COURT FILE NO: CV-17-2661-00

DATE: 2021 04 16

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

HEATHER DOWNEY and FRANCESCO MARCHESE

Domenic Saverino, for the Plaintiffs

Plaintiffs

• and -

DOUGLAS ALEXANDER AREY

Jonathan H. Marler, for the Defendant

Defendant

HEARD: 30 November, and 1, 2, and 3 December, 2020

REASONS FOR JUDGEMENT

Trimble J.

INTRODUCTION

[1] This action arises from the failure of an agreement between a father, Mr. Arey, and his daughter (Ms. Downey) and her partner (Mr. Marchese) to transfer the family home at 2860 Remea Court, Mississauga, from Mr. Arey to them. More accurately, the action arises from the fact that there was only an oral agreement, to transfer the house. No written agreement was entered into although all the parties had experience in the purchase, sale and mortgaging of houses, and understood that written agreements clearly defined the rights, obligations and expectations of all the parties.

[2] To complicate matters, the parties agreed orally to extend the original closing date, although each side had a different version of the revised closing date.

[3] Absent a written agreement, the parties’ expectations about the transfer went unexpressed, terms about the agreement were uncertain, and assumptions made by each were unshared.

THE ACTION

[4] The plaintiffs, Ms. Downey and Mr. Marchese, along with their blended family of two teenaged children each, cohabit at 2860 Remea Court, Mississauga. Mr. Arey, Ms. Downey’s widowed father, is the registered owner of that property, although he lives elsewhere with his partner.

[5] The parties agree that the couple had an oral agreement whereby the couple would purchase the house from Mr. Arey. The deal was to close on 31 August 2016. The couple says that they and Mr. Arey orally agreed to extend the closing to 31 May 2017 under certain terms. Mr. Arey says that he never agreed to extend the agreement to 31 May 2017.

[6] In April 2017, Mr. Arey refused to close the sale. He demanded more money. When that demand was not met, he demanded that the couple and their children vacate the home so he could sell it on the open market.

[7] The couple sued for specific performance or alternately for damages for breach of contract, punitive and exemplary damages of $100,000.00, special damages of approximately $166,000.00 comprising the amount they spent to renovate the home and Mr. Marchese’s lost profit and opportunities in his business which he suffered when he, as a contractor, did the renovations to the house.

[8] Mr. Arey counterclaimed for rent in an amount to be set by the Court from May 2017 (when he demanded that the couple vacate the home) to judgment date, less any amounts the couple paid to date.

POSITIONS OF THE PARTIES

[9] The parties agree that in the spring 2016, they entered into an oral agreement whereby Mr. Arey would sell Remea Court to Ms. Downey and Mr. Marchese for the sum of $850,000.00. The transfer was to close on 31 August 2016.

[10] The parties also agree that shortly before the closing date in August 2016 they entered into an oral agreement to extend the closing date. That is where their agreement as to the terms of their oral contracts end.

1. Ms. Downey and Mr. Marchese

[11] Ms. Downey and Mr. Marchese say that they had an oral agreement with Mr. Arey whereby which they would live in the house, renovate it, and then purchase it for the fair market value price of $850,000.00, with the deal closing on 31 August 2016. Part of the agreement was that Mr. Arey, just before closing, would apply a “family discount” of $100,000.00. They plead that this was a gift, applied as a pre-closing reduction in the price. The couple was to pay for the utilities until closing while Mr. Arey was to pay the insurance, taxes and mortgage. On the strength of the agreement, the plaintiffs began significant renovations, some structural, which ultimately would cost them almost $167,000.47.

[12] The couple says that the parties orally amended their oral agreement shortly before the 31 August 2016 closing date, which did two things. First, it extended the closing to 31 May 2017. Second, the couple began paying Mr. Arey $1,800.00 per month to cover the insurance, taxes and mortgage. They called this payment “rent”, for want of a better word. Those payments would be accounted for against the final price at closing.

[13] Ms. Downey moved into the house in August 2015. She was coming out of a nasty divorce. Her then matrimonial home had to be sold as part of the divorce. After the divorce was completed, Ms. Downey did not have enough money for a down payment on another house. Mr. Arey suggested that she and her children move into Remea Court and live rent free, paying only the utilities. He would move into his partner’s condo.

[14] Ms. Downey was thrilled to move back into her own home. The house meant a great deal to her. It was full of memories. Ms. Downey was raised in the house. She launched her independence from it. She nursed her dying mother in it. Her mother died there.

[15] Remea Court was an older home. It needed work. It was, however, in a safe neighbourhood where the Downey and Marchese children could walk to school. The schools in the area were good. Some of the neighbours were those Ms. Downey knew when she lived there. The property is large and has a wonderful backyard.

[16] After her divorce, Ms. Downey met Mr. Marchese. He too was going through a divorce. In early 2016, the two decided to move in together. They approached Mr. Arey with the ideal of buying Remea Court. They entered into the oral agreement, as they understood it to be. Mr. Arey agreed that Mr. Marchese and Ms. Downey could commence renovations on the home immediately.

[17] For reasons related to Mr. Marchese’s family, Mr. Arey and the Plaintiffs agreed to postpone the sale until 31 May 2017. In exchange, the Plaintiffs paid Mr. Arey $1,800.00 per month to reimburse him for the insurance, property tax, and mortgage. These payments were to be deducted from the purchase price.

[18] In March, Mr. Arey, without notice, demanded $1.25 million for the house, and by April, said that he was going to sell the house. By this conduct, he breached the agreement to sell and the extension.

[19] The couple says that the house is unique and that damages are insufficient. Specific performance is necessary.

2. Mr. Arey

[20] Mr. Arey was born in 1941. He was a teacher. He and his late wife bought Remea Court in May 1978 and moved into the house in December 1978. His late wife died in the home in 2004 after a long illness.

[21] From 2004 to 2007, Mr. Arey lived alone in the home. Eventually, he met his partner, June, who moved into the house with him. By 2015, June found the house to be too much work. It was time to downsize. She purchased a condo that the two moved into, leaving much of Mr. Arey’s furniture and chattels stored in the home. It was June who suggested that Mr. Arey let Ms. Downey and her children live in the house.

[22] Mr. Arey too says that he reached an oral agreement with Ms. Downey and Mr. Marchese to sell them his house. He spoke to a neighbour, a real estate agent, who told him that the fair market value of the house was $950,000.00. He agreed to sell it to the couple for $850,000.00. This reflected a $100,000 reduction in price. He intended to give his sone $100,000 from the proceeds of the sale to h help his son. The sale was to close on 31 August 2016. Mr. Marchese moved in to Remea Court with his two children after the agreement with Mr. Arey was in place, and with Mr. Arey’s knowledge and agreement, began renovations on the house.

[23] Mr. Arey denies that he agreed to reduce the price by $100,000.00 at closing, having already done so to reach the agreed price of $850,000.

[24] Mr. Arey says that he never breached the agreement to sell to the Plaintiffs. It expired 31 August 2016 when the couple failed to close. In August 2016, shortly before the agreed upon closing date, the couple asked to extend the closing to 31 May 2017. The extension was necessary because Mr. Marchese’s mother and sister were having problems with their mortgage which Mr. Arey did not fully understand. He understood that Mr. Marchese needed his equity in his own house to assist is mother and sister. Mr. Arey said that he neither agreed nor disagreed to the May 2017 date. He decided to give them more time, although no final date was set.

[25] By March, Mr. Arey was tired of waiting. The market was rising. He was financing Mr. Marchese’s resolution of his mother and sister’s real estate problem by the market loss he was taking. Accordingly, he told the couple that he now wanted $1.25 million for Remea Court, thinking that his demand would start another round of negotiations given the increase in market prices. The Plaintiffs never counter offered. Mr. Marchese said he would pay $100,000.00 immediately, with another $100,000.00 shortly thereafter, to be applied against the $850,000.00 purchase price. Mr. Marchese never presented the money.

[26] In April 2017, Mr. Arey told the couple that they had to get out of the house by July as he was going to sell it. Their response was a lawsuit.

[27] Mr. Arey concedes that he owes the Plaintiffs compensation for the work that they did on the house. He says, however, that their calculation of their damages is excessive. It should be between $110,000.00 and $130,000.00 (assuming a contractor did the work) or $91,000.00 (assuming Mr. Marchese did the work).

ISSUES

[28] This case gives rise to four issues:

1. Was there an oral agreement between the parties to transfer the home from Mr. Arey to the Plaintiffs, and if so, what were its terms?

2. If there was an agreement to transfer the home from Mr. Arey to the Plaintiffs, was there an agreement to extend the closing from 31 August 2016 to 31 May 2017, and what were its terms?

3. Assuming that there was an agreement to transfer and an agreement to extend the closing, is Specific Performance available?

4. If Specific Performance is not available in this case, what are the Plaintiffs’ damages?

[29] There is also an issue arising from the fact that the transfer of land is not evidenced in writing as required by the Statute of Frauds R.S.O. 1990, c. S.19, s. 1. The parties agree, however, that the renovations that Ms. Downey and Mr. Marchese performed constituted part performance of the contract. Therefore, equity relieves against the failure to comply with the Statute of Frauds (see: Erie Sand & Gravel v. Seres’ Farms Ltd., 2009 ONCA 709 (C.A.), at para. 70).

RESULT

[30] The parties all considered that they had an agreement to transfer Remea Court that was to close 31 August 2016.

[31] I find, however, that there was no such agreement. If there was, I find that there was no agreement to extend the closing from 31 August 2016 to 31 May 2017. Accordingly, the Plaintiffs’ claim for specific performance and, alternately, for damages for breach of contract are dismissed.

[32] I find that the Plaintiffs shall have judgment for $178,860.70 on the basis that the Defendant was unjustly enriched.

ONUS AND STANDARD OR PROOF

[33] The Plaintiffs have the onus or burden of proof, and the standard is the balance of probabilities.

CREDIBILITY

[34] This case turns on the evidence of the parties, there being a paucity of documents or reliable neutral witness testimony upon which I can rely in determining the existence and nature of the contract or contracts at issue.

1. The Law on Credibility

[35] An assessment of any witness' credibility involves an assessment of a) the witness' honesty (his belief in the truth of what he is saying), and b) the reliability of the witness' evidence (his ability to remember and testify accurately).

[36] In addressing the credibility of each of the witnesses, I have directed myself to the following considerations:

a) What is the witness’ demeanour while giving evidence? While how a witness gives evidence is relevant, findings of credibility should not be made on the witness's demeanour alone. There may be cultural, social, ethnic, or other reasons why a specific witness may have difficulty testifying. There are too many factors that affect a witness' ability to testify comfortably to make demeanour the sole or most important factor in determining credibility.

b) Does the evidence make sense in light of the preponderance of probabilities which a practical and informed person would find reasonable given the particular place and condition? Faryna v. Chorny, 1951 CanLII 252 (BC CA), [1952] 2 D.L.R. 354 (C.A.), at para. 11.

c) Does the evidence have an internal consistency and logical flow? R. v. C.H., (1999) 1999 CanLII 18939 (NL CA), 182 Nfld. & P.E.I.R. 32 (C.A.).

d) Is the evidence consistent with the witness' other statements? How significant are the differences and are they adequately explained?: R. v. Dinardo, 2008 SCC 24, [2008] 1 S.C.R. 788.

e) Is there independent confirming or contradicting evidence?: R. v. Khan, 1990 CanLII 77 (SCC), [1990] 2 S.C.R. 531.

f) Does the witness have a motivation to lie or exaggerate? The witness' motivation to lie must be greater than his or her interest to win or lose the case: R. v. S.D., 2007 ONCA 243, 218 C.C.C. (3d) 323.

[37] In cases that are based solely or principally on the oral evidence of the parties, F.H. McDougall, 2008 SCC 53 (at para. 45 to 49, 57, 72, and 86) instructs us that the following additional principles should apply when the trial judge determines whether an alleged event occurred:

a) The standard of proof applicable to competing versions of an event is whether it is “more likely than not” that the alleged event occurred as proffered by the plaintiff.

b) The trial judge must scrutinize the evidence with care. There is no differing level of scrutiny or care that applies depending on the seriousness of the case.

c) What a witness says should be scrutinized in light of, and in conjunction with all of the other evidence.

d) Evidence must be sufficiently clear, convincing, and cogent to satisfy the balance of probabilities test. There is no objective standard to measure sufficiency.

e) In “he said – she said” cases, the judge is faced, often, with evidence of events that are alleged to have occurred many years before, where there is little other evidence than that of the plaintiff and defendant. As difficult as the task may be, the judge must make a decision.

f) The trial judge must assess credibility. It is not an exact science.

g) Deciding between conflicting witnesses’ version of events is decided on the balance of probabilities, which includes the assessment of credibility.

[38] This case is a classic “he and she said – he said” dispute.

2. The Witness and Their Credibility

[39] I heard from several witnesses.

[40] The primary witnesses with respect to the contract, its terms, and the extension are the parties. No one else who was present when the contract, its terms, and the extension were discussed gave evidence. I have only the parties’ evidence in this respect.

[41] Others gave evidence on other aspects of the dispute. The Plaintiffs called David Scavuzzo and Elvis Vogin. Mr. Scavuzzo gave evidence that he was the main finish carpenter on the job who did everything from installing to LVL joists, to the trim and hardwood floors. He said that “Frank’s crew” was there every day that Mr. Scavuzzo was there although he does not remember the name of any individual person. He did not give a number to the people in “Frank’s crew” nor did he talk about the work that they individually did. He did say, however, that it was a complete renovation of the house as far as he was concerned.

[42] The Plaintiffs also called Elvis Vogin, a real estate agent through whom they intended to elicit evidence about the present and past market value of the property.

[43] Mr. Arey was the principal witness for the Defence. He called James Clark, a professional engineer and home renovator, who gave evidence about the value of the renovations conducted by the Plaintiffs.

[44] I turn, first, to the parties and apply the credibility factors to each and explain why I made the findings of fact I have made where evidence conflicts. I will then turn to the non-party witnesses whose evidence turns less on credibility than the parties’.

[45] No witness was free from credibility issues.

[46] Generally, I find that Mr. Arey, Ms. Downey, and Mr. Marchese each firmly believed what each said. I seldom resorted to credibility assessments to decide which versions of events to accept. Where I did, I preferred Mr. Arey’s evidence over Ms. Downey’s and Mr. Marchese’s.

3. A Common Credibility Issue – No Written Contract

[47] There is a common problem at the heart of this case – there is no written contract or amending agreement.

[48] It is astounding that Mr. Arey would sell his home, even to his daughter, without a written agreement. If the house is not his only asset (aside from his pension), it certainly is his most significant asset. When asked why he never insisted on a written contract for the transfer of the home, he gave two answers. First, he said that he trusted his family. Second, he responded with some variation of “that’s a good question”.

[49] It is astounding, too, that Ms. Downey would purchase Remea Court without a written agreement and amending agreement. This is a home that she loves and wants. It’s in a neighbourhood that she is familiar with. She wants her children to have the benefit of living in the home. As someone who earns a living in marketing, she must understand that contracts are important as they clearly define the rights and obligations of parties. She admitted that the transfer of real estate is usually done by way of a written Agreement of Purchase and Sale and written documents for a mortgage.

[50] More significantly, Ms. Downey was aware that the home was Mr. Arey’s main asset, or at least his principal asset. She was aware that Mr. Arey was living in his partner’s condo and paying her rent. She was aware that in the early spring, 2017 there was a fire in the condo building which required Mr. Arey and his partner to live in a motel. She was aware that Mr. Arey’s partner was considering returning to Ireland. She was aware that Mr. Arey did not have the funds to buy a home or condo. I conclude that Ms. Downey was aware that Mr. Arey was in an insecure position with respect to housing in 2017.

[51] It is astounding that Ms. Marchese would accept the transfer of the home without a written agreement. He is a plumbing contractor who did work for the City of Toronto. It is probable that his work for the City was done under a contract. As a contractor he ought to have known that written contracts are important as they clearly define each party’s rights and obligations. He risked much in the purchase of Remea Court without a written agreement. Mr. Marchese understood how much Ms. Downey wanted the home. He was prepared to spend over $160,000.00 on renovations and work foregone so that he could do the renovations with his company’s forces. He, too, was aware that real estate transactions were usually based on written Agreements of Purchase and Sale and written mortgage documents.

[52] I now turn to each witness’ credibility issues, in addition to those raised above.

4. Ms. Downey

[53] Heather Downey is a 45-year-old mother of two teenagers. In the main, she was a good witness. She gave her evidence fluidly and without hesitation. For example, she spoke passionately about her emotional attachment to Remea Court.

[54] Other aspects of Ms. Downey’s testimony that indicate that I should treat her evidence with care. At some points, Ms. Downey minimized her level of sophistication and knowledge of contracts, and at others indicated that she was prepared to be ruthless.

[55] The following are examples of matters that make her evidence less reliable that it might otherwise have been:

[56] Ms. Downey’s answers were full except in areas which addressed her level of knowledge of and sophistication with contracts. In those instances, her answers were terse. For example, she said merely that she had worked in marketing for 10 years but provided no detail about what she did or for whom. Ms. Downey was evasive when she was asked about whether she had any post-secondary education. When asked, she merely said “early childhood”. Did she complete a degree or certification? If not, how long was she enrolled for?

[57] Ms. Downey said that she and Mr. Marchese had an agreement with Mr. Arey in February 2016 that he would sell the house to them, closing 31 August 2016, and that the parties agreed in August 2016 to extend the closing to 31 May 2017.

[58] Her own evidence, however, indicated that she was aware that Mr. Arey did not share her view as to the extension of the closing date. She stated that on 10 March 2017, she and Mr. Arey met for a meal at Milestones. She said that during that visit, Mr. Arey said that he was aware that the market was climbing significantly, and that the wanted another $400,000.00 for the house. On 9 April 2017, while at the house, Mr. Arey said to the couple, in the presence of Ms. Downey’s brother, that he wanted to list the house for sale on the open market. She asked him to leave.

[59] Any doubt that Ms. Downey was aware that Mr. Arey had a different view of the extension of the closing date or that he cancelled the deal was resolved by her actions on 22 - 23 April 2017. Ms. Downey invited Mr. Arey to meet her to discuss the deal at a Tim Hortons on 23 April 2017. She had received an email the evening before from Mr. Arey saying that he wanted them to vacate the property by 30 June so he could list the property.

[60] Ms. Downey secretly recorded that conversation. She said that the did so because she was shocked following the 9 April conversation. The couple had spent a great deal of money on the renovations. She wanted to have an accurate rendition of the conversation and did not want ‘emotions to take over’. In cross-examination she said that she had no intention to use the recording in Court. She merely wanted to find out when and why Mr. Arey changed his mind.

[61] I do not accept her explanation. Ms. Downey felt betrayed and angry after the 9 April conversation and was in no doubt after Mr. Arey’s 22 April email that Mr. Arey considered the deal dead. She and Mr. Marchese had invested over $150,000.00 in renovating the property. The children were settled. More significantly, she could not find another house in the area that she could afford.

[62] Further, Mr. Arey made it clear in that recording that he did not accept the 31 May 2017 closing date.

[63] I find that Ms. Downey recorded the discussion with Mr. Arey intending that he would not know about the recording and hoped to capture Mr. Arey saying something of use in the brewing dispute between them.

[64] Ms. Downey admitted that she knew that Mr. Arey was retired, had only his pension as income, and only had one home. When asked if the home has his sole or larges asset, she demurred, saying that she did not want to speculate.

[65] Ms. Downey was also aware of several circumstances that made Mr. Arey’s situation precarious. He moved into June’s condo to please her. He did not have any ownership interest in the condo. He did not want to leave the house. He was severely ill from September to Christmas 2016. June was talking about moving back to Ireland, which would leave Mr. Arey with no home and no means to buy a home.

[66] Ms. Downey admitted that she was aware that between 2016 and 2018, the real estate market in the area of Remea Court was increasing rapidly. At the same time, they were performing renovations on Remea Court, and were not paying Mr. Arey for use of the home. It was not until the extension agreement that they began to pay $1800.00/month. The extension was necessary to assist Mr. Marchese to prevent his mother and sister from defaulting on their mortgage.

5. Mr. Marchese

[67] Frank Marchese is also a 48-year-old father of two teenagers. In the main, he too was a good witness, although his command of details was sometimes lacking. That is because he left Ms. Downey to deal with Mr. Arey. He too gave evidence fluidly, and without hesitation.

[68] Mr. Marchese is a sophisticated businessman who owns two corporations. One is FNJ Contracting (“FNJ”), a plumbing contracting firm which for 16 years (10 years by the time of the events in this action) has replaced lead water supply lines to homes with copper lines. FNJ has done this work under contract to the City of Toronto. In addition, FNJ has a program by which it replaces lead water lines for low income and disabled people for free.

[69] Mr. Marchese’s second company is Plumbing Protection of Canada Inc., which provides homeowners’ plumbing warrantee policies to people in the Hamilton and Niagara areas which, in exchange of $10.00 monthly payment, the company will fix all of the subscribing householder’s plumbing problems. He started this company around the time of the events giving rise to this action.

[70] There are certain aspects of Mr. Marchese’s evidence that indicate that I should treat his evidence with care, in addition to those mentioned above. For example:

[71] He made unequivocal statements of fact that proved to be incorrect. For example, after the litigation arose, he accused Mr. Arey of filing complaints with the City by-law department about the work that was going on at Remea Court, which forced Mr. Marchese to obtain the services of architects and engineers, and after the work was done under the City work orders, Mr. Arey, as the owner of the home, would not sign off on the work.

[72] In cross-examination, however, he said that the couple was fined $5,000.00 by the City for failing to comply with by-laws and permit regulations. The charges against Mr. Arey as owner were dismissed. Mr. Marchese, when asked why he did not have permits, at first said “no reason”, then modified his answer to say that they were in a hurry to get the work done (6 to 8 weeks) before closing, and he merely did not get around to getting permits.

[73] It is difficult to accept Mr. Marchese’s evidence that the issue of permits never occurred to him. He did structural alterations to the house. He is a plumbing contractor.

[74] Mr. Marchese preferred the interests of his family, Ms. Downey, and himself over Mr. Arey’s interests.

[75] Just before the 31 August 2016 closing date for Remea Court, Mr. Marchese’s mother and sister’s mortgage was up for renewal. Neither qualified for a new mortgage nor could they pay off the existing mortgage. Mr. Marchese, using the equity in his own home, secured financing for his mother and sister’s home and paid for repairs so the house could be sold. He and Ms. Downey approached Mr. Arey to postpone the closing of Remea Court until 31 May 2017 to permit Mr. Marchese flexibility to attend to his mother and sister’s predicament. They said that Mr. Arey agreed to the postponement. This all occurred in a rising real estate market, which, because of the postponement by Mr. Arey worked to his detriment but to Mr. Marchese’s family’s benefit. He and Ms. Downey also benefitted from the rising market during the postponement period.

[76] In April 2017, when Mr. Arey asked for more money, Mr. Marchese offered to pay Mr. Arey $100,000.00 on the existing contract immediately and assist him in finding another house. Mr. Marchese did neither.

[77] Mr. Marchese made statements of fact on significant issues, without evidence to support the statements in circumstances in which one would expect to see supporting evidence, for example:

a) He was cross-examined on the issue of whether he and Ms. Downey were ready, willing and able to close the transfer of Remea Court. He said several times that he had a mortgage commitment. The only evidence he provided were inadmissible statements by his financial advisor and mortgage broker, Mr. Puzzo, who was not called to give evidence. He insisted that he had been given a mortgage commitment letter but that he had not produced it.

b) On further cross-examination, Mr. Marchese said that he had provided much documentation to, and had many discussions with Mr. Puzzo concerning the sale of his existing home, refinancing his sister/mother’s mortgage, and about financing the purchase of Remea Court. While he had oral confirmation of a mortgage, he never obtained a written commitment as it was not required until two weeks before a closing, and the parties never got to two weeks before a closing. He was confident that given his dealings with Puzzo and Dominion Lending over the years, he would have no difficulty in obtaining financing.

c) Mr. Marchese claims as part of his damages the sum of $63,000.00 for loss of income. He said that for most of the summer he was directly involved in the renovations and used his own employees to do most of the work. Summer is the busiest time in his contracting business. He gave up work in order to attend to the renovations.

d) Mr. Marchese offered no corroborating evidence to substantiate why he chose to essentially cease his business’ operations so he could divert employee time to his personal business, especially in his busiest time. Further, he offered no concrete evidence to support the $63,000 loss of business income.

e) Mr. Marchese said that he had many men working on the renovations from June to August 2016. He conceded that his documentation was limited in terms of substantiating who worked when and did what work. He said that Dave Scavuzzo could substantiate this as he was present, full time, for June, July and parts of August. Mr. Scavuzzo, however, was of little assistance. He confirmed that he worked from July to November 2016 and that the renovations “completely gutted” the home. He also remembers that Mr. Marchese’s forces were usually present when he was present, but he does not remember who was present or did what.

[78] Both Ms. Downey and Mr. Marchese accused Mr. Arey of breaking the agreement to transfer the house when he saw the real estate market rising. They accused him of being greedy, of breaching their trust. By March 2017 they had lost all faith and trust in him. They questioned how Mr. Arey could act this way toward his daughter and grandchildren. Implicitly, they blamed him for difficulties in the broader family.

[79] In some circumstances, such emotional responses might reflect poorly on the couple’s credibility. Not in this case. The views that the couple expressed about Mr. Arey are understandable given the “family” agreement that they thought they had with Mr. Arey.

6. Mr. Arey

[80] At trial Mr. Arey was two months short of 80 years old. From time to time he had difficulty hearing questions and being heard. Both are understandable given the plexiglass screens that surrounded both the questioners and the witness box, his soft voice, and his reduced hearing ability. Otherwise he gave evidence in a straightforward manner and withstood cross-examination well.

[81] The main things that affect Mr. Arey’s credibility were his attempts to force the plaintiffs and their children out of the house.

[82] After Mr. Arey determined that the deal was dead, he did two things which he calculated would force the couple and their children (two of whom are his grandchildren) out of the house. First, he brought an application before the Landlord and Tenant Tribunal for an order to have the plaintiff’s and their children evicted. Presumably, he brought this application based on the fact that the parties called the monthly payments the couple paid Mr. Arey after August 2016 “rent.” The $1,800 per month that the plaintiffs paid was reimbursement for the mortgage, taxes, and property insurance that Mr. Arey continued to pay. This payment was made in exchange for an extension of the completion date for the deal from 31 August 2016 to a later date. Ultimately, Mr. Arey withdrew his application, conceding that the parties’ arrangement was not a residential tenancy and, therefore, the landlord and tenant legislation did not apply.

[83] Second, Mr. Arey complained to the city of Mississauga’s by-law department about Mr. Marchese’s by-law infringements with respect to the renovations. As the owner, he too was charged although the charges against him were dropped.

[84] Another factor that affect Mr. Arey’s credibility is the fact that when the plaintiffs proposed an extension of the closing date from 31 August 2016 to 31 May 2017, he neither accepted nor rejected the suggestion. He explained his non-reaction by saying that he was very ill at the time the proposal was made and could not address it until approximate January 2017. While I accept that he did not clearly accept or reject the proposal, his health concerns appear to have had little to do with the matter initially. The extension request was in August, and Mr. Arey’s health issues did not arise until September or October.

[85] As between the three principal players, because of their credibility issues, I generally preferred the evidence of Mr. Arey over the evidence of the plaintiffs. As discussed, however, I rarely turned to credibility to decide an issue.

[86] I will address any credibility issues with the remaining witnesses, elsewhere in these reasons.

ANALYSIS

Issue 1: Was there an Oral Agreement between the Parties to transfer Remea Court from Mr. Arey to the Plaintiffs, and if so, what were its terms?

1. The Law re Oral Contracts

[87] The agreement to transfer Remea Court, or the alleged agreement to extend the closing of the transfer, were oral agreements.

[88] There are four criteria for the Court to consider in determining whether an oral contract exists:

1. it is necessary to distill from the words and actions of the parties, at the time the contract was entered into, what they intended;

2. evidence of the parties' subjective intentions has no independent place in determining the terms of their bargain;

3. the test of what the parties agreed to requires an objective determination; and

4. the contract must include the requisite elements of offer, acceptance and consideration.

(See: S&J Gareri Trucking Ltd. v. Onyx Corp., 2016 ONCA 505 at para. 7).

[89] Put another way, the test is whether there has been a meeting of the minds.

[90] Whether there has been a meeting of the minds is an objective determination. Would an objective, reasonable bystander conclude that, in all the circumstances, the parties intended to contract? An intention to contract, alone, is insufficient to create an enforceable agreement. It is necessary that the essential terms of the agreement are also sufficiently certain. However, an agreement is not incomplete simply because it calls for the execution of further documents (see: UBS Securities Canada Inc. v. Sands Brothers Canada Ltd., 2009 ONCA 328, at para. 47).

[91] Part performance or continued negotiations do not create an enforceable agreement. To invoke the doctrine of part performance, the party claiming to have performed a valid contract must demonstrate a) detrimental reliance, and b) the active part performance sufficiently indicate the existence of the alleged contract such that the party alleging the agreement is permitted to adduce evidence of the oral agreement. Active part performance must be “unequivocally” referable to the alleged oral agreement (see: B & R Development Corp. v. Trail South Dev’ts Inc. 2012 ABCA 351, at para. 35).

[92] Negotiations, however advanced, do not constitute an enforceable agreement where (1) there is uncertainty as to essential terms, (2) the provisions of what was agreed to are insufficiently certain, and (3) it is the intention that a binding agreement should not arise until a formal document has been executed (see: Hall, Geoff R. Canadian Contractual Interpretation Law, (Markham: LexisNexis, 2012), at 5.1).

2. Application

[93] There is no dispute between the parties that their agreement to transfer Remea Court from Mr. Arey to Ms. Downey and Mr. Marchese was oral.

[94] Would an objective, reasonable bystander conclude that, in all the circumstances, the parties intended to contract?

[95] In this case, regardless of what the parties thought, I find that there was no agreement to transfer the home.

[96] The parties agreed on certain terms of the contract:

a) the transfer would close 31 August 2016,

b) the plaintiffs would move in earlier and carry the utilities and other current expenses related to living on the property,

c) Mr. Arey would continue to pay the mortgage, property taxes and insurance,

d) the plaintiffs would begin renovations to the basement, immediately. While Mr. Arey expressed concern when he found out that the plaintiffs were renovating other parts of the house, he ultimately did not object to this.

[97] Notwithstanding these agreed to terms, there was one fundamental term that was not agreed to: price.

[98] Notwithstanding that the oral agreement was for $850,000.00, the disagreement was over when and how the ‘family discount’ was to be applied. Ms. Downey and Mr. Marchese said that the price was effectively $750,000.00 because shortly before closing Mr. Arey would forgive $100,000.00 of that price. It is unclear when Mr. Arey would do that.

[99] Mr. Arey also said that the price was $850,000.00. HE said, however, that this price had already been discounted by $100,000.00. He said that the fair market value of the house was $950,000.00 based on information he received from a long-time neighbour who was an experienced real estate agent. I do not accept this evidence from Mr. Arey for the truth of it. This evidence is hearsay. However, I accept it as informing Mr. Arey’s belief.

[100] Mr. Arey says that he used this fair market value and deducted from it the “family discount” to arrive at the price of $850,000.00. Notwithstanding determined cross-examination of the point he did not budge from his evidence that the $850,000.00 price agreed upon was after deducting the “family discount”.

[101] I accept that each of the parties honestly believed their version of the price of the home. Thus, I find that an objective, reasonable bystander would conclude that, in all the circumstances, the parties were not agreed on price, a fundamental term to any contract.

[102] This finding disposes of the Plaintiffs claim for specific performance and breach of contract.

Issue 2: If there was an Agreement to Transfer the home from Mr. Arey to the Plaintiffs, was there an Agreement to extend the closing from 31 August 2016 to 31 May 2017, and what were its terms?

[103] If there was no original agreement because of the failure to agree on price, there can be no extension of that agreement. For the purpose of analysing the issue of the extension, however, I assume that there was an enforceable agreement to transfer. Again, the question is: would an objective, reasonable bystander conclude, in all the circumstances, that there was an agreement to extend the closing date to 31 May 2017?

[104] The plaintiffs both said that they asked Mr. Arey to extend of the closing date to 31 May 2017 and that Mr. Arey agreed to it.

[105] Mr. Arey acknowledged that the plaintiffs requested an extension to 31 May 2017. He also acknowledged that in exchange for an extension, the parties agreed that the plaintiffs would pay $1,800.00 per month in “rent” which was the approximate total of the mortgage, property taxes, and property insurance that Mr. Arey had been carrying since Ms. Downey and her children began living in the house in August 2015. They agreed that the $1800.00 a month would be credited against the purchase price. Mr. Arey testified, however, that he did not agree to the 31 May 2017 date. Rather, he neither agreed nor disagreed with the date. He left the question open, thinking that the extension would not be long.

[106] I accept that each of the parties honestly believed their version of events with respect to the agreement to extend the closing. Thus, I find that an objective, reasonable bystander would conclude that, in all the circumstances, the parties were not agreed on the extended date for the closing.

[107] Why do I say this?

[108] I find that Mr. Arey, by his conduct, agreed to extend the closing date. Mr. Arey, however, neither accepted nor refused the extension to 31 May. He conceded that he was prepared to extend the closing date beyond 31 August 2016 to permit Mr. Marchese to address his family situation. Mr. Arey still wanted the deal to complete. He wanted to help his daughter. He thought that the extension would not be for a long period of time. He was adamant that he never agreed to 31 May 2017.

[109] There was no meeting of the minds with respect to the extension of the closing date for the transfer of Remea Court to 31 May 2017.

[110] I also find that by April 2017 the plaintiffs knew that Mr. Arey wanted to end what he saw as an open-ended extension unless the plaintiffs paid more money.

[111] Mr. Marchese testified that around the time the parties discussed extending the closing date, there was also discussion with Mr. Arey that he was not sure that his relationship with his partner would survive. He was upset because his partner had lived with Mr. Arey at Remea Court for seven years, rent free, but now he was paying rent at her condominium. In response to this, Mr. Marchese offered to pay $100,000.00 and to assist Mr. Arey in finding another place to live. Mr. Marchese was unclear as to when this discussion took place.

[112] Mr. Arey’s evidence in this respect is that this conversation took place in September 2016. He told the plaintiffs that he needed money. Mr. Marchese offered to get him $100,000.00 in the immediate future and another $100,000.00 or even the balance of the purchase price soon thereafter. The money never came. Mr. Arey decided that the deal was dead as of that point although he did not say so.

[113] Mr. Arey is mistaken as to the timing of this discussions. Between September and the end of 2016 Mr. Arey was ill and could not address any issue with respect to the house.

[114] The issue about the completion of the sale was next raised in March 2017. Mr. Arey became concerned that the sale had not closed. In late February he called Ms. Downey and arranged a dinner date for 10 March 2017. He testified that at that meeting he told Ms. Dewey that he was unhappy with the time it was taking for the house to close. The market was rising and he was losing that increased value. He also wanted to give Ms. Downey’s brother, Kevin, the same sort of assistance that he was giving Ms. Downey but could not do so as his money was tied up in the house.

[115] Ms. Downey’s memory of this meeting is, for the most part, identical. She said, however, Mr. Arey also demanded that the plaintiffs come up with $400,000.00 more to purchase the property because the real estate market had risen significantly. Ms. Downey said that she was shocked by this demand. She said that she thought they had a deal to extend the original agreement to 31 May 2017.

[116] The next time they discussed the closing was between 8 and 10 April at Remea Court. The plaintiffs were present, as were Mr. Arey and his son, Kevin. Mr. Arey says that the discussion became quite heated.

[117] Ms. Downey’s memory of this meeting, for the most part, is identical. She said however, that Mr. Arey also insisted that if the couple was not prepared to pay more for the house, he would put the house on the market. Again, Ms. Downey was shocked at the request. She was angry and demanded that Mr. Arey leave the home.

[118] Mr. Arey said that Ms. Downey called him on or about 10th of April, after the meeting at Remea Court. By this time, Mr. Arey and his partner were living in a hotel because there was a fire in the garage at her condo building which forced them to vacate while smoke damage was assessed and remedied. Ms. Downey indicated that she wanted to talk. They made an agreement to meet on April 23 at a local Tim Horton’s.

[119] On 22 April 2017, in advance of the meeting, Mr. Arey emailed Ms. Downey and said that he wanted the plaintiffs out of the house by 30th June so that he could list the house.

[120] Mr. Arey said that he told Ms. Downey on the 23rd that he thought the property was worth $1.2 million and he wanted more money. Mr. Arey testified that he hoped this would cause the plaintiffs to provide him with a better offer. It did not.

[121] As indicated in my credibility assessment section, Ms. Downey recorded the April 23 meeting. As I also indicated, I reject her explanation about why she recorded the meeting. In my view, she hoped to use the recording as evidence against her father. No such evidence was forthcoming. Mr. Arey made it clear that the market was increasing quickly. He admitted that he was angry in August or September when Mr. Marchese offered him $100,000.00, which never came. He expressed his view that he had agreed to extend the closing for a few months, but it had now become nine months. He conceded that there was poor communication between the two of them.

[122] The plaintiffs have the obligation to prove that there was agreement to extend the closing date. They have not done so. I do not accept their evidence that Mr. Arey agreed to the extension of the closing date by nine months. I accept Mr. Arey’s evidence that he agreed to a short extension without a specific closing date. The market was beginning to rise. Any extension in the rising market would be to Mr. Arey’s detriment.

[123] The plaintiffs submit that a vendor cannot allow the purchaser to think that there is a valid oral extension agreement, and then revoke it on the eve of the closing. In this respect, they rely on Danesh v. Bahed et al, 2020 ONSC 3525.

[124] Danesh is distinguishable. In Danesh, the parties had a written Agreement of Purchase and Sale with the defined closing date. Subsequently, the parties agreed, in writing, to a further extension with an additional deposit of $20,000.00.

[125] As the second closing date approached, the purchaser discovered he would not have secure financing. He advised the vendor at 12:14 pm on the closing date that he was seeking an extension of time from September 24 to September 25. The vendor agreed subject to terms. The vendor sent the terms and at 4 pm on the 24th, the purchaser accepted them orally. On the 25th, the vendor wrote saying that since the purchaser had not completed on the 24th, the vendor would pursue remedies. The purchaser claimed that the correspondence leading up to 24 September led him to believe that the terms of the second extension were accepted. The vendor advised on 24 September, the day before the closing, that they would not be closing.

[126] Faieta J., said at paragraph 65 that an oral agreement to extend the closing date of the purchase of property pursuant to a written Agreement of Purchase and Sale can be upheld where there is an apparent agreement to the extension, orally. Further, it is inappropriate for a party to cancel the agreement or the extension a few hours before the extension was to be completed.

[127] In this case, there is no initial written agreement for the transfer of the property.

[128] The plaintiffs also submit that Mr. Arey implicitly consented to or agreed to the closing date being extended to a later date than the original closing, although that later date was unspecified. In the circumstances, his remedy was to fix a new date on reasonable notice. In this respect the Plaintiffs rely on Danesh, but also on Dunn v. Trojansek, (1972) N.R. 243, para. 4 (Ont. C.A.).

[129] Dunn was another case in which the oral agreement to extend a written agreement was terminated only two hours before the deal was to close. The Court of Appeal held that where there is a tacit consent to extend the closing date to a later date, which is not fixed, the remedy of the vendor is to fix a new date on reasonable notice.

[130] In this case, Mr. Arey did as the Court of Appeal in Dunn specified. Mr. Arey agreed to an extension to help Mr. Marchese address his family’s emergency. He did not agree to an extension to May 31, 2017. He expected the delay in closing to be a short one. It was not. He raised the issue with the plaintiffs. By April 22, it was clear that Mr. Arey did not agree to the 31 May 2107 closing date, and that he thought it would be a much shorter closing date.

[131] The Plaintiffs’ conduct indicates that they were aware of Mr. Arey’s position. Mr. Marchese’s suggested he would get $100,000.00 immediately, with more money to follow. This never transpired.

[132] On 10 March 2017, Mr. Arey and Ms. Downey met and Mr. Arey said he wanted $400,000.00 more for the home. Ms. Downey was clearly aware that Mr. Arey was unhappy with the deal and wanted out, at that time. In cross-examination, Ms. Downey said that Mr. Arey’s demand for more money worried her. They agreed to speak in a couple of weeks. I infer from this discussion that Ms. Downey knew Mr. Arey wanted to cancel the deal because they had taken too long to close the transaction, but she hoped that he would reconsider it in the next week or two.

[133] On 9 or 10 April 2017 Mr. Arey went to Remea Court. He told the plaintiffs that because they had not yet closed on the house and the market was rising, he wanted to list the house on the open market immediately in order to take advantage of the rapidly increasing market.

[134] On 22 April 2017 Mr. Arey emailed the plaintiffs demanding that they be out of the house by 30th June so that he could list it. He reinforced this view on 23 April when he met with Ms. Downey and Ms. Downey recorded the conversation.

[135] Based on this analysis, the plaintiffs had as little as 39 days and as much as 81 days’ notice that the extension agreement was terminated.

[136] Based on the findings above, the plaintiffs’ action to enforce the contract and for damages for breach of contract are dismissed. The Plaintiffs are, however, entitled to damages for unjust enrichment, to which I now turn.

Issue 3: Assuming that there was an Agreement to transfer and an Agreement to extend the closing, is Specific Performance available in this case?

[137] My finding that there was no valid contract to transfer the land and no valid extension of that contract makes the issue of specific performance moot. I address it here for the sake of completeness.

1. The Law re Specific Performance

[138] In order to avail themselves of specific performance, the plaintiffs must prove:

1. the property at issue is unique;

2. damages are inadequate to do justice, either because of an imprecision of the damages or because the vendor’s conduct is a flagrant and deliberate infliction of risk and loss on the purchaser; and

3. there is a fair, real and substantial justification for the claim of specific performance.

(see: Campbell Pools Inc. v. Seville Group Inc. 2015 ONSC 2314, at para. 101.

[139] In order to establish that a property is unique, the plaintiff need only show that a substitute property is not “readily available” or the property has qualities that make it especially suitable for the purchaser and the particular use for which the property is intended. Further, the plaintiff is not required to put forward specific evidence that there was not some other property available that has some, most, or all features that made the property unique. Such an onus would create an unduly large burden on the plaintiff. (see: Campbell Pools, supra, at para. 102 to 104)

[140] Whether a property is unique, has both a subjective and an objective component. (see: Silverberg v. 1054384 Ontario Ltd, 2009 ONCA 698, at para. 19)

[141] It is enough “for the plaintiff to demonstrate that the property has a quality that makes them especially suitable for the proposed use and that they cannot be reasonably duplicated elsewhere (see: 1252668 Ontario Inc. v. Wyndham Street Investments Inc. (1999), 27 R.P.R. (3d) 58, [1999] O.J. No. 3188, per Lamek J. at para. 2, cited with approval by the Court of Appeal in John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd. (2003), 2003 CanLII 52131 (ON CA), 63 O.R. (3d) 304, [2003] O.J. No. 350 (C.A.).

[142] Madam Justice Weiler, giving the judgment of the Court of Appeal in Dodge, stated, at paragraph 39:

I agree that in order to establish that a property is unique the person seeking the remedy of specific performance must show that the property in question has a quality that cannot be readily duplicated elsewhere. This quality should relate to the proposed use of the property and be a quality that makes it particularly suitable for the purpose for which it was intended. See also the comments of Low J. in 904060 Ontario Ltd. v. 529566 Ontario Ltd., [1999] O.J. No. 355 at para. 14. (Emphasis added.)

[143] Lax J., in Dodge and Pepall J., in De Franco v. Khatri (2005), 30 R.P.R. (4th) 192, [2005] O.J. No. 1890 (S.C.J.) added to the traditional requirements for specific performance, that there is a subjective and objective aspect to uniqueness.

[144] In Silverberg, the plaintiffs were searching for a suitable property for their business. They found one that they thought was so suitable that they were prepared to pay substantially in excess of the market. The court agreed that the property was unique in that it was difficult to duplicate. Subjectively, the property was very close to the Silverberg’s existing premises and clients. Objectively, there were only a relatively small number of stores that could have that featured square footage, storage space, and other physical attributes that was “so perfectly tailored to their business needs”.

2. Application

[145] I find that Remea Court was not a unique property as required by the jurisprudence.

[146] Subjectively, Remea Court was unique to Ms. Downey. She grew up in the home. It held wonderful memories. Many of the neighbours were the same. It had a nice yard. The schools in the area were good. In the portions of the recording between Mr. Arey and Ms. Downey that she took of their meeting of 23 April 2017, which she adopted, Ms. Downey made it clear that the reason why she wanted that house was that it was important to raise her children in the house that she was raised in. She said at pg. 3, line 18, how important it was for her to raise her children in the same house she was raised in.

[147] Objectively, Ms. Downey said that she had looked in the area and could find nothing that, because of the rise in the market since the original agreement, the couple could afford to purchase. Her evidence, however, is subjective. In other words, she looked only for homes in the catchment area of the school that her children attended for the previous year, and to which she went. She said at pg. 17, line 22, “…there’s nothing in our area we can afford to buy. Its. Just a given. There’s nothing.”

[148] She gave no evidence that there was anything about the land, the house, or any other physical attribute of the house other than its general size, that made it objectively unique.

[149] The house was subjectively unique to Mr. Marchese too, in that he wanted to purchase the house because Ms. Downey wanted it. His only requirement that could be said to make the property objectively unique was that his separation or divorce agreement required that he had to live within a defined distance of his ex-spouse.

[150] In other words, there is nothing about Remea Court that makes it “perfectly tailored” to this blended family’s needs. The plaintiffs have not shown that an order for specific performance, rather than monetary damages, better serves justice between the parties. (see: Silverberg v. 1054384 Ontario Limited, 2008 CanLII 59325 (ONSC)at para. 134)

[151] Mr. Arey argued strenuously that the plaintiffs should be denied specific performance as they failed to establish that he was ready, willing and able to purchase the Property on any date (see Silberberg, SCJ, para. 109). It is only necessary that the plaintiff in a claim for specific performance give notice that it is ready and willing to close (see: Shaw Industries Ltd. v. Greenland Enterprises Ltd. (1991), 1991 CanLII 3955 (BC CA), 54 B.C.L.R. (2d) 264 (C.A.) and Basra v. Carhoun (1993), 1993 CanLII 1435 (BC CA), 82 B.C.L.R. (2d) 71 (B.C.C.A.).

[152] Applying those principles here, assuming that the original contract and the agreement to extend existed, I find that in these circumstances the plaintiffs were ready, willing and able to perform. I accept the plaintiffs’ evidence that they would have had financing at any of the closing dates.

Issue 4: If Specific Performance is not available in this case, what are the Plaintiffs’ damages?

[153] The plaintiffs concede that if they fail on the two contract issues, they fail on specific performance. They are entitled to damages, however, as their improvements to the house will have unjustly enriched Mr. Arey. Mr. Arey concedes this point. The only issue is the quantum of those damages.

a) The plaintiffs seek damages as follows:

Cost of Renovations per exhibits 6 and 7: $168,826.92

less duplicate entries ($1455.43)

less flooring refund ($1367.00)

Total $166,004.49

b) Foregone income Mr. Marchese’s company: $62,044.55

Total $228,049.04

[154] The plaintiffs also claim an unspecified amount representing the contribution that the extensive renovations they did made to the overall value of the house.

[155] Mr. Arey argues that the plaintiffs have failed to substantiate the cost of the renovations. They have produced no evidence that they, in fact, spent $166,004.49 on renovations, and that the remaining damages are speculative.

1. The Evidence and Findings

[156] The plaintiffs’ evidence shows that the renovation was substantial.

[157] In the basement, the plaintiffs removed a load bearing wall to open up the basement and put a beam to replace it. They created a bedroom and a full bath in the basement, where none existed previously.

[158] On the main floor, they removed two loadbearing walls and put in beams to replace them. They opened up the main floor. They installed paint, hardware and trim, and pot lights throughout the main floor.

[159] On the second floor, they replaced the stairs, replaced the floorings in all areas, and renovated the second floor bathroom. This work was 70% complete by the aborted 31 August 2016 original closing date.

[160] Mr. Arey does not dispute the extent of the renovations. He indicated that he originally agreed to the plaintiffs moving in before closing date and commencing renovations in the basement. He expressed dismay that they had begun renovations on the upper floors of the house but conceded that because of the agreement he had with the plaintiffs to purchase the house, it was their house and they could do what they wished. He was present at various stages through the renovations to see what was being done.

[161] The plaintiffs’ produced Exhibits 6 and 7 that address the costs they incurred. Most of the relevant evidence came from Mr. Marchese.

2. Materials Costs

[162] Mr. Marchese indicated that his cash outlay for costs and materials was $101,825.93. He conceded that there were $1,455.43 in duplication of receipts and a further $1,367.04 which represented a return to Brampton Hardwood, and not an expense.

[163] This brings the total expenditures claim to $99,003.46.

[164] Mr. Marchese was examined with respect to $1,691.44 paid to a moving company to move him from his home to Remea Court. Mr. Arey questioned how the moving expense related to ownership of the home. Mr. Marchese said that if the agreement had not been reached to purchase the house, he would not have sold his existing home and moved to Remea Court. He also agreed that the movers, at his request, moved Mr. Arey’s possessions into storage. I accept the plaintiffs’ explanation and make no deduction in this respect.

[165] Mr. Arey relies on the evidence of James Clark with respect to the cost of the renovation. I accepted Mr. Clark as an expert in residential housing restoration and costs. In Mr. Clark’s opinion, had the renovations been done by a contractor, they would have cost $110,000.00 to $130,000.00, and had they been done by the homeowner, they would have cost $91,000.00.

[166] While I qualified Mr. Clark as an expert, I find his evidence of little weight for the following reasons:

1. He conceded that he prepared his opinion by looking at the finished interior of the home. He was unaware of what conditions existed behind the drywall or what surprises were uncovered during the renovation that may have increased cost.

2. He was not aware of any increased in costs over the life of the job, beyond the original estimates.

3. He did not break out materials from labour in his estimates.

4. He accounted for only one layer of primer and one layer of finished coat in his painting estimates, but conceded that some areas may have needed a coat of primer and two coats of finish paint.

5. In determining his “do it yourself” price, he did not indicate whether that included subcontractors fees for any aspect of the work, notwithstanding that Mr. Marchese told him that Mr. Marchese did much of the work himself and contracted out other work. Mr. Clark conceded that when he did renovation work, he contracted out plumbing, electrical and engineering work to appropriate professionals.

6. He conceded that different contractors might charge different prices for the same work.

7. He has only been doing renovation work since 2017.

[167] I find that the reasonable cost for materials, as adjusted by my findings above, is $99,003.46.

3. Ms. Downey’s Expenses

[168] The plaintiffs allege that Ms. Downey contributed $28,134.38 to various expenses as itemized in Exhibit 7.

[169] In cross-examination, Mr. Marchese was questioned about $2,745.00, for three swimming pool related expenses, two each at $610.00 for pool maintenance and one for a piece of machinery at $1,525.00. In his view, this was all spent to deal with the swimming pool and, if the house was not theirs, it was properly chargeable.

[170] In my view the $2,745.00 is properly deducted. The two charges each at $610.00 are for general pool maintenance which the family must pay as the occupants of the house and users of the pool. The $1,525.00 machinery expense relates to an automated pool vacuum attachment that Mr. Marchese purchased in order to save himself pool maintenance labour. That too relates to pool maintenance.

[171] I find that the recoverable expenses Ms. Downey incurred to be $25,389.38.

4. Labour and Sub-contracting

[172] The plaintiffs’ claim labour and subcontracting costs is $38,866.61, comprising $17,100.00 for Mr. Marchese’s company’s payroll, $3,950.00 for Mr. Marchese’s personal labour, and a subcontracting fee of $17,816.61.

[173] Mr. Marchese was questioned about his payroll expense of $17,100.00 and his charge of $3,950.00 for his own labour in assisting with and supervising the renovations. While he did not produce specific invoices for every employee used, I have no reason to doubt the accuracy of his figures.

[174] I find that the recoverable labour and contracting amounts total $38,866.51.

5. Foregone Business

[175] Mr. Marchese says that in order to realize the lowest cost in renovating the house, he used his own company’s forces. In doing so Mr. Marchese’s company suffered a loss of business of $62,044.55. He testified that he turned down work in order to free up his employees to work on the renovations. But for the renovations, this income would have been earned.

[176] I allow nothing for this head of damage.

[177] Mr. Marchese had a choice to hire other trades to do the renovation while continuing to do his company’s work, or to use his company’s workers. He admitted that the summer is the highest time for work in his plumbing contracting business. I find that his foregoing work to do the renovations was a personal choice, and not something necessary under the circumstances, or even reasonable based on the evidence before me.

[178] Even if I had found that foregoing other work was reasonable, I still would have awarded nothing for this head of damages. I do not accept Mr. Marchese’s oral evidence on the business loss. His claim is in a very specific amount. I conclude that Mr. Marchese had records on which to base this figure. He produced none of it at trial. This loss is unproven.

6. Increased Value of the House

[179] As part of the plaintiffs’ claim of unjust enrichment, they argue that the work that they performed on Remea Court increased the value of the home, independent of any general market increases. Their expert, Elvis Vogrin, whom I accepted as an expert in valuing residential real estate, agreed as a general proposition that renovations to a home increase the home’s value, with kitchen renovations and bathroom renovations contributing the most. Mr. Vogrin, however, was not asked to appraise the increase value of the house due solely to the plaintiffs’ renovations.

[180] The plaintiffs have failed to prove this aspect of their claim.

7. Rent

[181] Mr. Arey counterclaims for rent from May 2017 onward, at market rate to be determined by the Court, less the approximately $84,000.00 paid in “rent” to date at $1,800.00 per month.

[182] This claim, too, is dismissed as unproven.

[183] Mr. Vogrin, Ms. Downey and Mr. Marchese all agreed, conceptually, that $1,800.00 a month rent for Remea Court (comprising the total of mortgage, tax and insurance expense Mr. Arey was incurring) is probably below market rent. However, Mr. Arey led no evidence about what the market rent was for a house like Remea Court. If Mr. Arey is entitled to recover rent from the plaintiffs, he must prove the rent to which he is entitled. He has not done so. That he agreed that the plaintiffs pay $1,800.00 a month from the extension date to the closing as “rent”, is indicative of what he was prepared to accept as fair market.

8. Other Claims

[184] All other claims and counterclaims are dismissed, including the plaintiff’s claim for punitive and exemplary damages. There is no basis for

CONCLUSION

[185] The plaintiffs shall have judgement against Mr. Arey as follows:

Materials Cost: $ 99,003.46

Ms. Downey’s expenses: $ 25,389.38

Labour and Sub-contracting: $ 38,866.51

Foregone business: $ 0

Rent: $ 0

Total: $163,259.35

[186] This sum bears pre-judgment interest from July 1, 2016 at 2% for total pre-judgment interest of $15,601.35, bringing the total judgment to $178,860.70.

[187] Mr. Arey is a legal owner Remea Court.

[188] All encumbrances that the plaintiffs have placed against the property are discharged and ordered removed.

[189] Mr. Arey is free to market and sell the home.

[190] The plaintiffs may remain in the home until it is sold and the sale closes provided that they cooperate fully with Mr. Arey and his real estate agents in marketing and showing the property. Any issues arising from any alleged lack of cooperation, can be brought back before me on a date convenient to all parties.

[191] So long as they remain in the home, the plaintiffs shall continue to pay “rent” in the amount of the cost to Mr. Arey of any mortgage, property insurance, and property tax expenses, the total of which shall not fall below $1,800.00.

COSTS

[192] Unless the parties settled the question of costs, I can be spoken to about costs.

Trimble J.

Released: April 16, 2021