



COURT OF APPEAL FOR ONTARIO

CITATION: Preiano v. Cirillo, 2017 ONCA 615

DATE: 20170724

DOCKET:
C63065

Sharpe, Lauwers and Roberts JJ.A.

BETWEEN

Sonia Preiano and Gianluca
    Preiano

Plaintiffs (Appellants)

and

Giuseppe Cirillo, the
    Estate of Giuseppe Cirillo and Antonia Cirillo

Defendants
    (Respondents)

Michael Freeman and Vusumzi Msi, for the
    appellants

Ben Hahn, for the respondents

Heard: July 19, 2017

On appeal from the order of Justice Kofi N. Barnes of the
    Superior Court of Justice, dated
November 10, 2016
.

REASONS FOR DECISION

[1]

The appellant purchasers sued the respondent
    vendors for specific performance of an Agreement of Purchase and Sale regarding
    the respondents home (the APS). The respondents brought a motion for the
    determination of a question of law under r. 21.01(1)(a) of the
Rules
    of Civil Procedure
, R.R.O. 1990, Reg. 194
. The motion
    judge dismissed the action, leading to this appeal.

A.

The Factual Context

[2]

On August 20, 2013, at the time they signed the
    draft APS by which they offered to buy the respondents house, the appellants delivered
    a $25,000 personal cheque as the deposit to Frank Finelli of Royal LePage, the respondents
    real estate agent. Mr. Finelli told the appellants that the personal cheque would
    have to be replaced with $25,000 in certified funds if the respondents accepted
    the APS. On behalf of Royal LePage, Mr. Finelli retained the appellants
    personal cheque although he did not attempt to deposit it.

[3]

The parties reached agreement at 12:30 p.m. on
    August 21, 2013. The APS required the appellants to pay the deposit of $25,000
    CAD within 24 hours of the acceptance, or by 12:30 p.m. on August 22, 2013. The
    APS stated that time shall be of the essence. They delivered $25,000 in
    certified funds in the form of a bank draft to the deposit holder, Royal
    LePage, by 1:53 p.m. on August 23, 2013.  Royal LePage provided the appellants
    with a receipt for their deposit.

[4]

On November 14, 2013, counsel for the
    respondents wrote to the appellants real estate lawyer asserting that there was
    no valid APS because of the late receipt of the deposit. This was six days
    before the scheduled closing date of November 20, 2013 set out in the APS. The
    letter concluded:

My clients are willing to return the sum of
    $25,000.00 allegedly paid by your clients, but cannot in good faith, knowing
    the improprieties on the part of the agent, the undue influence and pressure
    upon the clients to sign the document and the anomalies and inconsistencies in
    the document itself, proceed with this as some valid transaction.

(1)

The Motion Judges Approach

[5]

The evidence considered by the motion judge was
    adduced not by means of affidavits, but by a carefully arranged sequence of
    demands for particulars coupled with requests to admit under r. 51 issued by
    the respondents. The result was a set of terse written responses with little or
    no possibility of explanation.

[6]

The appellants point out that the respondents
    did not actually move for the admission of the evidence, but simply relied on
    it during argument. However, on his own motion the motion judge granted leave
    to the defendants to file evidence on the motion so that the interpretation of
    the APS would not occur in an evidentiary vacuum. While r. 21.01(2)(a)
    permits a motion judge to admit evidence on a motion under r. 21.01(1)(a), the
    appellants argue that the motion judge did not exercise his discretion fairly.

[7]

The result was effectively a motion under r. 20
    for summary judgment without any of the carefully balanced protections to all
    parties provided by that rule and the jurisprudence under it.

(2)

The Motion Judges Decision

[8]

The motion judge found that because the bank
    draft was delivered a day late, there was no APS in effect to be specifically
    performed and he dismissed the action on that basis. He found that the APS was breached,
    although it might be more accurate to express his understanding that the APS
    expired by its own terms.

B.

Discussion

[9]

Several issues arise from these facts. First,
    the APS provided for a Deposit of $25,000 by negotiable cheque payable to
    Royal LePage Realty Centre. It stated that: the Buyer is required to deliver
    the deposit to [Royal LePage] within 24 hours of the acceptance of this
    Agreement. The appellants provided a personal cheque in that amount to the
    vendors agent, Mr. Finelli, with the signed APS. Mr. Finelli believed that the
    cheque was capable of being cashed, although it was never presented for
    payment.

[10]

However, based on the evidence, the
    admissibility of which is disputed, the motion judge found that the personal
    cheque was not capable of yielding funds upon negotiation because the record
    of the chequing account, which was admitted by the appellants to be authentic, did
    not show a balance that could accommodate payment of the cheque.

[11]

With respect, the record was not sufficient for
    the motion judge to draw the inference that the cheque was not negotiable. The
    motion judge made the error of interpreting the admission that the bank
    statement was authentic as an admission that the appellants did not have the
    money to pay the cheque, so that upon presentation, it would have been
    dishonoured by the bank. This additional inference was not open to the motion
    judge:
Wunsche v. Wunsche
, 18 O.R. (3d) 161,
    [1994] O.J. No. 816 (C.A.), at para. 19 (QL).

[12]

There is no evidence that the bank would not
    have honoured the cheque, nor is there evidence in the record as to the appellants
    financial capacity or their arrangements with the bank. There is evidence that
    within two days they were able to provide a bank draft in the appropriate
    amount.

[13]

On this basis alone the order under appeal must
    be set aside.

[14]

There is accordingly no need for us to address
    the issues of part performance, waiver and estoppel, and the application of the
    entire agreement clause in the APS to any possible waiver, which arose in
    oral argument and in the factums. These issues were not fully argued and there
    is no adequate evidentiary basis on which to address them.

C.

Disposition

[15]

The motion judges determination that the
    appellants failed to pay the requisite deposit on a timely basis was made in
    error. The order is set aside and the action, cross-claims and third party
    claims are restored to the trial list.

[16]

The appellants argue that the motion judge erred
    in not granting them leave to amend the Statement of Claim with text that would
    have better explained the events around the negotiation of the APS and the
    delivery of the deposit. The motion judges reason for refusing leave was
    rooted in his finding that the deposit was not paid in time. We grant the
    appellants leave to amend.

[17]

The respondents shall pay costs to the
    appellants in the amount of $15,000 inclusive of disbursements and taxes for
    this appeal and the motion below.

Robert
    J. Sharpe J.A.

P.
    Lauwers J.A.

L.B.
    Roberts J.A.


