Court File and Parties

Court File No.: 07-CV-336058PD3, 08-CV-352218PD3, CV-14-503147, CV-16-547786 Date: 2019-09-13 Ontario Superior Court of Justice

Court File No.: 07-CV-336058PD3

Between: Fram Elgin Mills 90 Inc. (Formerly Frambordeaux Developments Inc.), Plaintiff – and – Romandale Farms Limited, Jeffrey Kerbel, 2001251 Ontario Inc. and First Elgin Developments Inc., Defendants

Counsel: Robert Rueter, Sara J. Erskine, Janet Lunau, for the Plaintiff Sarit E. Batner, Kosta Kalogiros, Avi Bourassa, for the Defendant, Romandale Farms Limited Martin J. Henderson, Miranda Spence, for the Defendants, Jeffrey Kerbel, 2001251 Ontario Inc. and First Elgin Developments Inc.

Court File No.: 08-CV-352218PD3

Between: Fram 405 Construction Ltd. and Bordeaux Homes Inc., Plaintiffs – and – Romandale Farms Limited, 2001251 Ontario Inc., First Elgin Developments Inc. and Jeffrey Kerbel, Defendants

Counsel: Robert Rueter, Sara J. Erskine, Janet Lunau, for the Plaintiffs Sarit E. Batner, Kosta Kalogiros, Avi Bourassa, for the Defendant, Romandale Farms Limited Martin J. Henderson, Miranda Spence, for the Defendants, 2001251 Ontario Inc., First Elgin Developments Inc. and Jeffrey Kerbel

Court File No.: CV-14-503147

Between: Romandale Farms Limited, Plaintiff/Defendant by Counterclaim – and – 2001251 Ontario Inc., Defendant/Plaintiff by Counterclaim

Counsel: Sarit E. Batner, Kosta Kalogiros, Avi Bourassa, for the Plaintiff/Defendant by Counterclaim, Romandale Farms Limited Martin J. Henderson, Miranda Spence, for the Defendant/Plaintiff by Counterclaim, 2001251 Ontario Inc.

Court File No.: CV-16-547786

Between: 2001251 Ontario Inc., Plaintiff – and – Romandale Farms Limited, Defendant

Counsel: Martin J. Henderson, Miranda Spence, for the Plaintiff, 2001251 Ontario Inc. Sarit E. Batner, Kosta Kalogiros, Avi Bourassa, for the Defendant, Romandale Farms Limited

Heard: October 9-11, 15-17, 19, 22, 23, 25, 26 and December 13-14, 2018.

Reasons for Decision

Spies J.

OVERVIEW

[1] This litigation has been ongoing for 12 years. The disputes between the three main parties to this litigation has resulted in four actions that have arisen out of what is now a dispute by the Fram and Kerbel group of companies on the one hand and Romandale on the other hand, arising out of several agreements that various combinations of these parties entered into with respect to a parcel of approximately 280 acres of land comprised of two neighbouring, essentially vacant and undeveloped farmland properties known as the “McGrisken Farm” and the “Snider Farm” (collectively the “Lands”), located in the Elgin Mills and Warden Avenue area of Markham.

[2] For many decades Romandale Farms Limited (“Romandale”) was the sole owner of the Lands. As a result of the sales referred to below, Romandale currently owns a 90.25% undivided interest in the Lands. The Lands are near other lands Romandale owns on Elgin Mills, and other lands that surrounded the Cathedral of the Transfiguration in Markham (the “Cathedral”), including a 147-acre parcel of lands that has been developed around the Cathedral (the “Cathedraltown Lands”).

[3] The plaintiff in the 2007 Action, Fram Elgin Mills 90 Inc., formerly Frambordeaux Developments Inc. (“Fram”), is a part of a group of companies known as the Fram Building Group. Fram was incorporated for the development of the Lands. A 10% interest in Fram was originally owned Bordeaux Developments (Ontario) Inc. (“Bordeaux”) and the remaining 90% was owned by Fram 405 Development Inc. (“Fram 405”). In December 2010, Fram 405 acquired Bordeaux’s 10% interest and subsequently changed the corporate name to Fram Elgin Mills 90 Inc. Fram owns a 5% undivided interest in the Lands. The plaintiff in the 2008 Action, Fram 405 Construction Ltd. (“Fram Construction”) is part of the Fram Building Group and was to be the construction manager for the Lands.

[4] 2001251 Ontario Inc. (“2001251”) and First Elgin Mills Development Inc. (“First Elgin”) are part of the Kerbel Group of companies (collectively “Kerbel”). Since 2006, First Elgin has owned a 4.75% undivided interest in the Lands. Kerbel is in the business of developing land and building industrial, commercial and residential properties.

[5] In 2001, Romandale and Fram first conducted business with one another in relation to the Cathedraltown Lands. Romandale envisioned that the Cathedraltown Lands would be developed into a unique community surrounding the Cathedral, which would be known as “Cathedraltown”. Romandale is not a developer and so it needed the assistance of a developer and builder to carry this out. As a result, Romandale entered into agreements pursuant to which Bordeaux was to serve as the development manager for Cathedraltown and Fram was to carry out the construction of homes. Pursuant to their agreements, a Fram and Bordeaux controlled entity purchased 10% of the Cathedraltown Lands from Romandale.

[6] In 2003, Romandale needed to extract equity and approached Fram and Bordeaux to see if they would buy an additional 10% of the Cathedraltown Lands. The negotiations between the parties led to a sale by Romandale in May 2003 of a 5% undivided interest in the Lands to Frambordeaux, owned then by Fram and Bordeaux, and now by Fram alone. The plan was that Romandale and Fram would own the Lands and Bordeaux would manage the requirements for the development of the Lands, so they could be designated for residential use following Secondary Plan Approval (“SPA”), a stage of the municipal planning approvals process, Fram would then buy lots at market value and build homes and share the profits with Romandale.

[7] As a result, Romandale and Fram entered into Co-Owners Agreements (“COAs”), and Romandale, Fram and Bordeaux entered into Development Management Agreements (“DMAs”) and Construction Management Agreements (“CMAs”). There are two identical sets of these three agreements (collectively the “Land Agreements”); one set with respect to the Snider Farm and the other with respect to the McGrisken Farm. These agreements govern the co-ownership of the Lands by Romandale and Fram and provide that Bordeaux would manage the Lands for development and hopefully subdivision into lots. Then, once development and subdivision were completed, Fram and Bordeaux’s affiliates would buy lots from the Co-Owners at market value and build and sell homes at a profit (which would then be shared with the Co-Owners).

[8] In or around 2004, the relationship between Romandale, Fram, and Bordeaux faltered. Romandale submits that until trial there was no controversy between the parties that, as a factual matter, Romandale had terminated the DMAs as of February 2005, with Fram’s acknowledgement and agreement. That is now in dispute. In any event, as of February 2005, Bordeaux was no longer the Development Manager. In March 2005, Bordeaux commenced an action against Romandale and others (the “Bordeaux Action”), which was settled in October 2014 when Bordeaux discontinued its action.

[9] Since Romandale was not a land developer or builder and required equity, it began to make attempts to sell its interest in the Lands as well as opportunities to sell other lands owned by it and the Roman family. As a result, Romandale engaged in multiple discussions with Fram and Kerbel (then a prospective third-party purchaser) regarding a potential sale of some or all of Romandale’s interest in the Lands to one of them or some combination of both of them.

[10] Having not been able to make an agreement with Fram on August 29, 2005, Romandale entered into an agreement with 2001251 (“August 2005 Agreement”). This agreement provided for four transactions, which included what I will refer to separately as a Conditional Agreement with respect to the Lands, since that part of the August 2005 Agreement is what is in dispute. Although Kerbel wanted to immediately buy the Lands and Romandale wanted to immediately sell them, Romandale was restricted in its ability to sell its entire interest in the Lands unless it had Fram’s consent. As a result, the Conditional Agreement provided that the sale by Romandale of its entire interest in the Lands to 2001251 would occur once certain conditions were met as set out in the agreement. These conditions were agreed to with the intention that Romandale not breach its obligations to Fram under the COAs.

[11] On June 8, 2006, Romandale sold 5% of its 95% interest in the Lands to Kerbel on notice to Fram. There is no dispute about this transaction. In 2007, Romandale tried to sell a further 7% of its 90.25% interest in the Lands to Kerbel. This time, Fram objected. Fram complains that it was not properly notified by Romandale that it had entered into the August 2005 Agreement and that Romandale made misrepresentations with respect to this agreement and in particular, with respect to the Conditional Agreement. Once Fram had a copy of the entire agreement it took the position that by entering into this agreement, Romandale was in breach of the COAs and the CMAs.

[12] As a result, in 2007, Fram commenced litigation against Romandale and Kerbel (the “07 Action”). In its original claim, Fram claimed specific performance of the COAs pursuant to s. 6.02(d) and alleged that the August 2005 Agreement is void. Fram brought another action in 2008 (the “08 Action”) and made claims against Romandale and Kerbel for alleged breaches of the CMAs. Romandale initially alleged in its defence to both actions, as did Kerbel, that the August 2005 Agreement did not breach the terms of the COAs or the CMAs. Fram also moved for an injunction to restrain Romandale from making any further disposition of the Lands. This was granted by Forestell J. in July 2007.

[13] Fram also gave notice that it would seek to exercise its right to purchase Romandale’s interest in the Lands at a price equal to 95% of the fair market value (“FMV”) of the Lands pursuant to s. 6.02 of the COAs (the “Default Purchase Right”). Fram took certain steps to pursue this remedy but ultimately did not follow through. As a result, Romandale argues that Fram cannot rely on the Default Purchase Right in assessing its claim for damages.

[14] In 2009, the potential future development of the Lands took a turn for the worse both in terms of how the Snider Farm could be developed and when the two farms would receive SPA, although the degree of this “turn for the worse” is in issue. As a matter of fact, as a result of actions by the Ontario government, the two farms would no longer be on the same development timeline. The Snider Farm would not be developed until 2021-2031 and was projected for employment use, not residential, and the McGrisken Farm would not even be considered for development until 2031-2051. Romandale alleges that as a result, by June 2009, Kerbel no longer wanted to close the August 2005 Agreement as soon as possible and in particular, Kerbel no longer wanted to pay now if it could pay later.

[15] In December 2010, before the initial trial date of the 07 and 08 actions, Fram entered into an agreement with Kerbel (the “Settlement Agreement”) dated December 3, 2010. There is no dispute that Romandale did not consent to this agreement and in fact objected.

[16] As a result of the Settlement Agreement, Fram amended its pleading in the 07 Action to remove the request for a declaration that the August 2005 Agreement is void and its claim for contractual specific performance. Instead Fram now seeks “directions approving Minutes of Settlement”, a reference to the Settlement Agreement, and common law damages with respect to 50% of the Land, in lieu of specific performance. Fram removed all of its claims against Kerbel from its pleading.

[17] Soon after, Romandale sought to file an “Amended Statement of Defence, Crossclaim and Counterclaim”. Master Graham dismissed Romandale’s motion for leave to amend on December 21, 2012. An appeal of that decision was heard by Kiteley J. and dismissed on March 31, 2014.

[18] Romandale’s position is that in entering into the Settlement Agreement, Kerbel repudiated the August 2005 Agreement in that this agreement requires Kerbel to put off buying Romandale’s remaining interest in the Lands until after SPA, which now is likely decades away. As a result, Romandale alleges that this agreement is unenforceable against Romandale. These issues are the subject matter of the 2014 and 2016 actions to which Fram is not a party. Whether or not Kerbel repudiated the August 2005 Agreement is the central issue in the Kerbel action against Romandale.

[19] The conduct of the parties following the Settlement Agreement is in issue and in particular did Kerbel repudiate the agreement and if so did Romandale accept the repudiation.

[20] In November 2015, after Romandale appointed its current counsel, Romandale was granted leave by Dunphy J. to amend its Statement of Defence in the 07 Action. 2001251 was added to the action so that it would be bound by the result, and the injunction issued by Forestell J. was dissolved: see Fram Elgin Mills 90 Inc. v Romandale Farms Limited, 2015 ONSC 7308 (“Dunphy Endorsement”).

[21] Romandale did not amend its Statement of Defence in the 08 Action in the same manner. At various points in its written submissions, Fram refers to Romandale’s unamended Statement of Defence in the 08 Action, which pre-dated the Settlement Agreement, as evidence that Romandale is presently asserting (and thus admitting) that the August 2005 Agreement remains valid and enforceable (i.e., it has not been repudiated by Kerbel, or frustrated, etc.). This issue of an alleged admission in Romandale’s unamended 08 Action pleading was raised for the first time in Fram’s written submissions and given the serious issues I must deal with, in my view it is not worthy of a response. Fram cannot take advantage of any inadvertence on the part of Romandale in seeking the same amendment in the 08 Action as was granted in the 07 Action. Romandale sets out in its Reply Submissions the reasons why this is a frivolous argument, all of which I accept. There was no confusion on Fram’s part as to what Romandale’s position is. I agree with Romandale and to the extent it is necessary, I grant an order now permitting Romandale to make a formal amendment to its 08 Action pleading to bring it in line with it pleading in the 07 Action. There is no prejudice to Fram or Kerbel to do so, given the trial on the “real matters” in dispute has been concluded and was premised on Romandale’s position that the August 2005 Agreement is unenforceable.

[22] Just before this trial commenced, on August 20, 2018, Fram and Kerbel contracted to amend the Settlement Agreement providing that Fram would now consent to the August 2005 Agreement. Romandale alleges that this amendment does away with any claim Fram had against Romandale.

THE TRIAL

[23] These four actions were tried together before me in a single trial in accordance with directions made by Dunphy J., the case management judge, as they involve all of the current disputes between these three protagonists with respect to their interests in the Lands. In accordance with his direction the evidence in chief of the non-expert witnesses was delivered by way of affidavit. At trial, counsel for each witness asked limited questions in chief followed by cross-examination. I also heard from several experts. I received their reports and they gave their evidence viva voce. At the end of the evidence I directed that closing submissions be in writing, with some time reserved for my questions and brief oral submissions, which took place over two days. These directions assisted in ensuring that the trial was completed as efficiently as possible. I regret, however, in not putting a page limit on the written submissions. They were voluminous and since I was required to consider all of these submissions this was in part the reason for the delay in completing this decision.

ISSUES

[24] The pleadings of all parties have been amended and all of their positions have changed over time – in some cases, drastically. The issues at trial however were well defined and although there are several factual issues to be considered, the determination of the issues arising from these four actions will be decided largely by interpreting the language of the various agreements entered into between the parties, and where necessary, in the context of the factual matrix.

[25] Romandale is essentially responding to two claims: Fram’s claim for damages in lieu of specific performance, or common law damages in the alternative, for the value of 50% of the Lands, arising from alleged breaches by Romandale of the COAs and the CMAs. Romandale is also responding to Kerbel’s claim for specific performance of the August 2005 Agreement with Romandale or damages in lieu.

[26] The issues arising from the current state of the four actions are generally as follows:

1. Did Romandale breach the COAs when it entered into the August 2005 Agreement with 2001251/Kerbel? Fram no longer asserts that this agreement is void nor does it assert any claims against Kerbel. The breaches alleged are:

(i) The August 2005 Agreement is a “Disposition” of Romandale’s entire interest in the Lands contrary to ss. 5.03 and 5.10, constituting a default under s. 6.01(b) of the COAs;

(ii) failure to give Fram 20 days’ notice and a copy of the August 2005 Agreement contrary to s. 5.10, constituting a second default under s. 6.01(b) of the COAs; and

(iii) breach of the provisions of ss. 5.03, 5.04, and 5.10 of the COAs by reason of s. 5 of the August 2005 Agreement giving Kerbel control over decisions and actions related to development of the Lands.

Romandale takes the position that the Conditional Agreement was a conditional disposition and does not fall within the definition of a Disposition. As such Romandale argues that it had no obligation to disclose the August 2005 Agreement to Fram. Romandale also asserts that s. 5 of the August 2005 Agreement does not breach any of the provisions of the COAs.

A related issue is whether Romandale made misrepresentations regarding the existence of the August 2005 Agreement, resulting in further breaches of the COAs and of the organizing principle of good faith in the performance of a contract referred to by the Supreme Court of Canada in Bhasin v. Hrynew, 2014 SCC 71 at para. 65 (“principle of good faith”).

2. Is Fram entitled to damages in lieu of specific performance under the Default Purchase Right (s. 6.02 of the COAs)? Romandale alleges that:

(i) Fram never complied with the Default Purchase Right and so is not entitled to any remedy premised on that section;

(ii) The Default Purchase Right is inapplicable as there is no “continuing” default;

(iii) Fram is not entitled to specific performance because (a) the Lands are not unique, (b) damages would be an adequate remedy, and, (c) equity should not assist Fram; and

(iv) In any event, there are no damages in lieu as the value of the Lands did not increase in the relevant time period (which ended in 2010 when Fram made its election for damages in lieu).

3. Did Romandale breach the CMAs? Fram claims that Romandale’s entry into the August 2005 Agreement breached the CMAs as follows:

(i) s. 4.3(1)(a) in that it is tantamount to an attempt by Romandale to terminate the CMAs without cause;

(ii) s. 4.3(1)(c) in that it is tantamount to entering an agreement to sell their interest in the lots to a third party without requiring the third party to assume the co-owner’s obligations to the Construction Manager;

(iii) s. 10.6(1), which stipulates that the COAs shall be binding upon successors and permitted assigns; and

(iv) the principle of good faith.

Romandale’s position is that the August 2005 Agreement did not breach the CMAs.

4. Is Fram entitled to damages in lieu of specific performance?

5. Is Fram entitled to any common law damages in the 07 Action and 08 Action? Romandale alleges that Fram has failed to quantify any common law damages and has failed to prove mitigation despite an undertaking to do so.

6. Is the Conditional Agreement with respect to the Lands enforceable against Romandale? Fram seeks the approval of the Settlement Agreement, which, if granted, would bind Romandale to complete the August 2005 Agreement. Romandale asserts that the agreement is no longer enforceable against it because:

(i) The agreement has been repudiated by Kerbel when it entered into the Settlement Agreement and Romandale accepted the repudiation as of 2011;

(ii) The agreement has been frustrated; and

(iii) On Kerbel’s interpretation of the agreement, it is void for mistake.

Given the complexity of this issue, these sub-issues will also be discussed and determined:

• Does the Conditional Agreement permit Romandale to trigger the Buy-Sell provisions in the COAs before SPA?

• Did the August 2005 Agreement give rise to fiduciary duties owed by Kerbel to Romandale?

• Did Romandale receive substantially all of the benefit of the August 2005 Agreement?

• Did Romandale accept Kerbel’s repudiation?

• Is Romandale’s defence statute-barred?

• Is Romandale estopped from taking the position that the August 2005 Agreement is unenforceable?

• Do Romandale’s pleaded legal positions constitute judicial admissions?

• Can Fram and Kerbel rely on the doctrine of res judicata?

• Do the doctrines of election and approbation/reprobation apply?

7. Is Kerbel entitled to specific performance? Romandale alleges that it is not, because (a) the Lands are not unique, (b) damages would be an adequate remedy, (c) Kerbel’s inequitable conduct is a bar to equitable relief, and (d) Kerbel’s claim is time-barred.

8. Is Kerbel entitled to any damages? Kerbel has only claimed specific performance. It did not make a claim for damages in the alternative. Romandale’s position is that this is fatal to any claim for damages and that Kerbel should not be entitled to any damages.

KEY PROVISIONS OF THE COAs

[27] I will set out the precise language of those parts of the COAs that I must consider in order to decide these actions below, but in general terms, the key sections in dispute are as follows.

Control over major decisions

[28] The COAs established a Co-Owners Committee made up of a Romandale representative and a Fram representative (s. 3.01). The Co-Owners Committee, acting unanimously, only had control over “Major Decisions”, defined in s. 1.01(z) as any decision considered by the Co-Owners or the Co-Owners Committee with respect to financing or encumbering the Lands; annual business plans and budgets and any expenditures and lot sales inconsistent therewith; SPA and Draft Plan of Subdivision approvals; material changes to the Architectural Guidelines; disbursements from the bank account referred to in s. 4.05; and the commencement of any claims relating to the interest of both Co-Owners.

[29] Any decision, which was not a Major Decision, was to be made by Romandale, acting reasonably, or by the Manager (Bordeaux), if delegated to the Manager, (s. 3.09). Subject to any delegation of authority to the Manager, the Co‑Owners agreed that (i) any action with respect to the development, operation or sale of the Lands shall be subject to the approval of Romandale alone, acting reasonably, and (ii) without limiting the generality of the foregoing, that no act shall be undertaken, sum expended, decision made or obligation incurred in respect of any such matters, unless the same has been approved by the Co‑Owner Representative appointed by Romandale.

[30] As already stated, an important issue in this case, raised by Fram, is whether Romandale breached these provisions of the COAs by delegating control over the Lands to Kerbel when it entered into the August 2005 Agreement.

The Co-Owners’ rights of Disposition

[31] The COAs contain detailed rules governing the “Disposition” by the Co-Owners of all or part of their interest in the Lands.

[32] As I will come to, “Disposition” is defined in part in s. 1.01(s) as the “sale (including judicial sale), assignment, exchange, transfer, lease, mortgage, hypothecation, pledge, encumbrance, devise, bequeath or other disposition or agreement for such by a Co-Owner of the whole or part of its Co-Owner’s Interest […]”. Fram takes the position that the August 2005 Agreement was a “Disposition” of Romandale’s interest in the Lands and thus a breach of the COAs. The meaning of “Disposition” is one of the central issues that I must determine with respect to Fram’s claim.

[33] Under the COAs, the Co-Owners are prohibited from disposing of their interest in the Lands to third parties, except:

a) at any time with the non-selling Co-Owner’s consent, which consent may be unreasonably or arbitrarily withheld; (s. 5.03);

b) after SPA, on complying with the terms of a Right of First Refusal (s. 5.04) or Right of First Offer (s. 5.05); or,

c) in the case of Romandale, at any time, upon 20 days’ notice to Fram, so long as no more than 39% of Romandale’s interest in the Lands is being conveyed and so long as Fram has a right to tag along and sell all or part of its interest on the same terms, among other requirements (s. 5.10).

[34] It would also be possible for a Co-Owner to trigger the buy-sell right (the “Buy-Sell”) pursuant to s. 5.07 that is exercisable either after SPA or after the DMAs have been terminated, in an attempt to purchase the other party’s interest. If successful, the Co-Owner could then sell some or all the Lands to the third party.

[35] Section 5.03 provides for the consequences of a breach or attempted breach of the prohibition on dispositions and provides that “any attempt to do so shall be void” and sets out what other remedies the non-defaulting Co-Owner has.

Section 6.01 – Event of Default

[36] Section 6.01(b) defines an “Event of Default” to include a circumstance with respect to a Co-Owner “if it shall be in default in any material respect under any of the provisions of this Agreement and such default shall continue for a period of 30 days after written notice thereof has been given”.

[37] The threshold of materiality for Events of Default in the COAs is consistent with the exceptional remedies afforded to the non-defaulting party under the COAs, including the Default Purchase Right, which permits an immediate below-market buy-out of the majority owner’s entire interest in the Lands.

Section 6.02(d) – The Default Purchase Right

[38] Section 6.02(d) of the COAs also provides for a Disposition where a Co-Owner may trigger its right to purchase a defaulting Co-Owner’s interest in the Lands in the event of a material continuing Event of Default under the COAs, thereby bringing the development and construction venture to an end.

[39] If an Event of Default, as defined in the COAs, has occurred and is continuing, the Default Purchase Right allows the non-defaulting Co-Owner to determine FMV according to a process set out in ss. 6.03 and 6.04 and therefore the purchase price under the Default Purchase Right, as well as the timing of closing. Had this process been followed to completion by Fram it would have had to pay Romandale cash on closing.

[40] Another issue in this litigation is whether or not Fram can rely on this provision for the purpose of quantifying its damages, as Romandale argues that Fram did not follow through on all of the requirements for the appraisals.

THE EVIDENCE AND FINDING OF FACTS

(A) The principals

[41] I will make some findings of fact as I review the evidence and will explain why I have made those findings. I will consider now, generally, the credibility of the witnesses and in particular the principals. As I will explain, there are aspects of the evidence of Mr. Giannone and Mr. Kerbel that I do not accept. Their evidence was internally inconsistent in some respects and they took disingenuous positions at trial to support their theory of the case. Overall, I prefer the evidence of Mrs. Roman-Barber where it conflicts with theirs. That said most on my findings of fact are based on the documentary records and what in my view is most likely given those documents.

[42] Mrs. Helen Roman-Barber is an experienced business-person with a Master’s degree in Private International Law. She has been the principal of Romandale since 1988 and has also acted as the Chairperson of the Roman Corporation, a publicly-traded corporation.

[43] Romandale is not, and has never been, in the business of residential or commercial construction. Fram and Kerbel have submitted that Romandale has been involved in land development activities since at least 1990 with respect to the Cathedraltown lands but Mrs. Roman-Barber characterized her and Romandale’s experience as limited to instructing lawyers and planners towards gaining SPA for the Cathedraltown Lands, rather than development activities per se. However, as I will come to, Romandale has taken on a direct pre-servicing, planning and development role in respect of the Lands, which does give them some experience albeit with the assistance of planners.

[44] Mrs. Roman-Barber is the principal of other corporations involved in the land development business such as King David Inc., but there is no evidence of any specific developments with respect to these corporations. She has also been the Chairperson and a senior executive of several public and privately held companies since the 1980’s.

[45] Fram and Kerbel rely on a statement in a 2014 decision of the Court of Appeal in separate litigation: First Elgin Mills Developments Inc. v. Romandale Farms Limited, 2014 ONCA 573 (“2014 ONCA Decision”), where at para. 31, the court referred to Romandale as a “sophisticated and experienced land developer”. However, there is no evidence before me that this was based on any evidence provided by Romandale. I give this statement no weight in the circumstances and prefer instead the evidence of Mrs. Roman-Barber at this trial.

[46] Mr. Frank Giannone is the President of Fram, a position he has held since the 1990’s. Fram is a developer-builder with properties and projects throughout the GTA (stretching all the way to Collingwood, Ontario) and across North America (in Alberta, Texas, Michigan, and Florida). Fram is in the business of developing lands, building homes and high-rise condominiums, and operating retirement homes. Fram buys lands with a view to making profits from residential construction and sales. Fram prefers to develop lands quickly and in the short-term; it does not buy lands to hold for the future.

[47] Mr. Jeffrey Kerbel is the principal of the Kerbel group of companies; a position he has held for over 30 years. Kerbel is in the business of investing in, developing, and constructing on land and is also in the business of manufacturing and selling construction materials. Kerbel operates through hundreds of companies falling within the broader Kerbel umbrella, some of which are single purpose entities for specific investments or developments. Kerbel engages in a variety of development and construction ventures, including homes, commercial and industrial construction with a view to maximizing profits. Kerbel will endeavor to make the most of any of its landholdings depending on the ultimate land use permitted for such lands. Kerbel carries on its business throughout the GTA, Vancouver, and the United States.

(B) Termination of the DMAs

The positions of the parties prior to trial

[48] Whether or not the DMAs were terminated in February 2005 is important as it is Romandale’s position that the clear terms under the COAs permit the exercise of the Buy-Sell after termination of the DMAs and that as such the Buy-Sell could have been exercised as early as February 2005. It is Romandale’s position that until trial there was no controversy between the parties that, as a factual matter, Romandale terminated the DMAs with Bordeaux as of February 28, 2005, with Fram’s acknowledgement and agreement. Ms. Batner, Romandale’s counsel, advised this Court that when Dunphy J. heard her motion in November 2015, he expressly asked both counsel for Fram and Kerbel what their positions on termination of the DMAs was and they both acknowledged that they had been terminated in February 2005; neither raised any issue with the validity of the termination. This was noted by Dunphy J. in the Dunphy Endorsement at para. 28 as follows:

There is no dispute between the parties as to the fact of termination of the Development Management Agreements. Some litigation arose between the parties as to the consequences of termination, but Fram has not disputed the fact that the two Development Management Agreements in relation to the Land were terminated in February 2005.

[49] At trial, counsel for both Fram and Kerbel refused to admit the accuracy of this statement of fact by Dunphy J. I very much doubt that Dunphy J. misunderstood the position of Fram and Kerbel based on what counsel said on their behalf at that time given the detailed and thorough reasons he gave. I also am certain that Ms. Batner would not make such a representation to this Court if she was not clear on what their positions were. Before me it is significant that counsel did not clearly deny what Dunphy J. described as their position.

[50] In any event, for the reasons that follow, I accept, as submitted by Romandale, that both Fram and Kerbel changed their positions at trial without prior notice to Romandale. I believe that they did so in order to argue that the Buy-Sell in the COAs could only be exercised after SPA, which ties into how they submit the August 2005 Agreement should be interpreted. Even if I am wrong in reaching this conclusion, both Fram and Kerbel were on notice once Dunphy J.’s Endorsement was released and if they intended to take issue with the termination of the DMAs they should have done so expressly in advance of trial. They did not.

[51] For the first time at trial, Fram and Kerbel each attempted to advance new and never before pleaded or asserted positions to suggest that the Buy-Sell was not triggerable under the COAs after February 2005 – they are essentially challenging that there had been a termination of the DMAs. Throughout their closing submissions, both Fram and Kerbel also asserted that Romandale’s termination of the DMAs was without a proper basis: i.e. having regard to the terms of the DMAs, the Notice of Complaint and Termination, and Bordeaux having commenced litigation, all with a view to attempt to litigate the validity of the termination in this trial.

[52] Romandale expressly pleaded in para. 60 of its Further Amended Statement of Defence in the 07 Action that the DMAs were terminated in February 2005 at the request and with the consent of Fram and that as a result the Buy-Sell could be validly exercised as early as February 2005, without the need to wait for SPA. In its Reply, Fram stated at para. 3 that contrary to Romandale’s allegations in various paragraphs, including para. 60, that the parties contracted that the transfer of Romandale’s entire interest in the Lands would occur upon the exercise by Romandale of the Buy-Sell following SPA being obtained for the Lands unless Fram consented. Significantly Fram did not allege that there had been no lawful termination of the DMAs as pleaded by Romandale nor did it assert that the termination of Bordeaux as the Manager was somehow invalid and still had to be adjudicated on. Neither did Kerbel. Neither Fram nor Kerbel provided any evidence that their new arguments were ever pleaded or that Romandale was given notice of them in advance of the trial.

[53] In fact, the evidence of the parties filed in advance of the commencement of the trial confirms Romandale’s position that there was no issue about the termination of the DMAs until after the trial commenced. In his affidavit sworn on September 22, 2018 (“Giannone Affidavit”), and filed as part of his evidence in chief, Mr. Giannone, on behalf of Fram, deposed at para. 51 that “[i]n or about February 2005, Romandale terminated the two Development Management agreements with Bordeaux” and at para. 92 that Fram concurred with Romandale’s decision to terminate the DMAs [emphasis added] and that in signing the Acknowledgement (a document I will come to) Fram was acknowledging and agreeing with the facts set forth in the Notice of Termination. Mr. Giannone readily confirmed that the DMAs were terminated in February 2005, when he was cross-examined as well.

[54] Mr. Giannone in his affidavit that after the termination of Bordeaux there was a “new Development Co-management Agreement between Fram and Romandale as of March 3, 2005”. This is a one-page agreement that simply states that Romandale agrees to act as a co-manager along with Fram with respect to the management of the Cathedraltown, Memorial and Elgin Mills properties for a specified fee. Fram asserts that this one-page agreement amounted to an amendment of the COAs, to “redefine” the DMAs.

[55] Romandale argues that this is not the case. I agree. First of all, the Development Co-management Agreement had no impact on the termination of Bordeaux as the Manager of the Lands. Second, this agreement related to multiple properties and not just the Lands. Third, this was a one paragraph fee agreement and nothing remotely approximating the DMAs that had been terminated. Lastly, Romandale and Fram took no steps to amend the COAs to re-define “Management Agreement” as being anything but the DMAs with Bordeaux. Section 10.03 of the COAs requires that amendments must be done in writing. In the past, the parties had amended the COAs and did so in writing, as required. I therefore find that the Development Co-management agreement is not relevant to the issue of the termination of Bordeaux as Manager.

[56] Finally, Mr. Kerbel deposed in his affidavit of September 18, 2018, filed as his evidence in chief at trial, that he was advised by Mrs. Roman Barber that Romandale had taken steps to terminate the DMAs and that this decision resulted in litigation with Bordeaux: para. 24. I will come to Mr. Kerbel’s evidence as to what he understood the status of the litigation was when I deal with the August 2005 Agreement.

[57] Counsel for Fram and Kerbel argue that these witnesses could not properly give this evidence as to whether there was a proper termination of the DMA’s and that this is something for this Court to determine. I agree that this Court must make the final determination, but the understanding of the principals of the parties at the time is relevant in that regard.

[58] For these reasons I agree with the position of Romandale that it is not open to Fram and Kerbel to now attempt to dispute the fact of the termination of the DMAs by Romandale and try to litigate this issue in this trial when they have never previously put that termination in issue in this litigation. In any event, as I will come to, I find as a fact that the DMAs were terminated by Romandale in February 2005.

The current positions of Fram and Kerbel

[59] Fram now argues that the DMAs can only be validly terminated prior to SPA where it is shown on reasonable evidence that the Manager i.e. Bordeaux, has not obtained the approvals necessary to obtain SPA. Kerbel argues that on the face of the matter, it appears that Romandale did not have the right to terminate the DMAs.

The evidence at trial regarding the 2005 termination of the DMAs

[60] After Romandale issued a Notice of Complaint and Termination to Bordeaux effective February 28, 2005, (“Termination Notice”), Fram issued an Acknowledgment of Romandale’s termination, signed on February 23, 2005 (“Acknowledgement”), agreeing that Romandale was entitled to serve the Termination Notice and that Fram agreed with the termination of Bordeaux on the basis set out in the Termination Notice. Romandale argues that it is not open for Fram to now attempt to suggest the DMAs were not terminated and to try to re-open the issue when, at the time of termination Fram expressly agreed that the termination was valid and proper. I agree. That was the position Fram took at the time of the termination. On this basis alone, I find that Fram cannot now, at this late date, resile from the position it took at the time.

[61] Bordeaux commenced an action against Romandale, Fram, and others in March 2005 (“Bordeaux Action”). It claimed a declaration that the Termination Notice was “invalid and of no force or effect” and claimed damages for breach of contract, conspiracy and breach of fiduciary duty as well as punitive damages and other relief. However, it is significant that no injunction or reinstatement was ever sought, which may have called into potential question whether the Manager under the COAs was indeed terminated for the purpose of the COAs and the DMAs.

[62] It is also significant that Fram defended the termination before the courts in the Bordeaux Action. Fram expressly pleaded in its defence to the Bordeaux action, at para. 67, that the termination of the DMAs was “caused by [Bordeaux’s] failure to work out its differences with [Romandale]”. In para. 68, Fram pleaded that it took no part in the termination of Bordeaux and that it made no comment on whether Romandale was entitled to terminate the DMA or whether or not the termination was valid. This pleading was inconsistent with the Acknowledgement but in the alternative at para. 69, Fram pleaded that the termination was valid for some or all of the reasons set out in the Termination Notice.

[63] For reasons that I will come to, I have rejected the argument advanced by Fram and Kerbel that Romandale is estopped from changing its position set out formally in its pleadings. For the same reasons, I am not prepared to find that had the Bordeaux Action continued, that Fram would have been estopped from changing its position. The position that it took at the time in the Acknowledgement however is still relevant.

[64] Given that in its statement of claim Bordeaux did not seek an injunction or reinstatement as Manager, I agree with Romandale that for the purpose of the COAs, the DMAs were finally terminated when the Termination Notice was served. Bordeaux never sought to unwind the termination or revive the DMAs. It simply sought a declaration of invalidity to ground an award of damages. For the purposes of the COAs, the Manager was gone. Had the Bordeaux Action gone to trial and the court found that the termination was invalid, Bordeaux would have been entitled to damages. Regardless, the judgment would not have impacted the COAs, as the Buy-Sell would not, in that circumstance, be unavailable. At most if Bordeaux was successful and obtained a finding that the termination was wrongful, it was only entitled to damages.

[65] My conclusion in this regard is reinforced by the language in s. 5.07 which refers to the DMAs being “terminated”, not to a court of law finding them to be terminated, or to the DMAs being “properly terminated” or any language of this sort.

[66] Furthermore, even if this brand-new position advanced by Fram and Kerbel is correct, there is no dispute that termination of the DMAs was itself the subject of a multi-party, multi-year proceeding which resolved in October 2014, without any impact on any of the Land Agreements. I agree with Ms. Batner that it is not up to this Court, in these actions, to wade into the merits of the Bordeaux Action, particularly without notice to the parties in advance, to adjudicate on the matter at the centre of the Bordeaux Action. Whether Romandale properly terminated Bordeaux was the issue in the litigation commenced by Bordeaux but is not an issue in the present litigation. In my view, this is not the time or place to relitigate the issues in the Bordeaux Action which was ultimately settled by the parties with no judicial findings being made. Furthermore, the parties did not lead evidence for this Court to make such an adjudication. Nor is it required. That Romandale terminated Bordeaux, and Fram concurred, is a factual matter for purpose of the COAs (and those parts of the August 2005 Agreement that incorporates s. 5.07 of the COAs).

[67] For these reasons, even considering the new position of Fram and Kerbel, I find that their new position has no merit.

Finding: Romandale’s DMAs with Bordeaux were terminated in February 2005

[68] I find as a fact, for all these reasons, that for the purpose of the actions before this Court, the DMA’s were terminated within the meaning of the COAs as of February 28, 2005. Having made this finding, it follows that the Buy-Sell provisions in the COAs could have been triggered as early as February 2005.

(C) Romandale’s August 2005 Agreement with Kerbel

[69] In or around 2004, Romandale began exploring opportunities to sell its interest in the Lands, as well as opportunities to sell other lands owned by it and the Roman family. Romandale was then the owner of various other parcels of land in the City of Markham, including the Cathedraltown Lands and some lands to the south of those lands and 70 acres of land, the “Triple R Lands”. Romandale needed to refinance a $6,000,000 Bank of Nova Scotia (“BNS”) mortgage on the Lands and wanted cash to make distributions to Romandale and Roman family members.

[70] As a result, Romandale hired Rose Simone, a former banker, who advised on and arranged financings and transactions for her clients, to find new mortgage financing and a buyer for the Lands for its development potential. Romandale engaged in multiple discussions with Fram and Kerbel, then a prospective third-party purchaser, regarding a potential sale of some or all of Romandale’s interest in the Lands to one of them or some combination of both of them. Mr. Kerbel was very interested in the opportunity.

[71] Ms. Simone was not called as a witness at trial by Romandale. Kerbel argues that an adverse inference should be drawn against Romandale as a result, but I agree with Romandale’s submissions that this is not warranted. Ms. Simone is not within Romandale’s exclusive control. She is not an employee of Romandale. She is an independent financial advisor. It is trite that there is no property in a witness. Ms. Simone was equally available to Kerbel as a witness.

[72] Romandale and Fram were not able to come to terms. I do not need to decide whether, as Fram alleges, it offered a fair price for offering its consent so that Romandale could do an immediate deal with Kerbel, or that its deal was better than the deal Romandale ultimately secured with Kerbel. Those issues are not relevant to the many issues that I must determine.

[73] Romandale continued its discussions with Kerbel and on August 29, 2005, Mrs. Roman-Barber and Mr. Kerbel, both represented by counsel, negotiated and finalized the terms of the August 2005 Agreement between Romandale and 2001251. There is no dispute that Romandale did not obtain Fram’s consent to this deal. Both Romandale and Kerbel agreed at trial that the August 2005 Agreement was designed expressly and intentionally to comply with the COAs, without altering any of Romandale’s rights or affecting Fram’s rights thereunder, while enabling Romandale and Kerbel to transfer the Lands as soon as possible.

[74] The August 2005 Agreement provided for four transactions between Romandale and Kerbel or their affiliates as follows:

a) Kerbel assuming the BNS mortgage on the Lands, with revised terms;

b) Kerbel purchasing a 70-acre parcel of land located next to the Triple R Lands, not owned by Romandale, but by the Estate of Stephen B. Roman and the children of Anthony Roman, on whose behalf Romandale was transacting, and to receive a second right of refusal to purchase other lands referred to as the Elgin South Property;

c) The immediate sale to a Kerbel entity of 5% of Romandale’s interest in the Lands (the “Initial Interest”); and

d) Kerbel purchasing Romandale’s entire interest in the Lands (the “Remaining Interest”) at the fixed price of $160,000 an acre at the time of closing, subject to a downward adjustment for undevelopable land based on a formula but with no possibility of a price increase should the value of the land increase (this portion of the August 2005 Agreement is referred to herein as the “Conditional Agreement”).

e) An initial deposit of $100,000 was to be paid immediately with the balance of the purchase price to be paid on the closing of the transaction of the sale of the Remaining Interest.

[75] Romandale did not disclose to Fram that it had entered into the August 2005 Agreement with Kerbel nor did it immediately provide Fram with a copy of the agreement. If I find that Romandale had an obligation pursuant to the terms of the COAs to provide a copy of this agreement to Fram, there is no doubt on the evidence that I heard that they failed to do so, although certainly Fram was not totally in the dark. Once Fram obtained a copy of the August 2005 Agreement, Fram took the position at the time that the Conditional Agreement was void in that it caused Romandale to breach its obligations under the COAs and the CMAs in several ways. Romandale denies this.

[76] Fram and Kerbel both argue that by virtue of para. 5 of the August 2005 Agreement that the Buy-Sell under the COAs could only be exercised after SPA. Romandale argues that this provision provided that the Buy-Sell was available to be triggered at any time that it could be triggered under the COAs, including after the DMAs were terminated in February 2005. This is one of the most important issues that I must determine. Romandale also argues that the language in para. 5 made Kerbel Romandale’s fiduciary and that by this language, Kerbel agreed to act in Romandale’s best interest and to look out for Romandale faithfully, ahead of its own interests, in respect of the triggering of the Buy-Sell. This is denied by Kerbel and is another issue I must deal with.

The factual matrix at the time the parties entered into the August 2005 Agreement

The status of the Lands

[77] There is no material dispute between the parties with respect to the status of the Lands at the time that Romandale and Kerbel were negotiating the August 2005 Agreement. The facts are as follows:

a) Both the Snider and McGrisken Farms were designated as farm land outside of the urban boundary of the City of Markham. They were not included within Markham’s “urban expansion area” for development purposes.

b) In February 2005, the Greenbelt Act, 2005, S.O. 2005, c. 1 was brought into force and certain portions of the Snider and McGrisken Farms were identified as protected Greenbelt lands, meaning that those portions could not be developed unless and until a future Greenbelt Plan review determined that they should not continue to be classified as such.

c) At the time, developers could apply for and obtain urban boundary expansions in respect of individual lands rather than wait for the regional and local municipalities to expand their boundaries (i.e., the planning process was different in 2005 before the Ontario Liberal Government of the time released the Growth Plan for the Greater Golden Horseshoe in 2006).

d) In this pre-2006 planning context, homebuilders (like Fram) reasonably expected construction (which could only occur post-SPA) to be achieved within 5 to 7 years.

e) Mrs. Roman-Barber testified that everyone expected the Lands would advance through the planning process by around 2010. Mr. Kerbel stated that he hoped that SPA might only take 7 to 10 years to unfold, although knowing it was possible it would take much longer or might never occur if there was a regulatory change further restricting development. He admitted however that he did not expect that it would take decades to close Kerbel’s purchase of Romandale’s Remaining Interest in the Lands. Fram, as a knowledgeable developer-builder, thought that SPA would occur by 2010.

f) Catherine Spears, Fram’s planning expert, confirmed that this expectation regarding the timing of SPA was justified in 2005, since it was not until 2006 that government policies radically changed the process for obtaining SPA, altering the traditionally known timelines for obtaining SPA and delaying them significantly. Dr. Frank Clayton, Kerbel’s expert, made similar observations during his testimony.

The surrounding circumstances at the time the August 2005 Agreement was being negotiated

[78] At this time Romandale was not in a position to trigger the Buy-Sell and buy Fram out because it did not have the funds to do so and in fact, as already stated, it needed money. The financial terms of the August 2005 Agreement, and particularly the aggregate amount of the initial funds to be received by Romandale from the transactions with Kerbel, were specifically sought by Romandale and designed by the parties to generate the short-term cash flow Romandale required.

[79] Mr. Kerbel testified that he wanted to buy the Lands from Romandale as quickly as he could. Mrs. Roman-Barber testified that she wanted to sell Romandale’s Remaining Interest in the Lands as soon as possible and get paid. Both parties wanted to ensure they did not breach the COAs by entering into the August 2005 Agreement or negatively impact Fram’s rights under the COAs. Mr. Kerbel was given copies of all of the Land agreements, which he provided to his counsel who drafted the agreement. He also admitted that he specifically turned his mind to and reviewed the Land agreements and the restriction on Romandale’s rights to dispose of the Lands under the COAs in order to understand the impact any deal would have on the Land agreements.

[80] Given Romandale’s position that the Buy-Sell could have been triggered after the DMAs were terminated in February 2005, the party’s intentions at the time the August 2005 Agreement was negotiated is important.

[81] Mr. Kerbel admitted in cross-examination that at the time he entered into the August 2005 Agreement with Romandale, he knew that the COAs provided for the triggering of the Buy-Sell provisions after termination of the DMAs and before SPA. Mr. Kerbel also admitted that before he entered into the August 2005 Agreement that he knew from discussions with Mrs. Roman-Barber that disputes had arisen among Romandale, Fram, and Bordeaux about the manner in which Bordeaux was carrying out its development obligations; that Romandale had delivered a Notice of Complaint and Termination to Bordeaux in February of 2005, terminating the DMAs; and that litigation with Bordeaux had arisen as a result. In April 2005, Mr. Kerbel was provided with a copy of Bordeaux’s statement of claim in that litigation, dated March 7, 2005.s. He read the statement of claim and also provided it to his counsel for review.

[82] Mr. Kerbel was concerned about the ongoing Bordeaux litigation. He testified that the fact that Romandale had terminated the DMAs “just didn’t cut it” with his lawyers. Mr. Kerbel admitted that the reason that he did not cause Romandale to trigger the Buy-Sell right away was because he did not want to get dragged into the Bordeaux litigation. This is certainly a reason why Mr. Kerbel did not proceed to cause Romandale to immediately trigger the Buy-Sell so that Kerbel would have the opportunity to buy Romandale’s remaining interest if Fram chose not to do so, even though he wanted to buy the Remaining Interest as quickly as possible.

[83] In his affidavit Mr. Kerbel swore that he and Mrs. Roman-Barber deliberately agreed to defer triggering the Buy-Sell in the August 2005 Agreement until after SPA because of Mr. Kerbel’s reluctance to being dragged into the existing Bordeaux litigation regarding the DMAs and that their lawyers drafted the August 2005 Agreement to provide for this. He testified that he and Mrs. Roman-Barber and their lawyers agreed “and we specifically took [the DMAs] out of our deal because no judge had said [Bordeaux] was terminated”.

[84] Romandale argues that this was false evidence and I agree. First of all, Mr. Kerbel abandoned that position during his cross-examination, when he admitted he could have caused Romandale to trigger the Buy-Sell before SPA under the August 2005 Agreement, and indeed that he would have when the Bordeaux litigation resolved:

Q: […I]f the Bordeaux litigation settled, you would have caused Romandale to trigger the buy/sell. You recall I asked you that question?

A: Yes, I’m going to say I would have.

Q: Pardon?

A: I am going to say I would have.

Q: You would have?

A: Yes.

Q: And you wanted to be the decider on the timing and the amount of the buy/sell that Romandale would trigger with Fram.

A: Well, the timing was as soon as I could, but the amount, yeah.

Q: So when you say the timing was “as soon as I could”, that just goes back to our last discussion. As soon as possible, as soon as you were satisfied that the Bordeaux litigation wasn’t a problem, you would have caused Romandale to trigger the buy/sell.

A: Yes, I would have. [Emphasis added]

[85] Mr. Henderson, Mr. Kerbel’s counsel, argues that these questions required Mr. Kerbel to speculate about a hypothetical proposition of whether he would have caused Romandale to trigger the Buy-Sell when the Bordeaux litigation settled. He submits that Mr. Kerbel is a businessperson, not a lawyer, and his business interest in closing the deal early does not amount to a legal right to do so under the August 2005 Agreement. Mr. Henderson also argues that Ms. Batner’s questions that elicited these responses did not refer directly to the August 2005 Agreement as it stands. It is the position of the Kerbel and Fram parties that this evidence Ms. Batner elicited from Mr. Kerbel in cross-examination is inadmissible for the purpose of interpreting the provisions of the August 2005 Agreement in that it is not within any of the permissible categories of objective evidence of surrounding circumstances at the time the agreement was entered into. It is submitted that the only admissible evidence in this regard is Mr. Kerbel’s unequivocal evidence that he, Mrs. Roman-Barber, and their respective lawyers considered the termination of the DMAs at the time and agreed that the August 2005 Agreement would refer only to SPA and Fram’s consent because the DMAs were in court.

[86] I disagree and find that Mr. Kerbel’s evidence is admissible. As already stated, Ms. Batner did ask Mr. Kerbel what his understanding of the Buy-Sell provisions was in the COAs and he admitted that at the time he entered into the August 2005 Agreement with Romandale he knew that the COAs provided for the triggering of the Buy-Sell provisions after termination of the DMAs and before SPA. The questions were clearly aimed at Mr. Kerbel’s understanding and his intentions at the time he was negotiating the August 2005 Agreement with Mrs. Roman-Barber. Ms. Batner did not ask Mr. Kerbel what his interpretation of the August 2005 Agreement is – that would not have been appropriate. Furthermore, I agree that her questions did not refer directly to the August 2005 Agreement as it stands and so I do not find that this evidence assists directly on the interpretation of that agreement.

[87] This evidence from Mr. Kerbel does however directly contradict his evidence that he and Mrs. Roman-Barber deliberately agreed that the Buy-Sell would not be triggered until after SPA. I agree with the submissions of Ms. Batner that Mr. Kerbel’s affidavit evidence that he deliberately agreed with Mrs. Roman-Barber that the August 2005 Agreement would only permit Romandale to exercise the Buy-Sell provisions after Fram consented or after SPA had been obtained was false. First, it would have made absolutely no sense to agree that the Buy-Sell could only be triggered after SPA given that Mr. Kerbel knew that it could be triggered before SPA after termination of the DMAs and his intention was to close the deal as quickly as possible. The evidence is clear that the reason Mr. Kerbel did not exercise his right to cause Romandale to trigger the Buy-Sell right away was because of his concern about the ongoing litigation with Bordeaux. The timing of the resolution of that litigation and the Lands obtaining SPA have absolutely no connection. It would have made no sense for the parties to have entered into an agreement to delay the closing even if the litigation with Bordeaux had settled quickly. I find that the fact there was outstanding litigation with Bordeaux was the only reason Mr. Kerbel did not cause Romandale to trigger the Buy-Sell provisions right away.

[88] Second, the argument advanced by Kerbel that the parties chose SPA as a precondition for triggering the Buy-Sell because it afforded “certainty” also makes no sense, particularly given Mr. Kerbel’s evidence that SPA was uncertain and might never occur.

[89] Third, when Mr. Kerbel was asked about this issue on his examination for discovery, he admitted that at the time he understood that the DMAs had been terminated and so he did not look at the DMAs because Romandale was “finished with Bordeaux”. When this evidence was put to him at trial, he said that his earlier evidence was wrong and that he had “forgotten” that because the DMAs were in court, that it was only the SPA and Fram’s consent that was agreed to with Mrs. Roman-Barber. This evidence seemed disingenuous and I do not accept it.

[90] Kerbel and Fram however also argue that prior to Romandale’s change of legal counsel in 2015, its position in the 07 Action during the preceding eight years was that the Buy-Sell provision under the August 2005 Agreement was intended by Romandale and Kerbel to be triggered following SPA and that prior to 2015, Mrs. Roman-Barber has repeatedly stated that the August 2005 Agreement was intended to be performed following SPA, including the following evidence of Mrs. Roman-Barber on discovery in February 2009:

And so ultimately once this land actually got sold to Mr. Kerbel after secondary plan approval and after exercising the buy-sell with Frambordeaux, we were striving to shrink the wastage areas.

The lawyers were very careful to structure the agreement [a reference to the August 2005 Agreement] so that it was in accord with the co-owners agreement and so that I couldn’t sell any more than 39 percent on my own until secondary plan approval.

From my best recollection, I believe that Frank [Giannone] brought up something about buying something further on Elgin Mills and I said, Frank, you know that as of secondary plan approval, that’s sold and he objected.” (Emphasis added)

[91] Kerbel and Fram also rely on Romandale’s consistently-stated position in various documents that pursuant to the August 2005 Agreement the Buy-Sell provisions would be performed after SPA. These documents include an affidavit sworn by Mrs. Roman-Barber in July 2007 and letters from her former counsel from September 2009 and following. In addition, in Romandale’s Proposed Amended Statements of Defence in the 07 and 08 actions in 2012, Romandale maintained the position that the August 2005 Agreement Buy-Sell was to be performed following SPA.

[92] In cross-examination at trial, Mrs. Roman-Barber admitted that she had no independent thinking of her own that led to her new position that the Buy-Sell in the August 2005 Agreement could be performed before SPA; she only realized her previous statements were “wrong” after a conversation with her new lawyers.

Q. And other than discussions with your lawyers that I don’t want you to tell me about, was there any other discussion or independent thinking of your own you had that led you to that recollection that -- to that realization that you been an error.

A. Not that I remember.

[93] I find that this evidence of Mrs. Roman-Barber does not confirm the position of Kerbel that Mr. Kerbel and Mrs. Roman-Barber intended that the Buy-Sell in the August 2005 Agreement could only be triggered if Fram consented or after SPA. Mrs. Roman-Barber was clear in her evidence that the intention of the parties at the time that the August 2005 Agreement was negotiated was that this agreement was not meant to modify the COAs. In fact, the second discovery read-in of the evidence of Mrs. Roman-Barber confirms this as well. The August 2005 Agreement was intended to ensure that Romandale did not breach the COAs. Given that it is clear that the Buy-Sell provisions in the COAs permit the Buy-Sell to be triggered before SPA, there would have been no need to alter this term in the August 2005 Agreement.

[94] Furthermore, as I will come to, there is evidence that starting in February 2007, counsel for the parties perpetuated a misunderstanding as to what the COAs provide for. This in my view explains the evidence of Mrs. Roman-Barber given after 2007, the position taken by her former counsel, and the position taken in proposed amended pleadings. Whether this gives rise to estoppel is an issue that I must consider, but in my view this evidence has no adverse impact on the credibility of Mrs. Roman-Barber.

[95] Kerbel agrees that the stated intention of Mrs. Roman-Barber and Mr. Kerbel in drafting the August 2005 Agreement was that they were endeavouring to comply with the COAs. Kerbel argues that excluding termination of the DMAs as a trigger for the exercise of the Buy-Sell in the August 2005 Agreement was consistent with Mrs. Roman-Barber’s knowledge that settlement of the Bordeaux Action and a payment to Fram for its investment would be required for Romandale to do an immediate sale to Kerbel, which resulted in their agreeing that triggering the Buy-Sell would follow SPA. I do not accept this submission either. To comply with the COAs and not modify the right of the Buy-Sell set out in the COAs, the parties would not have agreed that the Buy-Sell provisions could only be exercised after SPA as that is clearly not what the COAs provide for.

[96] Given the admitted common intention for a quick closing in compliance with the COAs, it would have made no sense to put off closing the sale of Romandale’s Remaining Interest in the Lands to after SPA. As I have already said there is no reason why Mr. Kerbel or Mrs. Roman-Barber would have agreed that the Buy-Sell provisions could only be triggered after SPA, given that the COAs permitted the Buy-Sell provisions to be exercised before SPA.

[97] In addition, perhaps the most obvious indicator of this clear and unequivocal intention of the parties to close the sale of Romandale’s Remaining Interest in the Lands as quickly as possible is that the Conditional Agreement provides for a fixed price for the Lands. As already stated, Mr. Kerbel agreed at trial that the purchase of Romandale’s Remaining Interest pursuant to the terms of the Conditional Agreement was never meant to take decades to close and yet if Kerbel is successful in obtaining specific performance of that agreement, the result of Kerbel and Fram entering into the Settlement Agreement pushed the closing of the Conditional Agreement decades away, until Fram’s recent consent. I agree with the submission of Romandale that fixing a purchase price for Lands that could apply decades later, which is in effect what the Fram and Kerbel parties argue in this case, would lead to a commercial absurdity, rendering the Conditional Agreement of considerably less value to Romandale.

[98] Romandale settled the Bordeaux Action in October 2014 without ever advising Kerbel of this and it never at any time asked Kerbel for instructions to trigger the Buy-Sell under the August 2005 Agreement. Fram and Kerbel argue that this conduct by Romandale is consistent with Romandale’s long-held position (recently reversed) that the Buy-Sell under the August 2005 Agreement was to be performed after SPA. As I will come to, however, there is evidence that starting in February 2007, counsel for the parties perpetuated a misunderstanding that the Buy Sell under the COAs could only be triggered after SPA. More importantly, by this time Romandale argues that it had taken the position that Kerbel had repudiated the August 2005 Agreement and Romandale had accepted that repudiation.

[99] Finally, Kerbel argues that it is noteworthy that neither of Romandale’s lawyers involved in drafting the August 2005 Agreement were called to testify. However, I did not hear from Kerbel’s lawyers who did the initial draft of the agreement either. I draw no inferences against either party from this fact.

[100] Although there was no issue at trial about the common intention of the parties to close the sale of the Remaining Interest to Kerbel as soon as possible, Romandale submits the fact that the parties expected SPA to occur within a short time period is also reflected throughout the Conditional Agreement:

a) In s. 2(d) of the Conditional Agreement, the right of certain individuals to occupy the Lands in the interim was to automatically terminate on the earlier of thefifth anniversary of the closing of the purchase and sale of the Initial Interest (i.e., in early 2011) or SPA being obtained for the Lands (implying that the parties expected SPA could happen within five years of January 31, 2006 (when the Initial Interest was supposed to close);

b) The treatment of the Lands as a single parcel, with a single price and adjustment scheme, contemplated that they would move through the planning and development processes together (which, in 2005, was possible given that landowners were entitled to unilaterally apply to bring their lands into urban boundaries for development);

c) The fixed purchase price necessarily implies the parties understood there would be a short horizon (given the time value of money, delaying closing by decades would render a fixed purchase price meaningless as it starts to approach of present value of zero); and

d) The conditions precedent in the Conditional Agreement could only operate for the mutual benefit of Romandale and Kerbel on a short time horizon. A lengthy time horizon, in the context of a fixed purchase price, guarantees that the interests of Kerbel (as a buyer) and Romandale (as a seller) will ultimately diverge such that the Conditional Agreement could never be performed for their mutual benefit.

[101] In summary, it is most significant that Mr. Kerbel and Mrs. Roman-Barber wanted to close the sale/purchase of Romandale’s Remaining Interest to Kerbel as soon as possible. I have rejected Mr. Kerbel’s evidence that they intended and agreed that the August 2005 Agreement would only permit the Buy-Sell to be triggered after SPA. I have also found that any statements made by Mrs. Roman-Barber and her counsel to the same effect only occurred after counsel for the parties mistakenly took the position that pursuant to the August 2005 Agreement the Buy-Sell provisions could only be triggered if Fram consented or after SPA.

(D) Did legions of lawyers misapprehend when the Buy-Sell under the COAs could be triggered?

[102] In his Endorsement, Dunphy J. noted at para. 29:

For reasons that no party was able satisfactorily to explain at the hearing of this motion, it appears to have entirely escaped the attention of the legions of lawyers and other professionals involved with this three-part litigation tango until quite recently that the right to pull the trigger on a shotgun buy-sell transaction under s. 5.07 [of the COAs] has been open since February, 2005 given the termination of the Development Management Agreements (the term “Management Agreement” in the COA refers to the Development Management Agreements). [Emphasis added]

[103] It is Romandale’s position that “amidst the to-ing and fro-ing” of Fram and Romandale’s counsel in respect of Romandale’s alleged breach of the COAs, Fram’s counsel set in motion a mischaracterization of the availability of the Buy-Sell in s. 5.07 of the COAs that pervaded subsequent pleadings and affidavits relied on by the parties and that was ultimately identified and rectified by Romandale in 2015 when it changed counsel. It is alleged that this began in a letter dated February 26, 2007, when counsel for Fram wrote to counsel for Romandale alleging a breach of the COAs and asserting:

The Elgin Mills Lands have not received Secondary Plan Approval, as defined in Section 5.07(a) in each of the Co-ownership Agreements. Therefore, the provisions dealing with Dispositions set out in Section 5.04, 5.05 and 5.07 are inapplicable.

[104] Whether or not this was the first time this incorrect position was stated or not, this position was clearly wrong in that as I have already stated, the Buy-Sell could also be triggered after termination of the DMAs, even before SPA, which I have found occurred in February 2005. This error in summarizing the Buy-Sell provisions of the COAs as only being available after SPA was also taken up by Kerbel and Romandale. For example, in the first recital to the Settlement Agreement the COAs are referred to, and with respect to the Buy-Sell provisions it is stated that “the rights may only be exercised after secondary plan approval has been obtained for the Lands ...” [emphasis added].

[105] When Ms. Batner was retained by Romandale in 2015, Romandale was granted leave to amend its Statement of Defence to correct the mischaracterization that had pervaded the pleadings and tainted the parties’ evidence until that time. As already stated, this error explains the evidence of Mrs. Roman-Barber and the positions of Romandale’s former counsel in the period from 2007 to the time Ms. Batner was retained.

(E) Sales that led to the commencement of the 07 Action and 08 Action

The First Sale of the Lands by Romandale

[106] The sale of Romandale’s 5% interest to Kerbel closed in June 2006 and at that time Fram took no issue with this sale.

Information provided by Romandale to Fram with respect to the August 2005 Agreement

[107] I heard a lot of evidence about what Romandale did and did not tell Fram about the terms of the August 2005 Agreement. For reasons I will come to, I have found that Romandale did not have an obligation under the terms of the COAs to disclose the terms of the August 2005 Agreement to Fram. Accordingly, it is not necessary for me to review this evidence or make any findings of fact with respect to this issue.

Fram commences litigation – The Second Sale

[108] There is no dispute that on February 26, 2007, Fram issued a Notice of Default to Romandale based on what it had learned to that point about the August 2005 Agreement. On April 10, 2007, then counsel for Romandale permitted Fram’s counsel (but not Fram) to review the August 2005 Agreement. Based upon its lawyers’ review of the August 2005 Agreement, Fram stated that by entering into this agreement Romandale was in breach of the COAs. Fram asserted that Romandale had made a prohibited Disposition by agreeing to sell its entire interest in the Lands, and had structured the August 2005 Agreement in such a way that would prevent Fram from exercising its Right of First Refusal under the COAs (which would have permitted Fram to buy Romandale’s interest on the terms it accepted from Kerbel).

[109] On June 25, 2007, Fram received a letter from Romandale’s counsel advising Fram of an agreement to sell a further 7% of Romandale’s interest to Kerbel (the “Second Sale”). Upon receiving the letter, Fram delivered a further Notice of Default dated July 6, 2007 and commenced the 07 Action. As part of the injunction proceeding before Forestell J., Romandale finally provided Fram with a copy of the August 2005 Agreement by attaching it as an exhibit to Mrs. Roman-Barber’s affidavit. Because of the injunction this Second Sale to Kerbel never closed.

[110] At the same time, based on its allegation that Romandale was in default of the COAs, Fram purported to trigger the Default Purchase Right pursuant to s. 6.02(d) of the COAs. Thereafter, in 2008, Fram commenced the 08 Action.

(F) Conduct of the parties after the Actions began until the Settlement Agreement was entered into

[111] After the 07 Action and 08 Action were commenced and leading up to the initial trial date in September 2010, Romandale alleges that the factual circumstances between the parties were characterized by three primary developments: (i) Fram’s failure to advance the Default Purchase Right; (ii) Romandale maintaining control over development of the Lands; and, (iii) unwelcome changes in the development potential of the Lands, which led to each of Fram and Kerbel no longer wanting to purchase the Lands right away. What I should make of the conduct of the parties after the August 2005 Agreement was entered into is in dispute and although these are in part legal issues to be determined, they also require some findings of fact to be made.

Conduct of Fram and Romandale with respect to Fram initiating steps pursuant to the Default Purchase Right

[112] The Default Purchase Right under s. 6.02(d) of the COAs requires compliance with s. 6.03 for the valuation process. The process contained in s. 6.03 called for the triggering party (Fram) to appoint an appraiser for the purposes of providing a valuation of the Lands, after which the purported defaulting party (Romandale) would do the same. The two appointed appraisers would then appoint a third appraiser, who would conduct its own independent valuation. “Fair Market Value”, as understood under s. 6.03, would be determined by taking the average of the two closest appraised values.

[113] There is no dispute between the parties that Fram never carried out the Default Purchase Right according to the specified process to determine FMV set out in the COAs, and which would have required Fram to pay Romandale immediately and in cash for Romandale’s interest in the Lands at a 5% discount.

[114] The evidence at trial was that, following numerous exchanges between Fram and Romandale’s counsel, both Fram and Romandale appointed appraisers to conduct s. 6.03 valuations; however, despite Romandale’s continued insistence that Fram adhere to the terms and process provided for in the COAs (i.e., by appointing a third appraiser), Fram chose not to perform the s. 6.03 valuation process because Romandale was disputing it was in default.

[115] The chronology of event relevant to this issue is as follows:

a) On July 30, 2007, Fram delivered a Notice to Romandale pursuant to ss. 6.02(d) and 6.03 of the COAs appointing the Altus Group Limited (“Altus”) as its appraiser.

b) By Notice dated August 22, 2007, Romandale appointed Integris Real Estate Limited (“Integris”) as its appraiser “without prejudice to its position that it is not a defaulting party as defined by the Co-Owners Agreements”.

c) Romandale served its Statement of Defence on March 3, 2008 in the 07 Action. In its Defence, Romandale denied that it was in breach of the COAs and that Fram was entitled to exercise its remedy under s. 6.02(d) to acquire Romandale’s interest in the Lands at 95% of FMV.

d) On September 14, 2007 David Atlin on behalf of Integris wrote to David Jenkins, the President of Altus advising that after Mr. Jenkins had advised him to contact Ian McLeod, Mr. McLeod had informed him that Altus had not yet completed a formal retainer with Fram although he expected that this would happen. Mr. Atlin asked that Mr. Jenkins inform him once Altus had been formally retained.

e) In September 2007, Romandale sought (unsuccessfully) to have the entire dispute (including Fram’s claim) converted to arbitration.

f) On April 29, 2008 counsel for Fram wrote to counsel for Romandale stating in part:

… it seems to be wasteful to proceed with the appraisal process prior to a determination of whether Frambordeaux is entitled to exercise its right to require Romandale to sell its interest pursuant to section 6.02(d) of the Co-Owners Agreements. We have not therefore proceeded at this stage with the next step of the appointment of the third appraiser pursuant to section 6.03 of the Co-Owners Agreements. Nevertheless, you have raised on a number of occasions the contention that failure to proceed with the appointment of the third appraiser is an unjustifiable delay.

Please advise whether you agree to defer the continuation of the appraisal process or whether you insist that they proceed despite Romandale’s dispute that Frambordeaux is entitled to exercise its right to purchase Romandale’s interest.

Counsel for Fram went on to propose a three-step process for appointing a third appraiser if Romandale was determined to proceed with the appraisals prior to a judicial determination.

g) On August 29, 2008 counsel for Fram wrote to counsel for Romandale again essentially repeating the April 29, 2008 letter.

h) On October 22, 2008, counsel for Romandale wrote to counsel for Fram asking that he be advised whether Altus had been retained and whether Altus would respond to Mr. Atlin within 15 days.

i) On October 23, 2008, counsel for Fram responded to the letter of October 22nd, asking counsel for Romandale for a response to the letter of August 29, 2008.

j) On November 7, 2008, counsel for Romandale wrote to counsel for Fram and advised that with respect to the letter of April 29, 2008, Romandale had “no interest in proceeding other than as set forth under the agreement. In that regard, we have confirmed that David Atlin of Integris Realty is ready, willing and able to proceed forthwith with respect to the appraisal process”.

k) On November 17, 2008, counsel for Fram responded stating that Romandale’s position was fundamentally inconsistent and mutually untenable given that the Article 6 procedures for determining FMV are predicated on an event of default having occurred by Romandale, which Romandale had denied and that proceeding with the determination of FMV under s. 6.02(d) “is necessarily premature until this issue has been determined in the action”. Essentially it was Fram’s counsel’s position that Romandale concede that there had been an event of default before the appraisal process proceed.

l) On March 25, 2010, counsel for Romandale wrote to counsel for Fram confirming earlier advice that Fram had formally retained Mr. Fish from Altus to carry out an appraisal but stating that when Mr. Atlin had contacted Altus, he was advised that the retainer still had to be confirmed. Counsel for Romandale went on to state: “Obviously, we have to ensure that an appraised value is in hand in advance of the trial date. Would you therefore kindly follow up with Mr. Fish and/or your client to ensure that Mr. Fish responds promptly to Mr. Atlin’s inquiry”.

m) On April 13, 2010, counsel for Fram wrote to counsel for Romandale, referring to his letter of November 17, 2008, advising that no response had been received and reiterating his earlier position that Romandale was taking contradictory positions and that the appraisal process could not move forward until after the litigation had determined the issues. He suggested that both parties serve expert appraisal reports prior to the scheduled trial date in 2010, that there be no third appraisal and that the trial judge should determine the FMV for purposes of s. 6.02(d) and 6.03 in the event he or she found for Fram that Romandale had committed an event of default entitling Fram to exercise the s. 6.02(d) right.

n) On April 20, 2010, counsel for Romandale wrote to counsel for Fram stating in part as follows:

With respect to the appraisal evidence, we have already gone on the record in saying we would not agree to a bifurcation of this Trial. As with most Defendants, we believe we have no liability, but nonetheless, in the event that we are wrong, we want to ensure that we have the evidence available so that the trier of fact can make a final determination. We, of course, cannot compel your client to take those steps outlined under the Co-ownership Agreement.

o) On May 3, 2010, counsel for Fram responded to the letter dated April 20, 2010 repeating his earlier position that:

… no appraisal process related to the s. 6.02(d) rights can be made until the court determines whether your client has committed an Event of Default and further whether the agreements with the Kerbel Defendants are void. Without a determination of those issues, no appraisal process related to the s. 6.02(d) rights can be made because the valuators cannot know what is the interest that they are to evaluate. [Emphasis added]

p) Fram did not ultimately deliver an appraisal report until June 2010, and at that time did not use Altus, opting instead to obtain an appraisal from gsi Real Estate & Planning Advisors Inc. (“gsi”).

[116] Given these events, I find that Romandale took the position that the appraisal process contemplated by s. 6.03(3) under the COAs should be complied with. Fram took the position that this could not be done until the issue of whether or not Romandale is in default was conceded or determined by a court. Fram made other proposals, but Romandale insisted on following the terms of the COAs, which it had the right to do. As a result, I did not receive evidence of the FMV of the Lands at trial that had been determined according to the procedure mandated by the COAs at the time of the alleged default.

Romandale’s efforts to advance development before 2010

[117] As already stated, an important issue in this case, raised by Fram, is whether Romandale breached certain provisions of the COAs by delegating control over the Lands to Kerbel when it entered into the August 2005 Agreement. From 2005 to 2010, Romandale was managing the development of the Lands, first by monitoring planning developments using its planning consultant, Diana Santo, in order to ensure that the Lands would be included in the Region of York’s next urban expansion and by joining the North Markham Landowners Group (“NMLG”) and speaking on behalf of the Lands within the NMLG.

[118] The relevant evidence in this regard is as follows:

a) Mr. Kerbel admitted that in para. 5 of the August 2005 Agreement, the parties intended that Romandale would remain in charge over development of the Lands and Mrs. Roman-Barber gave the same evidence;

b) Mr. Kerbel testified that after the First Sale, pursuant to which First Elgin purchased 4.75% in the Lands, Kerbel took no steps in relation to the development of the Lands because Mrs. Roman-Barber had Dianne Santo, her planning consultant, look after it;

c) Mr. Giannone admitted that in terms of development prior to 2009, he did not know how much work was being done but the work that was done was being done by Ms. Santo. He also stated however that after he found out about Kerbel he did not know how much Kerbel was involved;

d) Kerbel, although a member of the NMLG as of 2008, was there in respect of the Triple R Lands and spoke only in respect of the Triple R Lands;

e) Romandale, at Kerbel’s insistence, joined the NMLG in early 2009 on behalf of the Snider and McGrisken Farms, which had to that point not been included in the NMLG;

f) Kerbel maintained a “watching brief” where it monitored what Romandale was doing in respect of the development of the Lands, but did not itself control development;

g) After Romandale joined the NMLG, Kerbel continued to participate on behalf of the Triple R Lands and did not speak on behalf of the Snider or McGrisken farms;

h) By letter dated January 8, 2010 from counsel for Fram to counsel for Romandale, Fram threatened to take over development of the Lands because it asserted that Romandale had not taken any steps to advance the development of the Lands. Counsel for Romandale responded and set out the steps Romandale had taken to advance development of the Lands and advised that it would not permit Fram to interfere and that pursuant to the COAs, Fram was only entitled to information. Fram took no further steps in this regard at the time;

i) By letter dated March 25, 2010 from counsel for Romandale to counsel for Fram, an extensive summary of the steps Romandale had taken with respect to planning and development and its strategy for the Lands was set out; and

j) Only Romandale produced any planning and development documents from 2005-2010 (and indeed for years thereafter) and in a selection of correspondence for the period from August 2009 to February 2010 the documentary record accords with the testimonial evidence of Mr. Kerbel, Mr. Giannone, and Mrs. Roman-Barber and is consistent with Romandale maintaining control over the development of the lands.

[119] While a member of the NMLG, Romandale paid the NMLG costs associated with the Farms. Romandale also paid, and always continued to pay, all expenses associated with the Lands (e.g. taxes, insurance, etc.).

Changes in the development potential of the Lands in 2009

[120] It is Romandale’s position that in 2009, a string of events materially altered the development potential of the Lands and led to Kerbel no longer wanting to pay for the Lands as quickly as possible and Fram no longer wanting the remedy it sought in its litigation which would have required it to pay cash for the Lands on closing. Both Mr. Giannone and Mr. Kerbel admitted at trial to there being a number of “unwelcome changes”, “bad news stories”, and “not good news stories” in respect of the Lands but strove in their evidence to down play the adverse impact on the Lands of these developments. This factual issue perhaps sheds some light on the intentions of the parties and in particular Fram and Kerbel around the time they entered into the Settlement Agreement. The relevant evidence on this issue is as follows:

a) In 2008, Mr. Kerbel admitted that the market “tanked”;

b) Mr. Giannone admitted that in 2009 there was a lot of concern about the real estate economy as it related to Canada, after what had happened in the United States;

c) Mr. Kerbel admitted that in March 2009, the City of Markham proposed a Growth Management Strategy/Employment Land Strategy which included the Snider Farm, which Mr. Kerbel admitted was an unwelcome change that was “not good news” because for the first time the development timeline for the Snider Farm was significantly delayed until 2021 to 2031;

d) Furthermore, in this March 2009 Growth Management Strategy, the Snider Farm was projected for employment land uses which meant that residential development would not be permitted unless the land use was changed. This was something that Kerbel did not want and Mr. Giannone admitted that unless this could be changed the CMAs would be dead and Fram would not be building residential units;

e) Mr. Kerbel admitted that in addition, because of this March 2009 Growth Management Strategy, the McGrisken Farm would not even be considered for development until 2031-2051, much later than the Snider Farm. Mr. Giannone also admitted that he knew that the two farms were now set on different development tracks. In addition to the foregoing, portions of the Lands (in addition to the ones that had already been identified as Greenbelt lands) were characterized as non-developable (and therefore unfit for any construction) due to conceptual environmental policies.

[121] Both Mr. Giannone and Mr. Kerbel acknowledged at trial that these developments concerned them. They both admitted that they would have preferred shorter development timelines and a residential designation for the Snider Farm, as residential use would have made for a significantly better investment. Fram would have preferred residential land use rather than employment land use as the real way that Fram was to make money was largely tied to its homebuilding rights under the CMAs, which would be dead if the Lands remained employment lands

[122] Mr. Kerbel admitted that by 2009 as a result of these developments, he was no longer in the mindset of closing with Romandale as soon as possible. Mr. Giannone admitted that by 2010 the Lands were a materially “different product”. Mr. Giannone also admitted that because of his concerns about the real estate market, when he entered into the Settlement Agreement with Kerbel, he was not committed to buying half of Romandale’s remaining interest in the Lands. He wanted to have that option in the future. He was careful to ensure that by entering into the Settlement Agreement it could not be construed a consent under the Conditional Agreement because if Fram had consented, the deal between Romandale and Kerbel could have closed..

[123] Mr. Kerbel admitted that Kerbel hen threatened Romandale with legal proceedings upon finding out that Romandale was exploring a potential purchase of Fram’s interest in the Lands so as to permit the Conditional Agreement in the August 2005 Agreement to proceed and close. In a letter from counsel for Kerbel to counsel for Romandale complaint was made that Romandale was discussing the possibility of Fram acquiring Romandale’s Remaining Interest in the Lands and that this constituted a breach of para. 5 of the August 2005 Agreement.

[124] The City of Markham’s council endorsed the Growth Management Plan in May 2010. As a result, the parties knew for a fact that the timing for SPA was going to be drastically different than what they understood it would be in 2005 (i.e. much further off into the future, and at different times for the two Farms).

[125] On the eve of the 2010 trial date, Fram served a report from its valuator, gsi, which revealed that the Lands had decreased in value since July 2007, when Fram initiated steps pursuant to the Default Purchase Right.

[126] In summary, I agree with the position of Romandale that by May 2010, four months before the trial was scheduled to begin, the Snider and McGrisken Farms were a much different, and worse, product than they had been in 2003 or 2005. SPA for both farms was now decades away. These events also serve as the factual context within which Fram and Kerbel entered into the Settlement Agreement. It is Romandale’s position that these events motivated Fram and Kerbel to attempt to delay (for decades and perhaps indefinitely), Kerbel’s purchase of the Lands. I agree that as a result of these events the evidence is clear that neither Kerbel nor Fram were interested in buying and paying for the Lands at that time. It was in their interest, however, to continue to tie the Lands up in the meantime and, as submitted by Romandale, they did so in order to retain for themselves the right to buy the Lands at some point long into the future at the price fixed in the August 2005 Agreement. In the meanwhile, Romandale carried all the risks and burdens associated with ownership of the Lands. The central issue before me is whether as a matter of law and equity Kerbel and Fram were entitled to do so.

(G) The Settlement Agreement between Fram and Kerbel in December 2010

[127] Sometime after June 2009 and prior to the first trial date in September 2010, Kerbel initiated settlement discussions with Fram. Mr. Kerbel admitted that he and Mr. Giannone had initial meetings regarding a deal in advance of any pre-trial conferences with Romandale. Ultimately their discussions led to a request that Romandale participate in the settlement. There is no dispute that Romandale did not participate in the settlement. I heard a lot of evidence at trial concerning the negotiations between the parties and what led to the Settlement Agreement. Only some of that evidence is relevant to the extent that Fram and Kerbel rely on the fact that by this time Romandale had not asserted that the August 2005 Agreement was unenforceable against it.

[128] Kerbel and Fram eventually told Romandale that they had formulated a proposed resolution. They wanted Romandale to participate. Fram, Kerbel, and Romandale engaged in settlement discussions in the Fall of 2010, during which various proposals and terms were considered and canvassed by the parties. Attempts to settle failed.

[129] What is significant for my purposes is that Romandale expressed to Fram and Kerbel that the proposals suggested would not work for Romandale. Romandale then put Fram and Kerbel on notice that it otherwise objected to any settlement agreement between the two of them in respect of the Lands without the consent of Romandale. This was set out in a letter dated October 25, 2010 from counsel for Romandale to counsel for Fram with a copy to counsel for Kerbel.

[130] Despite Romandale’s objection, Fram and Kerbel entered into the Settlement Agreement dated December 3, 2010. The Settlement Agreement provides that:

a) Fram would withdraw its claims against Kerbel and would no longer assert that the August 2005 Agreement was void or that the First Sale was invalid;

b) Fram would acquire an option (but no obligation) to purchase 50% of Romandale’s remaining interest in the Lands from Kerbel;

c) Fram would technically withhold its consent to any sale contemplated under the August 2005 Agreement in order to avoid any argument that it had consented to Romandale selling its remaining interest in the Lands to Kerbel (in which case the Conditional Agreement would have closed right away);

d) Kerbel, with Fram’s agreement, postponed closing of the Conditional Agreement until after SPA; and,

e) Even though Fram was withholding its consent, Fram and Kerbel would enter a joint venture purporting to immediately make all decisions relating to the development of the Lands and share the cost of buying the Lands.

[131] At the time when Fram and Kerbel entered into the Settlement Agreement, they had only made modest payments for their 5% and 4.75% shares of the Land. Both Fram and Kerbel admitted at trial that they knew they could have agreed in 2010 to the Conditional Agreement closing if they had wanted to. Mr. Giannone acknowledged that Fram could have consented then and there to the sale but that he deliberately chose not to as he was not sure that he even wanted to buy the Lands anymore, given what had happened in the real estate market in 2008 and 2009. He wanted to wait and see and defer having to pay for the Lands. Mr. Kerbel testified that if Fram had consented he would have closed; I find that evidence disingenuous given the intentions of both Mr. Kerbel and Mr. Giannone that I have already reviewed resulting from the fact that the Lands were now less valuable.

[132] Both Fram and Kerbel admitted in cross-examination that there was no benefit to Romandale in deferring the sale of the Lands to Kerbel under the August 2005 Agreement. Mr. Kerbel admitted:

Q: The moment the deal [the Conditional Agreement] was made, there was zero potential benefit to Romandale in any delay, correct?

A: Correct.

Q: Because it’s sort of stating the obvious: The deal was you were going to get the lands. Romandale was going to get money and be therefore out of the lands and relieved of any obligations toward the lands, and you were going to collectively not step on Fram’s toes, right?

A: Yes.

Q: That was the pith and substance of the deal, right?

A: Yes.

[133] Mr. Kerbel further admitted that it “wouldn’t be right” to put off closing until after SPA and that “it wouldn’t be fair” to Romandale to defer closing 20 to 40 years:

Q: So in 2010 you had already realized that SPA was so far off?

A: It wouldn’t be right, yeah.

Q: It wouldn’t be right. In 2010 you already realized it wouldn’t be right to put off this deal [the Conditional Agreement] to SPA?

Mr. Henderson: He said ready.

The Witness: It wouldn’t be right. It wouldn’t be fair. It wouldn’t be fair to put it off forever. [Emphasis added]

Ms. Batner: Q: Right. In 2010 you already realized that it wouldn’t be fair to put off the closing for 20 or 40 years, right?

A: Yes.

(H) The conduct of Romandale with respect to the August 2005 Agreement after December 2010

[134] Romandale asserts that from the time of the Settlement Agreement onward, it conducted itself in a manner that demonstrated it viewed the August 2005 Agreement as dead and no longer enforceable and that its acceptance of Kerbel’s repudiation was apparent through its conduct “on the ground”. Romandale argues that it immediately and consistently thereafter conducted itself to control the development of the Lands to the exclusion of Kerbel (and Fram), inconsistent with the express terms of the August 2005 Agreement and the intention to transfer the Lands to Kerbel. Romandale also argues that its acceptance of Kerbel’s repudiation was also apparent from the substantive positions asserted by its counsel, including its initial (failed) attempt at amending its pleadings to have the court declare that the August 2005 Agreement was terminated.

[135] This position is disputed by Fram and Kerbel who argue that Kerbel did not repudiate the August 2005 Agreement and that in any event, Romandale did not accept the repudiation.

Exclusion of Fram and Kerbel from the development of the Lands

[136] As already stated, the Settlement Agreement provided that Fram and Kerbel were to take over control of the development of the Lands and that Romandale no longer needed to maintain control over development in order to comply with the COAs. Romandale argues that it alone was developing the Lands to the exclusion of Kerbel, making it patently clear that it intended to maintain ownership of the Lands and not sell to Kerbel. The act of completely excluding Kerbel from control of development was contrary to the terms of the Conditional Agreement.

[137] It is clear from the evidence at trial that, following the Settlement Agreement, Romandale has maintained control over the development of the Lands while excluding Fram and Kerbel and that Fram and Kerbel have only observed Romandale’s efforts regarding the Lands’ development.

[138] The evidence establishes the following:

a) Romandale, to the exclusion of Kerbel and Fram, has had control over development of the Lands from the time of the Settlement Agreement onward (and before, as discussed above).

b) Since the Settlement Agreement, all Kerbel and Fram have been able to do is monitor Romandale’s activities and positions with respect to the Lands.

c) Romandale has shut Kerbel and Fram out of the development process for the Lands and Romandale has not been cooperating with Kerbel or Fram.

d) Kerbel and Fram have done nothing outside of the NMLG specifically in respect of the Lands.

e) Romandale opted to leave the NMLG altogether in 2013 and represented the Lands independently.

f) To the extent that Fram and Kerbel participated in the NMLG after Romandale’s departure in 2013, they remained observers of what Romandale was doing outside of the NMLG (to the extent they could). They participated in the NMLG only in respect of their minority interest in the Lands, such that Romandale continued to exercise exclusive control over the Lands even after its departure from the NMLG.

g) Romandale alone has been and continues to speak on behalf of the Lands, including by bringing site-specific appeals and entering direct Minutes of Settlement with the City of Markham in 2012.

[139] Both Fram and Kerbel swore affidavits in 2012, in the context of a Provincial offence proceeding, wherein they confirmed that:

… Romandale has consistently excluded [Fram and Kerbel] from any involvement with the management of the Subject Lands;

This exclusion extends to the development process for these lands.[Fram and Kerbel have] only been able to monitor this process by attending meetings hosted by the Region or neighbouring landowners.

… [Fram and Kerbel have] no role in the management of the Subject Lands … [Emphasis added]

[140] At trial Mr. Giannone admitted that Kerbel and Fram have only been monitoring Romandale since the Settlement Agreement:

Q: And Kerbel also does not have control over the decision-making for development, right?

A: He’s supposed to have control, but he doesn’t.

Q: Romandale does.

A: Yes.

Q: Romandale has been exercising control, to the exclusion of Fram and Kerbel.

A: Yes.

Q: Since the settlement, all Fram and Kerbel are doing is monitoring.

A: Yes. [Emphasis added]

[141] Similarly, Mr. Kerbel admitted that Romandale was not cooperating under the August 2005 Agreement and that Romandale had shut Kerbel out of planning and development:

Q: And you were never, that never happened, right? Since 2011, whether you’ve monitored or not -

A: Oh, wow.

Q: -- it has been Romandale and Romandale alone who’s addressed the development of the Snider and McGrisken farms, right?

A: Yes.

Q: Okay. Romandale shall - since 2011 Romandale shut Kerbel out of development, true?

A: As of 2011 they did, yeah.

Q: And it was Romandale and only Romandale that represented the Snider and McGrisken farm before the [NMLG] for the time that it was in - a member, which was between 2009 and 2013. Would you agree with that?

A: I agree.

Q: In 2013, April, Romandale quit the [NMLG] and withdrew the Snider and McGrisken lands, right?

A: Yes.

Q: Whatever [Mrs. Roman-Barber] did, your evidence is that as at 2011, Romandale stopped acting in accordance with your agreement with her?

A: Yes.

Q: And you knew that? You’ve known to this day she continues to take - to do that?

A: Yes.

Q: When I say “she” I mean Mrs. Roman-Barber, but to this day Romandale continues to do that?

A: Yes.

Q: I’m talking about planning and development of the Snider/McGrisken lands. Romandale shut you out, starting after the Minutes of Settlement [Settlement Agreement], and continued in that conduct until this day?

A: And I said yes. [Emphasis added]

[142] Fram and Kerbel’s exclusion from the development process for the Lands is reinforced by the productions made during discovery and the documentary evidence filed at trial. In particular, Fram produced no documents at all relating to the development of the Lands. Kerbel has produced virtually no documents touching upon the development of the Lands pre-dating 2013. The documents that Kerbel produced dated after 2013 confirm that from 2013 onward, when Romandale left the NMLG, Romandale alone continued to exercise exclusive control over the development of the Lands. Romandale was, to Kerbel’s knowledge, actively participating in the City of Markham’s development and planning process for the Markham Future Urban Area (“FUA”) and making direct submissions on behalf of the Lands to government authorities, including the City of Markham. Kerbel took no steps to prevent Romandale from continuing to represent the Lands in this regard.

[143] Joanne Barnett, the Vice-President of Planning and Development for Kerbel, acknowledged in cross-examination that as of October 2017 (about seven years after the Settlement Agreement and joint venture was entered into by Kerbel and Fram), Kerbel representatives were not making any submissions in respect of development of the Lands on behalf of the Lands. Ms. Barnett/Kerbel acknowledged, in responding to an undertaking given by Kerbel to produce “all submissions, appeals, applications and documents submitted by Kerbel entities or Kerbel representatives to the government regulatory bodies etc., with respect to the Snider/McGrisken lands”, that:

The submissions made by Kerbel representatives were made as part of the FUA Markham class environmental assessment, made on behalf of the NMLG. Kerbel representatives’ submissions did not include anything related to Snider/McGrisken because Romandale prevented Kerbel or NMLG consultants from entering the lands … [emphasis added]

[144] The evidence of Romandale’s planning consultant, Robert Forhan, was also consistent with Kerbel’s and Fram’s evidence and further reinforced that Romandale has consistently been in control of the development process in respect of the Lands and remains in control to this day. Not only has Romandale continued to control the planning and development process of the Lands (to the exclusion of Fram and Kerbel), it has also achieved positive results with respect to the Lands.

[145] It is also significant that Fram and Kerbel did not take any substantive steps in response to Romandale’s actions in respect of it maintaining control over the development of the Lands. It was not until 2016 that Kerbel took any steps to try to enforce the August 2005 Agreement by commencing claims for specific performance of the Conditional Agreement in a 2016 Action (“16 Action”), which it repeated in a crossclaim advanced in the 07 Action (“2007 Crossclaim”).

Correspondence from Romandale’s counsel

[146] Kerbel readily admitted at trial that it knew in 2011 that Romandale was not acting in accordance with the August 2005 Agreement. Romandale openly voiced its disagreement with the Settlement Agreement and expressed its view that the August 2005 Agreement was terminated:

a) In a letter dated January 28, 2011, counsel for Romandale advised counsel for Fram and Kerbel that it strongly rejected and objected to the fact that Kerbel’s planner Ms. Barnett had advised the NMLG that there was a change in ownership of the Lands. This letter did mistakenly take the position that the Conditional Agreement could only close after SPA or the consent of Fram, but it also complained about the “purported ‘consent” in the Settlement Agreement;

b) Romandale continued to represent the Lands at the NMLG and paid Romandale’s share of the costs relating to the Lands at the NMLG, until April 2013, when it left the NMLG;

c) Romandale’s planning consultant, Ms. Santo (and others working for Romandale) were instructed not to share information with Ms. Barnett;

d) By letter dated February 9, 2011, Romandale’s counsel requested of Kerbel’s counsel payment of development costs that were incurred before December 2011. Romandale’s counsel stated that its position was without prejudice “to our argument that by purportedly entering into the settlement agreement with Frambordeaux in late 2010 that your client has, in any event breached the August 2005 Agreement. Our client is considering its rights in that regard”;

e) In a letter dated February 17, 2011, from Kerbel’s counsel to Romandale’s counsel, Kerbel complained about Mrs. Roman-Barber’s unlawful conduct that was consistent with her excluding Kerbel from any participation in the development of the Lands and asserting that this conduct amounted to a breach of the August 2005 Agreement. Kerbel demanded that Romandale confirm to the NMLG that Ms. Barnett had the sole authority to represent the Lands. Kerbel threatened to commence proceedings if Mrs. Roman-Barber did not comply with the terms of para. 5 of the August 2005 Agreement. The assertions in this letter are consistent with Mr. Kerbel’s evidence at trial where he unequivocally admitted that very early in 2011, and certainly by February 2011, he knew Romandale was no longer acting in accordance with the August 2005 Agreement; and

f) On February 25, 2011, Romandale’s counsel responded to the letter of February 17th, denying that Mrs. Roman-Barber had breached the August 2005 Agreement and asserted that “Our client has at all times acted in accordance with the terms of the [August] 2005 Agreement.” Counsel also stated that “[w]e have already advised that we are considering whether your client’s purported settlement with the Frambordeaux interests is in breach of the [August 2005] Agreement (emphasis added). I appreciate that this letter did not take the position that Kerbel had repudiated the August 2005 Agreement as that was still being considered but the evidence is clear that Romandale continued to exclude Kerbel from participation in the development of the Lands and Kerbel took no action as threatened in its letter of February 17, 2011.

Romandale’s position in the litigation

[147] Romandale also began to take steps in the litigation to assert its position that the August 2005 Agreement was at an end. In particular:

a) In the letter of November 18, 2011 Romandale’s counsel circulated a draft proposed Amended Statement of Defence, Crossclaim and Counterclaim in the 07 Action seeking a declaration that the August 2005 Agreement was terminated and seeking payment of historical expenses (up to and including December 3, 2010) which Kerbel had agreed to pay to Romandale under the August 2005 Agreement;

b) Once Fram amended its pleadings in the 07 Action to reflect the Settlement Agreement in March 2012, Romandale moved to amend its pleadings to seek the relief set out in the draft pleadings it had circulated in November 2011 (noted above);

c) In April 2014, after Romandale lost its initial motion to amend its pleadings and while the decision on the appeal of the motion decision was still under reserve, Romandale commenced the 14 Action seeking a declaration that August 2005 Agreement was terminated;

d) In 2015, the Dunphy Endorsement permitted Romandale to amend its defence to Fram’s claim for court approval of the Settlement Agreement the unenforceability of the August 2005 Agreement, and;

e) In 2016 and 2017 respectively, Romandale defended Kerbel’s 16 Action and the 2007 Crossclaim for specific performance of the August 2005 Agreement on the basis that it was no longer enforceable.

[148] Kerbel and Fram however rely on the following lines of reasoning to support their position that if there was a repudiation of the August 2005 Agreement by Kerbel that Romandale accepted that repudiation.

Claims for payment by Romandale

[149] Kerbel and Fram rely on demands made by Romandale for payment of expenses incurred under the August 2005 Agreement as evidence that Romandale still saw the August 2005 Agreement as a live agreement. On the other hand, Romandale submits that these requests of Kerbel for reimbursement and repayment of invoices was also consistent with Romandale accepting repudiation, as Romandale’s demand for repayment related to expenses incurred prior to repudiation. Romandale’s position is that it was actively pursuing repayment of historical invoices while simultaneously returning cheques sent by Kerbel in respect of payment for post-repudiation invoices and that this conduct made it clear that it accepted Kerbel’s repudiation. The returned cheques were in respect of ongoing expenses being incurred in respect of the Lands after the Settlement Agreement was entered into, and Romandale submits that the return of a cheque is the classic evidence of acceptance of repudiation.

[150] The evidence is as follows:

a) By a letter from Mrs. Roman-Barber dated February 23, 2011, she requested repayment of certain expenses, but this request was in relation to past expenses incurred prior to December 2010 that remained unpaid;

b) On March 14, 2011, Romandale provided Kerbel with a draft of the “usual promissory note” for funding the NMLG cash calls, but this related to a January 2011 cash call and expenses incurred prior to January 2011 (i.e., obligations that had already matured before repudiation and acceptance);

c) On June 17, 2011, by an unsigned letter on King David Inc. letterhead, Mrs. Roman-Barber accepted a partial reimbursement of expenses from Kerbel but there is no evidence as to which invoice is referred to or the date of such invoice or what period of time it applied to;

d) On July 18, 2011, Romandale’s consultants recommended sharing information with Ms. Barnett (Kerbel’s VP of Development) in order to cooperate together regarding the Land’s designation. Mrs. Roman-Barber declined because Kerbel “owe[d] her hundreds of thousands of $’s”. Fram and Romandale argue that Mrs. Roman-Barber did not assert that she declined because the August 2005 Agreement was terminated but again, she was looking for payment of expenses incurred prior to January 2011;

e) By letter dated November 18, 2011, counsel for Romandale wrote to counsel for Kerbel and a) returned a cheque from First Elgin dated September 6, 2011 in respect of expenses incurred after December 2010 and b) advised that Romandale intended to amend its Statement of Defence in the 07 Action to ask that the August 2005 Agreement be terminated, and;

f) On February 14, 2012, counsel for Romandale wrote to counsel for Kerbel referring to invoices from MMM, a contractor for the Cathedraltown project, that are itemized in Romandale’s proposed Amended Statement of Defence, Counterclaim, and Crossclaim circulated in November 2011, in which Romandale asserted the August 2005 Agreement was terminated. There were follow up letters sent as well on February 22 and 28, 2012 and March 1, 2012. These letters however were pursuing payment for work done by MMM for the Cathedraltown project that Romandale asserted Kerbel had agreed to be responsible for under the August 2005 Agreement.

[151] In summary, prior to 2010, the evidence is that Kerbel was reimbursing Romandale for development expenses because it was expected that Kerbel would ultimately be the owner of the Lands. Romandale was signing promissory notes in respect of these payments. This did not continue after the Settlement Agreement was entered into in December 2010.

Triple R Lands litigation

[152] Fram and Kerbel rely on Romandale’s litigation in respect of the Triple R Lands price adjustment as further evidence that Romandale was affirming the August 2005 Agreement after December 2010. As Romandale submits however, the sale of the Triple R Lands to First Elgin had been completed and any rights/obligations of the parties, including Kerbel’s possible entitlement to a price adjustment, which was tied to the terms of its Vendor Take Back (“VTB”), had matured.

[153] On February 25, 2013, Romandale and Kerbel entered into Partial Minutes of Settlement in a separate proceeding concerning a purchase price adjustment under the August 2005 Agreement related to the Triple R Lands, which ultimately applied the price adjustment owed by Romandale to be a deduction from the purchase price of the Snider/McGrisken Lands.

[154] Romandale argues that its dispute with Kerbel over the price adjustment of the Triple R Lands is consistent with Romandale’s acceptance of repudiation of the August 2005 Agreement. The Triple R Lands had already closed and any rights/obligations, including Kerbel’s possible entitlement to a price adjustment, had matured.

[155] Furthermore, there could have been no confusion by Kerbel as to Romandale’s position that the August 2005 Agreement was at an end since, at the same time as the Partial Settlement of this Triple R Lands litigation was entered into, Romandale was pursuing a pleading amendment in which it made clear its position that the August 2005 Agreement was terminated.

[156] Romandale concedes that while the outcome of the price adjustment for the Triple R Lands was expected to be adjusted against the purchase price for the Lands under the Conditional Agreement, the parties never got to the point of discussing how the price adjustment would be paid, given Romandale’s position that the Conditional Agreement was repudiated, and because the price adjustment process was never completed. The evidence before this Court makes clear that the process was objected to by Romandale and never moved beyond the “Draft” report phase. As such, no calculation pursuant to the Partial Settlement was ever carried out.

[157] The Court of Appeal decided the issue in First Elgin’s favour on August 6, 2014, in First Elgin Mills Developments Inc. v. Romandale Farms Limited, 2014 ONCA 573 (“2014 ONCA Decision”). Romandale sought leave to appeal to the Supreme Court of Canada, which was denied in 2015. I will come back to this as Fram asserts that this dispute gives rise to a res judicata argument with respect to the enforceability of the August 2005 Agreement.

[158] In summary, the evidence before me is that prior to 2010, Kerbel was reimbursing Romandale for development expenses because it was expected that Kerbel would ultimately be the owner of the Lands. Romandale was signing promissory notes in respect of these payments. There is no evidence that Romandale sought or accepted reimbursement of any expenses incurred after Romandale asserts it accepted the repudiation in January/February 2011.

Romandale commenced an Action in 2014

[159] In April 2014, after Romandale lost its initial motion to amend its pleadings and while the decision on the appeal of the motion decision was still under reserve, Romandale commenced a further action seeking a declaration that the August 2005 Agreement was terminated as a result of the Settlement Agreement (“14 Action”). At this point, these amendments had been rejected by Master Graham and Romandale was unsure if it would succeed in the appeal before Kiteley J. Romandale commenced the 14 Action as a placeholder in the event it lost before Kiteley J.

[160] In the 14 Action, Romandale only sought in the alternative to argue that if the August 2005 Agreement was enforceable, Kerbel was not complying with its development-related duties thereunder. When Mr. Henderson suggested that Romandale’s alternative pleading in the 14 Action was a demonstration of affirmation of the agreement, I asked him whether there was any law supporting this proposition. He responded that “there is going to be lots of law on it” but in Kerbel’s submissions, no law is cited or referenced to support its argument that Romandale’s alternative pleading in the 14 Action is somehow a judicial admission that the August 2005 Agreement was affirmed by Romandale post-repudiation.

[161] I agree with the position of Romandale that after 2010, its primary position in all actions was that the August 2005 Agreement was terminated, and only in an alternative argument in this one action that Romandale alleged that the August 2005 Agreement could still be enforceable. I agree with Ms. Batner that Romandale’s position was clear. This alternative pleading was simply such that should Romandale’s primary position fail, this was its backup.

(I) Fram executes a Consent to the Conditional Agreement

[162] On August 22, 2018, Fram delivered a Notice of Consent and accompanying Consent Agreement (together, “Consent”) to Romandale, both of which were dated August 20, 2018. The Consent purports to amend para. 5 of the Settlement Agreement to move up the closing of the Lands under the August 2005 Agreement from after SPA to now.

[163] According to the Consent, Fram is purporting to provide its consent to the Conditional Agreement under s. 5.03 of the COAs, 11 years after Fram commenced litigation on the basis that it was a breach and was therefore void primarily because it was entered into without Fram’s consent.

[164] Fram consent was, as expressed in the Consent itself, entered into because Kerbel’s interest in the Lands (through 2001251 Ontario Inc.) had not yet vested and would not vest before 2026 because Fram and Kerbel had, in para. 5 of the Settlement Agreement, deferred closing until after SPA, thereby offending the rule against perpetuities.

(J) Current state of the Lands

[165] Currently, the Snider Farm is within the City of Markham’s urban expansion, designated and referred to by the City of Markham as the FUA. It continues to have a proposed employment land use designation. Development remains years away ­– decades away if it is held to secure a residential land use designation.

[166] The McGrisken Farm is not in the City of Markham’s FUA and will not be brought into any urban expansion until after 2031. It remains Whitebelt land for which there is no proposed land use designation. The McGrisken Farm remains countryside and will not be developed for decades.

ANALYSIS

(1) Did Romandale breach the COAs when it entered into the August 2005 Agreement with Kerbel?

[167] When Romandale entered into the August 2005 Agreement with Kerbel – and in particular the Conditional Agreement which forms part of that agreement – Fram asserted that in doing so Romandale breached the COAs in three ways: 1) the Conditional Agreement was a “Disposition” in breach of s. 5.03 of the COAs; 2) Romandale failed to give Fram 20 days’ notice and a copy of the agreement contrary to s. 5.10, constituting a second default under s. 6.01(b) of the COAs, and 3) Romandale breached the provisions of s. 5.10 (last para.) of the COAs by giving Kerbel control over decisions and actions related to development of the Lands. I will deal with each of these issues in turn.

Is the August 2005 Agreement a disposition in breach of s. 5.03 of the COAs?

[168] The crux of Fram’s claim is that the August 2005 Agreement, and in particular the Conditional Agreement, is a prohibited “Disposition” under s. 5.03 of the COAs because Romandale was prohibited from disposing, or making an agreement to dispose, of its entire interest in the Lands without Fram’s consent prior to SPA. Romandale argues that this is not the case because the Conditional Agreement itself is conditional on compliance with the very provisions of the COAs that Fram asserts it breaches. Romandale asserts that two conditions precedent were drafted to deliberately incorporate the two avenues in the COAs pursuant to which Romandale was permitted to dispose of its entire interest in the Lands at the time the August 2005 Agreement was entered into: namely the consent of Fram pursuant to s. 5.03 or the triggering of the Buy-Sell whereby Romandale could purchase Fram’s entire interest (which would be permitted under s. 5.07, the Buy-Sell provisions).

[169] The term “Disposition” is defined in Section 1.01(s) of the COAs as follows:

“Disposition” means the sale (including judicial sale), assignment, exchange, transfer, lease, mortgage, hypothecation, pledge, encumbrance, devise, bequeath or other disposition or agreement for such by a Co-Owner of the whole or part of its Co-Owner’s Interest, and a Disposition shall include an amalgamation, a transfer by arrangement, conversion, exchange, sale, assignment or trust of the Equity Shares or the issue of any treasury shares which in any case would result in a change of Control of a Co-Owner […] [Emphasis added]

[170] The opening language from para. 2 of the August 2005 Agreement is as follows:

… the sale of the Remaining Interest is conditional for the benefit of the vendor and the purchaser on the valid exercise of the buy sell rights under the Buy-Sell Provisions (as defined in paragraph 5 of this Agreement) and the completion of the buy-out of the interest of [Fram], or, in the alternative, the consent of [Fram] to the transaction ... [Emphasis added]

[171] Paragraph 2(c) of the August 2005 Agreement provides that the closing of the sale of the Remaining Interest shall take place 60 days after the earlier of: (1) Romandale obtaining the consent of Fram pursuant to the COAs to the sale of the Remaining Interest to Kerbel or (2) Romandale closing the purchase of Fram’s co ownership interest in the Lands “pursuant to its rights under the Buy Sell Provisions (as defined in paragraph 5 of this Agreement)”.

[172] The definition of the “Buy-Sell Provisions” referenced in para. 2 of the August 2005 Agreement is set out in the last sentence of para. 5 therein and states:

Romandale further acknowledges that the foregoing rights of 2001251 [Kerbel] are intended, without limitation, to permit 2001251 to cause Romandale to trigger Romandale’s buy-sell rights under section 5.07 of each of the Co-Owners Agreements in respect of the Snider/McGrisken Property (collectively, the “Buy-Sell Provisions”) following Secondary Plan Approval being obtained for the Snider/McGrisken Property such that Romandale acquires the co-ownership interest of [Fram] in the Snider/McGrisken Property and then conveys such interest to 2001251 in accordance with this Agreement and to restrict Romandale from dealing with the Remaining Interest or any part thereof in the Snider/McGrisken Property in any way whatsoever, subject to the terms and conditions of the Co- Owners Agreement. [Emphasis added]

[173] As I will come to, Fram and Kerbel take the position that by virtue of this definition of Buy-Sell Provisions, the Conditional Agreement was only performable after SPA if Fram did not consent. This is an issue I will come to when I consider the enforceability of the August 2005 Agreement against Romandale. This issue does not impact on Fram’s argument that this agreement constituted a prohibited “Disposition”.

[174] Fram’s position is that a conditional agreement for the sale of land is a binding agreement to sell and that the existence of conditions precedent in an agreement in “no way negates or dilutes the force” of the obligations set out therein. Instead, the obligations are merely in suspense until the “occurrence of the event constituting the condition precedent”. Even if its performance is suspended by the existence of a condition precedent, a legally binding agreement will exist if, from its words and the events surrounding its formation, it is shown to be what the parties intended.

[175] Romandale argues that Fram’s focus on the “binding” nature of the August 2005 Agreement is misplaced and that it is the conditional nature of the agreement that matters because there is no present/actual alienation of land. I agree. The fact the August 2005 Agreement was binding on the parties is not the point.

[176] First, having regard only to the language of the definition of a “Disposition,” the definition refers to “the sale”, not “a sale” or a future sale once certain conditions are satisfied, nor does the language suggest it could apply that broadly. As a matter of common sense, the term “Disposition” would only be intended to restrict an actual sale or agreement to sell in the present, not at a future date if one of the two conditions were satisfied and Romandale became the 100 percent owner of the lands. As Romandale submits it should be a trite proposition that a conditional agreement, where the conditions precedent call for actual compliance with another contract, cannot in turn be a breach of that other contract. In this case, under the Conditional Agreement, there is no world in which Fram would involuntarily find itself foisted into a co-ownership relationship with Kerbel. Romandale was entitled under the COAs to seek Fram’s consent to a sale at any time (which Fram could refuse if it did not want to enter into a new co-ownership relationship) or to trigger the Buy-Sell according to its terms (under which Fram may have elected to buy, not sell).

[177] Second, restrictions on “Dispositions” in the COAs protects Fram’s interests, as it has direct control over the outcome. Presuming that the intention of the parties in putting restrictions on “Dispositions” in the COAs was to prevent a party from being forced into an undesired co-ownership relationship, Romandale submits that the fact that Fram may have ultimately ended up owning all of Romandale’s interest in the Lands (had it chosen to buy out Romandale when Romandale exercised the Buy-Sell) is perhaps the most obvious evidence that the August 2005 Agreement was crafted to protect, and in no way interfere with, Fram’s contractual rights as a Co-Owner. Both the requirement of consent and the possibility of Fram buying out Romandale’s entire interest under the Buy-Sell provisions confirm that Fram had direct control over the outcome. Similar to the conclusion reached in Trimac Ltd. v. C-I-L Inc., 1989 CanLII 3210, 69 Alta LR (2d) 113 (Q.B.) at paras. 76-77 and 81, in relation to a shotgun option, there was never any possibility of Romandale selling its entire interest to Kerbel as long as Fram either did not consent or chose not to exercise its right of first refusal under the Buy-Sell provisions.

[178] This interpretation is supported by the decision of Wilton-Siegel J. in Barrick Gold Corp. v. Goldcorp Inc., 2011 ONSC 3725, 2012 ONSC 3725, [2012] OJ No 2977. In that case, Wilton-Siegel J. found that a “transfer” did not apply to a conditional sales agreement, which consists of wording similar to the COAs.

[179] First, Wilton-Siegel J. outlined the basic principles of contractual interpretation at para. 223, citing Salah v. Timothy’s Coffees of the World Inc., 2010 ONCA 673, [2010] O.J. No. 4336, at para. 16, as follows:

When interpreting a contract, the court aims to determine the intentions of the parties in accordance with the language used in the written document and presumes that the parties have intended what they have said. The court construes the contract as a whole, in a manner that gives meaning to all of its terms, and avoids an interpretation that would render one or more of its terms ineffective. In interpreting the contract, the court must have regard to the objective evidence of the “factual matrix” or context underlying the negotiation of the contract, but not the subjective evidence of the intention of the parties. The court should interpret the contract so as to accord with sound commercial principles and good business sense, and avoid commercial absurdity. If the court finds that the contract is ambiguous, it may then resort to extrinsic evidence to clear up the ambiguity. Where a transaction involves the execution of several documents that form parts of a larger composite whole – like a complex commercial transaction – and each agreement is entered into on the faith of the others being executed, then assistance in the interpretation of one agreement may be drawn from the related agreements.

[180] Then, at paras. 308-310, Wilton-Siegel J. stated:

[308] The definition of “Transfer” in the Shareholders Agreement is as follows:

“Transfer” means, when used as a verb, directly or indirectly, to sell, grant, assign, create an Encumbrance on, pledge or otherwise convey, or dispose of or commit or promise to do any of the foregoing, and when used as a noun, means a direct or indirect sale, grant, assignment, Encumbrance, pledge, conveyance, or other disposition.

[309] There is no dispute that this term is broader than the term “transfer” would be defined under Chilean law in at least three respects. It includes the creation of an “Encumbrance”, which is defined in the Shareholders Agreement in broader terms than under Chilean law. When the term “transfer” is used as a verb, it also includes a commitment or promise to any of the actions that constitute a Transfer. Lastly, it includes indirect transactions that have the effect of a Transfer.

[310] Article 10 contains a self-contained code prohibiting all transactions that would constitute a Transfer by a shareholder of its Rights and Interests, except to the extent such transactions comply with the provisions therein. [Emphasis added]

[181] Romandale argues that the definition of “Transfer” before Wilton-Siegel J. also included a “commitment” or “promise” to sell in the same way that the definition of Disposition includes an “agreement to sell”. I agree.

[182] Wilton-Siegel J. went on to interpret the definition of “Transfer” and concluded that only unconditional Transfers could ever be intended to be captured by such a definition:

[334] Based on the principles of contractual interpretation set out above, I conclude for the reasons set out below that a Transfer occurs in respect of an agreement to convey or otherwise dispose of some or all of a shareholder’s Rights and Interests when the agreement becomes an unconditional agreement.

[335] This conclusion is based on the plain meaning of the definition of Transfer. The definition uses the words “commit or promise”. This language is straightforward and unconditional. There is no language in the definition that would support the conclusion that a conditional agreement could give rise to a Transfer.

[337] Consistent with these principles, an interpretation of the words “commit or promise to do any of the foregoing” must refer to an unconditional commitment or promise. An interpretation that would result in a Transfer on the date a conditional agreement is executed would impose a restriction on the right of a shareholder to transfer its Rights and Interests in the El Morro Project that is unnecessary for the protection of the interests addressed by Article 10.

[340] …If parties enter into a binding agreement containing a commitment or promise to convey Rights and Interests that is conditional upon the satisfaction of one or more events, the agreement will not give rise to a Transfer at the date of its execution. A Transfer will only arise upon satisfaction of the relevant conditions. In such circumstances, a proposed Transfer that might otherwise be a prohibited Transfer on the date of execution of the agreement may instead become a permitted Transfer as of the date the condition is satisfied and the Transfer arises. [emphasis added]

[183] I agree and adopt this analysis by Wilton-Siegel J. of the meaning of a prohibited Transfer. The very same reasoning applies to prohibited “Disposition” in the COAs. I note two additional observations.

[184] First, the second part of the definition of “Disposition” in s. 1.01(s) states that a disposition “shall include an amalgamation, a transfer by arrangement, conversion, exchange, sale, assignment or trust of the Equity Shares or the issue of any treasury shares […]”. This also suggests that a conditional agreement to sell does not meet the definition.

[185] When editing my Reasons for Decision, my law clerk drew my attention to a Supreme Court of Canada decision, Société en commandite Place Mullins v. Services immobiliers Diane Bisson inc., 2015 SCC 36, [2015] 2 SCR 699, which reinforces the conclusion I have come to in reliance on the reasoning in Barrick Gold Corp. In that case, the court considered an agreement dealing with a real estate broker’s compensation. The seller signed an exclusive brokerage contact with the broker under which they gave the broker a mandate to sell their “immovable” (the facts suggest it was land). The agreement states that the seller shall pay the broker a compensation “where an agreement to sell the immovable is concluded during the term of this contract […]” [emphasis added]. The broker was able to find a buyer. However, after conducting some due diligence, the buyer said that he was only willing to buy the land on condition that the seller decontaminate the soil of the immovable. Ultimately, the sale did not go through. The broker then brought its action for compensation. The court then had to consider whether the “agreement to sell the immovable” was validly “concluded”.

[186] The court noted that while the wording of the clause is broad, the sale must be unconditional in order for the broker to be paid. At paras. 12 to 14, Wagner J. (as he then was), wrote:

[12] Clause 6.1(3o), provides that the broker is entitled to the commission once an [translation] “agreement to sell the IMMOVABLE” is concluded (emphasis added). A sale is therefore not necessary. The wording of the clause is broad enough to encompass a promise to purchase accepted by the promisor-seller, but in my opinion, the obligations that flow from such a promise must also become certain, that is, unconditional.

[13] In this case, clause 4.14 of the promise to purchase gave Mr. Douek [the purchaser] a right to withdraw the promise if he was not completely satisfied with the results of his due diligence. To withdraw the promise if he was dissatisfied with those results, Mr. Douek had to give written notice to that effect to the promisor‑seller within the specified time. The promise to purchase therefore remained conditional until it was withdrawn or until the expiration of the time in question.

[14] In principle, where a contract contains a resolutory condition, the obligations for which the contract provides nevertheless arise and are exigible, as if they were pure and simple, as soon as it is signed (D. Lluelles and B. Moore, Droit des obligations (2nd ed. 2012), at No. 2498). Thus, even though the promise to purchase could be resolved, it was binding on the parties as soon as it was concluded. Although this may at first glance seem sufficient for the purposes of clause 6.1(3o), I am of the opinion that so long as a promise to purchase is not unconditionally binding on the promisor‑buyer and the promisor‑seller and it is not yet possible for one of them to bring an action to compel transfer of title, there is no “agreement to sell the IMMOVABLE” within the meaning of clause 6.1(3o) [emphasis added]

[187] While the agreement in Société en commandite Place Mullins is worded differently from the COAs, the court’s reasoning is applicable to the case at hand. In the context of a land purchase, the court agreed that an “agreement” to sell must be unconditional. As previously noted, the August 2005 Agreement contains a Conditional Agreement. While there is an “agreement” by Romandale to sell to Kerbel, it does not mean this agreement is a “Disposition”, as the sale is not unconditional.

[188] Romandale makes several additional arguments in support of its position in its Closing Submissions. I need not deal with all of them given the conclusion I have come to, but two are very persuasive. First, Fram and Kerbel have conceded that by entering into the Consent dated August 20, 2018, the Conditional Agreement was not a Disposition, as it acknowledges that no interest in the Lands vested to Kerbel. Fram and Kerbel entered into the Consent Agreement to pre-empt the fact that the Settlement Agreement made the Conditional Agreement void for perpetuities. The Conditional Agreement would only be void for perpetuities if no interest in land had already vested. If there had been a sale, or an agreement for a sale, an interest in land would have vested immediately, thereby avoiding any perpetuities issue.

[189] Second, I agree with Romandale’s assertion that the Consent does away with Fram’s claim. By definition, any disposition consented to by Fram is permitted under the COAs. Fram cannot both consent to the August 2005 Agreement and also allege that it is a breach of the COAs. The August 2005 Agreement cannot exist simultaneously as an impermissible disposition and as a permissible disposition.

[190] For these reasons I conclude, as submitted by Romandale, that the meaning of “Disposition” in the COAs is limited to unconditional present alienations of the parties’ interest in the Lands. The fact that the August 2005 Agreement was otherwise “binding” on Romandale at the time it was entered into has no impact on this conclusion.

Did Romandale fail to give Fram 20 days’ notice and a copy of the August 2005 Agreement and if so did this constitute a second default under s. 6.01(b) of the COAs?

[191] Fram alleges that Romandale concealed from Fram or failed to disclose or misrepresented the existence of the true terms of the August 2005 Agreement for nearly two years and that it only produced a copy of the agreement to Fram on July 11, 2007, after Fram had commenced litigation. Based on this factual allegation, which Romandale disputes, Fram argues that it has a remedy for negligent misrepresentation and that this constituted a second default under s. 6.01(b) of the COAs. Fram argues that this breach resulted in losses to Fram, namely the opportunity to trigger the Default Purchase Right in August 2005, thereby losing the difference in value between 95% of FMV in August 2005 and in July 2007. There is no dispute that this assertion only applies to the Conditional Agreement contained in the August 2005 Agreement, not the other transactions in that agreement which were unrelated to Fram or the Lands and therefore required no notice to Fram.

[192] The simplest answer to this argument is that Romandale did not have any obligation to disclose the August 2005 Agreement to Fram pursuant to any term of the COAs. The COAs set out specific instances in which disclosure is required in relation to agreements to sell an interest in the Lands and the only provision that applies prior to SPA is s. 5.10, which only requires Romandale to provide Fram with 20 days’ notice of a bona fide arm’s length offer to purchase an interest that does not exceed an undivided 39% interest in the Lands. Sections 5.04 and 5.05 only apply after SPA. Accordingly, except for the sale of the initial 5% interest to Kerbel (the First Sale), the August 2005 Agreement is not captured by any provision requiring notice under the COAs.

[193] Given there is no provision in the COAs requiring Romandale to disclose the August 2005 Agreement immediately upon executing same, or at any time thereafter, even if I were satisfied that disclosure was not made by Romandale, which I appreciate Romandale disputes, that could not constitute a breach of the COAs, and it could not be used by Fram as a basis for obtaining a remedy.

[194] Fram asserts that Romandale’s alleged failure to disclose the August 2005 Agreement was a breach of the organizing principle of good faith and Romandale’s duty of honesty in contractual performance, relying on the Supreme Court of Canada’s decision in Bhasin v. Hrynew, 2014 SCC 71, [2014] 3 SCR 494, at paras. 65 and 73. However as the court stated at para. 73, this duty to not lie or otherwise knowingly mislead does not require a party to forgo advantages flowing from the contract. The court went on, at para. 86, to make it clear that the duty of honest performance should not be confused with a duty of disclosure and referred to United Roasters Inc. v. Colgate-Palmolive Co., 649 F.2d 985 (U.S.C.A. 4th Cir. 1981) with approval, stating, at para. 87, that this case makes it clear that there is no unilateral duty to disclose information relevant to termination. In my view the same principle applies here. A party to an agreement need not provide disclosure of any intentions or notice beyond that which is stipulated in their contractual notice requirements. Fram cannot rely upon the duty of honest performance to impose an obligation on Romandale to disclose the August 2005 Agreement, as that duty does not exist in the COAs.

[195] Without a right to disclosure, Fram’s claims for fraudulent and negligent misrepresentation must also fail. Fraudulent and negligent misrepresentation both require reliance by the plaintiff. Without any obligation on Romandale to have disclosed the August 2005 Agreement in the first place, there was nothing for Fram to rely on. The fact that Romandale did not provide a copy of the entire August 2005 Agreement to Fram should not have caused Fram to conclude that no such agreement was entered into. Fram had enough information to know that some sort of agreement had been entered into between Romandale and Kerbel. As a result, Fram’s claims for non-disclosure, and fraudulent and negligent misrepresentation cannot be made out.

Did Romandale breach the provisions of s. 5.10 of the COAs by giving Kerbel control over decisions and actions related to development of the Lands?

[196] Fram takes the position that para. 5 of the August 2005 Agreement constitutes a breach of s. 5.10 of the COAs as it purports to grant Kerbel exclusive control over decision making powers regarding development of the Lands. Section 5.10 of the COAs provides that any purchaser of less than 39% of Romandale’s interest:

… shall agree in writing that following such purchase and sale the Co-Owners Committee shall remain the same and that the representative of Romandale shall also be the representative of the purchaser [and] that all decisions and actions of Romandale and the purchaser under or pursuant to this Agreement (including the exercise of all rights hereunder) shall be made by Romandale alone.

[197] Paragraph 5 of the August 2005 Agreement is entitled “Irrevocable Appointment” and provides in part as follows:

… Romandale hereby irrevocably appoints 2001251 as its exclusive true and lawful attorney and agent having full power of substitution, and 2001251 is hereby fully authorized as such to act on behalf of and/or give binding instructions to Romandale solely in connection with the exercise of the buy sell rights pursuant to the Buy Sell Provisions (as hereinafter defined). Romandale agrees that any and all decisions, operations, conduct and actions relating to the development of the Snider/McGrisken Property shall be within the exclusive control of 2001251 and Romandale shall assist in facilitating such control to comply with Section 5.10 of the Co-Owners Agreements over all decisions, operations, conduct and action exercisable by Romandale relating to the development and obtaining of development approvals for the Snider/McGrisken Property. … Romandale and 2001251 shall cooperate in getting the Snider/McGrisken Property included under the Town of Markham urban envelope for development purposes, and Romandale shall take all reasonable steps to reduce land wastage to as small an amount as possible, using Joanne Burnett, Jeff Kerbel and/or his designate to act on behalf of Romandale in taking such steps.

[198] Romandale acknowledges that the drafting of this paragraph in the August 2005 Agreement could be clearer and that on its face, the terms of para. 5 might appear as though Romandale agreed to cede control over development of the Lands to Kerbel. Romandale argues however that the conduct of Romandale and Kerbel at the time and thereafter makes it clear that the parties intended at all times to comply with s. 5.10 of the COAs.

[199] On June 6, 2006, First Elgin (Kerbel) signed an Agreement (the “June 2006 Agreement”), concurrent with the closing of the First Sale, acknowledging that the Co-Owners Committee as defined in the COAs would remain the same, that the representative of Romandale on the Co-Owners Committee would also be First Elgin’s representative and that “all decisions and actions of Romandale and the undersigned, or pursuant to the COAs, including the exercise of all rights thereunder, shall be made by Romandale alone. … including the exercise of all rights thereunder, shall be made by Romandale alone”. Fram was provided with a copy of this agreement.

[200] However, on the same date Romandale signed an Acknowledgment that notwithstanding the June 2006 Agreement, para. 5 of the August 2005 Agreement remained in:

full force and effect, and that the terms and conditions of the Agreement [the June 2006 Agreement] do not and shall not be interpreted as to delete, supercede, replace, waive or release any of the terms and provisions of the Letter Agreement [the August 2005 Agreement] and the terms and conditions of the Letter Agreement shall remain paramount as they affect the sale of the Snider/McGrisken Lands, or the remaining interest thereof.

The parties hereto agree to cooperate to ensure that the compliance of the parties with their obligations under the Letter Agreement do not result in a breach of the obligation of Romandale under the Agreement [the June 2006 Agreement].

[201] Mr. Giannone acknowledged that the June 2006 Agreement Fram was provided with complied with s. 5.10 of the COAs. Romandale argues that the combined effect of the Acknowledgment and June 2006 Agreement was intended to reinforce compliance with s. 5.10 of the COAs, as set out in para. 5 of the August 2005 Agreement. I do not accept that submission as the Acknowledgement essentially cancelled out the June 2006 Agreement. Presumably that is why a copy of the Acknowledgment was not provided to Fram.

[202] Considering the language of para. 5 of the August 2005 Agreement, to say that it is unclear is in my view an understatement. The opening sentence provides that Romandale appoints 2001251 [Kerbel] as its agent “solely” in connection with the Buy-Sell provisions in the COAs. This makes sense as it was Kerbel’s intention to buy Romandale’s remaining interest in the Lands and so it would want control over when Romandale triggered the Buy-Sell. The second sentence, which is the one I presume Fram relies on, on the one hand gives 2001251 exclusive control over all development decisions but Romandale is to assist in facilitating such control “to comply with Section 5.10” of the COAs. The balance of the paragraph provides for the parties to work cooperatively.

[203] Certainly, one interpretation of para. 5 of the August 2005 Agreement is that by its terms Romandale breached s. 5.10 of the COAs. That interpretation, however, would render the stated requirement that the parties cooperate to ensure Romandale’s compliance with s. 5.10 of the COAs meaningless. Of assistance, given the lack of clarity with the meaning of this paragraph, is the actual conduct of the parties. As I have reviewed, the evidence makes it clear that Fram, Kerbel and Romandale all acknowledged at trial that as a factual matter Romandale maintained control over decisions respecting the Lands and their development even after the Settlement Agreement was entered into. In other words, as Romandale argues, even if there is an interpretation of the August 2005 Agreement which can be fairly said to contemplate Romandale relinquishing control over the decision-making in the Lands to Kerbel in contravention of the COAs, this never actually occurred. In that regard the evidence is clear that in fact Romandale was always the one managing and controlling development of the lands. Romandale, not 2001251 or Kerbel, represented the Lands as it had before. I have already reviewed some of this evidence, but, in summary:

a) Mr. Giannone conceded that Romandale managed the development of the Lands from 2005 to 2010;

b) Mr. Kerbel acknowledged that the parties were mindful of not contravening Fram’s rights under the COAs concerning control over development and that the August 2005 Agreement contemplated that Romandale had to be “in charge”;

c) Mr. Kerbel also admitted multiple times that First Elgin (which was overseeing the development of the Triple R Lands) was only ever monitoring Romandale’s efforts in relation to the Lands; and

d) Mr. Kerbel acknowledged that after signing the August 2005 Agreement, Kerbel did not take steps on behalf of the Lands, as Romandale had its own consultant, Diana Santosss, representing the Lands. When Kerbel joined the NMLG in 2008, it only joined on behalf of the Triple R Lands, not the Snider and McGrisken Farms. Romandale represented the Lands at the NMLG when it joined in 2009. After that point, to the extent Kerbel had any involvement at the NMLG with respect to the Lands, it was merely monitoring.

[204] Given the actual conduct of Romandale and Kerbel, the better interpretation of para. 5 of the August 2005 Agreement is that the parties agreed that any ceding of control to Kerbel over the development of the Lands had to comply with s. 5.10 of the COAs. In any event, as Romandale argues, even if para. 5 of the August 2005 Agreement constituted a breach of the COAs, it was not a material breach and therefore not an Event of Default as defined in s. 6.01 (b) of the COAs for the following three reasons:

a) First, Fram’s rights remained unimpacted by any granting of control to Kerbel as Fram’s rights over decision making as a member of the Co-Owners Committee is limited solely to “Major Decisions” (as defined in s. 1.01 (z)) by virtue of s. 3.02 of the COAs), none of which have yet arisen since the August 2005 Agreement was entered into and all of which have to be made unanimously with Romandale in any event. Romandale reserved decision-making authority over all other matters in respect of the Lands under the COAs as per ss. 3.09 and 3.11.

b) Second, insofar as granting control over the Buy-Sell right is concerned, this too did not impact Fram’s rights in any way. To begin with, the Buy-Sell right was an independent decision to be made by either Co-Owner. When Romandale granted control of its Buy-Sell right to 2001251, it did not prejudice Fram’s interests, as Romandale could always have triggered its Buy-Sell right according to its own interests. Further, the August 2005 Agreement did not impede Fram’s ability to exercise its Buy-Sell right as it saw fit.

c) Finally, Fram’s own conduct after Romandale entered into the August 2005 Agreement confirms there was no impact on Fram’s rights. In particular, Fram experienced no discernable impact in Romandale’s management of the Lands, even after having its counsel review the August 2005 Agreement and commencing litigation, Fram never sought to enjoin or restrict Romandale’s purported transfer of control (despite seeking other injunctive relief). Fram had no interest in managing development and continued to let Romandale do so.

[205] In short, I find that Romandale did not breach its obligations under s. 5.10 of the COAs. Had I found otherwise, I would have found that to the extent it did, any such breach was technical, immaterial, and had no impact on Fram’s substantive rights under the COAs. It was not the sort of “material” breach required by s. 6.01(b) of the COAs that gave rise to an Event of Default and the ability of Fram to force a below-market alienation of Romandale’s majority ownership interest. For these reasons any remedy Fram asserts based on an alleged breach of s. 5.10 of the COAs is dismissed.

(2) Is Fram entitled to claim damages under the Default Purchase Right of the COAs?

[206] I have found that Romandale was not in default of the COAs and that even if it was, any default was not material. Romandale argues that even if this Court finds that it was in material breach of the COAs (thereby giving rise to an Event of Default), Fram is not entitled to claim under the Default Purchase Right. Although this issue is now moot, I will deal with it briefly, as it was argued at length.

[207] Romandale’s position is that Fram is not entitled to claim under the Default Purchase Right clause because:

a) There is no longer a “continuing” Event of Default, which is a necessary pre-requisite to the carrying out of the Default Purchase Right; and in any event

b) Fram did not avail itself of the contractual Default Purchase Right properly or in time, such that it cannot now attempt to receive damages in lieu of specific performance of the Default Purchase.

[208] Dealing with Romandale’s first point, s. 6.02 of the COAs states: “[I]f an Event of Default has occurred [as defined in s. 6.01] and is continuing, a Non-defaulting Party shall have the right to” [emphasis added] seek certain remedies, which include specific performance, equitable remedies, and an action at law to recover damages.

[209] Romandale argues that there is no continuing default at this point, for two reasons:

a) The Conditional Agreement in the August 2005 Agreement is unenforceable (this is an issue I will come to); and

b) Even if the Conditional Agreement is enforceable, Fram purported to consent to it pursuant to s. 5.03 of the COAs, thereby resolving any alleged breach of the COAs arising from the Conditional Agreement and removing the basis on which the Default Purchase Right could even have been triggered in the first place.

[210] I agree with Romandale that if I find that the Conditional Agreement is unenforceable, there can be no continuing default.

[211] If I find that the Conditional Agreement is enforceable, Romandale argues that Fram’s assertion that the Consent has no impact on its claim under the COAs has no basis in law. Fram asserted that the consent was entered into in “mitigation” of the risk that the Conditional Agreement may be void for offending the law of perpetuities. Romandale argues that one does not mitigate against risk on a “without prejudice” basis. One must live by the consequences of any new bargain struck, whatever the consequences may be.

[212] I agree. Fram’s non-consent was the main basis upon which Fram alleged the Conditional Agreement was a breach of the COAs. Fram’s own admission that in order to consent in 2018 it had to “withdraw” its prior non-consent unwittingly exposes the inherent tension in Fram’s position since the Settlement Agreement. Fram cannot both not consent and consent to the same deal. If the initial refusal to consent is erased, then even on Fram’s own argument there cannot have been a continuing breach in the first place. I also agree with Romandale that it would be unfair to award Fram a remedy premised on its non-consent to the Conditional Agreement, when it has since explicitly consented to that agreement. (The reasons for it having done so are irrelevant.) In so doing, it invalidated any remedy which may have been available to it under the Default Purchase Right.

[213] Turning to Romandale’s second point; at trial, Mr. Giannone testified (and Fram’s counsel submitted) that Fram deliberately did not proceed with the appointment of a third appraiser because Romandale was taking the position that it was not in default. I have set out the evidence of the correspondence passing between counsel for Fram and Romandale on that issue, which confirms that was Fram’s position and that Romandale insisted that the process set out in the COAs be followed.

[214] Mr. Giannone testified for the first time at trial (notably, during his live examination in chief and in cross, and not in his affidavit) that he had the financial means to carry out a purchase of the Lands under s. 6.02(d) of the COAs. Romandale argues that Mr. Giannone’s evidence on Fram’s ability to carry out a purchase of Romandale’s interest in the Lands at 95% of FMV is unreliable. I agree. Mr. Giannone was impeached on this very point by prior testimony wherein he asserted that Fram did not know whether it “could have or couldn’t have” come up with the money for the purchase. Having never tendered a cheque I am not at all satisfied that Fram would have been able to close such a deal even if it had wanted to.

[215] Fram’s position is that through counsel, it repeatedly attempted to engage Romandale to agree on how to proceed with the appraisal process, in light of Romandale’s denial of its default. Fram’s counsel set out the difficulties inherent in obtaining appraisals given Romandale’s denial of its default, and that the appraisals would not be able to ascertain the extent of Romandale’s interest in the Lands since it remained for the court to determine whether Romandale’s interest was 95% of the Lands or 90.25% following the April 2006 sale or 83.6% following the June 2007 sale agreement. The encumbrances to which Romandale is subject with respect to the Lands also had to be assessed and accounted for in determining FMV including the effect of the August 2005 Agreement. Fram argues that all of these fell to be determined in the actions before me, in order to determine the FMV of Romandale’s interest.

[216] I do not accept Fram’s argument. As a matter of common sense, one would expect that virtually any time a party took the position that the other party was in default, the other party would deny it. Fram argues that instead of proceeding with the appraisal and sale Fram initiated, Romandale “stymied the process by refusing to acknowledge its default” and failing to respond to Fram’s proposals. This is a ridiculous submission. Virtually all defendants accused of a breach of contract would deny that they have breached their obligations. That in my view does not relieve a plaintiff from doing what it must to enforce contractual remedies. Fram’s position means that the process for setting a value for the Lands – namely Fram’s damages – has not been completed even though I see no reason why it could not have been. Furthermore, the position Fram took would render what the parties agreed to, as a process for determining the value of the Lands, as a process that would never in fact be utilized. Fram’s position rendered the agreed upon appraisal process meaningless. That could not have been the intention of the parties.

[217] The Default Purchase Right clearly contemplates a determination of FMV of the entirety of the Lands, following which the total value is to be multiplied by the Co-Owner’s interest in the Lands to determine the value of that Co-Owner’s stake. In other words, once FMV is determined under the Default Purchase Right (i.e., by averaging the two closest of three appraisers), one would need only to multiply that figure by whatever percentage of the Lands Romandale then owned based on this Court’s findings. Fram could have easily calculated all scenarios and tendered a purchase price based on Romandale owning 95% of the Lands, consistent with its theory that it was entitled to unwind the 5% sale. Furthermore, it is not at all unusual for appraisers to make certain assumptions and that could readily have been done in this case.

[218] I agree with Romandale that Fram had to adhere to the Default Purchase Right’s terms strictly and demonstrate that it was ready, willing, and able to perform its part, particularly when Romandale consistently advised that is was willing to engage in the process.

[219] It is no excuse that Romandale did not agree it was in default, as Romandale was otherwise ready, willing, and able to work through the terms of the Default Purchase Right. Furthermore, Romandale had no obligation to agree to some other process and in fact insisted that Fram comply with the procedure set out in ss. 6.02(d) and 6.03. Quite apart from the fact that Fram failed to deliver a Second Notice, the evidence at trial confirms that, following numerous exchanges between Fram’s and Romandale’s counsel, despite Romandale’s position that Fram adhere to the terms and process provided for in the COAs and confirm the retainer of Altus and appoint a third appraiser, Fram chose not to perform the s. 6.03 valuation process because Mr. Giannone admitted that Romandale was disputing it was in default. I agree with Romandale’s submission that Fram was simply “hedging its bets”, attempting to keep its option open under s. 6.02(d) and tactically tying up the Lands until a later time when it could be sure that it wanted to purchase the Lands, particularly since following through on that procedure would have required Fram to pay cash up front to close the deal.

[220] For these reasons I agree with the submissions of Romandale that Fram was required to follow the specific process set out in ss. 6.02(d) and 6.03 of the COAs in order to exercise its rights under those provisions. Fram’s failure to do what it was contractually required to do means that it is not entitled to claim any remedy under the Default Purchase Right and in particular seek specific performance.

[221] In any event, for the reasons I will come to, I do not accept Fram’s argument that it has a contractual right to specific performance.

(3) Did Romandale breach the CMAs when it entered into the August 2005 Agreement with 2001251?

[222] In the 08 Action, Fram claims against Romandale for the loss or impairment of its rights under the CMAs because Romandale failed in the August 2005 Agreement and subsequent related agreements to require Kerbel to be bound by Romandale’s obligations to Fram Construction under the CMAs. Fram claims that by entering into the August 2005 Agreement, Romandale breached the CMAs in that it did not require Kerbel to be bound by its obligations to Fram under the CMAs. Romandale naturally takes the position that it did not breach its obligations under the CMAs by entering into the August 2005 Agreement with Kerbel.

[223] Fram argues that Romandale’s entry into the August 2005 Agreement breached the CMAs as follows:

(a) s. 4.3(1)(a) in that it is tantamount to an attempt by Romandale to terminate the agreement without cause;

(b) s. 4.3(1)(c) in that it is tantamount to entering an agreement to sell their interest in the lots to a third party without requiring the third party to assume the co-owner’s obligations to the Construction Manager;

(c) s. 10.6(1), which stipulates that the agreement shall be binding upon successors and permitted assigns; and

(d) Romandale breached the principle of good faith.

[224] Fram argues that s. 2.4 of the CMAs expressly provides that it is the intention of the parties to cause Units to be constructed on the Lands to be sold to third party homebuyers to maximize profits for the Co-Owners and the Construction Manager and that under the CMAs, Fram has the right to acquire and build Units for resale, and to split the profits of the construction with Romandale.

[225] Section 4.3(1)(c) of the CMAs provides that a Co-Owner shall be in default of the CMAs:

Immediately upon the Construction Manager providing reasonable evidence to the Co-Owners that the Co-Owners have entered into an agreement to sell their interest in Lots (but have not yet closed the transaction) to a third party without requiring such third party to assume the Co-Owners’ obligations to the Construction Manager under this Agreement; provided, however, that this subparagraph shall not apply to the Co-Owners exercising their right to sell the Lots or the Lands pursuant to Article 4 of this Agreement.

[226] In my view the entry by Romandale into the August 2005 Agreement did not amount to a breach of the CMAs as Romandale continued to own its Remaining Interest in the Lands and, as already explained, Romandale continued for all practical purposes to control the development of the Lands in the same way as before. To consider Fram’s argument I will consider what would have occurred had the conditions to the closing of the Conditional Agreement been satisfied: namely that either Fram consented to the sale of Romandale’s remaining interest to Kerbel or Romandale bought out Fram’s entire interest. I will not consider the possibility that existed under the August 2005 Agreement that Fram would buy out Romandale’s entire interest.

[227] If Kerbel acquired Romandale’s Remaining Interest in the Lands with Fram’s consent pursuant to s. 5.03 of the COAs, Kerbel would have been required pursuant to that provision, in order for the Disposition to close, to enter into an agreement with Fram that was satisfactory to Fram’s counsel acting reasonably “to be bound by and entitled to the benefit of this Agreement [the COAs] to the extent of the Co-Owners Interest which is the subject of the Disposition”. I note that while s. 5.03 does not expressly refer to the purchaser having to adopt the CMAs, Fram could have required this of Kerbel as a condition of its consent, as its consent to such a transaction could be unreasonably withheld.

[228] If Fram were bought out entirely pursuant to s. 5.07, such that it no longer had any interest in the Lands under the COAs, Fram argues that nevertheless the CMAs would still be binding on the parties. I do not accept that argument. The very first recital of the CMAs provides that Romandale and Frambordeaux are Co-Owners of the Lands and the parties acknowledge in s. 1.1 that the recitals are “true and correct in substance and in fact”. If Fram were bought out that would obviously no longer be the case.

[229] Furthermore, having regard to the balance of the terms of the CMAs, the CMAs were clearly premised on there being a Co-Owner relationship of some kind between Fram and Romandale and were intended to govern the parties with respect to the development and sale of the building lots after SPA had been obtained. For example, the rights of the parties pursuant to the CMAs are defined in terms of “Lots” (not Lands). I do not accept Fram’s argument that I can imply a term that the CMAs applied to the Lands before they were divided into Lots. The CMAs refer to both the Lands and to Lots and so the parties clearly intended to distinguish between these two terms. Section 1.2 defines “Lands” as the meaning set out in the recitals, which is the Lands comprised of the two farms. In the same section, “Lots” are defined as “lots and blocks on a Plan of Subdivision” [emphasis added]. If the CMAs were tied to the Lands independently of the COAs (i.e., there was an obligation for new Co-Owners to adopt the CMAs even when Fram is no longer a co-owner), then there would have been no need for Fram to become a Co-Owner in the first place.

[230] In any event, the default described in s. 4.3(1)(c) of the CMAs only arises in the event that Lots have been subdivided and are then being sold. By referring to Lots rather than Lands, s. 4.3(1)(c) does not apply to a situation where Romandale sells its interest in the Lands before they became Lots. This is made even clearer by the remaining language of s. 4.3(1)(c), where the term “Lands” is used. This reveals that the parties understood there was a distinction between Lands and Lots, and expressly contracted for a prohibition on the sale of Lots without requiring a third-party purchaser to assume the Co-Owners’ obligations but did not do so with respect to the sale of Lands. I agree with Romandale’s submission that the parties understood that if a Co-Owner bought the entirety of the Lands (before they were Lots) from the other Co-Owner and sold them to a third party, the CMAs would not be operational.

[231] Based on the overall scheme of the COAs, it cannot have been the intention of Fram and Romandale that any third-party purchaser under the COAs would be required by an implied term in the CMAs to adopt the CMAs after one of the original Co-Owners was bought out. The COAs contain the parties’ intentions, and the parties already set out in the COAs what happens to the CMAs in the event a Co-Owner is bought out. As Romandale submits, the contractual arrangement between Fram and Romandale already had “business efficacy” without any implied term in the CMAs. They said what they meant.

[232] To further reinforce the point that the CMAs come to an end in the event that a third party purchases the entirety of the Lands, I note that the CMAs are only ever enforceable against the Lands in the event of a breach and judgment. Once the Lands have changed hands to an entirely new third-party owner, there is no recourse under the CMAs.

[233] As acknowledged by Fram’s pleading in the 08 Action, there is no term in the CMAs prohibiting the disposition of Lands without requiring the purchaser to assume the CMAs (i.e., a term like s. 4.3(1)(c) but with “Lands” instead of “Lots”). That is why Fram asks the Court to imply such a term. I agree with Romandale that there is no basis for implying such a term.

[234] Furthermore, the CMAs only make commercial sense if Fram is a Co-Owner. The CMAs require Fram to “take-down” (i.e., purchase) Lots from the Co-Owners for FMV. If Fram 405 were locked into the CMAs without Fram having an ownership interest in the Lands, a new co-owner could develop the Lands contrary to Fram’s interests and Fram 405 would nevertheless be forced to buy potentially undesirable Lots. If no longer an owner, Fram would have no say over draft plans of subdivision, which would establish the very Lots to be purchased.

[235] Finally, the evidence of Mr. Giannone was that the COAs were required for Fram to enter into the CMAs, and that the CMAs lived and died with Fram’s interest in the Lands. This evidence is relevant to the extent it shows what his understanding was, as one of the Co-Owners.

[236] Romandale argues in the alternative that to the extent there was any technical breach of the CMAs by the fact that Kerbel did not explicitly agree to be bound by the CMAs in the August 2005 Agreement, this breach has been cured for the following three reasons. First, under the Consent, Fram and Fram 405 consented to the Conditional Agreement being performed, pursuant to s. 5.03 of the COAs. As already explained, Fram (and by extension Fram 405) had the power to make Kerbel adopt the CMAs as a condition for Fram’s consent. Any failure by Fram to do so at this point cannot render Romandale liable. Any breach by Romandale in relation to the CMAs arising from the Conditional Agreement was cured when Fram consented to the deal.

[237] Second, if I find that the Conditional Agreement is not enforceable and will not be performed in any event, to the extent there was any breach of the CMAs because of the Conditional Agreement, such breach has been cured. The CMAs live on and afford the rights they afford. Finally, as Fram admitted, the CMAs only became operational after subdivision, i.e. after SPA, if and when the Lands have been converted into Lots. As part of the broader contractual arrangement between Fram and Romandale in 2003, the CMAs must be read along with the COAs. In that light, the language of the CMAs confirms that the CMAs end when the overall venture ends.

[238] For these reasons I find that Romandale did not breach the CMAs when it entered into the August 2005 Agreement with Kerbel.

(4) Is Fram entitled to damages in lieu of specific performance?

[239] I have found that Romandale did not breach any of the terms of the COAs or the CMAs as alleged by Fram. Accordingly, I could stop my analysis here in terms of the other claims asserted Fram. However, I did hear evidence from experts on the quantification of damages and so, notwithstanding my findings, I will consider what I would have awarded Fram, if anything, had I concluded that Romandale had breached any of the terms of the COAs or the CMAs.

[240] Fram is seeking damages against Romandale in the amount of $15,650,000.00 in the 07 Action and $9,635,000.00 in the 08 Action. In its original statement of claim in the 07 Action, Fram sought an order for specific performance relying on what it asserted was its “contractual right” under s. 6.02(d) of the COAs to require Romandale to sell its interest in the Lands for 95% of FMV. Fram also sought common law damages for misrepresentation in the amount of $60 million, as well as common law damages for breach of contract in the alternative. Fram was granted leave to amend its pleading to implement the terms of the Settlement Agreement by Spence J. in 2011. Fram’s amendment pleads that through the Settlement Agreement, Fram secured the right to specific performance of 50% of the Lands. At the time of the amendment, Fram elected the remedy of damages in lieu of its claimed contractual right of specific performance on the 50% of the Lands it would not acquire through the Settlement Agreement.

[241] Had I found that Romandale breached the COAs, the first issue would have been whether Fram, as the non-defaulting party, would have been contractually entitled to the remedy of specific performance pursuant to s. 6.02(b) of the COAs. I have already found that Fram is not entitled to any remedy under the Default Purchase Right of the COAs. Even if I had not found this, I would not have found that Fram has a contractual right of specific performance for reasons I will come to in connection with Kerbel’s claim for specific performance.

[242] Fram claims that the COAs provide for a contractual right of specific performance. However, all s. 6.02(d) does is provide that Fram may “bring” any proceedings “in the nature of specific performance”. Unlike the language often found in contracts, this section does not even specify that damages are acknowledged to be inadequate or that the parties agree that damages will be inadequate, only that they may be. I agree with Romandale that s. 6.02(b) leaves the determination of whether damages are an adequate remedy or not, and thus whether Fram would be entitled to specific performance, entirely up to this Court

[243] In any event, even if the COAs specified that Fram had a right to specific performance in s. 6.02(d), courts have repeatedly made clear that such provisions are merely one factor to be considered by a court in its discretionary analysis of whether a party is entitled to the equitable remedy provided for in the contract. Contrary to Fram’s assertion, such a provision would in no way have been determinative.

[244] Fram relies on Landawn Shopping Centres v. Pinetree Development Co., 1987 CarswellOnt 666 (H.C.), but that case is clearly distinguishable from the case at bar. The contractual provision in Landawn unequivocally stated that “the [non-breaching] party shall be entitled to a decree of specific performance or an order restraining and enjoining such breach, as the case may be, and the defaulting party shall not plead in defence thereto that there would be an adequate remedy at law, it being recognized and agreed that the injury and damage resulting from such a breach would be impossible to measure monetarily”: at para. 14 (emphasis added). Despite the strength of this language in the contract, the court in Landawn did not find that this provision was determinative, only that it was a factor: at para. 35.

[245] Romandale relies on Jet Print Inc. v. Cohen, [1999] O.J. No. 2864 (S.C.), where Nordheimer J. (as he then was) considered a contractual term that specified, at para. 5, that any breach of an employment agreement “will cause irreparable injury” and that “money damages will not provide an adequate remedy”. At paras. 25-29, Nordheimer J. explained why in his view such a term in a contract might provide some evidence in favour of a finding of irreparable harm, but that that it did not preclude the court from inquiring into the issue. He found support for his view in the leading text by Sharpe J.A., Injunctions and Specific Performance, 2nd ed., which stated that while an agreement will be relevant it is not determinative, and the court maintains an overriding discretion to refuse the remedy: at para. 28. I agree with this conclusion.

[246] The remaining issue then would have been whether Fram was entitled to damages in lieu of specific performance. For Fram to be able to claim damages in lieu of specific performance, Fram must, like Kerbel, demonstrate that it was entitled to specific performance in the first place. However, Fram engages in no analysis of the principles applicable to specific performance, which is a necessary precursor to any claim for damages in lieu thereof. Fram had to demonstrate to this Court that the Lands were unique (in that there were no readily available substitutes for the properties at the time of the alleged breach) and that damages were an inadequate remedy.

[247] Fram does refer to the 2007 decision of Forestell J. ((July 25, 2007), Toronto, 07-CV-336058PD3 (S.C.)) granting an injunction in Fram’s favour and asserts Forestell J. held the Lands were unique. That finding is not binding on me and in any event is not what Forestell J. found. She stated in her reasons, at para. 26, that:

The defendants [which at the time included Kerbel] submit that specific performance is unlikely as there is nothing unique about the Land. The Land is merely farmland and plans have not even advanced to an early stage of development. I find that while the Land is not unique, the interest of Romandale in the Land is unique in that the interest of Romandale is, by virtue of the Co-Owners Agreement, interwoven with the interest of the plaintiff […]. [emphasis added]

[248] It may be that if the parties had been reversed that Forestell J. would have found that the interest of Fram in the Land is unique because of the COAs, but that clearly would only have been relevant to the question of whether or not there was the potential for irreparable harm.

[249] If Fram wanted to rely on its Default Purchase Right, it needed to comply with the terms of the COAs. As I have already found, it did not do so. Romandale argues that only after doing so and being faced with a failure to close would Fram then be entitled to seek specific performance of its then accrued contractual right to buy Romandale’s interest in the Lands. Even if that is not the case, Fram clearly has to prove that the remedy of specific performance was otherwise available and that this Court should grant it. I consider the issue of the uniqueness of the lands and other factors below, in connection with Kerbel’s claim for specific performance. Damages in lieu are to be a true substitute for specific performance and where a party is not entitled to specific performance, it cannot elect for or receive damages in lieu. For the reasons that follow I find that in any event Fram would not have been entitled to damages in lieu of specific performance: see heading “Is Kerbel entitled to specific performance?”.

[250] Romandale goes on to argue that even if Fram were entitled to specific performance of the Default Purchase Right, such that it could elect to receive damages in lieu, there are no damages to award. I will deal with this issue as I consider Fram’s claim for common law damages in the 07 Action.

(5) Is Fram entitled to any common law damages in the 07 Action and 08 Action?

07 Action

[251] In the 07 Action, Fram seeks common law damages for misrepresentation in the amount of $60 million, as well as common law damages for breach of contract in the alternative. Had I found a breach of the COAs, this would have been the appropriate remedy since I have found that Fram would not have been entitled to damages in lieu of specific performance. Although I have found that Romandale did not breach the COAs, I will consider Fram’s claim for common law damages briefly and determine how I would have dealt with it had I found to the contrary.

[252] Had the August 2005 Agreement never been entered into, Fram would simply remain a co-owner with Romandale and be governed by the COAs (which included the potential that Romandale would trigger the Buy-Sell). There is no quantifiable loss that Fram can point to in this scenario. Even if there was, if I find that the Conditional Agreement is not going to be performed, Fram is in the same position as though the Conditional Agreement had not been entered into. It has not suffered any loss or harm.

[253] In any event, Fram argues that the COAs are unique agreements governing the rights of joint ownership of the Lands and the rights of the Co-Owners to sell the Lands and that they do not fall within the general principles of quantification of damages for breach of contract, as they provide for the contractual remedy of specific performance requiring the non-defaulting party to sell its interests in the Lands at 95% of the FMV of the Lands. Therefore, Fram submits that the principles applicable to the determination of damages arising out of a failed real estate transaction are the principles that should apply in this case. I have already found that the COAs do not provide for a contractual right for specific performance and so this argument necessarily fails. In my view the calculation of common law damages incurred by Fram would be determined by the difference between the contract price for the land and the FMV of the land at the time of the breach.

[254] Fram relies on 100 Main Street Ltd. v. W.B. Sullivan Construction (1978), 1978 CanLII 1630 (ON CA), 20 O.R. (2d) 401 (C.A.), which Fram asserts is the leading authority for how to determine damages arising out of a failed real estate transaction. As Romandale asserts however, as recently noted by Perell J. in DHMK Properties Inc. v. 2296608 Ontario Inc., 2017 ONSC 2432, at para. 50, another decision cited by Fram, it is the leading case in Ontario about “the calculation of a vendor’s claim for damages”. In any event, 100 Main Street simply confirms that the appropriate assessment date is either the date of breach or the date when the deal was supposed to close: at para. 64. As the court in 100 Main Street held, the fundamental principle of common law damages for breach of contract is that the plaintiff is entitled to be placed in the position he would have been in had the contract been performed: see also 921250 Alberta Ltd. v. 762910 Alberta Inc., 2003 ABQB 81, 334 AR 363, at paras. 38-40.

[255] The contract price for the sale of Romandale’s interest in the Lands is 95% of the FMV of the Lands from the date of the written notice by Fram under s. 6.02(d). The notice was delivered to Romandale on July 6, 2007. According to Fram this is the starting point in the damages’ analysis. However, Fram also argues in the alternative that because of the alleged concealment by Romandale of the true terms of the August 2005 Agreement and its subsequent refusal to disclose the agreement until July 2007, that the date for the contract price should be August 29, 2005. I have found that Romandale had no obligation to disclose the August 2005 Agreement and so the date for the contract price should be July 6, 2007.

[256] Fram argues that because in both the 07 and 08 Actions, Romandale maintained the position that it is not a defaulting party under the COAs and that Fram is not entitled to any remedy under s. 6.02 and s. 6.03 of the COAs, that the closing date does not occur until the determination by this Court that Romandale is in default under s. 6.01 of the COAs. It is Fram’s position that the date of trial, when the determination of default is made, is the appropriate date for assessment of damages. I have already explained why I do not accept this position.

[257] In addition, Romandale disputes Fram’s position that damages would be assessed as of the date of trial. First of all Romandale submits that this position is not supported by any law and that Fram’s position is inconsistent in that Fram cannot, on one hand, argue that the operation of the Default Purchase Right is ineffective pending a determination of default by the Court and, on the other, argue that it was entitled to rely on an allegation of default to initiate the Default Purchase Right and fix a “contract price” indefinitely. I have some difficulty with this argument but do agree with Romandale’s submission that when Fram entered into the Settlement Agreement, it confirmed then that it never would buy the Lands from Romandale. While claimants often abandon their claims of specific performance at trial (such that the trial date is used as the date at which to assess increases in land value), it is the act of electing damages in lieu that dictates the valuation date, not trial scheduling. This makes sense. A party should not continue to reap the benefits of increased values for Lands it no longer has any intention of acquiring through a claim for specific performance.

[258] In any event, going on in the analysis, Fram has failed to prove that it attempted to mitigate its damages. Fram acknowledges that it had a duty to mitigate its damages despite its claim for specific performance. Fram also admitted that the Fram enterprise has continued to engage in land deals since 2007. By entering into the Settlement Agreement with Kerbel, Fram argues that it was able to secure an option (which Fram has now exercised) to acquire 50% of the Lands and to develop and build on 50% of the Lands. However, there is no information before the Court regarding Fram’s efforts, if any, to mitigate its other damages, which in my view disentitles Fram to damages.

[259] Romandale pleaded that Fram failed to mitigate, meaning that Fram’s mitigation efforts were squarely in issue in the litigation. Fram was specifically asked questions on discovery about its mitigation efforts and about the details of its land transactions since 2007. Despite this, Fram did not lead any evidence about its efforts to mitigate nor the impact those deals may have had on its losses in this case. There is no evidence before this Court of other properties Fram tried to buy nor did it provide any evidence regarding other lands Fram did buy since 2007.

[260] By not answering its undertakings, I agree with Romandale that there is an adverse inference to be drawn that by failing to provide evidence of its various land deals since 2007, Fram did mitigate its damages. Fram may well have bought other comparable properties, to the point that it suffered no damages. I agree with Romandale that Fram’s failure to lead any evidence of any other steps to mitigate its damages with respect to the Lands it does not have an option to purchase pursuant to the August 2005 Agreement, is fatal to its claim for common law damages in the 07 Action.

[261] Romandale has also asserted several credible arguments with respect to the quantification of Fram’s damages, including issues with the opinion evidence of Mr. Morassutti. I do not intend to review these arguments considering my conclusion on the issue of mitigation.

[262] Even if Fram did have a claim, Fram’s common law damages for breach of the Default Purchase Right would be equal to the 5% discount Fram stood to gain through the Default Purchase Right, plus interest and any difference between the price of a replacement property and the Lands.

[263] In short, as Romandale submits, Fram has failed to present this Court with any coherent or cogent articulation of its damages. For reasons already set out and elaborated upon in Romandale’s Closing Submissions, I find that Fram’s damages in the 07 Action – whether they be common law damages or equitable damages in lieu of specific performance – are nil or have not been proven by Fram.

08 Action

[264] In the 08 Action, Fram claims damages against Romandale for breach of the CMAs. I have already found that Romandale did not breach the CMAs. Nevertheless, I will consider Fram’s claim for damages briefly and determine how I would have dealt with it had I found to the contrary.

[265] In summary, Fram’s claim for damages is based on the amount Fram would have received for the construction and sale of Units on the Lands to third party homebuyers. Under the CMAs, the building profits are broken down into two components: 1) Net Participation Payment pursuant to s. 5.1 of the CMAs, and 2) Construction Manager Fee of $7,000.00 per unit as set out in s. 5.2(1)(e).

[266] Romandale submits that Fram has failed to prove any damages. It is argued that Fram had a duty both at law and pursuant to an undertaking provided by Fram during Mr. Giannone’s examination for discovery, to quantify its anticipated losses under the CMAs and to account for any mitigating impact the Settlement Agreement would have on Fram’s loss of profits. There is no dispute that it failed to do so.

[267] The position of Romandale as a result is that Fram has failed to prove any damages. I agree. Fram’s counsel acknowledged that any quantification had to be updated as close to trial as possible when undertaking to provide an updated quantification of Fram’s purported losses under the CMAs (as offset by any profits arising from Fram’s option to purchase 50% under the Settlement Agreement). The exchange between counsel is as follows:

MS. BATNER: I’m talking specifically about the ‘08 claims.

MS. ERSKINE: Yes, we have updated them and served updated expert report.

MS. BATNER: Okay. So can you‚ …when is the date of your last expert report?

MS. ERSKINE: It’s the expert reports in the Morassutti Group, and I don’t recall the last date of the expert report. But, in any event, even‚ …

MR. GIANNONE: It was a few years ago.

MS. ERSKINE: It was a few years ago. In any event, it will have to be updated again before trial.

MS. ERSKINE: Because the length of time keeps changing the numbers.

MS. BATNER: Okay. So the answer to the question what you say is the spread of profitability between your profits under the Minutes of Settlement and your profits under the [CMAs] you say is fully answered by the last [Morassutti Report]?

MS. ERSKINE: I would have to confirm that. If it is not answered, then it has to be updated again. So it will be updated before trial.

[268] It is a serious breach of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, that Fram has failed to comply with this undertaking. Furthermore, as is apparent from the foregoing exchange, Fram knew it had to provide updated reports quantifying its purported losses. Fram’s counsel acknowledged new reports were needed because the numbers “keep changing” as time goes on. The last Morassutti Group report was from the summer of 2010. Romandale argues that this Court cannot and should not rely on outdated calculations, which do not rely on the most recent planning evidence (e.g., Ms. Spears’s 2018 Report) and which do not account for the impact of the Settlement Agreement on profits, in order to make an award of damages in Fram’s favour in these circumstances. I agree. The Morassutti Group reports I do have do not provide a reliable basis to calculate Fram’s damages and this was conceded by counsel for Fram on discovery.

[269] Romandale also submits that the only inference to be drawn by Fram’s failure to provide an updated quantification of its alleged CMA losses, which also accounts for the impact of the Settlement Agreement on Fram’s profitability, is that Fram’s entry into the Settlement Agreement eclipsed any alleged CMA losses. That is certainly a reasonable inference to draw. As Romandale put it in their closing submissions, Fram cannot rely on its own failure to, or deliberate decision not to, quantify its CMA damages, contrary to an undertaking to do so, as a basis to have this Court accept unreliable or outdated evidence.

[270] Even without drawing this adverse inference against Fram, considering the submissions it has made with respect to damages, I find that even if I had found that Romandale breached the CMAs, and that there was no issue resulting from the fact that Fram failed to answer its undertaking, that Fram has failed to prove any damages in the 08 Action.

[271] Fram argues that the damages under the CMAs are difficult to assess and quantify with certainty and asserts that the governing principles for the assessment of damages applicable in this case was stated by the Court of Appeal for Ontario in Martin v Goldfarb, 1998 CanLII 4150 (ON CA), [1998] O.J. No. 3403 (C.A.), and which was affirmed in TMS Lighting Ltd. v KJS Transport Inc., 2014 ONCA 1, 314 OAC 133, at para 61:

a trial judge is obliged to do his or her best to assess the damages suffered by a plaintiff on the available evidence even where difficulties in the quantification of damages render a precise mathematical calculation of a plaintiff’s loss uncertain or impossible. Mathematical exactitude in the calculation of damages is neither necessary nor realistic in many cases.

[272] However, as the Court noted in Martin v. Goldfarb at para. 75:

I have concluded that it is a well-established principle that where damages in a particular case are by their inherent nature difficult to assess, the court must do the best it can in the circumstances. That is not to say, however, that a litigant is relieved of his or her duty to prove the facts upon which the damages are estimated. The distinction drawn in the various authorities, as I see it, is that where the assessment is difficult because of the nature of the damage proved, the difficulty of assessment is no ground for refusing substantial damages even to the point of resorting to guess work. However, where the absence of evidence makes it impossible to assess damages, the litigant is entitled to nominal damages at best. [emphasis added]

[273] In my view Fram is not in a position to argue that the nature of its damages makes them difficult to assess. The principle of law that Fram relies upon does not apply where the damages can be reasonably quantified, but the party with the burden to prove its damages has failed to present this Court with a quantification. Fram’s damages are not difficult to assess. Fram’s own conduct established this when it provided a quantification of its alleged CMA losses using an independent expert, the Morassutti Group. Furthermore, Fram undertook to update its damage qualification; based on the earlier Morassutti Group reports this clearly could have been done. I agree with the position of Romandale that Fram cannot now suggest this Court “make do” with whatever evidence it has before it, as the existing evidence did not account for the impact of the Settlement Agreement and which Fram acknowledged, on discovery, was not reliable.

[274] Fram now also relies in part on a calculation made by Mr. Giannone set out in his hand-written notes when he calculated the expected building profit and construction manager fees that Fram expected to receive as the builder and construction manager under the CMAs at the June 13, 2005 meeting with Mrs. Roman-Barber. According to this calculation the total profit would be $30.8 million discounted to $7.7 million as the present value of the estimate of damages for loss of building profits and the construction manager fees. Fram argues that since it has secured the right to build on 50% of the Lands through the Settlement Agreement with Kerbel, this estimate of damages should be decreased by 50% for a total of $3,850,000.00 in damages.

[275] I would not consider Mr. Giannone’s 2005 “back of the napkin” calculations to be a reliable way to quantify Fram’s damages. As Romandale submits, Mr. Giannone is neither independent, impartial, nor qualified to conduct a loss of CMAs profit analysis. Furthermore, this was a quick calculation that he did and this kind of “off the cuff” calculation is not a calculation that I would consider relying upon to award a party a multi-million-dollar award. It is clear in this case that Fram understood this when it retained the Morassutti Group to prepare an expert opinion quantifying potential profit losses under the CMAs in 2010, prior to the 2010 trial date and prior to the Settlement Agreement. Relying on the rough calculations done by Mr. Giannone does not solve Fram’s problem of failing to abide by its undertaking.

[276] In addition, Fram also relies on an estimate by Mr. Tilley of gsi, who also estimated the building profits as of March 20, 2015 in its Report dated April 1, 2015 to determine the CMAs discount that should be applied when valuing the Lands under s. 6.03 of the COAs. In its calculations, gsi took into consideration different scenarios in respect of the Snider and McGrisken Farms for split employment and residential, and all residential. This accords with the expert planning evidence of Catherine Spears (the only planning expert that testified) that the Snider Farm is best suited for mixed use (split of employment/residential) or holding for all residential. Ms. Spears also testified that the McGrisken Farm is best suited as all residential. In its calculations, gsi also considered the reduction in net developable acres by 2015. On this basis, Fram submits that the damages it suffered because of Romandale’s breach of the CMAs is between $3,850,000.00 and $9,635,000.00.

[277] Romandale submits that Mr. Tilley’s one-page calculation of potential lost construction profits is not properly before this Court as evidence of Fram’s potential profit losses under the CMAs. Mr. Tilley was expressly tendered and qualified as an expert to provide opinion evidence “in the appraisal of the development lands in the Greater Toronto Area, and particularly with respect to the subject lands at the effective dates of each of the gsi Reports”. Mr. Tilley was tendered to provide a fee simple value of the Lands. He was not tendered to opine on potential profit losses under the CMAs. The one-page analysis of anticipated CMA profits under various future scenarios in the 2015 gsi Report was a brief calculation prepared solely for the purpose of determining a discount rate to apply to Mr. Tilley’s valuation of the fee simple of the Lands, not to quantify Fram’s damages in the 08 Action.

[278] Romandale submits that having not been proffered as an expert for the purpose of valuing Fram’s potential CMA losses, Mr. Tilley’s one-page calculation was not explained in any meaningful way in either the 2015 gsi Report itself (it does not from part of the 2018 report) or in Mr. Tilley’s testimony. Considering Fram had undertaken to provide an updated Morassutti Group report, Romandale argues that it was incumbent on Fram to provide notice to Romandale if it intended to rely on Mr. Tilley’s one-page calculation in lieu of updating the Morassuttti Group Report. That would have afforded Romandale an opportunity to provide responding expert evidence, and to cross examine Mr. Tilley on this evidence. I agree with this submission.

[279] Furthermore, as Romandale submits, in any event, Mr. Giannone’s calculations and Mr. Tilley’s calculations are out of date and fail to account for the impact the Settlement Agreement had on profitability/mitigation in the 08 Action. Fram’s counsel acknowledged that any quantification had to be updated as close to trial as possible when undertaking to provide an updated quantification of Fram’s purported losses under the CMAs (as offset by any profits arising from Fram’s option to purchase 50% under the Settlement Agreement).

[280] Romandale makes a further argument that in any event, Fram has misrepresented Mr. Tilley’s calculations. I agree with that submission, but it is not necessary to set out that analysis here in light of all of my other conclusions.

[281] For these reasons I find that even had I found that Fram was entitled to common law damages under the CMAs, Fram has failed to prove damages in the 08 Action.

(6) Is the Conditional Agreement with respect to the Lands in the August 2005 Agreement enforceable against Romandale?

[282] Fram did seek court approval of the Settlement Agreement but now argues that no further approval is needed. Although this claim by Fram was relevant when the parties attended before Dunphy J. on Romandale’s pleading motion, for the reasons that follow, it has become a moot point.

[283] Kerbel seeks specific performance against Romandale of the Conditional Agreement in the August 2005 Agreement, which would permit it to purchase Romandale’s Remaining Interest in the Lands at the fixed price negotiated between the parties when they entered into the August 2005 Agreement. It is Romandale’s position that the Conditional Agreement is unenforceable and has not been enforceable for many years and that as such Kerbel is not entitled to specific performance as there is no longer any enforceable contract that this Court can order be specifically performed. In particular Romandale argues that the Conditional Agreement is not enforceable for the following key reasons:

a) Kerbel repudiated the Conditional Agreement when it entered into the Settlement Agreement with Fram by contracting with Fram to put off closing the August 2005 Agreement for decades, until after SPA. It is Romandale’s position that in doing so Kerbel fundamentally undermined the pith and substance of the August 2005 Agreement: an expedient sale of Lands and Kerbel acquiring the Lands and Romandale getting its money, without breaching the COAs. Romandale argues that it accepted that repudiation as of 2011 and that this was a state of affairs Kerbel acquiesced to for years before suing for specific performance; and,

b) In any event, the Conditional Agreement is no longer enforceable, as it has been frustrated and is void on account of mistake.

[284] Kerbel disputes Romandale’s position and takes the position that neither party repudiated the Conditional Agreement until Romandale did so in July 2015 when it took the position that it would not comply with the terms of that agreement. The position of Kerbel (and Fram) is that:

a) There was no repudiation because the unambiguous meaning of s. 5 of the August 2005 Agreement is that Romandale could only trigger the Buy-Sell provisions after SPA and the Settlement Agreement cannot be said to constitute a repudiation in that it was crafted to comport with the terms of the August 2005 Agreement. They argue that the closing of the sale of Romandale’s Remaining Interest in the Lands following SPA is the precise and express term of the August 2005 Agreement; and

b) Prior to 2015, Romandale had consistently asserted that the August 2005 Agreement Buy-Sell could not be performed until after SPA. Romandale maintained this position until it retained new counsel in 2015.

Does the Conditional Agreement permit Romandale to trigger the Buy-Sell provisions in the COAs before SPA?

[285] There was no dispute between Romandale and Kerbel at trial that Romandale’s Remaining Interest in the Lands could be sold to Kerbel as soon as either: Romandale obtained Fram’s consent to the Conditional Agreement (which could happen at any time, including before SPA), or Romandale bought Fram’s interest in the Lands pursuant to the Buy-Sell provision in s. 5.07 of the COAs (which could happen before SPA, once the DMAs were terminated).As well, if Fram agreed to tag-along when notified of the First Sale, this too would have permitted for the sale of the Lands by Romandale to Kerbel as soon as possible and before SPA.

[286] The first important issue to be determined is whether or not the Conditional Agreement permits Romandale to trigger the Buy-Sell provisions in the COAs before SPA. A determination of this issue depends largely on my interpretation of the terms of the Conditional Agreement and in particular whether or not s. 5 of that agreement permits Romandale to trigger the Buy-Sell provisions before SPA.

[287] As a result of the amendments to it pleading allowed by Dunphy J., Romandale pleads that under the August 2005 Agreement, the Buy-Sell could have been exercised at any time that it could have been triggered under the COAs, including as early as February 2005 because of the termination of the DMAs. Romandale also pleads that Kerbel, as its agent, had a fiduciary obligation under s. 5 of the agreement in relation to the triggering of that obligation and that it has breached that obligation by entering into the Settlement Agreement with Fram.

[288] The relevant provisions of the August 2005 Agreement are as follows (emphasis added):

Paragraph 2:

… Romandale shall sell its … [remaining interest] also on the terms herein set out save that the sale of the remaining interest is conditional for the benefit of the vendor and the purchaser on the valid exercise of the buy-sell rights under the Buy-Sell Provisions (as defined in paragraph 5 of this Agreement) and the completion of the buy-out of the interest of [Fram], or, in the alternative, the consent of [Fram] to the transaction...

Paragraph 5 [headed “Irrevocable Appointment”]:

… Romandale hereby irrevocably appoints 2001251 as its exclusive true and lawful attorney and agent having full power of substitution, and 2001251 is hereby fully authorized as such to act on behalf of and/or give binding instructions to Romandale solely in connection with the exercise of the buy-sell rights pursuant to the Buy-Sell Provisions (as hereinafter defined) … Romandale further acknowledges that the foregoing rights of 2001251 are intended, without limitation, to permit 2001251 to cause Romandale to trigger Romandale’s buy-sell rights under section 5.07 of each of the Co-Owners Agreements in respect of the [Land] (collectively, the “Buy-Sell Provisions”) following Secondary Plan Approval being obtained for the [Lands] such that Romandale acquires the co-ownership interest of [Fram] in the [Lands] and then conveys such interest to 2001251 in accordance with this Agreement and to restrict Romandale from dealing with the Remaining Interest or any party thereof in the [Lands] in any way whatsoever, subject to the terms and conditions of the Co-Owners Agreement.

Paragraph 7 (e):

Time shall be of the essence hereof.

[289] I agree with the position of Romandale that the definition of the Buy-Sell provisions in the Conditional Agreement is simply as defined in s. 5.07 of the COAs. This is clear from the wording of para. 5 as its short forms the reference to the s. 5.07 rights of the COAs as “collectively, the Buy Sell Provisions”. In my view the words that follow are clearly not part of the definition. That means that the Buy-Sell Provisions could have been exercised as early as February