1. Nature of Hearing:

[1] The Plaintiff purchaser, Rosseau Group Inc. (“Rosseau”), brings this action against the defendant vendor, 2528061 Ontario Inc. (“252”), for an order for damages arising from the Defendant’s alleged breach of the parties’ Amended Agreement of Purchase and Sale dated March 10, 2017, (“amended APS”). The amended APS relates to land municipally known as 3728 Mayfield Road, Town of Caledon, Region of Peel (“the Property”). While the Plaintiff originally sought an order for specific performance in its Statement of Claim, the Plaintiff has since abandoned that relief.

[2] The Plaintiff now seeks general damages for all expenses, losses, including economic losses, and lost profits arising from the Defendant’s alleged failure to close the transaction, contrary to the terms of the Agreement of Purchase and Sale (“APS”) and the amended APS. The Plaintiff also seeks costs on a full indemnity basis.

[3] The Defendant seeks that the action be dismissed with costs. The Defendant also counterclaims against the Plaintiff for damages in the amount of $400,000, plus pre and post judgment interest. The sum of $400,000 is the amount of further deposit Rosseau was to pay upon the waiver of conditions in the APS.

2. Brief Facts / Chronology:

Key Individuals:

Dilip Jain: owner and director of 252.
Sukhpreet Sandhu: agent retained by 252 to privately market the Property.
Glen Schnarr & Associates: a planning firm retained by 252.
Manjit Singh Mangat: solicitor for 252.
Chuck Mady: runs the development operations of Rosseau.
John Mehlenbacher: director at Rosseau.
Christopher Haber: solicitor for Rosseau.
Wesley Bagnell: realtor at X-Sell Realty Inc.

Chronology

January 20, 2017

On January 20, 2017, the parties entered into an Agreement of Purchase and Sale (“APS”). The APS stipulated that the Defendant vendor 252 agreed to sell the Property to the Plaintiff purchaser Rosseau at a purchase price of $10,500,000, subject to terms set out in Schedule A to the APS. The parties agreed to a deposit of $50,000.

Schedule A to the APS included the following relevant terms:

The offer was conditional for a period of 90 days from the date that the purchaser received the following documents from the vendor (“vendor’s documents”):

a. An existing survey of the Property.

b. All documents in the vendor’s possession relating to the development of the Property.

c. All environmental, Geo-technical, soil, and other reports relating to the development of the Property.

The offer would be conditional for 90 days (the “due diligence period”) so that the purchaser could review the vendor’s documents and satisfy itself of applicable zoning rules, restrictions, and the economic feasibility of the site.
If the purchaser did not provide a waiver to the vendor within the 90-day period, then the offer would become void and the deposit would be returned to the buyer.
The closing date was 60 days after the removal of all of the conditions set out in Schedule A to the APS.
The purchaser agreed to “pay a further sum of Four Hundred Thousand $400,000.00 by bank draft or certified cheque to be held in the trust of the seller’s solicitor upon waiving all the conditions.”
The purchase price was based on 45.71 acres of land, of which approximately 30 acres was designated for residential development. The parties agreed that if the parties found that the number of developable acres was more, or less, than 30 acres, the purchase price would be adjusted by $350,000 per developable acre, which would reflect the final sale price.
If the “net developable acres” was not established prior to the closing date, then the closing date would be extended by 60 days. If the “net developable acres” was not established prior to the new, extended closing date, then the vendor agreed to take back an interest free mortgage for 50 percent of the sale price until final acreage is established.

March 10, 2017

The parties entered into an amended APS on March 10, 2017. The purchase price was adjusted to reflect a lower “net developable area” on the Property than that set out in the APS. The purchase price was reduced from $10,500,000 to $6,615,000, based on a reduction in the net developable area from 30 acres to 18.9 acres.

In the amended APS, the parties agreed to remove the following terms from the APS:

The purchase price of $10,500,000.
The buyer shall pay the balance of the purchase price by bank draft.
The purchase price was based on 45.71 acres of land, of which approximately 30 acres was designated for residential development. If the parties found that the number of developable acres was more or less than 30 acres, then purchase price would be adjusted. The adjustment would be $350,000 per developable acre, which would reflect the final sale price.
If the “net developable acres” was not established prior to the closing date, then the closing date would be extended by 60 days. If the “net developable acres” was not established prior to the new, extended closing date, then the vendor agreed to take back an interest free mortgage for 50 percent of the sale price until final acreage is established.

The parties agreed to the following terms in the amended APS:

The new purchase price was $6,615,000. This was based on 18.9 natural net developable acres with a final price adjustment accordingly based on more or less at $350,000 per natural net developable acre.
On the closing date, the Plaintiff purchaser Rosseau would pay $1,790,000 and the original $50,000 deposit to the defendant vendor 252.
The Plaintiff purchaser Rosseau would assume the defendant vendor 252’s Bank of Montreal mortgage (the “BMO Mortgage”) of $1,660,000.
The Defendant vendor 252 would provide a vendor take back mortgage of $3,115,000 to the Plaintiff purchaser Rosseau. The vendor take-back mortgage would bear no interest until “natural net developable acres are established.” Upon establishment of natural net developable acres this vendor take back would be discharged and Rosseau would pay 252 the sum of $3,115,000 plus or minus the natural net developable acres that are established.
If the “net developable acres” was not established prior to the closing date, then the closing date would be extended by 30 days. If the “net developable acres” was not established prior to the new, extended closing date, then the closing date was to be pushed back by an additional 15 days.

June 7, 2017

The Plaintiff purchaser Rosseau “waived all the conditions” during the due diligence period.

The Plaintiff purchaser did not make the $400,000 payment following the waiver of the conditions.

June 13, 2017

July 4, 2017

The Defendant vendor 252 treated the failure to pay the $400,000 as a repudiation of the amended APS and communicated this view to the Plaintiff purchaser in two letters, dated June 13, 2017 and July 4, 2017.

July 5, 2017

The Defendant vendor returned the $50,000 deposit to the Plaintiff purchaser.

August 7, 2017

This was the scheduled date for closing of the transaction. The APS dictated that the closing date was 60 days after the removal of all the conditions set out in Schedule A to the APS.

August 18, 2017

The Plaintiff commenced this action for specific performance and damages.

September 4, 2017

The Plaintiff extended the closing date to September 4, 2017.

September 19, 2017

After the final extension, the scheduled date for closing of the transaction was September 19, 2017.

October 2, 2017

The Plaintiff purchaser Rosseau obtained a Certificate of Pending Litigation on the Property.

November 29, 2017

The Defendant vendor 252 moved to set aside the CPL.

December 14, 2017

Justice Trimble ordered the CPL on the Property to be set aside.

3. Issues:

Did the Defendant breach the APS or the amended APS? This involves a determination as to whether the terms of the amended APS nullified the requirement that the Plaintiff purchaser pay the Defendant a further deposit of $400,000 upon waiver of the due diligence condition?
Was the Plaintiff ready, willing, and able to close the APS and amended APS on September 19, 2017?
Do Justice Trimble’s findings in his December 14, 2017, Endorsement estop the Plaintiff from raising the issue of uniqueness and whether the Plaintiff was ready, willing, and able to close the transaction?
What are the Plaintiff’s damages, if any?

a. Is the Plaintiff’s expert, Martin Quarcoopome of Weston Consulting, qualified to provide opinion evidence concerning Rosseau’s estimate of damages?

b. Did the Plaintiff take steps to mitigate its damages?

c. How are damages to be calculated and what are the Plaintiff’s damages?

Is the Defendant entitled to $400,000 arising out of the Plaintiff’s failure to pay the deposit as required under the APS?

4. Summary of Parties’ Positions:

i) The Plaintiff Rosseau

[4] 252 breached the APS and amended APS by declaring the agreement to be at an end on June 13, 2017. When interpreting the terms of the contract as a whole, with meaning given to all of its parts, the correct interpretation of the APS and amended APS is that the $400,000 deposit was not required to be paid by Rosseau when it waived the conditions in the APS and amended APS on June 7, 2017. Dilip Jain (“Mr. Jain”), the owner of the Defendant, admitted that the non-payment of the deposit was the only reason 252 relied upon for the alleged breach of the APS and amended APS by Rosseau.

[5] Prior to the scheduled date for closing, September 19, 2017, 252 consistently and clearly communicated its decision not to proceed with the transaction and that the APS and amended APS were at an end. By doing so, 252 was in anticipatory breach of the APS and amended APS. Rosseau did not accept 252’s breach of the APS and amended APS. Rosseau was ready, willing, and able to close the transaction. In these circumstances, Rosseau was not required to tender. The evidence is clear that Rosseau had the funds available to pay the $400,000 deposit on June 7, 2017 and to pay $1,790,000 in cash due on closing. Rosseau was also prepared to assume the BMO Mortgage as a concession to 252. To suggest otherwise, is speculation.

[6] Rosseau is entitled to damages for breach of contract based on the losses flowing from the special circumstances known to the parties at the time they entered into the APS and amended APS. Rosseau’s damages should be assessed by reference to the estimated profits Rosseau anticipated it would earn but for 252’s breach. The award of damages does not require Rosseau to establish a precise calculation of these losses. Rather, it is only necessary that Rosseau show that the parties contemplated the circumstances which embraced the damages claimed.

[7] Martin Quarcoopome should be qualified as an expert to testify on the estimated profit Rosseau would have earned but for 252’s breach. Mr. Quarcoopome obtained his knowledge and skill on this issue through his work experience and regularly renders these services and provides that advice to his clients. His expertise in this area is consistent with the basis for Rosseau’s calculation of its claim for damages.

[8] If 252 is found to be in breach of the Agreement, then the Counterclaim should be dismissed. In the alternative, if the Counterclaim is successful, the deposits should not be paid. Alternatively, the amount of the deposits should be reduced.

ii.) The Defendant 252

[9] 252 requests judgment on its Counterclaim in the sum of $400,000 and a dismissal of Rosseau’s action with costs. The requirement on Rosseau to pay the $400,000 was not expressly deleted from the APS. It would be unreasonable to interpret the amended APS to do so impliedly and Rosseau’s failure to make that payment was a breach of the APS and amended APS. In the alternative, Rosseau was not ready, willing, and able to complete the APS and amended APS despite its insistence on completing same on September 19, 2017. That failure was itself a breach of the APS and amended APS and is fatal to Rosseau’s claim. In the further alternative, Rosseau failed to mitigate its damages by failing to purchase or even look for a substitute where many other development opportunities were available (and even acted on by Rosseau’s principals in other transactions). In the further alternative, Rosseau has failed to adduce evidence relating to the normal measure of damages and a proper date of assessment for damages. Instead, it has requested that abnormal measures be utilized to assess damages on a date years in the future and has proffered a land-use planner as its expert on damages where such planner has no expertise in assessing damages and his report suffers from the frailties of that inexperience.

5. Positions of the Parties:

ISSUE 1: Did 252 breach the APS, as amended on March 10, 2017 by the amended APS? Did the terms of the amended APS nullify the requirement that the Plaintiff purchaser pay the Defendant a further deposit of $400,000 upon waiver of the due diligence condition?

Plaintiff:

[10] The Plaintiff takes the position that the parties agreed that the amended APS removed the requirement that the Plaintiff pay the $400,000 deposit upon waiver of all conditions.

[11] To support its position, the Plaintiff relies on the testimonies of Mr. Bagnell, Mr. Sandhu, and Mr. Jain, who all testified that at a meeting in February 2017, the parties discussed an amendment to the APS that would reduce the purchase price to $6,615,000. Mr. Bagnell and Mr. Jain both testified that the Defendant had a Bank of Montreal mortgage registered on the Property, and that the parties discussed that the Plaintiff would assume the BMO mortgage, so that the Defendant could avoid a penalty. The Plaintiff’s position is that the Plaintiff agreed to assume the mortgage in exchange for the removal of the $400,000 deposit requirement.

[12] The Plaintiff also submits that that the $400,000 deposit was deleted in the amended APS, because when the agreed upon payments in the amended APS are totaled, an additional $400,000 payment would increase the purchase price beyond the amount specified in the amended APS. Specifically, the Plaintiff submits that the parties agreed on the following payments: $50,000 (deposit); $1,790,000 (due on closing); $1,660,000 (BMO Mortgage); and $3,115,000 (vendor take back mortgage). The Plaintiff submits that because the total of these amounts is equal to the agreed upon purchase price, it is clear that there was no requirement to pay an additional $400,000 as a deposit.

[13] The Plaintiff relies on the Supreme Court of Canada’s decision in Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, [2014] 2 S.C.R. 633 (“Sattva”), at para. 47 to submit that the words of a contract, alone, do not have an immutable or absolute meaning. Rather, when interpreting the provisions of a contract, courts should determine the intent of the parties and the scope of their understanding by reading the contract as a whole and in a manner consistent with the circumstances known to the parties at the time of the formation of the contract. The Plaintiff also relies on the Court of Appeal for Ontario’s decisions in Beatty v. Wei, 2018 ONCA 479 (“Beatty”), at para. 47 and Starrcoll Inc. v. 2281927 Ontario Ltd., 2016 ONCA 275 (“Starrcoll“), at para. 17. to emphasize that the words in a contract must be read in the context in which these words are used.

Defendant:

[14] The Defendant’s position is that the Plaintiff was required to pay the $400,000 deposit and that this requirement was not deleted by the amendment to the APS. The Defendant submits that a $50,000 deposit would not have been reasonable in the context of the agreed upon purchase price of approx. $6,600,000, whereas a $450,000 deposit was reasonable, because it amounted to four percent of the agreed upon purchase price. The Defendant submits that the combined $450,000 deposit was a “significant and substantial” part of the APS. In this regard, the Defendant relies on Mr. Sandhu’s testimony that a $500,000 deposit would have been appropriate, given the purchase price.

[15] In response to the submission the Plaintiff agreed to assume the BMO Mortgage in exchange for a removal of the $400,000 deposit requirement, the Defendant submits that the Plaintiff’s assumption of the BMO mortgage was not a burden to the Plaintiff. The Defendant submits that by assuming the mortgage for $1,660,000, the Plaintiff would have been able to avoid paying approximately $1,660,000 in cash on closing. The Defendant relies on the testimonies of Mr. Jain and Mr. Sandhu, who testified that neither of them discussed the deletion of the $400,000 deposit at the February 2017 meeting.

[16] The Defendant also relies on the Supreme Court of Canada’s decision in Sattva to submit that the interpretation of contracts requires an analysis of the objective intentions of the parties as expressed in the words of the contract (see Sattva, at para. 32). The Defendant’s position is that the Plaintiff’s interpretation of the amended APS is neither reasonable nor supported by the context of the negotiations leading up the amendment of the APS. First, the Defendant submits that the amended APS clearly listed which terms of the APS were deleted, and that the additional $400,000 payment was not deleted in the amended APS. Second, the Defendant submits that the amendment to the APS was primarily intended to address (a) the reduction in the estimated developable acreage, and (b) the assumption of the BMO mortgage. The Defendant relies on the testimonies of Mr. Jain and Mr. Sandhu, who both testified that the $400,000 deposit was not discussed at the February 2017 meeting.

[17] Finally, in response to the Plaintiff’s submission that “since there was no room for the further $400,000 deposit, it must not exist” the Defendant submits that this interpretation appears to be taken after the amendment to the APS in order to justify the Plaintiff’s failure to pay the $400,000 deposit. The Defendant submits that this interpretation of the amended APS was never recorded by the Plaintiff, nor conveyed to the Defendant via correspondence. The Defendant submits that neither 252 nor Mr. Jain had knowledge or notice of the Plaintiff’s interpretation of the amendment as deleting the $400,000 deposit. Significantly, the Defendant submits that the interpretation that the $400,000 deposit would cause the purchase price to increase by $400,000 is an ill-considered view to take because this view does not consider that the $400,000 would have been credited against the purchase price.

Plaintiff’s Reply:

[18] The Plaintiff asserts that the Defendant misstates the evidence in four instances. First, the Defendant states that Mr. Sandhu did not intend to delete the $400,000. In response, the Plaintiff submits that Mr. Sandhu stated in his testimony that he did not recollect whether he discussed deleting the $400,000 with Mr. Bagnell. The Plaintiff further points to Mr. Sandhu’s repeated claim that the numbers as tallied in the amendment total the final purchase price as indicative that the $400,000 was to be excluded. Second, in response to the Defendant’s reliance on Mr. Jain’s subjective interpretation of the amendment to include the $400,000, the Plaintiff argues that Mr. Jain’s subjective interpretation is both unreasonable and irrelevant. Third, the Defendant claimed that neither 252 nor Mr. Sandhu were informed about the Plaintiff’s opinion as to the $400,000. The Plaintiff challenges this claim by pointing to Mr. Mady’s testimony, during which he claimed to have negotiated the reduction. Fourth, the Defendant submits that the parties agreed that the second deposit (presumably the $400,000) would be applied to the purchase price. The Plaintiff suggests that this assertion cannot be reconciled with the text of the amendment which neatly broke down the final purchase sum and did not include the $400,000. Finally, the Plaintiff asserts that the deletion of the $400,000 was consistent with the proposed structure of the transaction whereby the Plaintiff would take over the Defendant’s mortgage with the Bank of Montreal.

ISSUE 2: Was the Plaintiff purchaser ready, willing, and able to close the APS and amended APS on September 19, 2017

Plaintiff:

[19] The Plaintiff makes two submissions in relation to this issue. First, the Plaintiff submits that the Defendant engaged in an anticipatory breach of the agreement that released the Plaintiff from continuing in its obligations under the APS. Second, the Plaintiff submits that it rejected the Defendant’s repudiation of the contract and was ready, willing, and able to complete the transaction on September 19, 2017.

[20] In support of its position, the Plaintiff relies on the Court of Appeal for Ontario’s decision in Place Concorde East Limited Partnership v. Shelter Corporation of Canada (2006), 2006 16346 (ON CA), 211 O.A.C. 141 (C.A.) (“Place Concorde”). The Plaintiff submits that per Place Concorde paras. 49-50, a repudiatory breach confers a right on the innocent party to decide whether it will accept the repudiation and bring an end to the contract, or to treat the contract as if it is still in full force and effect. The Plaintiff submits that it rejected the repudiation of the contract, and treated it as binding.

[21] In response to the Defendant’s submissions on this issue, the Plaintiff posits that it was ready, willing, and able to complete the transaction because it had the required funds to pay on closing; it was prepared to assume the BMO mortgage; and it had established the estimated developable acreage of the Property. The Plaintiff submits that it had $1,942,311.91 available to pay off the outstanding $1,790,000 due on closing. Further, the Plaintiff submits that because the Defendant vendor breached the agreement, the Plaintiff was released from its obligation to tender. The Plaintiff relies on the Ontario Court of Appeal’s decisions in Pompeani v. Bonik (1997), 1997 3653 (ON CA), 104 O.A.C. 149 (C.A.) (“Pompeani”) and Di Millo v. 2099232, 2018 ONCA 1051, 430 D.L.R. (4th) (“Di Millo”), and the Superior Court decision Silverberg v. 1054384 Ontario Limited (2008), 77 R.P.R. (4th) 102 (Ont. S.C.), 2009 ONCA 698 affirmed (“Silverberg”). The Plaintiff submits that these decisions stand for the proposition that where the vendor was the party that breached the agreement, the Plaintiff was released from its obligation to tender on closing.

Defendant:

[22] The Defendant’s position is that the Plaintiff Rosseau breached the APS because the Plaintiff was not ready, willing, and able to complete the APS on September 19, 2017. The Defendant submits that the Plaintiff was required to pay $3,450,000 on closing to satisfy the purchase price. The Defendant submits that the Plaintiff’s assertions that it “could have been ready to close” are not relevant to the analysis of whether the Plaintiff was actually ready to close on the September 19 closing date. The Defendant relies on the Court of Appeal for Ontario’s decisions in Domicile Developments v. MacTavish (1999), 1999 3738 (ON CA), 120 O.A.C. 375 (C.A.) (“Domicile”); Kwon v. Cooper (1996), 1996 1261 (ON CA), 89 O.A.C. 239 (C.A.) (“Kwon”); and 1179 Hunt Club Inc. v. Ottawa Medical Square Inc., 2019 ONCA 700, 6 R.P.R. (6th) 173 (“Hunt Club”).

[23] The Defendant relies on evidence that it says shows that the Plaintiff lacked sufficient funds in its two bank accounts to cover the required payments on closing. The Defendant further submits that the Plaintiff is relying on the ‘group enterprise theory’ to support its proposition that it was ready, willing, and able to close the transaction. That is, the Plaintiff asserts that it could have availed itself of the funds of related corporations. The Defendant submits that the group enterprise theory was already rejected by the Court of Appeal for Ontario in Yaiguaje v. Chevron Corporation, 2018 ONCA 472, 141 O.R. (3d) 1 (“Yaiguaje”), as it violates the principle of “corporate separates.” The Defendant further submits that even if the court were willing to accept the group enterprise theory, the Plaintiff would still not have been able to muster the necessary funds to close the transaction on the agreed upon terms.

Plaintiff’s Reply:

[24] The Plaintiff submits that the Defendant’s assertion that Rosseau did not wish to close the transaction is not supported by the evidence. First, the Plaintiff submits that the Defendant has misrepresented Mr. Mady’s testimony in respect to his feelings following the reduction in net developable acreage: the Defendant claimed that Mr. Mady was disappointed; the Plaintiff emphasizes that Mr. Mady said ‘a little disappointed.’ Second, the Plaintiff claims that the Defendant’s assertion that the Rousseau group did not begin due diligence until July 2017 and that it failed to produce an extensive feasibility study are refuted by the evidence. The Plaintiff points to Mr. Mady’s testimony that he engaged in a ‘high level analysis’ which he then discussed with Mr. Quarcoopome.

[25] The Plaintiff rejects the Defendant’s claim that in the absence of taking over the BMO Mortgage they would not have been ready, willing, and able to close. Instead, the Plaintiff relies on Nutzenberger v. Mert, 2021 ONSC 36, at para. 35, to submit that the Defendant’s failure to provide them with contact information for the mortgage ought to be considered - presumably in determining whether they took steps to take over the mortgage. Additionally, the Plaintiff relies on Mr. Mehlenbacher’s testimony to suggest that even in the absence of the BMO mortgage, the Plaintiff was in a position to raise the necessary funds to complete the transaction and were, therefore, ready, willing, and able to close.

[26] The Plaintiff further asserts that the cases cited by the Defendant are factually distinguishable from the case at bar, and that the legal maxims set out in the cases favour the Plaintiff. The Plaintiff reiterates the argument it made in its closing submission that Domicile, which the Defendant cites, stands for the proposition that where a vendor refutes the contract, the innocent purchaser is not required to prove that they were ready, willing, and able to close. The Plaintiff asserts that Hunt stands for that same proposition.

ISSUE 3: Do Justice Trimble’s findings in his December 14, 2017 Endorsement estop the Plaintiff from raising the issue of uniqueness and the issue of whether the Plaintiff was ready, willing, and able to close the transaction?

Plaintiff:

[27] The Plaintiff’s initial closing submission was silent on this issue.

Defendant:

[28] The Defendant asserts that the issue of uniqueness in respect to the Property and the question of whether the Plaintiff was ready, willing, and able to close were conclusively dealt with at the motion to vacate the CPL. There, Justice Trimble concluded, after considering evidence from both parties, that the Property was not unique and that the Plaintiff was not ready, willing, and able to close. The Defendant relies the Toronto Dominion Bank v Leigh, 1998 14806 (ON SC), 63 O.T.C. 1 (Gen. Div.), additional reasons in 78 O.T.C. 134, affirmed in 1999 3778 (ON CA), 124 O.A.C. 87 (“Leigh”). to assert that the Plaintiff’s failure to appeal the ruling made on the interlocutory CPL motion precludes them from now raising these issues here.

Plaintiff’s Reply:

[29] In response, the Plaintiff asserts that Leigh, is distinguishable from the facts of this case; therefore, they ought to be permitted to raise both issues again. In Leigh, estoppel was applied to prevent a party from asking a series of questions that were designed to elicit information contained in a memorandum, the release of which was prohibited by order of a motions judge. Instead, the Plaintiff relies on the Court of Appeal for Ontario’s decision in G.P.I. Greenfield Pioneer Inc. v Moore (2002), 2002 6832 (ON CA), 155 O.A.C. 305 (C.A.) (“Greenfield”), at paras. 18-20, to argue that the issue of uniqueness and whether the Plaintiff was ready, willing, and able to close have not been conclusively dealt with. There, the Court held that a motion to discharge a CPL does not constitute a final determination in respect to a party’s interest in a property.

ISSUE 4: What are the plaintiff’s damages?

a. Is the Plaintiff’s expert, Martin Quarcoopome of Weston Consulting, qualified to provide opinion evidence concerning the Plaintiff’s estimate of damages?

Plaintiff:

[30] The Plaintiff concedes that their expert Mr. Quarcoopome is not an expert appraiser or expert business valuator. However, the Plaintiff submits that Mr. Quarcoopome was not retained to value land or the business. Rather, he was asked to opine on a specific type of damages, namely, those suffered due to being unable to develop the Property; this, the Plaintiff contends, lies within Mr. Quarcoopome’s area of expertise as a development consultant. The Plaintiff contends that Mr. Quarcoopome’s 15 years of experience working with landowners to determine the financial cost, and ultimate profit, of real estate development make him an expert on the development potential of various properties. The Plaintiff explains that, in his capacity as development consultant, Mr. Quarcoopome collects information and reports from third parties in respect to the reports that he prepares.

Defendant:

[31] The Defendant asserts that Mr. Quarcoopome is not qualified to testify as an expert in respect to damages, that the methodology he employed in creating his report is unreliable, and that he is not free of bias. The Defendant argues that Mr. Quarcoopome’s expertise as a land planner does not qualify him to opine on contract damages, especially since he has never prepared a damage valuation report. The Defendant further argues that Mr. Quarcoopome’s evidence ought not to be admitted. The Defendant asserts that the Plaintiff’s history of transferring acquired properties to a related corporation indicates a lack of intention to develop the Property now subject of the litigation. Therefore, the expert’s report is irrelevant as it discusses specifically those damages suffered on account of being unable to develop the Property. Similarly, the Defendant argues that the methodology employed by Mr. Quarcoopome is too imprecise and primitive to yield a reliable outcome. In particular, the Defendant points to the following perceived flaws in Mr. Quarcoopome’s report:

• He opined on the Plaintiff’s hypothetical profit from developing the Property without investigating the profitability of the Plaintiff’s other projects.

• He did not consider the Plaintiff’s ability to mitigate of damages.

• His analysis is premised on the assumption that the Plaintiff will develop the land; however, Mr. Mady and Mr. Mehlenbacher conceded that in their business structure another corporation would be responsible for development.

• His report does not state what date of assessment was used.

[32] The Defendant questions Mr. Quarcoopome’s impartiality on the basis that he is the only planner Mr. Mady has used in five years.

Plaintiff’s Reply:

[33] In respect to the Defendant’s allegations of partiality, the Plaintiff submits that a prior retention of the expert is irrelevant when assessing bias. Relying on the Supreme Court’s ruling in White Burgess Langille Inman v Abbott Haliburton Co., 2015 SCC 23, para. 49, the Plaintiff posits that it is settled law that the impartiality of an expert is related to their ability to provide the court with objective evidence and is not impeached merely because they were involved in work ultimately leading to the litigation.

b. Did the Plaintiff take steps to mitigate its damages?

Plaintiff:

[34] The Plaintiff cites Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51, [2012] 2 S.C.R. 675, to assert that the Defendant bears the onus to demonstrate that mitigation was possible and that the Plaintiff failed to take reasonable steps to mitigate their damages. The Plaintiff states that the Defendant has been unable to demonstrate this, and that in any event, the Plaintiff was unable to mitigate its’ loss. The Plaintiff points out that they examined up to 30 properties each month in the Greater Toronto Area (“GTA”) and the regions beyond; this, Plaintiff suggests constitutes reasonable steps to seek out a viable alternative property to mitigate their loss. The Plaintiff further submits that they made a series of purchases in 2017; however, none that were able to mitigate for the alleged loss of the Property. The Plaintiff, relying on the conclusion of their expert, Mr. Bottero, asserts that the properties that the Defendant’s expert, Mr. Tilley, deemed ‘similar’ were not comparable to the Property.

[35] The Defendant retained Mr. Tilley to demonstrate that mitigation was possible for the Plaintiff. The Plaintiff called Mr. Tilley’s methodology into question. In particular, the Plaintiff points to the following perceived flaws in Mr. Tilley’s report:

• He toured neither the Property nor the properties suggested as alternatives at the time of the report.

• His analysis on the viability of the alternate properties was premised on outdated and inaccurate data in respect to size of the area available for development.

• He did not contact Weston Consulting to obtain an updated number for the developable acreage of the Property.

• He conceded that his budget in completing the report was on the lower range of the spectrum.

• He did not verify the relationship between transacting parties in respect to the alternative properties and failed to determine the nature and methodology of those transactions.

[36] In their written submissions, the Plaintiff reviewed each of the eleven alternative sites identified by Mr. Tilley and, relying on concessions obtained during Mr. Tilley’s cross-examination, submits that none of the suggested cites are a viable alternative to the Property.

[37] The Plaintiff requests that the Court accept the evidence of Mr. Bottero, its own expert, over that of Mr. Tilley. The Plaintiff submits that Mr. Bottero’s methodology was more precise and did not contain the flaws that it alleges mar Mr. Tilley’s assessment. Relying on Mr. Bottero’s testimony, the Plaintiff claims that several of the alternative properties were not listed on the open market and therefore not readily accessible to the Plaintiff. In any event, the Plaintiff posits that in Mr. Bottero’s opinion the Property was more desirable than any of the alternative properties.

Defendant:

[38] The Defendant submits that the Plaintiff failed to take steps to mitigate their losses. The Defendant analogizes the facts of the case at bar to those of Southcott, at para. 83 where the Supreme Court found that the Plaintiff in a real estate litigation had failed to mitigate their losses after not taking steps to locate alternate properties. There, at para. 84, the Plaintiff corporation was a subsidiary of a larger business; the court held the Plaintiff was not free to rely on the purchase of other subsidiaries controlled by the same directing mind to argue that it was engaged in mitigation. The Defendant submits that the evidence of its expert, Mr. Tilley, illustrates that if the Plaintiff had engaged in steps to mitigate, it would have been successful. The Defendant also submits that the Plaintiff’s expert, Mr. Bottero’s, claim that the alternatively available properties were not sufficiently similar is irrelevant as the Plaintiff abandoned their claim for specific performance, thereby conceding that the Property was not unique.

[39] The Defendant further submits that in any case the Court does not need to concern itself with the discrepancy between Mr. Tilley’s and Mr. Bottero’s opinions. The Defendant submits that the issue of uniqueness of the land was conclusively dealt with by Justice Trimble and the issue is, therefore, res judicata.

Plaintiff’s Reply:

[40] The Plaintiff rejects the Defendant’s assertion that there were “thousands” of comparable properties available. Instead, the Plaintiff reiterates that that the evidence shows that they sought out alternatives but were unable to find a satisfactory property.

[41] The Plaintiff posits that the testimony of Mr. Bottero continues to be relevant and does not address a moot issue. The Plaintiff submits that the defense is erroneously conflating the issue of uniqueness for purposes of specific performance and the issue of mitigation. The Plaintiff maintains that Mr. Bottero’s evidence demonstrates that mitigation was not possible.

c. How are damages to be calculated and what are the Plaintiff’s damages?

Plaintiff:

[42] The Plaintiff initially requested specific performance but has since abandoned that claim. Instead, the Plaintiff asks for damages ‘somewhere’ between $10.1 million to $12.1 million, based on the estimated profit the Plaintiff would have earned had the purchase closed and the Plaintiff developed the Property. The Plaintiff relies on Performance Industries Ltd. v. Sylvan Lake Golf & Tennis Club Ltd., 2002 SCC 19, [2002] 1 S.C.R. 678, for the proposition that ‘lost profits’ are an appropriate measure of damages in litigation such as this. The Plaintiff refers to the evidence of Mr. Quarcoopome to justify the range of the quantum requested. He estimated that Rosseau would have incurred approximately $11 million in expenses to, inter alia, develop, construct, and rezone, the land and the associated tax and legal costs of this venture. However, Rosseau’s efforts would have yielded approximately $21.5 million to $23.5 million in revenue, totaling lost profits of $10.1 million to $12.1 million.

Defendant:

[43] The Defendant refers to the Court of Appeal for Ontario’s ruling in Rougemount Capital Inc. v. Computer Associates International Inc., 2016 ONCA 847, for the proposition that this Court should start from a presumption that damages are assessed from the point in time of the breach of the contract. Therefore, the Defendant asks the Court to conclude that the appropriate measure of damages ought to be the difference in the contracted price and the market value of the Property on September 19, 2017.

Plaintiff’s Reply:

[44] In reply, the Plaintiff counters that Justice Morgan clarified at para. 22 in Akelius Canada Inc. v. 2436196 Ontario Inc., 2020 ONSC 6182, a case that the Defendant had themselves relied on, that “the date for the assessment of damages is determined by what is fair on the facts of each case.” Therefore, the Plaintiff submits that the Defendant’s theory of damages ought to be disregarded.

ISSUE 5: The Defendant’s Counterclaim.

Plaintiff:

[45] The Plaintiff submits that the Defendant’s own conduct following its repudiation of the APS illustrates that its counterclaim is without merit. After indicating to the Plaintiff’s counsel that it treated the APS and amended APS to be at an end, the Defendant returned the deposit and issued no subsequent demands for money. The Plaintiff now asks the court to exercise its discretion under s. 98 of the Courts of Justice Act, R.S.O. 1990, c. 43 and excuse the Plaintiff from having the deposit forfeited. The Plaintiff relies on Jesan Real Estate Ltd. v. Doyle, 2020 ONCA 714, 26 R.P.R. (6th) 233, (“Doyle”) at para. 54 to support its proposition. There, the Court of Appeal for Ontario held that the exercise of judicial discretion was warranted where the forfeited deposit was disproportional to the damages suffered and where it would be unconscionable for the vendor to retain the monies. The Plaintiff submits that the deposit of $400,000 was premised on a total purchase price of $10,500,000. When the overall price was adjusted downward to $6,615,000 the deposit price was not reduced; therefore, the Plaintiff reasons, it is not proportional. The Plaintiff notes that it would be unconscionable for the Defendant to retain the deposit as it suffered no losses on account of its conduct, had no apparent expectations of receiving the monies, and had the opportunity to obtain the deposit and the full purchase price if it would have closed the transaction.

Defendant:

[46] The Defendant submits that it is entitled to $400,000 in damages because the Plaintiff failed to pay the $400,000 deposit. The Defendant takes the position that the termination of the APS did not extinguish 252’s rights under the agreement, including the Plaintiff’s obligation to pay the $400,000 deposit. In support of its position, the Defendant relies on the British Columbia Court of Appeal’s decision in Vanvic Ent. Ltd. v. Mack (1985), 1985 588 (BC CA), 17 D.L.R. (4th) 177 (B.C. C.A.) (“Vanvic”). The Defendant submits that it bases its counterclaim on the Vanvic decision, wherein the court held that a Plaintiff had the right to recover a deposit that had been paid by the Defendant via cheque where the contract had been repudiated. The Defendant submits that the deposit was a right that accrued to 252 at the time of the waiver and survives the contract. Consequently, 252 is entitled to recover the amount of the $400,000 as damages.

Plaintiff’s Reply:

[47] The Plaintiff makes three submissions in reply in respect to the Defendant’s claim for $400,000. First, the Plaintiff asserts that the Defendant misrepresents Mr. Sandhu’s evidence in respect to the amendment to the APS. Second, the Plaintiff posits that because Mr. Jain instructed his solicitors to terminate the agreement, his subjective interpretation of the contract is irrelevant. Third, the Plaintiff submits that the contextual evidence surrounding the amendment indicates that the parties intended to remove the $400,000 deposit from the final agreement.

6. Analysis

ISSUE 1: Did 252 breach the APS, as amended on March 10, 2017 by the amended APS? Did the terms of the amended APS nullify the requirement that the Plaintiff purchaser pay the Defendant a further deposit of $400,000 upon waiver of the due diligence condition?

I. The Law

[48] The proper approach to contract interpretation was summarized by the Supreme Court of Canada in Sattva, at paras. 47 and 57:

[47] Regarding the first development, the interpretation of contracts has evolved towards a practical, common-sense approach not dominated by technical rules of construction. The overriding concern is to determine “the intent of the parties and the scope of their understanding” (Jesuit Fathers of Upper Canada v. Guardian Insurance Co. of Canada, 2006 SCC 21, [2006] 1 S.C.R. 744, at para. 27, per LeBel J.; see also Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, [2010] 1 S.C.R. 69, at paras. 64-65, per Cromwell J.). To do so, a decision-maker must read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract. Consideration of the surrounding circumstances recognizes that ascertaining contractual intention can be difficult when looking at words on their own, because words alone do not have an immutable or absolute meaning:

No contracts are made in a vacuum: there is always a setting in which they have to be placed. . . . In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating.

(Reardon Smith Line, at p. 574, per Lord Wilberforce)

[57] While the surrounding circumstances will be considered in interpreting the terms of a contract, they must never be allowed to overwhelm the words of that agreement (Hayes Forest Services, at para. 14; and Hall, at p. 30). The goal of examining such evidence is to deepen a decision-maker’s understanding of the mutual and objective intentions of the parties as expressed in the words of the contract. The interpretation of a written contractual provision must always be grounded in the text and read in light of the entire contract (Hall, at pp. 15 and 30-32). While the surrounding circumstances are relied upon in the interpretive process, courts cannot use them to deviate from the text such that the court effectively creates a new agreement (Glaswegian Enterprises Inc. v. B.C. Tel Mobility Cellular Inc. (1997), 1997 4085 (BC CA), 101 B.C.A.C. 62).

[49] Further, para. 47 of the Court of Appeal for Ontario’s decision in Beatty provides as follows:

[47] A fundamental precept of contractual interpretation is that “a contract is to be construed as a whole with meaning given to all of its parts”: Geoff R. Hall, Canadian Contractual Interpretation Law, 3d ed. (Toronto: LexisNexis Canada, 2016), at p. 16. A provision in a contract should not be read as standing alone, but in light of the agreement as a whole and its other provisions: Hillis Oil and Sales Limited v. Wynn's Canada, Ltd., 1986 44 (SCC), [1986] 1 S.C.R. 57, at p. 66. See also Hall, at p. 21.

[50] The Court of Appeal for Ontario elaborated on this approach in para. 20 of Starrcoll:

[20] As explained in Sattva, contractual interpretation is a search for the objective intention of the parties as discerned from the language of the relevant provision considered in the context of the entirety of the agreement, the purpose of the provision, the nature of the relationship created by the agreement, and any other relevant surrounding circumstances. An application of that approach to the Escrow Provision leads me to conclude that gross rental as at the end of the Performance Period (May 1, 2014) was to be determined by annualizing the amount of rental income shown on the rent rolls setting out the rents as of May 1, 2014. On that interpretation, the $960,000 threshold was met and Starrcoll is entitled to the $300,000.

[51] While surrounding circumstances will be considered in interpreting the terms of a contract, the surrounding circumstances cannot “overwhelm the words” of the agreement. The court must ground its interpretation in the text of the contract, looking at the objective evidence. Evidence of an individual’s interpretation of the agreement is not helpful. (See Deslaurier Custom Cabinets Inc. v. 1728106 Ontario Inc., 2017 ONCA 293, 135 O.R. (3d) 241, at paras. 37-38.)

II. The Evidence

a) The Parties:

[52] Most of the facts concerning the circumstances surrounding the execution of the APS are not in dispute. There is only disagreement as to the evidence surrounding the execution of the amended APS. I will resolve any factual disputes as required and indicate where the positions differ on the evidence.

[53] Rosseau was formed in 2013. It is directed by John Mehlenbacher. Mr. Mehlenbacher deposed that the Rosseau operates in two silos. One silo is a private equity fund where the company raises money from outside investors in a limited partnership format to invest in its own or other parties’ projects. In the second silo, Rosseau buys and develops land financed with private equity funds.

[54] Mr. Mehlenbacher testified that in almost all circumstances, he incorporates separate corporations to own lands purchased for investment and development. This is confirmed by evidence regarding previous investments and projects in which Mr. Mehlenbacher participated - all of which, save one, were entered into by corporations other than Rosseau.

[55] Mr. Mehlenbacher testified that there were a number of separate corporations also owned and managed by himself and other shareholders. Some of the corporations mentioned were Rosseau Development Corp., Condo Store Realty Inc., Condo Store Marketing System Inc., and Insider Condo Club Ltd. There was no evidence submitted that these corporations were subsidiaries of Rosseau - only that Mr. Mehlenbacher was involved in them as he is involved with the Rosseau.

[56] In 2013, when Rosseau started, it operated as a private equity fund and invested in other parties’ projects. In 2016, Rosseau opened its own development infrastructure to finance its own projects with its own funds. Rosseau retained Chuck Mady for that purpose. Mr. Mady runs the development operation of Rosseau and oversees sourcing land and projects from the start to finish.

[57] Mr. Mady provided evidence of his decades long career in real estate development including his substantial experience and expertise in planning, construction, financing, and determining revenue.

[58] Mr. Jain is a director of 252. He testified that 252 was incorporated in July 2016 for the sole purpose of purchasing and owning the Property. Mr. Jain is a pharmacist and has been a pharmacist for approximately 36 years. He had no real estate development experience prior to the acquisition of the Property.

[59] Mr. Jain testified that in July 2016, 252 purchased the Property for $2.65 million. The purchase was financed by a $1,680,000 loan from BMO, which was secured by a first mortgage registered against title to the Property. It was a fixed mortgage for five years at an interest rate of 2.49 % per annum.

[60] Mr. Jain’s intention in purchasing the Property through 252 was to develop it himself by rezoning it and building residential homes. He also hoped to have 252 develop and build a health clinic at the Property. He intended to develop the Property because he knew “that is where the real money was.” He retained Glen Schnarr & Associates (“Schnarr”) to assist him with the development of the Property.

b) The APS:

[61] The litigation arises out of the failed purchase and sale of the Property. The Property is located at the north east corner of Mayfield Road and Kennedy Road in Caledon. It is 45.71 acres and contains a substantial amount of natural heritage features including a wetland and valley system.

[62] The Property is undeveloped and made up of vacant farmland, wetlands, and a residential house. The Property is zoned for agricultural (A1) and conservation (EPA 2 - Environmental Policy Area 2) uses. A large part of the Property is made up of environmentally sensitive wetland and the Property is under the jurisdiction of the Toronto and Region Conservation Authority (“TRCA”).

[63] The parties’ evidence is consistent concerning their introduction to each other and the steps leading to the preparation and execution of the APS.

[64] Schnarr advised Mr. Jain that it would take, at a minimum, seven and half to ten years to develop the Property. The process would be long and costly. As a result, Mr. Jain decided to sell the Property instead.

[65] Mr. Jain was approached by a realtor, Sukhpreet Sandhu at the Jain Professional Centre in January of 2017. Mr. Sandhu’s brother-in-law was one of Mr. Jain’s tenants at the Professional Centre. Mr. Sandhu came to know about 252’s ownership of the Property and offered to market it for sale. Mr. Sandhu was retained by 252 as agent to privately market the Property; it was not listed on the Multiple Listing Service.

[66] Mr. Sandhu brought the Property to the attention of Wesley Bagnell, a realtor at X-Sell Realty Inc., in or about January of 2017. Mr. Sandhu described the Property to Mr. Bagnell as having 30 developable acres and that a lot of work had to be done to get it developed. Mr. Sandhu and Mr. Bagnell discussed that 252 was interested in selling the land for $350,000 per developable acre.

[67] In or about December 2016 or January 2017, Mr. Mady met Mr. Bagnell. Mr. Mady advised Mr. Bagnell that he was looking for small to average residential parcels of land with interesting physical characteristics. Mr. Mady testified that he did not want to develop a subdivision in tract land. He was looking for a small property of 5 - 40 acres, that had physical characteristics that he could leverage.

[68] Mr. Mady explained it was harder to compete with the large tract builders in Toronto. He was interested in finding “niche plays”: small properties with unique features, like wetlands or rolling terrain, that he could leverage into a “green themed community.” By “leverage”, Mr. Mady confirmed, he meant developing a natural heritage subdivision of single and townhomes with walking trails or nature trails. Mr. Mady had experience with this type of development in the past, testifying that he has “known people to love getting involved with a community like that.”

[69] According to Mr. Bagnell, Mr. Mady advised him that Rosseau was interested in purchasing “development properties” and “investment properties” to develop or sell. Mr. Bagnell testified that there were no particular or unique features described by Mr. Mady to guide Mr. Bagnell’s search - simply that Rosseau was looking for investment or development properties.

[70] Mr. Bagnell and Mr. Mady both testified that Mr. Bagnell introduced Mr. Mady to the Property. They visited it together and after seeing it, Mr. Mady instructed Mr. Bagnell to prepare an offer at $350,000 per net developable acre. All relevant witnesses testified that the purchase price was based on the amount of net developable acres because the value in the land is in its potential for development.

[71] Mr. Bagnell prepared an APS dated January 20, 2017. Rosseau signed on January 16, 2017, and 252 signed on January 18, 2017. The Defendant did not negotiate the APS. 252 accepted the terms of the APS without any amendments.

[72] The material terms of the APS are as follows:

i. Purchase price $10,500,000;

ii. The APS was conditional for a period of 90 days from the receipt of the vendor’s documents for the purchaser to satisfy itself including but not limited to the following issues:

a) Reviewing all the vendor’s documents in its possession related to the development of the Property;

b) Zoning and restrictions;

c) The economic feasibility of the development of the site.

iii. If the Seller or the Seller’s agent did not receive in writing during the due diligence period that the condition has been waived, then the APS would be null and void and the deposit returned to the Buyer in full without interest or deductions. Rosseau had paid a $50,000 deposit at the time of the APS to Manjeet Singh Mangat, 252’s solicitor. The deposit was to be held in trust pending completion and to be credited toward the purchase price on completion.

iv. The Buyer agrees to pay a further sum of $400,000 by bank draft or certified cheque to be held in the trust of the Seller’s solicitor upon waiving all the conditions.

v. The purchase price under the APS was adjustable based in the “developable” acres as provided for at Schedule A to the APS. The purchase price was based on a price of $350,000 per developable acre to be adjusted accordingly, with 50 per cent of the sale price held by an interest free take back mortgage until the final acreage is established. Schedule A to the APS provides the following clause:

The purchase price of $10,500,00 is based on 45.71 acre of which approximately 30 acre being developable and designated for residential development, allowing townhouses, semis and single homes, in the event of the number of developable acres is changed to be more or less as stated above, then the purchase price to be adjusted accordingly based on a price of $350,000 per developable acre to reflect the final sale price, in the event net developable acres is not established prior to the date set for closing, then closing shall be expanded for further 60 days and in the event net developable is still not established, then Seller agrees to take back an interest -free mortgage for 50 per cent of the sale price until, final acreage is established, the mortgage shall be due and payable 15 days following the net developable being established.

vi. Closing was scheduled to be 60 days after the removal of the all conditions.

vii. Rosseau had free reign to conduct its own due diligence and inspect the Property.

[73] Mr. Jain testified that he knew Rosseau’s intention in purchasing the Property was to develop the land and build houses. The APS clearly contemplates residential development on the Property. Mr. Jain acknowledged that the value of the Property was based on its development potential. He knew it would take many years to develop.

[74] Mr. Jain agreed that the parties would not know the final determination of the net developable acres of the Property until after closing. Once it was determined, Rosseau would pay the balance of the purchase price and the vendor take back mortgage would be discharged.

[75] The identity of the person or authority who would determine or “establish” the “final acreage” referred to in the APS was not resolved by the parties during the life of the transaction. Mr. Mady testified that he believed that it would be determined by TRCA and 252’s planner. Mr. Quarcoopome testified that TRCA would make that determination. Mr. Jain testified that he thought it would be Rosseau and its planner who would establish that acreage.

c) Events Subsequent to the Delivery of the APS:

[76] Mr. Jain testified that shortly after the APS was entered into between 252 and Rosseau, he was informed by 252’s planners at Schnarr that the estimated developable acreage at the Property was much less than 30 acres. The new estimate was 18.9 acres. Mr. Jain testified that he directed Mr. Sandhu to advise Rosseau thereof. Mr. Mady testified that Mr. Bagnell was in touch with him in February or March 2017 and advised him that there was a reduction in the developable acreage at the Property.

[77] I find that Rosseau knew about the new estimate of 18.9 developable acres by February 11, 2017. That is the date that Rosseau entered into an assignment agreement with 1371975 Ontario Inc. (a company that Mr. Mady and Mr. Bagnell described as being managed by a man named Joseph Cohen). That assignment agreement set out the price of the assignment as $8,977,500 based on the same 18.9 “net developable acres” that had been estimated for 252 by Schnarr. The assignment agreement set out a price of $475,000 per developable acre (at Schedules A and B). Rosseau did not advise 252 of its assignment of the APS to Mr. Cohen’s corporation.

[78] Mr. Bagnell, Mr. Sandhu, and Mr. Jain testified that a meeting was held between the three of them at Mr. Jain’s office in February 2017. Mr. Sandhu arranged the meeting because as set out above, Schnarr had calculated a new estimate for the net developable acres of the Property. In the new estimate the Property contained only 18.9 developable acres not 30 developable acres. As a result, the purchase price under the APS had to be amended.

[79] Mr. Jain testified that 252 was still prepared to sell the Property at $350,000 per net developable acre and was also prepared to grant a vendor take back mortgage for one half of the purchase price, at zero interest, pending the determination of the net developable acreage for the Property. The new purchase price was calculated at 18.9 acres x $350,000 for a total of $6,615,000.

[80] Mr. Bagnell and Mr. Jain both testified that at the February 2017 meeting, Mr. Jain raised the issue of the BMO Mortgage registered against the Property. Mr. Jain wanted Rosseau to assume the mortgage, so that 252 could avoid incurring a $200,000 penalty for its early discharge. Mr. Jain testified, that at the meeting he did not know the penalty amount other than that it would be substantial. Mr. Sandhu testified that Mr. Jain gave him the amount of the penalty. BMO would have to approve the assumption of the mortgage by Rosseau.

[81] There is consensus that Mr. Jain, Mr. Sandhu, and Mr. Bagnell did not discuss the deletion of the $400,000 deposit at their February 2017 meeting.

[82] Mr. Bagnell and Mr. Mady both testified that after the meeting, Mr. Bagnell approached Mr. Mady and told him of the change in the estimated net developable acres from 30 to 18.9 acres and of 252’s request for Rosseau to assume the BMO Mortgage. Mr. Bagnell and Mr. Mady testified that Rosseau was prepared to proceed with the purchase of the Property at 18.9 acres based on a $350,000 per developable acre price.

[83] Mr. Mady testified that Rosseau agreed to assume the BMO Mortgage and understood that it was responsible for the $200,000 penalty. Mr. Mady testified that if Rosseau was to assume the mortgage, he wanted something in return: “252 has no problem bettering the Agreement for themselves so it is only fair we get a benefit ourselves.” He suggested that the parties delete the requirement to pay the $400,000 second deposit to better the APS for Rosseau in its amended version. Mr. Mady was prepared for Rosseau to pay the $200,000 penalty under the BMO Mortgage and thought that the deletion of the requirement to pay the $400,000 deposit on the waiving of conditions was a fair trade.

[84] Mr. Mady testified that he viewed the assumption of the BMO Mortgage as a penalty because he would have to discharge it early to obtain construction financing as part of the development of the Property.

[85] Mr. Bagnell testified that he obtained instructions from Mr. Mady to agree to the new purchase price of $6,615,000 and to assume the BMO Mortgage on the basis that the requirement of Rosseau to pay the $400,000 deposit would be deleted.

[86] What happened next is disputed by the parties. Mr. Bagnall testified that he called Mr. Sandhu and explained his instructions that Rosseau would only assume the BMO Mortgage if the requirement for the further $400,000 deposit on the waiver of conditions would be deleted. Mr. Bagnall testified that he told Mr. Sandhu that he had met with Rosseau and that everything was acceptable except the $400,000; these monies would not be due on the waiver because Rosseau was assuming the first mortgage. Mr. Sandhu responded that he would inform Mr. Jain.

[87] In his examination in-chief, Mr. Sandhu said the requirement for the $400,000 deposit never changed. It was to be paid. He said he forgot to mention the $400,000 in the amended APS. He was supposed to mention it and forgot. He said he was supposed to delete it from the balance due on closing. He said he made a mistake.

[88] In cross-examination, Mr. Sandhu agreed that after the February 2017 meeting, Mr. Bagnell told him that Rosseau was prepared to assume the BMO Mortgage. He was asked if Mr. Bagnall told him Rosseau was agreeable to assume the mortgage but did not want to pay the $400,000 on waiving the conditions. He said he did not recall that conversation; he then denied having had that conversation. He said that if the discussion had happened, it would have been reflected in the amended APS. He was then taken through the terms of the amended APS. He agreed that if Rosseau paid the $1,790,000 on closing, the $50,000 deposit already paid, assumed the mortgage of $1,666,000 and had a vendor take back mortgage of $3,115,000, all as set out in the amended APS, Rosseau would have paid the full purchase price. He was asked if the full purchase price is accounted for on closing, is it clear there was no further requirement by Rosseau to pay the $400,000? He said he forgot to mention it. He said “that is what I am saying. I forgot to mention this one.” He said he remembers asking for the $400,000 and asked rhetorically why he would ask for the monies if they were not going to be paid. He said he made a mistake. Mr. Sandhu said if the $400,000 was not required, why wasn’t it specifically deleted in the amended APS. He agreed that if Rosseau had paid $1,790,000 on closing and the $400,000 on waiving the conditions, Rosseau would have paid too much.

[89] Mr. Sandhu agreed, both in examination in-chief and in cross-examination, that the numbers in the amended APS added up to the stated purchase price. In-chief, counsel for the Defendant asked: “And there is no reference to the $400,000 deposit or how that will be adjusted. Do you recall whether or not you intended [it to be] adjusted?,” to which Mr. Sandhu responded, “if just given the total amount of the balance if this comes to … the numbers add up to the purchase price.” In cross-examination, Mr. Sandhu agreed the numbers in the amended APS added up to the purchase price.

[90] Mr. Jain testified that he expected Rosseau to still pay the $400,000.

[91] After the alleged call from Mr. Bagnell, Mr. Sandhu sent an email to Mr. Bagnell on March 1, 2017, confirming the terms for the amended agreement. The email is reproduced in full as follows:

Hi Wesley,

Below are the terms for the completion of transaction

Adjust the price for now @ 18.9 x 350000 = 6,615,000
Buyer will Pay 1.84 million to vendor and assume 1^st mortgage of 1.66 million from BMO bearing interest of 2.49% for 5 yr term or the time till net developable acres got established (whichever is earlier) as vendor is avoiding to pay off due to penalty of 200k now. (Vendor will assume the penalty at the end of the term as it will be lower at that time)
Vendor will take back mortgage at first position for the amount of 3,115,000 bearing 0% interest till the net develop-able acres got established.
Once the net developable acres get established buyer will pay the vendor amount of VTD plus/minus the value for more/less developable acres established.
If the net developable acres comes out less than 18.9 acres, the amount of per acre @ $350000 will be deducted from VTB and vendor will get rest of the amount.

For example:

If net net developable acres come to 23 acres then buyer will pay as below:

3,115,000 million plus 1,435,000 million (4.1 acre x 350000) total 4.55 million if net net developable acres comes to 18 acres then buyer will pay as below:

3,115,000 million minus 315000 (.9 acre x 350000) total 2.7 million

Thanx & Rgds

Sukhpreet Sandhu

[92] On March 8, 2017, Mr. Sandhu prepared an Amendment to the APS. The Amendment deleted certain paragraphs of the APS and inserted the following:

INSERT;

The new Purchase Price shall be $6,615,000 (Six Million Six Hundred and Fifteen Thousand Dollars) based 45.71 acres of which approximately 18.9 are natural net developable acres by area statistics data supplied by Glen Schnarr & Associates Inc. The Buyer and Seller agreed that the final natural net Developable Acres may vary when final studies are completed and confirmed by both and the Toronto and Region Conservation Authority (TRCA) and Town of Caledon and designated for Residential Development allowing Townhouses, semi-Detached and Singles Homes, and that the final price shall be adjusted accordingly based on more or less at $350,000 Dollars per Natural net developable acre.

The Buyer will pay to the Seller on the date set for closing the sum of $1,790,000 (One Million Seven Hundred Ninety Thousand CAD Dollars) plus the Deposit of $50,000 to be credited on closing totaling $1,840,000 dollars.

The Buyer also agrees to assume, subject to approval a First Mortgage of approximately $1,660,000.00 (One Million Six Hundred Sixty Thousand CAD Dollars) from the Bank of Montreal bearing interest of 2.49% for a 5 year term or until Natural Net Developable acres are established. The Buyer at his sole option shall have the right to assume the said First Mortgage for the duration of the full term.

The Seller agrees to take back a Mortgage at Second position for the amount of $3,115,000.00 (Three Million One Hundred and Fifty Thousand Dollars) bearing 0% interest until the time Natural Net Developable acres are established.

Upon the establishment of natural Net Developable acres the Second Mortgage shall be discharged by Buyer and shall pay the Seller the sum of $3,115,000.00 Dollar CAD plus or minus the Natural Net Developable Acres that are established, payment shall be within 30 days from the date set.

DATE SET FOR CLOSING

In the event that Natural Net Developable Acres is not established on the date set for closing on page 7 of the Agreement of Purchase and Sale, then the date shall be extended for a further 30 days, if after the 30 period Natural Net Developable is not established then the closing date shall be 15 days after that date. If the land Registry is closed on the 15th day aforesaid, then the day of closing shall be on the day that the Land Registry Office is open for business, further The Title Search shall be at least one (1) week prior to the Completion date.

The Buyer shall diligently move forward to minimize DD period

d. The Amendment APS

[93] During his testimony, Mr. Sandhu admitted that the terms of the Amendment APS were accurate. He admitted that the new purchase price of the Agreement was based on a calculation of 18.9 developable acres x $350,000 per acre. Mr. Sandhu agreed Rosseau was to pay $1,840,000 in cash on closing (including the $50,000 deposit), assume the BMO Mortgage of approximately $1.66 million and receive a vendor take back mortgage of $3,115,000 bearing zero interest.

[94] Mr. Sandhu testified that he forgot to mention the $400,000 deposit in the amended APS. He acknowledged the amended APS does not say that the $400,000 is to be paid as a second deposit.

[95] Mr. Sandhu admitted that if the $400,000 deposit was paid by Rosseau when it waived the conditions, the stipulated $1,790,000 in cash due on closing was too much given the purchase price and the other terms of the amended APS.

[96] Mr. Mady testified that he did not think that payment of the $400,000 deposit was required on waiving the conditions based on the negotiations and Rosseau’s willingness to assume the BMO mortgage. Mr. Mady stated that he did not notice that the $400,000 deposit requirement was not deleted in the amended APS because he was focused on the Insert section which confirmed the calculation of the Purchase Price.

[97] Mr. Jain agreed that the cash to be paid on closing, the assumption of the BMO mortgage, and the vendor take back mortgage added up to the new purchase price of $6,615,000. He admitted the amount of cash to be paid by Rosseau on closing could not be varied. He also admitted that Rosseau was not required to make a payment to BMO on closing but only to assume the mortgage. If an adjustment was necessary, he agreed, it would take place on closing. Mr. Jain admitted that the amount of the BMO Mortgage, or any adjustment to it, had nothing to do with the payment of the $400,000 deposit.

III. Application of Facts to the Law

[98] The only material fact in dispute is whether Mr. Bagnall told Mr. Sandhu that Rosseau would assume the BMO mortgage and that in return the further $400,000 deposit would not be payable. I find as a fact that this was communicated by Mr. Bagnell to Mr. Sandhu during the telephone call Mr. Bagnell testified that he had with Mr. Sandhu. Mr. Mady’s and Mr. Bagnell’s evidence was clear and unequivocal on this point.

[99] After the February 2017 meeting of Mr. Jain, Mr. Sandhu and Mr. Bagnell, Mr. Bagnell spoke to Mr. Mady. Mr. Mady testified as follows concerning 252’s request that Rosseau assume the mortgage:

That’s when Wes said to us that an amendment should be drafted: A) to recognize that the net developable is now 18.9 acres and B) that we will assume that mortgage that means we are responsible for that pay out. My comment to Wes was they have no problem bettering the Agreement for themselves so its only fair we get a benefit ourselves. I suggest we delete the need for $400,000 and that betters the Agreement for us. We agreed to pay their $200,000 payout I thought that as a fair transaction. [I gave those] instructions [to Wes] and I knew he would get back to me.

[100] This evidence was not challenged in any meaningful way.

[101] Mr. Bagnell’s evidence was clear. He testified to receiving these instructions from Mr. Mady and to communicating this to Mr. Sandhu.

[102] Mr. Sandhu’s evidence on whether this conversation took place is not at all clear. At first, he said he didn’t recall. Then he said it didn’t happen. Then he said he forgot the $400,000 when drafting the amended APS and then said he made a mistake. He did not have a clear, independent recollection of whether he discussed the $400,000 deposit with Mr. Bagnell. He could only offer an inference of the events from the words of the amended APS.

[103] I find as a fact that the conversation between Mr. Bagnell and Mr. Sandhu did occur as Mr. Bagnell described about the $400,000 and it not being payable on the waiver of conditions. In my view, this finding is consistent with my findings below, that based on the proper interpretation of the APS and amended APS, the $400,000 was not payable.

[104] Mr. Jain’s evidence that he expected the $400,000 to be paid on the waiver of the conditions was not reasonable based on the wording of the amended APS as I have interpreted it. Further, Mr. Jain’s subjective interpretation is not relevant to the Court’s interpretation of the APS and amended APS. It is the objective intention of the parties that is relevant (Starroll, para. 20).

[105] I have read the APS and the amended APS as a whole, given the words used their ordinary and grammatical meaning, and considered the surrounding circumstances known to the parties at the time of the formation of the APS and amended APS; and viewed as a whole, I find that Rousseau was not required to pay a $400,000 further deposit when Rousseau waived the conditions in the APS and amended APS.

[106] The full purchase price under the amended APS was $6,615,000. The amount due on closing was $1,790,000 plus the deposit of $50,000 which was paid when the APS was executed for a total of $1,840,000. Rosseau was to assume the BMO Mortgage in the amount of $1,660,000. 252 agreed to take a vendor take back mortgage in the amount of $3,115,000. The totals are as follows:

$1,790,000

Due on closing

$50,000

Deposit, paid when APS signed

$1,660,000

Mortgage assumed

$3,115,000

Vendor take back

$6,615,000

Total stated purchase price

[107] There is no provision for a $400,000 deposit in the amended APS. There is no provision for it to be paid and be reduced from the amount payable on closing. Any adjustment to reflect a variation in the net developable land was to be adjusted from the vendor take back mortgage.

[108] There did not have to be an explicit deletion of the $400,000 deposit in the amended APS as it is clear by the terms of the amended APS that it was no longer payable. Otherwise, if Rousseau paid the $400,000 and the closing amount, Rosseau would have overpaid by $400,000.

[109] Further, the second paragraph of the “INSERT” portion referred only to the $50,000 deposit paid when the APS was signed to be credited on closing and there was no reference to the $400,000.

[110] I specifically find on the evidence that as a matter of fact Rosseau formed an intention that the $400,000 deposit would not be required to be paid, and did communicate this to 252 by Mr. Bagnell speaking to Mr. Sandhu. This was done before the amended APS was executed.

[111] 252 argued that the parties intended for the $400,00 to be credited to the purchase price and that there was no “practical difficulty” with the payment of the second deposit and the amended APS. In my view, there was a practical difficulty with the $400,000 deposit and the amended APS co-existing. The amount due on closing would be incorrect if the $400,000 was already paid and there is no mechanism in the amended APS to change the amount due on closing. All witnesses agree that when the amounts in the amended APS were added together it totalled the purchase price. Mr. Jain acknowledged in his evidence that there was no language in the amended APS by which to reduce the amount Rosseau was to pay on closing.

[112] The deletion of the $400,000 further deposit requirement is supported by the context of the negotiation. Deleting the deposit was consistent with Rosseau assuming the BMO Mortgage.

[113] 252 argued that Mr. Jain, Mr. Sandhu, and Mr. Bagnell did not discuss the deletion of the $400,000 deposit at their February 2017 meeting. This is accurate; however, this ignores the timeline of events. 252 proposed at the meeting that Rosseau assume the BMO Mortgage. Mr. Mady testified that once he learned that 252 wanted Rosseau to assume the mortgage and the penalty, he wanted something in return. The $400,000 deposit was not discussed at the meeting because Mr. Mady raised it after the meeting in his discussion with Mr. Bagnell, in response to 252’s request for Rosseau to assume the BMO mortgage. Mr. Bagnall communicated this to Mr. Sandhu.

ISSUE 2 - Was the Plaintiff purchaser ready, willing, and able to close the APS and amended APS on September 19, 2017?

I. The Law

[114] The answer to this question involves a consideration of two legal concepts: anticipatory breach and whether an anticipatory breach relieves the other party from obligations under an agreement to tender. 252’s position also involves a consideration of the “group enterprise theory.”

[115] As set out in Nutzenberger v. Mert, 2021 ONSC 36, at para. 5, an anticipatory breach occurs where one party to a contract repudiates the contract before performance is due. The anticipatory breach or repudiation may be express or implicit, communicated by words or conduct of the defaulting party, that the defaulting party may not or cannot perform the terms of the contract.

[116] The Ontario Court of Appeal described anticipatory breach in Spirent Communications of Ottawa Limited v. Quake Technologies (Canada) Inc., 2008 ONCA 92, 88 O.R. (3d) 721, at para. 37:

[37] I would add this. When considering Spirent's conduct, it was important to keep in mind that what was involved was an anticipatory breach of contract. An anticipatory breach sufficient to justify the termination of a contract occurs when one party, whether by express language or conduct, repudiates the contract or evinces an intention not to be bound by the contract before performance is due. See Pompeani v. Bonik Inc. (1997), 1997 3653 (ON CA), 35 O.R. (3d) 417, [1997] O.J. No. 4174 (C.A.). To assess whether the party in breach has evinced such an intention, the court is to ask whether a reasonable person would conclude that the breaching party no longer intends to be bound by it. See McCallum v. Zivojinovic (1977), 1977 1151 (ON CA), 16 O.R. (2d) 721, [1977] O.J. No. 2341 (C.A.). Having said that, when determining whether such an intention has been evinced, the courts rely on much the same analysis as they do in respect of claims of fundamental breach. That is, in determining whether the party in breach had repudiated or shown an intention not to be bound by the contract before performance is due, the court asks whether the breach deprives the innocent party of substantially the whole benefit of the contract.

[117] The rights conferred on an innocent party where there is an anticipatory breach were described by the Ontario Court of Appeal in Place Concorde at para. 50:

[50] Thus, a repudiatory breach does not automatically bring an end to a contract. Rather, it confers a right upon the innocent party to elect to treat the contract at an end thereby relieving the parties from further performance. As a general rule, the innocent party must make an election and communicate it to the repudiating party within a reasonable time: see Chapman v. Ginter 1968 72 (SCC), [1968] S.C.R. 560 at 568. However, in some cases the election to treat the contract at an end will be found to have been sufficiently communicated by the innocent party’s conduct: John D. McCamus, The Law of Contracts, (Toronto: Irwin Law Inc., 2005) at pp. 641-42.

[118] If an innocent party rejects a repudiation of an agreement, they must show that they are ready, willing, and able to compute a transaction on the closing date. The leading case for this principle is the Ontario Court of Appeal’s decision in Domicile.

[119] The facts in Domicile were set out under the heading “The Facts” as follows:

On February 1, 1995, MacTavish and Domicile signed an agreement of purchase and sale by which MacTavish agreed to buy a semi-detached house in Ottawa to be built by Domicile. The purchase price was $450,000. The agreement called for a $5,000 deposit on execution of the agreement and a further $15,000 deposit on notice that a building permit had been obtained. MacTavish was to obtain vacant possession on the closing date, September 15, 1995. If the house was substantially completed on September 15, 1995, MacTavish was obliged to complete the transaction. The agreement provided that the house was deemed to be substantially completed when a municipal occupancy permit was issued. Typically, and importantly in this case, the agreement stated that "time shall in all respects be of the essence hereof.

MacTavish paid the $5,000 deposit when he signed the agreement. However, two and one-half months later, on April 13, 1995, he repudiated the agreement. His lawyer wrote Domicile that "our client has no intention of proceeding with the purchase of the property" and asked for the return of the $5,000 deposit. Domicile chose not to accept MacTavish's anticipatory repudiation. Instead its lawyer wrote that the deposit would not be returned and that "Domicile remains ready, willing and able to perform its side of the bargain."

On July 7, 1995, Domicile obtained a building permit for the house. On July 19, 1995, Domicile's lawyer wrote MacTavish's lawyer reiterating that Domicile did not accept MacTavish's anticipatory repudiation of the agreement, that Domicile considered the agreement in force and that it would "pursue the remedies available to it under these circumstances." The letter also notified MacTavish of the building permit and asked for the further $15,000 deposit required by the agreement. MacTavish did not pay this deposit.

On August 15, 1995, Domicile's lawyer wrote another letter to MacTavish's lawyer, again saying that Domicile did not accept the repudiation and that it considered the agreement to still be in effect. On the same day Domicile issued a statement of claim, seeking specific performance of the agreement or alternatively, damages. The trial judge found that "Domicile did not accept MacTavish's repudiation, but elected to keep the contract alive and proceed with the construction which commenced on July 15, 1995, after approvals were obtained from the city."

However, on the closing date, September 15, 1995, Domicile had not substantially completed the house. Therefore neither party tendered on the closing date. MacTavish did not intend to close and Domicile had not finished the house. Indeed the house was not substantially completed until May 1996. At no point did Domicile give MacTavish notice of a new closing date.

Meanwhile housing prices in Ottawa declined in late 1995 and early 1996. On February 21, 1996, Domicile agreed to sell the house to one of its shareholders for $365,000-$85,000 less than the price MacTavish had agreed to pay. A municipal occupancy permit for the house was issued in early May. Thus, as the trial judge found: "the house was not completed and ready for occupancy until May 3, 1996." Domicile closed the transaction with its shareholder that day.

At trial Domicile sought damages. The trial judge awarded Domicile damages of $97,975.88, representing the difference in the sale price less the $5,000 deposit ($80,000) and Domicile's cost of carrying the house between September 15, 1995 and May 3, 1996 ($17,975.88). MacTavish appeals against the finding of liability and raises several grounds of appeal against the award of damages. I will deal only with liability because in my view the trial judge erred in finding MacTavish liable.

[120] The analysis in Domicile is set out under the heading “Discussion” as follows:

In April 1995, MacTavish stated that he did not intend to close the transaction. His conduct amounted to an anticipatory repudiation of the agreement. On being notified of MacTavish's anticipatory repudiation, Domicile, the innocent party, had a choice: it could "accept" or reject the repudiation. Had Domicile "accepted" the repudiation it would have been discharged from closing the transaction and could have sued for damages for breach of contract. [See Note 1 at end of document] Domicile, however, rejected the repudiation and therefore the agreement remained in effect. Because of the view I take of this case, I need not consider the difficult and important question whether in April 1995 Domicile should have taken reasonable steps to reduce its losses, instead of ignoring the repudiation and waiting for the closing date. [See Note 2 at end of document]

Because Domicile's rejection of MacTavish's anticipatory repudiation kept the agreement alive, time remained of the essence. A time is of the essence provision means that on the closing date an innocent party may treat the contract as ended and sue the defaulting party for damages or it may keep the contract alive and sue for specific performance or damages. [See Note 3 at end of document] In order to take advantage of a time of the essence provision the innocent party must itself be "ready, desirous, prompt and eager" to carry out the agreement. [See Note 4 at end of document] Domicile could not satisfy this requirement on the closing date. Because it had not yet substantially completed construction of the house it could not carry out the agreement. Equally MacTavish could not rely on the time of the essence provision to end the agreement. A time of the essence provision can be raised as a defence only by a party who is ready, willing and able to close on the agreed date and MacTavish was not ready, willing and able to close on September 15, 1995. [See Note 5 at end of document]

Therefore, on the closing date neither Domicile nor MacTavish was entitled to enforce or end the agreement. A similar situation arose in King v. Urban & Country Transport Ltd. (1974), 1973 740 (ON CA), 1 O.R. (2d) 449, 40 D.L.R. (3d) 641, a decision of this court relied on by Binks J. In King v. Urban, the purchaser was not in a position to close on the closing date; but the vendor was also in default and not entitled to rely on the time of the essence provision in the contract. Arnup J.A. resolved the stalemate by applying two propositions (at pp. 454-56):

When time is of the essence and neither party is ready to close on the agreed date the agreement remains in effect.
Either party may reinstate time of the essence by setting a new date for closing and providing reasonable notice to the other party.

An important corollary of Arnup J.A.'s second proposition is that a party who is not ready to close on the agreed date and who subsequently terminates the transaction without having set a new closing date and without having reinstated time of the essence will itself breach or repudiate the agreement. [See Note 6 at end of document]

The corollary applies to the facts of this case. Domicile did not give MacTavish reasonable notice of a new closing date. Instead it unilaterally ended the agreement by selling to a third party and seeking damages from MacTavish. Because it did not reinstate time of the essence by setting a new closing date, Domicile was not entitled to end its agreement with MacTavish. Therefore, in failing to give MacTavish an opportunity to close the transaction after September 15, Domicile itself breached the agreement. Because of Domicile's breach, MacTavish could no longer be held liable. The trial judge came to the opposite conclusion because he did not consider the effect of Domicile's inability to close on September 15. As a consequence, he did not consider Domicile's obligation to set a new closing date on reasonable notice to reinstate time of the essence.

Domicile's conduct is similar to the conduct of the vendor in Kwon v. Cooper, [See Note 7 at end of document] another decision of this court dealing with a real estate transaction in which time was of the essence. In Kwon the purchaser was not ready to close on the closing date. The vendor, in a letter delivered the day before closing, said that he would rely on the terms of the contract requiring closing the following day. When the agreement did not close the vendor sued for damages. However, this court held that on the closing date, the vendor also was not ready, willing and able to close because he did not have a discharge of the existing first mortgage or the guarantee required by the agreement of purchase and sale. The vendor, therefore, could not rely on King v. Urban and his action for damages failed.

Similarly, Domicile's action must fail. Having decided to keep the agreement alive and then having been unable to carry out its part of the bargain on closing, Domicile could not continue to hold MacTavish liable without also giving MacTavish a further and reasonable opportunity to perform.

Requiring that time of the essence be reinstated by giving notice of a new closing date is sensible and produces a just result. This requirement also ensures that the cost of carrying the property will be properly allocated between the vendor and the purchaser. To be effective the new closing date must be reasonable. And, although a provision making time of the essence may be implied from the surrounding circumstances or from the conduct of the parties, to avoid any dispute the notice should state that time is of the essence for this new date. [See Note 8 at end of document]

I would allow the appeal and set aside the judgment of Binks J. In its place I would issue a judgment dismissing Domicile's action with costs and ordering it to return to MacTavish his $5,000 deposit together with accrued interest. MacTavish is also entitled to his costs of the appeal.

[121] The Court of Appeal in Domicile referred to its previous 1996 decision in Kwon. The Court of Appeal in Kwon faced a similar situation and came to the same determination.

[122] The Court of Appeal, in 1179 Hunt Club, followed its earlier decisions in Domicile and Kwon and dismissed the appeal of a vendor who had refused to accept the repudiation of a purchaser. The vendor in Hunt Club had insisted on completing the agreement on a closing date but could not itself close on that date.

[123] In Hunt Club the purchaser of a condominium unit had communicated that it did not intend to complete the agreement on the closing date but the vendor stated that it did not accept the repudiation and insisted that the contract be performed on the closing date. When the closing date arrived the vendor, through no apparent fault of its own, had a problem with the registration of its condominium plans at the Land Registry Office. The application judge had found, as a result, that the vendor could not have conveyed the condominium unit on the closing date.

[124] In Hunt Club Justice Lauwers agreed with the determination made by the application judge that the vendor’s inability to close on its own specified closing date brought the agreement to an end. He stated at para. 21 as follows:

Domicile Developments states that when time is of the essence and neither party is ready to close on the agreed date, the agreement remains in effect. By contrast, here the vendor not only refused to accept the repudiation but insisted that the transaction close on November 28, specifying the consequences if that did not occur, including the immediate pursuit of legal remedies. The application judge concluded that, in light of that insistence, because the vendor was not ready on November 28, the agreement came to an end.

[125] Justice Lauwers concluded at paras. 23 and 26 that the vendor, in insisting on closing on the closing date, needed to establish that it was ready to close on that closing date:

Having refused to accept the purchaser’s repudiation of the agreement, and having insisted on perfection in the purchaser’s performance, the vendor was required to render perfection in its own performance and it did not. The vendor’s failure to tender on November 28, 2017 was fatal This strict approach is not unusual in the law, in view of the maxim “he who seeks equity must do equity”, or in life, where the proverbial caution that “he who lives by the sword dies by the sword.” Both resonate.

xxx

In this case, the issue is not whether the vendor could have been ready to close on November 28, 2017, but that it was not ready to close on that date, a date on which it insisted. Hence the controversy was not material.

[126] These principles are also set out at paras. 60 - 66 of Spiridakis v. Li, 2020 ONSC 2173:

[60] The defendants concede that they failed to close the purchase of the plaintiffs’ home on October 30, 2017 as scheduled. But they assert that the plaintiffs failed to tender on them – to demonstrate that they were ready, able and willing to close the deal.

[61] Tendering is not a prerequisite to an entitlement to damages for breach of an agreement of purchase and sale. But where a plaintiff relies on a defendant’s failure to close as the breach giving rise to the entitlement of damages, the plaintiff must be able to demonstrate that he or she was ready, willing and able to close. Tendering is generally considered to be the best evidence of that readiness, willingness and ability.

[62] Having said that, the law is quite clear that an innocent party need not go through the meaningless exercise of tendering in circumstances of anticipatory breach.

[63] The phrase “anticipatory breach” was explained by Justice Cromwell in dissenting reasons in Potter v. New Brunswick Legal Aid Services Commission, 2015 SCC 10 at para. 149:

An anticipatory breach "occurs when one party manifests, through words or conduct, an intention not to perform or not to be bound by provisions of the agreement that require performance in the future": McCamus, at p. 689; see also A. Swan, with the assistance of J. Adamski, Canadian Contract Law (2nd ed. 2009), at s. 7.89. When the anticipated future non-observance relates to important terms of the contract or shows an intention not to be bound in the future, the anticipatory breach gives rise to anticipatory repudiation.

[64] As I noted above, the parties agreed that “time was of the essence” in relation to the performance of their respective obligations under the agreement of purchase and sale. In other words, they agreed that the time limit manifested by the fixed closing date was an essential term, such that the breach of it would permit the innocent party to terminate the agreement. When the defendants manifested an intention not to complete the transaction on October 30, 2017, the plaintiffs were released from any obligation to tender in order to prove that they were ready, willing and able to close. See Di Millo v. 2099232 Ontario Inc., 2018 ONCA 1051, at paras. 31 and 49.

[65] In this case there is a factual dispute about whether the plaintiffs in fact tendered. It does not matter. The defendants’ lawyer undeniably communicated to the plaintiffs’ lawyer that the defendants were not in a position to close on the scheduled closing date. The plaintiffs’ lawyer correctly identified that communication as an anticipatory breach. The plaintiffs were relieved of any obligation to tender in order to establish that they were ready, willing and able to close.

[66] I conclude that the “tender issue” does not require a trial to resolve. The plaintiffs were not required to tender.

[127] The issue of tender in circumstances where one party has repudiated the agreement is set out by the Ontario Court of Appeal at para. 45 of Pompeani:

45 I think that, taken cumulatively, Bonik's actions in abandoning the plan made part of the agreement, securing the registration of the new plan, ignoring correspondence from Pompeani's solicitor for over a year before the date of closing, demanding the profits from the flip in return for closing and failing to submit a draft deed or statement of adjustments would lead a reasonable purchaser to believe that the vendor would not honour its obligations under the agreement. Accordingly, I think that Bonik impliedly repudiated the agreement before the date of closing, thus relieving Pompeani of his obligations under the agreement and entitling him to damages. I do not think that in the circumstances Pompeani was obligated to tender.

[128] This is also stated at para. 49 of Di Millo:

[49] Thus, when a party by words or conduct communicates a decision not to proceed to closing, the other party is released from any obligation to tender in order to prove he was ready, willing and able to close: see Kirby v. Cameron, 1961 203 (ON CA), [1961] O.R. 757 (C.A.); Kloepfer Wholesale Hardware v. Roy, 1952 8 (SCC), [1952] 2 S.C.R. 465.

[129] A similar statement was set out at para. 104 of Silverberg:

[104] Mr. Simaan does not rely on the “time of the essence” clause in the agreement of purchase and sale and does not suggest that the Purchaser’s failure to make formal tender on that date is a bar to specific performance. There is good reason why he takes this position, as it is settled law that a party may not rely on time of the essence where (a) the party itself was not ready, willing and able to close on the agreed date; or (b) the party has itself been the cause of the delay; or (c) the party has waived its right to rescind. As Mr. Justice McKay, giving the judgment of the Court of Appeal in Shaw v. Holmes, (1952), 1952 285 (ON CA), 2 D.L.R. 330 (Ont. C.A.) said at 334 :

Time may be insisted upon as of the essence of the agreement by a litigant, (a) who has shown himself ready, desirous, prompt and eager to carry out his agreement: Mills v. Haywood (1877), 6 Ch. D. 196; (b) who has not been himself the cause of the delay or in default; Snell v. Brickles (1914), 1914 561 (SCC), 20 D.L.R. 209, 49 S.C.R. 360; rev’d. 1916 417 (UK JCPC), 30 D.L.R. 31, [1916] 2 A.C. 599; and (c) who has not subsequently recognized the agreement as still subsisting; he must not play fast and loose at his pleasure: Springer v. Gray (1859), 7 Gr. 276; Cudney v. Gives (1890), 20 O.R. 500; Labelle v. O’Connor (1908), 15 O.L.R. 519, and Harris v. Robinson (1892), 1892 14 (SCC), 21 S.C.R. 390.

[130] In response to Rosseau’s position that it was ready to close with money from other corporations, 252 relies on the “corporate separateness principle.” The Court of Appeal for Ontario addressed this in Chevron. 252 specifically referenced paras. 68, 76 and 77:

[68] The Supreme Court of Canada has protected the principle of corporate separateness without suggesting a stand-alone just and equitable exception. In Sun Indalex Finance, LLC v. United Steelworkers, [2013] 1 S.C.R. 271, [2013] S.C.J. No. 6, 2013 SCC 6, at para. 238, Cromwell J. rejected the submission that a subsidiary should be liable for a breach of fiduciary duty committed by its parent corporation, holding that "unless there is a legal basis for ignoring the separate corporate personality of separate entities, those separate corporate existences must be respected". See, also, Continental Bank Leasing Corp. v. Canada, 1998 794 (SCC), [1998] 2 S.C.R. 298, [1998] S.C.J. No. 63, at paras. 108-12.

[76] Not only is such an argument problematic from a policy standpoint, it comes dangerously close to the adoption of the group enterprise theory of liability. That theory holds that where several corporations operate closely as part of the same "group" of corporations, they are in reality a single enterprise and should, accordingly, be responsible for each other's debts. It has been consistently rejected by our courts: Meditrust Healthcare Inc. v. Shoppers Drug Mart (2002), 2002 41710 (ON CA), 61 O.R. (3d) 786, [2002] O.J. No. 3891 (C.A.), at paras. 30-31; and Fairview Donut Inc. v. The TDL Group Corp., [2012] O.J. No. 834, 2012 ONSC 1252 (S.C.J.), at paras. 651-65, affd [2012] O.J. No. 5775, 2012 ONCA 867, 225 A.C.W.S. (3d) 31, leave to appeal to S.C.C. refused [2013] S.C.C.A. No. 47.⁴ It has also been rejected in England: see Adams v. Cape, [1990] 1 Ch. 433 (Eng. C.A.), at pp. 532 and 536-38.

[77] There is good reason for this rejection. There is a difference between economic reality and legal reality. The fact that on an operational level corporate separateness is more nuanced among a group of related corporations is of no moment. It is the legal reality, as provided for in the relevant business corporation statutes, that counts. The CBCA permits subsidiary corporations but also says that each corporation is a natural person. [page25 ]If Parliament wished to carve out an exception to the natural person rule for subsidiaries, it would have been very easy to do so.

II. The Evidence

a) Events after the amended APS

[131] Rosseau conducted its due diligence. Mr. Mady testified that in June 2017, he retained Mr. Quarcoopome at Weston Consulting to advise him of the planning status of the Property and other related issues.

[132] Mr. Mady testified that based on his own considerable real estate development experience, prior to waiving the conditions, he estimated the development costs for the Property; including how much money it would cost to service the land. Among other things, he took into consideration development charges and related costs. He estimated the revenue for the Property. Mr. Mady testified that he performed his own high-level analysis of profit. He testified that he has a lot of experience in doing this type of analysis. He said: “I estimate the cost. I estimate the revenue and come up with profit potential and I satisfy myself.”

[133] Mr. Mady also testified that he called Mr. Quarcoopome and ran the numbers he used in his high-level analysis by Mr. Quarcoopome since Mr. Quarcoopome is more current than Mr. Mady on the appropriate numbers. Mr. Mady obtained additional comfort from Mr. Quarcoopome concerning his analysis. Mr. Mady’s evidence on this point was corroborated by Mr. Quarcoopome.

[134] Mr. Mady testified that he was looking for a rate of a return of 20 per cent to 25 per cent for the development of the project to be viable.

[135] 252 takes the position that Rosseau started its due diligence in July 2017. Mr. Quarcoopome wrote to Mr. Bagnell and Rosseau by email on July 25, 2017, attaching a “concept plan that incorporates that development limit set on the Glen Schnarr plan.” He wrote to Mr. Bagnell and TRG by email on August 21, 2017, in which he attached consulting proposals “for the Mayfield site walk.” Mr. Quarcoopome wrote to TRCA, Mr. Bagnell, and Mr. Mady with several emails on September 11, 2017, regarding “our site walk tomorrow.” Mr. Quarcoopome stated that TRCA requested that an Ontario Land Surveyor be on site “to define the development limit.” Rosseau did not hire a surveyor and was using a survey firm’s GPS to stake the limit. Mr. Quarcoopome advised that TRCA stated that they will not “sign off on a development limit that has not been surveyed by an OLS.” He further stated in that email that “if you need an approved limit by TRCA as part of a land purchase, that is an additional step.” That additional step was not taken by Rosseau.

[136] I find as a fact that Rosseau started its due diligence in June 2017. It is not for 252 to say what Roseau is required to do to conduct its due diligence. As set out below Rosseau unequivocally waived the conditions.

[137] I accept the evidence of Mr. Mady that he conducted a high-level analysis of the profitability of the project before Rosseau waived the conditions on June 7, 2017. Mr. Mady testified that on all projects he analyzes the cost of land, and estimates the site services for storm, sanitary, and water. He testified as follows:

It was my own high-level analysis of profit. I have to determine if the project is profitable. I have a lot of experience in doing this. I estimate the cost. I estimate the revenue and I would come up with profit potential and I satisfied myself. Additionally, I called Martin and I run it by him since he is more current than I am. He has the latest data and access to [information]. I get an additional comfort from him and then nothing happens after that.

[138] Mr. Mady testified that during the due diligence period he conducted a “high level” economic feasibility projection that he ran by Mr. Quarcoopome. Mr. Mady testified:

Q. Let’s be clear, it was not what would you do but what did you do on this project?

A. I sat down and made notes of what all the costs would be. I write down land cost estimates. What is then is I [calculate] how much money it would costs to service. I take into consideration development charges from municipality and from the region and all the building permit costs, what am I going to pay my surveyor, my lawyer, high level estimated costs for every dollar you would spend to get the project developed and ready to sell and then I came up with X dollars then you estimate what your revenue would be and fit here is a profit then you are good.

Q. What did you do?

A. I did exactly that.

Q. Did you keep it?

A. I don’t have them now. I literally do them with pad and pen then run them by planner. If he says “yes you are good to go” then when it comes to financing, I send them to my [financial guy] and he would put in it in a format for the investors and the bankers. For me, its literally one page.

b) Waiver of Conditions

[139] On June 7, 2017, Rosseau waived the conditions under the APS and amended APS. Rosseau took the position that the APS and amended APS were firm and binding. Rosseau’s lawyer, Chris Haber stated: “My clients intend to proceed with the deal in accordance with the terms contained therein.”

[140] On June 13, 2017, Mr. Mangat, on behalf of 252, wrote to Mr. Haber. In his letter, Mr. Mangat, inter alia, stated that: “My client treats this Agreement as null and void.” In this communication and in the July 4, 2017, communication referenced below, 252 took the position that the failure to pay the $400,000 by Rosseau constituted a repudiation of the APS.

[141] On June 15, 2017, Mr. Haber, responded to the Mr. Mangat’s June 13, 2017, letter and stated, inter alia, that the agreement was not null and void.

[142] On July 4, 2017, litigation counsel to 252, James MacDonald, wrote to Mr. Haber. Mr. MacDonald stated that the agreement is at an end. He advised that the $50,000 deposit under the agreement would be returned.

[143] On July 5, 2017, Mr. Mangat returned the $50,000 deposit to Mr. Haber. The certified cheque was dated June 28, 2017, and payable to Rosseau.

[144] On September 1, 2017, Mr. MacDonald emailed Mr. Haber and confirmed that: “His client's position remains as set out in his June 21, 2017 correspondence.”

[145] When 252 took the position that the APS and amended APS was at an end, Mr. Jain knew that the value of the Property had increased from January of 2017. He had received calls from agents or brokers interested in the Property. On April 8, 2017, he received an offer to purchase the Property from New World Petroleum for $11 million.

[146] On September 21, 2017, Mr. Jain received a Letter of Intent from Vandyk Group at $640,000 per developable acre.

[147] In September 2017, 252 also received an offer from the Rabinowicz Group to purchase the Property for $14 million.

c) The Closing:

[148] Mr. Haber wrote to Mr. MacDonald on August 3, 2017, stating that “since the net Development Acres has not been established the closing (August 5, 2017) is extended [by 30 days] to September 4, 2017.” Mr. Haber stated in that letter that Rosseau was “ready, willing and able to complete the purchase.”

[149] Rosseau commenced this action on August 18, 2017, claiming specific performance.

[150] On August 31, 2017, Mr. Haber further wrote to Mr. MacDonald and extended the closing date from September 4, 2017 to September 19, 2017.

[151] The parties agree that the Rosseau did not tender. Mr. Haber did not prepare or send any tender or closing documents. Mr. Mady testified that Mr. Haber advised him that tender was not necessary when the other party has repudiated the contract. Similarly, 252 did not prepare for closing.

[152] It is uncontroverted that Mr. Haber was not put in funds to complete the transaction on September 19, 2017. It is also uncontroverted that neither Mr. Haber nor Rosseau communicated with anyone that day in respect to the closing and no further closing date was set by Rosseau.

[153] 252 did not provide any contact information to Rosseau to facilitate Rosseau assuming the BMO mortgage. Mr. Mady and Mr. Mehlenbacher testified that because 252 stated it would not close the transaction in June 2017, Rosseau did not pursue the assignment.

d) Was Rosseau Ready, Willing and Able to Close the Transaction?

[154] Rosseau is affiliated with three other companies: The Condo Store Realty Inc., the Condo Store Marketing Systems Inc., and the Insider Condo Club Ltd. Mr. Mehlenbacher founded each of these companies and each carry-on business in the real estate industry:

a) The Condo Store Realty Inc. is a real estate broker. The company represents individual investors purchasing pre-construction condos as a block. The company sources new condo developments, negotiates deals with the developer to purchase the majority or all the units, and facilitates purchases for its investors. It earns commission on each sale;

b) The Condo Store Marketing Systems Inc. has been in business since 2007 and earns commissions on a transaction basis; and,

c) The Insider Condo Club Ltd. provides a membership-based service to realtors in the GTA. It pools resources to give its members access to pre-construction condos.

[155] Rosseau was incorporated to re-invest some of the returns generated by the Condo Store Realty Inc. Mr. Mehlenbacher stated that the affiliated companies use the Condo Store Realty Inc. as their bank account because it always has surplus revenue. It funds the other businesses through inter company loans.

[156] Mr. Mehlenbacher testified that typically Rosseau finances its own projects by creating a limited partnership comprised of its own investors who would finance 85 per cent of the investment needed with Rosseau contributing up to 15 per cent.

[157] Mr. Mehlenbacher also testified that Rosseau does not always create a limited partnership. In this case they did not create a limited partnership because they were told in June 2017, three months prior to the closing date, that 252 was refusing to close the transaction. Mr. Mehlenbacher testified: “At that stage we had funds to close ourselves. It is not good practice to go to investors with the project and have them move money or ensure the money available and then not be able to use it.” Mr. Mehlenbacher testified that he did not approach any investors in connection with the acquisition of the Property because he usually does so 45 days prior to closing.

[158] Mr. Mehlenbacher testified, in 2017, Rosseau had about 400 investors in its investor pool. When the Company began, investors typically invested $150,000 to $250,000 into the limited partnership for each project. Now investors typically invest in the $1,000,000 to $2,000,000 range. The Company targets a rate of return of 25 per cent but usually ends up around 20 per cent.

[159] Rosseau produced bank statements from its related companies’ accounts (collectively the “Accounts”). The statements show that on September 19, 2017, Rosseau had $1,942,311.91 available on deposit to pay the $1,790,000 due on closing. Mr. Mehlenbacher testified that the cash in the Accounts was available to Rosseau to fund the deposit and the cash due on closing. The source of the funds is primarily commission income which is received by the related companies throughout the year. Rosseau did not, itself, have sufficient funds to close on September 19, 2017. It had $195,567.38 in its two bank accounts. This amount is included in the $1,942,311.91 above.

[160] Mr. Mehlenbacher testified that the Rosseau related companies had funds on account to pay the cash due on closing date, on June 7, 2017, when it waived the conditions and on September 19, 2017. At closing, there was $1,942,311.91 in cash in the accounts. Mr. Mehlenbacher testified that intercompany loans between Rosseau and other companies are documented by ledger transfer. There are no written agreements concerning the transfer of money between the companies.

III Application of Facts to the Law

[161] I find as a fact that 252 repudiated the APS and amended APS in June of 2017 before the performance was due. This anticipatory breach or repudiation was express and communicated both by words and the conduct of 252. As I have found above, the further $400,000 deposit was not payable by Rosseau at the time of waiver of the conditions. 252 repudiated the contract when it said in writing, through its counsel, multiple times, that it considered the APS and amended APS at an end and returned the $50,000 deposit and 252 clearly expressed an intention not to be bound by the contract before performance was due. 252 had no intention of completing the APS. In June of 2017, it expressly said the APS and amended APS were at an end. 252 was in anticipatory breach of the APS.

[162] As set out in Place Concord, para. 50, a repudiatory breach does not automatically bring an end to a contract. I find as a fact that Rosseau confirmed the closing date of September 19, 2017. It elected to reject the anticipatory breach of the APS and amended APS by 252.

[163] I find that Rosseau was ready, desirous, prompt, and eager to carry out the APS and amended APS as required by Domicle, at the 2^nd paragraph under Discussion. 252 argues that Rosseau did not want to close the transaction because the net developable land was reduced from 30 acres to 8.27 acres. There are several problems with this argument: First, the reduction from 30 to 8.27 acres did not occur until after the closing date; second, this argument is not supported by the evidence.

[164] At para. 13 of 252’s written submissions, 252 states that Mr. Mady testified that he was “disappointed” when the developable acreage was reduced from 30 acres to 18.9 acres in February or March of 2017. Mr. Mady’s testimony was: “We were a little disappointed. But the Property was still very viable and I knew we had the price adjustment so it didn’t matter”. This was not an indication that Rosseau was not eager to close.

[165] At para. 38 of 252’s written submissions, 252 repeats that Mr. Mady was disappointed in the reduction from 30 to 18.9 in developable acres and adds that Mr. Mady in his testimony at trial agreed that he said he was shocked in an answer at his discovery. There are two problems with 252’s submissions in this regard. First, 252’s trial counsel did not impeach Mr. Mady on this point. He did not show him the discovery transcript and then ask Mr. Mady if he agreed or disagreed. Trial counsel asked, “you said you were shocked by this?” Mr. Mady’s answer was “we were surprised for sure.” Secondly, 252 has used this evidence to suggest that a further reduction from 18.9 acres to 8.28 acres must have caused Rosseau to rethink the viability of the project. This is pure conjecture and is inconsistent with the evidence.

[166] Both Mr. Mady and Mr. Mehlenbacher testified that Rosseau was still interested in the Property after the reductions in the net developable acres. Between April and June of 2017, 252 received at least three offers for the Property. Further, Mr. Jain testified that in 2017 he received calls from prospective purchasers interested in the Property.

[167] As set out above, 252 took the position that Rosseau did not start its due diligence until July of 2017. I have found otherwise. I have accepted the evidence of Mr. Mady that Rosseau did its due diligence.

[168] At para. 37 of 252’s written submissions, 252 states that Rosseau failed to produce an “extensive feasibility study” for the Property and shared it with Mr. Quarcoopome. 252 asks the Court to draw an adverse inference because this “extensive feasibility study” was never disclosed. I reject this argument. No one testified that an extensive feasibility study was completed for the Property.

[169] Mr. Mady testified that an extensive feasibility report would have been done later for investors but since the transaction did not close it was never prepared.

[170] Based on the above, in my view, the evidence shows that Rosseau wanted to close the transaction.

[171] In my view, the law did not require Rosseau to tender to demonstrate that it was ready, willing, and able to close the APS on September 19, 2017. This is set out in Pompeani and Silverberg. The Court of Appeal’s decision in Di Millo outlines the law governing the repudiation of a contract and how an innocent party may demonstrate that it was ready, willing, and able to close at paras. 43 - 63:

[43] The application judge also refused to accept the appellant’s statement that he was ready, willing and able to close. He found that it was nothing more than a “bald statement”, noting that there was “no evidence he had such funds”. He also commented on the appellant’s failure to prepare any closing documents.

[44] The appellant argues that the application judge erred in law by finding that he was required to tender where it was clear that tender of the purchase price would be futile. He also says he was, in fact, ready, willing and able to close.

[45] For a party to be entitled to specific performance, the party must show he or she is ready, willing and able to close: Time Development Group Inc. (In trust) v. Bitton, 2018 ONSC 4384, at para. 53; see also Norfolk v. Aikens (1989), 1989 245 (BC CA), 41 B.C.L.R. (2d) 145 (C.A.). While tender is the best evidence that a party is ready, willing and able to close, tender is not required from an innocent party enforcing his or her contractual rights when the other party has clearly repudiated the agreement or has made it clear that they have no intention of closing the deal: McCallum v. Zivojinovic (1977), 1977 1151 (ON CA), 16 O.R. (2d) 721 at p. 723 (C.A.); see also Dacon Const. Ltd. v. Karkoulis, 1964 252 (ON SC), [1964] 2 O.R. 139 (Ont. H.C.).

[46] In McCallum, at p. 723, this court explained that the renunciation of a contract may be express or implied:

The renunciation of a contract may be express or implied. A party to a contract may state before the time for performance that he will not, or cannot, perform his obligations. This is tantamount to an express renunciation. On the other hand a renunciation will be implied if the conduct of a party is such as to lead a reasonable person to the conclusion that he will not perform, or will not be able to perform, when the time for performance arises.

[47] The purchaser in McCallum made it clear that he did not intend to complete the transaction on the closing date and this renunciation relieved the vendors from the obligation to tender.

[48] The principles around the requirement to tender are summarized succinctly by Perell J. in Time Development Group, at paras. 56-57:

Tender … is not a prerequisite to the innocent party enforcing his or her contractual rights. Tender is not required from an innocent party when the other party has clearly repudiated the agreement. Numerous cases have held that the law does not require what would be a meaningless or futile gesture. Moreover, when there is an anticipatory breach, the innocent party need not wait to the date for performance before commencing proceedings for damages or in the alternative for specific performance of the agreement. [Citations omitted.]

[50] In my view, the appellant was relieved of the obligation to tender when the respondent clearly communicated a decision not to proceed with the transaction. On October 6, 2016, the appellant’s lawyer requested confirmation that the respondent would close failing which he would begin an action. The respondent’s reply was an invitation to commence the action. Further, in violation of the agreement, the respondent tried to resell the property without notice to or the consent of the appellant. Viewed reasonably and objectively, it was clear that the respondent was not going to close.

[51] In taking issue with the appellant’s failure to tender, the respondent relies on Pierce v. Empey, 1939 1 (SCC), [1939] S.C.R. 247, for the proposition that all terms of the option as to time must be strictly observed. In particular, the respondent refers to the following passage at p. 252:

It is well settled that a plaintiff invoking the aid of the court for the enforcement of an option for the sale of land must show that the terms of the option as to time and otherwise have been strictly observed. The owner incurs no obligation to sell unless the conditions precedent are fulfilled or, as the result of his conduct, the holder of the option is on some equitable ground relieved from the strict fulfilment of them. [Citations omitted.]

[52] The respondent says that Pierce v. Empey is still good law and that it should be applied in this case, where the appellant failed to take steps to close within the stipulated timeline.

[53] I agree that Pierce v. Empey is good law but note that it did not involve anticipatory repudiation and does not speak to a situation like the one before this court, where the respondent clearly communicated a decision not to proceed with the transaction.

[54] Thus, I am satisfied that the appellant was not required to tender, although he was required to demonstrate he was ready, willing and able to close to be entitled to specific performance.

[55] The application judge was not satisfied that the appellant was ready, willing and able to close. On that point, he said there was “no evidence” he had the funds to close. On my review of the record, he was incorrect.

[56] As the application judge noted, the appellant made the following statement in his affidavit: “I have always been ready, willing and able to pay the amount required to be paid under the option agreement.” This evidence is supported by two other pieces of evidence in the record.

[57] Counsel for the respondent asked the appellant on cross-examination:

Q. Paragraph 13. The first sentence – this is your Affidavit. “I have always been ready, willing and able to pay the amount required to be paid under the option agreement.” … It says in the Affidavit, 294,000. You don’t really have a specific recollection of that amount; am I correct?

[58] Shortly after, the appellant’s counsel, Mr. Conte, and the respondent’s counsel had the following exchange:

A. [I]f your question is, did he have that amount in the bank? He did.

Q. At what point did he have it in the bank?

A. For a long time. He’s had a lot of money in the bank for a long time. As you know, he took over the second – the first mortgage now – or the second mortgage now and he’s paid 500 … And he paid that from his savings.

[59] The fact the appellant purchased one of the mortgages for $500,000 was supported by the appellant’s June 26, 2017 supplementary affidavit. As noted above, the application judge overlooked the existence of the supplementary affidavit.

[60] The fact that the appellant had the $500,000 he used to purchase the mortgage in his savings “for a long time” is supported by Mr. Conte’s evidence on behalf of his client.

[61] While it would have been preferable if the appellant had personally answered the question, in light of the rules on examinations, the answer of counsel is deemed to be the answer of the appellant. Rule 31.08 provides:

Questions on an oral examination for discovery shall be answered by the person being examined but, where there is no objection, the question may be answered by his or her lawyer and the answer shall be deemed to be the answer of the person being examined unless, before the conclusion of the examination, the person repudiates, contradicts or qualifies the answer.

[62] There was no objection to Mr. Conte answering for the appellant and the appellant did not repudiate, contradict or qualify the answer. No further questions on the issue were put to him. The answer is deemed to be the appellant’s answer.

[63] In short, the application judge erred in finding that there was “no evidence” the appellant had the necessary funds to close. I am satisfied that the appellant was ready, willing and able to close. As to his failure to tender any documents, I have already explained why in the circumstances of this case it was unnecessary for the appellant to undertake the futile step of preparing any documents.

[172] 252 relies on Domicile to argue that Rosseau was not ready willing and able to close the transaction.

[173] Domicile holds that an innocent party who rejects the repudiation of a breach must be ready, willing, and able to close. However, when a vendor breaches an agreement of purchase and sale, an innocent purchaser is not required to tender to show it was ready, willing, and able to close. I accept Rosseau’s submissions that since Domicile, it is “settled law” that a repudiating party cannot insist time was of the essence when they themselves were not ready, willing, and able to close or caused the delay (see Silverberg at para. 104).

[174] Further, I agree that the facts in Domicile are distinguishable. In that case the builder rejected the purchaser’s breach and insisted on closing. However, on the closing date the builder could not deliver a substantially completed house, which was a condition of the sale. The builder could not complete a fundamental obligation under the agreement – he was not able to close the transaction. Rosseau, in contrast, was able to complete the transaction.

[175] 252 also relied on Hunt Club to argue Rosseau was not ready, willing, and able to close the transaction. In Hunt Club the vendor rejected the purchaser’s request for an extension on closing. However, on closing the vendor was not able to provide title to the purchaser due to an error with the condominium registration. As with Domicile, the case is distinguishable from the case before me as I have determined that Rosseau was able to close the transaction.

[176] Rosseau was ready, willing, and able to close the transaction. 252 had repudiated the contract. Unlike in Hunt Club or Domicile Rosseau did not breach any fundamental term of the Agreement.

[177] I find that the Plaintiff was ready, willing, and able to close the APS and amended APS. It was prepared to assume the BMO mortgage. It had the required funds to pay the balance due on closing. It was prepared to and did proceed to establish the net developable acres of the Property. I will deal with each of these in turn.

[178] I will deal first with the BMO mortgage. 252 takes the position that Rosseau did not have enough money to close the transaction on September 19, 2017, because Rosseau did not demonstrate it had funds to close the transaction without assuming the BMO mortgage.

[179] I find as a fact that Rosseau could have assumed the BMO mortgage. It was a sophisticated purchaser who, as Mr. Mehlenbacher testified, regularly took on loans to finance development projects. However, once 252 decided not to proceed with the sale, it provided no contact information to Rosseau for the mortgagee. As the Court held in Nutzenberger at para. 35:

It is not possible nor reasonable for one party to advise that they cannot close the APS and then do and say nothing until after closing, let the other innocent party do the best they can, not knowing what the defaulting purchaser is or is not going to do or knowing what documents or requisitions the defaulting purchaser wants on closing or does not/will not accept or wants amended….That cooperation is the good faith obligation each party owes to the other under the APS. While this case is not framed as a breach of good faith, actions or non-actions of the defaulting party are relevant to ascertain any alleged deficient tender (if a tender was made), whether the innocent party was ready, willing and able to close and , finally, what the fundamental reason the transaction did not close.

[180] 252 had an obligation to provide this information to Rosseau.

[181] I also find as a fact that Rosseau would have been able to acquire the additional funds of $1,790,000 due on closing. I accept Mr. Mehlenbacher’s evidence that Rosseau would have been able to acquire the funds:

Q. In 2017 September [if] the Rosseau Group was required [to tender] 1.79 million on closing could they have paid that… did they have the ability to pay the 1.79 million?

A. Yes it did.

Q. How would it have funded that it?

A. [We would have] taken money from the different accounts of the Rosseau Group and the Condo Store Realty Inc.

Q. It had never happened before?

A. There could be inter company loans from ICC to other entities but TCS was where we always had it. We always loaned through condo store even it was personal money, my line of credit we loan it from TCS.

[182] I accept the evidence from the bank statements provided by Rosseau that Rosseau and its related companies, on September 19, 2017, had $1, 942,311.91 available on deposit to pay the $1,790,000 due on closing. I accept Mr. Mehlenbacher’s evidence that cash in these collective accounts was available to Rosseau to fund the cash due on closing. I further accept Mr. Mehlenbacher’s evidence that inter company loans between Rosseau and its related companies are documented by ledger transfers. There are no written agreements concerning the transfer of money between companies.

[183] It is 252’s position that Rosseau is advancing the group enterprise theory and submits that the Court should disregard the evidence on available funds from Rosseau’s affiliated companies. 252 argues that the Court should find that Rosseau did not have the funds available to close the transaction. I find that Rosseau is not relying on the group enterprise theory and that the theory is not applicable in this case.

[184] 252 relies on Chevron to argue that Rosseau cannot rely on available funds from its affiliated companies, or how the affiliated companies finance transactions, to show that it was ready, willing, and able to close on September 19, 2017. The Defendant submits that to do so disregards the “corporate separateness principle.” I disagree with 252’s position.

[185] In Chevron, the Ontario Court of Appeal considered whether an indigenous group from Ecuador could enforce a judgment from the Ecuadorian courts for environmental damage against the Canadian arm of the global conglomerate. The Court heard a summary judgment motion on the issue of whether Chevron Canada’s shares and assets are eligible to satisfy the foreign judgment. Chevron was successful at first instance and the indigenous group appealed to the Court of Appeal.

[186] The Court of Appeal upheld the corporate separateness between the Chevron Corporation (who caused the harm) and Chevron Canada. In doing so, the Court reviewed the jurisprudence on when it is appropriate to pierce the corporate veil and found that in this instance the requirements of the common law test were not met.

[187] I accept Rosseau’s submission that the “group enterprise theory”, as cited by the 252, relates to whether a company can be held liable for the wrongdoings of its affiliate or subsidiary by piercing the corporate veil.

[188] 252 suggests that the “group enterprise theory” can be adapted to the facts of this case. However, the group enterprise theory relates to liability since that was the issue on the facts of that case, not to sourcing funds which is in issue in this case. This is clear from para. 76 of Chevron:

Not only is such an argument problematic from a policy standpoint, it comes dangerously close to the adoption of the group enterprise theory of liability. That theory holds that where several corporations operate closely as part of the same “group” of corporations, they are in reality a single enterprise and should, accordingly, be responsible for each other’s debts. It has been consistently rejected by our courts…(emphasis added)

[189] I find that Rosseau is not relying on the group enterprise theory. This case is not about group enterprise liability or the piercing a corporate veil. The corporate separateness principle has no relevance.

[190] Further, 252’s position in respect to Rosseau’s evidence on available funds fails to take into consideration the ordinary manner in which the Rosseau group of companies carries on business. According to Mr. Mehlenbacher’s uncontroverted evidence, it was common practice for him to move funds between related companies. The full quote from Mehlenbacher’s testimony is as follows:

Q. This bank account is not in the name of the Rosseau Group Inc. Would this money have been available to acquire the property?

A. Yes it would.

Q. Why is that?

A. Because the owners of this bank account is myself and my partner who are owners of the Rosseau Group. We use this money whenever needed to fund Rosseau Group purchases.

Q. Prior to June 2017 had the Condo Store Realty Inc. loaned money to the Rosseau Group by inter company loan?

A. Yes.

Q. How often?

A. The inter company loan [was our] standard practice. [For example,] by November 30 2020, the loans were just over $12,000,000. I can’t tell you how often we loaned but it accumulated to $12,000,000.

Q. Is this money loaned from the Condo Store Reality to the Rosseau Group or the other way around?

A. It is money the Condo Store Realty loaned to the Rosseau Group.

[191] I also find that Rosseau did proceed to establish the net developable acreage of the Property. Rosseau relied upon the evidence of the planner, Mr. Quarcoopome, as an expert in planning approvals, costs and profit estimate for real estate development. The Defendant did not object to Mr. Quarcoopome providing expert opinion evidence on planning and development, development costs and planning costs. I find that Mr. Quarcoopome is an expert on planning and development, development costs and planning costs. I will deal below with whether he is an expert on profit estimate for real estate development.

[192] 252 did not call any planning evidence and Mr. Quarcoopome’s expertise respecting planning, development costs and planning costs was not challenged.

[193] On June 14, 2017, Rosseau hired Mr. Quarcoopome to determine the net developable acres on the Property. As several of the witnesses commented, the Property contains a wetland. Mr. Quarcoopome testified that he could not come to a conclusion regarding the net developable acreage until he completed a “detailed analysis of what was developable on the Property.” His process began by looking at an aerial photograph of the Property and overlaying it with a provincial conservation map from the Ministry of Natural Resources to identify an approximate limit of the wetland. Mr. Quarcoopome testified that the map from the Ministry of Natural Resources is “un-evaluated,” meaning the wetland has not been visited and specifically defined by the Province. It has only been approximated.

[194] After identifying the approximate limit of the wetland, Mr. Quarcoopome applied a ten-metre buffer. Mr. Quarcoopome explained ten metres is a standard protection measure between development lands and an environmental feature.

[195] The next step was to determine a more precise boundary for the developable area. As Mr. Quarcoopome testified “it’s one thing to take a map and see the limits, it’s a different experience to go on the property and define those limits.”

[196] In July 2017, Rosseau applied to the TRCA for a site walk. Rosseau also hired Natural Resource Solutions (“NRSI”). In September 2017, Mr. Quarcoopome walked the Property with the TRCA and NRSI twice. At the site walks, TRCA staked the development limit and NRSI geo tagged each stake with a GPS backpack.

[197] On October 12, 2017, NSRI uploaded the locations marked by the backpack and converted them into a new map. The new boundary for the Property is marked with a purple line. The map shows three developable areas: on the north west, south west, and north east corners of the Property. Mr. Quarcoopome determined the net developable acres for the Property was 8.28 acres.

[198] The TRCA was not asked to confirm the net developable acres of the Property. To obtain confirmation, Rosseau needed to hire an Ontario Land Surveyor (“OLS”) to complete a registered plan of survey and submit it for review by the TRCA. Rosseau did not take this final step as 252’s breach had put the amended APS at an end. I accept Rosseau’s position that it did not make commercial sense for them do more at that stage.

[199] In Mr. Quarcoopome’s uncontroverted opinion, there would not have been a wide variance between the TRCA approved net developable area and his calculation. Mr. Quarcoopome testified that in preparing a registered plan of survey, an OLS would have used the same stakes used by the NSRI, which were marked with the onsite review of the TRCA. The map would be very similar, if not identical, to Mr. Quarcoopome’s map.

[200] In October 2017, Mr. Quarcoopome created a conceptual plan for the development of the Property using the 8.28 net developable acres. His plan included a feasible lay out for the lots and proposed roads. Mr. Quarcoopome testified that he used the neighbouring development of Snell’s Hollow as a template for the proposed lots. Relying on the Snell’s Hollow development standard and its lot frontage, he testified that 49 detached lots of approximately 12-14 metres each were feasible on the Property. Again, this was not disputed and no planning evidence was called by 252.

[201] In preparing the conceptual plan Mr. Quarcoopome used a cut and fill exercise. Some of the developable area was irregular and could not support efficient development. He testified that a common approach to irregular land is to “trade” some developable land for environmentally protected land. Developers will cut a portion of their developable lands, removing the soil to extend the valley of the environmental feature and use that soil to fill another portion of the valley to create a more efficient lot: “The intent is that the area of the valley, the bowl, remains the same.”

[202] A small portion of the south western development area was proposed as a cut and fill. Mr. Quarcoopome testified that these types of exercises are traditionally approved by the appropriate authorities. Again, this evidence was not disputed.

[203] For all of these reasons, I find that Rosseau was ready, willing and able to close the transaction.

ISSUE 3: Do Justice Trimble’s findings in his December 14, 2017 endorsement estop the Plaintiff from raising the issue of uniqueness and the issue of whether the Plaintiff was ready, willing, and able to close the transaction?

I) The Law:

[204] 252 relied on Leigh and Justice Winkler’s (as he then was), reference to Lord Diplock’s reasons in Fidelitas Shipping Co. Ltd. v. V/O Expert [1965] 2 All E.R.4, as follows:

“Where the issue determined is not decisive of the suit, the judgment on that issue is an interlocutory judgment and the suit continues. Yet I take it to be too clear to need citation of authority that the parties to the suit are bound by the determination of that issue. They cannot subsequently in the same suit advance argument or adduce further evidence directed to show that the issue was wrongly determined. There only remedy is by way of appeal from the interlocutory judgment and, where appropriate, an application to the appellate court to adduce further evidence….”

[205] Rosseau relies on Greenfield, paras. 14 - 26, which provide as follows:

[14] In my view, the trial judge erred in finding that the decision of McTurk J. was a decision in rem and that "the matter is res judicata in respect of any claims for damages under s. 103(4)" of the CJA. A brief review of the nature and purpose of a CPL and the nature of a motion to discharge a CPL will be helpful in explaining why I have reached this conclusion.

[15] Section 103(1) of the CJA entitles a plaintiff, who has commenced a proceeding in which an interest in land is in question, to obtain a CPL and to register it against the title to the land. The registration of the CPL protects the plaintiff by effectively preventing disposition of the property prior to judgment. As such, a CPL can be as effective as an interlocutory injunction in restraining dealings with the property as, generally speaking, it is considered to be an encumbrance on the land. See Brock v. Crawford (1908), 11 O.W.R. 143 at p. 146 (K.B.). No rights are given by a CPL. The effect of registration of a CPL on the title to land is to give notice that rights in respect to the land are being claimed in a pending court proceeding.

[16] As severe hardship may result to the owner of the land as the result of the registration of a CPL, s. 103(6) confers a broad discretion on the court to discharge a CPL and, depending on the circumstances, to impose appropriate terms. As the practical effect of a CPL is similar to that of an interlocutory injunction restraining dealing with the land, to discourage abuse s. 103(4) imposes liability for damages resulting from the registration of a CPL where the registrant is "without a reasonable claim to an interest in the land". For an historical discussion of a certificate of lis pendens, which was the term by which a CPL was previously known, see W.B. Williston and R.J. Rolls, The Law of Civil Procedure (Toronto: Butterworths, 1970), Vol. 2, at pp. 599-607 and Brock v. Crawford, supra, at pp. 145-47 O.W.R.

[17] Subsection 103(6) confers a broad discretion upon the court to discharge a CPL upon a demonstration by the defendant in the action in which the CPL was obtained of any of the grounds contained in the subsection, the last of which invites an examination of the equities as between the parties. How such discretion is to be exercised was described by Steele J. in Clock Investments Ltd. v. Hardwood Estates Ltd. (1977), 1977 1414 (ON SC), 16 O.R. (2d) 671 at p. 674, 79 D.L.R. (3d) 129 (Div. Ct.):

I am of the opinion that the governing test is that the Judge must exercise his discretion in equity and look at all of the relative matters between the parties in determining whether or not the certificate should be vacated.

[18] In this case, Ms. Moore based her motion to discharge the respondent's CPL on s. 103(6)(a)(ii), contending that he did not have a reasonable interest in the land claimed. In Procopio v. D'Abbondanza (1969), 1969 291 (ON CA), [1970] 1 O.R. 127 at p. 128, this court stated that a certificate of lis pendens should not be discharged where "there is a triable issue as between the parties as to an interest in the lands in question . . .". It is significant for the purpose of the issue raised in this appeal that at p. 128 O.R. the court went on to make it clear that in finding that there was a triable issue as to an interest in the lands it was "not in any way deciding the rights of the parties in any respect, either as to the lease, the assignment of the lease or the right to register the assignment of the lease", which were the issues to be decided in the pending action. See, also, Brock v. Crawford, supra, at p. 147 O.W.R.; Inwood v. Ivey, 1939 331 (ON SC), [1939] O.W.N. 56 at p. 58 , [1939] 2 D.L.R. 101 (H.C.J.); Willoughby v. Knight (1973), 1973 737 (ON SC), 1 O.R. (2d) 184 at p. 195, 39 D.L.R. (3d) 656 (H.C.J.); Galinski v. Jurashek (1976), 1 C.P.C. 68 (Ont. H.C.J.).

[19] Although the cases to which I have referred were concerned with the test to be applied on a motion to discharge a certificate of lis pendens obtained under the relevant provisions of the Judicature Act prior to its replacement by s. 103(1) of the CJA, which introduced the term CPL, there is no reason in principle why the earlier jurisprudence should not apply to a motion under s. 103(6) of the CJA. Indeed, cases which have been decided since the CJA came into force in 1984 continue to apply the earlier jurisprudence. See, e.g., Graywood Developments Ltd. v. Campeau Corporation (1985), 8 C.P.C. (2d) 58 (Ont. S.C.); Chiu v. Pacific Mall Developments Inc. (1998), 24 C.P.C. (4th) 67, 19 R.P.R. (3d) 236 (Ont. Gen. Div.).

[20] It follows that on the motion to discharge the CPL the onus was on the moving party, Ms. Moore, to demonstrate that there was no triable issue in respect to whether the respondent had "a reasonable claim to the interest in the land claimed". As such, the onus is analogous to that of a defendant seeking a summary judgment dismissing a plaintiff's claim under Rule 20 of the Rules of Civil Procedure. As on a Rule 20 motion, the role of the motion judge was not to find as a fact whether the respondent had, or did not have, "a reasonable claim to the interest in the land" which was the subject of the claim in his action against Ms. Moore. That issue remained to be determined at the trial of the pending action. Just as the finding of a motion judge on a Rule 20 motion that a genuine issue for trial exists in respect to a plaintiff's claim cannot support a plea of res judicata at the trial of that issue, neither can a finding of a motion judge on a s. 103(6) motion to discharge a CPL that there is a triable issue in respect to whether the registrant has a reasonable claim to the interest in the land support a plea of res judicata at the trial of a claim for damages under s. 103(4) of the CJA. This is because no adjudication of the registrant's interest in the land is required on a motion to discharge a CPL.

[21] Moreover, to preclude a claim for damages under s. 103(4) of the CJA on the basis of a ruling under s. 103(6) would be contrary to the principles on which a plea of res judicata is based. See, e.g., 420093 B.C. Ltd. v. Bank of Montreal (1995), 1995 6246 (AB CA), 128 D.L.R. (4th) 488, 34 Alta. L.R. (3d) 269 (C.A.). If a ruling on a motion to discharge a CPL could properly be considered as determinative of whether a registrant had a reasonable claim to an interest in the land, this would render meaningless a claim for damages under s. 103(4).

[22] Although in his reasons for declining to discharge the CPL McTurk J. appears to have made a finding that the respondent had a reasonable claim to an interest in land, it was not necessary for him to do so. Read as a whole, his reasons indicate that he appreciated that in ruling on the motion he was exercising the discretion conferred by s. 103(6). In my view, it is clear that in declining to discharge the CPL McTurk J. correctly applied the test on a motion under s. 103(6)(a)(ii), namely, whether there is a triable issue as to the reasonableness of the registrant's claim to an interest in the land. There is no doubt that the evidence in the respondent's affidavit opposing the motion to discharge the CPL supports such a result. The functional effect of McTurk J.'s ruling was to permit the registration of the CPL to remain on the title to the property pending the trial of the respondent's claim against Ms. Moore. As he did not adjudicate the issue raised by the appellants in this action, his ruling cannot preclude the appellants from doing so.

[23] It follows that the trial judge was incorrect in holding that McTurk J.'s decision gave rise to a successful plea of res judicata in this action. It appears that the trial judge, in concluding that "McTurk J. was required to decide whether Beattie had a reasonable claim to an interest in land", did not appreciate that the role of the court on a motion to discharge a CPL under s. 103(6)(a)(ii) of the CJA is limited to deciding whether there is a triable issue in respect to whether the registrant has a reasonable claim to the interest in the land claimed.

[24] This conclusion conforms with the caution issued by this court in Procopio, supra, at p. 128 O.R. that the result of a motion to discharge a certificate of lis pendens is not determinative of the issue of whether the registrant in fact has a reasonable interest in the land claimed. This was also the opinion of Henry J. in Mormick Investments Inc. v. Khoury, [1985] O.J. No. 1072 (H.C.J.), which was a claim for damages arising out of the registration of cautions against the plaintiffs' lands. Prior to the action, Linden J. had vacated one of the cautions on the ground that the defendant had no interest in the land. Henry J. rejected the submission that the issue decided by Linden J. was res judicata. At para. 37, Henry J. stated:

While [Linden J.] clearly found that the plaintiff had no interest in the lands the proceeding before him was interlocutory in nature, designed to decide only whether the cautions ought to remain on title until trial, or be vacated. The motion to vacate them was not appropriate to dispose of the issue finally; to say that it had that effect would have the result that, because the motions court judge found on affidavit evidence that the plaintiff could not succeed as the material before him disclosed no interest in the land, it would foreclose to the plaintiff the resolution of the action on its merits at a full trial.

[25] It would also appear that the respondent, in para. 41 of his affidavit in response to the motion to discharge the CPL which I have set out in para. 9, was of the opinion that the purpose of the motion was not to adjudicate whether he had a reasonable claim to an interest in the land. In his affidavit he acknowledged his potential liability under what is now s. 103(4) of the CJA should the court "later determine that the Certificate was registered without a reasonable claim to the interest in the land".

[26] Finally, I would add that the trial judge also erred in characterizing the order of McTurk J. as "a decision in rem". As McTurk J. was not adjudicating whether the respondent had a reasonable claim to an interest in land, his ruling did not amount to a judgment upon the rights and claims to the land asserted by the parties to the action in which the CPL had been obtained. Indeed, no rights are given by a CPL; its entire effect is only to serve as notice that rights in land are being claimed. Although obtaining and registering a CPL may have the effect of turning the action in which it was obtained from an action in personam into an action in rem, it is only if the result of the action is a determination of the title to the property, or some interest therein, that the action would result in a judgment in rem. See McTaggart v. Toothe (1884), 10 P.R. 261 at p. 262 (Ont. Ch.).

II) The Evidence:

[206] It is uncontroverted that 252 brought a motion to discharge the CPL obtained by Rosseau on October 2, 2017. The Honourable Justice Trimble made an Order, dated December 14, 2017 in which the CPL was discharged. The reasons set out in his Endorsement included as follows:

a. “Contemporaneous evidence supports the conclusion that [Rosseau] planned to re-sell, not to develop the property. There is no evidence that it sought permissions for or asked about permissions to develop the property. It did not take steps to make inquiries about assuming 252’s mortgage over the property as it agreed to do. [Rosseau] began to market the property shortly after entering into the APS with the Defendant….”

b. “I find that [Rosseau] intended to treat the property as an investment and not to develop the land.”

c. “…[Rosseau] did not tender…Notwithstanding the Plaintiff’s statements, however, it was never ready, willing + able to close as it had taken no steps to assume 252’s first mortgage with BMO, as stipulated.”

III) Application of the Facts to the Law:

[207] I agree with the Plaintiff, Leigh is distinguishable. In that case, counsel tried to circumvent a motion judge’s order preventing the release of a memo because it was protected by litigation privilege by eliciting the evidence in cross-examination. Justice Winkler, as he then was, held that the defendant could not re-litigate the issue of tendering this specific memo as evidence at trial.

[208] In contrast to an order preventing the release of a specific document, an order discharging a Certificate of Pending Litigation, contemplates the parties litigating the dispute regarding the ownership of a property at trial. The Ontario Court of Appeal specifically considered issue estoppel from findings in a CPL motion in Greenfield, holding that the findings on the CPL motion could not create issue estoppel regarding the interest in property.

[209] In Greenfield, the Court held at para. 23 that a disposition on the interest in property is by nature an interlocutory decision that explicitly contemplates litigation to decide the issue: the “role of the court on a motion to discharge a CPL under s. 103(6)(a)(ii) of the CJA is limited to deciding whether there is a triable issue in respect to whether the registrant has a reasonable claim to the interest in the land.” The Court went on to hold at para. 24 that “a motion to discharge a Certificate of Pending Litigation is not determinative of the issue of whether a registrant in fact has a reasonable interest in the land claimed.” Finally, the Court concluded at para. 26:

Indeed, no rights are given by a CPL; its entire effect is only to serve as notice that rights in land are being claimed. Although obtaining and registering a CPL may have the effect of turning the action in which it was obtained from an action in personam into an action in rem, it is only if the result of the action is a determination of the title to the property, or some interest therein, that the action would result in a judgment in rem.

[210] Justice Trimble’s Endorsement specifically states that his findings of fact lead to the conclusion that the CPL “must be discharged.” In my view, his order does not preclude a final determination of the issues in this trial including the issues of uniqueness and whether Rosseau was ready, willing, and able to close. Justice Trimble was deciding only whether to discharge the CPL. He was not determining any rights.

ISSUE 4: What are the Plaintiff’s damages?

[211] To answer this question there are three matters:

i) Is the Plaintiff’s expert, Martin Quarcoopome, qualified to provide expert evidence concerning Rosseau’s estimate of damages?;

ii) Did the Plaintiff take reasonable steps to mitigate its damages?; and,

iii) How are damages to be calculated and what are the Plaintiff’s damages?

I. The Law:

a) Qualification of Martin Quarcoopome as an Expert Witness Regarding the Estimate of Damages

[212] Mr. Quarcoopome was called to testify to give opinion evidence on behalf of the Plaintiff at trial. A voir dire was held with respect to Mr. Quarcoopome’s qualifications. Rosseau sought to have Mr. Quarcoopome qualified to give opinion evidence in respect to planning approvals and the costs and profit estimates for real estate developments. 252’s counsel had no objection to Mr. Quarcoopome providing opinion evidence on land planning, land use planning and development, and development and planning costs. The objection by 252 to Mr. Quarcoopome’s qualifications was limited to him providing opinion evidence on estimated profit.

[213] Having heard the voir dire and with no objection from the Defendant, Mr. Quarcoopome was and is qualified to give opinion evidence on land planning, land use planning and development including planning approval and planning costs.

[214] Counsel agreed at the trial that Mr. Quarcoopome would give his full evidence on all issues at the trial including on profit estimates and that they would make submissions on whether Mr. Quarcoopome was qualified to give opinion evidence on profit estimate in their written and oral submissions at the end of the trial and that I decide this issue when I am deciding all issues at the end of the trial. This is the context for this matter.

[215] The Supreme Court of Canada in R. v. Mohan, 1994 80 (SCC), [1994] 2 S.C.R. 9, at para. 31, held that for a witness to be properly qualified as an expert, he or she must have “acquired special or peculiar knowledge through study or experience in respect of the matters in which he or she undertakes to testify.” This is also set out at paras. 16 - 25 of White Burgess as follows:

[16] Since at least the mid-1990s, the Court has responded to a number of concerns about the impact on the litigation process of expert evidence of dubious value. The jurisprudence has clarified and tightened the threshold requirements for admissibility, added new requirements in order to assure reliability, particularly of novel scientific evidence, and emphasized the important role that judges should play as “gatekeepers” to screen out proposed evidence whose value does not justify the risk of confusion, time and expense that may result from its admission.

[17] We can take as the starting point for these developments the Court’s decision in R. v. Mohan, 1994 80 (SCC), [1994] 2 S.C.R. 9. That case described the potential dangers of expert evidence and established a four-part threshold test for admissibility. The dangers are well known. One is that the trier of fact will inappropriately defer to the expert’s opinion rather than carefully evaluate it. As Sopinka J. observed in Mohan:

There is a danger that expert evidence will be misused and will distort the fact-finding process. Dressed up in scientific language which the jury does not easily understand and submitted through a witness of impressive antecedents, this evidence is apt to be accepted by the jury as being virtually infallible and as having more weight than it deserves. [p. 21]

(See also D.D., at para. 53; R. v. J.-L.J., 2000 SCC 51, [2000] 2 S.C.R. 600, at paras. 25-26; R. v. Sekhon, 2014 SCC 15, [2014] 1 S.C.R. 272, at para. 46.)

[18] The point is to preserve trial by judge and jury, not devolve to trial by expert. There is a risk that the jury “will be unable to make an effective and critical assessment of the evidenceˮ: R. v. Abbey, 2009 ONCA 624, 97 O.R. (3d) 330, at para. 90, leave to appeal refused, [2010] 2 S.C.R. v. The trier of fact must be able to use its “informed judgment”, not simply decide on the basis of an “act of faith” in the expert’s opinion: J.-L.J., at para. 56. The risk of “attornment to the opinion of the expertˮ is also exacerbated by the fact that expert evidence is resistant to effective cross-examination by counsel who are not experts in that field: D.D., at para. 54. The cases address a number of other related concerns: the potential prejudice created by the expert’s reliance on unproven material not subject to cross-examination (D.D., at para. 55); the risk of admitting “junk science” (J.-L.J., at para. 25); and the risk that a “contest of experts” distracts rather than assists the trier of fact (Mohan, at p. 24). Another well-known danger associated with the admissibility of expert evidence is that it may lead to an inordinate expenditure of time and money: Mohan, at p. 21; D.D., at para. 56; Masterpiece Inc. v. Alavida Lifestyles Inc., 2011 SCC 27, [2011] 2 S.C.R. 387, at para. 76.

[19] To address these dangers, Mohan established a basic structure for the law relating to the admissibility of expert opinion evidence. That structure has two main components. First, there are four threshold requirements that the proponent of the evidence must establish in order for proposed expert opinion evidence to be admissible: (1) relevance; (2) necessity in assisting the trier of fact; (3) absence of an exclusionary rule; and (4) a properly qualified expert (Mohan, at pp. 20-25; see also Sekhon, at para. 43). Mohan also underlined the important role of trial judges in assessing whether otherwise admissible expert evidence should be excluded because its probative value was overborne by its prejudicial effect — a residual discretion to exclude evidence based on a cost-benefit analysis: p. 21. This is the second component, which the subsequent jurisprudence has further emphasized: Lederman, Bryant and Fuerst, at pp. 789-90; J.-L.J., at para. 28.

[20] Mohan and the jurisprudence since, however, have not explicitly addressed how this “cost-benefit” component fits into the overall analysis. The reasons in Mohan engaged in a cost-benefit analysis with respect to particular elements of the four threshold requirements, but they also noted that the cost-benefit analysis could be an aspect of exercising the overall discretion to exclude evidence whose probative value does not justify its admission in light of its potentially prejudicial effects: p. 21. The jurisprudence since Mohan has also focused on particular aspects of expert opinion evidence, but again without always being explicit about where additional concerns fit into the analysis. The unmistakable overall trend of the jurisprudence, however, has been to tighten the admissibility requirements and to enhance the judge’s gatekeeping role.

[21] So, for example, the necessity threshold criterion was emphasized in cases such as D.D. The majority underlined that the necessity requirement exists “to ensure that the dangers associated with expert evidence are not lightly tolerated” and that “[m]ere relevance or ‘helpfulness’ is not enough”: para. 46. Other cases have addressed the reliability of the science underlying an opinion and indeed technical evidence in general: J.-L.J.; R. v. Trochym, 2007 SCC 6, [2007] 1 S.C.R. 239. The question remains, however, as to where the cost-benefit analysis and concerns such as those about reliability fit into the overall analysis.

[22] Abbey (ONCA) introduced helpful analytical clarity by dividing the inquiry into two steps. With minor adjustments, I would adopt that approach.

[23] At the first step, the proponent of the evidence must establish the threshold requirements of admissibility. These are the four Mohan factors (relevance, necessity, absence of an exclusionary rule and a properly qualified expert) and in addition, in the case of an opinion based on novel or contested science or science used for a novel purpose, the reliability of the underlying science for that purpose: J.-L.J., at paras. 33, 35-36 and 47; Trochym, at para. 27; Lederman, Bryant and Fuerst, at pp. 788-89 and 800-801. Relevance at this threshold stage refers to logical relevance: Abbey (ONCA), at para. 82; J.-L.J., at para. 47. Evidence that does not meet these threshold requirements should be excluded. Note that I would retain necessity as a threshold requirement: D.D., at para. 57; see D. M. Paciocco and L. Stuesser, The Law of Evidence (7th ed. 2015), at pp. 209-10; R. v. Boswell, 2011 ONCA 283, 85 C.R. (6th) 290, at para. [13](https://www.canlii.

1. Nature of Hearing:

2. Brief Facts / Chronology:

3. Issues:

4. Summary of Parties’ Positions:

i) The Plaintiff Rosseau

ii.) The Defendant 252

5. Positions of the Parties:

ISSUE 1: Did 252 breach the APS, as amended on March 10, 2017 by the amended APS? Did the terms of the amended APS nullify the requirement that the Plaintiff purchaser pay the Defendant a further deposit of $400,000 upon waiver of the due diligence condition?

Plaintiff:

Defendant:

Plaintiff’s Reply:

ISSUE 2: Was the Plaintiff purchaser ready, willing, and able to close the APS and amended APS on September 19, 2017

Plaintiff:

Defendant:

Plaintiff’s Reply:

ISSUE 3: Do Justice Trimble’s findings in his December 14, 2017 Endorsement estop the Plaintiff from raising the issue of uniqueness and the issue of whether the Plaintiff was ready, willing, and able to close the transaction?

Plaintiff:

Defendant:

Plaintiff’s Reply:

ISSUE 4: What are the plaintiff’s damages?

a. Is the Plaintiff’s expert, Martin Quarcoopome of Weston Consulting, qualified to provide opinion evidence concerning the Plaintiff’s estimate of damages?

Plaintiff:

Defendant:

Plaintiff’s Reply:

b. Did the Plaintiff take steps to mitigate its damages?

Plaintiff:

Defendant:

Plaintiff’s Reply:

Plaintiff:

Defendant:

Plaintiff’s Reply:

ISSUE 5: The Defendant’s Counterclaim.

Plaintiff:

Defendant:

Plaintiff’s Reply:

6. Analysis

ISSUE 1: Did 252 breach the APS, as amended on March 10, 2017 by the amended APS? Did the terms of the amended APS nullify the requirement that the Plaintiff purchaser pay the Defendant a further deposit of $400,000 upon waiver of the due diligence condition?

I. The Law

II. The Evidence

a) The Parties:

b) The APS:

c) Events Subsequent to the Delivery of the APS:

d. The Amendment APS

III. Application of Facts to the Law

ISSUE 2 - Was the Plaintiff purchaser ready, willing, and able to close the APS and amended APS on September 19, 2017?

I. The Law

II. The Evidence

a) Events after the amended APS

b) Waiver of Conditions

c) The Closing:

d) Was Rosseau Ready, Willing and Able to Close the Transaction?

III Application of Facts to the Law

ISSUE 3: Do Justice Trimble’s findings in his December 14, 2017 endorsement estop the Plaintiff from raising the issue of uniqueness and the issue of whether the Plaintiff was ready, willing, and able to close the transaction?

I) The Law:

II) The Evidence:

III) Application of the Facts to the Law:

ISSUE 4: What are the Plaintiff’s damages?

I. The Law:

a) Qualification of Martin Quarcoopome as an Expert Witness Regarding the Estimate of Damages

Judge

Counsel

Parties

Areas of Law

Fact Patterns

Expert Witnesses

Financial Outcomes

Issues

Statutory Provisions 2

Legal Tests 4

Legislation 2