Reasons for Decision

Court File No.: Woodstock CV-23-00000030
Date Heard: August 30, 2024
Date Released: January 24, 2025
Court: Ontario Superior Court of Justice
Before: B.A. MacFarlane

Between:
Victoria Adeniji, Plaintiff
– and –
Saleha Maqbool and Rajvir Jhutty, Defendants

Appearances:
Gregory P. Weedon, for the Plaintiff
Obaidal Hoque, for the Defendants

Overview

[1] The plaintiff moves for summary judgment against the defendants for the failure to complete a residential real estate transaction. Compensatory damages in the sum of $269,708.54 for breach of contract, with a set-off against the defendants’ deposit, are sought by the plaintiff.

[2] The defendants’ position is that they rescinded the contract because of material misrepresentations by the plaintiff and her real estate agent in the multiple listing documents which induced them into the contract. Alternatively, the defendants allege that the plaintiff failed to mitigate her losses.

[3] The plaintiff filed an affidavit in support of this motion. The defendant Rajvir Jhutty also filed an affidavit and was cross-examined on July 8, 2024.

[4] Pursuant to my endorsement dated September 9, 2024, I declined to adjourn this matter and my decision on the summary judgment motion was reserved. I now deliver my decision and reasons on the motion.

[5] For the reasons outlined below, I find that it is appropriate to determine this issue on summary judgment. Judgment is granted to the plaintiff for damages in the amount of $256,208.54, plus interest and costs to be determined. The deposit paid by the defendant and held in trust will be set off against the judgment owing.

Background Facts

[6] The plaintiff was the owner of a 2-storey residential home known municipally as 1064 Upper Thames Drive, Woodstock, Ontario (“the Property”).

[7] The property was listed for sale on March 1, 2022 on a Multiple Listing Service (“MLS”) through real estate agent Etin Imaseuen and his brokerage firm, Right at Home Realty Inc. (the “Plaintiff’s Realtor”). The list price was $999,000.00.

[8] The main page of the MLS agreement contained a picture of the outside of the home and set out details relating to the property, some of which included:

• Rms: 10
• Bedrooms: 4
• Washrooms: 3 (2 x 4 x 2nd, 1 x 2 x Main)
• Excellent Location With Park Facing. Fully Bricked 2 Storey And Upgraded House With 4 Bedroom And 4 Washroom For Sale With Separate Living Family And Dining Which Offer Tons of Extra Space. Fireplace, Double Door Entrance, Quartz Countertop In The Kitchen And Bathrooms, 3 Washroom.

[9] The MLS provides photographs of the property and measurements to “10” rooms, including (among others): main bathroom is a “2 Pc Bath”, primary bedroom “4 Pc Ensuite” and “2nd Bathroom… 4 Pc Bath”. It was noted to be occupied by a tenant.

[10] The plaintiff admits the following about the property:

a. there were only 3 bathrooms;
b. the countertops were not quartz;
c. the exterior had vinyl siding, which she states is visible in the MLS photograph; and
d. it faces the park only when looking from the driveway because it is actually adjacent to the park.

[11] The defendant Jhutty states they were denied a viewing of the property. It was occupied by tenants. She says: “Relying on the representation of the Plaintiff, as contained in the MLS Listing and the representations of the real estate agent, I engaged in discussions towards making an offer to purchase the Property.” The agent’s representations are said to be that “the MLS listing provided sufficient description of the Property” and “insisted that an unconditional offer needed to be made prior to viewing”. The defendants did not drive by the property prior to making an offer to purchase, because it was a far drive (from Toronto).

[12] The defendants made an unconditional offer to purchase the property, initially for $1,050,000. The plaintiff states that they began negotiations and ultimately, after a couple of sign-back offers, the parties entered into a Purchase and Sale Agreement dated March 11, 2022 (the “Agreement”) for the purchase price of $1,100,000.00 (“sale price”) with a deposit paid on signing of $50,000.00 (the “Deposit”). The agreed upon date for completion was July 21, 2022 (as amended) and time was to be of the essence.

[13] The plaintiff states that during their negotiations with the defendants, they did not seek an inspection prior to finalizing the Agreement on March 11, 2022, nor was it contemplated based on the offer.

[14] The Agreement was an Ontario Real Estate Association (“OREA”) standard form agreement. The following sections were referenced during this motion:

9. FUTURE USE: Seller and Buyer agree that there is no representation or warranty of any kind that the future intended use of the property by Buyer is or will be lawful except as may be specifically provided for in this Agreement.

10. INSPECTION: Buyer acknowledges having had the opportunity to inspect the property and understands that upon acceptance of this offer there shall be a binding agreement of purchase and sale between Buyer and Seller. The Buyer acknowledges having the opportunity to include a requirement for a property inspection report in this Agreement and agrees that except as may be specifically provided for in this Agreement, the Buyer will not be obtaining a property inspection or property inspection report regarding the property.

11. AGREEMENT IN WRITING: If there is conflict or discrepancy between any provision added to this Agreement (including any Schedule attached hereto) and any provision in the standard pre-set portion hereof, the added provision shall supersede the standard pre-set provision to the extent of such conflict or discrepancy. This Agreement including any Schedule attached hereto, shall constitute the entire Agreement between Buyer and Seller. There is no representation, warranty, collateral agreement or condition, which affects this Agreement other than as expressed herein. For the purposes of this Agreement, Seller means vendor and Buyer means purchaser. This Agreement shall be read with all changes of gender or number required by the context.

[15] On March 11, 2022, the defendant Jhutty signed a Registrant Disclosure of Interest Acquisition of Property (an OREA form), disclosing that one of the buyers is a registered real estate agent. In cross-examination she confirmed that this was a disclosure to the plaintiff that she was a non-average buyer, but a professional realtor. However, she states that although she has a real estate licence she is not practicing because she is a homemaker. She is familiar with the OREA Agreements.

[16] The defendant Jhutty had been involved in purchasing 4 other properties. She owns residential homes as investment properties and in looking at this property she was seeking to buy an investment property. The co-purchaser is the wife of her husband’s friend. The defendant Jhutty’s evidence is that her husband, a realtor, was primarily negotiating the real estate deal with their realtor.

[17] The defendant Jhutty did not personally view the property, but her husband viewed it on March 15, 2022. On that date, the defendant Jhutty said she learned “that several aspects of the Property’s description in the MLS were inaccurate”.

[18] In cross-examination, the defendant Jhutty agreed that the photographs in the MLS clearly show that there is siding rather than brick exterior but it said only brick in the listing. She did not seek to clarify the issue.

[19] On March 27, 2022, the defendants, through their realtor, requested a reduction of the purchase price, based on misinformation contained in the MLS, namely: (a) wrong number of bathrooms; (b) no quartz countertops; (c) property was not facing a park; and (d) the exterior was not fully brick. It was noted that the buyer was not permitted to see the house prior to the Agreement being entered into. The defendant sought a reduction of the purchase of $13,500, based on $6,000 for the cost of a quartz countertop material and $7,500 for the cost of a fourth bathroom. The defendant was “not making issues for the exterior Brick and park facing”. No reduction of price was sought for the lack of brick exterior or the park view.

[20] On April 8, 2022, the parties negotiated a new closing date and signed an Amendment to Agreement of Purchase and Sale extending the closing date from May 31, 2022 to “21-July-2022” with a title search date of “6-July-2022”. No other amendments were made to the Agreement, and it included a term that: “All other Terms and Conditions in the aforementioned Agreement to remain the same”.

[21] On June 27, 2022, through their lawyer, the defendants alleged misrepresentation and fraud in relation to the MLS listing not matching the features of the property. The defendants sought the plaintiff to deliver the property in the form listed in the MLS, including: 4 bathrooms, quartz countertops in kitchen and bathrooms and fully brick house. Additionally, they wished a reduction in the price of the property because it was not park facing. A letter from the defendants’ lawyer stated that his clients are “not asking for any compensation nor planning to take any action for misrepresentation and fraud played to the public at large and especially on my clients”.

[22] The lawyer’s letter (marked as an exhibit) attached a copy of a property listing sheet, which states a “Sold Price: $1,100,000”. This listing document was obviously printed after the Agreement was entered into based on the “sold price” being noted. The listing contains some differences with the first MLS listing document but includes the following similar remarks to the listing submitted by the plaintiff:

• Rooms: 10+0
• Baths (F+H): 3 (2+1)
• Exterior is noted as Brick.
• Excellent Location With Park Facing. Fully Bricked 2 Storey And Upgraded House With 4 Bedroom And 4 Washroom For Sale With Separate Living Family And Dining Which Offer Tons of Extra Space. Fireplace, Double Door Entrance, Quartz Countertop In The Kitchen And Bathrooms, 3 Washroom.

[23] The plaintiff denies any misrepresentations. Her evidence was that she was surprised by the defendants’ position in the June 27, 2022 letter, given their waiver of inspection and the fact that the defendant Jhutty was a real estate agent. However, on June 28, 2022, she agreed to credit the defendants the sum of $13,500, being the reduction on the purchase price initially sought by the defendants, on a without prejudice basis.

[24] A follow up email was sent by the plaintiff’s lawyer to the defendants’ lawyer on July 3, 2022. In the email the plaintiff’s agreement to credit the defendants the sum of $13,500 and proceed with closing on July 21, 2022 was confirmed.

[25] The defendants did not submit a requisition letter pursuant to section 10 of the Agreement, which requisition was to be made by July 6, 2022 (as amended on April 8, 2022).

[26] The plaintiff’s lawyer sent a letter to the defendants’ lawyer on July 14, 2022, seeking confirmation on where to send the Deed, given no requisition letter was sent.

[27] On July 18, 2022, the defendants’ lawyer sent an email to the plaintiff’s lawyer stating that the defendants do not want a price reduction; they “don’t want to go in the matter of misrepresentation and fraud. My client simply wants their deposit back with no damages or any compensation”.

[28] The same day, the plaintiff’s lawyer advised the defendants’ lawyer that she denies fraud or misrepresentations. Furthermore, she was ready to close the transaction on July 21, 2022, being the agreed upon closing date in the Agreement, as amended.

[29] The defendants’ lawyer responded in the early evening of July 18, 2022, stating: “[W]e are ready to close the property with all the corrections. That was the sellers/sellers’ agent misrepresentation why as the buyers we have to close the property which does not fill our requirements”.

[30] The defendant Jhutty’s evidence is that the plaintiff was unable to remedy the misrepresentation and offered the $13,500 price reduction instead. At that point, due to market changes and the feeling of overpaying for the property, they declined her proposal. They view this as their rescission of the contract.

[31] On the night of July 18, 2022, the plaintiff’s lawyer responded to the defendants stating that if they do not close, she will tender on them for breach of contract.

[32] On July 21, 2022 (the amended closing date) the defendants took no steps to finalize the transaction (e.g., not providing closing documents and closing funds for the property). At 5:00 p.m., the plaintiff’s lawyer confirmed by email to the defendants’ lawyer that she had provided all required documents for closing, statement of adjustments, mortgage payout statements for discharge and solicitor’s undertaking to discharge.

[33] The defendant Jhutty admitted that the appropriate documents were tendered on July 21, 2022. According to the statement of adjustments, the balance due on closing was $1,036,154.97, which included the credit of $13,500 agreed to by the plaintiff.

[34] After the transaction was not completed, the plaintiff re-listed the property (on August 10, 2022) for the original listing price of $999,000.00, with the same terms and conditions. Following a series of price reductions on advice of a real estate agent, resulting from a downturn in the real estate market and the lack of offers, the plaintiff entered into a Purchase and Sale Agreement with a different purchaser on November 7, 2022 (“Subsequent Purchaser”). The plaintiff provided evidence of the re-listing details and advice from the realtor regarding the price reductions.

[35] The property was ultimately sold for $840,000 on January 21, 2023, based on market conditions at that time.

[36] The plaintiff claims her carrying costs from July 21, 2022 to January 21, 2023 total $9,708.54 and filed invoices relating to the expenses, including expenses for utilities, property insurance, mortgage interest, property taxes and legal costs relating to the Agreement.

[37] The Statement of Claim was issued on March 6, 2023, seeking:

a. a declaration that the defendants breached the Agreement;
b. a declaration that the plaintiff is entitled to forfeiture of the defendants’ deposit;
c. an order for the release of the deposit held in trust by the realtor, Right at Home Realty Inc.;
d. compensatory damages for breach of contract in the sum of $260,000, being the difference between the sale prices realized;
e. compensatory damages for breach of contract in a sum to be determined for out of pocket expenses and costs flowing from the defendants’ breach of Agreement, including carrying costs until the property was ultimately sold;
f. interest and costs.

[38] The defendants entered a Statement of Defence in which they state: “the plaintiff’s real estate agent declined a request for a viewing of the property and represented that the MLS listing provided a sufficient and accurate description of the property and insisted that an unconditional offer needed to be made prior to viewing”.

[39] The defendants allege that relying on the representations of the plaintiff (in the MLS listing and representations of her real estate agent), they made the offer to purchase the property and for $1,100,000 and provided a deposit of $50,000.

[40] The defendants plead that they are entitled to rescind, and they did in fact rescind the Agreement, which was accepted by the plaintiff.

[41] Although not specifically admitted, the defendant agrees to the following in their Statement of Defence, specifically that they:

a. viewed the property on March 15, 2022;
b. advised the plaintiff of misrepresentations on March 27, 2022;
c. on or around April 8, 2022 they agreed to defer the closing date to July 21, 2022, which resulted in the Amended the Agreement;
d. made further attempts to discuss the misrepresentations with the plaintiff (around the first week of June 2022).

[42] The plaintiff states that this matter is appropriate for summary judgment. The defendant opposes the motion.

Law

Law on Summary Judgment

[43] A motion for summary judgment may be made pursuant to Rule 20.01 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194 and “the court shall grant summary judgment if the court is satisfied that there is no genuine issue requiring a trial with respect to a claim or defence”: Rule 20.04(2)(a).

[44] Rule 20.04(2.1) of the Rules sets out the court's powers on a motion for summary judgment as follows:

In determining under clause (2)(a) whether there is a genuine issue requiring a trial, the court shall consider the evidence submitted by the parties and, if the determination is being made by a judge, the judge may exercise any of the following powers for the purpose, unless it is in the interest of justice for such powers to be exercised only at a trial:

1. Weighing the evidence.
2. Evaluating the credibility of a deponent.
3. Drawing any reasonable inference from the evidence.

[45] In the leading case of Hryniak v. Mauldin, 2014 SCC 7, at para. 66, the Supreme Court of Canada established a road map outlining how a judge should approach a motion for summary judgment:

…[T]he judge should first determine if there is a genuine issue requiring trial based only on the evidence before her, without using the new fact-finding powers. There will be no genuine issue requiring a trial if the summary judgment process provides her with the evidence required to fairly and justly adjudicate the dispute and is a timely, affordable and proportionate procedure, under Rule 20.04(2)(a). If there appears to be a genuine issue requiring a trial, she should then determine if the need for a trial can be avoided by using the new powers under Rules 20.04(2.1) and (2.2). She may, at her discretion, use those powers, provided that their use is not against the interest of justice. Their use will not be against the interest of justice if they will lead to a fair and just result and will serve the goals of timeliness, affordability and proportionality in light of the litigation as a whole. [Emphasis in original.]

[46] There is no genuine issue requiring a trial when the court can reach a fair and just determination on the merits of the motion. This will be the case where the process (1) allows the court to make necessary findings of fact, (2) allows the court to apply the law to the facts, and (3) is a proportionate, more expeditious, and less expensive means to achieve a just result: Hryniak, at para. 49; Moffitt v. TD Canada Trust, 2023 ONCA 349, at para. 39.

[47] If a genuine issue appears to require a trial, the judge should determine whether the powers under 20.04(2.1) and (2.2) can be used to avoid the need for a trial. The discretionary use of these powers should lead to a fair and just result to serve the goals of timeliness, affordability and proportionality. It should not be against the interest of justice.

[48] The court should use its enhanced powers and decide a motion for summary judgment only where it leads to “a fair process and just adjudication”: Ang v. Lin, 2023 ONSC 4446, at para. 15, citing Mason v. Perras Mongenais, 2018 ONCA 978, at para. 44 and Eastwood Square Kitchener Inc. v. Value Village Stores, Inc., 2017 ONSC 832, at paras. 3-6.

[49] As set out by Glustein J. in Joshi v. Chada, 2022 ONSC 4910, the relevant legal principles applicable to summary judgment can be summarized as follows:

(i) The purpose of r. 20 of the Rules is to (a) eliminate claims that have no chance of success at trial, and (b) provide judges with fact-finding powers to be used on a summary judgment motion: Hryniak, at paras. 44-45, 66;
(ii) The evidence on a summary judgment motion must enable the motion judge to be confident that they can fairly resolve the dispute: Hryniak, at para. 57;
(iii) The motion judge’s enhanced powers allow the court to weigh evidence, evaluate credibility, and draw reasonable inferences from the evidence: Mega International Commercial Bank (Canada) v. Yung, 2018 ONCA 429, at para. 83;
(iv) The focus of a summary judgment motion is not on what kind of evidence could be adduced at trial, but rather on whether a trial is required: Hryniak, at para. 56;
(v) The court is entitled to assume that it has all the evidence that would be available at trial related to the matters at issue: Portuguese Canadian Credit Union v. Pires, 2011 ONSC 7448, at para. 11, aff’d 2012 ONCA 335;
(vi) The moving party has the onus of proving that there is no genuine issue requiring a trial. Then, the onus shifts to the responding party to provide evidence of specific facts showing that there is a genuine issue requiring a trial: Sweda Farms Ltd. et al. v. L.H. Gray & Son Limited et al., 2013 ONSC 4195, at paras. 26-27, aff’d 2014 ONCA 878;
(vii) Summary judgment is not appropriate if the credibility of the parties is squarely in issue and requires a trial: Demetriou v. AIG Insurance Company of Canada, 2019 ONCA 855, at para. 9;
(viii) The more important credibility disputes are to determining key issues, the harder it will be to fairly adjudicate those issues solely on a paper record. “It is not always a simple task to assess credibility on a written record. If it cannot be done, that should be a sign that oral evidence or a trial is required”: Cook v. Joyce, 2017 ONCA 49, at para. 92, citing Trotter Estate, 2014 ONCA 841, at para. 55; and
(ix) The court must take “great care” in assessing credibility and reliability on affidavit evidence, since “[e]vidence by affidavit, prepared by a party’s legal counsel, which may include voluminous exhibits, can obscure the affiant’s authentic voice”. Consequently, the motion court must “ensure that decontextualized affidavit and transcript evidence does not become the means by which substantive unfairness enters, in a way that would not likely occur in a full trial where the trial judge sees and hears it all”: Baywood Homes Partnership v. Haditaghi, 2014 ONCA 450, at para. 44.

[50] It is well-established that parties to a summary judgment motion are obliged to put their best foot forward: Mazza v. Ornge Corporate Services Inc., 2016 ONCA 753, at para. 9. The court is entitled to assume that the record contains all the evidence that the parties would present if the matter proceeded to trial and can draw an adverse inference that there is no better evidence available than that which is provided by that party: Sweda Farms Ltd., at paras. 26-27; Travelers Insurance Company of Canada v. LCL Builds Corporation, 2018 ONSC 1805, at para. 46; S.N.S. Industrial Products Limited v. Omron Canada Inc., 2018 ONCA 278, at para. 5.

[51] The court must take a hard look at the evidence. While the onus is on the moving party to establish there is no issue requiring a trial, the responding party must “lead trump or risk losing”: 1061590 Ontario Ltd. v. Ontario Jockey Club, at para. 36.

[52] The court has granted summary judgment in cases of aborted real estate transactions: Zoleta v. Singh and RE/MAX Twin City Realty, 2023 ONSC 5898, at para. 38, citing Forest Hill Homes v. Ou, 2019 ONSC 4332, at para. 26; Paradise Homes North West Inc. v. Sidhu, 2019 ONSC 1600, at para. 33; and Rosehaven Homes et al. v. Aluko et al., 2022 ONSC 1227, at para. 97, aff’d 2022 ONCA 817.

[The remainder of the reasons, including the analysis of the issues, findings on material misrepresentation, inducement, rescission, summary judgment, and damages, follows as in the original text, with all paragraphs and content preserved and formatted for clarity and readability.]

Conclusion

[125] Based on the pleadings and evidence filed, I find that there is no genuine issue requiring a trial. Using the enhanced powers under r. 20.04, I am satisfied that granting summary judgment is fair and just, being a timely, affordable, and proportionate procedure that serves the interests of justice.

[126] I find that the defendants were not entitled to rescind the Agreement based on material misrepresentations. By their failure to complete the transaction, the defendants breached the Agreement, for which the plaintiff is entitled to her damages.

[127] I conclude the damages payable to Victoria Adeniji by the defendants will be the difference in price obtained by her plus the carrying costs.

[128] The plaintiff will have judgment in the amount of $256,208.54 and the deposit held in trust will be released to the plaintiff for payment owing on the judgment.

[129] In accordance with s. 127 of the Courts of Justice Act, R.S.O. 1990, c. C.43, the plaintiff shall have pre-judgment interest on the judgment at the rate of 2.8% commencing July 21, 2022 to the date of judgment. I note that this action was commenced in March 2023.

[130] This judgment bears post-judgment interest at the rate of 4% pursuant to s. 128 of the Courts of Justice Act, R.S.O. 1990, c. C.43.

[131] The parties are strongly encouraged to agree on costs of this motion but if they are unable to do so, the plaintiff may make submissions by February 7, 2025 and the defendants may respond by February 21, 2025. Submissions should be no more than 3 pages, excluding cost outlines/bill of costs.

Justice B.A. MacFarlane
Released: January 24, 2025