COURT FILE NO.: CV-22-00000049-0000 (Guelph)

DATE: 2022 09 21

SUPERIOR COURT OF JUSTICE - ONTARIO

RE: Amy Alicia Gilroy

Plaintiff

AND:

Dian Clarke and Re/Max Realty Specialists Inc., Brokerage

Defendants

BEFORE: Justice G.D. Lemon

COUNSEL: Nelson Wan, Counsel for the Plaintiff No one appearing for the Defendants

HEARD: August 30, 2022

ENDORSEMENT

The Issue

[1] Ms. Gilroy moves for default judgment against Ms. Clarke with respect to Ms. Clarke's failure to close a real estate transaction in January of 2022. Ms. Gilroy seeks judgment for more than $140,000.

[2] At the end of the hearing, I advised that I would sign such an order, but would also provide written reasons to assist Ms. Clarke in understanding why that judgement was rendered. These are those reasons.

[3] Ms. Gilroy's counsel has filed a comprehensive factum with reference to the applicable law. I do not intend to review all of that here. Instead, my intention is simply to advise Ms. Clarke why she is required to pay such a significant sum to Ms. Gilroy.

The Background

[4] Ms. Clarke did not file a Statement of Defence; accordingly, she is deemed to have admitted the facts set out in the Claim as follows.

[5] Ms. Gilroy contracted to purchase Ms. Clarke's residence in October of 2021. The purchase price was $705,000. Ms. Gilroy provided a $35,000 deposit to Ms. Clarke's real estate agent, the defendant, Re/Max.

[6] Re/Max's agent advised Ms. Gilroy that Ms. Clarke did not wish to complete the transaction. Ms. Gilroy confirmed that she did. Nothing further has been heard from Ms. Clarke or her agents.

[7] On the closing date, Ms. Gilroy was ready, willing, and able to close the transaction.

[8] This action was commenced February 23, 2022.

[9] Ms. Clarke was served with the Statement of Claim on May 2 and May 4, 2022, but she did not respond to the action. She also did not agree to the release of Ms. Gilroy's deposit. Without that consent, Re/Max could not release the funds to Ms. Gilroy.

[10] In April of 2022, this court ordered Re/Max to release the deposit to Ms. Gilroy and the action was dismissed against Re/Max.

[11] On April 25, 2022, Ms. Gilroy purchased a substitute residence for $790,000. That property is similar in size, location and features.

[12] On June 2, 2022, Ms. Clarke was noted in default for failing to provide a Statement of Defence.

[13] In July of 2022, Ms. Clarke listed her property for $799,900; an increase of $94,900.

The Analysis

[14] Despite Ms. Clarke's failure to respond, Ms. Gilroy must still prove her losses in this motion.

[15] There is no dispute that Ms. Clarke breached the contract to sell her home to Ms. Gilroy.

[16] Damages for breach of contract are designed to put the innocent party in the same position they would have been if the contract had not been breached.

[17] Ms. Gilroy has filed an expert opinion report that the property was worth between $800,000 to $830,000 on the date of closing. Given the $100,000 difference in price, it is easy to understand why Ms. Clarke did not close the deal but that does not provide her with a defence.

[18] Ms. Gilroy seeks $125,000 in damages as the difference between the purchase price of $705,000 and the high value of $830,000. While that is the high end of that head of damage, Ms. Gilroy seeks no other items of possible and likely damage because of the failure to close. On that basis, I am satisfied that she is entitled to damages fixed in the amount of $125,000.

[19] Ms. Gilroy also seeks her costs of this proceeding.

[20] Rule 57.01 of our Rules of Civil Procedure sets out the factors that the court may consider when determining costs. The relevant factors that I should consider here are:

(a) the result in the proceeding,

(b) the experience of the lawyer for the party entitled to the costs as well as the rates charged, and the hours spent by that lawyer;

(c) the amount of costs that an unsuccessful party could reasonably expect to pay in relation to the step in the proceeding for which costs are being fixed;

(d) the amount claimed and the amount recovered in the proceeding;

(e) the complexity of the proceeding;

(f) the importance of the issues;

(g) the conduct of any party that tended to shorten or lengthen unnecessarily the duration of the proceeding.

[21] Modern costs rules are designed to foster three fundamental purposes: (1) to partially indemnify successful litigants for the cost of litigation; (2) to encourage settlement; and (3) to discourage and sanction inappropriate behaviour by litigants.

[22] Costs awards, at the end of the day, should reflect what the court views as a fair and reasonable amount that should be paid by the unsuccessful parties:

[23] Ms. Gilroy has been successful and is presumptively entitled to her costs of this proceeding.

[24] I have reviewed the Bill of Costs from Ms. Gilroy's lawyer. The rates and time spent are reasonable. Some of the work has been carried out by less expensive legal talent as it should be. The disbursements are as expected, and receipts have been attached. I am satisfied that the requested costs of $14,355.09 on a partial indemnity basis are appropriate.

Result

[25] Accordingly, I order that the defendant, Dian Clarke, pay to the plaintiff, Amy Gilroy, $125,000 plus pre-judgment interest pursuant to the Court of Justice Act from January 28, 2022, to this date.

[26] Ms. Clarke shall also pay costs to Ms. Gilroy fixed in the sum of $14,355.09.

“Justice Lemon”

Justice G.D. Lemon

Date: September 21, 2022