Court File and Parties

COURT FILE NO.: CV-18-594288 DATE: 20190530 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Anthony John Ingarra, Applicant AND: 301099 Ontario Limited O/A Previn Homes Limited, Respondent

BEFORE: Kimmel J.

COUNSEL: Nicholas Cartel, for the Applicant (“Purchaser”) Herschel Gold, for the Respondent (“Vendor”)

HEARD: May 27, 2019

Endorsement

[1] This application involves the interpretation of an agreement of purchase and sale between the parties dated March 26, 2016 (the “APS”), including a Tarion Addendum appended as Schedule “T” thereto (the “Tarion Addendum”), and the determination of the rights of the parties thereunder after the purchase transaction that failed to close on January 11, 2018.

[2] In addition to declaratory relief (concerning which party was in breach of the APS), the applicant was also seeking an order requiring the respondent to complete the purchase and sale transaction pursuant to the APS. At the outset of the hearing, the court was advised that the subject property has, in the meantime, been sold and that sale transaction (to a third party) closed ten days earlier.

[3] The respondent raised concerns about the appropriateness of specific performance as a remedy for a failed transaction involving a residential property in a sub-division where there is some indication that the applicant purchases residential properties as investments and not for the long term. The court noted at the outset that the application record did not appear to adequately address the requirements for a remedy of specific performance. The parties agreed that this aspect of the relief sought in the application should not be decided at this time. The implications for the third party purchaser will need to be considered and accounted for if the Purchaser persists in seeking that remedy.

[4] To the extent that the court’s decision on the aspects of the application that were argued keeps the prospect of some remedy (whether in damages or specific performance) open to the Purchaser, counsel for the parties agreed and advised the court at the outset that any such remedies as may remain open and available to the Purchaser will be pursued in a further action and need not be decided at this time. The court was also advised that this same arrangement applies to any recovery that the Purchaser may seek of the deposit monies paid that the Vendor continues to hold. I note that the amounts at issue may be conducive to an action under the Simplified Procedure of Rule 76. The Purchaser should be mindful of any limitation periods that have started to run in respect of remedies that may be sought in future proceedings.

[5] The parties were also in agreement that the arbitration provision in section 15 of the Tarion Addendum does not apply to this dispute because an aspect of what the court is being asked to determine involves a termination of the APS as a result of an alleged breach of contract by the Purchaser (which falls outside of a section 11 termination, whereas section 15 only applies to disputes relating to terminations under section 11). [1]

Summary of Disposition

[6] For the reasons that follow, I find that the Vendor breached the APS (and, conversely, that the Purchaser did not breach the APS). Capitalized terms not defined herein have the meanings ascribed to them in the APS and the Tarion Addendum.

[7] The parties agreed to a Firm Closing Date of January 11, 2018, however the Vendor was not in a position to close that day because the Vendor was not able to deliver to the Purchaser on or prior to that date an Occupancy Permit for the home, or written confirmation by the Vendor of fulfillment of the conditions of occupancy under the Building Code (in accordance with section 9 of the Tarion Addendum). There was no amendment to extend the Firm Closing Date beyond January 11, 2018 that met the formalities and requirements of section 4 of the Tarion Addendum, nor did the Vendor set a Delayed Closing Date in compliance with section 3 of the Tarion Addendum. As provided for in section 3, the Delayed Closing Date was thus deemed to be 90 days after January 11, 2018. However, on January 17, 2018 the Vendor purported to declare the APS to be at an end for alleged breaches by the Purchaser that occurred after January 11, 2018. This constituted a breach of the APS by the Vendor.

[8] After the Occupancy Permit was delivered by the Vendor, counsel for the parties attempted to preserve the January 11, 2018 Firm Closing Date that had been set but missed by advancing it to January 15 and then to January 17, 2018 with adjustments to remain as at January 11, 2018 (the “Interim Closing Dates”). However, those extensions were not formalized as amendments to the APS in accordance with section 4 of the Tarion Addendum and were voidable at the option of the Purchaser (which is the effect of having commenced this application on March 20, 2018). The attempts by the real estate lawyers to close on the Interim Closing Dates following the issuance of the Occupancy Permit on January 12, 2018 do not derogate from or deprive the Purchaser of the protections afforded under the Tarion Addendum, nor do they constitute a waiver of the Purchaser’s right to insist upon the strict application of the provisions of the Tarion Addendum in this case. [2]

Positions of the Parties

The Applicant’s Position

[9] The applicant contends that having formally agreed to the Firm Closing Date of January 11, 2018, the respondent’s failure to have an Occupancy Permit on January 11, 2018, or to formally amend (by agreement) or unilaterally delay (on proper notice) the Firm Closing Date prior to January 11, 2018, meant that the Delayed Closing Date was deemed to be 90 days after January 11, 2018. The applicant maintains that it did not waive its rights under the APS and Tarion Addendum by virtue of the efforts of its counsel to close earlier (within a reasonable time after receiving the Occupancy Permit, on the Interim Closing Dates), and the respondent was not entitled to declare the APS to be at an end on January 17, 2018.

[10] The applicant contends that it was not obligated to close on either of the Interim Closing Dates that were set in mid-January 2018 after the Occupancy Permit was delivered and that, while it attempted to get its financing in place in this short timeframe, it was not in breach of the APS when it was unable to do so and close on January 17, 2018. The applicant relies on the importance of an Occupancy Permit, the need for strict construction of the Tarion Addendum and the importance of the protection for purchasers that it provides for. The applicant does not rely on a financing condition but only upon the commercial reality that both parties were aware of, that some reasonable period of time would be required after the Occupancy Permit was delivered for the Purchaser to be in funds, and that any earlier Interim Closing Date that the parties would try to meet in advance of the deemed Delayed Closing Date would have to take that into account (or the Purchaser could revert to its strict contractual rights).

The Respondent’s Position

[11] In reliance on paragraph 11 of the APS, the respondent contends that the house was deemed to be completed when all interior work had been substantially completed, notwithstanding that exterior work remained to be done. However, the respondent acknowledges that this paragraph of the APS incorporates the requirement that the Vendor deliver evidence to the Purchaser that the house was ready for occupancy prior to Closing as described at paragraph 8(a) [sic] [3] of the Tarion Addendum.

[12] The respondent also contends that at the time that the Occupancy Permit was delivered on January 12, 2018 the applicant had an appraisal of the home for a value in excess of the minimum requirements of its lender, and the applicant requested and ultimately the parties agreed, through their counsel, to the Interim Closing Dates in order to facilitate the advance of funds (even though the availability of the applicant’s financing was no longer a condition of the APS).

[13] The respondent’s contention is that the parties’ agreement to the Interim Closing Dates took them outside of the Tarion Addendum and the strict application of the provisions thereunder relating to the setting, changing or delay of Critical Dates.

[14] On January 17, 2018 when the applicant was still not in funds and requested a further extension of the second Interim Closing Date the respondent hardened its position and did not agree to a further extension, in part because of skepticism about the ability of the Purchaser to ever close and in part because of concerns about the Purchaser’s stated intentions with respect to his occupation of the home, having learned of his interest in re-selling the property after a “coming for sale” sign was placed on the lawn. The respondent maintains it did not have any obligation to agree to a further extension of the closing and had not waived the time of the essence or its rights arising from the inability of the Purchaser to close on the Interim Closing Dates.

Relevant Contractual Provisions and Factual Matrix

[15] The APS was signed on March 26, 2016. The Closing Date in the APS was to be determined with reference to Schedule “T”, the Tarion Addendum.

[16] Paragraph 11 of the APS states that:

For purposes of Closing, the Dwelling shall be deemed to be completed when all interior work has been substantially completed so that the Dwelling reasonably may be occupied, notwithstanding that there may remain exterior work to be completed including, but not limited to, painting, driveway, grading, sodding and landscaping. There shall be no holdback or deduction on Closing for uncompleted work. The requirement that the Vendor deliver evidence to the Purchaser that the Dwelling is ready for occupancy prior to Closing is described in Paragraph 8(a) [sic] of the Addendum.

[17] The Purchaser’s financing condition contained in Schedule “H” of the APS was waived in writing by the Purchaser on April 4, 2016.

[18] The APS directs the parties to refer to the Tarion Addendum for the Closing Details and the Closing Date.

[19] The Tarion Addendum sets out various Critical Dates which both the Vendor and the Purchaser were required to sign off on. These are highlighted in bold below:

a. The First Tentative Closing Date was set for June 13, 2017.

b. The Tarion Addendum allowed the Vendor to unilaterally give notice setting a Second Tentative Closing Date which was given by a letter dated February 28, 2017 that changed the Closing Date from June 13 to October 11, 2017.

c. The Tarion Addendum allowed the Vendor to thereafter unilaterally give notice setting a Firm Closing Date (if it did not want the Firm Closing Date to occur on the Second Tentative Closing Date). In lieu of the Vendor unilaterally setting the Firm Closing Date, the parties entered into a formal signed amendment to the APS dated August 3, 2017 which, inter alia, replaced the October 11, 2017 Second Tentative Closing Date with the Closing Date of January 11, 2018 (the “Amending Agreement”). January 11, 2018 became the Firm Closing Date.

d. Once the Second Tentative Closing Date had been set, October 11, 2018 was the latest Outside Closing Date.

[20] The Amending Agreement substantially and substantively complied (to the extent applicable) with the specified requirements of section 4 of the Tarion Addendum (Changing Critical Dates – By Mutual Agreement), which provides that:

a. This Addendum sets out a framework for setting, extending and/or accelerating Critical Dates, which cannot be altered contractually except as set out in this section 4. Any amendment not in accordance with this section is voidable at the option of the Purchaser.

b. The Vendor and Purchaser may at any time, after signing the Purchase Agreement, mutually agree in writing to accelerate or extend any of the Critical Dates. [Any amendment which accelerates or extends any of the Critical Dates must include various specified provisions].

c. The Vendor is permitted to include a provision in the Purchase Agreement allowing the Vendor a one-time unilateral right to extend a Firm Closing Date or Delayed Closing Date, as the case may be, for one (1) Business Day… [4] ; and

d. The Vendor and Purchaser may agree in the Purchase Agreement to any unilateral extension or acceleration rights that are for the benefit of the Purchaser. [5]

[21] This Amending Agreement was aligned with section 2 of the Statement of Critical Dates that forms part of the Tarion Addendum, which specifies that the Purchaser is entitled to notice of any change in a Closing Date and that the Vendor only has two opportunities to delay the Closing without the Purchaser’s consent (within the prescribed notice periods under section 1, to set a Second Tentative Closing Date and then to set a Firm Closing Date). Under section 1 of the Statement of Critical Dates the Vendor was required to set a Firm Closing Date by giving proper written notice at least 90 days before the Second Tentative Closing Date (failing which, the Second Tentative Closing Date would have become the Firm Closing Date). Since the requisite 90 day notice was not provided by the Vendor, the Vendor was not able to unilaterally set the Firm Closing Date and the parties instead entered into a formal Amending Agreement by which that Firm Closing Date was agreed to be January 11, 2018.

[22] On December 8, 2017 the lawyer for the Vendor sent a letter to the lawyer for the Purchaser dealing with various matters in anticipation of the January 11, 2018 Firm Closing Date. In that letter, the Vendor’s lawyer advised that: “A copy of the Occupancy Certificate will be faxed to you as soon as it is available, which will in most cases not be prior to the closing date.”

[23] There were a series of emails between the Purchaser and the Vendor’s representative after this letter, between December 14 and 22, 2017, dealing with the logistics of the Purchaser’s appraisal for its lender and the need for it to be conducted a minimum of five days before the Firm Closing Date. This correspondence reflects the efforts made to arrange for the appraiser to attend after the bricklayers were expected to have completed their work, which had been delayed due to the weather.

[24] Section 3 of the Tarion Addendum provides that:

a. if the Vendor cannot close on the Firm Closing Date and sections 4 (Changing Critical Dates - By Mutual Agreement) and 5 (Extending Dates – Due to Unavoidable Delay) do not apply, the Vendor shall select and give written notice to the Purchaser of a Delayed Closing Date in accordance with this section, and delayed closing compensation is payable in accordance with section 7.

b. the Delayed Closing Date may be any Business Day after the date the Purchaser receives written notice of the Delayed Closing Date but not later than the Outside Closing Date.

c. the Vendor shall give written notice to the Purchaser of the Delayed Closing Date as soon as the Vendor knows that it will be unable to Close on the Firm Closing Date, and in any event at least 10 days before the Firm Closing Date, failing which delayed closing compensation is payable from the date that is 10 days before the Firm Closing Date, in accordance with paragraph 7(c). If notice of a new Delayed Closing Date is not given by the Vendor before the Firm Closing Date, then the new Delayed Closing Date shall be deemed to be the date which is 90 days after the Firm Closing Date.

d. after the Delayed Closing Date is set, if the Vendor cannot close on the Delayed Closing Date, the Vendor shall select and give written notice to the Purchaser of a new Delayed Closing Date, unless the delay arises due to Unavoidable Delay under section 5 or is mutually agreed upon under section 4, in which case the requirements of those sections must be met. Paragraphs (b) and (c) above apply with respect to the setting of the new Delayed Closing Date.

e. nothing in this section affects the right of the Purchaser or Vendor to terminate the Purchase Agreement on the bases set out in section 10.

[25] When the Purchaser’s appraiser did attend on January 8, 2018 it was noted that the home could not be appraised as being 100 percent complete because the exterior bricks still had to be laid and the soffits/fascia still had to be installed.

[26] The Purchaser requested the Occupancy Permit from the Vendor on January 8, 2018.

[27] Section 9 of the Tarion Addendum (Ontario Building Code - Conditions of Closing) provides as follows:

a. On or before Closing, the Vendor shall deliver to the Purchaser:

i. an Occupancy Permit (as defined in paragraph(d)) for the home; or

ii. if an Occupancy Permit is not required under the Building Code, a signed written confirmation by the Vendor that all conditions of occupancy under the Building Code have been fulfilled and occupancy is permitted under the Building Code.

b. …

c. If the Vendor cannot satisfy the requirements of paragraph (a) … the Vendor shall set a Delayed Closing Date (or new Delayed Closing Date) on a date that the Vendor reasonably expects to have satisfied the requirements of paragraph (a) … In setting the Delayed Closing Date (or new Delayed Closing Date), the Vendor shall comply with the requirements of section 3, and delayed closing compensation shall be payable in accordance with section 7.…

[28] The Vendor did not provide any notice to the Purchaser of a new Delayed Closing Date at any time prior to January 11, 2018.

[29] The Purchaser advised on January 11, 2018 that an extension of the closing was required until the exterior of the property was completed.

[30] The Occupancy Permit was issued on Friday January 12, 2018 and a copy was provided to the lawyer for the Purchaser on that date.

[31] On January 12, 2018 there was a verbal agreement among the lawyers for the parties to extend the closing to the 15th day of January, 2018 with adjustments remaining as of the 11th day of January, 2018.

[32] On January 15, 2018 the Purchaser’s lawyer requested by letter a further extension of the closing to allow the lender to complete its appraisal, and in a responding fax the lawyer for the Vendor agreed to extend the closing to no later than Wednesday January 17, 2018 with adjustments remaining as at January 11, 2018.

[33] When the Purchaser’s lawyer requested by fax dated January 17, 2018 a further extension of the Closing to January 18, 2018 it was declined. In responding correspondence dated January 17, 2018, the lawyer for the Vendor also declared the Purchaser to be in breach of the APS, and advised that the Vendor considered the APS to be at an end and the deposit forfeited (unless a release was signed), and that the property would be re-listed for sale.

[34] Although not mentioned in the letter, the Vendor’s evidence is that part of the reason why it had hardened its position and declined to agree to this further extension is because it had found out that the Purchaser had put a “coming for sale” sign on the lawn which called into question the bona fides of the Purchaser’s declaration that he intended to move in and occupy the home.

[35] The Purchaser was ready, willing and able to close on January 18, 2018 and the Vendor was advised of such. Various further correspondence was exchanged between the lawyers, in which the Vendor maintained its position that the APS was at an end.

[36] Section 10 of the Tarion Addendum (Termination of the Purchase Agreement) sets out various termination scenarios. None of them expressly provide for the unilateral termination by the Vendor, although sub-paragraph (e) does preserve any right of termination that either the Purchaser or the Vendor may have at law or in equity on the basis of, for example, frustration of contract or fundamental breach of contract. The Purchaser’s termination rights included, under sub-paragraph (b), that:

If for any reason (other than breach of contract by the Purchaser) Closing has not occurred by the Outside Closing Date, then the Purchaser has 30 days to terminate the Purchase Agreement by written notice to the Vendor. If the Purchaser does not provide written notice of termination within such 30-day period then the Purchase Agreement shall continue to be binding on both parties and the Delayed Closing Date shall be the date set under paragraph 3(c), regardless of whether such date is beyond the Outside Closing Date.

[37] The Purchaser did not send a written notice terminating the APS. It commenced this application on March 20, 2018 by which it sought, among other things, to complete the purchase under the APS.

[38] The APS did not close. While this application was pending the home was sold to another purchaser.

[39] Section 13 of the Tarion Addendum (Addendum Prevails) provides that:

This Addendum forms part of the Purchase Agreement. The Vendor and the Purchaser agree that they shall not include any provision in the Purchase Agreement or any amendment to the Purchase Agreement or any other document (or indirectly do so through replacement of the Purchase Agreement) that derogates from, conflicts with or is inconsistent with the provisions of this Addendum, except where this Addendum expressly permits the parties to agree or consent to an alternative arrangement. The provisions of this Addendum prevail over any such provision.

Legal Framework

[40] The Tarion Addendum incorporated into the APS contains consumer protections for the Purchaser that are prescribed by legislation (the Ontario New Home Warranties Plan Act, R.S.O. 1990, c. O.31). The interpretation of its provisions must be purposive, having regard to the consumer protection objectives of the legislation. One of the objectives is to prevent vendors from insisting on contractually open-ended closing dates. Another objective is to impose notice requirements on the vendor. See Sirisena v. Oakdale Village Homes Inc., 2010 ONSC 2996, 100 R.P.R. (4th) 94, at paras. 11 and 45-53, affirmed, 2013 ONSC 1051, 30 R.P.R. (5th) 31 (Div. Ct.).

[41] The reach of the freedom of the parties to contract beyond what is contemplated by the Tarion Addendum is limited to the circumstances in which it is expressly contemplated they may “otherwise agree”: see Sirisena, at paras. 48-49. Even when they are permitted to “otherwise agree”, that will be subject to the scrutiny of the court if the implications of what they sign are not fully appreciated because of the operation of various other provisions of the standard form agreement: see Sirisena, at para. 59.

[42] The general approach to the interpretation of contracts may also apply to the interpretation of standardized purchase agreements: see Schneeberg v. Talon International Development Inc., 2011 ONCA 687, 343 D.L.R. (4th) 486, at paras. 38-41. However, the court must account for the statutory context in the application of these general principles.

[43] The statutorily prescribed contractual provisions are to be given a broad and liberal interpretation in light of their object and purpose: see Reddy v. 1945086 Ontario Inc., 2019 ONSC 2554, at paras. 20-30, citing Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633.

[44] The unavailability of the Occupancy Permit is a serious matter. If it is required (as it was in this case) then without it a purchaser cannot legally occupy or use the building: see Tarion Warranty Corporation v. Mikhael, 2015 ONCJ 556, at p. 7. Consistent with this, the Tarion Addendum prescribed very specifically in sections 9 and 3 what is to happen if the Occupancy Permit was not going to be available on the Firm Closing Date.

[45] The parties also rely on the Supreme Court of Canada’s often cited dictum that a party can only waive its rights under an agreement “where the evidence demonstrates that the party waiving had (1) a full knowledge of rights; and (2) an unequivocal and conscious intention to abandon them”: see Schneeberg, at para. 61, citing Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., 1994 SCC 100, [1994] 2 S.C.R. 490, at p. 500.

Analysis

[46] The decision in this case comes down to whether the agreement between the lawyers (made orally and through the exchange of faxes and emails) to extend the agreed upon Firm Closing Date to the Interim Closing Dates (with adjustments remaining as at January 11, 2018) superseded the operation and effect of the provisions of the Tarion Addendum. I find that it did not. Their agreement did not comply with the requirements prescribed by section 4 of the Tarion Addendum, which the parties were clearly familiar with having adhered to them when the Amending Agreement was entered into on August 3, 2017. Their failed efforts to retroactively preserve the January 11, 2018 Firm Closing Date through the agreement to Interim Closing Dates have no legal effect.

[47] Having regard to the provisions of the APS and Tarion Addendum and the factual matrix outlined above, when read together and in context, the proper interpretation of the relevant provisions is that the parties did not have the absolute contractual freedom to amend the Firm Closing Date and could only have agreed to a different Firm Closing Date if they adhered to the requirements of section 4 and entered into a formal amending agreement, which they did not do. The Tarion Addendum is very clear about the circumstances (prescribed under section 4) under which the parties could validly mutually agree to change any Critical Dates.

[48] Further, the Tarion Addendum clearly provides (in section 13) that it takes precedence and that the parties are not at liberty to agree to anything that derogates from, conflicts with or is inconsistent with it. These provisions are clearly designed to ensure that the Purchaser has an opportunity to consider its rights and the implications and effect of any amendment.

[49] The Vendor could have unilaterally delayed the Firm Closing Date as a result of the unavailability of the Occupancy Permit, but only upon providing the appropriate advance notice that it was not going to be able to meet the Firm Closing Date of January 11, 2018 that had been set. Having failed to do so, there was a new deemed Delayed Closing Date 90 days later, on April 11, 2018 by virtue of the operation of sections 9 and 3 of the Tarion Addendum. The Vendor’s position that the only effect of the Vendor’s failure to have an Occupancy Permit as at the Firm Closing Date was to give the Purchaser the right to terminate the APS is not consistent with the express language of the Tarion Addendum.

[50] The provisions for notice and requirements for formality of agreement must be given effect. Their objectives are demonstrated by the very circumstance that the parties now find themselves in here, which could have been avoided if those notice and formality requirements had been adhered to. The provision of 10 days’ notice by the Vendor of a Delayed Closing Date would have allowed the Purchaser a reasonable opportunity to get its financing appraisal done and to have the funds available to close, as opposed to being subjected to the whim of the Vendor for the incremental day by day extensions.

[51] A formal amending agreement to extend the Firm Closing Date would similarly have allowed the Purchaser an opportunity to reflect on the appropriate amount of time for the appraisal and funding from its lender. The provisions of the Tarion Addendum are clear that the parties could not contract out of its application and effect (in relation to the state of affairs that existed as at January 11, 2018) by their lawyers’ subsequent efforts to close on the Interim Closing Dates after the Occupancy Permit became available. The protections afforded to the Purchaser under the Tarion Addendum were not lost or waived by those efforts. The purported amendments to the Firm Closing Date that were reflected in the agreement between the lawyers were voidable by the Purchaser by virtue of section 4(a) of the Tarion Addendum and were voided by the Purchaser’s continued efforts to complete the APS notwithstanding the Vendor’s purported (and invalid) termination of it on January 17, 2018.

[52] The factual circumstances do not substantiate a finding that the Purchaser waived its rights to insist upon the deemed Delayed Closing Date that resulted from the unavailability of the Occupancy Permit on January 11, 2018. Conversely, the Vendor’s argument that it did not waive its rights to insist on a timely closing on the Second Interim Closing Date (and did not agree to further extend) when the Purchaser was not able to close is misplaced as it is predicated on an assumption that the lawyers’ agreement to extend to the Interim Closing Dates was valid and enforceable, which it was not.

[53] The above analysis also renders irrelevant the Vendor’s contention that the Purchaser’s inability to close due to the unavailability of funds from its lender is a risk that the Purchaser must bear. The Vendor relies upon the Purchaser’s waiver on April 4, 2016 of the financing condition to the APS. The Purchaser did waive this condition, thereby allowing the APS to become final (its condition having been removed). This does not mean that the Purchaser waived other rights that facilitated its ability to secure funding for Closing, such as the right to receive 10 days’ advance notice of a Delayed Closing Date due when the Occupancy Permit was not available and the right to a thoughtful and informed contract amendment process.

[54] The Vendor’s purported termination of the APS on January 17, 2018 was invalid. None of the permitted grounds for termination under section 10 of the Tarion Addendum were available to the Vendor (there was no agreement to terminate, at that time the Outside Closing Date had not occurred, no early termination conditions under section 6 had transpired and there were no independent rights of termination at law or in equity available to the Vendor, having regard to the contractual framework under which the parties were operating). The Vendor’s own delay in Closing is expressly stated in section 10(f) not to be a valid reason for termination.

[55] The Purchaser did not accept the Vendor’s repudiation of the APS and persisted with this application. The Purchaser could have terminated the APS after the new Delayed Closing Date of April 11, 2018 passed or after the Outside Closing Date of October 11, 2018 passed (pursuant to section 10(b) of the Tarion Addendum), but it did not do so.

Findings and Declarations

[56] I find and declare that the Vendor breached the APS by its repudiation of the APS on January 17, 2018. Its failure to have an Occupancy Permit and its resulting inability to close on January 11, 2018, without having given prior notice to the Purchaser of a Delayed Closing Date, meant that the Firm Closing Date ceased to be January 11, 2018 and was deemed to be extended to April 11, 2018.

[57] I further find and declare that the Purchaser did not breach the APS when it did not close on the Interim Closing Dates. The Interim Closing Dates were not set in accordance with the APS and Tarion Addendum and are thus invalid and cannot be relied upon or enforced by the respondent.

[58] The application is granted insofar as the above findings and declarations and the balance of it is dismissed on consent (to be addressed in a later proceeding if the Purchaser decides to pursue those remaining aspects).

Costs

[59] With the benefit of these reasons and their respective Costs Outlines (which counsel have confirmed were exchanged in advance of these reasons being released), I encourage the parties to try to reach an agreement on costs. If the parties are able to reach an agreement on costs they should advise the court of such by June 7, 2019, and provide a draft order. The parties may agree to defer the matter of costs to the determination of the Purchaser’s remedy, but since that is expected to be addressed in a separate proceeding, if the parties do not agree to its deferral I will decide the issue of the costs in respect of the matters that have been decided on this application.

[60] If no agreement is reached on costs, then the applicant may provide the court with brief written submissions on costs (not to exceed 3 pages double spaced) together with its costs outline by June 14, 2019, the respondent may provide written responding submissions on costs (not to exceed 3 pages double spaced) together with their costs outline by June 21, 2019. The applicant may provide a brief reply submission on costs (not to exceed 1.5 pages double spaced) by June 28, 2019. All costs submissions should be served on the opposing party and delivered to my attention at Judges’ Administration, Superior Court of Justice at 361 University Avenue (Room 106), Toronto, Ontario M5G 1T3. If no costs submissions are received by the court by June 28, 2019, then the costs will be deemed to have been settled.

Kimmel J. Date: May 30, 2019

Footnotes

[1] The Vendor additionally contends that the Tarion Addendum does not apply at all because of the parties’ agreement to extend the Interim Closing Dates and implied waiver of the Tarion Addendum (which would also take them outside of the arbitration provision). As discussed in the reasons that follow, this contention (that the parties’ attempts to move the Firm Closing Date to the Interim Closing Dates took them outside of the Tarion Addendum) is not accepted.

[2] The advice of the Vendor’s lawyer in December of 2017 that the Occupancy Permit might not be available until after the Closing did not relieve the Vendor of its obligations under section 9 of the Tarion Addendum, nor could it unilaterally deprive the Purchaser of its rights when the Occupancy Permit was not available on the Firm Closing Date.

[3] Both counsel confirmed during oral submissions that this is a typographical error and that it was intended to refer to section 9(a) of the Tarion Addendum.

[4] This provision was included at paragraph 37 of the APS but is not relevant to the issues to be determined on this Application.

[5] Although the Vendor tried to argue that the agreement to the Interim Closing Dates was for the benefit of the Purchaser, that agreement is not contained in the APS and this provision is not relevant to the issues to be determined on this Application.