



COURT OF APPEAL FOR ONTARIO

CITATION: Nordlund Family Retreat Inc. v. Plominski, 2014
    ONCA 444

DATE: 20140606

DOCKET:
C56215

Feldman, Epstein and van Rensburg JJ.A.

BETWEEN

Nordlund Family Retreat Inc.

Plaintiff (Respondent)

and

Ben Plominski

Defendant (Appellant)

Brian N. Radnoff and Rivka L. Birkan, for the appellant

Frederick J. Skeggs, for the respondent

Heard: November 22, 2013

On appeal from the summary judgment of Justice Edward J.
    Koke of the Superior Court of Justice, dated October 5, 2012, with reasons
    reported at 2012 ONSC 5661, and his addendum and costs decisions, both dated
    January 16, 2013, with reasons reported at 2013 ONSC 258 and 2013 ONSC 283.

van Rensburg J.A.:

[1]

The issues on this appeal are whether the motion judge erred in granting
    summary judgment in favour of the respondent when he held that there was an
    agreement for an easement over the appellants lands, in directing specific
    enforcement of the agreement, in granting leave to amend the statement of
    claim, or in his costs award.

[2]

For the reasons that follow, I would dismiss the appeal. I would also
    dismiss the motion for leave to appeal costs.

A.

OVERVIEW

[3]

In 2004, Donald Nordlund (a retired lawyer and U.S. resident) purchased
    vacation property on Basswood Lake (the Nordlund Property), located
    approximately 100 kilometres east of Sault Ste. Marie. Legal title to the
    Nordlund Property was initially taken in the names of Mr. Nordlund and members
    of his family, and in August 2007 was transferred to The Nordlund Family
    Retreat Inc. The Nordlund Property consists of approximately 2650 feet of lake
    frontage on Lot 9 (the south part is owned by the Crown), as well as an
    additional 2650 feet of frontage on the adjacent Lot 8.

[4]

The Nordlund Property was accessible only by water. Road access would
    require the construction of a road across the properties located between
    Basswood Lake Road and the Nordlund Property. Some of the surrounding property
    was Crown land, while other parts were privately owned.

[5]

In September 2004, Mr. Nordlund entered into an agreement (the 2004
    Agreement) with his neighbour Brian Hooey who then owned part of Lot 10 that
    abutted the Nordlund Property. Under the 2004 Agreement, Mr. Hooey agreed to
    grant an easement over Lot 10 to the present and future owners of Lots 8 and 9
    to permit road access to their property. The 2004 Agreement contemplated a
    survey and construction of a road at the expense of the owners of Lots 8 and 9,
    the drafting of an official agreement after completion of the survey and payment
    of $15,000 upon completion of the official agreement.

[6]

The 2004 Agreement provided that the exact route of road access would be
    determined by the survey and that the easement would be sufficiently wide to
    accommodate the bringing in of power lines.

[7]

Barbara Plominski was the Nordlunds housekeeper. On or about November
    1, 2005, her husband, the appellant Ben Plominski, together with two other
    individuals (Zenon Zator and his wife Krystyna Dominska), purchased Mr. Hooeys
    interest in Lot 10. At the time of the purchase, Mr. Plominski, Mr. Zator, and
    Ms. Dominska signed two documents ‑ an agreement with Mr. Nordlund, and
    an Acknowledgement re: Title addressed to the municipality ‑ in which
    they agreed to assume Mr. Hooeys obligations under the 2004 Agreement.

[8]

Mr. Plominski discovered that the property that he and his co-owners had
    purchased from Mr. Hooey was landlocked. They had been refused continuing
    access over part of a road they had been using to reach their property from
    Basswood Lake Road. Ultimately, in February 2007 they purchased a narrow strip
    of land on the adjoining Lot 11. The Hooey lands and the part of Lot 11 that
    were purchased by Mr. Plominski and his co-owners are referred to as the
    Plominski Property. They paid a contractor to construct a new road and to
    make improvements to an existing road, thus providing direct road access to the
    Plominski Property from Basswood Lake Road.

[9]

It was apparent that the easement necessary for construction of a road
    to the Nordlund Property had to extend not only over Lot 10 (which was
    contemplated by the 2004 Agreement), but also over the part of Lot 11 purchased
    by Mr. Plominski and his co-owners.

[10]

When
    the Plominski Property was originally purchased the intention was for Mr.
    Plominski and his co-owners to build neighbouring cottages on severed lots.
    Their application for severance was turned down, and in 2007 Mr. Plominski
    purchased his co-owners interests in the property. Eventually Mr. Nordlund
    offered to attempt to sever a lakefront lot from the Nordlund Property for
    transfer to Mr. Plominski.

[11]

In
    August 2007, after the necessary work had been completed to provide road access
    to the Plominski Property, and after Mr. Plominski had bought out his
    co-owners, he and Mr. Nordlund signed a document that the motion judge referred
    to as the Easement Summary. The Easement Summary states, among other things:

·

The easement for a road to Lots 9 and 8 will start at Basswood
    Lake Rd. and run through Lots 11 and 10;

·

The road to Lots 9 and 8 must connect from the existing road
    located on Lot 10 going east;

·

The easement will be 32 feet wide to accommodate necessary turns
    in the road to avoid rocks and trees but the road itself will be no more than
    16 feet wide;

·

The cost of the survey and road construction from the split on
    the hill going east will be borne by owners of Lots 9 and 8;

·

Maintenance of the common road including fallen tree removal
    (Basswood Lake Rd. to the split on the hill) will be borne evenly by the owners
    of Lots 8, 9 and 10 regardless of occupation and/or usage of the lots. Each lot
    is responsible for paying 1/3 of the maintenance costs;

·

The owners of Lot 10 will not be liable for any injury or
    property damage which the owners of Lots 8 and 9 and/or their guests may suffer
    when using the aforesaid easement;

·

The easement is for the present and future owners of Lots 9 and
    8;

·

Maintenance of the road from the split on the hill going east
    will be the sole responsibility of the owners of Lots 8 and 9 until a severance
    of 250 to 300 feet from the westernmost boundary of Lot 9 is approved and
    thereafter the costs from the split on the hill to the new west boundary of Lot
    9 will be shared in the same manner as the costs to the split on the hill; and

·

Upon signing and delivery of a valid easement agreement from Ben
    Plominski as the sole owner of Lot 10 and part of Lot 11, Mr. Nordlund will pay
    Ben Plominski US$45,000.

[12]

The
    Easement Summary states that this letter is not to serve as a legal agreement
    but as a summary of the understanding between Ben Plominski and Donald
    Nordlund.

[13]

Another
    document, referred to as the Severance Summary, was signed by Mr. Nordlund,
    Mr. Plominski and their spouses in August 2007. The Severance Summary provides
    that it is not to serve as a legal agreement, but rather as a summary of an
    understanding regarding the proposal to try and gain approval for a severance
    of a part of Lot 9. The document states that Mr. Nordlund agrees to initiate a
    petition on behalf of the Nordlund Family Retreat for severance of a
    rectangular parcel of land, that Mr. Nordlund will use his best efforts to
    obtain the necessary approvals, but no guarantee is possible. The Severance Summary
    provides for its own consideration if the severance and transfer are successful,
    namely, payment by Mr. Plominski and his wife of one third the costs of road
    construction from the split on the hill to Lot 9 plus US$15,000 for the severed
    property. The Severance Summary provides that, if and when the petition for
    severance is approved, Mr. Nordlund, on behalf of the Nordlund Family Retreat, will
    grant Ben and Barbara Plominski or the future owners of the property an
    easement to build a driveway to access the severed property.

[14]

On
    September 4, 2007, Mr. Nordlund advanced $45,000 to Mr. Plominski and the
    parties signed an addendum to the Easement Summary which states if for any
    reason whatsoever the easements across said Lots 10 and 11 for the benefit of
    present and future owners of Lots 9 and 8 cannot be granted by December 1,
    2007, then Mr. Plominski will promptly repay the $45,000 to Mr. Nordlund. The
    purpose of the payment at that time was to assist Mr. Plominski in purchasing
    the interests of his co-owners in Lots 10 and 11.

[15]

Between
    2007 and 2009 there were a number of communications between Mr. Nordlund and Mr.
    Plominski, which will be discussed in some detail later in these reasons,
    respecting the easement required for land access to the Nordlund Property, as
    well as the severance and transfer of a lot to the Plominskis. By the fall of
    2009, when Mr. Nordlund passed away, neither had occurred.

B.

PROCEDURAL HISTORY

[16]

This
    action was commenced in November 2009 by the legal owner of the Nordlund
    Property, The Nordlund Family Retreat Inc., seeking to require the appellant
    Ben Plominski to grant an easement in favour of the respondent.

[17]

The
    respondent claimed that the 2004 Agreement as amended from time to time for
    good and valuable consideration and/or partial performance, was a binding
    contract and sought specific performance or damages. The Easement Summary was
    referred to in the statement of claim, and a copy of the Easement Summary and other
    documents were attached to the pleading.

[18]

The
    appellants position was that there was never a binding and enforceable agreement
    to provide an easement. The appellant also pleaded that any obligation to
    provide an easement was dependent upon a severance from the Nordlund Property
    and conveyance to the Plominskis of a lakefront lot. The appellant
    counterclaimed for specific performance and damages in relation to an alleged
    agreement to provide a severed lot.

[19]

In
    March 2011, the respondent brought a motion to amend the statement of claim to
    include a claim for a declaration that the Easement Summary was a binding
    agreement and for a vesting order. At the same time, the respondent brought a
    motion for summary judgment on its claim and to dismiss the counterclaim. Both
    motions were adjourned from time to time and ultimately argued on September 20,
    2012.

[20]

The
    motions were supported by an affidavit from Sarah Nordlund, the daughter of
    Donald Nordlund. In response, there were affidavits from the appellant, his
    wife and one of his former co-owners. There were no oral cross-examinations,
    although Ms. Nordlund was cross-examined in writing on her affidavit. Extensive
    documentation that had passed between Mr. Nordlund and Mr. Plominski was
    appended to the pleadings, exhibited to the affidavits and otherwise produced.

[21]

On
    October 5, 2012 the motion judge released his decision granting summary
    judgment on the respondents claim and dismissing the counterclaim. On January
    16, 2013, in response to a request of counsel, the motion judge released an
    addendum to his reasons, specifically addressing the motion for leave to amend
    the statement of claim, and confirming that the motion had been granted.

C.

DECISION BELOW

i.

Summary Judgment

[22]

In
    his reasons, the motion judge reviewed in detail the discussions and dealings
    between the parties regarding the alleged easement agreement and the alleged
    severance agreement, that occurred between the date the 2004 Agreement was
    signed and 2009, when the action was commenced.

[23]

With
    respect to the easement, the motion judge noted that the 2004 Agreement had
    been acknowledged by Mr. Plominski and his co-owners at the time they purchased
    Lot 10 from Mr. Hooey and that they were therefore bound by its terms. He found
    that the Easement Summary that was signed in 2007 was intended to comprise a
    binding agreement between the parties. It was a preliminary agreement, in which
    the parties agreed that they would undertake certain steps and, assuming those
    steps were taken, that they would then draft a final agreement that could be
    registered on title. The Easement Summary contained all the required and
    necessary terms to constitute an agreement and was commercially reasonable with
    respect to the required consideration ($45,000 that was payable upon receipt of
    the easement). The parties had taken a number of steps that they would not have
    taken if they did not believe they had a binding agreement.

[24]

The
    motion judge also found that the Severance Summary constituted a binding
    agreement in favour of Mr. Plominski and his wife, that required Mr. Nordlund
    to use his best efforts to attempt to obtain a severance of a lakefront lot.
    This was also a preliminary agreement, but was binding because it included all
    of the particulars as to the size of lot, location and mutual consideration and
    was acted upon by the parties.

[25]

The
    motion judge rejected the appellants contention that the parties had agreed
    orally that the provision of a severed lot would be part of the consideration
    for the grant of an easement, as well as the appellants claim for compensation
    in lieu of the severed lot. The Severance Summary contained all of the terms
    respecting the severance and provided for its own consideration ($15,000 to be
    paid by the Plominskis to the Nordlunds upon the transfer). The motion judge noted
    that Mr. Plominski had first demanded money in lieu of a lot in January 2009
    during communications Mr. Nordlund initiated in an effort to have Mr. Plominski
    complete the easement. This demand was firmly rejected by Mr. Nordlund. What
    Mr. Plominski was asserting was commercially unreasonable in any event,
    considering that what he had paid for the Plominski Property was less than the
    payment he was seeking if the lot was not severed and transferred.

[26]

The
    motion judge concluded that the Easement Summary and the Severance Summary
    represented two separate and independent agreements. He concluded that the respondent
    was entitled to an easement over Lots 10 and 11. He also concluded that the
    steps taken by Mr. Nordlund with respect to the severance (submitting the
    application and then withdrawing it to await transfer of the approval
    jurisdiction to another authority which was more likely to grant approval) had
    been reasonable, and that the respondent remained under a continuing obligation
    to complete the application and to use best efforts to effect the severance.

[27]

The
    motion judge specifically considered whether summary judgment should be granted.
    He noted that the parties had recorded their discussions and dealings in
    considerable detail, in the form of written agreements and letters. He rejected
    the contention that the moving party had failed to put its best foot forward,
    in relying on the affidavit of Mr. Nordlunds daughter (as opposed to his
    widow), and in not filing an affidavit of the surveyor. He concluded that he
    was faced with two competing versions of what the parties intended when they
    signed the Easement Summary and the Severance Summary, and that, on the
    materials that were before him at the motion, he was able to come to a full
    appreciation of the evidence and the issues and to make the necessary
    dispositive findings in the case. He concluded that there were no outstanding
    genuine issues that required a trial.

[28]

The
    motion judge concluded that the refusal by the appellant to provide the
    easement was a breach of his obligations. He noted that Mr. Plominski had rejected
    a number of concessions offered by Mr. Nordlund in order to complete the
    easement. As a remedy, the motion judge granted specific performance of the
    Easement Summary, except that he ordered an easement 12 metres (or approximately
    40 feet) wide, rather than the 32 foot width called for in the agreement. He
    accepted that the survey already obtained provided for an easement of 12 metres
    to accommodate a 16 foot wide road, and that it would be unfair to impose on
    the respondent the cost of another survey. The motion judge specified however
    that the roadway which was to be constructed on the easement was not to be
    wider than 16 feet. He ordered specific performance and a vesting order for the
    easement, requiring the appellant to assist and sign any documents reasonably
    necessary to facilitate the vesting order.

[29]

Having
    concluded that the Severance Summary was a valid and binding agreement and that
    the respondent was not in breach, the motion judge dismissed the counterclaim.

ii.

Amendment of Pleadings and Costs

[30]

Following
    the release of the summary judgment decision, counsel wrote to the motion judge
    noting that the reasons did not specifically address the request that the
    statement of claim be amended. In the absence of a specific determination,
    counsel were unable to settle the order.

[31]

In
    supplementary reasons, the motion judge clarified that there was an order that
    the statement of claim be amended as requested by the respondent. He noted that
    it was implicit in his reasons that the amendments had been approved. The appellant
    had failed to point to any prejudice resulting from the amendment. The motion
    judge rejected the appellants argument that the amendment sought to add a
    claim outside the applicable limitation period, noting that the original claim
    was in respect of the 2004 Agreement as amended from time to time, and that
    the Easement Summary had been referred to and appended to the original
    statement of claim. This was not a request to commence a new and fresh claim,
    but a clarification and narrowing of an existing claim and cause of action. He
    noted that argument on the summary judgment motion had proceeded on the basis
    that the amendments had been or would be granted.

[32]

The
    motion judge released his decision on costs on January 16, 2013, awarding costs
    to the respondent fixed at $53,261.59.

D.

ISSUES ON APPEAL

[33]

The
    appellant raises the following arguments on appeal:

1)

The motion judge erred in finding that there was no genuine issue for
    trial, when there was conflicting evidence on various points.

2)

The motion judge erred in awarding judgment in favour of the respondent
    on the basis of the Easement Summary, when:

a)

the Easement Summary was no more than an agreement to agree or an
    agreement lacking essential terms and therefore unenforceable; and

b)

the respondent was not a party to the Easement Summary and therefore
    could not enforce it.

3)

The motion judge erred in awarding specific performance.

4)

The motion judge erred in granting leave to the respondent to amend its
    statement of claim.

[34]

The
    appellant also sought leave to appeal the costs award and, if leave is granted,
    appeals the award.

1. No Genuine Issue
    for Trial

[35]

The
    appellant argued that certain of his evidence was uncontradicted because he was
    not cross-examined on his affidavit, and that this evidence was ignored by the motion
    judge. In this regard the appellant asserted that the motion judge ought to
    have accepted the affidavit evidence of Ben Plominski and his wife as to
    whether any agreement had been reached and whether it was the intention of the
    parties to make the obligation to provide an easement dependent on the delivery
    of a severed lot.

[36]

By
    the time the motion was brought, Mr. Nordlund was deceased. The respondent
    relied on the affidavit of his daughter Sarah Nordlund. Because Ms. Nordlund
    was not directly involved in the discussions, the appellant contends that his
    own evidence was uncontradicted.

[37]

I
    disagree. It is clear from the reasons for decision that the motion judge did
    not ignore the appellants evidence. On a number of points that evidence was
    contradicted by other evidence that the motion judge accepted.

[38]

The
    motion judge was alive to the fact that Mr. Plominskis account of the parties
    dealings and intentions differed from that of the respondent. He observed that
    the evidence provided two competing versions of what the parties intended when
    they signed the Easement Summary and the Severance Summary. The motion judge concluded
    that the extensive documents between the parties, the affidavits and
    cross-examinations permitted him to come to a full appreciation of the
    evidence.

[39]

The
    motion judge made extensive reference to the parties contemporaneous written
    communications, as well as their conduct following the execution of the
    Easement Summary, to conclude that in fact they had both intended to enter into
    a binding agreement for the provision of an easement.

[40]

The
    evidence included the following:

·

Mr. Plominski acknowledged that the 2004 Agreement, to provide an
    easement over Lot 10 for a road, was binding on him when he and his co-owners
    purchased Lot 10. That agreement anticipated a survey and the conclusion of an
    official agreement;

·

Mr. Nordlund paid Mr. Plominski the $45,000 contemplated by the
    Easement Summary as an advance;

·

After the Easement Summary was signed, Mr. Plominski signed an
    authorization permitting the surveyor retained by Mr. Nordlund to act on his
    behalf to obtain the consent to the easement of the Ministry of Municipal
    Affairs and Housing;

·

By letter dated September 24, 2007 to the Ministry of Natural
    Resources, Mr. Plominski confirmed that he had agreed with Mr. Nordlund to
    grant an easement across Lot 10 and part of Lot 11;

·

In June 2008 Mr. Plominski signed a document called Agreement
    stating that for good and valuable consideration he agreed to convey an
    easement for the purpose of road access. This document set out the anticipated
    location of the easement and stated that official documents evidencing the
    easement would be prepared as soon as accurate legal descriptions showing
    exact locations were finalized. The Agreement stated that the road, together
    with necessary drainage ditches, would not exceed a total width of 20 feet. According
    to Mr. Plominski, he signed this document understanding that it was to be sent
    to the Ministry of Natural Resources; and

·

Mr. Plominski signed an application to the Ministry of Municipal
    Affairs and Housing for its consent to an easement in July 2008. The easement
    application was accompanied by a survey indicating the proposed location of the
    easement. On September 22, 2008 the application was submitted to the Ministry.

[41]

On
    a summary judgment motion the judge is entitled under rule 20.04(2.1) to weigh
    the evidence, evaluate the credibility of a deponent and to draw any reasonable
    inference from the evidence, unless it is in the interest of justice for such
    powers to be exercised only at trial. The recent decision of the Supreme Court
    of Canada in
Hryniak v. Mauldin,
2014 SCC 7, [2014] S.C.J. No. 7, reinforces
    this requirement, stating at para. 57:

On a summary judgment motion, the evidence need not be
    equivalent to that at trial, but must be such that the judge is confident that
    she can fairly resolve the dispute. A documentary record, particularly when
    supplemented by the new fact-finding tools, including ordering oral testimony,
    is often sufficient to resolve material issues fairly and justly. The powers
    provided in Rules 20.04(2.1) and 20.04(2.2) can provide an equally valid, if
    less extensive, manner of fact finding.

[42]

The
    credibility of the appellants own position in this case was affected by the
    documents that were inconsistent with what he said in his affidavit about his
    intentions and whether an agreement existed. There were also inherent
    contradictions in the positions taken in his pleadings and affidavit that
    seriously undermined his account.

[43]

In
    his statement of defence and counterclaim, the appellant pleaded that at no
    time was there any binding legal agreement between the parties. Indeed, he
    stated in his affidavit:

Donald Nordlund and I did not ever arrive at mutually agreeable
    terms relating to the easement and Lot 9 severance.  It was always the position
    of Barbara and I throughout the negotiation process that the granting of an
    easement over Lots 10 and 11 was contingent on severance and transfer to us of
    a buildable part of Lot 9.  The negotiation process was lengthy but,
    unfortunately, did not result in an agreement.

[44]

Notwithstanding
    these assertions, the appellants counterclaim pleaded that the respondent was
    in breach of the undertaking given by its employee, servant or agent, Donald
    Nordlund, in not living up to the terms of the Severance Summary. The
    counterclaim sought the transfer and conveyance of a severed lot from the
    Nordlund Property, or damages in lieu of the transfer, plus exemplary, punitive
    and general damages.

[45]

The
    counterclaim was premised on an enforceable obligation to convey a lot. Unless
    there was an agreement with respect to the severance and transfer of a lot, there
    would be no basis for the counterclaim. The assertion of a counterclaim based
    on a binding agreement to provide a severed lot is entirely inconsistent with
    the appellants contention in response to the summary judgment motion that the
    parties were continuing to negotiate and never reached agreement on either the
    easement or the severance.

[46]

I
    turn now to the appellants contention that the motion judge ought to have
    drawn an adverse inference from the failure of the respondent to file
    affidavits from Donald Nordlunds widow, Jane Nordlund, and the surveyor, Colin
    Trivers. Rule 20.02 provides that on the hearing of a summary judgment motion,
    the court may, if appropriate, draw an adverse inference from the failure of a
    party to provide the evidence of any person having personal knowledge of
    contested facts.

[47]

Mr.
    Nordlund, who had the majority of direct dealings with Mr. Plominski concerning
    the easement, was deceased. His daughter, Sarah Nordlund, also a lawyer, was
    the president of the respondent, and had been kept informed by her father of
    the progress of the easement. The respondent relied upon the detailed and
    contemporaneous written communications between Mr. Plominski and Mr. Nordlund,
    which were appended to the affidavits. The respondent did not rely on any
    evidence of Mrs. Nordlund, and in the circumstances, the motion judge did not
    err in refusing to draw an adverse inference from the failure to put forward
    her affidavit.

[48]

With
    respect to the evidence of Colin Trivers, it was Mr. Plominski who asserted
    that the idea for an easement wider than 32 feet came from Mr. Nordlund, and
    not his surveyor. This is inconsistent with what Mr. Nordlund said in his
    letters to Mr. Plominski, in explaining why the surveyor had sought a wider
    easement (to accommodate the twists and turns in the road), and attempting to
    reassure Mr. Plominski that the road itself would be 16 feet wide or less. I
    agree with the motion judges conclusion that, if the surveyors evidence was
    considered important by Mr. Plominski, he ought to have tendered an affidavit
    from Mr. Trivers, or sought to have him examined as a witness on a pending
    motion.

[49]

I
    would not give effect to this ground of appeal.

2. a) The Easement
    Summary Was Not a Binding Agreement

[50]

The
    appellant submits that the Easement Summary was not a binding agreement
    because:

(i)

By its terms, it is apparent that the parties did not intend the
    Easement Summary to have binding legal consequences;

(ii)

The Easement Summary lacks the essential terms required for an
    enforceable or registrable easement; and

(iii)

The parties conduct and communications after signing the document
    suggest that they were continuing to negotiate the material terms and therefore
    that they had not arrived at a binding agreement.

[51]

The
    appellant relies on the fact that the Easement Summary stated that it was not
    to serve as a legal agreement but rather as a summary of an understanding. The motion
    judge rejected this assertion. He interpreted this language to mean that the
    parties contemplated the need to enter into a final agreement that could be
    registered against title after Ministry approval was obtained and a survey
    showing the exact location of the easement was completed.

[52]

In
Bawitko Investments Ltd. v. Kernels Popcorn Ltd.
(1991), 53 O.A.C.
    314, Robins J.A. described the issue that confronts a court when deciding
    whether there is a binding agreement or simply an agreement to agree that lacks
    essential terms. He stated at paras. 20 and 21:

The parties may contract to make a contract, that is to say,
    they may bind themselves to execute at a future date a formal written agreement
    containing specific terms and conditions.  When they agree on all of the
    essential provisions to be incorporated in a formal document with the intention
    that their agreement shall thereupon become binding, they will have fulfilled
    all the requisites for the formation of a contract.  The fact that a formal
    written document to the same effect is to be thereafter prepared and signed
    does not alter the binding validity of the original contract.

However, when the original contract is incomplete because
    essential provisions intended to govern the contractual relationship have not
    been settled or agreed upon; or the contract is too general or uncertain to be
    valid in itself and is dependent on the making of a formal contract; or the
    understanding or intention of the parties, even if there is no uncertainty as
    to the terms of their agreement, is that their legal obligations are to be deferred
    until a formal contract has been approved and executed, the original or
    preliminary agreement cannot constitute an enforceable contractThe execution
    of the contemplated formal document is not intended only as a solemn record or
    memorial of an already complete and binding contract but is essential to the
    formation of the contract itself

[53]

The
    motion judge stated at paras. 60 to 64 of his reasons:

In interpreting a document, it must be assumed that the words
    in the document are intended by the parties to have a meaning. In determining
    whether the parties intended to enter into a binding agreement it is necessary
    to determine what the parties meant by the term legal agreement.

The term must be interpreted contextually, by looking at the
    context in which the word has been placed in the document and the context and
    the circumstances in which the document was drafted.

In this case, the parties had not yet obtained a survey which
    could be registered against the subject lands; neither had they obtained formal
    approval from the Ministry for an easement. Without a survey, and without
    formal approval, the parties were unable to enter into a final agreement which
    could be registered against the property.

The final paragraph of the Summary states that Mr. Nordlund was
    not obligated to pay for the easement until a valid easement agreement had
    been signed and delivered from Ben Plominski. The Summary therefore
    contemplates that a more formal agreement would be entered into after certain
    steps were taken and completed. Presumably, this agreement would be an
    agreement which could be registered and which would provide the parties with
    the security to move forward with the clearing of the land and construction of
    the roadway.

In my view, the Easement Summary was intended to be a
    preliminary agreement between the parties wherein they agreed that they would
    undertake certain steps, and assuming these steps were successfully completed
    they would then draft a final agreement which was capable of being registered
    against the property. Notwithstanding the fact that the Easement Summary was
    intended to be a preliminary agreement, there is no reason to believe that it
    was not intended to be a binding and enforceable agreement.

[54]

I
    see no error in this reasoning. The conclusion that the parties had entered
    into a binding preliminary agreement that enabled them to take the necessary
    steps that they in fact undertook in the following months, was consistent with
    other aspects of the evidence, including the 2004 Agreement, which Mr. Plominski
    acknowledged was binding notwithstanding its reference to the need for an
    official agreement.

[55]

I
    would also reject the appellants argument that the Easement Summary is not a binding
    agreement because it does not include the essential terms of a contract for an
    easement. The appellant relies on cases where a binding agreement for an
    easement was not recognized because some essential term was missing. In
Pickering
    v. Harper Ranch Ltd.
, [1997] B.C.J. No. 1038 (S.C.), a document signed by
    the appellant purporting to give his neighbour permission and easement to
    locate a septic field on his property was not an enforceable agreement because
    the dimensions and location of the easement had not been sufficiently
    identified. In that case, the easement the respondents sought to enforce
    differed from the document the parties had signed with respect to the
    anticipated size, location and conditions attaching to the easement. Given the
    evidence in that case, the court concluded that no agreement had been reached.

[56]

In
Georgian Windpower Corporation v. Stelco Inc
., 2012 ONSC 3759, [2012]
    O.J. No. 6037, the court considered, among other things, whether a document
    referred to as a land lease/easement agreement constituted a binding easement
    agreement. Patillo J. concluded that the document lacked the essential terms
    necessary to constitute either an enforceable lease or easement. It failed to
    provide a description of the demised premises to be leased or the land over
    which the easement was to run, when the term of either was to commence and
    certain other material terms. It was also unclear whether the parties would be
    entering into a lease, an easement or both.

[57]

Patillo
    J. noted at para. 124 that in order for there to be a binding contract, the
    parties must agree on all of the essential terms of the agreement, and that
    what constitutes essential terms depends on the subject matter of the
    contract and what transpired at the time of the alleged agreement.

[58]

In
United Gulf Developments Ltd. v. Iskandar
, 2008 NSCA 71, [2008] N.S.J.
    No. 317, at para. 14, Cromwell J.A. (as he then was) noted: Determining what
    terms are essential in a particular case ismore difficult than stating the
    principle. The sort of terms that are considered essential varies with the
    nature of the transaction and the context in which the agreement is made.

[59]

In
    this case, the motion judge concluded that the Easement Summary contained all
    of the essential terms to constitute a binding agreement to provide an
    easement. Again, I see no error in his reasoning. The parties agreed that an
    easement would be provided for a road to the Nordlund Property. A number of
    details were set out in the Easement Summary with respect to the location,
    construction, maintenance and legal liabilities attached to the road. While a
    survey was necessary to determine the exact route of the road, the parties agreed
    that the road would be a continuation of the road already constructed over the
    Plominski Property and running from the top of the hill. The steps that were
    necessary before the formal easement could be registered and the road could be
    extended to the Nordlund Property were contemplated in the Easement Summary,
    and in fact the parties undertook those steps.

[60]

I
    also note that the appellant did not take issue, at any time in his
    correspondence with Mr. Nordlund or in these proceedings, with the location of
    the road that was shown in the drawing prepared by the surveyor. While he
    objected to the width of the easement that the surveyor applied for, it is
    apparent from his correspondence that the real concern was that the road itself
    should not be wider than 16 feet.

[61]

Finally,
    on the question of whether the parties had a binding agreement, the appellant
    points to Mr. Nordlunds own statements in his letters to Mr. Plominski
    including one in February 2009, where he referred to the need to stop
    negotiating and enter into agreements so that we can move forward. The
    appellant contends that these letters make it clear that the parties were
    continuing to negotiate and, as such, did not have an agreement.

[62]

It
    must be recalled that, for approximately one year after the execution of the
    Easement Summary, the parties proceeded in their dealings with third parties
    and with each other, as though they had an agreement. It was only in October
    2008, after he had seen the extensive clearing that had taken place for the
    road extension across the Crown land, that Mr. Plominski objected. As he stated
    in his affidavit, it looked to him like Mr. Nordlund was clearing the land to
    build a highway. It was this concern that prompted Mr. Plominski to contact
    Colin Trivers, and it was then that he discovered that the easement application
    provided for a 12 metre wide easement, rather than the 32 foot easement
    described in the Easement Summary. As a result, Mr. Plominski allowed the municipalitys
    provisional approval to lapse.

[63]

Accordingly,
    as of the fall of 2008, Mr. Plominski had concerns about what had occurred, which
    caused him to refuse to conclude the formal agreement that was anticipated by
    the Easement Summary. The parties exchanged a number of letters that not only
    addressed these concerns, but in which Mr. Plominski began to make new demands
    as a condition for completing the easement. In response to Mr. Nordlunds
    letters attempting to address his concerns, Mr. Plominski wrote in December
    2008 that he had some suggestions and proposals to negotiate.

[64]

In
    the exchange of letters that followed, Mr. Plominski attempted to link the
    granting of an easement to the provision of a severed lot, and then to obtain
    financial compensation if a lot could not be provided. The motion judge, correctly
    in my view, characterized these communications as Mr. Nordlunds offer of concessions
    to Mr. Plominski and agreement to additional terms in order to secure the
    easement, notwithstanding Mr. Nordlunds belief that there was a valid easement
    agreement in place for which he had already paid Mr. Plominski $45,000. The motion
    judge stated at para. 79:

These additional concessions included a promise that he would plant
    trees on the Crown land, he would attempt to sever a 500 foot wide lot for the
    Plominskis, which was almost twice as wide as that he had previously agreed to,
    he would accept a 12 foot wide road instead of a 16 foot road and he would
    obtain and pay for a second survey which would reflect these changes.

[65]

The
    motion judge expanded upon this in his decision respecting costs at paras. 23,
    24 and 27 to 31:

Clearly, there is a marked contrast in the conduct of the
    parties.  In reviewing the correspondence between the late Donald Nordlund and
    Ben Plominski, one cannot help but be impressed with the generosity expressed
    by Nordlund to the Plominskis, and the integrity and consideration which marked
    his dealings.

The same cannot be said for Plominski. As far as he was
    concerned, there was no such thing as a final agreement.  His actions suggest
    that in his mind an agreement existed simply as a basis for a further demand. 
    Each time he was successful in extracting a concession from the well-meaning
    and increasingly desperate and frustrated Donald Nordlund, this concession just
    became a stepping stone to the next demand. As Plominskis realization grew
    that Nordlund was completely dependent on him for access to his property, and
    that the easement was of vital importance to Nordlund, the more his demands
    increased, notwithstanding the fact that the parties had entered into an
    easement agreement and that Nordlund had paid in advance for this easement.



Thereafter, Plominski began the process of making continual and
    repeated demands for changes to the easement agreement, in what can only be
    interpreted as a thinly disguised attempt on his part to prevent Nordlund from
    obtaining access to his property and to provide Plominski with additional time
    and opportunity to extract additional consideration from Nordlund.

Initially, Donald Nordlund agreed to accommodate Plominskis
    requests. When Plominski complained that he was cutting too many trees in
    constructing the roadway, Nordlund agreed to plant trees on the property. When
    Plominski demanded a new survey, Nordlund agreed to undertake the cost of
    obtaining a new survey. When Plominski requested that the frontage of the
    severed lot be increased to 350 feet, Nordlund agreed. No sooner did he agree
    than Plominski insisted that the severed lot be 500 feet wide. Nordlund again
    reluctantly agreed. When Plominski insisted that the width of the easement be
    reduced to 16 feet (the easement agreement for which Nordlund had paid $45000
    provided for a 32 foot wide easement), Nordlund agreed to do so. When Plominski
    attempted to return the $45,000 to Nordlund, purportedly because he was afraid
    that Nordlund would develop his properties and use it for commercial purposes,
    Nordlund pointed out that the original easement agreement contained a
    restrictive covenant in which it was agreed that his property would never be
    used for commercial development. Notwithstanding this covenant, Nordlund
    indicated that if Plominski required further assurances he was willing to enter
    into an agreement that no sale of his properties could take place without the
    prior approval of Plominski.

The correspondence indicates that Donald Nordlunds willingness
    to accommodate Plominskis never ending demands finally ended following receipt
    of Plominskis letter of February 15, 2009. In this letter Plominski requested
    that Nordlund put money in escrow with his lawyer in the event the application
    to sever a lot was unsuccessful, presumably to compensate him for the value of
    the lot. In this letter Plominski also informed Nordlund that he had learned
    that boat access to Basswood Lake may no longer be available in the future, a
    development which made an easement to Nordlunds water access only lots even
    more imperative.

Donald Nordlund replied with a letter dated February 23, 2009
    stating that time had come for an end to negotiations. He pointed out that he had
    agreed to everything Plominski had asked for except as he stated for your
    latest addition asking for a monetary reward in the event that the petition for
    severance is denied. This latest addition of yours has never been in any
    previous discussions and is totally unreasonable. I reject it and your idea of
    an escrow account with your attorney.

Nordlund concluded his letter by confirming that he continued
    to be prepared to use his very best efforts to obtain the severance and that
    he believed that there was a fair chance of achieving severance when the
    approval authority was moved. Plominski replied with a letter indicating he was
    not prepared to complete the easement and permit Nordlund access to his
    property over his land unless money for the lot was placed in escrow.

[66]

I
    do not find any error in the motion judges interpretation of what was
    occurring in 2009. The reference to negotiations must be read in context. Mr.
    Nordlund was attempting to arrive at an agreement to meet Mr. Plominskis continuing
    demands. These increasing demands reveal that he was not attempting to
    negotiate the specific terms of an easement agreement that had not yet been
    concluded, but to obtain additional consideration for the easement he had
    already agreed to provide. The fact that Mr. Nordlund was attempting to appease
    Mr. Plominski does not detract from the fact that they had a binding agreement
    already in place.

[67]

I
    would not give effect to this ground of appeal.

2. b) Privity Issue

[68]

The
    appellant asserts that the motion judge erred in permitting the respondent to
    enforce an agreement to which it was not a party. The appellant claims that there
    was no evidence to support the finding that Mr. Nordlund was acting in trust or
    as agent for the respondent in negotiating the easement or that Mr. Nordlund
    made the appellant aware of the relationship.

[69]

The
    appellant relies on the fact that the Nordlund Property was owned by Mr.
    Nordlund and other members of his family and was only transferred to the Nordlund
    Family Retreat Inc. in August 2007. The appellant also points out that the
    Easement Summary was signed by Mr. Nordlund and does not make reference to the
    legal title to the Nordlund Property or to the Nordlund Family Retreat.

[70]

The
    motion judge concluded that Mr. Nordlund was acting on behalf of the Nordlund
    Family Retreat Inc. when he contracted with Mr. Plominski and that Mr.
    Plominski was aware of this fact.

[71]

At
    para. 52 of his reasons, the motion judge states:

In my view, the documents which were filed in relation to this
    motion make it clear that after the lands were placed in the name of Nordlund
    Family Retreat Inc., Donald Nordlund made Plominski aware of the existence of
    the trust and that he was acting on behalf of the trust. Although the Severance
    Summary purports to be signed by Donald and Jane Nordlund, the Nordlunds agree
    in this document to initiate a petition
on behalf of the Nordlund Family
    Retreat
. In the final paragraph the parties agree that Mr. Nordlund,
on
    behalf of the Nordlund Family Retreat
will grant Ben and Barbara, or the
    future owners of the property an easement to build a driveway to access the
    severed property. I note as well that in his letter to Plominski of October 30,
    2008, Nordlund informs Plominski that he had no intention of selling Lots 9 and
    8 since they were intended for the future enjoyment of family members and that
    that is the reason title to the lots is
in the name of a family retreat
[Emphasis in original.]

[72]

The
    various documents filed in relation to the motion (including the 2004 Agreement
    and the Easement Summary) state specifically that the benefit of the easement
    was for present and future owners of Lots 8 and 9. As such, I agree with the motion
    judges conclusion at para. 53 of his reasons that the Nordlund Family Retreat
    Inc. would in any event be entitled to bring the action to enforce the
    easement.

[73]

I
    note that the appellants own statement of defence and counterclaim asserted
    that Donald Nordlund was acting as agent, servant or employee of Nordlund
    Family Retreat Inc. at all material times. Accordingly, there is no question
    that the appellant was aware of and accepted that Mr. Nordlund was contracting
    on behalf of the legal owner of the Nordlund Property when he secured an
    easement agreement from Mr. Plominski.

[74]

Finally,
    the appellant did not explain why the identity of the person or entity holding
    legal title to the Nordlund Property was of any significance in the
    circumstances of this case. No one attempted to resile from what Mr. Nordlund
    had promised in his dealings with Mr. Plominski; rather it was acknowledged and
    understood that Mr. Nordlund spoke for the owner of the Nordlund Property. The
    identity of the legal owner of the Nordlund Property was, in the circumstances,
    immaterial.

[75]

Accordingly,
    I would not give effect to this ground of appeal.

3. Award of
    Specific Performance

[76]

The
    appellant argues that the motion judge erred in awarding specific performance
    when he failed to consider why damages could not compensate the respondent.
    There is no merit to this argument. The appellant has not offered any basis for
    concluding that damages would have been a sufficient remedy in the
    circumstances or explained how such damages could have been assessed. The
    easement was essential in order to provide road access to the Nordlund Property,
    and specific performance was warranted.

[77]

The
    appellant also asserts that it was an error for the motion judge to order
    specific performance of a different agreement than what was provided for in the
    Easement Summary (that is, an easement 12 metres rather than 32 feet wide).
    This was not included as a ground of appeal in the appellants Amended Notice
    of Appeal, but was advanced in oral argument.

[78]

The
    motion judge explained that the 12 metre width was consistent with the
    recommendation of the surveyor to accommodate the twists and turns in the road,
    and that it would be unfair to the respondent to impose on him the cost of
    another survey. He limited the roadway to be constructed on the easement to no
    wider than 16 feet, which is the width referred to in the Easement Summary.

[79]

I
    would not interfere with the motion judges disposition. He gave effect to what
    was reasonably intended by the parties: an easement that would accommodate a
    road no wider than 16 feet. The essence of the Easement Summary was that, in
    return for a payment of $45,000 the appellant was obliged to allow the respondent
    to build a 16-foot wide road across the Plominski Property to permit access to
    the Nordlund Property from Basswood Lake Road. The fact that the easement is
    for 12 metres rather than 32 feet has no material effect on the parties
    bargain. In any event, the respondent is only entitled to use land necessary
    for the purposes of the easement, which is to build a 16-foot wide road.

4. Amendment of the
    Statement of Claim

[80]

When
    the respondent brought the motion for summary judgment, it also sought to amend
    the statement of claim in two respects: to add a claim for a declaration that
    the Easement Summary was a binding contract for an easement over the appellants
    lands in favour of the respondents lands, and for an order vesting in favour
    of the respondents lands an easement according to the completed survey. The
    notice of motion to amend the statement of claim was filed in March 2011 and
    was adjourned on consent to be heard together with the summary judgment motion.

[81]

The
    appellant asserts that the amendment ought to have been refused because it
    substantially altered the case to be met, and because he was prejudiced through
    the loss of a limitation period defence. The appellant contends that the
    respondent knew by October 30, 2008 of the alleged breach of the Easement
    Summary, and that the limitation period would have expired by October 30, 2010
    with respect to any claim under that agreement.

[82]

Rule
    26.01 requires the court to grant leave to amend pleadings at any stage of an
    action unless prejudice would result that could not be compensated for by costs
    or an adjournment. However, pleadings may not be amended to extend limitation
    periods by adding parties or claims after the expiry of a limitation period:
Joseph
    v. Paramount Canadas Wonderland
, 2008 ONCA 469, 90 O.R. (3d) 401, at
    para. 24; see also
Limitations Act, 2002
, S.O. 2002, c. 24, Sch. B.

[83]

In
    this case, the parties joined issue about the effect of the Easement Summary in
    their original pleadings. The Easement Summary was specifically referred to in
    the statement of claim as a summary of understanding, and a copy was attached
    to the pleading. In his statement of defence and counterclaim, Mr. Plominski
    pleaded that part of the consideration for entering into the summary of
    understanding was that he would receive a severed lot. The reply and defence
    to counterclaim alleged that the summary of understanding confirm[ed] the
    easement over Lot 11 and not only over Lot 10, and the [appellants] intention
    and legal obligation to provide the easement.

[84]

This
    is not a case where a new cause of action was alleged at the final hour; rather,
    the entire litigation was directed to the legal significance of the various
    communications between the parties, including the Easement Summary. In these
    circumstances, I agree with the motion judge that the amendment did not introduce
    a new cause of action, that there was no limitations issue, and that given the
    absence of any prejudice, there was no reason to refuse the amendment.

[85]

I
    would therefore not give effect to this ground of appeal.

5. The Costs Award

[86]

Since
    this was a summary judgment motion, it was appropriate for the motion judge to
    deal with the costs of the entire action. He awarded costs of $53,261.59 to the
    respondent. The costs were on a partial indemnity basis except for $10,550.56 assessed
    on a substantial indemnity basis for costs thrown away with respect to the
    adjournment of the motions.

[87]

The
    appellant seeks leave to appeal the costs award. He contends that the costs
    award reflects an error in principle because of the following:

·

The motion judge erred in concluding that the respondent was
    entirely successful. The appellant says that he was successful in establishing
    that there was a binding agreement respecting severance (notwithstanding that
    the counterclaim was dismissed);

·

The motion judge erred in awarding costs that exceeded the costs
    incurred by the appellant and that were inconsistent with the appellants
    reasonable expectations;

·

The motion judge erred in awarding the respondent $10,550.56 for
    costs thrown away on a substantial indemnity basis with respect to the
    adjournment of the motions; and

·

The motion judge erred as part of the costs thrown away, in
    awarding Ms. Nordlund, the respondents representative, costs for her travel,
    accommodation and lost wages.

[88]

I
    begin with the principle that a trial court has wide discretion in awarding
    costs: see
British Columbia (Minister of Forests) v. Okanagan Indian Band
,
    2003 SCC 71, [2003] S.C.J. No. 76, at para. 42. Costs awards made by trial
    judges should be accorded a high degree of deference. An appellate court may
    intervene where it finds that the trial judge has misdirected himself as to
    the applicable law or made a palpable error in his assessment of the facts:
Walker
    v. Ritchie
, 2006 SCC 45, [2006] S.C.J. No. 45, at para. 17;
Okanagan Indian
    Band
, at para. 43.

[89]

In
    this case, there is no apparent error in how the judge exercised his
    discretion. First, he correctly applied the principle that costs follow the
    event. The respondent was successful in obtaining summary judgment in its
    favour and in having the appellants counterclaim dismissed.

[90]

The
    appellant claimed specific enforcement of the severance and transfer of a lot, or
    in the alternative, damages. The motion judges conclusion that the Severance
    Summary was a binding agreement which required the respondent to use its
    continuing best efforts to sever and convey a lot did not represent partial
    success for the appellant. Since there was no breach, and no entitlement to
    financial compensation in the event that the severance could not be effected, the
    counterclaim was dismissed. Accordingly, there was no error in principle when
    the motion judge concluded that the respondent was entirely successful in the summary
    judgment motion.

[91]

There
    is also no basis to interfere with the quantum of costs. The motion judge refused
    the respondents claim for substantial indemnity costs throughout, and
    concluded that the appellants conduct, although reprehensible, was not
    egregious. Accordingly, he assessed costs on a partial indemnity basis, except
    for the costs thrown away in respect of the adjournment of the motions. I
    reject the appellants contention that it was an error for the motion judge to
    award costs that exceeded the appellants own costs. While the court is
    entitled to take into account the costs incurred by the losing party in
    assessing whether the costs are proportional, the objective is to fix costs
    which are fair and reasonable. In my view, that objective was met in this case.

[92]

Finally,
    with respect to the quantum of costs awarded for the adjourned motion, another
    judge had directed that the respondent was entitled to its costs thrown away, to
    be determined by the motion judge. It is not an error to award costs thrown
    away on a substantial indemnity basis. While it may have been unusual for the motion
    judge to include in the costs thrown away an amount to cover the travel expenses
    and lost revenues of a partys principal, the substantial indemnity costs
    awarded here, when considered globally, were fair, reasonable and proportional.

[93]

Accordingly,
    there is no reason to interfere with the motion judges costs award.

CONCLUSION

[94]

For
    these reasons, I would dismiss the appeal and deny leave to appeal the costs
    award. I would award the respondent its costs of the appeal fixed at $15,000,
    inclusive of disbursements and HST, payable by the appellant to the respondent.

Released: June 06, 2014

(G.E.)                                                                      
    K. van Rensburg J.A.

I agree K. Feldman J.A.

I agree Gloria Epstein J.A.


