NEWMARKET COURT FILE NO.: CV-17-132310-00

DATE: 20210322

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: DAVID FULLERTON, Plaintiff/Moving Party

AND:

ANGELA COMELLA, 2553284 ONTARIO INC. and YOUR COMMUNITY REALTY INC., Defendants/Respondents

BEFORE: THE HON. MADAM JUSTICE S.E. HEALEY

COUNSEL: Patrick Summers, for the Plaintiff/Moving Party

Christopher Papadopoulos for the Defendants/Respondents

HEARD: February 26, 2021

ENDORSEMENT

OVERVIEW

[1] The plaintiff, David Fullerton (“Fullerton”) seeks summary judgment against the defendant, Angela Comella (“Comella”), for payment of damages sustained as the result of a breach of an agreement of purchase and sale. He seeks damages in the amount of $331,984.02, plus a declaration that the deposit in the amount of $50,000 be forfeited to him.

[2] Fullerton argues that there are no genuine issues that require a trial to resolve, and that all issues in the main action can be disposed of by this motion.

[3] Comella asserts that there are several triable issues that cannot be resolved on a motion for summary judgment. The first is whether Fullerton made material omissions or misrepresentations in the sale agreement that render the agreement void. The second is whether Comella personally should be held liable for performance of the agreement, or whether liability should rest on the other defendant, 25553284 Ontario Inc. (“255”). Last, Comella argues that the plaintiff’s motion is a request for partial summary judgment, which will not dispose of all of the claims in the main action and third party claim.

ISSUES

[4] These are the issues that need to be addressed:

(1) Is Fullerton seeking partial summary judgment?

(2) If so, is partial summary judgment appropriate in the context of the litigation as a whole to resolve issues of liability? Two liability issues are raised: the enforceability of the agreement of purchase and sale, and Comella’s defence that she is not personally liable under the agreement of purchase and sale.

(3) Have the defendants raised a genuine issue requiring a trial to resolve these issues liability?

(4) Have the defendants raised a genuine issue requiring a trial to resolve damages?

(5) If the liability and damage issues can be decided on this motion, is this an appropriate case for a stay of execution pending determination of the defendants’ third party claim?

THE FACTS

The Property

[5] Fullerton owned property municipally known as 13 Parker Avenue in the Town of Richmond Hill (the “Property”). Fullerton lived in the residence on the Property, which was a bungalow estimated to be around 100 years old. He had owned the Property for about 30 years.

[6] Fullerton acknowledges that the value of the Property was not necessarily in the bungalow, but was in the land value to either a builder, developer or an end user who would tear down the residence to build a bigger house on the property. He also believed that the Property had value in remaining as is, as the existing bungalow was a source of rental income.

[7] The Humber River runs through the adjoining property to the immediate north of the Property for over 130 feet. It is undisputed that the property, and any new construction on the property, was subject to the control, restrictions and regulations of the Toronto and Region Conservation Authority (the “TRCA”). It is not disputed that these restrictions are significant, and require the homeowner to first obtain a TRCA permit prior to any work taking place on the property.

[8] It is undisputed that Fullerton was aware that the Property was located on a flood plain and subject to TRCA authority, including that there were some restrictions that the TRCA could impose on the construction of a new house.

Listing the Property for Sale

[9] In the spring of 2017, Fullerton decided to sell the Property and retained an agent by the name of Gary Hewitt (“Hewitt”). Hewitt was an agent working for the Defendant, Your Community Realty Inc. (“Community Realty”).

[10] When Fullerton and Hewitt initially met to discuss selling the Property, Fullerton raised the issue of potential redevelopment of the Property. He also told Hewitt that the Property was located within TRCA’s authority. As a result, Hewitt obtained information from the Town of Richmond Hill, which caused him to speak to the Toronto and Region Conservation Authority (the “TRCA”). Hewitt learned that the Property was subject to TRCA building approval and that any future development of the property was restricted or controlled by TRCA’s authority. He learned that final approval for any building had to come from the TRCA rather than the Town of Richmond Hill.

[11] On March 3, 2017 Fullerton and Hewitt on behalf of Community Realty signed a Listing Agreement Authority to Offer for Sale for the sale of the Property at a price of $999,000. The plan was to list the Property on the Multiple Listing Service (“MLS”) on March 21, 2017 and to “holdback” offers from potential buyers until March 30, 2017.

[12] Hewitt’s evidence is that in March 2017 the Property’s value was slightly over $1.1M based on comparable properties that he reviewed with Fullerton. However, they decided to deliberately list the price at less than market value to generate multiple offers at higher than asking price.

[13] On March 3, 2017, an MLS Data Information Form was signed by Fullerton, the contents of which were filled out by Hewitt and Fullerton together. Hewitt explained to Fullerton that whatever was contained in the MLS Data Information Form would be in the MLS Listing for the property that would be seen by other brokers and the public at large. Fullerton acknowledges having understood this, and acknowledges knowing that the contents of the MLS Data Information Form had to be accurate.

[14] Hewitt inserted the following clause in the MLS Data Information Form: “BUYER TO DO OWN DUE DILEGENCE WITH TOWN OF RICHMOND HILL AND/OR THE CONSERVATION AUTHORITY” (hereafter the “Conservation Provision”).

[15] Fullerton instructed Hewitt to include the Conservation Provision in the MLS listing. He was aware that he had a duty to alert a potential buyer who may have development plans that the Property was subject to TRCA and its regulations. He wanted a potential buyer to be advised that they had to do their own due diligence with the TRCA.

[16] Hewitt does not dispute that he was aware that he had an obligation to disclose any known material facts related to the Property, and agrees that he inserted the Conservation Provision in the MLS material because he had a duty to disclose what he had learned from the Town and the TRCA.

The Defendants

[17] Comella is the sole officer and director of 25553284 Ontario Inc. (“255”), which was incorporated in December 2016 for the purpose of holding title to investment properties. Comella is an individual with experience and sophistication in purchasing and investing in real estate, both on her own behalf and on behalf of various corporations. She has been involved in real estate investment for about 12 years.

[18] Philip Scolieri (“Scolieri”) is an agent working for Spectrum Realty Services Inc. (“Spectrum”) Scolieri is married to one of Comella’s friends, and she had just begun to work with him in about February 2017.

[19] According to Comella, Scolieri was fully aware that any property purchased by her for redevelopment was to be purchased by 255 and titled registered in the name of 255. He was also aware that any such property could not be subject to any regulations or restrictions that would hinder redevelopment, or increase it is costs.

Comella Sees the Property

[20] Comella learned that the Property was to be listed for sale when she drove by it on March 14, 2017 and saw a “Coming Soon” sign. At that time, she was interested in 255 purchasing a residential property for the purpose of redevelopment, including demolition of any existing building and subsequently selling a larger custom home. Comella lives in the area and when she became aware that the Property was to be listed for sale, she was aware of its proximity to the Humber River.

[21] Comella contacted Scolieri on March 14 after seeing the “Coming Soon” sign. Scolieri called her the next day to advise her that he had just finished speaking to the listing agent, Hewitt. Scolieri advised her that although the property would be listed on the MLS the next week, the owner would consider an offer of at least $1.1 million. He also told her that the Property satisfied all her requirements and was perfect for the purposes of tearing down the existing old bungalow and building a larger custom house to be resold for profit. He also told her it was important to make an offer as soon as possible, before the Property was listed on the MLS.

The Offers and Negotiations

[22] Based on that conversation and advice, Comella instructed Scolieri to prepare an offer. He reviewed it with Comella in person on March 16. In this first offer, and all subsequent offers, the buyer was described as “Angela Comella in Trust”. Comella questioned Scolieri about why 255 was not identified as the buyer. He responded by advising her that “in trust” meant that she was not buying the Property personally, but buying it under a company, and that using the identifier “Angela Comella in Trust” was the same thing as using 255 as the buyer. Scolieri acknowledges that he knew that Comella wanted to put properties in her company name.

[23] This first offer provided for a purchase price of $1,100,000, with a closing date of July 27, 2017 (“Offer #1). It was personally delivered to Hewitt by Scoleiri on the morning of March 17, 2017.

[24] It is undisputed that during that first in-person meeting, Hewitt told Scolieri what he had learned about the Property being subject to TRCA authority and development restrictions. Scolieri’s response was that both he and his client were aware of these facts; Comella, because she had purchased properties in the past and Scolieri because he had acted as agent for other properties in the same area. Hewitt ensured that he told Scolieri that it would be up to the purchaser, and Scolieri as her agent, to conduct their own due diligence.

[25] When Fullerton sat down with Hewitt to review Offer #1, he questioned Hewitt about the description of the purchaser. Hewitt explained that the offer was likely in trust for a company or somebody else other than Comella. At his examination for discovery, Fullerton confirmed that he understood that Comella was not signing in her personal capacity, but rather for a company or someone else. Hewitt’s evidence is that he was aware that the words “in trust” meant that Comella could nominate a third party, such as a company, to close the transaction, but that she would still ultimately be responsible for the agreement because she signed the offer. Hewitt’s evidence is that he and Scoleiri discussed this fact during their initial meeting.

[26] Fullerton was planning to leave for a pre-arranged vacation in Mexico on March 20, 2017. When he received Offer #1, he considered it to be already $100,000 above what he believed to be the fair market value for the Property. However, he decided to attempt to negotiate a higher deal, which he wanted to conclude before leaving for vacation.

[27] There were three subsequent offers exchanged between these parties on March 17, 2017. All offers used the same OREA Form, with amendments and revisions noted on the form.

[28] In response to Offer #1, Hewitt prepared a counteroffer (“Offer #2”) at a purchase price of $1,320,000. The following provision was inserted within Schedule A2: “BUYER ACKNOWLEDGES THAT THEY ARE RESPONSIBLE FOR THEIR OWN DUE DILIGENCE AND ARE BUYING THE PROPERTY WITH NO CONDITIONS” (the “Due Diligence Provision”).

[29] Hewitt reviewed the changes contained in Offer #2 with Scolieri, in person, when he delivered it to him.

[30] Fullerton’s evidence is that he instructed Hewitt to insert the Due Diligence Provision because Fullerton wanted to warn the potential buyer of the fact that the Property was subject to TRCA regulation or restriction.

[31] When asked why the Conservation Provision was not included in Offer #2, Fullerton had no explanation. When asked the same question, Hewitt’s explanation was that it was omitted because he had already fully discussed the topics of the TRCA and Town of Richmond Hill with Scolieri the previous day. When asked why it was then necessary to include the Due Diligence Provision at all, Hewitt said that it was because he wanted to have something in the offer that reflected the topics already discussed with Scolieri.

[32] Comella acknowledges that she read the Due Diligence Provision and was aware that she was buying the property without conditions. It is her evidence that Scolieri told her that the Due Diligence Provision pertained to the house on the Property. Since she was not interested in retaining the house, the clause did not concern her. Comella did not discuss the Due Diligence Provision with anyone other than Scolieri.

[33] When Scolieri brought Offer #2 back to discuss with Comella, he told there that the seller was very motivated and that he wanted to reach a deal before he went away on vacation. Scoleiri told her that he thought that the property was a “steal”. He also told her that she did not have time to go to a lawyer because Fullerton was going on vacation, and that if she delayed she would lose the deal.

[34] In response to Offer #2, Comella counter-offered at a price of $1,200,000, inserted a financing provision, and removed the Due Diligence Provision (“Offer #3”).

[35] In response to Offer #3, Fullerton counter-offered at a price of $1,175,000 and crossed out the financing provision. The price reduction was intended to be an incentive for Comella to accept an offer with no financing conditions. Hewitt reinserted the same Due Diligence Provision (“Offer #4”) and increased the deposit to $50,000.

[36] Offer #4 was accepted by Comella at approximately 5:00 p.m. on March 17, 2017, thereby resulting in the Agreement of Purchase and Sale (“APS”) that is the subject of this motion. The closing date in the APS remained July 27, 2017.

[37] There is no exclusion of liability of Comella in the APS, nor any mention of 255. Comella’s signature is affixed to page 5 of the APS as the “buyer” in three places, without any reference to the words “in trust” or her position as an officer of 255. There is also no mention in the APS of the property being purchased for redevelopment. Comella’s evidence is that she did not tell Scoleiri to put a clause in the APS that it was being purchased for that purpose, and Scolieri did not advise her that such provision could be inserted.

[38] The APS contains an “entire agreement” clause, expressly providing that “there is no representation, warranty, collateral agreement or conditions, which affects this Agreement other than as expressed herein”.

[39] Scolieri’s evidence is that he never told Comella about the TRCA restrictions before the APS was signed. At discovery he indicated that his reason for not doing so was that Comella had turned her mind to the ability to build on the Property.

[40] Comella says that as of March 17, 2017, neither she nor 255 were aware that the Property was subject to TRCA’s authority and related regulations and restrictions.

[41] Before executing the APS, Comella did not contact her lawyer to review it, inspect the property, seek out environmental or architectural advice, discuss the zoning with Scolieri, or the Town of Richmond Hill, consult with any professional with respect to what she could build on the Property, or speak to anyone other than Scolieri about whether she should buy the Property.

The MLS Listing

[42] Likely for promotional purposes of Community Realty and/or Hewitt, the Property was listed on the MLS on March 21, 2017. The Conservation Provision was included in the listing, although “Conservation Authority” was erroneously referred to as “Construction Authority”. After this deal fell apart, the Property was listed on MLS, with the Conservation Provision inserted. The client remarks in the listing included “either reno or rebuild your dream home or as an investment property”.

The Deal Unravels

[43] Sometime during the period of the end of May to late June 2017, Comella says that she came to discover that the property was subject to TRCA control and regulation after speaking with builders and representatives of the City of Richmond Hill and the TRCA. She also received a copy of the MLS Listing for the Property from a real estate agent other than Scolieri, which was when she first saw the Conservation Provision.

[44] After learning this information, Comella decided that 255 would not complete its purchase of the property, and informed both Scolieri and Hewitt.

[45] Fullerton’s real estate lawyer was Michelle Hubert. On June 8, 2017 Hubert wrote to Comella’s lawyer, Patrick Duco, introducing herself as acting for Fullerton. Requisitions to title were due by July 13, 2017; Hubert did not hear from Duco. On July 12, 2017 Hubert wrote to Duco advising that Fullerton needed to close the purchase of a new property on July 27, 2017 and needed the money from the sale of the Property to do so.

[46] On July 21, 2017, Hubert received her first letter from Duco, in which he advised that his client’s position was that Fullerton was in breach of the APS because of misrepresentations made regarding the Property. In her view, the misrepresentation was that she had not been told by Fullerton or Hewitt that the Property was in a floodplain and subject to the restrictions of the TRCA. His letter stated that the APS was “at an end” and that the deposit of $50,000 should be returned to Comella.

[47] The July 21, 2017 letter also informed Fullerton, for the first time, that Comella signed the APS in trust for 255.

[48] On July 21, 2017, Hubert advised Duco that she expected full compliance with the APS and that she would be ready to close on July 27, 2017. Mr. Papadopolous’ argument takes note of the fact that Hubert’s response did not deny that the APS had been signed by Comella in trust for her corporation. On that day, Hubert sent closing documents to Duco in preparation of the closing but received no response. She did not, as such, tender on Duco.

[49] Fullerton retain new counsel, Craig Losell, who, out of an abundance of caution, wrote to Duco to put Comella and Duco on notice that he was setting August 10, 2017 is the new date for completion of the APS, with time to be of the essence. On August 10, 2017, Losell received a letter from Duco which reiterated the position that Fullerton was in breach of the APS.

[50] Losell wrote back to Duco on the same day indicating that it was Fullerton’s position that as of July 21, 2017 Comella had repudiated the APS, and confirming that Fullerton accepted Comella’s repudiation and breach. That correspondence also stated that the $50,000 deposit was forfeited to Fullerton, and that Fullerton would sue Comella for his additional damages, interest and costs.

The Pleadings

[51] The main action is a straightforward claim by Fullerton for damages arising from Comella and/or 255’s breach of the APS, return of the deposit, and costs. Community Realty is a defendant only because it holds the deposit.

[52] The counterclaim by Comella and 255 seeks a declaration that the APS is void and of no effect, return of the deposit, and damages for fraudulent or negligent misrepresentation and loss of opportunity or profit. Those defendants crossclaim against Community Realty for damages on the same basis, return of the deposit and contribution and indemnity for any amounts found to be owing to plaintiff. The primary basis for the counterclaim and crossclaim is the failure to insert the Conservation Provision in the APS, or words that included the Conservation Authority in the Due Diligence Provision.

[53] Front and centre in each of the pleadings in the main action is whether Comella is a proper party to the proceeding, or whether she signed the APS as an agent or in trust for 255.

[54] In their crossclaim against Community Realty, Comella and 255 seeks contribution and indemnity with respect to any judgment granted in favour of Fullerton against either or both of them. Comella has not cross-claimed against 255, in the event that she and 255 are found to be jointly and severally liable.

[55] In their third party claim, Comella and 255 allege that Fullerton, Hewitt, Community Realty and another agent working for Community Realty named King all deliberately concealed what are collectively called the “undisclosed material facts” about the Property and TSCA’s authority over it. They did so in order to artificially increase the fair market value of the property and to secure a quick sale. These are the same primary allegations that form the basis of the counterclaim and crossclaim.

[56] In their third party claim, Comella and 255 also seek damages against Scolieri and Spectrum in the amount of $500,000, resulting from their fraudulent and/or negligent misrepresentations. She further alleges that Scolieri and Spectrum agreed and conspired with Hewitt and Community Realty to conceal the material facts from these defendants.

[57] The third party claim raises the issue of Comella’s personal exposure, but in a different way. She and 255 plead that Scolieri and Spectrum owed her a fiduciary and contractual duty to name 255 as the buyer in the APS, and to ensure that Comella not have any exposure in her personal capacity given their knowledge that she never intended to purchase or hold title in her personal capacity.

[58] There is also a third-party claim made by Fullerton against Hewitt and Community Realty seeking damages in the amount of $750,000 and full indemnification for any damages awarded to Comella and 255 in their counterclaim against Fullerton.

The Record

[59] The record in this case consists of affidavits from Comella and Fullerton, affidavits of valuation experts, transcripts of examinations for discovery of all parties, facta and authorities.

[60] While the lawyers for all agents were present for the motion, they were observing and took no position.

THE LAW

Summary Judgment

[61] With respect to when summary judgment can be granted, Karakatsanis, J., writing for the Court in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 (S.C.C.), stated, at para. 49:

There will be no genuine issue requiring trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process 1) allows the judge to make the necessary findings of fact, 2) allows the judge to apply the law to the facts, and 3) is a proportionate, more expeditious and less expensive means to achieve a just result.

[62] At para. 50, the Court defined the overarching issue to be “whether summary judgment will provide a fair and just adjudication.” Karakatsanis, J. went on to say that “the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.”

[63] In terms of the approach to a motion for summary judgment, Hryniak directs at para. 66 that the judge should first determine if there is a genuine issue requiring a trial based only on the evidence before her, without using the new fact-finding powers. If there appears to be a genuine issue requiring a trial, she should then decide if the need for a trial can be avoided by using the new powers under rules 20.04(2.1) and (2.2). These powers may be used by the motion judge in her discretion provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.

[64] The court must take a hard look at the evidence on a motion for summary judgment to determine whether there is a genuine issue for trial, and may freely canvass the facts and law in doing so. The moving party bears the onus of establishing that there is no triable issue; however, the responding party on a motion for summary judgment must “lead trump or risk losing”: 1061590 Ontario Ltd. v. Ontario Jockey Club, 1995 1686 (ON CA), 1995 CarswellOnt 63 (Ont. C.A.), at para. 36. The responding party is not entitled to rely on the prospect of additional evidence that may be tendered at trial: Chernet v. RBC General Insurance Co., 2017 ONCA 337 (Ont. C.A.) at para. 12; Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 (Ont. S.C.J.), at para. 26, aff’d 2014 ONCA 878 (Ont. C.A.), leave to appeal to SCC refused, [2015] SCCA No. 97 (S.C.C.). This means that although the onus is on the moving party to establish the absence of a genuine issue requiring a trial, there is an evidentiary burden on the responding party, who may not rest on the allegations or denials in the party’s pleadings, but must present by way of affidavit, or other evidence, specific facts showing that there is a genuine issue for trial: Cuthbert v. TD Canada Trust, 2010 ONSC 830 (Ont. S.C.J.), at para. 12; Sanzone v. Schechter, 2016 ONCA 566 (Ont. C.A.), at para. 30. As stated in Dawson v. Rexcraft Storage and Warehouse Inc. (1998), 11 O.A.C. 201 (Ont. C.A.), at para. 17, “[t]he motions judge is entitled to assume that the record contains all the evidence which the parties will present if there is a trial.” These principles were more recently affirmed once again in Broadgrain Commodities Inc. v. Continental Casualty Company (CNA Canada), 2018 ONCA 438 (Ont. C.A.), at para.7.

Partial Summary Judgment

[65] Justice Karakastanis gave this guidance on partial summary judgment in Hryniak, at para. 60:

The "interest of justice" inquiry goes further, and also considers the consequences of the motion in the context of the litigation as a whole. For example, if some of the claims against some of the parties will proceed to trial in any event, it may not be in the interest of justice to use the new fact-finding powers to grant summary judgment against a single defendant. Such partial summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice. On the other hand, the resolution of an important claim against a key party could significantly advance access to justice, and be the most proportionate, timely and cost effective approach.

[66] When asked to grant partial summary judgment, the motion judge must consider:

(i) the risk of duplicative or inconsistent findings at the trial of the counterclaim and third party claim. This includes a consideration of whether there are issues of credibility that are also raised by the counterclaim or third party claim: Vandenberg v. Wilken, 2019 ONCA 262, at para. 11 and 13; Butera v. Chown, Cairns LLP, 2017 ONCA 783 (Ont. C.A.), at para. 29;

(ii) that where there is a real possibility of inconsistent findings, partial summary judgment is to be avoided: Butera, at para. 29; Vandenberg, at para. 11.

(iii) whether the issue or issues may be readily bifurcated: Butera, at para. 34;

(iv) the context of the litigation as a whole, to decide whether granting partial summary judgment will result in disposing of issues in a proportionate, expeditious and cost-effective manner: Vandenberg, at para. 15; Butera, at para. 28; Mason v. Perras Mongenais, 2018 ONCA 978, at para. 22.

(v) that partial summary judgment should be rarely granted and only in the clearest cases, and only if doing so does not give rise to any of the associated risks – delay, expense, inefficiency and inconsistent findings: Butera, at para. 34; Corchis v. KPMG Peat Marwick Thorne, 2002 41811 (ON CA), [2002] O.J. No. 1437 (Ont. C.A.), at para. 3.

ANALYSIS

Partial Summary Judgment

[67] Mr. Summers disputes that this is a motion for partial summary judgment. He argues that if successful this motion will end the plaintiff’s claim and the counterclaim.

[68] Mr. Papadopoulos submits that it would only dispose of the claim against Comella, and leads to a risk of inconsistent findings in the disposition of the crossclaim and third party claims.

[69] In Spiridakis v Li, 2020 ONSC 2173, at para. 69, after noting that r. 20.01 expressly permits a plaintiff to move for partial summary judgment, Boswell, J. concisely stated what constitutes partial summary judgment:

Partial summary judgment may, as the rule suggests, involve some, but not all, of a plaintiff’s claims. It may also involve the resolution of all of the claims of some parties, but not others. In cases like the present one, where there is a third-party claim, a judgment that resolves the entirety of the main action but none of the third party action still results in partial summary judgment.

[70] I conclude that this is a motion for partial summary judgment, as it will leave unresolved the cross-claim against Community Realty and the third-party claims against Hewitt, Scolieri and Spectrum (I leave King out as neither his name nor evidence concerning him were mentioned during the motion).

[71] Having decided this issue, I will deal with the issue of whether it is appropriate to grant partial summary judgment on the issue of the enforceability of the APS.

Enforceability of the APS

[72] The lack of reference to the Conservation Authority in Fullerton’s counter-offer and the APS is at the core of all of Comella and 255’s claims, even her claims against the agents.

[73] While this case has many non-contentious facts, I have reached the conclusion that there remains a possibility of inconsistent findings on the issue of liability.

[74] On this motion, the court must decide whether there is a genuine issue requiring a trial with respect to whether the absence of reference to the Conservation Authority in the APS gives rise to a misrepresentation or omission that voids the APS. The evidence is that both Fullerton and Hewitt worked on the wording of the Due Diligence Provision together. In the cross-claim and third party claim, it will have to be determined whether liability attaches to Hewitt and Community Realty for the same conduct. I may, for example, find there was no deliberate attempt by Fullerton to conceal the TRCA restrictions; another judge may find otherwise when it comes to Hewitt and Community Realty.

[75] As another example, I may find that the Due Diligence provision is sufficient to exonerate Fullerton from his alleged negligence; another judge may find that the lack of reference to the Conservation Authority constitutes a negligent or fraudulent misrepresentation on the part of Hewitt and Community Realty. Given the evidence that Fullerton, Hewitt and Community Realty were at all times acting in concert and consultation with one another, and had the same knowledge, these would be inconsistent determinations.

[76] This risk prevents partial summary judgment from being granted on this issue.

Liability of Comella

[77] I turn now to whether it is in the interests of justice, taking into account the entire context of the litigation, to decide Comella’s defence that she is not personally liability under the APS. At least half of the time during this motion was spent arguing this issue.

[78] In Hyrniak, at para. 60, Karakatsanis J. noted that the “resolution of an important claim against a key party could significantly advance access to justice and be the most proportionate, timely and cost effective approach.” Similarly, resolution of a central defence could have these same benefits.

[79] I conclude that it will save time and additional expense at trial to have this issue disposed of in advance, if appropriate. To do so advances the interests of affordability and proportionality given the amount in dispute.

[80] Taxing judicial resources is another concern with motions for partial summary judgment. But where the motion has been argued, and a lengthy record analyzed and digested by the motion judge, it increases efficiency to dispose of any issue that can appropriately be decided, having regard to the cautions from the Court of Appeal.

[81] The personal liability of Comella is an issue that can be neatly severed from the remaining issues in the litigation. Deciding the issue does not affect or influence the other liability issues raised in the main action or third party claims. Deciding this issue does not in any way predetermine whether Fullerton’s claim will be successful, but only, if liability is found, which of Comella or 255 is to be held accountable.

[82] Deciding the issue does not raise the risk of inconsistent findings at trial. In deciding whether Comella and 255 should be indemnified via their the cross-claim against Community Realty, it is not necessary for a judge to determine which one of them should receive judgment. Both have requested that relief. There is no cross-claim, one against the other.

[83] Deciding the issue does not raise the risk of an inconsistent result in the third party claim. Although Hewitt is named, again, it is only for the purpose of contribution and indemnity. Otherwise, the issue of Comella’s personal liability only arises in the third party claim in the context of allegations of negligence on the part of Scolieri and Spectrum Realty for exposing Comella to personal liability. This is a different legal issue from any raised in the main action.

[84] Importantly, there are no facts in dispute or credibility findings to be made.

[85] Applying the test set out in Hryniak, I find that I am able to reach a fair and just determination on the merits of this defence without a trial. There is a complete documentary record. There are no factual disputes or credibility issues raised by the record. Fact-finding is not hindered in any way. The available evidence can be readily applied to the applicable law.

[86] To summarize, the evidence shows that all relevant parties turned their mind to the inclusion of the words “in trust” in the description of the buyer when Offer #1 was prepared and presented. Fullerton and Hewitt were aware that it signaled that Comella might intend that someone other than herself, including a corporation, would be placed on title at the time of the purchase. While both Fullerton and Hewitt acknowledge knowing that Comella was not signing in her personal capacity, Hewitt was of the view - and told Scolieri - that as the signatory she would remain personally responsible for the APS. Scolieri knew that Comella wanted to put properties in her company name.

[87] Comella, on the advice of Scolieri, believed that the words “in trust” had the same effect as inserting 255 as the buyer. The corporation is not referenced in the APS. Where Comella’s signature was placed on the document on March 16 and March 17, there is no reference to Comella signing as an officer of 255, and otherwise no qualification to exclude personal liability.

[88] Some additional facts are now warranted. The deposit provided under the APS was provided by Comella. Her evidence is that 255 had not yet set up a bank account and she has maintained refusals to provide any information about whether 255 was the source of the funds. Comella claims return of the deposit but has not provided an answer as to whether that relief is being claimed by 255 or her personally. An answer has not been provided about whether there is a trust agreement between Comella and 255, or whether resolutions authorizing the purchase of the Property exist. Access to the minute books of 255 has not been allowed.

[89] Mr. Summers argues that the law is on his client’s side, as Ontario courts have long found that the simple addition of the words “in trust” to an individual’s name does not shield the individual from liability. He relies on Shuper v. Noble, 1982 CarswellOnt 1453; Marathon Realty Co. v. Ginsberg, 1981 CarswellOnt 510, affirmed on other grounds, 1982 CarswellOnt 644 (ON CA); leave to appeal refused [1982] S.C.C.A. No. 232; Okinczyc v. Tessier, 1979 CarswellOnt 646; and MacKenzie Trust Co. v. Yateman, 1995 CarswellOnt 294.

[90] Both counsel agree that the cases presented by the plaintiff are authority for the following:

(i) the inclusion, or mere use of the words “in Trust” does not, by itself, exculpate a purchaser or protect an individual from personal liability in all cases;

(ii) the vendor is entitled to look to the person with whom they contracted to carry out the obligations under the contract; and

(iii) the words “in Trust” are not “magic words” that change the liability of the purchaser unless in fact there is a cestui que trust or the purchaser is acting as an agent for some other person.

[91] I agree with counsel that this summarizes the ratio decidendi of the plaintiff’s cases. But I would add that Shuper and Okinczyc are also authority for the proposition that the purchaser’s subjective intention to purchase as agent or for a cestui que trust is irrelevant. Both cases held that for a person to shift personal liability to a company, it must be shown that the corporation authorized such action. If there are no resolutions or bylaws showing that the company gave its authority, or other clear evidence of the company acting independently of its owner, then it must be presumed that no authority was given: Okinczyc, paras. 17-19; Shuper, paras. 26-28 and 31.

[92] Additionally, the liability of the person signing the APS is determined by the construction of the contract, based on the terms of the contract, its nature, and the surrounding circumstances: Marathon, para. 19; Shuper, para. 10.

[93] Mr. Papadopoulos argues that Comella is not relying simply on the fact that the words “in trust” are found beside her name as “buyer” under the APS. He submits that it is the fact that Fullerton knew that Comella was not signing in her personal capacity that distinguishes this case from the authorities relied on by the plaintiff. Furthermore, Duco’s correspondence sent to Hubert prior to the closing date confirmed that 255 was the beneficiary of the trust, which was never denied in the responding correspondence sent by Hubert.

[94] Mr. Papadopoulos relies on the Ontario Court of Appeal’s decision, Bertoia v. McKenzie Investments & Leasehold Ltd. (In Trust), 2010 ONCA 664, in which it was held that judgment could not be obtained against the party who signed an agreement of purchase and sale in which the words “in trust” were used.

[95] Mr. Papadopoulos provided the appellant’s factum filed with the Court of Appeal in Bertoia, from which a more fulsome understanding of the facts of that case may be obtained. Those facts are that the defendant J. Glos Architect Inc. (“Glos”) entered into an agreement of purchase and sale with Bertoia to purchase vacant land. The Purchaser of the land was described in the agreement as “J. Glos Architect Inc., In Trust”. Glos failed to close the transaction and Bertoia sued. Prior to the commencement of the action, counsel for Glos advised counsel for Bertoia that the beneficiary of the trust was McKenzie Investments and Leasehold Ltd. (“McKenzie”). The action was brought against both Glos and McKenzie.

[96] During the litigation, even though no written trust document existed, there was no dispute between the parties that a trust existed between Glos and McKenzie. The existence of the trust had been conceded in the pleadings.

[97] The trial judge pronounced judgment in favour of Bertoia against McKenzie only. The trial judge found no liability against Glos because he found that that corporation was merely acting as trustee for McKenzie. At the close of evidence Bertoia sought an amendment to the title of proceedings to substitute the words “in trust for” and replace them with the word “and” in order to have an enforceable judgment against both corporate defendants. The motion was denied.

[98] On appeal, Bertoia argued that the trial judge was wrong to hold only McKenzie liable for the damages, and that he erred in denying the end-of-trial motion to amend the claim. Bertoia sought an order holding Glos and McKenzie jointly and severally liable for payment of damages and costs.

[99] The Court of Appeal disagreed, finding that: 1) the question of Glos’ status as a trustee was not a live issue at trial; 2) Glos’ status as a trustee had been pled and admitted; and 3) on the basis of the pleadings there had been no need to lead evidence proving the existence of a trust: para. 6.

[100] While para 6 of Bertoia appears to dispose of the appeal, at para. 7 the court stated:

While we accept that there is no “legal magic” to the insertion of the words “In Trust” in a commercial document, this case is unlike those relied on by the appellants in that the Glos company signed the agreement of purchase and sale with an explicit qualification of its status. Moreover, a beneficiary of the trust existed, the identity of which was disclosed to the appellants in advance of the litigation. These facts distinguish this case from the authorities cited by the appellants.

[101] Two of the cases relied on by Fullerton, Marathon Realty and Shuper, were relied on by the appellant in Bertoia to argue that the inclusion of the words “in trust” did not exculpate Glos from liability.

[102] If paragraph 7 of Bertoia is not obiter, I am unable to determine what the court was referring to by its statement “the Glos company signed the agreement of purchase and sale with an explicit qualification of its status”. There must have been some limitation in the agreement other than the words “in trust” that is not apparent from the decision. But I do not take the court to mean that revealing the identity of the trust’s beneficiary prior to litigation is enough to avoid liability. That statement must be read in the context of a case in which there was no dispute that a trust existed.

[103] What distinguishes the case before me from Bertoia are the pleadings. Evidence of existence of a trust between Comella and 255 is absent, as is evidence that 255 was the principal authorizing the transaction. The pleadings put this squarely in issue. If Comella and 255 have such proof, this motion for summary judgment was the time to bring that evidence forward. It was requested at discovery, and not provided. A court is entitled to assume that the record contains all the evidence that the parties would present if the matter proceeded to trial: Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 (ONSC) at paras. 26-27; aff'd 2014 ONCA 878 (Ont. C.A.). Accordingly, I find that there is no proof of a cestui que trust or proof that 255 authorized the transaction as principal.

[104] Just because Comella named 255 as being the principal for whom she was acting before the litigation began does not make it so. Accordingly, it is irrelevant that Fullerton’s real estate lawyer did not refute the claim when it was first advanced.

[105] Fullerton and Hewitt’s admission that they knew Comella was not signing in her personal capacity is also not relevant. Comella signed the contract with no limitation on her liability other than the words “in Trust” and has failed to prove a basis for holding the corporate entity 255 liable for the contract. In such a case is the court to hold no person liable for the purchaser’s obligations under the agreement? I think not.

[106] The requirement that a purchaser who seeks to avoid personal liability must show that they are acting under authority of the principal, or prove the existence of a trust, is sound policy. Consider the common situation where two spouses or business associates own a corporation. One spouse or associate signs an agreement, using the words “in trust” but otherwise not identifying the beneficiary or principal. Prior to the closing the spouses’ or business associates’ relationship sours, and the signatory then identifies the corporation in order to shift or share responsibility. If all that it takes is the pointing of a finger at the corporation to transfer liability, how is the corporation to defend itself other than by showing no corporate resolution or trust agreement?

[107] The uncontroverted facts applied to the law compel the outcome: Comella is personally liable under the APS if the APS is found to be enforceable. There is no genuine issue requiring a trial. Considering the litigation as a whole, I have decided that this is one of those rare cases in which granting partial summary judgment will result in disposing of this issue in a proportionate, expeditious and costs-effective manner.

[108] This is meant to be a final order, binding on the parties at trial.

[109] This order is in no way determinative of the primary liability issue in this litigation, which is whether the APS will be enforced.

Damages

[110] In the event that liability is determined in favour of Fullerton, his damages are easily quantifiable. He seeks damages in the amount of the difference between the sale price in the APS and the eventual sale price to a third party, less the deposit. He also seeks carrying costs of the Property following July 27, 2017, and the cost of bridge financing that was required in order to close the deal of his new home.

[111] The evidentiary record is complete; it allows Fullerton’s damages to be determined.

[112] Although Comella has pled that Fullerton failed to mitigate his losses, she has not provided any evidence to establish that there is a genuine issue requiring a trial on the issue of damages.

[113] Comella and 255 have obtained the expert opinion of D. Botero & Associates that the market value of Parker “as improved” and its site component “as if vacant and available for development” as of the date of the APS was $980,000 and $925,000, respectively. However, this evidence is proffered to support Comella’s position that Fullerton and the agents involved kept her in the dark about the TRCA restrictions in order to artificially inflate the sale price. It is evidence that goes to liability, not damages.

[114] Again, this is a discrete issue that will save time at trial if it is determined now. Having regard to the litigation as a whole, it serves the interests of justice to quantify Fullerton’s damages on this motion, for the same reasons that it made sense to determine the discrete issue of Comella’s liability. A trial is not required to fairly decide this issue.

[115] In reliance upon the closing of the Property taking place on July 27, 2017, Fullerton had entered into an agreement to purchase property in Penetanguishene, Ontario. He anticipated that he could use the proceeds from the sale of the Property to purchase the Penetanguishene property without any financing being required. Fullerton closed the purchase of the Penetanguishene property on July 27, 2017, but in order to do so he had to take out a bridge loan in the amount of $540,000, secured by a mortgage on both properties.

[116] On August 14, 2017, Fullerton relisted the Property with Hewitt and community Realty. There had been a slump in house purchase prices in the area of the property between the spring and fall of 2017. The best offer received was for $835,000. Fullerton accepted and the sale closed on December 19, 2017.

[117] Fullerton calculates his damages as follows, including carrying costs from July 27 to December 14, 2017:

(a) loss of bargain in the amount of $340,000 ($1,175,000 less $835,000);

(b) the amount paid to Hillmount Capital for the carrying costs of the mortgages and legal fees to register the mortgages in the amount of $41,795;

(c) property taxes in the amount of $1,867.53;

(d) fees paid to Fullerton’s lawyer to close the resale of the property in the amount of $1,186.50;

(e) natural gas charges in the amount of $224.32;

(f) house insurance costs in the amount of $538.92;

(g) hydro charges in the amount of $749.95; and

(g) water utility charges in the amount of $384.63.

[118] Offset against these amounts is rental income earned from the Property and a solar panel contract for the period following July 27, 2017, totaling $4,762.83. Calculating all of the above, his damages are $381,984.02 plus prejudgment interest.

[119] This calculation will have to be reduced by $50,000 if it is determined that Fullerton is to receive the deposit held by Community Realty.

CONCLUSION

[120] This court orders:

1. If the agreement of purchase and sale is determined at trial to be enforceable, the defendant Angela Comella shall be personally liable.

2. If the agreement of purchase and sale is determined at trial to be enforceable, Fullerton’s damages are calculated at $381,984.02.

3. The above two orders bind the parties at trial.

4. The balance of the motion is dismissed.

[121] If the parties are unable to reach an agreement on the costs of this hearing, they may proceed by written submission limited to 5 pages, exclusive of Cost Outlines and Offers to Settle. Fullerton’s are due by April 2, 2021, Comella’s by April 9, 2021, and reply, if necessary, by April 14, 2021.

HEALEY J.

Date: March 22, 2021