Court File and Parties

COURT FILE NOS.: CV-17-581689 CV-17-582676

DATE: 20201027

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: RUI ZHANG, Plaintiff

AND:

CHENG LIN, HUI DONG, ROYAL FAMILY REALTY INC. and VICKY YI, Defendants

CHENG LIN and HUI DONG, Plaintiffs

AND:

RUI ZHANG and ROYAL FAMILY REALTY INC., BROKERAGE, Defendants

BEFORE: Paul B. Schabas J.

COUNSEL: Leon Li, for Cheng Lin and Hui Dong Dheeraj Bhatia, for Rui Zhang

HEARD: October 2, 2020

Reasons for Judgment

Introduction

[1] This is a motion for summary judgment arising from a failed residential real estate transaction. The Buyer and Sellers each commenced lawsuits, and they each seek summary judgment.

[2] The Sellers, Cheng Lin and Hui Dong (“Lin and Dong”), seek damages from the Buyer, Rui Zhang (“Zhang”), after she failed to complete the transaction. The Sellers had to subsequently sell the property for a much lower price than Zhang had agreed to pay. Zhang, on the other hand, seeks judgment dismissing the Sellers’ action and return of her deposit.

[3] Zhang did not close the transaction, as required by the Agreement of Purchase and Sale (“APS”), claiming that the property’s lot dimensions were misstated by the Sellers, and that the Sellers had failed to provide a copy of a survey as required in the APS. At the time of the breach, Zhang also claimed that other conditions such as satisfactory financing and a satisfactory home inspection had not been waived, but these were not pursued on the motion. As well, Zhang raises a new ground on this motion, that the Sellers failed to tender on the closing date as required by the APS.

[4] As I explain below, I allow the motion brought by the Sellers, Lin and Dong, and grant judgment in their favour against the Buyer, Zhang. The dimensions of the property were not materially misstated, a survey was provided to Zhang, and the failure to tender was not pleaded or raised until it appeared in the Buyer’s factum and, in any event, is not supported by any evidence. I award damages to Lin and Dong in the amount of $245,946.50.

Summary Judgment

[5] This is a motion for summary judgment brought by the Sellers; however, the Buyer also seeks summary judgment, as she is entitled to request in response to such a motion: see, e.g., Meridian Credit Union Limited v. Baig, 2016 ONCA 150 at para. 17.

[6] The issue on a summary judgment motion is whether there is any “genuine issue requiring a trial” which cannot be appropriately addressed on the motion. I agree with the parties that the issues in this case “can be resolved in a fair and just manner” on this motion, and that there is no issue requiring a trial: Bruno Appliances and Furniture Inc. v Hyrniak, 2014 SCC 8 at para 22. Summary judgment has been found to be appropriate in resolving similar cases: Sankarsingh v. Ali, 2019 ONSC 5655; Hosseinzadeh v. Pringle, 2018 ONSC 1947 at para. 20, appeal allowed on other grounds, 2018 ONCA 1020.

[7] The parties have filed extensive evidence, have fully put their positions before me, and are content for me to resolve the actions on this motion. While there is some conflicting evidence, I am satisfied that the record provides me with a basis to draw inferences and conclusions to make the necessary findings of fact, making a trial unnecessary: Hyrniak v Mauldin, 2014 SCC 7 at para 4; Rule 20(2)(a) and (2.1) of the Rules of Civil Procedure, R.R.O. 1990, Reg 194.

Background

[8] On March 13, 2017, the parties entered into the APS in which Zhang agreed to purchase 14 Fairglen Avenue in Toronto from Lin and Dong for $1,100,000.00. The closing date was scheduled for June 28, 2017.

[9] The APS described the lot size as "having a frontage of 31.71 feet more or less by a depth of 156.1 feet more or less." The feature sheet and MLS listing also contained these dimensions, although Schedule B to the APS and the MLS listing make clear that representations in the feature sheet and MLS listing cannot be relied upon by the Buyer.

[10] Schedule A of the APS provided that the Seller agreed “to provide, at the Seller's own expense and within three (3) banking days after acceptance of this Offer, a copy of an existing survey of said property to the Buyer or agent.”

[11] Schedule A also had conditions regarding financing and inspection, which were deleted by the parties.

[12] Immediately after the APS was signed on March 13, 2017, Lin’s evidence is that he and Dong produced a copy of an existing survey of the property and that Zhang and her husband, Chao Yang, took digital photos of it on their mobile phones. Although Zhang and her husband dispute this, the Sellers’ agent, Vicky Yi (“Yi”), has confirmed Lin’s evidence on this point.

[13] A copy of the survey, which includes the dimensions of several lots on the street, indicates that the lot is on a street which curves, and shows that one side of the property is 156.07 feet and the other side is 142.60 feet.

[14] On March 14, 2017, Zhang delivered a deposit of $50,000.00 to the Sellers’ listing brokerage, Royal Family Realty Inc., in accordance with the APS.

[15] On May 2, 2017, Zhang requested an extension of the closing date for financial reasons to August 15, 2017. The Sellers agreed to the extension.

[16] On May 24, 2017, Zhang requested that the APS be terminated, or that the price be reduced by $130,000.00. Lin and Dong refused these requests.

[17] The request to lower the price followed the introduction, on April 20, 2017, of Ontario government rules intended to dampen the increases in the value of residential real estate, which had an immediate impact on the market. At the May 24 meeting with Lin and Yi, Zhang said that her own property had declined in value by at least $130,000.00, a point corroborated by a text message from Zhang’s agent to Yi on June 23, 2017, in which it is clear that Zhang’s concern with closing the purchase was the price following the change in the market.

[18] On July 5, 2017, Zhang’s lawyer wrote to the Sellers’ lawyer alleging that the conditions of financing and home inspection were not waived or fulfilled, even though those conditions had been clearly crossed out on the APS. The letter also asserted that a copy of the existing survey had not been provided. Although the letter stated that the survey was “crucial to the Buyer to verify the correct lot size of the property,” Zhang’s lawyer did not at that point allege that the dimensions of the property were misrepresented in the APS, but raised the fact that the Municipal Property Assessment Corporation ("MPAC") described the property as having a frontage of 31.71 feet and an unclear depth of “0” feet. Therefore, Zhang’s lawyer wrote, “a copy of the existing survey was crucial to the Buyer to verify the correct lot size of the property.” Zhang asserted that the APS was null and void and requested a return of her deposit.

[19] No request for a survey was made by the Buyers, or complaint that one had not been produced, prior to the July 5, 2017 letter. Zhang had made two visits to the property and had not requested a survey.

[20] A lawyer for Lin and Dong responded by letter on August 11, 2017, pointing out that the inspection and financing conditions had been deleted and stated that “a digital copy of survey” had already been provided after signing the APS on March 13, 2017. The letter stated that it also attached a copy of the survey, although Zhang’s evidence is that it was not attached. The Sellers’ lawyer also stated that the original survey would be delivered with the closing package. The letter concluded by saying that the “Vendors are willing, ready and able to close the transaction as scheduled. If you[r] client is to be in default to this transaction, the Vendors will take legal action to the Purchaser for the damages caused by your client's breach of contract.”

[21] Zhang’s lawyer replied immediately in a letter that is incorrectly dated August 10, as it was faxed on August 11 and responded to the August 11 letter from the Sellers. This letter does not say that the survey was not attached, nor does it dispute that the survey was provided on March 13, 2017. Rather, the letter seems to instead argue that providing a digital copy was not adequate, stating that “we fail to acknowledge in what way does a digital copy constitute as an existing survey.” The letter goes on to assert, with respect to the offer to provide an original survey, that time is “of the essence” in the APS, even though there is no obligation to provide an original survey in the APS.

[22] Zhang’s lawyer took the position, again, that the APS was null and void and demanded the return of the deposit, failing which Zhang would commence an action.

[23] Lin says that the Sellers’ closing package was tendered on August 15, 2017, but Zhang did not close the transaction. Zhang’s evidence is simply that “the closing of the transaction did not take place as scheduled on August 15, 2017, due to the failure and breach of the Defendants-Sellers.”

[24] On August 16, 2017, the Sellers’ lawyer advised Zhang of Lin and Dong’s intention to re-list the property and sought Zhang’s consent to the release of the deposit. Zhang did not respond.

[25] The Sellers re-listed the property immediately. The subsequent MLS listings described the dimensions differently. A listing in August 2017 stated the property had a depth of 149.39 feet, and a subsequent listing said that it was “Irreg: 142.60, 156.07.”

[26] Lin and Dong sold the property on June 21, 2018 for $860,000.00, which is 240,000.00 less than the purchase price in the APS. Together with other fees and expenses incurred, including mortgage interest and taxes, Lin and Dong seek damages of $276,796.42.

Issues

[27] The issues to be determined on this motion are as follows:

(a) whether the Sellers misrepresented the size of the property and, if so, did that entitle the Buyer to terminate the APS;

(b) whether the Sellers failed to provide a copy of the survey in accordance with the APS, entitling the Buyer to terminate the APS;

(c) whether the Sellers failed to tender on the closing date and thereby breached the APS; and,

(d) what remedy or damages follow from my findings on these issues.

The lot dimensions

[28] The lot size of 14 Fairglen Avenue is irregular due to the curve in the street. The survey shows that while the length of one side of the lot is 156.07 feet, the other side is 142.6 feet. The different lengths of the lot are not included in the APS, although the dimensions are qualified by the term “more or less.”

[29] The Court of Appeal held in Bouskill v. Campea, 1976 CanLII 776 (ON CA), 1976 CarswellOnt 831, 12 O.R. (2d) 265, (C.A.), as summarized more recently in Hosseinzadeh v. Pringle, 2018 ONCA 1020 at para. 10, “that a discrepancy too substantial to be encompassed by the words “more or less” will allow a purchaser to resile from the transaction and obtain the return of their deposit.”

[30] This is consistent with well-settled law that for a misrepresentation to result in the setting aside of an agreement it must be material. As stated in Barclays Bank PLC v. Devonshire Trust (Trustee of), 2011 ONSC 5008, at para. 157, affirmed 2013 ONCA 494, leave to appeal refused [2013] S.C.C.A. No. 374:

The requirement that the misstatement of fact be material means that the misrepresentation must relate to a matter that would be considered by a reasonable person to be relevant to the decision to enter the agreement in question. See J. D. McCamus, The Law of Contracts (Toronto: Irwin Law, 2005) at p. 300. McCamus further states at p. 301:

In addition to being shown to be material, the misrepresentation must have constituted an inducement to enter the agreement upon which the misrepresentee relied. Thus, a representee who undertakes his or her own separate investigation of the facts would not be held to have relied on the misrepresentation. On the other hand, it is clearly established that the representee has no obligation to engage in "due diligence" and make such an independent investigation, even where the means of doing so are made available by the misrepresentor. Further, it is clearly established that the misrepresentation need not be the exclusive or even a predominant inducement for entering the agreement. It must be established, simply, that it was an inducement. Moreover, once it is established that a misrepresentation is of such a nature that it is liable to induce the misrepresentee to enter the contract, it would be presumed against the misrepresentor that such inducement did occur.

[31] This issue has been raised in a number of cases involving real estate and the misstatement of lot dimensions. Facts that courts consider in determining whether the misrepresentation is material include: whether the discrepancy is so material that it would affect the purchase price; whether the discrepancy was known, or ought to have been known to the purchaser; and whether it would have impacted the decision of a reasonable person to purchase the property: Sankarsingh v. Ali, at paras. 65-68.

[32] In Sankarsingh, the court held that a lot represented to be 71.12 feet wide by 120 feet long, when it actually narrowed at the back to be only 44.93 feet wide, was not material, especially as it would have been apparent to anyone viewing the property that the lot was wider at the front than the back.

[33] In Hosseinzadeh, on the other hand, the property was represented as “having a frontage of 87.64 feet more or less by a depth of 100 feet more or less.” However, no boundary of the property was greater than 77.77 feet and the court held, at para. 35 of the motions judge’s decision, that “a discrepancy of this magnitude falls well outside of the ‘more or less’ language typically included in agreements of this kind.” The purchaser in Hosseinzadeh intended to subdivide the property, which is why he took further steps to determine the actual dimensions.

[34] In this case, Zhang relies on Hosseinzadeh; however, the discrepancy in that case is much greater than here. A closer case supporting Zhang is Bouskill v. Campea, where the property was described as being “100 feet more or less by 172 feet more or less…,” when the actual depth was approximately 161 feet. In finding for the purchaser, the trial judge was influenced by the fact that the purchaser intended to seek to rezone the property for development and called expert evidence that the smaller lot size was a significant deficiency in those circumstances. The trial judge was also influenced by the fact that, “due to the total absence of any stakes or markers, the boundaries of the property were not readily ascertainable upon inspection.” (Bouskill, para. 7)

[35] There are many differences between this case and the facts in Bouskill and Hosseinzadeh. Perhaps most importantly, the disparity between the represented dimensions and actual dimensions is relatively minor. In fact, the lot is 156.1 feet deep on one side. The discrepancy on the other side, of just over 13 feet, is due to the irregular front of the property on a curving street and this would have been apparent to Zhang, who had viewed the property on at least two occasions.

[36] The decision in Kuhirtt v. Lamb, 1991 CarswellOnt 584 (Gen. Div.), is instructive on this point. In that case, the lot was represented to be 60 feet by 120 feet. In fact, it was only 100 feet. The judge found, however, that the purchasers had examined the property carefully such that they were aware of the physical boundaries marked by hedges and streets. Morrissey J. stated, at para. 27:

I have reached the conclusion that the discrepancy in the stated depth of the property and the actual depth was not such as would allow the defendants to avoid the contract. The measurement was described as 120 feet, more or less. The discrepancy was not insignificant, but the defendants had an opportunity to view the land which they were purchasing and they purchased what they saw. They were not deceived as to the actual land which was being sold and conveyed.

[37] As in Kuhirtt, the Buyer had opportunities to view the property and knew what she was buying. The discrepancy in this case is also quite a bit less than in Kuhirtt.

[38] The minor nature of the discrepancy is demonstrated by the subsequent listing which stated the depth of the lot as 149.35 feet, which is the average or midpoint between the length of the two sides. This is about 7 feet less than the 156.1 feet in the APS, which is a smaller discrepancy than in Bouskill, where the court was influenced by other factors not present here. Zhang’s counsel made much of the different descriptions of the lot size in the later listings; however, I accept the Sellers’ explanation that the different dimensions were given simply to prevent another potential buyer from making the same argument as the Buyer has done in this case. It does not support an assertion that the Sellers knowingly or deliberately misrepresented the lot dimensions.

[39] In addition, as I conclude below, the Buyer received a copy of the survey on March 13, 2017 and would have known of the actual dimensions at that time, and would have seen on the survey that the lot was shorter on one side due to the curve in the street at the front. Zhang’s failure to question or object to the dimensions prior to July 5, 2017 undermines her statement that she would not have agreed to purchase the property if she had known that the depth of the lot was shorter on one side – an assertion that is not supported by any explanation and which lacks credibility. The evidence is that the Buyer wanted to get out of the deal because of the fall in the market, not due to a discrepancy in the size of the lot.

[40] In any event, the test for whether there is a material misrepresentation is objective: whether the irregularity in the dimensions would have impacted the decision of a reasonable person. In my view, it would not. This was a sale of a residential home in an established neighbourhood. Unlike in Bouskill and Hosseinzadeh, there is no evidence that a purchaser would be seeking to redevelop the land or subdivide it. Rather, a reasonable purchaser would be someone seeking to buy the home to live in it, who would be aware of the nature of the street and the extent of the lot and would not be surprised, or bothered, by the fact that one side of the lot is slightly shorter than the other.

The survey

[41] The evidence of both Lin and the Sellers’ agent, Yi, is that a survey was produced to the Buyer on March 13, 2017 when the APS was signed and the Buyer and her husband took digital photographs of it on their mobile phones. Both were cross-examined on this issue and their evidence was not shaken.

[42] Zhang contradicts this, but led no other admissible evidence, including from her husband and from her agent, who were present at the meeting on March 13, 2017. Zhang did put in a very brief affidavit from her husband, but only after the cross-examination of Zhang had been completed. No explanation, let alone a cogent or reasonable explanation, for the late delivery of that affidavit has been provided which would meet the threshold required for leave to file such late-breaking evidence, and I find it inadmissible and give it no weight: Rule 39.02(2) of the Rules of Civil Procedure; Sure Track v. Kaisersingh, 2011 ONSC 7388 at para. 30.

[43] Zhang’s lawyer interrupted and obstructed the questioning of his client on this issue, from which I infer that her answers would not have assisted her case. See 1954294 Ontario Ltd. v. Gracegreen Real Estate Development Ltd., 2017 ONSC 6369, at paras. 38 and 93, a case in which Mr. Bhatia was counsel and appears to have employed the same approach as he did here.

[44] Although the APS said the survey was to be provided within 3 days, there is no evidence that Zhang requested it or raised the need for the survey until her lawyer sought to terminate the APS on July 5, 2017. Nor did Zhang raise the alleged failure to provide the survey in May when she sought to extend the closing date on May 2, and when she sought a reduction in price on May 24.

[45] In her cross-examination, however, Zhang claimed for the first time that she asked her agent to follow up and that the agent asked for the survey “many times” and “there was never really a response.” After her cross-examination, Zhang swore an additional affidavit saying the same thing, but which I find to be inadmissible on the same basis as her husband’s affidavit.

[46] I can give Zhang’s evidence that she asked her agent many times to get the survey no credence. Given the importance of this issue, it ought to have been stated in Zhang’s affidavit. If true, one would have expected to see evidence of such communications, including from Zhang’s agent. Even in Zhang’s additional affidavit, there was no supporting evidence. There was no evidence from Zhang’s agent at any time. There was also no cross-examination of Yi on whether she had received any requests from Zhang’s agent, which there ought to have been if Zhang had disclosed it to her lawyer.

[47] Furthermore, in the exchange of correspondence on August 11, 2017, when the Sellers pointed out that a digital copy of the survey had been provided on March 13, counsel for the Buyer did not dispute that fact but instead took issue with the sufficiency of a digital copy as complying with the term of the APS, which required the Sellers to provide “a copy of an existing survey.” As has subsequently been quite sensibly held, the requirement to provide an “existing survey” does not mean the original survey: Shaghayagh Chiti Zadeh v. Alireza Khaibari also known as Alireza Khibari And Homelife Landmark Realty Inc., Brokerage, 2018 ONSC 4667 at paras. 34-35, appeal dismissed, 2019 ONCA 253. In this case, the language was even clearer, requiring that the Sellers provide “a copy of an existing survey of said property to the Buyer or agent,” [emphasis added] which I have concluded occurred when the Buyers took digital photographs of the survey on March 13, 2017.

[48] In the cross-examination of Yi, Zhang’s lawyer did pursue one line of questioning about why, if the survey had been provided on March 13, 2017, the clause requiring a survey was not crossed out at that time. While that might have been prudent and would have avoided this controversy, Yi responded correctly that it was not necessary to do so. Further, Yi’s evidence was that the survey was requested and provided after the APS was executed, a point also made by the Sellers’ lawyer in her August 11, 2017 letter. It is understandable that no one would have thought to go back and make further changes to the APS.

[49] Although I have concluded that a copy of a survey was provided in compliance with the APS, had it not been provided, then the court would have to address whether the breach of this term would have entitled the Buyer to refuse to close the transaction. As a failure to provide a survey would have had no impact on the Buyer’s ability to close the transaction, I would not have been inclined to find for the Buyer on this point: Domowicz v. Orsa Investments Ltd., 1993 CarswellOnt 651, 36 R.P.R. (2d) 174 (Gen. Div.) at para. 30; Hatami v. 1237144 Ontario Inc., 2018 ONSC 668 at para. 48.

The tendering point

[50] The Buyer raised in its factum an argument that the Sellers breached the APS by not being “ready, willing and able” to close the transaction on August 15, 2017. This submission fails for two reasons. First, the Buyer has led no evidence to support this submission other than a bald and vague allegation that the closing did not occur “due to the failure and breach of the Defendants-Sellers.” The evidence from the Sellers is to the opposite effect, that they were was ready to sell the property on the closing date, and that a closing package was tendered.

[51] Secondly, this position was not pleaded or raised by Zhang until her responding factum on this motion, and it is unfair to Lin and Dong to put it forward at such a late stage, after all evidence and argument has been completed. As was stated by K.F. Ross J. in Bank of Montreal v. 1480863 Ontario Inc.,2007 CarswellOnt 2419, [2007] O.J. No. 149, at paras. 40-41

The respondent's factum and argued on the motion were not pleaded in the respondent's statement of defence. It is informative to note the view expressed in the following two cases where a party advances issues on a motion for summary judgment which had not been pleaded. The first is the case of Caglar v. Moore, [2005] O.J. No. 4606 (Ont. S.C.J.) where a defendant moved for summary judgment. T. Ducharme J. said at para. 14

At the outset of this motion, the Court raised the issue that the defendant had not pleaded either the foreign law, i.e. the Manitoba statutes, or any limitation period. As Finlayson J.A. noted in Kalkinis (Litigation Guardian of) v. Allstate Insurance Co. of Canada (1998), 1998 CanLII 6879 (ON CA), 41 O.R. (3d) 528 (C.A.) at p. 533, "It has long been established that the parties to a legal suit are entitled to have a resolution of their differences on the basis of the issues joined in the pleadings." If anything, the importance of proper pleadings is heightened on a motion for summary judgment and the matter should only be resolved as defined in the pleadings.

The second case is the Court of Appeals decision in Marketing Products Inc. v. 1254719 Ontario Ltd., [2000] O.J. No. 5092 (Ont. C.A.). This was an appeal by the defendant from judgment granted to the plaintiff upon a motion for summary judgment [2000 CarswellOnt 1538 (Ont. S.C.J.)]. The Court said at paras. 27 and 28

Tech submits that the motions judge erred in not considering its evidence that it tendered the cheque on the basis of MPI's misrepresentation that it would pay outstanding commissions, rebates and warranty credits then owing, and that MPI never made the promised payments.

I disagree. Tech has not pleaded a defence of misrepresentation going to the validity of the cheque. Rather, it has pleaded that MPI's refusal to pay commissions, rebates and credits was justification for its self-help remedy of stopping payment on the cheque. Thus Tech's misrepresentation claim is not a material fact in relation to MPI's claim on the cheque. [emphasis added]

[52] Accordingly, leaving aside the lack of evidence to support it, as the allegation of failing to tender was not pleaded by the Buyer, it would be unfair to the Sellers to permit it to be advanced on this motion.

Conclusion on liability

[53] As a result of my findings above, the Buyer breached the APS by failing to complete the transaction on August 15, 2017 and had no legal justification for doing so. I turn, then, to the damages to be paid by Zhang to the Sellers.

Damages

[54] Lin and Dong sold the property on June 21, 2018 for $860,000.00, which is 240,000.00 less than the purchase price in the APS that was signed by Zhang. They break down their claim for damages as follows:

(a) Decrease in the value of the Fairglen Property: $240,000.00

(b) Additional mortgage interest from August to October 2017: $9,596.02

(c) Mortgage renew fee to Home Trust: $200.00

(d) Additional mortgage interest from November 2017 to June 2018: $14,653.62

(e) Prepayment Compensation Fee charged by Home Trust: $5,746.50

(f) Additional property tax for the year of 2017: $1,346.78

(g) Additional property tax paid for the year of 2018: $1,744.70

(h) Additional home insurance from September 2017 to June 2018: $658.80

(i) Additional loan interest paid to Chen: $450.00

(j) Wasted real estate lawyer's fee: $1,400.00

(k) Wasted legal fees to the Law Office of Amold Zweig: $1,000.00

Total: $276,796.42

[55] Counsel for Lin and Dong advised me that the Sellers continued to live in the house at 14 Fairglen Ave until the property was sold in June 2018. As they had the benefit of living there, they are not entitled to reimbursement of the additional mortgage interest, property tax and insurance. Further, I do not have adequate evidence to support the claims for legal fees or the loan interest. Accordingly, the items in paragraphs (b), (d), (f), (g), (h), (i), (j) and (k) are not allowed.

[56] The Sellers renewed their first mortgage to Home Trust Company as of November 1, 2017, at an interest rate of 4.49%, for a 12-month term. They had to pay a $200 fee for the renewal. Additionally, when they sold the property in June 2018, the Sellers had to terminate the mortgage early, incurring a prepayment charge of $5,746.50. These charges should also be paid by the Buyer.

[57] Prior to the APS closing date, on July 1, 2017, Lin and Dong had renewed their mortgage on a “fully open” basis at an interest rate of 8.99%. I take from the term “fully open” and the high interest rate charged that this entitled them to terminate the mortgage without penalty, which they would have expected to do had the sale closed on August 15, 2017. As the sale did not close and Lin and Dong could not know how long it would take to sell the house, it was reasonable for them to then renegotiate the mortgage at a much lower rate of interest resulting in a reduction in their monthly payments of over $1,100.00, even though it came with the risk of having to incur a prepayment charge if the mortgage had to be terminated early. In my view, therefore, the renewal fee and prepayment charge are reasonably linked to and were caused by the breach of the APS by the Buyer and are appropriately claimed as damages.

[58] I conclude the damages payable to Lin and Dong by Zhang shall be the difference in price obtained by the Sellers plus the mortgage renewal fee of $200.00 and the prepayment charge of $5,746.50. The total amount is $245,946.50. There shall be pre-judgment interest on the $240,000.00 amount commencing August 15, 2017, and on the balance commencing June 21, 2018.

[59] The deposit of $50,000.00 shall be forfeited and released to the Sellers, and that amount shall be credited to the Buyer as partial payment of the damages.

Conclusion

[60] The Sellers, Lin and Dong, shall have judgment against Zhang in accordance with these Reasons. Zhang’s claim against the Sellers shall be dismissed.

[61] Should the parties be unable to agree on costs, Lin and Dong may provide me with written submissions not exceeding 3 pages double-spaced, not including supporting materials, within 14 days of the release of these Reasons, and Zhang may respond in similarly limited submissions 7 days after the receipt of Lin and Dong’s submissions.

Paul B. Schabas J.

Date: October 27, 2020