COURT FILE NO.: CV-21-00076407
DATE: 2022/09/19
SUPERIOR COURT OF JUSTICE – ONTARIO
BETWEEN: Aidong Gu and Liping Zhou
AND:
Connie Nothdurft, Andrew Adam Ferri and 1238915 Ontario Limited
BEFORE: The Honourable Justice R. J. Nightingale
COUNSEL: Fabian Otto, Counsel for the Plaintiffs
Amanda McBride and Daniel Michaud-Shields, Counsel for the defendant Connie Nothdurft
Andrew Adam Ferri, self-represented party
HEARD: August 22, 2022
Reasons for Decision on Plaintiffs' Motion for Summary Judgment
[1] The plaintiffs bring this motion for summary judgment seeking specific performance against the defendants Connie Nothdurft (Nothdurft”) and Andrew Adam Ferri (“Ferri’) of an agreement of purchase and sale of 10749 Niagara River Parkway, Niagara Falls.
[2] Those defendants request that the plaintiffs’ motion for summary judgment be dismissed. Alternatively, they ask for a dismissal of the plaintiffs’ action, a declaration that the agreement of purchase and sale “is dead” and that the plaintiffs have forfeited their deposit paid pursuant to the agreement. They also request an order directing the real estate company to release the deposit being held in its trust account to the defendant Nothdurft.
[3] The defendant 1238915 Ontario Limited (“1238915”) is a judgment creditor of the defendants Nothdurft and Ferri having writs of seizure and sale registered against the property in question. The parties in their evidence referred to them as writs of execution and I will also do so to be consistent with that evidence.
[4] 1238915 was named as a defendant to be bound by the order of the court regarding the plaintiffs’ claim for specific performance of the agreement and for payment into court of the net proceeds of sale to administer the rights of the defendants. 1238915 filed no defence and has been noted in default.
[5] The plaintiffs rely on the affidavits of the plaintiff Aidong Gu of February 3 and May 2, 2022 and exhibits, the affidavit of Sydney Lu of February 5, 2022 and exhibits and the affidavit of Roger Lewandowski of April 19, 2022 and exhibits. They also rely on the transcript of the examination for discovery of Nothdurft taken on June 29, 2022.
[6] The defendants did not provide their own sworn affidavits but provided an affidavit of Paul Leon of June 30, 2022.
[7] Aidong Gu, Roger Lewandowski and Paul Leon were cross-examined on their affidavits and transcripts were filed.
Evidentiary Background
[8] The evidence that is not in dispute is that the plaintiffs and defendants signed an agreement of purchase and sale on December 7, 2020 for the plaintiffs’ purchase of vacant residential land at 10749 Niagara River Parkway Niagara Falls. Nothdurft was the registered title owner and had authority to sign the agreement.
[9] The purchase price of the property was $679,00 with an initial deposit of $25,000 and the closing date was February 25, 2021.
[10] The plaintiffs obtained a mortgage on other property owned by them in the amount of $647,500 to finance this transaction and were ready, willing and able to close it on February 25, 2021.
[11] Prior to the closing date, Mr. Lewandowski acting for the plaintiffs on their purchase of the property discovered the existence of two writs of execution against the seller Nothdurft in favour of 1238915. On February 23, 2021, Mr. Lewandowski’s office wrote to Paul Leon, the lawyer acting for Nothdurft on the sale, and requisitioned on or before closing satisfaction of the executions together with the withdrawal thereof from the files of the Director of Titles. One writ, dated August 22, 2018, was for $2,500 and the other dated September 5, 2018 was for approximately $256,000.
[12] On February 24, 2001, Mr. Leon’s office wrote to Mr. Lewandowski’s office by email to advise that the execution situation may lead to litigation. They asked if the plaintiffs were willing to extend the transaction which would likely take at least a month.
[13] Mr. Lewandowski’s office wrote back by email on February 25 to advise that the plaintiffs were in agreement to extend the deal and requested that Mr. Leon’s office send a formal letter requesting same along with the potential new closing date.
[14] Mr. Lewandowski’ evidence was that he had a telephone conversation with Mr. Leon that day confirming that he was in funds required to complete the purchase and was told by Mr. Leon that he could not remove the executions yet and wished time to do so and that there was no need for Mr. Lewandowski to tender.
[15] Mr. Leon states he does not recall speaking to Mr. Lewandowski over the telephone on that date but then denies that he waived tender. He stated that his review of phone logs confirmed there were none indicating that Mr. Lewandowski called his office that day.
[16] Mr. Lewandowski’s evidence was not disputed by Mr. Leon that in real estate conveyancing practice, writs of execution outstanding on closing against the vendor of the property are either paid from the balance due on closing thereby removing the executions as a cloud on title or an undertaking is received from the seller’s lawyer to utilize part of the balance due on closing to pay off the writs of executions allowing the vendor to convey a good and marketable title to the purchaser.
[17] Mr. Leon also confirmed in his evidence that often in real estate transactions outstanding property taxes similarly would be paid out of the proceeds of sale from closing.
[18] Mr. Lewandowski’s evidence, which was also not disputed by Mr. Leon, was that in a normal time, even in this situation, a quick motion could be made to the courts to pay the appropriate sum into court to obtain a court order clearing the writs of executions and allowing the judgment debtor and judgment creditor to sort things out from there.
[19] On February 26, 2021, Mr. Leon’s office wrote to Mr. Lewandowski requesting an extension of time for closing the transaction to March 30, 2021 and indicating that all other terms and conditions to the transaction would remain the same and time would continue to be of the essence.
[20] In that email, Mr. Leon stated that his “clients believed the executions which were obtained by Default Judgment were appealed, but the lawyer appealing the Default Judgment failed to apply for a Stay of Action and the clients also believe, that on the first application by the Judgment Creditor they failed to produce substantial and cogent evidence that the applicant had no standing with respect to the corporation or the bringing of the matter.”
[21] However, there was no sworn admissible evidence on this hearing provided by Nothdurft or Ferri as to what was actually meant by that statement, which was certainly far from clear, including whether it was true. Neither of Nothdurft nor Ferri provided any affidavit evidence on this motion even though Mr. Leon’s evidence was that he was acting for Ferri who was acting on Nothdurft’s behalf and Mr. Leon was dealing for Nothdurft through Ferri.
[22] In particular, Nothdurft’s evidence on her examination for discovery was that she does not remember or was aware of there being judgments against her and these writs of execution. She did not recall making the periodic payments on those judgments indicated on the writs of approximately $9,000 in 2019. She said she did not remember this transaction and does not believe she gave instructions to Mr. Leon to not close the deal. She stated she does not know if she hired a lawyer to try and lift these executions from title on the property and said she relied on her husband Ferri to handle everything on the executions.
[23] On March 1, 2021, Mr. Lewandowski wrote to Mr. Leon indicating that his clients would only extend the transaction to March 31, 2021 if the vendor agreed to reimburse his clients for the interest costs relating to their mortgaging another property to provide the monies to purchase this property.
[24] On March 5, 2021, Mr. Leon wrote to Mr. Lewandowski and stated that the matter relating to the seller’s execution would not be satisfied before the extended closing date and that his client was not prepared to accept the plaintiffs’ extension condition. He “accordingly suggests that the transaction be cancelled and the deposit returned to the buyers. Our client is prepared to sign a mutual release in this regard.”
[25] Mr. Lewandowski’s uncontradicted evidence was that Mr. Leon told him that his client declined to give him instructions to provide the routine undertaking referred to in paragraph 16 above and that, as surprising as this was, Mr. Leon provided him with no further explanation for his client’s refusal to facilitate closing at any time.
[26] Despite the vendor’s preference for time to clear the executions, Mr. Lewandowski’s understanding was that the executions against Nothdurft need not affect the closing of the transaction as the purchase price (i.e., $679,000) was enough to pay them off (i.e., approximately $260,000). Mr. Leon agreed in his evidence that the purchase price was enough to satisfy the executions.
[27] Mr. Lewandowski in his letter to Mr. Leon dated March 25, 2021 referred to a conversation they had the previous week where Mr. Leon advised him that his client was attending a meeting at the Sheriff’s office concerning a possible settlement that would lead to the removal of the executions against his client. He asked Mr. Leon to advise as soon as possible if anything has moved this matter in that direction. In his evidence, Mr. Lewandowski also stated that Mr. Leon told him that his client had tried in court to clear the executions but had failed in whole or in part.
[28] There was no evidence on this motion from Nothdurft or Ferri to substantiate and verify that statement of Mr. Leon.
[29] Mr. Lewandowski’ evidence was given the situation, it was obvious that whatever executions remained after that defeat in court, they should simply have been paid and this transaction closed. Despite that, Mr. Leon told him that he could not get instructions for an undertaking to use part of the purchase price to pay off the executions but he did not say why they could not be paid off. Mr. Leon did not dispute or deny that evidence.
[30] Mr. Leon responded, by letter on March 25 that the Sheriff had removed one execution. He admitted in his cross-examination that he had no idea which one had been removed.
[31] In that letter, he also stated that because a name was misspelled, there were still executions on file. Although he stated that his client was working on having the executions removed, no evidence was provided from Nothdurft or Ferri to confirm that or any details of what was being done.
[32] Mr. Leon’s affidavit evidence was at that time, he “continued to maintain that the deal was dead, in other words the agreement of purchase and sale was at an end pursuant to section 10 of the agreement”. However, he said no such thing in his letter of March 25 to Mr. Lewandowski but, as indicated above, stated that his client was working on having the executions removed.
[33] The relevant parts of paragraph 10 of the agreement state as follows:
- Title: Provided that the title to the property is good and free from all registered in the restrictions, charges, liens and encumbrances except as otherwise specifically provided in this agreement.., if within the specified times referred to in paragraph 8 any valid objection to title… is made in writing to Seller and which Seller is unable or unwilling to remove, remedy or satisfy…and which buyer will not waive, this agreement, notwithstanding any intermediate acts or negotiations in respect of such objections, shall be at an end and all monies paid shall be returned without interest or deduction and Seller, Listing Brokerage and Co-operating Brokerage shall not be liable for any costs or damages.
[34] Mr. Lewandowski did not provide a letter or email responding to Mr. Leon’s letter of March 5, 2021 confirming that his clients accepted that the transaction was cancelled, that the deposit be returned to his clients or that his clients would sign a mutual release in that regard. Mr. Lewandowski’s evidence was that he never indicated that the transaction had not been extended or that he and the plaintiffs ever considered the transaction to be at an end. He never agreed that the agreement was null and void pursuant to paragraph 10 of the agreement of purchase and sale.
[35] He stated that Mr. Leon at all times conveyed that the executions against his client were going to be removed.
[36] Mr. Lewandowski wrote to Mr. Leon on April 19 asking him to advise of any changes and updates regarding the executions filed against the vendors further to their earlier correspondence of March 25, 2021.
[37] As he received no response, he sent a follow-up letter of May 4, 2021 asking Mr. Leon to call him asap.
[38] On or about June 2, 2021, Mr. Gu, unknown to Mr. Lewandowski, stated he attended at the office of Mr. Leon on his own initiative because it was convenient as he was in the area, to inquire about the progress of the transaction and whether or not the executions had been removed.
[39] On June 2, 2021, Mr. Leon wrote to Mr. Lewandowski and confirmed Mr. Gu’s attendance that day. He referred to his letter dated March 5, 2021 wherein he advised that they are “unable” (my emphasis added) to satisfy and remove the execution against the vendor. Accordingly, he stated that his client was treating the transaction as dead and was willing to execute a mutual release in this regard.
[40] Mr. Lewandowski’s evidence, which is not denied or contradicted by Mr. Leon, is that they had a couple of conversations after he received that June 2 letter from Mr. Leon. Mr. Leon told him his clients did not want to remove the writs of executions or were not going to do it, but Mr. Leon would not explain why even when Mr. Lewandowski asked him why.
[41] Mr. Leon’s evidence was that he was aware that efforts to remove the executions were ongoing and a separate matter was being heard before the court relating to those executions. He understood that they could not get rid of the executions which was the impediment to closing of this deal which had to be rectified and that title cannot be delivered without the executions being removed. He took the position, because of that execution, the deal was dead.
[42] Mr. Leon’s evidence in cross-examination, not in his original affidavit, was that he “believes” he spoke to Mr. Lewandowski wherein he pointed out paragraph 10 of the agreement to him. He stated in that conversation Mr. Lewandowski was extremely upset because the plaintiffs’ litigation lawyer had threatened to sue him. He said “in that conversation” Mr. Lewandowski agreed that the transaction was at an end.
[43] Mr. Leon provided no date or other specifics of the conversation but in his affidavit stated that he was contacted by the litigation lawyer on or about June 23, 2021.
[44] I have reviewed the decision of Edwards J dated January 24, 2022 in 1238915 Ontario Limited v. Ferri, 2022 ONSC 516 that Nothdurft, Ferri and Mr. Leon referred to in support of their position that they were and are unable to remove the outstanding writs of execution against Nothdurft to remove that cloud from title of this property.
[45] Edwards J found that the debtors Nothdurft and Ferri used a company controlled by them for the purpose of defeating, injuring, delaying or prejudicing the same judgment creditor 1238915 Ontario Limited in this case in its efforts to satisfy the same June 2018 default judgment that refers to the same writs of seizure and sale filed in the Sheriff’s office in Welland.
[46] In that case, a company controlled by Nothdurft and Ferri issued a notice of power of sale under its mortgage in March 2013 against the owner of property on Detenbeck Road, Niagara Falls, claiming an outstanding balance of approximately $224,000. Ferri then personally acquired title in May 2013 from that owner and subsequently transferred it to Nothdurft in May 2015. No payments were made on the mortgage for over eight years and the company took no action to recover its alleged debt.
[47] Nothdurft and Ferri, as the controlling minds of the company, then arranged for the sale in 2021 by the company of that property under its power of sale proceedings commenced eight years earlier, now claiming a balance outstanding under its mortgage of approximately $468,500, rather than by Nothdurft without any concern as to any writs of execution that might be against Nothdurft and Ferri personally which would include those of 1238915.
[48] 1238915 then issued garnishment proceedings on its judgments against Nothdurft and Ferri against the law firm acting on the sale.
[49] Edwards J found that the debtors Nothdurft and Ferri used that company controlled by them for the purpose of defeating, injuring delaying or prejudicing the same judgment creditor 1238915 in this case in its efforts to satisfy the same June 2018 default judgment which judgment refers to the same writs of seizure and sale in this case filed in the Sheriff’s office in Welland.
[50] Edwards J ordered that the law firm pay the amount of the notice of garnishment of $282,149.37 but to retain that money in its trust account to satisfy the notice of garnishment pending the resolution of the issues regarding who were the proper owners and directors of 1238915 and whether its 2018 default judgment should be set aside. That motion to set aside that judgment had not been brought by Nothdurft and Ferri until December 23, 2021.
[51] I will comment further on this decision in my reasons below.
[52] Prior to commencing this action, the plaintiffs’ litigation lawyer contacted Mr. Leon on June 23, 2021 to schedule a new closing date and resolve the issues but they were not able to do so.
[53] After the order of Carpenter-Gunn J was obtained, Mr. Leon on August 9, 2021 advised the plaintiffs’ litigation lawyer that they “strongly take the original deal is dead, hence the need for the fresh agreement.” Mr. Wu had stated in his evidence that it was his belief that due to the steady rise of the residential real estate market values in the area Nothdurft would like to get out of their deal and resell the property in order to obtain a higher price that she originally obtained from the plaintiffs.
Evidence of Uniqueness of the Property
[54] Mr. Gu’s evidence was that the property they wanted to purchase was unique to them. They had searched and knew of no other vacant residential lots for sale in that area or on Niagara River Parkway especially at the price of $679,000.
[55] In cross-examination, he stated that the property was unique to them based on price, location, affordability and “everything” as they were going to live there.
[56] Sydney Lu is the real estate agent representing the plaintiffs on their purchase of the vacant lot property which according to the agreement of purchase and sale had a frontage of 164 feet and a depth of 388 feet (63,632 ft²)
[57] She provided her affidavit evidence on which she was not cross-examined that she helped to search the whole area for the property and she has looked carefully again at the whole area since the closing did not take place. The features of the property, its location and its price especially based on the plaintiffs’ affordability is unlike any other available replacement property in that area.
[58] She confirmed that there are few vacant residential lots in that neighbourhood. She compared by lot size, location and price to the subject property and knowing the plaintiffs’ budget, stated that the subject property is the only one that suits the plaintiffs particularly as they have the mortgage already and have been paying for it since the scheduled closing.
[59] She provided a comparable analysis around the area of similar properties to show the uniqueness of this subject property that the plaintiffs purchased:
a) Vacant land at 3 Niagara River Parkway had sold for $300,000 on February 1, 2021 and was later resold for $850,000 in August 2021 which was significantly higher that the plaintiffs’ purchase price.
b) Properties at 14555 Niagara River Parkway and 14461 Niagara River Parkway sold for $995,000 in September 2021 and $980,000 in February 2021 respectively. Both were for larger lots and with an existing home on the property and were not vacant land.
[60] Nothdurft on her examination for discovery admitted that although she has been to the property, she does not know anything about the price or features and was not going to comment on Ms. Lu’s evidence.
[61] The defendants’ only evidence regarding the issue of the uniqueness of the property was that of Mr. Leon who stated that the property was not unique in the area as there are many vacant lands that become available in the area throughout any given year. However, he provided no details other than he was aware that a similar property was listed in the same area in August 2021 which was the same property referred to by Sydney Lu noted in paragraph 59a above.
Summary Judgment Principles
[62] Under Rule 20.04 (2)(a) of the Rules of Civil Procedure, the court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence.
[63] On a summary judgment motion, the court is entitled to assume that the parties have provided all of the relevant evidence that will be presented at the trial and there will be no further evidence. Each party must put its best foot forward and lead trump or risk losing.
[64] Under Rule 20.02 (1), although an affidavit for use on a motion for summary judgment may be made on information and belief as provided in Rule 39.01(4), the court, if appropriate may draw an adverse interest from the failure of a party to provide the evidence of any person having personal knowledge of contested facts.
[65] The court on a summary judgment motion should first determine if there is a genuine issue requiring a trial based only on the evidence before the court without using the discretionary fact-finding powers under Rule 20.04 (2.1).
[66] There will be no genuine issue requiring a trial if there is sufficient evidence in the summary judgment process such that the motion Judge can adjudicate the dispute by making findings of fact, applying the law to the facts and fairly and justly adjudicating the dispute in a more expeditious and less expensive procedure.
[67] If there appears to be a genuine issue requiring a trial, the motion judge may use the powers under rule 20.04 (2.1) and (2.2) provided that their use is not against the interests of justice. With these additional powers the motion judge may weigh the evidence, evaluate the credibility of the deponent and draw any reasonable inference from the evidence unless it is in the best interests of justice for such powers to be exercised only at trial.
[68] Their use will not be against the interests of justice if will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
[69] Accordingly, the evidence presented on the summary judgement motion must give the judge confidence in the conclusions to be drawn and allow the judge to find the necessary facts to resolve the dispute.
[70] The moving party must discharge the evidentiary burden of proving there is no genuine issue requiring a trial for its resolution. If so, the burden shifts to the responding party to prove that there is a genuine issue requiring a trial.
Analysis
[71] The plaintiffs’ motion for summary judgment for a declaration of specific performance of the agreement of purchase and sale and other ancillary relief is granted and the defendants’ motion for summary judgment is dismissed for the following reasons.
[72] The whole of the evidence on the written record noted above clearly establishes that the plaintiffs entered into a valid agreement of purchase and sale with the defendant not after for their purchase of the vacant property on the Niagara River Parkway at a price of $679,000 with the closing date of February 25, 2021.
[73] The plaintiffs were ready, willing and able to close the transaction on that date but there were outstanding writs of execution against Nothdurft on title in the amounts of $2,500 and approximately $256,000 since 2018 preventing Nothdurft from providing clear title to the plaintiffs.
[74] The writs of execution having been filed with the Director of Titles under the Land Titles Act bound the interest of Nothdurft in and was an encumbrance on the title to the property. Anger & Honsberger, Law of Real Property 3rd ed., page 34 – 31.
[75] The parties on the closing date of February 25, 2021 agreed to extend the closing of the transaction to allow Nothdurft’s lawyer time to remove the writs of execution so as to provide clear title.
[76] The dispute on the evidence between Mr. Lewandowski and Mr. Leon regarding whether tender by the plaintiffs was waived is not relevant in this case and need not be resolved.
[77] The evidence of the plaintiffs, which was not contradicted by the defendants, establishes that they were ready, willing and able to close the transaction on February 25, 2021 and had arranged the required financing funds to do so. As noted in Anger and Honsberger at page 23-40, formal tender is not a prerequisite to specific performance although evidence of the plaintiff’s willingness and ability to close is frequently established by tender. Tender is but one type of cogent evidence of that but it is not essential evidence in an action for specific performance.
[78] The plaintiffs have always been ready, willing and able to close the transaction even to date.
[79] The defendants’ position is that they were unable to remove the writs of execution of 1238915 against Nothdurft which was a title impediment or encumbrance and allowed Nothdurft to treat the agreement of purchase and sale at an end under paragraph 10 of the agreement.
[80] Although there appears to be some differences in the evidence of Mr. Lewandowski and Mr. Leon, for reasons indicated below, they do not appear to involve significant issues of their credibility which should only be addressed at a trial. In my view, it would not be against the interests of justice to decide the issues in this case on a summary judgment motion by weighing the evidence, evaluating the credibility of the deponents and drawing the reasonable inferences from the evidence.
[81] Exercising those powers in my view will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole.
[82] Based on the evidence before the court and exercising my discretionary powers under Rule 20.04(2.1) and (2.2), I find that the defendants’ position is without merit.
[83] The uncontradicted evidence of Mr. Lewandowski in this case which I accept is that under real estate conveyancing practice, the 1238915 writs of execution could have been paid from the balance due on closing thereby removing them as a cloud on title. Alternatively, Nothdurft’s lawyers could have provided an undertaking to use part of the purchase price proceeds on closing to pay them off which would then allow Nothdurft to convey good and marketable title to the plaintiffs.
[84] Lastly, if there was a dispute by Nothdurft with respect to the validity of the writs of execution or amounts owing thereunder, a relatively quick and inexpensive application could have been made by Nothdurft to the court to pay the amount of the outstanding 1238915 writs of execution into court to the credit of the Sheriff’s office so as to obtain an order clearing those writs of execution from title to the property while still allowing Nothdurft and 1238915 to resolve those differences thereafter.
[85] I also accept Mr. Lewandowski’s uncontradicted evidence that on more than one occasion, Mr. Leon told him that his clients would not give him instructions for an undertaking to use part of the purchase price to pay off the writs of executions and that they did not want to remove them or were not going to do it, but he would not explain why.
[86] The law has been clear since Mason v. Freeman (1958), 1958 7 (SCC), 14 D.L.R., 2nd, 529 SCC that when the vendor seeks to avoid a contract under this type of rescission clause, her conduct and reasons for seeking to escape her obligations are matters of interest to the court. A vendor who seeks to take advantage of the clause must exercise her right reasonably and in good faith and not in a capricious and arbitrary manner.
[87] In Mason, the court found that the vendor had made no genuine effort to obtain a bar of dower from his wife and did not allow him to rely on the annulment provision. The vendor must have made a bona fide effort to satisfy the requisitions and to have a good reason for not being able to do so.
[88] In Leung v. Leung (1990) 1990 6866 (ON SC), 75 O.R. 2nd 786, the court awarded the purchaser specific performance finding that the vendors had breached their duty to act in good faith and to take all reasonable steps to complete the contract when they terminated it on a minor and technical defect, refused to have the solicitor available for tender when the agreement did not specify a time and terminated it when they would have suffered no prejudice.
[89] There was no evidence provided from Nothdurft or Ferri by affidavit or otherwise explaining why one of the three above mentioned alternative and viable means of clearing the 1238915 writs of execution against the title could not have been completed by them either on closing or shortly thereafter in order to provide clear title to the property to the plaintiffs.
[90] Mr. Leon’s evidence confirmed that other lawyers were attempting to assist the defendants in arranging for the lifting of the writs of execution. The evidence of what Mr. Leon had been told by others including by other lawyers acting for the defendants on that matter was at best hearsay evidence lacking in any specific details of what actual efforts were being made which remained rather vague including when they were made.
[91] In particular, there was no evidence provided by either of the defendants themselves or by their other lawyer or lawyers on that issue regarding what attempts, if any, were made by the defendants to remove the 1238915 writs of execution against the title from February 25, 2021 onward.
[92] In this case, it is appropriate to and I do draw an adverse interest against the defendants because of their failure to provide on this motion their own affidavit evidence and that of their other lawyers of their personal knowledge of those particular facts.
[93] In fact, the decision of Edwards J refers to no evidence of such efforts from February 25, 2021 on until a motion was brought by defendants in an attempt to set aside the 1238915 judgment against the defendants on December 23, 2021. No details of that motion including the affidavits of the parties and witnesses relied on were provided in evidence in this court. In his subsequent decision on costs at 2022 ONSC 1860, Edwards J in fact concluded that neither Nothdurft nor Ferri took any meaningful steps to have the judgment of 1238915 set aside until faced with its garnishment notices.
[94] Moreover, that decision does not in any way confirm the defendants’ position that they were unable to lift the 1238915 writs of execution because of their lawyer being required in that decision to hold sufficient funds in trust to satisfy the garnishment issued against them.
[95] It appears that Edwards J in the motion he decided was not asked or required to address the issue of the outstanding writs of execution of 1238915. He was dealing with a notice of garnishment on 1238915’s judgment.
[96] There is no evidence provided by the defendants that they have ever attempted, including in that motion before Edwards J, to obtain an order that they pay the amount claimed under the 1238915 writs of execution into court to the Sheriff’s office in Welland and lift and remove from title those writs if they disputed their validity or amounts claimed by 1238915 leaving that issue to be resolved later on. Again, that would be a relatively simple and inexpensive procedure.
[97] As indicated above, I am entitled to assume on this motion that the defendants have provided all of the relevant evidence that will be presented at trial and there will be no further evidence. The defendants must put their best foot forward and lead trump or risk losing.
[98] In that regard, Mr. Leon only “suggested” on March 5, 2021 to Mr. Lewandowski that the agreement be terminated with the deposit to be returned and mutual releases be signed. In that letter, he made no reference to paragraph 10 of the agreement.
[99] Mr. Lewandowski on behalf of the plaintiffs did not accept that proposal or position. Rather, both lawyers continued to communicate after that regarding the defendants’ efforts to have the writs of execution lifted.
[100] Although Mr. Leon may have “maintained” the agreement was at an end based on paragraph 10 of the agreement, that was not communicated to Mr. Lewandowski in his letter of March 25 wherein he stated that his clients were still working on having the writs of execution removed. There would be no reason for his saying that to Mr. Lewandowski if the agreement had actually been terminated.
[101] In addition, Mr. Leon on behalf of his clients took no steps to prepare and have them sign a mutual release and a direction that the plaintiffs’ deposit funds at the real estate agent’s office be returned to the purchasers and forward that to Mr. Lewandowski which suggests that the transaction was still ongoing.
[102] I do not place any weight on the conversation Mr. Leon “believes” he had with Mr. Lewandowski which I conclude was likely sometime at the end of June 2021 or sometime later after plaintiffs’ litigation counsel was retained.
[103] No specific details were provided other than at that time Mr. Leon said he pointed out paragraph 10 of the agreement to him. He said Mr. Lewandowski, who was extraordinarily upset because he said the plaintiff’s litigation lawyer had threatened to sue him, agreed it was at an end.
[104] No evidence was provided from Mr. Leon that he ever had any such conversation with Mr. Lewandowski regarding paragraph 10 and the termination of the agreement before that date. Mr. Leon admitted he had not received anything in writing from him to that effect. Mr. Leon had provided nothing in writing to Mr. Lewandowski regarding that. Mr. Lewandowski completely disagreed with that evidence of Mr. Leon and confirmed that he did not agree that the transaction was null and void pursuant to paragraph 10 of the agreement.
[105] Moreover, there is no evidence from Mr. Leon denying or disputing Mr. Lewandowski’s evidence that even after June 2, 2021, they had telephone conversations in which Mr. Leon told him that his clients did not want to remove the writs of execution or were not going to do it but would not explain why.
[106] I conclude based on all of this evidence and the reasonable inferences from the evidence that these facts described in Mr. Lewandowski’s evidence above can and should be drawn to resolve the dispute between the parties.
[107] In summary, the agreement of purchase and sale between the parties continued to remain in effect after the initial closing date of February 25, 2021 and was not terminated before Mr. Leon’s letter of June 2, 2021 attempted to do so indicating that Nothdurft was treating the transaction as dead.
[108] Nothdurft and Ferri have not provided the required evidence including from themselves or other witnesses having personal knowledge of the facts that they made a bona fide effort to satisfy the plaintiffs’ requisition to remove and lift the 1238915 writs of execution of the title in order to close the transaction and provide good title to the plaintiffs and had a good reason for not being able to do so.
The Property is Unique
[109] In order for the plaintiffs to establish that the property is unique when seeking the remedy of specific performance, they must show that the property in question has a quality that cannot be readily duplicated elsewhere. The quality should relate to the proposed use of the property and be a quality that makes it particularly suitable for the purpose for which it was intended. John E. Dodge Holdings Ltd. V. 805462 Ontario Limited (2003) 2003 52131 (ON CA), 223 D.L.R. 4th 541 (Ont. C.A.)
[110] Both subjective and objective figures are to be considered including the nature and function of the property in relation to the prospective purchaser.
[111] Brown J.A. in the recent decision of the Ontario Court of Appeal in Lucas v. 1858793 Ontario Inc. (Howard Park), 2021 ONCA 52, confirmed at para. 69 that the basic rationale for an order of specific performance of contracts is that damages may not afford a complete remedy. A party seeking specific performance must establish a fair, real and substantial justification by showing that damages would be inadequate to compensate for its cost of the subject property.
[112] The court at para. 71 stated that in determining whether the plaintiff has shown that the land rather than its monetary equivalent better serves justice between the parties, courts typically examine and weigh together three factors: (i) the nature of the property involved; (ii) the related question of the inadequacy of damages as a remedy; and (iii) the behaviour of the parties having regard to the equitable nature of the remedy. Whether a property is unique, either by virtue of its nature or the features of the contract for its purchase and sale, operates as only one of the factors a court must consider when determining entitlement to specific performance.
[113] The plaintiff’s evidence and that of Sydney Lu including a reasonable and logical inference therefrom is that the plaintiffs wanted to purchase vacant residential land on the Niagara River Parkway which would overlook the Niagara River to build a house and live there.
[114] This particular property was within their affordability of $679,000 whereas another vacant lot a few months later sold for significantly higher at $850,000.
[115] The court in Lucas at para. 74 confirmed that a rising real estate market, particularly where the purchasers deposit remains tied up by the vendor, may indicate that the transaction could not have been readily duplicated or that other properties were not readily available at the time of the breach within the plaintiff’s price range.
[116] The court referred to Sivasubramanian v. Mohammad, 2018 ONSC 3073 at para.84, aff’d 2019 ONCA 242 which confirmed that when there is evidence of the housing market showing rapid price increases, affordability becomes an important factor in the analysis and the availability of similar homes outside of the applicant’s price range does not qualify as a readily available substitute.
[117] The court also referred to the decision of Strathy J, as he then was, in Walker v. Jones, 2008 47725 (ON SC) who granted specific performance to the purchaser of a house in a hot housing market holding it was not unreasonable for the purchaser to seek specific performance rather than enter the turbulent and rising real estate market. As well, the evidence, as in this case, did not establish that she could have found a reasonably comparable substitute property in her price range.
[118] In addition, the location of this property being particularly unique to the plaintiffs at the time of the contract in my view, is no different or less unique to them than the purchaser in Tropiano v. Stone Valley Estates Inc., (1997) 1997 12176 (ON SC), 36 O.R.(3d) 92 (Gen. Div.) of a residential ravine lot with the location regarded as ideal by the purchaser.
[119] The property continues to be unique to the plaintiffs today as they are still ready, willing and able to close the transaction.
[120] The plaintiffs are only asking for specific performance and are not making any claim in the alternative for damages which in any event would be difficult to quantify.
[121] Furthermore, an award of damages to the plaintiffs would not be comparatively fair or an adequate measure of justice without any evidence or assurance that they could find comparable property in that location at that contracted price.
[122] There is also evidence of a lack of good faith attempt on the part of the defendants to terminate a valid agreement of purchase and sale by refusing for no reason to give an undertaking to pay the outstanding writs of execution of 1238915 from the sale proceeds on closing or commence the application to have the required funds paid into court pending the resolution of any dispute with the execution creditor in order to remove those writs from title.
[123] In this case, an order granting specific performance would not impact any obligations to a third party given that an order can be made by this court to provide the remedy of specific performance to the plaintiffs and at the same time protect the interests of the defendants and the execution creditor 1238915.
[124] That ancillary order is that the 1238915 writs of execution shall be removed and lifted from title by the Director of Titles upon the plaintiffs being entitled to deduct the amount claimed by 1238915 under its outstanding writs of execution from the purchase price of the property of $679,000 and paying that money to the Sheriff in Welland to satisfy those writs.
[125] If the defendants wish to dispute the validity or amounts owing under the outstanding 1238915 writs of execution, they are at liberty to bring an application at their expense that the aforementioned funds paid by the plaintiffs to the Sheriff’s office to satisfy and remove from title the 1238915 writs of execution be retained by the Sheriff’s office pending the resolution of that dispute between Nothdurft, Ferri and 1238915 Ontario Limited or further order of the court.
[126] There is some fair, real and substantial justification for the plaintiffs’ claim for specific performance in this case and the remedy is necessary to achieve justice in the circumstances of this case. Anger and Honsberger, page 23-27.
Conclusion
[127] For all these reasons, the plaintiffs’ motion for summary judgment is granted along with the following order:
a) The plaintiffs are entitled to specific performance of the agreement of purchase and sale, dated December 7, 2020, with the defendants Connie Nothdurft and Andrew Adam Ferri for their purchase of lands at 10749 Niagara River Parkway, Niagara Falls, Ontario, legally described as PCL 5-1 SEC 59M186; LT 5 PL 59M186 Niagara Falls also enforceable against any claimant to beneficial ownership status.
b) In order to complete the transaction, the plaintiffs are entitled to deduct from the purchase price an amount claimed by the execution creditor 1238915 Ontario Limited under its writs of seizure and sale against the title to the property and pay that money to the Sheriff of Welland whereupon those writs of seizure and sale shall be immediately lifted and removed by the Director of Titles in the Land Titles Office and deleted from title to the property.
c) If the defendants wish to dispute the validity or amounts owing under the outstanding 1238915 writs of execution, they are at liberty to bring an application at their expense that the aforementioned funds paid by the plaintiffs to the Sheriff’s office to satisfy and remove from title the 1238915 writs of execution be retained by the Sheriff’s office pending the resolution of that dispute between Nothdurft, Ferri and 1238915 Ontario Limited or further order of the court.
d) The defendants’ counterclaim and motion to dismiss the plaintiffs’ action, declare that the agreement purchase and sale in question is dead, that the plaintiffs have forfeited their deposit paid pursuant to the agreement and authorizing and directing Royal Lepage RC Realty Brokerage to release the deposit being held in its trust account to the defendant Nothdurft is dismissed.
[128] The parties are required to attempt to resolve the issue of costs of these motions, the action and counterclaim.
[129] If they are unable to do so, the plaintiffs shall file written submissions of no more than three pages in length together with an outline of costs within 15 days of the date of this decision. The defendants shall have 10 days thereafter to similarly respond.
[130] If submissions are not received within those timelines, the parties will be deemed to have resolved the issue of costs.
Nightingale J
Date: September 19, 2022