



COURT OF APPEAL FOR ONTARIO

CITATION: Grabarczyk v. 2198802 Ontario Limited, 2018 ONCA 47

DATE: 20180122

DOCKET: C63761

Simmons, Roberts and Nordheimer JJ.A.

BETWEEN

Robert Grabarczyk

Applicant

(Respondent in appeal)

and

2198802 Ontario Limited, Mohammad Reza Esmaeili
,

and AB Corporation

Respondents

(Appellants)

Julian Binavince, for the appellants

Jonathan Rosenstein, for the respondent

Heard and released orally: January 15, 2018

On appeal from the order of Justice Andra Pollak of the
    Superior Court of Justice, dated April 19, 2017.

REASONS FOR DECISION

[1]

The appellant, 2198802 Ontario Limited (the appellant), offered to
    purchase real property from the respondent under an offer that was accepted on
    October 10, 2015.  The offer stipulated that it was conditional on the
    appellant satisfying itself of certain matters and that unless the appellant
    gave notice in writing not later than 11:59 p.m. thirty (30) days after
    acceptance, that this condition is fulfilled, this Offer shall be null and void
    and the deposit shall be returned (the due diligence clause).  The 30 day
    period elapsed on November 9, 2015.  The appellant did not deliver notice in
    writing that the condition was satisfied by that date.  Nonetheless, the
    appellant submitted an Amendment to Agreement of Purchase and Sale to the
    respondent that was accepted on November 14, 2015.  The Amendment purported to
    delete the due diligence clause from the original agreement and to substitute
    an identically worded due diligence clause, save that sixty (60) was
    substituted for thirty (30).

[2]

The application judge concluded that even though the original agreement had
    become null and void, the amendment reflected an intention to create a new
    agreement incorporating all the terms of the original agreement, but modifying
    the original due diligence period from 30 days to 60 days from the date of
acceptance

of the original offer
.

[3]

While holding that there was a new agreement, the application judges interpretation
    treats it, in effect, as a resurrection of the original agreement.  This was an
    error.  The application judge failed to turn her mind to the distinction between
    resurrection of a prior agreement; creation of a new agreement; the parties
    intentions in that regard; and the parties intentions had they turned their
    minds to the fact that the original agreement had become null and void.

[4]

In our view, the record before us does not sufficiently address the
    parties intentions had they turned their mind to the fact that their original
    agreement had become null and void.  This lacuna creates an issue requiring an
    action rather than an application.

[5]

Accordingly, the appeal is allowed.  The application judges order is
    set aside and an order is substituted directing that the matter is to proceed
    by action, with the parties to deliver pleadings accordingly.   The costs of
    the appeal are to the appellants in the amount of $6,000 on a partial indemnity
    scale inclusive of disbursements and all applicable taxes.

Janet Simmons J.A.

L.B. Roberts J.A.

I.V.B. Nordheimer J.A.


