OSHAWA COURT FILE NO: CV-21-11
DATE: 2022-06-24
ONTARIO
SUPERIOR COURT OF JUSTICE
BETWEEN:
Keith D’Silva and Esther D’Silva ) William C. McDowell and Aoife Quinn,
) for the Plaintiffs
Plaintiffs )
Louise Algranti and Selim Algranti ) Julian Binavince, for the Defendants
Defendants )
) Heard: November 26, 2021
REASONS FOR JUDGMENT
S. Lavine J.
[1] The plaintiffs, Keith and Esther D’Silva (the “D’Silvas”), move for summary judgment on their claim for specific performance of the Agreement of Purchase and Sale (the “APS”) of a cottage property in Gravenhurst which failed to close.
[2] The D’Silvas purchased the cottage property from the defendants, Selim and Louise Algranti (the “Algrantis”), for $3,625,000. On agreement, the closing date was extended to December 22, 2020. The D’Silvas tendered the funds and closing documents on that date. The Algrantis refused to close. The D’Silvas then commenced this action seeking specific performance.
[3] The cottage property to be conveyed was created by severance. It is undisputed that on the scheduled closing date December 22, 2020, the Algrantis could not convey good and valid title to the D’Silvas in compliance with the Planning Act, R.S.O., 1990, c.P.13.
[4] The D’Silvas position is that the Algrantis breached the contract by failing to close. It is also undisputed that the Algrantis had failed to take the necessary steps to convey the lands in compliance with the Planning Act by the closing date. The D’Silvas were prepared to further extend the closing date to allow time for the Algrantis to do so; and, when the Algrantis refused, the D’Silvas then waived their objection and were prepared to close. The D’Silvas urge that the
APS is valid and binding and the Algrantis should be required to complete the transaction.
[5] The Algrantis’ position is that the transaction is void and not enforceable. The Algrantis state that when title to the property could not be conveyed in compliance with the Planning Act on the closing date, the APS was at an end, as the extended closing amendment provided that if the transaction did not close on that day, the transaction was terminated. The Algrantis dispute that the D’Silvas waived their objection.
[6] In defending this action, the Algrantis alternatively contend that the APS was void prior to December 22, 2020 because the APS was conditional on the provision of notice by the Algrantis to the D’Silvas by November 5, 2020 that consent to severance had been obtained; or, in the further alternative, that the APS was void for uncertainty from the outset because rights of way for road access had not been finalized and included in the legal description of the property.
[7] To place the issues in context, I will provide an overview of the factual background, the relevant provisions of the APS and the chronology of events, which is largely undisputed. What is disputed is the legal effect of those events.
The Algrantis Acquire, Develop and Sever Lands for Sale
[8] In 2017, the Algrantis purchased lands on the east side of Lake Muskoka, about a ten-minute drive from Gravenhurst with close to 900 feet of lake frontage. The lands were legally described as Lot 15 and Lot 16 Concession 9, Muskoka. Lots 15 and 16 were separated by a 66-foot wide road allowance owned by the Town of Gravenhurst (“the Road Allowance”).
[9] There was an existing older 1,500 square foot cottage and 400 square foot bunkie/cabin on Lot 15. Access to the cottage was by a driveway, via a right of way over neighbouring lands to the end of Sutherland Point Road, and through the Road Allowance. Lot 16 was undeveloped.
[10] The Algrantis purchased this property for its development potential. Their intention was to sever the lands into three lots, two of which would be sold, and one of which they would retain. The Algrantis planned to build a new cottage on the retained lot for use for themselves, their four adult children and grandchildren.
[11] The Algrantis pursued their plan. They obtained approval from the Town of Gravenhurst to sever the lands into the three lots, each with about 300 feet of frontage on Lake Muskoka. The Algrantis purchased part of the Road Allowance from the Town of Gravenhurst and secured a right of way over neighbouring lands to Sutherland Point Road (the “Lewllyn RoW”). They construed a new section of driveway from Sutherland Point Road over the Lewllyn RoW, and that part of Algranti B described as Part 6 on Schedule D.
[12] While they pursued their development plan, the Algrantis renovated the existing cottage, and built a dock and a 900 square foot, two-story boathouse with comfortable living space.
[13] The three lots were described as Algranti A, B and C. Algranti B, the middle lot, was comprised of about 10 acres, with 297.20 feet of frontage on the lake. The original cottage and bunkie, and the newly built dock and boathouse were located on Algranti B. Algranti C was vacant land, adjacent to one side of Algranti B. Algranti A was vacant land, on the other side of Algranti B. Algranti A was the lot to be retained by the Algrantis for their new cottage,
[14] In the summer of 2020, the Algrantis met with their builder and finalized the location of their new cottage and the location of the driveway to access the cottage. In August, 2020, the Algrantis listed Algranti B and Algranti C for sale.
The D’Silvas Find Algranti B
[15] In or about the summer of 2019, the D’Silvas commenced a search for a cottage that would suit their needs. It was important to the D’Silvas to find a property large enough to accommodate their university aged children, a large extended family, and eventually, multi-generational family; and, that was located a reasonable distance from their home. Esther D’Silva stated, in her affidavit, that the D’Silvas viewed approximately 20 properties over four months.
[16] Within a week of the listing, the D’Silvas found Algranti B. The D’Silvas found Algranti B to be especially suitable for extended family gatherings, as Algranti B had the following features: (i) three existing separate living spaces – the original 1570 sq ft cottage, the 400 sq ft cabin and the 900 sq ft boathouse living space; (ii) the location on Lake Muskoka near Gravenhurst made it reasonably accessible from their home in Mississauga; and, (iii) the proximity to Gravenhurst, by about an eight minute drive, for easy access to groceries and amenities.
[17] The D’Silvas found the property itself to have physical features which were especially suitable to their interests for use of the property; specifically: (i) the size of land and shoreline, being 10 acres with 297.2 feet of frontage on Lake Muskoka; (ii) the winterized cottage, which allowed for winter use for winter sports; (iii) that the property was large enough to build a tennis court; (iv) that the property was large enough to take mountain bike rides on the property; (v) that the property is south-west facing, offering unobstructed sunset views; and, (vi) that the property was surrounded by trees and rock, enhancing its privacy and appeal. Of particular importance, was the southwest view, which Keith D’Silva described as offering an “unparalleled view of the sunset”.
[18] On September 16, 2020, the Algrantis and the D’Silvas entered into the APS with respect to Algranti B. The D’Silvas provided a deposit of $250,000.
[19] On or about October 6, 2020, the Algrantis entered into an agreement of purchase and sale with Jody Yoken with respect to Algranti C. The Agreement of Purchase and Sale with respect to Algranti C was also subject to severance. That transaction closed on or about January 8, 2021.
The Agreement of Purchase and Sale
[20] At the time that the Algrantis and the D’Silvas entered into the APS, the D’Silvas understood from the Algrantis that the Town of Gravenhurst had approved the severance, and registration of Algranti A, B and C was being finalized with the Land Registry Office.
[21] The APS described the lands to be conveyed as 1018 Sutherland Point Road, Gravenhurst, having a ‘frontage’ of approximately 297.20 feet on Lake Muskoka and having an irregular depth. The lands to be conveyed were outlined in a Reference Plan contained in Schedule D to the APS. The legal description in the APS was “to be determined subject to land severance.”
[22] The APS consisted of the standard form Ontario Real Estate Association (“OREA”) form, and Schedules A to E.
[23] Paragraph 15 of the APS, which is the OREA standard form, provides the following regarding compliance with the requirements of the Planning Act:
This Agreement shall be effective to create an interest in property only if the Seller complies with the subdivision control provisions of the Planning Act by completion and Seller covenants to proceed diligently at Seller’s expense to obtain any necessary consent by completion.
[24] Schedule A to the APS contained a clause addressing the closing date as follows:
The buyer agrees that the closing date will be Thirty (30) business days after the registration not before November 2, 2020 of the new pin and role numbers with Land Registry. The title search will be fifteen (15) days after the registration of the new pins and legal description.
[25] Schedule B to the APS contained the following condition (the “consent to sever condition”):
This Offer is conditional upon the Seller obtaining, at the Seller’s expense, a consent to sever the property as per Schedule ‘D’ attached hereto and forming part of this Agreement of Purchase and Sale. Unless the Seller gives notice in writing delivered to the Buyer personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than 6:00 p.m. on November 5, 2020, that this condition is fulfilled, this Offer shall become null and void and the deposit shall be returned to the Buyer in full without deduction. The Seller agrees to sign any requisite documents required for the above condition and do all things reasonably necessary in support of the satisfaction of the condition. The Seller understands and acknowledges that the Seller shall be responsible for satisfying any conditions imposed for approval of severance, and if such conditions give the Seller options in manner of compliance, the Buyer shall determine which option shall be selected. The Seller shall obtain a reference plan prepared by an Ontario Land Surveyor suitable for registration purposes in the Land Registry Office in which the said property is located.
The September 24, 2020 Letter
[26] On September 24, 2020, the Algrantis solicitor, Catherine MacLennan, wrote by email to the D’Silvas’ solicitor, Robert Kerr. Ms. MacLennan advised that her firm had been working on the land assembly and severance since 2017. She provided a sketch showing Algranti B. She described Algranti B as comprised of a shore road allowance, a road allowance, three severances, two utility easements and two consent easements. Ms. MacLennan attached the legal descriptions of the properties as they then were, surveys and transfers.
[27] Ms. MacLennan concluded her email by stating that she was “not sure why the agents put in a condition regarding consent from the town because everything is completed so that paragraph is moot”.
Amendments Including Amendment of the Completion Date
[28] Between September 24, 2020 and October 3, 2020, the parties agreed on six amendments to the APS. One of the amendments, made October 1, 2020, concerned the closing date, and provided as follows:
The Seller and Buyer acknowledge and agree to a completion date for this Agreement of Purchase and Sale as soon as possible after the land registry office issues a PIN number and legal description. The Buyer’s preferred date is November 6th, 2020 and no later than December 15th 2020.
The October 10, 2020 Site Visit and Meeting
[29] On October 10, 2020, the Algrantis walked the property with the D’Silvas, while reviewing the property as shown in Schedule D, and discussing plans for their cottages. It is not disputed that, during this meeting, the Algrantis confirmed that land severance was complete, and they were simply awaiting receipt of the property identifier numbers (“PINs”) from the Land Registry Office.
The Algrantis Request to Terminate the Sale
[30] On October 16, 2020, Ms. MacLennan wrote to Mr. Kerr stating that the Algrantis did not want to “go forward with the sale of their cottage” on the basis that they had been “pressured into selling the cottage and signing the offer to sell the cottage by their real estate agents”. The Algrantis offered to return the D’Silvas deposit and pay their legal fees incurred to that date.
[31] The Algrantis, in their affidavits and cross-examinations, take various positions about why they did not want to sell the cottage. Keith Algranti states, in his affidavit, that, after listing, the Algrantis regretted listing, as they may have preferred to wait until August, 2021, and use the existing cottage until their new cottage was built. The Algrantis also stated that, after the October 10, 2020 meeting with the D’Silvas at their property, they felt that D’Silvas might not support their plans for their new cottage, and that the D’Silvas would not be good neighbours.
[32] The D’Silvas refused the Algrantis’ request. By letter dated October 21, 2020, Mr. Kerr confirmed that the D’Silvas remained excited about their purchase of the cottage and intended to proceed with closing. Mr. Kerr referred in his letter to an offer which the D’Silvas had received from the purchasers of Algranti C to purchase Algranti B, for an additional $500,000. The D’Silvas had rejected this offer. They wanted to purchase Algranti B.
Extension of the Closing Date
[33] It is common ground that, throughout the fall of 2020, Mr. Kerr was in weekly contact with Ms. MacLennan’s office to follow up on the status of the PINs.
[34] On December 11, 2020, Ms. MacLennan advised Mr. Kerr that the PINs would be finalized the week of December 14.
[35] Mr. Kerr, by letter dated December 14, 2020, confirmed that the D’Silvas were ready to proceed to closing, but, given that the PINs were still not finalized, he proposed an amendment to set a title search date of December 22, 2020, and a closing date of January 7, 2021, “conditional on the PINs being finalized this week”.
[36] The Algrantis, in response, agreed to extend the completion date to December 22, 2020, on the condition that time would continue to be of the essence, and that “in the event that the transaction does not close December 22, 2020, subject to any valid exception to title in accordance with the Agreement of Purchase and Sale, the deal will be considered null and void and the transaction at an end”.
[37] Mr. Kerr sent two further letters on December 14, 2020. He proposed a title search deadline of December 17, 2022, given the earlier closing date of December 22, 2020; and, he sent a requisition letter. Among the requisitions, Mr. Kerr made title requisitions, identifying issues with three of the PINs to be conveyed.
[38] Ms. MacLennan, by letter dated December 18, 2020, responded that the Town of Gravenhurst was satisfied that there were no issues. Ms. MacLennan insisted that the property could be conveyed as proposed. Ms. MacLennan provided certain documents for closing.
[39] Mr. Kerr, by letter the same day, disagreed that the property could be conveyed as proposed, and stated that Ms. MacLennan had not addressed the severance issues. He suggested they work co-operatively to rectify the conveyancing issues.
[40] Ms. MacLennan did not respond for three days. On December 21, 2020, Ms. MacLennan advised that the Algrantis “were not prepared to complete any further Town application or conveyance matters within any specific time frame.” She further advised that, “in the event that the transaction is unable to close, and clear and marketable title cannot be conveyed by December 22, 2020, the deal as agreed by both parties is deemed null and void.”
[41] Mr. Kerr, by email, reminded that the completion date of December 22, 2020 was subject to any “valid exception to title”. Ms. MacLennan took the position that the issue was a Planning Act issue, not a title issue, and the Algrantis would not agree to any further extensions.
[42] On December 22, 2020, Mr. Kerr proposed that the parties proceed to closing, with a holdback of payment of the full purchase price until the conveyancing issues were rectified post-closing. Ms. MacLennan then took the position that the Paragraph 10 of APS, in the standard OREA form, applied and permitted the Algrantis to terminate the APS. Paragraph 10, with the heading Title, provides that, if the seller is unable or unwilling to remove a restriction on title which the buyer will not waive, the seller may terminate the transaction.
[43] Mr. Kerr responded and disagreed that paragraph 10 applied, but if it did, the D’Silvas waived any objection to title. Mr. Kerr confirmed that the D’Silvas were prepared to close the transaction, without any holdback, and that the D’Silvas would work to rectify the severances at their own cost, on agreement that the Algrantis would co-operate in correction of any conveyances post-closing. Ms. MacLennan advised that she would speak with the Algrantis, and would recommend that there be a release of the Algrantis if any of applications or conveyances were not approved by the Town.
[44] On December 22, 2020, the D’Silvas tendered the balance due in the form of a certified cheque, together with the documents required to complete the transaction.
[45] The Algrantis refused to close. Ms. MacLennan advised that the Algrantis were “not comfortable closing the transaction in this manner.”
Expert Evidence
[46] The plaintiffs tendered an expert report prepared by Sidney Troister. Mr, Troister’s extensive qualifications as an expert in real estate matters are set out in his report and his curriculum vitae. Mr. Troister’s expertise is recognized by the defendants, who take no issue with the admissibility of his report.
[47] Mr. Troister’s opinion related to issues of title and how the conveyancing of the property is administratively accomplished. It is not an opinion with respect to the legal issues in this application. The defendants accept Mr. Troister’s opinion. I accept Mr. Troister’s opinion.
[48] Mr. Troister’s conclusion was that, on December 22, 2020, the Algrantis could not convey good and valid title to the property in compliance with the Planning Act because of their conveyancing errors in advance of closing and the Algrantis’ failure to obtain appropriate certificates of consent under the Planning Act to give effect to the intended creation of a separately conveyable parcel of land.
[49] Mr. Troister explained how the title impediments could have been easily corrected, Mr. Troister explains that the majority of the land could have been transferred on the closing date by registration of a correcting transfer, leaving only two parcels that could not be transferred with good title: the road allowance running through the property (PIN 0353) and a small triangular parcel of land (PIN 0349).
[50] Mr. Troister addressed these two title impediments as follows:
(i) The title issue with PIN 0353 would have been cured on January 8, 2021, by the sale of Algranti C to Jody Yoken. But for the transfer of PIN 0349, the Algrantis could have transferred title to this parcel of land any time after January 8, 2021.
(ii) The small triangular piece with PIN 0349 required a consent. Mr. Troister opined that the parties could have dealt with this issue at closing in the good faith implementation of the APS through either (1) the Algrantis agreeing to obtain a consent to transfer the triangle piece of land and the parties entering into a lease or other use agreement until that date; or (2) transferring the triangle to the D’Silvas and the D’Silvas would then be responsible for obtaining a validation of title certificate.
[51] Mr. Troister’s accepted and uncontroverted explanation of the administrative mechanisms required to convey good title is that “simply, with two correcting transfers and an accommodating usage agreement for PIN 0349 the legal impediments” could have been, and can be resolved.
Analysis
Summary Judgment
[52] The plaintiff urges, and the defendant acknowledges, that this is an appropriate case for summary judgment of the claim and counterclaim.
[53] Rule 20.04(2) requires the court to grant summary judgment unless there is a “genuine issue requiring a trial.” Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.
[54] I am satisfied that I can make the necessary findings of fact on the motion. The material communications between the parties are contained in written communications by email. The facts are largely undisputed. The main issues to be determined involve the application of the law to the facts. I agree with both parties that this is an appropriate case for summary judgment: Hryniak v Mauldin, 2014 SCC 7 at paras. 49, 57.
Is the APS a Valid, Binding and Enforceable Contract?
[55] The D’Silvas state that it is common for parties to agree to transfer property conditional on Planning Act approval. The Algrantis agree. The Algrantis acknowledge that they had an obligation to take reasonable steps to ensure that Planning Act approval was obtained by closing.
[56] The Algrantis object to the enforcement of the APS on three grounds: (i) that the APS terminated or expired on November 5, 2020 as the Algrantis did not waive the condition with respect to severance of the property; (ii) that, if the APS was not terminated on November 5, the APS came to an end on December 22, 2020; and, (iii) the APS was void for uncertainty because the legal description did not include the right of ways.
Was the APS void on November 5, 2020?
[57] The Algrantis contend that the APS terminated or expired on November 5, 2020, because the condition regarding severance in Schedule B was not satisfied or waived. The condition (set out in full at paragraph 24 above) provided that unless the Algrantis gave notice to the D’Silvas that they had obtained consent to sever the property as per Schedule ‘D’ by November 5, 2020, the Offer became null and void. The Algrantis state that they did not provide notice that they had obtained consent to sever the property by November 5, 2020, and accordingly, the contract expired or terminated on November 5, 2020.
[58] The Algrantis maintain that Ms. MacLennan’s statement in her letter of September 24, 2020, did not fulfill this condition, nor can it be considered a waiver of compliance with the notice provisions of the condition, or waiver of the condition. The Algrantis state that Ms. McLellan’s September 24 correspondence did not comply with the notice requirements of the condition; that Ms. MacLellan’s opinion was wrong; and, that the Algrantis were not aware that the September 24 email was sent to the D’Silvas. The Algrantis urge that, for these reasons, the September 24 email cannot constitute a “clear and unequivocal” waiver of the consent to sever condition.
[59] The Algrantis dispute that their actions after November 5, or the amendments to the APS, negotiated and agreed after November 5, can be considered to have affirmed or revived the APS. The Algrantis argue that, as the APS terminated on November 5, 2020, a new contract with offer, acceptance and consideration had to come to pass, and amendments would not suffice to affirm or revive the APS.
[60] I am unable to accept the Algrantis’ position, for the following reasons. Ms. McLellan’s letter contained a clear and unequivocal representation that “everything is completed” and that the inclusion of the consent to severance condition by the real estate agents in the APS was unnecessary. She said it was moot. Ms. McLellan made this express representation as counsel, who, as she stated, had been engaged in the land assembly and severance of the Algranti cottage property for some three years. I find it reasonable to infer that Ms. McLellan’s reference to her extensive involvement in the file was intended to provide assurance to the D’Silvas that they could rely on, and have confidence in, her representation that everything was completed, and the condition regarding consent to severance was moot. I find that this representation satisfied the condition, or was a waiver of it.
[61] Ms. MacLellan had authority to make this representation as the Algranti’s solicitor on the transaction, and indeed, as the Algrantis solicitor from the inception of the development project three years earlier. The Algrantis are bound by their solicitor’s representation.
[62] Having regard to my conclusion, it is not necessary to consider the D’Silvas alternative argument that the Algrantis are estopped by representation and cannot now take the position that the APS terminated on November 5, 2020.
[63] That said, the uncontroverted facts demonstrate that the APS was valid. Tellingly, the Algrantis never asserted that the APS terminated on November 5, 2020. Given the Algrantis’ clear desire to terminate the APS after the meeting on October 10, 2020, and the D’Silvas refusal, it is reasonable to infer that the Algrantis would have considered whether the contract expired or terminated on November 5, 2020. Yet, neither on November 5, 2020, nor at any time thereafter, did the Algrantis state that the APS had expired. The Algrantis did not return the deposit as required by the provisions of the consent to sever condition on expiration or termination of the contact because the condition had not been fulfilled or waived.
[64] The Algrantis met and walked the property with the D’Silvas, assuring the D’Silvas that all that was required was issuance of the PINs; and, up to virtually the date of completion, continued to assure the D’Silvas that they were simply awaiting issuance of the PINs. Ms. MacLellan continued to advise Mr. Kerr on a weekly basis that all was complete, other than registration and assignment of PIN numbers, and that work was being done. Ms. MacLellan remained insistent that this was the case until at least December 18, 2020. Most significantly, the Algrantis affirmed the APS by extending the closing date to December 22, 2020.
[65] All of the Algrantis’ conduct supports the conclusion that the APS was valid.
[66] The D’Silvas relied on all of these representations and all of this conduct.
[67] I am satisfied that it would be inequitable for the Algrantis to now assert that the APS was at an end on November 5, 2020, because the Algrantis were in error in representing to the D’Silvas that all had been completed, and to now insist that a new contract had to have been formed, when the Algrantis themselves acted on the basis that the APS was valid.
Was the APS Void on December 22, 2020?
[68] The Algrantis argue that, when the property could not be conveyed on December 22, 2020, the transaction was null and void, bringing their obligation to work on obtaining compliance with the Planning Act to an end. They rely on what they call the ‘finality clause’ in their December 14 agreement to extend the closing date to December 22, 2020, which provided the extension, subject to the following conditions:
a) All other terms and conditions to remain the same;
b) Time to continue to be of the essence; and,
c) In the event the transaction does not close December 22, 2020, subject to any valid exception to title in accordance with the Agreement of Purchase and Sale, the deal will be considered null and void, and the transaction at an end.
[69] The Algrantis do not take issue with Mr. Troister’s opinion. The Algrantis recognize and accept that the necessary Planning Act consents had not been obtained due to error on the part of one or more the professionals.
[70] The Algrantis acknowledge their obligation, expressly required by Paragraph 15 of the APS to “to proceed diligently” at their expense to obtain any necessary consent to ensure that the transaction was completed in compliance with the Planning Act; and by Schedule B to the APS to “do all things necessary” to obtain the required severances.
[71] The D’Silvas state that the Algrantis cannot justify the failure to close on December 22 by relying on the amendment clause when they had not proceeded diligently by failing to meet their obligation to obtain the required consents as a result of errors; and, then refused to take the steps necessary to complete the transaction.
[72] I agree. Until just a few days before the extended closing date of December 22, the Algrantis erroneously insisted that there were no issues with conveyancing, and then, the day before closing, refused to take any steps to rectify the issues. The Algrantis then refused to accept the D’Silvas position that their objection was a “valid exception to title” in order to further extend the closing and complete the transaction; then asserted that they were entitled to terminate the APS under the provisions of Title - Paragraph 10; and when the D’Silvas exercised their right under Paragraph 10 to waive any objection and proceed to closing, the Algrantis did not respond, and then refused to close.
[73] The Algrantis properly recognize that the APS required that they proceed diligently and do all things necessary to obtain the severances, and that the amendment was subject to these requirements. Yet, their course of conduct and refusal to do what was necessary to complete the transaction is inconsistent with these obligations.
[74] Inherent in the Algrantis’ position is reliance on their own errors to then rely on the amendment to terminate the APS. In Southcott Estates Inc. v. Toronto Catholic School Board, 2010 ONCA 310, 104OR (3d) 784, the Court of Appeal confirmed and applied the principle that a party in breach of an obligation to do what is required to complete a transaction cannot terminate the contract by relying on a time of the essence clause.
[75] In Southcott, the agreement was conditional on the vendor obtaining a severance from the Committee of Adjustment on or before the closing date. When the vendor was unable to obtain the severance by the closing date, the purchaser took the position that the closing date should be extended. The vendor, relying on the time of the essence clause, insisted on the closing date as an “inviolable outside limit” for the closing of the transaction.
[76] It was undisputed that the vendor was in breach of its obligation to use its best efforts to obtain the severance. On appeal, the vendor argued that, as there was insufficient time to obtain severance before the firm closing date, the vendor’s breach of its obligation to use its best efforts to obtain severance was not the cause of the failure to complete the transaction. The Court of Appeal concluded that the principle that a party cannot “take advantage of the existence of a state of things which he himself produced” applied to preclude the vendor from relying on the time of the essence clause as a basis for “escaping its contractual obligations.”
[77] The Algrantis contend that the D’Silvas agreed to and were bound by the finality clause, the effect of which was that all obligations either under the APS, or at common law, ended on December 22, 2020 if the transaction did not close that day.
[78] In my view, the principle that one cannot rely on one’s own default to avoid one’s contractual obligation, as applied by the Court of Appeal in Southcott, similarly applies here. An examination of the correspondence between Mr. Kerr and Ms. MacLennan, as summarized earlier in my reasons, discloses that the D’Silvas were proposing a further extension that would allow time for the Algrantis to do the conveyancing work which they were obliged to do, and which they had failed to do. The Algrantis faced with the knowledge days before closing that they had failed to take the necessary steps to ensure compliance with the Planning Act, refused to do so.
[79] As explained by Mr. Troister in his report, which I accept, the impediments to the transfer of good title to the entire parcel could have been easily resolved by the Algrantis, shortly after the closing date.
[80] I am satisfied that the Algrantis refusal to do so, and insistence that if conveyance of good title to the entire intended property could not be resolved on the closing date, the transaction was over was not consistent with the terms of closing which permitted an exception for a valid objection to title, nor with their obligations as vendors under the APS. As the Court of Appeal stated in Southcott, a party in breach of a contractual obligation cannot avoid that obligation by insisting on strict adherence to the completion date.
[81] If the terms of the ‘finality clause’ in this case did create an inviolable outside limit, I also find that, in any event, the D’Silvas clearly and unequivocally waived their objection to closing and were prepared to deal with the necessary work to resolve the title impediments after closing, at their own expense.
[82] The Algrantis agree that the D’Silvas were entitled to waive their objections to the non-compliance with the Planning Act and close the transaction on December 22. The Algrantis take the position, however, that the D’Silvas did not do so. I cannot accept the Algrantis’ position that the D’Silvas did not waive their objections.
[83] The D’Silvas did. Mr. Kerr stated, in his email on December 22, 2020, that the D’Silvas were “prepared to close this transaction without any holdback”, and to complete the work to correct the severances at their cost. The D’Silvas only request was that the Algrantis consent to co-operate in connection with the corrections, post-closing.
[84] For further clarity, Mr. Kerr stated, at paragraph 2 of his email, “…They (the D’Silvas) will accept a deed today with whatever Planning Act issues need to be resolved and will correct the issues post-closing. We have waived therefore waived our objection and you are not in a position to void this transaction. Please provide us with your closing documents and the registered deed.”
[85] The Algrantis have not provided any basis or authority for their suggestion that because the D’Silvas asked for the Algrantis’ co-operation post- closing, or because steps would have to be taken to resolve title issues after closing, that waiver was not made. The D’Silvas, in writing, clearly waived their objection and were prepared to close. The D’Silvas having waived any objection, as the Algrantis acknowledge they were entitled to do, the Algrantis were in breach by failing to close.
[86] For all of these reasons, I conclude that the contract was valid, the Algrantis were in breach and the APS should be enforced.
Was the APS Void for Uncertainty?
[87] It is common ground that the rights of way in favour of a property and/or the rights of way to which a property is subject are set out in the legal description of the property.
[88] The Algrantis, in defence of this action, take the position that because the legal description was deferred, the APS is void for uncertainty as it does not provide any rights of way in favour of Algranti B, or to which Algranti B would be subject, in order to provide access to Sutherland Point Road from each of Algranti A, B and C.
[89] The parties agree on the well-established principles that apply. A precise legal description is not required for an agreement of purchase and sale to be enforceable, where the property to be conveyed is sufficiently identified: McKenzie v. Walsh (1920), 1920 CanLII 72 (SCC), 61 SCR 312 at para. 8; Dynamic Transport v. OK Detailing Ltd. 1978 CanLII 215 (SCC), [1978] 2 SCR 1072 at paras. 3, 13, 33. The defendants have not provided any authority to support their contention that an agreement of purchase and sale is void for uncertainty for failing to expressly define right of ways.
[90] In any event, Schedule A to the APS contains a clause which provides that “the seller warrants that there is ingress and egress to the property from the nearest municipal public road.” There is no issue about the existence of road access for Algranti B. There was a driveway over an easement to the property, providing road access for Algranti B. It existed and was sufficiently identified.
[91] The Algrantis have since constructed a road to Algranti A over Algranti B. The right of way that the Algrantis have constructed does not follow the roadway as set out in the reference plan and Schedule D to the APS.
[92] The D’Silvas and the Algrantis walked the property together, while looking at the drawing of the property. They saw the rights of way as shown on Schedule D. They saw the existing access to Algranti B. Both parties were aware of the intended location of the Algrantis’ new cottage, and that the Algrantis required a driveway to access Algranti A that would require a right of way over Algranti B. I cannot conclude that the Algrantis forgot about the right of way. That the right of way was not expressly reserved was a mistake on the part of the Algrantis.
[93] It is not disputed that the Algrantis never raised the issue of the absence of a proper description of the road access to Algranti B and Algranti A until after the D’Silvas commenced this action. They now argue that the APS is void because they now say they should have described road access in the APS. A unilateral mistake does not make the APS void for uncertainty.
Specific Performance
[94] Having concluded that there is a valid and enforceable contract, and there being no issue that the D’Silvas were ready, willing and able to close, the issue to be determined is whether specific performance should be granted, as sought by the D’Silvas.
[95] The Algrantis oppose the granting of specific performance on the basis that the uncertainty as to the right of ways precludes an order for specific performance, and on the basis that there are other readily available suitable properties such that damages would be an adequate remedy.
[96] There is well established authority that an order for specific performance can include provisions for the conveyancing of good title to be completed before transfer: See: Dynamic, supra.
[97] The principles to be applied with respect to an order for specific performance are well established. The plaintiff seeking specific performance must establish that: the property is unique to the extent that its substitute would not be readily available; the remedy of damages is inadequate to do justice; and there is a fair, real and substantial justification for the claim of specific performance. Semelhago v. Paramadevan 1996 CanLII 209 (SCC), [1996] 2 SCR 415 at para. 22.
[98] In considering the nature of the property, as stated by Lax J. in John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd. (2001), 2001 CanLII 28012 (ON SC), 56 OR (3d) 341, at paras 59, 60, the court is to consider whether the property is unique in that:
“The property has a quality or qualities that makes it especially suitable for the proposed use that cannot be reasonably duplicated elsewhere. Put another way, the plaintiff must show that the property has distinct features that make an award of damages inadequate. The plaintiff need not show that the property is incomparable.”
“In some case there may be a single feature of the property that is significant, but where there are a number of factors the property should be viewed as a whole”
[99] I have reviewed the cases submitted by both parties, and find them helpful, although each case turns on its own facts.
[100] The issue is whether there is a genuine issue for trial as to whether a suitable substitute was readily available at the time of closing.
[101] The Algranti B property is on 10 acres of land, with 300 feet of shoreline with treed and rocky shoreline that affords privacy, and a southwest exposure. It has a renovated, winterized main cottage, insulated bunkie and a bunkhouse. The property is an eight-minute drive from Gravenhurst.
[102] Undoubtedly, this is not the only property in Muskoka with these features. It is not incomparable.
[103] That said, there is no evidence that the constellation of features found in Algranti B could be found in one property, with as suitable a location, in the same price range, such that it could be said that a suitable substitute is readily available for purchase.
[104] The Algrantis argue that the D’Silvas’ evidence as to the subjective importance of these features to the D’Silvas should not be accepted as these features are common, not unique. The Algrantis also note that the D’Silvas stated that the property appealed to them because they could build a tennis court and mountain bike on the property; yet, the environmental reports with respect to the vernal pool area, the habitat and the steep incline of the property make it unsuitable for these activities. I am not persuaded that the fact that two of the features identified by the D’Silvas may not be able to be pursued by the D’Silvas detracts from the combined significant, distinct qualities and features that make Algranti B especially suitable for the D’Silvas.
[105] Mr. Algranti asked a local real estate agent to provide comparable listings. Mr. Algranti also provided listings in the Globe and Mail. The listings are set out in Exhibit P and Q to Mr. Algranti’s affidavit. I have reviewed Mr. Algrantis’ affidavit on this issue, and these listings. They were also reviewed by the parties in oral submissions.
[106] While each of these listings has perhaps one feature that is similar to Algranti B, each is missing several features of importance to the D’Silvas. Some of the properties with existing accommodation and some, but not all, similar qualities, are in the range of $6 to $14 million. Some in the same or lower price range are vacant land or boat access only. Not one of the listed properties is 10 acres, with three existing renovated and/or new separate living spaces, 300 feet of shoreline and a southwest exposure, in a proximate or as desirable a location for the D’Silvas, in a similar price range. Even leaving aside price, not one of the listings combines this constellation of features.
[107] While other properties may have one or more of these qualities or features, I am satisfied that this constellation of features or qualities particularly desirable for the D’Silvas could not be reasonably duplicated.
[108] This is consistent with the evidence of the D’Silvas who stated, in their affidavit, that they had viewed 19 or 20 properties before offering to purchase Algranti B, and that the Algrantis have not been able to provide an example of a single, comparable property.
[109] There is no evidence before me that supports the contention that damages would be adequate, as there is no evidence that a property with the same constellation of features, was readily or reasonably available.
[110] In considering the conduct of the parties, the D’Silvas have been consistent in their desire to complete the purchase of the property, including, as I have found, being prepared to close and take on the conveyance transfer at their own risk and cost. Balancing the equities, if specific performance is granted, the D’Silvas receive the property which I find unique, and uniquely suited to their needs.
Conclusion
[111] For all of these reasons, an order for specific performance of the Agreement of Purchase and Sale dated September 16, 2020, is granted.
[112] As requested by the moving party in oral submissions, the parties may contact the trial co-ordinator to schedule an appearance before me to address the terms of the order.
The Honourable Madam Justice S. Lavine