CITATION: Patel v. Davis, 2017 ONSC 5496
COURT FILE NO.: CV-17-3895
DATE: 20170922
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Dineshbhai Mohanbhai Patel
Applicant
– and –
Colin Constantine Davis
Respondent
J. Milne, for the Applicant
Self-Represented Respondent
HEARD: September 21, 2017
REASONS FOR JUDGMENT
PETERSEN J.
[1] This is an Application for specific performance of an Agreement for Purchase and Sale of a condominium unit (hereafter the “Unit”).
[2] The Applicant Patel seeks an Order that the Respondent Davis deliver clear title to the real property in question within 7 days, pursuant to the terms and conditions of their Agreement, and an Order for costs on a full indemnity basis.
[3] Mr. Davis was served with the Application. He did not file any responding materials. Mr. Patel attempted, without success, to communicate with him regarding the proceeding. Mr. Patel’s counsel, James Milne, communicated with Mr. Davis’s real estate agent (Mr. Davis is not represented by counsel), who advised Mr. Milne that Mr. Davis is aware of the proceeding and of the hearing date.
[4] Mr. Davis did not appear in Court at the hearing on September 21, 2017. The Application proceeded unopposed.
Background
[5] The Parties entered into an Agreement of Purchase and Sale of the Unit on June 9, 2017 (hereinafter the “Agreement”). The sale price was $369,000. The closing date was August 31, 2017. The Agreement was executed by the parties with the consent of Mr. Davis’s spouse. There is no dispute that the Agreement is valid and enforceable.
[6] At the time that the Agreement was negotiated, Mr. Davis was represented by a real estate agent named Alex Malek and a lawyer named John Sedrack. Mr. Patel was represented by a real estate agent named Larry Steward and a lawyer named Randall Longfield.
[7] On June 19, 2017, after the Agreement was executed, Mr. Stewart delivered a $25,000 deposit from Mr. Patel to the listing agent, Mr. Malek. That sum is still being held in trust.
[8] Mr. Patel sold his home in anticipation of the closing of the condominium transaction. The sale of his home was scheduled to close on August 25, 2017, six days before the closing date in the parties’ Agreement. Mr. Patel made arrangements for temporary storage of his belongings and temporary accommodations for his family until August 31, 2017, when they planned to move into the Unit.
[9] Mr. Patel had been residing with his wife and elderly parents in a house. They purchased a condominium because they wanted to downsize. Moving to a condominium would require an adjustment, so Mr. Patel chose a spacious unit. The Unit is a very large corner unit overlooking a park.
[10] In July 2017, Mr. Malek advised Mr. Longfield that Mr. Patel was refusing to close on the transaction.
[11] Mr. Longfield then contacted Mr. Sedrack, who advised that he was no longer acting for Mr. Davis.
[12] Mr. Longfield then served Mr. Malek (as Mr. Davis’s agent) with notice that failure to close would be an anticipatory breach of contract and that Mr. Patel reserved his right to pursue a civil action against Mr. Davis. There was no response to this correspondence from Mr. Patel.
[13] Mr. Patel complied with all the terms of the Agreement. He fully intended to close on the transaction. He commenced this Application on August 24, 2017, in anticipation of breach of the Agreement.
[14] The transaction did not close on August 31, 2017. Mr. Davis refused to complete the sale. He did not provide any justification, let alone a lawful justification, for his breach of the Agreement.
[15] Mr. Davis has not communicated with Mr. Patel or Mr. Milne, despite efforts by Mr. Milne to contact him both directly and through his real estate agent, Mr. Malek.
Issues and Law
[16] The only issue before me is whether the Applicant is entitled to specific performance of the Agreement of Purchase and Sale as a remedy for the Respondent’s breach of contract in this case.
[17] The Supreme Court of Canada has ruled that specific performance with respect to the sale of real property should not be granted as a matter of course for breach of contract. Rather, there must be evidence that the property is unique to the extent that its substitute would not be readily available. See Semelhago v. Paramadevan, 1996 209 (SCC), [1996] 2 S.C.R. 415 at para.22.
[18] While at one time the common law regarded virtually every piece of real estate as unique, with the progress of modern real estate development this is no longer the case. Residential properties, particularly condominium properties, are mass produced. When a real estate deal falls through, typically another comparable property is readily available. See Semelhago, supra, at para.20.
[19] In order to obtain equitable relief for breach of contract for the purchase and sale of real estate, the purchaser who seeks specific performance must demonstrate that comparable properties are not readily available and that damages would be an inadequate remedy for the vendor’s breach.
Facts and Analysis
[20] Mr. Patel has satisfied me that damages would be an inadequate remedy in this case because of the unique features of the property and also because Mr. Davis appears to be impecunious and may not be able to pay a damages award.
[21] Mr. Patel filed three affidavits in support of his Application, one sworn by him, one sworn by a builder named Mathura Maraj, and one sworn by his real estate agent, Larry Stewart. These affidavits contain considerable evidence that the Unit is sufficiently unique to the extent that its substitute would not be readily available to him within the geographic region in which he wishes to reside.
[22] In particular,
a) Mr. Patel lives with his wife and his parents. His parents are elderly and require assistance to live comfortable and continue their daily routines. His mother has a disability and relies on a wheelchair for mobility.
b) The Unit is a corner Unit overlooking a park.
c) The Unit is the largest Unit in the condominium property. It contains two bedrooms, which is important to the Applicant because four adults will be living in the Unit.
d) The Unit is retrofitted to be wheelchair accessible, including a wheelchair accessible washroom. This is very important to the Applicant because of his mother’s disability.
e) The condominium property is located close to various important amenities, which is important because of his mother’s restricted mobility.
f) The Unit comes with two parking spots, which is not common for similar units. This is important to the Applicant because he and his wife each have a car and both require parking.
[23] The evidence establishes that there are no comparable condominium units for sale in the same geographic region within reasonable range of the price at which Mr. Davis agreed to sell the Unit (i.e., $369,000). Mr. Patel deposed that he was able to obtain the Unit for a reasonable price because it did not show well. The kitchen cabinets needed to be replaced, there was mold in the laundry room, carpets were dirty and not properly installed. Despite these deficiencies, Mr. Patel thought that the property had potential and because of the square footage and the wheelchair accessible washroom, he made an offer which was accepted. He believes (and the evidence supports his belief) that he would be required to pay $440,000 or $450,000 in order to acquire another property with similar features, and none is available in the same geographic region.
[24] Mr. Patel filed copies of 17 listed properties that he viewed with his agent, which were in his price range. None was comparable to the Unit in terms of square footage, proximity to amenities, and wheelchair accessibility.
[25] Mr. Stewart (the Applicant’s real estate agent) deposed that the units currently listed for sale in the same condominium complex as Mr. Davis’s Unit are all smaller than the Unit, most have only one parking space, and all are listed for more than the sale price agreed to by Mr. Davis. Mr. Stewart further deposed (with supporting documentation) that condominium prices in that complex have increased since the Agreement was executed by Mr. Patel and Mr. Davis in early June 2017.
[26] Mr. Patel obtained (and submitted as evidence) estimates of the cost of retrofitting a washroom similar to the accessible one in the Unit. The estimates ranged from approximately $17,000 to $18,000. This evidence was supported by the affidavit of Mr. Maraj, a builder who provided Mr. Patel with one of the quotes.
[27] In addition to the uniqueness of the property, Mr. Milne asks me to consider the fact that Mr. Davis is likely impecunious. Mr. Patel acquired a copy of the Status Certificate for the Unit pursuant to s.76.1 of the Condominium Act, 1998. It is dated June 12, 2017 and was attached as an exhibit to Mr. Patel’s affidavit. It indicates that Mr. Davis is over $8,000 in arrears of the payment of common expenses for his Unit. Although there is no evidence of how much equity Mr. Davis has in the property, or what other assets he may possess, these arrears are suggestive of financial difficulties, which might make it difficult for Mr. Patel to recover damages if they were awarded for breach of contract.
Conclusion
[28] I am satisfied, based on the evidence outlined above, that Mr. Patel is entitled to equitable relief in this matter. The Agreement was a contract for purchase and sale of a condominium unit, which might seem to be an unremarkable property, but this particular Unit was especially suitable for the specific needs of Mr. Patel’s family, both because of its features (parking, square footage, corner view of the park, accessibility) and because of its geographic location. There is no evidence that the unique features of the property can be duplicated elsewhere within the same geographic area.
Costs
[29] Given Mr. Patel’s success in the Application, he is entitled to his costs. Mr. Milne requests an order for payment of costs on a full indemnity basis. He submitted a Bill of Costs in the amount of $6,178.72 (which includes $797.09 for disbursements).
[30] Pursuant to Rule 57.01(1)(e), the parties’ conduct in the proceedings is relevant to a determination of costs. Mr. Davis’s conduct in this matter is inexcusable. He has not proffered any explanation for his breach of the Agreement, has not responded to the Application (despite being served), has not communicated with Mr. Patel (either directly or through Mr. Milne), has not responded to Mr. Milne’s efforts to reach him through his agent, and did not appear before the court at the hearing.
[31] Although this Application was uncontested, Mr. Patel was required to prepare substantial motion materials to prove his family’s specific needs and to establish the unique suitability of the Unit for his family’s intended use. Three affidavits were filed, along with considerable supporting documentation. A factum was also prepared, as well as a book of authorities. This was not unnecessary work. It was required to meet the evidentiary burden in this case.
[32] The hours docketed by Mr. Milne for his work (as set out in his Bill of Costs) are reasonable. The hourly rate used to calculate his fees is also reasonable.
[33] The issue is important, since Mr. Patel sold his former home in anticipation of the closing of this transaction. He currently has no permanent accommodation for himself and his family, including his mother who has accessibility needs. (See Rule 57.01(d).)
[34] In these circumstances, I find that Mr. Patel is entitled to his costs on a substantial rather than partial indemnity basis. I have discounted Mr. Milne’s full indemnity fees by 10%.
Orders
[35] For the reasons set out above, the requested Order is granted. Mr. Davis shall deliver clear title to the real property municipally described as Suite 501 – 24 Hanover Road, Brampton, Ontario L6S 5K8 to Mr. Patel, within 7 days of this order, pursuant to the terms and conditions set out in the Agreement for Purchase and Sale dated June 9, 2017.
[36] Mr. Davis will also pay Mr. Patel’s costs of this Application in the amount of $5,550, inclusive of disbursements and HST. Costs shall be paid within 30 days of the date of this Order.
[37] Mr. Patel is directed to serve Mr. Davis with a copy of these Reasons for Judgment forthwith.
Petersen J.
Released: September 22, 2017
CITATION: Patel v. Davis, 2017 ONSC 5496
COURT FILE NO.: CV-17-3895
DATE: 20170922
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Dineshbhai Mohanbhai Patel
Applicant
– and –
Colin Constantine Davis
Respondent
REASONS FOR JUDGMENT
Petersen J.
Released: September 22, 2017