Court File and Parties

COURT FILE NO.: CV-17-574741 DATE: 20180725 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

WED INVESTMENTS LIMITED Plaintiff (Respondent) – and – SHOWCASE WOODYCREST INC. and 2442459 ONTARIO INC. Defendant (Appellants)

COUNSEL: Stephen Shwartz, for the Respondent (Plaintiff) Mark A. Klaiman, for the Appellant (Defendant)

HEARD: July 20, 2018

R.F. GOLDSTEIN J.

Reasons for Judgment on Appeal

Background

[1] In 2016 Showcase owned a property on Brock Street in Whitby. 2442459 owned a property on Hopkins Street in Whitby. Showcase and 2442459 are part of the same group of companies. That group is a property developer.

[2] WED became interested in acquiring the properties. WED is also a property developer. The parties began discussions in June 2016. They entered into separate agreements of purchase and sale for the two properties on August 5, 2016. WED was to purchase the Brock Street property for $4 million and the Hopkins Street property for $4.2 million. The agreements provided for a conditional sale period of 45 days each. The conditional sale period was for the purpose of the purchaser doing its due diligence as to the feasibility of developing the properties.

[3] The conditional period for the Hopkins Street property was extended. The conditional period for the Brock Street property was not. The agreements were never completed and the properties did not change hands.

[4] WED launched an action against Showcase and 2442459. It claimed specific performance. WED’s position in the action is that Showcase and 2442459 did not honour the terms of the agreements. Specific performance should be granted, WED says, because the properties are unique to it. Damages cannot compensate for the loss.

[5] Showcase’s position in the action is that the agreements were null and void because WED did not comply with the notice provisions.

[6] WED obtained ex parte orders to register certificates of pending litigation on both properties. Showcase and 2442459 brought motions to discharge those certificates. Master Abrams heard the motions.

[7] On January 26 2018, Master Abrams granted the motion on the Hopkins Street property and discharged the certificate. She dismissed the motion on the Brock Street Property. She did not discharge that certificate.

[8] Showcase appeals Master Abrams’ refusal to discharge the certificate on the Brock Street property. For the reasons that follow, the appeal is dismissed.

Issues and Analysis

[9] Mr. Klaiman, for Showcase, argues that the Master erred in law and made a palpable and over-riding error. He raises three issues: first, in finding that there was an ambiguity with regard to the right of delivery of the written notice of waiver; second, in finding that the property was unique, in that specific performance would be available; and third, in finding that damages were not easily quantifiable.

[10] Despite Mr. Klaiman’s well-presented argument, I must disagree. I see no error by the Master.

[11] The test on appeal is whether the master erred in law, made a palpable and over-riding error, or exercised her discretion improperly: Zeitoun v. The Economical Insurance Group (2009), 2009 ONCA 415, 96 O.R. (3d) 639 (C.A.). The Master is entitled to deference regarding the exercise of that discretion.

[12] Section 103(6) of the Courts of Justice Act sets out the statutory basis for discharging a certificate of pending litigation:

(6) The court may make an order discharging a certificate,

(a) where the party at whose instance it was issued,

(i) claims a sum of money in place of or as an alternative to the interest in the land claimed,

(ii) does not have a reasonable claim to the interest in the land claimed, or

(iii) does not prosecute the proceeding with reasonable diligence;

(b) where the interests of the party at whose instance it was issued can be adequately protected by another form of security; or

(c) on any other ground that is considered just,

and the court may, in making the order, impose such terms as to the giving of security or otherwise as the court considers just.

(a) Did the Master err in finding an ambiguity in the Agreement of Purchase and Sale?

[13] Mr. Klaiman argues that High Tower Homes Corporation v. Stevens, 2014 ONCA 911 is, in essence, a complete answer to this question. In that case the purchaser of a property failed to comply with certain notice provisions. The agreement in that case contained the same standard notice provision as in this case. No address was specified in the form. The purchaser sent a notice waiving certain conditions. The notice was sent by fax. The motion judge found that the notice was not valid. The vendor could, therefore, avoid completing the sale based on the purchaser’s failure. The Court of Appeal agreed and dismissed the appeal.

[14] I respectfully disagree that the High Tower Homes case applies. That case was also argued before Master Abrams. She distinguished it. She distinguished it by noting that the Agreement of Purchase and Sale in that case did not contain a schedule that was similar to the one in this case. In my view, the Master made no error of law in doing so. I will explain why.

[15] The Agreement of Purchase and Sale in this case was a standard pre-printed Ontario agreement (I will refer to it as “the agreement”). The agreement had a standard clause regarding notices. The agreement also contemplated that parties to a real estate transaction would likely add other terms and conditions in various schedules. In fact, the agreement did have a schedule. In order to understand why the Master distinguished High Tower Homes the case it is necessary to examine the provisions of the agreement and the additional schedule.

[16] The agreement included the following statement:

… Any notice relating hereto or provided for herein shall be in writing. In addition to any provision contained herein and in any Schedule hereto or provided hereto this offer, any counter-offer, notice of acceptance thereof or any notice to be given or received pursuant to this Agreement or any Schedule hereto (any of them, “Document”) shall be deemed given and received when delivered personally or hand delivered to the Address for Service provided in this Acknowledgment below, or where a facsimile number or email address is provided herein…

[17] It is common ground that no email addresses were set out in the agreement.

[18] The agreement also had an “Agreement in Writing” clause. That was also a standard clause. That clause dealt with conflicts between the standard agreement and any additional provisions contained in an attached schedule. Where a provision set out in a schedule conflicted with the standard pre-printed agreement, the schedule superseded.

[19] Schedule “A” included the following clause:

The parties hereto agree that this Agreement of Purchase and Sale and any Amendments thereto may be transmitted through the use of electronic mail and that a true copy will be delivered to the Buyer and the Seller following acceptance of the agreement.

[20] It is not difficult to see why the Master found an ambiguity on the face of the agreement and the associated schedule. The standard agreement contained a provision that notices could be sent by email and required that an email address be set out in the agreement. No email addresses were provided. The schedule also said that amendments could be sent by email. The schedule did not require that an email address be specified. I see no error by the Master in this regard.

(b) Did the Master err in finding that the Brock Street Property was unique?

[21] Mr. Klaiman argues that the Master made a palpable and over-riding error in finding that the Brock Street property was unique. The proposed use of the property was for development. WED is in the development business. Any property where a profit could be made would be suitable. Furthermore, the Master discharged the certificate of pending litigation on the Hopkins Street property but not the Brock Street property – but, Mr. Klaiman argues, she failed to distinguish why one was unique but not the other.

[22] Again, I must respectfully disagree. The Master found both properties were unique, but in exercising her discretion she found that the balance tipped towards discharge for one but not the other. She did that when she analyzed the factors for discharging a certificate of pending litigation: 572383 Ontario Inc. v. Dhunna, [1987] O.J. No. 1073 at paras. 11-18.

[23] The Master found that the Plaintiff’s case was stronger in relation to the Brock Street property than the Hopkins Street property. She did so when interpreting the two agreements of purchase and sale. In my respectful view, there was a basis for that finding. The Master’s interpretation of a contractual provision is entitled to deference: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53.

[24] The Master was aware that specific performance should not be granted as a matter of course, absent evidence that the property is unique: Semelhago v. Paramadevan, [1996] 2 S.C.R. 145 at para. 22. She was also aware that “uniqueness” means that the property has a quality that makes it fit for the proposed use and cannot be readily duplicated elsewhere: John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd. (2001), 56 O.R. (3d) 341, [2001] O.J. No. 341 (Sup.Ct.), appeal dismissed, , 63 O.R. (3d) 304, [2003] O.J. No. 350 (C.A.). See also: Silverberg v. 1054384 Ontario Limited at para. 131. The question on the motion was not whether the properties were in fact unique but whether there was evidence upon which a trier of fact could find that the properties were unique: Terracap Investments Inc. v. 2811 Development Corporation, 2010 ONSC 2528 (Ont.Master) at para. 56. In my respectful view, there was evidence upon which the Master could find that the Brock Street property was unique. She listed the evidence. In doing so she made no palpable and over-riding error. She simply did not accept the argument that as an investment the Brock Street property was not particularly unique. Whether the property is actually unique for the purposes of specific performance is ultimately a question of mixed fact and law that can only be determined at trial.

[25] When exercising her discretion the Master was not bound to find that if both properties were unique then the outcome of the motion had to be the same for both. I see no error either in the finding that the Brock Street property was unique (for the purposes of the motion) or in the exercise of her discretion.

(c) Did the Master err in finding that damages were not easily quantifiable?

[26] The Master did not distinguish between the two properties for the purposes of the “uniqueness” analysis. Mr. Klaiman argues that it makes no sense that the Master would lift the certificate of pending litigation for one property because the damages could not be easily quantified but not for the other. In essence, he says that the Master should have treated the properties the same for all purposes.

[27] Again, I must respectfully disagree. For the reasons I have already mentioned, the Master in essence found that the Plaintiff’s case was stronger in relation to the Brock Street property. That is how she distinguished the properties. She did not distinguish the properties based on any intrinsic difference between them. She found they were both unique but lifted the certificate of pending litigation against only one on the basis of the triable issues in the case. The quantification of damages is only one factor in the analysis. The Master was entitled to weigh that factor as she saw fit in the circumstances of the case. She is entitled to deference absent an error of law or a misapprehension of the evidence. I see no error.

Disposition and Costs

[28] The appeal is dismissed. If the parties are unable to agree on costs they may each present to me a costs outline and submissions of no more than two pages within 15 days of the release of these reasons.

R.F. Goldstein J. Released: July 25, 2018