COURT FILE NO.: CV-20-00652424-0000
DATE: 20210129
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
REPUBLIC DEVELOPMENTS INC.
Applicant
– and –
MUHAMMAD MOEEN BUTT and ASMA MOEEN BUTT
Respondents
Matthew B. Lerner and Katherine R. Costin, for the Applicant
Taheratul Haque and Obaidul Hoque, for the Respondents
HEARD at Toronto: January 28, 2021
APPLICATION UNDER THE RULES OF CIVIL PROCEDURE, R.R.O. 1990, REG. 194 S.14.05(3)(D), (E) and (H)
REVISED AND AMENDED Reasons for judgment
S.F. Dunphy J.
[1] On October 4, 2019, the respondent Mr. Butt delivered a fully executed agreement of purchase and sale to the applicant’s agent, Mr. Morris. The applicant paid the required deposit into trust the next business day and the parties began to take initial steps to prepare for closing such as exchanging information about lawyers, obtaining photo identification in respect of the trust account, etc. On October 9, 2019, the respondents communicated a clear case of seller’s remorse and asked if there was a way to get out of the agreement. The applicant elected to hold them to their bargain.
[2] At its core, this application presents two discrete questions to be answered. First, was there an agreement between the applicant and the respondents regarding the sale of the subject property and second is this an appropriate case for the remedy of specific performance.
[3] My answer to both questions is yes. I am fully satisfied on the evidence before me that there was and is a binding agreement of purchase and sale in respect of the subject land and this is an appropriate case for specific performance.
Factual background
[4] The facts in this case are simple and straightforward notwithstanding the efforts of the respondents to throw a great number of issues both large and small at the wall to see which ones might stick.
[5] The applicant in this case is Republic Developments Inc., a company formerly known as Republic Management Inc. (hereafter, “Republic”). Republic’s President is Mr. Matt Young and, at the relevant times, Republic had engaged the services of a real estate broker by the name of Mr. Sean Morris along with his associate Mr. Sharma (the two were then associated with Century 21 – Mr. Morris is no longer associated with Century 21 a fact of no relevance to this case).
[6] The respondents in this case are Mr. Muhammed Moeen Butt and his spouse Asma Moeen Butt. The Butts are currently the owners of a property located at 663 Danforth Avenue in Scarborough.
[7] In the first half of 2019, Republic began working on a development concept involving some or all of the block of property on which 663 Danforth is situated. Mr. Morris and Mr. Sharma were hired to help Republic assemble the necessary land to advance this concept. The land in question is located near the Scarborough GO Transit station. Republic’s concept involved a mixed-use residential/commercial real estate development.
[8] In July 2019, Republic entered into the first of what would become several agreements of purchase and sale to buy a portion of the land targeted for this development concept. The parcel in question was located at 641 Danforth Road. After securing this agreement, Mr. Sharma and Mr. Morris were tasked by Republic with continuing negotiations with the owners of 13 neighboring properties needed for this plan. One of those was 663 Danforth Road.
[9] Mr. Morris called upon Mr. Butt at his place of business at 663 Danforth Road in mid-August to discuss the matter of a possible sale. There are a number of points where the evidence of Mr. Butt and Mr. Morris differ about who said what to whom during the course of the following weeks culminating in Mr. Butt giving a copy of an agreement of purchase and sale executed by himself and his wife in the afternoon of October 4, 2019. I do not propose to examine these differences in any detail – none of them are material to the essential question before me which is the existence of a contract between the parties. Among the points of disagreement are Mr. Morris’ evidence that he discussed the prospect of acting as a joint agent (i.e. for buyer and seller). Mr. Butt denies this conversation occurred but there is no suggestion by either that an agreement was reached between them. Mr. Morris was at all material times acting as Republic’s agent and only as Republic’s agent.
[10] As noted, Mr. and Mrs. Butt were joint owners of the subject property, having purchased it in 2016. Mr. Butt operated a used car dealership on the lot.
[11] Mr. Morris sounded out Mr. Butt as to whether he might be interested in selling the property. Mr. Butt denies having told Mr. Morris that he had information from other agents about the property being worth at least $1.1 million at the time. Nothing turns on how coy Mr. Butt was or was not on his willingness to sell the property. It turns out that the Butts had actually listed the property for sale the prior year at a price of $1.5 million but withdrew the listing in December 2018 when it failed to generate any buying interest at that price so it would seem that a sale of the property was not exactly a prospect distant in their thoughts.
[12] Mr. Morris brought an offer from Republic to Mr. Butt on August 21, 2019 proposing a purchase price of $1.3 million with a long closing and a significant vendor take-back mortgage. This offer was not accepted.
[13] On August 27, 2019, Mr. Butt sent a text message to Mr. Morris asking him to call his “friend imtiaz”. The purpose of the call was “to explain me about how the deal how its gonna work”. Imtiaz was a lawyer acquaintance of Mr. Butt.
[14] As the Butt’s did not have their own agent, Mr. Morris provided them with a standard-form “Working with a Commercial Realtor” form on August 29, 2019 which was duly signed by both. This brief, plain English document explains the difference between an agent’s client and a customer. In signing this agreement, both Mr. and Mrs. Butt acknowledged that Century 21 “is not representing my interests”.
[15] Mr. Morris returned on August 30, 2019. There is further dispute between Mr. Morris and Mr. Butt about who said what to whom. Did Mr. Butt suggest that he would be willing to accept $1.4 million (as Mr. Morris says) or did Mr. Morris merely tell him that he could get him an offer at that level? The answer to that question is not material although the contemporary documents, including a text message from Mr. Butt to Mr. Morris on September 10, 2019 strongly suggest that Mr. Morris’ account is the accurate one. At all events, no agreement emerged that day, but the door was not closed to further discussions.
[16] On September 17, 2019, Mr. Morris returned to Mr. Butt with a second offer. This one was for a purchase price of $1.4 million without a vendor take-back mortgage but with a January 2022 closing date. This second offer was on the OREA standard form and contained in paragraph 1 an irrevocability clause pursuant to which the offer “shall be irrevocable by Buyer until 6:00 p.m. or the 20 day of September 2019, after which time, if not accepted, this offer shall be null and void and the deposit shall be returned to Buyer in full without interest”. This second offer bore the same August 21, 2019 date as the first.
[17] This second offer was the object of some negotiation and discussion between Mr Butt and Mr. Morris. At 1:55pm, Mr. Butt was asked by Mr. Morris “what’s your final decision? Can you call me” to which Mr. Butt responded “1.4 million and closin in one year. That is final.”
[18] Following the receipt of this email, Mr. Morris prepared and presented a third form of offer to Mr. Butt. As before, this offer had a $1.4 million purchase price and an irrevocability clause expiring at 6:00 p.m. on September 20, 2019. However, the closing date was brought forward to February 1, 2021 instead of January 2022.
[19] Nobody was present for the discussions between Mr. and Mrs. Butt. Their affidavits suggest a degree of dissension between them. This may be so or it may be an instance of good cop, bad cop negotiating tactics. Mrs. Butt suggests in her affidavit that before seeing the third offer on September 18, 2019 that she “did not know that Muhammad was interested in selling the property” and that she was “completely opposed to the idea”. That evidence on her part is singularly implausible given her execution of the “Working with a Commercial Realtor” form three weeks beforehand in connection with the first offer and the listing of the property for sale on MLS the prior year. How sincere her alleged opposition to the deal is or was is not necessary for me to decide. Suffice it to say that I do not accept her evidence on the point at face value.
[20] Mrs. Butt’s evidence is that she signed the documents on September 20, 2019 “while I had some in-laws in the house” because she “felt very pressured” (by her husband) to sign and “did not want to cause a bigger fight”. She said that she signed “some of the documents of the Offer” but “intentionally did not sign some parts of the Offer documents “because I did not agree or want to sell the Property”. Once again, this proposition is singularly implausible given her actions described above and given the fact that she signed each and every place there was an “x” marked on the document indicating where a signature was required. Whatever her subjective intention in signing the documents, she signed what she signed and does not claim that she even told her husband at the time of her intentionally incomplete (on her evidence) set of signatures. I shall discuss below the effect of what she did sign.
[21] What remained unsigned by Mrs. Butt on the third (and last) offer? She did not sign the last section of paragraph 28 of the OREA form entitled “successors and assigns”. The first part of paragraph 28 is signed by the buyer and indicated “the heirs, executors, administrators, successor and assigns of the undersigned are bound by the terms herein”. This part is signed by Mr. Young on behalf of Republic as buyer. The second part reads “I, the Undersigned Seller, agree to the above offer” and is signed by Mr. Butt and Mrs. Butt, both signatures bearing the date of September 20, 2019. The third section of paragraph 28 is entitled “Spousal Consent” and is not filled in. The last section is entitled “Confirmation of Acceptance” and has space for the signature of “Seller or Buyer””. This section is signed by Mr. Butt alone and is dated 6:00 p.m. on September 20, 2019. Mrs. Butt did not sign this nor did Mr. Young.
[22] Below section 28 is a part of the document entitled “Acknowledgement” where both Mr. and Mrs. Butt signed underneath this statement, their signatures both being dated September 20, 2019 (Mrs. Butt’s signature being beside a small “x”): “I acknowledge receipt of my signed copy of this accepted Agreement of Purchase and Sale and I authorize the Brokerage to forward a copy to my lawyer”.
[23] Mrs. Butt was cross-examined. Her examination was heavily interrupted by counsel but, despite the interruptions, she confirmed that it was she who signed her name where her name appears and it was she who placed her initials on the document attached to Mr. Morris’ affidavit and alleged to be the binding agreement of purchase and sale upon which this entire application turns. She admitted to doing so on September 20, 2019, although she said that she took the document into her bedroom and added some of the initials later – although possibly later on the 20th.
[24] The respondents’ evidence is that this offer was signed by them after 6:00 p.m. on September 20, 2019. Whether it was signed before or after 6:00 p.m. that day, there is no dispute that no communication of unequivocal acceptance of the offer of any kind was made that day or at any time until October 4, 2019. Whether before or after 6:00 p.m. on that day, the evidence of the respondents is that both spouses signed the agreement in agreement and initialed each page thereof. I shall refer to the fate of “Schedule B” to the agreement below.
[25] As indicated, no communication of actual acceptance of the offer was made by Mr. Butt or Mrs. Butt to the applicant on September 20, 2019, whether before or after 6:00 p.m. It is clear that Republic was no longer bound by its offer and would not be bound unless and until it signified its intention to waive its right to rely upon the revocation of its offer when the deadline for acceptance passed.
[26] What happened next? On September 23, 2019, Mr. Butt asked Mr. Morris some questions posed by his lawyer regarding the due diligence documents obligations of the seller. Mr. Morris gave Mr. Butt the contact information for the Buyer’s lawyer the next day. On September 30, 2019, Mr. Butt asked Mr. Morris to send “the complete set agreement of purchase and sale” to his lawyer Mr. Malik for review. This was done. On cross-examination, Mr. Butt agreed that he consulted other lawyers as well, naming two others. One of those lawyers spoke to Mr. Morris regarding the question of the due diligence documents to be provided by the seller to the buyer as referenced in the agreement.
[27] On October 4, 2019, Mr. Morris came to visit Mr. Butt at his office on the property, after arranging to do so by text message. Mr. Morris agrees that Mr. Butt added the time of signature (“6:00 p.m.”) to the “Confirmation of Acceptance” portion of paragraph 28 of the offer. Both Mr. Butt and Mr. Morris agree that Mr. Butt left that meeting with a fully executed copy of the agreement (in writing “fully executed”, I refer to the document as it appears in Exhibit “D” to Mr. Morris’ affidavit save and except Schedule B that I shall reference below).
[28] It is here that a critical conflict between the evidence of Mr. Butt and Mr. Morris arises. These were the only two people present for their meeting. Mr. Butt says that he Mr. Morris took the agreement with him on the understanding that he would do nothing with it until advised because Mrs. Butt was in disagreement. Mr. Morris denies ever being told that and denies that any condition whatsoever was attached to his reception of this document.
[29] There is no question that Mr. Butt’s evidence is the product of wishful thinking or outright deliberate fabrication. I can conclude this with confidence by examining the actions of both men after the meeting.
[30] In Mr. Morris’ case, he acted immediately and fully consistent with having received an executed agreement with the expectation that he would act upon it. He advised his client, Mr. Young, that evening that he had received it and sent copies to him. He also provided him with other information such as rents received on part of the property, and instructions on providing the deposit and the signature of Schedule B. Half an hour later he acknowledged in a further email to his client that he would have to get the sellers to agree that the buyer’s due diligence period would run from the date of signature given the delay. Half an hour later. Mr. Morris sent Mr. Butt an email indicating “thanks for all your diligence. Agreement attached”. He further advised that the draft for the deposit was to be deposited Monday and that “I will be adding a clause to our trust agreement for Schedule B stating that the 120 days for due diligence starts form the day the agreement receipt has been acknowledged by the Buyer and the day the $25k is deposited in trust for you (Monday)”. The email attached a copy of Schedule B.
[31] From this and from the evidence regarding the time of Mr. Young’s electronic signature on Schedule B, there can be no doubt that Schedule B was added to the agreement after October 4, 2019 – the precise date is not material. There is nothing unusual about addenda and schedules being added to purchase agreements after the date of execution to alter the original agreement.
[32] Nothing in any of Mr. Butt’s correspondence with Mr. Young or Mr. Butt suggests in any way that there was a condition attached to his receipt of the executed documents. The fact that Schedule B was obviously received and initialed by the respondents after October 4, 2019 confirms this.
[33] In Mr. Butt’s case, he corresponded with Mr. Morris on October 5, 2019 asking about confirmation regarding a $10,000 commission rebate separately agreed between Mr. Butt and Mr. Morris. On October 8, 2019, he provided copies of the driver’s licenses of both sellers at the request of Mr. Morris after being advised that this was a requirement of FINTRAC in respect of the deposit funds. He also provided the contact information for the lawyer he was using “for the sale”.
[34] At no time prior to October 9, 2019 did Mr. Butt indicate in any way that there was anything but a concluded agreement between the parties. In fact, he never made such a claim at any time in 2019 or until this litigation commenced more than a year later.
[35] On October 9, 2019, Mr. Butt advised Mr. Morris that his wife was “unhappy” and asked if there was “any way to back [out] from this deal”. Noteworthy in this email is the lack of any reference to an agreement not to act upon the signed documents taken away by Mr. Morris on October 4, 2019.
[36] Republic had not been inactive in pursuing the project during this time. On October 9, 2019, three further agreements of purchase and sale were signed for properties in the block that Republic was seeking to develop.
[37] I shall forego a detailed recitation of the subsequent events. Mr. Butt made what I regard as a rather crude attempt to threaten Mr. Morris with a view to securing his assistance in getting out of the deal. He also made equally ham-fisted attempts to secure his cooperation in that same endeavour with promises of future business opportunities. None of that is particularly relevant to the issues I must determine. As little inclined as I am to delve into such sordid and largely irrelevant examples of subsequent conduct, I must at least remark that this conduct is in no way corroborative of the existence of a condition binding upon Mr. Morris associated with the receipt of the executed document on October 4, 2019. Not a breath of a word of such a condition was ever suggested by the respondents before this litigation was commenced more than a year later.
[38] The remainder of the chronology can be swiftly summarized as follows:
a. Republic continued to comply with all of its obligations under the agreement as signed and waived conditions in its favour as they occurred;
b. The respondents complied with none of their pre-closing obligations under the agreement as signed;
c. Republic noted the repudiation of their obligations by the respondents in a letter dated January 16, 2020 but also noted their refusal to accept that repudiation;
d. The respondents, through their counsel, acknowledged their repudiation of the agreement by email dated August 4, 2020; and
e. This proceeding was ultimately commenced on December 2, 2020 with delay between October 28, 2020 (when the applicant’s affidavits were sworn) and December 2, 2020 being accounted for by the attempt of the applicant to have the matter heard on the Commercial List and the delay in that request being ruled upon due to the pandemic.
Issues to be decided
[39] The following are the principal questions that must be decided on this Application:
(a) Did a binding agreement of purchase and sale regarding the land at 663 Danforth Road arise between the parties at any time?
(b) If so, is specific performance an appropriate remedy?
(c) Is there any basis to consider the claim of rescission advanced by the respondents in their factum?
(d) Is there any reason to order a trial of an issue or to convert this application into an action?
Discussion and analysis
(a) Did a binding agreement of purchase and sale regarding the land at 663 Danforth Road arise between the parties at any time?
[40] In my view, there can be no question on this.
[41] Mr. Butt’s evidence was that he wanted to do this transaction at all material times. His enthusiastic support of it is evidenced by his signature and his affidavit evidence. He, however, was only one of two joint owners of the land and the agreement of both was required to conclude a valid and binding contract.
[42] Mrs. Butt’s evidence is that she succumbed to pressure from her co-tenant husband and a desire not to cause a scene in front of visiting relatives. That evidence is self-serving. There is no evidence at all that this alleged pressure was communicated to anyone in any material time frame. There was neither violence nor threat of violence. There was no threat of any other kind either. Her desire not to “cause a scene” – a nearly unverifiable allegation – is no basis to avoid a contract. Her evidence amounts to no more than an assertion that “I signed it, but I crossed my fingers behind my back and didn’t mean it”.
[43] Mrs. Butt is an adult woman. Although her counsel interrupted her cross-examination continually – and quite improperly – it is clear that she is no stranger to business transactions. She is co-owner of a home as well as this property at least. She contributes to her husband’s used car business. She has been involved in transactions financing her house purchase and this commercial property. Her English is not perfect, but it is certainly adequate. Nothing in the evidence permits me to conclude that she was under some incapacity still less that Republic or its agent Mr. Morris was aware of any of her unexpressed reservations. Indeed, there is no evidence that her husband was even aware at the time that she felt coerced into signing.
[44] Whether her evidence of alleged coercion is the product of ex post facto wishful thinking or fabrication I cannot and need not say. I can give no effect to it. She signed a document that said in plain English: “I agree to the above offer” and “I acknowledge receipt of a signed copy of this accepted Agreement of Purchase and Sale” [emphasis added]. The document was plainly intended to have legal effect. She understood the meaning of the words above her signature. There is no evidence whatsoever that she signed on the condition that her husband would not deliver the document until she approved delivery. The suggestion makes no sense at all.
[45] Mrs. Butt’s alleged subjective belief that her failure to sign the “Confirmation of Acceptance” clause invalidated her other signatures is utterly irrelevant even were I to accept as true her unverifiable assertions of her alleged contemporary belief about the effect of not signing that clause. The clause in question has no impact upon the agreement. She was never asked to sign it. By design, it might be signed by buyer or seller.
[46] The clause in question reads “Notwithstanding anything contained herein to the contrary, I confirm this Agreement with all changes both typed and written was fully accepted by all parties at 6:00 p.m. this 20 day of Sept 2019”. This clause is intended to confirm the binding nature of marginal and other additions, deletions and amendments that crop up in the course of negotiating and finalizing such agreements. None of that occurred here. Neither buyer nor seller made marginal amendments. The addition of this signature by Mr. Butt alone had no more effect upon the efficacy or completeness of the agreement reflected by the document than did the absence of signature by Mr. Young. The clause is and was irrelevant. The absence of Mrs. Butt’s signature to this clause in no way detracts from her express and unambiguous agreement to be bound by her signature above and below that clause.
[47] What effect is to be given to the deadline for acceptance of Republic’s offer contained in clause 1? In my view, this is a red herring.
[48] Republic’s offer was by its terms irrevocable prior to the stipulated time on September 20, 2019. Whether the respondents signed the offer before or after that stipulated time, there is no question that they did not signify their acceptance before that time. At 6:01 p.m. on September 20, 2019, Republic ceased to be bound by their offer (I express no view as to whether they could have expressly revoked the offer prior to that time and prior to acceptance – the issue does not arise here). That does not mean that the offer could not be accepted – it means that the offer could not be accepted unless Republic agreed to accept the seller’s acceptance of it. More plainly, acceptance of the offer by the sellers amounts to no more than a counter-offer, in this case with no change to the terms apart from time of acceptance. That counter-offer – itself containing no express time limits – became a binding agreement when Republic signified its acceptance of it. Whether I find that this occurred when Mr. Morris (Republic’s agent) accepted the signed documents from Mr. Butt on Friday afternoon (October 4, 2019) without expressing a requirement to confirm acceptance with his client (and I do so find) or whether I find that it occurred early in the morning of Monday October 7, 2019 when Mr. Young paid the deposit in trust to Century 21 as required by the agreement is a distinction without a difference. There was no intervening step taken by the respondents to withdraw their acceptance viewing it as I do as a counter-offer that was open for acceptance unless expressly withdrawn.
[49] What remains is clear and unambiguous offer and acceptance of a written contract with clear terms. That is how contracts are made.
[50] Finally, I turn to Schedule B appended to the end of the agreement and initialed by all parties. Schedule B was certainly amended after Mr. Morris received the signed agreement from Mr. Butt on October 4, 2019 to add the following provision: “It is agreed and understood between buyer and seller that the due diligence period starts when both parties have received an acknowledged copy of the agreement of purchase and sale”. Mr. Young added his initials to this amendment very early in the morning of Monday, October 7, 2019 (the same day the deposit was paid into trust by Republic as required by the agreement). Both sellers initialed the document but the date that they did so is not reliably recorded. Nothing turns on this detail. The agreement was complete with or without Schedule B at all events.
[51] I have no hesitation in concluding that the agreement found at Exhibit D to the Affidavit of Mr. Morris is a binding and valid agreement of purchase and sale regarding the property known as 663 Danforth Avenue, Toronto and I so find.
(b) If so, is specific performance an appropriate remedy?
[52] In this case it has been clear since January 2020 if not November 2019 that the respondents have no intention of complying with the agreement they freely entered into and that the applicant has been scrupulously performing its obligations and is ready willing and able to close on February 1, 2021 as required by the agreement. It is also clear that the applicant has consistently declined to accept the repudiation of the agreement by the respondents. In such cases, the innocent party seeking specific performance bears the onus of establishing that this equitable remedy is appropriate in the circumstances. The three criteria to be evaluated are (i) whether the property in question is unique such that a substitute is not readily available; (ii) whether damages are an adequate remedy; and (iii) whether the behaviour of the parties favours such an exercise of discretion.
(i) Uniqueness
[53] I am fully satisfied that the property in question is unique. Republic has been pursuing a development of the entire block of properties and set about trying to acquire them all. It matters not a whit that their precise plans for development have evolved and adapted as the land acquisition process gathered steam. The subject property stands athwart the entrance to the underground parking garage in the current development plan. The evidence of uniqueness is overwhelming. I recognize that I am not doing justice to the exhaustive and complete review of the case law undertaken by the applicant in its factum as these reasons are being released in a compressed time frame given the commercial exigencies involved. However, I have reviewed and been persuaded by that overview.
(ii) Adequacy of damages as a remedy
[54] In a certain sense, damages are always an adequate remedy if one looks only to the accounting side of the ledger: the courts can and do assess damages arising from all manner of breaches of contract or even torts. The adequacy of damages as a remedy goes beyond that mere accounting function. This property is and was a piece of a puzzle which the applicant has made numerous significant strides towards completing. The task of estimating the value of the completed project and assessing the contingencies standing in the way of that eventuality occurring is a necessarily complex and uncertain one. Further, there is no evidence whatsoever that the respondents are in any position to make good on such potentially large consequential damages. They refused to provide any material information regarding their means in cross-examination. Damages are clearly not an adequate remedy.
(iii) Behaviour of the parties
[55] The respondents suggested a number of grounds that, they submit, militate against granting the applicant the benefit of the equitable remedy of specific performance. I am unable to agree with any of these claims.
[56] It is suggested that the applicant delayed seeking the remedy in this case. I disagree. The applicant made clear its intention to proceed with the transaction in January 2020. It received no reply from the respondents until August 2020. Thereafter, the legal case was prepared and brought forward with reasonable speed and efficiency having regard to the current circumstances of a pandemic.
[57] The respondents suggest that the applicant comes to the court without clean hands, pointing to an application made to the City of Toronto for zoning changes over the block of land it seeks to develop (including the subject property). The applicant checked a box on the form indicating that it owned the properties in question. While I accept the applicant’s evidence that the box was checked through inadvertence, even the contrary case does not amount to unclean hands.
[58] There is no evidence of undue hardship to the respondents. While it is true that they have been operating a business on the site, there is no evidence before me as to how successful they have been in that business. Further, the respondents put the property up for sale in 2018 despite having their business operating then and have had more than a year to take steps to move their business to another location.
[59] By contrast, the applicant’s actions have consistently shown that it is ready, willing and able to close and that it has been the innocent victim of deliberate breaches of contract by the respondents.
[60] I have no hesitation in concluding that the applicant has satisfied all of the requirements for seeking the exercise of the court’s discretion to grant the remedy of specific performance.
(c) Is there any basis to consider the claim of rescission advanced by the respondents in their factum?
[61] I shall overlook for present purposes the failure of the respondents to make a formal claim for rescission by way of cross-application as opposed to a simple announcement contained in the waning paragraphs of a factum delivered on the eve of the hearing of an application scheduled a month beforehand. I am prepared to overlook these deficiencies only because on the merits it is clear that I can give no effect to the claim. Taken at its highest, this claim is devoid of merit even if properly advanced.
[62] The claim is said to be warranted by reason of negligent or fraudulent misrepresentation. I find the claim ridiculous on its face.
(d) Is there any reason to order a trial of an issue or to convert this application into an action?
[63] At the conclusion of oral argument, the respondents suggested that there were significant issues of credibility which warrant having these questions determined by way of a trial. I disagree.
[64] The suggestion was raised for the first time in oral argument and only at the end of it. No such suggestion was raised in Practice Court when the case timetable was established nor was it raised in the written arguments of either party.
[65] This litigation was conducted in a compressed timetable, but it was efficiently conducted nonetheless. All of the principal participants in any of the facts at issue provided affidavits and the affidavits were subjected to such cross-examination as the parties saw fit to conduct. I was not able to observe the proverbial whites of the deponent’s eyes, but I was given the benefit both of the scripted evidence of the deponents and of the unscripted results of cross-examination. I was also able to compare the evidence given by the witnesses in chief (i.e. their affidavits) to their evidence on cross-examination and – perhaps most significantly – to their contemporary actions and communications.
[66] I have not found any particular difficulty in seeing my way through the haze of conflicting evidence tendered by the parties. While I have not seen any particular reason to decide every single controversy raised by their evidence it, it was not for any incapacity to do so but because most of the questions about which the parties offered conflicting accounts from their witnesses were of only minor or tangential relevance. On critical points touching upon the meeting of the minds necessary to create a contract, I was completely satisfied with the state of the evidence before me. Viva voce testimony on top of the existing transcripts, affidavits and documentary evidence would add little to nothing of value.
[67] The time for objecting to proceeding by way of application is not at the close of argument on the application itself. The time for suggesting that a trial of an issue is needed to resolve disputed questions of fact about which credibility is an issue is not at the conclusion of argument either.
[68] The fact of the matter is that both parties pursued this case and presented it on the basis that I had all before me necessary to decide the case – in their favour. I have no hesitation in concluding that I do have what is needed to render a decision. The decision I am rendering necessarily entails rejection of at least part of the evidence of the respondents, a decision I am able to reach because that evidence is highly implausible by reference to contemporary actions of the parties and documents. If there were an explanation that might have impacted my views of that contemporary evidence, there was every opportunity to proffer it.
Disposition
[69] In conclusion, I find as follows:
a. The agreement of purchase and sale (Exhibit D to Mr. Morris’ affidavit) is a binding contract for the sale of land that remains in full force and effect;
b. The respondents have breached the agreement, but the applicants have not accepted the repudiation of it;
c. The applicants are entitled to an order of specific performance of the agreement; and
d. The applicants are entitled to their costs of this proceeding.
[70] I recognize that my conclusions will require further clarification in order to be transformed into a workable roadmap. The agreement is required to be closed on Monday, February 1, 2021 and this decision is being rendered only one business day before then. Unless the respondents have moved all of their personal property out of the building already (they have not), there is simply no practical prospect of closing actually occurring on Monday. This court is not in the habit of issuing orders that cannot possibly be complied with. The applicant is entitled to close on Monday but I recognize that this is a practical impossibility.
[71] It is my expectation that two or three weeks will be required to arrange a proper closing of this agreement. I am directing the parties to work out the form of an order for specific performance today and to present it to me – or their competing versions of it if need be – on Monday morning at 10:00 a.m. I have two other matters scheduled to start at that time (and another at 9:30 a.m.) but will find fifteen minutes at the opening for this purpose.
[72] The respondents may be assured that cooperating to produce a workable specific performance order in no way prejudices them from seeking a stay of my order pending appeal if they are so minded and I have produced written reasons – albeit brief ones given the volume of materials reviewed – in order to ensure that a full record is available without delay should that be their view.
[73] I am also directing that the applicant shall be entitled to set off from the purchase price payable at closing an amount in respect of the costs of this proceeding. Those costs have yet to be quantified nor the scale determined. Pending my decision on those two matters (amount and scale of costs), the applicant is directed to provide an estimate of its full indemnity costs to me on Monday and I shall determine at that time the amount that shall be provisionally paid into the applicant’s counsel’s trust account from the purchase price at closing, such amount to be paid to the applicant or the respondent as I shall subsequently direct once I have made my decision on costs.
[74] I shall entertain written submissions from the parties regarding scale and amount of costs limited to seven pages each exclusive of a costs outline and a hyperlinked list of authorities. The applicant’s submissions shall be delivered within ten days of today and the respondents’ response shall be delivered one week later. Submissions in writing shall be submitted to me via my assistant.
[75] Orders accordingly.
S.F. Dunphy J.
Date: January 29, 2021
REVISION AND ADDENDUM TO REASONS
[1] The foregoing reasons were issued the morning after argument was completed in light of the time pressures associated with the completion of the underlying transaction. In issuing these reasons in such a short time frame, I asked the parties to confer and point out to me any clerical errors that may have crept into the text. They have done so and I have incorporated all of the changes they kindly pointed out to me in the text of this revised version of those reasons. The changes made were purely clerical in nature.
[2] There was one substantive error that crept into my reasons that I wish to address. My reasons criticized the respondents for their failure to suggest prior to the close of the argument that a trial of an issue ought to be ordered for some or all of the issues raised on the application. That criticism was unfair, although I did not then know it. The respondents did make that suggestion to Myers J. in Practice Court and he made a direction at that time that the matter was best addressed by the motions judge hearing the application.
[3] While I maintain my ruling that a trial of an issue is not required in this case and that the matters raised can and should be appropriately dealt with as I have done, I cannot and do not include in my reasons for so ruling any suggestion of fault directed at the respondents for failure to raise that question earlier.
[4] I wish once again to congratulate the parties on their able presentation of the issues in a compressed time format with efficiency and courtesy.
February 5, 2021
S.F. Dunphy, J.
COURT FILE NO.: CV-20-00652424-0000
DATE: 20210129
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
REPUBLIC DEVELOPMENTS INC.
Applicant
– and –
MUHAMMAD MOEEN BUTT and ASMA MOEEN BUTT
Respondents
REVISED AND AMENDED REASONS FOR JUDGMENT
S.F. Dunphy J.
Released: February 5, 2021