Ontario Superior Court of Justice

Court File No.: CV-19-00624256
Date: 2025-03-04

Between:
Anthony Gyimah o/a Entry Point Investment Group, Plaintiff
and
The Roman Catholic Episcopal Corporation of the Diocese of Hearst in Ontario, Royal LePage Trident Real Estate (Kap) Brokerage, and Andre Lehoux, Defendants

Appearances:
Mark Addo, for the Plaintiff
James McReynolds, for the Church
Myle Nguyen, for Mr. Lehoux

Heard: March 6 & 7, 2025

Reasons for Judgement
Panagiota (Toula) Papageorgiou

Overview

[1] This case should never have happened. It is a shame that there was no early case conference where a judge could have sought to resolve this matter, because it was eminently resolvable. Instead, the parties have had almost five years of litigation which was bad for all of them.

[2] The parties in this proceeding each blame each other for the failure of a real estate transaction to close.

[3] On May 28, 2019, the plaintiff, Mr. Anthony Gyimah, entered into an agreement of purchase and sale (the “APS”) to purchase property owned by the defendant, the Roman Catholic Episcopal Corporation of the Diocese of Hearst in Ontario (the “Church”), located at 2323 Genier Road, Cochrane (the “Property”). The purchase price was $65,000. The closing date was June 28, 2019. The plaintiff had purchased it without seeing it first and the APS said he was purchasing it on an “as is” basis.

[4] The plaintiff lives in Toronto. The plaintiff had his own real estate agent, Alena Sarjoo of Sutton West Realty Inc., and his own counsel, Mr. H. Tyler DeClute, who were situated in Toronto.

[5] The Church’s real estate agent was Royal LePage Trident Real Estate (Kap) Brokerage. It received and held the plaintiff’s $9,000 deposit.

[6] The Church’s lawyer was the defendant, Andre Lehoux, and he lived in Hearst which is approximately 2.5 hours from the Property.

[7] On the day of closing, the plaintiff, through his lawyer, exchanged all closing documents with the Church’s lawyer, Mr. Lehoux, including the closing funds in the amount of $58,600.22.

[8] An issue arose as to whether the keys had to be delivered to the plaintiff in Toronto. On the day of closing, the Church had delivered the keys to a convenience store for the plaintiff to pick up in Cochrane, but the plaintiff insisted that the keys had to be delivered to his lawyer in Toronto or to his real estate agent.

[9] The plaintiff’s lawyer refused to register the transfer. The Church tried to accommodate the plaintiff’s request regarding the keys by offering to send them overnight via bus on June 28, 2019 and even sent them by Purolator two days later such that they arrived on July 3, 2019. But the plaintiff would not accept them.

[10] In the proceeding, the plaintiff sued claiming rescission, and also for damages in the amount of $58,600.22 which was the balance he paid on closing, recovery of the $9,000 deposit, plus reimbursement of $2,878.13 in legal fees paid to his lawyer.

[11] The Church counterclaimed for specific performance, or in the alternative, damages.

[12] The Church no longer claims specific performance as it ultimately relisted the Property for sale on April 16, 2020, for $100,000. It subsequently sold the Property for $80,000. The Church’s position is that even though it was able to sell the Property for $15,000 more than the sale price to the plaintiff, it has incurred various charges while it carried the Property from the time of the scheduled closing to the resale to the new purchaser.

[13] After this sale, it wrote to the plaintiff on July 8, 2020, and made a without prejudice offer to return the $57,600.22 that it held in trust, which it said represented his deposit and closing funds less the shortfall occasioned by his failure to close, following which the action would be dismissed. The plaintiff would not accept the offer. The plaintiff objected to the defendant referencing this, but the Church has indicated that it was prepared to waive privilege on this offer that it made, and the plaintiff provided no authority for the proposition that this was improper.

[14] Inexplicably, even though the Church resold the Property very shortly after the APS failed to close, it still held onto approximately $58,000 of the plaintiff’s money. It says it has held these in trust and invested them in a series of CIBC term deposits within the trust account. The amount in the account is currently $60,361.84.

[15] This matter proceeded to a two-day summary trial. There were only three witnesses: the plaintiff, Mr. Gyimah; Mr. Lehoux, the Church’s lawyer; and Ms. Sylvie, the Church’s Bursar and Secretary.

[16] I note that at the conclusion of the evidence, and just prior to the defendants’ read-ins, the plaintiff’s counsel advised that he had been instructed by the plaintiff to seek an adjournment and leave to amend the Statement of Claim to seek additional damages in the amount of $481,000 in respect of the replacement value of the Property, special damages in the amount of $73,000, and punitive damages in the amount of $25,000.

[17] He argued that his client was self-represented for part of the case and that he had sought to amend the claim on his own and even sent a draft to the defendants, but that since he was self-represented, he was not able to effectuate the amendment by obtaining a court date. He argued that this was also because of COVID.

[18] I dismissed this motion with reasons to follow which I insert here:

• The plaintiff had been self-represented for some time, but he had counsel as of April 2024.
• At the March 7, 2024, pre-trial, the plaintiff said he wanted to amend his Statement of Claim to bring it out of the Simplified Procedure. He had previously sent the defendants a proposed Amended Statement of Claim. At that time the trial was scheduled to commence on April 29, 2024.
• The plaintiff’s current counsel was retained sometime after the pre-trial.
• The plaintiff’s current counsel and the defendants’ counsel had a conversation about the upcoming trial in April 2024. They wrote to the plaintiff’s counsel confirming that the plaintiff would write seeking an adjournment and that the defence counsel consented. They indicated that they were seeking the shortest adjournment and confirmed that the plaintiff would not be bringing a motion for leave to amend his Statement of Claim. [Emphasis added]
• The plaintiff’s current counsel wrote and thanked defence counsel for “the excellent summary of the matters discussed during their conference call.”
• Thus, the plaintiff, with the benefit of legal counsel, resiled from his attempt to amend his claim prior to trial.
• I add that the plaintiff provided no law that would show that the claim to the value of the Property was at all tenable. He did not have any valuations and only referenced a statement in the APS that the Property was assessed at $481,000 for tax purposes to support the value. As I pointed out the best evidence of what a property is worth is what a purchaser was willing to pay. The plaintiff was willing to pay $65,000 in 2019 and the new purchaser was prepared to pay $80,000 in 2020. Further, the plaintiff’s own pleading was for rescission. If it was his position that the Property had that value, then he should have mitigated that alleged loss by accepting the keys when the Church offered to deliver them overnight by bus on June 28, 2019, or when it sent them to his counsel by Purolator on July 3, 2019.
• There was also no evidence led at trial about any special damages incurred by the plaintiff to support the sought after amendment for $73,000. In his closing address he asked his counsel to advise that what he would have done had the transaction closed was rented the church out for $7,500 per month. However, this is not evidence, it is also inconsistent with a claim to rescission and again, if the plaintiff had all these plans, he should have accepted the keys even though they were not delivered to his lawyer on the day of closing. That would have fully mitigated this alleged loss.
• The request being made by the plaintiff, was essentially to open up the entire proceeding after the parties had already conducted the trial, have the matter taken out of the Simplified Procedure that he chose five years ago, and have the matter adjourned for further discoveries to address these new claims. This matter, which was relatively simple, took five years to get to trial. The defendants have already agreed to one adjournment, and it took almost a year to have this matter heard, even when further discoveries and evidence were not required. What the plaintiff proposed would clearly cause undue delay and was clearly prejudicial.

Decision

[19] For the reasons that follow, I find that the plaintiff breached the APS by failing to close and award the Church damages in the amount of $219.61. I also order that the Church repay to the plaintiff the sum of $70,142.23.

[20] The case against Mr. Lehoux is dismissed.

Issues

• Issue 1: Who breached the APS?
  • a) Did the APS and/or the Document Registration Agreement (the “DRA”) require the Church to deliver the keys to the plaintiff in Toronto, via his lawyer or to his real estate agent, such that the Church’s failure to do so constituted a failure to be ready, willing and able to complete the transaction, and was thus a breach of the APS and/or a failure to deliver vacant possession? Or did the plaintiff breach the agreement by refusing to complete the APS because the keys were not delivered to his lawyer in Toronto?
  • b) Did the Church breach the DRA by releasing funds from escrow without registration on title?
• Issue 2: Did Mr. Lehoux owe a duty of care to the plaintiff and did Mr. Lehoux breach the DRA?
• Issue 3: If the plaintiff breached the APS, what are the Church’s damages?
• Issue 4: What is the repayment due to the plaintiff?
• Issue 5: If the Church is liable to the plaintiff, is Mr. Lehoux liable to indemnify the Church for any damages?
• Issue 6: If the plaintiff is successful, is he entitled to 28% interest?

Analysis

Issue 1: Who breached the APS?

a) Did the APS and/or the DRA require the Church to deliver the keys to the plaintiff in Toronto, via his lawyer or to his real estate agent, such that a failure to do so constituted a failure to be ready, willing and able to complete the transaction, and was thus a breach of the APS and/or a failure to deliver vacant possession?

The APS

[21] The APS is titled “OREA Agreement of Purchase and Sale Commercial”. It is a standard form contract.

[22] The APS is silent on keys.

[23] Section 2 provided that it was to be completed no later than 6:00 pm on June 28, 2019, and that “upon completion, vacant possession shall be given to the Buyer unless otherwise provided for in this Agreement.”

[24] Section 8 provided that the plaintiff would have until June 14, 2019, to “examine the title to the property at his own expense” (the “Requisition Date”).

[25] Section 19 provided that time was of the essence:

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 Seller and Buyer or by their respective lawyers who may be specifically authorized in that regard.

[26] It had an entire agreement clause.

[27] It also provided in section 11 that the parties irrevocably agreed to be bound by the DRA:

CLOSING ARRANGEMENTS: Where each of the Seller and buyer retain a lawyer to complete the Agreement of Purchase and Sale of the property, and where the transaction will be completed by electronic registration pursuant to Fort Il of the Land Registration Reform Act, R.S.D. 1990, Chapter Ld and the Electronic Registration Act, S.O. 1991, Chapter 44, and any amendments thereto, the Seller and Buyer acknowledge and agree that the exchange of closing funds, non-negotiable documents and other items (the "Requisite Deliveries") and the release thereof to the Seller and Buyer will a) not occur at the same time as the registration of the transfer/deed [and any other documents intended to be registered in connection with the compilation of this transaction and [b] be subject to conditions whereby the lawyers receiving any of the Requisite Deliveries will be required to hold same in trust and not release same except in accordance with the terms of a document registration agreement between the said lawyers. The Seller and Buyer irrevocably instruct the said lawyers to be bound by the document registration agreement which is recommended from time to time by the Law Society of Ontario. Unless otherwise agreed to by the lawyers, such exchange at Requisite Deliveries shall occur by the delivery of the Requisite Deliveries of each party to the office of the lawyer for the other party or such other location agreeable to both lawyers.

[28] The APS does not define Requisite Deliveries.

The DRA

[29] The DRA contains the following provisions:

1. The Vendor’s Solicitor and the Purchaser’s Solicitor shall hold all funds, keys and closing documentation exchanged between them (the “Requisite Deliveries”) in escrow and shall not release or otherwise deal with same except in accordance with the terms of the Agreement. Both the Vendor’s Solicitor and the Purchaser’s Solicitor have been authorized by their respective clients to enter into this Agreement. Once the Requisite Deliveries can be released in accordance with the terms of this Agreement, any monies representing payout funds for mortgages to be discharged shall be forwarded promptly to the appropriate mortgage lender.

4. The Non-Registering Solicitor shall, upon his/her receipt and approval of the Requisite Deliveries (as applicable), electronically release for registration the Electronic Documents and shall thereafter be entitled to release the Requisite Deliveries from escrow forthwith following the earlier of: a) the registration of the Electronic Documents; b) the closing time specified in the Purchase Agreement unless a specific time has been inserted as follows [_______a.m./p.m. on the Closing Date] (the “Release Deadline”), and provided that notice under paragraph 7 below has not been received; or c) receipt of notification from the Registering Solicitor of the registration of the Electronic Documents.

If the Purchase Agreement does not specify a closing time and a Release Deadline has not been specifically inserted the Release Deadline shall be 6:00 p.m. on the Closing Date.

7. Any of the parties hereto may notify the other party that he/she does not wish to proceed with the registration of the Electronic Documents, and provided that such notice is received by the other party before the release of the Requisite Deliveries pursuant to this Agreement and before the registration of the Electronic Documents, then each of the parties hereto shall forthwith return to the other party their respective Requisite Deliveries.

The Principles of Contractual Interpretation

[30] The main principles of contractual interpretation are as follows:

• A court must give effect to the parties’ objective intentions at the time of contract formation.
• A court cannot consider evidence of the parties’ subjective intentions.
• With respect to written contracts, a court presumes that the parties have intended what they said.
• A court should interpret commercial agreements in accordance with good business sense and avoid commercial absurdity.
• Where there is an ambiguity, the court may resort to extrinsic evidence to clear up the ambiguity.
• The words of a contract must be given their ordinary and grammatical meaning.

[31] In Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, the Supreme Court indicated that simply reading and interpreting the literal words of a contract alone might not actually establish the objective intention of the parties. This is because there is always a “setting” in which the words are used. Further, words do not have “an immutable or absolute meaning”: at para. 47. The Supreme Court also stated that “[t]he meaning of words is often derived from a number of contextual factors, including the purpose of the agreement and the nature of the relationship created by the agreement”: at para. 48.

The Surrounding Circumstances

[32] The surrounding circumstances in this case are as follows. The plaintiff lived in Toronto, Ontario. His lawyer and realtor were in Toronto. The Property was an eight-hour drive away in Cochrane, Ontario.

The Events Leading Up to Closing

[33] On June 14, 2019, Mr. DeClute, plaintiff’s counsel at the time, sent a requisition letter to Mr. Lehoux that specified the following in paragraph 12: “On closing, keys and vacant possession, subject to any tenancy which the purchaser has expressly agreed to assume pursuant to the [APS].”

[34] The June 14, 2019, letter also stated that the parties were bound by the provisions of the DRA and asked for Mr. Lehoux’s confirmation that he agreed to be bound by this.

[35] On June 24, 2019, Mr. DeClute provided draft vendor documents for the closing which included an undertaking to be signed by the Church on closing. The fax cover page indicated as follows: “Please find our amended Direction re Title and the amended documents to be signed by your client and provided on closing.” [Emphasis added]

[36] The attached undertaking which Mr. DeClute was asking the Church to sign indicated that the Church undertook to “deliver up vacant possession of the premises on closing”.

[37] The undertaking made no mention of the keys and Mr. Lehoux testified that he took this to be the plaintiff’s updated position.

[38] Mr. Lehoux testified that since the draft closing documents submitted to him by Mr. DeClute omitted any reference to the keys, the location of the Property in Cochrane, as well as the plaintiff and his lawyer being in Toronto, delivery of the keys to Mr. DeClute’s office in Toronto on the day of closing was not required.

[39] On June 27, 2019, Mr. Lehoux provided a signed Vendor’s Closing Certificate and Undertaking (Statutory Declaration, Undertaking and Warranties and Bills of Sale). This was the signed undertaking that the plaintiff’s lawyer had requested, and which did not make any reference to keys.

[40] On June 27, 2019, the plaintiff met with Mr. DeClute and signed the closing documents. He requested the keys from Mr. DeClute who advised him that he would not receive them until closing. Then Mr. DeClute delivered the signed closing documents together with the balance of the purchase price in the amount of $58,600.22 to Mr. Lehoux. Mr. DeClute stipulated that the funds be held in escrow until the registration of the transfer. He said nothing about the keys.

[41] Mr. Lehoux testified that it was his understanding that arrangements were made between the agents with respect to the delivery of keys and that the keys had been made available for pick up in Cochrane on the day of closing at a convenience store.

[42] On June 28, 2019, Mr. Lehoux delivered the signed closing documents.

[43] Also on June 28, 2019, Mr. Lehoux wrote confirming that he agreed to be bound by the DRA and requested the funds.

[44] On June 28, 2019, Mr. DeClute then delivered the plaintiff’s signed closing documents and closing funds to Mr. Lehoux. Mr. DeClute’s letter asked that Mr. Lehoux’s office contact their office to confirm when the transfer had been released in order to complete the registration.

[45] Upon receipt of the funds and closing documents, Mr. Lehoux signed the transfer.

[46] On the day of closing at 11:10 a.m., the Church’s realtor texted the plaintiff’s realtor and advised that the keys were available at Angel’s Mini Mart at 136 Railway Street, in Cochrane, for pick up. It provided the phone number as well.

[47] The plaintiff’s realtor responded saying “My client prefers to get a key from the lawyer. Please drop the key to the lawyer office today. Thanks.”

[48] The plaintiff says that on June 28, 2019, he received a call from his lawyer at 10:00 saying that the Church had delivered the keys. He did not have them, so he assumed that the keys had been delivered to his real estate agent. He followed up with the agent who then confirmed that he did not have them. The agent did not testify, and the most that this can be admissible for is that the agent told the plaintiff these things. But in any event, the plaintiff’s testimony is not consistent with the text messages that were exchanged by the real estate agents above.

[49] At 1:36 p.m., Mr. DeClute sent Mr. Lehoux’s secretary an email asking that the keys be delivered to him in Toronto and indicating that they would only register once he received the keys.

[50] Mr. Lehoux’s secretary did not give him this email until 3:00 p.m. that day.

[51] At 3:41 p.m. on June 28, 2019, Mr. Lehoux responded indicating that the Church considered the transaction closed. He wrote “Not to have the keys is not a reason not to close the transaction as this condition was never provided for in the closing documents nor in the Agreement of Purchase and Sale”. He also wrote that the Church was “never requested to make any arrangement to deliver the keys prior to closing and it is only today at 3 p.m. on a Friday that the listing agent was contacted with respect to the keys.” Further, to insist on the keys during the closing was “absurd.” Finally, he advised that the keys were available for pick up in Cochrane and that if the plaintiff did not confirm how he wished to receive the keys, they would simply courier them by Purolator.

[52] Mr. DeClute responded indicating that the Church was in breach. He stated that they were in a position to close but that they were still awaiting tender. He asked for confirmation that the funds had not been released as the transfer had not been registered.

[53] The Church offered to send the keys by overnight bus to the plaintiff, but the plaintiff refused.

[54] On July 2, 2019, Mr. Lehoux sent a letter to Mr. DeClute stating that all keys were being sent via Purolator in the morning. Mr. DeClute replied on July 3, 2019, that the Church was in breach and that the plaintiff no longer wished to complete the transaction. He asked for return of the purchase price immediately. Mr. DeClute said that the plaintiff would be seeking 28 per cent in interest. He also denied that the keys had been delivered to Mr. DeClute that day, but on cross examination, the plaintiff admitted that the keys had in fact been delivered to Mr. DeClute on July 3, but that he refused to accept them.

[55] On July 3, 2019, Mr. DeClute wrote and asked for the return of the funds and execution of mutual releases.

[56] On July 16, 2019, Mr. Lehoux released the closing funds to the Church.

[57] The plaintiff then says that he tried to make one last effort to salvage the transaction. His affidavit says he travelled to Cochrane on July 20 or 21, 2019 and attempted to meet with the Bishop. When cross examined, he admitted that he did not contact the Bishop in advance to discuss the fact that he was coming. As well, when he arrived in Cochrane, he did not speak to the Bishop directly. When cross examined, he said, that what he did was travel to the Property and speak to a neighbour. He asked the neighbour to obtain the keys from the Bishop and give them to him. He says the neighbour contacted the Bishop who told him that he should contact his lawyer.

[58] The plaintiff did not follow up again.

[59] Then, Mr. Lehoux wrote to Mr. DeClute on July 25, 2019, asking where the plaintiff wanted the keys delivered. He did not receive any response. The plaintiff says that Mr. DeClute was no longer his lawyer at this point, but there is no evidence Mr. Lehoux knew this.

[60] In my view, the plaintiff breached the APS by refusing to complete the transfer documents for the following reasons:

a) Although the June 14, 2019 Requisition Letter indicated that the plaintiff expected keys as part of the closing, the plaintiff’s lawyer, Mr. DeClute, provided amended closing documents which then omitted the reference to keys being provided on closing altogether.

b) Even if that is not what Mr. DeClute intended, the fact that he did this caused Mr. Lehoux to conclude that the keys were not required to be delivered to the plaintiff’s lawyer on closing. He knew that the plaintiff lived in Toronto and that he would have to drive to Cochrane in any event.

c) In this case, as in every case, the contractual obligations must be determined based upon the agreement and the surrounding circumstances. The APS in paragraph 11 did say that in the absence of any agreement to the contrary, the Requisite Deliveries would be delivered to the opposite lawyer. The Requisition Letter did request keys on closing be delivered to the plaintiff’s lawyer. However, the amended closing documents prepared by the plaintiff’s lawyer omitted the keys altogether such that it was reasonable for the Church to conclude the keys were not one of the Requisite Deliveries on closing. This made sense because the Property was 8 hours away.

d) As evidenced by the fact that the Church arranged for the keys to be picked up at the convenience store, it was always the Church’s intention to provide the keys on closing, just not at Mr. DeClute’s office. It was Mr. DeClute’s letter that led Mr. Lehoux to believe that the keys did not have to be delivered to Mr. DeClute’s office as part of the closing. This did not show bad faith or a failure to be ready, willing, and able to close. It was simply a misunderstanding.

e) Given the confusion, it was unreasonable for the plaintiff to raise this on the day of closing and then take the position that the Church had failed to tender. By the time he raised it, there was no time to drive the keys from Cochrane to Toronto to be there by 6:00 pm. Even if this constituted a breach, the Church was ready, willing and able to close. Everything had been accomplished except for this one matter upon which there appears to have been no communication before closing day.

f) Even if this constituted a breach of the agreement because the keys were not delivered to Mr. DeClute’s office, this was not a breach that went to the root of the contract such that the plaintiff could then walk away from the transaction. It did not constitute a failure to tender.

g) In Time Development Group Inc. (In trust) v. Bitton, 2018 ONSC 4384, Perell J. concluded that older case law that has held that tender must be perfect has been overtaken by contemporary case law that infuses the analysis with notions of good faith. Thus, curable imperfections in tender will not get in the way of tender achieving its evidentiary purposes. “[W]here the defect in tender is curable or the defect is insufficient to justify a refusal to close the real estate transaction, the innocent party will be able to rely on the tender to show that he or she was in a position to enforce the contract”: at para. 58. See also McLean v. Wang, [2020] O.J. No. 5619 at paras 20-23 where the court similarly indicated that whether or not a breach will entitle a party to rescind the agreement or merely sue for damages depends on the nature of the breach.

h) In Adusei v. Ravindra, 2024 ONSC 432, the provisions of the DRA at that time provided that keys could be placed in a lockbox at the purchased property. The vendor did not place them in the lockbox but stated that he had attended at the property on the closing date to give them to the realtor to put in the lockbox. Justice Vermette concluded that the parties had not discussed the keys and there was no specific agreement on the issue, and that “the Buyers cannot raise after the fact a minor, curable issue to avoid the consequences of their failure to close the transaction”: at para. 96.

i) Like Vermette J., I conclude that the Church was ready, willing, and able to close. It had provided all the closing documents. It had made arrangements for the keys to be available for pick up. When it learned of the plaintiff’s insistence on having the keys delivered to Toronto, it then sought to deliver them there, but it was impossible for them to be physically delivered to Toronto by 6:00 p.m. on the closing date.

j) Although time is of the essence in this agreement, such that a breach of any term specified in the APS would entitle the innocent party to not close, as noted the closing documents prepared by the plaintiff’s lawyer did not include any requirement that the keys be delivered to him on closing. Particularly in the context of this case, I agree this reasonably meant that the keys were not part of the Requisite Deliveries that had to be delivered to the plaintiff’s lawyer on closing. This is not the same as 3 Gill Homes Inc. v. 5009796 Ontario, 2024 ONCA 6 which involved sophisticated commercial parties, an agreement that had already been extended once, warnings by the seller, and which involved a failure of the purchaser to pay the purchase price at the time required which is significantly different than the key issue. It is also unlike Correa v. Valstar Homes (Oakville Sixth Line), [2024] O.J. No. 4179 where the issue involved the closing funds which had been set out in the APS in a comprehensive manner: para 64. In this case, although the APS speaks of “Requisite Deliverables”, it makes no mention of keys.

I add that in Shaw v. Holmes, [1952] 2 D.L.R. 330 (ONCA), cited in Minto v. Jones, [2008] O.J. No. 3687, at para 140, which is a case cited by the plaintiff, the Court of Appeal indicated that time is of the essence may be insisted upon by someone who himself is ready willing and able, and who has not subsequently recognized the agreement as still subsisting. In this case, when the plaintiff attended at the Bishop’s to obtain the keys on June 28, 2019, he clearly recognized the APS as still subsisting.

I would also use my residual discretion to relieve against the breach of the “time is of the essence” clause, if necessary, on the basis that the plaintiff’s lawyer caused the confusion that led to this problem. In my view, this satisfies the requirement of there being some unfair or unjust conduct by the non-defaulting party. Further, the Church immediately attempted to address this once it realized the confusion and the plaintiff acted unreasonably: Gill at para 31.

k) I also do not find fault with the Church because the Bishop did not turn over the keys when the plaintiff arrived unexpectedly and asked the neighbour, who had a copy of the keys, to provide them. The parties were represented by counsel. They were having a dispute. It was entirely appropriate for the Bishop, who was taken by surprise, to direct the plaintiff to communicate through counsel. It was appropriate to direct him to his lawyer.

l) Some of the cases the plaintiff cites do not stand for the broad propositions that he says.

m) McGuire Equity Corp. v. Wheatland Development Ltd., 2020 SKQB 114, was a case involving a lease where a tenant argued that the landlord had breached the lease by providing the keys two weeks after the lease was to commence. The court specifically referenced the fact that it would be “difficult to conceive of just how a tenant would be in possession of premises and have quiet enjoyment of same without keys to those premises”: at para. 76. This is much different than a property that is purchased where a purchaser with a completed sale who did not have keys could simply hire a locksmith to change the locks and then sue for the cost of that. Even in this case, the tenant was not permitted to resile completely from the lease on this issue. The court attributed some of the two-week delay to the tenant and then concluded that the most that the tenant could have was a four-day extension of the lease term: at para. 88. Notably, in McGuire, the court also stated that there is no black-line authority linking keys to possession.

n) The plaintiff also relies upon a statement, in McGuire, where the court referenced the case McLean v. Little for the proposition that “delivery of a key is a hallmark of possession”: at para. 80. However, when the McLean case is examined, it was about specific performance of an agreement of purchase and sale where there was no sufficient memorandum in writing. The issue was whether there were sufficient unequivocal acts of part performance. The court stated that “delivery of a key is considered delivery of possession” in that context. That is, “delivery of the key fits in with other acts, and taken in conjunction they form a chain of unequivocal acts”.

b) Did the Church breach the DRA by releasing funds from escrow without registration on title?

[61] Pursuant to section 4 of the DRA, the non-registering lawyer is entitled to release the funds from escrow on the earlier of the registration of the Electronic Documents, the closing time specified in the APS, or receipt of notification of registration of the transfer. Thus, Mr. Lehoux was entitled to release the funds after 6:00 p.m. on the closing date.

[62] However, pursuant to section 7, if any party advised they did not wish to proceed with the registration of the Electronic Documents and if that notice was received before the release of the Requisite Deliveries, the parties were required to return the Requisite Deliveries to the other party.

[63] In this case, the Church says that it released the closing documents, which it considered to be its Requisite Deliveries, before Mr. Lehoux was advised that there were issues. Therefore, it argues that it was entitled to release the funds to the Church.

[64] The plaintiff says that the Requisite Deliveries included the keys which were not properly delivered.

[65] I have already found that making the keys available in Cochrane, which it did as of 10:00 a.m. that day at the Convenience Store, did not constitute a failure to be ready willing and able to close. Therefore, even if the keys were a deliverable, all deliverables were released before any notification was received by Mr. Lehoux that the plaintiff did not want to proceed with registration of the Electronic Documents.

[66] Pursuant to section 7 of the DRA, the funds did not have to be returned.

[67] However, just because the funds did not have to be returned pursuant to section 7, in the circumstances that does not mean that the Church was entitled to keep the funds in law.

[68] An innocent party who is faced with a breach must elect to treat the contract at an end and sue for damages or affirm and sue for damages.

[69] Once the Church elected to treat the contract as at an end by reselling the Property, it was not entitled to keep the funds that the plaintiff had paid, apart from the deposit which was forfeited.

[70] The Church’s explanation is that after it sold the Property, it offered to pay the plaintiff the amount that it had calculated as remaining after taking into account the damages it says it suffered, $57,600.22, in exchange for a release, but the plaintiff would not agree. As will be seen, I have determined that the Church is not entitled to all of the damages it claims and that the amount to be repaid to the plaintiff is actually approximately $67,000. Therefore, one could not criticize the plaintiff for not accepting this offer in the circumstances.

[71] The Church also argues that it has held these funds in trust which it asserts is no different than if it had brought a motion to pay the funds into court. However, in my view this is not entirely accurate.

[72] Had the Church brought the motion to pay the funds into court, it would have provided the evidence regarding its shortfall. There would have been no reason for the funds to be paid into court since the Church actually made no claim to the excess funds and the only one with any entitlement was the plaintiff. Had the Church done this, then approximately $57,000 that it did not claim entitlement to would have been repaid to the plaintiff, the only one with any claim to such funds.

[73] The Church could not articulate any persuasive legal basis for keeping the funds once it had already sold the Property for more than the amount the plaintiff agreed to pay.

[74] For reasons which are inexplicable, it kept the plaintiff’s funds.

[75] He was self-represented for most of this proceeding. As a self-represented litigant, he may not have known that he could immediately seek repayment of these funds.

[76] I will address this issue when I address costs.

Issue 2: Did Mr. Lehoux owe a duty of care to the plaintiff and did Mr. Lehoux breach the DRA?

[77] Mr. Lehoux was the Church’s lawyer. The plaintiff has provided no law or argument that he owed the plaintiff any duty of care.

[78] It is trite that a lawyer does not owe a duty of care to the opposite party: 9383859 Canada Ltd. v. Saeed, 2020 ONSC 4883, at paras. 27-30; World Financial Solutions Inc. v. 2573138 Ontario Ltd., 2024 ONSC 1748, at para. 48.

Issue 3: If the plaintiff breached the APS, what are the Church’s damages?

[79] The Church provided a list of costs that it incurred between the failed closing date and the date of the ultimate sale which total $25,790.69.

[80] The plaintiff did not cross-examine on any of these amounts or make any argument on them.

[81] These include the following:

• Property management services in the amount of $2,183.40. I award this amount.
• Legal fees for the failed sale in 2019 in the amount of $2,239.30. I award this amount.
• Town of Cochrane taxes in the amount of $150. I award this amount.
• Propane charges for heating in the amount of $5,697.40. The receipt indicates that it was filled on November 6, 2019. I find this amount high, but the Church has an invoice, and the plaintiff provided no evidence to contradict it and did not cross-examine on it. I award this amount.
• Propane tank rental in the amount of $98.31. I award this amount.
• A further propane account in the amount of $3,329.33. This indicates that it was delivered on December 20, 2019. I also find this amount high especially since it was delivered only a month after the other propane tank, but the Church has an invoice, and the plaintiff provided no evidence to contradict it and did not cross-examine on it. I award this amount.
• An interim billing tax account in the amount of $150. I award this amount.
• Hydro One expenses in the amount of $1,371.87. I award this amount.
• Its real estate agent’s fees for the commission in the amount of $5,650. The invoice indicates that this was in respect of the second sale only. There is no invoice in respect of the first sale for any commission. I do not award this. Even if the first sale had closed, the Church would have had to pay real estate commission fees. Therefore, this was not caused by the breach. Since the details of the commission that would have been payable on the first transaction was not provided, there is no way to ascertain whether the ultimate commission was more, and the amount by which it was more.
• Legal fees for the sale in 2020 in the amount of $4,291.08. The Church is not entitled to obtain both the legal costs for the failed transaction and the ultimate sale. If the APS had closed, it would have had to pay legal fees associated with that transaction. Technically, it is the second set of legal fees that represent the Church’s damages, but these legal fees are almost double the first set. There is no explanation as to why the fees for the second transaction would be almost double the first and as such, I find them unreasonable and also not reasonably foreseeable at the time of the breach. Therefore, I award only the legal fees associated with the failed transaction as the proper measure of the Church’s damages for legal fees.

[82] Therefore, the Church’s proven damages are $15,219.61.

[83] It sold the Property for $15,000 more than the amount that the plaintiff had agreed to pay.

[84] Therefore, the Church’s damages are $219.61.

Issue 4: What is the repayment due to the plaintiff?

[85] The plaintiff paid the Church the $9,000 deposit as well as $58,600.22 to close the transaction after adjustments, for a total of $67,600.22. Therefore, the plaintiff is owed $67,600.22 - $219.61 or $67,380.61. I add to this the amount that the Church earned by way of interest while it held the plaintiff’s funds in trust, in the amount of $2,761.62 because this was interest on funds that it said it was holding in trust for him. The Church has no entitlement to these funds.

Issue 5: If the plaintiff is successful, is he entitled to a 28 per cent interest?

[86] The plaintiff made the Church aware that he would be seeking 28 per cent interest in a letter at the time of the breach. The APS does not provide for this interest rate. His argument is that he borrowed the money for the closing and that the Church has been holding this money all along such that he has had to pay 28 per cent in interest.

[87] He provided no evidence to support this in his filed materials apart from a bald statement that he claimed it. The trial management form directed that the plaintiff file his affidavit by April 1, 2024, and that he could also file reply affidavits by April 15, 2024. There must have been some amendment to this schedule as the plaintiff filed one affidavit dated November 22, 2024, and did not file any additional affidavit.

[88] On the first day of trial the plaintiff uploaded photocopies of 47 pages of his line of credit statements to support this claim. I did not grant leave for him to submit these at trial:

• The plaintiff refused to produce this material when discovered although specifically asked.
• The plaintiff made no mention of any line of credit in his affidavit materials. All he did was reproduce the demands that he had made for 28% interest without explaining the basis.
• Pursuant to Rule 53.08 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, a party who seeks leave to introduce documents it refused to provide must provide a reasonable explanation and satisfy the court that the admission of this evidence would not cause prejudice or undue delay.
• He did not have a reasonable explanation.
• While he was self-represented for a time, he had counsel as of April 2024 who had prepared his affidavit.
• He did not demonstrate that this would not cause prejudice or undue delay which was the plaintiff’s burden under rule 53.08.
• This case had already been adjourned for trial once and is related to a matter that occurred five years ago. Had the plaintiff provided this material sooner, the Church could have conducted some further discovery on these documents and on the claim to interest based upon them. The 2-day summary trial would have had to be adjourned to permit this with costs thrown away payable to the defendants.
• This is a Simplified Procedure matter, and it would have been disproportionate to adjourn the trial yet again causing an increase in costs to all three parties.
• At the trial management meeting on March 5, 2025, I reviewed the fact that there was no joint book of documents as the parties attached the documents to their affidavits. As such there was no requirement for an authenticity agreement. I noted that “the parties have confirmed that they do not anticipate any issues in this regard.” No one raised any issue about any further documents.
• I note that in any event the documents he uploaded showed that the interest rate on the plaintiff’s line of credit was between 4.45 and 7.7 per cent over the last several years and would not have supported the 28 percent that he claimed.

[89] Nevertheless, there is some discretion in the Courts of Justice Act, R.S.O. 1990, c. C.43 with respect to pre and post judgment interest. I have considerable concerns about the Church’s conduct. The plaintiff may make submissions no longer than 5 pages with supporting case law to set out any reasons why this court may exercise its discretion to award a higher interest rate than that prescribed, in the circumstances of this case, followed by the Church, within five days.

Conclusion

[90] While the plaintiff breached by failing to close, I find it very concerning that the Church sold the Property for $15,000 more than the sale price in the APS in 2020 and then kept the plaintiff’s money for almost five years when its only damages, taking into account the resale, was $219.61. I would have found this concerning even if the Church had proven all of its damages because even if it had, there was still some $58,000 payable to the plaintiff. It was not enough for the Church to invest these funds in the way that it chose. These were the plaintiff’s money and he was the only one entitled to them.

[91] I order that the Church pay the plaintiff the sum of $70,142.23 within 7 days.

[92] As such, in my view, it may be that part of the way to address this conduct is through a costs order. I direct that the plaintiff provide his costs submissions first, no longer than five pages within five days and that the Church provide its cost submissions within five days thereafter also no longer than five pages. They may make the submissions on interest at the same time, such submissions to add no more than two pages to the cost submissions.

Panagiota (Toula) Papageorgiou

Released: April 3, 2025