SUPERIOR COURT OF JUSTICE - ONTARIO
RE: Mattamy (Jock River) Limited, Plaintiff
AND:
Olusola Akinbola Glover, Defendant
BEFORE: Somji J.
COUNSEL: Philip Byun and Charlene Kavanagh, for the Plaintiff
Defendant, Self-Represented
HEARD: June 11 and July 25, 2024
decision re default on purchase and sale agreement
Overview
1The Applicant Mattamy is a property developer. Mattamy seeks a default judgment against the Respondent Mr. Glover for breach of contract following his failure to close on the purchase of a Mattamy home.
2On June 11, 2024, Mattamy appeared before me with a request for a default judgment. Mr. Glover made submissions that he is struggling with employment and does not have the means to pay for counsel or the damages requested. In addition, Mr. Glover indicated he came to Canada from Nigeria as a refugee and is currently facing a removal order. He has two children. He indicated it was unclear what effect a default judgment would have on his immigration status.
3Following the submissions of the parties, I adjourned the matter to allow Mr. Glover an additional opportunity to speak with counsel and return before me on July 25, 2024. If unable to obtain counsel, I indicated to Mr. Glover that he should attend the hearing and be prepared to represent himself and address the following questions:
a. Whether Mr. Glover seeks to set aside the default notice?
b. If successful, whether Mr. Glover wishes to file a defence including an affidavit with respect to his personal circumstances and the circumstances surrounding the purchase and sale agreement?
c. Whether the damages in this case were objectively foreseeable? and
d. Whether Mattamy has taken sufficient steps to mitigate the damages?
4On July 25, 2024, Mattamy provided a memorandum of law along with a supplementary motion record addressing the questions raised. Mattamy also addressed the communications with Mr. Glover and attempts to resolve the matter. While Mattamy remains sympathetic to Mr. Glover’s personal circumstances, they maintain their request for damages and costs.
5Mr. Glover appeared without counsel. He has not taken any steps to set aside the default notice. He did not file any affidavit evidence with respect to his personal financial situation or the circumstances surrounding the purchase and sale of the Mattamy home.
6The facts in the Statement of Claim are deemed admitted. Based on the evidentiary record before me, I find for the reasons below that Mattamy is entitled to default judgment.
Background and Facts
7Mr. Glover entered in to an Agreement of Purchase and Sale (“APS”) with Mattamy on September 22, 2022, for a property at 670 Quilter Row, Ottawa Ontario. The property purchase price was $634,990. Mr. Glover deposited $10,000 toward the purchase.
8Mr. Glover failed to close the transaction even after the closing period was extended from October 18, 2023, to December 4, 2023, thereby breaching the terms of the APS.
9After the transaction failed to close, Mattamy made reasonable and timely efforts to resell the property to mitigate damages: Madison Homes Cornell Rouge Ltd. v Ng, 2021 ONSC 3104 para 18. As per the affidavits of Michael Winiarz, these efforts included reviewing sales for comparable properties in the same and similar developments, reviewing current pricing in accordance with market conditions as of late 2023, and working with Mattamy’s Ottawa network of real estate brokers and agents to resell the property. Mr. Glover has not presented any evidence to suggest that the steps described were insufficient.
10While Mattamy was able to resell the property by January 8, 2024, it was at a lower price of $579,230. Consequently, Mattamy suffered damages totalling $78,343.09 after applying Mr. Glover’s $10,000 deposit. These damages consisted of the differential in the contract price and resale place, extra real estate commissions, and legal fees. I have reviewed the evidence of Mattamy’s damages and am satisfied they have been adequately proven.
Analysis
11The APS did not specify the types of damages for which Mr. Glover could be liable for upon failure to close the transaction, but did indicate that in addition to Mr. Glover foregoing his deposit, Mattamy retained the right to bring an action for breach the contract. Paragraph 61 of the APS states as follows:
- (a) In the event of failure by the Purchaser to make any monetary payment called for under this Agreement or in case of any other default or breach of this Agreement by the Purchaser, the Deposit and any other amounts paid by the Purchaser (whether directly to the Vendor or held in trust) shall be forfeited to the Vendor, irrespective of and without prejudice to any other right, cause of action or remedy to which the Vendor may be entitled. The Purchaser acknowledges that the Vendor shall have the right to terminate this Agreement in the event of any default or breach of this Agreement by the Purchaser, whether or not such default or breach constitutes a fundamental breach of this Agreement. [Emphasis mine]
12As a general rule, damages for breach of contract should place the plaintiff in the monetary position they would have been had the defendant not breached the agreement of purchase and sale: 400 East Mall GP Inc. v Omololu, 2024 ONSC 703 at para. 11. In such cases, courts must determine what damages would have been reasonably contemplated by the parties for breach at the time the parties entered the contract. As explained by Sanfillipo J in Bang v Sebastian, 2018 ONSC 6226, leave to appeal dismissed 2019 ONCA 501, at paras 39 and 40:
39Having found that the purchaser defendant is liable to the plaintiffs in breach of contract, the task then is to determine the damages to which the plaintiffs are entitled. Damages for breach of contract should place the plaintiffs in the monetary position that the plaintiffs would have been in had the purchaser defendant not breached the Agreement of Purchase and Sale.
40The principles applicable to the determination of damages arising out of a failed real estate transaction were stated by the Ontario Court of Appeal in 100 Main Street East Ltd. v. W.B. Sullivan Construction Ltd. (1978), 1978 CanLII 1630 (ON CA), 20 O.R. (2d) 401 (C.A.), at pp. 414-415: “The most general principle relating to the assessment of the damages is that the plaintiff is entitled to be put in the position it would have been in if the contract had been performed, so far as money can do it.” Also, Fidler v. Sun Life Assurance Co. of Canada, 2006 SCC 30, [2006] 2 S.C.R. 3 at para. 29, applying Hadley v. Baxendale, (1854), 9 Ex. 341, 156 E.R. 145, at p. 151: “[the plaintiffs are entitled to receive damages] such as may fairly and reasonably be considered either arising naturally … from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the they made the contract, as the probable result of the breach of it.” [Emphasis mine]
13Costs relating to the resale of the property calculated as the purchase prince in the original transaction minus the purchase price from the resale transaction are considered reasonable foreseeable damages: 400 East Mall at para 12.
14Realtor fees on the resale have also been found to be reasonably contemplated and payable damages: Lecco Ridge Developments Inc. v Vaquero, 2022 ONSC 6547 at paras 86-90.
15In Bang v Sebastian, the court found that the carrying costs, legal fees thrown away, financing costs, and costs related to resale were found to be reasonably foreseeable and the defendants liable for same: at paras 48, 52, 53, 57, 58, 59, and 61; see also Paradise Homes North West Inc. v Sidhu, 2019 ONSC 1600 at paras 8, 26-28.
16In Degner v Cabral, the court found other consequential damages such as utility costs, property insurance premiums, property taxes, property cleaning and staging costs, and real estate commissions were appropriate and foreseeable damages payable by the defendant: 2019 ONSC 1610 at para 69.
17In this case, I am satisfied that the damages claimed by Mattamy are within the category of damages for breach of contract that would have been reasonably contemplated by the parties as a consequence of Mr. Glover defaulting on the transaction.
18Moreover, Mr. Glover has not presented any evidence to suggest that he did not understand or was unaware at the time of entering the APS of the possibility that an action for damages could be brought against him or that he would be liable for the category of damages claimed.
19It is unclear if Mr. Glover was required to get approval for financing prior to entering the APS, particularly given his refugee status and the half-million price tag for the home. However, Mr. Glover was represented by a real estate agent at the time of the sale and did have an opportunity to obtain legal advice prior to the purchase. Paragraph 54 of the APS states that Mr. Glover, as the purchaser, “acknowledges and represents that the Purchaser has been afforded a reasonable opportunity to seek independent legal advice as to this Agreement and all provisions hereof…”.
Default Judgment
20Mr. Glover was put on notice for defaulting on the APS. Efforts to resolve the matter both prior to and after this action was filed were unsuccessful. Consequently, Mattamy served a Statement of Claim on February 29, 2024. Mr. Glover failed to file a Statement of Defence in the requisite period following which a default requisition was issued on April 19, 2024.
21Mattamy notified Mr. Glover that it would be bringing a motion for default judgment and provided Mr. Glover all materials in support of the motion. Following the first hearing of June 11, 2024, Mr. Glover was provided a further adjournment to contact counsel and file any evidence any evidence in support of his position. He has not done so.
22I am satisfied that Mattamy is entitled to default judgment and the damages claimed.
Costs
23Mattamy seeks partial indemnity costs of $9,328.80. Costs are in the discretion of the court. The matter required two appearances. Counsel’s rates are reasonable. Lead counsel delegated work to a junior counsel where appropriate to keep costs low. I find the billings are commensurate with the work performed, the complexity of the matter, and the legal issues raised. Considering all the relevant factors including the Plaintiff’s success, the complexity of the matter, the time and rates charged to prepare for the motion, I find that an award of costs in the fixed amount of $ $9,328.80 is fair and reasonable in the circumstances.
Order
Order
24There will be an Order that:
a. Mr. Glover pay damages to Mattamy in the amount of $78,343.09, plus judgment interest; and
b. Mr. Glover pay partial indemnity costs to Mattamy in the fixed amount of $9,328.80.
Somji J.
Date: August 8, 2024
COURT FILE NO.: CV-24-94777
DATE: 2024/08/08
ONTARIO
SUPERIOR COURT OF JUSTICE
RE: Mattamy (Jock River) Limited, Plaintiff
AND:
Olusola Akinbola Glover, Defendant
BEFORE: Somji J.
COUNSEL: Philip Byun and Charlene Kavanagh, for the Plaintiff
Defendant, Self-Represented
decision re default on purchase and sale agreement
Somji J.
Released: August 8, 2024