COURT FILE NO.: CV-19-00625914-0000
DATE: 20210318
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
GEORGE LESLIE SCOTT and HARRIET BRAV-BAUM
Plaintiffs/Defendants by Counterclaim
– and –
SHOREH FORJANI a.k.a. SHOREN KONSTANTIN
Defendant/Plaintiff by Counterclaim
Gregory P. Weedon, lawyer for the plaintiffs/defendants by counterclaim
Michael Lesage, lawyer for the defendant/plaintiff by counterclaim
HEARD: March 12, 2021
ENDORSEMENT
DIAMOND J.
Overview
[1] On May 15, 2017, the parties signed an Agreement of Purchase and Sale (“the agreement”) whereby the defendant agreed to purchase the plaintiffs’ property municipally known as 322 Burnett Avenue, Toronto, Ontario (“the property”) for the price of $1,450,000.00.
[2] The transaction was scheduled to close on June 29, 2018. The transaction did not close, and as a result the plaintiffs issued an application against the defendant seeking (a) a declaration that the defendant breached the agreement, and (b) an order forfeiting the defendant’s $72,500.00 deposit to the plaintiffs.
[3] By Reasons for Decision dated May 24, 2019, Justice Leiper granted the plaintiff the relief they sought in their application. The defendant did not appeal Justice Leiper’s decision. The plaintiffs thereafter commenced the within action against the defendant for damages for breach of the agreement in a sum “not less than $350,000.00”.
[4] As described in greater detail hereinafter, the plaintiffs re-listed the subject property on July 10, 2018 for $1,388,000.00. The listing price was subsequently reduced on three subsequent occasions between August and November 2018. The plaintiffs ultimately entered into another Agreement of Purchase and Sale (“the second agreement”) for $1,120,000.00. That second transaction did close.
[5] The plaintiffs now bring a motion for summary judgment seeking damages in the total amount of $253,011.08, said sum consisting of what the plaintiffs claim to be the difference between the agreement and second agreement together with additional mortgage payments, property taxes, property maintenance expenses and out of pocket legal fees.
[6] The plaintiffs’ motion was argued before me on March 12, 2021. Of note, at the outset of the hearing counsel for the plaintiffs indicated that there was an outstanding request for the appointment of a litigation guardian for the plaintiff, George Leslie Scott. As of the date of this Endorsement, no litigation guardian has been formally appointed.
[7] At the conclusion of the hearing, I took my decision under reserve.
Preliminary Matter
[8] In a Civil Practice Court Endorsement dated November 17, 2020, Justice Myers scheduled the plaintiffs’ motion for summary judgment “to quantify the plaintiffs’ damages”. Justice Myers set a schedule for the interim steps leading up to the hearing of the motion for summary judgment, and stated as follows:
“Liability was determined in a prior application. Motion is booked for February 17, 2021 for one day. Ms. Konstantin advises that she has grounds for dispute with the prior judgment against her for liability. She understands that those complaints are to be brought by her as best as she can while this motion moves forward toward its hearing. The schedule set out below is ordered.”
[9] On January 8, 2021, the parties scheduled a case conference before me, during which counsel for the plaintiffs sought clarification that the defendant’s purported cross-motion (seeking an order setting aside or vary the Leiper judgment) would not proceed at the same time as the plaintiffs’ motion for summary judgment. In my Endorsement dated January 8, 2021, I ruled that the defendant’s cross-motion was not to be heard together with the plaintiffs’ motion for summary judgment, and the issue of the validity of the Leiper judgment was not to be argued or considered by the Court at the hearing of the motion for summary judgment.
[10] I permitted the defendant to independently bring her motion to vary or set aside the Leiper judgment (presumably pursuant to the provisions of Rule 59.06 of the Rules of Civil Procedure), but any such efforts would not derail or delay the plaintiffs’ motion for summary judgment.
[11] The defendant’s cross-motion has yet to be scheduled. Accordingly, in accordance with both the orders of Justice Myers and myself, my decision is solely concerned with whether summary judgment as sought by the plaintiffs is just and appropriate in the circumstances of this case. For those reasons, I declined to entertain the plaintiff’s request to dismiss the defendant’s counterclaim as part of the plaintiff’s motion for summary judgment.
Summary Judgment
[12] Rule 20.04(2)(a) of the Rules of Civil Procedure provides that the Court shall grant a summary judgment if the Court is satisfied that “there is no genuine issue requiring a trial with respect to a claim or defence.” As a result of the amendments to Rule 20 introduced in 2010, the powers of the Court to grant summary judgment have been enhanced to include, inter alia, weighing the evidence, evaluating the credibility of a deponent and drawing any reasonable inference from the evidence.
[13] In Hryniak v. Mauldin 2014 SCC 7, the Supreme Court of Canada held that on a motion for summary judgment, the Court must first determine whether there is a genuine issue requiring a trial based only upon the record before the Court, without using the fact-finding powers set out in the 2010 amendments. The Court may only grant summary judgment if there is sufficient evidence to justly and fairly adjudicate the dispute, and if summary judgment would be an affordable, timely and proportionate procedure.
[14] The overarching principle is proportionality. Summary judgment ought to be granted unless the added expense and delay of a trial is necessary for a fair and just adjudication of the case.
[15] As held in Sanzone v. Schechter 2016 ONCA 566, only after the moving party discharges its evidentiary burden of proving that there is no genuine issue requiring a trial for resolution does the burden then shift to the responding party to prove that its claim has a real chance of success. The Court must address the threshold question of whether the moving party discharges its evidentiary obligation to put its best foot forward by adducing evidence on the merits.
[16] Nothing in Hyrniak or the subsequent jurisprudence displaces the onus upon a party responding to a motion for summary judgment to “lead trump or risk losing.” The Court must assume that the parties have put their best foot forward and placed all relevant evidence in the record. If the Court determines that there is a genuine issue requiring a trial, the inquiry does not end there and the analysis proceeds to whether a Court can determine if the need for a trial may be avoided by use of its expanded fact-finding powers.
[17] As recently held by the Court of Appeal for Ontario in Royal Bank of Canada v. 1643937 Ontario Inc., 2021 ONCA 98, when hearing a motion for summary judgment, the Court must follow the analytical process set out in Hryniak and carefully analyze all the evidence relied upon by a responding party in his/her efforts to show the presence of a serious issue requiring a trial.
Summary of Key Facts
[18] As stated, the purchase price in the original agreement was $1,450,000.00. The house was originally listed for $1,372,000.00. The original MLS listing contained the following words: “great for move in, renovations or new build.”
[19] The defendant, without ever actually seeing the property herself, offered to purchase it for $1,450,000.00. The agreement was not conditional on inspection, financing or any other conditions precedent. It was the defendant’s intention to perform substantial renovations, finish the basement and add a second floor, which would have changed the entire nature of the property.
[20] Once the defendant failed to close the transaction, the plaintiffs re-listed the property on July 10, 2018 for a price of $1,388,000.00 ($16,000.00 more than the original listing price). While the second MLS listing restated that the property was “great for move in, renovation or new-build”, it also indicated that the property was being sold in an “as is” condition.
[21] The defendant argues that the inclusion of an “as is” term was a substantial difference, and meant that the plaintiffs were not making any representations or warranties with respect to the property. The defendant’s position is somewhat confusing, as the agreement provided that all parties acknowledged and agreed that the electrical, mechanical, heating, ventilation, air conditioning system, water boiler and all other equipment were in “as is” order on completion of the transaction. There are no other representations and warranties set out in the agreement dealing with the property.
[22] The plaintiffs gave evidence that while they kept the property clean and maintained the garden during the second listing, it was their intention to have any potential purchasers conduct their own home inspections if they wished to satisfy themselves of the state of the property.
[23] In any event, due to an absence of offers, the plaintiffs reduced the listing price on several occasions between August and November 2018. The particulars of those reduced listings are as follows:
• On or about August 28, 2018 the listing price was reduced to $1,288,000.00;
• On or about September 15, 2018 the listing price was reduced to $1,250,000.00; and,
• On or about October 12, 2018 the listing price was reduced to $1,199,000.00.
[24] Apart from the listing price, all of the other terms of the MLS listing remained the same.
[25] The plaintiffs did receive at least two offers which were well below the original listing price. On September 3, 2018, they received an offer to purchase the property for $1,000,000.00. On October 3, 2018, they received an offer to purchase the property for $950,000.00. The plaintiffs did not accept either offer.
[26] Ultimately, on or about November 5, 2018 the plaintiffs received an offer to purchase the property for $1,120,000.00. They accepted that offer, as the property had already been on the market for over 125 days during the second listing. The plaintiffs believed that the $1,120,000.00 offer was the best option available to them.
[27] Between the aborted closing of the agreement, and the closing of the second agreement, the plaintiffs made additional mortgage payments, incurred additional property taxes, and spent approximately $840.00 in property maintenance expenses.
[28] The plaintiffs are also claiming their legal costs thrown away from the aborted closing of the agreement.
The Defendant’s “Expert” Evidence
[29] In opposing the plaintiffs’ motion for summary judgment, the defendant filed no additional evidence with respect to the property itself, but tendered (albeit well past the deadline set out in the timetable ordered by Justice Myers), three sworn affidavits purporting to show that the value of the property was higher than the $1,120,000.00 price ultimately accepted by the plaintiffs.
[30] The first affidavit was sworn by Mohammad Aghamiri (“Aghamiri”), a real estate broker with Family Home Realty Inc. Aghamiri’s affidavit attached (a) a signed Form 53 Acknowledgement, and (b) a December 21, 2020 letter of opinion which provided, inter alia:
• Aghamiri had never been into nor driven by the property; and,
• Aghamiri was asked by the defendant to “look into two MLS listings” for the property and give an opinion as to whether anything must have happened to the property to generate such a lower purchase price.
[31] Aghamiri states that the fact that the property was being sold in an “as is” condition must have been a large contributing factor to the lower purchase price, despite Aghamiri never having been to the property or having reviewed the defendant’s own offer to purchase and the original agreement. No professional resume or curriculum vitae were provided by Aghamiri.
[32] The second affidavit was sworn by David Rober (“Rober”). In his affidavit, Rober attached (a) a sworn Form 53 Acknowledgment, and (b) an appraisal he conducted of the property which concluded that the property’s value as at November 5, 2018 was $1,350,000.00 - $1,400,000.00 based upon the direct comparison approach. Rober never attended the property and relied solely on the defendant’s information. In his appraisal, Rober stated the following:
“Because of the inability to access and view the interior/exterior of this property, information and details concerning the interior/exterior finishing, quality and condition are taken from sources deemed reliable. If any of these details are subsequently determined to be inaccurate, the appraiser reserves the right to amend the appraisal and the value herein.”
[33] Like Aghamiri, Rober did not provide any professional resume or curriculum vitae.
[34] The third affidavit was sworn by Anthony Fusco (“Fusco”) who attached (a) a sworn Form 53 Acknowledgement, and (b) a letter dated December 23, 2020 from A.J.F. Financial Corporation (presumably Fusco’s company) to “whom it may concern”. The letter confirmed a sequence of events which apparently included the defendant’s lender appraising the property as at June 2018 at a value somewhere between $1,400,000.00 - $1,450,000.00. It is difficult to understand what the Fusco affidavit seeks to achieve, as not only is there no professional resume or curriculum vitae filed on behalf of Fusco, but it is difficult to understand his role in the original transaction.
[35] In my view, all of the above affidavits must be afforded little to no weight, and are arguably inadmissible. It is trite to state that the ability to tender opinion evidence is a privilege afforded by the Court, and not a right bestowed upon an individual. The Court functions as a gatekeeper to ensure that parties who seek to tender opinion evidence comply with the applicable rules governing admissibility, and if admissible, weight.
[36] The Court requires a professional resume or curriculum vitae from any individual seeking to be qualified as an expert in a given area. Without a professional resume or curriculum vitae, that individual cannot establish his/her expertise for the Court’s consideration. I have no idea if Aghamiri, Rober or Fusco have completed one letter of opinion and/or appraisal, or 10,000 letters of opinion and/or appraisals. The Court has no idea as to any of their purported experience in real estate generally, let alone the specific area in which the property is located.
[37] When Aghamiri was cross-examined upon his affidavit, he was asked questions about his qualifications, experience and instructions. Ironically, the defendant (who was self-represented at the time) refused to allow Aghamiri to answer those questions. In the face of those refusals, the Court can only draw an adverse inference that the answers Aghamiri could have provided would not have assisted the defendant’s case.
[38] To the extent that any of the three affidavits are even admissible (and I have serious concerns in that regard), I afford no weight to the opinions of Aghamiri, Rober or Fusco.
Is this an Appropriate Case for Summary Judgment?
[39] The issue for the Court’s determination, whether at a motion or summary judgment or at trial, is whether the plaintiffs mitigated their damages caused by the defendant’s breach of the original agreement. While the plaintiffs were under a duty to mitigate their damages, it is the defendant who is charged with the legal onus to prove that the plaintiffs did not discharge their duty to mitigate.
[40] On the record before me, I find that I am in a position to arrive at a just, fair and proportionate determination of the merits of this motion for summary judgment. The defendant was under an obligation to put her best foot forward, and through the inclusion of the three purported expert affidavits, she proverbially tripped and fell. To consider the strengths or weaknesses of her position on this motion for summary judgment would not require any findings of fact or credibility which are not already available on the record before the Court.
[41] As I have already rejected the purported opinion evidence tendered by the defendant on this motion for summary judgment, there is no evidence from the defendant to support her contention that the plaintiffs failed to mitigate their damages.
[42] In the absence of any such evidence from the defendant, I am thus left with the plaintiffs’ evidence to assess. The defendant argues that the plaintiffs’ efforts, and in particular their insertion of the “as is” clause in the second listing, support a finding that the plaintiffs failed to discharge their duty to mitigate. While I agree that the words “as is” were not found in the original listing, the inclusion of those words means that the plaintiffs were not prepared to make any representations or warranties with respect to the adequacy, fitness or any other aspect of the property. Ironically, this is exactly what the defendant bargained for when she entered into the agreement, and as such I fail to see how it lies in the mouth of the defendant to complain about an “as is” term in the second listing if the defendant did not rely upon any representations or warranties (other than an “as is” condition in the agreement) in seeking to close a $1,450,000.00 transaction. Surely the plaintiffs have discharged their duty to mitigate by remaining consistent with their position set out in the original agreement as relief upon by the defendant.
[43] Further, as held in Victorian Homes (Ontario) v. DeFrietas et al [1991] 16 R.P.R. (2nd) 55 (Ont. Gen. Div.):
“The respondent argues that it is inappropriate that damages are calculated based on the selling price of a later date, rather than the value at the time of the breach. While hypothetical appraisals at the time of the breach might disclose different figures, in my view, there is no better evidence to calculate the real damage suffered than the price that the plaintiff was able to obtain in the market for the resale of the home. This determines the actual out-of-pocket damage suffered by the plaintiff as a result of the purchaser’s default.”
[44] It is clear from the record that market forces, and not anything done or not done by the plaintiffs, dictated the sale price of the property in the fall of 2018. The value of the property is typically what a purchaser is willing to pay for it. Poor market conditions were responsible for the reduced purchase price in this case. There is no evidence to the contrary, and the best and most reliable evidence is what actually happened from July to November 2018.
[45] Accordingly, I do not find that the presence of a genuine issue requiring a trial, and I grant summary judgment against the defendant as requested.
What are the Plaintiffs’ Damages?
[46] To begin, I agree with the defendant’s calculation of damages relating to the difference in sale prices in the two agreements. In the original agreement, the plaintiffs would have received net proceeds of $1,368,000,075.00 once the real estate commission (inclusive of HST) was paid from the $1,450,000.00 in gross sale proceeds.
[47] Using the same approach, the plaintiffs would have received $1,056,720.00 in net sale proceeds under the second agreement. The difference between the two transactions is therefore $238,855.00.
[48] I accept the plaintiffs’ evidence that they incurred additional mortgage payments in the amount of $5,280.00, and additional property taxes in the amount of $2,467.08 (both figures calculated on a per diem rate).
[49] I also accept the plaintiffs’ evidence that they incurred $840.00 in property maintenance expenses between July and November 2018.
[50] The defendant takes issue with the legal costs claimed by the plaintiffs in the amount of $3,424.00 arising from the aborted transaction. Specifically, the defendant argues that the hours claimed in the invoice for legal fees are inconsistent, calculated at different hourly rates, and lack particulars as to the work performed. While some of those observations may be correct, the fact is that the plaintiffs incurred those legal fees, and the majority of them were incurred as a result of the defendant advising the plaintiffs in advance of closing that she would likely not be in a position to close. This caused the plaintiffs’ lawyers to spend additional time trying to negotiate and salvage the transaction.
[51] Having reviewed the invoices for legal fees incurred, I award the plaintiffs their legal costs thrown away in the all-inclusive amount of $3,000.00.
[52] Accordingly, summary judgment is granted in favour of the plaintiffs against the defendant for the total sum of $250,442.08.
Costs
[53] I would urge the parties to exert the necessary efforts and try and resolve the costs of this motion (and presumably the action). If those efforts prove unsuccessful, they may serve and file written costs submissions, totaling no more than five pages including a Costs Outline, in accordance with the following schedule;
(a) the plaintiffs shall serve and file their written costs submissions within 10 business days of the release of this Endorsement; and
(b) the defendant shall serve and file her responding written costs submissions within 10 business days of the receipt of the plaintiffs’ written costs submissions.
Diamond J.
Released: March 18, 2021
COURT FILE NO.: CV-19-00625914-0000
DATE: 20210318
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
GEORGE LESLIE SCOTT and HARRIET BRAV-BAUM
Plaintiffs/Defendants by Counterclaim
– and –
SHOREH FORJANI a.k.a. SHOREN KONSTANTIN
Defendant/Plaintiff by Counterclaim
Defendant
ENDORSEMENT
Diamond J.
Released: March 18, 2021