



COURT
    OF APPEAL FOR ONTARIO

CITATION: 2484234 Ontario Inc. v. Hanley
    Park Developments Inc., 2020 ONCA 273

DATE: April 29, 2020

DOCKET:
C67171

Tulloch, van Rensburg and
    Zarnett JJ.A.

BETWEEN

2484234 Ontario Inc.

Applicant (Appellant)

and

Hanley Park Developments Inc.

Respondent (Respondent)

Richard P. Quance, for the appellant

Howard J. Alpert and Vivian Xu, for
    the respondent

Heard: February 7, 2020

On appeal from the judgment of Justice Jane
    Ferguson of the Superior Court of Justice, dated June 13, 2019, with reasons
    reported at 2019 ONSC 3696.

Zarnett J.A.:


OVERVIEW

[1]

The appellant appeals the denial of its claim
    for rectification of a document, entitled Transfer Agreement, that it entered
    into with the respondent. Under the Transfer Agreement, the respondent was to
    transfer, and provide an easement over, certain lands. The appellant required
    this transfer and easement to construct an access road to a proposed
    subdivision the appellant had acquired. The appellants rectification request
    was to add additional lands to those specified in the Transfer Agreement; the
    lands specified in the Transfer Agreement were insufficient to build the access
    road.

[2]

Rectification is an equitable remedy available
    to correct a document that fails to accurately record the parties true
    agreement. It is not available to correct an improvident bargain or to fill a
    gap in the parties true agreement, even when the omission defeats what one (or
    both) of the parties was seeking to achieve. As an equitable remedy, it is also
    not available when the party seeking it does not have clean hands.

[3]

For the reasons that follow, I conclude that the
    application judge erred in finding that the appellant did not meet the test for
    rectification. The parties true agreement was not accurately recorded in the
    Transfer Agreement. The appellants conduct did not disentitle it to equitable
    relief. I would therefore allow the appeal.

FACTS

[4]

On February 8, 2017, the appellant, 2484234
    Ontario Inc.,
[1]
entered into an Agreement of Purchase and Sale (the February Agreement) with
    the respondent, Hanley Park Developments Inc. The February Agreement provided
    for the appellant to purchase certain lands (the Development Lands) from the
    respondent located in the City of Belleville (the City). The respondent had
    obtained conditional approval of a Draft Plan of Subdivision contemplating 258
    residential dwelling units on the Development Lands.

[5]

The purchase price for the Development Lands
    under the February Agreement was $4.3 million; the closing date was March 9,
    2017.

[6]

The February Agreement was conditional for a
    10-day period during which the appellant was permitted to conduct due diligence
    with respect to, among other things, the conditions of draft approval and other
    conditions imposed by any governmental authority. On February 18, 2017, the
    appellant waived its rights under that provision.

[7]

One of the conditions of approval of the Draft
    Plan of Subdivision was that there be an access road to connect the proposed
    subdivision on the Development Lands to an existing road, Janlyn Crescent,
    which, at the time, ended before it reached the border of the Development
    Lands. To meet that condition, a road (the Access Road) had to be built
    across a neighbouring property (the Adjacent Property) to connect the
    Development Lands to Janlyn Crescent.

[8]

The respondent owned the Adjacent Property. The
    Adjacent Property was not included in the lands to be conveyed by the
    respondent under the February Agreement. The respondents principal gave
    evidence that the respondent intended to apply for approval to build
    residential lots on certain portions of the Adjacent Property.

[9]

Shortly before the February Agreements
    scheduled closing date, there were dealings between the parties concerning the
    Access Road.

[10]

On March 6, 2017, Mr. Gord Patterson, an
    engineer, sent an email to representatives of both the appellant and the
    respondent. He stated: Parts 1, 2, 3 and 4 are
required
for the Janlyn connection. The alignment of this connection has been the
    subject of much review by the City. It would not surprise me if they wanted to
    further review and adjust when faced [sic] the actual dedication (emphasis
    added).

[11]

The Parts referred to in Mr. Pattersons email
    are parts of the Adjacent Property. Mr. Patterson is described in the evidence
    as the engineer for the project. Counsel for the appellant advised in argument
    that the project engineer was hired by the respondent.

[12]

On March 7, 2017, the appellants lawyer wrote
    to the respondents lawyer referring to the condition of Draft Subdivision
    approval that called for a connection to Janlyn Crescent. He stated: it has
    come to our attention that your client owns an adjacent property, which in
    part, is required for the Janlyn Crescent connection. The letter asked if the
    respondent would be agreeable to selling the Adjacent Property on terms whereby
    the respondent would have an option to purchase back, for $1.00, those certain
    lands of the Adjacent Property which are not required for the said Janlyn
    Crescent connection. The letter reiterated that this was because access from
    Janlyn Crescent is required for final plan approval by the City. The letter
    also requested an 8-day extension of the closing date for the acquisition of
    the Development Lands.

[13]

The same day, March 7, 2017, the respondents
    lawyer wrote back to the appellants lawyer. This letter stated that the
    respondent was not prepared to extend the closing date for the Development
    Lands or to sell the entire Adjacent Property. However, the letter went on to
    state that the respondent was prepared to transfer and grant an easement over a
    portion of the Adjacent Property. The letter stated: My client, so as to
    assist your client and on a without prejudice basis, is prepared to do the
    following:

1. Convey to your client the parcel of land outlined as Parts
    1, 2, 3 and 4 on the attached draft reference plan.
The
    Engineer for the project has advised my client that these 4 parts will be
    sufficient for the road which is to be built to access the subdivision.

2. My client will apply for a severance of those lands namely
    Parts 1, 2, 3, and 4 on the draft reference plan from its retained lands and
    will either convey it to your client or to the municipality. All costs
    associate [sic] with the severance to be borne by your client together with the
    registration of same;

3. Lots 38, 39 and 40 will be effected [sic] by the severance.
    Lot 40 will be conveyed in its entirety and the frontages of Lots 38 and 39
    will be affected. My client requires as a condition of the transfer to your
    client or the municipality, at your clients expense that the municipal
    services presently at the lot line of Lots 38 and 39 will be restored to the
    new lot line to be created after the severance.

4. So as
to
    facilitate the development of the proposed subdivision
my clients will
    provide a temporary easement over the said Parts 1, 2, 3 and 4 on the draft
    reference plan for a term being the earlier of five (5) years or until the
    severance is obtained.

Please advise whether the above is acceptable
    to your client.

[14]

As I explain below, the application judge
    implicitly proceeded on the basis that the terms of the March 7, 2017 letter
    from the respondents lawyer were accepted by the appellant and that they were
    the basis for the Transfer Agreement described below.

[15]

On March 9, 2017, the closing date for the
    February Agreement, the appellant and respondent entered into the Transfer
    Agreement, which was a formal agreement relating to a transfer and easement
    over part of the Adjacent Property (the Transfer Agreement).
[2]
The Transfer Agreement
    referred to Parts 1, 2, 3 and 4 on a draft reference plan that was attached,
    and defined these parts as the Property. It then provided for a number of
    things to occur. Those material to this appeal were the following.

[16]

First, the Transfer Agreement either required
    the appellant to obtain a severance of the Property from the balance of the
    Adjacent Property, or alternatively, gave the appellant the right to direct the
    respondent to transfer the Property to the City (Clause 1). Second, the
    Transfer Agreement provided that the respondent would use its best efforts to
    cooperate with the appellant in connection with the severance of the Property.
    In that regard, that is, in regard to the severance, the respondent was
    required to execute any necessary documents within 7 business days of a written
    request; if the respondent failed to do so, the Transfer Agreement permitted
    the appellant to execute the necessary documents for the severance as attorney
    for the respondent (Clause 2). The appellant was also required to use its
    best efforts to obtain the severance (Clause 7). Third, the Transfer
    Agreement required the appellant to obtain the consent from the Committee of
    Adjustment for the Severance or the transfer of the Property to the City by no
    later than September 9, 2018, failing which the Transfer Agreement would
    become null and void (Clause 3). Fourth, the Transfer Agreement required the
    appellant to restore the municipal services to the new lot line that would be
    created following the severance and construction of the new Access Road
    (Clause 5). Finally, the Transfer Agreement required the respondent to
    provide a temporary easement over the Property until the earlier of (a) a
    period of five years, (b) the severance being obtained, or (c) the transfer to
    the City occurring (Clause 6).

[17]

On March 9, 2017, pursuant to the Transfer
    Agreement, the respondent granted the appellant a formal easement over Parts 1,
    2, 3 and 4 for the construction of a roadway. The formal easement document
    provided that the appellant could enter on,exit frompass and repass at any
    and all times in, over, along, upon, across, through and under [Parts 1, 2, 3
    and 4]for the purposes necessary or convenient to the exercise and enjoyment
    of the [appellants] rights herein and
for the purpose of
    accessing to and from Janlyn Crescent the [Development Lands]
 (emphasis
    added).

[18]

At some point prior to the September 9, 2018
    deadline for consent to severance or transfer to the City of the lands
    described in the Transfer Agreement, the appellant discovered that Part 5 of
    the Adjacent Property was also required for the Access Road. There is some
    evidence that it was the City that alerted the appellant to this.

[19]

Part 5 is a narrow sliver of land in an
    important location. It abuts the Development Lands on one side and Part 4 on the
    other. Without Part 5, a road over Parts 1, 2, 3 and 4 would not connect Janlyn
    Crescent to the Development Lands. The respondents representative conceded on
    cross-examination that he had been aware of this at all relevant times. He was
    always aware that, without Part 5, Parts 1 to 4 of the Adjacent Property were
    not sufficient for the Access Road.

[20]

On August 27, 2018, pursuant to the alternative
    option provided for in the Transfer Agreement, the appellant elected that,
    instead of a severance, the lands that were the subject of the Transfer
    Agreement should be transferred to the City. On August 30, 2018, the
    appellants lawyer sent an email to the respondents lawyer advising that she
    had sent him a transfer document to effect this transfer. The respondents
    lawyer reviewed the transfer document and discovered that it included Parts 1
    to 5 of the Adjacent Property, even though Part 5 was not referenced in the
    definition of Property in the Transfer Agreement. The respondent objected to
    this transfer document because of the inclusion of Part 5.

[21]

After the respondent refused to execute a
    transfer document which included Part 5, the appellant, on September 7, 2018,
    provided a transfer document for the respondents execution in favour of the
    City for Parts 1, 2, 3 and 4. It was not executed, as the respondent took the
    position that it was entitled to 7 business days to sign. The respondent then
    took the position that the Transfer Agreement became null and void on September
    10, 2018, in the absence of a consent to a severance or a transfer to the City
    having occurred by September 9, 2018.

THE DECISION BELOW

[22]

The appellant commenced an application seeking
    rectification of the Transfer Agreement to include Part 5 and seeking specific
    performance of the Transfer Agreement, as rectified. The application was
    dismissed.

[23]

The application judge accepted the submission of
    appellants counsel that the appellants claim for rectification was one based
    on its unilateral mistake about the Transfer Agreement: at para 27. While the application
    judge did not elaborate on this point, she appears to have accepted that the
    appellant was mistaken about whether the Transfer Agreement covered lands
    sufficient for the Access Road, and that the respondent was not similarly
    mistaken. As mentioned above, the respondents principal gave evidence during
    the course of the application that he was always aware that the Transfer
    Agreement only included Parts 1 to 4 and that they were insufficient for the
    Access Road.

[24]

The application judge noted that rectification
    is an equitable remedy which the appellant could not obtain if it came to court
    with unclean hands. She held that the claim for rectification failed under
    this doctrine because the appellant breached certain terms of the Transfer
    Agreement and was therefore disentitled to equitable relief: at paras. 39-41.

[25]

Specifically, the application judge concluded
    that the appellant breached Clause 7 of the Transfer Agreement by failing to
    use its best efforts to obtain the approval of the Committee of Adjustments for
    a severance; that the requirements of Clause 5 were not satisfied because the
    appellant failed to restore the municipal services to the new lot line by the
    date of the registration of the transfer; and that the Transfer Agreement was
    null and void under Clause 3 because the appellant did not give the respondent
    7 days to execute the transfer document in favour of the City and thus missed
    the September 9, 2018 deadline: at para. 40.

[26]

In addition, the application judge held that the
    appellants claim did not meet the test for rectification applicable to a case
    of unilateral mistake (a case where the assertion is that one party was
    mistaken about the terms of the formal document even though the other party was
    not). She articulated the test for rectification set out by the Supreme Court
    of Canada in
Canada (Attorney General) v. Fairmont Hotels Inc.
, 2016
    SCC 56, [2016] 2 S.C.R. 720, at paras. 31-32 of her reasons, as follows:

In
Fairmont
, the Supreme Court
    of Canada held that, where the error of the instrument results from a common
    mistake, rectification of an agreement is available upon the court being
    satisfied that,

(i) The parties had reached a prior
    agreement whose terms are definite and ascertainable;

(ii) The agreement was still effective
    when the instrument was executed;

(iii) The instrument fails to record
    accurately that prior agreement; and

(iv) If rectified as proposed, the
    instrument would carry out the agreement.

In the case of a unilateral mistake,
Fairmont
also held that, in addition to the four requirements set out above, the court
    must also be satisfied that,

(v) the party resisting rectification
    knew or ought to have known about the mistake; and

(vi) permitting that party to take
    advantage of the mistake would amount to fraud or the equivalent of fraud.
    [See
Fairmont
,

at paras. 14-15.]

[27]

The application judge concluded that the
    appellants claim failed to meet steps (iii) and (vi) of the
Fairmont
test: at paras. 42-44. With respect to step (iii), she held that the Transfer
    Agreement accurately recorded the prior agreement because Part 5 was never
    discussed nor made the subject matter of a prior agreement: at para. 43. With
    respect to step (vi), she held that permitting the respondent to take advantage
    of the appellants mistake did not amount to fraud or its equivalent in this
    case because there was no clause requiring the respondent to convey all lands
    necessary for the development of the access road, the respondent did not
    intentionally deceive the appellant, and the appellant should have verified the
    boundaries pursuant to the due diligence condition: at para. 44.

[28]

The application judge did not consider whether,
    had she granted rectification, specific performance of the Transfer Agreement
    as rectified would have been the appropriate remedy.

ISSUES AND PARTIES
    POSITIONS

[29]

The parties agree that the application judge
    correctly set out the test for rectification and correctly treated the
    appellants claim as requiring fulfillment of all six elements set out in para.
    26 above (as the appellants claim was one of unilateral mistake). The parties
    also agree that rectification is an equitable remedy that can be denied to a
    party under the clean hands doctrine.

[30]

The appellant makes two submissions with respect
    to the main issues on appeal. First, it asserts that the application judge
    erred in her approach and application of the test for rectification. The
    appellant argues that the parties correspondence makes it clear that the
    appellant was seeking a transfer of and easement over the parts of the Adjacent
    Property that would allow development of the Access Road and that the
    respondent communicated that it was agreeable to doing so, even while it was
    specifying one less part of its property than it knew would be sufficient.

[31]

Second, the appellant submits that the
    application judge made palpable and overriding errors in finding that it had
    breached the Transfer Agreement and was therefore disentitled to equitable
    relief.

[32]

The respondent does not dispute that it knew
    that Parts 1 to 4 were insufficient for the construction of the Access Road.
    However, it states that the application judge was rightit simply never agreed
    to transfer Part 5 and that rectification is therefore unavailable. The
    respondents position is that the appellant should have verified what it needed
    and cannot now complain if it signed an agreement that did not achieve its
    goals. Further, the respondent submits that the application judge did not err
    in determining that the appellant breached the Transfer Agreement and thus
    lacked clean hands.

[33]

The parties positions raise in sharp relief the
    extent of, and limits on, the remedy of rectification. Because of the nature of
    the issues, I address first whether the appellant has a proper claim for rectification.
    I then turn to whether the doctrine of clean hands bars what otherwise would be
    an entitlement to the remedy.

ANALYSIS

(1)

Parameters of the Rectification Remedy

[34]

The six-step test articulated in
Fairmont
is best understood in light of the discussion in that case about the parameters
    of the rectification remedy. Writing for the majority, Brown J. underscored the
    importance of distinguishing between what rectification can do, which is
    correct a document to accord with what was agreed, and what it cannot do, which
    is change an agreement to make it achieve a partys desired result:

Rectification is limited to cases where the
    agreement between the parties was not correctly recorded in the instrument that
    became the final expression of their agreement [citation omitted]. It does not
    undo unanticipated effects of that agreement. While, therefore, a court may
    rectify an instrument which inaccurately records a partys agreement respecting
    what was to be done, it may not change the agreement in order to salvage what a
    party hoped to achieve:
Fairmont
, at para. 3.

[35]

At para. 13 of
Fairmont
, Brown J.
    stressed that while rectification corrects mistakes in the recording of a prior
    agreement, it is not available to correct mistakes in the prior agreement
    itself:

It bears reiterating that rectification is
    limited solely to cases where a written instrument has incorrectly recorded the
    parties antecedent agreement (Swan and Adamski, at §8.229). It is not
    concerned with mistakes merely in the making of that antecedent agreement: E.
    Peel, The Law of Contract (14th ed. 2015), at para. 8-059;
Mackenzie v.
    Coulson
(1869), L.R. 8 Eq. 368, at p. 375 (Courts of Equity do not
    rectify contracts; they may and do rectify instruments). In short,
    rectification is unavailable where the basis for seeking it is that one or both
    of the parties wish to amend
not the instrument
recording their
    agreement, but
the agreement itself
. More to the point of this appeal,
    and as this Court said in [
Performance Industries Ltd. v. Sylvan Lake Golf &
    Tennis Club Ltd.
, 2002 SCC 19, [2002] 1 S.C.R. 678, at para. 31], [t]he
    courts task in a rectification case isto restore the parties to their
    original bargain, not to rectify a belatedly recognized error of judgment by
    one party or the other.

[36]

The majority in
Fairmont
used different
    terms to describe what must be found to have existed so that rectification can
    bring a formal document into conformity with it: the parties true agreement
    (para. 12); their prior or antecedent agreement (para. 14); and their
    original bargain (para. 13). These terms are variations on a theme and should
    be considered together. The search for something prior, antecedent or
    original connotes a search for something that existed in fact before the
    allegedly mistaken formal document; the terms agreement, bargain and true
    underscore that what existed must, like any agreement, be interpreted so as to
    derive what the parties actually agreed totheir true agreement.

[37]

But what the majority in
Fairmont
made
    clear is that rectification cannot go beyond what the parties truly agreed
    tothe meaning properly given to their agreementinto the realm of what one or
    both parties may have intended as a result or was hoping to achieve, but that
    was never made part of the true agreement.

[38]

This distinction is illustrated by the facts of
Fairmont
.
    In 2002 and 2003, Fairmont Hotels Inc. (Fairmont) and two of its subsidiaries
    had participated in a financing arrangement with a third party, involving
    reciprocal loans. Fairmont entered into those arrangements with the goal of
    ensuring foreign exchange tax neutrality. In 2006, a change in Fairmonts
    ownership led to a modified plan which allowed Fairmont to fully hedge its
    exposure to foreign exchange tax, without addressing that of its subsidiaries.
    The matter of similarly protecting the subsidiaries from exposure was
    deferred, without any specific plan as to how that might be achieved:
Fairmont
,
    at para. 5.

[39]

In 2007, overlooking the fact that nothing had
    been done to protect the subsidiaries from tax exposure, but wishing to
    terminate the reciprocal loan arrangements at the third partys request,
    Fairmont redeemed its shares in the subsidiaries. This transaction resulted in
    a tax liability. Fairmonts rectification request was to change the share
    redemption to a loan between Fairmont and the subsidiaries in order to avoid
    the tax liability:
Fairmont
, at paras. 6-7.

[40]

This rectification request failed, however,
    because there was no variation between any prior agreement and the formal document
    sought to be rectified. The prior agreement only contemplated a redemption of
    shares, and moreover, fulfilled the contractual objective of terminating the
    reciprocal loan arrangements. The same was true of the formal document. The
    variation that occurred was between the tax effect Fairmont intended to
    accompany its contractual objectivetax neutralityand the tax effect of the
    agreed upon share redemptionadverse taxes. This was insufficient to allow
    rectification because:

[R]ectification corrects the recording in an
    instrument of an agreement (here, to redeem shares). Rectification does not
    operate simply because an agreement failed to achieve an intended effect (here,
    tax neutrality)  irrespective of whether the intention to achieve that effect
    was common and continuingRectification does not correct common mistakes in
    judgment that frustrate contracting parties aspirations or, as here,
    unspecified plans; it corrects common mistakes in instruments recording the
    terms by which parties, wisely or unwisely, agreed to pursue those aspirations:
Fairmont
, at paras. 30-31.

(2)

Identification of the Prior Agreement in this
    Case

[41]

An important question in any claim for
    rectification is a central question in this one: did the parties have an
    agreement that preceded the document sought to be rectified (the Transfer
    Agreement), and if so, what were the terms of that prior agreement and what did
    they mean? It is only by answering this question that one can address whether
    the appellant is seeking to correct an error in the
recording
    of
the parties true agreement, or is seeking to insert something that
    was never the subject of a prior agreement.

[42]

The existence of any agreement is a question of
    mixed fact and law:
Purves et al. v. Chisel
, 2011 MBCA 57, 268 Man. R.
    (2d) 148, at para. 11;
Imperial Pacific Greenhouses Ltd. v. R.
, 2011
    FCA 79, 420 N.R. 71, at para. 10.

[43]

Here, the application judge was satisfied that
    there was a prior agreement. As noted above, she held that the appellant did
    not have a proper claim for rectification because it did not satisfy two steps
    of the
Fairmont
test, steps (iii) and (vi). The application judge did
    not find a failure to meet steps (i) or (ii), which, in this case, involve
    there being a prior agreement with definite and ascertainable terms that
    continued in force until the signing of the formal Transfer Agreement. Step
    (iii), which the application judge found not to be fulfilled, presupposes the
    existence of a prior agreement since it calls for a comparison between the
    prior agreement and the document sought to be rectified. This comparison can
    only be done if a prior agreement exists. The application judge made that very
    comparison. In finding a failure to meet step (iii), the application judge
    stated: the agreement to convey Parts 1, 2, 3, and 4 accurately records
the prior agreement
 (emphasis added): at para. 43.

[44]

Although the application judge was clearly
    satisfied that there was a prior agreement, she did not expressly identify
    where the terms of the antecedent agreement were found nor comprehensively
    describe their content.

[45]

In my view, there is only one document that the
    application judge could have been referring to as containing the terms of the
    antecedent agreement, and that is the respondent lawyers letter of March 7
    (excerpted at para. 13 of these reasons). This March 7 letter set out terms and
    called for their acceptance. Although the application judge did not make a
    finding of express acceptance of the March 7 letter, she was entitled to infer
    acceptance given the absence of any dispute to its terms or of any continuing
    negotiations after the correspondence leading up to the Transfer Agreement. The
    application judges finding that there was a prior agreement, as understood
    within the meaning of the rectification test, means that the March 7 letter
    from the respondents lawyer, as opposed to any other negotiations, terms or
    proposals, was the basis on which the parties moved forward to the Transfer
    Agreement.

[46]

I do not consider the fact that the terms in the
    March 7 letter were presented on a without prejudice basis, as respondents
    counsel emphasized in argument, to be an obstacle to this conclusion. The
    without prejudice language would not necessarily continue to have force upon
    acceptance of the terms of the letter. Moreover, for the purposes of
    rectification, the antecedent agreement need not be a binding agreement or
    contain all of the relevant terms of a complete agreement. It must only express
    the parties agreement on specific terms, and do so in a way which is definite,
    ascertainable and continuing, even if the antecedent agreement is intended to
    be preliminary to a more formal agreement: John D. McCamus,
The Law of
    Contracts
, 2nd ed. (Toronto: Irwin Law, 2012) at pp. 588-589.

(3)

Interpretation of the Prior Agreement

[47]

The next question to be determined is the
    meaning of the terms of the prior agreement. Indeed, a
Fairmont
analysis cannot be properly undertaken without determining what the terms of
    the prior or antecedent agreement mean.

[48]

The application judge made three findings that,
    according to her, indicated what the antecedent agreement did
not
provide for: that the respondent gave evidence that
    its intention was only to convey Parts 1, 2, 3 and 4 (at para. 37); that [n]o
    representations or warranties were provided with respect to the required Parts
    for the access road (at para. 38); and that [t]he conveyance of Part 5 was
    never discussed let alone made the subject matter of a prior agreement (at para.
    43). In my view, she made reversible errors in coming to these conclusions.

[49]

The application judge did not advert to the
    actual text of the antecedent agreement or identify or apply the interpretive
    principles employed to determine the meaning of the words used. Indeed, the
    approach she adopted is contrary to the applicable interpretive principles. As
    a result, her interpretation is not subject to deference:
Sattva Capital
    Corp. v. Creston Moly Corp.
, 2014 SCC 53, [2014] 2 S.C.R. 633,
at para. 53.

[50]

For example, the application judge relied on
    the evidence of the respondent that it did not intend to transfer more than
    Parts 1 to 4. Although this fact may be relevant to other parts of the
    rectification analysis (specifically steps (v) and (vi)), it is irrelevant to
    the meaning of the antecedent agreement, which is determined objectively.

[51]

The principles of contractual interpretation
    exclude consideration of either partys subjective intention in determining
    whether the parties reached an agreement. In
Olivieri v. Sherman
, 2007
    ONCA 491, 86 O.R. (3d) 778, at para. 44, this court re-stated the principle
    that only objective factors are relevant in determining whether the parties
    reached a consensus:

As was stated by Middleton J.A. in [
Lindsey
    v. Heron Co.
(1921), 64 D.L.R. 92 (Ont. C.A.)] at 98-9, quoting
Corpus Juris
, vol. 13 at 265:

The apparent mutual assent of the parties essential to the
    formation of a contract, must be gathered from the language employed by them,
    and the law imputes to a person an intention corresponding to the reasonable
    meaning of his words and acts. It judges his intention by his outward
    expressions and excludes all questions in regard to his unexpressed intention.
    If his words or acts, judged by a reasonable standard, manifest an intention to
    agree in regard to the matter in question, that agreement is established, and
    it is immaterial what may be the real but unexpressed state of his mind on the
    subject.

[52]

Equally, evidence of a partys subjective
    intention is irrelevant to what the parties agreement means:
Eli Lilly
    & Co. v. Novopharm Ltd.
, [1998] 2 S.C.R. 129, at para. 54;
Sattva
,
    at paras. 59-61.

[53]

The principle that subjective intentions are
    ignored when interpreting an agreement is also applicable to interpreting an
    antecedent agreement in rectification cases:
McLean v. McLean
, 2013
    ONCA 788, 313 O.A.C. 364, at para. 61. In
Fairmont
, at para. 29, the
    court quoted the following from the English Court of Appeal in
Frederick E.
    Rose (London) Ld. v. William H. Pim Jnr. & Co.
, [1953] 2 Q.B. 450
    (C.A.), at p. 461:

Rectification is concerned with contracts and
    documents, not with intentions. In order to get rectification it is necessary
    to show that the parties were in complete agreement on the terms of their
    contract, but by an error wrote them down wrongly; and in this regard, in order
    to ascertain the terms of their contract, you do not look into the inner minds
    of the parties  into their intentions  any more than you do in the formation
    of any other contract.

[54]

For this reason, the application judges
    reliance on the respondents subjective intention not to transfer more than
    Parts 1, 2, 3 and 4 was an error, as it was immaterial to the meaning of the
    antecedent agreement.

[55]

Not only did the application judge take into
    account irrelevant subjective intentions, she failed to analyze the words that
    did appear in the antecedent agreement in light of the factual matrix, as is
    required to interpret an agreement:
Sattva
, at paras. 50 and 57. The
    March 7 letter from the respondents lawyer contains two clauses that bear on
    the interpretation of what was to be conveyed. These were not adverted to or
    analyzed by the application judge.

[56]

First, the description of what would be
    transferred does not end with a reference to Parts 1 to 4. Instead, that
    reference is followed by the clause: The Engineer for the project has advised
    my client [the respondent] that these 4 parts will be sufficient for the road
    which is to be built to access the subdivision. This statement goes beyond
    what was in Mr. Pattersons email to both parties. It instead refers to advice
    given directly to the respondent that describes what will be conveyed in
    functional terms, its key attribute being that it will be sufficient for the
    building of the Access Road. The statement is not qualified by anything
    indicating that the respondent holds a contrary view. Of critical importance,
    the statement that the respondent had received professional advice about the sufficiency
    of what will be conveyed and its implied corollary that the respondent held no
    contrary view, is included as part of the terms the respondent offered that,
    upon acceptance, became part of the antecedent agreement.

[57]

Second, the March 7 letter provided for an
    easement over the same lands as were to be transferred to facilitate the
    development of the proposed subdivision. This is another description of what
    was to be conveyed expressed in terms of its relationship to the ability to
    build the Access Road (and thus facilitate development of the proposed
    subdivision). The description of what the easement will accomplishfacilitate
    developmentis also made part of the terms that formed the antecedent
    agreement.

[58]

Two important consequences flow from a
    consideration of this language.

[59]

First, these terms of the antecedent agreement
    make this case quite different from
Fairmont
. That the lands conveyed
    would be sufficient to build the Access Road and would facilitate development
    was not simply an aspiration, an unspecified plan, an intended effect, or
    an inchoate or otherwise undeveloped intent, as was tax neutrality in
Fairmont
:
    see
Fairmont
, at paras. 30 to 31. That the lands would be sufficient
    for the Access Road and thus facilitate development is addressed in the terms
    of the antecedent agreement itself.

[60]

Second, the application judges statement that
    there was no representation or warranty by the respondent as to what was
    required for the Access Road was made without adverting to these terms, let
    alone giving them meaning. An agreement must be interpreted as a whole and by
    giving meaning to all of its terms:
Ventas, Inc. v. Sunrise Senior Living
    Real Estate Investment Trust
, 2007 ONCA 205, 222 O.A.C. 102, at para.
    24(a).

[61]

What meaning should be ascribed to the
    antecedent agreement stipulating that Parts 1 to 4 would be conveyed, but also
    stipulating that the respondent had received professional advice that Parts 1
    to 4 were sufficient for the Access Road and that an easement over those lands
    would facilitate development, without any qualification that the respondent
    held a different view? Although the words represent or warrant are not
    used, in my view, the language is most reasonably interpreted as having a
    similar effect, given that representations and warranties in an agreement are a
    manner of allocating risk between the parties:
0759594 B.C. Ltd. v. 568295
    British Columbia Ltd.
, 2013 BCCA 381, 49 B.C.L.R. (5th) 67, at para. 41.

[62]

The language of the March 7 letter is usefully compared
    to the agreement considered in
Lee v. 1435375 Ontario Ltd.
, 2013 ONCA
    516, 310 O.A.C. 187, at paras. 77-80. In
Lee
, the only term about
    zoning in an unconditional purchase agreement was one that specified that the
    real estate broker had advised the parties to obtain their own independent
    professional advice. That agreement was held to have allocated the risk of
    zoning to the purchaser.

[63]

In contrast to the agreement in
Lee
, the
    antecedent agreement in this case allocated, to the respondent, the risk that
    the lands described would be sufficient for the Access Road. It was a term of
    the antecedent agreement that the respondent had received professional advice
    that the lands conveyed were sufficient. That statement was not qualified in
    any way, including by any statement that the respondent held a different view
    about sufficiency. Parties to an agreement are under a duty of honest
    performance, under which they must not mislead each other about matters
    relevant to the contract:
Bhasin v. Hrynew
, 2014 SCC 71, [2014] 3
    S.C.R. 494, at para. 73. In light of that duty, the unqualified reference in
    the antecedent agreement to the respondent having received advice of
    sufficiency must be taken as meaning the advice was accurate in the
    respondents view. Otherwise there would be no reason to include it and the
    reference to such advice would be misleading.

[64]

The court should also seek to avoid an
    interpretation of a commercial contract that would result in commercial
    absurdity:
Toronto (City) v. W. H. Hotel Ltd.
, [1966] S.C.R. 434, at
    p. 440;
Ventas
, at para. 24(d). Rather, commercial contracts are to be
    construed in accordance with sound commercial principles and good business
    sense, objectively rather than from the perspective of one contracting party:
Kentucky
    Fried Chicken Canada v. Scotts Food Services Inc.
, 1998 CanLII 4427 (Ont.
    C.A.), at para. 27. Reading the antecedent agreement as providing a contractual
    assurance by the respondent that the lands transferred are sufficient for the
    Access Road accords with objectively sound commercial principles, as it gives
    appropriate significance to the term of the agreement which referred to advice
    only the respondent had received, and that did not invite further enquiry by
    the appellant or require it to satisfy itself. To read the antecedent agreement
    as only providing for a transfer of and easement over Parts 1 to 4, even if
    they were known by the respondent to be insufficient and incapable of
    facilitating development, would result in a commercial absurdity.

[65]

The factual matrixthe objective facts known to
    the parties at the time, including the genesis and aim of the transactionis
    examined to enhance the understanding of the words used:
Sattva
, at
    paras. 47-48. The application judge did not undertake that examination. Here,
    it supports an interpretation of the words used in the antecedent agreement that
    the risk with respect to the sufficiency of Parts 1 to 4 was on the respondent.
    The March 7 letter was in response to a direct request of the appellant for
    parts of the Adjacent Property that would allow it to meet the condition in the
    Draft Plan of Subdivision requiring the Janlyn Crescent connection. That was
    the genesis and aim of the transaction. These objective facts underscore the
    importance of the lands being described in the antecedent agreement as
    sufficient and an easement over them as facilitating development. In light of
    the factual matrix, these words cannot be viewed as surplus. An interpretation that
    allows the contract to function in furtherance of its commercial purpose is
    preferred over one that does not:
Humphries v. Lufkin Industries Canada
    Ltd.,
2011 ABCA 366, 68 Alta. L.R. (5th) 175, at para. 15.

(4)

Did the Prior Agreement Include an Obligation
    about Part 5?

[66]

Properly interpreting the words in light of
    the factual matrix raises a further interpretive question, namely whether the
    antecedent agreements requirements to transfer and grant an easement over
    Parts 1 to 4, together with its language about their sufficiency for the Access
    Road and to facilitate development, imposed an obligation about Part 5.

[67]

The application judge found that Part 5 was
    never discussed, let alone made part of a prior agreement. With respect, I do
    not believe that fully addresses the question.

[68]

First, as a factual matter, the request of
    the appellant that the respondent transfer all of the Adjacent Property, with
    an option to reacquire those parts not required to fulfill the access
    condition, put Part 5 into play, even though it was never separately mentioned.

[69]

Second, and more importantly, what a vendor
    must do under an agreement to transfer or create an easement over land is a
    function of both the agreements express terms and its implied terms, including
    terms implied to give an agreement business efficacy:
Dynamic Transport
    Ltd. v. O.K. Detailing Ltd.
, [1978] 2 S.C.R. 1072, at pp. 1084-1085. As
    noted in
M.J.B. Enterprises Ltd. v. Defence Construction (1951) Ltd
., [1999]
    1 S.C.R. 619, at para. 27, quoting
Canadian Pacific Hotels Ltd. v. Bank of
    Montreal
, [1987] 1 S.C.R. 711, a term will be implied into an agreement:

based on the presumed intention of the parties
    where the implied term must be necessary to give business efficacy to a
    contract or as otherwise meeting the officious bystander test as a term which
    the parties would say, if questioned, that they had obviously assumed.

[70]

It is not in dispute that the difference between
    sufficient and insufficient lands for the Access Road, or between what would
    and would not facilitate development, is whether Part 5 is included. In order
    for the respondent to comply with the express terms of the antecedent agreement
    about Parts 1 to 4 being sufficient and facilitating development, Part 5 had to
    be included; with it, Parts 1 to 4 are made to comply with the covenants about
    sufficiency and facilitation of development; without it, they do not.

[71]

In
Dynamic Transport
, the court found
    an implied term in a purchase agreement that was subject to approval under the
Planning Act
, R.S.A. 1970, c. 276, but silent on who would obtain it. The
    implied term was that the vendor was required to obtain the approval as only it
    could lawfully do so. At p. 1085, the court adopted with approval the following
    statement: When a person undertakes to do a thing which he can himself do, or
    has the means of making others do, the court compels him to do it, or procure
    it to be done, unless the circumstances of the case make it highly unreasonable
    to do soA vendor must do his best to obtain any necessary consent to the sale;
    if he has sold with vacant possession he must, if necessary, take proceedings
    to obtain possession from any person in possession who has no right to be there
    or whose right is determinable by the vendor.

[72]

Here, the respondent having promised to convey
    Parts 1 to 4 on the basis that they were sufficient, was obligated to do what
    was necessary to make them sufficient and which was in its power to do, namely,
    to include Part 5. The circumstances for implying a term about Part 5 were
    undoubtedly present. With Part 5, the agreement has business efficacy; without
    it, the agreement does not. It cannot seriously be disputed that if parties who
    had contracted in good faith for the terms found in the antecedent agreement
    had been asked, by an officious bystander, about whether Part 5 would be
    included if the Parts specified as sufficient were not in fact sufficient, they
    would have answered: obviously. The inclusion of Part 5 is an implied term of
    the parties true agreement.

(5)

Did the Transfer Agreement Accurately
    Record the Parties True Agreement?


[73]

It follows that the Transfer Agreement did not
    accurately record the parties prior agreement because it did not fully record
    it:
Fairmont,
at para. 14. It did not include the provisions of the
    antecedent agreement about Parts 1 to 4 being sufficient according to advice
    from the project engineer to the respondent, or about the easement facilitating
    the development of the subdivisionterms which put the risk about such matters
    on the respondent. Nor did it include the implied term necessary to give the
    prior agreement business efficacy. Because Parts 1 to 4 were not sufficient and
    would not facilitate the development (as was known to the respondent only),
    this variation between the antecedent agreement and the Transfer Agreement was
    material.

(6)

Can Part 5 be Included in the Transfer Agreement
    by Rectification if it was not Expressly Mentioned in the Prior Agreement?

[74]

In this case, the request for rectification
    is not a request to include the exact language from the antecedent agreement in
    the Transfer Agreement, but to include Part 5 in it. The appellant does not ask
    for the inclusion, in the Transfer Agreement, of a representation and warranty
    about the sufficiency of Parts 1 to 4, or of language from which an obligation
    about Part 5 might be implied. It asks for the express inclusion of Part 5.

[75]

As rectification is available to correct a document
    that does not record the parties true agreement, but is not available to fill
    in something that was never agreed to, the precise nature of the actual
    correction must be approached with caution. An applicant for rectification must
    show the precise form in which the written instrument can be made to express
    the prior agreement. As stated in
Performance Industries Ltd. v. Sylvan
    Lake Golf & Tennis Club Ltd.
,

2002 SCC 19, [2002] 1 S.C.R.
    678, at para. 40, [t]his requirement closes the floodgates to those who
    would invite the court to speculate about the parties unexpressed intentions,
    or impose what in hindsight seems to be a sensible arrangement that the parties
    might have made but did not.

[76]

In my view, in the circumstances of this
    case, the appropriate correction is to add Part 5 to the Transfer Agreement. I
    reach this conclusion for two reasons.

[77]

First, as the above analysis shows, an
    obligation about Part 5, as something necessary to the fulfilment of the terms
    agreed to about sufficiency for the Access Road, was part of the parties true
    agreement. Adding Part 5 to the Transfer Agreement does not extend beyond the
    express and implied terms of the prior agreement when properly interpreted.
    Adding Part 5 would not fill in something that existed only in the
    extra-contractual and speculative netherworld of inchoate or unexpressed
    aspirations.

[78]

Second, adding Part 5 is faithful to the
    way the parties chose to move from the language of the prior agreementwhich
    identified Parts and described their sufficiencyto the Transfer Agreement,
    which described Parts only without added description as to their functionality
    regarding the Access Road. That could be done, without changing the meaning of
    the prior agreement, only by including the right Parts.

[79]

This approach follows that taken by the
    Supreme Court in
Performance Industries
.

In that case, a
    formal joint venture agreement described an option for a residential
    development having a width of 110 feet and a length of 480 yards. Rectification
    of that document was granted to change the width from 110
feet
to 110
yards
. The
    court found an oral antecedent agreement that was incorrectly recorded in the
    formal joint venture agreement, even though the discussion leading up to the
    oral agreement did not include any metes and bounds description. Feet and yards
    were never discussed. What was important was that the discussion revealed what
    was intended to be built (a double row of town houses) from which it was clear
    that what was required was a sufficient width for that type of project. The
    width of 110 feet, inserted into the formal joint venture agreement by one
    party, knowing that it was insufficient and not noticed by the other party, did
    not meet that requirement; 110 yards did.

[80]

Accordingly, in
Performance Industries
,
    the parties did not have an antecedent agreement on a precise boundary or that
    included a metes and bounds description, and they had never orally agreed using
    the words 110 yards. However, they had an adequate antecedent agreement to
    permit rectification to specify 110 yards because there was a definite project
    in a definite location to which [the parties] had given their definite
    assent...they were working on a defined development proposal:
Performance
    Industries
, at paras. 48-49.

That was sufficient to support
    rectification of the formal agreement into which one party had inserted the
    inadequate width of 110 feet and knew the other had not detected this:
Performance
    Industries
, at para. 15.

[81]

Importantly, the court rejected the
    argument that the joint venture agreement could not be rectified to include a
    measurement that the parties had never discussed. Having chosen to reflect the
    effect of the prior agreement in metes and bounds measurements, the party who
    inserted an inadequate measurement could not object to the substitution of the
    adequate measurement:

Although the parties did not discuss a metes
    and bounds description, they were working on a defined development proposal.
    OConnor cannot complain if the numbers he inserted in clause 18 (110 x 480)
    are accepted and confirmed. The issue, then, is the error created by his
    apparently duplicitous substitution of feet for yards in one dimension. We know
    the 480 must be yards because it measures the 18th fairway. If the 110 is
    converted from feet to yards, symmetry is achieved, certainty is preserved and
    Bells position is vindicated:
Performance Industries
, at para. 49.

[82]

Similarly, here, there was a defined
    development (the Access Road) and a defined location (connecting the
    Development Lands to Janlyn Crescent). The language in the antecedent
    agreement, that the Parts conveyed would be sufficient for the access road
    and an easement over them would facilitate development, as well as the term
    that should be implied to give the prior agreement business efficacy, connotes
    the parties assent to the defined development and the defined location.

[83]

As in
Performance Industries,
the
    absence of a specific mention of Part 5 in the antecedent agreement does not
    prevent the conclusion that an adequate antecedent agreement existed justifying
    the inclusion of Part 5 in the Transfer Agreement. The Transfer Agreement
    expressed the terms of the antecedent agreement by a reference only to specific
    Parts without a statement about their sufficiency. As noted above, this could
    be done, without changing the meaning of the antecedent agreement, only by
    specifying Parts that were sufficient for the Access Road. The respondent was
    aware of both the insufficiency of the Parts referred to in the Transfer
    Agreement and of the appellants mistake about this. The respondent cannot
    complain now that the Parts only methodology it agreed to in the Transfer
    Agreement necessitates the inclusion of the additional Part required to make
    those referred to sufficient, so as to fully conform to the meaning of the antecedent
    agreement.

[84]

Accordingly, step (iii) of the rectification
    test was met. The application judge erred in concluding otherwise.

(7)

The Mistake and Equivalent to Fraud Elements of
    the Rectification Test

[85]

As discussed above, the
Fairmont
analysis provides for six steps in cases of unilateral mistake. Consideration
    of certain of the steps presupposes satisfaction of a prior step. This is the
    case regarding step (vi), which required the application judge to consider
    whether permitting the respondent to take advantage of the appellants mistake
    would amount to fraud or the equivalent of fraud. Both the applications
    judges consideration of this step and the manner in which she did so
    necessarily entails the conclusion that she was satisfied that step (v) was
    met, namely that the appellant had made a mistake about the terms of the
    Transfer Agreement and that the respondent was aware of the appellants
    mistake.

[86]

The application judges finding that step (vi)
    was not met is summarized at para. 44 of her reasons:

Further the applicant failed to satisfy
    requirement (vi), because permitting the respondent to take advantage of the unilateral
    mistake made by the applicant does not amount to fraud or the equivalent of
    fraud on the part of the respondent. The applicant signed a waiver with respect
    to the agreement and accepted the land on an as is, where is basis. There is
    no clause in either the agreement or parts agreement that stipulates that the
    respondent will convey all lands necessary for the development of the access
    road. I agree that the respondent did not intentionally deceive the applicant
    and that the applicant should have verified the boundaries prior to executing
    the parts agreement.

[87]

In my view, the application judge erred in law in
    reaching that conclusion. The fact that the appellant waived the due diligence
    condition in the February Agreement has no bearing on whether the antecedent
    agreement of March 7 was accurately recorded in the Transfer Agreement. As
    explained, the application judges statement that the February Agreement and
    Transfer Agreement did not contain a term that the respondent must convey all
    lands necessary for the Access Road is off point. The question was whether the
    antecedent agreement did in fact contain such a term, which was not reflected
    in the Transfer Agreement. The statement that the appellant should have
    verified the boundaries was in error in light of the Supreme Courts rejection
    of a lack of due diligence as an absolute bar to rectification:
Performance
    Industries
, at para. 36. Moreover, the application judges statement that
    the respondent did not intentionally deceive the appellant does not advert to
    the proper test. Deceit or fraud in the strict legal sense is unnecessary;
    rather the court looks for conduct that makes it unconscientious for a person
    to avail himself of the advantage obtained and includes all kinds of unfair
    dealing and unconscionable conduct:
Performance Industries
, at para.
    39.

[88]

The respondents principal was aware that the
    Access Road was the reason why the appellant wanted the transfer and easement.
    He was aware of the terms of the antecedent agreement and that it referred to
    advice received by the respondent regarding the sufficiency of the lands for
    the Access Road. Indeed, although he suggested that his lawyer ought not to
    have used the word sufficient in the March 7 letter, he admitted in
    cross-examination to seeing the March 7 letter after it was sent, and there was
    no evidence of any effort to revise or correct it. He was aware that the lands
    could only be sufficient with Part 5; Parts 1 to 4 were insufficient if Part 5
    was not included. And he was aware that the formal Transfer Agreement only
    referred to Parts 1 to 4. In my view, the respondents explanation for its
    behaviour, a concern that the appellant might not close the purchase of the
    Development Lands unless it thought it was getting what it needed for the
    Access Road, accentuates rather than attenuates the unfair and unconscionable
    nature of the respondents conduct, which was to lead, or knowingly allow, the
    appellant to think it was getting what it needed. In my view, element (vi) of
    the rectification test was met in these circumstances.

(8)

Did the Appellant Come to Court with Clean
    Hands?

[89]

Correcting the errors in the application judges
    analysis results in the conclusion that the appellant had made out a proper
    claim for rectification. I now turn to consider the application judges finding
    that the appellant lacked clean hands and was thus barred from obtaining
    rectification. Her finding was premised on what she considered to be three
    breaches of the Transfer Agreement. In my view, each is the product of an
    unreasonable reading of the terms of the Transfer Agreement. The application
    judges reading of that document did not conform to the language used.

[90]

First, the application judge stated that the
    appellant breached the provisions of the Transfer Agreement which required it
    to use best efforts to obtain the Committee of Adjustments consent to a
    severance. This finding misreads the Transfer Agreement. The appellant was
    entitled, as an alternative to obtaining consent to a severance, to require the
    respondent to make the transfer to the City. It elected to do so, obtained the
    Citys consent to a transfer, and provided the respondent with a transfer
    document to sign to that effect.

[91]

Second, the application judge stated that the
    Transfer Agreement became null and void on September 10, 2018 because the
    appellant only provided the transfer document to the respondent on September 7,
    2018, and the respondent was entitled to 7 business days to sign. Again, this
    misreads the Transfer Agreement. The requirement for 7 days to sign was in
    respect of severance-related documents and specified the time after which the
    appellant could sign the documents on the respondents behalf. It did not apply
    to documents that were designed to effect the alternative to severance (a
    transfer to the City). Nor in any event did that requirement allow the
    respondent to rely on its own delay in signing to declare the Transfer
    Agreement null and void.

[92]

Finally, the application judge stated that the
    appellant failed to restore municipal services to the new lot line and failed
    to provide assurances that it would do so. However, the Transfer Agreement
    required the municipal services to be restored following the severance and
    construction of the new Access Road. Even though there was to be a transfer to
    the City rather than a severance, the Access Road was not expected or required
    to have been constructed before the transfer even occurred; the time for
    restoring the municipal services had clearly not arrived. The Transfer
    Agreement itself was the assurance that the appellant would do so; there was
    nothing in it that required any further assurance.

[93]

The application judge thus erred in finding that
    the appellant had unclean hands by breaching the Transfer Agreement.

REMEDY

[94]

The application judge did not determine what
    remedy would be appropriate if rectification were ordered.

[95]

The appellant asked that if rectification were
    granted, specific performance of the rectified Transfer Agreement should be
    ordered. The respondent argued that specific performance could not be ordered
    because the application judge found that the Transfer Agreement had come to an
    end. I have determined that the application judge erred when she found that the
    Transfer Agreement came to an end on September 10, 2018, given that the
    respondent could not rely on its own delay to bring about that result.

[96]

The respondent did not argue the absence of any
    other requirements for an order for specific performance. The property is
    unique, in the sense that it is uniquely positioned to fulfill the requirements
    for the Access Road, and therefore specific performance would be an appropriate
    remedy:
Semelhago v. Paramadevan
, [1996] 2 S.C.R. 415, at paras.
    21-23.

CONCLUSION

[97]

Accordingly, I would allow the appeal and
    substitute an order that the Transfer Agreement be rectified so that it
    includes Part 5 in the definition of Property, and that it be specifically
    performed as rectified. The parties should return to the Superior Court to deal
    with any issues that may arise out of the order and for any necessary
    directions to carry out its terms.

[98]

The appellant is entitled to its costs of the
    appeal, fixed in the sum agreed between the parties, namely $13,000, inclusive
    of disbursements and applicable taxes. The parties did not address the
    disposition of the costs below in the event of a successful appeal. They may do
    so in writing. The appellants submissions, not to exceed three pages, shall be
    delivered within 10 days of the release of these reasons. The respondents
    submissions shall be delivered within 10 days of the delivery of the
    appellants submissions.

Released: M.T.  April 29, 2020

B.
    Zarnett J.A.

I
    agree. M. Tulloch J.A.

I
    agree. K. van Rensburg J.A.





[1]
The purchaser in the February Agreement is described as 2345221
    Ontario Inc., in trust for a company to be incorporated.



[2]
The Transfer Agreement describes the purchaser as 2482234 Ontario
    Inc.


