[CITATION](http://intra.judicialsecurity.jus.gov.on.ca/NeutralCitation/): 2730453 Ont. Inc. v. 2380673 Ont. Inc., 2022 ONSC 6660

COURT FILE NO.: CV-20-00634647-0000

DATE: 20221128

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

2730453 Ontario Inc.

Plaintiff

– and –

2380673 Ontario Inc.

Defendant

Mark Veneziano, Sean Blakeley, Jonathan D. Langley, and Madeleine Andrew-Gee (student at law), for the plaintiff

Joseph W. Irving, for the defendant

HEARD: October 31 and November 1, 2, 3, and 4, 2022.

Robert Centa J.

[1] In this proceeding, the plaintiff is the disappointed purchaser. It submits that it had an oral agreement to purchase land owned by the defendant. The plaintiff submits that the transaction was sufficiently evidenced in writing and that it fully performed its obligations under the agreement. It seeks an order of specific performance, which it says is the fair and appropriate result in these circumstances.

[2] The defendant maintains that it never agreed to sell its land to the plaintiff. It walked away from the ongoing negotiations when the transaction became unnecessarily complicated. The defendant says there was no agreement, that any agreement is unenforceable because of the Statute of Frauds, R.S.O. 1990, c. S.19, and that, in any event, damages would be an appropriate remedy.

[3] After a five-day trial of this action, I find that the parties reached an oral agreement for the sale of the land. They agreed on all of the essential terms for the transaction. The Statute of Frauds is not an impediment to the enforcement of the agreement, which was breached by the defendant when it refused to close the transaction on the terms to which the parties had agreed. Finally, I find that the land rather than its monetary equivalent better serves justice between the parties, so I order specific performance of the agreement.

Background Facts

[4] It is convenient to set out the facts on which there is general agreement and then examine the disputed issues in more detail.[^1]

[5] The plaintiff, 2730453 Ontario Inc., is a project specific company incorporated to purchase the disputed property. Anthony Petrozza is the president and a director of the purchaser. Mr. Petrozza is also a principal of Rivanera Holdings Inc. Since 2015, Rivanera has owned an 81-acre lot located at 1320 Lower Base Line Road East, Milton, Ontario. The purchaser and Rivanera have the same directors and shareholders.

[6]

The defendant, 2380673 Ontario Inc., owns the disputed property, which is a 32-acre lot located at 1456 Lower Base Line Road East. The owner’s principal and sole shareholder is Moses Segal. The owner’s lot lies immediately to the east of Rivanera’s lot. This map has north at the top and sets out the locations of the two key properties, as well other lots in the immediate vicinity:

[7] In 2015, Mr. Segal caused the defendant to list 1456 Lower Base Line for sale. The MLS listing was prepared by Frank Varga, who was listed as broker of record for GTA Realty Ltd. The property was listed for sale at $4.16 million and the listing noted that the owner preferred a cash deal. The listing noted that the property had the potential to be used as future employment lands and that Halton Region considered this land to be a “future strategic employment area pursuant to [Regional Official Plan Amendment] 38.” The listing also identified that the property was subject to a three-acre easement along its eastern boundary. The owner did not receive any offers that it found acceptable, and the listing expired on June 1, 2016. From time-to-time after that date, a GTA Realty Ltd. for sale sign was placed on the property.

[8] Mr. Petrozza was very interested in buying the property as it bordered the lot that Rivanera already owned. Mr. Petrozza and Rivanera’s other shareholders hoped to assemble a larger parcel of land and to create an industrial development. Mr. Petrozza retained John Pantalone and Pantalone Realty Corp. Brokerage to represent the interests of Rivanera. Mr. Pantalone learned that the disputed property had been listed in 2015 and that Mr. Varga was the listing agent at that time.

[9] In 2018 and 2019, Mr. Pantalone spoke with Mr. Varga several times about potential transactions. Mr. Pantalone communicated several different offers from Mr. Petrozza to purchase the disputed property, but none found favour. Both Mr. Pantalone and Mr. Varga understood that the offers were not satisfactory to the owner because they included a vendor take-back mortgage or other financing terms. For example, in May 2019, Mr. Pantalone delivered a written offer of $4.7 million, but with a three-year, interest-free vendor take-back mortgage. Mr. Segal testified that he wanted a clean transaction but would have considered a vendor take-back mortgage if the purchase price was high enough, but he did not receive such an offer.

[10] Mr. Pantalone testified that in August or September 2019, Mr. Varga contacted him and advised that the owner might accept a lower purchase price if the purchaser could come up with an all-cash offer.

[11] On September 18, 2019, Mr. Pantalone sent an email to Mr. Varga that read, “they are willing to pay $4.3m cash please let me know if it is a go.” On September 23, 2019, Mr. Pantalone sent a copy of the survey for the property to Mr. Petrozza.

[12] Mr. Pantalone recalled having a couple of telephone calls with Mr. Varga on September 23 and 24, 2019. His contemporaneous handwritten notes indicate that they discussed structuring the transaction so that the purchaser would pay $4.1 million to the owner and $200,000 to the brokers, to be split equally. Mr. Pantalone has another note dated September 24 that reads “Frank [Varga] called me and told me that we had a deal.”

[13] On the morning of September 25, 2019, Mr. Pantalone sent an email to Mr. Petrozza that read:

Hi Tony, Frank called last night and spoke to the vendor and said we have a deal in principal [sic].

Purchase price $4,100,000

Purchaser to pay commission to Pantalone Realty and GTA Realty $200,000 plus HST paid ONLY on successful closing

Total deal $4,300,000 Closing January 8, 2020 or sooner at your option

Note: Your lawyer can address any issues to Frank directly re: title search etc. as discussed.

When you're ready to close please notify Frank and I and the vendors lawyer will contact your lawyer to prepare necessary paperwork.

Attached is the commission agreement and co-op that Frank and I need you to sign. Any question please feel free to call me.

Thanks JP

***** You may want to consider closing sooner then January 8,2020 to put the deal to rest.

[14] On October 3, 2019, Mr. Petrozza signed the Confirmation of Co-operation and Representation form and the commission agreement to pay $200,000 to Pantalone Realty Corporation Ltd. Brokerage and GTA Realty Ltd. Brokerage on the closing of the transaction. On that same day, Mr. Varga sent a copy of the survey to Mr. Pantalone, who forwarded it on to Mr. Petrozza.

[15] On October 4, 2019, Mr. Pantalone wrote to Mr. Varga to confirm that the two brokerages would evenly split the commission on successful completion of the transaction. Mr. Varga signed and returned the Confirmation of Co-operation and Representation form.

[16] Mr. Petrozza retained Sheldon Berg, an experienced real estate lawyer, to represent the purchaser on the transaction. On October 4, 2019, Mr. Berg wrote to Mr. Varga to advise that he was acting for the purchaser and that he had commenced due diligence with a view to closing on January 8, 2020. Mr. Berg asked Mr. Varga to provide the name and contact information of the owner’s lawyers. Mr. Varga responded the same day and requested that Mr. Berg direct any question about title to him. Mr. Varga did not provide contact information for the owners’ lawyers at this time.

[17] On October 7, 2019, Mr. Berg obtained a tax certificate that showed $60.45 in unpaid property taxes for the current year. Mr. Petrozza arranged for a Phase I Environmental Review to be done on the property.

[18] On December 5, 2019, Mr. Berg wrote to David Dolson, a lawyer. Mr. Berg indicated that he acted for the purchaser and that he understood that Mr. Dolson acted for the owner. Mr. Berg requested that Mr. Dolson provide a draft transfer, statement of adjustments, surveys, plans, and tax bills in his client’s possession. Mr. Berg indicated that he would separately provide a draft agreement of purchase and sale.

[19] On December 8, 2019, Mr. Dolson sent a letter and enclosures to Mr. Berg. The letter read as follows:

2380673 Ontario Inc. sale to 2730453 Ontario Inc.

1456 Lower Base Line East, Milton

Closing Date: January 8, 2020

Your File No.: B/11840

My File No.: R19-292

Further to your letter dated December 5, 2019, I confirm that I act for the vendor in the above transaction.

Please find enclosed draft documents which will be executed by the vendor for delivery to your office on closing. I will forward the Statement of Adjustments upon receipt of tax information from my client. I confirm that the transfer has been messaged in accordance with your instructions.

Please provide your client's HST Warranty and Indemnity.

I look forward to receipt of the Agreement of Purchase and Sale as mentioned in your letter dated December 5, 2019.

[20] Mr. Dolson included with his letter unsigned copies of the vendor’s closing certificate, the statutory declaration of the vendor, and document registration agreement.

[21] On December 9, 2019, Mr. Pantalone asked Mr. Varga to send him the invoice for his commission arising from the transaction.

[22] On December 17, 2019, Mr. Berg wrote to Mr. Dolson and provided a list of requisitions for the transaction and an HST Certificate and Indemnity. One of the requisitions was for a release of the easement on title. On December 23, 2019, Mr. Dolson responded to Mr. Berg’s requisitions. The letter stated, in part:

14. Transaction is subject to HST. I acknowledge receipt of your client's draft HST Certificate & Indemnity.

15. Our draft documents were previously faxed to your office and have been executed by the vendor and will be delivered to your office on or before closing.

16. The property is being sold subject to this easement and your client is expected to assume. It is not being removed. If your client does not want the property subject to this easement then we have no deal.

17. I will provide a Special Resolution on closing in our form. As this contains the name of the Shareholders it will not be provided until then. Certificate of Incumbency will be provided on closing.

[23] Mr. Berg testified that on December 24, 2019, he learned from Mr. Pantalone that the owner was threatening to cancel the deal over the easement issue. Mr. Berg sent an email to Mr. Dolson. He stated that his clients were prepared to close the transaction on January 8, 2020, but he understood that there might be an issue to discuss. Mr. Pantalone also emailed Mr. Varga and suggested that he call Mr. Berg. Mr. Berg’s evidence was that he spoke with Mr. Varga and that they resolved the easement issue a few days after December 25, 2019.

[24] On January 3, 2020, Mr. Berg sent a copy of the signed agreement of purchase and sale for the property to Mr. Dolson. He asked Mr. Dolson to have his client sign a copy and to deliver all required closing documents, including a direction regarding funds, on January 8, 2020.

[25] On January 5, 2020, at 2:00 a.m., Mr. Segal, using an email account named “Charles Harvey,” forwarded Mr. Berg’s January 3 message to Mr. Dolson and the signed agreement of purchase and sale to Mr. Varga. Mr. Segal’s message read as follows:

NOTE THAT THE UNION GAS EASEMENT IS NOT MENTIONED!!!!! But in Schedule A it requires the discharge of all liens and encumbrances.

Also note that there is no mention of payment by wire only by draft or certified cheque. (Also in Schedule A)

There will be no transfer by message or otherwise of this signed document until the money has been received by Dolson by bank wire.

[26] Two hours later, at 4:00 am, Mr. Segal sent another message to Mr. Varga. The subject line of the message was “No closing”. The body of the message said, “There will be no closing. Berg is the problem.”

[27] At 10:25 a.m. on January 5, 2020, Mr. Varga wrote an email to Mr. Berg and Mr. Pantalone. The message stated:

John & Sheldon

The seller is very frustrated with your asking for a discharge of all liens; as agreed title is to be accepted as is. There seems to be duplication of questions, new questions/requisitions, who is driving this you or your junior?

Attached is my draft version of Sch A amendment, subject to Dolson approval.

Seller wants wire transfer of funds, can you accommodate him?

Please let me know if you are in Florida or Toronto.

If you are in Florida, then perhaps closing, if any, should be upon your return.

[28] Mr. Varga’s draft version of the Schedule A read as follows:

The Buyer agrees to pay the balance of the purchase price, subject to adjustments, by bank draft or certified cheque to the Seller, on the completion of this transaction.

The Seller agrees, subject to clause 12 of the Agreement of Purchase and Sale, to discharge all mortgages on or before closing at their own expense.

Nothwithstanding anything to the in [sic] this Agreement of Purchase and Sale, the Buyer agrees to take title to the property as registered, and without limiting the generality of the foregoing, title will be taken subject to and together with any presently registered rights, rights-of-way or easements.

Any commissions due with respect to this transaction shall be paid by the Buyer in addition to the Purchase Price.

[29] At 10:32 a.m., Mr. Pantalone emailed Mr. Berg and said:

Hey Shelly sorry to bother you on a Sunday but Frank Varga just called me telling me we have a problem again. I think your office sent some documents over which were incorrect??? Frank is sending the schedule to you and I that Frank revised and that they want in the agreement. Please call Frank to discuss when you receive it. Thanks JP

[30] At 10:33 a.m., Mr. Berg sent a message to Mr. Varga and Mr. Pantalone, which said:

Frank: I am returning to Toronto tomorrow and will be there for the 8th. The wire transfer of funds is no problem.

I am not sure what issues are frustrating the Seller. I am handling this deal myself and I have not asked for any documents other then those we spoke about and confirmed in [my] last email to you. I assure you there will not be a problem and the closing should take place without any issues.

The amendment to the APS you sent me is acceptable.

[31] Mr. Berg’s evidence was that this resolved the last of the issues and he received no further expressions of concern about the form or content of the closing documents.

[32] On January 6, 2020, Mr. Berg sent a message to Mr. Varga and Mr. Pantalone asking Mr. Varga to have the owner sign the amended agreement of purchase and sale and have it delivered on closing, when the purchaser would sign it.

[33] On January 7, 2020, Mr. Berg sent an email to Mr. Dolson. He attached a signed copy of the agreement of purchase and sale that included the revised Schedule A. Mr. Berg asked Mr. Dolson to have the owner sign the agreement as soon as possible. Mr. Berg explained that the original could follow on closing, but that he needed a signed agreement to complete the application for title insurance. Mr. Dolson did not respond to this message.

[34] On January 8, 2020, Mr. Berg sent the closing documents to Mr. Dolson by email and courier. The cover letter stated:

Pursuant to the terms of the Document Registration Agreement, enclosed please find the following;

1. Document Registration Agreement. Please provide us with a fully signed copy for our files;

2. Direction re Title and Purchaser's Undertaking to Readjust, in duplicate;

3. HST Certificate and Indemnity, in duplicate.

The foregoing documents are to be held by you in escrow pending receipt of the fully signed Agreement of Purchase and Sale (previously emailed to you) and the vendor's closing documentation.

Upon receipt of your documentation, we will wire transfer the closing funds to your trust account. Please immediately provide us with your wire transfer instructions.

Upon receipt of the funds, the Transfer is to be released for registration.

We will advise you forthwith upon the successful registration of the Transfer at which point you may release the funds.

May we please hear from you forthwith.

[35] On January 8, 2020, at 12:38 p.m., Mr. Berg sent an email to Mr. Dolson, with copies to Mr. Varga, Mr. Pantalone, and Mr. Petrozza. He wrote:

[May] I please hear from you forthwith on this matter. I am in funds and ready to complete this transaction[.] Please immediately forward the requisite closing deliverables, including a Direction re Funds and your wire transfer instructions, to your trust account.

Please message the Transfer to Sheldon Joel Berg.

[36] Two hours later, Mr. Berg sent another message to Mr. Dolson, which read:

In light of your failure to respond to my emails, deliveries and phone calls, today, I have been instructed to take all necessary steps to protect my clients interests in the property. In that regard please confirm that you will make yourself available later this afternoon for an appointment to tender in connection with this transaction.

We are able to wire transfer the closing funds to your trust account as requested, by Frank Varga, your client's agent. If we need to tender, however, in lieu of a wire we will be preparing a certified cheque drawn on our trust account for the full balance due on closing payable to your clients.

We confirm that the original of our closing package, previously emailed to you, has been delivered to your office. Please confirm your availability around 4:00PM for the tender. My associate, Bryan Kravetz, will attend on the tender appointment.

[37] Mr. Berg testified that when he spoke to Mr. Dolson, he provided no substantive explanation for the owner’s conduct. Mr. Dolson said only that the owner refused to close as agreed upon. In response, on January 9, 2020, Mr. Berg emailed Mr. Dolson to confirm that the purchaser had tendered on January 8. He attached a copy of the certified cheque for the closing funds, which Mr. Dolson had acknowledged receiving, and a copy of the caution that the purchaser had registered on title. Mr. Berg stated that the purchaser reserved all of its rights in connection with the owner’s failing default in completing the closing of the transaction.

[38] On September 24, 2021, Associate Justice Robinson issued a certificate of pending litigation over the disputed property, which the purchaser then registered on title.

The parties’ positions on liability

[39] I will briefly set out the position of the purchaser and the owner and then will address the key matters in dispute in more detail.

The purchaser’s position on liability

[40] In September 2019, the owner agreed to sell the property to the purchaser for $4.1 million, the purchaser would pay the $200,000 commission to the brokers, and the transaction would close on or before January 8, 2020. Mr. Segal told Mr. Varga that he agreed to those terms. Mr. Varga relayed that message to Mr. Pantalone.

[41] Mr. Segal preferred not to prepare a written agreement of purchase and sale at that time. He wanted the lawyers to prepare the written agreement shortly before closing. The purchaser agreed to accommodate his preference.

[42] In October, Mr. Berg exchanged messages with Mr. Varga regarding the due diligence and any questions about title. In December 2019, Mr. Berg wrote to Mr. Dolson about the pending transaction. Mr. Dolson acknowledged that he was retained to act on the transaction. Thereafter, counsel exchanged drafts of the usual closing documents.

[43] The owner’s counsel and agent raised minor issues related to the language of the agreement of purchase and sale, but they were quickly resolved by the purchaser and never threatened the deal. On January 8, 2020, the purchaser sent all necessary closing documents to Mr. Dolson, but he never responded. The purchaser tendered the closing funds and Mr. Dolson acknowledged receipt. The owner breached the agreement by refusing to close without lawful excuse.

[44] The purchaser submits that it had a binding agreement to purchase the property from the owner. The Statute of Frauds does not prevent the enforcement of this agreement for two reasons. First, the correspondence between the parties is sufficient to satisfy the writing requirement of s. 4. Second, the doctrine of part performance applies, and the owner cannot rely on the Statute of Frauds to avoid performance.

The owner’s position on liability

[45] In September 2019, Mr. Pantalone and Mr. Varga communicated about a potential deal for the purchaser to buy the property. They discussed an all-cash deal for the property and a commission agreement that would see each of them earn a $100,000 commission if the deal closed. Mr. Varga advised Mr. Segal about the communications, which piqued Mr. Segal’s interest. Throughout the fall of 2019, there were ongoing discussions among: Mr. Pantalone, Mr. Varga, Mr. Petrozza, Mr. Berg, Mr. Segal, and Mr. Dolson but this was only with a view to moving toward a deal and eventual closing on January 8, 2020.

[46] In December 2019, Mr. Segal became fed up with the “antics” of Mr. Berg, who was trying to create a transaction that was more complicated than necessary. Mr. Varga also saw that the agreement of purchase and sale was drafted incorrectly and needed to be amended.

[47] Mr. Segal finally decided to terminate negotiations because Mr. Berg was “attempting to stipulate that the closing funds would be held in trust until he gave his benediction for them to be released.” This caused Mr. Segal to conclude that Mr. Berg was attempting “to assume total control of the transaction.”

[48] The owner submits that no agreement of purchase and sale was produced until January 7, 2020. This agreement contained a clause that said it was irrevocable by the purchaser until 6:00 pm on January 8, 2020. The owner never signed back that agreement of purchase and sale. The parties never reached an agreement, and the Statute of Frauds is a complete bar to recognizing this purported sale.

Assessing credibility

[49] Several of the witnesses told quite different versions of events. To determine the issues raised in this action, I must assess the reliability and credibility of the witnesses. One of the leading decisions on assessing credibility is Faryna v. Chorny, 1951 CanLII 252 (BC CA), [1952] 2 D.L.R. 354 (B.C.C.A.); Phillips et al. v. Ford Motor Co. of Canada Ltd. et al., 1971 CanLII 389 (ON CA), [1971] 2 O.R. 637 (C.A.). In Faryna, at pp. 356-358, the court explained that:

If a trial Judge's finding of credibility is to depend solely on which person he thinks made the better appearance of sincerity in the witness box, we are left with a purely arbitrary finding and justice would then depend upon the best actors in the witness box. On reflection it becomes almost axiomatic that the appearance of telling the truth is but one of the elements that enter into the credibility of the evidence of a witness. Opportunities for knowledge, powers of observation, judgment and memory, ability to describe clearly what he has seen and heard, as well as other factors, combine to produce what is called credibility, see Raymond v. Bosanquet Tp. (1919) 1919 CanLII 11 (SCC), 59 S.C.R. 452, at 460. A witness by his manner may create a very unfavourable impression of his truthfulness upon the trial Judge and yet the surrounding circumstances in the case may point decisively to the conclusion that he is actually telling the truth. I am not referring to the comparatively infrequent cases in which a witness is caught in a clumsy lie.

The credibility of interested witnesses, particularly in cases of conflict of evidence, cannot be gauged solely by the test of whether the personal demeanour of the particular witness carried conviction of the truth. The test must reasonably subject his story to an examination of its consistency with the probabilities that surround the currently existing conditions. In short, the real test of the truth of the story of a witness in such a case must be its harmony with the preponderance of the probabilities which a practical and informed person would readily recognize as reasonable in that place and in those conditions. Only thus can a court satisfactorily appraise the testimony of quick-minded, experienced and confident witnesses, and of those shrewd persons adept in the half-lie and of long and successful experience in combining skilful exaggeration with partial suppression of the truth. Again a witness may testify what he sincerely believes to be true, but he may be quite honestly mistaken. For a trial Judge to say "I believe him because I judge him to be telling the truth," is to come to a conclusion on consideration of only half the problem. In truth it may easily be self-direction of a dangerous kind.

The trial Judge ought to go further and say that evidence of the witness he believes is in accordance with the preponderance of probabilities in the case and, if his view is to command confidence, also state his reasons for that conclusion. The law does not clothe the trial Judge with a divine insight into the hearts and minds of the witnesses. And a court of appeal must be satisfied that the trial Judge's finding of credibility is based not on one element only to the exclusion of others, but is based on all the elements by which it can be tested in the particular case.

[50] I am entitled to accept all, some, or none of the evidence of a witness. I will assess the evidence before me according to many factors including:

a. whether the evidence makes sense by being internally consistent, logical or plausible;

b. whether there are inconsistencies or weaknesses in the evidence of the witness such as internal inconsistencies, prior inconsistent statements, or inconsistencies with the evidence of other witnesses;

c. whether there is independent evidence to confirm or contradict the witness’ evidence, or a lack of such evidence;

d. the witness’s demeanour, including their sincerity and use of language, although this must be considered with caution; and

e. whether the witness, particularly one that is a party in a case, may have a motive to fabricate: Caroti v. Vuletic, 2022 ONSC 4695, at paras. 434-436; 1088558 Ontario Inc. v. Musial, 2022 ONSC 5239, at para. 83.

The parties reached an agreement in late September 2019

[51] The first issue to be addressed is whether or not the purchaser and the owner formed a binding contract for the sale of the property in late 2019. It is undisputed that the parties did not sign an agreement of purchase and sale at that time. I find that, nevertheless, they did reach a binding oral agreement.

The law applicable to oral agreements for the purchase and sale of land

[52] The parties agree on the applicable legal principles. The three essential terms of a valid contract for the purchase and sale of land are the identity of the parties, the description of the property at issue, and the purchase price: McKenzie v. Walsh (1920), 1920 CanLII 72 (SCC), 61 S.C.R. 312, at p. 313. If the parties agree on those essential terms, then a contract may be formed without the need for evidence of a written agreement: Mountain v. TD Canada Trust Company, 2012 ONCA 806, 112 O.R. (3d) 721, at para. 66. Counsel for the defendant emphasized that this passage indicates that the court “may” find a contract; it does not say that the court “must” find a contract.

[53] In Erie Sand & Gravel Ltd. v. Seres’ Farms Ltd., 2009 ONCA 709, 97 O.R. (3d) 241, at para. 42, the Court of Appeal held that the binding validity of the original contract is not undermined if the parties intend later to prepare and sign a formal written document:

[W]here parties have agreed on all the essential provisions to be incorporated into a formal document and they intend the agreement to be binding, a valid and binding agreement exists - the existence of the agreement does not depend on the formal written document. The fact that a formal written document is to be prepared and signed does not alter the binding validity of the original contract.

[54] Three witnesses provided the key evidence on the question of whether or not the parties reached an agreement on September 24, 2019: Mr. Segal, Mr. Varga, and Mr. Pantalone.

Mr. Varga’s evidence

[55] Mr. Varga has been in the real estate business since 1989. He is an experienced real estate broker with GTA Realty, which is a company that he owns. He is a member of various real estate professional associations. He testified that one of his primary duties is communicating any offers to purchase that he receives to his clients and obtaining instructions from his client in respect of those offers. In this case, he did not have authority to make a decision for the owner, his job was limited to relaying instructions from his client.

[56] Mr. Varga has known Mr. Segal for about 20 years. He assisted Mr. Segal when Union Gas purchased a few acres of the disputed property. Mr. Varga considered Mr. Segal to be a very shrewd and sophisticated businessman. Through his dealings with Mr. Segal, Mr. Varga understood that once Mr. Segal had agreed to the terms of a transaction, he preferred to have the agreement of purchase and sale prepared by the lawyers at the time of closing. Mr. Varga understood that Mr. Segal liked to have transactions done in a simple, straightforward, and precise fashion that resulted in a clean deal.

[57] Mr. Varga testified that on September 18, 2019, he received an email from Mr. Pantalone offering $4.3 million in cash for the property at 1456 Lower Base Line. Mr. Varga did not turn his mind to the person who was making the offer, but he knew that the proposed purchaser owned the neighbouring property.

[58] Mr. Varga testified that he communicated that offer to Mr. Segal and explained that the potential purchaser was offering a premium because it was a neighbour who wanted to buy the property. Mr. Varga testified that Mr. Segal instructed him to accept the deal on the terms that the purchaser would pay $4.1 million to the owner and $200,000 in commissions to the brokers. He communicated Mr. Segal’s acceptance to Mr. Pantalone on September 23 or 24, 2019.

[59] Mr. Varga told Mr. Pantalone that no agreement of purchase and sale would be done at that time and that the lawyers would paper the deal at closing. Mr. Varga testified that he believed Mr. Segal had lingering doubts about whether or not the purchaser would actually come up with the required funds. Mr. Varga believed that the agreement should come together through a normal closing on or before January 8, 2020.

[60] Counsel for the owner pressed Mr. Varga on whether or not the parties reached a “firm deal in September 2019 with all terms agreed to.” Mr. Varga clearly testified that the parties agreed to the all-cash deal price, closing date (give or take a few days), and the commission structure. He believed that the purchaser wanted a period to do some environmental due diligence, to confirm that title is clean, and to draw the appropriate corporate resolutions. He understood that Mr. Segal believed the same things. Mr. Varga believed that there was a very high probability that would all work out and the deal would close.

[61] Mr. Varga testified that he never saw a written document from Mr. Segal confirming the terms of an agreement for this property. He carefully (and appropriately) refused to offer an opinion on whether or not the facts that he described would amount to a valid and enforceable agreement for the purchase and sale of land.

Mr. Pantalone’s evidence

[62] Mr. Pantalone testified that he understood Mr. Varga to be acting as real estate agent for the owner. He understood that Mr. Varga had authority to negotiate and enter into binding agreements on behalf of the owner, if Mr. Varga received those instructions and approval from the owner.

[63] Mr. Pantalone recalled that, in August 2019, Mr. Varga advised him that there was a chance to reach an agreement to sell the property because the owner was thinking about moving to Florida. Mr. Varga told Mr. Pantalone that the owner wanted an all-cash deal, without a vendor take-back mortgage.

[64] On September 18, Mr. Pantalone sent an email to Mr. Varga that offered to pay $4.3 million cash for the property. Mr. Pantalone recalled a series of telephone calls with Mr. Varga over the next few days and that he made contemporaneous notes of those calls on a printed copy of the September 18 message. On one of those calls, Mr. Varga said that the owner wanted to know exactly what he was going to receive in the deal. Mr. Pantalone went to Mr. Petrozza and asked if he was prepared to pay $4.1 million to the owner and $200,000 to the brokers for their commissions. Mr Petrozza agreed, and Mr. Pantalone relayed that offer to Mr. Varga.

[65] On September 23 or 24, 2019, Mr. Pantalone recalled Mr. Varga calling him to say that “we have a deal” and that Mr. Segal accepted the last offer they had discussed. Mr. Pantalone recalls that he and Mr. Varga confirmed that the agreement was as follows: sale of the property for $4.1 million; purchaser to pay $200,000 plus HST to the brokers on closing; and the transaction to close no later than January 8, 2020, or on any earlier date the purchaser wanted.

[66] Mr. Pantalone testified that Mr. Varga told him that Mr. Segal had previously purchased land by reaching an agreement and then having the lawyers prepare the agreement of purchase and sale at closing.

[67] On September 25, 2019, Mr. Pantalone advised Mr. Petrozza that the owner had accepted the offer and that the purchaser’s lawyer could contact Mr. Varga with any questions about the title search. He also told Mr. Petrozza to have his lawyer contact the owner’s lawyer when the time came to prepare the paperwork necessary to close the transaction.

[68] In cross-examination, counsel for the owner suggested to Mr. Pantalone that he was motivated in giving his evidence by the prospect of earning the $100,000 commission if the deal closed.

Mr. Segal’s Evidence

[69] Mr. Segal has been in the business of buying and selling real estate for some 60 years. Mr. Segal testified that at no time did Mr. Varga have authority to enter into an agreement of purchase and sale on behalf of the defendant and with respect to the property. Mr. Segal said that Mr. Varga had no authority to act on behalf of the defendant in any dealings with Mr. Pantalone.

[70] Mr. Segal testified that he never agreed to sell the property to the purchaser and never gave instructions to Mr. Varga to accept a price of $4.1 million for the sale of the property. On cross-examination, Mr. Segal went further and stated that Mr. Varga did not tell him that Mr. Varga had received “an offer” for $4.3 million for the property. He later stated that he did not consider something an offer unless it was in writing. Otherwise, it was just an “expression of interest.” Mr. Segal testified that Mr. Varga may have mentioned that there was somebody out there who was of a mind to make an offer of that size. He stated that Mr. Varga may have started making “utterances” that caught his attention. When pressed on cross-examination to agree that Mr. Varga told him that there was a group prepared to pay $4.3 million for the property, Mr. Segal stated that Mr. Varga “told him a lot of things and that this is probably one of the things he told me.”

[71] Mr. Segal’s affidavit stated, “At no time was a purchase price discussed with me or agreed upon by me”. On cross-examination, Mr. Segal stated that “technically speaking, [that] sentence is correct” because “technically” if Mr. Varga called him up and said there is somebody out there who wanted to pay “so and so,” one could consider that a purchase price, but not a discussion. Mr. Segal stated that both “discussion” and “purchase price” were precise words. If Mr. Varga called him up and said, “somebody said they would do this and that,” that was not the precise kind of conversation that Mr. Segal would consider to be a discussion about a purchase price. Mr. Varga might have said it and Mr. Segal might have “grunted and said goodbye.”

[72] Mr. Segal testified that his deal style was to work out all of the legalities of the deal and paper the deal and then sit down to talk about price. He allowed that this was “perhaps a little bit devious” but explained that he did not like to talk about money and, therefore, left it to the end of the process.

[73] Mr. Segal admitted that at some point in fall 2019, he became aware through Mr. Varga that he was communicating with Mr. Pantalone about a potential sale of the property. He also learned that Mr. Petrozza was prepared to offer all-cash, which was “music to my ears.” Mr. Segal admitted that when Mr. Varga conveyed Mr. Petrozza’s offer of $4.1 million and the $200,000 commission, Mr. Varga told Mr. Segal that he was getting a premium because the neighbour was involved but that “one should not forget” that Mr. Varga had a “$100,000 commission riding on that statement” and that he was motivated by that commission.

[74] Mr. Segal denied that there was ever a closing date. The January 8, 2020, date was just an item on Mr. Petrozza’s “wish list.”

Conclusion

[75] I accept the evidence of Mr. Varga. I found him to be a very reliable and credible witness. His evidence was internally consistent, logical, and plausible. He readily acknowledged the limits on his authority and stated that he did not have authority to bind the owner to any particular deal. He saw his role as delivering offers to his client and communicating his client’s acceptance or rejection of those offers. His actions were completely consistent with his stated understanding of his authority and the balance of his evidence.

[76] Indeed, as a real estate agent, he had a professional responsibility to ensure that he was accurately reporting the offers to his client and accurately reporting his client’s acceptance or rejection of those offers. I accept his evidence that he delivered an offer of $4.3 million to Mr. Segal and that he told Mr. Segal that he would be receiving a premium because the offer was from the neighbour. Mr. Varga went back to Mr. Pantalone to discuss having the purchaser pay the commission to the brokers to fix the amount to be received by the owner, and then went back to Mr. Segal to obtain instructions on that offer. Mr. Pantalone confirmed this evidence. Given his detailed and careful testimony, I do not accept that Mr. Varga misunderstood Mr. Segal’s acceptance of the offer. There is nothing more important to an experienced real estate agent than ensuring that he correctly understands his client’s acceptance of an offer to purchase.

[77] All of Mr. Varga’s contemporaneous actions were consistent with his testimony. He immediately reported to Mr. Pantalone that the owner had agreed to the offer. He signed the brokers’ cooperation agreement that was consistent with the agreement. In early October, he exchanged messages with counsel for the purchaser indicating that he was available to answer any questions about title as the parties closed the deal.

[78] I accept that Mr. Varga will likely receive a $100,000 commission if the court orders specific performance of the agreement. I do not think that this fact amounts to a motive for Mr. Varga to fabricate his evidence or undermines his credibility. Almost all of the witnesses in this case have an economic interest in its outcome. Mr. Petrozza wants to acquire the land for a price he sees as favourable to his economic interests. Mr. Pantalone and Mr. Varga may each earn his commission. Mr. Segal does not wish to part with the property for $4.1 million, presumably because he thinks it is worth more than that. Even taking Mr. Varga’s commission into account, I find his evidence credible and reliable.

[79] Mr. Varga’s evidence was also very clear that the purchaser and the owner agreed to the all-cash deal price, the closing date (give or take a few days), and the commission structure. The reason that the agreement was not immediately reduced to writing was Mr. Segal’s preference to do that at the time of closing. He was certain about these facts and his evidence was unshaken. He described his conversations with Mr. Segal clearly and with particularity. His only uncertainty was regarding the legal effect of these facts. That does not cause me to doubt his evidence about the facts. The issue of whether or not his evidence, if believed, amounts to a binding agreement is for the court to decide. I accept his evidence.

[80] I also find Mr. Pantalone to be a credible and reliable witness. I must be cautious, however, in how I use his evidence. I accept Mr. Pantalone’s evidence about the course of his negotiations with Mr. Varga, particularly as they are confirmed by his contemporaneous written notes. I also accept that Mr. Varga told him that Mr. Segal accepted the offer. That statement is admissible for the fact that Mr. Varga said it. Mr. Pantalone, however, did not speak directly with Mr. Segal; he only spoke with Mr. Varga. Mr. Varga’s statement to Mr. Pantalone about what Mr. Segal said to Mr. Varga is hearsay and is inadmissible for the truth of its contents.

[81] That leaves the evidence of Mr. Segal. Where the evidence of Mr. Varga contradicts the evidence of Mr. Segal, I prefer Mr. Varga’s evidence for the following reasons.

[82] First, Mr. Varga’s evidence was much more precise and straightforward than was Mr. Segal’s evidence. Mr. Segal repeatedly quibbled with counsel for the purchaser about the meaning of readily understandable terms, including when he was challenged effectively on prior inconsistent statements. I do not think this was because Mr. Segal was attempting to use precise language. In my view, he was attempting to obfuscate meaning and to create space to move away from the words in his own affidavit and evidence. In his affidavit, Mr. Segal categorically stated that “At no time was the purchase price discussed with me….” That statement is directly contradicted by the evidence of Mr. Varga. Mr. Segal tried to avoid that contradiction by offering an artificially narrow meaning of “discussion” and “purchase price.” Mr. Segal’s evidence on this point was implausible.

[83] Mr. Segal repeatedly tried to make his conversations with Mr. Varga seem much vaguer than I find them to have been. I do not accept Mr. Segal’s characterization of what Mr. Varga told him as “feedback” or “an expression of interest” from the neighbouring landowner. I find that by late September 2019, Mr. Varga relayed to Mr. Segal a clean, concrete, readily understandable offer to purchase the property. Mr. Segal was having this conversation with his real estate agent. Whether or not there was an open listing, Mr. Segal relied on Mr. Varga as a real estate agent and to work on the closing of this transaction along with Mr. Dolson. I do not accept Mr. Segal’s evidence on this point. I prefer the very clear recollection of Mr. Varga that he spoke with Mr. Segal first about the neighbour offering $4.3 million for the property and, second, that the neighbour would agree to pay the $200,000 commission on top of $4.1 million to the owner.

[84] Second, Mr. Segal’s evidence is inconsistent with his own actions and the actions taken by his lawyer, Mr. Dolson, on this file.

[85] When Mr. Segal walked away from the transaction, he wrote an e-mail at 4:00 a.m. to Mr. Varga. The subject line of the message was “No closing”. The body of the message said, “There will be no closing. Berg is the problem.” Mr. Segal did not say “we will now stop negotiating towards an agreement.” Instead, he twice said there will be no closing. I find that this is evidence that Mr. Segal knew that the parties had reached an agreement in September and were now engaged in the process of closing that agreement.

[86] Mr. Segal chose to maintain a claim of solicitor-client privilege over his communications with Mr. Dolson and did not call him as a witness. Mr. Segal had every right to do so. The plaintiff asked me to draw an adverse inference against Mr. Segal because he failed to call Mr. Dolson as a witness. I decline to do so as, in these circumstances, such an inference might well undermine Mr. Segal’s substantive right to solicitor-client communication privilege: Goldstein v. Walsh, 2018 ONSC 2978, at para. 157; Computron Systems International Inc. v. Ladhani et al., 2020 ONSC 3188, at para. 71; Ting v. Grenier (2008), 2008 CanLII 4986 (ON SC), 58 C.C.L.I. (4th) 235 (Ont. S.C.), at para. 20.

[87] However, Mr. Segal’s decision means that there is no evidence from Mr. Dolson to corroborate Mr. Segal’s version of events. This could have included discussions between Mr. Dolson and Mr. Berg that would not have been privileged. In addition, where Mr. Segal’s evidence is inconsistent with Mr. Dolson’s letters to Mr. Berg, I prefer the contemporaneous written record created by Mr. Dolson, who had professional obligations of candour and forthrightness.

[88] On December 8, 2019, Mr. Dolson wrote to Mr. Berg and confirmed “that I act for the vendor in the above transaction” and that he enclosed “draft documents that will be executed by the vendor for delivery to your office on closing.” Mr. Segal testified that the owner had not retained Mr. Dolson to close the transaction for the sale of the property. Instead, Mr. Segal testified, Mr. Dolson was to “become involved with these people” and have “discussions about things,” while Mr. Segal watched carefully to see what transpired. Mr. Segal testified that when Mr. Dolson wrote “I act” it “means something different than what it might normally mean” and that “[i]t means what I say it means, I think, in my mind.” I do not accept that the meaning of the words used by Mr. Dolson, a lawyer, in correspondence to another lawyer, depend on the subjective meaning ascribed to those words by Mr. Segal. I do not accept Mr. Segal’s characterization of the purpose of Mr. Dolson’s retainer because it is inconsistent with Mr. Dolson’s correspondence to Mr. Berg. I am not prepared to give Mr. Dolson’s words the idiosyncratic subjective meaning urged by Mr. Segal.

[89] Mr. Segal also testified that he never agreed to a closing date and that January 8, 2020, was just an item on the purchaser’s “wish list.” However, Mr. Dolson’s first letter to Mr. Berg referenced January 8, 2020, as the closing date for the transaction. At no time did Mr. Dolson ever state in writing to Mr. Berg or anyone else that there was no agreement to close on or before January 8, 2020.

[90] Similarly, neither Mr. Segal nor Mr. Dolson ever raised the issue of the purchase price of the property before Mr. Segal decided that he would not proceed with the transaction. Even on or before January 5, 2020, when he received the draft agreement of purchase and sale from the purchaser, which Mr. Segal described as a “gratuitous document,” the purchase price was not one of the issues on which Mr. Segal provided comments. Mr. Segal testified that this was because he was engaging in his “perhaps a little bit devious” practice of settling all of the other issues in the deal before discussing price. I find that it is far more likely that he did not raise the purchase price because the parties had agreed on it back in September 2019.

[91] I prefer the contemporaneous letters of Mr. Dolson and find that the owner retained Mr. Dolson to close the transaction on or before January 8, 2020, on the terms to which the parties agreed in late September.

[92] Third, I am also very troubled by Mr. Segal’s admitted willingness to say things under oath when he has no foundation for those statements. Mr. Segal admitted that during an out of court examination in this proceeding, he stated that he believed that Mr. Berg was intentionally trying to kill the deal so that Mr. Berg could later resurrect it and attempt to earn an amount equivalent to the broker’s commission, instead of his lawyer’s fee for closing the transaction. On cross-examination, Mr. Segal admitted that his prior evidence was “speculation based on nothing,” that he could not “back that up,” that he had “no basis” for the evidence he provided under oath. Mr. Segal also testified before me that he would not say something like that publicly about Mr. Berg.

[93] Counsel for the plaintiff then put the following propositions to Mr. Segal:

Q. I'm going to suggest to you, and I'm going to suggest tomorrow to His Honor, that when we consider your evidence under oath that you are capable of saying things that are without foundation, just like you did about Mr Berg.

A. I would say that that's fair and I would agree. And I think we all are like that in a way.

Q. We are not.

A. I’m sorry. I'm sorry, maybe I'm, you know, different.

[94] Although Mr. Segal apologized for making these unfounded statements about Mr. Berg and said that he wished he could retract it, it causes me to view all of his evidence with great skepticism. This is particularly so where his evidence is not corroborated by any written documentation.

[95] In conclusion, I find that Mr. Varga’s evidence is in accordance with the preponderance of probabilities in the case. An objective, reasonable bystander would conclude that the parties intended to contract: UBS Securities Canada Inc. v. Sands Brothers Canada Ltd., 2009 ONCA 328, 95 O.R. (3d) 93, at para. 47; Erie Sand & Gravel, at paras. 43-47.

[96] I find that on September 23 or 24, 2019, the purchaser and the owner entered into a binding oral agreement for the purchase and sale of the disputed property. I find that they agreed on all essential terms: the owner would sell the disputed property to the purchaser, whom the owner knew to be the owner of the neighbouring land, for $4.1 million cash. The purchaser would be responsible to pay $200,000 commission to the brokers if the agreement closed on or before January 8, 2020.

The purchaser did not breach the agreement between the parties

[97] It is undisputed that the owner did not close the transaction. In find that the owner did not have the right to do so. The purchaser did not breach or repudiate the agreement to permit the owner to refuse to close the transaction. Mere annoyance with Mr. Berg’s drafting, correspondence, or manner are insufficient to permit the owner not to close the agreement.

[98] It is common for parties to disagree about the language of closing documents. Negotiations over the form and content of those documents neither breaches nor voids the original agreement. As the Federal Court of Appeal put it in Betser-Zilevitch v. Nexen Inc., 2019 FCA 230, 92 B.L.R. (5th) 179, at paras. 3 and 5:

The fact that the agreement in principle had to be followed by a formal agreement, and that various disagreements emerged between the parties in the course of drafting that formal agreement, do not detract from the fact that there was an agreement reached on the essential terms spelled out in the parties’ correspondence. Disagreeing over the interpretation to be given to the agreement, or over unessential terms, does not void the initial agreement.

The mere fact that the parties disagreed on some of the terms of the agreement when they undertook to formalize it does not make those terms any more essential than those terms over which they agreed. As this Court stated in Allergan, “continuing disagreement over unessential terms is immaterial”. The attempt by either one of the parties to obtain more than was previously agreed does not constitute evidence that there was no agreement on the essential terms of the settlement at the time the appellant offered to settle the action and the respondents accepted that offer.

[99] In my view, all of the disagreements between the purchaser and owner regarding the closing documents were either negotiations that resolved in favour of the owner or were disagreement over terms that were not essential. None of the disagreements, considered separately or together, justified in law the owner’s decision to refuse to close the transaction.

[100] The first disagreement was regarding the easement on the property. On December 8, 2019, Mr. Berg requested that the owner remove the easement prior to closing. On December 17, 2019, Mr. Dolson responded by saying no, the easement would not be removed, and the agreement contemplated the purchaser taking the property as is. Mr. Berg testified that his client did not insist on the easement being removed and agreed to close the transaction and to take title “as-is.” The substance of this dispute appears to have been resolved in favour of the owner’s position by the end of December 2019.

[101] On January 3, 2020, Mr. Berg sent a copy of the written agreement of purchase and sale to Mr. Dolson. On January 5, 2020, Mr. Segal objected that the easement was not specifically mentioned and that Schedule A to the agreement required the discharge of all liens and encumbrances. This was not acceptable to Mr. Segal. Mr. Varga then sent Mr. Berg a revised Schedule A that addressed the issues of concern to Mr. Segal. Eight minutes later, Mr. Berg accepted the revised Schedule A.

[102] In my view, the issue of the easement was an essential term of the deal. Had the purchaser insisted on the easement being removed, the purchaser may well have breached the original agreement, which did not provide for the removal of the easement. However, the purchaser did not insist on this point and the final documentation reflected the terms of the agreement between the parties.

[103] Second, in its submissions, the owner pointed to the fact that the agreement of purchase and sale stated that the offer was irrevocable until 6:00 p.m. on January 8, 2020, after which time, if not accepted, the offer shall be null and void. I find that the inclusion of this clause is irrelevant to the issues in dispute. The agreement of purchase and sale was capable of being signed by the owner at any time before the agreed upon closing date. The agreement of purchase and sale provided that the agreement must be completed no later than the 6:00 p.m. on January 8, 2022, so it mirrored the timing of the revocability clause. The agreement of purchase and sale, with this typical clause, was delivered close to closing because that was Mr. Berg’s request. The owner never raised any issue about this clause with the purchaser. I find that the presence of this clause in no way affects the finding that an agreement had been reached in September and was to close on or before January 8, 2020: Erie Sand & Gravel, at paras. 25-26

[104] The third disagreement arose over how the funds were to be delivered. Mr. Berg had originally proposed that the purchaser would deliver a certified cheque for the purchase price. This was unacceptable to Mr. Segal, who testified that a certified cheque was not worth the paper it was printed on. Mr. Segal insisted that the purchaser wire the funds to Mr. Dolson’s trust account. Mr. Varga raised this issue on January 5, 2020. Eight minutes later, Mr. Berg agreed that the purchaser would wire the funds. Whether or not this is an essential term of the deal, and I doubt that it is, the dispute was immediately resolved in favour of the owner.

[105] The fourth disagreement was over the release of the funds from Mr. Dolson’s trust account on closing of the transaction. Mr. Berg delivered the required documents on closing and proposed the following sequential chain of events:

a. Mr. Berg to hold the purchaser’s documents in escrow until Mr. Dolson sent the owner’s documents (including the signed agreement of purchase and sale) to Mr. Berg;

b. Mr. Berg to wire the closing funds to Mr. Dolson’s trust account;

c. Mr. Dolson to release the transfer for registration;

d. Mr. Berg to register the transfer, confirm the successful registration, and forthwith advise Mr. Dolson that he could release the funds from his trust account.

[106] Mr. Berg testified that this order of operations is normal and typical in a real estate transaction of this type.

[107] Mr. Segal, in contrast, found this order of operations to be upsetting. In his affidavit he felt that this was Mr. Berg “attempting to put himself in total control” and that if Mr. Berg “decided for whatever reason to withhold his benediction for the release of funds,” Mr. Segal would have to go to court to obtain the release of the funds.

[108] I do not find that Mr. Segal’s complaint is valid. There is no evidence to contradict Mr. Berg’s evidence that this is a typical and normal way to treat the closing funds. Again, Mr. Dolson did not testify. It does not seem unusual to me that, where the purchaser has already wired $4.1 million to Mr. Dolson’s trust account, that money would not be released until the purchaser’s lawyer was satisfied that the registration was successful.

[109] Moreover, there is no evidence that Mr. Varga or Mr. Dolson ever raised this concern with Mr. Berg to see if it could be addressed to the owner’s satisfaction. Mr. Berg’s subjective discomfort with this closing process did not justify his refusal to close the transaction.

[110] Stepping back and viewing the discussion of the closing documents, I reject Mr. Segal’s evidence that he walked away because Mr. Berg was making the deal too complicated. Mr. Berg was not making the deal more complicated. The deal, at all times, was perfectly straightforward. Mr. Segal may not have liked Mr. Berg’s drafting, but all of those issues were resolved and Mr. Segal had no justification for walking away from the agreement.

[111] In conclusion, I find that the purchaser did not breach the agreement. I also find that the purchaser tendered the closing documents and the purchase price. I find that the owner failed to close the transaction without legal justification.

The Statute of Frauds

[112] The owner submits that even if there was an oral agreement, which it denies, that contract is not enforceable because s. 4 of the Statute of Frauds requires that an agreement for the sale of lands needs to be in writing and signed by the party to be charged.

[113] The relevant part of s. 4 of the Statute of Frauds reads as follows:

No action shall be brought…to charge any person upon any contract or sale of lands…unless the agreement upon which the action is brought, or some memorandum or note thereof is in writing and signed by the party to be charged therewith or some person thereunto lawfully authorized by the party.

No sufficient memorandum or note

[114] The plaintiff submits that there is sufficient written or documentary evidence of the agreement for the sale of lands to satisfy the requirement in s. 4 of the Statute of Frauds. The plaintiff points to Mr. Dolson’s letter of December 23, 2019, which indicates that certain draft documents “have been executed by the vendor.” Those documents included the Vendor’s Closing Certificate, the Statutory Declaration of Vendor, and the Document Registration Agreement. In my view, none of these documents describe the terms of the agreement for the purchase and sale of land and are not sufficient to meet the requirements of s. 4 of the Statute of Frauds.

[115] The plaintiff also points to email correspondence between Mr. Pantalone and Mr. Varga, the commission agreement signed by each broker, Mr. Varga’s invoice, the letters exchanged by Mr. Dolson and Mr. Berg, Mr. Segal’s email to Mr. Varga commenting on the draft agreement of purchase and sale, and Mr. Berg sending a signed agreement of purchase and sale to Mr. Dolson. I do not accept that any of these documents, considered separately or together, satisfy s. 4 of the Statute of Frauds. Even if they amounted to a “sufficient note or memorandum” to meet the writing requirement in s. 4 of the Statute of Frauds, the “party to be charged,” the owner, never signed any of these documents. Therefore, these documents cannot meet the requirements of s. 4 of the Statute of Frauds: Erie Sand & Gravel, at para. 50.

Part performance

[116] The Court of Appeal for Ontario has held that the purpose of s. 4 of the Statute of Frauds is to prevent fraudulent dealings in land based on perjured evidence. However, Equity will not allow the Statute of Frauds to be used as an "engine of fraud": Erie Sand & Gravel, at para. 49. For that reason, Equity created the doctrine of part performance. In Hill v. Nova Scotia (Attorney General), 1997 CanLII 401 (SCC), [1997] 1 S.C.R. 69, at para. 10, Cory J. adopted the following explanation of the doctrine from the decision of the House of Lords in Steadman v. Steadman, [1976] A.C. 536 (H.L.), at p. 558:

[This doctrine] was evoked when, almost from the moment of passing of the Statute of Frauds, it was appreciated that it was being used for a variant of unconscionable dealing, which the statute itself was designed to remedy. A party to an oral contract for the disposition of an interest in land could, despite performance of the reciprocal terms by the other party, by virtue of the statute disclaim liability for his own performance on the ground that the contract had not been in writing. Common Law was helpless. But Equity, with its purpose of vindicating good faith and with its remedies of injunction and specific performance, could deal with the situation. The Statute of Frauds did not make such contracts void but merely unenforceable; and, if the statute was to be relied on as a defence, it had to be specifically pleaded. Where, therefore, a party to a contract unenforceable under the Statute of Frauds stood by while the other party acted to his detriment in performance of his own contractual obligations, the first party would be precluded by the Court of Chancery from claiming exoneration, on the ground that the contract was unenforceable, from performance of his reciprocal obligations; and the court would, if required, decree specific performance of the contract. Equity would not, as it was put, allow the Statute of Frauds "to be used as an engine of fraud." This became known as the doctrine of part performance — the "part" performance being that of the party who had, to the knowledge of the other party, acted to his own detriment in carrying out irremediably his own obligations (or some significant part of them) under the otherwise unenforceable contract.

[117] Justice Cory stated that a verbal agreement that has been partly performed will be enforced: Hill, at para. 11. The very purpose of the doctrine of part performance is to avoid the inequitable operation of the Statute of Frauds. This is why the requirement that a contract for the sale of land be in writing will yield in the face of part performance: the part performance fulfills the very purpose of the written contract. If party A to an otherwise enforceable agreement stands by while party B acts to its detriment by performance of its contractual obligations, party A may not rely on the requirements in the Statute of Frauds to excuse its own performance: Erie Sand & Gravel, at para. 64.

[118] In addition, the court may consider the acts of both parties to an alleged oral agreement when determining if sufficient acts of part performance take an alleged agreement outside the operation of the Statute of Frauds: Hill; Mount Sinai Hospital Center v. Quebec (Minister of Health and Social Services), 2001 SCC 41, [2001] 2 S.C.R. 281, at para. 13; Erie Sand & Gravel, at para. 75; Levine v. Davies (1998), 1998 CanLII 3606 (ON CA), 37 O.R. (3d) 252 (C.A.).

[119] To be considered acts of part performance, the acts must be unequivocally referable in their own nature to some dealing with the property: Deglman v. Guaranty Trust Co. of Canada, 1954 CanLII 2 (SCC), [1954] S.C.R. 725, at pp. 732-734; McNeil v. Corbett (1907), 1907 CanLII 45 (SCC), 39 S.C.R. 608, at pp. 611-612; Erie Sand & Gravel, at para. 87. The first step in this analysis is to determine whether the acts of part performance are connected to the land: Erie Sand & Gravel, at para. 89.

[120] I find that the following acts of part performance by the purchaser are unequivocally referable to the land in dispute:

a. Obtaining an environmental assessment of the property;

b. Obtaining survey and title searches on the property;

c. Conducting other due diligence related to the property;

d. Negotiating and preparing the commission agreement among the purchaser and the brokers;

e. Retaining legal counsel to close the agreement;

f. Drafting, revising, and negotiating the written agreement of purchase and sale for the property;

g. Delivering the documents required on closing;

h. Obtaining, delivering, and tendering the certified cheque for the full amount of the purchase price.

[121] I also find that the following acts of part performance by the owner are connected to the property in dispute:

a. Retaining legal counsel to close the agreement for the purchase and sale of the property;

b. Negotiating over the status of the easement on the property;

c. Reviewing and revising the draft agreement of purchase and sale, including providing a revised version of Schedule A to that agreement to the purchaser and obtaining the consent of the purchaser to the revisions;

d. Providing draft copies of the vendor’s closing certificate and statutory declaration and the owner executing those documents;

e. Negotiating over the method by which the purchaser would deliver the agreed upon purchase price on closing.

[122] Each of these acts of part performance relate directly to the property in dispute. They are all directly tied to the agreement the parties reached in September 2019 regarding the sale of the property. All of this conduct is unequivocally referable to the property in dispute.

[123] The second step in the analysis is to consider whether or not the conduct, in and of itself, indicates that there has been some dealing with the land: Erie Sand & Gravel, at para. 90. In my view, much of the conduct described above suggests a pre-existing agreement in respect of the land. In particular, the owner prepared and delivered through Mr. Varga a revised Schedule A to the agreement of purchase and sale that accurately reflected the prior agreement between the parties, namely, that the purchaser was to take title as-is and subject to the existing easement. Moreover, the owner retained a lawyer who wrote to the purchaser’s lawyer to confirm that he acted “for the vendor in the above transaction” and to confirm that executed versions of the documents would be delivered “to your office on closing.” This is strong evidence that the owner was intending to close an agreement that had already been reached, not to negotiate toward a possible agreement with the purchaser. In these circumstances, judged by the standards on which reasonable people act, I find that there had been some dealing with the land.

[124] In carrying out its acts of part performance, the purchaser acted to its detriment in carrying out its obligations in reliance. It also proved acts of part performance sufficiently referable to some dealing with the land such that it would make it inequitable for the defendant to rely on s. 4 of the Statute of Frauds to avoid performance. I find that the oral agreement should be enforced.

Remedy: Specific Performance

[125] The purchaser seeks an order for specific performance of the contract. The defendant submits that the purchaser is only entitled to an award of damages.

[126] The usual remedy for breach of contract is an order for the payment of an amount of money that will provide the non-breaching party with the financial equivalent of performance: Lucas v. 1858793 Ontario Inc. (Howard Park), 2021 ONCA 52, 25 R.P.R. (6th) 177, at para. 68.

[127] However, it is inaccurate to describe the remedy of specific performance as an “extraordinary remedy”: Dhatt v. Beer 2021 ONCA 137, 68 C.P.C. (8th) 128, at para 42. In determining whether or not to grant specific performance, the fundamental question is whether the plaintiff has shown that the land rather than its monetary equivalent better serves justice between the parties. A party seeking specific performance must establish a fair, real, and substantial justification by showing that damages would be inadequate to compensate for its loss of the subject property: Dhatt, at para. 42; Lucas, at paras. 69-70; Asamera Oil Corporation Ltd. v. Sea Oil & General Corporation et al., 1978 CanLII 16 (SCC), [1979] 1 S.C.R. 633, at p. 668.

[128] In Lucas, at para. 71, the Court of Appeal held that in determining whether a plaintiff has shown that the land rather than its monetary equivalent better serves justice between the parties, courts should typically examine and weigh 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.

Nature of the property

[129] Specific performance should only be granted where the successful party proves that the property is “unique” or, in other words, that “its substitute would not be readily available”: Semelhago v. Paramadevan, 1996 CanLII 209 (SCC), [1996] 2 S.C.R. 415, at paras. 21-22. In Erie Sand & Gravel, at para. 118, the Court of Appeal put it this way:

Where a plaintiff establishes that the land in question is unique, damages will often be inadequate, and the plaintiff has a fair, real, and substantial claim to specific performance. Land is unique if there is no readily available substitute property. One method of proving that there is no readily available substitute is to show that the land has a quality that cannot be readily duplicated, and that the quality relates to its proposed use, making the land particularly suitable for the purpose for which it was intended.

[130] In Di Millo v. 2099232 Ontario Inc., 2018 ONCA 1051, 430 D.L.R. (4th) 296, at para. 66, the Court of Appeal, following several of its own decisions, adopted the following explanation of what makes a property unique:

[I]n order to establish that a property is unique the person seeking the remedy of specific performance must show that the property in question has a quality that cannot be readily duplicated elsewhere. This 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.

[131] In 11 Suntract Holdings Ltd. v. Chassis Service & Hydraulics Ltd. (1997), 1997 CanLII 12181 (ON SC), 36 O.R. (3d) 328 (Gen. Div.), Lax J. found that the subject property was unique because the purchaser planned to use it to provide access to nearby development property it owned. Any other property in any other location would not have been an adequate substitute because the plan could not go forward without the property at issue. Justice Lax held that damages were an inadequate remedy and granted an order for specific performance.

[132] The Court of Appeal took a similar approach in Di Millo. In that case, the appellant sold a specific lot consisting of two acres of land as part of his plan to develop a larger parcel into a subdivision. The subdivision plan was registered on the lands owned by the appellant. Article 9 of the agreement between the parties obliged the respondent to get written consent from the appellant for any application for rezoning, not to oppose any efforts by the appellant to have the subdivision property severed or rezoned or to have the subdivision plan amended, and to undertake to build a “high quality industrial building”.

[133] The Court of Appeal held that the appellant entered into the option agreement for the purpose of the subdivision plan. The appellant provided the municipality with $400,000 as security, to be released when the subdivision was fully developed. When the respondent failed to build on the property as he had contracted to do, the appellant could not complete the development of the subdivision. The Court of Appeal held that specific performance was the only adequate remedy in this case.

[134] Through Rivanera, Mr. Petrozza and his colleagues already owned 1320 Lower Base Line. He testified that his business plan was to create an industrial development on those lands, which are currently designated as a provincially significant employment area. He testified that this proposal would be more viable if he could acquire adjoining lands to increase the size of the parcel of land to be developed. Mr. Petrozza testified that the disputed property was particularly suitable for his purposes because:

a. the location of the lands and their proximity to major highways was desirable for the intended development purposes;

b. developing the lands would be easier if Mr. Petrozza’s group owned a larger parcel of land, unbroken by other owners; and

c. none of the other adjoining parcels of land have been or are currently available for purchase.

[135] On cross-examination, Mr. Petrozza admitted that a parcel of land on the other side of the street had been listed for sale, but that lot was not as desirable for his purposes because it was heavily treed and did not adjoin his land. He also admitted that he had asked Mr. Pantalone to monitor whether or not the properties that adjoined the Rivanera property on the other side were listed for sale but that he had not directed Mr. Pantalone to make unsolicited offers on that land. Mr. Petrozza admitted that any of the land in the same general area as the property he owned would have the same general characteristics as the disputed property but that only land that adjoined his land would create the unbroken parcel he wished to assemble. He admitted that he felt that having a larger parcel of land would give him more clout in subsequent negotiations with the municipality or the region regarding the development of the land.

[136] Mr. Varga provided support for Mr. Petrozza’s evidence when he testified that he told Mr. Segal that the purchaser was offering a premium price for the land because the purchaser was also the neighbour. This premium price reflected that the neighbour placed more value on the property because of its location than did others in the market. The premium to be paid, therefore, is one measure of the land’s uniqueness in the eyes of the neighbour purchaser.

[137] The purchaser provided an opinion from Claudio Brutto, a land use planner. There was no dispute over the qualifications of Mr. Brutto or the admissibility of the report. Mr. Brutto considered whether or not there were features of the disputed property that made it unique to the purchaser. Mr. Brutto concluded that the disputed land was unique for the purchaser due to a number of features including that the land:

a. is situated within Protected Future Employment Land;

b. has extensive visibility and exposure from Highway 407;

c. is in very close proximity to the future 407 Transitway;

d. has proximity to access to ON-403 and ON-407 Expressways Via Trafalgar Rd Interchange;

e. has contiguity to the adjacent westerly property owned by 2730453 Ontario Inc.; and,

f. facilitates improved opportunity to master plan an employment/business Park.

[138] The owner provided an opinion from Michael Larkin, a land use planner. There was no dispute over the admissibility of Mr. Larkin’s report. Mr. Larkin’s report stated that the municipal and regional planning documents “can be applied equally to all the lands that surround the two properties, which refutes the notion that the two properties are intrinsically unique.” I agree with Mr. Larkin’s assessment of the planning documents. Mr. Larkin went on to conclude, however, as follows:

It appears that the Plaintiff's interest in the Defendant's property is unique only to the Plaintiff, as the attributes the Authors of the Brutto Report are relying on in their determination of uniqueness are not, in fact, unique to the two properties. [emphasis added]

[139] I find that the disputed property is unique, in that its substitute would not be readily available elsewhere: John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd. (2001), 2001 CanLII 28012 (ON SC), 56 O.R. (3d) 341 (S.C.) (“John E. Dodge Holdings (S.C.)”), at para. 58, aff’d (2003), 2003 CanLII 52131 (ON CA), 63 O.R. (3d) 304 (C.A.), at para. 39. The most important feature is that the disputed property is immediately adjacent to property owned by Mr. Petrozza’s group. He has a business plan that is predicated on acquiring the disputed property to create a larger, more lucrative parcel for development. This larger property would provide Mr. Petrozza’s group with, as he put it, more clout when negotiating with the municipality and the region. Any land that does not share a boundary with the property owned by Rivanera would not be an adequate substitute: 11 Suntract Holdings.

[140] The owner placed great emphasis on the fact that the disputed property is not unique and Mr. Larkin’s opinion that there are other pieces of land in the vicinity that share the zoning and features of the disputed land. I do not think that is this the test, however. In 1252668 Ontario Inc. v. Wyndham Street Investments Inc. (1999), 27 R.P.R. (3d) 58 (Ont. S.C.), at para. 23, Lamek J. stated that he:

[does] not consider that the plaintiff has to demonstrate that the Premises are unique in a strict dictionary sense that they are entirely different from any other piece of property. It is enough, in my view, for the plaintiff to demonstrate that the Premises have a quality that makes them especially suitable for the proposed use and that they cannot be reasonably duplicated elsewhere.

[141] It is true that the properties on the other side of the property owned by Rivanera share many of the same characteristics as the disputed property. Even if these properties share the “constellation of features” of the disputed property, the evidence, however, is that those properties are not currently for sale. There is no evidence that they have been for sale. If those properties are not for sale, they are not readily available. Other lands could be purchased but if they do not share a property line with the land owned by Rivanera, they are not an adequate substitute for the disputed property.

[142] Uniqueness does not mean singularity: John E. Dodge Holdings (S.C.), at para. 60; 1252668 Ontario Inc., at para. 23; Di Millo, at para 66. It means that a property has a quality or qualities that make it especially suitable for the proposed use. Mr. Larkin’s report, perhaps unintentionally, makes this point with great force. The disputed land is not unique in the sense that there is no other piece of land that of that size, with that zoning, in the general area, it is unique only to the purchaser because of its specific needs. The disputed land is especially suitable for the purchaser’s proposed use. I find that Mr. Larkin’s conclusion supports the position of the purchaser.

[143] I find that the purchaser has established that the disputed property is unique or, in other words, that the land is especially suitable for the purchaser’s use and that its substitute would not be readily available.

Adequacy of damages

[144] The second factor to be considered is whether damages would be adequate to remedy the purchaser’s loss. Evidence related to the uniqueness of the property is also relevant to the adequacy of damages.

[145] The Supreme Court of Canada has held that courts should be reluctant to award specific performance of contracts for property purchased solely as an investment, since money damages are well-suited to satisfy purely financial interests: Southcott Estates Inc. v. Toronto Catholic District School Board, 2012 SCC 51, [2012] 2 S.C.R. 675, at paras. 40-41.

[146] The court must stay focussed on the fundamental question: has the plaintiff shown that the land, rather than its monetary equivalent better serves justice between the parties? As Lax J. cautioned in John E. Dodge Holdings (S.C.), at para 55:

Semelhago asks us to examine in each case, the plaintiff and the property. The danger in framing the issue as one of uniqueness (a term that carries with it a pre-Semelhago antediluvian aroma) is that the real point of Semelhago will be lost. It is obviously important to identify the factors or characteristics that make a particular property “unique” to a particular plaintiff. The more fundamental 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.

[147] I agree that where a plaintiff purchases land for either income or capital appreciation, specific performance is not routinely available. In this case, however, the purchaser does not seek the property as a commodity investment, simply to be sold again at a higher price. It has described its plans to fold this land into other land that it owns for its ongoing commercial and developmental purposes. That proposed use supports an order for specific performance: Horn Ventures International Inc. v. Xylem Canada LP, 2022 ONSC 4158, at para. 101.

[148] I also accept that the process of calculating damages in this case would risk that the translation into money terms of the effect of the breach may be inaccurate, time-consuming, and expensive. In and of itself, that would not be a reason to avoid calculating damages if necessary to do so. However, in this case, an order for specific performance would quite elegantly put the purchaser in the position it would have been in if the contract had been performed: Hon. Robert J. Sharpe, Injunctions and Specific Performance, loose-leaf, (Toronto: Thomson Reuters Canada, 2021), at §7.2; Lucas, at para. 68.

[149] In the circumstances, I find that specific performance, rather than its monetary equivalent, would better serve justice between the parties.

Conduct of the parties

[150] The third factor to be considered is the behaviour of the parties, having regard to the equitable nature of the remedy: Paterson Veterinary Professional Corporation v. Stilton Corp. Ltd., 2019 ONCA 746, 438 D.L.R. (4th) 374, at para. 31.

[151] Equitable relief may be refused if the party seeking relief has been guilty of misconduct in relation to the contract that party seeks to enforce: Silverberg v. 1054384 Ontario Ltd. (2008), 2008 CanLII 59325 (ON SC), 77 R.P.R. (4th) 102 (Ont. S.C.), at para. 120, aff’d 2009 ONCA 698, 266 O.A.C. 216.

[152] There are no facts in this case that would deny equitable relief to the purchaser. I find that the purchaser has clean hands and brought this proceeding promptly. The owner did not point to any conduct that would disentitle the purchaser to equitable relief.

Conclusion

[153] For the reasons set out above, I order specific performance of the agreement reached between the parties in September 2019. I find that the purchaser has shown that the land rather than its monetary equivalent better serves justice between the parties considering: (i) the nature of the property involved; (ii) the inadequacy of damages as a remedy; and (iii) the behaviour of the parties.

Damages

[154] Both parties agree that if I find that an order for specific performance is not appropriate, I should refer the quantification of damages to myself pursuant to rules 54.02 and 54.03 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194.

[155] I agree that this would be an efficient and proportionate approach. If it was necessary, I would direct that a reference on the damages flowing from the breach of the agreement take place before me: rule 54.03(1).

Costs

[156] If the parties are not able to resolve costs, the plaintiff may deliver its costs submission of no more than five double-spaced pages to be emailed to Theresa.Finelli@ontario.ca on or before December 5, 2022. The defendant may deliver a responding submission of no more than five double-spaced pages on or before December 12, 2022. No reply submissions are to be delivered without leave.

Robert Centa J.

Released: November 28, 2022

[CITATION](http://intra.judicialsecurity.jus.gov.on.ca/NeutralCitation/): 2730453 Ont. Inc. v. 2380673 Ont. Inc., 2022 ONSC 6660

COURT FILE NO.: CV-20-00634647-0000

DATE: 20221128

ONTARIO

SUPERIOR COURT OF JUSTICE

BETWEEN:

2730453 Ontario Inc.

Plaintiff

– and –

2380673 Ontario Inc.

Defendant

REASONS FOR JUDGMENT

Robert Centa J.

Released: November 28, 2022

[^1]: This trial proceeded on a hybrid basis. The parties filed a joint book of documents and agreed that the documents were admissible for all purposes, including for the truth of their contents. Each witness filed an affidavit that served as the examination-in-chief, subject to a few introductory questions, and was cross-examined by opposing counsel. The one exception to this was Frank Varga, a real estate agent who worked from time to time with Mr. Segal. Mr. Varga did not file an affidavit, was called during the purchaser’s case, and was cross-examined by both parties. This approach to the trial was efficient, effective, and to the credit of counsel for the parties.