ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
FORTUNATO SANSALONE
Plaintiff
– and –
PEI MING QIU
Defendants
Robert J. Fenn and Izaak de Rijcke for the Plaintiff
Mark Donald for the Defendant
HEARD: Oral Submissions made November 18, 2021, followed by supplemental written submissions on December 3, 2021 and December 17, 2021
Corrected Ruling: The text of the original Ruling was corrected on January 31, 2022.
The description of the correction is appended.
RULING ON MR. SANSALone’s SUMMARY JUDGMENT MOTION
C. boswell j.
I.
1It is almost inconceivable now, but in the second half of 2017 there was a precipitous fall-off in the residential real estate market in Ontario. Nowadays, venders seem to have queues of willing purchasers prepared to bid “over asking” for the chance to buy. That was not the case in late 2017.
2Mr. Qiu agreed, in May 2017, to buy Mr. Sansalone’s property in Whitchurch-Stouffville, with a closing date in November of that same year. But Mr. Qiu failed to complete the transaction. Mr. Sansalone re-listed his property but was unable to find a purchaser willing to pay what Mr. Qiu had agreed to pay. He eventually sold the property, but at a loss.
3Mr. Sansalone sues Mr. Qiu for damages of roughly $205,000. He moves for summary judgment, asserting that Mr. Qiu has failed to raise a genuine issue in defence to his claim that would require a trial to resolve.
4The following reasons explain why I agree that summary judgment should be granted in this case.
THE LIVE ISSUES
5Mr. Sansalone’s claim is relatively straightforward. Three facts are clear. First, an agreement was reached between the parties with respect to Mr. Qiu’s purchase of Mr. Sansalone’s property. Second, Mr. Qiu failed to close the transaction. Third, Mr. Sansalone had to cover the carrying costs of the property for another three months pending its resale, which occurred at an amount $120,000 less than what Mr. Qiu agreed to pay.
6What is really in contention in this motion is whether any of Mr. Qiu’s defences raise a genuine issue for trial. And there are many of them. Mr. Qiu’s approach to the litigation is much like throwing a handful of wet spaghetti at the wall, hoping that at least one noodle sticks. Some of the defences are more developed than others, but Mr. Qiu has put them all in play, so I will have to address them all.
7In the result, determining whether a genuine issue for trial exists engages the court in an analysis of the following defences:
(a) Intoxication.
(b) Non est factum.
(c) Undue influence.
(d) Duress.
(e) Unconscionability.
(f) Fraudulent, or in the alternative, negligent misrepresentation. And,
(g) A failure to mitigate damages.
8Mr. Qiu also asserts, as an overarching submission, that the dual agent, Mr. Montesano, breached certain fiduciary duties he owed to Mr. Qiu. Mr. Qiu contends that Mr. Sansalone is vicariously liable for the agent’s breaches.
9Finally, Mr. Qiu submits that judgment ought not to be granted on the motion because it will amount to partial summary judgment. Mr. Qiu has an outstanding third party claim against the realtor, which is not engaged in this motion. Mr. Qiu submits that there are complex issues that are interwoven between the main action and the third party action. He says that a risk of inconsistent findings will be created if judgment is granted in the main action, without simultaneous adjudication on the third party claim.
10Given the positions taken by the parties – in particular by Mr. Qiu – this ruling must cover a lot of ground. A brief roadmap may assist.
11I will proceed as follows. First, I will set out the particulars of the subject transaction. I will then describe the lawsuit, with particular emphasis on the defences raised. Next, I will provide an overview of the evidence adduced on the motion. With that background in place, I will embark on an analysis of the live issues. That analysis will begin with a general overview of the legal principles that govern summary judgment motions. It will continue with an examination of the defences advanced by Mr. Qiu with a view to determining whether any of them raise a genuine issue requiring a trial to resolve. After concluding that they do not, I will assess Mr. Sansalone’s damages and, finally, dispose of Mr. Qiu’s request to stay the enforcement of the judgment.
II.
THE TRANSACTION
12Mr. Sansalone was, prior to February 28, 2018, the sole registered owner of a parcel of land located at 13929 Woodbine Avenue, Whitchurch-Stouffville. The land included a modest residence which was rented out to a tenant.
13On May 1, 2017 Mr. Sansalone listed the property for sale with a real estate brokerage called The Agency Realty Inc. The listing agent was Nick Montesano, a long-time friend of Mr. Sansalone’s. The list price was $1,888,888.88.
14On May 4, 2017, Mr. Qiu contacted Mr. Montesano, expressing an interest in the property. The two met at a coffee shop in Toronto the next day. Mr. Qiu says the meeting lasted about ten minutes. It was long enough for Mr. Qiu to express an interest in making an offer to purchase the property. He and Mr. Montesano agreed they would meet again later that evening at Mr. Qiu’s residence, where an offer would be drawn up.
15Mr. Qiu did not have his own real estate agent. He agreed that Mr. Montesano could jointly act for him and Mr. Sansalone with respect to the purchase and sale of Mr. Sansalone’s property. He signed a Confirmation of Co-Operation and Representation Agreement (hereafter the “Buyer’s Representation Agreement”) with Mr. Montesano on May 5, 2017, notwithstanding that Mr. Montesano advised him that he and Mr. Sansalone were friends.
16At any rate, Mr. Qiu made an offer on May 5, 2017 to purchase Mr. Sansalone’s property at a price of $2.1 million. The offer included a requisition date of November 15, 2017 and a closing date of November 30, 2017. It required a $100,000 deposit.
17Mr. Qiu’s offer was accepted by Mr. Sansalone and became a binding agreement of purchase and sale on May 5, 2017.
18The May 5, 2017 Agreement of Purchase and Sale was prepared on the Ontario Real Estate Association’s standard form. Schedule “A” to the agreement included a number of “custom” provisions including the following:
- The parties hereto acknowledge that the subject property is located within the Oak Ridges Moraine Conservation Plan and is subject to the provisions of the Oak Ridges Moraine Conservation Act, 2001. The Buyer acknowledges that the Seller has made this disclosure. The Buyer accepts the property with this designation and agrees to continue with this transaction.
19On May 10, 2017 Mr. Sansalone and Mr. Qiu executed a mutual release with respect to the Agreement of Purchase and Sale dated May 5, 2017. On that same date they entered into a fresh Agreement of Purchase and Sale on almost identical terms as the May 5, 2017 agreement.
20The price, requisition date and closing date were, for instance, all identical. The only significant change was the addition of the following two paragraphs to Schedule “A”:
The Buyer agrees that the $100,000 deposit submitted herewith is non-refundable failing successful completion by the Buyer on closing.
The Buyer acknowledges that they are aware the subject property is located within the Toronto Region and Conservation Authority. As such the Buyer acknowledges that any development/re-development of the subject property may require a permit from the Toronto Region and Conservation Authority.
21Exactly why the May 5, 2017 Agreement of Purchase and Sale was scuppered in favour of the May 10, 2017 Agreement of Purchase and Sale is a matter of some mystery. Mr. Sansalone offered no explanation in the affidavit evidence he filed in support of his motion. Mr. Qiu deposed only that Mr. Montesano demanded, on May 10, 2017, that he sign an updated version of the Agreement of Purchase and Sale, which he did.
22On November 30, 2017, Mr. Qiu advised that he was not in a position to close the transaction. In the result, Mr. Sansalone re-listed the property for sale at once. He entered an Agreement of Purchase and Sale with Paul and Mala Brindley on December 13, 2017 at an agreed-upon purchase price of $1,980,000.00 with a closing date of February 28, 2018. The sale was completed in accordance with the terms of that agreement.
THE LAWSUIT
23Mr. Sansalone sues for damages he says he suffered as a result of Mr. Qiu’s failure to close the transaction on November 30, 2017. His claimed damages total $204,762.38 and include the following:
(a) The loss on the selling price $120,000.00
(b) Three months interest on his outstanding mortgage 370.80
(c) Renewal fee for his outstanding mortgage 369.92
(d) Lost interest on the sale proceeds he would have earned 16,569.90
(e) Equipment storage fees 1,779.75
(f) Home insurance for three months 300.00
(g) Three months realty taxes 962.01
(h) Additional real estate commissions 64,410.00
24Mr. Qiu delivered a Statement of Defence to Mr. Sansalone’s claim on September 11, 2018. He asserts that the May 5, 2017 Agreement was not enforceable because:
(a) He was intoxicated at the time he signed the Agreement and was “incapable of providing intelligent or informed consent”.
(b) Mr. Montesano fraudulently or negligently misrepresented to him that he would be able to build a larger residence on the property. The property is, in fact, located within the Oak Ridges Moraine Conservation Plan and there are restrictions on building within that area. And,
(c) Mr. Montesano failed to explain the terms of the Agreement to him.
25He asserts that the May 17, 2017 Agreement was void or voidable because:
(a) The realtor applied undue influence.
(b) He signed the Agreement under duress. According to Mr. Qiu, it was signed “following Mr. Sansalone’s exercise of pervasive influence on Mr. Qiu through manipulation, coercion and/or use of power via the Realtors”.
(c) It is unconscionable “in that there was a substantial inequality in the positions of the parties, arising out of Mr. Qiu’s ignorance, need or distress, which was exploited by Mr. Sansalone via the Realtors”.
(d) It was ambiguous or incomplete. And,
(e) There was a lack of consideration.
26Finally, Mr. Qiu asserts that, even if the Agreement was valid, Mr. Sansalone is not entitled to damages because he failed to mitigate his damages and re-sold his property at an improvident price.
27On September 17, 2017, Mr. Qiu issued a third party claim against The Agency Realty Inc. and Nick Montesano, seeking contribution and indemnity for any amounts he may be found liable to pay Mr. Sansalone.
28In the third party claim, Mr. Qiu alleges that Mr. Montesano owed him a fiduaciary duty as a dual agent. He further alleges that Mr. Montesano breached his fiduciary duty by, amongst other things: failing to disclose the restrictions on building in relation to the property; failing to act in Mr. Qiu’s best interests; preferring Mr. Sansalone’s interests over his; and failing to negotiate the transaction in good faith.
29On November 22, 2018, the third parties filed a defence to the third party claim. Amongst other things, the third parties allege that:
(a) Mr. Qiu was not intoxicated when he signed the May 5, 2017 Agreement of Purchase and Sale.
(b) Mr. Qiu was never bullied into doing anything. He is a sophisticated businessman and his wife is an accredited realtor.
(c) Mr. Qiu advised Mr. Montesano on May 9, 2017 that he was intoxicated when he signed the May 5, 2017 Agreement of Purchase and Sale. Mr. Sansalone, in response, offered to release Mr. Qiu from the transaction. Mr. Qiu, nevertheless wanted to proceed with the transaction and a revised Agreement of Purchase and Sale was entered into on May 10, 2017.
(d) In mid-October 2017, Mr. Qiu advised Mr. Montesano that he was having difficulty securing financing. He requested that the price be reduced and the closing date extended. His request for a reduction in the purchase price was repeated on November 6, 2017.
(e) On November 30, 2017, Mr. Qiu advised that he could not close the transaction for financial reasons. And,
(f) Mr. Montesano denied that he breached any duties he owed to Mr. Qiu.
THE EVIDENCE
30The evidence adduced on the motion consisted of the following:
(a) The Affidavit of Mr. Sansalone sworn May 26, 2021.
(b) The Affidavit of Mr. Sansalone’s real estate lawyer, Mr. Phelan, sworn May 11, 2020.
(c) The Affidavit of Mr. Qiu worn August 22, 2021.
(d) The Affidavit of Barry Lebow sworn September 29, 2021. Mr. Lebow is Mr. Qiu’s expert on the issue of the duties owed by a real estate agent to his or her clients.
(e) The Supplemental Affidavit of Mr. Phelan sworn October 18, 2021.
(f) The Affidavit of Amber Kettlewell sworn October 19, 2021. Ms. Kettlewell is a legal assistant in the office of Mr. Sansalone’s counsel. And,
(g) Transcripts of the cross-examinations of Mr. Sansalone, Mr. Phelan and Mr. Qiu on their respective affidavits.
31Neither party filed any evidence from Mr. Montesano. Indeed, Mr. Montesano did not participate, in any way, in the motion.
32I do not intend to conduct an exhaustive review of the substance of the affidavits filed, or the cross-examinations. A relatively brief overview will do.
33I have already set out the particulars of the transaction and will not repeat them here.
34I am satisfied that there was a fully executed Agreement of Purchase and Sale dated May 10, 2017 between Mr. Sansalone and Mr. Qiu with respect to the subject property. The closing date was scheduled for November 30, 2017. There is no dispute that the transaction did not close. There is no real dispute that Mr. Sansalone was ready, willing and able to complete the transaction and that Mr. Qiu advised on November 30, 2017 that he was not in a position to close.
35The principal focus, in the circumstances, is on whether there is a genuine issue for trial with respect to the factors that Mr. Qiu says excused him from performance of the contract. The secondary focus is on whether there is a genuine issue for trial with respect to the quantum of damages.
First Contact
36Mr. Qiu deposes that he first contacted Mr. Montesano on May 4, 2017. He says he expressed an interest in purchasing Mr. Sansalone’s property but told Mr. Montesano that he did not have his own real estate agent. Mr. Montesano promptly advised him that he could act as a dual agent, for both him and Mr. Sansalone. He did not suggest that Mr. Qiu obtain his own agent, nor did he explain the ramifications of a dual agency.
The Alleged Misrepresentation
37Mr. Qiu says he met Mr. Montesano the following day at a Tim Horton’s where they discussed the property. Mr. Qiu says he asked Mr. Montesano if he would be able to build a new, much bigger house on the property. At the time there was only a small residence on the property and it was rented out to tenants.
38According to Mr. Qiu, Mr. Montesano told him that he could build a bigger residence and mentioned no impediments to doing so.
The May 5, 2017 Agreement
39That evening Mr. Montesano attended at Mr. Qiu’s residence for a meeting they had arranged earlier in the day. The plan was for Mr. Montesano to present “the necessary documents”. I understand Mr. Qiu to be saying that he expected Mr. Montesano to present him with a draft offer to purchase. An initial offer of $1.9 million was prepared. It went back and forth and ended up at an agreed-upon price of $2.1 million.
40Mr. Qiu deposes that he began drinking alcohol with friends at about 6:00 p.m. on May 5, 2017. Mr. Montesano arrived at between 8:00 and 9:00 p.m. Mr. Qiu says that he was inebriated and unable to provide “intelligent or informed consent” to the offers going back and forth. He says Mr. Montesano knew or should have known that he was in no condition to negotiate.
41Despite the offer going back and forth a number of times, Mr. Qiu did not, according to him, read it. He says that Mr. Montesano did not discuss its content with him or draw his attention to any specific provisions in it. Mr. Montesano did no more than point out where he was to sign.
The Visit to City Hall
42Mr. Qiu attended at the Stouffville City Hall on May 9, 2017 for the purpose of discussing the construction of his proposed new residence. He was advised that the property was within the Oak Ridges Moraine and that any new construction would require the approval of the Toronto Region Conservation Authority. He says this was all news to him; none of it had been explained to him by Mr. Montesano. In his view, the building restrictions “barred me from closing the transaction as contemplated in the first Agreement of Purchase and Sale.”
43According to Mr. Qiu, he contacted Mr. Montesano following his attendance at City Hall. He asked Mr. Montesano why he had not said anything about the restrictions. Mr. Montesano offered no answer. He asked Mr. Montesano if the purchase transaction could be made conditional upon his obtaining the necessary approvals to construct a new residence on the property. Mr. Montesano initially refused to even take the issue to Mr. Sansalone, but later relented, though he expressed little hope of an amendment.
44Later that day Mr. Qiu advised Mr. Montesano, for the first time, that he had been intoxicated when he signed the May 5, 2017 Agreement of Purchase and Sale.
The May 10, 2017 Agreement
45Mr. Qiu deposes that the next day, May 10, 2017, Mr. Montesano demanded that they meet at the same Tim Horton’s where they had first met on May 5. Mr. Montesano told him that he would be obliged to sign an updated Agreement of Purchase and Sale. Mr. Qiu says that he protested because Mr. Montesano had misled him about the ability to construct a new residence. But Mr. Montesano was insistent that he was obliged to sign a new agreement. He says “I was scared and felt obliged to defer to Mr. Montesano. I therefore signed the second Agreement of Purchase and Sale under duress.” He says Mr. Montesano made no effort to protect his interests when he demanded that the second Agreement of Purchase and Sale be signed.
46Similar to the situation with the May 5, 2017 Agreement, Mr. Qiu says Mr. Montesano did not review with him the content of the May 10, 2017 Agreement. He simply told him to sign it or risk being sued by Mr. Sansalone.
47Prior to signing the second Agreement of Purchase and Sale, Mr. Qiu and Mr. Sansalone each executed a mutual release, bringing the May 5, 2017 Agreement of Purchase and Sale to an end. Mr. Qiu says he has no recollection of signing that document.
48Mr. Qiu did not obtain legal advice about the content of the first or second Agreement of Purchase and Sale or the mutual release. He says Mr. Montesano never suggested that he obtain independent legal advice, despite the fact that both the May 5, 2017 and May 10, 2017 agreements contain the following provision:
- The Parties to this Agreement acknowledge that the real estate Broker(s) so named in this Agreement has recommended that the Parties obtain independent professional advice prior to signing this document…
The Failure to Close
49The transaction had a long closing date. A lengthy period of quiet followed the execution of the agreement on May 10, 2017.
50On October 19, 2017, Mr. Qiu and his wife, Yan Li Xue, purchased a property at 5 Kinghorn Road, King Township, for $1,576,702 in what appears to have been an all-cash transaction.
51On November 1, 2017 Mr. Qiu sent an email to Mr. Montesano. He indicated that he was having difficulty obtaining mortgage financing. He asked for a reduction of $120,000 off the purchase price and an extension of the closing date to December 11, 2017. He also asked that his wife be added to the transaction as a purchaser. He suggested that if Mr. Sansalone could not accept his suggested reduction in the purchase price, the property ought to be re-listed for sale.
52On November 13, 2017, Mr. Phelan advised Mr. Qiu’s lawyer, Mr. Lee, that Mr. Sansalone was prepared to extend the closing date to December 7, 2017 and to add Mr. Qiu’s wife to the transaction as a second purchaser. In exchange, Mr. Sansalone asked that Mr. Qiu permit him to continue to store equipment at the property for one year post-closing.
53November 15, 2017 was the deadline for Mr. Qiu to submit any requisitions regarding title to the property. No requisition letter appears to have ever been delivered to Mr. Sansalone’s counsel.
54Negotiations surrounding the price and the closing date continued on through the last week or so of November 2017. On November 22, 2017, Mr. Lee proposed that the closing date be extended to December 15, 2017, with a revised requisitions date of December 6, 2017. Mr. Qiu’s wife would be added as a purchaser. The purchase price would remain at $2.1 million.
55Mr. Phelan responded on November 24, 2017 essentially agreeing to the terms suggested by Mr. Lee but requiring that the $100,000 deposit be immediately released to Mr. Sansalone. Although I do not have the complete correspondence record, I am satisfied that the parties did not reach an agreement to extend the transaction.
56On November 30, 2017 at 10:47 a.m., Mr. Qiu emailed the following to his lawyer, Mr. Lee and Mr. Montesano:
Hi Mr. Lee; Karen & Mr. Nick
For the property address; 13929 Woodbine ave, stouffville, Ontario
Because my financial situation and in order to make the deal closing. I was try many time required amendment with seller.
But still unsuccessful to make deal with seller.
Now, I am sorry to tell that I can not closing the property. Please notice the seller.
Thank you !
57Notably, at no time did Mr. Qiu or his lawyer indicate that he was not prepared to complete the transaction due to (1) a misrepresentation; (2) a lack of understanding of the terms of the Agreement of Purchase and Sale; (3) coercion or undue influence; (4) unconscionability; (5) drunkenness; or (6) any other reason apart from Mr. Qiu’s inability to obtain sufficient financing.
The Cross-Examinations
58Mr. Sansalone and Mr. Phelan were cross-examined on their affidavits on November 4, 2021. Mr. Qiu was cross-examined on November 5, 2021. The examinations shed little light on any of the live issues in this case.
59Mr. Qiu’s examination is notable for one reason, however: the significant number of questions Mr. Qiu refused to answer. Granted, he did so on his lawyer’s advice and generally on the basis of a challenge to the relevance of the questions asked. In my view, some notable refusals were unjustified. For instance:
(a) He refused to answer questions about his business, even though his level of sophistication and his ability to speak and understand the English language are live issues. Questions about his business experience in Ontario are undoubtedly probative of his facility with the English language.
(b) He refused to answer questions about where he presently lives or where he lived at the time the transaction in issue was entered into, even though his experience in real estate transactions is squarely in issue.
(c) He admitted that he has experience in other real estate transactions but refused to answer questions about who he has used as a realtor in the past, even though he claims in this action that he was totally reliant on the realtor to explain the agreement to him and further, that he was coerced by the realtor into signing the May 10, 2017 Agreement.
(d) He refused to answer a question about whether he bought a property at 10 Foshan Avenue in Markham with his wife in August 2013, even though his experience in real estate transactions is undoubtedly an issue in this proceeding.
(e) He refused to answer any questions about what, if any, discussions he had with his real estate lawyer, Mr. Lee, about the May 10, 2017 Agreement.
(f) He refused to answer any questions about whether he has purchased other properties subsequent to November 30, 2017, despite there being a suggestion in this case that he and his wife are real estate investors. And,
(g) He refused to advise whether his wife is a real estate agent or broker, despite the obvious relevance of that question. In particular, that he may have had ready access to a licensed real estate agent to assist him at the time he claimed to have been coerced by Mr. Montesano.
III.
THE GOVERNING PRINCIPLES
60Mr. Sansalone moves for summary judgment under r. 20 of the Rules of Civil Procedure. Of particular significance here are rules 20.04(2) and (2.1), which provide as follows:
20.04(2) The court shall grant summary judgment if,
(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence; or
(b) the parties agree to have all or part of the claim determined by a summary judgment and the court is satisfied that it is appropriate to grant summary judgment.
20.04(2.1) In determining under clause (2) (a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:
Weighing the evidence.
Evaluating the credibility of a deponent.
Drawing any reasonable inference from the evidence
61The summary judgment rule has been around for decades. It is one of a suite of mechanisms contained in the Rules that enable parties to resolve or narrow issues – entire claims in some cases – without the need of a trial.
62The rule underwent a significant overhaul in 2010. Prior to that time, appellate jurisprudence constrained motions judges from weighing evidence or making credibility determinations on summary judgment motions. The utility of the rule was limited to weeding out clearly unmeritorious claims or defences.
63Growing concerns about access to civil justice drove innovation. In 2010, r. 20.04(2.1) was grafted onto the existing framework, substantially enhancing the motion judge’s fact-finding powers. The result was the creation of a model of adjudication that offered a significant alternative to the full machinery of a trial.
64The amendments came before the Supreme Court for consideration in Hyrniak v. Mauldin, 2014 SCC 7. The Court bluntly observed what civil law practitioners and litigants had known for years. Access to justice in civil cases was at a crisis point in Ontario. The Court called for a culture change – a fundamental shift in the business model. Justice Karakatsanis, writing for a unanimous court, described this culture shift, at para. 2 of the ruling, as follows:
This shift entails simplifying pre-trial procedures and moving the emphasis away from the conventional trial in favour of proportional procedures tailored to the needs of the particular case. The balance between procedure and access struck by our justice system must come to reflect modern reality and recognize that new models of adjudication can be fair and just.
65Rule 20 engages motions judges in the determination of whether there exists a genuine issue that requires a trial to resolve. Hyrniak instructs that there will be no genuine issue requiring a trial when the motion judge is able to reach a fair and just determination on the merits on the evidentiary record presented on the motion:
This will be the case when the process (1) allows the judge to make the necessary findings of fact, (2) allows the judge to apply the law to the facts, and (3) is a proportionate, more expeditious and less expensive means to achieve a just result. (Hryniak, para. 49).
66Although the rule does not, on its face, appear to require a staged analysis, Hryniak instructs that rule 20.04(2) should, in fact, be applied in two stages.
67First, the motions judge must determine if there is a genuine issue requiring a trial based only on the evidence filed on the motion, without resort to the enhanced fact-finding powers described in rule 20.04(2.1). No genuine issue requiring a trial will exist if the evidence permits the motions judge to fairly and justly adjudicate the dispute in a timely, affordable and proportionate manner. If no genuine issue requiring a trial exists, judgment should be rendered accordingly.
68If the motions judge concludes at the first stage that a genuine issue for trial exists, then stage two is triggered. At stage two, the motions judge is directed to consider whether the need for a trial may be avoided by resort to the enhanced fact-finding powers set out in r. 20.04(2.1). The motions judge may utilize those powers, in his or her discretion, unless doing so would be contrary to the interests of justice.
69A great deal of jurisprudence has developed in relation to summary judgment motions, both before and after the 2010 amendments. Much of the pre-2010 jurisprudence remains valid. In addition to the principles enunciated in Hyrniak, the following others have emerged over the years and continue to apply:
(a) The moving party continues to bear the legal and persuasive burden to establish that there is no genuine issue requiring a trial to resolve.
(b) The responding party continues to bear an evidentiary burden to establish that there is a genuine issue requiring a trial.
(c) Each party must “put their best foot forward”. Neither may rest on the allegations in their pleadings. And,
(d) The court is entitled to assume that the record before it contains the core substance of the evidence that the parties will present at trial.
70See Dawson v. Rexcraft Storage & Warehouse Inc., 1998 CanLII 4831 (ON CA), [1998] O.J. No. 3240 (C.A.) at para. 17; Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 at paras. 26 and 32; and Penretail Management Ltd. v. 2380462 Ontario Inc. (o/a Bolton Health Centre), 2016 ONSC 600, at para. 10.
IV.
DISCUSSION
71The overarching issue on the motion is whether there is a genuine issue that requires a trial to resolve. Determining that issue will require a consideration of each of the defences raised by Mr. Qiu, the law that governs them, and the evidence connected to each one. In addition, it will be necessary to address Mr. Qiu’s assertion that what Mr. Sansalone is seeking is partial summary judgment, which ought not to be granted in view of the inherent risks associated with it.
72As I indicated, the parties executed two separate agreements of purchase and sale, one on May 5, 2017 and the second on May 17, 2017. Some of the defences raised by Mr. Qiu relate solely to the May 5, 2017 agreement, while others relate to the later agreement. As I will explain below, the plaintiff sues only on the May 10, 2017 agreement.
73I will consider Mr. Qiu’s defences one-by-one.
Defences to the May 5, 2017 Agreement
74Mr. Qiu pleads that the May 5, 2017 agreement is not enforceable because (a) he was intoxicated when he signed it; (b) Mr. Montesano misrepresented the feasibility of building a new home on the property; and, (c) Mr. Montesano did not explain the Agreement to him. I understand this assertion to be one of non est factum.
75There is a simple and straightforward reason why none of the defences to the May 5, 2017 Agreement raise a genuine issue for trial. Specifically, the plaintiff is not suing to enforce that Agreement. The parties released each other from its terms. The plaintiff sues on the Agreement dated May 10, 2017.
76Having said that, there are other reasons to reject these defences both with respect to to the May 5, 2017 Agreement and the May 10, 2017 Agreement. I will take a moment to explain them, starting with the defence of intoxication.
(a) Intoxication
77In his factum, Mr. Qiu’s counsel contended that it is uncontradicted that Mr. Qiu was “drunk” and that he was in an inebriated and incapacitated state on the night of May 5, 2017 when the first Agreement was signed.
78Mr. Qiu’s evidence, however, is not so compelling. He says, at paras. 16-17 of his affidavit sworn August 22, 2021:
Starting at about 6:00 p.m. that evening, I had been socially drinking with friends.
Because of my inebriated state, I was incapable of providing intelligent or informed consent to the negotiations taking place.
79Neither party provided the court with any jurisprudence on the legal effect of intoxication on the formation of a binding contract. It would appear, however, that for at least 100 years, the law in this province has been that a contract entered into by an intoxicated person may be set aside for lack of consent if the person was so intoxicated that he or she was incapable of understanding what he or she was doing and if the other party was aware of the intoxication. See Bawlf Grain Co. v. Ross (1917), 1917 CanLII 51 (SCC), 55 S.C.R. 232. See also Williams v. Condon, 2007 CanLII 14925 (ON SC), [2007] O.J. No. 1683 (S.C.J.) at para. 21.
80It is remarkable that Mr. Qiu would drink himself to the point of incapacity knowing that a real estate agent was soon to come by his home to complete an offer on a $2 million property. Indeed, I find it so remarkable as to stretch credulity. Mr. Qiu, in any event, provided no evidence of what he drank, or in what quantities between 6:00 p.m., when he started drinking, and 8:00 p.m. when the realtor arrived. He offered no particulars of the effect of the alcohol on him, apart from the self-serving statement that he was “inebriated”. The record appears clear that, at the very least, he understood that he was negotiating back and forth to conclude an agreement to purchase Mr. Sansalone’s property. He was, in other words, capable of understanding what he was going.
81The defence of intoxication does not raise a genuine issue for trial with respect to the enforceability of either the May 5, 2017 Agreement or the May 10, 2017 Agreement.
(b) Misrepresentation
82There are two broad categories of misrepresentation: negligent and fraudulent. The evidentiary record does not provide support for a finding of fraudulent misrepresentation. Fraudulent conduct involves, amongst other elements, an intentional deception. The evidence now before the court is not sufficient to establish the requisite state of mind of Mr. Montesano.
83In terms of negligent misrepresentation, Mr. Qiu’s assertion is that Mr. Montesano negligently advised him that it would be possible to construct a new residence on the subject property, when in fact, the lands are subject to significant building restrictions, given that they are part of the Oak Ridges Moraine.
84Mr. Qiu filed the affidavit and attached report of Barry Lebow, a purported expert on the duties and obligations of real estate agents, particularly when acting in a dual agency capacity. At page 19 of his report, Mr. Lebow noted that Mr. Qiu had advised Mr. Montesano of his desire to build a new house on the subject property. Mr. Lebow opined that in those circumstances Mr. Montesano had a positive obligation to make inquiries on Mr. Qiu’s behalf to ensure that the planned construction could proceed.
85I have already noted that the operative agreement, for the purposes of this lawsuit, is the May 10, 2017 Agreement. The day before that agreement was signed, Mr. Qiu attended at the Whitchurch-Stouffville municipal offices and satisfied himself as to what requirements needed to be met in order for him to build a new home on the subject lands.
86Mr. Qiu, in other words, entered the May 10, 2017 Agreement with his eyes open in terms of the restrictions on building. By that point, he was clearly not relying on any representations made by Mr. Montesano.
87In any event, a successful negligence claim has four essential elements. The plaintiff must establish that: (1) the defendant owed him or her a duty of care; (2) the defendant's conduct breached the applicable standard of care; (3) the plaintiff sustained compensable damage; and (4) the damage was caused, in fact and in law, by the defendant's breach. See Turcotte v. Lewis, 2018 ONCA 359 at para. 43.
88Mr. Qiu has failed to demonstrate that he sustained compensable damages that were caused by a negligent misrepresentation. For reasons best known to him, his real estate lawyer did not submit a requisition letter to Mr. Sansalone’s real estate lawyer. He never raised any issue relating to building restrictions. When Mr. Qiu wrote to Mr. Montesano on November 30, 2017 to advise that he could not close the purchase, he did not mention anything about any building restrictions. He said he could not close because of his financial circumstances.
89It will remain a mystery whether Mr. Qiu could ultimately have constructed a new home on the subject property had he closed the transaction. But it is no mystery that Mr. Qiu’s assertion of negligent misrepresentation fails to raise a genuine issue for trial.
(c) Non Est Factum
90Mr. Qiu pleads the doctrine of non est factum at para. 55 of his Statement of Defence and raises it again at para. 7 of his factum. His counsel did not otherwise develop an argument relating to the pleading or to the application of the doctrine in general.
91Again, neither party provided the court with any case law on the issue.
92Non est factum is a defence of mistake. The Supreme Court has described it as a mistake of “the mind not following the hand”. See Marvco Colour Research Ltd. v. Harris, 1982 CanLII 63 (SCC), [1982] 2 S.C.R. 774. Its essential elements were described by the Court of Appeal in Bulut v. Carter, 2014 ONCA 424, at para. 18, as follows:
The defence of non est factum is available to someone who, as a result of misrepresentation, has signed a document mistaken as to its nature and character and who has not been careless in doing so.
93The mistake must be as to the nature and character of the instrument and not merely its contents: Marvco, as above.
94If made out, the contract in issue is void ab initio.
95In my view, the defence of non est factum does not, in the circumstances of this case, raise a triable issue.
96Mr. Qiu’s evidence is that he has limited facility with the English language. He says that Mr. Montesano had a duty to carefully review with him the contents of the Agreements he signed both on May 5, 2017 and May 10, 2017. Mr. Montesano, according to Mr. Qiu, breached that duty, such that he was not fully aware of all of the terms of the signed Agreements.
97What is missing here is any suggestion that Mr. Qiu was unaware of the nature or character of either Agreement. There is no suggestion that Mr. Montesano misrepresented the nature or character of the documents to Mr. Qiu. Indeed, the record is clear that Mr. Qiu knew that he was entering into an agreement to purchase Mr. Sansalone’s property. He is the one who initiated discussions with Mr. Montesano. He invited Mr. Montesano to attend at his residence with the necessary paperwork to submit an offer to purchase.
98Mr. Qiu is not unsophisticated. He is a businessman. He has entered into more than one real estate deal in Ontario. He knew the nature of what he was signing both on May 5 and May 10, 2017.
99Mr. Qiu unreasonably refused to answer questions on his cross-examination that would have enabled the plaintiff’s lawyers to probe his facility with the English language. His refusals support the drawing of an adverse inference that the answers to the questions refused would not have aided his case. In other words, that his facility with the English language is not as poor as he suggests.
100In any event, the record is clear, in my view, that Mr. Qiu understood the nature and character of the documents he was signing. The plea of non est factum does not assist him with respect to either the May 5, 2017 or the May 10, 2017 Agreements.
Defences to the May 10, 2017 Agreement
101As I noted, Mr. Qiu asserts that the May 10, 2017 Agreement is void or voidable for a number of reasons, including: (a) The realtor failed to explain its terms (again I understand this to be an assertion of the doctrine of non est factum; (b) The realtor applied undue influence; (c) He signed the Agreement under duress; (d) It is unconscionable; (e) It was ambiguous or incomplete; and (f) There was a lack of consideration. He also asserts that Mr. Sansalone failed to mitigate his damages.
102I find that none of the defences advanced with respect to the May 10, 2017 Agreement raises a genuine issue for trial. I will consider them one-by-one.
(a) Non Est Factum
103This defence fails to raise a genuine issue for trial for the same reason it fails in relation to the May 5, 2017 Agreement. Mr. Qiu understood the nature of the document he was signing.
104I would also find that Mr. Qiu failed to exercise reasonable care in signing the May 10, 2017 Agreement. He claims to have not understood its terms and to have signed it under pressure. But there is no reasonable explanation offered for why he did not make inquiries of Mr. Montesano or another agent as to its contents. Moreover, it would not have come as a surprise to Mr. Qiu that he was not proficient in the English language, if in fact that was true. There is no explanation offered for why he took no steps to have the Agreement explained to him by someone in Mandarin. Similarly, there is no explanation as to why he did not seek legal advice regarding its terms or the purported assertion of the realtor that he had no choice but to sign it.
105A party who fails to exercise reasonable care in signing a document may not rely on the defence of non est factum. See Forest Hill Homes v. Kay Hon, 2020 ONSC 6321 at para. 25.
(b) to (d) Undue Influence, Duress and Unconscionability
106I am approaching the three defences of undue influence, duress and unconscionability together because, as I understand Mr. Qiu’s position, they all flow from the allegation that Mr. Montesano unfairly pressured Mr. Qiu to sign the May 10, 2017 agreement.
107To recap, Mr. Qiu’s evidence is that:
Mr. Montesano demanded that they meet at a Tim Horton’s restaurant on May 10, 2017.
Mr. Montesano did not review the agreement with him.
Despite Mr. Qiu’s protests, Mr. Montesano was adamant that Mr. Qiu was obliged to sign the new agreement.
Mr. Montesano pressured him and told him he had no choice but to sign.
He was scared and felt obliged to defer to Mr. Montesano. And,
He signed the May 10, 2017 agreement under duress.
108Again, neither counsel provided me with any case law regarding the legal framework to be applied when assertions of undue influence, duress and unconscionability are made. In my view, these defences were not fully fleshed out in either the written or oral arguments.
109A common purpose is served by the defences of undue influence, duress and unconscionability. Each allows the court to set aside a contract where unfair advantage has been taken of a weaker party by a stronger party.
Undue Influence
110The equitable doctrine of undue influence, and the application of the presumption of undue influence, are discussed by the Supreme Court in Geffen v. Goodman Estate, 1991 CanLII 69 (SCC), [1991] 2 S.C.R. 353.
111The doctrine of undue influence is not designed to protect people from their own folly, but rather to save them from being victimized by other people. See Geffen, para. 23. Equity will intervene to set aside gifts or transactions where procured by undue influence.
112The law recognizes that undue influence may arise in two classes of case. First, where there has been some unfair and improper conduct, coercion, overreaching, cheating and, typically, personal advantage obtained by a donee who is in a close and confidential relationship to the donor. Second, where the relationship between the donor and donee, coupled by the nature of the transaction between them gives rise to a presumption of undue influence. See Geffen, para. 26 and JGB Collateral, LLC v. Rochon, 2020 ONCA 464 at para. 7.
113To trigger the presumption of undue influence, the relationship between the parties must reflect a potential for domination. Moreover, in commercial transactions, the plaintiff must be able to show that she or he was truly disadvantaged by the contract or that the defendant was unduly benefitted by it. This latter requirement pays homage to the long-held view of the courts that “the sanctity of bargains should be protected unless they are patently unfair. See Geffen, paras. 39 and 43.
Duress
114Duress, economic or otherwise, can render an agreement unenforceable against a party compelled by the duress to enter into it.
115Parties often enter into agreements, both good and bad, as a result of felt pressures, both real and imagined. Not all forms of pressure will constitute duress. Two elements are required. First, the alleged pressure exerted on the defendant must have been illegitimate. Second, the pressure must have been exerted to such a degree as to amount to “a coercion of the will”. See Taber v. Paris Boutique & Bridal Inc., 2010 ONCA 157.
Unconscionability
116A finding of unconscionability is also a sufficient basis upon which to render a contract unenforceable.
117There are three elements to the doctrine of unconscionability. First, there must be a pronounced inequality of bargaining power between the parties. Second, the stronger party must knowingly take advantage of the weaker party. Third, the result must be a substantially improvident or unfair bargain. See Titus v. William F. Cooke Enterprises Ltd., 2007 ONCA 573 at paras. 36-38 and Ritchie v. Castlepoint Greybrook Sterling Inc. 2020 ONSC 3840 at para. 73
Analysis
118The evidentiary record simply does not support the conclusion that the May 10, 2017 Agreement of Purchase and Sale was an unfair bargain for Mr. Qiu. Accordingly, even if there was undue influence – and I am not satisfied that there was – the resulting agreement did not truly disadvantage Mr. Qiu. And if there was an inequality of bargaining power – and I am not satisfied that there was – the resulting agreement was not substantially improvident.
119Moreover, I am not satisfied that the evidentiary record is sufficient to raise a genuine issue for trial with respect to the assertion of duress. At its highest and best, Mr. Qiu complains that the dual agent, Mr. Montesano, insisted that he had no choice but to sign the May 10, 2017 agreement. He fails to elaborate on what he understood the pressure to be. In other words, what he understood may happen if he failed to sign. He has, in any event, insulated the record from any evidence that might provide context to the dynamic of his relationship with Mr. Montesano and any vulnerability he may have had in that relationship. In particular, he refused, on cross-examination, to answer questions about his business experience, his experience in real estate transactions and whether his wife is a realtor.
120I pause to comment on the issue regarding the occupation of Mr. Qiu’s wife. Mr. Sansalone contends that she is a realtor. He considers that to be of some significance and it is mentioned repeatedly in his factum. Yet the record before me contains no admissible evidence that she is a licensed real estate agent or broker in this province. Mr. Qiu, as I said, refused to answer a question put to him in cross-examination about whether she works as a realtor. At some point, Mr. Sansalone’s counsel did some legwork and located certain documentation that strongly points towards the conclusion that she is an active real estate agent. That documentation was filed as an exhibit to Mr. Sansalone’s factum. Ordinarily factums do not have exhibits. And a document affixed to a factum does not form a part of the evidentiary record on a motion.
121Having said all of that, I am entitled to proceed on the basis that the record before me on this motion reflects the quality of the record that would be before the court at a trial. The record now before me is, in my view, clearly insufficient to support a finding of duress.
(e) and (f) Ambiguity, Incompleteness and Absence of Consideration
122I will deal with Mr. Qiu’s assertions that the May 10, 2017 Agreement is void for ambiguity, incompleteness or lack of consideration together because my assessment of each of these three assertions is the same.
123Mr. Qiu’s counsel did not address any of these issues in his written or oral argument. Reviewing Mr. Qiu’s pleading is of no assistance to me in understanding how these defences might operate in the circumstances of this case. In my view, these defences are not being seriously pursued. None of them raises a genuine issue for trial.
(g) Failure to Mitigate
124Canadian contract law requires innocent parties to take all reasonable steps to mitigate their losses occasioned by another party’s breach of contract. A failure to do so will bar any part of the damages which are due to the plaintiff’s failure to take such steps. See Asamera Oil Corp. v. Seal Oil & General Corp., 1978 CanLII 16 (SCC), [1979] 1 S.C.R. 633, at pp. 660-61.
125The steps that a party must reasonably take in mitigation are dependent on the prevailing circumstances, including market conditions. See 100 Main Street Ltd. v. W.B. Sullivan Construction (1978), 1978 CanLII 1630 (ON CA), 20 O.R. (2d) 401.
126In this case, the alleged failure to mitigate is grounded in the assertion that Mr. Sansalone resold his lands at an improvidently low price.
127It is well-settled that the onus of proof to establish a failure to mitigate is on the party asserting the failure. See, for instance, Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51 at para. 24. In this case that means Mr. Qiu bears the onus to establish that the property was resold at an improvident price.
128Mr. Qiu has not filed any evidence to support his assertion of improvident sale. One would expect, at the least, an appraised value of the property as of the date of sale to compare to the price achieved by Mr. Sansalone.
129The bald assertion of improvident sale does not raise a genuine issue for trial.
The Allegation of a Breach of Fiduciary Duty
130One of the struggles I have had in crafting these reasons is that the manner in which Mr. Qiu’s response to the motion was presented does not jive with his Statement of Defence.
131I have set out the defences pleaded in the Statement of Defence in some detail and I have assessed them one-by-one.
132The thrust of Mr. Qiu’s position in argument, however, involved the theme that Mr. Montesano breached fiduciary duties he owed to Mr. Qiu and that Mr. Sansalone is vicariously liable for Mr. Montesano’s misdeeds. This was not pleaded in the Statement of Defence. Indeed, the Statement of Defence does not address either an alleged breach of fiduciary duty or the issue of vicarious liability at all. The absence of a pleading of this defence supports, on its own, the conclusion that the alleged breach of fiduciary duty does not raise a genuine issue for trial with respect to the claim of Mr. Sansalone. But there are other reasons why the alleged breach of fiduciary duty fails to raise a genuine issue for trial.
133A fiduciary duty is a duty of trust. It requires that the fiduciary act with absolute loyalty towards the beneficiary of the trust. See Alberta v. Elder Advocates of Alberta Society, 2011 SCC 24, at para. 22. It is common ground that, in his capacity as the buyer’s agent, Mr. Montesano owed a fiduciary duty to Mr. Qiu. Indeed, as a dual agent, he owed fiduciary duties to both Mr. Qiu and Mr. Sansalone. See Raso v. Dionigi et. al. (1993), 1993 CanLII 8664 (ON CA), 12 O.R. (3d) 580.
134The dual agency means that there were two simultaneous principal-agent relationships ongoing with respect to the one transaction.
135There is no suggestion that Mr. Sansalone owed Mr. Qiu a fiduciary duty or vice versa. They were on opposite sides of the transaction and each was entitled to act in his own self-interest.
136Any fiduciary duty owed to Mr. Qiu by Mr. Montesano arose as a result of the special relationship created between them by the Buyer’s Representation Agreement. In accordance with that Agreement, Mr. Qiu was the principal and Mr. Montesano the agent. Any alleged breach of the fiduciary duties associated with that relationship was a breach of the contract between Mr. Qiu and Mr. Montesano. Vicarious liability will not generally flow to Mr. Sansalone for the breach of an obligation owed by an agent to a different principal.
137Having said that, I recognize that there are instances where, in a dual agency, one principal may be liable for the misdeeds of the agent towards the other principal.
138For instance, Principal A may be personally liable for the misdeeds of the agent towards Principal B, where Principal A has knowledge of the misdeeds and actively participates in them. See, for instance, Raso v. Dionigi, as above and Kentner v. Stefanovic, 2019 ONSC 2386. In such circumstances, the liability is not truly vicarious, but direct, given the actionable conduct of Principal A.
139There is no evidence in this case, however, that Mr. Sansalone was aware of any misconduct on the part of Mr. Montesano or that he actively participated in it in any way.
140It may also be possible for a single misdeed to be characterized in alternate ways. It is conceivable that conduct on Mr. Montesano’s part that amounts to a breach of a fiduciary duty owed to Mr. Qiu could concurrently amount to a misdeed for which Mr. Sansalone may have some vicarious liability – in other words, one occurring while Mr. Montesano was acting simultaneously within the scope of his authority as Mr. Sansalone’s agent and within the scope of his authority as Mr. Qiu’s agent. Whether that is the case depends on the particular misdeed alleged and the context in which it occurred.
141For example, a misrepresentation made by a dual agent to a purchaser may amount to negligence for which the vendor is vicariously liable and at the same time amount to a breach of fiduciary duty, which the vendor may not be vicariously liable for. See, for instance, Goldstein v. Davison, [1994] O.J. No. 1018 (Gen. Div.).
142The alleged misdeeds that are said to constitute the breach of fiduciary duty in this case, however, essentially mirror the defences raised in the Statement of Defence. For instance, that Mr. Montesano failed to explain the terms of the Agreements to Mr. Qiu; that he misrepresented the ability to develop the lands; and that he pressured Mr. Qiu to sign the May 10, 2017 Agreement. I have already determined that none of those alleged misdeeds raises a genuine issue for trial in relation to Mr. Sansalone’s claim.
143In my view, the characterization of certain alleged misconduct on Mr. Montesano’s part as breaches of the fiduciary duties he owed to Mr. Qiu pursuant to their principal-agent relationship does not raise a genuine issue for trial in relation to Mr. Sansalone’s claim.
Summary
144In summary, I find that none of the defences raised by Mr. Qiu raises a genuine issue for trial. I reach this conclusion without having had to employ any of the enhanced fact-finding powers provided for at r. 20.04(2.1).
145Had I found that any of the defences advanced by Mr. Qiu raised a genuine issue for trial at stage one of the analysis, I would have concluded, at stage two, that the need for a trial could be avoided by resort to the enhanced fact-finding powers set out in r. 20.04(2.1).
146Having regard to the evidentiary record as a whole, I do not find Mr. Qiu’s evidence, or his position more generally, to be credible or reliable.
147I find Mr. Qiu’s entire approach to this litigation to be disingenuous. I say that for the following reasons:
(a) He has thrown every defence at the case that he can imagine, no matter how weak. His approach bears the hallmarks of a party who, lacking a legitimate defence, contrives, in desperation, all manner of arguments designed to hinder and delay the plaintiff’s reasonable efforts to recover his losses.
(b) He raised none of the concerns he now pleads in his defence at any time prior to the commencement of these proceedings.
(c) He is the party who initiated contact with Mr. Sansalone’s agent. Making an offer to purchase was his idea. He made the offer because he wanted to acquire Mr. Sansalone’s lands.
(d) There is no compelling evidence that any of the provisions of the May 10, 2017 Agreement were unfair to Mr. Qiu.
(e) He continued to negotiate to complete the transaction at a lower purchase price and with an extended closing date right up to the scheduled closing date.
(f) He purchased another property, for cash, just weeks before the scheduled closing date of the Sansalone transaction. I infer that this purchase created the difficulties he had in financing the purchase of Mr. Sansalone’s lands.
(g) His sole expressed reason for failing to close was financial. He did not refuse to close the transaction because he had been bullied, or because he did not understand the terms, or because he was concerned about his ability to construct a new home. He failed to close because he could not raise sufficient funds to complete the transaction. And,
(h) In addition to the nature of his pleadings, Mr. Qiu has conducted himself in the litigation in a manner that I conclude is designed to hinder and frustrate the opposing parties. He has failed to produce an affidavit of documents, even though the case is now more than 3 ½ years old. Moreover, he took an obstructionist approach to answering valid questions put to him on cross-examination. He says he was intimidated by the real estate agent and thought he had no choice but to sign the agreement, yet won’t answer questions about whether his wife is a realtor and about how many real estate transactions they have been involved in together in the past. He says he didn’t understand the agreement because of a limited facility with the English language but would not answer questions designed to probe that assertion.
148It may have been helpful to have had Mr. Montesano’s evidence about what transpired between him and Mr. Qiu. But even without it, I find that Mr. Qiu’s position lacks credibility. As O’Halloran J.A. famously said in Faryna v. Chorny, 1951 CanLII 252 (BC CA), [1952] 2 D.L.R. 354,
…[T]he real test of the truth of the story of a witness…must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions.
149In all the prevailing circumstances, I find that there is a real disconnect between the way Mr. Qiu conducted himself between May 5, 2017 and November 30, 2017 and the approach he is taking to this litigation. I find that Mr. Qiu wanted to buy Mr. Sansalone’s property. He knew how much it was going to cost and he was prepared to pay it. He knew the task ahead of him to get building approval and he was prepared to undertake it. He entered the agreement to buy the property willingly and with his eyes open. He could not complete the transaction because he was unable to raise the purchase price in time. And now he is doing everything he can to avoid the consequences of his breach.
150I turn now to Mr. Qiu’s assertion that relief should be denied to Mr. Sansalone on the basis that what he is seeking is partial summary judgment.
Partial Summary Judgment
151The Supreme Court instructed in Hryniak that the summary judgment process of adjudication is rooted in the concept of proportional justice and the recognition that fair and just adjudication may often be accomplished without resort to the full machinery of a trial.
152The summary judgment rule serves the overarching principle that the Rules of Civil Procedure are to be interpreted and applied in a such a way as to ensure the just, most expeditious and least expensive determination of an action. See r. 1.04. Where a fair and just determination on the merits on the evidentiary record presented on the motion can be made, then the summary judgment process functions properly and achieves its objective.
153Sometimes, however, the time and expense associated with a summary judgment motion has a tendency to undermine, rather than further the just, most expeditious and least expensive determination of an action. This concern is particularly acute in the case of motions for partial summary judgment. Indeed, at para. 60 of Hryniak, Justice Karakatsanis cautioned that partial summary judgment “may run the risk of duplicative proceedings or inconsistent findings of fact.”
154In Butera v. Chown, Cairns LLP, 2017 ONCA 783, the Court of Appeal for Ontario confirmed that its pre-Hryniak jurisprudence on the advisability of partial summary judgment continued in the post-Hryniak world. That jurisprudence is perhaps best reflected in Corchis v. KPMG Peat Marwick Thorne, 2002 CanLII 41811 (ON CA), [2002] O.J. No. 1437 (C.A.) where it was held that partial summary judgment should “only be granted in the clearest of cases where the issue on which judgment is sought is clearly severable from the balance of the case.” (Para. 3).
155In Malik v. Attia, 2020 ONCA 787, Brown J.A. instructed that motions judges, when asked to entertain a motion for partial summary judgment, must consider the risk of inconsistent findings and whether granting partial summary judgment will achieve the objectives of proportionate, timely and affordable justice. Counsel should be asked to:
(a) Demonstrate that dividing the determination of the case into several parts will prove cheaper for the parties.
(b) Show how partial summary judgment will get the case in and out of the court system more quickly. And,
(c) Establish how partial summary judgment will not result in inconsistent findings by the multiple judges who will touch the divided case.
156Having laid out those governing authorities, the next task is to determine whether this motion is properly characterized as a motion for partial summary judgment. I find that it is not.
157Mr. Sansalone is seeking judgment on his entire claim against Mr. Qiu. There is no counterclaim here. Judgment as requested by Mr. Sansalone will resolve the entirety of the main action. In the circumstances, his motion is not properly characterized as a motion for partial summary judgment in the sense described by the Court of Appeal in Butera. See Spiridakis v. Li, 2021 ONCA 359 at para. 14.
158Nevertheless, given that there is a third party claim, it remains appropriate to consider whether the issues in the main action and the third party claim are so intertwined as to raise the specter of inconsistent findings of fact.
159Recall that in the main action, Mr. Qiu asserts that the May 5, 2017 Agreement was not enforceable against him as a result of one or more of the following defences: (a) intoxication; (b) misrepresentation; and (c) non est factum. He asserts that the May 10, 2017 Agreement is void or voidable as a result of: (a) the application of the doctrine of non est factum; (b) undue influence; (c) duress; (d) unconscionability; (e) ambiguity and uncertainty; and (f) a lack of consideration. He also asserts a failure to mitigate.
160The third party claim raises issues that are, in my view, entirely distinct and severable from those addressed in the main action. The allegations in the third party claim are referable not to the Agreement of Purchase and Sale, but rather to the Buyer Representation Agreement entered into between Mr. Montesano and Mr. Qiu.
161Mr. Qiu alleges that the Buyer Representation Agreement established a relationship of principal-agent between him and Mr. Montesano. That relationship gave rise to duties owed by Mr. Montesano to Mr. Qiu. Mr. Qiu says those duties were breached and that, in the result, the realtor ought to indemnify him against any amounts he is required to pay Mr. Sansalone.
162Mr. Qiu further alleges that Mr. Montesano breached his duty of good faith contractual performance in the manner he carried out, or failed to carry out, his obligations pursuant to the Buyer Representation Agreement. Again, he asserts that the realtor should be compelled to indemnify him against any amounts he may be found liable to pay Mr. Sansalone.
163Nowhere in the third party claim is there any suggestion that Mr. Sansalone is vicariously liable for the actions of the agent.
164While the factual narrative is common between the main action and the third party claim, the claims advanced by Mr. Qiu against the realtor in the third party claim are legally distinct from the defences advanced in the main action. In my view, counsel’s attempt to couch the defence to the main action as an assertion of vicarious liability for a breach of the agent’s fiduciary duties was an attempt to artificially blend the two proceedings.
165I note that the third parties have not defended the main action. They do not take the position that the Agreement of Purchase and Sale is void or voidable and their pleading tends to support the position of Mr. Sansalone in the main action.
166By granting summary judgment on the main action, a significant time savings will be achieved, with its attendant cost savings. There is little, if any, risk of inconsistent factual findings on relevant and material issues. In short, in my view, the existence of the third party claim poses no impediment to the granting of summary judgment in favour of Mr. Sansalone.
V.
DAMAGES
167Damages for breach of contract are normally measured on an expectation basis. Expectation loss was established as the standard measurement for contractual breach over 150 years ago in Hadley v. Baxendale, (1854) 9 Exch 341. Essentially, it reflects the amount required to put an innocent party in the position it would have been in had the contract been performed as agreed. See also BG Checo International Ltd. v. British Columbia Hydro & Power Authority, 1993 CanLII 145 (SCC), [1993] 1 S.C.R. 12, at para. 12.
168As I noted earlier, Mr. Sansalone asserts that the following amounts represent his expectation losses in this case:
(a) The loss on the selling price $120,000.00
(b) Three months interest on his outstanding mortgage 370.80
(c) Renewal fee for his outstanding mortgage 369.92
(d) Lost interest on the sale proceeds he would have earned 16,569.90
(e) Equipment storage fees 1,779.75
(f) Home insurance for three months 300.00
(g) Three months realty taxes 962.01
(h) Additional real estate commissions 64,410.00
169Some elements of Mr. Sansalone’s damage claim are not in issue, including the ongoing interest on his mortgage, his mortgage renewal fee, his home insurance and the additional realty taxes incurred between the scheduled closing date and the date on which Mr. Sansalone eventually completed his sale to the Brindleys.
170The more controversial items include the $120,000 difference in sale price, the purported lost interest on the sale proceeds, the equipment storage fees and the additional real estate commissions. I will address these issues one-by-one.
The Loss on the Sale Price
171There is no real dispute that the real estate market in Ontario, and in particular in the Greater Toronto Area, was in decline throughout the latter part of 2017. It is not surprising, in the result, that the sale price for Mr. Sansalone’s property declined between May and December of that year.
172I lack evidence about what the statistical fall-off in the market was. The amount Mr. Qiu agreed to pay for the property was $2.1 million. The price paid by the Brindleys was $1,980,000. The difference is less than 6%.
173There is no evidence before me that the price achieved, in the circumstances, was improvident or that reasonable and bona fide efforts were not made to resell the property for the best price that the market would bear.
174I am satisfied that Mr. Sansalone is entitled to the difference in sale price of $120,000.
The Lost Interest
175Mr. Sansalone claims that he lost over $16,000 in interest that he could have earned on the proceeds of the sale between the scheduled closing date of November 30, 2017 and the actual closing date of February 28, 2018. He calculates that number by multiplying the purchase price of $2.1 million by an interest rate of 3.2%. That rate is, counsel says, the Canada Prime Rate of Interest as of the original closing date.
176There are at least two problems with this claim. First, Mr. Sansalone said nothing in his affidavit about what his intentions were with the sale proceeds following the sale of the property. He said nothing about what he actually did with the sale proceeds, in terms of investment, following the sale to the Brindleys. What he might have done and what returns he might have achieved over the short term are speculative.
177Second, Mr. Sansalone has not taken into account that he would not have netted out $2.1 million on the sale to Mr. Qiu. He had a mortgage balance to pay, adjustments on closing, real estate commissions and legal fees. I do not know what all of those figures are, but they would, of course, have reduced the gross proceeds.
178That said, Mr. Sansalone undoubtedly would have had the benefit of the net closing proceeds and he certainly could have reinvested them. In the absence of further or better evidence, I am prepared to award him interest on those funds at the posted pre-judgment interest rate for the fourth quarter of 2017, which is 1%.
179I can only do my best to approximate what the net closing proceeds would have been had Mr. Qiu completed the transaction as agreed. I calculate them to likely have been $1,996,885.90 based on the following:
gross proceeds: $2,100,000.00
less outstanding mortgage (52,654.10)
less estimated adjustments (1,000.00)
less real estate commissions (47,460.00)
less estimated legal fees (2,000.00)
180A 1% annual interest rate on that sum generates a per diem interest rate of $54.71. There were 90 days between the scheduled closing date and the actual closing date. I therefore calculate total lost interest to be $4,923.90.
Equipment Storage Fees
181Mr. Sansalone expected to move out of his Whitchurch-Stouffville property on November 30, 2017. He had equipment located on those lands that he was expecting to have to remove by that date. He would have required another place to store that equipment commencing December 1, 2017. Presumedly, he would have reasonably expected to have incurred storage costs for that equipment. In other words, he expected to begin incurring storage costs for his equipment as of December 1, 2017. He did begin incurring storage costs for his equipment as of December 1, 2017. I see no expectation loss with respect to this aspect of his damage claim.
Real Estate Commissions
182Mr. Sansalone deposed that the real estate commission he would have paid had the sale to Mr. Qiu gone through was $42,000.00 plus HST for a total of $47,460.00. He said that on the sale to the Brindleys, he paid 99,000.00 plus HST, for a total of $111,870.00. He asserted a loss of $64,410.00 He offered no explanation for the discrepancy in his affidavit. In his factum, counsel pointed out that he had to pay commission to only the listing agent on the first sale, but to the listing and purchasing agents on the sale to the Brindleys because the Brindleys had their own agent.
183After doing some digging through the plaintiff’s motion record I found a copy of a listing agreement dated December 8, 2017 whereby Mr. Montesano’s firm agreed to re-list Mr. Sansalone’s property for him after the sale to Mr. Qiu fell apart. The listing agreement called for 2.5% commission for each of the listing and purchasing agents.
184The original listing agreement, dated May 1, 2017, called for commissions of 2% for each of the listing and purchasing agents.
185No explanation was offered in evidence, or even in argument, as to why the commission rate increased. I am left to conclude that the increase was arbitrary. In my view, it was reasonably foreseeable to Mr. Qiu that commissions may increase on a future sale if the listing agent and purchasing agent were different. But it was not reasonably foreseeable that the rate payable would arbitrarily increase. Absent a reasonable explanation for the increase, I reduce the damages related to increased commission to reflect commissions of 2% payable to the seller’s agent and 2% payable to the buyer’s agent.
186I calculate that the total commissions payable, at a total of 4%, on the sale to the Brindleys would have been $79,200.00 plus HST of $10,296, for a total of $89,496. This is $42,036.00 more than Mr. Sansalone would have paid had the sale to Mr. Qiu been completed as agreed.
Total
187In total, I calculate Mr. Sansalone’s damages to be $168,962.63 and judgment will issue in that amount.
188I move on to the final issue, which is whether enforcement of the judgment should be temporarily stayed.
VI.
THE STAY REQUEST
189Mr. Qiu asks that the enforcement of any judgment rendered against him be stayed, pending the outcome of the third party claim.
190He relies on r. 20.08 which provides as follows:
Where it appears that the enforcement of a summary judgment ought to be stayed pending the determination of any other issue in the action or a counterclaim, crossclaim or third party claim, the court may so order on such terms as are just.
191There is no question, in light of r. 20.08, that the court has the discretion to stay enforcement of the judgment. In Miller v. Wang, 2018 ONSC 7668, at para. 27, McKelvey J. listed a number factors that may properly be considered when deciding whether to exercise the discretion to stay enforcement of a summary judgment granted in the face of an ongoing third- party claim. They include:
(a) The connectedness of the issues in the main and third party actions;
(b) Any risk of inconsistent findings in the third party action;
(c) The merits of the third party action; and,
(d) The balance of prejudice.
192I have already determined that the issues in the third party action were readily severable from the issues in the main action and that there is no serious risk of inconsistent findings of fact.
193I have no evidence on this motion from Mr. Montesano. In the absence of that evidence, it is difficult to confidently opine on the merits of the third party claim. From my current, limited vantage point, it does not appear to be a particularly strong claim. My strong impression is that Mr. Qiu entered an agreement, fully aware of what he was doing and intending to purchase Mr. Sansalone’s property for $2.1 million. But he found himself in a financial crunch at the scheduled closing date and was unable to complete the transaction.
194Having said all of that, I am of the view that the principal driving factor with respect to the stay issue is the balance of prejudice. In this case, it is all but impossible for me to assess the balance of prejudice because the record is devoid of evidence on the point.
195Presumedly, the prejudice to Mr. Qiu relates to the concern that if the judgment is not stayed, he will have to pay Mr. Sansalone before a determination is made as to how much, if any, Mr. Montesano is going to have to contribute to the claim.
196On the flip side, I expect that the prejudice to Mr. Sansalone is that, should a stay be granted, he will have to wait an indefinite period to enforce his judgment.
197I am of the view that, on balance, the weighing of prejudice favours Mr. Sansalone. As I indicated, I do not consider Mr. Qiu’s case against the third party to be particularly compelling, even without having the benefit of the evidence of the third party. Moreover, as I have also indicated, Mr. Qiu has conducted himself in these proceedings in such a way as to obstruct the proper progress of the action. A stay of enforcement will only encourage him in that conduct.
198In the result, I am not satisfied that enforcement of the judgment should be stayed.
199Having reached this conclusion, I find that Mr. Sansalone is entitled to payment of the deposit presently being held by The Agency Realty Inc. and I direct that the deposit be paid to Mr. Sansalone or as he may direct.
COSTS
200The parties are encouraged to reach an agreement on the issue of costs. If they are unable to do so they may make written submissions, not to exceed three pages in length, not including costs outlines.
201Mr. Sansalone’s submissions are to be served and filed by February 10, 2022. Mr. Qiu’s are to be served and filed by February 24, 2022. To be clear, reply submissions are not invited.
C. Boswell J.
Corrected: January 31, 2022.
January 31, 2022 – Corrections:
The spelling of Mr. Qiu’s name has been corrected throughout.
The spelling of Mr. de Rijcke’s name has been corrected
Para. 102 first sentence now reads - I find that none of the defences advanced with respect to the May 10, 2017 Agreement raises a genuine issue for trial.