Court File and Parties
Court File No.: CV-21-674239-0000 Date: 2022-05-10 Superior Court of Justice - Ontario
Re: Wendy Warner, Plaintiff – and – Maarouf Ahmadi, Defendant
Before: E.M. Morgan, J.
Counsel: Shaneka Shaw Taylor, for the Plaintiff Eliezer Karp, for the Defendant
Heard: May 3, 2022
Motion for Summary Judgment
1The Plaintiff seeks summary judgment and an order for specific performance requiring the Defendant to complete an aborted real estate transaction.
I. Liability
2The action arises from the breach of an Agreement of Purchase and Sale dated August 18, 2021. The Plaintiff is the purchaser and the Defendant is the seller. The purchase price under the Agreement is $340,000.00 for the exclusive right to occupy and use Unit 312 at 800 Kennedy Road (the “Property”) and for 33 shares in the capital of 800 Kennedy Road Ltd., the title holder of the building which is organized as a condominium co-operative. The Agreement contained a number of conditions (financing, approval by the board, etc.) that were fulfilled by the Plaintiff in a timely fashion. The closing date, after being extended twice, was set at November 22, 2021.
3On November 4, 2021, the Defendant advised the Plaintiff that he would not be closing the transaction as scheduled as the sale was objected to by his spouse with whom he was engaged in family law litigation. Through his lawyer, the Defendant requested that the Plaintiff sign a Mutual Release terminating the Agreement. The Plaintiff was not prepared to sign the Mutual Release, and insisted that the Agreement remains in full force and effect.
4It is clear from the record that, whatever the Defendant may have thought on November 4th, by the time the closing date came around the Defendant’s spouse did not prevent closing. On November 18, 2021, the Defendant’s spouse obtained an Order from Justice Shore requiring the proceeds of any sale of the Property to be held in trust upon closing pending further court order or agreement of the Defendant and his spouse. In other words, the Court had already authorized the sale of the Property as a matter of the family law dispute between the Defendant and his spouse, and the spouse’s position was protected thereby allowing the Defendant to complete the sale.
5The Defendant was contractually obliged to close on November 22, 2021 and failed to do so. Paragraph 23 of the Agreement specifically provides that, “Seller warrants that spousal consent is not necessary to this transaction under the provisions of the Family Law Act, RSO 1990, unless the spouse of the seller has executed the consent hereinafter provided.” The consent referred to in this clause is not executed by the Defendant’s spouse (or by anyone else).
6Plaintiff’s counsel also submits that the Defendant’s advice to the Plaintiff that he was unwilling to close represents an anticipatory breach of contract. She contends that the Plaintiff would have closed on the closing date, but that given this anticipatory communication the Plaintiff assessed that it was pointless to go through the motions of a tender. She also submits that the Defendant had made it impossible for the Plaintiff to tender on the closing date, as the Defendant had not prepared a statement of adjustments for closing; accordingly, the Plaintiff would not know how much to tender and the Defendant’s anticipatory repudiation of the Agreement made a tender, and a closing, impossible.
7The Plaintiff was entitled to take the Agreement as a firm contract that was not conditional on any further spousal approval on the Defendant’s side. As this Court has stated on previous occasions,
Where a party advises they cannot close, had advised prior to closing that they cannot close, sought extension which is not granted and then does and says nothing regarding the closing, that party is the defaulting party in the transaction. Where the other party wants to and can close the agreement, they are the innocent party to the transaction.
Nutzenberger v. Mert, 2021 ONSC 36, at para 52.
8Defendant’s counsel attempts to bolster his argument by submitting that, notwithstanding the Defendant’s notification to the Plaintiff that he would not be closing the transaction, the Plaintiff, as purchaser, must show that she was ready, willing, and able to close on the appointed date: Time Development v. Bitton, 2018 ONSC 4384. He points out that the financing commitment letter that the Plaintiff has produced is dated for the original closing date in September 2021, and would have expired by the time the extended closing date of November 22, 2021 came around. On this basis, he submits that the Plaintiff has produced no evidence showing that she was in a financial position to close on that date.
9There is evidence in the record from the Plaintiff herself, who deposes in her affidavit that she would have been able to close. Plaintiff’s position is that she had not yet arranged the extension of the mortgage commitment with the bank, but there was no reason to do so until just prior to closing and no suggestion whatsoever from the bank that the commitment would not be extended; from her financial point of view, nothing had changed in the two months from September to November. In fact, three days before the closing date she provided her lawyer with a bank draught for the $126,925.83 difference between the mortgage commitment of $220,000 and the closing price. She had also obtained insurance for the Property and, at her own effort and expense, had obtained the corporate board’s approval of her purchase.
10All of this goes to demonstrate that the Plaintiff was prepared to close; none of it suggests that she would not have been in a position to do so. In my view, the Defendant is grasping at straws to try to show that although one might think he was at fault, the Plaintiff is really the one to blame for her loss. But she was not. The Defendant had anticipatorily breached the Agreement, and the evidence in the record establishes that the Plaintiff was the innocent party.
II. Remedy
11The real issue between the parties is not liability, but remedy. Is the Plaintiff, as disappointed purchaser under the breached Agreement, entitled to specific performance or is she entitled to damages only?
12In Semelhago v. Paramadevan, [1996] 2 SCR 415, at para 22, the Supreme Court of Canada held that specific performance is not to be granted in breaches of contract cases pertaining to the sale of real property unless there is evidence that the property is unique such that its substitute is not readily available. This “uniqueness” test has been the subject of much jurisprudence over the years since the Semelhago ruling. The courts have ultimately concluded that “unique” in the context of the specific performance remedy does not literally mean ‘one of a kind’. Justice Lax put it as follows in John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd. (2001), 56 OR (3d) 341, at para 60:
It is important to keep in mind that uniqueness does not mean singularity. It means that the property has a quality (or qualities) that makes it especially suitable for the proposed use that cannot be reasonably duplicated elsewhere. To put this another way, the plaintiff must show that the property has distinctive features that make an award of damages inadequate. The plaintiff need not show that the property is incomparable.
13Generally, the assessment of uniqueness considers all of the circumstances of the Property, including: the purchaser’s “wish list”, the market conditions, the location, the type of home, the condition of the home, the lot, the finished areas of the home, the quality of finishes, the availability of comparable homes with similar attributes in the same price range, and the proximity to certain amenities: Datta v. Eze, 2020 ONSC 4796, Ahmad v. Ashask, 2022 ONSC 1348.
14In addition, to be identified as similar, an alternate property must be available on similar financial terms as the original Property: Lucas v. 1858793 Ontario Inc. (Howard Park), 2021 ONCA 52, at para 84. It must also be realistically available for the Plaintiff to purchase. This point was made decisively by Charney J. in Sivasubramaniam v. Mohammad, 2018 ONSC 3073, at para 84:
The question of uniqueness is not just whether there are other similar homes in the same neighbourhood or subdivision, but whether any of those homes were “readily available” for the applicant to purchase when the respondent breached the APS. When the housing market is characterized by rapid price increases, affordability becomes an important factor in the analysis: Sutton v. Sodhi, 2017 BCSC 325 at para. 22. The availability of similar homes outside of the applicant’s price range does not, in my view, qualify as a “readily available” substitute.
15The Defendant has appended to his affidavit a list of properties that he contends were available and that the Plaintiff could have purchased in place of the subject Property. Ruth-Anne Shallow, the Plaintiff’s real estate broker, addresses all four properties that the Defendant’s counsel relies on as comparatives, and points out that they were all above the Plaintiff’s maximum price point of $400,000. She states:
- At Exhibit H, Mr. Ahmadi appends the listing for four such properties: (a) #501-921 Midland Avenue, Toronto, MLS#E5542234 which is listed for $395,000;
(b) #204-825 Kennedy Road, Toronto, MLS #E5537574 which is listed for $399,000; (c) #107-45 Sunrise Avenue, Toronto, MLS #C5541576 which is listed for $399,900; and (d) #105A-150 St Clair Avenue West, Toronto, MLS #C5519709 which is listed for $368,000.
- I have reviewed the above listings and note that: (a) #501-921 Midland Avenue sold on March 25, 2022 for $499,000;
(b) #107-45 Sunrise Avenue sold on March 22, 2022 for $512,000; (c) #204-825 Kennedy Road, Toronto is taking offers on March 28, 2022. This property is not a valid comparable as the maintenance fee is almost $200 per month higher than the subject Property, and it does not include hydro and taxes which the subject Property does. I also expect this property to sell for over the asking price as the last two sales in that building for a 2-bedroom unit were $450,000 and $427,500 respectively; and (d) #105A-150 St Clair Avenue West, Toronto is a 0-499 square feet co-op apartment. This is not a valid comparable and further, it is listed for $28,000 more than Wendy purchased the subject Property for.
16The Plaintiff deposes that the subject Property had fit her notion of the ideal home. It was in the neighbourhood she considered most desirable and was at her ideal price point. She testified that it was to become her forever home. There is nothing in the record to suggest that anything truly comparable to this Property was available to her.
17Defendant’s counsel also submits that the Plaintiff has failed to mitigate her damages. The record shows that she has not actively sought to buy another property. Indeed, even when she began looking at other properties in March 2022, she states that it was not to seriously shop for a new property but to investigate the market and to see the level of house prices some four months after the aborted sale.
18Generally, the Defendant has the burden of proof of failure to mitigate and of establishing that mitigation is even possible. In Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51, [2012] 2 SCR 675, at para 31, the Court observed that, “Specific performance is an equitable remedy that is difficult to reconcile with the principle of mitigation.” The Court went on to reason, at para 36, that a purchaser need not attempt to mitigate at all if there is a “fair, reasonable, and substantial justification for the claim of specific performance”.
19Given that the record shows that there were no reasonable or similar substitutes available for the subject Property, the Plaintiff was justified in considering it to be unique within the meaning of Semelhago, supra – i.e. sufficiently within the Plaintiff’s ideal property that an award of damages would not do justice to the Defendant’s breach. In that respect, it is entirely understandable that she did not spend effort in attempting to purchase another, dissimilar property.
20Furthermore, Plaintiff’s counsel points out that the Plaintiff’s $50,000 deposit is still being held by the Defendant’s real estate agent. That failure to refund the deposit was not only unjustifiable given the position that the Defendant was taking that the transaction was at an end, but it made it even more difficult for the Plaintiff to make an offer on another property.
21I find that the Plaintiff was not obliged to attempt to mitigate damages, as she had a fair, reasonable, and substantial justification for putting forward a claim of specific performance. Moreover, the Defendant has failed to show that mitigation was even possible or that any suitable properties were available for the Plaintiff to purchase in mitigation of her loss.
III. Disposition
22There is no issue here requiring a trial. Summary judgment is granted in favour of the Plaintiff.
23The Plaintiff shall have a Declaration that the Agreement between the parties relating to the Property is valid, binding, in full force and effect, and that the Defendant has breached the Agreement.
24There shall be an Order for specific performance of the obligations of the parties under the Agreement, requiring the Defendant to complete the transaction of purchase and sale as provided for in the Agreement by selling the Property to the Plaintiff. The Defendant shall apply any deposit paid by the Plaintiff as credit toward the purchase price of the Property, and the balance of the purchase price owing shall be paid by the Plaintiff on closing. The closing of the transaction shall take place within 60 days of the date hereof on a date to be agreed upon by the parties, unless that outside date is further amended by Order of this Court.
25The parties may make written submissions on costs. I would ask counsel for the Plaintiff to provide brief submissions within two weeks of today and counsel for the Defendant to provide equally brief submissions within two weeks thereafter. The costs submissions may be emailed directly to my assistant.
Date: May 10, 2022 Morgan J.