Court File and Parties

COURT FILE NO.: CV-20-643605 DATE: 2021-11-29 SUPERIOR COURT OF JUSTICE - ONTARIO

RE: 368230 Ontario Limited, Plaintiff AND: Ali Booth, Defendant

BEFORE: W.D. Black J.

COUNSEL: Alexander Evangelista, for the Plaintiff Ali Booth, Self-represented

HEARD: November 12, 2021

ENDORSEMENT

Overview

[1] The plaintiff, 368230 Ontario Limited (“368”), brings a motion for summary judgment against the defendant, Ali Booth (“Booth”). The motion and the claim relate to Booth’s alleged breach of an agreement of purchase and sale for a property municipally known as 69 Firelane 2 Road, Niagara-on-the-Lake, Ontario (the “Property”).

[2] The plaintiff alleges that Booth failed to close the purchase of the Property despite being provided with ample opportunity to do so. 368 submits that it was ready, willing, and able to close and that it has suffered damages as a result of Booth’s conduct.

Preliminary Matter

[3] This matter came before Justice Chalmers on June 29, 2021. His Honour scheduled the current hearing date (November 12, 2021) and ordered that this date is peremptory on the defendant (Booth). Beyond marking the matter as peremptory against Booth, he specifically cautioned Booth to ensure that any lawyer he may retain for the motion would be available on this date “because there will be no further adjournments of the motion” at Booth’s request. His Honour went on to establish a timetable for exchange of materials and examinations.

[4] A lawyer, Mr. Budgell, appeared briefly on the Zoom call which was convened for the hearing of this motion. Mr. Budgell explained that he had been contacted very recently by Booth, that he was aware of the peremptory order of Justice Chalmers, and that, in effect, he advised Booth that unless the matter was adjourned, he would not be in a position to be retained and to represent him in this matter. Apparently, nonetheless, Mr. Budgell was sent an email link to the hearing and, quite appropriately as an officer of the court, felt that he should attend and advise the court of the circumstances.

[5] I advised the parties and counsel that I was not inclined to adjourn the hearing given Justice Chalmers’ clear and precise warning and Order, but that I would hear from Booth in that regard. Booth made submissions, generally about his lack of income at relevant points and his consequent inability to conclude a retainer agreement with Mr. Budgell (or another potential lawyer before Mr. Budgell). In my view, these submissions fell well short of what would be required to grant an adjournment in the face of the clear and precise endorsement of Justice Chalmers, and so I ordered that the matter proceed before me. In the circumstances, I released Mr. Budgell from further participation (with the thanks of the court for his attendance).

Liability Issue

[6] I then heard submissions on the motion before me.

[7] In the absence of any evidence or written argument before me from Booth, I am compelled to proceed on the basis of the materials provided by 368. Those materials are in any event clear and concise.

[8] They describe a scenario in which Booth, despite having ample opportunity to do so and despite having been granted two extensions of the original closing date (from January 31, 2020 to February 14, 2020 and then again from February 14, 2020 to February 28, 2020), failed to close the purchase of the Property in circumstances in which 368 was ready and able to do so.

[9] Given that evidence, and in the absence of responding evidence from Booth, I allowed Booth to make submissions based on the material before me as to why I should not grant judgment in favour of 368. Booth’s submissions relied on matters not before me in evidence and, in any event, were answered by 368.

[10] Specifically, Booth made two submissions. First, he said that on February 28, 2020 (the closing date based on the second extension) he was ready to provide a cheque in the amount of $5,000.00. According to Booth, this $5,000.00 represented a supplementary deposit amount that the parties had discussed in connection with a potential third extension of the closing date.

[11] There are two problems with this submission. First, there is nothing in the evidence before me to confirm that Booth was or would have been able to tender a $5,000.00 cheque on the day in question. Second, and more importantly, the evidence does not demonstrate that there was an agreement between the parties to the effect that $5,000.00, if tendered by Booth, would have led to a further extension. The evidence in fact showed that while at one point $5,000.00 had been suggested, there had then been negotiations based on Booth adding $25,000.00 to the deposit and then other amounts. This falls well short of establishing a clear agreement as to the amount that would have been required for another extension by the time of closing.

[12] Booth’s second submission really related more to 368’s mitigation efforts than to the liability issues, but did include a passing suggestion that there was an issue about 368’s clear title to the private road on the Property. Again, there is no evidence before me on this issue. In any event, this submission is addressed and explained in 368’s factum. Briefly, it appears to relate to an erroneous suggestion by the ultimate purchaser (i.e., the purchaser to whom 368 sold the Property after Booth’s failure to close). This suggestion was shown to be inaccurate and the ultimate purchaser ended up paying an additional $15,000.00 for the modest delay in closing caused by her erroneous suggestion about the title to the private road.

[13] Given the clear materials provided by 368, the absence of materials from Booth, and the fact that Booth’s submissions (which I allowed him to make notwithstanding the absence of materials from him) were not persuasive, I conclude that judgment should issue in favour of the plaintiff.

Damages

[14] That still leaves the issue of damages. In its factum, 368 sets out a list of items and the corresponding quantum of damages that it claims in relation to each item.

[15] The list consists of 10 items. Items 3-10 are specific costs necessarily incurred by 368 as a result of Booth’s failure to close. I have no difficulty awarding judgment in those amounts.

[16] The first two items require additional consideration.

[17] The first of those two items is a claim for $50,000.00, being the difference in the purchase price to be paid by Booth and the purchase price paid by the ultimate purchaser.

[18] When Booth failed to close, 368 immediately re-listed the property and very quickly entered into a deal with the ultimate purchaser, Grieco. The original purchase price to which Grieco agreed was in fact modestly higher than the price Booth had agreed to pay ($1,295,000.00 as compared to $1,200,000.00). However, Greico’s inspection revealed a number of deficiencies and so her purchase price was renegotiated to $1,150,000.00. The only evidence before me is that the amended purchase price was reasonable and reasonably necessary to preserve the Grieco transaction and, in my view, there is nothing to suggest that 368 acted in a way that was anything other than reasonable and expeditious to re-sell the Property and mitigate its damages. Accordingly, I award the difference in purchase price, being $50,000.00.

[19] The second item gave me more difficulty. That is, 368 also claims $42,000.00 for the interest payments it would have received pursuant to the vendor-take-back mortgage (the “VTB”) to which Booth agreed as part of the second extension of the closing of his purchase of the Property.

[20] In support of this claim, 368 points to and relies upon Justice Ground’s decision in Watchfield Developments Inc. v. Oxford Elgin Developments Ltd., [1992] O.J. No. 1604 (Gen. Div.). There, His Honour awarded damages to the vendor arising from the breach of an agreement of purchase and sale, including the difference between interest on a vendor-take-back mortgage and the interest which the vendor would have been paid on a hypothetical mortgage.

[21] 368 also relies on the more recent decision of Justice McCarthy in Prowse et al v. Noroozi, 2021 ONSC 3099. In that case, the vendors successfully moved for summary judgment against a purchaser relative to a breached agreement of purchase and sale. The claim included a claim for loss of anticipated interest on a vendor-take-back mortgage. In assessing the vendor’s damages, His Honour wrote, at para. 52:

There is no genuine issue that the Plaintiffs are entitled to claim the foregone interest on the VTB. While not an out of pocket expense per se, it would be a recoverable loss to the Plaintiffs in the form of expectation damages.

[22] It is noteworthy, however, that in the circumstances before him, Justice McCarthy did not include the vendor-take-back interest in the ultimate damages award. His Honour justified this exclusion on the basis that it was necessary to avoid double recovery relative to the vendor’s expenses for bridge financing and carrying costs.

[23] I raised a similar concern about double recovery with 368’s counsel. That is, given that the Grieco transaction was originally scheduled to close on April 16, 2020, and in fact closed on June 4, 2020, and given that 368’s claim for the foregone VTB interest covers 8 months (from February 28, 2020 to October 28, 2020), I was concerned that interest payments should not be allowed past the closing date of the Grieco transaction (or at least should be reduced substantially past that date to reflect only modest foregone interest potentially arising from the $50,000.00 difference in purchase price).

[24] 368’s counsel fairly pointed out that the agreement between the parties concerning the VTB forming a part of the second extension of the closing date contemplated pre-payment of the first six months of interest under the VTB. As such, I am persuaded that this amount is payable (and should be calculated in accordance with the monthly amounts set out in exhibit 34 to the affidavit of Mr. Bernstein filed with 368’s materials on the motion). To avoid double recovery, I decline to award the other two months of interest.

Conclusion

[25] In conclusion, then, I grant judgment in favour of 368 in the amounts set out in the chart in paragraph 38 of 368’s factum, except that 368 is entitled to six month’s unpaid interest on the VTB rather than eight months (so $31,500.00 rather than $42,000.00). 368 is also entitled to Booth’s forfeited deposit of $25,000.00, which should be offset against the amounts that I have found to be owing.

[26] 368 is also entitled to its costs of the motion and the action. In that regard, the parties should attempt to agree on a figure for costs. If they cannot agree, 368 should provide me with a costs outline, not to exceed 3 pages, copied to Ali Booth by December 10, 2021. Ali Booth may provide a written response, also not to exceed 3 pages, within 10 days after that (December 20, 2021), delivered to my assistant at: lorie.waltenbury@ontario.ca.

W.D Black J.

Date: November 29, 2021