Reasons for Judgement

Court File No.: CV-22-00684647-0000
Date: 2025-04-25
Ontario Superior Court of Justice

Between:
Adam Bellisario, Adrian Ortiz, Akshaykumar Naik, Omibaba Ltd., Amir Siddiqui, Arunan Sivakumar, Brian Ferreira, Christopher Ortiz, Devon Pearson, Jay Atawala, Shiv Holding Inc., Kailee Trigiani, Michael Ventura, Katelyn Meadwell, Kyle Camilleri, Manju Dhankar, Deepak Kumar, Mariangel Urdaneta, Rafael Enrique Cabrera Salerno, Mayuran Ponampalam, Nelson Moreira, Stephanie Aguiar Gaipo, Nicole Da Silva, Nirosiga Elankeeran, Rolando Sabado, Grace Sabado, Sam Natur, Sandra D'Avella, Alfonso D'Avella, Sasa Mudrinic, Paula Lionetti, Shawn Moore, Stefany D'Avella, Stephen Harkness, Dina Harkness, Zoya Moattar, Kamalpreet Saral, Baljot Saral, Jaspreet Parmar, Inderjit Singh Sajjan, and Mohammad Usman Khalid
Applicants
– and –
2200 Bromsgrove Development Inc.
Respondent

Appearances:
Sean Foran and Lia Boritz, for the Applicants
Rolf Piehler and Stuart Gordon, for the Respondent

Heard: March 4, 2025

Panagiota (Penny) Papageorgiou

Overview

[1] The Applicants are purchasers (the “Purchasers”) of various units in a townhouse complex called Clarkson Urban Towns (the “Clarkson”). The Respondent 2200 Bromsgrove Development Inc. (the “Developer”) is the developer of the Clarkson. The Purchasers seek a declaration that the Developer was not entitled to charge them certain adjustment amounts on closing pursuant to their respective agreements of purchase and sale (the “APSs”).

[2] The Purchasers had also sought declarations in respect of development charges that they paid, but they did not pursue this at the hearing.

Decision

[3] For the reasons that follow the application is granted and I direct a reference on damages before me as set out below.

Issues

• Issue 1: Do the provisions of the APSs permit the Developer to charge the Purchasers utility costs paid to contractors, trades and other third parties related to the utility infrastructure, or are such costs limited to amounts that it has paid the Municipality and utility service providers?
• Issue 2: Did the Developer charge the Purchasers amounts to which it was not entitled?
• Issue 3: Can the court look behind the Certificate provided by the Developer?
• Issue 4: Does the Limitation of Liability Clause apply?
• Issue 5: Are the Purchasers entitled to be reimbursed for the $800 charged by the Developer to extend the closing date?
• Issue 6: Is this matter appropriately heard by way of Application?
• Issue 7: What is the appropriate remedy?

Analysis

Issue 1: Utility Costs and the APSs

Underlying Facts

[4] The Purchasers entered into the APSs between January 2019 and February 2021, all before their respective units were constructed. These APSs are substantially the same in terms of the disputed issues, although the purchase prices varied between approximately $400,000 and $700,000.

[5] The APSs contained provisions for adjustments to the purchase price related to matters including utilities which were to be calculated and paid as of the closing date.

[6] The APSs were scheduled to close on July 20, 2022 (the “Closing Date”).

[7] On or about July 15 or 16, 2022, the Developer delivered final Statements of Adjustment that purportedly included adjustments in respect of utility costs. These were set out as total amounts with subcategories reflecting alleged Utility Meter Installation Charges as follows:

• Electrical
• Gas
• Water and sanitary
• Permits and fees

[8] In some cases, the additional charges in respect of Utility and Meter Installation Charges for some of the Purchasers were as high as $86,000.

[9] On July 19, 2022, in response to Ms. Trigiani’s request for evidence to substantiate these adjustments, the Developer provided a Certificate that broke down in greater detail the costs reflected in the Statement of Adjustments.

[10] This Certificate set out only total amounts paid under the following subheadings related to the entire project, which amounts were then divided among the Purchasers based on their proportionate share:

• Cost of water and water check/sub meter costs, installation and connection charges and a proportionate share of all water, sanitary, drain, and sewer infrastructure, installation, connection and energization costs.
  Paragraph 4.01(c)(iv) of Appendix “A”
  $1,965,5133.23

• Costs of Hydro check/sub meter costs, installation and connection charges and a proportionate share of all electricity installation, connection and energization costs
  Paragraph 4.01(c)(iv) of Appendix “A”
  $1,529,335.90

• Cost of Gas/BTU check/sub meter costs, installation and connection charges and a proportionate share of all gas installation, connection and energization costs
  Paragraph 4.01(c)(iv) of Appendix “A”
  $239,923.36

• Cost of water, gas and installation and connection charges
  Paragraph 4.01(c)(iv) of Appendix “A”
  $239,081.59

[11] On July 20, 2022, the Developer also sent the Purchasers a series of 4 packets purporting to explain and provide evidence for the closing adjustments related to each different kind of utility.

[12] The packets listed categories of contractors, trades and other third parties allegedly paid by the Developer.

[13] For example:

• Packet 1 stated that the Developer incurred hydro check/sub meter costs of:

  • $1,301,382.54 for “hard trades” including an “electrical contractor”, “shoring and tie back contractor”, “mechanical contractor”, “concrete forming contractor”, “waterproofing contractor”, “hardscape landscaping”, “paving contractor”, “miscellaneous metals” and “construction systems and miscellaneous supplies”.
  • $63,672.22 for “construction management” and “multipurpose site contractor”
  • $164,258.13 for “engineering and consultants” and “temporary power”.

• Packet 3 stated that the Developer incurred Gas/BTU check/sub meter costs of:

  • $1,771,096.34 for “hard trades” including “stormwater and draining contractor”, “shoring and tie back contractor”, “mechanical contractor”, “concrete forming contractor”, “waterproofing contractor”, “excavation and grading”, “hardscape landscaping”, “paving contractor”, “miscellaneous metals” and “construction systems and miscellaneous supplies.”
  • $132,925.33 for “construction management” and “multipurpose site contractor”
  • $61,491.45 for “engineering and consultants”.

[14] Ms. Trigiani was unsatisfied with information provided by the Developer. In particular, she was concerned that it was not clear how these items related to utility meter installation, and it appeared to her that the Developer was attempting to recoup costs that it should have borne.

[15] The Developer gave all the Purchasers an offer to extend the closing date to July 27, 2022, although Ms. Trigiani did not take this offer because the Developer said it would charge $800 for the extended closing date. Some Applicants did extend the closing date and pay the $800.

[16] All of the Purchasers closed by July 27, 2022, and they commenced this Application that very day.

Principles of Contractual Interpretation

[17] Contractual interpretation is an exercise in discovering the “objective intentions of the parties as expressed in the words of the contract”: Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53, at para. 57.

[18] The court is required to “read the contract as a whole, giving the words used their ordinary and grammatical meaning, consistent with the surrounding circumstances known to the parties at the time of formation of the contract”: Sattva, at para. 57; Ledcor Construction Ltd. v. Northbridge Indemnity Insurance Co., 2016 SCC 37, at para. 27.

[19] In interpreting standard form agreements, the surrounding “factual matrix” specific to the contracting parties is less relevant. This is because such contract is not the product of negotiations between those specific parties. It is the product of a take it or leave it proposition. General contextual information, like the purpose of the contract, the nature of the relationship it creates and the industry should still be taken into account but they are not fact specific and will be the same for everyone who may be a party to a standard form contract: Ledcor, at paras. 28-32.

[20] When a contract is read as a whole, it should be interpreted “in a manner that gives meaning to all of its terms and avoids an interpretation that would render one or more of its terms ineffective”: 2249778 Ontario Inc. v. Smith (Fratburger), 2014 ONCA 788, at para. 19; Meridian CC Intl Inc. v. 2745206 Ontario Inc., 2022 ONCA 12, at para. 7.

[21] Courts should not interpret a contract in a way that no rational commercial actor would agree to or would lead to an absurd, unjust, or commercially unreasonable results: Guarantee Co. of North America v. Gordon Capital Corp., para. 61; Smith (Fratburger), at para. 19.

[22] If ambiguity in contract terms remains after the above principles are applied, the rule of contra preferentum can be applied to give effect to an ambiguous clause by preferring the reasonable interpretation that favours the party that did not have control over its drafting: Ledcor, at para. 51; Manulife Bank of Canada v. Conlin, para. 9; Smith (Fratburger), at para. 22.

The Relevant Terms of the APSs

[23] Pursuant to the APSs, the Purchasers agreed to pay adjustments on closing as follows:

1.02. the balance of the Purchase Price shall be paid to the Vendor in accordance with paragraph 6.04(d) on the Closing Date and all proper and usual adjustments and those adjustments as hereinafter set forth shall be calculated as of and paid on the Closing Date.

[24] Appendix “A” to each APS contains a series of provisions. Section 4.01(c)(iv) sets out the permitted adjustments and charges that can be applied to the purchase price on closing relied upon by the Developer.

(i) The Vendor shall be entitled to a reimbursement of:
(A) the cost of any water and water check/sub meter costs, installation and connection charges and hydro and gas/BTU check/sub meter costs, installation and connection charges; and
(B) a proportionate share of all electricity, gas, water, sanitary, drain and sewer infrastructure, installation, connection and energization costs (or security relating thereto) paid by the Vendor to or deposited by the Vendor with the Municipality or utility service provider which shall be calculated by multiplying said charges by the Percentage Contribution to Common Expenses or equally to each dwelling (in the Vendor’s sole discretion) and by charging the Purchaser in the statement of adjustments with that portion of such charges.

[25] “Municipality” is defined in the APS as the City of Mississauga.

[26] Notably, s. 4.01(c)(iv) is identical to the comparable provision in Schedule B to the Tarion Addendum which is set out in s. 9 of Schedule B to the Tarion Addendum. Therefore, this is a usual and common provision related to utility adjustments in the industry.

The Developer’s Position

[27] The Developer’s position is that section 4.01(c)(iv) permitted it to charge the Purchasers for all costs associated with the engineering, installation, and connection of the necessary utility services irrespective of who such amounts were paid to.

[28] The Developer says that new and existing developments place additional stresses on local community infrastructure, including sewer systems, water systems, and hydro and gas infrastructure, and that new residential communities require newly constructed and/or re-engineered and improved services to meet governmental standards and occupancy approvals. It says that it specifically negotiated an agreement that the Purchasers would pay these costs.

[29] The quantum of costs it ultimately charged reflected the multiple challenges the Developer experienced in the construction, completion, and connection of municipal services to these units. The local municipal infrastructure was originally intended to service traditional industrial manufacturing, as the Clarkson was the site of a former manufacturing facility. The existing infrastructure was not linked to water, gas, or hydro. As a result, the infrastructure had to be reconstructed, reconnected, and made fit for residential purposes.

[30] The sanitary sewer, which had to be connected to the site, was adjacent to a rail corridor. Additional works were required to be completed to facilitate the connection of the sanitary sewer to the Clarkson. The approvals for these works were not granted, and costs were unknown, until the Clarkson was sold and well under construction.

[31] I note here that based upon the Developer’s evidence, it knew that costs were unknown at the time it entered into the APSs.

[32] It also points out that the Purchasers had the opportunity to and were directed to seek independent legal advice during the 10-day cooling off period pursuant to section 73 of the Condominium Act, 1998. All the Purchasers were represented by counsel at the time of each APS.

[33] Although 4.01(c)(iv)(B) only expressly referenced the Developer’s ability to pass along amounts paid to a Municipality or a utility service provider, the Developer argues that the term “utility service providers” is not a defined term. It says it has taken a broad interpretation of this term to include third-party contractors and trades.

The Purchasers’ Position

[34] The Purchasers position is that the unanticipated difficulties encountered by the Developer does not mean that it can pass these on to the Purchasers.

[35] It is the terms of the APS that govern in this regard and there is no basis to interpret “utility service provider” to include trades and others paid by the Developer in respect of the utility infrastructure costs which should be borne by it.

[36] They also argue that the quantum of the adjustments was extraordinary. While the purchase price of the units ranged from approximately $400,000 to $700,000, the adjustments for the disputed charges ranged from $62,000 to $111,000. Ms. Trigiani purchased her unit for $484,000 and the adjustments related to utilities was approximately $70,000. Although she had budgeted an amount for closing adjustments, the amount was completely outside her expectations.

Assessment of the Parties’ Positions

[37] I reject all of the Developer’s arguments and in particular its argument that “utility service provider” can be interpreted to include third party trades and contractors that the Developer paid to work on the infrastructure.

[38] The surrounding circumstance that matters is that this is a consumer transaction involving a standard form contract where there are statutorily imposed terms to protect consumers in the Tarion Addendum. Therefore, consumer protection is an important public interest in this industry.

[39] Section 4.01(c)(iv) has two parts.

s. 4.01(c)(iv)(A)

[40] The Developer could not charge utility infrastructure costs that it paid to third party contractors and trades pursuant to s. 4.01(c)(iv)(A).

[41] The plain and ordinary meaning of s. 4.01(c)(iv)(A) relates to the cost of installing meters for the services for each unit. Meters are something that reads the extent of utility usage. This section cannot include the cost of infrastructure and energization costs because infrastructure and energization costs are specifically noted in s. 4.01(c)(iv)(B). If the parties had intended infrastructure and energization to be included in (A) they would have said so expressly as they did in (B). This section also differs from (B) because (B) speaks to an owner’s proportionate share whereas (A) does not. This further supports the conclusion that (A) relates to costs incurred in respect of each unit for the installation of utility meters. The Developer did not articulate how the infrastructure and energization costs that it incurred and paid to trades and subcontractors could be specifically related to each unit. The Certificate it provided in this regard did not itemize any specific costs related to each unit, only large aggregate amounts that it sought to charge the Purchasers on a proportionate basis, which it must have sought to charge pursuant to (B).

s. 4.01(c)(iv)(B)

[42] I also reject the Developer’s argument that it was permitted to interpret s. 4.01(c)(iv)(B) to mean that it could charge for matters that related to the utility infrastructure even if these amounts were not paid to the Municipality or to utility service providers.

[43] The plain and ordinary meaning of (B) is that it only permits adjustments for other infrastructure, installation, connection and energization costs (or security relating thereto) “paid by [the Developer] to or deposited by [the Developer] with the Municipality or utility service provider.” [Emphasis added] The use of the wording “to” and “with” modify the words “Municipality” and “utility service provider”. Therefore, the plain and ordinary meaning of the phrase is that for the Developer to be able to charge these amounts by way of adjustment, it must have paid them to or deposited them with the Municipality or the utility service provider. This section does not include costs that the Developer may have paid for these items to third party trades contractors, and other third parties.

[44] Even in the Developer’s own Executive Summary filed, when it used the term “utility service provider”, it referenced the actual utility service providers being Alectra Utilities and Enbridge Gas. As well, when it delivered the packets, it called these costs amounts paid to trades and contractors, not to utility service providers, also demonstrating that the Developer well understands the distinction.

[45] There is no ambiguity here.

[46] To the extent that there is any ambiguity, the purpose of this provision is relevant. It is to compensate the Developer for utility costs, like those paid for meter installation and to the Municipality and utility service providers who connect services at a point in time that is after the project commences. The purpose of this provision is not to include significant construction costs paid to the Developer’s own trades and construction workers for things that the developer should have taken into account within the purchase price. One would reasonably expect that if there needs to be significant infrastructure work done by the Developer’s contractors and trades, in order to connect utilities, a developer would conduct the analysis as to what that would cost and then include that in the purchase price so that a consumer pays a transparent price. One would not reasonably expect these kinds of potentially significant costs to be hidden and then revealed shortly before closing through a statement of adjustments. These types of charges are not within the reasonable expectations of the Purchasers. Because the Developer is the one who does the analysis to consider what work needs to be done, they are charges that the Developer should have been able to anticipate, estimate and be transparent about.

[47] The Developer’s proposed interpretation is also not commercially reasonable either. It would expose purchasers, who are consumers, to unpredictable and potentially significant development costs that should have been included in the purchase price at the outset clearly and transparently. The significant amount of the proposed charge back here, relative to the cost of the properties at issue make that clear in this case. The Developer was in the position to do assessments and studies of what was required at the outset to determine its expected costs. If it failed to do so or was mistaken in its assessment, this is not the Purchasers’ fault.

[48] Further, as noted, because the Purchasers did not have control over the drafting, any ambiguity is to be resolved in the Purchasers’ favour. I apply this principle.

[49] It seems to me that what has happened based on the Developer’s own evidence is that it encountered unexpected difficulties connecting the existing infrastructure to water, gas and hydro and that it had to then reconstruct it. This was because the original infrastructure was intended to service traditional manufacturing. This is something that the Developer could have and should have considered and estimated before it entered into the APSs such that if there would be additional significant costs, it could have negotiated a specific agreement from the Purchasers that they would pay them. It failed to do so and now is seeking to pass along these costs to the Purchasers even though the APSs do not provide for this.

[50] The plain and ordinary meaning of these provisions is that the Developer could only charge by way of adjustment for installation of meters as well as infrastructure costs that it paid to the Municipality or to utility service providers only.

Issue 2: Did the Developer Charge the Purchasers Amounts to Which It Was Not Entitled?

[51] The packets provided by the Developer show that the Developer has purported to pass along all of the costs paid to third-party contractors and trades, to install and construct the infrastructure necessary to make the utilities work.

[52] The Developer’s Executive Summary also shows that it has charged the Purchasers for amounts that it paid to third-party contractors and trades as well as amounts paid to Metrolinx for “provincial agency approvals”, “procurement charges” and building a safety barrier/crash wall.

[53] However, this crash wall had to be built as a term of the Developer’s Adjacent Development Agreement dated March 5, 2021, with Metrolinx (the “ADA”) because of the proximity of the building to the Lakeshore West GO Rail Corridor.

[54] The ADA does not say that the purpose of the wall is to protect the sanitary line.

[55] The Purchasers brought a motion to compel the Developer to provide supporting documentation with respect to the costs incurred to build the crash wall. Associate Judge Eckler ordered it to do so but it has not. The Developer was unable to isolate the cost of the crash wall from other services that were within the scope of work for the project, but it admitted that the crash wall construction was included in the hard construction costs amounting to $1,158,806, and that the costs incurred for constructing the crash wall were included in the closing adjustments.

[56] The Developer’s affiant, Mr. Tsimidis took under advisement and subsequently refused to answer any questions related to whether the amounts listed in packets 1, 2 or 3 were specifically paid to a utility service provider.

[57] Eventually, at the argument of the application, the Developer did concede that it had charged for amounts it paid to trades and contractors. It was not permitted to do so pursuant to the APSs.

Issue 3: Can the Court Look Behind the Certificate Provided by the Developer?

[58] The Developer says that pursuant to section 4.01(c)(v), it was not required to provide any back-up, that a Certificate was sufficient, and that a court cannot look behind it:

(v) The Purchaser acknowledges and agrees that a certificate from the Vendor or the Vendor’s engineers or architects confirming the Vendor’s costs as set out in this paragraph 4.01(c) and proportionate allocation share of same to each Purchaser shall constitute sufficient evidence for the purpose of calculating this adjustment item.

The Plain and Ordinary Meaning of this Provision / Commercial Reasonableness

[59] In the absence of s. 4.01(c)(v), the law holds that statements of adjustments “are not properly to be taken as proof of the legitimacy of numbers contained within them” and the disputing party “is entitled to confirmation of the figures”: Maritime Life Assurance Co. v. Royal Trust Corp. of Canada, 1990 CarswellOnt 4312, at para. 13; 400 East Mall GP Inc. v. Omolulu, 2024 ONSC 703, at para. 18.

[60] All s. 4.01(c)(v) says is that the Certificate shall constitute sufficient “evidence” (from the Developer) for the purpose of calculating the adjustment related to this issue. The use of the word “evidence” is relevant because in a court of law, evidence from one side can always be challenged or rebutted with other evidence.

[61] It does not say that the amounts set out in the Certificate could not be rebutted with evidence or that the Certificate is the conclusive final and binding statement, in all cases that cannot be challenged. This is relevant given the context of general law that holds that a purchaser is entitled to proof of the figures contained in a statement of adjustment. If the Developer wanted the effect of the Certificate to be that it could not be challenged, or rebutted, it should have negotiated clear and unambiguous language that said so.

[62] Further, the Developer’s interpretation is not commercially reasonable, particularly in the context of a consumer transaction where there is a standard form contract. If the Developer is correct that this standard form provision means that any Certificates it issues are the last word and that this cannot be challenged, then all developers could conceivably issue certificates in the millions of dollars, in respect of a purchase of a condominium in the hundreds of thousands of dollars and any purchasers would be obliged to pay them or be in breach. They could do this in situations where they have sold a unit and the market increases so as to get out of agreements and resell for a higher amount.

[63] To the extent there is any ambiguity as to whether the evidentiary force of the Certificate can be rebutted or not, I apply the principle of contra preferentum and interpret this provision in the manner most beneficial to the Purchasers such that the evidence provided by the Certificate can be rebutted.

[64] In circumstances where the Developer has already provided further information in the packets and the Executive Summary to explain what is in the Certificate, that show that it has charged for amounts to which it is not entitled, it has rebutted the Certificate on its own and s. 4.01(c)(v) is no longer applicable.

[65] It is not even the court or the parties that are seeking to go behind the Certificate: it is the Developer’s own evidence that calls the Certificate into question.

The Court May Look Behind the Certificate in Any Event in the Circumstances of This Case

[66] The Purchasers have referenced caselaw in the construction context that involves certificates of completion issued by architects, engineers or other third-party consultants.

[67] Some of this law has held that even where there are errors, a certificate of such completion will be binding unless there has been fraud, bad faith, where the person entrusted with the duty to make the certificate had knowingly and willfully disregarded his duty, or conduct that would make it inequitable to permit a party to rely on the certificates: Federated Contractors Inc. v. Ontario Realty Corp., 2007 CarswellOnt 679, at para. 39; Croft Construction Co. v. Terminal Construction Co., at p. 252; Pentad Construction Inc. v. 2022988 Ontario Inc., 2021 ONSC 824, at paras. 93 and 162; Rock Construction & Management Ltd. v. Ganatra Holdings Ltd., 2004 CarswellOnt 1095 (Div. Ct.), at para. 26; Kembic Construction Inc. v. Trustees of the Congregation of King Bible Church, at paras. 7-9.

[68] In Lawhill Limited v. Ontario (Realty Corporation), at paras. 622-631 & 639, the court held that the submission of false and exaggerated invoices to the payment certifier by the claimant to support its claim was sufficient to disentitle the claimant from relying on the certificate.

[69] I note here that the above cases were all in the context of construction cases where the certificate in question was agreed to be provided by an independent third party like an architect or engineer. This case is not the same as it involves the Developer itself providing the Certificate. In such case, because the Certificate is provided pursuant to the Developer’s contract with the Purchasers, there would also be a duty of honest good faith performance that is imported into the preparation of the Certificate. The parties would reasonably expect that the Developer has provided the information in the Certificate, in compliance with the provision: Bhasin v. Hrynew, 2014 SCC 71.

[70] I am satisfied that there has been bad faith on the part of the Developer, and that it would be inequitable to permit it to rely upon a Certificate that it is now clear includes charges that the Developer was not entitled to pass on pursuant to the APSs. The shifting explanations by the Developer are important here.

[71] The Statement of Adjustments initially sent stated that the proportionate charges were for “utility meter installation charges” in respect of electrical, gas, water and sanitary, and permit fees in accordance with s. 4.01(c)(iv). If these were meter installation charges, then this would have been in accordance with s. 4.01(c)(iv). This was misleading because it represented that the main costs were for meter installation in respect of these utilities and yet subsequent information provided by the Developer showed that the charges were not actually for meter installation. The Developer would have known this when it prepared this Statement of Adjustments.

[72] When questions were asked, it then provided a Certificate that then added the following description of the charges which were also for “installation and connection charges and a proportionate share of all water, sanitary, drain, and sewer infrastructure, installation, connection and energization costs” without specifying who these were paid to. Again, the Certificate specified that the costs were incurred pursuant to s. 4.01(c)(iv) which would imply to the Purchasers that these amounts were paid to the Municipality and utility service providers, but again this was false. The omission of to whom these amounts were paid is relevant.

[73] Then, the Developer provided the packets that did not contain any reference to meter installation costs which it previously said had been included in these charges.

[74] The Developer also sent the following email to Ms. Trigiani which significantly misstated what the Developer was entitled to pursuant to s. 4.01(c)(iv):

The Clarkson Agreement of Purchase and Sale provides for all costs pertaining to municipal development charges, parkland levies, education, and all procurement and connection of utilities and related services to be borne by the purchasers and reimbursed by the Vendor. This is not limited to meter costs. Parties, by virtue of the execution of the Agreement of Purchase and Sale, have acknowledged responsibility for these costs associated with the engineering, installation, and connection of such necessary services. [Emphasis added.]

[75] Nowhere in s. 4.01(c)(iv) does it reference “procurement” charges, “engineering” costs or “all” costs. Indeed, s. 4.01(c)(iv) is drafted in a manner that clearly shows it is not all costs but limited to those that the Developer paid the Municipality or utility service providers and the cost of meter installation.

[76] In conclusion, the Developer has consistently ignored the requirements in section 4.01(3)(iv), while representing that amounts were lawfully charged pursuant to s. 4.01(3)(iv). It billed for matters it was not entitled to bill for under the APS. These are not minor differences. These are significant matters in the millions of dollars. In doing so, it did not act honestly, impartially, or in good faith. As such, it cannot rely on the Certificate.

Issue 4: Does the Limitation of Liability Clause Apply?

[77] The Developer relies upon s. 8.07 of the APS which provides as follows:

Notwithstanding anything contained to the contrary in this Agreement, but subject always to the Tarion Addendum, all rights, remedies and recourses of the Purchaser in connection with this Agreement and the transaction resulting therefrom (and whether arising, based or founded in contract, tort, equity or otherwise) for any default of the Vendor hereunder are limited solely to the return of the deposits paid by the Purchaser pursuant to this Agreement and the Purchaser shall have no remedy or claim whatsoever against the Vendor for economic loss, expectation damages or any other damages whatsoever whether arising, based or founded in contract, tort, equity or otherwise. [Emphasis added]

[78] In assessing whether a limitation of liability clause is applicable to a party’s claim for damages pursuant to a contract, the Purchasers invoke the test from Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4, paras. 122-123, which asks the following: (a) as a matter of ordinary contractual interpretation, does the limitation of liability clause apply to the circumstances established in the evidence?; (b) If yes, was the limitation of liability clause unconscionable at the time the contract was made?; and (c) If no, should the court decline to enforce the limitation of liability because of an overriding public policy concern which outweighs the very strong public interest in the enforcement of contracts?

The Limitation of Liability Clause Does Not Apply Based Upon Ordinary Principles of Contractual Interpretation

[79] The exclusion clause does not apply to the circumstances here because applying the exclusion clause to this matter would be inconsistent with the Tarion Addendum, which the exclusion clause specifically says it is subject to.

[80] Section 2.02 of the APSs also states that the Tarion Addendum forms part of the APS.

[81] Section 13 of the Tarion Addendum also provides that the Tarion Addendum forms part of the APSs and that it prevails if there is any conflict between the provisions of the APSs and the Tarion Addendum:

The Addendum forms part of the Purchase Agreement. The Vendor and Purchaser agree that they shall not include any provision in the Purchase Agreement or any amendment to the Purchase Agreement or any other document (or indirectly do so through replacement of the Purchase Agreement) that derogates from, conflicts with or is inconsistent with the provisions of this Addendum, except where this Addendum expressly permits the parties to agree or consent to an alternative arrangement. The provisions of this Addendum prevail over any such provision. [Emphasis added]

[82] Section 8 of the Tarion Addendum provides that only items set out in Schedule B to the Tarion Addendum are permitted to be included by way of adjustment. It further says that if the vendor charges an amount by way of adjustment that is not permitted, then the vendor must readjust:

8. Adjustments to Purchase Price
   Only the items set out in Schedule B (or an amendment to Schedule B), shall be the subject of adjustment or change to the purchase price or the balance due on Closing. The Vendor agrees that it shall not charge as an adjustment or readjustment to the purchase price of the home, any reimbursement for a sum paid or payable by the Vendor to a third party unless the sum is ultimately paid to the third party either before or after Closing. If the Vendor charges an amount in contravention of the preceding sentence, the Vendor shall forthwith readjust with the Purchaser… [Emphasis added]

[83] As noted, there is an identical provision to s. 4.01(c)(iv) in s. 9 of the Tarion Addendum. There is no provision in the Tarion Addendum that the Developer referenced that would have permitted it to charge by way of adjustment the amounts that it paid to contractors and trades in respect of infrastructure and energization costs. Pursuant to Schedule B of the Tarion Addendum it could have negotiated a specific provision to permit it to recover costs paid to contractors, trades and other third parties, but the Developer failed to do so. Therefore, pursuant to s. 8, these cannot be charged.

[84] Therefore, the Purchasers are able to seek to have the Developer readjust pursuant to s. 8 of the Tarion Addendum.

[85] Application of the exclusion clause in this case would contradict the Tarion Addendum which permits readjustment if the Developer charges for amounts to which it is not entitled. The exclusion clause is both subject to the Tarion Addendum and the Tarion Addendum prevails if there is a conflict. Therefore, the exclusion clause does not apply.

It Would Be Unconscionable to Apply the Limitation of Liability Clause Here

[86] When analyzing the second part of the Tercon test, the court may find the clause was unconscionable where there was “unequal bargaining power between the parties”: at para. 122.

[87] This is the case here. If this provision would shield the Developer for blatantly charging for significant amounts to which it is not entitled, then this exclusion clause was unconscionable at the outset.

The Court Should Decline to Enforce the Limitation of Liability Because of an Overriding Public Policy Concern

[88] In analyzing the third part of the Tercon test, courts have held that sophisticated parties cannot contract out of liability for deceitful or fraudulent conduct: NEP Canada ULC v. MEC OP LLC, 2021 ABQB 180, para. 922.

[89] The Home Construction Regulatory Agency provided an advisory bulletin where it indicated that it expects price adjustment clauses to be drafted in a way that is clear to purchasers and that is easily calculable. Wording that is not sufficiently clear and specific may be determined to be misrepresentation and false advertising. Applying the exclusion clause to this case would result in the developer having been able to get away with charging amounts to which it was not entitled and that were not clearly included in the APS’s.

[90] Therefore, there is an overriding public policy interest in preventing developers from escaping liability where they secretly and not transparently charge for amounts to which they are not entitled, which outweighs the very strong public interest in the enforcement of contracts.

Issue 5: Are the Purchasers Entitled to Be Reimbursed for the $800 Some of Them Paid in Exchange for Closing Date?

[91] When the Developer offered to extend the closing date to Ms. Trigiani, it indicated that it would be without penalty. Then, the Developer sought to impose an $800 charge, and as such, she did not opt for that.

[92] Some Purchasers did pay this.

[93] The Developer cannot charge this amount because the entire reason why some of the Purchasers needed an extension was that the Developer was seeking to charge them amounts well outside their reasonable expectations and not in accordance with the APSs so that they needed additional time.

[94] The Developer cannot breach the APSs in this way, create a need for the Purchasers to extend the closing date to acquire the necessary funds for closing, and then charge them for that extension that was only required because of its breach.

Issue 6: Is This Matter Appropriately Heard by Way of Application?

[95] One of the Developer’s main arguments is that this matter should not be heard by way of Application because there are significant credibility issues. It argues that the Purchasers required expert evidence. I disagree.

[96] There are no material and complex facts in dispute that require expert evidence, the weighing of evidence or the weighing of evidence that would justify sending this matter to trial: Przysuski v. City Capital Holdings Inc., 2013 ONSC 5709, paras. 9 & 10.

[97] It is not even clear to me what material issues the Developer says are in dispute. The Developer’s own packets show that it charged the Purchasers for amounts it paid to trades, and contractors, and this was indeed admitted during the hearing. There is no expert evidence required to prove this.

[98] I also reject the Developer’s argument that there needs to be expert evidence on what “utility service provider” means in this industry and whether it could include trades and contractors. The plain and ordinary meaning of these words would not include trades and contractors. If the Developer asserts that this was an industry term of art and that it means something other than what it clearly says, then it should have provided this evidence. It cannot argue that expert evidence, and thus a trial, is required without even laying the evidentiary foundation for this.

[99] Furthermore, the question for the court is not what work was required for this type of development. The question is what work and what costs the Developer was permitted to charge the Purchasers which is a straight issue of contractual interpretation appropriately resolved by way of application pursuant to r. 14.05(3)(d) of the Rules of Civil Procedure, RRO 1990, Reg 194.

[100] The Developer also complained that the Purchasers only led evidence from one unit owner and that this was insufficient. With respect, this is not entirely accurate. The Purchasers also led evidence as to all the other APS agreements. A law clerk reviewed all the APSs and confirmed that the material terms were all the same. She prepared a chart setting out details as to each of the Purchasers’ purchase of their units and amounts, they were charged in respect of s. 4.01(c)(iv). They also led evidence in respect of the Certificate Ms. Trigiani received. This Certificate did not set out the charges that she had to pay, but rather, set out all of the charges that all of the unit owners would have to pay and which were then apportioned based upon their share of the common expenses. Therefore, this applies to all the Purchasers.

[101] Additional affidavits from all the Purchasers would have made no difference to the contractual interpretation issue or the issue related to what the Developer has sought to charge the Purchasers. If there were any material differences in this regard, then the Developer could have led that evidence.

Issue 7: What Is the Appropriate Remedy?

[102] In their Notice of Application, the Purchasers initially sought declarations that the amounts charged by the Developer were not permitted pursuant to s. 4.01(c)(iv) of the APS, the return of amounts improperly charged, an accounting of the amounts charged to the Purchasers, and a declaration that the Developer was holding the disputed amounts in trust for the Purchasers. They also sought a reference on damages if necessary.

[103] They sought to amend the relief requested to seek lesser declarations relating to the interpretation of the APSs and a reference on damages.

[104] This was necessary because the Developer refused to answer questions for the most part about amounts that it actually paid for meter costs and to the Municipality or to utility providers. Had the Developer answered these questions and itemized these amounts, this could likely have been determined at this Application.

[105] The Developer did not oppose this requested amendment or provide any argument as to why this would cause it prejudice. I grant the amendment.

[106] In any event, no amendment is required because the amended relief is relief that was already implicitly included within the declarations sought. That is, the declarations sought in the Notice of Application implicitly required the court to address the proper interpretation of the APSs and whether the Developer could charge the Purchasers for amounts paid to trades and contractors.

[107] The pleading already sought a reference on damages. This put the Developer on notice that if the factual matters could not be determined then only the legal issue would be determined, and that there would be a reference.

[108] In addition, Rule 38.10(1)(a) permits the court who hears an application to “grant the relief sought or dismiss or adjourn the application, in whole or in part with or without terms”.

[109] In addition, Rule 54.02 gives a judge the discretion to direct at any time a reference to determine an issue where a substantial issue in dispute requires the taking of accounts.

[110] Finally, in Solosky v. The Queen, the court addressed a matter where a party had sought declarations but then revised the wording in the declarations sought. The Supreme Court held that the issues should not be determined by the particular form of wording employed in the prayer for relief and permitted amended declaratory relief. The Court stated that “if the appellant is entitled to a declaration, it is within this Court’s discretion to settle the wording of the declaration”.

Conclusion

[111] As such I make the following declarations and orders:

1. THIS COURT DECLARES that under s. 4.01(c)(iv) A of Appendix A of the APSs the Developer is entitled to reimbursement of its costs to install in each Purchaser’s condominium unit a water, hydro and gas meter, including the installation and connection charge for each particular unit meter.

2. THIS COURT DECLARES that under s. 4.01(c)(iv) B of Appendix A to the APSs the Developer is entitled to reimbursement of each Purchaser’s proportionate share of all electricity, gas, water sanitary, drain and sewer infrastructure, installation, connection and energization costs (or security relating thereto) actually paid by the Developer to or deposited by the Developer with the City of Mississauga or utility service provider.

3. THIS COURT DECLARES that under s. 4.01(c)(iv) A and B, the Developer is not entitled to reimbursement of amounts that it paid to contractors, trades and other third parties in respect of utility infrastructure, installation, connection and energization costs.

4. THIS COURT ORDERS an accounting by the Developer of the amounts permitted to be charged to each of the Purchasers as adjustments to the purchase price in their respective agreements of purchase and sale, pursuant to paragraphs 1 and 2 of this Order, including the provision of invoices, proof of payment or other back-up documentation to establish what specific amounts charged to each of the Purchasers were permitted charges pursuant to paragraphs 1 and 2 above.

5. THIS COURT DECLARES that the Developer was not entitled to charge the Purchasers $800 to extend the closing date.

6. THIS COURT ORDERS AND DIRECTS a reference pursuant to r. 54.02 to determine what amounts were properly charged to the Purchasers by the Developer given the declarations granted in paragraphs 1, 2, 3 and 5 above and the accounting provided by the Developer in paragraph 4.

7. THIS COURT ORDERS that the reference will also determine which Purchasers paid the $800 fee to extend the closing date and which ones are thus entitled to reimbursement of this amount.

[112] I am seized of this reference. The parties may arrange a case conference to address the timing of this reference, whether pleadings will be required, what productions will be required and the date of the hearing.

[113] The parties may make cost submissions as follows: the Purchasers within 5 days and the Developer within 5 days thereafter.

Panagiota (Penny) Papageorgiou
Released: April 25, 2025