Court File and Parties
COURT FILE NOS.: CV-21-00671007-0000 CV-21-00671007-00A1
SUPERIOR COURT OF JUSTICE - ONTARIO
RE: CHRISTOPHER M. PONESSE and KATHERINE E. RANKIN, Plaintiffs
AND:
ASTORIA HOMES INC. AND RITELAND DEVELOPMENT CORPORATION, Defendants
AND:
THE CORPORATION OF THE TOWN OF CALEDON, Third Party
BEFORE: Akazaki J.
COUNSEL: Robert Calderwood, for the Plaintiffs Matthew Barteaux, for the Defendants Sylvain Rouleau, for the Third Party, The Corporation of the Town of Caledon
HEARD: November 27, 2025
REASONS FOR JUDGMENT
OVERVIEW
1Christopher Ponesse and Katherine Rankin brought this summary judgment motion for an order enforcing an October 17, 2020, agreement of purchase and sale (“APS”) with Astoria Homes Inc. for a new country home on a 28-lot development in Caledon known as Hall's Lake Estates, for $2,530,000. Riteland Development Corporation owned the site and had applied to the Town for subdivision planning approval. Astoria and Riteland were controlled by Antonio Ferrara.
2Between Astoria’s February 2021 building permit application for the home, and the Town’s August notification that it approved the permit for issuance, Mr. Ferrara discovered dramatic increases in the cost of labour and material. On September 2, 2021, he instructed his realtor to inform Mr. Ponesse and Ms. Rankin that Astoria required a $400,000 price increase to start building the home, to reflect the estimated cost increases. Mr. Ponesse and Ms. Rankin refused and held Astoria to its bargain. On September 13, 2021, twelve days after the expiry of the September 1, 2021, “Vendor’s Cancellation Date” for Astoria to exercise a unilateral option to withdraw from the deal, Astoria issued a letter terminating the agreement.
3Despite having missed the cancellation date, the defendants argued that the repudiation was allowed because the APS either:
a) automatically terminated after 72 hours, because the purchasers had not provided notice of a lawyer’s opinion that they should back out of the deal, or
b) allowed Astoria to cancel the agreement at any time, provided it determined by September 1, 2021, without having notified the purchasers, that it was not going to be economically feasible.
4The court requires no trial to reject these defences. The agreement became binding on the purchasers after the expiry of the 72-hour cooling-off period. It became binding on the vendor after the expiry of the Vendor’s Cancellation Date. The contract wording cannot support the defendants’ interpretation. The only genuine issue is the appropriate remedy for the vendor’s breach.
5In granting judgment for the plaintiffs, I will grant an order for specific performance. The land is sufficiently unique that an award of damages would be an inadequate remedy. The order will require the defendants to transfer the property to the plaintiffs, for the balance of the purchase price after deducting the deposit and the current cost of building the home.
6I disallow the plaintiffs’ claim for additional abatements for the cost of financing the construction and for property tax on their existing home. These abatements are inconsistent with their preferred court order requiring the enforcement of the original bargain exchanging the purchase price for the transfer of the land and the construction of the building. Just as the APS was a fixed-price contract not providing adjustments arising from fluctuation of the builder’s input costs, the parties’ reasonable expectations as recorded in the agreement did not include adjustments for the purchasers’ financing or incidental costs caused by delay or breach.
7The Town of Caledon also moved for summary judgment to dismiss the defendants’ third-party claim for indemnity against liability to the plaintiffs, on the grounds that the undisputed facts and events gave rise to no viable case against it. The defendants’ case against the Town was that by requiring unnecessary site plan approval and by referring the issue to the conservation authority, its building officials unduly delayed the construction start and jeopardized the economic feasibility of the project. The municipality’s building officials owed Astoria a duty of care in negligence to process the building permit in a reasonable time. However, the scope of the duty of care cannot extend to the protection of builders’ profit margins against isolated instances of alleged excessive caution in the public interest to protect against regulatory non-compliance.
8Even if such an extension of the administrative duty could theoretically be tested at trial, the case against the Town is coterminous with the defence of the plaintiffs’ action. Both Astoria’s economic loss issue and the breach of the APS are anchored in Astoria’s failure to extricate itself from the APS. On both issues, Astoria was the only party with knowledge or ability to assess the impact of a few months on its construction budget. By offering new home construction at a fixed price, Astoria assumed the risks and enjoyed the benefits of input cost fluctuations. The theories of the defence and the third party claim are revisionist arguments that bore no relation to the undisputed chronology of unfolding events, including Astoria’s own conduct.
9In arriving at the conclusion that the plaintiffs are entitled to specific performance, subject to an abatement for construction costs, and that the Town is entitled to dismissal of the third-party claim, I will address the following issues:
- Summary judgment procedure
- Astoria’s Breach of Contract
- Remedies against the Defendants
- Caledon’s motion to dismiss the Third Party Claim
1. SUMMARY JUDGMENT PROCEDURE
10Rule 20 of the Rules of Civil Procedure, R.R.O. 1990, Reg. 194, governs summary judgment motions. Rule 20.04(2)(a) requires the court to grant summary judgment, if satisfied there is no genuine issue requiring a trial with respect to a claim or defence. In Hryniak v. Mauldin, 2014 SCC 7, [2014] 1 S.C.R. 87, at paras. 49-50, the Supreme Court of Canada’s guidance was that there will be no such genuine issue, if the record allows the court to: (1) make the necessary findings of fact, (2) apply the law to the facts, and (3) be satisfied that the process is a proportionate, more expeditious, and less expensive means to achieve a just result compared to a full trial. These principles are necessarily interconnected.
11If the court cannot determine whether a genuine issue requiring a trial exists after these three considerations, subrules (2.1) and (2.2) permit the use of additional fact-finding powers. These additional fact-finding powers are the weighing of evidence, evaluating credibility of a deponent, drawing reasonable inferences, and the direction of a mini trial of limited viva voce evidence: Hryniak, at para. 66. I need not resort to these additional powers. The few disputed facts can, in fact, be resolved by accepting at face value the defendants’ evidence on material facts and events such as the cost inflation and the necessity of a permit from the conservation authority. Otherwise, there was no genuine dispute over what happened.
12For the reasons below, the defendants’ contractual interpretation defences are untenable and do not require a trial to test that conclusion. I will also explain why the defendants’ third-party claim against the Town requires no trial for it to conclude with a dismissal.
2. ASTORIA’S BREACH OF CONTRACT
13The parties to the APS bargained for the purchase of a home to be constructed by Astoria. The purchasers paid the deposits on time. Astoria cancelled the contract on September 13, 2021, several clear days after the last day for it to cancel the agreement if it thought the project was not economically viable. Indeed, after the expiry of the cancellation period, its first approach was to demand a price increase. Astoria cancelled the agreement only after Mr. Ponesse and Ms. Rankin refused to budge on price.
14The court is not without some sympathy for the travails of Mr. Ferrara. He is not a big property developer. He came from the construction trade. His holding company, Riteland, purchased the lands for the entire development in 1995 for $385,000.
15The passage of the Oak Ridges Moraine Conservation Act, 2001, S.O. 2001, c. 31, presented both a headache and a commercial opportunity for Mr. Ferrara and his companies. The statute, protecting the surrounding area from further development, delayed subdivision approval and required Riteland to pursue an appeal to the Ontario Municipal Board. The Town eventually settled with Riteland and agreed on the right to subdivide. Despite these problems, the grandfathering of the property made it scarcer and allowed Riteland to develop the lands for a significant increase in value. Nevertheless, by selling homes on the drawing board, he had to expose the properties to the consumer market for fixed purchase prices. The input cost increases in question, however, had nothing to do with geography. Rather, the costs rose dramatically because the Covid-19 pandemic disrupted the labour market and the supplychain for building commodities such as lumber. Fortunately for Astoria, the plaintiffs were early buyers. Mr. Ferrara was able up the prices for subsequent sales.
16To justify Astoria’s repudiation of the APS, it advanced two defences: first, that it expired 72 hours after it was executed; second, that it allowed Astoria to cancel at any time, if Mr. Ferrara thought, prior to September 1, 2021, that he could not make a profit.
17The defendants argued that Schedule “S,” allowing the purchasers 72 hours to have the APS reviewed by a lawyer, required the purchasers to provide written confirmation of their lawyer’s approval of the form and content of the agreement, failing which the Agreement would be considered terminated. It stated:
Lawyers Approval This Agreement conditional for a period of seventy-two (72) hours from the date of acceptance by the Vendor (the “Approval Period”) upon Purchaser's solicitors approving the form and contents of this Agreement, at which time this Agreement shall become firm and binding unless, prior to the expiry of the Approval Period, the Purchaser shall have delivered notice in writing to the Vendor that this Approval Condition has not been satisfied in which event this Agreement shall end and all deposits shall be returned to the Purchaser, without interest or deduction.
The condition(s) set forth in this schedule are for the benefit of the Purchaser and may be waived by the Purchaser, by notice to the Vendor in writing prior to the expiry of the Approval Period.
18The defendants’ interpretation ran counter to what Schedule “S” stated. It clearly afforded the purchasers 72 hours to have the agreement vetted by their lawyers and to back out of it, on written notice. Upon expiry of that interval, it became “firm and binding” on the purchasers. The defence cannot be supported by any reasonable reading of the APS.
19The defendants urged a similarly counterfactual interpretation of para. 21 of Schedule “X” of the APS:
- In the event that the Vendor determines by September 1, 2021 (the “Vendor’s Cancellation Date”), in its sole, absolute and arbitrary discretion, that it has not received approval from an approving authority for subdivision plan, plans or other development agreements, or if it is determined that it is not economically or otherwise feasible for it to construct or sell the units or otherwise proceed with the project, then in such event the Vendor, at its option, shall have the unilateral right of terminating this Agreement, upon written notice to the Purchaser, and in accordance with Tarion's early termination conditions, as set out in Schedule Tarion “A” to this Agreement, and the Vendor shall thereupon return to the Purchaser all deposit monies theretofore paid, and this Agreement shall thereupon be null and void, and of no further force and effect and the Vendor and any agent shall not be liable for any costs or damages incurred by the Purchaser in connection with this Agreement.
20The APS had an anticipated closing date of March 16, 2022, and an outside closing date of March 16, 2023. The above para. 21 allowed Astoria absolute discretion, until September 1, 2021, to cancel the agreement and refund the deposit on written notice to the purchasers, if the Town had not granted subdivision plan approval or if it became economically or otherwise unfeasible to construct the home. The grounds for excusal were immaterial, once the date passed. After the Vendor’s Cancellation Date, para. 21 provided no way for Astoria to terminate the APS unilaterally.
21The defendants argued that this provision permitted Astoria to terminate the APS if Astoria determined that the project was no longer feasible by September 1, 2021. Thereafter, Astoria could terminate the agreement at any time of its choosing by notifying the purchasers in writing and in accordance with Tarion’s early termination conditions set out in Schedule Tarion ‘A.’ This deconstruction of the paragraph not only defied commercial sense, but it also ignored the grammatical structure of the paragraph. It is a whole run-on sentence, in which the clause describing the vendor’s determination that certain conditions exist is subordinate to the dominant and legally operative clause that the vendor’s option to terminate the APS is triggered “upon written notice to the Purchaser.”
22To read para. 21 as the defendants urged would mean that Astoria could decide before September 1, 2021, that the project was no longer viable at the price negotiated with Mr. Ponesse and Ms. Rankin, but keep the purchasers bound by the APS until the vendor chose to cancel it. Such a twisted reading would allow Astoria to keep the purchasers in the dark and clinging on to liability to close, only to permit Astoria later to resell it for a higher price.
23Counsel for both sides stated there was a dispute about the form containing the early termination conditions. In the APS filed for the motion, the only attached document bearing such a title bore the subtitle “Types of Permitted Early Termination Conditions,” in which s. 4 appeared to be the only relevant provision:
4, For greater certainty, the Vendor is not permitted to make the Purchase Agreement conditional upon:
(a) receipt of a building permit;
(b) receipt of an [sic] Closing permit; and/or
(c) completion of the home.
24Beyond the prohibition against Astoria’s reliance on the delay of a building permit, the consumer-protection features of the Tarion early termination conditions were unnecessary to interpret the application of para. 21. The court does not require the consumer-protection impact of the Tarion conditions to conclude that the defendants’ interpretation of para. 21 was wholly unreasonable. Applying ordinary commercial contract law, I construe it as allowing Astoria a wide discretion to cancel until September 1, 2021, but not afterward.
25There being no viable legal excuse for failing to build the home and to transfer the property to the purchasers, the defendants are liable in breach of contract. The only genuine issue arising from that outcome is the remedy. Is a trial required to determine the remedy? I will address this question next.
3. REMEDIES AGAINST THE DEFENDANTS
26The plaintiffs sought an order for specific performance requiring the defendants to carry out the sale of the property, subject to an abatement of the purchase price because Astoria did not build the house. They rely on M & M Homes Inc. v. 2088556 Ontario Inc., 2019 ONSC 5403, 12 R.P.R. (6th) 297, at para. 94, aff’d 2022 ONCA 364, leave to appeal to S.C.C refused, 40299 (May 11, 2023); Tropiano v. Stonevalley Estates Inc. (1997), 36 O.R. (3d) 92 (Gen. Div.), at p. 98, for the proposition that damages for breach of contract can be awarded as abatement against the purchase price. In Tropiano, Sharpe J. (as he then was) awarded specific performance against the property developer as well as damages for the cost of building the home in accordance with the existing plans and specifications, as adjusted by the purchase price in the agreement. Part of the reasoning for the abatement remedy was the general reluctance of courts to order specific performance of obligations requiring ongoing supervision.
27As in Tropiano, the drawings for the plaintiffs’ home already exist. They were filed with the Town in the permit application. The design of the home reflected the features and specifications they negotiated with Astoria. To avoid any issue regarding copyright infringement, the court can order Astoria to transfer the licence.
28Long ago, the common law regarded every piece of real property as unique, thereby making specific performance available as a remedy in every breach of contract for the sale of land. In the contemporary real estate market, the mass production of urban residential housing led to the courts’ reluctance to order specific performance absent a fair, real, and substantial justification by showing damages would be inadequate for the loss of the opportunity to acquire the property, to the extent that a substitute would not be readily available: Lucas v. 1858793 Ontario Inc. (Howard Park), 2021 ONCA 52, 25 R.P.R. (6th) 177, at para. 69; 9725440 Canada Inc. v. Vijayakumar, 2023 ONCA 466, 167 O.R. (3d) 734, at paras. 24-26.
29In 9725440 Canada Inc., at paras. 27-30, the Court of Appeal stated that the uniqueness analysis was very fact-specific and included both objective and subjective elements. Investment properties are not good candidates for specific performance, whereas owner-occupied homes are. The subjective aspect considers the property from the plaintiffs’ point of view at the time of contracting. The objective aspect requires the plaintiffs to demonstrate the property’s special characteristics.
30Since 2018, the couple had been planning to move to the countryside from their Etobicoke home. They cited a long list of factors such as Ms. Rankin’s childhood summers at her grandfather’s farm, the couple’s workplaces and commuting, recreational amenities in the community, and the protection of the Oak Ridges Moraine (“ORM”) from dense urban sprawl. Hall’s Lake Estates was a small 28-home development surrounded by conservation lands near a horse farm. The couple learned that the development had been approved for subdivision only because the defendants had applied for planning permission prior to the Oak Ridges Moraine Conservation Act. The plaintiffs decided to submit an offer on lot 11, because of its large size and location on a hillside. Its location commanded a $250,000 the purchase price increase. The couple accepted the premium.
31The statement of defence indeed echoed the plaintiffs’ evidence of the uniqueness of the property. The defendants pleaded that Riteland had applied for development approval in 1998. Protracted delays by the Town caused Riteland to appeal to the Ontario Municipal Board. In 2015, it reached a settlement with the Town. After several years of installing services and roads, Riteland set up Astoria as the vendor and constructor of the homes. Mr. Ferrara’s perseverance demonstrated his recognition that his original land speculation had paid off. The conservation legislation made houses on the grandfathered land scarcer and more lucrative.
32In February 2021, Astoria applied for a building permit and expected it to be issued by the end of March. Instead, the Town required Astoria to obtain additional approvals from the Toronto Region Conservation Authority. Astoria complied by submitting its ORM site plan application. The TRCA issued a permit on August 17, 2021, followed by the Town’s approval on August 20. On August 24, 2021, the Town notified Astoria that a building permit was ready to be issued upon payment of development charges. Astoria paid these charges on September 2, 2021, and the Town issued the building permit on September 20, 2021.
33The defendants relied on its decade-long struggle with the Town, including the delays in 2021, as justification for pulling out of the deal with the plaintiffs and for its third-party claim against the Town for rendering the project economically unfeasible. I will deal with that claim in the next section of my reasons. On the topic of uniqueness, the defendants’ pleadings and evidence of these regulatory obstacles aligned with the plaintiffs’ position that properties like the one they agreed to purchase were in sufficiently short supply to satisfy the requirement that a substitute property was not readily available at the time the parties entered the APS and up to the date of breach.
34The defendants submitted two types of evidence to support their position that the property was not unique: a 2017 housing study by the Town providing a snapshot of home occupancy data, and a real estate appraiser’s valuations based in part on comparable homes sales and the cost to build. The fact that similar properties exist in the area and come up for sale did not materially contest the special appeal of the property to the plaintiffs. Indeed, the appraiser’s report corroborated the likely shortage of similar properties because of the regulatory constraints of conserving the ORM against property development. Although there are many factual elements to the uniqueness issue, I am not persuaded that the facts would come out any differently at a trial. Virtually every point is based on uncontested events related to the difficulties encountered by the defendants in developing the land and by the plaintiffs in finding a family home meeting all their requirements.
35No trial is required to prove that the property was unique, in the sense of a substitute not being readily available, on both subjective and objective criteria. The Hryniak principles of proportionality and access to justice thus favour the granting of summary judgment for specific performance resulting from Astoria’s breach of the APS. The plaintiffs pursued this home as part of a seven-year search. The weak evidence presented by the defendants on this point cannot justify a trial to hold out for an award of damages.
36The fact that Riteland was not a named party to the agreement does not impede the remedy of specific performance. The defendants did not press this point, but I will deal with for the sake of completeness.
37Astoria entered the APS as the vendor of the lot and agreed either to acquire title to the property from the “Subdivider” on closing, or to cause it to convey title directly to the purchasers. Although not mentioned by name, the references to the “Subdivider” and the practice in the land development industry established that Riteland was an unnamed party to the APS. Riteland was bound by the obligation in the APS to transfer title to the purchasers, either through Astoria or directly: Nordlund Family Retreat Inc. v. Plominski, 2014 ONCA 444, 373 D.L.R. (4th) 494, at para. 74; M & M Homes Inc., at para. 46; and Friedmann Equity Developments Inc. v. Final Note Ltd., 2000 SCC 34, [2000] 1 S.C.R. 842, at paras. 15-18.
38To relieve Riteland of the obligation to transfer title would be entirely contrary to the commercial reality of the APS, in which Astoria covenanted to convey title to a home it was to build. The defendants denied any impropriety in selling the lots through separate corporations, one for the land and the other for the building. Whether or not there was impropriety is not determinative of the issue, because the outcome is the same. As the Court of Appeal stated in Norlund, at para. 74, the identity of the legal owner was immaterial to the purchase and sale transaction. Riteland was the seller of the land. The court can order it to convey the land to the plaintiffs, if they pay the appropriate consideration to Astoria.
39Mr. Ponesse’s affidavit, adopted by Mr. Rankin, stated:
- Katherine and I are ready, willing and able to complete the APS in accordance with its terms on a closing date determined by this Honourable Court. More particularly, we have sufficient income and assets to complete the purchase transaction. In addition, we are also ready, willing and able to accept a transfer of the Property only in exchange for our payment of the purchase price under the APS, less the deposit already paid and less an abatement (or damages) in an amount equal to the amount that it will cost Katherine and me to build the Dwelling on the Property ourselves thereafter (inclusive of our carrying, legal and any other related costs), as determined by this Honourable Court.
40Despite the first sentence, neither side considered a mandatory order forcing Astoria to build the home a viable option, albeit for different reasons. The plaintiffs do not trust Mr. Ferrara to cooperate with the plaintiffs in a court-ordered construction project. Mr. Ferrara stated that his age and health do not allow him to proceed with the project without hardship. If the court does not order Astoria to build the home, what is left of specific performance is the transfer of land with a reduction in the purchase price for the purchasers’ assumption of the cost of the building. Whether characterized as contractual expectation damages or as an abatement, the court’s remaining task is to determine the amount.
41The easiest abatement of the purchase price is the adjustment for the deposits already made. The purchasers deposited a total of $126,500, with the second one paid after the completion of the architectural plans. This fact is further relevant, because the plaintiffs have paid for the plans. The order for specific performance against Astoria should therefore include an assignment of a licence to use the plans to build the home.
42Beyond the deposits, the plaintiffs sought $2,056,030.57 for the estimated cost of construction, $48,125.00 for extra borrowing costs during the 11-month period of construction arising from their inability to sell their current home (in the approximate amount of $700,000.00), $37,693.89 for extra borrowing costs for a construction loan, and $9,569.36 for additional property taxes during the same period. The plaintiffs also sought to leverage a potential costs award to reduce the price even further.
43The defendants countered the evidence of the plaintiffs’ expert building cost estimate with that of their appraiser. The appraiser used estimating software called Corelogic to derive a range between $1,403,250.00 and $1,459,380.00. The plaintiffs objected to reliance on this evidence, chiefly on the grounds that the appraiser lacked expertise in the building industry and that he had not worked with the actual building plans. However, the more concrete reason for rejecting the Corelogic figures is that the defendants’ evidence of the building cost inflation and appraised land value lead to a figure resembling the building cost estimate prepared by the plaintiffs’ expert.
44The defendants’ appraiser retrospectively valued the land alone as of October 2020, in the range of $816,000.00 to $918,000.00. Using the bargained purchase price of $2,530,000, this would have made the market value of the construction, including Astoria’s profit, between $1,612,000 and $1,714,000 as of the time of the APS. If Riteland’s land value were the lower figure, Astoria’s construction price would have been higher. If the land value were the higher figure, the construction price would have been lower. At either end of the land value input, the construction price for Astoria would not have been economically tenable.
45Mr. Ferrara’s evidence was that Astoria required a price increase of $400,000 to $2,930,000, to reflect the increase in construction cost. Thus, in 2021, the economics dictating Astoria’s price increase and refusal to complete the construction would have produced figures for the cost of construction, including profit, between $2,012,000 and $2,114,000, all based on the defendants’ own evidence. The plaintiffs’ expert’s $2,056,030.57 figure falls only slightly lower than the midpoint of the range.
46An analysis using the price in the APS against the defendants’ estimates of the fair market value of the land produces an elegantly just formula for deriving the abatement. The method would use the price of construction, inclusive of labour, material, and Astoria’s profit, based on the costing estimates of Astoria itself, as calculated by Mr. Ferrara. His demand for a $400,000 price increase resulting from increased cost of labour and materials, his decision to risk losing this lawsuit, and his appraiser’s land valuation, all derive a substantial agreement between the $2,056,030.57 figure presented by the plaintiffs’ expert and a straightforward arithmetical tabulation of the defendants’ evidence at face value.
47The figures in evidence in the motion, if presented at trial, would still be estimates. The question for the court today is whether a trial is required to derive a more reliable and precise figure for the abatement. I find that a trial is not required. The trial judge will be in no better position than this motion judge to bring the cleaver down the middle of the range. Heeding the Supreme Court’s advice in Hryniak, the delay and expense of a trial would obliterate any reasonable variations in the figures. The plaintiffs’ construction estimator only produced a more current and more precise figure, compared to the $2,012,000 and $2,114,000 range derived from Astoria’s 2021 price increase demand. I therefore accept the amount of $2,056,030.57 as the market construction cost component of the price abatement.
48Finally, the court must consider the plaintiffs’ demand for an abatement based on financing and property tax. I appreciate that a party’s breach of contract can cause the party not in breach to incur economic damages associated with delayed performance. In the plaintiffs’ circumstances, they were going to use the equity in their existing home for about $700,000 of the final price on closing and finance the remainder by borrowing from a lender. I accept the idea that the plaintiffs’ carrying and financing costs for realizing their dream residence could have increased, because of depressed housing prices in Etobicoke and higher interest rates. Enforcement of the fixed-price contract will allow them to build the home and allocate the cost increase to the vendor. The same logic applies to any changes in the purchaser’s financial ability (had interest rates lowered since 2020, Astoria would not be permitted to increase the price).
49The restoration of the parties’ original bargain requires Astoria to pay or offset damages equivalent to that amount, but it does not entail compensating the plaintiffs for extracontractual damages. Unlike the third party claim against Caledon, the plaintiffs’ case is not a tort claim.
50Specific performance shall be ordered against Riteland as the owner of the property and against Astoria as the constructor, to transfer all right and title to the lands and any licences, permits, contracts, and other instruments short of requiring Astoria to complete the building. On closing, the plaintiffs shall pay Astoria the net amount of $347,469.43, being the purchase price of $2,530,000 less the deposit of $126,500 and the construction costs of $2,056,030.57.
51Because the purchase price was indivisible between the price of the land and the price of constructing the building, the abatement shall be applied to the whole purchase price.
52Before leaving this point, I observe that the net purchase price represents about $500,000 less than the current market value of the land. The resulting loss the defendants must absorb is remarkably near the $400,000 loss figure Mr. Ferrara sought to avoid, when adjusted for four years of additional increases. By requiring Riteland to convey the land for $347,469.43, the order for specific performance has the same economic consequence to the defendants as an award of damages. In contrast, an award of damages of $500,000 would not adequately compensate the plaintiffs for the loss of the home on which they have pinned their hopes and dreams for some time.
4. CALEDON’S MOTION TO DISMISS THIRD-PARTY CLAIM
53The defendants’ third-party claim seeks contribution and indemnity for any liability to the plaintiffs. As in the case of other positions taken by the defendants, the core pleading regarding Astoria’s termination of the APS was unfortunately counterfactual:
- When it became apparent that Caledon would not issue a building permit for Lot 11 on a timely basis, Astoria had to terminate the agreement of purchase and sale with the Plaintiffs. The termination led to the claim made against these Defendants by the Plaintiffs. Had Caledon acted properly, exercised their authority in good faith and issued the building permit on a timely basis, then the agreement of purchase and sale could have been performed and the Defendants would not be subject to the Plaintiffs' claim.
54The Town notified Astoria that the permit would be issued, once the development charges were paid. Astoria then paid the charges. As pleaded, the stated cause of Astoria’s termination of the APS lacks a foundation in fact.
55Shifting away from the pleaded facts, the defendants’ case at the motion was that, irrespective of the justification for terminating the APS in September, the Town’s unreasonable delay in processing the building permit application caused Astoria to suffer significant input cost increases between March and September 2021. Contrary to the pleading in para. 6 of the third party claim that the Town had “refused to issue any building permits,” citing the necessity for site plan approval and approval from the TRCA, the Town had listed ORM approval or exemption among several requests for further information and clarification, including driveway width, architectural and structural elements, manufacturer’s specifications, water service, drain water heat recovery, HVAC, and the septic system.
56Instead of being a ground for termination of the APS, Astoria complied with the ORM planning permission requests, as part of the Town’s process to issue the building permit. On October 14, 2022, during permit applications for other lots, the Town’s Chief Building Official circulated an email stating that the Town did not require ORM site plan approvals. Astoria seized on this after-the-fact event as an admission of municipal negligence causing the delay of the start of building of the plaintiffs’ home on Lot 11.
57Mr. Ferrara deposed that, had the Town not insisted on the ORM approvals and issued the building permits in March 2021, “Astoria would have been able to build the house for the Plaintiffs on time and on budget.” The first part of this statement is incorrect, because the APS provided for up to one year of delayed closing until March 16, 2023. The second part reflected Mr. Ferrara’s true reason for attempting to back out of the deal. Nevertheless, he provided no budget as a basis for comparison between March and September of 2021, to back up his statement that cost increases “made it impossible for Astoria to build the house for the amount set out in the Agreement.”
58The Town argued that, irrespective of the rationale for its 2022 change in position, the defendants still required a TRCA permit. The March and April 2021 deficiency letters from the Town’s building department identified that lack of site plan approval. However, after the defendants submitted the site plan application, the Town promptly referred it to the TRCA. The TRCA stated that the defendants needed to apply for a Conservation Authority permit. The defendants complied, and the TRCA issued the permit on August 17, 2021. Thus, the TRCA’s administrative decision rendered the issue of site plan approval moot.
59The defendants relied on Carson v. Kearney (Town), 2016 ONCA 975, 58 M.P.L.R. (5th) 51, in which the Court of Appeal dismissed an appeal from an unreported decision of this court holding that a municipality can be held liable in negligence for a five-year delay in processing a building permit. At paras. 4-6, the Court of Appeal recognized the municipality’s duty of care and summarized the trial judge’s findings of negligence on the part of the Town in failing to exercise reasonable oversight of its Chief Building Official, whose misconduct delayed the construction project for almost three years out of the five.
60For the sake of argument, I will assume that the defendants could adduce more or better evidence at trial that the delay between March and September exposed Astoria to a sharp increase in input costs. As described in my analysis of the abatement calculation for completing the property transaction, this $400,000 appears to represent Astoria’s loss in having to build the house. Mr. Ferrara’s evidence on this point was rather thin, but the fact that he pulled the plug on the deal at the risk of being sued meant that a figure of that nature was real to him at least at the time, as a measure of economic loss resulting for its claim against the Town based on the liability of a statutory public authority. This category of tort is among those qualifying for claims for pure economic loss: Design Services Ltd. v. Canada, 2008 SCC 22, [2008] 1 S.C.R. 737, at paras. 31-32; Kamloops v. Nielsen, [1984] 2 S.C.R. 2, at pp. 26-35.
61The Town defended the third party claim, inter alia, on the grounds that s. 31 of the Building Code Act, 1992, S.O. 1992, c. 23, immunized the municipality from liability unless the building inspectors or officials had committed a tort. Section 31 immunized the officials charged with the duty to examine building permit applications, but created a statutory vicarious liability on the part of the municipality for any such tort by the officials (emphasis added):
Immunity from action
31 (1) No action or other proceeding for damages shall be instituted against the director, a member of the Building Code Commission or the Building Materials Evaluation Commission, or anyone acting under their authority, a person conducting an inquiry under section 30, a chief building official, an inspector or an officer for any act done in good faith in the execution or intended execution of any power or duty under this Act or the regulations or for any alleged neglect or default in the execution in good faith of that power or duty.
Liability
(2) Subsection (1) does not relieve the Crown, a municipality, an upper-tier municipality, a board of health, a planning board or a conservation authority of liability in respect of a tort committed by their respective chief building official or inspectors to which they would otherwise be subject and the Crown, municipality or upper-tier municipality, board of health, planning board or conservation authority is liable for any such tort as if subsection (1) were not enacted.
62The Town’s motion cited two grounds. It submitted, first, that the third-party claim identified no tort by the Chief Building Officer; second, that the TRCA approval was required because O. Reg. 332/12, under the Building Code Act brought the permit requirements under the Conservation Authorities Act, R.S.O. 1990, c. C.27, into the condition under s. 8 of the Building Code Act that the construction not contravene “any other applicable law.”
63No trial is required to determine whether the delay during the spring and summer of 2021 from the referral to the TRCA breached the Town’s duty of care to process the building permit application in a reasonable manner. The material events were documented and undisputed. In Just v. British Columbia, [1989] 2 S.C.R. 1228, at p. 1235, the Supreme Court defined the scope of the duty of care when it reiterated Lord Wilberforce’s words in Anns v. Merton London Borough Council, [1978] A.C. 728, at pages 751-52 where he set out his position in these words (emphasis added):
First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter – in which case a prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise.
64Sections 22-27 of the Building Code Act provide for reviews and appeals of local officials’ decisions, with routes exhausted only by appeal to the Divisional Court. The legislature evidently contemplated that the legality or technical correctness of such decisions could be challenged by an aggrieved applicant. In this case, Astoria did not object to or seek reconsideration of the decision to require a TRCA permit. The building permit process in Ontario requires municipalities to enlist the talents of a range of inspectors. To subject unchallenged decisions of the Town’s building department to retrospective exposure to tort liability amounts to expansion of the duty contemplated in Anns beyond any concept of “carelessness.”
65From the available facts, Carson represented a case of egregious breaches of administrative duty well beyond the bounds of the principles of public protection through administration of building standards. The Court of Appeal noted, at para. 6, that the trial judge based the finding of negligence “not on a single isolated act, but on a course of conduct” after the new Chief Building Officer significantly changed the requirements the applicants had to meet, without having consulted his predecessor. His predecessor had made representations on which the applicants had relied. Carson did not stand for the proposition that municipal building inspectors should be exposed to strict liability for isolated instances of unnecessary caution in the exercise of a professional discipline involving complicated building standards. On the contrary, the public is protected by governmental officials who prefer to err on the side of caution. Ultimately, the statutory duty is to protect the public from improper building practices. Any duty to a developer to expedite a building permit, for the sake of mitigating economic loss, entails a degree of judgment. The exercise of judgment, even if it turns out wrong, is not actionable in Canadian tort law: Wilson v. Swanson, [1956] SCR 804, at p. 812.
66In contrast, the premise of imposing on the Town of Caledon a duty of care to protect a builder’s profit margin from fluctuations in business costs over a duration of several months runs counter to the public protection mandate of its building officials to consider each application meticulously to address structural defects, fire hazards, and environmental impacts. Even if a duty to protect the business interest existed, the court cannot hold the building official to a fulfillment standard to process an application within a month of filing. Nor can the standard include refraining from referring the site plan to the relevant conservation authority because of the potential delay.
67Even if the TRCA had returned the plan to the Town because it was unnecessary, it was not excessive caution amounting to negligence for the Town official to have made the referral. The TRCA’s granting of the permit implicitly affirmed the referral. The grandfathered exemption of the site from conservation regulations did not mean that the various levels of authority could shed their public duty to scrutinize development in an environmentally sensitive region.
68Astoria’s objection to the referral to the TRCA only arose after the purchasers raised the legal objection to Astoria’s cancellation of the APS and sued. Even if Astoria had notified the Town officials of the risk of elevated business costs, the proximate cause of Astoria’s legal problems was its failure to cancel the agreement by the Vendor’s Cancellation Date. The $400,000 cost increase estimated by Astoria to have occurred between March and the Vendor’s Cancellation Date was exclusively in Astoria’s line of sight. Mr. Ferrara could have avoided having to absorb the cost increase, as well as his liability to the plaintiffs, by exercising his right to cancel the APS by September 1, 2021. That very fact undermines any reliance on municipal negligence, in terms of both duty of care and causation.
69I need not consider whether the Town’s advice in August that the building permit would be issued precipitated Astoria’s discovery of the cost increase by prompting Mr. Ferrara to organize subcontractors and order materials. To impose on the municipality a duty to protect property developers’ short-term profit margins would far exceed the bounds of the duty to act reasonably as recognized in Anns and as applied in Carson. Astoria’s failure to exercise its contractual option to protect itself and its margin within the time afforded under the APS cannot be laid at the Town’s feet. The essential facts leading to that conclusion cannot change at a trial of the third party claim. Proportionality and judicial economy dictate that the third party claim must come to an end today.
70The third party claim will therefore be dismissed.
CONCLUSION AND COSTS
71For the reasons outlined above, I grant the plaintiffs’ motion for summary judgment and make an order for specific performance against Riteland as the owner of the property, and against Astoria as the constructor, to transfer all rights and title to the lands and any licenses, permits, contracts and other instruments, short of requiring Astoria to complete the building. On closing, the plaintiffs shall pay Astoria the net amount of $347,469.43.
72I disallow the plaintiffs’ claim for an additional abatement for the costs of financing the construction and property tax on their existing home.
73Further, I dismiss the defendants’ third-party claim against the Town of Caledon.
74Judgment will issue in accordance with the above reasons, with a 60-day closing period for completion of the property transfer transaction. Beyond that, I will rely on counsel to agree on detailed closing terms to their clients’ mutual advantage. If they cannot agree, I can be spoken to.
75I encourage the parties to settle the costs of the proceedings. If they cannot settle the costs, the plaintiffs and third party shall deliver an updated bill of costs and submissions of no longer than two pages in length, within 14 days of the release of this decision. The defendants shall have a further 14 days from the expiry of that period, to deliver their costs submissions.
Akazaki J.
Date: January 28, 2026