COURT FILE NO.: CV-15-18888-00

DATE: 2022 08 29

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

SONIA PREIANO and GIANLUCA PREIANO

Tyler McLean for the Plaintiff

Plaintiffs

• and -

ANTONIA CIRILLO by her litigation guardian, GRACE CIRILLO and THE ESTATE OF GIUSEPPE CIRILLO

Defendants

Grace Cirillo, a non-lawyer, acting in person as Litigation Guardian for Antonia Cirillo and as Estate Trustee for the Estate of Giuseppe Cirillo

HEARD: January 10-13, 17, 19-22, 24, 2022, at Brampton

REASONS FOR JUDGMENT

Contents

ONTARIO.. 1

SUPERIOR COURT OF JUSTICE. 1

RESULT. 5

PROCEDURAL HISTORY.. 6

TRIAL ORDERS.. 7

EVIDENCE AT TRIAL. 8

CREDIBILITY.. 10

The Law on Credibility. 10

Gianluca Preiano. 13

Sonia Preiano. 14

Grace Cirillo. 14

Elena Cirillo. 18

ONUS AND STANDARD OF PROOF. 18

STANDING.. 19

The Parties’ Positions. 19

Result 22

The Law and Analysis. 22

THE MERITS.. 26

The Plaintiffs and Their Onus. 26

Anticipatory Breach. 27

The Defences. 29

Defence #1 Neither of the elder Cirillos had the capacity to enter into the APS. 30

Defence #2: Neither of the elder Cirillos had the linguistic ability or education or sophisticationto understand what they were doing. 34

Defence #3: Giuseppe Cirillo did not sign or initial many parts of the APS and other transaction related documents. 35

Defence #4: The agent, Finelli, and Elena Cirillo coerced the vendors into enter entry into the APS. 37

Defence #5: Finelli was unlicensed, uninsured, and therefore not entitled to act as a real estate agent or broker. 37

Defence #6: Finelli had a dual agency. The plaintiffs and the defendants were all his clients, but he preferred the interests of the plaintiffs over the defendants. 38

Defence #7: The deposit was not delivered in time. 40

Defence #8: the plaintiffs never tendered, nor were they in the position to tender 44

Defence #9: the sale was not for fair market value. 45

Remedy. 45

Specific Performance. 45

Adequacy of Financial Damages. 51

Are damages adequate?. 53

Mitigation. 55

Conclusion. 57

INTRODUCTION

[1] This action arises out of a failed real estate transaction in which Giuseppe and Antonia Cirillo agreed to sell their home at 1510 Cawthra Road in Mississauga to the plaintiffs, Sonia and Gianluca Preiano, for $480,000. The deal did not close. Why, and who is at fault are at issue.

[2] Grace Cirillo, one of Giuseppe and Antonia Cirillos’ children, is a representative Plaintiff.. She is the litigation guardian for Antonia Cirillo under a Power of Attorney, and the litigation trustee for the Estate of Giuseppe Cirillo, her late father. She acted personally in this litigation for these two parties although she is not a lawyer.

[3] To avoid confusion, I refer to Giuseppe and Antonia Cirillo collectively as “the elder Cirillos” and individually by their names. I refer to Grace Cirillo as “Ms. Cirillo” or by her full name if clarity demands it.

[4] The Preianos made their offer on 19 August 2013. There were counteroffers. The elder Cirillos accepted the Preiano’s signed back offer on 21 August and the Agreement of Purchase and Sale (APS) was formed. The sale was to complete on 20 November 2013 at 6 PM.

[5] The sale never closed.

[6] The Preianos seek an order for specific performance, or, in the alternative, an order for damages.

[7] The Preianos submit that the APS was enforceable, and that they were ready, willing, and able to close, having the purchase price available between cash and a mortgage commitment. They say that by letter dated 14 November 2013, the Cirillos, through their lawyer, clearly and unequivocally stated that there was no enforceable APS, and that they would not close the sale. The Preiano’s lawyer responded on 18 November that they considered the Cirillos’ lawyer’s letter an anticipatory breach, and that the Preianos would stand on their legal rights. As a matter of caution, by 20 November the Preianos had transferred sufficient cash to their lawyer such that between the $25,000 deposit, the cash transfer, and the mortgage commitment, they could complete the sale.

[8] The Cirillos contend, as set out in their lawyer’s letter of 14 November 2013, that there was no APS because:

a) The Cirllos were pressured by the agent into selling their home,

b) There were “issues of competency at play” with respect to Mr. Cirillo’s ability to sign the documents,

c) There were serious inconsistencies and anomalies between the documents that the Cirillos had in their possession and the documents provided by the agent,

d) There appeared to have been fraud.

[9] In addition, the Cirillos’ argue that the deposit was remitted outside of the 24 hour requirement, and hence the Preianos were in breach of the APS. Further, they argued that the Preianos were never ready, willing, and able to close. Their mortgage commitment required an inspection. That inspection never took place. Therefore, the mortgage commitment was invalid.

[10] For these reasons, they argue that there was no enforceable APS, and that they are entitled to keep the Preianos’ $25,000 deposit.

RESULT

[11] For reasons that follow, I allow the Preiano’s action for two reasons, either of which is sufficient, on its own, to decide the matter.

[12] First, I hold that Ms. Cirillo has no status to act in this litigation for either of the elder Cirillos. She is not a lawyer. She is a representative plaintiff for Antonia Cirillo, an incompetent, under a Power of Attorney, and for the Estate of Giuseppe Cirillo. Under Rule 15.01, she must have a lawyer. The Rule grants the Court no discretion to waive compliance. Therefore, I strike the Statements of Defence, and grant default judgment, subject to a determination as to remedy.

[13] Second, I hold that the Preiano’s action should be allowed on its merits.

[14] I award judgment against the Defendants in the sum of $1 million in damages. I dismiss the claim for specific performance. I order that the real estate agent return the $25,000 deposit to the Preianos.

PROCEDURAL HISTORY

[15] This action has a long history. The following are some the significant dates and events:

a) 29 November 2013: the Statement of Claim is issued claiming specific performance, only;

b) 5 December 2013: Master Graham placed a CPL on the elder Cirillos’ property;

c) 24 January 2014: Giuseppe Cirillo died;

d) 14 August 2014: the Statement of Claim was amended;

e) 21 August 2015: Gray, J., permitted the filing of an Amended Statement of Defence;

f) 18 November 2015: Price, J., ordered that the Action would continue against the Estate of Giuseppe Cirillo by its Estate Trustee, Antonia Cirillo. Antonia Cirillo’s competence to act as Estate Trustee does not appear to have been an issue;

g) 10 November 2016: Barnes, J., dismissed the action, along with all third-party claims, cross-claims, and counterclaims.

h) 24 July 2017: the Court of Appeal reversed Barnes J.’s decision and remitted the matter for trial. Leave to amend the Statement of Claim was granted.

i) 17 April 2018: the Statement of Claim is amended by the issuance of a Fresh as Amended Statement of Claim, claiming both specific performance and seeking damages of $750,000;

j) 22 February 2019: Tzimas, J., ordered that Grace Cirillo be appointed as litigation guardian for Antonia Cirillo, and as Estate Trustee for the Estate of Giuseppe Cirillo;

k) 28 June 2019: Grace Cirillo served a Notice of Intention to Act in Person as the personal representative of each of the Defendants;

l) 27 July 2020: the action was struck from the list pursuant to an administrative order under R. 48;

m) 23 November 2020: Woolcombe, J restored the matter to the trial list;

n) 22 March 2021: Daley,RSJ., dismissed the Defendant’s motion for summary judgement, and the plaintiffs’ cross motion for summary judgement;

o) 18 June 2021: this date was reserved for a motion by Grace Cirillo to have Daley, RSJ recuse himself as case management judge. When no motion was filed, the date was abandoned;

p) 16 June 2021: Daly RSJ provided trial directions for a summary trial wherein affidavits filed on the summary judgment motions would comprise the evidence in chief and only cross examination would be done orally. Others who might give evidence should do so in chief by affidavit. The matter was placed into the January 2022 sittings;

q) 31 December 2021: Kumaranayake, J., struck the Third Party Claim against the agent and realtor and awarded $10,000.00 in costs. I understand that order is under appeal.

TRIAL ORDERS

[16] At trial, Ms Cirillo advised that she had served a Notice of Abandonment of the elder Cirillos’ Third Party Claim against their daughter, Elena Cirillo, although the Court had not accepted its filing. In any event, since the Third Party Action had never been set down, it was not before this court to be tried.

[17] At trial, for oral reasons given at the time, I made several procedural orders including the following which I list for context:

a) Permitted amendments to the Statement of Claim and the Statement of Defence.

b) Permitted amendments to the Title of Proceedings.

c) Permitted Ms. Cirillo to withdraw her 8 May 2019 Affidavit as part of her evidence in chief but held that she could be cross examined on it as a prior sworn statement.

d) I ruled that the Affidavits of Documents of each party could be marked as lettered exhibits, but no documents would be accepted into evidence except on consent as to the truth of their contents, or unless proved in the normal course.

e) I ruled that a copy of Elena Cirillo’s Affidavit of 21 December 2021 attached as an exhibit to Grace Cirillo’s 21 December 2021 Affidavit, and Grace Cirillo’s 21 December 2021 Affidavit were not admissible in that they were served on 23 December 2021, long after Daly, RSJ’s 5 November deadline.

[18] I also heard argument of the issue of whether Ms. Cirillo had status to act in this litigation for Antonia Cirillo as her attorney, or for the Estate of Giuseppe Cirillo as its Estate Trustee. I advised that I would rule on this issue as part of the reasons for judgment.

EVIDENCE AT TRIAL

[19] Pursuant to the Case Management Orders of Daly RSJ, I received the following Affidavits into evidence:

• Gianluca Preiano: March 6 and May 24, 2019, and February 23 and December 21 2021.

• Sonia Preiano dated March 6 and May 24, 2019, and February 23 and December 7, 2021

• Plaintiff Expert John Cassan Affidavit Dated September 15, 2021,

• Grace Cirillo Affidavit Dated January 13, October 14, 2020, and February 25, August 5, November 21, 2021

• Elena Cirillo dated December 9, 2019.

[20] Each affiant was cross examined at trial.

[21] I did not hear from Elena Cirillo on what transpired in the negotiations and the formation of the APS. She would have been able to provide direct evidence on what happened, who said what to whom, about the elder Cirillos’ comprehension of what was transpiring, whether they were pressured or coerced, and whether they understood what was going on.

[22] I received no evidence from the listing real estate agent, Frank Finelli, of Royal Lepage Realty Centre.

[23] The Preianos ask that I draw the adverse inference that the evidence Mr. Finelli and Elena Cirillo would have given on the issues in this litigation would not have assisted the elder Cirillos (see: 1305268 Ontario Inc. v 823042 Ontario Inc., 2018 ONSC 6121, para. 14). I decline to do so. It was open to all parties to call Mr. Finelli and obtain his evidence. It was also open to the Preianos to cross examine Elena Cirillo on any relevant matter. They chose to not cross examine Elena Cirillo.

CREDIBILITY

[24] Much in this case turns on the oral evidence of the parties, there being a paucity of documents or neutral witness testimony upon which I can rely. Therefore, their individual credibility is fundamental to my decision making.

[25] There were four principle fact witnesses: Gianluca and Sonia Preiano, and Grace and Elena Cirillo. I will deal with the evidence of Mr. Cassan separately under the damages portion of these reaons.

[26] As indicated, there are other witnesses that could have been called, including:

a) Frank Finelli, the real estsate agent that listed the home and was the only agent involved in the sale by the Cirillos;

b) Ralph Covello, the Preiano’s mortgage broker; and

c) The other Cirillo siblings, other than Grace and Elena.

[27] I raise their absence from this trial only to point out that, based on the evidence that I did hear, these witnesses might have had evidence that was of assistance.

The Law on Credibility

[28] An assessment of any witness' credibility involves an assessment of two things: a) the witness' honesty (his belief in the truth of what he said), and b) the reliability of the witness' evidence (his ability to remember and testify accurately) when compared with all of the other evidence.

[29] In addressing the credibility of each of the witnesses, I have directed myself to the following considerations:

a) What is the witness’ demeanour while giving evidence? While how a witness gives evidence is relevant, findings of credibility should not be made on demeanour alone. There may be cultural, social, ethnic, or other reasons to explain how specific witness testifies. There are too many factors that affect a witness' ability to testify comfortably to make demeanour the sole or most important factor in determining credibility.

b) Does the evidence make sense in light of the preponderance of probabilities which a practical and informed person would find reasonable given the particular place and condition? (see: Faryna v. Chorny, 1951 CanLII 252 (BC CA), [1952] 2 D.L.R. 354 (C.A.), at para. 11).

c) Does the evidence have an internal consistency and logical flow? (see: R. v. C.H., (1999) 1999 CanLII 18939 (NL CA), 182 Nfld. & P.E.I.R. 32 (C.A.).

d) Is the evidence consistent with the witness' other statements? How significant are the differences and are they adequately explained? (see: R. v. Dinardo, 2008 SCC 24, [2008] 1 S.C.R. 788).

e) Is there independent confirming or contradicting evidence? (see: R. v. Khan, 1990 CanLII 77 (SCC), [1990] 2 S.C.R. 531).

f) Does the witness have a motivation to lie or exaggerate? The witness' motivation to lie must be greater than his or her interest to win or lose the case. (see: R. v. S.D., 2007 ONCA 243, 218 C.C.C. (3d) 323).

[30] In cases that are based solely or principally on the oral evidence of the parties such as this one, F.H. McDougall, 2008 SCC 53 (at para. 45 to 49, 57, 72, and 86) instructs me that the following additional principles should apply when the trial judge determines whether an alleged event occurred:

a) The standard of proof applicable to competing versions of an event is whether it is “more likely than not” that the alleged event occurred as proffered by the plaintiff.

b) The trial judge must scrutinize the evidence with care. There is no differing level of scrutiny or care that applies depending on the seriousness of the case.

c) What a witness says should be scrutinized in light of, and in conjunction with all of the other evidence.

d) Evidence must be sufficiently clear, convincing, and cogent to satisfy the balance of probabilities test. There is no objective standard to measure sufficiency.

e) In “he said – she said” cases, the judge is faced, often, with evidence of events that are alleged to have occurred many years before, where there is little other evidence than that of the plaintiff and defendant. As difficult as the task may be, the judge must make a decision.

f) The trial judge must assess credibility. It is not an exact science.

g) Deciding between conflicting witnesses’ version of events is decided on the balance of probabilities, which includes the assessment of credibility.

[31] I have applied these principles to my assessment of the witnesses’ credibility.

[32] In many aspects, this case is a classic “she said - he and she said” dispute.

Gianluca Preiano

[33] Mr. Preiano was a good witness. His answers were direct, he admitted weaknesses in his evidence, he did not prevaricate. Notwithstanding the passing of time, he had good command of the facts and documents and was shaken little on cross-examination with respect to any important evidence.

[34] There are some negative factors that weigh in Mr. Preiano’s credibility assessment. These include:

a) He did not recall whether he told Finelli that he needed a mortgage to purchase the Cirillos’ house, although he recalled saying that he was pre-approved for a mortgage of $400,000.00.

b) He did not recall whether he told Finelli, directly, that he needed an appraisal of the Cirillo house to finalize his mortgae pre-approval. However, the mortgage broker told Finelli.

c) His plan was to live in the Cirillo house while building a new home on his old lot just up the street. He had no building permit, however, but said that he was in the process of getting one.

d) While he planned to move his wife and four children into the Cirillo home while he build a new one on his old lot, he had no inspection clause re the Cirillo home, and had no idea if it could accommodate this family or was “safe”. He did not need such an inspection as he was a contractor, himself. He was uncertain as to whether the family would move in to the Cirillo house, or whether it would need renovating first.

e) There is the issue of the 19 August 2013 personal cheque as deposit, which I address separately. While Mr. Preiano says that he replaced the personal cheque with a certified cheque, he never asked for the personal cheque to be returned, notwithstanding that it was negotiable.

f) He says that he does not remember if he dealt with Grace Cirillo directly, and specifically whether, in an argument with her, said that the litigation was costing him $200,000 per day. This is difficult to accept. It was an argument, and Ms. Cirillo is a forceful personality.

g) In November 2013 there was an exchange of correspondence between the parties’ lawyers. On 14 November, the Cirillos’ lawyer questioned several aspects of the transaction including that the deposit was not paid in accordance with the APS. She said, unequivocally “It is for those reasons, that my clients deem this to be a (sic) invalid Agreement of Purchase and Sale and an improper one upon which no transaction can close on November 20^th, 2013.”. By letter of 18 November in response the Preiano’s lawyer confirmed to the Cirillo’s lawyer that after consulting with the Preianos, he could confirm that the deposit was paid on 22 August, the date of the Preiano’s certified $25,000 deposit cheque, which was within the 24 hours under the APS. Mr Preiano saw the letter but did not raise the 19 August personal cheque deposit.

[35] I have considered these factors in assessing Mr. Preiano’s credibility.

Sonia Preiano

[36] Ms. Preiano’s evidence was uncontroversial and factored little into the issues to be decided in this lawsuit. For the most part, she left the transaction to her husband.

[37] Generally, unless their evidence was challenged by other directly opposing evidence, I accepted the Preianos’ evidence. None of their credibility issues were such that I was suspicious of their evidence, in the main.

Grace Cirillo

[38] Ms. Cirillo was the main witness for the defence.

[39] Ms. Cirillo was a forceful and formidable witness, no doubt driven by the desire to protect her aging mother who might be at risk of losing her home. This laudable goal, however, did not ameliorate the many serious credibility issues she had. These credibility issues included:

a) She argued facts that were contrary to her admissions. For example, she argued that the Preianos’ personal cheque for the $25,000 deposit was a fraud, created in 2015 to cover up the fact that the certified cheque for the deposit was delivered late. In para. 45 and 46 of her 8 May 2019 Affidavit (on which she was cross examined) Ms. Cirillo she admitted that it was Finelli’s practice to take a personal deposit cheque on presentation of the offer and to obtain a certified cheque within 24 hours of the offer’s acceptance. Further, Ms. Cirillo agreed that Finelli followed this procedure in the Preianos’ purchase. She accepted Finelli’s evidence that he kept the personal cheque in his briefcase until July 2015. Further, at para. 80(a) and (b) of Giuseppe’s Statement of Defence and the mirror paragraph in Antonia’s Defence, they accept that the Preianos’ personal deposit cheque was provided.

b) She made factual assertions without any admissible evidence in support, including:

i. That Finelli was agent for both the Preianos and the Cirillos but preferred the interests over the Preianos over the Cirillos. The Buyer Customer Service Agreement and the matching Acknowledgement that Finelli and the Preianos signed indicates unequivocally that Finelli was the agent for the Cirillos, and the only obligation he owed to the Preianos was to act in a fair, ethical, and professional manner. Finelli and the Preianos agreed that Finelli would provide to them only customer service, and that neither Finelli nor the brokerage would represent the Preianos’ interests in the transaction.

ii. That some of the signatures and initials on the APS were not her father’s, and that they must have been forged. She admitted in cross examination that Antonia held a Power of Attorney for property for Giuseppe, and that the impugned signatures and initials appear to be in Antonia’s handwriting. She also admitted that she was not present when the offers were being made, signed back, and the APS concluded.

iii. That Giuseppe and Antonia were coerced or forced into signing the listing and/or APS. Ms. Cirillo was not present for any of these events. She said that one would have to speak to Elena about this.

iv. That Giuseppe was physically and mentally unable to enter into the APS. She produced no evidence that was she qualified to opine that at the time that Giuseppe signed or authorized Antonia to sign the APS on his behalf he was incompetent to enter into the contract. In any event, Antonia was not incompetent and held a valid Power of Attorney for Giuseppe.

v. That Antonia was mentally incapable of entering into the APS. The evidence is that her incapacity arose after the APS was signed. The guardianship order was not made until 2019. From 2013 to 2015, Antonia was retaining and instructing counsel, and was made Giuseppe’s Estate Trustee in 2015.

vi. That Giuseppe and Antonia did not understand what they were doing when they signed the APS. Ms. Cirillo was not present when the APS was signed.

vii. That Finelli and Mr. Preiano had an arrangement whereby either Mr. Preiano was purchasing the Cirillo property for Finelli, and/or that they were going to flip the property and split the profits. This is Grace Cirillo’s mere speculation.

c) She based much of her testimony and parts of her theory of her case on inadmissible information or hearsay. For example:

i. information she received in conversations with her siblings, when her siblings were not called to testify;

ii. information received from ‘a well-respected realtor’ concerning allegedly dubious aspects of the negotiations and final APS with the Preianos, without identifying that individual or calling him or her to give evidence;

iii. information about many aspects of Elena’s dealings with others, which she received from Elaina, which do not appear in Elena’s affidavits nor were raised in her oral evidence before this court;

iv. information she received from Elaina with respect to a discussion Elaina had with “Leo” a real estate agent, who knows Phil Sbrocchi and his father, who own the brokerage at which Finelli was an agent, and to have the reputation for running “shady” deals and “under the table” deals, without calling Leo or the Sbrocchis to give evidence at trial.

d) She made categorical statements based on intuition. For example, Ms. Cirillo alleged strongly that Mr. Preiano bought the elder Cirillos’ house as a buyer for someone else. She conceded that she had no evidence of this, but she knew that something was suspicious and that there was some type of business arrangement between the Preianos and Finelli.

e) She would not accept reasonable explanations. She found support in her theory that something nefarious was happening in the purchase, because the Enbridge bill came, pre-closing, to the Cirillos’ home, but listing Mr. Preiano as the owner. She refused to accept that Mr. Preiano had the Enbridge bill put in his name as he intended to complete the transaction.

f) She said that the Preiano’s were not ready, willing and able to close the deal. She admitted that she had no evidence to this effect. Notwithstanding that she said that the Preianos were not able to close the transaction, Ms. Cirillo said that she gave her lawyer instructions to not complete the deal, and to terminate it as set out in her lawyer’s 14 November 2013 letter.

g) She blames others when the facts do not support her. She said that she had never seen the Preiano’s lawyer’s 18 November 2013 letter in response to the Cirllos’ lawyer’s 14 November 2013,`the former of which said that the Preianos treated the Cirillos’ lawyer’s letter as an anticipatory breach. When she was confronted with the fact that the Preianos’ lawyer’s letter was contained in her sworn Affidavit of Documents, she blamed her lawyer for inserting it. She merely signed the Affidavit of Documents. She also had no explanation why para. 26 of Giuseppe Cirillo’s Defence refers to it.

h) Some evidence defied logic. In response to questions regarding whether the elder Cirillos wanted to sell their house, Ms. Cirillo was asked why the Cirillos listed their house on several instances in the time shortly listing it with Finelle. She said it is because Elena wanted to move, and also said that they merely wanted to see what they could get for the house. They wanted no showings and no signs. This defies logic. One of the other Cirillo siblings appears to have listed the house two other occasions before Elena listed it with Finelli. It was listed on the Multiple Listing Services. An appraisal of market value assessment would have given them the value that they were searching for.

i) Ms. Cirillo is an experienced bookkeeper, yet she misreads or misinterprets financial documents. Consider two examples. First, Ms. Cirillo found a $25,000 transfer from Mr. Preiano’s company’s account to his personal account. She concluded that this was the return of the $25,000 deposit from Finelli, which she took as evidence that the Preiano’s could not close the transaction, and that there was some deal between the Preianos and Finelli. There is no evidence to support either of these conclusions. Second, she says that the Trust Ledger from the brokerage confirms that the $25,000 was paid out to the Preianos. It does not. It shows that that the $25,000 certified down payment cheque was deposited into the trust account. Ms. Cirillo says that the column that says “Liability for funds” means that the money was paid out. There is no specific evidence on this point. The Trust Ledger was part of a business record notice and can be accepted for the truth of its contents. On its face, the “Liability for Funds” column simply means that the money in the trust account is not the brokerage’s.

[40] Based on the foregoing, I find that Ms. Cirillo’s evidence is unreliable, and where it conflicts with that of other witnesses or documents, I prefer the evidence of the other witnesses or documents.

Elena Cirillo

[41] Elena Cirillo was a minor witness. She merely adopted her 9 December 2019 Affidavit which had little evidence relating to the issues in the main action. She was not cross examined.

ONUS AND STANDARD OF PROOF

[42] As in any civil action, the standard of proof is the balance of probabilities, and the onus is on the proffering party. In other words, the onus is on the Preianos to establish that there was a valid, enforceable APS, the Cirillos breached the APS, they suffered damages from the breach, and that they are entitled to the relief they seek of specific performance or damages. The onus is on the Cirillos to establish their defences on a balance of probabilities.

STANDING

[43] At the beginning of the trial, I raised the question of Ms. Cirillo’s right, as a non-lawyer, to act in this litigation when she was a representative Plaintiff of her mother and her father’s estate. I referred the parties to several cases of which I was aware that addressed the issue and asked that the parties address the issue on 11 January.

[44] The issue of Ms. Cirillo’s status to act on behalf of the parties for whom she is a representative, without a solicitor, arises from rule 15.01(1), which provides:

(1) A party to a proceeding who is under disability or acts in a representative capacity shall be represented by a lawyer.

(2) A party to a proceeding that is a corporation shall be represented by a lawyer, except with leave of the court.

(3) Any other party to a proceeding may act in person or be represented by a lawyer.

The Parties’ Positions

[45] Ms. Cirillo argued that the combined effect of Rules 10.02, 2.03, 1.04 (1), 7.05 (3), and 15.01 (1) allow her to act in litigation in defence of the two parties whom she represents.

[46] Ms. Cirillo also relied on the decision of Ricchetti, J, in Estate of Rosanna Cirillo, et al. v. Brampton Civic Hospital, et al., unreported, Court file no. CV-20-1052, 18 June 2021, in which Ricchetti, J., appointed Grace Cirillo as litigation guardian for her mother, Antonia, and as Estate Trustee for the estate of her late sister, Rosanna Timson (nee Cirillo).

[47] In that motion, the doctors objected to Ms. Cirillo acting in person citing Rule 15.01(1). Ricchetti, J. noted that Ms. Cirillo had not asked for that relief, but he addressed it because the doctors had raised it.

[48] Ricchetti, J. said that there was nothing in Rule 7 or 15 that permitted the court to grant leave to permit a litigation guardian to act personally in the proceeding, without a lawyer. He expressed concern that this would create an access to justice issue when the person advancing the claim as litigation guardian could not afford a lawyer. The answer, he said, was found in Rule 2.03 which provides: “The court may, only where and as necessary in the interests of justice, dispense with compliance with any rule at any time.”

[49] While Ricchetti, J., found that he had the discretion under Rule 2.03 to permit Ms. Cirillo to act personally in that litigation, he could not do so as there was no reasonable evidence as to why a lawyer could not be retained to represent litigation Guardian in the proceeding. It appears that in response to this question, Cirillo submitted that lawyers “worked together”, and that she preferred “not to use a lawyer”, both of which Ricchetti, J., held were not sufficient reasons to overcome the policy considerations for the requirement to have a lawyer in cases where litigation guardian is appointed.

[50] Ms. Cirillo argued before me that she spent $190,000 on lawyers to date, although no evidence was produced in support of this submission. I cannot accept this submission.

[51] Ms. Cirillo argued that the rules were made for the court’s purposes and for the benefit of lawyers. Further, no one had raised her capacity to represent her mother or the estate. It should have been addressed earlier. It is not her fault. In her view, Daley, RS J ought to have addressed this issue in March 2021.

[52] The Preianos’ took no position, although they raised the question that if Grace Cirillo did not act on behalf of Antonia and the Estate of Giuseppe, who would? They conceded that there was likely no solicitor who would act, others having departed because of Ms. Cirillo’s allegations that they were negligent and did not follow instructions.

[53] At the end of the argument, I advised the parties that I would release my decision on this point as part of my final trial decision.

Result

[54] Ms. Cirillo has no standing to act in person in this action. Accordingly, I strike the Defences of Antonia and the estate of Guiseppe Cirillo and grant default judgment to the Preianos subject to damages, which I address below.

The Law and Analysis

[55] Rule15.01(1) is clear. Someone who acts as a representative plaintiff “shall be represented by a lawyer.” While the court has discretion to permit a non-lawyer to act for a corporation under subrule (2) and any other party to a proceeding may act in person or be represented per subrule (3), subrule (1) affords no discretion to the court to permit the representative plaintiff to act in person (see: Swan v The Toronto District School Board, 2017 ONSC 5212 at para 3, 6).

[56] The main reason behind the rule barring representative plaintiffs from self-representing in litigation is that the legislature has conferred the power to licence people to practice law exclusively to the Law Society. Were the court to grant representative plaintiffs the right to act in person on behalf of those whom they represent in a specific piece of litigation, the court would, in effect, be licensing individuals for limited purposes (see: Re Letros, 1972 CanLII 606 (ON CA), [1972] 2 O.R. 589, 26 D.L.R. (3d) 257 Ont. C.A.), at page 591, Gagnon et al. v. Pritchard et al (2002), 2002 CanLII 41785 (ON CA), 58O.R. (3d) 577 (S.C.J.), at para. 26 et seq., Gotlibowicz v. Gillespie (1996), 1996 CanLII 11764 (ON SCDC), 28 O.R. (3d) 402, 47 C.P.C. (3d) 96 (Div. Ct.), at para 38 to 30, Pacquette v Hemish, 2017 ONSC 4505, at para. 19 to 21).

[57] Further, there are number of policy reasons why the approach taken by the Court of Appeal in Re Latros, is the correct one, including the legislature’s and the court’s wish to protect members of the public against the risks that arise when unqualified and unskilled individuals purport to represent the legal rights of others (see: Gagnon, supra, at para. 38).

[58] In my view, Rule 2.03 is of limited assistance. Those cases in which the court has used Rule 2.03 to relieve against Rule 15.01(1), the courts have assumed the application of Rule 2.03 (see, for example: Kamalanathan v. Centre for Addiction and Mental Health, 2019 ONSC 56, at para. 16,

[59] In Selkirk v Ontario, 2022 ONCA 478, at para. 11 to 15, the Court of Appeal used Rule 2.03 to permit Ms. Selkirk to act on her own behalf and on behalf of her late husband’s estate, notwithstanding rule 15.01, for three specific reasons: the respondent did not object either in the Superior Court or in the Court of Appeal, the concern that a beneficiary should not act on behalf of an estate when he or she was seeking money for herself did not apply, and, most crucially, Ms. Selkirk’s written and oral argument were both of a very high quality. Therefore, the court found that it was “necessary in the interests of justice” to dispense with strict compliance with rule 15.01.

[60] The Court of Appeal, in Selkirk, did not refer to its own decision in Letros. Accordingly, there is, on the face of it, contradictory appellate authority. I prefer the more detailed analysis in Letros.

[61] Rule 2.03 permits the court to dispense with compliance with any rule only where and as necessary it is in the interests of justice to do so.

[62] The general philosophy behind Rule 2.03 was Addressed in Wellwood v. Ontario Provincial Police et al., 2010 ONCA 386. The Court of Appeal said at para.s 33 to 35 that Rule 2.03 provides the court with the general discretion to relieve against the time requirements of any of the rules, at any stage of the proceeding, if one essential precondition is satisfied: the court must first conclude that such relief is necessary and in the interests of justice. In considering Rule 37.14 (1) the court noted that there is nothing in that rule that prohibited the application of Rule 2.03.

[63] In this case, the application of Rule 2.03 to Rule 15.01 is severely restricted, if not nonexistent.

[64] Based on the wording of Rule 15.01 (1), a court can rarely, if ever have recourse under Rule 2.03 to dispense with the compliance with Rule 15.01 (1).

[65] The Rules Committee clearly turned its mind to the circumstances in which the Court should have discretion to permit a representative person to self-represent. Rule 15.01 (1) says that a party to a proceeding who acts in a representative capacity shall be represented by a lawyer. The wording is mandatory. Discretion is given to the court in subrule (2) to allow an individual to represent a corporation, and a body of case law has developed with respect to how that discretion should be exercized. In subrule (3), “any other party to a proceeding” (in other words, any party other than a party under disability, a representative plaintiff, or a corporation), can self-represent or be represented.

[66] The legislature, having given the court discretion with corporations, and said that all others can self represent or have a lawyer, it clearly indicated that there is no discretion in the court with respect to permitting representative plaintiffs to self represent. Therefore, resort to Rule 2.03 to dispense with compliance with rule 15.01 (1) should be done rarely, if ever.

[67] In the alternative, applying the analysis from Selkirk, even if I had the discretion to allow Ms. Cirillo to self-represent by applying Rule 2.03, I would not exercise it. The crucial factor in the Court of Appeal’s mind in Selkirk was the high quality of the representation that Ms. Selkirk provided. As is clear from elsewhere in this judgement, the quality of Ms. Cirillo’s representation was of poor . Her acting in person, complicated and lengthened the trial unnecessarily.

[68] In my view, the inherent jurisdiction of the court is of no assistance. The inherent jurisdiction of the court is not such that a judge of the court can make an order negating the unambiguous expression of the legislatures will (see: Baxter Student Housing Ltd. v. College Housing Cooperative Ltd., 1975 CanLII 164 (SCC), [1976] 2 S.C.R. 475 at p. 480)

THE MERITS

The Plaintiffs and Their Onus

[69] The plaintiffs have proved, on the balance of probabilities, that on the face of the document, there is an enforceable APS.

[70] I am satisfied that the plaintiff’s approached Finelli and on 19 August 2013, they made an offer to purchase the elder Cirillo’s house, and gave Finelli the plaintiff’s personal cheque for $25,000 for the down payment. After a couple of sign backs, by 21 August 2013, there was a completed and enforceable APS. The APS was without conditions, for instance with respect to inspection or financing.

[71] The Preianos received counteroffers and signed agreement from Finelli, the elder Cirillo’s agent. They are entitled to rely on the agent to present offers that are properly signed. If there is fraud or misrepresentation of the agent that leads to the presentation of an offer or sign back by the elder Cirillo’s, as the Cirillo’s argue, that is an issue between the Cirillo’s and Finelli (see: Vandenberg v. Wilken, 2017 ONSC 6665, at para 104).

[72] It is not incumbent upon the plaintiff to prove a negative – that the APS was not forged, or that the agent did not make a misrepresentations or coerce the Cirillo’s into signing. It is incumbent upon the elder Cirillo’s to provide evidence of such things (see: Guarantee Company of North America v. Barillari, 2015 ONSC 4465, at para. 15).

[73] I am also satisfied that the Preiano’s were ready willing and able to complete the transaction. They paid $25,000 in a deposit. They had a mortgage commitment. By 20 November 2013, they transferred to their lawyer the cash difference between the APS price, and the mortgage commitment and down payment. That the mortgagee wanted an inspection that was not completed is of no moment since the Cirillos terminated the APS before the inspection requested by the mortgagee could be completed.

[74] At all material times, the elder Cirillos acted through their agent, Finelli. The Preiano’s had no reason to suspect Finelli. All indications are that he was acting properly as agent for the Cirillo’s.

Anticipatory Breach

[75] I also find that the Cirillos committed anticipatory breach of the APS.

[76] The law regarding anticipatory breach was concisely set out by Charney, J in Sivasubramaniam v. Mohammad, 2018 ONSC 3073, at para.s 58 to 63. The applicable legal principles are as follows:

a) Anticipatory breach is sufficient to justify the termination of the contract.

b) To have an anticipatory breach, one party, by express language or conduct, must repudiate the contract or show the intention not to be bound by the contract before performance is due. The words or conduct must show that the repudiating party has absolutely and unconditionally renounced its contractual obligations. The actor’s words or deeds must be clear, absolute, and certain.

c) The test is whether a reasonable person would conclude that the breaching party no longer intends to be bound by it. In other words, the court must ask whether the breach deprives the innocent party of substantially the whole benefit of the contract.

d) The test for anticipatory breach is an objective one based on a consideration of all the surrounding circumstances.

e) The intention to not be bound by the contract may be shown by a refusal to perform it even though the party refusing to perform mistakenly thinks that he is exercising a contractual right.

f) When confronted by an anticipatory breach, the innocent party can either accept the repudiation and treat the agreement as that as being at an end or decline to accept the repudiation and insist on performance. The innocent party must make the selection and communicate it clearly to the repudiating party within a reasonable time.

[77] In her letter to the Preianos’ lawyer of 14 November 2013, the elder Cirillo’s lawyer repudiated the APS in clear and unequivocal language. She outlined several defects in the APS and problems with respect to its creation, including the allegation that the deposit was not delivered within the time specified in the APS itself. She then said: “It is for these reasons, that my clients deem this to be a (sic) invalid agreement of purchase and sale and an improper one which (sic) no transaction can close on November 20, 2013.” Further, she said that because of the improprieties on the part of the agent, the undue influence and pressure upon the elder Cirillo’s to sign the APS, and the anomalies and inconsistencies in the document itself, the elder Cirillos cannot “proceed with this as some ‘valid’ transaction” and they refused to return the deposit.

[78] In cross-examination, Ms. Cirillo confirmed that she instructed the elder Cirillo’s lawyer to write the letter of 14 November.

[79] The Preianos’ lawyer responded on 18 November 2013 and, in clear language, said that the Preianos considered the 14 November letter as an anticipatory breach of the APS, and said that they would stand on their rights and pursue all legal remedies available to them, including specific performance, damages, and a certificate of pending litigation.

The Defences

[80] Whether the plaintiffs succeed, however, depends on the success of the defences raised by the Cirillo’s. These defences are:

a) Neither of the elder Cirillos had the capacity to enter into the agreement of purchase and sale;

b) neither of the elder Cirillos had the linguistic ability and education or sophistication to understand what they were doing;

c) Giuseppe Cirillo did not sign or initial many parts of the APS;

d) the agent, Finelli, and Elena Cirillo coerced the vendors into enter entry into the APS;

e) the agent was unlicensed and not insured, and therefore not entitled to provide the services he provided;

f) Finelli had a dual agency such that the plaintiff’s and the defendants were all his clients, and he preferred the interests of the plaintiffs over the defendants;

g) the deposit was not delivered in time;

h) the plaintiffs never tendered, nor were they in the position to tender;

i) the sale was not for fair market value.

[81] I address each of these defences below. I dismiss all of them. In doing so, I make findings of fact, as necessary, based on all the evidence.

Defence #1 Neither of the elder Cirillos had the capacity to enter into the APS.

[82] The Preianos never met the Cirillo’s. At all times they dealt with the Cirillo’s through their agent, Finelli. They had no evidence with respect to, or reason to suspect that either of the Cirillo’s were not competent to enter into the APS.

[83] Ms. Cirillo offered some evidence with respect to her parents medical and mental conditions. I do not accept this evidence.

[84] The capacity of people over 18 to contract is presumed and a person is entitled to rely upon that presumption with respect to another person unless he or she has reasonable grounds to believe that the other person is incapable of entering into the contract (see: Substitute Decisions Act, 1992, S.O. 1992, c. 30, section 2(1) and (3). The onus is on the person alleging lack of capacity to prove it on a balance of probabilities.

[85] Evidence with respect to mental capacity is given by experts, usually. Ms. Cirillo eventually and reluctantly conceded that she is not qualified to give expert opinions about the medical or psychological health or cognitive abilities of her parents. The exception to this is her observations as a lay person. She insisted, however, that she has read many books on medical issues and therefore has some ability to make her own diagnoses. I reject her statements about her capacity to give opinion evidence.

[86] The documentary evidence that Ms. Cirillo did proffer about the elder Cirillos was not properly before the court. Medical reports are admissible under the procedures set out under section 52 of the Evidence Act, RSO 1990 C. E. 23, which Ms. Cirillo did not follow in this case. The reports were not filed in accordance with section 52 nor were the doctors called or made available for cross-examination (see: Innarella v. Corbett, 2015 ONCA 110, para. 131).

[87] The Rules of Civil Procedure or rules of evidence do not allow for the filing of medical reports and hospital notes and records by making them as exhibit to an affidavit as Ms. Cirillo has done. Medical reports and records are inadmissible as they are hearsay. Reports of health professionals are made admissible at trial when the party proffering them gives notice to the opposing party and obtains leave of the court, under s. 52 of the Evidence Act, R.S.O. 1990, c. E.23. Similarly, hospital notes and records are made admissible at a trial, on appropriate notice, as business records under s. 35 of the Act.

[88] The medical reports and hospital notes and records are before the court on this trial because they have been made exhibits to Ms. Cirillo’s affidavits. They were not provided as a result of the application of ss. 52 or 35 of the Evidence Act or compliance with rule 39.01(4) (see: Buffa v. Gauvin, 1994 CanLII 7276 (ON SC), [1994] OJ No 1158, 18 OR (3d) 725, para 4).

[89] Even if the medical evidence was admissible, it does not support the proposition that either Giuseppe or Antonia were incompetent at the time the APS was negotiated in August, 2013.

[90] Ms. Cirillo says that as of August 2013 Antonia was 75 years of age and was diagnosed with deafness and her right ear, and was suffering from dementia. The medical documents indicate, however, that Antonia became incompetent long after the APS was entered into. Indeed, her incompetence was not declared, and the litigation guardian appointed until 2019. She continued to instruct lawyers from 2013 to 2015. Dr. Attalla, her family doctor says that he first suspected or had concerns about Antonia’s memory decline in late 2014, but does not opine that in August 2013 that she was incompetent.

[91] Ms. Cirillo testified that her father was old and infirm, in a wheelchair, and had suffered from hydrocephalus for which he underwent brain surgery in 2012. She reported that this condition was associated with Alzheimer’s disease. He underwent surgery to install a shunt to relieve the fluid pressure and was discharged by October 18, 2012. Further, she testified that her father was legally blind as of 2007.

[92] Mr. Cirillo’s family doctor, Dr. Pontarini’s letter is dated 9 May 2018. He indicated that as of September 2012, a year before the APS was entered into, another doctor, who did not provide evidence, commented that Giuseppe Cirillo suffered from mild cognitive problems. He was referred to further assessments. The opinion does not state anything with respect to Giuseppe Cirillo’s competence as of the date of the negotiation and finalizing of the APS.

[93] His neurologist, Dr. Marmor expressed the opinion that he doubted that Mr. Cirillo would have been capable of making any independent, informed decision regarding financial affairs. This appears to relate to his capacity at October 2012 when the shunt was inserted to normalize his hydrocephaly. It is unclear what his status was as of August 2013 in this doctor’s opinion.

[94] In any event, even if Guiseppe Cirillo was not competent to enter into the APS, Grace Cirillo testified that Antonia Cirillo had a Power of Attorney with respect to Mr. Cirillo’s property and was able to make decisions on his behalf in August 2013.

[95] Ms. Cirillo had no evidence with respect to whether Finelli knew of the elder Cirillos’ alleged inability to understand what they were doing.

[96] Ms. Cirillo had no evidence with respect to whether Finelli knew of the elder Cirillos’ alleged incapacity to contract.

[97] Finally, it is significant that Elena gave no evidence about her parents’ incapacity during August 2013.

Defence #2: Neither of the elder Cirillos had the linguistic ability or education or sophisticationto understand what they were doing

[98] Ms. Cirillo said that her parents were simple, hard-working immigrants, with limited education and limited English language skills. She said that neither of her parents would have understood the APS and the negotiations surrounding it. Further, she says that her mother told her that she did not understand the process and the APS.

[99] Ms. Cirillo has the onus of proving that the elder Cirillos’ language or education insufficiency, or lack of sophistication was great enough that they could not have formed a contract.

[100] What Antonia said to Grace Cirillo is not admissible.

[101] Ms. Cirillo’s opinion about her parents’ education, sophistication, or linguistic ability is admissible as the opinion of a lay person, only. She led no expert evidence.

[102] Grace Cirillo conceded that Elena Cirillo and Finelli were both involved in the process of negotiating and finalizing the APS. Grace Cirillo was not present during any of the negotiations. Indeed, her involvement did not arise until October 2013. She has no idea what went on between Giuseppe, Antonia, Elena, and Finelli. She has no idea who may have explained the process to Giuseppe and Antonia, and whether they acknowledged that they understood what they were being told.

[103] Ms. Cirillo had no evidence with respect to whether Finelli knew of the elder Cirillos’ alleged inability to understand what they were doing.

[104] Finally, it is significant that Elena Cirillo gave no evidence about her parents’ understanding, or lack thereof, about the sale of their home, and the process leading up to the APS.

Defence #3: Giuseppe Cirillo did not sign or initial many parts of the APS and other transaction related documents.

[105] Ms. Cirillo said in her 8 May 2019 affidavit that there were three places which her father’s signature or his initials appeared, which were forged. In her cross-examination, she changed her position slightly saying that she did not know whether the signatures or initials were placed by her father or were forged. She said that they looked different from Giuseppe’s normal signature or initials.

[106] These incidents of potentially forged signatures or initials are:

a) on the acknowledgement by the vendor;

b) on the listing agreement; and

c) on the APS.

[107] With respect to the signatures and initials on the Acknowledgement by the vendor and the Listing Agreement, Ms. Cirillo conceded that these documents are unrelated to the APS and the claim brought by the plaintiff’s. Those are documents are between the elder Cirillo’s and the agent and brokerage. Those documents are not contracts that involve the Preianos.

[108] Ms. Cirillo said that the signature on the APS at the “confirmation of acceptance” is not her father’s. It looked “weird”.

[109] This defence must fail for two reasons.

[110] First, a party is entitled to rely on a signed contract when it is witnessed, absent evidence that the signatures are fraudulent or otherwise not authorized. That onus of proof rests on the party alleging the improper signature. It is not up to the party relying on the prima facie valid contract to prove the negative – that the signatures are proper and not a fraud (see: Guarantee Company of North America v. Barillari, 2015 ONSC 4465, para. 15).

[111] Second, the evidence supports the conclusion, which I draw, that the impugned signatures or initials were that of Giuseppe Cirillo or were applied by Antonia Cirillo under a Power of Attorney for Giuseppe Cirillo.

[112] Ms. Cirillo conceded that she did not know if the purported signature by her father on the “confirmation of acceptance” on the APS was, in fact, her father’s signature. Indeed, she conceded in cross examination that she could not say under oath whether any signature or initials were or were not her father’s.

[113] Further, Ms. Cirillo conceded that she was not present for any of the negotiations surrounding the creation of the APS or for its signing. On the face of the APS, all of the signatures were applied to the APS over the course of one or two days, for neither of which Ms. Cirillo was present. She conceded it was possible that the signatures and initials that she thinks were not her father’s were placed there by her mother who had an operating Power of Attorney.

Defence #4: The agent, Finelli, and Elena Cirillo coerced the vendors into enter entry into the APS.

[114] There is no evidence that the elder Cirillo’s were coerced or forced to sign the APS. Ms. Cirillo was not present when the APS was signed and finalized. Elena Cirillo was, but she adduced no evidence with respect to what transpired in the negotiation and forming of the APS. Finelli was also present for the negotiations culminating in the APS, but no one produced evidence from him.

Defence #5: Finelli was unlicensed, uninsured, and therefore not entitled to act as a real estate agent or broker.

[115] There is no admissible evidence to support this proposition. Ms. Cirillo referred to various web sites she had searched, and research she had done. Her evidence, on this point, however, was inadmissible as it was hearsay. Even if it was admissible, it did not support her contention.

[116] Further, whether Finelli was licenced or insured to act as an agent or broker is an issue between Finelli and the Cirillos. It does not concern the Preianos.

[117] The admissible evidence indicated that Finelli had a written listing agreement. This gave him authority to act as agent, to list the house, to solicit and receive offers, to present offers to the elder Cirillos, to present counter offers to prospective purchasers, and otherwise to act on behalf of the elder Cirillos (see: Silverman v. Legree, (1919), 1919 CanLII 504 (ON CA), 47 DLR 713 (Ont. C.A.). Further, he held himself out to the Preianos as a fully qualified real estate agent. They had no reason to suspect otherwise. Based on the evidence of the Preianos, I find that Finelli had ostensible authority as the Cirillos’ real estate agent.

Defence #6: Finelli had a dual agency. The plaintiffs and the defendants were all his clients, but he preferred the interests of the plaintiffs over the defendants.

[118] Ms. Cirillo advanced this argument based on her reading of the Confirmation of Cooperation and Representation document that all of the parties signed on 20 August 2013. Ms. Cirillo says that the parties consented in this document to the brokerage representing more than one client for the transaction.

[119] She misunderstands the Confirmation of Cooperation and other relevant documentation. The Confirmation of Cooperation document says, at the bottom, “The Seller/Buyer consent with their initials to their brokerage representing more than one client for this transaction.” However, in the middle of the page, the document also says: “It is further understood and agreed that: The Listing Brokerage is providing Customer Service to the Buyer.”

[120] Other documents signed at the request of the brokerage and Finelli, which were provided to the elder Cirillo’s, confirm that Finelli only provided customer service to the Preianos. These include:

a) The Acknowledgement signed by the brokerage and the elder Cirillo’s on 20 August 2012 in which the elder Cirillo’s acknowledged that the brokerage and broker are representing their interests but that they accepted and understood that the brokerage might represent and/or provide customer service to other sellers and buyers.

b) The Listing Agreement dated 9 August 2013, by which the elder Cirillos agreed that the brokerage had provided them with information explaining agency relationships including the formation of the seller representation agency, buyer representation, multiple representation, and customer service. In that agreement, the elder Cirillo’s understood that unless they were told otherwise, a cooperating brokerage represents the interests of the buyer, not the selling brokerage or broker. Further, under the heading “multiple representation” the elder Cirillo’s acknowledged that the listing brokerage and broker may enter into representation agreements with buyers, and if it wish to do so the listing broker would obtain the seller’s written consent to represent both the seller and the buyer in the transaction at least before any offer to purchase is submitted or presented. Under the heading “multiple representation customer service”, the elder Cirillo’s understood and agreed that the brokerage could also provide customer service to other sellers and buyers, provided that it notified the Sellers in writing before any offers made.

c) The Acknowledgement signed by the Preianos on 20 August 2013 indicated that the brokerage was “Not representing my interests to be documented in a separate written customer service agreement, but will act in a fair, ethical, and professional manner.”

d) In the Buyer Customer Service Agreement between Royal LePage and the Preianos dated 20 August 2013, under the heading “representation and customer service”, the Preianos acknowledged that the brokerage provided them with written information explaining agency relationships, representation of parties and customer service. The Preianos acknowledged that the brokerage would provide them with customer service and would not represent their interests in the transaction. Further, they acknowledged that the sellers are the brokerage’s client and the brokerage owes the primary duties to the seller to protect, and promote, their interests. When providing services to the buyer, the brokerage’s duties included the duty to be ethical, to exercise care when answering questions and providing information, and to not misrepresent.

Defence #7: The deposit was not delivered in time

[121] Mr. Preiano averred in his Affidavits and reinforced in cross-examination that when they made their initial offer on 19 August 2013, he wrote a personal cheque for $25,000 for the deposit. That cheque and the offer were given to Finelli. Mr. Preiano said that when the offer became firm upon the elder Cirillo’s confirmation of acceptance on 21 August 2013, Finelli told him that he had to provide a certified cheque for the $25,000 deposit. The APS provided that the deposit had to be paid within 24 hours of acceptance of the APS, by “negotiable cheque” payable to Royal LePage Realty Centre, which the broker would hold in trust pending completion or termination of the APS. The APS did not define “negotiable cheque” to be a certified cheque.

[122] Mr. Preiano said that he obtained the certified cheque on the 22^nd and took it to Finelli’s office. Finelli was not there. Finelli and Mr. Preiano spoke later that day to discuss delivering the cheque. Finelli said that he would pick up the check on the 23^rd, and did so at Mr. Preiano’s jobsite.

[123] The Preianos position is twofold. First, they delivered the deposit as required by the APS by virtue of the personal cheque given with the offer when it was made. Second, irrespective of the personal cheque, they argue that they attempted to deliver the certified cheque within the 24 hours stipulated in the APS. The authorized agent for the elder Cirillo’s, Finelli, in essence extended the period by another 24 hours by saying he would pick up on 23 August.

[124] The trust ledger from the brokerage indicates that the certified cheque was negotiated and deposited in the brokerage’s trust account to the credit of the transaction.

[125] Mr. Perino said that Finelli never returned his personal cheque and it was never negotiated. He said that during the litigation, Finelli said that, months later, Finelli found the personal check at the bottom of his briefcase. Finelli was not called to give evidence at the trial. Accordingly, Mr. Preiano’s evidence in this respect is hearsay.

[126] Ms. Cirillo argues that personal cheque is a fraud. She insisted that no personal cheque was delivered in August 2013. Rather, the cheque was created in October or November 2013 in order to compensate for the fact that the only original deposit check – the certified cheque – was delivered a day late.

[127] Ms. Cirillo bases her thesis that the personal check was created in October or November 2013 to cover up for the fact that the certified cheque was delivered 24 hours too late on the following assertions:

a) In the correspondence between the lawyers for the parties of 14 and 18 November 2013, the lawyer for the Preianos referred only to the certified cheque that was delivered on 23 August. There is no mention of the personal cheque. Mr. Preiano conceded that he saw the letter that his lawyer wrote and did not corrected it with respect to the delivery of the personal cheque.

b) The banking records of the plaintiff’s indicate that there was not $25,000 in the account on which the personal cheque was drawn.

c) Personal cheque was never negotiated and the money was never deposited in a trust account.

d) Neither Finelli nor the broker issued a receipt for the personal cheque at the time it was written, as they did for the certified cheque.

e) There is no evidence that the Preiano’s asked for the personal cheque back once the certified cheque was given to Finelli, nor is there evidence thatFinelli returned the personal cheque to the Preianos.

f) The first time the personal cheque was produced was three or four months after the APS is entered into.

[128] I agree that the plaintiff’s approach to the personal cheque was, at best, lackadaisical. It makes no sense that a sophisticated general contractor like Mr. Preiano would leave a negotiable instrument for that sum, drawn on his personal account, out in an unknown location. The risk was too great that it would be negotiated.

[129] Notwithstanding the concerns I have about Mr. Preiano’s lackadaisical approach to the extant personal cheque, I do not accept the Cirillo’s position that the personal check was created long after the APS became binding in order to cover up the fact that the deposit was never made in accordance with the term of the APS. I say this for a number of reasons including:

a) My credibility assessment is such that in the absence of corroborating evidence, I cannot accept Ms. Cirillo’s evidence. Her position appears to be based on supposition and her a priori belief, unsubstantiated, that there was a conspiracy to defraud her parents of their house.

b) Fraud is a serious accusation. The evidence required to sustain such an allegation must be clear and convincing (see: Lunney v. Kuntova, 2009 CanLII 7173 (ON SC) para 60). Ms. Cirillo’s evidence is not clear and convincing. Ms. Cirillo has the burden to prove on a balance of probabilities that the personal cheque was a fraud. Because fraud is a serious, quasi-criminal allegation, the quality of the evidence must be assessed taking into account the degree of proof required. Where the allegation is fraud, the scrutiny of the evidence is heightened in the sense that the judge must determine whether the evidence is clear and cogent enough to do more than merely tilt the scales. The more serious the allegation and its consequent is, the greater degree of proof is required (see: Kolesnykov v. ICBC, 2004 BCSC 173, para.s 8, 29 to 33).

c) Ms. Cirillo conceded that she was not present to see whether the cheque was delivered with the offer to Mr. Finelli, or what happened with that personal cheque afterward. Accordingly, she cannot say, under oath that Finelli never got the cheque.

d) She appeared to concede before the Court of Appeal when the Court of Appeal overturned Barnes, J.’s summary judgement decision, that the personal cheque existed.

e) She appeared to concede in her pleading that the personal checque existed.

f) With respect to the Court of Appeal and her pleading, she blames her lawyer’s for not stating the facts appropriately.

Defence #8: the plaintiffs never tendered, nor were they in the position to tender

[130] The Cirillo’s argued that the plaintiffs were not in a position to tender because they did not transfer the full cash value of the purchase to their lawyer, and their mortgage commitment of $400,000 was never made firm because they never obtained the inspection that the lender wanted.

[131] In this case, the Preianos were not required to tender. There was a clear, unequivocal renunciation of the contract by the elders Cirillos. 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 (see: McCallum v. Zivojinovic, (1977), 1977 CanLII 1151 (ON CA), 16 O.R. (2d) 721 at p. 723 (C.A.), Dacon Const. Ltd. v. Karkoulis, 1964 CanLII 252 (ON SC), [1964] 2 O.R. 139 (Ont. H.C.).

[132] Setting aside that the Preianos were not required to tender given the elder Cirillos’ unequivocal repudiation of the contract, they had shown that they were ready, willing and able to close. They had paid $25,000 in deposit. They put $75,000 into their lawyer’s trust account before the closing, and they had a mortgage commitment for $400,000. The fact that they did not have the inspection required by the lender is of no moment. The Cirillos repudiated the contract before the inspection deadline passed.

Defence #9: the sale was not for fair market value.

[133] There is no evidence of this.

Remedy

[134] The Preianos argued that they are entitled to specific performance, and alternately, to damages. They argued that they have no obligation to mitigate, in the circumstances.

Specific Performance

[135] The goal of contract remedies is to put the injured party in the position he or she would have been in had the contract been performed. In contract cases, the remedies are usually damages and specific performance.

[136] Specific performance of a contract is an equitable remedy. If employed, it compels the performance of the contract.

[137] Until the Supreme Court of Canada’s decision in Semelhago v. Paramadevan, 1996 CanLII 209 (SCC), [1996] 2 S.C.R. 415, specific performance usually was granted in litigation over failed real estate transactions as real estate was assumed to be unique and damages inadequate.

[138] In Semelhago, the Court, at para. 21 held that the presumption that land was unique was no longer valid. At para. 22, the Court said:

Specific performance should, therefore, not to be granted as a matter of course absent evidence that the property is unique to the extent that its substitute would not be readily available. The guideline proposed by Estey J. in Baud Corp., N.V. v. Brook (sub nom Asamera Oil Corp. v. Sea Oil & General Corp.) 1978 CanLII 16 (SCC), [1979] 1 S.C.R. 633, with respect to contracts involving chattels is equally applicable to real property. At p. 668, Estey J. stated:

Before a plaintiff can rely on a claim to specific performance so as to insulate himself from the consequences of failing to procure alternate property in mitigation of his losses, some fair, real and substantial justification for his claim to performance must be found.

[139] In determining whether specific performance is warranted, the court must consider such things as the nature of the property and the inadequacy of damages as a remedy (see: Hoover v. Mark Minor Homes Inc., unreported decision of Leitch J. dated June 30, 1998 (Ont. Gen. Div.) at para. 46.

[140] It is also important to identify the factors or characteristics that make a particular property unique to a particular plaintiff. The question is whether the plaintiff has shown that the land rather than its monetary equivalent better serves justice between the parties. This will depend on whether money is an adequate substitute for the plaintiff’s loss and this in turn will depend on whether the subject matter of the contract is generic or unique. The onus lies on the party seeking specific performance to establish uniqueness on a balance of probabilities. The plaintiff does not have to prove a complete absence of comparable properties (see: John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd., 2001 CanLII 28012 (ON SC), [2001] O.J. No. 4397, Justice Lax wrote at para. 55 – 57).:

[141] Whether any parcel of land is unique is a factual determination that will depend on the circumstances in each case. There may well be subjective factors that cannot be reasonably duplicated by other lands, for example, when a purchaser bought the home he or she grew up in. Satisfaction of the uniqueness criterion may well provide what Estey J. described as “fair, real and substantial justification” for the claim to performance.

[142] The uniqueness inquiry has a subjective and objective aspect. Justice Lax in John E. Dodge Holdings Ltd. wrote at para. 59:

59. …While it is difficult to be precise about this, it strikes me that normally, the subjective aspect will be less significant in commercial transactions and more significant in residential purchases, unless the motivation in the latter case is principally to earn profit. In terms of the subjective aspect, the court should examine this from the point of view of the plaintiff at the time of contracting. … In some cases, there may be a single feature of the property that is significant, but where there are a number of factors, the property should be viewed as a whole….The court will determine objectively whether the plaintiff has demonstrated that the property has characteristics that make an award of damages inadequate for that particular plaintiff.

[143] Finally, the duty to mitigate applies to a breach of contract where specific performance is sought but declined. Where specific performance is denied, the strength of the plaintiff’s justification for seeking specific performance will inform what is reasonable for the plaintiff to do in mitigating: Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51 at paras. 2 and 36.

[144] With respect to the uniqueness of the property, the Preianos testified in their affidavits that they were looking for a temporary residence so that they could tear down and build anew on their existing lot of 1608 Cawthra Road. They wanted the temporary residence to be close to their existing home so that:

a) the children could be near their friends;

b) the house would hold all five family members;

c) the children could go to the same school;

d) they would be close to bus routes, the same programs for children, and their former neighbours;

e) the lot would have to be large, with a large yard, so he could store his hobby cars and some construction equipment on it;

f) he could work during the day on his contracting job and then work at the house in the evenings, during the 2 to 3 year estimated build time.

[145] Price was an important consideration.

[146] The Cirillo property was only about 200 m away from the Preiano’s existing property.

[147] In cross-examination, Mr. Preiano admitted that he had no idea whether the Cirillo house needed renovation in whole or in part to accommodate his family of five. He agreed he would have to renovate if necessary. Further, he conceded that he still had not achieved the necessary permits to tear down 1608 and begin construction. Obtaining the necessary permits, however, was a process in which he was already engaged. To generate income, and until he began to tear down 1608, Mr. Preiano agreed to rent part of the old house to a friend’s mother-in-law, while maintaining access to the property for himself.

[148] The Preianos recommended that I follow the decision of Charney J. in Sivasubramaniam v. Mohammad, 2018 ONSC 3073, in which he granted specific performance on the basis that the house was unique because it was located near the purchasers’ cultural community, it was detached, on a quite resentful street, with the backyard, located near the children’s schools and other amenities, was a short drive from the major highway to facilitate commuting, and was within a certain price range.

[149] Charney, J., Indicated that while most of those descriptions were generic description of a home in any modern subdivision, he accepted the applicant’s evidence that what made the home unique was proximity to the specific cultural amenities and was within the purchasers’ price range.

[150] Applying the objective\subjective standard, I do not find that the Cirillo property was unique such that specific performance would be appropriate.

[151] While the Preianos’ evidence mirrors that of the purchasers in Sivasubramaniam, I find that subjectively and objectively, the elder Cirillos’ property is not unique. The Preainos were not looking for a permanent dwelling. They were looking for something for 2 to 3 years, in which they could live while building their new house. There was no plan that they would permanently live in the Cirillo’s property.

[152] Further, at the time they purchased it, the Preianos had no idea whether, and if so the extent to which they might have to renovate the Cirillo house to accommodate them. Renovations that might be necessary would be those to make the home livable, pending completion of the house at 1608.

[153] Were the Cirillo’s property going to be the Preianos’ permanent residence, I would have found the property was unique, but the temporary nature of their tenure at the Cirillo property prevents it from being so.

[154] Specific performance may also be necessary where the defendant is unable to pay the damages award. In those circumstances, the remedy of damages can hardly be described as adequate (see: Injunctions and Specific Performance, R. J. Sharpe J., Loose Leaf Edition, Canada Law Book, November 2015, ss. 7.260; UBS Securities Canada Inc v. Sands Brothers Canada Limited (2009), 2009 ONCA 328, 95 O.R. (3d) 93 at para. 103; Mylonas Enterprises Limited v. Foundation Place Inc., 2013 ABQB 385, paras. 44, 45, 49, Dhatt v. Beer, 2020 ONSC 2729, para.s 43 to 46)

[155] In the Dhatt case, as an example, the evidence was sufficient to conclude that the vendor did not have sufficient funds to pay damages. They were selling the property because they were in debt. The vendor/wife could not work. The vendor/husband’s salary was being garnished. There were writs of execution filed against them. They could also not afford a lawyer. Browne, J., found that in the circumstances, damages would be a meaningless remedy. The plaintiffs would be forced to pursue the defendants for damages and, based on the evidence, would very unlikely be successful in collecting the damages awarded.

Adequacy of Financial Damages

[156] Damages in lieu of specific performance are assessed as at the date of trial (see: Semelhago, supra; Sivasubramaniam v. Mohammad, 2018 ONSC 3073). They also represent the difference between the contract price and the fair market value of the time of trial.

[157] In this case, the Preianos called John Cassan, whom I qualified to give expert evidence with respect to the fair market value of the Cirillo’s house. The Cirillo’s called no evidence on the value of the property.

[158] Were there any other qualified expert, I would have given Mr. Cassan’s evidence little weight. Mr. Cassan has over 50 years’ experience as an agent, broker and appraiser. However, he closed his office in 2018. He kept his licence, but did not renew any of his professional designations and memberships in professional organizations. He is no longer a member of or a Fellow of the Real Estate Appraisers Institute, nor is he a member of the Canadian National Association of Appraisers. He had been members of these associations in the past and had spoken at conferences and taught their courses.

[159] I qualified him on the basis that he had some expertise, notwithstanding that it might be dated. I accept his evidence as the only evidence on appraisals.

[160] Mr. Cassan provided appraised values of the Cirillo home at specific points in time: 19 August 2013, 7 December 2020, 15 August 2021, and at trial (9 January 2022). These values were:

a) $550,000 as of the 21 August 2013;

b) $1 million as of 7 December 2020;

c) $1,480,000 as of 21 August 2021;

d) $1,591,000 as of the date of trial.

[161] With respect to the trial date appraisal, Mr. Cassan delivered no updated report. Rather, he explained, orally, that he looked at the Toronto Real Estate Board market history for three years and noted an increase of 17.8% in prices over those years. There was also a 17.8% annualized increase from August 15, 2021 and January 15, 2022. This averaged to an increase of 1.5% per month, or a total increase in value for the Cirillo house of $111,000 between the value assessed as of 21 August 2021 and the trial.

[162] I do not accept Mr. Cassan’s oral updated appraisal at trial. To do so would be unfair and inappropriate given the case management efforts of then RSJ. Daley in this matter. I say this for the following reasons:

a) Mr. Cassan’s appraisal was given orally. There is no indication that Ms. Cirillo was given advance notice of the appraisal as of the trial date.

b) It was obvious from Daley, RSJ’s 29 October 2021 endorsement that Daley, RSJ, was attempting to crystallize the evidence for the trial. He permitted a further affidavit by Ms. Cirillo if it was served by 5 November 2021, and a plaintiff reply to that affidavit if served by 13 December 2021. He reiterated from his 16 June 2021 endorsement that no witness could be called at trial other than those on behalf of whom affidavits were filed with respect to their evidence in chief, which were served and filed in accordance with the case management endorsements.

c) In his 16 June 2021 case management endorsement, Daley, RSJ placed the matter into the trial sittings commencing January, 2022.

d) Knowing that a) the matter was placed into the January 2021 trial sittings, b) by November 2021, Daley, RSJ was trying to crystallize the evidence in this case, c) evidence in chief would be restricted to the affidavits of the witnesses, and d) Ms. Cirillo was self-representing in her representative capacity as the estate trustee for her late father and the litigation administrator for her incapable mother, the Preianos did not seek leave to file an updated report by Mr. Cassan.

[163] I assess damages as of Mr. Cassan’s most recent written report that the value of the house was $1.48 million. The Cirillo’s agreement of purchase and sale contained a price of $480,000. Therefore, the damages, as of the date of trial, are $1 million. I reduce that by the deposit of $25,000 for net damages of $975,000, and order that the $25,000 deposit that is in either the brokerage’s trust account or a lawyer’s, should be returned to the Preianos.

[164] The Preianos also seek $750,000 in other non-specific damages. These have not been specified or quantified. I make no award for them.

Are damages adequate?

[165] The evidence with respect to the assets and liabilities of the elder Cirillo’s is not very specific. It comes from the affidavits and cross-examination of Grace Cirillo, and is as follows:

a) Giuseppe and Antonia had only basic education in the Italian. Giuseppe worked in construction until he retired early due to injury. Antonia never worked outside of the house; she raised the children. The family lived on Giuseppe’s wages. The elder Cirillo’s’ first language was Italian. They learn to speak English on their own. Ms. Cirillo says that they could only read and write English at a basic level.

b) The elder Cirillo’s had spent $190,000 in legal fees to date, before having to self-represent.

c) In 2012, Giuseppe underwent surgery to install a shunt to drain fluid from his brain to address hydrocephalus. He died from renal failure in January, 2014. Antonia is now a widow.

d) Justice Price, in his 18 November 2015 endorsement noted that the elder Cirillo’s then counsel submitted to the court in response to the court’s questions that Antonia Cirillo was 76 years of age, and sick in bed,

e) the elder Cirillo’s had only pension income.

[166] In the Dhatt case, there was ample evidence of debts owed by the vendor’s which would have to have been cleared before funds would be available from the forced sale of the home to satisfy the judgment against them.

[167] The same cannot be said with the elder Cirillo’s. There is no evidence that they are wealthy people. There is no evidence, however, with respect to the elder Cirillos’ current debts.

[168] The parcel register that was attached to Mr. Preiano’s first affidavit indicates that the only encumbrance is a charge of $36,000 which was placed in the property in 1982 by the Toronto Dominion Bank. It does not appear to have been discharged. That parcel register was current to 9 April 2018.

[169] There is no evidence as to Antonia or the estate’s current income or other liabilities.

[170] Even were I to assume that the only assets that Antonia has aside from the house are modest personal property and perhaps modest savings, and her only income is her pension income, the evidence I do have indicates that but for a modest charge from 1982, which may very well have been cleared by now, assets in the form of the house, are available to satisfy any judgement.

Mitigation

[171] It is trite to say that a plaintiff must mitigate his or her damages and credit the savings to the defendants.

[172] As a general rule, a plaintiff will not be able to recover for those losses which he could have been avoided by taking reasonable steps. Where it is alleged that the plaintiff has failed to mitigate, the burden of proof is on the defendant, who needs to prove both that the plaintiff has failed to make reasonable efforts to mitigate and that mitigation was possible (Michaels v. Red Deer College (1975), 1975 CanLII 15 (SCC), [1976] 2 S.C.R. 324 (S.C.C.); Evans v. Teamsters, Local 31, 2008 SCC 20, [2008] 1 S.C.R. 661 (S.C.C.), at para. 30, and Southcott, supra, at para. 24).

[173] Where specific performance is sought but denied, the strength of the plaintiff’s justification for seeking specific performance will inform what is reasonable for the plaintiff to do in mitigating (see: Southcott, supra at paras. 2 and 36.

[174] The Cirillos led no evidence on the issue of the Preianos’ failure to mitigate.

[175] In this case, there appears to have been no attempt to mitigate.

[176] The Preianos, however, do not need to mitigate. They had a reasonable and fair chance of obtaining specific performance, although they did not get it.

[177] Second, the duty to mitigate is highly dependent on circumstances. In Azzarello v. Shawqi, 2019 ONCA 820, the defaulting purchaser offered to purchase the property for 10% reduction in the purchase price. The vendor refused. The purchaser argued the failure to mitigate.

[178] The Court of Appeal held:

[39] The duty to mitigate is derived from the proposition that the wronged party cannot recover from the defaulting party for losses that could reasonably have been avoided: S.M. Waddams, The Law of Contracts, 7th ed. (Toronto: Thomson Reuters, 2017), at p. 529. It cannot be reasonable for a vendor to be obliged to reduce the loss it claims from the defaulting party by reselling the property to that party, then suing him or her for the difference. This would offer no financial advantage to the defaulting party as that party would be obliged to pay the same amount, either way. Yet the defaulting party would secure a significant tactical and procedural advantage over the innocent vendor.

[40] The effect of endorsing the proposition advanced by the appellant would be to undermine the sanctity of the bargain by encouraging purchasers to default, particularly in a falling market, and to offer a lower price for the same property, leaving vendors with the risk and expense of recovering the balance of the original contract price in an action. The duty to mitigate does not go that far.

[179] In this case, the converse applies. To paraphrase the Court of Appeal, in a rising market, to require the innocent purchaser to mitigate by making a higher offer to the defaulting vendor than the that was contained in the original contract would be to undermine the sanctity of the bargain by encouraging vendors to default, to take advantage of a rising market, and to require the innocent purchaser to offer a higher price for the same property, leaving purchasers with the risk and expense of recovering the difference between the original and the subsequent purchase prices in an action. As the Court of Appeal said, the duty to mitigate does not go that far.”

Conclusion

[180] For the reasons stated above, the Plaintiffs’ action is allowed. Their claim for specific performance is dismissed but I award damages against the Cirillos of $975,000.00 and order return of the deposit to them.

[181] The Plaintiffs shall prepare a Judgment in accordance with these reasons. Ms. Cirillo’s approval is dispensed with.

[182] If the parties cannot agree as to costs, I may be spoke to on any day I am sitting, at 9 am, by Zoom.

Trimble, J.

COURT FILE NO.: CV-15-18888-00

DATE: 2022 08 29

ONTARIO

SUPERIOR COURT OF JUSTICE

B E T W E E N:

SONIA PREIANO and GIANLUCA PREIANO

Plaintiffs

• and -

ANTONIA CIRILLO by her litigation guardian, GRACE CIRILLO and THE ESTATE OF GIUSEPPE CIRILLO

Defendant

REASONS FOR JUDGMENT

Trimble J.

Released: 29 August 2022