



COURT OF APPEAL FOR ONTARIO

CITATION: Spiridakis v. Li, 2021 ONCA 359

DATE: 20210526

DOCKET: C68570

Juriansz, van Rensburg and
    Sossin JJ.A.

BETWEEN

Gus Spiridakis and Carmela
    Spiridakis

Plaintiffs (Respondents)

and

Guifang Li
,
Wanchun Jia
, and

Zolo Realty, Brokerage

Defendants (
Appellants
)

Vivian Leung and Cheryl Lau, for the
    appellants

Alan Price and Mel Aronoff, for the
    respondents

Heard: May 7, 2021 by video
    conference

On appeal from the order of Justice R.
    Cary Boswell of the Superior Court of Justice, dated April 15, 2020, with
    reasons reported at 2020 ONSC 2173.

REASONS FOR DECISION


[1]

At the hearing of the appeal, we dismissed the appeal for reasons to
    follow. These are our reasons.

[2]

The appeal arises out of a failed real estate transaction. On June 14,
    2017 the parties entered into an agreement of purchase and sale for a house in
    Stouffville. The purchase price was $1,162,500 and the closing date was
    September 14, 2017.

[3]

There were several missed closing dates and extensions. After having
    agreed to an extension to October 26, 2017, the appellants were unable to close
    on that date, because the purchasers of their own home were unable to close.
    The closing of the Stouffville property purchase was extended to October 30, and
    on that date, the appellants advised they could not close. The respondents
    counsel advised that this was an anticipatory breach. The appellants counsel
    requested a further extension, which the respondents accepted, on proposed
    modest terms. The appellants did not respond and did not complete the purchase.

[4]

The respondents relisted the Stouffville property on November 2, 2017.
    On March 9, 2018, they entered into an agreement to sell the property for $900,000
    with a closing date of June 28, 2018. They had agreed to purchase another
    property, and after the appellants default, used bridge financing to complete
    that purchase.

[5]

The respondents sued the appellants for damages for breach of the
    agreement of purchase and sale. The appellants defended the action and
    counterclaimed for the return of their deposit and a declaration that the
    purchase and sale agreement had expired as of October 30, 2017. They also
    commenced a third party action against their real estate agent and lawyer and
    the parties who had agreed and then failed to complete the purchase of their
    home.

[6]

The respondents moved for summary judgment on their claim in the main
    action and to dismiss the appellants counterclaim. Judgment was granted for
    $298,847.67 ($30,000 of which was ordered to be paid by the release of the
    deposit to the respondents), together with pre-judgment and post-judgment
    interest on the full judgment amount, and costs of $22,340.18. The motion judge
    stayed enforcement of the judgment for a period of six months without prejudice
    to the appellants bringing a motion to extend the stay prior to its expiry.

[7]

On their appeal, the appellants raise substantially the same arguments
    they made in opposition to the summary judgment motion. They assert that the
    motion judge erred: (a) in concluding that there was no genuine issue requiring
    a trial with respect to their defences based on
non est factum
and the
    respondents failure to tender; (b) in granting partial summary judgment in
    the face of an outstanding third party claim; and (c) in his assessment of
    damages, in particular by concluding that the respondents bridge financing
    costs were foreseeable; and in concluding that the respondents took reasonable
    steps to mitigate their damages. The appellants also seek to appeal the costs
    award.

[8]

The exercise of powers under Rule 20 attracts deference. Whether there
    is a genuine issue for trial is a question of mixed fact and law; in the
    absence of an extricable error in principle or palpable and overriding error,
    this determination should not be disturbed on appeal:
Hryniak v. Mauldin
,
    2014 SCC 7, [2014] 1 S.C.R. 87, at para. 81. No such error has been
    demonstrated in this case.

[9]

With respect to the
non est factum
argument, contrary to the
    appellants argument, the motion judge explained his finding that there was no
    genuine issue for trial concerning what the appellants understood about the
    purchase and sale transaction. He accepted that each of the appellants had
    limited education and facility with the English language, and was relatively
    unsophisticated, but he stated, there is no evidence before me that the
    defendants were mistaken, as a result of a misrepresentation or otherwise, as
    to the nature or character of the agreement to purchase the Stouffville
    property. He noted that the only assertion of mistake related to the
consequences
of breach: according to Mr. Jias affidavit, he believed that if he and his
    wife failed to close the purchase, they would only risk losing their deposit
    and financing fees.

[10]

The
    motion judges findings and his rejection of the defence of
non est factum
are entirely supported by the record. As he observed, the appellants who had
    purchased two previous properties, understood they were purchasing the
    Stouffville property, that there was a financing condition, and that the
    agreement of purchase and sale would remain binding after they waived that
    condition.

[11]

With
    respect to the alleged failure to tender, the motion judge noted that, while
    there was a factual dispute about whether the respondents tendered, this was a
    case of anticipatory breach. He stated that the law is quite clear that an
    innocent party need not go through the meaningless exercise of tendering in
    circumstances of anticipatory breach. The parties had agreed that time was of
    the essence, meaning that they agreed that the time limit manifested by the
    fixed closing date was an essential term, such that breach of it would permit
    the innocent party to terminate the agreement. When the appellants lawyer
    communicated that they were unable to close on the scheduled date, the
    respondents lawyer correctly identified that communication as an anticipatory
    breach and the respondents were released thereby from any obligation to tender.

[12]

Contrary
    to the appellants argument, the motion judges finding that the appellants
    manifested an intention not to complete the transaction on October 30 was fully
    supported by the evidence: their lawyer sent a letter advising that they would
    be unable to close that day, prompting a response by the respondents lawyer
    that this was an anticipatory breach. If, as the appellants contend, they did
    not know about some of the lawyers correspondence at the time, that is a
    matter for their third party claim, and does not assist in their defence.

[13]

As
    for the argument that the motion judge erred in granting summary judgment in
    the main action while the third party claim was outstanding, there was no
    error.

[14]

This
    court has cautioned that a motion for
partial
summary judgment should be
    considered to be a rare procedure that is reserved for an issue or issues that
    may be bifurcated from those in the main action and that may be dealt with
    expeditiously and readily in a cost effective manner:
Butera v. Chown,
    Cairns LLP
, 2017 ONCA 783, 137 O.R. (3d) 561, at para. 34. Since the
    respondents moved for judgment on their entire claim against the appellants,
    and dismissal of the counterclaim, their motion was not for partial summary
    judgment in the sense described in
Butera.
Although this was not a
    motion for
partial
summary judgment, it was nevertheless appropriate for
    the motion judge to consider whether the issues in the main action and the
    third party action were intertwined, such that there was a potential for
    inconsistent findings if judgment were granted in the main action in favour of
    the respondents, while the third party action proceeded.

[15]

The
    motion judge undertook the appropriate analysis. He concluded that the
    respondents claims against the third parties were distinct and severable from
    the issues in the main action. Indeed, Mr. Jias affidavit in response to the
    summary judgment motion makes it clear that the appellants real concerns are
    with various alleged acts of misconduct of their real estate agent and lawyer
    and the people who failed to complete the purchase of their home, that, among
    other things, led them to believe they would be able to close the purchase of
    the Stouffville property and prevented them from doing so. Contrary to the
    appellants argument, the defences are not inextricably intertwined with the
    claims made in the third party action. There is no risk of an inconsistent
    finding on the issues in the third party claim. The third parties, who did not
    defend the main action, will be bound by the findings in the main action: r. 29.05(5).

[16]

As
    for the question of damages, there is no error in the motion judges conclusion
    that there was no genuine issue for trial concerning the amount of the
    respondents damages, or the issue of mitigation.

[17]

The
    amount included the minimum monthly payments made by the respondents on two
    lines of credit they had accessed for bridge financing to complete the purchase
    of their home at the end of October 2017 until they managed to sell the
    Stouffville property in June 2018. There is no error in the motion judges conclusion
    that such costs were objectively foreseeable in the particular circumstances,
    where both the appellants and the respondents were purchasing a new home at the
    same time that they were selling their respective properties.

[18]

As
    for the question of mitigation, it was not sufficient that Mr. Jias affidavit
    raised a concern that the respondents had not provided evidence regarding
    their efforts to sell the property and to mitigate their loss, including
    listing agreements, marketing materials, offers received, etc. The only
    evidence the appellants offered on mitigation was a letter of opinion from Mr.
    Au, a real estate agent, which spoke to the market value of the Stouffville
    property at the end of October 2017, in March 2018 and in June 2018 when it
    sold. The motion judge considered the limitations of this evidence, which did
    not address the appellants main concern  that it took too long to sell the
    property in a declining market. He reasonably accepted that the price the
    respondents obtained for the Stouffville property (which was 95% of the fair
    market value proposed by Mr. Au), considering their ongoing carrying costs for
    the home and the cost of bridge financing, was reasonable. The motion judge
    properly considered that the appellants had chosen not to cross-examine the
    respondents on why the property was listed for so long, when he concluded that
    mitigation was not a genuine issue for trial.

[19]

Finally,
    no error in principle is alleged or apparent in respect of the motion judges
    determination of costs.

[20]

The
    motion judges reasons are a model of clarity. He carefully considered all of
    the appellants arguments opposing summary judgment, made findings of fact
    based on the record and explained with reference to the applicable legal
    principles why there was no genuine issue for trial, and why summary judgment
    should issue in the main action. He reasonably granted a stay of enforcement of
    the judgment, the terms of which are not questioned in this appeal.

[21]

For
    these reasons the appeal was dismissed. Costs to the respondents are fixed at $10,000,
    inclusive of HST and disbursements.

R.G.
    Juriansz J.A.

K.
    van Rensburg J.A.

L. Sossin
    J.A.


