Court File and Parties

COURT FILE NO.: CV-21-670835 DATE: April 29, 2022

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Alireza Sheybani Sadiq v. Simcoe Ridge (ARH) Homes Ltd., Aspen Ridge Realty Inc. Brokerage, Barbara Jane Smith, John Doe and Jane Doe

BEFORE: ASSOCIATE JUSTICE C. WIEBE

COUNSEL: Shahryar Mazaheri for the plaintiff; Adam Lifshitz for the defendants.

HEARD: April 26, 2022.

REASONS FOR DECISION

[1] This was a motion by the plaintiff for a certificate of pending litigation on a pre-construction corner lot, Lot 140, of a subdivision called “Simcoe Landing” in Georgina, Ontario. The developer of the subdivision is the defendant, Simcoe Ridge (ARH) Homes Ltd. (“Simcoe Ridge”). The Simcoe Ridge’s realtors are Aspen Ridge Realty Inc. Brokerage and Barbara Jane Smith. The realtor for the plaintiff at the time was Marjan Zargar Balayejame (“Ms. Zargar”).

[2] I heard argument on the motion on April 26, 2022, and, because there is a pending sale of Lot 140 to a third party that closes on May 16, 2022, I rendered an oral decision on April 28, 2022 dismissing the motion. These are the reasons for my decision.

Basis for the Motion

[3] The following facts are not in dispute. On Wednesday, July 15, 2020 the plaintiff signed an agreement of purchase and sale (“the APS”) purchasing Lot 140 from Simcoe Ridge. The APS was signed back by Simcoe Ridge the next day on July 16, 2020. On Monday, July 20, 2020 at 11:55 p.m. the plaintiff sent an email to Ms. Smith clearly stating that, after discussing the matter with his lawyer and accountant, he was cancelling the purchase “because it does not work for me.” In the email the plaintiff stated that he believed he had a 3-business day “cooling period” that ended on Tuesday, July 21, 2020. Ms. Smith sent a text to Ms. Zargar the next morning, July 21, 2020, at 8:19 a.m. stating that the Lot 140 purchase had been cancelled and she was “getting him out of the deal” and had sold the lot already. The lot was in fact sold on July 23, 2020. This is the sale that is closing on May 16, 2022.

[4] The plaintiff’s position is that his July 20, 2020 email was sent by him inadvertently. He says that on July 15, 2020 he purchased another lot on another subdivision from a different developer, Park Avenue Homes. He says that this other purchase had an “irrevocable period” that ended at 11:59 on July 20, 2020. He says that he meant to cancel the Park Avenue purchase, but instead responded to a DocuSign e-signature email from Ms. Smith concerning the Lot 140 purchase. Hence, he says, the email has all the trappings of a cancellation of the Lot 140 purchase, which is clearly indicated in the re line of the email.

[5] In the notice of motion, the plaintiff alludes to issues of fraudulent conveyance, fraudulent preference and constructive trust as the basis for the motion. There was no evidence to support those allegations. Simcoe Ridge resold Lot 140 to the third party purchaser on July 23, 2020 for almost the same price. There was no evidence that the deposit cheques the plaintiff gave to Simcoe Ridge were ever deposited. There is no evidence that Simcoe Ridge is trying to avoid creditors or preferring creditors with the pending sale. There was no evidence that Ms. Smith or Simcoe Ridge were in any way trustees of Mr. Sadiq who had his own realtor at all relevant times.

[6] In the end, the issue came down to whether the plaintiff has established a reasonable, underlying claim to an interest in Lot 140 pursuant to the Courts of Justice Act, R.S.O. 1990, c. C.43 (“CJA”), section 103. The test on such a motion was described in the leading decision of Master Glustein (as he then was) in Perruzza v. Spatone, 2010 ONSC 841, paragraph 20. The onus is on the moving party to show that is a triable issue as to the claimed interest in the land. In addition, there are the factors in CJA section 103(6) to be considered, namely whether damages are claimed and are an adequate alternative to the claimed interest in land and whether the moving party has prosecuted the motion “with reasonable diligence.” In addition, the court should consider other factors: the uniqueness of the land to the plaintiff; whether there is a willing purchaser for the land; and the balance of convenience between the parties.

Interest in Land

[7] The plaintiff’s claim to Lot 140 rests on showing that Simcoe Ridge wrongfully repudiated the APS. The defendants have succeeded in proving that this claim is highly dubious at best.

[8] The evidence of the APS and the emails strongly indicate that the plaintiff was not mistaken when he sent the email on July 20, 2020. Schedule L of the APS gave the plaintiff a period of time to consult his advisers and confirm financing. The date inserted, July 15, 2020, was clearly a clerical error as the APS only signed back the APS the next day, July 16, 2020. The affidavit of Jason Attard, an officer at Simcoe Ridge, was filed in the motion by the defendants. In this affidavit Mr. Attard advised that it was his company’s practice was to give buyers three to five days from acceptance to confirm financing. A three-day period would have ended on July 21, 2020. This is the exact three-day period Mr. Sadiq refers to in his July 20, 2020 email.

[9] On the other hand, the confirmation period in the Park Avenue agreement of purchase and sale did not end on July 20, 2020 as the plaintiff alleged in his affidavit. The Park Avenue agreement of purchase and sale was a part of the plaintiff’s affidavit. The confirmation period in that document ended on July 28, 2020. The only reasonable conclusion to be drawn from these documents is that the plaintiff intended to and did terminate the APS in accordance with its terms.

[10] Other documents corroborate this conclusion. In response to the text Ms. Smith sent to Ms. Zargar at 8:19 a.m. on July 21, 2020, Ms. Zargar sent a responding text two hours later saying, “Yes looks like he was not sure.” Mr. Sadiq stated in his affidavit that he told Ms. Zargar at 8 a.m. to inform Ms. Smith of his alleged mistake and that she did so. That statement is contradicted by Ms. Zargar’s text. Ms. Zargar tried to explain the text as referring to other sales, which is not born out by the wording of the text itself.

[11] The other corroboration comes from the absence of any written correspondence from the plaintiff to Simcoe Block concerning the alleged mistake. This is not the conduct of one who believes that the APS remains in effect and has been wrongfully repudiated by the developer.

[12] This leads to an interesting point. On February 28, 2022, in answer to undertakings, the plaintiff produced screen shots of two carefully written texts to Simcoe Block, one showing the date of July 21, 2020 at 12:26 p.m. and the other showing the date of July 22, 2020 at 16:46 p.m. Both alleged texts are from Mr. Sadiq and in them he carefully states his position of mistake. Neither of these texts appear in the affidavits of Mr. Sadiq and Ms. Zargar, and there is no evidence that Simcoe Ridge responded to them. Mr. Lifshitz asked for these documents in native format to mine them for metadata. That was not done by the plaintiff. I find these documents lacking credibility as to what they purport to be, and frankly as a result a confirmation of the defendants’ position.

[13] If Mr. Sadiq did make the mistake he alleges, there is very little evidence that Simcoe Block should have been aware of it. Mr. Sadiq’s July 20, 2020 email is clear in its intent to terminate the contract and clearly refers to Lot 140. Mr. Mazaheri argued that the email was not sent to the email address for Simcoe Block specified for notices in the APS. That strikes me as an excessively technical point given the clarity of the email. Mr. Mazaheri also argued that the APS specifies that only a mutual agreement in writing by the parties can terminate the APS. Those provisions, in my view, do not apply when the APS can be and has been terminated unilaterally by the plaintiff in accordance with the conditional clause of the APS.

[14] However, despite my deep misgivings about the credibility of the plaintiff’s claim to an interest in the land, I realized in making my ruling that this in the end was still a credibility issue that might merit a trial. I, therefore, looked to other factors in making my ruling.

Delay

[15] There was inordinate delay in bringing this motion forward. The plaintiff admits in his affidavit to doing nothing for months. He stated that he was depressed and saw his doctor. There was no medical corroboration of that statement. In any event, it does not adequately explain this total inaction at a time when the plaintiff allegedly felt profoundly wronged.

[16] In argument, Mr. Mazaheri kept bringing up the pandemic as an explanation for the delay, but the pandemic is mentioned only once and tangentially in Mr. Sadiq’s affidavit. In any event, the pandemic should not have interfered with the plaintiff’s efforts to the bring this action and motion forward, if that is what he intended to do. Lawyers kept working during the pandemic.

[17] The plaintiff said he searched for lawyers. The plaintiff’s affidavit contains an email he sent to Ms. Zargar on October 11, 2020 asking whether “this is the correct signed contract to try my chance with lawyer?” There is then an email from a lawyer to Mr. Sadiq dated October 29, 2020 giving a three-line opinion about the APS. There is no explanation as to why this lawyer was not hired. There is then an email dated December 11, 2020 from Mr. Sadiq to a person named Micheli explaining his case. There is no explanation as to what came of that contact. Finally, Mr. Sadiq stated in his affidavit that he contacted Mr. Mazaheri on February 28, 2021 and retained his services. This is seven months after the events in question. There is no explanation as to why Mr. Mazaheri was not approached sooner. Mr. Mazaheri raised in argument the issue that English was not the plaintiff’s first language; but again that was not raised by Mr. Sadiq himself in his affidavit.

[18] The first letter a lawyer for Mr. Sadiq wrote to Simcoe Ridge on this matter was the letter Mr. Mazaheri wrote to Michael Durisin, Simcoe Ridge’s lawyer at the time, on April 7, 2021. The defendants assert that this is the first time Simcoe Ridge learned of the plaintiff’s position. Given my discussion about the credibility of Mr. Sadiq’s alleged texts of July 21 and 22, 2022, I find that assertion by Simcoe Ridge credible. This was almost nine months after the events in issue.

[19] On October 25, 2021, fifteen months after the events in issue, the plaintiff commenced this action seeking a declaration that the APS is binding, specific performance and a certificate of pending litigation. On November 19, 2021 the defendants delivered their statement of defence.

[20] There was then another unexplained delay. It took until February, 2022 for Mr. Sadiq finally to take steps to bring this motion. This was nineteen months after the events in issue.

[21] In argument, Mr. Mazaheri tried to explain this delay by the knowledge Mr. Sadiq had as to the possible closing dates for the sale to the third party purchaser. In Mr. Sadiq’s APS the earliest closing date was stated to be December 1, 2021, and Mr. Mazaheri said Mr. Sadiq knew from observing the construction that this deadline would be delayed. None of this appeared in the evidence. It also does not justify the delay.

[22] In Sethi v. Calexio Holdings Inc., 2022 ONSC 1170, paragraphs 56 to 58 Associate Justice La Horey found a delay of six months between a failed closing and the motion for a certificate of pending litigation a failure to prosecute the claim with reasonable diligence.

[23] Applying that standard to this case I found that the plaintiff utterly failed to prosecute the claim with reasonable diligence. There was a delay of nineteen months from the events in issue to the bringing of this motion. This in my view, alone justified denying the motion.

Uniqueness

[24] Mr. Sadiq stated in his affidavit that Lot 140 was where he intended to live with his family and was of unique value to him. His evidence was not convincing. There was no evidence that Mr. Sadiq in fact cancelled the Park Avenue purchase as he claims. As a result, it is an open question as to whether he is in fact intending to use Lot 140 as a residence or as an investment. He stated in his affidavit that he liked the mortgage and payment plan with Lot 140, but that does not make the property unique.

[25] In cross-examination Mr. Sadiq raised other points, namely the alleged proximity of the location to his place of work, the proximity of farmland, the configuration of the lot as a corner lot and the close access to the 404 freeway. Interestingly, in answer to undertakings Mr. Attard showed that Ms. Zargar represented a buyer of a corner lot in the same subdivision with the same model design as Lot 140 and that this buyer terminated the purchase in mid-August, 2020. It is an open question as to whether that property was brought to Mr. Sadiq’s attention, and, if it was, why he did not pursue it since it appears to have had many of the features Mr. Sadiq wanted. This undermines both the alleged uniqueness of Lot 140 and the credibility of Mr. Sadiq’s assertions of uniqueness.

[26] Justice McMahon in Canamed (Stamford) Ltd. v. Masterwood Doors Ltd., 2006 ONSC 6083, paragraph 104 stated that the question of uniqueness has both subjective and objective elements. He described the objective element as follows: “The plaintiff must also demonstrate that, objectively, a reasonable person familiar with the facts surrounding the Purchase and Sale Agreement would conclude that the property was unique.” I am not convinced that the plaintiff has demonstrated this element. Lot 140 is in a subdivision with largely predesigned houses. These are not custom-built houses. Mr. Attard stated in answer to undertakings that other lots in the subdivision became available after the events in issue. There was no evidence of failed efforts to find comparable property.

[27] The claim of specific performance requires rigorous proof as to the uniqueness of the land. Justice Arrell stated the following in Multani Custom Homes Ltd. v. 1426435 Ontario Ltd., 2013 ONSC 4712: “The onus is on the purchaser to persuade the court that the property is unique, of particular importance to it and there is no readily available substitute. Uniqueness requires proof. (emphasis added).” The plaintiff did not provide such proof.

[28] I found that this factor also did not favour the motion.

Damages

[29] Mr. Mazaheri argued at some length that in a hot real estate market like the one we have now, assessing damages would be difficult. I do not accept that argument. The plaintiff claims damages in the alternative. The usual measure of damages is the difference between the purchase price in the APS and the purchase price of a comparable house, subject to the duty to mitigate. Such evidence can be readily obtained from real estate valuators.

[30] I found that this factor also did not favour the motion.

Willing Purchaser

[31] The evidence indicates that the property was sold on July 23, 2022 to a third party purchaser for about the same price as was contained in the APS, and that this sale will close on May 16, 2022 with the new house built no doubt with the third party purchaser’s added features. Because of my doubt as to the authenticity of the Sadiq July 21 and 22, 2020 texts, I found that Simcoe Ridge made that sale without knowledge of any claim from Mr. Sadiq. As a result, I found that this sale had none of the trappings of an inappropriate transaction.

[32] Mr. Lifshitz did not disclose the agreement of purchase and sale of that sale for what he said was privacy reasons. Mr. Mazaheri in argument speculated that the third party purchaser might be an investor, but there was no evidence to support that assertion.

[33] I found that this factor also did not favour the motion.

Balance of Convenience

[34] There was no evidence as to the inconvenience or damage a failure of the motion will cause the plaintiff other than a disappointment in not concluding his purchase. On the other hand, a certificate of pending litigation will interrupt the sale that has been underway since July 23, 2020 and that is scheduled to close on May 16, 2022. Probably the third party purchaser will then be without a home. Simcoe Ridge will have to carry this property and its costs for the duration of this action, which could be well over a year.

[35] I found that this factor also did not favour the motion.

Conclusion

[36] For these reasons, I found that in the interest of justice, and despite my reluctance to find no triable interest in land, I should dismiss the motion. That is what I did.

Costs

[37] Mr. Mazaheri did not file a costs outline. He said that his client claims $5,000 in costs. Mr. Lifshitz also did not file a costs outline, but said he had one prepared and that it showed $21,700 in full indemnity costs, $13,550 in substantial indemnity costs and $10,500 in partial indemnity costs.

[38] Mr. Mazaheri argued that I should order costs in the cause, or that the defendants receive partial indemnity costs of $10,500. Mr. Lifshitz argued that the defendants, as the successful parties, should get substantial indemnity costs of $13,550. He said that the defendants made a Rule 49 offer to settle the motion on April 18, 2022 whereby the parties agreed to dismiss the motion without costs. He argued that the plaintiff’s motion was tenuous at best and should not have been brought. He filed the costs outline on April 26, 2022.

[39] I have decided to award the defendants $10,500 in costs. The defendants were successful and deserve costs. The defendants’ filed costs outline diverges from Mr. Lifshitz’s oral statements as to what was contained in the costs outline. Therefore, I will not give credence to this costs outline. I will not order costs in the cause, as my mandate under the Rules is to avoid such an order. Given the plaintiff’s limited “success” on the issue of the whether he has a triable issue concerning an interest in the land, I am not prepared to order substantial indemnity costs.

[40] I order that the plaintiff pay the defendants partial indemnity costs of $10,500 in thirty days from today.

DATE: April 29, 2022

ASSOCIATE JUSTICE C. WIEBE