Court File and Parties

COURT FILE NO.: CV-18-1661 DATE: 20190618 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Deepal Bhambra and Surinder Kumar, Plaintiffs AND: Eindrannie Singh and Kheeran Singh, Defendants

BEFORE: C. Smith, J

COUNSEL: A. Dhillon, Counsel for the Plaintiffs Self-Represented, Defendants

HEARD: May 13, 2019

REASONS FOR JUDGMENT

I ntroduction

[1] The plaintiffs, Deepal Bhambra and Surinder Kumar, brought this action against the defendants, Eindrannie Singh and Kheeran Singh, as a result of the defendants failure to close a real estate transaction involving a sale by the defendants to the plaintiffs of a property located at 65 Plowshare Crescent, Toronto, Ontario (hereinafter the property).

[2] The plaintiffs brought a Motion for Summary Judgment pursuant to the provisions of Rule 20 under the Rules of Civil Procedure which was heard in Oshawa, Ontario on Monday, May 13th, 2019. The defendants did not file responding materials nor did they appear for the hearing of the motion.

Factual and Procedural Background

[3] On Saturday, April 7th, 2018, the parties entered into an agreement of purchase and sale providing for the sale of the property to the plaintiffs for a consideration in the amount of $860,000. All four of the parties signed the agreement of purchase and sale which was prepared by the defendant's real estate agent at the direction of the defendants. The transaction was scheduled to close on May 18th, 2018. At the time of signing the agreement of purchase and sale, the plaintiffs supplied the defendants with a deposit in the amount of $25,000.

[4] On April 9th, 2018, the agreement of purchase and sale was amended by way of a formal amendment to the agreement of purchase and sale executed by all parties, which document was again prepared by the defendant's real estate agent. The amendment provided for a $10,000 reduction in the agreed sale price to $850,000 in order to reflect issues raised in the inspection report on the property obtained by the plaintiffs. All other terms and conditions of the original agreement of purchase and sale remained in force and effect.

[5] On May 16th, 2018, the plaintiff completed arrangements to obtain private mortgage financing for the purchase through Ajit Patel and Sudah Patel in the amount of $750,000 with said funds being supplied to the Plaintiff's real estate lawyer on May 17th, 2018. The transaction proceeded through to the closing date with the usual exchange of documents and information as between the real estate lawyers for both parties. On the day of closing, May 18th, 2018, the solicitor for the defendants advised the solicitor for the plaintiffs that the "file will not be closing". No reason was given for this decision. The plaintiff's solicitor immediately tendered closing documents and funds on the defendant's solicitor. The plaintiff's solicitor also registered a Caution of Agreement and Purchase of Sale on the property that same day. The plaintiff's solicitor subsequently advised the defendant's solicitor that the plaintiff's would continue to honour the agreement of purchase and sale until May 25th, 2018. On May 24th, 2018, the defendant's solicitor advised that the defendant's would not be closing the transaction. The plaintiff's subsequently commenced this action on June 22nd, 2019.

[6] The defendants commenced their own action against the plaintiffs herein on June 1st, 2018 by way of Statement of Claim alleging a variety of improprieties on the part of the plaintiffs herein. The defendants herein acted in person on that action. Both actions were consolidated in order to be dealt with together by order of Justice de Sa dated July 13th, 2018.

[7] On August 21st, 2018, Mr. Justice Charney of this court, granted leave to the plaintiffs to register a Certificate of Pending Litigation against the title to the property which was registered that same day.

[8] The defendants subsequently brought a motion returnable November 2nd, 2018 for an order directing that the caution registered by counsel for the plaintiffs against the property on May 18th, 2018, which automatically expired after 60 days, a fact which was brought to the attention of the defendant's by way of correspondence from the plaintiff's counsel on October 23rd, 2018. Upon return of the defendant's motion on November 2nd, 2018, de Sa J, made note of problems being experienced by the plaintiffs in serving the defendants with documents. de Sa, J ordered that from that date forward service of any documents on the defendants could occur by way of delivery to a particular street address of the defendants or by e-mail to a particular e-mail address supplied by the defendants. de Sa, J also ordered on that date that any additional motions brought by the defendants could only be brought with leave pursuant to Rule 37.16 as a result of concerns he had about whether the defendants were engaging in delay tactics.

[9] The matter was subsequently placed on the trial scheduling court list before Justice Edwards on December 20th, 2018. The transcript of that proceeding shows the following:

• Both defendants were present
• Both defendants were apprised of the summary judgment process
• Both defendants were advised that the matter would be heard during the May 2019 sittings
• Both defendants were advised and required to file something revealing their respective contact information which was done on a handwritten document filed with the court and date stamped December 20th, 2018
• Both defendants were advised of the importance of keeping the court apprised of their current contact information

[10] At the hearing of the summary judgment motion on May 13th, 2019, this court was advised by counsel for the plaintiffs that the difficulties with service had continued after the trial scheduling court appearance.

Issues

1. Were the defendants properly served with the materials for the Summary Judgment?
2. Are the plaintiffs entitled to summary judgment pursuant to Rule 20?
3. If the plaintiffs are entitled to summary judgment then what, if any, damages are the plaintiffs entitled to?

Discussion and Analysis

Issue 1 - Service

[11] As noted above, the defendants were required to supply contact information which could be used to effect service. A handwritten document was filed with the court by the defendants containing their address and telephone information. Exhibits 1 through 4 on the motion detail the efforts made by counsel for the plaintiffs to effect service of the motion materials on this matter. They include text messages sent to the defendant, Kheeran Singh, at the number supplied by the defendants on the note dated December 20th sent by counsel for the plaintiff on January 4th, January 14th, 2019. Further text messages were sent to the defendants on April 26th and April 30th, 2019 which make reference to attempts made by the plaintiff's process server to serve the defendants with documents at 10450 McVeen Drive, Brampton, Ontario being the address set out in the document filed by the defendants with the court. The process server could not get an answer on either attendance.

[12] On April 26th, the plaintiff sent a text to the defendants advising that there was a Motion Record prepared, that attempts had been made by the plaintiff's process server to serve those documents at both addresses supplied by the defendants and advising the defendants as well that the materials were available for pick up at plaintiff's counsel's office.

[13] Exhibit 4 details exchange of e-mails as between plaintiff's counsel and the defendants commencing November 5th wherein plaintiff's counsel confirmed for the defendants the existence of the order of de Sa, J pursuant to the provisions of Rule 37.16 and advising the defendants of the plaintiffs intention to bring a Motion for Summary Judgment pursuant to Rule 20. Exhibit 4 also includes a lengthy e-mail from the defendant, Kheeran Singh, dated November 5th at 6:29 p.m. wherein he acknowledges receipt of the e-mail from Mr. Dhillon. On November 6th at 1:14 p.m., Mr. Dhillon forwarded an e-mail to the defendants requesting their consent to the Summary Judgment Motion. A response was received from the defendants to that e-mail as well which was somewhat lengthy. In the course of that e-mail the defendants advised the plaintiff's counsel as follows: "With respect to trying to sue me and my mom, I personally think you are not trying hard enough or putting enough emphasis in your effort."

[14] Having reviewed the contents of Exhibits 1 through 4 thoroughly, I am satisfied that the plaintiff expended all reasonable and practical efforts to effect service on the defendants in accordance with the provisions of the order of de Sa, J herein dated November 2nd, 2018. Given the responses to the e-mails made by the defendants I am also satisfied that they were aware that the matter was to be heard and that their interests would be affected.

Issue 2 - Are the Plaintiff's Entitled to Summary Judgment Under Rule 20

[15] Rule 20 of the Rules of Civil Procedure, R.R.O. 1990 Reg. 194, outlines when a court may grant summary judgment. In the case of Hyrniak v. Mauldin, 2014 SCC 7, [2014] 1 SCR 87, the Supreme Court of Canada held at paragraph 23 that the "civil justice system is premised upon the value that process of adjudication must be fair and just". At paragraphs 27 and 28 the court further held as follows:

There is growing support for alternative adjudication of disputes and a developing consensus that the traditional balance struck by extensive pre-trial processes and the conventional trial no longer reflects the modern reality and needs to be re-adjusted. A proper balance requires simplified and proportionate procedures for adjudication, and impacts the role of counsel and judges. This balance must recognize that a process can be fair and just, without the expense and delay of a trial, and that alternative models of adjudication are no less legitimate than the conventional trial.

This requires a shift in culture. The principal goal remains the same: a fair process that results in a just adjudication of disputes. A fair and just process must permit a judge to find the facts necessary to resolve the dispute and to apply the relevant legal principles to the facts as found. However, that process is illusory unless it is also accessible — proportionate, timely and affordable. The proportionality principle means that the best forum for resolving a dispute is not always that with the most painstaking procedure.

[16] At paragraph 49, Karakatsanis, J held 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.

[17] At paragraph 57, the court held that,

On a summary judgment motion, the evidence need not be equivalent to that at trial, but must be such that the judge is confident that she can fairly resolve the dispute. A documentary record, particularly when supplemented by the new fact- finding tools, including ordering oral testimony, is often sufficient to resolve material issues fairly and justly. The powers provided in Rules 20.04(2.1) and (2.2) can provide an equally valid, if less extensive, manner of fact finding.

[18] The court, in Hyrniak, went on to develop a "road map/approach" to the Motion for Summary Judgment and held as follows as paragraph 66,

On a 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.

[19] There can be no doubt that it is in the interest of justice and to all parties to a dispute that the matter be resolved on the most timely, cost effective basis which the summary judgment process can provide. That said, any process that does not give the presiding judge confidence in his or her conclusions can never be the appropriate or indeed proportionate way to resolve a dispute.

[20] In my view, the focus should be on whether or not a trial is required, as opposed to what kind of evidence might conceivably be introduced at trial. In other words, is the evidence before me such that I can be confident that I can decide the matter fairly and justly?

[21] In a Motion for Summary Judgment, the motion is on the moving party to establish a prima facie case showing there is no genuine issue for a trial. The onus then shifts to the responding party to show that there is a genuine issue for trial. In doing so, the responding party must, in the judicial vernacular, "put their best foot forward" or "bid trump". The responding party cannot simply assert that there is further evidence to be heard at trial.

[22] In seeking to meet the onus to establish a prima facie case for summary judgment, the plaintiffs have prepared and filed voluminous materials, including the Affidavit of Surinder Kumar. Ms. Kumar's affidavit outlines in considerable detail the history of this particular transaction, and in particular, the process of negotiating the Agreement of Purchase and Sale and the subsequent amendment to the Agreement of Purchase and Sale. The court heard viva voce evidence from Ms. Sudha Patel who was present at the time that the Agreement of Purchase and Sale was entered into by the parties and who was able to provide her impressions of what happened on the date in question. Ms. Patel was asked by counsel for the plaintiffs about the demeanour of the defendants when they signed the Agreement of Purchase and Sale. This question appeared to be predicated on the fact that the defendants in their materials in the companion action alleged that they were under the influence of prescription drugs, notably Tylenol 3, at the time, and were therefore impaired to the degree that they were unable to understand what they were signing. Ms. Patel indicated that she noticed no signs of impairment on the part of the defendant and that when she engaged them in conversation they were all chatting "happily". The defendants expressed their pleasure at the prospect of selling their property to people such as the plaintiffs. Other than the bald assertions in their pleadings I have no evidence from the defendants in support of their suggestion that they were impaired at the time. I note, as well, the Agreement of Purchase and Sale was subsequently amended on the consent of all parties some days after the original agreement was signed. That being the case, I accept the evidence of Ms. Patel in its entirety and find that there is no basis for any suggestion that the defendants were under the influence of drugs and were therefore unable to appreciate the nature of the document that they were signing.

[23] I note with interest, as well, that the defendants retained a solicitor to assist them in closing the transaction, a process that took almost six weeks. There is no evidence before the court that at any time during the six weeks between the execution of the Agreement of Purchase and Sale and the original closing date of the transaction that the defendants said or did anything inconsistent with an intention to do anything other than close the deal. Indeed, no explanation was ever proffered by the defendants as to why they instructed their solicitor not to close the deal. That is certainly their right but they must live with the consequences of that decision.

[24] I find that the Agreement of Purchase and Sale signed by the parties is valid. It was prepared by the defendant's agent at their behest and was signed by all parties' before witnesses. The same is true of the subsequent amendment of the Agreement of Purchase and Sale. One would think that a party to an Agreement of Purchase and Sale who felt they were intoxicated at the time of signing the Agreement of Purchase and Sale and were therefore unable to understand the content and significance of the document they were signing would have raised those concerns with their solicitor prior to the closing date. There can be no question about the fact that a valid Agreement of Purchase and Sale signed before witnesses is a valid and binding contract between the parties. The defendants ultimately decided not to close the transaction for reasons known only to themselves. In the absence of any evidence as to why they decided not to close the transaction, I am left with no choice but to find that the defendants breached their contract with the plaintiffs by doing so.

[25] This case revolves around whether or not the Agreement of Purchase and Sale was valid and whether or not the defendant has breached that contract. I am confident that on the evidence before me I can fairly resolve the dispute without the necessity of proceeding to trial. In fact, given the valid agreement and the subsequent breach of contract by the defendants, I am satisfied that there is no genuine requiring a trial so I need not go on to a consideration of use of the new powers under Rule 20.04(2.1) (2.2). I find that the plaintiffs are entitled to summary judgment herein.

Damages

[26] The plaintiffs have filed a schedule of damages which contains the following items.

1. Legal fees for arranging the private mortgage funds for purchase of the property, including disbursements and HST totaling $1,938.93.

2. Damages for failure to close purchase transaction as per the Agreement of Purchase and Sale dated April 7th, 2018. Purchase price $850,000. Appraised value as of May 7th $940,000 to $975,000. Average of the appraisal $957,500 minus $850,000 for the purchase price equals damages of $107,500.

3. Inspection report dated April 4th, 2018 totaling $395.20.

4. Appraisal report dated May 7th, 2019 totaling $495.00

5. Interest on the deposition amount held with CMS Realty totaling $25,000 x 2.75 per cent x 360 days ÷ 365 days totaling $676.08.

6. Interest on land transfer tax paid pursuant to the registered Caution totaling $26,950 x 2.75 per cent x 360 days totaling $730.80.

Total damages sought $111,737.03.

[28] It is the position of the plaintiffs that they are entitled to damages as a result of the defendants breach of contract for failing to close the transaction and that the damage award should equate to the difference in the value of the property as between the closing date of May 18th, 2018 when the parties were apparently in agreement that it was worth $850,000 and the approximate date of the hearing of this motion when a "so-called drive by" appraisal obtained by the plaintiffs established a range of value for the property of between $940,000 and $975,000.

[29] The appraisal filed herein was dated May 7th, 2019. Exhibit 2 shows that the plaintiff's counsel directed a request to the defendants on May 6th, 2019 requesting access to the premises by an appraiser for purposes of preparing a report. The text also indicated that in the absence of the defendant's consent to allow access to the premises, then the plaintiffs would proceed by way of drive by appraisal which, in fact, is what ultimately took place. I note that the appraisal does include photographs of the interior of the home which were apparently obtained by the appraiser from the original MLS listing. It also contains values for three comparable properties. The appraisal also contains the following proviso ; "Drive by appraisals establish an estimated value and is used primarily for informational purposes rather than determining a properties specific appraisal value. Some of the home features, noted above, are as per MLS or assumptions as per market forces. The comparable sales are all located in the subject neighborhood and are of similar features and situated on similar lots. As the property appears to be of average condition, a range of values is selected as an estimated market value."

[30] The plaintiff's position on damages is that they are essentially owed these damages as the failure of the defendants to complete the transaction caused a situation wherein the plaintiffs are said to have suffered a "loss of profit". This concept is considered in Anger & Honsberger Law of Real Property, 3rd Edition. At Part VII, Chapter 23, §23:30.30(c)(ii) Loss of Bargain.

"As noted, the purpose of a damage award for breach of contract is to put the innocent party into the position, or as close thereto as possible, as they would have been had the contract been completed. In the context of a real estate transaction, it is generally accepted that the appropriate measure of damages for loss of bargain is the difference between the contract price and the market value of the land determined at some subsequent date. One problem is the very practical question of time; inevitably the date the question is considered, i.e. trial, is well after the date set for completion, i.e., the closing date of the contract. Since the injured party cannot be restored to precisely the same position, the court must best approximate, through its award, that position. The most difficult question is what is the appropriate date when the market value of the property should be determined."

"To conclude, it can be said that increasingly, damages are seen as the normal remedy in land transactions. It has been stated that in general the vendor should only rarely be entitled to a claim of specific performance. In [Semelhago v. Paramadevan, (1996) CarswellOnt 2737], the Supreme Court of Canada indicated that specific performance is a remedy that should only be available to purchasers where damages would be an inadequate remedy in the circumstances. Furthermore, when viewed as a whole, the jurisprudence indicates that the courts are developing a flexible approach in terms of the date to be used in calculating damages. While the normal date for assessment is the date of closing, the objective is clearly to put the innocent party in the position they would have been in but for the breach of contract."

[31] It is common knowledge that at this particular point in time the Toronto area real estate market is booming. Large increases in the value of properties in short periods of time are common, indeed expected. But for the actions of the defendants in failing to close the transaction herein, the plaintiffs would now be in possession of a property that was worth some $90,000 to $125,000 more than the parties agreed upon value on May 18th, 2018, the date scheduled for the closing of the transaction.

[32] I find that the plaintiffs have indeed suffered a loss of bargain. The plaintiffs have taken steps to supply the court with the best evidence available regarding the value of the premises. Clearly, had the defendants acceded to the plan as requested for access to the property for appraisal purposes, there would be a much more accurate appraised value of the property? Nevertheless, I accept the range of value provided by the appraisal report and I am prepared to award damages to the plaintiff in the middle point of that range; that being the sum of $107,500 as claimed in their schedule of damages. I am also prepared to include the other amounts included in their schedule as each of those amounts pertains to the transaction in question which are due to the defendants breach of the agreement constitute expenses incurred by the plaintiffs for no reason. Damages therefore are awarded to the plaintiffs in the full amount claimed by them in their schedule of damages being $111,737.03. The plaintiffs will also have post-judgment interest on that amount in accordance with the provisions of the Courts of Justice Act. I make no order for pre-judgment interest as the value of the damages involved crystalized virtually on the eve of the hearing of the motion.

[33] The plaintiff shall also have their costs in accordance with the various bills of costs filed, being the sum of $1,937.44 for legal fees associated with the failed purchase transaction, the sum of $1,749.74 arising from their motion to strike the defendant's pleadings, the further sum of $750.80 for an appearance at the Central East Trial Scheduling Court December 20th, 2018 and their costs for preparation for an attendance on this Motion for Summary Judgment on May 13th, 2019 in the amount of $9,897.50 for a total of $14,335.48.

Smith J. Date: June 18, 2019