COURT FILE NO.: CV-21-0187-0000 DATE: 2024 01 25
ONTARIO SUPERIOR COURT OF JUSTICE
BETWEEN: Jordan Douglas Coffey and Allison Coffey, plaintiffs (Moving Parties) David Kirwin and Allison Mason, for the plaintiffs (Moving Parties)
– and – Sheryl Ann High, Estate Trustee for the Estate of Larry High, deceased, and Sheryl Ann High Broghan Masters, for the defendants (Responding Parties)
HEARD: January 11, 2024
Ruling on Summary Judgment Motion
CHOZIK J.
Overview:
[1] The plaintiffs, Jordan and Allison Coffey, entered into a written agreement with the defendants, Sheryl and Larry High, to buy the Highs’ cottage on Williams Lake in Chatsworth, Ontario. The written agreement of purchase and sale (“APS”) was signed by the parties on May 25, 2021. The closing was to be on January 4, 2022. This extended closing was meant to permit the Highs to enjoy their cottage until the end of that year.
[2] In November, 2021, the Highs made it known to the Coffeys that they would not close the transaction. As a result, the Coffeys commenced this action. They sought only specific performance of APS (i.e. no damages) and costs. They bring this summary judgment motion on the basis that there is no genuine issue for trial.
[3] Extensive evidence was adduced on this motion by both parties. Their “compendiums” for the oral argument alone exceed 1,000 pages.
[4] The Coffeys submit that they had a valid agreement in writing to purchase the cottage. They further submit that the Highs had no right to rescind the agreement and are, therefore, in breach of it. They also argue that the property is unique, hence specific performance is the only adequate relief. They take the position that there is no genuine issue for trial. Summary judgment should be granted.
[5] Although they did not bring a summary judgment motion, the Highs argue that summary judgment should be granted dismissing the action. They submit that the APS was not valid because:
(i) Jordan initialed a change to the purchase price contained in the contract after the change was made and not before ,
(ii) Allison, who changed the original purchase price in her handwriting, was not an authorized user of the Ontario Real Estate Association (“OREA”) form and had no authority to change anything on the form; and
(iii) the deposit was not delivered by the Coffeys within the 24 hours of acceptance of the offer. They also submit that the agreement was unconscionable. They argue that specific performance should not be granted, but that the action should be dismissed.
[6] I do not accept the Highs’ arguments. Having carefully considered the extensive evidence on this motion, I am satisfied that there is no genuine issue for trial. Using the powers under Rule 20.04 (2) (a) of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 (“Rules”), I find that the APS was valid, the deal was not unconscionable and specific performance is the only adequate remedy. Summary judgment is granted. Specific performance is ordered.
Background:
[7] The Coffeys and the Highs owned cottages near each other on Williams Lake for some time. The Coffeys made it known that they wanted to buy another cottage on that lake. It was not disputed that Jordan had approached two other cottage owners and offered to buy their properties in March of 2020, but his offers were not accepted. This was during the Covid pandemic, in the spring of 2020 and 2021, when cottages were in very high demand.
[8] In May, 2021 Larry decided to sell the cottage, much to Sheryl’s shock and surprise.
[9] Larry and Jordan discussed the sale and agreed upon a price. The details of how these numbers were reached, who approached whom first, and who proposed what to whom and when, were the subject of much debate between the parties. Ultimately, it is not disputed that Jordan initially offered $450,000 for the cottage. Larry wanted $525,000. The final agreed upon price was $475,000.
[10] It is not disputed that on May 25, 2021 at 5:28 pm, Jordan sent Larry an email with the unsigned APS attached with the purchase price being $450,000. He indicated in that email that Allison would come over at 7:00 pm to the Highs’ cottage, with a printed copy of the APS and requested the contact information for Larry’s lawyer.
[11] It is undisputed that Allison came over to the Highs’ cottage with a hard copy of the printed APS, signed by both Jordan and Allison. Jordan was not there. He had signed the APS electronically before Allison brought it over. The parties disagree as to whether the hard copy printed APS Allison brought over said the purchase price was $450,000 or $475,000. On all the evidence, including the APS, Larry, Sheryl, Allison and Jordan signed the APS and initialled a change of the purchase price from $450,000 to $475,000. The factual dispute is about when Allison made the change to the purchase price and the timing of Jordan’s electronic signature and initials to that amendment.
[12] When the APS was negotiated and signed, Larry and Jordan intended to use the same lawyer, Kevin Fryday (“Fryday”) for the closing. Fryday had been retained by Jordan just days earlier to prepare the APS. The next morning, Fryday advised Jordan, and Jordan in turn advised Larry, that Fryday was not permitted to act on behalf of both the vendor and the purchaser. Larry agreed to retain his own lawyer and to provide the name and contact information to Jordan. These communications are contained in texts and emails adduced in evidence on this motion.
[13] None of the texts or emails exchanged by Jordan, Larry, or their lawyers in the days and weeks after the APS was signed suggest that Larry had any second thoughts about selling the cottage to the Coffeys. To the contrary, in those exchanges Larry expressed that he was happy to have sold the cottage to Jordan. At one point, Larry told Jordan in a text that a realtor from Toronto had said that the cottage might be worth $550,000 and that Larry wanted Jordan to know that in case Jordan wanted to change his mind. Larry expressed in his text messages that he was relieved to know that the cottage would pass on to someone like Jordan who knew and appreciated the lake and already had a cottage there.
[14] The APS provided that a deposit of $10,000 was to be delivered by the Coffeys to the “Vendor’s lawyer in trust” within 24 hours of the offer being accepted. The APS, in para. 20, also contained a “time is of the essence” provision as follows:
- TIME LIMITS : Time shall in all respects be of the essence hereof provided that the time for doing or completing of any matter provided for herein may be extended or abridged by an agreement in writing signed by the Seller and Buyer or by their respective lawyers who may be specifically authorized in that regard.
[15] Since the same lawyer could not act for both Larry and Jordan, and time was of the essence, Larry had to find another lawyer. In their correspondence, Larry assured Jordan that he would. Larry did not provide the name or contact information for a lawyer until June 1, 2021. Within 24 hours of receiving the name of that lawyer, Dinesh Gupta (“Gupta”), the Coffeys had the deposit funds wired to her. Gupta received the deposit the next day.
[16] More than five months later, on November 17, 2021 Fryday received a letter from the Highs’ litigation counsel (not Gupta) that the Highs were relying on alleged technical breaches of the APS and took the position that it was of no force and effect or null and void. On December 2, 2021, Gupta returned the deposit to Fryday’s office.
[17] In anticipation of the breach of the APS, the Coffeys commenced this action on December 14, 2021, seeking specific performance.
[18] On July 4, 2022, Larry unfortunately passed away. His estate is represented by Sheryl in this litigation. Other than his texts and emails, no evidence is available from him.
Applicable Legal Principles:
[19] Pursuant to r. 20.04(2) (a) of the Rules, the court must grant a motion for summary judgment if it is satisfied that there is no genuine issue requiring a trial with respect to a claim or a defence. There is no genuine issue requiring a trial when the judge hearing a motion for summary judgment can reach a fair and just determination of the merits of the claim or defence on the evidence submitted by the parties: Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at para. 57.
[20] A trial is not required if the evidence presented on a summary judgment motion allows the judge to make the necessary findings of fact, apply the law to those facts, and is a proportionate, more expeditious and less expensive means to achieve a just result than going to trial: Hryniak, at para. 49.
[21] In determining whether there is a genuine issue requiring a trial, the court must first consider the evidence submitted by the parties. If there appears to be a genuine issue requiring a trial, the motion judge should then determine if the need for a trial can be avoided using the powers granted to a summary judgment judge under rr. 20.04(2.1) and (2.2): Hryniak, at para. 66; Royal Bank of Canada v. 1643937 Ontario Inc., 2021 ONCA 98, 154 O.R. (3d) 561, at para. 27. The overarching consideration is whether summary judgment provides a fair and just adjudication: Hryniak, at para. 50.
[22] Under r. 20.04(2.1) the additional fact-finding powers include weighing the evidence, evaluating the credibility of the deponents, and drawing any reasonable inferences from the evidence.
[23] Under r. 20.04(2.2), the court may order that oral evidence be presented by one or more parties, with or without time limits on the presentation. This power should only be employed when it allows the judge to reach a fair and just adjudication on the merits and is proportionate having regard to the action: Hryniak, at paras. 61-65.
Analysis:
[24] On the record before me, I am satisfied that there is no genuine issue for trial. Using the additional fact-finding powers under r. 20.04(2.1), I can make the necessary findings of fact and apply the relevant legal principles to resolve the issues raised.
[25] It is not contrary to the interests of justice to use those powers in this case, since I am satisfied that they will lead to a fair and just result and will serve the goals of timeliness, affordability, and proportionality considering the litigation. I conclude that a trial is not required.
Issue One: Was the APS Valid?
[26] The defendants argue that the APS was not valid because:
a. Jordan initialled the change to the price after it had been changed by Allison and initialled by the Highs and Allison. Since Jordan did not sign the handwritten amendment before Larry and Sheryl did, the APS was invalid. Sheryl claimed that the APS was backdated and signed by Jordan some time in June.
b. The APS was on an OREA standard form. OREA requires that users of these forms be licensed by it to use the forms. Allison did not have such a license, and therefore her handwritten amendments to the form rendered the APS null and void.
c. The deposit was not paid within 24 hours of acceptance of the offer.
[27] In my view, these arguments must fail.
(a) The Signing of the APS:
[28] The Highs argue that if the handwritten amendment was made after Jordan had affixed his electronic signature to the APS, and it was then signed by Larry and Sheryl, there was no valid offer to purchase. Given that Jordan did not sign the amended APS, the APS is unenforceable as it does not comply with the Statute of Frauds.
[29] I do not accept this argument.
[30] For a valid contract to exist there must be offer and acceptance and the acceptance must be communicated to the offering party: Covenoho v. HomeLife Response Realty Inc., 2022 ONSC 5877, 2022 ONCS 5877 (Div. Ct.), citing The Law of Contracts (Sixth Edition) S.M. Waddams. In real estate law, there are essential terms that must be present for the contract to be valid. These essential terms are the identification of the parties, the property, and the price: McKenzie v. Walsh, 61 S.C.R. 312.
[31] In contracts relating to the sale of land, s.4 of the Statute of Frauds R.S.O. 1990, c. s.19 requires that an agreement for the sale of lands (or some note or memorandum thereof) be in writing and signed by the party to be charged, not withstanding the doctrine of part performance. See, for example: Erie Sand and Gravel Limited v. Tri-B Acres Inc, 2009 ONCA 709, at para. 48.
[32] There also must be a meeting of the minds, or consensus ad idem, as to these essential terms. See: UBS Securities Canada, Inc. v. Sands Brothers Canada, Ltd., 2009 ONCA 328, at para. 47:
[47] […] For a contract to exist, there must be a meeting of minds, commonly referred to as consensus ad idem. The test as to whether there has been a meeting of the minds is an objective one - would an objective, reasonable bystander conclude that, in all the circumstances, the parties intended to contract? As intention alone is insufficient to create an enforceable agreement, it is necessary that the essential terms of the agreement are also sufficiently certain.
[33] On Allison’s and Jordan’s version of events, Fryday prepared the APS or offer. When he prepared it, the purchase price typed into the APS or offer was $450,000. Before Allison went over to the Coffeys’ cottage with the printed document, Larry communicated to Jordan that the purchase price he would accept was $475,000. Allison then crossed out the purchase price of $450,000 in the typed APS, wrote in by hand a new purchase price of $475,000, and initialled the change. Jordan initialled the change electronically. She then went over to the Highs with the printed document offer, signed and initialed by her and Jordan for $475,000. Larry and Sheryl then signed and initialled the document, thereby accepting the offer.
[34] Sheryl’s evidence was that when Allison came over to their cottage with the printed APS in hand, the purchase price in document was $450,000. After some discussion at their cottage, the purchase price was amended to $475,000: Allison crossed out the typed text and wrote by hand an amended purchase price of $475,000. Larry and Sheryl initialled the change, Allison initialled the change. Jordan was not there. Sheryl claimed that Jordan backdated his signature sometime later, in mid-June. However, at her cross-examination for discovery she admitted that it was possible that his electronic initials or signature were on the APS when she and Larry signed it. She acknowledged she might have missed it because it was very faint.
[35] In my view, applying the rules of offer and acceptance, even on Sheryl’s version, the APS is valid. On her version, the Coffeys made the offer to purchase the property at $450,000. The Highs implicitly did not accept it but countered it with their offer to sell the property for $475,000 – they initialled the amendment. That amended offer was accepted by Allison and later Jordan, who initialled the document after the amendment was made. Even on this version, the APS is valid. It is of no consequence that Jordan did not sign the amendment before the Highs did.
[36] However, I do not accept Sheryl’s claim that Jordan signed and backdated the APS sometime in June. This is impossible. He emailed a copy of the executed APS to both Larry and Fryday that evening, May 25, 2021, at 8:34 pm. I have examined a copy of the document he emailed. Jordan’s electronic signature is indeed very faint, but it is there. Neither Fryday nor Gupta, who each had a professional obligation to examine the document when they received it, have put forward any evidence that the document was not properly executed when they received it.
[37] Sheryl’s version that Jordan initialled the change before the Highs and never after also makes no sense because on that version, there was no reason for Jordan’s initial to be beside the price change at all. He would not have had to initial in that spot on the APS before the change was made. He had to initial the change after it was made. Whether it was before the Highs initialled it or after makes no difference. He initialled it, thus either making an offer at a new price or accepting it at that price.
[38] Even on Sheryl’s evidence, I am satisfied that the APS was valid. Once the change was initialled by all the parties, it was accepted and there was a valid agreement in respect of the purchase and sale of the cottage. Using the powers under r.20.04(2.2), I find that the signing of the APS must have taken place on May 25, 2021.
(b) Amendments to the OREA Form:
[39] The Highs argue that the handwritten amendment to the APS by Allison constitutes a violation of the OREA’s Terms of Use. Because Allison was not authorized to “amend” the OREA form, the APS was void.
[40] I reject this argument. Whether or not she was licensed to use a pre-printed form has no impact on the validity of the contract, especially once that amendment was accepted by all parties.
[41] Nothing in the licensing provisions put out to its members by the OREA suggests that the unlicensed use of its forms invalidates the agreement entered into by parties on that form. Rather, the rules around the use of the forms imposed by OREA seem intended to limit OREA’s liability for any unlicensed use.
[42] The APS was drafted by Fryday, who was licensed to use the form. Allison simply amended the purchase price. I also note that the date was written in by hand. These minor revisions by an unlicensed user of the form did not nullify the APS. Nor did they expose OREA to any liability.
(c) The Deposit:
[43] I reject the argument that the Highs were entitled to treat the APS as discharged in November 2021, when deposit was not received within the 24 hours stipulated in the APS in May 2021.
[44] Taking the Highs’ case at its highest, they were entitled to treat the APS as if at an end when they did not receive the deposit within the 24 hours agreed to. Repudiation of a contract occurs when one party shows an intention not to be bound by the contract. Repudiation can occur by words or conduct and can be demonstrated by a refusal to perform: Guarantee Co. of North America v. Gordon Capital Corp., [1999] 3 S.C.R. 423, at para. 40.
[45] The effect of a repudiation depends on the election by the non-repudiating party. If that party treats the contract as still being in full force and effect, the contract remains in force and effect for both sides. If the non-repudiating party accepts the repudiation, the contract is terminated, and the parties are discharged from future obligation. When a repudiatory breach occurs, the innocent party has the right to elect to terminate the agreement: Nicolaou v. Sobhani, 2017 ONSC 7602, 90 R.P.R. (5th) 97, at paras. 40-41; Norwood Construction Ltd. v. Post 83 Co-operative Housing Assn. (1988), 30 C.L.R. 231 (B.C.C.A.), at para. 19.
[46] The failure to pay the deposit within the time specified in this case was a fundamental breach: 1473587 Ontario Inc. v. Jackson, [2005], 74 O.R. (3d) 539, aff’d , 75 O.R. (3d) 484 (C.A.), at para. 23. When it occurred, the Highs were entitled to accept the repudiation and terminate the APS. If they had done so, they would have been discharged from performing the contract: 6844987 Canada Inc. v. The United People of Canada/Les Peuple Unis du Canada, 2022 ONSC 5436, at para. 53. But they did not.
[47] Larry did not treat the contract as at an end. Rather, he retained Gupta and provided Jordan with the contact information for the deposit to be sent. He must have given Gupta instructions to receive the deposit (otherwise Gupta would not have provided Fryday with the account information for wiring the funds and would not have received the deposit). Gupta then accepted the deposit and held it for 5 months. In my view, by accepting the deposit, and continuing to perform under the contract, the Highs treated the contract as being in full force and effect despite the breach.
[48] This case is distinguishable from 1473587 Ontario Inc. In that case, the vendors did not accept the breach, waive it or otherwise continue to perform under the contract. The deposit in that case was late through inadvertence of the buyer, whereas in this case the fault lay with the seller. The parties in that case were commercial entities, whom the court held to a higher standard in terms of the precision of the words they must use. Most importantly, the overdue deposit in that case was returned the very same day it was received, not held for months. As a result, the court held in that case that the seller was entitled to treat the failure to deliver the deposit on time as a breach of the contract that discharged the agreement and ended any and all obligations they had under it: para. 24
[49] I agree with Ms. Masters’ submission for the Respondents that the extension of time for the deposit should have been done in writing, but this is also a term that can be waived. I find that it was waived. The Highs accepted the deposit even though it was late, and even though no extension had been agreed to in writing.
[50] The terms of the agreement were clear: the deposit had to be received within 24 hours by the vendors’ lawyer. This could not happen because Larry did not provide the name of his lawyer. He did not provide that contact for a week. His text messages establish that he was in no hurry to provide his lawyer’s name, he knew he had to, was sorry it was taking so long (he was at the cottage). In all the circumstances, he was not concerned about receiving the deposit within the 24 hours, it being late or extending the time to receive it in writing.
[51] The breach occurred due to Larry’s failure to provide his lawyer’s information. Jordan followed up with Larry at least twice, first thing the morning after the APS was executed, and then again on May 28, 2021. Larry did not provide his lawyer’s information until June 1, 2021 despite having retained Gupta in mid-May.
[52] It is a well-established principle of contract law that a party cannot use its own breach or default in satisfying a condition precedent as a basis for being relieved of its contractual obligations. A party in breach of its obligation to do what is required to complete a transaction cannot terminate the agreement by relying on a time of the essence clause: Southcott Estates Inc., v. Toronto Catholic District School Board, 2010 ONCA 310, at para. 13; 801 Assets Inc. v 605446 Ontario Limited, 2016 ONSC 2772 at para. 64.
[53] In my view, the Highs are now trying to “play fast and loose”, using their position unfairly in relying on a purported breach of a ‘time is of the essence clause’ five months after the purported breach: 1473587 Ontario Inc., at para. 21. Having accepted the deposit, and acting as if the contract was still in full force and effect at the time of the breach, they were not entitled to treat the contact as at an end five months later.
[54] The Highs also argue that they did not have independent legal advice at the time, and therefore should not be held to account for their actions once the deposit was not received. I do not accept this argument.
[55] Gupta was retained by the Highs before they entered into the agreement to sell their cottage. The Highs were also selling an investment property they owned in Cambridge. They had retained Gupta, a real estate solicitor, in mid-May (before entering the APS with the Coffeys) to act for them. They had also worked with a realtor in respect of that listing. If they had any genuine concerns about the deposit not being received, or any of their rights or remedies, they could have asked Gupta for advice.
[56] The correspondence in evidence before me establishes that on June 1, 2021 Larry texted Jordan that Gupta would be acting for them on the sale of the cottage. On the same day, Fryday requested from Gupta the account details to which the deposit was to be wired. Gupta provided the information. The deposit was wired on June 2, 2021, within 24 hours of Jordan receiving the name of the Highs’ lawyer. On June 3, 2021 the deposit was received or accepted by Gupta.
[57] Sheryl claimed on this motion that the deposit was received and accepted by Gupta “under protest”. The evidence does not support her claim. Well after 24 hours had passed for the receipt of the deposit, Larry texted Jordan indicating that he was content to proceed with the sale. A week after the agreement was signed, he texted Jordan the name of his lawyer so that the deposit could be paid to him. To receive the deposit, Gupta must have had instructions from Larry: I can only infer that his instructions were to go ahead with the transaction - she was retained for this purpose. She accepted the deposit. There is nothing in the record to suggest that the deposit was received or accepted “under protest”.
[58] In my view, the argument that the delay in receiving the deposit invalidated the APS must fail.
Issue Two: Was the APS Unconscionable?
[59] Unconscionability is an equitable doctrine used to set aside unfair agreements that result from an inequality of bargaining power: Uber Technologies Inc. v. Heller, 2020 SCC 16, [2020] 2 S.C.R. 118, at para. 54. Unconscionability requires two elements: an inequality of bargaining power and a resulting improvident bargain: Uber, at paras. 64-65.
(i) Inequality of Bargaining Power:
[60] In respect of inequality of bargaining power, the defendants argue that the Highs were not as sophisticated as the Coffeys in respect of private real estate transactions and that Larry was “vulnerable” because of his ill health.
[61] I do not accept these arguments.
[62] Inequality of bargaining power exists when one party cannot adequately protect their interests in the contracting process. This may be because of cognitive, deliberative, or informational capabilities that preclude a worthwhile judgment as to what is in the claimant’s best interest. These disadvantages need not be so serious as to negate capacity to enter a valid contract but could result where only one person could understand and appreciate the full impact of the contractual terms: Uber, at paras. 66-72
[63] On the evidence before me, there is no genuine issue for trial in this respect. There is no issue in respect of Larry’s capacity to enter a valid contact. Indeed, there is no issue that he understood that by entering the APS he was agreeing to sell the cottage to the Coffeys for $475,000. He was neither impaired nor exploited.
[64] I reject the argument that the Coffeys were far more sophisticated than the Highs in the area of private real estate transactions. To the contrary, on this evidence I find that the Coffeys and the Highs had relatively similar experiences in the real estate market. Whether they were engaged in “private” transactions or had access to the “MLS” through a realtor is irrelevant.
[65] In terms of real estate experience, the evidence established that after entering into this APS, the Coffeys sold their primary residence in Kitchener. In February 2022, they sold vacant land where they had intended to build a house. Jordan gave evidence that he was comfortable engaging in real estate transactions without engaging a realtor.
[66] When the Highs entered the APS, they owned three properties: their primary residence, the cottage and a rental property. Although they had not purchased any property since 1993, they had managed their rental property for 30 years. Shortly before entering the APS respecting their cottage, they had also listed their rental property for sale. To that end, they had engaged a realtor and retained Gupta as their real estate lawyer. They knew the process of buying and selling real estate. They had ample opportunity to contact a realtor or a lawyer in respect of the sale of the cottage but chose not to.
[67] It is not disputed that Larry was suffering from several health conditions including congestive heart failure, kidney disease, hypertension, and diabetes. Larry’s complete medical records were produced on this motion. Nowhere in those records is there any indication that Larry lacked capacity or that his ability to comprehend or negotiate an agreement was affected. Just because someone is physically ill or in their sixties (as argued by the Highs) does not render their decisions invalid.
[68] To the contrary: the Highs sold another property at roughly the same time. It is significant that the sale of their rental property closed on September 9, 2021. No issues were raised in respect of that sale to cast any doubt on Larry’s ability to enter into a valid contract.
[69] Sheryl claimed that she too was vulnerable. She did not know about the sale of the cottage until two days before the APS was signed. At the same time, she acknowledged in her evidence in cross-examination on discovery that she could have told Larry or Allison that she did not want to sign the agreement, but she did not. She did not want to “put egg on Larry’s face”. After she signed it, she thought it was done. No one prevented her from calling a lawyer or a realtor to review whether the offer was fair: she testified that she did not think she needed to do that.
[70] On the evidence before me, there is no genuine issue in respect of inequality of bargaining power. This is not a case “where the law’s normal assumptions about free bargaining either no longer hold substantially true or are incapable of being fairly applied”: Uber, at para. 72. The Highs were not vulnerable, and there was no inequality of bargaining power during the negotiations and contracting of the APS. If anyone had the upper hand, it was the Highs: they had a product very much in demand that the Coffeys wanted.
(ii) Improvident Sale
[71] The Highs also allege that sale was improvident. They claim that the offer was below the fair market value for the cottage.
[72] Parties are free to make a bad bargain: Black v. Wilcox, 12 O.R. (2d) 759 (C.A.). Not every bad deal is an improvident one. An improvident bargain is one that unduly advantages the stronger party or unduly disadvantages the more vulnerable party at the time the contract is formed: Uber, at paras. 73-79. Not every bargain at below fair market value is improvident. In essence, the question in deciding whether the bargain was improvident is whether the potential for undue advantage or disadvantage created by the inequality in bargaining power has been realized: Uber, at para. 75
[73] Here, even if there had been some inequality in the parties’ bargaining power, I do not accept that this was an improvident sale.
[74] In 2023, the Highs obtained a retroactive appraisal of the cottage for the purpose of this litigation. That appraisal says that the cottage was worth $650,000 in May of 2021. Based on this appraisal, the Highs argue that the cottage was sold for $175,000 less than the fair market value. I disagree.
[75] I do not place a lot of weight on that appraisal.
[76] The value of real estate is largely subjective. The market value of a property is established by how much someone is prepared to pay for it and how much someone is prepared to sell for it. In other words, the market value of a property is best established by its sold price: Viva v. Ontario Property Assessment Corp., Region No. 10, [2001] O.J. No. 273 (Div. Ct.) at paras. 10, 17. This may be especially true of cottage properties, which are often unique and have a host of unquantifiable factors that motivate prospective buyers and sellers.
[77] An appraisal is an opinion as to what a particular property may sell for. It is based on factors including sales of comparable properties in the area, but is limited by any number of assumptions and conditions as set out in the appraisal. Whether to accept the opinion, and how much weight to put on it is up to the trier of fact. Just because there is no other appraisal does not mean I must accept the value ascribed on this property in the appraisal.
[78] The appraisal in this case used comparables that are strikingly different from the Highs’ cottage. While many of the listed comparables sold for considerably more money, they also had important differences. For example, several of the comparable properties had multiple storeys, waterfront property (not separated from the building by an access road), and/or looked much larger and recently updated. These differences are significant, and likely drove up the median price in kind. Those properties do not compare to the Highs’ cottage, described, and documented in detail in the appraisal. By including those million-dollar cottages in the appraisal, the median price was driven up significantly. I am therefore not prepared to rely on or put much weight on the appraisal in assessing whether the purchase price arrived at by Larry and Jordan was improvident.
[79] It is clear from the text messages that Larry knew that his cottage could be worth more than $475,000 on May 25, 2021. He chose to enter the APS anyway. It is not disputed that he initially wanted to sell the cottage for $525,000. He knew he could negotiate the price (which he did, from $450,000 to $475,000).
[80] This was a private sale: in negotiating a price, the parties considered that no realtor commission would be payable. On a sale price of $525,000 the standard 5% commission plus HST would have been in the range of $29,662.50: BDO Canada v. Carrigan-Warner, 2022 NSSC 16, at paras. 45-47. Taking this factor into account, the difference between the agreed upon price and Larry’s starting price was about $20,000: it is not the mark of improvident deal.
[81] Before he accepted the deposit, Larry was aware that the cottage could be worth even more. He texted Jordan that he had been told that the cottage might be worth as much as $550,000 by a realtor from Toronto. He accepted the deposit and continuing to treat the APS as if in full force and effect regardless.
[82] There are many factors that go into why someone would accept a certain price for their property. The text messages make clear that some of these factors were motivating Larry. Perhaps it was because the closing would be extended to January 2022 and allow Larry to use the cottage that summer and fall. Perhaps it was because he liked Jordan. Perhaps it was because he valued selling the cottage to a neighbour, rather than a newcomer to the lake or a stranger. Price was not the only factor that went into Larry’s decision to sell the cottage to the Coffeys. Hence, whether the deal was improvident cannot be decided relying on price alone.
[83] The onus is on the Highs to prove on a balance of probabilities that the sale was improvident. They have not discharged that onus.
[84] On the evidence before me, I am satisfied that the APS was not unconscionable. There was no inequality of bargaining power between the parties and the deal they reached was not improvident.
Issue Three: Is Specific Performance Warranted?
[85] Specific performance may be granted where the court is satisfied on a balance of probabilities that the purchaser was ready, able and willing to close the transaction on the contracted agreed closing date, and damages would not be an adequate remedy. The court must also be satisfied that the property is unique to the extent that a substitute is not readily available: Semelhago v. Paramadevan, [1996] 2 S.C.R. 45, at paras. 11 and 22; Matthew Brady Self Storage Corp. v. InStorage Limited Partnership, 2014 ONCA 858, at para. 40.
[86] At the same time, not every piece of real property is unique, and specific performance should not be granted as a matter of course: Erie Sand and Gravel Limited v. Tri-B Acres Inc., 2009 ONCA 709, at paras. 112-113
[87] The Highs argue that their cottage does not have a “particular quality” aside from its location on Williams Lake. They argue that it is not unique to meet the Coffeys needs since they already own a cottage on the lake and tried to buy two others. Hence, any cottage will do for them.
[88] I do not agree.
[89] It is not disputed that the Highs’ cottage is uniquely situated on a peninsula reaching onto the lake. It has waterfront on two sides of the property, rather than the usual frontage on one side. There are only nine other cottages on that peninsula. It neighbours the Coffeys’ cottage. It is not disputed that cottages on this peninsula rarely come up for sale. The Coffeys had been trying to buy a second cottage for some time. They entered the APS to buy this cottage to accommodate their friends and family on the lake.
[90] The Coffeys need not demonstrate the property is unique in the strict dictionary sense that it is entirely different from any other property. It is enough to show that the premises have a quality that makes them especially suitable for their proposed use and that it cannot be reasonably duplicated elsewhere: 1252668 Ontario Inc. v. Wyndham Street Investments Inc., [1999] O.J. No. 3188, at para. 23. I am satisfied that this standard has been met in this case.
[91] I am also satisfied that damages will not afford the Coffeys adequate or complete remedy, nor will a monetary award be sufficient to purchase substitute performance. The Coffeys are entitled to specific performance of the APS.
[92] An Order shall issue for specific performance of the Agreement of Purchase and Sale date May 25, 2021.
Conclusion:
[93] I am satisfied that there is no genuine issue for trial in this case. The APS is valid. It is not unconscionable. Specific performance is warranted. Summary judgment is granted.
Costs:
[94] The parties are encouraged to agree upon appropriate costs for this summary judgment motion/action. If the parties are not able to agree on costs, each may make brief written submissions to me (maximum two pages double-spaced, plus a bill of costs) by 4:30 pm on February 15, 2024.
[95] If no submissions are received within this timeframe, and no extension is sought, the parties will be deemed to have settled the issue of costs as between themselves.
[96] If I receive submissions from one party, but not the other, by 4:30 pm on February 15, 2024, I will infer that the party does not wish to make submissions and I will decide on the basis of the material that I have.
Chozik J. Released: January 25, 2024