COURT FILE NO.: CV-19-00626667

DATE: 20201027

SUPERIOR COURT OF JUSTICE – ONTARIO

RE: TRIBUTE (SPRINGWATER) LIMITED, Plaintiff

AND:

PETER DOYLE, Defendant

BEFORE: Davies J.

COUNSEL: Sarah Berhane, for the Plaintiff

No materials submitted by the Defendant

HEARD at Toronto: In writing

REASONS FOR DECISIONS

Overview

[1] This is a motion for default judgment.

[2] On May 13, 2017, Peter Doyle signed an Agreement of Purchase and Sale (APS) to buy a property in a new development in Springwater, Ontario for $1,499,990. Tribute was to build a house on the property for Mr. Doyle. The tentative closing was set for March 12, 2019.

[3] The APS was conditional until May 27, 2017 to allow Mr. Doyle time to secure financing. Mr. Doyle did not give Tribute notice before May 27, 2017 that he was unable to secure financing so that condition was deemed to have been waived.

[4] Mr. Doyle paid a $150,000 deposit.

[5] Between December 14, 2017 and May 15, 2018, Mr. Doyle selected several upgrades for his house totaling $42,648.97. Under the APS, the first $20,000 (including taxes) of upgrades would not be charged to Mr. Doyle. Therefore, Mr. Doyle owed $22,648.97 for the upgrades he selected. Mr. Doyle paid a deposit of $3,379.35 for the upgrades leaving $19,251.62 owing on closing.

[6] The parties renegotiated the APS to add the remaining balance for the upgrades to the purchase prices. The new purchase price should have been $1,519,241.62. However, the amended APS the new purchase price is listed as $1,520,453.73. Given this discrepancy, I convened a case conference by telephone so Ms. Berhane could explain the calculations to me. During case conference, Ms. Berhane agreed that the purchase price in the amended APS was wrong and the correct final purchase price was $1,519,241.62.

[7] After the APS was amended, Mr. Doyle selected additional upgrades to the property totally $2,203.51, which was due on closing.

[8] Given that Mr. Doyle paid a deposit of $150,000, I am satisfied that the balance owing on closing including the adjustments for the upgrades was $1,371,463.13.

[9] Mr. Doyle had difficulties securing financing for the property so the parties negotiated two extensions to the closing date. The final closing date agreed to by the parties was April 10, 2019. Through his lawyer, Mr. Doyle requested a further extension or, in the alternative, he offered to purchase a different, less expensive property in the same development in lieu of closing on the property he bought. Tribute refused to extend the closing past April 10, 2019 or to allow Mr. Doyle to purchase a different property.

[10] On April 10, 2019, Tribute tendered on Mr. Doyle and he did not close. On May 5, 2019, Tribute sent a letter to Mr. Doyle’s lawyer terminating the APS.

[11] The property was resold on August 12, 2019 for $909,900. Tribute paid $917.25 commission on the re-sale of the property.

[12] Tribute now seeks default judgment in the amount of $575,290.39. This represents the difference between the purchase price agreed to by Mr. Doyle and the final sale price on the property plus interest and carrying costs.

Procedural History and Notice to Mr. Doyle

[13] Tribute issued its statement of claim and served it on Mr. Doyle on September 3, 2019.

[14] Mr. Doyle retained counsel to assist him with this matter. Between September and November 2019, the parties tried to negotiate a settlement of the claim. In mid-November, Mr. Doyle told Tribute that he was no longer represented by counsel. Mr. Doyle made a further offer to settle that was rejected by Tribute.

[15] After the negotiations broke down, Mr. Doyle failed to deliver a statement of defence. On March 6, 2020, he was noted in default.

[16] On March 23, 2020, Tribute sent Mr. Doyle a copy of the signed Requisition to Note in Default. Tribute advised Mr. Doyle that it had scheduled a default judgment motion for July 10, 2020 but the motion would be rescheduled because of the suspension of in person court proceedings in response to COVID-19.

[17] On May 27, 2020, counsel for Tribute wrote to Mr. Doyle and told him she intended to ask the Court to hear Tribute’s motion for default judgement in writing. Counsel proposed a timeline for the exchange of documents. Mr. Doyle did not respond.

[18] On July 13, 2020, counsel for Tribute requested a case conference to discuss the scheduling of the default judgment motion.

[19] On July 15, 2020, counsel for Tribute was contacted by Ms. Shaneka Taylor, a lawyer who Mr. Doyle had consulted but not retained. Ms. Taylor said that Mr. Doyle intended to bring a motion to set aside the noting in default so he could file a statement of defence. A few days later, Ms. Taylor advised counsel for Tribute that she was not retained and asked that any further communication be directed to Mr. Doyle.

[20] Justice Chalmers convened a case conference on August 6, 2020. Mr. Doyle participated in the case conference. Justice Chalmers scheduled the default judgment motion to be heard in writing the week of September 22, 2020. Justice Chalmers set a timetable for the exchange of documents. The Plaintiff was required to file its motion record by August 14, 2020. Mr. Doyle was required to file his responding motion record by August 28, 2020. The Plaintiff was to serve its factum by September 4, 2020 and the Defendant was given until September 11, 2020 to file his factum. The Plaintiff was to file its reply factum by September 18, 2020.

[21] Tribute served a copy of its motion record on Mr. Doyle on August 14, 2020. Mr. Doyle did not file a motion record. The Plaintiff served and filed its factum on September 18, 2020. Counsel explained that they missed the September 4, 2020 deadline as a result of a clerical error in their office. The filing deadline for the factum was mistakenly recorded in her calendar as September 18, 2020. I accept counsel’s explanation.

[22] Given that Mr. Doyle did not file any materials on motion, I find that he was not prejudiced by the fact that the Plaintiff filed its factum late.

[23] I find that Mr. Doyle has notice of this motion and has been provided with a fair opportunity to respond or to bring his own motion to have the noting in default set aside. Having no materials from Mr. Doyle, I am prepared to consider Tribute’s motion on an ex parte basis.

Contract Breach and Damages

[24] Mr. Doyle is deemed to have admitted the facts pleaded by Tribute in its statement of claim: rule 19.02(1)(a). In addition, Tribute has adduced three affidavits, including an affidavit from a certified Canadian Residential Appraiser who assessed the value of the home as of April 9, 2020 at $900,000. Based on the admitted facts and the evidence adduced, I am satisfied that Mr. Doyle breached the APS by failing to close on April 10, 2019.

[25] I am satisfied that the difference between what Mr. Doyle agreed to pay for the property on closing and the eventual sale price for the property is $461,545.13.

[26] The APS says that if the purchaser defaults on the APS, the Vendor is also entitled to recover any costs or expenses incurred as a result of the breach. I am satisfied that Tribute incurred $650 in legal fees as a result of Mr. Doyle’s breach of the APS. Tribute is entitled to recover those fees.

[27] I am also satisfied that the carrying costs of the property between April 9, 2019 and when the property sold on August 12, 2019 are reasonably foreseeable damages arising from Mr. Doyle’s breach of the APS. The total carrying costs for that period are $227.02 for hydro and $898.30 for gas.

[28] I am also satisfied that Mr. Doyle is responsible for the property taxes and insurance that Tribute paid for the property between April 9, 2019 when the APS was breached and November 26, 2019 when the property closed as part of the carrying costs of the property. The total property taxes during that period is $413.88. The total for insurance during that period is $168.75.

[29] The APS also says that Tribute is entitled to a 15% administrative fee on expenses incurred as a result of a breach of the agreement. Tribute’s expenses, including the commission paid to re-sell the property, legal fees and carrying costs, total $3,275.20. The administrative fee owing on these expenses is $491.28.

[30] Finally, Tribute seeks interest on the balance owing by Mr. Doyle from the date of the breach on April 9, 2019 to September 22, 2020. The APS says “in the event the Purchaser fails to make payment as and when required pursuant to the terms of this Agreement, the payment amount shall bear interest at a rate equal to five (5%) percent above the Prime Rate, calculated from the due date to the date of payment.” Counsel has provided detailed calculations for four different periods:

• from April 9, 2019 when the APS was breached to August 12, 2019 when the property was re-sold and a deposit was received by Tribute;

• from August 13, 2019 to November 27, 2019 when the re-sale closed and Tribute received the full purchase price;

• from November 28, 2019 to March 5, 2020, which is the last date before the Prime Rate changed; and

• from March 6, 2020 to September 22, 2020

[31] Based on the calculations provided, I am satisfied that the total interest owing under the APS is $109,978.78

Costs

[32] Tribute seek costs on the Application. A successful party is presumptively entitled to costs on a partial indemnity scale. Costs can be awarded on a substantial indemnity basis but only if the conduct of a party is reprehensible, scandalous or outrageous; Young v. Young, 1993 34 (SCC), [1993] 4 S.C.R. 3 at para. 251. In my view, Mr. Doyle’s conduct, either giving rise to the breach of the APS or in failing to respond to the action, is not sufficiently egregious to warrant sanction in the form of a higher cost award.

[33] Having considered the factors set out in Rule 57.01 and the principles articulated by the Court of Appeal in Boucher v. Public Accountants Council for the Province of Ontario, 2004 14579 (ON C.A.) at para. 26, I find that it would be fair and reasonable for Mr. Doyle to pay costs on a partial indemnity basis in the amount of $7,805.95.

Conclusion

[34] I find that Tribute is entitled to judgment in the amount of $575,290.39 plus costs in the amount of $7,805.95. The motion for default judgment is granted on the terms set out in the order signed by me today.

Davies J.

Date: October 27, 2020