Vandenberg v. Wilken, 2017 ONSC 6665
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Pieter Adriaan Vandenberg, Catherine Ann Vandenberg and 1060205 Ontario Inc.
Plaintiffs
– and –
Robert Wilken and Angela Wilken
Defendants
Kathleen DeBlock Boersma, for the Plaintiffs
Michael Polvere and Amanda Shaw, for the Defendants
HEARD: October 26, 2017
Raikes J.
1The plaintiffs move for summary judgment for specific performance of an agreement of purchase and sale between the parties dated November 23, 2016 together with damages resulting from the defendants’ breach of that agreement. In the alternative, the plaintiffs seek a declaration that they are entitled to treat the agreement as at an end and are entitled to the return of their deposit with interest, as well as damages for breach of contract in the amount of $64,000.
2It is undisputed that the defendants signed an agreement of purchase and sale to sell their farm properties to the plaintiffs and refused to complete that transaction. They argue that they were coerced into signing the listing agreement and pressured to sign back the plaintiffs offer to purchase by the real estate agents. They allege that the listing agents were in cahoots with the plaintiffs. They were misled, misrepresented to and their wishes overridden by the agents. The agreement is an unconscionable transaction.
3Further, the defendants assert that the subject property is not unique. There are several comparable properties in the vicinity. Specific performance should not be ordered if there was a breach of agreement, which they deny. They maintain that there are genuine issues that require a trial. Summary judgment should be denied.
Parties
4The plaintiffs, Pieter and Catherine Vandenberg, are husband and wife. 1060205 Ontario Inc. is their farm corporation. They have lived and farmed in Huron County for many years. They continue to own a farm parcel in Howick Township.
5The defendants, Robert and Angela Wilken, are husband and wife. They have three children.
6Mr. Wilken has a grade 12 education. After high school, he started working at a farm supply business as an equipment operator. He did that for approximately 20 years before he had a serious motor vehicle accident. Since then he has sharecropped his land because of his injuries from the accident.
7In addition to the income he derives from sharecropping, the defendants rent out a small log cabin for approximately $1000 per month. Mrs. Wilken does not work outside of the home.
The Properties
8The defendants are the registered owners of lands municipally known as 45898 Howick Turnberry Road, Howick Township and 45732 Howick Turnberry Road, Howick Township (collectively “the Wilken properties”). Both properties are farms.
9Mr. and Mrs. Wilken reside on the property at 45898 Howick Turnberry Road. That property comprises 100 acres of which 60 are workable; the remainder is woodlot and horse pasture. It has a horse barn, machinery shed, a second shed and a small log cabin in addition to the family home.
10The property at 45732 Howick Turnberry Road is approximately 100 acres of which 60 acres are workable. The remainder of the property is comprised of a woodlot, some swamp and a municipal drain which goes through the middle of the property taking up a few acres. There are no buildings on that property.
11The defendants purchased the Wilken properties in January, 2015. Before that, they resided for 12 years on a 100 acre farm on Gough Road. They started farming when they moved to that farm on Gough Road.
12Mr. Wilken was involved in a serious motor vehicle collision on November 26, 2012. He suffered injuries to his lower back and sciatic nerve, upper back, neck and right shoulder. He suffers ongoing pain and muscle spasms and sleep disturbance. He takes various medications for pain control and depression. He deposes that he has been diagnosed by a psychologist with major depression, adjustment disorder with mixed anxiety and depressed mood, and symptoms of post-traumatic stress disorder and somatoform disorder – chronic pain.
13Mr. Wilken had already been diagnosed with major depression when he and his wife purchased the Wilken properties in 2015. He also entered into sharecropping arrangements after that diagnosis. There is no medical evidence that Mr. Wilken was incompetent to enter into contractual agreements, nor is there any evidence that the plaintiffs were aware of his health issues.
14The defendants’ home is a one floor bungalow that was specifically designed and built to accommodate Mr. Wilken’s back and leg issues. The original house on the property was torn down and the new house constructed shortly after their purchase.
Listing Agreement
15On October 25, 2016, the defendants entered into listing agreements with RE/MAX Centre City Realty Inc. and RE/MAX Centre City Phil Spoelstra Realty Inc. for each of the Wilken properties. The listing agreements are signed by both defendants. The main farm on which the home is located was listed for $1,500,000. The second farm was listed for $900,000. The listing period started November 4, 2016 and expired May 1, 2017.
16Both listing agreements contain an acknowledgement that the sellers fully understand the terms of the agreement and have received a true copy of the agreement on October 25, 2016. This acknowledgement is immediately above Mrs. Wilken’s signature.
17According to the affidavit of Mr. Wilken sworn September 5, 2017, the listing agreement was preceded by earlier meetings with Ron Steenbergen and Phil Spoestra. At para. 20, Mr. Wilken deposes that there were many caveats attached to whether they would list and sell their property including whether the family was happy, willing and ready to move. Despite these alleged caveats, Mr. and Mrs. Wilken signed the listing agreements. Mr. Wilken deposes at paras 21 and 22 that:
Nonetheless, despite the gawks of the Agents, as a result of that meeting, we felt pressured by Spoelstra and Steenbergen to list our Property for sale. The meeting lasted 3 to 4 hours and was most of our afternoon. We felt like we were under high pressure sales tactics and the agents would not leave until we signed the papers. The Agents started showing us comparables listed much lower than what we wanted to list our Property at and which did not have the same value, comparables or outside amenities. …
The Agents were promising us more money if we “list for less” to drive up a bidding war. We felt uneasy about the whole situation. However, they just would not leave without signed documents.”
18The defendants did not write or email or otherwise communicate to the agents that they wished to terminate the listings or that they no longer wished to sell their property at any time between October 25 and November 23, 2016. Instead, the defendants permitted signs to be erected on their properties advertising the lands for sale. They permitted photographs to be taken for the purpose of advertising. They allowed the agents to bring prospective purchasers including the plaintiffs onto the properties.
19Both agents have sworn affidavits in support of the plaintiffs’ motion. Both were cross-examined on their affidavits. As part of an undertaking given on the cross-examination of Mr. Spoelstra, a timeline was prepared documenting their dealings and communications with the defendants, plaintiffs and others. That evidence stands in stark contrast to Mr. Wilken’s assertions.
20Defence counsel submits that by swearing affidavits, the agents have demonstrated their bias. Their evidence should be discounted as a consequence. I do not agree. They are material witnesses responding to serious allegations levied against them by the defendants. Their evidence is relevant to the issues before the court. Simply swearing an affidavit does not per se connote bias.
Plaintiffs’ Offer to Purchase
21In October 2016, the plaintiffs approached Mr. Spoelstra because they were considering selling their main farm on which they carried on a broiler operation. They wished to remain in the same area. They were living and farming on lands municipally known as 89403 McIntosh Line in the Township of Howick. The lands comprised approximately 100 acres. They owned another property nearby that they were not selling.
22The plaintiffs were introduced to the defendants’ properties by Mr. Spoelstra. They visited the properties twice - the first time on November 8, 2016 and the second on November 14, 2016. After the second visit, the plaintiffs decided to make an offer to purchase.
23Both sides have appended the agreement of purchase and sale as exhibits to affidavits. The initial offer by the plaintiffs to purchase the properties was $2,250,000. The offer was irrevocable until 5 PM on November 23, 2016 at which point, the offer became null and void and the deposit was to be returned to the buyer in full without interest. The closing date was specified to be March 15, 2017. The offer was conditional on sale of the Vandenbergs’ farm.
24The offer to purchase was made on November 14, 2016, the same day as the Vandenbergs’ second visit.
25Mr. Wilken deposes that in mid-November, 2016, he received a call from Mr. Steenbergen asking to show the property to prospective purchasers. Mr. Wilken was away from home and told him that he would need to confirm his wife’s availability before Mr. Steenbergen came on the property. Despite that advice, Mr. Steenbergen brought the Vandenbergs to the property.
26Mr. Wilken indicates that that did not sit well with them and bothered them, but “again, we felt intimidated by the sophisticated Agents and we did not know what to do about it.” He indicates that on November 23, 2016, Mr. Steenbergen brought a signed agreement of purchase and sale from the Vandenbergs to purchase the property for $2.25 million. He is clear that that happened the same day as the Vandenbergs visited the property.
27I note that Mrs. Wilken swore a very limited affidavit adopting as accurate the affidavit evidence of her husband. Mr. Wilken indicated in his cross-examination that his ability to remember was not very good since the accident. That may account for some of the many differences in the timing and substance of events related by Mr. Wilken and that provided by the plaintiffs and their witnesses.
28In an affidavit sworn May 5, 2017, Mr. Steenbergen deposed that the Vandenbergs made their first offer to purchase the properties on November 14, 2016. He attempted to present the offer to both defendants but learned that Mr. Wilken was away on a hunting trip. As a result, “I explained the offer to Angela and left her with a copy until Robert returned.” This happened the same day the offer was made - November 14, 2016. He also indicates that he met with both defendants to present the offer on November 21, 2016, after Mr. Wilken was back.
29Item 36 on the timeline prepared in answer to an undertaking on Mr. Spoelstra’s cross-examination likewise indicates that the November 14, 2016 offer was presented to and left with Mrs. Wilken only because Mr. Wilken was away. Thus, there is a conflict in the evidence as to when the November 14 offer was presented or provided.
Defendants Sign Back Offer
30The defendants met with Mr. Steenbergen at their home at which time he reviewed the terms of the offer to purchase. Mr. Wilken deposes that that meeting took place on November 23, 2016 (see above). Mr. Wilken also deposes that the agents “grilled and interrogated me for close to two hours on November 23, 2016, to try and convince me and Angela to take the offer from the Vandenbergs.”
31Mr. Wilken indicates in his affidavit that by this point, he and his wife had decided not to sell the property. As a result, his wife did not sit in on the initial discussions. At paras. 39-41, Mr. Wilken deposes:
However, when it became clear that I would not take the offer, Steenbergen strongly urged us to counter-offer at $2.4 million and assured us that the offer would probably not be accepted by the Vandenbergs and even if it was accepted by them, it could again be rejected by us. Steenbergen insisted on us initializing the counter-offer of $2.4 million that would drive the Vandenbergs away from the deal. Steenbergen again kept pressuring both Angela and myself to just initial. I kept stressing that we had no intention of selling. Angela also said to Steenbergen that we are not selling. However, Steenbergen kept saying “you have to initial it”.
To be clear, we were assured by Steenbergen that we would have the last say on whether to accept a $2.4 million deal in the remote chance that the Vandenbergs came back at $2.4 million. As such, we assumed the deal was a “no go” once he left our home.
We felt brow-beaten by the agents to counter back at $2.4 million. In fact, we told them that we did not fully appreciate nor comprehend the fact that the Property could be sold for that amount.
32Once again, Mr. Wilken’s version of events is completely at odds with the evidence of the witness, Mr. Steenbergen.
33I also note the following:
a. although Mr. Wilken says that this conversation took place on November 23 and he and his wife only reluctantly initialed a sign back offer as a result of that conversation, the sign back offer was made on November 21, 2016 – two days before;
b. it makes no sense to sign back an unacceptable offer for the purpose of having the proposed purchaser walk away;
c. it also makes no sense to sign the offer back at $2.4 million if he had no desire to sell even at that price; and
d. both defendants testified in cross-examination that they did not read the agreement of purchase and sale before signing and initialling their counter-offer.
34According to Mr. Wilken, “Later that same evening, on November 23, 2016, I was shocked to receive an email… forwarding an accepted offer from the Vandenbergs” [emphasis added]. Thus, Mr. Wilken deposed that he was browbeaten by the agent into signing back the offer at $2.4 million and the very same night that that occurred, he got an email telling him that the Vandenbergs had accepted. The agreement of purchase and sale tells a very different story.
35As mentioned, the sign back offer was made on November 21, not November 23. The offer by the defendants to sell at $2.4 million was accepted by the plaintiffs on November 23, 2016 – two days later. The defendant had two days to withdraw the offer at $2.4 million before it was accepted by the Vandenbergs. They did not.
Agents Acting on Sale of Vandenberg Property
36Mr. Wilken asserts in his affidavit that he and his wife “later” learned that the agents were representing both the Vandenbergs and the defendants; they were actively shopping for a property for the Vandenbergs to purchase. He and his wife were pressured to sign a Confirmation of Cooperation and Representation (“CCR”) document which was not explained to them in detail.
37The CCR was signed by the plaintiffs on November 21, 2016, the same day they signed back the offer to purchase at $2.4 million. On page 1 of the document, it states:
MULTIPLE REPRESENTATION: The Listing Brokerage has entered into a Buyer Representation Agreement with the Buyer and represents the interests of the Seller and Buyer, with their consent, for this transaction. The Listing Brokerage must be impartial and equally protect the interests of the Seller and the Buyer in this transaction. The Listing Brokerage has a duty of full disclosure to both the Seller and Buyer, including a requirement to disclose all factual information about the property known to the Listing Brokerage. However, the Listing Brokerage shall not disclose:
That the Seller may or will accept less than the listed price, unless otherwise instructed in writing by the Seller;
that the Buyer may or will pay more than the offered price, unless otherwise instructed in writing by the Buyer;
the motivation of or personal information about the Seller or Buyer, unless otherwise instructed in writing by the party to which the information applies, or unless failure to disclose would constitute fraudulent, unlawful or unethical practice;
the price the Buyer should offer or the price of the Seller should accept;
and; [sic] the Listing Brokerage shall not disclose to the Buyer the terms of any other offer.
However, it is understood that factual market information about comparable properties and information known to the Listing Brokerage concerning potential uses for the property will be disclosed to both Seller and Buyer to assist them to come to their own conclusions. [Emphasis in bold in original]
38The above clause on “multiple representation” is located immediately beside a box that contains an X in it. That page is initialed at the bottom by the defendants and, as indicated, both defendants signed the acknowledgement on the second page which states: “I have received, read and understand the above information.”
Plaintiffs Accept Sign Back Offer
39On November 23, 2016, the plaintiffs accepted the defendants’ counteroffer of $2.4 million. Their acceptance was communicated to the defendants by a text from Mr Spoelstra at 4:24 PM that day. Mr. Spoelstra asked Mr. Wilken in that text if a home inspection could be done the following Wednesday morning at 10 AM. That same day, Mr. Spoelstra emailed the defendants at 8:03 PM to provide a copy of the accepted agreement. He noted in his email that they still had to sell the Vandenberg farm which was a condition in the original offer and the sign back offer.
40Mr. Spoelstra produced copies of text messages with Mr. Wilken on November 23, 25 and 26, 2016. I have already referred to the November 23 text. On Friday, November 25, he asked Mr. Wilken to give him a call. He texted again on November 26 to ask if there was a good time to chat that day as they needed confirmation for the inspection on Wednesday.
41In his affidavit, Mr. Wilken deposes that he was shocked to receive the email forwarding the accepted offer. There is no mention of the earlier text message that day. At para. 43, Mr. Wilken deposes that when he received the email, he immediately contacted Mr. Steenburgen by telephone and again advised that “we were not selling and declining the “offer” from the Vandenbergs of $2.4 million.”
42He indicates in his affidavit that he received a call that same evening on his cell phone from Mr. Spoelstra. His wife answered the phone. She reiterated that they were not selling.
43On November 26, 2017, at 8:32 PM, Mr. Wilken sent an email from his iPhone to the agents. He wrote:
Phil/Ron, please send me the cancellation of listing forms required to cancel our listing for now… Your services are no longer needed as our family has decided against a move at this time… Sorry… Rob Wilken
44Once again, Mr. and Mrs. Wilken’s evidence is at odds with documentation made contemporaneous with the events. He maintains that he told the agents in no uncertain terms that they did not wish to proceed with the sale the same night that he received the email providing him with a copy of the accepted agreement - November 23, 2016. Why then did Mr. Spoelstra follow-up by text in the days immediately following for permission to come onto the property to do the house inspection? Why was there no response by text or email?
45The affidavits sworn by the agents on the motion indicate that their first indication that the defendants were not prepared to proceed with the sale was the email on November 26, 2017 by Mr. Wilken. Mr. Spoelstra tried to find out why they had changed their minds and inquire as to whether they needed a longer closing. He indicates in his affidavit that that line of inquiry was abruptly cut off and he was told that he would hear from the defendants’ lawyer.
46Mr. Wilken deposes at paras 46 – 48, and 51 that:
the agents ignored their pleas to cancel the listing and forged ahead with the Vandenbergs to close the deal;
they subsequently learned from speaking with neighbours that the agents were shopping around for the Vandenbergs and ultimately targeted the defendants’ properties to secure a significant commission for themselves;
he believes that the agents and the Vandenbergs colluded with each other to force and/or trick them to sell the properties to the Vandenbergs at a price the Vandenbergs wanted.
47Mr. Wilken testified in cross-examination that they had no evidence that the Vandenbergs were part of the targeting of their properties. They never met or spoke to the Vandenbergs before November 23, 2016. The Vandenbergs did nothing to influence their decision to counter their initial offer; only the real estate agents did so.
48Mrs. Wilken agreed in cross-examination that they had no evidence that the Vandenbergs did anything to collude or conspire with the real estate agents to trick or force them to sell their properties.
Failure to Close
49The Vandenbergs sold their property and waived the condition for sale of their farm. All conditions in the agreement of purchase and sale were satisfied in a timely manner. The defendants refused to complete the sale to the plaintiffs.
50The evidence on the motion shows that the defendants aggressively asserted that they were not going to close. They engaged in an Internet campaign to disparage the agents. Mrs. Vandenberg deposes that Mrs. Wilken threatened to ruin her reputation if she insisted on going ahead with the sale.
Intended Use of Farm Lands
51When they entered into the agreement of purchase and sale, the Vandenbergs’ plan was to move from their farm property when it closed to the home on the defendants’ property. Their daughter and grandchild reside with them and were going to move into the home as well. The Vandenbergs own considerable farm equipment which they intended to store in the sheds and barn on the property they were purchasing from the defendants.
52In addition, the Vandenbergs intended to allow their son, Reuben, to plant the workable farmland on the two properties in 2017. He swore an affidavit indicating that he had planned to plant 60 acres of corn and 60 acres of IP soybeans. He obtained an IP premium contract with the Hensall Co-op for the soybeans which guaranteed him a three dollars per bushel premium. He ordered seed for 60 acres of corn and 60 acres of IP soybeans to be planted on the lands.
53Reuben indicates that he has suffered a loss as a result of the inability to plant as planned; however, Rueben is not a named party to this action. Any losses he sustained are not recoverable from these defendants. The plaintiffs assert that Reuben was to pay $1,000 per acre which they have lost because the sale did not close.
54Defence counsel submits that when searching for property to purchase, the plaintiffs’ only requirement was that the land be 200 acres. They did not care about a house or farm buildings. They were not concerned about location.
55Plaintiffs’ counsel indicates that the evidence shows that: the plaintiffs wanted a minimum of 120 workable acres; they did not want any livestock as they were getting out of the broiler operation; and, they wanted the property not too far from their remaining farm property. The defendants’ properties are approximately 20 kilometers from that farm.
Comparable Lands
56The defendants have filed an affidavit by Ronald Richard Tyler, a real estate agent with Century 21 First Canadian Corp. in Strathroy. Mr. Tyler executed an acknowledgement of expert’s duty but did not provide a curriculum vitae. Instead, he simply deposes that he has been a real estate agent for 25 years in southwestern Ontario.
57Mrs. Vandenberg attached as an exhibit a copy of Mr. Tyler’s webpage. It shows that he is a real estate agent in Strathroy-Caradoc, a considerable distance from the Wilken properties. There is nothing on his webpage that reveals any experience or expertise in agricultural lands.
58In his affidavit, Mr. Tyler indicates that he was retained by defendants’ counsel to “conduct a market analysis in the area of the defendants’ properties…to determine whether there are comparable properties available for sale.”
59He deposes that he compiled a search of the area using 100 km radius; that he “did my search as I would do any prudent search to find any other comparable property by searching the Registry Office, the Real Estate Boards in the immediate area, and the farm sites on the internet.”
60He indicates that there are a number of farms on the market “today” that are comparable to the subject property and attaches as exhibit A copies of some of the properties located that are either currently for sale or that have recently been sold. Exhibit A is comprised of information on six properties with photographs.
61Defence counsel submits that there is no responding expert report and, as such, Mr. Tyler’s evidence must be accepted as definitive.
62I am not satisfied on the evidence before me that Mr. Tyler possesses the required expertise to opine on “comparable” farm properties. There is nothing that demonstrates any past experience in agricultural real estate. That he has been a real estate agent for 25 years does not mean that he is knowledgeable about farm land generally or farm land in proximity to the properties. Howick Township is a considerable distance from Strathroy-Caradoc.
63There is no curriculum vitae nor anything in the record to cure this obvious deficiency. This purported expert evidence does not comply with R. 53 and does not meet the requirements for expert evidence.
64Assuming the properties in Exhibit A are admissible as factual, not opinion evidence, of farm properties for sale, Mrs. Vandenberg swore an affidavit dated September 21, 2017 in which she indicated in detail why each property would not meet the plaintiffs’ needs and requirements. There is no evidence to contradict her reasons.
65Some of the properties identified by Mr. Tyler are a considerable distance from the subject properties. The defendants continue to have another farm property and it makes sense that they would want their main farm property to be reasonably close by.
66When the sale did not close, the plaintiffs looked for other farm property in the immediate area so as to mitigate. They put an offer on one 200 acre property, albeit at only $1.8 million (the “mitigation farm”). They were prepared to go no higher than $1.9 million. The mitigation farm sold for $2.4 million. That property is the only property identified by the plaintiffs as comparable to their lands that was proximate to their lands.
67According to Mrs. Vanderberg in cross-examination, there were significant shortcomings with the mitigation farm that would require the expenditure of considerable money and effort to remedy. There had been no hydro to the property for years and, as a result, the buildings on the property would have to be taken down and replaced. They would have to erect a new house.
68There is no evidence that contradicts her evidence of the state of the mitigation farm.
Law – Specific Performance
69The goal of contract remedies is to put the injured party in the position he or she would have been in had the contract been performed. The remedial toolbox includes damages, the most common and usual remedy, and specific performance. Specific performance of a contract is an equitable remedy. If employed, it compels the due performance of the contract.
70At one time, specific performance was routinely granted to impel completion of agreements of purchase and sale of land. Land was considered inherently unique which made damages a less appropriate and fulsome remedy. That approach changed in 1996 with the decision of the Supreme Court of Canada in Semelhago v. Paramadevan, 1996 CanLII 209 (SCC), [1996] 2 S.C.R. 415.
71In Semelhago, the Court held at para. 21:
It is no longer appropriate, therefore, to maintain a distinction in the approach to specific performance as between realty and personalty. It cannot be assumed that damages for breach of contract for the purchase and sale of real estate will be an inadequate remedy in all cases. The common law recognize that the distinction might not be valid when the land had no peculiar or special value. …
72Further, the Court stated at para. 22:
Specific performance should, therefore, not to be granted as a matter of course absent evidence that the property is unique to the extent that its substitute would not be readily available. The guideline proposed by Estey J. in Baud Corp., N.V. v. Brook (sub nom Asamera Oil Corp. v. Sea Oil & General Corp.) 1978 CanLII 16 (SCC), [1979] 1 S.C.R. 633, with respect to contracts involving chattels is equally applicable to real property. At p. 668, Estey J. stated:
“Before a plaintiff can rely on a claim to specific performance so as to insulate himself from the consequences of failing to procure alternate property in mitigation of his losses, some fair, real and substantial justification for his claim to performance must be found.” [Emphasis in bold added]
73The court must consider not only the nature of the property, but also the inadequacy of damages as a remedy: Hoover v. Mark Minor Homes Inc., unreported decision of Leitch J. dated June 30, 1998 (Ont. Gen. Div.) at para. 46.
74In John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd., 2001 CanLII 28012 (ON SC), [2001] O.J. No. 4397, Justice Lax wrote at para. 55:
- …It is obviously important to identify the factors or characteristics that make a particular property unique to a particular plaintiff. The more fundamental question is whether the plaintiff has shown that the land rather than its monetary equivalent better serves justice between the parties. This will depend on whether money is an adequate substitute for the plaintiff’s loss and this in turn will depend on whether the subject matter of the contract is generic or unique.
75The onus lies on the party seeking specific performance to establish uniqueness on a balance of probabilities. The plaintiff does not have to prove a complete absence of comparable properties: John E. Dodge Holdings Ltd., para 57.
76The extent to which any parcel of land meets the uniqueness criterion is a factual determination that will depend on the circumstances in each case. There may well be subjective factors that cannot be reasonably duplicated by other lands. For example, a purchaser who buys the home he or she grew up in. Satisfaction of the uniqueness criterion may well provide what Estey J. described as “fair, real and substantial justification” for the claim to performance.
77The uniqueness inquiry has a subjective and objective aspect. Justice Lax in John E. Dodge Holdings Ltd. wrote at para. 59:
- …While it is difficult to be precise about this, it strikes me that normally, the subjective aspect will be less significant in commercial transactions and more significant in residential purchases, unless the motivation in the latter case is principally to earn profit. In terms of the subjective aspect, the court should examine this from the point of view of the plaintiff at the time of contracting. … In some cases, there may be a single feature of the property that is significant, but where there are a number of factors, the property should be viewed as a whole….The court will determine objectively whether the plaintiff has demonstrated that the property has characteristics that make an award of damages inadequate for that particular plaintiff.
78Finally, the duty to mitigate applies to a breach of contract where specific performance is sought but declined. Where specific performance is denied, the strength of the plaintiff’s justification for seeking specific performance will inform what is reasonable for the plaintiff to do in mitigating: Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51 at paras. 2 and 36.
Law – Summary Judgment
79Summary judgment motions are governed by r. 20.04 which states:
(2) The court shall grant summary judgment if,
(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence;…
(2.1) In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:
Weighing the evidence
Evaluating the credibility of a deponent
Drawing any reasonable inference from the evidence.
(2.2) A judge may, for the purposes of exercising any of the powers set out in subrule (2.1), order that oral evidence be presented by one or more parties, with or without time limits on its presentation.
80The leading case on summary judgment is Hryniak v. Mauldin, 2014 SCC 7. At para. 66, Karakatsanis J. for the court wrote:
On the motion for summary judgment under Rule 20.04, the judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
81Thus, the judge hearing the summary judgment motion must ask:
On the basis of the evidentiary record alone, are there genuine issues that require a trial?
Does the evidentiary record provide the evidence needed to “fairly and justly adjudicate the dispute”?
82In Hryniak, the test for summary judgment was stated at para. 49 as follows:
There will be no genuine issue requiring a trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result.
83The onus of establishing that there is no genuine issue requiring a trial rests on the moving party. Where the moving party establishes that there is no genuine issue requiring a trial, the onus shifts to the responding party to establish that there is a genuine issue requiring a trial: Sweda Farms Ltd. v. L.H. Gray & Son Ltd., 2014 CarswellOnt 11926 (ON CA) at para. 26; New Solutions Extrusion Corp. v. Gauthier, 2010 ONSC CarswellOnt 913 at para. 12; Bhakhri v. Valentim, 2012 ONSC 2817 at para. 7.
84A responding party must set out in affidavit material or other evidence the specific facts that establish that there is a genuine issue requiring a trial. The responding party cannot rest on mere denials of allegations of a party’s pleading: Sweda, para. 27 (See also John Deere Financial Inc. v. 1232291 Ontario Inc. (c.o.b. Northern Haul Contracting), [2015] O.J. No. 6503 (S.C.J.) at para14; O’Laughlin v. Byers, [2014] O.J. No. 4221 (S.C.J.) at para. 40, upheld [2015] O.J. No. 1559 (C.A.). It is not enough to allude to evidence that may be adduced in the future.
85The judge hearing the motion must:
Determine the motion on the pleadings and evidence actually before the court on the motion. The judge is entitled to assume that the record contains all the evidence that would be adduced at trial; and
Take a hard look at the evidence and the merits of the action at this preliminary stage: Sweda, paras. 26-28.
86Where a party seeks partial summary judgment, the motion judge must assess the advisability of the summary judgment process in the context of the litigation as a whole: Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450 at paras. 35. The motion judge must consider whether the factual findings necessary to determine the motion are so intertwined with the remaining issues that those determinations on the motion risk inconsistent findings later and substantive injustice: Baywood Homes Partnership, para. 37. Given what remains to be determined, it may be more fair, efficient and just for those findings to be made once in the context of the trial.
Analysis
87The following issues arise on this motion:
- Is there a genuine issue as to,
a. Whether there is a binding agreement of purchase and sale;
b. If so, whether the defendants breached that agreement;
c. Whether specific performance should be awarded?
If there is a genuine issue, does the determination of that issue(s) on its face require a trial?
Will the exercise of the powers in r. 20.04(2.1) and (2.2) permit a fair and just determination of the issue(s) at this stage without a trial?
Is it appropriate to grant partial summary judgment in the context of this litigation as a whole?
88I will address whether there is a genuine issue, whether on its face it requires a trial and whether I should use the powers in r. 20.04(2.1) and (2.2), as necessary, in my analysis of each of issues 1(a-c).
Binding Agreement?
89The defendants contest the validity and enforceability of the agreement of purchase and sale. They assert that the agreement is not valid and binding because:
a. they did not understand the nature and import of the agreement – doctrine of non est factum;
b. the agreement is an unconscionable transaction; and
c. the plaintiffs and real estate agents colluded and conspired to trick and/or force the defendants to sell.
90Dealing first with the defence of non est factum, I find that there is no merit to this defence and, accordingly, no genuine issue for trial. The defendants are able to read and understand English. They knew they were making a counter-offer. They had purchased property previously, including the subject lands. Finally, and most importantly, they chose not to read the agreement or to seek legal advice before signing and initialling the agreement.
91In Marvco Color Research Ltd. v. Harris, 1982 CanLII 63 (SCC), [1982] 2 S.C.R. 774, the Supreme Court of Canada held that any party who fails to exercise reasonable care in signing a document is precluded from relying on non est factum as against a person who relies on the document in good faith and for value. The failure to read the document before signing is carelessness at best, and the loss must rest with the party who failed to take reasonable care.
92I find on the defendants’ own evidence that they failed to exercise reasonable care in signing the agreement of purchase and sale without reading it or seeking legal advice if they were indeed uncertain.
93The defendants assert that the agreement of purchase and sale is an unconscionable transaction. They rely upon the following passage from the decision of Killeen J. in Bartlett v. Canada Life Assurance Company et al, 1998 CanLII 31629 (ON CJ), [1998] O.J. No. 2691 at para. 33:
Mr. Justice Hallett has usefully brought together the principles undergirding the doctrine of unconscionability in Stephenson v. Hilti (Canada) Ltd. (1989), 1989 CanLII 191 (NS SC), 29 C.C.E.L. 80 (N.S. T.D.) at 87:
To summarize the principles set out in the foregoing cases, it seems to me that a transaction may be set aside as being unconscionable if the evidence shows the following:
(1) That there is an inequality of bargaining position arising out of ignorance, need or distress of the weaker party;
(2) The stronger party has unconscientiously used a position of power to achieve an advantage; and
(3) The agreement reached is substantially unfair to the weaker party or, as expressed in the Harry v. Kreutziger case, it is sufficiently divergent from community standards of commercial morality that it should be set aside.
To put it even more succinctly, is the transaction so unconscionable that it requires the intervention of the Court considering all the circumstances surrounding the making of the agreement?
94The defendants submit that:
a. The agents misled them as to the consequences of signing back the offer. Specifically, the agents advised that even if the Vandenbergs accepted their counter-offer, the final decision to sell rested with the defendants;
b. The agents coerced their signatures despite being told repeatedly by the defendants that they did not wish to sell;
c. As a result, there was an inequality of bargaining position;
d. The agents were supposed to act fairly and evenly in their dealings with the defendants and did not;
e. The real estate agents were agents of the plaintiffs (and defendants) even if the plaintiffs were not aware of their conduct;
f. The home has significant personal value to the defendants and its loss cannot be measured purely in dollars;
g. The plaintiffs have wrongly pressed on with the transaction when they knew the defendants did not wish to sell. The sale of their property, the waiver of the conditions and this action all evidence unconscientious conduct by the plaintiffs; and
h. This is a transaction where the Court should intervene.
95The plaintiffs submit that:
a. There is no evidence that the plaintiffs were aware of any misrepresentations or pressure by the real estate agents; and
b. If the agents misinformed the defendants, which the agents deny, that has no impact on the plaintiffs or the validity of the agreement.
96The plaintiffs rely on the decision of Justice Southin in Toronto-Dominion Bank v. San-Ric Developments Ltd., [1987] B.C.J. No. 239 (B.C. S.C.) at page 14 where he wrote:
There are all sorts of situations in which people sign documents upon somebody else’s representation as to what is in them. Clients sign documents upon a lawyer’s representations, parents sometimes sign upon their children’s representations, spouses sign on the representations of the other spouse and so forth. If our trust is misplaced and the instrument is not what we intended, we have only ourselves to blame for having trusted someone who could not be trusted.
97First, I do not accept that the defendants were in a weaker bargaining position. To the contrary, the defendants, as vendors, had control of the situation. They could accept the offer, reject it with no counter-offer or make a counter-offer.
98Further, the defendants could have sought legal advice or withdrawn their offer at any time after the agents left their home and before the plaintiffs accepted. Contrary to the defendants’ evidence, they had two days between the counter-offer and acceptance.
99It is not unconscionable for an innocent party to insist on his or her contractual rights. The plaintiffs are not required to shrug their shoulders and walk away merely because the defendants changed their minds about selling after the agreement was entered into.
100I am satisfied that this is an appropriate case to exercise the powers in r. 20.04(2.1) to weigh evidence and evaluate the credibility of a deponent. I find that:
a. The initial offer by the plaintiffs was made the same day as their last visit to the Wilken properties – on November 14, 2016.
b. The offer of $2.25 million was left by the agent with Mrs. Wilken on November 14, the same day it was signed by the plaintiffs.
c. The agent met with the Wilkens at their home on November 21, 2016 to present the plaintiffs’ offer.
d. The defendants signed back a counter-offer for $2.4 million on November 21, 2016.
e. The defendants did nothing to withdraw or rescind that counter-offer before it was accepted by the plaintiffs on November 23, 2016.
f. The agent notified Mr. Wilken by text on November 23, 2016 of the plaintiffs’ acceptance and inquired about a home inspection for the following Wednesday.
g. The agent followed up to confirm the proposed Wednesday inspection because he had heard nothing from the plaintiffs.
h. The plaintiffs received a copy of the accepted agreement from the agent on November 23, 2016.
i. Mr. Wilken did not call the agent on November 23 after he received the initial text or later that day after he received a copy of the signed agreement.
j. The defendants’ first indicated that they did not wish to proceed with the sale when Mr. Wilken emailed the agent from his iPhone on November 26, 2016.
101I come to the above findings principally by a simple comparison of the evidence of Mr. Wilken and the documents. The inconsistencies are numerous and material. I find the evidence of Mr. Wilken and his wife to be unreliable.
102I am convinced that the defendants simply suffer from a case of sellers’ remorse. They were not misled nor were they pressured to sign the offer back. They wanted full price for their properties and that is what they got. In the days after they had the agreement in hand, they had a change of heart. Their story of what happened before and after the agreement was entered into is simply not credible.
103In summary, I am not satisfied that there is a genuine issue requiring a trial as to whether the Court should intervene and set aside this transaction to protect an innocent weaker party who is being taken advantage of. Rather, this is a case where parties of equal bargaining power concluded an agreement that is fair and reasonable on its face. The evidence does not establish any prospect of a finding of an unconscionable transaction.
104Finally, I agree that even if a court could find that the agents misrepresented the effect of signing back the counter-offer, the defendants’ remedy lies against the agents, not the innocent plaintiffs (see San-Ric Developments).
105With respect to the allegation of collusion or conspiracy, the defendants’ evidence is woefully inadequate. They concede in cross-examination that they have no knowledge that the plaintiffs colluded or conspired with the agents. It is a conspiracy theory without a factual foundation from which one might infer collusion.
106I conclude that there is no genuine issue requiring a trial as to the validity of the agreement of purchase and sale. The agreement of purchase and sale dated November 23, 2016 is valid and binding on the defendants.
Breach of Agreement?
107It is undisputed that if the agreement of purchase and sale is valid and binding, the defendants breached that agreement by refusing to complete the transaction.
Specific Performance?
108The plaintiffs submit that the evidence establishes that the Wilken properties are not easily replaced. Accordingly, the uniqueness criterion is met. The plaintiffs wanted 200 acres of farm land having a minimum of 120 workable acres that was not a livestock operation, located within reasonable proximity of their remaining farm lands. Only the Wilken properties and the mitigation farm meet these criteria. They made reasonable efforts to mitigate and were unsuccessful.
109The plaintiffs also submit that damages are not an adequate remedy because no substitute lands are readily available.
110The defendants submit that:
a. The plaintiffs only criterion was 200 acres of land per Mrs. Vandenberg in her cross-examination;
b. There are many farm properties that fit that criterion;
c. There are no subjective features to the Wilken properties that give rise to any real justification for specific performance;
d. The plaintiffs have not properly mitigated;
e. The plaintiffs’ claim for damages in the statement of claim evidences that damages are an adequate remedy;
f. Specific performance is not required to do justice. Damages are adequate in these circumstances.
111As indicated above, an award of specific performance is far from automatic. I must consider whether there is a readily available substitute (uniqueness), whether the properties have a peculiar or special value to the plaintiffs, and whether damages are an adequate remedy for the defendants’ breach of the agreement of purchase and sale.
112In my view, the plaintiffs are able to satisfy the uniqueness criterion – there is no comparable substitute property for sale. The plaintiffs made an offer to purchase the only such property near to the Wilken lands. They discounted their offer to account for deficiencies they observed. Their reasons for doing so appear reasonable on the face of the evidence before me.
113However, that does not end the inquiry. I must also consider whether the Wilken lands have some peculiar or special value to the plaintiffs. The plaintiffs do not identify any special or distinguishing features to the Wilken properties that drove their decision to buy. The lands are largely indistinguishable from other farm properties in the same area. To use the language of Lax J. in John Dodge, the property is, in one sense, generic. By analogy, it is as if the Vandenbergs wished to purchase any four bedroom home in a particular subdivision with many four bedroom homes.
114I must also consider whether damages are an adequate remedy. I believe they are in this case for the following reasons:
a. As mentioned, there is nothing distinctive or unique to the Wilken properties. They comprise 200 acres of land with 120 workable acres in an area rife with other farm land;
b. While there are no properties presently on the market having exactly the acreages sought, the market is constantly changing as new properties are listed;
c. The plaintiffs’ losses are quantifiable especially once they have acquired other lands in mitigation;
d. The denial of specific performance does not absolve the defendants of their liability for damages; in fact, the damages payable may well be greater.
115Simply put, I am not persuaded that specific performance is necessary to ensure justice is done. I can readily understand the plaintiffs’ bewilderment and frustration with the defendants’ conduct. However, although the defendants will not be compelled to complete the agreement, they will bear the damages sustained by the plaintiffs as a consequence of their breach of the agreement of purchase and sale.
116Before I move on, I will address one of the arguments advanced by defence counsel on this issue – that the plea of damages equates to an admission that damages are an adequate remedy. I do not agree. If specific performance had been ordered, damages would have flowed in addition. Further, pleading damages in the alternative is good practice, not an admission.
Partial Summary Judgment
117Defence counsel cautions that I should not make any findings regarding the validity and enforceability of the agreement of purchase and sale or its breach to avoid inconsistent findings in related third party proceedings involving the real estate agents. In short, he urges that once I find that specific performance should not be granted, all issues should left for trial.
118I am mindful of the admonition of the Court of Appeal in Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450 at para. 35 that the motion judge must assess summary judgment in the context of the litigation as a whole.
119In my view, it is appropriate to make findings on the validity of the agreement of purchase and sale and its breach as,
a. The defendants were required to put their best foot forward to respond to the motion;
b. The defendants swore affidavits that were patently inconsistent with several key contemporaneous documents;
c. There is no reason to suppose that they have any evidence to remedy the obvious failings in their affidavits;
d. They were cross-examined on their affidavits and reiterated their affidavit assertions;
e. The determination of these issues resolves all issues but that of damages;
f. The real estate agents swore affidavits on the summary judgment motion consistent with a binding agreement and breach by the defendants. Accordingly, they will not be seeking a finding inconsistent with this determination and the defendants will be bound by these findings; and
g. This is a case where the outcome of the summary judgment motion will shorten the action and make efficient use of court resources. It will benefit the parties by reducing their legal costs in the long-term.
120This is a case where the sellers decided to resile without proper reason from a binding agreement of purchase and sale. It is unfair and inefficient, to say nothing of significantly more costly, to force the plaintiffs to prove at trial what is evident at this stage.
121The plaintiffs sought summary judgement on damages in addition to specific performance. The theory of damages advanced was: the plaintiffs incurred losses which could be quantified at this time because an order specific performance would crystallize those losses. During oral argument, however, plaintiffs’ counsel indicated that damages should be deferred. There is all the more reason to do so since specific performance has been denied.
122Given my familiarity with the evidence in this case, I will remain seized of the trial of the damages issues. The parties should make arrangements with the Trial Coordinator for a case conference to address the steps forward.
Conclusion
123I conclude as follows:
a. The plaintiffs are granted partial summary judgment with respect to the validity of the agreement of purchase and sale and its breach by the defendants;
b. The plaintiffs’ claim for specific performance is denied; and
c. The issue of damages will proceed to trial before me.
124If the parties cannot agree on costs, they may make written submissions not exceeding three page within 15 days hereof.
”Justice R. Raikes”
Justice R. Raikes
Released: November 6, 2017