COURT FILE NO.: CV-18-18-00608722
DATE: 20191024
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
COUNTRY WIDE HOMES UPPER THORNHILL ESTATES INC.
Plaintiff/Moving Party
– and –
WEI GE
Defendant/Responding Party
Emilio Bisceglia, for the Plaintiff/Moving Party
Daniel Lawson and Derrick Fulton, for the Defendant/Responding Party
HEARD: July 24 and October 10, 2019
reasons for decision
LEIPER J.
INTRODUCTION
[1] This is a motion for summary judgment by the plaintiff for an alleged breach of an agreement of purchase and sale of a house on Lady Jessica Drive (the “property”) in Vaughan, Ontario.
[2] The plaintiff, the vendor of the property (the “vendor”), asks the court to find that the October 4, 2016 agreement of purchase and sale (the “agreement”) is a binding contract.
[3] The vendor also seeks an order for specific performance of the agreement.
[4] The defendant purchaser of the property, Mr. Ge, asks to have the motion dismissed. He argues that the materials supplied by the vendor are inadequate and that because there are other parallel proceedings he has brought against the agents, and these proceedings raise credibility matters that require a trial, this is not an appropriate case for summary judgment.
[5] For the reasons given below, I conclude that the parties entered into a binding agreement. There is no evidence or legal basis to justify setting aside the contract between the parties. There is no issue for trial.
[6] The context of the agreement, the customization of the home to the specifications of the purchaser, the difficulty of assessing damages and the conduct of the parties persuade me that the appropriate remedy is to order specific performance of the contract by the purchaser.
Procedural Matters
[7] On the first day for the hearing of this motion, the purchaser brought an application for an adjournment. For reasons provided in a brief endorsement, the application was not granted. Submissions were begun and the matter adjourned to October 10, 2019 for continuation.
[8] On the day before the return of the motion, the purchaser served an affidavit, factum and book of authorities on the vendor. Counsel sought to file these materials at the hearing. This was allowed, over the objection of the vendor. Submissions were heard from both parties and the matter reserved.
The Issues
[9] The vendor argues that the fundamental issue at the heart of the matter is that there is no defence in law asserted or argued by the purchaser. Without a triable legal issue, there are no facts in dispute that require resolution by way of a trial.
[10] The purchaser’s arguments assume there is a triable legal issue: they focus on the complexity of the agreement, the warning required by the Ministry of the Environment in the agreement, his client’s lack of English skills and allegations related to a conflict of interest on the part of his real estate agent.
[11] The purchaser also argues that specific performance is not warranted where the purchase is part of a larger subdivision with options for finishes that do not make the home purchased truly unique or customized, but rather subject to a menu of choices available to all purchasers.
BACKGROUND FACTS
The Enclave Development and the Agreement to Purchase Lot 66: October 4, 2016
[12] In October 2016, the vendor retained Your Advocates Realty Inc. to sell houses in a subdivision it had developed in Vaughan known as the “Enclave.”
[13] The purchaser attended at the sales office for the Enclave. He retained a real estate agent who he believed had a connection to the purchaser in order to obtain a lot of his choice. His agent, Ms. Yao, spoke Mandarin and English. The purchaser does not speak English.
[14] The purchaser owns other properties, a matrimonial home purchased in 2015 and a second property purchased in his name in 2017. There was no evidence tendered about his capacity to contract.
[15] On the day he attended the sales centre, the purchaser signed the agreement to purchase Lot 66 in the Enclave for $2.98 million.
[16] The agreement included, as required by the Ministry of the Environment, a warning concerning water supply, remediation of the land and the existence of vapour barriers on some of the lots. There was no vapour barrier on Lot 66. The agreement did not allow for any conditions, and sections providing for solicitor’s review or financing were crossed out and initialed by the parties.
[17] Every page of the agreement included a disclaimer that “oral representations do not form part nor can they amend this agreement.”
[18] The purchaser provided 5 post-dated cheques form the account of Yuanyuan Meng to the purchaser for the deposits required under the agreement. The first cheque was payable on October 3, 2016.
[19] The purchaser also provided a copy of his permanent residence card issued by the Government of Canada.
[20] On October 4, 2016, the vendor accepted the offer in the agreement from the purchaser.
The Agreement is Amended and the Purchaser Selects Upgrades and Finishes: October 11, 2016-August 23, 2017
[21] On October 11, 2016, the purchaser sought and received an amendment to the agreement to assign or “flip” the transaction. The amendment was signed by the parties.
[22] On February 22, 2017, the purchaser selected finishes at the vendor’s “décor centre and paid for these on his spouse’s credit card.
[23] On February 28, 2017, the purchaser sought another change: to “bump out” a bedroom. The vendor agreed to do so. On March 1, 2017, the upgrades and finishes were signed off by the vendor.
[24] On March 2, 2017, the purchaser selected more upgrades, this time with respect to another bedroom.
[25] On April 30, 2017, the purchaser selected bricks for the house and signed a related form.
[26] On June 2 and June 28, the purchaser attended at the décor centre and requested additional upgrades to his home. He paid for the cost of the upgrades with a credit card in the name of his spouse.
[27] On August 23, 2017, the purchaser signed off on all final configurations and selections including the television system connection and other outlets.
The Purchaser’s House is Built, and Closing is Fixed for October 26, 2018
[28] Construction began on August 14, 2017. An extension letter advised the purchaser that the closing had been moved from June 28, 2018 to October 26, 2018.
[29] In the summer of 2018, the purchaser provided the name of his real estate solicitor, Mr. Zhang. The vendor’s solicitor sent documents to the purchaser’s lawyer in the late summer and some time after that, Mr. Zhang advised he was no longer acting.
[30] On October 9, 2018, counsel for the vendor wrote to the purchaser to remind him of his obligations under the agreement and that he risked forfeiting his deposit and being held responsible for the damages of the vendor.
The Transaction Fails to Close
[31] On October 19, 2018, new litigation counsel for the purchaser advised litigation counsel for the vendor that the purchaser said that the agreement is null and void.
[32] On October 26, 2018 real estate counsel for the vendor tenders on solicitors for the purchaser. The deal did not close.
[33] In the vendor’s affidavit, Mr. Balsamo stated that as a result of the number of purchasers who have refused to close, that the vendor has been unable to sell any houses in the Enclave for approximately 1 year. He asserts that the group of purchasers have flooded the market for these custom luxury homes.
Information is Received About Other Purchasers Seeking Price Reductions
[34] The vendor filed an affidavit from its Vice President which included evidence on information and belief from its marketing sales manager, Richard Mariani, that he had been approached by another purchaser (Purchaser 2) in the Enclave who said he did not intend to close his transaction and was aware of another group who did not intend to close. This approach took place on September 29, 2018.
[35] On February 14, 2019, a further meeting was held between Purchaser 2 and Mr. Mariani of the vendor. At that meeting, Purchaser 2 said he wanted to resolve the issue and demanded a purchaser price reduction of $1 million. He advised Mr. Mariani that a group of approximately 14 purchasers were looking to obtain concessions from the vendor in order to close their transactions.
[36] The purchaser argues that this evidence is not admissible, as it contains “hearsay upon hearsay.” The purchaser’s affidavit was silent as to any relationship to other putative purchasers and their requests for concessions.
[37] Counsel to the purchaser, Mr. Fulton, filed an affidavit and a related memo in advance of the first day for the hearing of this motion. In this memo, counsel to the purchaser pointed out that there are 17 other claims relating to failures to close on agreements of purchases for other lots in the Enclave.
[38] The memo attached to the affidavit also reported that this purchaser’s counsel is acting for 15 of the claims for failures to close. Counsel advised that there are attempts being made to consolidate these various actions. There is also a claim against the agent for this purchaser, but it is a separate action.
[39] Counsel’s materials suggest that these claims should be thought of as akin to a “class action.” Both the memo, and the affidavit from their client mentions other purchasers who are able to corroborate and confirm the information provided by the purchaser that there were misrepresentations at the time he signed the contract.
[40] Both parties referred frequently in their written submissions and in their affidavits to issues relating to other purchasers. There was no evidence provided on this motion from any of the other purchasers or witnesses. References to other purchasers without a proper evidentiary basis cannot ground a claim of misrepresentation nor a claim for specific performance.
The Purchaser’s Complaints About the Agreement
[41] The purchaser states that when he signed the agreement he sat at a table with another purchaser (Mr. Li) and heard the terms described at the same time. Although he had attended with his own agent, he decided to use the services of an agent they met at the showroom, Ms. Tina Yao, in order to obtain the lot that he wanted to purchase.
[42] The purchaser had not met Ms. Yao before the day he signed the offer. He alleges that the review of the agreement was done quickly, involved a large sum of money and included important environmental detail. The purchaser stated in his affidavit that the agent for the vendor, Mr. Crudele did not “walk” the purchaser through the agreement. The purchaser’s affidavit stated:
Relative to paragraph 11 of the Balsamo Affidavit, Crudele most certainly did not review the APS with myself and li [sic] on a page by page basis. This contention is untrue. The only time that Crudele physically made reference to every page, page by page, was when he quickly ran through the APS documents during the signing, initialing stage, with a purpose connected to getting the initials recorded and little else, apart from side comment from time to time. The notion that Crudele walked Li and myself through the APS documents with attention to componentry is contrived and unsustainable on its face taking into account the compressed time frame seen on top of logistical, language interpretation constraints present.
[43] The purchaser does not say what the “side comment” was during the signing. His affidavit does not allege any details of any misrepresentation. It complains of the fact that there was a warning in the agreement concerning water and the vapour barriers. It also complains that he did not have an option for a solicitor review. His pleadings, which were adopted as part of his evidence in the affidavit alleged misrepresentation, but again provided no details as to what the misrepresentation was.
ANALYSIS
Issue No. 1: Should this Matter be Decided on a Motion for Summary Judgment?
[44] Rule 20.04(2)(a) of the Rules of Civil Procedure provides 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.
[45] Hryniak v. Mauldin, 2014 SCC 7 at para. 66 directs that on a motion for summary judgment, the motion judge should first determine whether or not there is genuine issue requiring a trial based only on the evidence before her.
[46] Parties on motions for summary judgment are required to put their best case forward: Landrie v. Congregation of the Most Holy Redeemer, 2014 ONSC 4008 at para. 47. As stated in Landrie, the court “is entitled to assume that the parties have respectively advanced their best case and that the record contains all the evidence that the parties will respectively present at trial.”
[47] The vendor argues that in this case, the purchaser has failed to put forward any basis for setting aside the agreement. Counsel for the vendor characterizes the allegations as vague. Counsel asserts that the purchaser makes bare allegations unsupported by any “coherent and compelling” affidavit evidence with specific facts and evidence.
[48] The vendor points out that there is no law argued or specific facts which allow for any issue as to misrepresentation, lack of capacity to contract or any other basis in law for finding that the agreement was null and void.
[49] To the contrary, the vendor argues that the agreement is valid and binding and that for months the parties acted in accordance with its terms, including agreeing upon finishes, amending the agreement to allow for a “flip” and payment of deposits without any concerns about the terms being raised.
[50] The materials filed by the purchaser do not provide any legal foundation for setting aside the agreement: rather the purchaser focuses on faults in the vendor’s affidavit, such as failing to specifically attribute in every paragraph the sources of information, and arguing generally that a court should not grant partial summary judgment where there will be other issues left to be addressed.
[51] There is no issue with the agreement, its contents, or the steps taken after it was signed. The main complaints appear to be with the fact that it is a lengthy document, signed by a non-English speaker, and without solicitor review. Yet, the purchaser does not say in his affidavit that he did not understand the contents: his words are more in the nature of argument than evidence. He acted in accordance with the agreement and chose finishes which were relied upon by the vendor in construction of his house.
[52] I agree with the vendors: there is no legal foundation for a defence that the agreement is void. The complaints are vague. No caselaw has been provided to establish that any of the complaints in the affidavit would give rise to a setting aside of the agreement. The purchaser has not established any misrepresentation.
Issue No. 2: Is the Vendor Entitled to Specific Performance?
[53] Specific performance is a remedy that relies on the particular facts of an individual case. The court should consider the uniqueness of the contract, the adequacy of a money award and the equities as between the parties: Matthew Brady Self Storage Corp. v. InStorage Limited Partnership, 2014 ONCA 858 at paras. 32-42. Specific performance is not restricted to a purchaser. It can also be available to a vendor: Matthew Brady at paras. 33-34.
[54] The vendor argues that the custom elements provided to this purchaser makes this a unique property. The purchaser argues that this but a menu of options that any purchaser could obtain and to not represent major structural changes beyond the pre-determined style of house available in the Enclave.
[55] The vendor also argues that damages cannot be easily determined or replace an order for specific performance given the fact that there are currently 9 homes in inventory that cannot be sold because of other parties failing to close. The evidence is that no homes, including Lot 66, have been sold for approximately 1 year. The purchaser argues that damages are available.
[56] Finally, the vendor argues that the defendant and the group of other purchasers have unjustifiably refused to close and this behaviour also supports an order for specific performance. The affidavit evidence is second hand. While one possible inference from the information provided by the purchaser is that there may have been an organized effort to bring pressure to bear on the vendor, I am not prepared to draw that inference from the material filed given its hearsay quality and lack of other direct evidence. I do accept the fact as deposed by Mr. Balsamo that there is inventory that makes it difficult to mitigate any damages or quantify a fair amount for this transaction’s failure to close.
[57] I also take into account the changes, the bump out of the bedroom, and particular finishes on a $3 million property. While not necessarily custom or highly unusual, there is evidence of a particular set of qualities decided upon by this purchaser.
[58] In Landmark of Thornhill Limited v. Jacobson, 1995 CanLII 1004 (ON CA), [1995] 25 O.R. (3d) 628, 85 O.A.C. 179 (Ont. C.A.) the Court of Appeal for Ontario recognized that although a condominium development may contain “mass-produced carbon copy” units, nevertheless, there may be units which are “truly unique.” Given the importance of this part of the test, the Court found that the defaulting party bears the onus of showing a lack of uniqueness. Here, there was no evidence that the property was a “carbon copy” of all of the other properties without unique characteristics. There was evidence of a variety of changes and customizations chosen by the purchaser.
[59] The court in Landmark also relied on market features which led to an inability to resell the unit in question: had the purchasers there moved into the unit, they would have its use and the unit would not have sat empty for an indefinite period of time. This is similar to the situation in this case.
[60] In all of the circumstances, I conclude that this is an appropriate case in which to award the remedy of specific performance.
Conclusion
[61] For the reasons given above, I make the following orders:
(a) An order for summary judgment granting specific performance of the agreement between the purchaser and vendor;
(b) That the closing of the transaction shall be fixed for 120 days from the date of this order, unless the parties agree to the contrary.
Costs
[62] If the parties are unable to agree as to costs, they are to make brief written submissions as to costs by November 8, 2019.
Leiper J.
Released: October 24, 2019
COURT FILE NO.: CV-18-18-00608722
DATE: 20191024
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
COUNTRY WIDE HOMES UPPER THORNHILL ESTATES INC.
Plaintiff/Moving Party
– and –
WEI GE
Defendant/Responding Party
REASONS FOR DECISION
Leiper J.
Released: October 24, 2019