1824120 Ontario Limited v. Matich, 2021 ONSC 8389
COURT FILE NO.: 13446/21
DATE: 2021-12-21
SUPERIOR COURT OF JUSTICE – ONTARIO
RE: 1824120 Ontario Limited, plaintiff
AND: Joseph George Matich, Kelly Anne Smith and Anne Marie Matich, defendants
BEFORE: Mr Justice Ramsay
COUNSEL: Scott McGrath and Alexander Soutter for the plaintiff; Johanna McNulty for the defendants
HEARD: December 20, 2021 at Welland by teleconference
ENDORSEMENT
[1] The plaintiffs are suing for specific performance of an agreement for purchase and sale of a farm owned jointly by the three defendants, who are husband, wife and daughter. Today the defendants move for leave to amend their statement of claim. With respect to most of the proposed amendments, the plaintiffs consent. With respect to the amendments said to constitute the withdrawal of an admission, the plaintiffs do not consent.
[2] Shortly before March 15, 2021 a real estate agent presented an offer to purchase the defendants’ farm on a standard real estate form. The plaintiff is the “buyer” and the defendants are the “seller.” The husband and wife signed and sent back a counteroffer. The daughter did not sign it. The three of them were under the impression that she did not have to sign, in spite of the fact that their solicitor sent them an email to the contrary that day. The counteroffer contained the following clause:
This Offer is conditional upon the approval of the terms hereof by the Seller’s Solicitor. Unless the Seller gives notice in writing delivered to the Buyer or to the Buyer’s address as hereinafter indicated personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule hereto not later than Three days (3) from the date of acceptance of this offer, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of Seller and may be waived at the Seller’s sole option by notice in writing to the Buyer as aforesaid within the time period stated herein.
[3] The plaintiff, acting through the real estate agent, accepted the counter offer. The defendants spoke to their solicitor and he did approve.
[4] The plaintiff sued, alleging that the defendants had acted in bad faith. The defendants filed a statement of defence in which they say that they did not act in bad faith. They acted in good faith on the advice of their lawyer.
[5] The statement of defence was filed jointly by all three defendants. It includes the following averments:
As a result of the pressure placed on them by the Realtor, the defendants state that on or about March 15, 2021 they wrote back to the plaintiff, 1824120 Ontario Limited (“Primont”), with a proposed sale price of $16,500,000.00 and included a solicitor review clause for the benefit of the purchaser [sic: vendors?] as its Schedule “C” (“Solicitor Review Clause”), the specific wording of which may found at paragraph 10 of the Statement of Claim.
On or about March 15, 2021, Primont accepted the Matich’s offer and the parties entered into a conditional agreement of purchase and sale (“Conditional APS”) which was subject to the Solicitor Review Clause.
[6] The defendants seek to amend the statement of defence to withdraw any admission that they entered into a conditional agreement of purchase and sale. It is not disputed that the defendant daughter did not sign the document in question. That much is obvious on the face of the document. For that reason the defendants wish to argue that there never was a valid conditional agreement of purchase and sale.
[7] Rule 51.05 provides:
51.05 An admission made in response to a request to admit, a deemed admission under rule 51.03 or an admission in a pleading may be withdrawn on consent or with leave of the court.
[8] A party requesting leave to withdraw an admission must pass three tests by establishing (1) that the proposed amendment raises a triable issue; (2) that the admission was inadvertent or resulted from wrong instructions; and (3) that the withdrawal will not result in any prejudice that cannot be compensated for in costs: Antipas v. Coroneos, 1988 CanLII 10348 (ON SC), [1988] O.J. No. 137, para. 14 (H.C.J., Saunders J.).
[9] The proposed amendment admittedly raises a triable issue. The fact that the document was not signed by one of the three joint tenants is fundamental to the validity of the agreement at law: Statute of Frauds, R.S.O. 1990, c. S.19, s.1. Whatever the defendants thought about the legal effect of the omission of the daughter’s signature from the counteroffer does not change its actual legal effect.
[10] I am not sure that the averments actually constitute an admission. They seem rather to be describing how a certain document came to be executed. It was only natural to refer to the document in the pleadings as a conditional agreement of purchase and sale because that is how the document describes itself. To infer from the text an admission of the validity of the document is scarcely warranted. A comparison could be made with Zellers Inc. v. Group Resources Inc., 1995 CanLII 7141 (ON SC), [1995] O.J. No. 5 (Ont. Ct Gen. Div.).
[11] If it does constitute an admission, it was the result of inadvertence or wrong instructions. I accept the evidence that the defendants did not understand before the pleadings were filed that the daughter had to agree and sign for any sale of the property, despite their real estate solicitor’s email of March 15, 2021. They do not want to amend their pleadings because they have thought of a new defence. The defence is not new. It has existed since the very first moment. Its existence is independent of the parties’ opinions, thoughts or evidence.
[12] There is no prejudice to the plaintiffs. The fact that the document was only signed by two of the three purported vendors has been known to the plaintiffs from day one. The action is still only months old. The mutual motions for summary judgment have not been heard. Amendment need not delay the motions for summary judgment significantly. The defendants’ evidence is already on record in the form of cross-examination on affidavits. They will not be able to change it. It would be perverse to allow the plaintiffs to rely on a dodgy implied admission in the face of the indisputable fact that the document was not signed by one of the three defendants.
Conclusion
[13] The defendants are given leave to amend their pleadings as asked.
[14] The parties may make written submissions to costs not exceeding three pages in length, to which a bill of costs and any offers to settle may be appended, the defendants by January 14, 2022 and the plaintiffs by the following January 21.
J.A. Ramsay J.
Date: 2021-12-21