COURT FILE NO.: CV-19-1862 DATE: 2020 04 16 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN :

MICHAEL ASUMENG Michael Asumeng for Responding Party/Plaintiff Responding Party/Plaintiff

• and -

MARILYN RENDINE and CACHET ESTATE HOMES INC. Seta Boyadjian for Moving Party/Defendants and Plaintiff by Counterclaim Moving Party/Defendants and Plaintiffs by Counterclaim

HEARD: January 16, 2020

Reasons for Summary Judgment

COROZA J.

Overview

[1] These are my reasons for decision in the Defendants’ motion for summary judgment seeking the dismissal of the Plaintiff’s action for recovery of a deposit paid pursuant to an Agreement of Purchase and Sale.

[2] The Defendant Cachet Estate Homes Inc. is a group of private real estate development companies that build and sell homes. One of the companies in this group is Cachet Estates Home (Orangeville) Inc. (“Cachet Orangeville”). The Plaintiff named Cachet Estate Homes Inc. as the Defendant but his dealings, for the purposes of this motion, were with Cachet Orangeville.

[3] The Defendant Marilyn Rendine is a real estate law clerk who is employed by Cachet Orangeville. She is responsible for communicating and dealing with potential purchasers of properties.

[4] The Plaintiff Michael Asumeng entered into an Agreement of Purchase and Sale (the “APS”) with Cachet Orangeville to buy a new home in May 2016. Regrettably, Mr. Asumeng could not secure financing upon the closing date as set out in the APS. Cachet Orangeville terminated the transaction and kept Mr. Asumeng’s deposit, which had been submitted pursuant to the terms of the APS.

[5] Mr. Asumeng has filed a claim against the Defendants seeking an order for the return of his deposit. Both Defendants have filed a defence to the claim and a counterclaim.

The Motion

[6] The Defendants now bring this motion for summary judgment arguing there is no genuine issue as to a material fact that requires a trial and that Mr. Asumeng’s claim should be dismissed. They seek the following orders:

(i) A declaration that the APS has been terminated because Mr. Asumeng has breached the APS. (ii) A declaration that Cachet Orangeville is entitled to the sum of $43,826.19 paid as a deposit together with all accrued interest.

[7] Cachet Orangeville argues that since Mr. Asumeng breached the APS, it was entitled to terminate the APS and that any deposit paid by Mr. Asumeng is forfeited. For her part, Ms. Rendine contends that there is no cause of action against her.

[8] Mr. Asumeng argues that the motion should be dismissed. He submits that there are credibility issues that will have to be resolved at a trial.

[9] I have concluded that the motion should be granted and that the orders sought by the Defendants should be made. In my view, Cachet Orangeville acted well within its rights in terminating the APS and it follows that the deposit submitted by Mr. Asumeng is forfeited. Furthermore, I agree with Ms. Rendine’s submission that there is no basis to assert a claim against her.

Factual Background

[10] On May 3, 2016, Mr. Asumeng signed the APS with Cachet Orangeville as vendor to buy a new home for $559,990.00 with a tentative closing date of September 14, 2017. The APS permitted Cachet Orangeville to delay closing. Pursuant to the APS, Mr. Asumeng paid $43,826.19 as a deposit to Cachet Orangeville.

[11] On May 31, 2017, Cachet Orangeville extended the closing date to January 11, 2018.

[12] On January 11, 2018, Cachet Orangeville was ready, willing and able to complete the transaction. However, Mr. Asumeng requested an extension to February 15, 2018. Cachet Orangeville agreed to extend the closing date to January 18, 2018, subject to two conditions. First, Mr. Asumeng was required to provide a mortgage approval letter. Second, Mr. Asumeng had to agree that an administrative fee of $2,236.52 would be added to the purchase price upon closing.

[13] Mr. Asumeng’s solicitor acknowledged and agreed to these two terms. She also agreed that the terms and conditions of the APS were in force and that time continued to be of the essence to complete the transaction.

[14] On January 18, 2018, Mr. Asumeng was still not ready to complete the transaction and the parties entered into an Amendment to the APS to extend the closing date to January 31, 2018 provided that Mr. Asumeng agreed to pay an additional fee of $9,577.00 on or before January 19, 2018. The Amendment also contained the following term:

Purchaser acknowledges and agrees that should the closing transaction not occur on January 31, 2018, all additional fund noted above, together with all monies paid in accordance with the Agreement of Purchase and Sale, including monies paid for extras, shall be forfeited to the Vendor as liquidated damages and not as penalty and this Agreement of Purchase and Sale shall become null and void. [Emphasis added]

[15] Mr. Asumeng did not pay the additional fees by January 19, 2018. On January 31, 2018 he requested another extension to February 1, 2018. Cachet Orangeville agreed to the one-day extension. However, Mr. Asumeng did not comply with the terms of the Amendment and Cachet Orangeville advised Mr. Asumeng that the APS was terminated and the deposit was forfeited.

[16] On February 2, 2018, Mr. Asumeng’s solicitor requested a reinstatement of the APS.

[17] On February 6, 2018, Mr. Asumeng and Cachet Orangeville entered into an Amendment and Reinstatement Agreement (the “ARA”) which revived the terms of the APS and extended the closing to February 9, 2018. The ARA contains a term specifically stating that should the transaction fail to close on February 9, 2018, all additional funds together with all monies paid in accordance with the APS shall be forfeited to Cachet Orangeville.

[18] On February 8, 2018 Mr. Asumeng’s solicitor advised Cachet Orangeville that Mr. Asumeng secured private funding but that a one-week extension was required. Ms. Rendine, on behalf of Cachet Orangeville, wrote to the solicitor on February 9, 2018 at 12:19 p.m. and advised her that an extension was denied. However, Ms. Rendine advised the solicitor that Cachet Orangeville was prepared to return Mr. Asumeng’s deposit if he signed a Mutual Release and delivered it to Cachet Orangeville no later than 4 p.m. that day.

[19] At 4:39 p.m. Ms. Rendine emailed Mr. Asumeng’s solicitor and advised her that since she had not heard from the solicitor or Mr. Asumeng, the APS had been terminated and no further requests would be granted.

[20] On February 16, 2018, Mr. Asumeng personally emailed Cachet Orangeville and requested that it reinstate the agreement. He advised Cachet Orangeville that he had secured a financial commitment from a lender. However, Cachet Orangeville refused to reinstate the APS.

[21] The solicitor for Mr. Asumeng made an additional request for reinstatement on February 21. Cachet Orangeville refused.

[22] A second solicitor contacted Cachet Orangeville on March 1, and March 5, 2018 requesting reinstatement. On March 6, 2018, Ms. Rendine wrote to this solicitor and advised him that Cachet Orangeville did not wish to enter into another agreement with Mr. Asumeng.

[23] On May 3, 2019, Mr. Asumeng issued a statement of claim. The Defendants served and filed a statement of defence and counterclaim on June 6, 2019.

The Law

[24] Before I turn to the specific arguments made by the parties, I will briefly review the principles relating to summary judgment.

[25] The Defendants rely on Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194. That is the rule that governs a motion for summary judgment.

[26] On a motion for summary judgment, I am required to grant Cachet Orangeville’s motion if I find that there is no genuine issue for trial: see Rule 20.04(2)(a). On this motion, I may weigh the evidence, evaluate the credibility of a deponent, and draw any reasonable inference from the evidence unless it is in the interests of justice that these powers are only used at a trial: see Rule 20.04(2.1); Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at paras. 49, 52.

[27] Mr. Asumeng, as the party responding to the motion, may not rest on bald statements or mere allegations. He must provide supporting evidence for his position and this evidence must raise a genuine issue for trial once the moving party establishes that there is no genuine issue for trial: see Rule 20.02(2). Indeed, the law is clear that litigants must put their best foot forward and provide a complete evidentiary record. I cannot speculate about evidence that is not in the evidentiary record before me.

[28] The moving parties rely on the affidavits filed by Desi Auciello, the president of Cachet Orangeville, and Mark Russell, who is a lawyer for the moving parties. Mr. Asumeng relies on his own affidavit.

[29] I want to make it clear that the affidavits and the exhibits that have been attached to the affidavits are the record that I will rely upon in deciding this motion. In my view, there are no credibility issues and I can make findings on this motion based entirely on the evidence in the affidavits. I say this because Mr. Asumeng during oral submissions asserted that he attended the offices of Cachet Orangeville on February 8, 2018. He states that the man who met him subjected him to verbal abuse when he attempted to speak to him in person. Mr. Asumeng asserts that this man shouted racial slurs.

[30] However, I cannot consider these allegations because they do not form part of any affidavit. Furthermore, I agree with the argument made by counsel for the moving parties on this motion that it would be very unfair to rely on serious allegations that have not been made under oath and have not been tested. Therefore, while these allegations are disturbing, I make no specific finding that this occurred, and I will not consider these submissions made by Mr. Asumeng.

Analysis

[31] In my view, there are three issues to be decided on this motion. First, is there a valid claim made against Marilyn Rendine? Second, was Mr. Asumeng’s deposit properly forfeited? Third, if the moving parties are successful, should costs be awarded?

[32] After considering the submissions made by the parties and the record filed before this court, I have made the following findings.

(i) There is no valid claim against Marilyn Rendine. (ii) The deposit was properly forfeited to Cachet Orangeville. (iii) Mr. Asumeng should pay costs in the amount of $9,000.00 to Cachet Orangeville.

Issue 1: There is no valid claim against Marilyn Rendine.

[33] In my view, there is no basis to include Ms. Rendine as a party to the litigation. I say this for two reasons.

[34] First, she is only an employee of Cachet Orangeville. She is responsible for administrative support to the corporation and has no decision-making power. The corporate documents filed by Cachet Orangeville set out that she is neither a director nor an officer of the company. It seems that her only role in this whole affair was to act as a contact person for Mr. Asumeng and his solicitors.

[35] Second, there is no evidence that she owed any duty to Mr. Asumeng. Mr. Asumeng’s own affidavit suggests that his claim against Ms. Rendine is based on what he perceives to be her dishonest conduct. Mr. Asumeng claims that Ms. Rendine lied to him when she advised him on February 6, 2018 that Mr. Auciello was out of town. Mr. Asumeng then asserts in his affidavit that on February 8, 2018 he met a man who identified himself as the builder and lawyer of Cachet Orangeville, who denied that he had gone out of town. As I see it, Mr. Asumeng is implying that Ms. Rendine was dishonest in her dealings with him and she was covering up for the builder. Even assuming, for the sake of argument, that this is all true, I fail to see how any of this conduct discloses a cause of action against Ms. Rendine, who was not a party to the APS. There is nothing in the materials filed that suggests that there is a valid cause of action against Ms. Rendine.

[36] For these reasons, I conclude that there is no cause of action against Ms. Rendine and that her motion for summary judgment should be granted. The claim against her should be dismissed.

Issue 2: The Deposit was Properly Forfeited.

[37] Mr. Asumeng’s claim comes down to the submission that Cachet Orangeville has acted in bad faith. He provides several examples of what he perceives to be heavy-handed behaviour in his affidavit. First, he argues that Cachet Orangeville’s decision to delay the closing date from September 2017 to January 2018 caused him to lose his financing because new mortgage rules took effect in January 2018 that made it difficult for him to obtain financing for a closing in 2018. Second, he argues that when the transaction was aborted, he was prepared to accept Cachet Orangeville’s offer of the return of his deposit in exchange for a signed mutual release. He claims that Cachet Orangeville refused to provide him with a release form to be signed.

[38] Cachet Orangeville argues that it has acted in good faith leading up to the closing date and that it was in a position to close the transaction on January 18, February 1, and February 9, 2018. Cachet Orangeville argues that it is Mr. Asumeng who repeatedly failed to comply with the terms of the APS on three separate dates. He was required to secure financing. He failed to do so. This was a clear breach of his obligation under the APS. Cachet also acknowledges that it offered to return the deposit in exchange for a mutual release. However, Mr. Asumeng or his solicitor did not reply to the offer that was made on February 9, 2018.

[39] After considering the submissions of the parties and reviewing the materials filed, I find that Cachet Orangeville did not act in bad faith.

[40] The difficulty with Mr. Asumeng’s submission about the decision to delay the closing is that the APS specifically permits the vendor to delay the closing. I fail to see how delaying the closing is evidence of bad faith when delay in closing by the vendor is a specific term of the agreement. Insisting on compliance with the agreed upon terms of the APS is not acting in bad faith.

[41] Moreover, the reality is that Cachet Orangeville was ready to close as of January 11, 2018 but Mr. Asumeng was not. I find that Cachet Orangeville reasonably agreed to several extensions at Mr. Asumeng’s request. As I see it, the failure to close the purchase was entirely the fault of Mr. Asumeng. By the time he did secure a mortgage commitment, it was too late. Cachet Orangeville was not required to provide further extensions or to provide Mr. Asumeng more time to secure financing. It owed no duty of loyalty to Mr. Asumeng and had no duty to put his interests above its own.

[42] Finally, the record discloses that the Amendment and the ARA clearly communicated to Mr. Asumeng that the timing of performance was essential to the agreement. This is not a case where the vendor was entering into an agreement with a party who did not have legal advice. Mr. Asumeng was represented by a solicitor throughout the transaction. The law is clear: if the purchaser breaches an essential element then that breach may be treated by the vendor as discharging the agreement and relieving against performance by the vendor.

[43] In conclusion, the APS placed on Mr. Asumeng an obligation to act. He did not. The fact that the vendor looked after its own interest by terminating the APS and retaining the deposit does not suggest that it was acting dishonestly or in bad faith. It would be wrong in law to find that Cachet Orangeville has acted in bad faith because it has attempted to strictly enforce the APS where time is of the essence. The jurisprudence also supports the submission made by Cachet Orangeville that when a transaction involving the sale of land does not close due to the default by a purchaser, the vendor is entitled to the payment of the deposit amount, without having to first prove actual damages: Sinha v. Shabestari, 2018 ONSC 298, Pleasant Developments Inc. v. Iyer, [2006] O.J. No 1319 (Div. Ct.), Mikhalenia v. Drakhshan, 2015 ONSC 1048, De Palma v. The Runnymede Iron & Steel Company, [1949] O.J. No. 495 (C.A.); Signal Chemicals Ltd. v. Dew Man Marine Trade Inc., 2011 ONSC 3951.

[44] I have also carefully considered Mr. Asumeng’s argument that he attempted to collect his deposit by securing a mutual release on February 9, 2018. I have serious reservations about the accuracy of this statement. The evidence filed shows that Ms. Rendine specifically outlined to the solicitor at 12:19 p.m. on February 9, 2018 that if Mr. Asumeng could execute a mutual release by 4:00 p.m. his deposit would be returned. However, there is no evidence that the solicitor responded to Ms. Rendine’s email. Ms. Rendine followed up at 4:39 p.m. confirming that she had not received a response or acknowledgement and that the APS was terminated.

[45] Mr. Asumeng points to an email between him and his solicitor dated February 17, 2018 as the evidence supporting his claim that he made every effort to provide a release. In that email, the solicitor confirms with Mr. Asumeng that Cachet Orangeville was requesting he sign a mutual release so that the vendor could return the deposit. However, by the time of this email, the deadline for Mr. Asumeng to sign a release in exchange for the return of his deposit had already passed. The email of February 9, 2018 clearly directed Mr. Asumeng to provide Cachet Orangeville with a signed release by 4:00 p.m. that day – eight days prior to the email relied on by Mr. Asumeng. In other words, this email exchange does not in fact support Mr. Asumeng’s submission that he made every effort to provide a release. Mr. Asumeng did not sign the release by the deadline.

[46] Furthermore, Mr. Asumeng and his solicitors continued to correspond with Cachet Orangeville after the February 9, 2018 deadline for returning a signed release and asked them to reinstate the APS on February 16, February 21 and March 5, 2018. Indeed, Mr. Asumeng sent an email to Cachet Orangeville on February 16, 2018 at 5:59 p.m. In that email he specifically pleads with Ms. Rendine that he would like to close the deal because he was in a position to show proof of a financial commitment. There is no mention of a mutual release.

[47] Therefore, I am not persuaded by Mr. Asumeng’s argument that he attempted to secure his deposit by providing a release but that Cachet Orangeville refused and did not respond.

[48] In conclusion, I am satisfied that Cachet Orangeville was entitled to and did properly terminate the APS. It follows that it was entitled to keep the deposit of money provided by Mr. Asumeng. I grant summary judgment and make the following declarations:

(i) Michael Ohene Asumeng breached the Agreement of Purchase and Sale dated May 3, 2016. (ii) Cachet Estate Homes (Orangeville) Inc. is discharged from any further obligations under the APS. (iii) Cachet Estates Homes (Orangeville) Inc. is entitled to the sum of $43,826.19 paid as a deposit together with all accrued interest. (iv) Mr. Asumeng’s claim issued on May 3, 2019 as against the defendants is dismissed.

Issue 3: Costs

[49] At the conclusion of oral argument, I heard submissions from the parties with respect to costs. The Defendants have been completely successful on their motion and they seek $12,000.00 in costs. Counsel for the Defendants filed an offer to settle with an expiry date of September 13, 2019.

[50] Mr. Asumeng points out that $12,000.00 is excessive. He submits that he has already lost a large amount of money by forfeiting the deposit and that saving that money took him a lengthy period of time.

[51] After reviewing the bill of costs submitted by the Defendants, I take into account that they have achieved success and that the costs incurred exceed those set out in the offer that expired in September 2019 by a wide margin.

[52] The Court of Appeal for Ontario in Fong v. Chan (1999), 46 O.R. (3d) 330 (C.A.), identified the three fundamental purposes in the modern rules for awarding costs:

1. To indemnify successful litigants for the cost of litigation;
2. To encourage settlement; and
3. To discourage and sanction inappropriate behaviour by litigants.

[53] In terms of deciding the amount of costs to order, the overarching principle that guides the court is that the amount must be fair and reasonable: Boucher v. Public Accountants Council for the Province of Ontario (2004), 71 O.R. (3d) 291 (C.A.). In Boucher, the court stated that the objective is to fix an amount that is fair and reasonable for the unsuccessful party to pay, rather than an amount reflecting the actual legal fees that a successful party has incurred.

[54] I also take into account Mr. Asumeng’s submission that he has already lost a large amount of money on his aborted transaction.

[55] The amounts claimed by Cachet Orangeville are not excessive. That said, I take into account its offer to settle, the fact that Mr. Asumeng did not behave inappropriately in responding to this motion, his personal circumstances and the complexity of the matter. I believe a fair and reasonable amount would be to award the moving parties’ costs in the amount of $9,000.00 inclusive of disbursements. Although the general rule is to order costs payable within 30 days, I am giving Mr. Asumeng 120 days to pay these costs.

[56] The moving parties may provide a draft order that is consistent with this judgment by email to my assistant at snaza.velanovski@ontario.ca. At the present time, the trial office is not issuing or entering any orders. The moving parties do not need Mr. Asumeng’s approval of the draft order as to form and content. Once the order has been forwarded to me, I will sign it. The signed original will be kept with the trial office in the court file. I note that Rule 59.01 of the Rules of Civil Procedure provides that the order is effective from the date it is made, that date being the date such order is made by the judge whether such order is contained in a signed endorsement, order or judgment.

Coroza J. Released: April 16, 2020