ONTARIO SUPERIOR COURT OF JUSTICE
COURT FILE NO.: CV-21-29880
DATE: 20211207
BETWEEN:
Yan Tang & Fang Cheng Bao Plaintiffs
– and –
Rong Rong & Jin Meng Defendants
COUNSEL:
Antoine d’Ailly, for the Plaintiffs
Samuel M. Atkin, for the Defendants
HEARD: September 21, 2021
ruling on motion
Hebner J.
[1] This case is about an agreement to purchase the property located at 4670 Riverside Drive East in Windsor, Ontario. The plaintiffs are the purchasers of the subject property, and the defendants are the vendors. The agreement of purchase and sale is dated February 12, 2021. The agreement was not completed.
[2] The plaintiffs commenced this action on April 8, 2021, seeking specific performance of the agreement of purchase and sale. This is the plaintiffs’ motion for summary judgment and the defendants’ cross motion, also for summary judgment. All parties agree that this is an appropriate case for a summary judgment motion.
Background Facts
[3] The subject property is located in Windsor along the Detroit River. Properties with frontage on the Detroit River are highly sought in Windsor. This particular property is directly across from Belle Isle Park; is within steps of the peace fountain; and is adjacent to Reaume Park and the Coventry Gardens.
[4] The plaintiff, Yan Tang, signed an agreement to purchase the subject property from the defendants on February 12, 2021. The purchase price was $1,090,000. The required deposit was $20,000. The purchase was originally scheduled to close on February 26, 2021. The purchase was conditional on the defendants obtaining a mutual release from a previous agreement. That release was secured on February 17, 2021, at which time the purchase agreement between the parties was firmed.
[5] The agreement was amended on March 9, 2021 to add Yan Tang’s husband, Fang Cheng Bao, as a purchaser and to amend the closing date to March 31, 2021.
[6] The plaintiffs then entered into an agreement of purchase and sale to sell their home, located at 438 Flora Avenue in Windsor, for the sale price of $710,276. That sale was to close on May 21, 2021.
[7] The plaintiffs secured financing for their purchase through the Royal Bank of Canada (“RBC”) by way of a mortgage and bridge financing. The mortgage was in the amount of $708,499. The bridge financing was for $381,500.
[8] The plaintiffs’ real estate lawyer was Mr. Antoine d’Ailly, and his assistant was Oula Al-Khouri. The defendants’ real estate lawyer was Mr. Floro Culmone, and his assistant was Michelle Moran.
[9] The closing date of the plaintiffs’ purchase, March 31, 2021, was, of course, in the midst of the COVID-19 global pandemic. Individuals were discouraged from attending the bank. Money transfers were completed remotely.
The Agreement
[10] The agreement of purchase and sale contained the following clauses:
COMPLETION DATE: This agreement shall be by completed by no later than 6:00 p.m. on the 26 day of February 2021.
TIME LIMITS: Time shall in all respects be of the essence hereof provided that the time for doing or completing of any matter provided for herein may be extended or abridged by an agreement in writing signed by Seller and Buyer or by their respective lawyers who may be specifically authorized in that regard.
TENDER: Any tender of documents or money hereunder may be made upon Seller or Buyer or their respective lawyers on the day set for completion. Money shall be tendered with funds drawn on a lawyer’s trust account in the form of a bank draft, certified cheque or wire transfer using the Large Value Transfer System.
[11] Schedule A to the agreement of purchase and sale contains the following clauses:
The Buyer agrees to pay the balance of the purchase price, subject to adjustments, to the Seller on the completion of this transaction, with funds drawn on a lawyer’s trust account in the form of a bank draft, certified cheque or wire transfer using the Large Value Transfer System [“LVTS”].
The Buyer acknowledges that there are no conditions in the buyer’s offer pertaining to the financing and home inspection. The Buyer further acknowledges that upon acceptance of the offer, the Buyer have entered into a binding Agreement of Purchase and Sale with the Seller.
[12] The closing date was amended by agreement to March 31, 2021. The time (6:00 p.m.) remained unchanged.
The Communications
[13] On March 30, Ms. Al-Khouri and Ms. Moran exchanged email communications about the mechanics of closing the real estate deal during the pandemic. At 2:13 p.m., Ms. Moran asked Ms. Al-Khouri, “Will Mr. d’Ailly come here to close tomorrow or should I send my keys out to you?” At 2:15 p.m., Ms. Al-Khouri responded, “Please send your keys to our office. Also is direct deposit okay? If so, please provide me with a copy of your trust void cheque.” Ms. Moran’s response was, “Yes direct deposit would be good.”
[14] By the early afternoon of March 31, Mr. d’Ailly had received the mortgage advance from RBC. However, Mr. d’Ailly had not received the bridge loan funds, despite a confirmation from the bank at 12:46 p.m. that the wire transfer into Mr. d’Ailly’s trust account had been initiated.
[15] The communications (all by email) and events of the afternoon of March 31 were as follows:
• At 2:17 p.m., Ms. Moran asked Ms. Al-Khouri, “What’s the status?”
• At 2:24 p.m., Ms. Al-Khouri responded, “I just called the bank to see where the money is. They’ll call me back in 20 minutes. They also said they wired it but it didn’t show up in our account yet. Will keep you posted as soon as I know more.”
• At 3:57 p.m., Ms. Al-Khouri said, “RBC said that they wired it but nothing has showed up in our account at TD yet.”
• At 4:19 p.m., Ms. Al-Khouri sent an email to Ms. Moran that attached three things: confirmation from RBC of the actual mortgage funds ($708,499) deposited into Mr. d’Ailly’s trust account; confirmation of the bridge finance funds ($381,500) wired by RBC but not yet received by Mr. d’Ailly; and a letter indicating agreement to extend the closing to April 1, signed by Mr. d’Ailly with a place for Mr. Culmone’s signature.
• At 4:48 p.m., Ms. Moran wrote, “While I wait for my clients’ response, please add into the letter that adjustments are to remain as of today’s date and have Mr. d’Ailly resign or initial the change.”
• At 5:05 p.m., Ms. Al-Khouri sent the amended letter.
• At 5:06 p.m., Ms. Moran said, “I have received instructions from my client now. Please see tender letter enclosed.” A letter was attached confirming that the vendor was “ready, willing and able to complete this sale transaction on today’s date.”
• At 5:30 p.m., Mr. d’Ailly received the bridge loan advance into his trust account. Mr. d’Ailly sent to Ms. Moran a closing package including a copy of an uncertified cheque for the balance due on closing together with printouts showing the funds having been received in trust.
• At 5:41 p.m., Mr. Culmone sent the following email to Mr. d’Ailly:
Antoine, I have advised my client that the Buyer has until 6 pm to produce bank draft, certified cheque or receipt of funds by way of Wire Transfer using the LVTS. I’ll be here until at least 6 pm in the office if you are able to certify and deliver before then. I have very clear instructions from my client that an extension will not be granted without the Sellers being compensated. The Seller is upset that they were advise[d] that the Buyer did not require mortgage financing and were surprised today to be told that this was the cause of the delay. This is the Sellers [sic] decision not mine as you know. Hopefully this transaction may come back to life tomorrow, but I’m not hopeful. At this point, the Buyer is in breach or I’m afraid will be at 6 pm.
[16] The plaintiff, Yan Tang, asserts that she attempted to reach the defendants, who she understood to be physically located in China, through third parties and mutual acquaintances. Based on those conversations, she believed the transaction would close on April 1, 2021.
[17] On April 1, 2021, the communications (all by email) and events were as follows:
• First thing in the morning, Mr. d’Ailly deposited the sum of $1,071,337 into Mr. Culmone’s trust account. This is the amount required to close the transaction.
• At 10:39 a.m., Ms. Al-Khouri re-sent the closing package with a copy of a certified cheque to Culmone Law in trust and proof of deposit into Mr. Culmone’s trust account.
• At 10:49 a.m., Mr. Culmone wrote to Mr. d’Ailly, with a copy to Ms. Moran:
Antoine and Oula, I’m assuming you’ve read the emails sent yesterday. My instructions are the same and have not altered. Michelle, check one last time with clients whether they wish to revive this deal. At this point, they are demanding $50,000 increase in the Purchase Price and have stated unequivocally that no extension will be granted.
Antoine, my clients have confirmed my instructions over the last 12 hours 3 or 4 times and they are adamant that no extension or revival of this contract will be agreed to. Your client was in breach yesterday at 6 pm. Not sure why you proceeded to deposit funds into my trust account knowing this and knowing the Seller’s position. I must now either issue an uncertified trust cheque to your firm and drop off when retrieving closing package, or alternatively, if you wish to pay for cheque certification or wire transfer, we’ll attend to that. Let me know how you wish to proceed.
• At 11:30 a.m., Mr. d’Ailly wrote to Mr. Culmone: “My client’s position is that demanding an extra $50,000 is wholly unreasonable given the circumstances but as a demonstration of good faith, I have instructions to offer an increase in purchase price of $10,000 in order to close the transaction. Kindly communicate the same to your client and seek instructions accordingly.”
• At 12:34 p.m., Mr. Culmone wrote, “Is $10,000 the most the buyer is prepared to offer? Sellers have not looked favourably on the offer. I have explained to my clients the possible outcome and associated risks.”
• At 1:09 p.m., Mr. d’Ailly wrote, “I have passed along your correspondence and have similarly advised my clients, they are prepared to offer $25,000 to salvage the deal.”
• At 2:00 p.m., Ms. Moran wrote to Ms. Al-Khouri: “We will be returning funds. Will you be accepting an uncertified cheque or will you be providing a cheque payable to Floro Culmone for the certification fee of $20?”
• At 3:56 p.m., Mr. d’Ailly wrote, “My clients have dropped off a certified cheque in the amount of $50k. My updated instructions are to provide the same to your office immediately and proceed with closing the transaction today.” The funds were deposited directly into Mr. Culmone’s trust account at approximately 4:15 p.m.
• At 4:32 p.m., Mr. Culmone wrote, “Antoine, my instructions are final. Please attend my office before 5 pm to pick up your certified cheque and return my closing package.”
The Issues
[18] The plaintiffs assert that they are entitled to specific performance of the agreement of purchase and sale. The defendants assert that the plaintiffs are not so entitled. I see the questions as follows:
What is the effect of the “time is of the essence” clause?
What is the effect of the communications and payment on the day following the scheduled closing date?
Analysis
[19] The agreement of purchase and sale requires that the buyers make payment on the date of closing, before 6:00 p.m., by bank draft, certified cheque, or wire transfer. The plaintiffs did not comply with this requirement. Payment was made the next morning.
[20] The plaintiffs assert that the defendants are precluded from relying on the “time is of the essence” clause to terminate the agreement (1) because the defendants failed to act in good faith, and (2) because of the governing legal principles of estoppel by representation.
Failure to Act in Good Faith
[21] In Fortress Carlyle Peter St. Inc. v. Ricki’s Construction and Painting Inc., 2019 ONSC 1507 (“Fortress Carlyle”), the property in question was encumbered by four leases. The agreement of purchase and sale required the seller to provide estoppel certificates to the buyer five days prior to closing. Only one tenant remained in the property at the time of closing. The remaining tenant provided an altered estoppel certificate on the day of closing. The buyer requested an extension until the next morning. The seller refused. The motions judge granted the buyer’s request for specific performance of the agreement of purchase and sale on a motion for summary judgment. The seller appealed to the Court of Appeal. The appeal was dismissed (2019 ONCA 866).
[22] The motions judge, Perell J., found that the seller’s decision to delay informing the purchaser of the lessee’s position was a “deliberate tactical decision to discomfit the purchaser”: Fortress Carlyle, at para. 102. He found that the seller acted in bad faith as a result. He found that the buyer would have been ready, willing, and able to close on the scheduled closing date but for the misconduct of the seller. At para. 105, the motions judge said the following:
The estoppel certificate was a critical factor in Fortress’s development plans, and after the delayed delivery of any certificate, the late delivery of a certificate with serious issues, and the late delivery of a proper certificate, one hour before the scheduled 6:00 p.m. closing, Ricki’s Construction was precluded from relying on the provision in the Agreement of Purchase and Sale making time of the essence.
[23] The plaintiffs in this case assert that the defendants were neither desirous nor eager to carry out the agreement. When the defendants learned that there was a potential issue with respect to the delivery of closing funds, the defendants treated the situation as an opportunity to extort the plaintiffs for personal gain, instead of acting in good faith to complete the transaction. The plaintiffs assert that at 5:30 p.m. on the day of closing, they demonstrated substantial performance of their contractual obligations by proving that the closing funds had been received in their solicitor’s trust account and by providing the required closing documents to the defendants’ solicitor together with a copy of a trust cheque. These indicated that the plaintiffs intended to have certified funds deposited the next morning to complete the transaction.
[24] In my view, the principle set out in Fortress Carlyle is not applicable in this case. In Fortress Carlyle, the seller had not complied with the agreement of purchase and sale in that they had not provided the estoppel certificates within the time frame required. Accordingly, the seller could not rely on the “time is of the essence” clause. In this case, the sellers were not late in any of their obligations and had not breached the agreement.
[25] In 1473587 Ontario Inc. v. Jackson (2005), 2005 CanLII 4578 (ON SC), 74 O.R. (3d) 539 (S.C.) (“Jackson”), the purchaser failed to pay a deposit by the deadline set out in the agreement of purchase and sale and sought to remedy the default two days later. The agreement contained a clause stating, “time in all respects shall be of the essence”: Jackson, at paras. 4 and 19. Rutherford J. found that the default allowed the seller to terminate the agreement. In doing so, he relied on Union Eagle Ltd. v. Golden Achievement Ltd., [1997] 2 All E.R. 215 (P.C.). In that case, the Privy Council dealt with a failed condominium closing in Hong Kong in 1991 during a time of escalating real estate prices. The transaction was to close before 5:00 p.m. The purchaser’s agent arrived to close at 5:10 p.m. and the seller rescinded the contract. At para. 18, Lord Hoffman said the following:
The fact is that the purchaser was late. Any suggestion that relief can be obtained on the ground that he was only slightly late is bound to lead to arguments over how late is too late, which can be resolved only by litigation. For five years the vendor has not known whether he is entitled to resell the flat or not. It has been sterilised by a caution pending a final decision in this case. In his dissenting judgment, Godfrey J.A. said that the case "cries out for the intervention of equity". Their Lordships think that, on the contrary, it shows the need for a firm restatement of the principle that in cases of rescission of an ordinary contract of sale of land for failure to comply with an essential condition as to time, equity will not intervene.
[26] In his conclusion in Jackson, Rutherford J. said the following, at para. 23:
In my view, the law applicable to this case is clear, as it ought to be. When Loblaw, albeit through inadvertence, failed to pay the deposit cheque within the time specified, it breached a term which the parties had agreed was essential to the contract. That made it a fundamental breach entitling the Vendors to treat the contract as discharged and releasing them from their obligations under it. The Vendors were under no obligation to assert their right to treat the contract as ended any earlier than they did. They did nothing to injure Loblaw or lead it to act against its interests by not asserting their right on the first day of default, and did nothing which in law or fact could fairly be construed as having waived or extended the time provision.
[27] In 2336574 Ontario Inc. v. 1559586 Ontario Inc., 2016 ONSC 2467, the closing date for the purchase of the condominium project was set for June 26, 2015. The purchasers did not have the funds to close until the next day, June 27. At para. 25, Morgan J. said the following:
The Vendor’s obligation here was to have the Condominium ready to transfer to the Purchaser and to set the final closing date. The Purchaser’s obligation was to have the closing funds ready on the closing date and to pay them to the Vendor. The Purchaser did not have an obligation to take less than full title or to get title a day or two late; likewise, the Vendor did not have an obligation to take a few less dollars or to take the closing money a few days late. Given the relationship of Vendor and Purchaser in a discreet real estate deal, good faith meant sticking to the contract, not bending the contract – even just a little bit – to one side’s will.
[28] In Deangelis v. Weldan Properties (Haig) Inc., 2017 ONSC 4155 (“Deangelis”), Ricchetti J. dealt with a situation where the purchaser did not have the funds to close the purchase on the closing date. Apparently, there was a mistake at the bank. The funds were available within the next three days. The purchaser sought specific performance and cited 801 Assets Inc. v. 605446 Ontario Limited, 2016 ONSC 2772 (“801 Assets”), in support of the proposition that the seller was required to act in good faith to extend the closing date and not rely on the “time is of the essence” clause to terminate the agreement. At para. 35 of Deangelis, Ricchetti J. found that “801 Assets does not assist [the purchaser]. It is clear that, where a party has not acted in good faith in the performance of his obligations under the contract, he cannot rely on the “time of the essence” provision.”
[29] In 801 Assets, the court determined that the seller had not acted in good faith for a number of reasons and had not been in a position to close the transaction. Ricchetti J. found that there was no evidence of bad faith on the part of the seller in the “performance” of its obligations under the agreement and that the seller was ready to close.
[30] In Deangelis, Ricchetti J. said the following, at paras. 41-42:
It would be tempting to let principles of fairness and equity direct a finding that a three day delay in the closing in the four year history of the Agreement, is a minor breach resulting in a financial windfall to the builder and, therefore, the Agreement should be upheld.
However, in my view, it would be wrong in law to find that insisting on compliance with a term of the agreement, agreed to by both parties with the assistance of counsel, amounts to bad faith depriving a party of the ability to strictly enforce an agreement where time is of the essence. Such a determination would mean that no party could insist on strict compliance of the term of an agreement because to do so would or might amount to bad faith. This would throw the law of contract into chaos by creating uncertainty in the enforcement of contracts.
[31] In the case before me, there is no evidence of bad faith on the part of the defendants in the performance of their obligations under the agreement. The defendants were ready to close. The defendants provided a statement of adjustments. The defendants were ready to provide title to the plaintiffs. The failure to close the purchase was entirely the fault of the plaintiffs in not providing funds to the defendants as required by the agreement. In my view, the principles set out in Fortress Carlyle and 801 Assets are not applicable to this situation. When the plaintiffs were unable to close on March 31, 2021, the defendants were entitled to treat the agreement of purchase and sale as being at an end.
Estoppel by Representation
[32] The plaintiffs point to the email from Mr. Culmone on March 31 at 5:41 p.m. indicating that “an extension will not be granted without the Sellers being compensated.” The plaintiffs assert that compensation means money to recompense for loss, injury, or suffering. In this context, the plaintiffs assert that “compensation” means added legal fees and compensation for the minor inconvenience of a one-day delay in closing. The plaintiffs assert that this communication gave rise to their belief that the deal is not over – that an effort to attend the bank during the course of the pandemic to certify a cheque was not necessary and the “time is of the essence” clause would not be relied upon.
[33] The plaintiffs assert that, in these circumstances, the defendants are estopped from relying on the “time is of the essence” clause.
[34] In Canadian Superior Oil Ltd. v. Paddon-Hughes Development Co., 1970 CanLII 3 (SCC), [1970] S.C.R. 932 (“Canadian Superior Oil”), Martland J. set out the essential factors that give rise to an estoppel, at pp. 939-940:
(1) A representation or conduct amounting to a representation intended to induce a course of conduct on the part of the person to whom the representation is made.
(2) An act or omission resulting from the representation, whether actual or by conduct, by the person to whom the representation is made.
(3) Detriment to such person as a consequence of the act or omission.
[35] The only evidence the plaintiffs provide as to their reliance on any representation made by the defendants, or on their behalf, is a statement in para. 16 of the affidavit of the plaintiff, Yan Tang. It reads as follows:
I subsequently attempted to reach the Defendants, whom I understood to be physically located in China, through third parties and mutual acquaintances. Based on those conversations, I believed that the transaction would close on April 1, 2021.
[36] The plaintiffs provided no further particulars of the conversations to explain why those conversations led them to believe the closing would be delayed by one day. In any event, there is no evidence in this paragraph of the defendants having made those representations.
[37] Returning to the statement made by Mr. Culmone, I cannot find that his statements were intended to induce the plaintiffs to refrain from making further attempts to close the transaction on March 31. In the same communication, he points out that payment can be made “by way of wire transfer using the LVTS.” In the same communication he states, “[h]opefully this transaction may come back to life tomorrow, but I’m not hopeful.” In the same communication, he states “at this point, the buyer is in breach or I’m afraid will be at 6 pm.” These statements make it clear to the plaintiffs that the defendants consider the plaintiffs to be in breach should the funds required to close not be received by 6:00 p.m.
[38] I note that there is no explanation from the plaintiffs as to why the payment could not be made by way of wire transfer as suggested by Mr. Culmone.
[39] There is no evidence that the plaintiffs committed an act or omission resulting from the representation such as to cause them detriment.
[40] Moreover, in Canadian Superior Oil, the Supreme Court explains that estoppel by representation cannot be used as a sword founding a cause of action, at p. 937: “But, subject to the equitable rule as to acquiescence, which has sometimes been described as estoppel by acquiescence, and to which I will refer later, a cause of action cannot be founded upon estoppel.”
[41] In my view, the doctrine of estoppel by representation cannot apply to assist the plaintiffs in this case based on the statement made by Mr. Culmone. The result then is that the agreement was at an end as of 6:00 p.m. on March 31.
Events of April 1
[42] I then turned to the communications that took place between counsel on April 1.
[43] I begin with a review of the well-settled law on offers and counteroffers.
[44] In Hyde v. Wrench (1840), 3 Beav. 334 (49 E.R. 132), the defendant offered to sell for 1,000 British pounds. The plaintiff responded with an offer to pay 950 British pounds and, in the words of Lord Landale M.R. at p. 337, “he thereby rejected the offer previously made by the Defendant. I think that it was not afterwards competent for him to revive the proposal of the Defendant, by tendering an acceptance of it.”
[45] A counteroffer constitutes non acceptance of a previous offer. The previous offer must be revived in order to be accepted after a counteroffer has been made: see More Marine Ltd. v. The Ship (Western King), 2009 BCSC 504.
[46] In Livingstone v. Evans, 1925 CanLII 310 (AB KB), [1925] 4 D.L.R. 769 (Alta. S.C.) (“Livingstone”), Walsh J. said the following, at p. 770:
Hyde v. Wrench has stood without question for 85 years. It is adopted by the text writers as a correct exposition of the law and is generally accepted and recognized as such. I think it not too much to say that it has firmly established it as a part of the law of contracts that the making of a counter-offer is a rejection of the original offer.
[47] What happens if, instead of a counteroffer, there is an inquiry?
[48] In Re Cowan and Boyd (1921), 1921 CanLII 500 (ON CA), 61 D.L.R. 497 (Ont. Sup. Ct., Appellate Division), the question was the effect of a certain communication from a tenant to a landlord respecting the renewal of a lease. The landlord wrote to the tenant offering a renewal of a lease at an increased rent rate. The tenant’s reply letter indicated he was paying the highest rent he could and if he could not renew at the same rate, he wanted to know as soon as possible. The landlord wrote saying he would call on the tenant but before he did, the tenant wrote accepting the original offer. The court held that the tenant’s reply was not a counteroffer but rather a request for the landlord to modify his terms, at p. 498:
There is no doubt that, in order to constitute acceptance, the assent to the terms of an offer must be absolute and unqualified. If the acceptance is conditional, or any fresh term is introduced, by the person to whom the offer is made, his expression of assent amounts to a counter offer, which in turn requires to be accepted by the person who made the original offer, 7 Hals. p. 350.
[49] The court went on to consider whether the communication in question was a counteroffer sufficient to put an end to the original offer. In finding that it was not, the court said the
following, at p. 498:
The most that can be said of this letter of March 31 is that it is a request to the landlord to modify the terms of her offer; he asks her to reconsider his proposition. I think this brings it within the law as laid down in Stevenson v. McLean (1880), 5 Q.B.D. 346. Referring to this case, the editor of the last edition (15th) of Anson on Contracts says at p. 49 :—“An offer once refused is dead and cannot be accepted unless renewed; but an inquiry as to whether the offeror will modify his terms does not necessarily amount to a refusal.”
[50] The landlord appealed and the appeal was dismissed. The Court of Appeal found that the effect of the landlord’s letter saying he would call on the tenant was that the landlord’s offer remained open for further discussion and the tenant was therefore able to accept it.
[51] In Livingstone, the defendant offered to sell land to the plaintiff for $1,800. The plaintiff replied by wire: “Send lowest cash price. Will give $1600 cash.” The agent replied, “Cannot reduce price.” The plaintiff then sent a wire accepting the offer. Walsh J. considered the effect of the communications. He said the plaintiff’s counteroffer was undoubtedly a counteroffer that put an end to the defendant’s offer unless it was revived by the defendant’s response “cannot reduce price.” At p. 771, Walsh J. said the following:
With some doubt I think that it was a renewal of the original offer or at any rate an intimation to the plaintiff that he was still willing to treat on the basis of it. It was, of course, a reply to the counter-offer and to the inquiry in the plaintiff’s telegram. But it was more than that. The price referred to in it was unquestionably that mentioned in his letter. His statement that he could not reduce that price strikes me as having but one meaning, namely, that he was still standing by it and, therefore, still open to accept it.
[52] With the principles set out in the case law in mind, I turn then to the communications of the parties on April 1.
[53] At 10:49 a.m., Mr. Culmone sent an email, which included the following: “At this point they are demanding $50,000 increase in the purchase price…”. In my view, the communication from Mr. Culmone at 10:49 a.m. constituted an offer to revive the agreement for an increase of $50,000 in price (the price plus $50,000 offer).
[54] At 11:30 a.m., Mr. d’Ailly wrote: “I have instructions to offer an increase in purchase price of $10,000 in order to close the transaction…” This was, in my view, a counteroffer that put an end to the seller’s price plus $50,000 offer unless it was revived by the next communication.
[55] At 12:34 p.m., Mr. Culmone wrote, “is $10,000 the most the buyer is prepared to offer? Sellers have not looked favourably on the offer…”. This communication is akin to the “cannot reduce price” communication in Livingstone. In my view, it is a renewal of the price plus $50,000 offer or at least an intimation that the sellers were prepared to either accept it or continue negotiating.
[56] At 1:09 p.m., Mr. d’Ailly wrote, “I have passed along your correspondence and have similarly advised my clients, they are prepared to offer $25,000 to salvage the deal”. This communication is, in my view, clearly a counteroffer that puts the price plus $50,000 to an end unless it is further revived.
[57] At 2:00 p.m., Ms. Moran wrote to Ms. Al-Khouri: “We will be returning funds…”. This communication cannot be construed as reviving the $50,000 plus offer. As the offer was at an end following the 1:09 p.m. communication, it is no longer open for acceptance by the plaintiffs.
Conclusion
[58] I take judicial notice of the rising prices in the local housing market. I also take judicial notice of the global pandemic. The plaintiffs urge me to consider the circumstances: that they had the funds to close before 6:00 p.m. and provided proof to the defendants, and that the pandemic resulted in an inability to run to the bank to certify funds. The plaintiffs urge me to conclude that the defendants were not eager to close the transaction given the rise in housing prices. The plaintiffs assert that the contract was substantially performed when they provided evidence that the funds were in their solicitor’s trust account, and that ought to have been good enough for the defendants in the circumstances.
[59] I can only echo the words of Ricchetti J. in Deangelis set out above. It may seem that, in all the circumstances, fairness would require that the plaintiffs be given another day to produce the certified funds. However, the defendants, having complied with their obligations under the contract, are entitled to insist that the plaintiffs do the same.
Disposition
[60] For these reasons, the plaintiffs’ motion for summary judgment is dismissed. I allow the defendants’ motion and dismiss the plaintiffs’ action.
[61] The defendants, in their material, allege that they are entitled to retain the $20,000 deposit paid by the plaintiffs. I heard no argument on that issue, and I therefore invite counsel to provide written submissions on the disposition of the deposit along with costs according to the following timeline:
The defendants may provide submissions within 20 days;
The plaintiffs may provide submissions within 20 days thereafter;
The defendants may provide any reply submissions within 10 days thereafter.
Original signed by Justice Pamela L. Hebner
Pamela L. Hebner
Justice
Released: December 7, 2021
COURT FILE NO.: CV-21-29880
DATE: 20211207
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN:
Yan Tang & Fang Cheng Bao Plaintiffs
– and –
Rong Rong & Jin Meng Defendants
Ruling on motion
Hebner J.
Released: December 7, 2021