Court File and Parties

NEWMARKET COURT FILE NO.: CV-17-133777-00 DATE: 20190213 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: Ao Luo and Cheng Chen Plaintiffs – and – Guo Dian Chen and Homelife/New World Realty Inc. Defendants

Counsel: D.G. Edward, for the Plaintiffs (Respondents on the Motion) Whitney Abrams, for the Defendant Guo Dian Chen (Moving Party)

HEARD: November 15, 2018

Addendum to Reasons for Decision

DE SA J.

[1] After the release of my decision in Luo et al v. Chen et al, 2019 ONSC 680, the plaintiffs correctly pointed out that my reasons were incomplete. My decision did not formally address the plaintiffs’ motion for summary judgment in my decision. As such, I will deal with the plaintiffs’ motion more directly in this addendum.

[2] As outlined in my original decision, the matter relates to the purchase and sale of a property. The defendant, Guo Dian Chen, entered into an agreement to sell the property municipally known as 53 Port Rush Trail to the plaintiffs, Ao Luo and Cheng Chen (the Agreement).

[3] The plaintiffs take the position that the Agreement was never completed, and accordingly, they have brought an action seeking the return of the $50,000 deposit paid to the defendant and any interest accrued thereon. The plaintiffs take the position that the Agreement was not valid because the final offer with the amendment was never initialled by the defendant. The plaintiffs also point to the fact that the Agreement contained an irrevocability provision which made the Agreement irrevocable by the buyer until 11:59 p.m. on February 12, 2017 after which time, if not accepted, the offer would be null and void and the deposit returned in full. The offer was not initialled/accepted by the defendant until February 13, 2017. According to the plaintiffs, the written offer was therefore null and void at the time the plaintiffs initialled the change and the deposit should be returned.

[4] As evident from my judgment dismissing the defendant’s motion, I disagree with the plaintiffs’ position that the change had to be initialed by the defendant to be complete.

[5] I also disagree that the failure to cross out the irrevocability provision somehow would render the agreement null and void. The parties were clearly working on the understanding that the working document was valid. This irrevocability provision was obviously left in the document erroneously. Its presence in the document was an oversight and would not affect the validity of an agreement.

[6] I also reject the contention that the agreement had to contain all the material terms “in writing” to be a valid agreement. The plaintiffs’ technical approach to the issue, in my view, is not supported by the jurisprudence.

[7] In order to form a contract, the parties must be of one mind as to the essential terms of the contract. McKenzie v. Walsh (1920), 61 S.C.R. 312; Erie Sand and Gravel Ltd. v. Seres’ Farms Ltd., 2009 ONCA 709, 97 O.R. (3d) 241; Hunter v. Baluke (1998), 42 O.R. (3d) 553.

[8] To determine whether the parties reached a meeting of the minds, or consensus ad idem, the court applies an objective test. The court considers whether a reasonable person, apprised of all the circumstances, would believe the parties had reached an agreement. J.M.B. Cattle Corp. v. 2144032 Ontario Inc., 2015 ONSC 7372; Bawitko Investments Ltd. v. Kernels Popcorn Ltd. (1991), 79 D.L.R. (4th) 97 (Ont. C.A.): The existence of the agreement does not depend on the formal written document being executed, provided that all of the essential terms have been agreed upon.

[9] The jurisprudence makes clear that a failure to sign an agreement does not invalidate it, provided that the parties have agreed to its essential terms. As explained in Kernwood Ltd. v. Renegade Capital Corp., both words and conduct are considered in making the assessment:

With respect, I do not agree that Blair's failure to sign the Share Purchase Agreement establishes that he did not assent to it on November 21, 1989. It is well-settled law that, except in certain situations, a party's intention to be bound can be manifested by words or conduct: Calvan Consolidated Oil & Gas Company Limited v. M.E. Manning, [1959] S.C.R. 253 at 261. A manifest intention to be bound can be established by conduct or words where an objective interpretation of the conduct or words of the parties would lead a reasonable person to conclude that the parties intended to be bound: Industrial Tanning Co. v. Reliable Leather Sportwear Ltd., [1953] 4 D.L.R. 522 at 525 (Ont. C.A.). In such cases, the requirement of a signature is treated as a mere formality. [Emphasis added]

[10] I disagree with the plaintiffs that the technical issues identified in their cross motion (failure to initial the document and/or the irrevocability clause) would somehow invalidate the contract if the defendant is able to establish at trial a true meeting of the minds. As noted above, it is well-settled law that a party's intention to be bound can be manifested by words or conduct: Kernwood Ltd. v. Renegade Capital Corp, supra. Whether or not the parties had reached an agreement must be determined on a consideration of all the circumstances.

[11] The only reason I did not decide in favour of the defendant was because of the factual ambiguities created by the affidavit of Mr. Luo. The statements in his affidavit are in stark contrast with the position advanced by the defendant as to whether or not an agreement had been reached. The parties also take different positions on the significance of the role played by Ms. Li. The ultimate assessment of these differing accounts will turn largely on questions of credibility. I am not in a position to make the necessary determinations on the record before me. In my view, the issues raised by the materials filed are more properly determined at trial.

[12] It is for this reason that the plaintiffs’ motion for summary judgment must also fail. The question to be determined is not one of that will be determined by the formalities identified by counsel for the plaintiffs. Rather, it will be determined by a trial judge’s assessment of the credibility of Mr. Luo in the face of a factual record which strongly suggests an agreement had been reached. It will also be determined by the role played by Ms. Li.

[13] I also dismiss the plaintiffs’ motion for summary judgment.

Justice C.F. de Sa Released: February 13, 2019