COURT FILE NO.: CV-17-587517
DATE: 20191028
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: ROBERT LEONARD MARSHALL and TRACEY DOROTHY HOYT, Plaintiffs/Defendants by Counterclaim
AND:
JOHN PETER MEIRIK and AMBER MADELYNN MEIRIK, Defendants/Plaintiffs by Counterclaim
BEFORE: Kimmel J.
COUNSEL: Fred Tayar, for the Plaintiffs/Defendants by Counterclaim
William F. Kelly, for the Defendants/Plaintiffs by Counterclaim
HEARD: July 17, 2019
ENDORSEMENT
[1] The plaintiffs seek summary judgment on their claim arising out of the defendants’ breach of an agreement to purchase the plaintiffs’ waterfront property located at 12 Harris Street in Port Carling (the “Property”). After the defendants advised that they could not proceed with their purchase, the Property was relisted at the original list price and eventually re-sold approximately one month later, but at a price that was $325,000.00 less than what the defendants had agreed to pay and at a higher commission cost, with the result that the plaintiffs received $358,900.00 less than what they would have if the sale to the defendants had been completed. The plaintiffs claim this difference as their damages for breach of contract.
[2] The defendants do not accept that this difference is the proper measure of the plaintiffs’ damages because they say that the reduced sale price for the Property that the plaintiffs hurriedly agreed to, reflecting a 24% reduction from the starting list price and an 18% reduction from the price that the defendants had agreed to pay, was below market value. They further contend that the plaintiffs failed to take reasonable steps to mitigate their losses by not marketing the Property for a reasonable time to attract a price representative of its market value. The defendants argue that a trial is required to determine what the plaintiffs’ actual damages are, net of any losses suffered on the re-sale that the defendants say could have been avoided if the plaintiffs had taken reasonable steps to mitigate their losses.
[3] For the reasons that follow, I have made a preliminary determination that the proper date on which to assess the plaintiffs’ damages is November 6, 2017, the intended closing date under their original purchase agreement. Having made that preliminary determination, I am not satisfied that either side has given me the evidence upon which I can properly assess the plaintiffs’ damages, even though they agree that is the only issue to be decided in this case. I do expect that, upon receipt of further proper expert (and other supporting) evidence (which I have allowed for in the Rule 20.04(2.1) directions at the end of these reasons), the issue of the plaintiffs’ damages, including the impact of any arguments of mitigation, can be decided on this summary judgment motion without the necessity of a trial. I consider this to be the most timely, cost effective and proportionate manner of proceeding.
Background Facts and Chronology
[4] The Property is a well-situated year-round home that the plaintiffs used as a cottage. They estimate that they were paying expenses of approximately $8,000.00 per month for the Property.
[5] The plaintiffs decided to sell the Property in early 2017. Prior to listing the Property for sale, the plaintiffs approached two local real estate brokers for value estimates in anticipation of a possible sale:
a. The first, Thelma Jarvis, estimated that, as at March 15, 2017, the Property would be likely to attract interest if listed between $1,400,000-1,500,000.00 and suggested a listing price in the spring of 2017 at just under $1,500,000.00.
b. The second, Thomas O’Hara who became the listing agent, estimated in his valuation as at July 20, 2017 a probable final sale price of $1,800,000.00 to $1,900,000.00 and a suggested list price in the range of $1,899,500.00 to $1,999,950.00.
[6] The defendant John Meirik is a real estate agent. The defendants live in Uxbridge. They had been looking for a home to buy in the Muskoka area since 2014. They had seen a number of other properties and were familiar with the market in the summer of 2017.
[7] The following chronology is based on uncontroverted facts:
a. August 1, 2017 – the Property was listed for sale at $1,999,950.00 with Thomas O’Hara as listed agent for a three-month listing term.
b. August 2, 2017 – the defendants viewed the Property.
c. August 3, 2017 – the defendants offered to Purchase the Property for $1,850,000.00, with a $10,000.00 initial deposit, and John Meirik agreed to waive the 2.5% portion of the commission payable to the buyer’s agent, valued at $52,000.00 (including taxes) based on this purchase price.
d. August 4, 2017 – the plaintiffs accepted the defendants offer and received the initial $10,000.00 deposit, resulting in a conditional agreement of purchase of sale between the parties (the “APS”).
e. August 10, 2017 – the defendants conducted their inspection of the Property.
f. August 13, 2017 – the defendants waived the only two conditions to the APS and exercised their right to extend the closing date from October 20, 2017 to November 6, 2017, as confirmed in an amending agreement to the APS signed by all parties.
g. August 17, 2017 – the defendants asked O’Hara if it would be possible for him to relist the Property “asap” and see if he could find another interested buyer. It was noted that while the defendants had been planning this move as a family for a long time, they had decided that this was not the right time. It is acknowledged that, by this email, the defendants communicated their intention to repudiate the APS.
h. August 22, 2107 – the defendants confirmed, through correspondence from their lawyer, that they would not be in funds to close the APS and sought the return of their deposit (failing which, they threatened to bring an action for relief from forfeiture).
i. August 23, 2017 – the plaintiffs, though correspondence from their lawyer, accepted the defendants’ repudiation, reserving their right to claim forfeiture of the deposit and any further damages, including any losses arising from a re-sale of the Property.
j. August 25, 2017 – the plaintiffs relisted the Property with O’Hara as their agent at the original list price of $1,999,950.00.
k. August 25-September 7, 2017 – O’Hara received some calls and inquiring about whether the plaintiffs would sell the Property in the range of $1.3 to $1.4 million and he showed the Property to some potential buyers.
l. September 8, 2017 – the listing price for the Property was reduced by $100,000.00 to $1,899,950.00.
m. September 17, 2017 – after a few more showings, the plaintiffs received an offer from a buyer represented by Thelma Jarvis for $1.4 million.
n. September 20, 2017 – after several rounds of negotiations, the plaintiffs entered into a new conditional agreement of purchase and sale for the Property for a purchase price of $1.525 million that required the plaintiffs to pay the full 5% real estate commission (the “New APS”).
o. September 20 – 30, 2017 – O’Hara continued to show the Property while the New APS remained conditional but received no further expressions of interest.
p. September 30, 2017 – the conditions were waived by the new buyers and the New APS became binding.
q. October 24, 2017 –the sale of the Property under the New APS closed.
[8] The difference between the purchase price under the APS and the purchase price under the New APS was $325,000.00. The plaintiffs also had to pay the extra 2.5% commission to the buyer’s agent under the New APS, calculated to be $33,900.00 (including taxes). The plaintiffs are claiming the aggregate of these two amounts in damages, for a total of $358,900.00.
Issues to be Decided
[9] The defendants do not dispute that they repudiated the APS on August 17, 2017. However, they do dispute the damages claimed and contend that the price differential is not a fair or reasonable reflection of the plaintiffs’ unavoidable losses arising from the defendants’ repudiation of the APS. They also contend that the determination of the plaintiffs’ damages requires a trial and that summary judgment is not appropriate.
[10] I have identified the following questions to be determined on this motion:
a. What is the proper date of assessment of the plaintiffs’ damages: should it be the date of the defendants’ repudiation of the APS (August 17, 2017), the date on which the plaintiffs accepted the defendants’ repudiation of the APS (August 23, 2017), the date the offer price under the New APS was accepted (September 20, 2017), the date the New APS became binding (September 30, 2017), the date the New APS closed (October 24, 2017), the intended closing date under the APS (November 6, 2017), or some other date?
b. Can the plaintiffs rely solely on the re-sale price under the New APS to prove their damages, or is some other evidence of the market value of the Property on the assessment date required?
c. Do any of the plaintiffs’ claimed damages include losses that could reasonably have been avoided and should their damages be reduced on account of any such avoidable losses (e.g. due to their failure to take reasonable steps to mitigate their losses)?
[11] In considering each of the above questions, I must also determine whether any of them raises a genuine issue requiring a trial and whether proceeding by way of summary judgment is appropriate.
Legal Analytical Framework
(i) Law and Principles of Damages and Mitigation
[12] The parties agree on the basic legal principles to be applied to assess the plaintiffs’ damages in the case of an aborted real estate transaction such as this. I have summarized them as follows:
a. The normal measure of damages for failure to complete a purchase of land is the difference between the contract price and the market value of the land – which is intended to represent the lost benefit of the bargain to the vendor. See DHMK Properties Inc. v. 2296608 Ontario Inc., 2017 ONSC 2432, 279 A.C.W.S. (3d) 296, at para. 49; rev’d on grounds other than as are relied upon herein, at 2017 ONCA 961.
b. The basic premise is that the normal measure of damages for breach of contract is the loss of the bargain which is intended to put the plaintiffs in the position they would have been had the APS been performed. See 100 Main Street Ltd. v. W.B. Sullivan Construction Ltd. (1978), 1978 CanLII 1630 (ON CA), 88 D.L.R. (3d) 1 (Ont. C.A.), at para. 55.[^1]
c. These damages are typically measured by the difference between the original contract price and the market value on the assessment date, the latter of which may vary depending on the circumstances of the case (see 100 Main Street at para. 55). In that case, Morden J.A. canvassed some of the variables that might affect the assessment date and the damages assessment, including:
i. If there is a contractual time fixed for conveyance (the “intended closing date”), the market value may be determined on that date (para. 54);
ii. If there has been an accepted anticipatory repudiation, the proper date for taking the market value should still be the intended closing date, subject to the vendor’s duty to mitigate following acceptance of repudiation (para. 55);
iii. If there is no date fixed, the market value may be determined on the date of the repudiation of the contract (para. 55);
iv. The price achieved on a subsequent mitigating sale may be good evidence of the market value on the intended closing date, but it is not determinative if there is a suggestion that the re-sale price differed from the relevant market price (para. 65); and
v. While the onus is on the defendants with respect to the issue of mitigation (to show that, had the plaintiffs taken certain reasonable steps, the damages would be lower) that does not relieve the plaintiffs from proving the elements of the damages claim – the plaintiffs still must present their case and adduce evidence of the contract price and of the market value or re-sale price relied upon to establish the loss of bargain. (para. 78).
d. The Court of Appeal, in its reasons reversing the decision at first instance in DHMK on other grounds (at 2017 ONCA 961, at para. 15), affirmed that, while the typical approach to the assessment of damages is based on the market value on the intended closing date under the original contract, there is a general discretion in the court to depart from that if the circumstances warrant it.
e. Generally, the market value assessment will require expert (appraisal) evidence. See DHMK at para. 56.
f. The principles relating to mitigation and how it impacts the assessment of damages are reproduced by Edwards J. in Gamoff v. Hu, 2018 ONSC 2172, 290 A.C.W.S. (3d) 882, at para. 38, referring to the decision of Perell J. in DHMK, at paras. 52-55. Paraphrasing from those decisions, some further relevant considerations are:
i. The date of assessment is determined by what is fair in the circumstances of each case;
ii. If the guilty party can show that the innocent party unreasonably missed an opportunity to reduce damages (e.g., if the innocent party ought to have mitigated before the intended closing date) then the date for the assessment of damages will be adjusted;
iii. Conversely, the innocent party may show that it is not appropriate to use the intended closing date for the assessment of damages, and a later date should be selected because he or she should be allowed a reasonable opportunity to mitigate;
iv. The date of assessment is variable. The essential object of the court’s inquiry is always to determine the plaintiff’s true loss having regard to the legal policy that avoidable losses are not recoverable.
g. The innocent parties need only act reasonably (not perfectly), using what they knew then, without hindsight, and need not do anything risky. Mitigation is a doctrine of fairness and common sense that seeks to do justice between the parties in the particular circumstances of the case. See DHMK, at para. 73.
(ii) Summary Judgment Law and Principles
[13] Rule 20.04(2)(a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, provides that where a motion for summary judgment is brought, the court shall grant summary judgment if the court is satisfied that there is no genuine issue for trial with respect to the claim.
[14] The framework for determining summary judgment motions established by the Supreme Court of Canada in the case of Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at paras. 66-68, requires that the judge be confident that the court has the evidence to make the factual findings required to adjudicate the dispute (by applying the law to the facts) and reach a fair and just determination on the merits. The question to ask is whether there is a genuine issue “requiring a trial” and whether it is in the interests of justice for the judge to use the fact-finding powers on the motion. This test can be considered in light of the goals of timeliness, affordability, and proportionality.
[15] The procedure to be followed on a motion for summary judgment prescribed by the Supreme Court in Hryniak proceeds in two stages:
a. the judge should first determine if there is a genuine issue requiring a trial based only on the evidence before him or her without using the fact-finding powers in Rule 20.04(2.1); and
b. if there appears to be a genuine issue requiring a trial, Rule 20.04(2.1) permits the motion judge, at his or her discretion, to: (1) weigh the evidence, (2) evaluate the credibility of a deponent, or (3) draw any reasonable inference from the evidence unless it is in the “interest of justice” for these powers to be exercised only at trial: Hryniak, at para. 66.
The Damage Assessment Date - Proof of the Plaintiffs’ Damages
[16] To determine the plaintiffs’ loss of the bargain and the measure of their damages, and to put them in the position they would have been had the APS been performed, I must first determine the appropriate assessment date for their damages.
[17] This is a case of an anticipatory repudiation of the APS on August 17, 2017 that was accepted on August 23, 2017.
[18] The New APS was signed on September 20, 2017 and became binding on September 30, 2017. It closed on October 24, 2017. The intended closing date under the original APS was November 6, 2017.
[19] The defendants say it is up to the court to determine the appropriate assessment date based on what is fair in the circumstances (see Gamoff and DHMK), but they suggest various possibilities, including the intended closing date under the APS (November 6, 2017) or the date of their repudiation of the APS (August 17, 2017).
[20] The plaintiffs rely on the re-sale price (which was agreed to on September 20, 2017) to establish their loss of bargain, but their counsel indicated during oral argument that the date of repudiation (August 17, 2017) could also be an appropriate assessment date.
[21] Applying the guidance of Morden JA in 100 Main Street (at para. 55), in a case of an accepted anticipatory repudiation such as this, the proper date for assessment of damages should be the time fixed by the original agreement for completion, which would be the intended closing date under the APS of November 6, 2017. However, the assessment date is subject to adjustment in the discretion of the court, as the Court of Appeal has confirmed in DHMK (at para. 15). There is the unusual circumstance in this case of the re-sale of the Property having occurred prior to the intended closing date under the APS. There is no question that the plaintiffs crystalized their losses on that date.
[22] The plaintiffs inferentially argue, by their reliance on the re-sale price as the proper value to measure their damages, that the date of the New APS (or re-sale date) is the proper market assessment date. This may very well be one of the situations the Court of Appeal had in mind in DHMK that would warrant a departure from the norm and the exercise of the court’s discretion to move the assessment date to the re-sale date.
[23] That said, I do not consider it to be prudent to exercise my discretion to adjust the assessment date from the intended closing date of November 6, 2017 to the re-sale date of September 20, 2017 without any other evidence to support that adjustment, beyond the mere fact of the re-sale having occurred on that date and the inference that the plaintiffs ask the court to draw, that the market value was equal to the resale price under the New APS. There is no expert evidence about the market value of the Property on any of the possible assessment dates.
[24] As the Court of Appeal observed in DHMK, it might be important to know if the market value of the Property was different on those two dates. There may also be general market evidence and statistics that could inform the exercise of my discretion regarding the choice of assessment dates. This missing evidence is also expected to be relevant in the context of answering the next question involving the proof of the plaintiffs’ damages. I have made allowance for this further evidence in my Rule 20.04(2.1) directions later in these reasons.
The Market Value of the Property – Proof of the Plaintiffs’ Damages
[25] The damages formula is straightforward. It is the original purchase price under the APS (which is known) less the market value of the Property on the assessment date, and then subject to further adjustment to account for mitigation considerations, if applicable. See 100 Main Street at para. 55. It is the latter two data inputs for which I lack evidence in the record on this motion.
[26] The plaintiffs seek to prove their damages by reducing the original contract price under the APS by the price received on the re-sale under the New APS, and by their cost of mitigating reflected in the additional commission paid to the new buyer’s agent (which was not payable under the APS because one of the defendants was the agent and waived his commission). The plaintiffs say that the re-sale price should be determined to be the market value and that expert evidence is not required in these circumstances to establish this.
[27] The essence of the defendants’ position is that the re-sale of the Property for a price under the New APS that was $325,000.00 less than the price they had agreed to pay under the APS less than two months earlier (a price that was supported by the assessment of the plaintiffs’ own real estate broker, O’Hara[^2]) is prima facie improvident and below market value in the absence of any evidence of a dramatic downturn in the market (of which there is none) or some other explanation. These are what I will refer to as the “special circumstances” of this case.
[28] In the special circumstances of this case, the defendants contend that the re-sale price under the New APS is insufficient evidence of the market value of the Property on either of the possible assessment dates. Having tendered no evidence of market value other than the re-sale price under the new APS, the defendants contend that plaintiffs have failed to prove the damages they are claiming on this motion.
[29] While the price achieved on a mitigating sale may be good evidence of the market value on the intended closing date, it is not determinative if there is a suggestion that the re-sale price differed from the market price (see 100 Main Street, at para. 65). That suggestion arises from the special circumstances of this case. I am not prepared to accept, without some further evidence, that the re-sale price under the New APS is necessarily equal to the market value of the Property on the re-sale date (September 20, 2017), even if that becomes the assessment date. Nor am I prepared to infer, absent agreement of the parties or some other evidence, that this re-sale price was the market value of the Property on the original closing date of November 6, 2017 if that remains the assessment date.
[30] I recognize that the re-sale price under the New APS may be important evidence to be considered in the determination of market value on either of the possible assessment dates. I do not foreclose the possibility that the re-sale price could ultimately be found to be the appropriate value to plug into the formula to determine the plaintiffs’ damages. However, some further evidence is required to properly assess this, which I expect would include some expert opinion evidence about the market value of the Property on the potentially relevant assessment dates. That evidence is not currently available because the plaintiffs did not tender any at all, and the evidence about market value that was tendered by the defendants is not properly before me, nor is it directed to any of the potentially relevant dates.
[31] The defendants appended to one of their affidavits as an exhibit an appraisal report completed by Daniel Payeri on October 5, 2018 indicating a retrospective market value for the Property as of August 1, 2017 of $1,900,000.00. This evidence is challenged by the plaintiffs on the basis that it does not meet the requirements for admission of an expert appraisal opinion in that it lacks the proper statement of the expert’s qualifications and is not accompanied by an acknowledgement of the expert’s duty. Concerns were also raised about the express limitations placed on Payeri’s certification, including that he relied upon undisclosed other sources of information but is not prepared to assume responsibility for their accuracy, and he is not prepared to unconditionally attend to give testimony in court. A party seeking to introduce expert evidence on a summary judgment motion generally must comply with the requirements of Rule 53.03. See Sanzone v. Schechter, 2016 ONCA 566, 402 D.L.R. (4th) 135, at para. 16, leave to appeal to SCC refused, [2016] S.C.C.A. No. 443.
[32] A teaser of what might be expected from a “proposed” expert cannot be tendered on a summary judgment motion to indicate that a trial is required, at which the issues addressed by the proposed expert will be expanded upon. To establish that there is an issue requiring a trial that will be dependent upon expert opinion evidence, that evidence must be tendered on the summary judgment motion in a form that is admissible if the party tendering that evidence wants the motion judge to consider it. See Sanzone, at paras. 15-19.
[33] I agree that the Payeri appraisal report and his assessment of the retrospective market value of the Property on August 1, 2017 is not properly before the court and should not be considered by me as evidence of the market value of the Property. However, eliminating the Payeri report does not solve the plaintiffs’ problem of the proof of their damages.
[34] Plaintiffs who seek summary judgment are expected to put their best evidentiary foot forward and provide sufficient evidence to prove their damages (see DHMK, at para. 45). The type of evidence required to meet this burden will vary from case to case, depending on the circumstances. In some cases, the re-sale price might be sufficient proof of the market value on the assessment date (subject to proof by the defendant that it should be reduced in service of the principle that avoidable losses are not recoverable – mitigation). However, in the special circumstances of this case, that alone to be insufficient. The concept of market value presumes a reasonable time has been allowed for exposure to the market and a reasonable marketing effort has been undertaken. These are matters that an appraisal expert routinely deals with in market valuations. They also deal with the marketing time needed to sell at the assessed market value. While an innocent vendor is not required to get the best possible price on a re-sale, if the price achieved is not within the range of expected market values as at the assessment date, the re-sale price may not be the correct value to plug into the damages formula.
[35] I could dismiss the plaintiffs’ motion on the basis that their damages have not been proven. However, given the focus of the issues that remain to be decided and the work that has already been done to argue this motion, I do not consider that to be a cost-effective or proportionate way in which to proceed.
[36] There is a genuine issue requiring a trial on the question of the plaintiffs’ damages because I am not confident that the court has the evidence to make the factual findings required to adjudicate the dispute (by applying the law to the facts) and reach a fair and just determination on the merits of the plaintiffs’ damages, even utilizing the Rule 20.04(2.1) fact-finding powers. However, this is due to an evidentiary gap that can be filled. Once the necessary expert or other evidence of the market value of the Property on the possible assessment dates is provided, I expect it will be in the interests of justice for me to use the fact-finding powers available under Rule 20.04(2.1) to decide the issue of what the plaintiffs’ damages are. To proceed in this manner is consistent with the goals of timeliness, affordability, and proportionality.
Mitigation
[37] The defendants argue that the plaintiffs failed to make reasonable efforts to mitigate their losses and that their damages should be reduced accordingly in keeping with the principle that avoidable losses are not recoverable. I expect that the expert appraisal evidence in support of these contentions will overlap with expert appraisal evidence that will be relied upon in the determination of the market value of the Property on the assessment date.
[38] To meet their onus on the mitigation point, the defendants would have to satisfy me, on a balance of probabilities and without the use of hindsight, that the plaintiffs have failed to make reasonable efforts to mitigate their losses, and that mitigation was possible. Mitigation is a doctrine of fairness and common sense that seeks to do justice between the parties in the particular circumstances of the case. See DHMK, at paras. 70-74.
[39] The defendants’ contention is that the plaintiffs failed to market the Property for sufficient time. They contend that market exposure after or at the end of the high selling season for less than 30 days following the date the plaintiffs accepted the repudiation of the APS (August 23, 2017) before entering into the New APS with the first buyer to make an offer (September 20, 2017) is not reasonable mitigation. However, there is no evidence properly before me about this.
[40] The defendants point to some select statistics and a letter “opinion” from Payeri about the average time properties were on the market, and about the market generally, that they have presented in an effort to show that the average selling period for comparable properties (that sold for higher prices) was much longer than 30 days. However, this evidence suffers from the same deficiencies as the Payeri retrospective appraisal report (discussed above). This evidence is not properly before me and I cannot make a finding that the plaintiffs failed to take reasonable steps to mitigate their damages based upon it. The plaintiffs also quite properly point out that the defendants have not said how much longer the Property should have been exposed to the market, and have suggested a wide range of possibilities, including that the plaintiffs should have waited until the statistically generated average listing price of 63-70 days, the end of 2017 and/or the spring of 2018.
[41] The mitigation argument in this case is the reverse of what is often argued. Normally, the argument is that the plaintiff waited too long and the eventual sale (if there is one) was at a lower price as a result, but that if the plaintiff had acted more quickly and sold closer to the original APS closing date, they could have achieved a higher price. The plaintiffs have understandably raised the same concerns that have been voiced in other cases that, no matter what they did, the defendants would have complained. (See Gamoff v. Hu, 2018 ONSC 2172, at para. 39, O’Hare v. Wyton, 2018 ONSC 3946, at para. 44)
[42] On the principle that the defendants are expected to have put their best foot forward on this summary judgment motion and to have provided all available and admissible evidence to meet their onus on the mitigation point, I might have been inclined to make a finding now that they have not proven any failure on the part of the plaintiffs to mitigate. However, I have already found that the plaintiffs’ need to file additional evidence, including expert evidence, about what the market value of the Property was in order to calculate their damages. Further, I recognize that there may be overlap, in that the evidence about the market value of the Property may include experts’ views about the reasonable time for exposure of the Property to the market and the marketing time needed to sell the Property in the particular market and under the conditions existing at the relevant time. Thus, it would be premature for me to make a final determination on the mitigation question at this stage.
[43] The issue of mitigation can be revisited when the issue of damages comes back to me to be finally decided. Now that the damages assessment date and issues for determination have been framed in these reasons, the mitigation point, if it is to be argued, needs to be focussed on the relevant question of whether any part of the loss suffered by the plaintiffs upon the re-sale of the Property was avoidable, and if so, what portion of it. It may be that this question merges with the question of what the market value of the Property was on the proper assessment date. Regardless, if either party intends to rely upon market statistics or other data about comparable sales and market exposure and the time needed to sell the Property in the context of the mitigation question, I would expect that to be presented through properly qualified experts.
[44] I find that there is a genuine issue requiring a trial on the question of whether the plaintiffs took reasonable steps to mitigate their losses, and that this is part of the determination of the plaintiffs’ damages that will follow, in accordance with my directions below and based on the additional evidence to be filed. I am not confident that I have the evidence required to make the factual findings required to adjudicate the dispute (by applying the law to the facts) and reach a fair and just determination on the merits of the plaintiffs’ damages and mitigation, even utilizing the Rule 20.04(2.1) fact-finding powers. However, once the necessary expert or other evidence of the market value of the Property on the assessment date is provided, I expect it will be in the interests of justice for me to use the fact-finding powers available under Rule 20.04(2.1) to decide these issues. To proceed in this manner is consistent with the goals of timeliness, affordability, and proportionality.
Rule 20.04(2.1) Directions
[45] I am granting leave for the parties to file the additional expert evidence that I have identified to allow me to adjudicate and determine the plaintiffs’ damages (and the assessment of avoidable losses to be deducted, if any – e.g. mitigation). I expect this may include expert (and supporting) evidence about market values at the potential assessment dates and about the market more generally, relating to these topics. The experts who have presented material already (O’Hara and Payeri) may be among those whose evidence is relied upon, provided it is presented in a proper form and in compliance with the requirements of Rule 53.03. The parties should also consider whether some of the questions that will be put to the experts could be answered by a single jointly appointed or court appointed expert.[^3]
[46] The parties should attempt to agree upon a schedule for the exchange of expert reports and supporting evidence as needed, and for any opportunity that they may wish to afford themselves to ask for supporting documents or evidence upon which the opposing expert may have relied (and discovery in relation to those documents and evidence, if appropriate). Based on that schedule, the parties may request a further hearing (maximum one day) for the continuation of this summary judgment motion before me, which will include the advance filing of any expert reports or other additional supporting evidence, the qualification and viva voce in-chief and cross-examinations of those experts, to be followed by any further written or oral submissions that the parties may wish to make on that same day. I will issue supplementary reasons following that attendance.
[47] If the parties are unable to agree upon a schedule, they may request a chambers appointment before me, and I will assist them in setting this schedule.
[48] I approve the scheduling of this one further day of hearing time before me under Rule 20.04(2.1), which may be requested through the motions office (having regard to the schedule for the exchange of reports and any follow-up, which must first be agreed upon as indicated above). I remain seized of this matter.
[49] If the parties reach a settlement that renders it unnecessary for them to schedule the further attendance before me, counsel are asked to notify me through my assistant Linda Bunoza.
[50] Costs may be addressed at the return of the next motion day.
Kimmel J.
Date: October 28, 2019
[^1]: The pinpoint references to this case, 100 Main Street, come from the report included in the defendants’ book of authorities cited as 1978 CanLII 1630 (ON CA), [1978] O.J. 3448. It is noted that the paragraph references are different from those in the report included in the plaintiffs’ book of authorities cited as 1978 CarswellOnt 1459. The numbering appears to be off between these two reports, but the content of the corresponding paragraphs referred to appears to be the same.
[^2]: The plaintiffs say that they have not tendered the O’Hara assessment as an expert opinion to prove the market value of the Property, and concede that it suffers from many of the same deficiencies as the Payeri report (filed by the defendants, discussed later in these reasons), in that it was not accompanied by an acknowledgment of expert’s duty nor does it contain a proper statement of his qualifications, even though it is appended to an affidavit that he himself swore. While that may mean it should not be relied upon to prove the market value of the Property on the assessment date, it can be considered as part of the determination of the sufficiency of the plaintiffs’ evidence on value, where the indicated value is different than the re-sale price that the plaintiffs seek to rely upon to prove their damages and no attempt is made to explain or reconcile the difference.
[^3]: If the parties are so inclined, a chambers appointment can be scheduled to discuss this with me.