Dhatt v. Ghag, 2019 ONSC 5445

COURT FILE NO.: CV-18-03884

DATE: 20190919

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: RAJDEEP DHATT and KAMAL SIDHU, Plaintiffs

AND

KIRANDEEP KAUR GHAG and KAMALJIT SINGH, Defendants

BEFORE: Daley, RSJ.

COUNSEL: Paul H. Mand, for the Plaintiffs

Yoginder Gulia, for the Defendants

HEARD: August 29, 2019

E N D O R S E M E N T

1The plaintiffs in this Rule 76 Simplified Procedure Action moved for summary judgment.

2The action arises from a failed real estate transaction wherein the plaintiffs were the vendors and the defendants were the purchasers.

3The parties entered into an agreement of purchase and sale on September 25, 2017. The defendants agreed to purchase the subject property by way of a $20,000 deposit at the time of acceptance of the offer by the plaintiffs, with the balance remaining of $1,080,000 to be paid to the plaintiffs by the defendants on or before the closing date.

4The closing of the transaction was set for January 11, 2018. The evidence is that the plaintiffs were ready willing and able to complete the transaction in accordance with the agreement of purchase and sale on the set closing date, however the defendants did not tender the balance of the monies owing on closing date or on two extensions of the original closing date.

5As a result of the defendant’s failure to close the transaction, the plaintiffs entered into another agreement of purchase and sale with a new purchaser in the amount of $1,077,000 with a closing date of August 29, 2018.

6In this action, the plaintiffs seek damages based on the difference in the closing price as between the agreement of purchase sale entered into with the defendants, and the price in the sale transaction, which ultimately closed. They also seek reimbursement with respect to interest, property taxes, utilities, maintenance, real estate commission and legal fees.

7The defendants responded to the motion for summary judgment and filed an affidavit on behalf of the defendant, Kirandeep Kaur Ghag. In this affidavit, the deponent sets out the history of the purchase transaction with the plaintiffs as well as details regarding the defendants’ efforts at engaging in settlement discussions with the plaintiffs.

8Nowhere in the evidence submitted on behalf of the defendants do they assert that they complied with the terms of the agreement of purchase and sale they entered into with the plaintiffs. No evidence is offered by the defendants that would in any way support a position that they were not in breach of the agreement of purchase and sale for failing to have closed on the date set for closing and paid the balance of the purchase price.

9The defendants’ evidence with respect to their liability in respect of the alleged breach of the agreement of purchase and sale solely addresses the issue of what the damages were sustained by the plaintiffs as a result of their breach. The defendants called for an opportunity to obtain full productions from the plaintiffs and to conduct examinations or cross-examinations of them.

10The defendants did offer evidence regarding the quantum of damages that may have been sustained by the plaintiffs.

11As to the resale of the property, the defendants offered evidence that the new purchaser made an offer on May 8, 2018 in the amount of $1,092,500, which offer was subsequently lowered on May 17, 2018 to $1,077,500. It was urged on behalf of the defendants that the plaintiffs failed to offer evidence as to why the price was reduced.

12During his submissions on behalf of the defendants, counsel fairly acknowledged that they did not have a defence to the alleged breach of the agreement of purchase and sale, however he urged that there were several triable issues with respect to the matter of damages to which the plaintiffs may be entitled.

13During his submissions on behalf of the plaintiffs, counsel also acknowledged that the evidence submitted on the summary judgment motion on behalf of the plaintiffs with respect to damages contained numerous errors and miscalculations. The evidentiary record with respect to the plaintiffs’ possible entitlement to damages was wholly inadequate and confusing to say the least.

14A party responding to a summary judgment motion must put their best foot forward in terms of adducing evidence that will foreclose the granting of the summary judgment being sought.

15Rule 20.04 (2) (a) directs that the court “shall grant summary judgment if…the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.” This subsection of the Rule must be read in combination with Rule 20.04 (2.1) which provides: “In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interests of justice for such powers to be exercised only at trial: (1) weighing the evidence; (2) evaluating the credibility of the deponent; (3) drawing any reasonable inference from the evidence.”

16In the present case, the defendants have not tendered any evidence disputing liability for breach of the contract entered into in the form of the agreement of purchase and sale. In fact, counsel for the defendants disclosed what would otherwise be correspondence and communication covered by settlement privilege that demonstrated that the defendants acknowledged liability to the plaintiffs, however disputed the quantum of damages occasioned by the breach.

17It was asserted by the defendants in the affidavit material submitted on their behalf that they would have been ready willing and able to close the transaction, however the evidence is uncontradicted that they failed to close on an extended closing date of March 9, 2018, and again on a further occasion on March 16, 2019.

18It is clear that the defendants do not have a defence to the claim of the breach of the agreement of purchase and sale and that their position in response to the statement of claim and this summary judgment motion is entirely with respect to the proper measure of damages sustained by the plaintiffs as a result of their breach.

19While the Court of Appeal has stated that a high degree of caution should be exercised when considering a motion for partial summary judgment, I have concluded that this is an appropriate case for the granting of a judgment in favour of the plaintiffs on liability with the matter of damages, including mitigation, only proceeding to trial.

20In its decision in Buttera v. Chown, Cairns LLP, 2017 ONCA 783, the Court of Appeal stated that there are four potential problems with the granting of partial summary judgment namely:

(1) Delay – as a partial summary judgment will often only resolve one element of the action and only increase fees and delay if the motion is appealed;

(2) Expense – motion for partial summary judgment may be very expensive;

(3) Wasted judicial resources – judicial time spent on comprehensive reasons for decision that do not dispose of an action may be wasted time;

(4) Inconsistent findings – the motion record on a partial summary judgment motion may not be as fulsome as the record at trial and as such there is a risk of possible inconsistent findings.

21This case, in my view was suitable to consideration as a summary judgment motion and I have further concluded that a partial summary judgment granted in this case does not give rise to the concerns outlined above. Having this matter adjudicated as to damages will not cause significant delay. Further the cost of the summary judgment motion has been modest and involved less than one hour of submissions in court and very basic evidentiary material filed. Similarly, the judicial resources needed to consider this motion were modest in relative terms. Finally, as the issues requiring trial are entirely related to the quantification of proper damages that flow from the undisputed breach of the agreement purchase and sale, there is little or no likelihood that there will be any inconsistent findings on the trial relating to damages.

22Furthermore, given that this is a Rule 76 Simplified Procedure Action, there is further economy in proceeding with this matter to trial simply on the issue of damages.

23In the result, I have determined that this is a proper case for partial summary judgment and I find that the defendants did breach the terms of the agreement of purchase and sale by the plaintiffs by their failure to close the transaction as required by that agreement, and further they are as a result liable for all proper damages flowing from that breach.

24The evidence as to damages submitted by the plaintiffs was fraught with errors and incomplete and as well the evidence with respect to mitigation of damages was also confusing and uncertain. I have therefore found that there is an issue requiring a trial, namely with respect to the plaintiffs’ damages flowing from the defendants’ breach of contract.

25I have therefore concluded that this action must proceed to trial on the issue of damages and both counsel agreed during submissions that if I were to make such an order that the most economical way in which to conduct this trial is as a summary trial in accordance with Rule 76.12.

26From the record submitted it is unclear as to whether all of the required steps regarding the conduct of a simplified procedure action under Rule 76 have been complied with including the service of affidavits of documents and so forth.

27The parties are hereby ordered to comply with all terms and conditions of Rule 76 with respect to the conduct of simplified procedure actions prior to trial.

28In due course a pretrial conference shall be scheduled and conducted in accordance with Rule 76.10.

29Further, the matter shall proceed to trial as a summary trial and the presentation of evidence shall be in accordance with the terms and time limits set forth in that rule.

30With respect to costs on this motion, counsel for the plaintiff shall serve and file submissions of costs of no longer than three pages, along with a costs outline within 15 days. Similar cost submissions shall be served and filed by counsel for the defendants within 15 days thereafter. No reply submissions shall be filed.

Daley, RSJ