NEWMARKET COURT FILE NO.: CV-22-2964-00 DATE: 20240611 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN: David Bruce Wynn and Jacqueline Mary Rocchio Plaintiffs/Defendants to Counterclaim – and – George Kentris and Helga Kentris Defendants/Plaintiffs by Counterclaim – and – Alana Pescador, Deanna Pescador, Defendants to Counterclaim

Counsel: Charles Baker, for the Plaintiffs George Kentris and Helga Kentris, Defendants, Self-Represented Maria Bursey, for the Defendants, Alana Pescador and Deanna Pescador

HEARD: June 7, 2024

REASONS FOR DECISION

HEALEY, J.:

Nature of the Motion

1In this action the Plaintiffs David Wynn and Jacqueline Rocchio seek damages for breach of an Agreement of Purchase and Sale dated February 12, 2022 (the “APS”) for the property municipally known as 390 Bexhill Road, Newmarket, Ontario between the Plaintiffs as vendors and the Defendants George and Helga Kentris as purchasers.

2In their motion the Plaintiffs seek an order for summary judgment against the Defendants in the amount of $399,798.36 (as of April 25, 2023) for breach of the APS, as well as pre- and post-judgment interest from April 26, 2023 and costs.

3While not formally requested in the Notice of Motion but pled at paragraph 15 of the Plaintiffs’ Reply and Defence to Counterclaim, this court also considered a request by the Plaintiffs’ counsel to dismiss the Counterclaim against them.

4In their Statement of Defence and Counterclaim, the Kentis Defendants have added the real estate agents involved in the transaction, Alana Pescador and Deanna Pescador. There are no crossclaims as between the Defendants to the Counterclaim.

5Granting the Plaintiffs’ motion would leave remaining the Counterclaim against the Pescador Defendants, and so it is necessary to consider whether this is a case in which it is appropriate to grant partial summary judgment.

6Counsel for the Pescador Defendants attended the motion but took no position on the relief sought.

7The Plaintiff, David Wynn, and the Defendant, George Kentris, served affidavits for this motion. There is no evidence from any other party. The Kentris Defendants did not serve and file a factum for the motion despite being ordered to do so by Edwards, R.S.J. at the triage court on April 9, 2024. George Kentris made submissions on his own behalf and on behalf of his spouse, Helga Kentris.

Pleadings

8The Statement of Claim is straightforward in that it seeks the usual damages and costs arising from a breach of a residential real estate agreement of purchase and sale.

9The Kentris Defendants were noted in default on October 13, 2022. After they retained a solicitor, the Plaintiffs agreed to set aside the noting in default in return for a timetable to schedule the steps for this summary judgment motion. Thereafter the Defendants served a Statement of Defence and Counterclaim.

10With respect to the agents, the Kentris Defendants allege in that pleading that the agents were acting for and on behalf of the Plaintiffs and were not neutral. They further allege that the agents referred them to an appraiser six months after signing the APS, which resulted in them being unable to secure sufficient financing that they otherwise would have been able to secure had a “proper valuation been done by neutral third parties who were not acting in the interests of the Plaintiffs”.

11The only allegation levelled against the Plaintiffs with respect to this issue is that it was the Plaintiffs who “advised the Defendants that they should make use of their real estate agents of record on the Agreement, being Deanna Pescador and Alana Pescador (the “Agents”)”, and that thereafter the Defendants engaged the agents for the purposes of brokering financing.

12The only other defence advanced against the Plaintiffs was a failure to mitigate.

13In their Counterclaim, the Kentris’ seek the amount of $450,000 in special damages, plus interest, against all Defendants by Counterclaim, jointly and severally, relying on the same allegations made in the Statement of Defence.

14The Plaintiffs’ counsel advances the argument that summary judgment can be granted by this court on the Claim and Counterclaim because the claims and issues raised against the Pescador Defendants are readily severable from those raised against his clients.

15The Kentris Defendants did not argue that this motion is premature until the outcome of their Counterclaim can be determined, nor request that the enforcement of any judgment rendered against them on this motion be stayed pending the outcome of their Counterclaim.

The Evidence

16The Plaintiffs’ listing brokerage, Main Street Realty Ltd., and their sales representatives Deanna and Alana Pescador, also acted as brokers/sales agents for the Kentris Defendants for this transaction. However, before doing so they had all parties sign a Form 810, Working With a Realtor, and a Form 320, Confirmation of Cooperation and Representation of Buyer and Seller, which authorized the agents to act for both the vendors and purchasers in the real estate transaction.

17The purchase price in the APS is $1,850,000, with no financing conditions and a deposit of $80,000. The offer made by the Defendants was $260,000 over the asking price of $1,590,000. The transaction was to be completed by August 11, 2022.

18On or around August 4, 2022, the Defendant George Kentris delivered a note either by hand delivery or text message (the evidence is not entirely clear) to the Plaintiffs requesting their cooperation in allowing an extension of the closing. The note explained that he required a sale of a plaza to close, anticipated to occur a month later than anticipated (by August 29, 2022) in order to be in funds to close on the APS. He offered his apologies and his hope that an arrangement could be worked out, including “even paying further deposit”. In his submissions, Mr. Kentris confirmed that this was the situation as of August, 2022, and did not deny that he was the author of the note.

19Despite the lack of financing condition in the APS and the information conveyed in that note, in his sworn evidence for this motion Mr. Kentris stated that he and his wife were in need of financing to complete this purchase and needed an appraisal of the property as part of the usual process for borrowing. In his submissions, he stated that near the first closing date he reached out to one of the agents to tell her that he needed an appraisal for financing.

20Sometime before August 11, 2022, the Kentris’ solicitor formally requested an extension of the transaction because his clients did not then have the financing to complete the purchase.

21On August 15, 2022, the parties agreed to the extension of the closing to September 9, 2022, on certain terms set out in writing (“the Extension Agreement”). The Kentris Defendants signed an acknowledgement by which they unconditionally accepted and agreed to the terms of the Extension Agreement. One of the terms of the Extension Agreement was, as requested by the Defendants, a reduction in the purchase price. It was reduced by $75,000, but subject to the condition that if the transaction did not close on September 9, 2022, the price reduction would be void and the Defendants would be liable for the full purchase price of $1,850,000.

22The Defendants failed to meet many of the terms of the Extension Agreement. They breached those terms that required the payment of additional funds to cover extra costs and expenses incurred by the Plaintiffs as a result of the extended closing date, as well as an additional irrevocable and non-refundable deposit of $25,000 to be credited on the statement of adjustments on completion of the transaction. The Defendants also failed to provide proof of the pending sale of the plaza, another term of the Extension Agreement.

23Thereafter, the Plaintiffs’ solicitor began writing and calling the Defendants’ solicitor to make inquiries about the Defendants’ non-compliance with the Extension Agreement and the APS and whether they would be closing the transaction on September 9, 2022. There were no meaningful responses to those emails and phone calls.

24In his evidence, Mr. Kentris does not deny Mr. Wynn’s evidence that the various terms of the Extension Agreement were not fulfilled by the Defendants.

25At 11:33 a.m. on September 9, 2022, the Defendants’ solicitor sent an e-mail to the Plaintiffs’ solicitor advising that the Defendants would not close that day.

26Correspondence was sent that same day in reply, by which the Plaintiffs’ solicitor advised that his clients were ready, willing and able to close that day as agreed, and that the closing package had been tendered upon the Defendants’ solicitor. He then declared a breach of the APS and confirmed that the Plaintiffs would be taking steps to place the property back on the market to mitigate their damages. The letter also advised that the Plaintiffs would be retaining litigation counsel to commence an action against the Defendants for all damages and costs resulting from the breach of the APS.

27There was no response from the Defendants’ solicitor, or the Defendants, to this letter. The Defendants failed to close the transaction. In his submissions, Mr. Kentris admits that he did not go through with the sale and stated “I bear the fault” for that breach.

28This action was commenced on September 19, 2022.

29On or about December 6, 2022, Mr. Kentris sent another note to the Plaintiffs. It offered two explanations for the failure to close and apologized to the Plaintiffs for the outcome. The note did not refer to the sale of the plaza. The main reason for the default was stated to be that the Defendant Helga Kentris had had a return of cancer. The other explanation given was that Mr. Kentris took the advice of “your agent” to retain an appraiser, and the results were a shock. He wrote that “lenders would not touch it.”

30He also wrote: “Yes you both were great in lowering the price… but not enough. Why should you? The house is great!”

31Mr. Kentris’ evidence was that the appraised value was $1,500,000, which was $350,000 less than the purchase price. The appraisal was not produced by the Kentris Defendants as evidence on this motion, and Mr. Baker stated in response to a question from the court that it had never been produced to him.

32In his evidence, and in his Defence and Counterclaim, Mr. Kentris alleged that the agents represented to him and his wife that the property was worth the price that that they offered. No details are provided on when, where, or how those representations were made. However, these allegations do not involve the Plaintiffs.

33The Statement of Defence pleads that prior to the first closing date, the Plaintiffs knew that the Defendants were seeking financing for the purchase and advised the Defendants “to make use of” the agents. Mr. Kentris’ evidence is that it was the Plaintiffs who suggested that they should use the agents’ direction for the purposes of having the property valued. No details have been provided about when, where and how such a suggestion was made. In fact, during his submissions Mr. Kentris twice stated that he never spoke to the sellers, that all communication took place through the agent, Alana Pescador. This is in line with the Plaintiffs’ evidence, which is that they never made any suggestion to the Defendants about who they should use to appraise the property. The Plaintiffs’ only interaction with the Defendants was during the house walk-through before they obtained their appraisal.

34Further, Mr. Kentris’ affidavit provides no evidence about how the Plaintiffs would have known that financing was required. He did not reference the “plaza sale” in his affidavit whatsoever.

35The Defendants have not provided details of an appraisal other than stating the appraised value. There is no evidence of who did it, or when it was completed. They have also provided no evidence of their efforts to obtain financing. Little turns on this, however, as theirs was a clean offer that did not contain a financing condition.

36There is also evidence from the Defendants that they allegedly sent a text message to the Plaintiffs about a vendor take-back mortgage. This also is inconsistent with Mr. Kentris’ submission that all communication went through the agent. The Plaintiffs deny receiving such a text, although are aware that one was sent to one of the agents. This idea was actually raised by the Defendants before the Extension Agreement was made and rejected by the Plaintiffs. In correspondence delivered to the Defendants’ solicitor on August 11, 2022, the Plaintiffs’ real estate solicitor confirms “[o]ur clients will not agree to provide your clients with a vendor take back mortgage but will agree to extend the original closing date to Friday, September 9, 2022…”.

37The Defendants rely on the Plaintiffs’ rejection of this offer in their mitigation argument, indicating that the Plaintiffs could have received a full $1,500,000 on closing and the balance in a vendor take-back mortgage, to be paid within a year. Had the Plaintiffs agreed to the Defendants’ proposal, it is submitted that they could have received the full purchase price by now and avoided all legal procedures and steps.

38The Plaintiffs explain that given the Defendants’ conduct to that point, including lack of responsiveness and breaches of so many of the terms of the Extension Agreement, they did not trust the Defendants.

39The Plaintiffs relisted the property, but it did not sell until January 6, 2023, with a closing date of March 1, 2023. It was sold for $1,400,000.

40The Plaintiffs followed the advice of their litigation lawyer and real estate agents throughout the period of their mitigation. They began by relisting the property on the Multiple Listing Service (MLS) on September 13, 2022, for an asking price of $1,599,800.

41During this listing, from September 13 to October 17, 2022, the Plaintiffs accepted all showings, of which there were only 12. No offers were received. Their agents, again Alana and Deanna Pescador, advising that the feedback for the property from prospective purchasers was that it was overpriced.

42The Plaintiffs then terminated the listing on October 17, 2022, after the property had been on the market for 34 days with no offers. They relisted on the MLS from October 17, 2022 to December 31, 2022, lowering the asking price to $1,499,800. During the 75 days that the property remained on the market, there were 28 showings. Again, the feedback from the listing agents was generally that the property was overpriced.

43During this period they received just one offer, for $1,100,000. The Plaintiffs explained that the offer contained numerous errors and unreasonable conditions, and neither the potential buyer nor the buyer’s agent had booked a showing or viewed the property. The Plaintiffs and their agents were uncomfortable with this proposed buyer and so did not make a counteroffer.

44The Plaintiffs relisted on MLS for a fourth time for an asking price of $1,448,000. Three showings occurred during the four days that it was on the market. On January 2, 2023, they received an offer for $1,380,000, with an inspection condition and a closing date of January 31, 2023. After negotiations, the Plaintiffs accepted an offer of $1,400,000, with a closing date of March 31, 2023. The sale closed as scheduled.

45Throughout this time, the Defendants made no attempt to purchase the property, despite Mr. Kentris’ representations in his material that he could have come up with $1,500,000 to purchase the property back in September. His explanation was that the Pescador agents never brought the relisting to his attention. Given that the Plaintiffs’ solicitor advised that the property was going to be relisted, I consider Mr. Kentris’ excuse to be disingenuous.

46In summary, the property was listed continuously on MLS for a period of 113 days before a willing purchaser could be found.

47In addition to using MLS, the Plaintiffs’ agents took other marketing steps, such as an open house, featuring the property in the Toronto Star on October 15, 2022, using Instagram and Facebook, featuring the property in a neighbourhood newspaper, launching a price drop program for a week in October, paying for an advertising campaign on Facebook featuring placement on marketplace mobile, mobile app, mobile suggested video feed and an Instagram story that reached 2,842 people.

[48] The $399,798.36 claimed by the Plaintiffs in their Motion is comprised of: (a) Damages of $370,000 for the difference between the sale price in the APS and the eventual sale price, with credit for the $80,000 deposit; (b) Damages for legal fees payable to their real estate lawyer in connection with the aborted sale in the amount of $8,866; (c) Property taxes of $3,387.54; and (d) Prejudgment interest from August 11, 2022 to March 23, 2023 (201 days) on $1,780,000 at 1.8% in the amount of $17,544.82.

49The court requested from Mr. Baker an up-to date calculation of the prejudgment interest from March 23, 2023 to the hearing date. The additional prejudgment interest amounts to $8,727.93.

50Mr. Baker requested Judgment in the revised figure of $408,526 ($399,798.36 + $8,727.93).

The Law of Summary Judgment

51With respect to when summary judgment can be granted, Karakatsanis, J., writing for the Court in Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87 (S.C.C.), stated at paragraph 49:

There will be no genuine issue requiring trial when the judge is able to reach a fair and just determination on the merits on a motion for summary judgment. This will be the case when the process 1) allows the judge to make the necessary findings of fact, 2) allows the judge to apply the law to the facts, and 3) is a proportionate, more expeditious and less expensive means to achieve a just result.

52At paragraph 50, the Court defined the overarching issue to be “whether summary judgment will provide a fair and just adjudication.” Karakatsanis, J. went on to say that “the standard for fairness is not whether the procedure is as exhaustive as a trial, but whether it gives the judge confidence that she can find the necessary facts and apply the relevant legal principles so as to resolve the dispute.”

53The powers available under rules 20.04(2.1) and (2.2) are presumptively available: Hryniak, supra, at paragraph 67. They only become unavailable where it is in the interest of justice for such powers to be exercised only at trial. At paragraph 56 of Hryniak the Court noted: “the interest of justice cannot be limited to the advantageous features of a conventional trial, and must account for proportionality, timeliness and affordability. Otherwise, the adjudication permitted with the new powers – and the purpose of the amendments – would be frustrated.”

54In terms of the approach to a motion for summary judgment, Hryniak directs at paragraph 66 that the judge should first determine if there is a genuine issue requiring a trial based only on the evidence before her, without using the new fact-finding powers. If there appears to be a genuine issue requiring a trial, she should then decide if the need for a trial can be avoided by using the new powers under rules 20.04(2.1) and (2.2). These powers may be used by the motion judge in her discretion 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.

55The court must take a hard look at the evidence on a motion for summary judgment to determine whether there is, or is not, a genuine issue for trial, and may freely canvass the facts and law in doing so. The moving party bears the onus of establishing that there is no triable issue; however, the responding party on a motion for summary judgment must “lead trump or risk losing”: 1061590 Ontario Ltd. v. Ontario Jockey Club, 1995 CarswellOnt 63 (Ont. C.A.), at paragraph 36. It is only after the moving party has discharged its evidentiary burden of proving that there is no genuine issue that requires a trial for its resolution that the burden shifts to the responding party to prove that the claim or defence has a real chance of success: Cuthbert v. TD Canada Trust, 2010 ONSC 830 (Ont. S.C.J.), at paragraph 13.

56Just like the moving party, the responding party must put their best foot forward on a motion for summary judgment and is not entitled to rely on the prospect of additional evidence that may be tendered at trial: Chernet v. RBC General Insurance Co., 2017 ONCA 337 (Ont. C.A.) at paragraph 12; Sweda Farms Ltd. v. Egg Farmers of Ontario, 2014 ONSC 1200 (Ont. S.C.J.), at paragraph 26, aff’d 2014 ONCA 878 (Ont. C.A.), leave to appeal to SCC refused, [2015] SCCA No. 97 (S.C.C.). This means that although the onus is on the moving party to establish the absence of a genuine issue requiring a trial, there is an evidentiary burden on the responding party, who may not rest on the allegations or denials in the party’s pleadings, but must present by way of affidavit, or other evidence, specific facts showing that there is a genuine issue for trial: Cuthbert, at paragraph 12; Sanzone v. Schechter, 2016 ONCA 566 (Ont. C.A.), at paragraph 30. As stated in Dawson v. Rexcraft Storage and Warehouse Inc. (1998), 11 O.A.C. 201 (Ont. C.A.), at paragraph 17, “[t]he motions judge is entitled to assume that the record contains all the evidence which the parties will present if there is a trial.”

57These principles were more recently affirmed once again in Broadgrain Commodities Inc. v. Continental Casualty Company (CNA Canada), 2018 ONCA 438 (Ont. C.A.), at paragraph 7.

The Law of Partial Summary Judgment

58In Hryniak, Karakatsanis J. gave the following guidance at paragraph 60:

The “interest of justice” inquiry goes further, and also considers the consequences of the motion in the context of the litigation as a whole. For example, if some of the claims against some of the parties will proceed to trial in any event, it may not be in the interest of justice to use the new fact-finding powers to grant summary judgment against a single defendant. Such partial summary judgment may run the risk of duplicative proceedings or inconsistent findings of fact and therefore the use of the powers may not be in the interest of justice. On the other hand, the resolution of an important claim against a key party could significantly advance access to justice, and be the most proportionate, timely and cost effective approach.

59The Ontario Court of Appeal has cautioned, however, that the principles that guide whether partial summary judgment is appropriate are more complex than those that apply to summary judgment generally: Service Mold + Aerospace Inc. v. Khalaf, 2019 ONCA 369, at paragraph 14 (“Service Mold”).

60When asked to grant partial summary judgment, the motion judge must consider:

(a) the risk of duplicative or inconsistent findings as the balance of the action proceeds. This includes a consideration of whether there are issues of credibility that are also raised by the counterclaim or third-party claim: Vandenberg v. Wilken, 2019 ONCA 262, at paragraphs 11 and 13; Butera v. Chown, Cairns LLP, 2017 ONCA 783, [2017] O.J. No. 5267, at paragraph 29;

(b) that where there is a real possibility of inconsistent findings, partial summary judgment is to be avoided: Butera, at paragraph 29; Vandenberg, at paragraph 11; Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, [2014] O.J. No. 2745, at paragraph 34. A real risk of duplicative or inconsistent findings at trial taints a motion judge’s conclusion that partial summary judgment is advisable in the context of the litigation as a whole: Canadian Imperial Bank of Commerce v. Deloitte & Touche, 2016 ONCA 922, [2016] O.J. No. 6319, at paragraph 38.

(c) whether the issue(s) that are the subject of the partial summary judgment motion may be readily bifurcated from those in the main action: Butera, at paragraph 34;

(d) in the context of the litigation as a whole, whether granting partial summary judgment will result in disposing of issues in a proportionate, expeditious and cost-effective manner: Vandenberg, at paragraph 15; Butera, at paragraph 28; Mason v. Perras Mongenais, 2018 ONCA 978, [2018] O.J. No. 6381, at paragraph 22; and,

(e) that partial summary judgment should be considered a rare procedure and granted only if doing so does not give rise to any of the associated risks—delay, expense, inefficiency and inconsistent findings—and only where the issue may be readily bifurcated and dealt with expeditiously and in a cost-effective manner: Butera, at paragraph 34; Service Mold, at paragraph 14. An issue is not readily bifurcated if the motion judge’s findings will either constrain the trial judge or lead to the risk of inconsistent findings on the same issues at trial: Vandenberg, at paragraph 32.

61These principles were also addressed in Malik v. Attia, 2020 ONCA 787, at paragraphs 61 and 62. The Court of Appeal stated that when asked to hear a motion for partial summary judgment a judge must determine whether, in the circumstances, it will achieve the objectives of proportionate, timely and affordable justice, or instead cause delay and increase expense. The court directed that a motion judge should make three simple requests of counsel or the parties:

(i) Demonstrate that dividing the determination of this case into several parts will prove cheaper for the parties;

(ii) Show how partial summary judgment will get the parties’ case in and out of the court system more quickly;

(iii) Establish how partial summary judgment will not result in inconsistent findings by the multiple judges who will touch the … case.

Analysis

62I am satisfied that there is no genuine issue requiring a trial in this case on the claim. Applying the test set out in Hryniak v. Mauldin, 2014 SCC 7, I find that I am able to reach a fair and just determination on the merits based on the content of the pleadings and the material filed for this summary judgment motion. For reasons to be explained, I find that the threshold questions from paragraph 62 of Malik have been satisfied, and that this is an appropriate case to grant partial summary judgment.

63On the evidence before me, the issues of liability, mitigation and damages are able to be determined expeditiously, without need for an expensive trial. None of these issues require a trial to resolve.

Did the Defendants breach the APS?

64In both their Statement of Defence, and in Mr. Kentris’ affidavit, there are admissions that the Defendants did not close the transaction as required by the APS and the Extension Agreement. Then, as stated, he admitted that during his submissions.

65In Tse v. Sood, 2015 ONSC 755 (Ont. Div. Ct.), Perrell J. noted that there are four main legally acceptable justifications for a purchaser refusing to close a real estate transaction. None of those exist in this case. The four situations that entitle a purchaser to not close are:

(1) Non-satisfaction of a condition precedent;

(2) Breach of a fundamental promise;

(3) Vendor’s failure to convey good title; and

(4) Misrepresentation, along with the other elements of a claim for the equitable remedy of rescission being satisfied: Tse v. Sood, at paragraphs 8-10.

66The APS is both unambiguous and unconditional. The Extension Agreement is clear and sets a firm closing date. The Plaintiffs were under no obligation to accept the offer with respect to a vendor take back mortgage, or even negotiate on the topic, and their refusal to do so was entirely reasonable given the failure of the Defendants to honour the terms of the Extension Agreement.

67The Statement of Defence and Counterclaim does not plead that the Plaintiffs misrepresented the value of the property. Mr. Kentis’ affidavit states that the purchase price of $1,850,000 was reached “based on the representations regarding the Property that were put forward, including those made by one or both Agents.” But nowhere in his evidence does he state that either of the Plaintiffs misrepresented the value of the home.

68It would also stretch credulity to attempt to maintain such an allegation against the Plaintiffs. It is manifestly unlikely that the Plaintiffs would offer to sell their home for $1,590,000, all the while believing, or misrepresenting, that it was worth more. They would obviously be motivated to receive its fair market value. Further, neither of these Plaintiffs owed the Defendants a duty of care, nor was this pled. There is no evidence of misrepresentation on the part of the Plaintiffs that would entitle the Defendants to resile from the APS.

69Further, I reject all of Mr. Kentris’ evidence with respect to any involvement by the Plaintiffs in an appraisal. Whatever contact was made from the Kentris Defendants to the Pescador Defendants to assist with obtaining an appraisal, there is no evidence that the Plaintiffs played any role. And again, there is no evidence that an appraisal was even carried out, other than Mr. Kentris’ representation that it was.

70There is no issue requiring a trial as to whether the Kentris Defendants breached the APS and Extension Agreement by failing to close. The Plaintiffs were entitled to treat the APS and the Extension Agreement at an end and sue for their damages. The Defendants are liable to the Plaintiffs for all damages that flow from that breach, subject to a consideration of mitigation.

The Plaintiffs’ Damages

71The Plaintiffs bear the burden of proving that they have suffered a loss and the quantum of their damages.

72The legal principle for the calculation of damages payable as a result of breach of contract is set out in Hadley v. Baxendale, (1854) 9 Exch 341. The Plaintiffs are entitled to recover any reasonable damages that reasonably flow from the breach of contract by the Defendant.

73The obligation of the Plaintiffs to establish damages applies before any issue of mitigation arises: Holst v. Singh, 2018 ONSC 4220, at paragraph 13.

74In failed real estate transactions, the damages payable to the seller include the difference between the price under the agreement and the price of the new sale of the property once it closes, plus any additional carrying costs incurred by the seller in mitigating their loss and dealing with the purchaser’s breach, including legal fees thrown away from the aborted sale: Bang v. Sebastian, 2018 ONSC 6226, at paragraphs 53, 57 and 59; aff’d 2019 ONCA 501. Additionally, a purchaser’s deposit is to be credited against the damages proved by the vendor: Bang, at paragraph 68. Also see Azzarello v. Shawqi, 2019 ONCA 820, at paragraph 53.

75All the Plaintiffs’ losses were reasonably foreseeable to the Defendants as a result of failing to close the transaction. It would be patently obvious that the Plaintiffs would have additional carrying costs of the home until it could be resold, that they had incurred legal fees in relation to the failed sale, and that if the Plaintiffs could not resell for $1,850,000, they would be in a less favourable position and lose the benefits of the contract that the Kentris Defendants had struck with them.

76The Plaintiffs have met the onus of establishing their damages by providing evidence to fully substantiate all the damages claimed, subject to a consideration of mitigation.

77The Plaintiffs’ damages include the difference in the purchase price of $1,850,000 (not the reduced price since the Extension Agreement was breached by the Defendants), the property taxes that they had to pay between September 9, 2022 and January 31, 2023, and legal fees thrown away in the amount of $8,866. The difference in sale price between the APS and the final sale was $450,000, less the deposit of $80,000, bringing the loss on the sale price to $370,000. The property taxes total $3,387.54. The legal fees and disbursements for the aborted sale were $8,866.

Did the Plaintiffs Reasonably Mitigate Damages?

78A defendant who alleges that a plaintiff has failed to mitigate damages bears the burden of proof. A defendant needs to prove both that the plaintiff has failed to make reasonable efforts to mitigate, and that mitigation was possible: Janiak v. Ippolito, [1985] S.C.J. No. 5 (Q.L.), at paragraph 33; Southcott Estates Inc. v. Toronto Catholic District School Board, [2012] 2 S.C.R. 657, at paragraph 24.

79Damages will be reduced by the extent that mitigation would have avoided the loss: Janiak, at paragraph 30; Southcott, at paragraph 75.

80Mitigation does not have to be perfect. As set out in O’Hare v. Wyton, 2018 ONSC 3946, at paragraph 36:

Innocent parties need not demonstrate flawless efforts at mitigation. They need only act reasonably, in view of the prevailing circumstances known at the time to exist. See DHMK Properties Inc. v. 2296608 Ontario Inc., 2017 ONSC 2432, reversed on other grounds, 2017 ONCA 961.

81The Defendants’ argument is that in this case “reasonable mitigation” was for the Plaintiffs to accept their offer of a vendor take-back mortgage for $350,000, payable in one year, with the balance of the purchase price paid on the closing date set out in the Extension Agreement, in which case the Plaintiffs allegedly would have no losses.

82This defence can be briefly dispensed with as totally unmeritorious. Neither the APS nor the Extension Agreement required that the Plaintiffs entertain such a proposition. Further, the evidence shows that the Plaintiffs acted in good faith in agreeing to extend the closing date and reduce the purchase price. They were under no obligation to do either, yet did so in order to ensure that the transaction did not fall through. In return, the Defendants did not uphold their end of the bargain as set out in the Extension Agreement. The Plaintiffs’ refusal to resort to further negotiations with the Defendants as a means of mitigation was entirely reasonable in the circumstances.

83Further, the Defendants have provided no proof that they would have been in a position to come up with $1,500,000, or $1,850,000, or any amount, at any time.

84With respect to mitigation, this is a case that comes close to perfect. There is ample evidence in the record of the Plaintiffs’ continuous efforts to sell the property during the months when the market had “cooled” in the latter part of 2022. I find that they acted reasonably in all the steps the took, including maintaining an active presence on MLS, making gradual reductions in the asking price, acting on the advice of their listing agents, and in accepting the first legitimate offer that was forthcoming. The offer that they accepted was only $100,000 less than the appraisal allegedly received by the Defendants sometime before September 9, 2022. It is clear from the evidence that when it was offered for sale at $1,499,800, there were no offers despite 28 showings.

85I find that the evidence supports a finding that the Plaintiffs reasonably mitigated their damages. There is no reason for their damages to be reduced.

Is Partial Summary Judgment Appropriate?

86The threshold questions that must be satisfied are: first, demonstrating that dividing the determination of the case into several parts will prove cheaper for the parties; second, showing how partial summary judgment will get the parties’ case in and out of the court system more quickly; and third, establishing how partial summary judgment will not result in inconsistent findings by the multiple judges who touch the divided case.

87As I have found, there is no merit to the Defendants’ mitigation argument. Nor is there evidence to support the allegation that the Plaintiffs played a role in finding an appraiser, or that they represented the property’s value. Accordingly, since the Counterclaim against them rests solely on these allegations, there is no reasonable prospect of success on the Counterclaim as against the Plaintiffs. Resolving the Claim and Counterclaim on a motion for summary judgement saves these parties the expense of examinations for discovery and of a trial.

88Eliminating some parties from the Counterclaim will assist in getting the case out of the system more quickly because fewer parties will streamline the proceeding and shorten the trial time necessary.

89The other allegations in the Statement of Defence and Counterclaim are made against the Pescador Defendants. They are not inter-related with the allegations made against the Plaintiffs. The allegations against the agents are, in summary: that they misrepresented the value of the property, that they were not neutral as between vendors and purchasers, and that they chose or counselled the Defendants to choose an appraiser who did not act in their best interests. In his argument, Mr. Kentris also mentioned that they failed to mention a cemetery in the vicinity of the property, although this does not appear in the pleading.

90Despite the pleading and the allegations, Mr. Kentris submitted, puzzlingly, that the Defendants had never made a claim against the agents, and that the agent acted “very well”.

91If the Counterclaim against the Pescador Defendants continues, there are no findings that could be made that could result in findings against the Plaintiffs given the available evidence and the admissions made by Mr. Kentris during this hearing. There are no issues that would remain that could give rise to credibility findings against the Plaintiffs.

92In the context of this action as a whole, granting partial summary judgment will result in disposing of issues in a proportionate, expeditious and cost-effective manner for the reasons discussed.

Costs

93The Plaintiffs were awarded their costs of the action and this motion in the amount of $13,000 inclusive. The Plaintiffs provided a Costs Outline; the Kentris Defendants did not.

94The Plaintiffs’ Costs Outline calculated fees and disbursements on a partial indemnity basis in the amount of $12,392.98 and on a substantial indemnity basis in the amount of $16,181.45. Mr. Baker asked for $15,000.

95There was no basis provided to award elevated costs, but this court awarded $13,000 as there will be further steps required by Mr. Baker, such as preparing the Judgment and providing the Court’s Reasons for Judgment to his clients.

96This amount is fair and reasonable for an outcome in which the Plaintiffs have had total success and given that the action necessitated preparation of a Reply and Defence to the Counterclaim and proceeded to cross-examinations of the Plaintiffs and the exchange of Affidavit of Documents. The hours spent on this action since its inception in September 2022 are not at all excessive and appear to include only routine and necessary steps required to move the action forward. The Defendants were represented by counsel up until serving a Notice of Intention to Act in Person on April 17, 2024. They will be familiar with the cost of legal services. Overall, the costs claimed by the Plaintiffs are fair and reasonable in all the circumstances, and viewed objectively, would be within the reasonable expectation of the Defendants.

Final Judgment

97This court ordered on the date of the motion that Judgment shall issue in the following terms:

(1) The Plaintiffs’ motion for summary judgment on the claim and counterclaim is granted.

(2) The Plaintiffs shall have judgment in the amount of $408,526 inclusive of prejudgment interest.

(3) The Counterclaim shall be dismissed against David Wynn and Jacqueline Rocchio.

(4) The Defendants George Kentris and Helga Kentris shall forthwith pay to the Plaintiffs the costs of this motion and the action in the sum of $13,000 inclusive.

98This court orders that the draft order provided by counsel and signed by this court on June 7, 2024 shall issue.