COURT FILE NO.: CV-19-00625002-0000
DATE: 20211122
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
TRIBUTE (GRANDVIEW) LIMITED
Plaintiff
- and -
CHAI LI
Defendant
Ranjan Das and Sarah Berhane for the Plaintiff
HEARD: November 22, 2021
PERELL, J.
REASONS FOR DECISION
[1] This is a default judgment in an action about an abortive real estate transaction. There is also a motion before the court to amend the damages claim in the Plaintiff’s Statement of Claim. The defendant is not prejudiced by the amendment and the motion to amend is granted.
[2] The Plaintiff, Tribute (Grandview) Limited, entered into an agreement of purchase and sale with the Defendant Chai Li.
[3] Mr. Li failed to close the transaction. Tribute sued for breach of contract, and Mr. Li delivered a Statement of Defence and Counterclaim.
[4] By endorsements dated November 2 and 12, 2021, Justice Brown struck Mr. Li’s pleadings. He was noted in default. As a result, what was scheduled to be a two-day trial was converted to a motion for a default judgment and damages assessment to be held on November 22, 2021.
[5] The factual background to this default judgment motion and assessment of damages is set out below.
[6] The facts are taken from the Amended Statement of Claim and the affidavits of: (a) Jeff Morrison dated September 24, 2021; (b) Mary Liolios dated September 24, 2021; and (c) William Ly dated September 24, 2021.
a. Mr. Morrison is a Tribute sales representative. Ms. Liolios is the Vice President of Sales and Marketing with Tribute. Mr. Ly is an appraiser accredited by the AIC Canadian Residential Appraisal Program and a member of Acuity Professional Appraisals.
[7] The factual background is as follows:
a. Tribute is the developer of a residential community in Oshawa, Ontario, comprised of over 100 homes, known as the “Park Ridge” community.
b. Mr. Li is an individual residing in the City of Richmond Hill, Ontario.
c. On February 25, 2017, Mr. Li signed an Agreement of Purchase and Sale to purchase Lot 119, Phase 2, in the Park Ridge community, Model: The Ridgewood 00-D GV401100D, municipally known as 1808 Douglas Langtree Drive, Oshawa, Ontario. The purchase price was $959,990 subject to adjustments.
d. The transaction was scheduled to close on August 29, 2018.
e. Pursuant to Schedule “DE” of the agreement, Mr. Li was required to pay a deposit of $95,000 in several installments. He paid the deposit in full.
f. On March 4, 2017, at Mr. Li’s request, the parties signed an amendment to the agreement changing the lot Mr. Li was purchasing to Lot 117.
g. On October 27, 2017, Mr. Li selected upgrades and modifications pursuant to a change order. The total cost of the upgrades was $8,349, exclusive of taxes. Tribute paid Mr. Li a matching $8,329 as an incentive towards the cost of the upgrades.
h. Between June and August of 2018, Tribute emailed Mr. Li to schedule the framing walk-through and pre-delivery inspection of the property, as well as to request the contact information of Mr. Li’s solicitor to facilitate the closing of the transaction. Mr. Li did not respond and did not attend the walk-though or pre-delivery inspection of the property.
i. The balance due on the closing, after adjustments, was $866,713.49.
j. Sections 20(a) and 31(a) of the parties’ agreement provides that the tender documents can be delivered or sent via email addressed to the purchaser(s) or their solicitor at their last known e-mail address. Section 30 of the agreement states that, “the Purchaser consents to the use, provision and acceptance of information and documents in an electronic format”. On the Closing Date, Tribute tendered the closing documents on Mr. Li by letter from Arthur Shapero of Owens Wright LLP (lawyers for Tribute). The link gave Mr. Li access to the documents online.
k. Mr. Li did not close and on August 29, 2018, Tribute’s lawyers sent a forbearance letter to him. The letter advised, among other things, that without prejudice to Tribute’s rights under the agreement, Tribute was “willing to forbear from enforcing its rights under the agreement on a day-to-day basis, in its sole and absolute discretion, until September 5, 2018”. Mr. Li thus had an opportunity to rectify his default.
l. On August 31, 2018, Leon Li of Cambridge LLP, Mr. Li’s lawyer, emailed Tribute alleging that Tribute engaged in a number of “corruptions” and misrepresentations in the transaction. Mr. Li thus refused to close the transaction.
m. On September 7, 2018, Tribute sent a termination letter to Mr. Li by email and regular mail. The letter advised, among other things, that the agreement was terminated effective the same day, without prejudice to Tribute’s rights to, among other things, claim damages, costs, expenses, interest and losses suffered as a result of Mr. Li’s default.
n. Tribute listed the Property for re-sale in September 2018.
o. On or about October 27, 2019, the Property was sold for $744,000. The total commission paid on the re-sale of the Property was $19,875.
p. The closing date of the re-sale of the property was December 19, 2019, and the balance due was $735,365.99.
q. According to the retrospective appraisal conducted by William Ly of Acuity Professional Appraisals, the fair market value of the property as of the October 27, 2019 (the date it was re-sold) was $744,000.
r. Pursuant to Section 3(e) of Schedule “C” of the agreement, Tribute is entitled to charge a 15% administration fee on the costs and expenses incurred due to a breach of the agreement. In the immediate case, the administrative fee is $3,715.07.
[8] Tribute has proven the breach of contract and it has proven its claim for damages. The breakdown of the claim for damages is as follows:
Debit
Credit
Original Purchase Price
$959,990
Deposits
$95,000
Interest
$118,264.08
Termination fee
$650.00
Property tax 2018
$619.81
Property tax 2019
$1,800.48
Hydro
$434.55
Gas
$889.04
Landscaping
$418.10
Cleaning
$90.40
Insurance
$1,764.74
Resale
$744,000
Commission on resale
$18,100
Administrative Fee
$3,715.07
TOTAL
$1,106,736.27
$839.000
DAMAGES (Debit – Credit)
$267,736.27
[9] Mr. Li has no defence. Tribute is entitled to a default judgment.
[10] Tribute has proven its damages. The onus of proving a failure to mitigate is on the party that breaches the contract, and given that there is no defence, it has not been proven that there was a failure to mitigate. Moreover, the evidence provided by Tribute proves that there was no failure to mitigate. Further, there is no counterclaim; it has been struck.
[11] Accordingly, Tribute shall have judgment for $267,736.27 plus costs which I assess and grant on a partial indemnity basis of $28,151.09, all inclusive.
[12] Judgment accordingly.
Perell, J.
Released: November 22, 2021
COURT FILE NO.: CV-19-00625002-0000
DATE: 20211122
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
TRIBUTE (GRANDVIEW) LIMITED
Plaintiff
- and -
CHAO LI
Defendant
REASONS FOR DECISION
PERELL J.
Released: November 22, 2021