COURT FILE NO.: FS-21-22627

DATE: 20220913

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

SURINDER KAUR UPPAL

Applicant

– and –

DALJIT SINGH

Respondent

Tyler Teichert, for the Applicant

Kenneth Younie, for the Respondent

HEARD: August 18, 2022

davies, J.

REASONS FOR DECISION

A. Overview

Overview

1Ms. Uppal and Mr. Singh separated in November 2020. Mr. Singh has been living in the matrimonial home since their separation. On January 4, 2022, Justice Kimmel ordered the sale of the matrimonial home. Justice Kimmel also made an order about the distribution of the proceeds from the sale of the home. She ordered 50 percent of the proceeds to be immediately released to Ms. Uppal, 25 percent to be released to Mr. Singh and 25 percent to be held in trust.

2Ms. Uppal now seeks an order compelling Mr. Singh to buy her interest in the matrimonial home. Ms. Uppal argues that she and Mr. Singh reached an agreement that he would purchase the matrimonial home but has breached that agreement. In the alternative, Ms. Uppal seeks an order varying the terms of Justice Kimmel’s order. She wants an order dispensing with Mr. Singh’s consent to list and sell the matrimonial home. She also wants more than 25 percent of the proceeds held in trust pending a claim for damages (or a claim for an unequal division of the net family property) against Mr. Singh in relation to the sale of the house.

3Mr. Singh argues that he and Ms. Uppal never reached a final agreement for him to buy her interest in the matrimonial home. He argues they only reached an agreement in principle that is not enforceable. Mr. Singh also takes the position that even if a binding agreement was reached, he is not able to purchase the matrimonial home and should not be compelled to do so. Mr. Singh wants the house listed and sold as quickly as possible. He denies he has frustrated the sale of the home and opposes Ms. Uppal’s request to dispense with his consent to list and sell the home.

4There are four issues for me to decide on this motion:

a. Did Ms. Uppal and Mr. Singh reach an enforceable agreement for Mr. Singh to buy the matrimonial home?

b. If Ms. Uppal and Mr. Singh did reach an enforceable agreement, is specific performance an appropriate remedy?

c. If Mr. Singh is not required to buy Ms. Uppal’s interest in the matrimonial home, should I dispense with his consent to list and sell the matrimonial home because he has frustrated the sale to date?

d. If Mr. Singh is not required to buy Ms. Uppal’s interest in the matrimonial home, should more than 25 percent of the proceeds of the sale be held in trust?

5I find that Ms. Uppal and Mr. Singh did not reach a final agreement for him to purchase the matrimonial home. They did not agree on all the essential terms of such an agreement. I am not prepared to dispense with Mr. Singh’s consent to list and sell the property. I will, however, impose additional conditions to ensure that he cannot frustrate the sale of the home. Finally, I am satisfied that it is appropriate to vary Justice Kimmel’s order and direct that 50 percent of the proceedings from the sale of the property be held in trust pending an agreement by the parties or a further court order.

B. Was there an enforceable agreement for Mr. Singh to buy the matrimonial home?

Was there an enforceable agreement for Mr. Singh to buy the matrimonial home?

6Ms. Uppal takes the position that she and Mr. Singh reached a binding agreement that he would purchase the matrimonial home for $1,250,000. The parties did not sign a written agreement of purchase and sale. Nor did they sign a contract setting out the terms of the sale of Ms. Uppal’s interest in the matrimonial home. If there is an agreement, it is captured in correspondence between Mr. Singh’s and Ms. Uppal’s lawyers.

7Parties negotiating a settlement or contract often discuss proposed terms as they work towards a final agreement. If, during those discussions, the parties reach an agreement on all essential terms, the agreement will be binding even if the agreement is not or has not yet been recorded in a formal document signed by the parties: Bogue v. Bogue, 1999 CanLII 3284 (ON CA), [1999] O.J. No. 4310 (CA) at para. 12, Ward v. Ward, 2011 ONCA 178 at para. 53. An exchange of correspondence between counsel can create an enforceable agreement between their clients if the correspondence discloses a clear meeting of the minds between the parties on all essential elements of an agreement: Geropoulos v. Geropoulos, [1982] O.J. No. 3179 (CA) at para. 2.

8The test for whether there has been a meeting of the minds is objective: would it be clear to an objective, reasonable bystander apprised of the relevant facts that the parties intended to form a contract and are the terms of the contract reasonably clear? To decide whether there has been a meeting of the minds, I can consider the words and actions of the parties as well as any proof of reliance on the agreement by either party: Calvan Consolidated Oil & Gas v. Manning, 1959 CanLII 56 (SCC), [1959] S.C.R. 253 at 261, Osorio v. Cardona, 1984 CanLII 364 (BC SC), and Canada Square v. VS Services Ltd., 1981 CanLII 1893 (ON CA).

9The issue for me is whether there was a meeting of the minds between Ms. Uppal and Mr. Singh on all the essential terms of an agreement to sell Ms. Uppal’s interest in the matrimonial home. In my view, there was not. I find that they reached an agreement on some terms but did not discuss or agree on other essential terms.

10Justice Kimmel ordered the sale of the matrimonial home on January 4, 2022. The house was finally listed for sale on March 18, 2022 for $1,199,000. Ms. Uppal and Mr. Singh received three offers on the home. Ms. Uppal rejected the first offer. The second offer expired before Ms. Uppal could make a counteroffer. The last offer was received on May 4, 2022 with a purchase price of $1,120,000. Ms. Uppal wanted to accept the third offer. However, that offer expired before Mr. Singh responded to the offer and the prospective buyers refused to extend their offer.

11After the last offer expired, Mr. Singh and Ms. Uppal engaged in discussions about Mr. Singh buying the matrimonial home. On May 18, 2022, Mr. Singh made a written offer through his lawyer to purchase the matrimonial home for $1,250,000 with a 60-day closing and a 2.5 percent commission to the agent. On May 25, 2022, counsel for Ms. Uppal sent back a counteroffer. Ms. Uppal agreed to the purchase price of $1,250,000 and 2.5 percent commission. However, she asked for a $50,000 deposit. She also asked for proof of financing within five days and a 30-day closing.

12On May 31, 2022, Mr. Singh’s counsel wrote back to Ms. Uppal’s counsel and said, “I understand from Mr. Singh that he is working on finalizing financing and will provide proof of same within the next few days. He agrees to the other terms, and believes that he may be able to provide a shorter closing.” It is not clear what counsel meant when she said Mr. Singh was working on finalizing financing but otherwise agreed to the “other terms”. Does that mean Mr. Singh agreed to pay the $50,000 deposit as requested or was that part of the financing he was trying to arrange? Because counsel’s response is not clear, I am not satisfied Mr. Singh and Ms. Uppal had reached an agreement on the essential terms of the sale of the matrimonial home by May 31, 2022.

13There is no evidence that Mr. Singh gave Ms. Uppal a $50,00 deposit after the May 31, 2022 email from his counsel.

14Mr. Singh did not provide proof of financing within five days as Ms. Uppal requested in her counteroffer. According to Ms. Uppal’s affidavit, Mr. Singh’s counsel provided proof of a mortgage pre-approval on June 9, 2022. Ms. Uppal did not attach a copy of the mortgage approval or the correspondence from counsel to her affidavit. I do not know what, if anything, was said about the terms of an agreement in counsel’s communications about the mortgage pre-approval statement.

15Mr. Singh attached a mortgage pre-approval statement to his affidavit on the motion. The pre-approval was for the matrimonial home in the amount of $812,500 and it expired on June 3, 2022. If Ms. Uppal’s affidavit is accurate that her lawyer received mortgage information on June 9, 2022, Mr. Singh did not meet her condition to provide proof of financing within five days of May 25, 2022 and when he did provide information about financing, the pre-approval had already expired.

16I have no evidence of any correspondence between counsel about the sale of the matrimonial home between June 9, 2022 (when Ms. Uppal says she received the mortgage approval information) and June 22, 2022. There does not appear to be any follow up with Mr. Singh or his counsel about the $50,000 deposit. If the parties had reached an agreement, I would expect Ms. Uppal’s counsel to make inquiries about the deposit.

17Mr. Singh also made overtures to Ms. Uppal about buying the matrimonial home shortly after Justice Kimmel ordered the sale in January 2022. Those discussions fell through. Ms. Uppal now complains that Mr. Singh’s failure to make a firm offer in January and February 2022 delayed the sale of the house. Ms. Uppal also thinks that Mr. Singh was trying to frustrate the sale of the home in April and May 2022 when he failed to respond to the offers they received. Given Ms. Uppal’s ongoing concerns that Mr. Singh was trying to delay or frustrate the sale of the house, if she thought they had a final agreement, I would expect the agreement would have been reduced to writing and signed.

18On June 22, 2022, the lawyer who sent the May 18, 2022 offer wrote to Ms. Uppal’s counsel to say they were no longer acting for Mr. Singh. The letter also states, “It is our understanding that Mr. Singh wishes to proceed with the buyout of the matrimonial home at the agreed upon price of $1,250,000 and he is ready to close.” The letter also says that Mr. Singh was not willing to pay 2.5 percent commission to the agent. Mr. Singh’s former counsel asked Ms. Uppal’s counsel to send correspondence about the buyout of the matrimonial home to Mr. Singh’s real estate lawyer. By June 22, 2022, Mr. Singh’s former counsel was no longer authorized to bind him in any way. Nonetheless, counsel’s letter is further support for my conclusion that there was never a meeting of the minds between Ms. Uppal and Mr. Singh on the essential terms of their agreement.

19On June 27, 2022, Mr. Singh’s real estate lawyer wrote to Ms. Uppal’s counsel about the sale of the matrimonial home. Counsel said that Mr. Singh was not willing to pay the 2.5 percent commission because the agent was not involved in the transfer of Ms. Uppal’s interest to Mr. Singh. Counsel also said that Mr. Singh was no longer willing to pay $1,250,000 because an independent valuator had appraised the house at $985,000.

20I find that Ms. Uppal and Mr. Singh reached a final agreement on some terms of the sale of the matrimonial home but did not reach an agreement on all the essential terms. They did reach an agreement on the price. They seemed to agree the closing would be within 30 days but never fixed a closing date. I am not satisfied they reached an agreement on whether a deposit would be paid. And Mr. Singh never agreed to the term that required him to provide proof of financing within five days.

21In addition, there is no evidence they discussed other essential terms of the agreement, including who would assume responsibility for the line of credit on the property that Mr. Singh says is registered on the property. In fact, it is not clear whether the parties agree that there is a line of credit registered on the property. According to Mr. Singh’s sworn financial statement dated December 13, 2021, there was a home equity line of credit registered on the matrimonial home in the amount of $186,330.

22Ms. Uppal has made inconsistent statements in various sworn documents about whether there is currently a line of credit registered on the house. Ms. Uppal’s latest sworn financial statement (dated December 2, 2021) says the home equity line of credit on the matrimonial home had been closed. Her earlier financial statement (dated April 6, 2021) said that as of February 28, 2021, there was a $188,050 home equity line of credit registered on the matrimonial home. In the reply affidavit Ms. Uppal swore in support of this motion, she now says there is a home equity line of credit registered on the home in the amount of $188,050.

23How any encumbrances on the matrimonial home were to be paid or transferred is an essential term of an agreement about the transfer of title. I am not satisfied that Mr. Singh and Ms. Uppal would have agreed on that issue had it been addressed in their negotiations. This is further support for my conclusion that they did not reach a final binding contract.

24Ms. Uppal’s motion for a finding that there was an enforceable contract is, therefore, dismissed.

C. Would specific performance be an appropriate remedy if there was a binding agreement?

Would specific performance be an appropriate remedy if there was a binding agreement?

25Even if I were to have found that Mr. Singh and Ms. Uppal reached a binding agreement about the transfer of her share of the matrimonial home to him, I would not have ordered Mr. Singh to fulfil that agreement.

26If there has been a breach of contract, the remedy for that breach should, to the extent possible, put the claimant in the position he or she would have been in had the contract been performed. That can usually be accomplished through an award of damages. Specific performance is an equitable remedy that is only available in exceptional cases where damages will not be adequate to compensate the aggrieved party: Asamera Oil Corporation Ltd. v. Boud Corporation, 1978 CanLII 16 (SCC), [1979] 1 S.C.R. 633 at 644. Specific performance in relation to a failed real estate contract is only available if the property is sufficiently unique that a reasonable substitute is not available: Semelhago v. Paramadevan, 1996 CanLII 209 (SCC), [1996] 2 S.C.R. 415, at para. 22.

27Specific performance would not be appropriate in this case. If Mr. Singh breached an agreement to buy the matrimonial home from Ms. Uppal for $1,250,000 and if she suffered damages because the house is eventually sold for less than $1,250,000, she could be fully compensated for her loss with an award of damages.

D. Should I dispense with Mr. Singh’s consent to list and sell the matrimonial home because he has delayed and frustrated the sale?

Should I dispense with Mr. Singh’s consent to list and sell the matrimonial home because he has delayed and frustrated the sale?

28Ms. Uppal argues that Justice Kimmel’s order should be varied and I should dispense with Mr. Singh’s consent to list and sell the property because he failed to comply with Justice Kimmel’s order and frustrated the sale of the property when it was first listed.

29Mr. Singh denies that he has done anything to frustrate the sale of the matrimonial home.

30Justice Kimmel imposed conditions on Ms. Uppal and Mr. Singh in relation to the sale of the matrimonial home. Justice Kimmel ordered Ms. Uppal and Mr. Singh to “cooperate in executing any documentation required for the sale” of the property. She also ordered the parties to “comply with the directions of the real estate agent to ready the matrimonial home for sale, including but not limited to the listing price.” Finally, Justice Kimmel ordered the parties to accept any “bona fide arm’s length offer to purchase that falls within 95% of the list price, if accepting said offer is recommended by the real estate agent.”

31Shortly after the January 4, 2022 motion, Mr. Singh’s lawyer told Ms. Uppal that he intended to make an offer to buy the matrimonial home. No offer materialized and the house was finally listed for sale on March 18, 2022 for $1,199,000.

32Ms. Uppal and Mr. Singh received three offers on the home. The first offer for $1,020,000 was received on April 24, 2022. Ms. Uppal rejected that offer. The second offer for $1,080,000 was received on May 2, 2022. Ms. Uppal wanted to make a counteroffer to the prospective buyers, but the offer expired before Mr. Singh agreed to do so.

33A third offer for $1,120,000 was received on May 4, 2022. The real estate agent recommended that Ms. Uppal and Mr. Singh accept the May 4, 2022 offer, which had no conditions and was irrevocable for 48 hours. Rather than responding to the May 4, 2022 offer, Mr. Singh proposed that they switch real estate agents and increase the listing price to $1,395,000. Ms. Uppal could not unilaterally accept the third offer because it was not within 95 percent of the list price (it was 93.4 percent of the list price). Ms. Uppal, therefore, required Mr. Singh’s agreement to accept the offer. Mr. Singh never responded to the third offer and it expired.

34The matrimonial home has not been on the market since May 2022. The matrimonial home should be relisted immediately. While there were some difficulties and delays in the past, I find that both parties should continue to have a right to participate in the process of selling the home. But neither party should be able to frustrate a sale in future.

35The parties are still required to comply with the terms of Justice Kimmel’s January 4, 2022 order. They must cooperate in executing any documents required for the listing and sale of the property. They must also comply with the directions of the real estate agent, including in relation to the listing price. The clause allowing either party to unilaterally accept an offer within 95 percent of the list price also remains in place.

36In addition, the following conditions will apply:

a. Mr. Singh shall respond to any inquiry about the sale of the matrimonial home from Ms. Uppal or the real estate agent or the real estate lawyer within 24 hours.

b. Mr. Singh shall not unreasonably limit the times during which the matrimonial home can be shown.

c. Mr. Singh shall respond in writing to any offer received within 24 hours or before the offer expires, whichever period is shorter. If Mr. Singh fails or refuses to accept an offer that is recommended in writing by the real estate agent in accordance with this order, Ms. Uppal has sole authority to accept the recommended offer and to sign the agreement of purchase and sale.

d. Mr. Singh shall sign all closing documents not less than three (3) business days before closing. If Mr. Singh fails to sign the documents required for closing in accordance with this order, Ms. Uppal has sole authority to sign the closing documents.

E. Should more than 25 percent of the proceeds of the sale be held in trust?

Should more than 25 percent of the proceeds of the sale be held in trust?

37Justice Kimmel ordered that 50 percent of the proceedings from the sale of the matrimonial home be immediately released to Ms. Uppal. She ordered that 25 percent of the proceeds be released to Mr. Singh and 25 percent be held in trust.

38Ms. Uppal seeks to vary that order. She argues that 50 percent of the proceeds from the sale should be held in trust pending trial. She argues that even if Mr. Singh has not breached an agreement to purchase the matrimonial home, she may still be entitled to damages or an unequal division of the net family property to compensate her for the lost sale of the home in May 2022.

39Whether Ms. Uppal is entitled to damages or an unequal division of property is an issue to be resolved at trial once the matrimonial home is sold and the final sale price is known. Only then will the parties know whether there is even a viable argument that Ms. Uppal should be compensated in some way for the lost sale in May 2022. For example, if the matrimonial home sells for $1,120,000 as offered in May 2022 or more, there may not be any damages or any equitable argument for an uneven distribution of net family property. Nevertheless, to preserve Ms. Uppal’s ability to claim and recover damages for the lost sale in May 2022, 50 percent of the proceeds from the sale of the matrimonial home should be held in trust unless the parties agree otherwise.

40I am satisfied that it is appropriate to exercise my discretion and vary Justice Kimmel’s order. Clause 4(ii) of the Order of Justice Kimmel dated January 4, 2022 shall be struck and replaced with the following:

ii. From Mr. Singh’s notional one-half share of net sale proceeds:

1. $8,400 shall be paid to Ms. Uppal, which represents Mr. Singh’s retroactive spousal support payments from June 1, 2021 up to and including December 31, 2021; and

2. The balance shall be held in trust by the real estate lawyer acting on the closing of the sale, or such other trustee as the parties may agree to, pending further written agreement or court order.

F. Conclusion

Conclusion

41Ms. Uppal’s motion is granted in part only.

42Ms. Uppal’s request for a declaration that Mr. Singh breached an agreement to purchase the matrimonial home is dismissed.

43Justice Kimmel’s order of January 4, 2022 is varied in accordance with paragraphs 36 and 40 above. The balance of Justice Kimmel’s order remains in effect.

44The matrimonial home shall be listed for sale as soon as possible.

45The issue of whether Ms. Uppal is entitled to damages or an uneven division of net family property to compensate her for the lost sale of the matrimonial home for $1,120,000 in May 2022 is reserved to trial.

46The parties are encouraged to reach an agreement as to costs considering the findings made and the limited scope of Ms. Uppal’s success on the motion. If they are unable to reach an agreement on costs, they shall, by no later than Friday September 16, 2022, file written submissions of no more than 3 pages double spaced together with any relevant offers to settle.

Davies, J.