting contracts, ambiguities are to be construed unfavourably to the drafter.)