Court File and Parties
COURT FILE NO.: CV-22-00682173-0000 DATE: 2024-05-28 SUPERIOR COURT OF JUSTICE - ONTARIO
RE: HEATHER ADLER and DAVID KENDALL, Plaintiffs AND: WILLIAM WOITOWICH and SANDRA DAGA, Defendants
BEFORE: Merritt J.
COUNSEL: Monica Unger Peters, Counsel for the Plaintiffs Avrum Slodovnik, Counsel for the Defendants Viktoria Anteby, Counsel for the Third Parties
HEARD: March 12, 2024
Endorsement
Overview
1The plaintiffs Heather Adler and David Kendall (collectively, the “Buyers”), move for summary judgment for damages for breach of an agreement of purchase and sale of a residential property.
2The defendants William Woitowich and Sandra Daga (collectively, the “Sellers”) are the owners of the property at 139 Fallingbrook Road, Toronto, Ontario (the “Property”).
3The third parties are the Sellers’ listing real estate agents, Re/Max Hallmark Realty Ltd., Ken McLachlan and John Kennedy (the “Third Parties”).
4The Sellers repudiated the agreement, and the Buyers now move for summary judgment under r. 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (the “Rules”) and under the Courts of Justice Act, R.S.O. 1990, c. C.43 (the “CJA”), for damages as a result of the aborted transaction.
5The Sellers claim that they agreed to sell the Property to the Buyers because of undue influence by the Third Parties.
Decision
6There are no issues requiring a trial. The Sellers repudiated the agreement, and the Buyers accepted the repudiation. The agreement should not be set aside because of undue influence or disclosure of confidential information. The normal measure of damages is appropriate. The date of assessment of damages is April 25, 2022, because the Buyers were unable to enter the market earlier. The Buyers’ damages are $525,000, which is the difference between the sale price and the appraised value of the Property on April 25, 2022.
Background Facts
7On December 3, 2021, the Buyers and the Sellers entered into a standard form Ontario Real Estate Association Agreement of Purchase and Sale whereby the Buyers agreed to purchase, and the Sellers agreed to sell, the Property (the “APS”). The APS provided for a purchase price of $2,100,000, a deposit of $100,000, and a closing date of February 17, 2022.
8The deposit was delivered and accepted on December 4, 2021.
9On December 7, 2021, Ms. Daga advised Ms. Adler that the Sellers no longer wanted to sell the Property. The Sellers also advised the Buyers’ real estate agent that they had “changed their mind” about selling the Property and that it was infested with termites. The Sellers have provided no evidence to substantiate the alleged termite infestation.
10On December 16, 2021, the Sellers’ lawyer sent a letter to the Buyers and their real estate agents advising that the Sellers were no longer interested in selling the Property, would not be completing the transaction in accordance with the APS, and intended to breach the APS.
11On January 11, 2022, the Buyers accepted the Sellers’ anticipatory breach of the APS, advised that they intended to claim damages and requested the return of their deposit. The deposit was returned to them on February 8, 2022.
12The Buyers purchased another property on April 25, 2022, at 10 Stanwick Avenue, Toronto (“Stanwick”) for $2,750,000.
Positions of the Parties
13The Buyers move for summary judgment on the issues of liability and damages for breach of contract for the aborted real estate transaction, including the difference between the purchase price under the APS and the cost of Stanwick or, alternatively, damages equal to the difference between the purchase price under the APS and the value of the Property on April 25, 2022, when they purchased Stanwick.
14The Sellers oppose the motion for summary judgment. They submit that this action is not appropriate for summary judgment and that it should be tried together with the third-party claim. The Sellers say there is other litigation pending, including a claim by the Third Parties against the Sellers for commissions owing and the third-party claim of the Sellers against the Third Parties for contribution, indemnity, and mental distress. None of the pleadings in these other actions were before me. There is no order for consolidation.
15There is no motion for summary judgment on the third-party claim. The Third Parties agree that the case is appropriate for summary judgment but submit that there is no evidence of damages since there is no evidence of the value of the Property on the date of the repudiation. Alternatively, they submit damages are nominal.
Issues
16The issues are as follows:
- Is there a genuine issue requiring a trial based on the written record?
- If so, can the need for a trial be avoided using the court’s enhanced powers under rr. 20.04(2.1) or 20.04(2.2)?
- If so, did the sellers repudiate the APS and was that repudiation accepted by the Buyers?
- Should the court set aside the APS because of undue influence or disclosure of confidential information?
- What is the appropriate measure of damages?
Analysis
17Rule 20.04(2)(a) provides: “The court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence”.
18Rule 20.04(2.1) sets out the court's powers on a motion for summary judgment as follows:
In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:
- Weighing the evidence.
- Evaluating the credibility of a deponent.
- Drawing any reasonable inference from the evidence.
19In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 66, the Supreme Court of Canada established a road map outlining how a motions judge should approach a motion for summary judgment:
[T]he judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole. [Emphasis in original.]
20There is no genuine issue requiring a trial when the court is able to reach a fair and just determination on the merits of the motion. This will be the case where the process (1) allows the court to make necessary findings of fact, (2) allows the court to apply the law to the facts, and (3) is a proportionate, more expeditious, and less expensive means to achieve a just result: Hryniak, at para. 49; Moffitt v. TD Canada Trust, 2023 ONCA 349, 483 D.L.R. (4th) 432, at para. 39.
21The court should use its enhanced powers and decide a motion for summary judgment only where it leads to “a fair process and just adjudication”: Ang v. Lin, 2023 ONSC 4446, at para. 15, citing Mason v. Perras Mongenais, 2018 ONCA 978, at para. 44, and Eastwood Square Kitchener Inc. v. Value Village Stores, Inc., 2017 ONSC 832, at paras. 3-6 (and cases cited therein).
22In Joshi v. Chada, 2022 ONSC 4910, Glustein J. set out the relevant legal principles applicable to summary judgment as follows:
(i) The purpose of r. 20 of the Rules is to (a) eliminate claims that have no chance of success at trial, and (b) provide judges with fact-finding powers to be used on a summary judgment motion: Hryniak, at paras. 44-45, 66; (ii) The evidence on a summary judgment motion must enable the motion judge to be confident that they can fairly resolve the dispute: Hryniak, at para. 57; (iii) The motion judge’s enhanced powers allow the court to weigh evidence, evaluate credibility, and draw reasonable inferences from the evidence: Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429, 141 O.R. (3d) 81, at para. 83; (iv) The focus of a summary judgment motion is not on what kind of evidence could be adduced at trial, but rather on whether a trial is required: Hryniak, at para. 56; (v) The court is entitled to assume that it has all the evidence that would be available at trial related to the matters at issue: Portuguese Canadian Credit Union v. Pires, 2011 ONSC 7448, at para. 11, aff’d 2012 ONCA 335; (vi) The moving party has the onus of proving that there is no genuine issue requiring a trial. Then, the onus shifts to the responding party to provide evidence of specific facts showing that there is a genuine issue requiring a trial: Sweda Farms Ltd. et al. v. L.H. Gray & Son Limited et al., 2013 ONSC 4195, at paras. 26-27, leave to appeal refused, 2014 ONSC 3016; (vii) Summary judgment is not appropriate if the credibility of the parties is squarely in issue and requires a trial: Demetriou v. AIG Insurance Company of Canada, 2019 ONCA 855, 97 C.C.L.I. (5th) 204, at para. 9; (viii) The more important credibility disputes are to determining key issues, the harder it will be to fairly adjudicate those issues solely on a paper record. “It is not always a simple task to assess credibility on a written record. If it cannot be done, that should be a sign that oral evidence or a trial is required”: Cook v. Joyce, 2017 ONCA 49, at para. 92, citing Trotter Estate, 2014 ONCA 841, 122 O.R. (3d) 625, at para. 55; and (ix) The court must take “great care” in assessing credibility and reliability on affidavit evidence, since “[e]vidence by affidavit, prepared by a party’s legal counsel, which may include voluminous exhibits, can obscure the affiant’s authentic voice”. Consequently, the motion court must “ensure that decontextualized affidavit and transcript evidence does not become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial where the trial judge sees and hears it all”: Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, 120 O.R. (3d) 438, at para. 44.
23The court can draw an adverse inference that there is no better evidence available than that which is provided by that party: Travelers Insurance Company of Canada v. LCL Builds Corporation, 2018 ONSC 1805, 90 C.L.R. (4th) 217, at para. 46; S.N.S. Industrial Products Limited v. Omron Canada Inc., 2018 ONCA 278, at para. 5.
24The court has granted summary judgment in cases involving aborted real estate transactions: Zoleta v. Singh and RE/MAX Twin City Realty, 2023 ONSC 5898, 53 R.P.R. (6th) 283, at para. 38; Forest Hill Homes v. Ou, 2019 ONSC 4332, at para. 26; Paradise Homes North West Inc. v. Sidhu, 2019 ONSC 1600, 6 R.P.R. (6th) 149, at para. 33; and Rosehaven Homes et al. v. Aluko et al., 2022 ONSC 1227, 40 R.P.R. (6th) 280, at para. 97, aff’d 2022 ONCA 817.
25Partial summary judgment should only be granted in the clearest of cases where there are issues that can be readily bifurcated, and which do not give rise to risks of delay, expense, inefficiency, and inconsistent findings: Truscott v. Co-Operators General Insurance Company, 2023 ONCA 267, 482 D.L.R. (4th) 113, at para. 54. In considering whether to grant partial summary judgment I must consider whether (i) there is a risk of duplicative or inconsistent findings at trial; and (ii) whether granting partial summary judgment is advisable in the context of the litigation as a whole: Butera v. Chown, Cairns LLP, 2017 ONCA 783, 137 O.R. (3d) 561, at paras. 27-28.
Repudiation of the APS
26There is no real dispute that the Sellers repudiated the APS, and the Buyers accepted the repudiation.
27A seller’s change of mind is not a justification for repudiating an agreement of purchase and sale, particularly where the seller acted “with deliberation and reflection” and where “the price agreed to has not been shown to be unfair”: Lawson v. Lawson Estate (1988), 92 N.B.R. (2d) 394 (Q.B.), at paras. 38-40; Davis v. Khouri, 2021 ONSC 4095.
28In this case, the only reason given by the Sellers for repudiating the APS was that they changed their mind. The Sellers acted with deliberation and reflection; they rejected the Buyers’ first offer of $1,999,990, rejected the Buyers’ revised offer of $2,025,000, and stood firm at $2,100,000.
29There is evidence that the price was fair. The Sellers listed the Property on the MLS for $1,999,990. The Buyers were the only parties that made an offer. The Sellers did not adduce any expert evidence that the market value of the Property was higher than the purchase price or that the purchase price was unfair.
30I find that the Sellers repudiated the APS and the Buyers accepted same. There is no issue requiring a trial in this regard.
31The Sellers did not pursue the argument set out in their motion materials that the Buyers had agreed to accept the return of the deposit in full satisfaction of their claim. In any event, there is no evidence to suggest that the Buyers ever intended to give up their claim for damages.
Undue Influence/Breach of Confidential Information
32The Sellers have many complaints about their dealings with the Third Parties. The Sellers claim that they executed the APS as a result of undue influence by the Third Parties. The Sellers also say that the Third Parties disclosed information to the Buyers which the Sellers had provided to the Third Parties in confidence.
33The Sellers allege that the Third Parties ignored their instructions and unduly pressured them to agree to the terms of the APS.
34The court will not set aside a contract if the person exercising undue influence is not a party to the contract unless the contracting party has actual, constructive, or imputed notice of the undue influence: Canadian Imperial Bank of Commerce v. Finlan (1999), 78 O.T.C. 241 (Gen. Div.) at paras. 74-80, aff’d , 135 O.A.C. 298 (C.A.); Bank of Montreal v. Duguid (2000), 47 O.R. (3d) 737 (C.A.), at paras. 12-18, leave to appeal granted on other grounds, [2000] S.C.C.A. No. 298.
35There is no evidence that the Buyers had any knowledge of the undue influence, if any, of the Third Parties on the Sellers. The Sellers’ first contact with the Buyers was after the Sellers executed their listing agreement with the Third Parties. I accept the Buyers’ unchallenged evidence that they had no knowledge of any circumstances giving rise to the alleged undue influence by the Third Parties.
36With respect to the disclosure of confidential information, the Sellers say that during the negotiations leading up to the signing of the APS they sent a confidential email to the Third Parties. The email contained information that the Sellers would accept $2.1 million for the Property. The Sellers say this was confidential information intended only for the Third Parties. They allege that the Third Parties wrongly sent the information contained in the email to the Buyers and gave them an unfair advantage in the negotiations.
37The Sellers rely on Continental Currency Exchange Canada Inc. v. Sprott, 2023 ONCA 61. This case has no application here. In Continental Currency, there was disclosure of material covered by solicitor-client privilege and email correspondence which the opposing party knew was confidential. Here, the Sellers do not suggest that the Buyers were aware of the disclosure of any confidential information.
38There is no issue requiring a trial on whether the APS should be set aside on the basis of undue influence or breach of confidential information. The Third Parties were not parties to the APS. The Buyers had no knowledge, constructive or otherwise, of any of the circumstances giving rise to the alleged undue influence of the Third Parties on the Sellers or the disclosure of the Seller’s confidential information. The APS cannot be set aside on this basis.
39There is no reason the third-party claim needs to be tried with the main action. The issues in the third-party claim can be readily separated from the issues in this action and do not give rise to risks of inconsistent findings.
40I leave the issue of whether the Third Parties unduly influenced the Sellers or improperly disclosed their confidential information to be determined on the trial of the third-party claim.
The Appropriate Measure of Damages
41The Buyers and the Third Parties each retained an expert appraiser, each of whom swore an affidavit appending their reports as an exhibit and filed a Form 53. The Sellers were content to rely on the opinion evidence of the appraiser retained by the Third Parties. Both experts were cross-examined by all parties but only the Sellers chose to file the transcript of their cross-examination of the appraiser retained by the Buyers. The experts rely on the same assumptions and only differ in their conclusions regarding the estimated value of the Property.
42The Buyers claim expectation damages, including the difference between the purchase price under the APS and the additional $650,000 they paid for Stanwick, plus the additional land transfer tax, additional financing costs, and renovation costs they say they incurred to make Stanwick comparable to the Property. They also claim damages associated with selling an investment property and other expenses.
43The Buyers claim expectation damages for the loss of the bargain because they say that the usual measure of damages fails to satisfy the expectancy principle. Had the APS closed they would have owned the Property. They attempted to mitigate their damages by buying Stanwick which they say is a comparable property.
44The Third Parties say there is no reason to depart from the usual measure of damages, being the difference between the purchase price under the APS and the value of the Property on the date of the repudiation, or alternatively the date upon which the Buyers accepted the repudiation. Since there is no expert evidence of the value of the Property on the date of repudiation (or acceptance of repudiation), the Buyers have failed to prove damages, or alternatively, I should award only nominal damages.
45The Sellers say summary judgment should not be granted because the Buyers failed to mitigate their damages and the damages claimed are excessive.
46The usual measure of damages when a seller repudiates an APS is the difference between the purchase price and the market value on the closing date: The Rosseau Group Inc. v. 2528061 Ontario Inc., 2023 ONCA 814, 169 O.R. (3d) 192, at para. 1.
47In Rosseau, starting at para. 62, the Court of Appeal said:
[62] The normal measure of damages for a failed real estate purchase is the difference between the contract price and the market value of the land on the “assessment date”. The assessment date is usually the date on which the purchase was scheduled to close. Although the court may set a later date if the party seeking damages satisfies certain criteria, the presumption is that damages are to be assessed as of the date of the breach. That presumption is not easily displaced; any deviation from it must be based on legal principle: 100 Main Street Ltd. v. W.B. Sullivan Construction Ltd. (1978), 20 O.R. (2d) 401, 88 D.L.R. (3d) 1 (C.A.), at para. 55, leave to appeal refused (1978) 20 O.R. (2d) 401 (S.C.C.); 642947 Ontario Ltd. v. Fleischer (2001), 56 O.R. (3d) 417, 209 D.L.R. (4th) (C.A.), at paras. 41-43; Rougemount Capital Inc. v. Computer Associates International Inc., 2016 ONCA 847, 410 D.L.R. (4th) 509, at para. 50; Akelius Canada Ltd. v. 2436196 Ontario Inc., 2022 ONCA 259, 161 O.R. (3d) 469, leave to appeal refused, [2022] S.C.C.A. No. 183, at para. 27.
[63] There are several reasons why the normal measure is the presumptive, measure of the innocent party’s damages and is not to be easily displaced.
[64] First, when a purchase contract is performed, the purchaser pays the purchase price on closing and obtains, on the same date, ownership of an asset. Damages are awarded on the principle that the innocent party, as nearly as possible, should be put in the position it would have been in if the contract had been performed. Using, as the measure of damages, the difference between the purchase price and the land’s market value on the closing date puts this principle into effect: 100 Main Street, at paras. 55-56. The market value represents the financial equivalent of the asset itself.
[65] Second, commercial certainty is enhanced by a predictable damages methodology. This court has stated that an early, and predictable, date on which the innocent party’s damages are crystallized promotes efficient behaviour and reduces uncertainty and speculation: Kinbauri Gold Corp. v. Iamgold International African Mining Gold Corp. (2004), 246 D.L.R. (4th) 595 (Ont. C.A.), at para. 125, per Laskin J.A. (concurring), leave to appeal refused, [2000] S.C.C.A. No. 658. Although made in the context of a sale of goods, the observation applies equally to the sale of land.
48With respect to the date of assessing damages, the Court of Appeal in Rosseau said:
[83] The first issue has to do with calculating damages as of an assessment date. The assessment date is presumptively the date of closing. It can be moved, in the discretion of the court, where to do so is fair, which usually has to do with when the innocent party should re-enter the market so they can engage in mitigating transactions. As this court stated in Akelius: “the date of breach remains a starting point for the assessment of loss, modified only to the extent that the innocent party satisfies the court that a later date is appropriate on the grounds that it is the first date upon which the party could reasonably have been expected to re-enter the market and mitigate its damages”: at para. 27.
49The same principles will apply in a rising market: Akelius, at paras. 28-29.
50Using the cost of a replacement property is not appropriate when the property that is the subject of the aborted APS and the replacement property are not of comparable value: Chang v. Hung, 2021 ONSC 8208, 37 R.P.R. (6th) 292, at para. 29. In Chang, the court rejected the “lost opportunity” theory of damages because it could not assess whether the replacement house had a comparable value to, or was the closest replacement for, the house which was the subject of the aborted transaction. The court noted that the two houses were in different neighborhoods.
51There are some similarities between the Property and Stanwick. They are relatively equivalent in square footage, both properties have three bedrooms, and both either have accommodated or can accommodate the construction of a garage, a basement workshop, and a guest suite.
52There are also significant differences. Stanwick is in the Beaches neighborhood, whereas the Property is in the Birchcliffe-Cliffside neighborhood (albeit in the Fallingbrook area). The Stanwick property is significantly larger with a double garage, whereas the Property has no garage.
53I find that the normal method of calculating damages is appropriate.
54The burden is on the buyer to show why a different date than the presumptive date of closing is appropriate: Nguyen v. Hu, 2022 ONSC 2666, 42 R.P.R. (6th) 240, at para. 94. The buyer must lead evidence as to why they did not re-enter the market upon repudiation: Nguyen, at para. 99.
55The Sellers repudiated the APS on December 16, 2021. On December 22, 2021, the Buyers’ lawyer responded that the Property was unique, and the Buyers were ready and able to close. It was reasonable to attempt to keep the deal alive.
56On December 27, 2021, Ms. Adler emailed her real estate agent advising that it appeared that the Sellers would not change their position and that they would need to start looking for another property.
57The Buyers accepted the repudiation on January 11, 2022.
58The Sellers submit that the Buyers did not search for another property in earnest until the deposit was returned to them on February 8, 2022.
59On cross-examination, Ms. Adler said she thought they started looking at other properties once they got the deposit back. Her evidence in this regard was less than certain. In any event, even if they did not actually see other properties, the evidence shows that the Buyers began actively searching for a replacement property immediately after accepting the Sellers’ repudiation.
60There is extensive e-mail and text correspondence between the Buyers and their real estate agent between January 15, 2022, and April 20, 2022, which demonstrates that the Buyers were actively searching during this time. Over the course of the search the Buyers widened the geographic area as well as their budget. The Buyers considered 22 properties and viewed 10 properties in person during this timeframe.
61They made an offer on April 11, 2022, and bought Stanwick on April 25, 2022.
62There was no evidence of any comparable properties available for sale between January 15 and April 25, 2022, that the Buyers overlooked. Although the Sellers’ counsel cross-examined Ms. Adler on a number of properties in the Birchcliffe-Cliffside neighborhood, there was no evidence that these properties were comparable.
63I find that the Buyers were unable to buy a house until April 25, 2022, when they entered an agreement of purchase and sale for Stanwick for the purchase price of $2,750,000. It was a difficult market with limited supply.
64Damages should be assessed as of the date upon which the plaintiffs could reasonably mitigate their damages: Domowicz v. Orsa Investments Ltd. (1994), 20 O.R. (3d) 722 (Gen. Div.), at paras. 38-39, 44, varied on other grounds, , 40 O.R. (3d) 256 (C.A.); Marshall v. Meirik, 2019 ONSC 6215, at para. 12.
65It is appropriate to use April 25, 2022, as the assessment date.
66The Buyers filed an affidavit from Jennifer Skinn of Musso Appraisals with her expert report appended on the issue of the value of the Property. Ms. Skinn valued the Property at $2,625,000 on April 25, 2022.
67The Third Parties filed an affidavit from Terry Rout of Janterra Real Estate Advisors with his expert report appended regarding the value of the Property. Mr. Rout valued the Property at $2,200,000 on April 25, 2022.
68The Sellers did not submit expert evidence and instead relied on Mr. Rout’s report.
69In this case, there were responding reports from each expert providing a critique of the opposing expert’s report and cross-examinations of both experts. There was no conflict in the underlying assumptions; only the estimated value of the Property was in dispute.
70Although there were conflicts in the approach and conclusions of the experts, the evidence was not overly complex, was thoroughly canvassed and can be fairly assessed: Wise v. Abbott Laboratories, Ltd., 2016 ONSC 7275 at para 333. I am satisfied that I can weigh the evidence and make findings based on the evidence and submissions before me. The interests of justice do not require that the weighing of the expert opinions be exercised only at a trial.
71I prefer the opinion of Ms. Skinn for the reasons that follow.
72Mr. Rout conceded that Ms. Skinn’s report reasonably followed the accepted appraisal guidelines and methodologies and the Canadian Uniform Standards of Professional Appraisal Practice effective January 1, 2022 (“CUSPAP”), whereas Mr. Rout’s report does not comply with CUSPAP standards.
73The CUSPAP standards establish benchmarks which ensure the credibility, accuracy, and reliability of reports produced by appraisers. Compliance with the CUSPAP standards is mandatory for all members of the Appraisal Institute of Canada.
74Mr. Rout’s report did not comply with CUSPAP standards because it failed to include a comprehensive scope of work, failed to identify all assumptions, and limiting conditions, and failed to review and reconcile the data, analysis, and conclusions for adjustments made to the sales comparables.
75The criticisms of Ms. Skinn’s opinion were that she had only four years’ experience, she is based in Kitchener, she considered only frontage and did not take into account the total size of the lots, and she did not appreciate the significance of the difference between Fallingbrook Road and Fallingbrook Drive.
76Mr. Rout’s primary criticism of Ms. Skinn’s report was that some of her comparables were in the Beaches neighborhood. Although located in the Birchcliffe-Cliffside neighborhood rather than the Beaches, the Property is in the Fallingbrook area, a higher-end, specific pocket of homes that is somewhat unique and comparable to properties in the Beaches neighborhood. The Sellers acknowledged as much when they insisted that the Property be marketed for sale as a Beaches property. The Sellers recognized that their Property on Fallingbrook Avenue was different than other properties in the Birchcliffe-Cliffside neighborhood and specifically asked their real estate agents to market it as being in the “Beaches” area.
77Ms. Skinn relied on a larger number of comparables which were more similar to the Property and where adjustments were required, she provided a quantitative analysis and explanation for those adjustments. Ms. Skinn’s comparables were three properties in the Beaches neighborhood and three in the Birchcliffe-Cliffside neighborhood.
78Mr. Rout excluded comparable properties that were in the Beaches neighborhood and relied on less comparable properties which required significant adjustments for building size, location, time, lot size and condition. The adjustments are unsupported by direct market evidence, are somewhat speculative and subjective, increase the risk of error, and decrease the reliability of the opinion. Mr. Rout did not specify the amount of each adjustment he made to the comparables; rather, he just showed the total adjustment. This makes it difficult to assess the adjustments he made.
79I award the Buyers $525,000 in damages, being the difference between the purchase price under the APS ($2,100,000) and the value of the Property on April 25, 2022 ($2,625,000) according to Ms. Skinn.
Other Damages
80I also award the Buyers the increased cost of borrowing and land transfer tax. I encourage the parties to agree on these amounts. If they cannot do so, they may arrange a case conference with my judicial assistant to determine a process for making submissions regarding same.
81I do not award damages claimed regarding the sale of the Buyers’ investment property at 201-74 Spadina Road. They have claimed damages for lost rental income because they say they had to sell that property as they needed money to purchase Stanwick. I have not awarded damages related to the purchase of Stanwick. Even if they were entitled to these damages, the Buyers have not produced evidence to support that they were financially unable to purchase Stanwick without the equity from the Spadina property. On cross-examination, Ms. Adler refused to answer a question regarding how much disposable money was available to the Buyers between December 2021 and February 2022. She also refused to provide documentary evidence of their financial position. In the absence of such evidence, I would not make a finding that the Buyers had to sell the Spadina property to finance the purchase of Stanwick. Also, when the Buyers obtained financing for the purchase of the Spadina property they said that did not intend to lease it. This is inconsistent with their claim that they lost rental income by selling the property.
Costs
82I encourage the parties to agree on the issue of costs. If they cannot do so, I will consider brief written submissions. These costs memoranda shall not exceed three pages in length (not including any bills of costs or offers to settle). The Buyers shall file their costs submissions within 15 days of the date of this endorsement. The responding parties shall file their costs submissions within 15 days of the receipt of the Buyers’ materials. The Buyers may file a brief reply within five days thereafter. If submissions are not received by June 14, 2024, the file will be closed, and the issue of costs considered settled.
Merritt J.
Date: May 28, 2024
