Superior Court of Justice - Ontario

COURT FILE NO.: CV-19-00140029-0000; CV-19-00138986-0000

DATE: 20230213

RE: Zhenhong Wu, Plaintiff on CV-19-00140029-0000 (Defendant on CV-19-00138986-0000) / Moving Party

AND:

Suevilia Development Corporation, Victor Xie, Re/Max Imperial Realty Inc., Defendants (Suevilia is Defendant on CV-19-00140029-0000 / Plaintiff on CV-19-00138986-0000 / Responding Party

BEFORE: Justice V. Christie

COUNSEL: Paul Starkman, Counsel for the Plaintiff, Wu

Patrick Martin, Counsel for the Defendant, Suevilia

No one appearing for the Defendants Xie or Re/Max

HEARD: December 12, 2022 and January 13, 2023

SUMMARY JUDGMENT ENDORSEMENT

Overview

[1] Zhenhong Wu brings this motion for summary judgment in relation to Suevilia Development Corporation only.

[2] In March 2017, the Plaintiff, Zhenhong Wu, entered into an Agreement of Purchase and Sale (“APS”) with the Defendant, Suevilia Development Corporation (“Suevilia”) to purchase a pre-construction property municipally known as 93 Fitzgerald Avenue, Markham, Ontario for the price of $3,380,000.00. This motion for summary judgment and the related actions arises out of the failed real estate transaction in relation to this property. As a result of the failed real estate transaction, the buyer seeks return of a $300,000 deposit, prejudgment interest, delayed closing compensation, and costs. The seller seeks to retain the deposit and to recoup losses that purportedly resulted when the property sold at a significantly reduced price. There are two ongoing actions that will be impacted by this motion:

a. CV-19-00138986-0000 – the Suevilia Action – On January 28, 2019, Suevilia commenced an action against Mr. Wu for the loss it claimed to have suffered.

b. CV-19-00140029-0000 – the Wu Action – On April 12, 2019, Mr. Wu commenced an action against Suevilia, Victor Xie (real estate agent), and Re/Max Imperial Realty (broker)

The parties acknowledged that these two actions deal with the same facts and issues, although there has never been an Order to consolidate. Having said that, both parties agree that the relief Ordered on this motion should impact both actions.

[3] The specific relief sought by Mr. Wu on this motion is as follows:

a. An Order for summary judgment in favour of the Plaintiff, Zhenhong Wu, in the Wu action;

b. An Order for summary judgment dismissing the Defendant, Suevilia’s, counterclaim in the Wu Action (According to the pleadings this court had access to on this motion, there is no counterclaim.)

c. An Order that Suevilia pay the amount of the deposit of $300,000 to Mr. Wu;

d. An Order for prejudgment interest on the $300,000, calculated in accordance with the Tarion Addendum, from the date the deposit was paid to Suevilia;

e. An Order for $7500 in Delayed Closing Compensation to Mr. Wu;

f. An Order dismissing the action commenced by Suevilia in Court File No. CV-19-00138986-0000 (the Suevilia Action) against Mr. Wu;

g. Costs in both actions on a substantial indemnity basis; and

h. Costs of this motion on a substantial indemnity basis

[4] The Defendant, Suevilia, argued that the motion for summary judgment should be dismissed and that this court should order the $300,000 deposit forfeited to Suevilia. The Plaintiff argued that if this motion were dismissed, this court should not go so far as to forfeit the $300,000 to Suevilia on this motion, rather, leave it for a trial.

[5] Both parties agree that, however this motion is decided, it will not dispose of both actions in their entirety, as the question of Suevilia’s entitlement to its purported losses is still an outstanding issue, in addition to the liability of the real estate agent and broker. Mr. Wu takes the position that the claim against the agent and the broker is really derivative of this claim against Suevilia, as to whether Suevilia did or did not comply with the Tarion Addendum. In other words, if Mr. Wu were successful in the claim against Suevilia and Suevilia satisfied the judgment, the claim against the agent and broker would likely be resolved. However, subject to such a resolution, it would still exist, as the allegations against the agent and broker are distinct from the issues in relation to Suevilia and allegedly take place before any alleged breach of the agreement by Suevilia.

Facts

[6] On March 28, 2017, Mr. Wu, who does not read, write, or speak English, entered an Agreement of Purchase and Sale (“APS”) with Suevilia to purchase the pre-construction subject property for $3,380,000.00. The APS provided, in part, as follows:

1(f) “Closing Date” or “Closing” means JULY 31, 2018 this date may be extended and/or advanced by the Vendor, or by mutual agreement, pursuant to the terms of this Agreement.

1(h) “Deposit” THREE HUNDRED THOUSAND ($300,000.00) DOLLARS paid to the Vendor pending completion or other termination of this Agreement to be credited against the Purchase Price on Closing as set out below…

9(a) COMPLETION

For the purposes of Closing, the Dwelling shall be deemed to be completed when all interior work has been substantially completed so that the Dwelling may be occupied, notwithstanding that there remains interior or exterior work to be completed including, but not limited to, painting, driveway paving, grading, sodding and landscaping. There shall be no holdback or deduction on Closing for uncompleted work. If required, the Purchaser shall be responsible to obtain confirmation of allowable occupancy and a copy of any occupancy certificate from the Municipality, and, unless otherwise required by the Municipality, the Vendor need not provide same to the Purchaser.

9(b) COMPLETION INSPECTION (PDI)

The Vendor agrees to make available and the Purchaser agrees to meet a representative of the Vendor prior to Closing, during normal working hours (9am-5pm), to inspect the Dwelling and verify that the Dwelling has been completed in accordance with the provisions of this Agreement. Only those on title should be present for the PDI. If a designate is required, you must provide the Builder / Vendor with prior written authorization…If there is any deficient or uncompleted work remaining at the time of inspection, such items shall be listed on the Certificate of Completion and Possession (PDI) required to be completed pursuant to the provisions of the Ontario New Home Warranty Program (TARION)…

10 EXTENSION AND ADVANCEMENT OF THE CLOSING DATE

This transaction of Purchase and Sale shall be completed on the Closing Date or any earlier or later date as may be permitted under this Agreement, at which time vacant possession of the Dwelling will be given to the Purchaser.

The Purchaser hereby acknowledges and agrees that the Vendor shall have the right, on giving at least 30 days prior written notice to the Purchaser, to accelerate the Closing Date provided that the Dwelling is substantially complete and fit for occupancy on the earlier date specified in the Vendor’s notice to the Purchaser.

The Purchaser acknowledges and agrees that the Vendor shall have the right to extend the Closing Date if the Vendor is delayed for reasons beyond its control….In such event, the Closing Date shall be extended accordingly and the Purchaser acknowledges and agrees to accept such extended Closing Date without compensation or abatement to the Purchase Price.

In addition to the foregoing, if the Vendor shall be unable to substantially complete the Dwelling for occupancy for any other reason, then the Purchaser acknowledges and agrees that the Vendor shall have the right to extend the Closing Date in accordance with the regulations prescribed by the Ontario New Home Warranties Plan Act (TARION), as amended or re-enacted from time to time.

The Tarion Addendum to the Agreement of Purchase and Sale (“Tarion Addendum”) forms an integral part of the Agreement of Purchase and Sale. The Tarion Agreement overrides any contrary or inconsistent provisions in the Agreement of Purchase and Sale.

25. DEFAULT

(b) In the event that the Purchaser defaults with respect to any of the covenants, representations, warranties, acknowledgements or obligations to be performed by the Purchaser pursuant to this Agreement and such default continues for seven (7) days after written notice thereof has been given to the Purchaser or his solicitor by the Vendor or its solicitor, or in the event the Purchaser fails to complete the transaction on the Closing Date the Vendor shall have the right to declare this Agreement null and void and, in such event, the Deposit and all other amounts paid by the Purchaser to the Vendor hereunder shall be forfeited to the Vendor as liquidated damages and not as a penalty and without prejudice to or limiting the rights of the Vendor to claim for damages in excess of such amounts and without limiting any other rights or remedies to which the Vendor may be entitled in law.

(b) Evidence of Default

A certificate from an officer of the Vendor that default has been made and the date of default and that notice, if required, of such default has been mailed to the Purchaser, shall be conclusive evidence of the facts therein stated.

The APS was signed by the Purchaser and dated March 28, 2017. The APS was signed by the Vendor and dated March 29, 2017.

[7] The Critical Dates, as set out in the Tarion Addendum, which formed part of the APS, were as follows:

a. The First Tentative Closing Date, which is the date that the Vendor anticipates the home will be completed and ready to move in, is: July 31, 2018.

b. A Second Tentative Closing Date can subsequently be set by the Vendor by giving proper written notice at least 90 days before the First Tentative Closing Date. The Second Tentative Closing Date can be up to 120 days after the First Tentative Closing Date, and so could be as late as: November 28, 2018.

c. The Vendor must set a Firm Closing Date by giving proper written notice at least 90 days before the Second Tentative Closing Date. The Firm Closing Date can be up to 120 days after the Second Tentative Closing Date, and so could be as late as: March 28, 2019.

d. The Vender can set a Delayed Closing Date that is up to 365 days after the earlier of the Second Tentative Closing Date and the Firm Closing Date: This Outside Closing Date could be as late as: November 28, 2019.

At the bottom of the “Statement of Critical Dates – Delayed Closing Warranty” the following statement is included:

Note: Any time a Critical Date is set or changed as permitted in the Addendum, other Critical Dates may change as well. At any given time the parties must refer to: the most recent revised Statement of Critical Dates; or agreement or written notice that sets a Critical Date, and calculate revised Critical Dates using the formulas contained in the Addendum. Critical Dates can also change if there are unavoidable delays (see section 5 of the Addendum).

[8] On page two of the Tarion Addendum, it states:

This addendum, including the accompanying Statement of Critical Dates (the “Addendum"), forms part of the agreement of purchase and sale (the "Purchase Agreement") between the Vendor and the Purchaser relating to the Property. This Addendum is to be used for a transaction where the home purchase is in substance a purchase of freehold land and residential dwelling. This Addendum contains important provisions that are part of the delayed closing warranty provided by the Vendor in accordance with the Ontario New Home Warranties Plan Act (the "ONHWP Act"). If there are any differences between the provisions In the Addendum and the Purchase Agreement, then the Addendum provisions shall prevail…

[9] As for setting and changing Critical Dates, the Tarion Addendum states in part:

1(b) First Tentative Closing Date: The Vendor shall identify the First Tentative Closing Date in the Statement of Critical Dates attached to the Addendum at the time the Purchase Agreement is signed.

1(c) Second Tentative Closing Date: The Vendor may choose to set a Second Tentative Closing Date that is no later than 120 days after the First Tentative Closing Date. The Vendor shall give written notice of the Second Tentative Closing Date to the Purchaser at least 90 days before the First Tentative Closing Date, or else the First Tentative Closing Date shall for all purposes be the Firm Closing Date.

1(d) Firm Closing Date: The Vendor shall set a Firm Closing Date, which can be no later than 120 days after the Second Tentative Closing Date or, if a Second Tentative Closing Date is not set, no later than 120 days after the First Tentative Closing Date. If the Vendor elects not to set a Second Tentative Closing Date, the Vendor shall give written notice of the Firm Closing Date to the Purchaser at least 90 days before the First Tentative Closing Date, or else the First Tentative Closing Date shall for all purposes be the Firm Closing Date. If the Vendor elects to set a Second Tentative Closing Date, the Vendor shall give written notice of the Firm Closing Date to the Purchaser at least 90 days before the Second Tentative Closing Date, or else the Second Tentative Closing Date shall for all purposes be the Firm Closing Date.

1(e) Notice: Any notice given by the Vendor under paragraphs (c) and (d) above, must set out the stipulated Critical Date, as applicable.

The Tarion Addendum provides three ways to change the Firm Closing Date, which are:

1. By the Vendor setting a Delayed Closing Date in accordance with section 3;

2. By the mutual written agreement of the Vendor and Purchaser in accordance with section 4; or

3. As the result of an Unavoidable Delay of which proper written notice is given in accordance with section 5.

The Tarion Addendum also sets out a procedure to be followed where the Vendor is unable to close on the Firm Closing Date as follows:

3 (a) If the Vendor cannot Close on the Firm Closing Date and sections 4 and 5 do not apply, the Vendor shall select and give written notice to the Purchaser of a Delayed Closing Date in accordance with this section, and delayed closing compensation is payable in accordance with section 7.

(b) The Delayed Closing Date may be any Business Day after the date the Purchaser receives written notice of the Delayed Closing Date but not later than the Outside Closing Date.

(c) The Vendor shall give written notice to the Purchaser of the Delayed Closing Date as soon as the Vendor knows that it will be unable to Close on the Firm Closing Date, and in any event at least 10 days before the Firm Closing Date, failing which delayed closing compensation is payable from the date that is 10 days before the Firm Closing Date, in accordance with paragraph 7(c). If notice of a new Delayed Closing Date is not given by the Vendor before the Firm Closing Date, then the new Delayed Closing Date shall be deemed to be the date which is 90 days after the Firm Closing Date.

The Tarion Addendum defines “Critical Dates” to include the First Tentative Closing Date, the Second Tentative Closing Date, the Firm Closing Date, the Delayed Closing Date, the Outside Closing Date and the last day of the Purchaser’s Termination Period.

[10] On the same day that the APS was signed, Mr. Wu made his first deposit payment of $50,000 to Suevilia. He made a second deposit payment of $50,000 to Suevilia on April 27, 2017.

[11] The Plaintiff qualified for a mortgage in May 2017. A letter dated May 23, 2017, from the Bank of Nova Scotia, confirmed that Mr. Wu qualified for a residential first mortgage in the amount of $2,197,000.

[12] On May 27, 2017, Mr. Wu made his third deposit payment of $50,000 to Suevilia.

[13] On May 30, 2017, Mr. Wu wrote a letter to Suevilia, witnessed by the agent, Victor Xie, requesting to amend the Closing Date to May 31, 2018. The letter stated in part:

I hereby request Suevilia Development Corporation to amend the Closing Date to May 31, 2018 and should Suevilia Development Corporation agree to the aforementioned amendment, I hereby voluntarily and irrevocably release Suevilia Development Corporation, its agents, successors and assigns, from any and all liabilities, claims, demands, damages, actions, causes of action of any kind or nature whatsoever arising out of, in consequence of or on account of any delay of the Closing Date that may hereafter arise.

Furthermore, I hereby certify and acknowledge that this letter signed by me and witnessed herein shall be sufficient and legally binding on me. I trust this to be satisfactory.

[14] An amendment was, therefore, made, at the request of Mr. Wu, which revised the Critical Dates as follows:

a. The First Tentative Closing Date, which is the date that the Vendor anticipates the home will be completed and ready to move in, is: May 31, 2018

b. A Second Tentative Closing Date can subsequently be set by the Vendor by giving proper written notice at least 90 days before the First Tentative Closing Date. The Second Tentative Closing Date can be up to 120 days after the First Tentative Closing Date, and so could be as late as: September 28, 2018

c. The Vendor must set a Firm Closing Date by giving proper written notice at least 90 days before the Second Tentative Closing Date. The Firm Closing Date can be up to 120 days after the Second Tentative Closing Date, and so could be as late as: January 28, 2019

d. The Vender can set a Delayed Closing Date that is up to 365 days after the earlier of the Second Tentative Closing Date and the Firm Closing Date: This Outside Closing Date could be as late as: September 30, 2019

Mr. Wu testified that he requested that the First Tentative Closing Date be moved up to assist with his mortgage application. Victor Xie, the real estate agent with Re/Max Imperial Realty Inc. witnessed the new Statement of Critical Dates, which is not dated. The parties agree that this is the applicable Statement of Critical Dates for determining this motion.

[15] On June 8, 2017, Suevilia sent a letter to Mr. Wu requesting conformation of his mortgage approval. Mr. Wu forwarded the letter from the Bank of Nova Scotia dated May 23, 2017.

[16] On June 26, July 26, and September 24, 2017, Mr. Wu made three further deposit payments of $50,000 each to Suevilia, in accordance with the APS. Therefore, by September 24, 2017, Mr. Wu had paid the total deposit of $300,000.

[17] Commencing on or about February 26, 2018, and through to November 6, 2018, Mr. Wu received a series of letters from Suevilia setting various dates for the transaction.

[18] Mr. Wu received a letter from Suevilia, dated February 26, 2018, stating in part: “[T]he Vendor hereby sets August 30^th, 2018 as the new Tentative Closing Date” and “the setting of this new Tentative Closing Date may change other future Critical Dates” as stated in the Tarion Addendum. The letter does not specifically refer to which other Critical Dates are changed, and no updated Statement of Critical Dates was provided. There does not appear to have been any response from Mr. Wu, even though he certainly acknowledges receiving the letter. It is of note that the letter also refers to the scheduling of a PDI Inspection and requests Mr. Wu’s solicitor’s information be forwarded to the solicitor for Suevilia, David Chong.

[19] Mr. Wu received a further letter from Suevilia, dated May 31, 2018. The letter referenced the February letter and stated in part: “…we would like to advise that the closing date has been postponed due to the unpredictable weather conditions” and “the Vendor hereby sets October 31^st, 2018 as the Firm Closing Date.” No updated Statement of Critical Dates was provided. There does not appear to have been any response from Mr. Wu, even though he certainly acknowledges receiving the letter. Again, there is reference to scheduling a PDI Inspection in the “upcoming months” and a request for Mr. Wu to forward his solicitor’s information if he had not already done so.

[20] Mr. Wu received a further letter from Suevilia dated September 5, 2018, that indicated the closing date had been postponed and “the Vendor hereby sets November 30th, 2018 as the Closing Date”. No updated Statement of Critical Dates was provided. The letter does not mention Delayed Closing Compensation. Again, there is reference to scheduling a PDI Inspection in the “upcoming months” and a request for Mr. Wu to forward his solicitor’s information if he had not already done so.

[21] Mr. Wu received a further letter from Suevilia dated November 6, 2018, that indicated the closing date had been postponed and “the Vendor hereby sets December 18th, 2018 as the Closing Date.” No updated Statement of Critical Dates was provided. The letter again did not mention Delayed Closing Compensation. Again, there is reference to scheduling a PDI Inspection in the “upcoming months” and a request for Mr. Wu to forward his solicitor’s information if he had not already done so.

[22] On December 5, 2018, Suevilia sent a letter to Shao Ye Dai of Dai Law Professional Corporation, who was believed to be Mr. Wu’s lawyer at the time, with a link to access the closing documents for the completion of the transaction. Shortly after sending this letter, Suevilia’s counsel, David Chong, received a letter from Dai Law indicating that they were no longer acting for the purchaser for this property.

[23] Mr. Wu received a letter from Suevilia dated December 17, 2018 which stated in part as follows:

Further to our letter dated November 6^th, 2018, we have advised your agent to remind you of your Closing Date. This letter shall be an additional reminder to you that your Closing date is set at December 18^th, 2018.

As of the date of this letter, our Décor Representatives has tried contacting you on multiple occasions to schedule your PDI Inspection, but have not received your response. As such, we have completed the PDI Inspection and made a relevant record.

The letter further advised that Suevilia required Mr. Wu’s solicitor’s information to complete the closing of the transaction which had not yet been received. It was requested to be provided by December 20, 2018, which was after the Firm Closing Date, failing which they intended to “proceed according to the terms of the Agreement of Purchase and Sale”. The letter also stated:

Your failure to close the transaction as scheduled constitutes a default under the Agreement of Purchase and Sale. We will avail ourselves of any and all applicable remedies pursuant to the Agreement of Purchase and Sale and at law including, but not limited to, termination of the Agreement of Purchase and Sale, forfeiture of your deposits due to your failure to comply, and an action for damages against you.

[24] There was no response to this letter in the time frame set out.

[25] It is acknowledged that Mr. Wu did not have a lawyer acting for him between December 5, 2018 and December 31, 2018. Further, Mr. Wu admitted in cross-examination that he did not have financing in place on December 18, 2018.

[26] In a letter dated December 31, 2018, the law firm of Henry K. Hui & Associates sent a letter to counsel for Suevilia to advise that Henry Hui had “carriage of the file” but was on vacation until January 3, 2019, and would get in touch with counsel upon his return.

[27] On January 7, 2019, Suevilia issued a Certificate of Default, stating that “Zhenhong Wu default [sic] of the Agreement of Purchase and Sale by her [sic] failure to Close on December 18, 2018 the Vendor Suevilia Development Corporation being ready, willing, and able to Close.”

[28] Mr. Wu’s lawyer, Henry Hui, wrote to David Chong, counsel for Suevilia, on January 11, 2019, confirming that he was retained to act for Mr. Wu on the purchase and requested future correspondence be sent to their office. The letter also sated:

Please kindly confirm the closing date for this transaction at your earliest convenience.

[29] The Plaintiff argued that this correspondence, as well as a piece of correspondence sent on January 24, 2019, fell under settlement privilege and is inadmissible, citing Chow v. Russell (Litigation Guardian of), 2021 ONSC 6525 at para. 44. This court agrees that the second piece of correspondence would, arguably, amount to a form of settlement discussion and should be ignored by this court. However, the January 11, 2019 correspondence is merely stating that counsel is retained and requesting to know when the closing date is scheduled. It is not clear how this could be covered by settlement privilege. This court agrees that simply the fact that the communication does not clearly state "without prejudice" should not be determinative. It is the view of this court that the content and context of the communication should be considered in order to determine whether it was implicit that these communications were not to be disclosed if the matter was not settled. This court is willing to accept that the Plaintiff was attempting to reach a mutually acceptable resolution to this dispute without expending the time and expense of being involved in litigation in the second correspondence. Settlement privilege applies to settlement negotiations regardless of whether or not a settlement is reached. However, there is nothing about the January 11 correspondence that suggests settlement of any kind. The lawyer is inquiring when the closing date is scheduled – nothing more.

[30] Suevilia sued Mr. Wu for the loss it suffered by way of a Statement of Claim issued January 28, 2019. This is Court File No CV-19-00138986-0000 (the "Suevilia Action").'

[31] Mr. Wu defended the Suevilia Action and counterclaimed on March 28, 2019. In his counterclaim, Mr. Wu requests the return of his $300,000.00 deposit. In this pleading, Mr. Wu also added, as Defendants to Counterclaim, Victor Xie and Re/Max Imperial Realty Inc. Victor Xie is the real estate agent that worked on the purchase of the property and Re/Max Imperial Realty Inc. is alleged to be Victor Xie's employer. Mr. Wu alleges that Xie made several misrepresentations to him that Mr. Wu relied upon in entering into the Agreement.

[32] Suevilia eventually sold the property to another buyer on April 2, 2019.

[33] Mr. Wu then commenced a second action against Suevilia, Victor Xie and Re/Max Imperial Realty Inc. issued on April 12, 2019. This second action is Court File No. CV-19- 00140029-0000 (the "Wu Action"). The Wu Action is in all material respects identical to the Suevilia Action. In that action, Suevillia has brought a crossclaim against the agent and broker. Suevillia also claims that there is a counterclaim in that action, however, that is not clear from the documents this court was provided.

[34] Suevilia's counsel provided, to counsel for Mr. Wu, the Occupancy Permit for the property, by email on March 28, 2021, after the action had already been commenced, and the property had already been sold to another party. The Occupancy Permit clearly indicates that it was issued on December 19, 2018, one day after the closing date relied upon by Suevilia.

Position of the Parties

[35] According to the Plaintiff, Zhenhong Wu, with respect to the Tarion Agreement and the $300,000 deposit, there is no genuine issue for trial. They argue that, as a result of Suevilia’s notices not being compliant with the Tarion Addendum, the First Tentative Closing Date became the Firm Closing Date, which was May 31, 2018. Further, as a result of Suevilia failing to give notice of a Delayed Closing Date in accordance with the Tarion Addendum, the Delayed Closing Date was deemed to be 90 days after the Firm Closing Date, which was August 29, 2018. According to Mr. Wu, Suevilia was not ready, willing, and able to close on August 29, 2018. The APS was terminated as of August 29, 2018. The Plaintiff is, therefore, entitled to the return of his $300,000 deposit with interest calculated as per the Tarion Addendum, as well as Delayed Closing Compensation in the amount of $7500. While Mr. Wu disagrees that the closing date was December 18, 2018, he argued that, even if it was, Suevilia was not ready, willing, and able to close on that date, as evidenced by the fact that the Occupancy Permit was not issued until December 19, 2018.

[36] According to the Plaintiff, Suevilia breached the Tarion Addendum in many ways, including:

a. Sending notices that do not specify the Critical Date being amended;

b. Not sending updated Statements of Critical Dates or new Critical Dates calculated using the formula in the Tarion Addendum when Critical Dates were being amended;

c. Not closing on the Firm Closing Date, deemed to be May 31, 2018, in accordance with the Addendum;

d. Failing to set a Delayed Closing Date in accordance with the Addendum;

e. Not paying the Delayed Closing Compensation;

f. Not providing an Occupancy Permit on or prior to closing;

g. Refusing to return the $300,000 deposit back to the Plaintiff when Suevilia failed to comply with the Tarion Addendum.

[37] For different reasons, Suevilia also takes the position that, with respect to the Tarion Agreement and the $300,000 deposit, there is no genuine issue for trial. According to Suevilia, this court has more than enough information to conclude that the closing date was December 18, 2018, Suevilia was ready, willing and able to close, Mr. Wu took no steps to close thereby defaulting on the Agreement, and that Suevilia is entitled to retain the $300,000 deposit. In summary, Suevilia argued that:

a. Suevilia’s notices setting closing dates complied fully with the Tarion Addendum. Nomenclature is not important as long as it is within the timelines;

b. If there was any deficiency, this would make the notice voidable, not repudiate the Agreement. Mr. Wu never took the position that it was voided or repudiated. Both parties continued as if there was a valid, subsisting Agreement.

c. Suevilia did not need to deliver an Occupancy Permit to close, rather it was the purchaser’s responsibility as per the Agreement. Further, the transaction never closed and therefore no Occupancy Permit was required.

d. Mr. Wu is not entitled to Delayed Closing Compensation since the transaction never closed.

Legal Analysis

Summary Judgment

[38] Rule 20 of the Rules of Civil Procedure lays out the process and considerations that apply to a summary judgment motion. Pursuant to Rule 20.04:

(2) The court shall grant summary judgment if,

(a) the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence….

[39] As the Supreme Court of Canada made clear in Hryniak v. Mauldin, 2014 SCC 7, the first step is to determine if there is a genuine issue requiring a trial based only on the evidence presented by the parties without using the fact-finding powers in rule 20.04(2.1) and (2.2). The expectation is that in making or responding to the motion, the parties have each put their best foot forward. There will be no genuine issue requiring a trial when the court is able to reach a fair and just determination on the merits. Such a determination is possible when the court can make the necessary findings of fact, apply the law to the facts, and where the result is a proportionate, more expeditious and less expensive means to achieve a just result. If there is no genuine issue requiring a trial, summary judgment must be granted. If there appears to be a genuine issue requiring a trial, for the second step, the court then determines whether the need for trial can be avoided by using the fact-finding powers to weigh evidence, evaluate credibility, and draw inferences.

[40] The moving party bears the onus of establishing a prima facie case that there is no genuine issue requiring a trial. If successful, the onus then shifts to the responding party. The responding party must provide evidence to meet their onus. They must set out the facts necessary, through affidavit material or other evidence, to show that a genuine issue requiring a trial exists.

[41] On this motion, both parties seemed to agree that there was no genuine issue for trial with respect to the dispute in relation to the Tarion Addendum. While the parties take very different views of the conclusion this Court should reach, no one suggested that this court was not fully equipped to decide the issue. In fact, both parties argued strenuously that this court must make a determination on the issues in relation to the Tarion Addendum in their favour for different reasons. With respect to the $300,000 deposit, however, there is some disagreement about what this court can and should do. Mr. Wu argued that a ruling in his favour on the Tarion Addendum issues must lead to a return of the deposit to him. However, Mr. Wu, took the position that a ruling against him should not lead this court to order a forfeiture of the deposit, which Suevilia argued should occur. When requested to provide reasons for this position, counsel for Mr. Wu referred to a further evidentiary record that would be available on the issue of mitigation of damages on the part of Suevilia.

[42] It is the view of this court that mitigation of damages has nothing to do with forfeiture or return of the deposit. Mitigation of damages is certainly an issue that will remain alive in this litigation despite this court’s ruling in relation to the Tarion Addendum and deposit, as this relates to Suevilia’s alleged losses – an entirely separate issue.

[43] On a motion for summary judgment, the judge may grant judgment in favour of a responding party, even in the absence of a cross-motion for such relief. See: 2174372 Ontario Ltd. v. Dharamishi, 2021 ONSC 6139 at para. 56

[44] There is no question that the issue of Suevilia’s damages, if any, and the liability of the agent and broker will remain live issues in this litigation. However, this court has more than enough information to make a determination in relation to the Tarion Addendum and the deposit. This court is of the view that it can, and, in fact, must, rule on both the Tarion Addendum and rightful owner of the deposit together. As stated, both parties have thoroughly argued all aspects of the transaction between Mr. Wu and Suevilia. It is the view of this court that it is in as good a position as a trial judge to find the necessary facts and apply the relevant legal principles so as to resolve the dispute in relation to the Tarion Addendum and deposit. To rule on the issues surrounding the Tarion Addendum without ruling on the deposit would not be a proportionate, more expeditious, and less expensive means to achieve a just result, as the same issues would be relitigated in relation to the deposit at a later time. Further, it is unreasonable for the Moving Party to suggest that if this court rules in their favour, then the deposit must be returned, but if this court rules against them, the issue of the deposit remains outstanding. Frankly, conclusions made in relation to the Tarion Addendum dictate to whom the deposit belongs.

The Nature of the Tarion Addendum

[45] At least in theory, the introduction of the Tarion Addendum seems to have been intended to provide more certainty in new home purchase transactions. It provides information about rights and obligations, has a Statement of Critical Dates that sets out when the home is expected to be ready for occupancy, has processes for any delays that may occur, and provides for compensation to purchasers where an excessive delay occurs.

[46] Mr. Wu argued that Suevilia completely disregarded the Tarion Addendum, which he argued is meant to be consumer protective and to be strictly construed against the builder.

[47] In Reddy v. 1945086 Ontario Inc., 2019 ONSC 2554, there was an application by the purchasers for a declaration that an early termination condition in the agreement of purchase and sale was null and void. The court stated in part as follows:

[20] It is well-established that the Ontario New Home Warranties Plan Act, and its regulations, constitute consumer protection and remedial legislation. As such, a broad and liberal interpretation of its provisions in light of their object and purpose is appropriate, Ontario New Home Warranty Program v. Lukenda, 1991 CanLII 7167 (ON CA), [1991] O.J. No 320 (CA) at para. 7.

[21] I agree with the applicants that that where, as here, statutory regulations dictate requirements for what must be in documents, those regulations must be construed strictly and that, where there are two possible interpretations of circumstances under which a protection is to be extended, the one more favourable to the consumer should govern.

[22] Contracting out of the protections provided by the Addendum is also explicitly prohibited. Under para. 13 of the Addendum, the parties agreed not to include any provision in the purchase agreement that "derogates from, conflicts with or is inconsistent with" the provisions of the Addendum, except where the Addendum "expressly permits the parties to agree or consent to an alternative arrangement." The provisions of the Addendum prevail over any offending provision.

[23] The reforms which brought about O. Reg. 165/08 were the result of a review conducted by a special committee headed by The Honourable J. Frank Iacobucci. The Special Committee released its final report with recommendations in February 2007. The Committee recommended adjustments to the structural framework of relationships between new home developers/vendors and purchasers to better meet the objectives of the ONHWPA and regulations. I agree with the applicants' submission that a purpose of the Addendum was to better clarify and prescribe the conditions under which agreements of purchase and sale could be terminated.

[24] It is important to remember, however, that the Committee acknowledged that the imposition of regulatory warranties should not unduly favour purchasers in a manner that is onerous for builders or that fails to recognize the inevitability of certain delays in new home construction, Special Committee Report, p. 19.

[25] The Committee recognized that a builder of a condominium must be permitted to set tentative occupancy dates in order to recognize longer lead times for condominium projects "and threshold commercial financing requirements that must be met before construction begins," Special Committee Report, p. 11.

[48] Slightly more recently, in Ingarra v. 301099 Ontario Ltd. (c.o.b. Previn Court Homes), 2020 ONCA 103, the Court was considering an appeal by the builder from a decision of an application judge finding that it breached the agreement of purchase and sale with the respondent by terminating it. The respondent purchased a new home from the appellant. The appellant could not provide an occupancy permit on the closing date and could thus not close. The respondent was also not able to close due to lack of financing. The lawyers for both parties then agreed to extend the closing date. The respondent was still not in funds on the revised closing date and was unable to close. The respondent then requested a further extension of the closing which the appellant refused. The application judge found that the parties did not have the contractual freedom to set a closing date outside of the confines of the Tarion Addendum in the Agreement of Purchase and Sale. The Court of Appeal granted Previn’s appeal, set aside the decision of the application judge, and dismissed Ingarra’s application with costs. In arriving at its decision, the Court of Appeal stated in part as follows:

[18] It is not surprising that the lawyers did not use the cumbersome, paper-intensive and therefore expensive process set out in s. 4 of the Tarion Addendum, part of which is reproduced in the appendix to these reasons, to set new closing dates. Were they free to set new closing dates in the manner they did? In my view they were, for two reasons.

[19] First, s. 4 of the Tarion Addendum does not render unenforceable non-compliant amendments. Despite stating that the Addendum sets out "a framework" for altering the Critical dates "which cannot be altered contractually except as set out in this section 4", the last sentence in s. 4(a) provides: "Any amendment not in accordance with this section is voidable at the option of the Purchaser" (emphasis added). A non-compliant amendment altering the closing date is not "invalid" as the application judge found. It is only voidable.

[20] The failure to close on the Firm Closing Date of January 11, 2018 had the effect of leaving either party free to specify a new closing date on reasonable notice and restore the force of the "time of the essence" provision: see Domicile Developments Inc. v. MacTavish (1999), 1999 CanLII 3738 (ON CA), 45 O.R. (3d) 302 (C.A.) and King v. Urban & Country Transport Ltd. (1973), 1973 CanLII 740 (ON CA), 1 O.R. (2d) 449 (C.A.). This was the effect of the letter from counsel for Previn Homes, who gave an extension one day longer than Mr. Ingarra's counsel requested. It was not argued before the application judge nor before this court that notice of the new closing date was unreasonable, nor was it unreasonable under the circumstances.

[23] I reach this conclusion without satisfaction. The Tarion Addendum is not "consumer protective" by any stretch of the imagination. The current document is only marginally better drafted than its predecessor, which I described in the trial decision in Sirasena, at para. 11, as containing "consumer-unfriendly language". It is consistent with Lord Devlin's sardonic remark: "This sort of document is not meant to be read, still less to be understood": McCutcheon v. David MacBrayne Ltd., [1964] 1 W.L.R. 125 (U.K. H.L.).

[24] The Tarion Addendum is a small-font, single spaced, convoluted and confusingly long and obscure document, as s. 4 in the appendix to these reasons amply shows. It is a trap for the unwary, particularly the unwary lay person. Before Previn Homes terminated the agreement of purchase and sale on January 17, 2018, Mr. Ingarra had the option to void the newly set closing date, because the alteration was not compliant with s. 4 of the Addendum. The deemed Delayed Closing Date on April 11, 2018 would then have been effective. However, he did not expressly do so. The Addendum is the territory of real estate lawyers, and any lawyer practising residential real estate involving new homes must be familiar with its terms, as we assume the lawyers were in this case.

[49] This court agrees with Mr. Wu’s comments on Ingarra to some extent, in that the court was critically acknowledging that the Tarion Addendum is not consumer protective. The Court of Appeal seems to be suggesting that this was the intention of the Tarion Addendum, but given its complexity, it often does not have that effect.

[50] Having recognized the complexities in working with the Tarion Addendum, however, the Court made it quite clear that agreements reached outside of the confines of this convoluted document are to be expected and that the Tarion Addendum itself recognizes that such agreements do not render such agreements to be void, but rather voidable at the option of the Purchaser. While Ingarra was dealing with a mutual agreement captured by Section 4 of the Tarion Addendum, it would only be reasonable that similar logic would apply in other circumstances.

Are the Suevilia Notices compliant with the Tarion Addendum?

[51] According to Mr. Wu, pursuant to section 1(c) of the Tarion Addendum, the First Tentative Closing Date of May 31, 2018 became the Firm Closing Date, as the Second Tentative Closing Date was not set according to the Addendum. Further, he argued that Suevilia never provided any written notice of a Delayed Closing Date as per section 3 of the Tarion Addendum. Therefore, Mr. Wu argued that December 18, 2018 was not the proper closing date, as it was set unilaterally by Suevilia in breach of the express provisions of the Tarion Addendum. Mr. Wu admitted that neither party was ready willing or able to close on May 31, 2018, however, he argued that this may have allowed the parties to negotiate a new closing date, which did not happen here. According to Mr. Wu, the December 18, 2018 date was not a valid date, and Suevilia was not ready to close, yet they issued a notice of default and then sold the property without further discussion.

[52] Mr. Wu argued that each of the letters from Suevilia in 2018 were deficient, specifically:

a. the letter from Suevilia dated February 26, 2018 does not specify the new stipulated Critical Date, nor does it include a Statement of Critical Dates calculated using the appropriate formulas, contrary to section 1(e) and 12 of the Tarion Addendum, and the notice on page 1 of the Addendum. The Plaintiff argued that there is no such thing as a “New Tentative Closing Date” in section 12 of the Addendum and therefore, it would not be clear to anyone what is being referred to and what other dates will need to change;

b. the letter dated May 31, 2018 does not comply with the Tarion Addendum because it seeks to set a Firm Closing Date that is more than 120 days after the First Tentative Closing Date of May 31, 2018. 120 days after the First Tentative Closing Date would have been September 28, 2018. Suevilia sought to set the Firm Closing Date on October 31, 2018. Contrary to the notice on the Tarion Addendum, Suevilia did not refer to the most recent revised Statement of Critical Dates, or provide revised Critical Dates calculated using the formulas, which would have made the new dates clear;

c. the letters from Suevilia dated September 5, 2018 and November 6, 2018 do not comply with section 3 of the Tarion Addendum, as the letters do not specify the stipulated Critical Date being updated, nor do they include an updated Statement of Critical Dates calculated using the formula. There is also no mention of Delayed Closing Compensation.

[53] Both parties agree that the First Tentative Closing Date was amended to May 31, 2018 in May 2017 at Mr. Wu’s request. An amended Statement of Critical Dates was provided, and it is this Statement of Critical Dates that dictates the appropriate timing of notices.

[54] It is clear from the Tarion Addendum that the Vendor may unilaterally set the Second Tentative Closing Date, the Firm Closing Date, and the Delayed Closing Date, as long as the notice is provided within a prescribed time and the date occurs within a prescribed time. There is no specificity provided as to the required wording of the notice, apart from 1(e) which states that: “Any notice given by the Vendor under paragraphs (c) and (d) above, must set out the stipulated Critical Date, as applicable.” It would, therefore, seem important that the notice convey the message as to which Critical Date is being set as other dates can then be determined using the formula.

[55] In 5000933 Ontario Inc. v. Mahmood et al, 2022 ONSC 4726, it is clear that Justice MacNeil was much more concerned with the timing of notices than with the precise wording used, as long as the message was conveyed. Further, Justice MacNeil stated at para. 40:

[40] While the Respondents argue that there was no formal written agreement setting out the agreed-upon September 10, 2021 closing date, if Mr. Mahmood objected to the way in which this extension of the closing date was documented or believed it did not comply with section 4 of the Tarion Addendum, he could have voided the date: Ingarra, at paras. 19 and 22. He did not do so.

It is clear that non-compliance does not repudiate the Agreement but only makes the notice voidable. It would have been up to Mr. Wu to raise an objection to void the notices which he did not do.

[56] Suevilia provided notice on February 26, 2018 that the “new Tentative Closing Date” would be August 30, 2018. The notice deadline for providing this notice was March 2, 2018 (90 days before the First Tentative Closing Date of May 31, 2018). Therefore, the notice was provided within the time period. Further the new tentative closing date of August 30, 2018 was still prior to September 28, 2018, the latest date for the second tentative closing as set out in the amended Statement of Critical Dates. For clarity, September 28, 2018 was never set as the Second Tentative Closing Date, as this Court initially believed, rather this was the latest it could be set. It had to be between May 31, 2018 and September 28, 2018 – which it was – as it was set for August 30, 2018 as per this notice. The vendor is entitled to do this unilaterally as they did in this case – which is clearly set out in the Tarion Addendum. The language in the Tarion Addendum is that “a Second Tentative Closing Date can subsequently be set by the Vendor by giving proper written notice….” Clearly it is set unilaterally by the Vendor.

[57] Mr. Wu’s argument that this notice had to specify that it was a “Second Tentative Closing Date” that was being set, in order to comply with section 1(e) and 12 of the Tarion Addendum, is without merit. Clearly, upon close inspection of the wording of the Addendum and the dates involved, this could only be a Second Tentative Closing Date. There are only two “Tentative Closing” dates: First or Second. The First Tentative Closing Date is identified by the Vendor at the time the Purchase Agreement is signed. The vendor is not permitted to send a letter setting or changing the First Tentative Closing Date. There was a change to this date at the request of Mr. Wu, which did require the drafting and signing of a new Statement of Critical Dates, which was done. It would have been patently obvious to Mr. Wu that reference to the “Tentative Closing Date” would have been the “Second Tentative Closing Date”. Again, the precise wording should not be the focus, rather the message that is conveyed and that the notice is in compliance with the timing requirements. In this case, the message was conveyed, and the timing was followed. Mr. Wu did not seek to clarify the message conveyed or raise any objection whatsoever. He clearly understood what was being conveyed and continued to operate as if the transaction was on track.

[58] On May 31, 2018, Suevilia advised of a Firm Closing Date of October 31, 2018. The notice deadline date for providing this notice was June 1, 2018 (90 days before the new Second Tentative Closing date of August 30, 2018). Therefore, the notice was provided within the time period. The date of October 31, 2018 was within 120 days of the Second Tentative Closing Date of August 30, 2018. Mr. Wu did not seek to clarify the message conveyed or raise any objection whatsoever. He clearly understood what was being conveyed and continued to operate as if the transaction was continuing.

[59] On September 5, 2018, Suevilia advised of a new Closing Date of November 30, 2018. As per the Tarion Addendum 3c, the Vendor must give written notice to the Purchaser of the Delayed Closing Date as soon as the Vendor knows that it will be unable to Close on the First Closing date, and in any event at least 10 days before the Firm Closing Date, failing which delayed closing compensation is payable. The notice was given well in advance of this requirement, which would have been October 21, 2018, at the latest, to avoid delayed closing compensation. Further the Vendor can set a Delayed Closing Date which is up to 365 days after the earlier of the Second Closing Date and the Firm Closing Date. The Outside Closing Date could be as late as September 30, 2019, according to the Statement of Critical Dates, however, this would have changed to August 30, 2019 when the Second Tentative Closing Date was set to August 30, 2018. Either way, this date of November 30, 2018 was well within the time frame and was still scheduled to occur before either Outside Closing Date. Even though the notice does not specifically refer to this being a “Delayed Closing Date”, this is unquestionably what this was, upon a simple reading of the letter. Mr. Wu did not seek to clarify the message conveyed or raise any objection whatsoever. He clearly understood what was being conveyed and continued to operate as if the transaction was continuing.

[60] Finally, on November 6, 2018, Suevilia advised of a new Closing Date of December 18, 2018. Again, this notice was provided more than 10 days before the Firm Closing Date of November 30, 2018 to avoid delayed closing compensation. Further, the Closing Date was still scheduled to occur well within the time frame set out above, and before the Outside Closing Date, which could be as late as August 30, 2019. Even though the notice does not specifically refer to this being a “Delayed Closing Date”, this is unquestionably what this was, upon a simple reading of the letter. Mr. Wu did not seek to clarify the message conveyed or raise any objection whatsoever. He clearly understood what was being conveyed and continued to operate as if the transaction was continuing.

[61] It is the view of this court that there was no breach of the Tarion Addendum. There was no need for a new Statement of Critical Dates to be prepared. The “Note” at the bottom of Page 1 of the Tarion Addendum states:

Note: Any time a Critical Date is set or changed as permitted in the Addendum, other Critical Dates may change as well. At any given time the parties must refer to: the most recent revised Statement of Critical Dates; or agreement or written notice that sets a Critical Date, and calculate revised Critical Dates using the formulas contained in the Addendum. Critical Dates can also change if there are unavoidable delays (see section 5 of the Addendum).

Clearly, the Tarion Addendum does not contemplate a new “Statement of Critical Dates” being prepared each time such a notice is sent. The parties can do their own calculations based on the formulas set out in Tarion.

[62] It is the view of this Court that notices were given in accordance with the timeline set out in the Statement of Critical Dates. The failure to say Second Tentative Closing Date or Delayed Closing Date does not invalidate the notice.

[63] Even if this court were to conclude that the February notice was inadequate, in that it did not say Second Tentative Closing Date, that does not make it void, but rather voidable. The purchaser must take advantage of that and indicate they do not accept the notice. There is no suggestion that Mr. Wu ever raised any objection to the notices being provided. Mr. Wu never suggested that the First Tentative Closing Date became the Firm Closing Date because of non-compliance. There is no suggestion that anyone sought to close on that day. Mr. Wu never asked Suevilia for delayed closing compensation. Mr. Wu never sought to terminate the agreement.

[64] Based on all of the facts and circumstances presented, this court has concluded that December 18, 2018 was the Closing Date.

Was Suevilia ready, willing and able to close on December 18, 2018 with no occupancy permit?

[65] Even if the Closing Date was properly moved to December 18, 2018, Mr. Wu argued that Suevilia was not ready, willing and able to close on that date, as they claimed, given that there was no occupancy permit even obtained until December 19, 2018.

[66] Section 9 of the Tarion Addendum – Conditions of Occupancy – states:

(a) On or before Closing, the Vendor shall deliver to the Purchaser:

(i) an Occupancy Permit (as defined in paragraph (d)) for the home; or

(ii) if an Occupancy Permit is not required under the Building Code, a signed written confirmation by the Vendor that all conditions of occupancy under the Building Code have been fulfilled and Occupancy is permitted under the Building Code.

(b) Notwithstanding the requirements of paragraph (a), to the extent that the Purchaser and the Vendor agree that the Purchaser shall be responsible for one or more prerequisites to obtaining permission for occupancy under the Building Code, (the "Purchaser Occupancy Obligations"):

(i) the Purchaser shall not be entitled to delayed closing compensation if the reason for the delay is that the Purchaser Occupancy Obligations have not been completed;

(ii) the Vendor shall deliver to the Purchaser, upon fulfilling all prerequisites to obtaining permission for occupancy under the Building Code (other than the Purchaser Occupancy Obligations), a signed written confirmation that the Vendor has fulfilled such prerequisites; and

(iii) if the Purchaser and Vendor have agreed that such prerequisites (other than the Purchaser Occupancy Obligations) are to be fulfilled prior to Closing, then the Vendor shall provide written confirmation required by subparagraph (ii) on or before Closing.

[67] Suevilia argued that the Building Code does not require an Occupancy Permit for closing, rather it is required for occupancy, and, therefore, the Tarion Addendum does not require an Occupancy Permit for closing. There was no closing in this case. Further, Suevilia argued that one must look back to the Agreement to determine what is required. Suevilia argued that the Tarion Addendum allows for the shifting of the responsibility to the purchaser to get the occupancy permit, and that shifting of responsibility took place in this case given the clear wording of paragraph 9(a) of the Agreement, which stated:

For the purposes of Closing, the Dwelling shall be deemed to be completed when all interior work has been substantially completed so that the Dwelling may be occupied, notwithstanding that there remains interior or exterior work to be completed including, but not limited to, painting, driveway paving, grading, sodding and landscaping. There shall be no holdback or deduction on Closing for uncompleted work. If required, the Purchaser shall be responsible to obtain confirmation of allowable occupancy and a copy of any occupancy certificate from the Municipality, and, unless otherwise required by the Municipality, the Vendor need not provide same to the Purchaser.

Suevilia, therefore, argued that if an Occupancy Permit was required, Mr. Wu must get that himself. According to Suevilia, all the vendor had to do for closing was show that interior work had been substantially completed so that the building could be occupied. This obligation was met by a PDI, as set out in s. 9(b) of the Agreement, in other words, taking the purchaser through the building and showing them it was substantially complete at a PDI meeting. If there was anything that was not in accordance with what the purchaser wanted, it would be noted on a report and rectified. According to Suevilia, the purchaser has a contractual obligation to meet and participate in this inspection. In this case, Suevilia attempted to have the PDI done with Mr. Wu, but despite several attempts, Mr. Wu failed to schedule this meeting or show up at such a meeting. Therefore, as argued by Suevilia, the letter on December 17, 2018 provided written confirmation that the vendor met all of the prerequisites. Suevilia argued that Mr. Wu breached the APS by not showing up for PDI, and, therefore, must be estopped from raising this argument.

[68] Suevilia relied on the case of Mahmood for the proposition that no occupancy permit is required unless there is a closing. The facts in Mahmood surrounding the occupancy permit, however, are different from the case at bar. In Mahmood, the closing date was September 10, 2021 and the builder did not agree to a further extension. On September 8, 2021, in preparation for the anticipated closing, an occupancy permit application was submitted. The inspection took place on September 9, 2021. An occupancy permit for the dwelling was issued on September 10, 2021, therefore, it was available for delivery if the transaction had closed that day. In that context, MacNeil J. held that since there was no closing, there was no obligation on the builder to have delivered the Occupancy Permit and therefore no breach.

[69] It is the view of this court that Suevilia clearly did not obtain an Occupancy Permit in anticipation of closing the transaction. The Occupancy Permit provided clearly states that occupancy inspections were not completed until December 19, 2018. Having said that, it is the view of this court that it was clearly Mr. Wu’s responsibility to obtain the Occupancy Permit as set out in the Agreement of Purchase and Sale, section 9(a). Section 9(a) is not inconsistent with Tarion, as suggested by Mr. Wu, requiring that this court decide the inconsistency in favour of Tarion. The Tarion Addendum clearly states in section 9(b) that the parties can agree that the purchaser is “responsible for one or more prerequisites to obtaining permission for occupancy under the Building Code.” The Agreement of Purchase and Sale clearly states that, “if required, the Purchaser shall be responsible to obtain confirmation of allowable occupancy and a copy of any occupancy certificate from the Municipality, and, unless otherwise required by the Municipality, the Vendor need not provide same to the Purchaser.” The obligation to obtain the Occupancy Permit in this case clearly rested with Mr. Wu. The fact that Suevilia went ahead and obtained an Occupancy Permit on December 19, 2018 does not remove this obligation of the purchaser and does not indicate, or even suggest, that they were not ready, willing and able to close on December 18, 2018.

[70] The evidence is clear that it was Mr. Wu that was not taking any steps toward closing this transaction.

[71] This court has already found that notices were provided to Mr. Wu in accordance with the Tarion Addendum. Clearly those notices were sent to the address /email address that was provided on the APS and related Tarion Addendum. It would be incumbent upon Mr. Wu to ensure that he received information sent to these addresses or provide some other address. The fact that Mr. Wu left the country at some point does not create some extra burden on the builder to ensure that Mr. Wu is aware of the notices they send to the address that they have as part of the Agreement. In fact, the Tarion Addendum states at the bottom of page 2: “Since important notices will be sent to this address, it is essential that you ensure that a reliable email address is provided and that your computer settings permit receipt of notices from the other party.” The February 26, 2018 letter was sent to Mr. Wu’s address via mail. The May 31, 2018 letter was sent to Mr. Wu by email. The September 5, 2018 letter was sent by courier. The November 6, 2018 letter was sent by email. This court is confident that Mr. Wu received and accepted these notices. He was well aware of the closing date for December 18, 2018.

[72] As of December 5, 2018, the lawyer for Mr. Wu was no longer acting. Clearly, Mr. Wu had not previously conveyed to counsel for the seller that his previous counsel was no longer acting, and it was not known to them until that day when former counsel responded. It is not exactly clear when this lawyer stopped acting for Mr. Wu, however, it is clear that, between December 5 and 31, during which a closing was scheduled to occur on a property valued at over $3 million, Mr. Wu had no representation. It would also appear that he was out of the country. Mr. Wu clearly ignored numerous requests to schedule the PDI on this property, something he was contractually bound to take part in. On December 17, 2018, Suevilia emailed a letter to Mr. Wu stating that they had tried contacting him multiple times to schedule the PDI meeting without success and that they went ahead and completed the PDI. They asked for his solicitor’s information, and even seemed willing to extend the time to close if Mr. Wu required an extension. Mr. Wu was duly warned in this letter of the consequences he faced, yet he chose to do nothing. There was not even a response from Mr. Wu until December 31, 2018, when his new lawyer made contact.

[73] Suevilia did what they could to comply with section 9(b) of the Tarion Addendum by completing the PDI and documenting same despite Mr. Wu’s lack of interest in attending.

[74] In this case, the lack of an Occupancy Permit is in fact indicative of and consistent with Mr. Wu’s complete lack of action to ensure the closing occurred as scheduled, as the APS clearly conveys that obtaining an Occupancy Permit was Mr. Wu’s responsibility.

[75] Between December 5, 2018 and the closing date of December 18, 2018, Mr. Wu did nothing to demonstrate a movement toward closing. There was simply silence on his part, until his new counsel reached out on December 31, 2018, stating that they were away. On the other hand, the seller was clearly indicating an intention to close on December 18, including making repeated requests of Mr. Wu to attend the property prior to closing to perform the PDI, and delivery of all documents required for closing on December 5, 2018. All of this was ignored by Mr. Wu. There was no attempt by Mr. Wu to do anything or to clarify anything, despite the fact that his deposit was with someone else. The fact that he was out of the country does not take away his responsibilities under the agreement.

[76] The transaction at issue never closed and title was never transferred to Mr. Wu. There was, therefore, never an obligation on Suevilia to deliver an Occupancy Permit, assuming that it was their responsibility, which this court finds that it was not their responsibility as per the APS. To suggest that this indicates a lack of readiness on the part of Suevilia to close, when one looks at the actions of Suevilia, especially when considering the complete inaction of Mr. Wu, is unreasonable.

[77] It is the view of this court that it was in fact Mr. Wu, and only Mr. Wu, who was not ready, willing and able to close on the date of December 18, 2018.

Delayed Closing Compensation

[78] It is of note that section 7(b) of the Tarion Addendum states that “Delayed Closing Compensation is payable only if the Purchaser’s claim is made to Tarion in writing within one (1) year after Closing, or after termination of the Purchase Agreement….and otherwise in accordance with this Addendum.” There is no evidence that such a claim was made in this case. Having said that, the court in Ching v. Pier 27 Toronto Inc., 2019 ONSC 6073, paras. 106-108, made it clear that, unless expressly stated, the statutory right to compensation does not replace or extinguish the common law right of action for breach of contract, as such a finding would be perverse where the right arises out of consumer protection legislation.

[79] Therefore, this court is not convinced that it would be fatal to Mr. Wu’s claim that he did not make a claim to Tarion. Further, it is not fatal to Mr. Wu’s claim that he does not provide proof of losses. Section 7(d) of the Tarion Addendum is clear that receipts are not required in support of a claim for living expenses.

[80] The circumstances that are fatal to a claim for delayed closing compensation, however, are that this Court has found that Suevilia complied with the notice requirements and timeline, the closing date was December 18, 2018, Suevilia was ready, willing and able to close, and Mr. Wu failed to close in breach of the Agreement.

[81] This court points out that section 7(b) of the Tarion Addendum specifically states that delayed closing compensation is payable only if:

a. Closing occurs; or

b. The Purchase Agreement is terminated or deemed to have been terminated under paragraph 10(b) of the Addendum (If closing has not occurred by the Outside Closing Date, the Purchaser has 30 days to terminate the Agreement by written notice to the Vendor…)

Neither of these circumstances occurred in this case.

[82] No delayed closing compensation is warranted.

Suevilia’s Repudiation of the Agreement

[83] According to Mr. Wu, Suevilia did not attempt to set a new closing date after closing did not occur on December 18, 2018. Instead, they sent the Plaintiff a Certificate of Default on January 7, 2019.

[84] In Kirshenblatt v. Kriss, 2012 ONSC 6568, para. 32, the court held that the buyer is entitled to the return of their deposit where there is a breach by the vendor. Mr. Wu also points to section 11 of the Tarion Addendum.

[85] According to Mr. Wu, the earliest possible Outside Closing Date is one year after the First Tentative Closing Date of May 31, 2018, which would have been May 31, 2019. Suevilia served the Certificate of Default on January 7, 2019, well ahead of this date. Suevilia did not terminate the agreement by mutual written agreement under section 10(a) of the Tarion Addendum, and Suevilia did not trigger section 10(b) by attempting to close after the Outside Closing Date. The Certificate delivered on January 7, 2019 was not relevant to section 10, as Suevilia did not rely on any provision under the Agreement nor the Tarion Addendum to terminate the Agreement. Rather, according to Mr. Wu, they terminated the Agreement unilaterally based on a Firm Closing Date set unilaterally by Suevilia that was not compliant with the Tarion Addendum.

[86] Based on the above, this court is not satisfied that Suevilia set a Firm Closing Date, unilaterally, that was not compliant with the Tarion Addendum. In fact, this court found that Suevilia was fully compliant with the Tarion Addendum. As a result, Mr. Wu failed to close on a properly set Closing Date.

[87] Having said that, however, even if Suevilia was not in compliance, such that it repudiated the Agreement, this does not necessarily terminate the Agreement. Mr. Wu was required to clearly and unequivocally accept the repudiation within a reasonable time. Mr. Wu would also have the option of treating the Agreement as subsisting and affirm it.

[88] In this case, Mr. Wu clearly accepted the various notices and continued as if the Agreement was continuing with a closing on December 18, 2018. Even after the fact, he hired a new lawyer at the end of December who asked about the closing date.

[89] This argument is without merit, especially in light of the earlier findings of this court.

Mr. Wu has forfeited his deposit

[90] The Agreement of Purchase and Sale in this case states at paragraph 25(a):

Default

In the event that the Purchaser defaults with respect to any of the covenants, representations, warranties, acknowledgments or obligations to be performed by the Purchaser pursuant to this Agreement and such default continues for seven (7) days after written notice thereof has been given to the Purchaser or his solicitor by the Vendor or its solicitor, or in the event the Purchaser fails to complete the transaction on the Closing Date the Vendor shall have the right to declare this Agreement null and void and, in such event, the Deposit and all other amounts paid by the Purchaser to the Vendor hereunder shall be forfeited to the Vendor as liquidated damages and not as a penalty and without prejudice to or limiting the rights of the Vendor to claim for damages in excess of such amounts and without limiting any other rights or remedies to which the Vendor may be entitled in law.

[91] In Azzarello v. Shawqi, 2019 ONCA 820, the court was considering remedies in the case of a failed real estate transaction. The court stated:

[45] It is well-established by case law that when a purchaser repudiates the agreement and fails to close the transaction, the deposit is forfeited, without proof of any damage suffered by the vendor: see Tang v. Zhang, 2013 BCCA 52, 359 D.L.R. (4th) 104, at para. 30, approved by this court in Redstone Enterprises Ltd., v. Simple Technology Inc., 2017 ONCA 282, 137 O.R. (3d) 374. Where the vendor suffers no loss, the vendor may nevertheless retain the deposit, subject to relief from forfeiture.

[46] This court recently restated the law regarding why a deposit is forfeited in Benedetto v. 2453912 Ontario Inc., 2019 ONCA 149, 86 B.L.R. (5th) 1, at paras. 5-7:

Where a payer (usually the purchaser) gives a vendor a deposit to secure the performance of a contract for purchase and sale of real estate, the deposit is forfeit if the purchaser refuses to close the transaction, unless the parties bargained to the contrary: see Howe v. Smith (1884), 27 Ch. D. 89 (C.A.); March Bothers & Wells v. Banton (1911), 1911 CanLII 74 (SCC), 45 S.C.R. 338. In Howe v. Smith, Fry L.J. stated at p. 101:

Money paid as a deposit must, I conceive, be paid on some terms implied or expressed. In this case no terms are expressed and we must therefore inquire what terms are to be implied. The terms most naturally to be implied appear to me in the case of money paid on the signing of a contract to be that in the event of the contract being performed it shall be brought into account, but if the contract is not performed by the payer it shall remain the property of the payee. It is not merely a part payment, but is then also an earnest to bind the bargain so entered into, and creates by the fear of its forfeiture a motive in the payer to perform the rest of the contract.

The deposit stands as security for the purchaser's performance of the contract. The prospect of its forfeiture provides an incentive for the purchaser to complete the purchase. Should the purchaser not complete, the forfeiture of the deposit compensates the vendor for lost opportunity in having taken the property off the market in the interim, as well as the loss in bargaining power resulting from the vendor having revealed to the market the price at which the vendor had been willing to sell: H.W. Liebig Co. v. Leading Investments Ltd., 1986 CanLII 45 (SCC), [1986] 1 S.C.R. 70, at pp. 86-87.

The motion judge provided a helpful summary of the law: a deposit is not part of the contract of purchase and sale, but "stands on its own as an 'ancient invention of the law designed to motivate contracting parties to carry through with their bargains', 'something which binds the contract and guarantees its performance', and is an 'earnest to bind the bargain so entered into, and creates by the fear of its forfeiture a motive in the payer to perform the rest of the contract'": see Tang v. Zhang, 2013 BCCA 52, 41 B.C.L.R. (5th) 69; Comonsents Inc. v. Hetherington Welch Design Ltd., 2006 CanLII 33779 (Ont. S.C.); Howe v. Smith.

[47] However, forfeiture is always subject to the equitable remedy of relief from forfeiture. Section 98 of the Courts of Justice Act, R.S.O. 1990, c. C.43, provides that: "[a] court may grant relief against penalties and forfeitures, on such terms as to compensation or otherwise as are considered just." In Stockloser v. Johnson, [1954] 1 Q.B. 476 (C.A.), the English Court of Appeal set out the two pronged test that has been followed in Ontario for applying the relief from forfeiture provision: 1) whether the forfeited deposit was out of all proportion to the damages suffered; and 2) whether it would be unconscionable for the seller to retain the deposit: Redstone at para. 15.

[92] For all of the reasons and circumstances set out above, it is clear that Mr. Wu failed to close the transaction. His deposit must be forfeited.

Conclusion

[93] As stated earlier, there is no question that the issue of Suevilia’s damages, if any, and the liability of the agent and broker will remain live issues in this litigation. However, this court has more than enough information to make a determination in relation to the Tarion Addendum and the deposit. This court is of the view that it can, and, in fact, must, rule on both the Tarion Addendum and rightful owner of the deposit together. As stated, both parties have thoroughly argued all aspects of the transaction between Mr. Wu and Suevilia. It is the view of this court that it is in as good a position as a trial judge to find the necessary facts and apply the relevant legal principles so as to resolve the dispute in relation to the Tarion Addendum and deposit. To rule on the issues surrounding the Tarion Addendum without ruling on the deposit would not be a proportionate, more expeditious, and less expensive means to achieve a just result, as the same issues would be relitigated in relation to the deposit at a later time. Frankly, conclusions made in relation to the Tarion Addendum dictate to whom the deposit belongs.

[94] Effectively, Mr. Wu is asking for relief from forfeiture which is an equitable and discretionary remedy. Mr. Wu is not denying receiving the various notices from Suevilia. Therefore, he received them and was aware of the various dates. He took no issue with the form of the notice or the dates set out. Upon receipt of the closing documents, less than two weeks before the scheduled closing, Mr. Wu’s lawyer advised that he was no longer the lawyer on the file. It was very clear in the December 5, 2018 correspondence that the closing date was December 18, 2018. Mr. Wu made no effort to contact Suevilia or have other counsel contact Suevilia until December 31, 2018. Mr. Wu also refused to participate in the PDI which is a requirement under the Agreement. In fact, he seemed to have had no intention of doing so as he was out of the country. On the other hand, Suevilia did what was required of them.

[95] For all of the foregoing reasons, this court orders as follows:

a. An Order dismissing the Summary Judgment Motion in relation to the Suevilia Action (CV-19-00138986-0000) and Wu Action (CV-19-00140029-0000);

b. An Order that Mr. Wu has forfeited the deposit, in the amount of $300,000, to Suevilia;

[96] If the parties are unable to agree on costs of this Motion, the court will accept a three-page written submission on costs from each party, to be filed with the court, and sent by email to Bev.Taylor@ontario.ca, no later than Friday, February 17, 2023 at 4:30 pm.

Justice V. Christie

Date: February 13, 2023