Court File and Parties

Court File No.: CV-19-00625286-0000
Date: 2025-02-10
Ontario Superior Court of Justice

Re: Naftali Rabinowitz, Plaintiff/Moving Party
-and-
2528061 Ontario Inc., Defendant/Responding Party

Before: Lorne Brownstone
Counsel:

• Eli Karp, for the Plaintiff/Moving Party
• Aoife Quinn and Devon Kapoor, for the Defendant/Responding Party
  Heard: January 16, 2025

Endorsement

Background

[1] On April 25, 2024, following a five-day trial heard at the end of January 2024, I released my decision and reasons dismissing the plaintiff’s action for specific performance with respect to an agreement of purchase and sale of land in Caledon, Ontario. The plaintiff did not claim damages, only specific performance. I found that the defendant had breached the agreement of purchase and sale, but that the plaintiff was not entitled to specific performance. I therefore dismissed his claim: Rabinowitz v. 2528061 Ontario Inc., 2024 ONSC 2357.

[2] The order has not been issued and entered. In the fall of 2024, the plaintiff sought a date for the hearing of a motion to re-open or reconsider my decision under rule 59.06(2)(d). That motion was heard on January 16, 2025.

[3] The plaintiff asks that I reconsider my decision and order specific performance. In the alternative, he asks that the trial be reopened, and that he be permitted to amend his pleading to claim damages. There is mention of moving to strike paragraphs of the statement of defence. The trial would then be adjourned for a damages hearing, or adjourned until after the court's decision is made regarding damages in the matter of The Rosseau Group Inc. v. 2528061 Ontario Inc., Court File No. CV-17-00003360-0000.

[4] The parties agree that the court has the discretion to alter or vary its decision until an order is taken out: Montague v. Bank of Nova Scotia, 69 O.R. (3d) 87 (C.A.). 59.06(2)(d)

Reconsidering Specific Performance

[5] The plaintiff argues that because the property was found to be unique by the court in Rosseau, I should reconsider and vary my decision regarding specific performance. A brief overview of that decision is as follows. In a 2022 decision, this court found that the defendant had breached an agreement of purchase and sale in respect of the same property that is at issue in this proceeding: The Rosseau Group Inc. v. 2528061 Ontario Inc., 2022 ONSC 486. In that APS, Rosseau was the purchaser. On appeal, the Court of Appeal concluded that there had been an error in the way damages had been measured. The Court sent the matter back for a damages hearing: The Rosseau Group Inc. v. 2528061 Ontario Inc., 2024 ONCA 7. Both the trial and appellate decision predated the trial of this action.

[6] In Rosseau, the court made a finding, based on extensive factual and expert evidence before it, that the property was unique to Rosseau, given Rosseau’s specific development requirements.

[7] The Rosseau decision was well known to the plaintiff and raised repeatedly by him at trial. Indeed, the Rosseau decision grounded his argument that damages would be inadequate, and that specific performance should therefore issue.

[8] The plaintiff now argues that it would be an abuse of process to permit the defendant to argue that the property is not unique, based on the finding of the court in Rosseau.

[9] At para. 73 of the trial decision in this case, I stated as follows:

The purchaser acknowledges that whether specific performance is to be awarded is a question rooted firmly in the individual facts of a case. The factors to consider include the nature of the property involved, the related question of the inadequacy of damages as a remedy, and the behaviour of the parties, having regard to the equitable nature of the remedy: Matthew Brady Self Storage Corporation v. InStorage Limited Partnership, 2014 ONCA 858, para 32. I will consider whether the property is unique, whether the circumstances of the transaction are unique, whether damages are inadequate, and whether the behaviour of the parties bears on the availability of the remedy in this case.

[10] Whether a property is unique is both an objective and subjective question. As I stated, “A property does not have to be a singular property to be unique, but it has to have qualities that make it particularly suitable to the plaintiff’s purposes and are difficult to replicate elsewhere: John E. Dodge Holdings Ltd. v. 805062 Ontario Ltd., para 60, aff’d 2003 52131 (ON CA).”

[11] I found that the plaintiff had “no idea” what type of property he wanted to purchase, and the property was not unique for the plaintiff’s purposes. I further rejected the plaintiff’s submission that damages were inadequate, and I found that specific performance was not appropriate, having regard to the equitable nature of the remedy, in part owing to the plaintiff’s behaviour toward the transaction.

[12] Whether the property was unique to the Rosseau group is immaterial to a determination of whether specific performance is appropriate in this case. Issue estoppel has no application to the distinct legal analysis required to be performed in each of the two cases. The property is not declared to be unique “at large” for all parties and all purposes. There is no miscarriage of justice or abuse of process in different conclusions reached by different courts with different parties on different facts. Even if the property were objectively unique, the remainder of the specific performance test would remain unsatisfied by the plaintiff.

[13] The plaintiff’s request that I reconsider and amend my decision with respect to specific performance is dismissed.

Amending the Pleading to Seek Damages

[14] The plaintiff asks in the alternative that he be permitted to amend his pleading to claim damages.

[15] He relies in part on rule 26.01, which requires a court to grant leave to a party to amend a pleading absent prejudice to the defendant that cannot be compensated for by costs. The plaintiff submits that there is no prejudice to the defendants.

[16] As noted, the parties agree that the court has discretion to reopen the case. However, that discretion is to be exercised ‘“sparingly and with the greatest care” so that “fraud and abuse of the Court’s processes” do not result’: 671122 Ontario Ltd. v. Sagaz Industries Canada Inc., 2001 SCC 59, para 61, citing Clayton v. British American Securities Ltd..

[17] At trial the plaintiff made a tactical decision to seek only specific damages, arguing that damages were not suitable and impossible to calculate. The following exchange took place between the court and plaintiff’s counsel during closing argument:

THE COURT: Just one question on that point, if the Court finds that -- that the agreement was still in existence, that it could have been closed, but that specific performance is not the appropriate remedy, then there's no -- there is no relief requested for damages, therefore the court dismisses the -- that's the end of the claim from your client's perspective?
MR. KARP: Yeah, we're not -- and I want to say this too, there's a big -- there's a big award of damages that's upcoming from Rosseau Group, in my submission. Now, my friend will say that it's not -- it hasn't crystalized yet, and there's no evidence about the solvency of -- of the company, you know, who knows how much they're going to have to pay. But it's clear that damages in this case aren't an adequate remedy, in addition to all the other reasons that I told you before, because of this large damages award, okay. If -- if the court awards specific performance, then we will take the property.
THE COURT: The question is, what do you say if the Court doesn't award specific performance?
MR. KARP: We haven't -- we haven't brought an action for damages.
THE COURT: That's the end?
MR. KARP: Yeah.

[18] The plaintiff made a strategic decision to seek only specific performance. Both parties planned and executed their trial, and made all their litigation decisions, based on this choice made by the plaintiffs. I disagree that amending his pleading and seeking damages at this late stage would not cause prejudice to the defendant, having responded to, strategized, prepared, and executed a defence to the claim for specific performance alone.

[19] I also disagree with the plaintiff that it is in the interests of justice to permit the pleading amendment and the re-opening of the case. The interests of justice comprise elements of finality and order. The plaintiff relied on the Rosseau decisions in support of its argument that specific performance was the only appropriate remedy. I rejected that argument. Allowing a litigant, having lost on his original strategy, to do an about-face and change tactics after a decision is rendered, absent a very good reason, does not serve the interests of justice. No good reason for the change exists here.

[20] In sum, I agree with the plaintiff that I have the discretion to permit the amendment and I acknowledge that there are cases he has placed before the court where the courts have done so. For the reasons above, I find that the interests of justice in this case clearly and strongly favour refusing to permit the amendment of the nature requested at this late stage. The abuse to the court’s process would be to permit the amendment at this stage in the circumstances of this case.

Disposition and Costs

[21] The plaintiff’s motion is dismissed.

[22] Fixing costs is a discretionary matter. A non-exhaustive list of factors to consider are contained in Rule 57. Ultimately, the court must fix costs that are reasonable and proportionate.

[23] The defendant’s costs on a partial indemnity scale are $29,434.01. The plaintiff’s are $11,339 plus disbursements of $339. The plaintiff argues the defendant’s costs are disproportionate. There were no affidavits or cross-examinations, simply a factum, and the matter was straightforward. The plaintiff should not have to pay for new counsel to get up to speed on the trial, which they will need to do for the appeal in any event. The defendant counters that research was required, as the plaintiff raised several different paths to the relief he was seeking. The record was extensive, and time was efficiently allocated between the junior and senior counsel involved.

[24] The plaintiff put forth an extensive record on the motion, comprising the evidence at trial and the transcripts, as was appropriate. The defendant was required to familiarize itself with the record for purposes of properly responding to the motion. The notice of motion was amended twice. The relief sought was of significant moment to the parties. In these circumstances, I find the time spent and the fees claimed by the defendant to be reasonable and proportionate. The amount ought to have been in the contemplation of the plaintiff.

[25] The plaintiff shall pay the defendant costs on a partial indemnity scale in the amount of $29,434.01.

Lorne Brownstone

Released: February 10, 2025